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 MARCH 31, 1998

                                       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)


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

4830 W. Kennedy Blvd., Suite 548, Tampa, FL                          33609
(Address of principal executive offices)                           (Zip Code)

Registrant's telephone number, including area code:           (813) 286-4401

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 May 12,
1998 was 8,427,699.

<PAGE>





                          BENTLEY PHARMACEUTICALS, INC.
                 FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1998
                                      INDEX



Part I.   FINANCIAL INFORMATION                                             PAGE


          Item 1.   Consolidated Financial Statements:

                    Consolidated  Balance  Sheets as of March 31, 1998
                    (unaudited) and December 31, 1997                          3

                    Consolidated  Statements of Operations (unaudited)
                    for the three months ended March 31, 1998 and 1997         4

                    Consolidated Statement of Changes in Common
                    Stockholders' Equity (unaudited) for the three
                    months ended March 31, 1998                                5

                    Consolidated  Statements of Cash Flows (unaudited)
                    for the three months ended March 31, 1998 and 1997         6

                    Notes to Consolidated Financial Statements (unaudited)     8


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


Part II.  OTHER INFORMATION                                                   15







                                       2
<PAGE>


                          BENTLEY PHARMACEUTICALS, INC.
                           CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

                                                  (Unaudited)
                                                    March 31,     December 31,
                                                       1998          1997
                                                     --------      --------
ASSETS
------

Current assets:
 Cash and cash equivalents                          $ 10,592      $ 11,117
 Receivables                                           2,216         2,428
 Inventories                                             625           714
 Prepaid expenses and other                              909           750
                                                    --------      --------
  Total current assets                                14,342        15,009
                                                    --------      --------

Fixed assets, net                                      2,784         2,918
Drug licenses and related costs, net                     649           691
Other non-current assets, net                          2,897         2,425
                                                    --------      --------
                                                    $ 20,672      $ 21,043
                                                    ========      ========

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------

Current liabilities:

 Accounts payable                                   $  1,556      $  1,493
 Accrued expenses                                      2,044         1,723
 Short term borrowings                                   490         1,140
 Current portion of long term debt                         5             5
                                                    --------      --------
  Total current liabilities                            4,095         4,361
                                                    --------      --------
Long term debt, net                                    5,355         5,329
                                                    --------      --------
Other non-current liabilities                            106           110
                                                    --------      --------
Commitments and contingencies

Redeemable preferred stock, $1.00 par value,
 authorized 2,000 shares:
  Series A, issued and outstanding, 60 shares          2,372         2,338
Common Stockholders' Equity
 Common stock, $.02 par value, authorized
 35,000 shares, issued and outstanding,
 8,428 and 8,426 shares                                  168           168
Stock purchase warrants                                  556           192
Paid-in capital in excess of par value                81,356        81,382
Accumulated deficit                                  (71,365)      (70,982)
Cumulative foreign currency
 translation adjustment                               (1,971)       (1,855)
                                                    --------      --------
                                                       8,744         8,905
                                                    --------      --------
                                                    $ 20,672      $ 21,043
                                                    ========      ========


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

                                        3


<PAGE>


                          BENTLEY PHARMACEUTICALS, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (unaudited)

(In thousands, except per share data)

                                                              For the Three
                                                               Months Ended
                                                                March 31,
                                                          ---------------------
                                                            1998          1997
                                                          -------       -------

Sales                                                     $ 3,500       $ 4,078

Cost of sales                                               1,510         2,288
                                                          -------       -------

Gross margin                                                1,990         1,790
                                                          -------       -------

Operating expenses:

 Selling, general and administrative                        1,924         1,904

 Research and development                                      33            66

 Depreciation and amortization                                 60            84
                                                          -------       -------

  Total operating expenses                                  2,017         2,054
                                                          -------       -------

Loss from operations                                          (27)         (264)

Other (income) expenses:

 Interest expense                                             270           320

 Interest income                                             (148)          (17)

 Provision for unrealized exchange loss                      --             243

 Other (income) expense, net                                 --              16
                                                          -------       -------

Loss before income taxes                                     (149)         (826)

Provision for income taxes                                    234          --
                                                          -------       -------

Net loss                                                     (383)         (826)

Other comprehensive loss:

Foreign currency translation losses                         (116)          (263)
                                                          -------       -------

Comprehensive loss                                        ($  499)     ($ 1,089)
                                                          =======       =======

Basic net loss per common share                           ($ 0.05)      ($ 0.26)
                                                          =======       =======

Weighted average common shares outstanding                  8,427         3,346
                                                          =======       =======



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


                                        4


<PAGE>


                          BENTLEY PHARMACEUTICALS, INC.
        CONSOLIDATED STATEMENT OF CHANGES IN COMMON STOCKHOLDERS' EQUITY
                                   (unaudited)

(In thousands, except per share data)

<TABLE>
<CAPTION>
                                         $.02 Par Value
                                           Common Stock       Additional                 Other
                                       --------------------    Paid-In   Accumulated    Equity
                                        Shares      Amount      Capital     Deficit  Transactions    Total
                                       --------    --------    --------    --------    --------    --------
<S>                                       <C>      <C>         <C>         <C>         <C>         <C>     
Balance at December 31, 1997              8,426    $    168    $ 81,382    ($70,982)   ($ 1,663)   $  8,905

Exercise of stock options/warrants            2        --             8        --          --             8

Issuance of stock options/warrants         --          --          --          --           364         364

Accrual of dividends-preferred stock       --          --           (34)       --          --           (34)

Foreign currency translation               --          --          --          --          (116)       (116)
adjustment

Net loss                                   --          --          --          (383)       --          (383)
                                       --------    --------    --------    --------    --------    --------
Balance at March 31, 1998                 8,428    $    168    $ 81,356    ($71,365)   ($ 1,415)   $  8,744
                                       ========    ========    ========    ========    ========    ========
</TABLE>




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


                                        5

<PAGE>

                          BENTLEY PHARMACEUTICALS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)
                                                                 For the Three
                                                                  Months Ended
                                                                    March 31,
                                                                ---------------
(In thousands)                                                   1998      1997
                                                                -----     -----
Cash flows from operating activities:
 Net loss                                                       ($383)    ($826)
 Adjustments to reconcile net loss
 to net cash provided by (used in) operating activities:
 Depreciation and amortization                                     60        84
 Other non-cash items                                             (25)      324
 (Increase) decrease in assets and
   increase (decrease) in liabilities:
   Receivables                                                    157       223
   Inventories                                                     70        58
   Prepaid expenses and other current assets                     (166)       41
   Other assets                                                   (69)       (2)
   Accounts payable and accrued expenses                          447      (617)
   Other liabilities                                               (1)       (2)
                                                                -----     -----

    Net cash provided by (used in) operating activities            90      (717)
                                                                -----     -----

Cash flows from investing activities:
 Disposals (additions) to fixed assets                             14       (37)
 Acquisition of Spanish drug license                             --         (40)
                                                                -----     -----
    Net cash provided by (used in) investing activities            14       (77)
                                                                -----     -----




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

                                        6

<PAGE>


                          BENTLEY PHARMACEUTICALS, INC.
                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONCLUDED)
                                   (unaudited)
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                  For the Three
                                                                   Months Ended
                                                                     March 31,
                                                               --------------------
                                                                 1998        1997
                                                               --------    --------
<S>                                                            <C>         <C>     
Cash flows from financing activities:
 Net (decrease) increase in short term borrowings              ($   635)   $    143
 Proceeds from exercise of stock options/warrants, net                8           5
 Payments on capital leases                                          (1)         (1)
                                                               --------    --------

    Net cash (used in) provided by financing activities            (628)        147
                                                               --------    --------

Effect of exchange rate changes on cash                              (1)       (277)
                                                               --------    --------

Net decrease in cash and cash equivalents                          (525)       (924)

Cash and cash equivalents at beginning of period                 11,117       4,425
                                                               --------    --------

Cash and cash equivalents at end of period                     $ 10,592    $  3,501
                                                               ========    ========

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

 Interest                                                      $    232    $    233
                                                               ========    ========
 Taxes                                                             --      $     12
                                                               ========    ========

SUPPLEMENTAL DISCLOSURES OF NON-CASH FINANCING ACTIVITIES
The Registrant has issued Common Stock and Warrants in 
exchange for services as follows (in thousands):

 Shares issued                                                     --             1
                                                               ========    ========
 Amount                                                            --      $      2
                                                               ========    ========
</TABLE>

The Registrant  issued  Warrants to purchase  425,000 shares of Common Stock, in
exchange for services, during the three months ended March 31, 1998.

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


                                        7

<PAGE>

                          BENTLEY PHARMACEUTICALS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


BASIS OF CONSOLIDATED FINANCIAL STATEMENTS:

The  consolidated  financial  statements of Bentley  Pharmaceuticals,  Inc. (the
"Registrant"), at March 31, 1998 and 1997 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, 1997.

The consolidated financial statements include the accounts of the Registrant and
its wholly owned  subsidiaries:  Bentley  Healthcare  Corporation  (f/k/a Belmac
Healthcare  Corporation) and its wholly owned subsidiary - Belmac Hygiene, Inc.,
Belmac Health Corp., B.O.G.  International  Finance, Inc., Belmac Jamaica, Ltd.,
Laboratorios Belmac,  S.A.,  Chimos/LBF S.A. until its divestiture in June 1997,
and Belmac  Holdings,  Inc. and its wholly owned  subsidiary - Belmac A.I., Inc.
All significant intercompany balances have been eliminated in consolidation. The
financial  position  and  results  of  operations  of the  Registrant'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 Common  Stockholders'  Equity.  Foreign currency  translation  gains and
losses arising from cash transactions are credited to or charged against current
earnings.

The Registrant  divested its French  subsidiary,  Chimos/LBF,  S.A. (referred to
herein  as  Chimos/LBF),   in  June  1997  for  approximately  $3,650,000.   The
Registrant's  operations in France consisted of the low margin brokerage of fine
chemicals,  sourcing of raw materials and pharmaceutical  intermediaries and the
distribution of biotechnology or orphan drugs.

The  Registrant  has  entered  into a  negotiated  letter of intent to  purchase
domestic  and  international  rights to a portfolio  of branded  drugs,  with an
emphasis in gastrointestinal  products,  and a manufacturing facility located in
Mequon,  Wisconsin,  from Schwarz Pharma, Inc. The letter of intent,  dated July
21, 1997, was recently amended to take into  consideration the possible transfer
of control of the  Registrant's  Spanish  subsidiary,  Laboratorios  Belmac,  to
Schwarz Pharma USA Holdings,  Inc. and will serve as the basis for  negotiations
for the definitive agreements. The proposed transaction is subject to completion
of due diligence,  the execution of such  definitive  agreements and approval of
the Registrant's stockholders and


                                       8
<PAGE>



Debenture  holders.  Upon execution of the letter of intent,  the Registrant was
required  to remit a  non-refundable  deposit  in the  amount of  $100,000.  The
Registrant  has also  capitalized  other costs totaling  approximately  $947,000
related to this proposed  acquisition and has included them in other non current
assets, net.

In the opinion of management,  the accompanying unaudited consolidated financial
statements for the period ended March 31, 1998 and 1997 are presented on a basis
consistent with the audited consolidated financial statements for the year ended
December  31,  1997 and  contain  all  adjustments,  consisting  only of  normal
recurring  adjustments  necessary to present fairly the  Registrant's  financial
position as of March 31, 1998,  and the results of its  operations  and its cash
flows for the three  months  ended  March 31,  1998 and  1997.  The  results  of
operations  for the three months  ended March 31, 1998 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.

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):

<TABLE>
<CAPTION>
                                                   March 31, 1998     December 31, 1997
                                                   --------------     -----------------
<S>                                                     <C>               <C>  
Raw Materials                                           $ 368             $ 338
Finished Goods                                            367               501
                                                        -----             -----
                                                          735               839
Less: Allowance for slow moving or obsolete inventory    (110)             (125)
                                                        -----             -----
                                                        $ 625             $ 714
                                                        =====             =====
</TABLE>

PROVISION FOR INCOME TAXES:

The  Registrant  has  previously  utilized all of its Spanish net operating loss
carryforwards. As a result, the Registrant recorded a provision for income taxes
totaling  $234,000  for the three  months  ended  March 31,  1998 as a result of
taxable income 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" (FAS 128). FAS 128
provides for new


                                       9
<PAGE>



accounting  principles  used in the  calculation  of  earnings  per share and is
effective for  financial  statements  for both interim and annual  periods ended
after December 15, 1997. The Registrant has  recalculated the basic net loss per
common share for all periods presented to give effect to FAS 128.

Basic  net loss per  common  share is based on the  weighted  average  number of
shares of common stock  outstanding  during the period.  Diluted loss per common
share is not presented, as it is antidilutive. Stock options, stock warrants and
convertible  debentures  are the only  securities  issued  which would have been
included in the diluted loss per share calculation.






                                       10
<PAGE>



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


RESULTS OF OPERATIONS:

Three Months Ended March 31, 1998 versus Three Months Ended March 31, 1997
--------------------------------------------------------------------------

The  Registrant  reported  revenues of $3,500,000  and a net loss of $383,000 or
$.05 per common  share for the three  months  ended March 31,  1998  compared to
revenues of  $4,078,000  and a net loss of $826,000 or $.26 per common share for
the same period in the prior year.

The 14%  decrease  in  revenues  is  primarily  attributable  to the  June  1997
divestiture of the Registrant's French subsidiary,  Chimos/LBF,  which generated
approximately  $1,095,000  in sales  during the  quarter  ended  March 31,  1997
compared  with no sales during the quarter  ended March 31, 1998.  This decrease
was  partially  offset by a 19%  increase in sales by the  Registrant's  Spanish
subsidiary,  Laboratorios  Belmac S.A., to  $3,454,000  during the quarter ended
March 31, 1998.  Gross  margins for the quarter ended March 31, 1998 improved to
57%, compared to 44% in the comparable period of the prior year,  primarily as a
result of the higher proportionate sales generated by Laboratorios Belmac during
the quarter ended March 31, 1998 compared to the  combination of sales generated
by Laboratorios  Belmac and Chimos/LBF  during the quarter ended March 31, 1997.
The  Registrant's  distribution  operations  in  France,  Chimos/LBF,  generated
relatively low gross margins  (approximately 22% for the quarter ended March 31,
1997) compared to the  Registrant's  Spanish  subsidiary,  Laboratorios  Belmac,
which is experiencing  substantially  higher margins  (approximately 57% for the
quarter ended March 31, 1998).

Selling,  general and administrative expenses were $1,924,000,  or 55% of sales,
for the three  months  ended March 31, 1998  compared to  $1,904,000,  or 47% of
sales,  for the same  period in the prior  year.  As a result of the  decline in
revenues,  selling, general and administrative expenses as a percent of revenues
increased  during the  quarter  ended  March 31,  1998,  as compared to 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  plans to increase
sales  and  market  share  in  Spain.  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 $33,000 for the quarter ended March 31,
1998  compared to $66,000  for the same  period of the prior  year.  The minimal
expenditures in research and  development  reflects the  Registrant's  continued
de-emphasis of basic research and redirection of its resources to  developmental
expenses necessary for expansion of its portfolio


                                       11
<PAGE>



of marketed products. The Registrant intends to continue to carefully manage its
research  and  development  expenditures  in the  future in view of its  limited
resources.

Interest expense was $270,000 for the three months ended March 31, 1998 compared
to $320,000 for the same period of the prior year.  Interest income was $148,000
for the three  months  ended  March 31,  1998,  compared to $17,000 for the same
period of the prior year.  The increase  was with respect to interest  earned on
higher short-term  interest bearing investment balances during the first quarter
of 1998,  which  resulted  from the  proceeds of the  exercise of  approximately
4,900,000 Class A Warrants during the fourth quarter of 1997. As a result of the
then  proposed  sale of  Chimos/LBF,  the  Registrant  recorded a provision  for
unrealized exchange loss of $243,000 in the first quarter of 1997 resulting from
a  fluctuation  in the  currency  exchange  rate used to  translate  the foreign
currency financial statements.

The Registrant  recorded a provision for income taxes totaling  $234,000 for the
three months ended March 31, 1998 as a result of taxable income earned in Spain.

The Registrant  reported a loss from  operations for the quarter ended March 31,
1998 of $27,000  compared  to a loss from  operations  of  $264,000  in the same
period of the prior year  primarily  as a result of  improved  gross  margins on
growing  sales in  Spain  and  controlled  operating  expenses.  The  effect  of
combining non-operating items, primarily interest expense of $270,000,  interest
income of $148,000 and income tax expense of $234,000  resulted in a net loss of
$383,000,  or $.05 per  common  share for the  quarter  ended  March  31,  1998,
compared to the loss in the comparable period of the prior year, of $826,000, or
$.26 per common share.

LIQUIDITY AND CAPITAL RESOURCES:

Total assets  decreased from  $21,043,000 at December 31, 1997 to $20,672,000 at
March 31, 1998, while Common  Stockholders'  Equity decreased from $8,905,000 at
December  31,  1997 to  $8,744,000  at March 31,  1998.  The  decrease in Common
Stockholders' Equity reflects primarily the fluctuation in the exchange rates of
the  Spanish  Peseta  compared to the U.S.  Dollar and the loss  incurred by the
Registrant  for the three months  ended March 31, 1998,  offset by the effect of
issuance of stock purchase warrants during the first quarter of 1998.

The Registrant's working capital decreased from $10,648,000 at December 31, 1997
to  $10,247,000 at March 31, 1998,  primarily as a result of the  fluctuation of
exchange rates and the loss incurred by the Registrant during the period.

Cash and cash  equivalents  decreased  from  $11,117,000 at December 31, 1997 to
$10,592,000 at March 31, 1998,  primarily as a result of repayment of short-term
borrowings  during  the  period.  Included  in cash  and  cash  equivalents  are
approximately  $10,127,000  of  short-term  investments  considered  to be  cash
equivalents.



                                       12
<PAGE>



Accounts receivable decreased from $2,428,000 at December 31, 1997 to $2,216,000
at  March  31,  1998 as a  result  of the  combined  effects  of  exchange  rate
fluctuations  and collection of receivables.  The Registrant has not experienced
any material delinquent accounts.  Inventories remained relatively consistent at
$625,000 at March 31, 1998  compared to $714,000 at December 31,  1997.  Prepaid
expenses and other current  assets  increased from $750,000 at December 31, 1997
to $909,000 at March 31, 1998.

Although the combined total of accounts payable and accrued  expenses  increased
from $3,216,000 at December 31, 1997 to $3,600,000 at March 31, 1998,  primarily
as a result of the  provision  for income taxes of $234,000,  on taxable  income
earned in Spain, short-term borrowings decreased from $1,140,000 at December 31,
1997 to $490,000 at March 31, 1998, as a result of lower outstanding balances on
lines of credit used for operating  purposes in Spain,  resulting in lower total
current liabilities at March 31, 1998.

Fixed assets,  net decreased from  $2,918,000 at December 31, 1997 to $2,784,000
at March 31, 1998,  due to recurring  depreciation  charges and a fluctuation in
foreign currency exchange rates.

Drug licenses and related  costs,  net  decreased  from $691,000 at December 31,
1997 to $649,000 at March 31, 1998, due to recurring  amortization charges and a
fluctuation in foreign currency exchange rates.

Other  non-current  assets  increased  from  $2,425,000  at December 31, 1997 to
$2,897,000 at March 31, 1998,  primarily due to  capitalized  acquisition  costs
related to the proposed  acquisition  which were  incurred in the quarter  ended
March 31, 1998. Long term debt increased from $5,329,000 at December 31, 1997 to
$5,355,000  at March 31,  1998,  due  primarily  to  accretion  recorded  on the
Debentures issued in the February 1996 Public Offering.

Investing  activities provided net cash of $14,000 during the three months ended
March  31,  1998.  Financing  activities,   primarily  repayment  of  short-term
borrowings,  for the three months ended March 31, 1998 used net cash of $628,000
and operating  activities for the three months ended March 31, 1998 provided net
cash of $90,000.

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.  The  effect  of  foreign  currency
fluctuations  on long lived assets for the three months ended March 31, 1998 was
a decrease of $116,000 and the  cumulative  historical  effect was a decrease of
$1,971,000,  as reflected in the Registrant's Consolidated Balance Sheets in the
"Liabilities  and  Stockholders'   Equity"  section.   Although  exchange  rates
fluctuated  significantly  in recent years, the Registrant does not believe that
the effect of foreign  currency  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


                                       13
<PAGE>



translation.  Nonetheless,  the Registrant  does not plan to modify its business
practices. The Registrant relies 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.

Given the  Registrant's  current  liquidity  and  significant  cash balances and
considering its future strategic  plans,  the Registrant  should have sufficient
liquidity  to  fund  operations  and  further  its  strategic  objectives.   The
Registrant,  however, continues to explore alternative sources for financing its
business. 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
subsidiary.  As discussed  above,  the  Registrant  has entered into a letter of
intent to acquire  pharmaceutical  products and a manufacturing  facility in the
United States.  The Registrant  must finance the acquisition of these assets and
is exploring  various options intended to secure such financing.  The Registrant
has  amended  its  letter  of intent to take  into  consideration  the  possible
transfer of control of its Spanish  subsidiary  to Schwarz  Pharma USA Holdings,
Inc.

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
the  history of  operating  losses;  uncertainty  of future  financial  results;
possible  negative cash flow from  operating  activities;  additional  financing
requirements; no assurance of successful and timely development of new products;
risks  inherent  in   pharmaceutical   development;   dependence  on  regulatory
approvals;    uncertainty   of   pharmaceutical    pricing   or   profitability;
unpredictability of patent protection;  rapid technological change; competition;
and other uncertainties  detailed in the Registrant's  Registration Statement on
Form  S-3  (SEC  Commission  file  No.  333-28593)  declared  effective  by  the
Securities and Exchange Commission on June 10, 1997 and any amendments thereto.



                                       14
<PAGE>


PART II.  OTHER INFORMATION

Item 6.   Exhibits and Reports on Form 8-K

          (a)       Exhibits:

                              27.1 Financial Data Schedule

          (b)       Reports on Form 8-K filed during the quarter ended March 31,
                    1998:

                              None

          The  Registrant  has not filed any reports on Form 8-K  subsequent  to
March 31, 1998.

All  other  items  required  in Part II have  been  previously  filed or are not
applicable for the quarter ended March 31, 1998.




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<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





May 14, 1998                             By:    /s/ James R. Murphy
                                            ------------------------------
                                            James R. Murphy
                                            Chairman, President and Chief 
                                            Executive Officer (principal 
                                            executive officer)




May 14, 1998                             By:    /s/ Michael D. Price
                                            ------------------------------
                                            Michael D. Price
                                            Vice President, Chief Financial 
                                            Officer, Treasurer and Secretary 
                                            (principal financial and accounting
                                            officer)






                                       16