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, 1997

                                       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 14,
1997 was 3,348,195.


<PAGE>




                          BENTLEY PHARMACEUTICALS, INC.
                          -----------------------------
                 FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1997
                 ----------------------------------------------
                                      INDEX
                                      -----



Part I.     FINANCIAL INFORMATION                                          PAGE
            ---------------------                                          ----


   Item 1.   Consolidated Financial Statements:

             Consolidated Balance Sheets as of March 31, 1997
                         (unaudited) and December 31, 1996                    3

             Consolidated Statements of Operations (unaudited)
                         for the three months ended March 31, 1997
                         and 1996                                             4

             Consolidated Statement of Changes in Common
                         Stockholders' Equity (unaudited) for the
                         three months ended March 31, 1997                    5

             Consolidated Statements of Cash Flows
                         (unaudited) for the three months ended
                         March 31, 1997 and 1996                              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>

<TABLE>
<CAPTION>

                          BENTLEY PHARMACEUTICALS, INC.
                           CONSOLIDATED BALANCE SHEETS

                                                                   (Unaudited)
(In thousands, except per share data)                               March 31,        December 31,
                                                                       1997               1996
                                                                       ----               ----

ASSETS
------
Current assets:
<S>                                                                    <C>              <C>   
 Cash and cash equivalents                                             $3,501           $4,425
 Investments available for sale                                           166              166
 Receivables                                                            3,128            3,632
 Inventories                                                              811              945
 Prepaid expenses and other                                               552              644
                                                                      --------         --------
  Total current assets                                                  8,158            9,812
                                                                      --------         --------
Fixed assets, net                                                       3,220            3,544
Drug licenses and related costs, net                                    1,308            1,475
Other non-current assets, net                                           1,699            1,727
                                                                      --------         --------
                                                                      $14,385          $16,558
                                                                      ========         ========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
 Accounts payable                                                      $2,258           $2,998
 Accrued expenses                                                       1,366            1,530
 Short term borrowings                                                  1,056            1,014
 Current portion of long term debt                                          5                5
                                                                      --------         --------
  Total current liabilities                                             4,685            5,547
                                                                      --------         --------
Long term debt, net                                                     5,211            5,164
                                                                      --------         --------
Other non-current liabilities                                             317              349
                                                                      --------         --------
Commitments and contingencies

Redeemable preferred stock, $1.00 par value,
 authorized 2,000 shares:
  Series A, issued and outstanding, 60 shares                           2,237            2,203
                                                                      --------         --------
Common Stockholders' Equity
 Common stock, $.02 par value, authorized 35,000 shares,
  issued and outstanding, 3,348 and 3,345 shares                           67               67
 Stock purchase warrants (to purchase 8,298 and 8,304
  shares of common stock)                                                 435              435
 Paid-in capital in excess of par value                                71,118           71,146
 Stock subscriptions receivable                                          (105)            (105)
 Accumulated deficit                                                  (67,993)         (67,167)
 Cumulative foreign currency translation adjustment                    (1,587)          (1,081)
                                                                      --------         --------

                                                                        1,935            3,295
                                                                      --------         --------

                                                                      $14,385          $16,558
                                                                      ========         ========


</TABLE>
           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,
                                                              ---------
                                                        1997             1996
                                                        ----             ----

Sales                                                  $4,078           $9,698

Cost of sales                                           2,288            7,636
                                                       -------          -------

Gross margin                                            1,790            2,062


Operating expenses:

 Selling, general and administrative                    1,904            1,900

 Research and development                                  66               18

 Depreciation and amortization                             84              134
                                                       -------          -------
  Total operating expenses                              2,054            2,052
                                                       -------          -------
(Loss) income from operations                            (264)              10

Other (income) expenses:

 Interest expense                                         320              243

 Interest income                                          (17)              (9)

 Provision for unrealized exchange loss                   243                - 

 Other (income) expense, net                               16                9
                                                       -------          -------
Loss before extrordinary item                            (826)            (233)

Extraordinary item - extinguishment of debt                 -              446
                                                       -------          -------
Net loss                                                ($826)           ($679)
                                                       =======          =======

Loss per common share before extraordinary item        ($0.26)          ($0.08)

Extraordinary item - extinguishment of debt                 -            (0.13)
                                                       -------          -------
Net loss per common share                              ($0.26)          ($0.21)
                                                       =======          =======
Weighted average common shares outstanding              3,346            3,330
                                                       =======          =======




           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)
<TABLE>
<CAPTION>

(In thousands, except per share data)
                                                     $.02 Par Value         Additional                       Other
                                                      Common Stock           Paid-In       Accumulated      Equity
                                                    Shares      Amount       Capital         Deficit       Transactions      Total
                                                    ------      ------       -------         -------       ------------      -----

<S>                 <C> <C>                         <C>           <C>         <C>            <C>             <C>            <C>   
Balance at December 31, 1996                        3,345         $67         $71,146        ($67,167)       ($751)         $3,295

Common stock issued as compensation                   1            -             2               -              -              2

Conversion of stock purchase options                  2            -             4               -              -              4

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

Foreign currency translation adjustment               -            -             -               -            (506)          (506)

Net loss                                              -            -             -             (826)            -            (826)
                                                    -----        -----        -------         -------        ------          -----
Balance at March 31, 1997                           3,348         $67         $71,118        ($67,993)      ($1,257)        $1,935
                                                    =====        =====        =======        =========      ========        ======


</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)
 
<TABLE>
<CAPTION>
                                                                           For the Three
                                                                            Months Ended
                                                                              March 31,
                                                                              ---------
(In thousands)                                                          1997                1996
                                                                        ----                ----
Cash flows from operating activities:

<S>                                                                    <C>                 <C>   
 Loss before extraordinary item                                        ($826)              ($233)

 Adjustments to reconcile loss before extraordinary item

 to net cash used in operating activities:

 Depreciation and amortization                                            84                 134

 Extraordinary item - extinguishment of debt                               -                (446)

 Other non-cash items                                                    324                 597

 (Increase) decrease in assets and

   increase (decrease) in liabilities:

   Receivables                                                           223              (2,007)

   Inventories                                                            58                  55

   Prepaid expenses and other current assets                              41                 (36)

   Other assets                                                           (2)                (43)

   Accounts payable and accrued expenses                                (617)                480

   Other liabilities                                                      (2)               (333)
                                                                        -----             -------
    Net cash used in operating activities                               (717)             (1,832)
                                                                        -----             -------
Cash flows from investing activities:

 Proceeds from sale of investments                                         -                 160

 Purchase of investments                                                   -              (2,629)

 Net change in fixed assets                                              (37)                 14

 Acquisition of Spanish drug license                                     (40)                  -
                                                                        -----             -------
    Net cash used in investing activities                                (77)             (2,455)
                                                                        -----             -------

</TABLE>


            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,
                                                                  ------------------
                                                                    1997       1996
                                                                  -------    -------

Cash flows from financing activities:

<S>                                                               <C>        <C>    
 Net increase in short term borrowings                            $   143    $   395

 Proceeds from public offering of units                              --        6,900

 Offering costs                                                      --       (1,156)

 Proceeds from exercise of stock options, net                           5       --

 Repayments of long term debt                                        --       (1,770)

 Payments on capital leases                                            (1)        (8)
                                                                  -------    -------
    Net cash provided by financing activities                         147      4,361
                                                                  -------    -------
Effect of exchange rate changes on cash                              (277)        (6)
                                                                  -------    -------
Net (decrease) increase in cash and cash equivalents                 (924)        80

Cash and cash equivalents at beginning of period                    4,425      1,120
                                                                  -------    -------
Cash and cash equivalents at end of period                        $ 3,501    $ 1,200
                                                                  =======    =======


Supplemental  Disclosures of Cash Flow  Information
The Company paid cash during the period for (in thousands):

 Interest                                                         $   233    $   167
                                                                  =======    =======
 Taxes                                                            $    12    $  --
                                                                  =======    =======
Supplemental Disclosures of Non-Cash Financing Activities
The Company has issued Common Stock in exchange for services as
follows (in thousands):

 Shares issued                                                          1       --
                                                                  =======    =======
 Amount                                                           $     2       --
                                                                  =======    =======


</TABLE>








           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, 1997 and 1996 included herein, have been prepared by
the  Registrant,  without  audit,  pursuant to the rules and  regulations of the
Securities  and Exchange  Commission.  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, 1996.

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.,
Chimos/LBF S.A. and its wholly owned subsidiary - Laboratorios  Belmac S.A., 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 is currently engaged in negotiations with a subsidiary of a large
European conglomerate to sell its French subsidiary, Chimos/LBF. The transaction
is expected to be  finalized  in the second  quarter of 1997.  As no  definitive
agreement  has been  signed,  there can be no  assurance  that such sale will be
consummated.  Sales  generated  by  Chimos/LBF  began to  decline  in the second
quarter  of 1996  due to the  expiration  of a  distribution  agreement  for the
product  Ceredase.   Since  the  expiration  of  this  distribution   agreement,
Chimos/LBF  has  been  generating  revenues  at the rate of  approximately  $5.5
million  per  annum.  As a  result  of the  proposed  sale  of  Chimos/LBF,  the
Registrant  recorded  a  provision  for  unrealized  exchange  loss of  $243,000
resulting from a fluctuation in the currency exchange rate used to translate the
foreign currency financial statements.

In the opinion of management,  the accompanying unaudited consolidated financial
statements at March 31, 1997 and 1996 are presented on a basis  consistent  with
the audited  consolidated  financial  statements for the year ended December 31,
1996  and  contain  all   adjustments,   consisting  only  of  normal  recurring
adjustments,  necessary to present fairly the Registrant's financial position as
of March 31, 1997, the results of its operations and its cash flows for the

                                        8

<PAGE>



three months ended March 31, 1997 and 1996.  The results of  operations  for the
three months  ended March 31, 1997 should not be  considered  indicative  of the
results to be expected for the year.

CASH AND CASH EQUIVALENTS/INVESTMENTS AVAILABLE FOR SALE:

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  which do not meet the definition of cash  equivalents
are classified as  investments  available for sale in the  Consolidated  Balance
Sheets.  Investments  available  for  sale of  $166,000  at March  31,  1997 are
reported at approximate market value.

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):


                                                      March 31,    December 31,
                                                         1997          1996
                                                        ------        -----

Raw materials                                           $ 413         $ 515

Work in process                                             -             -

Finished goods                                            671         1,257
                                                        -----         -----

                                                        1,084         1,772

Less: Allowance for slow moving or obsolete inventory   (273)         (827)
                                                        -----         -----

                                                        $ 811         $ 945
                                                        =====         =====


EXTRAORDINARY ITEM:

The Registrant recorded an extraordinary charge of $446,000,  or $.13 per common
share, in February 1996 upon the  extinguishment of debt that it had incurred in
its October  1995  private  placements,  representing  unamortized  discount and
issuance costs at the date of repayment.


NET LOSS PER COMMON SHARE:

Primary loss per common share is computed by dividing the net loss (adjusted for
accrued dividends on redeemable  preferred stock) by the weighted average number
of  shares  of  Common  Stock  outstanding  during  each  period.  Common  Stock
equivalents  were not included in the  calculation  of primary loss per share as
they were determined to be antidilutive.



                                        9

<PAGE>



RECLASSIFICATIONS:

Certain prior period amounts have been  reclassified to conform with the current
period's  presentation format. These  reclassifications  are not material to the
consolidated financial statements.

                                       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, 1997 versus Three Months Ended March 31, 1996
--------------------------------------------------------------------------


The  Registrant  reported  revenues of $4,078,000  and a net loss of $826,000 or
$.26 per common  share for the three  months  ended March 31,  1997  compared to
revenues of  $9,698,000  and a net loss of $679,000 or $.21 per common share for
the same period in the prior year.

The 58%  decrease in revenues is  primarily  attributable  to an 85% decrease in
sales by the Registrant's French subsidiary,  Chimos/LBF,  to $1,095,000,  which
was  partially  offset by a 17%  increase in sales by the  Registrant's  Spanish
subsidiary,  Laboratorios  Belmac S.A., to $2,915,000.  As previously  reported,
revenues declined  beginning in the second quarter of 1996, due to the March 31,
1996 expiration of its distribution  agreement for the product  Ceredase,  which
accounted  for  approximately  60% of the  Registrant's  revenues  in  1995  and
approximately 54% of its revenues in the quarter ended March 31, 1996.  Ceredase
gross margins,  as a percent of sales, were  approximately 5% during the quarter
ended  March 31,  1996;  therefore,  the  impact  on  operating  profits  is not
considered to be material. Overall gross margins for the quarter ended March 31,
1997  improved  to 44%,  compared to 21% in the  comparable  period of the prior
year,  primarily as a result of the higher proportion of sales from Laboratorios
Belmac,  whose sales generate  significantly  higher gross margins than those of
Chimos/LBF, whose sales included the low-margin Ceredase sales. The Registrant's
distribution  operations in France,  Chimos/LBF,  generate  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 52% for the quarter ended March 31,
1997).

Selling,  general and administrative  expenses remained  relatively  constant at
$1,904,000,  or 47% of sales, for the three months ended March 31, 1997 compared
to $1,900,000,  or 20% of sales, for the same period in the prior year. However,
as  a  direct  result  of  the  decline  in  revenues,   selling,   general  and
administrative  expenses as a percent of revenues  increased  during the quarter
ended March 31,  1997,  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 $66,000 for the quarter ended March 31,
1997 compared to $18,000 for the same period of the prior year. The research and
development

                                       11

<PAGE>



expenditures  in the  quarter  ended March 31,  1997 were  primarily  related to
bio-equivalency  studies for exporting  products from Spain to other  countries.
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 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.

Depreciation and  amortization  expenses were $84,000 for the three months ended
March 31,  1997,  compared  to  $134,000  for the same period of the prior year,
primarily  due to (i) the December 31, 1996  provision  for goodwill  impairment
which terminated future related  amortization;  and (ii) the disposal of certain
fixed  assets  during the  quarters  ended June 30 and  September  30, 1996 as a
result of the Registrant's move to smaller, more cost effective office space.

Interest expense was $320,000 for the three months ended March 31, 1997 compared
to $243,000 for the same period of the prior year. The $77,000 increase reflects
interest expense arising primarily from the Debentures sold in the February 1996
Public  Offering which were  outstanding  for the entire quarter ended March 31,
1997.  Interest  income was $17,000 for the three  months  ended March 31, 1997,
compared to $9,000 for the same period of the prior year.  The increase was with
respect to interest  earned on the  proceeds of the Public  Offering  which have
been  temporarily  invested in short-term  interest  bearing  investments.  As a
result of the proposed sale of Chimos/LBF,  the Registrant  recorded a provision
for  unrealized  exchange loss of $243,000  resulting  from a fluctuation in the
currency  exchange  rate  used  to  translate  the  foreign  currency  financial
statements.

The Registrant recorded an extraordinary charge of $446,000,  or $.13 per common
share, in February 1996 upon the  extinguishment of debt that it had incurred in
its October  1995  private  placements,  representing  unamortized  discount and
issuance costs at the date of repayment.

The Registrant  reported a loss from  operations for the quarter ended March 31,
1997 of  $264,000  compared  to income  from  operations  of $10,000 in the same
period of the prior year  primarily as a result of its decrease in sales,  which
was  partially  offset  by  improved  gross  margins  and  controlled  operating
expenses.  The  effect of  combining  non-operating  items,  primarily  interest
expense of $320,000,  and the provision for unrealized exchange loss of $243,000
resulted  in a net loss of  $826,000,  or $.26 per common  share for the quarter
ended March 31, 1997, compared to the loss in the comparable period of the prior
year, of $679,000, or $.21 per common share,  including the extraordinary charge
of $446,000, or $.13 per common share related to extinguishment of debt.

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

Total assets  decreased from  $16,558,000 at December 31, 1996 to $14,385,000 at
March 31, 1997, while Common  Stockholders'  Equity decreased from $3,295,000 at
December  31,  1996 to  $1,935,000  at March 31,  1997.  The  decrease in Common
Stockholders' Equity reflects primarily the fluctuation in the exchange rates of
European  currencies  compared to the U.S.  Dollar and the loss  incurred by the
Registrant for the three months ended March 31, 1997.


                                       12

<PAGE>



The Registrant's  working capital decreased from $4,265,000 at December 31, 1996
to  $3,473,000 at March 31, 1997.  The decrease in working  capital is primarily
attributable  to the  fluctuation of exchange rates and the loss incurred by the
Registrant.

Cash and cash  equivalents  decreased  from  $4,425,000  at December 31, 1996 to
$3,501,000  at  March  31,  1997,  primarily  as a  result  of  using  cash  for
operational  purposes.  Included in cash and cash equivalents are  approximately
$2,614,000 of short-term investments considered to be cash equivalents.

Accounts receivable decreased from $3,632,000 at December 31, 1996 to $3,128,000
at March 31, 1997  partially due to exchange rate  fluctuations.  The Registrant
has not experienced any material delinquent accounts. Inventories also decreased
to  $811,000 at March 31, 1997  compared  to  $945,000  at  December  31,  1996,
primarily  due to  the  decline  in  sales  by the  French  subsidiary  and  the
corresponding  reduction in inventory levels. Prepaid expenses and other current
assets  decreased  from  $644,000 at December  31, 1996 to $552,000 at March 31,
1997.

Although the combined total of accounts payable and accrued  expenses  decreased
from  $4,528,000  at December 31, 1996 to $3,624,000 at March 31, 1997 and short
term  borrowings  increased  slightly  from  $1,014,000  at December 31, 1996 to
$1,056,000  at March 31, 1997,  such  balances are  significantly  reduced below
their March 31, 1996 balances, as a result of application of cash collected from
receivables during the twelve months ended March 31, 1997.

Fixed assets,  net decreased from  $3,544,000 at December 31, 1996 to $3,220,000
at March 31, 1997,  due to recurring  depreciation  charges and a fluctuation in
foreign currency exchange rates.

Drug licenses and related costs,  net decreased from  $1,475,000 at December 31,
1996 to $1,308,000 at March 31, 1997, due to recurring  amortization charges and
a fluctuation in foreign currency exchange rates.

Other  non-current  assets  decreased  from  $1,727,000  at December 31, 1996 to
$1,699,000  at March 31, 1997 and long term debt  increased  from  $5,164,000 at
December 31, 1996 to $5,211,000 at March 31, 1997, due primarily to amortization
of  issuance  costs  and  accretion  recorded  on the  Debentures  issued in the
February 1996 Public Offering.

Investing  activities  used net cash of $77,000  during the three  months  ended
March 31, 1997.  Financing  activities for the three months ended March 31, 1997
provided  net cash of $147,000  and  operating  activities  for the three months
ended March 31, 1997 used net cash of $717,000.

A  substantial  amount of the  Registrant's  business is conducted in France and
Spain and is therefore  influenced by the extent to which there are fluctuations
in the dollar's value against such countries' currencies.  The effect of foreign
currency  fluctuations on long lived assets for the three months ended March 31,
1997 was a decrease  of  $506,000  and the  cumulative  historical  effect was a
decrease of $1,587,000,  as reflected in the Registrant's  Consolidated  Balance
Sheets in the "Liabilities and Stockholders' Equity" section. As a result of the
proposed sale of Chimos/LBF,  the Registrant recorded a provision for unrealized
exchange loss of $243,000  resulting from a fluctuation in the currency exchange
rate used to  translate  the foreign  currency  financial  statements.  Although
exchange  rates  fluctuated  significantly  recently,  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

                                       13

<PAGE>



to much of the Registrant's  foreign currency  revenues are in the same currency
as such revenues.  The Registrant relies primarily upon financing  activities to
fund  the  operations  of the  Registrant  in the  United  States  and  has  not
transferred  significant  amounts into or out of the United States in the recent
past.  In the event  that the  Registrant  is  required  to fund  United  States
operations with funds generated in France or 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.

Management  expects that as a result of  completing  its  financings in the last
fiscal year, by carefully  prioritizing research and development  activities and
continuing  its  austerity  program,   the  Registrant  should  have  sufficient
liquidity to fund operations into 1998. 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 one or more of, its  subsidiaries.
The Registrant is currently engaged in negotiations with a subsidiary of a large
European conglomerate to sell its French subsidiary, Chimos/LBF. The transaction
is expected to be  finalized  in the second  quarter of 1997.  As no  definitive
agreement  has been  signed,  there can be no  assurance  that such sale will be
consummated.  Sales  generated  by  Chimos/LBF  began to  decline  in the second
quarter  of 1996  due to the  expiration  of a  distribution  agreement  for the
product  Ceredase.   Since  the  expiration  of  this  distribution   agreement,
Chimos/LBF  has  been  generating  revenues  at the rate of  approximately  $5.5
million per annum.

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;   dependance  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-1 (SEC Commission file No. 33-65125) declared effective by the Securities
and Exchange Commission on February 14, 1996 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, 1997:

          None.

          The  Registrant  has not filed any reports on Form 8-K  subsequent  to
March 31, 1997.

All  other  items  required  in Part II have  been  previously  filed or are not
applicable for the quarter ended March 31, 1997.

                                       15

<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, 1997         By:         /s/ James R. Murphy
                                 -------------------
                                 James R. Murphy
                                 Chairman, President and Chief Executive Officer
                                 (principal executive officer)




May 14, 1997         By:         /s/ Michael D. Price
                                 --------------------
                                 Michael D. Price
                                 Vice President, Chief Financial Officer,
                                 Treasurer and Secretary (principal financial
                                 and accounting officer)