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, 2000
                               --------------
                                       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 May 4,
2000 was 13,647,532.
<PAGE>


                 BENTLEY PHARMACEUTICALS, INC. AND SUBSIDIARIES
                 ----------------------------------------------
                 FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2000
                 ----------------------------------------------
                                      INDEX
                                      -----

<TABLE>
<CAPTION>

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

                           Consolidated Balance Sheets as of March 31, 2000 (unaudited)
                           and December 31, 1999                                                 3

                           Consolidated Statements of Operations and of Comprehensive Loss
                           (unaudited) for the three months ended March 31, 2000 and 1999        4

                           Consolidated Statement of Changes in Stockholders' Equity
                           (unaudited) for the three months ended March 31, 2000                 5

                           Consolidated Statements of Cash Flows (unaudited) for the
                           three months ended March 31, 2000 and 1999                            6

                           Notes to Consolidated Financial Statements (unaudited)                8


                  Item 2.  Management's Discussion and Analysis of Financial
                           Condition and Results of Operations                                  13


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

                  Item 6.  Exhibits and Reports on Form 8-K                                     20

</TABLE>


                                       2
<PAGE>

                 BENTLEY PHARMACEUTICALS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                                      (unaudited)
(in thousands)                                                                          MARCH 31,             DECEMBER 31,
                                                                                        ---------             ------------
                                                                                          2000                   1999
                                                                                          ----                   ----
ASSETS
------
<S>                                                                                     <C>                       <C>
Current Assets:
 Cash and cash equivalents                                                              $6,131                    $4,422
 Marketable securities                                                                     575                     1,893
 Receivables, net                                                                        4,015                     4,016
 Inventories, net                                                                        1,599                       965
 Prepaid expenses and other                                                                522                       393
                                                                                       -------                   -------
  Total current assets                                                                  12,842                    11,689
                                                                                       -------                   -------
Fixed assets, net                                                                        3,565                     3,684
Drug licenses and related costs, net                                                     6,171                     5,807
Receivables from related parties                                                           440                         -
Other non-current assets, net                                                              507                     1,057
                                                                                       -------                   -------
                                                                                       $23,525                   $22,237
                                                                                       =======                   =======
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------

Current Liabilities:
  Accounts payable                                                                      $2,991                    $2,702
  Accrued expenses                                                                       1,356                     1,538
  Short term borrowings                                                                  1,030                       952
  Current portion of long term debt                                                          5                         5
  Debentures called for redemption                                                           -                     5,362
                                                                                       -------                   -------
    Total current liabilities                                                            5,382                    10,559
                                                                                       -------                   -------
Long-term debt, net                                                                      1,876                         -
                                                                                       -------                   -------
Other non-current liabilities                                                              135                       104
                                                                                       -------                   -------

Commitments and contingencies

Stockholders' Equity:
 Preferred stock, $1.00 par value, authorized 2,000 shares,
     issued and outstanding, zero shares                                                     -                         -
 Common  stock,$.02  par value,  authorized  35,000  shares,
     issued and outstanding, 12,691 and 10,230 shares                                      254                       204
 Stock purchase warrants (to purchase 4,296 and 4,806
     shares of common stock)                                                               633                       799
 Additional paid-in capital                                                             92,855                    87,858
 Accumulated deficit                                                                   (74,907)                  (74,948)
 Accumulated other comprehensive loss                                                   (2,703)                   (2,339)
                                                                                       -------                   -------
                                                                                        16,132                    11,574
                                                                                       -------                   -------
                                                                                       $23,525                   $22,237
                                                                                       =======                   =======
</TABLE>



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

                                        3
<PAGE>
<TABLE>
<CAPTION>

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

(in thousands, except per share data)                                                              For the Three
                                                                                                   Months Ended
                                                                                                      March 31,
                                                                                      ------------------------------------------
                                                                                         2000                           1999
                                                                                         ----                           ----
<S>                                                                                     <C>                            <C>
Sales                                                                                   $5,085                         $4,358
Cost of sales                                                                            1,958                          2,015
                                                                                        ------                         ------

Gross margin                                                                             3,127                          2,343
                                                                                        ------                         ------

Operating expenses:

 Selling, general and administrative                                                     2,438                          2,442
 Research and development                                                                   77                             45
 Depreciation and amortization                                                             144                             95
                                                                                        ------                         ------

  Total operating expenses                                                               2,659                          2,582
                                                                                        ------                         ------

Income (loss) from operations                                                              468                           (239)

Other (income) expenses:

 Interest expense                                                                          266                            278
 Interest income                                                                           (92)                           (68)
 Other (income) expense, net                                                                 -                             (2)
                                                                                        ------                         ------

Income (loss) before income taxes                                                          294                           (447)

Provision for income taxes:

 Domestic                                                                                    -                              -
 Foreign                                                                                   253                            100
                                                                                        ------                         ------

Net income (loss)                                                                           41                           (547)

Other comprehensive loss:

Foreign currency translation losses                                                        364                            499
                                                                                        ------                         ------

Comprehensive loss                                                                       ($323)                       ($1,046)
                                                                                        =======                       ========

Basic net income (loss) per common share                                                $0.004                        ($0.065)
                                                                                        =======                       ========

Diluted net income (loss) per common share                                              $0.003                        ($0.065)
                                                                                        =======                       ========

Weighted average common shares outstanding                                              10,783                          8,443
                                                                                        =======                       ========
</TABLE>


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

                                        4
<PAGE>


                 BENTLEY PHARMACEUTICALS, INC. AND SUBSIDIARIES
            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                   (UNAUDITED)

(in thousands)
<TABLE>
<CAPTION>

                                                  $.02 Par Value
                                                   Common Stock      Additional    Accumu-    Accumulated         Other
                                                   ------------       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, 1999                    10,230      $204      $87,858    ($74,948)      ($2,339)          $799     $11,574

Exercise of Class B Redeemable Warrants             60         1          300           -             -             (1)        300

Conversion of Debentures                         1,951        39        3,146           -             -              -       3,185

Exercise of stock warrants                         450        10        1,554           -             -           (414)      1,150

Exercise of underwriter warrants                     -         -           (3)          -             -            249         246

Foreign currency translation adjustment              -         -            -           -          (364)             -        (364)

Net income                                           -         -            -          41             -              -          41
                                                ------   -------      -------    --------       -------         -------    -------
Balance at March 31, 2000                       12,691      $254      $92,855    ($74,907)      ($2,703)           $633    $16,132
                                                ======   =======      =======    ========       =======         =======    =======
</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)

<TABLE>
<CAPTION>

                                                                                             For the Three
                                                                                              Months Ended
                                                                                               March 31,
                                                                                             -------------
(in thousands)                                                                             2000          1999
                                                                                           ----          ----
<S>                                                                                         <C>         <C>
Cash flows from operating activities:

 Net income (loss)                                                                          $41         ($547)

 Adjustments to reconcile net income (loss)

 to net cash used in operating activities:

 Depreciation and amortization                                                              144            95

 Other non-cash items                                                                       (83)          297

 (Increase) decrease in assets and

   increase (decrease) in liabilities:

   Receivables                                                                             (212)            4

   Inventories                                                                             (719)           26

   Prepaid expenses and other current assets                                               (171)           48

   Other assets                                                                             (81)          111

   Accounts payable and accrued expenses                                                    523          (345)

   Other liabilities                                                                          2             5
                                                                                        --------     --------

    Net cash used in operating activities                                                  (556)         (306)
                                                                                        --------     --------

Cash flows from investing activities:

 Acquisition of drug licenses                                                              (554)       (1,242)

 Additions to fixed assets                                                                 (169)         (336)

 Loans to related parties                                                                  (440)            -

 Proceeds from sale of investments                                                        3,838             -

 Purchase of investments                                                                 (2,515)            -
                                                                                        --------     --------
    Net cash provided by (used in) investing activities                                     160        (1,578)
                                                                                        --------     --------

</TABLE>



                          (Continued on following page)



           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)

<TABLE>
<CAPTION>

(in thousands)                                                                           For the Three
                                                                                         Months Ended
                                                                                          March 31,
                                                                                  ----------------------------

                                                                                      2000           1999
                                                                                      ----           ----
<S>                                                                                  <C>          <C>
Cash flows from financing activities:
 Net increase in short term borrowings                                                $133           $601
 Proceeds from exercise of stock warrants                                            2,002              -
                                                                                     -----          -----
    Net cash provided by financing activities                                        2,135            601
                                                                                     -----          -----
Effect of exchange rate changes on cash                                                (30)            (1)
                                                                                     -----          -----
Net increase (decrease) in cash and cash equivalents                                 1,709         (1,284)
Cash and cash equivalents at beginning of period                                     4,422          6,703
                                                                                     -----          -----
Cash and cash equivalents at end of period                                          $6,131         $5,419
                                                                                    ======         ======



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

 Interest                                                                             $238           $233
                                                                                    ======         ======
 Taxes                                                                                   -              -
                                                                                    ======         ======



SUPPLEMENTAL DISCLOSURES OF NON-CASH FINANCING ACTIVITIES
The Registrant has issued or is obligated to issue Common Stock in exchange for
services and purchase of drug delivery technology as follows (in thousands):

 Number of shares                                                                        3            735
                                                                                    ======         ======
 Amount                                                                                $29         $1,000
                                                                                    ======         ======
</TABLE>



During the three months ended March 31, 2000, 4,878 Debentures with principal
amount of $4,878,000, net of discount of $1,085,000 (and applicable unamortized
debt issuance costs totaling $608,000) were converted into approximately
1,951,000 shares of Common Stock.

The Registrant issued Warrants to purchase 450,000 shares of Common Stock as
partial consideration for the purchase of drug delivery technology, during the
three months ended March 31, 1999.

           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 a
U.S.-based  international  pharmaceutical and drug delivery company specializing
in the  development  of products  based upon  innovative  and  proprietary  drug
delivery  systems,  which also has a  commercial  presence  in Europe,  where it
manufactures,   markets  and  distributes  branded  and  generic  pharmaceutical
products.  The Registrant owns rights to certain U.S. and international  patents
and  related  technology  covering  methods to enhance the  absorption  of drugs
delivered to biological  tissues.  The Registrant is developing  this technology
and is  targeting  U.S.,  European and other  international  markets for the new
product   applications.   The   Registrant  is  in   negotiations   with  larger
pharmaceutical companies with the objective of collaborations in the development
and  marketing  of various  product  applications,  including  the  treatment of
onychomycosis,  delivery of insulin, hormone replacement therapies, vaccines and
peptides.  In Spain, 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  emphasizes  product
distribution in Spain, strategic alliances and product acquisitions. Its overall
strategy has been expanded due to the 1999 acquisition of permeation enhancement
technology,  which will require limited development expenditures while providing
a multitude of opportunities for strategic partnerships and/or alliances,  which
are anticipated to lead to milestone payments and royalty  arrangements with the
strategic  partners  bearing  the  majority  of  development  costs.  Since this
technology  is  based  on a  series  of  GRAS  (Generally  Recognized  As  Safe)
compounds,  products may be developed in a quicker and less costly fashion.  The
technology facilitates the permeation of drugs administered through skin, across
mucosa or through the cornea in a variety of independent pharmaceutical formats.
The  excipient  most advanced in  facilitating  absorption is referred to by the
Registrant as CPE-215,  although  there are a number of other related  compounds
under the same patents that have equally impressive enhancing characteristics.

BASIS OF CONSOLIDATED FINANCIAL STATEMENTS:

The consolidated  financial statements of the Registrant,  at March 31, 2000 and
1999 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

                                       8
<PAGE>

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, 1999.

The consolidated financial statements include the accounts of the Registrant and
its  wholly-owned  subsidiaries:  Pharma de Espana,  Inc.  and its  wholly-owned
subsidiary,  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.;  and  Belmac  Jamaica,   Ltd.  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  Accumulated  other  comprehensive
loss in the  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 March 31, 2000 and 1999 are presented on a basis
consistent with the audited consolidated financial statements for the year ended
December  31,  1999 and  contain  all  adjustments,  consisting  only of  normal
recurring  adjustments,  necessary to present fairly the Registrant's  financial
position  as of March 31, 2000 and the  results of its  operations  and its cash
flows for the three  months  ended  March 31,  2000 and  1999.  The  results  of
operations  for the three months  ended March 31, 2000 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 marketable  securities  available-for-sale in the Consolidated
Balance Sheets.

MARKETABLE SECURITIES:

The Company has  classified its  marketable  securities as  "available-for-sale"
and,  accordingly,  carries such securities at aggregate fair value.  Fair value
has been  determined  based on quoted

                                       9
<PAGE>

market  prices.  Marketable  securities at March 31, 2000  included  $575,000 of
Spanish government Treasury Bills, which mature in May 2000.

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, 2000     December 31, 1999
                                            --------------     -----------------

Raw materials                                     $710                $436
Finished goods                                     953                 599
                                                ------               -----
                                                 1,663               1,035
Less allowance for slow moving inventory           (64)                (70)
                                                ------               -----
                                                $1,599                $965
                                                ======               =====



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.

RECEIVABLES FROM RELATED PARTIES:

The Registrant provided loans to each of Messrs.  Murphy,  Price and Gyurik, who
are Executive  Officers of the Registrant,  in the amounts of $250,000,  $50,000
and  $140,000,  respectively,  in March 2000,  which Messrs.  Murphy,  Price and
Gyurik used to pay the income taxes on equity-based compensation received in the
prior year. The loans,  which bear interest at 6.59%  annually,  mature in March
2003 and are  secured by 28,000,  6,000 and  16,000  shares of the  Registrant's
Common Stock owned by Messrs. Murphy, Price and Gyurik,  respectively.  Interest
on the loans is payable quarterly.

DEBT:

During the three months ended March 31, 2000, holders of the Registrant's 12%
Debentures, which were classified as current liabilities at December 31, 1999,
converted 4,878 of such Debentures, with a net carrying value of approximately
$3,793,000 into approximately 1,951,000 shares of Common Stock. At March 31,
2000, there remained outstanding 2,376 Debentures, with a net carrying value of
approximately $1,876,000. All 2,376 Debentures outstanding at

                                       10
<PAGE>

March 31, 2000 were converted into an aggregate of approximately  950,000 shares
of Common  Stock  subsequent  to March 31, 2000 as a result of the  Registrant's
notice that it would redeem all  Debentures  that remained  outstanding on April
12,  2000.  Debentures   outstanding  at  March  31,  2000  were  classified  as
non-current  liabilities as a result of their  conversion  into shares of Common
Stock in April 2000.

STOCKHOLDERS' EQUITY:

During the three months ended March 31, 2000,  holders of the Registrant's Class
B  Redeemable  Warrants  exercised   approximately  120,000  of  such  warrants,
resulting in the issuance of  approximately  60,000 shares of Common Stock,  the
Underwriters   of  the   Registrant's   1996  Public   Offering   exercised  460
Underwriter's Warrants,  resulting in the issuance of 460 Debentures and 460,000
Class A Redeemable  Warrants and other warrant holders exercised an aggregate of
450,000 stock purchase warrants,  resulting in the issuance of 450,000 shares of
Common Stock. The Registrant received aggregate net proceeds from such exercises
of approximately $2,002,000.

PROVISION FOR INCOME TAXES:

The Registrant accounts for income taxes under Statement of Financial Accounting
Standards  (SFAS) No. 109,  "Accounting  for Income  Taxes",  which requires the
recognition  of deferred  tax assets and  liabilities  relating to the  expected
future tax  consequences of events that have been recognized in the Registrant's
consolidated financial statements and tax returns.

The Registrant  recorded a provision for income taxes totaling  $253,000 for the
three  months  ended March 31, 2000 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  income  primarily  as a result of the increase in the
valuation   allowance  to  offset  domestic  deferred  tax  assets  and  certain
nondeductible expenses in Spain.

BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE:


Basic net income  (loss) per common share is presented in  accordance  with SFAS
No. 128, "Earnings per Share".

Basic net income (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  income per common share is presented
for the three months ended March 31, 2000. Diluted loss per common share for the
three months ended March 31, 1999 is the same as the basic loss per common share
as a result of antidilution. The effect of the Registrant's outstanding

                                       11
<PAGE>

stock options,  stock warrants and convertible debentures were considered in the
diluted income (loss) per share calculation.

The following is a reconciliation between basic and diluted net income per share
for the three months ended March 31, 2000.  Dilutive securities issuable include
approximately  1,227,000  shares  issuable  as a result of Class B Warrants  and
approximately 2,090,000 shares issuable as a result of various stock options and
warrants outstanding.  Basic and diluted net loss per common share for the three
months ended March 31, 1999 are the same.






(in thousands, except per share data)
<TABLE>
<CAPTION>

                                                              Effect of
                                              Basic            Dilutive           Diluted
                                               EPS            Securities            EPS
                                             -------          ----------         ---------
<S>                                          <C>                                  <C>
Net Income                                    $   41              ---              $   41
Number of Shares                              10,783            3,317              14,100
Per Share                                     $ .004              ---              $ .003
</TABLE>


                                       12
<PAGE>


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

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

Three Months Ended March 31, 2000 versus Three Months Ended March 31, 1999
--------------------------------------------------------------------------

The  Registrant  reported  revenues of  $5,085,000  and net income of $41,000 or
$.004 per basic  common  share  ($.003 per diluted  common  share) for the three
months ended March 31, 2000 compared to revenues of $4,358,000 and a net loss of
$547,000 or $.065 per basic and diluted  common share for the same period in the
prior year.

The 17% 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 32% in local  currency  for the three months ended March
31, 2000 compared to the same period of the prior year; however, fluctuations in
foreign  currency  exchange  rates  negatively  impacted  revenues by  $675,000,
resulting in revenues of $5,085,000 when expressed in U.S. dollars.

Gross  margins  for the three  months  ended  March 31,  2000  increased  to 61%
compared to gross margins of 54% in the same period of the prior year, primarily
as a result of  manufacturing  efficiencies  associated  with  higher  levels of
production  during the three  months  ended March 31, 2000  compared to the same
period of the prior  year.  The  Ministry  of Health and the Pharma  Industry in
Spain had entered  into a two-year  agreement  that  expired in  December  1999,
whereby  pharmaceutical  companies  in Spain  were  taxed on their  growth  as a
vehicle  for  funding  rising  health care costs in Spain.  This  agreement  has
expired  and,  as of this  date,  has not been  renewed  nor has the  Registrant
received  any  indication  that it will be renewed or if it is renewed  that the
effective date will be  retroactive to the beginning of the year.  Consequently,
the  Registrant  has not accrued any such taxes for the three months ended March
31, 2000. Such taxes would have approximated $136,000 for the three months ended
March 31, 2000 if the agreement had continued beyond December 31, 1999.

Selling,  general and administrative expenses decreased by $4,000, to $2,438,000
for the three months ended March 31, 2000  compared to  $2,442,000  for the same
period of the prior year.  Selling,  general and administrative  expenses,  as a
percentage of revenues,  were reduced from 56% of first quarter 1999 revenues to
48% of first quarter 2000 revenues as a result of the  Registrant's 17% increase
in revenues and its efforts to control general and  administrative  expenses.  A
significant  portion (63% or  $1,545,000)  of these  expenses are  marketing and
selling expenses,  which are necessary for the Registrant's  growth in sales and
market share in Spain. Selling and marketing expenses increased by $130,000,  or
9% over the same period of the prior year,  however,  as a percent of  revenues,
decreased  from 32% in the first  quarter of 1999 to 30% in the first quarter of
2000.  General and  administrative  expenses decreased by 13% from $1,027,000 in
the  first  quarter  of 1999 to  $893,000  in the  first  quarter  of 2000,  and
decreased  from 24% of first  quarter 1999 revenues to 18% of first quarter 2000
revenues.  To the extent

                                       13
<PAGE>

practical, the Registrant intends to continue its efforts to control general and
administrative expenses in its effort to maintain profitability.

The Registrant  reported  research and  development  expenses of $77,000 for the
three months ended March 31, 2000 compared to $45,000 for the same period of the
prior year. Amounts charged to research and development totaled $238,000 for the
three  months  ended March 31, 2000 and were offset by $161,000 as a result of a
negotiated   reduction  in  an  amount  previously   accrued  for  research  and
development  expenses.  The increase in the Registrant's  costs for research and
development is primarily the result of costs  associated  with the laboratory in
the Registrant's U.S. headquarters, located in New Hampshire. This laboratory is
being used by the Registrant to develop potential product applications using its
permeation  enhancement  technology.  The limited  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 in order to ensure
that its development programs are efficient and cost effective.

Depreciation  and  amortization  expenses  totaled $144,000 for the three months
ended March 31, 2000, compared to $95,000 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 and its
U.S.  laboratory  and higher  amortization  charges  with  respect  to  recently
acquired drug licenses and technologies.

Interest  expense,   which  primarily  reflects  interest  on  the  Registrant's
Debentures,  totaled $266,000 for the three months ended March 31, 2000 compared
to  $278,000  for the  same  period  of the  prior  year as a  result  of  lower
outstanding principal amount of the Registrant's Debentures, which resulted from
conversions by the holders thereof into shares of the Registrant's  Common Stock
during the three months ended March 31, 2000, partially offset by higher average
outstanding  short term debt balances used for operating  purposes in Spain. The
Registrant  incurred first quarter interest expense related to the Debentures of
approximately $233,000,  which will be reduced to zero beginning with the second
quarter of 2000, as a result of the conversion of all Debentures  into shares of
Common Stock.

Interest  income was $92,000 for the three months ended March 31, 2000  compared
to $68,000 for the same period of the prior year primarily as a result of higher
short-term  interest bearing  investment  balances during the three months ended
March 31, 2000 than in the same period of 1999.

The Registrant  recorded a provision for foreign income taxes totaling  $253,000
for the three months ended March 31, 2000 as a result of taxable  income  earned
in Spain compared to $100,000 in the same period of the prior year.

The Registrant  reported income from operations of $468,000 for the three months
ended  March 31,  2000  compared to a loss of $239,000 in the same period of the
prior year.  The effect of

                                       14
<PAGE>

combining non-operating items, primarily interest expense of $266,000,  interest
income of $92,000 and  provision  for income  taxes of $253,000  resulted in net
income of $41,000,  or $.004 per basic common  share  ($.003 per diluted  common
share) for the three months  ended March 31,  2000,  compared to the net loss in
the same period of the prior year,  of $547,000,  or $.065 per basic and diluted
common share.



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

Total assets  increased from  $22,237,000 at December 31, 1999 to $23,525,000 at
March 31,  2000,  while  Stockholders'  Equity  increased  from  $11,574,000  at
December  31,  1999  to   $16,132,000   at  March  31,  2000.  The  increase  in
Stockholders'  Equity  reflects  primarily  the  exercise  of  120,000  Class  B
Redeemable Warrants and the resulting issuance of 60,000 shares of Common Stock,
the  exercise of 460  Underwriter's  Warrants  resulting  in the issuance of 460
Debentures and 460,000 Class A Redeemable  Warrants,  the conversion of 4,878 of
the Registrant's 12% Convertible Debentures into approximately  1,951,000 shares
of Common  Stock and the  exercise  of stock  purchase  warrants  to purchase an
aggregate  of 450,000  shares of Common  Stock and net income of $41,000 for the
three months ended March 31, 2000,  partially  offset by 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 increased from $1,130,000 at December 31, 1999
to $7,460,000 at March 31, 2000, primarily as a result of conversion of 4,878 of
the   Registrant's   12%  Debentures   into  shares  of  Common  Stock  and  the
classification of the 2,376 Debentures with a carrying value of $1,876,000 which
remained  outstanding at March 31, 2000 as long-term debt, net, which Debentures
had been  classified  as current  liabilities  as of December  31, 1999 and cash
proceeds of approximately $2,002,000 received from the exercise of 120,000 Class
B Warrants, 460 Underwriter's Warrants and 450,000 other stock purchase warrants
during the first quarter of 2000.

Cash and cash  equivalents  increased  from  $4,422,000  at December 31, 1999 to
$6,131,000  at March  31,  2000,  primarily  as a  result  of cash  proceeds  of
approximately $2,002,000 received from the exercise of 120,000 Class B Warrants,
460  Underwriter's  Warrants and 450,000 other stock purchase  warrants and as a
result of the maturities of approximately  $1,288,000 of marketable  securities,
partially  offset by use of cash for  working  capital  purposes  and  investing
activities.  Included  in cash  and  cash  equivalents  at  March  31,  2000 are
approximately  $5,469,000  of  short-term  investments  considered  to  be  cash
equivalents.  There are also  approximately  $575,000 of  marketable  securities
(six-month  maturities maturing in May 2000) classified as available-for-sale at
March 31, 2000.

Accounts receivable decreased from $4,016,000 at December 31, 1999 to $4,015,000
at March 31, 2000 and the Registrant has not experienced any material delinquent
accounts on its trade receivables.  Inventories increased to $1,599,000 at March
31, 2000 compared to $965,000 at December 31, 1999  primarily as a result of raw
materials  purchases and production of finished

                                       15
<PAGE>

goods in anticipation of higher levels of sales, partially offset by fluctuation
in foreign currency exchange rates.

Prepaid  expenses and other current  assets  increased from $393,000 at December
31,  1999 to  $522,000  at March 31,  2000,  primarily  as a result  of  prepaid
expenses which are being amortized over the applicable  periods to be benefited,
partially   offset  by  recurring   amortization   charges  and  the  effect  of
fluctuations in foreign currency exchange rates.

The  combined  total of accounts  payable and accrued  expenses  increased  from
$4,240,000 at December 31, 1999 to $4,347,000 at March 31, 2000,  primarily as a
result of  inventory  purchases,  partially  offset by  fluctuations  in foreign
currency  exchange  rates.  Short-term  borrowings  increased  from  $952,000 at
December  31,  1999 to  $1,030,000  at March  31,  2000,  as a result  of higher
outstanding  balances on lines of credit used for  operating  purposes in Spain,
partially  offset by the effect of  fluctuations  in foreign  currency  exchange
rates.

Current portion of long-term debt of $5,362,000 at December 31, 1999 was reduced
to  $1,876,000  at  March  31,  2000 as a  result  of the  conversion  of  4,878
Debentures into approximately 1,951,000 shares of Common Stock, partially offset
by accretion  recorded on the  Debentures.  The 2,376  Debentures  that remained
outstanding at March 31, 2000,  with a carrying  value of $1,876,000,  have been
classified  as  long-term  debt,  net as a  result  of the  conversion  of  such
Debentures into shares of Common Stock subsequent to March 31, 2000.

Fixed assets,  net decreased from  $3,684,000 at December 31, 1999 to $3,565,000
at March 31,  2000,  due  primarily to  recurring  depreciation  charges and the
effect of fluctuations in foreign currency  exchange rates,  partially offset by
additions  to  machinery   and  equipment   and   renovations   at  the  Spanish
manufacturing facility.

Drug licenses and related costs,  net increased from  $5,807,000 at December 31,
1999 to $6,171,000 at March 31, 2000,  primarily due to the  acquisition of drug
licenses in Spain,  partially  offset by the effect of  fluctuations  in foreign
currency exchange rates and recurring amortization charges.

Receivables  from related  parties  represent  loans  totaling  $440,000 made to
Executive Officers of the Registrant in March 2000. Proceeds from the loans were
used to pay the  income  taxes on  equity-based  compensation  provided  to such
officers in the prior year.  The loans,  in the form of  promissory  notes,  are
secured by an aggregate  of 50,000  shares of Common Stock owned by the officers
and bear interest at 6.59%  annually.  Interest on the promissory  notes,  which
mature in March 2003, is payable quarterly.

Other  non-current  assets  decreased  from  $1,057,000  at December 31, 1999 to
$507,000 at March 31,  2000,  primarily  due to the  conversion  of 4,878 of the
Registrant's 12% Debentures into approximately 1,951,000 shares of Common Stock.
Unamortized  debt  issuance  costs  totaling   $608,000  were  credited  to  the
Stockholders'  Equity as a result of such conversions.  Other non-current assets
were also reduced as a result of the effect of fluctuations in foreign  currency

                                       16
<PAGE>

exchange rates and recurring amortization charges.

Other  non-current  liabilities  increased from $104,000 at December 31, 1999 to
$135,000 at March 31,  2000,  primarily  as a result of recording a liability to
recognize the Registrant's obligation to issue Common Stock to employees' 401(k)
retirement plan accounts in conjunction  with the  Registrant's  401(k) matching
program.

Investing  activities,  primarily proceeds received from the sale of investments
in the U.S., partially offset by purchases of drug licenses in Spain,  additions
to  machinery  and  equipment  and  capital  improvements  to the  manufacturing
facility in Spain and loans made to Executive  Officers of the  Registrant,  the
proceed  of which were used to pay income  taxes on  equity-based  compensation,
provided  net cash of $160,000  during the three  months  ended March 31,  2000.
Financing  activities,  primarily the exercise of 120,000 Class B Warrants,  the
exercise of 460 Underwriter's  Warrants and the exercise of other stock purchase
warrants to purchase an aggregate of 450,000 shares of Common Stock and proceeds
from short term  borrowings  for working  capital  purposes in Spain  during the
three months ended March 31, 2000, provided net cash of $2,135,000 and operating
activities for the three months ended March 31, 2000 used net cash of $556,000.

Seasonality.  In the past, the Registrant has experienced a positive fluctuation
in the  fourth  quarter  due to  seasonality.  As the  Registrant  markets  more
pharmaceutical  products  whose  sales are  seasonal,  seasonality  of sales may
become more significant.

Effect of inflation and changing prices.  Neither  inflation nor changing prices
has materially impacted the Registrant's net sales or income from operations for
the periods presented.

Given the Registrant's  current  liquidity and cash balances and considering its
future strategic plans  (including its year 2000 budgeted  capital  improvements
and planned  equipment  purchases of approximately  $1,400,000),  the Registrant
should have  sufficient  liquidity to fund operations for the year 2000 and into
the year 2001,  which should be a sufficient  time frame for the  Registrant  to
advance its strategic  objectives and generate sufficient revenues and cash flow
to  support  the  Registrant's  operating  cash  flow  needs.  There  can  be no
assurance,  however,  that changes in the Registrant's  research and development
plans or other events affecting the Registrant's  revenues or operating expenses
will  not  result  in the  earlier  depletion  of the  Registrant's  funds.  The
Registrant,  however, 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.

DERIVATIVE INSTRUMENTS AND HEDGING

Statement of Financial  Accounting  Standards No. 133 (SFAS No. 133) "Accounting
for Derivative  Instruments and Hedging  Activities" was issued in June 1998 and
establishes

                                       17
<PAGE>

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.  SFAS No.  133,  as
amended by SFAS No. 137, is  effective  for all fiscal  quarters of fiscal years
beginning after June 15, 2000, and is not intended to be applied  retroactively.
The Registrant  plans to adopt SFAS No. 133 on January 1, 2001.  Management does
not believe that the adoption of SFAS No. 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 euro zone, 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  after 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 in Spain is fixed at 166.39  pesetas.  The
exchange  rate at March 31,  2000 and  December  31,  1999 was 173.98 and 165.23
pesetas per U.S.  dollar,  respectively.  The weighted average exchange rate for
the three months ended March 31, 2000 and 1999 was 171.56 and 148.30 pesetas per
U.S. dollar,  respectively.  The effect of foreign currency fluctuations on long
lived  assets for the three  months  ended  March 31,  2000 was an  decrease  of
$364,000 and the cumulative  historical effect was a decrease of $2,703,000,  as
reflected in the  Registrant's  Consolidated  Balance Sheets in the "Liabilities
and   Stockholders'   Equity"  section.   Although   exchange  rates  fluctuated
significantly  in recent years, and in particular,  the continuing  weakening of
the euro in  relation  to the U.S.  dollar  in 1999 and year to date  2000,  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  translation,  as can the  translated
amounts of revenues and expenses.  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.

                                       18
<PAGE>

Interest  Rates.   The  weighted  average  interest  rate  on  the  Registrant's
short-term  borrowings is 5.5% and the balance  outstanding  is $1,030,000 as of
March 31, 2000.  The effect of an increase in the  interest  rate of one hundred
basis points (to 6.5%) would have the effect of increasing  interest  expense by
approximately $10,000 annually.

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 Bentley Pharmaceuticals,  Inc. ("Bentley"),
the occurrence of which involve certain risks and uncertainties that could cause
the  Bentley's  actual  results  to differ  materially  from those  expected  by
Bentley,  including  the  risk  that we could  be  required  to cut back or stop
operations  if we are unable to raise or obtain needed  funding;  that we have a
history of losses and if we do not achieve  profitability  we may not be able to
continue our business in the future;  that we may be  restricted  from using our
net  operating  loss carry  forwards due to a change in equity  ownership  and a
change in our tax year;  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 our patent
position is uncertain and our success depends on our proprietary rights; that we
may have to lower  prices or spend more  money to  effectively  compete  against
companies  with greater  resources than us, which could result in lower revenues
and/or  profits;  that rapid  technological  change  may result in our  products
becoming obsolete before we recoup a significant  portion of related costs; that
pharmaceutical  pricing is uncertain and may result in a negative  effect on our
profitability;  that we depend on third  parties  for  commercialization  in the
United  States;  that as a producer  of  "Orphan  Drugs" we may be  required  to
continue  producing the product  regardless of its potential;  that we depend on
key  personnel and must  continue to attract and retain key  employees;  that we
face product  liability risks; that we face risks when doing business outside of
the United  States;  that our  computer  systems  may fail which may disrupt our
business;  that your percentage of ownership,  voting power and price of Bentley
common  stock may  decrease as a result of events  which  increase the number of
shares of our  outstanding  common stock;  that  obligations in connection  with
warrants  and options may hinder our ability to obtain  future  financing;  that
your interest in Bentley may be diluted by the issuance of preferred  stock with
greater  rights than the common  stock,  which we can sell or issue at any time;
that we have not paid  dividends  on our  common  stock and do not intend to pay
dividends in the  foreseeable  future;  that certain laws and  provisions in our
certificate  of  incorporation  and by laws make it more difficult or discourage
third  parties  from  attempting  to control  Bentley,  and other  uncertainties
detailed in Bentley's  Annual Report on Form 10-K (SEC File No. 1-10581) for the
year ended December 31, 1999.

                                       19
<PAGE>

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

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

          (a)Exhibits:

             27.1       Financial Data Schedule (Filed herewith.)

          (b)Reports on Form 8-K filed during the quarter ended March 31, 2000:

                   None.

          The Registrant has not filed any reports on Form 8-K subsequent to
March 31, 2000.

All other items required in Part II have been previously filed or are not
applicable for the quarter ended March 31, 2000.

                                       20
<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.
<TABLE>
<CAPTION>

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

<S>                               <C>
May 4, 2000                        By:      /s/ James R. Murphy
                                            --------------------------------------------
                                            James R. Murphy
                                            Chairman, President and Chief Executive Officer
                                            (principal executive officer)




May 4, 2000                        By:      /s/ Michael D. Price
                                            --------------------------------------------
                                            Michael D. Price
                                            Vice President, Chief Financial Officer,
                                            Treasurer and Secretary (principal financial
                                            and accounting officer)
</TABLE>