SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Halsey Drug Co., Inc.
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(Name of Issuer)
Common Stock, $.01 par value
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(Title of Class of Securities)
4063691087
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(CUSIP Number of Class of Securities)
Larry N. Feinberg
c/o Oracle Strategic Partners, L.P.
200 Greenwich Avenue, 3rd Floor
Greenwich, CT 06830
(203) 862-7900
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
Copies to:
Daniel Schloendorn, Esq.
Willkie Farr & Gallagher
787 Seventh Avenue
New York, NY 10019-6099
(212) 728-8000
May 26, 1999
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(Date of Event which Requires
Filing of this Schedule)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D,
and is filing this schedule because of ss.ss. 240.13d-1(e),
240.13d-1(f) or 240.13d-1(g), check the following box:
NOTE: Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. See Rule
240.13d-7 for other parties to whom copies are to be sent.
SCHEDULE 13D
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CUSIP No. 4063691087 Page 2 of 15 Pages
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Larry N. Feinberg
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
AF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
-------------- ---------- -----------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF ---------- -----------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 9,875,114
EACH --------- -----------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH
0
--------- -----------------------------------------------------
10 SHARED DISPOSITIVE POWER
9,875,114
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
9,875,114
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
39.7%
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14 TYPE OF REPORTING PERSON*
IN
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CUSIP No. 4063691087 Page 3 of 15 Pages
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Oracle Strategic Capital, L.L.C.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
AF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
-------------- ---------- -----------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF ---------- -----------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 9,875,114
EACH --------- -----------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH
0
--------- -----------------------------------------------------
10 SHARED DISPOSITIVE POWER
9,875,114
-------------- ----------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
9,875,114
-------------- ----------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
-------------- ----------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
39.7%
-------------- ----------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
00
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CUSIP No. 4063691087 Page 4 of 15 Pages
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-------------- ----------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Oracle Strategic Partners, L.P.
-------------- ----------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [ ]
-------------- ----------------------------------------------------------------
3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
-------------- ---------- -----------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER OF ---------- -----------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 9,875,114
EACH --------- -----------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH
0
--------- -----------------------------------------------------
10 SHARED DISPOSITIVE POWER
9,875,114
-------------- ----------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
9,875,114
-------------- ----------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
-------------- ----------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
39.7%
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14 TYPE OF REPORTING PERSON*
PN
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Item 1. Security and Issuer.
This statement on Schedule 13D ("Schedule 13D") is being filed with
respect to the common stock, $0.01 par value (the "Common Stock"), of Halsey
Drug Co., Inc., a New York corporation (the "Company"). The Company's principal
executive office is located at 695 N. Perryville Road, Crimson Building No. 2,
Unit 4, Rockford, Illinois 61107.
Item 2. Identity and Background.
(a) This statement is filed by:
(i) Oracle Strategic Partners, L.P., a Cayman Islands limited
partnership ("Strategic Partners"), with respect to shares of Common Stock
directly owned by it;
(ii) Oracle Strategic Capital, L.L.C., a Delaware limited liability
company ("Strategic Capital"), which serves as general partner to Strategic
Partners and has investment discretion over the shares of Common Stock directly
owned by it; and
(iii) Mr. Larry N. Feinberg ("Mr. Feinberg"), who serves as
managing member of Strategic Capital with control over its business activities.
5
The foregoing persons are hereinafter sometimes collectively referred
to as the "Reporting Persons." Any disclosures herein with respect to persons
other than the Reporting Persons are made on information and belief after making
inquiry to the appropriate party.
(b) The address of the principal business and principal office of
Strategic Partners and Strategic Capital is 200 Greenwich Avenue, Greenwich,
Connecticut 06830. The business address of Mr. Feinberg is 200 Greenwich Avenue,
Greenwich, Connecticut, 06830.
(c) The principal business of Strategic Partners is to invest in
securities. The principal business of Strategic Capital is to serve as general
partner to and exercise investment discretion over securities held by Strategic
Partners. Mr. Feinberg is the managing member of Strategic Capital.
(d) None of the Reporting Persons nor, to the best of their knowledge,
any of their directors, executive officers, general partners or members has,
during the last five years, been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors).
6
(e) None of the Reporting Persons nor, to the best of their knowledge,
any of their directors, executive officers, general partners or members has,
during the last five years, been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
(f) Strategic Partners is organized under the laws of the Cayman
Islands. Strategic Capital is organized under the laws of the State of Delaware.
Mr. Feinberg is a citizen of the United States of America.
Item 3. Source and Amount of Funds or Other Consideration.
On May 26, 1999, the Company completed a private sale of 5% convertible
senior secured debentures ("Debentures") and Common Stock purchase warrants
("Warrants") (the "Oracle Offering") to Strategic Partners and certain other
Company shareholders (the "Oracle Investor Group") pursuant to a certain
Debenture and Warrant Purchase Agreement dated May 26, 1999 (the "Oracle
Purchase Agreement") by and among the Company, Strategic Partners and other
investors in the Oracle Investor Group. Pursuant to the Oracle Purchase
7
Agreement, Strategic Partners acquired $5,000,000 face amount of Debentures
convertible into Common Stock at a conversion price of $1.4040 per share and
Warrants to purchase Common Stock at an exercise price of $1.4040 per share. The
Debentures and the Warrants are currently convertible into, or exercisable for,
an aggregate of 3,561,254 and 1,010,100 shares of Common Stock, respectively.
The Debentures and the Warrants are convertible or exercisable at any time, at
the option of their holder, into Common Stock.
In accordance with the Oracle Purchase Agreement, Strategic Partners
funded an additional investment installment on July 27, 1999. In connection with
this additional funding, Strategic Partners acquired $5,000,000 face amount of
Debentures convertible into Common Stock at a conversion price of $1.4040 per
share and Warrants to purchase Common Stock at an exercise price of $2.285 per
share. These Debentures and the Warrants are currently convertible into, or
exercisable for, an aggregate of 3,561,254 and 1,010,100 shares of Common Stock,
respectively. Pursuant to an agreement reached between the Company and Strategic
Partners on March 20, 2000, a final investment installment to be made by
Strategic Partners was waived.
8
The Debentures also pay interest at the rate of 5% per annum, in the
form of additional Debentures, quarterly on each January 1, April 1, July 1 and
October 1 of each year. Strategic Partners has acquired an additional $773,830
face amount of Debentures to date pursuant to this feature, which are currently
exercisable for an aggregate of 722,406 shares of Common Stock.
Strategic Partners also has acquired options exercisable for 10,000
shares of Common Stock (the "Options") at no additional cost as compensation for
the services of Mr. Joel Liffmann ("Mr. Liffmann") as a member of the board of
directors of the Company. Mr. Liffmann is a general partner of an affiliate of
Strategic Partners.
Strategic Partners, Strategic Capital and Mr. Feinberg may be deemed to
beneficially own the underlying Common Stock which may be acquired upon
conversion or exercise of the foregoing Debentures, Warrants and Options owned
by Strategic Partners. The source of the amounts paid for these securities, all
of which were acquired in privately negotiated transactions, was the working
capital of Strategic Partners.
9
Item 4. Purpose of Transaction.
The shares of Common Stock deemed to be beneficially owned by Strategic
Partners, Strategic Capital and Mr. Feinberg were acquired for, and are being
held for, investment purposes. The shares of Common Stock were acquired in the
ordinary course of business and not for the purpose of acquiring control of the
Company.
The Reporting Persons may in the future directly acquire shares of
Common Stock in open market or private transactions, block purchases or
otherwise. The Reporting Persons may continue to hold or dispose of all or some
of the securities reported herein from time to time, in each case in open market
or private transactions, block sales or purchases or otherwise, subject to
compliance with applicable law. In that regard, pursuant to Article XI of the
Oracle Purchase Agreement, the Reporting Persons are entitled to certain
registration rights with respect to the Common Stock to permit the public sale
thereof in accordance with the Securities Act of 1933, as amended, and
applicable state securities laws. Other than as set forth herein, none of the
Reporting Persons has any plans or proposals which relate to, or could result
in, any of the matters referred to in paragraphs (b) through (j), inclusive, of
Item 4 of the Schedule 13D. Each of the
10
Reporting Persons may, at any time and from time to time, review or reconsider
his or its position and formulate plans or proposals with respect thereto, but
has no present intention of doing so.
Item 5. Interest in Securities of the Issuer.
(a) As of the close of business on August 9, 2001, the Reporting
Persons were the beneficial owners, within the meaning of Rule 13d-3 under the
Exchange Act, of 9,875,114 shares of Common Stock. As of May 11, 2001, these
shares represented 39.7% of the sum of (i) the 14,995,932 total shares of Common
Stock outstanding as reported in the Company's Form 10Q for the quarterly period
ended March 31, 2001 and (ii) the 9,875,114 shares of Common Stock which would
be received by Strategic Partners upon conversion or exercise of the Company
securities which it holds.
(b) The sole or shared power to vote or dispose of, or to direct the
vote or disposition of the Common Stock with respect to each Reporting Person
noted in paragraph (a) of this Item 5 is as set forth on the cover sheets of
this Schedule 13D.
11
Strategic Capital does not directly own any of the Common Stock.
Strategic Capital may be deemed to beneficially own 9,875,114 shares of Common
Stock by virtue of the investment discretion it exercises over Strategic
Partners as general partner.
Mr. Feinberg does not directly own any of the Common Stock. Mr.
Feinberg may be deemed to beneficially own 9,875,114 shares of Common Stock by
virtue of his control over the business activities of Strategic Capital as
managing member.
(c) The holdings of the Reporting Persons with respect to securities of
the Company consist solely of the Debentures, Warrants and Options. None of the
Reporting Persons directly hold any shares of Common Stock. There have been no
transactions involving the shares of Common Stock of the Company engaged in
during the 60 day period prior to and including May 26, 1999 up to the present.
Item 6. Contracts, Arrangements, Understandings or Relationships
with Respect to Securities of the Issuer.
Strategic Partners is a party to the Oracle Purchase Agreement, which
governed the issuance of certain of the securities reported upon herein. The
Debentures and the Warrants received by Strategic Partners are also governed by
the terms and provisions set forth in the documents or
12
instruments constituting such debentures and warrants, respectively. The Oracle
Purchase Agreement, a Form of Debenture and a Form of Warrant are each
incorporated by reference herein as exhibits. The Options are governed by the
terms of the Halsey Drug Co., Inc. 1998 Stock Option Plan, attached hereto as an
exhibit, and are evidenced by an option agreement with provisions determined in
accordance with this plan.
In addition, the Reporting Persons have entered into a Joint
Acquisition Statement, as required by Rule 13d-1(k) under the Exchange Act.
Other than as set forth herein, there are no contracts, arrangements,
understandings or relationships (legal or otherwise) among the Reporting Persons
named in Item 2 of this statement and between such Reporting Persons and any
person with respect to any securities of the Company, including but not limited
to transfer or voting of any of the securities, finder's fees, joint ventures,
loan or option arrangements, puts or calls, guarantees of profits, division of
profits or loss, or the giving or withholding of proxies.
13
Item 7. Material to be Filed as Exhibits.
1. Joint Filing Agreement, dated as of August 10, 2001, by and among
the Feinberg Persons.
2. Oracle Purchase Agreement (incorporated by reference to Exhibit
10.72 to the Company's Annual Report on Form 10-K for the year ended December
31, 1999).
3. Form of 5% Convertible Senior Secured Debenture issued pursuant to
the Oracle Purchase Agreement (incorporated by reference to Exhibit 10.73 to the
Company's Annual Report on Form 10-K for the year ended December 31, 1999).
4. Form of Common Stock Purchase Warrant issued pursuant to the Oracle
Purchase Agreement (incorporated by reference to Exhibit 10.74 to the
Registrant's Annual Report on Form 10-K for the year ended December 31, 1999).
5. Halsey Drug Co., Inc. 1998 Stock Option Plan, as amended.
14
SIGNATURES
After reasonable inquiry and to the best of our knowledge and belief,
the undersigned certify that the information set forth in this statement is
true, complete and correct.
Dated: August 10, 2001 /s/ Larry N. Feinberg
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Larry N. Feinberg
Dated: August 10, 2001 ORACLE STRATEGIC CAPIAL, L.L.C.
By: /s/ Larry N. Feinberg
------------------------------
Name: Larry N. Feinberg
Title: Managing Member
Dated: August 10, 2001 ORACLE STRATEGIC PARTNERS, L.P.
By: ORACLE STRATEGIC CAPIAL,
L.L.C., General Partner
By: /s/ Larry N. Feinberg
------------------------------
Name: Larry N. Feinberg
Title: Managing Member