SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13D
(RULE 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED
PURSUANT TO RULE 13d-1(a) AND AMENDMENTS
THERETO FILED PURSUANT TO RULE 13d-2(a)
HALSEY DRUG CO., INC.
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(Name of Issuer)
Common Stock, par value $0.01 per share
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(Title of Class of Securities)
4063691087
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(CUSIP Number)
Michael Reicher
Halsey Drug Co., Inc.
695 No. Perryville Road
Rockford, Illinois 61107
Tel. No.: (815) 399-2060
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(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
December 20, 2002
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(Date of Event Which Requires Filing of this Statement)
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If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[ ]
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 or otherwise subject to the liabilities of that section of the Exchange Act
but shall be subject to all other provisions of the Exchange Act (however, see
the Notes).
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
MICHAEL REICHER
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (A) [ ]
(B) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
PF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
ILLINOIS
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NUMBER OF 7 SOLE VOTING POWER
SHARES 1,559,074
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BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 1,559,074(1)
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EACH 9 SOLE DISPOSITIVE POWER
REPORTING 1,559,074
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PERSON 10 SHARED DISPOSITIVE POWER
WITH 1,559,074(1)
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,559,074(1)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [X](1)
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.9%
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14 TYPE OF REPORTING PERSON*
IN
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(1) The Reporting Person disclaims ownership of 79,104,298 Shares, which may be
deemed beneficially owned by him. See Item 4 below.
SCHEDULE 13D Page 3 of 10 Pages
Item 1. Security and Issuer.
This statement on Schedule 13D (this "Schedule 13D") relates to the
Common Stock, par value $0.01 per share (the "Shares"), of Halsey Drug
Co., Inc., a New York corporation (the "Company"). The principal
executive offices of the Company are located at 695 N. Perryville Road,
Crimson Building No. 2, Unit 4, Rockford, Illinois 61107.
Item 2. Identity and Background.
(a) This Schedule 13D is being filed by Michael Reicher,
an individual (the "Reporting Person").
(b) The Reporting Person's business address is c/o Halsey
Drug Co., Inc., 695 N. Perryville Road, Crimson
Building No. 2, Unit 4, Rockford, Illinois 61107.
(c) The Reporting Person is the Chief Executive Officer
and Chairman of the Board of the Company.
(d) During the five years prior to the date hereof, the
Reporting Person has not been convicted in a criminal
proceeding (excluding traffic violations and similar
misdemeanors).
(e) During the five years prior to the date hereof, the
Reporting Person was not a party to a civil
proceeding of a judicial or administrative body of
competent jurisdiction as a result of which he 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) The Reporting Person is a citizen of the United
States of America.
Item 3. Source and Amount of Funds or Other Consideration.
The Reporting Person invested his personal funds in the acquisition of
Shares with respect to which he has sole voting and dispositive power.
The Reporting Person did not invest any funds in the acquisition of
79,104,298(2) Shares, which he may be deemed to own beneficially by
virtue of the co-sale provisions discussed in Item 4 below.
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(2) The disclaimer by the Reporting Person of 79,104,298 shares is based upon
the current aggregate beneficial ownership of Shares by the 2002 Holders, Oracle
and Clemens (each, as defined in Item 4). When the proposed amendment to the
Company's Certificate of Incorporation, including, without limitation, the
increase in the Company's authorized capital, is approved by its shareholders,
the number of Shares beneficially owned by the 2002 Holders, Oracle and Clemens
and disclaimed by the Reporting Person shall be 183,600,458, in the aggregate.
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SCHEDULE 13D Page 4 of 10 Pages
Item 4. Purpose of Transaction.
A. Debenture Purchase Agreement
Pursuant to the Debenture Purchase Agreement, dated December 20, 2002,
by and among the Company, Care Capital Investments II, LP ("Care"),
Essex Wodlands Health Ventures V, L.P. ("Essex"), Peter Clemens
("Clemens"), the Reporting Person and the other parties set forth on
Exhibit A attached thereto (the "Debenture Purchase Agreement"),
annexed hereto as Exhibit 1 and described more fully below, the Company
completed a private sale of its 5% convertible senior secured
debentures (the "Debentures") to Care, Essex and certain other
purchasers (collectively, the "2002 Holders").
Article XVIII (Co-Sale Rights) of the Debenture Purchase Agreement
provides, inter alia, that if Galen Partners, L.P., Galen Partners
International III, L.P., Galen Employee Fund III, L.P. (collectively,
"Galen"), Oracle Strategic Partners L.P. ("Oracle"), Michael Reicher,
Chief Executive Officer of the Company, or Peter Clemens, Chief
Financial Officer of the Company, intends to transfer any Shares owned
by it/him or any Debentures or certain other debt securities owned by
it/him, such transferor (the "Selling Security Holder") must notify the
2002 Holders in writing of such proposed transfer and the terms and
conditions thereof. Within 15 business days of the date of such notice,
each 2002 Holder must notify the Selling Security Holder if such holder
elects to participate in the proposed transfer described in the written
notice provided by the Selling Security Holder. Any 2002 Holder that
desires to participate in such transfer may do so on a pro rata basis,
subject to certain terms and conditions, as more fully described in the
Debenture Purchase Agreement.
By virtue of the co-sale rights discussed above, the Reporting Person
reports shared voting power and shared dispositive power with respect
to 79,104,298(2) Shares owned by the 2002 Holders, Oracle, and Clemens.
The Reporting Person disclaims ownership of such 79,104,298(2) Shares.
The filing of this Schedule 13D shall not be construed as an admission
that the Reporting Person is, for the purposes of Section 13(d) or
13(g) of the Securities Exchange Act of 1934, as amended, the
beneficial owner of any securities with respect to which he does not
have sole voting power and/or dispositive power.
The above summary description of the Debenture Purchase Agreement is
not intended to be complete and is qualified in its entirety by
reference to the full text of the Debenture Agreement annexed hereto as
Exhibit 1, which is incorporated herein by reference.
B. Voting Agreement
As contemplated in the Debenture Purchase Agreement, the Reporting
Person and certain other security holders executed a Voting Agreement,
dated December 20, 2002 (the "Voting Agreement"), annexed hereto as
Exhibit 2, providing that, among other things, each such person shall
vote the Shares (including Shares underlying any
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SCHEDULE 13D Page 5 of 10 Pages
existing debentures of the Company) owned by it in favor of the
proposals described in the Debenture Purchase Agreement, including,
without limitation, certain amendments to the Company's Certificate of
Incorporation. The Voting Agreement also provides that each of the
signatories to the Voting Agreement shall vote the Shares (including
Shares underlying any existing debentures of the Company), and take or
cause to be taken such other actions, as may be required from time to
time to elect to the Board of Directors of the Company one person
designated by Care and one person designated by Essex.
The above summary description of the Voting Agreement is not intended
to be complete and is qualified in its entirety by reference to the
full text of the Voting Agreement annexed hereto as Exhibit 2, which is
incorporated herein by reference.
C. Stock Option Agreements.
The reporting person is a party to certain Stock Option Agreements
between the Company and the Reporting Person (the "Option Agreements"),
annexed hereto as Exhibit 3.
Subject to the terms of the Option Agreements, Reporting Person has
options to purchase 1,425,000 Shares at exercise prices ranging from
$1.11 to $2.38. Of the 1,425,000 Shares, 1,131,250 Shares are vested
and 293,750 are unvested.
The above summary description of the Option Agreements is not intended
to be complete and is qualified in its entirety by reference to the
full text of the Option Agreements annexed hereto as Exhibit 3, which
is incorporated herein by reference.
Except as set forth herein, or as set forth in the Exhibits annexed the
Reporting Person does not have any plans or proposals that relate to or
would result in any of the following:
(i) the acquisition by any person of additional
securities of the Company, or the disposition of
securities of the Company;
(ii) an extraordinary corporate transaction, such as a
merger, reorganization or liquidation, involving the
Company or any of its subsidiaries;
(iii) a sale or transfer of a material amount of assets of
the Company or of any of its subsidiaries;
(iv) any change in the present board of directors or
management of the Company, including plans or
proposals to change the number or term of directors
or to fill any existing vacancies on the board;
(v) any material change in the present capitalization or
dividend policy of the Company;
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SCHEDULE 13D Page 6 of 10 Pages
(vi) any other material change in the Company's business
or corporate structure, including but not limited to,
if the Company is a registered closed-end investment
company, any plans or proposals to make any changes
in its investment policy for which a vote is required
by Section 13 of the Investment Company Act of 1940;
(vii) changes in the Company's charter, bylaws or
instruments corresponding thereto or other actions
which may impede the acquisition of control of the
Company by any person;
(viii) causing a class of securities of the Company to be
delisted from a national securities exchange or to
cease to be authorized to be quoted in an
inter-dealer quotation system of a registered
national securities association;
(ix) a class of equity securities of the Company becoming
eligible for termination of registration pursuant to
Section 12(g)(4) of the Act; or
(x) any action similar to any of those enumerated above.
Item 5. Interest in Securities of the Issuer.
(a) As more fully described in Item 4 above, the
Reporting Person is a beneficial owner of
1,559,074(1) Shares constituting 6.9% of the
outstanding capital stock of the Company. In the
event of the approval of the Amendment to the
Company's Certificate of Incorporation by its
Shareholders, as contemplated by the Debenture
Purchase Agreement, the Reporting Person will become
a beneficial owner of 1,745,187 Shares constituting
7.66% of the outstanding capital stock of the
Company.
(b) The Reporting Person has sole voting power and
dispositive power with respect to 1,559,074(1) Shares
constituting 6.9% of the outstanding capital stock of
the Company. Due to the co-sale provisions of the
Debenture Purchase Agreement, the Reporting Person
may be deemed to be the beneficial owner of
approximately 79,104,298(2) Shares. Such beneficial
ownership is specifically disclaimed by the Reporting
Person.
(c) During the past sixty days prior to the date hereof
the Reporting Person has not engaged in any
transaction in the Shares.
(d) No person, other than the Reporting Person, is known
to have the right to receive or the power to direct
the receipt of dividends from, or the proceeds from
the sale of, any Shares owned by the Reporting
Person.
(e) Not applicable.
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SCHEDULE 13D Page 7 of 10 Pages
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer.
See response to Item 4.
A copy of the Debenture Purchase Agreement is attached hereto as
Exhibit 1 and is incorporated herein by reference.
A copy of the Voting Agreement is attached hereto as Exhibit 2 and is
incorporated herein by reference.
Copies of the Option Agreements are attached hereto as Exhibit 3 and
are incorporated herein by reference.
SIGNATURE
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: March 12, 2003 /s/ Michael Reicher
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Michael Reicher
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