For The Quarterly Period Ended March 31, 2004

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WxMf10lbY9I8idhBZATre95E50FA5EJTPCBh69jcr6ii+tcgwV5uAFEmlggGpyaZ 9O07PFdy4IgGHzuxSOJgpw== 0001193125-04-089727.txt : 20040517 0001193125-04-089727.hdr.sgml : 20040517 20040517122301 ACCESSION NUMBER: 0001193125-04-089727 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 20040331 FILED AS OF DATE: 20040517 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SENETEK PLC /ENG/ CENTRAL INDEX KEY: 0000789944 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 770039728 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14691 FILM NUMBER: 04810735 BUSINESS ADDRESS: STREET 1: 23 PALACE STREET STREET 2: LONDON CITY: UNITED KINGDOM STATE: X0 ZIP: SW1E 5HW BUSINESS PHONE: 7072263900 MAIL ADDRESS: STREET 1: 620 AIRPARK RD STREET 2: LONDON SW1E 5HW CITY: NAPA STATE: CA ZIP: 94450 10-Q 1 d10q.htm FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2004 For The Quarterly Period Ended March 31, 2004

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, 2004

¨	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 0-14691

SENETEK PLC

(Exact name of registrant as specified in its charter)


England		77-0039728
(State or other jurisdiction of Incorporation or organization)		(I.R.S. Employer Identification No.)

620 Airpark Road, Napa, California		94558
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number including area code: (707) 226-3900

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 ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

At May 14, 2004, there were 60,661,698 of the registrant’s Ordinary shares outstanding.

Table of Contents

SENETEK PLC AND SUBSIDIARIES

INDEX TO FORM 10-Q

QUARTER ENDED MARCH 31, 2004


		Page
PART I	FINANCIAL INFORMATION

Item 1	Financial Statements	3

	Unaudited Consolidated Statements of Operations Three Months Ended March 31, 2004 and March 31, 2003	3

	Consolidated Balance Sheets March 31, 2004 (unaudited) and December 31, 2003	4

	Unaudited Consolidated Statement of Stockholders’ Equity and Comprehensive Income (Loss) Three Months ended March 31, 2004	5

	Unaudited Consolidated Statements of Cash Flows Three Months Ended March 31, 2004 and March 31, 2003	6

	Notes to the Unaudited Consolidated Financial Statements	7

Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10

Item 3	Quantitative and Qualitative Disclosure About Market Risk	12

Item 4	Controls and Procedures	12

PART II.	OTHER INFORMATION	13

Item 1	Legal Proceedings	13

Item 6	Exhibits and Reports on Form 8-K	13

SIGNATURES		14

PART I FINANCIAL INFORMATION

Item 1

Financial Statements

SENETEK PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(Unaudited)


	Three Months Ended March 31,
	2004			2003
Revenues:
Product sales	$	211		$	902
Royalties & Licensing (Note 7)		3,034			1,170

Total Revenue		3,245			2,072

Cost of Sales—Products		63			201
Royalties & Licensing		170			125

Total Cost of Sales		233			326

Gross Profit		3,012			1,746

Operating Expenses:
Research & Development		316			348
Administration, Sales and Marketing		1,860			1,056

Total Operating Expenses		2,176			1,404

Operating Income		836			342
Interest income		—			7
Interest expense (including amortization of debt discount)		(242	)		(365	)

Income (loss) from continuing operations before income taxes		594			(16	)
Provision for income taxes		(7	)		(14	)

Income (loss) from continuing operations		587			(30	)

Discontinued operations:
Interest income		45			—
Royalty and license fee, net		—			(39	)

Income (loss) from Discontinued Operations		45			(39	)

Net Income (loss) attributable to Ordinary Shareholders	$	632		$	(69	)

Basic and Diluted Income (Loss) from Continuing Operations	$	.01		$	(—	)
Basic and Diluted Income (Loss) from Discontinued Operations	$	—		$	(—	)

Basic and Diluted Income (Loss) per Ordinary share outstanding	$	.01		$	(—	)

Weighted average Basic Ordinary shares outstanding		59,052			59,052
Weighted average Diluted Ordinary shares Outstanding		61,448			59,052

See accompanying notes to unaudited consolidated financial statements.

SENETEK PLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

SENETEK PLC

CONSOLIDATED BALANCE SHEETS

($ in thousands, except share and per share amounts)


	March 31 2004 (unaudited)			December 31, 2003
ASSETS
Current Assets
Cash and Cash Equivalents	$	499		$	1,187
Trade Receivables, net of allowance for doubtful accounts of $10,000 in 2004 and 2003 (Note 7)		2,581			660
Non-trade Receivables, net of provisions of $33,000 in 2004 and 2003		18			22
Inventory, net of provisions of $266,000 in 2004 and $320,000 in 2003		367			386
Prepaids and Deposits		290			304

Total Current Assets		3,755			2,559
Property & Equipment—net		475			510
Asset held for sale		250			250
Goodwill		1,308			1,308

Total Assets	$	5,788		$	4,627

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Accounts Payable	$	2,015		$	1,287
Accrued Liabilities		741			688
Deferred Revenue and License Fees		533			970
Notes Payable – Current (Note 8)		—			500

Total Current Liabilities		3,289			3,445

Long Term Liabilities
Notes Payable, net of current portion and discount of $1,657,000 in 2004 and $1,795,000 in 2003 (Note 8)		3,232			2,594
Other Long Term Liabilities		60			68
Deferred License Fees		1,406			1,449
Commitments, Contingencies and Subsequent Event (Note 8)
Stockholders’ Deficit
Ordinary shares
Authorized shares: $0.08 (5 pence) par value: 100,000,000; Issued and Outstanding shares 2004 and 2003: 59,052,153		4,763			4,763
Share Premium		83,911			83,806
Accumulated Deficit		(90,920	)		(91,552	)
Accumulated Other Comprehensive Income—Currency Translation		47			54

Total Stockholders’ Deficit		(2,199	)		(2,929	)

Total Liabilities and Stockholders’ Deficit	$	5,788		$	4,627

See accompanying notes to unaudited consolidated financial statements.

SENETEK PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY AND

COMPREHENSIVE INCOME (LOSS) FOR THE THREE MONTHS ENDED MARCH 31, 2004

(in thousands, except shares outstanding)

(unaudited)


	Ordinary Shares	Shares Amount		Share Premium		Accumulated Deficit			Accumulated Other Comprehensive Income– Currency Translation			Net Stockholder Equity
Balances, January 1, 2004	59,052,153	$	4,763	$	83,806	$	(91,552	)	$	54		$	(2,929	)
Fair value of options issued to consultants					105								105
Comprehensive income
Net income							632						632
Translation loss, net of tax										(7	)		(7	)

Total Comprehensive Income							632			(7	)		625

Balances, March 31, 2004	59,052,153	$	4,763	$	83,911	$	(90,920	)	$	47		$	(2,199	)

For the three months ended March 31, 2003 the translation gain was $5 and total comprehensive loss was $64.

See accompanying notes to unaudited consolidated financial statements.

SENETEK PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	Three Months Ended March 31,
	2004			2003
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (loss)	$	632		$	(69	)
(Income) loss from Discontinued Operations		(45	)		39

Income (loss) from Continuing Operations		587			(30	)
Adjustments to reconcile net income (loss) to net cash from operating activities:
Depreciation and amortization		173			248
Stock option compensation		105			10
Changes in assets and liabilities:
Trade receivables		(1,921	)		(57	)
Non-trade receivables		4			(26	)
Inventory		19			66
Prepaids and deposits		14			(36	)
Accounts payable and accrued liabilities		781			(24	)
Deferred license Fees		(480	)		(43	)

Net Cash Provided by (used in) Continuing Operations		(718	)		108
Net Cash Provided by Discontinued Operations		45			39

Net Cash Provided by (used in) Operating Activities		(673	)		147

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of Property and Equipment		—			(8	)

Net Cash Used by Investing Activities		—			(8	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Principal Payment on Debt		(8	)		(8	)

Net Cash used in Financing Activities		(8	)		(8	)

NET INCREASE IN CASH AND CASH EQUIVALENTS		(681	)		131
Cash and cash equivalents at the beginning of period		1,187			3,572
Effect of exchange rate changes on cash		(7	)		5

CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	$	499		$	3,708

Supplemental disclosures of cash flow information are as follows:
Cash Paid for:
Interest	$	—		$	—
Income Taxes		—			104

See accompanying notes to unaudited consolidated financial statements.

SENETEK PLC AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation

The interim consolidated financial statements incorporate the accounts of Senetek PLC (“Senetek” or “the Company”) and its wholly-owned subsidiaries, Senetek Drug Delivery Technologies Inc. (“SDDT”) (formerly MEIS Corporation) and Carme Cosmeceutical Sciences, Inc. (“CCSI”) (formerly Carme International Inc.) (both Delaware corporations), and Senetek Asia (HK) for the three months ended March 31, 2004 and March 31, 2003. CCSI was incorporated on June 21, 1995 and commenced its operations on September 26, 1995 when it acquired certain assets of Carme Inc. (a Nevada corporation) in an arms-length transaction. In March 2001, the Company formed, Senetek Asia (HK) Limited, a Hong Kong subsidiary that has been inactive since formation. All significant inter-company balances and transactions have been eliminated in consolidation.

The interim consolidated financial statements reflect all adjustments (which include only normal, recurring adjustments) which, in the opinion of management, are necessary for the fair presentation of the results of the Company at the dates of and for the periods covered by the interim financial statements. The interim consolidated financial statements have been prepared by the Company without audit. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission.

These interim statements should be read in conjunction with the financial statements and notes thereto included in the Company’s 2003 Annual Report on Form 10-K.

Results of operations for the three months ended March 31, 2004 are not necessarily indicative of results to be achieved for the full fiscal year.

2. Inventory at cost comprises:


	March 31, 2004		December 31, 2003
	(in thousands)
Finished Goods	$	168	$	183
Raw Materials		168		172
Work in Progress		31		31

	$	367	$	386

3. Stock Compensation Expense

The Company accounts for employee stock options using the intrinsic value method. If the fair value method of accounting had been applied, results would have been:


	Three Months ended March 31,
	2004			2003
*Pro forma impact of fair value method*
Reported net income (loss)	$	632		$	(69	)
Less: total stock-based employee compensation expense determined under the fair value based method for all awards		(162	)		(183	)

Pro forma net income (loss)		470			(252	)

*Earnings per common share*
Basic and diluted–as reported	$	0.01		$	0.00
Basic and diluted–pro forma	$	0.01		$	0.00

4. Earnings per Share

Earnings per share were computed under the provisions of Statement of Financial Accounting Standards No.128, “Earnings Per Share”. The following is a reconciliation of the numerators and denominators of basic and diluted earnings per share computations.


	Three Months Ended March 31,
	2004		2003
	(in thousands)
Numerator:
Basic and Diluted Income (Loss) from Continuing Operations	$	587	$	(30	)
Income (Loss) from Discontinued Operations		45		(39	)

Basic and Diluted Net Income (Loss)	$	632	$	(69	)

Denominator:
Basic weighted average shares outstanding		59,052		59,052
Stock options and warrants “in the money”-treasury stock method		2,396		—

Diluted weighted average Shares outstanding		61,448		59,052

Options and warrants to purchase 18,021,458 and 15,564,493 shares of stock were outstanding at March 31, 2004 and 2003, respectively, but were not included in the computation of diluted loss per Ordinary share outstanding because the effect would have been antidilutive because of a net loss or the exercise price is currently above average closing price, except for the assumed exercise of 5,893,287 options and warrants. Using the treasury stock method, the proceeds from the assumed exercise price of such options and warrants are assumed to have been used to purchase 3,496,806 shares of stock, resulting in additional net outstanding shares of 2,396,485 for the three months ended March 31, 2004.

5. Segment Reporting


	Three months ended March 31, 2004
	Pharmaceutical			Skincare		Total
	(in thousands)
Net revenues to external customers	$	432		$	2,813	$	3,245
Operating (loss) income		(443	)		1,279		836
(Loss) income from continuing operations available to common shareholders before taxes		(685	)		1,279		594

	Three months ended March 31, 2003
	Pharmaceutical			Skincare		Total
	(in thousands)
Net revenues to external customers	$	277		$	1,795	$	2,072
Operating (loss) income		(508	)		850		342
(Loss) income available to common shareholders before taxes from continuing operations		(873	)		857		(16	)

The allocation of administration, sales and marketing expense between segments is generally done on an equal basis. For the quarter ended March 31, 2004, the majority of legal fees were allocated to Skincare to match the revenue recognized from the settlement of the OMP litigation.

6. Discontinued Operations

On December 31, 2002, the Company completed a transaction in which U.S. International Trading Corporation (“USITC”) purchased rights to the Mill Creek personal care line, the Silver Fox hair care line and other brands acquired in the 1995 acquisition of Carme Inc. (which are referred to hereafter as the intellectual property) for $400,000 cash, a promissory note of $2.3 million payable in 23 quarterly installments, plus interest at 10%, commencing September 30, 2003 and the application of a deposit of $100,000 made by USITC in 1999 towards the agreed-upon purchase price of $2.8 million. The transaction closed on September 30, 2002 and delivery of the intellectual property, which had no carrying value, was made on December 31, 2002, concurrent with the receipt of $400,000 cash from USITC.

The Company accounted for this transaction as a sale of assets. The gain on the transaction will be recognized when collection is probable, which is deemed to be when cash is received. Accordingly, the balance of the unpaid promissory note of $2.3 million will be netted with the deferred gain on the balance sheet. Any gain on the transaction in excess of the initial payment of $400,000 and the previously unamortized portion of the $100,000 deposit made by USITC will be deferred until collection is deemed to be probable. All gains arising from this transaction will be classified as a component of discontinued operations. Additionally, the related royalty and license income earned prior to the transaction date have been reclassified to discontinued operations.

During the quarter ended March 31, 2004, USITC paid the Company $45,000 of interest related to the above mentioned notes payable. As of March 31, 2004, USITC is delinquent on scheduled principal and interest payments totaling approximately $494,000. The Company is currently working with USITC to bring the note current and assure timely performance in the future.

The Company had licensed the intellectual property to USITC since 1999, and USITC made the purchase under a purchase option provided for in the license agreement. The purchase and sale agreement, among other things, terminated the 1999 license agreement. Other than the 1999 license agreement and the DuBarry product line license agreement, there are no material existing relationships between USITC and Senetek.

7. Litigation Settlement

In March 2004, the Company announced that it had settled all litigation pending between Senetek and OMP, Inc. Under the terms of the settlement, in exchange for Senetek releasing all claims which were or could have been asserted against OMP, Senetek received $1.5 million in April 2004 and will receive up to an additional $500,000 based on future sales in Japan of skin care products containing Kinetin under the Obagi name. Under the terms of the settlement, OMP will have the ongoing non-exclusive right to market and sell specified Obagi-K products containing Kinetin in Japan limited to its existing channel of trade. The Company has recognized the $1.5 million as royalty income in the quarter ended March 31, 2004 and will recognize additional royalty income from OMP, up to $500,000, as product is sold by OMP. The $1.5 million is included in accounts receivable at March 31, 2004.

8. Subsequent Events

On April 6, 2004, the Company and the holders of its outstanding $4.9 million of senior secured notes and 6.3 million Series A and B Warrants, reached a binding preliminary agreement to amend the terms and conditions of the notes and warrants. Under this agreement, which is subject to the execution of final documentation on usual and customary terms, principal payments on the notes that were due in April 2004, 2005 and 2006 are being deferred until the notes’ final maturity in April 2007 and the interest rate will remain at 8.5% through maturity. In addition, the principal amount of the notes will become exchangeable, at the election of the holders of the notes, for Senetek ordinary shares at an initial exchange value of $0.80 per share, with the Series A and B warrants being extended to March 2011 and becoming exercisable at a reduced price of $0.50 per share as of the earlier of the maturity date of the notes or as the related notes are prepaid or exchanged for shares. Senetek has agreed to register with the Securities and Exchange Commission the 6.1 million shares issuable in exchange for the notes. Beginning in the second quarter of 2004, the Company expects to incur non-cash expense associated with the estimated fair value of the right granted to the note holders to exchange their notes for shares and the modifications to the Series A and B Warrants. The Series D Warrants to purchase five million shares remain unchanged by the agreement.

In May 2004, the Company entered into two agreements with Valeant Pharmaceuticals International. Under these agreements, Valeant has been granted the right to enter into an exclusive world wide license for Zeatin or another proprietary compound on substantially the same commercial terms as the Company’s license with Valeant for its Kinerase brand. Additionally, the license agreement for Valeant’s Kinerase brand was amended to extend its term, expand its reach to additional channels of trade, and provide for a royalty rate reduction of $250,000 per quarter beginning in 2005. Pursuant to the amended Kinerase license agreement, the Company received $5 million.

In May 2004, the Company announced an extension of its agreement with the research foundation under which Senetek is licensed to manufacture and sell monoclonal antibodies used to research various disease states, including Alzheimer’s disease. Under the agreement, the license for three cell lines has been extended from July 2004 through September 2005, Senetek is to submit to the foundation by December 31, 2004 its business plan for the continued manufacture, marketing and sale of monoclonal antibodies covered by the foundation’s licenses, and upon approval by the foundation all licenses will be extended until July 2011. Senetek will pay the foundation a one-time extension fee and guarantee the foundation royalty receipts for the twelve months ending June 30, 2005 consistent with those received in prior years.

Subsequent to March 31, 2004, the Company received cash of approximately $643,000 from the exercise of Series D Warrants and issued 1,609,545 ordinary shares of common stock.

Item 2:

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the preceding consolidated financial statements and notes thereto and with the Company’s audited financial statements, notes to the consolidated financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations relating thereto included or incorporated by reference in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003 (the “2003 Annual Report”).

This Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements herein which are not of historical fact may constitute such forward-looking statements. In particular, words such as “may”, “could”, “would”, “should”, “can,” “might”, “expect”, “estimate”, “project”, “anticipate” and the like identify the statement to which they refer as forward-looking. Forward-looking statements by their nature involve substantial uncertainty, and actual results may differ materially from those expressed in such statements. Important factors identified by the Company that it believes could result in such material differences are described in Item 1 of the Company’s 2003 Annual Report in the sections titled “Competition”, “Government Regulation” and “Intellectual Property” on pages 10 through 14, in Item 1 of the 2003 Annual Report, “Risk Factors”, on pages 15 through 18 and in Item 7 of the 2003 Annual Report, “Management’s Discussion and Analysis of Results of Operations and Financial Condition”, on pages 29 through 38. However, the Company can give no assurance that it has identified all of the important factors that may result in material differences between actual results and its forward-looking statements, and the Company assumes no obligation to correct or update any forward-looking statements which may prove to be inaccurate, whether as a result of new information, future events or otherwise, except as may be required in connection with future reports of the Company pursuant to the Securities Exchange Act of 1934, as amended.

RESULTS OF OPERATIONS

Significant Trends

We showed improvement in our revenues, gross profit percentage and current ratio during the first quarter of 2004. The improvement in these financial indicators primarily was the result of the $1.5 million OMP settlement less over $600,000 of related legal fees incurred in the quarter.


	3 months ended March 31,
	2004			2003
	($ in thousands)
Revenues	$	3,245		$	2,072
Gross Profit	$	3,012		$	1,746
Gross Profit percentage		92.8	%		84.3	%
Operating Income	$	836		$	342
Net Income (Loss)	$	632		$	(69	)

				December 31, 2003
Current ratio		1.14			.74
Reduction in cash and cash equivalents	$	(688	)		N/A

REVENUES

Our product sales and royalty and licensing revenues of $3,245,000 for the first quarter of 2004, an overall increase of 56.6% compared to the first quarter of 2003, consisted of $211,000 from product sales and $3,034,000 from royalties and licensing fees. $432,000 of our revenue for the first quarter of 2004 came from the sale and royalties of pharmaceutical products and $2,813,000 from the sale and royalties of skincare products.

Our product sales and royalty and licensing revenues of $2,072,000 for the first quarter of 2003 consisted of $902,000 from product sales and $1,170,000 from royalties and licensing fees. $277,000 of our revenue for the first quarter of 2003 came from the sale and royalties of pharmaceutical products and $1,795,000 from the sale and royalties of skincare products.

The 56.7% increase in sales of and royalties on skincare products was due to the $1.5 million settlement from the OMP litigation. Excluding the $1.5 million OMP settlement, product sales and royalty revenue from skincare products were $1,313,000, a 27% reduction from the level in the first quarter of 2003. The decrease in revenue resulted from a reduction in product sales to Valeant Pharmaceuticals International of $725,000 and reduction in royalties from Revlon of $200,000, partially offset by an increase in Valeant royalties of $155,000 and an increase in royalties from The Body Shop of $200,000. The amended license agreement signed with Valeant in August 2003 allows Valeant to manufacture its own products containing Kinetin in exchange for a higher royalty on Kinetin products manufactured by Valeant. Valeant began manufacturing its own products in early 2004; thus product sales were minimal in the quarter ended March 31, 2004. The increase in royalty revenue from Valeant is primarily related to an increase in unit volume and not the increase in royalty rate. The decrease in Revlon royalty income is primarily the result of lower unit sales and the mix of product sold by Revlon. The increase in royalties from The Body Shop is related to additional units sold resulting from continued expansion of the Kinetin product into more of its stores.

The 56% increase in sales of and royalties on pharmaceutical products was due to increased volume from new and existing customers for Senetek’s diagnostic antibodies, including the expansion of certain new polyclonal and monoclonal diagnostic antibodies. The sales of antibodies follow sales patterns determined by project driven research organizations and are subject to fluctuation.

COST OF GOODS SOLD

Cost of goods sold for the first quarter of 2004, which includes contract manufacturing and royalty fees, was $233,000, down 28.5% from $326,000 in the first quarter of 2003. Cost of goods sold as a percentage of sales declined from 15.7% in 2003 to 7.2% in 2004. The decrease was due to significantly lower product sales which have a higher cost of goods sold compared to royalty revenue. The cost of goods for products and royalty revenue as a percentage of their net revenue was relatively consistent between 2004 and 2003 after deducting the $1.5 million royalty income from the OMP settlement.

In the Pharmaceutical Segment, cost of goods sold for the first quarter of 2004 was $130,000, an increase of 58.5% from $82,000 in the first quarter of 2003. The increase was a result of costs associated with the increased sales of monoclonal antibodies.

In the Skincare Segment, cost of goods sold for the first quarter of 2004 was $103,000, a decrease of 57.8% from $244,000 in the first quarter of 2003. The decrease was the result of substantially lower product sales which have higher cost of goods compared to royalty revenue.

OPERATING EXPENSES

Research and Development

Research and Development expenditure for the first quarter of 2004 was $316,000, a decrease of 9.2% from $348,000 in the first quarter of 2003. The decrease was due to lower expenditures related to our sexual dysfunction product, Invicorp. We expect future research and development expenditures related to our sexual dysfunction product to continue to decline as we minimize our expenditures while seeking a business partner to assume the regulatory, manufacturing, marketing and sales expense of bringing Invicorp to market. Research and Development expenditures related to our Skincare Segment were consistent in 2004 and 2003 but are expected to increase as we accelerate the testing and development of Zeatin and other compounds. The Company has continued to work towards its strategic objective of commercializing its drug delivery devices, Reliaject and Adrenaject but does not expect to spend any significant funds on this during the remainder of 2004. The Company’s commercialization efforts for these drug delivery devices are presently focused upon identifying appropriate potential partners to assume the expense of bringing these products to market.

Administration, Sales and Marketing

Administration, Sales and Marketing expenses for the first quarter of 2004 totaled $1,860,000, an increase of 76.1% from $1,056,000 in the first quarter of 2003. The increase was due mainly to an increase in legal fees of approximately $675,000 primarily related to the OMP litigation, which was settled in late March 2004, and an increase in non-cash consultant stock option expense of $94,000. Although no additional consultant options were issued during the March 31, 2004 quarter, the increase in our share price from December 31, 2003 to March 31, 2004 resulted in additional expense for the quarter.

OPERATING INCOME

Operating income for the first quarter of 2004 totaled $836,000 compared to an operating income of $342,000 in the first quarter of 2003.

The operating loss in the Pharmaceuticals Segment for the first quarter of 2004 totaled $(443,000), representing a decreased loss of 12.8% from $(508,000) in the first quarter of 2003. The decreased loss is due to increased revenue from monoclonal antibodies and lower research and development costs, offset partly by higher administration, sales and marketing costs.

Operating profit in the Skincare Segment for the first quarter of 2004 totaled $1,279,000, an increase of 50.5% from an operating profit of $850,000 in the first quarter of 2003. This increase was due mainly to the increased revenues of approximately $1.2 million, primarily from the $1.5 million OMP settlement which resulted in a one-time revenue item of $1.5 million, partially offset by lower Valeant and Revlon revenues and higher legal fees associated with the OMP settlement.

OTHER INCOME AND EXPENSE

Interest expense for the first quarter of 2004 and 2003 totaled $242,000 and $365,000, of which $138,000 and $216,000 relates to the amortization of the notes payable discount. The lower interest expense for 2004 compared to 2003 is due to a $2.5 million principal payment in September 2003 and decreased discount amortization resulting from the extension of the maturity date of the notes from 2004 to 2007.

TAXATION

Gross deferred tax assets, which approximate $27.6 million at March 31, 2004 and relate to substantial cumulative net operating losses incurred, are 100% reserved as realization has not been considered more probable than not. There is minimal income tax expense in the quarter ended March 31, 2004 because of the availability of net operating loss carryforwards.

LIQUIDITY AND CAPITAL RESOURCES

Cash and cash equivalents decreased by $688,000 during the quarter ended March 31, 2004 to $499,000. This decrease was due to $1,921,000 increase in accounts receivable, caused primarily by the $1.5 million proceeds from the OMP settlement not being received until April 2004, offset partially by an increase in accounts payable and accrued expenses of $781,000, primarily resulting from unpaid OMP legal fees incurred in the quarter. Additionally, we have improved our current ratio from .74 at December 31, 2003 to 1.14 at March 31, 2004 primarily as a result of recording the March 26, 2004 $1.5 million OMP settlement during the quarter ended March 31, 2004. Additionally, the refinancing of our notes payable discussed below also improved our current ratio.

In May 2004, the Company entered into an agreement granting Valeant Pharmaceuticals International the right to an exclusive world wide license of Zeatin and an amendment of the license agreement with Valeant Pharmaceuticals International for its proprietary Kinerase product whereby Valeant’s license was expanded to include additional channels of trade, the term was extended and Valeant was granted a royalty rate reduction equivalent to $250,000 per quarter beginning in 2005, and the Company received $5 million. Subsequent to March 31, 2004 the Company also received approximately $643,000 from the exercise of 1,609,545 Series D Warrants. Subsequent to March 31, 2004, our cash position has significantly improved as a result of the receipt of funds from the OMP Settlement, the Valeant deal and exercise of Series D Warrants.

On April 6, 2004, the Company and the holders of its outstanding $4.9 million of senior secured notes and 6.3 million series A and B Warrants, reached a binding preliminary agreement to amend the terms and conditions of the notes and warrants. Under this agreement, which is subject to the execution of final documentation on usual and customary terms, principal payments on the notes due in April 2004, 2005 and 2006 are being deferred until the notes’ final maturity in April 2007 and the interest rate will remain at 8.5% through maturity. In addition, the principal amount of the notes will become exchangeable, at the election of the holders of the notes, for Senetek ordinary shares at an initial exchange value of $0.80 per share, with the warrants being extended to March 2011 and becoming exercisable at a reduced price of $0.50 per share as of the earlier of the maturity date of the notes or as the related notes are prepaid or exchange of the related notes for shares. Senetek has agreed to register with the Securities and Exchange Commission the 6.1 million shares issuable in exchange for the notes. Beginning in the second quarter of 2004, the Company expects to incur non-cash expense associated with the estimated fair value of the right granted to the note holders to exchange their notes for shares and the modifications to the Series A and B Warrants. The Series D Warrants to purchase five million shares remain unchanged by the agreement.

Substantially all of the Company’s borrowings are pursuant to the above-described senior secured notes, the holders of which have substantial control over the Company’s ability to incur additional secured debt or dispose of assets, substantially all of which are pledged as security for the Company’s borrowings. Thus in the event that the Company is unable to fund through its operating cash flow or proceeds from the sale of equity securities, continued product development and governmental marketing approvals of its pharmaceutical products or such unbudgeted expenses as the defense of its position in patent litigation, it would currently be dependent upon these noteholders for additional funding. If it were unable to arrange for funding upon acceptable terms, the Company’s business could be materially adversely affected.

Our other most significant expenditure commitments are our research agreements, consulting agreements, employment agreements and property leases, whose details are outlined in the 2003 Annual Report.

Based upon the transaction that have occurred subsequent to March 31, 2004, we will have adequate cash to fund our operating expenses and necessary capital expenditures for the remainder of 2004. However, we may also seek additional sources of cash through public or private equity financing, arrangements with existing and new business partners, short-term loans or proceeds from the exercise of options and warrants. The majority of our research and development expenditures are discretionary in nature and can be modified if our financial position so dictates.

ADOPTION OF NEW ACCOUNTING STANDARDS

On March 31, 2004, the Financial Accounting Standards Board (FASB) issued a proposed Statement, “Share-Based Payment” that addresses the accounting for share-based awards to employees, including employee-stock-purchase-plans (ESPPs). The FASB formally proposed to require companies to recognize the fair value of stock options and other stock-based compensation to employees. The proposed Statement would eliminate the ability to account for share-based compensation transactions using APB Opinion No. 25, “Accounting for Stock Issued to Employees”, and generally would require instead that such transactions be accounted for using a fair-value-based method. The proposed requirements in the exposure draft would be effective for public companies and nonpublic companies that did not use the minimum-value method as of the beginning of the first fiscal year beginning after December 15, 2004.

The Company currently accounts for its stock-based compensation plans in accordance with APB Opinion No. 25. Therefore, the eventual adoption of this proposed statement, if issued in final form by the FASB, could have a material effect on the Company’s consolidated financial statements.

Item 3:

Quantitative and Qualitative Disclosures About Market Risk

As our existing long term debt is all fixed rate, our primary market risks include currency exchange rate variability. The Company currently does not enter any foreign currency hedging transactions to protect against currency fluctuations against the U.S. dollar.

We believe that fluctuations in currency exchange rates in the near term would not materially affect our consolidated operating results, financial position or cash flows as we have limited risks related to interest rate and currency exchange rate fluctuations.

Item 4:

Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures.

Within the 90-day period prior to the date of this report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s

disclosure controls and procedures as defined in Exchange Act Rule 13a-14(c). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company’s periodic SEC filings.

(b) Changes in Internal Controls.

There have been no significant changes in the Company’s internal controls or in other factors which could significantly affect internal controls subsequent to the date the Company carried out its evaluation.

PART II OTHER INFORMATION

Item 1:

LEGAL PROCEEDINGS

On June 2, 2003, the Company commenced a lawsuit in the High Court of Justice, Chancery Division, in London, England against Eagle-Picher Technologies, LLC and Eagle-Picher Industries Inc., both Ohio corporations. The complaint alleges that the defendants failed to perform under an April 1998 agreement under which they agreed to manufacture and supply phentalomine mesylate meeting required pharmacopoeial specifications for use as an active ingredient in the Company’s proprietary Invicorp^® erectile dysfunction drug. The Company’s complaint seeks repayment of the $692,000 purchase price paid in advance, and of $294,000 paid for validation studies, as well as other amounts to be proven at trial for validation studies and regulatory filings required when the Company was forced to transfer manufacturing of phentalomine mesylate to an alternative supplier. The defendants have responded, denying certain of our allegations, we have replied, and the parties are exchanging documents and witness statements as a prerequisite to a trial to be scheduled for the second half of 2004.

As previously disclosed, in the course of responding to a document request in April 2003 as part of an unrelated Securities and Exchange Commission investigation focused on a firm not affiliated with the Company, the Company became aware of certain documents suggesting that during 2002 Company executives might have supplied non-public financial information to two securities analysts in an effort to correct draft research reports that contained information the executives considered overly-optimistic. The Board of Directors appointed an independent committee of non-management directors which engaged outside securities counsel to conduct a full internal investigation and in June 2003 voluntarily reported the results to the Commission’s office conducting the unrelated investigation. In late March, the Commission staff sent to the Company’s legal counsel a letter advising that the staff is considering recommending commencement of a proceeding alleging violations of Section 13(a) of the Securities Exchange Act of 1934 and Commission Regulation FD, and inviting the submission of a response. Senetek is engaged in discussions with the Commission staff regarding settlement of the matter. Senetek does not anticipate any amounts paid in connection with this matter will have a material impact on the future results of operations or financial condition of the Company.

Item 6.

EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits


10.1		Amended License Agreement dated February 1, 2004 by and between Senetek PLC and Panion & BF Biotech, Inc.

10.2		Deferred Compensation Plan for Company Executives

10.3		Deferred Compensation Plan for Directors

10.4*		Settlement agreement between OMP, Inc. and Senetek PLC

31.1		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

*	Confidential Treatment has been requested for portions of this agreement

(b) Reports on Form 8-K

A Current Report on Form 8-K dated February 24, 2004 was filed announcing the expansion of the Panion license agreement

A Current Report on Form 8-K dated February 24, 2004 was filed announcing the Company’s expected losses for 2003 and the fourth quarter thereof and the Company’s strategic business plan.

A Current Report on Form 8-K dated March 11, 2004 was filed to announce testing results for Zeatin

A Current Report on Form 8-K dated March 30, 2004 was filed to update information on an SEC Investigation and to disclose settlement of the OMP lawsuit

A Current Report on Form 8-K dated March 31, 2004 was filed to disclosed the Company’s 2003 Operating Results

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.


SENETEK PLC (Registrant)

By:		/S/ FRANK J. MASSINO
		Frank J. Massino
		*Chairman of the Board and* *Chief Executive Officer* *(Principal Executive Officer)*

Date: May 17, 2004


By:		/S/ BRADLEY D. HOLSWORTH
		Bradley D. Holsworth
		*Chief Financial Officer*

Date: May 17, 2004

EX-10.1 2 dex101.htm AMENDED LICENSE AGREEMENT Amended License Agreement

Exhibit 10.1

AMENDMENT NO. 1 TO LICENSE AND SUPPLY AGREEMENT

This Amendment (the “Amendment”) is entered into as of February 1, 2004 by and between Panion & BF Biotech Inc., with its principal place of business at 7f No. 325 Sec. 4 Chung Hsiao E. Rd. Taipei, Taiwan R.O.C. (“Panion”) and Senetek PLC, a company formed and existing under the laws of the United Kingdom, with its principal place of business at 620 Airpark Road, Napa, California 94558 (“Senetek”) with reference to the License and supply Agreement between Panion and Senetek entered into as of January 1, 2003 (the “Agreement”), and capitalized terms used herein and not otherwise defined are used with the meanings ascribed to them in the Agreement.

Recitals

Whereas, the parties desire to amend the Agreement so as to broaden Panion’s rights thereunder to include certain addition market channels and certain additional countries.

Now, therefore, in consideration of the mutual promises, covenants and conditions set forth in this Amendment, Panion and Senetek agree as follows:

1. Authorized Channel. The definition of “Authorized Channel” shall be amended by adding at the end thereof the following:

“, the prestige market channel of sales to department stores, cosmetics stores and specialty stores that sell to consumers at retail prices significantly higher than in the “mass market”, the aesthetician market channel of sales to skincare salons and resort, day and other beauty and health spas for use by aestheticians and resale to clients, and the direct television channel of sales to television media that resell to viewers and sales to viewers who purchase through the media of infomercials and home shopping channels.”

2. Territory. The definition of “Territory” shall be amended by deleting the second sentence thereof and substituting therefor the following:

“In addition, ‘Territory’ means the following countries of the world: The People’s Republic of China; The Philippines, Thailand, Malaysia, Singapore and each other present or future member country of ASEAN; and, except for the prestige market channel, the Republic of Korea, subject, in the case of each such country, to Senetek’s prior written approval of Panion’s proposed launch date and its marketing plans, including trade pricing, for each segment of the Authorized Channel in such country, which must be received by Senetek within ninety (90) days after notice from Senetek for Panion to propose a launch date and marketing plan therein. If agreement on a launch date and marketing plans is not so reached,

or if Panion fails to commercially launch agreed Products in such segment and country by the agreed launch date or ceases to maintain a commercial market for Products in such segment and country, the same shall be deleted from the definition of ‘Territory’.”

3. Purchase Orders; Forecasts. Section 4.a. of the Agreement is hereby amended by adding at the end thereof the following:

“Panion shall place Purchase Orders with Senetek at least quarterly, and commencing with the second calendar quarter of 2004 each such Purchase Order shall be placed at the beginning of each calendar quarter. Each such Purchase Order shall set forth Panion’s requirements for kinetin compound and for any Senetek Products for such calendar quarter. Each such Purchase Order shall be accompanied by a rolling forecast of Panion’s requirements for kinetin compound and Senetek Product for each of the three calendar quarters following the quarter for which the Purchase Order is placed, which shall not under-forecast the first forecasted quarter by more than 10%.”

4. Except as specifically set forth herein the Agreement shall not be deemed modified or affected hereby in any respect and the Agreement as so amended shall remain in full force upon all of its terms and conditions.

IN WITNESS WHEREOF, the parties hereto have read and executed this Amendment as of the day and year first above written.


SENETEK PLC		PANION & BF BIOTECH INC.

By:	/s/ WADE NICHOLS	By:	/s/ MICHAEL C.M. CHIANG
	Wade Nichols		Michael C. M. Chiang
	Executive Vice President		Executive President
			Panion & BF Biotech Inc.

EX-10.2 3 dex102.htm DEFERRED COMPENSATION PLAN FOR COMPANY EXECUTIVES Deferred Compensation Plan for Company Executives

Exhibit 10.2

SENETEK PLC

DEFERRED COMPENSATION PLAN FOR EXECUTIVES

Section 1. Purpose. The purpose of the Senetek PLC Deferred Compensation Plan (the “Plan”) is to provide the management employees (the “Executives”) of Senetek PLC (the “Company”) the opportunity to defer receipt of a portion of the cash compensation paid by the Company to such persons in their roles as Executives. The Plan is designed to aid the Company in attracting and retaining as members of its management persons whose abilities, experience and judgment can contribute to the well-being of the Company.

Section 2. Effective Date. The effective date of this Plan is January 1, 2004.

Section 3. Eligibility. Any Executive of the Company who is an employee of the Company or any subsidiary thereof is eligible to participate in the Plan.

Section 4. Deferred Compensation Account. An unfunded deferred compensation account (the “Account”) shall be established for each Executive who elects to participate in the Plan.

Section 5. Amount of Deferral. A participant may elect to defer receipt of ten percent (10%) of the salary payable to the participant for serving as a management employee of the Company. An amount equal to the compensation deferred, as reflected in the election referred to in Section 6 hereof, will be credited to the participant’s Account, in the form of phantom Company Ordinary Share units (the “Stock Component”), on the date such compensation would otherwise be initially payable.

Section 6. Time of Election of Deferral. The initial election to defer compensation under this Plan by persons who are Executives on the effective date hereof shall be made not later than February 28, 2004. Except as set forth herein, thereafter an election to defer compensation shall be made on an annual basis on or before December 15th of each year on forms approved for that purpose. Elections shall be effective when filed with the Secretary of the Company with respect to compensation that is paid in the calendar year following the calendar year in which the election is made (or following February 28, 2004, in the case of such initial elections). In the case of an Executive who was not an Executive on the effective date hereof and is hired or otherwise first becomes eligible to participate in the Plan subsequent to January 1 of any calendar year, such newly eligible participant shall be entitled to make an election to defer compensation for services to be performed subsequent to the election provided such election is made within 30 days after the date such Executive becomes eligible. In this case, such election shall be effective when made with respect to any compensation to be paid during the period beginning with the date following the date of the election through December 31 of the same initial year of participation.

Section 7. Hypothetical Investment. Each Account shall be comprised of the Stock Component and will be credited on each date compensation is to be paid to an Executive and the amount elected to be deferred will be credited as phantom units of the Company’s Ordinary Shares (including fractional shares) using the fair market value of American Depositary Shares representing the Company’s Ordinary Shares (“ADSs”) on the date the compensation would otherwise be paid. The Stock Component will be credited on the payment date for any dividend or other distribution on the Company’s Ordinary Shares with additional phantom Ordinary Share units determined by dividing the aggregate cash dividend or the aggregate fair market value of any other distribution which would have been paid if the existing phantom Ordinary Share units were actual Company Ordinary Shares by the fair market value of the Company’s Ordinary Shares as of the dividend payment date, computed to four decimal places. For purposes of the Plan, the “fair market value” of one Company Ordinary Share shall be the closing sale price for an ADS on the Nasdaq Stock Market (or such other exchange on which the ADSs may at the time be principally traded) as published in The Wall Street Journal for the determination date.

Section 8. Value of Deferred Compensation Accounts. The value of each participant’s Account at any time shall be equal to the product of multiplying the number of phantom Ordinary Share units credited thereto representing compensation deferred and dividends and other distributions credited thereon by the fair market value of one Ordinary Share determined pursuant to Section 7 of the Plan. All deferred amounts to be paid to a participant pursuant to the Plan are to be paid as soon as practicable following the payment date (as specified below).

Section 9. Payment of Deferred Compensation. No withdrawal may be made from the participant’s Account prior to the date specified by the participant in his or her election to defer compensation except as provided in Section 10. At the participant’s election, deferral of compensation may be made to a specific date, to immediately after the end of the calendar year in which the participant terminates service as an Executive, or to the earlier of either one of such dates. Any deferral must be for a period of at least one year following the year for which the compensation is earned, unless service as an Executive terminates earlier. Deferred compensation and dividends or other distributions (including appreciation or loss thereon) will be payable in whole Ordinary Shares of Senetek PLC plus cash in respect of any fractional Ordinary Share otherwise distributable having a value (determined as provided in Section 7) equal to the value of the Account (determined as provided in Section 8). Distribution shall be made in a single installment or in such number of quarterly or annual installments as the participant chooses, subject to the participant’s right to change such method of distribution no later than twelve months prior to the first date deferred compensation is to be paid. If a participant elects to receive payment from his or her Account in installments, the participant’s Account will continue to accrue dividends and other distributions (and appreciation or loss) during the installment period. Dividends and other distributions credited to a participant’s Account during the installment period will be paid on the next installment payment date. Any portion of a participant’s Account attributable to fractional Ordinary Shares of Senetek PLC shall be paid in cash at the same time (or times) as the participant is otherwise paid the amount his or her Account. Notwithstanding the foregoing, if on the date for

payment of any portion of a participant’s Account the Compensation Committee of the Board of Directors determines in its sole discretion that issuance or resale by participants of Company Ordinary Shares would be unlawful or not in the best interests of the Company, such payment shall be made in cash in an amount equal to the value of the Company Ordinary Shares otherwise issuable, determined as provided in Section 8.

Section 10. Hardship. In the event of a severe financial hardship or unforeseeable emergency, a participant may file a notice with the Secretary of the Company to be presented to the Compensation Committee of the Board of Directors, advising the Committee of the circumstances of the hardship or emergency, and requesting a withdrawal of previously deferred amounts, or, where a former Executive is receiving annual installment payments, requesting accelerated payment. The Committee, in its sole discretion, may agree to accelerate distribution of all or a part of amounts previously deferred. Should the Committee agree, such distribution shall occur on a date set by the Committee (the “Hardship Distribution Date”) that is at least six (6) months from the date the Committee approves the hardship withdrawal request. The Committee shall determine, in its sole discretion, how a current participant’s Stock Component shall be charged for the withdrawal. A hardship withdrawal by a participant shall have no effect on any amounts remaining in the participant Account, and shall not have any effect on any current or future deferral election after the hardship withdrawal.

For purposes of this paragraph, a severe financial hardship or unforeseeable emergency is one resulting from a casualty or other extraordinary and unforeseeable circumstances arising as a result of one or more recent events beyond the participant’s control. To the extent such hardship or emergency is or may be relieved (i) through reimbursement or compensation by insurance or otherwise, (ii) by liquidation of the participant’s assets, to the extent the liquidation of such assets would not itself cause a financial hardship, and (iii) by cessation of deferrals under the Plan, accelerated payment may not be made. Withdrawals of amounts because of such hardship or emergency may only be permitted to the extent reasonably necessary to satisfy the hardship or emergency. Examples of what are not considered to be such hardships or emergencies include the need to send a participant’s child to college, or the desire to purchase a home.

Section 11. Change in Control. A “Change in Control” shall mean: (a) a dissolution or liquidation of the Company, (b) a merger or consolidation in which the Company is not the surviving corporation (other than a merger or consolidation with a wholly-owned subsidiary, a reincorporation of the Company in a different jurisdiction, or other transaction in which there is no substantial change in the stockholders of the Company or their relative stock holdings), (c) a merger in which the Company is the surviving corporation but after which the stockholders of the Company immediately prior to such merger (other than any stockholder that merges, or which owns or controls another corporation that merges, with the Company in such merger) cease to own their shares or other equity interest in the Company, (d) the sale of substantially all of the assets of the Company, or (e) the acquisition, sale, or transfer of more than 50% of the outstanding shares of the Company by tender offer or similar transaction.

Notwithstanding any other provision of the Plan, if a Change in Control occurs, then the Company shall create a trust or take such other actions as are appropriate to protect each participant’s Account. In addition, at the discretion of the acquiring or successor entity in a Change in Control, payments of amounts hereunder made following such Change in Control may be made in cash or securities of such acquirer or successor (and not in Company Ordinary Shares); provided that the exercise of such discretion shall not reduce the value of a participant’s Account (determined as of the date a participant receives payment under the Plan) below its value immediately prior to the Change in Control.

Section 12. Designation of Beneficiary. A participant may designate a beneficiary or beneficiaries which shall be effective upon filing written notice with the Secretary of the Company on a form provided for that purpose. If no beneficiary is designated, the beneficiary will be the participant’s estate. If more than one beneficiary statement has been filed, the beneficiary or beneficiaries designated in the statement bearing the most recent date will be deemed the valid beneficiary or beneficiaries.

Section 13. Death of Participant or Beneficiary. In the event of a participant’s death before he or she has received the full value of his or her Account, the then current value of the participant’s Account shall be determined as of the day immediately following death and such amount shall be paid to the beneficiary or beneficiaries of the deceased participant as soon as practicable thereafter. If no designated beneficiary has been named or survives the participant, the beneficiary will be the participant’s estate.

Section 14. Participant’s Rights Unsecured. The Stock Component credited to each participant Account under the Plan represents merely a promise of the Company. No property will be transferred pursuant to the Plan except as provided in Section 9, and the Plan shall be unfunded for all purposes. The right of any participant or beneficiary to receive payment under the provisions of the Plan shall be an unsecured claim against the general assets of the Company, and no provisions contained in the Plan shall be construed to give any participant or beneficiary at any time a security interest in the Account or any other assets of the Company.

Section 15. Statement of Account. Statements will be sent to participants following the end of each year as to the value of their Accounts as of December 31 of such year.

Section 16. Assignability. No right to receive payments hereunder shall be transferable or assignable by a participant or a beneficiary, except by will or by the laws of descent and distribution.

Section 17. Administration of the Plan. The Plan shall be administered by the Compensation Committee of the Board of Directors of the Company. The Committee shall conclusively interpret the provisions of the Plan and shall make all determinations under the Plan. The Committee shall act by vote or written consent of a majority of its members.

Section 18. Amendment or Termination of Plan. This Plan may at any time or from time to time be amended, modified or terminated by the Board of Directors of the Company. No amendment, modification or termination shall, without the consent of a participant, adversely affect such participant’s accruals or his or her prior elections.

Section 19. Adjustments. In the event of any change in the outstanding Company Ordinary Shares by reason of any stock dividend or split, recapitalization, merger, consolidation, spin-off, reorganization, combination or exchange of shares or other similar corporate change, the Committee will make such adjustments, if any, as it in its sole discretion deems equitable in the number of Ordinary Shares with respect to which a participant’s phantom Ordinary Share units are referenced, such adjustments to be conclusive and binding upon all parties concerned.

Section 20. Governing Law. This Plan shall be governed by and construed in accordance with the laws of the State of California, without regard to the conflicts of law provisions thereof.

Senetek PLC

Deferred Compensation Plan for Executives

Deferral Election Form

Name of Participant:

Date of Deferral Election:

Amount of Deferral: ten percent (10%) of salary as from time to time in effect

Payment of Deferred Account (check one):

¨ (a) specified date at least one year after end of deferral year:

¨ (b) immediately following calendar year in which employment terminates

¨ (c) earlier of (a) or (b)

Form of Payment (check one):

¨ (a) single installment

¨(b) quarterly installments

¨ (c) annual installments

Beneficiary Name:

Beneficiary Address:

______________________

Participant Signature:

By your signature you accept and agree to be bound by all of the terms of the Senetek PLC Deferred Compensation Plan for Executives as amended from time to time.

EX-10.3 4 dex103.htm DEFERRED COMPENSATION PLAN FOR DIRECTORS Deferred Compensation Plan for Directors

Exhibit 10.3

SENETEK PLC

DEFERRED FEE PLAN FOR DIRECTORS

Section 1. Purpose. The purpose of the Senetek PLC Deferred Fee Plan (the “Plan”) is to provide non-management directors (the “Directors”) of Senetek PLC (the “Company”) the opportunity to defer receipt of cash compensation paid by the Company to such persons in their roles as Directors. The Plan is designed to aid the Company in attracting and retaining as members of its Board of Directors persons whose abilities, experience and judgment can contribute to the well-being of the Company.

Section 2. Effective Date. The effective date of this Plan is January 1, 2004.

Section 3. Eligibility. Any Director of the Company who is not deemed to be an employee of the Company or any subsidiary thereof is eligible to participate in the Plan.

Section 4. Deferred Compensation Account. An unfunded deferred compensation account (the “Account”) shall be established for each Director who elects to participate in the Plan.

Section 5. Amount of Deferral. A participant may elect to defer receipt of all (but not part) of the cash compensation payable to the participant for serving on the Board of Directors or any committee of the Board of Directors of the Company. An amount equal to the compensation deferred, as reflected in the election referred to in Section 6 hereof, will be credited to the participant’s Account, in the form of phantom Company Ordinary Share units (the “Stock Component”), on the date such compensation would otherwise be initially payable.

Section 6. Time of Election of Deferral. The initial election to defer compensation under the Plan by persons who are Directors on the effective date thereof shall be made not later than February 28, 2004. Except as set forth herein, thereafter an election to defer compensation shall be made on an annual basis on or before December 15th of each year on forms approved for that purpose and shall be effective when filed with the Secretary of the Company with respect to all compensation that is paid in the calendar year following the calendar year in which the election is made. Elections shall be effective when filed with the Secretary of the Company with respect to compensation that is paid in the calendar year following the calendar year in which the election is made (or following February 28, 2004 in the case of such initial elections). In the case of newly elected Directors who first become eligible to participate in the Plan subsequent to January 1 of any calendar year, such newly eligible participant shall be entitled to make an election to defer compensation for services to be performed subsequent to the election provided such election is made within 30 days after the date such Director becomes eligible. In this case, such election shall be effective when made with respect to any compensation to be paid during the period beginning with the date following the date of the election through December 31 of the same initial year of participation.

Section 7. Hypothetical Investment. Each Account shall be comprised of the Stock Component and will be credited on each date compensation is to be paid to Directors and the amount elected to be deferred will be used to credit to the Account phantom units of the Company’s Ordinary Shares (including fractional shares) based upon the fair market value of American Depositary Shares representing the Company’s Ordinary Shares (“ADSs”) on the date the compensation would otherwise be paid. The Stock Component will be credited on the payment date for any dividend or other distribution on the Company’s Ordinary Shares with additional phantom Ordinary Share units determined by dividing the aggregate cash dividend or the aggregate fair market value of any other distribution which would have been paid if the existing phantom Ordinary Share units were actual Company Ordinary Shares by the fair market value of the Company’s Ordinary Shares as of the dividend or other distribution payment date, computed to four decimal places. For purposes of the Plan, the “fair market value” of one Company Ordinary Share shall be the closing sale price for an ADS on the Nasdaq Stock Market (or such other exchange on which the ADSs may at the time be principally traded) as published in The Wall Street Journal for the determination date.

Section 8. Value of Deferred Compensation Accounts. The value of each participant’s Account at any time shall be equal to the product of multiplying the number of phantom Ordinary Share units representing compensation deferred and dividends and other distributions credited thereon by the fair market value of one Ordinary Share determined pursuant to Section 7 of the Plan. All deferred amounts to be paid to a participant pursuant to the Plan are to be paid as soon as practicable following the payment date (as specified below).

Section 9. Payment of Deferred Compensation. No withdrawal may be made from the participant’s Account prior to the date specified by the participant in his or her election to defer compensation except as provided in Section 10. At the participant’s election, deferral of compensation may be made to a specific date, to immediately after the end of the calendar year in which the participant terminates service as a Director, or to the earlier of either one of such dates. Any deferral must be for a period of at least one year following the year for which the compensation is earned, unless service as a Director terminates earlier. Deferred compensation and dividends or other distributions (including appreciation or loss thereon) will be payable in whole Ordinary Shares of Senetek PLC plus cash in respect of any fractional Ordinary Share otherwise distributable having a value (determined as provided in Section 7) equal to the value of the Account or portion thereof to be distributed (determined as provided in Section 8). Distribution shall be in a single installment or in such number of quarterly or annual installments as the participant chooses, subject to the participant’s right to change such method of distribution no later than twelve months prior to the first date deferred compensation is to be paid. If a participant elects to receive payment from his or her Account in installments, the participant’s Account will continue to accrue dividends and other distributions (and appreciation or loss) during the installment period. Dividends and other distributions credited to a participant’s Account during the installment period will be paid on the next installment payment date. Any portion of a participant’s Account attributable to fractional Ordinary Shares of Senetek PLC shall be paid in cash at the same time (or times) as the participant is otherwise paid the amount his or her Account.

Notwithstanding the foregoing, if on the date for payment of any portion of a participant’s Account the Compensation Committee of the Board of Directors determines in its sole discretion that issuance or participant resale of Company Ordinary Shares would be unlawful or not in the best interests of the Company, such payment shall be made in cash in an amount equal to the value of the Company Ordinary Shares otherwise issuable, determined as provided in Section 8.

Section 10. Hardship. In the event of a severe financial hardship or unforeseeable emergency, a participant may file a notice with the Secretary of the Company to be presented to the Compensation Committee of the Board of Directors, advising the Committee of the circumstances of the hardship or emergency, and requesting a withdrawal of previously deferred amounts, or, where a former Director is receiving annual installment payments, requesting accelerated payment. The Committee, in its sole discretion, may agree to accelerate distribution of all or a part of amounts previously deferred. Should the Committee agree, such distribution shall occur on a date set by the Committee (the “Hardship Distribution Date”) that is at least six (6) months from the date the Committee approves the hardship withdrawal request. The Committee shall determine, in its sole discretion, how a current participant’s Stock Component shall be charged for the withdrawal. No member of the Committee may vote on, or otherwise influence a decision of the Committee concerning, his or her request for a hardship withdrawal. A hardship withdrawal by a participant shall have no effect on any amounts remaining in the participant Account, and shall not have any effect on any current or future deferral election after the hardship withdrawal.

For purposes of this paragraph, a severe financial hardship or unforeseen emergency is one resulting from a casualty or other extraordinary and unforeseeable circumstances arising as a result of one or more recent events beyond the participant’s control. To the extent such hardship or emergency is or may be relieved (i) through reimbursement or compensation by insurance or otherwise, (ii) by liquidation of the participant’s assets, to the extent the liquidation of such assets would not itself cause a financial hardship, and (iii) by cessation of deferrals under the Plan, accelerated payment may not be made. Withdrawals of amounts because of such a hardship or emergency may only be permitted to the extent reasonably necessary to satisfy the hardship or emergency. Examples of what are not considered to be such hardships or emergencies include the need to send a participant’s child to college, or the desire to purchase a home.

Section 12. Designation of Beneficiary. A participant may designate a beneficiary or beneficiaries which shall be effective upon filing written notice with the Secretary of the Company on the form provided for that purpose. If no beneficiary is designated, the beneficiary will be the participant’s estate. If more than one beneficiary statement has been filed, the beneficiary or beneficiaries designated in the statement bearing the most recent date will be deemed the valid beneficiary or beneficiaries.

Section 15. Statement of Account. Statements will be sent to participants following the end of each year as to the value of their Accounts as of December 31 of such year.

Section 16. Assignability. No right to receive payments hereunder shall be transferable or assignable by a participant or a beneficiary, except by will or by the laws of descent and distribution.

Section 19. Adjustments. In the event of any change in the outstanding shares of Common Stock by reason of any stock dividend or split, recapitalization, merger, consolidation, spin-off, reorganization, combination or exchange of shares or other similar corporate change, the Committee will make such adjustments, if any, as it in its sole discretion deems equitable in the number of shares of Common Stock with respect to which a participant’s phantom Common Stock Units are referenced, such adjustments to be conclusive and binding upon all parties concerned.

Section 20. Governing Law. This Plan shall be governed by and construed in accordance with the laws of the State of California, without regard to the conflicts of law provisions thereof.

Senetek PLC

Deferred Fee Plan for Directors

Deferral Election Form

Name of Participant:

Date of Deferral Election:

Amount of Deferral: all cash director fees

Payment of Deferred Account (check one):

¨ (a) specified date at least one year after end of deferral year:

¨ (b) immediately following calendar year in which Directorship terminates

¨ (c) earlier of (a) or (b)

Form of Payment (check one):

¨ (a) single installment

¨ (b) quarterly installments

¨ (c) annual installments

Beneficiary Name:

Beneficiary Address:

_________________

Participant Signature:

By your signature you accept and agree to be bound by all of the terms of the Senetek PLC Deferred Fee Plan for Directors as amended from time to time in accordance with the Plan.

EX-10.4 5 dex104.htm SETTLEMENT AGREEMENT BETWEEN OMP, INC. AND SENETEK PLC Settlement Agreement between OMP, Inc. and Senetek PLC

Exhibit 10.4

LATHAM & WATKINS LLP

Steven M. Bauer (SBN 135067)

James L. Day (SBN 197158)

505 Montgomery Street, Suite 1900

San Francisco, California 94111

Telephone: (415) 391-0600

Facsimile: (415) 395-8095

David A. York (SBN 89941)

135 Commonwealth Drive

Menlo Park, California 94025

Telephone: (650) 328-4600

Facsimile: (650) 463-2600

Belinda S. Lee (SBN 199635)

633 West Fifth Street, Suite 4000

Los Angeles, California 90071-2007

Telephone: (213) 485-1234

Facsimile: (213) 891-8763

Kyra G. Busby (SBN 216035)

600 West Broadway, Suite 1800

San Diego, CA 92101-3375

Telephone: (619) 236-1234

Facsimile: (619) 696-7419

Attorneys for Plaintiff

SENETEK PLC

IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES


SENETEK PLC, Plaintiff, v. OMP, INC. (f/k/a Obagi Medical Products, Inc.), and DOES 1 through 10, inclusive, Defendants.		CASE NO. BC293829 Assigned To: Hon. J. Stephen Czuleger (Dept. 50) CONFIDENTIAL SETTLEMENT AGREEMENT AND MUTUAL RELEASE BETWEEN SENETEK PLC AND OMP, INC.

AND RELATED CROSS-ACTION.

Senetek PLC (“Senetek”) and OMP, Inc. (“OMP”), in full and final settlement of (a) all claims which have been, or could have been, asserted against each other in the lawsuit captioned Senetek, PLC vs. OMP, Inc. and Does 1-10, Case No. BC293829, now pending in the Superior Court for the State of California, the County of Los Angeles (the “Pending State Action”), (b) all claims which were, or could have been, asserted against each other in the litigation captioned OMP, Inc. v. Senetek PLC, C 03-4822 VRW (U.S.D.C. for the Northern District of California) (the “OMP Federal Action”), and (c) all claims which have been, or could have been, asserted by Senetek against Rohto Pharmaceutical Co., Ltd. (“Rohto”) in the case captioned Senetek PLC v. Rohto Pharmaceutical Co., Ltd. C 03-5529 PJH (U.S.D.C. for the Northern District of California) (the “Rohto Action”), hereby enter into the following Settlement Agreement and Mutual Release (“Agreement”).

1. Within five business days of the execution of this Agreement by Senetek, OMP shall wire transfer the amount of U.S. $1,500,000.00 to the following account of Senetek PLC:

WestAmerica Bank

Account Number 0508-759073

ABA Number 121140218

2. For all purposes of this Agreement the following are defined terms:

a. Territory means the country of Japan;

b. Authorized Channel of Trade means the sales and distribution channels in which Rohto is currently distributing that certain product known as Obagi K+, specifically Drug Stores and Variety Stores, including such Drug Stores’ and Variety Stores’ mail-order and Internet sales activities. To be considered in the Territory, mail-order and Internet sales must be made to “ship to” and billing addresses in the Territory.

c. Drug Stores are defined as stores specifically licensed to sell over-the counter drugs as more than 50% of their revenue.

d. Variety Stores are defined as stores that are not licensed to sell prescription medicines or over-the-counter drugs but are otherwise similar to Drug Stores in terms of the type of products they carry and consumer demographics that they target for appeal. Variety Stores sell many kinds of goods including cosmetics, accessories and other small household or personal items. Examples of Variety Stores include Loft and Sony Plaza. Variety Stores do not

include or encompass upscale “department” stores such as those operated by Matsuzakaya Co., The Daimaru, Inc., Isetan Co. or Hankyu Department Stores Inc.

e. Product Unit is defined as a single unit of any skin care product that contains kinetin in a concentration of *** or below as measured by weight, including cosmetic lotions or creams, that (i) is sold by or for Rohto or OMP in the Territory in the Authorized Channel of Trade, (ii) uses in any manner the name Obagi or any transliteration thereof or any name confusingly similar thereto, and (iii) is manufactured by OMP or Rohto in Japan, or by or for OMP anywhere in the world.

3. Beginning with the calendar quarter commencing April 1, 2004, OMP will make payments in U.S. dollars to the bank account described in paragraph 1, calculated and paid in the following manner:

a. For each calendar quarter, OMP shall accrue a $*** per Product Unit (as defined above) obligation to Senetek for each Product Unit sold.

b. Within sixty days of the end of each calendar quarter, OMP shall pay the total accrued obligation for the calendar quarter just ended.

c. When a total of U.S. $500,000.00 has been paid by OMP to Senetek pursuant to this paragraph 3, OMP’s obligation to accrue and make payments to Senetek shall cease.

4. So long as OMP shall remain obligated to make the payments required in paragraph 3 of this Agreement, OMP shall maintain accurate books and records sufficient to show what OMP in good faith believes to be the sales of Product Units in the Authorized Channel of Distribution in the Territory that are subject to the obligations of OMP set forth above in paragraph 3. The parties agree that OMP’s maintenance of royalty reports from Rohto identifying such sales, on a basis consistent with OMP’s records of sales by Rohto under that certain Know-How and Trademark License Agreement between OMP and Rohto dated September 13, 2002, shall be sufficient for this purpose. Senetek, upon reasonable notice and terms, shall have the right to audit these records of OMP to ascertain compliance with paragraph 3 of this Agreement. In this respect, OMP agrees to make the results of any audit of Rohto conducted pursuant to Section 8.3 of that certain Know-How and Trademark License Agreement between OMP and Rohto dated September 13, 2002 available to Senetek insofar as those results relate to the sales of Product Units.

5. In consideration of OMP’s payment obligations set forth in paragraphs 1 and 3 of this Agreement, Senetek hereby grants to OMP a non-exclusive license (with the right to sublicense) to Senetek’s patent and other intellectual property rights to make, have made, import into, offer to sell and sell Product Units in the Authorized Channel of Trade in the Territory. The term of said license shall be coextensive with the last to

***	Confidential treatment has been requested

expire of Senetek’s patent rights anywhere in the world (said patent rights to include all existing patents owned by or assigned to Senetek and any continuations, reissues, or counterparts of those patents). Senetek covenants that it will not assert that OMP, Rohto, their manufacturers, licensees, or customers infringe any patent or other right of Senetek with respect to OMP’s and Rohto’s manufacture, marketing, or sale of Product Units, including those Product Units sold after OMP’s obligation of accruing and making payments pursuant to paragraph 3 has been satisfied.

6. Senetek and OMP understand that this Agreement does not license or authorize OMP or Rohto to manufacture, market or sell kinetin containing skin care products anywhere in the world except with respect to Product Units to be sold in the Authorized Channel of Distribution in the Territory.

7. Effective as of the full execution of this Agreement, Senetek and OMP, on behalf of themselves and their predecessors, successors and permitted assigns, and all past and present officers, directors, employees, agents, servants, attorneys and other representatives of any of the foregoing (including persons or entities controlling, controlled by or under common control with Senetek or OMP), fully, finally, unconditionally, irrevocably and forever release and discharge each other, and each other’s past and present officers, directors, employees, agents, servants, attorneys, insurers, and other representatives, and all heirs, executors, administrators, predecessors, successors, and permitted assigns of any of the foregoing, from any and all claims, liabilities, causes of action, rights of action and actions, demands, suits, proceedings, damages, costs, fees and expenses, and any and all claims, demands and liabilities whatsoever, of every name and nature, both at law and in equity, whether known or unknown, suspected or unsuspected (collectively, “Claims”), which Senetek or OMP has asserted or could have asserted against each other in the Pending State Action and the OMP Federal Action. Notwithstanding anything to the contrary in the preceding sentence, nothing in this Release shall release Senetek or OMP from any Claim which one party may subsequently have against the other for: (i) breach of this Settlement Agreement; or (ii) any Claim which either party may have for any wrong or breach arising out of any conduct which occurs after the date of this Release. This release represents a compromise and settlement in full of all claims except those excepted above, whether or not now known, suspected or claimed, which any Party ever had, now has, or claims to have against another Party, notwithstanding section 1542 of the California Civil Code, which section provides as follows:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”

8. Effective as of the full execution of this Agreement, Senetek, on behalf of itself and its predecessors, successors and permitted assigns, and all past and present officers, directors, employees, agents, servants, attorneys and other representatives of any

of the foregoing (including persons or entities controlling, controlled by or under common control with Senetek), fully, finally, unconditionally, irrevocably and forever releases and discharges Rohto, and its past and present officers, directors, employees, agents, servants, attorneys, insurers, and other representatives, and all heirs, executors, administrators, predecessors, successors, and permitted assigns of any of the foregoing, from any and all claims, liabilities, causes of action, rights of action and actions, demands, suits, proceedings, damages, costs, fees and expenses, and any and all claims, demands and liabilities whatsoever, of every name and nature, both at law and in equity, whether known or unknown, suspected or unsuspected (collectively, “Claims”), which Senetek has asserted or could have asserted in the Rohto Action. Notwithstanding anything to the contrary in the preceding sentence, nothing in this Release shall release Rohto from any Claim which Senetek may subsequently have against Rohto for any Claim which Senetek may have for any wrong or breach arising out of any conduct which occurs after the date of this Release. This release represents a compromise and settlement in full of all claims except those excepted above, whether or not now known, suspected or claimed, which any Party ever had, now has, or claims to have against another Party, notwithstanding section 1542 of the California Civil Code, which section provides as follows:

9. Within five business days of the full execution of this Agreement:

a. Senetek and OMP will dismiss their claims, with prejudice, in the Pending State Action, each side to bear their own costs and fees; and

b. Senetek will dismiss its claims, with prejudice, in the Rohto Action.

10. The parties shall keep the terms of this Agreement confidential, except that OMP may disclose the terms to Rohto (upon receiving assurances of confidentiality from Rohto), and except as required by law (including and disclosure obligations Senetek may have under U.S. securities laws). Any public disclosure of the terms of this Agreement shall be approved by both parties, such approval not to be unreasonably withheld. The final decision with respect to a decision to disclose one or more terms of this Agreement pursuant to U.S. securities laws shall be made by the party bearing the legal obligation of disclosure.

11. In the dismissal of the Pending State Action, Senetek and OMP shall request that the Court retain jurisdiction over the parties to enforce the Agreement pursuant to Cal. Civil Proc. Code § 664.6.

Dated: March 26, 2004


By:		/s/ WADE NICHOLS
		SENETEK, PLC, by its General Counsel and Executive Vice President, Wade Nichols

Dated: March 26 2004


By:		/s/ CURTIS CLUFF
		OMP, INC., by its Chief Financial Officer, Curtis Cluff

Approved as to Form:

Dated: March 26, 2004


LATHAM & WATKINS LLP

By		/s/ DAVID YORK
		David A. York
		Attorneys for Plaintiff SENETEK PLC

Dated: March 26, 2004


DORSEY & WHITNEY LLP

By:		/s/ JUAN BASOMBRIO
		Juan C. Basombrio
		Attorneys for Defendant OMP, Inc.

EX-31.1 6 dex311.htm SECTION 302 CEO CERTIFICATION Section 302 CEO Certification

Exhibit 31.1

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Frank J. Massino, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Senetek PLC;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/S/ FRANK J. MASSINO

Frank J. Massino

Chief Executive Officer

Date: May 17, 2004

EX-31.2 7 dex312.htm SECTION 302 CFO CERTIFICATION Section 302 CFO Certification

Exhibit 31.2

Certification of Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Bradley D. Holsworth, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Senetek PLC;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the registrant and have:

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting

/S/ BRADLEY D. HOLSWORTH

Bradley D. Holsworth

Chief Financial Officer

Date: May 17, 2004

EX-32.1 8 dex321.htm SECTION 906 CEO CERTIFICATION Section 906 CEO Certification

EXHIBIT 32.1

Certification of Chief Executive Officer

Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Senetek PLC (the “Company”) hereby certifies, to the best of such officer’s knowledge, that:

(i)

the Quarterly Report on Form 10-Q of the Company for the quarterly period ended March 31, 2004 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(ii)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Dated: May 17, 2004		/S/ FRANK J. MASSINO
		Frank J. Massino
		Chief Executive Officer

EX-32.2 9 dex322.htm SECTION 906 CFO CERTIFICATION Section 906 CFO Certification

Exhibit 32.2

Certification of Chief Financial Officer

(i)

(ii)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Dated: May 17, 2004		/S/ BRADLEY D. HOLSWORTH
		Bradley D. Holsworth
		Chief Financial Officer

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