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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2004

OR

FOR THE TRANSITION PERIOD FROM              TO             

Commission file number 0-14691

SENETEK PLC

(Exact name of registrant as specified in its charter)

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.

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SENETEK PLC AND SUBSIDIARIES

INDEX TO FORM 10-Q

QUARTER ENDED MARCH 31, 2004

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PART I FINANCIAL INFORMATION

Item 1

Financial Statements

SENETEK PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(Unaudited)

See accompanying notes to unaudited consolidated financial statements.

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SENETEK PLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

SENETEK PLC

CONSOLIDATED BALANCE SHEETS

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

See accompanying notes to unaudited consolidated financial statements.

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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)

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.

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SENETEK PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

See accompanying notes to unaudited consolidated financial statements.

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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:

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:

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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.

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

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.

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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.

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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.

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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.

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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

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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

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.

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

(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

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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.

Date: May 17, 2004

Date: May 17, 2004

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