SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. __)
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|X| Preliminary Proxy Statement
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
BIOSPECIFICS TECHNOLOGIES CORP.
(Name of Registrant as specified in its charter)
(Name of Person(s) Filing Proxy Statement), if other than Registrant
Payment of Filing Fee (Check the appropriate box):
|X| No fee required
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which
transaction applies:
(2) Aggregate number of securities to which transaction
applies:
(3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule
0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
|_| Fee paid previously with preliminary materials.
|_| Check box if any of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
BIOSPECIFICS TECHNOLOGIES CORP.
35 WILBUR STREET
LYNBROOK, NEW YORK 11563
November 17, 2004
TO THE STOCKHOLDERS:
You are cordially invited to attend the 2004 Annual Meeting of
Stockholders of BioSpecifics Technologies Corp., which will be held at the Mill
River Manor, 173 Sunrise Highway, Rockville Centre, New York 11570 on December
7, 2004 at 11:00 a.m. local time.
The Notice of the 2004 Annual Meeting and Proxy Statement, which are
attached, provide information concerning the matters to be considered at the
meeting. In addition, the general operations of the Company will be discussed
and stockholders will be afforded the opportunity to ask questions.
We would appreciate your signing and returning your proxy in the
enclosed envelope as soon as possible, whether or not you plan to attend the
meeting. Please sign, date and return the enclosed proxy in the self-addressed,
postage prepaid envelope. If you do not return the signed proxy, your vote
cannot be counted. We value your opinion and encourage you to participate in
this year's annual meeting by voting your proxy.
YOUR VOTE IS IMPORTANT. ACCORDINGLY, YOU ARE URGED TO MARK, SIGN AND
RETURN THE ACCOMPANYING PROXY CARD WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING.
Very truly yours,
Edwin H. Wegman
Chairman of the Board
BIOSPECIFICS TECHNOLOGIES CORP.
35 WILBUR STREET
LYNBROOK, NEW YORK 11563
--------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD December 7, 2004
--------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
BioSpecifics Technologies Corp. (the "Company") will be held at the Mill River
Manor, 173 Sunrise Highway, Rockville Centre, New York 11570 on December 7, 2004
at 11 a.m. local time. At the meeting, we will ask you to vote in favor of the
following proposals:
No. 1. To elect two directors of the Company to hold office for
the term as described in the enclosed proxy statement;
No. 2. To ratify the selection of BDO Seidman LLP as independent
auditors of the Company for its fiscal period ending December 31,
2004.
We may also transact any other business that is properly presented at
the meeting, or any or all adjournments or postponements thereof.
Your board of directors recommends that you vote in favor of the
three proposals as more fully outlined in this proxy statement. Only
stockholders of record at the close of business on November 3, 2004 will be
entitled to notice of, and to vote at, the meeting and any adjournments or
postponements thereof.
YOU ARE URGED TO READ THE ATTACHED PROXY STATEMENT, WHICH CONTAINS
INFORMATION RELEVANT TO THE ACTION TO BE TAKEN AT THE MEETING. YOU ARE CORDIALLY
INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR NOT YOU EXPECT TO ATTEND THE
MEETING IN PERSON, PLEASE MARK, SIGN AND DATE THE ACCOMPANYING PROXY CARD AND
MAIL IT PROMPTLY IN THE ENCLOSED ADDRESSED, POSTAGE PREPAID ENVELOPE (FOR USE IN
THE UNITED STATES).
By Order of the Board of Directors,
Thomas L. Wegman
Secretary
Lynbrook, New York
November 17, 2004
BIOSPECIFICS TECHNOLOGIES CORP.
35 WILBUR STREET
LYNBROOK, NEW YORK 11563
------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD DECEMBER 7, 2004
This Proxy Statement and the enclosed form of proxy are furnished in
connection with solicitation of proxies by the Board of Directors of
BioSpecifics Technologies Corp. (the "Company") to be used at the Annual Meeting
of Stockholders of the Company to be held at the Mill river Manor, 173 Sunrise
Highway, Rockville Centre, New York 11570 on December 7, 2004 at 11 a.m. and any
adjournments or postponements thereof ("Annual Meeting"). The matters to be
considered at the meeting are set forth in the attached Notice of Meeting.
The Company intends to send the proxy materials and the Annual Report
for the fiscal year ended December 31, 2004 ("calendar 2004") to Stockholders on
or about November 27, 2004.
INFORMATION CONCERNING SOLICITATION AND VOTING
OUTSTANDING SHARES ENTITLED TO VOTE
On November 2, 2004, there were outstanding 5,326,341 shares of
common stock, $.001 par value per share, of the Company ("Common Stock"). Record
holders of shares of Common Stock on November 3, 2004, the record date, will be
entitled to one vote for each share of such stock.
SOLICITATION OF PROXIES
THE SOLICITATION OF PROXIES IN THE ENCLOSED FORM IS MADE ON BEHALF OF
THE COMPANY AND THE COMPANY IS PAYING THE COST OF THIS SOLICITATION. In addition
to the use of the mails, proxies may be solicited personally or by direct
communication using the services of directors, officers and regular employees of
the Company at nominal cost. Banks, brokerage firms and other custodians,
nominees and fiduciaries will be reimbursed by the Company for expenses incurred
in sending proxy material to beneficial owners of the Common Stock.
RECORD DATE; REVOCABILITY OF PROXIES
The Board of Directors has fixed the close of business on November 3,
2004 as the record date for the determination of stockholders entitled to notice
of and to vote at the meeting.
The proxy will be voted (or withheld from voting) in accordance with
any specifications made. Unless otherwise specified in the proxy, shares
represented by proxy will be voted "FOR" election of the nominees listed herein.
A proxy may be revoked by giving notice to the Secretary of the Company in
person, or by written notification actually received by the Secretary, at any
time prior to its being exercised, by delivery of a later dated proxy prior to
the Annual Meeting or by attending the meeting and voting in person. There are
no matters to be voted on which concern valuations; therefore, there are no
statutory dissenters rights of appraisal.
QUORUM; VOTING
The presence at the Annual Meeting, in person or by proxy, of the
holders of a majority of the outstanding shares of the Common Stock authorized
to vote constitutes a quorum for the transaction of business at the Annual
Meeting. If a quorum should not be present, the Annual Meeting may be adjourned
from time to time until a quorum is obtained.
Each unrevoked proxy card properly signed and received prior to the
close of the meeting will be voted as indicated. Unless otherwise specified on
the proxy, the shares represented by a signed proxy card will be voted "FOR" the
Board's nominees for directors as listed on the proxy card and will be voted at
the discretion of the persons named as proxies on other business that may
properly come before the meeting. The proxies are authorized to vote upon such
matters incident to the conduct of the meeting or any adjournment thereof. The
Board of Directors is not aware of any other matters to be presented for action
at the Annual Meeting. Concerning the election of directors, by checking the
appropriate box on your proxy card, you may: (a) vote "FOR" each of the director
nominees; or (b) withhold authority to vote for any or all of the director
nominees. Stockholders may vote by either completing and returning a signed
proxy card prior to the meeting, voting in person at the meeting or submitting a
signed proxy card at the meeting.
If a proxy card indicates an abstention or a broker non-vote on a
particular matter, the shares represented by such proxy will be counted as
present for quorum purposes.
The election of directors requires a plurality vote of those shares
voted at the meeting with respect to the election of directors. "Plurality"
means that the individuals who receive the largest number of votes cast "FOR"
are elected as directors. Consequently, any shares not voted "FOR" a particular
nominee (whether as a result of a direction to withhold authority or a broker
non-vote) will not be counted in such nominee's favor. All other matters to be
voted on will be decided by the affirmative vote of a majority of the shares
present or represented at the meeting and entitled to vote. On any such matter,
an abstention will have the same effect as a negative vote, but because shares
held by brokers will not be considered entitled to vote on matters as to which
the brokers withhold authority, a broker non-vote will have no effect on the
vote.
OWNERSHIP OF EQUITY SECURITIES
To the Company's knowledge, the table that follows sets forth the
beneficial ownership of shares of Common Stock as of November 2, 2004 of (i)
those persons or groups known to the Company to beneficially own 5% or more of
the Common Stock, (ii) each director and nominee of the Company, (iii) each
executive officer whose compensation exceeded $100,000 (each, a "named executive
officer") in calendar 2003 (which ended December 31, 2003), and (iv) all
directors and executive officers of the Company as a group. The information is
determined in accordance with Rule 13d-3 promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), based on information
furnished by the persons listed or contained in filings made by them with the
Securities and Exchange Commission. Unless indicated below, the stockholders
listed possess sole voting and investment power with respect to their shares and
the business address of each stockholder is c/o BioSpecifics Technologies Corp.,
35 Wilbur St., Lynbrook, New York 11563.
NUMBER OF SHARES
OF COMMON STOCK PERCENT OF
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED CLASS
----------------------------------- ----------------------- -------------
Edwin H. Wegman (1) 2,262,942 39.8%
Thomas L. Wegman (2) 240,544 4.2%
Paul A. Gitman, MD. (3) 70,925 1.2%
Henry Morgan (4) 52,528 *
Michael Schamroth (5) 110,000 1.9%
Bio Partners (5) 295,312 5.2%
Directors and executive officers 2,736,939 48.1%
as a group (5 persons)
----------------
(*) Less than 1%.
(1) Includes 1,843,327 shares of Common Stock owned by The S.J. Wegman Company,
a partnership of which Edwin H. Wegman is the sole general partner.
Includes 120,000 shatres beneficially owned by The Isabel H. Wegman Rev.
Trust. The sole trustee of this trust is Mr. Wegman's brother. Includes
options to purchase 94,500 shares of Common Stock that are currently
exercisable. Does not include options to purchase 44,500 shares of Common
Stock that are not currently exercisable. Edwin H. Wegman is the father of
Thomas L. Wegman.
(2) Includes 7,300 shares of Common Stock held by Thomas L. Wegman's wife and
child. Includes options to purchase 205,800 shares of Common Stock that are
currently exercisable. Thomas L. Wegman is a son of Edwin H. Wegman.
(3) Includes 16,500 shares of Common Stock held by Dr. Gitman's wife and
children. Includes options to purchase 25,425 shares of Common Stock that
are currently exercisable. Dr. Gitman's business address is c/o Long Island
Jewish Medical Center, 270-05 76th Ave., New Hyde Park, New York 11040.
(4) Includes options to purchase 25,425 shares of Common Stock that are
currently exercisable.
(5) Includes options to purchase 10,000 shares of Common Stock which are
currently exercisable.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Board of Directors is divided into three classes, each of which
is for a term of three years, with only one class of directors being elected in
each year. The term of office of the first class of directors, presently
consisting of Thomas L. Wegman and Dr. Paul A. Gitman will expire at the Annual
Meeting in 2006, the term of office of the second class of directors, presently
consisting of Henry Morgan and Michael Schamroth will expire on the date of the
Annual Meeting in 2004, and the third class of directors, consisting of Edwin H.
Wegman in 2005. In each case, barring death, resignation or removal, each
director serves from the date of his election until the end of his term and
until his successor is elected and qualified. Henry Morgan resigned from the
board May 16, 2003 for personal reasons but rejoined the board on July 10, 2003.
Two persons will be elected at the Annual Meeting to serve as
director for a term of three years. The Company has nominated Henry Morgan and
Michael Schamroth as candidates for election. Unless authority is withheld, the
proxies solicited by management will be voted "FOR" the election of these
nominees. The election of directors requires a plurality vote of those shares
voted at the meeting. Each nominee has informed the Company that he will serve
if elected.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR"
EACH NOMINEE FOR ELECTION TO THE BOARD OF DIRECTORS.
INFORMATION CONCERNING NOMINEES FOR DIRECTOR
The nominees for director have the positions with the Company and
principal occupations set forth in the table below.
AGE AT
NOVEMBER 1, POSITION WITH THE COMPANY DIRECTOR TERM
NAME 2004 AND PRINCIPAL OCCUPATION SINCE EXPIRES
-------------------------------- ------------ --------------------------------------------- ------------- ---------
Henry Morgan 83 Director, Senior partner of the law 1994 2004
firm Morgan, Melhuish, Monaghan
Michael Schamroth 64 Director, owner of M. Schamroth 2004 2004
& Sons
Henry Morgan has had the principal occupation set forth in the table
above for the past five years. For personal reasons, Mr. Morgan resigned from
the board on May 16, 2003 and rejoined the board on July 10, 2003.
Michael Schamroth became an interim director as of February 24, 2004.
Mr. Schamroth, who runs a fourth generation family owned business, has in excess
of twenty years of experience as a Board Member of a major Long Island based
health system. His many roles have included Chairman of the Board, Chairman of
the Compensation Board and Member of the Finance Committee.
INFORMATION CONCERNING CONTINUING DIRECTORS
Each of the directors named in the following table will continue in
office after the Annual Meeting and until his term expires in the year indicated
and his successor is elected and qualified.
AGE AT
NOVEMBER ,1 POSITION WITH THE COMPANY DIRECTOR TERM
NAME 2003 AND PRINCIPAL OCCUPATION SINCE EXPIRES
---------------------------------------- -------------------------------------------------------- ------------ -------
Edwin H. Wegman 84 Chairman of the Board and President 1990 2005
Thomas L. Wegman 49 Executive Vice President 1990 2006
Dr. Paul Gitman 63 Director; Medical Director, 1990 2006
Long Island Medical Center
Edwin H. Wegman has had the principal occupation and positions with
the Company set forth in the table above for the past five years, and has held
similar positions with the Company's subsidiaries, Advance Biofactures
Corporation ("ABC-New York") and Advance Biofactures of Curacao ("ABC-Curacao"),
for the past five years.
Thomas L. Wegman was Secretary and Treasurer of the Company from
inception to July 1997, at which time he assumed his current position. In
addition, he has held, for the past five years, similar positions with the
Company's subsidiaries, ABC-New York and ABC-Curacao.
Dr. Gitman is Medical Director at Long Island Jewish Medical Center
since January 1, 1995 and prior thereto was an independent physician engaged in
the practice of internal medicine with Spellman Mykoff & Gitman, MD, P.C.
EXECUTIVE OFFICERS
In addition to the executive officers named above, the Company
employed Albert Horcher as its Secretary, Treasurer, and Principal Financial and
Chief Accounting Officer. Mr. Horcher, 44, is a certified public accountant and
served in these positions from July 1997 to April 2004, when he resigned from
the Company. From February 1991 to July 1997, he served as the Company's
Controller and Principal Financial and Chief Accounting Officer. In addition, he
held for the past five years similar positions with the Company's subsidiaries,
ABC-New York and ABC-Curacao. Executive officers are elected annually by the
Board of Directors and serve at the discretion of the Board
BOARD MEETINGS AND COMMITTEES
During the last fiscal year that ended December 31, 2003, the board
of directors met 5 times. All incumbent directors, with the exception of Mr.
Schamroth who joined the board in 2004, attended at least 90% of board meetings
Audit Committee. The Board has an Audit Committee consisting of Dr.
Paul A. Gitman, and Henry Morgan. The function of the Audit Committee is to
recommend selection of the Company's independent accountants, review with the
independent accountants the results of their audits, review with the independent
accountants and management the Company's financial reporting and operating
controls and the scope of audits, review all budgets of the Company and its
subsidiaries and make recommendations concerning the Company's financial
reporting, accounting practices and policies and financial, accounting and
operating controls and safeguards and review matters relating to the
relationship between the Company and its auditors. The audit committee met 4
times during the fiscal year ended December 31, 2003.
Stock Option Committee. The stock option committee consists of Dr.
Paul A Gitman and Henry Morgan. The function of the Stock Option Committee is to
administer the Company's 1993 Stock Option Plan (the "1993 Plan" which expired
July 2004), the Company's 1997 Stock Option Plan (the "1997 Plan"), and the
Company's 2001 Stock Option Plan (the "2001 Plan"). The stock option committee
did not meet during the last fiscal year.
Executive Committee. The executive committee consists of Edwin H.
Wegman and Thomas L. Wegman. The function of the Executive Committee is, except
for certain matters reserved to the full Board, to exercise all of the powers of
the Board in the management of the business of the Company during intervals
between Board meetings, if necessary. The executive committee held numerous
meetings during the last fiscal year.
The Board does not have nominating or compensation committees.
DIRECTOR COMPENSATION
The Company has no specific policy for compensating directors. In
past fiscal years, directors who were not employees were compensated for
meetings attended in person at the Company's headquarters, at a rate of $1,500
per meeting. However, during the year ended December 31 2003, none of the
incumbent directors, and none of the former directors were paid for any meetings
attended in person, and no accruals were made.
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The audit committee appointed, with Board notification, BDO Seidman
LLP as our independent auditors for the year ending December 31, 2003. BDO has
served as our independent auditors since December 2001 and provided us with
audit and tax services with respect to the fiscal years ended January 31, 2003
and December 31, 2003. No person, entity or intermediary who is an affiliate of
BioSpecifics is an affiliate of the Independent Auditors named herein.
In the event that ratification of this selection is not approved at
the annual meeting the audit committee will re-address its selection of
auditors.
A representative of BDO Seidman LLP will be present at the annual
meeting. The representative will have an opportunity to make a statement and
will be available to respond to questions from shareholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF PROPOSAL NO. 2.
EQUITY COMPENSATION PLAN INFORMATION
We maintain three equity compensation plans, the 1993 stock option
plan (which expired July 2004) , the 1997 stock option plan and the 2001 stock
option plan, as previously described. The following table sets forth information
regarding securities authorized for issuance under our equity compensation plans
as of December 31, 2003, and excludes the proposed increase previously
described:
---------------------------------- ------------------------------- ------------------------ ----------------------------------
Number of securities
Number of securities to be Weighted average remaining available for
issued upon exercise of exercise price of future issuance under equity
outstanding options outstanding options compensation plans
---------------------------------- ------------------------------- ------------------------ ----------------------------------
Equity compensation plans
approved by security
holders 1,350,625 $1.77 1,018,650
---------------------------------- ------------------------------- ------------------------ ----------------------------------
EXECUTIVE COMPENSATION
OFFICERS
The following table sets forth information concerning compensation
for services rendered in all capacities awarded to, or earned by, certain of the
Company's executive officers for the fiscal years indicated. There are no other
officers who earned an aggregate salary and bonus in excess of $100,000 during
the calendar year ended Decmber 31, 2003. These executive officers also serve in
the same capacities in ABC-New York, and ABC-Curacao, except for Dr. Friedel.
------------------------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
------------------------------------------------------------------------------------------------
Annual Compensation Long-Term
(no other compensation Compensation
applicable (no restricted
stock grants
were issued)
------------------------------------- ---------------- -------------------- --------------------
Securities
Name and Principal Fiscal Year Underlying
Position Ended Salary ($) Options (#)
------------------------------------- ---------------- -------------------- --------------------
Edwin H. Wegman 12/31/03 297,412 (1) -
President 1/31/03 405,169 39,000
1/31/02 405,169 100,000
------------------------------------- ---------------- -------------------- --------------------
Thomas L. Wegman 12/31/03 193,147 -
Executive 1/31/03 205,895 45,000
Vice President 1/31/02 205,895 50,000
------------------------------------- ---------------- -------------------- --------------------
Rainer Friedel1 12/31/03 192,500 -
Managing Director 1/31/03 192,500 20,000
1/31/02 192,500 50,000
------------------------------------- ---------------- -------------------- --------------------
Albert Horcher2 12/31/03 118,469 -
Secretary and 1/31/03 120,692 20,000
Treasurer 1/31/02 120,692 20,000
------------------------------------- ---------------- -------------------- --------------------
1 Rainer Fredel resigned from the Board of Directors and contemporaneously
resigned as an executive officer on [insert date] 2 Albert Horcher resigned on
April 30, 2004.
There were no grants of options to the executives of the Company
during the fiscal year ended December 31, 2003 and no officer or director
exercised any option during the year ended December 31, 2003.
The following table sets forth information concerning each exercise
of stock options during the 2003 calendar year by each of the named executive
officers, along with the calendaryear-end value of unexercised options.
-----------------------------------------------------------------------------------------------------------------------------------
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
-----------------------------------------------------------------------------------------------------------------------------------
Number of Unexercised Options at Value of Unexercised In-the-Money
Calendar Year-End (#) Options at Fiscal Year-End ($) (1)
---------------------------- ---------------- ------------- ----------------------------------- -----------------------------------
Name Shares Value
Acquired on Realized ($)
Exercise (#) Exercisable Unexercisable Exercisable Unexercisable
---------------------------- ---------------- ------------- --------------- ------------------- ---------------- ------------------
Edwin H. Wegman - - 66,750 79,250 $19,358 $6,340
---------------------------- ---------------- ------------- --------------- ------------------- ---------------- ------------------
Thomas L. Wegman - - 205,800 - $59,682 -
---------------------------- ---------------- ------------- --------------- ------------------- ---------------- ------------------
(1) The dollar values are calculated by determining the differences between
$1.47 per share, the fair market value of the Common Stock at December 31, 2003,
and the exercise price of the respective options and then multiplying this
amount by the number of shares underlying the options.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's officers,
directors and persons who beneficially own more than ten percent of the Common
Stock to file reports of ownership and changes in ownership with the Securities
and Exchange Commission. These reporting persons also are required to furnish
the Company with copies of all Section 16(a) forms they file. To the Company's
knowledge, based solely on its review of the copies of Form 4's furnished to it,
the Company believes that all Section 16(a) reporting requirements were complied
with during the calendar year ended December 31, 2003, except that the directors
and officers did not file timely Form 4 for stock option grants made September
24, 2002.
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors is providing this
report to enable stockholders to understand how it monitors and oversees the
Company's financial reporting process. The Audit Committee operates pursuant to
an Audit Committee Charter that is reviewed and approved by the Board of
Directors in 2001. This report confirms that the Audit Committee has (i)
reviewed and discussed the audited financial statements for the calendar year
ended December 31, 2003 with management and the Company's independent public
accountants, (ii) discussed with the Company's independent public accountants
the matters required to be reviewed pursuant to the Statements on Auditing
Standards No. 61 (Communications with Audit Committees); (iii) reviewed the
written disclosures letter from the Company's independent public accountants as
required by Independence standards Board Standard No. 1 (Independence
Discussions with Audit Committees); and (iv) discussed with the Company's
independent public accountants their independence from the Company.
Based upon the above review and discussions, the Audit Committee
recommended to the Board of Directors that the audited financial statements for
the calendar year ended December 31, 2003 be included in the Company's Annual
Report on Form 10-KSB for filing with the Securities and Exchange Commission.
In March 2003 we changed our fiscal year end from January 31 to
December 31. Our first fiscal year using this new basis was the eleven months
ending December 31, 2003. The audit committee appointed BDO Seidman LLP as our
independent auditors for the next fiscal period, the calendar year ending
December 31, 2004.
The aggregate fees and expenses incurred for professional services
rendered by our auditors BDO with respect to calendar year ended December 31,
2003 and the fiscal year ended January 31, 2003 were as follows
CALENDAR FISCAL
YEAR ENDED YEAR ENDED
12/31/03 1/31/03
Audit fees $ 80,000 $ 86,000
Tax fees $ 26,000 $ 38,500
All other fees $ $
Audit fees include fees for quarterly reviews and the calendar year
ended December 31, 2003 and the fiscal year ended January 31, 2003. Tax fees
include fees for United States tax return preparation and services relating to
international taxation.
The audit committee has determined that the provision of non-audit
professional services rendered by BDO is compatible with maintaining auditor
independence.
Respectfully submitted,
Audit Committee
Paul Gitman
CERTAIN TRANSACTIONS
The S.J. Wegman Company owns Wilbur Street Corporation ("WSC"), which
has leased to ABC-New York a building serving as a manufacturing facility and
headquarters in Lynbrook, New York for over 30 years. The building also serves
as the Company's administrative headquarters. Edwin H. Wegman, the Company's
Chairman of the Board and President, is the President of WSC and the sole
general partner of The S.J. Wegman Company, a limited partnership. In January
1998, WSC and the Company entered into a triple net lease agreement that
provides for an annual rent starting at $125,000, which can increase annually by
the amount of annual increase in the Consumer Price Index for the greater New
York metropolitan region. The lease term is 7 years, expiring January 31, 2005.
The Company believes that the terms of this lease are reasonable and the rent
charged is no greater than that which would be charged by an unaffiliated
landlord for comparable facilities, based on appraisals of the property. As at
December 31, 2003, the Company had advanced $15,647 to WSC, and had a 9%
non-amortizing mortgage, secured by the Company's headquarters building, from
WSC in the amount of $82,606.
The Company has two loans to the Company's chairman. One loan, whose
principal balance at December 31, 2003 is $494,302 is a demand promissory note,
bears interest at 9% per annum, and is collateralized by approximately 1,800,000
shares of the Company's stock. Another loan, whose principal balance at December
31, 2003 is $56,820 is a demand promissory note, bears interest at 9% per annum,
and is uncollateralized. The Company also has two loans with Wilbur St.
Corporation ("WSC"), an affiliate of the chairman. One loan is a non-amortizing
mortgage from WSC in the amount of $82,606 and bears interest at 9% per annum;
the other is for advances to WSC which amount to $15,647. For financial
statement purposes, all these loans, which aggregate $649,375 are classified as
components of stockholders' equity in the balance sheet and appear as "Notes due
from chairman and other related party". During calendar 2003, the Chairman
repaid net principal of $375,935 on these loans. There is no assurance that the
Company will be able to collect on these notes. Interest income accrued for
these loans but not recognized for financial statement purposes aggregated
approximately $42,000 and $101,000 for the calendar year ended 2003 and fiscal
2003, respectively.
ABC-New York has notes payable to a former director of the Company and to a
partner of the S.J. Wegman Company, an affiliate, amounting to $15,000 at
December 31, 2003. The notes, which bear interest at 9% per annum, are payable
on demand.
2004 STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the Annual
Meeting to be held following the end of the calendar year ended December 31,
2004 for inclusion in the proxy statement of the Company in accordance with Rule
14a-8 of the Exchange Act must be received at the Company's offices by April 1,
2005. In addition, no proposal by a stockholder submitted outside the process of
Rule 14a-8 of the Exchange Act shall be presented for vote at the Annual Meeting
unless such stockholder shall, not later than the close of business on the fifth
day following the date on which notice of the meeting is first given to
stockholders, provide the Board of Directors or the Secretary of the Corporation
with written notice of intention to present a proposal for action at the
forthcoming meeting of stockholders.
OTHER MATTERS
The Board of Directors knows of no matter which will be presented for
consideration at the meeting other than the matters referred to in this Proxy
Statement. Should any other matter properly come before the meeting, it is the
intention of the persons named in the accompanying proxy to vote such proxy in
accordance with their best judgment.
A copy of the Company's calendar 2003 form 10KSB is being mailed to
shareholders together with this proxy statement, form of proxy, and notice of
annual meeting of shareholders. Additional copies may be obtained from the
Secretary of BioSpecifics Technologies Corp., 35 Wilbur St., Lynbrook, NY 11563.
By Order of the Board of Directors,
Thomas L. Wegman
Secretary
Lynbrook, New York
November 17, 2004