U.S. Securities and Exchange Commission
Washington D.C. 20549
FORM 10-QSB
(Mark One)
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended: April 30, 2001
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[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
Commission File number: 0-19879
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BioSpecifics Technologies Corp.
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(Exact name of Small Business Issuer as Specified in Its Charter)
Delaware 11-3054851
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(State of Incorporation) (IRS Employer I.D. Number)
35 Wilbur St.
Lynbrook, NY 11563
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(Address of principal executive offices)
(516) 593-7000
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(Issuer's telephone number, including area code)
Check whether the issuer: (1) has filed all reports required 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__
---------
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: 4,529,766 shares of Common
Stock, $0.001 par value as of June 1, 2001
Transitional Small Business Disclosure Format (check one):
Yes No X
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INDEX
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Page
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PART I - FINANCIAL INFORMATION 3
Item 1. Financial Statements 3
Consolidated Financial Statements:
Balance Sheets as of April 30, 2001 (unaudited) and
January 31, 2001 3
Statements of Operations for the Three Months Ended
April 30, 2001 and 2000 (unaudited) 4
Statements of Cash Flows for the Three Months Ended
April 30, 2001 and 2000 (unaudited) 5
Notes to Consolidated Interim Financial Statements
(unaudited) 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
PART II - OTHER INFORMATION 11
SIGNATURES 12
2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
BioSpecifics Technologies Corp. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
April 30, January 31,
2001 2001
----------- -----------
ASSETS
Cash and cash equivalents $ 314,674 $ 569,170
Marketable securities 3,026 114,187
Accounts receivable 2,048,724 1,165,932
Inventory 1,060,556 1,930,044
Income tax refund receivable 150,000 150,000
Prepaid expenses and other current assets 22,406 27,946
----------- -----------
Total current assets 3,599,386 3,957,279
Property, plant, and equipment - net 5,181,395 4,893,167
Deferred tax assets 136,206 136,206
Due from related parties 128,280 128,280
Other assets 28,812 28,812
----------- -----------
TOTAL ASSETS $ 9,074,079 $ 9,143,744
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $ 1,552,744 $ 1,782,317
Notes payable to related parties 13,635 13,510
Deferred revenue 45,000 45,000
----------- -----------
Total current liabilities 1,611,379 1,840,827
Minority interest in subsidiaries 241,948 239,448
STOCKHOLDERS' EQUITY
Series A Preferred stock, $.50 par value; 700,000
shares authorized; none outstanding -- --
Common stock, $.001 par value; 10,000,000 shares authorized;
4,891,146 shares issued at April 30, 2001 and January 31, 2001 4,891 4,891
Additional paid-in capital 3,753,375 3,748,375
Retained earnings 6,533,064 6,358,331
Accumulated other comprehensive income 19,768 18,151
Treasury stock - 361,380 shares, at cost (1,911,237) (1,911,237)
Notes receivable from chairman (1,179,109) (1,155,042)
----------- -----------
Stockholders' equity 7,220,752 7,063,469
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 9,074,079 $ 9,143,744
=========== ===========
See accompanying notes to consolidated financial statements.
3
Biospecifics Technologies Corp.
and Subsidiaries
Consolidated Statements of Operations
Unaudited
Three Months Ended
April 30,
2001 2000
----------- -----------
Revenues:
Net sales $ 2,211,202 $ 989,805
Royalties 581,270 449,198
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2,792,472 1,439,003
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Costs and Expenses:
Cost of sales 1,899,488 479,787
Selling, general and administrative 449,588 552,327
Research and development 276,121 411,679
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2,625,197 1,443,793
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Income (loss) from operations 167,275 (4,790)
Other income (expense):
Investment and other income (loss) 11,042 (56,515)
Interest expense (1,084) (1,583)
----------- -----------
9,958 (58,098)
Income (loss) before income taxes and minority interest 177,233 (62,888)
Income tax expense 0 (3,030)
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Income (loss) before minority interest 177,233 (65,918)
Minority interest in net income of subsidiaries (2,500) --
----------- -----------
Net income (loss) $ 174,733 ($65,918)
=========== ===========
Basic net income (loss) per common share $ 0.04 ($0.01)
=========== ===========
Weighted-average common shares outstanding 4,529,766 4,529,766
=========== ===========
Diluted net income (loss) per common share $ 0.04 ($0.01)
=========== ===========
Weighted-average common and dilutive
potential common shares outstanding 4,563,406 4,529,766
=========== ===========
See accompanying notes to consolidated financial statements
4
BioSpecifics Technologies Corp. and Subsidiaries
Consolidated Statements of Cash Flows
(unaudited)
Three Months Ended
April 30,
2001 2000
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 174,733 $ (65,918)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization 40,999 37,292
Loss on marketable securities - net 1,320 141,938
Minority interest in income of subsidiaries 2,500 --
Options issued for services 5,000 --
Deferred tax benefit -- (52,970)
Changes in operating assets and liabilities:
Accounts receivable (882,792) 508,708
Marketable securities, net 109,841 (237,495)
Inventory 869,488 (168,790)
Prepaid expenses and other current assets 5,540 12,671
Accounts payable and accrued expenses (229,573) (332,197)
Income taxes -- 56,000
Deferred revenue -- 1,687,910
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Net cash provided by operating activities 97,056 1,587,149
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CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in notes receivable from chairman (24,067) (215,000)
Increase in due from related parties -- (4,000)
Expenditures for plant, property and equipment (329,227) (694,215)
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Net cash used in investing activities (353,294) (913,215)
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CASH FLOWS FROM FINANCING ACTIVITIES
Increase in notes payable to related parties 125 125
Effect of exchange rates on cash and cash equivalents 1,617 (835)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (254,496) 673,224
CASH AND CASH EQUIVALENTS:
Beginning of Period 569,170 4,221,447
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End of Period $ 314,674 $ 4,894,671
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 1,085 $ 1,583
=========== ===========
Cash paid during the period for income taxes $ 1,188 $ 82,847
=========== ===========
See accompanying notes to consolidated financial statements
5
BIOSPECIFICS TECHNOLOGIES CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
APRIL 30, 2001
(UNAUDITED)
1. Description of Business and Basis of Presentation
-------------------------------------------------
The accompanying consolidated financial statements include the accounts of
BioSpecifics Technologies Corp. (the "Company"), its majority-owned
subsidiaries, Advance Biofactures Corp. ("ABC - New York") and Advance
Biofactures of Curacao N.V. ("ABC - Curacao") and its wholly-owned subsidiary,
Biospecifics Pharma GmbH ("Bio Pharma") of Germany. All significant intercompany
transactions and balances have been eliminated in consolidation.
The Company produces a fermentation-derived enzyme named Collagenase ABC (the
"product" or "enzyme") that is licensed by the U.S. Food and Drug Administration
(the "FDA") and is indicated for topical debridement of dermal ulcers and burn
wounds. The Company operates a production facility in Lynbrook, New York (the
"Lynbrook Plant or Facility") and in Curacao, Netherlands Antilles (the "Curacao
Plant or Facility"). The Company is also researching and developing additional
products derived from this enzyme for potential use as pharmaceuticals.
The Company derives most of its net sales of product revenues and all of its
royalty revenues from one customer, Knoll Pharmaceutical Company ("KPC"). KPC
acts as the Company's contract manufacturer by compounding the product into
Collagenase Santyl(R) (Santyl(R)), an ointment used to treat various types of
skin wounds, particularly chronic dermal ulcers and severely burned areas. The
Company and KPC are parties to a licensing agreement expiring in August 2003
providing KPC with exclusive rights to market Santyl(R) in North America in
exchange for purchases of the product and royalties on KPC's Santyl(R) sales to
distributors. The license agreement has an automatic ten-year renewal clause
unless KPC elects not to renew the agreement. The rest of the Company's revenues
come from product sales to pharmaceutical companies in Brazil and India.
In January 2000, pursuant to a sublicense and assignment agreement, to which
ABC-New York is not a party, KPC sublicensed its rights to Smith & Nephew, Inc.
("S&N") with the consent of ABC. Under the sublicense, KPC will continue to
purchase the product from the Company and manufacture Santyl(R). S&N will market
the Santyl(R). In connection with the sublicense, the Company entered into
several contemporaneous agreements with KPC and S&N. These agreements included
one allocating responsibility under the KPC Agreement among ABC, KPC, and S&N
for both the sublicense and license period. Another agreement imparts certain
obligations upon ABC to address the FDA issues concerning the Curacao and
Lynbrook manufacturing facilities. (See "Liquidity, Capital Resources, and
Changes in Financial Condition".) KPC will assign its license rights in the KPC
Agreement to S&N in the event of FDA approval of a compliance program being
undertaken by ABC. If the license rights are assigned to S&N, the KPC agreement
will be automatically extended at that time until 2013.
In March 2001, KPC became an indirect wholly owned subsidiary of Abbott
Laboratories.
2. Interim Financial Statements
----------------------------
In the opinion of management, the accompanying consolidated financial statements
of the Company have been prepared in accordance with accounting principles
generally accepted in the United States of America for interim financial
information and reflect all adjustments, consisting of normal recurring
adjustments, considered necessary to present fairly, in all material respects,
the Company's balance sheet as of April 30, 2001, the statements of operations
for the three months ended April 30, 2001 and 2000, and statements of cash flows
for the three months ended April 30, 2001 and 2000.
6
The results of operations for interim periods are not necessarily indicative of
the results to be expected for an entire fiscal year, and the results for the
current interim period are not necessarily indicative of results to be expected
in other interim periods. These interim financial statements should be read in
conjunction with the Company's Form 10-KSB for the fiscal year ended January 31,
2001.
3. Net income (loss) per share
---------------------------
Basic net income (loss) per share ("EPS") excludes dilution and is computed by
dividing earnings (loss) available to common stockholders by the
weighted-average number of common shares outstanding for the period. Diluted EPS
reflects the dilution that would occur if common stock equivalents were
exercised or converted into common stock or resulted in the issuance of common
stock that then shared in the earnings of the Company. As a result of the net
loss for the three months ended April 30, 2000, common stock equivalents have
not been included in the diluted EPS calculation, as their effect would have
been antidilutive. During the three months ended April 30, 2001, dilutive common
stock options included in diluted EPS amounted to 33,640.
4. Segment Information
-------------------
The Company is engaged in one segment, specifically research, development and
production of pharmaceutical products. Operations in this business segment take
place in one location in the United States of America, one location in Curacao,
Netherlands Antilles, and one location in Germany. As of April 30, 2001,
identifiable assets in the United States of America approximated $4.3 million
and identifiable assets in Curacao, Netherlands Antilles and Germany
approximated $4.8 million. For the three months ended April 30, 2001, total
revenues derived from a customer in the United States of America approximated
$2.7 million, and $100,000 from customers in Brazil and India. For the three
months ended April 30, 2000, total revenues derived from a customer in the
United States of America approximated $1.2 million and $239,000 from customers
in Brazil and India.
5. Stockholders' equity and other comprehensive income
---------------------------------------------------
The change to stockholders' equity during the periods presented were increases
(decreases) to retained earnings due to net income (loss) and increases in
additional paid in capital resulting from the issuance of fully vested and
non-forfeitable stock options granted to non-employees. Other comprehensive
income represents gains and losses resulting from translation of foreign
subsidiaries' assets, liabilities, revenues and expenses into the U.S. dollar at
period-end exchange rates.
6. Liquidity and Financial Condition
See "Liquidity, Capital Resources, and Changes in Financial Condition" for a
discussion about the Company's response to FDA inspectional observations and its
effect on the Company's financial condition.
Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
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Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
--------------------------------------------------------------------------------
Information provided by the Company or statements contained in this report or
made by its employees, if not historical, are forward looking information, which
involve uncertainties and risk. The Company cautions readers that important
factors may affect the Company's actual results and could cause such results to
differ materially from forward-looking statements made by or on behalf of the
Company.
7
Such factors include, but are not limited to, government regulation, the ability
of the Company to complete the renovation of its production facilities and
comply with the Form 483 and FDA Letter, the Company's estimate that its
inventory of product is sufficient until the renovated facilities can produce
again, changing market conditions, the impact of competitive products and
pricing, the timely development and approval by the FDA and foreign health
authorities of potential products, market acceptance of the Company's potential
products, and other risks detailed herein and in other filings the Company makes
with the Securities and Exchange Commission. Further, any forward looking
statement or statements speak only as of the date on which such statements were
made, and the Company undertakes no obligation to update any forward looking
statement or statements to reflect events or circumstances after the date on
which such statement or statements were made.
The Company incorporates by reference the Management's Discussion and Analysis
of Financial Condition and Results of Operations set forth in its Form 10-KSB
for the fiscal year ended January 31, 2001.
Three months ended April 30, 2001 and 2000
------------------------------------------
Net Sales - Net sales include the sales of Collagenase ABC recognized at the
time the product is shipped to customers, primarily KPC. Net sales also includes
fees the Company charges KPC for testing Collagenase Santyl(R) contract
manufactured by KPC. Net sales for the three months ended April 30, 2001 and
2000 were $2,211,202 and $989,805, respectively, an increase of $1,221,397 or
123%. The increase is due to the timing of product shipments made to KPC, which
is in turn due to the timing of when the product is complete and thereby ready
for shipment to KPC. During the three months ended April 30, 2001, the Company
made two large shipments of product to KPC that became available, versus one
large shipment during the three months ended April 30, 2000. KPC has told the
Company that it may deliver any of the enzyme product it accumulated in
inventory, whenever it becomes available.
Royalties - Royalties for the three months ended April 30, 2001 and 2000 were
$581,270 and $449,198 respectively, an increase of $132,072 or 29%. The increase
was due to higher sales of Collagenase ointment (Collagenase Santyl(R)) to
wholesalers in the United States by S&N during the 2001 first fiscal quarter, as
reported to the Company by KPC. During the fourth quarter of calendar 1999, KPC
initiated a sales promotion for Collagenase Santyl(R). Wholesalers responded to
the promotion by buying at record levels. As a result, wholesalers purchased
less during the subsequent period; which was the three months ended April 30,
2000.
Cost of Sales - Cost of sales for the three months ended April 30, 2001 and 2000
were $1,899,488 and $479,787 respectively, an increase of $1,419,701 or 296%. As
discussed above, during the three months ended April 30, 2001, the Company made
two large shipments to KPC of product in inventory that had been accumulated in
anticipation of the suspension of manufacturing operations in March 2000. This
inventory was substantially completed as of January 31, 2001. The gross profit
percentage decreased to 15% during the three months ended April 30, 2001
compared to 52% for the 3 months ended April 30, 2000 due to lower inventory
processing activity in this as well as prior periods and a provision for
potential warranty costs provided for during the three months ended April 30,
2001. The Company has not produced any new inventory due to the renovation of
the Curacao facility and only continued the processing and sale of the
accumulated inventory. As a result, a significant portion of the Company's fixed
production costs that had been absorbed into a lower number of inventory units
processed were sold during the three months ended April 30, 2001, as compared to
the three months ended April 30, 2000.
8
Since March 2000 and during the three months ended April 30, 2001, the Company
has been renovating its Collagenase ABC production facilities and has not been
able to produce any new inventory (see "Liquidity, Capital Resources, and
Changes in Financial Position"). Production costs, primarily wages, benefits,
and production overhead are being allocated to the Company's remaining
inventory, but at more limited levels than could be during normal production.
Starting in May 2001, the Company resumed Collagenase ABC enzyme production at
its renovated facility in Curacao, though at a limited level. The Company cannot
sell the enzyme it is now producing at the renovated facility to KPC until the
FDA approves a supplement (the "supplement') to ABC's Establishment License.
While it may be possible to allocate production costs to this new inventory, the
Company is dependent on the FDA's approval of the renovated plant in Curacao for
the resumption of normal operations. See "Liquidity, Capital Resources, and
Changes in Financial Condition".
Selling, general and administrative - Selling, general and administrative
("SG&A") expenses for the three months ended April 30, 2001 and 2000 were
$449,588 and $552,327 respectively, a decrease of $102,739 or 19%. During the
quarter ended April 30, 2000, the Company's use of consultants to assist in
responding to FDA observations was higher than in the 2001 period.
Research and development - Research and development ("R&D") expense for the
three months ended April 30, 2001 and 2000 were $276,121 and $411,679
respectively, representing a decrease of $135,558 or 33%. In both periods the
Company sponsored Phase 2 clinical trials of injectable collagenase for
Dupuytren's disease, which has been granted Orphan Drug status by the FDA.
However, the clinical activity was greater during the year ago period. Also,
internal R&D staff costs declined as development moved to outside clinics, and
as the internal staff dedicated more of its efforts to addressing the
inspectional observations made by the FDA (see "Liquidity, Capital Resources,
and Changes in Financial Condition"). The Company is focusing its R&D on
potential indications of its injectable collagenase. During the 2000 period,
there was greater clinical activity, hence greater costs, than in the 2001
period.
Other income (loss), net - Other income (loss), net for the three months ended
April 30, 2001 and 2000 was $9,958 and $(58,098) respectively. The increase of
$68,056 was attributable to the decrease in the amount of the Company's
investments in equity securities held as trading securities.
Income tax (expense) benefit - The income tax expense for the three months ended
April 30, 2001 and 2000 was $0 and $3,030 respectively. The 2000 period expense
represents current tax liabilities for foreign income taxes, partially offset by
an increase in deferred tax assets, principally relating to net operating loss
carryback credits. The Company has a 2% tax rate ("tax holiday") applicable to
pre-tax earnings from operations of its subsidiary in Curacao, in effect until
the year 2016. The statutory tax rate in Curacao is normally 30%.
Liquidity, Capital Resources and Changes in Financial Condition
---------------------------------------------------------------
The Company's primary source of working capital is from operations, which
includes sales of product, royalties, and periodic license fees. At April 30,
2001, the Company had working capital of approximately $1.9 million, which
includes cash and cash equivalents, and marketable securities of approximately
$317,000. The principal use of cash during the three months ended April 30, was
approximately $329,000 used to purchase plant, property and equipment for the
Curacao and Lynbrook facilities. These uses were partially offset by cash
provided by operating activities of approximately $197,000.
The Company's manufacturing facilities in New York and Curacao are registered
with, and licensed by, the FDA. As previously disclosed, in January and March of
1999, ABC was issued a List of Inspectional Observations on FDA Form 483 (the
"Form 483") from FDA inspectors, citing numerous inspectional observations
relating to deficiencies in the Company's compliance with FDA regulations at its
Lynbrook, New York and Curacao, Netherlands Antilles facilities. In addition, in
May 1999, ABC received a letter from the FDA (the "FDA Letter") citing certain
inspectional observations relating to deficiencies at its Lynbrook, New York
facility, Curacao, Netherlands Antilles facility, and contract manufacturing
facility at KPC.
9
The FDA Letter advised ABC that the FDA will institute formal proceedings to
revoke ABC's Establishment License to manufacture Collagenase Santyl(R) Ointment
unless ABC provided satisfactory assurances to the FDA, including submitting to
the FDA a comprehensive plan of corrective action to address the observations
listed in the Form 483 and the FDA Letter, and otherwise demonstrate compliance
with applicable regulatory requirements.
The Company has provided the FDA with a plan of corrective action and has had a
number of meetings with the FDA to discuss the plan of corrective action and the
renovation of the Curacao production facility. ABC has submitted a number of
periodic updates to the FDA on progress under the plan. ABC hired outside
consultants and employed additional staff for its reorganized Quality Unit. The
Company has retained an outside consulting firm with expertise in FDA regulatory
compliance matters to assist in developing and implementing the corrective
action plan.
The Company has produced the enzyme Collagenase ABC (the "enzyme"), the active
ingredient in Collagenase Santyl(R) Ointment, at its Lynbrook and Curacao
facilities. The Company started extensive renovations at the Curacao facility in
March 2000, which resulted in the suspension of enzyme production there. The
Company also voluntarily suspended the production of the enzyme at the Lynbrook
facility, although final stage testing continues there.
The Company has spent approximately $4.4 million through April 30, 2001 in new
equipment and leasehold improvements and anticipates it could invest
approximately $200,000 more to completion. This investment is intended to
address matters described in the Form 483 and the FDA Letter, as well as to
modernize and ensure the efficiency of the Company's production process in the
future. During the fiscal year ended January 31, 2000 the Company had spent
approximately $1,000,000 for professional fees and other expenses in connection
with the remediation of the FDA's deficiency observations, and spent
approximately $215,000 during the fiscal year ended January 31, 2001. The
Company estimates it could spend an additional $200,000 in fees in connection
with the remediation of the FDA's deficiency observations.
Although renovations at the Curacao and Lynbrook facilities were substantially
completed in March 2001, the Company cannot sell to KPC enzyme it will produce
at these facilities until the FDA approves a supplement (the "supplement') to
ABC's Establishment License. As part of the approval process for the supplement,
the FDA will conduct an inspection of the Curacao facility. In anticipation of
the renovation and suspension of manufacturing operations, the Company
accumulated an inventory of the product, which it continues to test, and it
estimates KPC can use to contract manufacture Collagenase Santyl(R) Ointment
into the second quarter of calendar 2002. In the opinion of the Company, this
would permit KPC to supply S&N with the ointment into the third quarter of
calendar 2002.
While the Company believes that it has made considerable progress in addressing
the FDA concerns addressed in the Form 483 and the FDA Letter, if the Company is
unable to further address these matters in a timely manner, there may be delays
in the delivery of the product produced in the renovated facilities to KPC for
use to contract manufacture Collagenase Santyl(R) Ointment. Such delays could
have a material adverse effect on the Company's future operating results.
The Company, through its subsidiary ABC - Curacao, has received a commitment for
a two-year, non-amortizing loan of $450,000 at 6.5% interest from Korpodeko, a
Curacao development corporation established to develop industry on the island of
Curacao. The entire principal would become due two years after the loan is drawn
down. In connection with this loan, ABC-Curacao has agreed it will pledge as
collateral substantially all of the Company's assets located in Curacao, with a
book value of approximately $4.1 million. The Company has also agreed it would
guarantee the Korpodeko loan. The Company expects to draw down this loan during
the second calendar quarter of 2001.
10
The Company, through its subsidiary, ABC-Curacao, also maintains a line of
credit with a Netherlands Antilles bank under which the bank will lend up to
$110,000 to ABC-Curacao, with interest at the bank's prime lending rate (12% at
April 30, 2001). Drawings under the line of credit would be secured by
investment assets and cash on deposit at the bank, is payable on demand, and is
guaranteed by ABC-New York.
The Company believes that its capital resources, together with anticipated
proceeds from the sales of available inventory and related royalty income, are
adequate to sustain the business at least through April 30, 2002. In addition,
the Company also believes that it has made substantial progress in addressing
the FDA's inspectional observations and that it may be able to resume normal
operations during the fourth quarter of calendar year 2001. However, the Company
is dependent on the FDA's approval of its renovated plant in Curacao for the
resumption of normal operations and the production of Collagenase ABC enzyme.
Although management believes that the Company's capital resources are adequate
and that it has made satisfactory progress toward completing the Corrective
Action Plan and addressing the FDA's concerns, there can be no assurance that
unforeseen circumstances will not have a material adverse effect on the
Company's financial condition and that the cost of completing the renovation of
the Lynbrook and Curacao plants will not exceed management's estimates. In
addition there can be no assurance that the FDA will not have additional
inspectional observations that could result in the delay of completing the
Corrective Action Plan or that the FDA will approve the renovated plant and
permit the Company to resume its normal operations at all.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
For a discussion of the Company's progress concerning inspectional observations
from the U.S. Food and Drug Administration, see "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Liquidity, Capital
Resources, and Change in Financial Condition."
11
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act
of 1934, the Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BioSpecifics Technologies Corp.
-------------------------------
(Registrant)
Date: June 19, 2001
-------------
By: /s/ Edwin H. Wegman
--------------------------
Edwin H. Wegman
Chairman, President, and
Chief Executive Officer
Date: June 19, 2001
-------------
By: /s/ Albert Horcher
--------------------------
Albert Horcher
Secretary, Treasurer and Principal Financial
and Chief Accounting Officer
12