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 25, 2005
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 Best
Western, 173 Sunrise Highway, Rockville Centre, New York 11570 on December 16,
2005 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 16, 2005
--------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
BioSpecifics Technologies Corp. (the "Company") will be held at the Best
Western, 173 Sunrise Highway, Rockville Centre, New York 11570 on December 16,
2005 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 one director of the Company to hold office for the
term as described in the enclosed proxy statement;
No. 2. To ratify the selection of Bloom and Co. LLP as registered
public accountants of the Company for its fiscal period ending
December 31, 2005.
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 two
proposals as more fully outlined in this proxy statement. Only stockholders of
record at the close of business on November 9, 2005 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 28, 2005
2
BIOSPECIFICS TECHNOLOGIES CORP.
35 WILBUR STREET
LYNBROOK, NEW YORK 11563
------------------
PROXY STATEMENT
---------------
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD DECEMBER 16, 2005
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 Best Western, 173 Sunrise
Highway, Rockville Centre, New York 11570 on December 16, 2005 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 Form 10KSB for the
fiscal year ended December 31, 2004 ("calendar 2004") to Stockholders on or
about December 2, 2005.
INFORMATION CONCERNING SOLICITATION AND VOTING
OUTSTANDING SHARES ENTITLED TO VOTE
On November 9, 2005, there were outstanding 5,355,216 shares of common
stock, $.001 par value per share, of the Company ("Common Stock"). Shareholders
of record of the Common Stock on November 9, 2005, 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 9, 2005
as the record date for the determination of stockholders entitled to notice of
and to vote at the meeting.
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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 nominee for director 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 director, by checking the
appropriate box on your proxy card, you may: (a) vote "FOR" the director
nominee; or (b) withhold authority to vote for the director nominee.
Stockholders may vote by either completing and returning a signed proxy card
prior to the meeting, voting in person at the meeting, submitting a signed proxy
card at the meeting, or such other method(s) as the proxy agent may subscribe.
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.
4
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, 2005 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 2004 (which ended December 31, 2004), 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 39.4
Thomas L. Wegman (2) 239,944 4.2
Paul A. Gitman, MD. (3) 62,925 1.1
Henry Morgan (4) 25,528 *
Michael Schamroth (5) 110,000 1.9
Lawrence Dobroff 0 0.0
Bio Partners LP(6) 456,620 7.9
Directors and executive officers 2,736,939 47.0%
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 shares beneficially owned by The Isabel H. Wegman Rev. Trust. The sole
trustee of this trust is the estate of Mr. Wegman's brother. Includes 94,500
options to purchase shares of Common Stock that are currently exercisable. Does
not include 44,500 options to purchase 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 170,800 options to purchase 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 25,425 options to purchase 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.
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(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.
(6) Listed address is 1 Meadow Drive, Lawrence, New York 11559.
PROPOSAL NO. 1
ELECTION OF DIRECTOR
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 Paul 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 2007, 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.
One person will be elected at the Annual Meeting to serve as director for
a term of three years. The Company has nominated Edwin H. Wegman as candidate
for election. Unless authority is withheld, the proxy solicited by management
will be voted "FOR" the election of this nominee. The election of director
requires a plurality vote of those shares voted at the meeting. The 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 NOMINEE FOR DIRECTOR
The nominee for director has the position with the Company and principal
occupation set forth in the table below.
Age at
November Position With the Company Term
Name 9, 2005 and Principal Occupation Director Since Expires
---- ------- ------------------------ -------------- -------
Edwin H. Wegman 85 Chairman of the Board and CEO 1990 2005
Edwin H. Wegman has had the principal occupation and positions with the
Company set forth in the table above for the past five years. In October 2005,
Mr. Wegman resigned as President of the Company. He 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.
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.
6
Age at
November Position With the Company Term
Name 9, 2005 and Principal Occupation Director Since Expires
---- ------- ------------------------ -------------- -------
Thomas L. Wegman 50 President and Secretary 1990 2006
Dr. Paul Gitman 64 Director; Medical Director, 1990 2006
Long Island Jewish Medical Center
Henry Morgan 84 Director, Senior partner of the 1994 2007
law firm Morgan, Melhuish, Monaghan
Michael Schamroth 65 Director, owner of M. Schamroth 2004 2007
& Sons
Thomas L. Wegman was Secretary and Treasurer of the Company from inception
to July 1997, at which time he assumed the position or Executive Vice President.
In October 2005 he was elected to the position of President. 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 has had the principal occupation set forth in the table above
for the past five years.
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. He
was elected to a full term at the 2004 Annual Meeting of Stockholders. Mr.
Schamroth has had the principal occupation set forth in the table above for the
past five years.
EXECUTIVE OFFICERS
In addition to the executive officers named above, the Company employs
Lawrence Dobroff as its Chief Financial Officer. Mr. Dobroff, 48, is a certified
public accountant. He joined the Company in May 2004 as its Controller and was
elected to his current position in December 2004. For the five years prior to
his joining the Company, Mr. Dobroff was a Consulting Financial Executive to
various companies. In addition, he holds 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, 2004, the board of
directors met 4 times. All incumbent directors attended all 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 1 time during the fiscal year ended
December 31, 2004.
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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
met 3 times 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 2004, 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 and approval, Bloom
and Co. LLP as our independent auditors for the year ending December 31, 2004.
Bloom and Co. has served as our independent auditors since January 2005 and
provided us with audit services with respect to the fiscal year ended December
31, 2004. 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 Bloom and Co. 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 stockholders.
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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, 2004.
-----------------------------------------------------------------------------------------------------------
Number of securities
Number of securities to Weighted average remaining available for
be issued upon exercise exercise price of future issuance under
of outstanding options outstanding options equity compensation plans
-----------------------------------------------------------------------------------------------------------
Equity compensation
Plans approved by
Security holders 1,045,400 $1.58 1,339,175
-----------------------------------------------------------------------------------------------------------
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 $100,000 during
the calendar year ended December 31, 2004. These executive officers also serve
in the same capacities in ABC-New York, and ABC-Curacao.
SUMMARY COMPENSATION TABLE
----------------------------------------------------------------------------------------------------------
Long-Term Compensation
Annual Compensation (no (no restricted stock
other compensation applicable grants were issued)
----------------------------------------------------------------------------------------------------------
Name and Principal Position Fiscal Year Salary ($) Securities Underlying
Ended Options (#)
----------------------------------------------------------------------------------------------------------
Edwin H. Wegman 12/31/04 412,961 --
Chairman and CEO 12/31/03 297,412 --
01/31/03 405,169 39,000
----------------------------------------------------------------------------------------------------------
Thomas L. Wegman 12/31/04 207,132 --
President 12/31/03 193,147 --
1/31/03 205,895 45,000
----------------------------------------------------------------------------------------------------------
Lawrence Dobroff(3) 12/31/04 80,000 --
CFO
----------------------------------------------------------------------------------------------------------
Rainer Friedel(1) 12/31/04 -- --
Managing Director 12/31/03 192,500 --
1/31/03 192,500 20,000
----------------------------------------------------------------------------------------------------------
Albert Horcher(2) Secretary and 12/31/04 80,478 --
Treasurer 12/31/03 118,469 --
1/31/03 120,692 20,000
----------------------------------------------------------------------------------------------------------
9
(1) Rainer Friedel resigned from the Board of Directors and
contemporaneously resigned as an executive officer on April 30, 2004
(2) Albert Horcher resigned on April 30, 2004
(3) Mr. Dobroff's compensation for 2004 was comprised of both cash and
stock, which was issued in lieu of cash and included in the $80,000.
In 2005, Mr. Dobroff sold those shares
There were no grants of options to the executives of the Company during the
calendar year ended December 31, 2004 and no officer or director exercised any
option during the year ended December 31, 2004.
The following table sets forth information concerning each exercise of
stock options during the 2004 calendar year by each of the named executive
officers, along with the calendar year-end value of unexercised options.
AGGREGATED OPTION EXERCISES IN LAST CALENDAR YEAR AND
CALENDAR YEAR-END OPTION VALUES
--------------------------------------------------------------------------------- -------------------------------------
Number of Unexercised Options at Value of Unexercised In-the Money
Calendar Year-End (#) Options at Calendar Year-End ($)(1)
-----------------------------------------------------------------------------------------------------------------------
Name Shares Value Exercisable Unexercisable Exercisable Unexercisable
Acquired on Realized ($)
Exercise (#)
-----------------------------------------------------------------------------------------------------------------------
Edwin H. Wegman - - 94,500 44,500 $46,305 $21,805
-----------------------------------------------------------------------------------------------------------------------
Thomas L. - - 170,800 34,400 $83,692 $16,856
Wegman
-----------------------------------------------------------------------------------------------------------------------
Lawrence - - - - -
Dobroff
-----------------------------------------------------------------------------------------------------------------------
(1) The dollar values are calculated by determining the differences between
$1.49 per share, the fair market value of the Common Stock at December 31, 2004,
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, 2004.
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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, 2004 with management and the Company's independent public accountants,[note
- meeting is scheduled to take place on or about December 5, 2005 - proxy will
not be mailed until either such meeting successfully takes place or a corrective
amended proxy is filed with the SEC](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, 2004 be included in the Company's Annual
Report on Form 10-KSB for filing with the Securities and Exchange Commission.
The audit committee appointed Bloom and Co. CPAs as our independent
auditors for the next fiscal period, the calendar year ending December 31, 2005.
The aggregate fees and expenses incurred for professional services
rendered by our auditors with respect to calendar years ended December 31, 2004
and December 31, 2003 were as follows
CALENDAR CALENDAR
YEAR ENDED YEAR ENDED
12/31/04 12/31/03
Audit fees $70,000 $ 80,000
Tax fees $ - $ 26,000
All other fees $ - $ -
Audit fees include fees for quarterly reviews and the calendar years ended
December 31, 2004 and December 31, 2003.
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
Henry Morgan
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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 CEO, 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 was 7 years, which expired January 31, 2005.
The lease was renewed, on the same terms, for an additional period of 7 years,
expiring on January 31, 2112. The annual rent will increase to $150,000
effective February 1, 2006. 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 of December 31, 2004, 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, 2004 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, 2004 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". No repayments were made during calendar
2004. 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 $80,0000 and $68,000 for the
calendar years ended 2004 and 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, 2005 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, 2006. 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.
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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 2004 form 10KSB is being mailed to
stockholders together with this proxy statement, form of proxy, and notice of
annual meeting of stockholders. 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
President and Secretary
Lynbrook, New York
November 28, 2005
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