BIOSPECIFICS
TECHNOLOGIES CORP.
|
Delaware
|
0-19879
|
11-3054851
|
(State
or other jurisdiction
|
(Commission
file number)
|
(I.R.S.
Employer
|
of
incorporation or organization)
|
|
Identification
No.)
|
Class
of Stock
|
Outstanding
November 2, 2007
|
|
Common
Stock ($.001 par value)
|
5,329,501
|
Page
|
||
ITEM 1.
|
2
|
|
2
|
||
3
|
||
4
|
||
5
|
||
ITEM 2.
|
11
|
|
ITEM 3.
|
17
|
|
18
|
||
ITEM 1.
|
18
|
|
ITEM 2.
|
18
|
|
ITEM 3.
|
18
|
|
ITEM 4.
|
18
|
|
ITEM 5.
|
19
|
|
ITEM 6.
|
19
|
BIOSPECIFICS
TECHNOLOGIES
CORP. AND
SUBSIDIARIES
|
Consolidated
Balance Sheets
|
September
30,
|
||||
2007
|
||||
(unaudited)
|
||||
Assets
|
||||
Current
assets:
|
||||
Cash
and cash equivalents
|
$ |
1,882,232
|
||
Accounts
receivable, net
|
75,314
|
|||
Prepaid
expenses and other current assets
|
113,954
|
|||
Total
current assets
|
2,071,500
|
|||
Property,
plant and equipment, net
|
43,715
|
|||
Total
assets
|
2,115,215
|
|||
Liabilities
and Stockholders' Equity
|
||||
Current
liabilities:
|
||||
Accounts
payable and accrued expenses
|
2,068,131
|
|||
Deferred
revenue
|
1,437,116
|
|||
Accrued
tax and other accrued liabilities of discontinued
operations
|
78,138
|
|||
Total
current liabilities
|
3,583,385
|
|||
Long-term
deferred revenue
|
3,240,912
|
|||
Stockholders'
equity (deficit):
|
||||
Series
A Preferred stock, $.50 par value, 700,000 shares authorized; none
outstanding
|
-
|
|||
Common
stock, $.001 par value; 10,000,000 shares authorized; 5,449,868
shares
issued and outstanding at September 30, 2007
|
5,450
|
|||
Additional
paid-in capital
|
4,542,831
|
|||
Retained
earnings (deficit)
|
(7,937,632 | ) | ||
Treasury
stock, 131,267 shares at cost at September 30, 2007
|
(693,957 | ) | ||
Notes
receivable from former CEO, shareholder and Chairman and other
related
party
|
(625,774 | ) | ||
Total
stockholders' equity (deficit)
|
(4,709,082 | ) | ||
Total
liabilities and stockholders’ equity
|
$ |
2,115,215
|
See
accompanying notes to consolidated financial
statements
|
BIOSPECIFICS
TECHNOLOGIES
CORP. AND
SUBSIDIARIES
|
Consolidated
Statements of Operations
|
(unaudited)
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Revenues:
|
||||||||||||||||
Net
sales
|
$ |
10,128
|
$ |
5,141
|
$ |
22,060
|
$ |
18,817
|
||||||||
Licensing
fees
|
289,279
|
289,279
|
867,837
|
867,837
|
||||||||||||
Consulting
fees
|
70,000
|
70,000
|
210,000
|
163,333
|
||||||||||||
369,407
|
364,420
|
1,099,897
|
1,049,987
|
|||||||||||||
Costs
and expenses:
|
||||||||||||||||
General
and administrative
|
1,001,384
|
769,449
|
2,911,798
|
2,668,315
|
||||||||||||
Research
and development
|
142,582
|
134,194
|
601,001
|
1,127,406
|
||||||||||||
1,143,966
|
903,643
|
3,512,799
|
3,795,721
|
|||||||||||||
Operating
loss from continuing operations
|
(774,559 | ) | (539,223 | ) | (2,412,902 | ) | (2,745,734 | ) | ||||||||
Other
income (expense):
|
||||||||||||||||
Interest
income
|
29,253
|
73,286
|
107,396
|
155,424
|
||||||||||||
Interest
expense
|
-
|
-
|
-
|
(521 | ) | |||||||||||
29,253
|
73,286
|
107,396
|
154,903
|
|||||||||||||
Loss
from continuing operations before benefit (expense) for income
tax
|
(745,306 | ) | (465,937 | ) | (2,305,506 | ) | (2,590,831 | ) | ||||||||
Income
tax benefit (expense)
|
-
|
-
|
(3,600 | ) |
-
|
|||||||||||
Net
income (loss) from continuing operations
|
(745,306 | ) | (465,937 | ) | (2,309,106 | ) | (2,590,831 | ) | ||||||||
Discontinued
operations:
|
||||||||||||||||
Net
loss from discontinued operations
|
-
|
-
|
-
|
(1,115,704 | ) | |||||||||||
Net
gain on the sale of assets
|
-
|
-
|
-
|
3,601,071
|
||||||||||||
Net
income (loss)
|
$ | (745,306 | ) | $ | (465,937 | ) | $ | (2,309,106 | ) | $ | (105,464 | ) | ||||
Basic
net income (loss) per share:
|
||||||||||||||||
From
continuing operations
|
$ | (0.14 | ) | $ | (0.09 | ) | $ | (0.44 | ) | $ | (0.50 | ) | ||||
From
discontinued operations
|
$ |
-
|
$ |
-
|
$ |
-
|
$ |
0.48
|
||||||||
Basic
net income (loss) per share
|
$ | (0.14 | ) | $ | (0.09 | ) | $ | (0.44 | ) | $ | (0.02 | ) | ||||
Diluted
net income (loss) per share:
|
||||||||||||||||
From
continuing operations
|
$ | (0.14 | ) | $ | (0.09 | ) | $ | (0.44 | ) | $ | (0.50 | ) | ||||
From
discontinued operations
|
$ |
-
|
$ |
-
|
$ |
-
|
$ |
0.48
|
||||||||
Diluted
net income (loss) per share
|
$ | (0.14 | ) | $ | (0.09 | ) | $ | (0.44 | ) | $ | (0.02 | ) | ||||
Shares
used in computation of basic net income (loss) per
share
|
5,317,324
|
5,234,429
|
5,276,238
|
5,215,015
|
||||||||||||
Shares
used in computation of diluted net income (loss) per
share
|
5,317,324
|
5,234,429
|
5,276,238
|
5,215,071
|
See
accompanying notes to consolidated financial
statements
|
BIOSPECIFICS
TECHNOLOGIES
CORP. AND
SUBSIDIARIES
|
Consolidated
Statements of Cash Flows
|
(unaudited)
|
Nine
Months Ended
September
30,
|
||||||||
Cash
flows from operating activities:
|
2007
|
2006
|
||||||
Net
loss
|
$ | (2,309,106 | ) | $ | (2,590,831 | ) | ||
Adjustments
to reconcile net loss to net cash provided by operating
activities:
|
||||||||
Depreciation
and amortization
|
24,106
|
16,617
|
||||||
Issuance
of restricted stock for services
|
-
|
7,875
|
||||||
Stock-based
compensation expense
|
477,363
|
485,456
|
||||||
Changes
in operating assets and liabilities:
|
||||||||
Accounts
receivable
|
(24,190 | ) |
46,222
|
|||||
Prepaid
expenses and other current assets
|
(69,541 | ) |
11,059
|
|||||
Accounts
payable and accrued expenses
|
353,234
|
379,560
|
||||||
Employee
bonus plan liability
|
-
|
(6,600 | ) | |||||
Deferred
revenue
|
(702,837 | ) | (606,170 | ) | ||||
Net
cash provided by (used in) operating activities from continuing
operations
|
(2,250,971 | ) | (2,256,810 | ) | ||||
Net
cash provided by (used in) discontinued
operations
|
(321,037 | ) |
1,011,823
|
|||||
Net
cash provided by investing activities from discontinued
operations
|
-
|
6,058,713
|
||||||
Cash
flows from financing activities:
|
||||||||
Proceeds
received from stock option exercises
|
87,062
|
-
|
||||||
Payment
to minority
shareholders
|
-
|
(83,406 | ) | |||||
Net
cash provided by (used in) financing activities from continuing
operations
|
87,062
|
(83,406 | ) | |||||
Increase
in cash and cash equivalents
|
(2,484,946 | ) |
4,730,318
|
|||||
Cash
and cash equivalents at beginning of year
|
4,367,178
|
539,380
|
||||||
Cash
and cash equivalents at end of period
|
$ |
1,882,232
|
$ |
5,269,698
|
||||
Supplemental
disclosures of cash flow information:
|
||||||||
Cash
paid during the periods for:
|
||||||||
Interest
|
$ |
-
|
$ |
521
|
||||
Taxes
|
$ |
3,600
|
$ |
-
|
Supplemental
disclosures of non-cash transactions:
In
March 2007, in full repayment of the $304,398 loan owed to the
Company by
Wilbur Street Corporation (“WSC”), WSC offset $304,398 in back rent due
from the Company in repayment of the loan. The transaction was
recorded by
reducing the rent payable by $304,398 and the receivable from the
former
CEO and Chairman by $98,253 and increasing additional paid in capital
by
$206,145.
For
the year ended December 31, 2006, the Company reduced its liability
to the
employee stock bonus plan by issuing $162,300 of common stock.
The
remaining balance of $6,600 was cancelled.
In
March 2006, we sold our topical collagenase business to DFB. In
order to
effectuate the transaction with DFB, we repurchased all of the
outstanding
shares of ABC-NY and ABC-Curacao held by minority shareholders
in exchange
for a combination of approximately $83,000 in cash and 102,574
restricted
shares of our treasury stock.
See
accompanying notes to consolidated financial
statements
|
|
Three Months Ended
September 30,
|
|
|
Nine
Months Ended
September 30,
|
|
|||||||||||
|
2007
|
|
|
2006
|
|
|
2007
|
|
|
2006
|
|
|||||
Research
and development
|
|
$ |
4,979
|
|
|
$ |
12,576
|
|
|
$ |
9,219
|
|
|
$ |
73,183
|
|
General
and administrative
|
|
|
224,240
|
|
|
|
49,118
|
|
|
|
468,144
|
|
|
|
412,273
|
|
Total
stock-based compensation expense
|
|
$ |
229,219
|
|
|
$ |
61,694
|
|
|
$ |
477,363
|
$ |
485,456
|
Option
|
|
Total Number
of
Shares
|
|
|
Weighted-Average
Exercise
Price
|
Outstanding
as of December 31, 2006
|
|
1,281,125
|
$1.17
|
||
Granted
|
|
227,000
|
$4.50
|
||
Forfeited
|
|
(41,573)
|
$1.87
|
||
Exercised
|
|
(84,052)
|
$1.22
|
||
Expired
|
|
-
|
-
|
||
Outstanding
as of September 30, 2007
|
|
1,382,500
|
$1.41
|
||
|
|
|
|||
Exercisable
as of September 30, 2007
|
|
1,200,875
|
$1.55
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Income
(loss) from discontinued operations
|
$ |
-
|
$ |
-
|
$ |
-
|
$ | (1,115,704 | ) | |||||||
Pre-tax
gain (loss) on disposal of discontinued operations
|
-
|
-
|
-
|
$ |
3,601,071
|
|||||||||||
Income
(loss) from discontinued operations
|
$ |
-
|
$ |
-
|
$ |
-
|
$ |
2,485,367
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Stock
options
|
1,074,531
|
1,125,992
|
1,061,844
|
1,039,691
|
||||||||||||
Warrants
|
10,000
|
10,000
|
10,000
|
10,000
|
||||||||||||
Total
|
1,084,531
|
1,135,992
|
1,071,844
|
1,049,691
|
September
30,
2007
|
December 31,
2006
|
|||||||
Trade
accounts payable and accrued expenses
|
$ |
1,938,352
|
$ |
1,751,014
|
||||
Accrued
legal and other professional fees
|
39,462
|
120,030
|
||||||
Accrued
payroll and related costs
|
90,317
|
148,252
|
||||||
Total
|
$ |
2,068,131
|
$ |
2,019,296
|
Nominee
|
Number
of Shares
|
||
For
|
Against
|
Abstain
|
|
Class
I (2 year term) *
|
|||
Thomas
Wegman
|
4,594,038
|
74,392
|
19,996
|
Paul
Gitman
|
4,552,453
|
115,977
|
19,996
|
Class
II (3 year term) *
|
|||
Henry
Morgan
|
4,554,053
|
114,377
|
19,996
|
Michael
Schamroth
|
4,554,153
|
114,277
|
19,996
|
Class
III (1 year term) *
|
|||
Toby
Wegman
|
4,541,338
|
127,092
|
19,996
|
Mark
Wegman
|
4,593,838
|
74,592
|
19,996
|
Number
of Shares
|
|||
For
|
Against
|
Abstain
|
Broker
Non-Votes
|
4,664,202
|
3,046
|
21,176
|
0
|
|
3.1
|
Articles
of Incorporation of the Registrant (incorporated by reference to
Exhibit
3.1 to the Registrant's Annual Report on Form 10-KSB for the fiscal
years
ended December 31, 2005, 2004 and
2003).
|
|
3.2
|
Bylaws
of the Registrant (incorporated by reference to Exhibit 3.2 to
the
Registrant’s Annual Report on Form 10-KSB for the fiscal years ended
December 31, 2005, 2004 and 2003).
|
BIOSPECIFICS
TECHNOLOGIES CORP.
(Registrant)
|
|
Date: November
13, 2007
|
/s/
Thomas L. Wegman
|
|
Thomas
L. Wegman
President
(Principal
Executive and Financial
Officer)
|