Delaware
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11-3054851
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(State or Other Jurisdiction
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(I.R.S. Employer
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of Incorporation or Organization)
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Identification No.)
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Large accelerated filer ☐
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Accelerated filer ☒
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Non-accelerated filer ☐ (Do not check if a smaller reporting company)
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Smaller reporting company ☐
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Class of Stock
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Outstanding November 5, 2015
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Common Stock ($.001 par value)
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6,918,214
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Page
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PART I – FINANCIAL INFORMATION
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||
ITEM 1.
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Financial Statements
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4
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Unaudited Condensed Consolidated Financial Statements | 4 | |
4
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||
5
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||
6
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||
7
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||
ITEM 2.
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14
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ITEM 3.
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22
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ITEM 4.
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23
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PART II – OTHER INFORMATION
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||
ITEM 1.
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23
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ITEM 1A.
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23
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ITEM 2.
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23
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ITEM 6.
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24
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25
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September 30,
2015
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December 31,
2014
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|||||||
(unaudited)
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(audited)
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|||||||
Assets
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||||||||
Current assets:
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||||||||
Cash and cash equivalents
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$
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7,488,076
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$
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9,810,816
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||||
Short term investments
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23,442,395
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10,900,436
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||||||
Accounts receivable, net
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4,211,810
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2,938,731
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||||||
Income tax receivable
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1,174,237
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653,116
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||||||
Investment interest receivable
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137,258
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48,316
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||||||
Deferred tax asset
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16,907
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16,907
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||||||
Deferred royalty buy-down
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802,094
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569,641
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||||||
Prepaid expenses
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258,057
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210,847
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||||||
Total current assets
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37,530,834
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25,148,810
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||||||
Long-term Investments
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1,894,000
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1,250,000
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||||||
Deferred royalty buy-down – long term, net
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2,618,574
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3,271,120
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||||||
Deferred tax assets –long term
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620,653
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1,061,864
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||||||
Patent costs, net
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285,087
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295,030
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||||||
Total assets
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$
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42,949,148
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$
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31,026,824
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||||
Liabilities and stockholders’ Equity
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||||||||
Current liabilities:
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||||||||
Accounts payable and accrued expenses
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651,068
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543,696
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||||||
Deferred revenue
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49,378
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49,378
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||||||
Accrued liabilities of discontinued operations
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78,138
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78,138
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||||||
Total current liabilities
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778,584
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671,212
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||||||
Long-term deferred revenue
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61,723
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98,757
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||||||
Stockholders’ equity:
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||||||||
Series A Preferred stock, $.50 par value, 700,000 shares authorized; none outstanding
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-
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-
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||||||
Common stock, $.001 par value; 10,000,000 shares authorized; 7,280,167 and 7,062,209 shares issued, 6,921,137 and 6,730,622 outstanding as of September 30, 2015 and December 31, 2014, respectively
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7,280
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7,062
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||||||
Additional paid-in capital
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31,134,211
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25,059,458
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||||||
Retained earnings
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16,580,061
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9,620,978
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||||||
Treasury stock, 359,030 and 331,587 shares at cost as of September 30, 2015 and December 31, 2014, respectively
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(5,612,711
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)
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(4,430,643
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)
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||||
Total stockholders’ equity
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42,108,841
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30,256,855
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||||||
Total liabilities and stockholders’ equity
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$
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42,949,148
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$
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31,026,824
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Three Months Ended
September 30,
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Nine Months Ended
September 30,
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|||||||||||||||
2015
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2014
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2015
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2014
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|||||||||||||
Revenues:
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||||||||||||||||
Royalties
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$
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5,277,494
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$
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3,484,975
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$
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15,574,234
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$
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8,850,067
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||||||||
Licensing revenues
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1,012,345
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512,344
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1,037,034
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546,909
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||||||||||||
Total Revenues
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6,289,839
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3,997,319
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16,611,268
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9,396,976
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||||||||||||
Costs and expenses:
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||||||||||||||||
Research and development
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258,837
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240,093
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755,038
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909,129
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||||||||||||
General and administrative
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1,709,044
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1,650,315
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5,307,431
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4,387,134
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||||||||||||
Total Cost and Expenses
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1,967,881
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1,890,408
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6,062,469
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5,296,263
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||||||||||||
Operating income
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4,321,958
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2,106,911
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10,548,799
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4,100,713
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||||||||||||
Other income:
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||||||||||||||||
Interest income
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26,744
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8,121
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58,946
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22,444
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||||||||||||
Other income
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1,477
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15,468
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6,110
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30,745
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||||||||||||
28,221
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23,589
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65,056
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53,189
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|||||||||||||
Income before income tax expense
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4,350,179
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2,130,500
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10,613,855
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4,153,902
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||||||||||||
Income tax expense
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(1,479,200
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)
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(735,737
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)
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(3,654,772
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)
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(1,427,184
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)
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||||||||
Net income
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$
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2,870,979
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$
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1,394,763
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$
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6,959,083
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$
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2,726,718
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||||||||
Basic net income per share
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$
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0.42
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$
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0.21
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$
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1.02
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$
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0.42
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||||||||
Diluted net income per share
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$
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0.39
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$
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0.20
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$
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0.96
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$
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0.39
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||||||||
Shares used in computation of basic net income per share
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6,892,637
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6,489,758
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6,797,506
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6,433,013
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||||||||||||
Shares used in computation of diluted net income per share
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7,316,287
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7,074,154
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7,259,338
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7,039,225
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Nine Months Ended
September 30,
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||||||||
Cash flows from operating activities:
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2015
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2014
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||||||
Net income
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$
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6,959,083
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$
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2,726,718
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||||
Adjustments to reconcile net income to net cash provided by operating activities:
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||||||||
Amortization
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647,071
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196,676
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||||||
Stock-based compensation expense
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72,305
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16,062
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||||||
Deferred tax expense
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441,211
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22,241
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||||||
Gain on the sale of fixed assets
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-
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(1,150
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)
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|||||
Changes in operating assets and liabilities:
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||||||||
Accounts receivable
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(1,273,079
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)
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1,924,724
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|||||
Income tax receivable
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(521,121
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)
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(495,443
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)
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Investment interest receivable
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(88,942
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)
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(9,535
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)
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Prepaid expenses
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(47,210
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)
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(56,226
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)
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Patent costs
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(24,204
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)
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(186,138
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)
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Accounts payable and accrued expenses
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107,372
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(117,049
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)
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|||||
Deferred revenue
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(37,034
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)
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(46,910
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)
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Net cash provided by operating activities
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6,235,452
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3,973,970
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||||||
Cash flows from investing activities:
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||||||||
Maturity of marketable investments
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11,043,544
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6,015,958
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||||||
Purchases of marketable investments
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(24,422,334
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)
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(6,843,677
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)
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Proceeds from sale of fixed asset
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-
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1,150
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||||||
Net cash used in investing activities
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(13,378,790
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)
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(826,569
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)
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||||
Cash flows from financing activities:
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||||||||
Proceeds from stock option exercises
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2,813,984
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204,550
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||||||
Payments for repurchase of common stock
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(1,182,068
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)
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(750,598
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)
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||||
Excess tax benefits from share-based payment arrangements
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3,188,682
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1,485,107
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||||||
Net cash provided by financing activities
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4,820,598
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939,059
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||||||
(Decrease) increase in cash and cash equivalents
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(2,322,740
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)
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4,086,460
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|||||
Cash and cash equivalents at beginning of year
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9,810,816
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5,624,860
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||||||
Cash and cash equivalents at end of period
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$
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7,488,076
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$
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9,711,320
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||||
Supplemental disclosures of cash flow information:
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||||||||
Cash paid during the year for:
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||||||||
Interest
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$
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-
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$
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-
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||||
Taxes
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$
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546,000
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$
|
415,000
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Shares
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Weighted
Average
Exercise
Price
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Weighted
Average
Remaining
Contractual
Term
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Aggregate
Intrinsic
Value
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|||||||||||||
Outstanding at January 1, 2015
|
759,958
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$
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11.04
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3.12
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$
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23,483,235
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||||||||||
Grants
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30,000
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37.64
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9.56
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|||||||||||||
Exercised
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(217,958
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)
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12.91
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-
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||||||||||||
Forfeitures or expirations
|
-
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-
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-
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|||||||||||||
Outstanding at September 30, 2015
|
572,000
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$
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11.72
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2.72
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$
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18,201,960
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||||||||||
Exercisable at September 30, 2015
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514,500
|
$
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9.44
|
2.19
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$
|
17,546,135
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
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|||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||
Stock options
|
20,000
|
20,000
|
20,000
|
60,000
|
September 30,
2015
|
December 31,
2014
|
|||||||
Trade accounts payable and accrued expenses
|
$
|
423,738
|
$
|
309,188
|
||||
Accrued legal and other professional fees
|
48,930
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65,205
|
||||||
Accrued payroll and related costs
|
178,400
|
169,303
|
||||||
Total
|
$
|
651,068
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$
|
543,696
|
September 30,
2015
|
December 31,
2014
|
|||||||
Patents
|
$
|
695,530
|
$
|
671,326
|
||||
Accumulated Amortization
|
(410,443
|
)
|
(376,296
|
)
|
||||
$
|
285,087
|
$
|
295,030
|
2015
|
$
|
11,000
|
||
2016
|
37,000
|
|||
2017
|
37,000
|
|||
2018
|
37,000
|
|||
2019
|
37,000
|
|||
Thereafter
|
$
|
126,000
|
Three Months Ended
September 30, 2015
|
Three Months Ended
September 30, 2014
|
|||||||
Program
|
||||||||
Canine Lipoma
|
$
|
-
|
$
|
45,127
|
||||
Human Lipoma
|
68,606
|
61,060
|
||||||
Uterine Fibroids
|
19,915
|
5,378
|
||||||
Other
|
170,316
|
128,528
|
· | the nature, timing and estimated costs of the efforts necessary to complete the development of our drug candidate projects; |
· | the anticipated completion dates for our drug candidate projects; |
· | the scope, rate of progress and cost of our clinical trials that we are currently running or may commence in the future with respect to our drug candidate projects; |
· | the scope, rate of progress of our pre-clinical studies and other R&D activities related to our drug candidate projects; |
· | clinical trial results for our drug candidate projects; |
· | the cost of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights relating to our drug candidate projects; |
· | the terms and timing of any strategic alliance, licensing and other arrangements that we have or may establish in the future relating to our drug candidate projects; |
· | the cost and timing of regulatory approvals with respect to our drug candidate projects; and |
· | the cost of establishing clinical supplies for our drug candidate projects. |
Nine Months Ended
September 30, 2015
|
Nine Months Ended
September 30, 2014
|
|||||||
Program
|
||||||||
Canine Lipoma
|
$
|
-
|
$
|
252,667
|
||||
Human Lipoma
|
193,704
|
173,411
|
||||||
Uterine Fibroids
|
26,858
|
73,569
|
||||||
Other
|
534,476
|
409,482
|
· | the nature, timing and estimated costs of the efforts necessary to complete the development of our drug candidate projects; |
· | the anticipated completion dates for our drug candidate projects; |
· | the scope, rate of progress and cost of our clinical trials that we are currently running or may commence in the future with respect to our drug candidate projects; |
· | the scope, rate of progress of our pre-clinical studies and other R&D activities related to our drug candidate projects; |
· | clinical trial results for our drug candidate projects; |
· | the cost of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights relating to our drug candidate projects; |
· | the terms and timing of any strategic alliance, licensing and other arrangements that we have or may establish in the future relating to our drug candidate projects; |
· | the cost and timing of regulatory approvals with respect to our drug candidate projects; and |
· | the cost of establishing clinical supplies for our drug candidate projects. |
Period
|
Total Number of
Shares
Purchased
(3)
|
Average
Price Paid
Per Share
(4)
|
Total Number of
Shares
Purchased as
Part of Publicly
Announced Plan
|
Maximum
Number (or
Dollar Value) of
Shares that may
yet be Purchased
under the Plan
|
||||||||||||
$
|
469,266
|
(1)
|
||||||||||||||
July 1, 2015 – July 31, 2015
|
990
|
$
|
54.50
|
214,550
|
415,308
|
|||||||||||
August 1, 2015 – August 16, 2015
|
3,260
|
51.35
|
217,810
|
247,909
|
||||||||||||
$
|
2,500,000
|
(2)
|
||||||||||||||
August 17, 2015 – August 31, 2015
|
3,500
|
49.49
|
221,310
|
2,326,973
|
||||||||||||
September 1, 2015 – September 30, 2015
|
1,750
|
$
|
49.36
|
223,060
|
$
|
2,240,409
|
(1) | On December 10, 2013, we announced that our Board of Directors had reauthorized the repurchase of up to $2.0 million of our common stock under the stock repurchase program. |
(2) | On August 17, 2015, we announced that our Board of Directors had authorized the repurchase of up to $2.5 million of our common stock under the stock repurchase program. |
(3) | The purchases were made in open-market transactions in compliance with rule 10b-18 or under the company’s 10b-18 plan. |
(4) | Includes commissions paid, if any, related to the stock repurchase transactions. |
Amended Agreement of Lease, dated as of August 14, 2015, among the Company, ABC-NY and 35 Wilbur Street Associates.
|
||
Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rule13a-14(a)/15d-14(a).
|
||
Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of
|
||
101*
|
The following materials from BioSpecifics Technologies Corp.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015, are formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheet, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed
Consolidated Statements of Cash Flows, and (iv) the Notes to the
Condensed Consolidated Financial Statements.
|
BIOSPECIFICS TECHNOLOGIES CORP.
|
|
(Registrant)
|
|
Date: November 9, 2015
|
/s/ Thomas L. Wegman
|
Thomas L. Wegman
|
|
President, Principal Executive Officer and
|
|
Principal Financial Officer |
1) | The landlord will take occupancy of an additional 1,000 square feet (SF) in the front building as discussed. |
2) | The gross dollar amount for the rent will remain at $12,000 per month for the remaining square footage of approximately 12,150 SF less the adjustment for the 2,300 SF given up in April 2014 of $1,786.00 per month, for a net of $10,213.20 per month, less 14.89% of the utilities. |
3) | The Tenant has the option to cancel this lease, without penalty, by providing the Landlord with three (3) months’ prior written notice at any time during the Term of this lease. |
Thomas Wegman, President
|
Richard Arote
|
||
Advance Biofactures Corp. | 35 Wilbur Street Assoc., LLC | ||
/s/ Thomas Wegman | /s/ Richard Arote |
1. | I have reviewed this report on Form 10-Q for the quarterly period ended September 30, 2015 of BioSpecifics Technologies Corp.; |
2. | Based on my knowledge, the report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting. |
/s/ Thomas L. Wegman
|
|
Thomas L. Wegman
|
|
President, Principal Executive Officer and Principal Financial Officer
|
1. | The Company’s report on Form 10-Q for the quarterly period ended September 30, 2015 (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act); and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company. |
/s/ Thomas L. Wegman
|
|
Thomas L. Wegman
|
|
President, Principal Executive Officer and Principal Financial Officer
|