BIOSPECIFICS TECHNOLOGIES CORP.
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Delaware
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11-3054851
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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35 Wilbur Street, Lynbrook, NY
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11563
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(Address of principal executive offices)
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(Zip Code)
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Title of Each Class
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Trading Symbol
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Name of Exchange on Which Registered
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||
Common Stock, par value $0.001 per share
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BSTC
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The Nasdaq Global Market
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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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Emerging growth company ☐
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Page
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5 | |
•
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the ability of Endo International plc’s (“Endo”) to achieve its future growth initiatives with regard to Dupuytren’s Contracture and Peyronie’s disease;
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•
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whether the U.S. Food and Drug Administration (“FDA”) will approve collagenase histolyticum for the treatment of cellulite;
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•
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Endo’s interest in currently licensed indications, including frozen shoulder (adhesive capsulitis) and plantar fibromatosis;
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•
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Endo’s interest in currently unlicensed indications, including uterine fibroids;
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•
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whether additional clinical studies, if conducted, in currently unapproved indications, will demonstrate sufficient safety and efficacy to support regulatory approval;
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the projected receipt of payments from Endo; and
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•
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the strength of the Company’s intellectual property portfolio.
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•
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Phase 1—Studies are initially conducted in healthy human volunteers or subjects with the target disease or condition and test the product candidate for safety, dosage tolerance,
structure‑activity relationships, mechanism of action, absorption, metabolism, distribution, and excretion. If possible, Phase 1 trials may also be used to gain an initial indication of product effectiveness.
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•
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Phase 2—Controlled studies are conducted in limited subject populations with a specified disease or condition to evaluate preliminary efficacy, identify optimal dosages, dosage tolerance and
schedule, possible adverse effects and safety risks, and expanded evidence of safety.
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•
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Phase 3—These adequate and well‑controlled clinical trials are undertaken in expanded subject populations, generally at geographically dispersed clinical trial sites, to generate enough data to
provide statistically significant evidence of clinical efficacy and safety of the product for approval, to establish the overall risk‑benefit profile of the product, and to provide adequate information for the labeling of the product.
Typically, two Phase 3 trials are required by the FDA for product approval.
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Patent No.
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Patent Expiration
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Relevant
Product/Technology
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Ownership
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Jurisdiction
Where Granted
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|||||
7,811,560
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July 12, 2028
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XIAFLEX®
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AUXILIUM US HOLDINGS, LLC
AUXILIUM INTERNATIONAL HOLDINGS, INC. ACTIENT HOLDINGS LLC ACTIENT PHARMACEUTICALS LLC SLATE PHARMACEUTICALS, INC. TIMM MEDICAL HOLDINGS, LLC ACTIENT THERAPEUTICS LLC 70 MAPLE AVENUE, LLC TIMM MEDICAL TECHNOLOGIES, INC. AUXILIUM PHARMACEUTICALS, INC. |
United States
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|||||
7,854,929
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January 19, 2026
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Method of treating lateral epicondylitis
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Research Foundation for the State University of New York
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United States
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8,323,643
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November 17, 2027
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Method of treating adhesive capsulitis
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Research Foundation for the State University of New York
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United States
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9,744,138
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March 14, 2034
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Method of treating uterine fibroids with collagenase and thermally responsive polymer
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BSTC, Duke University, North Carolina Central University
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United States
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|||||
10,071,143
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May 5, 2028
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Method of treating carpal tunnel syndrome
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Research Foundation for the State University of New York
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United States
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10,119,131
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September 9, 2032
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Method for fermenting clostripain-producing Clostridium histolyticum in peptone medium to produce collagenase
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BSTC
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United States
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|||||
10,123,959
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February 7, 2027
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Method of treating cellulite
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Research Foundation for the State University of New York
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United States
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10,272,140
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January 14, 2035
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Thermosensitive Hydrogel Collagenase Formulations
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BioSpecifics Technologies Corp.
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United States
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10,369,110
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March 14, 2034
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Treatment Method and Product for Uterine Fibroids Using Purified Collagenase |
BioSpecifics Technologies Corporation and Duke University
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United States
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•
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perceived safety and efficacy;
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•
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convenience and ease of administration;
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incidence and severity of adverse side effects in both clinical trials and commercial use;
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the information in the approval product label, including the indications and any limitations and warnings;
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distribution and user restrictions;
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current standard of care;
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availability of alternative treatments or products, including biosimilars;
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•
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cost effectiveness and pricing;
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•
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the adequacy and effectiveness of Endo’s sales force and that of any partner’s sales force;
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Endo’s ability to establish and maintain agreements with wholesalers, distributors, group purchasing organizations, pharmacy benefit managers, and similar organizations on commercially reasonable terms;
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the adequacy and effectiveness of Endo’s production, distribution and marketing capabilities and those of Endo’s international partners;
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publicity concerning Endo’s products or competing products; and
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existence and level of third-party or government coverage or reimbursement for XIAFLEX® for the treatment of DC and PD and the price concessions required to obtain coverage.
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Endo’s ability to manufacture and commercialize XIAFLEX® for which we would receive milestone, mark-up on cost of goods sold and royalty payments;
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The ability of Endo’s sublicensees to commercialize XIAFLEX® in their respective territories;
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the amount actually owed by us to Endo for certain patent costs;
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Endo’s ability to successfully develop and receive regulatory approval for indications that it has exercised its opt-in rights for;
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the scope, rate of progress, cost and results of our clinical trials on additional indications, including uterine fibroids, for which Endo could exercise its opt-in to acquire its rights;
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Endo’s ability to abide by and ensure third party compliance with the many regulatory requirements applicable to pharmaceutical products;
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the terms and timing of any future collaborative, licensing, co-promotion and other arrangements that we may establish;
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the cost of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights or defending against any other litigation; and
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the extent to which Endo may reallocate priority away from XIAFLEX®.
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changes to the regulatory approval process for product candidates;
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obtaining regulatory approval to commence or continue a clinical trial;
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timing of responses required from regulatory authorities;
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negotiating acceptable clinical trial agreement terms with prospective contract research organizations, investigators or trial sites;
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obtaining institutional review board, or equivalent, approval to conduct or continue a clinical trial at a prospective site;
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recruiting subjects to participate in a clinical trial and retaining subjects in the study;
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competition in recruiting clinical investigators;
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shortage or lack of availability of clinical trial supplies from external and internal sources;
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the need to repeat clinical trials as a result of inconclusive results or poorly executed testing, or to conduct additional clinical or preclinical trials or analyses;
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Clinical or pre-clinical trials, as well as commercial experience with similar products, may reveal undesirable side effects, which may require that clinical trials be halted or modified;
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failure to validate a patient-reported outcome questionnaire;
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the placement of a clinical hold on a study by regulatory authorities, the suspension of a study by an institutional review board, or a decision to suspend or terminate a study by us or our partners;
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the failure of third parties conducting and overseeing the operations of our clinical trials to perform their contractual or regulatory obligations in a timely fashion;
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exposure of clinical trial subjects to unexpected and unacceptable health risks or noncompliance with regulatory requirements, which may result in suspension of the trial; and
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manufacturing and/or distribution issues associated with clinical supplies.
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clinical trials may show product candidates to be ineffective or not as effective as anticipated or to have harmful side effects or unforeseen results;
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experience with marketed versions of product candidates may reveal harmful side effects or other unforeseen results;
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regulatory authorities may disagree with study design, conduct, and/or data interpretation from preclinical and clinical trials, or may find that a product candidate’s benefits do not outweigh its risks;
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regulatory authorities may take longer than anticipated to make a decision on the product candidates;
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regulatory authorities may require that we or our partners perform additional clinical or pre-clinical trials, or gather additional manufacturing information;
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our, our partners, or third party contractor failures to abide by the applicable regulatory requirements or study protocol;
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regulatory authorities may fail to approve or subsequently find fault with the product candidate manufacturing processes or the contract manufacturer’s manufacturing facility for clinical and future
commercial supplies;
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regulatory authorities may require that we or our partners undertake post-market testing, surveillance, or implement a REMS to maintain regulatory approval;
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product candidates may fail to receive regulatory approvals required to bring the products to market;
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manufacturing costs, the inability to scale up to produce supplies for clinical trials meeting the necessary quality standards, or other factors may make our product candidates uneconomical;
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changes in approval policies, data standards, statutes, and regulations; and
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the proprietary rights of others and their competing products and technologies may prevent product candidates from being effectively commercialized or from obtaining exclusivity.
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the nature, timing and estimated costs of the efforts necessary to complete the development of our drug candidate projects and submit marketing applications;
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the anticipated completion dates for our drug candidate projects;
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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;
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the scope, rate of progress of our preclinical studies and other R&D activities related to our drug candidate projects;
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clinical trial results for our drug candidate projects;
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the cost of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights relating to our drug candidate projects;
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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;
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the cost and timing of regulatory approvals with respect to our drug candidate projects; and
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the cost of establishing clinical supplies for our drug candidate projects.
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restrictions on our products or the manufacturing processes of such products;
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warning letters, untitled letters and cyber letters;
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withdrawal of a product from the market;
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voluntary or mandatory recall of a product;
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fines;
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•
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suspension or withdrawal of regulatory approvals for a product;
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refusal to permit the import or export of our products;
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refusal to approve pending applications or supplements to approved applications that we submit;
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denial of permission to file an application or supplement in a jurisdiction;
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debarment, exclusion from participation in federal healthcare programs, exclusion or debarment from government contracting, consent decrees, or corporate integrity agreements;
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product seizure; and
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injunctions or the imposition of civil or criminal penalties against us.
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we may fail to seek patent protection for inventions that are important to our success;
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our pending patent applications may not result in issued patents;
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we cannot be certain that we were the first to invent the inventions covered by pending pre-America Invents Act patent applications or that we were the first to file such applications and, if we are not, we
may be subject to priority disputes;
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we may be required to disclaim part or all of the term of certain patents or all of the term of certain patent applications;
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we may file patent applications but have claims restricted or we may not be able to supply sufficient data to support our claims and, as a result, may not obtain the original claims desired or we may
receive restricted claims. Alternatively, it is possible that we may not receive any patent protection from an application;
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•
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we could inadvertently abandon a patent or patent application, resulting in the loss of protection of certain intellectual property rights in a certain country. We, our collaborators or our patent counsel
may take action resulting in a patent or patent application becoming abandoned which may not be able to be reinstated or if reinstated, may suffer patent term adjustments;
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•
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the claims of our issued patents or patent applications when issued may not cover our products;
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no assurance can be given that our patents would be declared by a court to be valid or enforceable or that a competitor’s technology or product would be found by a court to infringe our patents. Our patents
or patent applications may be challenged by third parties in patent litigation or in proceedings before the USPTO or its foreign counterparts, and may ultimately be declared invalid or unenforceable, or narrowed in scope;
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•
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there may be prior art of which we are not aware that may affect the validity or enforceability of a patent claim. There also may be prior art of which we are aware, but which we do not believe affects the
validity or enforceability of a claim, which may, nonetheless, ultimately be found to affect the validity or enforceability of a claim;
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•
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third parties may develop products which have the same or similar effect as our products without infringing our patents. Such third parties may also intentionally circumvent our patents by means of
alternate designs or processes or file applications or be granted patents that would block or hurt our efforts;
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•
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there may be dominating patents relevant to our product candidates of which we are not aware;
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•
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our patent counsel, lawyers or advisors may have given us, or may in the future give us incorrect advice or counsel. Opinions from such patent counsel or lawyers may not be correct or may be based on
incomplete facts;
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•
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obtaining regulatory approval for biopharmaceutical products is a lengthy and complex process, and as a result, any patents covering our product candidates may expire before, or shortly after such product
candidates are approved and commercialized;
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•
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the patent and patent enforcement laws of some foreign jurisdictions do not protect intellectual property rights to the same extent as laws in the U.S., and many companies have encountered significant
difficulties in protecting and defending such rights in foreign jurisdictions. If we encounter such difficulties or we are otherwise precluded from effectively protecting our intellectual property rights in foreign jurisdictions, our
business prospects could be substantially harmed; and
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•
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we may not develop additional proprietary technologies that are patentable.
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•
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results of our clinical trials;
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•
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failure of any product candidates we have licensed to Endo to achieve commercial success;
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•
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failure of Endo to exercise any opt in rights to new indications;
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•
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regulatory developments in the U.S. and foreign countries;
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•
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developments or disputes concerning patents or other proprietary rights;
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•
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litigation involving us or our general industry, or both;
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•
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future sales of our common stock by the estate of our former Chairman and Chief Executive Officer, directors, officers, or others;
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•
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changes in the structure of healthcare payment systems, including developments in price control legislation;
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•
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departure of key personnel;
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•
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termination of agreements with our licensees or their sublicensees;
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•
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announcements of material events by those companies that are our competitors or perceived to be similar to us;
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•
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changes in estimates of our financial results;
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•
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investors’ general perception of us;
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•
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general economic, industry and market conditions; and
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•
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the reallocation by Endo of its priorities away from XIAFLEX®.
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•
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provide for a classified Board;
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•
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give our Board the ability to designate the terms of and issue new series of preferred stock without stockholder approval, commonly referred to as “blank check” preferred stock, with rights senior to those
of our common stock;
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•
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limit the ability of the stockholders to call special meetings; and
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•
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impose advance notice requirements on stockholders concerning the election of directors and other proposals to be presented at stockholder meetings.
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In February 2011 to increase the threshold from 15% to 18% and extend the expiration date for an additional two years, to May 31, 2014.
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•
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In February 2014, to extend the term for an additional two years, to May 31, 2016.
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In May 2016, to extend the term for an additional two years, to May 31, 2018.
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•
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In May 2018, to extend the term for an additional two years, to May 31, 2020.
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Month
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Total Number
of Shares
Purchased (1)
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Average
Price Paid
Per Share(2)
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Total Number of
Shares
Purchased as
Part of Publicly
Announced Plan
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Maximum
Dollar Value of
Shares that may
yet be
Purchased
under the Plan(3)
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||||||||||||
Remaining balance as of September 30, 2019
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$
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3,642,711
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||||||||||||||
October 1, 2019 – October 31, 2019
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3,591
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$
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49.85
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9,800
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3,463,703
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|||||||||||
November 1, 2019 – November 30, 2019
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1,070
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51.11
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10,870
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3,409,016
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||||||||||||
December 1, 2019 – December 31, 2019
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517
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$
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57.39
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11,387
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$
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3,379,349
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(1)
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The purchases were made in open-market transactions in compliance with Exchange Act Rule 10b-18 or under the Company’s 10b-18 plan.
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(2)
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Includes commissions paid, if any, related to the stock repurchase transactions.
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(3)
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On May 23, 2019, we announced that our Board of Directors had authorized the repurchase of up to $4.0 million of our common stock under the stock repurchase program, which program is not subject to an expiration date.
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Year Ended December 31
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||||||||
2019
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2018
|
|||||||
Royalties
|
$
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38,187,755
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$
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32,921,764
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||||
Licensing revenue
|
-
|
39,679
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||||||
Total revenues
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$
|
38,187,755
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$
|
32,961,443
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Year Ended
December 31,
2019
|
Year Ended
December 31,
2018
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|||||||
Program
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||||||||
Uterine Fibroids
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$
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206,937
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$
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311,863
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||||
Pre-clinical/other research projects
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383,394
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444,913
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||||||
Total research and development expenses
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$
|
590,331
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$
|
756,776
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•
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the nature, timing and estimated costs of the efforts necessary to complete the development of our drug candidate projects;
|
•
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the anticipated completion dates for such drug candidate projects;
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•
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the scope, rate of progress and cost of such clinical trials that we may commence in the future with respect to such drug candidate projects;
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•
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the scope, rate of progress of preclinical studies and other R&D activities related to such drug candidate projects;
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•
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clinical trial results for such drug candidate projects;
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•
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the cost of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights relating to such drug candidate projects;
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•
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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;
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•
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costs relating to future product opportunities;
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•
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the cost and timing of regulatory approvals with respect to such drug candidate projects; and
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•
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the cost of establishing clinical supplies for our drug candidate projects.
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a)
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The following documents are filed as part of this Annual Report:
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(1)
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Consolidated Financial Statements (See Index to Consolidated Financial Statements on page F-1)
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(2)
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Financial Statement Schedules
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(3)
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Exhibits
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b)
|
Exhibits
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December 31,
|
||||||||
2019
|
2018
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
4,999,183
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$
|
13,176,452
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||||
Short term investments
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84,239,918
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67,707,143
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||||||
Accounts receivable
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19,065,919
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16,518,687
|
||||||
Deferred royalty buy-down
|
-
|
184,931
|
||||||
Prepaid expenses and other current assets
|
966,456
|
646,749
|
||||||
Total current assets
|
109,271,476
|
98,233,962
|
||||||
Long-term investments
|
16,569,024
|
1,099,834
|
||||||
Deferred tax assets, net
|
-
|
313,768
|
||||||
Operating lease right-of-use asset
|
239,491
|
-
|
||||||
Patent costs, net
|
573,277
|
444,478
|
||||||
Total assets
|
$
|
126,653,268
|
$
|
100,092,042
|
||||
Liabilities and Stockholders' Equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable and accrued expenses
|
$
|
998,409
|
$
|
1,798,588
|
||||
Income tax payable
|
354,984
|
704,934
|
||||||
Current portion of lease obligation
|
69,099
|
-
|
||||||
Total current liabilities
|
1,422,492
|
2,503,522
|
||||||
Lease obligation
|
167,014
|
-
|
||||||
Deferred tax liability, net
|
572,660
|
-
|
||||||
Commitments and contingencies (Note 10)
|
||||||||
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; 7,813,230 and 7,738,167 shares issued, 7,339,578 and 7,275,902 outstanding at December 31, 2019 and 2018, respectively
|
7,813
|
7,738
|
||||||
Additional paid-in capital
|
39,355,797
|
36,302,446
|
||||||
Retained earnings
|
96,646,527
|
72,176,719
|
||||||
Treasury stock, 473,652 and 462,265 shares at cost as of December 31, 2019 and 2018
|
(11,519,035
|
)
|
(10,898,383
|
)
|
||||
Total stockholders' equity
|
124,491,102
|
97,588,520
|
||||||
Total liabilities and stockholders’ equity
|
$
|
126,653,268
|
$
|
100,092,042
|
Years Ended December 31,
|
||||||||
2019
|
2018
|
|||||||
Revenues:
|
||||||||
Royalties
|
$
|
38,187,755
|
$
|
32,921,764
|
||||
Licensing revenue
|
-
|
39,679
|
||||||
Total revenues
|
$
|
38,187,755
|
32,961,443
|
|||||
Costs and expenses:
|
||||||||
Research and development
|
590,331
|
756,776
|
||||||
General and administrative
|
9,285,372
|
8,805,989
|
||||||
Total costs and expenses
|
9,875,703
|
9,562,765
|
||||||
Operating income
|
28,312,052
|
23,398,678
|
||||||
Other income:
|
||||||||
Interest income
|
1,986,855
|
1,294,651
|
||||||
Other (expense) income
|
(259
|
)
|
103,948
|
|||||
1,986,596
|
1,398,599
|
|||||||
Income before income tax
|
30,298,648
|
24,797,277
|
||||||
Income tax provision
|
(5,828,840
|
)
|
(4,744,008
|
)
|
||||
Net income
|
$
|
24,469,808
|
$
|
20,053,269
|
||||
Earnings per common share:
|
||||||||
Basic
|
$
|
3.35
|
$
|
2.77
|
||||
Diluted
|
$
|
3.33
|
$
|
2.73
|
||||
Shares used in calculation of net income per common share:
|
||||||||
Basic
|
7,315,144
|
7,242,212
|
||||||
Diluted
|
7,351,385
|
7,333,368
|
Common Stock
|
Additional
|
Stockholders’
|
||||||||||||||||||||||
Shares
|
Amount |
Paid in
Capital
|
Retained
Earnings
|
Treasury
Stock
|
Equity
Total
|
|||||||||||||||||||
Balances - December 31, 2017
|
7,600,167
|
$
|
7,600
|
$
|
33,468,323
|
$
|
41,939,115
|
$
|
(7,898,200
|
)
|
$
|
67,516,838
|
||||||||||||
Adjustments to prior periods from adopting ASC606
|
-
|
-
|
-
|
10,184,335
|
-
|
10,184,335
|
||||||||||||||||||
Issuance of common stock upon stock option exercise
|
138,000
|
138
|
2,570,692
|
-
|
-
|
2,570,830
|
||||||||||||||||||
Stock compensation expense
|
-
|
-
|
263,431
|
-
|
-
|
263,431
|
||||||||||||||||||
Repurchases of common stock
|
-
|
-
|
-
|
-
|
(3,000,183
|
)
|
(3,000,183
|
)
|
||||||||||||||||
Net income
|
-
|
-
|
-
|
20,053,269
|
-
|
20,053,269
|
||||||||||||||||||
Balances - December 31, 2018
|
7,738,167
|
$
|
7,738
|
$
|
36,302,446
|
$
|
72,176,719
|
$
|
(10,898,383
|
)
|
$
|
97,588,520
|
||||||||||||
Issuance of common stock upon stock option exercise
|
75,063
|
75
|
2,191,741
|
-
|
-
|
2,191,816
|
||||||||||||||||||
Stock compensation expense
|
-
|
-
|
861,610
|
-
|
-
|
861,610
|
||||||||||||||||||
Repurchases of common stock
|
-
|
-
|
-
|
-
|
(620,652
|
)
|
(620,652
|
)
|
||||||||||||||||
Net income
|
-
|
-
|
-
|
24,469,808
|
-
|
24,469,808
|
||||||||||||||||||
Balances - December 31, 2019
|
7,813,230
|
$
|
7,813
|
$
|
39,355,797
|
$
|
96,646,527
|
$
|
(11,519,035
|
)
|
$
|
124,491,102
|
Years Ended December 31,
|
||||||||
Cash flows from operating activities:
|
2019
|
2018
|
||||||
Net income
|
$
|
24,469,808
|
$
|
20,053,269
|
||||
Adjustments to reconcile net income to net cash provided in operating activities:
|
||||||||
Amortization
|
314,158
|
2,432,941
|
||||||
Stock-based compensation expense
|
861,610
|
263,431
|
||||||
Deferred tax expense
|
175,084
|
90,176
|
||||||
Extinguishment of accrued liabilities
|
-
|
(78,138
|
)
|
|||||
Non-cash lease expense
|
3,385
|
-
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(2,547,232
|
)
|
(4,308,855
|
)
|
||||
Income tax payable
|
356,969
|
(763,740
|
)
|
|||||
Prepaid expenses and other current assets
|
(319,706
|
)
|
(23,246
|
)
|
||||
Patent costs
|
(226,409
|
)
|
(121,199
|
)
|
||||
Accounts payable and accrued expenses
|
(802,518
|
)
|
325,577
|
|||||
Deferred revenue
|
-
|
(139,680
|
)
|
|||||
Net cash provided by operating activities
|
22,285,149
|
17,730,536
|
||||||
Cash flows from investing activities:
|
||||||||
Maturities of marketable securities
|
93,068,962
|
75,170,817
|
||||||
Purchases of marketable securities
|
(125,102,544
|
)
|
(86,629,358
|
)
|
||||
Net cash used in investing activities
|
(32,033,582
|
)
|
(11,458,541
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Proceeds from stock option exercises
|
2,191,816
|
2,570,830
|
||||||
Repurchases of common stock
|
(620,652
|
)
|
(3,000,183
|
)
|
||||
Net cash provided by (used in) financing activities
|
1,571,164
|
(429,353
|
)
|
|||||
(Decrease) increase in cash and cash equivalents
|
(8,177,269
|
)
|
5,842,642
|
|||||
Cash and cash equivalents at beginning of year
|
13,176,452
|
7,333,810
|
||||||
Cash and cash equivalents at end of year
|
$
|
4,999,183
|
$
|
13,176,452
|
||||
Supplemental disclosures of cash flow information:
|
||||||||
Recognition of right of use asset and related lease obligations
|
$
|
242,877
|
$
|
-
|
||||
Cash paid during the year for:
|
||||||||
Interest
|
$
|
-
|
$
|
-
|
||||
Taxes
|
$
|
5,292,362
|
$
|
5,417,572
|
Maturities as of
December 31, 2019 |
Maturities as of
December 31, 2018 |
|||||||||||||||
1 Year or Less
|
Greater than 1
Year
|
1 Year or
Less
|
Greater than 1
Year
|
|||||||||||||
Municipal bonds
|
$
|
11,341,249
|
$
|
-
|
$
|
1,295,350
|
$
|
-
|
||||||||
Government agency bonds
|
11,950,738
|
6,231,804
|
-
|
-
|
||||||||||||
Corporate bonds
|
57,321,784
|
6,675,958
|
61,321,162
|
1,099,834
|
||||||||||||
Certificates of deposit
|
3,626,147
|
3,661,262
|
5,090,631
|
-
|
||||||||||||
Total
|
$
|
84,239,918
|
$
|
16,569,024
|
$
|
67,707,143
|
$
|
1,099,834
|
December 31,
|
||||||||
2019
|
2018
|
|||||||
Patents
|
$
|
1,272,625
|
$
|
1,046,216
|
||||
Accumulated amortization
|
(699,348
|
)
|
(601,738
|
)
|
||||
Net Patent Costs
|
$
|
573,277
|
$
|
444,478
|
2020
|
$
|
83,000
|
||
2021
|
65,000
|
|||
2022
|
65,000
|
|||
2023
|
65,000
|
|||
2024
|
65,000
|
|||
Thereafter
|
230,000
|
|||
Total
|
$
|
573,000
|
As reported
December 31, 2017
|
Adjustments
|
Adjusted
January 1, 2018
|
||||||||||
Accounts receivable
|
$
|
4.7
|
$
|
7.6
|
(1)
|
$
|
12.3
|
|||||
Deferred revenue
|
(6.4
|
)
|
6.3
|
(2)
|
(0.1
|
)
|
||||||
Deferred royalty buy-down
|
(2.5
|
)
|
(0.4
|
)(3)
|
(2.9
|
)
|
||||||
Accounts payable and accrued expenses -third party royalties
|
(0.4
|
)
|
(0.6
|
)(3)
|
(1.0
|
)
|
||||||
Deferred tax assets, net
|
1.7
|
(1.3
|
)(4)
|
0.4
|
||||||||
Income tax payable
|
-
|
(1.4
|
)(5)
|
(1.4
|
)
|
|||||||
Retained earnings adjustment
|
$
|
(2.9
|
)
|
$
|
10.2
|
$
|
7.3
|
(1)
|
This adjustment represents the elimination of the one quarter lag by recognizing royalty revenues based on of XIAFLEX® net sales and mark-up on cost of goods sold revenues reported to us by Endo for the
fourth quarter of 2017.
|
(2)
|
Represents the remaining deferred revenue balance of the prepaid mark-up on cost of
goods sold based on sales by non-affiliated sublicensees of Endo outside of the U.S.
|
(3)
|
Represents the amortization of the royalty buy-down and third party royalties expense associated royalty revenues based on XIAFLEX® net sales reported to us by Endo for the fourth quarter of 2017.
|
(4)
|
To reverse a deferred tax asset associated with the deferred revenue balance of the
prepaid mark-up on cost of goods sold by non-affiliated sublicensees of Endo outside of the U.S.
|
(5)
|
To create a tax liability associated the elimination of the one quarter lag by recognizing royalty revenues based on of XIAFLEX® net sales and mark-up on cost of goods sold revenues reported to us by Endo
for the fourth quarter of 2017.
|
December 31, 2018
|
||||||||||||
As Reported
|
Balances Without
Adoption of New
Revenue Standard
|
Effect of Change
Higher / (Lower)
|
||||||||||
Assets
|
||||||||||||
Accounts receivable
|
$
|
16.5
|
$
|
6.8
|
$
|
9.7
|
||||||
Deferred royalty buy-down
|
0.2
|
0.2
|
-
|
|||||||||
Deferred tax assets
|
0.3
|
1.4
|
(1.1
|
)
|
||||||||
Liabilities
|
||||||||||||
Accounts payable and accrued expenses
|
1.8
|
1.0
|
0.8
|
|||||||||
Deferred revenue
|
-
|
1.0
|
(1.0
|
)
|
||||||||
Income tax payable
|
0.7
|
(1.2
|
)
|
1.9
|
||||||||
Deferred revenue, long term
|
-
|
4.3
|
(4.3
|
)
|
||||||||
Equity
|
||||||||||||
Retained earnings
|
72.2
|
61.0
|
11.2
|
Three Months Ended December 31, 2018
|
||||||||||||
Revenues
|
As Reported
|
Balances Without
Adoption of New
Revenue Standard
|
Effect of Change
Higher / (Lower)
|
|||||||||
Royalties
|
$
|
9.9
|
$
|
8.5
|
$
|
1.4
|
||||||
Costs and expenses
|
||||||||||||
General and administrative
|
$
|
2.5
|
$
|
2.4
|
$
|
0.1
|
||||||
Provision for income taxes
|
1.5
|
1.0
|
0.5
|
|||||||||
Net income
|
6.2
|
5.2
|
1.0
|
Twelve Months Ended December 31, 2018
|
||||||||||||
Revenues
|
As Reported
|
Balances Without
Adoption of New
Revenue Standard
|
Effect of Change
Higher / (Lower)
|
|||||||||
Royalties
|
$
|
33.0
|
$
|
31.7
|
$
|
1.3
|
||||||
Costs and expenses
|
||||||||||||
General and administrative
|
$
|
8.8
|
$
|
8.7
|
$
|
0.1
|
||||||
Provision for income taxes
|
4.7
|
4.5
|
0.2
|
|||||||||
Net income
|
20.1
|
19.1
|
1.0
|
December 31, 2019
|
Type of Instrument
|
Fair Value
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Cash equivalents
|
Institutional Money Market
|
$
|
950,658
|
$
|
950,658
|
$
|
-
|
$
|
-
|
||||||||
Investments
|
Certificates of Deposit
|
7,287,409
|
7,287,409
|
-
|
-
|
||||||||||||
Investments
|
Municipal Bonds
|
11,341,249
|
-
|
11,341,249
|
-
|
||||||||||||
Investments
|
Government Agency Bonds
|
18,182,542
|
-
|
18,182,542
|
-
|
||||||||||||
Investments
|
Corporate Bonds
|
63,997,742
|
-
|
63,997,742
|
-
|
December 31, 2018
|
Type of Instrument
|
Fair Value
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Cash equivalents
|
Institutional Money Market
|
$
|
6,078,025
|
$
|
6,078,025
|
$
|
-
|
$
|
-
|
||||||||
Investments
|
Certificates of Deposit
|
5,090,631
|
5,090,631
|
-
|
-
|
||||||||||||
Investments
|
Municipal Bonds
|
1,295,350
|
-
|
1,295,350
|
-
|
||||||||||||
Investments
|
Corporate Bonds
|
62,420,996
|
-
|
62,420,996
|
-
|
2019
|
2018
|
|||||||
Net income
|
$
|
24,469,808
|
$
|
20,053,269
|
||||
Weighted average shares:
|
||||||||
Basic
|
7,315,144
|
7,242,212
|
||||||
Effect of dilutive securities:
|
||||||||
Stock options
|
33,881
|
91,156
|
||||||
Restricted stock units
|
2,360
|
-
|
||||||
Diluted
|
7,351,385
|
7,333,368
|
||||||
Net income per share:
|
||||||||
Basic
|
$
|
3.35
|
$
|
2.77
|
||||
Diluted
|
$
|
3.33
|
$
|
2.73
|
December 31,
|
||||||||
2019
|
2018
|
|||||||
Trade accounts payable and accrued expenses
|
$
|
197,077
|
$
|
122,199
|
||||
Accrued legal and other professional fees
|
330,787
|
308,725
|
||||||
Accrued payroll and related costs
|
209,330
|
173,123
|
||||||
Third party royalties
|
228,000
|
1,168,837
|
||||||
Other accruals
|
33,215
|
25,704
|
||||||
$
|
998,409
|
$
|
1,798,588
|
Year ended December 31,
|
||||||||
2019
|
2018
|
|||||||
Current taxes:
|
||||||||
Federal
|
$
|
5,945,534
|
$
|
4,612,874
|
||||
State
|
58,390
|
40,958
|
||||||
Total current taxes
|
6,003,924
|
4,653,832
|
||||||
Deferred taxes:
|
||||||||
Federal
|
(172,020
|
)
|
86,634
|
|||||
State
|
(3,064
|
)
|
3,542
|
|||||
Total deferred taxes
|
(175,084
|
)
|
90,176
|
|||||
Total provision for income taxes
|
$
|
5,828,840
|
$
|
4,744,008
|
Year ended December 31,
|
||||||||
|
||||||||
2019
|
2018
|
|||||||
Statutory rate
|
21.00
|
%
|
21.00
|
%
|
||||
State income taxes, net of federal income tax benefit
|
0.23
|
%
|
0.13
|
%
|
||||
Stock-based compensation
|
(0.60
|
)%
|
(1.64
|
)%
|
||||
Deferred rate change
|
-
|
0.01
|
%
|
|||||
Foreign dividends and earnings taxable in the U.S.
|
(0.66
|
)%
|
-
|
|||||
Miscellaneous other, net
|
(0.73
|
)%
|
(0.37
|
)%
|
||||
Effective tax rate
|
19.24
|
%
|
19.13
|
%
|
December 31,
|
||||||||
|
||||||||
2019
|
2018
|
|||||||
Stock option based compensation
|
$
|
50,021
|
$
|
239,492
|
||||
Right of use asset
|
(52,515
|
)
|
-
|
|||||
Lease obligation
|
51,798
|
-
|
||||||
Section 481(a) revenue recognition deferred
|
(707,208
|
)
|
-
|
|||||
Other liabilities
|
85,244
|
74,276
|
||||||
Net deferred tax asset (liability)
|
$
|
(572,660
|
)
|
$
|
313,768
|
Restricted Stock
|
Weighted-
Average Grant
Date Fair Value
Per Share
|
|||||||
Nonvested at December 31, 2018
|
-
|
$
|
-
|
|||||
Granted
|
10,450
|
60.47
|
||||||
Vested
|
-
|
-
|
||||||
Forfeited
|
-
|
-
|
||||||
Nonvested at September 30, 2019
|
10,450
|
$
|
60.47
|
2019
|
2018
|
|||||||
Risk-free interest rate
|
1.62% - 2.18
|
%
|
2.62% - 2.94
|
%
|
||||
Expected volatility
|
39.4% - 39.5
|
%
|
39.4% - 39.9
|
%
|
||||
Expected life (in years)
|
6.25
|
6.25
|
||||||
Dividend yield
|
-
|
-
|
Shares
|
Weighted-
Average
Exercise
Price
|
Weighted-
Average
Remaining
Contractual
Term
|
Aggregate
Intrinsic
Value
|
|||||||||||||
Outstanding at December 31, 2017
|
232,000
|
$
|
21.56
|
2.52
|
$
|
5,050,990
|
||||||||||
Grants
|
81,500
|
51.42
|
-
|
-
|
||||||||||||
Exercised
|
(138,000
|
)
|
18.63
|
-
|
3,720,149
|
|||||||||||
Outstanding at December 31, 2018
|
175,500
|
37.73
|
6.33
|
4,014,235
|
||||||||||||
Grants
|
100,000
|
48.93
|
-
|
-
|
||||||||||||
Exercised
|
(75,063
|
)
|
29.20
|
-
|
2,477,039
|
|||||||||||
Cancelled
|
(11,250
|
)
|
41.82
|
-
|
178,988
|
|||||||||||
Outstanding at December 31, 2019
|
189,187
|
46.79
|
8.62
|
1,920,684
|
||||||||||||
Vested and expected to vest at December 31, 2019
|
189,187
|
$
|
46.79
|
8.62
|
$
|
1,920,684
|
||||||||||
Exercisable at December 31, 2019
|
39,312
|
$
|
32.73
|
5.55
|
$
|
951,920
|
Outstanding Shares
|
Exercisable Shares
|
||||||||||||||||||||||||
Option
Exercise Price
|
Number of
Shares
|
Weighted
Average
Life
(years)
|
Weighted
Average
Exercise Price
|
Number
of
Shares
|
Weighted
Average
Option
Price
|
Weighted
Average
Life
(years)
|
|||||||||||||||||||
$15.75 - 15.85
|
21,000
|
3.06
|
$
|
15.82
|
21,000
|
$
|
15.82
|
3.06
|
|||||||||||||||||
$37.64 – 46.56
|
103,187
|
9.49
|
39.53
|
5,812
|
40.56
|
7.38
|
|||||||||||||||||||
$54.93 – 66.30
|
65,000
|
9.04
|
58.66
|
12,500
|
57.48
|
8.88
|
|||||||||||||||||||
189,187
|
8.62
|
$
|
46.79
|
39,312
|
$
|
32.73
|
5.55
|
2020
|
$
|
75,352
|
||
2021
|
84,893
|
|||
2022
|
87,428
|
|||
Total lease payments
|
247,673
|
|||
Less: Interest
|
(11,560
|
)
|
||
Total lease obligation
|
$
|
236,113
|
Exhibit
Number
|
Description of Exhibit
|
Company’s Certificate of Incorporation, as amended (incorporated by reference to Exhibit 3.1 of the Company’s Annual Report on Form 10-KSB filed March 2, 2007 (File No. 000-19879))
|
|
Company’s Amended and Restated By-laws, as amended February 25, 2014 (incorporated by reference to Exhibit 3.2 of the Company’s Annual Report on Form 10-K filed March 7, 2014 (File No. 001-34236))
|
|
Amendment to Amended and Restated By-laws (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed February 26, 2014 (File No. 001-34236))
|
|
Rights Agreement, dated May 14, 2002, by and between the Company and OTC Corporate Transfer Service Company (incorporated by reference to Exhibit 1 to the Company’s Form 8-A filed May 30, 2002 (File No.
000-19879))
|
|
Amendment No. 1 to Rights Agreement, dated June 19, 2003, by and between the Company and OTC Corporate Transfer Service Company (incorporated by reference to Exhibit 10.19 of the Company’s Annual Report on
Form 10-KSB filed March 2, 2007 (File No. 000-19879))
|
|
Amendment No. 2 to Rights Agreement, dated February 3, 2011, by and between the Company and OTC Corporate Transfer Service Company (incorporated by reference to Exhibit 4.1 to the Company’s Current Report
on Form 8-K filed February 4, 2011 (File No. 001-34236))
|
|
Amendment No. 3 to Rights Agreement, dated March 5, 2014, by and between the Company and Worldwide Stock Transfer, LLC (as successor in interest to OTC Corporate Transfer Service Company) (incorporated by
reference to Exhibit 4.4 of the Company’s Annual Report on Form 10-K filed March 7, 2014 (File No. 001-34236))
|
|
Amendment No. 4 to Rights Agreement, dated May 27, 2016, by and between the Company and Worldwide Stock Transfer, LLC (as successor in interest to OTC Corporate Transfer Service Company) (incorporated by
reference to Exhibit 4.5 to the Company’s Annual Report on Form 10-K filed April 2, 2019 (File No. 001-34236))
|
|
Amendment No. 5 to Rights Agreement, dated May 11, 2018, by and between the Company and Worldwide Stock Transfer, LLC (as successor in interest to OTC Corporate Transfer Service Company) (incorporated by
reference to Exhibit 4.6 to the Company’s Annual Report on Form 10-K filed April 2, 2019 (File No. 001-34236))
|
|
Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934.
|
|
BioSpecifics Technologies 2019 Omnibus Incentive Compensation Plan (incorporated by reference to Exhibit 99.1 to Registration Statement on Form S-8 filed June 26, 2019 (File No. 333-232351))
|
|
BioSpecifics Technologies 2019 Omnibus Incentive Compensation Plan Form of Nonqualifed Stock Option Award Agreement (incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q
filed November 12, 2019 (File No. 001-34236))
|
|
BioSpecifics Technologies 2019 Omnibus Incentive Compensation Plan Form of Director Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form
10-Q filed August 9, 2019 (File No. 001-34236))
|
|
BioSpecifics Technologies 2019 Omnibus Incentive Compensation Plan Form of Officer Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form
10-Q filed August 9, 2019 (File No. 001-34236))
|
|
BioSpecifics Technologies 2019 Omnibus Incentive Compensation Plan J. Kevin Buchi Performance Stock Unit Award Agreement
|
|
Agreement of Lease, dated November 21, 2013, by and among the Company, ABC-NY and 35 Wilbur Street Associates, LLC (incorporated by reference to Exhibit 10.1 of the Company’s Annual Report on Form 10-K
filed March 7, 2014 (File No. 001-34236))
|
|
Lease Renewal Letter Agreement, dated August 14, 2015, by and among the Company, ABC NY and 35 Wilbur Street Associates, LLC (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on
Form 10-Q filed November 9, 2015 (File No. 001-34236))
|
Second Amendment to Offer Letter, dated April 1, 2019, by and between and Dr. Ronald E. Law (incorporated by reference to Exhibit 10.26 of the Company’s Annual Report on Form 10-K filed
April 2, 2019 (File No. 000-19879))
|
|
Confidentiality and Inventions Assignment Agreement, dated November 16, 2018, by and between and Dr. Ronald E. Law (incorporated by reference to Exhibit 10.27 of the Company’s Annual Report on Form 10-K filed
April 2, 2019 (File No. 000-19879))
|
|
Consulting Agreement, dated April 1, 2019, by and between the Company and Patrick M. Caldwell (incorporated by reference to Exhibit 10.28 of the Company’s Annual Report on Form 10-K filed April 2, 2019 (File
No. 000-19879))
|
|
Amended and Restated Indemnification Agreement, dated September 12, 2012, by and between the Company and Patrick M. Caldwell (incorporated by reference to Exhibit 10.29 of the Company’s Annual Report on Form
10-K filed April 2, 2019 (File No. 000-19879))
|
|
Employment Agreement, dated October 8, 2019, by and between the Company and J. Kevin Buchi (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q filed November 12, 2019
(File No. 001-34236))
|
|
Employment Letter Agreement, dated January 6, 2020, by and between the Company and Patrick Hutchison
|
|
Lease Agreement, dated December 16, 2019, by and between the Company and 2 Righter LLC
|
|
Company’s Amended and Restated Code of Business Conduct and Ethics (incorporated by reference to Exhibit 14.1 of the Company’s Annual Report on Form 10-K filed March 14, 2018 (File No. 001-34236))
|
|
Subsidiaries of the Company
|
|
Consent of EisnerAmper LLP, Independent Registered Accounting Firm
|
|
Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002
|
|
101*
|
The following materials from the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets,
(ii) the Consolidated Statements of Income, (iii) Consolidated Statements of Stockholders’ Equity, (iv) the Consolidated Statements of Cash Flows, and (v) Notes to Consolidated Financial Statements
|
* |
Filed herewith |
** |
Furnished herewith |
† |
Identifies exhibits that consist of a management contract or compensatory arrangement |
BIOSPECIFICS TECHNOLOGIES CORP.
|
||
By:
|
J. Kevin Buchi
|
|
Name:
|
Kevin Buchi
|
|
Title:
|
Principal Executive Officer
|
SIGNATURE
|
TITLE
|
|
/s/ J. Kevin Buchi
|
Principal Executive Officer and Director
|
|
Name: J. Kevin Buchi
|
(Principal Executive Officer)
|
|
Date: March 16, 2020
|
||
/s/ Patrick Hutchison
|
Principal Financial Officer
|
|
Name: Patrick Hutchison
|
(Principal Financial Officer and Principal
|
|
Date: March 16, 2020
|
Accounting Officer)
|
|
/s/ Jennifer Chao
|
Chair of the Board
|
|
Name: Jennifer Chao
|
||
Date: March 16, 2020
|
||
/s/ Paul Gitman
|
Director
|
|
Name: Dr. Paul Gitman
|
||
Date: March 16, 2020
|
||
/s/ Michael Schamroth
|
Director
|
|
Name: Michael Schamroth
|
||
Date: March 16, 2020
|
||
/s/ Dr. Mark Wegman
|
Director
|
|
Name: Dr. Mark Wegman
|
||
Date: March 16, 2020
|
||
/s/ Toby Wegman
|
Director
|
|
Name: Toby Wegman
|
||
Date: March 16, 2020
|
|
BIOSPECIFICS TECHNOLOGIES CORPORATION
|
/s/ Jennifer Chao | |
Name: Jennifer Chao
|
|
Title: Chair, Compensation Committee |
February 3, 2020 | /s/ J. Kevin Buchi |
Date
|
J. Kevin Buchi |
|
1. |
The Performance Stock Units subject to the Award Agreement to which this Exhibit A is attached are subject to the performance conditions set forth in Section 5 below. Capitalized terms used, but not otherwise defined, in this
Exhibit shall have the meanings set forth in the Award Agreement.
|
|
2. |
The target number of Performance Stock Units underlying the Award Agreement is 28,333 Performance Stock Units.
|
|
3. |
The performance conditions set forth in Section 5 of this Exhibit A (the “Performance Conditions”) shall be measured over the twelve month period commencing on January 1, 2020 and ending on December 31, 2020 (the “Performance
Period”).
|
|
4. |
As soon as administratively practicable following the end of the Performance Period, the Committee will determine, in its sole discretion, (a) whether and to what extent the Performance Conditions have been met in the aggregate over
the Performance Period and (b) the number of Performance Stock Units that are earned based on such achievement of the Performance Conditions (such Performance Stock Units, the “Achieved PSUs”). The actual number of Achieved PSUs
shall range from 0% to 100% of the target number set forth in Section 2, as determined by the Committee. The number of Performance Stock Units the Participant is eligible to earn under this Award shall not exceed 28,333.
|
|
5. |
The Performance Conditions are set forth below.
|
Performance Condition
|
Components of Performance Condition
|
1
|
Executive Leadership
|
[***]
|
||
2
|
Financial
|
[***]
|
||
3
|
BioSpecifics Technologies Corp.’s (“BSTC”) Relationship/Partnership with Endo International (“Endo”)
|
[***]
|
||
4
|
Maximizing the Value of BSTC’s Current and Potential CCH Assets
|
[***]
|
||
5
|
Maximize the Value of BSTC’s Intellectual Property Estate/Manufacturing Ability
|
[***]
|
||
6
|
Business Development (“BD”) Activity
|
[***]
|
||
7
|
Infrastructure
|
[***]
|
||
8
|
Investor Relations
|
[***]
|
|
|
|
|
|
|
Benefits:
|
You will be eligible for employee benefits and insurance programs generally provided by BioSpecifics to its employees, all of which are subject to eligibility
requirements, enrollment criteria, and the other terms and conditions of such plans and programs. All such benefits are subject to change at the Company’s sole discretion.
|
You will be entitled to vacation each year, in addition to sick leave and observed holidays, in accordance with the policies of the Company. Vacation may be
taken at such times and intervals as you shall determine, subject to the business needs of the Company.
|
|
Equity Incentive:
|
Subject to the approval of the Board of Directors of the Company, you will be granted an award of an option to purchase ten thousand (10,000) shares of the
Company’s common stock (the “Option Award”) , pursuant to the Biospecifics Technologies Corp. 2019 Omnibus Incentive Compensation
Plan. The Option Award will be granted on your Start Date, with an exercise price equal to the fair market value of the Company’s common stock on such date of grant, and will be subject to a four (4) year vesting period, vesting in a
series of four (4) successive annual installments of twenty-five percent (25%) each, commencing on the first (1st) anniversary of the Start Date, provided you are employed by the Company on each such vesting date, as well as any other terms
and conditions contained in the grant agreement.
|
Representations and Contingencies:
|
This offer is contingent on your representation that you are free to accept employment with BioSpecifics without any contractual restrictions, express or implied,
of any kind (including, without limitation, any confidentiality, non-competition agreement or any other similar type of restriction that may affect your ability to devote full time and attention to your work at the Company).
|
This offer is also conditioned on you not having been, and by signing below you represent and warrant that you have not been, debarred or received notice of any
action or threat with respect to debarment under the provisions of the Generic Drug Enforcement Act of 1992, 21 U.S.C. § 335(a) or any similar legislation applicable in the U.S. or in any other country where the Company intends to develop
its activities.
|
This offer is also contingent on your agreement to the Company’s Confidentiality and Inventions Assignment Agreement, which you will be provided with and required
to sign upon commencement of your employment
|
|
Compliance:
|
You are required to familiarize yourself with and adhere to, all Company policies which may be in effect from time to time. Failure to comply with all such
policies and procedures shall be grounds for disciplinary action by the Company, up to and including termination of employment.
|
Employment At-Will:
|
Your employment with BioSpecifics is at-will. Both you and the Company reserve the right to terminate the relationship at any time, with or without cause and with
or without notice. We ask, however, you provide the Company at least two (2) months’ advance written notice of your intention to resign your employment.
|
Termination Without Cause:
|
If the Company terminates your employment without Cause (as defined below), the Company shall pay you any earned but unpaid Base Salary through the date of
termination, at the rates then in effect, less standard deductions and withholdings. In addition, if you: (i) furnish to the Company an executed waiver and general release of claims in a form to be provided to you by the Company (a
“Release), (ii) allow the Release to become effective in accordance with its terms, and (iii) otherwise comply with the Release, then you will be eligible to receive an aggregate amount equal to two (2) months of your then-current Base
Salary, less standard deductions and withholdings, payable in equal installments over the two (2) month period following the date of the termination of your employment.
|
“Cause” shall mean the occurrence of any of the following, your: (1) breach of a material term of this letter agreement or any confidentiality or inventions assignment agreement with the Company; (2)
commission of an act of fraud, embezzlement, theft, or material dishonesty; (3) willful engagement in conduct that causes, or is likely to cause, material damage to the property or reputation of the Company; (4) failure to perform
satisfactorily the material duties of your position (other than by reason of disability) after receipt of a written warning from the Company; (5) commission of a felony or any crime of moral turpitude; or (6) material failure to comply with
the Company’s code of conduct or employment policies.
|
Other Termination:
|
If you resign from employment with the Company at any time or the Company terminates your employment at any time for Cause or due to death or Disability (as
defined below), the Company shall pay you any earned but unpaid Base Salary and any unused vacation accrued (if applicable) through the date of such resignation or termination, at the rates then in effect, less standard deductions and
withholdings. The Company shall thereafter have no further obligations to you, except as may otherwise be required by law.
|
“Disability” shall mean your inability to perform
your duties and responsibilities hereunder, with or without reasonable accommodation, due to any physical or mental illness or incapacity, which condition has continued for a period of one hundred eighty (180) days (including weekends and
holidays) in any consecutive three hundred sixty-five (365) day period.
|
|
Agreement to Arbitrate Claims:
|
Subject to any written agreement to the contrary, any dispute, claim or controversy arising out of or relating to this Agreement or your employment with the
Company (collectively, “Disputes”), including, without limitation, any dispute, claim or controversy concerning the validity,
enforceability, breach or termination of this Agreement, if not resolved by the parties, shall be finally settled by arbitration in accordance with the then-prevailing Employment Dispute Resolution Rules of the American Arbitration
Association (“AAA”) (before a single arbitrator) except as modified herein (“Rules”). The requirement to arbitrate covers all
Disputes (other than disputes which by statute are not arbitrable) including, but not limited to, claims, demands or actions under the Age Discrimination in Employment Act (including Older Workers Benefit Protection Act); Americans with
Disabilities Act; Civil Rights Act of 1866; Civil Rights Act of 1991; Employee Retirement Income Security Act of 1974; Equal Pay Act; Family and Medical Leave Act of 1993; Title VII of the Civil Rights Act of 1964; Fair Labor Standards Act;
Fair Employment and Housing Act; and any other law, ordinance or regulation regarding discrimination or harassment or any terms or conditions of employment. The place of arbitration shall be New York, New York.
|
By agreeing to arbitration, the parties hereto do not intend to deprive any court of its jurisdiction to issue a pre-arbitral injunction, including, without
limitation, with respect to the Company’s Confidentiality and Inventions Assignment Agreement. The arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. §§ 1-16. Judgment upon the award of the arbitrator may be entered in
any court of competent jurisdiction. The arbitrator shall: (a) have authority to compel discovery which shall be narrowly tailored to efficiently resolve the disputed issues in the proceeding; and (b) issue a written statement signed by
the arbitrator regarding the disposition of each claim and the relief, if any, awarded as to each claim, the reasons for the award, and the arbitrator’s essential findings and conclusions on which the award is based. The Company shall pay
all administrative fees of AAA in excess of four hundred thirty-five dollars ($435) (a typical filing fee in court) but the Company and you shall split any arbitrator’s fees and expenses. Each party shall bear their own costs and expenses
(including attorney’s fees) in any such arbitration and the arbitrator shall have no power to award costs and attorney’s fees except as provided by statute or by separate written agreement between the parties. In the event any portion of
this arbitration provision is found unenforceable by a court of competent jurisdiction, such portion shall become null and void leaving the remainder of this arbitration provision in full force and effect. The parties agree that all
information regarding the arbitration, including any settlement thereof, shall not be disclosed by the parties hereto, except as otherwise required by applicable law.
|
Accepted:
|
BIOSPECIFICS TECHNOLOGY CORP.
|
/s/ Patrick C. Hutchison
|
/s/ J. Kevin Buchi
|
Patrick C. Hutchison
|
By: J. Kevin Buchi
|
Title: Chief Executive Officer
|
|
Date: December 20, 2019
|
Date: December 17, 2019
|
Section/Caption
|
Page
|
Basic Lease Provisions
|
1
|
Lease Terms
|
|
1. Premises, Term and Purpose
|
3
|
2. Rent
|
4 |
3. Expenses; Taxes;
|
5
|
4. Condition of Premises
|
9
|
5. Compliance with Laws; Condition of Premises
|
9
|
6. Surrender; Alterations and Repairs
|
9
|
7. Negative Covenants of Tenant
|
12
|
8. Affirmative Covenants of Tenant
|
13
|
9. Building Directory and Signage
|
13
|
10. Casualty and Insurance
|
14
|
11. Indemnification
|
16
|
12. Non-Liability of Landlord
|
16
|
13. Remedies and Termination Upon Tenant Default
|
17
|
14. Remedies Cumulative; Non-Waiver By Landlord
|
19
|
15. Building Services
|
19
|
16. Subordination
|
22
|
17. Landlord’s Cure of Tenant’s Default
|
22
|
18. Notices
|
22
|
19. Quiet Enjoyment
|
22
|
20. Inspection and Entry by Landlord
|
23
|
21. Brokerage
|
23
|
22. Landlord’s Inability to Perform
|
23
|
23. Condemnation
|
24
|
24. Assignment and Subletting
|
24
|
25. Environmental Law
|
26
|
26. Parties Bound
|
27
|
27. Tenant’s Bankruptcy or Insolvency
|
28
|
28. Miscellaneous
|
28
|
Exhibit A
|
Plan of the Premises
|
Exhibit B
|
Commencement Memorandum
|
Exhibit C
|
Rules and Regulations
|
Exhibit D
|
Janitorial Specifications
|
Exhibit E
|
[intentionally omitted]
|
Exhibit F
|
Estoppel Certificate
|
Exhibit G
|
[intentionally omitted]
|
Exhibit H
|
Special Stipulations
|
LEASE YEAR
|
ANNUAL FIXED RENT
|
MONTHLY INSTALLMENT
|
$/RSF
|
||||||||||
1
|
$
|
82,420.00
|
$
|
6,868.33
|
$
|
26.00
|
|||||||
2
|
$
|
84,892.60
|
$
|
7,074.38
|
$
|
26.78
|
|||||||
3
|
$
|
87,428.60
|
$
|
7,285.72
|
$
|
27.58
|
Landlord:
|
2 Righter LLC
|
|
c/o BPG Real Estate Services LLC
|
||
1000 N. West Street, Suite 900
|
||
Wilmington, Delaware 19801
|
||
Attn: Property Management
|
Tenant prior to the Commencement Date:
|
||
35 Wilbur St.
|
||
Lynbrook, NY 11563
|
||
Attn: J. Kevin Buchi
|
Tenant from and after the Commencement Date:
|
||
The Premises
|
||
Attn: Amy Greene
|
Name: Amy Greene
|
Phone Number:
|
|||
Email Address:
|
LANDLORD:
|
|
2 Righter LLC,
|
|
a Delaware limited liability company
|
|
By: /s/ Authorized Signatory
|
|
Authorized Signatory
|
|
TENANT:
|
|
BioSpecifics Technologies Corp.,
|
|
a Delaware corporation
|
|
By: J. Kevin Buchi
|
|
Name: J. Kevin Buchi
|
|
Title: CEO
|
|
Date: December 16, 2019
|
(a)
|
The Commencement Date of the Lease Term is
|
|
;
|
(b)
|
The Expiration Date of the Lease Term is
|
|
;
|
(c)
|
The Rent Commencement Date under the Lease is
|
;
|
(d)
|
The suite number of the Premises is
|
;
|
(e)
|
The rentable square footage of the Premises is
|
;
|
(f)
|
The rentable square footage of the Building is
|
;
|
(g)
|
Tenant’s Proportionate Share of Excess Expenses is
|
.
|
(a)
|
It has accepted possession of the Premises;
|
(b) |
The improvements required to be furnished by Landlord under the Lease have been completed (subject to any corrective work or punchlist items of which Tenant has notified Landlord in accordance with the Lease);
|
[________________________________]
|
|
By:
|
|||
Title:
|
i) |
fire-arms ammunition;
|
ii) |
animals or birds (except as permitted by law); and
|
iii) |
bicycles or other unauthorized vehicles.
|
27. |
i)
|
Tenant shall not cause or permit any unusual or objectionable odors to be produced upon, permeate through, or to issue out of the Premises;
|
ii) |
Tenant shall not permit any cooking to be done on the Premises other than in areas so designated in plans and/or specifications provided to Landlord;
|
iii) |
Tenant shall not permit or suffer any part of the Premises to be used for the purpose of gambling or for any illegal immoral or improper purpose;
|
iv) |
Tenant shall not suffer or permit any person to be lodged in or to sleep upon the Premises; and
|
v) |
Nothing shall be thrown by the Tenant, its servants or agents out of the windows or doors or down the passages of the Building.
|
|
7. |
Upon completion of cleaning, all lights will be turned off and doors locked, leaving the premises in orderly condition.
|
|
3. |
Detail vacuum, reaching corners, under desks, crevices, etc.
|
|
4. |
Hand dust and wipe clean with treated cloths all horizontal surfaces including furniture, office equipment, windowsills, door ledges, and chair rails within normal reach, so long as surfaces are clear of personal property and debris.
|
1.
|
Inspect lavatories and spot clean as necessary
|
|
||
(Name of Tenant)
|
||
By:
|
|||
Name:
|
|||
Title:
|
A. |
Date of Lease:
|
B. |
Parties:
|
|
1. |
Landlord:
|
|
2. |
Tenant:
d/b/a:
|
C. |
Premises: Suite ________ located on floor(s) ________________ containing approximately __________________ rentable square feet
|
D. |
Modifications, Assignments, Supplements or Amendments to Lease:
|
E. |
Commencement Date:
|
F. |
Expiration of Current Term:
|
G. |
Intentionally Omitted:
|
H. |
Security Deposit Paid to Landlord: None
|
I. |
Current Fixed Rent (Annualized): $__________
|
J. |
Amount of Most Recent Rent Payment: $__________
|
1.
|
I have reviewed this annual report on Form 10-K of BioSpecifics Technologies Corp. for the fiscal year ended December 31, 2019;
|
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 consolidated 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 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 and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and to 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.
|
1.
|
I have reviewed this annual report on Form 10-K of BioSpecifics Technologies Corp. for the fiscal year ended December 31, 2019;
|
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 consolidated 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;
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4.
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The registrant’s other certifying officer 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:
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(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;
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(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;
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(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
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(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
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5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and to the audit committee of
the registrant’s board of directors (or persons performing the equivalent functions):
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(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
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(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.
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: March 16, 2020
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/s/ J. Kevin Buchi
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J. Kevin Buchi
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Chief Executive Officer
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/s/ Patrick Hutchison
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Patrick Hutchison
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Chief Financial Officer
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