UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Soliciting Material Pursuant to
[_] Confidential, For Use of the SS.240.14a-11(c) or SS.240.14a-12
Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
BioSpecifics Technologies Corp.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[_] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
________________________________________________________________________________
1) Title of each class of securities to which transaction applies:
________________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
________________________________________________________________________________
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
________________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
________________________________________________________________________________
5) Total fee paid:
________________________________________________________________________________
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
________________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
________________________________________________________________________________
3) Filing Party:
________________________________________________________________________________
4) Date Filed:
________________________________________________________________________________
SEC 1913 (3-99)
<PAGE>
BIOSPECIFICS TECHNOLOGIES CORP.
35 Wilbur Street
Lynbrook, New York 11563
July 3, 2000
TO THE STOCKHOLDERS:
You are cordially invited to attend the 2000 Annual Meeting of
Stockholders of BioSpecifics Technologies Corp., which will be held at the
Holiday Inn Crowne Plaza, 104-04 Ditmars Boulevard, East Elmhurst, New York
11369 on August 3, 2000 at 10:30 A.M. local time.
The Notice of the 2000 Annual Meeting and Proxy Statement, which are
attached, provide information concerning the matters to be considered at the
meeting. In addition, the general operations of the Company will be discussed
and stockholders will be afforded the opportunity to ask questions.
We would appreciate your signing and returning your proxy in the
enclosed envelope as soon as possible, whether or not you plan to attend the
meeting. Please sign, date and return the enclosed proxy in the self-addressed,
postage prepaid envelope. If you do not return the signed proxy, your vote
cannot be counted. We value your opinion and encourage you to participate in
this year's annual meeting by voting your proxy.
Your vote is important. Accordingly, you are urged to mark, sign and
return the accompanying proxy card whether or not you plan to attend the
meeting.
Very truly yours,
/s/ Edwin H. Wegman
--------------------
Edwin H. Wegman
Chairman of the Board
<PAGE>
BIOSPECIFICS TECHNOLOGIES CORP.
35 Wilbur Street
Lynbrook, New York 11563
--------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 3, 2000
--------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
BioSpecifics Technologies Corp. (the "Company") will be held at the Holiday Inn
Crowne Plaza, 104-04 Ditmars Boulevard, East Elmhurst, New York 11369 on August
3, 2000 at 10:30 A.M. local time, for the following purposes:
1. To elect two directors of the Company for the ensuing three
years, and until their successors shall be duly elected and
qualified; and
2. To transact such other business as may properly come before
the meeting, or any or all adjournments or postponements
thereof.
Only stockholders of record at the close of business on June 20, 2000
will be entitled to notice of, and to vote at, the meeting and any adjournments
thereof.
YOU ARE URGED TO READ THE ATTACHED PROXY STATEMENT, WHICH CONTAINS
INFORMATION RELEVANT TO THE ACTION TO BE TAKEN AT THE MEETING. YOU ARE CORDIALLY
INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR NOT YOU EXPECT TO ATTEND THE
MEETING IN PERSON, PLEASE MARK, SIGN AND DATE THE ACCOMPANYING PROXY CARD AND
MAIL IT PROMPTLY IN THE ENCLOSED ADDRESSED, POSTAGE PREPAID ENVELOPE (FOR USE IN
THE UNITED STATES).
By Order of the Board of Directors,
/s/ Albert Horcher
----------------------------------
Albert Horcher
Secretary
Lynbrook, New York
July 3, 2000
<PAGE>
BIOSPECIFICS TECHNOLOGIES CORP.
35 Wilbur Street
Lynbrook, New York 11563
-------------------
PROXY STATEMENT
-------------------
Annual Meeting of Stockholders
to be held August 3, 2000
This Proxy Statement and the enclosed form of proxy are furnished in
connection with solicitation of proxies by the Board of Directors of
BioSpecifics Technologies Corp. (the "Company") to be used at the Annual Meeting
of Stockholders of the Company to be held at the Holiday Inn Crowne Plaza,
104-04 Ditmars Boulevard, East Elmhurst, New York 11369 on August 3, 2000 and
any adjournments thereof ("Annual Meeting"). The matters to be considered at the
meeting are set forth in the attached Notice of Meeting.
The Company intends to send the proxy materials and the 2000 Annual
Report to Stockholders on or about July 7, 2000.
INFORMATION CONCERNING SOLICITATION AND VOTING
Outstanding Shares Entitled to Vote
On May 22, 2000, there were outstanding 4,529,766 shares of common
stock, $.001 par value per share, of the Company ("Common Stock"). Record
holders of shares of Common Stock on June 20, 2000, the record date, will be
entitled to one vote for each share of such stock.
Solicitation of Proxies
The solicitation of proxies in the enclosed form is made on behalf of
the Company and the cost of this solicitation is being paid by the Company. In
addition to the use of the mails, proxies may be solicited personally or by
direct communication using the services of directors, officers and regular
employees of the Company at nominal cost. Banks, brokerage firms and other
custodians, nominees and fiduciaries will be reimbursed by the Company for
expenses incurred in sending proxy material to beneficial owners of the Common
Stock.
Record Date; Revocability of Proxies
The Board of Directors has fixed the close of business on June 20,
2000 as the record date for the determination of stockholders entitled to notice
of and to vote at the meeting.
The proxy will be voted (or withheld from voting) in accordance with
any specifications made. Unless otherwise specified in the proxy, shares
represented by proxy will be voted "FOR" election of the nominees listed herein.
A proxy may be revoked by giving notice to the Secretary of the Company in
person, or by written notification actually received by the Secretary, at any
time prior to its being exercised, by delivery of a later dated proxy prior to
the Annual Meeting or by attending the meeting and voting in person.
<PAGE>
Quorum; Voting
The presence at the Annual Meeting, in person or by proxy, of the
holders of a majority of the outstanding shares of the Common Stock authorized
to vote constitutes a quorum for the transaction of business at the Annual
Meeting. If a quorum should not be present, the Annual Meeting may be adjourned
from time to time until a quorum is obtained.
Each unrevoked proxy card properly signed and received prior to the
close of the meeting will be voted as indicated. Unless otherwise specified on
the proxy, the shares represented by a signed proxy card will be voted "FOR"
Item 1 on the proxy card and will be voted at the discretion of the persons
named as proxies on other business that may properly come before the meeting.
The Board of Directors is not aware of any other matters to be presented for
action at the Annual Meeting. Concerning the election of directors, by checking
the appropriate box on your proxy card, you may: (a) vote "FOR" each of the
director nominees; or (b) withhold authority to vote for any or all of the
director nominees. Stockholders may vote by either completing and returning a
signed proxy card prior to the meeting, voting in person at the meeting or
submitting a signed proxy card at the meeting.
If a proxy card indicates an abstention or a broker non-vote on a
particular matter, the shares represented by such proxy will be counted as
present for quorum purposes.
The election of directors requires a plurality vote of those shares
voted at the meeting with respect to the election of directors. "Plurality"
means that the individuals who receive the largest number of votes cast "FOR"
are elected as directors. Consequently, any shares not voted "FOR" a particular
nominee (whether as a result of a direction to withhold authority or a broker
non-vote) will not be counted in such nominee's favor. All other matters to be
voted on will be decided by the affirmative vote of a majority of the shares
present or represented at the meeting and entitled to vote. On any such matter,
an abstention will have the same effect as a negative vote, but because shares
held by brokers will not be considered entitled to vote on matters as to which
the brokers withhold authority, a broker non-vote will have no effect on the
vote.
Ownership of Equity Securities
To the Company's knowledge, the table that follows sets forth the
beneficial ownership of shares of Common Stock as of May 22, 2000 of (i) those
persons or groups known to the Company to beneficially own more than 5% of the
Common Stock, (ii) each director and nominee of the Company, (iii) each
executive officer whose compensation exceeded $100,000 (each, a "named executive
officer") in fiscal 2000 (which ended January 31, 2000), and (iv) all directors
and executive officers of the Company as a group. The information is determined
in accordance with Rule 13d-3 promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), based on information furnished by the
persons listed or contained in filings made by them with the Securities and
Exchange Commission. Unless indicated below, the stockholders listed possess
sole voting and investment power with respect to their shares and the business
address of each stockholder is c/o BioSpecifics Technologies Corp., 35 Wilbur
St., Lynbrook, New York 11563.
2
<PAGE>
<TABLE>
<CAPTION>
Number of Shares
Name of of Common Stock Percent of
Beneficial Owner Beneficially Owned Class
---------------- ------------------ -----
<S> <C> <C>
Edwin H. Wegman (1) 2,381,082 50.1%
Thomas L. Wegman (2) 95,544 2.0%
Paul A. Gitman, MD. (3) 55,500 1.2%
Henry Morgan (4) 8,528 *
Rainer Friedel (5) 57,500 1.2%
Louis Lasagna - *
John T. Lane 1,000 *
Albert Horcher (6) 21,000 *
Directors and executive officers as a 2,640,154 55.5%
group (8 persons)
</TABLE>
------------------------------------
(*) Less than 1%.
(1) Includes 1,843,327 shares of Common Stock owned by The S.J. Wegman
Company, a partnership of which Edwin H. Wegman is the sole general
partner. Includes 120,000 shares beneficially owned by The Isabel H.
Wegman Rev. Trust. The sole trustee of this trust is Mr. Wegman's
brother. Includes options to purchase 54,340 shares of Common Stock
which are currently exercisable. Does not include options to purchase
37,960 shares of Common Stock which are not currently exercisable.
Edwin H. Wegman is the father of Thomas L. Wegman.
(2) Includes 7,300 shares of Common Stock held by Thomas L. Wegman's wife
and child. Includes options to purchase 60,800 shares of Common Stock
which are currently exercisable. Does not include options to purchase
50,000 shares of Common Stock which are not currently exercisable.
Thomas L. Wegman is a son of Edwin H. Wegman.
(3) Includes 16,500 shares of Common Stock held by Dr. Gitman's wife and
children. Includes options to purchase 10,000 shares of Common Stock
which are currently exercisable. Dr. Gitman's business address is c/o
Long Island Jewish Medical Center, 270-05 76th Ave., New Hyde Park, New
York 11040.
(4) Includes 8,000 shares of Common Stock held by Garrubbo and Morgan, a
partnership of which Mr. Morgan is a general partner owning a 50%
equity position. Mr. Morgan disclaims beneficial ownership of 4,000 of
such shares. Includes options to purchase 10,000 shares of Common Stock
which are currently exercisable. Mr. Morgan's business address is c/o
Morgan, Melhuish, Monaghan, Arvidson, Abrutyn & Lisowski, 651 West Mt.
Pleasant Avenue, Livingston, New Jersey 07039-1873.
(5) Includes options to purchase 57,500 shares of Common Stock which are
currently exercisable. Does not include options to purchase 17,500
shares of common stock which are not currently exercisable.
(6) Includes options to purchase 21,000 shares of Common Stock which are
currently exercisable. Does not include options to purchase 5,000
shares of common stock which are not currently exercisable.
3
<PAGE>
ELECTION OF DIRECTORS
The Board of Directors is divided into three classes, each of which
is for a term of three years, with only one class of directors being elected in
each year. The term of office of the first class of directors, presently
consisting of Thomas L. Wegman and Dr. Paul A. Gitman, will expire on the date
of the Annual Meeting, the term of the second class of directors, presently
consisting of Henry Morgan, Dr. Louis Lasagna, and John T. Lane, will expire at
the Annual Meeting in 2001, and the term of the third class of directors,
consisting of Edwin H. Wegman and Dr. Rainer Friedel, will expire at the Annual
Meeting in 2002. In each case, barring death, resignation or removal, each
director serves from the date of his election until the end of his term and
until his successor is elected and qualified. On November 22, 1999, pursuant to
a resolution adopted by the Company's Board of Directors, the number of
directors which constitutes the whole board was increased from six to seven
directors and John T. Lane was appointed to fill the vacancy resulting from such
increase.
Two persons will be elected at the Annual Meeting to serve as
director for a term of three years. The Company has nominated Thomas L. Wegman
and Dr. Paul A. Gitman as candidates for election. Unless authority is withheld,
the proxies solicited by management will be voted "FOR" the election of these
nominees. In case a nominee becomes unavailable for election to the Board of
Directors, an event which is not expected, the persons named as proxies, or
their substitutes, shall have full discretion and authority to vote or refrain
from voting for any other candidate in accordance with their judgment. The
election of directors requires a plurality vote of those shares voted at the
meeting. Each nominee has informed the Company that he will serve if elected.
The Board of Directors recommends that the stockholders vote "FOR"
each nominee for election to the Board of Directors.
Information Concerning Nominees for Director
The nominees for director have the positions with the Company and
principal occupations set forth in the table below.
<TABLE>
<CAPTION>
Age at Position With the Company Term
Name June 20, and Principal Occupation Director Since Expires
---- 2000 ------------------------ -------------- -------
----
<S> <C> <C> <C> <C>
Thomas L. Wegman 45 Director, Executive Vice President 1994 2000
Dr. Paul A. Gitman 59 Director; Director, Quality and Resource 1990 2000
Management, Long Island Jewish Medical
Center
</TABLE>
Thomas L. Wegman was Secretary and Treasurer of the Company from
inception to July 1997, at which time he assumed his current position. In
addition, he has held for the past five years similar positions with the
Company's subsidiaries, ABC-New York and ABC-Curacao.
Dr. Gitman has been Vice President, Clinical Care and Resource
Management at Long Island Jewish Medical Center since January 1, 1995 and prior
thereto was an independent physician engaged in the practice of internal
medicine with Spellman Mykoff & Gitman, MD., P.C.
4
<PAGE>
Information Concerning Continuing Directors
Each of the directors named in the following table will continue in
office after the Annual Meeting and until his term expires in the year indicated
and his successor is elected and qualified.
<TABLE>
<CAPTION>
Age at June Position With the Company Term
Name 20, 2000 and Principal Occupation Director Since Expires
---- -------- ------------------------ -------------- -------
<S> <C> <C> <C> <C>
Henry Morgan 79 Director; Senior partner of the law firm 1990 2001
Morgan, Melhuish, Monaghan, Arvidson,
Abrutyn & Lisowski
Dr. Louis Lasagna 76 Dean, Sackler School of Graduate 1999 2001
Biomedical Sciences; Dean for
Scientific and Academic Affairs
Tufts University School of Medicine
John T. Lane 58 Organizational consultant 1999 2001
Edwin H. Wegman 80 Chairman of the Board and President 1990 2002
Dr. Rainer Friedel 58 Director; Managing Director of 1995 2002
Biospecifics Pharma GmbH, the Company's
German subsidiary ("Pharma")
</TABLE>
Henry Morgan has had the principal occupation set forth in the table
above for the past five years.
Dr. Lasagna was appointed as a director of the Company effective June
28, 1999. He has been Dean of the Sackler School of Graduate Biomedical Sciences
since 1984, and Dean for Scientific and Academic Affairs since 1995, in each
case at Tufts University School of Medicine. Since 1998, he has served as
Chairman of the Board of the Tufts Center for the Study of Drug Development, an
independent, non-profit, multidisciplinary research organization affiliated with
Tufts University, committed to the exploration of scientific, economic, legal,
and public policy issues related to pharmaceutical and biopharmaceutical
research, development, and regulation throughout the world. Dr. Lasagna has been
a member of BioSpecifics' Scientific Advisory Board since 1997.
John T. Lane was appointed as a director effective November 22, 1999.
He has been an organizational consultant since 1994. He currently serves as a
director for Vytra HealthCare, Toyo Trust Company of New York, Acme Metals, and
Winthrop South Nassau University Health Care System. Mr. Lane retired from J.P.
Morgan & Co. in 1994 as Managing Director, Head of U.S. Private Clients.
Edwin H. Wegman has had the positions with the Company, principal
occupation and certain directorships set forth in the table above for the past
five years, and has held similar positions with the Company's subsidiaries,
Advance Biofactures Corporation ("ABC-New York") and Advance Biofactures of
Curacao ("ABC-Curacao"), for the past five years.
Dr. Rainer Friedel has been a director of the Company since November
1995 and managing director of BioSpecifics Pharma since January 1, 1996. Since
January 1994 to January 1, 1996, Dr. Friedel served as Chief Executive Officer
of GBM Technology Transfer and Technology Risk Assessment, GmbH. The Company and
Dr. Friedel have entered into an employment agreement effective January 1, 1999
pursuant to which Dr. Friedel has agreed to devote all of his working capacity
to the Company and its subsidiaries in Germany and the United States. In fiscal
2000, Dr. Friedel received a salary of $192,500 and options to purchase up to
15,000 shares of Common Stock at $1.875. Dr. Friedel is entitled to one year's
notice of the Company's termination of the employment agreement.
Executive Officers
In addition to the executive officers named above, the Company employs
Albert Horcher as its Secretary, Treasurer, and Principal Financial and Chief
Accounting Officer. Mr. Horcher, a certified public accountant, has served in
these positions since July 1997 and is 41 years old. From February 1991 to July
1997, he served as the Company's Controller and Principal Financial and Chief
Accounting Officer.
5
<PAGE>
In addition, he has held for the past five years similar positions with
the Company's subsidiaries, ABC-New York and ABC-Curacao. Executive officers are
elected annually by the Board of Directors and serve at the discretion of the
Board.
Board Meetings and Committees
The Board held five meetings during the last fiscal year. All directors
in office attended each meeting. The Board does not have nominating or
compensation committees. The Board has established an Audit Committee consisting
of Henry Morgan, and Dr. Paul A. Gitman, and a Stock Option Committee consisting
of Dr. Paul A. Gitman and Henry Morgan, and an Executive Committee consisting of
Edwin H. Wegman and Thomas L. Wegman. The function of the Audit Committee is to
(i) recommend selection of the Company's independent accountants, (ii) review
with the independent accountants the results of their audits, (iii) review with
the independent accountants and management the Company's financial reporting and
operating controls and the scope of audits, (iv) review all budgets of the
Company and its subsidiaries and (v) make recommendations concerning the
Company's financial reporting, accounting practices and policies and financial,
accounting and operating controls and safeguards and review matters relating to
the relationship between the Company and its auditors. The function of the
Executive Committee is, except for certain matters reserved to the full Board,
to exercise all of the powers of the Board in the management of the business of
the Company during intervals between Board meetings, if necessary. The function
of the Stock Option Committee is to administer the Company's 1991 Stock Option
Plan (the "1991 Plan"), the Company's 1993 Stock Option Plan (the "1993 Plan"),
and the Company's 1997 Stock Option Plan (the "1997 Plan"). The Audit Committee
met once during the 2000 fiscal year. The Stock Option and Executive Committees
did not meet during the 2000 fiscal year.
Executive Compensation
Officers
The following table sets forth information concerning compensation for
services rendered in all capacities awarded to, or earned by, certain of the
Company's executive officers for the fiscal years indicated. There are no other
officers who earned an aggregate salary and bonus in excess of $100,000 during
the fiscal year ended January 31, 2000. These executive officers also serve in
the same capacities in ABC-New York, and ABC-Curacao, except for Dr. Friedel.
Salaries of the executive officers are paid by the Company's subsidiary, ABC-New
York, including Dr. Friedel, who is paid approximately 50% of his salary by the
Company's subsidiary, BioSpecifics Pharma GmbH.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
------------------------------------------------------------------------------------------------
Annual Long-Term
Compensation Compensation
------------------------------------------------------------------------------------------------
Securities
Name and Principal Underlying
Position Fiscal Year Salary ($) Options (#)
------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Edwin H. Wegman 2000 405,169 -
President 1999 397,006 7,000
1998 373,861 83,500
------------------------------------------------------------------------------------------------
Thomas L. Wegman 2000 188,502 70,000
Executive 1999 175,092 4,300
Vice President 1998 157,028 4,000
------------------------------------------------------------------------------------------------
Rainer Friedel 2000 192,500 17,500
Managing Director 1999 176,458 15,000
1998 151,226 17,500
------------------------------------------------------------------------------------------------
Albert Horcher 2000 118,772 8,000
Secretary and 1999 114,593 2,000
Treasurer 1998 105,436 2,000
------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
The following table contains information concerning the grants of
stock options to the named executive officers of the Company during the fiscal
year ended January 31, 2000.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
-----------------------------------------------------------------------------------------------------------------------------------
Number of Securities
Underlying Options Percentage of Total
Granted (1),(2) Options Granted to
Name Employees in Fiscal Year Exercise or Base Price
($ Per Share) (3) Expiration Date
<S> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------------------------------
Edwin H. Wegman - - - -
-----------------------------------------------------------------------------------------------------------------------------------
Thomas L. Wegman 20,000 11.3% $3.00 7/14/09
50,000 28.2% $1.88 10/29/09
-----------------------------------------------------------------------------------------------------------------------------------
Rainer Friedel 17,500 9.9% $1.88 10/29/09
-----------------------------------------------------------------------------------------------------------------------------------
Albert Horcher 3,000 1.7% $3.00 7/14/09
5,000 2.8% $1.88 10/29/09
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) All outstanding options set forth in this table are currently
exercisable, except the options with expiration dates of 10/29/09,
which become exercisable on 10/29/00.
(2) These options were granted pursuant to the 1997 Plan.
(3) The exercise price is equal to the fair market value of the underlying
common stock on the date of grant.
The following table sets forth information concerning each exercise
of stock options during the 2000 fiscal year by each of the named executive
officers, along with the fiscal year-end value of unexercised options.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
------------------------------------------------------------------------------------------------------------------------------------
Number of Unexercised Options at Value of Unexercised In-the-Money
Fiscal Year-End (#) Options at Fiscal Year-End ($) (1)
------------------------------------------------------------------------------------------------------------------------------------
Name Shares Value
Acquired on Realized
Exercise (#) ($) Exercisable Unexercisable Exercisable Unexercisable
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Edwin H. Wegman - - 54,340 37,960 - -
------------------------------------------------------------------------------------------------------------------------------------
Thomas L. Wegman - - 60,800 50,000 - $29,700
------------------------------------------------------------------------------------------------------------------------------------
Rainer Friedel - - 57,500 17,500 - $10,395
------------------------------------------------------------------------------------------------------------------------------------
Albert Horcher - - 21,000 5,000 - 2,970
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The dollar values are calculated by determining the differences between
$2.47 per share, the fair market value of the Common Stock at January 31, 2000,
and the exercise price of the respective options and then multiplying this
amount by the number of shares underlying the options.
7
<PAGE>
Director Compensation
Dr. Paul Gitman and Mr. Henry Morgan each received $1,500 for attending
the Board meetings in fiscal year 2000. The Company has no specific policy for
compensating directors. In general, directors are usually compensated for
meetings attended in person at the Company's headquarters, at a rate of $1,500
per meeting.
8
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company's officers,
directors and persons who beneficially own more than ten percent of the Common
Stock to file reports of ownership and changes in ownership with the Securities
and Exchange Commission. These reporting persons also are required to furnish
the Company with copies of all Section 16(a) forms they file. To the Company's
knowledge, based solely on its review of the copies of such forms furnished to
it, the Company believes that all Section 16(a) reporting requirements were
complied with during the fiscal year ended January 31, 2000.
CERTAIN TRANSACTIONS
The S.J. Wegman Company owns Wilbur Street Corporation ("WSC"), which
has leased to ABC-New York a building serving as a manufacturing facility and
headquarters in Lynbrook, New York for over 30 years. The building also serves
as the Company's administrative headquarters. Edwin H. Wegman, the Company's
Chairman of the Board and President, is the President of WSC and the sole
general partner of The S.J. Wegman Company, a partnership. On January 30, 1998,
WSC and the Company entered into a triple net lease agreement which provides for
an annual rent starting at $125,000, which can increase annually by the amount
of annual increase in the Consumer Price Index for the greater New York
metropolitan region. The lease term is 7 years, expiring January 31, 2005. The
Company believes that the terms of this lease are reasonable and the rent
charged is no greater than that which would be charged by an unaffiliated
landlord for comparable facilities, based on appraisals of the property. The
Company subleases the remainder of the space subject to such lease, to an
unaffiliated entity for $24,000 per year, pursuant to a verbal lease agreement.
At January 31, 2000, the Company has advanced $37,174 to WSC, and has a 9%
non-amortizing mortgage, secured by the Company's headquarters building, from
WSC in the amount of $82,606.
During the year ended January 31, 2000, the chairman repaid a loan of
$75,000 outstanding at January 31, 1999, and the Company loaned an additional
$693,995 to the chairman during fiscal 2000. In addition, since the end of
fiscal year 2000 through May 22, 2000, the Company loaned the chairman an
additional $221,400. These loans are evidenced by a recourse secured promissory
note payable January 31, 2001 bearing interest at 9% per annum. The note is
collateralized with 618, 331 shares of the Company's common stock. On August 20,
1991, in order to evidence previous borrowings, Mr. Wegman executed a promissory
note made payable to ABC-New York in the principal amount of $56,820. The note
is payable upon demand and bears 9% interest.
The Company entered into a one-year consulting agreement with
Stephen A. Vogel (the "consultant") effective October 10, 1997. Mr. Vogel is a
son of a former member of the Company's Board of Directors. The agreement
provided that the consultant provide the Company with such advice, service,
consultation, and assistance as the Company would seek with respect to the
Company's financial matters and provide such other services as the Board of
Directors requests. The agreement provided for a consulting fee of $10,000 per
month and an option to purchase 100,000 shares of the Company's common stock at
$5.00 per share. The agreement also provided for the consultant to receive fees
if certain events occurred as a result of the consultant's actions or
recommendations. The Company reimbursed the consultant for out of pocket and
other expenses incurred in connection with rendering services. The agreement
expired on October 10, 1998. On January 10, 1999, the options expired without
exercise. Mr. Vogel continues to be retained on a month-to-month basis and
receives a consulting fee of $5,000 per month, and reimbursement for out of
pocket expenses. During fiscal 2000, the Company recorded general and
administrative expenses of $60,000 relating to this agreement, comprised of
consulting fees. During fiscal 1999, the Company recorded general and
administrative expenses of $131,580 relating to this agreement, comprised of
$101,580 of consulting fees and $30,000 for the estimated fair value of the
options granted on October 10, 1997. During fiscal 1998, the Company recorded
general and administrative expenses of $56,275 relating to this agreement,
comprised of $36,275 in consulting fees and $20,000 for the estimated fair value
of the options granted for the fiscal year.
9
<PAGE>
INDEPENDENT ACCOUNTANTS
The Company intends to use Grant Thornton LLP as its independent
auditors for the 2001 fiscal year. A representative of Grant Thornton LLP is
expected to be present at the meeting, will have the opportunity to make a
statement if he or she chooses and is expected to be available to respond to
appropriate questions.
KPMG LLP was previously the principal accountants for the Company. On
August 30, 1999, that firm's appointment as principal accountants was terminated
by the Registrant and Grant Thornton LLP was engaged as principal accountants.
The decision to change accountants was approved by the Executive Committee of
the Board of Directors of the Registrant.
In connection with the audits of the two fiscal years ended January 31,
1999, and the subsequent interim period through August 30, 1999, there were no
disagreements with KPMG LLP on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedures, which
disagreements if not resolved to their satisfaction would have caused them to
make reference in connection with their opinion to the subject matter of the
disagreement. The audit reports of KPMG LLP on the consolidated financial
statements of the Registrant as of and for the years ended January 31, 1998 and
January 31, 1999, did not contain any adverse opinion or disclaimer of opinion,
nor were they qualified or modified as to uncertainty, audit scope, or
accounting principles, except as follows:
KPMG LLP's auditors' report on the consolidated financial statements of
the Company as of and for the year ended January 31, 1999, contained a separate
paragraph stating that "The accompanying consolidated financial statements have
been prepared assuming that the Company will continue as a going concern. As
discussed in note 2 to the consolidated financial statements, the Company has
received a letter from the United States Food and Drug Administration regarding
the possible revocation of the Company's license to manufacture its primary
product which raises substantial doubt about the Company's ability to continue
as a going concern. Management's plans in regard to this matter are also
described in note 2. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty".
Grant Thornton LLP auditors' report on the consolidated consolidated
financial statements of the Company as of and for the year ended January 31,
2000, is unqualified, and as such does not contain the language contained in the
prior year opinion of KPMG LLP.
2001 STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the Annual
Meeting to be held following the end of the 2001 fiscal year for inclusion in
the proxy statement of the Company in accordance with Rule 14a-8 of the Exchange
Act must be received at the Company's offices by March 15, 2001. In addition, no
proposal by a stockholder submitted outside the process of Rule 14a-8 of the
Exchange Act shall be presented for vote at the Annual Meeting unless such
stockholder shall, not later than the close of business on the fifth day
following the date on which notice of the meeting is first given to
stockholders, provide the Board of Directors or the Secretary of the Corporation
with written notice of intention to present a proposal for action at the
forthcoming meeting of stockholders.
OTHER MATTERS
The Board of Directors knows of no matter which will be presented for
consideration at the meeting other than the matters referred to in this Proxy
Statement. Should any other matter properly come before the meeting, it is the
intention of the persons named in the accompanying proxy to vote such proxy in
accordance with their best judgment.
By Order of the Board of Directors,
/s/ Albert Horcher
-----------------------------------
Albert Horcher
Secretary
Lynbrook, New York
July 3, 2000
10
<PAGE>
BIOSPECIFICS TECHNOLOGIES CORP. - PROXY
Solicited By The Board Of Directors
for Annual Meeting To Be Held on August 3, 2000
The undersigned Stockholder(s) of BIOSPECIFICS TECHNOLOGIES CORP., a
Delaware corporation O (the "Company"), hereby appoints Edwin H. Wegman and John
T. Lane, or either of them, with full power X Y of substitution and to act
without the other, as the agents, attorneys and proxies of the undersigned, to
vote the shares standing in the name of the undersigned at the Annual Meeting of
Stockholders of the Company to be held on August 3, 2000 and at all adjournments
or postponements thereof. This proxy will be voted in accordance with the
instructions given below. If no instructions are given, this proxy will be voted
FOR all of the following proposals.
<TABLE>
<CAPTION>
<S> <C>
1. Election of the following Directors:
FOR all nominees listed below except as marked to the contrary below [ ]
WITHHOLD AUTHORITY to vote for all nominees listed bow [ ]
Thomas L. Wegman, Dr. Paul A. Gitman
Instruction: Withhold authority to vote for any individual nominee. Write that nominee's name in the
space below.
</TABLE>
-----------------------------
-----------------------------
<PAGE>
2. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment thereof.
Dated _____________________, 2000
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Signature
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Signature if held jointly
Please sign exactly as name appears above. When shares are held by
joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If
a corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name
by authorized person.
