Delaware
No.
|
|
11-2644611
|
(State
or other jurisdiction
|
|
(IRS
Employer Identification No.)
|
of
incorporation or organization)
|
|
|
Part
I
|
|
Page
|
1
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||
5
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||
9
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||
9
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||
9
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||
9
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||
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Part
II
|
|
|
10
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||
10
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||
11
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||
22
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||
23
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||
23
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||
23
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||
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Part
III
|
|
|
24
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||
26
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||
30
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||
32
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||
33
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||
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Part
IV
|
||
· |
ICON
GI Device
|
· |
Bovie
Button
|
- |
Tip-On-Tube®
a disposable tip technology complementary to Bovie’s previously acquired
and announced Modular Ergonomic Grip (MEG) forceps. Bovie acquired
the MEG
technology in January 2006 and recently received Food and Drug
Administration (FDA) clearance to market the
product.
|
- |
A
new surgical handle platform called the Modullion® that allows a plurality
of electrical and mechanical modes to be used in conjunction with
reusable
and disposable mono and bipolar cartridges and is applicable to
most
endoscopic surgeries.
|
- |
Seal-N-Cut®
a family of endoscopic instruments used in monopolar and bipolar
vessel
and tissue cutting and sealing.
|
·
|
Product
development.
|
·
|
Product
testing.
|
·
|
Product
labeling.
|
·
|
Product
storage.
|
·
|
Pre-market
clearance or approval.
|
·
|
Advertising
and promotion.
|
·
|
Product
traceability, and
|
·
|
Product
indications.
|
·
|
Quality
System Regulations.
|
·
|
Medical
device reporting regulations, and
|
·
|
FDA
restrictions on promoting products for unapproved or off-label
uses.
|
·
|
Description
of the device and its components,
|
·
|
Safety
and performance of the device,
|
·
|
Clinical
evaluations with respect to the device,
|
·
|
Methods,
facilities and quality controls used to manufacture the device,
and
|
·
|
Proposed
labeling for the device.
|
·
|
Results
of bench and laboratory tests, animal studies, and clinical
studies,
|
·
|
A
complete description of the device and its components,
|
·
|
A
detailed description of the methods, facilities and controls
used to
manufacture the device, and proposed
labeling.
|
2006
|
|
High
|
Low
|
|
|
|
|||
1st
Quarter
|
$
|
3.70
|
$
|
2.89
|
2nd
Quarter
|
|
6.85
|
2.85
|
|
3rd
Quarter
|
|
9.23
|
6.01
|
|
4th
Quarter
|
|
10.14
|
6.61
|
|
|
|
|
|
|
2005
|
High
|
Low
|
||
1st
Quarter
|
$
|
3.05
|
$
|
2.20
|
2nd
Quarter
|
|
2.54
|
1.95
|
|
3rd
Quarter
|
|
2.44
|
1.60
|
|
4th
Quarter
|
|
2.99
|
2.05
|
2006
|
2005
|
2004
|
2003
|
2002
|
||||||
Sales,
net
|
$
26,676
|
$
20,211
|
$
20,495
|
$
16,551
|
$
12,447
|
|||||
Cost
of sales
|
16,075
|
12,649
|
12,638
|
9,435
|
7,191
|
|||||
|
||||||||||
Gross
Profit
|
10,601
|
7,562
|
7,857
|
7,116
|
5,256
|
|||||
|
||||||||||
Other
costs:
|
||||||||||
Research
and development
|
1,048
|
986
|
907
|
717
|
694
|
|||||
Professional
services
|
520
|
447
|
416
|
393
|
322
|
|||||
Salaries
and related costs
|
2,558
|
2,011
|
1,977
|
2,275
|
2,094
|
|||||
Selling,
general and administration
|
3,712
|
3,553
|
3,249
|
2,937
|
2,497
|
|||||
Development
cost - joint venture
|
139
|
161
|
39
|
82
|
124
|
|||||
|
||||||||||
Total
other costs
|
7,977
|
7,158
|
6,588
|
6,404
|
5,730
|
|||||
|
||||||||||
Income
from operations
|
2,624
|
404
|
1,269
|
712
|
(474)
|
|||||
|
|
|||||||||
Other
income and (expense):
|
||||||||||
Other
Income
|
245
|
2
|
||||||||
Interest
income
|
103
|
47
|
3
|
3
|
5
|
|||||
Interest
expense
|
(16)
|
(23)
|
(
15)
|
(34)
|
(48)
|
|||||
|
87
|
24
|
233
|
(31)
|
(41)
|
|||||
|
||||||||||
Net
income before income tax and minority expense
|
2,711
|
428
|
1,502
|
681
|
(515)
|
|||||
Minority
Interest in expense
|
20
|
10
|
10
|
|||||||
Income
tax expense
|
(942)
|
(164)
|
(541)
|
(246)
|
--
|
|||||
Income
tax benefit
|
894
|
132
|
541
|
246
|
--
|
|||||
|
|
|||||||||
Net
income (Loss)
|
$
2,683
|
$
406
|
$
1,512
|
$
681
|
$
(515)
|
|||||
|
||||||||||
Net
income (Loss) per common share:
|
||||||||||
Basic
|
$
0.19
|
$
0.03
|
$
0.11
|
$
0.05
|
$
(0.04)
|
|||||
Diluted
|
$
0.16
|
$
0.03
|
$
0.09
|
$
0.05
|
$
(0.04)
|
|||||
Financial
position:
|
||||||||||
Cash,
cash equivalents
|
$
2,953
|
$
1,295
|
$
2,294
|
$
306
|
$
379
|
|||||
Working
capital
|
8,081
|
5,501
|
5,551
|
3,837
|
3,085
|
|||||
Total
assets
|
16,686
|
11,771
|
11,169
|
9,234
|
8,501
|
|||||
Long-term
debt
|
418
|
0
|
348
|
380
|
412
|
|||||
Stockholders’
equity
|
$
14,060
|
$
9,802
|
$
9,257
|
$
7,450
|
$
6,491
|
Year
Ended
|
|||
December
31,
|
December
31,
|
December
31,
|
|
2006
|
2005
|
2004
|
|
Sales
|
100.0%
|
100.0%
|
100.0%
|
Cost
of sales
|
60.3
|
62.6
|
61.1
|
Gross
profit
|
39.7
|
37.4
|
38.9
|
Other
costs:
|
|||
R
& D
|
3.9
|
4.9
|
4.4
|
Professional
fees
|
2.0
|
2.6
|
2.0
|
Labor
|
9.6
|
9.6
|
9.6
|
SGA
|
13.9
|
17.6
|
16.4
|
Development
cost - joint venture
|
0.5
|
0.8
|
0.2
|
Total
other costs
|
29.9
|
35.4
|
32.6
|
|
|||
Income
from operations
|
9.8
|
2.0
|
6.2
|
|
|||
Other
income/expense
|
0.3
|
.1
|
1.2
|
|
|||
Net
income before taxes and minority expense
|
10.1
|
2.1
|
7.4
|
Minority
Interest
|
0.1
|
||
Income
tax expense
|
(3.5)
|
(.8)
|
(2.2)
|
Income
tax benefit
|
3.4
|
.7
|
2.2
|
|
|||
Net
income after taxes
|
10.1
|
2
|
7.4
|
Net
Sales (in thousands)
|
Percentage
|
||||||||||
Increase
|
Change
|
||||||||||
2006
|
2005
|
(Decrease)
|
2006/2005
|
||||||||
Domestic/international
sales (in
thousands)
|
|||||||||||
Domestic
|
|
$
23,431
|
$
16,830
|
|
$
6,601
|
|
|
39%
|
|||
International
|
|
|
3,245
|
3,381
|
|
(136)
|
|
|
(4%)
|
|
|
|
|
|
|
|
|
|
|||||
Total
net sales
|
|
$
26,676
|
$
20,211
|
|
6,465
|
|
32%
|
|
|||
Product
line sales:
|
|||||||||||
Electrosurgical
|
|
15,531
|
12,191
|
|
3,340
|
|
|
27%
|
|
||
Cauteries
|
|
|
5,846
|
5,462
|
|
384
|
|
|
7%
|
|
|
Other
|
|
|
5,299
|
2,558
|
|
2,741
|
|
|
107%
|
||
Total
net sales
|
|
$
26,676
|
$
20,211
|
|
$
6,465
|
|
|
32%
|
|
||
Net
Sales (in thousands)
|
Percentage
|
|||||||||||
Increase
|
Change
|
|||||||||||
2005
|
2004
|
(Decrease)
|
2005/2004
|
|||||||||
Domestic
|
|
$
|
16,830
|
17,506
|
|
(676
)
|
|
|
(4)
|
%
|
||
International
|
|
|
3,381
|
2,989
|
|
392
|
|
|
13
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total
net sales
|
|
$
|
20,211
|
20,495
|
|
(284)
|
|
(1)
|
|
|
||
Product
line sales:
|
||||||||||||
Electrosurgical
|
$
|
12,191
|
12,684
|
|
(493)
|
|
|
(4)
|
||||
Cauteries
|
5,462
|
5,460
|
|
2
|
|
|
--
|
|||||
Other
|
2,558
|
2,351
|
|
207
|
|
|
9
|
|||||
Total
net sales
|
$
|
20,211
|
20,495
|
|
(284)
|
|
|
(1)
|
||||
|
|
Payment
Period
|
|
|
2007
|
2008
|
2009
|
2010
|
|
Long-term
debt
|
-0-
|
-0-
|
-0-
|
-0-
|
Operating
leases
|
219
|
223
|
-0-
|
-0-
|
Unconditional
purchase obligations
|
5,033
|
-0-
|
-0-
|
-0-
|
|
|
Amount
of Commitment
|
|
|||||||
|
|
Total
|
Expiration
Per Period
|
|
||||||
|
|
Amount
|
Less
than
|
In
excess of
|
|
|||||
|
|
Committed
|
1
year
|
1
year
|
|
|||||
Secured
revolving credit agreement and other lines of credit
|
|
$
|
1.5
|
|
$
|
1.5
|
|
|
-0-
|
|
Name
|
Position
|
Director
Since
|
Andrew
Makrides
|
Chairman
of the Board, President, and CEO
|
December
1982
|
J.
Robert Saron
|
President
of Aaron Medical Industries, Inc. and Director
|
August
1994
|
George
Kromer
|
Internal
Auditor and Director
|
October
1995
|
Brian
Madden
|
Director
|
September
2003
|
Randy
Rossi
|
Director
|
September
2004
|
Michael
Norman
|
Director
|
September
2004
|
Moshe
Citronowicz
|
Executive
Vice President and Chief Operating Officer
|
September
2004
|
Gary
D. Pickett
|
Chief
Financial Officer
|
--
|
Vera
MacElroy
|
Secretary/Director
of Human Resources
|
--
|
Name
And
Principal
Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-
Equity
Incentive
Plan
Compensa-
Tion
Earnings
($)
|
Change
in
Pension
Value
and
Nonquali-
Fied
Deferred
Compensa-
Tion
Earnings
($)
|
All
Other
Compen-
Sation
($)
|
Total
($)
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
Andrew
Makrides
President,
CEO, Chairman of the Board
|
2006
2005
2004
|
$223,668* (1)
$186,418
$167,326
|
3,685
3,428
3,189
|
0
0
0
|
0
56,250
53,250
|
0
0
0
|
0
0
0
|
0
0
0
|
$227,373
$246,096
$223,759
|
Gary
D.
Pickett
Chief
Financial
Officer
|
2006
2005
2004
|
$66,442* (4)
0
0
|
1,731
0
0
|
0
0
0
|
0
0
0
|
0
0
0
|
0
0
0
|
0
0
0
|
$68,173
0
0
|
J.
Robert Saron
President
Aaron
Medical
and
Director
|
2006
2005
2004
|
$287,419* (2)
$256,173
$233,036
|
5,218
4,854
4,515
|
0
0
0
|
0
56,250
53,250
|
0
0
0
|
0
0
0
|
0
0
0
|
$292,637
$317,277
$290,801
|
Moshe
Citronowicz
Vice
President
Chief
Operating
Officer
|
2006
2005
2004
|
$249,257* (3)
$193,451
$170,766
|
3,834
3,567
3,318
|
0
0
0
|
0
56,250
53,250
|
0
0
0
|
0
0
0
|
0
0
0
|
$253,091
$253,268
$227,334
|
Vera
MacElroy
Secretary
Director
of
Human
Resources
|
2006
2005
2004
|
$68,394* (5)
$62,612
$59,817
|
1,350
1,250
1,133
|
0
0
0
|
0
0
0
|
0
0
0
|
0
0
0
|
0
0
0
|
$69,744
$63,862
$60,950
|
Plan
category
|
Number
of Securities
to
be issued upon
exercise
of
outstanding
options,
|
Weighted-average
exercise
price of
outstanding
options,
warrants
and rights
|
Number
of securities
remaining
available
for
future issuance
under
equity
compensation
plans
|
Equity compensation Plans approved by Security holders |
3,203,700
|
$1.49
|
66,000
|
Total |
3,203,700
|
$1.49
|
66,000
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
||
Name
|
Shares
Acquired on Exercise (#)
|
Value
Realized ($)
|
Number
of Securities Underlying Unexercised Options/SARs at December
31, 2006
(#)
|
Value
of Unexercised In-the Money Options/SARs at December 31,
2006($)
|
||
Exercisable
|
Unexercisable
|
Exercisable
|
Unexercisable
|
|||
Andrew
Makrides
|
70,000
|
$453,300
|
465,000
|
-
|
$
4,217,550
|
-
|
George
Kromer
|
70,000
|
372,400
|
370,000
|
-
|
3,355,900
|
-
|
Moshe
Citronowicz
|
-0-
|
-
|
465,000
|
-
|
4,217,550
|
-
|
Rob
Saron
|
34,340
|
254,603
|
232,500
|
-
|
2,108,775
|
-
|
Brian
Madden
|
-
|
-
|
85,000
|
-
|
770,950
|
-
|
Michael
Norman
|
-
|
-
|
60,000
|
-
|
544,200
|
-
|
Gary
D. Pickett
|
-
|
-
|
-
|
-
|
||
Randy
Rossi
Vera
MacElroy
|
-
-
|
-
-
|
50,000
5,000
|
-
|
453,500
45,350
|
-
|
|
|
|
|
|||
Total
|
174,340
|
$1,080,303
|
1,727,500
|
-
|
$
15,713,775
|
-
|
Name
|
Fees
Earned
Or
Paid
In
Cash
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
Incentive
Plan
Compensa-
tion
($)
|
Change
in Pension
Value
and
Nonqualified
Deferred
Compensation
Earnings
($)
|
All
Other
Compensa-
tion
($)
|
Total
($)
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
Brian
Madden
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Michael
Norman
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Randy
Rossi
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
(a) |
Upon
the death of the Executive and the Executive’s estate shall be paid the
basic annual compensation due the Employee pro-rated through the
date of
termination.
|
(b) |
By
the Resignation of the Executive at any time upon at least thirty
(30)
days prior written notice to Bovie; and Bovie shall be obligated
to pay
the Employee the basic annual compensation due him pro-rated to
the
effective date of termination,
|
(c) |
By
Bovie, for cause if during the term of the Employment Agreement
the
Employee violates the provisions of Paragraph 12 hereof, or is
found
guilty in a court of law of any crime of moral
turpitude.
|
(d) |
By
Bovie, without cause, with the majority approval of the Board of
Directors, at any time upon at least thirty (30) days prior written
notice
to the Executive: and Bovie shall be obligated to pay the Executive
compensation currently in effect including all bonuses, accrued
or
prorate, and expenses up to the date of termination. Thereafter,
for the
period remaining under the contract, Bovie shall pay the Executive
the
salary then in effect at the
|
(e) |
If
Bovie terminates the agreement, without cause, or fails to meet
its
obligations to the Executive on a timely basis, or if there is
a change in
the control of Bovie, the Executive may elect to terminate his
employment
agreement. Upon any such termination or breach of any of its obligations
under the Employment Agreement, Bovie shall pay the Executive a
lump sum
severance equal to three times the annual salary and bonus in effect
the
month preceding such termination or breach as well as any other
sums which
may be due under the terms of the Employment Agreement up to the
date of
termination.
|
Bovie
Medical Corporation
|
||||
December
31, 2006
|
||||
|
|
|
|
|
|
Contract
|
Expiration
|
Current
|
Auto
|
|
Date
|
Date(1)
|
Base
Pay
|
Allowance
|
|
|
|
|
|
Andrew
Makrides
|
01/01/98
|
1/31/2011(1)
|
$186,091
|
$
6,310
|
J.
Robert Saron
|
01/01/98
|
1/31/2011(1)
|
263,406
|
6,310
|
Moshe
Citronowicz
|
01/01/98
|
1/31/2011(1)
|
193,507
|
6,310
|
Steve
Livneh
|
10/02/06
|
11/01/2009(2)
|
150,000
|
6,310
|
(1) |
Includes
total extensions for eight years- Salaries increase annually pursuant
to a
contract formula. In the event of a change in control, each officers’
contract contains an option for each respective officer to resign
and
receive 3 years salary.
|
|
Number
of Shares
|
|
|
|
|
Nature
of
|
Percentage
of
|
||
Name
and Address
|
Title
|
Owned
(i)
|
Ownership
|
Ownership(i)
|
The
Frost National Bank
|
Common
|
1,000,000
|
Beneficial
|
6.6%
|
FBO
Renaissance
|
||||
US
Growth Investment
|
||||
Trust
PLC.
|
||||
Trust
no. W00740100
|
||||
|
||||
The
Frost National Bank
|
Common
|
1,000,000
|
Beneficial
|
6.6%
|
FBO,
BFS US Special
|
||||
Opportunities
Trust PLC.
|
||||
Trust
no. W00118000
|
|
||||
Bjurman
Barry & Associates
|
Common
|
790,731
|
Institutional
|
5.2%
|
Directors
and Officers
|
||||
Andrew
Makrides
734
Walt Whitman Road
Melville,
NY 11746
|
Common
|
850,800(ii)
|
Beneficial
|
5.6%
|
|
||||
George
Kromer
P.O.
Box 188
Farmingville,
NY 11738
|
Common
|
440,000(iii)
|
Beneficial
|
2.9%
|
J.
Robert Saron
7100
30th
Avenue North
St.
Petersburg, FL 33710
|
Common
|
399,681(iv)
|
Beneficial
|
2.6%
|
Brian
Madden
300
Garden City Plaza
Garden
City, NY 11530
|
Common
|
85,000
(vi)
|
Beneficial
|
.6%
|
|
||||
Mike
Norman
|
Common
|
60,000(vii)
|
Beneficial
|
.4%
|
410
Jericho Tpke.
|
||||
Jericho,
NY
|
||||
|
||||
Randy
Rossi
|
Common
|
50,000(viii)
|
Beneficial
|
.4%
|
2641
Kelliwood Circle
|
||||
Shrevesport,
LA
|
||||
Moshe
Citronowicz
7100
30th
Avenue North
St.
Petersburg, FL 33710
|
Common
|
639,591
(v)
|
Beneficial
|
4.2%
|
Gary
Pickett
|
-
|
-
|
-
|
-
|
7100
30th
Avenue North
St.
Petersburg, FL 33710
|
||||
Vera
MacElroy
7100
30th
Avenue North
St.
Petersburgh, FL 33710
|
Common
|
16,000
(ix)
|
Beneficial
|
-
|
Officers
and Directors as a group (9 Persons)
|
2,541,072(x)
|
16.8%
|
|
|
2006
|
2005
|
|
|||
Audit
Fees (1)
|
|
$
|
114,694
|
|
$
|
130,027
|
|
|
|
|
|
|
|
|
|
Non-Audit
Fees:
|
|
|
|
|
|
|
|
Related
Fees(2)
|
|
|
2,000
|
|
|
25,000
|
|
Tax
Fees(3)
|
|
|
8,000
|
|
|
5,000
|
|
All
other Fees(4)
|
|
|
--
|
|
|
--
|
|
Total
Fees paid to Auditor
|
|
$
|
124,694
|
|
$
|
160,027
|
|
|
Bovie
Medical Corporation
|
|
|
|
By:
/s/ Andrew Makrides
|
|
Andrew
Makrides
|
|
President
|
|
Chairman
of the Board
|
|
Bovie
Medical Corporation
|
|
|
|
/s/Gary
D. Pickett
|
|
Gary
D. Pickett
|
|
Chief
Financial Officer
|
|
Contents
|
|
|
|
|
|
F-1
|
|
|
|
F-3
|
|
|
|
F-4
|
|
|
|
F-5
|
|
|
|
F-7
|
|
|
|
Exhibit
4.2
|
Registration
Rights Agreement dated May 8, 1998
|
Exhibit
4.3
|
Assignment
of Registration Rights Agreement dated September, 2004
|
Exhibit
10.1
|
Joint
Venture Agreement dated February 25, 2000
Between
Bovie Medical Corporation and Jump Agentur fur
Elektrotechnik
GmBH
|
Exhibit
10.2
|
Agreement
between Bovie Medical Corporation and Arthrex Inc. dated June
2002
|
Exhibit
10.3
|
Distribution
and Service Center Agreement between Bovie Medical Corp and
Symbol Medical
Limited dated December 31, 2004
|
Exhibit
10.4
|
Employment
Agreement- Andrew Makrides
|
Exhibit
10.5
|
Employment
Agreement-Robert J. Saron
|
Exhibit
10.6
|
Employment
Agreement-Moshe Citronowicz
|
Exhibit
10.7
|
Amended
Employment Agreement between Bovie and Andrew Makrides dated
as of January
6, 2004.
|
Exhibit
10.8
|
Amended
Employment Agreement between Bovie and J. Robert Saron dated
as of January
6, 2004.
|
Exhibit
10.9
|
Amended
Employment Agreement between Bovie and Moshe Citronowicz dated
as of
January 6, 2004.
|
Exhibit
10.10
|
License
Agreement between Bovie and Emergency Medicine Innovations, LLC
dated
October 22, 2004.
|
Exhibit
10.11
|
Consulting
and Intellectual Property Assignment Agreement dated January
12, 2006
among Bovie, Henvil Corp. Ltd and Steve Livneh.
|
Exhibit
21.1
|
Consent
of Bloom & Co., LLP
|
Exhibit
31.1
|
Certification
pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
|
Exhibit
31.2
|
Certification
pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
|
Exhibit
32.1
|
Certification
pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
|
Exhibit
32.2
|
Certification
pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
|
_____________________
|
|
BLOOM
& CO., LLP 50 CLINTON STREET. HEMPSTEAD. NEW YORK 11550:
|
TEL:
516 - 486-5900
|
CERTIFIED
PUBLIC ACCOUNTANTS
|
FAX:
516 - 486-5476
|
|
|
STEVEN
BLOOM, CPA
FREDERICK
PAUKER, CPA
SIROUSSE
TABRIZTCHI, Ph.D. CPA
|
MEMBER
OF AMERICAN INSTITUTE OF
CERTIFIED
PUBLIC ACCOUNTANTS
|
|
|
2006
|
2005
|
|
|||
Current
assets:
|
|
|
|
|
|
||
|
|
|
|
|
|
||
Cash
|
|
$
|
2,952,892
|
|
$
|
1,295,266
|
|
Trade
accounts receivable, net
|
|
|
2,817,557
|
|
|
2,316,761
|
|
Inventories
|
|
|
3,609,301
|
|
|
2,996,832
|
|
Prepaid
expenses
|
|
|
402,423
|
|
|
335,492
|
|
Deferred
tax asset
|
|
|
386,200
|
|
|
386,200
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
||
Total
current assets
|
|
|
10,168,373
|
|
|
7,330,551
|
|
|
|
|
|
|
|
||
Property
and equipment, net
|
|
|
3,217,020
|
|
|
2,595,641
|
|
|
|
|
|
||||
Other
assets:
|
|
|
|
||||
|
|
|
|
||||
|
|
|
|||||
Brand
name/Trademark
|
|
|
1,509,662
|
1,509,662
|
|
||
Purchased
technology, net
|
|
|
1,529,330
|
33,663
|
|
||
License
rights
|
240,000
|
280,000
|
|||||
Deposits
|
|
|
21,215
|
21,215
|
|
||
|
|||||||
|
|
|
|
||||
|
|
|
3,300,207
|
1,844,540
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
Total
Assets
|
|
$
|
16,685,600
|
|
$
|
11,770,732
|
|
|
|
|
|
||||
|
|
|
|
||||
The
accompanying notes are an integral part of the financial
statements.
|
|
|
|
Current
liabilities:
|
|
2006
|
2005
|
|
|||
|
|
|
|
|
|
||
Accounts
payable
|
|
$
|
916,253
|
|
$
|
868,212
|
|
Accrued
expenses and other liabilities
|
|
|
743,768
|
|
|
471,006
|
|
Customers
deposits
|
|
|
91,198
|
|
|
--
|
|
Deferred
Revenue
|
|
|
173,986
|
|
|
141,586
|
|
Current
maturities of long term debt
|
|
|
161,948
|
|
|
348,328
|
|
|
|
|
|
|
|
||
Total
current liabilities
|
|
|
2,087,153
|
|
|
1,829,132
|
|
|
|
|
|
|
|
||
Mortgage
Payable-Non current
|
|
|
|
|
--
|
|
|
Liability
for purchased assets
|
418,150
|
||||||
Minority
interest
|
120,000
|
140,000
|
|||||
Stockholders'
equity:
|
|
|
|
|
|
||
|
|
|
|
|
|
||
Preferred
stock 10,000,000 shares
authorized,
none outstanding
|
|
|
|
|
|
||
|
|
|
|
|
|
||
Common
stock par value $.001;
40,000,000
shares authorized, 15,223,538 and 14,040,728
issued
and outstanding on December 31, 2006 and
December
31, 2005 respectively,
|
|
|
15,241
|
|
|
14,059
|
|
Additional
paid in capital
|
|
|
22,104,399
|
|
|
20,530,090
|
|
Accumulated
deficit
|
|
|
(8,059,343)
|
|
(10,742,549)
|
)
|
|
|
|
|
|
|
|
||
Total
stockholders' equity
|
|
|
14,060,297
|
|
|
9,801,600
|
|
|
|
|
|
|
|
||
Total
liabilities and stockholders' equity
|
|
$
|
16,685,600
|
|
$
|
11,770,732
|
|
The
accompanying notes are an integral part of the financial
statements.
|
|
|
|
|
|
|
2006
|
2005
|
2004
|
||||
Sales,
net
|
$
26,676,182
|
|
$20,211,141
|
$20,495,101
|
||
Cost
of sales
|
16,075,426
|
|
|
12,649,209
|
12,638,161
|
|
Gross
Profit
|
10,600,756
|
|
|
7,561,932
|
7,856,940
|
|
|
|
|
||||
Other
costs:
|
|
|
||||
Research
and development
|
1,048,175
|
|
|
985,807
|
907,389
|
|
Professional
services
|
519,861
|
|
|
447,346
|
415,606
|
|
Salaries
and related costs
|
2,558,170
|
|
|
2,010,599
|
1,977,053
|
|
Selling,
general and administration
|
3,711,795
|
|
|
3,553,022
|
3,249,050
|
|
Development
cost - joint venture
|
138,913
|
|
|
161,190
|
39,286
|
|
Total
other costs
|
7,976,914
|
|
|
7,157,964
|
6,588,384
|
|
|
|
|
||||
Income
from operations
|
2,623,842
|
|
|
403,968
|
1,268,556
|
|
|
|
|
|
|||
Other
income and (expense):
|
|
|
||||
Gain
from involuntary conversion of fixed assets
|
|
|
245,264
|
|||
Interest
income
|
103,088
|
|
|
46,959
|
3,263
|
|
Interest
expense
|
(16,157)
|
|
|
(22,703)
|
(
15,090
|
|
|
86,931
|
|
|
24,256
|
233,437
|
|
|
|
|
||||
Net
income before income tax and minority expense
|
2,710,773
|
|
|
428,224
|
1,501,993
|
|
Minority
Interest in expense
|
20,000
|
|
|
10,000
|
10,000
|
|
Income
tax expense
|
(941,458)
|
|
|
(164,016)
|
(541,000
|
|
Income
tax benefit
|
893,891
|
|
|
132,000
|
541,000
|
|
|
|
|
|
|
||
Net
income
|
$
2,683,206
|
|
$
406,208
|
$
1,511,993
|
||
Basic
earnings per common share
|
$
0.19
|
$
0.03
|
$
0.11
|
|||
|
|
|
|
|
|
|
Diluted
earnings per common share
|
$
0.16
|
$
0.03
|
$
0.09
|
|||
|
|
|||||
Weighted
average number
|
|
|||||
of
common shares outstanding
|
14,537,025
|
13,923,134
|
13,755,552
|
|||
|
|
|||||
Incremental
items:
|
|
|||||
Stock
options
|
2,372,078
|
1,827,150
|
2,422,329
|
|||
|
|
|
||||
Diluted
weighted average
|
|
|
||||
common
shares outstanding
|
16,909,103
|
15,750,284
|
16,177,881
|
|||
The
accompanying notes are an integral part of the financial
statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options
|
Common
|
Paid-
|
||||
|
Outstanding
|
Shares
|
Value
|
in
Capital
|
Deficit
|
Total
|
|
January
1, 2004
|
3,988,800
|
13,464,528
|
$
13,482
|
$
20,097,095
|
$
12,660,750)
|
$
7,449,827
|
|
|
|
|
|
|
|
|
|
Options
granted
|
370,000
|
--
|
--
|
--
|
--
|
--
|
|
|
|||||||
Options
exercised
|
(397,600)
|
397,600
|
399
|
294,312
|
--
|
294,711
|
|
|
|||||||
Options
forfeited
|
(10,000)
|
--
|
--
|
--
|
--
|
--
|
|
|
|||||||
Income
for period
|
--
|
--
|
--
|
--
|
1,511,993
|
1,511,993
|
|
|
|||||||
December
31, 2004
|
3,951,200
|
13,862,128
|
$
13,881
|
$
20,391,407
|
$
(11,148,757)
|
$
9,256,531
|
|
|
|
|
|
|
|
|
|
Options
granted
|
427,500
|
||||||
Options
exercised
|
(178,600)
|
178,600
|
178
|
138,683
|
138,861
|
||
Options
forfeited
|
(31,230)
|
||||||
Income
for period
|
406,208
|
406,208
|
|||||
December
31, 2005
|
|||||||
4,168,870
|
14,040,728
|
$
14,059
|
$
20,530,090
|
$
(10,742,549)
|
$
9,801,600
|
||
Options
granted
|
120,000
|
||||||
Options
exercised
|
(982,810)
|
982,810
|
982
|
794,944
|
795,926
|
||
Options
forfeited
|
(102,360)
|
||||||
Stock
based compensation
|
41,097
|
41,097
|
|||||
Stock
options issued to acquire assets
|
63,300
|
63,300
|
|||||
Stock
issued to acquire assets
|
200,000
|
200
|
674,968
|
675,168
|
|||
Income
for period
|
2,683,206
|
2,683,206
|
|||||
December
31, 2006
|
3,203,700
|
15,223,538
|
$
15,241
|
$
22,104,399
|
$
(8,059,343)
|
$
14,060,297
|
2006
|
2005
|
2004
|
||||||
Cash
flows from operating activities:
|
||||||||
Net
income
|
$
2,683,206
|
|
$
406,208
|
|
$
1,511,993
|
|
||
Adjustments
to reconcile net income to net cash
|
|
|
|
|
||||
provided
by operating activities:
|
|
|
|
|
||||
|
|
|
|
|
||||
Depreciation
and amortization
|
529,260
|
|
545,876
|
|
|
395,119
|
|
|
Write
down of inventories and parts
|
|
|
|
303,872
|
|
|||
Involuntary
conversion & write down of fixed assets
|
29,422
|
|
|
(
245,264)
|
||||
Stock-based
compensation
|
41,098
|
|
|
|
||||
Stock-based
expense for Henvil asset purchase
|
20,886
|
|||||||
Restricted
stock liability for asset purchase
|
418,150
|
|||||||
Change
in assets and liabilities:
|
|
|
|
|||||
Trade
receivables
|
(500,796)
|
|
(362,474)
|
|
(322,106)
|
|||
Prepaid
expenses
|
(66,931)
|
|
(
6,727)
|
|
61,260
|
|||
Inventories
and parts
|
(612,469)
|
|
(870,832)
|
|
249,503
|
|||
Accounts
payable
|
118,130
|
|
248,061
|
|
(59,641)
|
|||
Accrued
expenses
|
293,862
|
|
(133,476)
|
|
149,251
|
|
||
Deferred
Revenue
|
32,400
|
|
(
16,258)
|
|
--
|
|
||
Net
cash (applied to) provided by operations
|
2,986,218
|
(189,622)
|
2,043,987
|
|
||||
|
|
|
|
|
|
|||
Cash
flows from investing activities:
|
|
|||||||
Increase
in fixed assets
|
(1,130,627)
|
(908,283)
|
(606,505)
|
|||||
Decrease
(Increase) in security deposits
|
--
|
(
6,770)
|
(
4,975)
|
|||||
Purchase
of technology
|
(1,344,343)
|
(
2,001)
|
--
|
|||||
Involuntary
conversion of fixed assets
|
296,735
|
|||||||
|
||||||||
Net
cash used in investing activities
|
(2,474,970)
|
(917,054)
|
(314,745)
|
|||||
|
||||||||
Cash
flows from financing activities:
|
||||||||
Sale
of common stock
|
1,332,840
|
138,861
|
290,425
|
|||||
Reduction
in subscription receivable
|
4,286
|
|||||||
Reduction
in mortgage
|
(348,328)
|
(31,665)
|
(35,344)
|
|||||
Notes
payable
|
161,866
|
|||||||
Net
cash provided by financing activities
|
1,146,378
|
107,196
|
259,367
|
|||||
|
||||||||
Net
increase (decrease) in cash
|
1,657,626
|
(999,480)
|
1,988,609
|
|||||
|
||||||||
Cash
at beginning of year
|
1,295,266
|
2,294,746
|
306,137
|
|||||
|
||||||||
Cash
at end of year
|
$
2,952,892
|
$
1,295,266
|
$
2,294,746
|
|
||||||||
Cash
paid during the twelve months ended December 31:
|
2006
|
2005
|
2004
|
|||||
Interest
|
$
16,156
|
$
22,703
|
$
11,625
|
|||||
|
||||||||
Income
Taxes
|
$
32,557
|
$
22,015
|
$
--
|
|||||
The
accompanying notes are an integral part of the financial
statements.
|
|
|||||||
|
|
2006
|
2005
|
|
|||
Raw
materials (net of reserves)
|
|
$
|
1,640,254
|
|
$
|
1,139,730
|
|
Work
in process
|
|
|
1,351,540
|
|
|
1,267,991
|
|
Finished
goods
|
|
|
617,507
|
|
|
589,111
|
|
|
|
|
|
|
|
||
Total
|
|
$
|
3,609,301
|
|
$
|
2,996,832
|
|
December
31, 2006
|
|||
Cost
of Sales
|
$
3,409
|
||
Research
and Development
|
25,125
|
||
Salaries
and related costs
|
12,564
|
||
Total
|
$
41,098
|
|
|
2006
|
2005
|
|
|||
Trade
accounts receivable
|
|
$
|
2,904,774
|
|
$
|
2,495,457
|
|
Less:
allowance for doubtful accts
|
|
|
(
77,217)
|
(
119,490)
|
|||
allowance
for discounts
|
|
|
(
10,000)
|
(
59,206)
|
|||
|
|
|
|
|
|
|
|
Trade
accounts receivable, net
|
|
$
|
2,817,557
|
|
$
|
2,316,761
|
|
|
|
2006
|
2005
|
|
|||
|
|
|
|
|
|
||
Equipment
|
|
$
|
1,995,562
|
|
$
|
1,297,261
|
|
Building
|
|
|
791,618
|
|
|
791,618
|
|
Furniture
and Fixtures
|
|
|
1,221559
|
|
|
1,045,835
|
|
Leasehold
Improvements
|
|
|
894,478
|
|
|
731,001
|
|
Molds
|
|
|
725,165
|
|
|
661,462
|
|
|
|
|
5,628,382
|
|
|
4,527,177
|
|
|
|
|
|
|
|
||
Less:accumulated
depreciation
|
|
|
(2,411,362)
|
(1,931,536)
|
|||
|
|
|
|
|
|
||
Net
property, plant, and equipment
|
|
$
|
3,217,020
|
|
$
|
2,595,641
|
|
|
|
|
|
|
|
2007
|
|
$
|
218,522
|
|
2008
|
|
|
222,870
|
|
2009
|
|
|
-0-
|
|
2010
|
|
|
-0-
|
|
2011
|
|
|
-0-
|
|
|
|
$
|
441,392
|
|
|
|
2006
|
2005
|
|
|||
Indefinite
life assets:
|
|
|
|
|
|
||
Brand
name/Trademark (life indefinite)
|
|
$
|
1,509,662
|
|
$
|
1,509,662
|
|
Other
intangibles:
|
|
|
|
|
|
||
License
rights (20yr life)
|
|
|
240,000
|
|
|
280,000
|
|
Purchased
technology (5 yr life)
|
|
$
|
1,805,864
|
|
$
|
280,764
|
|
Less:
Accumulated amortization
|
|
|
(276,534)
|
|
(247,101)
|
||
|
|
|
|
|
|
||
Net
carrying amount
|
|
$
|
1,529,330
|
|
$
|
33,663
|
|
|
|
2006
|
2005
|
|
|||
Mortgage
payable
|
|
$
|
-0-
|
|
$
|
348,328
|
|
Line
of credit- bank
|
|
|
--
|
|
|
--
|
|
|
|
|
|
|
|
||
|
|
$
|
-0-
|
|
$
|
348,328
|
|
|
|
|
|
|
|
||
|
|
2006
|
2005
|
|
|||
|
|
|
|
|
|
||
Accounts
receivable (allowances)
|
|
$
|
30,526
|
|
$
|
62,544
|
|
Inventories
(reserves)
|
|
|
175,306
|
|
|
346,610
|
|
Net
operating loss carry forwards
|
|
|
1,328,109
|
|
|
2,222,000
|
|
Patent
rights, primarily due to
|
|
|
|
|
|
||
Amortization
|
|
|
(58,242)
|
|
(57,136)
|
||
|
|
|
|
|
|||
Total
gross deferred tax assets
|
|
|
1,475,699
|
|
2,574,018
|
|
|
Less:
Valuation allowance
|
|
|
(1,089,499
|
)
|
|
(2,187,818
|
)
|
|
|
|
|
|
|
||
Net
deferred tax assets - current
|
|
$
|
386,200
|
|
$
|
386,200
|
|
Year
loss
|
Expiration
|
Loss
|
Estimated
|
Incurred
|
Date
|
Amount
|
Tax
Asset
|
|
|
|
|
1995
|
2015
|
495,000
|
$
173,000
|
1998
|
2018
|
548,000
|
192,000
|
1999
|
2019
|
2,184,000
|
764,000
|
2002
|
2022
|
515,000
|
180,000
|
|
|
|
|
Total
|
|
$
3,742,000
|
$
1,309,000
|
Tax
at statutory rate
|
32.0%
|
State
income taxes, net of U.S. federal benefit
|
2%
|
Tax
benefit of loss carry forward
|
(32%)
|
|
|
Effective
tax rate
|
2%
|
· |
Tip-On-Tube®
a disposable tip technology complementary to Bovie’s previously acquired
and announced Modular Ergonomic Grip (MEG) forceps. Bovie acquired
the MEG
technology in January 2006 and recently received Food and Drug
Administration (FDA) clearance to market the
product.
|
· |
A
new surgical handle platform called the Modullion® that allows a plurality
of electrical and mechanical modes to be used in conjunction with
reusable
and disposable mono and bipolar cartridges and is applicable to
most
endoscopic surgeries.
|
· |
Seal-N-Cut®
a family of endoscopic instruments used in monopolar and bipolar
vessel
and tissue cutting and sealing.
|
|
|
2006
|
2005
|
|
|||
Amounts:
|
|
|
|
|
|
||
Revenue
from development in progress
|
|
$
|
463,926
|
|
$
|
203,857
|
|
|
|
|
|
|
|
|
|
Revenues
included in Gross Sales
|
|
$
|
463,926
|
|
$
|
203,857
|
|
|
|
|
|
|
|
||
Cost
of Research and Development contracts
|
|
|
|
|
|
||
included
in gross profit
|
|
$
|
452,585
|
|
$
|
203,857
|
|
Net
Sales (in thousands)
|
||
2006
|
2005
|
|
Domestic/international
sales (in thousands)
|
||
Domestic
|
$
23,431
|
$
16,830
|
International
|
3,245
|
3,381
|
Total
net sales
|
$
26,676
|
$
20,211
|
Product
line sales:
|
||
Electrosurgical
|
15,531
|
12,191
|
Cauteries
|
5,846
|
5,462
|
Other
|
5,299
|
2,558
|
Total
net sales
|
$
26,676
|
$
20,211
|
Exhibit
4.2
|
Registration
Rights Agreement dated May 8, 1998 (1)
|
Exhibit
4.3
|
Assignment
of Registration Rights Agreement dated September, 2004 (2)
|
Exhibit
10.1
|
Joint
Venture Agreement dated February 25, 2000
Between
Bovie Medical Corporation and Jump Agentur Fur
Elektrotechnik
GmBH
(3)
|
Exhibit
10.2
|
Agreement
between Bovie Medical Corporation and Arthrex Inc. dated June
2002
(4)
|
Exhibit
10.3
|
Distribution
and Service Center Agreement between Bovie Medical Corp and
Symbol Medical
Limited dated December 31, 2004
(5)
|
Exhibit
10.4
|
Employment
Agreement- Andrew Makrides (6)
|
Exhibit
10.5
|
Employment
Agreement-Robert J. Saron (7)
|
Exhibit
10.6
|
Employment
Agreement-Moshe Citronowicz (8)
|
Exhibit
10.7
|
Amended
Employment Agreement between Bovie and Andrew Makrides dated
as of January
6, 2004 (9)
|
Exhibit
10.8
|
Amended
Employment Agreement between Bovie and J. Robert Saron dated
as of January
6, 2004 (10)
|
Exhibit
10.9
|
Amended
Employment Agreement between Bovie and Moshe Citronowicz dated
as of
January 6, 2004 (11)
|
Exhibit
10.10
|
License
Agreement between Bovie and Emergency Medicine Innovations, LLC
dated
October 22, 2004 (12)
|
Exhibit
10.11
|
Consulting
and Intellectual Property Assignment Agreement dated January
12, 2006
among Bovie, Henvil Corp. Ltd and Steve Livneh
|
Exhibit
21.1
|
Consent
of Bloom & Co., LLP
|
Exhibit
31.1
|
Certification
pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
|
Exhibit
31.2
|
Certification
pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
|
Exhibit
32.1
|
Certification
pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
|
Exhibit
32.2
|
Certification
pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
|
_____________________
|
|
(1) Incorporated
by reference to Exhibit 4.2 of Form S-3 bearing file No. 333-120741
filed
on November 23, 2004.
(2) Incorporated
by reference to Exhibit 4.3 of Form S-3/A bearing file No.
333-120741.
(3) Incorporated
by reference to Exhibit 10.1 of Form KSB of Bovie Medical Corporation
for
12-31-04 filed on 3-31-05.
(4) Incorporated
by reference to Exhibit 99.1 of Form S-3/A filed on August 8,
2005 and has
been granted confidential treatment.
(5) Incorporated
by reference to Exhibit 10.3 of Form 10KSB for the period ended
12-31-04
filed on March 31, 2005.
(6) Incorporated
by reference to Exhibit 10.4 of Form 10KSB/A for December 31,
2004 filed
on 7-15-2005.
(7) Incorporated
by reference to Exhibit 10.5 of Form 10KSB/A for December 31,
2004 filed
on 7-15-2005.
(8) Incorporated
by reference to Exhibit 10.6 of Form 10KSB/A for December 31,
2004 filed
on 7-15-2005.
(9) Incorporated
by reference to Exhibit 10.8 of Form 10KSB/A for December 31,
2004 filed
on August 25, 2005.
(10) Incorporated
by reference to Exhibit 10.9 of Form 10KSB/A for December 31,
2004 filed
on August 25, 2005.
(11)
Incorporated by reference to Exhibit 10.10 of Form 10KSB/A for
December
31, 2004 filed on August 25, 2005.
(12) Incorporated
by reference to Exhibit 10.11 of Form 10KSB/A for December 31,
2004 filed
on August 25, 2005.
|