Form 10KSB/A December 31, 2004

U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-KSB/A
(Mark One)

[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2004
Commission file number 0-12183

BOVIE MEDICAL CORPORATION
[Missing Graphic Reference]
(Exact name of small business issuer as specified in its charter)

Delaware No.
 
11-2644611
(State or other jurisdiction
 
(IRS Employer Identification No.)
of incorporation or organization)
 
 

734 Walt Whitman Rd., Melville, New York 11747
(Address of principal executive offices)

(631) 421-5452
(Issuer's telephone number)

Securities registered under Section 12(b) of the Exchange Act
Common Stock, $.001 Par Value
(Title of class)

Securities registered under Section 12(g) of the Exchange Act
None

Indicate by check mark whether the registrant (I) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No[ ]

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB any amendment to this Form 10-KSB. [ ]

Issuer’s revenues for its most recent fiscal year were $20,495,101.

The aggregate market value of the voting stock held by non-affiliates computed by reference to the price at which the stock was sold, or the average bid and asked prices of such stock, as of March 15, 2005 was approximately $26,528,577.

The number of shares of the registrant's $.01 par value common stock outstanding as of March 15 was 13,897,858.

Company Symbol-BVX Company SIC (Standard Industrial Code)-3841


EXPLANATORY NOTE

This amendment amends and updates Items 1, 8A,10 and 13, of Form 10KSB for the year ended December 31, 2004,as amended.



BOVIE MEDICAL CORPORATION
 
Part I

Item 1. Description of Business.

Background

Bovie Medical Corporation (“the Company” or “Bovie”) was incorporated in 1982, under the laws of the State of Delaware and has its principal executive office at 734 Walt Whitman Road, Melville, New York 11747.

Bovie is actively engaged in the business of manufacturing and marketing medical products and developing related technologies. Aaron Medical Industries, Inc. (“Aaron”), a 100% owned subsidiary based in St. Petersburg, Florida is engaged in marketing our medical products. Over the past several years, we changed our focus to the manufacture and marketing of generators and electrosurgical disposables, evidenced by the development of a broad range of electrosurgical generators designed for doctor’s offices, surgicenters and hospitals.
 
We manufacture and market products both under private label and the Bovie/Aaron label to distributors worldwide. Additionally, Bovie/Aaron has original equipment manufacturing (OEM) agreements with other medical device manufacturers. These OEM and private label arrangements and our use of the Bovie/Aaron label allow us to gain greater market share for the distribution of our products.

Company Products

Electrosurgery Products

We continue to expand our line of electrosurgery products, which include, generators, electrodes, electrosurgery pencils, and various ancillary disposable products. These products are used in surgery for the cutting and coagulation of tissue and constitute our largest product line. Our accessories for electrosurgery products are substantially compatible with most major manufacturers’ electrosurgery generator products. With the exception of OEM products, all of our electrosurgery generators and accessories are marketed using the internationally recognized Bovie trademark. It is estimated that 80% of all surgical procedures performed worldwide are accomplished by electrosurgery, including laparoscopic, as well as general surgery and surgical procedures in gynecology, urology, plastic surgery and dermatology.

Bovie/Aaron 800 and 900 High Frequency Generators

These products are low powered generators, designed primarily for dermatology and plastic surgery in a physician’s office. The units are 30-watt high frequency generators used mainly in doctors’ offices for removing small skin lesions and growths.

Bovie/Aaron 950

Bovie has developed the first high frequency generator with cut capacity for outpatient surgical procedures. It was designed mainly for use in doctors’ offices and is utilized in a variety of specialties including dermatology, gynecology, and plastic surgery.

Bovie/Aaron 1250

We have also developed a 120-watt multipurpose electrosurgery generator. The unit features monopolar and bipolar functions with pad sensing. The product is being produced in at least two private label formats in addition to the Bovie/Aaron label.
 

-1-

Bovie/Aaron 2250/IDS 300

Given the market interest in more powerful electrosurgical generators, we have developed a 200-watt multipurpose digital electrosurgery generator designed for the rapidly expanding surgi-center market in the United States. This unit features both monopolar and bipolar functions, has pad and tissue sensing, plus nine blended cutting settings. This unit has the capability to do most procedures performed today in the surgi-center or outpatient settings and was introduced in 2003. The Bovie® IDS Series are the latest electrosurgical generators with fully digital implementation. Bovie is using dedicated digital hardware instead of a general purpose controller for processing data. The digital hardware allows very high parallel data processing throughout the operation. All data is sampled and processed digitally. While 200 watts is more than enough power to do most procedures in the operating room, 300 watts is considered the standard and believed to be what most hospitals and surgi-centers will require. The Bovie IDS-300 has been designed based on a digital feedback system. The unit has a tissue sensing capability 20 times faster than the market leader. For the first time in electrosurgery, through digital technology, we are able to measure tissue impedance in real time (5000 times a second). As the impedance varies, the power is adjusted to deliver a consistent clinical effect.

Battery Operated Cauteries

Battery operated cauteries constitute our second largest product line. Cauteries were originally designed for precise hemostasis (to stop bleeding) in ophthalmology. The current use of cauteries has been substantially expanded to include sculpting woven grafts in bypass surgery, vasectomies, evacuation of subungual hematoma (smashed fingernail) and for arresting bleeding in many types of surgery. Battery operated cauteries are primarily sterile one-time use products. Bovie manufactures the broadest line of cauteries in the world, including but not limited to, a line of replaceable battery and tip cauteries, which are popular in overseas markets.

Battery Operated Medical Lights

We manufacture a variety of specialty lighting instruments for use in ophthalmology as well as patented specialty lighting instruments for general surgery, hip replacement surgery and for the placement of endotracheal tubes in emergency and surgical procedures. We also manufacture and market physicians office use penlights.

Nerve Locator Stimulator

Bovie manufactures a nerve locator stimulator primarily used for identifying motor nerves in hand and facial reconstructive surgery. This instrument is a self-contained, battery-operated unit, used for single surgical procedures.

New Products

Low Temperature Focused Plasma Technology (in development)

In February 2000, we entered into a Joint Venture Agreement with a non-affiliated German corporation, Jump Agentur Fur Elektrotechnik GMBH, wherein we have a 50% interest in the equity and a 50% interest in the profits of the joint venture. Pursuant to the agreement, Bovie initially advanced $200,000 to the partnership to cover costs of further research toward the production of two commercial prototypes. Bovie has made available its facilities in Florida for development, manufacturing and marketing of the products of the joint venture and is responsible to expend its best efforts to secure all necessary financing for the research, development and marketing of the products estimated to be an amount up to $1.5 millions. To date we have expended approximately $.5 million for the development of the technology. Based upon our current cash position, cash flows and credit facility we believe we have the financial resources to satisfy our obligations.

-2-


Pursuant to agreement, the joint venture acquired an exclusive license to produce and market any surgical/medical devices utilizing this technology. In fiscal 2004 and 2003, Bovie made additional advances to the joint venture in the form of research and development of prototypes expending $39,286 and $81,914 in development and engineering costs, respectively.
 
This technology utilizes a gas ionization process using only one working electrode. The device produces a stable thin focused beam of ionized gas that can be controlled in a wide range of temperatures and intensities, providing the surgeon with precision, minimal invasiveness and an absence of conductive currents during surgery.

The device has been developed and patented in both Europe and the United States. Bovie has constructed its first two pre-production prototypes for field-testing purposes as a prelude to eventual FDA submission and clearance for manufacturing. The initial intended uses are in the areas of dermatology, plastic surgery, cosmetology and gastroenterology.

To date there have been no revenues recorded by the joint venture.

GI Device (in development)

This new electrosurgical generator has been designed as a specialty electrosurgical niche product for the gastroenterological market. The device’s styling adds a new dimension to Bovie’s continued expansive array of generators. Additionally, the product is expected to be the basis for other new electrosurgical generator introductions.

Suture Removal Device (in development)

In October, 2003 we entered into an exclusive worldwide license agreement with Emergency Medicine Innovations, LLC., (EMI) a non-affiliated company, to manufacture and market a disposable suture removal device (patent pending). The device is expected to reduce time for removing stitches in a doctor’s office, medical clinic or emergency room. The device is designed to remove sutures with a tension free cut to be utilized in various medical procedures on humans and animals. We are presently developing pre-production prototypes and subject to FDA clearance for marketing, we have now targeted the last quarter of 2005 for release and marketing to medical professionals. We expended development funds of approximately $50,000 in 2004 and when the product begins selling we will pay a 6% royalty to EMI.

The exclusive license agreement provides for, among other things, a term of 15 years, with automatic 2-year renewals thereafter, subject to mutual agreement on minimum production and sales. Bovie has the right to terminate on 90-days notice to Licensor if it determines in its sole discretion that the product is non-competitive and not commercially viable. Licensor may terminate the agreement if Bovie violates a material term and does not cure the breach within 60-days after receipt of notice of default. In addition, Bovie may lose exclusivity if there is a 10% decrease in sales over a consecutive two calendar year period. Bovie may elect to retain exclusivity by paying sufficient royalties to off-set loss to Licensor due to the decreased sales.


Manufacturing, Marketing and Distribution

Bovie manufactures the majority of its products on its premises in St. Petersburg, Florida. Labor-intensive sub-assemblies and labor-intensive products may be out-sourced to our specification. Although we sell through distributors, we market our products through national trade journal advertising, direct mail, distributor sales representatives and trade shows, under the Bovie name, the Bovie/Aaron name and private label. Major distributors include Allegiance (a Cardinal Company), IMCO, McKesson Medical Surgical, Inc., NDC (Abco, Cida and Starline), Owens & Minor, and Physician Sales & Service.

-3-


We have a major OEM customer, Arthrex, Inc., for which we manufacture products on a private label basis, pursuant to agreement. The agreement provides, among other things, that we will be reimbursed for our expenses in developing products according to Arthrex’s specifications. Arthrex owns the technology and we may not generally compete with the product developed in Arthrex markets. The agreement further provides that Arthrex is not obliged to place any orders for the product developed, but if it does seek to place orders, it must place them with us. The agreement also generally provides for product warranties, insurance, termination, and confidentiality. In fiscal 2004, Arthrex orders represented approximately 29% of revenues for us. As such, should Arthrex determine to reduce or cease placement of orders for the products, our business will be adversely affected.

Competition

The medical device industry is highly competitive. Many competitors in this industry are well established, do a substantially greater amount of business, and have greater financial resources and facilities than we do.

We believe we rank third in the field of electrosurgical generator manufacturing and we sell our products and compete with other manufacturers in various ways. In addition to advertising, attending trade shows and supporting our distribution channels, we strive to enhance product quality, improve user friendliness and expand product exposure.

We also compete by private labeling our products for major distributors under their label. This allows us to have our product in the marketplace and thereby compete from two different approaches, our Aaron or Bovie label, and our customers private label. Our private label customers distribute our products under their name through their internal sales force. Our main competitors do not private label their products

Lastly, we only sell our product through distributors. Since we never sell direct to the end user we are participating with our distribution partners, and never competing with them. Many of the companies we compete with sell direct, thus competing directly with distributors they sometimes use.

Main competitors are Conmed, Valleylab (a division of Tyco), in the electrosurgery market and Xomed (a division of Medtronics) in the battery operated cautery market.
 
Government Regulation

United States

The Company’s products and research and development activities are subject to regulation by the FDA and other regulatory bodies. FDA regulations govern, among other things, the following activities:

·  
Product development
·  
Product testing
·  
Product labeling
·  
Product storage
·  
Pre-marketclearance or approval
·  
Advertising and promotion
·  
Product tractability, and
·  
Product indications

In the United States, medical devices are classified on the basis of control deemed necessary to reasonably ensure the safety and effectiveness of the device. Class I devices are subject to general controls. These controls include registration and listing, labeling, pre-market notification and adherence to the FDA Quality System Regulation. Class II devices are subject to general and special controls. Special controls include performance standards, post market surveillance, patient registries and FDA guidelines. Class III devices are those which must receive pre-market approval by the FDA to ensure their safety and effectiveness. Currently, we only manufacture Class I and Class II devices.

-4-

Manufacturing

Manufacturing and distribution of our products may be subject to continuing regulation by the FDA. We will also be subject to routine inspections by the FDA to determine compliance with the following:

·  
Quality System Regulations
·  
Medical device reporting regulations, and
·  
FDA restrictions on promoting products for unapproved or off-label uses.

In addition to regulations enforced by the FDA, we are also subject to regulations under the Occupational Safety and Health Act, the Environmental Protection Act and other federal, state and local regulations.

International

To market products in the European Union and countries other than the United States, we must obtain regulatory approval similar to that required by the FDA. All of our medical devices are classified as Class III devices under the European Medical Devices directive. Therefore, we were required to obtain a “CE Mark” certification from a “Notified Body” in one of the member countries in the European Union. CE Mark certification is an international symbol of adherence to quality assurance standards and compliance with the applicable European Medical Devices Directive.

Approval by a Notified Body typically includes a detailed review of the following:

·  
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.

Manufacturing and distribution of a device is subject to continued inspection and regulation by the Notified Body after CE Mark certification to ensure compliance with quality control and reporting requirements.

Pre-market notification clearance must be obtained for some Class I and most Class II devices when the FDA does not require pre-market approval. A pre-market approval application is required for most Class III devices. A pre-market approval application must be supported by valid scientific evidence to demonstrate the safety and effectiveness of the device. The pre-market approval application typically includes:

·  
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.

The approval process can be expensive, uncertain and lengthy. A number of devices for which FDA approval has been sought by other companies have never been approved for marketing. To date we have not experienced non-approval of any of our devices heretofore submitted to the FDA.

We obtained CE Mark certification to market our products in the European Union in 1999. In addition to CE Mark certification, each member country of the European Union maintains the right to impose additional regulatory requirements.

Outside of the European Union, regulations vary significantly from country to country. The time required to obtain approval to market products may be longer or shorter than that required in the United States or the European Union. Certain European countries outside of the European Union do recognize and give effect to the CE Mark certification. We are permitted to market and sell our products in those countries.
 
Patents and Trademarks

We own a total of twelve outstanding patents do not believe our current patents have a material effect on our operations. Although the useful lives of our existing patents have substantially diminished, we can give no assurance that competitors will not infringe on our patent rights or otherwise create similar or non-infringing competing products that are technically patentable in their own right.

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Liability Insurance

The manufacture and sale of medical products entail significant risk of product liability claims. Bovie currently maintains product liability insurance with combined coverage limits of $5 million on a claim made basis. There is no assurance that this coverage will be adequate to protect us from any liabilities we might incur in connection with the sale or testing of our products. In addition, we may need increased product liability coverage as products are commercialized. This insurance is expensive and in the future may not be available on acceptable terms, if at all.

Research and Development

The amount expended by us on research and development of its products during the years 2004 and 2003, totaled $907,389 and $717,347 respectively. We have not incurred any direct costs relating to environmental regulations or requirements.

Employees

Presently Bovie has a total of approximately 134 employees. These consist of 5 executives, 10 administrative, 6 sales, and 113 technical support and factory employees.

Significant Subsidiary - Aaron Medical Industries, Inc.

Aaron Medical Industries, Inc., is a Florida Corporation with offices in St. Petersburg, Florida. It is principally engaged in the business of marketing our medical products.

Item 8A. Disclosure Controls And Procedures

(a) Evaluation of disclosure controls and procedures

An evaluation of the effectiveness of the design and operation of Bovie’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) as of December 31, 2004 was carried out under the supervision and with the participation of Bovie’s management, including the President and Chief Executive Officer and the Chief Financial Officer (“the Certifying Officers”). Based on that evaluation, the Certifying Officers concluded that Bovie’s disclosure controls and procedures are effective.

Disclosure controls and procedures are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act is accumulated and communicated to management, including our President and Chief Financial Officer, as appropriate, to allow timely decisions and timely reporting regarding required disclosure.

(b) Changes in internal controls

There was no change to Bovie’s internal control over financial reporting during the quarter ended December 31, 2004 that materially affected, or is reasonably likely to materially affect, Bovie’s internal control over financial reporting.

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Item 10. Executive Compensation

The following table sets forth the compensation paid to the executive officers of the registrant for the three years ended December 31, 2004:

Summary Compensation Table
 
 
Long Term Compensation
 
Annual Compensation
Awards
 
Payouts
 
(a)
(b)
I
(d)
(e)
(f)
(g)
(h)
(i)
 
Name and Principal Position
 
Year
 
Salary($)
 
Bonus($)
 
Other Annual Compensation-($)*
 
Restricted Stock Award(s) ($)
 
Securities Underlying Options/ SARs(#)
LTIP Payouts ($)
 
All Other Compensation ($)
 
 
 
 
 
 
 
 
 
Andrew Makrides
President, CEO,
Chairman of
the Board
2004
$167,320
3,189
9,921
--
25,000
--
--
2003
$158,406
2,967
9,942
--
110,000
--
  
2002
$141,835
2,760
9,581
--
--
--
--
 
 
 
 
  
 
    
 
 
 
 
  
 
    
 
  
 
 
 
  
 
    
J. Robert Saron
President of Aaron
Medical and
Director
2004
$233,036
4515
16,533
--
25,000
--
--
2003
$219,786
4,200
15,568
--
110,000
--
--
2002
$200,545
3,907
15,533
--
--
--
--
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Moshe Citronowicz
Executive
Vice President-
Chief Operating
Officer
2004
$170,766
3,318
15,848
--
25,000
--
--
2003
$158,637
3,086
14,345
--
110,000
--
--
2002
$147,370
2,871
15,688
--
--
--
--
 
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
  
 
 
 
 
  
 
 
 
  
 
 
 
Charles
2004
$81,825
1,579
7,893
--
25,000
--
--
Peabody
2003
$77,221
1,532
6,216
--
60,000
--
--
Chief
2002
$76,227
1,532
6,051
-
--
--
--
Financial
  
 
 
 
 
 
 
 
Officer
  
 
 
 
 
 
 
 
(*) Other compensation consists of medical insurance and auto.
  
No options were granted or issued to any executive officer or director during fiscal year ending December 31, 2002. In 2003 and 2004, a total of 585,000 and 225,000 options were granted to executive officers and directors, respectively.
 

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Option Grants Table:

The following table sets forth, with respect to grants of stock options made during 2004 to each of the Named Executive Officers: (I) the name of the executive officer (column (a)); (ii) the number of securities underlying options granted (column (b)); (iii) the percent the grant represents of the total options granted to all employees during 2004; (iv) the per share exercise price of the options granted (column (d)); (v) the expiration date of the options (column (e)); and (vi) the potential realizable value of each grant, assuming the market price of the Common Stock appreciates in value from the date of grant to the end of the option term at a rate of (A) 5% per annum (column (f)) and (B) 10% per annum (column (g)).

Option Grants in 2004:

 
Individual Grants
 
Potential Realizable
Value at Assumed Annual Rates of Stock Price Appreciation for Option Term
Name
(a)
 
Number of Securities
Underlying Options Granted
(b)
% of Total Options
Granted to Employees in 2004
I
Exercise or Base Price per Share
(d)
Expiration Date
(e)
5%($)
(f)
10%($)
(g)
 
Charles Peabody(CFO)
25,000
6.76%
2.13
09/23/14
$ 33,383
$ 87,684
 
Moshe Citronowicz(COO)
25,000
6.76%
2.13
09/23/14
$ 33,383
$ 87,684
 
J. Robert Saron(2)
25,000
6.76%
2.13
09/23/14
$ 33,383
$ 87,684
 
Andrew Makrides(CEO)
25,000
6.76%
2.13
09/23/14
$ 33,383
$ 87,684

Total options granted were 370,000 which represents 100% of the options granted in 2004.

(1)  
Such options were granted at 100% of fair market value on the date of grant and become immediately exercisable as to the shares covered thereby.

(2) President of Aaron Medical.

-8-

 
Equity Compensation Plan Information:

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
 
 
 
 
 
 
 
 
3,951,200
 
$1.12
 
27,700
 
Total
 
 
3,951,200
 
1.12
 
27,700
 
The following table summarizes: 1. The options granted in the last fiscal year 2004 and 2. The aggregated option exercises in the last fiscal year and the fiscal year-end option values.

Aggregate Option/SAR Exercises in the Fiscal Year Ended December 31, 2004 and December 31, 2004 Option/SAR Values
(a)
(b)
I
(d)
(e)
Name
Shares Acquired on Exercise (#)
Value Realized ($)
Number of Securities Underlying Unexercised Options/SARs at December 31, 2004 (#)
Value of Unexercised In-the Money Options/SARs at December 31, 2004($)
       
Exercisable
Unexercisable
Exercisable
Unexercisable
Andrew Makrides
-
-
510,000
-
$ 849,150
-
Alfred Greco
-
-
360,000
-
615,650
-
George Kromer
-
-
415,000
-
690,475
-
Moshe Citronowicz
-
-
465,000
-
803,725
-
Rob Saron
-
-
530,000
-
901,200
-
Brian Madden
-
-
50,000
-
10,250
-
Michael Norman
-
-
25,000
-
10,250
-
Charles Peabody
-
-
110,000
-
119,400
-
Randy Rossi
-
-
  25,000
-
  10,250
-
 
 
 
 
 
 
  
  Total
-
-
 2,490,000
-
$ 4,010,350 
-
 

(1) Assumes $2.54 per share fair market value on December 31, 2004 which was the closing price on December 31, 2004, the last day of trading on NASDAQ in 2004.

In 2003, the Board of Directors adopted and shareholders approved Bovie’s 2003 Executive and Employee Stock Option Plan covering a total of one million two hundred thousand (1,200,000) shares of common stock issuable upon exercise of options to be granted under the Plan. In 2004, the Board of Directors granted 25,000 options to each Executive Officer and Director totaling 225,000 shares.

Outside Directors are compensated in their capacities as Board members through option grants. Our Board of Directors presently consists of J. Robert Saron, Andrew Makrides, Chairman CEO, and President, George W. Kromer, Jr., Alfred Greco and Brian Madden. For the past years, pursuant to a written agreement, Mr. Kromer has been retained by Bovie Medical Corporation as a business and public relations consultant on a month-to-month basis at an average monthly fee of $1,700. Mr. Greco is the managing director of Alfred V. Greco PLLC, a partner of Sierchio, Greco and Greco counsel to Bovie, to which Bovie paid legal fees of $63,650 during 2004.

There have been no changes in the pricing of any options previously or currently awarded.

In January, 2004, we extended employment contracts with certain of our officers for six years. The employment agreements provide, among other things, that the Executive may be terminated as follows:

(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 time of termination payable weekly. Employee shall not have to account for other compensation other sources or otherwise mitigate his damages due to such termination.

(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.

The following schedule shows all contracts and terms with officers of Bovie.


Bovie Medical Corporation
December 31, 2004
 
 
 
 
 
 
Contract
Expiration
Current
Auto
 
Date
Date(1)
Base Pay
Allowance
 
 
 
 
 
Andrew Makrides
01/01/98
1/31/2009(1)
$155,246
$ 6,067
J. Robert Saron
01/01/98
1/31/2009(1)
214,638
6,067
Moshe Citronowicz
01/01/98
1/31/2009(1)
161,521
6,067
Charles Peabody
08/18/03
08/18/2004(2)
77,479
--


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(1)  
Includes total extensions for six 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.

(2) If not cancelled 30 days prior to year-end, the contract automatically renews for one year periods.


Item 13.  Exhibits List and Reports on Form 8K

(a) Exhibits:

Exhibit 3.1
Articles of Incorporation*
Exhibit 3.2
By-Laws*
Exhibit 4.1
Copy of Stock Certificate *
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, filed with Form S-3 on November 23, 2004, which is incorporated here in by reference. This agreement is the subject of an application for confidential treatment.**
Exhibit 10.3
Distribution and Service Center Agreement  between Bovie and Symbol Medical Limited dated December 31, 2004**
   
Exhibit 10.4
Employment Agreement- Andrew Makrides**
Exhibit 10.5
Employment Agreement-J. Robert Saron**
Exhibit 10.6
Employment Agreement-Moshe Citronowicz**
Exhibit 10.7
Employment Agreement-Charles Peabody**
Exhibit 10.8
Amended Employment Agreement between Bovie and Andrew Makrides dated as of January 6, 2004.
Exhibit 10.9
Amended Employment Agreement between Bovie and J. Robert Saron dated as of January 6, 2004.
Exhibit 10.10
Amended Employment Agreement between Bovie and Moshe Citronowciz dated as of January 6, 2004.
Exhibit 10.11
License Agreement between Bovie and Emergency Medicine Innovations, LLC dated October 22, 2004.
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.
_____________________
 
* Incorporated by reference to Exhibits 3.1,3.2 and 4.1 to Form 10KSB/A for December 31, 2003 filed
With the SEC on February 16, 2005.
** Previously Filed



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 (b) 8K’s Filed in the Fourth Quarter

Two Form 8-K were filed in the fourth quarter of 2004.

(i)  
Filed on October 4, 2004 item 5 - other events reporting appointment of two new directors.
 
(ii) Filed on December 30, 2004 item 1.01 regarding a distribution agreement for the Far East.


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SIGNATURES

Pursuant to the requirements of the Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in Melville, New York on August 23, 2005.

 
Bovie Medical Corporation
 
 
 
 
 
 
By: /s/ Andrew Makrides 
 
Andrew Makrides
 
President
 
Chairman of the Board

 
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EXHIBIT INDEX


Exhibit 3.1
Articles of Incorporation*
Exhibit 3.2
By-Laws*
Exhibit 4.1
Copy of Stock Certificate *
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, filed with Form S-3 on November 23, 2004, which is incorporated here in by reference. This agreement is the subject of an application for confidential treatment.**
Exhibit 10.3
Distribution and Service Center Agreement  between Bovie and Symbol Medical Limited dated December 31, 2004**
   
Exhibit 10.4
Employment Agreement- Andrew Makrides**
Exhibit 10.5
Employment Agreement-J. Robert Saron**
Exhibit 10.6
Employment Agreement-Moshe Citronowicz**
Exhibit 10.7
Employment Agreement-Charles Peabody**
_____________________
 
* Incorporated by reference to Exhibits 3.1,3.2 and 4.1 to Form 10KSB/A for December 31, 2003 filed
With the SEC on February 16, 2005.
** Previously Filed


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