0001477932-15-002946.txt : 20150508 0001477932-15-002946.hdr.sgml : 20150508 20150508104408 ACCESSION NUMBER: 0001477932-15-002946 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 20150331 FILED AS OF DATE: 20150508 DATE AS OF CHANGE: 20150508 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BOVIE MEDICAL Corp CENTRAL INDEX KEY: 0000719135 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 112644611 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-31885 FILM NUMBER: 15844949 BUSINESS ADDRESS: STREET 1: 4 MANHATTANVILLE ROAD, SUITE 106 CITY: PURCHASE STATE: NY ZIP: 10577 BUSINESS PHONE: 800-537-2790 MAIL ADDRESS: STREET 1: 4 MANHATTANVILLE ROAD, SUITE 106 CITY: PURCHASE STATE: NY ZIP: 10577 FORMER COMPANY: FORMER CONFORMED NAME: BOVIE MEDICAL CORP DATE OF NAME CHANGE: 19990216 FORMER COMPANY: FORMER CONFORMED NAME: AN CON GENETICS INC DATE OF NAME CHANGE: 19920703 10-Q 1 bvx_10q.htm FORM 10-Q

  

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

 (Mark One)

 

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the Quarterly Period Ended March 31, 2015

 

OR

 

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the Period from _________ to _________

 

Commission file number 0-12183

 

BOVIE MEDICAL CORPORATION

(Exact name of registrant as specified in its charter)

  

Delaware

 

11-2644611

(State or other jurisdiction of incorporation or organization)

 

(IRS Employer Identification No.)

 

4 Manhattanville Road, Suite 106, Purchase, NY 10577

(Address of principal executive offices)

 

(914) 468-4009

 (Registrant’s telephone number, including area code)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 ¨

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

¨

Accelerated filer

¨

Non-accelerated filer

¨

Smaller reporting company

x

(Do not check if a smaller reporting company)

 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

 

The number of shares of the registrant's common stock $.001 par value outstanding as of May 5, 2015 was 23,876,751.

 

 

 

 

BOVIE MEDICAL CORPORATION

INDEX TO FORM 10-Q

FOR THE QUARTER ENDED MARCH 31, 2015

 

    Page  
     

Part I. Financial Information

 

 

 
       

Item 1.

Financial Statements

    3  

Consolidated Balance Sheets - March 31, 2015 and December 31, 2014

   

3

 

Consolidated Statements of Operations for the Three Months Ended March 31, 2015 and 2014

   

5

 

Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2015

   

6

 

Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2015 and 2014

   

7

 

Notes to Consolidated Financial Statements

   

8

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

   

15

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

   

24

 

Item 4.

Controls and Procedures

   

24

 
       

Part II. Other Information

 

 

 
       

Item 1.

Legal Proceedings

   

25

 

Item 1A.

Risk Factors

   

25

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

   

25

 

Item 3.

Defaults Upon Senior Securities

   

25

 

Item 4.

Mine Safety Disclosures

   

25

 

Item 5.

Other Information

   

25

 

Item 6.

Exhibits

   

26

 

Signatures

   

27

 

  

 
2

 

PART I. FINANCIAL INFORMATION

 

ITEM 1: FINANCIAL STATEMENTS

 

BOVIE MEDICAL CORPORATION

CONSOLIDATED BALANCE SHEETS

MARCH 31, 2015 AND DECEMBER 31, 2014

(in thousands)

 

    March 31,     December 31,  
    2015     2014  
    (Unaudited)      
Assets
Current assets:        
         
Cash and cash equivalents   $ 15,396     $ 5,733  
Restricted cash     839       899  
Trade accounts receivable, net     1,398       1,992  
Inventories, net     6,130       5,727  
Current portion of deposits     286       210  
Prepaid expenses and other current assets     1,011       804  
               
Total current assets     25,060       15,365  
               
Property and equipment, net     7,011       6,947  
Brand name and trademark     1,510       1,510  
Purchased technology and license rights, net     404       431  
Deposits, net of current portion     164       165  
Other assets     439       415  
               
Total assets   $ 34,588     $ 24,833  

 

The accompanying notes are an integral part of the consolidated financial statements.

 

 
3

  

BOVIE MEDICAL CORPORATION

CONSOLIDATED BALANCE SHEETS

MARCH 31, 2015 AND DECEMBER 31, 2014

(CONTINUED)

(in thousands)

 

    March 31,     December 31,  
    2015     2014  
    (unaudited)      
Liabilities and Stockholders' Equity
Current liabilities:        
Accounts payable   $ 1,876     $ 1,553  
Accrued payroll     118       197  
Accrued vacation     209       181  
Current portion of mortgage note payable     239       239  
Accrued and other liabilities     1,634       1,596  
               
Total current liabilities     4,076       3,766  
               
Mortgage note payable, net of current portion     3,113       3,173  
Deferred rents     22       23  
Deferred tax liability     563       564  
Derivative liabilities     622       12,613  
               
Total liabilities     8,396       20,139  
               
Commitments and Contingencies (see Notes 9 and 11)                
               
Series A 6% convertible preferred stock, par value $0.001; 3,500,000 shares authorized, zero issued and outstanding as of March 31, 2015     --       3,190  
               
Stockholders' equity:                
Series B convertible preferred stock, par value $.001;  3,588,139 issued and outstanding as of March 31, 2015     4       --  
Common stock, par value $.001 par value; 40,000,000 shares authorized; 23,335,894 issued and 23,192,815 outstanding as of March 31, 2015 and 17,995,409 issued and 17,852,330 outstanding as of December 31, 2014, respectively     23       18  
Additional paid-in capital     41,155       29,334  
Accumulated deficit   (14,990 )   (27,848 )
               
Total stockholders' equity     26,192       1,504  
               
Total liabilities and stockholders' equity   $ 34,588     $ 24,833  

 

The accompanying notes are an integral part of the consolidated financial statements.

 

 
4

  

BOVIE MEDICAL CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2015 AND 2014

(UNAUDITED) (in thousands except per share data) 

 

  Three Months Ended March 31,  
    2015     2014  
         
Sales   $ 6,128     $ 6,482  
Cost of sales     3,454       3,726  
               
Gross profit     2,674       2,756  
               
Other costs and expenses:                
Research and development     446       332  
Professional services     331       258  
Salaries and related costs     1,952       907  
Selling, general and administrative     2,217       1,201  
               
Total other costs and expenses     4,946       2,698  
               
Income (loss) from operations   (2,272 )     58  
               
Interest expense, net   (40 )   (28 )
Change in fair value of liabilities, net     1,444     (9,599 )
Total other income (expense), net     1,404     (9,627 )
               
Loss before income taxes   (868 )   (9,569 )
               
Provision for income taxes, net   (8 )   (38 )
               
Net loss   $ (876 )   $ (9,607 )
               
Accretion on convertible preferred stock   (222 )   (204 )
Deemed dividend on conversion of warrants and Series A preferred stock to Series B convertible preferred stock     13,956       0  
Net income (loss) attributable to common shareholders   $ 12,858     $ (9,811 )
               
Income (loss) per share                
Basic     0.69     (0.55 )
Diluted     0.57     (0.55 )
               
Weighted average number of shares outstanding- basic     18,615       17,684  
Weighted average number of shares outstanding - dilutive     20,470       17,684  

  

The accompanying notes are an integral part of the consolidated financial statements.

 

 
5

  

 BOVIE MEDICAL CORPORATION

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

FOR THE PERIOD ENDED MARCH 31, 2015

(unaudited) (in thousands)

 

    Preferred Stock     Common Stock    

Additional
Paid-in

         
    Shares     Par Value     Shares     Par Value     Capital     Deficit     Total  
December 31, 2014   -     -     17,854     $ 18     $ 29,334     $ (27,848 )   $ 1,504  
                                                       
Options exercised     -       -       5       -       11       -       11  
                                                       
Warrants exercised     -       -       198       -       438       -       438  
                                                       
Issuance of common stock     -       -       5,219       5       11,526       -       11,531  
                                                       
Conversion of Series A preferred stock and common warrants to Series B preferred stock     3,588       4       -       -       -       13,956       13,960  
                                                       
Stock based compensation     -       -       -       -       119       -       119  
                                                       
Stock swap to acquire options and warrants     -       -     (81 )     -     (273 )     -     (273 )
                                                       
Accretion on convertible preferred stock     -       -       -       -       -     (222 )   (222 )
                                                       
Net loss     -       -       -       -       -     (876 )   (876 )
                                                       
March 31, 2015     3,588     $ 4       23,195     $ 23     $ 41,155     $ (14,990 )   $ 26,192  

  

The accompanying notes are an integral part of the consolidated financial statements.

 

 
6

  

 BOVIE MEDICAL CORPORATION 

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2015 AND 2014

(unaudited) (in thousands) 

 

    2015     2014  
Cash flows from operating activities        
Net loss   $ (876 )   $ (9,607 )
Adjustments to reconcile net loss to net cash used in operating activities:                
Depreciation and amortization      190       232  
Amortization of intangible assets     27       --  
Provision for inventory obsolescence   (77 )     53  
Gain on disposal of property and equipment, net     --       4  
Stock based compensation     118       82  
Non cash other income - warrants   (1,444 )     9,599  
Provision (benefit) for deferred taxes     --       34  
Changes in current assets and liabilities:                
Trade receivables     594     (245 )
Prepaid expenses   (207 )   (437 )
Inventories   (327 )     95  
Deposits and other assets   (99 )   (203 )
Accounts payable      323     (29 )
Litigation settlement liability     --     (441 )
Accrued and other liabilities   (13 )   (186 )
Net cash used in operating activities   (1,791 )   (1,049 )
               
Cash flows from investing activities                
Purchases of property and equipment    (254 )   (75 )
Net cash used in investing activities   (254 )   (75 )
               
Cash flows from financing activities                
Proceeds from stock options/warrants exercised     177       --  
Change in restricted cash     60       --  
Change in  mortgage note payable   (60 )     3,592  
Proceeds from issuance of common shares, net     11,531       --  
Repayment of industrial revenue bonds     --     (3,257 )
Repurchase of warrants     --     (421 )
Net cash provided by (used in) financing activities     11,708     (86 )
               
Net change in cash and cash equivalents     9,663     (1,210 )
               
Cash and cash equivalents, beginning of period     5,733       7,924  
               
Cash and cash equivalents, end of period   $ 15,396     $ 6,714  

 

Cash paid during the three months ended March 31, 2015 and 2014 for:
Interest   $ 40     $ 28  
Income taxes  

$

-    

$

-  

 

The accompanying notes are an integral part of the consolidated financial statements.

 

 
7

    

BOVIE MEDICAL CORPORATION 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

(UNAUDITED)

 

NOTE 1. BASIS OF PRESENTATION

 

Unless the context otherwise indicates, the terms “we,” “our,” “us,” “Bovie,” and similar terms refer to Bovie Medical Corporation and its consolidated subsidiaries.

 

The accompanying unaudited consolidated financial statements have been prepared based upon SEC rules that permit reduced disclosure for interim periods. For a more complete discussion of significant accounting policies and certain other information, please refer to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2014. These financial statements reflect all adjustments that are necessary for a fair presentation of results of operations and financial condition for the interim periods shown, including normal recurring accruals and other items. The results for the interim periods are not necessarily indicative of results for the full year.

 

Certain amounts in the March 31, 2014 and December 31, 2014 financial statements have been reclassified to conform to the presentation in the March 31, 2015 financial statements.

 

NOTE 2. INVENTORIES

 

Inventories are stated at the lower of cost or market. Cost is determined principally on the average cost method. Inventories at March 31, 2015 and December 31, 2014 were as follows (in thousands):

 

    March 31,     December 31,  
    2015     2014  
         
Raw materials   $ 3,806     $ 4,162  
Work in process     1,729       1,230  
Finished goods     1,595       1,412  
Gross inventories     7,130       6,804  
Less: reserve for obsolescence   (1,000 )   (1,077 )
               
Net inventories   $ 6,130     $ 5,727  

   

 
8

 

NOTE 3. INTANGIBLE ASSETS

 

At March 31, 2015 and December 31, 2014 intangible assets consisted of the following (in thousands):

 

    March 31,     December 31,  
    2015     2014  
         
Trade name (life indefinite)   $ 1,510     $ 1,510  
               
Purchased technology (9-17 yr life)   $ 1,441     $ 1,441  
Less: accumulated amortization   (1,037 )   (1,010 )
               
Net carrying amount   $ 404     $ 431  
               
License rights (5 yr life)   $ 316     $ 316  
Less accumulated amortization   (316 )   (316 )
Net carrying amount  

$

-    

$

-  

  

Amortization of intangibles, which is included in depreciation and amortization in the accompanying statements of cash flows, was approximately $27,000 and $49,000 during the respective three month periods ended March 31, 2015 and 2014.

 

NOTE 4. NEW ACCOUNTING PRONOUNCEMENTS

 

We have reviewed recently issued standards and have determined they will not have a material impact on our consolidated financial statements, or do not apply to our operations.

 

NOTE 5. FAIR VALUE MEASUREMENTS

 

Certain assets and liabilities that are measured at fair value on a recurring basis are measured in accordance with FASB ASC Topic 820-10-05, Fair Value Measurements. FASB ASC Topic 820-10-05 defines fair value, establishes a framework for measuring fair value and expands the disclosure requirements regarding fair value measurements for financial assets and liabilities as well as for non-financial assets and liabilities that are recognized or disclosed at fair value on a recurring basis in the financial statements.

 

The statement requires fair value measurement be classified and disclosed in one of the following three categories:

 

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

 

Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

 

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

 

Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to their fair value measurement. Our derivative financial instruments that are measured at fair value on a recurring basis are all measured at fair value using Level 3 inputs. Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

 

 
9

  

The following represents a reconciliation of the changes in fair value of warrants measured at fair value using Level 3 inputs during the quarter ended March 31, 2015: 

 

(in $ thousands)   2013
Investor Warrants
    2013
Placement Agent Warrants
    2010
Investor Warrants
    2010
Placement Agent Warrants
    Total  
                     
Balance, December 31, 2014   $ 10,546     $ 998     $ 1,065     $ 4     $ 12,613  
                                       
Issuances     -       -       -       -       -  
                                       
Exchange of warrants (1)   (10,546 )     -       -       -     (10,546 )
                                       
Change in fair value     -     (597 )   (845 )   (2 )   (1,444 )
                                       
Balance, March 31, 2015 (2)  

$

-     $ 401     $ 220     $ 2     $ 622  

______________

(1)

Represents the fair value carrying amount of 5,250,000 warrants that, along with 3,500,000 Series A Preferred shares, were exchanged for 3,588,139 shares of Series B Preferred stock exercisable into 7,176,298 shares of common stock. Resulting in a deemed dividend to the preferred shareholders of $13,956,000.

 

 

(2)

The warrants are valued using a trinomial lattice valuation methodology because that model embodies all of the relevant assumptions that address the features underlying these instruments. Significant assumptions used in the model at March 31, 2015 included the market price of our common stock, an expected dividend yield of zero, the remaining period to the expiration date of the warrants, expected volatility of our common stock over the remaining life of the warrants of 51.6%, estimated based on a review of our historical volatility, and risk-free rates of return of 0.12% for the 2010 warrants and 1.65% for the 2013 warrants based on constant maturity rates published by the U.S. Federal Reserve, applicable to the remaining life of the warrants. We also take into consideration a probability assumption for anti-dilution.

   

 
10

 

NOTE 6. EARNINGS PER SHARE (in thousands, except EPS)

 

We compute basic earnings per share (“basic EPS”) by dividing the net loss by the weighted average number of common shares outstanding for the reporting period. Diluted earnings per share (“diluted EPS”) gives effect to all dilutive potential shares outstanding (primarily stock options). The following table provides the computation of basic and diluted earnings per share for the three month periods ending March 31, 2015 and 2014.

 

    Three Months Ended  
  March 31,  
(in thousands, except per share data)   2015     2014  
Numerator:        
Net income (loss) available to common shareholders   $ 12,858     $ (9,811 )
Effect of dilutive securities                
Derivative liability - warrants   $ (1,444 )  

$

-  
Accretion on  convertible preferred stock   $ 222    

$

-  
Numerator for diluted income (loss) per common share   $ 11,636     $ (9,811 )
               
Denominator:                
Weighted average shares used to compute basic income (loss) per common share     18,615       17,684  
Effect of dilutive securities:                
Derivative liability - warrants     326       -  
Convertible preferred stock     1,116       -  
Stock options     413       -  
Denominator for diluted income (loss) per common share     20,470       17,684  
               
Basic income (loss) per common share   $ 0.69     $ (0.55 )
Diluted income (loss) per common share   $ 0.57     $ (0.55 )

  

For the three months ended March 31, 2014, options and warrants to purchase approximately 7.5 million shares of common stock respectively, were excluded from the computation of diluted earnings per share because their effects were anti-dilutive. For the three months ended March 31, 2014, the conversion of Series A Preferred Stock into 3,500,000 shares of common stock was excluded from the computation of diluted earnings per share because its effect is anti-dilutive. 

 

NOTE 7.   STOCK-BASED COMPENSATION

 

Under our stock option plan, our board of directors may grant options to purchase common shares to our key employees, officers, directors and consultants. We account for stock options in accordance with FASB ASC Topic 718, Compensation – Stock Compensation, with option expense amortized over the vesting period based on the trinomial lattice option-pricing model fair value on the grant date, which includes a number of estimates that affect the amount of our expense. During the three months ended March 31, 2015, we expensed approximately $118,575 in stock-based compensation.

 

 
11

  

Activity in our stock options during the period ended March 31, 2015 was as follows:

 

  Number of     Weighted Average Exercise Price  
  Options      
  (in thousands)      
         
Outstanding at December 31, 2014   2,864     $ 3.69  
               
Granted     40     $ 3.58  
Exercised   (5 )   $ 2.25  
Cancelled     -    

$

-  
Outstanding at March 31, 2015     2,899     $ 3.69  

  

The grant date fair value of options granted during the first three months of 2015 were estimated on the grant date using a trinomial lattice option-pricing model and the following assumptions: expected volatility of 54%, expected term of between 5-8 years, risk-free interest rate of 0.02%, and expected dividend yield of 0%.

 

Expected volatility is based on a five year average of the historical volatility of the Company's stock. Previous to December 2013, we used a weighted average of our historical volatility combined with a peer group of companies’ volatility, which had openly traded stock options on the options market and weighted to percentages relative to our stock and the peer group at a 50%/50% weighting. The risk-free rate is based on the rate of U.S. Treasury zero-coupon issues with a remaining term equal to the expected life of the options. The Company uses historical data to estimate pre-vesting forfeiture rates.

 

During the three months ended March 31, 2015, we issued 5,000 shares upon the exercise of outstanding stock options.

 

NOTE 8. INCOME TAXES

 

We utilize the liability method of accounting for income taxes as set forth in ASC 740. Under the liability method, deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect during the years in which the basis differences reverse. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized. In determining the need for valuation allowances we consider projected future taxable income and the availability of tax planning strategies.

  

We have deferred tax assets mainly from net operating loss and tax credit carry forwards available in certain jurisdictions. During the fourth quarter 2014, management concluded that it is more likely than not that the Company will not realize its net deferred tax assets, and the Company establish a full valuation against it net deferred tax assets with finite life.

  

We assess our income tax positions and record tax benefits for all years subject to examination based upon our evaluation of the facts, circumstances and information available as of the reporting date. For those tax positions where there is a greater than 50% likelihood that a tax benefit will be sustained, we have recorded the largest amount of tax benefit that may potentially be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where there is less than 50% likelihood that a tax benefit will be sustained, no tax benefit has been recognized in the financial statements.

  

Since inception, we have been subject to tax by both federal and state taxing authorities. Until the respective statutes of limitations expire (which may be as much as 20 years while we have unused NOL’s), we are subject to income tax audits in the jurisdictions in which we operate.

 

 
12

  

NOTE 9. COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS

 

In March 2014, we entered into a lease for offices located in Purchase, New York. The lease is for 3,650 square feet of office space.

 

The following is a schedule of approximate future minimum lease payments under operating leases having remaining terms in excess of one year as of March 31, 2015 for the calendar years ended December 31, 2015 and 2016 (in thousands):

 

2015 $ 81
2016 111
Therafter 378
Total $ 570

  

Rent expense approximated $27,000 and $12,000 for the three month periods ending March 31, 2015 and 2014 respectively.

 

Other future contractual obligations for agreements with initial terms greater than one year and agreements to purchase materials in the normal course of business are summarized as follows (in thousands):

 

    Years Ending December 31,  
Description   2015     2016     2017  
Purchase commitments   $ 4,574    

$

-    

$

-  
Long-term debt     239       239       2,874  
Total   $ 4,813     $ 239     $ 2,874  

  

Litigation

 

In the normal course of business, we are subject, from time to time, to legal proceedings, lawsuits and claims. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. If any of these matters arise in the future, it could affect the operating results of any one or more quarters.

 

We expense costs of litigation related to contingencies in the periods in which the costs are incurred.

 

Concentrations

 

Our ten largest customers accounted for approximately 65.6% and 58.7% of net revenues for the three months ended March 31, 2015 and 2014 respectively. For the three months ended March 31, 2015, McKesson, NDC, and Medline accounted for 18.9%, 13.8% and 11.0% of our sales, while for the same three month period ended in 2014, Arthrex accounted for 10.1% of our sales.

 

NOTE 10.  RELATED PARTY TRANSACTIONS

 

A relative of Moshe Citronowicz, Bovie’s Senior Vice President, is considered a related party. Arik Zoran is a consultant of the Company doing business as AR Logic, Inc., a consulting firm owned by Arik Zoran, Mr. Citronowicz’s brother. On March 1, 2013 the Company amended the Consulting Services Agreement dated January 2011, extending the term of the existing agreement until December 31, 2014. The agreement shall automatically renew for additional one year periods, unless either party gives written notice of its desire not to renew at least one year prior to the expiration of the initial Term or renewal term. The agreement with AR Logic provides for a monthly retainer for engineering support for our existing generator product line and a separate hourly based fee structure for additional consulting related to new product lines. AR Logic has a royalty contract with us related to the creation and design of proprietary technology that is used in some of our generators. AR Logic was paid consulting fees of approximately $71,610 and $89,000 during the three months ended March 31, 2015 and 2014, respectively.

 

A second relative of Mr. Citronowicz is considered a related party. Yechiel Tsitrinovich is also a brother of Mr. Citronowicz, and acts as a consultant to the Company related to research and development of certain products. Mr. Tsitrinovich has a royalty contract with us related to the creation and design of a proprietary technology that is used in some of our generators. Mr. Tsitrinovich was paid a combination of consulting fees and royalties on previous product designs approximating $23,763 and $18,700 during the three months ended March 31, 2015 and 2014, respectively.

  

 
13

 

NOTE 11. LONG TERM DEBT

 

On March 20, 2014, the Company entered into a transaction with The Bank of Tampa, a Florida banking corporation (“Lender”) wherein Lender extended to the Company a mortgage loan in the principal amount of $3,592,000 (the “Loan”). The obligations under the Loan are secured by a first mortgage and security interest in the Company’s Clearwater, Florida facility as well as an assignment of the Company’s accounts receivable. In addition, the Company has pledged an interest in a certificate of deposit in the amount of $839,000 as additional collateral. The amount of the additional collateral required declines on a pro rata basis as principal is paid. The initial maturity date of the Loan is March 20, 2017; however the Company has an option to extend the maturity date until March 20, 2022.

 

Borrowings under the Loan bear interest at LIBOR plus 3.5%, with a fixed monthly principal payment of $19,956. The interest rate at March 31, 2015 was 3.681%

 

The Loan documents contain customary financial covenants, including a covenant that the Company maintains a minimum liquidity of $750,000. Although there is no Debt Service Coverage Ratio (as defined in the Loan Agreement) for the initial term of the Loan, should the Company desire to extend the Loan beyond three years, the Company must maintain a Debt Service Coverage Ratio for each of the preceding four quarters of not less than 1.0 to 1.0. In the event the Loan is extended, the Debt Service Coverage Ratio must not be less than 1.2 to 1.0.

  

NOTE 12. GEOGRAPHIC AND PRODUCT LINE INFORMATION

  

International sales represented approximately 14.7% of total revenues for the first three months of 2015, as compared with 17.0% for the first three months of 2014.

   

Three months ended
March 31,
Percent
2015 2014 Change
Sales by Domestic and International (in 000's)            
Domestic   $ 5,225     $ 5,381     -2.9 %
International     903       1,101       -18.0 %
                       
Total   $ 6,128     $ 6,482       -5.5 %

  

Although we have only one reporting segment, beginning in 2014, management began analyzing revenue and other operating metrics across three operating categories.

  

Sales by Operating Category (in 000's)            
Core   $ 5,525     $ 5,431     1.7 %
OEM     320       1,020       -68.6 %
J-Plasma     283       31       812.9 %
                       
Total   $ 6,128     $ 6,482       -5.5 %

  

End of financial statements

 

 
14

  

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

You should read the following discussion and analysis in conjunction with our financial statements and related notes contained elsewhere in this report. This discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of a variety of factors discussed in this report and those discussed in other documents we file with the SEC. In light of these risks, uncertainties and assumptions, readers are cautioned not to place undue reliance on such forward-looking statements. These forward-looking statements represent beliefs and assumptions as of the date of this report. While we may elect to update forward-looking statements and at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change. Past performance is no guaranty of future results.

 

Executive Level Overview

 

Bovie Medical Corporation (“Company”, “Bovie Medical”, “we”, “us”, or “our”) was incorporated in 1982, under the laws of the State of Delaware and has its principal executive office at 4 Manhattanville Road, Suite #106, Purchase, New York 10577.

 

We are an energy-based medical device company specializing in developing, manufacturing, and marketing a range of electrosurgical products and technologies, as well as related medical products used in doctor’s offices, surgery centers and hospitals worldwide. Our medical devices are marketed through Bovie’s own well-respected brands (Bovie®, Aaron®, IDS and ICON) and on a private label basis to distributors throughout the world. The Company also leverages its expertise in the design, development and manufacturing of electrosurgical equipment by producing equipment for large, well-known medical device manufacturers through original equipment manufacturing (OEM) agreements.

 

We are also the developer of J-Plasma®; a patented plasma-based surgical product which we believe has the potential to be a transformational product for surgeons. J-Plasma utilizes a helium ionization process that produces a stable, focused beam of ionized gas that provides surgeons with greater precision, minimal invasiveness and an absence of conductive currents during surgery. While currently in the early stages of commercialization, J-Plasma has been the subject of five independent white papers and has been cited therein for its clinical utility in gynecological surgeries and dermatologic/facial plastic surgery procedures.

  

In March, 2015, the Company closed its previously-announced underwritten public offering of a total 5,218,749 shares of common stock, par value $0.001 per share at a price to the public of $2.50 per share, resulting in net proceeds of approximately $11.5 million, after deducting underwriting discounts and commissions and estimated offering expenses. The Company intends to use the proceeds from the offering for operating costs, capital expenditures and for general corporate purposes, including working capital. Craig-Hallum Capital Group LLC (“Craig-Hallum”) acted as the sole managing underwriter for the offering.

  

 
15

  

Concurrently with the underwriting, the Company closed on the transactions contemplated under the exchange agreement with certain investors (the “Investors”) with respect to which Great Point Partners, LLC acts as investment manager. Pursuant to the terms of the Exchange Agreement, the Company issued 3,588,139 shares of the Company’s Series B Convertible Preferred Stock (the “Series B Preferred Stock”) in exchange for 3,500,000 shares of the Company’s Series A 6% Convertible Preferred Stock and warrants to purchase up to 5,250,000 shares of our common stock in the aggregate which were previously issued in conjunction with the sale of the Company’s Series A 6% Convertible Preferred Stock to the Investors in a December 13, 2013 offering, as well as accrued and unpaid preferred dividends. The Series B Preferred Stock is convertible into an aggregate of 7,176,278 shares of the Company’s common stock.

  

The majority of our products currently are marketed through medical distributors, which distribute to more than 6,000 hospitals and to doctors and other healthcare facilities. New distributors are contacted through responses to our advertising in international and domestic medical journals and our presence at domestic and international trade shows

 

International sales represented approximately 14.7% of total revenues for the first three months of 2015, as compared with 17.0% for the first three months of 2014. Management estimates our products have been sold in more than 150 countries through local dealers coordinated by sales and marketing personnel at our Clearwater, Florida facility. International sales of the company have declined, which management attributes to a stronger dollar relative to foreign currencies. In the Middle East and some Latin American countries, lower oil prices negatively impact government funded healthcare, and political and civil unrest in some countries make those markets increasingly volatile and unpredictable.

 

During 2014, we commenced full scale commercialization efforts for J-Plasma. As of March 31, 2015, we had a direct sales force consisting of 16 field-based selling positions, and, coupled with our independent manufacturer’s representatives, gives us a total sales force of 33. This is a hospital focused selling organization with its focus on the use of J-Plasma for operating room procedures. In addition, we have invested in training programs and marketing-related activities to support accelerated adoption of J-Plasma.

 

We are continuing to make substantial investments in the development and marketing of our J-Plasma technology for the long term benefit of the Company and its stakeholders, and this may adversely affect our short term profitability and cash flow, particularly over the next 12 to 24 months. While we believe that these investments have the potential to generate additional revenues and profits in the future, there can be no assurance that J-Plasma will be successful or that such future revenues and profitability will be realized. From June of 2010 through December 31, 2014, we invested approximately $5.5 million in the development and marketing of our J-Plasma technology and an additional approximately $1.3 million in the three months ended March 31, 2015, bringing the total investment to approximately $6.8 million since inception.

 

We strongly encourage investors to visit our website: www.boviemedical.com to view the most current news and to review our filings with the Securities and Exchange Commission.

 

 
16

  

Results of Operations –Three Months Ended March 31, 2015 Compared to Three Months Ended March 31, 2014

 

Sales

 

    Three months ended      
    March 31,     Percent  
    2015     2014     Change  
Sales by Product Line (in 000's)            
Electrosurgical   $ 3,738     $ 3,965     -5.7 %
Cauteries     1,526       1,551       -1.6 %
Other     864       966       -10.6 %
                       
Total   $ 6,128     $ 6,482       -5.5 %
                       
Sales by Domestic and International (in 000's)                        
Domestic   $ 5,225     $ 5,381       -2.9 %
International     903       1,101       -18.0 %
                       
Total   $ 6,128     $ 6,482       -5.5 %
                       
Sales by Operating Category (in 000's)                        
Core   $ 5,525     $ 5,431       1.7 %
OEM     320       1,020       -68.6 %
J-Plasma     283       31       812.9 %
                       
Total   $ 6,128     $ 6,482       -5.5 %

  

Sales for the three months ended March 31, 2015 declined 5.5% or approximately $354,000 over the same period in 2014. Higher core product sales in electrodes, and lighting and an eight-fold increase in J-Plasma sales partly offset the reduction in OEM sales, where several projects underway are not scheduled to go into production until later this year.

 

Our ten largest customers accounted for approximately 65.6% and 58.7% of net revenues for the three months ended March 31, 2015 and 2014 respectively. For the three months ended March 31, 2015, McKesson, NDC, and Medline accounted for 18.9%, 13.8% and 11.0% of our sales, while for the same three month period ended in 2014, Arthrex accounted for 10.1% of our sales.

  

 
17

 

Gross Profit

 

    Three months              
  ended March 31,     Percent of sales     Percent  
(in thousands)   2015     2014     2015     2014     change  
Cost of sales   $ 3,454     $ 3,726     56.4 %   57.5 %   -7.3 %
                                       
Gross profit   $ 2,674     $ 2,756       43.6 %     42.5 %     -3.0 %

  

Gross profit increased as a percentage of sales by approximately 1.1% for the period ending March 31, 2015 compared to the same period in 2014. The increase in our gross profit percentage resulted from a 5.9% decrease in manufactured overhead as a percentage of sales, offset by a 4.6% increase in direct labor costs as a percentage of sales, and a 0.2% increase in direct material costs as a percentage of sales.

 

We do not anticipate any material impact to our gross profit, material costs, or other costs as a result of the effect of inflation or any material impact of changing prices on net revenue.

 

Research and Development

 

    Three months              
  ended March 31,     Percent of sales     Percent  
(in thousands)   2015     2014     2015     2014     change  
R & D Expense   $ 446     $ 332     7.3 %   5.1 %   34.3 %

  

Research and development costs increased 34.3% for the period ending March 31, 2015 compared to the same period in 2014. We have incurred increased spending on labor costs, partially offset by a reduction in consulting and other costs as we continue to develop enhancements and complimentary items to our next generation of J-Plasma and core products.

 

Professional Fees

 

    Three months              
  ended March 31,     Percent of sales     Percent  
(in thousands)   2015     2014     2015     2014     change  
Professional services   $ 331     $ 258     5.4 %   4.0 %   28.3 %

  

Our professional fees increased by approximately $73,000 during the three months ended March 31, 2015 compared to the same period in 2014, mainly attributable to increased expenses for investor relations, accounting and consulting fees, partially offset by decreased legal costs of approximately $28,000.

 

Salaries and related costs

 

    Three months              
  ended March 31,     Percent of sales     Percent  
(in thousands)   2015     2014     2015     2014     change  
Salaries & related cost   $ 1,952     $ 907     31.9 %   14.0 %   115.2 %

  

During the three months ended March 31, 2015 compared to the same period in 2014, salary costs increased by 115.2% or approximately $1,045,000. The approximate increases were primarily the result of the additional salary expense related to our J-Plasma direct sales team of $572,000, core direct sales team of $89,000 and executive and administrative headcount and related costs of $378,000.

  

 
18

 

Selling, General & Administrative Expenses

 

    Three months              
  ended March 31,     Percent of sales     Percent  
(in thousands)   2015     2014     2015     2014       change  
SG & A costs   $ 2,217     $ 1,201       36.2 %     18.5 %   84.6 %

  

Selling, general and administrative costs increased by approximately $1,016,000 or 84.6% for the three month period ending March 31, 2015 as compared to the same period in 2014. This increase was the result of several increases and decreases in various SG&A costs. Some of the approximate cost increases we experienced were approximately $210,000 related to advertising and marketing, $176,000 for sales commissions, $115,000 for valuation services, travel and entertainment of $262,000, dues and subscriptions of $65,000, utilities and maintenance of $24,000, office and computer supplies and other expenses of $81,000, regulatory and taxes of $28,000.

 

Other Income (expense)

 

    Three months              
  ended March 31,     Percent of sales     Percent  
(in thousands)   2015     2014     2015     2014     change  
Interest income (expense)   $ (40 )   $ (28 )   -0.7 %   -0.4 %   42.9 %
                                       
Change in fair value of derivative liabilities   $ 1,444     $ (9,599 )     23.6 %     -148.0 %     -115.0 %

  

Interest Expense

 

Net interest expense increased by approximately $12,000 or 42.9% the three months ended March 31, 2015 as compared with the same period in 2014. The increase in the net interest expense is a result of the debt refinancing which occurred March 20, 2014.

 

Change in Fair Value of Derivative Liabilities

 

On December 13, 2013, we entered into a securities purchase agreement pursuant to which we issued 3,500,000 shares of our Series A 6% Convertible Preferred Stock with a stated value of $2.00 per share (for an aggregate of $7 million) and 5,250,000 warrants to purchase our common stock, at an exercise price of $2.387 per share. We also issued 525,000 warrants to the placement agent. At December 13, 2013, the investor and placement agent warrants were valued at approximately $4,384,000 and $438,000, respectively. The warrants are accounted for as derivative financial instruments at fair value and are re-valued each reporting period.

 

On March 17, 2015, we closed on the transactions contemplated under the exchange agreement (the “Exchange Agreement”) entered into on March 11, 2015 with certain investors (the “Investors”) with respect to which Great Point Partners, LLC acts as investment manager. Pursuant to the terms of the Exchange Agreement, we issued 3,588,139 shares of our Series B Convertible Preferred Stock (the “Series B Preferred Stock”) in exchange for 3,500,000 shares of our Series A 6% Convertible Preferred Stock and warrants to purchase up to 5,250,000 shares of our common stock in the aggregate which were previously issued in conjunction with the sale of our Series A 6% Convertible Preferred Stock to the Investors in a December 13, 2013 offering, as well as accrued and unpaid preferred dividends. The Series B Preferred Stock is convertible into an aggregate of 7,176,278 shares of our common stock, upon the terms set forth in the Certificate of Designation. As a result of this transaction, we recorded a deemed dividend to the preferred shareholders of $13,956,000.

 

At March 31, 2015, the placement agent warrants were valued at $401,189, and we recognized an aggregate gain related to their change in value of approximately $597,000.

 

In 2010, we issued warrants to investors and to our placement agent in connection with an equity offering. The warrants issued to the investors contain anti-dilution protection in the event we issue securities at a price lower than the exercise price of the warrants. As a result of the issuance of our Series A 6% Convertible Preferred Stock on December 13, 2013, the exercise price of the investor warrants issued in 2010 was reduced from $6.00 per share to $2.00 per share and the number of warrants was increased proportionately. The 2010 investor and placement agent warrants, which are accounted for as derivative financial instruments at fair value, were valued at approximately $221,000 and $1,431,000 at March 31, 2015 and March 31, 2014, respectively, and we recognized a non-cash net gain for the period ended March 31, 2015 of approximately $847,000 versus a non-cash loss of approximately $1,161,000 for the three month period ended March 31, 2014.

 

 
19

  

On March 31, 2014, the Company entered into an agreement with an existing warrant holder from the April 2010 capital raise pursuant to which the Company repurchased warrants exercisable into 142,857 shares of Common Stock for an aggregate purchase price of $420,571.

 

Income Taxes

 

While we are subject to U.S. federal income tax as well as income tax of certain state jurisdictions, during the three months ended March 31, 2015, our current provision was zero because the net effect of our permanent and temporary differences resulted in us recognizing a loss for tax purposes. Our effective tax rate of zero for the three months ended March 31, 2015 differed from the statutory tax rates primarily because we recognized certain losses from the fair value adjustments for financial statement purposes that are not expected to reverse (i.e. permanent differences).

 

Net Income (loss)

 

    Three months              
  ended March 31,     Percent of sales     Percent  
(in thousands)   2015     2014     2015     2014     change  
Net Income/(Loss)   $ (876 )   $ (9,607 )   -14.3 %   -148.2 %   90.9 %
Accretion on convertible preferred stock   (222 )   (204 )     -3.6 %     -3.1 %     8.8 %
Deemed dividend on conversion of warrants and Series A preferred stock to Series B convertible preferred stock     13,956       -       227.7 %     -        n/a   
Net Income/(loss) attributable to common shareholders     12,858     (9,811 )     209.8 %     -151.4 %     231.1 %

  

Product Development

 

We have developed most of our products and product improvements internally. Funds for this development have come primarily from our internal cash flow and equity issuances. We maintain close working relationships with physicians and medical personnel in hospitals and universities who assist in product research and development. New and improved products play a critical role in our sales growth. We continue to emphasize the development of proprietary products and product improvements to complement and expand our existing product lines. Our research and development team members are based in our Florida office. 

 

Reliance on Collaborative, Manufacturing and Selling Arrangements

 

We manufacture the majority of our products on our premises in Clearwater, 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 Cardinal Health, Independent Medical Co-Op Inc. (IMCO), McKesson Medical Surgical, Inc., Medline, National Distribution and Contracting Inc. (NDC), Owens & Minor. If any of these distributor relationships are terminated or not replaced, our revenue from the territories served by these distributors could be adversely affected.

 

We are also dependent on OEM customers who have no legal obligation to purchase products from us. Should such customers fail to give us purchase orders for the product after development, our future business and value of related assets could be negatively affected. Furthermore, no assurance can be given that such customers will give sufficient high priority to our products. Finally, disagreements or disputes may arise between us and our customers, which could adversely affect production and sales of our products.

  

We also have collaborative arrangements with four key foreign suppliers under which we request the development of certain items and components and we purchase them pursuant to purchase orders. Our purchase order commitments are never more than one year in duration and are supported by our sales forecasts. The majority of our raw materials are purchased from sole-source suppliers. While we believe we could ultimately procure other sources for these components, should we experience any significant disruptions in this key supply chain, there are no assurances that we could do so in a timely manner which could render us unable to meet the demands of our customers, resulting in a material and adverse effect on our business and operating results. Over the past few years we have expanded the use of our Bulgarian supplier who manufactures a substantial number of our generator and accessory components. We anticipate expanding this relationship further to include manufacturing a large number of our J-Plasma components

  

 
20

 

Liquidity and Capital Resources

 

Our working capital at March 31, 2015 of approximately $21 million increased by approximately $9.4 million when compared to December 31, 2014. Accounts receivable days of sales outstanding were 26.9 days and 37.3 days at March 31, 2015 and 2014, respectively. The number of days worth of sales in inventory, which is the total inventory available for production divided by the 12 month average cost of materials , decreased 26 days to 241 days equating to an inventory turn ratio of 2.0 at March 31, 2015 from 267 days and an inventory turn ratio of 1.2 at March 31, 2014. The lower number of days worth of sales is mainly due to reduced inventory levels year over year as we wrote off excess and obsolete inventory and adjusted for product mix.

 

On March 17, 2015, we closed our underwritten public offering of 4,800,000 shares of common stock, par value $0.001 per share at a price to the public of $2.50 per share, resulting in net proceeds of approximately $10.6 million, after deducting underwriting discounts and commissions and estimated offering expenses. We intend to use the proceeds from the offering for operating costs, capital expenditures and for general corporate purposes, including working capital. Craig-Hallum Capital Group LLC (“Craig-Hallum”) acted as the sole managing underwriter for the offering.

 

On March 31, 2015 Craig-Hallum exercised a portion of its over-allotment option to purchase an additional 418,749 shares of common stock at an aggregate price of $2.50 per share, resulting in net proceeds of approximately $900,000. After closing of the over-allotment, the total number of shares sold by the Company in the offering was 5,218,749.

 

We used cash in operations of approximately $1.79 million for the three months ended March 31, 2015, compared to cash used in operations of approximately $1.05 million for the same period in 2014, an increase of cash used in operations of approximately $0.74 million which was attributable to our on-going and accelerated J-Plasma product commercialization efforts.

 

During the three month period ended March 31, 2015, we used approximately $254,000 for the purchase of property and equipment as compared to purchases amounting to approximately $75,000 for the same period in 2014.

 

Cash provided by financing activities for the three month period ended March 31, 2015 of approximately $11.7 million was attributable to the proceeds from the public offering and the exercise of warrants. We used cash in financing activities of approximately $86,000 during the first three months of 2014.

 

On March 20, 2014, we entered into a transaction with The Bank of Tampa, a Florida banking corporation (“Lender”) wherein Lender extended to us a mortgage loan in the principal amount of $3,592,000 (the “Loan”). The obligations under the Loan are secured by a first mortgage and security interest in our Clearwater, Florida facility as well as an assignment of our accounts receivable. In addition, we have pledged an interest in a certificate of deposit in the amount of $839,000 as additional collateral. The amount of the additional collateral required declines on a pro rata basis as principal is paid. The initial maturity date of the Loan is March 20, 2017; however we have an option to extend the maturity date until March 20, 2022.

 

Borrowings under the Loan bear interest at LIBOR plus 3.5%, with a fixed monthly principal payment of $19,956. The interest rate at March 31, 2015 was 3.681%

 

The Loan documents contain customary financial covenants, including a covenant that the Company maintains a minimum liquidity of $750,000. Although there is no Debt Service Coverage Ratio (as defined in the Loan Agreement) for the initial term of the Loan, should we desire to extend the Loan beyond three years, we must maintain a Debt Service Coverage Ratio for each of the preceding four quarters of not less than 1.0 to 1.0. In the event the Loan is extended, the Debt Service Coverage Ratio must not be less than 1.2 to 1.0.

  

 
21

 

Our future contractual obligations for agreements with initial terms greater than one year and agreements to purchase materials in the normal course of business are summarized as follows (in thousands):

 

Description   Years Ending December 31,  
    2015     2016     2017  
Purchase commitments   $ 4,574    

$

-    

$

-  
Long-term debt     239       239       2,874  
Total   $ 4,813     $ 239     $ 2,874  

  

We are continuing to make substantial investments in the development and marketing of our J-Plasma technology for the long term benefit of the Company and its stakeholders, and this may adversely affect our short term profitability and cash flow, particularly over the next 12 to 24 months. While we believe that these investments have the potential to generate additional revenues and profits in the future, there can be no assurance that J-Plasma will be successful or that such future revenues and profitability will be realized. From June of 2010 through December 31, 2014, we invested approximately $5.5 million in the development and marketing of our J-Plasma technology and an additional approximately $1.3 million in the three months ended March 31, 2015, bringing the total investment to approximately $6.8 million since inception

 

Critical Accounting Estimates

 

In preparing the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), we have adopted various accounting policies. Our most significant accounting policies are disclosed in Note 2 to the consolidated financial statements included in our report on Form 10-K for the year ended December 31, 2014, which we filed on February 27, 2015.

 

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Our estimates and assumptions, including those related to inventories, intangible assets, property, plant and equipment, legal proceedings, research and development, warranty obligations, product liability, fair valued liabilities, sales returns and discounts, and income taxes are updated as appropriate, which in most cases is at least quarterly. We base our estimates on historical experience, or various assumptions that are believed to be reasonable under the circumstances and the results form the basis for making judgments about the reported values of assets, liabilities, revenues and expenses. Actual results may materially differ from these estimates.

 

Estimates are considered to be critical if they meet both of the following criteria: (1) the estimate requires assumptions about material matters that are uncertain at the time the accounting estimates are made, and (2) other materially different estimates could have been reasonably made or material changes in the estimates are reasonably likely to occur from period to period. Our critical accounting estimates include the following:

 

Inventory reserves

 

When necessary, we maintain reserves for excess and obsolete inventory resulting from the potential inability to sell our products at prices in excess of current carrying costs. The markets in which we operate are highly competitive, with new products and surgical procedures introduced on an ongoing basis. Such marketplace changes may cause our products to become obsolete. We make estimates regarding the future recoverability of the costs of these products and record a provision for excess and obsolete inventories based on historical experience, and expected future trends. If actual product life cycles, product demand or acceptance of new product introductions are less favorable than projected by management, additional inventory write-downs may be required, which would unfavorably affect future operating results.

 

Long-lived assets

 

We review long-lived assets which are held and used, including property and equipment and intangible assets, for impairment whenever changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Such evaluations compare the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset over its expected useful life and are significantly impacted by estimates of future prices and volumes for our products, capital needs, economic trends and other factors that are inherently difficult to forecast. If the asset is considered to be impaired, we record an impairment charge equal to the amount by which the carrying value of the asset exceeds its fair value determined by either a quoted market price, if any, or a value determined by utilizing a discounted cash flow technique.

 

 
22

  

Liabilities valued at fair value

 

Certain financial instruments, such as warrants, which are indexed to our common stock, are classified as liabilities when either: (a) the holder possesses rights to net-cash settlement or (b) physical or net-share settlement is not within our control. In such instances, net-cash settlement is assumed for financial accounting and reporting purposes, even when the terms of the underlying contracts do not provide for net-cash settlement. Such financial instruments are initially recorded, and continuously carried, at fair value (see Note 5 of the consolidated financial statements).

 

Determining the fair value of these instruments involves judgment and the use of certain relevant assumptions including, but not limited to, interest rate risk, historical volatility and stock price, estimated life of the derivative, anti-dilution provisions, and conversion/redemption privileges. The use of different assumptions or changes in those assumptions could have a material effect on the estimated fair value amounts.

 

Stock-based compensation

 

Under our stock option plan, options to purchase common shares of the Company may be granted to key employees, officers and directors of the Company by the Board of Directors. The Company accounts for stock options in accordance with FASB ASC Topic 718-10-10, Share-Based Payment, with compensation expense amortized over the vesting period based on the trinomial lattice option-pricing model fair value on the grant date, which includes a number of estimates that affect the amount of our expense.

 

Litigation Contingencies

 

From time to time, we are exposed to claims and litigation arising in the ordinary course of business and use various methods to resolve these matters in a manner that we believe serves the best interest of the Company and our stockholders. There can be no assurance these actions or other third party assertions will be resolved without costly litigation, or in a manner that is not adverse to our financial position. We do not believe that any of the currently identified claims or litigation matters will have a material adverse impact on our results of operations, cash flows or financial condition. However, given uncertainties associated with any litigation, if our assessments prove to be wrong, or if additional information becomes available such that we estimate that there is a possible loss or possible range of loss associated with these contingencies, then we would record the minimum estimated liability, which could materially impact our results of operations, financial position and cash flows.

 

Income taxes

 

We utilize the liability method of accounting for income taxes as set forth in ASC 740. Under the liability method, deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect during the years in which the basis differences reverse. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized. In determining the need for valuation allowances we consider projected future taxable income and the availability of tax planning strategies.

  

We have deferred tax assets mainly from net operating loss and tax credit carry forwards available in certain jurisdictions. During the fourth quarter 2014, management concluded that it is more likely than not that the Company will not realize its net deferred tax assets, and the Company establish a full valuation against it net deferred tax assets with finite life.

  

We asses our income tax positions and record tax benefits for all years subject to examination based upon our evaluation of the facts, circumstances and information available as of the reporting date. For those tax positions where there is a greater than 50% likelihood that a tax benefit will be sustained, we have recorded the largest amount of tax benefit that my potentially be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where there is less than 50% likelihood that a tax benefit will be sustained, no tax benefit has been recognized in the financial statements.

  

Since inception, we have been subject to tax by both federal and state taxing authorities. Until the respective statutes of limitations expire (which may be as much as 20 years while we have unused NOL’s), we are subject to income tax audits in the jurisdictions in which we operate.

 

 
23

  

Inflation

 

Inflation has not materially impacted the operations of our company.

 

Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements at this time.

 

Recent Accounting Pronouncements

 

See Note 4 of the consolidated financial statements.

 

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

 

Our short-term investments consist of cash, cash equivalents and overnight investments. As such we do not believe we are exposed to significant interest rate risk. The primary objective of our investment activities is to preserve principal while at the same time maximizing yields without significantly increasing risk. If a 10% change in interest rates were to have occurred on March 31, 2015, this change would not have had a material effect on the fair value of our investment portfolio as of that date.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

We have carried out an evaluation, under the supervision of and with the participation of our management, including our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended), as of March 31, 2015. Based upon that evaluation, our CEO and CFO concluded that, as of the end of that period, our disclosure controls and procedures are effective in providing reasonable assurance that (a) the information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (b) such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

 

Changes in Internal Controls

 

There were no changes in our internal control over financial reporting (as defined in Rules 13(a)-15(f) and 15(d)-15(f)) during the three months ended March 31, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 
24

  

PART II. OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

In the normal course of business, we are subject, from time to time, to legal proceedings, lawsuits and claims. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. If any of these matters arise in the future, it could affect the operating results of any one or more quarters.

 

We expense costs of litigation related to contingencies in the periods in which the costs are incurred.

 

ITEM 1A. RISK FACTORS

 

There have been no material changes to the risk factors previously disclosed in our Form 10-K for the year ended December 31, 2014, in response to Item 1A to Part 1 of Form 10-K.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

None.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

  

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5. OTHER INFORMATION

 

None.

 

 
25

  

ITEM 6.   EXHIBITS

 

1.1

 

Underwriting Agreement (incorporated by reference to Exhibit 1.1 to the Registrant’s report on Form 8-K filed March 12, 2015)

 

 

 

3.1

 

Certificate of Designation of Preferences, Rights, and Limitations of Series B Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to the Registrant’s report on Form 8-K filed March 12, 2015)

 

 

 

10.1

 

Exchange Agreement (incorporated by reference to Exhibit 10.1 to the Registrant’s report on Form 8-K filed March 11, 2015)

 

 

 

10.2

 

Registration Rights Agreement (incorporated by reference to Exhibit 10.1 to the Registrant’s report on Form 8-K filed March 17, 2015)

 

 

 

31.1

 

Certifications of Robert L. Gershon, Chief Executive Officer of Registrant pursuant to Rule 13a-14 adopted under the Securities Exchange Act of 1934, as amended, and Section 302 of the Sarbanes-Oxley Act of 2002.

   

31.2

 

Certifications of Peter L. Donato, Chief Financial Officer of Registrant pursuant to Rule 13a-14 adopted under the Securities Exchange Act of 1934, as amended, and Section 302 of the Sarbanes-Oxley act of 2002.

   

32.1

 

Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

   

32.2

 

Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

   

101.1

 

Financial Statements from the Quarterly Report on Form 10-Q of Bovie Medical Corporation for the three months ended March 31, 2015, filed on May 8, 2015, formatted in XBRL.

  

 
26

 

 SIGNATURES

 

Pursuant to the requirements 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. 

 

 

Bovie Medical Corporation

 

   

 Dated: May 8, 2015

By:

/s/ Robert L. Gershon

 

 

Robert Gershon

 

 

Chief Executive Officer and

 

 

(Principal Executive Officer)

 

   

 Dated: May 8, 2015

By:

 /s/ Peter L. Donato

 

 

Peter L. Donato

 

 

Chief Financial Officer,

 

 

Treasurer, and Secretary

 

 

(Principal Financial Officer)

 

 

 

27


 

EX-31.1 2 bvx_ex311.htm CERTIFICATION

EXHIBIT 31.1

 

Certificate Pursuant to Section 302 

of Sarbanes – Oxley Act of 2002 

CERTIFICATION OF CEO

 

I, Robert L. Gershon, the Registrant's Chief Executive Officer, certify that:

 

1.

I have reviewed this quarterly report on Form 10-Q of Bovie Medical Corporation;

 

 

2.

Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

 

 

3.

Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

 

 

4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

  

 

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

 
 

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the liability of financial reporting and the preparation of financial statements for external purposes in accordance with Generally Accepted Accounting Principles.

 

 

 
 

c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

 
 

d)

Designed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

  

5.

The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

  

 

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

 
 

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

  

 

Dated: May 8, 2015 By: /s/ Robert L. Gershon  
Robert L. Gershon
    Chief Executive Officer  

 

 

 

EX-31.2 3 bvx_ex312.htm CERTIFICATION

EXHIBIT 31.2

 

Certificate Pursuant to Section 302 

of Sarbanes – Oxley Act of 2002 

CERTIFICATION OF CFO

 

I, Peter L. Donato, the Registrant's Chief Financial Officer, certify that:

 

1.

I have reviewed this quarterly report on Form 10-Q of Bovie Medical Corporation;

 

 

2.

Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

 

 

3.

Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

 

 

4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

  

 

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

 
 

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the liability of financial reporting and the preparation of financial statements for external purposes in accordance with Generally Accepted Accounting Principles.

 

 

 
 

c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

 
 

d)

Designed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

  

5.

The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

  

 

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

 
 

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

  

Dated: May 8, 2015 By: /s/ Peter L. Donato  
Peter L. Donato
    Chief Financial Officer  

    

EX-32.1 4 bvx_ex321.htm CERTIFICATION

EXHIBIT 32.1

 

Certificate Pursuant to Section 906 

of Sarbanes – Oxley Act of 2002 

CERTIFICATION OF CEO

 

In connection with the quarterly report on Form 10-Q of Bovie Medical Corporation. (the “Company”) for the period ended March 31, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned President and Chief Executive Officer certifies, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

 

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

 

 

 
 

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

Dated: May 8, 2015 By: /s/ Robert L. Gershon  
Robert L. Gershon
    Chief Executive Officer  

 

EX-32.2 5 bvx_ex322.htm CERTIFICATION

 EXHIBIT 32.2

 

Certificate Pursuant to Section 906 

of Sarbanes – Oxley Act of 2002 

CERTIFICATION OF CFO

 

In connection with the quarterly report on Form 10-Q of Bovie Medical Corporation. (the “Company”) for the period ended March 31, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned Chief Financial Officer certifies, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

 

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

 

 

 
 

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

Dated: May 8, 2015 By: /s/ Peter L. Donato  
Peter L. Donato
    Chief Financial Officer  

 

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Gershon [Member] Related Party Transaction [Axis] J. Robert Saron [Member] Moshe Citronowicz [Member] Andrew Makrides [Member] John J. McCarthy [Member] Peter L. 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Is Entity a Voluntary Filer? Is Entity's Reporting Status Current? Entity Filer Category Entity Common Stock, Shares Outstanding Document Fiscal Period Focus Document Fiscal Year Focus Consolidated Balance Sheets Assets Current assets: Cash and cash equivalents Restricted cash Trade accounts receivable, net Inventories, net Current portion of deposits Prepaid expenses and other current assets Total current assets Property and equipment, net Brand name and trademark Purchased technology and license rights, net Deposits, net of current portion Other assets Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued payroll Accrued vacation Current portion of mortgage note payable Accrued and other liabilities Total current liabilities Mortgage note payable, net of current portion Deferred rents Deferred tax liability Derivative liabilities Total liabilities Commitments and Contingencies (see Notes 9 and 11) Series A 6% convertible preferred stock, par value $0.001; 3,500,000 shares authorized, zero issued and outstanding as of March 31, 2015 STOCKHOLDER'S EQUITY: Series B convertible preferred stock, par value $.001; 3,588,139 issued and outstanding as of March 31, 2015 Common stock, par value $.001 par value; 40,000,000 shares authorized; 23,335,894 issued and 23,192,815 outstanding as of March 31, 2015 and 17,995,409 issued and 17,852,330 outstanding as of December 31, 2014, respectively Additional paid-in capital Accumulated deficit Total stockholders' equity Total liabilities and stockholders' equity Consolidated Balance Sheets Parenthetical Stockholders' equity: Series A 6% convertible preferred stock, par value Series A 6% convertible preferred stock, shares authorized Series A 6% convertible preferred stock, shares issued Series B convertible preferred stock, par value Series B convertible preferred stock, shares issued Series B convertible preferred stock, shares outstanding Common stock, par value Common stock, shares authorized Common stock, shares issued Common stock, shares outstanding Consolidated Statements Of Operations Sales Cost of sales Gross profit Other costs and expenses: Research and development Professional services Salaries and related costs Selling, general and administrative Total other costs and expenses Income/(loss) from operations Interest expense, net Change in fair value of liabilities, net Total other (expense), net Loss before income taxes Provision for income taxes, net Net loss Accretion on convertible preferred stock Deemed dividend on conversion of warrants and Series A preferred stock to Series B convertible preferred stock Net income (loss) attributable to common shareholders Income (loss) per share Basic Diluted Weighted average number of shares outstanding- basic Weighted average number of shares outstanding - dilutive Statement [Table] Statement [Line Items] Beginning Balance, Shares Beginning Balance, Amount Options exercised, Shares Options exercised, Amount Warrants exercised, Shares Warrants exercised, Amount Issuance of common stock, Shares Issuance of common stock, Amount Conversion of Series A preferred stock and common warrants to Series B preferred stock, Shares Conversion of Series A preferred stock and common warrants to Series B preferred stock, Amount Stock based compensation Stock swap to acquire options, Shares Stock swap to acquire options, Amount Net income (loss) Ending Balance, Shares Ending Balance, Amount Consolidated Statements Of Cash Flows Cash flows from operating activities Net loss Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization Amortization of intangible assets Provision for inventory obsolescence Gain on disposal of property and equipment, net Stock-based compensation Non cash other income - warrants Provision (benefit) for deferred taxes Changes in current assets and liabilities: Trade receivables Prepaid expenses Inventories Deposits and other assets Accounts payable Litigation settlement liability Accrued and other liabilities Net cash used in operating activities Cash flows from investing activities Purchases of property and equipment Net cash used in investing activities Cash flows from financing activities Proceeds from stock options/warrants exercised Change in restricted cash Change in mortgage note payable Proceeds from issuance of common shares, net Repayment of industrial revenue bonds Repurchase of warrants Net cash provided by (used in) financing activities Net change in cash and cash equivalents Cash and cash equivalents, beginning of period Cash and cash equivalents, end of period Cash paid during the three months ended March 31, 2015 and 2014 for: Interest paid, net Income taxes Notes to Financial Statements NOTE 1. BASIS OF PRESENTATION NOTE 2. INVENTORIES Note 3. INTANGIBLE ASSETS NOTE 4. NEW ACCOUNTING PRONOUNCEMENTS NOTE 5. FAIR VALUE MEASUREMENTS NOTE 6. EARNINGS PER SHARE NOTE 7. STOCK-BASED COMPENSATION NOTE 8. INCOME TAXES NOTE 9. COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS NOTE 10. RELATED PARTY TRANSACTIONS NOTE 11. LONG TERM DEBT Note 12. GEOGRAPHIC AND PRODUCT LINE INFORMATION Inventories Tables Schedule of inventory Intangible Assets Tables Schedule of intangible assets Fair Value Measurements Tables Activity in Level 3 assets Earnings Per Share Tables Computation of basic and diluted earnings (loss) per share Stock-Based Compensation Tables Activity in stock options Commitments And Contingencies Tables Future minimum lease payments under operating leases Other future contractual obligations Geographic And Product Line Information Tables Analyzing International sales represented Analyzing revenue and other operating metrics across three operating segments Inventories Details Raw materials Work in process Finished goods Gross inventories Less: reserve for obsolescence Net inventories Indefinite-lived Intangible Assets [Axis] Indefinite-lived intangible assets Less: accumulated amortization Net carrying amount Useful life Intangible Assets Details Narrative Amortization of Intangible Assets Beginning balance Issuances Exchange of warrants Change in fair value Ending Balance Earnings Per Share Details Numerator Net income (loss) available to common shareholders Effect of dilutive securities Derivative liability - warrants Accretion on convertible preferred stock Numerator for diluted income (loss) per common share Denominator: Weighted average shares used to compute basic income (loss) per common share Effect of dilutive securities: Derivative liability - warrants Convertible preferred stock Stock options Denominator for diluted income (loss) per common share Basic income (loss) per common share Diluted income (loss) per common share Earnings Per Share Details Narrative Common stock options and warrants Conversion of Series A Preferred Stock Stock-Based Compensation Details Number of options, outstanding Outstanding, beginning of period (in shares) Granted (in shares) Exercised (in shares) Cancelled (in shares) Outstanding, end of period (in shares) Weighted average exercise price Outstanding, beginning of period (in dollars per share) Granted (in dollars per share) Exercised (in dollars per share) Cancelled (in dollars per share) Outstanding, end of period (in dollars per share) Stock-based compensation Exercise of outstanding stock options Expected volatility rate Expected term Risk free interest rate Expected dividend yield Commitments Contingencies And Concentrations Details Future minimum lease payments under operating leases 2015 2016 Thereafter Total 2015 2016 2017 Rent expense Net revenues Customers accounted for sales percentage Consulting fees Interest rate Sales by Domestic and International Percent Change Sales by Operating Category Sales by Operating Category Percent Geographic And Product Line Information Details Narrative Percentage of International sales of sales Asset Purchase Agreement Liability Noncurrent Stock swap to acquire options shares. Stock swap to acquire options amount. Purchased technology. custom:License rights. custom:Purchase commitments. Yechiel Tsitrinovich. Investor warrants. Two thousand thirteen agent warrants. Two thousand ten investor warrants. Two thousand ten placement agent warrants. Stock options exercise price. Stock options exercise price. Stock options exercise price. Stock options exercise price. Stock options exercise price. Stock options exercise price. Stock options exercise price. Stock options exercise price. Stock options exercise price. Stock options exercise price. Stock options exercise price. Stock options exercise price. Stock options exercise price. Stock options exercise price. Stock options exercise price. Stock options exercise price. Stock options exercise price. Stock options exercise price. Stock options exercise price. Stock options exercise price. Stock options exercise price. Stock options exercise price. Stock options exercise price. Stock options exercise price. Stock options exercise price. Stock options exercise price. Stock options exercise price. Stock options exercise price. Exercise price twenty nine. Primary financial statement caption in which the reported facts about salaries and related costs have been included. custom:AnalyzingRevenueAndOtherOperatingMetricsAcrossThreeOperatingSegmentsTableTextBlock Customers accounted for sales percentage. 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GEOGRAPHIC AND PRODUCT LINE INFORMATION (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Sales by Domestic and International $ 6,128BVX_SalesByDomesticAndInternational $ 6,482BVX_SalesByDomesticAndInternational
Percent Change (5.50%)us-gaap_EffectiveIncomeTaxRateReconciliationChangeInEnactedTaxRate (5.50%)us-gaap_EffectiveIncomeTaxRateReconciliationChangeInEnactedTaxRate
Domestic [Member]    
Sales by Domestic and International 5,225BVX_SalesByDomesticAndInternational
/ us-gaap_StatementBusinessSegmentsAxis
= BVX_DomesticMember
5,381BVX_SalesByDomesticAndInternational
/ us-gaap_StatementBusinessSegmentsAxis
= BVX_DomesticMember
Percent Change (2.90%)us-gaap_EffectiveIncomeTaxRateReconciliationChangeInEnactedTaxRate
/ us-gaap_StatementBusinessSegmentsAxis
= BVX_DomesticMember
(2.90%)us-gaap_EffectiveIncomeTaxRateReconciliationChangeInEnactedTaxRate
/ us-gaap_StatementBusinessSegmentsAxis
= BVX_DomesticMember
International [Member]    
Sales by Domestic and International $ 903BVX_SalesByDomesticAndInternational
/ us-gaap_StatementBusinessSegmentsAxis
= BVX_InternationalMember
$ 1,101BVX_SalesByDomesticAndInternational
/ us-gaap_StatementBusinessSegmentsAxis
= BVX_InternationalMember
Percent Change (18.00%)us-gaap_EffectiveIncomeTaxRateReconciliationChangeInEnactedTaxRate
/ us-gaap_StatementBusinessSegmentsAxis
= BVX_InternationalMember
(18.00%)us-gaap_EffectiveIncomeTaxRateReconciliationChangeInEnactedTaxRate
/ us-gaap_StatementBusinessSegmentsAxis
= BVX_InternationalMember
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STOCK-BASED COMPENSATION (Details Narrative) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Stock-based compensation $ 118,575us-gaap_AllocatedShareBasedCompensationExpense
Exercise of outstanding stock options 5,000us-gaap_ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansExercisePriceRangeNumberOfOutstandingOptions
Expected volatility rate 54.00%us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedVolatilityRate
Risk free interest rate 0.02%us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsRiskFreeInterestRate
Expected dividend yield 0.00%us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardFairValueAssumptionsExpectedDividendRate
Minimum [Member]  
Expected term 5 years
Maximum [Member]  
Expected term 8 years
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GEOGRAPHIC AND PRODUCT LINE INFORMATION (Tables)
3 Months Ended
Mar. 31, 2015
Geographic And Product Line Information Tables  
Analyzing International sales represented

International sales represented approximately 14.7% of total revenues for the first three months of 2015, as compared with 17.0% for the first three months of 2014.

   

    Three months ended
March 31,
    Percent  
    2015     2014     Change  
Sales by Domestic and International (in 000's)                  
Domestic   $ 5,225     $ 5,381       -2.9 %
International     903       1,101       -18.0 %
                         
Total   $ 6,128     $ 6,482       -5.5 %
Analyzing revenue and other operating metrics across three operating segments

Although we have only one reporting segment, beginning in 2014, management began analyzing revenue and other operating metrics across three operating categories.

  

Sales by Operating Category  (in 000's)                  
Core   $ 5,525     $ 5,431       1.7 %
OEM     320       1,020       -68.6 %
J-Plasma     283       31       812.9 %
                         
Total   $ 6,128     $ 6,482       -5.5 %

  

XML 17 R37.htm IDEA: XBRL DOCUMENT v2.4.1.9
RELATED PARTY TRANSACTION (Details Narrative) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
AR Logic [Member]    
Consulting fees $ 71,610us-gaap_RelatedPartyTransactionAmountsOfTransaction
/ us-gaap_RelatedPartyTransactionsByRelatedPartyAxis
= BVX_ARLogicMember
$ 89,000us-gaap_RelatedPartyTransactionAmountsOfTransaction
/ us-gaap_RelatedPartyTransactionsByRelatedPartyAxis
= BVX_ARLogicMember
Mr.Tsitrinovich [Member]    
Consulting fees $ 23,763us-gaap_RelatedPartyTransactionAmountsOfTransaction
/ us-gaap_RelatedPartyTransactionsByRelatedPartyAxis
= BVX_YechielTsitrinovichMember
$ 18,700us-gaap_RelatedPartyTransactionAmountsOfTransaction
/ us-gaap_RelatedPartyTransactionsByRelatedPartyAxis
= BVX_YechielTsitrinovichMember
XML 18 R9.htm IDEA: XBRL DOCUMENT v2.4.1.9
INTANGIBLE ASSETS
3 Months Ended
Mar. 31, 2015
Notes to Financial Statements  
Note 3. INTANGIBLE ASSETS

At March 31, 2015 and December 31, 2014 intangible assets consisted of the following (in thousands):

 

    March 31,     December 31,  
    2015     2014  
             
Trade name (life indefinite)   $ 1,510     $ 1,510  
                 
Purchased technology (9-17 yr life)   $ 1,441     $ 1,441  
Less: accumulated amortization     (1,037 )     (1,010 )
                 
Net carrying amount   $ 404     $ 431  
                 
License rights (5 yr life)   $ 316     $ 316  
Less accumulated amortization     (316 )     (316 )
Net carrying amount   $ -     $ -  

  

Amortization of intangibles, which is included in depreciation and amortization in the accompanying statements of cash flows, was approximately $27,000 and $49,000 during the respective three month periods ended March 31, 2015 and 2014.

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FAIR VALUE MEASUREMENTS (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Beginning balance $ 12,613us-gaap_FairValueMeasurementWithUnobservableInputsReconciliationsRecurringBasisLiabilityValue
Issuances   
Exchange of warrants (10,546)BVX_ExchangeOfWarrants
Change in fair value (1,444)us-gaap_FairValueMeasurementWithUnobservableInputsReconciliationRecurringBasisLiabilityGainLossIncludedInEarnings
Ending Balance 622us-gaap_FairValueMeasurementWithUnobservableInputsReconciliationsRecurringBasisLiabilityValue
2013 Investor Warrants [Member]  
Beginning balance 10,546us-gaap_FairValueMeasurementWithUnobservableInputsReconciliationsRecurringBasisLiabilityValue
/ us-gaap_MajorTypesOfDebtAndEquitySecuritiesAxis
= BVX_TwoThousandThirteenInvestorWarrantsMember
Issuances   
Exchange of warrants (10,546)BVX_ExchangeOfWarrants
/ us-gaap_MajorTypesOfDebtAndEquitySecuritiesAxis
= BVX_TwoThousandThirteenInvestorWarrantsMember
Change in fair value   
Ending Balance   
2013 Placement Agent Warrants [Member]  
Beginning balance 998us-gaap_FairValueMeasurementWithUnobservableInputsReconciliationsRecurringBasisLiabilityValue
/ us-gaap_MajorTypesOfDebtAndEquitySecuritiesAxis
= BVX_TwoThousandsThirteenPlacementAgentWarrantsMember
Issuances   
Exchange of warrants   
Change in fair value (597)us-gaap_FairValueMeasurementWithUnobservableInputsReconciliationRecurringBasisLiabilityGainLossIncludedInEarnings
/ us-gaap_MajorTypesOfDebtAndEquitySecuritiesAxis
= BVX_TwoThousandsThirteenPlacementAgentWarrantsMember
Ending Balance 401us-gaap_FairValueMeasurementWithUnobservableInputsReconciliationsRecurringBasisLiabilityValue
/ us-gaap_MajorTypesOfDebtAndEquitySecuritiesAxis
= BVX_TwoThousandsThirteenPlacementAgentWarrantsMember
2010 Investor Warrants [Member]  
Beginning balance 1,065us-gaap_FairValueMeasurementWithUnobservableInputsReconciliationsRecurringBasisLiabilityValue
/ us-gaap_MajorTypesOfDebtAndEquitySecuritiesAxis
= BVX_TwoThousandsTenInvestorWarrantsMember
Issuances   
Exchange of warrants   
Change in fair value (845)us-gaap_FairValueMeasurementWithUnobservableInputsReconciliationRecurringBasisLiabilityGainLossIncludedInEarnings
/ us-gaap_MajorTypesOfDebtAndEquitySecuritiesAxis
= BVX_TwoThousandsTenInvestorWarrantsMember
Ending Balance 220us-gaap_FairValueMeasurementWithUnobservableInputsReconciliationsRecurringBasisLiabilityValue
/ us-gaap_MajorTypesOfDebtAndEquitySecuritiesAxis
= BVX_TwoThousandsTenInvestorWarrantsMember
2010 Placement Agent Warrants [Member]  
Beginning balance 4us-gaap_FairValueMeasurementWithUnobservableInputsReconciliationsRecurringBasisLiabilityValue
/ us-gaap_MajorTypesOfDebtAndEquitySecuritiesAxis
= BVX_TwoThousandsTenPlacementAgentWarrantsMember
Issuances   
Exchange of warrants   
Change in fair value (2)us-gaap_FairValueMeasurementWithUnobservableInputsReconciliationRecurringBasisLiabilityGainLossIncludedInEarnings
/ us-gaap_MajorTypesOfDebtAndEquitySecuritiesAxis
= BVX_TwoThousandsTenPlacementAgentWarrantsMember
Ending Balance $ 2us-gaap_FairValueMeasurementWithUnobservableInputsReconciliationsRecurringBasisLiabilityValue
/ us-gaap_MajorTypesOfDebtAndEquitySecuritiesAxis
= BVX_TwoThousandsTenPlacementAgentWarrantsMember

XML 22 R28.htm IDEA: XBRL DOCUMENT v2.4.1.9
INTANGIBLE ASSETS (Details Narrative) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Intangible Assets Details Narrative    
Amortization of Intangible Assets $ 27,000us-gaap_AmortizationOfIntangibleAssets $ 49,000us-gaap_AmortizationOfIntangibleAssets
XML 23 R30.htm IDEA: XBRL DOCUMENT v2.4.1.9
EARNINGS PER SHARE (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Earnings Per Share Details    
Net income (loss) available to common shareholders $ 12,858us-gaap_NetIncomeLossAttributableToNoncontrollingInterest $ (9,811)us-gaap_NetIncomeLossAttributableToNoncontrollingInterest
Effect of dilutive securities    
Derivative liability - warrants (1,444)BVX_DerivativeLiabilityWarrantsNumerator   
Accretion on convertible preferred stock 222BVX_AccretionOnConvertiblePreferredStockNumerator   
Numerator for diluted income (loss) per common share 11,636BVX_NumeratorForDilutedIncomeLossPerCommonShare (9,811)BVX_NumeratorForDilutedIncomeLossPerCommonShare
Weighted average shares used to compute basic income (loss) per common share 18,615us-gaap_WeightedAverageNumberOfSharesOutstandingBasic 17,684us-gaap_WeightedAverageNumberOfSharesOutstandingBasic
Effect of dilutive securities:    
Derivative liability - warrants 326BVX_DerivativeLiabilityWarrantsDenominator   
Convertible preferred stock 1,116BVX_ConvertiblePreferredStock   
Stock options 413BVX_StockOptions   
Denominator for diluted income (loss) per common share $ 20,470BVX_DenominatorForDilutedIncomeLossPerCommonShare $ 17,684BVX_DenominatorForDilutedIncomeLossPerCommonShare
Basic income (loss) per common share $ 0.69us-gaap_EarningsPerShareBasic $ (0.55)us-gaap_EarningsPerShareBasic
Diluted income (loss) per common share $ 0.57us-gaap_EarningsPerShareDiluted $ (0.55)us-gaap_EarningsPerShareDiluted
XML 24 R31.htm IDEA: XBRL DOCUMENT v2.4.1.9
EARNINGS PER SHARE (Details Narrative)
3 Months Ended
Mar. 31, 2014
Earnings Per Share Details Narrative  
Common stock options and warrants 7,500,000BVX_CommonStockOptionsAndWarrants
Conversion of Series A Preferred Stock 3,500,000BVX_ConversionOfSeriesPreferredStock
XML 25 R8.htm IDEA: XBRL DOCUMENT v2.4.1.9
INVENTORIES
3 Months Ended
Mar. 31, 2015
Notes to Financial Statements  
NOTE 2. INVENTORIES

Inventories are stated at the lower of cost or market. Cost is determined principally on the average cost method. Inventories at March 31, 2015 and December 31, 2014 were as follows (in thousands):

 

    March 31,     December 31,  
    2015     2014  
             
Raw materials   $ 3,806     $ 4,162  
Work in process     1,729       1,230  
Finished goods     1,595       1,412  
Gross inventories     7,130       6,804  
Less: reserve for obsolescence     (1,000 )     (1,077 )
                 
Net inventories   $ 6,130     $ 5,727  

XML 26 R32.htm IDEA: XBRL DOCUMENT v2.4.1.9
STOCK-BASED COMPENSATION (Details) (USD $)
3 Months Ended
Mar. 31, 2015
Number of options, outstanding  
Outstanding, beginning of period (in shares) 2,864us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber
Granted (in shares) 40us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross
Exercised (in shares) (5)us-gaap_StockIssuedDuringPeriodSharesStockOptionsExercised
Cancelled (in shares)   
Outstanding, end of period (in shares) 2,899us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber
Weighted average exercise price  
Outstanding, beginning of period (in dollars per share) $ 3.69us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice
Granted (in dollars per share) $ 3.58us-gaap_ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsGrantsInPeriodWeightedAverageExercisePrice
Exercised (in dollars per share) $ 2.25us-gaap_ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsExercisesInPeriodWeightedAverageExercisePrice
Cancelled (in dollars per share)   
Outstanding, end of period (in dollars per share) $ 3.69us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice
XML 27 R40.htm IDEA: XBRL DOCUMENT v2.4.1.9
GEOGRAPHIC AND PRODUCT LINE INFORMATION (Details 1) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Sales by Operating Category $ 6,128us-gaap_SalesRevenueNet $ 6,482us-gaap_SalesRevenueNet
Sales by Operating Category Percent (5.50%)BVX_SalesByOperatingSegmentPercent (5.50%)BVX_SalesByOperatingSegmentPercent
Core [Member]    
Sales by Operating Category 5,525us-gaap_SalesRevenueNet
/ us-gaap_StatementBusinessSegmentsAxis
= BVX_CoreMember
5,431us-gaap_SalesRevenueNet
/ us-gaap_StatementBusinessSegmentsAxis
= BVX_CoreMember
Sales by Operating Category Percent 1.70%BVX_SalesByOperatingSegmentPercent
/ us-gaap_StatementBusinessSegmentsAxis
= BVX_CoreMember
1.70%BVX_SalesByOperatingSegmentPercent
/ us-gaap_StatementBusinessSegmentsAxis
= BVX_CoreMember
OEM [Member]    
Sales by Operating Category 320us-gaap_SalesRevenueNet
/ us-gaap_StatementBusinessSegmentsAxis
= BVX_OEMMember
1,020us-gaap_SalesRevenueNet
/ us-gaap_StatementBusinessSegmentsAxis
= BVX_OEMMember
Sales by Operating Category Percent (68.60%)BVX_SalesByOperatingSegmentPercent
/ us-gaap_StatementBusinessSegmentsAxis
= BVX_OEMMember
(68.60%)BVX_SalesByOperatingSegmentPercent
/ us-gaap_StatementBusinessSegmentsAxis
= BVX_OEMMember
J-Plas ma [Member]    
Sales by Operating Category $ 283us-gaap_SalesRevenueNet
/ us-gaap_StatementBusinessSegmentsAxis
= BVX_JPlasmaMember
$ 31us-gaap_SalesRevenueNet
/ us-gaap_StatementBusinessSegmentsAxis
= BVX_JPlasmaMember
Sales by Operating Category Percent 812.90%BVX_SalesByOperatingSegmentPercent
/ us-gaap_StatementBusinessSegmentsAxis
= BVX_JPlasmaMember
812.90%BVX_SalesByOperatingSegmentPercent
/ us-gaap_StatementBusinessSegmentsAxis
= BVX_JPlasmaMember
XML 28 R2.htm IDEA: XBRL DOCUMENT v2.4.1.9
CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2014
Current assets:    
Cash and cash equivalents $ 15,396us-gaap_CashAndCashEquivalentsAtCarryingValue $ 5,733us-gaap_CashAndCashEquivalentsAtCarryingValue
Restricted cash 839us-gaap_RestrictedCashAndCashEquivalents 899us-gaap_RestrictedCashAndCashEquivalents
Trade accounts receivable, net 1,398us-gaap_AccountsReceivableNetCurrent 1,992us-gaap_AccountsReceivableNetCurrent
Inventories, net 6,130us-gaap_InventoryNet 5,727us-gaap_InventoryNet
Current portion of deposits 286us-gaap_DepositsAssetsCurrent 210us-gaap_DepositsAssetsCurrent
Prepaid expenses and other current assets 1,011us-gaap_PrepaidExpenseAndOtherAssetsCurrent 804us-gaap_PrepaidExpenseAndOtherAssetsCurrent
Total current assets 25,060us-gaap_AssetsCurrent 15,365us-gaap_AssetsCurrent
Property and equipment, net 7,011us-gaap_PropertyPlantAndEquipmentNet 6,947us-gaap_PropertyPlantAndEquipmentNet
Brand name and trademark 1,510us-gaap_IndefiniteLivedTrademarks 1,510us-gaap_IndefiniteLivedTrademarks
Purchased technology and license rights, net 404us-gaap_FiniteLivedIntangibleAssetsNet 431us-gaap_FiniteLivedIntangibleAssetsNet
Deposits, net of current portion 164us-gaap_DepositsAssetsNoncurrent 165us-gaap_DepositsAssetsNoncurrent
Other assets 439us-gaap_OtherAssetsNoncurrent 415us-gaap_OtherAssetsNoncurrent
Total assets 34,588us-gaap_Assets 24,833us-gaap_Assets
Current liabilities:    
Accounts payable 1,876us-gaap_AccountsPayableCurrent 1,553us-gaap_AccountsPayableCurrent
Accrued payroll 118us-gaap_AccruedSalariesCurrent 197us-gaap_AccruedSalariesCurrent
Accrued vacation 209us-gaap_AccruedVacationCurrent 181us-gaap_AccruedVacationCurrent
Current portion of mortgage note payable 239us-gaap_LoansPayableToBankCurrent 239us-gaap_LoansPayableToBankCurrent
Accrued and other liabilities 1,634us-gaap_AccruedLiabilitiesCurrent 1,596us-gaap_AccruedLiabilitiesCurrent
Total current liabilities 4,076us-gaap_LiabilitiesCurrent 3,766us-gaap_LiabilitiesCurrent
Mortgage note payable, net of current portion 3,113us-gaap_LongTermLoansFromBank 3,173us-gaap_LongTermLoansFromBank
Deferred rents 22us-gaap_DeferredRentCreditNoncurrent 23us-gaap_DeferredRentCreditNoncurrent
Deferred tax liability 563us-gaap_DeferredCreditsAndOtherLiabilitiesNoncurrent 564us-gaap_DeferredCreditsAndOtherLiabilitiesNoncurrent
Derivative liabilities 622BVX_AssetPurchaseAgreementLiabilityNoncurrent 12,613BVX_AssetPurchaseAgreementLiabilityNoncurrent
Total liabilities 8,396us-gaap_Liabilities 20,139us-gaap_Liabilities
Series A 6% convertible preferred stock, par value $0.001; 3,500,000 shares authorized, zero issued and outstanding as of March 31, 2015    3,190BVX_SeriesAConvertiblePreferredStock
STOCKHOLDER'S EQUITY:    
Series B convertible preferred stock, par value $.001; 3,588,139 issued and outstanding as of March 31, 2015 4us-gaap_PreferredStockValue   
Common stock, par value $.001 par value; 40,000,000 shares authorized; 23,335,894 issued and 23,192,815 outstanding as of March 31, 2015 and 17,995,409 issued and 17,852,330 outstanding as of December 31, 2014, respectively 23us-gaap_CommonStockValue 18us-gaap_CommonStockValue
Additional paid-in capital 41,155us-gaap_AdditionalPaidInCapital 29,334us-gaap_AdditionalPaidInCapital
Accumulated deficit (14,990)us-gaap_RetainedEarningsAccumulatedDeficit (27,848)us-gaap_RetainedEarningsAccumulatedDeficit
Total stockholders' equity 26,192us-gaap_StockholdersEquity 1,504us-gaap_StockholdersEquity
Total liabilities and stockholders' equity $ 34,588us-gaap_LiabilitiesAndStockholdersEquity $ 24,833us-gaap_LiabilitiesAndStockholdersEquity
XML 29 R6.htm IDEA: XBRL DOCUMENT v2.4.1.9
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Cash flows from operating activities    
Net loss $ (876)us-gaap_NetIncomeLoss $ (9,607)us-gaap_NetIncomeLoss
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization 190us-gaap_DepreciationDepletionAndAmortization 232us-gaap_DepreciationDepletionAndAmortization
Amortization of intangible assets 27us-gaap_DepreciationAndAmortization   
Provision for inventory obsolescence (77)us-gaap_InventoryWriteDown 53us-gaap_InventoryWriteDown
Gain on disposal of property and equipment, net    4us-gaap_GainLossOnDispositionOfAssets
Stock-based compensation 118us-gaap_ShareBasedCompensation 82us-gaap_ShareBasedCompensation
Non cash other income - warrants (1,444)us-gaap_OtherNoncashIncome 9,599us-gaap_OtherNoncashIncome
Provision (benefit) for deferred taxes    34us-gaap_OtherNoncashIncomeTaxExpense
Changes in current assets and liabilities:    
Trade receivables 594us-gaap_IncreaseDecreaseInAccountsReceivable (245)us-gaap_IncreaseDecreaseInAccountsReceivable
Prepaid expenses (207)us-gaap_IncreaseDecreaseInPrepaidDeferredExpenseAndOtherAssets (437)us-gaap_IncreaseDecreaseInPrepaidDeferredExpenseAndOtherAssets
Inventories (327)us-gaap_IncreaseDecreaseInInventories 95us-gaap_IncreaseDecreaseInInventories
Deposits and other assets (99)us-gaap_IncreaseDecreaseInDeposits (203)us-gaap_IncreaseDecreaseInDeposits
Accounts payable 323us-gaap_IncreaseDecreaseInAccountsPayable (29)us-gaap_IncreaseDecreaseInAccountsPayable
Litigation settlement liability    (441)BVX_IncreaseDecreaseInLitigationSettlementLiability
Accrued and other liabilities (13)us-gaap_IncreaseDecreaseInAccruedLiabilities (186)us-gaap_IncreaseDecreaseInAccruedLiabilities
Net cash used in operating activities (1,791)us-gaap_NetCashProvidedByUsedInOperatingActivities (1,049)us-gaap_NetCashProvidedByUsedInOperatingActivities
Cash flows from investing activities    
Purchases of property and equipment (254)us-gaap_PaymentsToAcquirePropertyPlantAndEquipment (75)us-gaap_PaymentsToAcquirePropertyPlantAndEquipment
Net cash used in investing activities (254)us-gaap_NetCashProvidedByUsedInInvestingActivities (75)us-gaap_NetCashProvidedByUsedInInvestingActivities
Cash flows from financing activities    
Proceeds from stock options/warrants exercised 177us-gaap_ProceedsFromStockOptionsExercised   
Change in restricted cash 60us-gaap_IncreaseDecreaseInRestrictedCash   
Change in mortgage note payable (60)us-gaap_RepaymentsOfLongTermDebt 3,592us-gaap_RepaymentsOfLongTermDebt
Proceeds from issuance of common shares, net 11,531us-gaap_ProceedsFromIssuanceOfCommonStock   
Repayment of industrial revenue bonds    (3,257)BVX_RepaymentOfIndustrialRevenueBonds
Repurchase of warrants    (421)us-gaap_PaymentsForRepurchaseOfWarrants
Net cash provided by (used in) financing activities 11,708us-gaap_NetCashProvidedByUsedInFinancingActivities (86)us-gaap_NetCashProvidedByUsedInFinancingActivities
Net change in cash and cash equivalents 9,663us-gaap_CashAndCashEquivalentsPeriodIncreaseDecrease (1,210)us-gaap_CashAndCashEquivalentsPeriodIncreaseDecrease
Cash and cash equivalents, beginning of period 5,733us-gaap_CashAndCashEquivalentsAtCarryingValue 7,924us-gaap_CashAndCashEquivalentsAtCarryingValue
Cash and cash equivalents, end of period 15,396us-gaap_CashAndCashEquivalentsAtCarryingValue 6,714us-gaap_CashAndCashEquivalentsAtCarryingValue
Cash paid during the three months ended March 31, 2015 and 2014 for:    
Interest paid, net 40us-gaap_InterestPaid 28us-gaap_InterestPaid
Income taxes      
XML 30 R35.htm IDEA: XBRL DOCUMENT v2.4.1.9
COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Details 1) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2015
2015 $ 4,813us-gaap_UnrecordedUnconditionalPurchaseObligationBalanceOnFirstAnniversary
2016 239us-gaap_UnrecordedUnconditionalPurchaseObligationBalanceOnSecondAnniversary
2017 2,874us-gaap_UnrecordedUnconditionalPurchaseObligationBalanceOnThirdAnniversary
Purchase Commitments [Member]  
2015 4,574us-gaap_UnrecordedUnconditionalPurchaseObligationBalanceOnFirstAnniversary
/ us-gaap_FiniteLivedIntangibleAssetsByMajorClassAxis
= BVX_PurchaseCommitmentsMember
2016   
2017   
Long Term Debt [Member]  
2015 239us-gaap_UnrecordedUnconditionalPurchaseObligationBalanceOnFirstAnniversary
/ us-gaap_FiniteLivedIntangibleAssetsByMajorClassAxis
= us-gaap_LongTermDebtMember
2016 239us-gaap_UnrecordedUnconditionalPurchaseObligationBalanceOnSecondAnniversary
/ us-gaap_FiniteLivedIntangibleAssetsByMajorClassAxis
= us-gaap_LongTermDebtMember
2017 $ 2,874us-gaap_UnrecordedUnconditionalPurchaseObligationBalanceOnThirdAnniversary
/ us-gaap_FiniteLivedIntangibleAssetsByMajorClassAxis
= us-gaap_LongTermDebtMember
XML 31 R22.htm IDEA: XBRL DOCUMENT v2.4.1.9
EARNINGS PER SHARE (Tables)
3 Months Ended
Mar. 31, 2015
Earnings Per Share Tables  
Computation of basic and diluted earnings (loss) per share

The following table provides the computation of basic and diluted earnings per share for the three month periods ending March 31, 2015 and 2014.

 

    Three Months Ended  
    March 31,  
(in thousands, except per share data)   2015     2014  
Numerator:            
Net income (loss) available to common shareholders   $ 12,858     $ (9,811 )
Effect of dilutive securities                
Derivative liability - warrants   $ (1,444 )   $ -  
Accretion on  convertible preferred stock   $ 222     $ -  
Numerator for diluted income (loss) per common share   $ 11,636     $ (9,811 )
                 
Denominator:                
Weighted average shares used to compute basic income (loss) per common share     18,615       17,684  
Effect of dilutive securities:                
Derivative liability - warrants     326       -  
Convertible preferred stock     1,116       -  
Stock options     413       -  
Denominator for diluted income (loss) per common share     20,470       17,684  
                 
Basic income (loss) per common share   $ 0.69     $ (0.55 )
Diluted income (loss) per common share   $ 0.57     $ (0.55 )

  

XML 32 R36.htm IDEA: XBRL DOCUMENT v2.4.1.9
COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Details Narrative) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Rent expense $ 27,000us-gaap_LeaseAndRentalExpense $ 12,000us-gaap_LeaseAndRentalExpense
Net revenues 65.60%us-gaap_FairValueInputsLongTermNetOfTaxOperatingIncomeMarginPercent 58.70%us-gaap_FairValueInputsLongTermNetOfTaxOperatingIncomeMarginPercent
McKesson [Member]    
Customers accounted for sales percentage 18.90%BVX_CustomersAccountedForSalesPercentage
/ us-gaap_MajorCustomersAxis
= BVX_McKessonMember
 
NDC [Member]    
Customers accounted for sales percentage 13.80%BVX_CustomersAccountedForSalesPercentage
/ us-gaap_MajorCustomersAxis
= BVX_NDCMember
 
Medline [Member]    
Customers accounted for sales percentage 11.00%BVX_CustomersAccountedForSalesPercentage
/ us-gaap_MajorCustomersAxis
= BVX_MedlineMember
 
Arthrex [Member]    
Customers accounted for sales percentage   10.10%BVX_CustomersAccountedForSalesPercentage
/ us-gaap_MajorCustomersAxis
= BVX_ArthrexMember
XML 33 R24.htm IDEA: XBRL DOCUMENT v2.4.1.9
COMMITMENTS AND CONTINGENCIES (Tables)
3 Months Ended
Mar. 31, 2015
Commitments And Contingencies Tables  
Future minimum lease payments under operating leases

The following is a schedule of approximate future minimum lease payments under operating leases having remaining terms in excess of one year as of March 31, 2015 for the calendar years ended December 31, 2015 and 2016 (in thousands):

 

2015 $ 81  
2016   111  
Therafter   378  
Total $ 570  

  

Other future contractual obligations

Other future contractual obligations for agreements with initial terms greater than one year and agreements to purchase materials in the normal course of business are summarized as follows (in thousands):

 

    Years Ending December 31,  
Description   2015     2016     2017  
Purchase commitments   $ 4,574     $ -     $ -  
Long-term debt     239       239       2,874  
Total   $ 4,813     $ 239     $ 2,874  
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BASIS OF PRESENTATION
3 Months Ended
Mar. 31, 2015
Notes to Financial Statements  
NOTE 1. BASIS OF PRESENTATION

Unless the context otherwise indicates, the terms “we,” “our,” “us,” “Bovie,” and similar terms refer to Bovie Medical Corporation and its consolidated subsidiaries.

 

The accompanying unaudited consolidated financial statements have been prepared based upon SEC rules that permit reduced disclosure for interim periods. For a more complete discussion of significant accounting policies and certain other information, please refer to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2014. These financial statements reflect all adjustments that are necessary for a fair presentation of results of operations and financial condition for the interim periods shown, including normal recurring accruals and other items. The results for the interim periods are not necessarily indicative of results for the full year.

 

Certain amounts in the March 31, 2014 and December 31, 2014 financial statements have been reclassified to conform to the presentation in the March 31, 2015 financial statements.

XML 36 R3.htm IDEA: XBRL DOCUMENT v2.4.1.9
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
Mar. 31, 2015
Dec. 31, 2014
Stockholders' equity:    
Series A 6% convertible preferred stock, par value $ 0.001BVX_SeriesAConvertiblePreferredStockParValue  
Series A 6% convertible preferred stock, shares authorized 3,500,000BVX_SeriesAConvertiblePreferredStockSharesAuthorized  
Series A 6% convertible preferred stock, shares issued 0BVX_SeriesAConvertiblePreferredStockSharesIssued  
Series B convertible preferred stock, par value $ 0.001us-gaap_PreferredStockParOrStatedValuePerShare  
Series B convertible preferred stock, shares issued 3,588,139us-gaap_PreferredStockSharesIssued  
Series B convertible preferred stock, shares outstanding 3,588,139us-gaap_PreferredStockSharesOutstanding  
Common stock, par value $ 0.001us-gaap_CommonStockParOrStatedValuePerShare $ 0.001us-gaap_CommonStockParOrStatedValuePerShare
Common stock, shares authorized 40,000,000us-gaap_CommonStockSharesAuthorized 40,000,000us-gaap_CommonStockSharesAuthorized
Common stock, shares issued 23,335,894us-gaap_CommonStockSharesIssued 17,995,409us-gaap_CommonStockSharesIssued
Common stock, shares outstanding 23,192,815us-gaap_CommonStockSharesOutstanding 17,852,330us-gaap_CommonStockSharesOutstanding
XML 37 R17.htm IDEA: XBRL DOCUMENT v2.4.1.9
LONG TERM DEBT
3 Months Ended
Mar. 31, 2015
Notes to Financial Statements  
NOTE 11. LONG TERM DEBT

On March 20, 2014, the Company entered into a transaction with The Bank of Tampa, a Florida banking corporation (“Lender”) wherein Lender extended to the Company a mortgage loan in the principal amount of $3,592,000 (the “Loan”). The obligations under the Loan are secured by a first mortgage and security interest in the Company’s Clearwater, Florida facility as well as an assignment of the Company’s accounts receivable. In addition, the Company has pledged an interest in a certificate of deposit in the amount of $839,000 as additional collateral. The amount of the additional collateral required declines on a pro rata basis as principal is paid. The initial maturity date of the Loan is March 20, 2017; however the Company has an option to extend the maturity date until March 20, 2022.

 

Borrowings under the Loan bear interest at LIBOR plus 3.5%, with a fixed monthly principal payment of $19,956. The interest rate at March 31, 2015 was 3.681%

 

The Loan documents contain customary financial covenants, including a covenant that the Company maintains a minimum liquidity of $750,000. Although there is no Debt Service Coverage Ratio (as defined in the Loan Agreement) for the initial term of the Loan, should the Company desire to extend the Loan beyond three years, the Company must maintain a Debt Service Coverage Ratio for each of the preceding four quarters of not less than 1.0 to 1.0. In the event the Loan is extended, the Debt Service Coverage Ratio must not be less than 1.2 to 1.0.

XML 38 R1.htm IDEA: XBRL DOCUMENT v2.4.1.9
Document and Entity Information
3 Months Ended
Mar. 31, 2015
May 05, 2015
Document And Entity Information    
Entity Registrant Name BOVIE MEDICAL CORP  
Entity Central Index Key 0000719135  
Document Type 10-Q  
Document Period End Date Mar. 31, 2015  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Is Entity a Well-known Seasoned Issuer? No  
Is Entity a Voluntary Filer? No  
Is Entity's Reporting Status Current? Yes  
Entity Filer Category Smaller Reporting Company  
Entity Common Stock, Shares Outstanding   23,876,751dei_EntityCommonStockSharesOutstanding
Document Fiscal Period Focus Q1  
Document Fiscal Year Focus 2015  
XML 39 R18.htm IDEA: XBRL DOCUMENT v2.4.1.9
GEOGRAPHIC AND PRODUCT LINE INFORMATION
3 Months Ended
Mar. 31, 2015
Notes to Financial Statements  
Note 12. GEOGRAPHIC AND PRODUCT LINE INFORMATION

International sales represented approximately 14.7% of total revenues for the first three months of 2015, as compared with 17.0% for the first three months of 2014.

   

    Three months ended
March 31,
    Percent  
    2015     2014     Change  
Sales by Domestic and International (in 000's)                  
Domestic   $ 5,225     $ 5,381       -2.9 %
International     903       1,101       -18.0 %
                         
Total   $ 6,128     $ 6,482       -5.5 %

  

Although we have only one reporting segment, beginning in 2014, management began analyzing revenue and other operating metrics across three operating categories.

  

Sales by Operating Category  (in 000's)                  
Core   $ 5,525     $ 5,431       1.7 %
OEM     320       1,020       -68.6 %
J-Plasma     283       31       812.9 %
                         
Total   $ 6,128     $ 6,482       -5.5 %

  

XML 40 R4.htm IDEA: XBRL DOCUMENT v2.4.1.9
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Consolidated Statements Of Operations    
Sales $ 6,128us-gaap_SalesRevenueNet $ 6,482us-gaap_SalesRevenueNet
Cost of sales 3,454us-gaap_CostOfGoodsAndServicesSold 3,726us-gaap_CostOfGoodsAndServicesSold
Gross profit 2,674us-gaap_GrossProfit 2,756us-gaap_GrossProfit
Other costs and expenses:    
Research and development 446us-gaap_ResearchAndDevelopmentExpense 332us-gaap_ResearchAndDevelopmentExpense
Professional services 331us-gaap_ProfessionalFees 258us-gaap_ProfessionalFees
Salaries and related costs 1,952us-gaap_SalariesAndWages 907us-gaap_SalariesAndWages
Selling, general and administrative 2,217us-gaap_SellingGeneralAndAdministrativeExpense 1,201us-gaap_SellingGeneralAndAdministrativeExpense
Total other costs and expenses 4,946us-gaap_OtherCostAndExpenseOperating 2,698us-gaap_OtherCostAndExpenseOperating
Income/(loss) from operations (2,272)us-gaap_OperatingIncomeLoss 58us-gaap_OperatingIncomeLoss
Interest expense, net (40)us-gaap_InterestIncomeExpenseNet (28)us-gaap_InterestIncomeExpenseNet
Change in fair value of liabilities, net 1,444us-gaap_UnrealizedGainLossOnDerivatives (9,599)us-gaap_UnrealizedGainLossOnDerivatives
Total other (expense), net 1,404us-gaap_OtherNonoperatingExpense (9,627)us-gaap_OtherNonoperatingExpense
Loss before income taxes (868)us-gaap_IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest (9,569)us-gaap_IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest
Provision for income taxes, net (8)us-gaap_IncomeTaxExpenseBenefit (38)us-gaap_IncomeTaxExpenseBenefit
Net loss (876)us-gaap_NetIncomeLoss (9,607)us-gaap_NetIncomeLoss
Accretion on convertible preferred stock (222)BVX_AccretionOnConvertiblePreferredStock (204)BVX_AccretionOnConvertiblePreferredStock
Deemed dividend on conversion of warrants and Series A preferred stock to Series B convertible preferred stock 13,956BVX_DeemedDividendOnBeneficialConversionFeature 0BVX_DeemedDividendOnBeneficialConversionFeature
Net income (loss) attributable to common shareholders $ 12,858us-gaap_NetIncomeLossAvailableToCommonStockholdersBasic $ (9,811)us-gaap_NetIncomeLossAvailableToCommonStockholdersBasic
Income (loss) per share    
Basic $ 0.69us-gaap_EarningsPerShareBasic $ (0.55)us-gaap_EarningsPerShareBasic
Diluted $ 0.57us-gaap_EarningsPerShareDiluted $ (0.55)us-gaap_EarningsPerShareDiluted
Weighted average number of shares outstanding- basic 18,615us-gaap_WeightedAverageNumberOfSharesOutstandingBasic 17,684us-gaap_WeightedAverageNumberOfSharesOutstandingBasic
Weighted average number of shares outstanding - dilutive 20,470us-gaap_WeightedAverageNumberOfDilutedSharesOutstanding 17,684us-gaap_WeightedAverageNumberOfDilutedSharesOutstanding
XML 41 R12.htm IDEA: XBRL DOCUMENT v2.4.1.9
EARNINGS PER SHARE
3 Months Ended
Mar. 31, 2015
Notes to Financial Statements  
NOTE 6. EARNINGS PER SHARE

We compute basic earnings per share (“basic EPS”) by dividing the net loss by the weighted average number of common shares outstanding for the reporting period. Diluted earnings per share (“diluted EPS”) gives effect to all dilutive potential shares outstanding (primarily stock options). The following table provides the computation of basic and diluted earnings per share for the three month periods ending March 31, 2015 and 2014.

 

    Three Months Ended  
    March 31,  
(in thousands, except per share data)   2015     2014  
Numerator:            
Net income (loss) available to common shareholders   $ 12,858     $ (9,811 )
Effect of dilutive securities                
Derivative liability - warrants   $ (1,444 )   $ -  
Accretion on  convertible preferred stock   $ 222     $ -  
Numerator for diluted income (loss) per common share   $ 11,636     $ (9,811 )
                 
Denominator:                
Weighted average shares used to compute basic income (loss) per common share     18,615       17,684  
Effect of dilutive securities:                
Derivative liability - warrants     326       -  
Convertible preferred stock     1,116       -  
Stock options     413       -  
Denominator for diluted income (loss) per common share     20,470       17,684  
                 
Basic income (loss) per common share   $ 0.69     $ (0.55 )
Diluted income (loss) per common share   $ 0.57     $ (0.55 )

  

For the three months ended March 31, 2014, options and warrants to purchase approximately 7.5 million shares of common stock respectively, were excluded from the computation of diluted earnings per share because their effects were anti-dilutive. For the three months ended March 31, 2014, the conversion of Series A Preferred Stock into 3,500,000 shares of common stock was excluded from the computation of diluted earnings per share because its effect is anti-dilutive. 

XML 42 R11.htm IDEA: XBRL DOCUMENT v2.4.1.9
FAIR VALUE MEASUREMENTS
3 Months Ended
Mar. 31, 2015
Notes to Financial Statements  
NOTE 5. FAIR VALUE MEASUREMENTS

Certain assets and liabilities that are measured at fair value on a recurring basis are measured in accordance with FASB ASC Topic 820-10-05, Fair Value Measurements. FASB ASC Topic 820-10-05 defines fair value, establishes a framework for measuring fair value and expands the disclosure requirements regarding fair value measurements for financial assets and liabilities as well as for non-financial assets and liabilities that are recognized or disclosed at fair value on a recurring basis in the financial statements.

 

The statement requires fair value measurement be classified and disclosed in one of the following three categories:

 

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

 

Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

 

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

 

Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to their fair value measurement. Our derivative financial instruments that are measured at fair value on a recurring basis are all measured at fair value using Level 3 inputs. Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

 

The following represents a reconciliation of the changes in fair value of warrants measured at fair value using Level 3 inputs during the quarter ended March 31, 2015: 

 

(in $ thousands)   2013
Investor Warrants
    2013
Placement Agent Warrants
    2010
Investor Warrants
    2010
Placement Agent Warrants
    Total  
                               
Balance, December 31, 2014   $ 10,546     $ 998     $ 1,065     $ 4     $ 12,613  
                                         
Issuances     -       -       -       -       -  
                                         
Exchange of warrants (1)     (10,546 )     -       -       -       (10,546 )
                                         
Change in fair value     -       (597 )     (845 )     (2 )     (1,444 )
                                         
Balance, March 31, 2015 (2)   $ -     $ 401     $ 220     $ 2     $ 622  

 

(1) Represents the fair value carrying amount of 5,250,000 warrants that, along with 3,500,000 Series A Preferred shares, were exchanged for 3,588,139 shares of Series B Preferred stock exercisable into 7,176,298 shares of common stock. Resulting in a deemed dividend to the preferred shareholders of $13,956,000.
   
(2) The warrants are valued using a trinomial lattice valuation methodology because that model embodies all of the relevant assumptions that address the features underlying these instruments. Significant assumptions used in the model at March 31, 2015 included the market price of our common stock, an expected dividend yield of zero, the remaining period to the expiration date of the warrants, expected volatility of our common stock over the remaining life of the warrants of 51.6%, estimated based on a review of our historical volatility, and risk-free rates of return of 0.12% for the 2010 warrants and 1.65% for the 2013 warrants based on constant maturity rates published by the U.S. Federal Reserve, applicable to the remaining life of the warrants. We also take into consideration a probability assumption for anti-dilution.

XML 43 R23.htm IDEA: XBRL DOCUMENT v2.4.1.9
STOCK-BASED COMPENSATION (Tables)
3 Months Ended
Mar. 31, 2015
Stock-Based Compensation Tables  
Activity in stock options

Activity in our stock options during the period ended March 31, 2015 was as follows:

 

          Weighted  
    Number of     Average  
    Options     Exercise  
    (in thousands)     Price  
             
Outstanding at December 31, 2014     2,864     $ 3.69  
                 
Granted     40     $ 3.58  
Exercised     (5 )   $ 2.25  
Cancelled     -     $ -  
Outstanding at March 31, 2015     2,899     $ 3.69  
XML 44 R19.htm IDEA: XBRL DOCUMENT v2.4.1.9
INVENTORIES (Tables)
3 Months Ended
Mar. 31, 2015
Inventories Tables  
Schedule of inventory

Inventories are stated at the lower of cost or market. Cost is determined principally on the average cost method. Inventories at March 31, 2015 and December 31, 2014 were as follows (in thousands):

 

    March 31,     December 31,  
    2015     2014  
             
Raw materials   $ 3,806     $ 4,162  
Work in process     1,729       1,230  
Finished goods     1,595       1,412  
Gross inventories     7,130       6,804  
Less: reserve for obsolescence     (1,000 )     (1,077 )
                 
Net inventories   $ 6,130     $ 5,727  

XML 45 R15.htm IDEA: XBRL DOCUMENT v2.4.1.9
COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS
3 Months Ended
Mar. 31, 2015
Notes to Financial Statements  
NOTE 9. COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS

In March 2014, we entered into a lease for offices located in Purchase, New York. The lease is for 3,650 square feet of office space.

 

The following is a schedule of approximate future minimum lease payments under operating leases having remaining terms in excess of one year as of March 31, 2015 for the calendar years ended December 31, 2015 and 2016 (in thousands):

 

2015 $ 81  
2016   111  
Therafter   378  
Total $ 570  

  

Rent expense approximated $27,000 and $12,000 for the three month periods ending March 31, 2015 and 2014 respectively.

 

Other future contractual obligations for agreements with initial terms greater than one year and agreements to purchase materials in the normal course of business are summarized as follows (in thousands):

 

    Years Ending December 31,  
Description   2015     2016     2017  
Purchase commitments   $ 4,574     $ -     $ -  
Long-term debt     239       239       2,874  
Total   $ 4,813     $ 239     $ 2,874  

  

Litigation

 

In the normal course of business, we are subject, from time to time, to legal proceedings, lawsuits and claims. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. If any of these matters arise in the future, it could affect the operating results of any one or more quarters.

 

We expense costs of litigation related to contingencies in the periods in which the costs are incurred.

 

Concentrations

 

Our ten largest customers accounted for approximately 65.6% and 58.7% of net revenues for the three months ended March 31, 2015 and 2014 respectively. For the three months ended March 31, 2015, McKesson, NDC, and Medline accounted for 18.9%, 13.8% and 11.0% of our sales, while for the same three month period ended in 2014, Arthrex accounted for 10.1% of our sales.

XML 46 R13.htm IDEA: XBRL DOCUMENT v2.4.1.9
STOCK-BASED COMPENSATION
3 Months Ended
Mar. 31, 2015
Notes to Financial Statements  
NOTE 7. STOCK-BASED COMPENSATION

Under our stock option plan, our board of directors may grant options to purchase common shares to our key employees, officers, directors and consultants. We account for stock options in accordance with FASB ASC Topic 718, Compensation – Stock Compensation, with option expense amortized over the vesting period based on the trinomial lattice option-pricing model fair value on the grant date, which includes a number of estimates that affect the amount of our expense. During the three months ended March 31, 2015, we expensed approximately $118,575 in stock-based compensation.

  

Activity in our stock options during the period ended March 31, 2015 was as follows:

 

          Weighted  
    Number of     Average  
    Options     Exercise  
    (in thousands)     Price  
             
Outstanding at December 31, 2014     2,864     $ 3.69  
                 
Granted     40     $ 3.58  
Exercised     (5 )   $ 2.25  
Cancelled     -     $ -  
Outstanding at March 31, 2015     2,899     $ 3.69  

  

The grant date fair value of options granted during the first three months of 2015 were estimated on the grant date using a trinomial lattice option-pricing model and the following assumptions: expected volatility of 54%, expected term of between 5-8 years, risk-free interest rate of 0.02%, and expected dividend yield of 0%.

 

Expected volatility is based on a five year average of the historical volatility of the Company's stock. Previous to December 2013, we used a weighted average of our historical volatility combined with a peer group of companies’ volatility, which had openly traded stock options on the options market and weighted to percentages relative to our stock and the peer group at a 50%/50% weighting. The risk-free rate is based on the rate of U.S. Treasury zero-coupon issues with a remaining term equal to the expected life of the options. The Company uses historical data to estimate pre-vesting forfeiture rates.

 

During the three months ended March 31, 2015, we issued 5,000 shares upon the exercise of outstanding stock options.

XML 47 R14.htm IDEA: XBRL DOCUMENT v2.4.1.9
INCOME TAXES
3 Months Ended
Mar. 31, 2015
Notes to Financial Statements  
NOTE 8. INCOME TAXES

We utilize the liability method of accounting for income taxes as set forth in ASC 740. Under the liability method, deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect during the years in which the basis differences reverse. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized. In determining the need for valuation allowances we consider projected future taxable income and the availability of tax planning strategies.

  

We have deferred tax assets mainly from net operating loss and tax credit carry forwards available in certain jurisdictions. During the fourth quarter 2014, management concluded that it is more likely than not that the Company will not realize its net deferred tax assets, and the Company establish a full valuation against it net deferred tax assets with finite life.

  

We assess our income tax positions and record tax benefits for all years subject to examination based upon our evaluation of the facts, circumstances and information available as of the reporting date. For those tax positions where there is a greater than 50% likelihood that a tax benefit will be sustained, we have recorded the largest amount of tax benefit that may potentially be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where there is less than 50% likelihood that a tax benefit will be sustained, no tax benefit has been recognized in the financial statements.

  

Since inception, we have been subject to tax by both federal and state taxing authorities. Until the respective statutes of limitations expire (which may be as much as 20 years while we have unused NOL’s), we are subject to income tax audits in the jurisdictions in which we operate.

XML 48 R16.htm IDEA: XBRL DOCUMENT v2.4.1.9
RELATED PARTY TRANSACTION
3 Months Ended
Mar. 31, 2015
Notes to Financial Statements  
NOTE 10. RELATED PARTY TRANSACTIONS

A relative of Moshe Citronowicz, Bovie’s Senior Vice President, is considered a related party. Arik Zoran is a consultant of the Company doing business as AR Logic, Inc., a consulting firm owned by Arik Zoran, Mr. Citronowicz’s brother. On March 1, 2013 the Company amended the Consulting Services Agreement dated January 2011, extending the term of the existing agreement until December 31, 2014. The agreement shall automatically renew for additional one year periods, unless either party gives written notice of its desire not to renew at least one year prior to the expiration of the initial Term or renewal term. The agreement with AR Logic provides for a monthly retainer for engineering support for our existing generator product line and a separate hourly based fee structure for additional consulting related to new product lines. AR Logic has a royalty contract with us related to the creation and design of proprietary technology that is used in some of our generators. AR Logic was paid consulting fees of approximately $71,610 and $89,000 during the three months ended March 31, 2015 and 2014, respectively.

 

A second relative of Mr. Citronowicz is considered a related party. Yechiel Tsitrinovich is also a brother of Mr. Citronowicz, and acts as a consultant to the Company related to research and development of certain products. Mr. Tsitrinovich has a royalty contract with us related to the creation and design of a proprietary technology that is used in some of our generators. Mr. Tsitrinovich was paid a combination of consulting fees and royalties on previous product designs approximating $23,763 and $18,700 during the three months ended March 31, 2015 and 2014, respectively.

XML 49 R34.htm IDEA: XBRL DOCUMENT v2.4.1.9
COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2015
Future minimum lease payments under operating leases  
2015 $ 81us-gaap_OperatingLeasesFutureMinimumPaymentsDueCurrent
2016 111us-gaap_OperatingLeasesFutureMinimumPaymentsDueInTwoYears
Thereafter 378us-gaap_OperatingLeasesFutureMinimumPaymentsDueThereafter
Total $ 570us-gaap_OperatingLeasesFutureMinimumPaymentsDue
XML 50 R21.htm IDEA: XBRL DOCUMENT v2.4.1.9
FAIR VALUE MEASUREMENTS (Tables)
3 Months Ended
Mar. 31, 2015
Fair Value Measurements Tables  
Activity in Level 3 assets

The following represents a reconciliation of the changes in fair value of warrants measured at fair value using Level 3 inputs during the quarter ended March 31, 2015: 

 

(in $ thousands)   2013
Investor Warrants
    2013
Placement Agent Warrants
    2010
Investor Warrants
    2010
Placement Agent Warrants
    Total  
                               
Balance, December 31, 2014   $ 10,546     $ 998     $ 1,065     $ 4     $ 12,613  
                                         
Issuances     -       -       -       -       -  
                                         
Exchange of warrants (1)     (10,546 )     -       -       -       (10,546 )
                                         
Change in fair value     -       (597 )     (845 )     (2 )     (1,444 )
                                         
Balance, March 31, 2015 (2)   $ -     $ 401     $ 220     $ 2     $ 622  

 

(1) Represents the fair value carrying amount of 5,250,000 warrants that, along with 3,500,000 Series A Preferred shares, were exchanged for 3,588,139 shares of Series B Preferred stock exercisable into 7,176,298 shares of common stock. Resulting in a deemed dividend to the preferred shareholders of $13,956,000.
   
(2) The warrants are valued using a trinomial lattice valuation methodology because that model embodies all of the relevant assumptions that address the features underlying these instruments. Significant assumptions used in the model at March 31, 2015 included the market price of our common stock, an expected dividend yield of zero, the remaining period to the expiration date of the warrants, expected volatility of our common stock over the remaining life of the warrants of 51.6%, estimated based on a review of our historical volatility, and risk-free rates of return of 0.12% for the 2010 warrants and 1.65% for the 2013 warrants based on constant maturity rates published by the U.S. Federal Reserve, applicable to the remaining life of the warrants. We also take into consideration a probability assumption for anti-dilution.

XML 51 R26.htm IDEA: XBRL DOCUMENT v2.4.1.9
INVENTORIES (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2014
Inventories Details    
Raw materials $ 3,806us-gaap_InventoryRawMaterials $ 4,162us-gaap_InventoryRawMaterials
Work in process 1,729us-gaap_InventoryWorkInProcess 1,230us-gaap_InventoryWorkInProcess
Finished goods 1,595us-gaap_InventoryFinishedGoods 1,412us-gaap_InventoryFinishedGoods
Gross inventories 7,130us-gaap_InventoryGross 6,804us-gaap_InventoryGross
Less: reserve for obsolescence (1,000)us-gaap_InventoryValuationReserves (1,077)us-gaap_InventoryValuationReserves
Net inventories $ 6,130us-gaap_InventoryNet $ 5,727us-gaap_InventoryNet
XML 52 R41.htm IDEA: XBRL DOCUMENT v2.4.1.9
GEOGRAPHIC AND PRODUCT LINE INFORMATION (Details Narrative)
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Geographic And Product Line Information Details Narrative    
Percentage of International sales of sales 14.70%BVX_PercentageOfInternationalSalesOfSales 17.00%BVX_PercentageOfInternationalSalesOfSales
XML 53 R5.htm IDEA: XBRL DOCUMENT v2.4.1.9
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (unaudited) (USD $)
In Thousands, except Share data
Preferred Stock
Common Stock
Additional Paid-In Capital
Deficit
Total
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$ 29,334us-gaap_StockholdersEquity
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$ 1,504us-gaap_StockholdersEquity
Beginning Balance, Shares at Dec. 31, 2014    17,854us-gaap_SharesIssued
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Options exercised, Shares    5us-gaap_StockIssuedDuringPeriodSharesShareBasedCompensation
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      13,956BVX_ConversionOfSeriesPreferredStockAndCommonWarrantsToSeriesBPreferredStockAmount
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13,960BVX_ConversionOfSeriesPreferredStockAndCommonWarrantsToSeriesBPreferredStockAmount
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Stock swap to acquire options, Amount       (273)BVX_StockSwapToAcquireOptionsAmount
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$ 23us-gaap_StockholdersEquity
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XML 54 R10.htm IDEA: XBRL DOCUMENT v2.4.1.9
NEW ACCOUNTING PRONOUNCEMENTS
3 Months Ended
Mar. 31, 2015
Notes to Financial Statements  
NOTE 4. NEW ACCOUNTING PRONOUNCEMENTS

We have reviewed recently issued standards and have determined they will not have a material impact on our consolidated financial statements, or do not apply to our operations.

XML 55 R27.htm IDEA: XBRL DOCUMENT v2.4.1.9
INTANGIBLE ASSETS (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Dec. 31, 2014
Net carrying amount $ 404us-gaap_FiniteLivedIntangibleAssetsNet $ 431us-gaap_FiniteLivedIntangibleAssetsNet
Trade Names [Member]    
Indefinite-lived intangible assets 1,510us-gaap_IndefiniteLivedIntangibleAssetsExcludingGoodwill
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Indefinite-lived intangible assets 1,441us-gaap_IndefiniteLivedIntangibleAssetsExcludingGoodwill
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(1,010)us-gaap_FiniteLivedIntangibleAssetsAccumulatedAmortization
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Purchased Technology [Member] | Minimum [Member]    
Useful life 9 years  
Purchased Technology [Member] | Maximum [Member]    
Useful life 17 years  
License Rights [Member]    
Indefinite-lived intangible assets 316us-gaap_IndefiniteLivedIntangibleAssetsExcludingGoodwill
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Net carrying amount      
Useful life 5 years  
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LONG TERM DEBT (Details Narrative)
Mar. 31, 2015
Notes to Financial Statements  
Interest rate 3.681%us-gaap_LongtermDebtWeightedAverageInterestRate
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INTANGIBLE ASSETS (Tables)
3 Months Ended
Mar. 31, 2015
Intangible Assets Tables  
Schedule of intangible assets

At March 31, 2015 and December 31, 2014 intangible assets consisted of the following (in thousands):

 

    March 31,     December 31,  
    2015     2014  
             
Trade name (life indefinite)   $ 1,510     $ 1,510  
                 
Purchased technology (9-17 yr life)   $ 1,441     $ 1,441  
Less: accumulated amortization     (1,037 )     (1,010 )
                 
Net carrying amount   $ 404     $ 431  
                 
License rights (5 yr life)   $ 316     $ 316  
Less accumulated amortization     (316 )     (316 )
Net carrying amount   $ -     $ -