U.S.
SECURITIES AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
 
 **FORM
10-KSB/A**
 **(Mark
One)**
 
 **[X]
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE**
 **SECURITIES
EXCHANGE ACT OF 1934**
 
 For the
fiscal year ended December 31, 2004
 Commission
file number 0-12183
 
 **BOVIE
MEDICAL CORPORATION**
  (Exact
name of small business issuer as specified in its charter)
 
 Delaware
      No.
    
    11-2644611(State
      or other jurisdiction
    
    (IRS
      Employer Identification No.)of
      incorporation or organization)
 
 **734
Walt Whitman Rd., Melville, New York 11747**
 (Address
of principal executive offices)
 
 **(631)
421-5452**
 (Issuer's
telephone number)
 
 **Securities
registered under Section 12(b) of the Exchange Act**
 Common
Stock, $.001 Par Value
 (Title of
class)
 
 **Securities
registered under Section 12(g) of the Exchange Act**
 None
 
 Indicate
by check mark whether the registrant (I) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes
[X] No[ ]
 
 Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
any amendment to this Form 10-KSB. [ ]
 
 Issuer’s
revenues for its most recent fiscal year were $20,495,101.
 
 The
aggregate market value of the voting stock held by non-affiliates computed by
reference to the price at which the stock was sold, or the average bid and asked
prices of such stock, as of March 15, 2005 was approximately
$26,528,577.
 
 The
number of shares of the registrant's $.01 par value common stock
outstanding as of March 15 was 13,897,858.
 
 Company
Symbol-BVX Company SIC (Standard Industrial Code)-3841
  
  EXPLANATORY
NOTE
 
 This
amendment amends and updates Items 1, 8A,10 and 13, of Form 10KSB for the year
ended December 31, 2004,as amended.
 
  
  **BOVIE
MEDICAL CORPORATION**
  **Part
I**
 
 **Item
1. Description of Business.**
 
 **Background**
 
 Bovie
Medical Corporation (“the Company” or “Bovie”) was incorporated in 1982, under
the laws of the State of Delaware and has its principal executive office at 734
Walt Whitman Road, Melville, New York 11747.
 
 Bovie is
actively engaged in the business of manufacturing and marketing medical products
and developing related technologies. Aaron Medical Industries, Inc. (“Aaron”), a
100% owned subsidiary based in St. Petersburg, Florida is engaged in marketing
our medical products. Over the past several years, we changed our focus to the
manufacture and marketing of generators and electrosurgical disposables,
evidenced by the development of a broad range of electrosurgical generators
designed for doctor’s offices, surgicenters and hospitals.
 
 We
manufacture and market products both under private label and the Bovie/Aaron
label to distributors worldwide. Additionally, Bovie/Aaron has original
equipment manufacturing (OEM) agreements with other medical device
manufacturers. These OEM and private label arrangements and our use of the
Bovie/Aaron label allow us to gain greater market share for the distribution of
our products.
 
 **Company
Products**
 
 **Electrosurgery
Products**
 
 We
continue to expand our line of electrosurgery products, which include,
generators, electrodes, electrosurgery pencils, and various ancillary disposable
products. These products are used in surgery for the cutting and coagulation of
tissue and constitute our largest product line. Our accessories for
electrosurgery products are substantially compatible with most major
manufacturers’ electrosurgery generator products. With the exception of OEM
products, all of our electrosurgery generators and accessories are marketed
using the internationally recognized Bovie trademark. It is estimated that 80%
of all surgical procedures performed worldwide are accomplished by
electrosurgery, including laparoscopic, as well as general surgery and surgical
procedures in gynecology, urology, plastic surgery and dermatology.
 
 **Bovie/Aaron
800 and 900 High Frequency Generators**
 
 These
products are low powered generators, designed primarily for dermatology and
plastic surgery in a physician’s office. The units are 30-watt high frequency
generators used mainly in doctors’ offices for removing small skin lesions and
growths.
 
 **Bovie/Aaron
950**
 
 Bovie has
developed the first high frequency generator with cut capacity for outpatient
surgical procedures. It was designed mainly for use in doctors’ offices and is
utilized in a variety of specialties including dermatology, gynecology, and
plastic surgery.
 
 **Bovie/Aaron
1250**
 
 We have
also developed a 120-watt multipurpose electrosurgery generator. The unit
features monopolar and bipolar functions with pad sensing. The product is being
produced in at least two private label formats in addition to the Bovie/Aaron
label.
 
  -1-
  **Bovie/Aaron
2250/IDS 300**
 
 Given the
market interest in more powerful electrosurgical generators, we have developed a
200-watt multipurpose digital electrosurgery generator designed for the rapidly
expanding surgi-center market in the United States. This unit features both
monopolar and bipolar functions, has pad and tissue sensing, plus nine blended
cutting settings. This unit has the capability to do most procedures performed
today in the surgi-center or outpatient settings and was introduced in 2003. The
Bovie® IDS Series are the latest electrosurgical generators with fully digital
implementation. Bovie is using dedicated digital hardware instead of a general
purpose controller for processing data. The digital hardware allows very high
parallel data processing throughout the operation. All data is sampled and
processed digitally. While 200 watts is more than enough power to do most
procedures in the operating room, 300 watts is considered the standard and
believed to be what most hospitals and surgi-centers will require. The Bovie
IDS-300 has been designed based on a digital feedback system. The unit has a
tissue sensing capability 20 times faster than the market leader. For the first
time in electrosurgery, through digital technology, we are able to measure
tissue impedance in real time (5000 times a second). As the impedance varies,
the power is adjusted to deliver a consistent clinical effect.
 
 **Battery
Operated Cauteries**
 
 Battery
operated cauteries constitute our second largest product line. Cauteries were
originally designed for precise hemostasis (to stop bleeding) in ophthalmology.
The current use of cauteries has been substantially expanded to include
sculpting woven grafts in bypass surgery, vasectomies, evacuation of subungual
hematoma (smashed fingernail) and for arresting bleeding in many types of
surgery. Battery operated cauteries are primarily sterile one-time use products.
Bovie manufactures the broadest line of cauteries in the world, including but
not limited to, a line of replaceable battery and tip cauteries, which are
popular in overseas markets.
 
 **Battery
Operated Medical Lights**
 
 We
manufacture a variety of specialty lighting instruments for use in ophthalmology
as well as patented specialty lighting instruments for general surgery, hip
replacement surgery and for the placement of endotracheal tubes in emergency and
surgical procedures. We also manufacture and market physicians office use
penlights.
 
 **Nerve
Locator Stimulator**
 
 Bovie
manufactures a nerve locator stimulator primarily used for identifying motor
nerves in hand and facial reconstructive surgery. This instrument is a
self-contained, battery-operated unit, used for single surgical
procedures.
 
 **New
Products**
 
 **Low
Temperature Focused Plasma Technology (in development)**
 
 In
February 2000, we entered into a Joint Venture Agreement with a non-affiliated
German corporation, Jump Agentur Fur Elektrotechnik GMBH, wherein we have a 50%
interest in the equity and a 50% interest in the profits of the joint venture.
Pursuant to the agreement, Bovie initially advanced $200,000 to the partnership
to cover costs of further research toward the production of two commercial
prototypes. Bovie has made available its facilities in Florida for development,
manufacturing and marketing of the products of the joint venture and is
responsible to expend its best efforts to secure all necessary financing for the
research, development and marketing of the products estimated to be an amount up
to $1.5 millions. To date we have expended approximately $.5 million for the
development of the technology. Based upon our current cash position, cash flows
and credit facility we believe we have the financial resources to satisfy our
obligations.
  -2-
  
 Pursuant
to agreement, the joint venture acquired an exclusive license to produce and
market any surgical/medical devices utilizing this technology. In fiscal 2004
and 2003, Bovie made additional advances to the joint venture in the form of
research and development of prototypes expending $39,286 and $81,914 in
development and engineering costs, respectively.
 
 This
technology utilizes a gas ionization process using only one working electrode.
The device produces a stable thin focused beam of ionized gas that can be
controlled in a wide range of temperatures and intensities, providing the
surgeon with precision, minimal invasiveness and an absence of conductive
currents during surgery.
 
 The
device has been developed and patented in both Europe and the United States.
Bovie has constructed its first two pre-production prototypes for field-testing
purposes as a prelude to eventual FDA submission and clearance for
manufacturing. The initial intended uses are in the areas of dermatology,
plastic surgery, cosmetology and gastroenterology.
 
 To date
there have been no revenues recorded by the joint venture.
 
 **GI
Device (in development)**
 
 This new
electrosurgical generator has been designed as a specialty electrosurgical niche
product for the gastroenterological market. The device’s styling adds a new
dimension to Bovie’s continued expansive array of generators. Additionally, the
product is expected to be the basis for other new electrosurgical generator
introductions.
 
 **Suture
Removal Device (in development)**
 
 In
October, 2003 we entered into an exclusive worldwide license agreement with
Emergency Medicine Innovations, LLC., **** (EMI) a
non-affiliated company, to manufacture and market a disposable suture removal
device (patent pending). The device is expected to reduce time for removing
stitches in a doctor’s office, medical clinic or emergency room. The device is
designed to remove sutures with a tension free cut to be utilized in various
medical procedures on humans and animals. We are presently developing
pre-production prototypes and subject to FDA clearance for marketing, we have
now targeted the last quarter of 2005 for release and marketing to medical
professionals. We expended development funds of approximately $50,000 in 2004
and when the product begins selling we will pay a 6% royalty to
EMI.
 
 The
exclusive license agreement provides for, among other things, a term of 15
years, with automatic 2-year renewals thereafter, subject to mutual agreement on
minimum production and sales. Bovie has the right to terminate on 90-days notice
to Licensor if it determines in its sole discretion that the product is
non-competitive and not commercially viable. Licensor may terminate the
agreement if Bovie violates a material term and does not cure the breach within
60-days after receipt of notice of default. In addition, Bovie may lose
exclusivity if there is a 10% decrease in sales over a consecutive two calendar
year period. Bovie may elect to retain exclusivity by paying sufficient
royalties to off-set loss to Licensor due to the decreased sales.
 
 
 **Manufacturing,
Marketing and Distribution**
 
 Bovie
manufactures the majority of its products on its premises in St. Petersburg,
Florida. Labor-intensive sub-assemblies and labor-intensive products may be
out-sourced to our specification. Although we sell through distributors, we
market our products through national trade journal advertising, direct mail,
distributor sales representatives and trade shows, under the Bovie name, the
Bovie/Aaron name and private label. Major distributors include Allegiance (a
Cardinal Company), IMCO, McKesson Medical Surgical, Inc., NDC (Abco, Cida and
Starline), Owens & Minor, and Physician Sales & Service.
  -3-
  
 We have a
major OEM customer, Arthrex, Inc., for which we manufacture products on a
private label basis, pursuant to agreement. The agreement provides, among other
things, that we will be reimbursed for our expenses in developing products
according to Arthrex’s specifications. Arthrex owns the technology and we may
not generally compete with the product developed in Arthrex markets. The
agreement further provides that Arthrex is not obliged to place any orders for
the product developed, but if it does seek to place orders, it must place them
with us. The agreement also generally provides for product warranties,
insurance, termination, and confidentiality. In fiscal 2004, Arthrex orders
represented approximately 29% of revenues for us. As such, should Arthrex
determine to reduce or cease placement of orders for the products, our business
will be adversely affected.
 
 **Competition**
 
 The
medical device industry is highly competitive. Many competitors in this industry
are well established, do a substantially greater amount of business, and have
greater financial resources and facilities than we do.
 
 We
believe we rank third in the field of electrosurgical generator manufacturing
and we sell our products and compete with other manufacturers in various ways.
In addition to advertising, attending trade shows and supporting our
distribution channels, we strive to enhance product quality, improve user
friendliness and expand product exposure.
 
 We also
compete by private labeling our products for major distributors under their
label. This allows us to have our product in the marketplace and thereby compete
from two different approaches, our Aaron or Bovie label, and our customers
private label. Our private label customers distribute our products under their
name through their internal sales force. Our main competitors do not private
label their products
 
 Lastly,
we only sell our product through distributors. Since we never sell direct to the
end user we are participating with our distribution partners, and never
competing with them. Many of the companies we compete with sell direct, thus
competing directly with distributors they sometimes use.
 
 Main
competitors are Conmed, Valleylab (a division of Tyco), in the electrosurgery
market and Xomed (a division of Medtronics) in the battery operated cautery
market.
 
 **Government
Regulation**
 
 **United
States**
 
 The
Company’s products and research and development activities are subject to
regulation by the FDA and other regulatory bodies. FDA regulations govern, among
other things, the following activities:
 
 ·
    Product
      development
 ·
    Product
      testing
 ·
    Product
      labeling
 ·
    Product
      storage
 ·
    Pre-marketclearance
      or approval
 ·
    Advertising
      and promotion
 ·
    Product
      tractability, and
 ·
    Product
      indications
 
 In the
United States, medical devices are classified on the basis of control deemed
necessary to reasonably ensure the safety and effectiveness of the device. Class
I devices are subject to general controls. These controls include registration
and listing, labeling, pre-market notification and adherence to the FDA Quality
System Regulation. Class II devices are subject to general and special controls.
Special controls include performance standards, post market surveillance,
patient registries and FDA guidelines. Class III devices are those which must
receive pre-market approval by the FDA to ensure their safety and effectiveness.
Currently, we only manufacture Class I and Class II devices.
  -4-
  **Manufacturing**
 
 Manufacturing
and distribution of our products may be subject to continuing regulation by the
FDA. We will also be subject to routine inspections by the FDA to determine
compliance with the following:
 
 ·
    Quality
      System Regulations
 ·
    Medical
      device reporting regulations, and
 ·
    FDA
      restrictions on promoting products for unapproved or off-label
      uses.
 
 In
addition to regulations enforced by the FDA, we are also subject to regulations
under the Occupational Safety and Health Act, the Environmental Protection Act
and other federal, state and local regulations.
 
 **International**
 
 To market
products in the European Union and countries other than the United States, we
must obtain regulatory approval similar to that required by the FDA. All of our
medical devices are classified as Class III devices under the European Medical
Devices directive. Therefore, we were required to obtain a “CE Mark”
certification from a “Notified Body” in one of the member countries in the
European Union. CE Mark certification is an international symbol of adherence to
quality assurance standards and compliance with the applicable European Medical
Devices Directive.
 
 Approval
by a Notified Body typically includes a detailed review of the following:
 
 ·
    Description
      of the device and its components,
 ·
    Safety
      and performance of the device,
 ·
    Clinical
      evaluations with respect to the device,
 ·
    Methods,
      facilities and quality controls used to manufacture the device,
      and
 ·
    Proposed
      labeling for the device.
 
 Manufacturing
and distribution of a device is subject to continued inspection and regulation
by the Notified Body after CE Mark certification to ensure compliance with
quality control and reporting requirements.
 
 Pre-market
notification clearance must be obtained for some Class I and most Class II
devices when the FDA does not require pre-market approval. A pre-market approval
application is required for most Class III devices. A pre-market approval
application must be supported by valid scientific evidence to demonstrate the
safety and effectiveness of the device. The pre-market approval application
typically includes:
 
 ·
    Results
      of bench and laboratory tests, animal studies, and clinical
      studies,
 ·
    A
      complete description of the device and its
components,
 ·
    A
      detailed description of the methods, facilities and controls used to
      manufacture the device, and
 ·
    Proposed
      labeling.
 
 The
approval process can be expensive, uncertain and lengthy. A number of devices
for which FDA approval has been sought by other companies have never been
approved for marketing. To date we have not experienced non-approval of any of
our devices heretofore submitted to the FDA.
 
 We
obtained CE Mark certification to market our products in the European Union in
1999. In addition to CE Mark certification, each member country of the European
Union maintains the right to impose additional regulatory requirements.
 
 Outside
of the European Union, regulations vary significantly from country to country.
The time required to obtain approval to market products may be longer or shorter
than that required in the United States or the European Union. Certain European
countries outside of the European Union do recognize and give effect to the CE
Mark certification. We are permitted to market and sell our products in those
countries.
 
 **Patents
and Trademarks**
 
 We own a
total of twelve outstanding patents do not believe our current patents have a
material effect on our operations. Although the useful lives of our existing
patents have substantially diminished, we can give no assurance that competitors
will not infringe on our patent rights or otherwise create similar or
non-infringing competing products that are technically patentable in their own
right.
  -5-
  
 **Liability
Insurance**
 
 The
manufacture and sale of medical products entail significant risk of product
liability claims. Bovie currently maintains product liability insurance with
combined coverage limits of $5 million on a claim made basis. There is no
assurance that this coverage will be adequate to protect us from any liabilities
we might incur in connection with the sale or testing of our products. In
addition, we may need increased product liability coverage as products are
commercialized. This insurance is expensive and in the future may not be
available on acceptable terms, if at all.
 
 **Research
and Development**
 
 The
amount expended by us on research and development of its products during the
years 2004 and 2003, totaled $907,389 and $717,347 respectively. We have not
incurred any direct costs relating to environmental regulations or requirements.
 
 **Employees**
 
 Presently
Bovie has a total of approximately 134 employees. These consist of 5 executives,
10 administrative, 6 sales, and 113 technical support and factory employees.
 
 **Significant
Subsidiary - Aaron Medical Industries, Inc.**
 
 Aaron
Medical Industries, Inc., is a Florida Corporation with offices in St.
Petersburg, Florida. It is principally engaged in the business of marketing our
medical products.
 
 **Item
8A. Disclosure Controls And Procedures**
 
 (a)
Evaluation of disclosure controls and procedures
 
 An
evaluation of the effectiveness of the design and operation of Bovie’s
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e) as of December 31, 2004 was carried out under the supervision and
with the participation of Bovie’s management, including the President and Chief
Executive Officer and the Chief Financial Officer (“the Certifying Officers”).
Based on that evaluation, the Certifying Officers concluded that Bovie’s
disclosure controls and procedures are effective.
 
 Disclosure
controls and procedures are designed to ensure that information required to be
disclosed in our reports filed or submitted under the Securities Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in the SEC’s rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed in our reports filed or submitted under the Securities
Exchange Act is accumulated and communicated to management, including our
President and Chief Financial Officer, as appropriate, to allow timely decisions
and timely reporting regarding required disclosure.
 
 (b)
Changes in internal controls
 
 There was
no change to Bovie’s internal control over financial reporting during the
quarter ended December 31, 2004 that materially affected, or is reasonably
likely to materially affect, Bovie’s internal control over financial
reporting.
  -6-
  
 **Item
10.** **Executive
Compensation**
 
 The
following table sets forth the compensation paid to the executive officers of
the registrant for the three years ended December 31, 2004:
 
 Summary
      Compensation TableLong
      Term CompensationAnnual
      Compensation
    Awards
    
    Payouts(a)
    (b)
    I
    (d)
    (e)
    (f)
    (g)
    (h)
    (i)Name
      and Principal Position
    Year
    Salary($)
    Bonus($)
    Other
      Annual Compensation-($)*
    Restricted
      Stock Award(s) ($)
    Securities
      Underlying Options/ SARs(#)
    LTIP
      Payouts ($)
    All
      Other Compensation ($)Andrew
      Makrides
      President,
      CEO,
      Chairman
      of
      the
      Board
    2004
    $167,320
    3,189
    9,921
    --
    25,000
    --
    --2003
    $158,406
    2,967
    9,942
    --
    110,000
    --2002
    $141,835
    2,760
    9,581
    --
    --
    --
    --J.
      Robert Saron
      President
      of Aaron
      Medical
      and
      Director
    2004
    $233,036
    4515
    16,533
    --
    25,000
    --
    --2003
    $219,786
    4,200
    15,568
    --
    110,000
    --
    --2002
    $200,545
    3,907
    15,533
    --
    --
    --
    --Moshe
      Citronowicz
      Executive
      Vice
      President-
      Chief
      Operating
      Officer
    2004
    $170,766
    3,318
    15,848
    --
    25,000
    --
    --2003
    $158,637
    3,086
    14,345
    --
    110,000
    --
    --2002
    $147,370
    2,871
    15,688
    --
    --
    --
    --Charles
    2004
    $81,825
    1,579
    7,893
    --
    25,000
    --
    --Peabody
    2003
    $77,221
    1,532
    6,216
    --
    60,000
    --
    --Chief
    2002
    $76,227
    1,532
    6,051
    -
    --
    --
    --FinancialOfficer
 (*) Other
compensation consists of medical insurance and auto.
 
 No
options were granted or issued to any executive officer or director during
fiscal year ending December 31, 2002. In 2003 and 2004, a total of 585,000 and
225,000 options were granted to executive officers and directors,
respectively.
 
  -7-
  
 Option
Grants Table:
 
 The
following table sets forth, with respect to grants of stock options made during
2004 to each of the Named Executive Officers: (I) the name of the executive
officer (column (a)); (ii) the number of securities underlying options granted
(column (b)); (iii) the percent the grant represents of the total options
granted to all employees during 2004; (iv) the per share exercise price of the
options granted (column (d)); (v) the expiration date of the options (column
(e)); and (vi) the potential realizable value of each grant, assuming the market
price of the Common Stock appreciates in value from the date of grant to the end
of the option term at a rate of (A) 5% per annum (column (f)) and (B) 10% per
annum (column (g)).
 
 Option
Grants in 2004:
 
 Individual
      Grants
    Potential
      Realizable
      Value
      at Assumed Annual Rates of Stock Price Appreciation for Option
      TermName
      (a)
    Number
      of Securities
      Underlying
      Options Granted
      (b)
    %
      of Total Options
      Granted
      to Employees in 2004
      I
    Exercise
      or Base Price per Share
      (d)
    Expiration
      Date
      (e)
    5%($)
      (f)
    10%($)
      (g)Charles
      Peabody(CFO)
    25,000
    6.76%
    2.13
    09/23/14
    $
      33,383
    $
      87,684Moshe
      Citronowicz(COO)
    25,000
    6.76%
    2.13
    09/23/14
    $
      33,383
    $
      87,684J.
      Robert Saron(2)
    25,000
    6.76%
    2.13
    09/23/14
    $
      33,383
    $
      87,684Andrew
      Makrides(CEO)
    25,000
    6.76%
    2.13
    09/23/14
    $
      33,383
    $
      87,684
 
 Total
options granted were 370,000 which represents 100% of the options granted in
2004.
 
 (1)
    Such
      options were granted at 100% of fair market value on the date of grant and
      become immediately exercisable as to the shares covered thereby.
 
 (2)
President of Aaron Medical.
  -8-
  
 Equity
Compensation Plan Information:
 
 Plan
      category
    Number
      of Securities
      to
      be issued upon
      exercise
      of
      outstanding
      options,
    Weighted-average
      exercise
      price of
      outstanding
      options,
      warrants
      and rights
    Number
      of securities
      remaining
      available
      for
      future issuance
      under
      equity
      compensation
      plansEquity
      compensation Plans approved by Security holders3,951,200
    $1.12
    27,700Total
    3,951,200
    1.12
    27,700
 
 The
following table summarizes: 1. The options granted in the last fiscal year 2004
and 2. The aggregated option exercises in the last fiscal year and the fiscal
year-end option values.
 
 Aggregate
Option/SAR Exercises in the Fiscal Year Ended December 31, 2004 and December 31,
2004 Option/SAR Values
 (a)
    (b)
    I
    (d)
    (e)Name
    Shares
      Acquired on Exercise (#)
    Value
      Realized ($)
    Number
      of Securities Underlying Unexercised Options/SARs at December 31, 2004
      (#)
    Value
      of Unexercised In-the Money Options/SARs at December 31,
      2004($)Exercisable
    Unexercisable
    Exercisable
    UnexercisableAndrew
      Makrides
    -
    -
    510,000
    -
    $
      849,150
    -Alfred
      Greco
    -
    -
    360,000
    -
    615,650
    -George
      Kromer
    -
    -
    415,000
    -
    690,475
    -Moshe
      Citronowicz
    -
    -
    465,000
    -
    803,725
    -Rob
      Saron
    -
    -
    530,000
    -
    901,200
    -Brian
      Madden
    -
    -
    50,000
    -
    10,250
    -Michael
      Norman
    -
    -
    25,000
    -
    10,250
    -Charles
      Peabody
    -
    -
    110,000
    -
    119,400
    -Randy
      Rossi
    -
    -
    25,000
    -
    10,250
    -Total
    -
    -
    2,490,000
    -
    $
      4,010,350
    -
 
 
 (1)
Assumes $2.54 per share fair market value on December 31, 2004 which was the
closing price on December 31, 2004, the last day of trading on NASDAQ in 2004.
 
 In 2003,
the Board of Directors adopted and shareholders approved Bovie’s 2003 Executive
and Employee Stock Option Plan covering a total of one million two hundred
thousand (1,200,000) shares of common stock issuable upon exercise of options to
be granted under the Plan. In 2004, the Board of Directors granted 25,000
options to each Executive Officer and Director totaling 225,000 shares.
 
 Outside
Directors are compensated in their capacities as Board members through option
grants. Our Board of Directors presently consists of J. Robert Saron, Andrew
Makrides, Chairman CEO, and President, George W. Kromer, Jr., Alfred Greco and
Brian Madden. For the past years, pursuant to a written agreement, Mr. Kromer
has been retained by Bovie Medical Corporation as a business and public
relations consultant on a month-to-month basis at an average monthly fee of
$1,700. Mr. Greco is the managing director of Alfred V. Greco PLLC, a partner of
Sierchio, Greco and Greco counsel to Bovie, to which Bovie paid legal fees of
$63,650 during 2004.
 
 There
have been no changes in the pricing of any options previously or currently
awarded.
 
 In
January, 2004, we extended employment contracts with certain of our officers for
six years. The employment agreements provide, among other things, that the
Executive may be terminated as follows:
 
 (a)
    Upon
      the death of the Executive and the Executive’s estate shall be paid the
      basic annual compensation due the Employee pro-rated through the date of
      termination.
 
 (b)
    By
      the Resignation of the Executive at any time upon at least thirty (30)
      days prior written notice to Bovie; and Bovie shall be obligated to pay
      the Employee the basic annual compensation due him pro-rated to the
      effective date of termination,
 
 (c)
    By
      Bovie, for cause if during the term of the Employment Agreement the
      Employee violates the provisions of Paragraph 12 hereof, or is found
      guilty in a court of law of any crime of moral
  turpitude.
 
 (d)
    By
      Bovie, without cause, with the majority approval of the Board of
      Directors, at any time upon at least thirty (30) days prior written notice
      to the Executive: and Bovie shall be obligated to pay the Executive
      compensation currently in effect including all bonuses, accrued or
      prorate, and expenses up to the date of termination. Thereafter, for the
      period remaining under the contract, Bovie shall pay the Executive the
      salary then in effect at the time of termination payable weekly. Employee
      shall not have to account for other compensation other sources or
      otherwise mitigate his damages due to such
termination.
 
 (e)
    If
      Bovie terminates the agreement, without cause, or fails to meet its
      obligations to the Executive on a timely basis, or if there is a change in
      the control of Bovie, the Executive may elect to terminate his employment
      agreement. Upon any such termination or breach of any of its obligations
      under the Employment Agreement, Bovie shall pay the Executive a lump sum
      severance equal to three times the annual salary and bonus in effect the
      month preceding such termination or breach as well as any other sums which
      may be due under the terms of the Employment Agreement up to the date of
      termination.
 
 The
following schedule shows all contracts and terms with officers of Bovie.
 
 
 Bovie
      Medical CorporationDecember
      31, 2004Contract
    Expiration
    Current
    AutoDate
    Date(1)
    Base
      Pay
    AllowanceAndrew
      Makrides
    01/01/98
    1/31/2009(1)
    $155,246
    $
      6,067J.
      Robert Saron
    01/01/98
    1/31/2009(1)
    214,638
    6,067Moshe
      Citronowicz
    01/01/98
    1/31/2009(1)
    161,521
    6,067Charles
      Peabody
    08/18/03
    08/18/2004(2)
    77,479
    --
 
  -9-
  
 (1)
    Includes
      total extensions for six years- Salaries increase annually pursuant to a
      contract formula. In the event of a change in control, each officers’
      contract contains an option for each respective officer to resign and
      receive 3 years salary.
 
 (2) If
not cancelled 30 days prior to year-end, the contract automatically renews for
one year periods.
 
 
 **Item
13.  Exhibits List and Reports on Form 8K**
 
 **(a)
Exhibits:**
 
 Exhibit
      3.1
    Articles
      of Incorporation*Exhibit
      3.2
    By-Laws*Exhibit
      4.1
    Copy
      of Stock Certificate *Exhibit
      10.1
    Joint
      Venture Agreement dated February 25, 2000
      Between
      Bovie Medical Corporation and Jump Agentur fur
      Elektrotechnik
      GmBH**Exhibit
      10.2
    Agreement
      between Bovie Medical Corporation and Arthrex Inc. dated
      June
      2002, filed with Form S-3 on November 23, 2004, which is incorporated here
      in by reference. This agreement is the subject of an application for
      confidential treatment.**Exhibit
      10.3
    Distribution
      and Service Center Agreement  between Bovie and
      SymbolMedical
      Limited dated December 31, 2004**Exhibit
      10.4
    Employment
      Agreement- Andrew Makrides**Exhibit
      10.5
    Employment
      Agreement-J. Robert Saron**Exhibit
      10.6
    Employment
      Agreement-Moshe Citronowicz**Exhibit
      10.7
    Employment
      Agreement-Charles Peabody**Exhibit
      10.8
    Amended
      Employment Agreement between Bovie and Andrew Makrides dated as of January
      6, 2004.Exhibit
      10.9
    Amended
      Employment Agreement between Bovie and J. Robert Saron dated as of January
      6, 2004.Exhibit
      10.10
    Amended
      Employment Agreement between Bovie and Moshe Citronowciz dated as of
      January 6, 2004.Exhibit
      10.11
    License
      Agreement between Bovie and Emergency Medicine Innovations, LLC dated
      October 22, 2004.Exhibit
      21.1
    Consent
      of Bloom & Co., LLPExhibit
      31.1
    Certification
      pursuant to Section 302 of Sarbanes-Oxley Act of 2002.Exhibit
      31.2
    Certification
      pursuant to Section 302 of Sarbanes-Oxley Act of 2002.Exhibit
      32.1
    Certification
      pursuant to Section 906 of Sarbanes-Oxley Act of 2002.Exhibit
      32.2
    Certification
      pursuant to Section 906 of Sarbanes-Oxley Act of 2002._____________________*
      Incorporated by reference to Exhibits 3.1,3.2 and 4.1 to Form 10KSB/A for
      December 31, 2003 filedWith
      the SEC on February 16, 2005.
      **
      Previously Filed
 
 
  -10-
  **** **(b)
8K’s Filed in the Fourth Quarter**
 
 **Two
Form 8-K were filed in the fourth quarter of 2004.**
 
 (i)
    Filed
      on October 4, 2004 item 5 - other events reporting appointment of two new
      directors.
 ****
 (ii)
Filed on December 30, 2004 item 1.01 regarding a distribution agreement for the
Far East.
 
 
 -11-
 
 **SIGNATURES**
 
 Pursuant
to the requirements of the Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized, in Melville, New York on August 23,
2005.
 
 Bovie
      Medical CorporationBy:
      /s/ Andrew MakridesAndrew
      MakridesPresidentChairman
      of the Board
 
  -12-
 
 EXHIBIT
INDEX
 
 
 Exhibit
      3.1
    Articles
      of Incorporation*Exhibit
      3.2
    By-Laws*Exhibit
      4.1
    Copy
      of Stock Certificate *Exhibit
      10.1
    Joint
      Venture Agreement dated February 25, 2000
      Between
      Bovie Medical Corporation and Jump Agentur fur
      Elektrotechnik
      GmBH**Exhibit
      10.2
    Agreement
      between Bovie Medical Corporation and Arthrex Inc. dated
      June
      2002, filed with Form S-3 on November 23, 2004, which is incorporated here
      in by reference. This agreement is the subject of an application for
      confidential treatment.**Exhibit
      10.3
    Distribution
      and Service Center Agreement  between Bovie and
      SymbolMedical
      Limited dated December 31, 2004**Exhibit
      10.4
    Employment
      Agreement- Andrew Makrides**Exhibit
      10.5
    Employment
      Agreement-J. Robert Saron**Exhibit
      10.6
    Employment
      Agreement-Moshe Citronowicz**Exhibit
      10.7
    Employment
      Agreement-Charles Peabody**Exhibit 10.8
    Amended Employment Agreement between Bovie and
      Andrew Makrides dated as of January 6, 2004.Exhibit 10.9
    Amended Employment Agreement between Bovie and J.
      Robert Saron dated as of January 6, 2004.Exhibit 10.10
    Amended Employment Agreement between Bovie and
      Moshe Citronowicz dated as of January 6, 2004.Exhibit 10.11
    License Agreement between Bovie and Emergency
      Medicine Innovations, LLC dated October 22, 2004.Exhibit 21.1
    Consent of Bloom & Co., LLPExhibit 31.1
    Certification pursuant to Section 302 of Sarbanes-Oxley
      Act of 2002.Exhibit 31.2
    Certification pursuant to Section 302 of Sarbanes-Oxley
      Act of 2002.Exhibit 32.1
    Certification pursuant to Section 906 of Sarbanes-Oxley
      Act of 2002.Exhibit 32.2
    Certification pursuant to Section 906 of Sarbanes-Oxley
      Act of 2002._____________________*
      Incorporated by reference to Exhibits 3.1,3.2 and 4.1 to Form 10KSB/A for
      December 31, 2003 filedWith
      the SEC on February 16, 2005.
      **
      Previously Filed
 
   -13-