Attached files
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EX-31.1 - SignPath Pharma, Inc. | v166537_ex31-1.htm |
EX-32.1 - SignPath Pharma, Inc. | v166537_ex32-1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-Q
(Mark
One)
x
|
QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
|
For
the quarterly period ended: SEPTEMBER 30,
2009
|
o
|
TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
|
For
the transition period from _________ to
__________
|
Commission
file number: 333-158474
SIGNPATH
PHARMA INC.
(Exact
name of Registrant as specified in its charter)
Delaware
|
20-5079533
|
|
(State
or other jurisdiction of
|
(IRS
Employer
|
|
incorporation
or organization)
|
Identification
No.)
|
1375
California Road
Quakertown,
PA 18951
(Address
of principal executive offices)
(215)
538-9996
(Registrant’s
telephone number, including Area Code)
N/A
(Former
name, former address and former fiscal year, if changed since last
report)
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. x Yes
o No
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Website, 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). x Yes o No The
Registrant has not yet transitioned into this requirement.
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 file” and “smaller reporting company” in Rule 12b-2 of the Exchange
Act.
Large
accelerated filer o
|
Accelerated
filer o
|
Non-accelerated
filer o (Do
not check if a smaller reporting company)
|
Smaller
reporting company x
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
¨ Yes
x No
APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the
registrant has filed all documents and reports required to be filed by Sections
12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court. x Yes ¨ No
APPLICABLE
ONLY TO CORPORATE ISSUERS
As of November 12, 2009, the Company
had authorized 45,000,000 shares, $.001 par value, common stock, of which
11,307,500 shares of common stock were issued and outstanding.
2
SignPath
Pharma Inc.
Quarterly
Report on Form 10-Q
Period
Ended September 30, 2009
Table
of Contents
Page
|
||||
PART
I . FINANCIAL INFORMATION
|
||||
Condensed
Consolidated Balance Sheets as of September 30, 2009 (unaudited) and
December 31, 2008 (restated) (audited)
|
4 | |||
Condensed
Consolidated Statements of Operations for the three and nine months ended
September 30, 2009 and 2008 and for the period from Inception on May 15,
2006 though September 30, 2009 (restated) (unaudited)
|
5 | |||
Condensed
Consolidated Statements of Stockholders’ Equity (Deficit) for the period
from Inception on May 15, 2006 through September 30, 2009 (restated)
(unaudited)
|
6 | |||
Condensed
Consolidated Statements of Cash Flows for the nine months ended September
30, 2009 and 2008 and for the period from Inception on May 15, 2006
through September 30, 2009 (restated)
(unaudited)
|
7 | |||
Notes
to Condensed Consolidated Financial Statements (unaudited)
|
8-13 | |||
Item
2. Management’s Discussion and Analysis of Financial Condition and
Results of Operations
|
14-21 | |||
Item
3. Quantitative and Qualitative Disclosures About Market
Risk
|
21 | |||
Item
4T. Controls and Procedures
|
21 | |||
PART
II . OTHER INFORMATION
|
||||
Item
1. Legal Proceedings
|
21 | |||
Item
1A. Risk Factors — Not
Applicable
|
22 | |||
Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds
|
22 | |||
Item
3. Defaults Upon Senior Securities
|
22 | |||
Item
4. Submission of Matters to a Vote of Security
Holders
|
22 | |||
Item
5. Other Information
|
22 | |||
Item
6. Exhibits
|
22 | |||
SIGNATURES
|
24 | |||
EXHIBIT
INDEX
|
25 |
3
SIGNPATH
PHARMA, INC.
Balance
Sheets
(A
Development Stage Company)
September
30,
|
December
31,
|
|||||||
2009
|
2008
|
|||||||
(Unaudited)
|
(Restated)
|
|||||||
ASSETS
|
||||||||
CURRENT
ASSETS
|
||||||||
Cash
|
$ | 402,983 | $ | 181,128 | ||||
Total
Current Assets
|
402,983 | 181,128 | ||||||
EQUIPMENT,
net
|
2,600 | 3,200 | ||||||
TOTAL
ASSETS
|
$ | 405,583 | $ | 184,328 | ||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
CURRENT
LIABILITIES
|
||||||||
Accounts
Payable
|
$ | 2,535 | $ | - | ||||
Accrued
Expenses
|
85,738 | - | ||||||
Total
Current Liabilities
|
88,273 | - | ||||||
STOCKHOLDERS'
EQUITY
|
||||||||
Preferred
stock; $0.10 par value, 5,000,000 shares authorized 2,312
and 1,502 shares issued
and outstanding, respectively
|
231 | 150 | ||||||
Common
stock; $0.001 par value, 45,000,000 shares authorized;
11,307,500 and 11,307,500 shares issued and outstanding,
respectively
|
11,308 | 11,308 | ||||||
Additional
paid-in capital
|
2,743,569 | 2,099,804 | ||||||
Deficit
accumulated during the development stage
|
(2,437,798 | ) | (1,926,934 | ) | ||||
Total
Stockholders' Equity
|
317,310 | 184,328 | ||||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$ | 405,583 | $ | 184,328 |
The
accompanying consolidated notes are an integral part of these financial
statements.
4
SIGNPATH
PHARMA, INC.
|
Statements
of Operations
|
(A
Development Stage Company)
|
(Unaudited)
|
For
the Three Months Ended
September
30,
|
For
the Nine Months Ended
September
30,
|
From
Inception on
May
15, 2006
Through
September
30,
|
||||||||||||||||||
2009
|
2008
|
2009
|
2008
|
2009
|
||||||||||||||||
(Restated)
|
||||||||||||||||||||
REVENUES
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
OPERATING
EXPENSES
|
||||||||||||||||||||
General
and administrative
|
28,845 | 68,391 | 204,687 | 123,696 | 1,137,858 | |||||||||||||||
Consulting
expense
|
- | 5,000 | - | 79,481 | 79,481 | |||||||||||||||
Financing
expense
|
- | - | - | - | 93,031 | |||||||||||||||
Legal
and professional expenses
|
12,500 | 2,500 | 47,297 | 117,424 | 195,432 | |||||||||||||||
Licensing
expense
|
- | 25,041 | 50,000 | 99,712 | 152,347 | |||||||||||||||
Advertising
expense
|
- | - | - | 49,175 | 49,175 | |||||||||||||||
Research
and development
|
23,623 | 7,083 | 208,880 | 126,720 | 662,012 | |||||||||||||||
Total
Operating Expenses
|
64,968 | 108,015 | 510,864 | 596,208 | 2,369,336 | |||||||||||||||
OPERATING
LOSS
|
(64,968 | ) | (108,015 | ) | (510,864 | ) | (596,208 | ) | (2,369,336 | ) | ||||||||||
OTHER
INCOME (EXPENSE)
|
||||||||||||||||||||
Interest
expense
|
- | - | - | - | (68,462 | ) | ||||||||||||||
Total
Other Income (Expense)
|
- | - | - | - | (68,462 | ) | ||||||||||||||
NET
LOSS BEFORE INCOME TAXES
|
(64,968 | ) | (108,015 | ) | (510,864 | ) | (596,208 | ) | (2,437,798 | ) | ||||||||||
PROVISION
FOR INCOME TAXES
|
- - | - | - | - | - | |||||||||||||||
NET
LOSS
|
$ | (64,968 | ) | $ | (108,015 | ) | $ | (510,864 | ) | $ | (596,208 | ) | $ | (2,437,798 | ) | |||||
BASIC
LOSS PER SHARE
|
$ | (0.01 | ) | $ | (0.01 | ) | $ | (0.05 | ) | $ | (0.06 | ) | ||||||||
WEIGHTED
AVERAGE NUMBER NUMBER OF SHARES OUTSTANDING
|
11,307,500 | 10,257,500 | 11,307,500 | 10,257,500 |
The
accompanying consolidated notes are an integral part of these financial
statements.
5
SIGNPATH
PHARMA, INC.
|
Statements
of Stockholders' Equity (Deficit)
|
(A
Development Stage Company)
|
(Restated)
|
Preferred
Stock
|
Common
Stock
|
Additional
Paid-in
|
Deficit
Accumulated During the Development
|
Total
Stockholders’
|
||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Stage
|
Equity
|
||||||||||||||||||||||
Balance,
December 31, 2005
|
- | $ | - | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||
Common
stock issued to founders for cash at $0.001 per share
|
- | - | 10,000,000 | 10,000 | - | - | 10,000 | |||||||||||||||||||||
Net
loss for the year ended December 31, 2006
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Balance,
December 31, 2006
|
- | - | 10,000,000 | 10,000 | - | - | 10,000 | |||||||||||||||||||||
Common
stock issued for bridge debt at $0.67 per share
|
- | - | 257,500 | 258 | 171,194 | - | 171,452 | |||||||||||||||||||||
Net
loss for the year ended December 31, 2007
|
- | - | - | - | - | (436,065 | ) | (436,065 | ) | |||||||||||||||||||
Balance,
December 31, 2007
|
- | - | 10,257,500 | 10,258 | 171,194 | (436,065 | ) | (254,613 | ) | |||||||||||||||||||
Preferred
stock issued for bridge debt at $1,000 per share
|
890 | 89 | - | - | 580,756 | - | 580,845 | |||||||||||||||||||||
Preferred
stock issued for cash at $1,000 per share
|
612 | 61 | - | - | 399,352 | - | 399,413 | |||||||||||||||||||||
Common
stock issued for bridge debt at $0.67 per share
|
- | - | 1,050,000 | 1,050 | 697,832 | - | 698,882 | |||||||||||||||||||||
Fair
value of warrants attached to preferred stock
|
- | - | - | - | 521,618 | - | 521,618 | |||||||||||||||||||||
Stock
offering costs
|
- | - | - | - | (270,948 | ) | - | (270,948 | ) | |||||||||||||||||||
Net
loss for the year ended December 31, 2008
|
- | - | - | - | - | (1,490,869 | ) | (1,490,869 | ) | |||||||||||||||||||
Balance,
December 31, 2008
|
1,502 | 150 | 11,307,500 | 11,308 | 2,099,804 | (1,926,934 | ) | 184,328 | ||||||||||||||||||||
Preferred
stock issued for cash at $1,000 per share
(unaudited)
|
810 | 81 | - | - | 438,224 | - | 438,305 | |||||||||||||||||||||
Fair
value of warrants attached to preferred
stock (unaudited)
|
- | - | - | - | 371,695 | - | 371,695 | |||||||||||||||||||||
Stock
offering cost (unaudited)
|
- | - | - | - | (166,154 | ) | - | (166,154 | ) | |||||||||||||||||||
Net
loss for the nine months ended September 30,
2009 (unaudited)
|
- | - | - | - | - | (510,864 | ) | (510,864 | ) | |||||||||||||||||||
Balance,
September 30, 2009 (unaudited)
|
$ | 2,312 | $ | 231 | $ | 11,307,500 | $ | 11,308 | $ | 2,743,569 | $ | (2,437,798 | ) | $ | 317,310 |
The
accompanying condensed notes are an integral part of these financial
statements.
6
SIGNPATH
PHARMA, INC.
|
|||||||||||
Statements
of Cash Flows
|
|||||||||||
(A
Development Stage Company)
|
|||||||||||
(Unaudited)
|
For
the Nine Months Ended
September
30,
|
From
Inception
on
May 15, 2006
Through
September
30,
|
|||||||||||
2009
|
2008
|
2009
|
||||||||||
(Restated)
|
||||||||||||
OPERATING
ACTIVITIES
|
||||||||||||
Net
loss
|
$ | (510,864 | ) | $ | (596,208 | ) | $ | (2,437,798 | ) | |||
Adjustments
to reconcile net loss to net cash used by operating
activities:
|
||||||||||||
Common
stock issued for services
|
- | - | 908,858 | |||||||||
Depreciation
expense
|
600 | - | 1,400 | |||||||||
Changes
in operating assets and liabilities
|
||||||||||||
Accounts
payable
|
2,535 | - | 2,535 | |||||||||
Accrued
interest payable
|
- | - | 42,376 | |||||||||
Accrued
expenses
|
85,738 | - | 85,738 | |||||||||
Net
Cash Used in Operating Activities
|
(421,991 | ) | (596,208 | ) | (1,396,891 | ) | ||||||
INVESTING
ACTIVITIES
|
||||||||||||
Purchase
of equipment
|
- | - | (4,000 | ) | ||||||||
Net
Cash Used in Investing Activities
|
- | - | (4,000 | ) | ||||||||
FINANCING
ACTIVITIES
|
||||||||||||
Proceeds
from notes payable
|
- | 590,500 | 847,500 | |||||||||
Stock
offering costs paid
|
(166,154 | ) | - | (475,626 | ) | |||||||
Preferred
stock issued for cash
|
810,000 | 24,500 | 1,422,000 | |||||||||
Common
stock issued for cash
|
- | - | 10,000 | |||||||||
Net
Cash Provided by Financing Activities
|
643,846 | 615,000 | 1,803,874 | |||||||||
NET
INCREASE (DECREASE) IN CASH
|
221,855 | 18,792 | 402,983 | |||||||||
CASH
AT BEGINNING OF PERIOD
|
181,128 | 2,854 | - | |||||||||
CASH
AT END OF PERIOD
|
$ | 402,983 | $ | 21,646 | $ | 402,983 | ||||||
SUPPLEMENTAL
DISCLOSURES OF
|
||||||||||||
CASH
FLOW INFORMATION
|
||||||||||||
CASH
PAID FOR:
|
||||||||||||
Interest
|
$ | - | $ | - | $ | - | ||||||
Income
taxes
|
$ | - | $ | - | $ | - | ||||||
NON
CASH FINANCING ACTIVITIES:
|
||||||||||||
Preferred
stock issued for bridge financing
|
$ | - | $ | - | $ | 889,876 |
The
accompanying condensed notes are an integral part of these financial
statements.
7
SIGNPATH
PHARMA, INC.
Condensed
Notes to the Financial Statements
September
30, 2009 and December 31, 2008
NOTE 1 -
FINANCIAL STATEMENTS
The
accompanying financial statements have been prepared by the Company without
audit. In the opinion of management, all adjustments (which include
only normal recurring adjustments) necessary to present fairly the financial
position, results of operations and cash flows at September 30, 2009 and for all
periods presented have been made.
Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America have been condensed or omitted. It is suggested that
these condensed financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's December 31, 2008 audited
financial statements. The results of operations for the period ended
September 30, 2009 and September 30, 2008 are not necessarily indicative of the
operating results for the full year.
NOTE 2 -
GOING CONCERN
The
Company’s financial statements are prepared using generally accepted accounting
principles applicable to a going concern which contemplates the realization of
assets and liquidation of liabilities in the normal course of
business. The Company has had no revenues and has generated losses
from operations.
In order
to continue as a going concern and achieve a profitable level of operations, the
Company will need, among other things, additional capital resources and to
develop a consistent source of revenues. The continuation of the
Company as a going concern is dependent upon the continued financial support
from its shareholders, the ability to raise equity or debt financing, and the
attainment of profitable operations from the Company's planned
business.
The
ability of the Company to continue as a going concern is dependent upon its
ability to successfully accomplish the plan described in the preceding paragraph
and eventually attain profitable operations. The accompanying
financial statements do not include any adjustments that might be necessary if
the Company is unable to continue as a going concern.
NOTE 3 -
SIGNIFICANT ACCOUNTING POLICIES
Use of
Estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those
estimates.
8
SIGNPATH
PHARMA, INC.
Condensed
Notes to the Financial Statements
September
30, 2009 and December 31, 2008
NOTE 3 -
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Recent Accounting
Pronouncements
In June
2009, the Financial Accounting Standards Board ("FASB") established the FASB
Accounting Standards Codification (the "Codification") as the source of
authoritative accounting principles recognized by the FASB to be applied by
non-governmental entities in the preparation of financial statements in
conformity with GAAP. Rules and interpretive releases of the Securities
and Exchange Commission ("SEC") under authority of federal securities laws are
also sources of authoritative GAAP for SEC registrants. The introduction
of the Codification does not change GAAP and other than the manner in which new
accounting guidance is referenced, the adoption of these changes had no impact
on the our consolidated financial statements.
In May
2009, the Company adopted a new accounting standard issued by the FASB that
establishes standards for accounting for and disclosing subsequent events
(events which occur after the balance sheet date but before financial statements
are issued or are available to be issued). The statement requires and entity to
disclose the date subsequent events were evaluated and whether that evaluation
took place on the date financial statements were issued or were available to be
issued. It is effective for interim and annual periods ending after June 15,
2009. The adoption of this statement did not have a material impact on the
Company’s financial condition or results of operation.
In June
2009, the Company adopted a new accounting standard issued by the FASB that is
intended to improve the relevance, representational faithfulness, and
comparability of the information that a reporting entity provides in its
financial statements about a transfer of financial assets: the effects of a
transfer on its financial position, financial performance , and cash flows: and
a transferor’s continuing involvement, if any, in transferred financial assets.
This statement must be applied as of the beginning of each reporting entity’s
first annual reporting period that begins after November 15, 2009. The Company
does not expect the adoption of this statement to have an impact on the
Company’s results of operations, financial condition or cash flows.
In June
2009, the Company adopted a new accounting standard issued by the FASB that is
intended to (1) address the effects on certain provisions of Consolidation of
Variable Interest Entities, as a result of the elimination of the qualifying
special-purpose entity concept in the statement, and (2) constituent concerns
about the application of certain key provisions including those in which the
accounting and disclosures under the Interpretation do not always provided
timely and useful information about an enterprise’s involvement in a variable
interest entity. This statement must be applied as of the beginning of each
reporting entity’s first annual reporting period that begins after November 15,
2009. The Company does not expect the adoption of this statement to have an
impact on the Company’s results of operations, financial condition or cash
flows.
9
SIGNPATH
PHARMA, INC.
Condensed
Notes to the Financial Statements
September
30, 2009 and December 31, 2008
NOTE 4 – CAPITAL STOCK
During
the nine months ended September 30, 2009, the Company issued 810 shares of its
par value $0.10 convertible preferred stock for $810,000 less offering costs of
$166,154. Net proceeds from the sale of the preferred stock were
$643,846 cash. Each convertible preferred share is convertible into
1,177 common shares (equivalent to $0.85 per share of common stock) following
the effective date of the registration statement. The Preferred Stock
shall be convertible following the Effective Date, at the Company’s option, into
common stock, and the Warrants shall be subject to redemption, upon 30 days’
written notice, if the Company’s common stock trades above 200% of the
Conversion Rate in the case of the Preferred Stock and $1.70 per share in the
case of the Warrants, for 20 consecutive trading days.
Attached
to the 810 units of convertible preferred stock sold was a warrant, giving the
owners rights to purchase up to a total of 953,370 (or 1,177 common share per
warrant) shares of the Company’s common stock at strike price of
$1.27 per share for a five year period.
The
warrants were valued using the Black Scholes model using the following
assumptions: stock price at valuation, $0.67; strike price, $1.27;
risk free rate 3.94%;, 5 year term; and volatility of 100%. The
Company attributed $371,695 of the total $809,919 of Additional Paid-in Capital
associated with the transaction to the warrants based on the relative fair value
of the warrants.
These
units have registration rights that required a registration statement be filed
by February 10, 2010. Failure to do so will result in liquidated
damages equal to 2% per month of the gross proceeds. The Company may
also incur liquidated damages if the SEC does not declare effective the
registration date on or before either the 120th
business day from the date on which the registration statement is
filed.
NOTE 5 –
ACCRUED LIABILITIES
Pursuant
to the applicable Codification literature, the Company has concluded it is
probable that it will pay $85,738 in liquidated damages. Pursuant to
the registration rights clause in certain of the securities outstanding as of
April 7, 2009, the Company was required to file a registration statement by
January 27, 2009. The Company failed to do so until April 7, 2009,
resulting in liquidated damages of 2% per month of the gross proceeds, which
approximated $1.8 million as of that date. Subsequent to September
30, 2009, the company’s registration statement covering the securities was
declared effective by the SEC. Each holder is entitled to $47.32 per
share owned. The Company has resolved to pay the liquidated damages
in shares of Common Stock valued at $1.00 per share, pursuant to the terms and
provisions of the Certificate of Designation, Preferences and Rights of Series A
Convertible Preferred Stock.
10
SIGNPATH
PHARMA, INC.
Condensed
Notes to the Financial Statements
September
30, 2009 and December 31, 2008
NOTE 6 –
WARRANTS
A summary
of the status of the
Company's stock options and warrants as
of September 30, 2009 and changes during the periods
ended December 31, 2008 and September 30, 2009
is presented below:
Date
of Issuance
|
Warrant
Shares
|
Exercise
Price
|
Value
if
Exercised
|
Expiration
Date
|
||||||||||||
11/25/2008
|
1,318,489 |
1.27
|
1,674,482 |
8/10/2014
|
||||||||||||
11/26/2008
|
449,220 |
1.27
|
570,509 |
8/10/2014
|
||||||||||||
12/31/2008
|
1,767,709 | 2,244,991 | ||||||||||||||
3/5/2009
|
29,425 |
1.27
|
37,370 |
8/10/2014
|
||||||||||||
3/5/2009
|
58,850 |
1.27
|
74,740 |
8/10/2014
|
||||||||||||
3/5/2009
|
70,620 |
1.27
|
89,687 |
8/10/2014
|
||||||||||||
3/5/2009
|
88,275 |
1.27
|
112,109 |
8/10/2014
|
||||||||||||
3/5/2009
|
58,850 |
1.27
|
74,740 |
8/10/2014
|
||||||||||||
3/5/2009
|
41,195 |
1.27
|
52,318 |
8/10/2014
|
||||||||||||
4/1/2009
|
17,655 |
1.27
|
22,422 |
8/10/2014
|
||||||||||||
6/17/2009
|
29,425 |
1.27
|
37,370 |
*
|
||||||||||||
6/17/2009
|
29,425 |
1.27
|
37,370 |
*
|
|
|||||||||||
6/17/2009
|
58,850 |
1.27
|
74,740 |
*
|
||||||||||||
6/17/2009
|
117,700 |
1.27
|
|
149,479 |
*
|
|||||||||||
7/23/2009
|
58,850 |
1.27
|
74,740 |
*
|
||||||||||||
8/20/2009
|
58,850 |
1.27
|
74,740 |
*
|
||||||||||||
9/9/2009
|
235,400 |
1.27
|
298,958 |
*
|
||||||||||||
9/30/2009
|
2,721,079 | 3,455,774 |
*
|
Fifth
anniversary date of the next registration statement to be
filed. See Note (4)
above.
|
11
SIGNPATH
PHARMA, INC.
Condensed
Notes to the Financial Statements
September
30, 2009 and December 31, 2008
NOTE 7 –
RESTATED FINANCIAL STATEMENTS
The
Company discovered two errors that were recorded in the Company’s financial
statements for the year ended December 31, 2008, filed in its Registration
Statement on Form S-1/A (No. 333-158474) and final Prospectus under Rule
424(b)3. The Company previously recorded a warrant expense for the
fair value of the warrants issued in conjunction with the sale of its
convertible preferred stock. This resulted in an overstatement of
Additional Paid-in Capital and General
& Administrative Expense of $799,184 (item A). Additionally, the
Company recorded the issuance of 57,500 shares in both the period ended December
31, 2007 and 2008. This resulted in an overstatement of Common Stock
of $58, Additional Paid-in Capital of $38,467 and Stock Offering Costs of
$38,524 (item B). The $38,524 overstatement of stock offering costs offsets the
overstatement of Additional Paid-in Capital thus only the $799,184 change due to
item A is reflected in the net change column below. Below is a
comparison of the financial statements as originally filed and as
restated. Because the expenses being restated were incurred in the
last quarter of 2008, there was no effect to the three or nine month income or
cash flow statements for 2008.
December
31,
|
Net
|
December
31,
|
||||||||||
2008
|
Change
|
2008
|
||||||||||
(Restated)
|
(Original)
|
|||||||||||
ASSETS
|
||||||||||||
CURRENT
ASSETS
|
||||||||||||
Cash
|
$ | 181,128 | - | $ | 181,128 | |||||||
Total
Current Assets
|
181,128 | - | 181,128 | |||||||||
EQUIPMENT,
net
|
3,200 | - | 3,200 | |||||||||
TOTAL
ASSETS
|
$ | 184,328 | - | $ | 184,328 | |||||||
LIABILITIES
AND STOCKHOLDERS' EQUITY (DEFICIT)
|
||||||||||||
CURRENT
LIABILITIES
|
||||||||||||
Accounts
Payable
|
$ | - | - | $ | - | |||||||
Accrued
Liabilities
|
- | - | - | |||||||||
Total
Current Liabilities
|
- | - | - | |||||||||
STOCKHOLDERS'
EQUITY (DEFICIT)
|
||||||||||||
Convertible
Preferred stock; $0.10 par value, 5,000,000 shares authorized
1,502 shares issued and outstanding
|
150 | - | 150 | |||||||||
Common
stock; $0.001 par value, 45,000,000 shares authorized;
11,307,500 shares issued and outstanding
|
11,308 | 58 | (B) | 11,365 | ||||||||
Additional
paid-in capital
|
2,099,804 | 799,126 | (B) | 2,898,931 | ||||||||
Deficit
accumulated during the development stage
|
(1,926,934 | ) | (799,184 | )(A) | (2,726,118 | ) | ||||||
Total
Stockholders' Equity (Deficit)
|
184,328 | - | 184,328 | |||||||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
$ | 184,328 | - | $ | 184,328 |
12
SIGNPATH
PHARMA, INC.
Condensed
Notes to the Financial Statements
September
30, 2009 and December 31, 2008
NOTE 8 –
SUBSEQUENT EVENT
In
accordance with the Codification literature, the Company has evaluated its
activities for any material subsequent events to disclose. As of
November 12, 2009, the Company has no material subsequent events to
report.
13
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations.
Forward-Looking
Statements
Statements
contained in this Item 2. “Management’s Discussion and Analysis of Financial
Conditions and Results of Operations” and elsewhere in this report that are not
historical or current facts may constitute “forward-looking statements” within
the meaning of such term in Section 27A of the Securities Act of 1933, as
amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of
1934, as amended (the “Exchange Act”). These statements relate to
future events or future predictions, including events or predictions relating to
our future financial performance, and are generally identifiable by use of the
words "may," "will," "should," "expect," "plan," "anticipate," "believe,"
"feel," "confident," "estimate," "intend," "predict," "potential" or "continue"
or the negative of such terms or other variations on these words or comparable
terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors that may cause the Company's
or its industry's actual results, levels of activity, performance or
achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by such
forward-looking statements. Important factors to consider and
evaluate that could cause actual results to differ materially from those
predicted in any such forward-looking statements include: (i) the general
economic recession and changes in the external competitive market factors which
might impact the Company's results of operations; (ii) unanticipated working
capital or other cash requirements including those created by the failure of the
Company to adequately anticipate the costs associated with clinical trials,
manufacturing and other critical activities; (iii) changes in the Company's
business strategy or an inability to execute its strategy due to unanticipated
changes in the therapeutic drug industry; (iv) the inability or failure of the
Company's management to devote sufficient time and energy to the Company's
business; and (v) the failure of the Company to complete any or all of the
transactions described herein on the terms currently contemplated. In
light of these risks and uncertainties, many of which are described in greater
detail in the Risk Factors discussion contained in our registration statement
filed with the Securities and Exchange Commission (“SEC”), there can be no
assurance that the forward-looking statements contained in this prospectus will
in fact transpire.
Although
the Company believes that the expectations reflected in the forward-looking
statements are reasonable, the Company cannot guarantee future results, levels
of activity, performance or achievements. Moreover, neither the
Company nor any other person assumes responsibility for the accuracy and
completeness of such statements. We do not undertake any duty to
update any of the forward-looking statements after the date of this report to
conform such statements to actual results or changes in our
expectations.
General
The
following discussion should be read in conjunction with the financial statements
and notes thereto included in this report. Except for the historical information
contained herein, the discussion in this report contains certain forward-looking
statements that involve risk and uncertainties, such as statements of the
Company’s plans, objectives, expectations and intentions as of the date of this
filing. The cautionary statements made above should be read as being applicable
to all related forward-looking statements wherever they appear in this
document.
14
Material
Changes in Financial Condition
September
30, 2009 as Compared With December 31, 2008
As of
September 30, 2009 and December 31, 2008, the Company had $402,983 and $181,128,
respectively, of cash on hand. The Company’s working capital
increased from December 31, 2008, to September 30, 2009, as a result of the sale
of $810,000 securities to 13 different accredited investors. The
Company is a development stage company with a limited operating
history. SignPath had a deficit accumulated during the development
stage of $2,437,798, as of September 30, 2009.
Between
August 2007 and April 2008, Sign Path completed a Bridge Financing with 15
accredited investors pursuant to which it received gross proceeds of $847,500
from the sale of 10% promissory notes together with an aggregate of 1,307,500
shares of Common Stock (the “Bridge Shares”).
As of
November 28, 2008, SignPath sold 1501.88 units (“Units”) of its securities at a
price of $1,000 per Unit (“2008 Private Placement”). Each Unit
consists of (i) one share of 6.5% Series A Convertible Preferred Stock
convertible into 1,177 shares of common stock (equivalent to $.85 per share of
common stock) following the August 10, 2009 effective date of its Registration
Statement (the “Effective Date”) subject to adjustment, and (ii) one Warrant to
purchase 1,177 shares of common stock at $1.27 per share for a five-year period
following the Effective Date. The Company received gross proceeds of
$1,502,000 in the 2008 Private Placement and incurred stock offering costs of
$270,948 related to the offering. As part of that offering, the
Company attributed $521,618 of the total $1,501,726 of additional paid-in
capital associated with the transaction to the warrants based on the relative
fair value of the warrants. Between January 1, 2009 and September 9, 2009,
SignPath sold 810 Units (the “2009 Private Placement”) consisting of the same
securities sold in the 2008 Private Placement. The Company received
gross proceeds of $810,000 and incurred stock offering costs of $166,154 related
to this offering. The Company attributed $371,695 of the total
$809,919 of Additional Paid-in Capital associated with the transaction to the
warrants based on the relative fair value of the warrants.
The
Company has no agreements, arrangements or understandings with any officer,
director or shareholder as to any future financing, either equity or
debt. The Company expects to continue to incur losses for the
foreseeable future and it is possible the Company may never reach
profitability. Therefore, the Company will require additional capital
resources and financing to implement its business plan and continue its
operations. The Company’s current burn rate for salaries, research
programs and professional fees averages about $15,000 per
month. Thus, it is expected that the Company currently has sufficient
cash on hand to operate for at least one year from the August 10, 2009 Effective
Date of its registration statement. Management believes it has enough
funds to complete its pre-clinical trials. If the Company receives
favorable results, Management believes it will have the ability to raise
additional funds to complete INDs. In view of general economic
conditions, there can be no assurance that any additional financing will be
available to us, that any affiliate will provide additional investments in the
Company or that adequate funds for our operations will otherwise be available
when needed or on terms acceptable to us.
15
The
financial statements included in this prospectus have been prepared in
conformity with generally accepted accounting principles that contemplate our
continuance as a going concern. The Company has had no revenues and
has generated losses from operation. As set forth in Note 1 to the
audited Financial Statements, the continuation of the Company as a going concern
is dependant upon the continued financial support from its shareholders, the
ability to raise equity or debt financing, and the attainment of profitable
operations for the Company’s planned business. The financial
statements do not include any adjustments to the recoverability and
classification of recorded asset amounts and classification of liabilities that
might be necessary should the Company be unable to continue as a going
concern.
Material
Changes in Results of Operations
Three Months Ended September 30, 2009, as Compared with the Three
Months Ended September 30, 2008.
The
Company does not expect to receive any revenues prior to 2012. Total
operating expenses during the three months ended September 30, 2009 (the “2009
Period”) decreased to $64,968 as compared with $108,015 during the three months
ended September 30, 2008 (the “2008 Period”). General and administrative
expenses decreased from $68,391 in the 2008 Period to $28,845 in the 2009 Period
primarily as a result of a reduction in payroll expenses.
Legal and
professional expenses increased from $2,500 in the 2008 Period to $12,500 in the
2009 Period as a result of the completion of the Company’s business plan during
the 2008 Period. Legal and professional expense in 2009 related to
the Company’s Registration Statement being declared effective by the
SEC.
The
Company paid zero licensing fees in the 2009 Period as compared with a $25,041
of license fees in the 2008 Period.
The
Company paid an aggregate of $23,623 in research and development fees in the
2009 Period as compared to $7,083 in the 2008 Period an increase of
16,540. This included $6,948 to University of Texas, MD Anderson
Cancer Center (“UTMDACC”) for non-clinical and mouse pre-clinical non-GLP
studies of lipsomal curcumin. Payments in the 2009 Period included
$175 paid to Surmodics Pharmaceuticals, Inc. (f/n/a Brookwood Pharmaceuticals,
Inc.) (“Surmodics”) for polymer for the production of nanocurcumin under the
Johns Hopkins University Agreement (the “JHU Agreement”) and for the production
of clinical GMP grade curcumin under the UTMDACC agreement.
The
Company also paid Topaz Technology, Inc. (“Topaz”) an aggregate of $16,500
during the 2009 Period to provide FDA/EMEA Compliance and validation audits
relating to the synthetic curcumin manufacturing facility in India.
The
amount paid for research and development in the 2008 Period consisted of
payments for overhead and patent fees for non-clinical studies and
pre-clinical studies of the nanocurcumin compound and to produce polymer under
the JHU Agreement for animal studies of nanocurcumin. During the 2008
Period, the Company paid UTMDACC for non-clinical and mouse pre-clinical non-GLP
studies of lipsomal curcumin. It also includes expenses relating to
development of depotcurcumin, a slow release
formulation. Depotcurcumin was originally made at UNT under non-GLP
conditions from circumin extract (and PLGA, a chemical surrounding the curcumin)
originally purchased from a U.S. chemical supplier, Sigma Aldrich
Fine Chemicals (“SAFC”).
16
As a
result of the foregoing, the Company had a net loss of $64,968 in the 2009
Period as compared with a net loss of $108,015 in the 2008
Period. This translates to a loss per share of $(0.01) in 2009
compared to $(0.01) in 2008.
Nine
Months Ended September 30, 2009, as Compared with the Nine Months Ended
September 30, 2008.
The
Company does not expect to receive any revenues prior to 2012. Total
operating expenses during the nine months ended September 30, 2009 (the “2009
Period”) decreased to $510,864 as compared with $596,208 during the nine months
ended September 30, 2008 (the “2008 Period”). General and administrative
expenses increased from $123,696 in the 2008 Period to $204,687 in the 2009
Period primarily as a result of increased activity in the Company in pursuing
its manufacture and preclinical development of its lead curcumin
formulations.
Legal and
professional expenses decreased from $117,424 in the 2008 Period to $47,297 in
the 2009 Period, as a result of the completion of the Company’s business plan
during the 2008 Period, offset by expenses related to the Company’s Registration
Statement being declared effective in the 2009 Period.
There
were no consulting fees, nor advertising expenses, paid in the 2009 Period, as
compared with $79,481 of consulting fees paid in the 2008 Period to our
financial advisers and $49,175 of advertising expenses paid in the 2008 period
to create public awareness of the Company.
The
Company paid $99,712 in licensing fees in the 2008 Period as compared with
$50,000 of license fees in the 2009 Period. Fees in the 2008 Period
included payments of $99,412 to the Anderson Cancer Center while licensing fees
of $20,000 in the 2009 Period related to payments to the Anderson
Cancer center and the remaining $30,000 were payments made to the University of
Texas Health Science.
The
Company paid an aggregate of $208,880 in research and development fees in the
2009 Period as compared to $126,720 in the 2008 Period an increase of
65%. This included an annual fee of $10,000 paid to UTMDACC for
non-clinical and mouse pre-clinical non-GLP studies of lipsomal
curcumin. Payments in the 2009 Period included a $10,000 annual
license fee paid to JHU under the JHU Agreement, as well as payment of
approximately $66,000 paid to Surmodics for polymer for the production of
nanocurcumin under the JHU Agreement and $697 for the production of clinical GMP
grade curcumin under the UTMDACC agreement. During the 2009 Period,
the Company paid approximately $33,000 to Dr. Maitra under the Company’s
sponsored research agreement to fund the costs of non-clinical and pre-clinical
studies of nanocurcumin at JHU; approximately $21,000 paid for overhead under
the JHU Agreement and a $1,100 patent fee paid under the JHU Agreement; and a
$30,000 payment to University of North Texas (“UNT”) Health Science Center under
an agreement entered into on August 18, 2008 for sponsored
research. During the 2009 Period, the Company paid UTMDACC
approximately $32,000 for non-clinical and mouse pre-clinical non-GLP Studies of
lipsomal curcumin as well as payments to Polymun Scientific
Immunbiologische Fonschung GmbH under the UTMDACC agreement.
17
The
amount paid for research and development in the 2008 Period consisted of
payments for overhead and patent fees for non-clinical studies and
pre-clinical studies of the nanocurcumin compound and to produce polymer under
the JHU Agreement for animal studies of nanocurcumin. During the 2008
Period, the Company paid UTMDACC for non-clinical and mouse pre-clinical non-GLP
studies of lipsomal curcumin and a $10,000 annual fee. It also
includes expenses relating to development of depotcurcumin, a slow release
formulation. Depotcurcumin was originally made at UNT under non-GLP
conditions from circumin extract (and PLGA, a chemical surrounding the curcumin)
originally purchased from SAFC.
As a
result of the foregoing, the Company had a net loss of $510,864 in the 2009
Period as compared with a net loss of $596,208 in the 2008
Period. This translates to a loss per share of $(0.05) in 2009
compared to $(0.06) in 2008.
We have
identified the policies outlined below as critical to our business operations
and an understanding of our results of operations. The list is not intended to
be a comprehensive list of all of our accounting policies. In many cases, the
accounting treatment of a particular transaction is specifically dictated by
accounting principles generally accepted in the United States, with no need for
management’s judgment in their application. The impact and any associated risks
related to these policies on our business operations is discussed throughout
Management’s Discussion and Analysis of Financial Condition and Results of
Operations where such policies affect our reported and expected financial
results. Note that our preparation of the financial statements requires us to
make estimates and assumptions that affect the reported amount of assets and
liabilities, disclosure of contingent assets and liabilities at the date of our
financial statements, and the reported amounts of revenue and expenses during
the reporting period. There can be no assurance that actual results will not
differ from those estimates.
Basis
of Presentation
These
consolidated financial statements and related notes are presented in accordance
with accounting principles generally accepted in the United States, and are
expressed in U.S. dollars. The Company’s fiscal year-end is December
31.
Use
of Estimates
The
preparation of these consolidated financial statements in conformity with
generally accepted accounting principles in the United States requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the consolidated financial statements and the reported amounts of
revenues and expenses during the reporting period. The Company regularly
evaluates estimates and assumptions related to valuation and amortization
policies on property and equipment and valuation allowances on deferred income
tax losses. The Company bases its estimates and assumptions on current facts,
historical experience and various other factors that it believes to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities and the
accrual of costs and expenses that are not readily apparent from other sources.
The actual results experienced by the Company may differ materially and
adversely from the Company’s estimates. To the extent there are material
differences between the estimates and the actual results, future results of
operations will be affected.
18
Revenue
Recognition
As of the
date of this disclosure, the Company has yet to recognize
revenues. As the Company continues to develop and implement its
business plan, revenue from the performance of services or sale of products will
be recognized in accordance with FASB codification standards. Revenue
will be recognized only when the price is fixed or determinable, persuasive
evidence of an arrangement exists, the service is provided, and collectability
is assured.
Basic
and Diluted Net Income (Loss) Per Share
The
Company computes net income (loss) per share in accordance with the FASB
codification standards. The standard requires presentation
of both basic and diluted earnings per share (EPS) on the face of the income
statement. Basic EPS is computed by dividing net income (loss) available to
common shareholders (numerator) by the weighted average number of shares
outstanding (denominator) during the period. Diluted EPS gives effect to all
dilutive potential common shares outstanding during the period using the
treasury stock method and convertible preferred stock using the if-converted
method. In computing Diluted EPS, the average stock price for the period is used
in determining the number of shares assumed to be purchased from the exercise of
stock options or warrants. Diluted EPS excludes all dilutive potential shares if
their effect is anti-dilutive.
Income
Taxes
Potential
benefits of income tax losses are not recognized in the accounts until
realization is more likely than not. The Company has adopted the FASB
codification regarding the required tax asset benefit computations for net
operating losses carried forward. The potential benefits of net operating losses
have not been recognized in these consolidated financial statements because the
Company cannot be assured it is more likely than not it will utilize the net
operating losses carried forward in future years.
Stock-Based
Compensation
The
Company records stock-based compensation in accordance with FASB codification
standards, using the fair value method. All transactions in which goods or
services are the consideration received for the issuance of equity instruments
are accounted for based on the fair value of the consideration received or the
fair value of the equity instrument issued, whichever is more reliably
measurable. Equity instruments issued to employees and the cost of the services
received as consideration are measured and recognized based on the fair value of
the equity instruments issued.”
19
Plan
of Operations
The
Company’s current focus is on the manufacture and preclinical development of its
lead curcumin formulations (intravenous liposomal curcumin, oral and intravenous
nanocurcumin) with a view toward filing two IND applications with the
FDA. The Company’s product candidates are still in the pre-clinical
development phase.
The
Company believes that a novel pharmaceutical preparation with enhanced
absorption of the active compound with resistance to hepatic inactivation could
potentially have greater clinical efficacy than the oral
versions. The laboratory and oral administration studies by other
researchers to date suggest that curcumin has high potency. The
Company believes that an alternate route for administering this compound, such
as the Company’s parenteral (taken into the body other than through the
digestive canal) formulation, could be more effective at lower
dosages. SignPath intends to develop a parenteral liposomal
formulation, and a nanoparticle formulation, nanocurcumin, to overcome the
limitations of the oral form.
SignPath
believes that the dual development and comparison of liposomal curcumin and
nanocurcumin could expose potential differences in biological effects and
distribution to different tissues. The Company intends to manufactures good
manufacturing practice (GMP) grade of liposomal curcumin and
nanocurcumin. Both formulations will require outsourcing production
to one or more commercial facilities. Our initial goals are to obtain
sufficient material for in vitro and animal analysis and to develop these
formulations in order to submit INDs to the FDA. Determination of safety,
dosage, and efficacy of these formulations in a quantifiable manner will permit
us to pursue clinical registration trials for a variety of malignant diseases.
Following submission of the INDs, the Company plans to initially run Phase I
studies with both of the parenteral formulations in patients with treatment
refractory malignant disease. Subsequently, if the Phase I trials are
successful, the Company plans to seek FDA authorization to run Phase II trials
in selected malignancies.
Liposomal
Curcumin: The Company has agreements with contract
manufacturers for the manufacture, chemistry, and controls for supplies of the
drugs to be tested. Liposomal curcumin is manufactured by our
contract manufacturer, Polymun, Inc. Initial quantities of GMP grade
liposomal curcumin to conduct preclinical studies to corroborate previously
published data from other researchers were obtained from Sigma Aldrich Fine
Chemicals (“SAFC”) or from Sabinsa. Additional studies will include
tumor xenograft assays, acute and chronic rat and dog toxicities as preparation
for an IND submission. Following the determination of safety and the
optimum dosage and schedule in the most sensitive of the three species, we will
be able to estimate starting dosages for Phase I trials in humans. We
plan to outsource corroborative studies of liposomal absorption, distribution,
metabolism, and excretion (ADME), and pharmacokinetics in rats with the aim of
estimating optimum dosage schedules, as well as dosage and safety in mice, rats
and dogs to satisfy IND regulations to GLP laboratories in M.D. Anderson Cancer
Center in Houston, Texas.
20
Nanocurcumin: The
Company intends to obtain commercial volumes of purified curcumin from third
party manufacturers, SAFC and/or Sabinsa, in quantities suitable to satisfy
preclinical and clinical demands. The Company believes that the
manufacture of liposomal curcumin and nanocurcumin can also be scaled up as
necessary since these additional substances are readily available from
commercial sources utilizing established production technologies. We plan to
outsource nanocurcumin pre-clinical development to M.D. Anderson. The
nanocurcumin program will be managed in its entirety by M.D. Anderson through
the filing of the Company’s IND. Contracts with these institutions
will be initiated upon receipt of manufactured nanocurcumin.
Item
3. Quantitative and Qualitative Disclosures About Market Risk.
In
accordance with the provision of Item 305 of Regulation S-K, the Company, as a
smaller reporting company, is not required to make disclosure under this
item.
Item
4T. Controls and Procedures.
EVALUATION
OF DISCLOSURE CONTROLS AND PROCEDURES
Under the
supervision and with the participation of our management, including our
principal executive officer and principal financial officer, our management has
validated the effectiveness of our disclosure controls and procedures, as such
term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the
Exchange Act, as of September 30, 2009. Based on this evaluation, our
principal executive officer and principal financial officer have concluded that,
as of the end of such period, our disclosure controls and procedures were
ineffective to ensure that (i) information required to be disclosed by us in the
reports we file or submit under the Exchange Act is recorded, processed,
summarized, and reported within the time periods specified in the SEC’s rules
and forms and (ii) our disclosure and controls are designed to ensure that
information required to be disclosed by us in the reports that we file or submit
under the Exchange Act is accumulated and communicated to our management,
including our principal executive officer and principal financial officer, or
persons performing similar functions, as appropriate to allow timely decisions
regarding required disclosure. This conclusion is based on the fact
that material adjustments were required during the audit and the 2008 financial
statements have been restated.
CHANGES
IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There
were no changes (including corrective actions with regard to significant
deficiencies or material weaknesses) in our internal controls over financial
reporting that occurred during the period ended September 30, 2009, that has
materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting.
PART
I. OTHER
INFORMATION
Item
1. Legal
Proceedings.
As of the
date of this Quarterly Report on Form 10-Q, we are not a party to any legal
proceedings.
21
Item
1A. Risk Factors
In
accordance with the requirements of Form 10-Q, the Company, as a
smaller reporting company, is not required to make disclosure under this
item.
Item
2. Unregistered
Sales of Equity Securities and Use of Proceeds.
During
the nine-month period between January 1, 2009 and September 30, 2009, Registrant
sold 810 units (the “Units”), of its securities at a price of $1,000 per
Unit. Each Unit consists of (i) one share of 6.5% Series A
Convertible Preferred Stock convertible into 1,177 shares of common stock
(equivalent to $.85 per share of common stock) following the August 10, 2009
effective date of its Registration Statement (the “Effective Date”) subject to
adjustment, and (ii) one Warrant to purchase 1,177 shares of common stock at
$1.27 per share for a five-year period following the Effective
Date. The Company received gross proceeds of $810,000 and paid 10%
sales commissions of $81,000 in the aggregate, to Meyers Associates, L.P. the
Company’s placement agent.
The Units
were sold to 13 accredited investors who were customers of the placement
agent. The Company claimed an exemption from registration pursuant to
Section 4(2) of the Securities Act and Rule 506 of Regulation D promulgated
thereunder, based upon subscription agreements executed by each
investor.
The net
proceeds of the offering are being used for working capital and research and
development towards filing an investigational new drug application to commence
clinical trials.
As
required by Rule 463 under the Securities Act, the Company has not received any
proceeds under its initial registration statement (No. 333-158474) declared
effective by the SEC on August 10, 2009.
Item
3. Defaults
Upon Senior Securities.
None.
Item
4. Submission
of Matters to a Vote of Security Holders.
None.
Item
5. Other
Information.
None.
Item
6. Exhibits.
Exhibits.
22
Set forth
below is a list of the exhibits to this quarterly report on Form
10-Q.
Exhibit
Number
|
Description
|
|
3.1
|
Certificate
of Incorporation of the registrant (1)
|
|
3.2
|
Certificate
of Designation, Preferences and Rights of Series A Convertible Preferred
Stock (1)
|
|
3.3
|
By-Laws
of the registrant (1)
|
|
3.4
|
Amended
and Restated Certificate of Incorporation of the registrant dated August
2, 2006 (1)
|
|
3.5
|
Certificate
of Amendment of the registrant dated May 27, 2008 (1)
|
|
4.1
|
Form
of Common Stock Certificate (1)
|
|
4.2
|
Form
of Common Stock Purchase Warrant (1)
|
|
4.3
|
Form
of Bridge Note (1)
|
|
4.4
|
Form
of Registration Rights Agreement (1)
|
|
4.5
|
Form
of Subscription Agreement (1)
|
|
31.1
|
Certification
of the Chief Executive Officer and Chief Financial Officer pursuant to
Rule 13a-14(a) or Rule 15d-14(a), as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
|
|
32.1
|
Certification
of the Chief Executive Officer and Chief Financial Officer pursuant to 18
U.S.C. 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
|
(1) Incorporated
by reference to the Company’s Registration Statement on Form S-1 (Registration
No. 333-158474, declared effective on August 10, 2009.
23
SIGNATURES
In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
SIGNPATH
PHARMA INC.
|
|||
Dated: November
16, 2009
|
By:
|
/s/ Dr. Lawrence
Helson
|
|
Dr.
Lawrence Helson, Chief Executive
Officer
and Chief Financial Officer
(Principal
Executive Officer and Principal
Financial
Officer)
|
24
SignPath
Pharma Inc.
Quarterly
Report on Form 10-Q
Quarter
Ended September 30, 2009
EXHIBITS
Exhibit
Number
|
Description
|
|
31.1
|
Certification
of the Chief Executive Officer and Chief Financial Officer pursuant to
Rule 13a-14(a) or Rule 15d-14(a), as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
|
|
32.1
|
Certification
of the Chief Executive Officer and Chief Financial Officer pursuant to 18
U.S.C. 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
|
25