Attached files
file | filename |
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EX-9.1 - Adynxx, Inc. | e606965_ex9-1.htm |
EX-4.2 - Adynxx, Inc. | e606965_ex4-2.htm |
EX-4.1 - Adynxx, Inc. | e606965_ex4-1.htm |
EX-2.2 - Adynxx, Inc. | e606965_ex2-2.htm |
EX-2.1 - Adynxx, Inc. | e606965_ex2-1.htm |
EX-16.1 - Adynxx, Inc. | e606965_ex16-1.htm |
EX-10.3 - Adynxx, Inc. | e606965_ex10-3.htm |
EX-10.2 - Adynxx, Inc. | e606965_ex10-2.htm |
EX-99.1 - Adynxx, Inc. | e606965_ex99-1.htm |
EX-10.1 - Adynxx, Inc. | e606965_ex10-1.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
________________________
FORM 8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date of
Report (Date of earliest event reported): May 11, 2010
HEPALIFE TECHNOLOGIES, INC.
(Exact
name of registrant as specified in its charter)
Florida
|
000-29819
|
58-2349413
|
(State
or other jurisdiction of
incorporation)
|
(Commission
File Number)
|
(IRS
Employer Identification No.)
|
850
Third Avenue
Suite
1801
New
York, New York
|
10022
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Registrant’s
telephone number, including area code: (646) 218-1400
60
State Street, Suite 700, Boston, MA 02109
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
2.01. Completion of Acquisition or Disposition of
Assets.
On May
11, 2010, HepaLife Technologies, Inc., a Florida corporation (“HepaLife”),
entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and
among HepaLife, HT Acquisition Corp., a newly formed, wholly-owned Delaware
subsidiary of HepaLife (“Merger Sub”), and AquaMed Technologies, Inc., a
privately held Delaware corporation (“AquaMed”). The merger transaction
contemplated under the Merger Agreement (the “Merger”) was consummated on May
11, 2010, at which time Merger Sub merged with and into AquaMed, with AquaMed
continuing as the surviving corporation and becoming a wholly-owned subsidiary
of HepaLife. The filing and acceptance of the Certificate of Merger with the
Secretary of State of the State of Delaware is referred to herein as the
“Effective Time” of the Merger.
Pursuant
to the terms and conditions of the Merger Agreement:
|
·
|
At
the Effective Time, each issued and outstanding share of AquaMed common
stock, par value $0.001 per share (the “AquaMed Common Stock”), was
cancelled and converted into the right to receive 25 shares of common
stock, par value $0.001 per share (the “HepaLife Common Stock”), of
HepaLife (the “Common Merger Consideration”); each issued and outstanding
share of AquaMed Series A Preferred Stock, par value $0.001 per share (the
“AquaMed Series A Preferred Stock”), was cancelled and converted into the
right to receive 100 shares of HepaLife Common Stock (the “Series A Merger
Consideration”); and each issued and outstanding share of AquaMed Series B
Preferred Stock, par value $0.001 per share (the “AquaMed Series B
Preferred Stock”), was cancelled and converted into the right to receive
399.99994 shares of HepaLife Common Stock (the “Series B Merger
Consideration,” and together with the Common Merger Consideration and the
Series A Merger Consideration, the “Merger Consideration”). In the
aggregate, the Merger Consideration consisted of 84,800,000 shares of
HepaLife Common Stock.
|
|
·
|
AquaMed
stockholders may not resell the Merger Consideration until the first
anniversary of the Effective Time, except for 11,191,115 shares of Series
A Merger Consideration that may be transferred by GRQ Consultants, Inc.
401K following the Effective Time subject only to federal and state
securities laws, and not without registration under the Securities Act of
1933, as amended (the “Securities Act”), or pursuant to an exemption from
the registration requirements of the Securities
Act.
|
|
·
|
Each
of HepaLife, AquaMed and Merger Sub made customary representations,
warranties, covenants and indemnities in the Merger
Agreement.
|
The foregoing description of the Merger
Agreement does not purport to be complete and is qualified in its entirety by
reference to the complete text of the Merger Agreement, which is filed as
Exhibit 2.1 hereto and incorporated herein by reference.
Private
Placements
On May 11, 2010, simultaneously with
the closing of the Merger, HepaLife sold 9,400,000 units of its securities (the
“Units”) in a private placement in exchange for aggregate gross proceeds of
$1,175,000 (the “May 11 Private Placement”). Each Unit consisted of (i) one (1)
share of HepaLife Common Stock, (ii) one half of one five year Series E Stock
Purchase Warrant (the “Series E Warrants”) with an exercise price of $0.16 per
share, and (iii) one half of one five year Series F Stock Purchase Warrant (the
“Series F Warrants”) with an exercise price of $0.20 per share, and was sold to
investors at a price per Unit of $0.125.
2
On May
17, 2010, HepaLife sold an additional 2,000,000 Units in a private placement and
received aggregate gross proceeds of $250,000 (the “May 17 Private Placement”,
and together with the May 11 Private Placements, the “Private
Placements”).
The
Private Placements were made solely to “accredited investors,” as that term is
defined in Regulation D under the Securities Act. The securities sold in the
Private Placements were not registered under the Securities Act, or the
securities laws of any state, and were offered and sold in reliance on the
exemption from registration afforded by Section 4(2) and Regulation D (Rule 506)
under the Securities Act and corresponding provisions of state securities laws,
which exempt transactions by an issuer not involving any public offering.
Pursuant
to a Placement Agent Agreement (the “Placement Agreement”), dated May 6, 2010,
between HepaLife and Palladium Capital Advisors, LLC, a Delaware limited
liability company (the “Palladium”), Palladium served as HepaLife’s placement
agent in the Private Placements and received an aggregate cash fee of
$114,000.00, which equaled 8% of the aggregate cash consideration received by
HepaLife in the Private Placements from investors introduced to HepaLife by
Palladium. In addition, in connection with the Private Placements, Palladium was
issued (i) Series E Warrants to purchase 456,000 shares of HepaLife Common Stock
and (ii) Series F Warrants to purchase 456,000 shares of HepaLife Common Stock,
which together equaled 8% of the aggregate number of shares of HepaLife Common
Stock issued to investors introduced to HepaLife by the Placement Agent, as part
of Units, in the Private Placements). The Placement Agent also received
2,000,000 shares of HepaLife Common Stock.
Palladium
is an “accredited investor,” as that term is defined in Regulation D under the
Securities Act. The securities issued to Palladium under the Placement Agreement
were not registered under the Securities Act, or the securities laws of any
state, and were issued in reliance on the exemption from registration afforded
by Section 4(2) and Regulation D (Rule 506) under the Securities Act and
corresponding provisions of state securities laws, which exempt transactions by
an issuer not involving any public offering.
Net
proceeds received from the Private Placements are expected to be used for
working capital, investor relations and other general corporate
purposes.
Voting
Agreement
At the Effective Time, the size of the
board of directors of HepaLife was set at three directors. On May 7,
2010, holders of a majority of the voting shares of HepaLife acted by written
consent in lieu of a special meeting of stockholders to adopt an amendment
to HepaLife’s Articles of Incorporation (the “Amended Articles of
Incorporation”), to among other things, provide for the classification of
the HepaLife’s board of directors and to provide for staggered terms of
service for each class of directors. This amendment will be effective on the
date that the Amended Articles of Incorporation are filed with the Secretary of
State of the State of Florida, all as more fully described in HepaLife’s
Preliminary Information Statement on Schedule 14C (the “Preliminary Information
Statement”) as filed with the Securities and Exchange Commission on May 7,
2010.
Concurrently
with the execution of the Merger Agreement, HepaLife entered into a Stockholder
Voting Agreement and Irrevocable Proxy (the “Voting Agreement”) with Harborview
Master Fund LP (the “Agent”) and certain stockholders signatory thereto,
pursuant to which the stockholders signatory thereto agreed to vote their shares
of HepaLife Common Stock to elect Joseph Sierchio as a Class I director, Richard
Rosenblum as a Class II director and David Stefansky as a Class III director. In
order to implement the terms of the Voting Agreement, each stockholder signatory
thereto granted the Agent an irrevocable proxy to vote their shares in favor of
the election of directors in accordance with the terms of the Voting
Agreement.
3
The
Voting Agreement and the rights granted the Agent thereunder terminate with
respect to any stockholder signatory thereto upon the earlier of: (a)
June 30, 2010, (b) on the date that the Amended Articles of Incorporation are
filed with the Secretary of State of the State of Florida, or (c) the date on
which such stockholder no longer beneficially owns any shares of HepaLife
Common Stock.
The
foregoing description of the Voting Agreement does not purport to be complete
and is qualified in its entirety by reference to the complete text of the Voting
Agreement, which is filed as Exhibit 9.1 hereto and incorporated herein by
reference.
Investor Relations Service
Agreement
On May
11, 2010, upon consummation of the Merger, HepaLife entered into an Investor
Relations Service Agreement (the “Service Agreement”) with Cogito Corp. (the
“Consultant”), pursuant to which the Consultant shall provide HepaLife with
certain investor relations services. In consideration for the performance of
such services, HepaLife has agreed to pay the Consultant a monthly consulting
fee of $5,000, plus reimbursement for certain expenses (the “Consulting
Expenses”). In order to ensure prompt payment of the Consulting Expenses, on the
Effective Date and as required under the Services Agreement, HepaLife deposited
$271,503 (the “Initial Escrowed Funds”) into an escrow account for the direct
payment of fees to the Consultant by the escrow agent upon the Consultant’s
presentment of invoices to the escrow agent. Upon the consummation of the May 17
Private Placement, an additional $230,000 was deposited into the escrow account
(the “Additional Escrowed Funds”, and together with the Initial Escrowed Funds,
collectively, the “Escrowed Funds”). The term of the Service Agreement is 12
months, but may terminate earlier in the event that the Escrowed Funds are
depleted prior to the expiration of the twelve month term or otherwise at the
option of HepaLife for “Cause” (as defined in the Service Agreement). In the
event that the Services Agreement is terminated for Cause or Escrowed Funds
remain in the escrow account following the termination of the Services Agreement
after 12 months, the Escrowed Funds shall be released to HepaLife.
The
foregoing description of the Service Agreement does not purport to be complete
and is qualified in its entirety by reference to the complete text of the
Service Agreement, which is filed as Exhibit 10.1 hereto and incorporated herein
by reference.
Description
of AquaMed’s Business
Overview
As a
result of the Merger, a significant portion of our business consists of the
business of AquaMed.
Aquamed
develops, manufactures and markets high water content, electron beam
cross-linked, aqueous polymer hydrogels used for wound care, medical
diagnostics, transdermal drug delivery and cosmetics. These gels are
produced using unique proprietary manufacturing technologies which enable
AquaMed to develop, manufacture and market electron beam cross-linked aqueous
polymer sheet hydrogels, hereafter referred to as “gels.” AquaMed is
believed to be one of two known manufacturers in the world of these gels.
AquaMed specializes in custom gels capitalizing on proprietary manufacturing
technologies.
AquaMed’s
gels exhibit significant potential in the following high growth fields: topical
therapeutics in moist wound/burn healing applications; in trans (systemic) and
intradermal (non-systemic) delivery of prescription and non-prescription
medications; cosmetic skin care; and components in medical diagnostics. The
hydrophilic system has two parts: a hydrophilic pre-polymer phase and
a water phase. During the water phase AquaMed introduces various
water soluble active ingredients into its products. Current ingredients
incorporated into AquaMed’s proprietary process include: health additives,
moisturizers, super absorbents, soaps, detergents, antibacterials, carbons,
electrostatic dissipative agents, fragrances, and waxes.
4
AquaMed
believes that it has developed successful strategic relationships in each of
these categories with partners who are meaningful participants in these markets,
including the market leaders in several medical device categories and leading
cosmetic companies.
Hydrogels
are gel-like or colloidal substances made of water and solids. They
can be created chemically (through a combination of ultra violet cross-linking
and chemical interface), or by mixing polymer and water then exposing it to an
electron beam creating a “sheet” of water. Currently, and for the foreseeable
future, all of the hydrogel products that AquaMed produces are
electron beam cross-linked, water and polymer gels, a category in which AquaMed
believes that its hydrogels have a competitive advantage, in part due to the
following product characteristics: painless adhesion to the human body,
stability of form and composition, purity, reproducibility (manufacturing high
quality product on a consistent basis), compatibility with active ingredients,
and high water content.
Many of
the products of AquaMed’s competition feature physical characteristics which
AquaMed believes are less desirable than those of AquaMed’s gels. These include
aggressive skin bonding, chemical and form instability, lack of uniformity, low
water content, odor and active receptivity issues.
AquaMed’s
products are manufactured using proprietary and non-proprietary mixing, coating,
drying and cross-linking technologies. Together, these proprietary
technologies enable AquaMed to produce gels that can satisfy rigid tolerance
specifications with respect to a wide range of physical characteristics –
thickness, water content, adherence, absorption, vapor transmission, release
rates – while maintaining product integrity. These manufacturing technologies
allow AquaMed to participate in the development of FDA regulated medical
devices.
In
addition to its ability to specifically regulate the aforementioned physical
characteristics of the gels, AquaMed has the manufacturing technology to offer
broad choices in selection of liners thereby allowing its customers to create
even tighter tolerances in vapor transmission and active ingredient release
rates, while personalizing color and texture, characteristics that AquaMed
believes are critical in the cosmetic category.
Products
and Services
AquaMed
manufactures and markets electron-beam cross-linked sheet gels for use as
wound/burn dressings with and without active ingredients, components in certain
medical devices, transdermal and intradermal delivery of medication, and topical
application of non-prescription drugs, other skin care treatments, cosmetics and
other commercial products. AquaMed markets its own brand of moist
wound/burn dressings under the AQUAMED brand name, and AquaMed is currently
developing additional line extensions of this product. In addition, the gels are
prepared as components for products distributed by its customers under their
brand names. In addition to manufacturing roll stock, AquaMed offers its
customers converting services, which AquaMed believes creates a competitive
advantage in pricing while expediting its production process.
The
Industry
Hydrogels
are now being marketed in the United States or abroad for many different
applications:
Hydrogel as A Method of Drug
Delivery. Patches are a relatively new method of delivering
medication that has important advantages over other more traditional methods of
drug delivery. As a system of drug delivery, hydrogel patches are
less intrusive, painless, can medicate for preplanned time periods, provide the
potential for a release of medication more consistent with the body’s own
glandular activity, thereby avoiding dosage spikes and, or, digestive
alteration, and minimize side effects apparent in more traditional delivery
methodologies of injection or ingestion.
5
Moist Wound and Burn
Dressings. Dressings made from hydrogels have long been used for the
treatment of wounds and burns. Clinical trials have demonstrated the benefits of
moist wound healing versus traditional dressings. Some of these benefits include
immediate anti-inflammatory effects, keeping the wound bed moist allowing for
the freer cell flow and less scarring, increased absorption of exudate and
accelerated healing. According to a Smith & Nephew presentation
entitled ”Advanced Wound Management in Europe” from an Investor
and Analyst Meeting held in Zurich, Switzerland on November 20, 2009,
the current market for advanced wound management is estimated to be in
excess of $5 billion worldwide and growing at 7% per annum to $7.1 billion by
2014.
Other Medical
Applications. Hydrogel patches are being used for transdermal
applications for the following uses: as hormone replacement therapy and
contraception, treatment of acne, shingles, diabetes and motion sickness,
treatment of angina with nitroglycerin, treatment of smoking addiction using
nicotine and palliatives (i.e., pain relievers, such as lidocaine).
Non-Prescription Therapeutic
Applications. Hydrogel patches are used in the medical
community, and also directly marketed to consumers for the following uses:
topical application of over the counter (“OTC”) drugs such as non-prescription
acne treatments, pain relievers, and diet preparations, cough suppressants,
treatment of warts, calluses and corns, and pain relief.
Cosmetic
Applications. Hydrogel patches and applications are being used
to deliver cosmetics, such as skin care products to consumers and skin care
providers for uses that include moisturizers, face masks, cooling masks and
applicators.
AquaMed’s
Customers and Markets
Moist Wound
Healing. AquaMed markets products under its proprietary brand
AQUAMED as well as supplying products to developers and distributors of
prescription and OTC wound healing products for redistribution to healthcare
professionals and retailers. The benefits of AquaMed’s hydrogel wound
healing products include reduced scarring and pain, greater speed of healing and
increased absorption of exudate. AquaMed believes that the markets
for its wound healing products will continue to expand due to the growing
recognition by professionals and consumers of the benefits of moist wound
healing.
Medical Device Manufacturers.
AquaMed has targeted the high quality, medical device manufacturers (such as
monitoring electrodes and devices and defibrillator pads) as a core segment of
its future revenue streams.
Transdermal Delivery of Prescription
Drugs and OTC Treatments. AquaMed actively seeks new
applications for two types of transdermal delivery through patches which adhere
to the skin and are impregnated with active ingredients and through
iontophoresis, which drives the active ingredients through the skin by use of
controlled electrical currents. Iontophoresis allows for greater
control over the delivery of active ingredients.
AquaMed
is actively involved in various development projects for use of hydrogels in
transdermal delivery of specific ingredients. AquaMed also sells its products to
manufacturers and distributors of non-prescription medications.
6
Cosmetics and Other Consumer
Products. AquaMed currently manufactures hydrogels, hydrogel
patches and products for some of the leading U.S. cosmetics companies, among
others. These products include OTC skin care preparations and other
products for cosmetic use.
Direct
Retailing. AquaMed is exploring various opportunities
for the manufacture and distribution of OTC therapeutic, skin care and cosmetic
products using hydrogel products through such retailers as chain drug, food and
mass merchandise stores under co-branding arrangements.
For the
year ended December 31, 2009, AquaMed filled orders from approximately 20
different customers. Approximately 84% of AquaMed’s annual revenue during this
period was attributable to 4 of these customers, with each of these customers
responsible for more than 12% of AquaMed’s annual revenue, and AquaMed’s largest
customer accounting for approximately 30% of AquaMed’s annual
revenue.
Technology
& Manufacturing
Hydrogels
are manufactured by introducing a hydrophilic polymer (solid) into water,
creating a feed mix. This feed mix is then coated on to a liner and
exposed to radiation. The polymers used by AquaMed, when exposed to radiation,
cross link faster than they degrade (more covalent bonds between molecules are
created than destroyed), creating a matrix that gives the gels a solid
form. Active ingredients such as OTC medication, and skin care, wound
healing or other materials can be added before or after
cross-linking. Materials that do not survive the irradiation process
or dehydration process are added after the cross-linking process is completed.
Once the products have been mixed and cross-linked they form sheets that can be
delivered to customers or first cut and shaped according to customer
specifications. AquaMed believes that many of the processes described above are
proprietary to AquaMed and provide AquaMed with competitive
advantages.
Proprietary
Technologies
·
|
Proprietary
Mixing. AquaMed believes that it is able to manufacture
hydrogel feed mixes with far greater homogeneity than those of its
competition. This is critical especially as it relates to the dosing of
active ingredients. In addition, AquaMed’s proprietary mixing
technology allows for the incorporation of sensitive materials that may
degrade if subjected to other types of
mixing.
|
·
|
Proprietary
Coating. AquaMed’s proprietary coating technology
enables it to handle the gels properly even though they are extremely
thick and resistant to flow. AquaMed has achieved coating
tolerances that have allowed it to coat materials as thin as 0.005 inches
with a margin for error of typically less than 5%. Thickness
controls are critical with respect to the performance of many of the end
products utilizing AquaMed’s hydrogels including medical electrodes,
transdermal delivery patches and cosmetic patches. AquaMed has
also developed coating methodology that minimizes imperfections such as
wrinkling in the end product by significantly reducing line tension.
AquaMed believes that this proprietary know-how allows AquaMed to
manufacture high quality, consistent products which meet the standards of
AquaMed’s customers.
|
·
|
Proprietary Cross-linking
Technology. AquaMed cross-links its hydrogels using an
electron beam accelerator. Electron beam cross-linking is achieved through
the introduction of the high energy field, created by the accelerated
electrons, which causes the release of hydrogen atoms, thereby causing
carbon molecule covalent bonding. The creation of longer chains of the
polymer in the gel increases its molecular integrity, giving the gel
characteristics that make it useful in a variety of
products.
|
7
AquaMed’s
electron-beam cross-linking process is one of three types of cross-linking used
in the industry. The other types used are ultra violent cross-linking
and chemical cross-linking. The benefits of electron beam cross-linking include:
(i) precise control of the amount of polymer cross-linking, (ii) other types
allow for the continuation of cross-linking over a period of time, (iii) no need
for chemical cross-linking agents which may complicate or interfere with other
additives or active ingredients, and (iv) the ability to manufacture high
quality hydrogels on a consistent basis.
The
physical characteristics can be further modified by varying the percent of
polymer cross-linking and the way in which the high energy field is delivered.
There are three variables in the use of an electron beam accelerator for
cross-linking of hydrogels: (i) time of exposure of the target material to the
electron stream, (ii) voltage (electrical potential), and (iii) amperage
(strength of the electrical current). AquaMed believes that its methods of
managing these three variables make it possible to produce high quality gels
matching customer specifications as to a wide range of characteristics. These
methods are proprietary to AquaMed.
The uses
for particle beam accelerators include but are not limited to: sterilization of
medical products and devices, modification of polymers, polymerization and
de-polymerization, crosslinking of thermoplastics, crystal modification,
grafting, de-infestation of spices, fruits and vegetables, cold pasteurization
of foods, meats and seafood, sterilization of wastes, treatment of sewage,
controlled degradation of PTFE (Teflon), cold curing of resins and adhesives,
de-infestation of wood chips and pulp products, coloring gemstones, pollution
control, and treating wire, cable and tubing.
AquaMed
owns and operates a Radiation Dynamics, Inc. (“RDI”) Dynamitron IEA 1500-40
Industrial Electron Accelerator (the “RDI Accelerator”). The RDI Accelerator has
been customized to handle the cross-linking of the type of materials AquaMed
uses, but can also be used for several of the other potential uses such as
coloring gemstones and treating wire, cable and tubing. Replacement cost of the
RDI Accelerator and processing equipment is estimated to be in excess of $7
million. The delivery and installation process is time-consuming with
replacement estimated to take 2.5 to 3 years. AquaMed estimates that its
equipment has a useful life of approximately 20 years and provides annual
production capacity in excess of 6,000 hours. AquaMed believes that its current
utilization is significantly less than capacity.
Competition
AquaMed
believes that its proprietary competitive manufacturing advantages, along with
the high barrier to entry (the substantial cost of acquiring an electron beam as
compared to other cross-linking devices and the cost and extended time required
for installing this beam) and current minimal level of competition for high
performance gels, affords AquaMed the opportunity to be a leader in the
applications that require tight tolerances and/or incorporate active
ingredients. AquaMed believes that awareness of its product, low cost, speed to
market, and unique manufacturing techniques, are advantages that will be
conveyed to its customer base through a combination of consumer product entries,
expansion within current original equipment manufacturer bases and institutional
reach programs such as trade magazines, trade shows, and through senior
management contacts.
Government
Regulation
There is
no required government regulation with respect to AquaMed’s hydrogel related
products at this time. While some applications of the hydrogels fall under the
jurisdiction of the Food and Drug Administration (the “FDA”), the hydrogels are
generally classified as Class I exempt devices and the majority of the hydrogel
products that AquaMed manufactures are thereby exempt from the FDA filing of any
regulatory submissions and/or pre-market notification requirements. To the
extent that any FDA regulatory submissions are required, AquaMed will need to
file these submissions and maintain all appropriate documentation. With respect
to registering the manufacturing facility with the FDA under the Code of Federal
Regulations, 21CFR820.1, Scope: Part A, it is stated that the regulation does
not apply to manufacturers of component parts of finished devices. At
the current time, hydrogels are sold as component parts to various medical
device/cosmetic manufacturers. If at any time in the future AquaMed
manufactures products that would require such filings or registration, AquaMed
will take the appropriate steps to comply.
8
Sources
and Availability of Raw Materials; Principal Suppliers
AquaMed’s
principal suppliers for the two polymers that it primarily uses in the
manufacture of its hydrogels, polyethylene oxide and polyvinylpyrrolidone, are
Dow Chemical and BASF, respectively. Although AquaMed has not experienced
significant production delays attributable to supply changes, AquaMed believes
that, for the polymers used to make its current hydrogels, alternative sources
of supply would be difficult to develop over a short period of time. Because
AquaMed has no direct control over its third-party suppliers, interruptions or
delays in the products and services provided by these third parties may be
difficult to remedy in a timely fashion. In addition, if such suppliers are
unable or unwilling to deliver the necessary raw materials or products, AquaMed
may be unable to redesign or adapt its technology to work without such raw
materials or products or find alternative suppliers or manufacturers. In such
events, AquaMed could experience interruptions, delays, increased costs, or
quality control problems.
Patents,
Proprietary Rights and Trademarks
AquaMed’s
policy is to file patent applications to protect technology, inventions and
improvements that are important to the development of its business. AquaMed also
relies on trade secret protection for its confidential and proprietary
information.
AquaMed
holds no issued patents related to the hydrogel products, but has several
patents pending and holds a registered trademark on AQUAMED which is used on its
hydrogels.
Employees
As of May
13, 2010 AquaMed had 8 employees, 1 in administration and 7 in manufacturing and
quality control.
AquaMed
believes that it has good relations with its employees and other human
resources, and has never incurred a significant work stoppage due to any strike
or protest by its employees.
AquaMed
Properties
On
February 27, 2009, AquaMed executed an assignment and assumption of Hydrogel
Design Systems, Inc. lease at market rate for its commercial manufacturing
facility located at 2150 Cabot Boulevard West, Langhorne, Pennsylvania which is
due to expire January 31, 2016. The lease calls for monthly lease
payments as follows $14,883 a month through January 31, 2010, $15,627 a month
through January 31, 2014 and $17,187 through January 31, 2016. In
addition the lease calls for monthly reimbursements which are adjusted
annually. The monthly reimbursements for 2009 amounted to $4,400 a
month. Rent expense including all related reimbursements which were
classified as operating leases, totaled $211,734 for 2009.
9
The
following is a schedule by year of future minimum rental payments, excluding
reimbursements, required under the operating lease agreements:
For
the Year Ending
December
31
|
Amount
|
2010
2011
2012
2013
2014
Thereafter
|
$186,777
187,522
187,522
187,522
204,689
223,438
|
Total
|
$1,177,470
|
AquaMed believes that
its property and equipment are in good condition, subject to normal wear
and tear. AquaMed believes that its facility has sufficient capacity
to meet its current and projected distribution needs.
Forward-Looking
Statements
This
Current Report on Form 8-K and other written reports and oral statements made
from time to time by us may contain so-called “forward-looking statements,” all
of which are subject to risks and uncertainties. Forward-looking statements can
be identified by the use of words such as “expects,” “plans,” “will,”
“forecasts,” “projects,” “intends,” “estimates,” and other words of similar
meaning. One can identify them by the fact that they do not relate strictly to
historical or current facts. These statements are likely to address our growth
strategy, financial results and product and development programs. One must
carefully consider any such statement and should understand that many factors
could cause actual results to differ from our forward-looking statements. Such
risks and uncertainties include but are not limited to those outlined in the
section entitled “Risk Factors” and other risks detailed from time to time in
our filings with the Securities and Exchange Commission or otherwise. These
factors may include inaccurate assumptions and a broad variety of other risks
and uncertainties, including some that are known and some that are not. No
forward-looking statement can be guaranteed and actual future results may vary
materially.
Information
regarding market and industry statistics contained in this Report is included
based on information available to us that we believe is accurate. It is
generally based on industry and other publications that are not produced for
purposes of securities offerings or economic analysis. We have not reviewed or
included data from all sources, and cannot assure investors of the accuracy or
completeness of the data included in this Report. Forecasts and other
forward-looking information obtained from these sources are subject to the same
qualifications and the additional uncertainties accompanying any estimates of
future market size, revenue and market acceptance of products and services. We
do not assume any obligation to update any forward-looking statement. As a
result, investors should not place undue reliance on these forward-looking
statements.
Risk
Factors
You
should carefully consider the factors described below, among others, and other
information contained in this report before deciding whether to invest in our
shares or obligations. Any investment in our shares or obligations
involve a high degree of risk. The risks and uncertainties described
below are not the only ones we face. Additional risks and
uncertainties not presently known to us, or which we currently deem immaterial
or which are similar to those faced by other companies in our industry or
business in general, may also impair our business operations. As a
result of any of the following risks, our business, financial condition or
results of operations could be materially and adversely affected. In
such case, the trading price of our common stock could decline, and you may lose
all or part of your investment. This report also contains
forward-looking statements that involve risks and
uncertainties. Please refer to “Forward-Looking Statements”
above.
10
Risk
Relating to Our Company
We
have experienced significant losses and expect losses to continue for the
foreseeable future.
We have
yet to establish any history of profitable operations. We have incurred annual
operating losses of $1,513,928 and $2,961,820, respectively, during the fiscal
years ended December 31, 2009 and 2008. As a result, at December 31, 2009, we
had an accumulated deficit of $20,237,116. As a result of the acquisition of
AquaMed, we anticipate that we will incur additional operating losses for the
foreseeable future since AquaMed has a history of net losses and may expect net
losses for the foreseeable future.
AquaMed
has achieved only limited revenues to date and there is no assurance that
AquaMed will be able to generate substantial revenues or be profitable in the
future. AquaMed has incurred net losses since its inception,
including a net loss of $817,196 from the period of its inception (January 13,
2009) to December 31, 2009. We expect that AquaMed will continue to
incur significant losses on a quarterly basis at least through 2010 and this
will increase our operating losses. We can offer no assurance that, after the
acquisition of AquaMed, we will achieve revenue growth or
profitability.
The
acquisition of AquaMed could divert management’s attention, cause ownership
dilution to our stockholders and be difficult to integrate.
The
acquisition of AquaMed presents a number of risks that could harm us and our
business, operating results and financial condition:
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·
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we
could experience a substantial strain on our resources, including time and
money, and we may not be successful in integrating AquaMed’s business into
our existing business;
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·
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our
management’s attention may be diverted from our ongoing business
concerns;
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·
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while
integrating AquaMed, we may lose key executives or other employees of
AquaMed;
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·
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we
could experience customer dissatisfaction or performance problems with
AquaMed or the products offered by
AquaMed;
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·
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we
may become subject to unknown or underestimated liabilities of AquaMed or
incur unexpected expenses or losses from the acquisition of AquaMed;
and
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we
may incur possible impairment charges related to goodwill or other
intangible assets or other unanticipated events or circumstances, any of
which could harm our business.
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Consequently,
we might not be successful in integrating AquaMed’s acquired businesses,
products or technologies, and might not achieve anticipated revenue and cost
benefits.
11
Risks
Related to AquaMed’s Business
AquaMed
is dependent on proprietary know-how. AquaMed holds limited
patents.
Competitors
of AquaMed may develop or market technologies that are more effective or more
commercially attractive than AquaMed’s. AquaMed’s manufacturing know-how as to
mixing, coating and cross-linking can be duplicated even if it is difficult to
do so. There is no assurance that, should we apply for intellectual property
protection for AquaMed’s intellectual property, we would be able to obtain such
protection. Despite our efforts to protect proprietary rights, there
is no assurance that such protections may not preclude competitors of AquaMed
from developing and/or marketing similar products. While we are not
aware of any third party intellectual property that would materially affect
AquaMed’s business, our failure or inability to obtain patents and protect
AquaMed’s proprietary information could result in our business being adversely
affected.
We
are dependent on the services of key personnel of AquaMed, the loss of which
would have a material adverse effect on us.
The
operations and future success of HepaLife depend upon the efforts of our key
employees. Because of the specialized nature of AquaMed’s business
that we acquired, we are dependent on our ability to attract and retain
qualified personnel. We face competition for personnel from other companies with
greater resources than we have. There can be no assurance that we
will be successful in hiring or retaining qualified personnel and our failure to
do so could have a material adverse effect on our business and financial
condition.
We
may not be able to correctly estimate our future operating expenses, which could
lead to cash shortfalls.
Our
operating expenses may fluctuate significantly in the future as a result of a
variety of factors, many of which are outside of our control. These factors
include:
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the
time and resources required to develop, conduct clinical trials and obtain
regulatory approvals for AquaMed’s drug
candidates;
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the
costs to attract and retain personnel with the skills required for
effective operations; and
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the
costs of preparing, filing, prosecuting, defending and enforcing patent
claims and other patent related costs, including litigation costs and the
results of such litigation.
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AquaMed’s
business is dependant on significant customers.
During
the period between January 13, 2009 (AquaMed’s inception) through December 31,
2009, more than 84% of AquaMed’s revenues were from only 4 customers, one of
which represented approximately 30% of AquaMed’s revenue. The loss of any
significant customer of AquaMed would have a significantly negative effect on
AquaMed’s operations and, as a result, on our overall operations.
AquaMed
is dependent on outside suppliers for raw materials.
The
products produced by AquaMed are manufactured using proprietary polymers that we
will obtain from outside suppliers. It is possible that the outside
suppliers may be unable to meet our demands or may be unable to supply us with
the materials necessary for us to manufacture the products produced by
AquaMed.
12
Risks
Related to AquaMed’s Industry
AquaMed
is subject to governmental regulations.
Inherent
in the development of new medical products is the potential for delay in that
product testing, including clinical evaluation, is required before most products
can be used with humans. The manufacture, marketing, labeling, record-keeping,
claims and advertising of medical devices, as well as prescription drugs,
non-prescription drugs that claim to have certain therapeutic properties, and
cosmetics are subject to regulation by the FDA and the Federal Trade Commission.
AquaMed is also subject to state regulation on electron beam radiation services
and facilities. The expansion of our business into the manufacture and
distribution of AquaMed’s products for consumer use will subject us to
additional governmental regulation. While hydrogel patches are classified as
Class I exempt devices by the FDA, there can be no assurances that the FDA will
not seek to regulate this product in the future. Such action by the FDA could
have a material adverse effect on AquaMed’s prospects and our overall prospects,
as such approval can take a number of years, and would require AquaMed to
undertake costly and time-consuming tests and other procedures.
If
AquaMed fails to comply with continuing federal, state and foreign regulations,
it could lose its approvals to market drugs and our business would be seriously
harmed.
Following
initial regulatory approval of any drugs that AquaMed may develop, it will be
subject to continuing regulatory review, including review of adverse drug
experiences and clinical results that are reported after AquaMed’s drug products
become commercially available. This would include results from any
post-marketing tests or continued actions required as a condition of approval.
The manufacturing facilities AquaMed may use to make any of its drug candidates
will be subject to periodic review and inspection by the FDA. If a previously
unknown problem or problems with a product or a manufacturing and laboratory
facility used by AquaMed is discovered, the FDA or foreign regulatory agency may
impose restrictions on that product or on the manufacturing facility, including
requiring AquaMed to withdraw the product from the market. Any changes to an
approved product, including the way it is manufactured or promoted, often
requires FDA approval before the product, as modified, can be marketed. In
addition, AquaMed and its contract manufacturers will be subject to ongoing FDA
requirements for submission of safety and other post-market information. If
AquaMed or any of its contract manufacturers fail to comply with applicable
regulatory requirements, a regulatory agency may:
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issue
warning letters;
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impose
civil or criminal penalties;
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suspend
or withdraw AquaMed’s regulatory
approval;
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suspend
or terminate any of AquaMed’s ongoing clinical
trials;
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refuse
to approve pending applications or supplements to approved applications
filed by AquaMed;
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impose
restrictions on AquaMed’s
operations;
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close
the facilities of AquaMed’s contract manufacturers;
or
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seize
or detain products or require a product
recall.
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13
Additionally,
regulatory review covers a company’s activities in the promotion of its drugs,
with significant potential penalties and restrictions for promotion of drugs for
an unapproved use. Sales and marketing programs are under scrutiny for
compliance with various mandated requirements, such as illegal promotions to
health care professionals. AquaMed is also required to submit information on its
open and completed clinical trials to public registries and databases. Failure
to comply with these requirements could expose us to negative publicity, fines
and penalties that could harm our business.
If
AquaMed violates regulatory requirements at any stage, whether before or after
marketing approval is obtained, we may be fined, be forced to remove a product
from the market or experience other adverse consequences, including delay, which
would materially harm our financial results. Additionally, we may not be able to
obtain the labeling claims necessary or desirable for product
promotion.
Once
approved, there is no guarantee that the market will accept AquaMed’s products
and AquaMed’s products are subject to obsolescence; competition in the medical
products field is intense and AquaMed represents a very small
presence.
The field
of medical and health products is characterized by rapid and significant
changes. Even if AquaMed obtains regulatory approvals, uncertainty exists as to
whether the market will accept its products or if the market for its products is
as large as we anticipate. A number of factors may limit the market acceptance
of AquaMed’s products, including the timing of regulatory approvals and market
entry relative to competitive products, the availability of alternative
products, the price of AquaMed’s products relative to alternative products, the
availability of third party reimbursement and the extent of marketing efforts by
third party distributors or agents that we retain. We cannot assure you that
AquaMed’s products will receive market acceptance in a commercially viable
period of time, if at all. We cannot be certain that any investment made in
developing products will be recovered by AquaMed, even if AquaMed is successful
in commercialization.
We can
give no assurance that any existing or future product produced by AquaMed will
be competitive and will not become obsolete in light of future technological
developments. Most of AquaMed’s competitors have far greater financial,
research, marketing and distribution resources and more established channels of
distribution than AquaMed does. In addition, many of AquaMed’s current and
potential competitors offer greater variety of products and services and can
therefore offer discounts and other incentive programs unavailable to AquaMed at
this time.
AquaMed’s
failure to meet the prices offered by competitors, or to be unable to meet
production demands for AquaMed’s products could have material adverse effect on
our business, financial condition or results of operations. The relative speed
with which we can introduce AquaMed’s products and expand its distribution are
also a competitive factor. Additionally, many of AquaMed’s customers have
financial ability to establish in-house manufacturing capabilities similar to
ours.
AquaMed’s
products risk exposure to product liability claims.
If
successful in developing testing and commercializing AquaMed’s products, we will
be exposed to potential product liability risks, which are inherent in the
testing, manufacturing and marketing of topical therapeutic and skin care
products. It is likely we will be contractually obligated, under any
license agreements that AquaMed enters into to indemnify the
individuals and/or entities to whom AquaMed has licensed the technology against
claims relating to the manufacture and sale of products sold by
licensees. This indemnification liability, as well as direct
liability to consumers for any defects in the products sold, could expose us to
substantial risks and losses. AquaMed has obtained $3,000,000 of
product liability insurance; however, there can be no assurance that we will be
able to maintain such insurance on acceptable terms or that such insurance will
provide adequate coverage against potential liabilities.
14
Risks
Related to the Common Stock
Our
stock price historically has been volatile and may continue to be
volatile.
The
market price of our common stock has been and is expected to continue to be
highly volatile. Factors, many of which are beyond our control, include, in
addition to other risk factors described in this section, the announcements of
technological innovations by us or other companies, regulatory matters, new or
existing products or procedures, concerns about our financial position,
operating results, litigation, government regulation, developments or disputes
relating to agreements, patents or proprietary rights, and general economic,
industry and market conditions may have a significant impact on the market price
of our stock. In addition, the future sales of shares of our common stock by our
stockholders, the holders of our other outstanding warrants and options, and us
could have an adverse dilutive effect on our outstanding shares and the market
price of such shares.
The
trading price of our common stock has, from time to time, fluctuated widely and
in the future may be subject to similar fluctuations. The trading price may be
affected by a number of factors including the risk factors set forth herein, as
well as our operating results, financial condition, general economic conditions,
market demand for our common stock, and various other events or factors both in
and out of our control. In recent years, broad stock market indices, in general,
and smaller capitalization companies, in particular, have experienced
substantial price fluctuations. In a volatile market, we may experience wide
fluctuations in the market price of our common stock. These fluctuations may
have a negative effect on the market price of our common stock. To the extent
our stock price fluctuates and/or remains low, it could cause you to lose some
or all of your investment and impair our ability to raise capital through the
offering of additional equity securities.
Our
common stock is a “penny stock” and because “penny stock” rules will apply, you
may find it difficult to sell shares of our common stock.
Our
common stock is a “penny stock” as that term is defined under Rule 3a51-1 of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”). Generally, a
“penny stock” is a common stock that is not listed on a securities exchange and
trades for less than $5.00 a share. Prices of penny stocks often are not
available to buyers and sellers and the market may be very limited. Penny stocks
in start-up companies are among the riskiest equity investments. Broker-dealers
who sell penny stocks must provide purchasers of these stocks with a
standardized risk-disclosure document prepared by the Securities and Exchange
Commission. The document provides information about penny stocks and the nature
and level of risks involved in investing in the penny stock market. A broker
must also give a purchaser, orally or in writing, bid and offer quotations and
information regarding broker and salesperson compensation, make a written
determination that the penny stock is a suitable investment for the purchaser,
and obtain the purchaser’s written agreement to the purchase. Many brokers
choose not to participate in penny stock transactions. Because of the penny
stock rules, there is less trading activity in penny stocks and you are likely
to have difficulty selling your shares.
Our
common stock is quoted on the Over-The-Counter Bulletin Board and, accordingly,
it may be difficult for you to sell your shares or you may not be able to sell
your shares for an optimum trading price.
Our
common stock is quoted on the Financial Industry Regulatory Authority’s
Over-The-Counter Bulletin Board (the “OTCBB”) under the symbol “HPLF.” The OTCBB
is a regulated quotation service that displays real-time quotes, last sale
prices and trade volumes in over-the-counter securities. Because trades and
quotations on the OTCBB involve a manual process, the market information for
such securities cannot be guaranteed. In addition, quote information, or even
firm quotes, may not be available. The manual execution process may delay order
processing and intervening price fluctuations may result in the failure of a
limit order to execute or the execution of a market order at a significantly
different price. Execution of trades, execution reporting and the delivery of
legal trade confirmations may be delayed significantly. Consequently, one may
not be able to sell shares of our common stock at the optimum trading
prices.
15
When
fewer shares of a security are being traded on the OTCBB, volatility of prices
may increase and price movement may outpace the ability to deliver accurate
quote information. Lower trading volumes in a security may result in a lower
likelihood of an individual’s orders being executed, and current prices may
differ significantly from the price one was quoted by the OTCBB at the time of
the order entry.
Orders
for OTCBB securities may not be canceled or edited like orders for other
securities. All requests to change or cancel an order must be submitted to,
received and processed by the OTCBB. Due to the manual order processing involved
in handling OTC Bulletin Board trades, order processing and reporting may be
delayed, and an individual may not be able to cancel or edit his order.
Consequently, one may not be able to sell shares of common stock at the optimum
trading prices.
The
dealer’s spread (the difference between the bid and ask prices) may be large and
may result in substantial losses to the seller of securities on the OTCBB if the
common stock or other security must be sold immediately. Further, purchasers of
securities on the OTCBB may not have a bid price for securities bought and sold
through the OTCBB. Due to the foregoing, demand for securities that are traded
through the OTCBB may be decreased or eliminated.
We
do not intend to pay dividends for the foreseeable future.
We
currently intend to retain future earnings, if any, to support the development
and expansion of our business and do not anticipate paying cash dividends in the
foreseeable future. Our payment of any future dividends will be at the
discretion of our board of directors after taking into account various factors,
including but not limited to our financial condition, operating results, cash
needs, growth plans and the terms of any credit agreements that we may be a
party to at the time. Accordingly, investors must rely on sales of our common
stock after price appreciation, which may never occur, as the only way to
realize a return on their investment.
Sales
practice requirements of the Financial Industry Regulatory Authority (“FINRA”)
may also limit a stockholder’s ability to buy and sell our stock.
In
addition to the “penny stock” rules described above, FINRA has adopted rules
that require that in recommending an investment to a customer, a broker-dealer
must have reasonable grounds for believing that the investment is suitable for
that customer. Prior to recommending speculative low priced securities to their
non-institutional customers, broker-dealers must make reasonable efforts to
obtain information about the customer’s financial status, tax status, investment
objectives and other information. Under interpretations of these rules, FINRA
believes that there is a high probability that speculative low priced securities
will not be suitable for at least some customers. FINRA requirements make it
more difficult for broker-dealers to recommend that their customers buy our
common stock, which may limit your ability to buy and sell our stock and have an
adverse effect on the market for our shares.
Item
3.02. Unregistered Sales of Equity Securities.
Reference
is made to the disclosure regarding the Private Placements set forth under Item
2.01 of this Form 8-K, which disclosure is incorporated herein by
reference.
16
Item
4.01. Changes in Registrant’s Certifying Accountant.
(a) Dismissal
of Independent Registered Public Accounting Firm.
On May
13, 2010, the board of directors of HepaLife dismissed Peterson Sullivan LLP
(“Peterson”) as HepaLife’s independent registered public accounting
firm.
The
reports of Peterson on HepaLife’s financial statements as of and for the years
ended December 31, 2009 and December 31, 2008 contained no adverse opinion
or disclaimer of opinion nor were they qualified or modified as to uncertainty,
audit scope, or accounting principle.
During
the fiscal years ending December 31, 2009 and December 31, 2008 and the
subsequent period through May 13, 2010, there have been no (i) disagreements
with Peterson on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which disagreements, if
not resolved to Peterson’s satisfaction, would have caused Peterson to make
reference to the subject matter of the disagreement(s) in connection with its
reports; or (ii) “reportable events” as defined in Item 304(a)(1)(v) of
Regulation S-K.
HepaLife
has provided Peterson with a copy of the above disclosures and requested that
Peterson furnish HepaLife with a letter addressed to the Securities and Exchange
Commission stating whether or not it agrees with the above statement. A copy of
Peterson’s letter, dated May 13, 2010 is filed as Exhibit 16.1 to this Form
8-K.
(b) Appointment
of New Independent Registered Public Accounting Firm.
On May
13, 2010, the board of directors of HepaLife engaged Marcum LLP (“Marcum”), as
HepaLife’s new independent registered public accounting firm.
During
the fiscal years ending December 31, 2009 and December 31, 2008, and the
subsequent interim period prior to the engagement of Marcum, HepaLife has not
consulted Marcum regarding (i) the application of accounting principles to any
specified transaction, either completed or proposed, (ii) the type of audit
opinion that might be rendered on HepaLife’s financial statements, or (iii) any
matter that was either the subject of a disagreement (as defined in Item
304(a)(1)(iv)) or a reportable event (as defined in Item
304(a)(1)(v)).
Item
5.02. Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Director
and Officer Resignations
Effective
May 11, 2010, upon consummation of the Merger and pursuant to the Merger
Agreement, Jatinder S. Bhogal and Javier Jimenez resigned from HepaLife’s board
of directors. Also effective May 11, 2010, upon consummation of the Merger, Amit
S. Dang resigned from his position as Interim Chief Executive Officer and
President and Interim Chief Financial Officer of HepaLife.
Executive
Officers and Directors
The
following persons became our executive officers and directors on May 11, 2010,
upon consummation of the Merger, and hold the positions set forth opposite their
respective names.
Name | Age | Position |
David Stefansky | 39 | Chairman and Director |
Richard Rosenblum | 51 | President |
Steven Berger | 49 | Chief Financial Officer, Treasurer and Secretary |
17
Prior to
the Effective Time, HepaLife’s board of directors appointed Richard Rosenblum
and David Stefansky to HepaLife’s board of directors effective upon the
consummation of the Merger and following the resignations of Messrs Bhogal and
Jimenez. Subsequent to this appointment, the board of directors and Mr.
Rosenblum determined that Mr. Rosenblum would not accept this appointment to
HepaLife’s board of directors until HepaLife satisfies the notice requirements
to HepaLife’s stockholders pursuant to Rule 14f-1 under the Exchange Act. Until
such time, Mr. Rosenblum shall be invited to participate at all meetings of
HepaLife’s board of directors as an observer.
As noted
above, on May 7, 2010, holders of a majority of the voting shares of HepaLife
acted by written consent in lieu of a special meeting of stockholders to adopt
an amendment to HepaLife’s Articles of Incorporation, to among other things,
provide for the classification of the HepaLife’s board of directors and to
provide for staggered terms of service for each class of directors. Upon the
effectiveness of the Amended Articles of Incorporation, HepaLife’s board of
directors has designated Joseph Sierchio as a Class I director, to serve in such
capacity until the 2010 annual meeting of stockholders, Richard Rosenblum as a
Class II director, to serve in such capacity until the 2011 annual meeting of
stockholders, and David Stefansky as a Class III director, to serve in such
capacity until the 2012 annual meeting of stockholders. Directors elected to
succeed those listed above will hold office for three-year terms until the
election and qualification of their successors.
Biographies
David Stefansky (Chairman of the
Board of Directors). David Stefansky has been a principal of Harborview
Advisors, LLC, the investment manager for Harborview Master Fund, L.P. and
Harborview Value Master Fund, L.P., since 2004. Mr. Stefansky previously was a
managing director at vFinance, Inc. From September 2006 to March
2009, Mr. Stefansky was a director of Boxwoods, Inc. From September 2006 to May
2007, Mr. Stefansky was a director of Mill Basin Technologies, Ltd. From
November 2006 to January 2008, Mr. Stefansky was a director of Marine Park
Holdings, Inc. From August 2009 to September 2009, Mr. Stefansky was a director
of HG Partners, Inc.
Richard Rosenblum (President).
Richard Rosenblum has been a principal of Harborview Advisors, LLC, the
investment manager for Harborview Master Fund, L.P. and Harborview Value Master
Fund, L.P., since 2004. He previously was a managing director of investment
banking for vFinance, Inc., a middle market investment banking and brokerage
organization. Mr. Rosenblum graduated from the State University of New York at
Buffalo in 1981, summa cum laude, with a degree in finance and accounting. From
September 2006 to April 2010, Mr. Rosenblum was a director of Boxwoods, Inc.,
which changed its name to Duke Mining Company, Inc. in March 2009. From
September 2006 to May 2007, Mr. Rosenblum was a director of Mill Basin
Technologies, Ltd. From November 2006 to January 2008, Mr. Rosenblum was a
director of Marine Park Holdings, Inc. From August 2009 to September 2009, Mr.
Rosenblum was a director of HG Partners, Inc..
Steven Berger (Chief Financial
Officer, Treasurer and Secretary). Steven Berger has been the Chief
Financial Officer and Chief Operating Officer of Harborview Advisors, LLC, the
investment manager for Harborview Master Fund, L.P. and Harborview Value Master
Fund, L.P., since 2007. His past executive finance positions include serving as
Chief Financial Officer of Global/CHC Worldwide LLC, a chemical coatings
company. Other executive experience includes his tenure as President of Morgan
Harris & Co. where he was involved in equity trading. From 2000 to 2003, Mr.
Berger was Chief Financial Officer of Virtual BackOffice Inc., a company engaged
in the provision of virtual secretarial services. From 1983 to 1999, Mr. Berger
was the Treasurer, Controller and Chief Compliance Officer with LaBranche &
Co., the parent corporation of LaBranche & Co. LLC, one of the oldest and
largest specialists in equity securities listed on the New York Stock Exchange
and the American Stock Exchange. Mr. Berger holds a Bachelor of Science degree
in business administration with a concentration in finance from Boston
University.
18
Item
7.01. Regulation FD Disclosure.
On May 17, 2010, HepaLife issued a
press release announcing the execution of the Merger Agreement and consummation
of the Merger and Private Placements, a copy of which is furnished as Exhibit
99.1 hereto.
In accordance with general instruction
B.2 to Form 8-K, the information contained in Exhibit 99.1 is being “furnished”
and not “filed” with the Securities and Exchange Commission for purposes of
Section 18 of the Exchange Act and such information shall not be deemed
incorporated by reference in any filing under the Securities Act or the Exchange
Act, whether made before or after the date hereof, regardless of any general
incorporation language in such filing.
The information furnished pursuant to
this Item 7.01 shall not be deemed to constitute an admission that such
information is required to be furnished pursuant to Regulation FD or that such
information or exhibit contains material information that is not otherwise
publicly available. In addition, HepaLife does not assume any
obligation to update such information in the future.
Item
9.01. Financial Statements and Exhibits.
(a) Financial
Statements of Businesses Acquired
To be
filed by amendment.
(b) Pro
Forma Financial Information
To be
filed by amendment.
(d) Exhibits
Exhibit
No.
2.1
|
Description
Agreement
and Plan of Merger, dated as of May 11, 2010, by and among HepaLife
Technologies, Inc., HT Acquisition Corp. and AquaMed Technologies,
Inc.
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2.2
|
Certificate
of Merger, dated May 11, 2010, between AquaMed Technologies, Inc. and HT
Acquisition Corp.
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4.1
|
Form
of Series E Stock Purchase Warrant
|
4.2
|
Form
of Series F Stock Purchase Warrant
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9.1
|
Stockholder
Voting Agreement and Irrevocable Proxy, dated as of May 11, 2010, by and
among HepaLife Technologies, Inc., Harborview Master Fund LP and certain
stockholders signatory thereto.
|
10.1
|
Investor
Relations Service Agreement, dated as of May 11, 2010, by and between
HepaLife Technologies, Inc. and Cogito,
Corp.
|
10.2
|
Placement
Agent Agreement, dated as of May 6, 2010, by and between Palladium Capital
Advisors, LLC and HepaLife Technologies,
Inc.
|
10.3
|
Form
of Subscription Agreement
|
16.1
|
Letter
of Peterson Sullivan LLP, dated May 13,
2010
|
99.1
|
Press
Release
|
19
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
HEPALIFE
TECHNOLOGIES, INC.
|
||||
Dated: May 17, 2010 |
By:
|
/s/ Steven C. Berger | ||
Name: |
Steven
C. Berger
|
|||
Title: |
Chief
Financial Officer
|
|||
20
EXHIBIT
INDEX
Exhibit
No.
2.1
|
Description
Agreement
and Plan of Merger, dated as of May 11, 2010, by and among HepaLife
Technologies, Inc., HT Acquisition Corp. and AquaMed Technologies,
Inc.
|
2.2
|
Certificate
of Merger, dated May 11, 2010, between AquaMed Technologies, Inc. and HT
Acquisition Corp.
|
4.1
|
Form
of Series E Stock Purchase Warrant
|
4.2
|
Form
of Series F Stock Purchase Warrant
|
9.1
|
Stockholder
Voting Agreement and Irrevocable Proxy, dated as of May 11, 2010, by and
among HepaLife Technologies, Inc., Harborview Master Fund LP and certain
stockholders signatory thereto.
|
10.1
|
Investor
Relations Service Agreement, dated as of May 11, 2010, by and between
HepaLife Technologies, Inc. and Cogito,
Corp.
|
10.2
|
Placement
Agent Agreement, dated as of May 6, 2010, by and between Palladium Capital
Advisors, LLC and HepaLife Technologies,
Inc.
|
10.3
|
Form
of Subscription Agreement
|
16.1
|
Letter
of Peterson Sullivan LLP, dated May 13,
2010
|
99.1
|
Press
Release
|
21