Attached files
file | filename |
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EX-3.5 - EX-3.5 - IASO PHARMA INC | d27782_ex3-5.htm |
EX-3.4 - EX-3.4 - IASO PHARMA INC | d27782_ex3-4.htm |
EX-4.1 - EX-4.1 - IASO PHARMA INC | d27782_ex4-1.htm |
EX-3.6 - EX-3.6 - IASO PHARMA INC | d27782_ex3-6.htm |
EX-10.1 - EX-10.1 - IASO PHARMA INC | d27782_ex10-1.htm |
EX-10.6 - EX-10.6 - IASO PHARMA INC | d27782_ex10-6.htm |
EX-10.17 - EX-10.17 - IASO PHARMA INC | d27782_ex10-17.htm |
EX-23.1 - EX-23.1 - IASO PHARMA INC | d27782exh_23-1.htm |
SECURITIES AND EXCHANGE COMMISSION
TO
FORM S-1
UNDER
THE SECURITIES ACT OF 1933
Delaware |
2834 |
20-5686081 |
||||||||
(State or Other
Jurisdiction of Incorporation or Organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification Number) |
Suite 200
San Diego, California 92130
(858) 350-4312
(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrants Principal Executive Offices)
President and Chief Executive Officer
IASO Pharma Inc.
12707 High Bluff Drive
Suite 200
San Diego, California 92130
(858) 350-4312
(Name, Address Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)
Yehuda
Markovits, Esq. Olshan Grundman Frome Rosenzweig & Wolosky LLP Park Avenue Tower 65 East 55th Street New York, New York 10022 Telephone: (212) 451-2300 Facsimile: (212) 451-2222 |
Marc
J. Ross, Esq. Benjamin S. Reichel, Esq. Sichenzia Ross Friedman Ference LLP 61 Broadway 32nd Floor New York, New York 10006 Telephone: (212) 930-9700 Facsimile: (212) 930-9725 |
Large accelerated
filer |
[ ] |
Accelerated filer |
[ ] |
|||||||||||
Non-accelerated
filer |
[ ] (Do not check if a smaller reporting company) |
Smaller reporting company |
[X] |
Title of Each Class of Securities to be Registered |
Amount to be Registered |
Proposed Maximum Offering Price(2) |
Proposed Maximum Aggregate Offering Price(2) |
Amount of Registration Fee |
||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Common stock,
$0.001 par value per share(1) |
4,600,000 shares |
$ | 5.00 | $ | 23,000,000 | $ | 2,670.30 | |||||||||||
Underwriters warrants |
1 warrant |
$ | 100 | $ | 100 | $ | .01 | |||||||||||
Shares of
common stock underlying underwriters warrants |
1 38,000 shares( 3 ) |
$ | 5.50 | $ | 759,000 | $ | 88. 12 | |||||||||||
Total
|
$ | 23, 759,100 | $ | 2,7 58. 43 | ( 4 ) |
(1) |
Includes 600,000 shares of common stock, which may be issued upon exercise of a 45-day option granted to the underwriters to cover over-allotments, if any. |
(2) |
Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended. |
( 3 ) |
Represents 3% of the shares of common stock to be sold in this offering, including 600,000 shares of common stock that may be sold upon exercise of the underwriters over-allotment option. |
( 4 ) |
$1,426 of such fee was previously paid. |
PRELIMINARY
PROSPECTUS |
SUBJECT TO COMPLETION, DATED JANUARY 21, 2011 |
Per Share |
Total |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Public
offering price |
$ | $ | ||||||||
Underwriting
discount and commissions(1) |
$ | $ | ||||||||
Proceeds to
us, before expenses |
$ | $ |
(1) |
Does not include a non-accountable expense allowance in the amount of 1.0% of the gross proceeds of the offering, excluding any over-allotment proceeds. See Underwriting for a description of the compensation payable to the underwriters. |
Ladenburg Thalmann &
Co. Inc. |
Maxim Group LLC |
Page |
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32 | ||||||
5 2 | ||||||
7 1 | ||||||
7 5 | ||||||
8 4 | ||||||
8 9 | ||||||
9 2 | ||||||
10 1 | ||||||
10 3 | ||||||
10 6 | ||||||
10 7 | ||||||
10 7 | ||||||
F-1 |
pneumonias, and is the most frequent cause of death from CAP. An analysis conducted by investigators from the Mayo Clinic and Case Western Reserve, and published in Clinical Infectious Diseases, determined that the rate of mortality for patients with penicillin resistant strains of S. pneumoniae was 30% higher than in patients with penicillin susceptible strains. Over the years, the incidence of antibiotic-resistant strains of S. pneumoniae have increased, including strains resistant to currently available quinolone antibiotics, and these resistant strains have been encountered in both community and hospital settings.
|
Complete the current Phase 2 clinical trial for the treatment of CAP in the second quarter of 2012; |
|
Obtain top line results from this Phase 2 trial by June 30, 2012; |
|
Complete one Phase 1 study of an intravenous formulation of PB-101 by the end of the first quarter of 2012; and |
|
Conduct Phase 3 trials for the treatment of CAP, Acute Bacterial Exacerbation of Chronic Bronchitis (ABECB), and Acute Bacterial Sinusitis (ABS) and obtain regulatory approvals for the treatment of CAP, ABECB, and ABS in the United States and European Union. |
intravenous dosing. We licensed PB-200a from UCB Celltech, a United Kingdom corporation and a registered branch of UCB Pharma S.A., referred to herein as UCB. Under our license agreement with UCB, we hold worldwide development and commercialization rights for a platform of aniline derivative compounds including PB-200a for all fields of use.
|
Complete chemical optimization by the end of the third quarter of 2011. |
Securities
offered by us |
4,000,000 shares of common stock. |
|||||
Common stock
to be outstanding after this offering |
6,690,039 shares. |
|||||
Warrants to be
outstanding after this offering |
Noteholder Warrants, PCP Warrants, Placement Agent Warrants, Consultant Warrants, and the underwriters warrants. See Description
of Capital Stock on page 92 for more information. |
|||||
Over-allotment
option |
We
granted the underwriters the right to purchase up to additional shares of common stock from us at the public offering price, less the underwriting
discount, within 45 days from the date of this prospectus to cover over-allotments, if any. |
|||||
Use of
proceeds |
We
estimate that our net proceeds from this offering, without exercise of the over-allotment option, will be approximately $ 17.2 million. We
intend to use these proceeds as follows: (i) approximately $ 11.8 million for PB-101 development; (ii) approximately
$ 800,000 for PB-200a development; (iii) approximately $325,000 to repay the IDB Bank line of credit; and (iv) the balance
to fund working capital and other general corporate purposes. See Use of Proceeds on page 25 for more
information. |
|||||
Market for our
common stock |
We
applied for listing our common stock on NYSE Amex under the symbol IASO. |
|||||
Risk Factors
|
Investing in our common stock involves a high degree of risk. As an investor, you should be able to bear a complete loss of your investment.
You should carefully consider the information set forth in the Risk Factors section beginning on page 9 . |
|
1,500 shares of common stock issuable upon exercise of outstanding options at a weighted average exercise price of $ 45.60 per share; |
|
1,498,500 shares of common stock reserved for issuance under our Amended and Restated 2007 Stock Incentive Plan, including shares of common stock issuable upon exercise of options to be granted to our Chief Executive Officer, our Chief Financial Officer, our Director of New Product Development and our Vice President of Regulatory Affairs upon completion of this offering representing 5%, 2%, 1% and 1%, respectively, of the common stock outstanding upon completion of this offering on a fully diluted basis, and options to be granted to our non-employee directors upon completion of this offering representing a total of 1.25% of the common stock outstanding upon completion of this offering on a fully diluted basis; |
|
6,250 shares of common stock issuable upon exercise of the Feldman Consultant Warrant at an exercise price of $ 45.60 per share, which is currently exercisable; |
|
2,083 shares of common stock issuable upon exercise of the Hofer Consultant Warrant; |
|
92,050 additional shares of common stock issuable upon exercise of the Hofer Consultant Warrant as a result of anti-dilution adjustments in connection with the completion of this offering |
|
9,042 shares of common stock issuable upon exercise of the Placement Agent Warrants at an exercise price of $ 48.00 per share, which are currently exercisable; |
|
22,917 shares of common stock issuable upon exercise of the PCP Warrants issued on January 15, 2009 at an exercise price of $48.00 per share, which are currently exercisable; |
|
10,000 shares of common stock issuable upon exercise of the PCP Warrants issued on June 24, 2009; |
|
1, 494,529 shares of common stock issuable upon exercise of the Noteholder Warrants; and |
|
120,000 shares of common stock underlying the underwriters warrants. |
|
the automatic conversion of all of our outstanding convertible notes into an aggregate of 2,596,711 shares of common stock upon the completion of this offering assuming an offering price of $ 5.00 per share (the midpoint of the range listed on the cover page of this prospectus) and assuming the conversion occurs on February 15, 2011 ; |
|
the filing of our amended and restated certificate of incorporation and the adoption of our amended and restated by-laws effective upon the completion of this offering; and |
|
no exercise of warrants or options outstanding on the date of this prospectus, except as specifically set forth herein . |
Year Ended December 31, |
Nine Months Ended September 30, |
|||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2009 Restated(1) |
2008 Restated(1) |
2010 |
2009 |
Period from October 5, 2006 (Inception) to September 30, 2010 |
||||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||||||
Operating
revenue: |
||||||||||||||||||||||
Sublicense
|
$ | 6,286 | $ | | $ | 28,286 | $ | | $ | 34,572 | ||||||||||||
Operating
expenses: |
||||||||||||||||||||||
Research and
development |
2,679,323 | 3,299,632 | 2,127,578 | 646,731 | 12,703,410 | |||||||||||||||||
General and
administrative |
421,628 | 783,611 | 676,048 | 260,743 | 2,966,486 | |||||||||||||||||
Total
operating expenses |
3,100,951 | 4,083,243 | 2,803,626 | 907,474 | 15,669,896 | |||||||||||||||||
Loss from
operations |
(3,094,665 | ) | (4,083,243 | ) | (2,775,340 | ) | (907,474 | ) | (15,635,324 | ) | ||||||||||||
Interest
income |
| 21,850 | 2,067 | | 29,926 | |||||||||||||||||
Interest
expense, including amortization of debt discount and deferred financing costs |
(1,089,846 | ) | (1,115,730 | ) | (2,351,646 | ) | (802,364 | ) | (4,731,909 | ) | ||||||||||||
Net loss
|
$ | (4,184,511 | ) | $ | (5,177,123 | ) | $ | (5,124,919 | ) | $ | (1,709,838 | ) | $ | (20,337,307 | ) | |||||||
Basic and
diluted net loss per common share |
$ | ( 44.84 ) | $ | ( 55.47 ) | $ | ( 54.91 ) | $ | ( 18.32 ) | ||||||||||||||
Weighted
average common shares outstanding basic and diluted |
93,328 | 93,328 | 93,328 | 93,328 |
(1) |
We restated our statements of operations for the years ended December 31, 2009 and 2008 to reflect a correction of the classification of certain operating expenses between general and administrative expenses and research and development expenses. The restatement does not affect our total operating expenses, loss from operations or net loss or our balance sheet, statement of changes in stockholders deficiency or statement of cash flows for any period. See Note 9 to our audited financial statements, which are included elsewhere in this prospectus. |
September 30, 2010 |
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---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Actual |
Pro Forma |
Pro Forma As Adjusted |
|||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
Cash
|
$ | 252,186 | $ | 252,186 | $ | 17,452,186 | |||||||||
Total Assets
|
$ | 926,811 | $ | 278,945 | $ | 17,47 8,945 | |||||||||
Total
Liabilities |
$ | 17,083,452 | $ | 6, 8 77, 696 | $ | 6, 8 77, 696 | |||||||||
Deficit
Accumulated During the Development Stage |
$ | (20,337,307 | ) | $ | ( 31, 261, 165 | ) | $ | ( 31, 261, 165 | ) | ||||||
Total
Stockholders Equity (Deficiency) |
$ | (16,156,641 | ) | $ | (6,245,945 | ) | $ | 10,954,055 |
|
pertain to the maintenance of records that accurately and fairly reflect our transactions and dispositions of our assets; |
|
provide reasonable assurance that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and |
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. |
|
limit access to the accounting and information systems and related data to strengthen segregation of duties; |
|
upgrade our accounting software system; and |
|
implement procedures and controls in the financial statement close process to improve the accuracy and timeliness of the preparation of quarterly and annual financial statements. |
and reliable financial information, and to effectively prevent fraud. Additionally, such failure could cause investors to lose confidence in our reported financial information, which could have a negative impact on our financial condition and stock price.
|
delays in product development, clinical testing, or manufacturing; |
|
unplanned expenditures in product development, clinical testing, or manufacturing; |
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failure to receive regulatory approvals; |
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emergence of superior or equivalent products; |
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inability to manufacture our product candidates on a commercial scale on our own, or in collaboration with third parties; and |
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failure to achieve market acceptance. |
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inability to manufacture sufficient quantities of qualified materials under the FDAs current Good Manufacturing Practices, referred to herein as cGMP, for use in clinical trials; |
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failure to recruit a sufficient number of patients or slower than expected rates of recruitment; |
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modification of clinical trial protocols; |
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changes in regulatory requirements for clinical trials; |
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lack of effectiveness during clinical trials; |
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emergence of unforeseen safety issues in preclinical or clinical trials; |
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delays, suspension, or termination of clinical trials by the institutional review board responsible for overseeing the study at a particular study site; and |
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government or institutional review board or other regulatory delays or clinical holds requiring suspension or termination of the trials. |
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perceptions by members of the health care community, including physicians, about the safety and effectiveness of our products; |
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cost-effectiveness of our products relative to competing products; |
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availability of reimbursement for our products from government or other healthcare payors; and |
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effective marketing and distribution efforts by us and our licensees and distributors, if any. |
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developing drugs; |
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undertaking pre-clinical testing and human clinical trials; |
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obtaining FDA and other regulatory approvals of drugs; |
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formulating and manufacturing drugs; and |
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launching, marketing and selling drugs. |
development, but we may be unable to obtain commercially reasonable product liability insurance for any products approved for marketing.
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U.S. Registration Nos. 6,313,299 and 6,552,196 and European Registration No. 0994878 (each expiring June 2018) for a family of patents relating to PB-101; and |
|
U.S. Registration Nos. 7,678,785 (expiring July 2027) and 7,105,554 (expiring July 2022) and European Registration No. 1313471 (expiring August 2021) for a family of patents relating to our PB-200 antifungal platform, including PB-200a. |
|
Patents that may be issued or licensed may be challenged, invalidated, or circumvented, or otherwise may not provide any competitive advantage. |
|
Our competitors, many of which have substantially greater resources than us and many of which have made significant investments in competing technologies, may seek, or may already have obtained, patents that will limit, interfere with, or eliminate our ability to make, use, and sell our potential products either in the United States or in international markets. |
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There may be significant pressure on the United States government and other international governmental bodies to limit the scope of patent protection both inside and outside the United States for treatments that prove successful as a matter of public policy regarding worldwide health concerns. |
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Countries other than the United States may have less restrictive patent laws than those upheld by United States courts, allowing foreign competitors the ability to exploit these laws to create, develop, and market competing products. |
out of patents and pending applications of our competitors, or additional proceedings initiated by third parties or the PTO to reexamine the patentability of our licensed or owned patents. The defense and prosecution of intellectual property suits, PTO proceedings, and related legal and administrative proceedings are costly and time-consuming to pursue, and their outcome is uncertain. Litigation may be necessary to enforce our issued patents, to protect our trade secrets and know-how, or to determine the enforceability, scope, and validity of the proprietary rights of others. An adverse determination in litigation or PTO proceedings to which we may become a party could subject us to significant liabilities, require us to obtain licenses from third parties, restrict or prevent us from selling our products in certain markets, or invalidate or render unenforceable our licensed or owned patents. Although patent and intellectual property disputes might be settled through licensing or similar arrangements, the costs associated with such arrangements may be substantial and could include our paying large fixed payments and ongoing royalties. Furthermore, the necessary licenses may not be available on satisfactory terms or at all.
|
obtain licenses, which may not be available on commercially reasonable terms, if at all; |
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abandon an infringing product candidate; |
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redesign our products or processes to avoid infringement; |
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stop using the subject matter claimed in the patents held by others; |
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pay damages; or |
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defend litigation or administrative proceedings, which may be costly whether we win or lose, and which could result in a substantial diversion of our financial and management resources. |
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We may be unable to identify manufacturers on acceptable terms or at all because the number of potential manufacturers is limited and the FDA must approve any replacement contractor. This approval would generally require new testing and compliance inspections. In addition, a new manufacturer would have to be educated in, or develop substantially equivalent processes for, production of our products after receipt of FDA approval. |
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Our third-party manufacturers might be unable to formulate and manufacture our drugs in the volume and of the quality required to meet our clinical needs and commercial needs. |
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Our future contract manufacturers may not perform as agreed or may not remain in the contract manufacturing business for the time required to supply our clinical trials or to successfully produce, store and distribute our products. |
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Drug manufacturers are subject to ongoing periodic unannounced inspection by the FDA and corresponding state agencies to ensure strict compliance with good manufacturing practice and other government regulations and corresponding foreign standards. We do not have control over third-party manufacturers compliance with these regulations and standards. |
|
If any third-party manufacturer makes improvements in the manufacturing process for our products, we may not own, or may have to share, the intellectual property rights to the innovation. |
purchase any shares in this offering. As a result, if these stockholders were to choose to act together, they would be able to exercise significant influence with respect to all matters submitted to our stockholders for approval, as well as our management and affairs. For example, these persons, if they choose to act together, will exercise significant influence with respect to the election of directors and approval of any merger, consolidation, sale of all or substantially all of our assets or other business combination or reorganization. This concentration of voting power could delay or prevent an acquisition of us on terms that other stockholders may desire. The interests of this group of stockholders may not always coincide with your interests or the interests of other stockholders, and they may act in a manner that advances their best interests and not necessarily those of other stockholders, and might affect the prevailing market price for our securities.
its affiliates or Dr. Rosenwald in the future will be made available to us. In addition, certain of our current officers and directors or certain officers or directors hereafter appointed or elected may from time to time serve as officers or directors of other biopharmaceutical or biotechnology companies. There can be no assurance that such other companies will not have interests in conflict with our own.
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prohibiting our stockholders from fixing the number of our directors; and |
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establishing advance notice requirements for stockholder proposals that can be acted on at stockholder meetings and nominations to our Board of Directors. |
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results of clinical trials of our product candidates or those of our competitors; |
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our entry into or the loss of a significant collaboration; |
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regulatory or legal developments in the United States and other countries, including changes in the healthcare payment systems; |
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variations in our financial results or those of companies that are perceived to be similar to us; |
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market conditions in the pharmaceutical and biotechnology sectors and issuance of new or changed securities analysts reports or recommendations; |
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general economic, industry and market conditions; |
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developments or disputes concerning patents or other proprietary rights; |
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future sales or anticipated sales of our securities by us or our stockholders; and |
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any other factors described in this Risk Factors section. |
the range listed on the cover page of this prospectus) and assuming the conversion occurs on February 15, 2011 ; (v) 9,042 shares of common stock issuable upon exercise of the Placement Agent Warrants at an exercise price of $48.00 per share; (vi) 22,917 shares of common stock issuable upon exercise of the PCP Warrants issued on January 15, 2009 at an exercise price of $48.00 per share, and ( vii) 10,000 shares of common stock issuable upon exercise of the PCP Warrants (assuming an offering price of $ 5.00 per share) at an exercise price equal to 110% of the offering price of the shares sold in this offering .
months after the effective date. See Description of Capital Stock on page 92 for more information on these registration rights.
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our ability to obtain additional funding to develop our product candidates; |
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the need to obtain regulatory approval of our product candidates; |
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the success of our preclinical and clinical trials through all phases of development; |
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any delays in regulatory review and approval of product candidates in clinical development; |
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our ability to commercialize our products; |
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market acceptance of our product candidates; |
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our ability to establish an effective sales and marketing infrastructure; |
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competition from existing products or new products that may emerge; |
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regulatory difficulties relating to products that have already received regulatory approval; |
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potential product liability claims; |
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our dependency on third-party manufacturers to supply or manufacture our products; |
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our ability to establish or maintain collaborations, licensing or other arrangements; |
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our ability and third parties abilities to protect intellectual property rights; |
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compliance with obligations under intellectual property licenses with third parties; |
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our ability to adequately support future growth; and |
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our ability to attract and retain key personnel to manage our business effectively. |
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Approximately $ 11.8 million for PB-101 development to include the following: |
o |
complete our Phase 2 clinical trial for the community-acquired pneumonia (CAP) indication; and |
o |
complete all pre-clinical studies and a Phase 1 study required for an intravenous formulation of PB- 101; |
|
Approximately $ 800,000 to complete chemical optimization of PB-200a ; |
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Approximately $325,000 to repay the IDB Bank line of credit; and |
|
The balance to fund working capital and other general corporate purposes, which may include the acquisition or licensing of complementary technologies, products or businesses. |
|
on an actual basis; |
|
on a pro forma basis to reflect the following: |
o |
the automatic conversion of outstanding principal and accrued interest on all of our outstanding convertible notes upon the completion of this offering and the issuance of an aggregate of 2,596,711 shares of common stock upon such conversion, assuming an offering price of $ 5. 00 per share (the midpoint of the range listed on the cover page of this prospectus) and assuming the conversion occurs on February 15, 2011 , |
o |
The issuance of Contingent Notes in an aggregate principal amount of $1,298,355 to the holders of the 10% Notes , the 8% Notes and the Paramount Notes upon the completion of this offering, assuming an offering price of $5.00 per share (the midpoint of the range listed on the cover page of this prospectus) and assuming the conversion occurs on February 15, 2011, and |
o |
the filing of our amended and restated certificate of incorporation upon completion of this offering ; and |
|
on a pro forma as adjusted basis to further reflect our sale of 4,000,000 shares in this offering, at an assumed initial public offering price of $ 5.00 per share (the mid-point of the price range set forth on the cover page of this prospectus), after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us . |
As of September 30, 2010 |
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Actual |
Pro Forma |
Pro Forma As Adjusted |
|||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
Cash
|
$ | 252,186 | $ | 252,186 | $ | 17,452,186 | |||||||||
Paramount
Notes |
1,992,205 | | | ||||||||||||
10% Notes
|
4,340,000 | | | ||||||||||||
8% Notes
|
4,343,000 | | | ||||||||||||
PCP Notes
|
2,875,000 | 2,875,000 | 2,875,000 | ||||||||||||
Contingent
Notes |
| 1,298,355 | 1,298,355 | ||||||||||||
13,550,205 | 4,173,355 | 4,173,355 | |||||||||||||
Stockholders equity (deficiency): |
|||||||||||||||
Preferred
stock, $0.001 par value; 5,000,000 shares authorized; none issued ( 5,000,000 authorized and none issued on a pro forma and pro forma as
adjusted basis) |
| | |
As of September 30, 2010 |
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Actual |
Pro Forma |
Pro Forma As Adjusted | |||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
Common stock,
$0.001 par value; 20,000,000 shares authorized; 93,328 issued and outstanding ( 50,000,000 authorized;
2,690,039 issued on a pro forma basis ; 6,690,039 issued on a pro forma as adjusted basis) |
93 | 2,690 | 6,690 | ||||||||||||
Additional
paid-in capital |
4,180,573 | 2 5, 012,529 | 42, 208,529 | ||||||||||||
Deficit
accumulated during the development stage |
(20,337,307 | ) | ( 31, 261, 1 65 | ) | ( 31, 261, 165 | ) | |||||||||
Total
stockholders equity (deficiency) |
(16,156,641 | ) | (6,245,945 | ) | 10,954,055 | ||||||||||
Total
capitalization |
$ | (2,606,436 | ) | $( 2, 072, 590 | ) | $1 5, 127, 410 |
|
1,500 shares of common stock issuable upon exercise of outstanding options at a weighted average exercise price of $ 45.60 per share; |
|
1,498,500 shares of common stock reserved for issuance under our Amended and Restated 2007 Stock Incentive Plan, including shares of common stock issuable upon exercise of options to be granted to our Chief Executive Officer, our Chief Financial Officer, our Director of New Product Development and our Vice President of Regulatory Affairs upon completion of this offering representing 5%, 2%, 1% and 1%, respectively, of the common stock outstanding upon completion of this offering on a fully diluted basis, and options to be granted to our non-employee directors upon completion of this offering representing a total of 1.25% of the common stock outstanding upon completion of this offering on a fully diluted basis; |
|
6,250 shares of common stock issuable upon exercise of the Feldman Consultant Warrant at an exercise price of $ 45.60 per share, which is currently exercisable; |
|
2,083 shares of common stock issuable upon exercise of the Hofer Consultant Warrant; |
|
92,050 additional shares of common stock issuable upon exercise of the Hofer Consultant Warrant as a result of anti-dilution adjustments in connection with the completion of this offering and the automatic conversion of our outstanding convertible notes, assuming an offering price of $ 5.00 per share (the midpoint of the range listed on the cover page of this prospectus) and assuming the conversion occurs on February 15, 2011 ; |
|
9,042 shares of common stock issuable upon exercise of the Placement Agent Warrants at an exercise price of $ 48.00 per share, which are currently exercisable; |
|
22,917 shares of common stock issuable upon exercise of the PCP Warrants issued on January 15, 2009 at an exercise price of $48.00 per share, which are currently exercisable ; |
|
10,000 shares of common stock issuable upon exercise of the PCP Warrants issued on June 24, 2009; and |
|
1, 494,529 shares of common stock issuable upon exercise of the Noteholder Warrants. |
Assumed
initial public offering price per share |
$ | 5.00 | ||||||||
Historical
net tangible book value per share as of September 30, 2010 |
$ | ( 180.06 | ) | |||||||
Increase per
share attributable to the conversion of convertible promissory notes |
177.74 | |||||||||
Increase per
share attributable to new investors in this offering |
3.96 | |||||||||
Pro forma
net tangible book value per share after this offering |
1.64 | |||||||||
Dilution per
share to new investors |
$ | 3.36 |
Shares Purchased |
Total Consideration |
Average Price per Share |
|||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Number |
Percent |
Amount |
Percent |
||||||||||||||||||||
Existing
stockholders |
93,328 | 1.4 | % | $ | 4,480 | | % | $ | 0.048 | ||||||||||||||
Existing
convertible noteholders |
2,596,711 | 38.8 | 12,983,553 | 39.4 | $5.00 | ||||||||||||||||||
New
stockholders |
4,000,000 | 59.8 | 20,000,000 | 60.6 | $ | 5.00 | |||||||||||||||||
Total
|
6,690,039 | 100.0 | % | 32,988,033 | 100.0 | % |
Affairs upon completion of this offering representing 5%, 2%, 1% and 1%, respectively, of the common stock outstanding upon completion of this offering on a fully diluted basis, and options to be granted to our non-employee directors upon completion of this offering representing a total of 1.25% of the common stock outstanding upon completion of this offering on a fully diluted basis; (iii) 6,250 shares of common stock issuable upon exercise of the Feldman Consultant Warrant at an exercise price of $ 45.60 per share; (iv) 2,083 shares of common stock issuable upon exercise of the Hofer Consultant Warrant; (v) 92,050 additional shares of common stock issuable upon exercise of the Hofer Consultant Warrant as a result of anti-dilution adjustments in connection with the completion of this offering and the automatic conversion of our outstanding convertible notes, assuming an offering price of $ 5.00 per share (the midpoint of the range listed on the cover page of this prospectus) and assuming the conversion occurs on February 15, 2011 ; (vi) 9,042 shares of common stock issuable upon exercise of the Placement Agent Warrants at an exercise price of $ 48 .00 per share; (vii) 22,917 shares of common stock issuable upon exercise of the PCP Warrants issued on January 15, 2009 at an exercise price of $48.00 per share, which are currently exercisable; (viii) 10,000 shares of common stock issuable upon exercise of the PCP Warrants issued on June 24, 2009; and (viii) 1, 494,529 shares of common stock issuable upon exercise of the Noteholder Warrants. In addition, we may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of these securities could result in further dilution to our stockholders.
Year Ended December 31, |
Nine Months Ended September 30, |
|||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2009 Restated(1) |
2008 Restated(1) |
2010 |
2009 |
Period from October 5, 2006 (Inception) to September 30, 2010 |
||||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||||||
Operating
revenue: |
||||||||||||||||||||||
Sublicense
|
$ | 6,286 | $ | | $ | 28,286 | $ | | $ | 34,572 | ||||||||||||
Operating
expenses: |
||||||||||||||||||||||
Research and
development |
2,679,323 | 3,299,632 | 2,127,578 | 646,731 | 12,703,410 | |||||||||||||||||
General and
administrative |
421,628 | 783,611 | 676,048 | 260,743 | 2,966,486 | |||||||||||||||||
Total
operating expenses |
3,100,951 | 4,083,243 | 2,803,626 | 907,474 | 15,669,896 | |||||||||||||||||
Loss from
operations |
(3,094,665 | ) | (4,083,243 | ) | (2,775,340 | ) | (907,474 | ) | (15,635,324 | ) | ||||||||||||
Interest
income |
| 21,850 | 2,067 | | 29,926 | |||||||||||||||||
Interest
expense, including amortization of debt discount and deferred financing costs |
(1,089,846 | ) | (1,115,730 | ) | (2,351,646 | ) | (802,364 | ) | (4,731,909 | ) | ||||||||||||
Net loss
|
$ | (4,184,511 | ) | $ | (5,177,123 | ) | $ | (5,124,919 | ) | $ | (1,709,838 | ) | $ | (20,337,307 | ) | |||||||
Basic and
diluted net loss per common share |
$ | ( 44.84 ) | $ | ( 55.47 ) | $ | ( 54.91 ) | $ | ( 18.32 ) | ||||||||||||||
Weighted
average common shares outstanding basic and diluted |
93,328 | 93,328 | 93,328 | 93,328 |
(1) |
We restated our statements of operations for the years ended December 31, 2009 and 2008 to reflect a correction of the classification of certain operating expenses between general and administrative expenses and research and development expenses. The restatement does not affect our total operating expenses, loss from operations or net loss or our balance sheet, statement of changes in stockholders deficiency or statement of cash flows for any period. See Note 9 to our audited financial statements, which are included elsewhere in this prospectus. |
December 31, 2009 |
December 31, 2008 |
September 30, 2010 |
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(Unaudited) | ||||||||||||||
Cash
|
$ | 10,728 | $ | 49,643 | $ | 252,186 | ||||||||
Total Assets
|
$ | 90,179 | $ | 7,218 | $ | 926,811 | ||||||||
Total
Liabilities |
$ | 13,300,944 | $ | 10,313,634 | $ | 17,083,452 | ||||||||
Deficit
Accumulated During the Development Stage |
$ | (15,212,388 | ) | $ | (11,027,877 | ) | $ | (20,337,307 | ) | |||||
Total
Stockholders Deficiency |
$ | (13,210,765 | ) | $ | (10,216,416 | ) | $ | (16,156,641 | ) |
clinical success, regulatory approval and successful commercialization of any of our products, we could generate revenue from sales or licenses of any such products.
Year Ended December 31, |
Nine Months Ended September 30, |
|||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2009 |
2008 |
2010 |
2009 |
Period from October 5, 2006 (Inception) to September 30, 2010 |
||||||||||||||||||
PB-101 |
86 | % | 95 | % | 100 | % | 72 | % | 94 | % | ||||||||||||
PB-200a |
14 | % | 5 | % | * | 28 | % | 5 | % | |||||||||||||
PB-201 |
* | * | * | * | 1 | % |
|
The duration of clinical trials may vary substantially according to the type, complexity and novelty of the product candidate. |
|
The FDA imposes substantial requirements on the introduction of therapeutic pharmaceutical products, typically requiring lengthy and detailed laboratory and clinical testing procedures, sampling activities and other costly and time-consuming procedures. |
|
Data obtained from nonclinical and clinical activities at any step in the testing process may be adverse and lead to discontinuation or redirection of development activity. Data obtained from these activities also are susceptible to varying interpretations, which could delay, limit or prevent regulatory approval. |
|
The duration and cost of discovery, nonclinical studies and clinical trials may vary significantly over the life of a product candidate and are difficult to predict. |
|
The costs, timing and outcome of regulatory review of a product candidate. |
|
The emergence of competing technologies and products and other adverse market developments. |
|
the number of sites included in the trials; |
|
the length of time required to enroll eligible patients; |
|
the number of patients that participate in the trials; |
|
the number of doses that patients receive; |
|
the drop-out or discontinuation rates of patients; |
|
the duration of patient follow-up; |
|
the phase of development the product candidate is in; and |
|
the efficacy and safety profile of the product candidate. |
research and development expenses. The restatement does not affect our total operating expenses, loss from operations or net loss or our balance sheet, statement of changes in stockholders deficiency or statement of cash flows for any period. See Note 9 to our audited financial statements, which are included elsewhere in this prospectus.
2008. The decrease was primarily attributable to the departure of Matthew Wikler, in January 2009, who rejoined us as our President and Chief Executive Officer and director effective as of February 28, 2010, and the expiration of the lease related to our previous office space.
Source |
Amount Raised ($) (1) |
Principal and Interest Outstanding as of September 30, 2010 |
Shares of Common Stock Issuable Upon Conversion (Upon Completion of the Offering) (2) |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
10% Notes
|
$ | 4,340,000 | $ | 5,562,979 | 1,145,146 | shares | ||||||||
8% Notes
|
3,343,000 | (3) | 4,562,210 | 938,500 | shares | |||||||||
PCP Notes
|
2,875,000 | 3,080,811 | | |||||||||||
Paramount
Notes |
||||||||||||||
PBS Note
|
2,282,205 | (4) | 1,615,172 | 330,7 28 | shares | |||||||||
Family Trusts
Note |
660,000 | 833,252 | 170,6 10 | shares | ||||||||||
Capretti Note
|
50,000 | 57,134 | 11, 727 | shares | ||||||||||
Totals
|
$ | 13,550,205 | $ | 15,711,558 |
(1) |
Represents gross proceeds. |
(2) |
Assumes an initial public offering price of $ 5.00 per share (the mid-point of the price range set forth on the cover page of this prospectus) and assumes that the conversion occurs on February 15 , 201 1 . |
(3) |
Does not include the 8% Note in the principal amount of $1,000,000 we issued to PBS upon the conversion of $1,000,000 of the principal amount outstanding under the PBS Note in connection with the 8% Notes financing. |
(4) |
As described in note 3 above, pursuant to the terms of the PBS Note, $1,000,000 of the principal amount outstanding under the PBS Note converted into an 8% Note in February 2010 in connection with the 8% Notes financing. |
Qualified Financing (as defined below), and (iii) the completion of a Reverse Merger (as defined below). The PCP Notes accrue interest at the rate of 10% per annum. The aggregate amount of accrued and unpaid interest under the PCP Notes as of September 30, 2010 was $205,811.
such, in February 2010, we issued PBS an 8% Note in the aggregate principal amount of $1,000,000. In connection with the issuance of such 8% Note, we also issued to PBS the related 8% Noteholder Warrant. From December 1, 2006 through September 30, 2010, certain trusts established for the benefit of Dr. Rosenwalds children (the Family Trusts) had loaned us an aggregate principal amount of $660,000 pursuant to a future advance promissory note dated December 1, 2006, amended on September 28, 2007, and amended and restated on September 30, 2009 (the Family Trusts Note). From December 18, 2008 through September 30, 2010, Capretti Grandi, LLC (Capretti), an investment partnership of which Dr. Rosenwald is the managing member, had loaned us an aggregate principal amount of $50,000 pursuant to a future advance promissory note dated December 18, 2008 and amended and restated on September 30, 2009 (the Capretti Note, and together with the PBS Note and the Family Trusts Note, the Paramount Notes). The Paramount Notes are unsecured obligations of ours and accrue interest at the rate of 8% per annum. As of September 30, 2010, $1,615,172, including accrued and unpaid interest, was outstanding under the PBS Note, $833,252, including accrued and unpaid interest, was outstanding under the Family Trusts Note, and $57,134, including accrued and unpaid interest, was outstanding under the Capretti Note. In the event the Paramount Notes become due and payable prior to the consummation by us of a Qualified Financing, reverse merger, sale of the company or other transaction, we will be obligated to pay the noteholders, in addition to the payment of the unpaid principal amount and all accrued but unpaid interest, a cash premium equal to 42.8571% of the aggregate principal amount of the Paramount Notes. Pursuant to extension agreements dated as of September 16, 2010, we extended the maturity date of each of the Paramount Notes from September 30, 2010 to December 31, 2010 and pursuant to amendment agreements dated as of December 23, 2010, we further extended the maturity date to March 31, 2011.
Notes and the Paramount Noteholder Warrants to be issued to the holders of the Paramount Notes upon the consummation of this offering.
discount of $235,464 and amortization of stock-based compensation of $49,247, as well as a net increase in deferred revenue of $653,714 relating to payments we received under a sublicense agreement, which were substantially offset by a decrease in accounts payable and accrued expenses of $1,418,979, which was primarily attributable to license fees and milestone payments to Dong Wha that were accrued in 2008 but were paid in January 2009.
|
Approximately $ 11.8 million for PB-101 development to include the following: |
o |
complete our Phase 2 clinical trial for the community-acquired pneumonia (CAP) indication; and |
o |
complete all pre-clinical studies and a Phase 1 study required for an intravenous formulation of PB-101 ; |
|
Approximately $ 800,000 to complete chemical optimization of PB-200a. |
|
Approximately $325,000 to repay the IDB Bank line of credit; and |
|
The balance to fund working capital and other general corporate purposes, which may include the acquisition or licensing of complementary technologies, products or businesses. |
upfront license fee of $100,000. In addition, we are required to make substantial payments, up to an additional $12,000,000 in total, to UCB upon the achievement of certain clinical and regulatory-based milestones. In the event that PB-200a or another covered compound is commercialized, we and our sublicensees are obligated to pay to UCB annual royalties equal to a percentage of net sales in the single-digit range. We are also obligated to pay to UCB an annual license maintenance fee of $100,000, which is creditable against royalties otherwise due to the licensor. The license agreement terminates on the expiration of our obligation to pay royalties to UCB, unless earlier terminated in accordance with the terms of the license agreement. The license agreement may be terminated by us, in our sole discretion, upon 30 days prior written notice to UCB. The license agreement may be terminated by UCB immediately upon any material breach and/or any breach capable of remedy by us if we have not cured such remediable breach within 90 days after notice thereof by UCB requiring its remedy or any breach of any representation or warranty given by us to UCB.
historical experience and on various other assumptions that we believe to be reasonable under the circumstances. These estimates and assumptions form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates.
Year Ended December 31, |
Nine Months Ended September 30, |
|||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2009 |
2008 |
2007 |
2010 |
|||||||||||||||
Risk-free
interest rate |
3.39 | % | 2.80 | % | 3. 45% 4.22 | % | 2.28% 2.32 | % | ||||||||||
Expected
volatility |
110.0 | % | 90 | % | 80.0% 90.0 | % | 100.0% 110.0 | % | ||||||||||
Expected
term of options and warrants |
5 | 5 | 5 7 | 5 | ||||||||||||||
Expected
dividend yield |
0 | % | 0 | % | 0 | % | 0 | % |
Issuance / Grant Date |
No. of
Shares / Shares Underlying Options/ Warrants |
Sales
Price / Exercise Price |
Estimated Fair Value Per Share of Common Stock at Issuance / Grant Date(1) |
Estimated Fair Value Per Option/ Warrant at Issuance/ Grant Date |
Intrinsic Value at Issuance / Grant Date(2) |
|||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Common
Stock |
||||||||||||||||||||||
3/21/2007
|
93,245 | (3) | $ | 0.048 | $ | 0.048 | $ | | $ | | ||||||||||||
4/16/2007
|
83 | (3) | 0.048 | 0.048 | | |
Issuance / Grant Date |
No. of
Shares / Shares Underlying Options/ Warrants |
Sales
Price / Exercise Price |
Estimated Fair Value Per Share of Common Stock at Issuance / Grant Date(1) |
Estimated Fair Value Per Option/ Warrant at Issuance/ Grant Date |
Intrinsic Value at Issuance / Grant Date(2) | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Stock Option s |
||||||||||||||||||||||
9/27/2007
|
1,500 | (4) | 45.60 | 56.64 | 42.43 | (4) | 11.04 | |||||||||||||||
2/21/2008
|
917 | ( 5) | 45.60 | 34.08 | 22.56 | (5) | | |||||||||||||||
Warrants |
||||||||||||||||||||||
9/27/2007
|
6,250 | (6) | 45.60 | 56.64 | 42.43 | ( 6) | 11.04 | |||||||||||||||
12/14/2007
|
9,042 | ( 7) | 48.00 | 43.68 | 32.11 | (7) | | |||||||||||||||
1/15/2009
|
22,917 | ( 8) | 48.00 | 45.12 | 35.62 | (8) | N/A | |||||||||||||||
6/24/2009
|
( 9) | ( 9) | 44.64 | (9) | N/A | |||||||||||||||||
2/09/2010
|
( 10) | ( 10) | 25.92 | 18.72 | N/A | |||||||||||||||||
3/01/2010
|
( 10) | ( 10) | 25.92 | 19.25 | (10) | N/A | ||||||||||||||||
5/26/2010 |
2,083 | (11) | (11) | (11) | (11) | N/A |
(1) |
All determinations of estimated fair value of our common stock were made by us, retrospectively, utilizing the market approach which uses direct comparisons to other enterprises and their equity securities to estimate the fair value of the common shares of privately issued securities, as described in more detail below. |
(2) |
Intrinsic value reflects the amount by which the estimated fair value of the common stock (as of the issuance/grant date) exceeds the exercise price of the stock option or warrant. Items in this column marked N/A represent equity instruments for which the intrinsic value was not determinable as of the issuance/grant date because the exercise price of such instrument was not known at the issuance/grant date. |
(3) |
Represents founder shares of common stock issued for cash. Our estimated fair value per share for these share issuances was equal to par value since this was the Companys initial capitalization. |
(4) |
Represents options granted to Mark Lotz, our Vice President of Regulatory Affairs. We estimated the fair value of the these options as of the date of grant using the Black-Scholes option pricing model and the following assumptions: (i) a risk-free interest rate of 4.22%; (ii) an expected volatility of 90.0%; (iii) an expected term of five years; and (iv) an expected dividend yield of 0%. We recorded the fair value of these options to compensation expense, which was amortized over the vesting period of the options. |
(5) |
Represents options granted to former employees in February 2008. These options were forfeited in accordance with their terms upon the termination of these employees during 2008. We estimated the fair value of these options as of the date of grant using the Black-Scholes option pricing model and the following assumptions: (i) a risk-free interest rate of 2.80%; (ii) an expected volatility of 90.0%; (iii) an expected term (contractual term) of five years; and (iv) an expected dividend yield of 0%. We recorded the fair value of these options to compensation expense, which was amortized over the vesting period of these options. |
(6) |
Represents the Feldman Consultant Warrant issued to Robert Feldman, a former employee of Paramount BioCapital, Inc., as described under Description of Capital Stock Currently Outstanding Warrants Consultant Warrants. We estimated the fair value of the Feldman Consultant Warrant using the Black-Scholes option pricing model and the following assumptions: (i) a risk-free interest rate of 4.22%; (ii) an expected volatility of 90.0%; (iii) an expected term (contractual term) of five years; and (iv) an expected dividend yield of 0%. We recorded the fair value of the Feldman Consultant Warrant as compensation expense to a non-employee, and because the Feldman Consultant Warrant was issued to Mr. Feldman as compensation for consulting services he provided in connection with the in-licensing of certain product candidates, such compensation expense was included in research and development expense for the relevant periods. |
( 7) |
Represents the Placement Agent Warrant issued to Paramount BioCapital, Inc. as partial compensation for its services as lead placement agent in connection with the offering of the 10% Notes, as described under Description of Capital Stock Currently Outstanding Warrants Placement Agent Warrant . Because a Qualified Financing did not take place by December 14, 2009, the Placement Agent Warrant became exercisable on such date into 9,042 shares of common stock at a per share exercise price of $48.00; however, due to the contingent exercisability of the Placement Agent Warrant at the time it was issued, the number of shares issuable upon exercise and the exercise price of this warrant could not be determined as of the issuance date. We estimated the fair value of the Placement Agent Warrant at $290,310 using the Black-Scholes option pricing model, assuming that the Placement Agent Warrant was presently exercisable in the aggregate for that number of shares of the Companys common stock equal to 10% of the aggregate purchase price of the 10% Notes (or $434,000), divided by $48.00, at an exercise price of $48.00, and the following additional assumptions: (i) a risk-free interest rate of 3. 88%; (ii) an expected volatility of 80.0%; (iii) an expected term (contractual term) of seven years; and (iv) an expected dividend yield of 0%. We recorded the value of the Placement Agent Warrant as deferred financing costs, which was amortized to interest expense over the term of the 10% Notes. |
( 8) |
Represents the PCP Warrants issued on January 15, 2009 to PCP, an affiliate of Paramount BioCapital, Inc., as described above under Liquidity and Capital Resources Sources of Liquidity PCP Notes. Because a Qualified Financing did not take place by January 15, 2011, th is PCP Warrant became exercisable on such date into 22,917 shares of common stock at a per share exercise price of $ 48.00; however, due to the contingent exercisability of this PCP Warrant at the time it was issued, the number of shares issuable upon exercise and the exercise price of this PCP Warrant could not be determined as of the issuance date. We estimated the fair value of this PCP Warrant at $868,024 using the Black-Scholes option pricing model, assuming that this PCP Warrant was presently exercisable in the aggregate for that number of shares of the Companys common stock equal to 40% of the principal amount of the PCP Note issued on January 15, 2009 (or $1,100,000), divided by $48.00, at an exercise price of $48.00, and the following additional assumptions: (i) a risk-free interest rate of 3.39%; (ii) an expected volatility of 110.0%; (iii) an expected term (contractual term) of five years; and (iv) an expected dividend yield of 0%. We recorded the fair value of this PCP Warrant as debt discount, which is amortized to interest expense over the term of the PCP Note issued on January 15, 2009. |
(9) |
Represents the PCP Warrants issued on June 24, 2009 to PCP, as described above under Liquidity and Capital Resources Sources of Liquidity PCP Notes. Due to the contingent exercisability of this PCP Warrant, the number of shares issuable upon exercise, the exercise price per share and the intrinsic value, if any, of this PCP Warrant could not be determined. We estimated the fair value of this PCP Warrant as of the date of issuance at $39,456 using the Black-Scholes option pricing model, assuming that this PCP Warrant was presently exercisable in the aggregate for that number of shares of the Companys common stock equal to 40% of the principal amount of the PCP Note issued on June 24, 2009 (or $50,000), divided by $48.00, at an exercise price of $48.00, and the following additional assumptions: (i) a risk-free interest rate of 3.39%; (ii) an expected volatility of 110.0%; (iii) an expected term (contractual term) of five years; and (iv) an expected dividend yield of 0%. We recorded the fair value of this PCP Warrant as debt discount, which is amortized to interest expense over the term of the PCP Note issued on June 24, 2009. |
(10) |
Represents the 8% Noteholder Warrants, as described above under Liquidity and Capital Resources Sources of Liquidity 8% Notes. Due to the contingent exercisability of the 8% Noteholder Warrants, the number of shares issuable upon exercise, the exercise price per share and the intrinsic value, if any, of the 8% Noteholder Warrants could not be determined. We estimated the fair value of the 8% Noteholder Warrants issued on February 9, 2010 at $1,810,386 and the 8% Noteholder Warrants issued on March 1, 2010 at $362,599 using the Black-Scholes option pricing model, assuming that the warrants were presently exercisable in the aggregate for that number of shares of the Companys common stock equal to 70% of the principal amount of the 8% Notes (or $3,040,100), divided by $48.00, at an exercise price of $48.00, and the following additional assumptions: (i) a risk-free interest rate of 2.32% ( 2.28% for the warrants issued on March 1, 2010); (ii) an expected volatility of 110.0% (100.0% for warrants issued on March 1, 2010); (iii) an expected term (contractual term) of five years; and (iv) an expected dividend |
yield of 0%. The Company recorded the fair value of the 8% Noteholder Warrants as debt discount, which are amortized to interest expense over the term of the 8% Notes. |
(11) |
Represents the Hofer Consultant Warrant issued to Timothy Hofer, an employee of Paramount BioCapital, Inc. and our Corporate Secretary, as described under Description of Capital Stock Currently Outstanding Warrants Consultant Warrants . Due to the contingent exercisability of the Hofer Consultant Warrant, the number of shares issuable upon exercise, the exercise price per share and the intrinsic value, if any, of the Hofer Consultant Warrant could not be determined. In addition, because the Hofer Consultant Warrant does not provide for a specific exercise price in the event a Qualified Financing is not consummated, we could not estimate the fair value of the Hofer Consultant Warrant. Upon the consummation of this offering, we will estimate the fair value of the Hofer Consultant Warrant and we will record such amount as compensation expense. |
Valuation Date |
Method for Derivation of Enterprise Value |
Transaction |
Trended From |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
9/27/2007 |
Trended
Using Guideline Company Analysis |
|
12/14/07 |
|||||||||||
12/14/2007 |
Transaction |
10%
Notes |
|
|||||||||||
2/21/2008 |
Trended
Using Guideline Company Analysis |
|
12/14/07 |
|||||||||||
1/15/2009 |
Transaction |
PCP Notes
& Warrants |
|
|||||||||||
6/24/2009 |
Trended
Using Guideline Company Analysis |
|
1/15/09 |
|||||||||||
2/9/2010 |
Transaction |
8% Notes
& Warrants |
|
|||||||||||
3/1/2010 |
Trended
Using Guideline Company Analysis |
|
2/9/10 |
lattice model. The binomial lattice model provides a quantitative method to estimate the relative values of securities in a companys capital structure, including its common stock, based on the implied enterprise value from a financing transaction undertaken by us.
resulted in a change in excess of 10 percent in the present value of the aggregate cash flows associated with the applicable notes. Accordingly, no charge has been recognized for debt modifications.
Product |
Intended Indication |
Status of Programs |
Commercial Rights |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
PB-101
(zabofloxacin) |
Treatment of Community Acquired Bacterial Respiratory Infections (Pneumonia, Bronchitis, Sinusitis) |
Three
Phase 1 trials completed, including thorough QT study. Phase 2 trial for CAP initiated in March 2010 |
All
countries of the world other than Australia, New Zealand, India, Japan, Korea, China, Taiwan, Singapore, Indonesia, Thailand, Malaysia, Vietnam and
Hong Kong |
|||||||||||
PB-200a |
Treatment of Systemic Infections Caused by Candida and Aspergillus |
Currently in chemical optimization |
Worldwide |
|
Two Phase 1 studies conducted in healthy volunteers |
|
IND filed with the FDA |
|
Phase 1 QT study completed in December 2009 |
|
Phase 2 clinical trial for the CAP indication initiated in March 2010 |
|
Complete one Phase 2 clinical trial for the treatment of CAP. This trial was initiated in March 2010 and we anticipate having data from this study in the second quarter of 2012; |
|
Complete one Phase 1 study of an intravenous formulation of PB-101 by the end of the first quarter of 2012; and |
|
Conduct Phase 3 trials for the treatment of CAP, Acute Bacterial Exacerbation of Chronic Bronchitis (ABECB), and Acute Bacterial Sinusitis (ABS) and obtain regulatory approvals for the treatment of CAP, ABECB, and ABS in the United States and European Union. We will require additional funds to conduct these Phase 3 trials and obtain these regulatory approvals. |
|
Complete chemical optimization by the end of the third quarter of 2011. |
evaluation. However, our study design work and regulatory filing preparation is performed primarily by our internal personnel although we engage consultants to ensure that our studies are compatible with expected regulatory requirements and our filings are made in accordance with applicable regulations. In addition, we intend to carry out clinical trial supervision on our own, as is the case with our Phase 2 CAP trial, but we may engage clinical research organizations to act as an intermediary between us and certain trial sites under certain circumstances, particularly for foreign trial sites.
|
Potency: The potency of an antimicrobial is measured by determining how much of the antimicrobial is required to inhibit the growth or kill the microorganism of interest. This amount can be determined either by in vitro testing, which is conducted in a controlled environment, or by in vivo testing, which is conducted in living animals. The less of an antimicrobial that is required to inhibit the growth or kill the microorganism, the more potent the antimicrobial. |
|
Ability to Kill Versus Inhibit Bacterial Growth: Through both in vitro and in vivo testing, one can determine whether an antimicrobial will kill the microorganism or just inhibit the growth of the organism. Generally, physicians prefer antimicrobials that kill the organism. These drugs are called cidal drugs. In addition, it is also known that some cidal antimicrobials work more quickly in causing death of the microorganism. |
|
Development of Resistance: Much of the resistance problems of today are the result of the over-utilization of drugs that may stimulate resistance, and the inappropriate dosing of an antimicrobial. It is possible to experimentally determine the likelihood of the development of resistance when an antimicrobial is used, and to potentially optimize dosing to minimize the development of resistance. |
|
Pharmacokinetic/Pharmacodynamic (PK/PD) Profile: For most classes of currently available antimicrobials, much is known about what drug concentration profiles are predictive of a |
successful outcome. For example, for some classes of antimicrobials, if the drug concentrations remain above the minimum inhibitory concentration required to inhibit the growth of the microorganism being treated for a target percent of the dosing interval, then there is a very high likelihood of a successful result. By understanding the relevant PK/PD target required for the antimicrobial being developed, utilizing data from animal studies, and utilizing human data on blood/tissue concentrations obtained, one can determine the required dose and frequency likely to result in successful outcomes. |
|
Dosing Convenience Factors: Dosing convenience factors include the frequency of dosing, duration of treatment, and mode of administration of the antimicrobial. Generally, the less frequently an antimicrobial needs to be administered or taken, the better, as less frequent dosing improves patient compliance in the outpatient setting, and decreases the amount of nursing time and time that an intravenous line is utilized for inpatients. Less frequent dosing also lessens the opportunity for potential missed doses. In the outpatient setting, having an oral formulation is critically important, including liquid formulations, dissolvable sachets, and/or chewable tablets for the treatment of children. Ideally, an antimicrobial that can provide similar drug levels when administered by either an oral or intravenous route is preferable. An antibiotic with this profile allows a patient that requires hospitalization and initial treatment with an intravenous antimicrobial to be easily transitioned to an equivalent oral drug and discharged from the hospital sooner. The required duration of therapy is also an important consideration. Some classes of antimicrobials are known to kill organisms quickly, compared to other classes. If one can more quickly kill these organisms and reduce their numbers, a shorter course of therapy could be possible. |
|
Safety and Tolerability: The safety of an antimicrobial is determined through the evaluation of any changes in laboratory tests and physical signs and symptoms than can be possibly attributed to the use of the antimicrobial. Much of this information is gathered during the clinical development of a drug, as well as during post-marketing surveillance of safety. Tolerability factors tend to be noted by the patient, such as nausea, vomiting, headache, or other discomfort. For an antimicrobial to be accepted by the physician, the safety and tolerability profile must be appropriate relative to the seriousness of the infection being treated and other effective alternatives. |
|
Demonstrates good microbiologic spectrum |
|
Allows for once daily dosing |
|
Kills bacteria and does so quickly |
|
Has a well characterized PK/PD profile, allowing for selection of efficacious dosage |
|
Has well characterized chemical properties which aid in development, allowing us to mitigate toxicity risks |
|
Currently available quinolones (e.g. levofloxacin, moxifloxacin): As discussed below, in preclinical studies, PB-101 has exhibited more potency against S. pneumoniae than these currently available respiratory quinolone antibiotics. |
|
Macrolides (e.g. azithromycin, clarithromycin): Preclinical data indicates that PB-101 is more potent against both S. pneumoniae and H. influenzae than macrolides. There is a high incidence of S. pneumoniae strains that are resistant to the macrolides, and in many parts of the country these rates are so high as to make these drugs poor choices for the treatment of these infections. |
|
Beta-Lactams (e.g. penicillin, ampicillin, cephalosporins): Preclinical studies also have shown that PB-101 is more potent against S. pneumoniae, including those strains that are resistant to this class of drugs. In addition, due to the pharmacokinetic properties of beta-lactams and their chemical structures, they generally need to be taken numerous times per day, and there are not equivalent intravenous and oral formulations which would allow for convenient transition for hospitalized patients. This class of drugs is also not active against the so-called atypical bacteria (i.e. M. pneumoniae, C. pneumoniae, L. pneumophila) which frequently cause respiratory infections. |
the compound was mutagenic in the cells tested. The chromosome aberration test was employed to evaluate whether PB-101 causes structural chromosome aberrations in cultured mammalian cells, in this case from the Chinese hamster lung cell line. PB-101 was found to cause structural aberrations in these cells only at concentrations that are significantly higher than the anticipated therapeutic concentration.
male adult subjects ranging in age from 19 to 45 years were enrolled and completed the clinical phase of the study. All 24 subjects were included in the safety assessment. Pharmacokinetic assessments were performed on the 18 subjects who received zabofloxacin.
|
One Phase 1 study of an intravenous formulation; |
|
One Phase 1 study to determine dosing in renally impaired subjects; |
|
Two Phase 3 trials of Community Acquired Pneumonia; |
|
One Phase 3 trial of Acute Bacterial Exacerbation of Chronic Bronchitis; and |
|
Two Phase 3 trials of Acute Bacterial Sinusitis. |
characteristics of the currently marketed GSIs (i.e. echinocandins), but will be available both intravenously and orally. If we are successful in developing an approved oral dosage form of PB-200a, it would allow physicians to prescribe this class of drugs for both intravenous and oral use for the first time.
|
Medicinal chemistry work to optimize the compound for fungicidal activity and solubility; |
|
In vitro studies to characterize the activity of the compound against a large number of clinically relevant fungal isolates; |
|
In vivo animal studies to better define the antifungal activity of the compound; and |
|
Pre-clinical toxicology studies (in vitro and in vivo). |
carry out clinical trial supervision on our own, as is the case with our Phase 2 CAP trial for PB-101. Depending on the circumstances, however, we may engage clinical research organizations to act as an intermediary between us and certain trial sites, particularly for foreign trial sites. In addition, we engage contract research organizations to assist us with such tasks as data management, statistical analysis and evaluation of the data obtained from our clinical trials.
Product (Brand Name) |
Manufacturer |
|||||
---|---|---|---|---|---|---|
Levofloxacin
(Levaquin®) |
Ortho-McNeil-Janssen |
|||||
Moxifloxacin
(Avelox®) |
Bayer |
|||||
Gemifloxacin
(Factive®) |
Cornerstone Therapeutics |
were not as well defined or sophisticated as they are today. Current pharmacodynamic models, having the benefit of 15 years of experience working with this class of antibiotics, are very highly predictive in determining dosing regimens that will result in a successful clinical outcome and decrease the likelihood of development of resistant strains. We have conducted numerous pharmacodynamic studies, and based upon these studies believe that the dosing regimens selected for our Phase 2 study have a high probability of resulting in positive clinical outcomes.
Product (Brand Name) |
Manufacturer |
|||||
---|---|---|---|---|---|---|
Caspofungin
(Cancidas®) |
Merck Sharp & Dohme |
|||||
Micafungin
(Mycamine®) |
Astellas Pharma |
|||||
Anidulafungin
(Eraxis®) |
Roerig |
|
pre-clinical laboratory and animal tests performed under the FDAs Good Laboratory Practices regulations, referred to herein as GLP; |
|
submission to the FDA of an IND, which must become effective before human clinical trials may commence; |
|
human clinical studies performed under the FDAs Good Clinical Practices regulations, to evaluate the drugs safety and effectiveness for its intended uses; |
|
FDA review of whether the facility in which the drug is manufactured, processed, packed, or held meets standards designed to assure the products continued quality; and |
|
submission of a marketing application to the FDA, and approval of the application by the FDA. |
animal models to demonstrate the activity of the compound against the targeted disease or condition and to assess the apparent effects of the new product candidate on various organ systems, as well as its relative therapeutic effectiveness and safety. An IND must be submitted to the FDA and become effective before studies in humans may commence.
products. These fees can be significant. For fiscal year 2010, the NDA review fee alone is $1,405,500, although certain limited deferral, waivers, and reductions may be available.
Jurisdiction |
Patent Number/ Registration Number |
Expiration Date |
Related Product Candidate |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
U.S. |
6,313,299 |
June 26, 2018 |
PB-101 |
|||||||||||
U.S. |
6,552,196 |
June 26, 2018 |
PB-101 |
|||||||||||
Europe |
0994878 |
June 26, 2018 |
PB-101 |
|||||||||||
U.S. |
7,678,785 |
July 24, 2027 |
PB-200a |
|||||||||||
U.S. |
7,105,554 |
July 1, 2022 |
PB-200a |
|||||||||||
Europe |
1313471 |
August 30, 2021 |
PB-
200a |
Zealand, India, Japan, Korea, China, Taiwan, Singapore, Indonesia, Thailand, Malaysia, Vietnam and Hong Kong. As consideration in part for the aforementioned rights to PB-101, we paid to Dong Wha an upfront license fee of $1,500,000, as well as additional license fees totaling $2,250,000 and are required to make substantial payments, up to an additional $53,500,000 in total, to Dong Wha upon the achievement of certain net sales, clinical and regulatory-based milestones. In the event that PB-101 is commercialized, we are obligated to pay to Dong Wha annual royalties equal to 10% of net sales . In the event that we sublicense PB-101 to a third party, we are obligated to pay to Dong Wha a portion of the royalties, sublicensing fees or other lump sum payments we receive from the sublicensee. Pursuant to the terms of the license agreement, we were required to initiate a Phase 2 clinical trial for an oral formulation of PB-101 within nine months of execution of the license agreement. In accordance with the license agreement, we previously purchased certain extension periods from Dong Wha, which extend the deadline before which we were required to initiate the Phase 2 clinical trial, in return for certain cash payments. We purchased extension periods for the extension of such deadline until March 2010. Although we commenced a Phase 2 clinical trial in the United States for the CAP indication in March 2010, we did not dose the first patient until May 2010. Following discussions with Dong Wha regarding such delay between initiation and patient dosing in the Phase 2 trial, on November 4, 2010, we entered into an amendment to the license agreement, pursuant to which we agreed to pay Dong Wha $200,000 by February 28, 2011 to compensate Dong Wha for such delay. In connection with such amendment, we also agreed to two additional milestones: A financing milestone requiring that we conduct an equity offering yielding at least $10 million in net proceeds by February 28, 2011 and an additional development milestone requiring that we complete patient enrollment in the Phase 2 CAP trial by April 30, 2012 and deliver a draft clinical study report to Dong Wha by July 31, 2012. If we fail to achieve either of these new milestones, Dong Wha will have the right to terminate the license agreement at anytime within 90 days of such failure.
to the licensor. The license agreement contains other customary clauses and terms as are common in similar agreements in the industry. The license agreement terminates on the expiration of our obligation to pay royalties to UCB, unless earlier terminated in accordance with the terms of the license agreement. The license agreement may be terminated by us, in our sole discretion, upon 30 days prior written notice to UCB. The license agreement may be terminated by UCB immediately upon any material breach and/or any breach capable of remedy by us if we have not cured such remediable breach within 90 days after notice thereof by UCB requiring its remedy or any breach of any representation or warranty given by us to UCB.
|
Substituted aniline compounds; |
|
CCA1 targeted inhibitors and assays; |
|
SEC14 targeted inhibitors and assays; |
|
Benzylidine thiazolidine derivatives; |
|
Thiazolidine derivatives; |
|
TRL1 targeted inhibitors and assays; and |
|
MSS4 targeted inhibitors and assays. |
(ii) by giving 90 days prior written notice to us upon any material breach or default of the agreement by us, subject to our right to cure such breach or default during such 90-day period, unless the nature of the breach is such that additional time is reasonably needed to cure it, and we have commenced with good faith efforts to cure such breach, then Santee shall provide us with additional time to cure it.
Name |
Age |
Position |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
Matthew A.
Wikler, M.D. |
61 |
President, Chief Executive Officer and Director (Principal Executive Officer) |
||||||||
James W.
Klingler |
63 |
Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) |
||||||||
James
Rock |
42 |
Director of New Product Development |
||||||||
Mark W.
Lotz |
57 |
Vice President of Regulatory Affairs |
||||||||
J. Jay
Lobell |
46 |
Director |
||||||||
Jai Jun (Matthew)
Choung, Ph.D. |
51 |
Director |
||||||||
Michael L.
Corrado, M.D. |
62 |
Director |
||||||||
Gary G.
Gemignani |
45 |
Director |
||||||||
Michael
Rice |
45 |
Director |
level positions for Prudential Financial Inc. (NYSE: PRU), a financial products and services provider. From 1993 to 1998, Mr. Gemignani held a variety of senior financial positions at Wyeth, a pharmaceutical, consumer healthcare and animal health company. From 1986 to 1993, he was an employee of Arthur Andersen & Co. Mr. Gemignani received his B.S. in accounting from St. Peters College. We believe Mr. Gemignanis qualifications to sit on our Board of Directors include his background in accounting, including his experience at a major accounting firm and his current and prior senior-level financial and operational positions at biopharmaceutical and biotechnology companies.
matters that have a significant impact on our financial statements. Our Audit Committee also consults with our management and our independent registered public accounting firm prior to the presentation of financial statements to stockholders and, as appropriate, initiates inquiries into aspects of our financial affairs. Our Audit Committee is responsible for establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters, and for the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters, and has established such procedures to become effective upon the effectiveness of the registration statement of which this prospectus forms a part. In addition, our Audit Committee is directly responsible for the appointment, retention, compensation and oversight of the work of our independent auditors, including approving services and fee arrangements. All related party transactions will be approved by our Audit Committee before we enter into them.
Name and Principal Position |
Year |
Salary ($) |
Bonus ($) |
All other compensation ($) |
Total ($) |
|||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Matthew A.
Wikler, M.D. President and Chief Executive Officer(1) |
2010 | 247,500 | 60,000 | (5) | 16,137 | (6) | 323,637 | |||||||||||||||
James W.
Klingler Executive Vice President and Chief Financial Officer(2) |
2010 | 79,858 | | 568 | (7) | 80,426 | ||||||||||||||||
James Rock Director of New Product Development( 3 ) |
2010 | 127,000 | | 8,219 | (8) | 135,219 | ||||||||||||||||
Mark W. Lotz Vice President of Regulatory Affairs( 4 ) |
2010 | 202,583 | | 9,614 | (9) | 212,197 |
(1) |
Dr. Wikler has served as our President and Chief Executive Officer and director since February 28, 2010. Dr. Wikler previously served as our President and Chief Executive Officer from November 2006 to January 2009. |
(2) |
Mr. Klingler has served as our Executive Vice President and Chief Financial Officer since July 12, 2010. |
(3) |
Mr. Rock has served as our Director of New Product Development since January 2007. |
( 4 ) |
Mr. Lotz has served as our Vice President of Regulatory Affairs since May 2007. |
( 5) |
Represents a bonus accrued for the year ended December 31, 2010 pursuant to Dr. Wiklers employment agreement. |
( 6) |
Represents $15,000 in 401(k) Plan contributions and $1,137 in life insurance premiums paid by us for Dr. Wikler. |
( 7) |
Represents $568 in life insurance premiums paid by us for Mr. Klingler. |
( 8) |
Represents $8,000 in 401(k) Plan contributions and $219 in life insurance premiums paid by us for Mr. Rock. |
( 9) |
Represents $8,250 in 401(k) Plan contributions and $1,364 in life insurance premiums paid by us for Mr. Lotz. |
every stockholder meeting during the term of his employment agreement. Dr. Wikler agreed to accept election and to serve as director during the term of his employment agreement.
individual performance on our behalf in the prior year, in the Board of Directors sole discretion. The annual discretionary bonus will be payable in a lump-sum payment or in installments, in our sole discretion. As additional compensation, Mr. Klingler will also be eligible to receive a $60,000 bonus upon our completion of an initial public offering, payable within thirty days of the closing of such initial public offering.
opportunity to respond fully to any such allegation) that Dr. Wikler engaged in some form of harassment prohibited by law (including, without limitation, age, sex or race discrimination), unless Dr. Wiklers actions were specifically directed by our Board of Directors; (vi) any material misappropriation or embezzlement of our or our affiliates property (whether or not a misdemeanor or felony); (vii) breach by Dr. Wikler of any of the provisions of the employment agreement relating to confidential information and inventions, non-competition, non-solicitation and non-disparagement and representations and warranties, which is not cured by Dr. Wikler within thirty (30) days after notice thereof is given to Dr. Wikler by us and (viii) breach by Dr. Wikler of any material provision of the employment agreement other than those provisions set forth in (vii) above, which, to the extent it is reasonably subject to notice and cure, is not cured by Dr. Wikler within thirty (30) days after notice thereof is given to Dr. Wikler by us.
affiliates, employees, agents or customers or use or intentional appropriation for his personal use or benefit of any of our funds or properties not authorized by us to be so used or appropriated.
Option Awards |
|||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name |
Number of Securities Underlying Unexercised Options (#) Exercisable |
Number of Securities Underlying Unexercised Options (#) Unexercisable |
Option Exercise Price ($) |
Option Expiration Date |
|||||||||||||||
Matthew A.
Wikler |
| | | | |||||||||||||||
James Rock
|
| | | | |||||||||||||||
Mark W. Lotz
(1) |
1,500 | | 45.60 | 09/27/17 |
(1) |
On September 27, 2007, Mr. Lotz was granted an option to purchase 1,500 shares of common stock. The option vested with respect to one-third of the shares of common stock on each of May 28, 2008, 2009 and 2010. |
Incentive Plan without stockholder approval if such approval is then required pursuant to Section 422 of the Code, the regulations promulgated thereunder or the rules of any stock exchange or similar regulatory body.
|
any breach of their duty of loyalty to us or our stockholders; |
|
acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; |
|
voting or assenting to unlawful payments of dividends or other distributions; or |
|
any transaction from which the director derived an improper personal benefit. |
request, to the fullest extent permitted by Delaware law. We will not indemnify an officer director, however, unless he or she acted in good faith, reasonably believed his or her conduct was in, and not opposed, to our best interests, and, with respect to any criminal action or proceeding, had no reason to believe his or her conduct was unlawful.
Plan Category |
Number of Shares to Be Issued Upon Exercise of Outstanding Options, Warrants and Rights (1) |
Weighted Average Exercise Price of Outstanding Options, Warrants and Rights |
Number of Shares Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(a) | (b) | (c) | ||||||||||||
Equity
compensation plans approved by security holders |
1,500 | $ | 45.60 | 1,498,500 | ||||||||||
Equity
compensation plans not approved by security holders |
| | | |||||||||||
Total |
1,500 | $ | 45.60 | 1,498,500 |
(1) |
The number of shares is subject to adjustments in the event of stock splits and other similar events. |
into 70,000 shares of common stock, at an exercise price equal to 110% of the offering price of the shares sold in this offering.
(before brokers fees or other transaction related expenses) of at least $10,000,000. For purposes of the PCP Notes, Reverse Merger means a merger, share exchange or other transaction or series of related transactions in which (a) we merge into or otherwise becomes a wholly owned subsidiary of a company subject to the public company reporting requirements of the Exchange Act and (b) the aggregate consideration payable to us or our stockholders in such transaction(s) (the Reverse Merger Consideration) is greater than or equal to $10,000,000.
exercisable upon the consummation of a Qualified Financing at a per share exercise price equal to the price at which shares of our common stock are issued in such Qualified Financing. If a Qualified Financing does not occur on or before March 31, 2011 (extended from September 30, 2010, pursuant to an amendment agreements dated as of September 16, 2010 and December 23, 2010), then the Hofer Consultant Warrant will be immediately exercisable at a per share exercise price equal to the fair market value of our common stock, as determined pursuant to a valuation performed by an independent appraisal firm. Under the terms of the Hofer Consultant Warrant, if we consummate a Qualified Financing, the number of shares of common stock issuable upon exercise of the Hofer Consultant Warrant will be automatically adjusted so that such number of shares is equal to 1.0% of our outstanding common stock on a fully diluted basis, after giving effect to such Qualified Financing (including the conversion of all our convertible notes triggered by such Qualified Financing). This adjustment provision will terminate once we consummate a Qualified Financing. For purposes of the Hofer Consultant Warrant, a Qualified Financing means our next equity financing (or series of related equity financings) sufficient to trigger conversion of all amounts then outstanding under our senior convertible promissory notes. This offering, if consummated, will be considered a Qualified Financing.
|
each of our directors and Named Executive Officers; |
|
all of our directors and executive officers as a group; and |
|
each person, or group of affiliated persons, known to us to beneficially own 5% or more of our outstanding common stock. |
|
the automatic conversion of all of our outstanding convertible notes into an aggregate of 2,596,711 shares of common stock upon the completion of this offering, assuming an initial public offering price of $ 5.00 per share (the mid-point of the price range set forth on the cover page of this prospectus) and assuming the conversion occurs on February 15, 2011; |
|
the filing of our amended and restated certificate of incorporation and the adoption of our amended and restated by-laws effective upon the completion of this offering; and |
|
no exercise of warrants or options outstanding on the date of this prospectus, except as specifically set forth herein . |
Shares Beneficially Owned Prior to Offering |
Shares Beneficially Owned After the Offering |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name |
Number |
Percentage |
Number |
Percentage |
|||||||||||||||
Named
Executive Officers and Directors: |
|||||||||||||||||||
Matthew A.
Wikler, M.D. |
6,445 | (1) | 6.9 | % | 163,333 | (2) | 2.4 | % | |||||||||||
James W.
Klingler |
- | ( 3 ) | - | 62,755 | (4) | * | |||||||||||||
Mark. W. Lotz
|
1,500 | (5) | 1.6 | % | 32,878 | (6) | * | ||||||||||||
James Rock
|
859 | (7) | * | 32,237 | (8) | * | |||||||||||||
J. Jay Lobell
|
6,250 | 6.7 | % | 18,016 | (9) | * | |||||||||||||
Jai Jun
(Matthew) Choung |
- | - | 11,766 | (9) | * | ||||||||||||||
Michael L.
Corrado |
- | - | 11,766 | (9) | * | ||||||||||||||
Gary G.
Gemignani |
- | - | 11,766 | (9) | * | ||||||||||||||
Michael Rice
|
- | - | 11,766 | (9) | * | ||||||||||||||
All executive
officers and directors as a group (nine persons) |
15,054 | (10) | 15.9 | % | 356,283 | (11) | 5.1 | % | |||||||||||
5%
Stockholders: |
|||||||||||||||||||
Lindsay A.
Rosenwald, M.D. |
66,626 | (12) | 53.2 | % | 797,277 | (13) | 11.2 | % | |||||||||||
Rosenwald Family Trusts |
20,833 | (14) | 22.3 | % | 113,233 | (14)(15) | 1.7 | % | |||||||||||
Robert
Feldman |
6,250 | ( 16) | 6.3 | % | 6,250 | (16 ) | * |
* |
Represents less than 1% |
(1) |
Does not include an option to purchase such number of shares of common stock representing 5% of the common stock outstanding upon the consummation of this offering on a fully diluted basis, to be granted to Dr. Wikler under the Plan upon the consummation of this offering. |
(2 ) |
Includes 156,888 shares of common stock underlying an option granted to Mr. Wikler under the Plan upon consummation of this offering that will vest upon consummation of this offering. Does not include 313,775 shares of common stock underlying such option that will not have vested upon consummation of this offering. |
(3 ) |
Does not include an option to purchase such number of shares of common stock representing 2% of the common stock outstanding upon the consummation of this offering on a fully diluted basis, to be granted to Mr. Klingler under the Plan upon the consummation of this offering. |
( 4) |
Represents 62,755 shares of common stock underlying an option granted to Mr. Klingler under the Plan upon consummation of this offering that will vest upon consummation of this offering. Does not include 125,510 shares of common stock underlying such option that will not have vested upon consummation of this offering. |
(5) |
Represents an option to purchase 1,500 shares of our common stock. Does not include an option to purchase such number of shares of common stock representing 1% of the common stock outstanding upon the consummation of this offering on a fully diluted basis, to be granted to Mr. Lotz under the Plan upon the consummation of this offering. |
( 6) |
Represents (i) an option to purchase 1,500 shares of our common stock and (ii) 31,378 shares of common stock underlying an option granted to Mr. Lotz under the Plan upon consummation of this offering that will vest upon consummation of this offering. Does not include 62,755 shares of common stock underlying such option that will not have vested upon consummation of this offering. |
(7 ) |
Does not include an option to purchase such number of shares of common stock representing 1% of the common stock outstanding upon the consummation of this offering on a fully diluted basis, to be granted to Mr. Rock under the Plan upon the consummation of this offering. |
( 8) |
Includes 31,378 shares of common stock underlying an option granted to Mr. Rock under the Plan upon consummation of this offering that will vest upon consummation of this offering. Does not include 62,755 shares of common stock underlying such option that will not have vested upon consummation of this offering. |
(9) |
Includes 11,766 shares of common stock underlying an option granted to each of our non-employee directors under the Plan upon consummation of this offering that will vest upon consummation of this offering. Does not include 11,767 shares of common stock underlying such options that will not have vested upon consummation of this offering. |
(10) |
Represents 13,554 shares of common stock and an option to purchase 1,500 shares of common stock. Does not include options to purchase shares common stock to be granted to officers under the Plan upon the consummation of this offering referred to in notes 1 , 3, 5 and 7 above. |
( 11) |
Represents 13,554 shares of common stock and options to purchase 342,729 shares of common stock. |
(12) |
Includes (i) 34,667 shares of common stock, (ii) 9,042 shares of common stock issuable upon exercise of the Placement Agent Warrant issued to Paramount BioCapital, Inc., of which Dr. Rosenwald is Chairman, Chief Executive officer and the sole stockholder and (iii) 22,917 shares of common stock issuable upon the exercise of the PCP Warrants issued on January 15, 2009 to Paramount Credit Partners LLC, an affiliate of Paramount BioCapital, Inc. Does not include (i) shares of common stock underlying the $500,000 principal amount of 8% Notes held by Dr. Rosenwald and any accrued but unpaid interest thereon and shares of common stock issuable upon the exercise of the related 8% Noteholder Warrant, (ii) shares of common stock underlying the $1,000,000 principal amount of 8% Notes held by Paramount Biosciences, LLC and any accrued but unpaid interest thereon and shares of common stock issuable upon the exercise of the related 8% Noteholder Warrant, (iii) 20,833 shares of common stock held in trusts established for the benefit of Dr. Rosenwald and his family referred to in note 14 below, (iv) 10,000 shares of common stock issuable upon the exercise of the PCP Warrants issued to Paramount Credit Partners LLC on June 24, 2009 or (v ) shares of common stock underlying the $1,992,205 principal amount of Paramount Notes and any accrued but unpaid interest thereon. Pursuant to amendment agreements dated as of December 23, 2010 relating to the 10% Notes and the 8% Notes, Dr. Rosenwald and the holders of the Paramount Notes have agreed to assign to the holders the 10% Notes and the 8% Notes, upon consummation of this offering, the rights to receive the shares of common stock issuable upon exercise of the Paramount Notes. |
( 13) |
Includes (i) 34,667 shares of common stock, (ii) 9,042 shares of common stock issuable upon exercise of the Placement Agent Warrant, (iii) 32,917 shares of common stock issuable upon the exercise of the PCP Warrants, (iv) 108,047 shares of common stock to be issued upon the automatic conversion of the 8% Note held by Dr. Rosenwald upon consummation of this offering, (v) 70,000 shares of common stock issuable upon the exercise of the 8% Noteholder Warrant held by Dr. Rosenwald, which will become exercisable upon consummation of this offering, (vi) 216,095 shares of common stock to be issued upon the automatic conversion of the 8% Note held by Paramount Biosciences, LLC, (vii) 140,000 shares of common stock issuable upon the exercise of the 8% Noteholder Warrant held by Paramount Biosciences, LLC, which will become exercisable upon consummation of this offering and (viii) 186,509 shares of common stock issuable upon exercise of the Paramount Warrants to be issued in respect of the PBS Note and the Capretti Note in connection with the consummation of this offering. Does not include 20,833 shares of common stock held in trusts established for the benefit of Dr. Rosenwald and his family referred to in note 14 below or 92,400 shares of common stock issuable upon the exercise of the Paramount Warrants to be issued in respect of the Family Trusts Note in connection with the consummation of this offering referred to in note 15 below, as Dr. Rosenwald disclaims beneficial ownership of all of such shares, except to the extent of his pecuniary interest therein. Also does not include 513,065 shares of common stock to be issued upon the automatic conversion of the Paramount Notes upon consummation of this offering because Dr. Rosenwald and the holders of the Paramount Notes have agreed to assign the rights to receive such shares to the holders the 10% Notes and the 8% Notes upon consummation of this offering, as described in note 12 above. |
(14 ) |
Represents 20,833 shares of common stock owned by four trusts established for the benefit of Dr. Rosenwald and his family. Hillel Gross is the trustee of such trusts and may be deemed to beneficially own the shares held by such trusts as he has sole control over the voting and disposition of any shares held by such trusts . |
(15) |
Includes 92,400 shares of common stock issuable upon the exercise of the Paramount Warrant to be issued in respect of the Family Trusts Note in connection with the consummation of this offering. The Family Trusts are trusts established for the benefit of Dr. Rosenwalds children. Jon Rosenwald, Dr. Rosenwalds brother, is the trustee of the Family Trusts and may be deemed to beneficially own the shares beneficially owned by the Family Trusts as he has sole control over the voting and disposition of any shares held by the Family Trusts. |
( 16 ) |
Represents shares of common stock underlying the Feldman Consultant Warrant. |
below, are consummated. Under the amendment agreement, we agreed to issue to the holders of the 8% Notes, upon the consummation of a Qualified IPO, Contingent Notes in an aggregate principal amount equal to 10% of the unpaid principal and accrued interest on the 8% Notes as of the date a Qualified IPO is consummated. In addition, pursuant to the amendment agreement, Dr. Rosenwald and the holders of the Paramount Notes (as defined below) agreed to assign the rights to receive the shares of our common stock issuable upon conversion of the Paramount Notes to the holders of the 10% Notes and the 8% Notes on a pro rata basis.
608,020 shares of common stock at an exercise price equal to 110% of the offering price of the shares sold in this offering.
become exercisable upon the consummation of a Qualified Financing at a per share exercise price equal to the price at which shares of our common stock are issued in such Qualified Financing. If a Qualified Financing does not occur on or before March 31, 2011, then the Hofer Consultant Warrant will be immediately exercisable at a per share exercise price equal to the fair market value of our common stock, as determined pursuant to a valuation performed by an independent appraisal firm. Under the terms of the Hofer Consultant Warrant, if we consummate a Qualified Financing, the number of shares of common stock issuable upon exercise of the Hofer Consultant Warrant will be automatically adjusted so that such number of shares is equal to 1.0% of our outstanding common stock on a fully diluted basis, after giving effect to such Qualified Financing (including the conversion of all our convertible notes triggered by such Qualified Financing). This adjustment provision will terminate once we consummate a Qualified Financing. For purposes of the Hofer Consultant Warrant, a Qualified Financing means our next equity financing (or series of related equity financings) sufficient to trigger conversion of all amounts then outstanding under our senior convertible promissory notes. This offering, if consummated, will be considered a Qualified Financing.
limitations and restrictions, or request that their shares of common stock be covered by a registration statement that we are otherwise filing, subject to specified exceptions.
|
before the stockholder became interested, the Board of Directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder; |
|
upon completion of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding shares owned by persons who are directors and also officers, and employee stock plans, in some instances; or |
|
at or after the time the stockholder became interested, the business combination was approved by the Board of Directors of the corporation and authorized at an annual or special meeting of stockholders by the affirmative vote of at least two-thirds of the outstanding voting stock which is not owned by the interested stockholder. |
|
prohibiting our stockholders from fixing the number of our directors; and |
|
establishing advance notice requirements for stockholder proposals that can be acted on at stockholder meetings and nominations to our Board of Directors. |
Days After Date of this Prospectus |
Shares Eligible for Sale |
Comment |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
Upon
Effectiveness |
4,000,000 |
Shares sold in this offering |
||||||||
90
Days |
24,274 |
Shares saleable under Rules 144 and 701 that are not subject to the lock-up |
||||||||
180
Days |
2,665,765 |
Lock-up released, subject to extension; shares saleable under Rules 144 and 701 |
|
1% of the number of shares of common stock then outstanding, which will equal 66,900 shares immediately after this offering; and |
|
the average weekly trading volume of our common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale. |
However, a non-affiliate who has beneficially owned the restricted shares proposed to be sold for at least one year will not be subject to any restrictions under Rule 144 regardless of how long we have been a reporting company.
Underwriters |
Number of Shares |
|||||
---|---|---|---|---|---|---|
Ladenburg
Thalmann & Co. Inc. |
||||||
Maxim
Group LLC |
||||||
Total
|
4,000,000 |
Fee Per Share (1) |
Total Without Exercise of Over- Allotment |
Total With Exercise of Over-Allotment |
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Public
offering price |
$ | $ | $ | |||||||||||
Discount
|
$ | $ | $ | |||||||||||
Proceeds
before expenses |
$ | $ | $ |
(1) |
The fees do not include the over-allotment option granted to the underwriters, the non-accountable expense allowance in the amount of 1% of the gross proceeds (excluding the over-allotment proceeds), or the warrants to purchase shares of our common stock equal to 3% of the number of shares sold in the offering issuable to the underwriters at the closing. |
|
the history and prospects of companies in our industry; |
|
prior offerings of those companies; |
|
our prospects for developing and commercializing our products; |
|
our capital structure; |
|
an assessment of our management and their experience; |
|
general conditions of the securities markets at the time of the offering; and |
|
other factors as were deemed relevant. |
|
Over-allotment involves sales by the underwriters of shares in excess of the number of shares the underwriters are obligated to purchase, which creates a syndicate short position. The short position may be either a covered short position or a naked short position. In a covered short position, the number of shares over-allotted by the underwriters is not greater than the number of shares that they may purchase in the over-allotment option. In a naked short position, the number of shares involved is greater than the number of shares in the over-allotment option. The underwriters may close out any short position by either exercising their over-allotment option and/or purchasing shares in the open market. |
|
Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum. |
|
Syndicate covering transactions involve purchases of securities in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of securities to close out the short position, the underwriters will consider, among other things, the price of securities available for purchase in the open market as compared to the price at which they may purchase securities through the over-allotment option. If the underwriters sell more securities than could be covered by the over-allotment option, creating a naked short position, the position can only be closed out by buying securities in the open market. A naked short position is more likely to be created if the underwriters are concerned that there could be downward pressure on the price of the securities in the open market after pricing that could adversely affect investors who purchase in the offering. |
|
Penalty bids permit the underwriters to reclaim a selling concession from a syndicate member when the security originally sold by the syndicate member is purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions. |
Page |
||||||
---|---|---|---|---|---|---|
F-2 | ||||||
F-3 | ||||||
F-4 | ||||||
F-5 | ||||||
F-6 F- 1 9 |
(A Development Stage Company)
September 30, 2010 |
December 31, 2009 |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
(Unaudited) | (Note 1) | |||||||||
ASSETS |
||||||||||
Current
assets: |
||||||||||
Cash
|
$ | 252,186 | $ | 10,728 | ||||||
Other current
assets |
10,819 | 8,535 | ||||||||
Total current
assets |
263,005 | 19,263 | ||||||||
Office
equipment, net of accumulated depreciation |
15,940 | 20,416 | ||||||||
Other assets
deferred financing and offering costs |
647,866 | 50,500 | ||||||||
Total assets
|
$ | 926,811 | $ | 90,179 | ||||||
LIABILITIES AND STOCKHOLDERS DEFICIENCY |
||||||||||
Current
liabilities: |
||||||||||
Accounts
payable and accrued expenses |
$ | 2,469,416 | $ | 2,037,683 | ||||||
Borrowings
under line of credit agreement |
150,000 | 150,000 | ||||||||
2007 senior
convertible notes |
4,340,000 | 4,340,000 | ||||||||
Interest
payable 2007 senior convertible notes |
1,222,979 | 800,730 | ||||||||
Notes payable
related parties |
1,992,205 | 2,777,205 | ||||||||
Interest
payable related parties |
513,353 | 378,252 | ||||||||
Interest
payable Paramount Credit Partners, LLC |
205,811 | 205,811 | ||||||||
Deferred
revenuesublicense |
37,714 | 37,714 | ||||||||
Total current
liabilities |
10,931,478 | 10,727,395 | ||||||||
Notes payable
Paramount Credit Partners, LLC (net of discount of $746,314 in 2010 and $917,451 in 2009) |
2,128,686 | 1,957,549 | ||||||||
2010 senior
convertible notes (net of discount of $1,126,636 in 2010) |
3,216,364 | | ||||||||
Interest
payable 2010 senior convertible notes |
219,210 | | ||||||||
Deferred
revenue sublicense |
587,714 | 616,000 | ||||||||
Total
liabilities |
17,083,452 | 13,300,944 | ||||||||
Commitments |
||||||||||
Stockholders deficiency: |
||||||||||
Preferred
stock, $.001 par value; 5,000,000 shares authorized, none issued |
| | ||||||||
Common stock,
$.001 par value; 20,000,000 shares authorized; 93,328 shares issued and outstanding at September 30, 2010 and December 31, 2009 |
93 | 93 | ||||||||
Additional
paid-in capital |
4,180,573 | 2,001,530 | ||||||||
Deficit
accumulated during the development stage |
(20,337,307 | ) | (15,212,388 | ) | ||||||
Total
stockholders deficiency |
(16,156,641 | ) | (13,210,765 | ) | ||||||
Total
liabilities and stockholders deficiency |
$ | 926,811 | $ | 90,179 |
(A Development Stage Company)
Nine Months Ended September 30, 2010 |
Nine Months Ended September 30, 2009 |
Period from October 5, 2006 (Inception) to September 30, 2010 |
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Operating
revenue: |
||||||||||||||
Sublicense
|
$ | 28,286 | $ | | $ | 34,572 | ||||||||
Operating
expenses: |
||||||||||||||
Research and
development |
2,127,578 | 646,731 | 12,703,410 | |||||||||||
General and
administrative |
676,048 | 260,743 | 2,966,486 | |||||||||||
Total
operating expenses |
2,803,626 | 907,474 | 15,669,896 | |||||||||||
Loss from
operations |
(2,775,340 | ) | (907,474 | ) | (15,635,324 | ) | ||||||||
Interest
income |
2,067 | | 29,926 | |||||||||||
Interest
expense, including amortization of debt discount and deferred financing costs |
(2,351,646 | ) | (802,364 | ) | (4,731,909 | ) | ||||||||
Net loss
|
$ | (5,124,919 | ) | $ | (1,709,838 | ) | $ | (20,337,307 | ) | |||||
Basic and
diluted net loss per common share |
$ | ( 54.91 ) | $ | ( 18.32 ) | ||||||||||
Weighted
average common shares outstanding basic and diluted |
93,328 | 93,328 |
(A Development Stage Company)
Period from January 1, 2010 to September 30, 2010
Deficit Accumulated |
||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Common Stock |
Additional Paid-in |
During the Development |
||||||||||||||||||||
Shares |
Amount |
Capital |
Stage |
Total |
||||||||||||||||||
Balance at
January 1, 2010 |
93,328 | $ | 93 | $ | 2,001,530 | $ | (15,212,388 | ) | $ | (13,210,765 | ) | |||||||||||
Stock-based
compensation |
6,058 | 6,058 | ||||||||||||||||||||
Warrants
issued to investors in connection with convertible notes |
2,172,985 | 2,172,985 | ||||||||||||||||||||
Net loss
|
(5,124,919 | ) | (5,124,919 | ) | ||||||||||||||||||
Balance at
September 30, 2010 |
93,328 | $ | 93 | $ | 4,1 80,573 | $ | (20,337,307 | ) | $ | (16,156,641 | ) |
(A Development Stage Company)
Nine Months Ended September 30, 2010 |
Nine Months Ended September 30, 2009 |
Period from October 5, 2006 (Inception) to September 30, 2010 |
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Cash flows
from operating activities: |
||||||||||||||
Net loss
|
$ | (5,124,919 | ) | $ | (1,709,838 | ) | $ | (20,337,307 | ) | |||||
Adjustments
to reconcile net loss to net cash used in operating activities: |
||||||||||||||
Stock-based
compensation |
6,058 | 45,612 | 504,024 | |||||||||||
Amortization
of deferred financing costs and debt discount |
852,080 | 175,294 | 1,754,634 | |||||||||||
Warrants
issued in connection with related party note conversion |
505,694 | | 505,694 | |||||||||||
Interest
payable 2007 senior convertible notes |
422,249 | 322,659 | 1,222,979 | |||||||||||
Expenses paid
on behalf of the Company satisfied through the issuance of notes |
| | 263,206 | |||||||||||
Interest
payable related parties |
135,101 | 111,263 | 513,353 | |||||||||||
Interest
payable Paramount Credit Partners |
| 133,936 | 205,811 | |||||||||||
Interest
payable 2010 senior convertible notes |
219,210 | | 219,210 | |||||||||||
Depreciation
|
6,408 | 6,262 | 27,748 | |||||||||||
Amortization
of deferred revenue |
(28,286 | ) | | (34,573 | ) | |||||||||
Changes in
operating assets and liabilities: |
||||||||||||||
Other current
assets |
(2,285 | ) | 10,115 | (10,820 | ) | |||||||||
Other
assets |
| 8,693 | | |||||||||||
Accounts
payable and accrued expenses |
431,733 | (2,254,418 | ) | 2,469,416 | ||||||||||
Deferred
revenue sublicense |
| | 660,000 | |||||||||||
Net cash used
in operating activities |
(2,576,957 | ) | (3,150,422 | ) | (12,036,625 | ) | ||||||||
Cash flows
from investing activities: |
||||||||||||||
Purchase of
office and computer equipment |
(1,932 | ) | | (43,688 | ) | |||||||||
Cash flows
from financing activities: |
||||||||||||||
Proceeds from
2010 senior convertible notes |
3,343,000 | | 3,343,000 | |||||||||||
Proceeds from
notes payable to Paramount Credit Partners |
| 2,875,000 | 2,875,000 | |||||||||||
Proceeds from
notes payable to related party |
215,000 | 214,472 | 4,329,000 | |||||||||||
Proceeds from
2007 senior convertible notes |
| | 4,340,000 | |||||||||||
Payments for
deferred financing costs |
(737,653 | ) | (62,500 | ) | (1,108,981 | ) | ||||||||
Proceeds from
utilization of line of credit |
| 100,000 | 150,000 | |||||||||||
Repayment of
amounts loaned under related party notes |
| | (1,600,000 | ) | ||||||||||
Proceeds from
receipt of stock issuances |
| | 4,480 | |||||||||||
Net cash
provided by financing activities |
2,820,347 | 3,126,972 | 12,332,499 | |||||||||||
Net increase
(decrease) in cash |
241,458 | (23,450 | ) | 252,186 | ||||||||||
Cash
beginning of period |
10,728 | 49,643 | | |||||||||||
Cash end of
period |
$ | 252,186 | $ | 26,193 | $ | 252,186 | ||||||||
Supplemental
schedule of non-cash financing activities: |
||||||||||||||
Warrants issued
to placement agent |
$ | | $ | | $ | 358,262 | ||||||||
Warrants issued
to investors in connection with notes |
$ | 1,667,291 | $ | 1,140,915 | $ | 2,808,206 | ||||||||
Stock issued to
founders and employees |
$ | | $ | | $ | 52 | ||||||||
Conversion of
PBS Notes to 2010 senior convertible notes |
$ | 1,000,000 | $ | | $ | 1,000,000 | ||||||||
Supplemental
disclosure cash paid for interest |
$ | 217,311 | $ | 59,212 | $ | 310,227 |
(A Development Stage Company)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(A Development Stage Company)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(A Development Stage Company)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(A Development Stage Company)
NOTES TO CONDENSED FINANCIAL STATEMENTS
financing consummated by the Company on or after September 30, 2009 that does not otherwise constitute a Qualified Financing, on the same terms and conditions that such equity securities are offered in such non-Qualified Financing. On January 4, 2010, PBS advanced another $215,000 to the Company. On February 9, 2010, $1,000,000 in principal outstanding under this note was converted into 2010 Notes pursuant to this provision. This note was issued to PBS for expenses that PBS has paid on behalf of the Company. As of September 30, 2010 and December 31, 2009, the principal amount outstanding under this note is $1,282,205 and $2,067,205, respectively.
(A Development Stage Company)
NOTES TO CONDENSED FINANCIAL STATEMENTS
be eliminated upon consummation of the Companys proposed initial public offering and the Company will not record any beneficial conversion charge to interest expense in connection with the conversion of the Related Party Notes. Instead, upon the consummation of the Companys proposed initial public offering, the Company will record a charge to interest expense in an amount equal to the value of the Contingent Notes and the warrants to be issued to the holders of the Related Party Notes upon the consummation of such offering.
(A Development Stage Company)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Nine Months Ended September 30, 2010 |
Nine Months Ended September 30, 2009 |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Shares |
Weighted Average Exercise Price |
Shares |
Weighted Average Exercise Price |
||||||||||||||||
Outstanding
at beginning of period |
1,500 | $ | 45.60 | 1,500 | $ | 45.60 | |||||||||||||
Outstanding
at end of period |
1,500 | $ | 45.60 | 1,500 | $ | 45.60 | |||||||||||||
Options
exercisable at September 30 |
1,500 | $ | 45.60 | 1,500 | $ | 45.60 |
Issuance/Grant Date |
No. of Shares / Shares Underlying Options/ Shares Underlying Warrants |
Sales Price / Exercise Price |
Estimated Fair Value Per Share of Common Stock at Issuance/Grant Date(1) |
Intrinsic Value at Issuance/Grant Date(2) |
||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Warrants |
||||||||||||||||||
2/09/2010
|
(3) |
(3) |
$ | 25.92 | N/A |
|||||||||||||
3/01/2010
|
(3) |
(3) |
28.32 | N/A |
||||||||||||||
5/26/2010 |
2,083(4) |
(4) |
(4) |
N/A |
(1) |
All determinations of estimated fair value were made by the Companys management , retrospectively, utilizing the market approach which uses direct comparisons to other enterprises and their equity securities to estimate the fair value of the common shares of privately issued securities, as described in more detail below. |
(2) |
Intrinsic value reflects the amount by which the estimated fair value of the common stock (as of the issuance/grant date) exceeds the exercise price of the stock option or warrant. Items in this column marked N/A represent equity instruments for which the intrinsic value was not determinable as of the issuance/grant date because the exercise price of such instrument was not known at the issuance/grant date. |
(3) |
See Note 5 Private Placements 2010 senior convertible notes for a discussion of these warrants. Due to the contingent exercisability of these warrants, the number of shares issuable upon exercise, the exercise price per share and the intrinsic value, if any, of these warrants could not be determined as of the issuance date. |
(4) |
See Note 6 Commitments Hofer Consulting Agreement and Warrant for a discussion of this warrant. Due to the contingent exercisability of this warrant, the number of shares issuable upon |
(A Development Stage Company)
NOTES TO CONDENSED FINANCIAL STATEMENTS
exercise, the exercise price per share and the intrinsic value, if any, of this warrant could not be determined as of the issuance date. In addition, because this warrant does not provide for a specific exercise price in the event a Qualified Financing is not consummated, the fair value of this warrant could not be estimated.
Valuation Date |
Method for Derivation of Enterprise Value |
Transaction |
Trended From |
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
9/27/2007 |
Trended
Using Guideline Company Analysis |
|
12/14/07 |
|||||||||||||||
12/14/2007 |
Transaction |
2007 Notes |
|
|||||||||||||||
2/21/2008 |
Trended
Using Guideline Company Analysis |
|
12/14/07 |
|||||||||||||||
1/15/2009 |
Transaction |
PCP Notes
& Warrants |
|
|||||||||||||||
6/24/2009 |
Trended
Using Guideline Company Analysis |
|
1/15/09 |
|||||||||||||||
2/9/2010 |
Transaction |
2010 Notes
& Warrants |
|
|||||||||||||||
3/1/2010 |
Trended
Using Guideline Company Analysis |
|
2/9/10 |
(A Development Stage Company)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(A Development Stage Company)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Principal
amount of 2007 Notes |
$ | 4,340,000 | ||||
Divided by percentage of price at which 2007 Notes convert to common stock |
70 | % | ||||
Aggregate
value to investors |
6,200,000 | |||||
Less
principal amount of 2007 Notes |
4,340,000 | |||||
Amount of
beneficial conversion feature |
$1,860,000 |
(A Development Stage Company)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(iii) an expected term (contractual term) of seven years; and (iv) an expected dividend yield of 0%. The Company recorded the value of the warrants as deferred financing costs, which was amortized to interest expense over the term of the 2007 Notes. (See Note 7).
Principal
amount of 2010 Notes |
$ | 4,343,000 | ||||
Divided by
percentage of price at which 2010 Notes convert to common stock |
70 | % | ||||
Aggregate
value to investors |
6,204,000 | |||||
Less
principal amount of 2010 Notes |
4,343,000 | |||||
Amount of
beneficial conversion feature |
$ | 1,861,000 |
(A Development Stage Company)
NOTES TO CONDENSED FINANCIAL STATEMENTS
assets or otherwise) prior to, but not in connection with, a Qualified IPO, each of these warrants will terminate 90 days following such sale and the warrants shall continue to be exercisable pursuant to its terms during such 90-day period. The Company valued these warrants at $2,172,985 using the Black Scholes option pricing model, assuming that the warrants were presently exercisable in the aggregate for that number of shares of the Companys common stock equal to 70% of the principal amount of the 2010 Notes, divided by $ 48.00 (or $3,040,100), at an exercise price of $ 48.00 , and the following additional assumptions: (i) a risk-free interest rate of 2.32% (2.28% for warrants issued in March 2010); (ii) an expected volatility of 110% (100% for warrants issued in March 2010); (iii) an expected term (contractual term) of five years; and (iv) an expected dividend yield of 0%.
(A Development Stage Company)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(A Development Stage Company)
NOTES TO CONDENSED FINANCIAL STATEMENTS
initial public offering, options to purchase shares of common stock representing 5% and 2%, respectively, of the common stock outstanding upon consummation of such offering on a fully diluted basis. Also on December 22, 2010, the Companys board of directors approved the issuance, upon consummation of the Companys proposed initial public offering, of options to purchase shares of common stock representing 1% of the common stock outstanding upon consummation of such offering on a fully diluted basis to each of the Companys Director of New Product Development and its Vice President of Regulatory Affairs. All such options will have an exercise price equal to the price at which shares of common stock are sold in such offering and will vest in three equal installments over a two-year period with the first installment vesting on the grant date and the remaining two installments vesting on the first and second anniversaries of the grant date, respectively. On such date, the Companys board of directors also approved the issuance, upon consummation of the Companys proposed initial public offering, of options to purchase shares of common stock representing 0.25% of the common stock outstanding upon consummation of such offering on a fully diluted basis to each of the Companys five non-employee directors, which options will have an exercise price equal to the price at which shares of common stock are sold in such offering and will vest in two equal installments over a one-year period with the first installment vesting on the grant date and the remaining installment vesting on the first anniversary of the grant date.
(A Development Stage Company)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Companys common stock issuable upon conversion of the Related Party Notes to the holders of the 2007 Notes and the 2010 Notes on a pro rata basis.
(A Development Stage Company)
Page |
||||||
---|---|---|---|---|---|---|
F- 21 | ||||||
December 31,
2009 and 2008 |
F- 2 2 | |||||
Years ended
December 31, 2009 (Restated) and 2008 (Restated) and the period from October 5, 2006 (Inception) to December 31, 2009 (Restated) |
F- 2 3 | |||||
Period from
October 5, 2006 (Inception) to December 31, 2009 |
F- 2 4 | |||||
Years ended
December 31, 2009 and 2008 and the period from October 5, 2006 (Inception) to December 31, 2009 |
F- 2 5 | |||||
F- 2 6 - F- 42 |
IASO Pharma Inc.
April 14, 2010, except for the effects of the matter s discussed in Note 9 and Note 1 (Reverse Stock Split) , which are as of December 22, 2010 and January 19, 2011, respectively
(A Development Stage Company)
December 31, 2009 |
December 31, 2008 |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
ASSETS |
||||||||||
Current
assets: |
||||||||||
Cash
|
$ | 10,728 | $ | 49,643 | ||||||
Other current
assets |
8,535 | 10,115 | ||||||||
Total current
assets |
19,263 | 59,758 | ||||||||
Office
equipment, net of accumulated depreciation of $21,340 and $12,989 |
20,416 | 28,767 | ||||||||
Other assets
|
50,500 | 8,693 | ||||||||
Total assets
|
$ | 90,179 | $ | 97,218 | ||||||
LIABILITIES AND STOCKHOLDERS DEFICIENCY |
||||||||||
Current
liabilities: |
||||||||||
Accounts
payable and accrued expenses |
$ | 2,037,683 | $ | 3,456,662 | ||||||
Borrowings
under line of credit agreement |
150,000 | 50,000 | ||||||||
Senior
convertible notes |
4,340,000 | | ||||||||
Interest
payable senior convertible notes |
800,730 | | ||||||||
Notes payable
related parties |
2,777,205 | | ||||||||
Interest
payable related parties |
378,252 | | ||||||||
Interest
payable Paramount Credit Partners, LLC |
205,811 | | ||||||||
Deferred
revenue sublicense |
37,714 | | ||||||||
Total current
liabilities |
10,727,395 | 3,506,662 | ||||||||
Notes payable
Paramount Credit Partners, LLC (net of discount of $917,451) |
1,957,549 | | ||||||||
Notes payable
related parties |
1,876,851 | |||||||||
Senior
convertible notes |
4,340,000 | |||||||||
Interest
payable senior convertible notes |
368,365 | |||||||||
Interest
payable related parties |
221,756 | |||||||||
Deferred
revenue sublicense |
616,000 | |||||||||
Total
liabilities |
13,300,944 | 10,313,634 | ||||||||
Commitments |
||||||||||
Stockholders deficiency: |
||||||||||
Preferred
stock, $.001 par value; 5,000,000 shares authorized, none issued |
| | ||||||||
Common stock,
$.001 par value; 20,000,000 shares authorized; 93,328 shares issued and outstanding at December 31, 2009 and 2008 |
93 | 93 | ||||||||
Additional
paid-in capital |
2,001,530 | 811,368 | ||||||||
Deficit
accumulated during the development stage |
(15,212,388 | ) | (11,027,877 | ) | ||||||
Total
stockholders deficiency |
(13,210,765 | ) | (10,216,416 | ) | ||||||
Total
liabilities and stockholders deficiency |
$ | 90,179 | $ | 97,218 |
(A Development Stage Company)
Year Ended December 31, 2009 (Restated See Note 9) |
Year Ended December 31, 2008 (Restated See Note 9) |
Period from October 5, 2006 (Inception) to December 31, 2009 (Restated See Note 9) |
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Operating
revenue: |
||||||||||||||
Sublicense
|
$ | 6,286 | $ | | $ | 6,286 | ||||||||
Operating
expenses: |
||||||||||||||
Research and
development |
2,679,323 | 3,299,632 | 10,575,832 | |||||||||||
General and
administrative |
421,628 | 783,611 | 2,290,438 | |||||||||||
Total
operating expenses |
3,100,951 | 4,083,243 | 12,866,270 | |||||||||||
Loss from
operations |
(3,094,665 | ) | (4,083,243 | ) | (12,859,984 | ) | ||||||||
Interest
income |
| 21,850 | 27,859 | |||||||||||
Interest
expense, including amortization of debt discount and deferred financing costs |
(1,089,846 | ) | (1,115,730 | ) | (2,380,263 | ) | ||||||||
Net loss
|
$ | (4,184,511 | ) | $ | (5,177,123 | ) | $ | (15,212,388 | ) | |||||
Basic and
diluted net loss per common share |
$ | ( 44.84 ) | $ | ( 55.47 ) | ||||||||||
Weighted
average common shares outstanding basic and diluted |
93,328 | 93,328 |
(A Development Stage Company)
Period from October 5, 2006 (Inception) to December 31, 2009
Common Stock |
Additional Paid-in |
Stock Subscription |
Deficit Accumulated During the Development |
|||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Shares |
Amount |
Capital |
Receivable |
Stage |
Total |
|||||||||||||||||||||
Net loss
|
$ | (243,542 | ) | $ | (243,542 | ) | ||||||||||||||||||||
Balance at
December 31, 2006 |
(243,542 | ) | (243,542 | ) | ||||||||||||||||||||||
Issuance of
common stock to founders and employees at $.0 48 per share in March and April 2007 |
93,328 | $ | 93 | $4,387 | $ | (52 | ) | 4,428 | ||||||||||||||||||
Warrants
issued to placement agent in connection with senior convertible notes |
358,262 | 358,262 | ||||||||||||||||||||||||
Stock-based
compensation |
188,313 | 188,313 | ||||||||||||||||||||||||
Net loss
|
(5,607,212 | ) | (5,607,212 | ) | ||||||||||||||||||||||
Balance at
December 31, 2007 |
93,328 | 93 | 550,962 | (52 | ) | (5,850,754 | ) | (5,299,751 | ) | |||||||||||||||||
Stock
subscription receipts |
52 | 52 | ||||||||||||||||||||||||
Stock-based
compensation |
260,406 | 260,406 | ||||||||||||||||||||||||
Net loss
|
(5,177,123 | ) | (5,177,123 | ) | ||||||||||||||||||||||
Balance at
December 31, 2008 |
93,328 | 93 | 811,368 | | (11,027,877 | ) | (10,216,416 | ) | ||||||||||||||||||
Stock-based
compensation |
49,247 | 49,247 | ||||||||||||||||||||||||
Warrants
issued in connection with 10% notes to PCP |
1,140,915 | 1,140,915 | ||||||||||||||||||||||||
Net loss
|
(4,184,511 | ) | (4,184,511 | ) | ||||||||||||||||||||||
Balance at
December 31, 2009 |
93,328 | $ | 93 | $ | 2,001,530 | $ | | $ | (15,212,388 | ) | $ | (13,210,765 | ) |
(A Development Stage Company)
Year ended December 31, 2009 |
Year ended December 31, 2008 |
Period from October 5, 2006 (Inception) to December 31, 2009 |
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Cash flows
from operating activities: |
||||||||||||||
Net loss
|
$ | (4,184,511 | ) | $ | (5,177,123 | ) | $ | (15,212,388 | ) | |||||
Adjustments
to reconcile net loss to net cash used in operating activities: |
||||||||||||||
Stock-based
compensation |
49,247 | 260,406 | 497,966 | |||||||||||
Amortization
of deferred financing costs and debt discount |
235,464 | 637,651 | 902,554 | |||||||||||
Interest
payable senior convertible notes |
432,365 | 351,969 | 800,730 | |||||||||||
Expenses paid
on behalf of the Company satisfied through the issuance of notes |
354 | 314 | 263,205 | |||||||||||
Interest
payable related party |
156,496 | 125,370 | 378,252 | |||||||||||
Interest
payable Paramount Credit Partners, LLC |
205,811 | 205,811 | ||||||||||||
Depreciation
|
8,351 | 8,351 | 21,340 | |||||||||||
Amortization
of deferred revenue |
(6,286 | ) | | (6,286 | ) | |||||||||
Changes in
operating assets and liabilities: |
||||||||||||||
Other current
assets |
1,580 | 214,842 | (8,535 | ) | ||||||||||
Other assets
|
8,693 | 9,769 | | |||||||||||
Accounts
payable and accrued expenses |
(1,418,979 | ) | 1,083,078 | 2,037,683 | ||||||||||
Deferred
revenue sublicense |
660,000 | | 660,000 | |||||||||||
Net cash used
in operating activities |
(3,851,415 | ) | (2,485,373 | ) | (9,459,668 | ) | ||||||||
Cash flows
from investing activities: |
||||||||||||||
Purchase of
office and computer equipment |
| | (41,756 | ) | ||||||||||
Cash flows
from financing activities: |
||||||||||||||
Proceeds from
notes payable to Paramount Credit Partners, LLC |
2,875,000 | 2,875,000 | ||||||||||||
Proceeds from
notes payable to related party |
1,000,000 | 70,000 | 4,114,000 | |||||||||||
Proceeds from
senior convertible notes |
| | 4,340,000 | |||||||||||
(Payments)/Credits for deferred financing costs |
(62,500 | ) | 50,951 | (371,328 | ) | |||||||||
Proceeds from
utilization of line of credit |
100,000 | 50,000 | 150,000 | |||||||||||
Repayment of
amounts loaned under related party notes |
(100,000 | ) | | (1,600,000 | ) | |||||||||
Proceeds from
receipt of stock issuances |
| 52 | 4,480 | |||||||||||
Net cash
provided by financing activities |
3,812,500 | 171,003 | 9,512,152 | |||||||||||
Net
(decrease) / increase in cash |
(38,915 | ) | (2,314,370 | ) | 10,728 | |||||||||
Cash, beginning
of period |
49,643 | 2,364,013 | | |||||||||||
Cash, end of
period |
$ | 10,728 | $ | 49,643 | $ | 10,728 | ||||||||
Supplemental
schedule of non-cash financing activities: |
||||||||||||||
Warrants issued
to placement agent |
$ | | $ | | $ | 358,262 | ||||||||
Warrants issued
to investors |
$ | 1,140,915 | $ | | $ | 1,140,915 | ||||||||
Stock issued to
founders and employees |
$ | | $ | | $ | 52 | ||||||||
Supplemental
disclosure of cash flow data cash paid for interest |
$ | 59,710 | $ | 740 | $ | 92,916 |
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
2009 |
2008 |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Risk-free
interest rate |
3.39 | % | 2.80 | % | ||||||
Expected
volatility |
110.0 | % | 90.0 | % | ||||||
Expected term
of options and warrants |
5 | 5 | ||||||||
Expected
dividend yield |
0 | % | 0 | % |
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
or have not resulted in a change in excess of 10 percent in the present value of the aggregate cash flows associated with the applicable notes. Accordingly, no charge has been recognized for debt modifications.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
the Company. As of December 31, 2009 and 2008, the principal amount outstanding under this note is $2,067,205 and $1,166,851, respectively.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
series of related equity financings by the Company resulting in aggregate gross cash proceeds (before brokers fees or other transaction related expenses) of at least $10,000,000. For purposes of the PCP Notes, Reverse Merger means a merger, share exchange or other transaction or series of related transactions in which (a) the Company merges into or otherwise becomes a wholly owned subsidiary of a company subject to the public company reporting requirements of the Securities Exchange Act of 1934, as amended, and (b) the aggregate consideration payable to the Company or its stockholders in such transaction(s) (the Reverse Merger Consideration) is greater than or equal to $10,000,000.
2009 |
2008 |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Net operating
loss carryforwards Federal |
$ | 4,382,000 | $ | 3,035,000 | ||||||
Net operating
loss carryforwards State |
774,000 | 536,000 | ||||||||
Totals |
5,156,000 | 3,571,000 | ||||||||
Less
valuation allowance |
(5,156,000 | ) | (3,571,000 | ) | ||||||
Deferred tax
assets |
$ | | $ | |
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
2009 |
2008 |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Statutory
Federal tax rate |
(34.0 | %) | (34.0 | %) | ||||||
State income
taxes (net of Federal) |
(6.0 | %) | (6.0 | %) | ||||||
Debt discount
amortization |
5 | % | | % | ||||||
Effect of
valuation allowance |
35 | % | 40 | % | ||||||
Effective tax
rate |
| % | | % |
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
2009 |
2008 |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Shares |
Weighted Average Exercise Price |
Shares |
Weighted Average Exercise Price |
||||||||||||||||
Outstanding
at beginning of year |
1,500 | $ | 45.60 | 1,500 | $ | 45.60 | |||||||||||||
Granted
|
917 | $ | 45.60 | ||||||||||||||||
Forfeited
|
( 917 | ) | $ | 45.50 | |||||||||||||||
Outstanding
at end of year |
1,500 | $ | 45.60 | 1,500 | $ | 45.60 | |||||||||||||
Options
exercisable at end of year |
1,125 | $ | 45.60 | 500 | $ | 45.60 | |||||||||||||
Weighted-average fair value of options granted during the year |
$ | 71.04 |
Issuance/Grant Date |
No. of Shares / Shares Underlying Options/ Shares Underlying Warrants |
Sales Price / Exercise Price |
Estimated Fair Value Per Share of Common Stock at Issuance/Grant Date(1) |
Intrinsic Value at Issuance/Grant Date(2) |
||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Common
Stock |
||||||||||||||||||
3/21/2007
|
93,245 | (3) | $ | 0.0 48 | $ | 0.0 48 | $ | | ||||||||||
4/16/2007
|
83 | (3) | 0.0 48 | 0.0 48 | | |||||||||||||
Stock
Options |
||||||||||||||||||
9/27/2007
|
1,500 | 45.60 | 56.64 | 11.04 | ||||||||||||||
2/21/2008
|
917 | (4) | 45.60 | 34.08 | |
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
Issuance/Grant Date |
No. of Shares / Shares Underlying Options/ Shares Underlying Warrants |
Sales Price / Exercise Price |
Estimated Fair Value Per Share of Common Stock at Issuance/Grant Date(1) |
Intrinsic Value at Issuance/Grant Date(2) | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Warrants |
||||||||||||||||||
9/27/2007
|
6,250 | 45.60 | 56.64 | 11.04 | ||||||||||||||
12/14/2007
|
9,042 | (5) | 48 .00 | (5) | 43.68 | N/A | ||||||||||||
1/15/2009
|
22,917 | (6) | 48.00 | (6) | 45.12 | N/A | ||||||||||||
6/24/2009
|
(6) | (6) | 44.64 | N/A |
(1) |
All determinations of estimated fair value were made by the Companys management , retrospectively, utilizing the market approach which uses direct comparisons to other enterprises and their equity securities to estimate the fair value of the common shares of privately issued securities, as described in more detail below. |
(2) |
Intrinsic value reflects the amount by which the estimated fair value of the common stock (as of the issuance/grant date) exceeds the exercise price of the stock option or warrant. Items in this column marked N/A represent equity instruments for which the intrinsic value was not determinable as of the issuance/grant date because the exercise price of such instrument was not known at the issuance/grant date. |
(3) |
Represents founder shares of common stock issued for cash. |
(4) |
Consists of options granted to former employees in February 2008. These options were forfeited in accordance with their terms upon the termination of these employees during 2008. |
(5) |
See Note 8 Private Placements Senior convertible notes for a discussion of this warrant. Under the terms of this warrant, because a Qualified Financing (as defined therein) did not take place by December 14, 2009, this warrant became exercisable on such date into 434,000 shares of common stock at a per share exercise price of $1.00; however, due to the contingent exercisability of this warrant at the time it was issued, the number of shares issuable upon exercise and the exercise price of this warrant could not be determined as of the issuance date. |
(6) |
See Note 3 Related Party Transactions Notes payable for a discussion of these warrants. Due to the contingent exercisability of these warrants, the number of shares issuable upon exercise, the exercise price per share and the intrinsic value, if any, of these warrants could not be determined as of the issuance date. |
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
Company to the valuation dates when there was not a capital raise. Based on the guideline companies percentage changes in enterprise value, together with company specific and various market factors (i.e., achievement of product milestones for guideline companies and the Company), a percentage change in enterprise value was estimated for the Company. This estimated percentage change was then applied to the Companys enterprise value as of the most current valuation date on which there was a capital raise to estimate the fair value of the Company on the next valuation date when there was not a capital raise. Considering the limited passage of time between valuation dates and the nature of the Companys operations, the Company believes that the trended enterprise value using the guideline company analysis, as described above, is the most reasonable and reliable indicator of changes in enterprise value for the Company, as it provides a market proxy for changes in investor expectations and perception.
Valuation Date |
Method for Derivation of Enterprise Value |
Transaction |
Trended From |
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
9/27/2007 |
Trended
Using Guideline Company Analysis |
|
12/14/07 |
|||||||||||||||
12/14/2007 |
Transaction |
2007
Notes |
|
|||||||||||||||
2/21/2008 |
Trended
Using Guideline Company Analysis |
|
12/14/07 |
|||||||||||||||
1/15/2009 |
Transaction |
PCP Notes
& Warrants |
|
|||||||||||||||
6/24/2009 |
Trended
Using Guideline Company Analysis |
|
1/15/09 |
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
payments to UCB upon the achievement of certain clinical and regulatory-based milestones, up to $12,000,000 in the aggregate. In the event that PB-200a or another covered compound is commercialized, the Company and its sublicensees are obligated to pay to UCB annual royalties equal to a percentage of net sales in the single-digit range. In June 2008 and each successive year, the Company paid to UCB an annual license maintenance fee of $100,000, which is creditable against royalties otherwise due to the licensor. During the years ended December 31, 2008 and 2007, the Company expensed $100,000 in license fees under the terms of this agreement. The license agreement terminates on the expiration of the Companys obligation to pay royalties to UCB, unless earlier terminated in accordance with the terms of the license agreement. The license agreement may be terminated by the Company, in its sole discretion, upon 30 days prior written notice to UCB. The license agreement may be terminated by UCB immediately upon any material breach and/or any breach capable of remedy by the Company if the Company has not cured such remediable breach within 90 days after notice thereof by UCB requiring its remedy or any breach of any representation or warranty given by the Company to UCB.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
needed to cure it, and the Company has commenced with good faith efforts to cure such breach, then Santee shall provide the Company with additional time to cure it.
Principal
amount of 2007 Notes |
$ | 4,340,000 | ||||
Divided by
percentage of IPO Price at which 2007 Notes convert to common stock |
70 | % | ||||
Aggregate
value to investors |
6,200,000 | |||||
Less
principal amount of 2007 Notes |
4,340,000 | |||||
Amount of
beneficial conversion feature |
$ | 1,860,000 |
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
Year Ended December 31, 2009 |
Year Ended December 31, 2008 |
Period from October 5, 2006 (Inception) to December 31, 2009 |
||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
As Previously Reported |
Effect of Adjustments |
As Restated |
As Previously Reported |
Effect of Adjustments |
As Restated |
As Previously Reported |
Effect of Adjustments |
As Restated |
||||||||||||||||||||||||||||||||||
Operating
expenses: |
||||||||||||||||||||||||||||||||||||||||||
Research and
development |
$ | 2,470,157 | $ | 209,166 | $ | 2,679,323 | $ | 2,715,377 | $ | 584,255 | $ | 3,299,632 | $ | 9,336,545 | $ | 1,239,287 | $ | 10,575,832 | ||||||||||||||||||||||||
General and
administrative |
630,794 | (209,166 | ) | 421,628 | 1,367,866 | (584,255 | ) | 783,611 | 3,529,725 | (1,239,287 | ) | 2,290,438 | ||||||||||||||||||||||||||||||
Total operating
expenses |
$ 3,100,951 | $ | $ 3,100,951 | $ 4,083,243 | $ | $ 4,083,243 | $ 12,866,270 | $ | $ 12,866,270 | |||||||||||||||||||||||||||||||||
Loss from
operations |
$ (3,094,665 | ) | $ | $ (3,094,665 | ) | $ (4,083,243 | ) | $ | $ (4,083,243 | ) | $ (12,859,984 | ) | $ | $ (12,859,984 | ) | |||||||||||||||||||||||||||
Net loss
|
$ | (4,184,511 | ) | $ | $ | (4,184,511 | ) | $ | (5,177,123 | ) | $ | $ | (5,177,123 | ) | $ | (15,212,388 | ) | $ | $ | (15,212,388 | ) |
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
Principal
amount of 2010 Notes |
$ | 4,343,000 | ||||
Divided by
percentage of IPO Price at which 2010 Notes convert to common stock |
70 | % | ||||
Aggregate
value to investors |
6,204,000 | |||||
Less
principal amount of 2010 Notes |
4,343,000 | |||||
Amount of
beneficial conversion feature |
$ | 1,861,000 |
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
INFORMATION NOT REQUIRED IN PROSPECTUS
SEC registration
fee |
$ | 2,747 | ||||
FINRA filing fee
|
2,500 | |||||
NYSE Amex
listing fee and expenses |
60,000 | |||||
Printing and
engraving expenses |
200,000 | |||||
Legal fees and
expenses |
650,000 | |||||
Accounting fees
and expenses |
200,000 | |||||
Transfer Agent
and Registrar fees and expenses |
5,000 | |||||
Miscellaneous
|
79,753 | |||||
Total
|
$ | 1,200,000 |
matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.
1. |
On December 1, 2006, we issued the PBS Note. Pursuant to the PBS Note, we borrowed an aggregate principal amount of $1,282,205 from December 1, 2006 through September 30, 2010. |
2. |
On December 1, 2006, we issued the Family Trusts Note. Pursuant to the Family Trusts Note, we borrowed an aggregate principal amount of $660,000 from December 1, 2006 through September 30, 2010. |
3. |
During March and April 2007, we issued 93,328 shares of common stock to our founders for $4,480, or $. 048 per share, including 6,445 shares to Matthew A. Wikler, MD, our President and Chief Executive Officer, 859 shares to James Rock, our Director of New Product Development, 2,083 shares to Lindsay A. Rosenwald, MD, 2,083 shares to the Family Trusts, and 44,356 shares to certain employees and affiliates of Paramount BioSciences, LLC. |
4. |
In September 2007, we issued to Robert Feldman, a former employee of Paramount, as compensation for certain services provided in connection with the in-licensing of certain of |
our product candidates, the Feldman Consultant Warrant, which is currently exercisable for 6,250 shares of common stock at a per share exercise price of $ 45.60 . |
5. |
In December 2007, we issued the 10% Notes, in the aggregate principal amount of $4,340,000, to 23 accredited investors. |
6. |
In December 2007, we issued to Paramount, in partial compensation for its services in connection with the offering of the 10% Notes, the Placement Agent Warrant, which is currently exercisable for 9,042 shares of common stock at a per share exercise price of $ 48.00 . |
7. |
On December 18, 2008, we issued the Capretti Note. Pursuant to the Capretti Note, we borrowed an aggregate principal amount of $50,000 from December 18, 2008 through September 30, 2010. |
8. |
On each of January 15, 2009 and June 24, 2009, respectively, we issued the PCP Notes, in the aggregate principal amount of $2,875,000, and the PCP Warrants, to PCP. |
9. |
In February and March 2010, we issued the 8% Notes, in the aggregate principal amount of $3,343,000, and the 8% Noteholder Warrants, to 45 accredited investors, including Lindsay A. Rosenwald, M.D., the Chairman, Chief Executive Officer and sole stockholder of Paramount BioCapital, Inc., a FINRA-registered broker-dealer. In addition, pursuant to the terms of the PBS Note, $1,000,000 of the principal amount outstanding under the PBS Note converted into an 8% Note in February 2010 in connection with the 8% Notes financing and PBS received a corresponding 8% Noteholder Warrant. |
10. |
In May 2010, we granted Timothy Hofer, our Corporate Secretary, as compensation for his services under his consulting agreement, a ten-year warrant to purchase 2,083 shares of our common stock, subject to adjustment. |
(a) |
Exhibits: |
Number |
Description of Exhibit |
|||||
---|---|---|---|---|---|---|
1.1 |
Form
of Underwriting Agreement. * |
|||||
3.1 |
Certificate of Incorporation.** |
|||||
3.2 |
Certificate of Amendment of Certificate of Incorporation.** |
|||||
3.3 |
By-laws.** |
|||||
3.4 |
Certificate of Amendment of Certificate of Incorporation, dated January 19, 2011. |
|||||
3. 5 |
Form
of Amended and Restated Certificate of Incorporation, to be effective upon the completion of the offering. |
|||||
3. 6 |
Form
of Amended and Restated By-laws, to be effective upon the completion of the offering. |
|||||
4.1 |
Specimen common stock certificate. |
|||||
4.2 |
Form
of underwriters warrant. * |
|||||
4.3 |
Form
of Note Purchase Agreement for 10% Notes (filed as Exhibit 4.6 to the Registrants Registration Statement on Form S-1 filed on April 15,
2010) . ** |
|||||
4.4 |
Form
of 10% Note (filed as Exhibit 4.7 to the Registrants Registration Statement on Form S-1 filed on April 15, 2010) . ** |
|||||
4.5 |
Note
and Warrant Purchase Agreement, dated as of January 15, 2009, between the Registrant and Paramount Credit Partners, LLC (filed as Exhibit 4.8 to the
Registrants Registration Statement on Form S-1 filed on April 15, 2010) . ** |
|||||
4.6 |
10%
Senior Promissory Note, dated January 15, 2009, issued to Paramount Credit Partners, LLC (filed as Exhibit 4.9 to the Registrants Registration
Statement on Form S-1 filed on April 15, 2010) . ** |
|||||
4.7 |
Common Stock Warrant, dated January 15, 2009, issued to Paramount Credit Partners, LLC (filed as Exhibit 4.10 to the Registrants
Registration Statement on Form S-1 filed on April 15, 2010) . ** |
Number |
Description of Exhibit | |||||
---|---|---|---|---|---|---|
4.8 |
Note
and Warrant Purchase Agreement, dated as of June 24, 2009, between the Registrant and Paramount Credit Partners, LLC (filed as Exhibit 4.11 to the
Registrants Registration Statement on Form S-1 filed on April 15, 2010) . ** |
|||||
4.9 |
10%
Senior Promissory Note, dated June 24, 2009, issued to Paramount Credit Partners, LLC (filed as Exhibit 4.12 to the Registrants Registration
Statement on Form S-1 filed on April 15, 2010) . ** |
|||||
4.10 |
Common Stock Warrant, dated June 24, 2009, issued to Paramount Credit Partners, LLC (filed as Exhibit 4.13 to the Registrants
Registration Statement on Form S-1 filed on April 15, 2010) . ** |
|||||
4.11 |
Amended and Restated Future Advance Promissory Note, dated September 30, 2009, issued to Paramount Biosciences, LLC (filed as Exhibit 4.14 to
the Registrants Registration Statement on Form S-1 filed on April 15, 2010) . ** |
|||||
4.12 |
Amended and Restated Future Advance Promissory Note, dated September 30, 2009, issued to The Lindsay A. Rosenwald 2000 Family Trusts Dated
December 15, 2000 (filed as Exhibit 4.15 to the Registrants Registration Statement on Form S-1 filed on April 15,
2010) . ** |
|||||
4.13 |
Amended and Restated Future Advance Promissory Note, dated September 30, 2009, issued to Capretti Grandi, LLC (filed as Exhibit 4.16 to the
Registrants Registration Statement on Form S-1 filed on April 15, 2010) . ** |
|||||
4.14 |
Form
of Note and Warrant Purchase Agreement for 8% Notes (filed as Exhibit 4.17 to the Registrants Registration Statement on Form S-1 filed on April
15, 2010) . ** |
|||||
4.15 |
Form
of 8% Note (filed as Exhibit 4.18 to the Registrants Registration Statement on Form S-1 filed on April 15, 2010) . ** |
|||||
4.16 |
Form
of 8% Warrant (filed as Exhibit 4.19 to the Registrants Registration Statement on Form S-1 filed on April 15, 2010) . ** |
|||||
4.17 |
Placement Agent Warrant (filed as Exhibit 4.20 to the Registrants Registration Statement on Form S-1 filed on April 15,
2010) . ** |
|||||
4.18 |
Feldman Consultant Warrant (filed as Exhibit 4.21 to the Registrants Registration Statement on Form S-1 filed on April 15,
2010) . ** |
|||||
4.19 |
Hofer Consultant Warrant (filed as Exhibit 4.22 to the Registrants Registration Statement on Form S-1 filed on April 15,
2010) . ** |
|||||
4.20 |
10%
Note Extension Agreement, dated September 16, 2010, between the Registrant and the noteholders listed on the signature pages
thereto. ** |
|||||
4.21 |
PBS Note Extension Agreement, dated as of September 16, 2010, between the Registrant and PBS. ** |
|||||
4.22 |
Family Trusts Note Extension Agreement, dated as of September 16, 2010, between the Registrant and the Family
Trusts. ** |
|||||
4.23 |
Capretti Note Extension Agreement, dated as of September 16, 2010, between the Registrant and Capretti. ** |
|||||
4.24 |
Hofer Consultant Warrant Amendment Agreement, dated as of September 16, 2010, between the Registrant and Timothy
Hofer. ** |
|||||
4.25 |
10%
Notes Amendment Agreement, dated December 23, 2010, between the Registrant and the noteholders listed on the signature pages
thereto. ** |
|||||
4.26 |
8%
Notes Amendment Agreement, dated December 23, 2010, between the Registrant and the noteholders listed on the signature pages
thereto. ** |
|||||
4.27 |
PBS
Note Amendment Agreement, dated December 23, 2010, between the Registrant and PBS. ** |
|||||
4.28 |
Family Trusts Note Amendment Agreement, dated December 23, 2010, between the Registrant and the Family Trusts. ** |
|||||
4.29 |
Capretti Note Amendment Agreement, dated December 23, 2010, between the Registrant and Capretti. ** |
|||||
4.30 |
Hofer Consultant Warrant Amendment Agreement, dated as of December 23, 2010, between the Registrant and Timothy
Hofer. ** |
|||||
4.31 |
PCP
Notes Amendment Agreement, dated December 23, 2010, between the Registrant and PCP. ** |
|||||
5.1 |
Opinion of Olshan Grundman Frome Rosenzweig & Wolosky LLP. * |
Number |
Description of Exhibit | |||||
---|---|---|---|---|---|---|
10.1 |
License Agreement, dated as of June 12, 2007, between Dong Wha Pharm. Ind. Co. Ltd. and the Registrant. |
|||||
10.2 |
Amendment No. 1, effective as of April 22, 2008, to License Agreement, dated as of June 12, 2007, between Dong Wha Pharm. Ind. Co. Ltd. and
the Registrant.** |
|||||
10.3 |
License Agreement, dated as of June 12, 2007, between UCB Celltech and the Registrant. ** |
|||||
10.4 |
Non-Exclusive Patent License Agreement, effective as of November 4, 2009, by and between the Registrant and Merck Sharp & Dohme
Corp. ** |
|||||
10.5 |
Exclusive Sublicense Agreement, effective as of July 10, 2007, by and between Santee Biosciences, Inc. and the
Registrant. ** |
|||||
10.6 |
Amended and Restated 2007 Stock Incentive Plan. |
|||||
10.7 |
Employment Agreement, effective as of February 28, 2010, by and between the Registrant and Matthew A. Wikler, M.D.** |
|||||
10.8 |
Employment Agreement, dated as of January 19, 2007, by and between the Registrant and James Rock.** |
|||||
10.9 |
Amendment, dated August 18, 2008, to Employment Agreement, dated as of January 19, 2007, by and between the Registrant and James
Rock.** |
|||||
10.10 |
Employment Agreement, dated May 17, 2007, by and between the Registrant and Mark Lotz.** |
|||||
10.11 |
Employment Agreement, effective as of July 12, 2010, by and between the Registrant and James W. Klingler. ** |
|||||
10.12 |
Amendment No. 2, effective as of November 4, 2010, to License Agreement, dated as of June 12, 2007, between Dong Wha Pharm. Ind. Co. Ltd. and
the Registrant. ** |
|||||
10.13 |
Demand TD Promissory Note, dated November 5, 2010, issued to Israel Discount Bank of New York. ** |
|||||
10.14 |
First Amendment, dated as of December 23, 2010, to Demand TD Promissory Note, dated November 5, 2010, issued to Israel Discount Bank of New
York. ** |
|||||
10.15 |
Amendment No. 1, dated as of December 22, 2010, to Employment Agreement, effective as of February 28, 2010, by and between the Registrant and
Matthew A. Wikler, M.D. ** |
|||||
10.16 |
Amendment No. 1, dated as of December 22, 2010, to Employment Agreement, effective as of July 12, 2010, by and between the Registrant and
James W. Klingler. ** |
|||||
10.17 |
Form
of Indemnification Agreement between the Company and each of its directors and executive officers. |
|||||
23.1 |
Consent of J.H. Cohn LLP. |
|||||
23.2 |
Consent of Olshan Grundman Frome Rosenzweig & Wolosky LLP (included in Exhibit 5.1). * |
|||||
24.1 |
Powers of Attorney . ** |
* |
To be filed by amendment. |
** |
Previously filed. |
|
Confidential treatment has been requested for portions of this document. The omitted portions of this document have been filed separately with the SEC. |
asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
By: |
/s/ Matthew A. Wikler Name: Matthew A. Wikler Title: President and Chief Executive Officer |
Signature |
Title |
Date |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
/s/ Matthew A. Wikler Matthew A. Wikler |
President,
Chief Executive Officer and Director (Principal Executive Officer) |
January 21, 2011 |
||||||||
/s/ James W.
Klingler James W. Klingler |
Executive Vice
President and Chief Financial Officer (Principal Financial and Accounting Officer) |
January 21, 2011 |
||||||||
* J. Jay Lobell |
Director |
January 21, 2011 |
||||||||
* Jai Jun (Matthew) Choung |
Director |
January 21, 2011 |
||||||||
* Michael L. Corrado |
Director |
January 21, 2011 |
||||||||
* Gary G. Gemignani |
Director |
January 21, 2011 |
||||||||
* Michael Rice |
Director |
January 21, 2011 |
||||||||
*By: /s/ Matthew
A. Wikler Matthew A. Wikler Attorney-in-Fact |
Number |
Description of Exhibit |
|||||
---|---|---|---|---|---|---|
1.1 |
Form
of Underwriting Agreement. * |
|||||
3.1 |
Certificate of Incorporation.** |
|||||
3.2 |
Certificate of Amendment of Certificate of Incorporation.** |
|||||
3.3 |
By-laws.** |
|||||
3.4 |
Certificate of Amendment of Certificate of Incorporation, dated January 19, 2011. |
|||||
3. 5 |
Form
of Amended and Restated Certificate of Incorporation, to be effective upon the completion of the offering. |
|||||
3. 6 |
Form
of Amended and Restated By-laws, to be effective upon the completion of the offering. |
|||||
4.1 |
Specimen common stock certificate. |
|||||
4.2 |
Form
of underwriters warrant. * |
|||||
4.3 |
Form
of Note Purchase Agreement for 10% Notes (filed as Exhibit 4.6 to the Registrants Registration Statement on Form S-1 filed on April 15,
2010) . ** |
|||||
4.4 |
Form
of 10% Note (filed as Exhibit 4.7 to the Registrants Registration Statement on Form S-1 filed on April 15, 2010) . ** |
|||||
4.5 |
Note
and Warrant Purchase Agreement, dated as of January 15, 2009, between the Registrant and Paramount Credit Partners, LLC (filed as Exhibit 4.8 to the
Registrants Registration Statement on Form S-1 filed on April 15, 2010) . ** |
|||||
4.6 |
10%
Senior Promissory Note, dated January 15, 2009, issued to Paramount Credit Partners, LLC (filed as Exhibit 4.9 to the Registrants Registration
Statement on Form S-1 filed on April 15, 2010) . ** |
|||||
4.7 |
Common Stock Warrant, dated January 15, 2009, issued to Paramount Credit Partners, LLC (filed as Exhibit 4.10 to the Registrants
Registration Statement on Form S-1 filed on April 15, 2010) . ** |
|||||
4.8 |
Note
and Warrant Purchase Agreement, dated as of June 24, 2009, between the Registrant and Paramount Credit Partners, LLC (filed as Exhibit 4.11 to the
Registrants Registration Statement on Form S-1 filed on April 15, 2010) . ** |
|||||
4.9 |
10%
Senior Promissory Note, dated June 24, 2009, issued to Paramount Credit Partners, LLC (filed as Exhibit 4.12 to the Registrants Registration
Statement on Form S-1 filed on April 15, 2010) . ** |
|||||
4.10 |
Common Stock Warrant, dated June 24, 2009, issued to Paramount Credit Partners, LLC (filed as Exhibit 4.13 to the Registrants
Registration Statement on Form S-1 filed on April 15, 2010) . ** |
|||||
4.11 |
Amended and Restated Future Advance Promissory Note, dated September 30, 2009, issued to Paramount Biosciences, LLC (filed as Exhibit 4.14 to
the Registrants Registration Statement on Form S-1 filed on April 15, 2010) . ** |
|||||
4.12 |
Amended and Restated Future Advance Promissory Note, dated September 30, 2009, issued to The Lindsay A. Rosenwald 2000 Family Trusts Dated
December 15, 2000 (filed as Exhibit 4.15 to the Registrants Registration Statement on Form S-1 filed on April 15,
2010) . ** |
|||||
4.13 |
Amended and Restated Future Advance Promissory Note, dated September 30, 2009, issued to Capretti Grandi, LLC (filed as Exhibit 4.16 to the
Registrants Registration Statement on Form S-1 filed on April 15, 2010) . ** |
|||||
4.14 |
Form
of Note and Warrant Purchase Agreement for 8% Notes (filed as Exhibit 4.17 to the Registrants Registration Statement on Form S-1 filed on April
15, 2010) . ** |
|||||
4.15 |
Form
of 8% Note (filed as Exhibit 4.18 to the Registrants Registration Statement on Form S-1 filed on April 15, 2010) . ** |
|||||
4.16 |
Form
of 8% Warrant (filed as Exhibit 4.19 to the Registrants Registration Statement on Form S-1 filed on April 15, 2010) . ** |
|||||
4.17 |
Placement Agent Warrant (filed as Exhibit 4.20 to the Registrants Registration Statement on Form S-1 filed on April 15,
2010) . ** |
Number |
Description of Exhibit | |||||
---|---|---|---|---|---|---|
4.18 |
Feldman Consultant Warrant (filed as Exhibit 4.21 to the Registrants Registration Statement on Form S-1 filed on April 15,
2010) . ** |
|||||
4.19 |
Hofer Consultant Warrant (filed as Exhibit 4.22 to the Registrants Registration Statement on Form S-1 filed on April 15,
2010) . ** |
|||||
4.20 |
10%
Note Extension Agreement, dated September 16, 2010, between the Registrant and the noteholders listed on the signature pages
thereto. ** |
|||||
4.21 |
PBS Note Extension Agreement, dated as of September 16, 2010, between the Registrant and PBS. ** |
|||||
4.22 |
Family Trusts Note Extension Agreement, dated as of September 16, 2010, between the Registrant and the Family
Trusts. ** |
|||||
4.23 |
Capretti Note Extension Agreement, dated as of September 16, 2010, between the Registrant and Capretti. ** |
|||||
4.24 |
Hofer Consultant Warrant Amendment Agreement, dated as of September 16, 2010, between the Registrant and Timothy
Hofer. ** |
|||||
4.25 |
10%
Notes Amendment Agreement, dated December 23, 2010, between the Registrant and the noteholders listed on the signature pages
thereto. ** |
|||||
4.26 |
8%
Notes Amendment Agreement, dated December 23, 2010, between the Registrant and the noteholders listed on the signature pages
thereto. ** |
|||||
4.27 |
PBS
Note Amendment Agreement, dated December 23, 2010, between the Registrant and PBS. ** |
|||||
4.28 |
Family Trusts Note Amendment Agreement, dated December 23, 2010, between the Registrant and the Family Trusts. ** |
|||||
4.29 |
Capretti Note Amendment Agreement, dated December 23, 2010, between the Registrant and Capretti. ** |
|||||
4.30 |
Hofer Consultant Warrant Amendment Agreement, dated as of December 23, 2010, between the Registrant and Timothy
Hofer. ** |
|||||
4.31 |
PCP
Notes Amendment Agreement, dated December 23, 2010, between the Registrant and PCP. ** |
|||||
5.1 |
Opinion of Olshan Grundman Frome Rosenzweig & Wolosky LLP. * |
|||||
10.1 |
License Agreement, dated as of June 12, 2007, between Dong Wha Pharm. Ind. Co. Ltd. and the Registrant. |
|||||
10.2 |
Amendment No. 1, effective as of April 22, 2008, to License Agreement, dated as of June 12, 2007, between Dong Wha Pharm. Ind. Co. Ltd. and
the Registrant.** |
|||||
10.3 |
License Agreement, dated as of June 12, 2007, between UCB Celltech and the Registrant. ** |
|||||
10.4 |
Non-Exclusive Patent License Agreement, effective as of November 4, 2009, by and between the Registrant and Merck Sharp & Dohme
Corp. ** |
|||||
10.5 |
Exclusive Sublicense Agreement, effective as of July 10, 2007, by and between Santee Biosciences, Inc. and the
Registrant. ** |
|||||
10.6 |
Amended and Restated 2007 Stock Incentive Plan. |
|||||
10.7 |
Employment Agreement, effective as of February 28, 2010, by and between the Registrant and Matthew A. Wikler, M.D.** |
|||||
10.8 |
Employment Agreement, dated as of January 19, 2007, by and between the Registrant and James Rock.** |
|||||
10.9 |
Amendment, dated August 18, 2008, to Employment Agreement, dated as of January 19, 2007, by and between the Registrant and James
Rock.** |
|||||
10.10 |
Employment Agreement, dated May 17, 2007, by and between the Registrant and Mark Lotz.** |
|||||
10.11 |
Employment Agreement, effective as of July 12, 2010, by and between the Registrant and James W. Klingler. ** |
|||||
10.12 |
Amendment No. 2, effective as of November 4, 2010, to License Agreement, dated as of June 12, 2007, between Dong Wha Pharm. Ind. Co. Ltd. and
the Registrant. ** |
Number |
Description of Exhibit | |||||
---|---|---|---|---|---|---|
10.13 |
Demand TD Promissory Note, dated November 5, 2010, issued to Israel Discount Bank of New York. ** |
|||||
10.14 |
First Amendment, dated as of December 23, 2010, to Demand TD Promissory Note, dated November 5, 2010, issued to Israel Discount Bank of New
York. ** |
|||||
10.15 |
Amendment No. 1, dated as of December 22, 2010, to Employment Agreement, effective as of February 28, 2010, by and between the Registrant and
Matthew A. Wikler, M.D. ** |
|||||
10.16 |
Amendment No. 1, dated as of December 22, 2010, to Employment Agreement, effective as of July 12, 2010, by and between the Registrant and
James W. Klingler. ** |
|||||
10.17 |
Form
of Indemnification Agreement between the Company and each of its directors and executive officers. |
|||||
23.1 |
Consent of J.H. Cohn LLP. |
|||||
23.2 |
Consent of Olshan Grundman Frome Rosenzweig & Wolosky LLP (included in Exhibit 5.1). * |
|||||
24.1 |
Powers of Attorney . ** |
* |
To be filed by amendment. |
** |
Previously filed. |
|
Confidential treatment has been requested for portions of this document. The omitted portions of this document have been filed separately with the SEC. |