Attached files
file | filename |
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EX-32.2 - SECTION 906 CERTIFICATION - THERALINK TECHNOLOGIES, INC. | exhibit32-2.htm |
EX-32.1 - SECTION 906 CERTIFICATION - THERALINK TECHNOLOGIES, INC. | exhibit32-1.htm |
EX-31.1 - SECTION 302 CERTIFICATION - THERALINK TECHNOLOGIES, INC. | exhibit31-1.htm |
EX-31.2 - SECTION 302 CERTIFICATION - THERALINK TECHNOLOGIES, INC. | exhibit31-2.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM 10-Q
(Mark
One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
May 31, 2011
or
[ ] TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the transition period from _____________ to _____________
Commission File
Number: 000-52218
PEDIATRX
INC.
(Exact name of registrant as specified in its
charter)
Nevada | 20-2590810 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
405 Trimmer Road, Suite 200, Califon, New Jersey
07830
(Address of principal executive offices) (Zip
Code)
(908) 975-0753
(Registrant's telephone number,
including area code)
N/A
(Former name, former address
and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files).
Yes [ ] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer | [ ] | Accelerated filer | [ ] | |
Non-accelerated filer | [ ] | (Do not check if a smaller reporting company) | Smaller reporting company | [X] |
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [X]
- ii -
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of securities
under a plan confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date 20,836,000 shares of common stock are issued and outstanding as of July 8, 2011.
- iii -
TABLE OF CONTENTS
PART IFINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED).
PediatRx Inc. (formerly Striker Energy Corp.)
(A
Development Stage Company)
Financial Statements
May 31,
2011
1
PediatRx Inc. (formerly Striker Energy Corp.) |
(A Development Stage Company) |
Balance Sheets |
As of | As of | |||||
May 31, | February 28, | |||||
2011 | 2011 | |||||
(Unaudited) | (Audited) | |||||
Assets | ||||||
Current assets | ||||||
Cash and cash equivalents | $ | 448,678 | $ | 549,392 | ||
Accounts receivable, net of reserves | 51,000 | 55,080 | ||||
Inventories | 104,420 | 107,675 | ||||
Prepaid expenses | 3,628 | 3,960 | ||||
Total current assets | 607,726 | 716,107 | ||||
Intangible assets, net of accumulated amortization | 809,252 | 831,322 | ||||
Security deposits | 992 | 992 | ||||
Total assets | $ | 1,417,970 | $ | 1,548,421 | ||
Liabilities | ||||||
Current liabilities | ||||||
Accounts payable and accrued liabilities | $ | 327,836 | $ | 314,425 | ||
Promissory notes | 250,000 | 250,000 | ||||
Total current liabilities | 577,836 | 564,425 | ||||
Promissory notes | 250,000 | - | ||||
Total liabilities | 827,836 | 564,425 | ||||
Stockholders equity | ||||||
Capital stock
Authorized 150,000,000 common shares, par value $0.0001 Issued and outstanding May 31, 2011 20,836,000 common shares February 28, 2011 20,836,000 common shares |
2,084 |
2,084 |
||||
Additional paid-in capital | 2,338,045 | 2,280,695 | ||||
Deficit accumulated during the development stage | (1,749,995 | ) | (1,298,783 | ) | ||
Total stockholders' equity | 590,134 | 983,996 | ||||
Total liabilities and stockholders' equity | $ | 1,417,970 | $ | 1,548,421 |
The accompanying notes are an integral part of these financial statements.
2
PediatRx Inc. (formerly Striker Energy Corp.) |
(A Development Stage Company) |
Statements of Operations |
For the period | |||||||||
from the date | For the three | For the three | |||||||
of inception on | month period | month period | |||||||
March 18, 2005 | ended | ended | |||||||
to May 31, 2011 | May 31, 2011 | May 31, 2010 | |||||||
Net revenues | $ | 369,828 | $ | 103,020 | $ | - | |||
Cost of Goods Sold | 102,295 | 16,732 | - | ||||||
Gross Margin | 267,533 | 86,288 | - | ||||||
Expenses | |||||||||
Bank charges and interest | 3,542 | $ | 599 | $ | 62 | ||||
Employee expenses | 256,258 | 97,180 | - | ||||||
Stock based compensation | 57,350 | 57,350 | - | ||||||
Consulting fees | 456,873 | 66,090 | - | ||||||
Marketing expense | 424,144 | 169,220 | - | ||||||
Travel expense | 35,531 | 11,932 | - | ||||||
Filing fees | 24,430 | 4,139 | 743 | ||||||
Interest expense | 27,803 | 9,396 | 625 | ||||||
Investor relations | 17,724 | 7,382 | - | ||||||
Legal and accounting fees | 301,980 | 44,058 | 10,246 | ||||||
Licenses and permits | 55,995 | 5,587 | - | ||||||
Management fees | 48,000 | - | 3,000 | ||||||
Mineral property expenditures | 15,124 | - | - | ||||||
Office expenses | 6,891 | 3,209 | - | ||||||
Insurance expense | 66,502 | 5,612 | - | ||||||
Regulatory expense | 87,769 | 29,854 | - | ||||||
Rent | 15,588 | 1,592 | 600 | ||||||
Transfer agent fees | 22,394 | 1,055 | 1,238 | ||||||
Website development | 13,887 | - | - | ||||||
Amortization expense | 73,568 | 22,070 | - | ||||||
State franchise tax | 1,175 | 1,175 | - | ||||||
Write down of mineral property acquisition costs | 5,000 | - | - | ||||||
Total Expenses | 2,017,528 | 537,500 | 16,514 | ||||||
Net loss for the period | $ | (1,749,995 | ) | $ | (451,212 | ) | $ | (16,514 | ) |
Basic and diluted loss per common share | $ | (0.022 | ) | $ | (0.001 | ) | |||
Weighted average number of common shares used in per share calculations | 20,836,000 | 20,506,000 |
The accompanying notes are an integral part of these financial
statements.
3
PediatRx Inc. (formerly Striker Energy Corp.) |
(A Development Stage Company) |
Statements of Changes in Stockholders' Equity (Deficit) |
Deficit, | |||||||||||||||
accumulated | Total | ||||||||||||||
Additional | during the | stockholders | |||||||||||||
Number of | Capital | paid-in | development | equity | |||||||||||
shares issued | stock | capital | stage | (deficit) | |||||||||||
Balance as of March 18, 2005 (inception) | - | $ | - | $ | - | $ | - | $ | - | ||||||
Restricted common shares issued for cash ($0.0005 per share) September 2005 |
10,000,000 | 1,000 | 4,000 | - | 5,000 | ||||||||||
Contributions to capital by related parties expenses |
- | - | 600 | - | 600 | ||||||||||
Net loss for the period | - | - | - | (21,237 | ) | (21,237 | ) | ||||||||
Balance as of February 28, 2006 | 10,000,000 | 1,000 | 4,600 | (21,237 | ) | (15,637 | ) | ||||||||
Common shares issued for cash ($0.005 per share) May 2006 |
10,000,000 | 1,000 | 49,000 | - | 50,000 | ||||||||||
Common shares issued for services ($0.005 per share) August 2006 and February 2007 |
6,000 | 1 | 29 | - | 30 | ||||||||||
Contributions to capital by related parties expenses |
- | - | 11,400 | - | 11,400 | ||||||||||
Net loss for the year | - | - | - | (50,890 | ) | (50,890 | ) | ||||||||
Balance as of February 28, 2007 | 20,006,000 | 2,001 | 65,029 | (72,127 | ) | (5,097 | ) | ||||||||
Contributions to capital by related parties expenses |
- | - | 14,400 | - | 14,400 | ||||||||||
Common shares returned and cancelled for cash ($0.005 per share) April 2007 |
(1,000,000 | ) | (100 | ) | (4,900 | ) | - | (5,000 | ) | ||||||
Common shares issued for cash ($0.01 per share) May 2007 |
1,000,000 | 100 | 4,900 | - | 5,000 | ||||||||||
Net loss for the year | - | - | - | (65,411 | ) | (65,411 | ) | ||||||||
Balance as of February 28, 2008 | 20,006,000 | 2,001 | 79,429 | (137,538 | ) | (56,108 | ) | ||||||||
Contributions to capital by related parties expenses |
- | - | 14,400 | - | 14,400 | ||||||||||
Contributions to capital by related parties loan forgiveness |
- | - | 38,950 | - | 38,950 | ||||||||||
Common shares issued for cash ($0.10 per share) November 2008 |
500,000 | 50 | 49,950 | - | 50,000 | ||||||||||
Net loss for the year | - | - | - | (53,957 | ) | (53,957 | ) | ||||||||
Balance as of February 28, 2009 | 20,506,000 | 2,051 | 182,729 | (191,495 | ) | (6,715 | ) | ||||||||
Contributions to capital by related parties expenses |
- | - | 14,399 | - | 14,399 | ||||||||||
Net loss for the year | - | - | - | (58,201 | ) | (58,201 | ) | ||||||||
Balance as of February 28, 2010 | 20,506,000 | 2,051 | 197,128 | (249,696 | ) | (50,517 | ) | ||||||||
Contributions to capital by related parties expenses |
- | - | 3,600 | - | 3,600 | ||||||||||
Common shares issued for cash ($0.20 per share) June 2010 |
1,500,000 | 150 | 299,850 | - | 300,000 | ||||||||||
Common shares issued for cash ($0.50 per share) July 2010 |
1,500,000 | 150 | 749,850 | - | 750,000 | ||||||||||
Common shares issued for cash ($1.00 per share) November 2010 |
825,000 | 83 | 824,917 | - | 825,000 | ||||||||||
Common shares returned and cancelled November 2010 |
(3,700,000 | ) | (370 | ) | 370 | - | - | ||||||||
Common shares issued for debt cancellation ($1.00 per share) November 2010 |
205,000 | 20 | 204,980 | - | 205,000 | ||||||||||
Net loss for the year | - | - | - | (1,049,087 | ) | (1,049,087 | ) | ||||||||
Balance as of February 28, 2011 | 20,836,000 | 2,084 | 2,280,695 | (1,298,783 | ) | 983,996 | |||||||||
Stock based compensation | - | - | 57,350 | - | 57,350 | ||||||||||
Net loss for the period | - | - | - | (451,212 | ) | (451,212 | ) | ||||||||
Balance as of May 31, 2011 | 20,836,000 | $ | 2,084 | $ | 2,338,045 | $ | (1,749,995 | ) | $ | 590,134 |
The accompanying notes are an integral part of these financial
statements.
4
PediatRx Inc. (formerly Striker Energy Corp.) |
(A Development Stage Company) |
Statements of Cash Flows |
For the period | |||||||||
from the date | For the three | For the three | |||||||
of inception on | month period | month period | |||||||
March 18, 2005 | ended | ended | |||||||
to May 31, 2011 | May 31, 2011 | May 31, 2010 | |||||||
Cash flows from operating activities | |||||||||
Net loss for the period | $ | (1,749,995 | ) | $ | (451,212 | ) | $ | (16,514 | ) |
Adjustments to reconcile loss to net cash used in operating activities | |||||||||
Amortization expense | 73,568 | 22,070 | - | ||||||
Contributions to capital by related parties expenses | 58,799 | - | 3,600 | ||||||
Contributions to capital by related party forgiveness of debt | 38,950 | - | - | ||||||
Common shares issued for services | 30 | - | - | ||||||
Write down of mineral property acquisition costs | 5,000 | - | - | ||||||
Stock based compensation | 57,350 | 57,350 | - | ||||||
Changes in operating assets and liabilities; net of effects from acquisition of Granisol product line and mineral property interest |
|||||||||
(Increase) decrease in accounts receivable | (51,000 | ) | 4,080 | - | |||||
Decrease in inventory | 12,760 | 3,255 | - | ||||||
(Increase) decrease in prepaids and deposits | (4,620 | ) | 332 | - | |||||
Increase in accounts payable and accrued liabilities | 332,836 | 13,411 | 8,246 | ||||||
Cash used in operating activities | (1,226,322 | ) | (350,714 | ) | (4,668 | ) | |||
Cash flows from investing activities | |||||||||
Acquisition of mineral property interest | (10,000 | ) | - | - | |||||
Acquisition of Granisol product line | (1,000,000 | ) | - | - | |||||
Cash used in investing activities | (1,010,000 | ) | - | - | |||||
Cash flows from financing activities | |||||||||
Proceeds from issuance of promissory notes | 705,000 | 250,000 | - | ||||||
Common shares returned to treasury | (5,000 | ) | - | - | |||||
Proceeds from issuance of common stock | 1,985,000 | - | - | ||||||
Cash provided by financing activities | 2,685,000 | 250,000 | - | ||||||
Increase (decrease) in cash and cash equivalents | 448,678 | (100,714 | ) | (4,668 | ) | ||||
Cash and cash equivalents, beginning of period | - | 549,392 | 6,760 | ||||||
Cash and cash equivalents, end of period | $ | 448,678 | $ | 448,678 | $ | 2,092 |
The accompanying notes are an integral part of these financial
statements.
5
1. |
Basis of Presentation |
The accompanying unaudited condensed financial statements of PediatRx Inc. (the "Company" or PediatRx) have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or the SEC, including the instructions to Form 10-Q and Regulation S-X. Effective December 28, 2010, the Company changed its name from Striker Energy Corp. to PediatRx Inc. to better reflect its new business. This name change was effected by a merger with the Companys wholly-owned subsidiary, PediatRx Inc., a Nevada corporation. | |
In the opinion of the management of the Company, all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the three month periods and for the period from the date of inception have been made. Results for the interim periods presented are not necessarily indicative of the results that might be expected for the entire fiscal year. When used in these notes, the terms "Company", "we", "us" or "our" mean PediatRx Inc.. | |
Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America have been condensed or omitted from these statements pursuant to such rules and regulations and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements and should be read in conjunction with our audited financial statements for the year ended February 28, 2011. | |
2. |
Nature and Continuance of Operations |
Striker Energy Corp. was incorporated under the laws of the State of Nevada on March 18, 2005. The Company originally intended to engage in the acquisition and exploration of mineral properties. On September 28, 2005, the Company entered into a mineral property option agreement with an unrelated third party (the Seller), wherein the Company would acquire 50% of the rights, title and interests in and to the Bald Mountain Claims in Nevada. Early in the summer of 2008, the Company abandoned its efforts to acquire the Bald Mountain Claims with a notice to the Seller. The Company transitioned its business from mineral property exploration to oil and natural gas exploration. | |
Effective September 12, 2008, the Company completed a stock split by the issuance of two new common shares for each one outstanding common share of the Company. Unless otherwise noted, all references herein to number of shares, price per share or weighted average number of shares outstanding have been adjusted to reflect this stock split on a retroactive basis. | |
On June 17, 2010, we entered into a letter of intent with Cypress Pharmaceutical, Inc. (Cypress) to acquire all of the assets associated with Granisol® (granisetron HC1) oral solution (Granisol). First approved in 2008, Granisol is an oral, liquid granisetron solution, formerly distributed by Hawthorn Pharmaceuticals, a subsidiary of Cypress. The Food and Drug Administration has approved Granisols use in cancer care to treat nausea and vomiting associated with cancer therapy. On June 18, 2010, we caused PediatRx Inc. to be incorporated as a wholly-owned subsidiary of Striker Energy Corp. under the laws of the state of Nevada. On July 23, 2010, PediatRx concluded a definitive agreement to acquire Granisol from Cypress and we turned our focus to the pharmaceutical industry and terminated our interest in oil and natural gas exploration. | |
PediatRx intends to acquire or license the rights to produce and/or market FDA approved branded pharmaceuticals and expects to add value by more effectively marketing these products to healthcare professionals and other key constituents. In addition, PediatRx expects to reformulate existing pharmaceutical products into more pediatric-friendly offerings using an approach that leverages existing safety data to fast track regulatory approval. PediatRx also plans to expand the application of its core products to additional therapeutic areas and seek partnerships outside of the United States. | |
On December 28, 2010 we completed a merger of PediatRx into Striker Energy Corp. and changed the name of Striker Energy Corp. to PediatRx Inc. | |
6 |
The Company is a development stage enterprise, as defined in Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 915, Development Stage Entities. The Company is devoting substantially all of its present efforts to the initial marketing of Granisol and seeking to secure rights to other pharmaceutical products through acquisition, licensing and reformulation activities.
The Company has a loss of $451,212 for the three month period ended May 31, 2011 (May 31, 2010 $16,514, cumulative $1,749,995) and has a working capital deficit at May 31, 2011 of $220,110 (February 28, 2011 working capital of $151,682). The Company's financial statements as of May 31, 2011 and for the three month period ended May 31, 2011 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.
Management cannot provide assurance that the Company will ultimately achieve profitable operations or become cash flow positive, or raise additional debt and/or equity capital. As of May 31, 2011, the Company's assets consisted of cash and cash equivalents of $448,678 and accounts receivable from product sales, net of discounts and allowances, of $51,000. Management believes that the Company's capital resources are not currently adequate to continue operating and maintaining its business strategy for the fiscal year ending February 28, 2012. The Company believes however, that it will be able to raise capital through additional debt and/or equity financings and that such financings, combined with increasing product sales, as well as potential additional product transactions will allow the Company to fund its operations in the future. Although the Company has historically raised capital from sales of equity and from the issuance of promissory notes, there is no assurance that it will be able to continue to do so. If the Company is unable to raise additional capital or secure additional lending in the near future, management expects that the Company will need to curtail or cease operations. These financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
As of May 31, 2011, the Company was in the process of transitioning to its new operating business and expects to incur operating losses for the next twelve months as it builds out its infrastructure and begins its full distribution activities for Granisol.
3. |
The Granisol Acquisition |
On July 23, 2010 (the Closing Date), the Granisol product line was acquired by the Company for cash consideration totaling $1 million. All inventories and intangibles associated with the Granisol product line were included in the purchase. Operations of the Granisol product line are included in the Companys statement of operations since the Closing Date. | |
As part of the closing and transfer of assets to PediatRx on July 23, 2010, PediatRx assumed a single product manufacturing and supply agreement with Therapex, a division of E-Z-EM Canada, Inc. to enable the manufacturing of the Granisol product line. Under the terms of the agreement, Therapex will manufacture the product in compliance with current Good Manufacturing Practice (cGMP) and oversee all quality control and packaging through to finished product to meet PediatRx's requirements. | |
Prior to the Closing Date, a purchase order was placed with Therapex for one lot of product to be delivered subsequent to the closing date. Such inventory to be delivered is an integral part of the acquisition and the seller has been paid by PediatRx as part of the $1 million cash consideration. The Company assigned $117,180 to inventory receivable on the balance sheet as of the Closing Date, with the remaining purchase price allocated to the product rights and know-how associated with the ANDA, the Granisol trademark, and the manufacturing and supply agreement with Therapex. The related inventory was received in October 2010. The Company is amortizing the product rights and know-how over the estimated useful life of ten years on a straight line basis, beginning with August, 2010. | |
7 |
The purchase price for the Granisol product line was allocated in accordance with the acquisition method of accounting. The acquisition method of accounting is based on ASC 805, Business Combinations, and uses the fair value concepts defined in ASC 820, Fair Value Measurements and Disclosures.
The following unaudited pro forma information was prepared assuming that the acquisitions of Granisol had taken place at the beginning of fiscal 2011. In preparing the pro forma financial information, various assumptions were made. Therefore, the Company does not imply that the future results will be indicative of the following pro forma information:
Three Months | Three Months | ||||||
Ended | Ended | ||||||
May 31, 2011 | May 31, 2010 | ||||||
Net sales | $ | 103,020 | $ | 33,394 | |||
Net loss | (451,212 | ) | (14,683 | ) | |||
Net loss per share - basic and diluted | (0.022 | ) | (0.001 | ) |
4. |
Mineral Properties |
On September 28, 2005, the Company entered into a mineral property option agreement with an unrelated third party, wherein the Company could acquire 50% of the rights, title and interests in and to the Bald Mountain Claims in Nye County, Nevada (the "Bald Mountain Claims") by paying $5,000 in cash on signing (paid), $5,000 on the second anniversary of the agreement (accrued), $10,000 on the third anniversary of the agreement and completing exploration expenditures totalling $500,000 by September 28, 2010. During the year ended February 28, 2006, the Company recorded a write down of mineral property acquisition costs of $5,000 related to the Bald Mountain Claims. | |
During the year ended February 29, 2008, the Company incurred mineral property acquisition costs of $5,000 related to Bald Mountain Claims. This amount was initially capitalized as an intangible asset. During the year ended February 29, 2008, the Company recorded a write down of mineral property acquisition costs of $5,000 related to the Bald Mountain Claims. | |
During the year ended February 28, 2009, the Company abandoned its interest in the Bald Mountain Claims and recorded a recovery of mineral property acquisition costs of $5,000. This amount was previously recorded as payable on September 28, 2007. | |
8 |
5. |
Promissory Notes |
May 31, 2011 |
February 28, 2011 |
|||||||
Issued on June 15, 2009, the unsecured promissory note, bearing interest at five percent (5%) per annum on the principal balance of $50,000, was originally due on June 15, 2011. Effective May 18, 2011 the promissory note was amended whereby the maturity date of the note was extended until June 15, 2012. The principal amount or such portion thereof as shall remain outstanding from time to time shall accrue simple interest, calculated monthly in arrears, at a rate of 5% per annum commencing on the date of this promissory note and payable at maturity. When not in default, the unsecured promissory note and any accrued interest can be repaid in whole or in part without notice or penalty. | $ | 50,000 | $ | 50,000 | ||||
Issued on July 26, 2010, the unsecured promissory note, bearing interest at five percent (5%) per annum on the principal balance of $200,000, was originally due on July 26, 2011. Effective May 23, 2011 the promissory note was amended whereby the maturity date of the note was extended until July 26, 2012. The principal amount or such portion thereof as shall remain outstanding from time to time shall accrue simple interest, calculated monthly in arrears, at a rate of 5% per annum commencing on the date of this promissory note and payable at maturity. When not in default, the unsecured promissory note and any accrued interest can be repaid in whole or in part without notice or penalty with a minimum of six months interest due if repaid prior to the six month anniversary. | 200,000 | 200,000 | ||||||
Issued on May 6, 2011 the unsecured promissory note, bearing interest at five percent (5%) per annum on the principal balance of $250,000, is due on May 6, 2012. The principal amount or such portion thereof as shall remain outstanding from time to time shall accrue simple interest, calculated monthly in arrears, at a rate of 5% per annum commencing on the date of this promissory note and payable at maturity. When not in default, the unsecured promissory note and any accrued interest can be repaid in whole or in part without notice or penalty with a minimum of six months interest due if repaid prior to the six month anniversary. | 250,000 | - | ||||||
Total Promissory Notes | $ | 500,000 | $ | 250,000 |
6. |
Related Party Transactions |
During the three month period ended May 31, 2010, an officer and director of the Company made contributions to capital for management fees in the amount of $3,000 (May 31, 2011 none, cumulative - $48,000) and for rent in the amount of $600 (May 31, 2011 none, cumulative - $10,799). | |
Effective May 28, 2010, the Company entered into a consulting agreement with Dr. Cameron Durrant, a shareholder of the Company, to assist management in the identification of opportunities available to the Company in the healthcare industry and to recommend terms of potential acquisitions. Under the agreement, the Company was to compensate Dr. Durrant on a time-spent basis at the rate of $1,000 per day, plus reimbursement of reasonable associated expenses. Dr. Durrant's agreement with the Company dated May 28, 2010 was terminated in lieu of the September 24, 2010 agreement. | |
On September 24, 2010, with retroactive effect to July 1, 2010, the Company entered into a second consulting agreement with Dr. Durrant. Pursuant to the consulting agreement, Dr. Durrant agreed to perform such duties as are regularly and customarily performed by the Chief Executive Officer of a corporation. The term of the consulting agreement is one year from July 1, 2010, unless both parties agree to extend. | |
9 |
In addition, of the 4,250,000 shares of the Companys common stock owned by Dr. Durrant, 2,833,333 shares are subject to a lockup agreement between the Company and Dr. Durrant, which lockup agreement became effective February 9, 2011. Pursuant to the terms of the lockup agreement, Dr. Durrant agreed not to sell, assign or convey or otherwise dispose of any shares subject to the lockup agreement until December 31, 2015. The lockup agreement expires on December 31, 2015.
During the three month period ended May 31, 2011, the Company paid $85,128 (May 31, 2010 $0, cumulative $188,371) in connection with Dr. Durrants consulting agreements, including $22,628 related to amounts accrued but unpaid in prior periods. As of May 31, 2011, the Company has recorded a payable to Dr. Durrant of $52,796 related to prior period consulting fees that are unpaid as of that date. Also during the three month period ended May 31, 2011, the Company paid Dr. Durrant $25,672 related to expenses paid by him associated to the establishment of PediatRx (May 31, 2010 $0, cumulative $27,545). As of May 31, 2011, the Company has recorded a payable to Dr. Durrant of $59,900 related to such business establishment expenses that are unpaid as of that date.
On September 14, 2010, with retroactive effect to July 1, 2010, the Company entered into an employment agreement with Mr. David Tousley, Chief Financial Officer, Treasurer and Secretary of PediatRx. Pursuant to the employment agreement, Mr. Tousley agreed to perform such duties as are regularly and customarily performed by the Chief Financial Officer of a corporation. Mr. Tousley is also eligible to receive an annual bonus and an annual stock option award at the end of each year at the discretion of the board of directors of PediatRx. The term of the employment agreement is two years from July 1, 2010, unless both parties agree to extend.
In addition, of the 400,000 shares of the Companys common stock owned by Mr. Tousley, 266,666 shares are subject to a lockup agreement between the Company and Mr. Tousley, which lockup agreement became effective February 9, 2011. Pursuant to the terms of the lockup agreement, Mr. Tousley agreed not to sell, assign, convey, or otherwise dispose of any shares subject to the lockup agreement until December 31, 2015. The lockup agreement expires on December 31, 2015.
On September 14, 2010, with retroactive effect to July 1, 2010, the Company entered into an employment agreement with Mr. Jorge Rodriguez, Chief Commercial Officer of PediatRx. Pursuant to the employment agreement, Mr. Rodriguez agreed to perform such duties as are regularly and customarily performed by the Chief Commercial Officer of a corporation. Mr. Rodriguez is also eligible to receive an annual bonus and an annual stock option award at the end of each year at the discretion of the board of directors of PediatRx. The term of the employment agreement is two years from July 1, 2010, unless both parties agree to extend.
7. |
Capital Stock |
Authorized | |
The total authorized capital is 150,000,000 common shares with a par value of $0.0001. | |
Issued and outstanding | |
The total issued and outstanding capital stock at May 31, 2011 is 20,836,000 common shares with a par value of $0.0001 per common share. | |
On September 1, 2005, 10,000,000 common shares of the Company were issued to an officer and director of the Company for cash proceeds of $5,000. | |
10 |
On May 2, 2006, the Company completed a public offering of securities pursuant to an exemption provided by Rule 504 of Regulation D, registered in the State of Nevada, and issued 10,000,000 common shares for total cash proceeds of $50,000.
On August 29, 2006, 4,000 common shares valued at $0.005 per share of the Company were issued to an officer and director of the Company for services rendered.
On February 1, 2007, 2,000 common shares valued at $0.005 per share of the Company were issued to a director of the Company for services rendered.
On April 30, 2007, 1,000,000 common shares of the Company were returned and cancelled; $5,000 was returned to the investors.
On May 14, 2007, 1,000,000 common shares valued at $0.005 per share of the Company were issued for total cash proceeds of $5,000.
Effective September 12, 2008, the Company completed a 2 to 1 forward stock split and increased the authorized share capital from 75,000,000 common shares to 150,000,000 common shares with the same par value of $0.0001. Unless otherwise noted, all references herein to number of shares, price per share or weighted average number of shares outstanding have been adjusted to reflect this stock split on a retroactive basis.
On November 6, 2008, 500,000 common shares valued at $0.10 per share of the Company were issued for total cash proceeds of $50,000.
On June 14, 2010, 1,500,000 common shares valued at $0.20 per share of the Company were issued for total cash proceeds of $300,000.
On July 2, 2010, 1,500,000 common shares valued at $0.50 per share of the Company were issued for total cash proceeds of $750,000.
On November 3, 2010, 400,000 units were issued at a purchase price of $1.00 per unit for total cash proceeds of $400,000. Each unit consisted of one share of common stock of the Company and one-half of one share non-detachable purchase warrant. Each whole warrant entitles the holder to purchase one share of common stock at a purchase price of $1.75 per share until November 3, 2012.
On November 3, 2010, 3,700,000 shares of the Company were returned to the Company for no cash or other consideration. These shares were cancelled.
On November 30, 2010, 425,000 units were issued at a purchase price of $1.00 per unit for total cash proceeds of $425,000. Each unit consisted of one share of common stock of the Company and one-half of one share non-detachable purchase warrant. Each whole warrant entitles the holder to purchase one share of common stock at a purchase price of $1.75 per share until November 30, 2012.
On November 30, 2010, 205,000 units were issued at a purchase price of $1.00 per unit for cancellation of a promissory note in the principal amount of $200,000 plus accrued interest of $5,000. Each unit consisted of one share of common stock of the Company and one-half of one share non-detachable purchase warrant. Each whole warrant entitles the holder to purchase one share of common stock at a purchase price of $1.75 per share until November 30, 2012.
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Warrants
A summary of the Companys share purchase warrants outstanding as of May 31, 2011 is presented below:
Number | |||||||
of | Exercise | ||||||
Warrants | Price | ||||||
Balance, February 28,2011 | 515,000 | $ | 1.75 | ||||
Issued | - | - | |||||
Balance, May 31, 2011 | 515,000 | $ | 1.75 |
Warrants expire on November 3, 2012 with respect to 200,000 warrant shares and November 30, 2012 with respect to 315,000 warrant shares.
Stock Options
Effective February 18, 2011, the Board of Directors adopted and approved the 2011 stock option plan. The purpose of the 2011 stock option plan is to enhance the long-term stockholder value of the Company by offering opportunities to directors, key employees, officers, independent contractors and consultants of the company to acquire and maintain stock ownership in the company in order to give these persons the opportunity to participate in the companys growth and success, and to encourage them to remain in the service of the company. A total of 2,000,000 shares of our common stock are available for issuance and during the 12 month period after the first anniversary of the adoption of the 2011 stock option plan by the Board of Directors. During each 12 month period thereafter, the Board of Directors is authorized to increase the number of shares issuable by up to 500,000 shares.
A summary of the status of the Companys outstanding stock options for the three months ended May 31, 2011 is as follows:
Weighted | |||||||
Average | |||||||
Number | Exercise | ||||||
of Options | Price | ||||||
Balance, February 28,2011 | - | - | |||||
Granted | 1,110,000 | $ | 1.14 | ||||
Balance, May 31, 2011 | 1,110,000 | $ | 1.14 |
At May 31, 2011, the following stock options were outstanding:
Number of Options | ||||||||||||||||
Aggregate | Remaining | |||||||||||||||
Number | Exercise | Intrinsic | contractual | |||||||||||||
Total | Vested | Price | Expiry Date | Value | life (yrs) | |||||||||||
690,000 | (1) | - | $ | 1.14 | March 4, 2016 | $ | - | 4.76 | ||||||||
420,000 | (2) | - | $ | 1.14 | March 4, 2016 | - | 4.76 | |||||||||
1,110,000 | - | $ | - |
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted market price of the Companys stock for the options that were in-the-money at May 31, 2011.
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(1) |
These options were granted during the three month period ended May 31, 2011 and as of that date, none of the options have vested. These options vest quarterly over three years with the first vesting occurring on June 4, 2011. The fair value of these options on the grant date was calculated to be $427,800. The Company has recognized stock based compensation expense of $35,650 for the three month period ended May 31, 2011 and will recognize the remaining fair value over the vesting period. | |
(2) |
These options were granted during the three month period ended May 31, 2011 and as of that date, none of the options have vested. These options vest quarterly over three years with the first vesting occurring on June 4, 2011. The fair value of these options on the grant date was calculated to be $260,400. The Company has recognized stock based compensation expense of $21,700 for the three month period ended May 31, 2011 and will recognize the remaining fair value over the vesting period. |
The fair value of stock options granted has been determined using the Black-Scholes option pricing model using the following weighted average assumptions applied to stock options granted during the periods:
May 31, | May 31, | ||
2011 | 2010 | ||
Risk-free interest rate | 2.17% | NA | |
Expected life of options | 3.5 years | NA | |
Annualized volatility | 77.76% | NA | |
Dividend rate | 0% | NA |
The volatility was determined based on an index of volatility from comparable companies. The expected term of the options granted to employees is derived from the simplified method as prescribed by SEC Staff Accounting Bulletin Topic 14, Share-Based Payments (Topic 14), given that the Company has no historical experience with the exercise of options for which to base an estimate of the expected term of options granted. The Company anticipates it will discontinue the use of the simplified method of Topic 14 once sufficient historical option exercise behavior becomes apparent.
8. |
Income Taxes | |
The Company has losses to carry forward for income tax purposes as of May 31, 2011. There are no current or deferred tax expenses for the period ended May 31, 2011 due to the Company's loss position. The Company has fully reserved for any benefits of these losses. The deferred tax consequences of temporary differences in reporting items for financial statement and income tax purposes are recognized, as appropriate. Realization of the future tax benefits related to the deferred tax assets is dependent on many factors, including the Company's ability to generate taxable income within the net operating loss carry- forward period. Management has considered these factors in reaching its conclusion as to the valuation allowance for financial reporting purposes. | ||
A reconciliation between the income tax expense recognized in the Companys statements of operations and the income tax expense (benefit) computed by applying the domestic federal statutory income tax rate to the net loss for the three month periods ended May 31, 2011 and 2010 is as follows: | ||
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Three Months Ended May 31, | |||||||
2011 | 2010 | ||||||
Income tax benefit at federal statutory rate (34%) | $ | (153,412 | ) | $ | (5,615 | ) | |
State income tax benefit | (21,356 | ) | - | ||||
Change in valuation allowance | 155,269 | 4,391 | |||||
Other | 19,499 | 1,224 | |||||
Total income tax expense | $ | - | $ | - |
The composition of the Companys deferred tax assets as of May 31, 2011 and February 28, 2011 is as follows:
As of | As of | ||||||
May 31, | February 28, | ||||||
2011 | 2011 | ||||||
Net operating loss carry-forward | $ | 523,000 | $ | 398,000 | |||
Other | 19,000 | 10,000 | |||||
Less: Valuation allowance | (542,000 | ) | (408,000 | ) | |||
Net deferred tax asset | $ | - | $ | - |
As of May 31, 2011, the Company has an unused net operating loss carry forward balance of approximately $1,540,000 that is available to offset future taxable income. The potential income tax benefit of these losses has been offset by a full valuation allowance. This unused net operating loss carry-forward balance expires at various dates from 2026 to 2031.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Forward-Looking Statements
This report contains forward-looking statements. All statements other than statements of historical facts contained in this report, including statements regarding our future financial position, business strategy and plans and objectives of management for future operations, are forward looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as may, should, expect, plan, anticipate, believe, estimate, predict, potential or continue or the negative of these terms or other comparable terminology. Such forward-looking statements include, without limitation, statements regarding the anticipated designs of our future products, statements regarding our anticipated future regulatory submissions and statements regarding our anticipated future cash position.
We have based these forward-looking statements largely on our current expectations and projections about future events that we believe may affect our financial condition, results of operations, business strategy, and financial needs. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled Risk Factors that may cause our companys or our industrys actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Moreover, we are a new entrant to the pharmaceutical business and our management cannot predict all of the risks we will face in establishing our company in this industry, nor can we assess the impact that these risk factors might have on our business or the extent to which any risk factor, or any combination of risk factors, may cause actual results to differ materially from those contained in any forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
As used in this report and unless otherwise indicated, the terms we, us, PediatRx and our refer to PediatRx Inc., a Nevada corporation. Unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to common shares refer to the common shares in PediatRxs capital stock.
Corporate Overview
We are a development stage enterprise, as defined in ASC Topic 915, "Development Stage Entities". We are currently only involved in the sales and marketing and seeking rights of pharmaceutical products.
Our company was incorporated under the laws of Nevada on March 18, 2005 under the name Striker Energy Corp.. From inception until the summer of 2008, we were engaged in the mineral exploration business. During the summer of 2008, we abandoned our mineral exploration properties and made the transition to oil and gas. On July 23, 2010, our wholly owned subsidiary PediatRx Inc. completed the acquisition of Granisol® (granisetron HC1) oral solution ("Granisol") from Cypress Pharmaceutical, Inc. ("Cypress") and we abandoned our interest in the oil and gas business in favor of pursuing opportunities in the pharmaceutical industry. Effective December 28, 2010, we changed our name from Striker Energy Corp. to PediatRx Inc. to better reflect our new business. We effected this name change by a merger with our wholly-owned subsidiary, PediatRx Inc., a Nevada corporation.
Our Business
On June 17, 2010, we entered into a letter of intent with Cypress to acquire all of the assets associated with Granisol. First approved in 2008, Granisol is an oral, liquid granisetron solution, formerly distributed by Hawthorn Pharmaceuticals, a wholly-owned subsidiary of Cypress. The Food and Drug Administration has approved Granisol's use in cancer care to prevent nausea and vomiting associated with cancer therapy. On June 18, 2010 we caused PediatRx Inc. to be incorporated as a wholly-owned subsidiary of Striker Energy Corp. under the laws of the state of Nevada. On July 23, 2010 we, through our wholly-owned subsidiary PediatRx Inc., acquired Granisol from Cypress and we turned our focus to the pharmaceutical industry and terminated our interest in oil and natural gas exploration. Effective December 28, 2010, we changed our name from Striker Energy Corp. to PediatRx Inc. to better reflect our new business. We effected this name change by a merger with our wholly-owned subsidiary, PediatRx Inc.
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Granisol is our first acquisition. We intend to be the sole distributor of Granisol and to focus our marketing efforts on specialists in the field of pediatric oncology and supportive care. We do not now, nor do we intend to manufacture our products. We contracted manufacturing to Therapex, a division of E-Z-EM Canada Inc., a subsidiary of E-Z-EM, Inc., the entity that manufactured Granisol for Cypress.
We intend to develop our business by acquiring rights to, and/or substantially all of the assets associated with drugs already approved for use by the United States Food and Drug Administration in oncology, supportive care, pediatric hospital specialties and other relevant medical specialties and to become the sole distributor of such products in the United States.
We intend to accelerate our recovery of acquisition costs and to add value to our acquisition of Granisol, and to future acquisitions through four principal means:
Marketing
We intend to promote the relative merits of Granisol, and future products, to healthcare professionals, payers, end-users and their caregivers.
Reformulation
We intend to alter non-pharmacological elements of our products to offer greater choice to consumers by reformulating our products into multiple appealing, easy-to-take presentations.
Extension
We intend to seek applications for our products in fields outside of pediatric oncology and supportive care.
Expanded distribution
We intend to expand distribution of our products in foreign markets, likely through partnerships and licensing agreements.
Competition
Granisol is the only oral, liquid granisetron HCl solution currently on the market and approved by the United States Food and Drug Administration.
We believe that our singular focus on the acquisition, development, and commercialization of pharmaceutical drugs approved by the United States Food and Drug Administration for use in oncology, supportive care, pediatric hospital specialties and other relevant medical specialties is a competitive advantage over otherwise similar pharmaceutical companies. We are aware of no other company focused exclusively on pediatric hospital care, oncology and supportive care. The specialty pharmaceutical industry is, by definition, fragmented and it is a competitive market. We compete with many pharmaceutical companies, both large and small, for staff, and for product acquisitions and licensing.
We differ from many early-stage pharmaceutical companies in that we intend to devote a large portion of our capital to acquisition of products, reformulating existing products, and to sales and marketing, and we hope to recognize revenue from product sales in the foreseeable future. Many early stage pharmaceutical companies devote a greater portion of their capital to research and development with no expectation of revenue from product sales in the foreseeable future.
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Liquidity and Capital Resources
Our financial condition for the three month periods ended May 31, 2011 and 2010 and as of May 31, 2011 and February 28, 2011 for the respective items are summarized below.
We have incurred recurring losses from inception. Our ability to meet our financial liabilities and commitments is primarily dependent upon the continued financial support of our directors and shareholders, the continued issuance of equity to new or existing shareholders or the securing additional debt financing, and our ability to achieve and maintain profitable operations.
Working Capital
May 31, | February 28, | |||||
2011 | 2011 | |||||
Current assets | $ | 607,726 | $ | 716,107 | ||
Current liabilities | 577,836 | 564,425 | ||||
Working capital surplus (deficit) | $ | 29,890 | $ | 151,682 |
As of May 31, 2011 our working capital decreased by $121,792 due largely to spending related to the promotion of Granisol and infrastructure costs. While we completed the placement of an unsecured promissory note of $250,000 during the period, this increase in working capital was offset by cash used in operations during the three month period ended May 31, 2011 of $350,714.
Cash Flows
Three Months Ended | ||||||
May 31, | ||||||
2011 | 2010 | |||||
Cash used in operating activities | $ | (350,714 | ) | $ | (4,668 | ) |
Cash used in investing activities | - | - | ||||
Cash provided by financing activities | 250,000 | - | ||||
Net decrease in cash | $ | (100,714 | ) | $ | (4,668 | ) |
Cash Used in Operating Activities
Our cash used in
operating activities for the three months ended May 31, 2011 compared to our
cash used in operating activities for the three months ended May 31, 2010
increased by $346,046, primarily due to the expenses associated with
infrastructure and promotion costs associated with the launch of Granisol,
compared to very minor infrastructure costs in the earlier period prior to the
acquisition of Granisol.
Cash Provided by Financing Activities
Our cash
provided by financing activities for the three months ended May 31, 2011
compared to our cash provided by financing activities for the three months ended
May 31, 2010 increased by $250,000 due to the issuance of a $250,000, 5%
unsecured promissory note due on May 6, 2012, while no financing was secured
during the same period in 2010.
Cash Used in Investing Activities
There was no cash
used in investing activities for the three months ended May 31, 2011 and no cash
used in investing activities for the three months ended May 31, 2010.
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Results of Operations
The following summary of our results of operations should be read in conjunction with our unaudited financial statements for the three month period ended May 31, 2011.
Revenues
We have recognized $103,020 in net product
revenue during the three month period ended May 31, 2011 and $0 during the three
month period ended May 31, 2010 as a result of the Granisol acquisition and
product launch. We recognized no revenue prior to 2010. We sell Granisol
primarily to wholesalers. Our distribution channel includes our third party
logistics distributor and independent wholesalers who distribute the product
directly to hospitals and other end-user customers. The majority of our
shipments are made to wholesalers, with whom we have contracted to distribute
the product. We are also contracting with group purchasing organizations to
increase awareness of, and reduce market barriers for, Granisol.
Cost of Goods
Sold
We have recognized $16,732 in cost of goods sold during the
three month period ended May 31, 2011, and none during the three month period
ended May 31, 2010, as a result of the Granisol acquisition and product launch.
We recognized no cost of goods sold prior to 2010. Our cost of goods sold
consists primarily of our third-party manufacturing costs, third-party inventory
management and distribution costs, wholesaler fee for services costs and
freight-in on inventory purchases.
Expenses
The table below shows our expenses for the
three month periods ended May 31, 2011 and 2010.
Three Months Ended | Three Months Ended | |||||
May 31, 2011 | May 31, 2010 | |||||
Expenses | ||||||
Bank charges and interest | $ | 599 | $ | 62 | ||
Employee expenses | 97,180 | - | ||||
Stock based compensation | 57,350 | - | ||||
Consulting fees | 66,090 | - | ||||
Marketing expense | 169,220 | - | ||||
Travel expense | 11,932 | - | ||||
Filing fees | 4,139 | 743 | ||||
Interest expense | 9,396 | 625 | ||||
Investor relations | 7,382 | - | ||||
Legal and accounting fees | 44,058 | 10,246 | ||||
Licenses and permits | 5,587 | - | ||||
Management fees | - | 3,000 | ||||
Office expense | 3,209 | - | ||||
Insurance expense | 5,612 | - | ||||
Regulatory expense | 29,854 | - | ||||
Rent | 1,592 | 600 | ||||
Transfer agent fees | 1,055 | 1,238 | ||||
Amortization | 22,070 | - | ||||
State franchise tax | 1,175 | - | ||||
Total | $ | 537,500 | $ | 16,514 |
In the three month period ended May 31, 2011, our expenses increased by approximately $521,000 over the three month period ended May 31, 2010, due primarily to a) employee, consulting, marketing, travel, licenses and permits, insurance, regulatory, and website development expenses of approximately $455,000 associated with sales and marketing promotion and the establishment of infrastructure to support Granisol, including stock based compensation expense of $57,350, while there were no similar expenses in the earlier period, b) an increase in legal and accounting, investor relations, interest, transfer agent, and filing fees and expenses of approximately $53,000, primarily due to full operations requiring more complex audits and reviews, increased legal support and increased general infrastructure costs and c) amortization expense of approximately $22,000 on the product rights and know-how related to the Granisol acquisition.
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Cash Requirements
Our primary objectives for the next twelve month period are to complete the systems, processes and infrastructure within our company required to support Granisol promotion and to continue to look at opportunities within the pharmaceutical markets to acquire or license and/or reformulate other pharmaceutical products.
Specifically, we estimate our operating expenses and working capital requirements for the next 12 months to be as follows:
Expense | Amount | ||
Bank charges and interest | $ | 3,000 | |
Filing fees | 10,000 | ||
Investor relations | 100,000 | ||
Legal and accounting fees | 120,000 | ||
Licenses and permits | 57,000 | ||
Marketing expense | 1,100,000 | ||
Insurance expense | 100,000 | ||
Personnel and consulting expense | 1,200,000 | ||
Regulatory & pharmacovigilance expense | 400,000 | ||
Product development expense | 1,000,000 | ||
Transfer agent fees | 10,000 | ||
Other general & administrative expense | 100,000 | ||
Total: | $ | 4,200,000 |
These expenses and working capital requirements will be offset to some degree by revenue generation from sales of Granisol. There can be no assurance that we will generate revenues significant enough to offset these expenses to some or any degree and that we will not have significant needs for other financing to support the activities of our company. Additionally, there can be no assurance that we will be able to identify additional opportunities that we consider attractive enough to acquire or develop or that we will be able to raise funds when needed or, if funds are available to us, that they can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, if and when it is needed, and if sales of Granisol are insufficient to ultimately fund the operating costs of the business, we may be forced to cease the operation of our business.
Future Financing
We will require additional financing to fund our planned operations, including acquiring and/or developing any potential products. We currently do not have committed sources of additional financing and may not be able to obtain additional financing, particularly, if the volatile conditions in the stock and financial markets, and more particularly the market for early development stage biotechnology research and development company stocks persist.
There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, if and when it is needed, we will be forced to delay or scale down some or all of our marketing, business development and product development activities or perhaps even cease the operation of our business.
Since inception we have funded our operations primarily through equity and debt financings and we expect that we will continue to fund our operations through the equity and debt financing. If we are able to raise additional financing by issuing equity securities, our existing stockholders' ownership will be diluted. Obtaining commercial or other loans, assuming those loans would be available, will increase our liabilities and future cash commitments.
There is no assurance that we will be able to maintain operations at a level sufficient for an investor to obtain a return on his, her, or its investment in our common stock. Further, we may continue to be unprofitable.
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Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.
Going Concern
Our financial statements and information for the three month period ended May 31, 2011, have been prepared by our management on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. We have generated limited revenues to date and have incurred a net loss of approximately $451,212 during the three month period ended May 31, 2011, and approximately $1,749,995 from inception (March 18, 2005) through May 31, 2011. We cannot provide any assurance that we will ultimately achieve profitable operations or become cash flow positive, or raise additional funds through the sale of debt and/or equity.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not Applicable
ITEM 4. CONTROLS AND PROCEDURES.
Disclosure controls and procedures
We maintain "disclosure controls and procedures", as that term is defined in Rule 13a-15(e), promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company's reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and our principal accounting officer to allow timely decisions regarding required disclosure.
As required by paragraph (b) of Rules 13a-15 under the Securities Exchange Act of 1934, as amended, our management, with the participation of our principal executive officer and our principal financial officer, evaluated our company's disclosure controls and procedures as of the end of the period covered by this quarterly report on Form 10-Q. Based on this evaluation, our management concluded that as of the end of the period covered by this quarterly report on Form 10-Q, our disclosure controls and procedures were effective.
Changes in internal control over financial reporting
There were no changes in our internal control over financial reporting during the first quarter of our fiscal year ended February 29, 2012 that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.
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PART IIOTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.
ITEM 1A. RISK FACTORS.
An investment in our common stock involves a number of very significant risks. You should carefully consider the following risks and uncertainties in addition to other information in this report in evaluating our company and its business before purchasing shares of our company's common stock. Our business, operating results and financial condition could be seriously harmed due to any of the following risks. You could lose all or part of your investment due to any of these risks.
Risks Related to Our Company
Our independent auditors have expressed substantial doubt about our ability to continue as a going concern.
We have generated minimal revenue from operations since our incorporation. During the three month period ended May 31, 2011, we incurred a net loss of $451,212. From inception through May 31, 2011, we incurred an aggregate loss of $1,749,995. We anticipate that we will continue to incur operating expenses which will be offset to some degree by revenues from the sales of Granisol. Unless we are able to grow the revenues from Granisol significantly, we may never reach a point where we have positive net income. If we cannot substantially increase our revenues from sales of Granisol, we will continue to generate losses and will require additional funding to remain in business. We estimate our average monthly expenses over the next 12 months to be approximately $350,000, including product development and general and administrative expenses, but excluding any additional product acquisition costs. On May 31, 2011, we had cash and cash equivalents of approximately $448,678. In order to fund our anticipated budget for the next 12 months, excluding additional product acquisition costs, we believe that we will need to raise approximately $2 million. This amount could increase if we encounter difficulties that we cannot anticipate at this time and if we were to add further commercialization resources and/or acquire or license additional products. We have traditionally raised our operating capital from the sale of equity securities and the placement of unsecured promissory notes, but there can be no assurance that we will continue to be able to do so. If we cannot raise the money that we need in order to continue to operate our business, we will be forced to delay, scale back or eliminate some or all of our proposed operations. If any of these were to occur, there is a substantial risk that our business would fail.
These circumstances raise substantial doubt about our ability to continue as a going concern, as described in the explanatory paragraph to our independent auditors' report on our financial statements for the year ended February 28, 2011, which are included in our annual report on Form 10-K filed on May 17, 2011. Although our financial statements raise substantial doubt about our ability to continue as a going concern, they do not reflect any adjustments that might result if we are unable to continue our business. Our financial statements contain additional note disclosure describing the circumstances that lead to this disclosure by our independent auditors.
Our substantial debt and other financial obligations could impair our financial condition and our ability to fulfill our debt obligations. Any refinancing of this substantial debt could be at significantly higher interest rates.
As of May 31, 2011, we had total debt of approximately $519,613 (including accrued interest of approximately $19,613). Our substantial indebtedness and other current financial obligations and any that we may become a party to in the future could:
- impair our ability to obtain financing in the future for working capital, capital expenditures, acquisitions or general corporate purposes;
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have a material adverse effect on us if we fail to comply with financial and affirmative and restrictive covenants in debt agreements and an event of default occurs as a result of a failure that is not cured or waived;
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require us to dedicate a substantial portion of our cash flow for interest payments on our indebtedness and other financial obligations, thereby reducing the availability of our cash flow to fund working capital and capital expenditures;
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limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; and
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place us at a competitive disadvantage compared to our competitors that have proportionally less debt.
If we are unable to meet our debt service obligations and other financial obligations, we could be forced to restructure or refinance our indebtedness and other financial transactions, seek additional equity capital or sell our assets. We might then be unable to obtain such financing or capital or sell our assets on satisfactory terms, if at all. Any refinancing of our indebtedness could be at significantly higher interest rates, and/or incur significant transaction fees.
We are an early-stage company with a limited operating history, which may hinder our ability to successfully meet our objectives.
We are an early-stage company with only a limited operating history upon which to base an evaluation of our current business and future prospects. While we have recently acquired Granisol, our sales have been minimal and, there can be no assurance that we will be successful in our efforts to increase sales. In addition, Granisol requires significant expenditure with regard to the sales and marketing effort necessary to support sales growth. As a result, the revenue and income potential of our business is unproven. In addition, because of our limited operating history, we have limited insight into trends that may emerge and affect our business. Errors may be made in predicting and reacting to relevant business trends and we will be subject to the risks, uncertainties and difficulties frequently encountered by early-stage companies in evolving markets. We may not be able to successfully address any or all of these risks and uncertainties. Failure to adequately do so could cause our business, results of operations and financial condition to suffer.
Our CEO and CFO are employed elsewhere and their time and effort will not be devoted to our company full-time.
Our CEO and CFO are each employed in other positions with other companies. As a result, our company is and will continue to be managed on a part-time basis. Our business could be adversely impacted by the lack of full time management.
If we are unable to successfully recruit qualified managerial and field personnel, we may not be able to continue our operations.
In order to successfully implement and manage our business plan, we will depend upon, among other things, successfully recruiting qualified managerial and field personnel having experience in the pharmaceutical industry. Competition for qualified individuals is intense. We may not be able to find, attract and retain qualified personnel on acceptable terms. If we are unable to find, attract and retain qualified personnel with technical expertise, our business operations could suffer.
Future growth could strain our resources, and if we are unable to manage our growth, we may not be able to successfully implement our business plan.
We hope to experience rapid growth in our operations, which will place a significant strain on our management, administrative, operational and financial infrastructure. Our future success will depend in part upon the ability of our executive officers to manage growth effectively. This will require that we hire and train additional personnel to manage our expanding operations. In addition, we must continue to improve our operational, financial and management controls and our reporting systems and procedures. If we fail to successfully manage our growth, we may be unable to execute upon our business plan.
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Risks Relating to the Pharmaceutical Business
If we are unable to successfully acquire, develop or commercialize new products, our operating results will suffer.
Our future results of operations will depend to a significant extent upon our ability to successfully acquire, develop and commercialize new products in a timely manner. There are numerous difficulties in acquiring, developing and commercializing new products, including:
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acquiring, developing, testing and manufacturing products in compliance with regulatory standards in a timely manner;
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failure to receive requisite regulatory approvals for such products in a timely manner or at all;
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acquiring, developing and commercializing a new product is time consuming, costly and subject to numerous factors, including legal actions brought by our competitors, that may delay or prevent the development and commercialization of new products;
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experiencing delays or unanticipated costs;
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experiencing delays as a result of limited resources at FDA or other regulatory agencies; and
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changing review and approval policies and standards at FDA and other regulatory agencies.
As a result of these and other difficulties, products in development by us may or may not receive timely regulatory approvals, or approvals at all, necessary for marketing by us or other third-party partners. If any of our products are not timely approved or, when acquired or developed and approved, cannot be successfully manufactured or timely commercialized, our operating results could be adversely affected. We cannot guarantee that any investment we make in developing products will be recouped, even if we are successful in commercializing those products.
Our pharmaceutical expenditures may not result in commercially successful products.
We cannot be sure our business expenditures will result in the successful acquisition, development or launch of products that will prove to be commercially successful or will improve the long-term profitability of our business. If such business expenditures do not result in successful acquisition, development or launch of commercially successful brand products our results of operations and financial condition could be materially adversely affected.
Third-parties may claim that we infringe their proprietary rights and may prevent us from manufacturing and selling some of our products.
The manufacture, use and sale of new products that are the subject of conflicting patent rights have been the subject of substantial litigation in the pharmaceutical industry. These lawsuits relate to the validity and infringement of patents or proprietary rights of third parties. Litigation may be costly and time-consuming, and could divert the attention of our management and technical personnel. In addition, if we infringe on the rights of others, we could lose our right to develop, manufacture or market products or could be required to pay monetary damages or royalties to license proprietary rights from third parties. Although the parties to patent and intellectual property disputes in the pharmaceutical industry have often settled their disputes through licensing or similar arrangements, the costs associated with these arrangements may be substantial and could include on-going royalties. Furthermore, we cannot be certain that the necessary licenses would be available to us on commercially reasonable terms, or at all. As a result, an adverse determination in a judicial or administrative proceeding or failure to obtain necessary licenses could prevent us from manufacturing and selling a number of our products, and could have a material adverse effect on our business, results of operations, financial condition and cash flows.
The loss of or inability to attract key personnel could cause our business to suffer.
The success of our present and future operations will depend, to a significant extent, upon the experience, abilities and continued services of key personnel. We cannot assure you that we will be able to attract and retain key personnel. Employment agreements with our senior executive do not guarantee that our senior executive officers will remain employed by us for a significant period of time, or at all. We do not carry key-employee life insurance on any of our officers.
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We may need to raise additional funds in the future which may not be available on acceptable terms or at all.
We may consider issuing additional debt or equity securities in the future to fund potential acquisitions or investments, to refinance existing debt, or for general corporate purposes. If we issue equity or convertible debt securities to raise additional funds, our existing stockholders may experience dilution, and the new equity or debt securities may have rights, preferences and privileges senior to those of our existing stockholders. If we incur additional debt, it may increase our leverage relative to our earnings or to our equity capitalization, requiring us to pay additional interest expenses. We may not be able to market such issuances on favorable terms, or at all, in which case, we may not be able to develop or enhance our products, execute our business plan, take advantage of future opportunities, or respond to competitive pressures or unanticipated customer requirements.
Extensive industry regulation has had, and will continue to have, a significant impact on our business, especially our product development, manufacturing and distribution capabilities.
All pharmaceutical companies are subject to extensive, complex, costly and evolving government regulation. For the U.S., this is principally administered by the FDA and to a lesser extent by the DEA and state government agencies, as well as by varying regulatory agencies in foreign countries where products or product candidates are being manufactured and/or marketed. The Federal Food, Drug and Cosmetic Act, the Controlled Substances Act and other federal statutes and regulations, and similar foreign statutes and regulations, govern or influence the testing, manufacturing, packing, labeling, storing, record keeping, safety, approval, advertising, promotion, sale and distribution of our products.
Under these regulations, we may become subject to periodic inspection of our facilities, procedures and operations and/or the testing of our products by the FDA, the DEA and other authorities, which conduct periodic inspections to confirm that we are in compliance with all applicable regulations. In addition, the FDA and foreign regulatory agencies conduct pre-approval and post-approval reviews and plant inspections to determine whether our systems and processes are in compliance with cGMP and other regulations. Following such inspections, the FDA or other agency may issue observations, notices, citations and/or Warning Letters that could cause us to modify certain activities identified during the inspection. FDA guidelines specify that a Warning Letter is issued only for violations of regulatory significance for which the failure to adequately and promptly achieve correction may be expected to result in an enforcement action. We are required to report adverse events associated with our products to FDA and other regulatory authorities. Unexpected or serious health or safety concerns would result in labeling changes, recalls, market withdrawals or other regulatory actions.
The range of possible sanctions includes, among others, FDA issuance of adverse publicity, product recalls or seizures, fines, total or partial suspension of production and/or distribution, suspension of the FDAs review of product applications, enforcement actions, injunctions, and civil or criminal prosecution. Any such sanctions, if imposed, could have a material adverse effect on our business, operating results, financial condition and cash flows. Under certain circumstances, the FDA also has the authority to revoke previously granted drug approvals. Similar sanctions as detailed above may be available to the FDA under a consent decree, depending upon the actual terms of such decree. If internal compliance programs do not meet regulatory agency standards or if compliance is deemed deficient in any significant way, it could materially harm our business.
The pharmaceutical industry is highly competitive.
The pharmaceutical industry has an intensely competitive environment that will require an on-going, extensive search for technological innovations and the ability to market products effectively, including the ability to communicate the effectiveness, safety and value of products to healthcare professionals in private practice, group practices and MCOs. We are smaller than all of our competitors. Most of our competitors have been in business for a longer period of time than us, have a greater number of products on the market and have greater financial and other resources than we do. Furthermore, recent trends in this industry are toward further market consolidation of large drug companies into a smaller number of very large entities, further concentrating financial, technical and market strength and increasing competitive pressure in the industry. If we directly compete with them for the same markets and/or products, their financial strength could prevent us from capturing a profitable share of those markets. It is possible that developments by our competitors will make any products or technologies that we acquire non-competitive or obsolete.
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Risks Relating to Our Common Stock
If we issue additional shares in the future, it will result in the dilution of our existing shareholders.
Our articles of incorporation authorize the issuance of up to 150,000,000 shares of common stock with a par value of $0.0001 per share. Our Board of Directors may choose to issue some or all of such shares to acquire one or more products and to fund our overhead and general operating requirements. The issuance of any such shares will reduce the book value per share and may contribute to a reduction in the market price of the outstanding shares of our common stock. If we issue any such additional shares, such issuance will reduce the proportionate ownership and voting power of all current shareholders. Further, such issuance may result in a change of control of our corporation.
Trading of our stock is restricted by the Securities Exchange Commissions penny stock regulations, which may limit a stockholders ability to buy and sell our common stock.
The Securities and Exchange Commission has adopted regulations which generally define penny stock to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and accredited investors. The term accredited investor refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the Securities and Exchange Commission, which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customers account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customers confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchasers written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.
FINRA sales practice requirements may also limit a stockholders ability to buy and sell our stock.
In addition to the penny stock rules described above, the Financial Industry Regulatory Authority (known as FINRA) has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customers financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.
Our common stock is illiquid and the price of our common stock may be negatively impacted by factors which are unrelated to our operations.
Although our common stock is currently listed for quotation on the OTC Bulletin Board, trading through the OTC Bulletin Board is frequently thin and highly volatile. There is no assurance that a sufficient market will develop in our stock, in which case it could be difficult for shareholders to sell their stock. The market price of our common stock could fluctuate substantially due to a variety of factors, including market perception of our ability to achieve our planned growth, quarterly operating results of our competitors, trading volume in our common stock, changes in general conditions in the economy and the financial markets or other developments affecting our competitors or us. In addition, the stock market is subject to extreme price and volume fluctuations. This volatility has had a significant effect on the market price of securities issued by many companies for reasons unrelated to their operating performance and could have the same effect on our common stock.
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We do not intend to pay dividends on any investment in the shares of stock of our company.
We have never paid any cash dividends and currently do not intend to pay any dividends for the foreseeable future. Because we do not intend to declare dividends, any gain on an investment in our company will need to come through an increase in the stocks price. This may never happen and investors may lose all of their investment in our company.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None
ITEM 4. [REMOVED AND RESERVED].
ITEM 5. OTHER INFORMATION.
None
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ITEM 6. EXHIBITS.
Exhibits required by Item 601 of Regulation S-K:
No. | Description |
3.1 | Articles of Incorporation (attached as an exhibit to our registration statement on Form 10-SB filed on September 8, 2006) |
3.2 | Certificate of Change (attached as an exhibit to our current report on Form 8-K filed on September 15, 2008) |
3.3 | Articles of Merger (attached as an exhibit to our current report on Form 8-K filed on December 28, 2010) |
3.4 | Amended and Restated Bylaws (attached as an exhibit to our registration statement on Form 8-K filed on November 3, 2010) |
10.1 | Form of Private Placement Subscription Agreement (attached as an exhibit to our current report on Form 8-K filed on November 6, 2008) |
10.2 | Form of Private Placement Subscription Agreement dated June 15, 2009 (attached as an exhibit to our quarterly report on Form 10-Q filed on June 16, 2009) |
10.3 | Form of promissory note dated June 15, 2009 (attached as an exhibit to our quarterly report on Form 10-Q filed on June 16, 2009) |
10.4 | Consulting Agreement with Cameron Durrant dated May 28, 2010 (attached as an exhibit to our quarterly report on Form 10-Q filed on June 28, 2010) |
10.5 | Letter of Intent with Cypress Pharmaceuticals Inc. (attached as an exhibit to our quarterly report on Form 10-Q filed on June 28, 2010) |
10.6 | Form of Private Placement Subscription Agreement (attached as an exhibit to our current report on Form 8-K filed on June 17, 2010) |
10.7 | Form of Private Placement Subscription Agreement (attached as an exhibit to our current report on Form 8-K filed on July 9, 2010) |
10.8 | Asset Purchase Agreement dated July 22, 2010 with Cypress Pharmaceuticals, Inc. (attached as an exhibit to our current report on Form 8-K filed on July 28, 2010) (portions of the exhibit have been omitted pursuant to a request for confidential treatment) |
10.9 | Assignment and Assumption of Contract dated July 22, 2010 with Cypress Pharmaceuticals, Inc. (attached as an exhibit to our current report on Form 8-K filed on July 28, 2010) |
10.10 | Consent to Assignment by Therapex and E-Z-EM Canada Inc. (attached as an exhibit to our current report on Form 8-K filed on July 28, 2010) |
10.11 | Manufacturing and Supply Agreement dated July 22 2010 between Cypress Pharmaceuticals, Inc. and Therapex, a division of E-Z-EM Canada Inc. (attached as an exhibit to our current report on Form 8-K filed on July 28, 2010) (portions of the exhibit have been omitted pursuant to a request for confidential treatment) |
10.12 | Form of Private Placement Subscription Agreement (attached as an exhibit to our current report on Form 8-K filed on July 29, 2010) |
10.13 | Form of Promissory Note dated July 26, 2010 (attached as an exhibit to our current report on Form 8-K filed on July 29, 2010) |
10.14 | Employment Agreement effective July 1, 2010 with David L. Tousley (attached as an exhibit to our current report on Form 8-K filed on September 16, 2010) |
10.15 | Employment Agreement effective July 1, 2010 with Jorge Rodriguez (attached as an exhibit to our current report on Form 8-K filed on September 16, 2010) |
10.16 | Consulting Agreement effective July 1, 2010 with Cameron Durrant (attached as an exhibit to our current report on Form 8-K filed on September 28, 2010) |
10.17 | Form of Private Placement Subscription Agreement (attached as an exhibit to our current report on Form 8-K filed on September 28, 2010) |
10.18 | Form of Promissory Note dated September 16, 2010 (attached as an exhibit to our current report on Form 8-K filed on September 28, 2010) |
10.19 | Termination Agreement effective July 1, 2010 with Cameron Durrant (attached as an exhibit to our current report on Form 8-K filed on September 28, 2010) |
10.20 | Management Stock Agreement made effective July 1, 2010 with Cameron Durrant (attached as an exhibit to our current report on Form 8-K filed on November 3, 2010) |
10.21 | Management Stock Agreement made effective July 1, 2010 with David Tousley (attached as an exhibit to our current report on Form 8-K filed on November 3, 2010) |
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No. | Description |
10.22 | Form of Private Placement Subscription Agreement (attached as an exhibit to our current report on Form 8-K filed on November 3, 2010) |
10.23 | Form of Private Placement Subscription Agreement (attached as an exhibit to our current report on Form 8-K filed on December 2, 2010) |
10.24 | Form of Shares for Debt Subscription Agreement (attached as an exhibit to our current report on Form 8-K filed on December 2, 2010) |
10.25 | Cancellation Agreement dated February 9, 2011 with Cameron Durrant (attached as an exhibit to our current report on Form 8-K filed on February 10, 2011) |
10.26 | Cancellation Agreement dated February 9, 2011 with David Tousley (attached as an exhibit to our current report on Form 8-K filed on February 10, 2011) |
10.27 | Lock-up Agreement dated February 9, 2011 with Cameron Durrant (attached as an exhibit to our current report on Form 8-K filed on February 10, 2011) |
10.28 | Lock-up Agreement dated February 9, 2011 with David Tousley (attached as an exhibit to our current report on Form 8-K filed on February 10, 2011) |
10.29 | 2011 Stock Option Plan (attached as an exhibit to our current report on Form 8-K filed on February 22, 2011) |
10.30 | Form of Stock Option Agreement (attached as an exhibit to our current report on Form 8-K filed on March 7, 2011) |
10.31 | Form of Private Placement Subscription Agreement including Form of Promissory Note dated May 6, 2011 (attached as an exhibit to our current report on Form 8-K filed on May 11, 2011) |
10.32 | Form of Promissory Note Amendment dated May 18, 2011 (attached as an exhibit to our current report on Form 8-K filed on May 18, 2011) |
10.33 | Form of Promissory Note Amendment dated May 23, 2011 (attached as an exhibit to our current report on Form 8-K filed on May 23, 2011) |
31.1* | Certification of Cameron Durrant Pursuant to Section 302 of the Sarbanes-Oxley Act Of 2002 |
31.2* | Certification of David L. Tousley Pursuant to Section 302 of the Sarbanes-Oxley Act Of 2002 |
32.1* | Certification of Cameron Durrant Pursuant to Section 906 of the Sarbanes-Oxley Act Of 2002 |
32.2* | Certification of David L. Tousley Pursuant to Section 906 of the Sarbanes-Oxley Act Of 2002 |
* Filed herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
PEDIATRX INC. | |
/s/ Cameron Durrant | |
Cameron Durrant | |
President, Chief Executive Officer and Director | |
(Principal Executive Officer) | |
Date: July 8, 2011 | |
/s/ David L. Tousley | |
David L. Tousley | |
Secretary, Treasurer, Chief Financial Officer and Director | |
(Principal Financial Officer and Principal Accounting Officer) | |
Date: July 8, 2011 |
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