|X|
|
ANNUAL REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for
the fiscal year ended March 31,
2008.
|
|__|
|
TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for
the transition period from [__] to
[__].
|
Delaware
|
39-1523370
|
|
(State
or Other Jurisdiction of Incorporation or Organization)
|
(I.R.S.
Employer Identification No.)
|
|
One
North End Avenue
New
York, New York
|
10282
|
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
Common
Stock, par value $0.01 per share
|
||
(Title
of class)
|
None
|
||
(Title
of class)
|
ITEM
1.
|
BUSINESS
|
1
|
ITEM 1A. | RISK FACTORS |
25
|
ITEM
2.
|
PROPERTIES
|
39
|
ITEM
3.
|
LEGAL
PROCEEDINGS
|
39
|
ITEM
4.
|
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS
|
40
|
ITEM
5.
|
MARKET
FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
|
40
|
ITEM
6.
|
SELECTED
FINANCIAL DATA
|
44
|
ITEM
7.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
46
|
ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
58
|
ITEM
8.
|
FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA
|
58
|
ITEM
9.
|
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
|
58
|
ITEM
9A.
|
CONTROLS AND PROCEDURES |
58
|
ITEM 9B. | OTHER INFORMATION |
59
|
ITEM
10.
|
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
60
|
ITEM
11.
|
EXECUTIVE
COMPENSATION
|
65
|
ITEM
12.
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
|
77
|
ITEM
13.
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
|
80
|
ITEM
14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES |
81
|
ITEM
15.
|
EXHIBITS,
FINANCIAL STATEMENT SCHEDULES
|
82
|
A.
|
Business
Overview
|
B.
|
Products
and Drug Development Programs
|
1.
|
Pafuramidine
|
i.
|
Supportive
Phase I Safety Study in Healthy
Volunteers
|
ii.
|
Definitive
Bioequivalence Study
|
iii.
|
Pafuramidine
for PCP in HIV/AIDS
Patients
|
iv.
|
Pafuramidine
for African Sleeping Sickness
Treatment
|
·
|
Pivotal
Phase III Clinical
Trial
|
·
|
Funding
for African Sleeping Sickness Research and Clinical
Trials
|
v.
|
Pafuramidine
for Malaria Prophylaxis
(Prevention)
|
vi.
|
Pafuramidine
for Malaria
Treatment
|
vii.
|
Pafuramidine
Licensing
Agreements
|
2.
|
Drug
Discovery and Development
Programs
|
i.
|
Antifungal
Program
|
ii.
|
Hepatitis
C
|
iii.
|
Antibacterial
Program
|
iv.
|
Other
Programs and
Trials
|
C.
|
Collaboration
in Contract Research Services
|
D.
|
Technology
of Aromatic Cationic
Compounds
|
E.
|
Collaborations
|
1.
|
Scientific
Consortium at UNC-CH, Georgia State, Duke, and
Auburn
|
2.
|
Clinical
Research Agreement with
UNC-CH
|
F.
|
Our
Subsidiaries
|
1.
|
Immtech
Hong Kong
Limited
|
2.
|
Immtech
Therapeutics
Limited
|
3.
|
Super
Insight
Limited
|
4.
|
Immtech
Life Science
Limited
|
G.
|
Manufacturing
|
1.
|
Pafuramidine
Maleate
|
2.
|
Aromatic
Cationic
Compounds
|
3.
|
Third
Party
Sources
|
4.
|
Property
in
China
|
H.
|
Strategy
|
I.
|
Research
and
Development
|
J.
|
Patents
and Trade
Secrets
|
K.
|
Governmental
Regulation
|
1.
|
Drugs
for Serious or Life-Threatening
Illnesses
|
2.
|
Other
U.S. Regulatory
Requirements
|
L.
|
Competition
|
M.
|
Employees
|
·
|
potential
disruption of our on-going business and distraction of
management;
|
·
|
difficulty
with integration of personnel and financial and other
systems;
|
·
|
hiring
additional management and other critical personnel;
and
|
·
|
increasing
the scope, geographic diversity and complexity of our
operations.
|
·
|
slower-than-anticipated
enrollment of volunteers in the
trials;
|
·
|
lower-than-anticipated
recruitment or retention rate of volunteers in the
trials;
|
·
|
serious
adverse events related to the product
candidates;
|
·
|
unsatisfactory
results of any clinical trial;
|
·
|
the
failure of our principal third-party investigators to perform our clinical
trials on our anticipated schedules;
or
|
·
|
different
interpretations of our preclinical and clinical data, which could
initially lead to inconclusive
results.
|
A.
|
Market
Information
|
High
|
Low
|
||||||||
2005
|
|||||||||
Quarter
ended March 31, 2005
|
$15.70
|
$10.03
|
|||||||
Quarter
ended June 30, 2005
|
$13.89
|
$9.50
|
|||||||
Quarter
ended September 30, 2005
|
$12.63
|
$10.61
|
|||||||
Quarter
ended December 31, 2005
|
$11.94
|
$6.30
|
|||||||
2006
|
|||||||||
Quarter
ended March 31, 2006
|
$9.62
|
$6.80
|
|||||||
Quarter
ended June 30, 2006
|
$8.25
|
$6.66
|
|||||||
Quarter
ended September 30, 2006
|
$6.98
|
$4.50
|
|||||||
Quarter
ended December 31, 2006
|
$9.60
|
$4.80
|
|||||||
2007
|
|||||||||
Quarter
ended March 31, 2007
|
$8.90
|
$5.00
|
|||||||
Quarter
ended June 30, 2007
|
$8.50
|
$5.68
|
|||||||
Quarter
ended September 30, 2007
|
$8.99
|
$5.80
|
|||||||
Quarter
ended December 31, 2007
|
$8.40
|
$2.10
|
|||||||
2008
|
|||||||||
Quarter
ended March 31, 2008
|
$3.75 |
$0.48
|
|||||||
B.
|
Stockholders
|
C.
|
Dividends
|
D.
|
Recent
Sales of Unregistered
Securities
|
·
|
On
January 8, 2008, a holder of Series A Preferred Stock converted 4,000
shares of Series A Preferred Stock and accrued dividends into 23,083
shares of Common
Stock.
|
E.
|
Stock
Performance Graph
|
ANNUAL
RETURN PERCENTAGE
YEARS
ENDED
|
||||||
Company Name / Index
|
Mar
04
|
Mar
05
|
Mar
06
|
Mar
07
|
Mar
08
|
|
Immtech Pharmaceuticals, Inc.
|
311.58
|
-32.93
|
-37.59
|
-25.80
|
-85.74
|
|
S&P 500 Index
|
35.13
|
6.67
|
11.71
|
11.83
|
-5.07
|
|
Peer Group
|
158.50
|
0.30
|
28.17
|
-14.58
|
-19.37
|
Fiscal
Year Ended March 31,
|
||||||||||||||||||||
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||
Statement
of Operations:
|
||||||||||||||||||||
REVENUES
|
$ | 9,717 | $ | 4,318 | $ | 3,575 | $ | 5,931 | $ | 2,416 | ||||||||||
EXPENSES:
|
||||||||||||||||||||
Research and development
|
11,570 | 8,760 | 9,680 | 7,309 | 3,292 | |||||||||||||||
General and administrative
|
9,100 | (7) | 9,095 | (5) | 9,631 | (4) | 12,190 | (3) | 11,989 | (1) | ||||||||||
Other
|
(1,875 | )(6) | ||||||||||||||||||
Total expenses
|
20,670 | 15,980 | 19,311 | 19,499 | 15,282 | |||||||||||||||
LOSS
FROM OPERATIONS
|
(10,953 | ) | (11,662 | ) | (15,736 | ) | (13,569 | ) | (12,866 | ) | ||||||||||
OTHER
INCOME (EXPENSE):
|
||||||||||||||||||||
Interest income
|
440 | 530 | 210 | 135 | 20 | |||||||||||||||
Interest expense
|
||||||||||||||||||||
Other income (expense) – net
|
440 | 530 | 210 | 135 | 20 | |||||||||||||||
NET
LOSS
|
(10,513 | ) | (11,132 | ) | (15,526 | ) | (13,433 | ) | (12,846 | ) | ||||||||||
PREFERRED
STOCK DIVIDENDS(2)
|
(529 | ) | (551 | ) | (764 | ) | (580 | ) | (3,526 | )(2) | ||||||||||
NET
(LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS
|
(11,042 | ) | (11,683 | ) | (16,290 | ) | (14,013 | ) | (16,372 | ) | ||||||||||
BASIC
AND DILUTED NET (LOSS) INCOME PER SHARE ATTRIBUTABLE TO COMMON
STOCKHOLDERS:
|
||||||||||||||||||||
Net loss
|
(0.68 | ) | (0.78 | ) | (1.31 | ) | (1.27 | ) | (1.43 | ) | ||||||||||
Preferred Stock dividends
|
(0.03 | ) | (0.04 | ) | (0.06 | ) | (0.05 | ) | (0.39 | ) | ||||||||||
BASIC
AND DILUTED NET (LOSS) INCOME PER SHARE ATTRIBUTABLE TO COMMON
STOCKHOLDERS
|
$ | (0.71 | ) | $ | (0.82 | ) | $ | (1.37 | ) | $ | (1.32 | ) | $ | (1.82 | ) | |||||
WEIGHTED
AVERAGE SHARES USED IN COMPUTING BASIC AND DILUTED LOSS PER
SHARE
|
15,477,463 | 14,207,048 | 11,852,630 | 10,606,917 | 8,977,817 |
Fiscal
Year Ended March 31,
|
||||||||||||||||||||
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||
Balance
Sheet Data:
|
||||||||||||||||||||
Cash
and cash equivalents
|
5,996 | 12,462 | 14,138 | 9,472 | 6,745 | |||||||||||||||
Restricted
funds on deposit
|
3,776 | 3,119 | 530 | 2,044 | 2,155 | |||||||||||||||
Working
capital
|
4,242 | 10,991 | 11,910 | 8,069 | 6,136 | |||||||||||||||
Total
assets
|
13,438 | 19,144 | 18,554 | 15,276 | 12,586 | |||||||||||||||
Preferred
Stock
|
8,267 | 8,796 | 10,015 | 7,752 | 9,522 | |||||||||||||||
Deficit
accumulated during development stage
|
(111,567 | ) | (100,525 | ) | (88,842 | ) | (72,552 | ) | (58,539 | ) | ||||||||||
Stockholders’
equity
|
7,600 | 14,456 | 15,603 | 11,741 | 9,748 |
(1)
|
Includes
non-cash charges of (i) $2,744 of costs related to the issuance of
warrants to purchase 600,000 shares of Common Stock issued to China
Harvest International Ltd as payment for “services to assist in obtaining
regulatory approval to conduct clinical trials in China, (ii) $63 for
the issuance of 10,000 shares of Common Stock issued to Mr. David Tat Koon
Shu for consulting services in China, (iii) $1,400 for the issuance
of 100,000 shares of Common Stock issued to Fulcrum for assisting with
listing the Company’s securities on a recognized stock exchange and for
consulting services, (iv) $2,780 for the vested portion of 91,667
shares of Common Stock and the vested portion of warrants to purchase
320,835 shares of Common Stock issued to Fulcrum during the fiscal year
based on agreements signed March 21, 2003 and (v) $247 for
the attainment of certain milestones with respect to the vesting of
warrants to purchase 20,000 shares of Common Stock issued to Pilot Capital
Groups, LLC (f/k/a The Gabriela Group, LLC) based upon agreements signed
July 31, 2002.
|
(2)
|
See
Note 8 to the notes to our consolidated financial statements included in
this Annual Report on Form 10-K for a discussion on the Preferred Stock
dividends.
|
(3)
|
Includes
non-cash charges of (i) $4,531 of costs related to the four year
extension of warrants received from RADE Management Corporation (“RADE”),
(ii) $233 for the issuance of 20,000 options to Mr. Tony Mok for
consulting services in China, (iii) $301 for the extension of the
unexercised Fulcrum warrants to December 23, 2005 and (iv) $10 for
the extension of warrants initially issued to underwriters to purchase
21,400 shares of Common Stock from April 24, 2004 to May 11,
2004.
|
(4)
|
Includes
non-cash charges of $125 for the repricing and reduced exercise period of
125,000 Fulcrum warrants. Fulcrum exercised 35,000
warrants. The remaining 90,000
expired.
|
(5)
|
Includes
non-cash charges of (i) $36 for the issuance of 5,000 common shares to
Tulane University for the AQ13 agreement, (ii) $36 for the issuance of
5,000 common shares to T. Stephen Thompson under his retirement agreement,
and (iii) $564,000 for the issuance of 80,000 common shares to China
Pharmaceutical for the attainment of certain
milestones.
|
(6)
|
Includes
the award by the International Court of Arbitration of the International
Chamber of Commerce for the breach of a testing agreement by Neurochem,
Inc., and attorneys’ fees and costs of approximately
$1,875,000.
|
(7)
|
Includes
non-cash charges of (i) $172 for the issuance of 50,000 warrants to a
consultant, (ii) $118 for the issuance of 30,000 warrants to an investor
relations firm, and (iii) $440 for the two year extension of warrants to
China Harvest International Ltd. referenced in Note 1
above.
|
A.
|
Overview
|
·
|
payments
from charitable foundations and other research collaborators under
arrangements that may be entered into in the
future;
|
·
|
research
grants, such as Small Business Innovation Research (“SBIR”) grants;
and
|
·
|
sales
of equity securities or borrowing
funds.
|
B.
|
Critical
Accounting Policies and
Estimates
|
C.
|
Research
and Development Expenses
|
D.
|
Liquidity
and Capital Resources
|
·
|
proceeds
from various private placements of debt and equity securities, secondary
public stock offerings, our initial public stock offering (our “IPO”) and
other cash contributed from stockholders, which in the aggregate raised
approximately $77,608,000;
|
·
|
payments
from research agreements, licensing agreements, foundation grants and SBIR
grants and Small-Business Technology Transfer program grants of
approximately $34,800,000; and
|
·
|
the
use of stock, options and warrants in lieu of cash
compensation.
|
E.
|
Payments
Due under Contractual
Obligations
|
Year
Ending
March 31,
|
Lease
Payments
|
|
2009
|
166,000
|
|
2010
|
99,000
|
|
Total
|
$265,000
|
F.
|
Results
of
Operations
|
1.
|
Fiscal
Year Ended March 31, 2008 Compared with Fiscal Year Ended
March 31,
2007
|
2.
|
Fiscal
Year Ended March 31, 2007 Compared with Fiscal Year Ended
March 31,
2006
|
3.
|
Impact
of
Inflation
|
4.
|
Selected
Quarterly Information
(Unaudited)
|
A.
|
Evaluation
of Disclosures and Procedures
|
B.
|
Management’s
Report on Internal Control Over Financial
Reporting
|
C.
|
Changes
in Internal Control Over Financial
Reporting
|
A.
|
Information
Regarding Directors and Executive
Officers
|
Name
|
Age
|
Position(s)
|
||
Eric
L. Sorkin
|
48
|
President,
Chief Executive Officer and Chairman of the Board of
Directors
|
||
Cecilia
Chan
|
45
|
Vice
Chairman and Director
|
||
Gary
C. Parks
|
58
|
Chief
Financial Officer, Secretary and Treasurer
|
||
Carol
Ann Olson, MD, Ph.D.
|
55
|
Senior
Vice President and Chief Medical Officer
|
||
David
Fleet
|
63
|
Director
|
||
Judy
Lau
|
48
|
Director
|
||
Levi
H.K. Lee, MD
|
66
|
Director
|
||
Donald
F. Sinex
|
57
|
Director
|
B.
|
Section 16(a)
Beneficial Ownership Reporting
Compliance
|
1.
|
Board
Committees
|
i.
|
Audit
Committee
|
ii.
|
Compensation
Committee
|
iii.
|
Nominating
Committee
|
·
|
recruit,
review and nominate candidates for election to the board of
directors;
|
·
|
monitor
and make recommendations regarding committee functions, contributions and
composition;
|
·
|
develop
the criteria and qualifications for membership on the board of directors;
and
|
·
|
administer
any director compensation plan.
|
C.
|
Communications
with the Board of Directors
|
D.
|
Code
of Ethics
|
E.
|
Family
Relationships
|
A.
|
Compensation
Discussion and
Analysis
|
1.
|
Overview
|
·
|
base
salary (typically subject to upward adjustment annually based on
individual performance);
|
·
|
stock
option awards;
|
·
|
401(k)
plan contributions; and
|
·
|
health,
disability and life insurance.
|
·
|
performance
against corporate and individual objectives for the previous
year;
|
·
|
difficulty
of achieving desired results in the coming
year;
|
·
|
value
of their unique skills and capabilities to support long-term performance
of the Company;
|
·
|
performance
of their management
responsibilities;
|
·
|
whether
an increase in responsibility or change in title is warranted;
and
|
·
|
contribution
as a member of the executive management
team.
|
2.
|
Elements
of
Compensation
|
i.
|
Base
Salary
|
Eric L. Sorkin
|
$
250,000 (1)
|
Cecilia Chan
|
$
150,000 (2)
|
Gary Parks
|
$
200,000
|
Carol Olson
|
$
235,000
|
ii.
|
Bonus
and Other Non-Equity Incentive Plan
Compensation
|
iii.
|
Perquisites
|
iv.
|
Defined
Contribution
Plan
|
3.
|
Employment
Agreements
|
4.
|
Accounting
and Tax
Considerations
|
5.
|
Stock
Ownership
Guidelines
|
B.
|
Report
of the Compensation Committee
|
C.
|
Named
Executive Officer Compensation
|
Name
and
Principal
Position |
Year
|
Salary
$
|
Bonus
$
|
Stock
Awards $
|
Option
Awards
$ (2)
|
Non-equity
Incentive Plan Compensation
$
|
Change
in Pension Value and NQDC Earnings
$
|
All
Other Compensation
$
(3)
|
Total
$
|
||||||||||||||||||||
Eric
L. Sorkin(1)
Chief
Executive Officer and Chairman
|
2008
|
$375,000 |
-----
|
-----
|
$232,911 |
-----
|
-----
|
$7,328
|
$615,239 | ||||||||||||||||||||
Cecilia
Chan(4)
Vice
Chairman
|
2008
|
$201,234 |
-----
|
-----
|
$181,005 |
-----
|
-----
|
$7,328
|
$389,567 | ||||||||||||||||||||
Gary
C. Parks
Secretary,
Treasurer and Chief Financial Officer
|
2008
|
$200,000 |
-----
|
-----
|
$162,627 |
-----
|
-----
|
$15,192
|
$377,819 | ||||||||||||||||||||
Carol
Ann Olson, MD, Ph.D.
Senior
Vice President and Chief Medical Officer
|
2008
|
$235,000 |
-----
|
-----
|
$290,300 |
-----
|
-----
|
$11,068
|
$536,368 |
(1)
|
Mr.
Sorkin became Chief Executive Officer on January 23, 2006 and subsequently
became President on May 1, 2006. Mr. Sorkin’s base salary as of
April 1, 2007 was $375,000 and was voluntarily reduced to $250,000 for one
year effective as of April 1, 2008.
|
(2)
|
This
column represents the dollar amount recognized for financial statement
reporting purposes with respect to the 2008 fiscal year for the fair value
of the stock options granted to each of the named executive officers in
2008 and prior fiscal years, in accordance with SFAS
123(R). The amounts shown exclude the impact of estimated
forfeitures related to service-based vesting conditions. For
additional information on the valuation assumptions with respect to the
2007 option grants, please refer to the notes in our financial
statements. These amounts reflect our accounting expense for
these awards, and do not correspond to the actual value that will be
recognized by the named executive
officers.
|
(3)
|
This
column represents the dollar amount for the Company paid portion of
health, dental, short term disability, long term disability, life
insurance, and accidental death and dismemberment
costs.
|
(4)
|
Ms.
Chan’s base salary as of April 1, 2007 was $201,234 and was voluntarily
reduced to $150,000 for one year effective as of April 1,
2008.
|
D.
|
Stock
Option Grants and Exercises During the Fiscal Year Ended March 31,
2008
|
Estimated
Future
Payouts
Under
Non-Equity
Incentive
Plan Awards
|
Estimated
Future
Payouts
Under
Equity
Incentive
Plan Awards
|
|||||||||||||||||||||||||||||||||||||||||
Name
|
Grant
Date |
Threshold
($)
|
Target
($) |
Maximum
($)
|
Threshold
($)
|
Target
($) |
Maximum
($)
|
All Other Stock Awards: Number
of Shares of Stock or Units
(#) |
All Other Options Awards:
Number of Securities Underlying Options (#)
(1)
|
Exercise
or Base Price of Option Awards ($/Sh) (2)
|
Grant
Date Fair Value of Option Awards
($)
(3)
|
|||||||||||||||||||||||||||||||
Gary
C. Parks
|
11/13/07
|
----
|
----
|
----
|
----
|
----
|
----
|
----
|
45,000
|
6.35
|
210,982
|
|||||||||||||||||||||||||||||||
Carol
Ann Olson
|
11/13/07
|
----
|
----
|
----
|
----
|
----
|
----
|
----
|
45,000
|
6.35
|
210,982
|
(1)
|
These
options vest and become exercisable in equal monthly installments with the
first installment vesting on December 13, 2007. The options
expire 10 years from the date of grant, which was November 13,
2007.
|
(2)
|
This
column shows the exercise price for the stock options granted, which was
the closing price of our Common Stock on November 13, 2007, the date of
grant.
|
(3)
|
This
column represents the dollar amount recognized for financial statement
reporting purposes with respect to the 2008 fiscal year for the fair value
of the stock options granted to each of the named executive officers in
2008 in accordance with SFAS 123(R). The amounts shown exclude
the impact of estimated forfeitures related to service-based vesting
conditions. For additional information on the valuation
assumptions with respect to the 2007 grants, please refer to the notes in
our financial statements. These amounts reflect our accounting
expense for these awards, and do not correspond to the actual value that
will be recognized by the named executive
officers.
|
Option/Warrant
Awards
|
Stock
Awards
|
||||||||||||||||||||||||||||||||
Name
|
Number
of Securities Underlying Unexercised Options/
Warrants
Exercisable (#)(1)
|
Number
of Securities Underlying Unexercised Options/ Warrants Unexercisable
(#)(1)
|
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised
Unearned Options (#)
|
Option/Warrant
Exercise Price ($)
|
Option/
Warrant Expiration Date (2)
|
Number
of Shares or Units of Stock that Have Not Vested (#)
|
Market
Value of Shares or Units of Stock that Have Not Vested
($)
|
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other
Rights that Have Not Vested (#)
|
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares,
Units or Other Rights That Have Not Vested ($)
|
||||||||||||||||||||||||
Eric
L. Sorkin
|
26,923(2) | 0 | --- | 6.47 |
7/24/2008
|
--- | --- | --- | --- | ||||||||||||||||||||||||
173,077(2) | 0 | --- | 6.47 |
10/12/2008
|
--- | --- | --- | --- | |||||||||||||||||||||||||
22,000 | 0 | --- | 14.29 |
2/2/2014
|
--- | --- | --- | --- | |||||||||||||||||||||||||
22,000 | 0 | --- | 11.03 |
11/16/2014
|
--- | --- | --- | --- | |||||||||||||||||||||||||
20,834 | 0 | --- | 7.85 |
1/25/2016
|
--- | --- | --- | --- | |||||||||||||||||||||||||
53,125 | 21,875 | --- | 5.74 |
10/16/2016
|
--- | --- | --- | --- | |||||||||||||||||||||||||
Cecilia
Chan
|
50,123(2) | 0 | --- | 6.47 |
7/24/2008
|
--- | --- | --- | --- | ||||||||||||||||||||||||
173,077(2) | 0 | --- | 6.47 |
10/12/2008
|
--- | --- | --- | --- | |||||||||||||||||||||||||
22,000 | 0 | --- | 2.55 |
12/24/2012
|
--- | --- | --- | --- | |||||||||||||||||||||||||
25,000 | 0 | --- | 21.66 |
11/6/2013
|
--- | --- | --- | --- | |||||||||||||||||||||||||
20,000 | 0 | --- | 9.41 |
9/8/2014
|
--- | --- | --- | --- | |||||||||||||||||||||||||
53,125 | 21,875 | --- | 5.74 |
10/16/2016
|
--- | --- | --- | --- | |||||||||||||||||||||||||
Gary
C. Parks
|
14,195 | 0 | --- | 1.74 |
4/16/2008
|
--- | --- | --- | --- | ||||||||||||||||||||||||
10,000 | 0 | --- | 10.00 |
7/20/2011
|
--- | --- | --- | --- | |||||||||||||||||||||||||
25,000 | 0 | --- | 2.55 |
12/24/2012
|
--- | --- | --- | --- | |||||||||||||||||||||||||
15,000 | 0 | --- | 21.66 |
11/6/2013
|
--- | --- | --- | --- | |||||||||||||||||||||||||
15,000 | 0 | --- | 9.41 |
9/8/2014
|
--- | --- | --- | --- | |||||||||||||||||||||||||
20,000 | 0 | --- | 7.29 |
1/24/2016
|
--- | --- | --- | --- | |||||||||||||||||||||||||
21,250 | 8,750 | --- | 5.74 |
10/16/2016
|
--- | --- | --- | --- | |||||||||||||||||||||||||
9,375 | 35,625 | 6.35 |
11/13/2017
|
--- | --- | --- | --- | ||||||||||||||||||||||||||
Carol
Ann Olson
|
40,000 | 0 | --- | 8.38 |
10/18/2014
|
--- | --- | --- | --- | ||||||||||||||||||||||||
30,000 | 0 | --- | 7.29 |
1/24/2016
|
--- | --- | --- | --- | |||||||||||||||||||||||||
21,250 | 8,750 | --- | 5.74 |
10/16/2016
|
--- | --- | --- | --- | |||||||||||||||||||||||||
9,375 | 35,625 | 6.35 |
11/13/2017
|
--- | --- | --- | --- | ||||||||||||||||||||||||||
(1)
|
Except
as indicated, the options granted vest and become exercisable in monthly
installments over a two year period, commencing on the date of
grant.
|
(2)
|
The
amount represents the shares of Common Stock issuable upon exercise of the
vested warrants.
|
Option/Warrant
Awards
|
||||||||
Name
|
Number
of
Shares
Acquired
on
Exercise
(#)
|
Value
Realized
on
Exercise
($)
|
||||||
Eric
L. Sorkin
|
10,000
|
(3,550)(1)
|
||||||
972
|
3,344(2)
|
|||||||
Cecilia
Chan
|
2,312
|
7,953(3)
|
||||||
Gary
C. Parks
|
0
|
|||||||
Carol
Ann Olson
|
0
|
(1)
|
Based
on the market value of $5.99 per share on November 14, 2007, the exercise
date, minus the average per share exercise price of $6.47 multiplied by
the number of shares underlying the
warrant.
|
(2)
|
Based
on the market value of $5.99 per share on November 14, 2007, the exercise
date, minus the average per share exercise price of $2.55 multiplied by
the number of shares underlying the
option.
|
(3)
|
Based
on the market value of $8.30 per share on September 25, 2007, the exercise
date, minus the average per share exercise price of $6.13 multiplied by
the number of shares underlying the
warrant.
|
E.
|
Post-Employment
Compensation
|
1.
|
Employment
Agreement with Mr.
Sorkin
|
Executive
Benefits and Payments Upon Termination
|
Disability
|
Death
|
Termination
without Cause or with Good Reason Prior to CIC or more than 24 months
after CIC (1)
|
CIC
Whether or Not Services are Terminated
|
||||||||||||
Severance
Payments
|
||||||||||||||||
Base
Salary
|
$ | 375,000 | (2) | $ | 375,000 | (2) | $ | 187,500 | (3) | ---- | ||||||
Short-Term
Incentive
|
--- | (4) | ---- | (4) | --- | (5) | ---- | |||||||||
Value
of Unvested Equity Awards and Accelerated
|
||||||||||||||||
Options
|
105,586 | (6) | 105,586 | (6) | 105,586 | (6) | 105,586 | (6) | ||||||||
Total
|
$ | 480,586 | $ | 480,586 | $ | 293,086 | $ | 105,586 | ||||||||
(1)
|
“CIC”
means change in control, as defined within the effective employment
agreement between Mr. Sorkin and the
Company.
|
(2)
|
12
months base salary.
|
(3)
|
6
months base salary.
|
(4)
|
Pro
rata bonus.
|
(5)
|
Full
cash bonus otherwise payable.
|
(6)
|
Vesting
of all stock options.
|
F.
|
DIRECTOR
COMPENSATION
|
Name
|
Fees
Earned or Paid in Cash
($)
|
Stock
Awards
($)
|
Option
Awards
($)
(2)
|
Non-Equity
Incentive Plan Compensation ($)
|
Change
in Pension Value and Nonqualified Deferred Compensation Earnings
($)
|
All
Other Compensation ($)
|
Total
($)
|
|||||||||||||||||||||
David
M. Fleet (1)
|
12,137 | ---- | 50,567 | ---- | --- | --- | 62,704 | |||||||||||||||||||||
Judy
Lau
|
20,000 | ---- | 234,638 | ---- | --- | --- | 254,638 | |||||||||||||||||||||
Levi
H. K. Lee
|
20,000 | ---- | 211,439 | ---- | --- | --- | 231,439 | |||||||||||||||||||||
Donald
F. Sinex
|
20,000 | --- | 162,978 | ---- | --- | --- | 182,978 |
|
(2)
|
This
column represents the dollar amount recognized for financial statement
reporting purposes with respect to the 2008 fiscal year for the fair value
of the stock options granted to each director in 2008 in accordance with
SFAS 123(R). The amounts shown exclude the impact of estimated
forfeitures related to service-based vesting conditions. For
additional information on the valuation assumptions with respect to the
2007 grants, please refer to the notes in our financial
statements. These amounts reflect our accounting expense for
these awards, and do not correspond to the actual value that will be
recognized by the named directors.
|
1.
|
Overview
of Compensation and
Procedures
|
G.
|
Compensation
Committee Interlocks and Insider
Participation
|
A.
|
Principal
Stockholders
|
Name
and Address
|
Number
of Shares
of
Common Stock
Beneficially Owned |
Percentage
of Outstanding
Shares of
Common Stock
|
||||
Eric
L. Sorkin(1)
c/o
Immtech Pharmaceuticals, Inc.
One
North End Ave.
New
York, NY 10282
|
502,045
shares
|
3.08%
|
||||
Cecilia
Chan(2)
c/o
Immtech Pharmaceuticals, Inc.
One
North End Ave.
New
York, NY 10282
|
418,380
shares
|
2.58%
|
||||
Gary
C. Parks(3)
c/o
Immtech Pharmaceuticals, Inc.
150
Fairway Drive, Ste. 150
Vernon
Hills, IL 60061
|
153,261
shares
|
0.96%
|
Name
and Address
|
Number
of Shares
of
Common Stock
Beneficially Owned |
Percentage
of Outstanding
Shares of
Common Stock
|
||||
Carol
Ann Olson, MD, Ph.D.(4)
c/o
Immtech Pharmaceuticals, Inc.
150
Fairway Drive, Ste. 150
Vernon
Hills, IL 60061
|
113,125
shares
|
0.71%
|
||||
David
M. Fleet(5)
c/o
Woodpeckers
Chanctonbury
Drive
Sunningdale,
Berkshire UK
|
14,286
shares
|
0.09%
|
||||
Judy
Lau(6)
Room
1002, 10th
Floor
Jupiter
Tower
9
Jupiter Street
North
Point, Hong Kong
|
119,709
shares
|
0.75%
|
||||
Levi
H.K. Lee, MD(7)
1405
Lane Crawford House
70
Queens Road Central,
Hong
Kong
|
308,815
shares
|
1.92%
|
||||
Donald
F. Sinex(8)
c/o
Devonwood Investors, LLC
4388
McKinley Avenue
Rutland
Town, VT 05701
|
110,608
shares
|
0.70%
|
||||
All
executive officers and directors as a group (8 persons)
|
1,740,229
shares
|
10.08%
|
(1)
|
Includes
(i) 90,456 shares of Common Stock; (ii) 20,362 shares of Common
Stock issuable upon the conversion of Series A Preferred Stock; (iii)
53,267 shares of Common Stock issuable upon the conversion of Series E
Preferred Stock; (iv) 207,500 shares of Common Stock issuable upon
the exercise of warrants as follows: vested warrant to purchase
26,923 shares of Common Stock at $6.47 per share by July 24, 2008,
vested warrant to purchase 173,077 shares of Common Stock at $6.47 per
share by October 12, 2008, and vested warrant to purchase 7,500
shares of Common Stock at $10.00 per share by December 13, 2008; and
(v) 130,460 shares of Common Stock issuable upon the exercise of
options as follows: vested option to purchase 22,000 shares of
Common Stock at $14.29 per share by February 1, 2014, vested option to
purchase 22,000 shares of Common Stock at $11.03 by November 15, 2014, the
vested option to purchase 20,834 shares of Common Stock at $7.85 by
January 24, 2016 and the vested portion of 65,626 of an option to purchase
75,000 shares of Common Stock at $5.74 by October 15,
2016.
|
(2)
|
Includes
(i) 56,773 shares of Common Stock; (ii) 5,781 shares of Common
Stock issuable upon the conversion of Series B Preferred Stock;
(iii) 223,200 shares of Common Stock issuable upon the exercise of
warrants as follows: vested warrant to purchase 50,123 shares
of Common Stock at $6.47 per share by July 24, 2008, and vested
warrant to purchase 173,077 shares of Common Stock at $6.47 per share by
October 12, 2008; and (iv) 132,626 shares of Common Stock
issuable upon the exercise of options as follows: vested option
to purchase 22,000 shares of Common Stock at $2.55 per share by December
24, 2012, vested option to purchase 25,000 shares of Common Stock at
$21.66 per share by November 5, 2013, vested option to purchase 20,000
shares of Common Stock at $9.41 per share by September 7, 2014 and the
vested portion of 65,626 of an option to purchase 75,000 shares of Common
Stock at $5.74 by October 15, 2016.
|
(3)
|
Includes
(i) 22,874 shares of Common Stock; (ii) 2,262 shares of Common
Stock issuable upon the conversion of Series A Preferred Stock; and
(iii) 128,125 shares of Common Stock issuable upon the exercise of
options as follows: vested option to purchase 10,000 shares of
Common Stock at $10.00 per share by
|
|
July 19,
2011, vested option to purchase 25,000 shares of Common Stock at $2.55 per
share by December 24, 2012, vested option to purchase 15,000 shares of
Common Stock at $21.66 per share by November 5, 2013, vested option to
purchase 15,000 shares of Common Stock at $9.41 per share by September 7,
2014, vested option to purchase 20,000 shares of Common Stock at $7.29 per
share by January 23, 2016, the vested portion of 26,250 of an option to
purchase 30,000 shares of Common Stock at $5.74 by October 15, 2016 and
the vested portion of 16,875 of an option to purchase 45,000 shares of
Common Stock at $6.35 by November 13,
2017.
|
(4)
|
Includes
113,125 shares of Common Stock issuable upon the exercise of options as
follows: vested option to purchase 40,000 shares of Common
Stock at $8.38 per share by October 17, 2014, vested option to
purchase 30,000 shares of Common Stock at $7.29 per share by January 23,
2016, the vested portion of 26,250 of an option to purchase 30,000 shares
of Common Stock at $5.74 by October 15, 2016 and the vested portion of
16,875 of an option to purchase 45,000 shares of Common Stock at $6.35 by
November 13, 2017.
|
(5)
|
Includes
14,286 shares of Common Stock issuable upon the exercise of options as
follows: the vested portion of 994 of an option to purchase
2,650 shares of Common Stock at $6.35 by November 13, 2017 and the vested
portion of 13,292 of an option to purchase 29,000 shares of Common Stock
at $7.45 by August 24, 2017.
|
(6)
|
Includes
119,709 shares of Common Stock issuable upon the exercise of options as
follows: vested option to purchase 20,000 shares of Common
Stock at $21.66 per share by November 5, 2013, vested option to
purchase 21,000 shares of Common Stock at $14.29 per share by February 1,
2014, vested option to purchase 21,000 shares of Common Stock at $11.03 by
November 15, 2014, vested option to purchase 21,167 shares of Common Stock
at $7.85 by January 24, 2016, vested option to purchase 22,292 shares of
Common Stock at $6.85 by August 17, 2017 and the vested portion of 14,250
of an option to purchase 28,500 shares of Common Stock at $6.85 by August
17, 2017.
|
(7)
|
Includes
(i) 137,257 shares of Common Stock; (ii) 11,312 shares of Common
Stock issuable upon the conversion of Series A Preferred Stock;
(iii) 52,037 shares of Common Stock issuable upon the conversion of
Series C Preferred Stock; and (iv) 108,209 shares of Common Stock
issuable upon the exercise of options as follows: vested option
to purchase 20,000 shares of Common Stock at $21.66 per share by November
5, 2013, vested option to purchase 18,000 shares of Common Stock at $14.29
per share by February 1, 2014, vested option to purchase 18,000 shares of
Common Stock at $11.03 by November 15, 2014, vested option to purchase
19,000 shares of Common Stock at $7.85 by January 24, 2016, vested option
to purchase 19,625 shares of Common Stock at $6.85 by August 17, 2017 and
the vested portion of 13,584 of an option to purchase 27,167 shares of
Common Stock at $6.85 by August 17,
2017.
|
(8)
|
Includes
(i) 42,717 shares of Common Stock; (ii) 21,307 shares of Common
Stock issuable upon the conversion of Series E Preferred Stock; (iii)
3,750 shares of Common Stock issuable upon the exercise of warrants as
follows: vested warrant to purchase 3,750 shares of Common Stock at
$10.00 per share by December 13, 2008; and (iv) 42,834 shares of
Common Stock issuable upon the exercise of options as
follows: vested option to purchase 10,084 shares of Common
Stock at $6.85 by August 17, 2017, the vested portion of 17,500 shares of
an option to purchase 20,000 shares of Common Stock at $5.60 by October
22, 2016 and the vested portion of 15,250 shares of an option to purchase
30,500 shares of Common Stock at $6.85 by August 17,
2017.
|
B.
|
Securities
Authorized for Issuance under Equity Compensation
Plans
|
Plan
category (in thousands)
|
Number
of securities to be issued upon exercise of outstanding options, warrants
and rights(1)
(a)
|
Weighted
average exercise price of outstanding options, warrants and rights(1)
(b)
|
Number
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in
column(a))
(c)
|
|||||||||
Equity
compensation plans approved by security holders(2)
|
2,098,113
|
$8.53
|
1,593,274
|
|||||||||
Equity
compensation plans not approved by security holders(3)
|
2,259,800
|
$8.20
|
||||||||||
Total
|
4,357,913
|
$8.36
|
1,593,274
|
(1)
|
As
adjusted for reverse stock splits that occurred on each of July 24,
1998 and January 25, 1999.
|
(2)
|
This
category consists solely of
options.
|
(3)
|
This
category consists solely of
warrants.
|
C.
|
Equity
Compensation Plans Not Approved by
Shareholders
|
A.
|
Policies
and Procedures with Respect to Transactions with Related
Persons
|
B.
|
Director
Independence
|
2008
|
2007
|
|||||||
Audit
Fees(1)
|
$271,000
|
$218,000
|
||||||
Tax
Fees(2)
|
57,000
|
6,000
|
||||||
Total
Fees
|
$328,000
|
$224,000
|
(1)
|
Includes
fees and out-of-pocket expenses for the following
services: Audit of the consolidated financial statements,
quarterly reviews, SEC filings and consents, financial accounting and
reporting consultation, and costs in our fiscal year ended March 31,
2008 preparing the 2008 audit requirement for compliance with Section 404
of the Sarbanes-Oxley Act and financial
testing.
|
(2)
|
Includes
fees and out-of-pocket expenses for tax compliance, tax planning and
advice.
|
A.
|
Documents
Filed with this
Report.
|
1.
|
Financial
Statements
|
2.
|
Financial
Statement
Schedules
|
3.
|
Exhibits
|
IMMTECH
PHARMACEUTICALS, INC.
|
|||
Date: |
June 18,
2008
|
By: /s/
Eric L. Sorkin
|
|
Eric
L. Sorkin
Chief
Executive Officer and President
|
Signature
|
Date
|
|
/s/
Eric L. Sorkin
|
June
18, 2008
|
|
Eric
L. Sorkin
Chief
Executive Officer and President
(Principal
Executive Officer)
|
||
/s/
Gary C. Parks
|
June
18, 2008
|
|
Gary
C. Parks
Chief
Financial Officer
(Principal
Financial and Accounting Officer)
|
||
/s/
Cecilia Chan
|
June
18, 2008
|
|
Cecilia
Chan
Vice
Chairman and Director
|
||
/s/
David Fleet
|
June
18, 2008
|
|
David
Fleet
Director
|
||
/s/
Judy Lau
|
June
18, 2008
|
|
Judy
Lau
Director
|
||
/s/
Levi H.K. Lee, MD
|
June
18, 2008
|
|
Levi
H.K. Lee, MD
Director
|
||
/s/
Donald F. Sinex
|
June
18, 2008
|
|
Donald
F. Sinex
Director
|
EXHIBIT
NUMBER
|
DESCRIPTION
OF EXHIBIT
|
|
3.1
|
Amended
and Restated Certificate of Incorporation of the Company, dated
June 14, 2004 (Form 10-K for fiscal year ended March 31, 2004)
*
|
|
3.2
|
Certificate
of Correction to Certificate of Incorporation dated December 14, 2005
(Form 8-K, dated December 14, 2005) *
|
|
3.3
|
Certificate
of Amendment (Name Change) to Certificate of Incorporation dated March 22,
2006 (Form 8-K, dated March 23, 2006) *
|
|
3.4
|
Certificate
of Amendment (Number of Members of the Board of Directors) to Certificate
of Incorporation dated April 17, 2007 **
|
|
3.5
|
Certificate
of Designation for Series A Convertible Preferred Stock Private Placement,
dated February 14, 2002 (Form 8-K, dated February 14, 2002)
*
|
|
3.6
|
Certificate
of Designation for Series B Convertible Preferred Stock Private Placement,
dated September 25, 2002 (Form 8-K, dated September 25, 2002)
*
|
|
3.7
|
Certificate
of Designation for Series C Convertible Preferred Stock Private Placement,
dated June 6, 2003 (Form 8-K, dated June 10, 2003)
*
|
|
3.8
|
Certificate
of Designation for Series D Convertible Preferred Stock Private Placement,
dated January 15, 2004 (Form 8-K, dated January 21, 2004)
*
|
EXHIBIT
NUMBER
|
DESCRIPTION
OF EXHIBIT
|
|
3.9
|
Certificate
of Designation for Series E Convertible Preferred Stock Private Placement,
dated December 13, 2005 (Form 8-K, dated December 14, 2005)
*
|
|
3.10
|
Amended
and Restated Bylaws of the Company effective as of June 8, 2007 (Form 8-K,
dated June 12, 2007) *
|
|
4.1
|
Form
of Common Stock Certificate (Form SB-2/A Registration Statement, dated
March 30, 1999, File No. 333-64393) *
|
|
4.2
|
Warrant
Agreement, dated July 24, 1998, by and between the Company and RADE
Management Corporation (Form SB-2/A Registration Statement, dated February
11, 1999, File No. 333-64393) *
|
|
4.3
|
Warrant
Agreement, dated October 12, 1998, by and between the Company and RADE
Management Corporation (Form SB-2/A Registration Statement, dated February
11, 1999, File No. 333-64393) *
|
|
4.8
|
Stock
Purchase Warrant, dated September 25, 2002, for Series B Convertible
Preferred Stock Private Placement (Form 8-K, dated September 25, 2002)
*
|
|
4.11
|
Stock
Purchase Warrant, dated January 15, 2004, for Series D Convertible
Preferred Stock Private Placement (Form 8-K, dated January 21, 2004)
*
|
|
4.13
|
Stock
Purchase Warrant, dated December 13, 2005, for Series E Convertible
Preferred Stock Private Placement (Form 8-K, dated December 14, 2005)
*
|
|
4.18
|
Form
of Stock Purchase Warrant, dated December 14, 2006, issued to Ferris,
Baker Watts **
|
|
10.1
|
Letter
Agreement, dated January 15, 1997, by and among the Company,
Pharm-Eco Laboratories, Inc. and The University of North Carolina at
Chapel Hill, as amended (Form SB-2 Registration Statement, File No.
333-64393) *
|
EXHIBIT
NUMBER
|
DESCRIPTION
OF EXHIBIT
|
|
10.2
(1)
|
1993
Stock Option and Award Plan (Form SB-2 Registration Statement, File No.
333-64393) *
|
|
10.3
(1)
|
2000
Stock Option and Award Plan (Definitive Proxy Statement, dated August 25,
2000, File No. 000-25669) *
|
|
10.4
(1)
|
2007
Stock Option and Award Plan (Definitive Proxy Statement, dated October 17,
2007) *
|
|
10.5
|
Indemnification
Agreement, dated June 1, 1998, between the Company and RADE
Management Corporation (Form SB-2 Registration Statement, File No.
333-64393) *
|
|
10.6
|
Letter
Agreement, dated June 24, 1998, between the Company and Criticare
Systems, Inc. (Form SB-2 Registration Statement, File No. 333-64393)
*
|
|
10.7
|
Letter
Agreement, dated June 25, 1998, between the Company and Criticare
Systems, Inc. (Form SB-2 Registration Statement, File No. 333-64393)
*
|
|
10.8
|
Amendment,
dated January 15, 1999, to Letter Agreement among the Company,
Pharm-Eco Laboratories, Inc. and The University of North Carolina at
Chapel Hill, as amended (Form SB-2/A Registration Statement, dated
February 11, 1999, File No. 333-64393) *
|
|
10.9
|
Office
Lease, dated August 26, 1999, by and between the Company and Arthur
J. Rogers & Co. (Form 10-K for fiscal year ended March 31, 2000, File
No. 000-25669) *
|
|
10.10
|
License
Agreement, dated August 25, 1993, by and among the University of
North Carolina at Chapel Hill and Pharm-Eco Laboratories, Inc. (Form
10-KSB/A for fiscal year ended March 31, 2001, as amended on July 6, 2001)
*
|
|
10.11
|
Assignment
Agreement, dated as of March 27, 2001, by and between the Company and
Pharm-Eco Laboratories, Inc. (Form 10-KSB/A for fiscal year ended March
31, 2001, as amended on July 6, 2001)
*
|
EXHIBIT
NUMBER
|
DESCRIPTION
OF EXHIBIT
|
|
10.12
|
Clinical
Research Subcontract, dated as of March 29, 2001, by and between The
University of North Carolina at Chapel Hill and the Company (Form 10-KSB/A
for fiscal year ended March 31, 2001, as amended on July 6, 2001)
*
|
|
10.14
|
License
Agreement, dated March 10, 1998, by and between the Company and
Northwestern University (Form SB-2 Registration Statement, File No.
333-64393) *
|
|
10.15
|
License
Agreement, dated October 27, 1994, by and between the Company and
Northwestern University (Form SB-2 Registration Statement, File No.
333-64393) *
|
|
10.16
|
Assignment
of Intellectual Properties, dated June 29, 1998, between the Company
and Criticare Systems, Inc. (Form SB-2 Registration Statement, File No.
333-64393) *
|
|
10.18
|
Assignment
Agreement, dated June 26, 1998, by and between the Company and
Criticare Systems, Inc. (Form SB-2 Registration Statement, File No.
333-64393) *
|
|
10.19
|
Assignment
Agreement, dated June 29, 1998, by and between the Company and
Criticare Systems, Inc. (Form SB-2 Registration Statement, File No.
333-64393) *
|
|
10.20
|
International
Patent, Know-How and Technology License Agreement, dated June 29,
1998, by and between the Company and Criticare Systems, Inc. (Form SB-2
Registration Statement, File No. 333-64393) *
|
|
10.22
|
Funding
and Research Agreement, dated September 30, 1998, by and among the
Company, NextEra Therapeutics, Inc. and Franklin Research Group, Inc.
(Form SB-2/A Registration Statement, dated February 11, 1999, File No.
333-64393) *
|
|
10.24
|
Employment
Agreement, dated 1998, by and between NextEra and Lawrence Potempa (Form
10-KSB for fiscal year ended March 31, 1999)
*
|
EXHIBIT
NUMBER
|
DESCRIPTION
OF EXHIBIT
|
|
10.29
|
Amendment,
dated January 28, 2002, to License Agreement among the Company,
Pharm-Eco Laboratories, Inc. and The University of North Carolina at
Chapel Hill, as amended (Form 10-Q for quarter ended December 31, 2001)
*
|
|
10.35
|
Share
Purchase Agreement and Deed of Indemnity as related to shares in Super
Insight Limited, dated November 28, 2003, by and between the Company,
Chan Kon Fung and Super Insight Limited (Form 8-K, dated December 2, 2003)
*
|
|
10.36
|
Allonge
to the Share Purchase Agreement and Deed of Indemnity as related to shares
in Super Insight Limited and Immtech Hong Kong Limited, dated
November 28, 2003, by and between the Company, Chan Kon Fung, Lenton
Fibre Optics Development Limited, Super Insight Limited, and Immtech Hong
Kong Limited (Form 8-K, dated December 2, 2003) *
|
|
10.39
|
Form
of First Amendment to Office Lease, dated August 18, 2004, by and
between the Company and Arthur J. Rogers & Co. (Form 8-K, dated
October 8, 2004) *
|
|
10.41
|
Amended
and Restated Consortium License Agreement (Redacted) dated March 24, 2006,
among Immtech, The University of North Carolina at Chapel Hill, Auburn
University, Duke University and the Georgia State University Research
Gates Foundation, Inc. (Form 8-K, dated March 30, 2006)
*
|
|
10.42
|
Amended
and Restated Clinical Research Subcontract, dated March 28, 2006, between
Immtech and The University of North Carolina at Chapel Hill (Form 8-K,
dated March 30, 2006) *
|
|
10.44
(1)
|
Form
of Incentive Stock Option Agreement (Form 10-Q for quarter ended December
31, 2006) *
|
|
10.45
(1)
|
Form
of Non-qualified Stock Option Agreement (Form 10-Q for quarter ended
December 31, 2006) *
|
|
10.46
(1)
|
Amended
and Restated Employment Agreement between the Company and Eric L. Sorkin
dated March 12, 2008
**
|
EXHIBIT
NUMBER
|
DESCRIPTION
OF EXHIBIT
|
|
10.47
|
Placement
Agency Agreement between the Company and Ferris, Baker Watts, Incorporated
dated February 7, 2007 (Form 8-K, dated February 13,
2007)*
|
|
10.48#
|
Licensing
Agreement with Par Pharmaceutical Companies, Inc., dated June 11, 2007
(Form 10-Q for the quarter ended June 30, 2007)*
|
|
10.49#
|
Supply
& Distribution Agreement with Par Pharmaceutical Companies, Inc.,
dated June 11, 2007 (Form 10-Q for the quarter ended June 30,
2007)*
|
|
10.50#
|
Licensing
Agreement, dated as of December 3, 2007, by and between Immtech
Pharmaceuticals, Inc. and BioAlliance Pharma SA (Form 10-Q for the quarter
ended December 31, 2007)*
|
|
21.1
|
Subsidiaries
of Registrant (Form 10-K for fiscal year ended March 31, 2003)
*
|
|
23.1
|
Consent
of Deloitte & Touche LLP **
|
|
31.1
|
Certification
of Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 **
|
|
31.2
|
Certification
of Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 **
|
|
32.1
|
Certification
of Chief Executive Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 **
|
|
32.2
|
Certification
of Chief Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
**
|
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
F-1
|
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
F-3
|
CONSOLIDATED
BALANCE SHEETS
|
F-5
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
F-7
|
CONSOLIDATED
STATEMENTS OF STOCKHOLDERS’ EQUITY
|
F-8-11
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
F-12
|
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
F-13-45
|
ASSETS
|
2007
|
2008
|
||||||
CURRENT
ASSETS:
|
||||||||
Cash and cash
equivalents
|
$ | 12,461,795 | $ | 5,996,157 | ||||
Restricted funds on
deposit
|
3,118,766 | 3,776,253 | ||||||
Other
receivables
|
54,205 | |||||||
Other current
assets
|
98,627 | 253,014 | ||||||
Total current
assets
|
15,679,188 | 10,079,629 | ||||||
PROPERTY
AND EQUIPMENT - Net
|
140,263 | 89,519 | ||||||
PREPAID
RENT
|
3,309,240 | 3,234,314 | ||||||
OTHER
ASSETS
|
15,477 | 34,142 | ||||||
TOTAL
ASSETS
|
$ | 19,144,168 | $ | 13,437,604 |
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
2007
|
2008
|
||||||
CURRENT
LIABILITIES:
|
||||||||
Accounts
payable
|
$ | 2,585,395 | $ | 2,938,511 | ||||
Accrued
expenses
|
375,925 | 499,770 | ||||||
Deferred
revenue
|
1,726,673 | 2,399,676 | ||||||
Total current
liabilities
|
4,687,993 | 5,837,957 | ||||||
Total
liabilities
|
4,687,993 | 5,837,957 | ||||||
STOCKHOLDERS’
EQUITY:
|
||||||||
Preferred
stock, par value $0.01 per share, 3,913,000 shares authorized and unissued
as of March 31, 2007 and 2008
|
||||||||
Series
A convertible preferred stock, par value $0.01 per share, stated value $25
per share, 320,000 shares authorized, 55,500 and 50,500 shares issued and
outstanding as of March 31, 2007 and 2008, respectively; aggregate
liquidation preference of $1,425,283 and $1,296,831 as of March 31,
2007 and 2008, respectively
|
1,425,283 | 1,296,831 | ||||||
Series
B convertible preferred stock, par value $0.01 per share, stated value $25
per share, 240,000 shares authorized, 13,464 and 11,464 shares issued and
outstanding as of March 31, 2006 and 2007, respectively; aggregated
liquidation preference of $348,621 and $296,780 as of March 31, 2007
and 2008, respectively
|
348,621 | 296,780 | ||||||
Series
C convertible preferred stock, par value $0.01 per share, stated value $25
per share, 160,000 shares authorized, 45,536 shares issued and outstanding
as of March 31, 2007, and 2008; aggregate liquidation preference of
$1,180,345 as of March 31, 2007 and 2008
|
1,180,345 | 1,180,345 | ||||||
Series
D convertible preferred stock, par value $0.01 per share, stated value $25
per share, 200,000 shares authorized, 117,200 and 115,200 shares issued
and outstanding as of March 31, 2007 and 2008, respectively;
aggregate liquidation preference of $3,010,914 and $2,959,533 as of
March 31, 2007 and 2008, respectively
|
3,010,914 | 2,959,533 | ||||||
Series
E convertible preferred stock, par value $0.01 per share, stated value $25
per share, 167,000 shares authorized, 110,200 and 98,600 shares issued and
outstanding as of March 31, 2007 and 2008, respectively; aggregate
liquidation preference of $2,831,116 and $2,533,107 as of March 31, 2007
and 2008, respectively
|
2,831,116 | 2,533,107 | ||||||
Common
stock, par value $0.01 per share, 100,000,000 shares authorized,
15,333,221 and 15,597,768 shares issued and outstanding as of
March 31, 2007 and 2008, respectively
|
153,332 | 155,978 | ||||||
Additional
paid-in capital
|
106,031,851 | 110,743,899 | ||||||
Deficit
accumulated during the developmental stage
|
(100,525,287 | ) | (111,566,826 | ) | ||||
Total stockholders’
equity
|
14,456,175 | 7,599,647 | ||||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$ | 19,144,168 | $ | 13,437,604 |
Years
Ended March 31,
|
October 15,
1984 (Inception)
to
March 31,
|
|||||||||||||||
2006
|
2007
|
2008
|
2008
|
|||||||||||||
REVENUES
|
$ | 3,575,042 | $ | 4,318,013 | $ | 9,717,243 | $ | 34,799,996 | ||||||||
EXPENSES:
|
||||||||||||||||
Research and
development
|
9,680,184 | 8,760,379 | 11,569,785 | 71,683,718 | ||||||||||||
General and
administrative
|
9,631,018 | 9,094,557 | 9,099,955 | 73,077,312 | ||||||||||||
Other
(see note 10)
|
(1,874,454 | ) | (1,874,454 | ) | ||||||||||||
Equity in loss of joint
venture
|
135,002 | |||||||||||||||
Total expenses
|
19,311,202 | 15,980,482 | 20,669,740 | 143,021,578 | ||||||||||||
LOSS
FROM OPERATIONS
|
(15,736,160 | ) | (11,662,469 | ) | (10,952,497 | ) | (108,221,582 | ) | ||||||||
OTHER
INCOME (EXPENSE):
|
||||||||||||||||
Interest income
|
210,725 | 529,844 | 439,545 | 1,913,576 | ||||||||||||
Interest
expense
|
(1,129,502 | ) | ||||||||||||||
Loss on sales of investment
securities - net
|
(2,942 | ) | ||||||||||||||
Cancelled offering
costs
|
(584,707 | ) | ||||||||||||||
Gain on extinguishment of
debt
|
1,427,765 | |||||||||||||||
Other income (expense) -
net
|
210,725 | 529,844 | 439,545 | 1,624,190 | ||||||||||||
NET
LOSS
|
(15,525,435 | ) | (11,132,625 | ) | (10,512,952 | ) | (106,597,392 | ) | ||||||||
CONVERTIBLE
PREFERRED STOCK DIVIDENDS AND CONVERTIBLE PREFERRED STOCK PREMIUM DEEMED
DIVIDENDS
|
(764,275 | ) | (550,574 | ) | (528,587 | ) | (7,339,333 | ) | ||||||||
REDEEMABLE
PREFERRED STOCK CONVERSION, PREMIUM AMORTIZATION AND
DIVIDENDS
|
2,369,899 | |||||||||||||||
NET
LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS
|
$ | (16,289,710 | ) | $ | (11,683,199 | ) | $ | (11,041,539 | ) | $ | (111,566,826 | ) | ||||
BASIC
AND DILUTED NET LOSS PER SHARE ATTRIBUTABLE TO COMMON
STOCKHOLDERS:
|
||||||||||||||||
Net loss
|
$ | (1.31 | ) | $ | (0.78 | ) | $ | (0.68 | ) | |||||||
Convertible preferred stock
dividends and convertible preferred stock premium deemed
dividends
|
(0.06 | ) | (0.04 | ) | (0.03 | ) | ||||||||||
BASIC
AND DILUTED NET LOSS PER SHARE ATTRIBUTABLE TO COMMON
STOCKHOLDERS
|
$ | (1.37 | ) | $ | (0.82 | ) | $ | (0.71 | ) | |||||||
WEIGHTED
AVERAGE SHARES USED IN COMPUTING BASIC AND DILUTED NET LOSS PER
SHARE
|
11,852,630 | 14,207,048 | 15,477,463 |
Series
A Convertible
Preferred
Stock
|
Series
B Convertible
Preferred
Stock
|
Series
C Convertible
Preferred
Stock
|
Series
D Convertible
Preferred
Stock
|
Series
E Convertible
Preferred
Stock
|
|||||||||||||||||||||||||||||||||||||||||||||
Issued
and Outstanding
|
Amount
|
Issued
and Outstanding
|
Amount
|
Issued
and Outstanding
|
Amount
|
Issued
and Outstanding
|
Amount
|
Issued and Outstanding
|
Amount
|
Common
Stock
Issued
and Outstanding
|
Amount
|
Additional
Paid-in Capital
|
Deficit
Accumulated During the Development Stage
|
Accumulated
Other Comprehensive Income (Loss)
|
Total
Stockholders’ Equity (Deficiency in Assets)
|
||||||||||||||||||||||||||||||||||
October 15,
1984 (Inception)
|
|||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock to
founders
|
113,243 | $ | 1,132 | $ | 24,868 | $ | 26,000 | ||||||||||||||||||||||||||||||||||||||||||
Balance,
March 31, 1985
|
113,243 | 1,132 | 24,868 | 26,000 | |||||||||||||||||||||||||||||||||||||||||||||
Issuance of common
stock
|
85,368 | 854 | 269,486 | 270,340 | |||||||||||||||||||||||||||||||||||||||||||||
Net loss
|
$ | (209,569 | ) | (209,569 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Balance,
March 31, 1986
|
198,611 | 1,986 | 294,354 | (209,569 | ) | 86,771 | |||||||||||||||||||||||||||||||||||||||||||
Issuance of common
stock
|
42,901 | 429 | 285,987 | 286,416 | |||||||||||||||||||||||||||||||||||||||||||||
Net loss
|
(47,486 | ) | (47,486 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Balance,
March 31, 1987
|
241,512 | 2,415 | 580,341 | (257,055 | ) | 325,701 | |||||||||||||||||||||||||||||||||||||||||||
Issuance of common
stock
|
4,210 | 42 | 28,959 | 29,001 | |||||||||||||||||||||||||||||||||||||||||||||
Net loss
|
(294,416 | ) | (294,416 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Balance,
March 31, 1988
|
245,722 | 2,457 | 609,300 | (551,471 | ) | 60,286 | |||||||||||||||||||||||||||||||||||||||||||
Issuance of common
stock
|
62,792 | 628 | 569,372 | 570,000 | |||||||||||||||||||||||||||||||||||||||||||||
Provision for
compensation
|
489,975 | 489,975 | |||||||||||||||||||||||||||||||||||||||||||||||
Net loss
|
(986,746 | ) | (986,746 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Balance,
March 31, 1989
|
308,514 | 3,085 | 1,668,647 | (1,538,217 | ) | 133,515 | |||||||||||||||||||||||||||||||||||||||||||
Issuance of common
stock
|
16,478 | 165 | 171,059 | 171,224 | |||||||||||||||||||||||||||||||||||||||||||||
Provision for
compensation
|
320,980 | 320,980 | |||||||||||||||||||||||||||||||||||||||||||||||
Net loss
|
(850,935 | ) | (850,935 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Balance,
March 31, 1990
|
324,992 | 3,250 | 2,160,686 | (2,389,152 | ) | (225,216 | ) | ||||||||||||||||||||||||||||||||||||||||||
Issuance of common
stock
|
218 | 2 | 1,183 | 1,185 | |||||||||||||||||||||||||||||||||||||||||||||
Provision for
compensation
|
6,400 | 6,400 | |||||||||||||||||||||||||||||||||||||||||||||||
Net loss
|
(163,693 | ) | (163,693 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Balance,
March 31, 1991
|
325,210 | 3,252 | 2,168,269 | (2,552,845 | ) | (381,324 | ) | ||||||||||||||||||||||||||||||||||||||||||
Issuance of common
stock
|
18,119 | 181 | 85,774 | 85,955 | |||||||||||||||||||||||||||||||||||||||||||||
Provision for
compensation
|
864,496 | 864,496 | |||||||||||||||||||||||||||||||||||||||||||||||
Issuance
of stock options in exchange for cancellation of
indebtedness
|
57,917 | 57,917 | |||||||||||||||||||||||||||||||||||||||||||||||
Net loss
|
(1,479,782 | ) | (1,479,782 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Balance,
March 31, 1992
|
343,329 | 3,433 | 3,176,456 | (4,032,627 | ) | (852,738 | ) | ||||||||||||||||||||||||||||||||||||||||||
Issuance of common
stock
|
195,790 | 1,958 | 66,839 | 68,797 | |||||||||||||||||||||||||||||||||||||||||||||
Provision for
compensation
|
191,502 | 191,502 | |||||||||||||||||||||||||||||||||||||||||||||||
Net loss
|
(1,220,079 | ) | (1,220,079 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Balance,
March 31, 1993
|
539,119 | 5,391 | 3,434,797 | (5,252,706 | ) | (1,812,518 | ) | ||||||||||||||||||||||||||||||||||||||||||
Issuance of common
stock
|
107,262 | 1,073 | 40,602 | 41,675 | |||||||||||||||||||||||||||||||||||||||||||||
Provision for
compensation
|
43,505 | 43,505 | |||||||||||||||||||||||||||||||||||||||||||||||
Net loss
|
(2,246,426 | ) | (2,246,426 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Balance,
March 31, 1994
|
646,381 | 6,464 | 3,518,904 | (7,499,132 | ) | (3,973,764 | ) | ||||||||||||||||||||||||||||||||||||||||||
Net loss
|
(1,661,677 | ) | (1,661,677 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Balance,
March 31, 1995
|
646,381 | 6,464 | 3,518,904 | (9,160,809 | ) | (5,635,441 | ) | ||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock for
compensation
|
16,131 | 161 | 7,339 | 7,500 | |||||||||||||||||||||||||||||||||||||||||||||
Net loss
|
(1,005,962 | ) | (1,005,962 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Balance,
March 31, 1996
|
662,512 | 6,625 | 3,526,243 | (10,166,771 | ) | (6,633,903 | ) |
Series
A Convertible
Preferred
Stock
|
Series
B Convertible
Preferred
Stock
|
Series
C Convertible
Preferred
Stock
|
Series
D Convertible
Preferred
Stock
|
Series
E Convertible
Preferred
Stock
|
||||||||||||||||||||||||||||||||||||||||||||||
Issued
and Outstanding
|
Amount
|
Issued
and Outstanding
|
Amount
|
Issued
and Outstanding
|
Amount
|
Issued
and Outstanding
|
Amount
|
Issued and Outstanding
|
Amount
|
Common
Stock
Issued
and Outstanding
|
Amount
|
Additional
Paid-in Capital
|
Deficit
Accumulated During the Development Stage
|
Accumulated
Other Comprehensive Income (Loss)
|
Total
Stockholders’ Equity (Deficiency in Assets)
|
|||||||||||||||||||||||||||||||||||
Issuance of common
stock
|
12,986 | 130 | 5,908 | 6,038 | ||||||||||||||||||||||||||||||||||||||||||||||
Provision for compensation -
employees
|
45,086 | 45,086 | ||||||||||||||||||||||||||||||||||||||||||||||||
Provision for compensation -
nonemployees
|
62,343 | 62,343 | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of warrants to
purchase common stock
|
80,834 | 80,834 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net loss
|
(1,618,543 | ) | (1,618,543 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Balance,
March 31, 1997
|
675,498 | 6,755 | 3,720,414 | (11,785,314 | ) | (8,058,145 | ) | |||||||||||||||||||||||||||||||||||||||||||
Exercise of
options
|
68,167 | 682 | 28,862 | 29,544 | ||||||||||||||||||||||||||||||||||||||||||||||
Provision for compensation -
employees
|
50,680 | 50,680 | ||||||||||||||||||||||||||||||||||||||||||||||||
Provision for compensation -
nonemployees
|
201,696 | 201,696 | ||||||||||||||||||||||||||||||||||||||||||||||||
Contributed capital - common
stockholders
|
231,734 | 231,734 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net loss
|
(1,477,132 | ) | (1,477,132 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Balance,
March 31, 1998
|
743,665 | 7,437 | 4,233,386 | (13,262,446 | ) | (9,021,623 | ) | |||||||||||||||||||||||||||||||||||||||||||
Issuance
of common stock under private placement offering
|
575,000 | 5,750 | 824,907 | 830,657 | ||||||||||||||||||||||||||||||||||||||||||||||
Exercise of
options
|
40,650 | 406 | 12,944 | 13,350 | ||||||||||||||||||||||||||||||||||||||||||||||
Provision for compensation -
nonemployees
|
2,426,000 | 2,426,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock to
Criticare
|
86,207 | 862 | 133,621 | 134,483 | ||||||||||||||||||||||||||||||||||||||||||||||
Conversion of Criticare debt to
common stock
|
180,756 | 1,808 | 856,485 | 858,293 | ||||||||||||||||||||||||||||||||||||||||||||||
Conversion of debt to common
stock
|
424,222 | 4,242 | 657,555 | 661,797 | ||||||||||||||||||||||||||||||||||||||||||||||
Conversion
of redeemable preferred stock to common stock
|
1,195,017 | 11,950 | 1,852,300 | 3,713,334 | 5,577,584 | |||||||||||||||||||||||||||||||||||||||||||||
Net loss
|
(1,929,003 | ) | (1,929,003 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Balance,
March 31, 1999
|
3,245,517 | 32,455 | 10,997,198 | (11,478,115 | ) | (448,462 | ) | |||||||||||||||||||||||||||||||||||||||||||
Comprehensive
loss:
|
||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss
|
(11,433,926 | ) | (11,433,926 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Other
comprehensive loss:
|
||||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized loss on investment
securities available for sale
|
$ | (1,178 | ) | (1,178 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Comprehensive
loss
|
(11,435,104 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance
of common stock under initial public offering, less offering costs of
$513,000
|
1,150,000 | 11,500 | 9,161,110 | 9,172,610 | ||||||||||||||||||||||||||||||||||||||||||||||
Exercise of options and
warrants
|
247,420 | 2,474 | 424,348 | 426,822 | ||||||||||||||||||||||||||||||||||||||||||||||
Provision for compensation –
nonemployees
|
509,838 | 509,838 | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance
of common stock for compensation - nonemployees
|
611,250 | 6,113 | 6,106,387 | 6,112,500 | ||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock for
accrued interest
|
28,147 | 281 | 281,189 | 281,470 | ||||||||||||||||||||||||||||||||||||||||||||||
Balance,
March 31, 2000
|
5,282,334 | 52,823 | 27,480,070 | (22,912,041 | ) | (1,178 | ) | 4,619,674 | ||||||||||||||||||||||||||||||||||||||||||
Comprehensive
loss:
|
||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss
|
(9,863,284 | ) | (9,863,284 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Other
comprehensive income (loss):
|
||||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized
loss on investment securities available for sale
|
(1,764 | ) | (1,764 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Reclassification
adjustment for loss included in net loss
|
2,942 | 2,942 | ||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive
loss
|
(9,862,106 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance
of common stock under private placement offering
|
584,250 | 5,843 | 4,299,806 | 4,305,649 | ||||||||||||||||||||||||||||||||||||||||||||||
Exercise of
options
|
88,661 | 886 | 41,922 | 42,808 | ||||||||||||||||||||||||||||||||||||||||||||||
Provision for compensation -
nonemployees
|
1,739,294 | 1,739,294 | ||||||||||||||||||||||||||||||||||||||||||||||||
Contributed capital - common
stockholder
|
13,825 | 13,825 | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance,
March 31, 2001
|
5,955,245 | 59,552 | 33,574,917 | (32,775,325 | ) | 859,144 | ||||||||||||||||||||||||||||||||||||||||||||
Net loss
|
(3,323,110 | ) | (3,323,110 | ) |
Series
A Convertible
Preferred
Stock
|
Series
B Convertible
Preferred
Stock
|
Series
C Convertible
Preferred
Stock
|
Series
D Convertible
Preferred
Stock
|
Series
E Convertible
Preferred
Stock
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issued
and Outstanding
|
Amount
|
Issued
and Outstanding
|
Amount
|
Issued
and Outstanding
|
Amount
|
Issued
and Outstanding
|
Amount
|
Issued and Outstanding
|
Amount
|
Common
Stock
Issued
and Outstanding
|
Amount
|
Additional
Paid-in Capital
|
Deficit
Accumulated During the Development Stage
|
Accumulated
Other Comprehensive Income (Loss)
|
Total
Stockholders’ Equity (Deficiency in Assets)
|
|||||||||||||||||||||||||||||||||||||||||||
Issuance
of Series A convertible
preferred stock under private placement offerings, less cash offering costs of $153,985 |
160,100 | $ | 4,002,500 | 754,550 | (908,535 | ) | 3,848,515 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance
of common stock as offering costs under private placement
offerings
|
60,000 | 600 | (600 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrual of preferred stock
dividends
|
29,400 | (29,400 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of
options
|
51,214 | 512 | 18,972 | 19,484 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Provision for compensation -
nonemployees
|
332,005 | 332,005 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance,
March 31, 2002
|
160,100 | 4,031,900 | 6,066,459 | 60,664 | 34,679,844 | (37,036,370 | ) | 1,736,038 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net
loss
|
(4,679,069 | ) | (4,679,069 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance
of Series B convertible preferred stock under private placement offerings,
less cash offering costs of $58,792
|
76,725 | $ | 1,918,125 | 90,640 | (149,432 | ) | 1,859,333 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance
of common stock for services provided in connection with private placement
offerings
|
290,000 | 2,900 | 942,200 | 945,100 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion
of convertible preferred stock to common stock
|
(17,300 | ) | (437,396 | ) | (20,000 | ) | (515,671 | ) | 228,448 | 2,285 | 950,758 | (24 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Accrual
of preferred stock dividends
|
226,210 | 76,227 | (302,437 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payment
of preferred stock dividends
|
(152,709 | ) | (8,714 | ) | 45,529 | 456 | 160,657 | (310 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
Issuance
of common stock for land-use rights acquisition
|
1,260,000 | 12,600 | 2,986,200 | 2,998,800 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance
of common stock and warrants for services
|
8,333 | 83 | 89,042 | 89,125 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise
of options
|
217 | 2 | 126 | 128 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Provision
for compensation - nonemployees
|
243,150 | 243,150 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance,
March 31, 2003
|
142,800 | 3,668,005 | 56,725 | 1,469,967 | 7,898,986 | 78,990 | 40,142,617 | (42,167,308 | ) | 3,192,271 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net loss
|
(12,845,813 | ) | (12,845,813 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance
of Series C convertible preferred stock under private placement offerings,
less offering costs of $1,685,365 (including cash of
$289,000)
|
125,352 | 3,133,800 | (565,088 | ) | (1,120,277 | ) | 1,448,435 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance
of Series D convertible preferred stock under private placement offerings,
less cash offering costs of $428,919
|
200,000 | 5,000,000 | 1,544,368 | (1,973,287 | ) | 4,571,081 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance
of common stock for services provided in connection with private placement
offerings
|
220,000 | 2,200 | 1,394,800 | 1,397,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion
of convertible preferred stock to common stock
|
(62,000 | ) | (1,566,440 | ) | (36,800 | ) | (939,231 | ) | (53,048 | ) | (1,344,792 | ) | 887,817 | 8,878 | 3,841,327 | (258 | ) | |||||||||||||||||||||||||||||||||||||||||
Accrual of preferred stock
dividends
|
147,311 | 53,533 | 175,157 | 56,712 | (432,713 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Payment of preferred stock
dividends
|
(173,626 | ) | (68,176 | ) | (89,979 | ) | 44,398 | 443 | 330,197 | (1,141 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
Exercise of
warrants
|
559,350 | 5,594 | 4,468,572 | 4,474,166 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance
of common stock and warrants for services – nonemployees
|
201,667 | 2,017 | 7,231,835 | 7,233,852 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of
options
|
23,068 | 231 | 10,361 | 10,592 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Provision for compensation -
nonemployees
|
267,500 | 267,500 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance,
March 31, 2004
|
80,800 | 2,075,250 | 19,925 | 516,093 | 72,304 | 1,874,186 | 200,000 | 5,056,712 | 9,835,286 | 98,353 | 58,666,489 | (58,539,398 | ) | 9,747,685 | ||||||||||||||||||||||||||||||||||||||||||||
Net loss
|
(13,433,164 | ) | (13,433,164 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion
of convertible preferred stock to common stock
|
(20,400 | ) | (521,960 | ) | (11,852 | ) | (301,463 | ) | (39,720 | ) | (1,016,645 | ) | 295,813 | 2,959 | 1,837,011 | (98 | ) | |||||||||||||||||||||||||||||||||||||||||
Accrual of preferred stock
dividends
|
112,758 | 39,849 | 130,988 | 296,220 | (579,816 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Payment of preferred stock
dividend
|
(114,883 | ) | (39,849 | ) | (136,735 | ) | (218,630 | ) | 42,878 | 429 | 507,934 | (1,734 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Exercise of
warrants
|
235,390 | 2,354 | 1,893,482 | 1,895,836 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Extension of
warrants
|
4,841,245 | 4,841,245 |
Series
A Convertible
Preferred
Stock
|
Series
B Convertible
Preferred
Stock
|
Series
C Convertible
Preferred
Stock
|
Series
D Convertible
Preferred
Stock
|
Series
E Convertible
Preferred
Stock
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issued
and Outstanding
|
Amount
|
Issued
and Outstanding
|
Amount
|
Issued
and Outstanding
|
Amount
|
Issued
and Outstanding
|
Amount
|
Issued and Outstanding
|
Amount
|
Common
Stock
Issued
and Outstanding
|
Amount
|
Additional
Paid-in Capital
|
Deficit
Accumulated During the Development Stage
|
Accumulated
Other Comprehensive Income (Loss)
|
Total
Stockholders’ Equity (Deficiency in Assets)
|
|||||||||||||||||||||||||||||||||||||||||||
Issuance
of common stock for
secondary offering, less offering costs of $337,803 |
899,999 | 8,999 | 8,324,687 | 8,333,687 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of
options
|
23,000 | 230 | 21,870 | 22,100 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Provision for compensation -
nonemployees
|
335,412 | 335,412 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance,
March 31, 2005
|
60,400 | 1,551,165 | 19,925 | 516,093 | 60,452 | 1,566,976 | 160,280 | 4,117,657 | 11,332,366 | 113,324 | 76,428,132 | (72,552,378 | ) | 11,740,969 | ||||||||||||||||||||||||||||||||||||||||||||
Net loss
|
(15,525,435 | ) | (15,525,435 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion
of convertible preferred stock to common stock
|
(2,000 | ) | (51,068 | ) | (6,461 | ) | (163,249 | ) | (14,916 | ) | (375,903 | ) | (43,080 | ) | (1,095,429 | ) |
(4,000)
|
(101,611)
|
272,428 | 2,724 | 1,784,435 | (101 | ) | |||||||||||||||||||||||||||||||||||
Accrual of preferred stock
dividends
|
88,784 | 34,423 | 96,222 | 196,707 |
62,139
|
(478,275 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Payment of preferred stock
dividend
|
(89,096 | ) | (38,646 | ) | (106,950 | ) | (208,021 | ) | 37,812 | 378 | 441,187 | (1,148 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Exercise of
warrants
|
60,000 | 600 | 429,950 | 430,550 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Repricing of
warrants
|
125,042 | 125,042 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance
of Series E convertible preferred stock under private placement offerings,
less cash offering costs of $53,930
|
160,600
|
4,015,000
|
232,070 | (286,000 | ) | 3,961,070 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance
of common stock for secondary offering, less offering costs of
$166,554
|
2,000,000 | 20,000 | 14,693,373 | 14,713,373 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance
of common stock for services – nonemployees
|
2,000 | 20 | 25,800 | 25,820 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of
options
|
53,900 | 539 | 79,563 | 80,102 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Provision for compensation -
nonemployees
|
52,683 | 52,683 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance,
March 31, 2006
|
58,400 | 1,499,785 | 13,464 | 348,621 | 45,536 | 1,180,345 | 117,200 | 3,010,914 |
156,600
|
3,975,528
|
13,758,506 | 137,585 | 94,292,235 | (88,842,088 | ) | 15,602,925 | ||||||||||||||||||||||||||||||||||||||||||
Net
loss
|
(11,132,625 | ) | (11,132,625 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion
of convertible preferred stock to
common
stock
|
(2,900 | ) | (73,480 | ) |
(46,400)
|
(1,163,731)
|
181,812 | 1,818 | 1,235,370 | (23 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
Accrual
of preferred stock dividends
|
84,773 | 26,928 | 91,072 | 175,800 |
172,001
|
(550,574 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Payment
of preferred stock dividends
|
(85,795 | ) | (26,928 | ) | (91,072 | ) | (175,800 | ) |
(152,682)
|
84,318 | 843 | 530,679 | (755 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Exercise
of warrants
|
150,500 | 1,505 | 901,435 | 902,940 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance
of common stock for secondary
offering,
less cash offering costs of $635,574
|
1,000,000 | 10,000 | 6,104,426 | 6,114,426 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise
of options
|
68,085 | 681 | 17,163 | 17,844 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock
based compensation
|
90,000 | 900 | 2,950,543 | 2,951,443 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance,
March 31, 2007
|
55,500 | 1,425,283 | 13,464 | 348,621 | 45,536 | 1,180,345 | 117,200 | 3,010,914 |
110,200
|
2,831,116
|
15,333,221 | 153,332 | 106,031,851 | (100,525,287 | ) | $ | 14,456,175 | |||||||||||||||||||||||||||||||||||||||||
Net
loss
|
(10,512,952 | ) | (10,512,952 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion
of convertible preferred stock to
Common
stock
|
(5,000 | ) | (126,759 | ) | (2,000 | ) | (50,460 | ) | (2,000 | ) | (50,773 | ) |
(11,600)
|
(292,890)
|
88,615 | 886 | 519,965 | (31 | ) | |||||||||||||||||||||||||||||||||||||||
Accrual
of preferred stock dividends
|
80,804 | 25,547 | 91,072 | 173,688 |
157,476
|
(528,587 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Payment
of preferred stock dividends
|
(82,497 | ) | (26,928 | ) | (91,072 | ) | (174,296 | ) |
(162,595)
|
74,394 | 744 | 535,692 | (952 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Exercise
of warrants
|
78,312 | 783 | 482,328 | 483,111 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Extension
of warrants
|
440,422 | 440,422 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise
of options
|
23,226 | 233 | 2,246 | 2,479 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock
based compensation
|
2,731,395 | 2,731,395 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance,
March 31, 2008
|
50,500 | $ | 1,296,831 | 11,464 | $ | 296,780 | 45,536 | $ | 1,180,345 | 115,200 | $ | 2,959,533 |
98,600
|
$2,533,107
|
15,597,768 | $ | 155,978 | $ | 110,743,899 | $ | 111,566,826 | $ | 7,599,647 |
Years
Ended March 31,
|
October 15,
1984 (Inception)
to
March 31,
|
|||||||||||||||
OPERATING
ACTIVITIES:
|
2006
|
2007
|
2008
|
2008
|
||||||||||||
Net loss
|
$ | (15,525,435 | ) | $ | (11,132,625 | ) | $ | (10,512,952 | ) | $ | (106,597,392 | ) | ||||
Adjustments to reconcile net
loss to net cash used in operating activities:
|
||||||||||||||||
Compensation recorded related
to issuance of common stock, common stock options and
warrants
|
203,545 | 2,951,443 | 3,171,817 | 33,864,787 | ||||||||||||
Depreciation and amortization
of property and equipment
|
155,273 | 152,274 | 144,543 | 1,333,237 | ||||||||||||
Deferred rental
obligation
|
||||||||||||||||
(Gain)/Loss
on disposal of fixed assets
|
5,982 | 5,982 | ||||||||||||||
Equity in loss of joint
venture
|
135,002 | |||||||||||||||
Loss on sales of investment
securities - net
|
2,942 | |||||||||||||||
Amortization of debt discounts
and issuance costs
|
134,503 | |||||||||||||||
Gain on extinguishment of
debt
|
(1,427,765 | ) | ||||||||||||||
Changes in assets and
liabilities:
|
||||||||||||||||
Accounts
receivable
|
(54,205 | ) | (54,205 | ) | ||||||||||||
Other current
assets
|
(104,956 | ) | 94,432 | (154,387 | ) | (253,014 | ) | |||||||||
Other assets
|
(120,747 | ) | 121,864 | (18,665 | ) | (34,142 | ) | |||||||||
Accounts
payable
|
282,345 | 256,430 | 353,116 | 3,266,046 | ||||||||||||
Accrued
expenses
|
53,050 | 149,176 | 123,845 | 1,162,783 | ||||||||||||
Deferred
revenue
|
(919,007 | ) | 1,330,894 | 673,003 | 2,399,676 | |||||||||||
Net cash used in operating
activities
|
(15,975,932 | ) | (6,070,130 | ) | (6,273,885 | ) | (66,061,560 | ) | ||||||||
INVESTING
ACTIVITIES:
|
||||||||||||||||
Purchase of property and
equipment
|
(55,634 | ) | (51,794 | ) | (18,873 | ) | (1,636,122 | ) | ||||||||
Restricted funds on
deposit
|
1,513,893 | (2,588,580 | ) | (657,487 | ) | (3,776,253 | ) | |||||||||
Advances to Joint
Venture
|
(135,002 | ) | ||||||||||||||
Proceeds from maturities of
investments
|
1,800,527 | |||||||||||||||
Purchases of investment
securities
|
(1,803,469 | ) | ||||||||||||||
Net cash provided by (used in)
investing activities
|
1,458,259 | (2,640,374 | ) | (676,360 | ) | (5,550,319 | ) | |||||||||
FINANCING
ACTIVITIES:
|
||||||||||||||||
Net advances from stockholders
and affiliates
|
985,172 | |||||||||||||||
Proceeds from issuance of notes
payable
|
2,645,194 | |||||||||||||||
Principal payments on notes
payable
|
(218,119 | ) | ||||||||||||||
Payments for debt issuance
costs
|
(53,669 | ) | ||||||||||||||
Payments for extinguishment of
debt
|
(203,450 | ) | ||||||||||||||
Net proceeds from issuance of
redeemable preferred stock
|
3,330,000 | |||||||||||||||
Net proceeds from issuance of
convertible preferred stock and warrants
|
3,961,070 | 17,085,434 | ||||||||||||||
Payments for convertible
preferred stock dividends and for fractional shares of common stock
resulting from the conversions of convertible preferred
stock
|
(1,249 | ) | (778 | ) | (983 | ) | (6,575 | ) | ||||||||
Net proceeds from issuance of
common stock
|
15,224,025 | 7,035,210 | 485,590 | 53,798,490 | ||||||||||||
Additional capital contributed
by stockholders
|
245,559 | |||||||||||||||
Net cash provided by financing
activities
|
19,183,846 | 7,034,432 | 484,607 | 77,608,036 | ||||||||||||
NET
INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS
|
4,666,173 | (1,676,072 | ) | (6,465,638 | ) | 5,996,157 | ||||||||||
CASH
AND CASH EQUIVALENTS, BEGINNING OF THE YEAR
|
9,471,694 | 14,137,867 | 12,461,795 | |||||||||||||
CASH
AND CASH EQUIVALENTS, END OF THE YEAR
|
$ | 14,137,867 | $ | 12,461,795 | $ | 5,996,157 | $ | 5,996,157 | ||||||||
SUPPLEMENTAL
CASH FLOW INFORMATION (Note 11)
|
1.
|
COMPANY
BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
|
2.
|
RECAPITALIZATION,
PRIVATE PLACEMENTS, INITIAL PUBLIC OFFERING AND SECONDARY PUBLIC
OFFERING
|
3.
|
INVESTMENT
IN NEXTERA THERAPEUTICS,
INC.
|
4.
|
PROPERTY
AND
EQUIPMENT
|
2007
|
2008
|
|||||||
Research
and laboratory equipment
|
$ | 450,806 | $ | 451,441 | ||||
Furniture
and office equipment
|
331,237 | 344,333 | ||||||
Leasehold
improvements
|
42,359 | 42,359 | ||||||
Property
and equipment – at cost
|
824,402 | 838,133 | ||||||
Less
accumulated depreciation
|
684,139 | 748,614 | ||||||
Property
and equipment – net
|
$ | 140,263 | $ | 89,519 |
5.
|
PREPAID
RENT
|
2007
|
2008
|
|||||||
Prepaid
rent
|
$ | 3,558,994 | $ | 3,558,994 | ||||
Less
amortization
|
249,754 | 324,680 | ||||||
Prepaid
rent - net
|
$ | 3,309,240 | $ | 3,234,314 |
6.
|
ACCRUED
EXPENSES AND OTHER CURRENT
LIABILITIES
|
2007
|
2008
|
|||||||
Accrued
research and development
|
$ | 199,789 | $ | 20,817 | ||||
Accrued
general and administrative
|
75,000 | 20,000 | ||||||
Accrued litigation settlement | 0 | 362,000 | ||||||
Accrued patents | 50,000 | 40,000 | ||||||
Accrued compensation | 39,516 | 35,457 | ||||||
Other
|
11,620 | 21,496 | ||||||
$ | 375,925 | $ | 499,770 |
7.
|
INCOME
TAXES
|
March 31,
|
||||||||
2007
|
2008
|
|||||||
Deferred
income tax assets:
|
||||||||
Federal net operating loss
carryforwards
|
$ | 29,090,000 | $ | 31,237,000 | ||||
State net operating loss
carryforwards
|
4,011,000 | 4,146,000 | ||||||
Federal income tax credit
carryforwards
|
1,885,000 | 2,422,000 | ||||||
Deferred
revenue
|
587,000 | 816,000 | ||||||
Total deferred income tax
assets
|
35,573,000 | 38,621,000 | ||||||
Valuation
allowance
|
(35,573,000 | ) | (38,621,000 | ) | ||||
Net
deferred income taxes recognized in the accompanying balance
sheets
|
$ | 0 | $ | 0 |
Years
Ended March 31,
|
||||||||||||
2006
|
2007
|
2008
|
||||||||||
Federal
statutory income tax rate
|
(34.0 | )% | (34.0 | )% | (34.0 | )% | ||||||
State
income taxes
|
(4.8 | ) | (4.8 | ) | (4.8 | ) | ||||||
Benefit
of federal and state net operating loss and tax credit carryforwards and
other deferred income tax assets not recognized
|
38.8 | 38.8 | 38.8 | |||||||||
Effective
income tax rate
|
0.0 | % | 0.0 | % | 0.0 | % |
8.
|
STOCKHOLDERS’
EQUITY
|
Number
of
Shares |
Stock
Options Price Range
|
Weighted
Average Exercise Price
|
Weighted
Average Remaining Contractual Life-Years |
|||||||||||
Outstanding
as of March 31, 2005
|
1,330,057 |
0.34
- 21.66
|
9.26 | 6.77 | ||||||||||
Granted
|
364,001 |
7.29-12.38
|
8.02 | |||||||||||
Exercised
|
(62,844) |
0.46
- 2.55
|
1.63 | |||||||||||
Expired
|
(76,834) |
2.55-21.66
|
9.86 | |||||||||||
Outstanding
as of March 31, 2006
|
1,554,380 |
0.34
- 21.66
|
9.25 | 5.75 | ||||||||||
Granted
|
421,000 |
5.60-
7.35
|
5.97 | |||||||||||
Exercised
|
(87,605) |
0.46
- 4.75
|
2.05 | |||||||||||
Expired
|
(87,166) |
4.75
-12.33
|
5.27 | |||||||||||
Outstanding
as of March 31, 2007
|
1,800,609 |
0.34
- 21.66
|
8.92 | 6.90 | ||||||||||
Granted
|
487,318 |
6.35
- 7.45
|
6.57 | |||||||||||
Exercised
|
(23,226) |
0.46-
2.55
|
0.94 | |||||||||||
Expired
|
(166,588) |
0.46
-14.29
|
7.97 | |||||||||||
Outstanding
as of March 31, 2008
|
2,098,113 |
$0.46
– 21.66
|
$8.53
|
6.94 | ||||||||||
Exercisable
as of March 31, 2006
|
1,115,167 |
0.34
- 21.66
|
9.56 | 5.75 | ||||||||||
Exercisable
as of March 31, 2007
|
1,307,610 |
0.34
- 21.66
|
9.76 | 6.19 | ||||||||||
Exercisable
as of March 31, 2008
|
1,666,259 |
0.46
- 21.66
|
9.10 | 6.32 |
2006
|
||||
Net
loss attributable to common shareholders -
|
||||
as
reported
|
$ | (16,289,710 | ) | |
Deduct: total
stock-based compensation expense
|
||||
determined
under fair value method for awards to
|
||||
employees
and directors
|
(3,575,570 | ) | ||
Net
loss attributable to common stockholders -
|
||||
pro
forma
|
$ | (19,865,280 | ) | |
Basic
and diluted net loss per share attributable
|
||||
to
common stockholders - as reported
|
$ | (1.37 | ) | |
Basic
and diluted net loss per share attributable
|
||||
to
common stockholders - pro forma
|
$ | (1.68 | ) |
2006
|
2007
|
2008
|
||||||||||
Risk
free interest rate
|
4.59%
|
4.80%
|
4.41%
|
|||||||||
Average
life of options (years)
|
10.0
|
9.5
|
10.0
|
|||||||||
Volatility
|
70%
|
78%
|
67%
|
|||||||||
Dividend
yield
|
-0-
|
-0-
|
-0-
|
Number
of Shares
|
Warrants
Price
Range
|
Weighted
Average Exercise Price
|
||||||||
Outstanding
as of March 31, 2005
|
2,740,410
|
6.00-16.00
|
7.51
|
|||||||
Granted
|
251,500
|
10.00-13.11
|
11.24
|
|||||||
Cancelled
|
(90,000)
|
8.80
|
8.80
|
|||||||
Exercised
|
(51,800)
|
6.47-8.80
|
8.04
|
|||||||
Outstanding
as of March 31, 2006
|
2,850,110
|
6.00-16.00
|
7.52
|
|||||||
Granted
|
100,000
|
9.18
|
9.18
|
|||||||
Cancelled
|
(496,000)
|
6.00
|
6.00
|
|||||||
Exercised
|
(150,500)
|
6.00
|
6.00
|
|||||||
Outstanding
as of March 31, 2007
|
2,303,610
|
6.00-16.00
|
8.02
|
|||||||
Granted
|
80,000
|
9.00-10.00
|
9.63
|
|||||||
Cancelled
|
(45,498)
|
6.00-6.13
|
6.10
|
|||||||
Exercised
|
(78,312)
|
6.13-6.47
|
6.17
|
|||||||
Outstanding
as of March 31, 2008
|
2,259,800
|
$6.08-16.00
|
$8.20
|
|||||||
Exercisable
as of March 31, 2006
|
2,740,110
|
6.00-16.00
|
7.34
|
|||||||
Exercisable
as of March 31, 2007
|
2,293,610
|
6.00-16.00
|
8.05
|
|||||||
Exercisable
as of March 31, 2008
|
2,249,800
|
6.08-16.00
|
8.18
|
Exercise
Price Per Share
|
Warrants
Outstanding |
Expiration
Date
|
|||||
6.08
|
600,000
|
7/16/10
|
|||||
6.47
|
198,200
|
7/24/08
|
|||||
6.47
|
750,000
|
10/12/08
|
|||||
9.00
|
30,000
|
7/17/11
|
|||||
9.18
|
100,000
|
1/16/12
|
|||||
10.00
|
50,000
|
9/10/10
|
|||||
10.00
|
151,500
|
12/13/08
|
|||||
12.81
|
80,100
|
7/30/09
|
|||||
13.11
|
100,000
|
7/13/10
|
|||||
16.00
|
200,000
|
1/22/09
|
|||||
Total
Warrants Outstanding
|
2,259,800
|
9.
|
COLLABORATIVE
RESEARCH AND DEVELOPMENT
ACTIVITIES
|
10.
|
OTHER
COMMITMENTS AND
CONTINGENCIES
|
Year
Ending March 31,
|
Lease
Payments
|
|
2009
|
166,000
|
|
2010
|
99,000
|
|
Total
|
$265,000
|
11.
|
SUPPLEMENTAL
CASH FLOW
INFORMATION
|
Year
Ended March 31,
|
||||||||||||
2006
|
2007
|
2008
|
||||||||||
Convertible
preferred stock dividends recorded
|
478,275 | 550,574 | 528,587 | |||||||||
Issuance
of common stock as payment of convertible preferred stock
dividends
|
441,565 | 531,522 | 536,436 | |||||||||
Issuance
of common stock for conversions of convertible preferred
stock
|
1,787,159 | 1,237,188 | 520,851 |
12.
|
SELECTED
QUARTERLY INFORMATION
(UNAUDITED)
|
Fiscal
Quarter Ended
|
Fiscal
Quarter Ended
|
|||||||||||||||
March 31,
2008 |
December
31, 2007
|
September
30, 2007
|
June
30,
2007 |
March 31,
2007 |
December
31, 2006 |
September
30, 2006
|
June
30, 2006
|
|||||||||
Statements
of Operations Data:
|
||||||||||||||||
REVENUES
|
$ 6,025(6)
|
$ 1,835
|
$ 1,030
|
$ 826
|
$
1,339
|
$
546
|
$ 491
|
$1,942
|
||||||||
EXPENSES:
|
||||||||||||||||
Research
and development
|
3,155
|
4,214
|
2,283
|
1,918
|
2,674
|
1,862
|
1,755
|
2,469
|
||||||||
General
and administrative
|
2,243(7)
|
2,926
|
2,214(5)
|
1,717
|
1,881
|
2,630(4)
|
2,364
|
2,220(2)
|
||||||||
Other
|
(1,875)
(3)
|
|||||||||||||||
Total
expenses
|
5,398
|
7,140
|
4,497
|
3,635
|
4,555
|
4,492
|
2,244
|
4,689
|
||||||||
INCOME/(LOSS)
FROM OPERATIONS
|
627
|
(5,305)
|
(3,467)
|
(2,809)
|
(3,216)
|
(3,946)
|
(1,753)
|
(2,747)
|
||||||||
OTHER
INCOME(EXPENSE):
|
||||||||||||||||
Interest
income
|
59
|
101
|
132
|
148
|
131
|
117
|
132
|
150
|
||||||||
NET
LOSS
|
(3,085)
|
(3,829)
|
(1,621)
|
(2,597)
|
||||||||||||
PREFERRED
STOCK DIVIDENDS AND PREFERRED STOCK PREMIUM DEEMED DIVIDENDS(1)
|
(126)
|
(133)
|
(135)
|
(135)
|
(134)
|
(137)
|
(137)
|
(143)
|
||||||||
NET
INCOME/(LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS
|
$ 560
|
$ (5,336)
|
$ (3,469)
|
$ (2,796)
|
$
(3,219)
|
$
(3,966)
|
$
(1,758)
|
$
(2,740)
|
||||||||
NET
INCOME/(LOSS) PER SHARE ATTRIBUTABLE TO COMMON
STOCKHOLDERS:
|
||||||||||||||||
Net
income/(loss)
|
$ 0.04
|
$ (0.33)
|
$ (0.22)
|
$ (0.17)
|
$ (0.21)
|
$
(0.27)
|
$ (0.12)
|
$ (0.19)
|
||||||||
Preferred
Stock dividends
|
(0.01)
|
(0.01)
|
(0.01)
|
(0.01)
|
(0.01)
|
(0.01)
|
(0.01)
|
(0.01)
|
||||||||
BASIC
AND DILUTED NET INCOME/(LOSS) PER SHARE ATTRIBUTABLE TO COMMON
STOCKHOLDERS
|
$ 0.03
|
$ (0.34)
|
$ (0.23)
|
$ (0.18)
|
$ (0.22)
|
$
(0.28)
|
$ (0.13)
|
$ (0.20)
|
(1)
|
See
Note 8 to the notes to our consolidated financial statements included in
this Annual Report on Form 10-K for a discussion on the Preferred Stock
dividends.
|
(2)
|
Includes
$36 of costs relating to the issuance of 5,000 common shares to Tulane
University for the AQ-13 agreement and $36 of costs relating to the
issuance of 5,000 common shares under the T. Stephen Thompson retirement
agreement.
|
(3)
|
Includes
the award by the International Court of Arbitration of the International
Chamber of Commerce for the breach of a testing agreement by Neurochem,
Inc., and attorneys’ fees and costs of approximately
$1,875,000.
|
(4)
|
Includes
$564 of costs relating to the issuance of 80,000 common shares to China
Pharmaceutical for the attainment of certain
milestones.
|
(5)
|
Includes
$172 of costs relating to the issuance of 50,000 warrants to a consultant
and $118 of costs relating to the issuance of 30,000 warrants to an
investor relations firm.
|
(6)
|
Includes
$1,619 relating to revenue from the license agreement with Par
Pharmaceutical Companies, Inc. and $2,444 relating to revenue from the
license agreement with BioAlliance Pharma SA. The revenue comes
about by the discontinuation of the pafuramidine project. See
Notes 1 and 9 to the notes to our consolidated financial
statements included in this Annual Report on Form 10-K for a discussion on
revenue recognition.
|
(7)
|
Includes
$440 of costs relating to the two year extension of the China Harvest
International, Ltd. warrants.
|
13.
|
SUBSEQUENT
EVENT
|