þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware (State or other jurisdiction of incorporation or organization) |
84-1318182 (I.R.S. Employer Identification No.) |
|
12390 El Camino Real, Suite 150, San Diego, CA (Address of principal executive offices) |
92130 (Zip Code) |
Large accelerated filer o | Accelerated filer o | Non-accelerated filer o | Smaller reporting company þ |
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Exhibit 10.6 | ||||||||
Exhibit 10.7 | ||||||||
Exhibit 10.9 | ||||||||
Exhibit 10.10 | ||||||||
Exhibit 31.1 | ||||||||
Exhibit 31.2 | ||||||||
Exhibit 32.1 |
i
Item 1. | Financial Statements |
March 31, | December 31, | |||||||
2011 | 2010 | |||||||
(Unaudited) | ||||||||
Assets |
||||||||
Current assets: |
||||||||
Cash |
$ | 46,552,168 | $ | 27,978,823 | ||||
Interest and other receivables |
135 | 1,980 | ||||||
Prepaid expenses |
334,019 | 428,276 | ||||||
Total current assets |
46,886,322 | 28,409,079 | ||||||
Property and equipment, net |
39,580 | 44,254 | ||||||
Other assets |
31,262 | 33,484 | ||||||
Total assets |
$ | 46,957,164 | $ | 28,486,817 | ||||
Liabilities and Stockholders Equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 898,008 | $ | 479,780 | ||||
Accrued liabilities |
963,494 | 864,857 | ||||||
Accrued compensation and payroll taxes |
272,035 | 456,839 | ||||||
Total current liabilities |
2,133,537 | 1,801,476 | ||||||
Stockholders equity: |
||||||||
Common stock, $0.001 par value; 500,000,000 shares authorized;
23,664,858 and 15,480,302 shares issued and outstanding at
March 31, 2011 and December 31, 2010, respectively |
23,665 | 15,480 | ||||||
Additional paid-in capital |
203,885,522 | 182,798,982 | ||||||
Deficit accumulated during the development stage |
(159,085,560 | ) | (156,129,121 | ) | ||||
Total stockholders equity |
44,823,627 | 26,685,341 | ||||||
Total liabilities and stockholders equity |
$ | 46,957,164 | $ | 28,486,817 | ||||
Note: | The balance sheet at December 31, 2010 has been derived from audited financial statements at
that date. It does not include, however, all of the information and notes required by accounting
principles generally accepted in the United States of America for complete financial statements. |
1
Inception | ||||||||||||
(June 12, 1996) | ||||||||||||
Three months ended March 31, | through | |||||||||||
2011 | 2010 | March 31, 2011 | ||||||||||
Revenues: |
||||||||||||
Net sales |
$ | | $ | | $ | 174,830 | ||||||
Licensing revenue |
| | 1,300,000 | |||||||||
Grant revenue |
| | 618,692 | |||||||||
Total net revenues |
| | 2,093,522 | |||||||||
Cost of goods sold |
| | 51,094 | |||||||||
Gross margin |
| | 2,042,428 | |||||||||
Operating expenses: |
||||||||||||
Research and development |
611,293 | 1,239,329 | 72,822,260 | |||||||||
Selling, general and administrative |
1,573,746 | 1,174,676 | 54,530,960 | |||||||||
Transaction-related expenses |
799,505 | | 1,129,874 | |||||||||
Depreciation and amortization |
9,871 | 5,880 | 10,907,489 | |||||||||
In-process research and development |
| | 10,422,130 | |||||||||
Impairment loss write off of goodwill |
| | 5,702,130 | |||||||||
Equity in loss of investee |
| | 178,936 | |||||||||
Total operating expenses |
2,994,415 | 2,419,885 | 155,693,779 | |||||||||
Loss from operations |
(2,994,415 | ) | (2,419,885 | ) | (153,651,351 | ) | ||||||
Loss on fair value of warrants |
| | (12,239,688 | ) | ||||||||
Interest income |
32,871 | 18,440 | 4,714,932 | |||||||||
Interest expense |
| (1,629 | ) | (180,719 | ) | |||||||
Other income |
5,105 | | 68,480 | |||||||||
Loss before cumulative effect of change in accounting principle |
(2,956,439 | ) | (2,403,074 | ) | (161,288,346 | ) | ||||||
Cumulative effect of change in accounting principle |
| | (25,821 | ) | ||||||||
Net loss |
(2,956,439 | ) | (2,403,074 | ) | (161,314,167 | ) | ||||||
Preferred stock dividends |
| | (621,240 | ) | ||||||||
Deemed dividends on preferred stock |
| (2,514,920 | ) | (10,506,683 | ) | |||||||
Net loss applicable to common stock |
$ | (2,956,439 | ) | $ | (4,917,994 | ) | $ | (172,442,090 | ) | |||
Net loss per common share basic and diluted |
$ | (0.13 | ) | $ | (0.48 | ) | ||||||
Weighted average shares basic and diluted |
22,755,463 | 10,143,789 | ||||||||||
2
Inception | ||||||||||||
(June 12, 1996) | ||||||||||||
Three months ended March 31, | through | |||||||||||
2011 | 2010 | March 31, 2011 | ||||||||||
Cash flows from operating activities: |
||||||||||||
Net loss |
$ | (2,956,439 | ) | $ | (2,403,074 | ) | $ | (161,314,167 | ) | |||
Adjustments to reconcile net loss to net cash used in operating
activities: |
||||||||||||
Depreciation and amortization |
9,871 | 5,880 | 10,457,491 | |||||||||
(Gain) loss on disposals of fixed assets |
(2,973 | ) | | 56,812 | ||||||||
Loss on fair value of warrants |
| | 12,239,688 | |||||||||
Expenses related to employee stock options and restricted
stock issued |
135,318 | 225,490 | 9,359,260 | |||||||||
Expense related to stock options issued to non-employees |
| | 204,664 | |||||||||
Expenses paid by issuance of common stock |
| | 1,341,372 | |||||||||
Expenses paid by issuance of warrants |
| | 573,357 | |||||||||
Expenses paid by issuance of preferred stock |
| | 142,501 | |||||||||
Expenses related to stock warrants issued |
| | 612,000 | |||||||||
Accretion of discount on investments in securities |
| | (1,604,494 | ) | ||||||||
Amortization of debt discount |
| | 450,000 | |||||||||
Forgiveness of employee receivable |
| | 30,036 | |||||||||
Impairment loss write-off of goodwill |
| | 5,702,130 | |||||||||
Equity in loss of investee |
| | 178,936 | |||||||||
In-process research and development |
| | 10,422,130 | |||||||||
Write-off of license agreement |
| | 152,866 | |||||||||
Write-off of assets available-for-sale |
| | 108,000 | |||||||||
Cumulative effect of change in accounting principle |
| | 25,821 | |||||||||
Changes in assets and liabilities, net of effect of acquisitions: |
||||||||||||
(Increase) decrease in prepaid expenses and other assets |
98,324 | 97,800 | (612,786 | ) | ||||||||
Increase (decrease) in accounts payable and accrued liabilities |
332,061 | (1,106,877 | ) | 2,310,245 | ||||||||
Net cash used in operating activities |
(2,383,838 | ) | (3,180,781 | ) | (109,164,138 | ) | ||||||
Cash flows from investing activities: |
||||||||||||
Purchases of short-term investments |
| | (111,183,884 | ) | ||||||||
Proceeds from sales and maturities of short-term investments |
| | 112,788,378 | |||||||||
Purchases of property and equipment |
(14,858 | ) | (6,780 | ) | (1,073,725 | ) | ||||||
Proceeds from sale of property and equipment |
12,635 | | 66,920 | |||||||||
Purchase of certificate of deposit |
| | (1,016,330 | ) | ||||||||
Maturity of certificate of deposit |
| | 1,016,330 | |||||||||
Payment on obligation under license agreement |
| | (106,250 | ) | ||||||||
Cash acquired from acquisitions, net of cash paid |
| | 32,395 | |||||||||
Issuance of note receivable related party |
| | (35,000 | ) | ||||||||
Payments on note receivable |
| | 405,993 | |||||||||
Advance to investee |
| | (90,475 | ) | ||||||||
Cash transferred in rescission of acquisition |
| | (19,475 | ) | ||||||||
Cash received in rescission of acquisition |
| | 230,000 | |||||||||
Net cash provided by (used in) investing activities |
(2,223 | ) | (6,780 | ) | 1,014,877 | |||||||
3
Inception | ||||||||||||
(June 12, 1996) | ||||||||||||
Three months ended March 31, | through | |||||||||||
2011 | 2010 | March 31, 2011 | ||||||||||
Cash flows from financing activities: |
||||||||||||
Proceeds from sale of preferred stock |
| 15,453,226 | 44,474,720 | |||||||||
Proceeds of restricted cash for preferred stock dividends |
| | 633,008 | |||||||||
Proceeds from sale of common stock |
22,507,529 | | 106,658,871 | |||||||||
Proceeds from exercise of stock options |
| | 712,367 | |||||||||
Proceeds from sale or exercise of warrants |
| 317,444 | 14,714,258 | |||||||||
Payment to escrow for preferred stock dividends obligation |
| | (633,008 | ) | ||||||||
Repurchase of warrants |
| | (55,279 | ) | ||||||||
Payments for financing and offering costs |
(1,548,123 | ) | (1,438,500 | ) | (12,542,171 | ) | ||||||
Payments on notes payable and long-term debt |
| | (605,909 | ) | ||||||||
Proceeds from issuance of notes payable and detachable warrants |
| | 1,344,718 | |||||||||
Cash paid in lieu of fractional shares for reverse stock split |
| | (146 | ) | ||||||||
Net cash provided by financing activities |
20,959,406 | 14,332,170 | 154,701,429 | |||||||||
Net increase in cash |
18,573,345 | 11,144,609 | 46,552,168 | |||||||||
Cash at beginning of period |
27,978,823 | 8,667,404 | | |||||||||
Cash at end of period |
$ | 46,552,168 | $ | 19,812,013 | $ | 46,552,168 | ||||||
4
1. | Basis of Presentation |
ADVENTRX Pharmaceuticals, Inc., a Delaware corporation (ADVENTRX, we, our or the
Company), prepared the unaudited interim condensed consolidated financial statements included
in this report in accordance with accounting principles generally accepted in the United States
of America (U.S. GAAP) for interim financial information and with the instructions of the
Securities and Exchange Commission (SEC). Accordingly, they do not include all of the
information and disclosures required by U.S. GAAP for annual audited financial statements and
should be read in conjunction with our audited consolidated financial statements and related
notes for the year ended December 31, 2010 included in our Annual Report on Form 10-K filed with
the SEC on March 10, 2011 (2010 Annual Report). The condensed consolidated balance sheet as of
December 31, 2010 included in this report has been derived from the audited consolidated
financial statements included in the 2010 Annual Report. In the opinion of management, these
consolidated financial statements include all adjustments (consisting of normal recurring
adjustments) necessary for a fair presentation of the financial position, results of operations
and cash flows for the periods presented. The results of operations for the interim periods
shown in this report are not necessarily indicative of results expected for the full year. |
The condensed consolidated financial statements include the accounts of the Company and its
wholly-owned subsidiary, SD Pharmaceuticals, Inc. All intercompany accounts and transactions
have been eliminated in consolidation. |
In February 2011, we entered into an agreement and plan of merger to acquire SynthRx, Inc.
(SynthRx), a privately-held Delaware corporation developing a novel, purified, rheologic and
antithrombotic compound that we will develop as ANX-188, in exchange for shares of our common
stock. The transaction was completed on April 8, 2011. Effective April 8, 2011, SynthRx is a
wholly-owned subsidiary of the Company and its accounts will be included in the condensed
consolidated financial statements of the Company. |
On April 23, 2010, the Company effected a 1-for-25 reverse split of its common stock, which was
authorized by its stockholders at a special meeting held in August 2009. All common stock share
and per share information in the condensed consolidated financial statements and notes thereto
included in this report have been restated to reflect retrospective application of the reverse
stock split for all periods presented ending or as of a date prior to April 23, 2010, except for
par value per share and the number of authorized shares, which were not affected by the reverse
stock split. |
2. | Use of Estimates |
The preparation of financial statements in conformity with U.S. GAAP requires management to make
estimates and assumptions that affect the amounts reported in the condensed consolidated
financial statements and accompanying notes. Actual results could differ from those estimates. |
Certain balances have been reclassified in the accompanying condensed consolidated financial
statements to conform to the current year presentation. |
3. | Share-Based Compensation Expense |
Estimated share-based compensation expense related to equity awards granted to our employees and
non-employee directors for the three months ended March 31, 2011 and 2010 was as follows: |
Three months ended March 31, | ||||||||
2011 | 2010 | |||||||
Selling, general and administrative expense |
$ | 137,176 | $ | 228,537 | ||||
Research and development expense |
(1,858 | ) | (3,047 | ) | ||||
Share-based compensation expense before taxes |
135,318 | 225,490 | ||||||
Related income tax benefits |
| | ||||||
Share-based compensation expense |
$ | 135,318 | $ | 225,490 | ||||
Net share-based compensation expense per
common share basic and diluted |
$ | 0.01 | $ | 0.02 | ||||
5
There were no employee or non-employee director stock options exercised during the three
months ended March 31, 2011 and 2010. During the three months ended March 31, 2011 and 2010, we
granted stock options to acquire an aggregate of 244,654 and 183,381 shares, respectively, of
our common stock to our employees and non-employee directors with an estimated weighted-average
grant date fair value of $2.25 and $7.64 per share, respectively. At March 31, 2011, total
unrecognized estimated compensation cost related to non-vested employee and non-employee
director share-based awards granted prior to that date was $1.4 million, which is expected to be
recognized over a weighted-average period of 2.8 years. |
4. | Comprehensive Loss |
Comprehensive loss is defined as the change in equity of a business enterprise during a period
from transactions and other events and circumstances from non-owner sources, including foreign
currency translation adjustments and unrealized gains and losses on marketable securities. Our
components of comprehensive loss consist only of net loss. For the three months ended March 31,
2011 and 2010, comprehensive loss was $3.0 million and $2.4 million, respectively. |
5. | Net Loss Per Common Share |
Basic and diluted net loss per common share was calculated by dividing the net loss applicable
to common stock for the period by the weighted-average number of common shares outstanding
during the period, without consideration for our outstanding common stock equivalents because
their effect would have been anti-dilutive. Common stock equivalents are included in the
calculation of diluted earnings per common share only if their effect is dilutive. As of March
31, 2011 and 2010, our outstanding common stock equivalents consisted of options and warrants as
follows: |
March 31, | ||||||||
2011 | 2010 | |||||||
Options |
648,391 | 413,737 | ||||||
Warrants |
8,556,536 | 1,459,874 | ||||||
9,204,927 | 1,873,611 | |||||||
6. | Recent Accounting Pronouncements |
In October 2009, the Financial Accounting Standards Board (FASB) issued Accounting Standard
Update (ASU) No. 2009-13, Revenue Recognition (ASC 605) Multiple-Deliverable Revenue
Arrangements, a consensus of the FASB Emerging Issues Task Force. The guidance modifies the fair
value requirements of Accounting Standards Codification (ASC) subtopic 605-25 Revenue
Recognition Multiple Element Arrangements by providing principles for allocation of
consideration among its multiple elements, allowing more flexibility in identifying and
accounting for separate deliverables under an arrangement. An estimated selling price method is
introduced for valuing the elements of a bundled arrangement if vendor-specific objective
evidence or third-party evidence of selling price is not available, and significantly expands
related disclosure requirements. This guidance is effective prospectively for revenue
arrangements entered into or materially modified in fiscal years beginning on or after June 15,
2010. Currently, we have no multiple-deliverable revenue arrangements that would be affected by
this guidance. |
In March 2010, the FASB ratified the milestone method of revenue recognition. Under this
standard, an entity can recognize contingent consideration earned from the achievement of a
substantive milestone in its entirety in the period in which the milestone is achieved. A
milestone is defined as an event (i) that can only be achieved based in whole or in part on
either the entitys performance or on the occurrence of a specific outcome resulting from the
entitys performance (ii) for which there is substantive uncertainty at the date the arrangement
is entered into that the event will be achieved and (iii) that would result in additional
payments being due to the entity. This guidance is effective for years beginning after June 15,
2010. We do not believe that this ratification will have a material effect on our financial
statements. |
In December 2010, the FASB issued ASU No. 2010-29 Business Combinations (Topic 805): Disclosure
of Supplementary Pro Forma Information for Business Combinations (ASU 2010-29). ASU 2010-29
specifies that if a public entity presents comparative financial statements, the entity should
disclose revenue and earnings of the combined entity as though the business combination(s) that
occurred during the current year had occurred as of the beginning of the comparable prior annual
reporting period only. The amendments in ASU 2010-29 also expand the supplemental pro forma
disclosures under Topic 805 to include a description of the nature and amount of material,
nonrecurring pro forma adjustments directly attributable to the business combination included in
the reported pro forma revenue and earnings. The amended guidance is effective prospectively for
business combinations for which the acquisition date is on or after the beginning of the first
annual reporting period beginning on or after December 15, 2010. We will account for our
acquisition of SynthRx in April 2011 in accordance with this guidance. |
6
7. | Licensing Revenue |
In June 2010, we announced that we had entered into a license agreement with respect to our
know-how to develop, make, use and sell ANX-510, or CoFactor® (5,10-methylenetetrahydrofolate),
with Theragence, Inc., a California corporation (Theragence). Pursuant to the agreement, we
granted to Theragence an exclusive worldwide license, including the right to grant sublicenses
under certain circumstances, to conduct research on and to develop, make, have made, use, offer
for sale, sell, have sold and import licensed products in any field or use. We are entitled to
receive royalties on net sales of licensed products and commercial milestone payments of up to
approximately $30 million based on aggregate gross sales of licensed products in the United
States, European Union and Japan. Theragence agreed to use commercially reasonable efforts to
research, develop and commercialize at least one licensed product. We discontinued active work
on our CoFactor program in October 2008. |
In March 2009, we announced that we and our wholly-owned subsidiary, SD Pharmaceuticals, Inc.,
had entered into a license agreement with respect to our product candidate ANX-514 (docetaxel
emulsion for injection) with Shin Poong Pharmaceutical Co., Ltd., a company organized under the
laws of the Republic of Korea (Shin Poong), pursuant to which we granted to Shin Poong an
exclusive license, including the right to sublicense, to research, develop, make, have made,
use, offer for sale, sell and import licensed products, in each case solely for the treatment of
cancer by intravenous administration of formulations of docetaxel as emulsified products and
solely in South Korea. Under the terms of the agreement, we received an upfront licensing fee of
$0.3 million in April 2009, and are entitled to receive a regulatory milestone payment of either
$0.2 million or $0.4 million upon receipt of regulatory approval for marketing a licensed
product in South Korea (the amount depends on whether the Korea Food and Drug Administration
requires Shin Poong to conduct a bioequivalence or clinical study in human subjects prior to
receipt of regulatory approval), one-time commercial milestone payments tied to annual net sales
of licensed products in an aggregate amount of up to $1.5 million and royalty payments on net
sales of licensed products. Shin Poong is responsible for all development and commercial
activities related to ANX-514 in South Korea. We agreed to pay Shin Poong $0.1 million if the
Korea Food and Drug Administration required Shin Poong to conduct a bioequivalence or clinical
trial in human subjects prior to receipt of regulatory approval and we elect not to supply
product to conduct such trial. In September 2010, pursuant to the terms of the license
agreement, we elected to make the $0.1 million cash payment to Shin Poong in lieu of supplying
product for the ANX-514 trial in human subjects required by the Korea Food and Drug
Administration. |
8. | Grant Revenue |
In November 2010, the Internal Revenue Service notified us that an aggregate amount of $488,959
in grants had been awarded to us under the qualifying therapeutic discovery project (QTDP)
program established under Section 48D of the Internal Revenue Code as a result of the Patient
Protection and Affordable Care Act of 2010. We submitted applications in July 2010 for
qualified investments we made, or expected to make, in 2009 and 2010 in our ANX-530, or
Exelbine, and ANX-514 programs, and a grant in the amount of $244,479 was approved for each of
those programs. These grants are not taxable for federal income tax purposes. We received full
payment of the grants in November 2010, all of which we recognized as revenue in the three month
period ended December 31, 2010 because the criteria under our revenue recognition policy were
met in that period. |
9. | Supplementary Cash Flow Information |
Noncash investing and financing transactions presented separately from the condensed
consolidated statements of cash flows for the three months ended March 31, 2011 and 2010 and for
the period from inception (June 12, 1996) through March 31, 2011 are as follows: |
Inception | ||||||||||||
(June 12, 1996) | ||||||||||||
Three months ended March 31, | through | |||||||||||
2011 | 2010 | March 31, 2011 | ||||||||||
Supplemental disclosures of cash flow information |
||||||||||||
Interest paid |
$ | | $ | 1,629 | $ | 180,719 | ||||||
Income taxes paid |
| | | |||||||||
Supplemental disclosures of non-cash investing and financing
activities: |
||||||||||||
Issuance of warrants, common stock and preferred stock for: |
||||||||||||
Conversion of notes payable and accrued interest |
| | 1,213,988 | |||||||||
Prepaid services to consultants |
| | 1,482,781 | |||||||||
Conversion of preferred stock |
| 49,849 | 13,674 | |||||||||
Acquisitions |
| | 24,781,555 | |||||||||
Payment of dividends |
| | 213,000 | |||||||||
Financial advisor services in connection with private placements |
1,061,910 | 724,286 | 3,615,464 | |||||||||
Acquisition of treasury stock in settlement of a claim |
| | 34,747 | |||||||||
Cancellation of treasury stock |
| | (34,747 | ) | ||||||||
Assumptions of liabilities in acquisitions |
| | 1,235,907 | |||||||||
Acquisition of license agreement for long-term debt |
| | 161,180 | |||||||||
Cashless exercise of warrants |
| | 4,312 | |||||||||
Dividends accrued |
| | 621,040 | |||||||||
Trade asset converted to available-for-sale asset |
| | 108,000 | |||||||||
Dividends extinguished |
| | 408,240 | |||||||||
Trade payable converted to note payable |
| | 83,948 | |||||||||
Issuance of warrants for return of common stock |
| | 50,852 | |||||||||
Detachable warrants issued with notes payable |
| | 450,000 | |||||||||
Cumulative preferred stock dividends |
| 3,546,774 | 13,502,403 |
7
10. | Stockholders Equity |
|
Reverse Stock Split |
At a special meeting of our stockholders held on August 25, 2009, our stockholders approved a
proposal to authorize our board of directors, in its discretion, to effect a reverse split of
our outstanding common stock without further action by our stockholders. In April 2010, our
board of directors approved a 1-for-25 reverse split of our common stock and on April 23, 2010
at 4:01 p.m. Eastern time, the reverse stock split became effective. As a result of the reverse
stock split, each 25 shares of our issued and outstanding common stock were automatically
reclassified as and changed into one share of our common stock. The reverse stock split reduced
the number of our issued and outstanding shares of common stock as of April 23, 2010 from
approximately 257.3 million shares to approximately 10.3 million shares. No fractional shares
were issued in connection with the reverse stock split. Stockholders who were entitled to
fractional shares instead became entitled to receive a cash payment in lieu of receiving
fractional shares (after taking into account and aggregating all shares of our common stock then
held by such stockholder) equal to the fractional share interest multiplied by $4.6275 (the per
share closing price of our common stock (on a post-split basis) as determined by the NYSE Amex
on April 23, 2010). The reverse stock split affected all of the holders of our common stock
uniformly. Shares of our common stock underlying outstanding options and warrants were
proportionately reduced and the exercise prices of outstanding options and warrants were
proportionately increased in accordance with the terms of the agreements governing such
securities. All common stock share and per share information in the condensed consolidated
financial statements and notes thereto included in this report have been restated to reflect
retrospective application of the reverse stock split for all periods presented ending or as of a
date on or prior to April 23, 2010, except for par value per share and the number of authorized
shares, which were not affected by the reverse stock split. |
||
3.73344597664961% Series E Convertible Preferred Stock |
In January 2010, we completed a registered direct equity financing raising gross proceeds of
$19.0 million involving the issuance of units consisting of 19,000 shares of our
3.73344597664961% Series E Convertible Preferred Stock with a stated value of $1,000 per share
(Series E Stock) and 30-month warrants to purchase up to an aggregate of 498,488 shares of our
common stock. In the aggregate, the shares of Series E Stock we issued were convertible into
1,993,965 shares of our common stock. All of the shares of our Series E Stock have been
converted into common stock and are no longer outstanding. Our Series E Stock would have
accrued a cumulative annual dividend of 3.73344597664961% per share until January 7, 2015, and
no dividend thereafter. In accordance with the terms of the Series E Stock, because the Series
E Stock was converted prior to January 7, 2015, we paid the holders an amount equal to the total
dividend that would have accrued in respect of the shares converted from the issuance date
through January 7, 2015, or $186.67 per $1,000 of stated value of the shares converted. We
received approximately $14.0 million in net proceeds from the financing after deducting the
approximately $3.5 million we placed into escrow accounts to pay the aggregate dividend payment
in respect of our Series E Stock, placement agents fees and expenses and other offering
expenses. We may receive up to approximately $4.4 million of additional proceeds from the
exercise of the warrants issued in the January 2010 financing. Those warrants, which have an
exercise price of $8.75 per share, are exercisable any time on or before July 6, 2012, subject
to certain beneficial ownership limitations. |
The convertible feature of our Series E Stock and the terms of the warrants issued in connection
with our Series E Stock provide for a rate of conversion or exercise that was below the market
value of our common stock at issuance. The convertible feature of our Series E Stock is
characterized as BCF. The estimated relative fair values of the shares of our Series E Stock
and the warrants
issued in connection with such stock were calculated as approximately $12.4 million and $3.0
million, respectively. The value of the BCF was determined using the intrinsic value method and
calculated as approximately $2.5 million. Because our Series E Stock did not have a stated
redemption date, the value of the BCF was fully realized at the time our Series E Stock was
issued. The fair value of the warrants was determined using the Black-Scholes option-pricing
model as of the date of issuance assuming a 30-month term, stock volatility of 275.79%, and a
risk-free interest rate of 1.325%. The value of the BCF was treated as a deemed dividend to the
holders of our Series E Stock and, due to the potential immediate convertibility of our Series E
Stock at issuance, was recorded as an increase to additional paid-in capital and accumulated
deficit at the time of issuance. |
8
We also issued warrants to purchase up to 99,696 shares of our common stock at an exercise price
of $11.91 per share to the placement agent in the January 2010 financing as additional
consideration for its services in connection with the financing. These warrants had a fair
value of approximately $724,000 using the Black-Scholes option-pricing model as of the date of
issuance assuming a 4.5-year term, stock volatility of 209.46%, and a risk-free interest rate of
2.37%. The warrants became exercisable on July 7, 2010 and are exercisable at any time on or
before June 3, 2014. |
||
2.19446320054018% Series F Convertible Preferred Stock |
In May 2010, we completed a registered direct equity financing raising gross proceeds of $19.2
million involving the issuance of units consisting of 19,217.13 shares of our 2.19446320054018%
Series F Convertible Preferred Stock with a stated value of $1,000 per share (Series F Stock),
5-year warrants to purchase up to an aggregate of 1,816,608 shares of our common stock and
1-year warrants to purchase up to an aggregate of 778,548 shares of our common stock. In the
aggregate, the shares of Series F Stock we issued were convertible into 5,190,312 shares of our
common stock. All of the shares of our Series F Stock have been converted into common stock and
are no longer outstanding. Our Series F Stock would have accrued a cumulative annual dividend
of 2.19446320054018% per share until May 6, 2020, and no dividend thereafter. In accordance
with the terms of the Series F Stock, because the Series F Stock was converted prior to May 6,
2020, upon conversion of the shares, we paid the holders an amount equal to the total dividend
that would have accrued in respect of the shares converted from the issuance date through May 6,
2020, or $219.45 per $1,000 of stated value of the shares converted, less the amount of any
dividend paid on such shares before their conversion. Dividend payments were due on January 1,
April 1, July 1 and October 1. Because 2,884.57 shares of our Series F Stock were outstanding
at the time of the July 1, 2010 and October 1, 2010 dividend payment dates, we paid aggregate
dividends of approximately $25,300 to the holders of those outstanding shares and such
previously paid amounts were subtracted from the payments due in respect of those shares at the
time of their conversion. We received approximately $13.3 million in net proceeds from the
financing after deducting the approximately $4.2 million we placed into escrow accounts to pay
the aggregate dividend payment in respect of our Series F Stock, placement agent and financial
advisor fees and other offering expenses. We may receive up to approximately $9.5 million of
additional proceeds from the exercise of the warrants issued in the May 2010 financing. The
exercise price of the warrants is $3.65 per share. Subject to certain beneficial ownership
limitations, the 5-year warrants are exercisable any time on or before May 6, 2015 and the
1-year warrants are exercisable any time on or before May 20, 2011. |
The convertible feature of our Series F Stock and the terms of the warrants issued in connection
with our Series F Stock provide for a rate of conversion or exercise that was below the market
value of our common stock at issuance. The convertible feature of our Series F Stock is
characterized as BCF. The estimated relative fair values of the shares of our Series F Stock
and the warrants issued in connection with such stock were calculated as approximately $10.1
million and $4.9 million, respectively. The value of the BCF was determined using the intrinsic
value method and calculated as approximately $3.1 million. Because our Series F Stock did not
have a stated redemption date, the value of the BCF was fully realized at the time our Series F
Stock was issued. The fair value of the 5-year warrants was determined using the Black-Scholes
option-pricing model as of the date of issuance assuming a 5-year term, stock volatility of
202%, and a risk-free interest rate of 2%. The fair value of the 1-year warrants was determined
using the Black-Scholes option-pricing model as of the date of issuance assuming a 1-year term,
stock volatility of 361%, and a risk-free interest rate of 0.4%. The value of the BCF was
treated as a deemed dividend to the holders of our Series F Stock and, due to the potential
immediate convertibility of our Series F Stock at issuance, was recorded as an increase to
additional paid-in capital and accumulated deficit at the time of issuance. |
||
Common Stock Financing |
In January 2011, we completed a registered direct equity financing involving the issuance of
units consisting of 8,184,556 shares of our common stock, 5-year warrants to purchase up to an
aggregate of 2,046,139 shares of our common stock and 1-year warrants to purchase up to an
aggregate of 2,046,139 shares of our common stock. The gross proceeds of this financing were
$22.5 million, and we received $21.0 million in net proceeds after deducting the fees and
expenses of our placement agent and our other offering expenses. We may receive up to $11.3
million of additional proceeds from the exercise of the warrants issued in this financing.
Those warrants have an exercise price of $2.75 per share. The 5-year warrants are exercisable
any time on or
before January 11, 2016 and the 1-year warrants are exercisable any time on or before January
19, 2012, subject to certain beneficial ownership limitations. |
9
Common Stock Issued for Warrants Exercised |
In January 2010, we issued 84,651 shares of our common stock and received net proceeds of $0.3
million in connection with the exercise, at an exercise price of $3.75 per share, of the
remaining warrants issued in our June 2009 financing. |
||
Warrants |
During January 2011, we issued warrants to the investors in our registered direct equity
financing and to the placement agent for that financing. See details of the equity financings
above. |
During 2010, we issued warrants to the investors in our January 2010 and May 2010 registered
direct equity financings. We also issued warrants to the placement agent for the January 2010
registered direct equity financing. See details of the equity financings above. |
Warrants | Exercise Price | Expiration Date | ||||||
432,429 |
$ | 56.5000 | July 2012 | |||||
36,071 |
$ | 3.7500 | June 2014 | |||||
19,007 |
$ | 4.4750 | July 2014 | |||||
14,183 |
$ | 4.0625 | August 2014 | |||||
216,000 |
$ | 3.6700 | October 2014 | |||||
144,000 |
$ | 5.8750 | October 2014 | |||||
498,488 |
$ | 8.7475 | July 2012 | |||||
99,696 |
$ | 11.9125 | June 2014 | |||||
1,816,608 |
$ | 3.6500 | May 2015 | |||||
778,548 |
$ | 3.6500 | May 2011 | |||||
2,046,139 |
$ | 2.7500 | January 2012 | |||||
2,046,139 |
$ | 2.7500 | January 2016 | |||||
409,228 |
$ | 3.4400 | April 2015 | |||||
8,556,536 |
11. | Subsequent Events |
|
SynthRx |
In February 2011, we entered into an agreement and plan of merger to acquire SynthRx in exchange
for shares of our common stock. The transaction was completed on April 8, 2011. We initially
intend to develop ANX-188 for the treatment of pediatric patients with sickle cell disease in
acute crisis and, if we are able to reach agreement with the FDA on a study protocol on a timely
basis, we may initiate a phase 3 clinical trial of ANX-188 for that indication in 2012. In
connection with the consummation of this acquisition, we issued 2,800,851 shares of our common
stock to SynthRxs stockholders, 1,938,773 of which are subject to repurchase by us in the event
development of ANX-188 does not achieve the first milestone described below. We could issue up
to an aggregate of 13,478,050 additional shares of our common stock to SynthRxs stockholders if
the development of ANX-188 achieves certain milestones, as described below, and our stockholders
approve the issuance of such milestone-related shares, as required by NYSE Amex rules. If our
stockholders do not approve the issuance of the milestone-related shares, under the terms of the
merger agreement, we would be required to pay SynthRxs stockholders in cash the value of the
milestone-related shares we would have otherwise issued, with all such cash payments made in
quarterly installments and, with respect to the cash value associated with 12,478,050 of the
milestone-related shares, payable at a rate of 35% of net sales of ANX-188 for the applicable
calendar quarter. Of the shares issuable in connection with achievement of milestones, up to
1,000,000 shares would be issuable upon the dosing of the first patient in a phase 3 clinical
study that the FDA has indicated may be sufficient to support approval of a new drug application
covering the use of ANX-188 for the treatment of sickle cell crisis in children (the ANX-188
NDA), which we refer to as the First Milestone; 3,839,400 shares would be issuable upon
acceptance for review of the ANX-188 NDA by the FDA, which we refer to as the Second Milestone;
and 8,638,650 shares would be issuable upon approval by the FDA of the ANX-188 NDA, which we
refer to as the Third Milestone. |
Due to the timing of the SynthRx acquisition, the preliminary accounting for the business
combination is not yet complete. Financial results of the acquired business and preliminary
accounting for the business combination in accordance with ASC 805 -Business Combinations will
be included in our condensed consolidated financial statements starting with the quarterly
period ending June 30, 2011. |
10
Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations |
11
12
13
14
| the number of trials necessary to demonstrate the safety and efficacy of a product
candidate; |
| the number of patients who participate in the trials; |
| the number and location of sites included in trials and the rate of site approval for
the trial; |
| the rates of patient recruitment and enrollment; |
| the ratio of randomized to evaluable patients; |
| the time and cost of process development activities related to our product
candidates; |
| the costs of manufacturing our product candidates; |
| with respect to bioequivalence or comparative trials, the availability and cost of
reference or control product in the jurisdiction of each site; |
| the duration of patient treatment and follow-up; |
| the time and cost of stability studies, including the need to identify critical
parameters, methods to evaluate and test these parameters and validation of such methods
and tests; and |
| the costs, requirements, timing of and the ability to secure regulatory approvals. |
15
January 1, 2005 | ||||||||||||
through | ||||||||||||
Three months ended March 31, | March 31, | |||||||||||
2011 | 2010 | 2011 | ||||||||||
External bioequivalence and clinical trial fees and expenses |
$ | 90,233 | $ | 27,773 | $ | 24,108,295 | ||||||
External nonclinical study fees and expenses (1) |
453,609 | 1,182,085 | 27,708,280 | |||||||||
Personnel costs |
69,309 | 32,518 | 10,613,305 | |||||||||
Share-based compensation expense |
(1,858 | ) | (3,047 | ) | 2,918,127 | |||||||
Total |
$ | 611,293 | $ | 1,239,329 | $ | 65,348,007 | ||||||
(1) | External nonclinical study fees and expenses include preclinical, research-related
manufacturing, quality assurance and regulatory expenses. |
16
17
18
| the extent to which we acquire new technologies, product candidates, products or
businesses and our ability to integrate them, including the assets we recently acquired
from SynthRx, Inc., successfully into our operations; |
| our ability, or that of a future partner, to successfully develop and obtain
regulatory approval for our product candidates and, if approved, to successfully
commercialize them in the U.S. and/or elsewhere; |
| our ability to obtain stockholder approval of the issuance of the up to 13,478,050
milestone-related shares in connection with our acquisition of SynthRx, Inc. on a timely
basis, or at all, and our ability to pay cash in lieu of those milestone-related shares
if our stockholders do not approve the issuance of those shares; |
| our ability to obtain stockholder approval to complete other product pipeline
expansion transactions, if necessary, on a timely basis, or at all; |
| the potential that we may enter into a merger or other business combination whereby
the stockholders who own the majority of our voting securities prior to the transaction
own less than a majority after the transaction; |
| the potential that we may enter into one or more commercial partnerships or other
strategic transactions relating to our product candidates, and the terms of any such
transactions; |
| our ability to obtain additional funding to develop and commercialize our current
product candidates and any product candidates or products we may acquire in the future,
on a timely basis or on acceptable terms, or at all; |
||
| the extent to which we rebuild our workforce and our ability to attract and retain
qualified personnel and manage growth; |
| delays in the commencement or completion of nonclinical testing, bioequivalence or
clinical trials of or manufacturing, regulatory or launch activities related to our
product candidates; |
| the success of future clinical or bioequivalence trials; |
| our ability to develop or acquire sales, marketing and distribution capabilities to
commercialize any of our product candidates for which we obtain regulatory approval; |
19
| whether any of our product candidates for which we receive regulatory approval, if
any, achieve broad market acceptance; |
| our ability to maintain our relationships with the single source manufacturers and
suppliers for certain of our product candidates and their component materials and the
ability of such manufacturers and suppliers to successfully and consistently manufacture
and supply, as applicable, our products and their component materials on a commercial
scale, if we receive regulatory approval to commercialize our product candidates; |
| the satisfactory performance of third parties on whom we rely significantly to
conduct our nonclinical testing and bioequivalence and clinical studies and other
aspects of our development programs; |
| undesirable side effects that our product candidates may cause; |
| our ability to protect our intellectual rights with respect to our product candidates
and proprietary technology; |
| claims against us for infringing the proprietary rights of third parties; |
| competition in the marketplace for our products, if any are approved; |
| healthcare reform measures and reimbursement policies that, if not favorable to our
products, could hinder or prevent our products commercial success; |
| potential product liability exposure and, if successful claims are brought against
us, liability for a product or product candidate; |
| our ability to maintain compliance with NYSE Amex continued listing standards and
maintain the listing of our common stock on the NYSE Amex or another national securities
exchange; and |
| the other factors that are described in the section entitled Risk Factors, in Item
1A of Part I of our annual report on Form 10-K for the year ended December 31, 2010. |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Item 4. | Controls and Procedures |
20
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Item 3. | Defaults Upon Senior Securities |
Item 4. | (Removed and Reserved) |
Item 5. | Other Information |
Item 6. | Exhibits |
21
ADVENTRX Pharmaceuticals, Inc. | ||||||
Date: May 9, 2011
|
By: | /s/ Brian M. Culley
|
||||
Chief Executive Officer | ||||||
(Principal Executive Officer) | ||||||
By: | /s/ Patrick L. Keran
|
|||||
President and Chief Operating Officer | ||||||
(Principal Financial Officer) |
22
Exhibit | Description | |||
2.1 | (1) | Agreement and Plan of Merger, dated February 12, 2011, by and among the
registrant, SRX Acquisition Corporation, SynthRx, Inc. and, solely with respect
to Sections 2 and 8, the Stockholders Agent. |
||
10.1 | (2) | Engagement Letter Agreement, dated January 5, 2011, by and between the registrant
and Rodman & Renshaw, LLC |
||
10.2 | (2) | Form of Securities Purchase Agreement, dated January 6, 2011, governing the
issuance and sale of the registrants common stock and 5-year and 1-year common
stock purchase warrants |
||
10.3 | (2) | Form of [Series A/B] Common Stock Purchase Warrant issued on January 11, 2011 by
the registrant to the purchasers of the registrants common stock and to Rodman &
Renshaw, LLC |
||
10.4 | (1) | Stockholders Voting and Transfer Restriction Agreement, dated February 12, 2011,
by and among the registrant, each of the principal stockholders of SynthRx, Inc.
and, solely with respect to Section 3(c), the Stockholders Agent. |
||
10.5 | (1) | License Agreement, dated June 8, 2004, between SynthRx, Inc. and CytRx
Corporation, as amended by that certain Letter Agreement Re: Amendment to License
Agreement, dated August 3, 2006, and that certain Agreement and Amendment No. 2
to License Agreement, dated December 1, 2010. |
||
10.6 | # | Incentive Stock Option Grant Agreement under the 2008 Omnibus Incentive Plan,
effective as of February 1, 2011, by and between the registrant and Brian M.
Culley |
||
10.7 | # | Incentive Stock Option Grant Agreement under the 2008 Omnibus Incentive
Plan, effective as of February 1, 2011, by and between the registrant and Patrick
L. Keran |
||
10.8 | # (3) | Offer letter, dated February 11, 2011, to Brandi L. Roberts |
||
10.9 | # | Offer letter, dated March 28, 2011, to R. Martin Emanuele |
||
10.10 | # | Director Compensation Policy, adopted March 16, 2011 |
||
31.1 | Certification of principal executive officer pursuant to Rules 13a-14(a)/15d-14(a) |
|||
31.2 | Certification of principal financial officer pursuant to Rules 13a-14(a)/15d-14(a) |
|||
32.1 | * | Certification of principal executive officer and principal financial officer
pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 |
| Indicates that confidential treatment has been requested or granted to certain
portions, which portions have been omitted and filed separately with the SEC |
|
# | Indicates management contract or compensatory plan |
|
* | This certification is being furnished solely to accompany this report pursuant to
18 U.S.C. 1350, and is not being filed for purposes of Section 18 of the
Securities Exchange Act of 1934 and is not to be incorporated by reference into
any filing of the registrant, whether made before or after the date hereof,
regardless of any general incorporation language in such filing. |
|
(1) | Filed with the registrants Current Report on Form 8-K on April 11, 2011 (SEC
file number 001-32157-11752769) |
|
(2) | Filed with the registrants Current Report on Form 8-K on January 7, 2011 (SEC
file number 001-32157-11515655) |
|
(3) | Filed with the registrants Current Report on Form 8-K on March 22, 2011 (SEC
file number 001-32157-11704394) |
23
- 2 -
- 3 -
- 4 -
ADVENTRX PHARMACEUTICALS, INC. | ||||
By: | /s/ Patrick L. Keran | |||
/s/ Brian M. Culley | ||||
Grantee |
- 5 -
- 2 -
- 3 -
- 4 -
ADVENTRX PHARMACEUTICALS, INC. | ||||||
By: | /s/ Brian M. Culley
|
|||||
/s/ Patrick L. Keran | ||||||
Grantee |
- 5 -
ADVENTRX Pharmaceuticals, Inc.
|
ACCEPTED AND AGREED: | |||
/s/ Brian M. Culley
|
/s/ R. Martin Emanuele
|
|||
Chief Executive Officer |
||||
Date: April 5, 2011 |
-1-
-2-
(A) | = | the quotient of (I) the Current Allocation, divided by (II) 12; subject to adjustment as provided in the 2008 Plan; and |
(B) | = | The number of full 30-day periods between such New Non-Employee Directors Appointment Date and the date of the next annual meeting of stockholders (or, if, on the Appointment Date, the date of the next annual meeting of stockholders has not been set by the Board, the one-year anniversary of the prior years annual meeting of stockholders) (such number of 30-day periods, the Number of Months Until Meeting). |
-3-
-4-
1. | I have reviewed this Quarterly Report on Form 10-Q of ADVENTRX Pharmaceuticals, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period
covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in
this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this
report; |
4. | The registrants other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls
and procedures to be designed under our supervision, to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being
prepared; |
b. | Designed such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally accepted
accounting principles; |
c. | Evaluated the effectiveness of the registrants disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this report based on such
evaluation; and |
d. | Disclosed in this report any change in the registrants internal control over financial
reporting that occurred during the registrants most recent fiscal quarter (the
registrants fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrants internal control
over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrants auditors and the
audit committee of the registrants board of directors (or persons performing the equivalent
functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to adversely affect
the registrants ability to record, process, summarize and report financial information;
and |
b. | Any fraud, whether or not material, that involves management or other employees who
have a significant role in the registrants internal control over financial reporting. |
/s/ Brian M. Culley | ||||
Brian M. Culley | ||||
Chief Executive Officer (Principal Executive Officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q of ADVENTRX Pharmaceuticals, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period
covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in
this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this
report; |
4. | The registrants other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls
and procedures to be designed under our supervision, to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being
prepared; |
b. | Designed such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally accepted
accounting principles; |
c. | Evaluated the effectiveness of the registrants disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this report based on such
evaluation; and |
d. | Disclosed in this report any change in the registrants internal control over financial
reporting that occurred during the registrants most recent fiscal quarter (the
registrants fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrants internal control
over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrants auditors and the
audit committee of the registrants board of directors (or persons performing the equivalent
functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to adversely affect
the registrants ability to record, process, summarize and report financial information;
and |
b. | Any fraud, whether or not material, that involves management or other employees who
have a significant role in the registrants internal control over financial reporting. |
/s/ Patrick L. Keran | ||||
Patrick L. Keran | ||||
President and Chief Operating Officer (Principal Financial Officer) |
(i) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, and |
(ii) | the information contained in the Report fairly presents, in all material respects, the
financial condition and results of operations of the Company. |
/s/ Brian M. Culley | ||||
Brian M. Culley | ||||
Chief Executive Officer (Principal Executive Officer) |
||||
(i) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, and |
(ii) | the information contained in the Report fairly presents, in all material respects, the
financial condition and results of operations of the Company. |
/s/ Patrick L. Keran | ||||
Patrick L. Keran | ||||
President and Chief Operating Officer (Principal Financial Officer) |
||||