Delaware | 001-32157 | 84-1318182 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
12390 El Camino Real, Suite 150, San Diego, CA | 92130 | |
(Address of principal executive offices) | (Zip Code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 9.01 | Financial Statements and Exhibits. |
| Balance sheet (unaudited) of SynthRx, Inc. (a development stage enterprise) as of March
31, 2011 and the related statements of operations and
cash flows (unaudited) for the three months ended
March 31, 2011 and 2010, and the period from inception (January 12, 2004) through March 31, 2011, and the notes related thereto |
| Unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2011, and the notes related thereto |
ADVENTRX Pharmaceuticals, Inc. |
||||
Dated: October 25, 2011 | By: | /s/ Patrick L. Keran | ||
Name: | Patrick L. Keran | |||
Title: | President and Chief Operating Officer | |||
Exhibit | |||||
No. | 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*(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 |
||||
10.2*(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 |
||||
23.1 (2) | Consent of J.H. Cohn LLP |
||||
99.1 (1) | Press Release issued by ADVENTRX Pharmaceuticals, Inc. on April 11, 2011 |
||||
99.2 (2) | Audited balance sheets of SynthRx, Inc. (a development stage
enterprise) as of December 31, 2010 and 2009 and the related audited
statements of operations, stockholders deficit and cash flows for the
years then ended and for the period from inception (January 12, 2004)
through December 31, 2010, and the notes related thereto |
||||
99.3 (2) | Unaudited pro forma condensed combined balance sheet as of December 31,
2010 and the related unaudited pro forma condensed combined statement
of operations for the year then ended, and the notes related thereto |
||||
99.4 | Balance sheet (unaudited) of SynthRx, Inc. (a development stage
enterprise) as of March 31, 2011 and the related statements of
operations and cash flows (unaudited) for the three months ended March 31, 2011 and 2010, and the period from inception (January 12, 2004) through March 31, 2011, and
the notes related thereto |
||||
99.5 | Unaudited
pro forma condensed combined statement of operations for the six months ended June 30, 2011, and the notes related thereto |
* | Certain confidential portions of this exhibit were omitted by means of redacting a
portion of the text. Confidential treatment of such confidential portions was requested by the
registrant under Rule 24b-2 under the Securities Exchange Act of 1934, as amended, and has
been granted by order of the U.S. Securities and Exchange Commission dated June 6, 2011. |
|
(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 Amendment No. 1 to Current Report on Form 8-K on June 3, 2011
(SEC file number 001-32157-1189227) |
March 31, | ||||||||
2011 | December 31, | |||||||
(Unaudited) | 2010 | |||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash |
$ | 1,011 | $ | 54,533 | ||||
Certificates of deposit |
| 12,270 | ||||||
Total current assets |
1,011 | 66,803 | ||||||
Equipment, net |
18,513 | 19,257 | ||||||
Total assets |
$ | 19,524 | $ | 86,060 | ||||
LIABILITIES AND STOCKHOLDERS DEFICIT |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 302,566 | $ | 24,587 | ||||
Accrued expenses |
4,116 | 7,050 | ||||||
Total current liabilities |
306,682 | 31,637 | ||||||
Notes payable stockholder |
275,000 | 275,000 | ||||||
Total liabilities |
581,682 | 306,637 | ||||||
Stockholders deficit: |
||||||||
Common stock, $0.01 par value; 100,000 shares authorized; 1,000
shares issued and outstanding |
1 | 1 | ||||||
Additional paid-in capital |
1,045,268 | 1,045,268 | ||||||
Deficit accumulated during the development stage |
(1,607,427 | ) | (1,265,846 | ) | ||||
Total stockholders deficit |
(562,158 | ) | (220,577 | ) | ||||
Total liabilities and stockholders deficit |
$ | 19,524 | $ | 86,060 | ||||
Period from Inception | ||||||||||||
(January 12, 2004) | ||||||||||||
Three months ended March 31, | through | |||||||||||
2011 | 2010 | March 31, 2011 | ||||||||||
Net sales |
$ | | $ | | $ | | ||||||
Cost of goods sold |
| | | |||||||||
Gross margin |
| | | |||||||||
Operating expenses: |
||||||||||||
Research and development |
3,000 | 9,000 | 292,655 | |||||||||
General and administrative |
336,843 | 16,804 | 898,770 | |||||||||
In-process research and development |
| | 409,068 | |||||||||
Total operating expenses |
339,843 | 25,804 | 1,600,493 | |||||||||
Loss from operations |
(339,843 | ) | (25,804 | ) | (1,600,493 | ) | ||||||
Interest income |
26 | 45 | 1,880 | |||||||||
Interest expense |
(1,746 | ) | (555 | ) | (8,796 | ) | ||||||
Loss before income taxes |
(341,563 | ) | (26,314 | ) | (1,607,409 | ) | ||||||
Provision for income taxes |
| | | |||||||||
Net loss |
$ | (341,563 | ) | $ | (26,314 | ) | $ | (1,607,409 | ) | |||
Period from Inception | ||||||||||||
(January 12, 2004) | ||||||||||||
Three months ended March 31, | through | |||||||||||
2011 | 2010 | March 31, 2011 | ||||||||||
Cash flows from operating activities: |
||||||||||||
Net loss |
$ | (341,563 | ) | $ | (26,314 | ) | $ | (1,607,409 | ) | |||
Write off of in-process research and development |
| | 409,068 | |||||||||
Stock based compensation |
| | 136,200 | |||||||||
Adjustments to reconcile net loss to net cash used in
operating activities: |
||||||||||||
Depreciation and amortization |
744 | | 2,622 | |||||||||
Increase/(decrease) in: |
||||||||||||
Accounts payable |
277,979 | (1,592 | ) | 302,567 | ||||||||
Accrued expenses |
(2,934 | ) | 555 | 4,116 | ||||||||
Net cash used in operating activities |
(65,774 | ) | (27,351 | ) | (752,836 | ) | ||||||
Cash flows from investing activities: |
||||||||||||
Investments in certificate of deposits |
| (45 | ) | (12,270 | ) | |||||||
Proceeds from sales and maturities of certificate of deposits |
12,252 | | 12,252 | |||||||||
Purchase of equipment |
| | (21,135 | ) | ||||||||
Net cash provided by investing activities |
12,252 | (45 | ) | (21,153 | ) | |||||||
Cash flows from financing activities: |
||||||||||||
Capital contribution |
| | 500,000 | |||||||||
Stockholder loans |
| 100,000 | 275,000 | |||||||||
Net cash provided by financing activities |
| 100,000 | 775,000 | |||||||||
Net
increase/(decrease) in cash |
(53,522 | ) | 72,604 | 1,011 | ||||||||
Cash at beginning of period |
54,533 | 31,663 | | |||||||||
Cash at end of period |
$ | 1,011 | $ | 104,267 | $ | 1,011 | ||||||
Nature of operations: The corporation is a development-stage enterprise developing a
purified form of a rheologic and antithrombotic agent, Poloxamer 188, or P188. During the
period from January 12, 2004 (date of inception) through March 31, 2011, the Company has
devoted substantially all of its efforts to business planning and research and development.
Accordingly, the Company is considered to be in the development stage. The Company is an
early stage enterprise and is subject to all of the risks associated with development stage
companies. |
Management is evaluating various strategic options, including the sale or exclusive license
of the Companys product candidate program, a strategic business merger and other similar
transactions, certain of which may result in a change of control of the Company. There can
be no assurances that the Company will be successful in consummating a strategic transaction
on a timely basis or at all. |
Use of estimates: The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts and disclosures. Accordingly,
actual results may differ from those estimates. |
Cash equivalents: Cash equivalents include all cash balances and highly-liquid investments
with a maturity of three months or less when acquired. At March 31, 2011, the Company did
not have any cash equivalents. |
Equipment: Equipment is stated at cost. Depreciation is calculated using the straight-line
method over estimated useful lives of the assets. Repairs and maintenance are expensed as
incurred. |
Research and development expenses: Research and development expenses (R&D) are comprised
of costs incurred in performing R&D activities including consulting and development costs.
Research and development costs are expensed as incurred. |
General and administrative expenses: General and administrative expenses include legal,
finance and facilities. In addition, general and administrative expenses include fees for
professional services, intellectual property protection and occupancy costs. These costs are
expensed as incurred. |
Purchased in-process research and development: The Company entered into a license agreement
with CytRx Corporation (CytRx) in June 2004 in exchange for 199 shares of the Companys
common stock and a cash payment of $228,164. CytRx granted SynthRx an exclusive license to
certain identified CytRx patent rights. The estimated fair value of the license agreement,
which had not reached technological feasibility, had no alternative future use, and had
uncertainty in generating future economic benefits, was expensed. Accordingly, in 2004, the
Company wrote off $409,068 of acquired R&D. |
Patent costs: Legal costs in connection with patent applications are expensed as incurred
and classified as general and administrative expenses. |
Income taxes: The Company accounts for income taxes pursuant to the asset and liability
method which requires deferred income tax assets and liabilities to be computed for
temporary differences between the financial statement and tax bases of assets and
liabilities that will result in taxable or deductible amounts in future periods based on
enacted laws and rates applicable to the periods in which the temporary differences are
expected to affect taxable income. Valuation allowances are established when necessary to
reduce deferred tax assets to the amount expected to be realized. The income tax provision
is the tax payable or refundable for the period plus or minus the change during the year in
deferred tax assets and liabilities. |
The Company adopted the new accounting for uncertainty in income taxes guidance on January
1, 2009. The adoption of that guidance did not result on the recognition of any unrecognized
tax benefits and the Company has no unrecognized tax benefits at March 31, 2011. The
Companys U.S. Federal and state income tax returns prior to fiscal year 2008 are closed.
Management continually evaluates expiring statutes of limitations, audit, proposed
settlements, changes in tax law and new authoritative rulings. |
At March 31, 2011, total Federally insured certificates of deposits had been cashed in.
Income from certificates of deposit held during the years ended December 31, 2010 and 2009
were $182 and $324, respectively. |
Equipment consists of the following at March 31, 2011: |
Microscope |
$ | 21,135 | ||
Less accumulated depreciation |
(2,622 | ) | ||
Total |
$ | 18,513 | ||
Notes payable stockholder consists of the following: |
Loan (A) |
$ | 25,000 | ||
Loan (B) |
50,000 | |||
Loan (C) |
100,000 | |||
Loan (D) |
100,000 | |||
Total |
275,000 | |||
Less current portion |
| |||
Long-term portion |
$ | 275,000 | ||
(A) | On June 30, 2008, the Company borrowed $25,000 from Dr. Robert Hunter.
The note payable is due in full on or before June 30, 2013. Interest at 3.84% is due
annually beginning July 1, 2010. |
|
(B) | On January 31, 2009, the Company borrowed $50,000 from Dr. Robert Hunter.
The note payable is due in full on or before December 2013. Interest at 2.48% is due
annually beginning January 1, 2011. |
|
(C) | On March 29, 2010, the Company borrowed $100,000 from Dr. Robert Hunter.
The note payable is due in full on or before December 31, 2014. Interest at 2.48% is
due annually beginning April 1, 2011. |
|
(D) | On October 29, 2010, the Company borrowed $100,000 from Dr. Robert
Hunter. The note payable is due in full on or before December 31, 2014. Interest at
2.48% is due annually beginning November 1, 2011. |
The Company is authorized to issue 200,000 shares of stock consisting of 100,000 shares of
common stock, par value $0.001 per share and 100,000 shares of preferred stock. |
On October 20, 2003, Dr. Robert L. Hunter and CytRx entered into an agreement to provide for
the formation and operation of SynthRx. In consideration with the agreement, SynthRx issued
Dr. Robert Hunter 801 shares of its common stock equal to 80.1% of the total outstanding
capital stock of SynthRx and issued CytRx 199 shares of its common stock equal to 19.9% of
the total outstanding capital stock of SynthRx. |
On October 28, 2004, Dr. Robert L. Hunter issued 150 shares of common stock to two
individuals for services they had performed for the Company. The fair value of these
shares at the time they were issued was $136,200 which was recorded as additional
paid-in capital and general and administrative expenses. |
Due to the Companys historical net loss position, and as a full valuation allowance
against deferred tax assets has been recorded, there is no provision or benefit for
income taxes recorded for the three months ended March 31, 2011 and 2010. |
The Company has established a full valuation allowance against the deferred tax assets
due to the uncertainty surrounding the realization of such assets. The Company has
determined it is more likely than not that the deferred tax assets are not realizable
due to its historical loss position. |
At December 31, 2010, the Company had Federal income tax net operating loss
carryforwards of approximately $723,000. The Federal tax carryforwards will begin
expiring in 2024. Under Section 382 of the Internal Revenue Code of 1986, as amended,
substantial changes in the Companys ownership may limit the amount of net operating
loss carryforwards that could be utilized annually in the future to offset taxable
income. Any such annual limitation may significantly reduce the utilization of the net
operating losses before they expire. |
On June 8, 2004, the Company entered into a license agreement with CytRx in exchange
for 199 shares of the Companys common stock and a non-refundable cash payment of
$228,164. The fair value of common stock issued in exchange for these rights and the
cash payment, in the amount of $409,068, were charged to research and development
expense in the year ended December 31, 2004 (see Note 1). |
Upon attainment of certain milestones, which include regulatory approvals and first
commercial sales, the Company may be obligated to pay fees of up to $8,000,000. |
The Company is obligated to pay a royalty of 5% of sales under the license to FlOCOR
Intellectual Property, 5% of sales under the license for Anti-Infectives Intellectual
Property and 4% of sales under the license for OptiVax Intellectual Property. |
| the accompanying notes to the unaudited pro forma condensed combined financial statements included in this Exhibit 99.5 to this Current Report on Form 8-K/A (Amendment No. 2); | ||
| the separate historical financial statements of SynthRx as of March 31, 2011 and for the three months ended March 31, 2011 included as Exhibit 99.4 to this Current Report on Form 8-K/A (Amendment No. 2); | ||
| the separate historical consolidated financial statements of ADVENTRX as of June 30, 2011 and for the six months ended June 30, 2011 included in ADVENTRXs Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 8, 2011; and | ||
| ADVENTRXs Current Report on Form 8-K related to its acquisition of SynthRx filed with the Securities and Exchange Commission on April 11, 2011. | ||
| ADVENTRXs Amendment No. 1 to the Current Report on Form 8-K related to its acquisition of SynthRx filed with the Securities and Exchange Commission on June 3, 2011. |
Pro Forma | Pro Forma | |||||||||||||||
ADVENTRX | SynthRx | Adjustments | Combined | |||||||||||||
Grant revenue |
$ | | $ | | $ | | $ | | ||||||||
Cost of goods sold |
| | | | ||||||||||||
Gross margin |
| | | | ||||||||||||
Operating expenses: |
||||||||||||||||
Research and development |
1,953,866 | 3,000 | | 1,956,866 | ||||||||||||
Selling, general and administrative |
3,397,854 | 35,277 | | 3,433,131 | ||||||||||||
Transaction-related expenses |
2,028,923 | 301,566 | (1,617,453 | )(a) | 713,036 | |||||||||||
Depreciation and amortization |
20,237 | | | 20,237 | ||||||||||||
Total operating expenses |
7,400,880 | 339,843 | (1,617,453 | ) | 6,123,270 | |||||||||||
Loss from operations |
(7,400,880 | ) | (339,843 | ) | 1,617,453 | (6,123,270 | ) | |||||||||
Interest income |
43,869 | 26 | | 43,895 | ||||||||||||
Interest expense |
| (1,746 | ) | 1,746 | (b) | | ||||||||||
Other expense |
8,382 | | | 8,382 | ||||||||||||
Loss before income taxes |
(7,348,629 | ) | (341,563 | ) | 1,619,199 | (6,070,993 | ) | |||||||||
Provision for income taxes |
| | | | ||||||||||||
Net loss |
(7,348,629 | ) | (341,563 | ) | 1,619,199 | (6,070,993 | ) | |||||||||
Deemed dividends on preferred stock |
| | | | ||||||||||||
Net loss applicable to common stock |
$ | (7,348,629 | ) | $ | (341,563 | ) | $ | 1,619,199 | $ | (6,070,993 | ) | |||||
Loss per common share basic and diluted |
$ | (0.30 | ) | $ | (0.23 | ) | ||||||||||
Weighted average shares outstanding basic and diluted |
24,512,515 | 26,021,862 | ||||||||||||||
a. | To reduce transaction-related expenses for costs incurred in connection with the SynthRx acquisition. | ||
b. | To eliminate interest expense related to SynthRxs recorded liabilities that ADVENTRX did not assume. |
a. | The number of ADVENTRX weighted-average shares used in computing historical net loss per share, basic and diluted; and | ||
b. | The number of ADVENTRX weighted-average shares issued to the former stockholders of SynthRx on April 8, 2011, as initial consideration for the acquisition. |