-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Waue4iCtoyDk40szxlARRj7iQZK+/h0dKYmuFdJm0IPMTgV0OWUJgH176RHs0Ec8 v+ULqQrBTLSuf4moF8RSsA== 0001000096-07-000395.txt : 20071217 0001000096-07-000395.hdr.sgml : 20071217 20071217111428 ACCESSION NUMBER: 0001000096-07-000395 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20071031 FILED AS OF DATE: 20071217 DATE AS OF CHANGE: 20071217 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ACCELR8 TECHNOLOGY CORP CENTRAL INDEX KEY: 0000727207 STANDARD INDUSTRIAL CLASSIFICATION: LABORATORY ANALYTICAL INSTRUMENTS [3826] IRS NUMBER: 841072256 STATE OF INCORPORATION: CO FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 001-31822 FILM NUMBER: 071309157 BUSINESS ADDRESS: STREET 1: 303 E 17TH AVE STREET 2: SUITE 108 CITY: DENVER STATE: CO ZIP: 80203 BUSINESS PHONE: 3038638088 MAIL ADDRESS: STREET 1: 303 E 17TH ST STREET 2: SUITE 108 CITY: DENVER STATE: CO ZIP: 80203 FORMER COMPANY: FORMER CONFORMED NAME: HYDRO SEEK INC DATE OF NAME CHANGE: 19880802 10QSB 1 accelr810312007.txt FORM 10-QSB (10/31/2007) Securities and Exchange Commission Washington, D.C. 20549 FORM 10-QSB [ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended October 31, 2007 ----------------------------------------------------- [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from __________________ to ____________________ Commission file number 0-11485 -------- ACCELR8 TECHNOLOGY CORPORATION --------------------------------------------------------------- (Exact name of small business issuer as specified in its charter) COLORADO 84-1072256 -------- ---------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 7000 Broadway, Bldg., 3-307. Denver, CO 80221 --------------------------------------------- (Address of principal executive office) (303) 863-8088 -------------- (Issuer's telephone number) (Former name, former address and former fiscal year, if changed since last report) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ] Number of shares outstanding of the issuer's Common Stock: Class Outstanding at December 1, 2007 - -------------------------- ------------------------------- Common Stock, no par value 9,971,210 INDEX ----- Page PART I. FINANCIAL INFORMATION Item 1. Financial Statements Condensed Balance Sheets 3 October 31, 2007 (unaudited) and July 31, 2007 Condensed Statements of Operations 4 for the three months ended October 31, 2007 and 2006 (unaudited) Condensed Statements of Cash Flows 5 for the three months ended October 31, 2007 and 2006 (unaudited) Notes to Unaudited Condensed Financial Statements 6 Item 2. Management's Discussion and Analysis of 12 Financial Condition and Results of Operations Item 3. Controls and Procedures 14 PART II. OTHER INFORMATION Item 1. Legal Proceedings 14 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 14 Item 3. Defaults Upon Senior Securities 14 Item 4. Submission of Matters to a Vote of Security Holders 15 Item 5. Other Information 15 Item 6. Exhibits and Reports on Form 8-K 15 SIGNATURES 15 CERTIFICATION OF OFFICERS -2-
PART I. FINANCIAL INFORMATION Item 1. Financial Statements - ----------------------------- Accelr8 Technology Corporation Condensed Balance Sheets ASSETS October 31, 2007 July 31, 2007 (Unaudited) Current assets: Cash and cash equivalents $ 1,027,129 $ 1,393,669 Accounts receivable 0 5,625 Inventory 108,214 107,855 Prepaid expenses and other current assets 13,289 24,466 ------------ ------------ Total current assets 1,148,632 1,531,615 Property and equipment, net 91,744 106,819 Investments, net 1,139,866 1,027,550 Intellectual property, net (Note 3) 3,446,511 3,472,103 ------------ ------------ Total assets $ 5,826,753 $ 6,138,087 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 115,815 $ 64,599 Accrued compensation and other liabilities 41,602 32,386 Deferred revenue 99,388 58,346 ------------ ------------ Total current liabilities 256,805 155,331 Long-term liabilities: Deferred compensation 1,158,616 1,102,549 ------------ ------------ Total liabilities 1,415,421 1,257,880 ------------ ------------ Commitments and Contingencies Shareholders' equity Common stock, no par value; 14,000,000 shares authorized; 12,878,020 12,878,020 9,971,210 shares issued and outstanding Contributed capital 653,529 635,280 Accumulated (deficit) (8,846,617) (8,359,493) Shares held for employee benefit (1,129,110 shares at cost) (273,600) (273,600) ------------ ------------ Total shareholders' equity 4,411,332 4,880,207 ------------ ------------ Total liabilities and shareholders' equity $ 5,826,753 $ 6,138,087 ============ ============ -3- Accelr8 Technology Corporation Condensed Statements of Operations For the three months ended October 31, 2007 and 2006 (Unaudited) 2007 2006 ---- ---- Revenues: OptiChem(R) revenues $ 14,584 $ 34,219 Technical consulting revenues 0 22,000 License Fees (Note 4) 50,000 0 ----------- ----------- Total revenues 64,584 56,219 ----------- ----------- Costs and expenses: Research and development 269,067 319,371 General and administrative 251,067 263,681 Amortization (Note 3) 60,046 60,046 Marketing and sales 6,512 3,440 Depreciation 15,075 18,382 Cost of sales - OptiChem(R) 1,313 8,580 ----------- ----------- Total costs and expenses 603,080 673,500 ----------- ----------- Loss from operations (538,496) (617,281) ----------- ----------- Other income (expense): Interest and dividend income 23,666 34,764 Unrealized gain (loss) on investments 26,352 43,187 Other income 1,354 0 ----------- ----------- Total other income 51,372 77,951 ----------- ----------- Net (Loss) $ (487,124) $ (539,330) =========== =========== Net (loss) per share: Basic and diluted net (loss) per share, basic and diluted $ (.05) $ (.05) =========== =========== Weighted average shares outstanding 9,971,210 9,971,210 =========== =========== -4- Accelr8 Technology Corporation Condensed Statements Of Cash Flows For the Three months Ended October 31, 2007 and 2006 (Unaudited) 2007 2006 ---- ---- Cash flows from operating activities: Net (loss) $ (487,124) $ (539,330) Adjustments to reconcile net (loss) to net cash (used in) operating activities: Depreciation 15,075 18,382 Amortization 60,045 60,046 Fair value of stock options granted for services 18,249 7,461 Unrealized holding (gain) loss on investments and reinvested earnings (26,352) (47,036) (Increase) decrease in assets: Accounts receivable 5,625 2,127 Inventory (359) 3,140 Prepaid expense and other 11,177 29,719 Increase (decrease) in liabilities: Accounts payable 51,216 21,039 Accrued liabilities 9,216 20,496 Deferred revenue 41,041 (34,482) Deferred compensation 45,104 65,786 ----------- ----------- Net cash (used in) operating activities (257,087) (392,652) ----------- ----------- Cash flows from investing activities: Patent Costs (34,453) -0- Contribution to deferred compensation trust (75,000) (75,000) ----------- ----------- Net cash (used in) provided by investing activities (109,453) (75,000) ----------- ----------- Decrease in cash and cash equivalents (366,540) (467,652) Beginning balance 1,393,669 3,004,336 ----------- ----------- Ending balance $ 1,027,129 $ 2,536,684 =========== =========== -5-
Note 1. Basis of Presentation The financial statements included herein have been prepared by Accelr8 Technology Corporation (the "Company") without audit, pursuant to the rules and regulations of the United States Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted as allowed by such rules and regulations. The Company believes that the disclosures are adequate to make the information presented not misleading. These financial statements should be read in conjunction with our annual audited financial statements dated July 31, 2007, included in our annual report on Form 10-KSB as filed with the SEC. Management believes that the accompanying unaudited financial statements are prepared in conformity with generally accepted accounting principles, which require the use of management estimates, and contain all adjustments (including normal recurring adjustments) necessary to present fairly the operations and cash flows for the periods presented. The results of operations for the three months ended October 31, 2007 may not be indicative of the results of operations for the year ended July 31, 2008. Reclassifications Certain reclassifications have been made to the quarter end October 31, 2006 financial statements to conform to the quarter end October 31, 2007 financial statement presentation. Such reclassifications have no effect on financial position or net loss as previously reported. Note 2. Summary of Significant Accounting Policies 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 of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Concentration of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash equivalents, accounts receivable, and notes receivable, including receivables from major customers. The Company grants credit to domestic and international clients in various industries. Exposure to losses on accounts receivable is principally dependent on each client's financial position. The Company performs ongoing credit evaluations of its clients' financial condition. -6- Estimated Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, investments and other long-term liabilities approximates fair value at October 31, 2007 and 2006. The carrying value of all other financial instruments potentially subject to valuation risk, principally consisting of accounts receivable and accounts payable, also approximate fair value. Note 3. Intellectual Property Intellectual property consisted of the following: October 31, 2007 July 31, 2007 ---------------- ------------- OptiChem(R) Technologies $ 4,454,538 $ 4,454,538 Patents 328,444 293,991 Trademarks 49,019 49,019 ----------- ----------- Total intellectual property 4,832,001 4,797,548 Accumulated amortization (1,385,490) (1,325,445) ----------- ----------- Net intellectual property $ 3,446,511 $ 3,472,103 =========== =========== Intellectual properties are recorded at cost and are being amortized on a straight-line basis over their estimated useful lives of 20 years, which approximates the patent and patent application life of the OptiChem(R) technologies. Amortization expense was $60,045 and $60,046, respectively, for the three months ended October 31, 2007 and 2006. The Company routinely evaluates the recoverability of its long-lived assets based upon estimated future cash flows from or estimated fair value of such long-lived assets. If in management's judgment, the anticipated undiscounted cash flows or estimated fair value are insufficient to recover the carrying amount of the long-lived asset, the Company will determine the amount of the impairment, and the value of the asset will be written down. Management believes that the fair value of the technology exceeds the carrying value. However, it is possible that future impairment testing may result in intangible asset write-offs, which could adversely affect the Company's financial condition and results of operations. -7- Note 4. License and Supply Agreements On November 24, 2004 the Company entered into an exclusive two year manufacturing and marketing agreement with SCHOTT Jenaer Glas (GMBH) of Jena Germany for OptiChem(R) coated amine-reactive slides (Slide H). SCHOTT subsequently exercised an optional one-year non-exclusive extension, which expired on November 23, 2007. The Company granted a second royalty-bearing license to SCHOTT for streptavidin slides (Slide HS) for two years that expires on December 31, 2008. The Company entered into an exclusive seven-year license with NanoString Technologies Inc. on October 5, 2007. The license grants to NanoString the right to apply OptiChem(R) coatings to NanoString's proprietary molecular detection products. Pursuant to the license agreement, NanoString paid the Company a non-refundable fee of $100,000 of which $50,000 was credited against future royalties. Under the royalty-bearing license, NanoString is to pay the Company a royalty at the rate of eight percent (8%) of net sales for sales up to $500,000 of NanoString licensed products. The royalty rate on the second $500,000 of net sales is six percent (6%), and the royalty thereafter is four percent (4%). -8- Note 5. Employee Stock Based Compensation Common Stock Options On October 31, 2007, there were 987,500 stock options outstanding at prices ranging from $1.45 to $3.20 with expiration dates between January 18, 2008 and March 16, 2017. For the three months ended October 31, 2007 and 2006, stock options exercisable into 987,500 and 947,500 shares of common stock, respectively, were not included in the computation of diluted earnings per share because their effect was antidilutive. For the quarters ended October 31, 2007 and 2006, the company accounted for stock based compensation to employees and directors using SFAS No. 123 (revised 2004), "Share-Based Payment" (SFAS 123R), which replaces SFAS 123 and supersedes APB Opinion No. 25. SFAS 123R requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. The proforma disclosures previously permitted under SFAS 123 are no longer an alternative to financial statement recognition. Under the modified prospective application method, we will apply the standard to new awards, and to awards modified, repurchased, or cancelled after the required effective date. Additionally, compensation cost for the unvested portion of awards outstanding as of the required effected date will be recognized as compensation expense as the requisite service is rendered after the required effective date. The fair value of options granted under the stock option agreements and stock-based compensation plans discussed above is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions used for grants for the quarter ended October 31, 2007 and 2006: no dividend yield; risk free interest rate of 5.0%; expected life of 3-4 years; and expected volatility of 64% and 52%. The weighted average remaining contractual life of options outstanding at October 31, 2007 and 2006 was 4.11 and 4.76 years. The consulting expense related to stock options for the quarter ended October 31, 2007 and 2006 were $18,249 and $7,461 as follows: 2007 2006 ---- ---- New grants for quarter ended October 31, 2007 $ 8,402 $ 274 Prior grants 9,847 7,187 ------- ------- Total $18,249 $ 7,461 ======= ======= -9- Note 6. Subsequent Events On November 24, 2007 the Company entered into a three-year non-exclusive renewal license agreement with SCHOTT for Slide H application of OptiChem(R) amine-reactive coatings. Pursuant to the license agreement, SCHOTT paid the Company a non-refundable fee of $100,000 of which $50,000 was credited against future royalties. Under the royalty-bearing license, SCHOTT is to pay the Company a royalty at the rate of six percent (6%) of net sales of Licensed Products with a maximum royalty payment of $150,000 (including the $50,000 non-refundable minimum paid in advance). As of December 13, 2007 the Company entered into an exclusive right to negotiate for a business relationship with Becton, Dickinson & Company (NYSE: BDX) to develop the BACcel(R) rapid diagnostic platform. The right grants an exclusive discussion period through March 31, 2008 for consideration of $100,000. Item 2. Management's Discussion and Analysis of Financial Condition and Result of Operations Forward Looking Information This Quarterly Report on Form 10-QSB contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Company, intends that such forward-looking statements be subject to the safe harbors created thereby. These forward-looking statements, which can be identified by the use of words such as "may," "will," "expect," "anticipate," "estimate," or "continue," or variations thereon or comparable terminology, include the plans and objectives of management for future operations, including plans and objectives relating to the products and future economic performance of the Company. In addition, all statements other that statements of historical facts that address activities, events, or developments the Company expects, believes, or anticipates will or may occur in the future, and other such matters, are forward-looking statements. The forward-looking statements included herein are based on current expectations that involve a number of risks and uncertainties. These forward-looking statements are based on assumptions that the Company will retain key management personnel, the Company will be successful in the development of the BACcel(R) system, the Company will have sufficient capital to complete the development of the BACcel(R) system, the Company will be able to protect its intellectual property, the Company's ability to respond to technological change, that the Company will accurately anticipate market demand for the Company's products and that there will be no material adverse change in the Company's operations or business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes that the assumptions underlying the forward-looking statements -10- are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance that the results contemplated in forward-looking statements will be realized. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The following discussion should be read in conjunction with the Company's unaudited condensed financial statements and related notes included elsewhere herein. The Company's future operating results may be affected by various trends and factors which are beyond the Company's control. These include, among other factors, general public perception of issues and solutions, and other uncertain business conditions that may affect the Company's business. The Company cautions the reader that a number of important factors discussed herein, and in other reports, filed with the Securities and Exchange Commission including the risks in the section entitled "Risk Factors" its 10-KSB for the year ended July 31, 2007, could affect the Company's actual results and cause actual results to differ materially from those discussed in forward-looking statements. Overview Our vision is to develop and commercialize an innovative diagnostic system for use with critically ill patients for rapid identification of bacteria and specific strains based on the presence of major antibiotic resistance mechanisms. Our business strategy is to demonstrate the value of our technology in the broad market for biomedical products with the intent of licensing our proprietary technology to established market leaders. We are developing the BACcel(R) system, a rapid bacterial strain identification analyzer, by integrating our proprietary technologies into an automated system. Proprietary technologies include OptiChem(R) surface coatings, and various innovative assay processing methods. We have received patents or we have patent applications pending for the major technology components, methods, and systems. The BACcel(R) system development project began with a number of innovative analytical biological concepts that had no direct precedent, even though based on familiar microbiological testing principles. Until now, these accepted principles have only been applied to cultures that contain hundreds of millions of bacteria descended from single organisms, hand-selected as cultured colonies grown from a patient specimen. The BACcel(R) system is based on a simple transformation of standard methods, using advanced automation technology to achieve substantially better performance than is possible with current testing methods. We believed that speed and precision should be possible by analyzing, as individuals, many thousands of cells extracted directly from the patient specimen. This contrasts with standard culturing in which the descendants of fewer than ten cells are presumed to represent the entire infectious bacterial population in a specimen, and with which many hours of repeated growth are required to perform analyses. Typically, initial testing requires 2-3 days, which is too late to help the physician make treatment decisions for critically infected patients. As a result, initial therapy typically proves inadequate in 20% to 40% of such cases, causing high mortality, serious medical complications, and extended length of stay. -11- Published studies on ICU patients consistently show that a hospital-acquired infection doubles the risk of mortality and complications. Infection with a multi-resistant organism quadruples risks relative to comparable un-infected patients. The most important reason for elevated risk is inadequate initial therapy. We intend the BACcel(R) system to report bacterial quantitation and identification within 2 hours of patient specimen processing. We plan to augment the first reported identification with additional strain identification based on the presence of major antibiotic resistance mechanisms. We believe that resistance mechanism identification will require no more than 4 additional hours of testing, with some results becoming available more quickly than others. The purpose of this strategy is to narrow the drug choices for initial therapy by identifying major resistance mechanisms that are likely to cause drugs to fail. If successful, this approach would help the physician to subtract ineffective drugs from the list of available drugs, leaving those that are most likely to benefit the patient. For example, the first report might state that a significant number of common "Staph" is present in a patient specimen, likely causing a patient's infection. The second report might then state that all of the organisms fall into a major antibiotic resistance group known as "MRSA" (methicillin resistant Staphylococcus aureus, often referred to as "superbugs" in news reports because of their multiple drug resistance). This identification eliminates from consideration the most important drugs preferred for treating Staph infections, such as drugs related to penicillin. The second report would include the identification of additional important resistance mechanisms that might similarly rule out the next most important drugs, such as drugs related to erythromycin. In this way, we believe that the BACcel(R) system will systematically test for the most significant resistance mechanisms. This would leave the physician with specific drug choices that are most likely to prove effective. From these, the physician would then be able to hold in reserve those drugs considered "salvage" or "last choice" drugs. This approach of reserving drugs helps to delay the emergence of resistance for the few drugs still available to treat highly resistant strains. Without specific guidance, the physician now has no choice but to use these reserved drugs to assure initial infection control but accelerating their loss of effectiveness over time. Popular news media have reported widely about MRSA as a multi-resistant "superbug." However, organizations such as the CDC (US Centers for Disease Control and Prevention) and IDSA (Infectious Diseases Society of America) have also identified other multi-drug resistant organisms as presenting even greater threats. They include the genera of Pseudomonas, Acinetobacter, and Klebsiella. -12- In the hospital ICU, MRSA typically causes no more than about 30% of mortality from acquired infections. The other organisms just listed, along with highly resistant E. coli, account for much higher percentage. In addition, Acinetobacter acquired during medical treatment has been a particular problem with wounded personnel in the Middle East. To the best of management's knowledge, based on outside opinions and direct market research, Accelr8 is the only organization in the world to be developing a rapid diagnostic solution, and one that includes these organisms. Management is aware of no other organization that addresses this range of organisms and strain types. To date, we have established the functional requirements of the BACcel(R) platform. We have begun testing the specific analyses required in the BACcel(R) system and published the results at major scientific and clinical conferences. We have been guided by leading medical experts in our development strategy and product design. During the next twelve months, the Company intends to expand its experimental data to characterize and validate test performance to be used in future versions of the BACcel(r) system. In addition, we expect to further define requirements for a commercial research product in advance of clinical product development. In addition to BACcel(R) system development, we have developed and independently licensed OptiChem(R) surface coatings to other companies for use in microarraying and other molecular detection products. We have granted Schott Jenaer Glas GmbH, which is a global leader in high-quality glass manufacturing, a non-exclusive license to manufacture and market microarraying slides using OptiChem(R) coatings. We have also licensed NanoString Technologies Inc. to use OptiChem(R) in their innovative molecular bar-coding systems for high-sensitivity gene expression analysis. Changes in Results of Operations: three months ended October 31, 2007 compared to three months ended October 31, 2006. OptiChem(R) revenues during the three month period ended October 31, 2007 were $14,584 as compared to $34,219 during the three month period ended October 31, 2006, a decrease of $19,635 or 57.4%. This decrease was the result of a decrease in slide sales to SCHOTT. OptiChem(R) revenues for the three months ended October 31, 2007 were 22.6% of total revenues and 60.9% of total revenues for the three months ended October 31, 2006. OptiChem(R) royalty revenue from SCHOTT for the quarter ended October 31, 2007 and 2006 was $1,921 and $4,285, respectively. Technical Consulting Fees during the three-month period ended October 31, 2007 were $0 as compared to $22,000 during the three-month period ended October 31, 2006. The Technical Consulting Fees for the three month period ended October 31, 2006, were the result of the Feasibility Testing Agreement with Promega. -13- License Fees during the three-month period ended October 31, 2007 were $50,000 as compared to $0 during the three-month period ended October 31, 2006. The Technical Consulting Fees for the three month period ended October 31, 2007, were the result of the license agreement with NanoString. Cost of sales for the three months ended October 31, 2007 was $1,313, which represented 9% of OptiChem(R) revenue compared to $8,580 during the three months ended October 31, 2006, which represented 25.1% of OptiChem(R) revenue. The decrease in the cost of sales expressed as a percentage of OptiChem(R) revenue was the result of efficiencies in production which reduced manpower costs. Further, reduced costs of substrates and chemicals used in the formulation of OptiChem(R) also contributed to the decrease. Research and development expenses for the three months ended October 31, 2007 were $269,067 as compared to $319,371 during the three months ended October 31, 2006, a decrease of $50,304 or 15.8%. The decrease was due to decreased engineering costs related to the development of the BACcel(R) system. General and administrative expenses for the three months ended October 31, 2007 were $251,067 as compared to $263,681 during the three months ended October 31, 2006, a decrease of $12,614 or 4.8%. The decrease was primarily due to decreases in deferred compensation which is directly related to interest and unrealized gains from investments. The unrealized gain on investments was $26,352 for the quarter ended October 31, 2007 as compared to an unrealized loss of $43,187 for the quarter ended October 31, 2006, a decrease of $16,835. The change was the result of market fluctuations in the price of securities held in the deferred compensation trust. Amortization during the three-month period ended October 31, 2007 was $60,046 as compared to $60,045 during the three-month period ended October 31, 2006. Marketing and sales expenses for the three months ended October 31, 2007 were $6,512 as compared to $3,440 during the three months ended October 31, 2006, an increase of $3,072 or 89.3%. The increase was primarily due to increased costs related to technical presentations at scientific conferences. Depreciation for the three months ended October 31, 2007 was $15,075 as compared to $18,382 during the three months ended October 31, 2006, a decrease of $3,307 or 18%. This decrease resulted from the increased age of assets and related depreciation schedules. As a result of these factors, loss from operations for the three months ended October 31, 2007 was $538,496 as compared to a loss of $617,281 during the three months ended October 31, 2006, a decreased loss of $78,785 or 12.7%. -14- Interest income during the three months ended October 31, 2007 was $23,666 as compared to $34,764 during the three months ended October 31, 2006, a decrease of $11,098 or 31.9%. Interest income decreased as a result of a decreased cash balance earning interest. Unrealized gain on marketable securities held in the deferred compensation trust for the three months ended October 31, 2007 was $26,352 as compared to $43,187 during the three months ended October 31, 2006, a decrease of $16,835 or 39%. The unrealized gain was a result of market fluctuations on the securities that are held in the deferred compensation trust. As a result of these factors, net loss for the three months ended October 31, 2007 was $487,124 as compared to $539,330 during the three months ended October 31, 2006, a decreased loss of $52,206 or 9.7%. Capital Resources and Liquidity At October 31, 2007, as compared to July 31, 2007, cash and cash equivalents, decreased by $366,540 from $1,393,669 to $1,027,129, or approximately 26.3% and the Company's working capital decreased by 35.2% from $1,376,284 to $891,827. During the same period, shareholders' equity decreased from $4,880,207 to $4,411,332 or approximately 9.5% primarily as a result of a net loss of $487,124. The net cash used in operating activities was $257,087 in the three months ended October 31, 2007 compared to cash used in operating activities in the three months ended October 31, 2006 of $392,652 a difference of $135,565 or 34.5%. The principal elements that gave rise to the decrease of cash used were a decrease in the net loss of $52,206, a decrease in prepaid expenses and deposits of $11,177, an increase in account payable and accrued liabilities of $60,432 and an increase in deferred revenue of $75,823. Our primary use of capital has been for the research and development of the BACcel(R) system. The Company has historically funded its operations generally through its existing cash balances and cash flow generated from operations. Notwithstanding our investments in research and development, there can be no assurance that the BACcel(R) system or any of our other products will be successful, or even if they are successful, will provide sufficient revenues to continue our current operations. Our working capital requirements are expected to increase in line with the growth of our business. We have no lines of credit or other bank or off balance sheet financing arrangements. We believe our capital requirements will continue to be met with our existing cash balance, additional issuance of equity or debt securities and/or a capital infusion from potential partners in the development of the BACcel(R) system. If we are unable -15- to realize any revenues from our products, we will require additional funds from other sources to continue operations. Further, if capital requirements vary materially from those currently planned, we may require additional capital sooner than expected. Management believes that current cash balances plus cash flow from operations will be sufficient to fund our capital and liquidity needs for the next 12 months. Thereafter, the Company may have to seek capital resources from other sources to meet its obligations in the future. There can be no assurance that such capital will be available in sufficient amounts or on terms acceptable to us, if at all. Additional issuances of equity or convertible debt securities will result in dilution to our current common stockholders. Item 3. Controls and Procedures ----------------------- An evaluation was conducted under the supervision and with the participation of the Company's management, including Thomas V. Geimer, the Company's Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), of the effectiveness of the design and operation of the Company's disclosure controls and procedures as of October 31, 2007. Based on that evaluation, Mr. Geimer concluded that the Company's disclosure controls and procedures were effective as of such date to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Such officers also confirm that there was no change in the Company's internal control over financial reporting during the quarter ended October 31, 2007. PART II. OTHER INFORMATION Item 1. Legal Proceedings - -------------------------- Not Applicable. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds - -------------------------------------------------------------------- Not applicable. Item 3. Defaults upon Senior Securities - ---------------------------------------- Not applicable. Item 4. Submission of Matters to a Vote of Security Holders - ----------------------------------------------------------- The Annual Meeting of the Company's Shareholders was held on December 13, 2007. The matters considered at the meeting were: a) The election of Thomas V. Geimer, A. Alexander Arnold III, and Charles E. Gerretson to the Company's Board of Directors; -16- b) To ratify the selection of Comiskey & Company, P.C. as the independent registered public accountanting firm of the Company for the fiscal year ending July 31, 2008. Each of the nominees was elected to the Board of Directors, and Comiskey & Company, P.C. were ratified as the Company's independent registered public accountanting firm. The votes cast at the annual meeting upon the matters considered were as follows: For Withhold --- -------- Election of Directors Thomas V. Geimer 7,074,632 180,604 A. Alexander Arnold III 7,231,311 23,935 Charles E. Gerretson 7,231,309 23,927 Ratification of Comiskey & Company, P.C. as the independent registered public accountanting firm of the Company for the fiscal year ending July 31, 2008. For Against Withhold --- ------- -------- 7,219,259 16,844 18,098 Item 5. Other Information - -------------------------- On December 11, 2007, the Company entered into a new employment agreement with Thomas V. Geimer. The agreement was negotiated and approved by the Compensation Committee. The agreement provides for an annual base salary of $165,000 with annual deferred compensation of $75,000. The agreement is effective January 1, 2008 and expires on December 31, 2012. -17- In the event of termination by mutual agreement, termination "with cause," as defined in the agreement, death or permanent incapacity or voluntary termination, Mr. Geimer, or his estate, would be entitled to the sum of the base salary and unreimbursed expenses accrued to the date of termination and any other amounts due under the agreement. In the event of termination "without cause," as defined in the agreement, Mr. Geimer would be entitled to the sum of the base salary and unreimbursed expenses accrued to the date of termination and any other amounts due under the agreement and an amount equal to the greater of Mr. Geimer's annual base salary (12 months of salary) or any other amounts remaining due to Mr. Geimer under the agreement, which as of July 31, 2007 would be $175,000. Additionally, in the event of a change in control, any unpaid amounts due under the initial term of the agreement for both base salary and deferred compensation would be payable plus five times the sum of the base salary and deferred compensation. A copy of the Employment Agreement is attached hereto as Exhibit 10.2. Item 6. Exhibits - ----------------- a) Exhibits: 1. Exhibit 10.1 License Agreement between the Company and SCHOTT Jenaer Glas GmbH dated November 24, 2007 2. Exhibit 10.2 Employment Agreement with Thomas V. Geimer effective January 1, 2008 3. Exhibit 31.1 Certification of Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 4. Exhibit 31.2 Certification of Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 5. Exhibit 32.1 Certification of Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act 0f 2002. -18- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Dated: December 17, 2007 ACCELR8 TECHNOLOGY CORPORATION /s/ Thomas V. Geimer ---------------------------------- Thomas V. Geimer, Secretary, Chief Executive Officer and Chief Financial Officer /s/ Bruce H. McDonald ---------------------------------- Bruce H. McDonald, Principal Accounting Officer -19- EX-10.1 2 accelr8exh101.txt LICENSE AGREEMENT Exhibit 10.1 LICENSE AGREEMENT This License Agreement ("Agreement") is made and entered into this 24th of November, 2007 (the "Effective Date"), by and between ACCELR8 TECHNOLOGY CORPORATION, a Colorado corporation, having its principal office at 7000 North Broadway, Bldg 3-307, Denver, CO 80221 (hereinafter "Accelr8") and SCHOTT Jenaer Glas GmbH, having its principal office at Otto-Schott-Strasse 13, 07745 Jena, Germany (hereinafter "Schott"). Accelr8 and Schott may be referred to herein individually as a "Party" and collectively as the "Parties." WITNESSETH ---------- WHEREAS, Accelr8 has developed proprietary surface chemistry and coating technology; and WHEREAS, Schott desires to obtain a license to utilize such technology in a standard product that it will manufacture, market and distribute to certain markets, and Accelr8 so agrees, subject to the terms and conditions of this Agreement. NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants and agreements contained herein, the Parties, intending to be legally bound, do hereby agree as follows: ARTICLE 1. DEFINITIONS As used herein, the following terms shall have the following meanings: 1.01 "Accelr8 Intellectual Property" means the Accelr8 Know-How and Accelr8 Patents. 1.02 "Accelr8 Know-How" means all tangible and intangible (a) techniques, technology, practices, trade secrets, inventions (whether patentable or not), methods, processes (including manufacturing and quality control processes), knowledge, know-how, skill, experience, test data and results (including pharmacological, toxicological and clinical test data and results), analytical and quality control data, results or descriptions, software and algorithms, and (b) compounds, compositions of matter, complexes and physical, biological or chemical material, which exist at Accelr8 and is not publicly known as of the Effective Date and are related to Accelr8's proprietary surface chemistry and coating technology. 1.03 "Accelr8 Patents" means (a) those Patents and Patent Applications listed in Appendix A, and (b) any Patents owned or licensed (with a right of sublicense) by Accelr8 that cover the Process Improvements. 1.04 "Affiliate" means every corporation, or entity, which, directly or indirectly, or through one or more intermediaries, controls, is controlled by, or is under common control with a Party, as well as every officer, director, agent and representative of any such corporation or entity. For the purposes of the foregoing definition, the word "control" (including, with correlative meaning, the terms "controlled by" or "under common control with") means the actual power, either directly or indirectly through one or more intermediaries, to direct or cause the direction of the management and policies of such entity, whether by the ownership of at least fifty percent (50%) of the voting stock of such entity, or by contract or otherwise. 1.05 "Calendar Quarter" means any period of three (3) consecutive months ending on March 31, June 30, September 30 and December 31. 1.06 "Confidential Information" has the meaning set forth in ss.7.01. 1.07 "Effective Date" means the date specified in the first paragraph of this Agreement. 1.08 "Hydrogel Coatings" means coatings comprising hydrophilic polymers used to immobilize molecules and other materials for the purpose of microarraying. 1.09 "Improvements" means inventions, discoveries, works of authorship, trade secrets, know-how or developments, whether or not patentable, that are made, conceived, reduced to practice or otherwise generated by Accelr8 during the Term, which are improvements, modifications or other developments to the Licensed Product (including, without limitation, the manufacturing processes for such products and/or the OptiChem coating technology), or the OptiChem(R) coating technology. 1.10 "Inventions" means all Improvements, inventions, discoveries, processes, works of authorship, trade secrets and other know-how, developments or the like, whether or not patentable, that are made, conceived, reduced to practice or otherwise generated solely by a Party or jointly by the Parties as a result of this Agreement (including, without limitation, Inventions related to the Licensed Product or its manufacture). 1.11 "Licensed Product" means the product described in Appendix B. 1.12 "Net Sales" means the actual gross selling price of Licensed Products by Schott or its Affiliates, and their respective agents, contractors or distributors, whether invoiced or not, less (a) discounts allowed in amounts customary in the trade to the extent actually granted, (b) sales/tariff duties and/or taxes directly invoiced and paid, (c) outbound transportation prepaid, and (c) amounts credited on returns. Net Sales shall also include the fair market value of any non-cash consideration received for the sale, lease or transfer of Licensed Products. 1.13 "Patents" means: (a) United States and foreign patents and/or patent applications and/or provisional patent applications; (b) United States and foreign patents issued from the applications described in (a) above and from divisionals and continuations of these applications; (c) U.S. and foreign continuation-in-part applications, and the resulting patents of any of the U.S. and foreign applications described in (a) or (b) above or this paragraph (c); and 2 (d) any reissues of United States and foreign patents described in (a), (b) or (c) above. 1.14 "Process Improvements" means any Improvements by Accelr8 to the processes for the manufacture of the Licensed Product. 1.15 "Stock Product" means a product that has a single, standard set of specifications (including materials and dimensions), publicly available at all times to all Schott customers. 1.16 "Term" means the term of this Agreement, as determined in accordance with Article 10. 1.17 "Third Party" means any entity or person other than Accelr8 or Schott. ARTICLE 2. GRANT OF RIGHTS 2.01 Accelr8 hereby grants, and Schott accepts, during the Term and subject to the terms and conditions of this Agreement, a worldwide, non-transferable (except as provided in ss.12.01), non-exclusive, royalty-bearing license under the Accelr8 Intellectual Property to make, use, sell, offer to sell, import and export the Licensed Product. The foregoing license also permits Schott to combine the Licensed Product with Schott's MPX technology, provided that Schott's license to make, use, sell, offer to sell, import and export the combined product is in accordance with the license granted in the prior sentence. Accelr8 shall provide Schott with all information necessary to produce and market Licensed Products, including descriptions or specifications of machines, components and materials used for the production. 2.02 The license and rights granted by Accelr8 in ss.2.01 are subject to the following: (a) Schott may not sublicense the license and rights granted to its hereunder to any Third Party, including, without limitation, any Affiliate; (b) the Licensed Product must be a Stock Product; (c) the Licensed Product must be appropriately labeled for use and sale, with restrictions in the instructions for use prohibiting use for medical purposes. (d) Schott acknowledges that the license granted to it hereunder does not include any Improvements developed during the Term, except for the Process Improvements. 2.03 Accelr8 hereby reserves all rights in and to the Accelr8 Intellectual Property not expressly granted to Schott hereunder. 3 ARTICLE 3. DILIGENCE AND COMMERCIALIZATION 3.01 As between the Parties, Schott shall control and be responsible for, at its sole expense and in its sole discretion, the manufacturing and commercialization of the Licensed Products. 3.02 The Parties may provide each other with all freedom to operate opinions and other similar information related to the manufacture, use, sale or import of the Licensed Product as contemplated hereunder. Said freedom to operate opinions and other similar information shall be subject to the confidentiality terms described in ss. 7.01. 3.03 Accelr8will provide to Schott, on a time and materials basis as reasonably requested by Schott, technical support and consulting services related to the Licensed Product subject to mutual agreement on applicable terms and conditions. 3.04 Schott will provide to Accelr8 within forty (40) days after the end of each Calendar Quarter a written report about all sales of the Licensed Product during such calendar Quarter. In addition, Schott will use reasonable efforts to notify Accelr8 of any misuse of the Licensed Product (i.e., any use not in accordance with the applicable instructions for use for the Licensed Product) by any Third Party, and will stop all sales of Licensed Products as promptly as is practical to such Third Party. ARTICLE 4. PAYMENTS AND PAYMENT TERMS 4.01 Initial Fee. On the Effective Date, Schott shall pay to Accelr8 a non-refundable fee of One Hundred Thousand Dollars ($100,000). Fifty Thousand Dollars ($50,000) of such fee shall be credited against future royalties payable pursuant to ss.4.02 ("Prepaid Royalties"). 4.02 Royalty Payments. Subject to the other terms and conditions of this Agreement: (a) Schott shall pay Accelr8 a royalty payment equal to six percent (6%) of Net Sales of Licensed Products; provided, however, that if the total Net Sales during the Term equal or exceed Two Million Five Hundred Thousand Dollars ($2,500,000), then the total royalty payable by Schott under this paragraph (a) for the Term shall be a flat fee of One Hundred Fifty Thousand Dollars ($150,000). (b) No royalties shall be payable by Schott to Accelr8 under this ss.4.02 until the Prepaid Royalties are exhausted. 4.03 All royalty amounts payable to Accelr8 under this Agreement shall be paid as provided in ss.4.02 above, with all royalties on Net Sales of Licensed Products payable (including the balance of any flat fee royalty payment) within forty (40) days after the end of the Calendar Quarter in which the Net Sales giving rise to the royalty payment obligation were made. Each payment of royalty payments shall be accompanied by the report described in ss.5.01. 4.04 Except as set forth below, all payments hereunder shall be payable in U.S. dollars. When conversion of payments from any foreign currency is required, such conversion shall be at an exchange rate equal to the rate of exchange for the currency of the country from which the royalties are payable as published by The 4 Wall Street Journal, East Coast Edition, on the final day of the Calendar Quarter for which a payment is due. In any country where conversion of the local currency is blocked and such currency cannot be removed from the country, at the election of Accelr8 royalties accrued in that country may be paid to Accelr8 in that country in local currency by deposit in a local bank designated by Accelr8. All payments other than those specified in the preceding sentence shall be payable to Accelr8 by wire transfer, in immediately available funds, to a bank account as may be designated by Accelr8 in writing from time to time. 4.05 If laws or regulations require that taxes be withheld from royalty payments due to Accelr8 hereunder, Schott shall have the right to (a) deduct such taxes from the royalty payment due to Accelr8 hereunder, (b) timely pay the taxes to the proper taxing authority, and (c) send evidence of the obligation together with proof of tax payment (including certification of receipt by the taxing authority) to Accelr8 within fifty (50) days following such tax payment. Notwithstanding the foregoing, Schott shall cooperate with Accelr8 and shall execute and deliver such documents and take such other actions as Accelr8 may reasonably request, for the purpose of (x) obtaining an exemption from the tax withholding requirements of any foreign country, (y) obtaining a refund of any taxes actually withheld by Schott and paid to a foreign country pursuant to tax withholding requirements, and (z) otherwise seeking to lawfully mitigate the amount of taxes required to be withheld from any payments due to Accelr8 hereunder pursuant to applicable foreign tax law. 4.06 Any amounts not paid by Schott when due under this Agreement shall be subject to interest from and including the date payment is due through and including the date upon which Accelr8 has actually received payment at a rate equal to the sum of two percent (2%) plus the prime rate of interest quoted in the Money Rates section of The Wall Street Journal, East Coast Edition, calculated daily on the basis of a 365-day year, or similar reputable data source, or, if lower, the highest rate permitted under applicable law. The payment of such interest shall not limit Accelr8 from exercising any other rights or remedies it may have as a consequence of the lateness of any payment. 4.07 On sales of Licensed Products by Schott that are made in other than arm's-length transactions, the value of the Net Sales attributed under this Article 4 to such a transaction shall be that which would have been received in an arm's-length transaction, based on a like transaction at that time. ARTICLE 5. REPORTS, RECORDS AND AUDITS 5.01 Schott shall, without request by Accelr8, render to Accelr8 written accounts for each Calendar Quarter of the Net Sales of Licensed Products made during such Calendar Quarter and shall pay to Accelr8 the royalties due on such Net Sales, if any, in accordance with this Article 5. The written report shall be in the form mutually agreed upon by the Parties, but will include the information required in ss.3.04. 5.02 Schott shall keep accurate records in sufficient detail to reflect its operations under this Agreement and to enable the royalties accrued and payable under this Agreement to be determined. Such records shall be 5 retained for at least three (3) years after the close of the period to which they pertain, or for such longer time as may be required to finally resolve any question or discrepancy raised by Accelr8. 5.03 Upon the request of Accelr8, with reasonable written notice, Schott shall permit an independent public accountant selected and paid by Accelr8, and bound to confidentiality, to have access during regular business hours to such records as may be necessary to verify the accuracy of royalty payments made or payable hereunder. Said accountant shall disclose any such information acquired by it to Accelr8 only to the extent that such information should properly have been contained in the royalty reports required under this Agreement. If an inspection shows an underreporting or underpayment in excess of five percent (5%) for any twelve (12) month period, then Schott shall reimburse Accelr8 for the cost of the inspection and pay the amount of the underpayment including any interest as required by this Agreement. ARTICLE 6. INTELLECTUAL PROPERTY; PROSECUTION; COSTS AND ENFORCEMENT 6.01 Ownership of Inventions and Information. Ownership of Inventions shall be determined in accordance with the following rules: (a) Schott shall own any Inventions (including all intellectual property rights therein) that it solely makes or conceives ("Schott Inventions"). (b) Accelr8 shall own any Inventions (including all intellectual property rights therein) that it solely makes or conceives. (c) For any Inventions (including all intellectual property rights therein) that the Parties jointly make or conceive ("Joint Inventions"), the Parties shall jointly own any Joint Inventions, subject to the restrictions in ss.6.01(e). (e) For all Joint Inventions that are jointly owned by the Parties, each Party is free to utilize such Joint Invention without accounting or reporting to the other Party, except that neither Party will assign, license, sublicense, sell, distribute or otherwise transfer any such Joint Inventions to any competitor of the other Party. 6.02 Prosecution and Maintenance of Patents. Each Party shall control the preparation, filing, prosecution and maintenance (including without limitation conducting or participating in interferences or oppositions), at its own expense, of any and all Patents that it owns. The Parties shall jointly control the preparation, filing, prosecution and maintenance (including without limitation conducting or participating in interferences or oppositions), of any and all Patents that are jointly owned by the Parties ("Joint Patents"), and to equally share all outside legal fees and expenses associated therewith. However, if a Party desires not to file, prosecute, issue or maintain an application for a Joint Patent in any particular country or jurisdiction, such Party shall notify the other Party of its intention not to do so, and with such notice shall relinquish its interest in the same (i.e., shall have no further ownership interest in, license or right to use, or any costs associated therewith) in such particular country or jurisdiction, and the other Party shall have the right, but 6 not the obligation to file, prosecute, issue or maintain in its name such application or patent embodying a Joint Patent in such particular country or jurisdiction at its own expense. 6.03 Cooperation of the Parties. At the reasonable request of the responsible Party, the other Party agrees to reasonable efforts to cooperate in the preparation, filing, prosecution, maintenance and defense of any Patents under this Agreement and in the obtaining and maintenance of any patent extensions, supplementary protection certificates and the like with respect to any Patent claiming an Invention. Such cooperation includes, but is not limited to: (a) executing all papers and instruments (including assignment documents), or requiring its employees or contractors, to execute such papers and instruments, so as to effectuate the ownership of inventions set forth in ss.6.01, and Patents claiming such inventions, and to enable the responsible Party to apply for and to prosecute patent applications in any country; and (b) promptly informing the other Party of any matters coming to the first Party's attention that may affect the preparation, filing, prosecution or maintenance of any such patent applications. 6.04 Infringement by Third Parties. Each Party agrees to inform the other Party promptly in writing of any suspected infringement of the Accelr8 Patents, the Licensed Product and/or the Patents resulting from any Inventions. The Party owning the applicable Patent shall have the sole right to institute suit against such Third Party, provided that the other Party shall provide all reasonable cooperation and assistance that may be requested by the first Party, at the first Party's expense, in any such suit, which cooperation may include joining in such suit. ARTICLE 7. CONFIDENTIALITY AND PUBLICATIONS 7.01 In the performance of this Agreement, each Party may disclose directly or indirectly to the other party certain confidential information, orally or in writing or both, including, but not be limited to, marketing plans, cost or price data, customer or supplier information, technical information, patent applications, and patent prosecution documents regarding the Accelr8 Intellectual Property or the Licensed Product (collectively, "Confidential Information"). Except to the extent expressly authorized by this Agreement or otherwise agreed in writing by the disclosing Party, the Parties agree that, during the Term for at least five (5) years, the receiving Party shall keep confidential and shall not publish or otherwise disclose and shall not use for any purpose other than as expressly provided for in this Agreement any Confidential Information. A Party may use such Confidential Information only to the extent required to accomplish the purposes of this Agreement. Neither Party will use any Confidential Information of any other Party for any purpose or in any manner that would constitute a violation of any laws or regulations, including, without limitation, the export control laws of the United States. Neither Party may reproduce any Confidential Information of any other Party in any form except as required to accomplish the intent of this Agreement. Neither Party may disclose Confidential Information of any 7 other Party to any employee, agent, consultant, or sublicensee who does not have a reasonable need for such information for purposes of performance under this Agreement and who is not subject to binding obligations of confidentiality and limited use at least as restrictive as those of this Article 7. In particular, neither Party will disclose to a Third Party any legal opinions with regard to Accelr8's Intellectual Property without first obtaining a "Community of Interest" agreement from such Third Party that includes Accelr8 as named in the Community of Interest. Each Party will use at least the same standard of care as it uses to protect its own proprietary or confidential information of a similar nature to prevent unauthorized disclosures or uses of Confidential Information of the other Party, but in no event less than reasonable care. Each Party will promptly notify the disclosing Party upon discovery of any unauthorized use or disclosure of the Confidential Information of the other Party. 7.02 The obligations of confidentiality and non-use of Confidential Information set forth in ss.7.01 above shall not apply to any information that, as shown by competent proof: (a) is now, or hereafter becomes, through no act or failure to act on the part of the receiving Party in breach hereof, generally known or available; (b) is known by the receiving Party at the time of receiving such information, as shown by contemporaneous written records; (c) is hereafter furnished to the receiving Party by a Third Party, as a matter of right and without restriction on disclosure; (d) is independently developed by the receiving Party without use of or reference to Confidential Information of the other Party, as shown by independent, contemporaneous written records; or (e) is the subject of a prior, express, written permission to disclose provided by the disclosing Party. The Parties agree that the material financial terms of this Agreement shall be considered Confidential Information of both Parties. Notwithstanding the foregoing, the Parties may disclose such terms to bona fide potential corporate partners, potential investors or merger or acquisition partners, and to financial underwriters and legal and financial advisors; provided that all such disclosures shall be made only to such parties under obligations of confidentiality and non-use and provided the other Party is informed to whom such disclosures will be made. 7.03 Each of the Parties may disclose Confidential Information belonging to the other Party to the extent such disclosure is reasonably necessary for: (a) complying with applicable court orders or governmental regulations. Notwithstanding the foregoing, in the event that a Party is required to make a disclosure of any other Party's Confidential Information pursuant to ss.7.03 it will give reasonable advance notice to the other Party of such disclosure and use efforts to secure confidential treatment of such information at least as diligent as the other Party 8 would use to protect its own confidential information, but in no event less than reasonable efforts. In any event, each of the Parties agrees to take all reasonable action to avoid disclosure of Confidential Information hereunder. The Parties will consult with each other on the provisions of this Agreement to be redacted in any filings made by the parties with the United States Securities and Exchange Commission or as otherwise required by law. 7.04 Each Party shall have the right to review and comment on any material proposed for disclosure or publication by the other Party, such as by oral presentation, manuscript or abstract, which utilizes Confidential Information of the non-publishing Party. Before any such material is submitted for publication, the Party proposing publication shall deliver a complete copy to the non-publishing Party whose Confidential Information is utilized therein, at least thirty (30) days prior to submitting the material to a publisher or initiating any other disclosure. The non-publishing Party shall review any such material and give its comments to the Party proposing publication within thirty (30) days of the delivery of such material to the non-publishing Party. With respect to oral presentation materials and abstracts, the non-publishing Party shall make reasonable efforts to expedite review of such materials and abstracts, and shall return such items as soon as practicable to the Party proposing publication with appropriate comments, if any, but in no event later than thirty (30) days from the date of delivery to the non-publishing Party. The publishing Party shall comply with the non-publishing Party's requests to delete references to the non-publishing Party's Confidential Information in any such material and agrees to delay any submission for publication or other public disclosure for a period of up to an additional ninety (90) days for the purpose of preparing and filing appropriate patent applications. ARTICLE 8. REPRESENTATIONS, WARRANTIES AND COVENANTS 8.01 ACCELR8 IS LICENSING AND PROVIDING THE ACCELR8 INTELLLECTUAL PROPERTY ON AN "AS IS" BASIS, AND IT MAKES NO REPRESENTATIONS NOR EXTENDS ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE ACCELR8 INTELLLECTUAL PROPERTY OR THE USE, SALE, IMPORT, EXPORT OR OTHER DISPOSITION BY SCHOTT, ITS AFFILIATES, SUBLICENSEE(S), OR THEIR VENDEES OR OTHER TRANSFEREES OF LICENSED PRODUCTS. THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR THAT THE USE, MANUFACTURE, SALE OR IMPORT OF LICENSED PRODUCTS WILL NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK, SERVICE MARK, OR OTHER RIGHTS OF ANY THIRD PARTY. However Accelr8 has, as of the Effective Date, no knowledge of any such infringements. 8.02 Accelr8 and Schott each hereby represent and warrant to the other as follows: (a) it is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or formation, and has full corporate or other power and authority and the legal right to (i) own and operate its property and assets, (ii) carry 9 on its business as it is now being conducted and as contemplated in this Agreement, and (iii) enter into this Agreement and to carry out the provisions hereof; (b) it is duly authorized to execute and deliver this Agreement and to perform its obligations hereunder, and the person or persons executing this Agreement on its behalf has been duly authorized to do so by all requisite corporate or partnership action; and (c) (i) this Agreement is legally binding upon it and enforceable in accordance with its terms, and (ii) the execution, delivery and performance of this Agreement by it does not conflict with any written agreement, instrument or understanding to which it is a party or by which it may be bound, or violate any material law or regulation of any court, governmental body or administrative or other agency having jurisdiction over it. 8.03 Nothing in this Agreement shall be construed as: (a) A warranty or representation by Accelr8 to the validity or scope of any of the Accelr8 Patents; (b) A warranty or representation that the Accelr8 Intellectual Property or anything made, used, sold, imported or otherwise disposed of under the licenses granted hereunder (including, without limitation, the Licensed Product) will or will not infringe patents, copyrights or other rights of Third Parties. However Accelr8 has, as of the Effective Date, no knowledge of any such infringements; (c) An obligation to furnish any know-how or technology not agreed to in this Agreement, to bring or prosecute actions or suits against Third Parties for infringement or to provide any services other than those specified in this Agreement. 8.04 Schott covenants that it shall: (a) cause Licensed Products sold under this Agreement to be marked with the notice of the patent numbers or patent pending, as may be legally required. (b) comply with all laws and regulations of the United States and any other country as appropriate concerning or controlling the import or export of Licensed Products. (c) comply with all laws and regulations of the country as concerned with regard to the manufacture, marketing, promotion or distribution of Licensed Products. (d) appropriately label Licensed Products for use and sale, including, without limitation, restrictions in the instructions for use prohibiting use for medical purposes. 10 8.05 Except in connection with liability for breach of Article 7 or 8, no Party shall be entitled to recover from the other Party any special, incidental, indirect, consequential or punitive damages in connection with this Agreement or any license granted hereunder; provided, however, that this ss.8.05 shall not be construed to limit any Party's indemnification obligations under Article 9 or any remedies available at law for a violation of a Party's intellectual property or proprietary rights. ARTICLE 9. INDEMNIFICATION 9.01 Schott Indemnification. Schott shall indemnify and hold Accelr8 and its Affiliates, and their respective officers, directors, employees, consultants and agents (each, an "Accelr8 Indemnitee") harmless from and against all liability, damages, losses, costs and expenses including reasonable attorneys fees and expenses (collectively, "Losses"), due to a claim asserted by a Third Party for death, personal injury, illness, property damage, noncompliance with applicable laws and any other Third Party claim, proceeding, demand, (each, a "Third Party Claim") due to: (a) any use of the Accelr8 Intellectual Property by Schott in a manner not expressly permitted under the licenses granted to Schott hereunder; (b) any representation or warranty made by Schott in Article 8 of this Agreement; or (c) the gross negligence or willful misconduct of Schott; or (d) any claims that the manufacture, use, sale or import of the Licensed Products solely done by or through Schott infringes or violates any patent or other rights of Oxford Gene Technology. However, no indemnification applies by Schott for Accelr8 and its Affiliates, and their respective officers, directors, employees, consultants and agents (each, an "Accelr8 Indemnitee") for any actions arising from Accelr8 and its Affiliates own activities in connection with the Licensed Products. 9.02 Control of Defense. Accelr8 shall give prompt written notice of the Third Party Claim to Schott and Schott shall defend against such Third Party Claim with the reasonable cooperation of the Accelr8 Indemnitee; provided that (i) Accelr8 shall have the exclusive right to control the defense or settlement of any Third Party Claim involving the validity, enforceability or scope of any Accelr8 Intellectual Property or Patents owned by Accelr8 notwithstanding anything to the contrary herein, and (ii) subject to item (i) above, the Accelr8 Indemnitee will not settle any such Third Party Claim without the prior written consent of Schott, which consent shall not be unreasonably withheld, conditioned or delayed. Each Accelr8 Indemnitee shall have the right to be present in person or through counsel at substantive legal proceedings relating to the applicable Third Party Claim. ARTICLE 10. DURATION, TERMINATION AND CONVERSION 10.01 Term. This Agreement shall become effective as of the Effective Date and shall have a three (3) year term ("Term"), unless earlier terminated pursuant to ss.10.02. 11 10.02 Termination. This Agreement shall terminate if either Party gives written notice to the other Party of the other Party's material breach of the terms of this Agreement, and the other Party fails to cure such breach within thirty (30) days of its receipt of such notice. 10.03 Effect of Termination. (a) Upon termination of this Agreement, the licenses and rights granted to Schott hereunder shall immediately terminate, provided that Schott shall have the right to continue to sell (but not manufacture) the Licensed Product in its inventory as provided in ss.10.03(b). (b) Schott may dispose of all previously made Licensed Products within one hundred and twenty (120) days after the effective date of such termination, provided, however, that the sale of such Licensed Products shall remain subject to the terms of this Agreement including, but not limited to, the payment of royalties at the rate and at the time provided herein and the rendering of royalty reports thereon. (c) Within thirty (30) days following the expiration or termination of this Agreement, each Party shall deliver to the other Party any and all copies of any documents or tangible items that contain any Confidential Information of the other Party in its possession or under its control. 10.04 Accrued Rights and Obligations; Survival. Expiration or termination of this Agreement shall not affect any accrued rights or obligations of any Party. The provisions of Articles 5-9 and 11-12, and ss.ss.2.03, 4.03-4.06, and 10.03-10.06 of this Agreement shall survive expiration or termination of this Agreement for any reason (subject to any subsequent dates of termination referred to in such individual Articles and Sections). 10.05 Exercise of Right to Terminate. If any Party elects to terminate this Agreement pursuant to the terms of this Article 10, such Party will not be required to compensate the other Party for any damage or loss that such other Party may suffer as a result of the terminating Party exercise of its rights under this Article 10. 10.06 Damages; Relief. Subject to ss.10.05 above, termination of this Agreement shall not preclude either Party from claiming any other damages, compensation or relief that it may be entitled to under the terms of this Agreement or at law or equity upon such termination. ARTICLE 11. DISPUTE RESOLUTION 11.01 In the event of any dispute arising out of or relating to this Agreement, the affected Party shall promptly notify the other Party ("Notice Date"), and the Parties shall attempt in good faith to resolve the matter. Any disputes not so resolved shall be referred to senior executives of the Parties, who shall meet at a mutually acceptable time and location within thirty (30) days of the Notice Date and shall attempt to negotiate a settlement. If the senior executives of the Parties fail to meet within thirty (30) days of the Notice Date, or if the matter remains unresolved for a period of sixty (60) days after the 12 Notice Date, either Party may at any time thereafter and upon notice to the other Party, submit such dispute to be finally settled by arbitration administered by the International Chamber of Commerce (ICC) in accordance with its International Arbitration Rules, as such rules may be modified by the following provisions of this Article 11. 11.02 Not later than 30 days after commencement of the arbitration, the Parties shall select one arbitrator from the ICC's Roster of Neutrals, provided that such arbitrator shall in any event be a patent attorney with significant experience in the biotechnology industry. If the Parties are unable to agree on an arbitrator, an arbitrator meeting the above qualifications shall be selected in accordance with ICC's rules not later than 60 days after commencement of the arbitration. The place of the arbitration shall be Denver, Colorado. 11.03 The arbitration shall be governed by the substantive laws of the State of New York without regard to conflict of law rules, Title 9 of the US Code (United States Arbitration Act). 11.04 The arbitration proceedings will be conducted in the English language and shall not foresee means of "discovery", like e.g. production of documents. 11.05 The arbitrator will have no authority to award any damages inconsistent with the terms of this Agreement except as may be required by statute. Judgment on the award may be entered by any court of competent jurisdiction. 11.06 Each Party shall bear its own costs and expenses in relation to such arbitration, provided, however, that the Parties shall share equally the costs and expenses of the arbitrator. ARTICLE 12. MISCELLANEOUS 12.01 Assignment. Except as expressly provided hereunder, no Party may assign or transfer this Agreement or any rights or obligations hereunder without the prior written consent of the other Party (which consent shall not be unreasonably withheld); provided, however, that any Party may assign this Agreement and its rights and obligations hereunder without the other Party's consent to an Affiliate or in connection with the transfer or sale to a Third Party of all or substantially all of the assets or outstanding capital stock of such Party, whether by merger, sale of stock, or sale of assets. The rights and obligations of the Parties under this Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of the Parties. Any assignment not in accordance with this Agreement shall be void. 12.02 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, excluding its choice of law principles. 12.03 Notices. Any notice or other communication required or permitted to be given to any Party hereto shall be in writing unless otherwise specified and shall be deemed to have been properly given and effective: (a) on the date of delivery if delivered in person; (b) the date of electronically confirmed facsimile transmission if during the recipient's normal business hours, or otherwise on the next business day of the recipient; (c) one (1) business day after sending via next 13 business day delivery by a nationally recognized overnight courier service; or (d) three (3) days after mailing by registered or certified mail, postage prepaid and return receipt requested, to the Party to be notified at the following address or facsimile number: In the case of Accelr8: Accelr8 Technology Corporation 7000 North Broadway, Bldg 3-307 Denver, Colorado 80221 Facsimile: 1-303-863-1218 Attention: Thomas V. Geimer, Chairman and CEO CC: In the case of Schott: Schott Jenaer Glas GmbH Otto-Schott-Strasse 13 07745 Jena, Germany Facsimile: 49-3641-681970 Attention: Christian Jabschinsky, General Manager Schott Nexterion CC: Any Party may change its address for communications by a notice to the other Parties in accordance with this ss.12.03. 12.04 Use of Name. Accelr8 grants to Schott the right to use Accelr8's name in the promotion of the Licensed Product. 12.05 Entire Agreement. The terms and provisions contained in this Agreement (including any and all Appendices referred to herein) constitute the entire Agreement between the Parties and shall supersede all previous communications, representations, agreements or understandings, either oral or written, between the parties hereto with respect to the subject matter hereof, and no agreement or understanding varying or extending this Agreement will be binding upon any Party hereto, unless in writing which specifically refers to this Agreement, signed by duly authorized officers or representatives of each of the Parties, and the provisions of this Agreement not specifically amended thereby shall remain in full force and effect according to their terms. This Agreement expressly supercedes and replaces the terms of the Letter of Intent between the Parties dated October 15, 2003, and the terms of the Supply Agreement between the Parties dated October 15, 2003, and the terms of the License Agreement between the Parties dated November 24, 2004. 12.06 Severability. The provisions and clauses of this Agreement are severable, and in the event that any provision or clause is determined to be invalid or unenforceable under any controlling body of the law, such provision or clause shall, if possible, be interpreted to achieve the intent of the Parties to this Agreement to the extent possible rather than voided. In any event, such invalidity or unenforceability will not in any way affect the validity or enforceability of the remaining provisions and clauses hereof. 14 12.07 No Agency. The Parties relationship, as established by this Agreement, is solely that of independent contractors. This Agreement does not establish a joint venture, partnership or similar business relationship among the Parties, except as expressly set forth herein. No Party is a legal representative of any other Party hereto, and no Party can assume or create any obligation, representation, warranty or guarantee, express or implied, on behalf of any other Party for any purpose whatsoever. 12.08 Waiver. The failure of a Party to insist upon strict performance of any provision of this Agreement or to exercise any right arising out of this Agreement shall neither impair that provision or right nor constitute a waiver of that provision or right, in whole or in part, in that instance or in any other instance. Any waiver by a Party of a particular provision or right shall be in writing, shall be as to a particular matter and, if applicable, for a particular period of time and shall be signed by such Party. 12.09 Amendment. This Agreement may only be modified or supplemented in a writing expressly stated for such purpose and signed by duly authorized representatives of the Parties to this Agreement. 12.10 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute a single instrument. 12.11 No Third Party Rights or Obligations. No provision of this Agreement shall be deemed or construed in any way to result in the creation of any rights or obligation in any Third Party. 12.12 Titles and Subtitles. The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement. 12.13 Cumulative Rights. The rights, powers and remedies hereunder shall be in addition to, and not in limitation of, all rights, powers and remedies provided at law or in equity, or under any other agreement between the Parties. All of such rights, powers and remedies shall be cumulative, and may be exercised successively or cumulatively. [Remainder of Page Intentionally Left Blank] 15 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed in duplicate by their respective duly authorized officers. ACCELER8 TECHNOLOGY CORPORATION SCHOTT JENAER GLAS GMBH By: By: ---------------------------- --------------------------------- Name: Name: -------------------------- ------------------------------- Title: Title: ------------------------- ----------------------------- By: --------------------------------- Name: ------------------------------- Title: ------------------------------ 16 APPENDIX A ---------- LIST OF ACCELR8 PATENTS AND PATENT APPLICATIONS United States Patent 7,067,194 Title: Functional Surface Coating Issuance Date: June 27, 2006 United States Patent 6,844,028 Title: Functional Surface Coating Issuance Date: January 18, 2005 United States Patent Application 200500100675 A1 Title: Functional Surface Coating Publication Date: May 12, 2005 International Application Published Under the Patent Cooperation Treaty (PCT) Title: Functional Surface Coating Publication Number: WO/2003/000433 A1 Publication Date: January 3, 2003 Application Number: PCT/US02/20408 And any national application or patent issued or derived from PCT/US02/20408, including but not limited to EP 1409155, CA 2455393 and JP2004531390. International Application Published Under the Patent Cooperation Treaty (PCT) Title: Hydroxyl Functional Surface Coating Publication Number: WO/2005/069889 A1 Publication Date: August 4, 2005 Application Number: PCT/US2005/001373 And any national application or patent issued or derived from PCT/US2005/001373. APPENDIX B ---------- SPECIFICATIONS FOR THE LICENSED PRODUCT The Licensed Product consists of: a glass microscope slide with the approximate dimensions 25 mm x 76 mm x 1 mm with an applied coating; said coating comprising an activated polymer formulation providing N-hydroxy succinimide (NHS) functional groups; said formulation comprising of: an active component comprising an NHS-activated polyethylene glycol polymer; a matrix forming component comprising polyoxyethylene sorbitan tetraoleate; and a crosslinking component comprising an azidosilane molecule. EX-10.2 3 accelr8exh102.txt EMPLOYMENT AGREEMENT Exhibit 10.2 ACCELR8 TECHNOLOGY CORPORATION EMPLOYMENT AGREEMENT WITH THOMAS V. GEIMER This Employment Agreement is made and entered into effective the 1st day of January 2008, by and between Accelr8 Technology Corporation, a Colorado corporation (the "Company"), and Thomas V. Geimer, an individual ("Executive"). RECITALS A. The Company desires to be assured of the association and services of Executive for the Company. B. Executive is willing and desires to be employed by the Company, and the Company is willing to employ Executive, upon the terms, covenants and conditions hereinafter set forth. AGREEMENT NOW, THEREFORE, in consideration of the mutual terms, covenants and conditions hereinafter set forth, the parties hereto agree as follows: 1. Employment. The Company hereby employs Executive as its Chairman of the Board of Directors, Chief Executive Officer, Chief Financial Officer, and Secretary. 2. Term. The term of this Agreement shall be for a period of five (5) years effective as of January 1, 2008, and ending on December 31, 2012 (the "Initial Term"), unless terminated earlier pursuant to Section 7 below; provided, however, that Executive's obligations in Sections 6 and 8 below shall continue in effect after such termination. This Agreement shall be automatically renewed for successive one year periods (the "Renewal Term") unless, at least 90 days prior to the expiration of the Initial Term or any Renewal Term, either party gives written notice to the other party specifically electing to terminate this Agreement at the end of the Initial Term or any such Renewal Term. 3. Compensation; Reimbursement. 3.1 Base Salary. For all services rendered by Executive under this Agreement, the Company shall pay Executive a base salary of One Hundred Sixty Five Thousand Dollars ($165,000) per year (the "Base Salary"). The Base Salary shall be payable in equal, consecutive monthly installments. Payment of the Base Salary shall be subject to the customary withholding tax and other employment taxes as required with respect to compensation paid by a corporation to an employee. It is expressly understood and agreed that the Base Salary may be increased upon the approval of the Company's Compensation Committee (if such a committee exists) or a subcommittee of the Board of Directors consisting only of members of the Board who are not employees of the Company (if a Compensation Committee does not exist). 3.2 Deferred Compensation. In addition to Executive's Base Salary provided for in Section 3.1, the Company shall contribute Seventy Five Thousand Dollars ($75,000) per year to the Company's deferred compensation plan for Executive ("Deferred Compensation"). It is expressly understood and agreed that the Deferred Compensation may be increased upon the approval of the Company's Compensation Committee (if such a committee exists) or a subcommittee of the Board of Directors consisting only of members of the Board who are not employees of the Company (if a Compensation Committee does not exist). 3.3 Deferred Salary. The Company's Compensation Committee (if such a committee exists) or a subcommittee of the Board of Directors consisting only of members of the Board who are not employees of the Company (if a Compensation Committee does not exist) may, upon 30 days written notice to the Executive, defer for up to six months up to 50% of the Executive's Base Salary and up to 50% of the Executive's Deferred Compensation (collectively the "Deferred Salary"), if it determines, in its sole and absolute discretion that the Company has insufficient cash assets and cash flow to continue to pay the full amount of the Base Salary and Deferred Compensation. The Deferred Salary shall be immediately due and payable in full, along with interest at a rate of 10% per annum on the Deferred Salary on the earlier of (i) the end of the Initial Term or any such Renewal Term of the Agreement, unless terminated earlier pursuant to Section 7 below, or (ii) at such time as the Company's Compensation Committee (if such a committee exists) or a subcommittee of the Board of Directors consisting only of members of the Board who are not employees of the Company (if a Compensation Committee does not exist) determine, in its sole and absolute discretion that the Company has sufficient cash assets and cash flow to pay the Deferred Salary. 3.4 Bonus. In addition to the Base Salary and the Deferred Compensation, the Company shall pay Executive such Bonus or Bonuses as the Company's Compensation Committee (if such a committee exists) or a subcommittee of the Board of Directors consisting only of members of the Board who are not employees of the Company (if a Compensation Committee does not exist) shall determine in their sole discretion. 3.5 Long-term Incentive Compensation. On December 11, 2007, the date this Agreement was approved by the Compensation Committee of the Company, Executive was granted 100,000 options to acquire shares of the Company's $0.001 par value common stock at a price of $3.60 per share pursuant to the Company's 2004 Omnibus Stock Option Plan (the "Stock Options"). The Stock Options shall expire at 5:00 p.m. on December 11, 2017. The Company and Executive shall enter into a separate stock option agreement to evidence the stock option grant, attached hereto as Exhibit A. 3.6 Key Man Life Insurance. In addition to the Base Salary, the Deferred Compensation, and any Bonuses, the Company shall carry key man life insurance in the amount of five million dollars ($5,000,000) on Executive's life (the "Key Man Life Insurance"). Pursuant to a resolution passed by the Compensation Committee effective November 30, 2007, Executive shall designate a beneficiary who shall be entitled to one-half of the proceeds of the Key Man Life Insurance. -2- 3.7 Additional Benefits. In addition to the Base Salary, Deferred Compensation, any Deferred Salary, Bonuses and the Key Man Life Insurance, Executive shall be entitled to all other benefits of employment provided to the employees of the Company. 3.8 Reimbursement. Executive shall be reimbursed for all reasonable "out-of-pocket" business expenses for business travel and business entertainment incurred in connection with the performance of his duties under this Agreement (1) so long as such expenses constitute business deductions from taxable income for the Company and are excludable from taxable income to Executive under the governing laws and regulations of the Internal Revenue Code (provided, however, that Executive shall be entitled to full reimbursement in any case where the Internal Revenue Service may, under Section 274(n) of the Internal Revenue Code, disallow to the Company some percentage of meals and entertainment expenses); and (2) to the extent such expenses do not exceed the amounts allocable for such expenses in budgets that are approved from time to time by the Company. The reimbursement of Executive's business expenses shall be upon monthly presentation to and approval by the Company of valid receipts and other appropriate documentation for such expenses. 4. Scope of Duties. 4.1 Assignment of Duties. Executive shall have such duties as may be assigned to him from time to time by the Company's Board of Directors commensurate with his experience and responsibilities in the positions for which he is employed pursuant to Section 1 above. Such duties shall be exercised subject to the control and supervision of the Board of Directors of the Company. 4.2 General Specification of Duties. Executive's duties shall include, but not be limited to those duties that are generally associated with the positions of Chairman of the Board of Directors, Chief Executive Officer, Chief Financial Officer and Secretary of a company similarly situated to the Company, and as such duties and responsibilities are more particularly described in the Company's Bylaws. The foregoing specifications are not intended as a complete itemization of the duties which Executive shall perform and undertake on behalf of the Company in satisfaction of his employment obligations under this Agreement. 4.3 Executive's Devotion of Time. Executive hereby agrees to devote his full time abilities and energy to the faithful performance of the duties assigned to him and to the promotion and forwarding of the business affairs of the Company, and not to divert any business opportunities from the Company to himself or to any other person or business entity. 4.4 Conflicting Activities. (a) Executive may, during the Initial Term or any Renewal Term of this Agreement, be engaged in other business activities without the prior consent of the Board of Directors of the Company; provided, however, that Executive may not compete directly with the Company. Further, nothing in this Agreement shall be -3- construed as preventing Executive from investing his personal assets in passive investments in business entities which are not in competition with the Company or its affiliates, or from pursuing business opportunities as permitted by Section 4.4(b). (b) Executive hereby agrees to promote and develop all business opportunities that come to his attention relating to current or anticipated future business of the Company, in a manner consistent with the best interests of the Company and with his duties under this Agreement. Should Executive discover a business opportunity that does not relate to the current or anticipated future business of the Company, he shall first offer such opportunity to the Company. Should the Board of Directors of the Company not exercise its right to pursue this business opportunity within a reasonable period of time, not to exceed sixty (60) days, then Executive may develop the business opportunity for himself; provided, however, that such development may in no way conflict or interfere with the duties owed by Executive to the Company under this Agreement. Further, Executive may develop such business opportunities only on his own time, and may not use any service, personnel, equipment, supplies, facility or trade secrets of the Company in their development. As used herein, the term "business opportunity" shall not include business opportunities involving investment in publicly traded stocks, bonds or other securities, or other investments of a personal nature. 5. Change of Control. If any time during the Initial Term or any Renewal Term of this Agreement there is a change of control of the Company, as defined below, and Executive's employment is terminated by the Company under Section 7.1(a), (b), (d) or (e) within the greater of one (1) year following the change of control or the remaining term of this Agreement (the "Change of Control Date"), the Company shall pay to Executive (a) the balance of all amounts due from the Change of Control Date until the end of the Initial Term or such Renewal Term, including Deferred Compensation and any Deferred Salary due under this Agreement plus (b) an amount equal to five times the sum of (i) his annual Base Salary as in effect on the date of termination plus (ii) the amount of $75,000 in recognition of Deferred Compensation payments made on behalf of Executive, and (c) any other amounts due to Executive under any other provision of this Agreement. This amount shall be paid to Executive in one lump sum as soon as practicable, but in no event later than one hundred twenty (120) days, after the date that Executive's employment is terminated. In addition to the lump sum payment referenced in the preceding sentence, the Company shall pay to Executive any accrued and unpaid Bonuses as provided for in Section 3.4 at the same time as the lump sum payment is made. For example, if the Change of Control Date was January 1, 2008, the amount paid to would be equal to $2,400,000 ([$165,000 (Base Salary) + $75,000 (Deferred Compensation) X 5 (years remaining on contract)] + [$165,000 (base salary) + $75,000 (deferred compensation) X 5]). For purposes of this subsection, a change of control shall mean the occurrence of one or more of the following three events: (1) After the effective date of this Agreement, any person becomes a beneficial owner (as such term is defined in Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended) directly or indirectly of securities representing 33% or more of the total number of votes that may be cast for the election of directors of the Company; (2) Within two years after a merger, consolidation, liquidation or sale of assets involving the Company, or a contested election of a Company director, or any combination of the foregoing, the individuals who were directors of the Company immediately prior thereto shall cease to constitute a majority of the Board; or -4- (3) Within two years after a tender offer or exchange offer for voting securities of the Company, the individuals who were directors of the Company immediately prior thereto shall cease to constitute a majority of the Board. 6. Confidentiality of Trade Secrets and Other Materials. 6.1 Executive acknowledges that in his employment hereunder, he will be making use of, acquiring and adding to the Company's trade secrets and its confidential and proprietary information of a special and unique nature and value relating to such matters as, but not limited to, the Company's business operations, manufacturing processes, manufacturing techniques, manufacturing methods, manufacturing technology, internal structure, financial affairs, programs, software, systems, procedures, manuals, confidential reports, lists of clients and prospective clients and sales and marketing methods, as well as the amount, nature and type of services, equipment and methods used and preferred by the Company's clients and the fees paid by such clients, all of which shall be deemed to be confidential information. Executive acknowledges that such confidential information has been and will continue to be of central importance to the business of the Company and that disclosure of it to or its use by others could cause substantial loss to the Company. In consideration of employment by the Company, Executive agrees that during the term of this Agreement and any renewal or extension of his employment by the Company and upon and after leaving the employ of the Company for any reason whatsoever, Executive shall not, for any purpose whatsoever, directly or indirectly, divulge or disclose to any person or entity any of such confidential information which was obtained by the Executive as a result of Executive's employment with the Company or any trade secrets of the Company, but shall hold all of the same confidential and inviolate. 6.2 All contracts, agreements, financial books, records, instruments and documents; client lists; memoranda; data; reports; programs; software; tapes; rolodexes; telephone and address books; letters; research; card decks; listings; programming; and any other instruments, records or documents relating or pertaining to clients serviced by the Company or the Executive, the services rendered by the Executive, or the business of the Company (collectively, the "Records") shall at all times be and remain the property of the Company. Upon termination of this Agreement and the Executive's employment under this Agreement for any reason whatsoever, Executive shall return to the Company all Records (whether furnished by the Company or prepared by the Executive), and Executive shall neither make nor retain any copies of any of such Records after such termination. 6.3 All inventions and other creations, whether or not patentable or copyrightable, made or conceived in whole or in part by Executive while employed by the Company and within eighteen months thereafter, which relate directly to the business, existing or proposed, of the Company or any other business or research or development effort in which the Company or any of its subsidiaries or affiliates engages during Executive's employment by the Company will be disclosed promptly by Executive to the Company and shall be the sole and exclusive property of the Company. All copyrightable works created by Executive and covered by this Section 6.3 shall be deemed to be works for hire. Executive shall cooperate with the Company in patenting or copyrighting all such -5- inventions and other creative works, shall execute, acknowledge, seal and deliver all documents tendered by the Company to evidence its ownership thereof throughout the world, and shall cooperate with the Company in obtaining, defending, and enforcing its rights therein. 7. Termination. 7.1 Bases for Termination. (a) Executive's employment hereunder may be terminated at any time by mutual agreement of the parties. (b) This Agreement shall automatically terminate on the last day of the month in which Executive dies or becomes permanently incapacitated. "Permanent incapacity" as used herein shall mean mental or physical incapacity, or both, reasonably determined by the Company's Board of Directors based upon a certification of such incapacity by, in the discretion of the Company's Board of Directors, either Executive's regularly attending physician or a duly licensed physician selected by the Company's Board of Directors, rendering Executive unable to perform substantially all of his duties hereunder and which appears reasonably certain to continue for at least six consecutive months without substantial improvement. Executive shall be deemed to have "become permanently incapacitated" on the date the Company's Board of Directors has determined that Executive is permanently incapacitated and so notifies Executive. (c) Executive's employment may be terminated by the Company "with cause," effective upon delivery of written notice to Executive given at any time (without any necessity for prior notice) if any of the following shall occur: (1) any action by Executive which would be grounds for termination under applicable law (currently covering any willful breach of duty, and habitual neglect of duty); (2) any material breach of Executive's obligations in Sections 4 or 6 above, other than any such breach resulting from "Permanent incapacity"; or (3) any material acts or events which inhibit Executive from fully performing his responsibilities to the Company in good faith, such as (i) a felony criminal conviction; (ii) any other criminal conviction involving Executive's lack of honesty or Executive's moral turpitude; (iii) drug or alcohol abuse; or (iv) acts of dishonesty, gross carelessness or gross misconduct. (d) Executive's employment may be terminated by the Company "without cause" (for any reason or no reason at all) at any time by giving Executive 60 days prior written notice of termination, which termination shall be effective on the 60th day following such notice. If Executive's employment under this Agreement is so terminated, the Company shall (i) make a lump sum cash payment to Executive within 10 days after termination is effective of an amount equal to (1) Executive's Base Salary accrued to the date of termination; (2) unreimbursed expenses accrued to the date of termination; (3) an amount equal to the greater -6- of (a) Executive's annual Base Salary (i.e., 12 months of Base Salary), or (b) amounts remaining due to Executive as Base Salary (assuming that payments under this Agreement were made until expiration of the Initial Term or if applicable the Renewal Term), and (4) any other amounts due to Executive under any other provision of this Agreement. For purposes of this provision, Executive's annual Base Salary and the remaining portion of the term of the Agreement shall be calculated as of the termination date. After the Company's termination of Executive under this provision, the Company shall not be obligated to provide the benefits to Executive described in Section 3 (except as may be required by law). In addition to the lump sum payment referenced in the preceding sentence, the Company shall pay to Executive the Bonus provided for in Section 3.4 based upon the number of days in the year that Executive was employed by the Company, within one hundred five days after the end of the fiscal year in which Executive was terminated. (e) Executive may terminate his employment hereunder by giving the Company 60 days prior written notice, which termination shall be effective on the 60th day following such notice. 7.2 Payment Upon Termination. Upon termination under Sections 7.1(a), (b), (c) or (e), the Company shall pay to Executive within 10 days after termination an amount equal to the sum of (1) Executive's Base Salary accrued to the date of termination; (2) unreimbursed expenses accrued to the date of termination, and (3) any other amounts due to Executive under any other provision of this Agreement. Except for the foregoing compensation then due and owing and the compensation provided for in Section 8.1(d), the Company shall not be obligated to compensate Executive, his estate or representatives after any such termination. Further, Executive shall not be entitled to any of the benefits described in Section 3 (except as provided by law) after such termination. 7.3 Dismissal from Premises. At the Company's option, Executive shall immediately leave the Company's premises on the date notice of termination is given by either Executive or the Company. 8. Restrictive Covenants. 8.1 The Company and Executive acknowledge and agree that Executive's services are of a special and unusual character which have a unique value to the Company, the loss of which cannot be adequately compensated by damages in an action at law and if used in competition with the Company could cause serious harm to the Company. Further, Executive and the Company also recognize that an important part of Executive's duties will be to develop good will for the Company through his personal contact with customers, agents and others having business relationships with the Company, and that there is a danger that this good will, a proprietary asset of the Company, may follow Executive if and when his relationship with the Company is terminated. Accordingly, Executive covenants that for a period of eighteen months after Executive ceases to be employed by the Company for any reason whatsoever, Executive shall not, within the United States of America, without the prior written consent of the Company, directly or indirectly: (a) Offer to render any services or solicit the rendition of any services which were rendered by the Company during the two year period immediately preceding such cessation of Executive's employment with the Company to any -7- clients, customers or accounts of the Company who were such at any time during such two year period to or for the benefit or account of Executive or to or for the benefit or account of any other person or entity. (b) Render or attempt to render any services which were rendered by the Company during the two year period immediately preceding such cessation of Executive's employment with the Company to any clients, customers or accounts of the Company who were such at any time during such two year period to or for the benefit or account of Executive or to or for the benefit or account of any other person or entity. (c) Solicit for employment or employ to or for the benefit or account of Executive or to or for the benefit or account of any other person or entity any employee of the Company, nor shall Executive urge, directly or indirectly, any client or referrer of clients, customers, or accounts of the Company to discontinue, in whole or in part, business with the Company or not to do business with the Company. For purposes of this Section 8.1(c) of this Agreement, the term "referrer of clients" shall mean any person or entity who or which referred a client, customer or account to the Company at any time prior to such cessation of Executive's employment with the Company. (d) Engage, either as a consultant, independent contractor, proprietor, stockholder, partner, officer, director, employee or otherwise, in any business which (i) designs, sells, or competes in the surface chemistry and quantitative instruments industry, or the DNA/RNA assays, protein-based assays and biosensors industries, (ii) is developing and/or commercializing a diagnostic product intended for rapid diagnosis in life-threatening bacterial infections, or (iii) any business that otherwise competes with the Company in any state of the United States or in any foreign country, in each such case where the Company sold, licensed or otherwise its products or related services at any time during the two year period immediately preceding such cessation of Executive's employment with the Company. The Company and the Executive agree that the Company may elect to either enforce or waive this Section 8.1(d); provided however, that if the Company elects to enforce this Section 8.1(d), then subject to the provisions of the immediately following sentence, the Company agrees to pay Executive on a monthly basis an amount equal to his monthly Base Salary at the time of termination for each month that the Company elects to keep this provision in effect. It is expressly understood and agreed that if Executive is paid any amounts pursuant to Section 7.1(d), then the provisions of this Section 8.1(d) shall remain in full force and effect without the Company being obligated to make the additional payments contemplated in the immediately preceding sentence. 8.2 The parties hereto agree that to the extent that any provision or portion of Section 8.1 of this Agreement shall be held, found or deemed to be unreasonable, unlawful or unenforceable by a court of competent jurisdiction, then any such provision or portion thereof shall be deemed to be modified to the extent necessary in order that any such provision or portion thereof shall be legally enforceable to the fullest extent permitted by applicable law; and the parties hereto do further agree that any court of competent jurisdiction shall, and the parties hereto do hereby expressly authorize, request and empower any court of competent jurisdiction to, enforce any such provision or portion thereof or to modify any such provision or portion thereof in order that any such provision or portion thereof shall be enforced by such court to the fullest extent permitted by applicable law. -8- 8.3 The provisions of Sections 8.1(a), 8.1(b), 8.1(c) and 8.1(d) of this Agreement are cumulative. Compliance with Sections 8.1(a), 8.1(b), 8.1(c) and 8.1(d) of this Agreement is a condition precedent to the Company's obligation to make any payments of any nature to Executive, whether under this Agreement or otherwise. Nothing in this Agreement shall be construed as prohibiting the Company from pursuing any other remedies available to it for a breach or threatened breach of Sections 6 and 8 of this Agreement. 8.4 As used in this Section 8, "clients", "customers" and "accounts" shall include any person or entity that, directly or indirectly, through one or more intermediaries, controls or is controlled by, or is under common control with, any such "clients", "customers" or "accounts." 9 Injunctive Relief. The Company and Executive hereby acknowledge and agree that any violation of the provisions of Sections 6 or 8 hereunder will cause irreparable injury to the Company and there is no adequate remedy at law for such violation. Accordingly, in addition to any other relief to which the Company may be entitled, the Company shall be entitled to such injunctive relief as may be ordered by any court of competent jurisdiction including, but not limited to, an injunction restraining any violation of Sections 6 or 8 above without the proof of actual damages. 10. Miscellaneous. 10.1 Transfer and Assignment. This Agreement is personal as to Executive and shall not be assigned or transferred by Executive without the prior written consent of the Company. This Agreement shall be binding upon and inure to the benefit of all of the parties hereto and their respective permitted heirs, personal representatives, successors and assigns. 10.2 Severability. Nothing contained herein shall be construed to require the commission of any act contrary to law. Should there be any conflict between any provisions hereof and any present or future statute, law, ordinance, regulation or other pronouncement having the force of law, the latter shall prevail, but the provision of this Agreement affected thereby shall be curtailed and limited only to the extent necessary to bring it within the requirements of the law, and the remaining provisions of this Agreement shall remain in full force and effect. 10.3 Governing Law. This Agreement is made under and shall be construed pursuant to the laws of the State of Colorado. 10.4 Counterparts. This Agreement may be executed in several counterparts and all documents so executed shall constitute one agreement, binding on all of the parties hereto, notwithstanding that all of the parties did not sign the original or the same counterparts. Facsimile signatures shall be deemed valid and binding. 10.5 Entire Agreement. This Agreement constitutes the entire agreement and understanding of the parties with respect to the subject matter hereof and supersedes all prior oral or written agreements, arrangements and understandings with respect thereto. No representation, promise, inducement, statement or intention has been made by any party hereto that is not embodied herein, and no party shall be bound by or liable for any alleged representation, promise, inducement or statement not so set forth herein. -9- 10.6 Modification. This Agreement may be modified, amended, superseded or cancelled, and any of the terms, covenants, representations, warranties or conditions hereof may be waived, only by a written instrument executed by the party or parties to be bound by any such modification, amendment, supersession, cancellation or waiver. 10.7 Attorneys' Fees and Costs. In the event of any dispute arising out of the subject matter of this Agreement, the prevailing party shall recover, in addition to any other damages assessed, its attorneys' fees and court costs incurred in litigating or otherwise settling or resolving such dispute whether or not an action is brought or prosecuted to judgment. In construing this Agreement, none of the parties hereto shall have any term or provision construed against such party solely by reason of such party having drafted the same. 10.8 Waiver. The waiver by either of the parties, express or implied, of any right under this Agreement or any failure to perform under this Agreement by the other party, shall not constitute or be deemed as a waiver of any other right under this Agreement or of any other failure to perform under this Agreement by the other party, whether of a similar or dissimilar nature. 10.9 Cumulative Remedies. Each and all of the several rights and remedies provided in this Agreement, or by law or in equity, shall be cumulative, and no one of them shall be exclusive of any other right or remedy, and the exercise of any one or such rights or remedies shall not be deemed a waiver of, or an election to exercise, any other such right or remedy. 10.10 Headings. The section and other headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning and interpretation of this Agreement. 10.11 Notices. Any notice under this Agreement must be in writing, may be telecopied provided that evidence of the transmission and receipt is created at the time of transmission, sent by express 24-hour guaranteed courier, or hand-delivered, or may be served by depositing the same in the United States mail, addressed to the party to be notified, postage-prepaid and registered or certified with a return receipt requested. The addresses of the parties for the receipt of notice shall be as follows: If to the Company: Accelr8 Technology Corporation 7000 North Broadway, Building 3-307 Denver, CO 80221 If to Executive: Thomas V. Geimer 7000 North Broadway, Building 3-307 Denver, CO 80221 Each notice given by registered or certified mail shall be deemed delivered and effective on the date of delivery as shown on the return receipt, and each notice delivered in any other manner shall be deemed to be effective as of the -10- time of actual delivery thereof. Each party may change its address for notice by giving notice thereof in the manner provided above. 10.12 Survival. Any provision of this Agreement which imposes an obligation after termination or expiration of this Agreement shall survive the termination or expiration of this Agreement and be binding on Executive and the Company. 10.13 Withholdings. Not withstanding any other provision of this Agreement, the Company may withhold from any amounts payable or benefits provided to Executive under this Agreement any Federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation. 10.14 Effective Date. This Agreement shall become effective as of the date set forth on page 1 when signed by Executive and the Company. [REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY] -11- IN WITNESS WHEREOF, the parties hereto have caused this Employment Agreement to be executed as of the date first set forth above. THOMAS V. GEIMER ACCELR8 TECHNOLOGY CORPORATION /s/ By: /s/ - -------------------------------- --------------------------------------- A. Alexander Arnold III, Director and Member of the Compensation Committee By: /s/ --------------------------------------- Charles E. Gerretson, Director and Member of the Compensation Committee -12- EXHIBIT A STOCK OPTION AGREEMENT -13- EX-31.1 4 accelr810312007exh311.txt RULE 13A-14(A)/15D-14(A) CERTIFICATIONS EXHIBIT 31.1 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the accompanying Quarterly Report on Form 10-QSB of Accelr8 Technology Corporation (the "Company") for the quarter ended October 31, 2007, as filed with the Securities and Exchange Commission on the date hereof, the undersigned, in the capacity and date indicated below, hereby certifies that: 1. I have reviewed this quarterly report on Form 10-QSB of Accelr8 Technology Corporation; 2. Based on my knowledge, this quarterly 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 quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this quarterly report; 4. The Company's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Company 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 Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly 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 Company's 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 Company's internal control over financial reporting that occurred during the Company's most recent fiscal quarter (the Company's fourth fiscal quarter in the case of an quarterly report) that has materially affected or is reasonably likely to materially affect, the Company's internal control over financial reporting; and 5. The Company's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and the audit committee of Company's 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 Company's 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 Company's internal control over financial reporting. Dated: December 17, 2007 /s/ Thomas V. Geimer - --------------------- Thomas V. Geimer, Chief Executive Officer and Chief Financial Officer EX-31.2 5 accelr810312007exh312.txt RULE 13A-14(A)/15D-14(A) CERTIFICATIONS EXHIBIT 31.2 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the accompanying Quarterly Report on Form 10-QSB of Accelr8 Technology Corporation (the "Company") for the quarter ended October 31, 2007, as filed with the Securities and Exchange Commission on the date hereof, the undersigned, in the capacity and date indicated below, hereby certifies that: 1. I have reviewed this quarterly report on Form 10-QSB of Accelr8 Technology Corporation; 2. Based on my knowledge, this quarterly 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 quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this quarterly report; 4. The Company's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Company 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 Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly 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 Company's 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 Company's internal control over financial reporting that occurred during the Company's most recent fiscal quarter (the Company's fourth fiscal quarter in the case of an quarterly report) that has materially affected or is reasonably likely to materially affect, the Company's internal control over financial reporting; and 5. The Company's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and the audit committee of Company's 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 Company's 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 Company's internal control over financial reporting. Dated: December 17, 2007 /s/ Bruce H. McDonald - ---------------------- Bruce H. McDonald, Principal Accounting Officer EX-32.1 6 accelr810312007exh321.txt SECTION 1350 CERTIFICATIONS EXHIBIT 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code, each of the undersigned officer(s) of Accelr8 Technology Corporation, a Colorado corporation (the "Corporation"), does hereby certify, to such officer's knowledge, that: The Quarterly Report on Form 10-QSB for the quarter ended October 31, 2007 (the "Form 10-QSB") of the Corporation fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and information contained in the Form 10-QSB fairly presents, in all material respects, the financial condition and results of operations of the Corporation. Dated: December 17, 2007 /s/ Thomas V. Geimer - --------------------- Thomas V. Geimer, Chief Executive Officer and Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----