R
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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£
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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58-1642740
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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11726 San Vicente Blvd., Suite 650
Los Angeles, CA
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90049
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer £
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Accelerated filer R
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Non-accelerated filer £
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Smaller reporting company £
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(Do not check if a smaller reporting company)
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Page
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PART I. — FINANCIAL INFORMATION
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Item 1.Financial Statements
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1
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Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations
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8
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Item 3.Quantitative and Qualitative Disclosures About Market Risk
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13
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Item 4.Controls and Procedures
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13
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PART II. — OTHER INFORMATION
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Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
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13
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Item 5.Other Information
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14
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Item 6.Exhibits
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14
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SIGNATURES
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15
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INDEX TO EXHIBITS
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16
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June 30, 2013
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December 31, 2012
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||||||
ASSETS
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||||||||
Current assets:
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||||||||
Cash and cash equivalents
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$ | 10,980,486 | $ | 14,344,088 | ||||
Short-term investments
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17,000,000 | 24,000,000 | ||||||
Receivables
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211,626 | 109,802 | ||||||
Interest receivable
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56,451 | 26,517 | ||||||
Prepaid expenses and other current assets
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580,904 | 1,212,041 | ||||||
Total current assets
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28,829,467 | 39,692,448 | ||||||
Equipment and furnishings, net
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199,580 | 253,277 | ||||||
Goodwill
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183,780 | 183,780 | ||||||
Other assets
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102,271 | 102,271 | ||||||
Total assets
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$ | 29,315,098 | $ | 40,231,776 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
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||||||||
Current liabilities:
Accounts payable
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$ | 2,783,894 | $ | 3,060,516 | ||||
Accrued expenses and other current liabilities
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2,811,770 | 3,033,189 | ||||||
Warrant liabilities
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3,133,743 | 3,972,230 | ||||||
Total current liabilities
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8,729,407 | 10,065,935 | ||||||
Commitments and contingencies
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||||||||
Stockholders’ equity
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||||||||
Preferred Stock, $.01 par value, 5,000,000 shares authorized, including 25,000 shares of Series A Junior Participating Preferred Stock; no shares issued and outstanding
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— | — | ||||||
Common stock, $.001 par value, 250,000,000 shares authorized; 30,608,392 shares issued and outstanding at June 30, 2013 and 30,607,916 at December 31, 2012
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30,609 | 30,608 | ||||||
Additional paid-in capital
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262,082,318 | 261,318,638 | ||||||
Treasury stock, at cost (118,836 shares at June 30, 2013 and 90,546 at December 31, 2012)
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(2,335,818 | ) | (2,279,238 | ) | ||||
Accumulated deficit
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(239,191,418 | ) | (228,904,167 | ) | ||||
Total stockholders’ equity
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20,585,691 | 30,165,841 | ||||||
Total liabilities and stockholders’ equity
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$ | 29,315,098 | $ | 40,231,776 |
Three Months Ended June 30,
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Six Months Ended June 30,
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|||||||||||||||
2013
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2012
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2013
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2012
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|||||||||||||
Revenue:
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||||||||||||||||
License revenue
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$ | 200,000 | $ | — | $ | 200,000 | $ | — | ||||||||
Expenses:
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||||||||||||||||
Research and development
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4,626,244 | 2,686,465 | 7,815,003 | 7,087,980 | ||||||||||||
General and administrative
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1,970,930 | 2,091,856 | 3,788,255 | 4,006,572 | ||||||||||||
6,597,174 | 4,778,321 | 11,603,258 | 11,094,552 | |||||||||||||
Loss before other income (loss)
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(6,397,174 | ) | (4,778,321 | ) | (11,403,258 | ) | (11,094,552 | ) | ||||||||
Other income (loss):
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||||||||||||||||
Interest income
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35,564 | 27,547 | 75,822 | 63,005 | ||||||||||||
Other income, net
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4,761 | 16,491 | 201,698 | 50,551 | ||||||||||||
Gain (loss) on warrant derivative liability
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2,933,707 | (8,528,192 | ) | 838,487 | (12,416,358 | ) | ||||||||||
Net loss
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$ | (3,423,142 | ) | $ | (13,262,475 | ) | $ | (10,287,251 | ) | $ | (23,397,354 | ) | ||||
Basic and diluted net loss per share
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$ | (0.11 | ) | $ | (0.63 | ) | $ | (0.34 | ) | $ | (1.10 | ) | ||||
Basic and diluted weighted average shares outstanding
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30,418,435 | 21,204,499 | 30,417,906 | 21,203,754 | ||||||||||||
Six Months Ended June 30,
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2013
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2012
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||||||
Cash flows from operating activities:
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||||||||
Net loss
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$ | (10,287,251 | ) | $ | (23,397,354 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities:
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||||||||
Depreciation and amortization
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59,226 | 52,875 | ||||||
Retirement of fixed assets
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— | 4,360 | ||||||
Stock compensation and warrant expense
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762,748 | 858,937 | ||||||
Fair value adjustment on warrant liability
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(838,487 | ) | 12,416,358 | |||||
Net foreign exchange gain
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(138,709 | ) | — | |||||
Changes in assets and liabilities:
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||||||||
Receivables
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(101,824 | ) | 154,946 | |||||
Interest receivable
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(29,934 | ) | 19,105 | |||||
Prepaid expenses and other current assets
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631,137 | 102,323 | ||||||
Accounts payable
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(278,151 | ) | 93,663 | |||||
Accrued expenses and other current liabilities
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(139,290 | ) | 616,083 | |||||
Net cash used in operating activities
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(10,360,535 | ) | (9,078,704 | ) | ||||
Cash flows from investing activities:
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||||||||
Proceeds from sale of short-term investments
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7,000,000 | 2,989,902 | ||||||
Purchases of equipment and furnishings
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(4,000 | ) | (47,979 | ) | ||||
Net cash provided by investing activities
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6,996,000 | 2,941,923 | ||||||
Cash flows from financing activities:
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Net proceeds from exercise of stock options
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933 | 7,200 | ||||||
Net cash provided by financing activities
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933 | 7,200 | ||||||
Net decrease in cash and cash equivalents
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(3,363,602 | ) | (6,129,581 | ) | ||||
Cash and cash equivalents at beginning of period
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14,344,088 | 17,988,590 | ||||||
Cash and cash equivalents at end of period
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$ | 10,980,486 | $ | 11,859,009 | ||||
Supplemental disclosure of cash flow information:
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Equipment and furnishings purchased on credit
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$ | 1,529 | $ | 64,022 | ||||
Repurchase of Company’s own stock for treasury
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$ | 56,580 | — | |||||
Cash paid for income taxes
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$ | 5,600 | $ | 82,110 | ||||
Six Months Ended June 30,
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2013
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2012
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Risk-free interest rate
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0.63 | % | 0.54 | % | ||||
Expected dividend yield
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0 | % | 0 | % | ||||
Expected lives
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2.96 | 3.90 | ||||||
Expected volatility
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67.3 | % | 86.3 | % | ||||
Warrants classified as liabilities
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$ | 3,133,743 | $ | 19,155,292 | ||||
Gain (loss) on warrant liabilities
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$ | 838,487 | $ | (12,416,358) |
Three Months Ended June 30,
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Six Months Ended June 30,
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2013
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2012
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2013
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2012
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Research and development — employee
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$ | 53,583 | $ | 98,242 | $ | 103,755 | $ | 193,366 | ||||||||
General and administrative — employee
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202,589 | 263,007 | 387,229 | 437,079 | ||||||||||||
Total employee stock-based compensation
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$ | 256,172 | $ | 361,249 | $ | 490,984 | $ | 630,445 | ||||||||
Research and development — non-employee
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$ | — | $ | — | $ | — | $ | — | ||||||||
General and administrative — non-employee
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152,074 | 176,074 | 179,286 | 228,492 | ||||||||||||
Total non-employee stock-based compensation
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$ | 152,074 | $ | 176,074 | $ | 179,286 | $ | 228,492 |
Six Months Ended June 30, 2013
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Six Months Ended June 30, 2012
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Risk-free interest rate
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1.11 | % | 1.54 | % | ||||
Expected volatility
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85.2% - 85.8 | % | 89.7% - 97.7 | % | ||||
Expected lives (years)
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6 | 6 - 10 | ||||||
Expected dividend yield
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0.00 | % | 0.00 | % |
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Six Months Ended June 30, 2013
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Number of Options (Employees)
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Number of Options (Non-Employees)
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Total Number of Options
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Weighted-Average Exercise Price
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Outstanding at January 1, 2013
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3,240,850 | 142,143 | 3,382,993 | $ | 4.17 | |||||||||||
Granted
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92,176 | 25,000 | 117,176 | $ | 2.52 | |||||||||||
Exercised
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(476 | ) | — | (476 | ) | $ | 1.96 | |||||||||
Forfeited or expired
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(103,716 | ) | — | (103,716 | ) | $ | 3.08 | |||||||||
Outstanding at June 30, 2013
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3,228,834 | 167,143 | 3,395,977 | $ | 4.15 | |||||||||||
Options exercisable at June 30, 2013
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2,159,480 | 149,881 | 2,309,361 | $ | 5.10 |
Number of Options (Employees)
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Number of Options (Non-Employees)
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Total Number of Options
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Weighted-Average Grant Date Fair Value per Share
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Non-vested at January 1, 2013
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1,322,389 | 8,929 | 1,331,318 | $ | 1.69 | |||||||||||
Granted
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92,176 | 25,000 | 117,176 | $ | 1.80 | |||||||||||
Forfeited or expired
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(103,716 | ) | — | (103,716 | ) | $ | 2.32 | |||||||||
Vested
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(241,495 | ) | (16,667 | ) | (258,162 | ) | $ | 3.68 | ||||||||
Non-vested at June 30, 2013
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1,069,354 | 17,262 | 1,086,616 | $ | 1.67 |
Range of Exercise Prices
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Number of Options
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Weighted-Average Remaining Contractual Life (years)
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Weighted-Average Exercise Price
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Number of Options Exercisable
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Weighted-Average Contractual Life
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Weighted-Average Exercise Price
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$ | 1.83 - 3.00 | 2,143,069 | 8.99 | $ | 1.99 | 1,100,587 | 8.99 | $ | 2.04 | |||||||||||||||||
$ | 3.01 –7.00 | 178,512 | 4.77 | $ | 5.24 | 176,036 | 4.77 | $ | 5.26 | |||||||||||||||||
$ | 7.01 –8.50 | 942,110 | 4.63 | $ | 7.66 | 900,452 | 4.63 | $ | 7.68 | |||||||||||||||||
$ | 8.51 – 32.55 | 132,286 | 1.33 | $ | 12.75 | 132,286 | 1.33 | $ | 12.75 | |||||||||||||||||
3,395,977 | 7.26 | $ | 4.15 | 2,309,361 | 7.26 | $ | 5.10 |
(In thousands)
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Level I
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Level II
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Level III
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Total
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Cash equivalents
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$ | 10,384 | $ | — | $ | — | $ | 10,384 | ||||||||
Short-term investments
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17,000 | — | — | 17,000 | ||||||||||||
Warrant liability
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— | — | 3,134 | 3,134 |
(In thousands)
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Level I
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Level II
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Level III
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Total
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Cash equivalents
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$ | 13,188 | $ | — | $ | — | $ | 13,188 | ||||||||
Short-term investments
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24,000 | — | — | 24,000 | ||||||||||||
Warrant liabilities
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— | — | 3,972 | 3,972 |
Three-Month Period Ended June 30,
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Six-Month Period Ended June 30,
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|||||||||||||||
2013
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2012
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2013
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2012
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(In thousands)
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(In thousands)
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Research and development expenses
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$ | 4,517 | $ | 2,582 | $ | 7,601 | $ | 6,885 | ||||||||
Employee stock option expense
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100 | 98 | 196 | 193 | ||||||||||||
Depreciation and amortization
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9 | 6 | 18 | 10 | ||||||||||||
$ | 4,626 | $ | 2,686 | $ | 7,815 | $ | 7,088 |
Three-Month Period Ended June 30,
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Six-Month Period Ended June 30,
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2013
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2012
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2013
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2012
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(In thousands)
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(In thousands)
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General and administrative expenses
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$ | 1,597 | $ | 1,633 | $ | 3,181 | $ | 3,299 | ||||||||
Non-cash general and administrative expenses
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152 | 176 | 179 | 228 | ||||||||||||
Employee stock option expense
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202 | 263 | 387 | 437 | ||||||||||||
Depreciation and amortization
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20 | 20 | 41 | 43 | ||||||||||||
$ | 1,971 | $ | 2,092 | $ | 3,788 | $ | 4,007 |
CytRx Corporation
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Date: August 6, 2013
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By:
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/s/ JOHN Y. CALOZ
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John Y. Caloz
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Chief Financial Officer
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Exhibit
Number
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Description
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10.1
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Investment Banking Agreement dated August 5, 2013, between CytRx Corporation and Legend Securities, Inc.
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31.1
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Certification of Chief Executive Officer Pursuant to 17 CFR 240.13a-14(a)
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31.2
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Certification of Chief Financial Officer Pursuant to 17 CFR 240.13a-14(a)
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32.1
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Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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32.2
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Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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101.INS
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XBRL Instance Document
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101.SCH
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XBRL Schema Document
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101.CAL
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XBRL Calculation Linkbase Document
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101.DEF
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XBRL Definition Linkbase Document
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101.LAB
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XBRL Label Linkbase Document
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101.PRE
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XBRL Presentation Linkbase Document
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1.
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The Agreement shall be effective as of the date it is executed by the Parties (the “Effective Date”).
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2.
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The Company agrees to provide Legend such information, hisptorical financial data, projections, proformas, business plans, due dilligence documentation, and other information (collectively the “Information”) in the possession of the Company that Legend may reasonably request or require to perform the Services (as hereinafter defined) set forth herein. The Information provided by the Company to Legend shall be true, complete and accurate in all material respects as of the date specified therein and shall not set forth any untrue statements nor omit and fact required or necessary to make the Information provided not misleading; provided that Legend acknowledges and agrees that the Company shall not provide any information that the Company deems to be confidential. The Company authorizes Legend to use such Information soley in connection with its performance of the Services.
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3.
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Legend will use its best efforts to furnish ongoing investor awareness and business advisory services (the “Services”) as the Company may from time to time reasonably request the Services shall include, without limitation, the following:
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Ø
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Assistance with investor presentations such as, but not limited to, PowerPoint slide presentations, broker/dealer fact sheets, financial projections and budgets;
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Ø
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Sponsorship to capital conferences;
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Ø
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Identification and evaluation of financing transactions;
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Ø
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Identification and evaluation of acquisition and/or merger candidates;
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Ø
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Introductions to broker/dealers, research analysts, and investment companies that Legend believes could be helpful to the Company, including expanded introductions to broker/dealers, analysts and potential investors in regions outside of the New York area;
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Ø
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Arranging meetings between CytRx management and broker/dealers, research analysts, and investment companies in coordination with the Company’s management’s travel schedule;
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Ø
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Providing the CEO of the Company a detailed report, no less frequently than once every two months, substantiating Legend’s activities conducted pursuant to this Agreement during the preceding period.
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4.
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The term of this Agreement shall be twenty-four (24) months from the Effective Date of this Agreement; provided that the Company may, in its sole discretion, extend the Term for up to an additional six (6) months by providing notice of such extension to Legend at any time prior to the expiration of this Agreement (such period, as it may be extended pursuant to this sentence, the "Term"), and the additional compensation owed to Legend during any such extension shall be the Monthly Advisory Fee described hi Section 5. Except as set forth in this paragraph, the Agreement may not be terminated by the Parties other than as a result of a material breach of any provision of this agreement that is not cured within ten (10) days following notification thereof by the non-breaching party.
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5.
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In consideration for the services described herein, the Company shall pay to Legend a monthly advisory fee of thirty thousand dollars ($30,000.00) per month (the "Monthly Advisory Fee"). The first month advisory fee shall be paid to Legend on the Effective Date and thereafter no later than the fifteenth (15th) day of each monthly anniversary of the Effective Date during the Term of this Agreement; provided that no fee shall be payable if Legend is in default of its obligations to deliver the report to the Company’s CEO described in Section 3 above unless and until such report is delivered. The Monthly Advisory Fee shall be earned and payable each month and may not be deferred by the Company unless the Company submits a written request to the Legend and Legend approves such request in writing. The Monthly Advisory Fee shall be mailed to Legend at the following address:
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6.
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Simultaneously with the execution of this Agreement, the Company shall issue and deliver to Legend a common stock warrant (the “WARRANT”) for the purchase of five hundred thousand (500,000) shares of the Company’s common stock with an exercise price equal to the closing price on the Effective Date. Notwithstanding the foregoing, the Company shall vest completely and in favor of the Legend as follows:
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7.
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The Warrant, upon issuance, shall be fully paid, non-assessable, and free of any restrictions on transfer, but for those restrictions that are the result of State or Federal securities laws. The Warrant shall be issued to Legend in the form of a warrant agreement (the “Warrant Agreement”), which shall be in a form and content reasonably satisfactory to Legend and its counsel and the Company and its counsel. The Warrant Agreement shall provide for, among other provisions, the above terms and the following: (1) The Warrant shall expire five years after the date that the Warrant Agreement is issued; (2) The Warrant Agreement shall have customary anti-dilution provisions for stock dividends, splits, mergers, and sale of substantially all assets of the Company; (3) Legend may exercise the Warrant at any time after signing the Warrant Agreement to the extent vested as described in Section 6; (4) The Warrants shall contain a “Cashless Exercise” provision that may be utilized 180 days after issuance if there is not an effective Registration Statement covering the underlying common shares; (5) The Company shall reserve , and at all times have available, a sufficient number of shares of its common stock to be issued upon the exercise of the Warrant; and (6) The Company shall grant unlimited "piggy back" registration rights, at the Company's expense, to include the shares of the underlying common stock in any registration statement filed by the Company under the Securities Act of 1933 relating to an underwriting of the sale of shares of common stock or other security of the Company, subject to existing contractual obligations of the Company and other customary limitations.
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8.
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The Company will promptly notify Legend in writing upon the filing of any registration statement or other periodic reporting documents filed pursuant to the rules and regulations of the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
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9.
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The Company recognizes that Legend now renders and may continue to render financial consulting, management, investment banking and other services to other companies that may or may not conduct business and activities similar to those of the Company. Legend shall be free to render such advice and other services and the Company hereby consents thereto. Legend shall not be required to devote its full time and attention to the performance of its duties under this Agreement, but shall devote sufficient time and attention as is reasonably necessary to fulfill its obligation hereunder.
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10.
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During the Term of this Agreement the Company covenants, promises and agrees that the Company shall immediately notify Legend if it is the subject of any material investigation or material litigation.
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11.
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This Agreement shall be governed by and construed under the laws of the State of New York without regard to principals of conflicts of laws provisions. In the event of any dispute between the Company and Legend arising under or pursuant to the terms of this Agreement, or any matters arising under the terms of this Agreement, the same shall be settled only by arbitration through FINRA Dispute Resolution in County of New York, New York City, State of New York, in accordance with the Code of Arbitration Procedure published by FINRA Dispute Resolution. The determination of the arbitrators shall be final and binding upon the Company and Legend and may be enforced in any court of appropriate jurisdiction. This Agreement shall be construed by and governed exclusively under the laws of the State of New York, without regard to its conflicts of law provisions. The venue shall be in County of New York, NY.
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12.
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The Company shall reimburse Legend for all approved out of pocket expenses, including without limitation acceptable travel and lodging, printing, legal, and mailing cost that Legend may incur in performance of the Services under this Agreement, provided Legend receives the Company's prior approval for any and all out of pocket expenses above five hundred dollars.
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13.
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[A] The Company shall indemnify and hold harmless Legend and its directors, officers, employees, agents, attorneys and assigns from and against any and all losses, claims, costs, damages or liabilities (including the reasonable fees and expenses of legal counsel) to which any of them may become subject in connection with the investigation, defense or settlement of any actions or claims: (i)caused by any untrue statement or alleged untrue statement of any material fact contained in any Information provided by the Company or the omission or alleged omission to state a material fact required to be stated in any such Information or necessary to make the statements in any Information not misleading, provided such Information was used by Legend in rendering any Service hereunder; (ii) arising in any manner out of or in connection with the rendering of Services by Legend hereunder; or (iii) otherwise in connection with this Agreement; provided, however, that the Company will not be liable in any such case if and to the extent that any such loss, claim, cost, damage or liability arises out of any breach of this Agreement by Legend, or any misrepresentation or alleged misrepresentation of the material facts provided to Legend by the Company or arising from acts of gross negligence or malfeasance by Legend or any breach by Legend of this Agreement.
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14.
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The Company acknowledges that Legend has made no guarantees that its performance hereunder will achieve any particular result with respect to the Company's business, stock price, trading volume, market capitalization or otherwise.
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15.
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All notices hereunder shall be in writing and shall be validly given, made or served if in writing and delivered in person or when received by facsimile transmission, or five days after being sent first class certified or registered mail, postage prepaid, or one day after being sent by nationally recognized overnight carrier to the party for whom intended at the address set forth after each Parties signatures.
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16.
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If any clause or provision of this Agreement is illegal, invalid or unenforceable under applicable present or future Laws effective during the Term, the remainder of this Agreement shall not be affected. In lieu of each clause or provision of this Agreement that is illegal, invalid or unenforceable, there shall be added as a part of this Agreement a clause or provision as nearly identical as may be possible and as may be legal, valid and enforceable. In the event any clause or provision of this Agreement is illegal, invalid or unenforceable as aforesaid and the effect of such illegality, invalidity or unenforceability is that either party no longer has the substantial benefit of its bargain under this Agreement and a clause or provision as nearly identical as may be possible cannot be added, then, in such event, such party may in its discretion cancel and terminate this entire Agreement provided such party exercises such right within a reasonable time after such occurrence.
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17.
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The Parties agree and acknowledge that they have jointly participated in the negotiation and drafting of this Agreement and that this Agreement has been fully reviewed and negotiated by the Parties and their respective counsel. In the event of an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumptions or burdens of proof shall arise favoring any party by virtue of the authorship of any of the provisions of this Agreement.
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18.
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This Agreement may not be modified, amended, supplemented, canceled or discharged, except by written instrument executed by all Parties. No failure to exercise, and no delay in exercising, any right, power or privilege under this Agreement shall operate as a waiver, nor shall any single or partial exercise of any right, power or privilege hereunder preclude the exercise of any other right, power or privilege. No waiver of any breach of any provision shall be deemed to be a waiver of any preceding or succeeding breach of the same or any other provision, nor shall any waiver be implied from any course of dealing between the Parties. To be effective, all waivers must be in writing, signed by both Parties. The rights and remedies of the Parties under this Agreement are in addition to all other rights and remedies, at law or equity, that they may have against each other except as may be specifically limited herein.
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19.
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This Agreement contains the entire understanding of the Parties in respect of its subject matter and supersedes all prior agreements and understandings (oral or written) between or among the Parties with respect to such subject matter. The Parties agree that prior drafts of this Agreement shall not be deemed to provide any evidence as to the meaning of any provision hereof or the intent of the Parties with respect thereto. Any amendment or modification to the Agreement shall be by written instrument only and must be executed by a representative, with complete authority, from the Company and Legend.
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20.
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This Agreement may be executed in any number of counterparts, each of which shall bean original but all of which together shall constitute one and the same instrument. A telecopy signature of any party shall be considered to have the same binding legal effect as an original signature.
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21.
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In the event that any dispute among the Parties to this Agreement should result in litigation, the substantially prevailing party in such dispute shall be entitled to recover from the losing party all fees, costs and expenses of enforcing any right of such substantially prevailing party under or with respect to this Agreement, including without limitation, such reasonable fees and expenses of attorneys and accountants, which shall include, without limitation, all fees, costs and expenses of appeals and collection.
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Date: August 6, 2013
|
By:
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/s/ STEVEN A. KRIEGSMAN
|
|
Steven A. Kriegsman
|
|||
Chief Executive Officer
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Date: August 6, 2013
|
By:
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/s/ JOHN Y. CALOZ
|
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John Y. Caloz
|
|||
Chief Financial Officer
|
|||
Date: August 6, 2013
|
By:
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/s/ STEVEN A. KRIEGSMAN
|
|
Steven A. Kriegsman
|
|||
Chief Executive Officer
|
|||
Date: August 6, 2013
|
By:
|
/s/ JOHN Y. CALOZ
|
|
John Y. Caloz
|
|||
Chief Financial Officer
|
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Stock Based Compensation (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Stock Based Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of total stock-based compensation expense from stock options and warrants | The following table sets forth the total stock-based compensation expense resulting from stock options and warrants included in the Company’s unaudited interim statements of operations:
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Schedule of share-based payment award, fair value of the stock options granted , assumptions | During the six-month period ended June 30, 2013, the Company issued stock options to purchase 117,176 shares of its common stock. The fair value of the stock options granted in the current six-month period was estimated using the Black-Scholes option-pricing model, based on the following assumptions:
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Schedule of share-based compensation, stock options, activity | As of June 30, 2013, there remained approximately $1.3 million of unrecognized compensation expense related to unvested stock options granted to current and former employees, directors and consultants, to be recognized as expense over a weighted-average period of 1.13 years. Presented below is the Company’s stock option activity:
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Schedule of unvested stock options activity | A summary of the unvested stock options as of June 30, 2013, and changes during the six-month period then ended, is presented below:
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Schedule of share-based compensation, summarizes significant ranges of outstanding stock options | The following table summarizes significant ranges of outstanding stock options under the Company’s plans at June 30, 2013:
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CONDENSED STATEMENTS OF OPERATIONS (Unaudited) (USD $)
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3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Revenue: | ||||
License revenue | $ 200,000 | $ 0 | $ 200,000 | $ 0 |
Expenses: | ||||
Research and development | 4,626,244 | 2,686,465 | 7,815,003 | 7,087,980 |
General and administrative | 1,970,930 | 2,091,856 | 3,788,255 | 4,006,572 |
Total Expenses | 6,597,174 | 4,778,321 | 11,603,258 | 11,094,552 |
Loss before other income (loss) | (6,397,174) | (4,778,321) | (11,403,258) | (11,094,552) |
Other income (loss): | ||||
Interest income | 35,564 | 27,547 | 75,822 | 63,005 |
Other income, net | 4,761 | 16,491 | 201,698 | 50,551 |
Gain (loss) on warrant derivative liability | 2,933,707 | (8,528,192) | 838,487 | (12,416,358) |
Net loss | $ (3,423,142) | $ (13,262,475) | $ (10,287,251) | $ (23,397,354) |
Basic and diluted net loss per share (in dollars per share) | $ (0.11) | $ (0.63) | $ (0.34) | $ (1.10) |
Basic and diluted weighted average shares outstanding (in shares) | 30,418,435 | 21,204,499 | 30,417,906 | 21,203,754 |
Basic and Diluted Net Loss Per Common Share
|
6 Months Ended |
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Jun. 30, 2013
|
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Basic and Diluted Net Loss Per Common Share [Abstract] | |
Basic and Diluted Net Loss Per Common Share | 5. Basic and Diluted Net Loss Per Common Share Basic and diluted net loss per common share is computed based on the weighted-average number of common shares outstanding. Common share equivalents (which consist of options, warrants and restricted stock) are excluded from the computation of diluted net income (loss) per common share where the effect would be anti-dilutive. Common share equivalents that could potentially dilute net income (loss) per share in the future, and which were excluded from the computation of diluted loss per share, totaled 11.2 million shares for the three-month and six-month periods ended June 30, 2013, and 9.6 million shares for the three-month and six-month periods ended June 30, 2012. |
Fair Value Measurements (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Fair Value Measurements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value measurements by level for assets and liabilities measured at fair value on a recurring basis | The following table summarizes fair value measurements by level at June 30, 2013 for assets and liabilities measured at fair value on a recurring basis:
The following table summarizes fair value measurements by level at December 31, 2012 for assets and liabilities measured at fair value on a recurring basis:
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Liquidity and Capital Resources (Details) (USD $)
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6 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2013
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Dec. 31, 2012
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Jun. 30, 2012
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Dec. 31, 2011
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Estimated projected expenditure [Line Items] | ||||
Cash and cash equivalents | $ 10,980,486 | $ 14,344,088 | $ 11,859,009 | $ 17,988,590 |
Marketable securities | 17,000,000 | 24,000,000 | ||
Currently projected expenditures for clinical programs | 20,700,000 | |||
Aldoxorubicin [Member]
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Estimated projected expenditure [Line Items] | ||||
Currently projected expenditures for clinical programs | 8,100,000 | |||
Tamibarotene and Bafetinib [Member]
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Estimated projected expenditure [Line Items] | ||||
Currently projected expenditures for clinical programs | 1,200,000 | |||
General Operation [Member]
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Estimated projected expenditure [Line Items] | ||||
Currently projected expenditures for clinical programs | 4,700,000 | |||
Other General and Administrative Expenses [Member]
|
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Estimated projected expenditure [Line Items] | ||||
Currently projected expenditures for clinical programs | $ 6,700,000 |
Fair Value Measurements (Details) (Recurring [Member], USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
|
Dec. 31, 2012
|
---|---|---|
Fair value measurements by level for assets and liabilities measured at fair value on a recurring basis [Abstract] | ||
Cash equivalents | $ 10,384 | $ 13,188 |
Short-term investments | 17,000 | 24,000 |
Warrant liability | 3,134 | 3,972 |
Level I [Member]
|
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Fair value measurements by level for assets and liabilities measured at fair value on a recurring basis [Abstract] | ||
Cash equivalents | 10,384 | 13,188 |
Short-term investments | 17,000 | 24,000 |
Warrant liability | 0 | 0 |
Level II [Member]
|
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Fair value measurements by level for assets and liabilities measured at fair value on a recurring basis [Abstract] | ||
Cash equivalents | 0 | 0 |
Short-term investments | 0 | 0 |
Warrant liability | 0 | 0 |
Level III [Member]
|
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Fair value measurements by level for assets and liabilities measured at fair value on a recurring basis [Abstract] | ||
Cash equivalents | 0 | 0 |
Short-term investments | 0 | 0 |
Warrant liability | $ 3,134 | $ 3,972 |
Description of Company and Basis of Presentation
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Description of Company and Basis of Presentation [Abstract] | |
Description of Company and Basis of Presentation | 1. Description of Company and Basis of Presentation CytRx Corporation (“CytRx” or the “Company”) is a biopharmaceutical research and development company specializing in oncology. The CytRx oncology pipeline is focused on the clinical development of aldoxorubicin (formerly known as INNO-206), its improved version of the widely used chemotherapeutic agent doxorubicin. CytRx has reached targeted enrollment in an international Phase 2b clinical trial with aldoxorubicin as a treatment for soft tissue sarcomas and completed a Phase 1b/2 clinical trial primarily in the same indication and a Phase 1b study of aldoxorubicin in combination with doxorubicin in patients with advanced solid tumors. CytRx also is conducting a Phase 1b pharmacokinetics clinical trial of aldoxorubicin in patients with metastatic solid tumors. The Company is initiating a Phase 3 pivotal trial under a special protocol assessment (SPA) with aldoxorubicin as a therapy for patients with soft tissue sarcomas whose tumors have progressed following treatment with chemotherapy. CytRx may seek to expand its pipeline of oncology candidates based on a novel linker platform technology used in aldoxorubicin that can be utilized with multiple chemotherapeutic agents and may allow for greater concentration of the agents at tumor sites. The Company also has rights to two additional drug candidates, tamibarotene and bafetinib. The Company completed its evaluation of bafetinib in the ENABLE Phase 2 clinical trial in high-risk B-cell chronic lymphocytic leukemia (B-CLL), and plans to seek a partner for further development. CytRx is evaluating plans for further development of tamibarotene. The accompanying condensed financial statements at June 30, 2013 and for the three-month and six-month periods ended June 30, 2013 and 2012 are unaudited, but include all adjustments, consisting of normal recurring entries, that management believes to be necessary for a fair presentation of the periods presented. Prior period figures have been reclassified, wherever necessary, to conform to current presentation. Interim results are not necessarily indicative of results for a full year. Balance sheet amounts as of December 31, 2012 have been derived from the Company’s audited financial statements as of that date. The financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. The financial statements should be read in conjunction with the Company’s audited financial statements contained in its Annual Report on Form 10-K for the year ended December 31, 2012. The Company’s operating results will fluctuate for the foreseeable future. Therefore, period-to-period comparisons should not be relied upon as predictive of the results in future periods. Effective May 15, 2012, the Company completed a 1-for-7 reverse stock split of the Company’s outstanding shares of common stock; no change was made to the per-share par value per share of the common stock or to the number of shares of authorized common stock. All share and per share amounts in the accompanying consolidated financial statements have been adjusted to reflect the reverse stock split as if it had occurred at the beginning of the earliest period presented. |
Short-term Investments
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6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Short-term Investments [Abstract] | |
Short-term Investments | 3. Short-term Investments The Company held $17.0 million of short-term investments at June 30, 2013. The Company has classified these investments as available for sale. These investments are federally insured certificates of deposit and have a maturity date of October 31, 2013. |
Warrant Liabilities
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Warrant Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrant Liabilities | 6. Warrant Liabilities Liabilities measured at market value on a recurring basis include warrant liabilities resulting from the Company’s past equity financings, including the underwritten public offering that closed on August 1, 2011. In accordance with ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity (“ASC 815-40”), the warrant liabilities are being marked to market until they are completely settled. The warrants are valued using the Black-Scholes method, using assumptions consistent with our application of ASC 505-50, Equity-Based Payments to Non-Employees (“ASC 505-50”). The gain or loss resulting from the marked to market calculation is shown on the Consolidated Statements of Operations as gain (loss) on warrant derivative liability. The Company recognized a gain (loss) of $2.9 million and ($8.5) million for the three-month periods ended June 30, 2013 and 2012, respectively, and a gain (loss) of $0.8 million and ($12.4) million for the six-month periods ended June 30, 2013 and 2012, respectively. The following reflects the weighted-average assumptions for each of the six-month periods indicated:
The dividend yield assumption of zero is based upon the fact that the Company has never paid and presently has no intention of paying cash dividends. The risk-free interest rate used for each warrant classified as a derivative is equal to the U.S. Treasury rates in effect at June 30th. The expected lives are based on the remaining contractual lives of the related warrants at the valuation date. |
Investment in Mast Therapeutics, Inc
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Investment in Mast Therapeutics, Inc. [Abstract] | |
Investment in Mast Therapeutics, Inc. | 4. Investment in Mast Therapeutics, Inc. On April 8, 2011, Mast Therapeutics, Inc. (formerly ADVENTRX Pharmaceuticals) completed its acquisition of SynthRx, Inc., in which the Company held a 19.1% interest. As a result of the transaction, the Company received approximately 126,000 shares of common stock of Mast Therapeutics, which it sold on October 11, 2011 for $112,200, and in June 2012, the Company received an additional 38,196 shares of common stock of Mast Therapeutics that had been held in an escrow established in connection with the acquisition, which it sold on June 6, 2012 for $17,900. In January 2013, the Company received an additional 92,566 shares, and in June 2013, an additional 47,745 shares, which were all sold in June 2013 for $60,566. If all of the development milestones under the acquisition agreement were to be achieved, the Company also would be entitled to receive up to 2.8 million additional Mast Therapeutics shares. Our former interest in SynthRx had a zero carrying value. |