DELAWARE
|
41-1505029
|
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer Identification Number)
|
|
29 EMMONS DRIVE, SUITE C-10 PRINCETON, NJ
|
08540
|
|
(Address of principal executive offices)
|
(Zip Code)
|
|
(609) 538-8200
|
||
(Registrant’s telephone number, including area code)
|
Large accelerated filer o
|
Accelerated filer o
|
Non-accelerated filer o
|
Smaller reporting company x
|
Description
|
Page
|
|
Part I
|
FINANCIAL INFORMATION
|
|
Item 1
|
Consolidated Financial Statements
|
3
|
Consolidated Balance Sheets as of June 30, 2011 and December 31, 2010
|
3
|
|
Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2011 and 2010
|
4
|
|
Consolidated Statements of Changes in Shareholders’ Equity for the Six Months Ended June 30, 2011
|
5
|
|
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2011 and 2010
|
6
|
|
Notes to Consolidated Financial Statements
|
7
|
|
Item 2
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
18
|
Item 3
|
Quantitative and Qualitative Disclosures About Market Risk
|
33
|
Item 4
|
Controls and Procedures
|
33
|
Part II
|
OTHER INFORMATION
|
|
Item 1A
|
Risk Factors
|
34
|
Item 2
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
34
|
Item 6
|
Exhibits
|
34
|
SIGNATURES
|
35
|
June 30,
2011
|
December 31,
2010
|
|||||||
Assets
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 4,156,749 | $ | 7,451,714 | ||||
Grants receivable
|
336,560 | 120,787 | ||||||
Other receivable
|
4,322 | 251,864 | ||||||
Prepaid expenses
|
91,635 | 187,494 | ||||||
Total current assets
|
4,589,266 | 8,011,859 | ||||||
Office furniture and equipment, net
|
17,100 | 20,699 | ||||||
Intangible assets, net
|
1,246,543 | 1,235,989 | ||||||
Total assets
|
$ | 5,852,909 | $ | 9,268,547 | ||||
Liabilities and shareholders’ equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 1,373,974 | $ | 1,674,175 | ||||
Accrued compensation
|
49,302 | 236,581 | ||||||
Total current liabilities
|
1,423,276 | 1,910,756 | ||||||
Commitments and contingencies
|
||||||||
Shareholders’ equity:
|
||||||||
Preferred stock; 5,000,000 shares authorized;
none issued or outstanding
|
- | - | ||||||
Common stock, $.001 par value; 400,000,000 shares
authorized; 218,240,167 shares and 216,192,360 shares
issued and outstanding in 2011 and 2010, respectively
|
218,240 | 216,192 | ||||||
Additional paid-in capital
|
123,601,900 | 122,880,378 | ||||||
Accumulated deficit
|
(119,390,507 | ) | (115,738,779 | ) | ||||
Total shareholders’ equity
|
4,429,633 | 7,357,791 | ||||||
Total liabilities and shareholders’ equity
|
$ | 5,852,909 | $ | 9,268,547 |
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Revenues, principally from grants
|
$ | 405,820 | $ | 444,642 | $ | 1,213,825 | $ | 780,438 | ||||||||
Cost of revenues
|
(349,511 | ) | (349,093 | ) | (903,548 | ) | (622,866 | ) | ||||||||
Gross profit
|
56,309 | 95,549 | 310,277 | 157,572 | ||||||||||||
Operating expenses:
|
||||||||||||||||
Research and development
|
1,307,051 | 1,070,711 | 2,563,186 | 2,669,002 | ||||||||||||
General and administrative
|
450,179 | 544,506 | 1,014,091 | 1,082,603 | ||||||||||||
Stock-based compensation –
research and development
|
206,671 | 39,948 | 323,340 | 80,152 | ||||||||||||
Stock-based compensation –
general and administrative
|
25,198 | 20,654 | 65,296 | 42,713 | ||||||||||||
Total operating expenses
|
1,989,099 | 1,675,819 | 3,965,913 | 3,874,470 | ||||||||||||
Loss from operations
|
(1,932,790 | ) | (1,580,270 | ) | (3,655,636 | ) | (3,716,898 | ) | ||||||||
Other income:
|
||||||||||||||||
Interest income, net
|
1,473 | 2,977 | 3,908 | 3,345 | ||||||||||||
Net loss
|
$ | (1,931,317 | ) | $ | (1,577,293 | ) | $ | (3,651,728 | ) | $ | (3,713,553 | ) | ||||
Basic and diluted net loss per share
|
$ | (0.01 | ) | $ | (0.01 | ) | $ | (0.02 | ) | $ | ( 0.02 | ) | ||||
Basic and diluted weighted average common shares outstanding
|
217,998,049 | 190,751,511 | 217,424,979 | 188,644,289 |
Common Stock
|
Additional Paid-In
|
Accumulated
|
||||||||||||||||||
Shares
|
Par Value
|
Capital
|
Deficit
|
Total
|
||||||||||||||||
Balance, December 31, 2010
|
216,192,360 | $ | 216,192 | $ | 122,880,378 | $ | (115,738,779 | ) | $ | 7,357,791 | ||||||||||
Issuance of common stock pursuant to equity line agreement – Fusion
|
1,422,807 | 1,423 | 253,577 | - | 255,000 | |||||||||||||||
Issuance of common stock for stock option and warrant exercises
|
625,000 | 625 | 68,125 | - | 68,750 | |||||||||||||||
Fair value of common stock warrants to vendors
|
- | - | 11,184 | - | 11,184 | |||||||||||||||
Stock-based compensation expense
|
- | - | 388,636 | - | 388,636 | |||||||||||||||
Net loss
|
- | - | - | (3,651,728 | ) | (3,651,728 | ) | |||||||||||||
Balance, June 30, 2011
|
218,240,167 | $ | 218,240 | $ | 123,601,900 | $ | (119,390,507 | ) | $ | 4,429,633 |
2011
|
2010
|
|||||||
Operating activities:
|
||||||||
Net loss
|
$ | (3,651,728 | ) | $ | (3,713,553 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Amortization and depreciation
|
105,443 | 85,779 | ||||||
Common stock or warrants issued in exchange for services
|
11,184 | 122,197 | ||||||
Stock-based compensation
|
388,636 | 122,865 | ||||||
Capitalized patent write-off
|
- | 378,501 | ||||||
Change in operating assets and liabilities:
|
||||||||
Grants receivable
|
(215,773 | ) | (87,665 | ) | ||||
Other receivable
|
247,542 | (8,000 | ) | |||||
Inventory
|
- | 7,733 | ||||||
Prepaid expenses
|
95,859 | (18,228 | ) | |||||
Accounts payable
|
(300,201 | ) | 923,946 | |||||
Accrued compensation
|
(187,279 | ) | (319,930 | ) | ||||
Total adjustments
|
145,411 | 1,207,198 | ||||||
Net cash used in operating activities
|
(3,506,317 | ) | (2,506,355 | ) | ||||
Investing activities:
|
||||||||
Acquisition of intangible assets
|
(112,398 | ) | (168,102 | ) | ||||
Purchase of office equipment
|
- | (947 | ) | |||||
Net cash used in investing activities
|
(112,398 | ) | (169,049 | ) | ||||
Financing activities:
|
||||||||
Net proceeds from sale of common stock
|
- | 5,679,856 | ||||||
Proceeds from sale of common stock pursuant to equity line
|
255,000 | 70,000 | ||||||
Proceeds from exercise of options and warrants
|
68,750 | 45,540 | ||||||
Net cash provided by financing activities
|
323,750 | 5,795,396 | ||||||
|
||||||||
Net increase/(decrease) in cash and cash equivalents
|
(3,294,965 | ) | 3,119,992 | |||||
Cash and cash equivalents at beginning of period
|
7,451,714 | 7,692,011 | ||||||
Cash and cash equivalents at end of period
|
$ | 4,156,749 | $ | 10,812,003 | ||||
·
|
complete the confirmatory Phase 3 clinical trial for orBec® in the treatment of acute gastrointestinal Graft-versus-Host disease (“GI GVHD”);
|
·
|
Identify a development and marketing partner for orBec® for territories outside of North America and Europe;
|
·
|
complete and report data from the Phase 1/2 clinical trial for SGX201 (oral BDP) in the prevention of acute radiation enteritis;
|
·
|
evaluate and/or initiate additional trials to explore the effectiveness of orBec®/oral BDP in other therapeutic indications involving inflammatory conditions of the gastrointestinal (“GI”) tract such as prevention of acute GVHD, treatment of chronic GI GVHD, radiation injury, and Crohn’s disease;
|
·
|
continue to secure additional government funding for each of our BioTherapeutics and BioDefense programs through grants, contracts and/or procurements;
|
·
|
use RiVaxTM to support development efforts with our heat stabilization technology to develop new heat stable vaccines in biodefense and infectious diseases with the potential to collaborate and/or partner with other companies in these areas;
|
·
|
acquire or in-license new clinical-stage compounds for development; and
|
·
|
explore other business development and acquisition strategies.
|
·
|
The Company has approximately $8.4 million in active grant funding still available to support its research programs through 2011 and beyond. The Company has also submitted additional grant applications for further support of its programs with various funding agencies, and has received encouraging feedback to date on the likelihood of additional funding.
|
·
|
The Company has approximately $7.4 million in available capacity under the Company’s Fusion Capital equity facility through October 2011. Although the Company has historically drawn down modest amounts under this agreement, the Company could draw more within certain contractual parameters;
|
·
|
The Company will seek non-dilutive funding through completion of partnerships for its orBec®/oral BDP programs in territories outside North America and Europe;
|
·
|
The Company has continued to use equity instruments to provide a portion of the compensation due to vendors and collaboration partners and expects to continue to do so for the foreseeable future.
|
·
|
The Company will pursue Net Operating Losses (“NOL”) sales in the State of New Jersey, pursuant to its Technology Business Tax Certificate Transfer Program. Based on the receipt of $245,810 in proceeds pursuant to NOL sales in 2010 and assuming its application is accepted, the Company expects to participate in the expanded program during 2011 and beyond; and
|
·
|
The Company may seek additional capital in the private and/or public equity markets to continue its operations, respond to competitive pressures, develop new products and services, and to support new strategic partnerships. The Company is currently evaluating additional equity financing opportunities and may execute them when appropriate. However, there can be no assurances that the Company can consummate such a transaction, or consummate a transaction at favorable pricing.
|
·
|
a dividend yield of 0%;
|
·
|
an expected life of 4 years;
|
·
|
volatilities of 123% and 129% for 2011 and 2010, respectively;
|
·
|
forfeitures at a rate of 12%; and
|
·
|
risk-free interest rates of 1.21% and 1.91% in 2011 and 2010, respectively.
|
Three Months Ended June 30,
|
||||||||||||||||||||||||
2011
|
2010
|
|||||||||||||||||||||||
Net Loss
|
Shares
|
EPS
|
Net Loss
|
Shares
|
EPS
|
|||||||||||||||||||
Basic & Diluted EPS
|
$ | (1,931,317 | ) | 217,998,049 | $ | (0.01 | ) | $ | (1,577,293 | ) | 190,751,511 | $ | (0.01 | ) | ||||||||||
Six Months Ended June 30,
|
||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||
Net Loss
|
Shares
|
EPS
|
Net Loss
|
Shares
|
EPS
|
|||||||||||||||||||
Basic & Diluted EPS
|
$ | (3,651,728 | ) | 217,424,979 | $ | (0.02 | ) | $ | (3,713,553 | ) | 188,644,289 | $ | (0.02 | ) |
·
|
Be commensurate with either of the following:
|
o
|
The vendor’s performance to achieve the milestone
|
o
|
The enhancement of the value of the item delivered as a result of a specific outcome resulting from the vendor’s performance to achieve the milestone
|
·
|
Relate solely to past performance
|
·
|
Be reasonable relative to all deliverables and payment terms in the arrangement
|
June 30, 2011
|
December 31, 2010
|
|||||||
Office equipment
|
$ | 37,828 | $ | 37,828 | ||||
Office furniture
|
2,889 | 2,889 | ||||||
40,717 | 40,717 | |||||||
Less: Accumulated depreciation
|
(23,617 | ) | (20,018 | ) | ||||
Office furniture and equipment, net
|
$ | 17,100 | $ | 20,699 |
Weighted Average Amortization Period (years)
|
Cost
|
Accumulated
Amortization
|
Net Book Value
|
|||||||||||||
June 30, 2011
|
||||||||||||||||
Licenses
|
9.2 | $ | 462,234 | $ | 210,976 | $ | 251,258 | |||||||||
Patents
|
3.9 | 2,025,182 | 1,029,897 | 995,285 | ||||||||||||
Total
|
4.9 | $ | 2,487,416 | $ | 1,240,873 | $ | 1,246,543 | |||||||||
December 31, 2010
|
||||||||||||||||
Licenses
|
9.7 | $ | 462,234 | $ | 197,469 | $ | 264,765 | |||||||||
Patents
|
4.2 | 1,912,784 | 941,559 | 971,224 | ||||||||||||
Total
|
5.3 | $ | 2,375,018 | $ | 1,139,028 | $ | 1,235,989 |
Amortization Expense
|
|
2011
|
$ 225,000
|
2012
|
$ 225,000
|
2013
|
$ 225,000
|
2014
|
$ 225,000
|
2015
|
$ 225,000
|
·
|
In thirteen separate transactions during the six months ended June 30, 2011, the Company issued an aggregate of 1,422,807 shares of common stock under its existing Fusion Capital equity facility. The Company received an aggregate of $255,000 in proceeds which approximated the shares’ fair market value on the date of issuance.
|
·
|
As a result of stock option exercises, 625,000 shares were issued during the six months ended June 30, 2011. The Company received an aggregate of $68,750 in proceeds from these exercises.
|
Three Months Ended
June 30,
|
||||||||
2011
|
2010
|
|||||||
Revenues, Principally from Grants
|
||||||||
BioDefense
|
$ | 335,029 | $ | 338,104 | ||||
BioTherapeutics
|
70,791 | 106,538 | ||||||
Total
|
$ | 405,820 | $ | 444,642 | ||||
Loss from Operations
|
||||||||
BioDefense
|
$ | (67,425 | ) | $ | (133,730 | ) | ||
BioTherapeutics
|
(1,663,402 | ) | (1,237,500 | ) | ||||
Corporate
|
(201,963 | ) | (209,040 | ) | ||||
Total
|
$ | (1,932,790 | ) | $ | (1,580,270 | ) | ||
Amortization and Depreciation Expense
|
||||||||
BioDefense
|
$ | 10,183 | $ | 13,966 | ||||
BioTherapeutics
|
43,290 | 25,097 | ||||||
Corporate
|
542 | 465 | ||||||
Total
|
$ | 54,015 | $ | 39,528 | ||||
Interest Income, Net
|
||||||||
Corporate
|
$ | 1,473 | $ | 2,977 | ||||
Stock-Based Compensation
|
||||||||
BioDefense
|
$ | 18,416 | $ | 12,941 | ||||
BioTherapeutics
|
188,255 | 27,006 | ||||||
Corporate
|
25,198 | 20,655 | ||||||
Total
|
$ | 231,869 | $ | 60,602 |
Six Months Ended
June 30,
|
||||||||
2011
|
2010
|
|||||||
Revenues, Principally from Grants
|
||||||||
BioDefense
|
$ | 871,615 | $ | 601,894 | ||||
BioTherapeutics
|
342,210 | 178,544 | ||||||
Total
|
$ | 1,213,825 | $ | 780,438 | ||||
Income (Loss) from Operations
|
||||||||
BioDefense (1)
|
$ | 52 | $ | (725,156 | ) | |||
BioTherapeutics
|
(3,044,729 | ) | (2,379,256 | ) | ||||
Corporate
|
(610,959 | ) | (612,486 | ) | ||||
Total
|
$ | (3,655,636 | ) | $ | (3,716,898 | ) | ||
Amortization and Depreciation Expense
|
||||||||
BioDefense
|
$ | 19,872 | $ | 37,075 | ||||
BioTherapeutics
|
84,491 | 47,718 | ||||||
Corporate
|
1,080 | 986 | ||||||
Total
|
$ | 105,443 | $ | 85,779 | ||||
Interest Income, Net
|
||||||||
Corporate
|
$ | 3,908 | $ | 3,345 | ||||
Stock-Based Compensation
|
||||||||
BioDefense
|
$ | 36,832 | $ | 25,881 | ||||
BioTherapeutics
|
286,508 | 54,269 | ||||||
Corporate
|
65,296 | 42,715 | ||||||
Total
|
$ | 388,636 | $ | 122,865 |
(1)
|
During the six months ended June 30, 2010, the Company incurred $378,501 in a one-time patent write off cost related to its anticipated return of the botulinum toxin vaccine license and abandonment of related patents. This cost is reflected in research and development expense in the consolidated statement of operations.
|
As of
June 30,
2011
|
As of
December 31,
2010
|
|||||||
Identifiable Assets
|
||||||||
BioDefense
|
$ | 693,399 | $ | 480,995 | ||||
BioTherapeutics
|
896,468 | 927,973 | ||||||
Corporate
|
4,263,042 | 7,859,579 | ||||||
Total
|
$ | 5,852,909 | $ | 9,268,547 | ||||
·
|
complete the confirmatory Phase 3 clinical trial for orBec® in the treatment of acute gastrointestinal Graft-versus-Host disease (“GI GVHD”);
|
·
|
Identify a development and marketing partner for orBec® for territories outside of North America and Europe;
|
·
|
complete and report data on the Phase 1/2 clinical trial for SGX201 (oral BDP) in the prevention of acute radiation enteritis;
|
·
|
evaluate and/or initiate additional trials to explore the effectiveness of orBec®/oral BDP in other therapeutic indications involving inflammatory conditions of the gastrointestinal (“GI”) tract such as prevention of acute GVHD, treatment of chronic GI GVHD, radiation injury, and Crohn’s disease;
|
·
|
continue to secure additional government funding for each of our BioTherapeutics and BioDefense programs through grants, contracts and/or procurements;
|
·
|
use RiVaxTM to support development efforts with our heat stabilization technology to develop new heat stable vaccines in biodefense and infectious diseases with the potential to collaborate and/or partner with other companies in these areas;
|
·
|
acquire or in-license new clinical-stage compounds for development; and
|
·
|
explore other business development and acquisition strategies.
|
Soligenix Product
|
Therapeutic Indication
|
Stage of Development
|
orBec®
|
Treatment of Acute GI GVHD
|
Pivotal Phase 3 confirmatory trial enrolling;
expected to complete in 2H 2011
|
orBec®
|
Prevention of Acute GVHD
|
Phase 2 trial completed
|
orBec®
|
Treatment of Chronic GI GVHD
|
Phase 2 trial potentially to be initiated in 2H 2011
|
SGX201
|
Acute Radiation Enteritis
|
Phase 1/2 trial enrollment complete;
Data expected in 4Q 2011
|
LPM™ Leuprolide
|
Endometriosis and Prostate Cancer
|
Pre-clinical
|
Soligenix Product
|
Indication
|
Stage of Development
|
RiVaxTM
|
Vaccine against
Ricin Toxin Poisoning
|
Phase 1B trial enrollment complete;
data expected in 2H 2011
|
SGX202
|
Radiation Injury
|
Pre-clinical
|
Phase 3 Trial
|
Phase 2 Trial
|
|||
orBec®
|
Placebo
|
orBec®
|
Placebo
|
|
Number of patients randomized
|
62
|
67
|
31
|
29
|
Number (%) who died
|
5 (8%)
|
16 (24%)
|
3 (10%)
|
6 (21%)
|
Hazard ratio (95% confidence interval)
|
0.33 (0.12, 0.89)
|
0.47 (0.12, 1.87)
|
||
Death with infection*
|
3 (5%)
|
9 (13%)
|
2 (6%)
|
5 (17%)
|
Death with relapse*
|
3 (5%)
|
9 (13%)
|
1 (3%)
|
4 (14%)
|
·
|
We have approximately $8.4 million in active grant funding still available to support our research programs through 2011 and beyond. Additionally, we have submitted additional grant applications for further support of our programs with various funding agencies, and have received encouraging feedback to date on the likelihood of additional funding.
|
·
|
We have approximately $7.4 million in available capacity under its Fusion Capital equity facility through October 2011. Although we have historically drawn down modest amounts under this agreement, we could draw more within certain contractual parameters.
|
·
|
We will seek non-dilutive funding through completion of partnerships for our orBec®/oral BDP programs in territories outside North America and Europe;
|
·
|
We have continued to use equity instruments to provide a portion of the compensation due to vendors and collaboration partners and expect to continue to do so for the foreseeable future;
|
·
|
We will pursue Net Operating Losses (“NOL”) sales in the State of New Jersey pursuant to its Technology Business Tax Certificate Transfer Program. Based on the receipt of $245,810 in proceeds pursuant to NOL sales in 2010 and assuming our application is accepted, we expect to participate in the expanded program during 2011 and beyond; and
|
·
|
We may seek additional capital in the private and/or public equity markets to continue our operations, respond to competitive pressures, develop new products and services, and to support new strategic partnerships. We are currently evaluating additional equity financing opportunities and may execute them when appropriate. However, there can be no assurances that we can consummate such a transaction, or consummate a transaction at favorable pricing.
|
|
2011
|
2010
|
||||||
Research & Development Expenses
|
||||||||
orBec®
|
$ | 1,713,193 | $ | 1,488,492 | ||||
RiVax™ and thermostable vaccines
|
845,916 | 796,432 | ||||||
BT-VACC™ (program terminated)
|
- | 378,501 | ||||||
Oraprine™
|
1,500 | 3,000 | ||||||
LPM™-Leuprolide
|
2,577 | 2,577 | ||||||
Total
|
$ | 2,563,186 | $ | 2,669,002 | ||||
Reimbursed under Grants
|
||||||||
orBec®
|
$ | 328,503 | $ | 133,717 | ||||
RiVax™ and thermostable vaccines
|
575,045 | 381,149 | ||||||
BT-VACC™ (program terminated)
|
- | 108,000 | ||||||
Total
|
903,548 | $ | 622,866 | |||||
Grand Total
|
$ | 3,466,734 | $ | 3,291,868 |
Year
|
Research and Development
|
Property and
Other Leases
|
Total
|
|||||||||
2011
|
$ | 365,000 | $ | 48,834 | $ | 413,834 | ||||||
2012
|
355,000 | 28,761 | 383,761 | |||||||||
2013
|
75,000 | 5,793 | 80,793 | |||||||||
2014
|
75,000 | 1,448 | 76,448 | |||||||||
2015
|
75,000 | - | 75,000 | |||||||||
Total
|
$ | 945,000 | $ | 84,836 | $ | 1,029,836 |
EXHIBIT NO. | DESCRIPTION |
31.1 | Certification of Chief Executive Officer pursuant to Exchange Act rule 13(a)-14(a)(under Section 302 of the Sarbanes-Oxley Act of 2002). |
31.2 | Certification of Chief Financial Officer pursuant to Exchange Act rule 13(a)-14(a) (under Section 302 of the Sarbanes-Oxley Act of 2002). |
32.1 | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2 | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
August 12, 2011
|
by /s/ Christopher J. Schaber
Christopher J. Schaber, PhD
President and Chief Executive Officer
(Principal Executive Officer)
|
|
August 12, 2011
|
by /s/ Evan Myrianthopoulos
Evan Myrianthopoulos
Chief Financial Officer
(Principal Financial Officer)
|
|
August 12, 2011
|
by /s/ Joseph Warusz
Joseph Warusz
Vice President of Administration and Controller
(Principal Accounting Officer)
|
|
EXHIBIT NO. | DESCRIPTION |
31.1 | Certification of Chief Executive Officer pursuant to Exchange Act rule 13(a)-14(a)(under Section 302 of the Sarbanes-Oxley Act of 2002). |
31.2 | Certification of Chief Financial Officer pursuant to Exchange Act rule 13(a)-14(a) (under Section 302 of the Sarbanes-Oxley Act of 2002). |
32.1 | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2 | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
1.
|
I have reviewed this Form 10-Q of the Soligenix, Inc. for the fiscal quarter ended June 30, 2011;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’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 registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’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 registrant’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 registrant’s internal control over financial reporting.
|
August 12, 2011
|
/s/ Christopher J. Schaber
|
|
Christopher J. Schaber, Ph.D.
|
||
President and Chief Executive Officer
|
||
(Principal Executive Officer)
|
||
1.
|
I have reviewed this Form 10-Q of the Soligenix, Inc. for the fiscal quarter ended June 30, 2011;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’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 registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’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 registrant’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 registrant’s internal control over financial reporting.
|
August 12, 2011
|
/s/ Evan Myrianthopoulos
|
|
Evan Myrianthopoulos
|
||
Chief Financial Officer
|
||
(Principal Financial and Accounting Officer)
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
August 12, 2011
|
/s/ Christopher J. Schaber
|
|
Christopher J. Schaber, Ph.D.
|
||
President and Chief Executive Officer
|
||
(Principal Executive Officer)
|
||
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
August 12, 2011
|
/s/ Evan Myrianthopoulos
|
|
Evan Myrianthopoulos
|
||
Chief Financial Officer
|
||
(Principal Financial and Accounting Officer)
|
Consolidated Balance Sheets (Parantheticals) (USD $)
|
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
Preferred stock, Shares Authorized | 5,000,000 | 5,000,000 |
Preferred stock, Shares Issued | 0 | 0 |
Preferred stock Outstanding | 0 | 0 |
Common Stock, Par Value (in dollars per shares) | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorised | 400,000,000 | 400,000,000 |
Common Stock, Shares Issued | 218,240,167 | 216,192,360 |
Common Stock, Shares Outstanding | 218,240,167 | 216,192,360 |
Consolidated Statements of Operations (USD $)
|
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Revenues, principally from grants | $ 405,820 | $ 444,642 | $ 1,213,825 | $ 780,438 |
Cost of revenues | (349,511) | (349,093) | (903,548) | (622,866) |
Gross profit | 56,309 | 95,549 | 310,277 | 157,572 |
Operating expenses: | Â | Â | Â | Â |
Research and development | 1,307,051 | 1,070,711 | 2,563,186 | 2,669,002 |
General and administrative | 450,179 | 544,506 | 1,014,091 | 1,082,603 |
Stock-based compensation – research and development | 206,671 | 39,948 | 323,340 | 80,152 |
Stock-based compensation – general and administrative | 25,198 | 20,654 | 65,296 | 42,713 |
Total operating expenses | 1,989,099 | 1,675,819 | 3,965,913 | 3,874,470 |
Loss from operations | (1,932,790) | (1,580,270) | (3,655,636) | (3,716,898) |
Other income: | Â | Â | Â | Â |
Interest income, net | 1,473 | 2,977 | 3,908 | 3,345 |
Net loss | $ (1,931,317) | $ (1,577,293) | $ (3,651,728) | $ (3,713,553) |
Basic and diluted net loss per share | $ (0.01) | $ (0.01) | $ (0.02) | $ (0.02) |
Basic and diluted weighted average common shares outstanding | 217,998,049 | 190,751,511 | 217,424,979 | 188,644,289 |
Document And Entity Information
|
6 Months Ended | |
---|---|---|
Jun. 30, 2011
|
Aug. 09, 2011
|
|
Entity Registrant Name | SOLIGENIX, INC. | Â |
Entity Central Index Key | 0000812796 | Â |
Entity Current Reporting Status | Yes | Â |
Current Fiscal Year End Date | --12-31 | Â |
Entity Filer Category | Smaller Reporting Company | Â |
Entity Common Stock, Shares Outstanding | Â | 220,791,077 |
Document Type | 10-Q | Â |
Document Period End Date | Jun. 30, 2011 | |
Amendment Flag | false | Â |
Document Fiscal Year Focus | 2011 | Â |
Document Fiscal Period Focus | Q2 | Â |
"+ text.join( "
\n" ) +"
" + text[p] + "
\n"; } } }else{ formatted = '' + raw + '
'; } html = ''+ "\n"+''+ "\n"+''+ "\n"+' formatted: '+ ( this.Default == 'raw' ? 'as Filed' : 'with Text Wrapped' ) +''+ "\n"+' | '+ "\n"+'
'+ "\n"+' | '+ "\n"+' '+ "\n"+'
'+ "\n"+' | '+ "\n"+' '+ "\n"+'
Shareholders' Equity
|
6 Months Ended | ||||
---|---|---|---|---|---|
Jun. 30, 2011
|
|||||
Stockholders' Equity Note [Abstract] | Â | ||||
Stockholders' Equity Note Disclosure [Text Block] | Note 6. Shareholders’ Equity
Preferred Stock
The Company has 5 million shares of preferred stock authorized, none of which are issued or outstanding.
Common Stock
The following items represent transactions in the Company’s common stock for the three months ended June 30, 2011:
Warrants
During 2011, the Company issued warrants to purchase 95,000 shares of common stock to consultants in exchange for their services. Expense charges of $8,498 and $11,184 were recorded during the three and six months ended June 30, 2011, respectively, as a result of these issuances which represented the estimated fair value of the services provided.
|
Summary of Significant Accounting Policies
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | Â | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies [Text Block] | Note 2.
Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include Soligenix, Inc., and its wholly and majority owned subsidiaries. All significant intercompany accounts and transactions have been eliminated as a result of consolidation.
Operating Segments
Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated on a regular basis by the chief operating decision maker, or decision making group, in deciding how to allocate resources to an individual segment and in assessing the performance of the segment. The Company divides its operations into two operating segments: BioTherapeutics and BioDefense.
Grants Receivable
Grants receivable consist of unbilled amounts due from various grants from the NIH for costs incurred prior to the period end under reimbursement contracts. The amounts were billed to the NIH in the month subsequent to period end and collected shortly thereafter. The Company considers the grants receivable to be fully collectible. Accordingly, no allowance for doubtful amounts has been established. If amounts become uncollectible, they are charged to operations.
Intangible Assets
One of the most significant estimates or judgments that the Company makes is whether to capitalize or expense patent and license costs. The Company makes this judgment based on whether the technology has alternative future uses, as defined in Financial Accounting Standards Board (FASB) Accounting Standards Codification (“ASC”) 730, Research and Development
. Based on this consideration, the Company capitalizes payments made to legal firms that are engaged in filing and protecting rights to intellectual property and rights for our current products in both the domestic and international markets. The Company believes that patent rights are one of its most valuable assets. Patents and patent applications are a key component of intellectual property, especially in the early stage of product development, as their purchase and maintenance gives the Company access to key product development rights from Soligenix’s academic and industrial partners. These rights can also be sold or sub-licensed as part of its strategy to partner its products at each stage of development as the intangible assets have alternative future use. The legal costs incurred for these patents consist of work designed to protect, preserve, maintain and perhaps extend the lives of the patents. The Company capitalizes such costs and amortizes intangibles over their expected useful life – generally a period of 11 to 16 years.
The Company capitalized $112,398 and $168
,
102
in patent related costs during the six months ended June 30, 2011 and 2010, respectively.
Impairment of Long-Lived Assets
Office furniture and equipment and intangible assets are evaluated and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company recognizes impairment of long-lived assets in the event the net book value of such assets exceeds the estimated future undiscounted cash flows attributable to such assets. If the sum of the expected undiscounted cash flows is less than the carrying value of the related asset or group of assets, a loss is
recognized for the difference between the fair value and the carrying value of the related asset or group of assets. Such analyses necessarily involve significant judgment.
The Company did not record any impairment of long-lived assets for the six months ended June 30, 2011 or 2010.
Inventory
Inventories are stated at the lower of cost or market. Cost is determined using the first-in, first-out (FIFO) method and includes the cost of materials and overhead. The Company records an allowance as needed for excess inventory. During the fourth quarter of 2010, the Company disposed of certain inventory valued at $30,211 due to product expiration dates.
Revenue Recognition
Substantially all of the Company’s revenues are generated from NIH grants. The Company also generates revenues from the achievement of licensing milestones (in prior periods). The revenue from NIH grants is based upon subcontractor costs and internal costs incurred that are specifically covered by the grants, plus a facilities and administrative rate that provides funding for overhead expenses. These revenues are recognized when expenses have been incurred by subcontractors or when the Company incurs internal expenses that are related to the grant. Licensing milestone revenues are recorded when earned.
Research and Development Costs
Research and development costs are charged to expense when incurred. Research and development includes costs such as clinical trial expenses, contracted research and license agreement fees with no alternative future use, supplies and materials, salaries and employee benefits, equipment depreciation and allocation of various corporate costs. Purchased in-process research and development expense represents the value assigned or paid for acquired research and development for which there is no alternative future use as of the date of acquisition.
Stock-Based Compensation
From time to time, the Company issues restricted shares of common stock to vendors and consultants as compensation for services performed. Stock-based compensation expense recognized during the period is based on the fair value of the portion of share-based payment awards that is ultimately expected to vest during the period.
Stock options are issued with an exercise price equal to the market price on the date of issuance. Stock options issued to directors upon re-election vest quarterly for a period of one year (new director issuances are fully vested upon issuance). Stock options issued to employees vest 25% upfront, then 25% each subsequent year for a period of three years. Stock options vest over each three month period from the date of issuance to the end of the three year period. These options have a ten year life for as long as the individuals remain employees or directors. In general, when an employee or director terminates their position the options will expire within three months, unless otherwise extended by the Board.
Stock compensation expense for options, warrants and shares of common stock granted to non-employees has been determined in accordance with FASB ASC 718, Stock Compensation
, and FASB ASC 505-50, Equity-Based Payments to Non-Employees
, and represents the fair value of the consideration received, or the fair value of the equity instruments issued, whichever may be more reliably measured. For options that vest over future periods, the fair value of options granted to non-employee directors is amortized as the options vest. The option’s price is re-measured using the Black-Scholes model at the end of each three month reporting period.
The fair value of options in accordance with FASB ASC 718, Stock Compensation
, was estimated using the Black-Scholes option-pricing model and the following weighted-average assumptions:
The Company estimates these values based on the assumptions that have been historically available. The fair value of each option grant made during 2011 and 2010 was estimated on the date of each grant using the Black-Scholes option pricing model and is then amortized ratably over the option’s vesting periods, which approximates the service period.
There were 625,000 options exercised and 1,431,250 options expired or were forfeited during the 6 months ended June 30, 2011.
As of June 30, 2011, the Company has 27,521,677 outstanding and exercisable options.
Income Taxes
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. A valuation allowance is established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. A review of all available positive and negative evidence is considered, including the Company’s current and past performance, the market environment in which the Company operates, the utilization of past tax credits, and the length of carryback and carryforward periods. Deferred tax assets and liabilities are measured utilizing tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. No current or deferred income taxes have been provided through June 30, 2011 due to the net operating losses incurred by the Company since its inception. The Company recognizes accrued interest and penalties associated with uncertain tax positions, if any, as part of income tax expense. There were no tax related interest and penalties recorded for 2010 and 2009. Additionally, the Company has not recorded an asset for unrecognized tax benefits or a liability for uncertain tax positions at June 30, 2011 or 2010. The income tax returns for 2007, 2008 and 2009 are subject to examination by the IRS and other various taxing authorities, generally for three years after they were filed.
Earnings per Share
Basic earnings per share (“EPS”) excludes dilution and is computed by dividing income (loss) available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that shared in the earnings of the entity. Since there is a significant number of options and warrants outstanding, fluctuations in the actual market price can have a variety of results for each period presented. No options and warrants were included in the 2011 and 2010 computations of diluted earnings per share because their effect would be anti-dilutive as a result of losses in each of those years.
Shares issuable upon the exercise of options and warrants outstanding at June 30, 2011 and 2010 were 27,521,677 and 18,685,414 shares issuable upon the exercise of options, and 54,156,373 and 60,933,156 shares issuable upon the exercise of warrants, respectively. The weighted average exercise price of the Company’s stock options and warrants outstanding at June 30, 2011 were $0.24 and $0.22 per share, respectively. The weighted average exercise price of the Company’s stock options and warrants outstanding at June 30, 2010 were $0.25 and $0.24 per share, respectively.
Use of Estimates and Assumptions
The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates.
New Accounting Pronouncements
In April 2010, the FASB issued Accounting Standards Update (“ASU”) 2010-17, Revenue Recognition—Milestone Method (Topic 605) - Milestone Method of Revenue Recognition - a consensus of the FASB Emerging Issues Task Force
, which provides guidance to vendors on the criteria that should be met for determining whether the milestone method of revenue recognition is appropriate. A vendor can recognize consideration that is contingent upon achievement of a milestone in its entirety as revenue in the period in which the milestone is achieved only if the milestone meets all of the following criteria to be considered substantive. Determining whether a milestone is substantive is a matter of judgment made at the inception of the arrangement. To be considered substantive, the following criteria must be met. The consideration earned by achieving the milestone should:
A milestone should be considered substantive in its entirety. An arrangement may include more than one milestone, and each milestone should be evaluated separately to determine whether the milestone is substantive. A vendor’s decision to use the milestone method of revenue recognition for transactions within the scope of ASU 2010-17 is a policy election, and certain disclosures are required for each arrangement that includes milestone consideration accounted for in accordance with ASU 2010-17. Other proportional revenue recognition methods also may be applied as long as the application of those other methods does not result in the recognition of consideration in its entirety in the period the milestone is achieved.
The amendments in ASU 2010-17 were effective on a prospective basis for milestones achieved in fiscal years, and interim periods within those years, beginning on or after June 15, 2010 and had no impact to the Company upon adoption.
|
Subsequent Events
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Subsequent Events [Abstract] | Â |
Subsequent Events [Text Block] | Note 8. Subsequent Events
On July 28, 2011, the Company announced the expansion and amendment of its North American licensing partnership with Sigma-Tau for the development and commercialization of orBec® into the “European Territory” (as defined in amendment). Pursuant to this amendment, the Company received an up-front payment of $5 million and granted Sigma-Tau an exclusive license to commercialize orBec®
in the European Territory. The amendment requires Sigma-Tau to make additional payments to the Company in the aggregate amount of $11 million upon the achievement of milestones. Total milestone payments due from Sigma-Tau under the agreement, including the amendment, could reach up to $20 million The next milestone, a $2 million payment, will be made upon the successful completion of the confirmatory Phase 3 clinical trial of orBec®
for the treatment of GI GVHD. The amendment also requires Sigma-Tau to pay the Company a 40% royalty (
Soligenix
to provide finished drug product)
on net sales in the European Territory. Sigma-Tau will also cover all commercialization expenses, including launch activities.
On July 26, 2011, the Company and George B. McDonald, MD (“Dr. McDonald”) entered into an amendment (the “License Agreement Amendment”) to the Exclusive License Agreement dated November 24, 1998, as amended (the “License Agreement”). Under the License Agreement, Dr. McDonald would have been entitled to receive (i) $1,250,000 upon the closing of the Sigma-Tau Amendment; and (ii) $250,000 upon an approval of orBec®
by the European Medicines Agency. Pursuant to the License Agreement Amendment, the Company paid Dr. McDonald (i) $612,500 in cash and issued 1,337,793 common shares of the Company, representing $400,000 (based upon the closing price of the Company’s common stock on July 26, 2011) upon the closing of the Sigma-Tau Amendment and (ii) $400,000 in cash to be paid upon an approval of orBec®
by the European Medicines Agency.
|
Business Segments
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | Â | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting Disclosure [Text Block] | Note 9. Business Segments
The Company maintains two active business segments: BioTherapeutics and BioDefense. Each segment includes an element of overhead costs specifically associated with its operations, with its corporate shared services group responsible for support functions generic to both operating segments.
|
Commitments and Contingencies
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Commitments and Contingencies Disclosure [Abstract] | Â |
Commitments and Contingencies Disclosure [Text Block] | Note 7. Commitments and Contingencies
The Company has commitments of approximately $505,000 at June 30, 2011 in connection with an agreement with Numoda Corporation for electronic data capture in connection with its confirmatory Phase 3 clinical trial of orBec®
in the treatment of acute GI GVHD that began in September 2009 and is expected to complete in the second half of 2011.
The Company also has several licensing agreements with consultants and universities, which upon clinical or commercialization success may require the payment of milestones and/or royalties if and when achieved. However, there can be no assurance that clinical or commercialization success will occur.
On April 1, 2009, the Company entered into a sub-lease agreement through March 31, 2012 for office space in Princeton, New Jersey. The Company was required to provide 4 months of rent as a security deposit. The rent for the first 18 months was approximately $7,500 per month, or $17.00 per square foot. This rent increased to approximately $7,650 per month, or $17.50 per square foot, for the remaining 18 months. The Company records rent on a straight line basis.
In February 2007, the Company’s Board of Directors authorized the issuance of the following shares to Dr. Schaber, Mr. Myrianthopoulos, Dr. Brey and certain other employees and a consultant, upon the completion of a transaction, or series or a combination of related transactions negotiated by the Company’s Board of Directors whereby, directly or indirectly, a majority of the Company’s capital stock or a majority of its assets are transferred from the Company and/or its stockholders to a third party: 1,000,000 common shares to Dr. Schaber; 750,000 common shares to Mr. Myrianthopoulos; 200,000 common shares to Dr. Brey; and 450,000 common shares to employees and a consultant shall be issued.
Employees with employment contracts have severance agreements that may provide separation benefits from the Company if they are involuntarily separated from employment.
|
Office Furniture and Equipment
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment Disclosure [Text Block] | Note 3. Office Furniture and Equipment
Office furniture and equipment are stated at cost. Depreciation is computed on a straight-line basis over five years. Office equipment and furniture consisted of the following:
Depreciation expense was $1,809 and $1,546 for the three months ended June 30, 2011 and 2010, respectively, and $3,599 and $3,283 for the six months ended June 30, 2011 and 2010, respectively.
|
Intangible Assets
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | Â | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets Disclosure [Text Block] | Note 4. Intangible Assets
The following is a summary of intangible assets which consists of licenses and patents:
Amortization expense was $52,208 and $37,982 for the three months ended June 30, 2011 and 2010, respectively and $101,845 and $82,496 for the six months ended June 30, 2011 and 2010, respectively. For the six months ended June 30, 2010, the Company incurred $378,501 in a one-time patent write off cost related to its return of the Botulinum toxin vaccine license and abandonment of related patents. This cost is reflected in research and development expense in the consolidated statement of operations.
Based on the balance of licenses and patents at June 30, 2011, the annual amortization expense for each of the succeeding five years is estimated to be as follows:
License fees and royalty payments are expensed annually as incurred as the Company does not attribute any future benefits other than within that period.
|
Income Taxes
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Income Tax Disclosure [Abstract] | Â |
Income Tax Disclosure [Text Block] | Note 5. Income Taxes
At June 30, 2011, the Company had NOLs of approximately $78,000,000 for federal tax purposes and approximately $21,000,000 of New Jersey NOLs remaining after the sale of unused NOLs, portions of which are currently expiring each year until 2030. In addition, the Company had $2,948,000 of various tax credits that start expiring in December 2011 and will continue to expire through December 2030. The Company may be able to utilize its NOLs to reduce future federal and state income tax liabilities. However, these NOLs are subject to various limitations under Internal Revenue Code (“IRC”) Section 382. IRC Section 382 limits the use of NOLs to the extent there has been an ownership change of more than 50 percentage points over a three year period. In addition, the NOL carryforwards are subject to examination by the taxing authority and could be adjusted or disallowed due to such exams. Although the Company has not undergone an IRC Section 382 analysis, it is likely that the utilization of its NOLs may be substantially limited.
The Company and one or more of its subsidiaries files income tax returns in the U.S. Federal jurisdiction, and various state and local jurisdictions. The Company is no longer subject to Federal income tax assessment for years before 2007 and 2006 for New Jersey income tax assessment. However, since the Company has incurred net operating losses in every tax year since inception, all its income tax returns are subject to examination by the Internal Revenue Service and state authorities for purposes of determining the amount of net operating loss carryforward that can be used to reduce taxable income.
The net changes in the valuation allowance for the three and six months ended June 30, 2011 and for the year ended December 31, 2010 were an increase of approximately $1,500,000 and $1,652,000, respectively, both resulting primarily from net operating losses generated. As a result of the Company’s continuing tax losses, it has recorded a full valuation allowance against a net deferred tax asset.
The Company has no tax provision for the three and six month periods ended June 30, 2011 and 2010 due to losses and full valuation allowances against net deferred tax assets.
|
Consolidated Statements of Changes in Shareholders' Equity (USD $)
|
Common Stock
|
Additional Paid-in Capital
|
Retained Earnings
|
Total
|
---|---|---|---|---|
Beginning Balance at Dec. 31, 2010 | $ 216,192 | $ 122,880,378 | $ (115,738,779) | $ 7,357,791 |
Beginning Balance (Shares) at Dec. 31, 2010 | 216,192,360 | 0 | 0 | 0 |
Issuance of common stock pursuant to equity line agreement - Fusion | 1,423 | 253,577 | 0 | 255,000 |
Issuance of common stock pursuant to equity line agreement - Fusion (Shares) | 1,422,807 | 0 | 0 | 0 |
Issuance of common stock for option and warrant exercises | 625 | 68,125 | 0 | 68,750 |
Issuance of common stock for option and warrant exercises (Shares) | 625,000 | 0 | 0 | 0 |
Fair value of common stock warrants to vendors | 0 | 11,184 | 0 | 11,184 |
Stock-based compensation expense | 0 | 388,636 | 0 | 388,636 |
Net loss | 0 | 0 | (3,651,728) | (3,651,728) |
Balance, at Jun. 30, 2011 | $ 218,240 | $ 123,601,900 | $ (119,390,507) | $ 4,429,633 |
Balance, (Shares) at Jun. 30, 2011 | 218,240,167 | 0 | 0 | 0 |
Nature of Business
|
6 Months Ended | ||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
|||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | Â | ||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | Note 1.
Nature of Business
Basis of Presentation
Soligenix, Inc. (“Soligenix,” the “Company,” “we” or “us”) is a late-stage biopharmaceutical company that was incorporated in 1987 and is focused on developing products to treat the life-threatening side effects of cancer treatments and serious gastrointestinal diseases where there remains an unmet medical need, as well as developing several biodefense vaccines and therapeutics. The Company maintains two active business segments: BioTherapeutics and BioDefense. Soligenix’s BioTherapeutics business segment intends to develop orBec®
(oral beclomethasone dipropionate, or oral BDP) and other biotherapeutic products, while the Company’s collaboration partner, Sigma-Tau Pharmaceuticals, Inc. (“Sigma-Tau”) will commercialize orBec®
in North America and Europe, once approved. Soligenix’s BioDefense business segment intends to use RiVaxTM
, its ricin toxin vaccine, to support development efforts with its heat stabilization technology, and SGX202, its radiation injury program, to convert from early stage development to advanced development with the assistance of ongoing government grant funding.
The Company currently generates revenues primarily from the National Institutes of Health (the “NIH”) under three active grants and from its license with Sigma-Tau, once milestones are achieved.
The Company is subject to risks common to companies in the biotechnology industry including, but not limited to, development of new technological innovations, dependence on key personnel, protections of proprietary technology, compliance with FDA regulations, litigation, and product liability.
The consolidated financial statements are presented on the basis of accounting principles generally accepted in the United States of America. The accompanying consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements have been condensed or omitted from this report, as is permitted by such rules and regulations; however, the Company believes that the disclosures are adequate to make the information presented not misleading. The unaudited consolidated financial statements and related disclosures have been prepared with the presumption that users of the interim financial information have read or have access to the audited financial statements for the preceding fiscal year. Accordingly, these financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2010. Results for interim periods are not necessarily indicative of results for the full year. The Company has experienced significant quarterly fluctuations in operating results and it expects those fluctuations will continue.
Liquidity
As of June 30, 2011, the Company had cash and cash equivalents of $4,156,749 as compared to $7,451,714 as of December 31, 2010, representing a decrease of $3,294,965. As of June 30, 2011, the Company had working capital of $3,165,990 as compared to working capital of $6,101,103 as of December 31, 2010, representing a decrease of $2,935,113 or 48%. The decrease in cash and working capital was the result of cash used in operating activities over the six month period, offset by $255,000 in proceeds from issuances of common stock under the common stock purchase agreement with Fusion Capital Fund II, LLC (“Fusion Capital”). For the six months ended June 30, 2011, the Company’s cash used in operating activities was $3,506,317 as compared to $2,506,355 for the same period in 2010, representing an increase of $999,962. Based on our current rate of cash outflows, cash on hand, the timely collection of milestone payments under collaboration agreements, recently announced European territory license with Sigma-Tau which provided a $5,000,000 up front payment, proceeds from our grant-funded programs, and potential proceeds from the Fusion Capital transaction, we believe that our current cash will be sufficient to meet the anticipated cash needs for working capital and capital expenditures into the first quarter of 2013.
Management’s business strategy can be outlined as follows:
The Company’s plans with respect to its liquidity management include the following:
|
"8C.#(Q-SMS
M($)I;T1E9F5N &EN('9A8V-I;F4L('1O('-U<'!O