Re:
|
Hemispherx
Biopharma, Inc.
|
|
·
|
the
Company is responsible for the adequacy and accuracy of the disclosures in
the filing;
|
|
·
|
the
Staff comments or changes to disclosure in response to Staff comments do
not foreclose the Commission from taking any action with respect to the
filing; and
|
|
·
|
the
Company may not assert Staff comments as a defense in any proceeding
initiated by the Commission or any person under the federal securities
laws of the United States.
|
Corporate
Headquarters
|
||
One
Penn Center, 1617 JFK Blvd., Philadelphia,
PA 19103
|
t:
215-988-0080
|
f:
215-988-1739
|
Underlying
price per share
|
$0.56
- $2.54
|
Exercise
price per share
|
$1.10
– $1.65
|
Risk-free
interest rate
|
0.19%
- 2.67%
|
Expected
holding period
|
0.122
- 5.50 years
|
Expected
volatility
|
94.99%
– 226.46%
|
Expected
dividend yield
|
None
|
|
a.
|
The
Company only has one product that is FDA
approved;
|
|
b.
|
The
Company will have to perform additional clinical trials for FDA approval
of its flagship product;
|
|
c.
|
Industry
and market conditions continue to include a global market recession,
adding risk to any transaction;
|
|
d.
|
Available
capital for a potential buyer in a cash transaction continues to be
limited;
|
|
e.
|
The
nature of a life sciences company is heavily dependent on future funding
and high fixed costs, including Research &
Development;
|
|
f.
|
According
to Forbes.com, of approximately 17,000 public companies, fewer than 30
went private in 2008 and less than 100 were completed in 2007,
representing 0.18% and 0.6%, respectively. This would be
further reduced based on the nature of a life sciences company and the
potential lack of revenues, cash flows and the Company’s funding needs;
and
|
|
g.
|
The
Company's Rights Agreement makes it less attractive to a potential
buyer.
|
Range of
Probability
|
Probability
|
Low
|
0.5%
|
Medium
|
1.0%
|
High
|
5.0%
|
HEMISPHERX
BIOPHARMA, INC. AND SUBSIDIARIES
Consolidated
Balance Sheet
December
31, 2009
(in
thousands)
|
|||||||||||||
December
31, 2009
As
Previously Reported
|
Adjustments
|
December
31, 2009
As
Restated
|
|||||||||||
ASSETS
|
|||||||||||||
Current
Assets:
|
|||||||||||||
Cash
and cash equivalents
|
$ | 58,072 | $ | 58,072 | |||||||||
Prepaid
expenses and other current assets
|
332 | 332 | |||||||||||
Total
current assets
|
58,404 | 58,404 | |||||||||||
Property
and equipment, net
|
4,704 | 4,704 | |||||||||||
Patent
and trademark rights, net
|
830 | 830 | |||||||||||
Investment
|
35 | 35 | |||||||||||
Construction
in progress
|
135 | 135 | |||||||||||
Other
assets
|
886 | 886 | |||||||||||
Total
assets
|
$ | 64,994 | $ | 64,994 | |||||||||
LIABILITIES
AND STOCKHOLDERS’
EQUITY
|
|||||||||||||
Current
liabilities:
|
|||||||||||||
Accounts
Payable
|
$ | 1,294 | $ | 1,294 | |||||||||
Accrued
expenses
|
1,321 | 1,321 | |||||||||||
Total
current liabilities
|
2,615 | 2,615 | |||||||||||
Redeemable
warrants
|
— | 17,359 |
(a)
|
3,684 | |||||||||
(7,417 | ) |
(b)
|
|||||||||||
(6,258 | ) |
(b)(c)
|
|||||||||||
Total
liabilities
|
2,615 | 3,684 | 6,299 | ||||||||||
Commitment
and contingencies
|
|||||||||||||
Stockholders’
equity
|
|||||||||||||
Preferred
stock
|
— | — | |||||||||||
Common
stock
|
133 | 133 | |||||||||||
Additional
paid-in capital
|
273,093 | (17,359 | ) |
(a)
|
263,151 | ||||||||
7,417 |
(b)
|
||||||||||||
Accumulated
deficit
|
(210,847 | ) | 6,258 |
(b)(c)
|
(204,589 | ) | |||||||
Total
stockholders' equity
|
62,379 | (3,684 | ) | 58,695 | |||||||||
Total
liabilities and stockholders’ equity
|
$ | 64,994 | $ | 64,994 | |||||||||
HEMISPHERX
BIOPHARMA, INC. AND SUBSIDIARIES
Consolidated
Statement of Operations
Year
ended December 31, 2009
(in
thousands, except per share data)
|
|||||||||||||
December
31, 2009
As
Previously Reported
|
Adjustments
|
December
31, 2009
As
Restated
|
|||||||||||
Revenues:
|
|||||||||||||
Sales
of product, net
|
$ | $ | $ | ||||||||||
Clinical
treatment programs
|
111 | 111 | |||||||||||
Total
revenues
|
111 | 111 | |||||||||||
Costs
and expenses:
|
|||||||||||||
Production/cost
of goods sold
|
584 | 584 | |||||||||||
Research
and development
|
6,995 | 6,995 | |||||||||||
General
and administrative
|
5,796 | 5,796 | |||||||||||
Total
costs and expenses
|
13,375 | 13,375 | |||||||||||
Operating
loss
|
(13,264 | ) | (13,264 | ) | |||||||||
Interest
and other income
|
67 | 67 | |||||||||||
Financing
costs
|
(241 | ) | (241 | ) | |||||||||
Redeemable
warrants valuation adjustment
|
— | 6,258 |
(b)(c)
|
6,258 | |||||||||
Net
loss
|
$ | (13,438 | ) | $ | 6,258 | $ | (7,180 | ) | |||||
Basic
and diluted loss per share
|
$ | (0.12 | ) | $ | .05 | $ | (0.07 | ) | |||||
Weighted
average shares outstanding Basic and Diluted
|
109,514,401 | 109,514,401 | |||||||||||
(a)
|
The
total initial estimated fair value of the Liability related to the
Warrants was $17,359,000 at the date of their issuance in May
2009. In order to record this Liability, an adjustment will be
made to decrease Additional Paid-In Capital and increase Liabilities by
$17,359,000.
|
(b)
|
In
May 2009 and June 2009, some of these Warrants were exercised resulting in
total non-cash losses of $3,675,000. Prior to each exercise,
the individual Warrant’s fair value was revalued. The
revaluation adjustments were made to increase the above mentioned
Warrants’ Liability of $17,359,000 by the related $3,675,000 loss and
then, upon exercise, reduce the Warrants’ Liability value by $7,417,000
for the exercised Warrants.
|
(c)
|
The
estimated fair value of the Liability related to the Warrants was revalued
at the end of each fiscal quarter from June 2009 through December 31,
2009. Due to the decreasing trading value of our stock during
this period, at December 31, 2009, the value of the Liability related to
the remaining outstanding Warrants will be $3,684,000. The June
to December 2009 year to date adjustments to record the change in fair
value for the remaining Warrants’ Liability will be $9,933,000, resulting
in a related non-cash gain of
$9,933,000.
|
2008
|
2009
|
|||||||
(restated)
|
||||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents (Notes 2 & 16)
|
$ | 6,119 | $ | 58,072 | ||||
Inventories
(Note 3)
|
864 | — | ||||||
Prepaid
expenses and other current assets
|
330 | 332 | ||||||
Total
current assets
|
7,313 | 58,404 | ||||||
Property
and equipment, net (Note 2)
|
4,877 | 4,704 | ||||||
Patent
and trademark rights, net (Notes 2 & 4)
|
969 | 830 | ||||||
Investment
|
35 | 35 | ||||||
Construction
in progress (Note 2)
|
— | 135 | ||||||
Other
assets(Note 3)
|
17 | 886 | ||||||
Total
assets
|
$ | 13,211 | $ | 64,994 | ||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$ | 791 | $ | 1,294 | ||||
Accrued
expenses (Notes 2 & 5)
|
876 | 1,321 | ||||||
Total
current liabilities
|
1,667 | 2,615 | ||||||
Redeemable
warrants (Note 18)
|
— | 3,684 | ||||||
Total
liabilities
|
1,667 | 6,299 | ||||||
Commitments
and contingencies
(Notes
10, 12, 13 & 14)
|
||||||||
Stockholders’
equity (Note 7):
|
||||||||
Preferred
stock, par value $0.01 per share, authorized
5,000,000; issued and outstanding; none
|
— | — | ||||||
Common
stock, par value $0.001 per share, authorized 200,000,000 shares; issued
and outstanding 78,750,995 and 132,787,447, respectively
|
79 | 133 | ||||||
Additional
paid-in capital
|
208,874 | 263,151 | ||||||
Accumulated
deficit
|
(197,409 | ) | (204,589 | ) | ||||
Total
stockholders’ equity
|
11,544 | 58,695 | ||||||
Total
liabilities and stockholders’ equity
|
$ | 13,211 | $ | 64,994 | ||||
Years ended December
31,
|
||||||||||||
2007
|
2008
|
2009
|
||||||||||
(restated)
|
||||||||||||
Revenues:
|
||||||||||||
Sales
of product, net
|
$ | 925 | $ | 173 | $ | — | ||||||
Clinical
treatment programs
|
134 | 92 | 111 | |||||||||
Total
Revenues
|
1,059 | 265 | 111 | |||||||||
Costs
and Expenses:
|
||||||||||||
Production/cost
of goods sold
|
930 | 798 | 584 | |||||||||
Research
and development
|
10,444 | 5,800 | 6,995 | |||||||||
General
and administrative
|
8,974 | 6,478 | 5,796 | |||||||||
Total
Costs and Expenses:
|
20,348 | 13,076 | 13,375 | |||||||||
Operating
loss
|
(19,289 | ) | (12,811 | ) | (13,264 | ) | ||||||
Reversal
of previously accrued interest expense
|
346 | — | — | |||||||||
Interest
and other income
|
1,200 | 592 | 67 | |||||||||
Interest
expense
|
(116 | ) | — | — | ||||||||
Financing
costs (Note 7)
|
(280 | ) | — | (241 | ) | |||||||
Redeemable
warrants valuation adjustment (Note 18)
|
— | — | 6,258 | |||||||||
Net
loss
|
$ | (18,139 | ) | $ | (12,219 | ) | $ | (7,180 | ) | |||
Basic
and diluted loss per share
|
$ | (.25 | ) | $ | (.16 | ) | $ | (.07 | ) | |||
Weighted
average shares outstanding Basic and Diluted
|
71,839,782 | 75,142,075 | 109,514,401 | |||||||||
Common
Stock
Shares
|
Common
Stock
.001
Par Value
|
Additional
Paid—in
Capital
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Accumulated
Deficit
|
Total
Stockholders
Equity
|
|||||||||||||||||||
(Restated)
|
(Restated)
|
(Restated)
|
||||||||||||||||||||||
Balance
December 31, 2006
|
66,816,764 | $ | 67 | $ | 191,689 | $ | 46 | $ | (167,051 | ) | $ | 24,751 | ||||||||||||
Shares
issued for:
|
||||||||||||||||||||||||
Interest
on convertible debt
|
116,745 | — | 193 | — | — | 193 | ||||||||||||||||||
Private
placement, net of issuance costs
|
6,651,502 | 7 | 11,613 | — | — | 11,620 | ||||||||||||||||||
Stock
issued for settlement of accounts payable
|
175,435 | — | 292 | — | — | 292 | ||||||||||||||||||
Stock
based compensation
|
— | — | 2,291 | — | — | 2,291 | ||||||||||||||||||
Net
comprehensive loss
|
— | — | — | (53 | ) | (18,139 | ) | (18,192 | ) | |||||||||||||||
Balance
December 31, 2007
|
73,760,446 | 74 | 206,078 | (7 | ) | (185,190 | ) | 20,955 | ||||||||||||||||
Shares
issued for:
|
||||||||||||||||||||||||
Private
placement, net of issuance costs
|
1,211,122 | 1 | 269 | — | — | 270 | ||||||||||||||||||
Settlement
of accounts payable
|
3,779,427 | 4 | 1,954 | — | — | 1,958 | ||||||||||||||||||
Stock
based compensation
|
— | — | 573 | — | — | 573 | ||||||||||||||||||
Net
comprehensive loss
|
— | — | — | 7 | (12,219 | ) | (12,212 | ) | ||||||||||||||||
Balance
December 31, 2008
|
78,750,995 | 79 | 208,874 | — | (197,409 | ) | 11,544 | |||||||||||||||||
Shares
issued for:
|
||||||||||||||||||||||||
Warrants
exercised
|
5,589,790 | 6 | 6,133 | — | — | 6,139 | ||||||||||||||||||
Options
exercised
|
293,831 | — | 130 | — | — | 130 | ||||||||||||||||||
Private
placement, net of issuance costs
|
45,591,304 | 46 | 55,524 | — | — | 55,570 | ||||||||||||||||||
Settlement
of accounts payable
|
1,925,408 | 2 | 1,365 | — | — | 1,367 | ||||||||||||||||||
Stock
based compensation
|
636,119 | — | 826 | — | — | 826 | ||||||||||||||||||
Standby
Finance- finance costs
|
— | — | 241 | — | — | 241 | ||||||||||||||||||
Redeemable
warrants valuation adjustment - restated
|
— | — | (9,942 | ) | — | — | (9,942 | ) | ||||||||||||||||
Net
comprehensive loss- restated
|
— | — | — | — | (7,180 | ) | (7,180 | ) | ||||||||||||||||
Balance
December 31, 2009 — restated
|
132,787,447 | $ | 133 | $ | 263,151 | $ | — | $ | (204,589 | ) | $ | 58,695 | ||||||||||||
HEMISPHERx
BIOPHARMA, INC. AND SUBSIDIARIES
Consolidated
Statements of Cash Flows
(in
thousands)
|
||||||||||||
Years ended December 31
|
||||||||||||
2007
|
2008
|
2009
|
||||||||||
Cash
flows from operating activities:
|
(restated)
|
|||||||||||
Net
loss — restated
|
$ | (18,139 | ) | $ | (12,219 | ) | $ | (7,180 | ) | |||
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||||||
Depreciation
of property and equipment
|
266 | 342 | 359 | |||||||||
Amortization
of patent, trademark rights, and royalty interest
|
170 | 374 | 381 | |||||||||
Finance
costs amortization and for Standby
financing
|
281 | — | 241 | |||||||||
Redeemable
warrants valuation adjustment
|
— | — | (6,258 | ) | ||||||||
Stock
option and warrant compensation
and service expense
|
2,291 | 573 | 826 | |||||||||
Gain
on disposal of equipment
|
— | — | (83 | ) | ||||||||
Impairment
losses
|
526 | — | — | |||||||||
Inventory
reserve
|
109 | (65 | ) | — | ||||||||
Interest
on convertible debt
|
181 | — | — | |||||||||
Changes
in assets and liabilities:
|
||||||||||||
Inventory
|
337 | (288 | ) | — | ||||||||
Accounts
and other receivables
|
(148 | ) | 77 | — | ||||||||
Assets
held for sale
|
(678 | ) | 450 | — | ||||||||
Prepaid
expenses and other current
assets
|
22 | (184 | ) | 93 | ||||||||
Other
assets
|
— | — | (5 | ) | ||||||||
Accounts
payable
|
(138 | ) | 1,702 | 1,884 | ||||||||
Accrued
expenses
|
(192 | ) | (120 | ) | 45 | |||||||
Net
cash used in operating activities
|
(15,112 | ) | (9,358 | ) | (9,297 | ) | ||||||
Cash
flows from investing activities:
|
||||||||||||
Purchases
of property and equipment
and construction in progress, net
|
(212 | ) | (73 | ) | (332 | ) | ||||||
Additions
to patent and trademark rights
|
(211 | ) | (142 | ) | (242 | ) | ||||||
Maturities
of short term investments
|
21,132 | 3,951 | — | |||||||||
Purchase
of short term investments
|
(6,754 | ) | — | — | ||||||||
Net
cash (used in) provided by investing
activities
|
$ | 3,955 | $ | 3,736 | $ | (574 | ) | |||||
Years ended December
31,
|
||||||||||||
2007
|
2008
|
2009
|
||||||||||
Cash
flows from financing activities:
|
(restated)
|
|||||||||||
Proceeds
from issuance of common stock,
net
|
$ | 11,620 | $ | 270 | $ | 55,570 | ||||||
Payment
of long—term debt
|
(4,102 | ) | — | — | ||||||||
Collection
of advance receivable
|
1,464 | — | — | |||||||||
Proceeds
from exercise of stock Warrants
and options
|
— | — | 6,254 | |||||||||
Net
cash provided by financing activities
|
8,892 | 270 | 61,824 | |||||||||
Net
(decrease) increase in cash and
cash equivalents
|
7,825 | (5,352 | ) | 51,953 | ||||||||
Cash
and cash equivalents at beginning of year
|
3,646 | 1,471 | 6,119 | |||||||||
Cash
and cash equivalents at end of year
|
$ | 11,471 | $ | 6,119 | $ | 58,072 | ||||||
Supplemental
disclosures of cash flow information:
|
||||||||||||
Issuance
of common stock for accounts
payable and accrued expenses
|
$ | 292 | $ | 1,958 | $ | 1,382 | ||||||
Issuance
of common stock for debt
conversion, interest payments and debt payments
|
$ | 181 | — | — | ||||||||
Unrealized
gains/(losses) on investments
|
$ | (53 | ) | $ | 7 | $ | — | |||||
Redeemable
warrants valuation adjustment
|
$ | — | $ | — | $ | (6,258 | ) | |||||
|
·
|
Level
1 – Quoted prices are available in active markets for identical assets or
liabilities at the reporting date.
|
|
·
|
Level
2 – Observable inputs other than Level 1 prices such as quote prices for
similar assets or liabilities; quoted prices in markets that are not
active; or other inputs that are observable or can be corroborated by
observable market data for substantially the full term of the assets or
liabilities.
|
|
·
|
Level
3 – Unobservable inputs that are supported by little or no market activity
and that are significant to the fair value of the assets or
liabilities. Level 3 assets and liabilities include financial
instruments whose value is determined using pricing models, discounted
cash flow methodologies, or other valuation techniques, as well as
instruments for which the determination of fair value requires significant
management judgment or estimation. As of December 31, 2009, the
Company has classified the warrants with embedded call and put rights as
Level 3. Management evaluates a variety of inputs and then
estimates fair value based on those inputs. As discussed below
in Note 18 - Restatement, the Company utilized the Monte Carlo Simulation
approach in valuing these warrants.
|
Total
|
Level
1
|
Level
2
|
Level
3
|
|||||||||||||
Liabilities
|
||||||||||||||||
Warrants
|
$ | 3,684,000 | $ | — | $ | — | $ | 3,684,000 | ||||||||
Fair
Value of
Redeemable
Warrants
(
in thousands)
|
||||
Value
at issuance
|
$ | 17,359 | ||
Less:
value of warrants exercised in May and June 2009
|
(3,742 | ) | ||
Fair
value adjustment at June 30, 2009
|
7,186 | |||
Balance
at June 30, 2009
|
20,803 | |||
Fair
value adjustment at September 30, 2009
|
(4,951 | ) | ||
Balance
at September 30, 2009
|
15,852 | |||
Fair
value adjustment at December 31, 2009
|
(12,168 | ) | ||
Balance
at December 31, 2009
|
$ | 3,684 |
Underlying
price per share
|
$0.56
- $2.54
|
Exercise
price per share
|
$1.10
– $1.65
|
Risk-free
interest rate
|
0.19%
- 2.67%
|
Expected
holding period
|
0.122
- 5.50 years
|
Expected
volatility
|
94.99%
– 226.46%
|
Expected
dividend yield
|
None
|
|
a.
|
The
Company only has one product that is FDA
approved;
|
|
b.
|
The
Company will have to perform additional clinical trials for FDA approval
of its flagship product;
|
|
c.
|
Industry
and market conditions continue to include a global market recession,
adding risk to any transaction;
|
|
d.
|
Available
capital for a potential buyer in a cash transaction continues to be
limited;
|
|
e.
|
The
nature of a life sciences company is heavily dependent on future funding
and high fixed costs, including Research &
Development;
|
|
f.
|
According
to Forbes.com, of approximately 17,000 public companies, fewer than 30
went private in 2008 and less than 100 were completed in 2007,
representing 0.18% and 0.6%, respectively. This would be
further reduced based on the nature of a life sciences company and the
potential lack of revenues, cash flows and the Company’s funding needs;
and
|
|
g.
|
The
Company's Rights Agreement makes it less attractive to a potential
buyer.
|
Range of
Probability
|
Probability
|
Low
|
0.5%
|
Medium
|
1.0%
|
High
|
5.0%
|
HEMISPHERX
BIOPHARMA, INC. AND SUBSIDIARIES
Consolidated
Balance Sheet
December
31, 2009
(in
thousands)
|
|||||||||||||
December
31, 2009
As
Previously Reported
|
Adjustments
|
December
31, 2009
As
Restated
|
|||||||||||
ASSETS
|
|||||||||||||
Current
Assets:
|
|||||||||||||
Cash
and cash equivalents
|
$ | 58,072 | $ | 58,072 | |||||||||
Prepaid
expenses and other current assets
|
332 | 332 | |||||||||||
Total
current assets
|
58,404 | 58,404 | |||||||||||
Property
and equipment, net
|
4,704 | 4,704 | |||||||||||
Patent
and trademark rights, net
|
830 | 830 | |||||||||||
Investment
|
35 | 35 | |||||||||||
Construction
in progress
|
135 | 135 | |||||||||||
Other
assets
|
886 | 886 | |||||||||||
Total
assets
|
$ | 64,994 | $ | 64,994 | |||||||||
LIABILITIES
AND STOCKHOLDERS’
EQUITY
|
|||||||||||||
Current
liabilities:
|
|||||||||||||
Accounts
Payable
|
$ | 1,294 | $ | 1,294 | |||||||||
Accrued
expenses
|
1,321 | 1,321 | |||||||||||
Total
current liabilities
|
2,615 | 2,615 | |||||||||||
Redeemable
warrants
|
— | 17,359 |
(a)
|
3,684 | |||||||||
(7,417 | ) |
(b)
|
|||||||||||
(6,258 | ) |
(b)(c)
|
|||||||||||
Total
liabilities
|
2,615 | 3,684 | 6,299 | ||||||||||
Commitment
and contingencies
|
|||||||||||||
Stockholders’
equity
|
|||||||||||||
Preferred
stock
|
— | — | |||||||||||
Common
stock
|
133 | 133 | |||||||||||
Additional
paid—in capital
|
273,093 | (17,359 | ) |
(a)
|
263,151 | ||||||||
7,417 |
(b)
|
||||||||||||
Accumulated
deficit
|
(210,847 | ) | 6,258 |
(b)(c)
|
(204,589 | ) | |||||||
Total
stockholders' equity
|
62,379 | (3,684 | ) | 58,695 | |||||||||
Total
liabilities and stockholders’ equity
|
$ | 64,994 | $ | 64,994 | |||||||||
HEMISPHERX
BIOPHARMA, INC. AND SUBSIDIARIES
Consolidated
Statement of Operations
Year
ended December 31, 2009
(in
thousands, except per share data)
|
||||||||||||||||
December
31, 2009
As
Previously Reported
|
Adjustments
|
December
31, 2009
As
Restated
|
||||||||||||||
Revenues:
|
||||||||||||||||
Sales
of product, net
|
$ | $ | $ | |||||||||||||
Clinical
treatment programs
|
111 | 111 | ||||||||||||||
Total
revenues
|
111 | 111 | ||||||||||||||
Costs
and expenses:
|
||||||||||||||||
Production/cost
of goods sold
|
584 | 584 | ||||||||||||||
Research
and development
|
6,995 | 6,995 | ||||||||||||||
General
and administrative
|
5,796 | 5,796 | ||||||||||||||
Total
costs and expenses
|
13,375 | 13,375 | ||||||||||||||
Operating
loss
|
(13,264 | ) | (13,264 | ) | ||||||||||||
Interest
and other income
|
67 | 67 | ||||||||||||||
Financing
costs
|
(241 | ) | (241 | ) | ||||||||||||
Redeemable
warrants valuation adjustment
|
— | 6,258 |
(b)(c)
|
6,258 | ||||||||||||
Net
loss
|
$ | (13,438 | ) | $ | 6,258 | $ | (7,180 | ) | ||||||||
Basic
and diluted loss per share
|
$ | (0.12 | ) | $ | .04 | $ | (0.07 | ) | ||||||||
Weighted
average shares outstanding Basic and Diluted
|
109,514,401 | 109,514,401 | ||||||||||||||
(a)
|
The
total initial estimated fair value of the Liability related to the
Warrants was $17,359,000 at the date of their issuance in May
2009. In order to record this Liability, an adjustment will be
made to decrease Additional Paid-In Capital and increase Liabilities by
$17,359,000.
|
(b)
|
In
May 2009 and June 2009, some of these Warrants were exercised resulting in
total non-cash losses of $3,675,000. Prior to each exercise,
the individual Warrant’s fair value was revalued. The
revaluation adjustments was made to increase the above mentioned Warrants’
Liability of $17,359,000 by the related $3,675,000 loss and then, upon
exercise, reduce the Warrants’ Liability value by $7,417,000 for the
exercised Warrants.
|
(c)
|
The
estimated fair value of the Liability related to the Warrants was revalued
at the end of each fiscal quarter from June 2009 through December 31,
2009. Due to the decreasing trading value of our stock during
this period, at December 31, 2009, the value of the Liability related to
the remaining outstanding Warrants will be $3,684,000. The June
to December 2009 year to date adjustments to record the change in fair
value for the remaining Warrants’ Liability will be $9,933,000, resulting
in a related non-cash gain of
$9,933,000.
|
2008
|
||||||||||||||||||||
(in
thousands except per share data)
|
||||||||||||||||||||
March
31, 2008
|
June
30, 2008
|
September
30, 2008
|
December
31, 2008
|
Total
|
||||||||||||||||
Revenues
|
$ | 208 | $ | 15 | $ | 17 | $ | 25 | $ | 265 | ||||||||||
Costs
and expenses
|
(3,453 | ) | (3,145 | ) | (3,468 | ) | (3,010 | ) | (13,076 | ) | ||||||||||
Financing
costs
|
— | — | — | — | — | |||||||||||||||
Interest
& other
|
||||||||||||||||||||
income
|
80 | 328 | 36 | 148 | 592 | |||||||||||||||
Redeemable
warrants
|
||||||||||||||||||||
valuation
adjustment
|
— | — | — | — | — | |||||||||||||||
Net
loss
|
$ | (3,165 | ) | $ | (2,802 | ) | $ | (3,415 | ) | $ | (2,837 | ) | $ | (12,219 | ) | |||||
Basic
and diluted loss
per share
|
$ | (.04 | ) | $ | (.04 | ) | $ | (.05 | ) | $ | (.03 | ) | $ | (.16 | ) |
2009
As Previously Stated
|
||||||||||||||||||||
(in
thousands except per share data)
|
||||||||||||||||||||
March
31, 2009
|
June
30, 2009
|
September
30, 2009
|
December
31, 2009
|
Total
|
||||||||||||||||
(previously
|
(previously
|
(previously
|
(previously
|
(previously
|
||||||||||||||||
reported)
|
reported)
|
reported)
|
reported)
|
reported
|
||||||||||||||||
Revenues
|
$ | 29 | $ | 17 | $ | 25 | $ | 40 | $ | 111 | ||||||||||
Costs
and expenses
|
(2,882 | ) | (3,996 | ) | (2,483 | ) | (4,014 | ) | (13,375 | ) | ||||||||||
Finance
Costs
|
(241 | ) | — | — | — | (241 | ) | |||||||||||||
Interest
& other
|
||||||||||||||||||||
Income
(expense)
|
7 | 109 | 23 | (72 | ) | 67 | ||||||||||||||
Redeemable
warrants
|
||||||||||||||||||||
valuation
adjustment
|
— | — | — | — | — | |||||||||||||||
Net
loss
|
$ | (3,087 | ) | $ | (3,870 | ) | $ | (2,435 | ) | $ | (4,046 | ) | $ | (13,438 | ) | |||||
Basic
and diluted loss
per share
|
$ | (.04 | ) | $ | (.04 | ) | $ | (.02 | ) | $ | (.03 | ) | $ | (.12 | ) |
2009
Restated As Necessary
|
||||||||||||||||||||
(in
thousands except per share data)
|
||||||||||||||||||||
March
31, 2009
|
June
30, 2009
|
September
30, 2009
|
December
31, 2009
|
Total
|
||||||||||||||||
(previously
|
(restated)
|
(restated)
|
(restated)
|
(restated)
|
||||||||||||||||
reported)
|
||||||||||||||||||||
Revenues
|
$ | 29 | $ | 17 | $ | 25 | $ | 40 | $ | 111 | ||||||||||
Costs
and expenses
|
(2,882 | ) | (3,996 | ) | (2,483 | ) | (4,014 | ) | (13,375 | ) | ||||||||||
Finance
costs
|
(241 | ) | — | — | — | (241 | ) | |||||||||||||
Interest
& other
|
||||||||||||||||||||
Income
(expense)
|
7 | 109 | 23 | (72 | ) | 67 | ||||||||||||||
Redeemable
warrants
|
||||||||||||||||||||
valuation
adjustment
|
— | (10,861 | ) | 4,950 | 12,169 | 6,258 | ||||||||||||||
Net
loss
|
$ | (3,087 | ) | $ | (14,731 | ) | $ | 2,515 | $ | 8,123 | $ | (7,180 | ) | |||||||
Basic
and diluted loss
per share
|
$ | (.04 | ) | $ | (.15 | ) | $ | .02 | $ | .06 | $ | (.07 | ) |
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