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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Helix Biomedix Inc (PK) | USOTC:HXBM | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 23.50 | 18.10 | 24.00 | 0.00 | 13:08:30 |
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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Sincerely,
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R. STEPHEN BEATTY
President and Chief Executive Officer
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each share of Common Stock held of record by a stockholder owning fewer than 300 shares immediately prior to the effective time of the Reverse Stock Split (the “
Cashed-Out Stockholders
”) will be converted into the right to receive $0.60 in cash per pre-split share of Common Stock, subject to any applicable U.S. federal, state and local withholding tax, and without interest; and
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stockholders that hold at least one share of Common Stock after the Reverse Stock Split will continue as our stockholders (the “
Continuing Stockholders
”), and to the extent the amount of shares owned by such Continuing Stockholders following the Reverse Stock Split is not equally divisible by 300, any resulting fractional shares will remain as fractional shares and such Continuing Stockholders will not be entitled to receive any cash payment.
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if a stockholder held of record 299 shares of our Common Stock immediately prior to the effective time of the Reverse Stock Split, such shares would be converted into the right to receive an aggregate of $179.40 on a pre-split basis as a result of the Reverse Stock Split, subject to any applicable U.S. federal, state and local withholding tax, and without interest;
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if a stockholder held of record 300 shares of our Common Stock immediately prior to the effective time of the Reverse Stock Split, such stockholder would continue as a Continuing Stockholder and would hold of record one share of our Common Stock as a result of the Reverse Stock Split; and
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if a stockholder held of record 301 shares of our Common Stock immediately prior to the effective time of the Reverse Stock Split, such stockholder would continue as a Continuing Stockholder and would hold of record one whole share of our Common Stock and 1/300 fractional share of our Common Stock as a result of the Reverse Stock Split and would not be entitled to receive any cash payment.
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By Order of the Board of Directors,
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R. STEPHEN BEATTY
President and Chief Executive Officer
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Page
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SUMMARY TERM SHEET
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1
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The Reverse Stock Split
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1
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Purposes of and Reasons for the Reverse Stock Split
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2
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Fairness of the Reverse Stock Split
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2
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Disadvantages of the Reverse Stock Split
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3
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Recommendation of the Special Committee and Approval of the Board
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4
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Voting Information
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5
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Effects of the Reverse Stock Split
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5
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Opinion of Advisor to the Special Committee
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6
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Material U.S. Federal Income Tax Consequences of the Reverse Stock Split
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6
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Source and Amount of Funds and Expenses
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Effectiveness of the Reverse Stock Split
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Termination of Reverse Stock Split
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No Appraisal or Dissenters’ Rights
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6 |
QUESTIONS AND ANSWERS ABOUT THE REVERSE STOCK SPLIT AND THE MEETING
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7
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Where and when is the Meeting?
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7
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What am I being asked to vote on at the Meeting?
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7
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How does the Board recommend that I vote on the proposal?
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7
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How will the Reverse Stock Split affect our day-to-day operations?
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7
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How did the Special Committee and Board determine the Reverse Stock Split ratio of 1-for-300?
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7
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What potential conflicts of interest are posed by the Reverse Stock Split?
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7
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What if I hold fewer than 300 shares of Common Stock and hold all of my shares in street name?
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8
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What happens if I own a total of 300 or more shares of Common Stock beneficially through multiple brokerage firms in street name, or through a combination of record ownership in my name and one or more brokerage firms in street name?
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8
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If I am a Cashed-Out Stockholder, will I have to pay a service charge or brokerage commission in connection with the Reverse Stock Split? |
8
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If I own fewer than 300 shares of Common Stock, is there any way I can continue to be a stockholder after the Reverse Stock Split?
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8
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Is there anything I can do if I own 300 or more shares of Common Stock, but would like to take advantage of the opportunity to receive cash for my shares as a result of the Reverse Stock Split?
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8
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Who is entitled to vote at the Meeting?
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8
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How many shares were outstanding on the Record Date?
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9
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What is a “quorum” for purposes of the Meeting?
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9
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What vote is required to approve the proposal?
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9
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What is a “broker non-vote”?
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9
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How are abstentions counted?
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9
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What will happen if the proposal to amend our Certificate of Incorporation to effect the Reverse Stock Split is approved by our stockholders?
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9
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What will happen if the proposal to amend our Certificate of Incorporation to effect the Reverse Stock Split is not approved?
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9
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If the proposal to amend our Certificate of Incorporation to effect the Reverse Stock Split is approved by the stockholders, can the Board determine not to proceed with the Reverse Stock Split?
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10
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Should I send in my stock certificates now?
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10
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What is the total cost of the Reverse Stock Split to Helix?
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10
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How do I vote?
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10
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Can I change my vote?
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10
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What does it mean if I receive more than one proxy card?
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10
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Who are the filing persons?
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11
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Who can help answer my questions?
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11
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SPECIAL FACTORS
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12
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Background of the Reverse Stock Split
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12
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Purposes of and Reasons for the Reverse Stock Split
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13
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Fairness of the Reverse Stock Split
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15
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Alternatives Considered
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18
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Recommendation of the Special Committee and Approval of the Board
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Voting Information
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19
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Effects of the Reverse Stock Split
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19
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Opinion of Cascadia Capital
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24
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Conduct of Our Business After the Reverse Stock Split
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31
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Material U.S. Federal Income Tax Consequences of the Reverse Stock Split
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31
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Potential Conflicts of Interests of Officers, Directors and Certain Affiliated Persons
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34
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Sources and Amounts of Funds and Expenses
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36
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Effective Time
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36
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Termination of Reverse Stock Split
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37
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Process for Payment for Fractional Shares Held by Cashed-Out Stockholders
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37
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No Appraisal or Dissenters’ Rights
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38
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Escheat Laws
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38
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Regulatory Approvals
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38
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Litigation
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38
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
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39
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INFORMATION ABOUT THE COMPANY
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39
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Name and Address
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39
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Securities | 39 |
Market Price of Common Stock
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39
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Dividends
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40
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Prior Public Offerings
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40
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Stock Purchases
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40
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Certain Information Concerning Us, Our Directors and Executive Officers and Other Affiliates
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40
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Security Ownership of Certain Beneficial Owners and Management
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42
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Certain Relationships and Related Transactions
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43
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INFORMATION ABOUT THE MEETING
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44
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Record Date and Outstanding Shares
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44
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Proxies and Solicitation of Proxies
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Stockholders of Record and “Street Name” Holders
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45
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Voting Procedures
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45
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Revocability of Proxies
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45
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Effect of Not Submitting a Proxy Card; Broker Non-Votes
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Quorum and Voting
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46
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FINANCIAL INFORMATION
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47
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Summary Historical Financial Information
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47
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Pro Forma Financial Statements (Unaudited)
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49
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STOCKHOLDER COMMUNICATION AND PROXY PROPOSALS
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52
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PROXY MATERIALS DELIVERED TO A SHARED ADDRESS
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52
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WHERE YOU CAN FIND MORE INFORMATION
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52
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
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53
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OTHER BUSINESS
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53
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After consideration of numerous factors, including the recommendation of the Special Committee, the Board has reviewed, recommended and authorized the Reverse Stock Split.
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As a result of the Reverse Stock Split:
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each share of Common Stock held of record by a Cashed-Out Stockholder immediately prior to the effective time of the Reverse Stock Split will be converted into the right to receive $0.60 in cash per pre-split share of Common Stock, subject to any applicable U.S. federal, state and local withholding tax, and without interest; and
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stockholders that hold at least one share of Common Stock after the Reverse Stock Split will continue as Continuing Stockholders, and any resulting fractional shares owned by such Continuing Stockholders following the Reverse Stock Split will remain outstanding as fractional shares and such Continuing Stockholders will not be entitled to receive any cash payment.
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At the Meeting, stockholders are being asked to consider and vote upon a proposal to amend our Certificate of Incorporation to effect the Reverse Stock Split. A copy of the proposed amendment to our Certificate of Incorporation to effect the Reverse Stock Split is attached as
Annex A
to this proxy statement.
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We anticipate that the Reverse Stock Split itself will have very little effect on our business and operations and that ultimately it will eliminate costs associated with our reporting obligations under the Exchange Act, reduce management time spent on compliance and disclosure matters attributable to our Exchange Act filings, and therefore enable management to increase its focus on managing our business and growing stockholder value. We anticipate that our Common Stock will likely be traded on the Pink Sheets following the Reverse Stock Split, but there can be no assurance of any trading in, or market for, our Common Stock following the Reverse Stock Split. While we will no longer be under a legal obligation to file financial or other reports with the SEC, we intend to maintain communications with our Continuing Stockholders. We plan to make available our audited financial statements as well as to provide periodic interim financial updates to Continuing Stockholders.
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The Board has reserved the right to abandon the Reverse Stock Split if it believes the Reverse Stock Split is no longer in our best interests, if, for example, there is any change in the number of our shares that will be exchanged for cash in connection with the Reverse Stock Split that would increase the anticipated cost and expense of the Reverse Stock Split, and the Board has retained authority, in its discretion, to withdraw the Reverse Stock Split from the agenda of the Meeting prior to any vote. In addition, even if the Reverse Stock Split is approved by stockholders at the Meeting, the Board may determine not to implement the Reverse Stock Split if it subsequently determines that the Reverse Stock Split is not in our best interests, and the Board could propose an alternative transaction to the Reverse Stock Split on different terms and conditions, including, without limitation, a reverse stock split at a lower cash-out price.
In such event, we would file a revised proxy statement and re-solicit proxies from our stockholders.
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anticipated annual cost savings we expect to realize as a result of the suspension of our reporting obligations under the Exchange Act, including the costs of preparing and filing periodic reports with the SEC, related accounting fees and costs, ongoing expenses for compliance with the Sarbanes-Oxley Act of 2002, as amended (the “
Sarbanes-Oxley Act
”), and the expected increased compliance costs associated with the Dodd–Frank Wall Street Reform and Consumer Protection Act (the “
Dodd-Frank Act
”) relating to executive compensation and corporate governance requirements, and other legal, printing and other miscellaneous costs associated with being a public reporting company, which we estimate to be approximately $350,000 per year, including estimated executive and administrative time incurred in complying with SEC reporting requirements;
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the ability of our management to gain greater operational flexibility by being able to devote more time to our business operations and to focus on long-term growth without an undue emphasis on short-term quarterly results and short-term fluctuations in the market price of our Common Stock;
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not being required to make publicly available certain proprietary or otherwise sensitive information about our business, operations and contractual relationships, which our competitors may otherwise be able use to their competitive advantage;
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the limited benefits from being a public reporting company. Benefits of being a public reporting company typically include access to the public markets for purposes of raising capital, acquisitions and liquidity purposes, and the prestige of being a public reporting company, which can be helpful in recruiting, attracting and retaining key officers, directors and staff. To date, we have not utilized our status as a public reporting company to achieve these benefits; and
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the limited public trading volume and liquidity of our Common Stock and the diffuse and fragmented nature of our stockholder base. There is a relatively illiquid and limited trading market in our shares, and currently more than 350 stockholders each hold of record fewer than 100 shares of Common Stock. As a result, our stockholders currently have limited opportunity to liquidate their investment in us, and the transaction costs associated with open market sales make that alternative impractical for many of our stockholders given their relatively small holdings. Cashed-Out Stockholders (those holding of record fewer than 300 shares of Common Stock) will have the opportunity to obtain cash for their shares at a premium over the closing price for our shares of Common Stock at the time of our announcement of the Reverse Stock Split,
likely without incurring brokerage commissions. We believe that no service charge or brokerage commission will be payable by any Cashed-Out Stockholder in connection with the cash-out of shares in the Reverse Stock Split, but it is possible that individual brokers and agents may impose certain charges and fees in connection with this transaction. We recommend you contact your broker or agent to determine if there are any applicable fees in connection with the cash-out transaction.
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anticipated annual cost savings we expect to realize as a result of the suspension of our reporting obligations under the Exchange Act, including the costs of preparing and filing periodic reports with the SEC, related accounting fees and costs, ongoing expenses for compliance with the Sarbanes-Oxley Act and the Dodd-Frank Act, and other legal, printing, and other miscellaneous costs associated with being a public reporting company, which we estimate to be approximately $350,000 per year, including estimated executive and administrative time incurred in complying with SEC reporting requirements;
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with respect to the consideration to be paid to the Cashed-Out Stockholders, the fairness opinion rendered by Cascadia Capital, LLC (“
Cascadia Capital
”), dated August 16, 2012, to the effect that, as of the date and based upon the assumptions made, matters considered and limits of review set forth in Cascadia Capital’s written opinion, the consideration to be received by the Cashed-Out Stockholders pursuant to the Reverse Stock Split of $0.60 per share is fair, from a financial point of view, to such stockholders;
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the limited trading volume and liquidity of our Common Stock and the diffuse and fragmented nature of our stockholder base, which effectively limits the ability of our stockholders to liquidate their investment in us and, given the transaction costs associated with open market sales, makes it impractical for many of our stockholders to do so given their relatively small holdings;
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the opportunity the Reverse Stock Split affords Cashed-Out Stockholders (those holding of record fewer than 300 shares of Common Stock) to obtain cash for their shares in a relatively limited trading market and at a premium over the market price prevailing at the time of our public announcement of the Reverse Stock Split;
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the $0.60 cash-out price per share represents an approximately 88% premium over the average closing share price for the 30-day period ended August 15, 2012, which was prior to the Board’s approval of the Reverse Stock Split, an approximately 71% premium over the average closing share price for the 60-day period ended August 15, 2012, an approximately 67% premium over the average closing share price for the 90-day period ended August 15, 2012, an approximately 67% premium over the average closing share price for the 120-day period ended August 15, 2012 and an approximately 216% premium over the $0.19 closing share price of Common Stock on September 10, 2012, the day immediately prior to our announcement of the Reverse Stock Split;
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the $0.60 conversion price at which we completed a tender offer in December 2010, and the value associated with our Common Stock in connection with the LOC Agreement we entered into on March 9, 2012, as discussed below under “Special Factors—Background of the Reverse Stock Split” beginning on page ♦;
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the Reverse Stock Split will not affect holders of our Common Stock differently based on their affiliate status, and our officers, directors and significant stockholders will all be treated similarly to unaffiliated stockholders;
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stockholders that desire to retain their equity interest in us after the Reverse Stock Split can do so if they hold 300 shares of Common Stock or more prior to the effective time of the Reverse Stock Split, thereby avoiding being cashed-out. However, given the historically limited liquidity in our Common Stock, we cannot assure you that any shares will be available for purchase and thus there can be no assurance that you will be able to acquire sufficient shares to meet or exceed the required 300 shares. Following the Reverse Stock Split, we anticipate that our Common Stock will likely be traded on the Pink Sheets, but there can be no assurance of any trading in, or market for or opportunity to purchase, our Common Stock following the Reverse Stock Split. While we will no longer be under a legal obligation to file financial or other reports with the SEC, we intend to maintain communications with our Continuing Stockholders. We plan to make available our audited financial statements as well as to provide periodic interim financial updates to Continuing Stockholders; and
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the lack of attractive strategic alternatives.
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the recommendation of the Special Committee, based on the analyses and factors described herein which were adopted by the Board; and
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with respect to the consideration to be paid to the Cashed-Out Stockholders, the fairness opinion rendered by Cascadia Capital dated August 16, 2012 to the effect that, as of the date of, and based upon the assumptions made, matters considered and limits of review set forth in Cascadia Capital’s written opinion, the consideration to be received by the Cashed-Out Stockholders pursuant to the Reverse Stock Split is fair, from a financial point of view, to such stockholders.
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Cashed-Out Stockholders will no longer have any ownership interest in us and will no longer participate in any future earnings and growth, unless they elect to acquire shares in the future. However, given the historically limited liquidity in our stock, there can be no assurance that any shares will be available for purchase in the future.
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We will cease to file annual, quarterly, current and other reports and documents with the SEC, and Continuing Stockholders will cease to receive annual reports and proxy statements as required under the Exchange Act. While we intend to continue to make available audited financial statements as well as to provide periodic interim financial updates to Continuing Stockholders, we will not be under any continuing obligation to do so. We will not be providing periodic reports in the format currently required of us under the provisions of the Exchange Act, and as a result, while we intend to continue to maintain ongoing communications with our Continuing Stockholders, those stockholders will have access to less information about us and our business, operations, and financial performance.
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While we anticipate that our Common Stock will likely be traded on the Pink Sheets, trading opportunities in the Pink Sheets will be dependent upon whether any broker-dealers commit to make a market for our Common Stock. We cannot guarantee whether our Common Stock will be traded on the Pink Sheets. In addition, because of the possible limited liquidity for our Common Stock and the suspension of our obligations to publicly disclose financial and other information following the Reverse Stock Split, Continuing Stockholders (including Continuing Stockholders who are our officers, directors and/or significant stockholders) may potentially experience a decrease in the value of their Common Stock.
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We will no longer be subject to the corporate governance compliance and disclosure obligations and other provisions of the Sarbanes-Oxley Act that were designed to protect investors or the liability provisions of the Exchange Act (other than the general anti-fraud provisions thereof). In addition, certain rights and protections that the federal securities laws provide to stockholders of public reporting companies will cease and the suspension of our reporting obligations under the Exchange Act will make many of the provisions of the Exchange Act that are intended to protect investors, such as the proxy solicitation rules under Section 14, the stock ownership reporting rules under Section 13, and the reporting obligations and short-swing profit provisions under Section 16, no longer applicable.
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We estimate that the cost of payment to Cashed-Out Stockholders, professional fees and other expenses related to the Reverse Stock Split will total approximately $430,000.
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The Reverse Stock Split will result in the suspension, and not the termination, of our reporting obligations under the Exchange Act. If on the first day of any fiscal year after the suspension of our filing obligations we have more than 500 stockholders of record (or more than 300 stockholders of record if our total assets have exceeded $10 million on the last day of any our three most recent fiscal years), then we must resume reporting pursuant to Section 15(d) of the Exchange Act, which would result in our once again incurring many of the expenses that we expect to save by virtue of the Reverse Stock Split and suspending our reporting obligations.
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Under Delaware law, our Certificate of Incorporation and our bylaws, no appraisal or dissenters’ rights are available to our stockholders who dissent from the Reverse Stock Split.
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The lack of liquidity provided by a ready market may result in fewer opportunities to utilize equity-based incentive compensation tools to recruit and retain top executive talent.
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Our Common Stock may be a less attractive acquisition currency, as a recipient of less liquid securities of a non-reporting company must depend on liquidity either via negotiated buy-out or buy-back arrangements or a liquidity event by us that is generally outside of our control.
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Following the Reverse Stock Split, since we will no longer be filing the periodic reports and proxy statements required under the Exchange Act, it may be more difficult, costly and time consuming for us to raise equity capital from public or private sources.
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Companies that lose status as a public reporting company may risk losing prestige in the eyes of the public, the investment community and key constituencies.
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The transaction may be taxable for Cashed-Out Stockholders.
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Each share of Common Stock held of record by a Cashed-Out Stockholder immediately prior to the effective time of the Reverse Stock Split will be converted into the right to receive $0.60 in cash per pre-split share of Common Stock, subject to any applicable U.S. federal, state and local withholding tax, and without interest. For example, if a stockholder held of record 299 shares of our Common Stock immediately prior to the effective time of the Reverse Stock Split, such shares would be converted into the right to receive an aggregate of $179.40 on a pre-split basis as a result of the Reverse Stock Split, subject to any applicable U.S. federal, state and local withholding tax, and without interest.
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Stockholders that hold at least one share of Common Stock after the Reverse Stock Split will continue as Continuing Stockholders, and any resulting fractional shares owned by such Continuing Stockholders following the Reverse Stock Split will remain outstanding as fractional shares and such Continuing Stockholders will not be entitled to receive any cash payment. For example, if a stockholder held of record 301 shares of our Common Stock immediately prior to the effective time of the Reverse Stock Split, such stockholder would continue as a Continuing Stockholder and would hold of record one whole share of our Common Stock and 1/300 fractional share of our Common Stock as a result of the Reverse Stock Split and would not be entitled to receive any cash payment.
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We expect that the number of our stockholders of record will be reduced below 500, which will allow us to suspend our reporting obligations under the Exchange Act pursuant to Rule 12h-3 of the Exchange Act, and we will be able to eliminate most of the expenses related to the disclosure, reporting and compliance requirements of the Exchange Act, including ongoing expenses for compliance with the Sarbanes-Oxley Act.
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Certain rights and protections that the federal securities laws provide to stockholders of public reporting companies will cease to be available and the suspension of our reporting obligations under the Exchange Act will make many of the provisions of the Exchange Act that are intended to protect investors, such as the proxy solicitation rules under Section 14, the stock ownership reporting rules under Section 13, and the reporting obligations and short-swing profit provisions under Section 16, no longer applicable, and the Sarbanes-Oxley Act, which imposed many additional rules and regulations on public reporting companies that were designed to protect investors, including substantive disclosure requirements, will no longer apply to us.
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Liquidity for our Common Stock following the Reverse Stock Split is likely to be limited due to the fact that we will no longer file the reports required by the Exchange Act. While we anticipate that our Common Stock will likely be traded on the Pink Sheets following the Reverse Stock Split, there can be no assurance of any trading in, or market for, our Common Stock following the Reverse Stock Split.
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While we will no longer be under a legal obligation to file financial or other reports with the SEC, we intend to maintain communications with our Continuing Stockholders. We plan to make available our audited financial statements as well as to provide periodic interim financial updates to Continuing Stockholders. However, since our obligation to file periodic and other filings with the SEC will be suspended, those stockholders may have access to less information about us and our business, operations and financial performance.
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Upon the effectiveness of the Reverse Stock Split and as a result of the reduction of the number of shares of Common Stock outstanding by approximately 200,000 shares, the ownership percentage of our shares of Common Stock held by Continuing Stockholders, including our affiliates, will increase proportionally. The increase in the ownership percentage of our shares of Common Stock held by Continuing Stockholders, including our affiliates, and the reduction in the number of shares outstanding following the completion of the Reverse Stock Split is based upon information we received as of October 31, 2012 from our transfer agent, American Stock Transfer and Trust Company (our “
Transfer Agent
”), as to our record holders, and information we have received regarding the holdings of beneficial owners of our Common Stock held in street name. The ownership percentage and the reduction in the number of shares outstanding following the Reverse Stock Split may increase or decrease depending on purchases, sales and other transfers of our shares of Common Stock prior to the effective time of the Reverse Stock Split and the number of shares held in street name that are actually cashed-out in the Reverse Stock Split. The ownership percentage of our shares of Common Stock held by our affiliates and the ownership percentage of Continuing Stockholders will proportionally increase or decrease as a result of such purchases, sales and other transfers of our shares of Common Stock prior to the effective time of the Reverse Stock Split, and depending on the number of street name shares that are actually cashed-out in the Reverse Stock Split.
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Based upon the Reverse Stock Split ratio of 1-for-300, proportionate adjustments will be required to be made to the per share exercise price and the number of shares issuable upon the exercise of all outstanding stock options granted under our equity incentive plans. All other terms and conditions of the options will continue to be governed by such plans.
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Based upon the Reverse Stock Split ratio of 1-for-300, proportionate adjustments will be required to be made to the per share exercise price and the number of shares issuable upon the exercise of all of our outstanding warrants. All other terms and conditions of the warrants will continue to be governed by the applicable warrant agreements.
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if you voted by telephone or via the internet, by voting again by telephone or via the internet no later than 11:59 p.m. Eastern Time on
♦
, 2012;
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if
you completed and returned a proxy card, by submitting a new signed proxy card with a later date and returning to American Stock Transfer and Trust Company, Attn.: Proxy Department, 6201 15th Avenue, Brooklyn, New York 11219-9821 so that it is received by ♦, 2012;
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by submitting written notice of revocation to American Stock Transfer and Trust Company, Attn.: Proxy Department, 6201 15th Avenue, Brooklyn, New York 11219-9821 so that it is received by ♦, 2012; or
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by attending the Meeting and either voting in person or specifically requesting at the Meeting to revoke your proxy.
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each share of Common Stock held of record by a Cashed-Out Stockholder immediately prior to the effective time of the Reverse Stock Split will be converted into the right to receive $0.60 in cash per pre-split share of Common Stock, subject to any applicable U.S. federal, state and local withholding tax, and without interest; and
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·
|
stockholders that hold at least one share of Common Stock after the Reverse Stock Split will continue as Continuing Stockholders, and any resulting fractional shares owned by such Continuing Stockholders following the Reverse Stock Split will remain outstanding as fractional shares and such Continuing Stockholders will not be entitled to receive any cash payment.
|
Fiscal Year Ended | ||||||||||||
2012 (est.)
|
2011
|
2010
|
||||||||||
Legal, Audit, Audit-Related Fees, and Tax
|
$ | 274,000 | $ | 270,000 | $ | 277,000 | ||||||
Sarbanes-Oxley Act and Other SEC Compliance
|
$ | 46,000 | $ | 30,000 | $ | 25,000 | ||||||
Transfer Agent and Filing Costs
|
$ | 43,000 | $ | 42,000 | $ | 48,000 | ||||||
Totals
|
$ | 363,000 | $ | 342,000 | $ | 350,000 |
|
·
|
access to the public markets for purposes of raising capital and for acquisitions;
|
|
·
|
access to public markets for liquidity purposes for our stockholders; and
|
|
·
|
the prestige of being a public reporting company, which can be helpful in recruiting, attracting and retaining key officers, directors and staff.
|
|
·
|
Each share of Common Stock held of record by a Cashed-Out Stockholder immediately prior to the effective time of the Reverse Stock Split will be converted into the right to receive $0.60 in cash per pre-split share of Common Stock, subject to any applicable U.S. federal, state and local withholding tax, and without interest.
|
|
·
|
Stockholders that hold at least one share of Common Stock after the Reverse Stock Split will continue as Continuing Stockholders, and any resulting fractional shares owned by such Continuing Stockholders following the Reverse Stock Split will remain outstanding as fractional shares and such Continuing Stockholders will not be entitled to receive any cash payment.
|
|
·
|
We expect to have fewer than 500 record holders of Common Stock following the Reverse Stock Split, and, therefore (given that our total assets have not exceeded $10 million on the last day of any our three most recent fiscal years), we expect to be eligible to suspend our reporting obligations under the Exchange Act pursuant to Rule 12h-3 of the Exchange Act, including the requirement to file annual and periodic reports and other filings required under the federal securities laws that are applicable to public reporting companies, and eliminate most of the expenses related to the disclosure, reporting and compliance requirements of the Exchange Act.
|
|
·
|
a review of the following documents:
|
|
o
|
our annual reports on Form 10-K and related financial information for the years ended December 31, 2009 through December 31, 2011;
|
|
o
|
our quarterly reports on Form 10-Q and the related unaudited financial information for the periods ended March 31, 2012 and June 30, 2012;
|
|
o
|
subscription and related documents describing the terms and conditions of our recent financings, including the note conversion and warrant exercise transactions in 2010;
|
|
o
|
a draft of this proxy statement prepared in connection with the Reverse Stock Split; and
|
|
o
|
certain information, including historical financial data and certain internally prepared non-detailed prospective financial information (which information is set forth below under “Opinion of Cascadia Capital – Discounted Cash Flow Analysis” and constitutes the only prospective financial information provided by us to Cascadia Capital), relating to the business, earnings, cash flow, assets and prospects of us, furnished to Cascadia Capital by us or publicly available;
|
|
·
|
conducted discussions with our senior management and members of our Board concerning our business and
prospects, including discussions and review of informally prepared, non-detailed prospective financial information for 2012 through 2016;
|
|
·
|
consulted with KPMG LLP, our independent registered public accounting firm, regarding our accounting policies and recent audits;
|
|
·
|
reviewed the historical market prices and trading activity of our Common Stock, as set forth below;
|
|
·
|
compared certain financial and market information for us with that of selected publicly traded companies which Cascadia Capital deemed to be relevant;
|
|
·
|
compared the financial terms of the Reverse Stock Split with those of certain other transactions which Cascadia Capital deemed to be relevant; and
|
|
·
|
reviewed our current capitalization and the general composition of our stockholder base.
|
|
·
|
assumed and relied upon, without any independent verification, the accuracy and completeness of the financial and other information provided to or discussed with, or reviewed by, Cascadia Capital for the purpose of its opinion;
|
|
·
|
assumed
, without any independent verification, the reasonableness and accuracy of the prospective non-public financial information provided to Cascadia Capital by us and assumed that such prospective non-public financial information had been reasonably prepared in good faith and on bases reflecting the best currently available judgments and estimates of our management; however, because of the informality of such prospective non-public financial information and the lack of detail in such information, Cascadia Capital did not rely or express any opinion with respect to such prospective non-public financial information or the assumptions upon which it was based;
|
|
·
|
did not review any of our books and records, did not speak with any commercial partners or customers, and did not assume any responsibility for conducting a physical inspection of our properties or facilities;
|
|
·
|
did not make any independent valuation or appraisal of our assets or liabilities;
|
|
·
|
assumed that all governmental, regulatory or other consents and approvals necessary for the consummation of the Reverse Stock Split will be obtained without any adverse effect on the Reverse Stock Split;
|
|
·
|
was not asked to, nor did it, offer any opinion as to our underlying business decision or the relative merits of the Reverse Stock Split in comparison to other business strategies or transactions that might be available to us;
|
|
·
|
was not asked to, nor did it, offer any opinion regarding the non-financial terms of the Reverse Stock Split;
|
|
·
|
was not asked to, nor did it, offer any opinion regarding whether any alternative transaction might produce consideration for the Cashed-Out Stockholders in excess of the amount contemplated in the Reverse Stock Split; and
|
|
·
|
was not asked to, nor did it, offer any opinion as to the fairness, from a financial point of view or otherwise, of the Reverse Stock Split as it relates to those stockholders that are not Cashed-Out Stockholders.
|
Announce
Date
|
Description
|
Total Raised/Price
per Share
2
|
Common
Shares Issued
|
May 2003
|
Common stock with warrants
|
$3,800,000 / $1.00
|
3.8 million common
|
May 2004
|
Private placement of common stock with warrants
|
$2,368,000 / $2.00
|
1,184,000 common / 414,400 warrants
|
February 2005
|
Private placement of common stock with warrants
|
$2,497,750 / $1.50
|
1,665,167 common / 125,000 warrants
|
March 2006
|
Private placement of common stock with warrants
|
$2,598,000 / $1.00
|
2,598,000 common / 259,800 warrants
|
February 2008/ June 2008
|
Convertible notes
|
$3,000,000
|
No new shares issued/ warrants issued at $1.00 strike
|
February 2009
|
Convertible notes with warrants
|
$3,474,000
|
No new shares issued / warrants issued at $1.00 strike
|
March 2010/ May 2010
|
Convertible notes with warrants
|
$3,200,000
|
No new shares issued / warrants issued at $0.80 strike
|
December 2010
|
Private placement of common shares
|
$599,839 / $0.60
|
999,731 common
|
Announce
Date
|
Description
|
Amount/Price
per Share
|
Common
Shares Issued
|
November 22, 2010
|
Amended convertible note and converted to common stock
|
$3,665,425 / $0.60
|
6,109,041 common shares
|
Amended convertible note and converted to common stock
|
$2,326,334 / $0.60
|
3,877,223 common shares
|
|
Warrant exercise
|
$750,000 / $0.50
|
1,500,000 common shares
|
|
Warrant exercise
|
$440,000 / $0.40
|
1,100,000 common shares
|
|
November 27, 2010
|
Exercise of convertible note
|
$3,877,164 / $0.60
|
6,461,921 common shares
|
Exercise of convertible note
|
$1,060,099 / $0.60
|
1,766,827 common shares
|
|
Warrant Exercise
|
$726,000 / $0.50
|
1,452,000 common shares
|
|
Warrant Exercise
|
$200,000 / $0.40
|
500,000 common shares
|
|
Warrant Exercise
|
$150,000 / $0.50
|
300,000 common shares
|
|
Weighted average exercise price per share of $0.57
|
·
|
Analysis of public market trading comparables;
|
|
·
|
Analysis of comparable transactions;
|
·
|
Discounted cash flow analysis;
|
·
|
Analysis of private investments in comparable public companies; and
|
·
|
Analysis of premiums paid by other firms in comparable going-private transactions.
|
Methodology
|
Selection Criteria
|
|
Business Model
|
■
■
|
Research, develop and produce ingredients sold into over-the-counter health and beauty products
Broad product/technology portfolio that companies either license or use to develop their own products
|
Customer Base
|
■
■
|
Larger health and beauty product producing companies
Retail, spas, salons or ecommerce websites
|
Size
|
■
|
Publicly traded company enterprise value of less than $500 million
|
Markets
|
■
|
No limitation was given to geography or exchange where the comparable company traded
|
Company
|
Basilea
Pharmaceutica
AG
|
Anacor
Pharmaceuticals,
Inc.
|
Cosmo
Pharmaceuticals
S.p.A.
|
Zhejiang
Hangzhou Xinfu
Pharmaceutical
Co., Ltd.
|
Goangdong
Taiantang
Pharmaceutical
Co., Ltd.
|
Divine Skin, Inc.
|
||||||||||||||||||||||
Ticker |
SWX:BSLN
|
NasdaqGM:ANAC
|
SWX:COPN
|
SZSE:002019
|
SZSE:002433
|
OTCPK:DSKX
|
Median
|
Mean
|
||||||||||||||||||||
Price as of 8/15/2012
|
$ | 51.31 | $ | 6.15 | $ | 25.58 | $ | 0.88 | $ | 4.02 | $ | 0.34 | ||||||||||||||||
Shares Outstanding
|
9.6 | 31.5 | 13.7 | 220.4 | 100.0 | 107.3 | ||||||||||||||||||||||
Equity Value
|
$ | 491.8 | $ | 193.8 | $ | 349.3 | $ | 193.2 | $ | 402.5 | $ | 36.5 | ||||||||||||||||
Plus: Debt
|
– | 17.5 | 2.7 | 82.9 | 42.1 | – | ||||||||||||||||||||||
Plus: Pref. Equity
|
– | – | – | – | – | 0.0 | ||||||||||||||||||||||
Plus: Minority Interest
|
– | – | 0.3 | 0.4 | 2.1 | – | ||||||||||||||||||||||
Less: Cash
|
(201.7 | ) | (58.0 | ) | (16.7 | ) | (18.7 | ) | (28.2 | ) | (0.9 | ) | ||||||||||||||||
Enterprise Value
|
$ | 290.1 | $ | 153.4 | $ | 335.5 | $ | 257.9 | $ | 418.4 | $ | 35.6 | ||||||||||||||||
Enterprise Value as a Multiple of Revenue | ||||||||||||||||||||||||||||
Revenue ($ in millions):
|
||||||||||||||||||||||||||||
LTM
|
(1) | $ | 68.4 | $ | 20.5 | 43.5 | $ | 84.2 | $ | 70.8 | $ | 9.4 | ||||||||||||||||
2012 | E | 40.5 | 15.0 | 73.0 | - | 94.5 | - | |||||||||||||||||||||
2013 | E | 48.5 | 14.3 | 65.8 | - | 124.5 | - | |||||||||||||||||||||
Implied Multiple:
|
||||||||||||||||||||||||||||
LTM
|
(1) | 4.2 | x | 7.5 | x | 7.7 | x | 3.1 | x | 5.9 | x | 3.8 | x |
5.1x
|
5.4x
|
|||||||||||||
2012 | E | 7.2 | x | 10.2 | x | 4.6 | x |
NM
|
4.4 | x |
NM
|
5.9x
|
6.6x
|
|||||||||||||||
2013 | E | 6.0 | x | 10.7 | x | 5.1 | x |
NM
|
3.4 | x |
NM
|
5.5x
|
6.3x
|
Methodology
|
Selection Criteria
|
|
Business Model
|
■
■
|
Research, develop and produce ingredients sold into over-the-counter health and beauty products
Broad product/technology portfolio that companies either license or use to develop their own products
|
Customer Base
|
■
■
|
Larger health and beauty product producing companies
Retail, spas, salons or ecommerce websites
|
Size
|
■
|
Transaction enterprise value of less than $500 million
|
Markets
|
■
|
No limitation was given to geography or exchange where the comparable company traded
|
($ in millions) | ||||||||||||
Date | Enterprise | EV/LTM | ||||||||||
Announced
|
Target Name
|
Acquiror Name
|
Description
|
Value
|
Revenue
|
EBITDA
|
||||||
4/5/2011
|
Inspire Pharmaceuticals, Inc.
|
Merck & Co. Inc.
|
Focuses on developing and commercializing ophthalmic products. The company offers AzaSite, an azithromycin ophthalmic solution and topical anti-infective for the treatment of bacterial conjunctivitis, and various other products. |
$375.4
|
3.6x
|
NM
|
||||||
9/13/2010
|
Synthetech Inc.
|
W. R. Grace & Co.- Conn
|
Manufactures fine chemicals and intermediates. It offers specialty amino acids, peptide fragments, chiral intermediates, organometallics, and boronic acids. |
$17.2
|
1.4x
|
NM
|
||||||
6/15/2010
|
Eurogentec S.A.
|
Kaneka Corporation
|
Manufactures oligonucleotides, antibodies, proteins, plasmids, peptides, arrays, and real-time qPCR kits that support research institutions, as well as biotech, diagnostic, and pharmaceutical companies; and kits and consumables, diagnostic oligos and antibodies, and proteinarrays. |
$63.9
|
1.3x
|
NA
|
||||||
3/1/2010
|
ScinoPharm Taiwan, Ltd.
|
Uni-President Enterprises Corp.
|
Engages in the process research and development, production, and sale of cGMP active pharmaceutical ingredients (APIs) to pharmaceutical and biotechnology companies primarily in Taiwan, Europe, and North America. |
$308.1
|
2.6x
|
8.5x
|
||||||
2/12/2010
|
ISOCHEM S.A.S
|
Aurelius AG
|
Manufactures and supplies fine chemicals to the pharmaceutical industry worldwide. The company offers phosgene derivatives, functional intermediates, and active ingredients, including aminoacid derivatives, phosgene derivatives, heterocycles, amines, esters, ketones, alcools, acids, hydrazines, and other building blocks. |
$79.0
|
0.5x
|
NA
|
||||||
1/9/2010
|
Infinitec Activos, S.L.
|
Undisclosed
|
Engages in the research and development of active ingredients for the cosmetic industry. Its products include aqueous phase nanotechnology, nano LPD's, ultra thin molecular films, hair micro adhesives, oceanspheres, synthetic peptides, neuropeptides, peptidic hybridation, peptidic nanoconjugation, peptidic complex, and polarsome. The company sells its products through distributors worldwide. |
$2.4
|
2.3x
|
NA
|
Range: Select M&A Transactions
|
||||
High
|
$375.4
|
3.6x
|
8.5x | |
Median
|
$71.4
|
1.9x
|
8.5x
|
|
Mean
|
$141.0
|
1.9x
|
8.5x
|
|
Low
|
$2.4
|
0.5x
|
8.5x
|
2012E | 2013E | 2014E | 2015E | 2016E | ||||||||||||||||
Revenue
|
$ | 2,500.0 | $ | 4,000.0 | $ | 6,400.0 | $ | 10,000.0 | $ | 16,000.0 | ||||||||||
Gross Profit
|
1,500.0 | 2,600.0 | 4,200.0 | 6,500.0 | 10,400.0 | |||||||||||||||
Gross Profit ‐ %
|
60.0 | % | 65.0 | % | 65.6 | % | 65.0 | % | 65.0 | % | ||||||||||
Fixed Expenses
|
(4,300.0 | ) | (4,700.0 | ) | (5,200.0 | ) | (5,700.0 | ) | (6,300.0 | ) | ||||||||||
Cash Flow
|
(2,800.0 | ) | (2,100.0 | ) | (1,000.0 | ) | 800.0 | 4,100.0 | ||||||||||||
Discounted Cash Flow
|
(2,504.4 | ) | (1,502.6 | ) | (572.4 | ) | 366.4 | 1,502.1 | ||||||||||||
NPV of Cash Flow
|
$ | (2,711.0 | ) | (76 | %) | |||||||||||||||
Terminal Value
|
6,290.0 | 176 | % | |||||||||||||||||
Enterprise Value
|
$ | 3,578.9 | ||||||||||||||||||
Plus: Cash
|
1,163.5 | |||||||||||||||||||
Less: Debt
|
– | |||||||||||||||||||
Equity Value
|
$ | 4,742.5 | ||||||||||||||||||
Shares Outstanding (000ʹs)
|
49,720.3 | |||||||||||||||||||
Implied Price per Share
|
$ | 0.10 |
2012E
|
2013E
|
2014E
|
2015E
|
2016E
|
||||||||||||||||
Revenue
|
$
|
2,353,379
|
$
|
3,619,000
|
$
|
5,777,500
|
$
|
7,765,000
|
$
|
9,816,000
|
||||||||||
Gross Profit
|
$
|
1,661,145
|
$
|
2,449,000
|
$
|
3,859,500
|
$
|
5,126,250
|
$
|
6,508,050
|
||||||||||
Gross Profit
‐
%
|
70.59
|
%
|
67.67
|
%
|
66.79
|
%
|
66.02
|
%
|
66.30
|
%
|
Methodology
|
Selection Criteria
|
|
Business Model
|
■
■
|
Research, develop and produce ingredients sold into over-the-counter health and beauty products
Broad product/technology portfolio that companies either license or use to develop their own products
|
Customer Base
|
■
■
|
Larger health and beauty product producing companies
Retail, spas, salons or ecommerce websites
|
Markets
|
■
|
No limitation was given to geography or exchange where the comparable company traded
|
($ in millions)
|
||||||||||||
Date
|
Enterprise
|
EV/LTM
|
Premium/
|
|||||||||
Announced
|
Target Name
|
Description
|
Value
|
Revenue
|
EBITDA
|
(Discount)
|
||||||
3/23/2012
|
Chongqing Huapont Pharm Co. Ltd. |
Private placement of 25,000,000 A shares of common at not less than
CNY 36 per share
|
$2,093.7
|
21.1x
|
86.4x
|
-7.0%
|
||||||
1/18/2012
|
Goangdong Taiantang
Pharmaceutical Co., Ltd.
|
Private placement of 39,000,000 A shares at not less than CNY 20.55
per share for gross proceeds of not more than CNY 801,892,000
|
$453.4
|
6.9x
|
29.4x
|
-10%
|
||||||
10/4/2011
|
Divine Skin, Inc.
|
Company has raised $1,730,000 by issuing 6,178,571 shares to four
investors
|
$28.1
|
3.4x
|
NM
|
-26%
|
Range: Select M&A Transactions
|
|||||
High
|
$2,093.7
|
21.1x
|
86.4x
|
-7%
|
|
Median
|
$453.4
|
6.9x
|
57.9x
|
-10%
|
|
Mean
|
$858.4
|
10.5x
|
57.9x
|
-14%
|
|
Low
|
$28.1
|
3.4x
|
29.4x
|
-26%
|
Date
|
Tender | T-1 Stock | ||||||||
Announced
|
Company Name | Description | Offer Price | Price | Premium | |||||
05/05/2009
|
CallWave, Inc. |
CallWave, a global provider of mobile and Web-based unified
communications solutions, held a tender offer for their shares at
$1.15. The company had a goal of reducing shareholders of record
below 300 to take the company private.
|
$1.15
|
$0.80 | 43.8% |
As a Multiple of Revenue | ||||||||||||||||
($ in Millions except for Share Prices)
|
Revenue Multiple
|
Valuation
|
Implied Share Price
|
|||||||||||||
Metric |
Low
|
High |
Low
|
High
|
Low
|
High | ||||||||||
Transaction Comparables
|
$2.2
|
1.6x
|
- | 2.1x |
$3.5
|
– |
$4.7
|
$0.09
|
– | $0.12 | ||||||
3/31/12 LTM Revenue
(1)
|
Trading Comparables
|
$2.2
|
4.3x
|
- | 5.8x |
$9.6
|
– |
$12.9
|
$0.22
|
– | $0.28 | |||||
PIPE Comparables
|
$2.2
|
5.8x
|
- | 7.9x |
$12.9
|
– |
$17.5
|
$0.28
|
– | $0.37 | ||||||
As a premium or current stock price (2) | ||||||||||||||||
Metric
|
Premium/(Discount) |
Implied Price Per Share
|
||||||||||||||
PIPE Premium (Discount)
|
$0.28 | -10% | $0.25 | |||||||||||||
Take Private Tender
|
$0.28 | 44% | $0.40 | |||||||||||||
Average Price Range
|
$0.25
|
– | $0.29 | |||||||||||||
(1)Valuation multiples based on LTM 3/31/2012 revenue
|
||||||||||||||||
(2)Helix stock price represents a 30-day VWAP
|
|
·
|
Complete Termination
. A U.S. Holder’s exchange of Common Stock for cash in the Reverse Stock Split generally will result in a “complete termination” of such holder’s interest in us if, in connection with the Reverse Stock Split, either (i) all of the Common Stock actually and constructively owned by such holder is exchanged for cash, or (ii) all of the shares of Common Stock actually owned by such holder is exchanged for cash, and, with respect to constructively owned shares of Common Stock, such holder is eligible to waive (and effectively waives) constructive ownership of all such Common Stock under procedures described in Section 302(c) of the Code.
|
|
·
|
Substantially Disproportionate Redemption.
A U.S. Holder’s exchange of Common Stock for cash in the Reverse Stock Split generally will be “substantially disproportionate” with respect to such holder if, among other things, immediately after the exchange (
i.e.
, treating all Common Stock exchanged for cash in the Reverse Stock Split as no longer outstanding), (i) such holder’s percentage ownership of our voting stock is less than 80% of such holder’s percentage ownership of our voting stock immediately before the exchange (
i.e.
, treating all Common Stock exchanged for cash in the Reverse Stock Split as outstanding), and (ii) such holder owns less than 50% of the total combined voting power of all classes of our stock entitled to vote. For purposes of these percentage ownership tests, a holder will be considered as owning Common Stock owned directly as well as indirectly through application of the constructive ownership rules described above.
|
|
·
|
Not Essentially Equivalent to a Dividend.
In order for a U.S. Holder’s exchange of Common Stock for cash in the Reverse Stock Split to qualify as “not essentially equivalent to a dividend,” such holder must experience a “meaningful reduction” in its proportionate interest in us as a result of the exchange, taking into account the constructive ownership rules described above. Whether a U.S. Holder’s exchange of Common Stock pursuant to the Reverse Stock Split will result in a “meaningful reduction” of such holder’s proportionate interest in us will depend on such holder’s particular facts and circumstances. The IRS has indicated in a published ruling that even a small reduction in the proportionate interest of a small minority stockholder (for example, less than 1%) in a publicly held corporation who exercises no control over corporate affairs may constitute a “meaningful reduction.”
|
Name of Officer or Director
|
Number of Shares of Common Stock Subject to Option
|
Exercise Price ($)
|
Date of Grant
|
Vesting Schedule
|
Expiration Date
|
|
R. Stephen Beatty, Director, Chief Executive Officer and President
|
324,000
|
1.00
|
7/1/2003
|
Fully vested
|
7/1/2013
|
|
165,000
|
0.57
|
10/30/2008
|
Fully vested
|
10/30/2018
|
||
100,000
|
0.34
|
2/3/2010
|
2,777.77 shares/month until 2/3/13
|
2/3/2020
|
||
200,000
|
0.25
|
2/16/2012
|
Fully vested
|
2/16/2022
|
||
500,000
|
0.25
|
2/16/2012
|
166,666.66 shares vested on 2/16/13, 13,888.88 shares/month thereafter
|
2/16/2022
|
||
TOTAL
|
1,289,000
|
|||||
Robin L. Carmichael, Vice President and Chief Operating Officer
|
150,000
|
0.50
|
11/15/2007
|
Fully vested
|
11/15/2017
|
|
100,000
|
0.34
|
2/3/2010
|
2,777.77 shares/month until 2/3/13
|
2/3/2020
|
||
200,000
|
0.25
|
2/16/2012
|
Fully vested
|
2/16/2022
|
||
150,000
|
0.25
|
2/16/2012
|
50,000 shares vested on 2/16/13, 4,166.66 shares/month thereafter
|
2/16/2022
|
||
TOTAL
|
600,000
|
|||||
Randall L-W Caudill, D. Phil., Director
|
15,000
|
1.75
|
12/31/2004
|
Fully vested
|
12/31/2014
|
|
15,000
|
1.50
|
8/11/2005
|
Fully vested
|
8/11/2015
|
||
15,000
|
0.85
|
2/16/2006
|
Fully vested
|
2/16/2016
|
||
15,000
|
0.76
|
1/9/2007
|
Fully vested
|
1/9/2017
|
||
15,000
|
0.80
|
2/7/2008
|
Fully vested
|
2/7/2018
|
||
15,000
|
0.49
|
2/5/2009
|
Fully vested
|
2/5/2019
|
15,000
|
0.30
|
2/4/2010
|
Fully vested
|
2/4/2020
|
||
15,000
|
0.30
|
3/4/2011
|
Fully vested
|
3/4/2021
|
||
25,000
|
0.25
|
2/16/2012
|
Quarterly until 2/16/13
|
2/16/2022
|
||
TOTAL
|
145,000
|
|||||
John F. Clifford, Director
|
25,000
|
0.77
|
8/31/2007
|
Fully vested
|
8/31/2017
|
|
15,000
|
0.80
|
2/7/2008
|
Fully vested
|
2/7/2018
|
||
15,000
|
0.49
|
2/5/2009
|
Fully vested
|
2/5/2019
|
||
15,000
|
0.30
|
2/4/2010
|
Fully vested
|
2/4/2020
|
||
15,000
|
0.30
|
3/4/2011
|
Fully vested
|
3/4/2021
|
||
25,000
|
0.25
|
2/16/2012
|
Quarterly until 2/16/13
|
2/16/2022
|
||
TOTAL
|
110,000
|
|||||
Richard M. Cohen, Director
|
25,000
|
0.85
|
2/16/2006
|
Fully vested
|
2/16/2016
|
|
15,000
|
0.76
|
1/9/2007
|
Fully vested
|
1/9/2017
|
||
15,000
|
0.80
|
2/7/2008
|
Fully vested
|
2/7/2018
|
||
15,000
|
0.49
|
2/5/2009
|
Fully vested
|
2/5/2019
|
||
15,000
|
0.30
|
2/4/2010
|
Fully vested
|
2/4/2020
|
||
15,000
|
0.30
|
3/4/2011
|
Fully vested
|
3/4/2021
|
||
25,000
|
0.25
|
2/16/2012
|
Quarterly until 2/16/13
|
2/16/2022
|
||
TOTAL
|
125,000
|
|||||
Lawrence Blake Jones, Director
|
25,000
|
0.19
|
3/5/2010
|
Fully vested
|
3/5/2020
|
|
15,000
|
0.30
|
3/4/2011
|
Fully vested
|
3/4/2021
|
||
25,000
|
0.25
|
2/16/2012
|
Quarterly until 2/16/13
|
2/16/2022
|
||
TOTAL
|
65,000
|
|||||
Jeffrey A. Miller, Ph.D., Director
|
15,000
|
1.75
|
12/31/2004
|
Fully vested
|
12/31/2014
|
|
15,000
|
1.50
|
8/11/2005
|
Fully vested
|
8/11/2015
|
||
15,000
|
0.85
|
2/16/2006
|
Fully vested
|
2/16/2016
|
||
15,000
|
0.76
|
1/9/2007
|
Fully vested
|
1/9/2017
|
||
15,000
|
0.80
|
2/7/2008
|
Fully vested
|
2/7/2018
|
||
15,000
|
0.49
|
2/5/2009
|
Fully vested
|
2/5/2019
|
||
15,000
|
0.30
|
2/4/2010
|
Fully vested
|
2/4/2020
|
||
15,000
|
0.30
|
3/4/2011
|
Fully vested
|
3/4/2021
|
||
25,000
|
0.25
|
2/16/2012
|
Quarterly until 2/16/13
|
2/16/2022
|
||
TOTAL
|
145,000
|
|||||
Barry L. Seidman, Director
|
25,000
|
1.48
|
11/10/2004
|
Fully vested
|
11/10/2014
|
|
15,000
|
0.85
|
2/16/2006
|
Fully vested
|
2/16/2016
|
||
15,000
|
0.76
|
1/9/2007
|
Fully vested
|
1/9/2017
|
||
15,000
|
0.80
|
2/7/2008
|
Fully vested
|
2/7/2018
|
||
15,000
|
0.49
|
2/5/2009
|
Fully vested
|
2/5/2019
|
||
15,000
|
0.30
|
2/4/2010
|
Fully vested
|
2/4/2020
|
||
15,000
|
0.30
|
3/4/2011
|
Fully vested
|
3/4/2021
|
||
25,000
|
0.25
|
2/16/2012
|
Quarterly until 2/16/13
|
2/16/2022
|
||
TOTAL
|
140,000
|
Legal and Accounting Fees
|
$
|
180,000
|
Fairness Opinion
|
55,000
|
|
Payment for Fractional Shares
|
120,000
|
|
Transfer Agent Costs
|
30,000
|
|
SEC Filing, Printing and Mailing Costs
|
45,000
|
|
Total Expenses
|
$
|
430,000
|
|
·
|
any change in the nature of our stockholdings prior to the effective time of the Reverse Stock Split, which would result in us being unable to reduce the number of record holders of our shares to below 500 as a result of the Reverse Stock Split;
|
|
·
|
any change in the number of our record holders that would enable us to suspend our periodic reporting obligations under the Exchange Act without effecting the Reverse Stock Split;
|
|
·
|
any change in the number of our shares that will be exchanged for cash in connection with the Reverse Stock Split that would increase the cost and expense of the Reverse Stock Split from that which is currently anticipated;
|
|
·
|
any changes in the regulatory environment that would affect our status as a public reporting company or otherwise; or
|
|
·
|
any adverse change in our financial condition that would render the Reverse Stock Split inadvisable.
|
|
·
|
the letter of transmittal sent by us;
|
|
·
|
the above-referenced affidavit;
|
|
·
|
the above-referenced indemnity agreement; and
|
|
·
|
any other document required by us, which may include a bond or other security satisfactory to us indemnifying us and our other persons against any losses incurred as a consequence of paying cash in lieu of issuing fractional shares of our Common Stock in exchange for the existing shares of our Common Stock evidenced or purported to be evidenced by such lost or destroyed certificate.
|
|
·
|
the occurrence of any event, change or other circumstance that could give rise to the abandonment of the Reverse Stock Split;
|
|
·
|
the failure of the Reverse Stock Split to be consummated for any other reason;
|
|
·
|
the outcome of any legal proceedings that may be instituted against us and others relating to the Reverse Stock Split or the suspension of our reporting obligations under the Exchange Act;
|
|
·
|
the occurrence of any event, change or other circumstance that could prevent or delay us from suspending our reporting obligations under the Exchange Act, including, without limitation, any failure of the Reverse Stock Split to result in the reduction of the number of our stockholders of record to below 500;
|
|
·
|
the effect of the Reverse Stock Split and the suspension of our reporting obligations under the Exchange Act on our customer relationships, operating results and business generally;
|
|
·
|
any changes in applicable laws or regulations to which we may be subject;
|
|
·
|
the amount of the costs, fees, expenses and charges related to the Reverse Stock Split and the other transactions described herein; and
|
|
·
|
the amount of cost savings that we expect to achieve as a result of suspending our reporting obligations under the Exchange Act.
|
Year ended December 31,
|
||||||||||||||||||||||||
2012
|
2011
|
2010
|
||||||||||||||||||||||
High
|
Low
|
High
|
Low
|
High
|
Low
|
|||||||||||||||||||
First Quarter
|
$
|
0.31
|
$
|
0.25
|
$
|
0.45
|
$
|
0.20
|
$
|
0.40
|
$
|
0.19
|
||||||||||||
Second Quarter
|
$
|
0.44
|
$
|
0.25
|
$
|
0.45
|
$
|
0.22
|
$
|
0.43
|
$
|
0.22
|
||||||||||||
Third Quarter
|
0.40
|
0.15
|
$
|
0.45
|
$
|
0.15
|
$
|
0.49
|
$
|
0.20
|
||||||||||||||
Fourth Quarter (as of October 31, 2012)
|
$
|
0.35
|
$
|
0.23
|
$
|
0.59
|
$
|
0.23
|
Name
|
Age
|
Director Since
|
Directorship Term/Class*
|
Committee Memberships
|
||||
R. Stephen Beatty
|
63
|
1999
|
2015/III
|
None
|
||||
Randall L-W. Caudill, D. Phil.
|
65
|
2001
|
2013/I
|
Audit Committee
|
||||
Governance Committee
|
||||||||
John F. Clifford
|
70
|
2007
|
2015/III
|
Compensation Committee
|
||||
Richard M. Cohen
|
61
|
2005
|
2013/I
|
Audit Committee (Chairman)
|
||||
Lawrence Blake Jones
|
66
|
2010
|
2015/III
|
Audit Committee
|
||||
Governance Committee
|
||||||||
Jeffrey A. Miller, Ph.D.
|
64
|
1999
|
2014/II
|
Compensation Committee (Chairman)
|
||||
Governance Committee (Chairman)
|
||||||||
Barry L. Seidman
|
67
|
2004
|
2013/I
|
Compensation Committee
|
*
|
Terms expire as of the date of our annual stockholder meeting in the year indicated, provided however that directors hold office until their successors are elected and qualified or until their earlier death, resignation or removal.
|
|
·
|
each stockholder known to us to be a beneficial owner of more than 5% of the outstanding shares of our Common Stock;
|
|
·
|
each of our executive officers;
|
|
·
|
each of our directors; and
|
|
·
|
all of our directors and executive officers as a group.
|
Name of Beneficial Owner
|
Number of Shares of Common Stock Beneficially Owned Prior to Reverse Stock Split(1)
|
Percentage
Ownership Prior to Reverse Stock Split (2)
|
Number of Shares of Common Stock Beneficially Owned After Reverse Stock Split(1)
|
Percentage Ownership After Reverse Stock Split (2)
|
||||||||
Frank T. Nickell(3)
|
21,912,799
|
42.4%
|
73,040 | 42.5% | ||||||||
RBFSC Inc. (4)
|
17,636,264
|
35.5%
|
58,786 | 35.6% | ||||||||
David B. Nickell(5)
|
4,831,598
|
9.7%
|
16,105 | 9.8% | ||||||||
R. Stephen Beatty(6)
|
905,654
|
1.8%
|
3,018 | 1.8% | ||||||||
Robin L. Carmichael(7)
|
441,667
|
*
|
1,472 | * | ||||||||
Randall L-W. Caudill, D. Phil.(8)
|
153,750
|
*
|
512 | * | ||||||||
John F. Clifford(9)
|
103,750
|
*
|
345 | * | ||||||||
Richard M. Cohen(10)
|
118,750
|
*
|
395 | * | ||||||||
Lawrence Blake Jones (11)
|
1,454,671
|
2.9%
|
4,848 | 2.9% | ||||||||
Jeffrey A. Miller, Ph.D.(12)
|
298,737
|
*
|
995 | * | ||||||||
Barry L. Seidman(13)
|
1,446,013
|
2.9%
|
4,819 | 2.9% | ||||||||
Directors and executive officers as a group (8 persons)(14)
|
4,922,992
|
9.5%
|
16,404 | 9.6% |
*
|
Indicates that beneficial ownership is less than 1% of the class
|
(1)
|
Beneficial ownership is determined in accordance with the rules of the SEC. Beneficial ownership calculations include shares for which the named person has sole or shared power over voting or investment decisions. The number of shares of Common Stock beneficially owned also includes Common Stock which the named person has the right to acquire, through conversion, option or warrant exercise or otherwise, as of October 31, 2012 or within 60 days after that date.
|
(2)
|
Percentage ownership is based on a total of 49,720,255 shares of Common Stock outstanding as of October 31, 2012. For each named person, the percentage ownership includes stock that the person has the right to acquire within 60 days after October 31, 2012, as described in footnote 1 above. However, such shares are not deemed outstanding in the calculation of ownership percentage for any other person.
|
(3)
|
Mr. Frank Nickell’s address is 320 Park Avenue, 24th Floor, New York, NY 10022. Includes 17,636,264 shares of Common Stock held by RBFSC Inc., of which Mr. Frank Nickell is president and a director, and 2,000,000 shares of Common Stock issuable pursuant to warrants held by Mr. Frank Nickell.
|
(4)
|
The address for RBFSC Inc. is 320 Park Avenue, 24th Floor, New York, NY 10022. Mr. Frank Nickell is the president and a director of RBFSC Inc.
|
(5)
|
David B. Nickell is the brother of Mr. Frank Nickell.
|
(6)
|
Includes 780,667 shares of Common Stock issuable pursuant to options held by Mr. Beatty.
|
(7)
|
Consists of 441,667 shares of Common Stock issuable pursuant to options held by Ms. Carmichael.
|
(8)
|
Consists of 15,000 shares of Common Stock issuable pursuant to warrants and 138,750 shares of Common Stock issuable pursuant to options held by Dr. Caudill.
|
(9)
|
Consists of 103,750 shares of Common Stock issuable pursuant to options held by Mr. Clifford.
|
(10)
|
Consists of 118,750 shares of Common Stock issuable pursuant to options held by Mr. Cohen.
|
(11)
|
Includes 58,750 shares of Common Stock issuable pursuant to options held by Mr. Jones.
|
(12)
|
Includes 138,750 shares of Common Stock issuable pursuant to options and 15,000 shares of Common Stock issuable pursuant to warrants held by Dr. Miller. Of the shares of Common Stock beneficially owned by Dr. Miller, 144,987 shares were pledged as security as of October 31, 2012.
|
(13)
|
Includes 133,750 shares of Common Stock issuable pursuant to options held by Mr. Seidman.
|
(14)
|
See footnotes (6) through (13) above. Includes R. Stephen Beatty, Robin L. Carmichael, Randall L-W. Caudill, John F. Clifford, Richard M. Cohen, Lawrence Blake Jones, Jeffrey A. Miller and Barry L. Seidman.
|
(i)
|
amended and converted $3,665,425 of aggregate principal amount and accrued interest due on a convertible promissory note issued to RBFSC Inc. in 2008 into 6,109,041 shares of our Common Stock at a conversion price of $0.60 per share;
|
(ii)
|
amended and converted $2,326,334 of aggregate principal amount and accrued interest due on the convertible promissory note issued to RBFSC Inc. in 2010 into 3,877,223 shares of our Common Stock at a conversion price of $0.60 per share;
|
(iii)
|
amended and exercised a warrant issued to RBFSC Inc. in 2008 to purchase 1,500,000 shares of our Common Stock at an exercise price of $0.50 per share for a total of $750,000; and
|
(iv)
|
amended and exercised a warrant issued to RBFSC Inc. in 2010 to purchase 1,100,000 shares of our Common Stock at an exercise price of $0.40 per share for a total of $440,000.
|
(i)
|
RBFSC Inc. amended and exercised a warrant issued in 2006 for 300,000 shares of our Common Stock at an exercise price of $0.50 per share for a total of $150,000; and
|
(ii)
|
we agreed to comply with the requirements for “qualified small business stock” under Section 1202 of the Internal Revenue Code of 1986, as amended.
|
(i)
|
outstanding convertible promissory notes issued in 2009 were amended and converted into shares of our Common Stock at a conversion price of $0.60 per share, including $114,948 and $114,444 in aggregate principal amount and accrued interest due on a convertible promissory notes held by Lawrence Blake Jones and Barry L. Seidman, respectively, members of the Board, which were amended and converted into 191,579 and 190,739 shares of our Common Stock, respectively;
|
(ii)
|
outstanding convertible promissory notes issued in 2010 were amended and converted into shares of our Common Stock at a conversion price of $0.60 per share, including $319,332 and $159,666 in aggregate principal amount and accrued interest due on convertible promissory notes held by Lawrence Blake Jones and Barry L. Seidman, respectively, members of the Board, which were amended and converted into 532,219 and 266,109 shares of our Common Stock, respectively;
|
(iii)
|
outstanding warrants issued in 2009 were amended and exercised for shares of our Common Stock at an exercise price of $0.50 per share, including warrants held by Lawrence Blake Jones and Barry L. Seidman, members of the Board, each of which was amended and exercised for 50,000 shares of our Common Stock for a total of $25,000 each; and
|
(iv)
|
outstanding warrants issued in 2010 were amended and exercised for shares of our Common Stock at an exercise price of $0.40 per share, including warrants held by Lawrence Blake Jones and Barry L. Seidman, members of the Board, which were amended and exercised for 150,000 and 75,000 shares of our Common Stock, respectively, for a total of $60,000 and $30,000, respectively.
|
|
·
|
if you voted by telephone or via the internet, by voting again by telephone or via the internet no later than 11:59 p.m. Eastern Time on ♦, 2012;
|
|
·
|
if
you completed and returned a proxy card, by submitting a new signed proxy card with a later date and returning to American Stock Transfer and Trust Company, Attn.: Proxy Department, 6201 15th Avenue, Brooklyn, New York 11219-9821 so that it is received by ♦, 2012;
|
|
·
|
by submitting written notice of revocation to American Stock Transfer and Trust Company, Attn.: Proxy Department, 6201 15th Avenue, Brooklyn, New York 11219-9821 so that it is received by ♦, 2012; or
|
|
·
|
by attending the Meeting and either voting in person or specifically requesting at the Meeting to revoke your proxy.
|
Condensed Statements of Operations:
|
||||||||||||||||||||||||
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
Year Ended December 31,
|
||||||||||||||||||||||
2012
|
2011
|
2012
|
2011
|
2011
|
2010
|
|||||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Derived from audited financials)
|
||||||||||||||||||||||
Revenue:
|
||||||||||||||||||||||||
License fees
|
$ | 240,550 | $ | 176,922 | $ | 729,095 | $ | 513,322 | $ | 730,635 | $ | 479,317 | ||||||||||||
Peptide and consumer product sales
|
176,669 | 100,884 | 605,190 | 576,165 | 679,907 | 309,379 | ||||||||||||||||||
Consumer product sales to affiliated company
|
51,852 | 116,901 | 285,730 | 355,951 | 480,796 | 62,987 | ||||||||||||||||||
Total revenue
|
469,071 | 394,707 | 1,620,015 | 1,445,438 | 1,891,338 | 851,683 | ||||||||||||||||||
Cost of revenue:
|
||||||||||||||||||||||||
Cost of peptide and consumer product sales
|
113,407 | 70,834 | 380,543 | 409,829 | 482,033 | 219,504 | ||||||||||||||||||
Cost of consumer product sales to affiliated company
|
21,832 | 56,961 | 128,684 | 191,486 | 251,274 | 40,990 | ||||||||||||||||||
Total cost of revenue
|
135,239 | 127,795 | 509,227 | 601,315 | 733,307 | 260,494 | ||||||||||||||||||
Gross profit
|
333,832 | 266,912 | 1,110,788 | 844,123 | 1,158,031 | 591,189 | ||||||||||||||||||
Operating expenses:
|
||||||||||||||||||||||||
Research and development
|
133,009 | 109,221 | 308,036 | 425,131 | 501,044 | 748,663 | ||||||||||||||||||
Marketing and business development
|
302,040 | 225,732 | 874,791 | 674,187 | 937,508 | 622,846 | ||||||||||||||||||
General and administrative
|
418,868 | 327,162 | 1,132,679 | 1,043,843 | 1,417,467 | 1,530,333 | ||||||||||||||||||
Accounting, legal and professional fees
|
205,192 | 168,043 | 605,615 | 477,676 | 597,160 | 531,726 | ||||||||||||||||||
Depreciation and amortization
|
22,896 | 27,845 | 68,054 | 82,609 | 109,175 | 113,777 | ||||||||||||||||||
Total operating expenses
|
1,082,005 | 858,003 | 2,989,175 | 2,703,446 | 3,562,354 | 3,547,345 | ||||||||||||||||||
Loss from operations
|
(748,173 | ) | (591,091 | ) | (1,878,387 | ) | (1,859,323 | ) | (2,404,323 | ) | (2,956,156 | ) | ||||||||||||
Other income (expense):
|
||||||||||||||||||||||||
Interest income
|
133 | 704 | 1,257 | 2,836 | 3,728 | 3,074 | ||||||||||||||||||
Interest expense on convertible notes payable
|
- | - | - | - | - | (138,979 | ) | |||||||||||||||||
Interest expense on convertible notes payable, related party
|
- | - | - | - | - | (534,465 | ) | |||||||||||||||||
Accretion of discount on convertible notes payable
|
- | - | - | - | - | (73,468 | ) | |||||||||||||||||
Accretion of discount on convertible notes payable, related party
|
- | - | - | - | - | (141,440 | ) | |||||||||||||||||
Debt conversion inducement expense
|
- | - | - | - | - | (3,806,966 | ) | |||||||||||||||||
Amortization of debt issuance costs
|
(50,673 | ) | - | (112,913 | ) | - | - | - | ||||||||||||||||
Gain from sale of assets
|
- | - | - | - | 6,000 | - | ||||||||||||||||||
Equity in loss of affiliated company
|
(14,674 | ) | (23,373 | ) | (32,916 | ) | (74,446 | ) | (85,686 | ) | (65,601 | ) | ||||||||||||
Change in value of option to purchase interest in affiliated company
|
(1,145 | ) | 8,143 | (12,362 | ) | (9,293 | ) | (8,295 | ) | 3,199 | ||||||||||||||
Other income (expense), net
|
(37,011 | ) | (14,526 | ) | (156,934 | ) | (80,903 | ) | (84,253 | ) | (4,754,646 | ) | ||||||||||||
Net loss and comprehensive loss
|
$ | (785,184 | ) | $ | (605,617 | ) | $ | (2,035,321 | ) | $ | (1,940,226 | ) | $ | (2,488,576 | ) | $ | (7,710,802 | ) | ||||||
Basic and diluted net loss from operations per share
|
$ | (0.02 | ) | $ | (0.01 | ) | $ | (0.04 | ) | $ | (0.04 | ) | $ | (0.05 | ) | $ | (0.11 | ) | ||||||
Basic and diluted net loss per share
|
$ | (0.02 | ) | $ | (0.01 | ) | $ | (0.04 | ) | $ | (0.04 | ) | $ | (0.05 | ) | $ | (0.28 | ) | ||||||
Weighted average shares outstanding
|
49,720,255 | 49,720,255 | 49,720,255 | 49,720,255 | 49,720,255 | 27,124,159 |
As of
|
As of
|
|||||||||||
September 30,
|
December 31,
|
|||||||||||
Condensed Balance Sheets:
|
2012
|
2011
|
2010
|
|||||||||
ASSETS |
(Unaudited)
|
(Derived from audited financials) | ||||||||||
Current assets:
|
||||||||||||
Cash and cash equivalents
|
$ | 216,534 | $ | 1,688,945 | $ | 4,044,309 | ||||||
Accounts receivable, net
|
284,809 | 239,773 | 235,149 | |||||||||
Accounts receivable, affiliated company, net
|
112,691 | 200,935 | 52,795 | |||||||||
Inventory
|
330,989 | 363,869 | 278,392 | |||||||||
Deferred debt issuance costs, current
|
201,040 | - | - | |||||||||
Prepaid expenses and other assets
|
64,009 | 64,583 | 63,471 | |||||||||
Total current assets
|
1,210,072 | 2,558,105 | 4,674,116 | |||||||||
Property and equipment, net
|
19,602 | 26,098 | 44,178 | |||||||||
Intangible assets, net
|
95,470 | 146,297 | 214,068 | |||||||||
Deferred debt issuance costs, non-current
|
150,917 | - | - | |||||||||
Other long term assets
|
8,522 | 20,884 | 29,179 | |||||||||
Investment in affiliated company
|
217,339 | 223,255 | 266,941 | |||||||||
Total assets
|
$ | 1,701,922 | $ | 2,974,639 | $ | 5,228,482 |
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||||||
Current liabilities:
|
||||||||||||
Accounts payable
|
321,565
|
125,324
|
130,489
|
|||||||||
Accrued compensation and benefits
|
64,933
|
87,859
|
30,285
|
|||||||||
Accrued expenses
|
63,603
|
55,463
|
102,123
|
|||||||||
Deferred revenue
|
7,060
|
-
|
-
|
|||||||||
Deferred gross profit, affiliated company
|
62,509
|
134,842
|
50,479
|
|||||||||
Deferred rent, current
|
-
|
7,155
|
4,847
|
|||||||||
Total current liabilities
|
519,670
|
410,643
|
318,223
|
|||||||||
Deferred rent, non-current
|
32,258
|
28,660
|
35,815
|
|||||||||
Total liabilities
|
551,928
|
439,303
|
354,038
|
|||||||||
Commitments and contingencies
|
||||||||||||
Stockholders' equity:
|
||||||||||||
Preferred stock, $0.001 par value, 25,000,000 shares: no shares issued or outstanding
|
-
|
-
|
-
|
|||||||||
Common stock, $0.001 par value, 100,000,000 shares authorized; 49,720,255 shares issued and outstanding
|
49,721
|
49,721
|
49,721
|
|||||||||
Additional paid-in capital
|
49,192,432
|
48,542,453
|
48,392,985
|
|||||||||
Accumulated deficit
|
(48,092,159
|
)
|
(46,056,838
|
)
|
(43,568,262
|
)
|
||||||
Total stockholders' equity
|
1,149,994
|
2,535,336
|
4,874,444
|
|||||||||
Total liabilities and stockholders' equity
|
$
|
1,701,922
|
$
|
2,974,639
|
$
|
5,228,482
|
||||||
Net book value per share
|
$
|
0.02
|
$
|
0.05
|
$
|
0.10
|
Pro Forma
|
Pro Forma
|
|||||||
Nine Months Ended
September 30,
|
Year Ended
December 31,
|
|||||||
2012
|
2011
|
|||||||
Revenue:
|
||||||||
License fees
|
$
|
729,095
|
$
|
730,635
|
||||
Peptide and consumer product sales
|
605,190
|
679,907
|
||||||
Consumer product sales to affiliated company
|
285,730
|
480,796
|
||||||
Total revenue
|
1,620,015
|
1,891,338
|
||||||
Cost of revenue:
|
||||||||
Cost of peptide and consumer product sales
|
380,543
|
482,033
|
||||||
Cost of consumer product sales to affiliated company
|
128,684
|
251,274
|
||||||
Total cost of revenue
|
509,227
|
733,307
|
||||||
Gross profit
|
1,110,788
|
1,158,031
|
||||||
Operating expenses:
|
||||||||
Research and development
|
308,036
|
501,044
|
||||||
Marketing and business development
|
874,791
|
937,508
|
||||||
General and administrative
|
1,262,679
|
1,547,467
|
||||||
Accounting, legal and professional fees
|
785,615
|
777,160
|
||||||
Depreciation and amortization
|
68,054
|
109,175
|
||||||
Total operating expenses
|
3,299,175
|
3,872,354
|
||||||
Loss from operations
|
(2,188,387
|
)
|
(2,714,323
|
)
|
||||
Other income (expense):
|
||||||||
Interest income
|
1,257
|
3,728
|
||||||
Interest expense on convertible notes payable
|
-
|
-
|
||||||
Interest expense on convertible notes payable,
related party
|
-
|
-
|
||||||
Accretion of discount on convertible notes payable
|
-
|
-
|
||||||
Accretion of discount on convertible notes payable,
related party
|
-
|
-
|
||||||
Debt conversion inducement expense
|
-
|
-
|
||||||
Amortization of debt issuance costs
|
(112,913
|
)
|
-
|
|||||
Gain from sale of assets
|
-
|
6,000
|
||||||
Equity in loss of affiliated company
|
(32,916
|
)
|
(85,686
|
)
|
||||
Change in value of option to purchase interest
in affiliated company
|
(12,362
|
)
|
(8,295
|
)
|
||||
Other income (expense), net
|
(156,934
|
)
|
(84,253
|
)
|
||||
Net loss and comprehensive loss
|
$
|
(2,345,321
|
)
|
$
|
(2,798,576
|
)
|
||
Basic and diluted net loss from operations per share
|
$
|
(13.21
|
)
|
$
|
(16.39
|
)
|
||
Basic and diluted net loss per share
|
$
|
(14.16
|
)
|
$
|
(16.90
|
)
|
||
Weighted average shares outstanding
|
165,624
|
165,624
|
Pro Forma
As of
|
Pro Forma
As of
|
|||||||
September 30,
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
536,534
|
$
|
2,008,945
|
||||
Accounts receivable, net
|
284,809
|
239,773
|
||||||
Accounts receivable, affiliated company, net
|
112,691
|
200,935
|
||||||
Inventory
|
330,989
|
363,869
|
||||||
Deferred debt issuance costs, current
|
201,040
|
-
|
||||||
Prepaid expenses and other assets
|
64,009
|
64,583
|
||||||
Total current assets
|
1,530,072
|
2,878,105
|
||||||
Property and equipment, net
|
19,602
|
26,098
|
||||||
Intangible assets, net
|
95,470
|
146,297
|
||||||
Deferred debt issuance costs, non-current
|
150,917
|
-
|
||||||
Other long term assets
|
8,522
|
20,884
|
||||||
Investment in affiliated company
|
217,339
|
223,255
|
||||||
Total assets
|
$
|
2,021,922
|
$
|
3,294,639
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
321,565
|
125,324
|
||||||
Accrued compensation and benefits
|
64,933
|
87,859
|
||||||
Accrued expenses
|
63,603
|
55,463
|
||||||
Deferred revenue
|
7,060
|
-
|
||||||
Deferred gross profit, affiliated company
|
62,509
|
134,842
|
||||||
Deferred rent, current
|
-
|
7,155
|
||||||
Total current liabilities
|
519,670
|
410,643
|
||||||
Deferred rent, non-current
|
32,258
|
28,660
|
||||||
750,000
|
-
|
|||||||
Total liabilities
|
1,301,928
|
439,303
|
||||||
Commitments and contingencies
|
||||||||
Stockholders' equity:
|
||||||||
Preferred stock, $0.001 par value, 25,000,000 shares; no shares issued or outstanding
|
-
|
-
|
||||||
Common stock, $0.001 par value, 100,000,000 shares authorized; 165,068 shares issued and outstanding
|
49,521
|
49,521
|
||||||
Additional paid-in capital
|
49,072,632
|
48,422,653
|
||||||
Accumulated deficit
|
(48,402,159
|
)
|
(46,366,838
|
)
|
||||
Total stockholders' equity
|
719,994
|
2,105,336
|
||||||
Total liabilities and stockholders' equity
|
$
|
2,021,922
|
$
|
2,544,639
|
||||
Net book value per share
|
$
|
4.36
|
|
$
|
12.75
|
|
·
|
Our annual report on Form 10-K for the year ended December 31, 2011
|
|
·
|
Our quarterly report on Form 10-Q for the quarter ended September 30, 2012
|
|
·
|
Our current report on Form 8-K filed on September 11, 2012
.
|
|
·
|
Our audited Balance Sheets as of December 31, 2011 and 2010, our audited Statements of Operations and Comprehensive Loss for the years ended December 31, 2011 and 2010, our audited Statements of Stockholders' Equity (Deficit) for the years ended December 31, 2009, 2010 and 2011, our audited Statements of Cash Flows for the years ended December 31, 2011 and 2010 and the Notes to our audited Financial Statements, in each case that are contained in our annual report on Form 10-K for the year ended December 31, 2011; and
|
|
·
|
Our unaudited Condensed Balance
Sheets as of September 30, 2012, our unaudited Condensed Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2012 and September 30, 2011, our unaudited Condensed Statements of Cash Flows for the nine months ended September 30, 2012 and September 30, 2011, and the Notes to our unaudited Condensed Financial Statements, in each case that are contained in our quarterly report on Form 10-Q for the fiscal quarter ended September 30, 2012.
|
By Order of the Board of Directors,
|
||
|
||
R. Stephen Beatty
President and Chief Executive Officer
|
HELIX BIOMEDIX, INC.
|
|||
|
By:
|
||
R. Stephen Beatty,
President and Chief Executive Officer
|
|
(i)
|
Reviewed, without any independent verification or due diligence being performed by us, certain publicly filed and available financial information, as well as non-publicly available financial information, both internally generated and audited, and other data relating to Helix and its financial prospects that were provided to us by the management of Helix, including the financial statements and financial forecasts and estimates prepared by the management of Helix (together, the “Prospective Financial Information”);
|
|
(ii)
|
conducted discussions with members of the senior management of Helix, the Board of Directors of Helix, and Helix’s auditing firm concerning the businesses and financial prospects of the Company;
|
|
(iii)
|
reviewed publicly-available financial and stock market data for Helix as well as with respect to certain companies in lines of businesses that we believe to be generally relevant to the business of Helix;
|
|
(iv)
|
compared the financial terms of the proposed Transaction with publicly-available financial terms of certain other transactions that we believe to be generally relevant to Helix and the Transaction; and
|
|
(v)
|
conducted such other financial studies, analyses and investigations, and considered such other information financial, economic and market criteria, as we deemed necessary or appropriate.
|
|
x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
91-2099117
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
Large accelerated filer
¨
|
Accelerated filer
¨
|
Non-accelerated filer
¨
|
Smaller reporting company
x
|
PART I
|
||
Item 1.
|
Business
|
1
|
Item 1A.
|
Risk Factors
|
9
|
Item 1B.
|
Unresolved Staff Comments
|
15
|
Item 2.
|
Properties
|
15
|
Item 3.
|
Legal Proceedings
|
15
|
Item 4.
|
Mine Safety Disclosures
|
15
|
PART II
|
||
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
16
|
Item 6.
|
Selected Financial Data
|
16
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
17
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
25
|
Item 8.
|
Financial Statements and Supplementary Data
|
26
|
Item 9.
|
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
|
49
|
Item 9A.
|
Controls and Procedures
|
49
|
Item 9B.
|
Other Information
|
49
|
PART III
|
||
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
50
|
Item 11.
|
Executive Compensation
|
50
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
50
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
50
|
Item 14.
|
Principal Accounting Fees and Services
|
50
|
PART IV
|
||
Item 15.
|
Exhibits, Financial Statement Schedules
|
51
|
Signatures
|
53
|
|
Exhibits
|
|
•
|
statements concerning possible or assumed future results of operations, trends in financial results and business plans, including those relating to earnings growth and revenue growth;
|
|
•
|
statements about our product development schedule;
|
|
•
|
statements about our future capital requirements and the sufficiency of our cash, cash equivalents, investments, and any other sources to meet these requirements;
|
|
•
|
statements about our plans, objectives, expectations, and intentions; and
|
|
•
|
other statements that are not historical facts.
|
ITEM 1.
|
BUSINESS
|
|
·
|
Consumer skin care products — we have developed a range of peptides and small molecule technologies capable of improving different aspects of the skin’s appearance, texture, tone and barrier function and are marketing these peptides as innovative ingredients for cosmetic use; and
|
|
·
|
Prescription (Rx) products — certain of our peptides have demonstrated promising results in the areas of infection control, wound healing and immune modulation and are being developed for Rx applications.
|
|
•
|
other companies developing therapies and skin care products based upon peptide technology; and
|
|
•
|
companies using other technologies to address the disease conditions and skin care concerns that we are targeting.
|
Patent No.
|
Description
|
Country
|
Expiration Year
|
5,962,410
|
Inhibition of Eucaryotic Pathogen with Lytec Peptides
|
United States
|
2016
|
6,288,212
|
Anti-Endotoxic Antimicrobial Peptides and Methods thereof (licensed from University of British Columbia)
|
United States
|
2018
|
6,172,185
|
Antimicrobial Cationic Peptide Derivatives of Bactenecin (licensed from University of British Columbia)
|
United States
|
2018
|
6,337,317
|
Antimicrobial Peptides and Methods of Use thereof (licensed from University of British Columbia)
|
United States
|
2020
|
7,354,903
|
Cosmetic Compositions Containing Short Bioactive Peptides
|
United States
|
2021
|
6,875,744
|
Short Bioactive Peptides
|
United States
|
2022
|
7,381,704
|
Methods for Use of Short Bioactive Peptides
|
United States
|
2022
|
7,407,940
|
Antimicrobial Hexapeptides
|
United States
|
2026
|
7,696,174
|
Short Bio-Active Peptides for Cellular and Immunological Modulation
|
United States
|
2027
|
8,071,555
|
Protective Skin Care Peptides
|
United States
|
2030
|
1,340,716
|
Inhibition of Eucaryotic Pathogens and Neoplasms and Stimulation of Fibroblasts and Lymphocytes with Lytic Peptides
|
Canada
|
2016
|
4310107
|
Short Bioactive Peptides and Methods for Their Use
|
Japan
|
2022
|
4484941
|
Short Bioactive Peptides and Methods for Their Use
|
Japan
|
2022
|
10-0891157
|
Short Bioactive Peptides and Methods for Their Use
|
South Korea
|
2022
|
57890/99
|
Anti-Endotoxic, Antimicrobial Cationic Peptides and Methods of Use therefor (licensed from University of British Columbia)
|
Australia
|
2019
|
2006212922
|
Antimicrobial Hexapeptides
|
Australia
|
2026
|
2027152
|
Peptide Fragments for Inducing Synthesis of Extracellular Matrix Proteins
|
Europe
|
2027
|
288451
|
Short Bio-Active Peptides for Cellular and Immunological Modulation
|
Mexico
|
2027
|
Name
|
Age
|
Position
|
|||
R. Stephen Beatty
|
62 |
President and Chief Executive Officer
|
|||
Robin L. Carmichael
|
55 |
Vice President and Chief Operating Officer
|
|
•
|
commercialize our peptide compounds and intermediates;
|
|
•
|
commercialize skin care products containing our peptides;
|
|
•
|
fund our pre-clinical studies;
|
|
•
|
fund clinical trials;
|
|
•
|
continue our research and development activities;
|
|
•
|
finance our operating expenses; and
|
|
•
|
prepare, file, prosecute, maintain, enforce, and defend patent and other proprietary rights.
|
|
•
|
our ability to enter into revenue-producing agreements and the success of our existing agreements;
|
|
•
|
the progress, expansion, and cost of our pre-clinical and research and development activities;
|
|
•
|
any future decisions we may make about the scope and prioritization of the programs we pursue, including whether we pursue clinical development of our pharmaceutical programs;
|
|
•
|
the development of new product candidates or uses for our antimicrobial peptide technologies;
|
|
•
|
changes in regulatory policies or laws that affect our operations; and
|
|
•
|
competing technological and market developments.
|
|
•
|
announcements about our collaborators or licensees;
|
|
•
|
announcements about technological innovations or new products or services by us or our competitors;
|
|
•
|
announcements concerning our competitors or the biotechnology industry in general;
|
|
•
|
new regulatory pronouncements and changes in regulatory guidelines;
|
|
•
|
general and industry-specific economic conditions;
|
|
•
|
additions or departures of our key personnel;
|
|
•
|
changes in financial estimates or recommendations by securities analysts;
|
|
•
|
variations in our quarterly results; and
|
|
•
|
changes in accounting principles.
|
|
•
|
authorize the issuance of preferred stock that can be created and issued by the board of directors without prior stockholder approval, commonly referred to as “blank check” preferred stock, with rights senior to those of our common stock;
|
|
•
|
authorize our board of directors to issue dilutive shares of common stock upon certain events; and
|
|
•
|
provide for a classified board of directors.
|
ITEM 1B.
|
UNRESOLVED STAFF COMMENTS
|
ITEM 2.
|
PROPERTIES
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
Year ended December 31,
|
||||||||||||||||
2011
|
2010
|
|||||||||||||||
High
|
Low
|
High
|
Low
|
|||||||||||||
First Quarter
|
$ | 0.45 | $ | 0.20 | $ | 0.40 | $ | 0.19 | ||||||||
Second Quarter
|
$ | 0.45 | $ | 0.22 | $ | 0.43 | $ | 0.22 | ||||||||
Third Quarter
|
$ | 0.45 | $ | 0.15 | $ | 0.49 | $ | 0.20 | ||||||||
Fourth Quarter
|
$ | 0.35 | $ | 0.23 | $ | 0.59 | $ | 0.23 |
ITEM 6.
|
SELECTED FINANCIAL DATA
|
Year ended December 31,
|
||||||||||||||||||||
2011
|
2010
|
2009
|
2008
|
2007
|
||||||||||||||||
Operations:
|
||||||||||||||||||||
Revenue
|
$ | 1,891,338 | $ | 851,683 | $ | 391,268 | $ | 562,877 | $ | 463,941 | ||||||||||
Loss from operations
|
(2,404,323 | ) | (2,956,156 | ) | (3,217,908 | ) | (3,544,178 | ) | (3,518,579 | ) | ||||||||||
Net loss
|
(2,488,576 | ) | (7,710,802 | ) | (3,775,035 | ) | (4,515,512 | ) | (3,434,004 | ) | ||||||||||
Net loss per share, basic and diluted
|
(0.05 | ) | (0.28 | ) | (0.15 | ) | (0.18 | ) | (0.14 | ) | ||||||||||
Financial position:
|
||||||||||||||||||||
Cash, cash equivalents and marketable securities
|
1,688,945 | 4,044,309 | 1,344,719 | 984,844 | 1,161,290 | |||||||||||||||
Working capital
|
2,147,462 | 4,355,893 | 1,495,026 | 1,014,268 | 1,105,405 | |||||||||||||||
Total assets
|
2,974,639 | 5,228,482 | 2,012,920 | 2,703,707 | 2,022,071 | |||||||||||||||
Stockholders’ equity (deficit)
|
2,535,336 | 4,874,444 | (5,168,725 | ) | (1,714,522 | ) | 1,670,713 |
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
•
|
Consumer skin care products — we have developed a range of peptides and small molecule technologies capable of improving different aspects of the skin’s appearance, texture, tone and barrier function and are marketing these peptides as innovative ingredients for cosmetic use; and
|
|
•
|
Prescription (Rx) products — certain of our peptides have demonstrated promising results in the areas of infection control, wound healing and immune modulation and are being developed for Rx applications.
|
|
•
|
52% growth in licensing fees from 2010;
|
|
•
|
120% growth in peptide and consumer product sales from 2010;
|
|
•
|
Consumer product sales to an affiliated company for the first full year reached $481,000; and
|
|
•
|
Loss from operations decreased by 19% to $2.40 million in 2011 compared to $2.96 million in 2010.
|
|
•
|
Licensing Fees.
We recognize up-front payments when persuasive evidence of an agreement exists, delivery has occurred or services have been performed, the price is fixed and determinable and collection is reasonably assured. We recognize royalty revenue in the period the royalty is earned based on actual reports or estimates received from licensees.
|
|
•
|
Peptide and Consumer Product Sales.
We recognize revenue from sales of our peptides and skin care products when persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable and collection is reasonably assured.
|
|
•
|
Consumer Product Sales, Affiliated Company.
We sell certain skin care products under private labels to an affiliated company and recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable, collection is reasonably assured and the products have been resold to third parties or otherwise used.
|
|
•
|
Administrative Services Revenue, Related Party.
Our administrative services revenue consisted of fees received from DermaVentures, LLC (DermaVentures), a related party, for costs incurred related to the DermaVentures’ product line. Administrative services revenue was invoiced to DermaVentures at or near cost and was recorded as earned on a gross basis when services were rendered, no obligations remained outstanding and collection was reasonably assured.
In September 2009, we terminated the Management Services Agreement with DermaVentures. As a result, we had no further management or administrative responsibilities related to DermaVentures from which our administrative services revenue was derived (see Note 14 of our Notes to Financial Statements).
|
Year ended
December 31,
2011
|
% Change
from 2010
|
Year ended
December 31,
2010
|
% Change
from 2009
|
Year ended
December 31,
2009
|
||||||||||||||||
License fees
|
$ | 730,635 | 52.4 | % | $ | 479,317 | 221.3 | % | $ | 149,196 | ||||||||||
Percentage of total revenue
|
38.6 | % | 56.3 | % | 38.1 | % | ||||||||||||||
Peptide and consumer product sales
|
679,907 | 119.8 | % | 309,379 | 39.4 | % | 221,876 | |||||||||||||
Percentage of total revenue
|
36.0 | % | 36.3 | % | 56.7 | % | ||||||||||||||
Consumer product sales, affiliated company
|
480,796 | 663.3 | % | 62,987 |
NM
|
— | ||||||||||||||
Percentage of total revenue
|
25.4 | % | 7.4 | % | — | |||||||||||||||
Administrative services revenue, related party
|
— | — | — | (100.0 | )% | 20,196 | ||||||||||||||
Percentage of total revenue
|
— | — | 5.2 | % | ||||||||||||||||
Total revenue
|
$ | 1,891,338 | 122.1 | % | $ | 851,683 | 117.7 | % | $ | 391,268 |
NM -
|
Percentage not meaningful
|
Year ended
December 31,
2011
|
% Change
from 2010
|
Year ended
December 31,
2010
|
% Change
from 2009
|
Year ended
December 31,
2009
|
||||||||||||||||
Cost of peptide and consumer product sales
|
$ | 482,033 | 119.6 | % | $ | 219,504 | 24.2 | % | $ | 176,720 | ||||||||||
Percentage of total revenue
|
25.5 | % | 25.8 | % | 45.2 | % | ||||||||||||||
Cost of consumer product sales, affiliated company
|
$ | 251,274 | 513.0 | % | $ | 40,990 |
NM
|
$ | — | |||||||||||
Percentage of total revenue
|
13.3 | % | 4.8 | % | — | |||||||||||||||
Cost of administrative services revenue, related party
|
$ | — | — | $ | — | (100.0 | )% | $ | 19,800 | |||||||||||
Percentage of total revenue
|
— | — | 5.0 | % | ||||||||||||||||
Total cost of revenue
|
$ | 733,307 | 181.5 | % | $ | 260,494 | 32.6 | % | $ | 196,520 | ||||||||||
Gross profit
|
$ | 1,158,031 | 95.9 | % | $ | 591,189 | 203.6 | % | $ | 194,748 | ||||||||||
Gross margin
|
61.2 | % | 69.4 | % | 49.8 | % |
NM -
|
Percentage not meaningful
|
Year ended
December 31,
2011
|
% Change
from 2010
|
Year ended
December 31,
2010
|
% Change
from 2009
|
Year ended
December 31,
2009
|
||||||||||||||||
Research and development
|
$ | 501,044 | (33.1 | )% | $ | 748,663 | 3.6 | % | $ | 722,523 | ||||||||||
Percentage of total revenue
|
26.5 | % | 87.9 | % | 184.7 | % |
Year ended
December 31,
2011
|
% Change
from 2010
|
Year ended
December 31,
2010
|
% Change
from 2009
|
Year ended
December 31,
2009
|
||||||||||||||||
Marketing and business development
|
$ | 937,508 | 50.5 | % | $ | 622,846 | 22.9 | % | $ | 506,742 | ||||||||||
Percentage of total revenue
|
49.6 | % | 73.1 | % | 129.5 | % |
Year ended
December 31,
2011
|
% Change
from 2010
|
Year ended
December 31,
2010
|
% Change
from 2009
|
Year ended
December 31,
2009
|
||||||||||||||||
General and administrative
|
$ | 1,417,467 | (7.4 | )% | $ | 1,530,333 | 3.9 | % | $ | 1,473,352 | ||||||||||
Percentage of total revenue
|
74.9 | % | 179.7 | % | 376.6 | % |
Year ended
December 31,
2011
|
% Change
from 2010
|
Year ended
December 31,
2010
|
% Change
from 2009
|
Year ended
December 31,
2009
|
||||||||||||||||
Accounting, legal and professional fees
|
$ | 597,160 | 12.3 | % | $ | 531,726 | (8.2 | )% | $ | 579,443 | ||||||||||
Percentage of total revenue
|
31.6 | % | 62.4 | % | 148.1 | % |
Year ended
December 31,
2011
|
% Change
from 2010
|
Year ended
December 31,
2010
|
% Change
from 2009
|
Year ended
December 31,
2009
|
||||||||||||||||
Depreciation and amortization
|
$ | 109,175 | (4.0 | )% | $ | 113,777 | (12.9 | )% | $ | 130,596 | ||||||||||
Percentage of total revenue
|
5.8 | % | 13.4 | % | 33.4 | % |
Year ended
December 31,
2011
|
% Change
from 2010
|
Year ended
December 31,
2010
|
% Change
from 2009
|
Year ended
December 31,
2009
|
||||||||||||||||
Interest income
|
$ | 3,728 | 21.3 | % | $ | 3,074 | (68.1 | )% | $ | 9,649 | ||||||||||
Interest expense on convertible notes payable
|
— | (100.0 | )% | (138,979 | ) | 43.4 | % | (96,897 | ) | |||||||||||
Interest expense on convertible notes payable, related party
|
— | (100.0 | )% | (534,465 | ) | 37.5 | % | (388,625 | ) | |||||||||||
Accretion of discount on convertible notes payable
|
— | (100.0 | )% | (73,468 | ) | 128.9 | % | (32,094 | ) | |||||||||||
Accretion of discount on convertible notes payable, related party
|
— | (100.0 | )% | (141,440 | ) | 187.7 | % | (49,160 | ) | |||||||||||
Debt conversion inducement expense
|
— | (100.0 | )% | (3,806,966 | ) |
NM
|
— | |||||||||||||
Gain from sale of asset
|
6,000 |
NM
|
— | — | — | |||||||||||||||
Equity in loss of affiliated company
|
(85,686 | ) | 30.6 | % | (65,601 | ) | — | — | ||||||||||||
Change in value of purchase option, affiliated company
|
(8,295 | ) | (359.3 | )% | 3,199 |
NM
|
— | |||||||||||||
Other income (expense), net
|
$ | (84,253 | ) | (98.2 | )% | $ |
(4,754,646
|
) | 753.4 | % | $ | (557,127 | ) |
Year ended December 31,
|
||||||||||||
2011
|
2010
|
2009
|
||||||||||
Net cash used in operating activities
|
$ | (2,296,040 | ) | $ | (2,796,869 | ) | $ | (3,071,568 | ) | |||
Net cash provided by (used in) investing activities
|
(59,324 | ) | (355,305 | ) | 927,443 | |||||||
Net cash provided by financing activities
|
— | 5,851,764 | 2,504,000 |
Payments due by periods
|
||||||||||||||||
Contractual Obligations
|
2012
|
2013 through 2014
|
2015
|
Total
|
||||||||||||
Operating lease
|
$ | 79,256 | $ | 165,717 | $ | 43,195 | $ | 288,168 | ||||||||
Purchase order commitments
(1)
|
276,860 | — | — | 276,860 | ||||||||||||
$ | 356,116 | $ | 165,717 | $ | 43,195 | $ | 565,028 |
(1)
|
Purchase order commitments represent open orders for inventory.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
Index to Financial Statements
|
Page
|
|
Report of KPMG LLP, Independent Registered Public Accounting Firm
|
27
|
|
Balance Sheets
|
28
|
|
Statements of Operations and Comprehensive Loss
|
29
|
|
Statements of Stockholders’ Equity (Deficit)
|
30
|
|
Statements of Cash Flows
|
31
|
|
Notes to Financial Statements
|
32
|
|
/s/ KPMG LLP
|
December 31,
|
||||||||
2011
|
2010
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 1,688,945 | $ | 4,044,309 | ||||
Accounts receivable, net
|
239,773 | 235,149 | ||||||
Accounts receivable, affiliated company, net
|
200,935 | 52,795 | ||||||
Inventory
|
363,869 | 278,392 | ||||||
Prepaid expenses and other current assets
|
64,583 | 63,471 | ||||||
Total current assets
|
2,558,105 | 4,674,116 | ||||||
Property and equipment, net
|
26,098 | 44,178 | ||||||
Intangible assets, net
|
146,297 | 214,068 | ||||||
Other long term assets
|
20,884 | 29,179 | ||||||
Investment in affiliated company
|
223,255 | 266,941 | ||||||
Total assets
|
$ | 2,974,639 | $ | 5,228,482 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 125,324 | $ | 130,489 | ||||
Accrued compensation and benefits
|
87,859 | 30,285 | ||||||
Accrued expenses
|
55,463 | 102,123 | ||||||
Deferred gross profit, related party
|
134,842 | 50,479 | ||||||
Deferred rent, current
|
7,155 | 4,847 | ||||||
Total current liabilities
|
410,643 | 318,223 | ||||||
Deferred rent, non-current
|
28,660 | 35,815 | ||||||
Total liabilities
|
439,303 | 354,038 | ||||||
Commitments and contingencies
|
||||||||
Stockholders’ equity:
|
||||||||
Preferred stock, $0.001 par value, 25,000,000 shares authorized; no shares issued or outstanding
|
— | — | ||||||
Common stock, $0.001 par value, 100,000,000 shares authorized; 49,720,255 shares issued and outstanding at December 31, 2011 and 2010
|
49,721 | 49,721 | ||||||
Additional paid-in capital
|
48,542,453 | 48,392,985 | ||||||
Accumulated deficit
|
(46,056,838 | ) | (43,568,262 | ) | ||||
Total stockholders’ equity
|
2,535,336 | 4,874,444 | ||||||
Total liabilities and stockholders’ equity
|
$ | 2,974,639 | $ | 5,228,482 |
Year ended December 31,
|
||||||||||||
2011
|
2010
|
2009
|
||||||||||
Revenue:
|
||||||||||||
Licensing fees
|
$ | 730,635 | $ | 479,317 | $ | 149,196 | ||||||
Peptide and consumer product sales
|
679,907 | 309,379 | 221,876 | |||||||||
Consumer product sales to affiliated company
|
480,796 | 62,987 | — | |||||||||
Administrative services revenue, related party
|
— | — | 20,196 | |||||||||
Total revenue
|
1,891,338 | 851,683 | 391,268 | |||||||||
Cost of revenue:
|
||||||||||||
Cost of peptide and consumer product sales
|
482,033 | 219,504 | 176,720 | |||||||||
Cost of consumer product sales to affiliated company
|
251,274 | 40,990 | — | |||||||||
Cost of administrative services revenue, related party
|
— | — | 19,800 | |||||||||
Total cost of revenue
|
733,307 | 260,494 | 196,520 | |||||||||
Gross profit
|
1,158,031 | 591,189 | 194,748 | |||||||||
Operating expenses:
|
||||||||||||
Research and development
|
501,044 | 748,663 | 722,523 | |||||||||
Marketing and business development
|
937,508 | 622,846 | 506,742 | |||||||||
General and administrative
|
1,417,467 | 1,530,333 | 1,473,352 | |||||||||
Accounting, legal and professional fees
|
597,160 | 531,726 | 579,443 | |||||||||
Depreciation and amortization
|
109,175 | 113,777 | 130,596 | |||||||||
Total operating expenses
|
3,562,354 | 3,547,345 | 3,412,656 | |||||||||
Loss from operations
|
(2,404,323 | ) | (2,956,156 | ) | (3,217,908 | ) | ||||||
Other income (expense):
|
||||||||||||
Interest income
|
3,728 | 3,074 | 9,649 | |||||||||
Interest expense on convertible notes payable
|
— | (138,979 | ) | (96,897 | ) | |||||||
Interest expense on convertible note payable, related party
|
— | (534,465 | ) | (388,625 | ) | |||||||
Accretion of discount on convertible notes payable
|
— | (73,468 | ) | (32,094 | ) | |||||||
Accretion of discount on convertible notes payable, related party
|
— | (141,440 | ) | (49,160 | ) | |||||||
Debt conversion inducement expense
|
— | (3,806,966 | ) | — | ||||||||
Gain from sale of assets
|
6,000 | — | — | |||||||||
Equity in loss of affiliated company
|
(85,686 | ) | (65,601 | ) | — | |||||||
Change in value of option to purchase interest in affiliated company
|
(8,295 | ) | 3,199 | — | ||||||||
Other income (expense), net
|
(84,253 | ) | (4,754,646 | ) | (557,127 | ) | ||||||
Net loss and comprehensive loss
|
$ | (2,488,576 | ) | $ | (7,710,802 | ) | $ | (3,775,035 | ) | |||
Basic and diluted net loss per share
|
$ | (0.05 | ) | $ | (0.28 | ) | $ | (0.15 | ) | |||
Weighted average shares outstanding
|
49,720,255 | 27,124,159 | 25,653,512 |
Common Stock
|
Accumulated | |||||||||||||||||||||||
Number
of shares
|
Amount
|
Additional
paid-in
capital
|
Accumulated
deficit
|
other
comprehensive
income
|
Stockholders’
equity
(deficit)
|
|||||||||||||||||||
Balance at December 31, 2008
|
25,653,512 | $ | 25,654 | $ | 30,342,249 | $ | (32,082,425 | ) | $ | — | $ | (1,714,522 | ) | |||||||||||
Stock-based compensation
|
— | — | 101,970 | — | — | 101,970 | ||||||||||||||||||
Relative fair value of detachable warrants issued with convertible notes payable
|
— | — | 218,862 | — | — | 218,862 | ||||||||||||||||||
Net loss for the year
|
— | — | — | (3,775,035 | ) | — | (3,775,035 | ) | ||||||||||||||||
Balance at December 31, 2009
|
25,653,512 | 25,654 | 30,663,081 | (35,857,460 | ) | — | (5,168,725 | ) | ||||||||||||||||
Stock-based compensation
|
— | — | 188,920 | — | — | 188,920 | ||||||||||||||||||
Relative fair value of detachable warrants issued with convertible notes payable
|
— | — | 77,300 | — | — | 77,300 | ||||||||||||||||||
Proceeds from warrant exercises, net
|
4,852,000 | 4,852 | 2,151,415 | — | — | 2,156,267 | ||||||||||||||||||
Issuance of stock from conversion of notes payable
|
7,048,102 | 7,048 | 4,221,825 | — | — | 4,228,873 | ||||||||||||||||||
Issuance of stock from conversion of notes payable, related party
|
11,166,910 | 11,167 | 6,688,981 | — | — | 6,700,148 | ||||||||||||||||||
Proceeds from private placement, net
|
999,731 | 1,000 | 594,497 | — | — | 595,497 | ||||||||||||||||||
Debt conversion inducement expense
|
— | — | 3,806,966 | — | — | 3,806,966 | ||||||||||||||||||
Net loss for the year
|
— | — | — | (7,710,802 | ) | — | (7,710,802 | ) | ||||||||||||||||
Balance at December 31, 2010
|
49,720,255 | $ | 49,721 | $ | 48,392,985 | $ | (43,568,262 | ) | $ | — | $ | 4,874,444 | ||||||||||||
Stock-based compensation
|
— | — | 149,468 | — | — | 149,468 | ||||||||||||||||||
Net loss for the year
|
— | — | — | (2,488,576 | ) | — | (2,488,576 | ) | ||||||||||||||||
Balance at December 31, 2011
|
49,720,255 | $ | 49,721 | $ | 48,542,453 | $ | (46,056,838 | ) | $ | — | $ | 2,535,336 |
Year ended December 31,
|
||||||||||||
2011
|
2010
|
2009
|
||||||||||
Cash Flows from Operating Activities
|
||||||||||||
Net loss
|
$ | (2,488,576 | ) | $ | (7,710,802 | ) | $ | (3,775,035 | ) | |||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||||||
Depreciation
|
41,404 | 46,007 | 58,831 | |||||||||
Amortization
|
67,771 | 67,770 | 71,765 | |||||||||
Stock-based compensation expense
|
149,468 | 188,920 | 101,970 | |||||||||
Interest expense on convertible notes payable
|
— | 123,965 | 96,897 | |||||||||
Interest expense on convertible notes payable, related party
|
— | 534,465 | 388,625 | |||||||||
Accretion of discount on convertible notes payable
|
— | 73,468 | 32,094 | |||||||||
Accretion of discount on convertible notes payable, related party
|
— | 141,440 | 49,160 | |||||||||
Debt conversion inducement expense
|
— | 3,806,966 | — | |||||||||
(Gain) from sale of assets
|
(6,000 | ) | — | — | ||||||||
Equity in loss of affiliated company
|
85,686 | 65,601 | — | |||||||||
Change in valuation of option to purchase interest in affiliated company
|
8,295 | (3,199 | ) | — | ||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Accounts receivable, net
|
(4,624 | ) | (232,259 | ) | (5,218 | ) | ||||||
Accounts receivable from affiliated company, net
|
(148,140 | ) | — | — | ||||||||
Inventory
|
(85,477 | ) | (75,577 | ) | (91,404 | ) | ||||||
Prepaid expenses and other current assets
|
(1,112 | ) | (29,010 | ) | 70,245 | |||||||
Accounts payable
|
(5,165 | ) | 64,034 | (5,369 | ) | |||||||
Accrued compensation and benefits
|
57,574 | 588 | (72,037 | ) | ||||||||
Other accrued liabilities
|
(51,507 | ) | 90,275 | 7,908 | ||||||||
Deferred gross profit, affiliated company
|
84,363 | 50,479 | — | |||||||||
Net cash used in operating activities
|
(2,296,040 | ) | (2,796,869 | ) | (3,071,568 | ) | ||||||
Cash Flows from Investing Activities
|
||||||||||||
Restricted cash from convertible debt subscriptions
|
— | — | 970,000 | |||||||||
Purchase of property and equipment
|
(2,669 | ) | (5,305 | ) | (17,037 | ) | ||||||
Proceeds from sale of assets
|
6,000 | — | — | |||||||||
Website development
|
(20,655 | ) | — | (25,520 | ) | |||||||
Investment in affiliated company
|
(42,000 | ) | (350,000 | ) | — | |||||||
Net cash provided by (used in) investing activities
|
(59,324 | ) | (355,305 | ) | 927,443 | |||||||
Cash Flows from Financing Activities
|
||||||||||||
Proceeds from issuance of convertible notes payable
|
— | 550,000 | 404,000 | |||||||||
Proceeds from issuance of convertible notes payable, related party
|
— | 2,650,000 | 2,100,000 | |||||||||
Proceeds from warrant exercises, including related party, net
|
— | 2,156,267 | — | |||||||||
Proceeds from issuance of common stock, net
|
— | 595,497 | — | |||||||||
Repayment of convertible note payable
|
— | (100,000 | ) | — | ||||||||
Net cash provided by financing activities
|
— | 5,851,764 | 2,504,000 | |||||||||
Net increase in cash and cash equivalents
|
(2,355,364 | ) | 2,699,590 | 359,875 | ||||||||
Cash and cash equivalents at beginning of period
|
4,044,309 | 1,344,719 | 984,844 | |||||||||
Cash and cash equivalents at end of period
|
$ | 1,688,945 | $ | 4,044,309 | $ | 1,344,719 | ||||||
Supplemental cash flow information:
|
||||||||||||
Cash paid for income taxes
|
$ | — | $ | — | $ | — | ||||||
Cash paid for interest
|
$ | — | $ | 15,014 | $ | — | ||||||
Non-cash investing and financing activities
|
||||||||||||
Relative fair value of detachable warrants issued with convertible notes payable
|
$ | — | $ | — | $ | 218,862 | ||||||
Issuance of stock from notes payable conversion
|
$ | — | $ | 4,228,873 | $ | — | ||||||
Issuance of stock from notes payable conversion, related party
|
$ | — | $ | 6,700,148 | $ | — |
|
•
|
Consumer skin care products — the Company has developed a range of peptides and small molecule technologies capable of improving different aspects of the skin’s appearance, texture, tone and barrier function and are marketing these peptides as innovative ingredients for cosmetic use; and
|
|
•
|
Prescription (Rx) products — certain of the Company’s peptides have demonstrated promising results in the areas of infection control, wound healing and immune modulation and are being developed for Rx applications.
|
|
·
|
Licensing Fees
.
The Company recognizes up-front payments when persuasive evidence of an agreement exists, delivery has occurred or services have been performed, the price is fixed and determinable and collection is reasonably assured. The Company recognizes royalty revenue in the period the royalty is earned based on actual reports or estimates received from licensees.
|
|
·
|
Peptide and Consumer Product Sales
.
The Company recognizes revenue from sales of its peptides and skin care products when persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable and collection is reasonably assured.
|
|
·
|
Consumer Product Sales to Affiliated Company.
The Company sells certain skin care products under private labels to an affiliated company and recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable, collection is reasonably assured and the products have been resold to third parties or otherwise used.
|
|
·
|
Administrative Services Revenue, Related Party
.
The Company’s administrative services revenue consisted of fees received from DermaVentures, LLC (DermaVentures), a related party, for costs incurred related to the DermaVentures’ product line. Administrative services revenue was invoiced to DermaVentures at or near cost and was recorded as earned on a gross basis when services had been rendered, no obligations remained outstanding and collection was reasonably assured.
In September 2009, the Company terminated the Management Services Agreement with DermaVentures. As a result, the Company had no further management or administrative responsibilities related to DermaVentures from which the Company’s administrative services revenue was derived (see Note 14).
|
Year ended December 31,
|
||||||||||||
Year
|
2011
|
2010
|
2009
|
|||||||||
2012
|
3,604,521 | 3,647,638 | 3,325,726 | |||||||||
2013
|
1,971,034 | 4,667,445 | 4,197,816 |
|
(i)
|
amended and converted $3,665,425 of aggregate principal amount and accrued interest due on the 2008 Amended Note into 6,109,041 shares of the Company’s common stock at a conversion price of $0.60 per share;
|
|
(ii)
|
amended and converted $2,326,334 of aggregate principal amount and accrued interest due on its 2010 Note into 3,877,223 shares of the Company’s common stock at a conversion price of $0.60 per share;
|
|
(iii)
|
amended and exercised the 2008 Warrant to purchase 1,500,000 shares of the Company’s common stock at an exercise price of $0.50 per share for a total of $750,000; and
|
|
(iv)
|
amended and exercised its 2010 Warrant to purchase 1,100,000 shares of the Company’s common stock at an exercise price of $0.40 per share for a total of $440,000.
|
|
(i)
|
RBFSC amended and exercised its warrant issued on March 3, 2006 for 300,000 shares of the Company’s common stock at an exercise price of $0.50 per share for a total of $150,000; and
|
|
(ii)
|
the Company agreed to comply with the requirements for “qualified small business stock” under Section 1202 of the Internal Revenue Code of 1986, as amended.
|
|
(i)
|
$3,877,164 of aggregate principal amount and accrued interest of the 2009 Notes was converted into 6,461,921 shares of the Company’s common stock at a conversion price of $0.60 per share;
|
|
(ii)
|
$115,014 of aggregate principal amount and accrued interest of the 2009 Notes was repaid;
|
|
(iii)
|
$1,060,099 of aggregate principal amount and accrued interest of the 2010 Notes was converted into 1,766,827 shares of the Company’s common stock at a conversion price of $0.60 per share;
|
|
(iv)
|
certain of the 2009 Warrants were exercised for an aggregate of 1,452,000 shares of the Company’s common stock at an exercise price of $0.50 per share for a total of $726,000; and
|
|
(v)
|
the 2010 Warrants were exercised for an aggregate of 500,000 shares of the Company’s common stock at an exercise price of $0.40 per share for a total of $200,000.
|
December 31,
|
||||||||
2011
|
2010
|
|||||||
Work in process
|
$ | 156,425 | $ | 66,365 | ||||
Finished goods
|
207,444 | 212,027 | ||||||
$ | 363,869 | $ | 278,392 |
December 31,
|
||||||||
2011
|
2010
|
|||||||
Machinery and equipment
|
$ | 520,950 | $ | 569,809 | ||||
Website development costs
|
63,175 | 42,520 | ||||||
Furniture and fixtures
|
50,441 | 55,614 | ||||||
Leasehold improvements
|
43,993 | 43,993 | ||||||
678,559 | 711,936 | |||||||
Less accumulated depreciation
|
(652,461 | ) | (667,758 | ) | ||||
Property and equipment, net
|
$ | 26,098 | $ | 44,178 |
December 31, 2011
|
December 31, 2010
|
||||||||||||||||||||||||||
Weighted
average
amortization
period
(in years)
|
Gross
carrying
amount
|
Accumulated
amortization
|
Intangible
assets, net
|
Gross
carrying
amount
|
Accumulated
amortization
|
Intangible
assets, net
|
|||||||||||||||||||||
Antimicrobial technology
|
17 | $ | 222,187 | $ | (222,187 | ) | $ | — | $ | 222,187 | $ | (222,187 | ) | $ | — | ||||||||||||
Licensing agreements
|
17 | 61,391 | (35,950 | ) | 25,441 | 61,391 | (32,355 | ) | 29,036 | ||||||||||||||||||
Patents pending and approved
|
13 | 834,301 | (713,445 | ) | 120,856 | 834,301 | (649,269 | ) | 185,032 | ||||||||||||||||||
Total
|
$ | 1,117,879 | $ | (971,582 | ) | $ | 146,297 | $ | 1,117,879 | $ | (903,811 | ) | $ | 214,068 |
Year
|
Licensing
agreements
|
Patents pending
and approved
|
Total
|
|||||||||
2012
|
$ | 3,595 | $ | 64,175 | $ | 67,770 | ||||||
2013
|
3,595 | 37,814 | 41,409 | |||||||||
2014
|
3,595 | 5,054 | 8,649 | |||||||||
2015
|
3,595 | 5,054 | 8,649 | |||||||||
2016
|
3,595 | 5,054 | 8,649 | |||||||||
Thereafter
|
7,466 | 3,705 | 11,171 |
(i)
|
Camden shall manage NuGlow;
|
(ii)
|
any profit distribution by NuGlow is to be paid in the following order: (a) 30% to the Company and 70% to NuGlow’s other member until the 2011 Contribution is fully repaid; (b) 70% to the Company and 30% to NuGlow’s other member until the Company’s Initial Contribution is fully repaid; and (c) ratably among members in accordance with each member’s percentage interest;
|
(iii)
|
upon a dissolution or liquidation, all of NuGlow’s liquidation proceeds is to be paid in the following order: (a) 30% to the Company and 70% to NuGlow’s other member until the 2011 Contribution is fully repaid; (b) 100% to the Company until the Company’s Initial Contribution is fully repaid; and (c) ratably among members in accordance with each member’s percentage interest;
|
(iv)
|
NuGlow may not take certain actions or engage in certain transactions without the Company’s prior written consent, including, without limitation, the incurrence of indebtedness, the admission of additional members, the merger or sale of NuGlow or its assets, or the dissolution of NuGlow;
|
(v)
|
NuGlow shall establish a product oversight committee consisting of two designees of the Company and one designee of Camden to oversee certain matters related to NuGlow product management;
|
(vi)
|
transfers of NuGlow membership interests shall be subject to certain restrictions, including, without limitation, a right of first refusal by NuGlow and its members;
|
(vii)
|
upon certain circumstances, the Company has the right to purchase all of Camden’s membership interest in NuGlow (Purchase Option); and
|
(viii)
|
if the Company does not exercise the Purchase Option, or at any time before the Company exercises its Purchase Option upon a change of control of the Company or a sale of substantially all of its assets or upon the Company’s insolvency or bankruptcy, Camden has the right to purchase all of the Company’s membership interest in NuGlow.
|
December 31,
|
||||||||
NuGlow’s Condensed Balance Sheets
|
2011
(Unaudited)
|
2010
(Unaudited)
|
||||||
Assets
|
||||||||
Cash
|
$ | 200 | $ | 75,147 | ||||
Accounts receivable, net
|
18,276 | 2,574 | ||||||
Inventory
|
275,838 | 140,443 | ||||||
Prepaid expenses and other current assets
|
9,513 | 11,455 | ||||||
Total assets
|
$ | 303,827 | $ | 229,619 | ||||
Liabilities and members’ equity
|
||||||||
Accounts payable and current liabilities
|
$ | 280,867 | $ | 61,041 | ||||
Members’ equity
|
514,661 | 374,661 | ||||||
Accumulated deficit
|
(491,701 | ) | (206,083 | ) | ||||
Total liabilities and members’ equity
|
$ | 303,827 | $ | 229,619 |
Year ended December 31,
|
||||||||
NuGlow’s Condensed Statements of Operations
|
2011
(Unaudited)
|
2010
(Unaudited)
|
||||||
Revenue
|
$ | 1,065,639 | $ | 103,797 | ||||
Cost of goods sold
|
(444,663 | ) | (88,336 | ) | ||||
Operating expenses
|
(906,594 | ) | (221,544 | ) | ||||
Net loss
|
$ | (285,618 | ) | $ | (206,083 | ) |
Year ended December 31,
|
||||||||
2011
|
2010
|
|||||||
Deposits
|
$ | 8,522 | $ | 8,522 | ||||
Option to purchase interest in affiliated company (see Note 6)
|
12,362 | 20,657 | ||||||
Other assets
|
$ | 20,884 | $ | 29,179 |
Year ended December 31,
|
||||||||
2011
|
2010
|
|||||||
Deferred revenue, affiliated company
|
$ | 254,826 | $ | 115,527 | ||||
Deferred cost of revenue, affiliated company
|
119,984 | 65,048 | ||||||
Deferred gross profit, affiliated company
|
$ | 134,842 | $ | 50,479 |
|
•
|
Level 1 — Quoted prices in active markets for identical securities;
|
|
•
|
Level 2 — Other significant observable inputs (including quoted prices in active markets for similar securities); and
|
|
•
|
Level 3 — Significant unobservable inputs (including the Company’s own assumptions in determining fair value of investments).
|
December 31,
2011
|
Quoted Prices in
Active Market
for Identical
Assets (Level 1)
|
Significant Other
Observable Inputs
(Level 2)
|
Significant
Unobservable
Inputs (Level 3)
|
|||||||||||||
Money market funds
|
$ | 1,484,101 | $ | 1,484,101 | $ | — | $ | — | ||||||||
Option to purchase interest in affiliated company
|
12,362 | — | — | 12,362 |
December 31,
2010
|
Quoted Prices in
Active Market for
Identical Assets
(Level 1)
|
Significant Other
Observable Inputs
(Level 2)
|
Significant
Unobservable
Inputs (Level 3)
|
|||||||||||||
Money market funds
|
$ | 3,680,348 | $ | 3,680,348 | $ | — | $ | — | ||||||||
Option to purchase interest in affiliated company
|
20,657 | — | — | 20,657 |
December 31,
|
||||||||||||||||||||||||
2011
|
2010
|
|||||||||||||||||||||||
Number
|
Price
range
|
Weighted
Average
|
Number
|
Price
range
|
Weighted
Average
|
|||||||||||||||||||
Warrants issued to employees and non-employees for services
|
701,169 | $ | 0.25 – $1.50 | $ | 1.00 | 1,707,419 | $ | 0.25 – $6.00 | $ | 1.56 | ||||||||||||||
Warrants issued in connection with 2001 convertible debt financing
|
124,000 | $ | 1.00 | $ | 1.00 | 308,000 | $ | 1.00 | $ | 1.00 | ||||||||||||||
Warrants issued in connection with 2002 and 2003 equity financings
|
258,600 | $ | 1.00 | $ | 1.00 | 258,600 | $ | 1.00 | $ | 1.00 | ||||||||||||||
Warrants issued in connection with 2006 equity financing
|
— | $ | — | $ | — | 109,800 | $ | 1.00 | $ | 1.00 | ||||||||||||||
Warrants issued in connection with 2009 convertible debt financing
|
142,500 | $ | 1.00 | $ | 1.00 | 142,500 | $ | 1.00 | $ | 1.00 | ||||||||||||||
Total outstanding warrants
|
1,226,269 | $ | 0.25 – $1.50 | $ | 1.00 | 2,526,319 | $ | 0.25 – $6.00 | $ | 1.38 |
Year ended December 31,
|
||||||||||
2011
|
2010
|
2009
|
||||||||
Risk-free interest rate
|
0.90 – 2.17% | 1.41 – 2.77% | 1.89 – 2.78% | |||||||
Expected dividend yield
|
0 | 0 | 0 | |||||||
Expected term in years
|
5.0 – 6.0 | 5.0 – 6.0 | 5.5 – 6.0 | |||||||
Expected volatility
|
112 – 118% | 98 – 106% | 101 – 105% |
Year ended December 31,
|
||||||||||||
2011
|
2010
|
2009
|
||||||||||
Research and development
|
$ | 41,778 | $ | 9,887 | $ | 1,533 | ||||||
Marketing and business development
|
17,068 | 33,264 | 22,011 | |||||||||
General and administrative
|
90,622 | 145,769 | 78,426 | |||||||||
Total stock-based compensation
|
$ | 149,468 | $ | 188,920 | $ | 101,970 |
Shares
Subject to
Options
|
Weighted
Average
Exercise
Price per
Share
|
Weighted
Average
Remaining
Contractual
Life
|
Aggregate
Intrinsic
Value
|
|||||||||||||
Outstanding, December 31, 2008
|
3,305,194 | $ | 1.17 | |||||||||||||
Granted
|
240,500 | $ | 0.40 | |||||||||||||
Exercised
|
— | — | ||||||||||||||
Forfeited
|
— | — | ||||||||||||||
Expired
|
(434,444 | ) | $ | 1.61 | ||||||||||||
Outstanding, December 31, 2009
|
3,111,250 | $ | 1.04 | |||||||||||||
Granted
|
785,000 | $ | 0.35 | |||||||||||||
Exercised
|
— | $ | — | |||||||||||||
Forfeited
|
— | $ | — | |||||||||||||
Expired
|
(27,300 | ) | $ | 0.70 | ||||||||||||
Outstanding, December 31, 2010
|
3,868,950 | $ | 0.91 | |||||||||||||
Granted
|
407,000 | $ | 0.28 | |||||||||||||
Exercised
|
— | $ | — | |||||||||||||
Forfeited
|
(38,543 | ) | $ | 0.37 | ||||||||||||
Expired
|
(973,200 | ) | $ | 1.53 | ||||||||||||
Outstanding, December 31, 2011
|
3,264,207 | $ | 0.65 | 4.28 | $ | 10,200 | ||||||||||
Exercisable, December 31, 2011
|
2,872,372 | $ | 0.70 | 3.64 | $ | 2,000 |
Options Outstanding
|
Options Exercisable
|
|||||||||||||||||||||
Range of
Exercise
Prices
|
Shares
|
Weighted
Average
Remaining
Contractual
Life (Years)
|
Weighted
Average
Exercise
Price
|
Shares
|
Weighted
Average
Exercise
Price
|
|||||||||||||||||
$ | 0.15 - $0.40 | 1,273,957 | 6.42 | $ | 0.33 | 882,122 | $ | 0.34 | ||||||||||||||
$ | 0.49 - $0.76 | 815,000 | 4.43 | $ | 0.58 | 815,000 | $ | 0.58 | ||||||||||||||
$ | 0.77 - $0.85 | 245,000 | 4.36 | $ | 0.82 | 245,000 | $ | 0.82 | ||||||||||||||
$ | 1.00 - $1.80 | 930,250 | 1.20 | $ | 1.11 | 930,250 | $ | 1.11 | ||||||||||||||
$ | 0.15 - $1.80 | 3,264,207 | 4.28 | $ | 0.65 | 2,872,372 | $ | 0.70 |
Year Ended December 31,
|
||||||||||
2011
|
2010
|
2009
|
||||||||
Customer A
|
36% | 49% | 71% | |||||||
Customer B
|
— | — | 10 | |||||||
Customer C
|
21 | 34 | — | |||||||
Customer D
|
25 | — | — | |||||||
Customer E
|
10 | — | — |
As of December 31,
|
||||||||
2011
|
2010
|
|||||||
Gross deferred tax assets (liabilities):
|
||||||||
Net operating loss carryforwards
|
$ | 11,560,200 | $ | 10,879,800 | ||||
Stock compensation
|
588,000 | 561,400 | ||||||
Accrued expenses
|
15,100 | 17,900 | ||||||
Fixed and intangible assets
|
49,300 | 45,900 | ||||||
Deferred gross profit, related party
|
45,800 | — | ||||||
Other
|
1,800 | 17,200 | ||||||
Gross deferred tax assets
|
12,260,200 | 11,522,200 | ||||||
Less valuation allowance
|
(12,260,200 | ) | (11,522,200 | ) | ||||
Net deferred tax assets
|
— | — | ||||||
Deferred tax liabilities
|
— | — | ||||||
Net deferred tax assets/liabilities
|
$ | — | $ | — |
Balance at January 1, 2011
|
$ | 77,600 | ||
Addition based on tax positions taken during a prior period
|
1,294,300 | |||
Reductions based on tax positions taken during a prior period
|
(7,300 | ) | ||
Balance at December 31, 2011
|
$ | 1,364,600 |
Amount
|
Expiration
Years
|
|||||||
Net operating losses, federal
|
$ | 37,782,400 | 2012-2031 | |||||
Net operating losses, state
|
147,200 | 2030-2031 | ||||||
Tax credits, federal
|
70,300 | 2012-2021 |
Year Ended December 31,
|
||||||||||||
2011
|
2010
|
2009
|
||||||||||
Statutory rate
|
34.00 | % | 34.00 | % | 34.00 | % | ||||||
State tax
|
0.35 | % | — | — | ||||||||
Net operating loss carryforward adjustments
|
— | — | (1.46 | )% | ||||||||
Change in valuation allowance
|
(29.66 | )% | (17.65 | )% | (27.27 | )% | ||||||
Permanent items
|
(0.56 | )% | (0.30 | )% | (0.30 | )% | ||||||
True up of debt conversion expense
|
— | (16.79 | )% | — | ||||||||
True up of original issued discount related to convertible notes payable
|
— | — | (3.23 | )% | ||||||||
Other
|
(4.13 | )% | 0.74 | % | (1.74 | )% | ||||||
Total
|
0.00 | % | 0.00 | % | 0.00 | % |
Three Months Ended
|
||||||||||||||||||||||||||||||||
March 31,
2011
|
June 30,
2011
|
September 30,
2011
|
December 31,
2011
|
March 31,
2010
|
June 30,
2010
|
September 30,
2010
|
December 31,
2010
|
|||||||||||||||||||||||||
Net revenue
|
$ | 357,628 | $ | 693,103 | $ | 394,707 | $ | 445,900 | $ | 69,718 | $ | 330,398 | $ | 93,680 | $ | 357,887 | ||||||||||||||||
Gross profit
|
236,801 | 340,410 | 266,912 | 313,908 | 45,229 | 205,653 | 64,643 | 275,664 | ||||||||||||||||||||||||
Operating expenses
|
963,446 | 881,997 | 858,003 | 858,908 | 804,344 | 930,518 | 956,674 | 855,809 | ||||||||||||||||||||||||
Loss from operations
|
(726,645 | ) | (541,587 | ) | (591,091 | ) | (545,000 | ) | (759,115 | ) | (724,865 | ) | (892,031 | ) | (580,145 | ) | ||||||||||||||||
Other expense, net
|
16,911 | (83,288 | ) | (14,526 | ) | (3,350 | ) | (167,934 | ) | (217,622 | ) | (227,158 | ) | (4,141,932 | ) | |||||||||||||||||
Net loss
|
$ | (709,734 | ) | $ | (624,875 | ) | $ | (605,617 | ) | $ | (548,350 | ) | $ | (927,049 | ) | $ | (942,487 | ) | $ | (1,119,189 | ) | $ | (4,722,077 | ) | ||||||||
Basic and diluted net loss per share
|
$ | (0.01 | ) | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.04 | ) | $ | (0.04 | ) | $ | (0.04 | ) | $ | (0.15 | ) | ||||||||
Weighted average shares outstanding
|
49,720,255 | 49,720,255 | 49,720,255 | 49,720,255 | 25,653,512 | 25,653,512 | 25,653,512 | 31,488,144 |
Equity Compensation Plan Information
|
||||||||||||
Plan Category
|
(a)
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
|
(b)
Weighted-average
exercise price of
outstanding options,
warrants and rights
|
(c)
Number of securities
remaining available
for future issuance
under equity
compensation
plans (excluding
securities reflected
in column (a))
|
|||||||||
Equity compensation plans approved by security holders
|
3,264,207 | $ | 0.65 | 11,593,000 | ||||||||
Equity compensation plans not approved by security holders(1)
|
1,226,269 | $ | 1.00 | — | ||||||||
Total
|
4,490,476 | $ | 0.75 | 11,593,000 |
(1)
|
Consists of warrants to purchase common stock issued to certain employees and consultants in connection with services rendered and to certain shareholders in connection with financing activities.
|
|
(a).
|
Financial Statements and Schedules. The financial statements are set forth under Item 8 of this Annual Report on Form 10-K, as indexed thereunder. Financial statement schedules have been omitted since they are not required, not applicable, or the information is otherwise included.
|
|
(b).
|
Exhibits.
|
Incorporated by Reference
|
||||||
Exhibit Number
|
Exhibit Description
|
Filed Herewith
|
Form
|
Period Ending
|
Exhibit
|
Filing Date
|
2.1
|
Proposal for Approval of Reincorporation of Helix BioMedix, Inc., a Colorado corporation, from Colorado to Delaware
|
10-KSB
|
12/31/00
|
2
|
4/16/01
|
|
3.1
|
Certificate of Ownership and Merger of Helix BioMedix, Inc. a Delaware corporation and Helix BioMedix, Inc., a Louisiana corporation
|
10-KSB/A
|
12/31/02
|
3.1
|
4/30/03
|
|
3.2
|
Certificate of Incorporation of Helix BioMedix, Inc.
|
10-KSB/A
|
12/31/00
|
3-A
|
5/18/01
|
|
3.3
|
Certificate of Amendment to the Certificate of Incorporation of Helix BioMedix, Inc.
|
10-KSB/A
|
12/31/02
|
3.3
|
4/30/03
|
|
3.4
|
Bylaws of Helix BioMedix, Inc.
|
10-KSB/A
|
12/31/00
|
3-B
|
5/18/01
|
|
4.1
|
Rights Agreement dated August 21, 2003
|
10-KSB
|
12/31/03
|
10.27
|
3/26/04
|
|
4.2
|
Acceptance and Acknowledgement of Appointment dated January 4, 2004
|
10-KSB
|
12/31/03
|
10.28
|
3/26/04
|
|
10.1†
|
Helix BioMedix, Inc. Amended and Restated 2000 Stock Option Plan
|
10-KSB/A
|
12/31/02
|
10.5
|
4/30/03
|
|
10.1(a)†
|
Form of Helix BioMedix, Inc. Stock Option Agreement for Purchase of Stock (2000 Stock Option Plan)
|
10-KSB/A
|
12/31/02
|
Annex A to 10.5
|
4/30/03
|
|
10.1(b)†
|
Helix BioMedix, Inc. 2011 Stock Option Plan
|
10-K
|
12/31/10
|
10.1(b)
|
3/24/11
|
|
10.1(c)†
|
Form of Helix BioMedix, Inc. Incentive Stock Option Agreement (2011 Stock Option Plan)
|
10-K
|
12/31/10
|
10.1(c)
|
3/24/11
|
|
10.1(d)†
|
Form of Helix BioMedix, Inc. Nonqualified Stock Option Agreement (2011 Stock Option Plan)
|
10-K
|
12/31/10
|
10.1(d)
|
3/24/11
|
|
10.2†
|
Employment Agreement dated September 24, 2003, effective July 1, 2003, between the Company and R. Stephen Beatty
|
10-KSB
|
12/31/03
|
10.9
|
3/26/04
|
|
10.2(a)†
|
Amendment to Employment Agreement dated December 10, 2003 between the Company and R. Stephen Beatty
|
10-KSB
|
12/31/03
|
10.13
|
3/26/04
|
|
10.2(b)†
|
Second Amendment to Employment Agreement dated effective as of June 30, 2006 between the Company and R. Stephen Beatty
|
10-QSB
|
9/30/06
|
10.9(a)
|
11/9/06
|
|
10.2(c)†
|
Third Amendment to Employment Agreement dated effective as of June 15, 2007 between the Company and R. Stephen Beatty
|
10-QSB
|
9/30/07
|
10.9(b)
|
11/8/07
|
|
10.3†
|
Employment Letter Agreement dated October 8, 2007 between the Company and Robin L. Carmichael
|
10-QSB
|
9/30/07
|
10.28
|
11/8/07
|
|
10.3(a)†
|
First Amendment to Employment Letter Agreement dated effective as of November 15, 2007 between the Company and Robin L. Carmichael
|
10-K
|
12/31/07
|
10.5(a)
|
3/21/08
|
|
10.3(b)†
|
Second Amendment to Employment Letter Agreement dated effective as of June 30, 2008 between the Company and Robin L. Carmichael
|
10-Q
|
6/30/08
|
10.5(b)
|
7/30/08
|
|
10.4
|
Lease between the Company and Teachers Insurance & Annuity Association of America, Inc. dated August 14, 2001
|
10-KSB
|
12/31/01
|
10.11
|
4/1/02
|
|
10.4(a)
|
First Amendment to Lease between the Company and Teachers Insurance and Annuity Association of America, Inc. dated December 6, 2005
|
10-KSB
|
12/31/05
|
10.17(a)
|
3/27/06
|
|
10.4(b)
|
Second Amendment to Lease between the Company and Teachers Insurance and Annuity Association of America, Inc. dated October 4, 2006
|
10-KSB
|
12/31/06
|
10.17(b)
|
3/26/07
|
Incorporated by Reference
|
||||||
Exhibit Number
|
Exhibit Description
|
Filed Herewith
|
Form
|
Period Ending
|
Exhibit
|
Filing Date
|
10.4(c)
|
Third Amendment to Lease entered into on July 29, 2009 between the Company and Teachers Insurance and Annuity Association of America, Inc.
|
10-Q
|
9/30/09
|
10.10(c)
|
11/5/09
|
|
10.5
|
University of British Columbia License Agreement dated October 1, 2001
|
10-KSB
|
12/31/01
|
10.5
|
4/1/02
|
|
10.6*
|
License Agreement dated August 16, 2007 between the Company and Goldschmidt GmbH
|
10-QSB
|
9/30/07
|
10.27
|
11/8/07
|
|
10.6(a)
|
First Amendment to License Agreement dated as of December 10, 2010 between the Company and Goldschmidt GmbH
|
10-K
|
12/31/10
|
10.11(a)
|
3/24/11
|
|
10.6(b)*
|
Second Amendment to License Agreement dated as of January 27, 2011 between the Company and Goldschmidt GmbH
|
10-Q
|
3/31/11
|
10.11(b)
|
5/5/11
|
|
10.7*
|
License Agreement dated August 27, 2008 between the Company and Rodan & Fields, LLC
|
10-Q
|
9/30/08
|
10.18
|
11/5/08
|
|
10.7(a)
|
First Amendment to License Agreement dated February 25, 2009 between the Company and Rodan & Fields, LLC
|
10-Q
|
3/31/09
|
10.18(a)
|
5/7/09
|
|
10.7(b)
|
Second Amendment to License Agreement dated as of August 25, 2011 between the Company and Rodan & Fields, LLC
|
10-Q
|
9/30/11
|
10.12(b)
|
11/3/11
|
|
10.8*
|
Manufacturing and Supply Agreement dated as of January 9, 2008 between the Company and Peptisyntha, Inc.
|
10-Q
|
3/31/08
|
10.16
|
5/15/08
|
|
10.9*
|
International Distribution Agreement dated as of March 3, 2010 between the Company and RubyDerm Bio Inc.
|
10-Q
|
3/31/10
|
10.17
|
5/6/10
|
|
10.9(a)*
|
International Distribution Agreement dated as of December 16, 2010 between the Company and Dermopia Inc.
|
10-K
|
12/31/10
|
10.17(a)
|
3/24/11
|
|
10.10
|
Membership Interest Agreement dated as of July 1, 2010 among the Company, Camden Street Partners, LLC, NuGlow Cosmaceuticals, LLC and Steven Sheiner
|
10-Q
|
6/30/10
|
10.18
|
8/5/10
|
|
10.11*
|
Amended and Restated Operating Agreement of NuGlow Cosmaceuticals, LLC dated as of July 1, 2010 among the Company, Camden Street Partners, LLC and NuGlow Cosmaceuticals, LLC
|
10-Q
|
6/30/10
|
10.19
|
8/5/10
|
|
10.11(a)
|
First Amendment dated September 1, 2011 to Amended and Restated Operating Agreement of NuGlow Cosmaceuticals, LLC and Supply Agreement among the Company, NuGlow Cosmaceuticals, LLC and Camden Street Partners, LLC
|
10-Q
|
9/30/11
|
10.19(a)
|
11/3/11
|
|
10.12*
|
Supply Agreement dated as of July 1, 2010 between the Company and NuGlow Cosmaceuticals, LLC
|
10-Q
|
6/30/10
|
10.20
|
8/5/10
|
|
23.1
|
Consent of KPMG LLP
|
X
|
||||
31.1
|
Certification of the Company’s Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934
|
X
|
||||
31.2
|
Certification of the Company’s Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934
|
X
|
||||
32.1
|
Certification of the Company’s Chief Executive Officer pursuant to 18 U.S.C. Section 1350
|
X
|
||||
32.2
|
Certification of the Company’s Chief Financial Officer pursuant to 18 U.S.C. Section 1350
|
X
|
||||
101.INS
|
XBRL Instance Document
|
X
|
||||
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
X
|
||||
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
X
|
||||
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
X
|
||||
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
X
|
||||
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
X
|
†
|
Indicates a management contract or compensatory plan or arrangement.
|
*
|
Pursuant to a request for confidential treatment, portions of this Exhibit have been redacted from the publicly-filed document and have been furnished separately to the Securities and Exchange Commission as required by Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
|
HELIX BIOMEDIX, INC.
(Registrant)
|
|||
Date: March 27, 2012
|
By:
|
/s/ R. Stephen Beatty | |
R. Stephen Beatty
President, Chief Executive Officer and Acting Chief Financial
Officer
(principal executive officer, principal financial officer
and
principal accounting officer)
|
Signature
|
Title
|
Date
|
||
/s/ R. STEPHEN BEATTY
|
President, Chief Executive Officer,
|
March 27, 2012
|
||
R. Stephen Beatty
|
Acting Chief Financial Officer and Director
|
|||
/s/ RANDALL L-W. CAUDILL, PH.D.
|
Director
|
March 27, 2012
|
||
Randall L-W. Caudill, Ph.D.
|
||||
/s/ JOHN F. CLIFFORD
|
Director
|
March 27, 2012
|
||
John F. Clifford
|
||||
/s/ RICHARD M. COHEN
|
Director
|
March 27, 2012
|
||
Richard M. Cohen
|
||||
/s/ LAWRENCE BLAKE JONES
|
Director
|
March 27, 2012
|
||
Lawrence Blake Jones
|
||||
/s/ JEFFREY A. MILLER, PH.D.
|
Director
|
March 27, 2012
|
||
Jeffrey A. Miller, Ph.D.
|
||||
/s/ BARRY L. SEIDMAN
|
Director
|
March 27, 2012
|
||
Barry L. Seidman
|
||||
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
91-2099117
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
Large accelerated filer
¨
|
Accelerated filer
¨
|
Non-accelerated filer
¨
|
Smaller reporting company
x
|
(Do not check if a smaller
reporting company)
|
Page
|
|
PART I - FINANCIAL INFORMATION
|
|
Item 1. Financial Statements
|
1
|
Condensed Balance Sheets (unaudited)
|
1
|
Condensed Statements of Operations and Comprehensive Loss (unaudited)
|
2
|
Condensed Statements of Stockholders’ Equity (unaudited)
|
3
|
Condensed Statements of Cash Flows (unaudited)
|
4
|
Notes to Condensed Financial Statements (unaudited)
|
5
|
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
13
|
Item 3. Quantitative and Qualitative Disclosures About Market Risk
|
20
|
Item 4. Controls and Procedures
|
20
|
PART II - OTHER INFORMATION
|
|
Item 1A. Risk Factors
|
21
|
Item 6. Exhibits
|
22
|
Signatures
|
23
|
ITEM 1.
|
Financial Statements.
|
September 30,
2012
|
December 31,
2011
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 216,534 | $ | 1,688,945 | ||||
Accounts receivable, net
|
284,809 | 239,773 | ||||||
Accounts receivable, affiliated company, net
|
112,691 | 200,935 | ||||||
Inventory
|
330,989 | 363,869 | ||||||
Deferred debt issuance costs, current
|
201,040 | — | ||||||
Prepaid expenses and other assets
|
64,009 | 64,583 | ||||||
Total current assets
|
1,210,072 | 2,558,105 | ||||||
Property and equipment, net
|
19,602 | 26,098 | ||||||
Intangible assets, net
|
95,470 | 146,297 | ||||||
Deferred debt issuance costs, non-current
|
150,917 | — | ||||||
Other long term assets
|
8,522 | 20,884 | ||||||
Investment in affiliated company
|
217,339 | 223,255 | ||||||
Total assets
|
$ | 1,701,922 | $ | 2,974,639 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 321,565 | $ | 125,324 | ||||
Accrued compensation and benefits
|
64,933 | 87,859 | ||||||
Accrued expenses
|
63,603 | 55,463 | ||||||
Deferred revenue
|
7,060 | — | ||||||
Deferred gross profit, affiliated company
|
62,509 | 134,842 | ||||||
Deferred rent, current
|
— | 7,155 | ||||||
Total current liabilities
|
519,670 | 410,643 | ||||||
Deferred rent, non-current
|
32,258 | 28,660 | ||||||
Total liabilities
|
551,928 | 439,303 | ||||||
Commitments and contingencies
|
||||||||
Stockholders’ equity:
|
||||||||
Preferred stock, $0.001 par value, 25,000,000 shares authorized; no shares issued or outstanding
|
— | — | ||||||
Common stock, $0.001 par value, 100,000,000 shares authorized; 49,720,255 shares outstanding at September 30, 2012 and December 31, 2011
|
49,721 | 49,721 | ||||||
Additional paid-in capital
|
49,192,432 | 48,542,453 | ||||||
Accumulated deficit
|
(48,092,159 | ) | (46,056,838 | ) | ||||
Total stockholders’ equity
|
1,149,994 | 2,535,336 | ||||||
Total liabilities and stockholders’ equity
|
$ | 1,701,922 | $ | 2,974,639 |
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Revenue:
|
||||||||||||||||
Licensing fees
|
$ | 240,550 | $ | 176,922 | $ | 729,095 | $ | 513,322 | ||||||||
Peptide and consumer product sales
|
176,669 | 100,884 | 605,190 | 576,165 | ||||||||||||
Consumer product sales to affiliated company
|
51,852 | 116,901 | 285,730 | 355,951 | ||||||||||||
Total revenue
|
469,071 | 394,707 | 1,620,015 | 1,445,438 | ||||||||||||
Cost of revenue:
|
||||||||||||||||
Cost of peptide and consumer product sales
|
113,407 | 70,834 | 380,543 | 409,829 | ||||||||||||
Cost of consumer product sales to affiliated company
|
21,832 | 56,961 | 128,684 | 191,486 | ||||||||||||
Total cost of revenue
|
135,239 | 127,795 | 509,227 | 601,315 | ||||||||||||
Gross profit
|
333,832 | 266,912 | 1,110,788 | 844,123 | ||||||||||||
Operating expenses:
|
||||||||||||||||
Research and development
|
133,009 | 109,221 | 308,036 | 425,131 | ||||||||||||
Marketing and business development
|
302,040 | 225,732 | 874,791 | 674,187 | ||||||||||||
General and administrative
|
418,868 | 327,162 | 1,132,679 | 1,043,843 | ||||||||||||
Accounting, legal and professional fees
|
205,192 | 168,043 | 605,615 | 477,676 | ||||||||||||
Depreciation and amortization
|
22,896 | 27,845 | 68,054 | 82,609 | ||||||||||||
Total operating expenses
|
1,082,005 | 858,003 | 2,989,175 | 2,703,446 | ||||||||||||
Loss from operations
|
(748,173 | ) | (591,091 | ) | (1,878,387 | ) | (1,859,323 | ) | ||||||||
Other income (expense):
|
||||||||||||||||
Interest income
|
133 | 704 | 1,257 | 2,836 | ||||||||||||
Amortization of debt issuance costs
|
(50,673 | ) | — | (112,913 | ) | — | ||||||||||
Equity in income (loss) of affiliated company
|
14,674 | (23,373 | ) | (32,916 | ) | (74,446 | ) | |||||||||
Change in fair value of option to purchase interest in affiliated company
|
(1,145 | ) | 8,143 | (12,362 | ) | (9,293 | ) | |||||||||
Total other income (expense), net
|
(37,011 | ) | (14,526 | ) | (156,934 | ) | (80,903 | ) | ||||||||
Net loss and comprehensive loss
|
$ | (785,184 | ) | $ | (605,617 | ) | $ | (2,035,321 | ) | $ | (1,940,226 | ) | ||||
Basic and diluted net loss per share
|
$ | (0.02 | ) | $ | (0.01 | ) | $ | (0.04 | ) | $ | (0.04 | ) | ||||
Weighted average shares outstanding
|
49,720,255 | 49,720,255 | 49,720,255 | 49,720,255 |
Common Stock
|
||||||||||||||||||||
Number
of Shares
|
Amount
|
Additional
Paid-in
Capital
|
Accumulated
Deficit
|
Stockholders’ Equity
|
||||||||||||||||
Balance at December 31, 2010
|
49,720,255 | $ | 49,721 | $ | 48,392,985 | $ | (43,568,262 | ) | $ | 4,874,444 | ||||||||||
Stock-based compensation
|
— | — | 149,468 | — | 149,468 | |||||||||||||||
Net loss
|
— | — | — | (2,488,576 | ) | (2,488,576 | ) | |||||||||||||
Balance at December 31, 2011
|
49,720,255 | 49,721 | 48,542,453 | (46,056,838 | ) | 2,535,336 | ||||||||||||||
Stock-based compensation
|
— | — | 185,109 | — | 185,109 | |||||||||||||||
Fair value of warrants issued in connection with letter of credit
|
— | — | 464,870 | — | 464,870 | |||||||||||||||
Net loss
|
— | — | — | (2,035,321 | ) | (2,035,321 | ) | |||||||||||||
Balance at September 30, 2012
|
49,720,255 | $ | 49,721 | $ | 49,192,432 | $ | (48,092,159 | ) | $ | 1,149,994 |
Nine Months Ended September 30,
|
||||||||
2012
|
2011
|
|||||||
Cash flows from operating activities
|
||||||||
Net loss
|
$ | (2,035,321 | ) | $ | (1,940,226 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Depreciation and amortization
|
68,054 | 82,609 | ||||||
Stock-based compensation expense
|
185,109 | 132,964 | ||||||
Amortization of debt issuance costs
|
112,913 | — | ||||||
Equity in loss of affiliated company
|
32,916 | 74,446 | ||||||
Change in fair value of option to purchase interest in affiliated company
|
12,362 | 9,293 | ||||||
Changes in assets and liabilities:
|
||||||||
Accounts receivable, net
|
(45,036 | ) | (19,097 | ) | ||||
Accounts receivable, affiliated company, net
|
88,244 | (204,010 | ) | |||||
Inventory
|
32,880 | (77,695 | ) | |||||
Prepaid expenses and other current assets
|
574 | 18,746 | ||||||
Accounts payable
|
196,241 | (54,547 | ) | |||||
Accrued compensation and benefits
|
(22,926 | ) | 5,814 | |||||
Other accrued expenses
|
4,583 | (61,118 | ) | |||||
Deferred revenue
|
7,060 | — | ||||||
Deferred gross profit, affiliated company
|
(72,333 | ) | 121,098 | |||||
Net cash used in operating activities
|
(1,434,680 | ) | (1,911,723 | ) | ||||
Cash flows from investing activities
|
||||||||
Purchases of property and equipment
|
(10,731 | ) | (2,669 | ) | ||||
Website development
|
— | (20,655 | ) | |||||
Investment in affiliated company
|
(27,000 | ) | (42,000 | ) | ||||
Net cash used in investing activities
|
(37,731 | ) | (65,324 | ) | ||||
Net decrease in cash and cash equivalents
|
(1,472,411 | ) | (1,977,047 | ) | ||||
Cash and cash equivalents at beginning of period
|
1,688,945 | 4,044,309 | ||||||
Cash and cash equivalents at end of period
|
$ | 216,534 | $ | 2,067,262 |
|
•
|
Level 1 — Quoted prices in active markets for identical securities;
|
|
•
|
Level 2 — Other significant observable inputs (including quoted prices in active markets for similar securities); and
|
|
•
|
Level 3 — Significant unobservable inputs (including the Company’s own assumptions in determining fair value of investments).
|
September 30,
2012
|
Quoted Prices in
Active Market for
Identical Assets
(Level 1)
|
Significant Other Observable Inputs
(Level 2)
|
Significant
Unobservable Inputs
(Level 3)
|
|||||||||||||
Money market funds
|
$ | 35,358 | $ | 35,358 | $ | — | $ | — | ||||||||
Option to purchase interest in affiliated company
|
$ | — | $ | — | $ | — | $ | — |
September 30,
2012
|
December 31,
2011
|
|||||||
Work in process
|
$ | 132,085 | $ | 156,425 | ||||
Finished goods
|
198,904 | 207,444 | ||||||
$ | 330,989 | $ | 363,869 |
September 30,
2012
|
December 31,
2011
|
|||||||
Machinery and equipment
|
$ | 520,716 | $ | 520,950 | ||||
Website development costs
|
63,175 | 63,175 | ||||||
Furniture and fixtures
|
51,630 | 50,441 | ||||||
Leasehold improvements
|
5,519 | 43,993 | ||||||
641,040 | 678,559 | |||||||
Less accumulated depreciation
|
(621,438 | ) | (652,461 | ) | ||||
Property and equipment, net
|
$ | 19,602 | $ | 26,098 |
September 30,
2012
|
December 31,
2011
|
|||||||
Antimicrobial technology
|
$ | 222,187 | $ | 222,187 | ||||
Licensing agreements
|
61,391 | 61,391 | ||||||
Patents, pending and approved
|
834,301 | 834,301 | ||||||
Total intangible assets
|
1,117,879 | 1,117,879 | ||||||
Less accumulated amortization
|
(1,022,409 | ) | (971,582 | ) | ||||
Intangible assets, net
|
$ | 95,470 | $ | 146,297 |
NuGlow’s Condensed Balance Sheets
(Unaudited)
|
September 30,
2012
|
December 31,
2011
|
||||||
Assets
|
||||||||
Cash
|
$ | 4,891 | $ | 200 | ||||
Accounts receivable, net
|
33,807 | 18,276 | ||||||
Inventory
|
162,157 | 275,838 | ||||||
Prepaid expenses and other current assets
|
8,169 | 9,513 | ||||||
Total assets
|
$ | 209,024 | $ | 303,827 | ||||
Liabilities and members’ equity
|
||||||||
Accounts payable and current liabilities
|
$ | 205,785 | $ | 280,867 | ||||
Members’ equity and accumulated deficit
|
3,239 | 22,960 | ||||||
Total liabilities and members’ equity
|
$ | 209,024 | $ | 303,827 |
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
NuGlow’s Condensed Statements of Operations
(Unaudited)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Revenue
|
$ | 184,976 | $ | 264,139 | $ | 670,088 | $ | 756,023 | ||||||||
Cost of goods sold
|
(80,807 | ) | (118,660 | ) | (308,957 | ) | (317,024 | ) | ||||||||
Operating expenses
|
(55,255 | ) | (223,388 | ) | (470,852 | ) | (687,150 | ) | ||||||||
Net profit (loss)
|
$ | 48,914 | $ | (77,909 | ) | $ | (109,721 | ) | $ | (248,151 | ) |
September 30,
2012
|
December 31,
2011
|
|||||||
Deposits
|
$ | 8,522 | $ | 8,522 | ||||
Option to purchase interest in affiliated company
|
— | 12,362 | ||||||
Other assets
|
$ | 8,522 | $ | 20,884 |
September 30,
2012
|
December 31,
2011
|
|||||||
Deferred revenue, affiliated company
|
$ | 122,960 | $ | 254,826 | ||||
Deferred cost of revenue, affiliated company
|
60,451 | 119,984 | ||||||
Deferred gross profit, affiliated company
|
$ | 62,509 | $ | 134,842 |
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||||||||
Risk-free interest rate
|
— | 0.90% | – | 1.17% | 0.87% | – | 1.14% | 0.90% | – | 2.17% | ||||||||||||
Expected dividend yield
|
— | 0 | 0 | 0 | ||||||||||||||||||
Expected terms in years
|
— | 5.0 | – | 6.0 | 5.0 | – | 6.0 | 5.0 | – | 6.0 | ||||||||||||
Expected volatility
|
— | 116% | 147% | – | 157% | 112% | – | 118% |
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Research and development
|
$ | 4,169 | $ | 607 | $ | 12,416 | $ | 39,091 | ||||||||
Marketing and business development
|
6,551 | 4,150 | 65,180 | 12,919 | ||||||||||||
General and administrative
|
22,451 | 9,258 | 107,513 | 80,954 | ||||||||||||
Total stock-based compensation expense
|
$ | 33,171 | $ | 14,015 | $ | 185,109 | $ | 132,964 |
Shares
Subject to
Options
|
Weighted
Average
Exercise
Price per
Share
|
Weighted
Average
Remaining
Contractual
Life (Years)
|
Aggregate
Intrinsic
Value
|
|||||||||||||
Outstanding, December 31, 2011
|
3,264,207 | $ | 0.65 | |||||||||||||
Granted
|
1,200,000 | $ | 0.25 | |||||||||||||
Exercised
|
— | — | ||||||||||||||
Forfeited
|
— | — | ||||||||||||||
Expired
|
(540,000 | ) | $ | 0.91 | ||||||||||||
Outstanding, September 30, 2012
|
3,924,207 | $ | 0.49 | 5.87 | $ | 7,960 | ||||||||||
Exercisable, September 30, 2012
|
2,955,982 | $ | 0.57 | 4.78 | $ | 4,391 |
Options Outstanding
|
Options Exercisable
|
||||||||||||||||||||||
Range of Exercise Prices
|
Shares
|
Weighted
Average
Remaining
Contractual
Life (Years)
|
Weighted
Average
Exercise
Price
|
Shares
|
Weighted
Average
Exercise
Price
|
||||||||||||||||||
$0.15 | – | $0.37 | 2,223,957 | 7.99 | $ | 0.28 | 1,255,732 | $ | 0.28 | ||||||||||||||
$0.40 | – | $0.57 | 795,000 | 4.04 | $ | 0.49 | 795,000 | $ | 0.49 | ||||||||||||||
$0.70 | – | $1.00 | 724,000 | 2.35 | $ | 0.88 | 724,000 | $ | 0.88 | ||||||||||||||
$1.20 | – | $1.80 | 181,250 | 2.03 | $ | 1.56 | 181,250 | $ | 1.56 | ||||||||||||||
$0.15 | – | $1.80 | 3,924,207 | 5.87 | $ | 0.49 | 2,955,982 | $ | 0.57 |
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Weighted average outstanding options
|
3,974,642 | 3,368,522 | 3,916,671 | 3,724,864 | ||||||||||||
Weighted average outstanding warrants
|
2,904,769 | 1,793,530 | 2,509,937 | 2,203,861 |
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Customer A
|
23 | % | 26 | % | 22 | % | 22 | % | ||||||||
Customer B
|
51 | % | 36 | % | 45 | % | 33 | % | ||||||||
Customer C
|
— | — | — | 13 | % | |||||||||||
Customer D
|
11 | % | 30 | % | 18 | % | 25 | % |
ITEM 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
|
•
|
statements concerning possible or assumed future results of operations, trends in financial results and business plans, including those relating to earnings growth and revenue growth;
|
|
•
|
statements about our product development schedule;
|
|
•
|
statements about our future capital requirements and the sufficiency of our cash, cash equivalents, investments, and any other sources to meet these requirements;
|
|
•
|
statements about our plans, objectives, expectations, and intentions; and
|
|
•
|
other statements that are not historical facts.
|
|
•
|
Consumer skin care products — we have developed a range of peptides and small molecule technologies capable of improving different aspects of the skin’s appearance, texture, tone and barrier function and are marketing these peptides as innovative ingredients for cosmetic use; and
|
|
•
|
Prescription (Rx) products — certain of our peptides have demonstrated promising results in the areas of infection control, wound healing and immune modulation and are being developed for Rx applications.
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||||||||||
2012
|
2011
|
Change
|
2012
|
2011
|
Change
|
|||||||||||||||||||
License fees
|
$ | 240,550 | $ | 176,922 | 36.0 | % | $ | 729,095 | $ | 513,322 | 42.0 | % | ||||||||||||
Peptide and consumer product sales
|
176,669 | 100,884 | 75.1 | % | 605,190 | 576,165 | 5.0 | % | ||||||||||||||||
Consumer product sales to affiliated company
|
51,852 | 116,901 | (55.6 | )% | 285,730 | 355,951 | (19.7 | )% | ||||||||||||||||
Total revenue
|
$ | 469,071 | $ | 394,707 | 18.8 | % | $ | 1,620,015 | $ | 1,445,438 | 12.1 | % |
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||||||||||
2012
|
2011
|
Change
|
2012
|
2011
|
Change
|
|||||||||||||||||||
Cost of peptides and consumer product sales
|
$ | 113,407 | $ | 70,834 | 60.1 | % | $ | 380,543 | $ | 409,829 | (7.1 | )% | ||||||||||||
Percentage of total revenue
|
24.2 | % | 17.9 | % | 23.5 | % | 28.4 | % | ||||||||||||||||
Cost of consumer product sales to affiliated company
|
21,832 | 56,961 | (61.7 | )% | 128,684 | 191,486 | (32.8 | )% | ||||||||||||||||
Percentage of total revenue
|
4.7 | % | 14.4 | % | 7.9 | % | 13.2 | % | ||||||||||||||||
Total cost of revenue
|
$ | 135,239 | $ | 127,795 | 5.8 | % | $ | 509,227 | $ | 601,315 | (15.3 | )% | ||||||||||||
Gross profit
|
$ | 333,832 | $ | 266,912 | 25.1 | % | $ | 1,110,788 | $ | 844,123 | 31.6 | % |
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||||||||||
2012
|
2011
|
Change
|
2012
|
2011
|
Change
|
|||||||||||||||||||
Research and development
|
$ | 133,009 | $ | 109,221 | 21.8 | % | $ | 308,036 | $ | 425,131 | (27.5 | )% | ||||||||||||
Percentage of total revenue
|
28.4 | % | 27.7 | % | 19.0 | % | 29.4 | % |
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||||||||||
2012
|
2011
|
Change
|
2012
|
2011
|
Change
|
|||||||||||||||||||
Marketing and business development
|
$ | 302,040 | $ | 225,732 | 33.8 | % | $ | 874,791 | $ | 674,187 | 29.8 | % | ||||||||||||
Percentage of total revenue
|
64.4 | % | 57.2 | % | 54.0 | % | 46.6 | % |
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||||||||||
2012
|
2011
|
Change
|
2012
|
2011
|
Change
|
|||||||||||||||||||
General and administrative
|
$ | 418,868 | $ | 327,162 | 28.0 | % | $ | 1,132,679 | $ | 1,043,843 | 8.5 | % | ||||||||||||
Percentage of total revenue
|
89.3 | % | 82.9 | % | 69.9 | % | 72.2 | % |
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||||||||||
2012
|
2011
|
Change
|
2012
|
2011
|
Change
|
|||||||||||||||||||
Accounting, legal and professional fees
|
$ | 205,192 | $ | 168,043 | 22.1 | % | $ | 605,615 | $ | 477,676 | 26.8 | % | ||||||||||||
Percentage of total revenue
|
43.7 | % | 42.6 | % | 37.4 | % | 33.0 | % |
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||||||||||
2012
|
2011
|
Change
|
2012
|
2011
|
Change
|
|||||||||||||||||||
Depreciation and amortization
|
$ | 22,896 | $ | 27,845 | (17.8 | )% | $ | 68,054 | $ | 82,609 | (17.6 | )% | ||||||||||||
Percentage of total revenue
|
4.9 | % | 7.1 | % | 4.2 | % | 5.7 | % |
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||||||||||
2012
|
2011
|
Change
|
2012
|
2011
|
Change
|
|||||||||||||||||||
Interest income
|
$ | 133 | $ | 704 | (81.1 | )% | $ | 1,257 | $ | 2,836 | (55.6 | )% | ||||||||||||
Amortization of debt issuance costs
|
(50,673 | ) | — |
NM
|
(112,913 | ) | — |
NM
|
||||||||||||||||
Equity in gain (loss) of affiliated company
|
14,674 | (23,373 | ) | 162.8 | % | (32,916 | ) | (74,446 | ) | (55.8 | )% | |||||||||||||
Change in fair value of option to purchase interest in affiliated company
|
(1,145 | ) | 8,143 | (114.1 | )% | (12,362 | ) | (9,293 | ) | (33.0 | )% | |||||||||||||
Total other income (expense), net
|
$ | (37,011 | ) | $ | (14,526 | ) | (154.8 | )% | $ | (156,934 | ) | $ | (80,903 | ) | (94.0 | )% |
Contractual Obligations
|
Remainder of 2012
|
2013 through 2014
|
2015 through 2016
|
2017 through 2018
|
Total
|
|||||||||||||||
Operating lease
|
$ | 19,764 | $ | 156,306 | $ | 172,816 | $ | 136,140 | $ | 485,026 | ||||||||||
Purchase order commitments
(1)
|
17,720 | — | — | — | 17,720 | |||||||||||||||
Total contractual obligations
|
$ | 37,484 | $ | 156,306 | $ | 172,816 | $ | 136,140 | $ | 502,746 |
(1)
|
Purchase order commitments primarily consist of open orders for inventory.
|
ITEM 6.
|
Exhibits.
|
Incorporated by Reference
|
||||||
Exhibit
Number
|
Exhibit Description
|
Filed
Herewith
|
Form
|
Period Ending
|
Exhibit
|
Filing Date
|
2.1
|
Proposal for Approval of Reincorporation of Helix BioMedix, Inc., a Colorado corporation, from Colorado to Delaware
|
10-KSB
|
12/31/00
|
2
|
4/16/01
|
|
3.1
|
Certificate of Ownership and Merger of Helix BioMedix, Inc. a Delaware corporation and Helix BioMedix, Inc., a Louisiana corporation
|
10-KSB/A
|
12/31/02
|
3.1
|
4/30/03
|
|
3.2
|
Certificate of Incorporation of Helix BioMedix, Inc.
|
10-KSB/A
|
12/31/00
|
3-A
|
5/18/01
|
|
3.3
|
Certificate of Amendment to the Certificate of Incorporation of Helix BioMedix, Inc.
|
10-KSB/A
|
12/31/02
|
3.3
|
4/30/03
|
|
3.4
|
Bylaws of Helix BioMedix, Inc.
|
10-KSB/A
|
12/31/00
|
3-B
|
5/18/01
|
|
4.1
|
Rights Agreement dated August 21, 2003
|
10-KSB
|
12/31/03
|
10.27
|
3/26/04
|
|
4.2
|
Acceptance and Acknowledgement of Appointment dated January 4, 2004
|
10-KSB
|
12/31/03
|
10.28
|
3/26/04
|
|
31.1
|
Certification of the Company’s Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934
|
X
|
||||
31.2
|
Certification of the Company’s Acting Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934
|
X
|
||||
32.1
|
Certification of the Company’s Chief Executive Officer pursuant to 18 U.S.C. Section 1350
|
X
|
||||
32.2
|
Certification of the Company’s Acting Chief Financial Officer pursuant to 18 U.S.C. Section 1350
|
X
|
||||
101.INS*
|
XBRL Instance Document
|
X
|
||||
101.SCH*
|
XBRL Taxonomy Extension Schema Document
|
X
|
||||
101.CAL*
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
X
|
||||
101.DEF*
|
XBRL Taxonomy Extension Definition Linkbase Document
|
X
|
||||
101.LAB*
|
XBRL Taxonomy Extension Label Linkbase Document
|
X
|
||||
101.PRE*
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
X
|
HELIX BIOMEDIX, INC.
(Registrant)
|
|||
By:
|
/s/ R. Stephen Beatty
|
||
R. Stephen Beatty | |||
President and Chief Executive Officer and | |||
Acting Chief Financial Officer | |||
(Principal Executive Officer and | |||
Acting Principal Financial Officer) |
1 Year Helix Biomedix (PK) Chart |
1 Month Helix Biomedix (PK) Chart |
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