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Share Name | Share Symbol | Market | Type |
---|---|---|---|
ULURU Inc (CE) | USOTC:ULUR | 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% | 0.000001 | 0.00 | 01:00:00 |
x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the fiscal year ended December 31, 2013
|
|
OR
|
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from to
|
Commission File No. 001-336180
|
Nevada
|
41-2118656
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
4452 Beltway Drive
|
||
Addison, Texas
|
75001
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Large accelerated filer
o
|
Accelerated filer
o
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Non-accelerated filer
o
|
Smaller reporting company
x
|
FORM 10-K
|
||
FOR THE YEAR ENDED DECEMBER 31, 2013
|
||
TABLE OF CONTENTS
|
||
Item
|
Page
|
|
BUSINESS
|
§
|
Establish a market leadership position in wound management by developing and commercializing a customer focused portfolio of innovative wound care products based on the Nanoflex® technology to treat the various phases of wound healing; and
|
§
|
Develop our oral mucoadhesive film technology (OraDisc
TM
) and generate revenues through multiple licensing agreements.
|
§
|
Nanoflex® Powder
|
§
|
Nanoflex® Injectable Liquid
|
§
|
Antibiotic containing dressings for treatment of infection; and
|
§
|
Growth factor containing dressings for management of slow healing chronic wounds.
|
Altrazeal®
|
|||
Altrazeal Trading GmbH
|
§
|
European Union, Australia, New Zealand, Middle East (excluding Jordan and Syria), North Africa, Albania, Bosnia, Kosovo, Macedonia, Montenegro, and Serbia
|
|
Altrazeal AG
|
§
|
Africa (markets not already licensed), Latin America, Georgia, Ukraine, Turkmenistan, the Commonwealth of Independent States, Jordan, Syria, Asia and the Pacific (excluding China, Hong Kong, Macau, Taiwan, South Korea, Japan, Australia, and New Zealand)
|
|
Jiangxi Aiqilin Pharmaceuticals Group
|
§
|
China, Hong Kong, Macau, and Taiwan
|
Altrazeal® - Veterinary
|
|||
Novartis Animal Health
|
§
|
Worldwide
|
Amlexanox 5% paste and OraDisc™ A
|
|||
ORADISC GmbH
|
§
|
Worldwide (excluding territories held by Meda AB, KunWha Pharmaceutical, Laboratories del Dr. Esteve SA, Orient Europharma, Co., Ltd., and Pharmascience Inc.)
|
|
Meda AB
|
§
|
United Kingdom, Ireland, Scandinavia, the Baltic states, Iceland, Belgium, France, Germany, Italy, Luxembourg, Netherlands, Switzerland, Austria, Bulgaria, Cyprus, Czech Republic, Hungary, Malta, Poland, Romania, and Slovenia
|
|
KunWha Pharmaceutical
|
§
|
South Korea
|
|
Laboratories del Dr. Esteve SA
|
§
|
Spain, Portugal, Greece, and Andorra
|
|
Orient Europharma, Co., Ltd.
|
§
|
Taiwan an Hong-Kong
|
|
Pharmascience Inc.
|
§
|
Canada
|
OraDisc™ B
|
|||
ORADISC GmbH
|
§
|
Worldwide
|
Nanoflex® technology
|
Year of Expiration
|
||
§
|
Hydrogel – Shape retentive hydrogel particle aggregate
|
2022
|
|
§
|
Altrazeal® Injectable
|
2024
|
|
§
|
Altrazeal® wound dressing and biomaterials
|
2028
|
|
OraDisc™ technology
|
|||
§
|
Mucoadhesive erodible drug delivery device
|
2021
|
Customers
|
Product
|
2013
|
2012
|
||||||
Customer A
|
Altrazeal®
|
67 | % | 32 | % | ||||
Customer B
|
Altrazeal® Veterinary
|
--- | 14 | % | |||||
Customer C
|
Aphthasol®
|
--- | 13 | % | |||||
Total
|
67 | % | 59 | % | |||||
§
|
Altrazeal® is a product approved for sale in the U.S., the European Union (together with countries that recognize the CE mark), Australia, and New Zealand;
|
§
|
Other Altrazeal® products are currently in development phases;
|
§
|
5% amlexanox paste is a product approved for sale in the U.S. (Aphthasol®); approved in Canada and a number of EU countries but not yet sold;
|
§
|
OraDisc™ A is a product approved for sale in the U.S. as of September 2004; we are completing steps for manufacturing and sale of the product in 2014; and
|
§
|
Our other OraDisc™ products are currently in the development phase.
|
Name
|
Age
|
Position
|
||
Kerry P. Gray
|
61
|
President, Chief Executive Officer, Chairman
|
||
Terrance K. Wallberg
|
59
|
Vice President, Chief Financial Officer, Secretary, Treasurer
|
RISK FACTORS
|
§
|
our commercial partners and licensees may not place the same priority on sales of our products as we do, may fail to honor contractual commitments, may not have the expertise, market strength or other characteristics necessary to effectively market our products, may dedicate only limited resources to, and/or may abandon, marketing of a product for reasons, including reasons such as a shift in corporate focus, unrelated to its merits;
|
§
|
our commercial partners may be in the early stages of development and may not have sufficient liquidity to effectively obtain approvals for and market our products consistent with contractual commitments or our expectations;
|
§
|
we may have disputes with our commercial partners, which may inhibit development, lead to an abandonment of our arrangements or have other negative consequences; and
|
§
|
even if the commercialization and marketing of products is successful, our revenue share may be limited and may not exceed our associated development and operating costs.
|
§
|
some or all of our product candidates may be found to be unsafe or ineffective or otherwise fail to meet applicable regulatory standards or receive necessary regulatory clearances;
|
§
|
our product candidates, if safe and effective, may be too difficult to develop into commercially viable products;
|
§
|
it may be difficult to manufacture or market our product candidates on a large scale;
|
§
|
given our limited market presence, we may be unable, directly or indirectly through licensees, to effectively market and distribute our products or establish a strong brand;
|
§
|
proprietary rights of third parties may preclude us from marketing our product candidates; and
|
§
|
third parties may market superior or equivalent products.
|
§
|
Third-party payers’ increasing challenges to the prices charged for medical products and services;
|
§
|
The trend toward managed health care in the Unites States and the concurrent growth of HMOs and similar organizations that can control or significantly influence the purchase of healthcare services and products; and
|
§
|
The Affordable Care Act (a/k/a Obama care) and other proposals to reform healthcare or reduce government insurance programs.
|
§
|
Is priced under five dollars;
|
§
|
Is not traded on a national stock exchange, such as NASDAQ or the NYSE;
|
§
|
Is issued by a company that has less than $5 million in net tangible assets (if it has been in business less than three years) or has less than $2 million in net tangible assets (if it has been in business for at least three years); and
|
§
|
Is issued by a company that has average revenues of less than $6 million for the past three years.
|
§
|
Certain broker-dealers who recommend penny stock to persons other than established customers and accredited investors must make a special written suitability determination for the purchaser and receive the purchaser’s written agreement to a transaction prior to sale.
|
§
|
Prior to executing any transaction involving a penny stock, certain broker-dealers must deliver to certain purchasers a disclosure schedule explaining the risks involved in owning penny stock, the broker-dealer’s duties to the customer, a toll-free telephone number for inquiries about the broker-dealer’s disciplinary history and the customer’s rights and remedies in case of fraud or abuse in the sale.
|
§
|
In connection with the execution of any transaction involving a penny stock, certain broker-dealers must deliver to certain purchasers the following:
|
·
bid and offer price quotes and volume information;
|
|
·
the broker-dealer’s compensation for the trade;
|
|
·
the compensation received by certain salespersons for the trade;
|
|
·
monthly accounts statements; and
|
|
·
a written statement of the customer’s financial situation and investment goals.
|
UNRESOLVED STAFF COMMENTS
|
PROPERTIES
|
LEGAL PROCEEDINGS
|
MINE SAFETY DISCLOSURES
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
Year Ended December 31, 2013
|
High
|
Low
|
||||||
First Quarter
|
$ | 0.38 | $ | 0.28 | ||||
Second Quarter
|
$ | 0.61 | $ | 0.29 | ||||
Third Quarter
|
$ | 0.65 | $ | 0.42 | ||||
Fourth Quarter
|
$ | 0.69 | $ | 0.38 | ||||
Year Ended December 31, 2012
|
||||||||
First Quarter
|
$ | 0.56 | $ | 0.18 | ||||
Second Quarter
|
$ | 0.31 | $ | 0.20 | ||||
Third Quarter
|
$ | 0.35 | $ | 0.17 | ||||
Fourth Quarter
|
$ | 0.37 | $ | 0.20 |
Plan Category
|
Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights
|
Weighted-average
exercise price of
outstanding options,
warrants and rights
|
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a))
|
|||||||||
(a)
|
(b)
|
(c)
|
||||||||||
Equity compensation plans approved by security holders
|
||||||||||||
2006 Equity Incentive Plan
|
1,014,907 | $ | 2.12 | 715,647 | ||||||||
Equity compensation plans not approved by security holders
|
-0- | n/a | -0- | |||||||||
Total
|
1,014,907 | $ | 2.12 | 715,647 |
SELECTED FINANCIAL DATA
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
§
|
Establish a market leadership position in wound management by developing and commercializing a customer focused portfolio of innovative wound care products based on our Nanoflex® technology to treat the various phases of wound healing; and
|
§
|
Develop our oral-mucoadhesive film technology (OraDisc
TM
) and generate revenues through multiple licensing agreements.
|
Year Ended December 31,
|
||||||||
Net Cash Provided by (Used in)
|
2013
|
2012
|
||||||
Operating activities
|
$ | (1,734,000 | ) | $ | (956,000 | ) | ||
Investing activities
|
(34,000 | ) | 156,000 | |||||
Financing activities
|
1,752,000 | 775,000 | ||||||
Net decrease in cash and cash equivalents
|
$ | (16,000 | ) | $ | (25,000 | ) |
§
|
our ability to successfully commercialize our wound management products and the market acceptance of these products;
|
§
|
our ability to establish and maintain collaborative arrangements with corporate partners for the development and commercialization of certain product opportunities;
|
§
|
continued scientific progress in our development programs;
|
§
|
the costs involved in filing, prosecuting and enforcing patent claims;
|
§
|
competing technological developments; and
|
§
|
the cost of manufacturing and production scale-up.
|
Payments Due By Period
|
||||||||||||||||||||
Contractual Obligations
|
Total
|
Less Than
1 Year
|
1-2
Years
|
3-5
Years
|
After 5
Years
|
|||||||||||||||
Operating leases
|
$ | 149,798 | $ | 120,917 | $ | 28,881 | $ | --- | $ | --- | ||||||||||
Separation agreement
|
87,485 | 87,485 | --- | --- | --- | |||||||||||||||
Convertible notes
|
1,385,441 | 1,385,441 | --- | --- | --- | |||||||||||||||
Total contractual cash obligations
|
$ | 1,622,724 | $ | 1,593,843 | $ | 28,881 | $ | --- | $ | --- |
Year Ended
December 31,
|
||||||||
Technology
|
2013
|
2012
|
||||||
Wound care & Nanoflex®
|
$ | 321,000 | $ | 152,000 | ||||
OraDisc™
|
18,000 | 16,000 | ||||||
Aphthasol® & other technologies
|
2,000 | 6,000 | ||||||
Total
|
$ | 341,000 | $ | 174,000 |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
CONTROLS AND PROCEDURES
|
§
|
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
|
§
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
|
§
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
|
OTHER INFORMATION
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
EXECUTIVE COMPENSATION
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
(a)
|
The following documents are filed as part of this report:
|
||||
1.
|
Financial Statements
|
||||
2.
|
Financial Statement Schedules
|
||||
All other schedules are omitted because they are not applicable or because the required information is shown in the consolidated financial statements or the notes thereto.
|
|||||
3.
|
List of Exhibits
|
||||
The exhibits which are filed with this report or which are incorporated herein by reference are set forth in the Exhibit Index hereto.
In reviewing the agreements included as exhibits to this annual report on Form 10-K, please remember they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about the Company or the other parties to the agreements. The agreements contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and:
|
|||||
§
|
should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;
|
||||
§
|
have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;
|
||||
§
|
may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and
|
||||
§
|
were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments. Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time.
|
||||
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
|||
ULURU Inc.
|
|||
|
|
|
|
Date: March 31, 2014
|
By
|
/s/ Kerry P. Gray
|
|
Kerry P. Gray
|
|||
Chief Executive Officer
|
|||
Principal Executive Officer
|
|||
Date: March 31, 2014
|
By
|
/s/ Terrance K. Wallberg
|
|
Terrance K. Wallberg
|
|||
Chief Financial Officer
|
|||
Principal Accounting Officer
|
|||
Date: March 31, 2014
|
/s/ Jeffrey B. Davis
|
|
Jeffrey B. Davis, Director
|
||
Date: March 31, 2014
|
/s/ Kerry P. Gray
|
|
Kerry P. Gray, Director
|
||
Date: March 31, 2014
|
/s/ Helmut Kerschbaumer
|
|
Helmut Kerschbaumer, Director
|
||
Date: March 31, 2014
|
/s/ Klaus Kuehne
|
|
Klaus Kuehne, Director
|
||
Exhibit
Number
|
Description of Document
|
||
2.1
|
Agreement and Plan of Merger and Reorganization dated October 12, 2005 by and among the Registrant, Uluru Acquisition Corp., and ULURU Delaware Inc. (1)
|
||
2.2.1
|
Asset Sale Agreement dated October 12, 2005 by and between ULURU Delaware Inc. and Access Pharmaceuticals, Inc. (3)
|
||
2.2.2
|
Amendment to Asset Sale Agreement dated December 8, 2006 by and between ULURU Delaware Inc. and Access Pharmaceuticals, Inc. (4)
|
||
3.1
|
Restated Articles of Incorporation dated November 5, 2007. (5)
|
||
3.2
|
Amended and Restated Bylaws dated December 5, 2008. (6)
|
||
3.3
|
Certificate of Designations of Series A Preferred Stock. (15)
|
||
4.1
|
Common Stock Purchase Warrants dated November 16, 2009 by and between ULURU Inc. and the purchasers’ party thereto. (11)
|
||
4.2
|
Common Stock Purchase Warrants dated January 3, 2011 by and between ULURU Inc. and the purchasers’ party thereto. (13)
|
||
4.3
|
Common Stock Purchase Warrant dated June 13, 2011 by and between ULURU Inc. and Kerry P. Gray. (14)
|
||
4.4
|
Common Stock Purchase Warrant dated July 28, 2011 by and between ULURU Inc. and Kerry P. Gray. (15)
|
||
4.5
|
Common Stock Purchase Warrant #4 dated June 27, 2012 by and between ULURU Inc. and Inter-Mountain Capital Corp. (17)
|
||
4.6
|
Common Stock Purchase Warrant dated December 21, 2012 by and between ULURU Inc. and IPMD GmbH (19)
|
||
4.7
|
Common Stock Purchase Warrant dated March 14, 2013 by and between ULURU Inc. and Kerry P. Gray. (20)
|
||
4.8
|
Common Stock Purchase Warrant dated March 14, 2013 by and between ULURU Inc. and Terrance K. Wallberg. (20)
|
||
10.1
|
Patent Assignment Agreement dated October 12, 2005 by and between ULURU Delaware Inc. and Access Pharmaceuticals, Inc. (3)
|
||
10.2
|
License Agreement dated October 12, 2005 by and between ULURU Delaware Inc. and Access Pharmaceuticals, Inc. (3)
|
||
10.3.1
|
Lease Agreement dated January 31, 2006 by and between ULURU Delaware Inc. and Addison Park Ltd. (3)
|
||
10.3.2
|
Amendment to Lease Agreement dated February 22, 2013 by and ULURU Delaware Inc. and Addison Park Ltd. (23)
|
||
10.4
|
License Agreement dated August 14, 1998 by and between ULURU Delaware Inc. and Strakan Ltd. (3)
|
||
10.5.1
|
License and Supply Agreement dated April 15, 2005 by and between ULURU Delaware Inc. and Discus Dental. (3)
|
||
10.5.2
|
Amendment to License and Supply Agreement dated November 18, 2005 by and between ULURU Delaware Inc. and Discus Dental. (3)
|
||
10.6
|
*
|
Uluru Inc. 2006 Equity Incentive Plan. (2)
|
|
10.7
|
License and Supply Agreement dated November 17, 2008 by and between ULURU Inc. and Meda AB. (7)
|
||
10.8
|
*
|
Separation Agreement dated March 9, 2009 by and between ULURU Inc. and Kerry P. Gray. (8)
|
|
10.9
|
*
|
Indemnification Agreements dated July 10, 2009 by and between ULURU Inc. and its current directors. (9)
|
|
10.10
|
*
|
Indemnification Agreement dated July 13, 2009 by and between ULURU Inc. and Terrance K. Wallberg. (10)
|
|
10.11
|
Acquisition and Licensing Agreement dated June 25, 2010 by and between ULURU Inc., Strakan International Limited and Zindaclin Limited. (12)
|
||
10.12
|
Securities and Purchase Agreement dated January 3, 2011 by and between ULURU Inc. and the purchasers’ party thereto.(13)
|
||
10.13
|
Secured Convertible Subordinated Note dated June 13, 2011 by and between ULURU Inc. and Kerry P. Gray. (14)
|
||
10.14
|
Security Agreement dated June 13, 2011 by and between ULURU Inc. and Kerry P. Gray. (14)
|
||
10.15
|
Secured Convertible Subordinated Note dated July 28, 2011 by and between ULURU Inc. and Kerry P. Gray. (15)
|
||
10.16
|
Security Agreement dated July 28, 2011 by and between ULURU Inc. and Kerry P. Gray. (15)
|
||
10.17.1
|
Shareholders’ Agreement dated January 11, 2012 by and between ULURU Inc. and Melmed Holding AG. (16)
|
||
10.18.1
|
License and Supply Agreement dated January 11, 2012 by and between ULURU Inc. and Melmed Holding AG. (16)
|
||
10.18.2
|
Amendment No. 1 to License and Supply Agreement dated December 21, 2012 by and between ULURU Inc. and Melmed Holding AG. (21)
|
||
10.19
|
Secured Convertible Promissory Note dated June 27, 2012 by and between ULURU Inc. and Inter-Mountain Capital Corp. (17)
|
||
10.20
|
Securities Purchase Agreement dated June 27, 2012 by and between ULURU Inc. and Inter-Mountain Capital Corp. (17)
|
||
10.21
|
Security Agreement dated June 27, 2012 by and between ULURU Inc. and Inter-Mountain Capital Corp. (17)
|
||
10.22
|
Registration Rights Agreement dated June 27, 2012 by and between ULURU Inc. and Inter-Mountain Capital Corp. (17)
|
||
10.23
|
Binding Term Sheet dated September 20, 2012 by and between ULURU Inc. and Regenertec Invest GmbH. (18)
|
||
10.24
|
Shareholders’ Agreement dated October 19, 2012 by and between ULURU Inc. and ORADISC GmbH. (21)
|
||
10.25
|
License and Supply Agreement dated October 19, 2012 by and between ULURU Inc. and ORADISC GmbH. (21)
|
||
10.26
|
Securities Purchase Agreement dated December 21, 2012 by and between ULURU Inc. and IPMD GmbH. (19)
|
||
10.27
|
Securities Purchase Agreement dated March 14, 2013 by and between ULURU Inc. and the purchasers’ party thereto. (20)
|
||
10.28.1
|
Exclusive License and Supply Agreement dated September 30, 2013 by and between ULURU Inc. and Altrazeal AG. (22)
|
||
10.30 | ** | Shareholders’ Agreement dated February 1, 2014 by and between ULURU Inc. and Altrazeal AG. | |
101
|
***
|
The following financial statements are from ULURU Inc.’s Annual Report on Form 10-K for the year ended December 31, 2013, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations; (iii) Consolidated Statements of Cash Flows; and (iv) Notes to Consolidated Financial Statements.
|
|
-----------------------------------------
|
|||
(1)
|
Incorporated by reference to the Company’s Current Report on Form 8-K filed on October 18, 2005.
|
||
(2)
|
Incorporated by reference to the Company’s Definitive Schedule 14C filed on March 1, 2006.
|
||
(3)
|
Incorporated by reference to the Company’s Form 8-K filed on March 31, 2006.
|
||
(4)
|
Incorporated by reference to the Company’s Form SB-2 Registration Statement filed on December 15, 2006.
|
||
(5)
|
Incorporated by reference to the Company’s Form 8-K filed on November 6, 2007.
|
||
(6)
|
Incorporated by reference to the Company’s Form 8-K filed on December 11, 2008.
|
||
(7)
|
Incorporated by reference to the Company’s Form 10-K filed on March 30, 2009.
|
||
(8)
|
Incorporated by reference to the Company’s Form 10-Q filed on May 15, 2009.
|
||
(9)
|
Incorporated by reference to the Company’s Form 8-K filed on July 10, 2009.
|
||
(10)
|
Incorporated by reference to the Company’s Form 8-K filed on July 14, 2009.
|
||
(11)
|
Incorporated by reference to the Company’s Form 8-K filed on November 12, 2009.
|
||
(12)
|
Incorporated by reference to the Company’s Form 10-Q filed on August 16, 2010.
|
||
(13)
|
Incorporated by reference to the Company’s Form 8-K filed on January 4, 2011.
|
||
(14)
|
Incorporated by reference to the Company’s Form 8-K filed on June 14, 2011.
|
||
(15)
|
Incorporated by reference to the Company’s Form 8-K filed on August 1, 2011.
|
||
(16)
|
Incorporated by reference to the Company’s Form 10-K filed on March 30, 2012.
|
||
(17)
|
Incorporated by reference to the Company’s Form 8-K filed on July 3, 2012.
|
||
(18)
|
Incorporated by reference to the Company’s Form 10-Q filed on November 14, 2012.
|
||
(19)
|
Incorporated by reference to the Company’s Form 8-K filed on December 27, 2012.
|
||
(20)
|
Incorporated by reference to the Company’s Form 8-K filed on March 15, 2013.
|
||
(21)
|
Incorporated by reference to the Company’s Form 10-K filed on March 29, 2013.
|
||
(22)
|
Incorporated by reference to the Company’s Form 10-Q filed on November 14, 2013.
|
||
*
|
Management contract or compensation plan arrangements.
|
||
**
|
Filed herewith.
|
||
***
|
Pursuant to Rule 406T of Regulation S-T, the XBRL-related information in Exhibit 101 to this Annual Report on Form 10-K is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise is not subject to liability under these sections.
|
Page
|
||
December 31,
|
||||||||
2013
|
2012
|
|||||||
ASSETS
|
||||||||
Current Assets
|
||||||||
Cash and cash equivalents
|
$ | 5,119 | $ | 21,549 | ||||
Accounts receivable, net
|
185,078 | 111,898 | ||||||
Notes receivable and accrued interest, current portion
|
777,710 | 260,444 | ||||||
Inventory
|
395,605 | 527,643 | ||||||
Prepaid expenses and deferred charges
|
123,812 | 194,448 | ||||||
Total Current Assets
|
1,487,324 | 1,115,982 | ||||||
Property, Equipment and Leasehold Improvements, net
|
638,614 | 845,535 | ||||||
Other Assets
|
||||||||
Intangible assets, net
|
3,670,837 | 4,145,985 | ||||||
Notes receivable and accrued interest, net of current portion
|
--- | 1,041,776 | ||||||
Investment in unconsolidated subsidiary
|
--- | --- | ||||||
Deferred financing costs, net
|
86,770 | 160,770 | ||||||
Deposits
|
18,069 | 18,069 | ||||||
Total Other Assets
|
3,775,676 | 5,366,600 | ||||||
TOTAL ASSETS
|
$ | 5,901,614 | $ | 7,328,117 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current Liabilities
|
||||||||
Accounts payable
|
$ | 1,734,725 | $ | 2,340,782 | ||||
Accrued liabilities
|
315,963 | 372,965 | ||||||
Accrued interest
|
13,360 | 41,141 | ||||||
Convertible notes payable, net of unamortized debt discount, current portion
|
1,147,057 | 1,089,619 | ||||||
Deferred revenue, current portion
|
58,959 | 45,227 | ||||||
Total Current Liabilities
|
3,270,064 | 3,889,734 | ||||||
Long Term Liabilities
|
||||||||
Convertible notes payable, net of unamortized debt discount and current portion
|
--- | 751,543 | ||||||
Deferred revenue, net of current portion
|
898,133 | 835,553 | ||||||
Total Long Term Liabilities
|
898,133 | 1,587,096 | ||||||
TOTAL LIABILITIES
|
4,168,197 | 5,476,830 | ||||||
COMMITMENTS AND CONTINGENCIES
|
--- | --- | ||||||
STOCKHOLDERS' EQUITY
|
||||||||
Preferred Stock – $0.001 par value; 20,000 shares authorized;
|
||||||||
Series A Preferred Stock, 1,000 shares designated; nil and 65 shares issued and outstanding, aggregate liquidation value of nil and $701,843, at December 31, 2013 and December 31, 2012, respectively
|
--- | --- | ||||||
Common Stock – $ 0.001 par value; 200,000,000 shares authorized;
|
||||||||
18,871,420 and 10,074,448 shares issued and outstanding at December 31, 2013 and December 31, 2012, respectively
|
18,872 | 10,075 | ||||||
Additional paid-in capital
|
53,336,127 | 51,336,931 | ||||||
Promissory notes receivable and accrued interest for common stock issuance
|
--- | (985,287 | ) | |||||
Accumulated (deficit)
|
(51,621,582 | ) | (48,510,432 | ) | ||||
TOTAL STOCKHOLDERS’ EQUITY
|
1,733,417 | 1,851,287 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$ | 5,901,614 | $ | 7,328,117 | ||||
The accompanying notes are an integral part of these consolidated financial statements.
|
Years Ended December 31,
|
||||||||
2013
|
2012
|
|||||||
Revenues
|
||||||||
License fees
|
$ | 48,688 | $ | 40,563 | ||||
Royalty income
|
30,016 | 49,918 | ||||||
Product sales, net
|
291,864 | 280,113 | ||||||
Total Revenues
|
370,568 | 370,594 | ||||||
Costs and Expenses
|
||||||||
Cost of goods sold
|
222,122 | 243,538 | ||||||
Research and development
|
788,242 | 832,931 | ||||||
Selling, general and administrative
|
1,288,050 | 1,791,221 | ||||||
Amortization of intangible assets
|
475,148 | 476,450 | ||||||
Depreciation
|
244,704 | 291,274 | ||||||
Total Costs and Expenses
|
3,018,266 | 3,635,414 | ||||||
Operating (Loss)
|
(2,647,698 | ) | (3,264,820 | ) | ||||
Other Income (Expense)
|
||||||||
Interest and miscellaneous income
|
69,686 | 61,719 | ||||||
Interest expense
|
(506,529 | ) | (328,248 | ) | ||||
Equity in earnings (loss) of unconsolidated subsidiary
|
--- | --- | ||||||
Gain on sale of equipment
|
3,627 | --- | ||||||
(Loss) Before Income Taxes
|
(3,080,914 | ) | (3,531,349 | ) | ||||
Income taxes
|
--- | --- | ||||||
Net (Loss)
|
$ | (3,080,914 | ) | $ | (3,531,349 | ) | ||
Less preferred stock dividends
|
(30,236 | ) | (47,456 | ) | ||||
Net (Loss) Allocable to Common Stockholders
|
$ | (3,111,150 | ) | $ | (3,578,805 | ) | ||
Basic and diluted net (loss) per common share
|
$ | (0.21 | ) | $ | (0.42 | ) | ||
Weighted average number of common shares outstanding
|
14,772,578 | 8,493,703 | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
|
NOTE 1.
|
COMPANY OVERVIEW AND BASIS OF PRESENTATION
|
NOTE 2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
Furniture, fixtures, and laboratory equipment
|
7 years
|
Computer and office equipment
|
5 years
|
Computer software
|
3 years
|
Leasehold improvements
|
Lease term
|
NOTE 3.
|
THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS
|
NOTE 4.
|
SEGMENT INFORMATION
|
Revenues
|
2013
|
%
|
2012
|
%
|
||||||||||||
Domestic
|
$ | 65,546 | 18 | % | $ | 177,440 | 48 | % | ||||||||
International
|
305,022 | 82 | % | 193,154 | 52 | % | ||||||||||
Total
|
$ | 370,568 | 100 | % | $ | 370,594 | 100 | % |
Customers
|
Product
|
2013
|
2012
|
||||||
Customer A
|
Altrazeal®
|
67 | % | 32 | % | ||||
Customer B
|
Altrazeal® Veterinary
|
--- | 14 | % | |||||
Customer C
|
Aphthasol®
|
--- | 13 | % | |||||
Total
|
67 | % | 59 | % | |||||
NOTE 5.
|
OTHER RECEIVABLE
|
NOTE 6.
|
NOTES RECEIVABLE
|
NOTE 7.
|
INVENTORY
|
Inventory
|
2013
|
2012
|
||||||
Finished goods
|
$ | 85,993 | $ | 303,779 | ||||
Work-in-progress
|
299,464 | 190,794 | ||||||
Raw materials
|
10,148 | 33,070 | ||||||
Total
|
$ | 395,605 | $ | 527,643 |
NOTE 8.
|
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS
|
Property, equipment and leasehold improvements
|
2013
|
2012
|
||||||
Laboratory equipment
|
$ | 424,888 | $ | 424,888 | ||||
Manufacturing equipment
|
1,581,728 | 1,547,572 | ||||||
Computers, office equipment, and furniture
|
140,360 | 140,360 | ||||||
Computer software
|
4,108 | 4,108 | ||||||
Leasehold improvements
|
95,841 | 95,841 | ||||||
2,246,925 | 2,212,769 | |||||||
Less: accumulated depreciation and amortization
|
(1,608,311 | ) | (1,367,234 | ) | ||||
Property, equipment and leasehold improvements, net
|
$ | 638,614 | $ | 845,535 |
NOTE 9.
|
INTANGIBLE ASSETS
|
Intangible assets
|
2013
|
2012
|
||||||
Patent - Amlexanox (Aphthasol®)
|
$ | 2,090,000 | $ | 2,090,000 | ||||
Patent - Amlexanox (OraDisc™ A)
|
6,873,080 | 6,873,080 | ||||||
Patent - OraDisc™
|
73,000 | 73,000 | ||||||
Patent - Hydrogel nanoparticle aggregate
|
589,858 | 589,858 | ||||||
9,625,938 | 9,625,938 | |||||||
Less: accumulated amortization
|
(5,955,101 | ) | (5,479,953 | ) | ||||
Intangible assets, net
|
$ | 3,670,837 | $ | 4,145,985 |
Calendar Years
|
Future Amortization
Expense
|
|||
2014
|
$ | 475,148 | ||
2015
|
475,148 | |||
2016
|
476,450 | |||
2017
|
475,148 | |||
2018
|
475,148 | |||
2019 & Beyond
|
1,293,795 | |||
Total
|
$ | 3,670,837 |
NOTE 10.
|
INVESTMENT IN UNCONSOLIDATED SUBSIDIARY
|
Altrazeal Trading Ltd.
|
2012
|
|||
Balance sheet
|
||||
Total assets
|
$ | 415,248 | ||
Total liabilities
|
$ | 205,991 | ||
Total stockholders’ equity
|
$ | 209,257 | ||
Statement of operations
|
||||
Revenues
|
$ | 131,869 | ||
Net (loss)
|
$ | (330,961 | ) |
NOTE 11.
|
ACCRUED LIABILITIES
|
Accrued Liabilities
|
2013
|
2012
|
||||||
Accrued taxes – payroll
|
$ | 106,299 | $ | 106,299 | ||||
Accrued compensation/benefits
|
148,683 | 213,005 | ||||||
Accrued insurance payable
|
60,113 | 52,629 | ||||||
Product rebates/returns
|
32 | 81 | ||||||
Other
|
836 | 951 | ||||||
Total accrued liabilities
|
$ | 315,963 | $ | 372,965 |
NOTE 12.
|
CONVERTIBLE DEBT
|
As of December 31, 2013
|
|||||||||||||||||||||||||
Transaction
|
Initial
Principal
Amount
|
Interest
Rate
|
Maturity
Date
|
Conversion
Price (1)(2)
|
Principal
Balance
|
Unamortized
Debt
Discount
|
Carrying
Value
|
||||||||||||||||||
June 2011 Note
|
$ | 140,000 | 10.0 | % |
06/13/2014
|
$ | 1.20 | $ | 140,000 | $ | 1,780 | $ | 138,220 | ||||||||||||
July 2011 Note
|
125,000 | 10.0 | % |
07/28/2014
|
$ | 1.08 | 125,000 | 4,262 | 120,738 | ||||||||||||||||
June 2012 Note
|
2,210,000 | 8.0 | % |
03/27/2015
|
$ | 0.35 | 1,093,638 | 205,539 | 888,099 | ||||||||||||||||
Total
|
$ | 2,475,000 | $ | 1,358,638 | $ | 211,581 | $ | 1,147,057 |
(1)
|
The outstanding principal balance of the June 2011 Note and the July 2011 Note may be converted, at the option of Mr. Gray, into shares of common stock at a fixed conversion price of $1.20 per share and $1.08 per shares, respectively.
|
(2)
|
The outstanding principal balance of the June 2012 Note may be converted, at the option of Inter-Mountain, into shares of common stock at a conversion price of $0.35 per share, subject to certain pricing adjustments and ownership limitations.
|
Payments Due By Period
|
||||||||||||
Transaction
|
Total
|
2014
|
2015
|
2016
|
2017
|
2018
|
||||||
June 2011 Note
|
$ 140,000
|
$ 140,000
|
$ ---
|
$ ---
|
$ ---
|
$ ---
|
||||||
July 2011 Note
|
125,000
|
125,000
|
---
|
---
|
---
|
---
|
||||||
June 2012 Note
|
1,093,638
|
1,093,638
|
---
|
---
|
---
|
---
|
||||||
Total
|
$ 1,358,638
|
$ 1,358,638
|
$ ---
|
$ ---
|
$ ---
|
$ ---
|
NOTE 13.
|
EQUITY TRANSACTIONS
|
NOTE 14.
|
STOCKHOLDERS’ EQUITY
|
Number of Shares of Common Stock Subject to Exercise
|
Weighted – Average
Exercise Price
|
|||||||
Balance as of December 31, 2011
|
612,594 | $ | 2.45 | |||||
Warrants issued
|
1,428,571 | 0.35 | ||||||
Warrants exercised
|
--- | --- | ||||||
Warrants cancelled
|
--- | --- | ||||||
Balance as of December 31, 2012
|
2,041,165 | $ | 0.98 | |||||
Warrants issued
|
4,445,714 | 0.56 | ||||||
Warrants exercised
(1)
|
(1,571,428 | ) | 0.35 | |||||
Warrants cancelled
|
(250,000 | ) | 0.35 | |||||
Balance as of December 31, 2013
(1)
|
4,665,451 | $ | 0.82 |
(1)
|
As part of the June 2012 Note, Inter-Mountain received a total of seven warrants to purchase, if they all vest, an aggregate of 3,142,857 shares of common stock, which number of shares could increase based upon the terms and conditions of the warrants. The warrants have an exercise price of $0.35 per share, subject to certain pricing adjustments, and are exercisable, subject to vesting provisions and ownership limitations, until June 27, 2017. Warrants for 785,714, 392,857, 392,857, and 392,857 shares of common stock vested on June 27, 2012, December 31, 2012, February 26, 2013, and July 15, 2013, respectively, and three warrants for 1,571,428 shares of common stock have been exercised. For the purposes of this Table, only such net vested shares of common stock from the fourth warrant (392,857 shares) have been included, based upon an exercise price of $0.35 per share of common stock. On January 22, 2014, we elected to offset and deduct the three remaining Investor Notes from the principle amount due to Inter-Mountain under the June 2012 Note and as a result of the offset and deduction the three remaining warrants terminated.
|
Date of Expiration
|
Number of Warrant Shares of Common Stock Subject to Expiration
|
|||
January 3, 2014
|
3,000,000 | |||
July 23, 2014
|
69,050 | |||
May 15, 2015
|
357,155 | |||
June 13, 2016
|
35,000 | |||
July 16, 2016
|
116,667 | |||
July 28, 2016
|
34,722 | |||
June 27, 2017
|
392,857 | |||
March 14, 2018
|
660,000 | |||
Total
|
4,665,451 |
NOTE 15.
|
EARNINGS PER SHARE
|
December 31, 2013
|
December 31, 2012
|
|||||||
Warrants to purchase common stock
(1)
|
4,665,451 | 2,041,165 | ||||||
Stock options to purchase common stock
|
1,014,907 | 158,409 | ||||||
Unvested restricted common stock
|
--- | 300 | ||||||
Common stock issuable upon the assumed conversion of our convertible note payable from June 2012
(2)
|
3,124,680 | 5,617,974 | ||||||
Common stock issuable upon the assumed conversion of our convertible notes payable from June 2011 and July 2011
(3)
|
253,315 | 368,637 | ||||||
Common stock issuable upon the assumed conversion of our Series A preferred stock
(4)(5)
|
--- | 1,002,634 | ||||||
Total
|
9,058,353 | 9,189,119 |
(1)
|
As part of the June 2012 Note, Inter-Mountain received a total of seven warrants to purchase, if they all vest, an aggregate of 3,142,857 shares of common stock, which number of shares could increase based upon the terms and conditions of the warrants. The warrants have an exercise price of $0.35 per share, subject to certain pricing adjustments, and are exercisable, subject to vesting provisions and ownership limitations, until June 27, 2017. Warrants for 785,714, 392,857, 392,857, and 392,857 shares of common stock vested on June 27, 2012, December 31, 2012, February 26, 2013, and July 15, 2013, respectively, and three warrants for 1,571,428 shares of common stock have been exercised. For the purposes of this Table, only such net vested shares of common stock from the fourth warrant (392,857 shares) have been included, based upon an exercise price of $0.35 per share of common stock. On January 22, 2014, we elected to offset and deduct the three remaining Investor Notes from the principle amount due to Inter-Mountain under the June 2012 Note and as a result of the offset and deduction the three remaining warrants terminated.
|
(2)
|
The outstanding principal balance and the accrued and unpaid interest of the June 2012 Note may be converted, at the option of Inter-Mountain, into shares of common stock at a conversion price of $0.35 per share, subject to certain pricing adjustments and ownership limitations. For the purposes of this Table, we have assumed a conversion price of $0.35 per share and no ownership limitations.
|
(3)
|
The outstanding principal balance of the June 2011 Note and the July 2011 Note may be converted, at the option of Mr. Gray, into shares of common stock at a fixed conversion price of $1.20 per share and $1.08 per share, respectively. The accrued and unpaid interest for each convertible note payable may be converted, at the option of Mr. Gray, into shares of common stock at a conversion price based upon the average of the five trading days prior to the payment date, which for the purposes of this Table we have assumed to be December 31, 2013.
|
(4)
|
The outstanding Series A preferred stock and the accrued and unpaid dividends thereon are convertible into shares of the Company’s common stock at the Company’s option at any time after six-months from the date of issuance of the Series A preferred stock. The conversion price for the holder is fixed at $0.70 per share with no adjustment mechanisms, resets, ratchets, or anti-dilution covenants other than the customary adjustments for stock splits. For the purposes of this Table, we have assumed a conversion price of $0.70 per share.
|
(5)
|
On August 15, 2013, we provided notice to Ironridge for the redemption of all of our Series A Shares held by Ironridge, a total of 65 Series A Shares. An affiliate of Ironridge, the issuer of promissory notes held by us, due 7.5 years from the issue date, in the principal amount of $969,000, agreed to accept the cancellation of the promissory notes held by us as full and final payment for the redemption amounts of the Series A Shares.
|
NOTE 16.
|
SHARE BASED COMPENSATION
|
2013
|
2012
(1)
|
|||||||
Incentive Stock Options
|
||||||||
Quantity
|
232,500 | --- | ||||||
Weighted average fair value per share
|
$ | 0.24 | --- | |||||
Fair value
|
$ | 56,112 | --- | |||||
Nonstatutory Stock Options
|
||||||||
Quantity
|
735,000 | --- | ||||||
Weighted average fair value per share
|
$ | 0.24 | --- | |||||
Fair value
|
$ | 177,388 | --- |
(1)
|
The Company did not award any share-based compensation for the year ended December 31, 2012.
|
2013
|
2012
(4)
|
|||||||
Incentive Stock Options
|
||||||||
Expected volatility (1)
|
103.55 | % | --- | |||||
Risk-fee interest rate % (2)
|
0.81 | % | --- | |||||
Expected term (in years)
|
5.0 | --- | ||||||
Dividend yield (3)
|
--- | --- | ||||||
Nonstatutory Stock Options
|
||||||||
Expected volatility (1)
|
103.55 | % | --- | |||||
Risk-fee interest rate % (2)
|
0.81 | % | --- | |||||
Expected term (in years)
|
5.0 | --- | ||||||
Dividend yield (3)
|
--- | --- |
(1)
|
Expected volatility assumption was based upon a combination of historical stock price volatility measured on a daily basis and an estimate of expected future stock price volatility.
|
(2)
|
Risk-free interest rate assumption is based upon U.S. Treasury bond interest rates appropriate for the term of the stock options.
|
(3)
|
The Company does not currently intend to pay cash dividends, thus has assumed a 0% dividend yield.
|
(4)
|
The Company did not award any share-based compensation for the year ended December 31, 2012.
|
2013
|
2012
|
|||||||
Research and development
|
$ | 16,863 | $ | 6,280 | ||||
Selling, general and administrative
|
64,076 | 31,617 | ||||||
Total share-based compensation expense
|
$ | 80,939 | $ | 37,897 |
Stock Options
|
Weighted Average Exercise Price per Share
|
|||||||
Outstanding as of December 31, 2011
|
287,745 | $ | 16.89 | |||||
Granted
|
--- | --- | ||||||
Forfeited/cancelled
|
(129,336 | ) | 22.49 | |||||
Exercised
|
--- | --- | ||||||
Outstanding as of December 31, 2012
|
158,409 | 12.32 | ||||||
Granted
|
967,500 | 0.33 | ||||||
Forfeited/cancelled
|
(111,002 | ) | 1.03 | |||||
Exercised
|
--- | --- | ||||||
Outstanding as of December 31, 2013
|
1,014,907 | $ | 2.12 |
Options Outstanding
|
Options Exercisable
|
|||||||||||||||||
Stock Options Outstanding
|
Weighted Average Exercise Price per Share
|
Weighted Average Remaining Contractual Life in Years
|
Stock Options Exercisable
|
Weighted Average Exercise Price per Share
|
||||||||||||||
892,500 | $ | 0.33 | 9.2 | 197,500 | $ | 0.33 | ||||||||||||
53,334 | 2.38 | 4.5 | 46,668 | 2.36 | ||||||||||||||
30,002 | 14.40 | 3.3 | 30,002 | 14.40 | ||||||||||||||
39,071 | 33.35 | 3.8 | 39,071 | 33.35 | ||||||||||||||
1,014,907 | $ | 2.12 | 8.6 | 313,241 | $ | 6.10 |
2013
|
2012
|
|||||||
Research and development
|
$ | 444 | $ | 3,762 | ||||
Selling, general and administrative
|
547 | 4,535 | ||||||
Total share-based compensation expense
|
$ | 991 | $ | 8,297 |
Restricted Stock
|
Weighted Average Grant Date Fair Value
|
|||||||
Outstanding as of December 31, 2011
|
1,096 | $ | 41.47 | |||||
Granted
|
--- | --- | ||||||
Forfeited/cancelled
|
(97 | ) | 34.59 | |||||
Exercised/issued
|
(699 | ) | 45.39 | |||||
Outstanding as of December 31, 2012
|
300 | $ | 34.59 | |||||
Granted
|
--- | --- | ||||||
Forfeited/cancelled
|
--- | --- | ||||||
Exercised/issued
|
(300 | ) | 34.59 | |||||
Outstanding as of December 31, 2013
|
--- | $ | --- |
NOTE 17.
|
EMPLOYMENT BENEFIT PLAN
|
NOTE 18.
|
FAIR VALUE MEASUREMENTS
|
Level 1
|
—
|
Valuations based on quoted prices (unadjusted) for identical assets or liabilities in active markets.
|
Level 2
|
—
|
Valuations based on observable inputs other than quoted prices in Level 1, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and other inputs that are observable or can be corroborated by observable market data.
|
Level 3
|
—
|
Valuations based on unobservable inputs reflecting the Company’s own assumptions, consistent with reasonably available assumptions made by other market participants.
|
Description
|
2013
|
2012
|
||||||
Assets:
|
||||||||
Notes receivable and accrued interest
|
$ | 777,710 | $ | 1,302,220 | ||||
Liabilities:
|
||||||||
Convertible note – June 2011
|
$ | 138,220 | $ | 134,154 | ||||
Convertible note – July 2011
|
$ | 120,738 | $ | 113,084 | ||||
Convertible note – June 2012
|
$ | 888,099 | $ | 1,593,924 |
NOTE 19.
|
INCOME TAXES
|
Calendar Years
|
Consolidated Operating Loss Carryforwards
|
Research Activities
Carryforwards
|
||||||
2021
|
$ | 34,248 | $ | --- | ||||
2023
|
95,666 | --- | ||||||
2024
|
910,800 | 13,584 | ||||||
2025
|
1,687,528 | 21,563 | ||||||
2026
|
11,950,281 | 60,797 | ||||||
2027
|
3,431,365 | 85,052 | ||||||
2028
|
8,824,940 | 139,753 | ||||||
2029
|
6,889,761 | 81,940 | ||||||
2030
|
5,113,583 | 41,096 | ||||||
2031
|
3,728,626 | 43,592 | ||||||
2032
|
3,695,792 | 8,690 | ||||||
2033
|
3,187,559 | 15,882 | ||||||
Total
|
$ | 49,550,149 | $ | 511,949 |
2013
|
2012
|
|||||||
Deferred tax assets:
|
||||||||
Net operating loss carryforwards
|
$ | 17,657,746 | $ | 16,549,134 | ||||
Intangible assets
|
247,248 | 305,552 | ||||||
Other
|
512,286 | 502,732 | ||||||
Total gross deferred tax assets
|
18,417,280 | 17,357,418 | ||||||
Deferred tax liabilities:
|
||||||||
Property and equipment
|
72,347 | 77,839 | ||||||
Total gross deferred tax liabilities
|
72,347 | 77,839 | ||||||
Net total of deferred assets and liabilities
|
18,344,933 | 17,279,579 | ||||||
Valuation allowance
|
(18,344,933 | ) | (17,279,579 | ) | ||||
Net deferred tax assets
|
$ | --- | $ | --- |
2013
|
2012
|
|||||||
Expected income tax (benefit) at federal statutory tax rate -35%
|
$ | ( 1,137,320 | ) | $ | ( 1,309,975 | ) | ||
Permanent differences
|
21,754 | 16,500 | ||||||
Research tax credits
|
(15,882 | ) | (8,690 | ) | ||||
Amortization of deferred start up costs
|
--- | --- | ||||||
Valuation allowance
|
1,131,448 | 1,302,165 | ||||||
Income tax expense
|
$ | --- | $ | --- |
NOTE 20.
|
COMMITMENTS AND CONTINGENCIES
|
Calendar Years
|
Future Lease Expense
|
|||
2014
|
$ | 120,917 | ||
2015
|
28,881 | |||
2016
|
--- | |||
2017
|
--- | |||
2018
|
--- | |||
Total
|
$ | 149,798 |
Name
|
2013
|
2012
|
2011
|
Total
|
||||||||||||
Kerry P. Gray
(1)
|
$ | (91,000 | ) | $ | 220,673 | $ | 140,313 | $ | 269,986 | |||||||
Terrance K. Wallberg
|
(35,769 | ) | $ | 24,230 | $ | 36,539 | $ | 25,000 | ||||||||
Key executives
|
(20,000 | ) | $ | 27,253 | $ | 20,986 | $ | 28,239 | ||||||||
Total
|
$ | (146,739 | ) | $ | 272,156 | $ | 197,838 | $ | 323,225 |
(1)
|
During 2013, Mr. Gray temporarily deferred compensation of $221,500 which consisted of $11,500 earned pursuant to a Separation Agreement and $210,000 for his duties as Chairman of the Executive Committee of the Company’s Board of Directors. During 2013, Mr. Gray was also repaid $312,500 of temporarily deferred compensation, of which $300,000 was used by Mr. Gray for funding required pursuant to the March 2013 Offering.
|
NOTE 21.
|
LEGAL PROCEEDINGS
|
NOTE 22.
|
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
|
First Quarter
|
Second Quarter
|
Third Quarter
|
Fourth Quarter
|
|||||||||||||
2013
|
||||||||||||||||
Revenues
|
$ | 102,044 | $ | 28,884 | $ | 110,580 | $ | 129,060 | ||||||||
Costs and expenses
|
649,413 | 744,932 | 743,033 | 880,888 | ||||||||||||
Operating (loss)
|
(547,369 | ) | (716,048 | ) | (632,453 | ) | (751,828 | ) | ||||||||
Other income (expense)
|
(109,221 | ) | (106,737 | ) | (110,816 | ) | (106,442 | ) | ||||||||
Net (loss)
|
$ | (656,590 | ) | $ | (822,785 | ) | $ | (743,269 | ) | $ | (858,270 | ) | ||||
Less preferred stock dividends
|
(12,021 | ) | (12,154 | ) | (6,061 | ) | --- | |||||||||
Net (loss) allocable to common stockholders
|
$ | (668,611 | ) | $ | (834,939 | ) | $ | (749,330 | ) | $ | (858,270 | ) | ||||
Basic and diluted net (loss) per common share
|
$ | (0.06 | ) | $ | (0.06 | ) | $ | (0.05 | ) | $ | (0.04 | ) | ||||
2012
|
||||||||||||||||
Revenues
|
$ | 60,005 | $ | 56,211 | $ | 88,922 | $ | 165,456 | ||||||||
Costs and expenses
|
879,717 | 884,289 | 837,149 | 1,034,259 | ||||||||||||
Operating (loss)
|
(819,712 | ) | (828,078 | ) | (748,227 | ) | (868,803 | ) | ||||||||
Other income (expense)
|
(23,697 | ) | (30,068 | ) | (103,498 | ) | (109,266 | ) | ||||||||
Net (loss)
|
$ | (843,409 | ) | $ | (858,146 | ) | $ | (851,725 | ) | $ | (978,069 | ) | ||||
Less preferred stock dividends
|
(10,726 | ) | (12,154 | ) | (12,288 | ) | (12,288 | ) | ||||||||
Net (loss) allocable to common stockholders
|
$ | (854,135 | ) | $ | (870,300 | ) | $ | (864,013 | ) | $ | (990,357 | ) | ||||
Basic and diluted net (loss) per common share
|
$ | (0.11 | ) | $ | (0.11 | ) | $ | (0.10 | ) | $ | (0.10 | ) |
NOTE 23.
|
SUBSEQUENT EVENTS
|
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