Florida
|
04-3721895
|
(State
or Other Jurisdiction of Incorporation
or Organization)
|
(I.R.S.
Employer Identification
No.)
|
|
||
Page
|
||
PART
I – FINANCIAL INFORMATION
|
||
Item
1.
|
||
4
|
||
|
||
5
|
||
6
|
||
|
||
9
|
||
10
|
||
Item
2.
|
16
|
|
Item
3.
|
20
|
|
PART
II – OTHER INFORMATION
|
||
21
|
||
22
|
ASSETS
|
||||
|
|
|||
Current
Assets:
|
||||
Cash
and cash equivalents
|
$
|
5,090,177
|
||
Prepaid
expenses
|
97,773
|
|||
TOTAL
CURRENT ASSETS
|
5,187,950
|
|||
|
||||
Property
and equipment, net
|
90,514
|
|||
Security
deposits
|
55,698
|
|||
$
|
5,334,162
|
|||
|
||||
|
||||
Current
Liabilities:
|
||||
Accounts
payable
|
$
|
68,972
|
||
Accrued
expenses
|
32,500
|
|||
TOTAL
CURRENT LIABILITIES
|
101,472
|
|||
Non-current
liability:
|
||||
Derivative financial instrument | 418,474 | |||
Stockholders'
equity:
|
||||
Preferred
stock, $.001 par value, 20,000,000 shares
|
||||
authorized,
277,100 shares outstanding, designated
|
||||
as
Series A Convertible Preferred Stock
|
2,203,915
|
|||
Common
stock, $.0001 par value, authorized 100,000,000
|
||||
shares,
18,604,300 issued and outstanding
|
1,860
|
|||
Additional
paid-in-capital
|
17,590,422
|
|||
Deferred
stock based compensation
|
(1,207,429
|
)
|
||
Deficit
accumulated during the development stage
|
(13,774,552
|
)
|
||
|
4,814,216 | |||
|
$
|
5,334,162
|
Three
Months Ended October
31,
|
Nine
Months Ended October
31,
|
August
4, 1999
(Inception)
to
|
||||||||||||||
2005
|
2004
|
2005
|
2004
|
October
31, 2005
|
||||||||||||
Revenues
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
0
|
||||||
|
||||||||||||||||
Costs
and expenses:
|
||||||||||||||||
|
|
|||||||||||||||
Research
and development
|
366,555
|
301,622
|
959,363
|
469,796
|
3,249,690
|
|||||||||||
|
||||||||||||||||
General
and administrative
|
627,634
|
42,402
|
2,155,814
|
44,405
|
2,822,056
|
|||||||||||
|
||||||||||||||||
Stock
based compensation
|
161,458
|
545,311
|
3,429,172
|
706,641
|
7,534,878
|
|||||||||||
|
||||||||||||||||
Total
costs and expenses
|
1,155,647
|
889,335
|
6,544,349
|
1,220,842
|
13,606,624
|
|||||||||||
|
||||||||||||||||
Loss
from operations
|
(1,155,647
|
)
|
(889,335
|
)
|
(6,544,349
|
)
|
(1,220,842
|
)
|
(13,606,624
|
)
|
||||||
|
||||||||||||||||
Interest
and investment income
|
7,633
|
3,971
|
53,443
|
3,971
|
73,478
|
|||||||||||
Other
(expense)
|
(27,710
|
)
|
—
|
(44,014
|
)
|
—
|
(44,014
|
)
|
||||||||
|
||||||||||||||||
Derivative financial instrument | ||||||||||||||||
income | 179,663 |
—
|
148,611 |
—
|
148,611 | |||||||||||
Net
loss
|
(996,061
|
)
|
(885,364
|
)
|
(6,386,309
|
)
|
(1,216,871
|
)
|
(13,428,549
|
)
|
||||||
Preferred
stock dividend
|
(23,794
|
)
|
—
|
(23,794
|
)
|
—
|
(23,794
|
)
|
||||||||
Accretion on Series A | ||||||||||||||||
Preferred
stock
|
—
|
—
|
(322,209 | ) |
—
|
(322,209 | ) | |||||||||
Net
loss applicable to common stockholders
|
$
|
(1,019,855
|
)
|
$
|
(885,364
|
)
|
$
|
(6,732,312
|
)
|
$
|
(1,216,871
|
)
|
$
|
(13,774,552
|
)
|
|
|
||||||||||||||||
Weighted
average shares outstanding:
|
||||||||||||||||
Basic
and diluted
|
18,604,300
|
15,811,712
|
18,425,825
|
14,338,921
|
12,760,308
|
|||||||||||
|
||||||||||||||||
Net
loss per common share:
|
||||||||||||||||
Basic
and diluted
|
$
|
(0.05
|
)
|
$
|
(0.37
|
)
|
$
|
(0.37
|
)
|
$
|
(0.08
|
)
|
$
|
(1.08
|
)
|
Deficit
|
||||||||||||||||||||||
Deferred
|
Accumulated
|
|||||||||||||||||||||
Additional
|
Unamortized
|
During
|
Total
|
|||||||||||||||||||
Common
Stock
|
Treasury
|
Paid
in
|
Stock-based
|
Development
|
Stockholders'
|
|||||||||||||||||
|
|
Shares
|
Par
Value
|
Shares
|
Capital
|
Compensation
|
Stage
|
Equity
|
||||||||||||||
Balance
August 4, 1999 (Inception)
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
|||||||||
Sale
of common stock - founders
|
222,000,000
|
22,200
|
—
|
19,800
|
—
|
—
|
42,000
|
|||||||||||||||
Net
loss for the period ended January 31, 2000
|
—
|
—
|
—
|
—
|
—
|
(14,760
|
)
|
(14,760
|
)
|
|||||||||||||
Balance,
January 31, 2000
|
222,000,000
|
22,200
|
0
|
19,800
|
0
|
(14,760
|
)
|
27,240
|
||||||||||||||
Net
loss for the period ended January 31, 2001
|
—
|
—
|
—
|
—
|
—
|
(267,599
|
)
|
(267,599
|
)
|
|||||||||||||
Balance,
January 31, 2001
|
222,000,000
|
22,200
|
0
|
19,800
|
0
|
(282,359
|
)
|
(240,359
|
)
|
|||||||||||||
Capital
contribution cash
|
45,188
|
45,188
|
||||||||||||||||||||
Net
loss for the period ended January 31, 2002
|
—
|
—
|
—
|
—
|
—
|
(524,224
|
)
|
(524,224
|
)
|
|||||||||||||
Balance,
January 31, 2002
|
222,000,000
|
22,200
|
0
|
64,988
|
0
|
(806,583
|
)
|
(719,395
|
)
|
|||||||||||||
Sale
of common stock
|
7,548,000
|
755
|
2,645
|
3,400
|
||||||||||||||||||
Capital
contribution cash
|
2,500
|
2,500
|
||||||||||||||||||||
Net
loss for the period ended January 31, 2003
|
—
|
—
|
—
|
—
|
—
|
(481,609
|
)
|
(481,609
|
)
|
|||||||||||||
Balance,
January 31, 2003
|
229,548,000
|
22,955
|
0
|
70,133
|
0
|
(1,288,192
|
)
|
(1,195,104
|
)
|
|||||||||||||
Net
loss for the period ended January 31, 2004
|
—
|
—
|
—
|
—
|
—
|
(383,021
|
)
|
(383,021
|
)
|
|||||||||||||
Balance,
January 31, 2004
|
229,548,000
|
$
|
22,955
|
$
|
0
|
$
|
70,133
|
$
|
0
|
(1,671,213
|
)
|
(1,578,125
|
)
|
Deficit
|
||||||||||||||||||||||
Deferred
|
Accumulated
|
|||||||||||||||||||||
Additional
|
Unamortized
|
During
|
Total
|
|||||||||||||||||||
Common
Stock
|
Treasury
|
Paid
in
|
Stock-based
|
Development
|
Stockholders'
|
|||||||||||||||||
|
|
Shares
|
Par
Value
|
Shares
|
Capital
|
Compensation
|
Stage
|
Equity
|
||||||||||||||
Balance,
January 31, 2004
|
229,548,000
|
$
|
22,955
|
$
|
0
|
$
|
70,133
|
$
|
0
|
$ |
(1,671,213
|
)
|
$ |
(1,578,125
|
)
|
|||||||
|
|
|
|
|
|
|
|
|||||||||||||||
Founders
waive deferred compensation
|
|
|
|
1,655,029
|
|
|
1,655,029
|
|||||||||||||||
Private
Placement common stock
|
2,645,210
|
265
|
2,512,685
|
2,512,950
|
||||||||||||||||||
Redeemed
shares from Panetta Partners, Ltd
|
(218,862,474
|
)
|
(21,886
|
)
|
(478,114
|
)
|
(500,000
|
)
|
||||||||||||||
Cost
associated with recapitalization
|
(301,498
|
)
|
(301,498
|
)
|
||||||||||||||||||
Share
exchange with Xenomics Founders
|
2,258,001
|
226
|
(226
|
)
|
0
|
|||||||||||||||||
Issuance
of treasury shares to escrow
|
350,000
|
35
|
(35
|
)
|
0
|
|||||||||||||||||
Private
Placement common stock
|
1,368,154
|
136
|
2,667,764
|
2,667,900
|
||||||||||||||||||
Issuance
of warrants to finders
|
|
|
|
157,062
|
|
|
157,062
|
|||||||||||||||
Finders
warrants charged cost of capital
|
|
|
|
(157,062
|
)
|
|
|
(157,062
|
)
|
|||||||||||||
Deferred
stock based compensation
|
1,937,500
|
(1,937,500
|
)
|
0
|
||||||||||||||||||
Amortization
of deferred stock based compensation
|
245,697
|
245,697
|
||||||||||||||||||||
Stock
based compensation expense - non-employees
|
3,862,007
|
3,862,007
|
||||||||||||||||||||
Net
loss for the year ended January 31, 2005
|
—
|
—
|
—
|
—
|
—
|
(5,371,027
|
)
|
(5,371,027
|
)
|
|||||||||||||
Balance,
January 31, 2005
|
17,306,891
|
$
|
1,731
|
$ |
(35
|
)
|
$
|
11,923,280
|
$ |
(1,691,803
|
)
|
$ |
(7,042,240
|
)
|
$
|
3,190,935
|
Deficit
|
|
|
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Deferred
|
|
Accumulated
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
Additional
|
|
Unamortized
|
|
During
|
|
Total
|
|
||||||||
|
|
Preferred
|
|
Common
Stock
|
|
Treasury
|
|
Paid
in
|
|
Stock-based
|
|
Development
|
|
Stockholders'
|
|
||||||||||
|
|
Stock
|
|
Shares
|
|
Par
Value
|
|
Shares
|
|
Capital
|
|
Compensation
|
|
Stage
|
|
Equity
|
|||||||||
Balance,
January 31, 2005
|
0
|
17,306,891
|
$
|
1,731
|
$ |
(35
|
)
|
11,923,282
|
$ |
(1,691,803
|
)
|
$ |
(7,042,250
|
)
|
$
|
3,190,935
|
|||||||||
|
|||||||||||||||||||||||||
Private
Placement common stock - February 2005
|
102,564
|
10
|
199,990
|
200,000
|
|||||||||||||||||||||
Payment
of finders fees and expenses in cash
|
(179,600
|
)
|
(179,600
|
)
|
|||||||||||||||||||||
Common
stock issued to finders
|
— |
24,461
|
2
|
— |
(2
|
)
|
— | — |
—
|
||||||||||||||||
Private
placement of common stock - net
|
127,025
|
12
|
20,388
|
20,400
|
|||||||||||||||||||||
|
|||||||||||||||||||||||||
Private
Placement common stock - April 2005
|
1,515,384
|
152
|
2,954,847
|
2,954,999
|
|||||||||||||||||||||
Payment
of finders fees and expenses in cash
|
(298,000
|
)
|
(298,000
|
)
|
|||||||||||||||||||||
Issuance
of warrants to finders at fair value
|
222,188
|
222,188
|
|||||||||||||||||||||||
Finders
warrants treated cost of capital
|
— | — | — | — |
(222,188
|
)
|
— | — |
(222,188
|
)
|
|||||||||||||||
Private
placement of common stock - net
|
1,515,384
|
152
|
2,656,847
|
2,656,999
|
|||||||||||||||||||||
|
|||||||||||||||||||||||||
Sale
of Series A Convertible Preferred Stock
|
2,448,791
|
322,209 |
2,771,000
|
||||||||||||||||||||||
Accretion on Series A Convertible Preferred Stock | 322,209 | (322,209 | ) | — | |||||||||||||||||||||
Value of warrants reclassified to derivative financial instrument liability | (567,085 | ) | (567,085 | ) | |||||||||||||||||||||
Payment
of finders fees and expenses in cash
|
(277,102
|
)
|
(277,102
|
)
|
|||||||||||||||||||||
Issuance
of warrants to finders at fair value
|
167,397
|
167,397
|
|||||||||||||||||||||||
Finders
warrants treated cost of capital
|
— | — | — | — |
(167,397
|
)
|
— | — |
(167,397
|
)
|
|||||||||||||||
Sale
of Series A Convertible Preferred Stock - net
|
$
|
2,203,915
|
45,107
|
|
(322,209 | ) |
1,926,813
|
||||||||||||||||||
|
|||||||||||||||||||||||||
Retirement
of Treasury Shares
|
(350,000
|
)
|
(35
|
)
|
35
|
—
|
|||||||||||||||||||
Shares
issued for services
|
5,000
|
|
16,500
|
16,500
|
|||||||||||||||||||||
Stock
based compensation expense - non-employees
|
2,928,298
|
2,928,298
|
|||||||||||||||||||||||
Amortization
of deferred stock based compensation
|
484,374
|
484,294
|
|||||||||||||||||||||||
Preferred
stock dividend
|
(23,794
|
)
|
(23,294
|
)
|
|||||||||||||||||||||
Net
loss for nine months ended October 31, 2005
|
—
|
—
|
—
|
—
|
—
|
—
|
(6,386,309
|
)
|
(6,386,309
|
)
|
|||||||||||||||
Balance,
October 31, 2005
|
$
|
2,203,915
|
18,604,300
|
$
|
1,860
|
$
|
0
|
$
|
17,590,422
|
$ |
(1,207,429
|
)
|
$ |
(13,774,552
|
)
|
$
|
4,814,216
|
Nine
months ended October 31,
|
Period
from
August
4, 1999
(inception)
to
|
|||||||||
2005
|
2004
|
October
31, 2005
|
||||||||
Cash
flows from operating activities:
|
||||||||||
Net
loss
|
$
|
(6,386,309
|
)
|
$
|
(1,216,871
|
)
|
$
|
(13,428,549
|
)
|
|
Adjustments
to reconcile net loss to net cash used in operating activities:
|
||||||||||
Depreciation
|
16,558
|
—
|
25,624
|
|||||||
Stock
based compensation expense
|
3,429,172
|
706,641
|
7,534,878
|
|||||||
Founders
compensation contributed to equity
|
—
|
74,404
|
1,655,029
|
|||||||
Derivative financial instrument (income) | (148,611 | ) | (148,611 | ) | ||||||
Changes
in operating assets and liabilities:
|
||||||||||
Prepaid
expenses
|
(62,413
|
)
|
(43,334
|
)
|
(97,773
|
)
|
||||
Security
deposit
|
2,475
|
(57,207
|
)
|
(55,698
|
)
|
|||||
Accounts
payable and accrued expenses
|
(105,586
|
)
|
74,356
|
101,472
|
||||||
Patent
costs
|
—
|
(4,402
|
)
|
—
|
||||||
Total
adjustments
|
3,131,595
|
750,458
|
9,014,921
|
|||||||
Net
cash used in operating activities
|
(3,254,714
|
)
|
(466,413
|
)
|
(4,413,628
|
)
|
||||
Cash
flows from investing activities:
|
||||||||||
Acquisition
of equipment
|
(29,575
|
)
|
(88,195
|
)
|
(116,138
|
)
|
||||
Net
cash used in investing activities
|
(29,575
|
)
|
(88,185
|
)
|
(116,138
|
)
|
||||
Cash
flows from financing activities:
|
||||||||||
Proceeds
from issuance of common stock
|
3,154,999
|
2,512,950
|
8,428,937
|
|||||||
Payment
of acquisition costs on common stock
|
(477,600
|
)
|
(301,498
|
)
|
(779,098
|
)
|
||||
Proceeds
from issuance of preferred stock
|
2,771,000
|
2,771,000
|
||||||||
Payment
of acquisition costs on preferred stock
|
(277,102
|
)
|
(277,102
|
)
|
||||||
Purchase
of common stock
|
—
|
(500,000
|
)
|
(500,000
|
)
|
|||||
Payment
of preferred stock dividend
|
(23,794
|
)
|
—
|
(23,794
|
)
|
|||||
Net
cash provided by financing activities
|
5,147,503
|
1,711,452
|
9,619,943
|
|||||||
|
||||||||||
Net
increase in cash and cash equivalents
|
1,863,212
|
1,156,844
|
5,090,177
|
|||||||
|
||||||||||
Cash
and cash equivalents at beginning of period
|
3,226,965
|
339
|
—
|
|||||||
Cash
and cash equivalents at end of period
|
$
|
5,090,177
|
$
|
1,157,183
|
$
|
5,090,177
|
||||
|
||||||||||
Supplementary
disclosure of cash flow information:
|
||||||||||
Cash
paid for taxes
|
$
|
—
|
$
|
—
|
$
|
—
|
||||
Cash
paid for interest
|
$
|
—
|
$
|
—
|
$
|
—
|
Three
Months Ended October 31,
|
Nine
Months Ended October, 31
|
||||||||||||
2005
|
2004
|
2005
|
2004
|
||||||||||
Net
loss applicable to common stockholders as reported
|
$
|
(1,019,855
|
)
|
$
|
(885,364
|
)
|
$
|
(6,732,312
|
)
|
$
|
(1,216,871
|
)
|
|
Add:
Stock-based employee compensation expense
|
|||||||||||||
recorded under APB No. 25 intrinsic value method
|
161,458
|
84,239
|
484,375
|
84,239
|
|||||||||
Deduct:
Stock-based employee compensation
|
|||||||||||||
expense determined under fair value method
|
(324,742
|
)
|
(174,239
|
)
|
(974,225
|
)
|
(174,388
|
)
|
|||||
|
|||||||||||||
Pro
forma net loss applicable to common stockholders
|
$
|
(1,183,138
|
)
|
$
|
(975,364
|
)
|
$
|
(7,222,162
|
)
|
$
|
(1,307,020
|
)
|
|
|
|||||||||||||
Net
loss per share:
|
|||||||||||||
Basic
and diluted -as reported
|
$
|
(0.05
|
)
|
$
|
(0.06
|
)
|
$
|
(0.37
|
)
|
$
|
(0.08
|
)
|
|
|
|||||||||||||
Basic
and diluted -pro forma
|
$
|
(0.06
|
)
|
$
|
(0.06
|
)
|
$
|
(0.39
|
)
|
$
|
(0.09
|
)
|
|
Black-Scholes
Methodology Assumptions:
|
|||||||||||||
Dividend
yield
|
0
|
%
|
0
|
%
|
0
|
%
|
0
|
%
|
|||||
|
|||||||||||||
Risk
free interest rate
|
4.25
|
%
|
4.25
|
%
|
4.25
|
%
|
4.25
|
%
|
|||||
|
|||||||||||||
Expected
lives of options
|
7
years
|
7
years
|
7
years
|
7
years
|
Year
Ended
January
31, 2005
|
Nine
Months
Ended
October
31, 2005
|
|
|||||
Net
loss prior to adjustments
|
$
|
(3,336,018
|
)
|
$
|
(3,248,507
|
)
|
|
Reversal
of charge for acquired in-process research and
development
|
2,145,101
|
0
|
|||||
Stock
based compensation - Trilogy Capital Partners, Inc.
|
(123,063
|
)
|
(453,294
|
)
|
|||
Deferred
founders' compensation contributed to capital
|
(74,404
|
)
|
0
|
||||
Net
loss as reported in Amendment #1
|
(1,388,384
|
)
|
(3,701,801
|
)
|
|||
Stock
based compensation:
|
|||||||
Trilogy
Capital Partners, Inc.
|
(2,507,377
|
)
|
453,294
|
||||
Consultants
other than Trilogy
|
(1,229,568
|
)
|
(2,928,298
|
)
|
|||
Employees
|
(245,697
|
)
|
(322,916
|
)
|
|||
Other
|
0
|
(35,199
|
)
|
||||
Net
loss as reported in Amendment #2
|
(5,371,026
|
)
|
(6,534,920
|
)
|
|||
Derivative
financial instrument
|
0
|
(418,474
|
)
|
||||
Net
loss as reported in Amendment #3
|
$
|
(5,371,026
|
)
|
$
|
(6,953,394
|
)
|
|
Derivative financial instrument | — | 567,085 | |||||
Net loss as reported in Amendment #4 | $ | (5,371,026 | ) | $ | (6,386,309 | ) | |
Weighted
average common shares
|
14,580,186
|
18,425,825
|
|||||
Loss
per share - Basic and diluted - Prior to adjustments
|
$
|
(0.23
|
)
|
$
|
(0.18
|
)
|
|
Loss
per share - Basic and diluted - As reported in Amendment
#4
|
$
|
(0.37
|
)
|
$
|
(0.37
|
)
|
31.1 | Certification of Chief Executive Officer required under Rule 13a-14(a)/15d-14(a) under the Exchange Act. | |
31.2 | Certification of Principal Financial Officer required under Rule 13a-14(a)/15d-14(a) under the Exchange Act. | |
32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2 | Certification of Principal Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
Date: February 28, 2006 | By: | /s/ L. David Tomei |
|
||
L.
David Tomei
Chief Executive
Officer
|
Date: February 28, 2006 | By: | /s/ Frederick Larcombe |
|
||
Frederick
Larcombe
Chief Financial
Officer
|
/s/ L. David Tomei | ||
|
||
Name:
L. David Tomei
Title:
Chief Executive Officer
(Principal
Executive Officer)
|
/s/ Frederick Larcombe | ||
|
||
Name:
Frederick Larcombe
Title:
Chief Financial Officer
(Principal
Financial Officer)
|
/s/ L. David Tomei | ||
|
||
Name:
L. David Tomei
Title:
Chief Executive Officer
|
/s/ Frederick Larcombe | ||
|
||
Name:
Frederick Larcombe
Title:
Chief Financial Officer
|