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SECURITIES AND EXCHANGE COMMISSION
UNDER
THE SECURITIES ACT OF 1933
Delaware | 2834 | 87-0458888 | ||
(State or other jurisdiction of incorporation or organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification Number) |
Exton, Pennsylvania 19341
(484) 713-6000
area code, of registrant’s principal executive offices)
405 Eagleview Boulevard
Exton, Pennsylvania 19341
(484) 713-6000
including area code, of agent for service)
Cozen O’Connor
1900 Market Street
Philadelphia, PA 19103
Professional Corporation
(215) 665-5542
Facsimile: (215) 701-2478
Proposed | ||||||||||||||
Maximum | Proposed | |||||||||||||
Offering | Maximum | Amount of | ||||||||||||
Title of each Class of Security being | Amount being | Price Per | Aggregate | Registration | ||||||||||
Registered | Registered (1) | Security(2) | Offering Price(2) | Fee | ||||||||||
Common Stock, $0.001 par value | 3,316,754 | $0.50 | $1,658,377 | $118.24 | ||||||||||
(1) | All of the shares are offered by the Selling Stockholders. Accordingly, this registration statement includes an indeterminate number of additional shares of common stock issuable for no additional consideration pursuant to any stock dividend, stock split, recapitalization or other similar transaction effected without the receipt of consideration, which results in an increase in the number of outstanding shares of our common stock. In the event of a stock split, stock dividend or similar transaction involving our common stock, in order to prevent dilution, the number of shares registered shall be automatically increased to cover the additional shares in accordance with Rule 416(a) under the Securities Act of 1933. | |
(2) | Estimated solely for purposes of determining the registration fee pursuant to Rule 457(c) under the Securities Act of 1933, using the average of the bid and asked prices as reported on the OTC Bulletin Board on December 1, 2010, which was $0.50 per share. |
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13,876,215 Common Stock
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OPINION OF COZEN O'CONNOR | ||||||||
CONSENT OF BDO SEIDMAN, LLP |
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• | 7,320,000 shares, to our pre-bankruptcy lenders and the lenders that provided us our debtor-in-possession facility, collectively; | ||
• | 3,960,000 shares, to the holders of our 3.5% convertible subordinated notes; |
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• | 600,000 shares, to our management as of the effective date, which was our chief operating officer; | ||
• | 120,000 shares, to the holders of our general unsecured claims; and | ||
• | 2,666,666 shares, to the purchasers of shares in the $2 million exit financing (our pre-bankruptcy lenders, the lenders that provided us our debtor-in-possession facility and the holders of our 3.5% convertible subordinated notes were permitted to participate in our exit financing). |
• | 12.5% interest payable quarterly in cash or, at our option, 15% payable in kind by capitalizing such unpaid amount and adding it to the principal as of the date it was due; | ||
• | mature June 1, 2012; | ||
• | at any time prior to the maturity date, we may redeem any portion of the outstanding principal of the New Notes in cash at 125% of the stated face value of the New Notes; provided that we will be obligated to redeem all outstanding New Notes upon the following events: (a) we or our subsidiary, Fibrocell Technologies, Inc. (formerly, Isolagen Technologies, Inc.) successfully complete a capital campaign raising in excess of $10,000,000; or (b) we or our subsidiary, Fibrocell Technologies, Inc., are acquired by, or sell a majority stake to, an outside party; | ||
• | the New Notes contain customary representations, warranties and covenants, including a covenant that we and our subsidiary, Fibrocell Technologies, Inc., shall be prohibited from the incurrence of additional debt without obtaining the consent of 66 2/3% of the New Note holders. |
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• | up to 5,076,664 shares of common stock; and | ||
• | up to 8,291,885 shares of common stock underlying the warrants issued in the March 2010 Private Offering and 507,666 shares of common stock underlying the warrants issued to the placement agents in the March 2010 Private Offering. |
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• | delays in obtaining regulatory approvals to commence a study; |
• | delays in identifying and reaching agreement on acceptable terms with prospective clinical trial sites; |
• | delays or failures in obtaining approval of our clinical trial protocol from an institutional review board, or IRB, to conduct a clinical trial at a prospective study site; |
• | delays in the enrollment of subjects; |
• | manufacturing difficulties; |
• | failure of our clinical trials and clinical investigators to be in compliance with the FDA’s Good Clinical Practices, or GCP; |
• | failure of our third-party contract research organizations, clinical site organizations and other clinical trial managers, to satisfy their contractual duties, comply with regulations or meet expected deadlines; |
• | lack of efficacy during clinical trials; or |
• | unforeseen safety issues. |
• | labeling and advertising requirements, restrictions or limitations, including the inclusion of warnings, precautions, contra-indications or use limitations that could have a material impact on the future profitability of our product candidates; |
• | testing and surveillance to further evaluate or monitor our future products and their continued compliance with regulatory standards and requirements; |
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• | submitting products for inspection; or |
• | imposing a risk evaluation and mitigation strategy, or REMS, to ensure that the benefits of the drug outweigh the risks. |
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• | FDA clinical trials and regulatory approvals; |
• | expansion of laboratory and manufacturing operations; |
• | research and development; |
• | brand development; |
• | personnel costs; |
• | development of relationships with strategic business partners, including physicians who might use our future products; and |
• | interest expense and amortization of issuance costs related to our outstanding note payables. |
• | conduct substantial additional research and development; |
• | successfully complete lengthy and expensive pre-clinical and clinical testing, including the Phase II/III clinical trial for our acne scar product candidate; |
• | successfully improve our manufacturing process; and |
• | obtain FDA approvals. |
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• | the level of demand for the products that we may develop; |
• | the timely and successful implementation of improved manufacturing processes; |
• | our ability to attract and retain personnel with the necessary strategic, technical and creative skills required for effective operations; |
• | the amount and timing of expenditures by practitioners and their patients; |
• | introduction of new technologies; |
• | product liability litigation, class action and derivative action litigation, or other litigation; |
• | the amount and timing of capital expenditures and other costs relating to the expansion of our operations; |
• | the state of the debt and/or equity markets at the time of any proposed offering we choose to initiate; |
• | our ability to successfully integrate new acquisitions into our operations; |
• | government regulation and legal developments regarding our Fibrocell Therapy in the United States and in the foreign countries in which we may operate in the future; and |
• | general economic conditions. |
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• | diversion of management’s time and attention; |
• | expenditure of large amounts of cash on legal fees, expenses and payment of damages; |
• | decreased demand for our products or any of our future products and services; or |
• | injury to our reputation. |
• | administrative or judicial enforcement actions; |
• | changes to advertising; |
• | failure to obtain marketing approvals for our product candidates; |
• | revocation or suspension of regulatory approvals of products; |
• | product seizures or recalls; |
• | court-ordered injunctions; |
• | import detentions; |
• | delay, interruption or suspension of product manufacturing, distribution, marketing and sales; or |
• | civil or criminal sanctions. |
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• | incurring substantial expenses, including fines, penalties, legal fees and costs to comply with the FDA’s requirements; |
• | changes in the methods of marketing and selling products; |
• | taking FDA mandated corrective action, which may include placing advertisements or sending letters to physicians rescinding previous advertisements or promotions; or |
• | disruption in the distribution of products and loss of sales until compliance with the FDA’s position is obtained. |
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• | labeling requirements or limitations; |
• | market acceptance by practitioners and their patients; |
• | our ability to successfully improve our manufacturing process; |
• | the effectiveness of our sales efforts and marketing activities; and |
• | the success of competitive products. |
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• | obtain and protect commercially valuable patents or the rights to patents both domestically and abroad; |
• | operate without infringing upon the proprietary rights of others; and |
• | prevent others from successfully challenging or infringing our proprietary rights. |
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• | the inventors of the inventions covered by each of our pending patent applications might not have been the first to make such inventions; |
• | we might not have been the first to file patent applications for these inventions or similar technology; |
• | the future and pending applications we will file or have filed, or to which we will or do have exclusive rights, may not result in issued patents or may take longer than we expect to result in issued patents; |
• | the claims of any patents that are issued may not provide meaningful protection; |
• | our issued patents may not provide a basis for commercially viable products or may not be valid or enforceable; |
• | we might not be able to develop additional proprietary technologies that are patentable; |
• | the patents licensed or issued to us may not provide a competitive advantage; |
• | patents issued to other companies, universities or research institutions may harm our ability to do business; |
• | other individual companies, universities or research institutions may independently develop or have developed similar or alternative technologies or duplicate our technologies and commercialize discoveries that we attempt to patent; |
• | other companies, universities or research institutions may design around technologies we have licensed, patented or developed; and |
• | many of our patent claims are method, rather than composition of matter, claims; generally composition of matter claims are easier to enforce and are more difficult to circumvent. |
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• | pay monetary damages; |
• | expend time and funding to redesign our Fibrocell Therapy so that it does not infringe others’ patents while still allowing us to compete in the market with a substantially similar product; |
• | obtain a license, if possible, in order to continue manufacturing or marketing the affected products or services, and pay license fees and royalties, which may be non-exclusive. This license may be non-exclusive, giving our competitors access to the same intellectual property, or the patent owner may require that we grant a cross-license to our patented technology; or |
• | stop research and commercial activities relating to the affected products or services if a license is not available on acceptable terms, if at all. |
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• | our ability to finance our business and continue in operations; | ||
• | whether the results of our full Phase III pivotal study and our BLA filing will result in approval of our product candidate, and whether any approval will occur on a timely basis; | ||
• | our ability to meet requisite regulations or receive regulatory approvals in the United States, Europe, Asia and the Americas, and our ability to retain any regulatory approvals that we may obtain; and the absence of adverse regulatory developments in the United States, Europe, Asia and the Americas or any other country where we plan to conduct commercial operations; | ||
• | whether our clinical human trials relating to the use of autologous cellular therapy applications, and such other indications as we may identify and pursue can be conducted within the timeframe that we expect, whether such trials will yield positive results, or whether additional applications for the commercialization of autologous cellular therapy can be identified by us and advanced into human clinical trials; | ||
• | our ability to develop autologous cellular therapies that have specific applications in cosmetic dermatology, and our ability to explore (and possibly develop) applications for periodontal disease, reconstructive dentistry, treatment of restrictive scars and burns and other health-related markets; | ||
• | our ability to decrease our manufacturing costs for our Fibrocell Therapy product candidates through the improvement of our manufacturing process, and our ability to validate any such improvements with the relevant regulatory agencies; | ||
• | our ability to reduce our need for fetal bovine calf serum by improved use of less expensive media combinations and different media alternatives; |
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• | continued availability of supplies at satisfactory prices; | ||
• | new entrance of competitive products or further penetration of existing products in our markets; | ||
• | the effect on us from adverse publicity related to our products or the company itself; | ||
• | any adverse claims relating to our intellectual property; | ||
• | the adoption of new, or changes in, accounting principles; | ||
• | our issuance of certain rights to our shareholders that may have anti-takeover effects; | ||
• | our dependence on physicians to correctly follow our established protocols for the safe administration of our Fibrocell Therapy; and | ||
• | other risks referenced from time to time elsewhere in this prospectus and in our filings with the SEC. |
AND RELATED STOCKHOLDER MATTERS
High | Low | |||||||
Year ended December 31, 2009 Fourth Quarter (from October 21, 2009) | $ | 2.40 | $ | 0.50 | ||||
Year ended December 31, 2010 First Quarter | $ | 1.18 | $ | 0.75 | ||||
Second Quarter | $ | 1.04 | $ | 0.60 | ||||
Third Quarter | $ | 0.85 | $ | 0.51 |
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Successor | Successor | Predecessor | |||||||||||
Nine Months | One Month | Eight Months | |||||||||||
Ended | Ended | Ended | |||||||||||
September 30, | September 30, | August 31, | |||||||||||
2010 | 2009 | 2009 | |||||||||||
(in millions) | |||||||||||||
Cash flows from operating activities | $ | (6.9 | ) | $ | (1.6 | ) | $ | (4.7 | ) | ||||
Cash flows from investing activities | — | — | — | ||||||||||
Cash flows from financing activities | 5.8 | 1.8 | 2.8 |
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• | 7,320,000 shares, to our pre-bankruptcy lenders and the lenders that provided us our debtor-in-possession facility, collectively; | ||
• | 3,960,000 shares, to the holders of our 3.5% convertible subordinated notes; | ||
�� | 600,000 shares, to our management as of the effective date, which was our chief operating officer; | ||
• | 120,000 shares, to the holders of our general unsecured claims; and | ||
• | 2,666,666 shares, to the purchasers of shares in the $2 million exit financing (our pre-bankruptcy lenders, the lenders that provided us our debtor-in-possession facility and the holders of our 3.5% convertible subordinated notes were permitted to participate in our exit financing). |
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• | 12.5% interest payable quarterly in cash or, at our option, 15% payable in kind by capitalizing such unpaid amount and adding it to the principal as of the date it was due; | ||
• | matures June 1, 2012; | ||
• | at any time prior to the maturity date, we may redeem any portion of the outstanding principal of the New Notes in cash at 125% of the stated face value of the New Notes; provided that we will be obligated to redeem all outstanding New Notes upon the following events: (a) we or our subsidiary, Fibrocell Technologies, Inc. (formerly, Isolagen Technologies, Inc.) successfully complete a capital campaign raising in excess of $10,000,000; or (b) we or our subsidiary, Fibrocell Technologies, Inc., are acquired by, or sell a majority stake to, an outside party; | ||
• | the New Notes contain customary representations, warranties and covenants, including a covenant that we and our subsidiary, Fibrocell Technologies, Inc., shall be prohibited from the incurrence of additional debt without obtaining the consent of 66 2/3% of the New Note holders. |
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• | aging of the “baby boomer” population, which currently includes ages approximately 46 to 64; |
• | the desire of many individuals to improve their appearance; |
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• | impact of managed care and reimbursement policies on physician economics, which has motivated physicians to establish or expand the menu of elective, private-pay aesthetic procedures that they offer; and |
• | broadening base of the practitioners performing cosmetic procedures beyond dermatologists and plastic surgeons to non-traditional providers. |
Procedure | Number | |||
Botulinum toxin type A | 2,557,068 | |||
Hyaluronic acid | 1,313,038 | |||
Laser hair removal | 1,280,031 | |||
Microdermabrasion | 621,943 | |||
Chemical peel | 529,285 |
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• | completion of pre-clinical laboratory tests or trials and formulation studies; |
• | submission to the FDA of an IND for a new drug or biologic, which must become effective before human clinical trials may begin; |
• | performance of adequate and well-controlled human clinical trials to establish the safety and efficacy of the proposed drug or biologic for its intended use; |
• | detailed information on product characterization and manufacturing process; and |
• | submission and approval of a New Drug Application, or NDA, for a drug, or a Biologics License Application, or BLA, for a biologic. |
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• | Phase I: The product is usually first introduced into healthy humans or, on occasion, into patients, and is tested for safety, dosage tolerance, absorption, distribution, excretion and metabolism. |
• | Phase II: The product is introduced into a limited subject population to: |
• | assess its efficacy in specific, targeted indications; |
• | assess dosage tolerance and optimal dosage; and |
• | identify possible adverse effects and safety risks. |
• | Phase III: These are commonly referred to as pivotal studies. If a product is found to have an acceptable safety profile and to be potentially effective in Phase II clinical trials, new clinical trials will be initiated to further demonstrate clinical efficacy, optimal dosage and safety within an expanded and diverse subject population at geographically-dispersed clinical study sites. |
• | If the FDA does ultimately approve the product, it may require post-marketing testing, including potentially expensive Phase IV studies, to confirm or further evaluate its safety and effectiveness. |
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Name | Title | Age | ||||
David Pernock | Director and Chief Executive Officer | 55 | ||||
Declan Daly | Director, Chief Operating Officer and Chief Financial Officer | 47 | ||||
Kelvin Moore | Director | 61 | ||||
Robert Langer | Director | 61 | ||||
Marc Mazur | Director | 51 | ||||
George J. Korkos | Director | 79 |
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Stock | Option | All Other | ||||||||||||||||||||||||||
Salary | Bonus | Awards | Awards | Compensation | Total | |||||||||||||||||||||||
Name and Principal Position | Year | ($) | ($) | ($) (1) | ($) (1) | ($) | ($) | |||||||||||||||||||||
Declan Daly, Chief Financial Officer and | 2009 | 403,538 | 100,000 | 288,000 | (3) | 17,908 | (4) | — | 809,446 | |||||||||||||||||||
Chief Operating Officer (2) | 2008 | 427,635 | 25,000 | — | 766,839 | (5) | — | 1,219,474 | ||||||||||||||||||||
Todd Greenspan, | 2009 | 176,308 | 50,000 | — | — | — | 226,308 | |||||||||||||||||||||
Former Chief Financial Officer (6) | 2008 | 231,385 | — | 78,663 | (7) | — | 310,048 | |||||||||||||||||||||
John Maslowski, Vice President of Operations | 2009 | 149,279 | — | 16,117 | (8) | — | 165,396 | |||||||||||||||||||||
Karen Donhauser, Vice President of Quality | 2009 | 110,936 | — | 9,670 | (9) | — | 120,606 |
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(1) | Except as disclosed in footnotes (8) and (9), represents the full grant date fair value of the stock award or option grant, as applicable, calculated in accordance with FASB ASC Topic 718. For the purposes of making the stock award calculation, an assumed value of $0.48 per share was utilized. For the purposes of making the option calculation for 2009, the following assumptions were made: (a) expected life (years) — 3.5 (for the options issued to Mr. Maslowski and Ms. Donhauser); expected life (years) — 2.5 (for the options issued to Mr. Daly); (b) volatility — 65.87%; (c) dividend yield — none; and (d) discount rate — 1.64% (for the options issued to Mr. Maslowski and Ms. Donhauser); discount rate — 0.99% (for the options issued to Mr. Daly). For the purposes of making the option calculation for 2008, the following assumptions were made: (a) expected life (years) — 10 (for the options issued to Mr. Daly); expected life (years) — 6 (for the options issued to Mr. Greenspan); (b) volatility — 82.87% (for the options issued to Mr. Daly); volatility — 105.41% (for the options issued to Mr. Greenspan); (c) dividend yield — none; and (d) discount rate — 3.89% (for the options issued to Mr. Daly); discount rate — 2.83% (for the options issued to Mr. Greenspan). We excluded the assumed forfeiture rate for the purposes of the calculations in the table. | |
(2) | Mr. Daly served as our Chief Executive Officer during 2009. Mr. Daly is currently our Chief Financial Officer and Chief Operating Officer. | |
(3) | Pursuant to our bankruptcy plan, our management was granted shares of our common stock. Mr. Daly received 600,000 shares of common stock, of which 300,000 shares vested immediately and 150,000 shares vest on each successive one-year anniversary; provided that if we do not renew Mr. Daly’s employment agreement at the end of its term or in the event of a change of control, any unvested shares will automatically vest. | |
(4) | Consists of an option issued in connection with Mr. Daly joining our board of directors in November 2009 to purchase 50,000 shares of common stock at an exercise price of $0.75 per share. | |
(5) | During 2008, Mr. Daly was granted options to purchase 450,000 shares of common stock. These options were terminated in our bankruptcy and are no longer outstanding. | |
(6) | Mr. Greenspan served as our Chief Financial Officer until September 2009. | |
(7) | During 2008, Mr. Greenspan was granted options to purchase 200,000 shares of common stock. These options were terminated in our bankruptcy and are no longer outstanding. | |
(8) | Consists of an option to purchase 100,000 shares of common stock at an exercise price of $0.75 per share of which 50,000 shares vest on October 6, 2010 and 50,000 shares vest if our BLA is approved by the FDA. The grant date fair value in the table above excludes the 50,000 shares that would vest if our BLA is approved by the FDA as that portion of the option is subject to performance conditions and is not considered to be “probable” pursuant to FASB ASC Topic 718. The full grant date fair value of the option assuming the performance conditions are met is $32,234. | |
(9) | Consists of an option to purchase 60,000 shares of common stock at an exercise price of $0.75 per share of which 30,000 shares vest on October 6, 2010 and 30,000 shares vest if our BLA is approved by the FDA. The grant date fair value in the table above excludes the 30,000 shares that would vest if our BLA is approved by the FDA as that portion of the option is subject to performance conditions and is not considered to be “probable” pursuant to FASB ASC Topic 718. The full grant date fair value of the option assuming the performance conditions are met is $19,341. |
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Number of | Number of | |||||||||||||||||||||||
Securities | Securities | |||||||||||||||||||||||
Underlying | Underlying | Number of | Market value of | |||||||||||||||||||||
Unexercised | Unexercised | shares of stock | shares of stock | |||||||||||||||||||||
Options | Options | Option Exercise | that have not | that have not | ||||||||||||||||||||
(#) | (#) | Price | Option Expiration | vested | vested | |||||||||||||||||||
Name | Exercisable | Unexercisable | ($) | Date | (#) | ($) | ||||||||||||||||||
Declan Daly | 50,000 | — | 0.75 | 11/20/2019 | — | — | ||||||||||||||||||
300,000 | 345,000 | (1) | ||||||||||||||||||||||
Todd Greenspan | — | — | — | — | — | — | ||||||||||||||||||
John Maslowski | — | 100,000 | (2) | 0.75 | 10/6/2019 | — | — | |||||||||||||||||
Karen Donhauser | — | 60,000 | (3) | 0.75 | 10/6/2019 | — | — |
(1) | Based on the closing price of our common stock of $1.15 on December 31, 2009. | |
(2) | Consists of an option to purchase 100,000 shares of common stock at an exercise price of $0.75 per share of which 50,000 shares vest on October 6, 2010 and 50,000 shares vest if our BLA is approved by the FDA. | |
(3) | Consists of an option to purchase 60,000 shares of common stock at an exercise price of $0.75 per share of which 30,000 shares vest on October 6, 2010 and 30,000 shares vest if our BLA is approved by the FDA. |
Fees Earned or Paid | All other | |||||||||||||||
in Cash | Option Awards | compensation | Total | |||||||||||||
Name | ($) | ($) (1) | ($) | ($) | ||||||||||||
Post-bankruptcy directors | ||||||||||||||||
David Pernock | 12,639 | 151,537 | (3) | 15,000 | (4) | 179,176 | ||||||||||
Paul Hopper (2) | 16,250 | 61,866 | (5) | 78,116 | ||||||||||||
Robert Langer | 13,333 | 61,866 | (5) | 16,667 | (4) | 91,866 | ||||||||||
Kelvin Moore | 16,250 | 61,866 | (5) | 78,116 | ||||||||||||
Declan Daly | (6) | (6) | (6) | |||||||||||||
Pre-bankruptcy directors (7) | ||||||||||||||||
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Fees Earned or Paid | All other | |||||||||||||||
in Cash | Option Awards | compensation | Total | |||||||||||||
Name | ($) | ($)(1) | ($) | ($) | ||||||||||||
Steven Morrell | 29,015 | |||||||||||||||
Kenneth A. Selzer | 28,308 | |||||||||||||||
Nicholas L. Teti | 95,154 | |||||||||||||||
Henry Y.L. Toh | 29,015 | |||||||||||||||
Terry E. Vandewarker | 37,508 | |||||||||||||||
Marshall G. Webb | 35,385 |
(1) | Represents the full grant date fair value of the option grant calculated in accordance with FASB ASC Topic 718. For the purposes of making the option calculation, the following assumptions were made: (a) expected life (years) — 2.5 (for the options issued to Messrs. Hopper, Langer and Moore); expected life (years) — 3.0 (for the options issued to Mr. Pernock); (b) volatility — 66.75%; (c) dividend yield — none; and (d) discount rate — 1.36% (for the options issued to Messrs. Hopper, Langer and Moore); discount rate — 1.45% (for the options issued to Mr. Pernock). | |
(2) | Effective November 11, 2010, Paul Hopper gave his resignation to the Board of Directors. | |
(3) | As of December 31, 2009, Mr. Pernock held options to purchase an aggregate of 450,000 shares of our common stock with an exercise price of $0.75 per share. | |
(4) | Consists of consulting fees. | |
(5) | As of December 31, 2009, Messrs. Hopper, Langer and Moore each held an option to purchase 200,000 shares of our common stock with an exercise price of $0.75 per share. | |
(6) | See “Executive Officer Compensation — Summary Compensation Table — 2009.” | |
(7) | All options issued to our pre-bankruptcy directors were terminated in the bankruptcy and are no longer outstanding. No options were issued to these directors in 2009. |
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• | each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock; | ||
• | each of our named executive officers and directors; and | ||
• | all of our officers and directors as a group. |
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Common stock | ||||||||
Beneficially | Percent of | |||||||
Name of Beneficial Owner | Owned(1) | Class(2) | ||||||
Declan Daly | 720,000 | (3) | 3.5 | % | ||||
David Pernock | 1,024,999 | (4) | 5.0 | % | ||||
Kelvin Moore | 200,000 | (5) | 1.0 | % | ||||
Robert Langer | 200,000 | (5) | 1.0 | % | ||||
Marc Mazur | 100,000 | (6) | * | |||||
George Korkos | 100,000 | (7) | * | |||||
John Maslowski | 100,000 | (8) | * | |||||
Karen Donhauser | 60,000 | (9) | * | |||||
Todd Greenspan (10) | — | |||||||
All Executive Officers and Directors as a Group (7 persons) | 2,344,999 | (11) | 10.6 | % | ||||
Five percent or more of shareholders | ||||||||
James E. Flynn (12) | 1,800,000 | 8.1 | % |
(1) | Beneficial ownership is determined in accordance with Rule 13d-3 under the Exchange Act. Unless otherwise noted, all listed shares of common stock are owned of record by each person or entity named as beneficial owner and that person or entity has sole voting and dispositive power with respect to the shares of common stock owned by each of them. As to each person or entity named as beneficial owners, that person’s or entity’s percentage of ownership is determined based on the assumption that any options or convertible securities held by such person or entity which are exercisable or convertible within 60 days of the date of this report have been exercised or converted, as the case may be. | |
(2) | Based upon 20,375,343 shares of common stock outstanding as of November 22, 2010. | |
(3) | Includes 50,000 shares underlying an option exercisable at $0.75 per share and 70,000 shares underlying an option exercisable at $0.55 per share. | |
(4) | Includes: (i) 450,000 shares underlying an option exercisable at $0.75 per share; and (ii) 574,999 shares underlying an option exercisable at $1.08 per share (which represents the vested portion, plus the shares that will vest within 60 days of the date of this filing, of an option to purchase 1,650,000 shares issued in connection with Mr. Pernock’s employment agreement). | |
(5) | Consists of 200,000 shares underlying an option exercisable at $0.75 per share. | |
(6) | Consists of 100,000 shares underlying an option exercisable at $1.04 per share. In addition, Mr. Mazur holds an option to purchase 100,000 shares at $1.04 per share, which is exercisable in April 2011. | |
(7) | Consists of 100,000 shares underlying an option exercisable at $0.82 per share. In addition, Dr. Korkos holds an option to purchase 100,000 shares at $0.82 per share, which is exercisable in July 2011. | |
(8) | Consists of 100,000 shares underlying an option exercisable at $0.75 per share. | |
(9) | Consists of 60,000 shares underlying an option exercisable at $0.75 per share. | |
(10) | Mr. Greenspan ceased providing services to the company on the effective date of the bankruptcy in September 2009. | |
(11) | Includes options to purchase 1,744,999 shares of common stock. | |
(12) | Reflects the beneficial ownership of the reported entities and their affiliates as reported in the Schedule 13G filed March 2, 2010 and their Form 4 filed August 18, 2010. The business address for James E. Flynn, Deerfield Capital, L.P., Deerfield |
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• | 5,677,000 shares of common stock issuable upon the exercise of options issued pursuant to our current stock option plan and outside our stock option plan; | ||
• | 5,291,000 shares of common stock issuable upon the conversion of the Series A Preferred; | ||
• | 7,733,333 shares of common stock issuable upon the conversion of the Series B Preferred; | ||
• | 1,354,163 shares of common stock for issuance upon exercise of the Class A warrants; 1,354,165 shares of common stock for issuance upon exercise of the Class B warrants; and 541,667 shares of common stock for issuance upon exercise of the warrants issued to the placement agents for our Series A Preferred offering; | ||
• | 8,291,885 shares of common stock issuable upon exercise of common stock purchase warrants issued in the March 2010 offering and 507,666 shares of common stock underlying the warrants issued to the placement agents in such offering; and | ||
• | 7,733,333 shares of common stock issuable upon exercise of common stock purchase warrants issued in the July, September, October and November 2010 offerings and 590,657 shares of common stock underlying the warrants issued to the placement agents in such offerings. |
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• | ten business days following a public announcement that a person or group of affiliated or associated persons has acquired beneficial ownership of 15% or more of our outstanding common stock (20%, in the case of certain institutional investors) other than as a result of repurchases of stock by us or certain inadvertent actions by institutional or certain other stockholders; or | ||
• | ten business days (or such later date as the Board shall determine) following the commencement of a tender offer or exchange offer that would result in a person or group becoming an acquiring person. |
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• | 12.5% interest payable quarterly in cash or, at our option, 15% payable in kind by capitalizing such unpaid amount and adding it to the principal as of the date it was due; | ||
• | mature June 1, 2012; | ||
• | at any time prior to the maturity date, we may redeem any portion of the outstanding principal of the New Notes in cash at 125% of the stated face value of the New Notes; provided that we will be obligated to redeem all outstanding New Notes upon the following events: (a) we or our subsidiary, Fibrocell Technologies, Inc. (formerly, Isolagen Technologies, Inc.) successfully complete a capital campaign raising in excess of $10,000,000; or (b) we or our subsidiary, Fibrocell Technologies, Inc., are acquired by, or sell a majority stake to, an outside party; | ||
• | the New Notes contain customary representations, warranties and covenants, including a covenant that we and our subsidiary, Fibrocell Technologies, Inc., shall be prohibited from the incurrence of additional debt without obtaining the consent of 66 2/3% of the New Note holders. |
Anti-Takeover Effects of Provisions of Delaware Law |
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• | up to 5,076,664 shares of common stock issued in our March 2, 2010 Private Offering; and | ||
• | up to 8,291,885 shares of common stock underlying common stock purchase warrants issued in our March 2, 2010 Private Offering and up to 507,666 shares of common stock underlying the warrants issued to the placement agents in such offering. |
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No. of | ||||||||||||||||||||||||
Shares | Approximate | |||||||||||||||||||||||
Issuable | Percentage | |||||||||||||||||||||||
No. of | Upon | of Issued and | Number of | Number Of | ||||||||||||||||||||
Shares of | Exercise of | Outstanding | Shares | Shares To | Approximate | |||||||||||||||||||
Common | the | Shares | Registered | Be | Percentage | |||||||||||||||||||
Stock | Warrants | Beneficially | and To Be | Beneficially | of Shares To | |||||||||||||||||||
Name of | Owned | Owned Prior | Owned Prior | Sold In | Owned | Be Owned | ||||||||||||||||||
Selling | Prior to the | to the | to the | This | After The | After the | ||||||||||||||||||
Stockholders | Offering (1) | Offering | Offering | Offering | Offering | Offering | ||||||||||||||||||
Straus Healthcare Partners, L.P. | 1,045,289 | (2) | 828,610 | (2) | 8.65 | % | 877,777 | 996,122 | 4.69 | % | ||||||||||||||
Margus Ehatamm & Sarah Ehatamm | 45,000 | (3) | 57,667 | (3) | * | 52,667 | 50,000 | * | ||||||||||||||||
Deerfield Special Situations Fund, LP | 708,000 | 1,156,400 | 8.66 | % | 1,864,400 | — | — | |||||||||||||||||
Deerfield Special Situations Fund Intl | 1,292,000 | 2,110,267 | 15.13 | %(4) | 3,402,267 | — | — | |||||||||||||||||
MOG Capital, LLC (5) | 2,333,334 | (6) | 1,922,222 | (6) | 19.09 | % | 1,755,556 | 2,500,000 | 10.93 | % | ||||||||||||||
Robert Sagarino | 365,962 | 270,044 | 3.08 | % | 435,377 | 200,629 | * | |||||||||||||||||
Stephen M. Karlya | 6,100 | 9,963 | * | 16,063 | — | — | ||||||||||||||||||
Fergus McGovern | 768,628 | 544,444 | 6.28 | % | 877,777 | 435,295 | 2.14 | % | ||||||||||||||||
Robert Siegal | 33,333 | 54,444 | * | 87,777 | — | — | ||||||||||||||||||
Peter Bowden | 697,752 | 326,667 | 4.95 | % | 526,667 | 497,752 | 2.44 | % | ||||||||||||||||
Denis Bowden | 688,589 | 326,667 | 4.90 | % | 526,667 | 488,589 | 2.40 | % | ||||||||||||||||
Jerry and Janet Magro | 19,700 | 22,867 | * | 36,867 | 5,700 | * | ||||||||||||||||||
Raymond Cincotti | 14,000 | 22,867 | * | 36,867 | — | — | ||||||||||||||||||
David Boral | 12,567 | 393,890 | (7) | 1.96 | % | 93,378 | 313,079 | 1.51 | % | |||||||||||||||
David Batista | 33,333 | 805,764 | (8) | 3.96 | % | 281,326 | 679,646 | 3.23 | % | |||||||||||||||
George Carris | 33,333 | 1,054,134 | (9) | 5.07 | % | 341,610 | 745,858 | 3.53 | % | |||||||||||||||
Jane Scotti | 283,333 | (10) | 410,000 | (10) | 3.32 | % | 526,667 | 166,666 | * |
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No. of | ||||||||||||||||||||||||
Shares | Approximate | |||||||||||||||||||||||
Issuable | Percentage | |||||||||||||||||||||||
No. of | Upon | of Issued and | Number of | Number Of | ||||||||||||||||||||
Shares of | Exercise of | Outstanding | Shares | Shares To | Approximate | |||||||||||||||||||
Common | the | Shares | Registered | Be | Percentage | |||||||||||||||||||
Stock | Warrants | Beneficially | and To Be | Beneficially | of Shares To | |||||||||||||||||||
Name of | Owned | Owned Prior | Owned Prior | Sold In | Owned | Be Owned | ||||||||||||||||||
Selling | Prior to the | to the | to the | This | After The | After the | ||||||||||||||||||
Stockholders | Offering (1) | Offering | Offering | Offering | Offering | Offering | ||||||||||||||||||
Super-Tek, Inc. (11) | 271,333 | 443,177 | 3.43 | % | 714,510 | — | — | |||||||||||||||||
Bowden Transportation Services Ltd. | 1,151,548 | 217,777 | 6.65 | % | 351,110 | 1,018,215 | 5.00 | % | ||||||||||||||||
Anthony V. Milone | 73,333 | 119,777 | * | 193,110 | — | — | ||||||||||||||||||
Anthony Milone Profit Sharing Plan | 60,000 | 98,000 | * | 158,000 | — | — | ||||||||||||||||||
David Speciale | 6,667 | 10,889 | * | 17,556 | — | — | ||||||||||||||||||
Margery Scotti | 1,368,709 | (12) | 551,112 | (12) | 9.07 | % | 351,110 | 1,568,710 | 7.15 | % | ||||||||||||||
Gavin Scotti | 216,666 | (13) | 501,110 | (13) | 3.38 | % | 351,110 | 366,666 | 1.77 | % |
* | Stockholder owns less than 1% | |
(1) | The Selling Stockholders and any broker-dealers or agents that are involved in selling these shares are deemed to be underwriters within the meaning of the Securities Act for such sales. An underwriter is a person who has purchased shares from an issuer with a view towards distributing the shares to the public. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be considered to be underwriting commissions or discounts under the Securities Act. | |
(2) | The number of shares listed consists of (i) 476,956 shares of common stock (including 333,333 shares of common stock that were acquired in our March 2, 2010 Private Offering being registered in this prospectus), and (ii) 568,333 shares underlying our Series A Preferred stock. The number of warrants listed consists of (i) warrants to purchase 544,444 shares of common stock that were acquired in our March 2, 2010 Private Offering being registered in this prospectus, and (ii) warrants to purchase 284,166 shares acquired in our Series A Preferred stock offering. Ravinder Holder, general partner of the selling stockholder, holds voting and dispositive power over the securities held by the selling stockholder. | |
(3) | The number of shares listed includes 25,000 shares underlying our series B Preferred stock. The number of warrants listed includes warrants to purchase 25,000 shares of common stock acquired in our July through November 2010 Private Offerings. | |
(4) | James E. Flynn exercises voting and dispositive power over the securities held by Deerfield Special Situations Fund, L.P. and Deerfield Special Situations Fund International, Limited. The warrants issued in the March 2010 offering provide that at no time may a holder exercise the warrants if the number of shares of common stock to be issued pursuant to such exercise would exceed, when aggregated with all other shares of common stock owned by such holder at such time, the number of shares of common stock which would result in such holder beneficially owning (as determined in accordance with Section 13(d) of the Exchange Act and the rules thereunder) in excess of 9.98% of the then issued and outstanding shares of our common stock; provided, however, that upon the holder providing us with 61 days notice that such holder would like to waive this provision then this provision will be of no force or effect; provided, further, that this provision will be of no force or effect during the 61 days immediately preceding the expiration of the warrants. | |
(5) | MOG Capital, LLC is a registered broker dealer. The registrable securities were acquired in the ordinary course of business and not as compensation for investment banking services. Accordingly, the selling security holder is an “underwriter” within the meaning of Section 2(a)(11) of the Securities Act under the interpretations of the SEC. Jason Adler, in his capacity as managing member of MOG Capital, LLC has voting and dispositive power over the securities held by MOG Capital, LLC. Mr. Adler disclaims beneficial ownership of such securities. | |
(6) | The number of shares listed consists of (i) 666,667 shares of common stock that were acquired in our March 2, 2010 Private Offering being registered in this prospectus, and (ii) 1,666,667 shares underlying our Series A Preferred stock. The number of warrants listed consists of (i) warrants to purchase 1,088,889 shares of common |
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stock that were acquired in our March 2, 2010 Private Offering being registered in this prospectus, and (ii) warrants to purchase 833,333 shares acquired in our Series A Preferred stock offering. | ||
(7) | Consists of (i) warrants to purchase 20,526 shares of common stock that were acquired in our March 2, 2010 Private Offering being registered in this prospectus, (ii) warrants to purchase 60,285 shares of common stock being registered in this prospectus, (iii) an option to purchase 100,000 shares of common stock at $0.75 per share, (iv) warrants to purchase 135,416 shares of common stock and (v) warrants to purchase 77,663 shares of common stock. The warrants set forth in (ii) and (v) were issued by us to our placement agent in connection with the March 2010 offering and our July through November 2010 offerings. Mr. Boral is an affiliate of the placement agent. | |
(8) | Consists of (i) warrants to purchase 54,444 shares of common stock that were acquired in our March 2, 2010 Private Offering being registered in this prospectus, (ii) warrants to purchase 193,549 shares of common stock being registered in this prospectus, (iii) an option to purchase 400,000 shares of common stock at $0.75 per share, (iv) warrants to purchase 135,416 shares of common stock and (v) warrants to purchase 144,230 shares of common stock. The warrants set forth in (ii) and (v) were issued by us to our placement agent in connection with the March 2010 offering and our July through November 2010 offerings. Mr. Batista is an affiliate of the placement agent. | |
(9) | Consists of (i) warrants to purchase 54,444 shares of common stock that were acquired in our March 2, 2010 Private Offering being registered in this prospectus, (ii) warrants to purchase 253,833 shares of common stock being registered in this prospectus, (iii) an option to purchase 300,000 shares of common stock at $0.75 per share, (iv) warrants to purchase 270,834 shares of common stock and (v) warrants to purchase 175,024 shares of common stock. The warrants set forth in (ii) and (v) were issued by us to our placement agent in connection with the March 2010 offering and our July through November 2010 offerings. Mr. Carris is an affiliate of the placement agent. | |
(10) | The number of shares listed includes 83,333 shares underlying our Series B Preferred stock. The number of warrants listed includes warrants to purchase 83,333 shares of common stock acquired in our July through November 2010 Private Offerings. | |
(11) | Peter Bowden holds voting and dispositive power over the securities held by the selling stockholder. | |
(12) | The number of shares listed includes (i) 133,333 shares of common stock that were acquired in our March 2, 2010 Private Offering being registered in this prospectus, (ii) 166,667 shares underlying our Series A Preferred stock and (iii) 250,000 shares underlying our Series B Perferred stock. The number of warrants listed consists of (i) warrants to purchase 217,777 shares of common stock that were acquired in our March 2, 2010 Private Offering being registered in this prospectus, (ii) warrants to purchase 83,334 shares acquired in our Series A Preferred stock offering and (iii) 250,000 shares acquired in our July through November 2010 Private Offerings. | |
(13) | The number of shares listed includes 83,333 shares underlying our Series B Preferred stock. The number of warrants listed includes (i) warrants to purchase 83,333 shares of common stock acquired in our July through November 2010 Private Offerings and (ii) an option to purchase 200,000 shares of common stock at $0.75 per share. |
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• | ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; | ||
• | block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; | ||
• | purchases by a broker-dealer as principal and resale by the broker-dealer for its account; | ||
• | an exchange distribution in accordance with the rules of the applicable exchange; | ||
• | privately negotiated transactions; | ||
• | settlement of short sales entered into after the effective date of the registration statement of which this prospectus is a part; | ||
• | in transactions through broker-dealers that agree with the Selling Stockholders to sell a specified number of such shares at a stipulated price per share; | ||
• | through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; | ||
• | a combination of any such methods of sale; or | ||
• | any other method permitted pursuant to applicable law. |
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(A Development Stage Company)
PAGE | ||||
F-2 | ||||
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F-1
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Exton, Pennsylvania
Houston, Texas
March 31, 2010
F-2
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(A Development Stage Company)
Successor | Predecessor | ||||||||
December 31, | December 31, | ||||||||
2009 | 2008 | ||||||||
Assets | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 1,362,488 | $ | 2,854,300 | |||||
Accounts receivable, net | 269,759 | 338,850 | |||||||
Inventory, net | 226,032 | 467,246 | |||||||
Prepaid expenses | 524,814 | 738,652 | |||||||
Other current assets | — | 624,365 | |||||||
Current assets of discontinued operations, net | 210 | 29,992 | |||||||
Total current assets | 2,383,303 | 5,053,405 | |||||||
Other assets | 250 | — | |||||||
Intangible assets | 6,340,656 | — | |||||||
Total assets | $ | 8,724,209 | $ | 5,053,405 | |||||
Liabilities, Redeemable Preferred Stock, Shareholders’ Deficit and Noncontrolling Interest | |||||||||
Current liabilities: | |||||||||
Current debt | $ | 47,795 | $ | 90,072,286 | |||||
Accounts payable | 245,023 | 415,909 | |||||||
Accrued expenses | 536,855 | 1,647,713 | |||||||
Deferred revenue | — | 7,522 | |||||||
Current liabilities of discontinued operations | 7,405 | 209,458 | |||||||
Total current liabilities | 837,078 | 92,352,888 | |||||||
Long-term debt | 6,000,060 | — | |||||||
Deferred tax liability | 2,500,000 | — | |||||||
Warrant liability | 635,276 | — | |||||||
Other long-term liabilities | 369,210 | 1,171,638 | |||||||
Total liabilities | 10,341,624 | 93,524,526 | |||||||
Commitments and contingencies (see Note 13) | |||||||||
Redeemable preferred stock series A, $1,000 par value; 9,000 shares authorized; 3,250 shares issued | 2,511,070 | — | |||||||
Equity | |||||||||
Fibrocell Science, Inc. shareholders’ deficit: | |||||||||
Predecessor common stock, $.001 par value; 100,000,000 shares authorized | — | 41,639 | |||||||
Successor common stock, $.001 par value; 250,000,000 shares authorized | 14,692 | — | |||||||
Additional paid-in capital | 508,347 | 131,341,227 | |||||||
Predecessor treasury stock, at cost, 4,000,000 shares | — | (25,974,000 | ) | ||||||
Accumulated deficit during development stage | (5,049,999 | ) | (194,057,337 | ) | |||||
Total Fibrocell Science, Inc. shareholders’ deficit | (4,526,960 | ) | (88,648,471 | ) | |||||
Noncontrolling interest | 398,475 | 177,350 | |||||||
Total deficit and noncontrolling interest | (4,128,485 | ) | (88,471,121 | ) | |||||
Total liabilities, redeemable preferred stock, shareholders’ deficit and noncontrolling interest | $ | 8,724,209 | $ | 5,053,405 | |||||
F-3
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(A Development Stage Company)
Successor | Predecessor | Predecessor | Predecessor | ||||||||||||||
Cumulative period | |||||||||||||||||
from December 28, | |||||||||||||||||
For the four | For the eight | 1995 (date of | |||||||||||||||
months ended | months ended | For the year ended | inception) to | ||||||||||||||
December 31, 2009 | August 31, 2009 | December 31, 2008 | August 31, 2009 | ||||||||||||||
Revenue | |||||||||||||||||
Product sales | $ | 329,941 | $ | 538,620 | $ | 1,104,885 | $ | 4,818,994 | |||||||||
License fees | — | — | — | 260,000 | |||||||||||||
Total revenue | 329,941 | 538,620 | 1,104,885 | 5,078,994 | |||||||||||||
Cost of sales | 182,048 | 424,139 | 602,511 | 2,279,335 | |||||||||||||
Gross profit | 147,893 | 114,481 | 502,374 | 2,799,659 | |||||||||||||
Impairment of long-lived assets | — | — | 6,732,754 | 6,732,754 | |||||||||||||
Selling, general and administrative expenses | 2,708,356 | 3,427,374 | 8,499,307 | 78,072,766 | |||||||||||||
Research and development expenses | 1,823,196 | 2,107,718 | 10,173,117 | 56,269,869 | |||||||||||||
Operating loss | (4,383,659 | ) | (5,420,611 | ) | (24,902,804 | ) | (138,275,730 | ) | |||||||||
Other income (expense) | |||||||||||||||||
Interest income | 1 | 248 | 181,514 | 6,989,539 | |||||||||||||
Reorganization items, net | (72,477 | ) | 73,538,984 | — | 73,538,984 | ||||||||||||
Other income/(expense) | — | (6,243 | ) | — | 316,338 | ||||||||||||
Warrant expense | (319,084 | ) | — | — | |||||||||||||
Interest expense | (247,174 | ) | (2,232,138 | ) | (3,899,239 | ) | (18,790,218 | ) | |||||||||
Income/(loss) from continuing operations before income taxes | (5,022,393 | ) | 65,880,240 | (28,620,529 | ) | (76,221,087 | ) | ||||||||||
Income tax benefit | — | — | — | 190,754 | |||||||||||||
Income/(loss) from continuing operations | (5,022,393 | ) | 65,880,240 | (28,620,529 | ) | (76,030,333 | ) | ||||||||||
Income/(loss) from discontinued operations, net of tax | (12,113 | ) | 46,923 | (4,471,326 | ) | (41,091,311 | ) | ||||||||||
Net (loss)/income | (5,034,506 | ) | 65,927,163 | (33,091,855 | ) | (117,121,644 | ) | ||||||||||
Deemed dividend associated with beneficial conversion | — | — | — | (11,423,824 | ) | ||||||||||||
Preferred stock dividends | — | — | — | (1,589,861 | ) | ||||||||||||
Plus/(less): Net loss/(income) attributable to noncontrolling interest | (15,493 | ) | (205,632 | ) | 1,680,676 | 1,799,523 | |||||||||||
Net income/(loss) attributable to Fibrocell Science, Inc. common shareholders | $ | (5,049,999 | ) | $ | 65,721,531 | $ | (31,411,179 | ) | $ | (128,335,806 | ) | ||||||
Per share information: | |||||||||||||||||
Income/(loss) from continuing operations—basic and diluted | $ | (0.35 | ) | $ | 1.72 | $ | (0.72 | ) | $ | (4.30 | ) | ||||||
Loss from discontinued operations—basic and diluted | — | — | (0.12 | ) | (2.32 | ) | |||||||||||
Income attributable to noncontrolling interest | — | — | — | 0.10 | |||||||||||||
Deemed dividend associated with beneficial conversion of preferred stock | — | — | — | (0.65 | ) | ||||||||||||
Preferred stock dividends | — | — | — | (0.09 | ) | ||||||||||||
Net income/(loss) attributable to common shareholders per common share—basic and diluted | $ | (0.35 | ) | $ | 1.72 | $ | (0.84 | ) | $ | (7.26 | ) | ||||||
Weighted average number of basic and diluted common shares outstanding | 14,380,381 | 38,230,886 | 37,639,492 | 17,678,219 | |||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-4
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(A Development Stage Company)
Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||||
Series A | Series B | Accumulated | Deficit | Total | ||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Preferred Stock | Common Stock | Additional | Treasury Stock | Other | During | Shareholders’ | |||||||||||||||||||||||||||||||||||||||||
Number of | Number of | Number of | Paid-In | Number of | Comprehensive | Development | Equity | |||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Capital | Shares | Amount | Income | Stage | (Deficit) | |||||||||||||||||||||||||||||||||||||
Issuance of common stock for cash on 12/28/95 | — | $ | — | — | $ | — | 2,285,291 | $ | 2,285 | $ | (1,465 | ) | — | $ | — | $ | — | $ | — | $ | 820 | |||||||||||||||||||||||||||
Issuance of common stock for cash on 11/7/96 | — | — | — | — | 11,149 | 11 | 49,989 | — | — | — | — | 50,000 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock for cash on 11/29/96 | — | — | — | — | 2,230 | 2 | 9,998 | — | — | — | — | 10,000 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock for cash on 12/19/96 | — | — | — | — | 6,690 | 7 | 29,993 | — | — | — | — | 30,000 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock for cash on 12/26/96 | — | — | — | — | 11,148 | 11 | 49,989 | — | — | — | — | 50,000 | ||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | (270,468 | ) | (270,468 | ) | ||||||||||||||||||||||||||||||||||
Balance, 12/31/96 (Predecessor) | — | $ | — | — | $ | — | 2,316,508 | $ | 2,316 | $ | 138,504 | — | $ | — | $ | — | $ | (270,468 | ) | $ | (129,648 | ) | ||||||||||||||||||||||||||
Issuance of common stock for cash on 12/27/97 | — | — | — | — | 21,182 | 21 | 94,979 | — | — | — | — | 95,000 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock for services on 9/1/97 | — | — | — | — | 11,148 | 11 | 36,249 | — | — | — | — | 36,260 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock for services on 12/28/97 | — | — | — | — | 287,193 | 287 | 9,968 | — | — | — | — | 10,255 | ||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | (52,550 | ) | (52,550 | ) | ||||||||||||||||||||||||||||||||||
Balance, 12/31/97 (Predecessor) | — | $ | — | — | $ | — | 2,636,031 | $ | 2,635 | $ | 279,700 | — | $ | — | $ | — | $ | (323,018 | ) | $ | (40,683 | ) |
F-5
Table of Contents
Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||||
Series A | Series B | Accumulated | Deficit | Total | ||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Preferred Stock | Common Stock | Additional | Treasury Stock | Other | During | Shareholders’ | |||||||||||||||||||||||||||||||||||||||||
Number of | Number of | Number of | Paid-In | Number of | Comprehensive | Development | Equity | |||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Capital | Shares | Amount | Income | Stage | (Deficit) | |||||||||||||||||||||||||||||||||||||
Issuance of common stock for cash on 8/23/98 | — | $ | — | — | $ | — | 4,459 | $ | 4 | $ | 20,063 | — | $ | — | $ | — | $ | — | $ | 20,067 | ||||||||||||||||||||||||||||
Repurchase of common stock on 9/29/98 | — | — | — | — | — | — | — | 2,400 | (50,280 | ) | — | — | (50,280 | ) | ||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | (195,675 | ) | (195,675 | ) | ||||||||||||||||||||||||||||||||||
Balance, 12/31/98 (Predecessor) | — | $ | — | — | $ | — | 2,640,490 | $ | 2,639 | $ | 299,763 | 2,400 | $ | (50,280 | ) | $ | — | $ | (518,693 | ) | $ | (266,571 | ) | |||||||||||||||||||||||||
Issuance of common stock for cash on 9/10/99 | — | — | — | — | 52,506 | 53 | 149,947 | — | — | — | — | 150,000 | ||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | (1,306,778 | ) | (1,306,778 | ) | ||||||||||||||||||||||||||||||||||
Balance, 12/31/99 (Predecessor) | — | $ | — | — | $ | — | 2,692,996 | $ | 2,692 | $ | 449,710 | 2,400 | $ | (50,280 | ) | $ | — | $ | (1,825,471 | ) | $ | (1,423,349 | ) | |||||||||||||||||||||||||
Issuance of common stock for cash on 1/18/00 | — | — | — | — | 53,583 | 54 | 1,869 | — | — | — | — | 1,923 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock for services on 3/1/00 | — | — | — | — | 68,698 | 69 | (44 | ) | — | — | — | — | 25 | |||||||||||||||||||||||||||||||||||
Issuance of common stock for services on 4/4/00 | — | — | — | — | 27,768 | 28 | (18 | ) | — | — | — | — | 10 | |||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | (807,076 | ) | (807,076 | ) | ||||||||||||||||||||||||||||||||||
Balance, 12/31/00 (Predecessor) | — | $ | — | — | $ | — | 2,843,045 | $ | 2,843 | $ | 451,517 | 2,400 | $ | (50,280 | ) | $ | — | $ | (2,632,547 | ) | $ | (2,228,467 | ) |
F-6
Table of Contents
Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||||
Series A | Series B | Accumulated | Deficit | Total | ||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Preferred Stock | Common Stock | Additional | Treasury Stock | Other | During | Shareholders’ | |||||||||||||||||||||||||||||||||||||||||
Number of | Number of | Number of | Paid-In | Number of | Comprehensive | Development | Equity | |||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Capital | Shares | Amount | Income | Stage | (Deficit) | |||||||||||||||||||||||||||||||||||||
Issuance of common stock for services on 7/1/01 | — | $ | — | — | $ | — | 156,960 | $ | 157 | $ | (101 | ) | — | $ | — | $ | — | $ | — | $ | 56 | |||||||||||||||||||||||||||
Issuance of common stock for services on 7/1/01 | — | — | — | — | 125,000 | 125 | (80 | ) | — | — | — | — | 45 | |||||||||||||||||||||||||||||||||||
Issuance of common stock for capitalization of accrued salaries on 8/10/01 | — | — | — | — | 70,000 | 70 | 328,055 | — | — | — | — | 328,125 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock for conversion of convertible debt on 8/10/01 | — | — | — | — | 1,750,000 | 1,750 | 1,609,596 | — | — | — | — | 1,611,346 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock for conversion of convertible shareholder notes payable on 8/10/01 | — | — | — | — | 208,972 | 209 | 135,458 | — | — | — | — | 135,667 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock for bridge financing on 8/10/01 | — | — | — | — | 300,000 | 300 | (192 | ) | — | — | — | — | 108 | |||||||||||||||||||||||||||||||||||
Retirement of treasury stock on 8/10/01 | — | — | — | — | — | — | (50,280 | ) | (2,400 | ) | 50,280 | — | — | — | ||||||||||||||||||||||||||||||||||
Issuance of common stock for net assets of Gemini on 8/10/01 | — | — | — | — | 3,942,400 | 3,942 | (3,942 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Issuance of common stock for net assets of AFH on 8/10/01 | — | — | — | — | 3,899,547 | 3,900 | (3,900 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Issuance of common stock for cash on 8/10/01 | — | — | — | — | 1,346,669 | 1,347 | 2,018,653 | — | — | — | — | 2,020,000 | ||||||||||||||||||||||||||||||||||||
Transaction and fund raising expenses on 8/10/01 | — | — | — | — | — | — | (48,547 | ) | — | — | — | — | (48,547 | ) | ||||||||||||||||||||||||||||||||||
Issuance of common stock for services on 8/10/01 | — | — | — | — | 60,000 | 60 | — | — | — | — | — | 60 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock for cash on 8/28/01 | — | — | — | — | 26,667 | 27 | 39,973 | — | — | — | — | 40,000 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock for services on 9/30/01 | — | — | — | — | 314,370 | 314 | 471,241 | — | — | — | — | 471,555 |
F-7
Table of Contents
Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||||
Series A | Series B | Accumulated | Deficit | Total | ||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Preferred Stock | Common Stock | Additional | Treasury Stock | Other | During | Shareholders’ | |||||||||||||||||||||||||||||||||||||||||
Number of | Number of | Number of | Paid-In | Number of | Comprehensive | Development | Equity | |||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Capital | Shares | Amount | Income | Stage | (Deficit) | |||||||||||||||||||||||||||||||||||||
Uncompensated contribution of services—3rd quarter | — | $ | — | — | $ | — | — | $ | — | $ | 55,556 | — | $ | — | $ | — | $ | — | $ | 55,556 | ||||||||||||||||||||||||||||
Issuance of common stock for services on 11/1/01 | — | — | — | — | 145,933 | 146 | 218,754 | — | — | — | — | 218,900 | ||||||||||||||||||||||||||||||||||||
Uncompensated contribution of services—4th quarter | — | — | — | — | — | — | 100,000 | — | — | — | — | 100,000 | ||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | (1,652,004 | ) | (1,652,004 | ) | ||||||||||||||||||||||||||||||||||
Balance, 12/31/01 (Predecessor) | — | $ | — | — | $ | — | 15,189,563 | $ | 15,190 | $ | 5,321,761 | — | $ | — | $ | — | $ | (4,284,551 | ) | $ | 1,052,400 | |||||||||||||||||||||||||||
Uncompensated contribution of services—1st quarter | — | — | — | — | — | — | 100,000 | — | — | — | — | 100,000 | ||||||||||||||||||||||||||||||||||||
Issuance of preferred stock for cash on 4/26/02 | 905,000 | 905 | — | — | — | — | 2,817,331 | — | — | — | — | 2,818,236 | ||||||||||||||||||||||||||||||||||||
Issuance of preferred stock for cash on 5/16/02 | 890,250 | 890 | — | — | — | — | 2,772,239 | — | — | — | — | 2,773,129 | ||||||||||||||||||||||||||||||||||||
Issuance of preferred stock for cash on 5/31/02 | 795,000 | 795 | — | — | — | — | 2,473,380 | — | — | — | — | 2,474,175 | ||||||||||||||||||||||||||||||||||||
Issuance of preferred stock for cash on 6/28/02 | 229,642 | 230 | — | — | — | — | 712,991 | — | — | — | — | 713,221 | ||||||||||||||||||||||||||||||||||||
Uncompensated contribution of services—2nd quarter | — | — | — | — | — | — | 100,000 | — | — | — | — | 100,000 | ||||||||||||||||||||||||||||||||||||
Issuance of preferred stock for cash on 7/15/02 | 75,108 | 75 | — | — | — | — | 233,886 | — | — | — | — | 233,961 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock for cash on 8/1/02 | — | — | — | — | 38,400 | 38 | 57,562 | — | — | — | — | 57,600 | ||||||||||||||||||||||||||||||||||||
Issuance of warrants for services on 9/06/02 | — | — | — | — | — | — | 103,388 | — | — | — | — | 103,388 | ||||||||||||||||||||||||||||||||||||
Uncompensated contribution of services—3rd quarter | — | — | — | — | — | — | 100,000 | — | — | — | — | 100,000 | ||||||||||||||||||||||||||||||||||||
Uncompensated contribution of services—4th quarter | — | — | — | — | — | — | 100,000 | — | — | — | — | 100,000 | ||||||||||||||||||||||||||||||||||||
Issuance of preferred stock for dividends | 143,507 | 144 | — | — | — | — | 502,517 | — | — | — | (502,661 | ) | — | |||||||||||||||||||||||||||||||||||
Deemed dividend associated with beneficial conversion of preferred stock | — | — | — | — | — | — | 10,178,944 | — | — | — | (10,178,944 | ) | — | |||||||||||||||||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | (5,433,055 | ) | (5,433,055 | ) | ||||||||||||||||||||||||||||||||||
Other comprehensive income, foreign currency translation adjustment | — | — | — | — | — | — | — | — | — | 13,875 | — | 13,875 | ||||||||||||||||||||||||||||||||||||
Comprehensive loss | — | — | — | — | — | — | — | — | — | — | — | (5,419,180 | ) | |||||||||||||||||||||||||||||||||||
Balance, 12/31/02 (Predecessor) | 3,038,507 | $ | 3,039 | — | $ | — | 15,227,963 | $ | 15,228 | $ | 25,573,999 | — | $ | — | $ | 13,875 | $ | (20,399,211 | ) | $ | 5,206,930 |
F-8
Table of Contents
Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||||
Series A | Series B | Accumulated | Deficit | Total | ||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Preferred Stock | Common Stock | Additional | Treasury Stock | Other | During | Shareholders’ | |||||||||||||||||||||||||||||||||||||||||
Number of | Number of | Number of | Paid-In | Number of | Comprehensive | Development | Equity | |||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Capital | Shares | Amount | Income | Stage | (Deficit) | |||||||||||||||||||||||||||||||||||||
Issuance of common stock for cash on 1/7/03 | — | $ | — | — | $ | — | 61,600 | $ | 62 | $ | 92,338 | — | $ | — | $ | — | $ | — | $ | 92,400 | ||||||||||||||||||||||||||||
Issuance of common stock for patent pending acquisition on 3/31/03 | — | — | — | — | 100,000 | 100 | 539,900 | — | — | — | — | 540,000 | ||||||||||||||||||||||||||||||||||||
Cancellation of common stock on 3/31/03 | — | — | — | — | (79,382 | ) | (79 | ) | (119,380 | ) | — | — | — | — | (119,459 | ) | ||||||||||||||||||||||||||||||||
Uncompensated contribution of services—1st quarter | — | — | — | — | — | — | 100,000 | — | — | — | — | 100,000 | ||||||||||||||||||||||||||||||||||||
Issuance of preferred stock for cash on 5/9/03 | — | — | 110,250 | 110 | — | — | 2,773,218 | — | — | — | — | 2,773,328 | ||||||||||||||||||||||||||||||||||||
Issuance of preferred stock for cash on 5/16/03 | — | — | 45,500 | 46 | — | — | 1,145,704 | — | — | — | — | 1,145,750 | ||||||||||||||||||||||||||||||||||||
Conversion of preferred stock into common stock—2nd qtr | (70,954 | ) | (72 | ) | — | — | 147,062 | 147 | 40,626 | — | — | — | — | 40,701 | ||||||||||||||||||||||||||||||||||
Conversion of warrants into common stock—2nd qtr | — | — | — | — | 114,598 | 114 | (114 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Uncompensated contribution of services—2nd quarter | — | — | — | — | — | — | 100,000 | — | — | — | — | 100,000 | ||||||||||||||||||||||||||||||||||||
Issuance of preferred stock dividends | — | — | — | — | — | — | — | — | — | — | (1,087,200 | ) | (1,087,200 | ) | ||||||||||||||||||||||||||||||||||
Deemed dividend associated with beneficial conversion of preferred stock | — | — | — | — | — | — | 1,244,880 | — | — | — | (1,244,880 | ) | — | |||||||||||||||||||||||||||||||||||
Issuance of common stock for cash—3rd qtr | — | — | — | — | 202,500 | 202 | 309,798 | — | — | — | — | 310,000 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock for cash on 8/27/03 | — | — | — | — | 3,359,331 | 3,359 | 18,452,202 | — | — | — | — | 18,455,561 | ||||||||||||||||||||||||||||||||||||
Conversion of preferred stock into common stock—3rd qtr | (2,967,553 | ) | (2,967 | ) | (155,750 | ) | (156 | ) | 7,188,793 | 7,189 | (82,875 | ) | — | — | — | — | (78,809 | ) | ||||||||||||||||||||||||||||||
Conversion of warrants into common stock—3rd qtr | — | — | — | — | 212,834 | 213 | (213 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Compensation expense on warrants issued to non-employees | — | — | — | — | — | — | 412,812 | — | — | — | — | 412,812 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock for cash—4th qtr | — | — | — | — | 136,500 | 137 | 279,363 | — | — | — | — | 279,500 | ||||||||||||||||||||||||||||||||||||
Conversion of warrants into common stock—4th qtr | — | — | — | — | 393 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | (11,268,294 | ) | (11,268,294 | ) | ||||||||||||||||||||||||||||||||||
Other comprehensive income, foreign currency translation adjustment | — | — | — | — | — | — | — | — | — | 360,505 | — | 360,505 | ||||||||||||||||||||||||||||||||||||
Comprehensive loss | — | — | — | — | — | — | — | — | — | — | — | (10,907,789 | ) | |||||||||||||||||||||||||||||||||||
Balance, 12/31/03 (Predecessor) | — | $ | — | — | $ | — | 26,672,192 | $ | 26,672 | $ | 50,862,258 | — | $ | — | $ | 374,380 | $ | (33,999,585 | ) | $ | 17,263,725 |
F-9
Table of Contents
Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||||
Series A | Series B | Accumulated | Deficit | Total | ||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Preferred Stock | Common Stock | Additional | Treasury Stock | Other | During | Shareholders’ | |||||||||||||||||||||||||||||||||||||||||
Number of | Number of | Number of | Paid-In | Number of | Comprehensive | Development | Equity | |||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Capital | Shares | Amount | Income | Stage | (Deficit) | |||||||||||||||||||||||||||||||||||||
Conversion of warrants into common stock—1st qtr | — | $ | — | — | $ | — | 78,526 | $ | 79 | $ | (79 | ) | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||||||
Issuance of common stock for cash in connection with exercise of stock options—1st qtr | — | — | — | — | 15,000 | 15 | 94,985 | — | — | — | — | 95,000 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock for cash in connection with exercise of warrants—1st qtr | — | — | — | — | 4,000 | 4 | 7,716 | — | — | — | — | 7,720 | ||||||||||||||||||||||||||||||||||||
Compensation expense on options and warrants issued to non-employees and directors—1st qtr | — | — | — | — | — | — | 1,410,498 | — | — | — | — | 1,410,498 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock in connection with exercise of warrants—2nd qtr | — | — | — | — | 51,828 | 52 | (52 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Issuance of common stock for cash—2nd qtr | — | — | — | — | 7,200,000 | 7,200 | 56,810,234 | — | — | — | — | 56,817,434 | ||||||||||||||||||||||||||||||||||||
Compensation expense on options and warrants issued to non-employees and directors—2nd qtr | — | — | — | — | — | — | 143,462 | — | — | — | — | 143,462 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock in connection with exercise of warrants—3rd qtr | — | — | — | — | 7,431 | 7 | (7 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Issuance of common stock for cash in connection with exercise of stock options—3rd qtr | — | — | — | — | 110,000 | 110 | 189,890 | — | — | — | — | 190,000 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock for cash in connection with exercise of warrants—3rd qtr | — | — | — | — | 28,270 | 28 | 59,667 | — | — | — | — | 59,695 | ||||||||||||||||||||||||||||||||||||
Compensation expense on options and warrants issued to non-employees and directors—3rd qtr | — | — | — | — | — | — | 229,133 | — | — | — | — | 229,133 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock in connection with exercise of warrants—4th qtr | — | — | — | — | 27,652 | 28 | (28 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Compensation expense on options and warrants issued to non-employees, employees, and directors—4th qtr | — | — | — | — | — | — | 127,497 | — | — | — | — | 127,497 | ||||||||||||||||||||||||||||||||||||
Purchase of treasury stock—4th qtr | — | — | — | — | — | — | — | 4,000,000 | (25,974,000 | ) | — | — | (25,974,000 | ) | ||||||||||||||||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | (21,474,469 | ) | (21,474,469 | ) | ||||||||||||||||||||||||||||||||||
Other comprehensive income, foreign currency translation adjustment | — | — | — | — | — | — | — | — | — | 79,725 | — | 79,725 | ||||||||||||||||||||||||||||||||||||
Other comprehensive income, net unrealized gain on available-for-sale investments | — | — | — | — | — | — | — | — | — | 10,005 | — | 10,005 | ||||||||||||||||||||||||||||||||||||
Comprehensive loss | — | — | — | — | — | — | — | — | — | — | — | (21,384,739 | ) | |||||||||||||||||||||||||||||||||||
Balance, 12/31/04 (Predecessor) | — | $ | — | — | $ | — | 34,194,899 | $ | 34,195 | $ | 109,935,174 | 4,000,000 | $ | (25,974,000 | ) | $ | 464,110 | $ | (55,474,054 | ) | $ | 28,985,425 |
F-10
Table of Contents
Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||||
Series A | Series B | Accumulated | Deficit | Total | ||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Preferred Stock | Common Stock | Additional | Treasury Stock | Other | During | Shareholders’ | |||||||||||||||||||||||||||||||||||||||||
Number of | Number of | Number of | Paid-In | Number of | Comprehensive | Development | Equity | |||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Capital | Shares | Amount | Income (Loss) | Stage | (Deficit) | |||||||||||||||||||||||||||||||||||||
Issuance of common stock for cash in connection with exercise of stock options—1st qtr | — | $ | — | — | $ | — | 25,000 | $ | 25 | $ | 74,975 | — | $ | — | $ | — | $ | — | $ | 75,000 | ||||||||||||||||||||||||||||
Compensation expense on options and warrants issued to non-employees—1st qtr | — | — | — | — | — | — | 33,565 | — | — | — | — | 33,565 | ||||||||||||||||||||||||||||||||||||
Conversion of warrants into common stock—2nd qtr | — | — | — | — | 27,785 | 28 | (28 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Compensation expense on options and warrants issued to non-employees—2nd qtr | — | — | — | — | — | — | (61,762 | ) | — | — | — | — | (61,762 | ) | ||||||||||||||||||||||||||||||||||
Compensation expense on options and warrants issued to non-employees—3rd qtr | — | — | — | — | — | — | (137,187 | ) | — | — | — | — | (137,187 | ) | ||||||||||||||||||||||||||||||||||
Conversion of warrants into common stock—3rd qtr | — | — | — | — | 12,605 | 12 | (12 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Compensation expense on options and warrants issued to non-employees—4th qtr | — | — | — | — | — | — | 18,844 | — | — | — | — | 18,844 | ||||||||||||||||||||||||||||||||||||
Compensation expense on acceleration of options—4th qtr | — | — | — | — | — | — | 14,950 | — | — | — | — | 14,950 | ||||||||||||||||||||||||||||||||||||
Compensation expense on restricted stock award issued to employee—4th qtr | — | — | — | — | — | — | 606 | — | — | — | — | 606 | ||||||||||||||||||||||||||||||||||||
Conversion of predecessor company shares | — | — | — | — | 94 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Comprehensive loss: | ||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | (35,777,584 | ) | (35,777,584 | ) | ||||||||||||||||||||||||||||||||||
Other comprehensive loss, foreign currency translation adjustment | — | — | — | — | — | — | — | — | — | (1,372,600 | ) | — | (1,372,600 | ) | ||||||||||||||||||||||||||||||||||
Foreign exchange gain on substantial liquidation of foreign entity | 133,851 | 133,851 | ||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net unrealized gain on available-for-sale investments. | — | — | — | — | — | — | — | — | — | (10,005 | ) | — | (10,005 | ) | ||||||||||||||||||||||||||||||||||
Comprehensive loss | — | — | — | — | — | — | — | — | — | — | — | (37,026,338 | ) | |||||||||||||||||||||||||||||||||||
Balance, 12/31/05 (Predecessor) | — | $ | — | — | $ | — | 34,260,383 | $ | 34,260 | $ | 109,879,125 | 4,000,000 | $ | (25,974,000 | ) | $ | (784,644 | ) | $ | (91,251,638 | ) | $ | (8,096,897 | ) |
F-11
Table of Contents
Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Series A | Series B | Accumulated | Deficit | Total | ||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Preferred Stock | Common Stock | Additional | Treasury Stock | Other | During | Shareholders’ | |||||||||||||||||||||||||||||||||||||||||||||
Number of | Number of | Number of | Paid-In | Number of | Comprehensive | Development | Noncontrolling | Equity | ||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Capital | Shares | Amount | Income | Stage | Interest | (Deficit) | ||||||||||||||||||||||||||||||||||||||||
Compensation expense on options and warrants issued to non-employees—1st qtr | — | $ | — | — | $ | — | — | $ | — | $ | 42,810 | — | $ | — | $ | — | $ | — | $ | — | $ | 42,810 | ||||||||||||||||||||||||||||||
Compensation expense on option awards issued to employees and directors—1st qtr | — | — | — | — | — | — | 46,336 | — | — | — | — | — | 46,336 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on restricted stock issued to employees—1st qtr | — | — | — | — | 128,750 | 129 | 23,368 | — | — | — | — | — | 23,497 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on options and warrants issued to non-employees—2nd qtr | — | — | — | — | — | — | 96,177 | — | — | — | — | — | 96,177 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on option awards issued to employees and directors—2nd qtr | — | — | — | — | — | — | 407,012 | — | — | — | — | — | 407,012 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on restricted stock to employees—2nd qtr | — | — | — | — | — | — | 4,210 | — | — | — | — | — | 4,210 | |||||||||||||||||||||||||||||||||||||||
Cancellation of unvested restricted stock — 2nd qtr | — | — | — | — | (97,400 | ) | (97 | ) | 97 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Issuance of common stock for cash in connection with exercise of stock options—2nd qtr | — | — | — | — | 10,000 | 10 | 16,490 | — | — | — | — | — | 16,500 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on options and warrants issued to non-employees—3rd qtr | — | — | — | — | — | — | 25,627 | — | — | — | — | — | 25,627 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on option awards issued to employees and directors—3rd qtr | — | — | — | — | — | — | 389,458 | — | — | — | — | — | 389,458 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on restricted stock to employees—3rd qtr | — | — | — | — | — | — | 3,605 | — | — | — | — | — | 3,605 | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock for cash in connection with exercise of stock options—3rd qtr | — | — | — | — | 76,000 | 76 | 156,824 | — | — | — | — | — | 156,900 | |||||||||||||||||||||||||||||||||||||||
Acquisition of Agera | — | — | — | — | — | — | — | — | — | — | — | 2,182,505 | 2,182,505 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on options and warrants issued to non-employees—4th qtr | — | — | — | — | — | — | 34,772 | — | — | — | — | — | 34,772 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on option awards issued to employees and directors—4th qtr | — | — | — | — | — | — | 390,547 | — | — | — | — | — | 390,547 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on restricted stock to employees—4th qtr | — | — | — | — | — | — | 88 | — | — | — | — | — | 88 | |||||||||||||||||||||||||||||||||||||||
Cancellation of unvested restricted stock award—4th qtr | — | — | — | — | (15,002 | ) | (15 | ) | 15 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Comprehensive loss: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | (35,821,406 | ) | (78,132 | ) | (35,899,538 | ) | ||||||||||||||||||||||||||||||||||||
Other comprehensive gain, foreign currency translation adjustment | — | — | — | — | — | — | — | — | — | 657,182 | — | — | 657,182 | |||||||||||||||||||||||||||||||||||||||
Comprehensive loss | — | — | — | — | — | — | — | — | — | — | — | — | (35,242,356 | ) | ||||||||||||||||||||||||||||||||||||||
Balance 12/31/06 (Predecessor) | — | $ | — | — | $ | — | 34,362,731 | $ | 34,363 | $ | 111,516,561 | 4,000,000 | $ | (25,974,000 | ) | $ | (127,462 | ) | $ | (127,073,044 | ) | $ | 2,104,373 | $ | (39,519,209 | ) |
F-12
Table of Contents
Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Series A | Series B | Accumulated | Deficit | Total | ||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Preferred Stock | Common Stock | Additional | Treasury Stock | Other | During | Shareholders’ | |||||||||||||||||||||||||||||||||||||||||||||
Number of | Number of | Number of | Paid-In | Number of | Comprehensive | Development | Noncontrolling | Equity | ||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Capital | Shares | Amount | Income (Loss) | Stage | Interest | (Deficit) | ||||||||||||||||||||||||||||||||||||||||
Compensation expense on options and warrants issued to non-employees—1st qtr | — | $ | — | — | $ | — | — | $ | — | $ | 39,742 | — | $ | — | $ | — | $ | — | $ | — | $ | 39,742 | ||||||||||||||||||||||||||||||
Compensation expense on option awards issued to employees and directors—1st qtr | — | — | — | — | — | — | 448,067 | — | — | — | — | — | 448,067 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on restricted stock issued to employees—1st qtr | — | — | — | — | — | — | 88 | — | — | — | — | — | 88 | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock for cash in connection with exercise of stock options—1st qtr | — | — | — | — | 15,000 | 15 | 23,085 | — | — | — | — | — | 23,100 | |||||||||||||||||||||||||||||||||||||||
Expense in connection with modification of employee stock options —1st qtr | — | — | — | — | — | — | 1,178,483 | — | — | — | — | — | 1,178,483 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on options and warrants issued to non-employees—2nd qtr | — | — | — | — | — | — | 39,981 | — | — | — | — | — | 39,981 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on option awards issued to employees and directors—2nd qtr | — | — | — | — | — | — | 462,363 | — | — | — | — | — | 462,363 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on restricted stock issued to employees—2nd qtr | — | — | — | — | — | — | 88 | — | — | — | — | — | 88 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on option awards issued to employees and directors—3rd qtr | — | — | — | — | — | — | 478,795 | — | — | — | — | — | 478,795 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on restricted stock issued to employees—3rd qtr | — | — | — | — | — | — | 88 | — | — | — | — | — | 88 | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of warrants—3rd qtr | — | — | — | — | 492,613 | 493 | 893,811 | — | — | — | — | — | 894,304 | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock for cash, net of offering costs—3rdqtr | — | — | — | — | 6,767,647 | 6,767 | 13,745,400 | — | — | — | — | — | 13,752,167 | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock for cash in connection with exercise of stock options—3rd qtr | — | — | — | — | 1,666 | 2 | 3,164 | — | — | — | — | — | 3,166 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on option awards issued to employees and directors—4thqtr | — | — | — | — | — | — | 378,827 | — | — | — | — | — | 378,827 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on restricted stock issued to employees—4thqtr | — | — | — | — | — | — | 88 | — | — | — | — | — | 88 | |||||||||||||||||||||||||||||||||||||||
Comprehensive loss: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | (35,573,114 | ) | (246,347 | ) | (35,819,461 | ) | ||||||||||||||||||||||||||||||||||||
Other comprehensive gain, foreign currency translation adjustment | — | — | — | — | — | — | — | — | — | 846,388 | — | — | 846,388 | |||||||||||||||||||||||||||||||||||||||
Comprehensive loss | — | — | — | — | — | — | — | — | — | — | — | — | (34,973,073 | ) | ||||||||||||||||||||||||||||||||||||||
Balance 12/31/07 (Predecessor) | — | $ | — | — | $ | — | 41,639,657 | $ | 41,640 | $ | 129,208,631 | 4,000,000 | $ | (25,974,000 | ) | $ | 718,926 | $ | (162,646,158 | ) | $ | 1,858,026 | $ | (56,792,935 | ) |
F-13
Table of Contents
Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Series A | Series B | �� | Accumulated | Deficit | Total | |||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Preferred Stock | Common Stock | Additional | Treasury Stock | Other | During | Shareholders’ | |||||||||||||||||||||||||||||||||||||||||||||
Number of | Number of | Number of | Paid-In | Number of | Comprehensive | Development | Noncontrolling | Equity | ||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Capital | Shares | Amount | Income (Loss) | Stage | Interest | (Deficit) | ||||||||||||||||||||||||||||||||||||||||
Compensation expense on vested options related to non-employees—1st qtr | — | $ | — | — | $ | — | — | $ | — | $ | 44,849 | — | $ | — | $ | — | $ | — | $ | — | $ | 44,849 | ||||||||||||||||||||||||||||||
Compensation expense on option awards issued to employees and directors—1st qtr | — | — | — | — | — | — | 151,305 | — | — | — | — | — | 151,305 | |||||||||||||||||||||||||||||||||||||||
Expense in connection with modification of employee stock options —1st qtr | — | — | — | — | — | — | 1,262,815 | — | — | — | — | — | 1,262,815 | |||||||||||||||||||||||||||||||||||||||
Retirement of restricted stock | — | — | — | — | (165 | ) | (1 | ) | — | — | — | — | — | — | (1 | ) | ||||||||||||||||||||||||||||||||||||
Compensation expense on vested options related to non-employees—2nd qtr | — | — | — | — | — | — | 62,697 | — | — | — | — | — | 62,697 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on option awards issued to employees and directors—2nd qtr | — | — | — | — | — | — | 193,754 | — | — | — | — | — | 193,754 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on vested options related to non-employees—3rd qtr | — | — | — | — | — | — | 166,687 | — | — | — | — | — | 166,687 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on option awards issued to employees and directors—3rd qtr | — | — | — | — | — | — | 171,012 | — | — | — | — | — | 171,012 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on vested options related to non-employees—4th qtr | — | — | — | — | — | — | (86,719 | ) | — | — | — | — | — | (86,719 | ) | |||||||||||||||||||||||||||||||||||||
Compensation expense on option awards issued to employees and directors—4th qtr | — | — | — | — | — | — | 166,196 | — | — | — | — | — | 166,196 | |||||||||||||||||||||||||||||||||||||||
Comprehensive loss: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | (31,411,179 | ) | (1,680,676 | ) | (33,091,855 | ) | ||||||||||||||||||||||||||||||||||||
Reclassification of foreign exchange gain on substantial liquidation of foreign entities | — | — | — | — | — | — | — | — | — | (2,152,569 | ) | — | — | (2,152,569 | ) | |||||||||||||||||||||||||||||||||||||
Other comprehensive gain, foreign currency translation adjustment | — | — | — | — | — | — | — | — | — | 1,433,643 | — | — | 1,433,643 | |||||||||||||||||||||||||||||||||||||||
Comprehensive loss | — | — | — | — | — | — | — | — | — | — | — | — | (33,810,781 | ) | ||||||||||||||||||||||||||||||||||||||
Balance 12/31/08 (Predecessor) | — | $ | — | — | $ | — | 41,639,492 | $ | 41,639 | $ | 131,341,227 | 4,000,000 | $ | (25,974,000 | ) | $ | — | $ | (194,057,337 | ) | $ | 177,350 | $ | (88,471,121 | ) |
F-14
Table of Contents
Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Series A | Series B | Accumulated | Deficit | |||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Preferred Stock | Common Stock | Additional | Treasury Stock | Other | During | Total | |||||||||||||||||||||||||||||||||||||||||||||
Number of | Number of | Number of | Paid-In | Number of | Comprehensive | Development | Noncontrolling | Equity | ||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Capital | Shares | Amount | Income (Loss) | Stage | Interest | (Deficit) | ||||||||||||||||||||||||||||||||||||||||
Compensation expense on vested options related to non-employees—1st qtr | — | $ | — | — | $ | — | — | $ | — | $ | 1,746 | — | $ | — | $ | — | $ | — | $ | — | $ | 1,746 | ||||||||||||||||||||||||||||||
Compensation expense on option awards issued to employees and directors—1st qtr | — | — | — | — | — | — | 138,798 | — | — | — | — | — | 138,798 | |||||||||||||||||||||||||||||||||||||||
Conversion of debt into common stock — 1st qtr 2009 | — | — | — | — | 37,564 | 38 | 343,962 | — | — | — | — | — | 344,000 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on option awards issued to employees and directors—2nd qtr | — | — | — | — | — | — | 112,616 | — | — | — | — | — | 112,616 | |||||||||||||||||||||||||||||||||||||||
Conversion of debt into common stock — 2nd qtr 2009 | — | — | — | — | 1,143,324 | 1,143 | 10,468,857 | — | — | — | — | — | 10,470,000 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on option awards issued to employees and directors—2 months ended 8/31/09 | — | — | — | — | — | — | 35,382 | — | — | — | — | — | 35,382 | |||||||||||||||||||||||||||||||||||||||
Balance of expense due to cancellation of options issued to employees and directors in bankruptcy—2 months ended 8/31/09 | — | — | — | — | — | — | 294,912 | — | — | — | — | — | 294,912 | |||||||||||||||||||||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | — | — | — | 65,721,531 | 205,632 | 65,927,163 | |||||||||||||||||||||||||||||||||||||||
Comprehensive income | — | — | — | — | — | — | — | — | — | — | — | — | 65,927,163 | |||||||||||||||||||||||||||||||||||||||
Balance 8/31/09 (Predecessor) | — | — | — | — | 42,820,380 | $ | 42,820 | $ | 142,737,500 | 4,000,000 | $ | (25,974,000 | ) | $ | — | $ | (128,335,806 | ) | $ | 382,982 | $ | (11,146,504 | ) | |||||||||||||||||||||||||||||
Cancellation of Predecessor common stock and fresh start adjustments | — | — | — | — | (42,820,380 | ) | (42,820 | ) | (150,426,331 | ) | (4,000,000 | ) | 25,974,000 | — | — | — | (124,495,151 | ) | ||||||||||||||||||||||||||||||||||
Elimination of Predecessor accumulated deficit and accumulated other comprehensive loss | — | — | — | — | — | — | — | — | — | — | 128,335,806 | — | 128,335,806 | |||||||||||||||||||||||||||||||||||||||
Balance 9/1/09 (Predecessor) | — | — | — | — | — | — | (7,688,831 | ) | — | — | — | — | 382,982 | (7,305,849 | ) | |||||||||||||||||||||||||||||||||||||
Issuance of 11.4 million shares of common stock in connection with emergence from Chapter 11 | — | — | — | — | 11,400,000 | 11,400 | 5,460,600 | — | — | — | — | — | 5,472,000 | |||||||||||||||||||||||||||||||||||||||
Balance 9/1/09 (Successor) | — | — | — | — | 11,400,000 | 11,400 | (2,228,231 | ) | — | — | — | — | 382,982 | (1,833,849 | ) | |||||||||||||||||||||||||||||||||||||
Issuance of 2.7 million shares of common stock in connection with the exit financing | — | — | — | — | 2,666,666 | 2,667 | 1,797,333 | — | — | — | — | — | 1,800,000 | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock on Oct. 28, 2009 | — | — | — | — | 25,501 | 25 | 58,627 | — | — | — | — | — | 58,652 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on shares issued to management | — | — | — | — | 600,000 | 600 | 167,400 | — | — | — | — | — | 168,000 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on option awards issued to directors | — | — | — | — | — | — | 326,838 | — | — | — | — | — | 326,838 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on option awards issued to non-employees | — | — | — | — | — | — | 386,380 | — | — | — | — | — | 386,380 | |||||||||||||||||||||||||||||||||||||||
Comprehensive loss: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | (5,049,999 | ) | 15,493 | (5,034,506 | ) | |||||||||||||||||||||||||||||||||||||
Comprehensive loss | — | — | — | — | — | — | — | — | — | — | — | — | (5,034,506 | ) | ||||||||||||||||||||||||||||||||||||||
�� | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance 12/31/09 (Successor) | — | $ | — | — | $ | — | 14,692,167 | $ | 14,692 | $ | 508,347 | — | $ | — | $ | — | $ | (5,049,999 | ) | $ | 398,475 | $ | (4,128,485 | ) | ||||||||||||||||||||||||||||
F-15
Table of Contents
(A Development Stage Company)
Successor | Predecessor | Predecessor | |||||||||||||||
Cumulative period | |||||||||||||||||
from December 31, | |||||||||||||||||
1995 (date of | |||||||||||||||||
Four months ended | Eight months ended | For the year ended | inception) to | ||||||||||||||
December 31, 2009 | August 31, 2009 | December 31, 2008 | August 31, 2009 | ||||||||||||||
Cash flows from operating activities: | |||||||||||||||||
Net (loss) income | $ | (5,049,999 | ) | $ | 65,721,531 | $ | (31,411,179 | ) | $ | (115,322,121 | ) | ||||||
Adjustments to reconcile net (loss) income to net cash used in operating activities: | |||||||||||||||||
Reorganization items, net | 72,477 | (74,648,976 | ) | — | (74,648,976 | ) | |||||||||||
Expense related to equity awards and issuance of stock | 881,218 | 583,453 | 2,132,597 | 10,608,999 | |||||||||||||
Warrant expense | 319,084 | — | — | — | |||||||||||||
Uncompensated contribution of services | — | — | — | 755,556 | |||||||||||||
Depreciation and amortization | — | — | 1,376,863 | 9,091,990 | |||||||||||||
Provision for doubtful accounts | (46,619 | ) | 501 | 7,191 | 337,810 | ||||||||||||
Provision for excessive and/or obsolete inventory | 11,664 | 169,085 | 90,342 | 259,427 | |||||||||||||
Amortization of debt issue costs | — | 985,237 | 749,239 | 4,107,067 | |||||||||||||
Amortization of debt discounts on investments | — | — | — | (508,983 | ) | ||||||||||||
Loss on disposal or impairment of property and equipment | — | — | 13,059,375 | 17,668,477 | |||||||||||||
Foreign exchange gain on substantial liquidation of foreign entity | (2,614 | ) | 30,012 | (2,152,569 | ) | (2,256,408 | ) | ||||||||||
Net (loss) income attributable to non-controlling interest | 15,493 | 205,632 | (1,680,676 | ) | (1,799,523 | ) | |||||||||||
Change in operating assets and liabilities, excluding effects of acquisition: | |||||||||||||||||
Decrease in restricted cash | — | — | 451,383 | — | |||||||||||||
Decrease (increase) in accounts receivable | 23,544 | 91,666 | (26,367 | ) | (91,496 | ) | |||||||||||
Decrease in other receivables | 4,740 | 23,632 | 46,870 | 218,978 | |||||||||||||
Decrease (increase) in inventory | 30,923 | 29,543 | 111,530 | (455,282 | ) | ||||||||||||
Decrease (increase) in prepaid expenses | (244,905 | ) | 628,197 | 64,362 | 34,341 | ||||||||||||
Decrease (increase) in other assets | 4,120 | (112,441 | ) | 42,937 | 71,000 | ||||||||||||
Increase (decrease) in accounts payable | 107,622 | (230,592 | ) | (6,021 | ) | 57,648 | |||||||||||
Increase (decrease) in accrued expenses, liabilities subject to compromise and other liabilities | (425,794 | ) | 1,868,162 | (2,874,518 | ) | 3,311,552 | |||||||||||
Increase (decrease) in deferred revenue | — | (7,522 | ) | 7,522 | (50,096 | ) | |||||||||||
Net cash used in operating activities | (4,299,046 | ) | (4,662,880 | ) | (20,011,119 | ) | (148,610,040 | ) | |||||||||
Cash flows from investing activities: | |||||||||||||||||
Acquisition of Agera, net of cash acquired | — | — | (6,679 | ) | (2,016,520 | ) | |||||||||||
Purchase of property and equipment | — | — | (33,337 | ) | (25,515,170 | ) | |||||||||||
Proceeds from the sale of property and equipment, net of selling costs | — | — | 6,444,386 | 6,542,434 | |||||||||||||
Purchase of investments | — | — | — | (152,998,313 | ) | ||||||||||||
Proceeds from sales and maturities of investments | — | — | — | 153,507,000 | |||||||||||||
Net cash provided by (used in) investing activities | — | — | 6,404,370 | (20,480,569 | ) | ||||||||||||
Cash flows from financing activities: | |||||||||||||||||
Proceeds from convertible debt | — | — | — | 91,450,000 | |||||||||||||
Offering costs associated with the issuance of convertible debt | — | — | — | (3,746,193 | ) | ||||||||||||
Proceeds from notes payable to shareholders, net | — | — | — | 135,667 | |||||||||||||
Proceeds from the issuance of redeemable preferred stock, net | 2,870,000 | — | — | 12,931,800 | |||||||||||||
Proceeds from the issuance of common stock, net | 1,800,000 | — | — | 93,753,857 | |||||||||||||
Costs associated with secured loan and debtor-in-possession loan | — | (360,872 | ) | (360,872 | ) | ||||||||||||
Proceeds from secured loan | — | 500,471 | — | 500,471 | |||||||||||||
Proceeds from debtor-in-possession loan | — | 2,750,000 | — | 2,750,000 | |||||||||||||
Payments on insurance loan | (21,891 | ) | (63,983 | ) | (15,336 | ) | (79,319 | ) | |||||||||
Cash dividends paid on preferred stock | — | — | — | (1,087,200 | ) | ||||||||||||
Cash paid for fractional shares of preferred stock | — | — | — | (38,108 | ) | ||||||||||||
Merger and acquisition expenses | — | — | — | (48,547 | ) | ||||||||||||
Repurchase of common stock | — | — | — | (26,024,280 | ) | ||||||||||||
Net cash provided by (used in) financing activities | 4,648,109 | 2,825,616 | (15,336 | ) | 170,137,276 | ||||||||||||
Effect of exchange rate changes on cash balances | 3,149 | (6,760 | ) | (114,335 | ) | (36,391 | ) | ||||||||||
Net increase (decrease) in cash and cash equivalents | 352,212 | (1,844,024 | ) | (13,736,420 | ) | 1,010,276 | |||||||||||
Cash and cash equivalents, beginning of period | 1,010,276 | 2,854,300 | 16,590,720 | — | |||||||||||||
Cash and cash equivalents, end of period | $ | 1,362,488 | $ | 1,010,276 | $ | 2,854,300 | $ | 1,010,276 | |||||||||
F-16
Table of Contents
Successor | Predecessor | Predecessor | |||||||||||||||
Cumulative period | |||||||||||||||||
from December 31, | |||||||||||||||||
1995 (date of | |||||||||||||||||
Four months ended | Eight months ended | For the year ended | inception) to | ||||||||||||||
December 31, 2009 | August 31, 2009 | December 31, 2008 | August 31, 2009 | ||||||||||||||
Supplemental disclosures of cash flow information: | |||||||||||||||||
Predecessor cash paid for interest | $ | — | $ | — | $ | 3,150,000 | $ | 12,715,283 | |||||||||
Non-cash investing and financing activities: | |||||||||||||||||
Predecessor deemed dividend associated with beneficial conversion of preferred stock | $ | — | $ | — | $ | — | $ | 11,423,824 | |||||||||
Predecessor preferred stock dividend | — | — | — | 1,589,861 | |||||||||||||
Successor accrued preferred stock dividend | 42,740 | — | — | — | |||||||||||||
Predecessor uncompensated contribution of services | — | — | — | 755,556 | |||||||||||||
Predecessor common stock issued for intangible assets | — | — | — | 540,000 | |||||||||||||
Predecessor common stock issued in connection with conversion of debt | — | 10,814,000 | — | 10,814,000 | |||||||||||||
Predecessor equipment acquired through capital lease | — | — | — | 167,154 | |||||||||||||
Successor/Predecessor financing of insurance premiums | 81,517 | — | 87,623 | 87,623 | |||||||||||||
Successor issuance of notes payable | — | 6,000,060 | — | 6,000,060 | |||||||||||||
Successor common stock issued in connection with reorganization | — | 5,472,000 | — | 5,472,000 | |||||||||||||
Successor intangible assets | — | 6,340,656 | — | 6,340,656 | |||||||||||||
Successor deferred tax liability in connection with fresh-start | — | 2,500,000 | 2,500,000 | ||||||||||||||
Elimination of Predecessor common stock and fresh start adjustment | — | 14,780,320 | — | 14,780,320 | |||||||||||||
Successor accrued warrant liability | 316,192 | — | — | — | |||||||||||||
F-17
Table of Contents
(A Development Stage Company)
• | 7,320,000 shares, to our pre-bankruptcy lenders and the lenders that provided us our debtor-in-possession facility, collectively; | ||
• | 3,960,000 shares, to the holders of our 3.5% convertible subordinated notes; | ||
• | 600,000 shares, to our management as of the effective date, which was our chief operating officer; | ||
• | 120,000 shares, to the holders of our general unsecured claims; and | ||
• | 2,666,666 shares, to the purchasers of shares in the $2 million exit financing (our pre-bankruptcy lenders, the lenders that provided us our debtor-in-possession facility and the holders of our 3.5% convertible subordinated notes were permitted to participate in our exit financing). |
F-18
Table of Contents
• | 12.5% interest payable quarterly in cash or, at our option, 15% payable in kind by capitalizing such unpaid amount and adding it to the principal as of the date it was due; | |
• | matures June 1, 2012; | |
• | at any time prior to the maturity date, we may redeem any portion of the outstanding principal of the New Notes in cash at 125% of the stated face value of the New Notes; provided that we will be obligated to redeem all outstanding New Notes upon the following events: (a) we or our subsidiary, Fibrocell Technologies, Inc. (formerly, Isolagen Technologies, Inc.) successfully complete a capital campaign raising in excess of $10,000,000; or (b) we or our subsidiary, Fibrocell Technologies, Inc., are acquired by, or sell a majority stake to, an outside party; | |
• | the New Notes contain customary representations, warranties and covenants, including a covenant that we and our subsidiary, Fibrocell Technologies, Inc., shall be prohibited from the incurrence of additional debt without obtaining the consent of 66 2/3% of the New Note holders. |
F-19
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F-20
Table of Contents
F-21
Table of Contents
F-22
Table of Contents
F-23
Table of Contents
F-24
Table of Contents
F-25
Table of Contents
F-26
Table of Contents
Predecessor | Reclassifications | Fresh Start | Successor | ||||||||||||||
August 31, | And Plan of | Accounting | September 1, | ||||||||||||||
2009 | Reorganization | Adjustments | 2009 | ||||||||||||||
Assets | |||||||||||||||||
Current assets: | |||||||||||||||||
Cash and cash equivalents | $ | 1,010,277 | $ | — | $ | — | $ | 1,010,277 | |||||||||
Accounts receivable, net | 246,684 | — | — | 246,684 | |||||||||||||
Inventory, net | 268,619 | — | — | 268,619 | |||||||||||||
Prepaid expenses | 221,225 | — | — | 221,225 | |||||||||||||
Other current assets | 4,140 | — | — | 4,140 | |||||||||||||
Current assets of discontinued operations, net | 785 | — | — | 785 | |||||||||||||
Total current assets | 1,751,730 | — | — | 1,751,730 | |||||||||||||
Intangible assets | — | — | 6,340,656 | (e) | 6,340,656 | ||||||||||||
Other assets | 1,671 | — | — | 1,671 | |||||||||||||
Total assets | $ | 1,753,401 | $ | — | $ | 6,340,656 | $ | 8,094,057 | |||||||||
Liabilities, Shareholders’ Equity/(Deficit) and Noncontrolling Interests | |||||||||||||||||
Current liabilities: | |||||||||||||||||
Current debt | $ | 8,304 | $ | — | $ | — | $ | 8,304 | |||||||||
Accounts payable | 137,401 | — | — | 137,401 | |||||||||||||
Accrued expenses | 849,395 | — | — | 849,395 | |||||||||||||
Liabilities subject to compromise | 82,181,741 | (82,181,741 | )(a) | — | — | ||||||||||||
Prepetition secured loan, subject to compromise | 500,471 | (500,471 | )(b) | — | — | ||||||||||||
Debtor-in-possession loan | 2,750,000 | (2,750,000 | )(b) | — | — | ||||||||||||
Current liabilities of discontinued operations | 25,668 | — | — | 25,668 | |||||||||||||
Total current liabilities | 86,452,980 | (85,432,212 | ) | — | 1,020,768 | ||||||||||||
Other long term liabilities of continuing operations | 407,078 | — | — | 407,078 | |||||||||||||
Notes payable | — | 6,000,060 | (a) | — | 6,000,060 | ||||||||||||
Deferred tax liability | — | — | 2,500,000 | (f) | 2,500,000 | ||||||||||||
Total liabilities | 86,860,058 | (79,432,152 | ) | 2,500,000 | 9,927,906 | ||||||||||||
Commitments and contingencies | |||||||||||||||||
Shareholders’ Equity (Deficit): | |||||||||||||||||
Predecessor common stock | 42,821 | (42,821 | )(c) | — | — | ||||||||||||
Predecessor additional paid-in capital | 142,737,499 | (25,931,179 | )(c) | (116,806,320 | )(g) | — | |||||||||||
Predecessor treasury stock | (25,974,000 | ) | 25,974,000 | (c) | — | — | |||||||||||
Successor common stock | — | 11,400 | (a)(b) | — | 11,400 | ||||||||||||
Successor additional paid-in capital | — | 5,460,600 | (a)(b) | (7,688,831 | )(g) | (2,228,231 | ) | ||||||||||
Accumulated deficit during development stage | (202,295,959 | ) | 73,960,152 | (a)(b)(c)(d) | 128,335,807 | (g) | — | ||||||||||
Total shareholders’ equity (deficit) | (85,489,639 | ) | 79,432,152 | 3,840,656 | (2,216,831 | ) | |||||||||||
Noncontrolling interest | 382,982 | — | — | 382,982 | |||||||||||||
Total equity (deficit) and noncontrolling interests | (85,106,657 | ) | 79,432,152 | 3,840,656 | (1,833,849 | ) | |||||||||||
Total liabilities, shareholders’ equity/(deficit) and noncontrolling interests | $ | 1,753,401 | $ | — | $ | 6,340,656 | $ | 8,094,057 | |||||||||
(a) | This adjustment reflects the discharge of liabilities subject to compromise in accordance with the Plan of Reorganization and the issuance of $6 million in Notes payable and the issuance of 4,080,000 shares of Successor Company common stock in satisfaction of such claims. | |
(b) | This adjustment reflects the discharge of prepetition loan and debtor in-possession loan in accordance with the Plan of Reorganization and the issuance of 7,320,000 shares of the Successor Company common stock in satisfaction of such claims. | |
(c) | This adjustment reflects the cancellation of the Predecessor Company’s common stock, additional paid-in capital and treasury stock. | |
(d) | To reset accumulated deficit to zero for the consolidated subsidiaries included in the Plan of Reorganization. | |
(e) | This adjustment reflects the portion of the reorganization value which was attributed to identified intangible assets. | |
(f) | To record deferred tax liability as a result of the impact of fresh-start accounting fair value adjustments. | |
(g) | To reset Predecessor additional paid-in capital, accumulated deficit to zero and record net fresh-start adjustments. |
F-27
Table of Contents
Successor | Predecessor | ||||||||
Four months ended | Eight months ended | ||||||||
December 31, 2009 | August 31, 2009 | ||||||||
Professional fees expense | $ | (13,825 | ) | $ | (533,271 | ) | |||
Debt issuance costs related to DIP facility | — | (295,757 | ) | ||||||
Other debt issuance costs | — | (280,964 | ) | ||||||
Gain (loss) on discharge of liabilities subject to compromise | (58,652 | ) | 74,648,976 | ||||||
Total reorganization items, net | $ | (72,477 | ) | $ | 73,538,984 | ||||
F-28
Table of Contents
Successor | Predecessor | Predecessor | |||||||||||
Four months | Eight months | Year ended | |||||||||||
December 31, | August 31, | December 31, | |||||||||||
(in millions) | 2009 | 2009 | 2008 | ||||||||||
Net revenue | $ | — | $ | — | $ | — | |||||||
Gross loss | — | — | — | ||||||||||
Loss on sale of Swiss campus, before foreign currency gain | — | — | (6.3 | ) | |||||||||
Operating gain/(loss) | — | 0.2 | (6.7 | ) | |||||||||
Foreign exchange gain on substantial liquidation of foreign entity | — | — | 2.1 | ||||||||||
Other income/(loss) | — | (0.1 | ) | 0.1 | |||||||||
Income (loss) from discontinued operations | $ | — | $ | 0.1 | $ | (4.5 | ) | ||||||
Successor | Predecessor | ||||||||
Year ended | Year ended | ||||||||
December 31, | December 31, | ||||||||
2009 | 2008 | ||||||||
Leasehold improvements | $ | — | $ | 3,753,998 | |||||
Lab equipment | — | 1,447,218 | |||||||
Computer equipment and software | — | 1,101,097 | |||||||
Office furniture and fixtures | — | 18,236 | |||||||
— | 6,320,549 | ||||||||
Less: Accumulated depreciation and amortization | — | (3,938,622 | ) | ||||||
Less: Impairment valuation | — | (2,381,927 | ) | ||||||
Property and equipment, net | $ | — | $ | — | |||||
Successor | Predecessor | ||||||||
Year ended | Year ended | ||||||||
December 31, | December 31, | ||||||||
2009 | 2008 | ||||||||
Depreciation expense related to continuing operations: | |||||||||
Selling, general, administrative, research and development expenses | $ | — | $ | 1,032,032 |
F-29
Table of Contents
Successor | Predecessor | ||||||||
December 31, | December 31, | ||||||||
2009 | 2008 | ||||||||
Accrued professional fees | $ | 147,410 | $ | 479,943 | |||||
Accrued settlement fees | — | 325,000 | |||||||
Accrued compensation | 7,208 | 17,570 | |||||||
Accrued interest | 246,578 | 525,000 | |||||||
Dividend on preferred stock payable | 42,740 | — | |||||||
Accrued other | 92,919 | 300,200 | |||||||
Accrued expenses | $ | 536,855 | $ | 1,647,713 | |||||
Successor | Predecessor | ||||||||
December 31, | December 31, | ||||||||
2009 | 2008 | ||||||||
Convertible Subordinated Notes | $ | — | $ | 90,072,286 | |||||
Total Current Debt | — | 90,072,286 | |||||||
Promissory Note | 6,000,060 | — | |||||||
Total debt | $ | 6,000,060 | $ | 90,072,286 | |||||
F-30
Table of Contents
Successor | Predecessor | Predecessor | |||||||||||
Four months | Eight months | Year ended | |||||||||||
December 31, | August 31, | December 31, | |||||||||||
2009 | 2009 | 2008 | |||||||||||
U.S. Federal: | |||||||||||||
Current. | $ | — | $ | — | $ | — | |||||||
Deferred | — | — | — | ||||||||||
U.S. State: | |||||||||||||
Current. | — | — | — | ||||||||||
Deferred | — | — | — | ||||||||||
$ | — | $ | — | $ | — | ||||||||
Successor | Predecessor | Predecessor | |||||||||||
Four months | Eight months | Year ended | |||||||||||
December 31, | August 31, | December 31, | |||||||||||
2009 | 2009 | 2008 | |||||||||||
Tax/(benefit) at U.S. federal statutory rate | $ | (1,757,838 | ) | $ | 23,058,084 | $ | (10,017,185 | ) | |||||
Increase/(decrease) in domestic valuation allowance | 2,303,065 | (30,209,991 | ) | 11,815,611 | |||||||||
State income taxes/(benefit) before valuation allowance, net of federal benefit | (357,619 | ) | 4,690,990 | (1,797,593 | ) | ||||||||
Deferred tax impact of reorganization | (172,395 | ) | 2,261,359 | — | |||||||||
Other | (15,213 | ) | 199,558 | (833 | ) | ||||||||
$ | — | $ | — | $ | — | ||||||||
Successor | Predecessor | ||||||||
December 31, | December 31, | ||||||||
2009 | 2008 | ||||||||
Deferred tax liabilities: | |||||||||
Intangible assets | $ | 2,500,000 | $ | — | |||||
Total deferred tax liabilities | $ | 2,500,000 | $ | — | |||||
Deferred tax assets: | |||||||||
Loss carryforwards | $ | 32,942,543 | $ | 57,112,820 | |||||
Property and equipment | 1,559,631 | 1,708,838 | |||||||
Accrued expenses and other | 1,551,822 | 2,625,285 | |||||||
Stock compensation | 548,078 | 2,476,915 | |||||||
Total deferred tax assets | 36,602,074 | 63,923,858 | |||||||
Less: valuation allowance | (36,602,074 | ) | (63,923,858 | ) | |||||
Total deferred tax assets | $ | — | $ | — | |||||
Net deferred tax liabilities | $ | 2,500,000 | $ | — | |||||
F-31
Table of Contents
F-32
Table of Contents
F-33
Table of Contents
Year Ending | ||||
December 31, | ||||
2010 | $ | 1,177,570 | ||
2011 | 1,177,570 | |||
2012 | 1,177,570 | |||
2013 | 294,393 | |||
Total | $ | 3,827,103 | ||
F-34
Table of Contents
F-35
Table of Contents
F-36
Table of Contents
December 31, | October 13, | |||||||
2009 | 2009 | |||||||
Expected life (years) | 4.8 years | 5 years | ||||||
Interest rate | 2.7% | 2.3% | ||||||
Dividend yield | — | — | ||||||
Volatility | 66% | 66% |
Successor | Predecessor | Predecessor | |||||||||||
Four months | Eight months | Twelve months | |||||||||||
December 31, | August 31, | December 31, | |||||||||||
2009 | 2009 | 2008 | |||||||||||
Stock option compensation expense for employees and directors | $ | 326,838 | $ | 581,707 | $ | 1,945,082 | |||||||
Restricted stock expense | 168,000 | — | — | ||||||||||
Equity awards for nonemployees issued for services | 386,380 | 1,746 | 187,515 | ||||||||||
Total stock-based compensation expense | $ | 881,218 | $ | 583,453 | $ | 2,132,597 | |||||||
F-37
Table of Contents
Four Months Ended | ||
December 31, | ||
2009 | ||
Expected life (years) | 2.7 years | |
Interest rate | 1.4% | |
Dividend yield | — | |
Volatility | 67% |
Weighted | ||||||||||||||||
Weighted | Average | |||||||||||||||
Average | Remaining | Aggregate | ||||||||||||||
Exercise | Contractual | Intrinsic | ||||||||||||||
Options | Shares | Price | Term | Value | ||||||||||||
Outstanding at September 1, 2009 | — | $ | 0.00 | |||||||||||||
Four months ended December 31, 2009: | ||||||||||||||||
Granted | 2,807,000 | 0.77 | ||||||||||||||
Exercised | — | — | ||||||||||||||
Forfeited | — | — | ||||||||||||||
Outstanding at December 31, 2009 | 2,807,000 | $ | 0.77 | 4.67 | $ | 0.38 | ||||||||||
Options exercisable at December 31, 2009 | 2,130,000 | $ | 0.76 | 4.67 | $ | 0.39 | ||||||||||
F-38
Table of Contents
Non-vested Options | ||||||||
Weighted- | ||||||||
Number of | Average Fair | |||||||
Shares | Value | |||||||
Non-vested at September 1, 2009 | — | $ | — | |||||
Granted | 2,807,000 | — | ||||||
Vested | (2,130,000 | ) | — | |||||
Forfeited | — | — | ||||||
Non-vested at December 31, 2009 | 677,000 | $ | 0.36 | |||||
Non-vested Options | ||||||||
Weighted- | ||||||||
Number of | Average Fair | |||||||
Shares | Value | |||||||
Non-vested at September 1, 2009 | — | $ | — | |||||
Granted | 600,000 | 0.48 | ||||||
Vested | (300,000 | ) | 0.48 | |||||
Forfeited | — | — | ||||||
Non-vested at December 31, 2009 | 300,000 | $ | 0.48 | |||||
F-39
Table of Contents
Segment | ||||||||||||
Successor | Successor | |||||||||||
Four Months Ended December 31, 2009 | Fibrocell Therapy | Agera | Consolidated | |||||||||
Total operating revenue | $ | — | $ | 329,941 | $ | 329,941 | ||||||
Segment loss from continuing operations | $ | (5,026,024 | ) | $ | 3,631 | $ | (5,022,393 | ) | ||||
Supplemental information related to continuing operations | ||||||||||||
Depreciation and amortization expense | $ | — | $ | — | $ | — | ||||||
Total assets, including assets from discontinued operations as of December 31, 2009 | 8,092,816 | 631,393 | 8,724,209 | |||||||||
Property and equipment, net | — | — | — | |||||||||
Intangible assets, net | 6,340,656 | — | 6,340,656 |
Segment | ||||||||||||
Predecessor | Predecessor | |||||||||||
Eight Months Ended August 31, 2009 | Isolagen Therapy | Agera | Consolidated | |||||||||
Total operating revenue | $ | — | $ | 538,620 | $ | 538,620 | ||||||
Segment income from continuing operations | $ | 65,498,934 | $ | 381,306 | $ | 65,880,240 | ||||||
Segment | ||||||||||||
Predecessor | Predecessor | |||||||||||
Year Ended December 31, 2008 | Isolagen Therapy | Agera | Consolidated | |||||||||
Total operating revenue | $ | — | $ | 1,104,885 | $ | 1,104,885 | ||||||
Segment loss from continuing operations | $ | (24,334,980 | ) | $ | (4,285,549 | ) | $ | (28,620,529 | ) | |||
Supplemental information related to continuing operations | ||||||||||||
Depreciation and amortization expense | $ | 1,050,024 | $ | 326,839 | $ | 1,376,863 | ||||||
Total assets, including assets from discontinued operations as of December 31, 2008 | 4,019,714 | 1,033,691 | 5,053,405 | |||||||||
Property and equipment, net | — | — | — | |||||||||
Intangible assets, net | — | — | — |
F-40
Table of Contents
Revenue | Revenue | ||||||||||||
Successor | Predecessor | ||||||||||||
Four months ended | Eight months ended | Year ended | |||||||||||
December 31, 2009 | August 31, 2009 | December 31, 2008 | |||||||||||
United States | $ | 68,526 | $ | 187,289 | $ | 312,139 | |||||||
United Kingdom | 251,615 | 308,244 | 712,105 | ||||||||||
Other | 9,800 | 43,087 | 80,641 | ||||||||||
$ | 329,941 | $ | 538,620 | $ | 1,104,885 | ||||||||
F-41
Table of Contents
F-42
Table of Contents
(A Development Stage Company)
September 30, | December 31, | |||||||
2010 | 2009 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 205,083 | $ | 1,362,488 | ||||
Accounts receivable, net | 278,815 | 269,759 | ||||||
Inventory, net | 208,111 | 226,032 | ||||||
Prepaid expenses and other current assets | 562,957 | 525,024 | ||||||
Total current assets | 1,254,966 | 2,383,303 | ||||||
Property and equipment, net of accumulated depreciation of $5,612 and $0, respectively | 24,062 | — | ||||||
Other assets | 250 | 250 | ||||||
Intangible assets | 6,340,656 | 6,340,656 | ||||||
Total assets | $ | 7,619,934 | $ | 8,724,209 | ||||
Liabilities, Redeemable Preferred Stock, Shareholders’ Deficit and Noncontrolling Interest | ||||||||
Current liabilities: | ||||||||
Current debt | $ | — | $ | 47,795 | ||||
Accounts payable | 1,073,376 | 245,023 | ||||||
Accrued expenses | 2,094,432 | 544,260 | ||||||
Total current liabilities | 3,167,808 | 837,078 | ||||||
Long-term debt | 6,000,060 | 6,000,060 | ||||||
Deferred tax liability | 2,500,000 | 2,500,000 | ||||||
Warrant liability | 4,653,838 | 635,276 | ||||||
Other long-term liabilities | 284,007 | 369,210 | ||||||
Total liabilities | 16,605,713 | 10,341,624 | ||||||
Commitments and contingencies | ||||||||
Preferred stock series A, $0.001 par value; 9,000 shares authorized; 3,250 shares issued and outstanding | 2,365,309 | 2,511,070 | ||||||
Preferred stock series B, $0.001 par value; 9,000 shares authorized; 2,977 shares issued and outstanding | 391,766 | — | ||||||
Preferred stock series B, $0.001 par value; subscription receivable | (792,000 | ) | — | |||||
Fibrocell Science, Inc. shareholders’ deficit: | ||||||||
Successor common stock, $0.001 par value; 250,000,000 shares authorized | 19,769 | 14,692 | ||||||
Additional paid-in capital | 1,924,899 | 508,347 | ||||||
Accumulated deficit during development stage | (13,331,244 | ) | (5,049,999 | ) | ||||
Total Fibrocell Science, Inc. shareholders’ deficit | (11,386,576 | ) | (4,526,960 | ) | ||||
Noncontrolling interest | 435,722 | 398,475 | ||||||
Total deficit and noncontrolling interest | (10,950,854 | ) | (4,128,485 | ) | ||||
Total liabilities, preferred stock, shareholders’ deficit and noncontrolling interest | $ | 7,619,934 | $ | 8,724,209 | ||||
F-43
Table of Contents
(A Development Stage Company)
Successor | Successor | Predecessor | |||||||||||
For the three months | For the one month | For the two months | |||||||||||
ended September 30, | ended September 30, | ended August 31, | |||||||||||
2010 | 2009 | 2009 | |||||||||||
Revenue | |||||||||||||
Product sales | $ | 243,677 | $ | 75,029 | $ | 130,740 | |||||||
Total revenue | 243,677 | 75,029 | 130,740 | ||||||||||
Cost of sales | 118,916 | 53,323 | 252,420 | ||||||||||
Gross profit | 124,761 | 21,706 | (121,680 | ) | |||||||||
Selling, general and administrative expenses | 1,583,418 | 1,372,122 | 1,158,959 | ||||||||||
Research and development expenses | 1,387,466 | 556,242 | 614,511 | ||||||||||
Operating loss | (2,846,123 | ) | (1,906,658 | ) | (1,895,150 | ) | |||||||
Other income (expense) | |||||||||||||
Interest income | — | 1 | 1 | ||||||||||
Reorganization items, net | — | — | 74,132,188 | ||||||||||
Other expense | — | — | (6,243 | ) | |||||||||
Warrant income | 1,265,571 | — | — | ||||||||||
Interest expense | (211,919 | ) | (58,333 | ) | (290,063 | ) | |||||||
Income (loss) from continuing operations | (1,792,471 | ) | (1,964,990 | ) | 71,940,733 | ||||||||
Income (loss) from discontinued operations, net of tax | (8,575 | ) | 5,799 | 216,203 | |||||||||
Net income (loss) | (1,801,046 | ) | (1,959,191 | ) | 72,156,936 | ||||||||
Net income (loss) attributable to noncontrolling interest | (20,859 | ) | 1,644 | (214,292 | ) | ||||||||
Net income (loss) attributable to Fibrocell Science, Inc. common shareholders | (1,821,905 | ) | $ | (1,957,547 | ) | $ | 71,942,644 | ||||||
Per share information: | |||||||||||||
Income (loss) from continuing operations-basic and diluted | $ | (0.09 | ) | $ | (0.13 | ) | $ | 1.85 | |||||
Net income (loss) attributable to common shareholders per common share—basic and diluted | $ | (0.09 | ) | $ | (0.13 | ) | $ | 1.85 | |||||
Weighted average number of basic and diluted common shares outstanding | 19,557,842 | 14,666,666 | 38,820,380 | ||||||||||
F-44
Table of Contents
(A Development Stage Company)
Successor | Successor | Successor | Predecessor | Predecessor | |||||||||||||||||
Cumulative period | Cumulative period | ||||||||||||||||||||
For the nine | For the one | from September 1, | from December 28, | ||||||||||||||||||
months ended | month ended | 2009 (date of | For the eight | 1995 (date of | |||||||||||||||||
September 30, | September 30, | inception) to | months ended | inception) to | |||||||||||||||||
2010 | 2009 | September 30, 2010 | August 31, 2009 | August 31, 2009 | |||||||||||||||||
Revenue | |||||||||||||||||||||
Product sales | $ | 716,809 | $ | 75,029 | $ | 1,046,750 | $ | 538,620 | $ | 4,818,994 | |||||||||||
License fees | — | — | — | — | 260,000 | ||||||||||||||||
Total revenue | 716,809 | 75,029 | 1,046,750 | 538,620 | 5,078,994 | ||||||||||||||||
Cost of sales | 395,351 | 53,323 | 577,399 | 424,139 | 2,279,335 | ||||||||||||||||
Gross profit | 321,458 | 21,706 | 469,351 | 114,481 | 2,799,659 | ||||||||||||||||
Selling, general and administrative expenses | 5,424,661 | 1,372,122 | 8,133,017 | 3,427,374 | 84,805,520 | ||||||||||||||||
Research and development expenses | 4,053,817 | 556,242 | 5,877,013 | 2,107,718 | 56,269,869 | ||||||||||||||||
Operating loss | (9,157,020 | ) | (1,906,658 | ) | (13,540,679 | ) | (5,420,611 | ) | (138,275,730 | ) | |||||||||||
Other income (expense) | |||||||||||||||||||||
Interest income | — | 1 | 1 | 248 | 6,989,539 | ||||||||||||||||
Reorganization items, net | 3,303 | — | (69,174 | ) | 73,538,984 | 73,538,984 | |||||||||||||||
Other income (expense) | — | — | — | (6,243 | ) | 316,338 | |||||||||||||||
Warrant income | 1,560,757 | — | 1,241,673 | — | — | ||||||||||||||||
Interest expense | (612,917 | ) | (58,333 | ) | (860,091 | ) | (2,232,138 | ) | (18,790,218 | ) | |||||||||||
Income (loss) from continuing operations before income taxes | (8,205,877 | ) | (1,964,990 | ) | (13,228,270 | ) | 65,880,240 | (76,221,087 | ) | ||||||||||||
Income tax benefit | — | — | — | — | 190,754 | ||||||||||||||||
Income (loss) from continuing operations | (8,205,877 | ) | (1,964,990 | ) | (13,228,270 | ) | 65,880,240 | (76,030,333 | ) | ||||||||||||
Income (loss) from discontinued operations | (38,121 | ) | 5,799 | (50,234 | ) | 46,923 | (41,091,311 | ) | |||||||||||||
Net income (loss) | (8,243,998 | ) | (1,959,191 | ) | (13,278,504 | ) | 65,927,163 | (117,121,644 | ) | ||||||||||||
Deemed dividend associated with beneficial conversion | — | — | — | — | (11,423,824 | ) | |||||||||||||||
Preferred stock dividends | — | — | — | — | (1,589,861 | ) | |||||||||||||||
Net income/(loss) attributable to noncontrolling interest | (37,247 | ) | 1,644 | (52,740 | ) | (205,632 | ) | 1,799,523 | |||||||||||||
Net income (loss) attributable to Fibrocell Science, Inc. common shareholders. | $ | (8,281,245 | ) | $ | (1,957,547 | ) | $ | (13,331,244 | ) | $ | 65,721,531 | $ | (128,335,806 | ) | |||||||
Per share information: | |||||||||||||||||||||
Income (loss) from continuing operations-basic and diluted | $ | (0.45 | ) | $ | (0.13 | ) | $ | (0.77 | ) | $ | 1.72 | $ | (4.30 | ) | |||||||
Loss from discontinued operations-basic and diluted | — | — | — | — | (2.32 | ) | |||||||||||||||
Income attributable to noncontrolling interest | — | — | (0.01 | ) | — | 0.10 | |||||||||||||||
Deemed dividend associated with beneficial conversion of preferred stock | — | — | — | — | (0.65 | ) | |||||||||||||||
Preferred stock dividends | — | — | — | — | (0.09 | ) | |||||||||||||||
Net income (loss) attributable to common shareholders per common share—basic and diluted | $ | (0.45 | ) | $ | (0.13 | ) | $ | (0.78 | ) | $ | 1.72 | $ | (7.26 | ) | |||||||
Weighted average number of basic and diluted common shares outstanding | 18,291,301 | 14,666,666 | 17,104,057 | 38,230,886 | 17,678,219 | ||||||||||||||||
F-45
Table of Contents
(A Development Stage Company)
Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||||
Series A | Series B | Deficit | Total | |||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Preferred Stock | Common Stock | Additional | Treasury Stock | Accumulated Other | During | Shareholders’ | |||||||||||||||||||||||||||||||||||||||||
Number of | Number of | Number of | Paid-In | Number of | Comprehensive | Development | Equity | |||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Capital | Shares | Amount | Income | Stage | (Deficit) | |||||||||||||||||||||||||||||||||||||
Issuance of common stock for cash on 12/28/95 | — | $ | — | — | $ | — | 2,285,291 | $ | 2,285 | $ | (1,465 | ) | — | $ | — | $ | — | $ | — | $ | 820 | |||||||||||||||||||||||||||
Issuance of common stock for cash on 11/7/96 | — | — | — | — | 11,149 | 11 | 49,989 | — | — | — | — | 50,000 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock for cash on 11/29/96 | — | — | — | — | 2,230 | 2 | 9,998 | — | — | — | — | 10,000 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock for cash on 12/19/96 | — | — | — | — | 6,690 | 7 | 29,993 | — | — | — | — | 30,000 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock for cash on 12/26/96 | — | — | — | — | 11,148 | 11 | 49,989 | — | — | — | — | 50,000 | ||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | (270,468 | ) | (270,468 | ) | ||||||||||||||||||||||||||||||||||
Balance, 12/31/96 (Predecessor) | — | $ | — | — | $ | — | 2,316,508 | $ | 2,316 | $ | 138,504 | — | $ | — | $ | — | $ | (270,468 | ) | $ | (129,648 | ) | ||||||||||||||||||||||||||
Issuance of common stock for cash on 12/27/97 | — | — | — | — | 21,182 | 21 | 94,979 | — | — | — | — | 95,000 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock for services on 9/1/97 | — | — | — | — | 11,148 | 11 | 36,249 | — | — | — | — | 36,260 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock for services on 12/28/97 | — | — | — | — | 287,193 | 287 | 9,968 | — | — | — | — | 10,255 | ||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | (52,550 | ) | (52,550 | ) | ||||||||||||||||||||||||||||||||||
Balance, 12/31/97(Predecessor) | — | $ | — | — | $ | — | 2,636,031 | $ | 2,635 | $ | 279,700 | — | $ | — | $ | — | $ | (323,018 | ) | $ | (40,683 | ) |
F-46
Table of Contents
Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||||
Series A | Series B | Accumulated | Deficit | Total | ||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Preferred Stock | Common Stock | Additional | Treasury Stock | Other | During | Shareholders’ | |||||||||||||||||||||||||||||||||||||||||
Number of | Number of | Number of | Paid-In | Number of | Comprehensive | Development | Equity | |||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Capital | Shares | Amount | Income | Stage | (Deficit) | |||||||||||||||||||||||||||||||||||||
Issuance of common stock for cash on 8/23/98 | — | $ | — | — | $ | — | 4,459 | $ | 4 | $ | 20,063 | — | $ | — | $ | — | $ | — | $ | 20,067 | ||||||||||||||||||||||||||||
Repurchase of common stock on 9/29/98 | — | — | — | — | — | — | — | 2,400 | (50,280 | ) | — | — | (50,280 | ) | ||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | (195,675 | ) | (195,675 | ) | ||||||||||||||||||||||||||||||||||
Balance, 12/31/98 (Predecessor) | — | $ | — | — | $ | — | 2,640,490 | $ | 2,639 | $ | 299,763 | 2,400 | $ | (50,280 | ) | $ | — | $ | (518,693 | ) | $ | (266,571 | ) | |||||||||||||||||||||||||
Issuance of common stock for cash on 9/10/99 | — | — | — | — | 52,506 | 53 | 149,947 | — | — | — | — | 150,000 | ||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | (1,306,778 | ) | (1,306,778 | ) | ||||||||||||||||||||||||||||||||||
Balance, 12/31/99 (Predecessor) | — | $ | — | — | $ | — | 2,692,996 | $ | 2,692 | $ | 449,710 | 2,400 | $ | (50,280 | ) | $ | — | $ | (1,825,471 | ) | $ | (1,423,349 | ) | |||||||||||||||||||||||||
Issuance of common stock for cash on 1/18/00 | — | — | — | — | 53,583 | 54 | 1,869 | — | — | — | — | 1,923 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock for services on 3/1/00 | — | — | — | — | 68,698 | 69 | (44 | ) | — | — | — | — | 25 | |||||||||||||||||||||||||||||||||||
Issuance of common stock for services on 4/4/00 | — | — | — | — | 27,768 | 28 | (18 | ) | — | — | — | — | 10 | |||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | (807,076 | ) | (807,076 | ) | ||||||||||||||||||||||||||||||||||
Balance, 12/31/00 (Predecessor) | — | $ | — | — | $ | — | 2,843,045 | $ | 2,843 | $ | 451,517 | 2,400 | $ | (50,280 | ) | $ | — | $ | (2,632,547 | ) | $ | (2,228,467 | ) |
F-47
Table of Contents
Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||||
Series A | Series B | Accumulated | Deficit | Total | ||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Preferred Stock | Common Stock | Additional | Treasury Stock | Other | During | Shareholders’ | |||||||||||||||||||||||||||||||||||||||||
Number of | Number of | Number of | Paid-In | Number of | Comprehensive | Development | Equity | |||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Capital | Shares | Amount | Income | Stage | (Deficit) | |||||||||||||||||||||||||||||||||||||
Issuance of common stock for services on 7/1/01 | — | $ | — | — | $ | — | 156,960 | $ | 157 | $ | (101 | ) | — | $ | — | $ | — | $ | — | $ | 56 | |||||||||||||||||||||||||||
Issuance of common stock for services on 7/1/01 | — | — | — | — | 125,000 | 125 | (80 | ) | — | — | — | — | 45 | |||||||||||||||||||||||||||||||||||
Issuance of common stock for capitalization of accrued salaries on 8/10/01 | — | — | — | — | 70,000 | 70 | 328,055 | — | — | — | — | 328,125 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock for conversion of convertible debt on 8/10/01 | — | — | — | — | 1,750,000 | 1,750 | 1,609,596 | — | — | — | — | 1,611,346 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock for conversion of convertible shareholder notes payable on 8/10/01 | — | — | — | — | 208,972 | 209 | 135,458 | — | — | — | — | 135,667 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock for bridge financing on 8/10/01 | — | — | — | — | 300,000 | 300 | (192 | ) | — | — | — | — | 108 | |||||||||||||||||||||||||||||||||||
Retirement of treasury stock on 8/10/01 | — | — | — | — | — | — | (50,280 | ) | (2,400 | ) | 50,280 | — | — | — | ||||||||||||||||||||||||||||||||||
Issuance of common stock for net assets of Gemini on 8/10/01 | — | — | — | — | 3,942,400 | 3,942 | (3,942 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Issuance of common stock for net assets of AFH on 8/10/01 | — | — | — | — | 3,899,547 | 3,900 | (3,900 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Issuance of common stock for cash on 8/10/01 | — | — | — | — | 1,346,669 | 1,347 | 2,018,653 | — | — | — | — | 2,020,000 | ||||||||||||||||||||||||||||||||||||
Transaction and fund raising expenses on 8/10/01 | — | — | — | — | — | — | (48,547 | ) | — | — | — | — | (48,547 | ) | ||||||||||||||||||||||||||||||||||
Issuance of common stock for services on 8/10/01 | — | — | — | — | 60,000 | 60 | — | — | — | — | — | 60 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock for cash on 8/28/01 | — | — | — | — | 26,667 | 27 | 39,973 | — | — | — | — | 40,000 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock for services on 9/30/01 | — | — | — | — | 314,370 | 314 | 471,241 | — | — | — | — | 471,555 |
F-48
Table of Contents
Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||||
Series A | Series B | Accumulated | Deficit | Total | ||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Preferred Stock | Common Stock | Additional | Treasury Stock | Other | During | Shareholders’ | |||||||||||||||||||||||||||||||||||||||||
Number of | Number of | Number of | Paid-In | Number of | Comprehensive | Development | Equity | |||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Capital | Shares | Amount | Income | Stage | (Deficit) | |||||||||||||||||||||||||||||||||||||
Uncompensated contribution of services—3rd quarter | — | $ | — | — | $ | — | — | $ | — | $ | 55,556 | — | $ | — | $ | — | $ | — | $ | 55,556 | ||||||||||||||||||||||||||||
Issuance of common stock for services on 11/1/01 | — | — | — | — | 145,933 | 146 | 218,754 | — | — | — | — | 218,900 | ||||||||||||||||||||||||||||||||||||
Uncompensated contribution of services—4th quarter | — | — | — | — | — | — | 100,000 | — | — | — | — | 100,000 | ||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | (1,652,004 | ) | (1,652,004 | ) | ||||||||||||||||||||||||||||||||||
Balance, 12/31/01 (Predecessor) | — | $ | — | — | $ | — | 15,189,563 | $ | 15,190 | $ | 5,321,761 | — | $ | — | $ | — | $ | (4,284,551 | ) | $ | 1,052,400 | |||||||||||||||||||||||||||
Uncompensated contribution of services—1st quarter | — | — | — | — | — | — | 100,000 | — | — | — | — | 100,000 | ||||||||||||||||||||||||||||||||||||
Issuance of preferred stock for cash on 4/26/02 | 905,000 | 905 | — | — | — | — | 2,817,331 | — | — | — | — | 2,818,236 | ||||||||||||||||||||||||||||||||||||
Issuance of preferred stock for cash on 5/16/02 | 890,250 | 890 | — | — | — | — | 2,772,239 | — | — | — | — | 2,773,129 | ||||||||||||||||||||||||||||||||||||
Issuance of preferred stock for cash on 5/31/02 | 795,000 | 795 | — | — | — | — | 2,473,380 | — | — | — | — | 2,474,175 | ||||||||||||||||||||||||||||||||||||
Issuance of preferred stock for cash on 6/28/02 | 229,642 | 230 | — | — | — | — | 712,991 | — | — | — | — | 713,221 | ||||||||||||||||||||||||||||||||||||
Uncompensated contribution of services—2nd quarter | — | — | — | — | — | — | 100,000 | — | — | — | — | 100,000 | ||||||||||||||||||||||||||||||||||||
Issuance of preferred stock for cash on 7/15/02 | 75,108 | 75 | — | — | — | — | 233,886 | — | — | — | — | 233,961 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock for cash on 8/1/02 | — | — | — | — | 38,400 | 38 | 57,562 | — | — | — | — | 57,600 | ||||||||||||||||||||||||||||||||||||
Issuance of warrants for services on 9/06/02 | — | — | — | — | — | — | 103,388 | — | — | — | — | 103,388 | ||||||||||||||||||||||||||||||||||||
Uncompensated contribution of services—3rd quarter | — | — | — | — | — | — | 100,000 | — | — | — | — | 100,000 | ||||||||||||||||||||||||||||||||||||
Uncompensated contribution of services—4th quarter | — | — | — | — | — | — | 100,000 | — | — | — | — | 100,000 | ||||||||||||||||||||||||||||||||||||
Issuance of preferred stock for dividends | 143,507 | 144 | — | — | — | — | 502,517 | — | — | — | (502,661 | ) | — | |||||||||||||||||||||||||||||||||||
Deemed dividend associated with beneficial conversion of preferred stock | — | — | — | — | — | — | 10,178,944 | — | — | — | (10,178,944 | ) | — | |||||||||||||||||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | (5,433,055 | ) | (5,433,055 | ) | ||||||||||||||||||||||||||||||||||
Other comprehensive income, foreign currency translation adjustment | — | — | — | — | — | — | — | — | — | 13,875 | — | 13,875 | ||||||||||||||||||||||||||||||||||||
Comprehensive loss | — | — | — | — | — | — | — | — | — | — | — | (5,419,180 | ) | |||||||||||||||||||||||||||||||||||
Balance, 12/31/02 (Predecessor) | 3,038,507 | $ | 3,039 | — | $ | — | 15,227,963 | $ | 15,228 | $ | 25,573,999 | — | $ | — | �� | $ | 13,875 | $ | (20,399,211 | ) | $ | 5,206,930 |
F-49
Table of Contents
Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||||
Series A | Series B | Accumulated | Deficit | Total | ||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Preferred Stock | Common Stock | Additional | Treasury Stock | Other | During | Shareholders’ | |||||||||||||||||||||||||||||||||||||||||
Number of | Number of | Number of | Paid-In | Number of | Comprehensive | Development | Equity | |||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Capital | Shares | Amount | Income | Stage | (Deficit) | |||||||||||||||||||||||||||||||||||||
Issuance of common stock for cash on 1/7/03 | — | $ | — | — | $ | — | 61,600 | $ | 62 | $ | 92,338 | — | $ | — | $ | — | $ | — | $ | 92,400 | ||||||||||||||||||||||||||||
Issuance of common stock for patent pending acquisition on 3/31/03 | — | — | — | — | 100,000 | 100 | 539,900 | — | — | — | — | 540,000 | ||||||||||||||||||||||||||||||||||||
Cancellation of common stock on 3/31/03 | — | — | — | — | (79,382 | ) | (79 | ) | (119,380 | ) | — | — | — | — | (119,459 | ) | ||||||||||||||||||||||||||||||||
Uncompensated contribution of services—1st quarter | — | — | — | — | — | — | 100,000 | — | — | — | — | 100,000 | ||||||||||||||||||||||||||||||||||||
Issuance of preferred stock for cash on 5/9/03 | — | — | 110,250 | 110 | — | — | 2,773,218 | — | — | — | — | 2,773,328 | ||||||||||||||||||||||||||||||||||||
Issuance of preferred stock for cash on 5/16/03 | — | — | 45,500 | 46 | — | — | 1,145,704 | — | — | — | — | 1,145,750 | ||||||||||||||||||||||||||||||||||||
Conversion of preferred stock into common stock—2nd qtr | (70,954 | ) | (72 | ) | — | — | 147,062 | 147 | 40,626 | — | — | — | — | 40,701 | ||||||||||||||||||||||||||||||||||
Conversion of warrants into common stock—2nd qtr | — | — | — | — | 114,598 | 114 | (114 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Uncompensated contribution of services—2nd quarter | — | — | — | — | — | — | 100,000 | — | — | — | — | 100,000 | ||||||||||||||||||||||||||||||||||||
Issuance of preferred stock dividends | — | — | — | — | — | — | — | — | — | — | (1,087,200 | ) | (1,087,200 | ) | ||||||||||||||||||||||||||||||||||
Deemed dividend associated with beneficial conversion of preferred stock | — | — | — | — | — | — | 1,244,880 | — | — | — | (1,244,880 | ) | — | |||||||||||||||||||||||||||||||||||
Issuance of common stock for cash—3rd qtr | — | — | — | — | 202,500 | 202 | 309,798 | — | — | — | — | 310,000 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock for cash on 8/27/03 | — | — | — | — | 3,359,331 | 3,359 | 18,452,202 | — | — | — | — | 18,455,561 | ||||||||||||||||||||||||||||||||||||
Conversion of preferred stock into common stock—3rd qtr | (2,967,553 | ) | (2,967 | ) | (155,750 | ) | (156 | ) | 7,188,793 | 7,189 | (82,875 | ) | — | — | — | — | (78,809 | ) | ||||||||||||||||||||||||||||||
Conversion of warrants into common stock—3rd qtr | — | — | — | — | 212,834 | 213 | (213 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Compensation expense on warrants issued to non-employees | — | — | — | — | — | — | 412,812 | — | — | — | — | 412,812 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock for cash—4th qtr | — | — | — | — | 136,500 | 137 | 279,363 | — | — | — | — | 279,500 | ||||||||||||||||||||||||||||||||||||
Conversion of warrants into common stock—4th qtr | — | — | — | — | 393 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | (11,268,294 | ) | (11,268,294 | ) | ||||||||||||||||||||||||||||||||||
Other comprehensive income, foreign currency translation adjustment | — | — | — | — | — | — | — | — | — | 360,505 | — | 360,505 | ||||||||||||||||||||||||||||||||||||
Comprehensive loss | — | — | — | — | — | — | — | — | — | — | — | (10,907,789 | ) | |||||||||||||||||||||||||||||||||||
Balance, 12/31/03 (Predecessor) | — | $ | — | — | $ | — | 26,672,192 | $ | 26,672 | $ | 50,862,258 | — | $ | — | $ | 374,380 | $ | (33,999,585 | ) | $ | 17,263,725 |
F-50
Table of Contents
Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||||
Series A | Series B | Accumulated | Deficit | Total | ||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Preferred Stock | Common Stock | Additional | Treasury Stock | Other | During | Shareholders’ | |||||||||||||||||||||||||||||||||||||||||
Number of | Number of | Number of | Paid-In | Number of | Comprehensive | Development | Equity | |||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Capital | Shares | Amount | Income | Stage | (Deficit) | |||||||||||||||||||||||||||||||||||||
Conversion of warrants into common stock—1st qtr | — | $ | — | — | $ | — | 78,526 | $ | 79 | $ | (79 | ) | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||||||
Issuance of common stock for cash in connection with exercise of stock options—1st qtr | — | — | — | — | 15,000 | 15 | 94,985 | — | — | — | — | 95,000 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock for cash in connection with exercise of warrants—1st qtr | — | — | — | — | 4,000 | 4 | 7,716 | — | — | — | — | 7,720 | ||||||||||||||||||||||||||||||||||||
Compensation expense on options and warrants issued to non-employees and directors—1st qtr | — | — | — | — | — | — | 1,410,498 | — | — | — | — | 1,410,498 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock in connection with exercise of warrants—2nd qtr | — | — | — | — | 51,828 | 52 | (52 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Issuance of common stock for cash—2nd qtr | — | — | — | — | 7,200,000 | 7,200 | 56,810,234 | — | — | — | — | 56,817,434 | ||||||||||||||||||||||||||||||||||||
Compensation expense on options and warrants issued to non-employees and directors—2nd qtr | — | — | — | — | — | — | 143,462 | — | — | — | — | 143,462 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock in connection with exercise of warrants—3rd qtr | — | — | — | — | 7,431 | 7 | (7 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Issuance of common stock for cash in connection with exercise of stock options—3rd qtr | — | — | — | — | 110,000 | 110 | 189,890 | — | — | — | — | 190,000 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock for cash in connection with exercise of warrants—3rd qtr | — | — | — | — | 28,270 | 28 | 59,667 | — | — | — | — | 59,695 | ||||||||||||||||||||||||||||||||||||
Compensation expense on options and warrants issued to non-employees and directors—3rd qtr | — | — | — | — | — | — | 229,133 | — | — | — | — | 229,133 | ||||||||||||||||||||||||||||||||||||
Issuance of common stock in connection with exercise of warrants—4th qtr | — | — | — | — | 27,652 | 28 | (28 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Compensation expense on options and warrants issued to non-employees, employees, and directors—4th qtr | — | — | — | — | — | — | 127,497 | — | — | — | — | 127,497 | ||||||||||||||||||||||||||||||||||||
Purchase of treasury stock—4th qtr | — | — | — | — | — | — | — | 4,000,000 | (25,974,000 | ) | — | — | (25,974,000 | ) | ||||||||||||||||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | (21,474,469 | ) | (21,474,469 | ) | ||||||||||||||||||||||||||||||||||
Other comprehensive income, foreign currency translation adjustment | — | — | — | — | — | — | — | — | — | 79,725 | — | 79,725 | ||||||||||||||||||||||||||||||||||||
Other comprehensive income, net unrealized gain on available-for-sale investments | — | — | — | — | — | — | — | — | — | 10,005 | — | 10,005 | ||||||||||||||||||||||||||||||||||||
Comprehensive loss | — | — | — | — | — | — | — | — | — | — | — | (21,384,739 | ) | |||||||||||||||||||||||||||||||||||
Balance, 12/31/04 (Predecessor) | — | $ | — | — | $ | — | 34,194,899 | $ | 34,195 | $ | 109,935,174 | 4,000,000 | $ | (25,974,000 | ) | $ | 464,110 | $ | (55,474,054 | ) | $ | 28,985,425 |
F-51
Table of Contents
Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||||
Series A | Series B | Accumulated | Deficit | Total | ||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Preferred Stock | Common Stock | Additional | Treasury Stock | Other | During | Shareholders’ | |||||||||||||||||||||||||||||||||||||||||
Number of | Number of | Number of | Paid-In | Number of | Comprehensive | Development | Equity | |||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Capital | Shares | Amount | Income (Loss) | Stage | (Deficit) | |||||||||||||||||||||||||||||||||||||
Issuance of common stock for cash in connection with exercise of stock options—1st qtr | — | $ | — | — | $ | — | 25,000 | $ | 25 | $ | 74,975 | — | $ | — | $ | — | $ | — | $ | 75,000 | ||||||||||||||||||||||||||||
Compensation expense on options and warrants issued to non-employees—1st qtr | — | — | — | — | — | — | 33,565 | — | — | — | — | 33,565 | ||||||||||||||||||||||||||||||||||||
Conversion of warrants into common stock—2nd qtr | — | — | — | — | 27,785 | 28 | (28 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Compensation expense on options and warrants issued to non-employees—2nd qtr | — | — | — | — | — | — | (61,762 | ) | — | — | — | — | (61,762 | ) | ||||||||||||||||||||||||||||||||||
Compensation expense on options and warrants issued to non-employees—3rd qtr | — | — | — | — | — | — | (137,187 | ) | — | — | — | — | (137,187 | ) | ||||||||||||||||||||||||||||||||||
Conversion of warrants into common stock—3rd qtr | — | — | — | — | 12,605 | 12 | (12 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Compensation expense on options and warrants issued to non-employees—4th qtr | — | — | — | — | — | — | 18,844 | — | — | — | — | 18,844 | ||||||||||||||||||||||||||||||||||||
Compensation expense on acceleration of options—4th qtr | — | — | — | — | — | — | 14,950 | — | — | — | — | 14,950 | ||||||||||||||||||||||||||||||||||||
Compensation expense on restricted stock award issued to employee—4th qtr | — | — | — | — | — | — | 606 | — | — | — | — | 606 | ||||||||||||||||||||||||||||||||||||
Conversion of predecessor company shares | — | — | — | — | 94 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Comprehensive loss: | ||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | (35,777,584 | ) | (35,777,584 | ) | ||||||||||||||||||||||||||||||||||
Other comprehensive loss, foreign currency translation adjustment | — | — | — | — | — | — | — | — | — | (1,372,600 | ) | — | (1,372,600 | ) | ||||||||||||||||||||||||||||||||||
Foreign exchange gain on substantial liquidation of foreign entity | 133,851 | 133,851 | ||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net unrealized gain on available-for-sale investments | — | — | — | — | — | — | — | — | — | (10,005 | ) | — | (10,005 | ) | ||||||||||||||||||||||||||||||||||
Comprehensive loss | — | — | — | — | — | — | — | — | — | — | — | (37,026,338 | ) | |||||||||||||||||||||||||||||||||||
Balance, 12/31/05 (Predecessor) | — | $ | — | — | $ | — | 34,260,383 | $ | 34,260 | $ | 109,879,125 | 4,000,000 | $ | (25,974,000 | ) | $ | (784,644 | ) | $ | (91,251,638 | ) | $ | (8,096,897 | ) |
F-52
Table of Contents
Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Series A | Series B | Accumulated | Deficit | Total | ||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Preferred Stock | Common Stock | Additional | Treasury Stock | Other | During | Shareholders’ | |||||||||||||||||||||||||||||||||||||||||||||
Number of | Number of | Number of | Paid-In | Number of | Comprehensive | Development | Noncontrolling | Equity | ||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Capital | Shares | Amount | Income | Stage | Interest | (Deficit) | ||||||||||||||||||||||||||||||||||||||||
Compensation expense on options and warrants issued to non-employees—1st qtr | — | $ | — | — | $ | — | — | $ | — | $ | 42,810 | — | $ | — | $ | — | $ | — | $ | — | $ | 42,810 | ||||||||||||||||||||||||||||||
Compensation expense on option awards issued to employees and directors—1st qtr | — | — | — | — | — | — | 46,336 | — | — | — | — | — | 46,336 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on restricted stock issued to employees—1st qtr | — | — | — | — | 128,750 | 129 | 23,368 | — | — | — | — | — | 23,497 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on options and warrants issued to non-employees—2nd qtr | — | — | — | — | — | — | 96,177 | — | — | — | — | — | 96,177 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on option awards issued to employees and directors—2nd qtr | — | — | — | — | — | — | 407,012 | — | — | — | — | — | 407,012 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on restricted stock to employees—2nd qtr | — | — | — | — | — | — | 4,210 | — | — | — | — | — | 4,210 | |||||||||||||||||||||||||||||||||||||||
Cancellation of unvested restricted stock — 2nd qtr | — | — | — | — | (97,400 | ) | (97 | ) | 97 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Issuance of common stock for cash in connection with exercise of stock options—2nd qtr | — | — | — | — | 10,000 | 10 | 16,490 | — | — | — | — | — | 16,500 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on options and warrants issued to non-employees—3rd qtr | — | — | — | — | — | — | 25,627 | — | — | — | — | — | 25,627 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on option awards issued to employees and directors—3rd qtr | — | — | — | — | — | — | 389,458 | — | — | — | — | — | 389,458 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on restricted stock to employees—3rd qtr | — | — | — | — | — | — | 3,605 | — | — | — | — | — | 3,605 | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock for cash in connection with exercise of stock options—3rd qtr | — | — | — | — | 76,000 | 76 | 156,824 | — | — | — | — | — | 156,900 | |||||||||||||||||||||||||||||||||||||||
Acquisition of Agera | — | — | — | — | — | — | — | — | — | — | — | 2,182,505 | 2,182,505 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on options and warrants issued to non-employees—4th qtr | — | — | — | — | — | — | 34,772 | — | — | — | — | — | 34,772 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on option awards issued to employees and directors—4th qtr | — | — | — | — | — | — | 390,547 | — | — | — | — | — | 390,547 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on restricted stock to employees—4th qtr | — | — | — | — | — | — | 88 | — | — | — | — | — | 88 | |||||||||||||||||||||||||||||||||||||||
Cancellation of unvested restricted stock award—4th qtr | — | — | — | — | (15,002 | ) | (15 | ) | 15 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Comprehensive loss: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | (35,821,406 | ) | (78,132 | ) | (35,899,538 | ) | ||||||||||||||||||||||||||||||||||||
Other comprehensive gain, foreign currency translation adjustment | — | — | — | — | — | — | — | — | — | 657,182 | — | — | 657,182 | |||||||||||||||||||||||||||||||||||||||
Comprehensive loss | — | — | — | — | — | — | — | — | — | — | — | — | (35,242,356 | ) | ||||||||||||||||||||||||||||||||||||||
Balance 12/31/06 (Predecessor) | — | $ | — | — | $ | — | 34,362,731 | $ | 34,363 | $ | 111,516,561 | 4,000,000 | $ | (25,974,000 | ) | $ | (127,462 | ) | $ | (127,073,044 | ) | $ | 2,104,373 | $ | (39,519,209 | ) |
F-53
Table of Contents
Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Series A | Series B | Accumulated | Deficit | Total | ||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Preferred Stock | Common Stock | Additional | Treasury Stock | Other | During | Shareholders’ | |||||||||||||||||||||||||||||||||||||||||||||
Number of | Number of | Number of | Paid-In | Number of | Comprehensive | Development | Noncontrolling | Equity | ||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Capital | Shares | Amount | Income (Loss) | Stage | Interest | (Deficit) | ||||||||||||||||||||||||||||||||||||||||
Compensation expense on options and warrants issued to non-employees—1st qtr | — | $ | — | — | $ | — | — | $ | — | $ | 39,742 | — | $ | — | $ | — | $ | — | $ | — | $ | 39,742 | ||||||||||||||||||||||||||||||
Compensation expense on option awards issued to employees and directors—1st qtr | — | — | — | — | — | — | 448,067 | — | — | — | — | — | 448,067 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on restricted stock issued to employees—1st qtr | — | — | — | — | — | — | 88 | — | — | — | — | — | 88 | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock for cash in connection with exercise of stock options—1st qtr | — | — | — | — | 15,000 | 15 | 23,085 | — | — | — | — | — | 23,100 | |||||||||||||||||||||||||||||||||||||||
Expense in connection with modification of employee stock options —1st qtr | — | — | — | — | — | — | 1,178,483 | — | — | — | — | — | 1,178,483 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on options and warrants issued to non-employees—2nd qtr | — | — | — | — | — | — | 39,981 | — | — | — | — | — | 39,981 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on option awards issued to employees and directors—2nd qtr | — | — | — | — | — | — | 462,363 | — | — | — | — | — | 462,363 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on restricted stock issued to employees—2nd qtr | — | — | — | — | — | — | 88 | — | — | — | — | — | 88 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on option awards issued to employees and directors—3rd qtr | — | — | — | — | — | — | 478,795 | — | — | — | — | — | 478,795 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on restricted stock issued to employees—3rd qtr | — | — | — | — | — | — | 88 | — | — | — | — | — | 88 | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of warrants—3rd qtr | — | — | — | — | 492,613 | 493 | 893,811 | — | — | — | — | — | 894,304 | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock for cash, net of offering costs—3rdqtr | — | — | — | — | 6,767,647 | 6,767 | 13,745,400 | — | — | — | — | — | 13,752,167 | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock for cash in connection with exercise of stock options—3rd qtr | — | — | — | — | 1,666 | 2 | 3,164 | — | — | — | — | — | 3,166 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on option awards issued to employees and directors—4thqtr | — | — | — | — | — | — | 378,827 | — | — | — | — | — | 378,827 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on restricted stock issued to employees—4thqtr | — | — | — | — | — | — | 88 | — | — | — | — | — | 88 | |||||||||||||||||||||||||||||||||||||||
Comprehensive loss: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | (35,573,114 | ) | (246,347 | ) | (35,819,461 | ) | ||||||||||||||||||||||||||||||||||||
Other comprehensive gain, foreign currency translation adjustment | — | — | — | — | — | — | — | — | — | 846,388 | — | — | 846,388 | |||||||||||||||||||||||||||||||||||||||
Comprehensive loss | — | — | — | — | — | — | — | — | — | — | — | — | (34,973,073 | ) | ||||||||||||||||||||||||||||||||||||||
Balance 12/31/07 (Predecessor) | — | $ | — | — | $ | — | 41,639,657 | $ | 41,640 | $ | 129,208,631 | 4,000,000 | $ | (25,974,000 | ) | $ | 718,926 | $ | (162,646,158 | ) | $ | 1,858,026 | $ | (56,792,935 | ) |
F-54
Table of Contents
Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Series A | Series B | Accumulated | Deficit | Total | ||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Preferred Stock | Common Stock | Additional | Treasury Stock | Other | During | Shareholders’ | |||||||||||||||||||||||||||||||||||||||||||||
Number of | Number of | Number of | Paid-In | Number of | Comprehensive | Development | Noncontrolling | Equity | ||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Capital | Shares | Amount | Income (Loss) | Stage | Interest | (Deficit) | ||||||||||||||||||||||||||||||||||||||||
Compensation expense on vested options related to non-employees—1st qtr | — | $ | — | — | $ | — | — | $ | — | $ | 44,849 | — | $ | — | $ | — | $ | — | $ | — | $ | 44,849 | ||||||||||||||||||||||||||||||
Compensation expense on option awards issued to employees and directors—1st qtr | — | — | — | — | — | — | 151,305 | — | — | — | — | — | 151,305 | |||||||||||||||||||||||||||||||||||||||
Expense in connection with modification of employee stock options —1st qtr | — | — | — | — | — | — | 1,262,815 | — | — | — | — | — | 1,262,815 | |||||||||||||||||||||||||||||||||||||||
Retirement of restricted stock | — | — | — | — | (165 | ) | (1 | ) | — | — | — | — | — | — | (1 | ) | ||||||||||||||||||||||||||||||||||||
Compensation expense on vested options related to non-employees—2nd qtr | — | — | — | — | — | — | 62,697 | — | — | — | — | — | 62,697 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on option awards issued to employees and directors—2nd qtr | — | — | — | — | — | — | 193,754 | — | — | — | — | — | 193,754 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on vested options related to non-employees—3rd qtr | — | — | — | — | — | — | 166,687 | — | — | — | — | — | 166,687 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on option awards issued to employees and directors—3rd qtr | — | — | — | — | — | — | 171,012 | — | — | — | — | — | 171,012 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on vested options related to non-employees—4th qtr | — | — | — | — | — | — | (86,719 | ) | — | — | — | — | — | (86,719 | ) | |||||||||||||||||||||||||||||||||||||
Compensation expense on option awards issued to employees and directors—4th qtr | — | — | — | — | — | — | 166,196 | — | — | — | — | — | 166,196 | |||||||||||||||||||||||||||||||||||||||
Comprehensive loss: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | (31,411,179 | ) | (1,680,676 | ) | (33,091,855 | ) | ||||||||||||||||||||||||||||||||||||
Reclassification of foreign exchange gain on substantial liquidation of foreign entities | — | — | — | — | — | — | — | — | — | (2,152,569 | ) | — | — | (2,152,569 | ) | |||||||||||||||||||||||||||||||||||||
Other comprehensive gain, foreign currency translation adjustment | — | — | — | — | — | — | — | — | — | 1,433,643 | — | — | 1,433,643 | |||||||||||||||||||||||||||||||||||||||
Comprehensive loss | — | — | — | — | — | — | — | — | — | — | — | — | (33,810,781 | ) | ||||||||||||||||||||||||||||||||||||||
Balance 12/31/08 (Predecessor) | — | $ | — | — | $ | — | 41,639,492 | $ | 41,639 | $ | 131,341,227 | 4,000,000 | $ | (25,974,000 | ) | $ | — | $ | (194,057,337 | ) | $ | 177,350 | $ | (88,471,121 | ) |
F-55
Table of Contents
Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Series A | Series B | Accumulated | Deficit | |||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Preferred Stock | Common Stock | Additional | Treasury Stock | Other | During | Total | |||||||||||||||||||||||||||||||||||||||||||||
Number of | Number of | Number of | Paid-In | Number of | Comprehensive | Development | Noncontrolling | Equity | ||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Capital | Shares | Amount | Income (Loss) | Stage | Interest | (Deficit) | ||||||||||||||||||||||||||||||||||||||||
Compensation expense on vested options related to non-employees—1st qtr | — | $ | — | — | $ | — | — | $ | — | $ | 1,746 | — | $ | — | $ | — | $ | — | $ | — | $ | 1,746 | ||||||||||||||||||||||||||||||
Compensation expense on option awards issued to employees and directors—1st qtr | — | — | — | — | — | — | 138,798 | — | — | — | — | — | 138,798 | |||||||||||||||||||||||||||||||||||||||
Conversion of debt into common stock – 1st qtr 2009 | — | — | — | — | 37,564 | 38 | 343,962 | — | — | — | — | — | 344,000 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on option awards issued to employees and directors—2nd qtr | — | — | — | — | — | — | 112,616 | — | — | — | — | — | 112,616 | |||||||||||||||||||||||||||||||||||||||
Conversion of debt into common stock – 2nd qtr 2009 | — | — | — | — | 1,143,324 | 1,143 | 10,468,857 | — | — | — | — | — | 10,470,000 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on option awards issued to employees and directors—2 months ended 8/31/09 | — | — | — | — | — | — | 35,382 | — | — | — | — | — | 35,382 | |||||||||||||||||||||||||||||||||||||||
Balance of expense due to cancellation of options issued to employees and directors in bankruptcy—2 months ended 8/31/09 | — | — | — | — | — | — | 294,912 | — | — | — | — | — | 294,912 | |||||||||||||||||||||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | — | — | — | 65,721,531 | 205,632 | 65,927,163 | |||||||||||||||||||||||||||||||||||||||
Comprehensive income | — | — | — | — | — | — | — | — | — | — | — | — | 65,927,163 | |||||||||||||||||||||||||||||||||||||||
Balance 8/31/09 (Predecessor) | — | $ | — | — | $ | — | 42,820,380 | $ | 42,820 | $ | 142,737,500 | 4,000,000 | $ | (25,974,000 | ) | $ | — | $ | (128,335,806 | ) | $ | 382,982 | $ | (11,146,504 | ) | |||||||||||||||||||||||||||
Cancellation of Predecessor common stock and fresh start adjustments | — | — | — | — | (42,820,380 | ) | (42,820 | ) | (150,426,331 | ) | (4,000,000 | ) | 25,974,000 | — | — | — | (124,495,151 | ) | ||||||||||||||||||||||||||||||||||
Elimination of Predecessor accumulated deficit and accumulated other comprehensive loss | — | — | — | — | — | — | — | — | — | — | 128,335,806 | — | 128,335,806 | |||||||||||||||||||||||||||||||||||||||
Balance 9/1/09 (Predecessor) | — | $ | — | — | $ | — | — | $ | — | $ | (7,688,831 | ) | — | $ | — | $ | — | $ | — | $ | 382,982 | $ | (7,305,849 | ) | ||||||||||||||||||||||||||||
Issuance of 11.4 million shares of common stock in connection with emergence from Chapter 11 | — | — | — | — | 11,400,000 | 11,400 | 5,460,600 | — | — | — | — | — | 5,472,000 | |||||||||||||||||||||||||||||||||||||||
Balance 9/1/09 (Successor) | — | $ | — | — | $ | — | 11,400,000 | $ | 11,400 | $ | (2,228,231 | ) | — | $ | — | $ | — | $ | — | $ | 382,982 | $ | (1,833,849 | ) | ||||||||||||||||||||||||||||
Issuance of 2.7 million shares of common stock in connection with the exit financing | — | — | — | — | 2,666,666 | 2,667 | 1,797,333 | — | — | — | — | — | 1,800,000 | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock on Oct. 28, 2009 | — | — | — | — | 25,501 | 25 | 58,627 | — | — | — | — | — | 58,652 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on shares issued to management | — | — | — | — | 600,000 | 600 | 167,400 | — | — | — | — | — | 168,000 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on option awards issued to directors | — | — | — | — | — | — | 326,838 | — | — | — | — | — | 326,838 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on option awards issued to non-employees | — | — | — | — | — | — | 386,380 | — | — | — | — | — | 386,380 | |||||||||||||||||||||||||||||||||||||||
Comprehensive loss: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | (5,049,999 | ) | 15,493 | (5,034,506 | ) | |||||||||||||||||||||||||||||||||||||
Comprehensive loss | — | — | — | — | — | — | — | — | — | — | — | — | (5,034,506 | ) | ||||||||||||||||||||||||||||||||||||||
Balance 12/31/09 (Successor) | — | $ | — | — | $ | — | 14,692,167 | $ | 14,692 | $ | 508,347 | — | $ | — | $ | — | $ | (5,049,999 | ) | $ | 398,475 | $ | (4,128,485 | ) |
F-56
Table of Contents
Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Series A | Series B | Accumulated | Deficit | |||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Preferred Stock | Common Stock | Additional | Treasury Stock | Other | During | Total | |||||||||||||||||||||||||||||||||||||||||||||
Number of | Number of | Number of | Paid-In | Number of | Comprehensive | Development | Noncontrolling | Equity | ||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Capital | Shares | Amount | Income (Loss) | Stage | Interest | (Deficit) | ||||||||||||||||||||||||||||||||||||||||
Issuance of 5.1 million shares of common stock in March 2010, net of issuance costs of $338,100 | — | $ | — | — | $ | — | 5,076,664 | $ | 5,077 | $ | 3,464,323 | — | $ | — | $ | — | $ | — | $ | — | $ | 3,469,400 | ||||||||||||||||||||||||||||||
Warrant fair value associated with common shares issued in March 2010 | — | — | — | — | — | — | (2,890,711 | ) | — | — | — | — | — | (2,890,711 | ) | |||||||||||||||||||||||||||||||||||||
Compensation expense on shares issued to management – 1Q10 | — | — | — | — | — | — | 18,000 | — | — | — | — | — | 18,000 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on option awards issued to directors/employees-1Q10 | — | — | — | — | — | — | 324,377 | — | — | — | — | — | 324,377 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on option awards issued to non-employees-1Q10 | — | — | — | — | — | — | 18,391 | — | — | — | — | — | 18,391 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on shares issued to management – 2Q10 | — | — | — | — | — | — | 18,000 | — | — | — | — | — | 18,000 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on option awards issued to directors/employees-2Q10 | — | — | — | — | — | — | 222,011 | — | — | — | — | — | 222,011 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on option awards issued to non-employees-2Q10 | — | — | — | — | — | — | 33,206 | — | — | — | — | — | 33,206 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on shares issued to management – 3Q10 | — | — | — | — | — | — | 18,000 | — | — | — | — | — | 18,000 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on option awards issued to directors/employees-3Q10 | — | — | — | — | — | — | 183,231 | — | — | — | — | — | 183,231 | |||||||||||||||||||||||||||||||||||||||
Compensation expense on option awards issued to non-employees-3Q10 | — | — | — | — | — | — | 7,724 | — | — | — | — | — | 7,724 | |||||||||||||||||||||||||||||||||||||||
Comprehensive loss: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | (8,281,245 | ) | 37,247 | (8,243,998 | ) | |||||||||||||||||||||||||||||||||||||
Comprehensive loss | — | — | — | — | — | — | — | — | — | — | — | — | (8,243,998 | ) | ||||||||||||||||||||||||||||||||||||||
Balance 9/30/10 (Successor) | — | $ | — | — | $ | — | 19,768,831 | $ | 19,769 | $ | 1,924,899 | — | $ | — | $ | — | $ | (13,331,244 | ) | $ | 435,722 | $ | (10,950,854 | ) | ||||||||||||||||||||||||||||
F-57
Table of Contents
Successor | Successor | Successor | Predecessor | Predecessor | |||||||||||||||||
Cumulative | Cumulative | ||||||||||||||||||||
period from | period from | ||||||||||||||||||||
September 1, | December 28, | ||||||||||||||||||||
Nine months | One month | 2009 (date of | Eight months | 1995 (date of | |||||||||||||||||
ended | ended | inception) to | ended | inception) to | |||||||||||||||||
September 30, | September 30, | September 30, | August 31, | August 31, | |||||||||||||||||
2010 | 2009 | 2010 | 2009 | 2009 | |||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||||
Net (loss) income | $ | (8,281,245 | ) | $ | (1,957,547 | ) | $ | (13,331,244 | ) | $ | 65,721,531 | $ | (115,322,121 | ) | |||||||
Adjustments to reconcile net (loss) income to net cash used in operating activities: | |||||||||||||||||||||
Reorganization items, net | — | — | 72,477 | (74,648,976 | ) | (74,648,976 | ) | ||||||||||||||
Expense related to equity awards and issuance of stock | 842,940 | 745,616 | 1,724,158 | 583,453 | 10,608,999 | ||||||||||||||||
Warrant income | (1,560,757 | ) | — | (1,241,673 | ) | — | — | ||||||||||||||
Uncompensated contribution of services | — | — | — | — | 755,556 | ||||||||||||||||
Depreciation and amortization | 5,612 | — | 5,612 | — | 9,091,990 | ||||||||||||||||
Provision for doubtful accounts | (12,839 | ) | 668 | (59,458 | ) | 501 | 337,810 | ||||||||||||||
Provision for excessive and/or obsolete inventory | (51,165 | ) | 5,126 | (39,501 | ) | 169,085 | 259,427 | ||||||||||||||
Amortization of debt issue costs | — | — | — | 985,237 | 4,107,067 | ||||||||||||||||
Amortization of debt discounts on investments | — | — | — | — | (508,983 | ) | |||||||||||||||
Loss on disposal or impairment of property and equipment | — | — | — | — | 17,668,477 | ||||||||||||||||
Foreign exchange (gain) loss on substantial liquidation of foreign entity | (3,031 | ) | (7,084 | ) | (5,645 | ) | 30,012 | (2,256,408 | ) | ||||||||||||
Net loss (income) attributable to non-controlling interest | 37,247 | (1,644 | ) | 52,740 | 205,632 | (1,799,523 | ) | ||||||||||||||
Change in operating assets and liabilities, excluding effects of acquisition: | |||||||||||||||||||||
Decrease (increase) in accounts receivable | 3,783 | 15,226 | 27,327 | 91,666 | (91,496 | ) | |||||||||||||||
Decrease (increase) in other receivables | (105 | ) | 4,126 | 4,635 | 23,632 | 218,978 | |||||||||||||||
Decrease (increase) in inventory | 69,086 | 23,508 | 100,009 | 29,543 | (455,282 | ) | |||||||||||||||
Decrease (increase) in prepaid expenses | (37,812 | ) | (301,488 | ) | (282,717 | ) | 628,197 | 34,341 | |||||||||||||
Decrease (increase) in other assets | — | 4,120 | 4,120 | (112,441 | ) | 71,000 | |||||||||||||||
Increase (decrease) in accounts payable | 828,353 | 4,184 | 935,975 | (230,592 | ) | 57,648 | |||||||||||||||
Increase (decrease) in accrued expenses, liabilities subject to compromise and other liabilities | 1,228,707 | (192,824 | ) | 802,913 | 1,868,162 | 3,311,552 | |||||||||||||||
Decrease in deferred revenue | — | — | — | (7,522 | ) | (50,096 | ) | ||||||||||||||
Net cash used in operating activities | (6,931,226 | ) | (1,658,013 | ) | (11,230,272 | ) | (4,662,880 | ) | (148,610,040 | ) | |||||||||||
Cash flows from investing activities: | |||||||||||||||||||||
Acquisition of Agera, net of cash acquired | — | — | — | — | (2,016,520 | ) | |||||||||||||||
Purchase of property and equipment | (29,675 | ) | — | (29,675 | ) | — | (25,515,170 | ) | |||||||||||||
Proceeds from the sale of property and equipment, net of selling costs | — | — | — | — | 6,542,434 | ||||||||||||||||
Purchase of investments | — | — | — | — | (152,998,313 | ) | |||||||||||||||
Proceeds from sales and maturities of investments | — | — | — | — | 153,507,000 | ||||||||||||||||
Net cash used in investing activities | (29,675 | ) | — | (29,675 | ) | — | (20,480,569 | ) | |||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||
Proceeds from convertible debt | — | — | — | — | 91,450,000 | ||||||||||||||||
Offering costs associated with the issuance of convertible debt | — | — | — | — | (3,746,193 | ) | |||||||||||||||
Proceeds from notes payable to shareholders, net | — | — | — | — | 135,667 | ||||||||||||||||
Proceeds from the issuance of preferred stock, net | — | — | — | — | 12,931,800 | ||||||||||||||||
Proceeds from the issuance of redeemable preferred stock series A, net | — | — | 2,870,000 | — | — | ||||||||||||||||
Proceeds from the issuance of redeemable preferred stock series B, net | 2,388,168 | — | 2,388,168 | — | — | ||||||||||||||||
Deposit received for issuance of shares in October 2010 | 130,000 | — | 130,000 | — | — | ||||||||||||||||
Proceeds from the issuance of common stock, net | 3,469,400 | 1,800,000 | 5,269,400 | — | 93,753,857 | ||||||||||||||||
Costs associated with secured loan and debtor-in-possession loan | — | — | — | (360,872 | ) | (360,872 | ) | ||||||||||||||
Proceeds from secured loan | — | — | — | 500,471 | 500,471 | ||||||||||||||||
Proceeds from debtor-in-possession loan | — | — | — | 2,750,000 | 2,750,000 | ||||||||||||||||
Payments on insurance loan | (47,795 | ) | (8,304 | ) | (69,686 | ) | (63,983 | ) | (79,319 | ) | |||||||||||
Cash dividends paid on preferred stock | (139,750 | ) | — | (139,750 | ) | — | (1,087,200 | ) | |||||||||||||
Cash paid for fractional shares of preferred stock | — | — | — | — | (38,108 | ) | |||||||||||||||
Merger and acquisition expenses | — | — | — | — | (48,547 | ) | |||||||||||||||
Repurchase of common stock | — | — | — | — | (26,024,280 | ) | |||||||||||||||
Net cash provided by financing activities | 5,800,023 | 1,791,696 | 10,448,132 | 2,825,616 | 170,137,276 | ||||||||||||||||
Effect of exchange rate changes on cash balances | 3,473 | 3,174 | 6,622 | (6,760 | ) | (36,391 | ) | ||||||||||||||
Net increase (decrease) in cash and cash equivalents | (1,157,405 | ) | 136,857 | (805,193 | ) | (1,844,024 | ) | 1,010,276 |
F-58
Table of Contents
Successor | Successor | Successor | Predecessor | Predecessor | |||||||||||||||||
Cumulative | Cumulative | ||||||||||||||||||||
period from | period from | ||||||||||||||||||||
September 1, | December 28, | ||||||||||||||||||||
Nine months | One month | 2009 (date of | Eight months | 1995 (date of | |||||||||||||||||
ended | ended | inception) to | ended | inception) to | |||||||||||||||||
September 30, | September 30, | September 30, | August 31, | August 31, | |||||||||||||||||
2010 | 2009 | 2010 | 2009 | 2009 | |||||||||||||||||
Cash and cash equivalents, beginning of period | 1,362,488 | 1,010,276 | 1,010,276 | 2,854,300 | — | ||||||||||||||||
Cash and cash equivalents, end of period | $ | 205,083 | $ | 1,147,133 | $ | 205,083 | $ | 1,010,276 | $ | 1,010,276 | |||||||||||
Supplemental disclosures of cash flow information: | |||||||||||||||||||||
Predecessor cash paid for interest | $ | — | $ | — | $ | — | $ | — | $ | 12,715,283 | |||||||||||
Successor cash paid for dividends | 139,750 | — | 139,750 | — | — | ||||||||||||||||
Non-cash investing and financing activities: | |||||||||||||||||||||
Predecessor deemed dividend associated with beneficial conversion of preferred stock | $ | — | $ | — | $ | — | $ | — | $ | 11,423,824 | |||||||||||
Predecessor preferred stock dividend | — | — | — | — | 1,589,861 | ||||||||||||||||
Successor accrued preferred stock dividend | 85,183 | — | 85,183 | — | — | ||||||||||||||||
Predecessor uncompensated contribution of services | — | — | — | — | 755,556 | ||||||||||||||||
Predecessor common stock issued for intangible assets | — | — | — | — | 540,000 | ||||||||||||||||
Predecessor common stock issued in connection with conversion of debt | — | — | — | 10,814,000 | 10,814,000 | ||||||||||||||||
Predecessor equipment acquired through capital lease | — | — | — | — | 167,154 | ||||||||||||||||
Successor/Predecessor financing of insurance premiums | — | — | 81,517 | — | 87,623 | ||||||||||||||||
Successor issuance of notes payable | — | — | — | 6,000,060 | 6,000,060 | ||||||||||||||||
Successor common stock issued in connection with reorganization | — | — | — | 5,472,000 | 5,472,000 | ||||||||||||||||
Successor intangible assets | — | — | — | 6,340,656 | 6,340,656 | ||||||||||||||||
Successor deferred tax liability in connection with fresh-start | — | — | — | 2,500,000 | 2,500,000 | ||||||||||||||||
Elimination of Predecessor common stock and fresh start adjustment | — | — | — | 14,780,320 | 14,780,320 | ||||||||||||||||
Successor subscription receivable | 792,000 | — | 792,000 | — | — | ||||||||||||||||
Successor accrued warrant liability | 5,579,319 | — | 5,895,511 | — | — | ||||||||||||||||
F-59
Table of Contents
(A Development Stage Company)
F-60
Table of Contents
F-61
Table of Contents
F-62
Table of Contents
F-63
Table of Contents
F-64
Table of Contents
F-65
Table of Contents
F-66
Table of Contents
F-67
Table of Contents
Predecessor | Reclassifications | Fresh Start | Successor | ||||||||||||||
August 31, | And Plan of | Accounting | September 1, | ||||||||||||||
2009 | Reorganization | Adjustments | 2009 | ||||||||||||||
Assets | |||||||||||||||||
Current assets: | |||||||||||||||||
Cash and cash equivalents | $ | 1,010,277 | $ | — | $ | — | $ | 1,010,277 | |||||||||
Accounts receivable, net | 246,684 | — | — | 246,684 | |||||||||||||
Inventory, net | 268,619 | — | — | 268,619 | |||||||||||||
Prepaid expenses | 221,225 | — | — | 221,225 | |||||||||||||
Other current assets | 4,140 | — | — | 4,140 | |||||||||||||
Current assets of discontinued operations, net | 785 | — | — | 785 | |||||||||||||
Total current assets | 1,751,730 | — | — | 1,751,730 | |||||||||||||
Intangible assets | — | — | 6,340,656 | (e) | 6,340,656 | ||||||||||||
Other assets | 1,671 | — | — | 1,671 | |||||||||||||
Total assets | $ | 1,753,401 | $ | — | $ | 6,340,656 | $ | 8,094,057 | |||||||||
Liabilities, Shareholders’ Equity/(Deficit) and Noncontrolling Interests | |||||||||||||||||
Current liabilities: | |||||||||||||||||
Current debt | $ | 8,304 | $ | — | $ | — | $ | 8,304 | |||||||||
Accounts payable | 137,401 | — | — | 137,401 | |||||||||||||
Accrued expenses | 849,395 | — | — | 849,395 | |||||||||||||
Liabilities subject to compromise | 82,181,741 | (82,181,741 | )(a) | — | — | ||||||||||||
Prepetition secured loan, subject to compromise | 500,471 | (500,471 | )(b) | — | — | ||||||||||||
Debtor-in-possession loan | 2,750,000 | (2,750,000 | )(b) | — | — | ||||||||||||
Current liabilities of discontinued operations | 25,668 | — | — | 25,668 | |||||||||||||
Total current liabilities | 86,452,980 | (85,432,212 | ) | — | 1,020,768 |
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Predecessor | Reclassifications | Fresh Start | Successor | ||||||||||||||
August 31, | And Plan of | Accounting | September 1, | ||||||||||||||
2009 | Reorganization | Adjustments | 2009 | ||||||||||||||
Other long term liabilities of continuing operations | 407,078 | — | — | 407,078 | |||||||||||||
Notes payable | — | 6,000,060 | (a) | — | 6,000,060 | ||||||||||||
Deferred tax liability | — | — | 2,500,000 | (f) | 2,500,000 | ||||||||||||
Total liabilities | 86,860,058 | (79,432,152 | ) | 2,500,000 | 9,927,906 | ||||||||||||
Commitments and contingencies | |||||||||||||||||
Shareholders’ Equity (Deficit): | |||||||||||||||||
Predecessor common stock | 42,821 | (42,821 | )(c) | — | — | ||||||||||||
Predecessor additional paid-in capital | 142,737,499 | (25,931,179 | )(c) | (116,806,320 | )(g) | — | |||||||||||
Predecessor treasury stock | (25,974,000 | ) | 25,974,000 | (c) | — | — | |||||||||||
Successor common stock | — | 11,400 | (a)(b) | — | 11,400 | ||||||||||||
Successor additional paid-in capital | — | 5,460,600 | (a)(b) | (7,688,831 | )(g) | (2,228,231 | ) | ||||||||||
Accumulated deficit during development stage | (202,295,959 | ) | 73,960,152 | (a)(b)(c)(d) | 128,335,807 | (g) | — | ||||||||||
Total shareholders’ equity (deficit) | (85,489,639 | ) | 79,432,152 | 3,840,656 | (2,216,831 | ) | |||||||||||
Noncontrolling interest | 382,982 | — | — | 382,982 | |||||||||||||
Total equity (deficit) and noncontrolling interests | (85,106,657 | ) | 79,432,152 | 3,840,656 | (1,833,849 | ) | |||||||||||
Total liabilities, shareholders’ equity/(deficit) and noncontrolling interests | $ | 1,753,401 | $ | — | $ | 6,340,656 | $ | 8,094,057 | |||||||||
(a) | This adjustment reflects the discharge of liabilities subject to compromise in accordance with the Plan of Reorganization and the issuance of $6 million in Notes payable and the issuance of 4,080,000 shares of Successor Company common stock in satisfaction of such claims. | |
(b) | This adjustment reflects the discharge of prepetition loan and debtor in-possession loan in accordance with the Plan of Reorganization and the issuance of 7,320,000 shares of the Successor Company common stock in satisfaction of such claims. | |
(c) | This adjustment reflects the cancellation of the Predecessor Company’s common stock, additional paid-in capital and treasury stock. | |
(d) | To reset accumulated deficit to zero for the consolidated subsidiaries included in the Plan of Reorganization. | |
(e) | This adjustment reflects the portion of the reorganization value which was attributed to identified intangible assets. | |
(f) | To record deferred tax liability as a result of the impact of fresh-start accounting fair value adjustments. | |
(g) | To reset Predecessor additional paid-in capital, accumulated deficit to zero and record net fresh-start adjustments. |
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Successor | Predecessor | ||||||||||||
One month ended | Two months ended | Eight months ended | |||||||||||
September 30, 2009 | August 31, 2009 | August 31, 2009 | |||||||||||
Professional fees (expense) | $ | — | $ | (334,738 | ) | $ | (533,271 | ) | |||||
Debt issuance costs related to DIP facility | — | (182,050 | ) | (295,757 | ) | ||||||||
Other debt issuance costs | — | — | (280,964 | ) | |||||||||
Gain on discharge of liabilities subject to compromise | — | 74,648,976 | 74,648,976 | ||||||||||
Total reorganization items, net | $ | — | $ | 74,132,188 | $ | 73,538,984 | |||||||
Successor | ||||||||
September 30, | December 31, | |||||||
2010 | 2009 | |||||||
Accrued professional fees | $ | 447,790 | $ | 147,410 | ||||
Accrued compensation | 360,136 | 7,208 | ||||||
Accrued interest | 858,538 | 246,578 | ||||||
Dividend on preferred stock payable | 85,183 | 42,740 | ||||||
Accrued other | 342,785 | 100,324 | ||||||
Accrued expenses | $ | 2,094,432 | $ | 544,260 | ||||
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September 30, | ||||
2010 | ||||
Expected life (years) | 4.5 years | |||
Interest rate | 1.1 | % | ||
Dividend yield | — | |||
Volatility | 63 | % |
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December 31, 2009 | Additions | Revaluation | September 30, 2010 | |||||||||||||
Preferred stock class A warrants | $ | 275,378 | $ | — | $ | 68,565 | $ | 343,943 | ||||||||
Preferred stock class B warrants | 207,611 | — | 136,332 | 343,943 | ||||||||||||
Preferred stock co-placement warrants | 152,287 | — | (14,710 | ) | 137,577 | |||||||||||
Common stock warrants | — | 2,654,752 | (453,877 | ) | 2,200,875 | |||||||||||
Common stock placement warrants | — | 235,958 | (101,211 | ) | 134,747 | |||||||||||
Preferred stock series B warrants | — | 2,466,374 | (1,100,968 | ) | 1,365,406 | |||||||||||
Preferred stock series B co-placement warrants | — | 222,235 | (94,888 | ) | 127,347 | |||||||||||
Total | $ | 635,276 | $ | 5,579,319 | $ | (1,560,757 | ) | $ | 4,653,838 | |||||||
Successor | ||||||||||||
Number of | Fair Value of | Balance as of | ||||||||||
Warrants | Warrants | September 30, 2010 | ||||||||||
Preferred stock class A warrants | 1,354,164 | $ | 0.25 | $ | 343,943 | |||||||
Preferred stock class B warrants | 1,354,164 | 0.25 | 343,943 | |||||||||
Preferred stock co-placement warrants | 541,667 | 0.25 | 137,577 | |||||||||
Common stock warrants | 8,291,885 | 0.27 | 2,200,875 | |||||||||
Common stock placement warrants | 507,666 | 0.27 | 134,747 | |||||||||
Preferred stock series B warrants | 5,711,666 | 0.24 | 1,365,406 | |||||||||
Preferred stock series B co-placement warrants | 456,934 | 0.28 | 127,347 | |||||||||
Total | 18,218,146 | $ | 4,653,838 | |||||||||
Successor | ||||||||||||
Number of | Fair Value of | Balance as of | ||||||||||
Warrants | Warrants | December 31, 2009 | ||||||||||
Preferred stock class A warrants | 501,543 | $ | 0.55 | $ | 275,378 | |||||||
Preferred stock class B warrants | 416,667 | 0.50 | 207,611 | |||||||||
Preferred stock co-placement warrants | 250,000 | 0.61 | 152,287 | |||||||||
Total | 1,168,210 | $ | 635,276 | |||||||||
Successor | Successor | |||||||
Three months ended | Nine months ended | |||||||
September 30, 2010 | September 30, 2010 | |||||||
Stock option compensation expense for employees and directors | $ | 183,231 | $ | 729,619 | ||||
Restricted stock expense | 18,000 | 54,000 | ||||||
Equity awards for nonemployees issued for services | 7,724 | 59,321 | ||||||
Total stock-based compensation expense | $ | 208,955 | $ | 842,940 | ||||
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Successor | Predecessor | |||||||
One month ended | Eight months ended | |||||||
September 30, 2009 | August 31, 2009 | |||||||
Stock option compensation expense for employees and directors | $ | 286,622 | $ | 581,707 | ||||
Restricted stock expense | 150,000 | — | ||||||
Equity awards for nonemployees issued for services | 308,994 | 1,746 | ||||||
Total stock-based compensation expense | $ | 745,616 | $ | 583,453 | ||||
Successor | ||||
Three Months Ended | ||||
September 30, 2010 | ||||
Expected life (years) | 4.9 years | |||
Interest rate | 1.5 | % | ||
Dividend yield | — | |||
Volatility | 63 | % |
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Segment | ||||||||||||
Successor | Successor | |||||||||||
Three Months Ended September 30, 2010 | Fibrocell Therapy | Agera | Consolidated | |||||||||
Total operating revenue | $ | — | $ | 243,677 | $ | 243,677 | ||||||
Segment loss from continuing operations | $ | (1,816,681 | ) | $ | 24,210 | $ | (1,792,471 | ) | ||||
Supplemental information related to continuing operations | ||||||||||||
Depreciation and amortization expense | $ | 2,472 | $ | — | $ | 2,472 |
Segment | ||||||||||||
Successor | Successor | |||||||||||
Nine Months Ended September 30, 2010 | Fibrocell Therapy | Agera | Consolidated | |||||||||
Total operating revenue | $ | — | $ | 716,809 | $ | 716,809 | ||||||
Segment income (loss) from continuing operations | $ | (8,219,599 | ) | $ | 13,722 | $ | (8,205,877 | ) | ||||
Supplemental information related to continuing operations | ||||||||||||
Depreciation and amortization expense | $ | 5,612 | $ | — | $ | 5,612 | ||||||
Total assets as of September 30, 2010 | 7,030,849 | 589,085 | 7,619,934 | |||||||||
Property and equipment, net | 24,062 | — | 24,062 | |||||||||
Intangible assets | 6,340,656 | — | 6,340,656 |
Segment | ||||||||||||
Predecessor | Predecessor | |||||||||||
One Month Ended September 30, 2009 | Isolagen Therapy | Agera | Consolidated | |||||||||
Total operating revenue | $ | — | $ | 75,029 | $ | 75,029 | ||||||
Segment loss from continuing operations | $ | (1,953,067 | ) | $ | (11,923 | ) | $ | (1,964,990 | ) | |||
Segment | ||||||||||||
Predecessor | Predecessor | |||||||||||
Two Months Ended August 31, 2009 | Isolagen Therapy | Agera | Consolidated | |||||||||
Total operating revenue | $ | — | $ | 130,740 | $ | 130,740 | ||||||
Segment income from continuing operations | $ | 71,465,993 | $ | 474,740 | $ | 71,940,733 | ||||||
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Segment | ||||||||||||
Predecessor | Predecessor | |||||||||||
Eight Months Ended August 31, 2009 | Isolagen Therapy | Agera | Consolidated | |||||||||
Total operating revenue | $ | — | $ | 538,620 | $ | 538,620 | ||||||
Segment loss from continuing operations | $ | 65,498,934 | $ | 381,306 | $ | 65,880,240 | ||||||
Supplemental information related to continuing operations | ||||||||||||
Depreciation and amortization expense | $ | — | $ | — | $ | — | ||||||
Total assets as of September 30, 2009 | 7,886,894 | 592,746 | 8,479,640 | |||||||||
Property and equipment, net | — | — | — | |||||||||
Intangible assets, net | — | — | — |
Revenue | Revenue | Revenue | |||||||||||
Successor | Successor | Predecessor | |||||||||||
Three months ended | One month ended | Two months ended | |||||||||||
September 30, 2010 | September 30, 2009 | August 31, 2009 | |||||||||||
United States | $ | 54,367 | $ | 16,259 | $ | 40,656 | |||||||
United Kingdom | 181,931 | 58,567 | 84,134 | ||||||||||
Other | 7,379 | 203 | 5,950 | ||||||||||
$ | 243,677 | $ | 75,029 | $ | 130,740 | ||||||||
Revenue | Revenue | Revenue | |||||||||||
Successor | Successor | Predecessor | |||||||||||
Nine months ended | One month ended | Eight months ended | |||||||||||
September 30, 2010 | September 30, 2009 | September 30, 2009 | |||||||||||
United States | $ | 176,215 | $ | 16,259 | $ | 187,289 | |||||||
United Kingdom | 472,721 | 58,567 | 308,244 | ||||||||||
Other | 67,873 | 203 | 43,087 | ||||||||||
$ | 716,809 | $ | 75,029 | $ | 538,620 | ||||||||
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INFORMATION NOT REQUIRED IN PROSPECTUS
SEC Registration Fee | $ | 118.24 | ||
Accounting Fees and Expenses | $ | 5,000 | ||
Legal Fees and Expenses | $ | 5,000 | ||
Miscellaneous | $ | 1,000 | ||
Total | $ | 11,118.24 |
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• | 7,320,000 shares, to its pre-bankruptcy lenders and the lenders that provided its debtor-in-possession facility, collectively; | ||
• | 3,960,000 shares, to the holders of the 3.5% convertible subordinated notes issued by Isolagen; | ||
• | 600,000 shares, to its management as of the effective date, which was its chief operating officer; | ||
• | 120,000 shares, to the holders of its general unsecured claims; and | ||
• | 2,666,666 shares, to the purchasers of shares in the exit financing (its pre-bankruptcy lenders, the lenders that provided the debtor-in-possession facility and the holders of the 3.5% convertible subordinated notes were permitted to participate in the exit financing). |
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Exhibit | ||
Number | Description | |
2.1 | Debtors’ First Amended Joint Plan of Reorganization dated July 30, 2009 and Disclosure Statement (filed as Exhibit 10.2 to the Company’s Form 10-Q for quarter ended June 30, 2009, filed on August 12, 2009 and as Exhibit 99.1 to our Form 8-K filed September 2, 2009) | |
3.1 | Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to our Form 8-K filed September 2, 2009) | |
3.2 | Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to our Form 8-K filed September 2, 2009) | |
3.3 | Certificate of Designation of Preferences, Rights and Limitations of Series A 6% Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to our Form 8-K filed October 14, 2009) | |
4.1 | Form of Common Stock Certificate (incorporated by reference to Exhibit 4.1 to our Form 10-Q filed November 23, 2009) | |
4.2 | Form of Class A/B Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.1 to our Form 8-K filed October 14, 2009) | |
4.3 | Form of 12.5% Promissory Note (incorporated by reference to Exhibit 10.1 to our Form 8-K filed September 10, 2009) | |
4.4 | Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.2 to our Form 10-Q filed November 23, 2009) | |
4.5 | Common Stock Purchase Warrant issued in March 2010 offering (incorporated by reference to Exhibit 4.1 to our Form 8-K filed March 3, 2010) | |
4.6 | Common Stock Purchase Warrant issued in July, September, October and November 2010 offerings (incorporated by reference to Exhibit 4.1 to our Form 8-K filed July 20, 2010) | |
4.7 | Form of Placement Agent Warrant issued in July, September, October and November 2010 offerings (incorporated by reference to our Form 8-K filed July 20, 2010) | |
*5 | Opinion of Cozen O’Connor | |
10.1 | Securities Purchase Agreement dated October 13, 2009 between the Company and the Series A Preferred Stock Purchasers (incorporated by reference to Exhibit 10.1 to our Form 8-K filed October 14, 2009) | |
10.2 | Employment Agreement between the Company and Declan Daly (incorporated by reference to Exhibit 10.1 to our Form 10-Q filed November 23, 2009) | |
10.3 | Consulting Agreement between the Company and Robert Langer (incorporated by reference to Exhibit 10.2 to our Form 10-Q filed November 23, 2009) | |
10.4 | 2009 Equity Incentive Plan (incorporated by reference to Exhibit 10.3 to our Form 10-Q filed November 23, 2009) | |
10.5 | Lease Agreement between Isolagen, Inc and The Hankin Group dates April 7, 2005 (previously filed as an exhibit to the company’s Form 8-K, filed on April 12, 2005) | |
10.6 | Purchase Option Agreement between Isolagen, Inc and 405 Eagleview Associates dated April 7, 2005 (previously filed as an exhibit to the company’s Form 8-K, filed on April 12, 2005) | |
10.7 | Intellectual Property Purchase Agreement between Isolagen Technologies, Inc., Gregory M. Keller, and PacGen Partners (previously filed as an exhibit to the company’s amended Form S-1, as filed on October 24, 2003) | |
10.8 | Employment Agreement between the Company and David Pernock (incorporated by reference to Exhibit 10.1 to our Form 8-K filed February 1, 2010) | |
10.9 | Registration Rights Agreement between the Company and the Series A Preferred Stock Purchasers, dated October 13, 2009 (incorporated by reference to Exhibit 10.2 to our Form 8-K filed October 14, 2009) | |
10.10 | Securities Purchase Agreement dated March 2, 2010 (incorporated by reference to Exhibit 10.1 to our Form 8-K filed March 3, 2010) | |
10.11 | Registration Rights Agreement dated March 2, 2010 (incorporated by reference to Exhibit 10.1 to our Form 8-K filed March 3, 2010) |
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Exhibit | ||
Number | Description | |
10.12 | Securities Purchase Agreement dated July 16, 2010 (incorporated by reference to Exhibit 10.1 to our Form 8-K filed July 20, 2010) | |
10.13 | Registration Rights Agreement dated July 16, 2010 (incorporated by reference to Exhibit 10.2 to our Form 8-K filed July 20, 2010) | |
10.14 | Employment Agreement between the Company and Declan Daly (incorporated by reference to Exhibit 10.1 to our Form 8-K filed August 27, 2010) | |
21 | List of Subsidiaries (previously filed as an exhibit to the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006) | |
*23.1 | Consent of BDO USA, LLP (formerly known as BDO Seidman, LLP) | |
*23.2 | Consent of Cozen O’Connor (included in Exhibit 5) | |
24.1 | Power of Attorney (included on signature page) |
* | Filed herewith. |
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FIBROCELL SCIENCE, INC. | ||||
By: | /s/ Declan Daly | |||
Name: | Declan Daly | |||
Title: | Chief Financial Officer, Chief Operating Officer and Controller | |||
Signature | Title | Date | ||
/s/ Declan Daly | Director, Chief Financial Officer, Chief Operating Officer and Controller | December 3, 2010 | ||
/s/ David Pernock | Chairman of the Board and Chief Executive Officer | December 3, 2010 | ||
/s/ Kelvin Moore | Director | December 3, 2010 | ||
/s/ Robert Langer | Director | December 3, 2010 | ||
/s/ Marc Mazur | Director | December 3, 2010 | ||
/s/ George Korkos | Director | December 3, 2010 |
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Exhibit | ||
Number | Description | |
2.1 | Debtors’ First Amended Joint Plan of Reorganization dated July 30, 2009 and Disclosure Statement (filed as Exhibit 10.2 to the Company’s Form 10-Q for quarter ended June 30, 2009, filed on August 12, 2009 and as Exhibit 99.1 to our Form 8-K filed September 2, 2009) | |
3.1 | Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to our Form 8-K filed September 2, 2009) | |
3.2 | Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to our Form 8-K filed September 2, 2009) | |
3.3 | Certificate of Designation of Preferences, Rights and Limitations of Series A 6% Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to our Form 8-K filed October 14, 2009) | |
4.1 | Form of Common Stock Certificate (incorporated by reference to Exhibit 4.1 to our Form 10-Q filed November 23, 2009) | |
4.2 | Form of Class A/B Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.1 to our Form 8-K filed October 14, 2009) | |
4.3 | Form of 12.5% Promissory Note (incorporated by reference to Exhibit 10.1 to our Form 8-K filed September 10, 2009) | |
4.4 | Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.2 to our Form 10-Q filed November 23, 2009) | |
4.5 | Common Stock Purchase Warrant issued in March 2010 offering (incorporated by reference to Exhibit 4.1 to our Form 8-K filed March 3, 2010) | |
4.6 | Common Stock Purchase Warrant issued in July, September, October and November 2010 offering (incorporated by reference to Exhibit 4.1 to our Form 8-K filed July 20, 2010) | |
4.7 | Form of Placement Agent Warrant issued in July, September, October and November 2010 offering (incorporated by reference to our Form 8-K filed July 20, 2010) | |
*5 | Opinion of Cozen O’Connor | |
10.1 | Securities Purchase Agreement dated October 13, 2009 between the Company and the Series A Preferred Stock Purchasers (incorporated by reference to Exhibit 10.1 to our Form 8-K filed October 14, 2009) | |
10.2 | Employment Agreement between the Company and Declan Daly (incorporated by reference to Exhibit 10.1 to our Form 10-Q filed November 23, 2009) | |
10.3 | Consulting Agreement between the Company and Robert Langer (incorporated by reference to Exhibit 10.2 to our Form 10-Q filed November 23, 2009) | |
10.4 | 2009 Equity Incentive Plan (incorporated by reference to Exhibit 10.3 to our Form 10-Q filed November 23, 2009) | |
10.5 | Lease Agreement between Isolagen, Inc and The Hankin Group dates April 7, 2005 (previously filed as an exhibit to the company’s Form 8-K, filed on April 12, 2005) | |
10.6 | Purchase Option Agreement between Isolagen, Inc and 405 Eagleview Associates dated April 7, 2005 (previously filed as an exhibit to the company’s Form 8-K, filed on April 12, 2005) | |
10.7 | Intellectual Property Purchase Agreement between Isolagen Technologies, Inc., Gregory M. Keller, and PacGen Partners (previously filed as an exhibit to the company’s amended Form S-1, as filed on October 24, 2003) | |
10.8 | Employment Agreement between the Company and David Pernock (incorporated by reference to Exhibit 10.1 to our Form 8-K filed February 1, 2010) | |
10.9 | Registration Rights Agreement between the Company and the Series A Preferred Stock Purchasers, dated October 13, 2009 (incorporated by reference to Exhibit 10.2 to our Form 8-K filed October 14, 2009) |
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Exhibit | ||
Number | Description | |
10.10 | Securities Purchase Agreement dated March 2, 2010 (incorporated by reference to Exhibit 10.1 to our Form 8-K filed March 3, 2010) | |
10.11 | Registration Rights Agreement dated March 2, 2010 (incorporated by reference to Exhibit 10.1 to our Form 8-K filed March 3, 2010) | |
10.12 | Securities Purchase Agreement dated July 16, 2010 (incorporated by reference to Exhibit 10.1 to our Form 8-K filed July 20, 2010) | |
10.13 | Registration Rights Agreement dated July 16, 2010 (incorporated by reference to Exhibit 10.2 to our Form 8-K filed July 20, 2010) | |
10.14 | Employment Agreement between the Company and Declan Daly (incorporated by reference to Exhibit 10.1 to our Form 8-K filed August 27, 2010) | |
21 | List of Subsidiaries (previously filed as an exhibit to the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006) | |
*23.1 | Consent of BDO USA, LLP (formerly known as BDO Seidman, LLP) | |
*23.2 | Consent of Cozen O’Connor (included in Exhibit 5) | |
24.1 | Power of Attorney (included on signature page) |
* | Filed herewith. |
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