Key Director Qualifications: Mr. Martin has extensive vaccine industry experience to assist raising the Company’sCompany's credibility in the scientific community and to assist with introductions to strategic partners, including large pharmaceutical companies.
SYLVAIN FLEURY, Ph.D.
Dr. Fleury was appointed as our Chief Scientific Officer in November 2003 and as a Director on January 11, 2006. Following a scientific audit in 1997, Dr. Fleury was the first consultant recommending to the Swiss investors the development of the parental biotech company that became later Mymetics Corporation. Dr. Fleury has a broad knowledge in molecular and cellular Immunology and antigen design, with over 20 years of expertise in infectious diseases and HIV-1/AIDS field. Researcher at the Centre Hospitalier Universitaire Vaudois (CHUV) in Lausanne from 1997 to 2003, working on the immune regeneration in HIV-1 infected subjects and gene therapy. Dr. Fleury obtained his B.Sc. in Microbiology in 1985 from the University of Montreal (Canada), his M.Sc. in Virology in 1988 from the Institut Armand-Frappier (Laval, Canada) and his Ph.D. in Immunology in 1992 from the Clinical Research Institute of Montreal, Canada. Dr. Fleury also worked at the Columbia Hospital in New-York before doing his post-doc training from 1993 to 1996 at the National Institutes of Allergy and Infectious Diseases (NIAID/NIH) in Bethesda (Maryland, USA). Consultant for several biotechs, Dr. Fleury is a recipient of numerous awards; published in leading scientific journals with a high impact such as Science, Cell, Nature, Nature Medicine and Circulation.
RONALD KEMPERS
Chief Operating Officer (since July 1, 2009) and was appointed Chief Financial Officer on August 1 2010. Senior business leader and entrepreneur, over 15 years of international business management, business development and finance experience with leading global corporations (Hewlett Packard, Oracle) and medical and IT start-ups. Mr. Kempers has a M.Sc. in Business Administration from the Erasmus University, Rotterdam School of Management and has continued further education with various executive courses, among which at IMD, Lausanne.
MARTINE REINDLE
Ms. Reindle was appointed as a Director on October 26, 2011. From 1983-2004, Ms. Reindle was a co-founder and President of Datasphere, an IT consulting and telecommunications software company primarily for financial institutions, that she sold in 2004 to the Fundtech Group. Since 2004 Ms. Reindle has been active as a business angel investor in eight medtech and IT companies where she provides business advice to management of those companies as a member of the board of directors or under a consulting agreement with these companies. Ms. Reindle graduated from the Institut d'Etudes Politiques in Grenoble, France where she received her degree in Economics and Finance. Mymetics expects to benefit from her business acumen and understanding the challenges of successfully growing an emerging biotech company.
CHRISTIAN ROCHET
Mr. Rochet iswas a Director of Mymetics and was its former Chief Executive Officer.Officer of the Company. Prior to joining Mymetics in July 2003, he had been an independent business consultant on development and diversification strategies for over 21 years. He became a major shareholder of Mymetics’ former French subsidiary Mymetics S.A. (f.k.a. Hippocampe S.A.) in 1997, on the scientific advice of Dr. Sylvain Fleury, Ph. D., and was a director of that company between 1999 and 2001. On July 31, 2003, Mr. Rochet was elected as President and Director and appointed as Chief Executive Officer of the Company. Mr. Rochet resigned as President and CEO of Mymetics effective July 1, 2009, and is currently employed by the Company as Senior Advisor to the President.President effective June 1, 2011.
Key Director Qualifications: Mr. Rochet has international finance and biotech industry experience to assist the Company with its financing efforts in Europe and the United States and strategic alliances with vaccine companies and French and Swiss educational and scientific institutions.
Dr. Staehelin is Senior Managing Partner of Fromer, Schultheiss and Staehelin, a law firm located in Basel, Switzerland. Dr. Staehelin focuses primarily on corporate and tax law. Dr. Staehelin has served as a member of this law firm since 1975. Dr. Staehelin also serves on the boards of various Swiss companies and is Chairman of the Chamber of Commerce of the Basel region. In addition, Dr. Staehelin is Managing Director of the “Swiss"Swiss Association of privately held Swiss Companies” and is a member of the Board of “economiesuisse,”"economiesuisse," The Swiss Business Federation. Dr. Staehelin received his Ph.D. degree in Law from the University of Basel. He formerly served as a member of the cantonal parliament of Basel.
Key Director Qualifications: Dr. Staehelin has significant international business experience, financial expertise through his role as a lawyer and board member of many companies conducting business on a global basis and knowledge of the Swiss legal system to assist the Company with its Swiss subsidiaries.
ERNEST M. STERN
Ernest M. Stern was appointed as a Director in January 2008. Mr. Stern is a partner in the law firm of Akerman Senterfitt LLP, which serves as outside U.S. counsel of Mymetics, where he specializes in securities and corporate law, representing public companies, investment banks and venture funds, and is the engagement partner for Mymetics. Mr. Stern received his undergraduate degree from Bowdoin College (Phi Beta Kappa,summa cum laude), and his J.D and LL.M (Taxation) degrees from Georgetown University Law Center (Case and Note Editor,Law and Policy in International Business).
Key Director Qualifications: Mr. Stern has extensive international business experience and contacts through his representation as a U.S. lawyer of many companies engaged in international business, knowledge of state and federal laws applicable to the Company and finance knowledge.
MARC GIRARD, DVM, D. SC.
Professor Girard has been a Consultant to Mymetics since January 2004. Prior to joining Mymetics, Professor Girard served as Director General, Fondation Merieux, in Lyon, France between 2001 and 2003. Between 1999 and 2001, Professor Girard served as Director, European Research Center for Virology and Immunology (CERVI), Lyon, France. Professor Girard has also taught as a professor since 1966, most recently between 1984 and 1999 at the Institut Pasteur, Paris, France where he also served as the Head of Laboratory of Molecular Virology, Department of Virology, Institut Pasteur, Paris between 1980 and 1999. During his career, Professor Girard has served the medical community in a variety of capacities, including as Head, HIV Vaccine Task Force, French National Agency for AIDS Research (ANRS), Paris between 1988 and 1998, the Chairman, Department of Virology, Institut Pasteur, Paris between 1997 and 1999 and the Chairman, European Consortium for an HIV Vaccine (EuroVac), Brussels between 1999 and 2002. Professor Girard received his D.V.M. (Alfort Veterinary College) in 1960, his D. Sc. (University of Paris) in 1967 and completed a post doctoral fellow in 1966 through studies with Prof. James Darnell, MIT, then Albert Einstein College of Medicine and Prof. David Baltimore and Renato Dulbecco of the Salk Institute. Professor Girard is also the published author of several articles in his field of study.
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SCIENTIFIC ADVISORY BOARD
In 2009 a ten member Scientific Advisory Board (SAB) was created, made up of eminent intellectuals from around the world with expertise related to the Company’s products as follows:
• | ● | Chairman of the Scientific Advisory Board —- Dr. Stanley Plotkin, Emeritus Professor WistarProfessorWistar Institute, University of Pennsylvania, consultant to Sanofi Pasteur, developed the rubella vaccine in 1960s; worked extensively on the development and application of other vaccines including polio, rabies, varicella, rotavirus and cytomegalovirus as well as senior roles at the Epidemic Intelligence Service, U.S. Public Health Service; Aventis Pasteur (medical and scientific director); and Sanofi Pasteur (executive advisor). |
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• | ● | Vice Chairman of the Scientific Advisory Board —- Dr. Marc Girard, has over 20 years20years of experience in the HIV-1 research field, past Director of the Mérieux Foundation and a consultant to the WHO and former Chairman of EuroVac (European Consortium for HIV vaccine). |
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• | | Dr. Morgane Bomsel, Cochin Institute, France |
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• | ● | Dr. Ruth Ruprecht, Harvard University, Dana Farber Cancer Institute, Boston USA |
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• | ● | Dr. Ronald H. Gray, Johns Hopkins University, Baltimore, USA |
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• | ● | Dr. Malegapuru William Makgoba, University of KwaZulu-Natal, Durban, South Africa |
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• | ● | Dr. Souleymane Mboup, Cheikh Anta DIOP University, Dakar, Sénégal |
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• | ● | Dr. Juliana McElrath, University of Washington, Seattle, USA |
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• | ● | Dr. Odile Puijalon, Pasteur Institute, Paris, France |
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• | ● | Dr. Caetano Reis e Sousa, Cancer Research UK, London, UK |
AUDIT COMMITTEE
The Company’s board of directors has appointed Ernest M. Stern and Dr. Thomas Staehelin to serve as members of its Audit Committee. The board of directors has determined that Dr. Staehelin qualifies as our “audit"audit committee financial expert”expert" and is independent as that term is defined under NASDAQ Rule 4200(a)(15).
CODE OF ETHICS
The registrant has adopted a Code of Ethics that applies to its executive officers, including its chief executive officer, as well as to the entire staff of the Company. A copy of the Code of Ethics is filed as an exhibit to Form 10-K annual report for the year ended December 31, 2010,2011, hereby incorporated by reference.
MEETINGS OF THE BOARD OF DIRECTORS
During October 2011, the Board of Mymetics appointed Martine Reindle, one of the founders of Mymetics, to the Board of Directors to fill a current vacancy on the Board.
In 2010,2011, our Board of Directors held ten meetings, onefive of which waswere conducted by telephone conference call, and acted by unanimous written consent fourthree times. All directors attended at least 75% of the total number of Board meetings. The Board of Directors has determined that Mr. Stern is independent within the meaning of Section 10A and Rule 10A-3 of the Exchange Act. The Company does not have a formal policy regarding attendance by members of the board of directors at our annual meetings of stockholders since we did not hold an annual meeting in 2010.2011.
Shareholders may contact our Board of Directors by mail addressed to the entire board of directors, or to one or more individual directors, at c/o Mymetics S.A., Biopole, Route de la Corniche 4, CH-1066 Epalinges, Switzerland, Attn: Secretary. All communications directed to our board of directors or individual directors in this manner will be relayed to the intended recipients.
We do not have a separate nominating committee and do not believe that such a committee is required at this time given our emphasis on research and development rather than active revenue generating business and our limited shareholder base.
DIRECTORS’ FEES
Our non-executive directors became eligible for compensation of E10,000 each for their services as directors in 2010.2011.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities and Exchange Act of 1934, as amended, requires that executive officers, directors and persons who own more than 10% of a registered class of the Company’s equity securities to file reports of ownership and changes of ownership with the SEC within specified due dates. These persons are required by SEC regulations to furnish the Company with copies of all such reports they file. Based solely on the review of the copies of such reports furnished, we believe that, with respect to our fiscal year ended December 31, 2010,2011, all of our executive officers, directors and 10% stockholders filed all required reports under Section 16(a) in a timely manner, except as follows: Dr Fleury due to incompatibility between the respectively Swiss and French legal procedures with the electronic filing procedure of the SEC.
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Compensation Committee Report
The Compensation Committee of the Board of Directors (the “Committee”) is composed of one employee Director, Mr. Jacques-François Martin, our President and CEO, and two non-Executive directors, Mr. Ernst M. Stern and Mr. Thomas Staehelin. The Compensation Committee does not have a charter.
The Committee met with management to review and discuss the Compensation Discussion and Analysis disclosures that follow. Based on such review and discussion, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Annual Report on Form 10-K, and the Board has approved that recommendation.
Compensation Discussion and Analysis
The Committee is responsible for reviewing and approving the compensation paid to executive officers of the Company, including salaries, bonuses, stock grants and stock options. Following review and approval by the Committee, action pertaining to executive compensation for the two named executive officers, Ronald Kempers, CFO and Sylvain Fleury, CSO for 20102011 is reported to the full Board of Directors for further consideration.
Compensation Philosophy
The Company’s compensation of executive officers and its philosophy regarding executive compensation is comprised of the following characteristics:
| (i) | | Competitive base salary; |
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| (ii) | | Granting stock awards as a portion of the total compensation, which vestwhichvest over a certain number of years; and |
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| (iii) | | Granting performance-based bonuses either in cash or common stock. |
We believe our executive compensation should be designed to allow us to attract, motivate and retain executives of a high caliber to permit us to remain competitive in our industry. We desire to maintain for now a uniformity of base salary compensation in light of the contributions each of the three principal executives has either made, or is expected to make, to our ability to remain in business and achieve the level of success that we have reached in meeting scientific results, primarily to date with the HIV-AIDS vaccine. We take into account the compensation paid at similarly situated companies, both within and outside of our industry, when determining executive compensation. We believe that by granting shares of our Common Stock to our executives which vest over a certain number of years, we will be able to encourage executives to remain with us.
Additionally, individual performance of the executive is considered as a factor in determining executive compensation, as well as the overall performance of the Company, which, since we are pre-revenue and primarily involved in research and development, includes, but is not limited to, fund raising and meeting our business plan milestones on time and within budget, including successful conclusion of strategic partner agreements and achieving the regulatory approvals to commercialize the HIV-AIDS and malaria vaccines, rather than earnings, revenue growth, cash flow and earnings per share which would be more typical for a company generating revenues and earnings. The Committee also uses subjective criteria it deems relevant in its reasonable discretion.
Compensation of Chief Executive Officer
Mr. Rochet joined the Company on July 31, 2003 as its Chief Executive Officer. Mr. Rochet was paid a base salary of E96,000 in calendar year 2004, the first full year of his employment by the Company. The Company had very little cash and Mr. Rochet deferred a significant portion of his salary in 2004, 2005, and 2006. As a result of Mr. Rochet’s efforts, we were able to stay in business and achieve important scientific goals for our HIV-AIDS vaccine that encouraged investment in us. Mr. Rochet’s salary was first increased to E120,000 in 2005, then E180,000 in 2006 and E216,000 in 2007 based upon his success in fund raising for the Company and negotiating an agreement with Pevion Biotech Ltd. to acquire the malaria vaccine.2007. Mr. Rochet resigned as our President and CEO effective July 1, 2009 and became the Senior Advisor to the new President on a full-time basis with an annual salary of E108,000. Mr. Rochet resigned as Senior Advisor to the new President effective June 1, 2011. Mr. Rochet is further entitled to finder’s fees of 3% on all funding amounts raised through his efforts. As
Mr. Jacques-François Martin joined us on July 1, 2009 as our President and Chief Executive Officer for an annual compensation of E240,000.
Compensation of Chief Financial Officer and Chief Operating Officer
As of January
Mr. Kempers joined us on July 1, 2010,2009 as Chief Operating Officer and was appointed Chief Financial Officer on August 1, 2010. Mr. Luebke’s annual salaryKempers was converted into CHF300,000, which is approximately equal to his previouspaid a base salary of E216,000 at the exchange rate at that time and included also the employer’s share of social contributions. A contractual clause allowing for a 3% success fee upon sale of the Company to, or licensing of technology to, a major partner has been deletedCHF300,000 in favor of stock options. Mr. Luebke resigned as CFO on July 30 2010 and was replaced by Ronald Kempers the Chief Operating Officer.calendar year 2011.
Compensation of Chief Scientific Officer
Dr. Fleury was the Company’s Scientific Consultant from July 31, 2003 until November 3, 2003 when he was appointed Chief Scientific Officer. Dr. Fleury was paid a base salary of E96,000 in calendar year 2004, the first full year of his employment by the Company. The Company had very little cash and Mr. Fleury deferred a significant portion of his salary in 2004, 2005, and 2006. As a result of Mr. Fleury’s efforts, the Company achieved important scientific goals for its HIV-AIDS vaccine that encouraged investment in the Company. Dr. Fleury’s salary was first increased to E120,000 in 2005, then E180,000 in 2006 and E216,000 in 2007 based upon his success in the animal studies leading to the Company’s ability to commence Phase I clinical trials for its HIV-AIDS vaccine in addition to his role in the negotiations in concluding an agreement with Pevion Biotech Ltd. to acquire the malaria vaccine. As of January 1, 2010, Dr Fleury’s salary has been converted into CHF300,000, which is approximately equal to his previous salary of E216,000 at the exchange rate at that time and included also the employer’s share of social contributions. A contractual clause allowing for a 3% success fee upon sale of the Company to, or licensing of technology to, a major partner was deleted in favor of stock options.
Compensation
Mr. Kempers joined us on July 1, 2009 as Chief Operating Officer and was appointed Chief Financial Officer on August 1, 2010. Mr. Kempers was paid a base salary of CHF300,000 in calendar year 2010.
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SUMMARY COMPENSATION TABLE
The following table sets forth for the last three fiscal years information on the annual compensation earned by our directors and officers.
Name and Principal Position | | | | | | | | | | | | | | | | | | | | | | | | | | | Changes in Pension Value and Nonqualified Deferred Compensation Compensation(E) | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Jacques-François Martin | | | | (1a | ) | | | 2011 | | | E | 240,000 | (4) | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | E | 240,000 | (4) |
(PEO) | | | | | | | | 2010 | | | E | 240,000 | (4) | | | - | | | | - | | | | - | | | E | 196,427 | | | | - | | | | - | | | E | 436,427 | (4) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2009 | | | E | 120,000 | (4) | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | E | 120,000 | (4) |
| | Changes in | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Pension Value and | | | |
| | Nonqualified | | | |
| | Non-Equity | | Deferred | | | |
| | Stock | | Option | | Incentive | | Compensation | | Total | |
| | | | Salary | | Bonus | | Awards | | Awards | | Plan | | Earnings | | Compensation | | Annual | |
Name and Principal Position | | Year | | (E) | | (E) | | (E) | | (E) | | (E) | | (E) | | (E) | | Compensation | |
Christian J.-F. Rochet (PEO) | (1a) | | 2010 | | | E108,000 | (5) | | — | | — | | — | | — | | — | | — | | | E108,000 | (5) | | | (1b | ) | | | 2011 | | | E | 45,000 | (4) | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | E | 45,000 | (4) |
| | 2009 | | | E180,000 | (5) | | — | | — | | — | | — | | — | | — | | | E180,000 | (5) | |
| | 2008 | | | E216,000 | (5) | | — | | — | | — | | — | | — | | — | | | E216,000 | (5) | |
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Jacques-François Martin (PEO) | (1b) | | 2010 | | | E240,000 | (5) | | — | | — | | — | | E196,427 | | — | | — | | | E436,427 | (5) | |
| | 2009 | | | E120,000 | (5) | | — | | — | | — | | — | | — | | — | | | E120,000 | (5) | |
| | 2008 | | — | | — | | — | | — | | — | | — | | — | | — | | |
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Ernst Luebke (PFO) | (2) | | 2010 | | | E163,200 | (5) | | — | | — | | — | | E 20,974 | | — | | — | | | E184,174 | (5) | |
| | 2009 | | | E216,000 | (5) | | — | | — | | — | | — | | — | | — | | | E216,000 | (5) | | | | | | | 2010 | | | E | 108,000 | (4) | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | E | 108,000 | (4) |
| | 2008 | | | E216,000 | (5) | | — | | — | | — | | — | | — | | — | | | E216,000 | (5) | | | | | | | 2009 | | | E | 180,000 | (4) | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | E | 180,000 | (4) |
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Sylvain Fleury, Ph. D. | (3) | | 2010 | | | E216,000 | (5) | | — | | — | | — | | E 29,364 | | — | | — | | | E245,364 | (5) | | | (2 | ) | | | 2011 | | | E | 216,000 | (4) | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | E | 216,000 | (4) |
| | 2009 | | | E216,000 | (5) | | — | | — | | — | | — | | — | | — | | | E216,000 | (5) | | | | | | | 2010 | | | E | 216,000 | (4) | | | - | | | | - | | | | - | | | E | 29,364 | | | | - | | | | - | | | E | 245,364 | (4) |
| | 2008 | | | E216,000 | (5) | | — | | — | | — | | — | | — | | — | | | E216,000 | (5) | | | | | | | 2009 | | | E | 216,000 | (4) | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | E | 216,000 | (4) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ronald Kempers | (4) | | 2010 | | | E216,000 | (5) | | — | | — | | — | | E 92,881 | | — | | — | | | E308,881 | (5) | | | (3 | ) | | | 2011 | | | E | 216,000 | (4) | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | E | 216,000 | (4) |
| | 2009 | | | E108,000 | (5) | | — | | — | | — | | — | | — | | — | | | E108,000 | (5) | | | | | | | 2010 | | | E | 216,000 | (4) | | | - | | | | - | | | | - | | | E | 92,881 | | | | - | | | | - | | | E | 308,881 | (4) |
| | 2008 | | — | | — | | — | | — | | — | | — | | — | | — | | | | | | | | 2009 | | | E | 108,000 | (4) | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | E | 108,000 | (4) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Thomas Staehelin, Dr. | (6) | | 2010 | | E 10,000 | | — | | — | | — | | — | | — | | — | | | E 10,000 | (6) | | | (5 | ) | | | 2011 | | | E | 10,000 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | E | 10,000 | (5) |
| | 2009 | | E 10,000 | | — | | — | | — | | — | | — | | — | | | E 10,000 | (6) | | | | | | | 2010 | | | E | 10,000 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | E | 10,000 | (5) |
| | 2008 | | E 10,000 | | — | | — | | E77,000 | | — | | — | | — | | | E 87,000 | (6) | | | | | | | 2009 | | | E | 10,000 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | E | 10,000 | (5) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ernie Stern | (7) | | 2010 | | E 10,000 | | — | | — | | — | | — | | — | | — | | | E 10,000 | (7) | | | (6 | ) | | | 2011 | | | E | 10,000 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | E | 10,000 | (6) |
| | 2009 | | E 10,000 | | — | | — | | — | | — | | — | | — | | | E 10,000 | (7) | | | | | | | 2010 | | | E | 10,000 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | E | 10,000 | (6) |
| | 2008 | | E 10,000 | | — | | — | | E77,000 | | — | | — | | — | | | E 87,000 | (7) | | | | | | | 2009 | | | E | 10,000 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | E | 10,000 | (6) |
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(1a) | Mr. Martin has been Mymetics’ President and Chief Executive Officer from July 1, 2009. |
(1b) | Mr. Rochet has been Mymetics’ President and Chief Executive Officer from July 31, 2003 to July 1, 2009. |
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(1b) | | Mr. Martin has been Mymetics’ President and Chief Executive Officer from July 1, 2009. |
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(2) | | Mr. Luebke has been Mymetics’ Chief Financial Officer and Treasurer since July 31, 2003 and our Secretary since August 29, 2003 and resigned as Chief Finanical Officer on July 30 2010. |
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(3) | | Dr. Fleury has been appointed as Mymetics’ Chief Scientific Officer on November 3, 2003. |
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(4) | (3) | Mr.Kempers has been Mymetics’ Chief Operating Officer since July 1, 2009 and was appointed Chief Financial Officer onOfficeron August 1 2010. |
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(5) | (4) | See below “Employment Agreements”"Employment Agreements". |
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(6) | (5) | Dr. Staehelin is a member of the Board of Directors and of the Audit Committee of the Company. He was elected on July 2nd, 2007 as2007as non-executive director and eligible for annual compensation of E10,000 for attendance at the Board meetings, whether in person or by telephone, and was awarded 500,000 shares of the Corporation’s common stock.telephone. |
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(7) | (6) | Mr. M. Stern is a member of the Board of Directors and of the Audit Committee of the Company. He was elected on January 21st, 2008 as non-executive director and eligible for annual compensation of E10,000 for attendance at the Board meetings, whether in person or by telephone, and was awarded 500,000 shares of the Corporation’s common stock.telephone.. |
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The tables
Thetables entitled “OPTION"OPTION EXERCISES AND STOCK VESTED,” “PENSION" "PENSION BENEFITS,” “NONQUALIFIED" "NONQUALIFIED DEFERRED COMPENSATION”COMPENSATION" and “DIRECTOR COMPENSATION”"DIRECTOR COMPENSATION" and the respective discussions related to those tables have been omitted because no compensation required to be reported in those tables was awarded to, earned by or paid to any of the named executive officers or directors in any of the covered fiscal years.
Employment Agreements
Under the Executive Employment Agreement for Christian Rochet, he was employed as CEO for five years commencing July 1, 2006. Mr. Rochet received an annual salary of E216,000, and was entitled to cash bonuses of 3% of all payments to be received from industry partners of the Company. If Mr. Rochet were terminated without cause or he terminated for good reason, he was entitled to a lump-sum payment equal to the greater of 24 months of his salary or the remaining term of his employment agreement. Mr. Rochet resigned as President and CEO of Mymetics effective July 1, 2009, Mr. Rochet is currently employed by us under a Consulting Agreement as Senior Advisor to the President (to be reviewed on monthly basis from January, 2011). Under this Consulting Agreement, Mr. Rochet receives an annual salary of CHF 150,000, which is approximately equal to E108,000. Christian Rochet is further entitled to finder’s fees of 3% on all funding amounts raised through his efforts.
Under the Executive Employment Agreement for Ernst Luebke, he was employed as CFO for five years commencing July 1, 2006. Mr. Luebke received an annual salary of E216,000. During the employment period, at the discretion of the Board and the Compensation Committee and based on the company’s performance and individual achievements, The executive shall be eligible for an annual bonus to be paid in cash, stock or stock options. Retroactive to January 1, 2010, Mr. Luebke’s salary has been converted into CHF300,000, which is approximately equal to his previous salary of E216,000, which included also the employer’s share of social contributions. Mr. Luebke resigned as Chief Financial Officer on July 30 2010.
Under the Executive Employment Agreement for Sylvain Fleury Ph.D., he is employed as CSO for five years commencing July 1, 2006. Dr. Fleury receives an annual salary of E216,000. During the employment period, at the discretion of the Board and the Compensation Committee and based on the company’s performance and individual achievements, The executive shall be eligible for an annual bonus to be paid in cash, stock or stock options. If Dr. Fleury is terminated without cause or he terminates for good reason, he is entitled to a lump-sum payment equal to the greater of 24 months of his salary or the remaining term of his employment agreement. Retroactive to January 1, 2010, Dr. Fleury’s salary has been converted into CHF300,000, which is approximately equal to his previous salary of E216,000, which included also the employer’s share of social contributions.
Under the Executive Employment Agreement for Ronald Kempers, he is employed as COO for five years commencing July 1, 2009. Mr. Kempers receives an annual salary of CHF300,000, which is approximately equal to E216,000 and is entitled to participate in the stock incentive plan. If Mr. Kempers is terminated without cause or he terminates for good reason, he is entitled to a lump-sum payment equal to the greater of 12 months of his salary or the remaining term of his employment agreement.salary.
22
The following table sets forth information about the beneficial ownership of our common stock as of March 24,December 31, 2011, by: (a) each of our named executive officers; (b) each of our directors; (c) each person known to the management to be the beneficial owner of more than 5% of our outstanding voting securities; and (d) all of our current executive officers and directors as a group. The following is based solely on statements and reports filed with the Securities and Exchange Commission or other information we believe to be reliable.
There were 213,963,166295,318,813 shares of our common stock outstanding on March 24, 2011.29, 2012. Beneficial ownership has been determined in accordance with the rules of the Securities and Exchange Commission. Except as indicated by the footnotes below, we believe, based on the information furnished, that the persons and entities named in the tables below have sole voting and investment power with respect to all shares of common stock that they beneficially own, subject to applicable community property laws.
In computing the number of shares of common stock beneficially owned by a person and the percentage ownership of that person, shares of common stock subject to options or warrants held by that person that are currently exercisable or exercisable within 60 days of March 24, 2011,29, 2012, are deemed outstanding. These shares of common stock, however, are not deemed outstanding for the purposes of computing the percentage ownership of any other person.
| | | | | | | | | | | | |
NAME AND ADDRESS OF | | TITLE | | | AMOUNT AND NATURE OF | | | | |
BENEFICIAL OWNER | | OF CLASS | | | BENEFICIAL OWNERSHIP | | | PERCENT OF CLASS | |
Round Enterprises Ltd. St. Peter Port, Guernsey | | Common | | | 59,650,905 | | | | 27.88 | % |
| | | | |
Dr. Thomas Staehelin (1) Director | | Common | | | 12,479,907 | | | | 5.83 | % |
| | | | |
Ernst Luebke (1) Secretary and Director | | Common | | | 8,329,546 | (2) | | | 3.89 | % |
| | | | |
Christian Rochet (1) Former Chief Executive Officer, and Director | | Common | | | 4,580,389 | (3) | | | 2.14 | % |
| | | | |
Dr. Sylvain Fleury (1) Chief Scientific Officer, and Director | | Common | | | 6,500,000 | (4) | | | 3.04 | % |
| | | | |
Jacques-François Martin (1) Chief Executive Officer, President and Director | | Common | | | 1,580,307 | | | | 0.74 | % |
| | | | |
Mr. Ernest M. Stern (1) Director and outside Counsel | | Common | | | 1,500,000 | | | | 0.70 | % |
| | | | |
Prof. Marc Girard (1)Consultant and member of the SAB | | Common | | | 500,000 | (5) | | | 0.23 | % |
| | | | |
Prof. Morgane Bomsel (1)Consultant and member of the SAB | | Common | | | 500,000 | (6) | | | 0.23 | % |
| | | | |
Mr. Ronald Kempers (1) CFO and COO | | Common | | | 100,000 | | | | 0.05 | % |
| | | | |
All current executive officers and directors as a group (7 persons) | | Common | | | 35,070,149 | | | | 16.39 | % |
NAME AND ADDRESS OF BENEFICIAL OWNER | | | | AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP | | | PERCENT OF CLASS | |
Round Enterprises Ltd. St. Peter Port, Guernsey | | Common | | | 121,705,078 | | | | 44.09 | % |
| | | | | | | | | | |
Dr. Thomas Staehelin (1) Director | | Common | | | 12,479,907 | | | | 4.52 | % |
| | | | | | | | | | |
Martine Reindle (1) Director | | Common | | | 9,022,653 | (2) | | | 3.27 | % |
| | | | | | | | | | |
Dr. Sylvain Fleury (1)Chief Scientific Officer, and Director | | Common | | | 6,500,000 | (4) | | | 2.35 | % |
| | | | | | | | | | |
Christian Rochet (1) Former Chief Executive Officer, and Director | | Common | | | 4,580,389 | (3) | | | 1.66 | % |
| | | | | | | | | | |
Jacques-François Martin (1) Chief Executive Officer, President and Director | | Common | | | 1,580,307 | | | | 0.57 | % |
| | | | | | | | | | |
Mr. Ernest M. Stern (1) Director and outside Counsel | | Common | | | 1,500,000 | | | | 0.54 | % |
| | | | | | | | | | |
Prof. Marc Girard (1)Consultant and member of the SAB | | Common | | | 500,000 | (5) | | | 0.18 | % |
| | | | | | | | | | |
Prof. Morgane Bomsel (1)Consultant and member of the SAB | | Common | | | 500,000 | (6) | | | 0.18 | % |
| | | | | | | | | | |
Mr. Ronald Kempers (1) CFO and COO | | Common | | | 100,000 | | | | 0.04 | % |
| | | | | | | | | | |
All current executive officers and directors as a group (7 persons) | | Common | | | 35,763,256 | | | | 12.96 | % |
| | |
(1) | | Address is Mymetics Corporation, c/o Mymetics S.A., Biopole, Route de la Corniche 4, CH-1066 Epalinges (Switzerland). |
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(2) | | Of which 2,829,5469,022,653 acquired at the early stages of the company and prior to being elected as director and appointed as officer, 1,000,000 acquired through conversion of unpaid salary and expenses, of which 500,000 was sold in July 2010, and 5,000,000 acquired as bonus.director. |
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(3) | | Of which 1,627,009 acquired prior to being elected as director and appointed as officer, 1,000,000 acquired through conversion of unpaid salary and expenses and 6,000,000 acquired as bonus, of which 4,046,620 was sold during year 2010. |
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(4) | | Of which 500,000 issued for services, 1,000,000 acquired through conversion of unpaid salary and expenses and 5,000,000 acquired as bonus. |
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(5) | | Of which 500,000 issued for services and 500,000 acquired through conversion of unpaid fees and expenses. 500,000 have been sold in 2006. |
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(6) | | 500,000 issued for services rendered. |
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During 2010,2011, there were no transactions, and there are currently no proposed transactions, to which we were, are or will be a party in which the amount involved exceeds $120,000 and in which any of our directors, executive officers or holders of more than 5% of our common stock, or an immediate family member of any of the foregoing, had or will have a direct or indirect interest.
Furthermore, it is our intention to ensure that all future transactions, including loans, between us and our officers, directors and principal stockholders and their affiliates are on terms no less favorable to us than those that could be obtained from unaffiliated third parties.
The following table provides information about the fees billed to us for professional services rendered by Peterson Sullivan LLP during fiscal years 20102011 and 2009:2010:
| | | | | | | | | | 2011 | | | 2010 | |
| | 2010 | | 2009 | | | | | | | |
Audit Fees | | $ | 75,839 | | $ | 76,072 | | | $ | 64,876 | | | $ | 75,839 | |
Audit-Related Fees | | — | | — | | | | - | | | | - | |
Tax Fees | | 15,905 | | 13,755 | | | | 13,409 | | | | 15,905 | |
All Other Fees | | — | | — | | | | - | | | | - | |
| | | | | | | | | | | | | |
Total | | $ | 91,744 | | $ | 89,827 | | | $ | 78,285 | | | $ | 91,744 | |
| | | | | | |
Audit Fees. Audit fees consist of fees for the audit of our annual financial statements or services that are normally provided in connection with statutory and regulatory annual and quarterly filings or engagements.
Audit-Related Fees. Audit-related fees consist of fees for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported as Audit Fees. During fiscal 20102011 and 2009,2010, no services were provided in this category.
Tax Fees. Tax fees consist of fees for tax compliance services, tax advice and tax planning. During fiscal 20102011 and 2009,2010, the services provided in this category included assistance and advice in relation to the preparation of corporate income tax returns.
All Other Fees. Any other fees not included in Audit Fees, Audit-Related Fees or Tax Fees.
Pre-Approval Policies and Procedures.
Our audit Committee pre-approved all services to be provided by Peterson Sullivan LLP.
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PART IV
| (a) | |
|
(a)(1) | | Index to Financial Statements |
| | | |
| | | Report of Independent Registered Public Accounting Firm |
| | | |
| | | Consolidated Balance Sheets |
| | | |
| | | Consolidated Statements of Operations and Comprehensive Loss |
| | | |
| | | Consolidated Statements of Changes in Shareholders’Shareholders' Equity (Deficit) |
| | | |
| | | Consolidated Statements of Cash Flows |
| | | |
| | | Notes to Consolidated Financial Statements |
| | | |
(a)(2) | | (a) | (2) | ALL OTHER SCHEDULES HAVE BEEN OMITTED BECAUSE THEY ARE NOT APPLICABLE OR THE REQUIRED INFORMATION IS SHOWN IN THE FINANCIAL STATEMENTS OR NOTES THERETO. |
| | | |
| | (3) | | List of Exhibits |
| | | |
| 2.1 | | Share Exchange Agreement dated December 13, 2001 between the Corporation and the stockholders of Mymetics S.A. listed on the signature page thereto (1) |
| | | |
| 2.2 | | Share Exchange Agreement dated December 13, 2001 between the Company and the stockholders of Mymetics S.A. listed on the signature page thereto (1) |
| | | |
| 2.3 | | Purchase Agreement dated October 17, 1998 between the Company and the majority stockholders of Nazca Holdings Ltd. (2) |
| | | |
| 2.4 | | Amendment to the Purchase Agreement dated October 17, 1998 between the Company and the majority stockholders of Nazca Holdings Ltd. (3) |
| | | |
| 2.5 | | Revised Purchase Agreement dated July 28, 1999 between the Company and the majority stockholders of Nazca Holdings Ltd. (4) |
| | | |
| 2.6 | | Share Exchange Agreement dated July 30, 2002 between the Company and the stockholders of Mymetics S.A. listed on the signature page thereto (5) |
| | | |
3(i) | 3 (i) | | Articles of Incorporation of the Company (as amended through May 10, 2002) (6) |
| | | |
3(ii) | 3 (ii) | | Bylaws (7) |
| | | |
| 4.1 | | Form of Specimen Stock Certificate (8) |
| | | |
| 4.2 | | Form of letter regarding Warrant (8) |
| | | |
| 4.3 | | Form of Share Exchange Agreement (8) |
| | | |
| 9.1 | | Voting and Exchange Trust Agreement dated March 19, 2001, among the Company, 6543 Luxembourg S.A. and MFC Merchant Bank S.A. (8) |
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| | | |
|
| 10.1 | | Services Agreement dated May 31, 2001, between the Company and MFC Merchant Bank, S.A.(7) |
| | | |
| 10.2 | | Employment Agreement dated May 3, 2001, between Pierre-Francois Serres and the Company (7) |
| | |
10.3 | | Indemnification Agreement dated March 19, 2001, between the Company and MFC Bancorp Ltd. (7) |
| | | |
| 10.4 | | Agreement dated for reference May 15, 2000, between the Company and Maarten Reidel (7) |
| | | |
| 10.5 | | Preferred Stock Redemption and Conversion Agreement dated for reference December 21, 2000, between the Company and Sutton Park International Ltd. (10) |
| | | |
| 10.6 | | Preferred Stock Conversion Agreement dated for reference December 21, 2000, between the Company and Med Net International Ltd. (11) |
| | | |
| 10.7 | | Preferred Stock Conversion Agreement dated December 21, 2000, between the Company and Dresden Papier GmbH (11) |
| | | |
| 10.8 | | Assignment Agreement dated December 29, 2000, among the Company, Mymetics S.A. and MFC Merchant Bank S.A. (1) |
| | | |
| 10.9 | | Credit Facility Agreement dated July 27, 2000, between MFC Merchant Bank, S.A. and the Company (1) |
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| 10.10 | | Amended Credit Facility Agreement dated for reference August 13, 2001, between MFC Merchant Bank, S.A. and the Company (16) |
| | | |
| 10.11 | | Second Amended Credit Facility Agreement dated for reference February 27, 2002, between MFC Merchant Bank, S.A. and the Company (16) |
| | | |
| 10.12 | | Amended and Restated Credit Facility Agreement dated for reference February 28, 2003, among MFC Merchant Bank, S.A., MFC Bancorp Ltd., and the Company (16) |
| | | |
| 10.13 | | Guarantee dated for reference February 28, 2003, by MFC Bancorp Ltd. to MFC Merchant Bank S.A. (16) |
| | | |
| 10.14 | | Shareholder Agreement dated March 19, 2001, among the Company,theCompany, the Holders of Class B Exchangeable Preferential Non-VotingPreferentialNon-Voting Shares of 6543 Luxembourg S.A. signatory thereto and 6543and6543 Luxembourg S.A.(8) |
| | | |
| 10.15 | | Support Agreement dated March 19, 2001, between the Company andCompanyand 6543 Luxembourg S.A. (8) |
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| 10.16 | | 1995 Qualified Incentive Stock Option Plan (12) |
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| 10.17 | | Amended 1994 Stock Option Plan (13) |
| | | |
| 10.18 | | 2001 ICHOR Company Stock Option Plan (7) |
| | | |
| 10.19 | | Employment Agreement dated March 18, 2002, between the Company and Peter P. McCann (14) |
| | | |
| 10.20 | | Consulting Agreement dated August 31, 2001, between the Company and Michael K. Allio (8) |
| | | |
| 10.21 | | Amendment to Consulting Agreement dated August 21, 2002, between the Company and Michael K. Allio (16) |
| | | |
| 10.22 | | Employment Agreement dated March 18, 2002, between the Company and Dr. Joseph D. Mosca (15) |
| | | |
| 10.23 | | Separationeparation Agreement and Release dated January 31, 2003,between the Company and Peter P. McCann (16) |
| | | |
| 10.24 | | Director and Non-Employee Stock Option Agreement dated July 19, 2001, between the Company and Robert Demers (8) |
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10.25 | | Director and Non-Employee Stock Option Agreement dated July 19, 2001, between the Company and Michael K. Allio (8) |
| | | |
| 10.26 | | Director and Non-Employee Stock Option Agreement dated July 19, 2001, between the Company and John M. Musacchio (8) |
| | | |
| 10.27 | | Director and Non-Employee Stock Option Agreement dated July 19, 2001, between the Company and Patrice Pactol (8) |
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| | | |
|
10.28 | 10.2 | | Director and Non-Employee Stock Option Agreement dated July 19, 2001, between the Company and Pierre-Francois Serres (8) |
| | | |
| 10.29 | | Director and Non-Employee Stock Option Agreement dated July 23, 2002, between the Company and Pierre-Francois Serres (16) |
| | | |
| 10.30 | | Director and Non-Employee Stock Option Agreement dated July 23 2002, between the Company and Patrice Pactol (16) |
| | | |
| 10.31 | | Director and Non-Employee Stock Option Agreement dated July 23, 2002,23,2002, between the Company and Robert Demers (16) |
| | | |
| 10.32 | | Director and Non-Employee Stock Option Agreement dated July 23, 2002, between the Company and John M. Musacchio (16) |
| | | |
| 10.33 | | Director and Non-Employee Stock Option Agreement dated July 23, 2002, between the Company and Michael K. Allio (16) |
| | | |
| 10.34 | | Director and Non-Employee Stock Option Agreement dated August 21, 2002, between the Company and Michael K. Allio (16) |
| | | |
| 10.35 | | Director and Non-Employee Stock Option Agreement dated June 20, 2002, between the Company and Peter P. McCann (16) |
| | | |
| 10.36 | | Director and Non-Employee Stock Option Agreement dated July 23, 2002, between the Company and Peter P. McCann (16) |
| | | |
| 10.37 | | Director and Non-Employee Stock Option Agreement dated February 6, 2003, between the Company and Peter P. McCann (16) |
| | | |
| 10.38 | | Patent Pledge Agreement dated November __, 2002 among Mymetics S.A., Mymetics Deutschland GmbH, the Company and MFC Merchant Bank S.A. (16) |
| | | |
| 10.39 | | Third Amendment to the Credit Facility Agreement dated for Reference December 31, 2006, between MFC Merchant Bank, S.A. and the Company (17) |
| | | |
| 10.40 | | Fourth Amendment to the Credit Facility Agreement dated for Reference February 16, 2005, between MFC Merchant Bank, S.A. and the Company (17) |
| | | |
| 10.41 | | Consulting Agreement dated for reference January 1, 2004, between the Centre Hospitalier Universitaire Vaudois (CHUV), the Company and Dr. Sylvain Fleury, Ph.D. (18) |
| | | |
| 10.42 | | Consulting Agreement dated for reference January 1, 2004, between the Company and Professor Marc Girard, DVM, D.Sc. (18) |
| | | |
| 10.43 | | Cooperation and Option Agreement dated March 10, 2005, between the Company and Pevion A.G. (18) |
| | | |
| 10.44 | | Consulting Agreement dated March 23, 2005, between the Company and Northern Light International. (18) |
| | |
10.45 | | Sixth Amended Credit Facility Agreement dated for reference December 31, 2005, between MFC Merchant Bank, S.A. and the CompanytheCompany (19) |
| | | |
| 10.46 | | Employment Agreement dated July 1, 2006, between the Company and Dr. Sylvain Fleury (20) |
| | | |
| 10.47 | | Employment Agreement dated July 1, 2006, between the Company and Christian Rochet (20) |
| | | |
| 10.48 | | Employment Agreement dated July 1, 2006, between the Company and Ernst Luebke (20) |
| | | |
| 10.49 | | License Agreement dated March 1, 2007, between the Company and Pevion Biotech Ltd. (21) |
27
| | | |
|
| 10.50 | | Settlement Agreement dated March 19, 2007 between Mymetics and MFC Merchant Bank S.A. (22) |
| | | |
| 10.51 | | Co-ownership Agreement dated January 8, 2008 between the Company, INSERM and Pevion Biotech Ltd. (23) |
| | | |
| 10.52 | | Co-ownership Agreement dated January 8, 2008 between the Company and INSERM (23) |
| | | |
| 10.53 | | Exploitation Agreement dated January 8, 2008 between the Company and INSERM (23) |
| | | |
| 10.54 | | Non-Executive Director Agreement dated 21 January between the Company and Mr Ernest M Stern.(24) |
| | | |
| 10.55 | | NGIN Material Transfer Agreement dated 11 February 2008 between the Company, Institute Cochin, Université Paris Descartes and Pevion Biotech.(25) |
| | | |
| 10.56 | | Acquisition & License Agreement dated 19 May 2008 between the Company and Pevion Biotech Ltd. (26) |
| | | |
| 10.57 | | Extension of Convertible Note Maturity Date Agreement dated 22 August 2008 between the Company, Anglo Irish Bank and Round Enterprises Ltd. (27) |
| | | |
| 10.58 | | Gp41 Manufacturing Technology Agreement dated 26 January 2009 between the Company and PX Therapeutics (28) |
| | | |
| 10.59 | | Share Purchase Agreement pursuant to which Mymetics purchased all issued and outstanding shares of capital stock of Bestewil Holding B.V. (“Bestewil”) from its parent, Norwood Immunology Limited (“NIL”), and all issued and outstanding shares of capital stock of Virosome Biologicals B.V. now held by Bestewil. (29) |
| | | |
| 10.60 | | Resignation of Prof Marc Girard as Head of vaccine development for reasons of personal health. (30) |
| | | |
| 10.61 | | Completion of Share Purchase Agreement pursuant to which Mymetics purchased all issued and outstanding shares of capital stock of Bestewil Holding B.V. and Virosome Biologicals B.V. including Unregistered Sales of Equity Securities, Financial Statements and Exhibits. (31) |
28
| | | |
|
| 10.62 | | Completion of Share Purchase Agreement pursuant to which Mymetics purchased all issued and outstanding shares of capital stock of Bestewil Holding B.V. and Virosome Biologicals B.V. including Unregistered Sales of equity Securities, further Financial Statements and Exhibits. (32) |
| | |
10.63 | | Election of Jacques-François Martin as a member of the Board of Directors and Chairman of the Board, resignation of Christian Rochet as President and CEO and agreement of Jacques-François Martin to serve as President and CEO. (33) |
| | | |
| 10.64 | | Consulting Agreement dated September 1, 2009, between the Company and Mr. Christian Rochet. |
| | | |
| 10.65 | | Resignation of Ernest Luebke as Chief Finance Officer and Board member. |
| | | |
| 10.66 | | Resignation of Christian Rochet as Senior Advisor to the President. |
| | | |
| 11.1 | | Statement Regarding Calculation of Per Share Earnings. |
| | | |
| | | Code of Ethics. |
| | | |
| | | List of Subsidiaries |
| | | |
| 24.1 | | Powers of Attorney (included on the signature page hereto) |
| | | |
| | | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14 of the Securities Exchange Act of 1934 |
| | | |
| | | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14 of the Securities Exchange Act of 1934 |
| | | |
| | | Section 1350 Certification of Chief Executive Officer and Chief Financial Officer |
| | | |
(1) | 101.INS | | Instance Document |
| | | |
| 101.SCH | | XBRL Taxonomy Extension Schema Document |
| | | |
| 101.CAL | | XBRL Taxonomy Extension Calculation Linkbase Document |
| | | |
| 101.DEF | | XBRL Taxonomy Extension Definition Linkbase Document |
| | | |
| 101.LAB | | XBRL Taxonomy Extension Label Linkbase Document |
| | | |
| 101.PRE | | XBRL Taxonomy Extension Presentation Linkbase Document |
(1) | Incorporated by reference to the Company’sCompany's Schedule 14C filed with the Securities and Exchange Commission on April 26, 2001. |
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(2) | | Incorporated by reference to the Company’sCompany's report on Form 8-K filed withfiledwith the Securities and Exchange Commission on October 22, 1998. |
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(3) | | Incorporated by reference to the Company’sCompany's report on Form 8-K/A filed with the Securities and Exchange Commission on April 15, 1999. |
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(4) | | Incorporated by reference to the Company’sCompany's report on Form 8-K/A filed with the Securities and Exchange Commission on August 13, 1999. |
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(5) | | Incorporated by reference to the Company’sCompany's Amendment No. 1 to Form S-1 filed with the Securities and Exchange Commission on August 8, 2002. |
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(6) | | Incorporated by reference to the Company’sCompany's report on Form 10-Q for the quarter ended March 31, 2002, filed with the Securities and Exchange Commission on May 15, 2002. |
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(7) | | Incorporated by reference to the Company’sCompany's report on Form 10-Q for the quarter ended June 30, 2001, filed with the Securities and Exchange Commission on August 14, 2001. |
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(8) | | Incorporated by reference to the Company’s Registration Statement on FormonForm S-1, File No. 333-88782, filed with the Securities and Exchange Commission on May 22, 2002. |
29
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(9) | | Incorporated by reference to the Company’sCompany's report on Form 8-K/A filed with the Securities and Exchange Commission on August 9, 2000. |
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(10) | | Incorporated by reference to Schedule 13D/A filed by MFC Bancorp Ltd. withWith the Securities and Exchange Commission on dated January 2, 2001. |
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(11) | | Incorporated by reference to the Company’sCompany's report on Form 10-K for the fiscal year ended December 31, 2000, filed with the Securities and Exchange Commission on March 14, 2001. |
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(12) | | Incorporate by reference to the Company’sCompany's Registration Statement on Form S-8, File No. 333-15831, filed with the Securities and Exchange Commission on November 8, 1996. |
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(13) | | Incorporated by reference to the Company’sCompany's Registration Statement on Form S-8, File No. 333-15829, filed with the Securities and Exchange Commission on November 8, 1996. |
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(14) | | Incorporated by reference to the Company’sCompany's report on Form 10-K for the fiscal year ended December 31, 2004, and filed with the Securities and Exchange Commission on March 29, 2002. |
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(15) | | Incorporated by reference to the Company’sCompany's report on Form 10-Q for the quarter ended March 31, 2002, filed with the Securities and Exchange Commission on May 15, 2002. |
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(16) | | Incorporated by reference to the Company’sCompany's report on Form 10-K for the fiscal year ended December 31, 2005, and filed with the Securities and Exchange Commission on March 27, 2003. |
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(17) | | Incorporated by reference to the Company’sCompany's report on Form 8-K filed with the Securities and Exchange Commission on February 18, 2005. |
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(18) | | Incorporated by reference to the Company’sCompany's report on Form 10-K for the fiscal year ended December 31, 2004, filed with the Securities and Exchange Commission on March 30, 2005. |
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(19) | | Incorporated by reference to the Company’sCompany's report on Form 10-K for the fiscal year ended December 31, 2005, filed with the Securities and Exchange Commission on April 17, 2006. |
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(20) | | Incorporated by reference to the Company’sCompany's report on Form 10-Q for the period ended June 30, 2006, and filed with the Securities and Exchange Commission on August 21, 2006. |
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(21) | | Incorporated by reference to the Company’sCompany's report on Form 10-K for the fiscal year ended December 31, 2006, filed with the Securities and Exchange Commission on April 17, 2007. |
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(22) | | Incorporated by reference to the Company’sCompany's report on Form 8-K filed with the Securities and Exchange Commission on March 21, 2007. |
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(23) | | Incorporated by reference to the Company’sCompany's report on Form 8-K filed with the Securities and Exchange Commission on January 14, 2008. |
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(24) | | Incorporated by reference to the Company’sCompany's report on Form 8-K filed with the Securities and Exchange Commission on January 25, 2008. |
30
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(25) | | Incorporated by reference to the Company’sCompany's report on Form 8-K filed with the Securities and Exchange Commission on February 19, 2008. |
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(26) | | Incorporated by reference to the Company’sCompany's report on Form 8-K filed with the Securities and Exchange Commission on May 19, 2008. |
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(27) | | Incorporated by reference to the Company’sCompany's report on Form 8-K filed with the Securities and Exchange Commission on June 30, 2008. |
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(28) | | Incorporated by reference to the Company’sCompany's report on Form 8-K filed with the Securities and Exchange Commission on January 30, 2009. |
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(29) | | Incorporated by reference to the Company’sCompany's report on Form 8-K filed with the Securities and Exchange Commission on March 5, 2009. |
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(30) | | Incorporated by reference to the Company’sCompany's report on Form 8-K filed with the Securities and Exchange Commission on March 9, 2009. |
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(31) | | Incorporated by reference to the Company’sCompany's report on Form 8-K filed with the Securities and Exchange Commission on June 16, 2009. |
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(32) | | Incorporated by reference to the Company’sCompany's report on Form 8-K/A filed with the Securities and Exchange Commission on June 22, 2009. |
|
(33) | | Incorporated by reference to the Company’sCompany's report on Form 8-K filed with the Securities and Exchange Commission on June 23, 2009. |
|
(34) | | Incorporated by reference to the Company’sCompany's Statement on Form 4, filed with the Securities and Exchange Commission on July 28, 2009. |
|
(35) | | Incorporated by reference to the Company’sCompany's Statement on Form 3 filed with the Securities and Exchange Commission on July 14, 2010. |
|
(36) | | Incorporated by reference to the Company’sCompany's Statement on Form 3 filed with the Securities and Exchange Commission on August 9, 2010. |
|
(37) | | Incorporated by reference to the Company’sCompany's report on Form 8-K filed with the Securities and Exchange Commission on August 10, 2010. |
|
(38) | | Incorporated by reference to the Company’sCompany's report on Form 8-K filed with the Securities and Exchange Commission on September 13, 2010. |
|
(39) | | Incorporated by reference to the Company’sCompany's Statement on Form 4 filed with the Securities and Exchange Commission on December 2, 2010. |
|
(40) | | Incorporated by reference to the Company’sCompany's Statement on Form 3 filed with the Securities and Exchange Commission on December 20, 2010. |
|
(c)(41) | | Financial StatementsIncorporated by reference to the Company's report on Form 8-K filed with the Securities and Exchange Commission on March 7, 2011. |
31
(42) | Incorporated by reference to the Company's report on Form 8-K filed with the Securities and Exchange Commission on March 16, 2011. |
(43) | Incorporated by reference to the Company's report on Form 8-K filed with the Securities and Exchange Commission on August 12, 2011. |
(44) | Incorporated by reference to the Company's report on Form 8-K filed with the Securities and Exchange Commission on October 4, 2011. |
(45) | Incorporated by reference to the Company's report on Form 8-K filed with the Securities and Exchange Commission on October 26, 2011. |
(c) Financial Statements
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders
Mymetics Corporation and Subsidiaries
Epalinges, Switzerland
We have audited the accompanying consolidated balance sheets of Mymetics Corporation (a development stage company) and Subsidiaries as of December 31, 20102011 and 2009,2010, and the related consolidated statements of operations and comprehensive loss, changes in shareholders’shareholders' equity (deficit), and cash flows for the years ended December 31, 20102011 and 2009,2010, and for the period from May 2, 1990 (inception) to December 31, 2010.2011. These financial statements are the responsibility of the Company’sCompany's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’sCompany's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Mymetics Corporation (a development stage company) and Subsidiaries as of December 31, 20102011 and 2009,2010, and the results of their operations and their cash flows for the years ended December 31, 20102011 and 2009,2010, and for the period from May 2, 1990 (inception) to December 31, 2010,2011, in conformity with accounting principles generally accepted in the United States.
The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has not developed a commercially viable product and, therefore, has not been able to generate revenue, which has resulted in significant losses. These conditions raise substantial doubt about the Company’sCompany's ability to continue as a going concern. Management’sManagement's plans regarding these matters are also described in Note 1. These consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.
/S/ PETERSON SULLIVAN LLP
Seattle, Washington
March 28, 201129, 2012
32
MYMETICS CORPORATION AND SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
December 31, 20102011 and 2009
(In Thousands of Euros)2010
| | | | | | | | |
| | 2010 | | | 2009 | |
ASSETS | | | | | | | | |
Current Assets | | | | | | | | |
Cash | | E | 1,811 | | | E | 2,959 | |
Receivables officer | | | 13 | | | | 6 | |
Receivables other | | | 87 | | | | 39 | |
Prepaid expenses | | | 30 | | | | 34 | |
| | | | | | |
Total current assets | | | 1,941 | | | | 3,038 | |
Property and equipment, net of accumulated depreciation of E212 and E100 at December 31, 2010 and 2009, respectively | | | 76 | | | | 232 | |
License contract, net of accumulated amortization of E337 at December 31, 2010 and E144 at December 31, 2009 | | | 2,357 | | | | 2,550 | |
In-process research and development | | | 2,266 | | | | 2,266 | |
Goodwill | | | 6,671 | | | | 6,671 | |
| | | | | | |
| | E | 13,311 | | | E | 14,757 | |
| | | | | | |
| | | | | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) | | | | | | | | |
Current Liabilities | | | | | | | | |
Accounts payable | | E | 1,340 | | | E | 1,540 | |
Taxes and social costs payable | | | 26 | | | | 41 | |
Current portion of notes payable to related parties, net of unamortized debt discount of E600 at December 31, 2010 (none at December 31, 2009) | | | 3,872 | | | | 5,740 | |
| | | | | | |
Total current liabilities | | | 5,238 | | | | 7,321 | |
Convertible notes payable to related parties, less current portion | | | 23,510 | | | | 21,722 | |
Convertible notes payable — other | | | 2,718 | | | | 2,593 | |
Acquisition-related contingent consideration | | | 3,212 | | | | 1,936 | |
| | | | | | |
Total liabilities | | | 34,678 | | | | 33,572 | |
| | | | | | | | |
Shareholders’ Equity (Deficit) | | | | | | | | |
Common stock, U.S. $.01 par value; 495,000,000 shares authorized; issued 213,963,166 at December 31, 2010 and 196,063,630 at December 31, 2009 | | | 1,888 | | | | 1,754 | |
| | | | | | | | |
Preferred stock, U.S. $.01 par value; 5,000,000 shares authorized; none issued or outstanding | | | — | | | | — | |
Additional paid-in capital | | | 29,602 | | | | 20,840 | |
Deficit accumulated during the development stage | | | (53,518 | ) | | | (42,090 | ) |
Accumulated other comprehensive income | | | 661 | | | | 681 | |
| | | | | | |
| | | (21,367 | ) | | | (18,815 | ) |
| | | | | | |
| | E | 13,311 | | | E | 14,757 | |
| | | | | | |
| | 2011 | | | 2010 | |
ASSETS | | | | | | |
Current Assets | | | | | | |
Cash | | E | 382 | | | E | 1,811 | |
Receivables officer | | | - | | | | 13 | |
Receivables other | | | 61 | | | | 87 | |
Prepaid expenses | | | 54 | | | | 30 | |
| | | | | | | | |
Total current assets | | | 497 | | | | 1,941 | |
Property and equipment, net of accumulated depreciation of E239 and E212 at December 31, 2011 and 2010, respectively | | | 49 | | | | 76 | |
License contract, net | | | - | | | | 2,357 | |
In-process research and development | | | 2,266 | | | | 2,266 | |
Goodwill | | | 6,671 | | | | 6,671 | |
| | E | 9,483 | | | E | 13,311 | |
| | | | | | | | |
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) | | | | | | | | |
Current Liabilities | | | | | | | | |
Accounts payable | | E | 1,025 | | | E | 1,340 | |
Taxes and social costs payable | | | 2 | | | | 26 | |
Current portion of notes payable to related parties, net of unamortized debt discount of NIL and E600 at December 31, 2011 and 2010, respectively | | | 5,711 | | | | 3,872 | |
Total current liabilities | | | 6,738 | | | | 5,238 | |
Convertible notes payable to related parties, less current portion | | | 25,331 | | | | 23,510 | |
Convertible notes payable - other | | | - | | | | 2,718 | |
Acquisition-related contingent consideration | | | 5,753 | | | | 3,212 | |
| | | | | | | | |
Total liabilities | | | 37,822 | | | | 34,678 | |
| | | | | | | | |
Shareholders' Equity (Deficit) | | | | | | | | |
| | | | | | | | |
Common stock, U.S. $.01 par value; 495,000,000 shares authorized; issued 276,017,339 at December 31, 2011 and 213,963,166 at December 31, 2010 | | | 2,322 | | | | 1,888 | |
| | | | | | | | |
Preferred stock, U.S. $.01 par value; 5,000,000 shares authorized; none issued or outstanding | | | - | | | | - | |
Additional paid-in capital | | | 32,732 | | | | 29,602 | |
Deficit accumulated during the development stage | | | (64,057 | ) | | | (53,518 | ) |
Accumulated other comprehensive income | | | 664 | | | | 661 | |
| | | (28,339 | ) | | | (21,367 | ) |
| | E | 9,483 | | | E | 13,311 | |
The accompanying notes are an integral part of these financial statements.
33
MYMETICS CORPORATION AND SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
For the Years Ended December 31, 2011 and 2010 and 2009 and
the Period from May 2, 1990 (Inception) to December 31, 2010
2011
(In Thousands of Euros, Except Per Share Data)
| | | | | | | | | | | | | |
| | Accumulated | | |
| | During | | |
| | Development | | |
| | Stage | | |
| | (May 2, 1990 to | | |
| | December 31, | | | | | | | | | Accumulated During Development Stage (May 2, 1990 to December 31,) | |
| | 2010 | | 2009 | | 2010) | | | 2011 | | | 2010 | | | 2011 | |
Revenues | | | | | | | | | | |
Sales | | E | 150 | | E | 136 | | E | 510 | | | E | 150 | | | E | 150 | | | E | 660 | |
Interest | | 4 | | 1 | | 39 | | | | 3 | | | | 4 | | | | 42 | |
Gain on extinguishment of debt | | — | | — | | 774 | | | | -- | | | | -- | | | | 774 | |
Gain on sales of equipment | | 68 | | — | | 68 | | | | 1 | | | | 68 | | | | 69 | |
Government grants | | 4 | | 13 | | 82 | | | | 25 | | | | 4 | | | | 107 | |
| | | | | | | | |
| | 226 | | 150 | | 1,473 | | |
| | | | 179 | | | | 226 | | | | 1,652 | |
Expenses | | | | | | | | | | | | | |
Research and development | | 3,083 | | 6,364 | | 23,749 | | | | 1,343 | | | | 3,083 | | | | 25,092 | |
General and administrative | | 3,320 | | 3,244 | | 21,325 | | | | 1,520 | | | | 3,320 | | | | 22,845 | |
Bank fee | | 1 | | 2 | | 938 | | | | 3 | | | | 1 | | | | 941 | |
Induced conversion cost | | 807 | | — | | 807 | | | | -- | | | | 807 | | | | 807 | |
Interest | | 2,834 | | 2,082 | | 6,868 | | | | 2,759 | | | | 2,834 | | | | 9,627 | |
Change in the fair value of acquisition-related contingent consideration | | 1,276 | | | (1,614 | ) | | | (338 | ) | | | 2,541 | | | | 1,276 | | | | 2,203 | |
Goodwill impairment | | — | | — | | 209 | | | | -- | | | | -- | | | | 209 | |
Depreciation | | 115 | | 82 | | 727 | | | | 57 | | | | 115 | | | | 784 | |
Amortization of intangibles | | 193 | | 144 | | 337 | | | | 144 | | | | 193 | | | | 481 | |
Directors’ fees | | 20 | | 42 | | 336 | | |
Impairment of license contract | | | | 2,213 | | | | -- | | | | 2,213 | |
Directors' fees | | | | 28 | | | | 20 | | | | 364 | |
Other | | 1 | | — | | 11 | | | | 109 | | | | 1 | | | | 120 | |
| | | | | | | | | | 10,717 | | | | 11,650 | | | | 65,686 | |
| | 11,650 | | 10,346 | | 54,969 | | |
| | | | | | | | |
Loss before income tax provision (benefit) | | | (11,424 | ) | | | (10,196 | ) | | | (53,496 | ) | |
Income tax (provision) benefit | | | (4 | ) | | 10 | | | (22 | ) | |
| | | | | | | | |
Loss before income tax provision | | | | (10,538 | ) | | | (11,424 | ) | | | (64,034 | ) |
Income tax provision | | | | (1 | ) | | | (4 | ) | | | (23 | ) |
Net loss | | | (11,428 | ) | | | (10,186 | ) | | | (53,518 | ) | | | (10,539 | ) | | | (11,428 | ) | | | (64,057 | ) |
| | | | | | | | | | | | | |
Other comprehensive income (loss) | | |
Foreign currency translation adjustment | | | (20 | ) | | | (4 | ) | | 661 | | |
| | | | | | | | |
Other comprehensive income (loss) Foreign currency translation adjustment | | | | 3 | | | | (20 | ) | | | 664 | |
Comprehensive loss | | E | (11,448 | ) | | E | (10,190 | ) | | E | (52,857 | ) | | E | (10,536 | ) | | E | (11,448 | ) | | E | (63,393 | ) |
| | | | | | | | |
Basic and diluted loss per share | | E | (0.06 | ) | | E | (0.05 | ) | | | E | (0.05 | ) | | E | (0.06 | ) | | | | |
| | | | | | |
The accompanying notes are an integral part of these financial statements.
34
MYMETICS CORPORATION AND SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’SHAREHOLDERS' EQUITY (DEFICIT)
For the Period from May 2, 1990 (Inception) to December 31, 2010
2011
(In Thousands of Euros)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | Accumulated | | | | |
| | | | | | | | | | | | | | | | | | | | | | Other | | | | |
| | | | | | | | | | | | | | | | | | Deficit | | | Comprehensive | | | | |
| | | | | | | | | | | | | | | | | | Accumulated | | | Income - Foreign | | | | |
| | | | | | | | | | | | | | Additional | | | During the | | | Currency | | | | |
| | Date of | | Number of | | | Par | | | Paid-in | | | Development | | | Translation | | | | |
| | Transaction | | Shares | | | Value | | | Capital | | | Stage | | | Adjustment | | | Total | |
Balance at May 2, 1990 | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Shares issued for cash | | June 1990 | | | 33,311,361 | | | | E119 | | | E | — | | | E | — | | | E | — | | | E | 119 | |
Net losses to December 31, 1999 | | | | | | | — | | | | — | | | | — | | | | (376 | ) | | | — | | | | (376 | ) |
Balance at December 31, 1999 | | | | | | | 33,311,361 | | | | 119 | | | | — | | | | (376 | ) | | | — | | | | (257 | ) |
| | | | | | | | | | | | | | | | | | | | | |
Bank fee | | | | | | | — | | | | — | | | | 806 | | | | — | | | | — | | | | 806 | |
Net loss for the year | | | | | | | — | | | | — | | | | — | | | | (1,314 | ) | | | — | | | | (1,314 | ) |
| | | | | | | | | | | | | | | | | | | | | |
Balance at December 31, 2000 | | | | | | | 33,311,361 | | | | 119 | | | | 806 | | | | (1,690 | ) | | | — | | | | (765 | ) |
Effect on capital structure resulting from a business combination | | March 2001 | | | 8,165,830 | | | | 354 | | | | (354 | ) | | | — | | | | — | | | | — | |
Issuance of stock purchase warrants in connection with credit facility | | March 2001 | | | — | | | | — | | | | 210 | | | | — | | | | — | | | | 210 | |
Issuance of shares for bank fee | | March 2001 | | | 1,800,000 | | | | 21 | | | | (21 | ) | | | — | | | | — | | | | — | |
Issuance of shares for bank fee | | June 2001 | | | 225,144 | | | | 3 | | | | (3 | ) | | | — | | | | — | | | | — | |
Issuance of shares for cash | | June 2001 | | | 1,333,333 | | | | 15 | | | | 2,109 | | | | — | | | | — | | | | 2,124 | |
Exercise of stock purchase warrants in repayment of debt | | June 2001 | | | 1,176,294 | | | | 13 | | | | 259 | | | | — | | | | — | | | | 272 | |
Exercise of stock purchase warrants for cash | | December 2001 | | | 3,250,000 | | | | 37 | | | | 563 | | | | — | | | | — | | | | 600 | |
Net loss for the year | | | | | | | — | | | | — | | | | — | | | | (1,848 | ) | | | — | | | | (1,848 | ) |
Translation adjustment | | | | | | | — | | | | — | | | | — | | | | — | | | | 100 | | | | 100 | |
| | | | | | | | | | | | | | | | | | | | | |
Balance at December 31, 2001 | | | | | | | 49,261,962 | | | | 562 | | | | 3,569 | | | | (3,538 | ) | | | 100 | | | | 693 | |
Exercise of stock options | | March 2002 | | | 10,000 | | | | — | | | | 8 | | | | — | | | | — | | | | 8 | |
Issuance of stock purchase warrants for bank fee | | June 2002 | | | — | | | | — | | | | 63 | | | | — | | | | — | | | | 63 | |
Exercise of stock purchase warrants in repayment of debt | | July 2002 | | | 1,625,567 | | | | 16 | | | | 396 | | | | — | | | | — | | | | 412 | |
Issuance of remaining shares from 2001 business combination | | August 2002 | | | 46,976 | | | | 1 | | | | (1 | ) | | | — | | | | — | | | | — | |
Net loss for the year | | | | | | | — | | | | — | | | | — | | | | (3,622 | ) | | | — | | | | (3,622 | ) |
Translation adjustment | | | | | | | — | | | | — | | | | — | | | | — | | | | 97 | | | | 97 | |
| | | | | | | | | | | | | | | | | | | | | |
Balance at December 31, 2002 | | | | | | | 50,944,505 | | | | 579 | | | | 4,035 | | | | (7,160 | ) | | | 197 | | | | (2,349 | ) |
| | | | | | | | | | | | | | | | | | | | | |
35
| Date of Transaction | | Number of Shares | | | Par Value | | | Additional Paid-in Capital | | | Deficit Accumulated During the Development Stage | | | Accumulated Other Comprehensive Income - Foreign Currency Translation Adjustment | | | Total | |
Balance at May 2, 1990 | | | | | | | | | | | | | | | | | | | |
Shares issued for cash | June 1990 | | | 33,311,361 | | | E | 119 | | | E | - | | | E | - | | | E | - | | | E | 119 | |
Net losses to December 31, 1999 | | | | - | | | | - | | | | - | | | | (376 | ) | | | - | | | | (376 | ) |
Balance at December 31, 1999 | | | | 33,311,361 | | | | 119 | | | | - | | | | (376 | ) | | | - | | | | (257 | ) |
Bank fee | | | | - | | | | - | | | | 806 | | | | - | | | | - | | | | 806 | |
Net loss for the year | | | | - | | | | - | | | | - | | | | (1,314 | ) | | | - | | | | (1,314 | ) |
Balance at December 31, 2000 | | | | 33,311,361 | | | | 119 | | | | 806 | | | | (1,690 | ) | | | - | | | | (765 | ) |
Effect on capital structure resulting from a business combination | March 2001 | | | 8,165,830 | | | | 354 | | | | (354 | ) | | | - | | | | - | | | | - | |
Issuance of stock purchase warrants in connection with credit facility | March 2001 | | | - | | | | - | | | | 210 | | | | - | | | | - | | | | 210 | |
Issuance of shares for bank fee | March 2001 | | | 1,800,000 | | | | 21 | | | | (21 | ) | | | - | | | | - | | | | - | |
Issuance of shares for bank fee | June 2001 | | | 225,144 | | | | 3 | | | | (3 | ) | | | - | | | | - | | | | - | |
Issuance of shares for cash | June 2001 | | | 1,333,333 | | | | 15 | | | | 2,109 | | | | - | | | | - | | | | 2,124 | |
Exercise of stock purchase warrants in repayment of debt | June 2001 | | | 1,176,294 | | | | 13 | | | | 259 | | | | - | | | | - | | | | 272 | |
Exercise of stock purchase warrants for cash | December 2001 | | | 3,250,000 | | | | 37 | | | | 563 | | | | - | | | | - | | | | 600 | |
Net loss for the year | | | | - | | | | - | | | | - | | | | (1,848 | ) | | | - | | | | (1,848 | ) |
Translation adjustment | | | | - | | | | - | | | | - | | | | - | | | | 100 | | | | 100 | |
Balance at December 31, 2001 | | | | 49,261,962 | | | | 562 | | | | 3,569 | | | | (3,538 | ) | | | 100 | | | | 693 | |
Exercise of stock options | March 2002 | | | 10,000 | | | | - | | | | 8 | | | | - | | | | - | | | | 8 | |
Issuance of stock purchase warrants for bank fee | June 2002 | | | - | | | | - | | | | 63 | | | | - | | | | - | | | | 63 | |
Exercise of stock purchase warrants in repayment of debt | July 2002 | | | 1,625,567 | | | | 16 | | | | 396 | | | | - | | | | - | | | | 412 | |
Issuance of remaining shares from 2001 business combination | August 2002 | | | 46,976 | | | | 1 | | | | (1 | ) | | | - | | | | - | | | | - | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | Accumulated | | | | |
| | | | | | | | | | | | | | | | | | | | | | Other | | | | |
| | | | | | | | | | | | | | | | | | Deficit | | | Comprehensive | | | | |
| | | | | | | | | | | | | | | | | | Accumulated | | | Income - Foreign | | | | |
| | | | | | | | | | | | | | Additional | | | During the | | | Currency | | | | |
| | Date of | | Number of | | | Par | | | Paid-in | | | Development | | | Translation | | | | |
| | Transaction | | Shares | | | Value | | | Capital | | | Stage | | | Adjustment | | | Total | |
Issuance of shares for services | | September 2003 | | | 400,000 | | | | 4 | | | | 29 | | | | — | | | | — | | | | 33 | |
Shares retired | | October 2003 | | | (51 | ) | | | — | | | | — | | | | — | | | | — | | | | — | |
Issuance of shares for services | | November 2003 | | | 1,500,000 | | | | 12 | | | | 100 | | | | — | | | | — | | | | 112 | |
Issuance of shares for cash | | December 2003 | | | 1,500,000 | | | | 12 | | | | 113 | | | | — | | | | — | | | | 125 | |
Issuance of stock purchase warrants for financing fee | | December 2003 | | | — | | | | — | | | | 12 | | | | — | | | | — | | | | 12 | |
Net loss for the year | | | | | | | — | | | | — | | | | — | | | | (2,786 | ) | | | — | | | | (2,786 | ) |
Translation adjustment | | | | | | | — | | | | — | | | | — | | | | — | | | | 453 | | | | 453 | |
| | | | | | | | | | | | | | | | | | | | | |
Balance at December 31, 2003 | | | | | | | 54,344,454 | | | | 607 | | | | 4,289 | | | | (9,946 | ) | | | 650 | | | | (4,400 | ) |
| | | | | | | | | | | | | | | | | | | | | |
Issuance of shares for services | | January 2004 | | | 550,000 | | | | 5 | | | | 27 | | | | — | | | | — | | | | 32 | |
Issuance of shares for cash | | January 2004 | | | 2,000,000 | | | | 17 | | | | 150 | | | | — | | | | — | | | | 167 | |
Issuance of stock purchase warrants for financing fee | | January 2004 | | | — | | | | — | | | | 40 | | | | — | | | | — | | | | 40 | |
Issuance of shares for cash | | February 2004 | | | 2,500,000 | | | | 21 | | | | 187 | | | | — | | | | — | | | | 208 | |
Issuance of stock purchase warrants for financing fee | | February 2004 | | | — | | | | — | | | | 62 | | | | — | | | | — | | | | 62 | |
Issuance of shares for services | | April 2004 | | | 120,000 | | | | 1 | | | | 11 | | | | — | | | | — | | | | 12 | |
Issuance of shares for bank fee | | May 2004 | | | 500,000 | | | | 4 | | | | 62 | | | | — | | | | — | | | | 66 | |
Issuance of shares for cash | | May 2004 | | | 2,000,000 | | | | 16 | | | | 148 | | | | — | | | | — | | | | 164 | |
Issuance of shares for services | | August 2004 | | | 250,000 | | | | 2 | | | | 26 | | | | — | | | | — | | | | 28 | |
Issuance of shares for cash | | August 2004 | | | 1,466,667 | | | | 12 | | | | 128 | | | | — | | | | — | | | | 140 | |
Issuance of stock purchase warrants for financing fee | | August 2004 | | | — | | | | — | | | | 46 | | | | — | | | | — | | | | 46 | |
Issuance of shares for services | | September 2004 | | | 520,000 | | | | 4 | | | | 29 | | | | — | | | | — | | | | 33 | |
Issuance of shares for cash | | September 2004 | | | 50,000 | | | | — | | | | 4 | | | | — | | | | — | | | | 4 | |
Issuance of shares for services | | October 2004 | | | 2,106,743 | | | | 16 | | | | 132 | | | | — | | | | — | | | | 148 | |
Issuance of shares for services | | November 2004 | | | 2,000,000 | | | | 15 | | | | 177 | | | | — | | | | — | | | | 192 | |
Issuance of shares for cash | | November 2004 | | | 40,000 | | | | — | | | | 4 | | | | — | | | | — | | | | 4 | |
Net loss for the year | | | | | | | — | | | | — | | | | — | | | | (2,202 | ) | | | — | | | | (2,202 | ) |
Translation adjustment | | | | | | | — | | | | — | | | | — | | | | — | | | | 191 | | | | 191 | |
| | | | | | | | | | | | | | | | | | | | | |
Balance at December 31, 2004 | | | | | | | 68,447,864 | | | E | 720 | | | E | 5,522 | | | E | (12,148 | ) | | E | 841 | | | E | (5,065 | ) |
| | | | | | | | | | | | | | | | | | | | | |
36
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | Accumulated | | | | |
| | | | | | | | | | | | | | | | | | | | | | Other | | | | |
| | | | | | | | | | | | | | | | | | Deficit | | | Comprehensive | | | | |
| | | | | | | | | | | | | | | | | | Accumulated | | | Income - Foreign | | | | |
| | | | | | | | | | | | | | Additional | | | During the | | | Currency | | | | |
| | Date of | | Number of | | | Par | | | Paid-in | | | Development | | | Translation | | | | |
| | Transaction | | Shares | | | Value | | | Capital | | | Stage | | | Adjustment | | | Total | |
Issuance of shares for services | | January 2005 | | | 500,000 | | | | 4 | | | | 83 | | | | — | | | | — | | | | 87 | |
Issuance of shares for services | | March 2005 | | | 200,000 | | | | 2 | | | | 33 | | | | — | | | | — | | | | 35 | |
Issuance of shares for services | | March 2005 | | | 1,500,000 | | | | 11 | | | | 247 | | | | — | | | | — | | | | 258 | |
Issuance of shares for services | | April 2005 | | | 60,000 | | | | 1 | | | | 10 | | | | — | | | | — | | | | 11 | |
Issuance of shares for cash | | May 2005 | | | 52,000 | | | | — | | | | 5 | | | | — | | | | — | | | | 5 | |
Issuance of shares for cash | | June 2005 | | | 50,000 | | | | — | | | | 3 | | | | — | | | | — | | | | 3 | |
Issuance of shares for cash | | June 2005 | | | 50,000 | | | | — | | | | 3 | | | | — | | | | — | | | | 3 | |
Issuance of shares for cash | | June 2005 | | | 343,500 | | | | 3 | | | | 14 | | | | — | | | | — | | | | 17 | |
Issuance of shares for cash | | June 2005 | | | 83,300 | | | | 1 | | | | 3 | | | | — | | | | — | | | | 4 | |
Issuance of shares for cash | | June 2005 | | | 100,000 | | | | 1 | | | | 4 | | | | — | | | | — | | | | 5 | |
Issuance of shares for cash | | July 2005 | | | 144,516 | | | | 1 | | | | 6 | | | | — | | | | — | | | | 7 | |
Issuance of shares for cash | | July 2005 | | | 144,516 | | | | 1 | | | | 6 | | | | — | | | | — | | | | 7 | |
Issuance of shares for cash | | July 2005 | | | 144,516 | | | | 1 | | | | 6 | | | | — | | | | — | | | | 7 | |
Issuance of shares for cash | | August 2005 | | | 206,452 | | | | 2 | | | | 8 | | | | — | | | | — | | | | 10 | |
Issuance of shares for cash | | August 2005 | | | 50,000 | | | | — | | | | 2 | | | | — | | | | — | | | | 2 | |
Issuance of shares for services | | September 2005 | | | 500,000 | | | | 4 | | | | 8 | | | | — | | | | — | | | | 12 | |
Issuance of shares for services | | September 2005 | | | 500,000 | | | | 4 | | | | 8 | | | | — | | | | — | | | | 12 | |
Issuance of shares for services | | September 2005 | | | 500,000 | | | | 4 | | | | 8 | | | | — | | | | — | | | | 12 | |
Issuance of shares for services | | September 2005 | | | 300,000 | | | | 3 | | | | 5 | | | | — | | | | — | | | | 8 | |
Issuance of shares for services | | September 2005 | | | 68,000 | | | | 1 | | | | 1 | | | | — | | | | — | | | | 2 | |
Issuance of shares for services | | September 2005 | | | 173,200 | | | | 1 | | | | 3 | | | | — | | | | — | | | | 4 | |
Issuance of shares for cash | | October 2005 | | | 87,459 | | | | 1 | | | | 2 | | | | — | | | | — | | | | 3 | |
Issuance of shares for services | | October 2005 | | | 185,000 | | | | 2 | | | | 6 | | | | — | | | | — | | | | 8 | |
Issuance of shares for cash | | October 2005 | | | 174,918 | | | | 1 | | | | 5 | | | | — | | | | — | | | | 6 | |
Issuance of shares for cash | | October 2005 | | | 116,612 | | | | 1 | | | | 3 | | | | — | | | | — | | | | 4 | |
Issuance of shares for cash | | November 2005 | | | 116,611 | | | | 1 | | | | 3 | | | | — | | | | — | | | | 4 | |
Issuance of shares for cash | | November 2005 | | | 390,667 | | | | 3 | | | | 3 | | | | — | | | | — | | | | 6 | |
Issuance of shares for services | | November 2005 | | | 20,000 | | | | — | | | | — | | | | — | | | | — | | | | — | |
Issuance of shares for services | | November 2005 | | | 20,000 | | | | — | | | | — | | | | — | | | | — | | | | — | |
Issuance of shares for services | | November 2005 | | | 20,000 | | | | — | | | | — | | | | — | | | | — | | | | — | |
Issuance of shares for services | | November 2005 | | | 500,000 | | | | 5 | | | | 9 | | | | — | | | | — | | | | 14 | |
Issuance of shares for services | | December 2005 | | | 140,000 | | | | 2 | | | | 2 | | | | — | | | | — | | | | 4 | |
Issuance of shares for cash | | December 2005 | | | 390,667 | | | | 3 | | | | 3 | | | | — | | | | — | | | | 6 | |
Issuance of shares for cash | | December 2005 | | | 390,666 | | | | 3 | | | | 3 | | | | — | | | | — | | | | 6 | |
Issuance of shares for cash | | December 2005 | | | 6,000,000 | | | | 50 | | | | 200 | | | | — | | | | — | | | | 250 | |
Net loss for the year | | | | | | | — | | | | — | | | | — | | | | (1,939 | ) | | | — | | | | (1,939 | ) |
Translation adjustment | | | | | | | — | | | | — | | | | — | | | | — | | | | (98 | ) | | | (98 | ) |
| | | | | | | | | | | | | | | | | | | | | |
Balance at December 31, 2005 | | | | | | | 82,670,464 | | | | 837 | | | | 6,227 | | | | (14,087 | ) | | | 743 | | | | (6,280 | ) |
| | | | | | | | | | | | | | | | | | | | | |
5337
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | Accumulated | | | | |
| | | | | | | | | | | | | | | | | | | | | | Other | | | | |
| | | | | | | | | | | | | | | | | | Deficit | | | Comprehensive | | | | |
| | | | | | | | | | | | | | | | | | Accumulated | | | Income - Foreign | | | | |
| | | | | | | | | | | | | | Additional | | | During the | | | Currency | | | | |
| | Date of | | Number of | | | Par | | | Paid-in | | | Development | | | Translation | | | | |
| | Transaction | | Shares | | | Value | | | Capital | | | Stage | | | Adjustment | | | Total | |
Issuance of shares for services | | January 2006 | | | 2,500,000 | | | | 21 | | | | 31 | | | | — | | | | — | | | | 52 | |
Issuance of shares for cash | | January 2006 | | | 4,000,000 | | | | 33 | | | | 132 | | | | — | | | | — | | | | 165 | |
Issuance of shares for services | | January 2006 | | | 100,000 | | | | 1 | | | | 2 | | | | — | | | | — | | | | 3 | |
Issuance of shares for cash | | March 2006 | | | 1,500,000 | | | | 12 | | | | 38 | | | | — | | | | — | | | | 50 | |
Issuance of shares for cash | | March 2006 | | | 2,500,000 | | | | 21 | | | | 62 | | | | — | | | | — | | | | 83 | |
Issuance of shares for cash | | March 2006 | | | 250,000 | | | | 2 | | | | 6 | | | | — | | | | — | | | | 8 | |
Issuance of shares for cash | | March 2006 | | | 1,500,000 | | | | 12 | | | | 38 | | | | — | | | | — | | | | 50 | |
Issuance of shares for services | | April 2006 | | | 100,000 | | | | 1 | | | | 4 | | | | — | | | | — | | | | 5 | |
Issuance of shares for cash | | May 2006 | | | 300,000 | | | | 2 | | | | 3 | | | | — | | | | — | | | | 5 | |
Issuance of shares for cash | | May 2006 | | | 300,000 | | | | 3 | | | | 7 | | | | — | | | | — | | | | 10 | |
Issuance of shares for cash | | May 2006 | | | 2,350,000 | | | | 18 | | | | 82 | | | | — | | | | — | | | | 100 | |
Debt Conversion — non cash | | May 2006 | | | 1,000,000 | | | | 8 | | | | 31 | | | | — | | | | — | | | | 39 | |
Issuance of shares for cash | | June 2006 | | | 2,600,000 | | | | 20 | | | | 80 | | | | — | | | | — | | | | 100 | |
Debt Conversion — non cash | | July 2006 | | | 1,000,000 | | | | 8 | | | | 72 | | | | — | | | | — | | | | 80 | |
Debt Conversion — non cash | | July 2006 | | | 1,000,000 | | | | 8 | | | | 72 | | | | — | | | | — | | | | 80 | |
Debt Conversion — non cash | | July 2006 | | | 1,000,000 | | | | 8 | | | | 72 | | | | — | | | | — | | | | 80 | |
Debt Conversion — non cash | | July 2006 | | | 500,000 | | | | 4 | | | | 36 | | | | — | | | | — | | | | 40 | |
Issuance of shares for services | | November 2006 | | | 300,000 | | | | 2 | | | | 4 | | | | — | | | | — | | | | 6 | |
Issuance of shares for cash | | November 2006 | | | 1,300,000 | | | | 10 | | | | 90 | | | | — | | | | — | | | | 100 | |
Issuance of shares for cash | | November 2006 | | | 1,280,000 | | | | 10 | | | | 90 | | | | — | | | | — | | | | 100 | |
Issuance of shares for cash | | December 2006 | | | 1,320,000 | | | | 10 | | | | 90 | | | | — | | | | — | | | | 100 | |
Issuance of shares for cash | | December 2006 | | | 1,320,000 | | | | 10 | | | | 90 | | | | — | | | | — | | | | 100 | |
Issuance of shares for cash | | December 2006 | | | 330,000 | | | | 3 | | | | 22 | | | | — | | | | — | | | | 25 | |
Net loss for the year | | | | | | | — | | | | — | | | | — | | | | (1,585 | ) | | | — | | | | (1,585 | ) |
Translation adjustment | | | | | | | — | | | | — | | | | — | | | | — | | | | 4 | | | | 4 | |
| | | | | | | | | | | | | | | | | | | | | |
Balance at December 31, 2006 | | | | | | | 111,020,464 | | | | 1,064 | | | | 7,381 | | | | (15,672 | ) | | | 747 | | | | (6,480 | ) |
| | | | | | | | | | | | | | | | | | | | | |
Table of Contents38
Net loss for the year | | | | - | | | | - | | | | - | | | | (3,622 | ) | | | - | | | | (3,622 | ) |
Translation adjustment | | | | - | | | | - | | | | - | | | | - | | | | 97 | | | | 97 | |
Balance at December 31, 2002 | | | | 50,944,505 | | | | 579 | | | | 4,035 | | | | (7,160 | ) | | | 197 | | | | (2,349 | ) |
Issuance of shares for services | September 2003 | | | 400,000 | | | | 4 | | | | 29 | | | | - | | | | - | | | | 33 | |
Shares retired | October 2003 | | | (51 | ) | | | - | | | | - | | | | - | | | | - | | | | - | |
Issuance of shares for services | November 2003 | | | 1,500,000 | | | | 12 | | | | 100 | | | | - | | | | - | | | | 112 | |
Issuance of shares for cash | December 2003 | | | 1,500,000 | | | | 12 | | | | 113 | | | | - | | | | - | | | | 125 | |
Issuance of stock purchase warrants for financing fee | December 2003 | | | - | | | | - | | | | 12 | | | | - | | | | - | | | | 12 | |
Net loss for the year | | | | - | | | | - | | | | - | | | | (2,786 | ) | | | - | | | | (2,786 | ) |
Translation adjustment | | | | - | | | | - | | | | - | | | | - | | | | 453 | | | | 453 | |
Balance at December 31, 2003 | | | | 54,344,454 | | | | 607 | | | | 4,289 | | | | (9,946 | ) | | | 650 | | | | (4,400 | ) |
Issuance of shares for services | January 2004 | | | 550,000 | | | | 5 | | | | 27 | | | | - | | | | - | | | | 32 | |
Issuance of shares for cash | January 2004 | | | 2,000,000 | | | | 17 | | | | 150 | | | | - | | | | - | | | | 167 | |
Issuance of stock purchase warrants for financing fee | January 2004 | | | - | | | | - | | | | 40 | | | | - | | | | - | | | | 40 | |
Issuance of shares for cash | February 2004 | | | 2,500,000 | | | | 21 | | | | 187 | | | | - | | | | - | | | | 208 | |
Issuance of stock purchase warrants for financing fee | February 2004 | | | - | | | | - | | | | 62 | | | | - | | | | - | | | | 62 | |
Issuance of shares for services | April 2004 | | | 120,000 | | | | 1 | | | | 11 | | | | - | | | | - | | | | 12 | |
Issuance of shares for bank fee | May 2004 | | | 500,000 | | | | 4 | | | | 62 | | | | - | | | | - | | | | 66 | |
Issuance of shares for cash | May 2004 | | | 2,000,000 | | | | 16 | | | | 148 | | | | - | | | | - | | | | 164 | |
Issuance of shares for services | August 2004 | | | 250,000 | | | | 2 | | | | 26 | | | | - | | | | - | | | | 28 | |
Issuance of shares for cash | August 2004 | | | 1,466,667 | | | | 12 | | | | 128 | | | | - | | | | - | | | | 140 | |
Issuance of stock purchase warrants for financing fee | August 2004 | | | - | | | | - | | | | 46 | | | | - | | | | - | | | | 46 | |
Issuance of shares for services | September 2004 | | | 520,000 | | | | 4 | | | | 29 | | | | - | | | | - | | | | 33 | |
Issuance of shares for cash | September 2004 | | | 50,000 | | | | - | | | | 4 | | | | - | | | | - | | | | 4 | |
Issuance of shares for services | October 2004 | | | 2,106,743 | | | | 16 | | | | 132 | | | | - | | | | - | | | | 148 | |
Issuance of shares for services | November 2004 | | | 2,000,000 | | | | 15 | | | | 177 | | | | - | | | | - | | | | 192 | |
Issuance of shares for cash | November 2004 | | | 40,000 | | | | - | | | | 4 | | | | - | | | | - | | | | 4 | |
Net loss for the year | | | | - | | | | - | | | | - | | | | (2,202 | ) | | | - | | | | (2,202 | ) |
Translation adjustment | | | | - | | | | - | | | | - | | | | - | | | | 191 | | | | 191 | |
Balance at December 31, 2004 | | | | 68,447,864 | | | | 720 | | | | 5,522 | | | | (12,148 | ) | | | 841 | | | | (5,065 | ) |
Issuance of shares for services | January 2005 | | | 500,000 | | | | 4 | | | | 83 | | | | - | | | | - | | | | 87 | |
Issuance of shares for services | March 2005 | | | 200,000 | | | | 2 | | | | 33 | | | | - | | | | - | | | | 35 | |
Issuance of shares for services | March 2005 | | | 1,500,000 | | | | 11 | | | | 247 | | | | - | | | | - | | | | 258 | |
Issuance of shares for services | April 2005 | | | 60,000 | | | | 1 | | | | 10 | | | | - | | | | - | | | | 11 | |
Issuance of shares for cash | May 2005 | | | 52,000 | | | | - | | | | 5 | | | | - | | | | - | | | | 5 | |
Issuance of shares for cash | June 2005 | | | 50,000 | | | | - | | | | 3 | | | | - | | | | - | | | | 3 | |
Issuance of shares for cash | June 2005 | | | 50,000 | | | | - | | | | 3 | | | | - | | | | - | | | | 3 | |
Issuance of shares for cash | June 2005 | | | 343,500 | | | | 3 | | | | 14 | | | | - | | | | - | | | | 17 | |
Issuance of shares for cash | June 2005 | | | 83,300 | | | | 1 | | | | 3 | | | | - | | | | - | | | | 4 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | Accumulated | | | | |
| | | | | | | | | | | | | | | | | | | | | | Other | | | | |
| | | | | | | | | | | | | | | | | | Deficit | | | Comprehensive | | | | |
| | | | | | | | | | | | | | | | | | Accumulated | | | Income - Foreign | | | | |
| | | | | | | | | | | | | | Additional | | | During the | | | Currency | | | | |
| | Date of | | | Number of | | | Par | | | Paid-in | | | Development | | | Translation | | | | |
| | Transaction | | | Shares | | | Value | | | Capital | | | Stage | | | Adjustment | | | Total | |
Issuance of shares for cash | | January 2007 | | | 650,000 | | | | 5 | | | | 45 | | | | — | | | | — | | | | 50 | |
Issuance of shares for services | | January 2007 | | | 300,000 | | | | 2 | | | | 6 | | | | — | | | | — | | | | 8 | |
Issuance of shares for services | | January 2007 | | | 200,000 | | | | 2 | | | | 4 | | | | — | | | | — | | | | 6 | |
Issuance of shares for services | | January 2007 | | | 250,000 | | | | 2 | | | | 5 | | | | — | | | | — | | | | 7 | |
Issuance of shares for services | | February 2007 | | | 250,000 | | | | 2 | | | | 5 | | | | — | | | | — | | | | 7 | |
Issuance of shares for cash | | February 2007 | | | 1,420,000 | | | | 11 | | | | 99 | | | | — | | | | — | | | | 110 | |
Issuance of shares for cash | | February 2007 | | | 325,000 | | | | 2 | | | | 22 | | | | — | | | | — | | | | 24 | |
Issuance of shares for cash | | March 2007 | | | 650,000 | | | | 5 | | | | 45 | | | | — | | | | — | | | | 50 | |
Issuance of shares for cash | | March 2007 | | | 8,712,000 | | | | 115 | | | | 875 | | | | — | | | | — | | | | 990 | |
Debt Conversion — non cash | | March 2007 | | | 12,500,000 | �� | | | 94 | | | | 2,505 | | | | — | | | | — | | | | 2,599 | |
Issuance of shares for services | | April 2007 | | | 100,000 | | | | 1 | | | | 13 | | | | — | | | | — | | | | 14 | |
Issuance of shares for services | | April 2007 | | | 200,000 | | | | 1 | | | | 25 | | | | — | | | | — | | | | 26 | |
Issuance of shares for services | | April 2007 | | | 1,000,000 | | | | 7 | | | | 67 | | | | — | | | | — | | | | 74 | |
Issuance of shares for cash | | May 2007 | | | 1,000,000 | | | | 7 | | | | 140 | | | | — | | | | — | | | | 147 | |
Issuance of shares for cash | | May 2007 | | | 750,000 | | | | 6 | | | | 105 | | | | — | | | | — | | | | 111 | |
Debt Cancellation — non cash | | May 2007 | | | — | | | | — | | | | 242 | | | | — | | | | — | | | | 242 | |
Debt Conversion — non cash | | June 2007 | | | 9,469,000 | | | | 70 | | | | 891 | | | | — | | | | — | | | | 961 | |
Issuance of shares for cash | | June 2007 | | | 5,393,000 | | | | 40 | | | | 760 | | | | — | | | | — | | | | 800 | |
Issuance of shares for services | | June 2007 | | | 261,250 | | | | 2 | | | | 25 | | | | — | | | | — | | | | 27 | |
Issuance of shares for services | | June 2007 | | | 261,250 | | | | 2 | | | | 25 | | | | — | | | | — | | | | 27 | |
Issuance of shares for officer compensation | | June 2007 | | | 2,500,000 | | | | 19 | | | | 318 | | | | — | | | | — | | | | 337 | |
Issuance of shares for officer compensation | | June 2007 | | | 2,500,000 | | | | 19 | | | | 318 | | | | — | | | | — | | | | 337 | |
Issuance of shares for officer compensation | | June 2007 | | | 4,000,000 | | | | 30 | | | | 508 | | | | — | | | | — | | | | 538 | |
Issuance of shares for officer compensation | | June 2007 | | | 1,000,000 | | | | 7 | | | | 127 | | | | — | | | | — | | | | 134 | |
Issuance of shares for officer compensation | | June 2007 | | | 6,000,000 | | | | 45 | | | | 762 | | | | — | | | | — | | | | 807 | |
Issuance of shares for services | | June 2007 | | | 135,000 | | | | 1 | | | | 12 | | | | — | | | | — | | | | 13 | |
Issuance of shares for cash | | June 2007 | | | 2,250,000 | | | | 17 | | | | 12 | | | | — | | | | — | | | | 29 | |
Issuance of shares for cash | | July 2007 | | | 5,550,000 | | | | 42 | | | | 1,208 | | | | — | | | | — | | | | 1,250 | |
Issuance of shares for cash | | August 2007 | | | 933,333 | | | | 7 | | | | 193 | | | | — | | | | — | | | | 200 | |
Issuance of shares for services | | August 2007 | | | 1,000,000 | | | | 7 | | | | 66 | | | | — | | | | — | | | | 73 | |
Issuance of shares for services | | August 2007 | | | 1,000,000 | | | | 7 | | | | 66 | | | | — | | | | — | | | | 73 | |
Issuance of shares for services | | August 2007 | | | 100,000 | | | | 1 | | | | 7 | | | | — | | | | — | | | | 8 | |
Issuance of shares for services | | September 2007 | | | 300,000 | | | | 2 | | | | 21 | | | | — | | | | — | | | | 23 | |
Issuance of shares for cash | | September 2007 | | | 1,666,667 | | | | 12 | | | | 344 | | | | — | | | | — | | | | 356 | |
Cancellation of shares for collateral | | September 2007 | | | (2,000,000 | ) | | | — | | | | — | | | | — | | | | — | | | | — | |
Issuance of shares for cash | | October 2007 | | | 2,350,000 | | | | 17 | | | | 483 | | | | — | | | | — | | | | 500 | |
Issuance of shares for cash | | November 2007 | | | 2,966,666 | | | | 21 | | | | 623 | | | | — | | | | — | | | | 644 | |
Issuance of shares for services | | December 2007 | | | 500,000 | | | | 3 | | | | 48 | | | | — | | | | — | | | | 51 | |
Net loss for the year | | | | | | | — | | | | — | | | | — | | | | (9,294 | ) | | | — | | | | (9,294 | ) |
Translation adjustment | | | | | | | — | | | | — | | | | — | | | | — | | | | (75 | ) | | | (75 | ) |
| | | | | | | | | | | | | | | | | | | | | |
Balance at December 31, 2007 | | | | | | | 187,463,630 | | | | 1,697 | | | | 18,401 | | | | (24,966 | ) | | | 672 | | | | (4,196 | ) |
| | | | | | | | | | | | | | | | | | | | | |
39
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | Accumulated | | | | |
| | | | | | | | | | | | | | | | | | | | | | Other | | | | |
| | | | | | | | | | | | | | | | | | Deficit | | | Comprehensive | | | | |
| | | | | | | | | | | | | | | | | | Accumulated | | | Income - Foreign | | | | |
| | | | | | | | | | | | | | Additional | | | During the | | | Currency | | | | |
| | Date of | | Number of | | | Par | | | Paid-in | | | Development | | | Translation | | | | |
| | Transaction | | Shares | | | Value | | | Capital | | | Stage | | | Adjustment | | | Total | |
Issuance of shares for services | | January 2008 | | | 800,000 | | | | 6 | | | | 79 | | | | — | | | | — | | | | 85 | |
Issuance of shares for services | | January 2008 | | | 200,000 | | | | 1 | | | | 20 | | | | — | | | | — | | | | 21 | |
Issuance of shares for cash | | February 2008 | | | 1,000,000 | | | | 7 | | | | 326 | | | | — | | | | — | | | | 333 | |
Issuance of shares for services | | March 2008 | | | 500,000 | | | | 3 | | | | 73 | | | | — | | | | — | | | | 76 | |
Issuance of shares for services | | March 2008 | | | 500,000 | | | | 3 | | | | 73 | | | | — | | | | — | | | | 76 | |
Issuance of shares for cash | | June 2008 | | | 300,000 | | | | 2 | | | | 94 | | | | — | | | | — | | | | 96 | |
Issuance of shares for cash | | June 2008 | | | 1,300,000 | | | | 8 | | | | 492 | | | | — | | | | — | | | | 500 | |
Issuance of shares for services | | July 2008 | | | 2,000,000 | | | | 13 | | | | 239 | | | | — | | | | — | | | | 252 | |
Issuance of shares for services | | August 2008 | | | 250,000 | | | | 2 | | | | 39 | | | | — | | | | — | | | | 41 | |
Issuance of shares for cash | | December 2008 | | | 1,000,000 | | | | 7 | | | | 319 | | | | — | | | | — | | | | 326 | |
Net loss for the year | | | | | | | — | | | | — | | | | — | | | | (6,938 | ) | | | — | | | | (6,938 | ) |
Translation adjustment | | | | | | | — | | | | — | | | | — | | | | — | | | | 13 | | | | 13 | |
| | | | | | | | | | | | | | | | | | | | | |
Balance at December 31, 2008 | | | | | | | 195,313,630 | | | | 1,749 | | | | 20,155 | | | | (31,904 | ) | | | 685 | | | | (9,315 | ) |
| | | | | | | | | | | | | | | | | | | | | |
Issuance of shares for services | | March 2009 | | | 250,000 | | | | 2 | | | | 36 | | | | — | | | | — | | | | 38 | |
Issuance of stock options for acquisition | | April 2009 | | | — | | | | — | | | | 601 | | | | — | | | | — | | | | 601 | |
Issuance of shares for services | | May 2009 | | | 250,000 | | | | 1 | | | | 27 | | | | — | | | | — | | | | 28 | |
Issuance of shares for services | | September 2009 | | | 250,000 | | | | 2 | | | | 21 | | | | — | | | | — | | | | 23 | |
Net loss for the year | | | | | | | — | | | | — | | | | — | | | | (10,186 | ) | | | — | | | | (10,186 | ) |
Translation adjustment | | | | | | | — | | | | — | | | | — | | | | — | | | | (4 | ) | | | (4 | ) |
| | | | | | | | | | | | | | | | | | | | | |
Balance at December 31, 2009 | | | | | | | 196,063,630 | | | | 1,754 | | | | 20,840 | | | | (42,090 | ) | | | 681 | | | | (18,815 | ) |
| | | | | | | | | | | | | | | | | | | | | |
Issuance of shares for services | | March 2010 | | | 200,000 | | | | 2 | | | | 18 | | | | — | | | | — | | | | 20 | |
Issuance of warrant with debt | | July 2010 | | | — | | | | — | | | | 1,200 | | | | — | | | | — | | | | 1,200 | |
Induced conversion cost | | September 2010 | | | — | | | | — | | | | 807 | | | | — | | | | — | | | | 807 | |
Warrant modification cost | | September 2010 | | | — | | | | — | | | | 484 | | | | — | | | | — | | | | 484 | |
Issuance of shares for services | | September 2010 | | | 1,550,000 | | | | 12 | | | | 147 | | | | — | | | | — | | | | 159 | |
Issuance of shares on conversion of debt | | September 2010 | | | 16,149,536 | | | | 120 | | | | 5,868 | | | | — | | | | — | | | | 5,988 | |
Stock compensation expense — options | | | | | | | — | | | | — | | | | 238 | | | | — | | | | — | | | | 238 | |
Net loss for the year | | | | | | | — | | | | — | | | | — | | | | (11,428 | ) | | | — | | | | (11,428 | ) |
Translation adjustment | | | | | | | — | | | | — | | | | — | | | | — | | | | (20 | ) | | | (20 | ) |
| | | | | | | | | | | | | | | | | | | | | |
Balance at December 31, 2010 | | | | | | | 213,963,166 | | | E | 1,888 | | | E | 29,602 | | | E | (53,518 | ) | | E | 661 | | | E | (21,367 | ) |
| | | | | | | | | | | | | | | | | | | | | |
54
Issuance of shares for cash | June 2005 | | | 100,000 | | | | 1 | | | | 4 | | | | - | | | | - | | | | 5 | |
Issuance of shares for cash | July 2005 | | | 144,516 | | | | 1 | | | | 6 | | | | - | | | | - | | | | 7 | |
Issuance of shares for cash | July 2005 | | | 144,516 | | | | 1 | | | | 6 | | | | - | | | | - | | | | 7 | |
Issuance of shares for cash | July 2005 | | | 144,516 | | | | 1 | | | | 6 | | | | - | | | | - | | | | 7 | |
Issuance of shares for cash | August 2005 | | | 206,452 | | | | 2 | | | | 8 | | | | - | | | | - | | | | 10 | |
Issuance of shares for cash | August 2005 | | | 50,000 | | | | - | | | | 2 | | | | - | | | | - | | | | 2 | |
Issuance of shares for services | September 2005 | | | 500,000 | | | | 4 | | | | 8 | | | | - | | | | - | | | | 12 | |
Issuance of shares for services | September 2005 | | | 500,000 | | | | 4 | | | | 8 | | | | - | | | | - | | | | 12 | |
Issuance of shares for services | September 2005 | | | 500,000 | | | | 4 | | | | 8 | | | | - | | | | - | | | | 12 | |
Issuance of shares for services | September 2005 | | | 300,000 | | | | 3 | | | | 5 | | | | - | | | | - | | | | 8 | |
Issuance of shares for services | September 2005 | | | 68,000 | | | | 1 | | | | 1 | | | | - | | | | - | | | | 2 | |
Issuance of shares for services | September 2005 | | | 173,200 | | | | 1 | | | | 3 | | | | - | | | | - | | | | 4 | |
Issuance of shares for cash | October 2005 | | | 87,459 | | | | 1 | | | | 2 | | | | - | | | | - | | | | 3 | |
Issuance of shares for services | October 2005 | | | 185,000 | | | | 2 | | | | 6 | | | | - | | | | - | | | | 8 | |
Issuance of shares for cash | October 2005 | | | 174,918 | | | | 1 | | | | 5 | | | | - | | | | - | | | | 6 | |
Issuance of shares for cash | October 2005 | | | 116,612 | | | | 1 | | | | 3 | | | | - | | | | - | | | | 4 | |
Issuance of shares for cash | November 2005 | | | 116,611 | | | | 1 | | | | 3 | | | | - | | | | - | | | | 4 | |
Issuance of shares for cash | November 2005 | | | 390,667 | | | | 3 | | | | 3 | | | | - | | | | - | | | | 6 | |
Issuance of shares for services | November 2005 | | | 20,000 | | | | - | | | | - | | | | - | | | | - | | | | - | |
Issuance of shares for services | November 2005 | | | 20,000 | | | | - | | | | - | | | | - | | | | - | | | | - | |
Issuance of shares for services | November 2005 | | | 20,000 | | | | - | | | | - | | | | - | | | | - | | | | - | |
Issuance of shares for services | November 2005 | | | 500,000 | | | | 5 | | | | 9 | | | | - | | | | - | | | | 14 | |
Issuance of shares for services | December 2005 | | | 140,000 | | | | 2 | | | | 2 | | | | - | | | | - | | | | 4 | |
Issuance of shares for cash | December 2005 | | | 390,667 | | | | 3 | | | | 3 | | | | - | | | | - | | | | 6 | |
Issuance of shares for cash | December 2005 | | | 390,666 | | | | 3 | | | | 3 | | | | - | | | | - | | | | 6 | |
Issuance of shares for cash | December 2005 | | | 6,000,000 | | | | 50 | | | | 200 | | | | - | | | | - | | | | 250 | |
Net loss for the year | | | | - | | | | - | | | | - | | | | (1,939 | ) | | | - | | | | (1,939 | ) |
Translation adjustment | | | | - | | | | - | | | | - | | | | - | | | | (98 | ) | | | (98 | ) |
Balance at December 31, 2005 | | | | 82,670,464 | | | | 837 | | | | 6,227 | | | | (14,087 | ) | | | 743 | | | | (6,280 | ) |
Issuance of shares for services | January 2006 | | | 2,500,000 | | | | 21 | | | | 31 | | | | - | | | | - | | | | 52 | |
Issuance of shares for cash | January 2006 | | | 4,000,000 | | | | 33 | | | | 132 | | | | - | | | | - | | | | 165 | |
Issuance of shares for services | January 2006 | | | 100,000 | | | | 1 | | | | 2 | | | | - | | | | - | | | | 3 | |
Issuance of shares for cash | March 2006 | | | 1,500,000 | | | | 12 | | | | 38 | | | | - | | | | - | | | | 50 | |
Issuance of shares for cash | March 2006 | | | 2,500,000 | | | | 21 | | | | 62 | | | | - | | | | - | | | | 83 | |
Issuance of shares for cash | March 2006 | | | 250,000 | | | | 2 | | | | 6 | | | | - | | | | - | | | | 8 | |
Issuance of shares for cash | March 2006 | | | 1,500,000 | | | | 12 | | | | 38 | | | | - | | | | - | | | | 50 | |
Issuance of shares for services | April 2006 | | | 100,000 | | | | 1 | | | | 4 | | | | - | | | | - | | | | 5 | |
Issuance of shares for cash | May 2006 | | | 300,000 | | | | 2 | | | | 3 | | | | - | | | | - | | | | 5 | |
Issuance of shares for cash | May 2006 | | | 300,000 | | | | 3 | | | | 7 | | | | - | | | | - | | | | 10 | |
Issuance of shares for cash | May 2006 | | | 2,350,000 | | | | 18 | | | | 82 | | | | - | | | | - | | | | 100 | |
Debt Conversion – non cash | May 2006 | | | 1,000,000 | | | | 8 | | | | 31 | | | | - | | | | - | | | | 39 | |
Issuance of shares for cash | June 2006 | | | 2,600,000 | | | | 20 | | | | 80 | | | | - | | | | - | | | | 100 | |
Debt Conversion – non cash | July 2006 | | | 1,000,000 | | | | 8 | | | | 72 | | | | - | | | | - | | | | 80 | |
Debt Conversion – non cash | July 2006 | | | 1,000,000 | | | | 8 | | | | 72 | | | | - | | | | - | | | | 80 | |
Debt Conversion – non cash | July 2006 | | | 1,000,000 | | | | 8 | | | | 72 | | | | - | | | | - | | | | 80 | |
Debt Conversion – non cash | July 2006 | | | 500,000 | | | | 4 | | | | 36 | | | | - | | | | - | | | | 40 | |
Issuance of shares for services | November 2006 | | | 300,000 | | | | 2 | | | | 4 | | | | - | | | | - | | | | 6 | |
Issuance of shares for cash | November 2006 | | | 1,300,000 | | | | 10 | | | | 90 | | | | - | | | | - | | | | 100 | |
Issuance of shares for cash | November 2006 | | | 1,280,000 | | | | 10 | | | | 90 | | | | - | | | | - | | | | 100 | |
Issuance of shares for cash | December 2006 | | | 1,320,000 | | | | 10 | | | | 90 | | | | - | | | | - | | | | 100 | |
Issuance of shares for cash | December 2006 | | | 1,320,000 | | | | 10 | | | | 90 | | | | - | | | | - | | | | 100 | |
Issuance of shares for cash | December 2006 | | | 330,000 | | | | 3 | | | | 22 | | | | - | | | | - | | | | 25 | |
Net loss for the year | | | | - | | | | - | | | | - | | | | (1,585 | ) | | | - | | | | (1,585 | ) |
Translation adjustment | | | | - | | | | - | | | | - | | | | - | | | | 4 | | | | 4 | |
Balance at December 31, 2006 | | | | 111,020,464 | | | | 1,064 | | | | 7,381 | | | | (15,672 | ) | | | 747 | | | | (6,480 | ) |
Issuance of shares for cash | January 2007 | | | 650,000 | | | | 5 | | | | 45 | | | | - | | | | - | | | | 50 | |
Issuance of shares for services | January 2007 | | | 300,000 | | | | 2 | | | | 6 | | | | - | | | | - | | | | 8 | |
Issuance of shares for services | January 2007 | | | 200,000 | | | | 2 | | | | 4 | | | | - | | | | - | | | | 6 | |
Issuance of shares for services | January 2007 | | | 250,000 | | | | 2 | | | | 5 | | | | - | | | | - | | | | 7 | |
Issuance of shares for services | February 2007 | | | 250,000 | | | | 2 | | | | 5 | | | | - | | | | - | | | | 7 | |
Issuance of shares for cash | February 2007 | | | 1,420,000 | | | | 11 | | | | 99 | | | | - | | | | - | | | | 110 | |
Issuance of shares for cash | February 2007 | | | 325,000 | | | | 2 | | | | 22 | | | | - | | | | - | | | | 24 | |
Issuance of shares for cash | March 2007 | | | 650,000 | | | | 5 | | | | 45 | | | | - | | | | - | | | | 50 | |
Issuance of shares for cash | March 2007 | | | 8,712,000 | | | | 115 | | | | 875 | | | | - | | | | - | | | | 990 | |
Debt Conversion – non cash | March 2007 | | | 12,500,000 | | | | 94 | | | | 2,505 | | | | - | | | | - | | | | 2,599 | |
Issuance of shares for services | April 2007 | | | 100,000 | | | | 1 | | | | 13 | | | | - | | | | - | | | | 14 | |
Issuance of shares for services | April 2007 | | | 200,000 | | | | 1 | | | | 25 | | | | - | | | | - | | | | 26 | |
Issuance of shares for services | April 2007 | | | 1,000,000 | | | | 7 | | | | 67 | | | | - | | | | - | | | | 74 | |
Issuance of shares for cash | May 2007 | | | 1,000,000 | | | | 7 | | | | 140 | | | | - | | | | - | | | | 147 | |
Issuance of shares for cash | May 2007 | | | 750,000 | | | | 6 | | | | 105 | | | | - | | | | - | | | | 111 | |
Debt Cancellation – non cash | May 2007 | | | - | | | | - | | | | 242 | | | | - | | | | - | | | | 242 | |
Debt Conversion – non cash | June 2007 | | | 9,469,000 | | | | 70 | | | | 891 | | | | - | | | | - | | | | 961 | |
Issuance of shares for cash | June 2007 | | | 5,393,000 | | | | 40 | | | | 760 | | | | - | | | | - | | | | 800 | |
Issuance of shares for services | June 2007 | | | 261,250 | | | | 2 | | | | 25 | | | | - | | | | - | | | | 27 | |
Issuance of shares for services | June 2007 | | | 261,250 | | | | 2 | | | | 25 | | | | - | | | | - | | | | 27 | |
Issuance of shares for officer compensation | June 2007 | | | 2,500,000 | | | | 19 | | | | 318 | | | | - | | | | - | | | | 337 | |
Issuance of shares for officer compensation | June 2007 | | | 2,500,000 | | | | 19 | | | | 318 | | | | - | | | | - | | | | 337 | |
Issuance of shares for officer compensation | June 2007 | | | 4,000,000 | | | | 30 | | | | 508 | | | | - | | | | - | | | | 538 | |
Issuance of shares for officer compensation | June 2007 | | | 1,000,000 | | | | 7 | | | | 127 | | | | - | | | | - | | | | 134 | |
Issuance of shares for officer compensation | June 2007 | | | 6,000,000 | | | | 45 | | | | 762 | | | | - | | | | - | | | | 807 | |
Issuance of shares for services | June 2007 | | | 135,000 | | | | 1 | | | | 12 | | | | - | | | | - | | | | 13 | |
Issuance of shares for cash | June 2007 | | | 2,250,000 | | | | 17 | | | | 12 | | | | - | | | | - | | | | 29 | |
Issuance of shares for cash | July 2007 | | | 5,550,000 | | | | 42 | | | | 1,208 | | | | - | | | | - | | | | 1,250 | |
Issuance of shares for cash | August 2007 | | | 933,333 | | | | 7 | | | | 193 | | | | - | | | | - | | | | 200 | |
Issuance of shares for services | August 2007 | | | 1,000,000 | | | | 7 | | | | 66 | | | | - | | | | - | | | | 73 | |
Issuance of shares for services | August 2007 | | | 1,000,000 | | | | 7 | | | | 66 | | | | - | | | | - | | | | 73 | |
Issuance of shares for services | August 2007 | | | 100,000 | | | | 1 | | | | 7 | | | | - | | | | - | | | | 8 | |
Issuance of shares for services | September 2007 | | | 300,000 | | | | 2 | | | | 21 | | | | - | | | | - | | | | 23 | |
Issuance of shares for cash | September 2007 | | | 1,666,667 | | | | 12 | | | | 344 | | | | - | | | | - | | | | 356 | |
Cancellation of shares for collateral | September 2007 | | | (2,000,000 | ) | | | - | | | | - | | | | - | | | | - | | | | - | |
Issuance of shares for cash | October 2007 | | | 2,350,000 | | | | 17 | | | | 483 | | | | - | | | | - | | | | 500 | |
Issuance of shares for cash | November 2007 | | | 2,966,666 | | | | 21 | | | | 623 | | | | - | | | | - | | | | 644 | |
Issuance of shares for services | December 2007 | | | 500,000 | | | | 3 | | | | 48 | | | | - | | | | - | | | | 51 | |
Net loss for the year | | | | - | | | | - | | | | - | | | | (9,294 | ) | | | - | | | | (9,294 | ) |
Translation adjustment | | | | - | | | | - | | | | - | | | | - | | | | (75 | ) | | | (75 | ) |
Balance at December 31, 2007 | | | | 187,463,630 | | | | 1,697 | | | | 18,401 | | | | (24,966 | ) | | | 672 | | | | (4,196 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Issuance of shares for services | January 2008 | | | 800,000 | | | | 6 | | | | 79 | | | | - | | | | - | | | | 85 | |
Issuance of shares for services | January 2008 | | | 200,000 | | | | 1 | | | | 20 | | | | - | | | | - | | | | 21 | |
Issuance of shares for cash | February 2008 | | | 1,000,000 | | | | 7 | | | | 326 | | | | - | | | | - | | | | 333 | |
Issuance of shares for services | March 2008 | | | 500,000 | | | | 3 | | | | 73 | | | | - | | | | - | | | | 76 | |
Issuance of shares for services | March 2008 | | | 500,000 | | | | 3 | | | | 73 | | | | - | | | | - | | | | 76 | |
Issuance of shares for cash | June 2008 | | | 300,000 | | | | 2 | | | | 94 | | | | - | | | | - | | | | 96 | |
Issuance of shares for cash | June 2008 | | | 1,300,000 | | | | 8 | | | | 492 | | | | - | | | | - | | | | 500 | |
Issuance of shares for services | July 2008 | | | 2,000,000 | | | | 13 | | | | 239 | | | | - | | | | - | | | | 252 | |
Issuance of shares for services | August 2008 | | | 250,000 | | | | 2 | | | | 39 | | | | - | | | | - | | | | 41 | |
Issuance of shares for cash | December 2008 | | | 1,000,000 | | | | 7 | | | | 319 | | | | - | | | | - | | | | 326 | |
Net loss for the year | | | | - | | | | - | | | | - | | | | (6,938 | ) | | | - | | | | (6,938 | ) |
Translation adjustment | | | | - | | | | - | | | | - | | | | - | | | | 13 | | | | 13 | |
Balance at December 31, 2008 | | | | 195,313,630 | | | | 1,749 | | | | 20,155 | | | | (31,904 | ) | | | 685 | | | | (9,315 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Issuance of shares for services | March 2009 | | | 250,000 | | | | 2 | | | | 36 | | | | - | | | | - | | | | 38 | |
Issuance of stock options for acquisition | April 2009 | | | - | | | | - | | | | 601 | | | | - | | | | - | | | | 601 | |
Issuance of shares for services | May 2009 | | | 250,000 | | | | 1 | | | | 27 | | | | - | | | | - | | | | 28 | |
Issuance of shares for services | September 2009 | | | 250,000 | | | | 2 | | | | 21 | | | | - | | | | - | | | | 23 | |
Net loss for the year | | | | - | | | | - | | | | - | | | | (10,186 | ) | | | - | | | | (10,186 | ) |
Translation adjustment | | | | - | | | | - | | | | - | | | | - | | | | (4 | ) | | | (4 | ) |
Balance at December 31, 2009 | | | | 196,063,630 | | | | 1,754 | | | | 20,840 | | | | (42,090 | ) | | | 681 | | | | (18,815 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Issuance of shares for services | March 2010 | | | 200,000 | | | | 2 | | | | 18 | | | | - | | | | - | | | | 20 | |
Issuance of warrant with debt | July 2010 | | | - | | | | - | | | | 1,200 | | | | - | | | | - | | | | 1,200 | |
Induced conversion cost | September 2010 | | | - | | | | - | | | | 807 | | | | - | | | | - | | | | 807 | |
Warrant modification cost | September 2010 | | | - | | | | - | | | | 484 | | | | - | | | | - | | | | 484 | |
Issuance of shares for services | September 2010 | | | 1,550,000 | | | | 12 | | | | 147 | | | | - | | | | - | | | | 159 | |
Issuance of shares on conversion of debt | September 2010 | | | 16,149,536 | | | | 120 | | | | 5,868 | | | | - | | | | - | | | | 5,988 | |
Stock compensation expense - options | | | | - | | | | - | | | | 238 | | | | - | | | | - | | | | 238 | |
Net loss for the year | | | | - | | | | - | | | | - | | | | (11,428 | ) | | | - | | | | (11,428 | ) |
Translation adjustment | | | | - | | | | - | | | | - | | | | - | | | | (20 | ) | | | (20 | ) |
Balance at December 31, 2010 | | | | 213,963,166 | | | | 1,888 | | | | 29,602 | | | | (53,518 | ) | | | 661 | | | | (21,367 | ) |
Issuance of shares on conversion of debt | September 2011 | | | 41,542,722 | | | | 289 | | | | 2,029 | | | | - | | | | - | | | | 2,318 | |
Issuance of shares on conversion of debt | December 2011 | | | 20,511,451 | | | | 145 | | | | 1,015 | | | | - | | | | - | | | | 1,160 | |
Stock compensation expense - options | | | | - | | | | - | | | | 86 | | | | - | | | | - | | | | 86 | |
Net loss for the year | | | | - | | | | - | | | | - | | | | (10,539 | ) | | | - | | | | (10,539 | ) |
Translation adjustment | | | | - | | | | - | | | | - | | | | - | | | | 3 | | | | 3 | |
Balance at December 31, 2011 | | | | 276,017,339 | | | E | 2,322 | | | E | 32,732 | | | E | (64,057 | ) | | E | 664 | | | E | (28,339 | ) |
The accompanying notes are an integral part of these financial statements.
40
MYMETICS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2011 and 2010 and 2009 and
the Period from May 2, 1990 (Inception) to December 31, 2010
2011
(In Thousands of Euros)
| | | | | | | | | | | | |
| | | | | | | | | | Total | |
| | | | | | | | | | Accumulated | |
| | | | | | | | | | During | |
| | | | | | | | | | Development | |
| | | | | | | | | | Stage | |
| | | | | | | | | | (May 2, 1990 to | |
| | | | | | | | | | December 31, | |
| | 2010 | | | 2009 | | | 2010) | |
Cash Flows from Operating Activities | | | | | | | | | | | | |
Net loss | | E | (11,428 | ) | | E | (10,186 | ) | | E | (53,518 | ) |
Adjustments to reconcile net loss to net cash used in operating activities | | | | | | | | | | | | |
Change in the fair value of acquisition-related contingent consideration | | | 1,276 | | | | (1,614 | ) | | | (338 | ) |
Depreciation | | | 115 | | | | 82 | | | | 727 | |
Amortization of intangibles | | | 193 | | | | 144 | | | | 337 | |
Goodwill impairment | | | — | | | | — | | | | 209 | |
Fees paid in warrants | | | — | | | | — | | | | 223 | |
Gain on sales of equipment | | | (68 | ) | | | — | | | | (68 | ) |
Gain on extinguishment of debt | | | — | | | | — | | | | (774 | ) |
Services and fees paid in common stock | | | 179 | | | | 89 | | | | 5,403 | |
Stock compensation expense-options | | | 238 | | | | — | | | | 238 | |
Amortization of debt discount | | | 600 | | | | — | | | | 810 | |
Induced conversion cost | | | 807 | | | | — | | | | 807 | |
Warrant modification cost | | | 484 | | | | — | | | | 484 | |
Changes in operating assets and liabilities, Receivables | | | (55 | ) | | | 1 | | | | (30 | ) |
Accounts payable | | | (200 | ) | | | 374 | | | | 1,921 | |
Taxes and social costs payable | | | (15 | ) | | | 16 | | | | 26 | |
Other | | | 4 | | | | 48 | | | | 15 | |
| | | | | | | | | |
Net cash used in operating activities | | | (7,870 | ) | | | (11,046 | ) | | | (43,528 | ) |
| | | | | | | | | | | | |
Cash Flows from Investing Activities | | | | | | | | | | | | |
Patents and other | | | — | | | | — | | | | (393 | ) |
Proceeds from sale of equipment | | | 137 | | | | — | | | | 137 | |
Purchase of property and equipment | | | (28 | ) | | | (140 | ) | | | (251 | ) |
Acquisition of subsidiary, net of cash acquired of E58 | | | — | | | | (4,942 | ) | | | (4,942 | ) |
Cash acquired in reverse purchase | | | — | | | | — | | | | 13 | |
| | | | | | | | | |
Net cash used in investing activities | | | 109 | | | | (5,082 | ) | | | (5,436 | ) |
| | | | | | | | | | | | |
Cash Flows from Financing Activities | | | | | | | | | | | | |
Proceeds from the issuance of common stock and warrants | | | — | | | | — | | | | 11,630 | |
Borrowings from shareholders | | | — | | | | — | | | | 972 | |
Increase in notes payable and other short-term advances | | | 6,633 | | | | 18,582 | | | | 39,132 | |
Decrease in notes payable and other short-term advances | | | — | | | | — | | | | (1,490 | ) |
Loan fees | | | — | | | | — | | | | (130 | ) |
| | | | | | | | | |
Net cash provided by financing activities | | | 6,633 | | | | 18,582 | | | | 50,114 | |
Effect of foreign exchange rate on cash | | | (20 | ) | | | (4 | ) | | | 661 | |
| | | | | | | | | |
Net increase (decrease) in cash | | | (1,148 | ) | | | 2,450 | | | | 1,811 | |
Cash, beginning of period | | | 2,959 | | | | 509 | | | | — | |
| | | | | | | | | |
Cash, end of period | | E | 1,811 | | | E | 2,959 | | | E | 1,811 | |
| | | | | | | | | |
Non-cash investing and financing activities | | | | | | | | | | | | |
Issuance of warrant in conjunction with note payable | | E | 1,200 | | | E | — | | | | | |
| | | | | | | | | | |
Issuance of shares on conversion of notes payable | | E | 5,988 | | | E | — | | | | | |
| | | | | | | | | | |
| | | | | | | | Total Accumulated During Development Stage (May 2, 1990 to December 31,) | |
| | 2011 | | | 2010 | | | 2011 | |
Cash Flows from Operating Activities | | | | | | | | | |
Net loss | | E | (10,539 | ) | | E | (11,428 | ) | | E | (64,057 | ) |
Adjustments to reconcile net loss to net cash used in operating activities | | | | | | | | | | | | |
Change in the fair value of acquisition-related contingent consideration | | | 2,541 | | | | 1,276 | | | | 2,203 | |
Depreciation | | | 57 | | | | 115 | | | | 784 | |
Amortization of intangibles | | | 144 | | | | 193 | | | | 481 | |
Impairment of license contract | | | 2,213 | | | | - | | | | 2,213 | |
Goodwill impairment | | | - | | | | - | | | | 209 | |
Fees paid in warrants | | | - | | | | - | | | | 223 | |
Gain on sales of equipment | | | (1 | ) | | | (68 | ) | | | (69 | ) |
Gain on extinguishment of debt | | | - | | | | - | | | | (774 | ) |
Services and fees paid in common stock | | | - | | | | 179 | | | | 5,403 | |
Stock compensation expense-options | | | 86 | | | | 238 | | | | 324 | |
Amortization of debt discount | | | 600 | | | | 600 | | | | 1,410 | |
Induced conversion cost | | | - | | | | 807 | | | | 807 | |
Warrant modification cost | | | - | | | | 484 | | | | 484 | |
Changes in operating assets and liabilities, | | | | | | | | | | | | |
Receivables | | | 39 | | | | (55 | ) | | | 9 | |
Accounts payable | | | (315 | ) | | | (200 | ) | | | 1,606 | |
Taxes and social costs payable | | | (24 | ) | | | (15 | ) | | | 2 | |
Other | | | (24 | ) | | | 4 | | | | (9 | ) |
Net cash used in operating activities | | | (5,223 | ) | | | (7,870 | ) | | | (48,751 | ) |
| | | | | | | | | | | | |
Cash Flows from Investing Activities | | | | | | | | | | | | |
Patents and other | | | - | | | | - | | | | (393 | ) |
Proceeds from sale of equipment | | | - | | | | 137 | | | | 137 | |
Purchase of property and equipment | | | (29 | ) | | | (28 | ) | | | (280 | ) |
Acquisition of subsidiary, net of cash acquired of E58 | | | - | | | | - | | | | (4,942 | ) |
Cash acquired in reverse purchase | | | - | | | | - | | | | 13 | |
Net cash provided by investing activities | | | (29 | ) | | | 109 | | | | (5,465 | ) |
| | | | | | | | | | | | |
Cash Flows from Financing Activities | | | | | | | | | | | | |
Proceeds from the issuance of common stock and warrants | | | - | | | | - | | | | 11,630 | |
Borrowings from shareholders | | | - | | | | - | | | | 972 | |
Increase in notes payable and other short-term advances | | | 3,820 | | | | 6,633 | | | | 42,952 | |
Decrease in notes payable and other short-term advances | | | - | | | | - | | | | (1,490 | ) |
Loan fees | | | - | | | | - | | | | (130 | ) |
Net cash provided by financing activities | | | 3,820 | | | | 6,633 | | | | 53,934 | |
Effect of foreign exchange rate on cash | | | 3 | | | | (20 | ) | | | 664 | |
Net increase (decrease) in cash | | | (1,429 | ) | | | (1,148 | ) | | | 382 | |
Cash, beginning of period | | | 1,811 | | | | 2,959 | | | | - | |
Cash, end of period | | E | 382 | | | E | 1,811 | | | E | 382 | |
Non-cash investing and financing activities | | | | | | | | | | | | |
Issuance of warrant in conjunction with note payable | | E | - | | | E | 1,200 | | | | | |
| | | | | | | | | | | | |
Issuance of shares on conversion of notes payable | | E | 3,478 | | | E | 5,988 | | | | | |
The accompanying notes are an integral part of these financial statements.
41
MYMETICS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. The Company and Summary of Significant Accounting Policies
Basis of Presentation
The amounts in the notes are rounded to the nearest thousand except for share and per share amounts.
Mymetics Corporation (the “Company”"Company" or “Mymetics”"Mymetics") was created for the purpose of engaging in vaccine research and development. Its main research efforts have been concentrated in the prevention and treatment of the AIDS virus and malaria. The Company has established a network which enables it to work with education centers, research centers, pharmaceutical laboratories and biotechnology companies. On April 1, 2009 the Company successfully closed its acquisition of Bestewil Holding BV and Mymetics BV (previously Virosome Biologicals BV) and, as a result, has further increased the pipeline of vaccines under development to include (i)Herpes Simplex which is at the pre-clinical stage, (ii)influenza for elderly which is athas finished a clinical trial Phase II and is being developed in collaboration with Solvay Pharmaceuticals (now Abbott Laboratories),I, and (iii) Respiratory Syncytial Virus (RSV) which is at the pre-clinical stage.
These financial statements have been prepared treating the Company as a development stage company. As of December 31, 2010,2011, the Company had not performed any stage III clinical testing and a commercially viable product is not expected for several more years. As such, the Company has not generated significant revenue. For the purpose of these financial statements, the development stage started May 2, 1990.
These financial statements have also been prepared assuming the Company will continue as a going concern. The Company has experienced significant losses since inception resulting in a deficit accumulated during the development stage of E53,518E64,057 at December 31, 2010.2011. Deficits in operating cash flows since inception have been financed through debt and equity funding sources. In order to remain a going concern and continue the Company’sCompany's research and development activities, management intends to seek additional funding. Further, the Company’sCompany's current liabilities exceed its current assets by E3,297E6,241 as of December 31, 2010,2011, and there is no assurance that cash will become available to pay current liabilities in the near term. Management is seeking additional financing but there can be no assurance that management will be successful in any of those efforts.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its subsidiaries. Significant intercompany accounts and transactions have been eliminated.
Foreign Currency Translation
The Company translates non-Euro assets and liabilities of its subsidiaries at the rate of exchange at the balance sheet date. Revenues and expenses are translated at the average rate of exchange throughout the year. Unrealized gains or losses from these translations are reported as a separate component of comprehensive income. Transaction gains or losses are included in general and administrative expenses in the consolidated statements of operations. The translation adjustments do not recognize the effect of income tax because the Company expects to reinvest the amounts indefinitely in operations. The Company’sCompany's reporting currency is the Euro because substantially all of the Company’sCompany's activities are conducted in Europe.
Cash and Cash Flow Disclosure
Cash deposits are occasionally in excess of insured amounts. No interest was paid in 20102011 and 2009.2010.
Revenue Recognition
Revenue related to the sale of products is recognized when all of the following conditions are met: persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable, and collectability is reasonably assured.
Grant revenue is recognized when the associated costs are incurred.
Receivables
Receivables are stated at their outstanding principal balances. Management reviews the collectability of receivables on a periodic basis and determines the appropriate amount of any allowance. Based on this review procedure, management has determined that the allowances at December 31, 20102011 and 20092010 are sufficient. The Company charges off receivables to the allowance when management determines that a receivable is not collectible. The Company may retain a security interest in the products sold.
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Property and Equipment
Property and equipment is recorded at cost and is depreciated over its estimated useful life on straight-line basis from the date placed in service. Estimated useful lives are usually taken as three years.
License Contract
The license contract was acquired as part of the acquisition of Bestewil. It iswas amortized over 14 years on a straight-line basis.basis until September 2011. The license agreement with Solvay was reclaimed by Mymetics in October 2011, therefore the remaining value of the license was written-off.
In-Process Research and Development
In-Process research and development (referred to as IPR&D) represents the estimated fair value assigned to research and development projects acquired in a purchased business combination that have not been completed at the date of acquisition and which have no alternative future use. IPR&D assets acquired in a business combination after January 1, 2009, are capitalized as indefinite-lived intangible assets. These assets remain indefinite-lived until the completion or abandonment of the associated research and development efforts. During the period prior to completion or abandonment, those acquired indefinite-lived assets are not amortized but are tested for impairment annually, or more frequently, if events or changes in circumstances indicate that the asset might be impaired.
Impairment of Long-Lived Assets
Long-lived assets, which include property and equipment, and the license contract, are assessed for impairment whenever events or changes in circumstances indicate the carrying amount of the asset may not be recoverable. The impairment testing involves comparing the carrying amount to the forecasted undiscounted future cash flows generated by that asset. In the event the carrying value of the assets exceeds the undiscounted future cash flows generated by that asset and the carrying value is not considered recoverable, impairment exists. An impairment loss is measured as the excess of the asset’s carrying value over its fair value, calculated using a discounted future cash flow method. An impairment loss would be recognized in net income in the period that the impairment occurs. As described above, the license contract has been fully impaired and written off in 2011.
Goodwill
Goodwill, which represents the excess of purchase price over the fair value of net assets acquired, is carried at cost. Goodwill is not amortized; rather, it is subject to a periodic assessment for impairment by applying a fair value based test. Goodwill is assessed for impairment on an annual basis as of April 1st of each year or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment model prescribes a two-step method for determining goodwill impairment. In the first step, the Company determines the fair value of its reporting unit using an enterprise value analysis. If the net book value of its reporting unit exceeds the fair value, then the second step of the impairment test is performed which requires allocation of the Company’s reporting unit’s fair value to all of its assets and liabilities using the acquisition method prescribed under authoritative guidance for business combinations with any residual fair value being allocated to goodwill. An impairment charge will be recognized only when the implied fair value of the reporting unit’s goodwill is less than its carrying amount.
The Company has conducted its impairment testing as of April 1, of 2011 and 2010 of its goodwill recognized in connection to the acquisition of Bestewil. In conclusion of this impairment testing, the carrying amount of the reporting unit was lower than the estimated fair value of the reporting unit. As the fair value of the reporting unit is higher than the carrying amount, Step 2 of the goodwill impairment test did not need to be completed and no impairment has been recognized in 2011 and 2010.
Contingent Consideration
The Company accounts for contingent consideration in a purchase business combination in accordance with applicable guidance provided within the business combination rules. As part of the consideration for the Bestewil acquisition, the Company is contractually obligated to pay additional purchase price consideration upon achievement of certain commercial milestones and future royalties. Therefore, the Company is required to update the assumptions at each reporting period, based on new developments, and record such amounts at fair value until such consideration is satisfied. Because of incertainties inherent in estimates, it is at least reasonably possible that a change in the estimate of the contingent consideration will occur in the near term.
Research and Development
Research and development costs are expensed as incurred.
Taxes on Income
The Company accounts for income taxes under an asset and liability approach that requires the recognition of deferred tax assets and liabilities for expected future tax consequences of events that have been recognized in the Company’sCompany's financial statements or tax returns. In estimating future tax consequences, the Company generally considers all expected future events other than enactments of changes in the tax laws or rates.
The Company reports a liability, if any, for unrecognized tax benefits resulting from uncertain income tax positions taken or expected to be taken in an income tax return. Estimated interest and penalties, if any, are recorded as a component of interest expense and other expense, respectively.
The Company has not recorded any liabilities for uncertain tax positions or any related interest and penalties at December 31, 20102011 or 2009.2010. The Company’s United States tax returns are open to audit for the years ended December 31, 20072008 to 2010.2011. The returns for the Luxembourg subsidiary LUXEMBOURG 6543 S.A., are open to audit for the year ended December 31, 2010.2011. The returns for the Swiss subsidiary, Mymetics S.A., are open to audit for the years ended December 31, 20072008 to 2010.2011. The returns for the Netherlands subsidiaries, Bestewil B.V. and Mymetics B.V., are open to audit for the year ended December 31, 2010.2011.
43
Earnings per Share
Basic earnings per share is computed by dividing net loss attributable to common shareholders by the weighted average number of common shares outstanding in the period. The weighted average number of shares (including shares issuable) was 229,252,148 for the year ended December 31, 2011 and 202,059,230 for the year ended December 31, 2010 and 195,728,698 for the year ended December 31, 2009.2010. Diluted earnings per share takes into consideration common shares outstanding (computed under basic earnings per share) and potentially dilutive securities. For the year ended December 31, 2011, the total potential number of shares issuable of 162,999,838 includes 107,038,888 potential issuable shares related to convertible loans, 51,218,450 potential issuable shares related to warrants, and 4,742,500 potential issuable shares related to outstanding options granted to employees. Options, warrants and convertible debt were not included in the computation of diluted earnings per share because their effect would be anti-dilutive due to net losses incurred. For the year ended December 31, 2010, the total potential number of shares issuable of 138,634,271 includes 82,623,321 potential issuable shares related to convertible loans, 51,218,450 potential issuable shares related to warrants, and 4,792,500 potential issuable shares related to outstanding options granted to employees. Options, warrants and convertible debt were not included in the computation
Preferred Stock
The Company has authorized 5,000,000 shares of preferred stock. No shares are issued or outstanding at December 31, 20102011 or 2009.2010. The preferred stock is issuable in several series with varying dividend, conversion and voting rights. The specific series and rights will be determined upon any issuance of preferred stock.
Stock-Based Compensation
Compensation cost for all share-based payments is based on the estimated grant-date fair value. The Company amortizes stock compensation cost ratably over the requisite service period.
The issuance of common shares for services is recorded at the quoted price of the shares on the date the services are rendered. For the yearsyear ended December 31, 2010, and 2009, 1,750,000 and 750,000 shares with a fair value of E179, and E89 respectively, were issued to individuals as fee for services rendered. No shares were issued as fee for services rendered in the year ended December 31, 2011.
On April 1, 2009
Mymetics issued an option to Norwood Immunology Limited (“NIL”) as part of its acquisition of Bestewil Holding B.V. (“Bestewil”). See Note 2. Mymetics also granteddidn’t grant any stock options to employees in 2010.2011. See Note 5.
Estimates
The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Fair Value Measurements
Fair value guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:
Level 1—Quoted prices in active markets for identical assets or liabilities.
Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the | Level 1- | Quoted prices in active markets for identical assets or liabilities. |
Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value | Level 2- | Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |
44
| Level 3- | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
Fair Values of Financial Instruments
The Company generally has the following financial instruments: cash, receivables, accounts payable, taxes and social costs payable, acquisition-related contingent consideration, and notes payable. The carrying value of cash, receivables, accounts payable, and taxes and social costs payable approximates their fair value based on the short-term nature of these financial instruments. The carrying value of acquisition-related contingent consideration is equal to fair value since this liability is required to be reported at fair value. Management estimatesbelieves that it is not practicable to estimate the fair value of the notes payable due to the unique nature of these instruments.
Concentrations
The Company enters into scientific collaboration agreements with selected partners such as Pevion Biotech Ltd., a Swiss company that granted Mymetics exclusive licenses to use their virosome vaccine delivery technology in conjunction with the Company’s AIDS and malaria preventive vaccines under development. Under this agreement, Pevion Biotech is committed to supply the actual Virosomes and perform their integration with the Company’s antigens, which requires proprietary know-how, at Pevion’s premises. The agreement includes specific mechanisms to mitigate the risk of losing a key component of Mymetics’ vaccines should Pevion become unable to meet its commitment.
Recently Issued Accounting Standards
In September 2009, the FASB ratified authoritative guidance relating
No new accounting pronouncements are expected to revenue recognition in multiple element arrangements, which is effective for fiscal years beginning after June 15, 2010 and may be applied retrospectively or prospectively for new or materially modified arrangements with early adoption permitted. The guidance provides greater ability to separate and allocate arrangement consideration in a multiple element revenue arrangement. In addition, it will require the use of estimated selling price to allocate arrangement considerations, therefore eliminating the use of the residual method of accounting. The Company does not believe the adoption of this standard will have a material impact on itsthe Company’s consolidated financial statements.
In December 2010, the FASB issued an update under Topic 350, Goodwill and Other Intangible Assets, where testing for goodwill impairment is a two-step test. When a goodwill impairment test is performed (either on an annual or interim basis), an entity must assess whether the carrying amount of a reporting unit exceeds its fair value (step 1). If it does, an entity must perform an additional test to determine whether goodwill has been impaired and to calculate the amount of this impairment (step 2). This update is effective for the fiscal years and interim periods within those years, beginning after December 15, 2010. The Company is in the process of determining the impact the adoption of this standard might have on its financial statements.
Note 2. Receivables
| | | | | | | | | | 2011 | | | 2010 | |
| | 2010 | | 2009 | | | | | | | |
Receivable officer | | E | 13 | | E | 6 | | | E | -- | | | E | 13 | |
Receivable other | | 261 | | 200 | | | | 61 | | | | 261 | |
| | | | | | | | | | | | | |
| | 274 | | 206 | | | | 61 | | | | 274 | |
Allowance for doubtful accounts | | | (174 | ) | | | (161 | ) | | | -- | | | | (174 | ) |
| | | | | | | | | | | | | |
| | E | 100 | | E | 45 | | | E | 61 | | | E | 100 | |
| | | | | | |
Note 3. Transactions with Affiliates
Mr. Ernest M. Stern, the Company’s outside U.S. counsel, is both a director of the Company and a partner in Akerman Senterfit LLP, the firm retained as legal counsel by the Company. Fees paid to the law firm in the years ended December 31, 20102011 and 2009,2010, amounted to E64 and E111, and E105, respectively.
Three of the Company’s major shareholders have made available an aggregate E27,982E28,200 in the form of notes payable.payable including interest. Conversion prices on the Euro-denominated convertible debt have been fixed to a fixed Euro/US dollar exchange rate.
During the year ending December 31, 2010,2011, two short term convertible loans with a carrying amount of E5,988E3,478 were converted into Mymetics common shares at a conversion price of $0.50$0.08 per share with an exchange rate of $1.3486$1.427 per Euro. The original conversion price of these loans was $0.80, but in order to induce the lender to convert, the lower conversion price of $0.50 had to be accepted. This event has also fixed the conversion price at $0.50 per share for the Norwood convertible loan and the Norwood option (see Note 7). The advantage of this lower conversion price for the lender has been treated in accordance with ASC Subtopic 470-20-40. The difference in the fair value of the shares issuable based on the terms of the original conversion price and the fair value of the shares actually issued based on the inducement terms is recorded as an expense of E807.
45
The details of these notes and other loans and contingent liabilities are as follows:
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | Fixed | |
| | | | | | | | | | | | | Conversion | | | EUR/USD | |
Lender | | 1st-Issue | | Principal | | | Duration | | Interest | | | Price | | | Rate | |
Price | | Date | | Amount | | | (Note) | | Rate | | | (stated) | | | Conversion | |
Round Enterprises Ltd. | | 06/29/2010 | | E | 2,200 | | | (5) | | 5% pa | | None | | | | | |
Round Enterprises Ltd. | | 09/30/2010 | | E | 1,100 | | | (8) | | 5% pa | | None | | | | | |
Round Enterprises Ltd. | | 12/17/2010 | | E | 1,100 | | | (9) | | 5% pa | | None | | | | | |
| | | | | | | | | | | | | | | | | | | |
Total Short Term Principal Amounts | | | | E | 4,400 | | | | | | | | | | | | | | | |
Accrued Interest | | | | E | 72 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Total Short Term Notes to Related Parties | | | | E | 4,472 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Unamortized debt discount | | | | E | (600 | ) | | (10) | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Net Short Term Notes to Related Parties, net of unamortized debt discount | | | | E | 3,872 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Eardley Holding A.G. (1) | | 06/23/2006 | | E | 143 | | | (2) | | 10% pa | | US$ | 0.10 | | | | N/A | |
Anglo Irish Bank S.A. (3) | | 10/21/2007 | | E | 500 | | | (2) | | 10% pa | | US$ | 0.50 | | | | 1.4090 | |
Round Enterprises Ltd. | | 12/10/2007 | | E | 1,500 | | | (2) | | 10% pa | | US$ | 0.50 | | | | 1.4429 | |
Round Enterprises Ltd. | | 01/22/2008 | | E | 1,500 | | | (2) | | 10% pa | | US$ | 0.50 | | | | 1.4629 | |
Round Enterprises Ltd. | | 04/25/2008 | | E | 2,000 | | | (2) | | 10% pa | | US$ | 0.50 | | | | 1.5889 | |
Round Enterprises Ltd. | | 06/30/2008 | | E | 1,500 | | | (2) | | 10% pa | | US$ | 0.50 | | | | 1.5380 | |
Round Enterprises Ltd. | | 11/18/2008 | | E | 1,200 | | | (2) | | 10% pa | | US$ | 0.50 | | | | 1.2650 | |
Round Enterprises Ltd. | | 02/09/2009 | | E | 1,500 | | | (2) | | 10% pa | | US$ | 0.50 | | | | 1.2940 | |
Round Enterprises Ltd. | | 06/15/2009 | | E | 5,500 | | | (2, 4) | | 10% pa | | US$ | 0.80 | | | | 1.4045 | |
Eardley Holding A.G. | | 06/15/2009 | | E | 100 | | | (2, 4) | | 10% pa | | US$ | 0.80 | | | | 1.4300 | |
Von Meyenburg | | 08/03/2009 | | E | 200 | | | (2) | | 10% pa | | US$ | 0.80 | | | | 1.4400 | |
Round Enterprises Ltd. | | 10/13/2009 | | E | 2,000 | | | (2) | | 5% pa | | US$ | 0.25 | | | | 1.4854 | |
Round Enterprises Ltd. | | 12/18/2009 | | E | 2,200 | | | (2) | | 5% pa | | US$ | 0.25 | | | | 1.4338 | |
| | | | | | | | | | | | | | | | | | | |
Total Long Term Principal Amounts | | | | E | 19,843 | | | | | | | | | | | | | | | |
Accrued Interest | | | | E | 3,667 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Total Long Term Convertible Notes to Related Parties | | | | E | 23,510 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Total Convertible Notes to Related Parties, net of unamortized debt discount | | | | E | 27,382 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Norwood Secured Loan | | 04/03/2009 | | E | 2,500 | | | (6) | | 5% pa | | US$ | 0.50 | | | | 1.2812 | |
| | | | | | | | | | | | | | | | | | | |
Total Principal Amount | | | | E | 2,500 | | | | | | | | | | | | | | | |
Accrued Interest | | | | E | 218 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Total Convertible Note Payable — other | | | | E | 2,718 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Norwood Contingent Liability | | | | E | 3,212 | | | (7) | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
TOTAL LOANS, NOTES, AND CONTINGENT LIABILITY | | | | E | 33,312 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | |
(1) | | Private investment company of Dr. Thomas Staehelin, member of the Board of Directors and of the Audit Committee of the Company. Face value is stated in U.S. dollars at $190,000. |
|
(2) | | The earlier of: (i) The date that the Company has sufficient revenues to repay, or (ii) upon an event of default. The loan is secured against IP assets of Mymetics Corporation. |
|
(3) | | Renamed Hyposwiss Private Bank Genève S.A. and acting on behalf of Round Enterprises Ltd. which is a major shareholder. |
|
(4) | | The loan is secured against 2/3rds of the IP assets of Bestewil Holding BV. |
|
(5) | | The earlier of (i) June 30, 2011 or (ii) upon an event of default. The term of the loan agreement started on July 1, 2010. |
|
(6) | | Under the terms of the acquisition of Bestewil B.V., as part of the consideration, the Company issued to Norwood Immunology Limited (“NIL”) a convertible redeemable note (the “Note”) in the principal amount of E2,500 with maturity 36 months after the closing date and bearing interest at 5% per annum. The note is secured against one third of Bestewil common stock. |
|
(7) | | Under the terms of the acquisition of Bestewil BV, as part of the consideration, the Company is committed to make further payments to NIL in the event that certain stated milestones for the development of vaccines are achieved. These have been considered on a risk probability basis. |
|
(8) | | The earlier of (i) September 30, 2011 or (ii) upon an event of default. |
|
(9) | | The earlier of (i) December 16, 2011 or (ii) upon an event of default. |
|
(10) | | On July 1 2010, Mymetics issued a warrant to Round Enterprises providing the right to buy 32 million shares of Mymetics common stock at a price of US $0.25 per share. The warrant is valid from July 1, 2010 until June 30, 2013. This warrant has been accounted for by taking it’s proportional fair value, which was calculated by the Black Scholes methodology using a hundred fourty percent historical volatility, a three year expected term, a zero percent dividend yield and a three percent risk free rate. This proportional fair value was accounted for as a debt discount on the E2,200 loan issued on the same date and amortizing that discount over 12 months as interest expense. |
| | | | | | | | | | | | | | | Fixed | |
| | | | | | | | | | | | | | | EUR/USD | |
| | | | | | | | Dura- | | Inter- | | Conversion | | | Rate | |
Lender | | 1st-Issue | | | Principal | | | tion | | est | | Price | | | Conver- | |
Price | | Date | | | Amount | | | (Note) | | Rate | | (stated) | | | sion | |
| | | | | | | | | | | | | | | | |
Norwood Secured Loan | | 04/03/2009 | | | E | 2,500 | | | | (5 | ) | 5% pa | | $ | US 0.50 | | | | 1.2812 | |
Round Enterprises Ltd. | | 12/09/2010 | | | E | 1,100 | | | | (7 | ) | 5% pa | | None | | | | N/A | |
Round Enterprses Ltd. | | 08/04/2011 | | | E | 926 | | | | (8 | ) | 10% pa | | None (10 ) | | | | N/A | |
Eardley Holding A.G. | | 08/04/2011 | | | E | 232 | | | | (8 | ) | 10% pa | | None(10 ) | | | | N/A | |
Round Enterprises Ltd. | | 11/08/2011 | | | E | 400 | | | | (9 | ) | 10% pa | | None (10 ) | | | | N/A | |
Eardley Holding A.G. | | 11/08/2011 | | | E | 100 | | | | (9 | ) | 10% pa | | None (10 ) | | | | N/A | |
| | | | | | | | | | | | | | | | | | | | |
Total Short Term Principal Amounts | | | | | E | 5,258 | | | | | | | | | | | | | | |
Accrued Interest | | | | | E | 453 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total Short Term Notes to Payable to Related Parties | | | | | E | 5,711 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Eardley Holding A.G. (1) | | 06/23/2006 | | | E | 147 | | | | (2 | ) | 10% pa | | $ | US 0.10 | | | | N/A | |
Anglo Irish Bank S.A.(3) | | 10/21/2007 | | | E | 500 | | | | (2 | ) | 10% pa | | $ | US 0.50 | | | | 1.4090 | |
Round Enterprises Ltd. | | 12/10/2007 | | | E | 1,500 | | | | (2 | ) | 10% pa | | $ | US 0.50 | | | | 1.4429 | |
Round Enterprises Ltd. | | 01/22/2008 | | | E | 1,500 | | | | (2 | ) | 10% pa | | $ | US 0.50 | | | | 1.4629 | |
Round Enterprises Ltd. | | 04/25/2008 | | | E | 2,000 | | | | (2 | ) | 10% pa | | $ | US 0.50 | | | | 1.5889 | |
Round Enterprises Ltd. | | 06/30/2008 | | | E | 1,500 | | | | (2 | ) | 10% pa | | $ | US 0.50 | | | | 1.5380 | |
Round Enterprises Ltd. | | 11/18/2008 | | | E | 1,200 | | | | (2 | ) | 10% pa | | $ | US 0.50 | | | | 1.2650 | |
Round Enterprises Ltd. | | 02/09/2009 | | | E | 1,500 | | | | (2 | ) | 10% pa | | $ | US 0.50 | | | | 1.2940 | |
Round Enterprises Ltd. | | 06/15/2009 | | | E | 5,500 | | | | (2,4 | ) | 10% pa | | $ | US 0.80 | | | | 1.4045 | |
Eardley Holding A.G. | | 06/15/2009 | | | E | 100 | | | | (2,4 | ) | 10% pa | | $ | US 0.80 | | | | 1.4300 | |
Von Meyenburg | | 08/03/2009 | | | E | 200 | | | | (2 | ) | 10% pa | | $ | US 0.80 | | | | 1.4400 | |
Round Enterprises Ltd. | | 10/13/2009 | | | E | 2,000 | | | | (2 | ) | 5% pa | | $ | US 0.25 | | | | 1.4854 | |
Round Enterprises Ltd. | | 12/18/2009 | | | E | 2,200 | | | | (2 | ) | 5% pa | | $ | US 0.25 | | | | 1.4338 | |
| | | | | | | | | | | | | | | | | | | | |
Total Long Term Principal Amounts | | | | | E | 19,847 | | | | | | | | | | | | | | |
Accrued Interest | | | | | E | 5,484 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total Long Term Convertible Notesto Related Parties | | | | | E | 25,331 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total Convertible Notesto Related Parties | | | | | E | 31,042 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Norwood Contingent Liability | | | | | E | 5,753 | | | | (6 | ) | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
TOTAL LOANS, NOTES,AND CONTINGENT LIABILITY | | | | | E | 36,795 | | | | | | | | | | | | | | |
(1) Private investment company of Dr. Thomas Staehelin, member of the Board of Directors and of the Audit Committee of the Company. Face value is stated in U.S. dollars at $190,000.
(2) The earlier of: (i) the date that the Company has sufficient revenues to repay, or (ii) upon an event of default. The loan is secured against IP assets of Mymetics Corporation.
(3) Renamed Hyposwiss Private Bank Genève S.A. and acting on behalf of Round Enterprises Ltd. which is a major shareholder.
(4) The loan is secured against 2/3rds of the IP assets of Bestewil Holding BV.
(5) Under the terms of the acquisition of Bestewil BV, as part of the consideration, the Company issued to Norwood Immunology Limited (“NIL”) a convertible redeemable note (the “Note”) in the principal amount of E2,500 with a maturity date of April 1st, 2012 and bearing interest at 5% per annum. The note is secured against 1/3rd of Bestewil common stock.
(6) Under the terms of the acquisition of Bestewil BV, as part of the consideration, the Company is committed to make further payments to NIL in the event that certain stated milestones for the development of vaccines are achieved. These have been considered on a risk probability basis.
(7) The loan has matured on December 16, 2011. A subsequent agreement has been made to convert the loan, including the accrued interest as of February 9, 2012, into 19,301,474 shares at a conversion price of $0.08 per share.
(8) The loans expire the earlier of (i) January 31, 2012 or (ii) upon an event of default. The face values of the loans are stated in U.S. dollars at $1,200 and $300, respectively. As per February 14, 2012, a subsequent amendment has been made to the maturity date that has been extended to June 30, 2012.
(9) The loans expire the earlier of (i) February 29, 2012 or (ii) upon an event of default. As per February 14, 2012, a subsequent amendment has been made to the maturity date that has been extended to June 30, 2012.
(10) The conversion feature is contingent on an investment in the Company of not less than $20,000. The conversion price is determined by reducing by 10% the price per share of the Company’s common stock paid by the investors in connection with such an investment.
Required future payments on long-term debt are as follows as of December 31, 2010:2011:
| | | | |
|
2011 | | E | 4,472 | |
2012 | | | 2,718 | |
Contingent liability to Norwood (milestones and royalties) | | | 3,212 | |
Contingent on ability to repay | | | 23,510 | |
| | | |
| | E | 33,912 | |
| | | |
46
2012 | | E | 5,711 | |
Contingent liability to Norwood (milestones and royalties) | | | 5,753 | |
Contingent on ability to repay | | | 25,331 | |
| | | | |
| | E | 36,795 | |
Note 4. Income Taxes
The reconciliation of income tax on income computed at the federal statutory rates to income tax expense is as follows:
| | | | | | | | | | 2011 | | | 2010 | |
| | 2010 | | 2009 | | | | | | | |
U.S. Federal statutory rates on loss from operations | | E | (3,884 | ) | | E | (3,466 | ) | | E | (3,583 | ) | | E | (3,884 | ) |
Effect of foreign statutory rate differences | | 80 | | 185 | | | | 84 | | | | 80 | |
Effect of exchange rate changes | | | (1,182 | ) | | 36 | | | | (371 | ) | | | (1,182 | ) |
Expiration/disallowance of net operating loss carryforwards | | | | 1,785 | | | | | |
Permanent differences | | 873 | | | (549 | ) | | | 866 | | | | 873 | |
Increase in valuation allowance | | 4,087 | | 3,781 | | | | 1,235 | | | | 4,087 | |
Other | | 30 | | 3 | | | | (15 | ) | | | 30 | |
| | | | | | | | | | | | | |
Income tax provision (benefit) | | E | 4 | | E | (10 | ) | |
| | | | | | |
Income tax provision | | | E | 1 | | | E | 4 | |
Deferred tax asset is composed of the following:
| | | | | | | | | | 2011 | | | 2010 | |
| | 2010 | | 2009 | | | | | | | |
Licenses capitalized for United States tax purposes | | E | 1,252 | | E | 1,279 | | | E | 1,212 | | | E | 1,252 | |
License contract basis difference | | | (801 | ) | | | (867 | ) | | | -- | | | | (801 | ) |
IPR&D basis difference | | | (770 | ) | | | (770 | ) | | | (802 | ) | | | (770 | ) |
Stock options | | 81 | | — | | | | 110 | | | | 81 | |
Other | | 59 | | 54 | | | | -- | | | | 59 | |
Net operating loss carry forwards | | | | | | | | | |
United States | | 15,401 | | 11,818 | | | | 15,770 | | | | 15,401 | |
Switzerland | | 669 | | 459 | | | | 781 | | | | 669 | |
The Netherlands | | 335 | | 228 | | | | 447 | | | | 335 | |
Luxembourg | | 176 | | 174 | | | | 178 | | | | 176 | |
| | | | | | | | | | | | | |
| | 16,462 | | 12,375 | | | | 17,696 | | | | 16,462 | |
Less valuation allowance for deferred tax asset | | | (16,462 | ) | | | (12,375 | ) | | | (17,696 | ) | | | (16,462 | ) |
| | | | | | | | | | | | | |
Net deferred tax asset | | E | — | | E | — | | | E | -- | | | E | -- | |
| | | | | | |
The Company’sCompany's provision for income taxes was derived from U.S., Swiss, Netherlands and Luxembourg operations. At December 31, 2010,2011, the Company had estimated net operating loss carry forwards which expire as follows (the Luxembourg losses do not expire):
| | | | | | | | | | | | | | | | |
| | United States | | | Luxembourg | | | Switzerland | | | The Netherlands | |
2011 | | E | 597 | | | E | — | | | E | — | | | E | — | |
2012 | | | 1,093 | | | | — | | | | — | | | | — | |
2013 | | | — | | | | — | | | | — | | | | — | |
2014 | | | — | | | | — | | | | — | | | | — | |
2015 | | | — | | | | — | | | | — | | | | — | |
2016-2028 | | | 43,785 | | | | — | | | | 2,675 | | | | 1,341 | |
Perpetual | | | — | | | | 801 | | | | — | | | | — | |
| | | | | | | | | | | | |
| | | E45,475 | | | E | 801 | | | E | 2,675 | | | E | 1,341 | |
| | | | | | | | | | | | |
| | | United States | | | Luxembourg | | | Switzerland | | | The Netherlands | |
| | | | | | | | | | | | | |
2012 | | | | 1,093 | | | | -- | | | | -- | | | | -- | |
2013 | | | | -- | | | | -- | | | | -- | | | | -- | |
2014 | | | | -- | | | | -- | | | | -- | | | | -- | |
2015 | | | | -- | | | | -- | | | | -- | | | | -- | |
2016 | | | | | | | | | | | | 1,345 | | | | -- | |
2017-2031 | | | | 44,250 | | | | -- | | | | 1,707 | | | | 1,789 | |
Perpetual | | | | -- | | | | 810 | | | | -- | | | | -- | |
| | | | E | 45,343 | | | E | 810 | | | E | 3,052 | | | E | 1,789 | |
Note 5. Stock Options
2001 Qualified Incentive Stock Option Plan
The Company’sCompany's board of directors approved a Stock Option Plan on June 15, 2001, which provides for the issuance of up to 5,000,000 shares of the Company’sCompany's common stock to employees and non-employee directors.
No options were issued in the year ended December 31, 2011.
For the year ended December 31 2010, the Board of Directors of Mymetics awarded 4,350,000 incentive stock options to the employees and officers of the Company.Company with a weighted-average grant-date fair value of $0.11 per option. Incentive stock options were awarded on June 30, 2010, for a total of 3,350,000 shares with an exercise price of USD 0.14 per share, of which 1,850,000 vested immediately and 1,500,000 vest in equal quantities over the next three years. As part of the employment contract with the CFO of Mymetics, 1,000,000 employee incentive stock options were issued on July 1, 2010 with an exercise price of USD 0.19 per share, of which 250,000 vested immediately and 750,000 vest in equal quantities over the next threetwo years. No options were issued in the year ended December 31, 2009.
The Company recognized compensation expense related to the issued option grants of E238E86 and nilE238 for the years ended December 31, 20102011 and 2009,2010, respectively. These amounts were recognized as research and development expense and general and administrative expense based on the specific recipient of the award for the years ended December 31, 20102011 and 2009,2010, respectively. As of December 31, 2010,2011, a total of 2,250,0001,500,000 shares of common stock with E53 unrecognized compensation cost of E140 are unvested. The unrecognized compensation cost is expected to be recognized ratably through June 2013.over a weighted average period of one year.
47
A summary of activity related to stock options under the 2001 Stock Option Plan is represented below:
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | Weighted | | | | |
| | | | | | | | | | Weighted | | | Average | | | | |
| | | | | | | | | | Average | | | Remaining | | | Aggregate | |
| | Number of | | | Exercise Price | | | Exercise | | | Contractual | | | Intrinsic | |
| | Shares | | | Range | | | Price | | | Term (Years) | | | Value | |
Outstanding, December 31, 2008 | | | 442,500 | | | $ | 0.12 to $3.50 | | | $ | 0.97 | | | | | | | | | |
Granted | | | — | | | | — | | | | — | | | | | | | | | |
Forfeited | | | — | | | | — | | | | — | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Outstanding, December 31, 2009 | | | 442,500 | | | $ | 0.12 to $3.50 | | | $ | 0.97 | | | | | | | | | |
Granted | | | 4,350,000 | | | $ | 0.14 to $0.19 | | | $ | 0.15 | | | | | | | | | |
Forfeited | | | — | | | | — | | | | — | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Outstanding, December 31, 2010 | | | 4,792,500 | | | $ | 0.12 to $3.50 | | | $ | 0.23 | | | | 8.44 | | | $ | 103 | |
| | | | | | | | | | | | | | | |
Exercisable, December 31, 2010 | | | 2,542,500 | | | $ | 0.12 to $0.19 | | | $ | 0.29 | | | | 7.80 | | | $ | 61 | |
| | | | | | | | | | | | | | | |
| | Number of Shares | | | Exercise Price Range | | | Weighted Average Exercise Price | | | Weighted Average Remaining Contractual Term (Years) | | | Aggregate Intrinsic Value | |
| | | | | | | | | | | | | | | |
Outstanding,December 31, 2009 | | | 442,500 | | | $ | 0.12 to $3.50 | | | $ | 0.97 | | | | | | | |
Granted | | | 4,350,000 | | | $ | 0.14 to $0.19 | | | $ | 0.15 | | | | | | | |
Expired | | | -- | | | | -- | | | | -- | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Outstanding,December 31, 2010 | | | 4,792,500 | | | $ | 0.12 to $3.50 | | | $ | 0.23 | | | | | | | |
Granted | | | -- | | | | -- | | | | -- | | | | | | | |
Expired | | | (50,000 | ) | | $ | 2.50 | | | $ | 2.50 | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Outstanding,December 31, 2011 | | | 4,742,500 | | | $ | 0.12 to $3.50 | | | $ | 0.20 | | | | 7.55 | | | $ | -- | |
| | | | | | | | | | | | | | | | | | | | |
Exercisable,December 31, 2011 | | | 3,242,500 | | | $ | 0.12 to $0.19 | | | $ | 0.22 | | | | 7.27 | | | $ | -- | |
The aggregate intrinsic value of the stock options fluctuates in relation to the market price of our common stock.
The range of exercise prices for options outstanding and options exercisable under the 2001 Stock Option Plan at December 31, 20102011 are as follows:
| | | | | | | | | | | |
Number of | Number of | | | Number of | | | | |
shares | shares | | Exercise Price | shares | | | Exercise Price | |
| 17,500 | | $ | 3.50 | | | | | | |
| 50,000 | | $ | 3.15 | | 17,500 | | | $ | 3.50 | |
| 50,000 | | $ | 2.50 | | 50,000 | | | $ | 3.15 | |
| 100,000 | | $ | 0.55 | | 100,000 | | | $ | 0.55 | |
| 1,000,000 | | $ | 0.19 | | 1,000,000 | | | $ | 0.19 | |
| 3,425,000 | | $ | 0.14 | | 3,425,000 | | | $ | 0.14 | |
| 150,000 | | $ | 0.12 | | 150,000 | | | $ | 0.12 | |
A summary of the status of the Company’s nonvested options as of December 31, 20102011 and changes during the year ended December 31, 20102011 are presented below:
| | | | | | | | | |
| | Number of | | | | | Number of | | | | |
| | Shares | | Weighted Average | | | Shares | | | Weighted Average | |
| | Underlying | | Grant Date Fair | | | Underlying | | | Grant Date Fair | |
Nonvested options | | Options | | Value | | | Options | | | Value | |
Nonvested at December 31, 2009 | | — | | — | | |
| | | | | | | |
Nonvested at December 31, 2010 | | | | 2,250,000 | | | $ | 0.12 | |
Granted | | 4,350,000 | | $ | 0.11 | | | | | | | | -- | |
Vested | | | (2,100,000 | ) | | $ | 0.10 | | | | (750,000 | ) | | $ | 0.16 | |
| | | | | | |
Nonvested at December 31, 2010 | | 2,250,000 | | $ | 0.12 | | |
| | | | | | |
Nonvested at December 31, 2011 | | | | 1,500,000 | | | $ | 0.10 | |
The estimated fair value of the options on the date of grant was calculated using Black Scholes option pricing model and the following assumptions:assumptions for 2010 issuances:
| | | | |
| | Years ended December 31, |
| | 2010 | | 2009 |
Closing market price of common stock | | $0.135 – $0.16 | | — |
Estimated volatility | | 140.31% – 140.40% | | — |
Risk free interest rate | | 3.00% | | — |
Expected dividend rate | | — | | — |
Expected life | | 1.5 – 3.9 years | | — |
Closing market price of common stock | | $ | 0.135 - $0.16 | |
Estimated volatility | | | 140.31% - 140.40 | % |
Risk free interest rate | | | 3.00 | % |
Expected dividend rate | | | -- | |
Expected life | | 1.5 - 3.9 years | |
As of December 31, 2010,2011, the 2001 Stock Option Plan has 207,500 shares available for future grants of stock options.
Not included in the above table are the 19,218,450 options issued as part of the acquisition of Bestewil described in Note 7. Also not included is a warrant for 32,000,000 shares of common stock exercisable at $0.25 per share issued to Round Enterprises as part of a loan agreement in 2010.
The Company will issue new shares upon the exercise of any options.
Note 6. Commitments and Contingencies
Total rent expense per year was E174 for 2011 and E194 for 2010 and E1792010. A penalty of E54 has been paid for 2009.dropping the option on the additional space planned for a laboratory in Epalinges. The lease of the Company’s Nyon, Switzerland facility expiresexpired in 2011; the lease of the Company’s Lausanne, Switzerland facilities expires in 2016.2016 and the lease of the Company’s facilities in Leiden, the Netherlands, can be terminated in 2013.
Future lease payments expected on the above office leases are as follows for the years ending December 31, 2010.31:
Office Rent Expected | | | 2012 | | | 2013 | | | 2014 | | | 2015 | | | 2016 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Office Rent Expected | | 2011 | | 2012 | | 2013 | | 2014 | | 2015 | | Thereafter | | |
NYON | | E | 3 | | E | — | | E | — | | E | — | | E | — | | E | — | | |
LAUSANNE | | E | 113 | | E | 137 | | E | 137 | | E | 137 | | E | 137 | | E | 34 | | | E | 46 | | | E | 46 | | | E | 46 | | | E | 46 | | | E | 38 | |
LEIDEN | | E | 48 | | E | 48 | | E | 12 | | E | — | | E | — | | E | — | | | E | 86 | | | E | 57 | | | E | -- | | | E | -- | | | E | -- | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
TOTAL | | E | 164 | | E | 185 | | E | 149 | | E | 137 | | E | 137 | | E | 34 | | | E | 132 | | | E | 68 | | | E | 46 | | | E | 46 | | | E | 38 | |
As per an agreement signed on December 22, 2008, PX Therapeutics has granted the license rights of the general know-how of Gp41 manufacturing technology to Mymetics for five years. During this period, the Company pays to PX Therapeutics an annual fee of E200 until the expiration date of December 23, 2013.2012.
48
Note 7. Acquisition of Bestewil
On April 1, 2009 Mymetics and NILNorwood Immunology Limited (NIL) closed the acquisition of Bestewil Holding B.V. (“Bestewil”) from its parent, NIL, under a Share Purchase Agreement pursuant to which Mymetics agreed to purchase all issued and outstanding shares of capital stock (the “Bestewil Shares”) of Bestewil from its parent, NIL, and all issued and outstanding shares of capital stock of Virosome Biologicals B.V. which were held by Bestewil. Mymetics paid NIL E5,000 (the “Cash Consideration”)raised from bridge financing (the “Bridge Loan”)and issued to NIL a convertible redeemable note (the “Note”) in the principal amount of E2,500 due 36 months after the closing date, bearing interest at 5% per annum, convertible into shares of the Company’s common stock at a conversion rate of $0.50 (“the Conversion Price” since September 2010) and secured by the Company’s pledge of 1/3rd of the Bestewil Shares. The reduction of the Conversion price from $0.80 to $0.50 in September 2010 did not result in an extinguishment and reissuance of the note, nor did it result in a material adjustment in the consolidated financial statements. In addition, Mymetics granted NIL an option to acquire shares of Mymetics common stock equal to the result obtained by dividing $9,609 by the Conversion Price. As part of the Share Purchase Agreement, if Mymetics had issued shares of capital stock in connection with a financing to repay the Bridge Loan that had more favorable financial rights and preferences than the original conversion price or other terms, NIL had the right, at its election, to acquire those shares at the better terms. The advantage of this lower conversion price for the providers of the Bridge Loan has been treated in accordance with ASC Subtopic 470-20-40. The difference in the fair value of the shares issuable based on the terms of the original conversion price and the fair value of the shares actually issued based on the inducement terms is recorded as an expense of E807.
Since the Company reduced the conversion price of the Bridge Loan to finance the acquisition from $0.80 to $0.50 in September 2010, (see note 3), the result is that the option now allows NIL to acquire 19,218,450 shares of common stock. Prior to this, the option allowed NIL to acquire 12,011,531 shares of common stock at $0.80 per share. The difference between the fair value calculation of the option at the original exercise price of $0.80 and the now established $0.50 per share is E484 and has been recorded as a general and administrative expense and an increase in additional paid-in capital. The fair values were calculated with standard Black Scholes methodology using the following assumptions:
| | | | |
|
Risk free interest rate | | | 0.38 | % |
Expected dividends | | | 0 | % |
Expected term | | | 1.5 years | years |
Volatility | | | 131.92 | % |
Further contingent consideration to be paid under the Share Purchase Agreement includes:
| • | | A payment of up to E2,800 in cash in the event of a license agreement being signed by April 1, 2011 with a third party to access Bestewil intellectual property and know-how in the field of Respiratory Syncytial Virus (“RSV License”); |
|
| • | · | A payment of up to E3,000 in cash should a third party commence a Phase III clinical trial by April 1, 2013 for Mymetics’ Intranasal Influenza Vaccine licensed from Bestewil; |
|
| • | · | A payment of 50% of Mymetics’ net royalties received from a Respiratory Syncytial Virus license (RSV license), payable in cash, maximum amount unlimited; and |
|
| • | · | A payment in cash, maximum amount unlimited, of 25% of any net amounts received by Mymetics from a third party Herpes Simplex Virus license (HSV license) based upon Bestewil intellectual property. |
Under the terms of the Share Purchase Agreement, Mymetics has entered into an employment agreement with Antonius Stegmann, CSO of Virosome Biologicals B.V. (renamed Mymetics B.V.).
The acquisition of Bestewil has expanded Mymetics’ current portfolio of vaccines and vaccine candidates.
The acquisition of Bestewil has been recorded as a business acquisition. In a business acquisition, the purchase price of an acquired entity is allocated to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition.
The Company has concluded the measurement period for estimating the fair value of the purchase consideration. The fair value of the purchase consideration for the Bestewil acquisition on April 1, 2009 was as follows:
| | | | | | | | | | | | |
| | As | | | Measurement | | | | |
| | Initially | | | Period | | | As | |
| | Recorded | | | Adjustments | | | Adjusted | |
Cash paid to Norwood | | E | 5,000 | | | E | — | | | E | 5,000 | |
Convertible note payable issued | | | 2,500 | | | | — | | | | 2,500 | |
Equity options issued | | | 601 | | | | — | | | | 601 | |
Contingent consideration: | | | | | | | | | | | | |
Royalties for Influenza Vaccine | | | — | | | | 1,800 | | | | 1,800 | |
Royalties for RSV | | | 700 | | | | 729 | | | | 1,429 | |
Royalties for HSV | | | 750 | | | | (429 | ) | | | 321 | |
| | | | | | | | | |
Total purchase consideration | | E | 9,551 | | | E | 2,100 | | | E | 11,651 | |
| | | | | | | | | |
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The range of the undiscounted amounts the Company could pay in contingent consideration is not determinable since it is based on sales of vaccines that are yet to be developed. The fair value of the contractual obligations to pay the contingent consideration recognized on the acquisition date wasis determined based on a risk-adjusted, discounted cash flow approach. This fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement within the fair value hierarchy. The resultant cash flows wereare discounted using a discount rate of 25%, which the Company believes is appropriate and is representative of a market participant assumption.
The options to acquire 12,011,531 shares of common stock had a grant date fair value of E0.05 using the following assumptions:
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|
Expected volatility | | | 157.60 | % |
Risk-free interest rate | | | 0.65 | % |
Expected term in years | | | 1.5 | |
Dividend yield | | | 0.00 | % |
The Company’s fair value estimates of the purchase price consideration are assigned to the assets acquired and liabilities assumed based on their estimated fair values as of April 1, 2009:
| | | | |
| | Purchase Price Allocation | |
Assets: | | | | |
Current assets | | E | 90 | |
License contract (Intranasal Influenza Vaccine) | | | 2,694 | |
In-process research and development (HSV and RSV) | | | 2,266 | |
Goodwill | | | 6,671 | |
Property and equipment | | | 98 | |
Other non-current assets | | | 7 | |
| | | |
Total assets | | | 11,826 | |
Liabilities: | | | | |
Current liabilities | | | 175 | |
| | | |
Total liabilities | | E | 175 | |
| | | |
Total purchase consideration | | E | 11,651 | |
| | | |
The above allocation is final. The license contract will be amortized over 14 years.
The fair value of the in-process research and development assets and license contract were estimated using an income approach and Level 3 inputs. Under this method, an intangible asset’s fair value is equal to the present value of the incremental after-tax cash flows (excess earnings) attributable solely to the intangible asset over its remaining useful life. To calculate fair value, the Company used risk-adjusted cash flows discounted at rates considered appropriate given the inherent risks associated with each type of asset. The Company believes that the level and timing of cash flows appropriately reflect market participant assumptions. Cash flows were generally assumed to extend either through the patent life underlying each product.
The Company derived the estimated cash flows from the existing license in the case of the Solvay contract and the projected revenues of drugs developed with in-process research and development. The fair value of in-process research and development also includes an existing royalty payable by the Company to Norwood based on the net sales derived from drugs that use the IPR&D technology. The discount rate applied to the estimated cash flows for all intangible assets acquired was 25%. We believe the discount rate used is consistent with what a market participant would use.
The E6,671 of goodwill was assigned to the vaccine development reporting unit, which is the only reporting unit as of December 31, 2010. The goodwill recognized is attributable primarily to the potential additional applications for the acquired patents, expected corporate synergies, the assembled workforce of Bestewil and other factors. None of the goodwill is expected to be deductible for income tax purposes.
Note 8. Fair Value Measurements
As of December 31, 2010,2011, the Company held a liability for acquisition-related contingent consideration that is required to be measured at fair value on a recurring basis.
The Company’s acquisition-related contingent consideration is measured at fair value on a recurring basis using Level 3 inputs.
The following table presents changes to the Company’s acquisition-related contingent consideration for the years ended December 31, 20102011 and 2009:2010:
| | | | | | | | |
| | Fair Value Measurements Using Significant | |
| | Unobservable Inputs (Level 3) | |
| | Acquisition-related Contingent Consideration | |
| | 2010 | | | 2009 | |
Balance at January 1 | | E | 1,936 | | | E | 3,550 | |
Change in fair value recorded in earnings | | | 1,276 | | | | (1,614 | ) |
| | | | | | |
Balance at December 31 | | E | 3,212 | | | E | 1,936 | |
| | | | | | |
As | | Fair Value Measurements Using Significant | |
| | Unobservable Inputs(Level 3) | |
| | Acquisition-related Contingent Consideration | |
| | | | | | |
| | 2011 | | | 2010 | |
| | | | | | |
Balance at January 1 | | E | 3,212 | | | E | 1,936 | |
Change in fair value recorded in earnings | | | 2,541 | | | | 1,276 | |
Balance at December 31 | | E | 5,753 | | | E | 3,212 | |
The fair value recorded as of December 31, 2010 was determined based on a projection period ending in 2023, which corresponds to the lifetime of the underlying patents. This projection period has been extended to 2030 based on management’s revised assessment of the Company’s ability to generate new patents from its research, in the fair value calculation performed as December 31, 2011. At the time of the acquisition-relatedacquisition the RSV vaccine was originally planned to be out-licensed after the pre-clinical phase with potential royalties of 2%. Management’s new plan is to bring the RSV vaccine through a Phase I and II, which adds considerable value and changes expected royalties to 10% and therefore increased the liability due to NIL. Additionally, the contingent consideration increased fromrelated to the acquisition date primarily dueintra-nasal influenza vaccine has been reduced to timing,zero, as cash payments get closer.it is very unlikely that the Phase III clinical trial will start before April 1, 2013, now that the Company has regained the rights to the influenza vaccine technology.
Note 9. Intangible Assets
Intangible assets consisted of
Intangible assets consisted of the following at December 31, 2011 and December 31, 2010: | | | | | | |
| | December 31, 2011 | | | December 31, 2010 | |
Indefinite-lived intangibles: | | | | | | |
In process research and development | | E | 2,266 | | | E | 2,266 | |
Definite-lived intangibles: | | | | | | | | |
License contract | | E | -- | | | E | 2,694 | |
Less accumulated amortization | | | -- | | | | (337 | ) |
| | | -- | | | | 2,357 | |
Other intangibles, net | | E | 2,266 | | | E | 4,624 | |
During the following atyear ended December 31, 20102011, the license contract has been returned to Mymetics and December 31, 2009:therefore it has been fully impaired and written off.
| | | | | | | | |
| | December 31, 2010 | | | December 31, 2009 | |
Indefinite-lived intangibles: | | | | | | | | |
In process research and development | | E | 2,266 | | | E | 2,266 | |
Definite-lived intangibles: | | | | | | | | |
License contract | | E | 2,694 | | | E | 2,694 | |
Less accumulated amortization | | | (337 | ) | | | (144 | ) |
| | | | | | |
| | | 2,357 | | | | 2,550 | |
| | | | | | |
Other intangibles, net | | E | 4,624 | | | E | 4,816 | |
| | | | | | |
Amortization of intangibles amounting to E193E144 and E144E193 has been recorded during the years ended December 31, 2011 and 2010, respectively.
Note 10. Subsequent Events
On January 30, 2012, Jacques-François Martin resigned as President and 2009, respectively. AmortizationCEO of the Company effective no later than May 1, 2012 in accordance with the notice requirement in his employment agreement with Mymetics, stating his desire to spend more time with his family. Jacques-François Martin intended to remain as Chairman of the Board for the years 2011 through 2015 is expectedforeseeable future. On March 23, 2012 we announced that in connection with our financing efforts and decision to pursue new strategic alternatives, including moving our headquarters to the United States, we appointed Dr. Christopher S. Henney to be E192Chairman of our Board of Directors and Grant Pickering to be President and CEO and a member of our Board of Directors. We also added Ulrich Burkhard, Managing Partner and Director of the Marcuard Family Office, as a director. Concurrent with the appointment of these three individuals to these Board and executive positions, Jacques-François Martin resigned as Chairman of our Board of Directors and Sylvain Fleury, Christian Rochet and Martine Reindle resigned as members of our Board of Directors.
On February 10, 2012, the expired loan from Round Enterprises dated December 9, 2010, with a value of E1,100 and maturity date December 16, 2011 has been agreed to be converted into 19,301,474 Mymetics common shares. The principal amount and accrued interest have been converted into shares using an exchange rate of $1.3260 per year.Euro and a conversion price of $0.08 per share.
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On February 14, 2012, an amendment was made to the maturity date of the $1,200 and the €400 convertible notes of Round Enterprises dated August 4, 2011 and November 8, 2011, respectively. On the same date the maturity date was also amended for the convertible notes of Eardley Holding of $300 and €100, dated August 4, 2011 and November 8, 2011, respectively. The new maturity date for these four loans has been amended to June 30, 2012.
On February 17, 2012, two new convertible loans from the company’s main shareholders have been contracted for a total of E1,200,000 and bearing an interest rate of 10%.The maturity date is June 30, 2012. The conversion price is determined by reducing by 10% the price per share of the Company’s common stock paid by the investors in connection with an investment in the Company of not less than $20,000.
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | | | |
| Mymetics Corporation
| |
| By: | /s/ Jacques-François Martin | |
| | Name: | Jacques-François Martin | |
| | Title: | Chief Executive Officer and Director | |
March 28, 2011
| | | | |
| By: | /s/ Sylvain Fleury | |
| | Name: | Sylvain Fleury, Ph.D. | |
| | Title: | Chief Scientific Officer and Director | |
March 28, 2011
| | | | |
| | |
| By: | /s/ Ernest Stern Jacques-François Martin | |
| | |
| Name: | Ernest Stern Jacques-François Martin | |
| | Title: | Chief Executive Officer and Director | |
March 28, 2011
| | | March 29, 2012 | |
| | |
| By: | /s/ Dr. Thomas Staehelin Sylvain Fleury | |
| | |
| Name: Sylvain Fleury, Ph.D. | Thomas Staehelin |
| Title: Chief Scientific Officer and Director | |
| | |
| | Title: |
Director | By: | /s/ Ernest Stern | |
| | |
| Name: Ernest Stern | |
| Title: Director | |
| | |
| | |
| By: | /s/ Dr. Thomas Staehelin | |
| | |
| Name: Thomas Staehelin | |
| Title: Director | |
| | |
March 28, 2011
POWERS OF ATTORNEY
Each person whose signature appears below constitutes and appoints Ernst Luebke as his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the U.S. Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or their substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature | | Title |
| | |
/s/ Jacques-François Martin | | Chief Executive Officer and Director |
Jacques-François Martin | | (Principal Executive Officer) |
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| | |
| | |
/s/ Ronald Kempers | | Chief Financial Officer |
Ronald Kempers | | (Principal Financial and Accounting Officer) |
| | |
| | |
| | |
/s/ Sylvain Fleury | | Chief Scientific Officer and Director |
Sylvain Fleury, Ph.D. | | |
| | |
| | |
| | |
/s/ Ernest Stern | | Director |
Ernest Stern | | |
| | |
| | |
| | |
/s/ Dr.Thomas Staehelin | | Director |
Thomas Staehelin | | |
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