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SECURITIES AND EXCHANGE COMMISSION
þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 98-0379351 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of Each Class* Common Stock, $.001 par value Preferred Share Purchase Rights | Name of Each Exchange on Which Registered* The NASDAQ Capital Market |
None
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Exhibit 32.1 |
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• | our need for, and our ability to obtain, additional funds; | ||
• | uncertainties relating to clinical trials and regulatory reviews; | ||
• | our dependence on a limited number of therapeutic compounds; | ||
• | the early stage of the products we are developing; | ||
• | the acceptance of any of our future products by physicians and patients; | ||
• | competition and dependence on collaborative partners; | ||
• | loss of key management or scientific personnel; | ||
• | our ability to obtain adequate intellectual property protection and to enforce these rights; | ||
• | our ability to avoid infringement of the intellectual property rights of others; and | ||
• | the other factors and risks described under the section captioned “Risk Factors” as well as other factors not identified therein. |
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• | DR Cysteamine for the potential treatment of nephropathic cystinosis, or cystinosis, a rare genetic disorder; | ||
• | DR Cysteamine for the potential treatment of non-alcoholic steatohepatitis, or NASH, a metabolic disorder of the liver; and | ||
• | DR Cysteamine for the potential treatment of Huntington’s Disease, or HD. |
• | Convivia™ for the potential management of acetaldehyde toxicity due to alcohol consumption by individuals with aldehyde dehydrogenase, or ALDH2 deficiency, an inherited metabolic disorder; and | ||
• | Tezampanel and NGX426, non-opioids for the potential treatment of: migraine, acute pain, and chronic pain. |
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DRUG PRODUCT CANDIDATE | DISEASE INDICATION | STAGE OF DEVELOPMENT | ||
Delayed release, enterically coated cysteamine bitartrate, or DR Cysteamine | cystinosis | Phase IIb (ongoing, open IND) Orphan Product Designation | ||
DR Cysteamine | NASH | Phase IIa (ongoing, open IND) | ||
DR Cysteamine | HD | Phase II (planned for 2010) Orphan Product Designation | ||
ConviviaTM | ALDH2 Deficiency, or Ethanol Intolerance | Business Development Opportunity (Phase IIa completed) | ||
Tezampanel and NGX 426 | Migraine and Pain | Business Development Opportunity (Phase I/II completed) | ||
HepTideTM | Hepatocellular Carcinoma, or HCC and Hepatitis | Preclinical (ongoing) | ||
WntTideTM | Breast Cancer | Preclinical (ongoing) | ||
NeuroTransTM | Neurodegenerative Diseases | Preclinical Roche collaboration (ongoing) | ||
Tezampanel and NGX 426 | Thrombosis and Spasticity Disorder | Preclinical |
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• | RAP is captured by hepatocytes with efficiency, primarily on first-pass. | ||
• | Late-stage HCC is perfused exclusively by the hepatic artery, while the majority of the liver is primarily perfused through the portal vein. |
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• | Neurosurgery or invasive techniques. | ||
• | Pharmacological techniques, which include less than 2% of currently available drugs. | ||
• | Physiologically based techniques, such as transcytosis. |
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• | completion of preclinical studies; | ||
• | the submission to the FDA of a request for authorization to conduct clinical trials on an investigational new drug application, or IND, which must become effective before clinical trials may commence; | ||
• | adequate and well-controlled Phase I, Phase II and Phase III clinical trials to establish and confirm the safety and efficacy of a drug candidate; | ||
• | submission to the FDA of a new drug application, or NDA, for the drug candidate for marketing approval; and | ||
• | review and approval of the NDA by the FDA before the product may be shipped or sold commercially. |
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• | a limited number of, and competition for, suitable patients with particular types of disease for enrollment in clinical trials; | ||
• | delays or failures in obtaining regulatory clearance to commence a clinical trial; |
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• | delays or failures in obtaining sufficient clinical materials; | ||
• | delays or failures in reaching agreement on acceptable clinical trial agreement terms or clinical trial protocols with prospective sites; and | ||
• | delays or failures in obtaining Institutional Review Board, or IRB, approval to conduct a clinical trial at a prospective site. |
• | slower than expected rates of patient recruitment and enrollment; | ||
• | failure of patients to complete the clinical trial; | ||
• | unforeseen safety issues; | ||
• | lack of efficacy during clinical trials; | ||
• | inability or unwillingness of patients or medical investigators to follow our clinical trial protocols; | ||
• | inability to monitor patients adequately during or after treatment; and | ||
• | regulatory action by the FDA for failure to comply with regulatory requirements. |
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• | the progress, timing and scope of our preclinical studies and clinical trials; | ||
• | the time and cost necessary to obtain regulatory approvals; | ||
• | the time and cost necessary to develop commercial manufacturing processes, including quality systems, and to build or acquire manufacturing capabilities; | ||
• | the time and cost necessary to respond to technological and market developments; and | ||
• | any changes made or new developments in our existing collaborative, licensing and other corporate relationships or any new collaborative, licensing and other commercial relationships that we may establish. |
• | additional licenses and collaborative agreements; | ||
• | contracts for manufacturing, clinical and preclinical research, consulting, maintenance and administrative services; and | ||
• | financing facilities. |
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• | the possibility that preclinical testing or clinical trials may show that our drug product candidates are ineffective and/or cause harmful side effects; | ||
• | our drug product candidates may prove to be too expensive to manufacture or administer to patients; | ||
• | our drug product candidates may fail to receive necessary regulatory approvals from the FDA or foreign regulatory authorities in a timely manner, or at all; | ||
• | our drug product candidates, if approved, may not be produced in commercial quantities or at reasonable costs; | ||
• | our drug product candidates, if approved, may not achieve commercial acceptance; | ||
• | regulatory or governmental authorities may apply restrictions to our drug product candidates, which could adversely affect their commercial success; and | ||
• | the proprietary rights of other parties may prevent us or our potential collaborative partners from marketing our drug product candidates. |
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• | conduct research, preclinical testing and human studies; | ||
• | establish pilot scale and commercial scale manufacturing processes and facilities; and | ||
• | establish and develop quality control, regulatory, marketing, sales, finance and administrative capabilities to support these programs. |
• | the pace of scientific progress in our research and development programs and the magnitude of these programs; | ||
• | the scope and results of preclinical testing and human clinical trials; | ||
• | our ability to obtain, and the time and costs involved in obtaining regulatory approvals; | ||
• | our ability to prosecute, maintain, and enforce, and the time and costs involved in preparing, filing, prosecuting, maintaining and enforcing patent claims; | ||
• | competing technological and market developments; | ||
• | our ability to establish additional collaborations; | ||
• | changes in our existing collaborations; | ||
• | the cost of manufacturing scale-up; and | ||
• | the effectiveness of our commercialization activities. |
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• | efficacy or safety concerns with the drug product candidates, even if not justified; | ||
• | unexpected side-effects; | ||
• | regulatory proceedings subjecting the drug product candidates to potential recall; | ||
• | publicity affecting doctor prescription or patient use of the drug product candidates; | ||
• | pressure from competitive products; or | ||
• | introduction of more effective treatments. |
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• | Certain of our competitors in the field have already received regulatory approvals for and have begun marketing similar products in the U.S., the EU, Japan and other territories, which may result in greater physician awareness of their products as compared to ours. | ||
• | Information from our competitors or the academic community indicating that current products or new products are more effective than our future products could, if and when it is generated, impede our market penetration or decrease our future market share. | ||
• | Physicians may be reluctant to switch from existing treatment methods, including traditional therapy agents, to our future products. | ||
• | The price for our future products, as well as pricing decisions by our competitors, may have an effect on our revenues. | ||
• | Our future revenues may diminish if third-party payers, including private healthcare coverage insurers and healthcare maintenance organizations, do not provide adequate coverage or reimbursement for our future products. |
• | We or our collaborator/licensee will not be able to produce enough RAP drug product candidates for testing; | ||
• | the pharmacokinetics, or where the drug distributes in the body, of our RAP drug product candidates will preclude sufficient binding to the targeted receptors on the blood-brain barrier; | ||
• | the targeted receptors are not transported across the blood-brain barrier; | ||
• | other features of the blood-brain barrier, apart from the cells, block access molecules to brain tissue after transport across the cells; | ||
• | the targeted receptors are expressed on the blood-brain barrier at densities insufficient to allow adequate transport of our RAP drug product candidates into the brain; | ||
• | targeting of the selected receptors induces harmful side-effects which prevent their use as drugs; or | ||
• | that we or our collaborator/licensee’s RAP drug product candidates cause unacceptable side-effects. |
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• | collaborative arrangements might not be on terms favorable to us; | ||
• | disagreements with partners may result in delays in the development and marketing of products, termination of collaboration agreements or time consuming and expensive legal action; | ||
• | we cannot control the amount and timing of resources partners devote to product candidates or their prioritization of product candidates, and partners may not allocate sufficient funds or resources to the development, promotion or marketing of our product candidates, or may not perform their obligations as expected; | ||
• | partners may choose to develop, independently or with other companies, alternative products or treatments, including products or treatments which compete with ours; |
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• | agreements with partners may expire or be terminated without renewal, or partners may breach collaboration agreements with us; | ||
• | business combinations or significant changes in a partner’s business strategy might adversely affect that partner’s willingness or ability to complete their obligations to us; and | ||
• | the terms and conditions of the relevant agreements may no longer be suitable. |
• | We do not know whether our patent applications will result in issued patents. For example, we may not have developed a method for treating a disease before others developed similar methods. |
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• | Competitors may interfere with our patent process in a variety of ways. Competitors may claim that they invented the claimed invention prior to us. Competitors may also claim that we are infringing on their patents and therefore cannot practice our technology as claimed under our patents, if issued. Competitors may also contest our patents, if issued, by showing the patent examiner that the invention was not original, was not novel or was obvious. In litigation, a competitor could claim that our patents, if issued, are not valid for a number of reasons. If a court agrees, we would lose that patent. As a company, we have no meaningful experience with competitors interfering with our patents or patent applications. | ||
• | Enforcing patents is expensive and may absorb significant time of our management. Management would spend less time and resources on developing drug product candidates, which could increase our operating expenses and delay product programs. | ||
• | Receipt of a patent may not provide much practical protection. If we receive a patent with a narrow scope, then it will be easier for competitors to design products that do not infringe on our patent. | ||
• | In addition, competitors also seek patent protection for their technology. Due to the number of patents in our field of technology, we cannot be certain that we do not infringe on those patents or that we will not infringe on patents granted in the future. If a patent holder believes our drug product candidate infringes on its patent, the patent holder may sue us even if we have received patent protection for our technology. If someone else claims we infringe on their technology, we would face a number of issues, including the following: |
• | Defending a lawsuit takes significant time and can be very expensive. | ||
• | If a court decides that our drug product candidate infringes on the competitor’s patent, we may have to pay substantial damages for past infringement. |
• | A court may prohibit us from selling or licensing the drug product candidate unless the patent holder licenses the patent to us. The patent holder is not required to grant us a license. If a license is available, we may have to pay substantial royalties or grant cross licenses to our patents. | ||
• | Redesigning our drug product candidates so we do not infringe may not be possible or could require substantial funds and time. |
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• | the results of our current and any future clinical trials of our drug candidates; | ||
• | the results of ongoing preclinical studies and planned clinical trials of our preclinical drug candidates; | ||
• | the entry into, or termination of, key agreements, including key strategic alliance agreements; | ||
• | the results and timing of regulatory reviews relating to the approval of our drug candidates; | ||
• | the initiation of, material developments in, or conclusion of litigation to enforce or defend any of our intellectual property rights; | ||
• | failure of any of our drug candidates, if approved, to achieve commercial success; | ||
• | general and industry-specific economic conditions that may affect our research and development expenditures; | ||
• | the results of clinical trials conducted by others on drugs that would compete with our drug candidates; | ||
• | issues in manufacturing our drug candidates or any approved products; | ||
• | the loss of key employees; | ||
• | the introduction of technological innovations or new commercial products by our competitors; | ||
• | changes in estimates or recommendations by securities analysts, if any, who cover our common stock; | ||
• | future sales of our common stock; | ||
• | changes in the structure of health care payment systems; and | ||
• | period-to-period fluctuations in our financial results. |
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Number of shares | Number of shares | |||||||
Name of nominee | voted FOR | WITHHELD | ||||||
Christopher M. Starr, Ph.D. | 11,904,766 | 2,741 | ||||||
Raymond W. Anderson | 11,401,363 | 2,223 | ||||||
Erich Sager | 11,401,177 | 2,410 | ||||||
Richard L. Franklin, M.D., Ph.D. | 11,401,491 | 2,096 |
Number of shares voted FOR: | 11,008,116 | |||
Number of shares voted AGAINST: | 9,884 | |||
Number of shares ABSTAINING: | 303 |
Number of shares voted FOR: | 11,390,756 | |||
Number of shares voted AGAINST: | 8,810 | |||
Number of shares ABSTAINING: | 4,021 |
Number of shares voted FOR: | 11,387,437 | |||
Number of shares voted AGAINST: | 16,149 | |||
Number of shares ABSTAINING: | 0 |
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Period | High | Low | ||||||
2008 Fiscal Quarters: | ||||||||
September 1, 2007 — November 30, 2007 | $ | 2.83 | $ | 2.02 | ||||
December 1, 2007 — February 29, 2008 | $ | 2.66 | $ | 1.63 | ||||
March 1, 2008 — May 31, 2008 | $ | 2,87 | $ | 2.02 | ||||
June 1, 2008 — August 31, 2008 | $ | 2,49 | $ | 1,63 | ||||
2009 Fiscal Quarters: | ||||||||
September 1, 2008— November 30, 2008 | $ | 2.06 | $ | 0.51 | ||||
December 1, 2008— February 29, 2009 | $ | 1.67 | $ | 0.43 | ||||
March 1, 2009— May 31, 2009 | $ | 1.63 | $ | 0.64 | ||||
June 1, 2009— August 31, 2009 | $ | 2.23 | $ | 1.24 |
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For the period | ||||||||||||
from | ||||||||||||
September 8, | ||||||||||||
2005 | ||||||||||||
(inception) to | ||||||||||||
For the year ended | For the year ended | August 31, | ||||||||||
August 31, 2009 | August 31, 2008 | 2009 | ||||||||||
Revenues: | $ | $ | — | $ | — | |||||||
Operating expenses: | ||||||||||||
General and administrative | 2,687,993 | 2,229,140 | 6,956,240 | |||||||||
Research and development | 6,570,119 | 5,558,871 | 14,874,284 | |||||||||
In-process research and development | — | 240,625 | 240,625 | |||||||||
Total operating expenses | 9,258,112 | 8,028,636 | 22,071,149 | |||||||||
Loss from operations | (9,258,112 | ) | (8,028,636 | ) | (22,071,149 | ) | ||||||
Interest income | 36,744 | 77,871 | 301,903 | |||||||||
Interest expense | (2,526 | ) | (103,198 | ) | (109,937 | ) | ||||||
Net loss | $ | (9,223,894 | ) | $ | (8,053,963 | ) | $ | (21,879,183 | ) | |||
Net loss per share: | ||||||||||||
Basic and diluted | $ | (0.64 | ) | $ | (0.81 | ) | ||||||
Weighted average shares outstanding used to compute: | ||||||||||||
Basic and diluted | 14,440,254 | 9,893.612 | ||||||||||
August 31, | ||||||||
Balance Sheet Data: | 2009 | 2008 | ||||||
Cash and cash equivalents | $ | 3,701,787 | $ | 7,546,912 | ||||
Working capital | 2,739,904 | 6,659,225 | ||||||
Total assets | 6,578,574 | 10,620,770 | ||||||
Long-term portion of capital lease obligations | 6,676 | — | ||||||
Total liabilities | 1,075,613 | 1,003,280 | ||||||
Total stockholders’ equity | 5,502,961 | 9,617,490 |
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• | DR Cysteamine for the potential treatment of nephropathic cystinosis, or cystinosis, a rare genetic disorder; | ||
• | DR Cysteamine for the potential treatment of non-alcoholic steatohepatitis, or NASH, a metabolic disorder of the liver; and | ||
• | DR Cysteamine for the potential treatment of Huntington’s Disease, or HD. |
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• | Convivia™ for the potential management of acetaldehyde toxicity due to alcohol consumption by individuals with aldehyde dehydrogenase, or ALDH2 deficiency, an inherited metabolic disorder; and | ||
• | Tezampanel and NGX426, non-opioids for the potential treatment of: migraine, acute pain, and chronic pain. |
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• | RAP is captured by hepatocytes with efficiency, primarily on first-pass. | ||
• | Late-stage HCC is perfused exclusively by the hepatic artery, while the majority of the liver is primarily perfused through the portal vein. |
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Estimated | ||||||||||||||||
FYE | Cumulative Through | FYE | FYE | |||||||||||||
Major Program (stage of development) | August 31, 2010 | August 31, 2009 | August 31, 2009 | August 31, 2008 | ||||||||||||
DR Cysteamine — All Indications (clinical) | 6.0 | 5.0 | 4.0 | 1.0 | ||||||||||||
ConviviaTM (clinical) | 0.1 | 2.1 | 0.4 | 1.7 | ||||||||||||
HepTideTM (preclinical) | 0.1 | 1.6 | 0.4 | 0.7 | ||||||||||||
NeuroTransTM (preclinical) | — | 0.3 | (0.3 | ) | 0.3 | |||||||||||
WntTideTM (preclinical) | — | 0.3 | 0.1 | 0.2 | ||||||||||||
Minor or Inactive Programs | — | 0.7 | 0.1 | 0.2 | ||||||||||||
R & D Personnel and Other Costs Not Allocated to Programs | 1.7 | 4.9 | 1.9 | 1.5 | ||||||||||||
Total Research & Development Expenses | 7.9 | 14.9 | 6.6 | 5.6 |
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Estimated | ||||||||||||||||
FYE | Cumulative Through | FYE | FYE | |||||||||||||
Major Program (stage of development) | August 31, 2010 | August 31, 2009 | August 31, 2009 | August 31, 2008 | ||||||||||||
DR Cysteamine — All Indications (clinical) | 0.10 | 0.20 | 0.12 | 0.08 | ||||||||||||
ConviviaTM (clinical) | 0.01 | 0.09 | 0.05 | 0.04 | ||||||||||||
HepTideTM (preclinical) | 0.05 | 0.17 | 0.07 | 0.05 | ||||||||||||
NeuroTransTM (preclinical) | 0.03 | 0.15 | 0.05 | 0.05 | ||||||||||||
WntTideTM (preclinical) | 0.01 | 0.06 | 0.01 | 0.02 |
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Estimated spending for the next 12 months: | ||||
Research and development activities | $ | 6,600,000 | ||
Research and development compensation and benefits | 1,300,000 | |||
General and administrative activities | 1,400,000 | |||
General and administrative compensation and benefits | 1,180,000 | |||
Capital expenditures | 20,000 | |||
Total estimated spending for the next 12 months | $ | 10,500,000 | ||
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• | $50,000 (paid by us in June 2006) within 30 days after we receive total aggregate debt or equity financing of at least $2,500,000; | ||
• | $100,000 (paid by us in June 2006) within 30 days after we receive total aggregate debt or equity financing of at least $5,000,000; | ||
• | $500,000 upon our filing and acceptance of an investigational new drug application for a drug product candidate based on our NeuroTransTM product candidate; | ||
• | $2,500,000 upon our successful completion of a Phase II human clinical trial for a drug product candidate based on our NeuroTransTM product candidate; | ||
• | $5,000,000 upon our successful completion of a Phase III human clinical trial for a drug product candidate based on our NeuroTransTM product candidate; | ||
• | $12,000,000 within 90 days of our obtaining marketing approval from the FDA or other similar regulatory agencies for a drug product candidate based on our NeuroTransTM product candidate; | ||
• | $5,000,000 within 90 days of our obtaining marketing approval from the FDA or other similar regulatory agencies for a second drug product candidate based on our NeuroTransTM product candidate; | ||
• | $5,000,000 within 60 days after the end of the first calendar year in which our aggregated revenues derived from drug product candidates based on our NeuroTransTM product candidate exceed $100,000,000; and | ||
• | $20,000,000 within 60 days after the end of the first calendar year in which our aggregated revenues derived from drug product candidates based on our NeuroTransTM product candidate exceed $500,000,000. |
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• | 23,312 shares of our restricted, unregistered common stock within fifteen (15) days after we enter into a manufacturing license or other agreement to produce any product that is predominantly based upon or derived from any assets purchased from Convivia, or Purchased Assets, in quantity, referred to as Product, if such license agreement is executed within one (1) year of execution of the Asset Purchase Agreement or, if thereafter, 11,656 shares of our restricted, unregistered common stock. Should we obtain a second such license or agreement for a Product, Mr. Daley will be entitled to receive 11,656 shares of our restricted, unregistered common stock within 30 days of execution of such second license or other agreement. On March 31, 2008, we issued 23,312 shares of our common stock valued at $56,000 to Mr. Daley pursuant to this milestone reflecting the execution of an agreement to supply the active pharmaceutical ingredient for ConviviaTM , combined with the execution of a formulation agreement to produce the oral formulation of ConviviaTM | ||
• | 23,312 shares of our restricted, unregistered common stock within fifteen (15) days after we receive our first patent allowance on any patents which constitute part of the Purchased Assets in any one of certain predetermined countries, or Major Market. | ||
• | 11,656 shares of our restricted, unregistered common stock within fifteen (15) days after we receive our second patent allowance on any patents which constitute part of the Purchased Assets different from the patent referenced in the immediately preceding bullet point above in a Major Market. | ||
• | 23,312 shares of our restricted, unregistered common stock within fifteen (15) days of completion of predetermined benchmarks in a Major Market by us or our licensee of the first phase II human clinical trial for a Product, or Successful Completion if such Successful Completion occurs within one (1) year of execution of the Asset Purchase Agreement or, if thereafter, 11,656 shares of our restricted, unregistered common stock within thirty (30) days of such Successful Completion. In October 2008, we issued 23,312 shares of our common stock valued at $27,000 and a $30,000 cash bonus (pursuant to Mr. Daley’s employment agreement) to Mr. Daley pursuant to the fulfillment of this milestone. | ||
• | 11,656 shares of our restricted, unregistered common stock within fifteen (15) days of a Successful Completion in a Major Market by us or our licensee of the second phase II human clinical trial for a Product (other than the Product for which a distribution is made under the immediately preceding bullet point above). | ||
• | 23,312 shares of our restricted, unregistered common stock within fifteen (15) days after we or our licensee applies for approval to market and sell a Product in a Major Market for the indications for which approval is sought, or Marketing Approval. | ||
• | 11,656 shares of our restricted, unregistered common stock within fifteen (15) days after we or our licensee applies for Marketing Approval in a Major Market (other than the Major Market for which a distribution is made under the immediately preceding bullet point above). | ||
• | 46,625 shares of our restricted, unregistered common stock within fifteen (15) days after we or our licensee obtains the first Marketing Approval for a Product from the applicable regulatory agency in a Major Market. | ||
• | 23,312 shares of our restricted, unregistered common stock within fifteen (15) days after we or our licensee obtains Marketing Approval for a Product from the applicable regulatory agency in a Major Market (other than the Major Market for which a distribution is made under the immediately preceding bullet point above). |
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• | Restricted, unregistered common stock, stock options to purchase our common stock, and warrants to purchase our common stock in an amount equal to, in the aggregate, 116,562 shares of our common stock upon the receipt by it at any time prior to the fifth-year anniversary of the Merger Agreement of approval to market and sell a product for the treatment of cystinosis predominantly based upon and derived from the assets acquired from Encode, or Cystinosis Product, from the applicable regulatory agency (e.g., FDA and European Agency for the Evaluation of European Medical Products or EMEA) in a given major market in the world. | ||
• | Restricted, unregistered common stock, stock options to purchase our common stock, and warrants to purchase our common stock in an amount equal to 442,934 shares of our common stock upon the receipt by us at any time prior to the fifth anniversary of the Merger Agreement of approval to market and sell a product, other than a Cystinosis Product, predominantly based upon and derived from the assets acquired from Encode, from the applicable regulatory agency (e.g., FDA and EMEA) in a given major market in the world. |
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/s/ Burr, Pilger & Mayer LLP | ||
San Francisco, California |
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(A Development Stage Company)
August 31, 2009 | August 31, 2008 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 3,701,787 | $ | 7,546,912 | ||||
Prepaid expenses and other | 107,054 | 115,594 | ||||||
Total current assets | 3,808,841 | 7,662,506 | ||||||
Intangible assets, net | 2,524,792 | 2,663,291 | ||||||
Fixed assets, net | 144,735 | 194,766 | ||||||
Deposits | 100,206 | 100,207 | ||||||
Total assets | $ | 6,578,574 | $ | 10,620,770 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Liabilities | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 613,577 | $ | 565,593 | ||||
Accrued liabilities | 451,243 | 432,434 | ||||||
Deferred rent | — | 2,951 | ||||||
Capital lease liability — current | 4,117 | 2,302 | ||||||
Total current liabilities | 1,068,937 | 1,003,280 | ||||||
Capital lease liability — long-term | 6,676 | — | ||||||
Total liabilities | 1,075,613 | 1,003,280 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity: | ||||||||
Preferred stock, $0.001 par value, 15,000,000 shares authorized, zero shares issued and outstanding | — | — | ||||||
Common stock, $0.001 par value, 150,000,000 shares authorized 17,857,555 and 14,064,345 shares issued and outstanding as at August 31, 2009 and 2008, respectively | 17,858 | 14,064 | ||||||
Additional paid-in capital | 27,364,286 | 22,258,715 | ||||||
Deficit accumulated during development stage | (21,879,183 | ) | (12,655,289 | ) | ||||
Total stockholders’ equity | 5,502,961 | 9,617,490 | ||||||
Total liabilities and stockholders’ equity | $ | 6,578,574 | $ | 10,620,770 | ||||
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For the cumulative | ||||||||||||
period | ||||||||||||
from September 8, 2005 | ||||||||||||
For the year ended August 31, | (inception) to | |||||||||||
2009 | 2008 | August 31, 2009 | ||||||||||
Revenues: | $ | — | $ | — | $ | — | ||||||
Operating expenses: | ||||||||||||
General and administrative | 2,687,993 | 2,229,140 | 6,956,240 | |||||||||
Research and development | 6,570,119 | 5,558,871 | 14,874,284 | |||||||||
In-process research and development | — | 240,625 | 240,625 | |||||||||
Total operating expenses | 9,258,112 | 8,028,636 | 22,071,149 | |||||||||
Loss from operations | (9,258,112 | ) | (8,028,636 | ) | (22,071,149 | ) | ||||||
Interest income | 36,744 | 77,871 | 301,903 | |||||||||
Interest expense | (2,526 | ) | (103,198 | ) | (109,937 | ) | ||||||
Net loss | $ | (9,223,894 | ) | $ | (8,053,963 | ) | $ | (21,879,183 | ) | |||
Net loss per share: | ||||||||||||
Basic and diluted | $ | (0.64 | ) | $ | (0.81 | ) | ||||||
Weighted average shares outstanding used to compute: | ||||||||||||
Basic and diluted | 14,440,254 | 9,893,612 | ||||||||||
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�� | ||||||||||||||||||||||||
Deficit | ||||||||||||||||||||||||
accumulated | ||||||||||||||||||||||||
Additional | Receivable | during the | ||||||||||||||||||||||
Common stock | paid-in | from | development | |||||||||||||||||||||
Shares | Amount | Capital | stockholders | stage | Total | |||||||||||||||||||
Balance at September 8, 2005, issuance of common stock to founders at $0.004 per share, net of retirement of common stock upon reverse merger | 1,398,740 | $ | 1,399 | $ | 8,601 | $ | (10,000 | ) | $ | — | $ | — | ||||||||||||
Common stock issued in May 2006 at $0.43 per share pursuant to a stock purchase agreement dated February 2006 | 233,123 | 233 | 99,767 | (100,000 | ) | — | — | |||||||||||||||||
Common stock issued in May 2006 at $0.86 per share pursuant to a stock purchase agreement dated February 2006 | 233,123 | 233 | 199,767 | — | — | 200,000 | ||||||||||||||||||
Common stock issued on May 25, 2006 at $2.57 per share, net of fundraising costs of $217,534 | 1,942,695 | 1,943 | 4,780,523 | — | — | 4,782,466 | ||||||||||||||||||
Common stock and warrants issued for a placement fee in connection with May 25, 2006 financing | 186,499 | 186 | (186 | ) | — | — | — | |||||||||||||||||
Common stock issued in connection with reverse merger in May 2006 | 2,914,042 | 2,914 | (2,914 | ) | — | — | — | |||||||||||||||||
Warrant subscribed pursuant to a consulting agreement dated September 2005 | — | — | 60 | — | — | 60 | ||||||||||||||||||
Consultant stock-based compensation expense | — | — | 23,500 | — | — | 23,500 | ||||||||||||||||||
Repayment of receivable from stockholders | — | — | — | 110,000 | — | 110,000 | ||||||||||||||||||
Net loss | — | — | — | — | (969,250 | ) | (969,250 | ) | ||||||||||||||||
Balance at August 31, 2006 | 6,908,222 | $ | 6,908 | $ | 5,109,118 | $ | — | $ | (969,250 | ) | $ | 4,146,776 | ||||||||||||
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Consolidated Statements of Stockholders’ Equity
Deficit accumulated | ||||||||||||||||||||
Additional | during the | |||||||||||||||||||
Common stock | paid-in | development | ||||||||||||||||||
Shares | Amount | Capital | stage | Total | ||||||||||||||||
Balance at September 1, 2006 | 6,908,222 | $ | 6,908 | $ | 5,109,118 | $ | (969,250 | ) | $ | 4,146,776 | ||||||||||
Exercise of common stock warrants | 765,422 | 766 | 1,969,234 | — | 1,970,000 | |||||||||||||||
Exercise of common stock options | 3,380 | 3 | 8,697 | 8,700 | ||||||||||||||||
Consultant stock-based compensation expense | — | — | 95,731 | — | 95,731 | |||||||||||||||
Employee stock-based compensation expense | — | — | 368,978 | — | 368,978 | |||||||||||||||
Net loss | — | — | — | (3,632,076 | ) | (3,632,076 | ) | |||||||||||||
Balance at August 31, 2007 | 7,677,024 | $ | 7,677 | $ | 7,551,758 | $ | (4,601,326 | ) | $ | 2,958,109 | ||||||||||
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Consolidated Statements of Stockholders’ Equity
Deficit accumulated | ||||||||||||||||||||
Additional | during the | |||||||||||||||||||
Common stock | paid-in | development | ||||||||||||||||||
Shares | Amount | capital | stage | Total | ||||||||||||||||
Balance at September 1, 2007 | 7,677,024 | $ | 7,677 | $ | 7,551,758 | $ | (4,601,326 | ) | $ | 2,958,109 | ||||||||||
Exercise of common stock warrants | 747,938 | 748 | 1,924,252 | — | 1,925,000 | |||||||||||||||
Consultant stock-based compensation expense | 2,040 | 2 | 240,227 | — | 240,229 | |||||||||||||||
Employee stock-based compensation expense | 23,312 | 23 | 491,532 | — | 491,555 | |||||||||||||||
Issuance of common stock for loan placement fee | 46,625 | 47 | 101,953 | — | 102,000 | |||||||||||||||
Issuance of common stock for the purchase of Convivia, Inc. assets | 101,992 | 102 | 240,523 | — | 240,625 | |||||||||||||||
Issuance of common stock for the merger with Encode Pharmaceuticals, Inc. | 802,946 | 803 | 2,657,197 | — | 2,658,000 | |||||||||||||||
Issuance of common stock and warrants for the sale of units in a private placement at $2.14 per unit, including placement agent warrants, net of fundraising costs of $944,065 | 4,662,468 | 4,662 | 9,051,273 | — | 9,055,935 | |||||||||||||||
Net loss | — | — | — | (8,053,963 | ) | (8,053,963 | ) | |||||||||||||
Balance at August 31, 2008 | 14,064,345 | $ | 14,064 | $ | 22,258,715 | $ | (12,655,289 | ) | $ | 9,617,490 | ||||||||||
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Consolidated Statements of Stockholders’ Equity
Deficit accumulated | ||||||||||||||||||||
Additional | during the | |||||||||||||||||||
Common stock | paid-in | development | ||||||||||||||||||
Shares | Amount | Capital | stage | Total | ||||||||||||||||
Balance at August 31, 2008 | 14,064,345 | $ | 14,064 | $ | 22,258,715 | $ | (12,655,289 | ) | $ | 9,617,490 | ||||||||||
Exercise of common stock warrants | 2,031,671 | 2,032 | 2,612,468 | — | 2,614,500 | |||||||||||||||
Consultant stock-based compensation expense | — | 48,094 | — | 48,094 | ||||||||||||||||
Employee stock-based compensation expense | 23,312 | 23 | 354,471 | — | 354,494 | |||||||||||||||
Issuance of common stock and warrants for the sale of units in a private placement at $1.37 per unit, including placement agent warrants, net of fundraising costs of $293,724 | 1,738,227 | 1,739 | 2,090,538 | — | 2,092,277 | |||||||||||||||
Net loss | — | — | — | (9,223,894 | ) | (9,223,894 | ) | |||||||||||||
Balance at August 31, 2009 | 17,857,555 | $ | 17,858 | $ | 27,364,286 | $ | (21,879,183 | ) | $ | 5,502,961 | ||||||||||
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For the cumulative period | ||||||||||||
from September 8, | ||||||||||||
For the year ended August 31, | 2005 (inception) to | |||||||||||
2009 | 2008 | August 31, 2009 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net loss | $ | (9,223,894 | ) | $ | (8,053,963 | ) | $ | (21,879,183 | ) | |||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||
Employee stock-based compensation exp. | 354,494 | 491,555 | 1,215,027 | |||||||||
Consultant stock-based compensation exp. | 48,094 | 240,229 | 407,614 | |||||||||
Amortization of intangible assets | 138,499 | 94,834 | 245,208 | |||||||||
Depreciation of fixed assets | 84,693 | 126,888 | 350,940 | |||||||||
In-process research and development | — | 240,625 | 240,625 | |||||||||
Amortization of capitalized finder’s fee | — | 102,000 | 102,000 | |||||||||
Capitalized acquisition costs previously expensed | — | 38,000 | 38,000 | |||||||||
Changes in assets and liabilities: | ||||||||||||
Prepaid expenses | 8,540 | 81,500 | (107,053 | ) | ||||||||
Intangible assets | — | — | (150,000 | ) | ||||||||
Deposits | — | (80,000 | ) | (100,206 | ) | |||||||
Accounts payable | 47,984 | 449,914 | 613,576 | |||||||||
Accrued liabilities | 18,809 | 231,114 | 451,348 | |||||||||
Deferred rent | (2,951 | ) | (8,064 | ) | (105 | ) | ||||||
Net cash used in operating activities | (8,525,732 | ) | (6,045,368 | ) | (18,572,209 | ) | ||||||
Cash flows from investing activities: | ||||||||||||
Purchase of fixed assets | (22,734 | ) | (13,227 | ) | (476,350 | ) | ||||||
Cash flows from financing activities: | ||||||||||||
Proceeds from the sale of common stock | 2,386,000 | 10,000,000 | 17,386,000 | |||||||||
Proceeds from the exercise of common stock warrants | 2,614,500 | 1,925,000 | 6,509,500 | |||||||||
Proceeds from the exercise of common stock options | — | — | 8,700 | |||||||||
Fundraising costs | (293,724 | ) | (944,065 | ) | (1,455,323 | ) | ||||||
Proceeds from the sale of common stock to initial investors | — | — | 310,000 | |||||||||
Proceeds from bridge loan | — | — | 200,000 | |||||||||
Repayment of bridge loan | — | — | (200,000 | ) | ||||||||
Principal payments on capital lease | (3,435 | ) | (2,500 | ) | (8,531 | ) | ||||||
Net cash provided by financing activities | 4,703,341 | 10,978,435 | 22,750,346 | |||||||||
Net increase (decrease) in cash and cash equivalents | (3,845,125 | ) | 4,919,840 | 3,701,787 | ||||||||
Cash and cash equivalents, beginning of period | 7,546,912 | 2,627,072 | — | |||||||||
Cash and cash equivalents, end of period | $ | 3,701,787 | 7,546,912 | $ | 3,701,787 | |||||||
Supplemental disclosure of non-cash financing activities: | ||||||||||||
Acquisition of equipment in exchange for capital lease | $ | 14,006 | $ | — | $ | 21,403 | ||||||
Interest paid | $ | 2,526 | $ | 1,198 | $ | 7.937 | ||||||
Notes receivable issued in exchange for common stock | $ | — | $ | — | $ | 110,000 | ||||||
Common stock issued for a finder’s fee | $ | — | $ | 102,000 | $ | 102,000 | ||||||
Common stock issued in asset purchase | $ | — | $ | 2,898,624 | $ | 2,898,624 | ||||||
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For the year ended August 31, | ||||||||||||||||||||||||
2009 | 2008 | |||||||||||||||||||||||
Preclinical | Clinical | Total | Preclinical | Clinical | Total | |||||||||||||||||||
Net loss | $ | (2,920,598 | ) | $ | (6,303,295 | ) | $ | (9,223,894 | ) | $ | (3,834,895 | ) | $ | (4,219,068 | ) | $ | (8,053,963 | ) | ||||||
Total assets | 683,828 | 5,894,746 | 6,578,574 | 2,646,598 | 7,974,172 | 10,620,770 |
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August 31, | ||||||||
2009 | 2008 | |||||||
Warrants to purchase common stock | 2,057,990 | 3,090,814 | ||||||
Options to purchase common stock | 989,213 | 907,602 | ||||||
Total potentially dilutive securities | 3,047,203 | 3,998,416 | ||||||
(m) | Stock Option Plan |
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Raptor common stock issued (number of shares) | 802,946 | |||
Raptor common stock issuable upon marketing approval by a regulatory agency of DR Cysteamine for Cystinosis (number of shares) | 81,910 | |||
Total shares of common stock used to value the transaction | 884,856 | |||
Average closing price of Raptor’s common stock 2 days before and after the close of the merger | $ | 2.514 | ||
Value of Raptor common stock portion of transaction | $ | 2,224,254 | ||
Value (based on Carpenter model) of warrants issued in connection with transaction, net of legal fees | 395,746 | |||
Intangible asset (IP license) related to the Encode merger, gross | $ | 2,620,000 | ||
Intangible asset related to NeuroTransTM purchase from BioMarin, gross | 150,000 | |||
Total gross intangible assets | 2,770,000 | |||
Less accumulated amortization | (245,208 | ) | ||
Intangible assets, net | $ | 2,524,792 | ||
Amortization period | Amortization expense | |||
September 8, 2005 (inception) to August 31, 2006 – actual | $ | 4,375 | ||
Fiscal year ending August 31, 2007 – actual | 7,500 | |||
Fiscal year ending August 31, 2008 – actual | 94,833 | |||
Fiscal year ending August 31, 2009 – actual | 138,500 | |||
Fiscal year ending August 31, 2010 – estimate | 138,500 | |||
Fiscal year ending August 31, 2011 – estimate | 138,500 | |||
Fiscal year ending August 31, 2012 – estimate | 138,500 | |||
Fiscal year ending August 31, 2013 – estimate | 138,500 | |||
Fiscal year ending August 31, 2014 – estimate | 138,500 |
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Category | August 31, 2009 | August 31, 2008 | Estimated useful lives | |||||||||
Leasehold improvements | $ | 113,422 | $ | 113,422 | Shorter of life of asset or lease term | |||||||
Office furniture | 3,188 | 3,188 | 7 years | |||||||||
Laboratory equipment | 277,303 | 277,303 | 5 years | |||||||||
Computer hardware and software | 80,437 | 59,703 | ||||||||||
3 years | ||||||||||||
Capital lease equipment | 14,006 | 7,397 | Shorter of life of asset or lease term | |||||||||
Total at cost | 488,356 | 461,013 | ||||||||||
Less: accumulated depreciation | (343,621 | ) | (266,247 | ) | ||||||||
Total fixed assets, net | $ | 144,735 | $ | 194,766 | ||||||||
• | Level one — Quoted market prices in active markets for identical assets or liabilities; | |
• | Level two — Inputs other than level one inputs that are either directly or indirectly observable; and | |
• | Level three — Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use. |
Assets | Level 1 | Level 2 | Level 3 | August 31, 2009 | ||||||||||||||||
Fair value of cash equivalents | $ | 3,515,353 | $ | — | $ | — | $ | 3,515,353 | ||||||||||||
Total | $ | 3,515,353 | $ | $ | — | $ | — | $ | 3,513,353 | |||||||||||
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August 31, 2009 | August 31, 2008 | |||||||
Legal fees primarily due to TorreyPines merger (for August 31, 2009) | $ | 195,552 | $ | 51,503 | ||||
TorreyPines joint proxy/prospectus | 109,011 | — | ||||||
Salaries and wages | 57,351 | 44,165 | ||||||
Accrued vacation | 38,109 | 17,728 | ||||||
Consulting — research and development | 21,000 | 7,578 | ||||||
Auditing and tax preparation fees | 19,720 | 66,307 | ||||||
Patent costs | 10,500 | 10,000 | ||||||
Clinical trial costs | — | 114,514 | ||||||
Preclinical studies | — | 48,165 | ||||||
Consulting — administrative | — | 30,000 | ||||||
Lab reagents | — | 27,024 | ||||||
Prepaid conference expense | — | 5,490 | ||||||
Other | — | 9,960 | ||||||
Total accrued liabilities | $ | 451,243 | $ | 432,434 | ||||
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Expected | ||||||||||||||||
Risk-free | life of stock | Annual | Annual | |||||||||||||
Period* | interest rate | option | volatility | turnover rate | ||||||||||||
September 8, 2005 (inception) to August 31, 2006** | 5 | % | 10 years | 100 | % | 0 | % | |||||||||
Quarter ended November 30, 2006 | 5 | % | 8 years | 100 | % | 10 | % | |||||||||
Quarter ended February 28, 2007 | 5 | % | 8 years | 100 | % | 10 | % | |||||||||
Quarter ended May 31, 2007 | 5 | % | 8 years | 100 | % | 10 | % | |||||||||
Quarter ended August 31, 2007 | 4 | % | 8 years | 100 | % | 10 | % | |||||||||
Quarter ended November 30, 2007 | 3.75 | % | 8 years | 109 | % | 10 | % | |||||||||
Quarter ended February 29, 2008 | 2 | % | 8 years | 119 | % | 10 | % | |||||||||
Quarter ended May 31, 2008 | 2 | % | 8 years | 121 | % | 10 | % | |||||||||
Quarter ended August 31, 2008 | 2.5 | % | 8 years | 128 | % | 10 | % | |||||||||
Quarter ended November 30, 2008 | 1.5 | % | 7 years | 170 | % | 10 | % | |||||||||
Quarter ended February 28, 2009 | 2.0 | % | 7 years | 220 | % | 10 | % | |||||||||
Quarter ended May 31, 2009 | 2.6 | % | 7 years | 233 | % | 10 | % | |||||||||
Quarter ended August 31, 2009 | 3.2 | % | 7 years | 240 | % | 10 | % |
* | Dividend rate is 0% for all period presented. | |
** | Stock-based compensation expense was recorded on the consolidated statements of operations commencing on the effective date of SFAS 123R, September 1, 2006. Prior to September 1, 2006, stock based compensation was reflected only in the footnotes to the consolidated statements of operations, with no effect on the consolidated statements of operations, per the guidelines of APB No. 25. Consultant stock-based compensation expense has been recorded on the consolidated statements of operations since inception. |
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Weighted average | ||||||||||||||||
Weighted average | fair value of options | |||||||||||||||
Option shares | exercise price | Exercisable | granted | |||||||||||||
Outstanding at September 8, 2005 | — | — | — | — | ||||||||||||
Granted | 580,108 | $ | 2.64 | — | $ | 2.47 | ||||||||||
Exercised | — | — | — | — | ||||||||||||
Canceled | — | — | — | — | ||||||||||||
Outstanding at August 31, 2006 | 580,108 | $ | 2.64 | 4,010 | $ | 2.47 | ||||||||||
Granted | 107,452 | $ | 2.56 | — | $ | 2.31 | ||||||||||
Exercised | (3,381 | ) | $ | 2.57 | — | $ | 2.40 | |||||||||
Canceled | — | — | — | |||||||||||||
Outstanding at August 31, 2007 | 684,179 | $ | 2.63 | 273,236 | $ | 2.45 | ||||||||||
Granted | 223,439 | $ | 2.27 | — | $ | 2.21 | ||||||||||
Exercised | — | — | — | — | ||||||||||||
Canceled | — | — | — | — | ||||||||||||
Outstanding at August 31, 2008 | 907,618 | $ | 2.54 | 600,837 | $ | 2.39 | ||||||||||
Granted | 81,595 | $ | 1.13 | — | $ | 1.04 | ||||||||||
Exercised | — | — | — | — | ||||||||||||
Canceled | — | — | — | — | ||||||||||||
Outstanding at August 31, 2009 | 989,213 | $ | 2.42 | 826,303 | $ | 2.28 | ||||||||||
Options outstanding | Options exercisable | |||||||||||||||||||
Weighted | ||||||||||||||||||||
average | ||||||||||||||||||||
Number of | remaining | Weight | Number of | Weighted | ||||||||||||||||
Range of | options | contractual life | average exercise | options | average exercise | |||||||||||||||
exercise prices | outstanding (#) | (yrs.) | price ($) | exercisable (#) | price ($) | |||||||||||||||
$0 to $1.50 | 81,595 | 9.46 | 1.13 | 21,855 | 1.43 | |||||||||||||||
$1.51 to $2.00 | 32,058 | 8.95 | 1.88 | 8,012 | 1.88 | |||||||||||||||
$2.01 to $2.50 | 199,424 | 8.31 | 2.34 | 155,711 | 2.37 | |||||||||||||||
$2.51 to $3.00 | 676,136 | 6.87 | 2.63 | 640,725 | 2.63 | |||||||||||||||
989,213 | 7.44 | 2.42 | 826,303 | 2.54 | ||||||||||||||||
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August 31, | ||||||||||||||||
2009 | 2008 | |||||||||||||||
Federal tax (Benefit) at statutory rate | $ | (3,132,608 | ) | -34.00 | % | $ | (2,738,000 | ) | -34.00 | % | ||||||
State tax (benefit) at statutory rate, net of federal tax benefit | (629,304 | ) | -6.83 | % | (470,000 | ) | -5.83 | % | ||||||||
Change in valuation allowance | 5,069,715 | 55.02 | % | 3,208,000 | 39.83 | % | ||||||||||
Research and development credits | (1,325,036 | ) | -14.38 | % | — | 0.00 | % | |||||||||
Other | 17,233 | 0.19 | % | — | 0.00 | % | ||||||||||
Provision for Income Taxes | $ | (0 | ) | (0 | ) | $ | 0 | 0 | ||||||||
August 31, | ||||||||
2009 | 2008 | |||||||
Deferred Tax Assets | ||||||||
Net Operating Loss Carryforwards | $ | 4,722,078 | $ | 3,248,000 | ||||
Capitalized Start-Up Costs | 1,615,625 | 612,000 | ||||||
Stock Option Expense | 207,169 | 114,000 | ||||||
Research Credit | 2,223,767 | 84,000 | ||||||
Capital Loss Carryforwards | 47,600 | 0 | ||||||
Basis Difference for Fixed Assets and Intangibles | 277,941 | — | ||||||
Accruals | 24,823 | — | ||||||
Valuation Allowance | (9,119,003 | ) | (4,058,000 | ) | ||||
Gross Deferred Tax Asset | $ | 0 | $ | 0 | ||||
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Common Stock | ||||||
Transaction | Date | Issued | ||||
Founders’ shares | Sept. 2005 | 1,398,742 | ||||
Seed round | Feb. 2006 | 466,247 | ||||
PIPE concurrent with reverse merger | May 2006 | 1,942,695 | ||||
Shares issued in connection with reverse merger | May 2006 | 3,100,541 | ||||
Warrant exercises | Jan. – Nov. 2007 | 1,513,359 | ||||
Stock option exercises | Mar. 2007 | 3,380 | ||||
Loan finder’s fee | Sept. 2007 | 46,625 | ||||
Convivia asset purchase | Oct. 2007 – Nov. 2008 | 148,616 | ||||
Encode merger DR Cysteamine asset purchase | Dec. 2007 | 802,946 | ||||
Shares issued pursuant to consulting agreement | May 2008 | 2,040 | ||||
PIPE — initial tranche | May 2008 | 1,030,405 | ||||
PIPE — second tranche | May 2008 | 69,937 | ||||
PIPE — third tranche | June 2008 | 3,562,126 | ||||
Warrant exercises from warrant exchange | June/July 2009 | 2,031,670 | ||||
PIPE | August 2009 | 1,738,226 | ||||
Total shares of common stock outstanding | 17,857,555 | |||||
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Number of | ||||||||||||
shares | ||||||||||||
exercisable | Exercise price | Expiration date | ||||||||||
Summary of outstanding warrants: | ||||||||||||
Issued in lieu of deferred legal fees | 13,987 | $ | 2.57 | 2/13/2011 | ||||||||
Issued in connection with Encode merger | 22,725 | $ | 2.40 | 12/13/2015 | ||||||||
Issued in connection with Encode merger | 233,309 | $ | 2.87 | 12/13/2015 | ||||||||
Issued to PIPE investors in May / June 2008 | 299,564 | $ | 3.86 | 5/21/2010 | ||||||||
Issued to placement agents in May / June 2008 | 489,559 | $ | 2.36 | 5/21/2013 | ||||||||
Issued to PIPE investors in August 2009 | 869,113 | $ | 2.57/$3.22 | * | 8/21/2011 | |||||||
Issued to placement agents in August 2009 | 129,733 | $ | 1.50 | 8/21/2014 | ||||||||
Total warrants outstanding | 2,057,990 | $ | 2.67 | ** | ||||||||
* | First year exercisable at $2.57; second year exercisable at $3.22 | |
** | Average exercise price |
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(A Development Stage Company)
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(A Development Stage Company)
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(A Development Stage Company)
Period | Amount | |||
Fiscal year ending August 31, 2010 | $ | 124,226 | ||
September 1, 2010 to March 31, 2011 | 73,698 |
Period | Amount | |||
Fiscal year ending August 31, 2010 | $ | 5,625 | ||
Fiscal year ending August 31, 2011 | 5,625 | |||
September 1, 2011 to December 31, 2011 | 1,875 | |||
Total future capital lease payments | 13,125 | |||
Less interest | (2,333 | ) | ||
Total current and long-term capital lease liability | $ | 10,792 | ||
Period | Amount | |||
September 1, 2009 through August 31, 2010 | $ | 77,484 |
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(A Development Stage Company)
Period | Amount | |||
September 1, 2009 through August 31, 2010 | $ | 487,436 |
Period | Amount | |||
September 1, 2009 through August 31, 2010 | $ | 1,244,783 |
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(A Development Stage Company)
Purchase Consideration (post-merger shares/share price) Closing price of TorreyPines on September 29, 2009 (date of closing of merger) | $ | 4.23 | ||
TorreyPines shares outstanding on September 29, 2009 | 941,121 | |||
Subtotal | $ | 4.00 million | ||
Value of options and warrants assumed | 0.44 million | |||
Liabilities assumed | 0.59 million | |||
Total preliminary purchase consideration | $ | 5.03 million | ||
Asset Allocation | Value (millions) | % | ||||||
Cash and equivalents | $ | 0.58 | 12 | |||||
Other current assets | 0.07 | 1 | ||||||
Accrued liabilities | (0.06 | ) | -1 | |||||
Working capital | 0.59 | 12 | ||||||
Intangible assets: | ||||||||
In-process research & development | 0.90 | 18 | ||||||
Licenses | 0.24 | 5 | ||||||
Total identifiable assets | 1.73 | 35 | ||||||
Plus Goodwill | 3.30 | 65 | ||||||
Total assets acquired | $ | 5.03 | 100 | |||||
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(A Development Stage Company)
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Filed | ||||||||||||||||||
Exhibit | Here | Incorporated by Reference | ||||||||||||||||
No. | Exhibit Description | with | Form | File No. | Exhibit | Filing Date | Filed By | |||||||||||
2.1 | Share Purchase Agreement dated May 2, 2006 by and between the Highland Clan Creations Corp. and Universal Financial Consulting Inc. | 8-K | 000-50720 | 10.1 | 5/4/06 | Registrant | ||||||||||||
2.2 | Share Purchase Agreement dated as of March 9, 2006 by and among Highland Clan Creations Corp., Christopher Starr, Erich Sager, Todd Zankel and Falcon Corporate Investments Ltd. | 8-K | 000-50720 | 10.1 | 3/14/06 | Registrant | ||||||||||||
2.3 | Agreement and Plan of Merger between Highland Clan Creations Corp. and Raptor Pharmaceuticals Corp. Effective May 15, 2006 | Schedule 14C | 000-50720 | Schedule A | 5/17/06 | Registrant | ||||||||||||
2.4 | Agreement and Plan of Merger and Reorganization, dated July 27, 2009, by and among the Registrant, TorreyPines Therapeutics, Inc. and ECP Acquisition, Inc., a Delaware corporation | 8-K | 000-50720 | 2.1 | 7/28/09 | Registrant | ||||||||||||
3.1 | Certificate of Incorporation of the Registrant | Schedule 14C | 000-50720 | Schedule B | 5/17/06 | Registrant | ||||||||||||
3.2 | Bylaws of the Registrant | Schedule 14C | 000-50720 | Schedule C | 5/17/06 | Registrant | ||||||||||||
3.3 | Certificate of Designation of Series A Junior Participating Preferred Stock of the Registrant | 8-A | 000-50720 | 3.1 | 12/9/08 | Registrant | ||||||||||||
4.2 | Rights Agreement, between the Registrant and Nevada Agency and Trust Company, dated May 13, 2005 | 8-A | 000-50720 | 4.1 | 12/9/08 | Registrant | ||||||||||||
4.3 | Form of Rights Certificate of the Registrant (included in Exhibit 4.2) | Registrant | ||||||||||||||||
4.4 | Amendment to Rights Agreement of the Registrant | 8-K | 000-50720 | 4.1 | 7/28/09 | Registrant | ||||||||||||
4.5 | Warrant to purchase common stock dated December 14, 2007 issued to Flower Ventures, LLC | 10QSB/A | 000-50720 | 4.1 | 4/15/08 | Registrant | ||||||||||||
4.6 | Warrant to purchase common stock dated December 14, 2007 issued to ICON Partners, LP | 10QSB/A | 000-50720 | 4.2 | 4/15/08 | Registrant | ||||||||||||
4.7 | Securities Purchase Agreement, dated as of May 21, 2008, by and among the Registrant and the investors listed on the signature pages thereto | 10-QSB | 000-50720 | 10.1 | 7/9/08 | Registrant | ||||||||||||
4.8 | Amendment to Securities Purchase Agreement, dated May 21, 2008, by and among the Registrant and the investors listed on the signature pages thereto | 10-QSB | 000-50720 | 10.2 | 7/9/08 | Registrant |
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Filed | ||||||||||||||||||
Exhibit | Here | Incorporated by Reference | ||||||||||||||||
No. | Exhibit Description | with | Form | File No. | Exhibit | Filing Date | Filed By | |||||||||||
4.9 | Form of 2008 Warrant to Purchase Shares of Common Stock of the Registrant | 8-K | 000-50720 | 4.1 | 5/22/08 | Registrant | ||||||||||||
4.10 | Form of 2008 Placement Agent Warrant to Purchase Shares of Common Stock of the Registrant | 8-K/A | 000-50720 | 4.2 | 5/28/08 | Registrant | ||||||||||||
4.11 | Form of Warrant Exchange Agreement, dated July 17, 2009 | X | ||||||||||||||||
4.12 | Securities Purchase Agreement, dated August 21, 2009, by and among the Registrant and the investors listed on the signature pages thereto | X | ||||||||||||||||
4.13 | Form of 2009 Warrant to Purchase Shares of Common Stock of the Registrant | 8-K | 000-50720 | 4.1 | 8/25/09 | Registrant | ||||||||||||
4.14 | Form of 2009 Placement Agent Warrant to Purchase Shares of Common Stock of the Registrant | 8-K | 000-50720 | 4.2 | 8/25/09 | Registrant | ||||||||||||
10.1 | Employment Agreement between the Registrant and Dr. Christopher Starr dated May 1, 2006 | 8-K | 000-50720 | 10.5 | 5/26/06 | Registrant | ||||||||||||
10.2 | First Amendment to the Employment Agreement between the Registrant and Dr. Christopher Starr effective January 1, 2009 | 8-K | 000-50720 | 10.1 | 1/5/09 | Registrant | ||||||||||||
10.3 | Employment Agreement between the Registrant and Dr. Todd Zankel dated May 15, 2006 | 8-K | 000-50720 | 10.6 | 5/26/06 | Registrant | ||||||||||||
10.4 | First Amendment to the Employment Agreement between the Registrant and Dr. Todd Zankel effective January 1, 2009 | 8-K | 000-50720 | 10.3 | 1/5/09 | Registrant | ||||||||||||
10.5 | Employment Agreement between the Registrant and Ms. Kim Tsuchimoto dated May 1, 2006 | 8-K | 000-50720 | 10.7 | 5/26/06 | Registrant | ||||||||||||
10.6 | First Amendment to the Employment Agreement between the Registrant and Ms. Kim Tsuchimoto effective January 1, 2009 | 8-K | 000-50720 | 10.7 | 1/5/09 | Registrant |
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Filed | ||||||||||||||||||
Exhibit | Here | Incorporated by Reference | ||||||||||||||||
No. | Exhibit Description | with | Form | File No. | Exhibit | Filing Date | Filed By | |||||||||||
10.7 | Employment Agreement between Raptor Therapeutics and Thomas E. Daley dated September 7, 2007 | 10QSB | 000-50720 | 10.1 | 1/14/08 | Registrant | ||||||||||||
10.8 | First Amendment to the Employment Agreement between Raptor Therapeutics and Thomas E. Daley effective January 1, 2009 | 8-K | 000-50720 | 10.4 | 1/5/09 | Registrant | ||||||||||||
10.9 | Offer Letter from Raptor Therapeutics dated as of April 8, 2009 for Patrice Rioux, M.D., Ph.D | 8-K | 000-50720 | 10.1 | 4/14/09 | Registrant | ||||||||||||
10.10 | 2006 Equity Incentive Plan, as amended | S-8 | 333-140944 | 4.3 | 2/28/07 | Registrant | ||||||||||||
10.11 | 2008 Plan Amendment to 2006 Equity Incentive Plan | 10-K/A | 000-50720 | 10.5 | 12/23/08 | Registrant | ||||||||||||
10.12 | Asset Purchase Agreement between Raptor Therapeutics, Registrant and Convivia, Inc. dated October 17, 2007 | 10QSB | 000-50720 | 10.3 | 1/14/08 | Registrant | ||||||||||||
10.13 | Merger agreement between Raptor Therapeutics and Encode Pharmaceuticals, Inc. dated December 14, 2007* | 10QSB/A | 000-50720 | 10.1 | 4/15/08 | Registrant | ||||||||||||
10.14 | Pharmaceutical development services agreement between Raptor Therapeutics and Patheon Pharmaceuticals Inc. dated January 7, 2008* | 10QSB/A | 000-50720 | 10.2 | 4/15/08 | Registrant | ||||||||||||
10.15 | License agreement between Encode Pharmaceuticals, Inc. (acquired by Raptor Therapeutics) and Regents of the University of California dated October 31, 2007* | 10QSB/A | 000-50720 | 10.3 | 4/15/08 | Registrant | ||||||||||||
10.16 | Amendment number one to license agreement between Encode Pharmaceuticals, Inc. (acquired by Raptor Therapeutics) and the Regents of the University of California dated February 29, 2008* | 10QSB/A | 000-50720 | 10.4 | 4/15/08 | Registrant | ||||||||||||
10.17 | Securities Purchase Agreement, dated as of May 21, 2008, by and among the Registrant and the investors listed on the signature pages thereto (included in Exhibit 4.7) | Registrant |
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Filed | ||||||||||||||||||
Exhibit | Here | Incorporated by Reference | ||||||||||||||||
No. | Exhibit Description | with | Form | File No. | Exhibit | Filing Date | Filed By | |||||||||||
10.18 | Amendment to Securities Purchase Agreement, dated as of May 21, 2008, by and among the Registrant and the investors listed on the signature pages thereto (included in Exhibit 4.8) | |||||||||||||||||
10.19 | Collaboration and License Agreement, dated as of June 3, 2009, by and between F. Hoffmann-La Roche Ltd., Hoffmann-La Roche Inc. and Raptor Discoveries Inc.* | X | ||||||||||||||||
10.20 | Supply Agreement, dated July 20, 2009, by and between Raptor Therapeutics and Mylan Pharmaceuticals Inc.* | X | ||||||||||||||||
10.21 | Securities Purchase Agreement, dated August 21, 2009, by and among the Registrant and the investors listed on the signature pages thereto (included in Exhibit 4.12) | |||||||||||||||||
21.1 | Subsidiaries of Registrant | X | ||||||||||||||||
23.1 | Consent of Independent Registered Public Accounting Firm Burr, Pilger, Mayer, LLP | X | ||||||||||||||||
24.1 | Power of Attorney (included in the signature page hereto) | X | ||||||||||||||||
31.1 | Certification of Christopher M. Starr, Ph.D., Chief Executive Officer and Director | X | ||||||||||||||||
31.2 | Certification of Kim R. Tsuchimoto, Chief Financial Officer, Secretary and Treasurer | X | ||||||||||||||||
32.1 | Certification of Christopher M. Starr, Ph.D., Chief Executive Officer and Director, and of Kim R. Tsuchimoto, Chief Financial Officer, Secretary and Treasurer | X |
X | Filed herewith | |
* | Certain portions of this agreement have been redacted and submitted to the Securities and Exchange Commission under a confidential treatment request pursuant to Rule 24b-2. |
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RAPTOR PHARMACEUTICALS CORP. Dated: October 28, 2009 | ||||
By: | /s/ Kim R. Tsuchimoto | |||
Kim R. Tsuchimoto | ||||
Chief Financial Officer, Secretary and Treasurer (Principal Financial Officer and Principal Accounting Officer) |
Signatures | Title | Date | ||
/s/ Christopher M. Starr | Chief Executive Officer and Director (Principal Executive Officer) | October 28, 2009 | ||
/s/ Kim R. Tsuchimoto | Chief Financial Officer, Secretary and Treasurer | October 28, 2009 | ||
(Principal Financial Officer and Principal Accounting Officer) | ||||
/s/ Erich Sager | Director | October 28, 2009 | ||
/s/ Raymond William Anderson | Director | October 28, 2009 | ||
/s/ Richard L. Franklin | Director | October 28, 2009 | ||
/s/ Llew Keltner | Director | October 28, 2009 | ||
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The following exhibits are filed as part of, or incorporated by reference into this Report: |
Filed | ||||||||||||||||||
Exhibit | Here | Incorporated by Reference | ||||||||||||||||
No. | Exhibit Description | with | Form | File No. | Exhibit | Filing Date | Filed By | |||||||||||
2.1 | Share Purchase Agreement dated May 2, 2006 by and between the Highland Clan Creations Corp. and Universal Financial Consulting Inc. | 8-K | 000-50720 | 10.1 | 5/4/06 | Registrant | ||||||||||||
2.2 | Share Purchase Agreement dated as of March 9, 2006 by and among Highland Clan Creations Corp., Christopher Starr, Erich Sager, Todd Zankel and Falcon Corporate Investments Ltd. | 8-K | 000-50720 | 10.1 | 3/14/06 | Registrant | ||||||||||||
2.3 | Agreement and Plan of Merger between Highland Clan Creations Corp. and Raptor Pharmaceuticals Corp. Effective May 15, 2006 | Schedule 14C | 000-50720 | Schedule A | 5/17/06 | Registrant | ||||||||||||
2.4 | Agreement and Plan of Merger and Reorganization, dated July 27, 2009, by and among the Registrant, TorreyPines Therapeutics, Inc. and ECP Acquisition, Inc., a Delaware corporation | 8-K | 000-50720 | 2.1 | 7/28/09 | Registrant | ||||||||||||
3.1 | Certificate of Incorporation of the Registrant | Schedule 14C | 000-50720 | Schedule B | 5/17/06 | Registrant | ||||||||||||
3.2 | Bylaws of the Registrant | Schedule 14C | 000-50720 | Schedule C | 5/17/06 | Registrant | ||||||||||||
3.3 | Certificate of Designation of Series A Junior Participating Preferred Stock of the Registrant | 8-A | 000-50720 | 3.1 | 12/9/08 | Registrant | ||||||||||||
4.2 | Rights Agreement, between the Registrant and Nevada Agency and Trust Company, dated May 13, 2005 | 8-A | 000-50720 | 4.1 | 12/9/08 | Registrant | ||||||||||||
4.3 | Form of Rights Certificate of the Registrant (included in Exhibit 4.2) | Registrant | ||||||||||||||||
4.4 | Amendment to Rights Agreement of the Registrant | 8-K | 000-50720 | 4.1 | 7/28/09 | Registrant | ||||||||||||
4.5 | Warrant to purchase common stock dated December 14, 2007 issued to Flower Ventures, LLC | 10QSB/A | 000-50720 | 4.1 | 4/15/08 | Registrant | ||||||||||||
4.6 | Warrant to purchase common stock dated December 14, 2007 issued to ICON Partners, LP | 10QSB/A | 000-50720 | 4.2 | 4/15/08 | Registrant | ||||||||||||
4.7 | Securities Purchase Agreement, dated as of May 21, 2008, by and among the Registrant and the investors listed on the signature pages thereto | 10-QSB | 000-50720 | 10.1 | 7/9/08 | Registrant | ||||||||||||
4.8 | Amendment to Securities Purchase Agreement, dated May 21, 2008, by and among the Registrant and the investors listed on the signature pages thereto | 10-QSB | 000-50720 | 10.2 | 7/9/08 | Registrant |
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Filed | ||||||||||||||||||
Exhibit | Here | Incorporated by Reference | ||||||||||||||||
No. | Exhibit Description | with | Form | File No. | Exhibit | Filing Date | Filed By | |||||||||||
4.9 | Form of 2008 Warrant to Purchase Shares of Common Stock of the Registrant | 8-K | 000-50720 | 4.1 | 5/22/08 | Registrant | ||||||||||||
4.10 | Form of 2008 Placement Agent Warrant to Purchase Shares of Common Stock of the Registrant | 8-K/A | 000-50720 | 4.2 | 5/28/08 | Registrant | ||||||||||||
4.11 | Form of Warrant Exchange Agreement, dated July 17, 2009 | X | ||||||||||||||||
4.12 | Securities Purchase Agreement, dated August 21, 2009, by and among the Registrant and the investors listed on the signature pages thereto | X | ||||||||||||||||
4.13 | Form of 2009 Warrant to Purchase Shares of Common Stock of the Registrant | 8-K | 000-50720 | 4.1 | 8/25/09 | Registrant | ||||||||||||
4.14 | Form of 2009 Placement Agent Warrant to Purchase Shares of Common Stock of the Registrant | 8-K | 000-50720 | 4.2 | 8/25/09 | Registrant | ||||||||||||
10.1 | Employment Agreement between the Registrant and Dr. Christopher Starr dated May 1, 2006 | 8-K | 000-50720 | 10.5 | 5/26/06 | Registrant | ||||||||||||
10.2 | First Amendment to the Employment Agreement between the Registrant and Dr. Christopher Starr effective January 1, 2009 | 8-K | 000-50720 | 10.1 | 1/5/09 | Registrant | ||||||||||||
10.3 | Employment Agreement between the Registrant and Dr. Todd Zankel dated May 15, 2006 | 8-K | 000-50720 | 10.6 | 5/26/06 | Registrant | ||||||||||||
10.4 | First Amendment to the Employment Agreement between the Registrant and Dr. Todd Zankel effective January 1, 2009 | 8-K | 000-50720 | 10.3 | 1/5/09 | Registrant | ||||||||||||
10.5 | Employment Agreement between the Registrant and Ms. Kim Tsuchimoto dated May 1, 2006 | 8-K | 000-50720 | 10.7 | 5/26/06 | Registrant | ||||||||||||
10.6 | First Amendment to the Employment Agreement between the Registrant and Ms. Kim Tsuchimoto effective January 1, 2009 | 8-K | 000-50720 | 10.7 | 1/5/09 | Registrant |
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Filed | ||||||||||||||||||
Exhibit | Here | Incorporated by Reference | ||||||||||||||||
No. | Exhibit Description | with | Form | File No. | Exhibit | Filing Date | Filed By | |||||||||||
10.7 | Employment Agreement between Raptor Therapeutics and Thomas E. Daley dated September 7, 2007 | 10QSB | 000-50720 | 10.1 | 1/14/08 | Registrant | ||||||||||||
10.8 | First Amendment to the Employment Agreement between Raptor Therapeutics and Thomas E. Daley effective January 1, 2009 | 8-K | 000-50720 | 10.4 | 1/5/09 | Registrant | ||||||||||||
10.9 | Offer Letter from Raptor Therapeutics dated as of April 8, 2009 for Patrice Rioux, M.D., Ph.D | 8-K | 000-50720 | 10.1 | 4/14/09 | Registrant | ||||||||||||
10.10 | 2006 Equity Incentive Plan, as amended | S-8 | 333-140944 | 4.3 | 2/28/07 | Registrant | ||||||||||||
10.11 | 2008 Plan Amendment to 2006 Equity Incentive Plan | 10-K/A | 000-50720 | 10.5 | 12/23/08 | Registrant | ||||||||||||
10.12 | Asset Purchase Agreement between Raptor Therapeutics, Registrant and Convivia, Inc. dated October 17, 2007 | 10QSB | 000-50720 | 10.3 | 1/14/08 | Registrant | ||||||||||||
10.13 | Merger agreement between Raptor Therapeutics and Encode Pharmaceuticals, Inc. dated December 14, 2007* | 10QSB/A | 000-50720 | 10.1 | 4/15/08 | Registrant | ||||||||||||
10.14 | Pharmaceutical development services agreement between Raptor Therapeutics and Patheon Pharmaceuticals Inc. dated January 7, 2008* | 10QSB/A | 000-50720 | 10.2 | 4/15/08 | Registrant | ||||||||||||
10.15 | License agreement between Encode Pharmaceuticals, Inc. (acquired by Raptor Therapeutics) and Regents of the University of California dated October 31, 2007* | 10QSB/A | 000-50720 | 10.3 | 4/15/08 | Registrant | ||||||||||||
10.16 | Amendment number one to license agreement between Encode Pharmaceuticals, Inc. (acquired by Raptor Therapeutics) and the Regents of the University of California dated February 29, 2008* | 10QSB/A | 000-50720 | 10.4 | 4/15/08 | Registrant | ||||||||||||
10.17 | Securities Purchase Agreement, dated as of May 21, 2008, by and among the Registrant and the investors listed on the signature pages thereto (included in Exhibit 4.7) | Registrant | ||||||||||||||||
10.18 | Amendment to Securities Purchase Agreement, dated as of May 21, 2008, by and among the Registrant and the investors listed on the signature pages thereto (included in Exhibit 4.8) |
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Filed | ||||||||||||||||||
Exhibit | Here | Incorporated by Reference | ||||||||||||||||
No. | Exhibit Description | with | Form | File No. | Exhibit | Filing Date | Filed By | |||||||||||
10.19 | Collaboration and License Agreement, dated as of June 3, 2009, by and between F. Hoffmann-La Roche Ltd., Hoffmann-La Roche Inc. and Raptor Discoveries Inc.* | X | ||||||||||||||||
10.20 | Supply Agreement, dated July 20, 2009, by and between Raptor Therapeutics and Mylan Pharmaceuticals Inc.* | X | ||||||||||||||||
10.21 | Securities Purchase Agreement, dated August 21, 2009, by and among the Registrant and the investors listed on the signature pages thereto (included in Exhibit 4.12) | |||||||||||||||||
21.1 | Subsidiaries of Registrant | X | ||||||||||||||||
23.1 | Consent of Independent Registered Public Accounting Firm Burr, Pilger, Mayer, LLP | X | ||||||||||||||||
24.1 | Power of Attorney (included in the signature page hereto) | X | ||||||||||||||||
31.1 | Certification of Christopher M. Starr, Ph.D., Chief Executive Officer and Director | X | ||||||||||||||||
31.2 | Certification of Kim R. Tsuchimoto, Chief Financial Officer, Secretary and Treasurer | X | ||||||||||||||||
32.1 | Certification of Christopher M. Starr, Ph.D., Chief Executive Officer and Director, and of Kim R. Tsuchimoto, Chief Financial Officer, Secretary and Treasurer | X |
X | Filed herewith | |
* | Certain portions of this agreement have been redacted and submitted to the Securities and Exchange Commission under a confidential treatment request pursuant to Rule 24b-2. |
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