UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended September 30, 2009
OR
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For
the transition period from
to
Commission file number 000-52091
GEOVAX LABS, INC.
(Exact name of Registrant as specified in its charter)
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Delaware
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(State or other jurisdiction
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87-0455038
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of incorporation or organization)
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(I.R.S. Employer Identification No.)
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1900 Lake Park Drive
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Suite 380
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Smyrna, Georgia
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30080
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(Address of principal executive offices)
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(Zip Code)
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Registrants telephone number, including area code: (
678) 384-7220
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes
þ
No
o
Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 45 of Regulation S-T during the preceding 12 months (or for such shorter period
that the registrant was required to submit and post such files). Yes
o
No
o
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer,
or a non-accelerated filer. See the definition of accelerated filer and large accelerated filer
in Rule 12b-2 of the Exchange Act. (Check one):
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Large accelerated filer
o
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Accelerated filer
þ
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Non-accelerated filer
o
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Smaller reporting company
o
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(Do not check if a smaller reporting company)
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act):
Yes
o
No
þ
As of November 6, 2009, 779,888,307 shares of the Registrants common stock, $.001 par value, were
issued and outstanding.
GEOVAX LABS, INC.
AND SUBSIDIARY
Index
Part I FINANCIAL INFORMATION
Item 1
Financial Statements
GEOVAX LABS, INC.
(A DEVELOPMENT-STAGE ENTERPRISE)
CONDENSED CONSOLIDATED BALANCE SHEETS
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September 30,
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December 31,
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2009
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2008
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(Unaudited)
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ASSETS
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Current assets:
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Cash and cash equivalents
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$
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3,416,692
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$
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2,191,180
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Grant funds receivable
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544,238
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311,368
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Prepaid expenses and other
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53,292
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299,286
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Total current assets
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4,014,222
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2,801,834
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Property and equipment, net of accumulated depreciation of $150,587 and
$112,795 at September 30, 2009 and December 31, 2008, respectively
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163,788
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138,847
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Other assets:
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Licenses, net of accumulated amortization of $152,940 and $134,276
at September 30, 2009 and December 31, 2008, respectively
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95,916
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114,580
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Deposits and other
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980
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980
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Total other assets
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96,896
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115,560
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Total assets
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$
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4,274,906
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$
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3,056,241
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LIABILITIES AND STOCKHOLDERS EQUITY
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Current liabilities:
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Accounts payable and accrued expenses
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$
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98,354
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$
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176,260
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Amounts payable to Emory University (a related party)
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250,420
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170,162
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Total current liabilities
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348,774
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346,422
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Commitments
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Stockholders equity:
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Common stock, $.001 par value, 900,000,000 shares authorized
778,487,547 and 747,448,876 shares outstanding at
September 30, 2009 and December 31, 2008, respectively
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778,488
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747,449
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Additional paid-in capital
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19,842,217
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16,215,966
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Deficit accumulated during the development stage
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(16,694,573
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)
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(14,253,596
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)
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Total stockholders equity
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3,926,132
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2,709,819
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Total liabilities and stockholders equity
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$
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4,274,906
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$
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3,056,241
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See accompanying notes to financial statements.
1
GEOVAX LABS, INC.
(A DEVELOPMENT-STAGE ENTERPRISE)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
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Three Months Ended
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Nine Months Ended
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From Inception
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September 30,
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September 30,
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(June 27,2001) to
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2009
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2008
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2009
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2008
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September 30, 2009
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Revenues
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Grant revenue
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$
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1,808,551
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$
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1,322,502
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$
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3,271,506
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$
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2,298,571
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$
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9,829,861
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1,808,551
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1,322,502
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3,271,506
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2,298,571
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9,829,861
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Operating expenses:
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Research and development
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1,470,200
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1,362,490
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3,530,329
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2,725,176
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16,021,992
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General and administrative
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573,906
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698,948
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2,203,776
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2,322,292
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10,801,901
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Total operating expenses
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2,044,106
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2,061,438
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5,734,105
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5,047,468
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26,823,893
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Loss from operations
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(235,555
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)
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(738,936
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)
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(2,462,599
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)
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(2,748,897
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)
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(16,994,032
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)
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Other income (expense)
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Interest income
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4,740
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16,828
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21,622
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59,927
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305,128
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Interest expense
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(5,669
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)
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|
|
|
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|
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|
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|
|
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4,740
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16,828
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|
|
|
21,622
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|
|
|
59,927
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|
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|
299,459
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|
|
|
|
|
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|
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|
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Net loss and comprehensive loss
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$
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(230,815
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)
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$
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(722,108
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)
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$
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(2,440,977
|
)
|
|
$
|
(2,688,970
|
)
|
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$
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(16,694,573
|
)
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Basic and diluted:
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|
|
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Loss per common share
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$
|
(0.00
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)
|
|
$
|
(0.00
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)
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|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.04
|
)
|
Weighted average shares
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|
|
756,722,052
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744,082,804
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752,538,759
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738,098,197
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|
|
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458,538,469
|
|
See accompanying notes to financial statements.
2
GEOVAX LABS, INC.
(A DEVELOPMENT-STAGE ENTERPRISE)
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIENCY)
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|
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Deficit
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|
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|
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Accumulated
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Total
|
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Stock
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during the
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Stockholders
|
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Common Stock
|
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Additional
|
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Subscription
|
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|
Development
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Equity
|
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Shares
|
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Amount
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Paid In Capital
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Receivable
|
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Stage
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(Deficiency)
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Capital contribution at inception (June 27, 2001)
|
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$
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|
|
|
$
|
10
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
10
|
|
Net loss for the year ended December 31, 2001
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
(170,592
|
)
|
|
|
(170,592
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)
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Balance at December 31, 2001
|
|
|
|
|
|
|
|
|
|
|
10
|
|
|
|
|
|
|
|
(170,592
|
)
|
|
|
(170,582
|
)
|
Sale of common stock for cash
|
|
|
139,497,711
|
|
|
|
139,498
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|
|
|
(139,028
|
)
|
|
|
|
|
|
|
|
|
|
|
470
|
|
Issuance of common stock for technology license
|
|
|
35,226,695
|
|
|
|
35,227
|
|
|
|
113,629
|
|
|
|
|
|
|
|
|
|
|
|
148,856
|
|
Net loss for the year ended December 31, 2002
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(618,137
|
)
|
|
|
(618,137
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2002
|
|
|
174,724,406
|
|
|
|
174,725
|
|
|
|
(25,389
|
)
|
|
|
|
|
|
|
(788,729
|
)
|
|
|
(639,393
|
)
|
Sale of common stock for cash
|
|
|
61,463,911
|
|
|
|
61,464
|
|
|
|
2,398,145
|
|
|
|
|
|
|
|
|
|
|
|
2,459,609
|
|
Net loss for the year ended December 31, 2003
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(947,804
|
)
|
|
|
(947,804
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2003
|
|
|
236,188,317
|
|
|
|
236,189
|
|
|
|
2,372,756
|
|
|
|
|
|
|
|
(1,736,533
|
)
|
|
|
872,412
|
|
Sale of common stock for cash and stock
subscription receivable
|
|
|
74,130,250
|
|
|
|
74,130
|
|
|
|
2,915,789
|
|
|
|
(2,750,000
|
)
|
|
|
|
|
|
|
239,919
|
|
Cash payments received on stock subscription
receivable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
750,000
|
|
|
|
|
|
|
|
750,000
|
|
Issuance of common stock for technology license
|
|
|
2,470,998
|
|
|
|
2,471
|
|
|
|
97,529
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
|
Net loss for the year ended December 31, 2004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,351,828
|
)
|
|
|
(2,351,828
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2004
|
|
|
312,789,565
|
|
|
|
312,790
|
|
|
|
5,386,074
|
|
|
|
(2,000,000
|
)
|
|
|
(4,088,361
|
)
|
|
|
(389,497
|
)
|
Cash payments received on stock subscription
receivable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,500,000
|
|
|
|
|
|
|
|
1,500,000
|
|
Net loss for the year ended December 31, 2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,611,086
|
)
|
|
|
(1,611,086
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2005
|
|
|
312,789,565
|
|
|
|
312,790
|
|
|
|
5,386,074
|
|
|
|
(500,000
|
)
|
|
|
(5,699,447
|
)
|
|
|
(500,583
|
)
|
Cash payments received on stock subscription
receivable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
500,000
|
|
|
|
|
|
|
|
500,000
|
|
Conversion of preferred stock to common stock
|
|
|
177,542,538
|
|
|
|
177,543
|
|
|
|
897,573
|
|
|
|
|
|
|
|
|
|
|
|
1,075,116
|
|
Common stock issued in connection with merger
|
|
|
217,994,566
|
|
|
|
217,994
|
|
|
|
1,494,855
|
|
|
|
|
|
|
|
|
|
|
|
1,712,849
|
|
Issuance of common stock for cashless warrant
exercise
|
|
|
2,841,274
|
|
|
|
2,841
|
|
|
|
(2,841
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the year ended December 31, 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(584,166
|
)
|
|
|
(584,166
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2006
|
|
|
711,167,943
|
|
|
|
711,168
|
|
|
|
7,775,661
|
|
|
|
|
|
|
|
(6,283,613
|
)
|
|
|
2,203,216
|
|
Sale of common stock for cash
|
|
|
20,336,433
|
|
|
|
20,336
|
|
|
|
3,142,614
|
|
|
|
|
|
|
|
|
|
|
|
3,162,950
|
|
Issuance of common stock upon stock option exercise
|
|
|
123,550
|
|
|
|
124
|
|
|
|
4,876
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
|
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
1,518,496
|
|
|
|
|
|
|
|
|
|
|
|
1,518,496
|
|
Net loss for the year ended December 31, 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4,241,796
|
)
|
|
|
(4,241,796
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2007
|
|
|
731,627,926
|
|
|
|
731,628
|
|
|
|
12,441,647
|
|
|
|
|
|
|
|
(10,525,409
|
)
|
|
|
2,647,866
|
|
Continued on following page
3
GEOVAX LABS, INC.
(A DEVELOPMENT-STAGE ENTERPRISE)
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIENCY)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deficit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
during the
|
|
|
Stockholders
|
|
|
|
Common Stock
|
|
|
Additional
|
|
|
Subscription
|
|
|
Development
|
|
|
Equity
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Paid In Capital
|
|
|
Receivable
|
|
|
Stage
|
|
|
(Deficiency)
|
|
Balance at December 31, 2007
|
|
|
731,627,926
|
|
|
|
731,628
|
|
|
|
12,441,647
|
|
|
|
|
|
|
|
(10,525,409
|
)
|
|
|
2,647,866
|
|
Sale of common stock for cash in private
placement transactions
|
|
|
8,806,449
|
|
|
|
8,806
|
|
|
|
1,356,194
|
|
|
|
|
|
|
|
|
|
|
|
1,365,000
|
|
Transactions related to common stock purchase
agreement with Fusion Capital
|
|
|
6,514,501
|
|
|
|
6,515
|
|
|
|
399,576
|
|
|
|
|
|
|
|
|
|
|
|
406,091
|
|
Stock-based compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock options
|
|
|
|
|
|
|
|
|
|
|
1,798,169
|
|
|
|
|
|
|
|
|
|
|
|
1,798,169
|
|
Consultant warrants
|
|
|
|
|
|
|
|
|
|
|
146,880
|
|
|
|
|
|
|
|
|
|
|
|
146,880
|
|
Issuance of common stock for consulting services
|
|
|
500,000
|
|
|
|
500
|
|
|
|
73,500
|
|
|
|
|
|
|
|
|
|
|
|
74,000
|
|
Net loss for the year ended December 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,728,187
|
)
|
|
|
(3,728,187
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2008
|
|
|
747,448,876
|
|
|
|
747,449
|
|
|
|
16,215,966
|
|
|
|
|
|
|
|
(14,253,596
|
)
|
|
|
2,709,819
|
|
Transactions related to common stock purchase
agreement with Fusion Capital (unaudited)
|
|
|
7,784,882
|
|
|
|
7,785
|
|
|
|
1,032,215
|
|
|
|
|
|
|
|
|
|
|
|
1,040,000
|
|
Sale of common stock for cash upon exercise of
stock purchase warrant (unaudited)
|
|
|
23,141,289
|
|
|
|
23,141
|
|
|
|
1,476,859
|
|
|
|
|
|
|
|
|
|
|
|
1,500,000
|
|
Stock-based compensation (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock options
|
|
|
|
|
|
|
|
|
|
|
1,087,530
|
|
|
|
|
|
|
|
|
|
|
|
1,087,530
|
|
Consultant warrants
|
|
|
|
|
|
|
|
|
|
|
15,134
|
|
|
|
|
|
|
|
|
|
|
|
15,134
|
|
Issuance of common stock for consulting services
|
|
|
112,500
|
|
|
|
113
|
|
|
|
14,513
|
|
|
|
|
|
|
|
|
|
|
|
14,626
|
|
Net loss for the nine months ended
September 30, 2009 (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,440,977
|
)
|
|
|
(2,440,977
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30, 2009 (unaudited)
|
|
|
778,487,547
|
|
|
$
|
778,488
|
|
|
$
|
19,842,217
|
|
|
$
|
|
|
|
$
|
(16,694,573
|
)
|
|
$
|
3,926,132
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to financial statements.
4
GEOVAX LABS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From Inception
|
|
|
|
Nine Months Ended September 30,
|
|
|
(June 27, 2001) to
|
|
|
|
2009
|
|
|
2008
|
|
|
September 30, 2009
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(2,440,977
|
)
|
|
$
|
(2,688,970
|
)
|
|
$
|
(16,694,573
|
)
|
Adjustments
to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
56,456
|
|
|
|
38,064
|
|
|
|
303,527
|
|
Accretion of preferred stock redemption value
|
|
|
|
|
|
|
|
|
|
|
346,673
|
|
Stock-based compensation expense
|
|
|
1,117,290
|
|
|
|
1,620,295
|
|
|
|
4,654,835
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant funds receivable
|
|
|
(232,870
|
)
|
|
|
(182,587
|
)
|
|
|
(544,238
|
)
|
Prepaid expenses and other current assets
|
|
|
245,994
|
|
|
|
(246,625
|
)
|
|
|
(53,292
|
)
|
Deposits and other assets
|
|
|
|
|
|
|
|
|
|
|
(980
|
)
|
Accounts payable and accrued expenses
|
|
|
2,352
|
|
|
|
(82,722
|
)
|
|
|
348,774
|
|
|
|
|
|
|
|
|
|
|
|
Total adjustments
|
|
|
1,189,222
|
|
|
|
1,146,425
|
|
|
|
5,055,299
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in operating activities
|
|
|
(1,251,755
|
)
|
|
|
(1,542,545
|
)
|
|
|
(11,639,274
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property and equipment
|
|
|
(62,733
|
)
|
|
|
(71,646
|
)
|
|
|
(314,375
|
)
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
(62,733
|
)
|
|
|
(71,646
|
)
|
|
|
(314,375
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net proceeds from sale of common stock
|
|
|
2,540,000
|
|
|
|
2,408,541
|
|
|
|
14,641,898
|
|
Net proceeds from sale of preferred stock
|
|
|
|
|
|
|
|
|
|
|
728,443
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities
|
|
|
2,540,000
|
|
|
|
2,408,541
|
|
|
|
15,370,341
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents
|
|
|
1,225,512
|
|
|
|
794,350
|
|
|
|
3,416,692
|
|
Cash and cash equivalents at beginning of period
|
|
|
2,191,180
|
|
|
|
1,990,356
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
3,416,692
|
|
|
$
|
2,784,706
|
|
|
$
|
3,416,692
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest paid
|
|
$
|
|
|
|
$
|
|
|
|
$
|
5,669
|
|
See accompanying notes to financial statements.
5
GEOVAX LABS, INC.
(A DEVELOPMENT-STAGE ENTERPRISE)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
September 30, 2009
1. Description of Company and Basis of Presentation
GeoVax Labs, Inc. (GeoVax or the Company), is a biotechnology company focused on developing
human vaccines for diseases caused by Human Immunodeficiency Virus (HIV) and other infectious
agents. The Company has exclusively licensed from Emory University (Emory) vaccine technology
which was developed in collaboration with the National Institutes of Health (NIH) and the Centers
for Disease Control and Prevention (CDC). The Company is incorporated under the laws of the
State of Delaware and its principal offices are located in Smyrna, Georgia (metropolitan Atlanta
area).
GeoVax is devoting all of its present efforts to research and development and is a development
stage enterprise as defined by Financial Accounting Standards Board (FASB) Accounting Standard
Codification (ASC) Topic 915,
Development Stage Entities
. The accompanying financial
statements at September 30, 2009 and for the three month and nine month periods ended September 30,
2009 and 2008 are unaudited, but include all adjustments, consisting of normal recurring entries,
which we believe to be necessary for a fair presentation of the dates and periods presented.
Interim results are not necessarily indicative of results for a full year. The financial statements
should be read in conjunction with our audited financial statements included in our Annual Report
on Form 10-K for the year ended December 31, 2008. Our operating results are expected to fluctuate
for the foreseeable future. Therefore, period-to-period comparisons should not be relied upon as
predictive of the results in future periods.
The Company disclosed in Note 2 to its financial statements included in the Form 10-K for the year
ended December 31, 2008 those accounting policies that it considers significant in determining its
results of operations and financial position. There have been no material changes to, or in the
application of, the accounting policies previously identified and described in the Form 10-K.
2. New Accounting Pronouncements
Recently Adopted Accounting Pronouncements
In June 2009, the FASB issued guidance now codified as ASC Topic 105,
Generally Accepted
Accounting Principles
, as the single source of authoritative nongovernmental U.S. generally
accepted accounting principles (GAAP). ASC Topic 105 does not change current U.S. GAAP, but is
intended to simplify user access to all authoritative GAAP by providing all authoritative
literature related to a particular topic in one place (the Codification). The Codification
became the source of authoritative GAAP recognized by the FASB to be applied by nongovernmental
entities. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under
authority of federal securities laws are also sources of authoritative GAAP for SEC registrants.
On the effective date of ASC Topic 105, the Codification superseded all then-existing non-SEC
accounting and reporting standards. All other non-grandfathered non-SEC accounting literature not
included in the Codification became non-authoritative. The provisions of ASC Topic 105 are
effective for interim and annual periods ending after September 15, 2009 and, accordingly, are
effective for the Company for the current fiscal reporting period. The adoption of ASC Topic 105
did not have an impact on our results of operations, financial position, or cash flows, but will
impact our financial reporting process by eliminating all references to pre-codification standards.
All references to accounting literature included in the notes to our financial statements have
been changed to reference the appropriate sections of the Codification.
Following ASC Topic 105, the FASB will not issue new standards in the form of Statements, FASB
Staff Positions, or Emerging Issues Task Force Abstracts. Instead, it will issue Accounting
Standards Updates. The FASB does not consider Accounting Standards Updates as authoritative in
their own right. Accounting Standards Updates serve only to update the Codification, provide
background information about the guidance, and provide the bases for conclusions on changes in the
Codification.
In September 2006, the FASB issued guidance now codified as ASC Topic 820,
Fair Value Measurements
and Disclosures,
which provides enhanced guidance for using fair value to measure assets and
liabilities, provides a common definition of fair value, and establishes a framework to make the
measurement of fair value under GAAP more consistent and comparable. The pronouncement also
requires expanded disclosures to provide information about the extent to which
6
fair value is used to measure assets and liabilities, the methods and assumptions used to measure
fair value, and the effect of fair value measures on earnings. In February 2008, the FASB released
additional guidance also now codified under ASC Topic 820, which delayed the January 1, 2008
effective date for application of certain guidance related to non-financial assets and
non-financial liabilities, except for items that are recognized or disclosed at fair value in the
financial statements on a recurring basis, until January 1, 2009. The implementation of this
pronouncement did not have a material effect on our results of operations, financial position, or
cash flows.
In March 2008, the FASB issued guidance now codified as ASC Topic 815,
Derivatives and Hedging
,
which amends and expands the disclosure requirements previously required for derivative instruments
and hedging activities. We adopted this pronouncement effective January 1, 2009 and it did not
have a material effect on our results of operations, financial position, or cash flows.
In April 2008, the FASB issued guidance now codified as ASC Topic 350,
Intangibles Goodwill and
Other
, which amends the factors that should be considered in developing renewal or extension
assumptions used to determine the useful life of a recognized intangible asset. We adopted the
provisions of this pronouncement effective January 1, 2009, and it did not have a material effect
on our results of operations, financial position, or cash flows.
In June 2008, the FASB issued guidance now codified as ASC Topic 260,
Earnings Per Share
. This
pronouncement addresses whether instruments granted in share-based payment transactions are
participating securities prior to vesting, and therefore, need to be included in the earnings
allocation in calculating earnings per share under the two-class method of computing earnings per
share. This pronouncement requires companies to treat unvested share-based payment awards that
have non-forfeitable rights to dividend or dividend equivalents as a separate class of securities
in calculating earnings per share. We adopted this pronouncement effective January 1, 2009 and it
did not have a material effect on our results of operations, financial position, or cash flows.
In April 2009, the FASB issued guidance now codified as ASC Topic 825,
Financial Instruments,
which amends previous Topic 825 guidance to require disclosures about fair value of financial
instruments in interim as well as annual financial statements. We adopted this pronouncement
effective April 1, 2009 and it did not have a material effect on our results of operations,
financial position, or cash flows.
In May 2009, the FASB issued guidance now codified as ASC Topic 855,
Subsequent Events
, which
establishes general standards of accounting for, and disclosures of, events that occur after the
balance sheet date but before financial statements are issued or are available to be issued. We
adopted this pronouncement effective June 30, 2009 and it did not have a material effect on our
results of operations, financial position, or cash flows. We have performed an evaluation of
subsequent events through November 6, 2009, which is the date these financial statements were
issued.
Recent Accounting Pronouncements Not Yet Adopted
We do not believe that any other recently issued, but not yet effective, accounting standards if
currently adopted would have a material effect on our financial statements.
3. Basic and Diluted Loss Per Common Share
Basic net loss per share is computed using the weighted-average number of common shares outstanding
during the period. Diluted net loss per share is computed using the weighted-average number of
common shares and potentially dilutive common shares outstanding during the period. Potentially
dilutive common shares primarily consist of employee stock options and warrants issued to
investors. Common share equivalents which potentially could dilute basic earnings per share in the
future, and which were excluded from the computation of diluted loss per share, as the effect would
be anti-dilutive, totaled approximately 91.9 million and 111.5 million shares at September 30, 2009
and 2008, respectively.
4. Commitments
Lease Agreements
Since 2001, we have leased the office and laboratory space used for our operations in Atlanta,
Georgia under a lease agreement with Emtech Biotechnology Development, Inc., a related party
associated with Emory University. In September 2009, we executed a lease agreement, effective
November 1, 2009, for approximately 8400 square feet of office and laboratory space located in
Smyrna, Georgia (the Smyrna Facility) and we will vacate the Emtech facility during
7
November 2009. Future minimum lease payments pursuant to the 62 month lease for the Smyrna
Facility total $114,570 in 2010, $118,010 in 2011, $121,560 in 2012, $125,180 in 2013 and $128,920
in 2014.
Other Contractual Obligations
As of September 30, 2009, we had approximately $20,000 of unrecorded outstanding purchase
commitments to our vendors and subcontractors. We expect to receive and pay for these materials and
services within the next three to four months.
5. Stockholders Equity
Common Stock Transactions
We may, from time to time, issue shares of our common stock to consultants or other service
providers in exchange for services. During August 2009, we entered into an agreement whereby we
issued 112,500 shares of our common stock for consulting services and agreed to issue an additional
337,500 shares over the following twelve months. We recorded general and administrative expense of
$14,626 for the three and nine month periods ended September 30, 2009 related to issuance of our
common stock in exchange for services, as compared to $18,084 and $55,917 for the three and nine
month periods ended September 30, 2008, respectively.
Common Stock Purchase Agreement
In May 2008, we signed a common stock purchase agreement (the Purchase Agreement) with Fusion
Capital Fund II, LLC (Fusion Capital). The Purchase Agreement allows us to require Fusion
Capital to purchase up to $10 million of our common stock in amounts ranging from $80,000 to $1.0
million per purchase transaction, depending on certain conditions, from time to time over a
25-month period beginning July 1, 2008, the date on which the SEC declared effective the
registration statement related to the transaction.
The purchase price of the shares relating to the Purchase Agreement is based on the prevailing
market prices of our shares at the times of the sales without any fixed discount, and we control
the timing and amounts of any sales of shares to Fusion Capital. Fusion Capital does not have the
right or the obligation to purchase any shares of our common stock on any business day that the
purchase price of our common stock is below $0.05 per share. As primary consideration for entering
into the Purchase Agreement, and upon the execution of the Purchase Agreement we issued to Fusion
Capital 2,480,510 shares of our common stock as a commitment fee, and we agreed to issue to Fusion
Capital up to an additional 2,480,510 commitment fee shares, on a pro rata basis, as we receive the
$10 million of future funding. The Purchase Agreement may be terminated by us at any time at our
discretion without any additional cost to us. There are no negative covenants, restrictions on
future financings, penalties or liquidated damages in the agreement.
During the nine month period ended September 30, 2009, we sold 7,526,910 shares to Fusion Capital
under the terms of the Purchase Agreement for an aggregate purchase price of $1,040,000, and we
also issued an additional 257,972 shares to Fusion Capital pursuant to the pro rata deferred
commitment fee arrangement mentioned above. As of September 30, 2009, Fusion Capital has purchased
a cumulative total of 12,153,316 shares for $1,700,000 pursuant to the Purchase Agreement, and we
have issued a total of 2,902,197 shares as a commitment fee.
During October and November 2009 (through November 6), we sold an additional 1,341,228 shares to
Fusion Capital for an aggregate purchase price of $240,000, and issued 59,532 shares pursuant to
the deferred commitment fee arrangement.
Stock Options
In 2006 we adopted the GeoVax Labs, Inc. 2006 Equity Incentive Plan (the 2006 Plan) for the
granting of qualified incentive stock options (ISOs), nonqualified stock options, restricted
stock awards or restricted stock bonuses to employees, officers, directors, consultants and
advisors of the Company. The exercise price for any option granted may not be less than fair value
(110% of fair value for ISOs granted to certain employees). Options granted under the 2006 Plan
have a maximum ten-year term and generally vest over four years. The Company has reserved
51,000,000 shares of its common stock for issuance under the 2006 Plan.
We did not grant any stock options pursuant to the 2006 Plan during the nine months ended September
30, 2009. As of September 30, 2009, there were nonqualified stock options covering a total of
45,764,424 shares of our common stock outstanding with a weighted average exercise price of $0.12
and a weighted average remaining contractual term of 5.5
8
years; including options as to 39,001,092 shares currently exercisable, with a weighted average
exercise price of $0.12 and a weighted average remaining contractual term of 4.9 years.
Stock-based compensation expense related to the 2006 Plan was $317,701 and $1,087,530 for the three
month and nine month periods ended September 30, 2009, as compared to $347,606 and $1,146,298 for
the three month and nine month periods ended September 30, 2008, respectively. The table below
shows the allocation of stock-based compensation expense related to our stock option plan between
general and administrative expense and research and development expense. As of September 30, 2009,
there was $656,254 of unrecognized compensation expense related to stock-based compensation
arrangements subject to the 2006 Plan, which is expected to be recognized over a weighted average
period of 1.7 years.
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Three Months Ended September 30,
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Nine Months Ended September 30,
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Expense Allocated to:
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2009
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2008
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2009
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2008
|
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General and Administrative Expense
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$
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232,262
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$
|
293,894
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|
|
$
|
831,215
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|
$
|
1,007,361
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Research and Development Expense
|
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85,439
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|
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53,712
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|
|
|
256,316
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438,937
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Total Stock-Based Compensation Expense
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$
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317,701
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$
|
347,606
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$
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1,087,530
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$
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1,446,298
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Compensatory Warrants
We may, from time to time, issue stock purchase warrants to consultants or other service providers
in exchange for services. As of September 30, 2009, there were a total of 2,970,000 shares of our
common stock covered by outstanding stock warrants all of which are currently exercisable at a
weighted average exercise price of $0.14 per share and a weighted-average remaining contractual
life of 2.9 years. We recorded general and administrative expense of $15,134 for the three and
nine month periods ended September 30, 2009 related to issuance of stock purchase warrants in
exchange for services, as compared to $41,040 and $118,080 for the three and nine month periods
ended September 30, 2008, respectively. As of September 30, 2009, there was $151,325 of
unrecognized compensation expense related to compensatory warrant arrangements, which is expected
to be recognized over a weighted average period of 1.3 years.
Investment Warrants
In addition to outstanding stock options and compensatory warrants, as of September 30, 2009 we had
stock purchase warrants covering a total of 43,181,345 shares of our common stock which were issued
to investors in previous transactions. Such warrants have a weighted-average exercise price of
$0.34 per share and a weighted-average remaining contractual life of 2.8 years. During September
2009, we issued 23,141,289 shares of our common stock and received $1,500,000 upon the exercise of
an outstanding stock purchase warrant.
6. Income Taxes
Because of our historically significant net operating losses, we have not paid income taxes since
inception. We maintain deferred tax assets that reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for income tax purposes. These deferred tax assets are comprised primarily of
net operating loss carryforwards and also include amounts relating to nonqualified stock options
and research and development credits. The net deferred tax asset has been fully offset by a
valuation allowance because of the uncertainty of our future profitability and our ability to
utilize the deferred tax assets. Utilization of operating losses and credits may be subject to
substantial annual limitations due to ownership change provisions of Section 382 of the Internal
Revenue Code. The annual limitation may result in the expiration of net operating losses and
credits before utilization.
7. NIH Grant Funding
In September 2007, the National Institutes of Health (NIH) awarded us an Integrated
Preclinical/Clinical AIDS Vaccine Development (IPCAVD) grant to support our HIV/AIDS vaccine
program. The project period for the grant, which is renewable annually, covers a five year period
which commenced October 2007, with an expected annual award of generally between $3 and $4 million
per year (approximately $18.3 million in the aggregate). The most recent award is for the period
September 1, 2009 through August 31, 2010 in the amount of $4.7 million. We are utilizing this
funding to further our HIV/AIDS vaccine development, optimization and production. We record
revenue associated with the grant as the related costs and expenses are incurred and such revenue
is reported as a separate line item in our statements of operations.
9
8. Related Party Transactions
In June 2008, we entered into two subcontracts with Emory for the purpose of conducting research
and development activities associated with our IPCAVD grant from the NIH (see Note 7). During the
three and nine month periods ended September 30, 2009, we recorded $389,158 and $853,608 of expense
associated with these subcontracts as compared to $393,697 and $572,699 for the comparable periods
of 2008. All amounts paid to Emory under these subcontracts are reimbursable to us pursuant to the
NIH grant.
In March 2008, we entered into a consulting agreement with Donald Hildebrand, the Chairman of our
Board of Directors and our former President and Chief Executive Officer, pursuant to which Mr.
Hildebrand provides business and technical advisory services to the Company. The term of the
consulting agreement began on April 1, 2008 and will end on December 31, 2009. During the three
month and nine month periods ended September 30, 2009, we recorded $14,400 and $43,200,
respectively, of expense associated with the consulting agreement as compared to $24,000 and
$40,000 for the comparable periods of 2008.
Item 2
Managements Discussion and Analysis of Financial Condition And Results of
Operations
FORWARD LOOKING STATEMENTS
In addition to historical information, the information included in this Form 10-Q contains
forward-looking statements. Forward-looking statements involve numerous risks and uncertainties
and should not be relied upon as predictions of future events. Certain such forward-looking
statements can be identified by the use of forward-looking
terminology such as believes,expects,
may, will, should,
seeks, approximately, intends,
plans, pro forma, estimates, or
anticipates or other variations thereof or comparable
terminology, or by discussions of strategy, plans or intentions. Such forward-looking statements
are necessarily dependent on assumptions, data or methods that may be incorrect or imprecise and
may be incapable of being realized. The following factors, among others, could cause actual results
and future events to differ materially from those set forth or contemplated in the forward-looking
statements:
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whether we can raise additional capital as and when we need it;
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whether we are successful in developing our products;
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whether we are able to obtain regulatory approvals in the United States and other countries
for sale of our products;
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whether we can compete successfully with others in our market; and
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whether we are adversely affected in our efforts to raise cash by the volatility and
disruption of local and national economic, credit and capital markets and the economy in
general.
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Readers are cautioned not to place undue reliance on forward-looking statements, which reflect our
managements analysis only. We assume no obligation to update forward-looking statements.
Managements discussion and analysis of our financial condition and results of operations is based
on our consolidated financial statements, which have been prepared in accordance with accounting
principles generally accepted in the United States. The preparation of these financial statements
requires management to make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On
an ongoing basis, management evaluates its estimates and adjusts the estimates as necessary. We
base our estimates on historical experience and on various other assumptions that are believed to
be reasonable under the circumstances, the results of which form the basis for making judgments
about the carrying values of assets and liabilities that are not readily apparent from other
sources. Actual results may differ materially from these estimates under different assumptions or
conditions.
Overview
GeoVax is a clinical-stage biotechnology company focused on developing human vaccines for diseases
caused by Human Immunodeficiency Virus and other infectious agents. We have exclusively licensed
from Emory University certain HIV vaccine technology which was developed in collaboration with the
National Institutes of Health (NIH) and the Centers for Disease Control and Prevention.
10
Our HIV vaccine candidates have successfully completed preclinical efficacy testing in non-human
primates and our preventative HIV vaccine candidate has completed Phase 1 clinical testing trials
in humans. A Phase 2a human clinical trial for our preventative HIV vaccine candidate was
initiated during the fourth quarter of 2008, and patient enrollment commenced in February 2009.
The costs of conducting all of our human clinical trials to date have been borne by the HIV Vaccine
Trials Network (HVTN), funded by the NIH, with GeoVax incurring costs associated with manufacturing
the clinical vaccine supplies and other study support. HVTN is bearing the cost of conducting our
ongoing Phase 2a human clinical study, but we cannot predict the level of support we will receive
from HVTN for any additional clinical studies. Our operations are also partially supported by an
Integrated Preclinical/Clinical AIDS Vaccine Development (IPCAVD) Grant from the NIH. The project
period for the grant covers a five year period which commenced October 2007, with an expected
annual award of generally between $3-4 million per year (approximately $18.3 million in the
aggregate). The grant is subject to annual renewal, with the latest grant award covering the
period from September 2009 through August 2010 in the amount of $4.7 million. We intend to pursue
additional grants from the federal government, however, as we progress to the later stages of our
vaccine development activities, government financial support may be more difficult to obtain, or
may not be available at all. It will, therefore, be necessary for us to look to other sources of
funding in order to finance our development activities.
We anticipate incurring additional losses for several years as we expand our drug development and
clinical programs and proceed into higher cost human clinical trials. Conducting clinical trials
for our vaccine candidates in development is a lengthy, time-consuming and expensive process. We do
not expect to generate product sales from our development efforts for several years. If we are
unable to successfully develop and market pharmaceutical products over the next several years, our
business, financial condition and results of operations will be adversely impacted.
Critical Accounting Policies and Estimates
Our significant accounting policies are summarized in Note 2 to our consolidated financial
statements included in our Form 10-K for the year ended December 31, 2008. We believe the following
critical accounting policies affect our more significant judgments and estimates used in the
preparation of our consolidated financial statements:
Impairment of Long-Lived Assets.
Long-lived assets are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
Recoverability of assets to be held and used is measured by a comparison of the carrying amount of
the assets to the future net cash flows expected to be generated by such assets. If such assets
are considered to be impaired, the impairment to be recognized is measured by the amount by which
the carrying amount of the assets exceeds the discounted expected future net cash flows from the
assets.
Revenue Recognition.
We recognize revenue in accordance with guidance issued by the SEC and now
codified under FASB ASC Topic 605,
Revenue Recognition
. ASC Topic 605 provides guidance in
applying U.S. generally accepted accounting principles to revenue recognition issues, and
specifically addresses revenue recognition for upfront, nonrefundable fees received in connection
with research collaboration agreements. Our revenue consists primarily of government grant
revenue, which is recorded as income as the related costs are incurred.
Stock-Based Compensation.
Effective January 1, 2006, we adopted a pronouncements by the FASB now
codified under ASC Topic 718,
Compensation Stock Compensation
and under ASC Topic 505,
"
Equity
. This pronouncement requires the measurement and recognition of compensation expense for
all share-based payments made to employees and directors based on estimated fair values on the
grant date. We adopted the pronouncement using the prospective application method which requires
us to apply the provisions prospectively to new awards and to awards modified, repurchased or
cancelled after December 31, 2005. Awards granted after December 31, 2005 are valued at fair value
in accordance with the provisions ASC Topic 718 and are recognized on a straight line basis over
the service periods of each award.
Liquidity and Capital Resources
At September 30, 2009, we had cash and cash equivalents of $3,416,692 and total assets of
$4,274,906, as compared to $2,191,180 and $3,056,241, respectively, at December 31, 2008. Working
capital totaled $3,665,448 at September 30, 2009, compared to $2,455,412 at December 31, 2008.
Sources and Uses of Cash
. We are a development-stage company (as defined by ASC Topic 915,
"
Development Stage Entities
) and do not have any products approved for sale. Due to our
significant research and development expenditures, we have not been profitable and have generated
operating losses since our inception in 2001. Our primary sources of cash are from sales of our
equity securities and from government grant funding.
11
Cash Flows from Operating Activities
. Net cash used in operating activities was $1,251,755 for the
nine month period ended September 30, 2009 as compared to $1,542,545 for the comparable period in
2008. Generally, the differences between years are due to fluctuations in our net losses which, in
turn, result primarily from fluctuations in expenditures from our research activities, offset by
net changes in our assets and liabilities.
In September 2007, the NIH awarded us an Integrated Preclinical/Clinical AIDS Vaccine Development
(IPCAVD) grant to support our HIV/AIDS vaccine program. The project period for the grant, which is
renewable annually, covers a five year period which commenced October 2007, with an expected annual
award of generally between $3 and $4 million per year (approximately $18.3 million in the
aggregate). The most recent award is for the period September 1, 2009 through August 31, 2010 in
the amount of $4.7 million. We are utilizing this funding to further our HIV/AIDS vaccine
development, optimization, and production for human clinical trial testing. The funding we receive
pursuant to this grant is recorded as revenue at the time the related expenditures are incurred,
and thus partially offsets our net losses.
Cash Flows from Investing Activities
. Our investing activities have consisted predominantly of
capital expenditures. Capital expenditures for the nine months ended September 30, 2009 and 2008
were $62,733 and $71,646, respectively. In September 2009, we executed a lease agreement
(effective November 1, 2009) for the relocation of our operations a short distance within the
metropolitan Atlanta area. In connection with this move, we expect to incur approximately $115,000
in relocation-related costs (inclusive of facility improvements) and we also expect to incur
between $50,000 and $75,000 of costs associated with the acquisition of equipment to replace that
which was previously made available to us at our previous location.
Cash Flows from Financing Activities
. Net cash provided by financing activities was $2,540,000 and
$2,408,541 for the nine month periods ended September 30, 2009 and 2008, respectively. During the
2009 period we received $1,040,000 from the sale of our common stock to Fusion Capital (see
discussion below) and $1,500,000 from the exercise of a previously outstanding stock purchase
warrant which was to expire in September 2009. During the 2008 period, we received $2,262,450
from the sale of our common stock and warrants to individual accredited investors and $146,091 from
the sale of our common stock to Fusion Capital, offset by costs associated with the financing
arrangement.
In May 2008, we signed a Purchase Agreement with Fusion Capital Fund II, LLC, an Illinois limited
liability company (Fusion Capital) which provides for the sale of up to $10 million of shares of
our common stock. In connection with this agreement, we filed a registration statement related to
the transaction with the SEC covering the shares that have been issued or may be issued to Fusion
Capital under the Purchase Agreement. The SEC declared effective the registration statement on
July 1, 2008, and we now have the right until July 31, 2010 to sell our shares of common stock to
Fusion Capital from time to time in amounts ranging from $80,000 to $1 million per purchase
transaction, depending on certain conditions as set forth in the Purchase Agreement. During the
nine months ended September 30, 2009, we received $1,040,000 from the sale of our common stock to
Fusion Capital pursuant to this arrangement. Through September 30, 2009, we have received a
cumulative total of $1,700,000 from Fusion Capital, leaving $8,300,000 available pursuant to the
Purchase Agreement as of that date. Depending on general stock market conditions, and the
prevailing price of our common stock leading up to the date upon which the Purchase Agreement ends
(July 31, 2010), we may not be able to, or may be choose not to, access the full amount remaining
pursuant to the Purchase Agreement. The extent to which we rely on the Purchase Agreement as a
source of funding will depend on a number of factors including the prevailing market price of our
common stock and the extent to which we can secure working capital from other sources if we choose
to seek such other sources.
We believe that our current working capital, combined with the proceeds from the IPCAVD grant
awarded annually from the NIH, will be sufficient to support our planned level of operations
through 2010. We intend to draw on the Fusion Capital facility to increase our cash reserves to
provide funding for our operations beyond 2010. Even if we are able to access the remainder of the
full $10 million under the Purchase Agreement with Fusion Capital, we may still need additional
capital in the future to fully implement our business, operating and development plans. Should the
financing we require to sustain our working capital needs be unavailable or prohibitively expensive
when we require it, the consequences could be a material adverse effect on our business, operating
results, financial condition and prospects. While we believe that we will be successful in
obtaining the necessary financing to fund our operations through grants, the Purchase Agreement
and/or other sources, there can be no assurances that such additional funding will be available to
us on reasonable terms or at all.
Our capital requirements, particularly as they relate to product research and development, have
been and will continue to be significant. We intend to seek FDA approval of our products, which
may take several years. We will not generate revenues from the sale of our products for at least
several years, if at all. We will be dependent on obtaining financing from third parties in order
to maintain our operations, including our clinical program. Due to the existing uncertainty in the
capital
12
and credit markets, and adverse regional and national economic conditions which may persist or
worsen, capital may not be available on terms acceptable to the Company or at all. If we fail to
obtain additional funding when needed, we would be forced to scale back or terminate our
operations, or to seek to merge with or to be acquired by another company.
We have no off-balance sheet arrangements that are likely or reasonably likely to have a material
effect on our financial condition or results of operations.
Contractual Obligations
Since 2001, we have leased the office and laboratory space used for our operations in Atlanta,
Georgia under a lease agreement with Emtech Biotechnology Development, Inc., a related party
associated with Emory University. In September 2009, we executed a lease agreement, effective
November 1, 2009, for approximately 8400 square feet of office and laboratory space located in
Smyrna, Georgia (the Smyrna Facility) and we will vacate the Emtech facility during November
2009. Future minimum lease payments pursuant to the 62 month lease for the Smyrna Facility total
approximately $608,000. As of September 30, 2009, we had approximately $20,000 of unrecorded
outstanding purchase commitments to our vendors and subcontractors; we expect to receive and pay
for these materials and services within the next three to four months
As of September 30, 2009, we had no other material firm purchase obligations or commitments, no
committed lines of credit, and no other committed funding or long-term debt. We have employment
agreements with our senior management team, each of which may be terminated with 30 days advance
notice. We have no other contractual obligations, with the exception of commitments which are
contingent upon the occurrence of future events.
Results of Operations
Net
Loss
We recorded a net loss of $230,815 for the three months ended September 30, 2009 as compared to
$722,108 for the three months ended September 30, 2008. For the nine months ended September 30,
2009, we recorded a net loss of $2,440,977, as compared to a net loss of $2,688,970 for the nine
months ended September 30, 2008. Our net losses typically fluctuate due to the timing of
activities and related costs associated with our vaccine research and development activities and
our general and administrative costs, as described in more detail below.
Grant
Revenue
During the three and nine month periods ended September 30, 2009 we recorded grant revenue of
$1,808,551 and $3,271,506, respectively, as compared to $1,322,502 and $2,298,571, respectively,
during the comparable periods of 2008. During 2007, we were awarded an Integrated
Preclinical/Clinical AIDS Vaccine Development (IPCAVD) grant by the NIH to support our HIV/AIDS
vaccine program. The project period for the grant, which is renewable annually, covers a five year
period which commenced October 2007, with an expected annual award of generally between $3 to $4
million per year (approximately $18.3 million in the aggregate). We are utilizing this funding to
further our HIV/AIDS vaccine development, optimization and production. The grant is subject to
annual renewal, with the latest grant award covering the period from September 2009 through August
2010 in the amount of $4.7 million. As of September 30, 2009, there is approximately $4.6 million
remaining from the current grant years award and (assuming that the remaining budgeted amounts
under the grant are awarded annually to the Company) there is an additional $7.5 million available
through the grant for the remainder of the original five year project period (ending August 31,
2012).
Research
and Development
During the three month and nine month periods ended September 30, 2009, we incurred $1,470,200 and
$3,530,329, respectively, of research and development expense as compared to $1,362,490 and
$2,725,176, respectively, during the three month and nine month periods ended September 30, 2008.
Research and development expense for the three month and nine month periods of 2009 includes
stock-based compensation expense of $85,439 and $256,316, respectively, while the comparable
periods of 2008 include stock-based compensation expense of $53,712 and $438,937, respectively (see
discussion under
Stock-Based Compensation Expense
below).
Research and development expenses can vary considerably on a period-to-period basis, depending on
our need for vaccine manufacturing and testing of manufactured vaccine by third parties, and due to
fluctuations in the timing of other external expenditures related to our IPCAVD grant from the NIH.
The increase in research and development expense from the 2008 periods to the 2009 periods is due
primarily to costs associated with our vaccine manufacturing activities in preparation for the
commencement of Phase 2 clinical testing, costs associated with our activities funded by our NIH
grant, and higher personnel costs associated with the addition of new scientific personnel. Our
recently initiated Phase 2a clinical trial is being conducted and funded by the HVTN, but we are
responsible for the manufacture of vaccine product to be used in the
13
trial. We cannot predict the level of support we may receive from HVTN or other federal agencies
(or divisions thereof) for our future clinical trials. We expect that our research and development
costs will continue to increase in 2010 and beyond as we progress through the human clinical trial
process leading up to possible product approval by the FDA.
General
and Administrative Expense
During the three month and nine month periods ended September 30, 2009, we incurred general and
administrative costs of $573,906 and $2,203,776, respectively, as compared to $698,948 and
$2,322,292, respectively, during the three month and nine month periods ended September 30, 2008.
General and administrative costs include officers salaries, legal and accounting costs, patent
costs, amortization expense associated with intangible assets, and other general corporate
expenses. General and administrative expense for the three month and nine month periods of 2009
include stock-based compensation expense of $262,021 and $890,974, respectively; while the
comparable periods of 2008 include stock-based compensation expense of $352,118 and $1,181,358,
respectively (see discussion under
Stock-Based Compensation Expense
below). We expect that our
general and administrative costs will increase in the future in support of expanded research and
development activities and other general corporate activities
Stock-Based
Compensation Expense
During the three month and nine month periods ended September 30, 2009, we recorded total
stock-based compensation expense of $347,460 and $1,117,290, respectively, which is included in
research and development expense, or general and administrative expense according to the
classification of cash compensation paid to the employee, consultant or director to which the stock
compensation was granted. Stock-based compensation expense for the three month and nine month
periods ended September 30, 2008 was $405,830 and $1,620,295, respectively. In addition to amounts
related to the issuance of stock options to employees, the figures include amounts related to
common stock and stock purchase warrants issued to consultants. As of September 30, 2009, there
was $807,579 of unrecognized compensation expense related to stock-based compensation arrangements.
Other
Income
Interest income for the three month and nine month periods ended September 30, 2009 was $4,740 and
$21,622, respectively, as compared to $16,828 and $52,927, respectively, for the three months and
nine months ended September 30, 2008. The variances between periods are attributable to generally
lower interest rates.
Item 3
Quantitative and Qualitative Disclosures About Market Risk
We do not currently have any market risk sensitive instruments held for trading purposes or
otherwise, therefore, we do not have exposure to interest rate risk, foreign currency exchange rate
risk, commodity price risk, and other relevant market risks.
Item 4
Controls and Procedures
Evaluation
of disclosure controls and procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure
that the information required to be disclosed in reports filed or submitted under the Securities
Exchange Act of 1934, as amended (Exchange Act), is (1) recorded, processed, summarized and
reported within the time periods specified in the SECs rules and forms and (2) accumulated and
communicated to management, including the chief executive officer and principal financial officer,
as appropriate to allow timely decisions regarding required disclosure.
Our management has carried out an evaluation, under the supervision and with the participation of
our President and our Principal Financial Officer, of the effectiveness of the design and operation
of our disclosure controls and procedures as of the end of the period covered by this report.
Based on that evaluation, our President and Chief Financial Officer have concluded that our
disclosure controls and procedures are effective to ensure that information required to be
disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported within the time periods specified in the Securities
and Exchange Commissions rules and forms.
Changes
in internal control over financial reporting
There was no change in our internal control over financial reporting that occurred during the three
months ended September 30, 2009 that has materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting.
14
Part II OTHER INFORMATION
Item 1
Legal Proceedings
None
Item 1A
Risk Factors
For information regarding factors that could affect the our results of operations, financial
condition or liquidity, see the risk factors discussed under Risk Factors in Item 1A of our most
recent Annual Report on Form 10-K. See also Forward-Looking Statements, included in Item 2 of
this Quarterly Report on Form 10-Q. There have been no material changes from the risk factors
previously disclosed in our most recent Annual Report on Form 10-K.
Item 2
Unregistered Sales of Equity Securities and Use of Proceeds
None not previously disclosed on Form 8-K.
Item 3
Defaults Upon Senior Securities
None.
Item 4
Submission of Matters to a Vote of Security Holders
None.
Item 5
Other Information
None.
15
Item 6
Exhibits
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Exhibit
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Number
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Description
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2.1
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Agreement and Plan of Merger dated January 20, 2006 by and among GeoVax, Inc., GeoVax
Acquisition Corp. and Dauphin Technology, Inc. (1)
|
|
|
|
2.2
|
|
First Amendment to Agreement and Plan of Merger (2)
|
|
|
|
2.3
|
|
Second Amendment to Agreement and Plan of Merger (3)
|
|
|
|
3.1
|
|
Certificate of Incorporation (4)
|
|
|
|
3.2
|
|
Bylaws (4)
|
|
|
|
10.1*
|
|
Office and Laboratory Lease between UCB, Inc. and GeoVax, Inc.
|
|
|
|
31.1*
|
|
Certification pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934
|
|
|
|
31.2*
|
|
Certification pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934
|
|
|
|
32.1*
|
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted by Section 906 of the
Sarbanes-Oxley Act of 2002
|
|
|
|
32.2*
|
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted by Section 906 of the
Sarbanes-Oxley Act of 2002
|
|
|
|
*
|
|
Filed herewith
|
|
(1)
|
|
Incorporated by reference from the registrants Current Report on Form 8-K filed with the
Securities and Exchange Commission on January 24, 2006.
|
|
(2)
|
|
Incorporated by reference from the registrants Current Report on Form 8-K filed with the
Securities and Exchange Commission on July 13, 2006.
|
|
(3)
|
|
Incorporated by reference from the registrants Current Report on Form 8-K filed with the
Securities and Exchange Commission on October 4, 2006.
|
|
(4)
|
|
Incorporated by reference from the registrants Current Report on Form 8-K filed with the
Securities and Exchange Commission on June 19, 2008.
|
The representations, warranties and covenants contained in the agreements identified above as
exhibits, together with those incorporated by reference, were made only for the purposes of those
agreements, are between and among the parties to them, as of specific dates, and are solely for the
benefit of those parties. The agreements may be subject to contractual limitations agreed to by the
parties as well as standards of materiality that differ from those generally applicable to
investors, and may reflect an allocation of risk. Various provisions may be interpreted differently
by the parties, and may be waived or modified. While the agreements constitute public disclosure
under the federal securities laws, when reading representations, warranties and covenants in those
agreements, investors should consider the foregoing, as well as information provided by us in this
filing and in our other filings, and should not rely solely upon such agreements as
characterizations of an actual state of facts.
16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused
this quarterly report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
|
|
|
|
GEOVAX LABS, INC.
(Registrant)
|
|
Date: November 6, 2009
|
By:
|
/s/ Mark W. Reynolds
|
|
|
|
Mark W. Reynolds
|
|
|
|
Chief Financial Officer
(duly authorized officer and principal
financial officer)
|
|
17
EXHIBIT INDEX
|
|
|
Exhibit
|
|
|
Number
|
|
Description
|
10.1
|
|
Office and Laboratory Lease between UCB, Inc. and GeoVax, Inc.
|
|
|
|
31.1
|
|
Certification pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934
|
|
|
|
31.2
|
|
Certification pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934
|
|
|
|
32.1
|
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.2
|
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002.
|
18
Exhibit 10.1
Execution Version
OFFICE AND LABORATORY LEASE
between
UCB, INC.
Landlord
and
GEOVAX, INC.
Tenant
1900 LAKE PARK DRIVE
SMYRNA, GEORGIA 30080
LEASE SUMMARY
|
|
|
Date:
|
|
August 31, 2009
|
|
|
|
Landlord:
|
|
UCB, Inc., a Delaware corporation
|
|
|
|
Tenant:
|
|
GeoVax, Inc., a Georgia corporation
|
|
|
|
Premises and Floor(s) and
|
|
8,430 rentable square feet in Suites 360, 370 and 380 of the Building on
|
Expansion:
|
|
the ground floor located at 1900 Lake Park Drive, Smyrna Georgia 30080
|
[Section 1.1(b)]
|
|
(Premises)
|
|
|
|
|
|
Tenant will only be charged for the use of 6,000 rentable square feet
|
|
|
(Rentable Area), but has the right to beneficial occupancy of the
|
|
|
entire Premises; provided, however, Landlord shall have the right to
|
|
|
recapture up to 2,430 rentable square feet beginning from the demising
|
|
|
wall on the left-hand side of Suite 360/370 with ninety (90) days prior
|
|
|
written notice to Tenant and Landlords installation, at Landlord's
|
|
|
expense, of a new demising wall.
|
|
|
|
|
|
Landlord shall provide a Right of First Refusal on the 2,430 contiguous
|
|
|
rentable square feet to be leased at the then current market lease rate
|
|
|
(Expanded Rentable Area).
|
|
|
|
Lease Term:
|
|
Sixty-Two (62) months with two (2) months rent abatement outside the term
|
[Section 2.1]
|
|
|
|
|
|
Commencement Date:
|
|
November 1, 2009
|
[Section 2.1]
|
|
|
|
|
|
Rent Commencement:
|
|
January 1, 2010
|
[Section 2.1]
|
|
|
|
|
|
Expiration Date:
|
|
December 31, 2014
|
[Section 2.1]
|
|
|
|
|
|
Base Rental:
|
|
Full service Base Rental Rate, to be paid in equal monthly installments.
|
[Section 3.1]
|
|
|
|
|
|
|
|
Months
|
|
Rate/RSF Gross
|
1 - 2
|
|
$
|
0.00
|
|
3 - 12
|
|
$
|
19.00
|
|
13 - 24
|
|
$
|
19.57
|
|
25 - 36
|
|
$
|
20.16
|
|
37 - 48
|
|
$
|
20.76
|
|
49 - 60
|
|
$
|
21.38
|
|
61 - 62
|
|
$
|
22.02
|
|
|
|
|
Security Deposit:
|
|
Last months rent or Eleven Thousand Ten Dollars ($11,010.00)
|
|
|
|
Landlords Address for the
|
|
UCB, Inc.
|
mailing of payments:
|
|
1950 Lake Park Drive
|
[Section 3.4]
|
|
Smyrna, Georgia 30080
|
|
|
Attn: Scott Gee
|
|
|
|
Use: [Section 5.1]
|
|
General office use and laboratory use
|
|
|
|
Tenants Broker and Address
|
|
Stephanie Marino
|
for Notices:
|
|
CB Richard Ellis, Inc.
|
[Section 9.1]
|
|
3280 Peachtree Road
|
|
|
Suite 1400
|
|
|
Atlanta, GA 30305
|
|
|
|
Tenants Address for Notices:
|
|
GeoVax, Inc.
|
[Section 9.2]
|
|
1256 Briarcliff Road NE
|
|
|
Atlanta, GA 30306
|
|
|
Attn: Bob McNally, President and CEO
|
|
|
|
Landlords Address for
|
|
UCB, Inc.
|
Notices:
|
|
1950 Lake Park Drive
|
[Section 9.2]
|
|
Smyrna, Georgia 30080
|
|
|
Attn: Scott Gee
|
|
|
|
Jay Dowlen
|
Landlords Broker and
|
|
CB Richard Ellis, Inc.
|
Address for
|
|
3280 Peachtree Road
|
Notices:
|
|
Suite 1400
|
|
|
Atlanta, GA 30305
|
[Section 9.2]
|
|
|
|
Landlords Allowance:
|
|
Landlord, at Landlords expense, shall repaint and re-carpet the Premises
|
[Section 4.1]
|
|
and replace the missing ceiling tiles in the Premises with finishes
|
|
|
mutually agreeable to Landlord and Tenant, such cost not to exceed $7.50
|
|
|
per rentable square foot ($45,000.00). Except as otherwise provided in
|
|
|
this Section 4.1, Tenant is accepting the Premises as is, and the
|
|
|
Landlord shall have no obligation whatsoever to perform and contribute to
|
|
|
any additional tenant improvements for the Premises.
|
1900 LAKE PARK DRIVE
OFFICE LEASE
TABLE OF CONTENTS
|
|
|
|
|
|
|
|
|
Page
|
I
|
|
PREMISES AND OTHER DEFINITIONS
|
|
1
|
|
|
1.1 Premises
|
|
1
|
|
|
1.2 Area of the Premises
|
|
1
|
|
|
1.3 Prime Rate
|
|
1
|
|
|
1.4 Property Taxes
|
|
2
|
II
|
|
TERM, ASSIGNMENT AND SUBLETTING
|
|
2
|
|
|
2.1 Term
|
|
2
|
|
|
2.2 Removal of Tenants Property
|
|
2
|
|
|
2.3 Holding Over
|
|
2
|
|
|
2.4 Assignment and Subleasing
|
|
2
|
III
|
|
RENT
|
|
3
|
|
|
3.1 Base Rental
|
|
3
|
|
|
3.2 Operating Expenses
|
|
3
|
|
|
3.3 Security Deposit
|
|
3
|
|
|
3.4 Payments
|
|
3
|
|
|
3.5 Advanced Base Rental
|
|
3
|
|
|
3.6 Rent for Partial Months
|
|
3
|
IV
|
|
PREPARATION, MAINTENANCE AND REPAIR OF PREMISES
|
|
4
|
|
|
4.1 Tenant Improvements
|
|
4
|
|
|
4.2 Repairs by Tenant
|
|
4
|
|
|
4.3 Repairs by Landlord
|
|
4
|
|
|
4.4 Alterations by Tenant
|
|
4
|
|
|
4.5 Discharge of Liens
|
|
4
|
|
|
4.6 Damage and Destruction
|
|
4
|
|
|
4.7 Eminent Domain
|
|
5
|
|
|
4.8 Report of Defects
|
|
6
|
|
|
4.9 Landlords Right to Enter Premises
|
|
6
|
V
|
|
USE AND SERVICES
|
|
6
|
|
|
5.1 Use
|
|
6
|
|
|
5.2 Services, Furniture and Equipment
|
|
6
|
-i-
TABLE OF CONTENTS
(continued)
|
|
|
|
|
|
|
|
|
Page
|
VI
|
|
COMPLIANCE WITH LAWS
|
|
7
|
|
|
6.1 Tenants Compliance with Laws
|
|
7
|
|
|
6.2 Building Alterations
|
|
7
|
VII
|
|
INSURANCE, LIABILITY AND INDEMNIFICATION
|
|
7
|
|
|
7.1 Insurance
|
|
7
|
|
|
7.2 Waiver of Subrogation
|
|
8
|
|
|
7.3 Indemnity by Tenant
|
|
8
|
|
|
7.4 Limitation of Liability
|
|
8
|
VIII
|
|
EVENTS OF DEFAULT AND RELATED REQUIREMENTS
|
|
9
|
|
|
8.1 Default and Remedies
|
|
9
|
|
|
8.2 Insolvency or Bankruptcy
|
|
11
|
|
|
8.3 Late Payments
|
|
11
|
|
|
8.4 Attorneys Fees for Collection
|
|
11
|
|
|
8.5 No Waiver of Rights
|
|
11
|
IX
|
|
MISCELLANEOUS PROVISIONS
|
|
11
|
|
|
9.1 Brokers
|
|
11
|
|
|
9.2 Addresses and Notices
|
|
12
|
|
|
9.3 Entire Agreement and Exhibits
|
|
12
|
|
|
9.4 Subordination and Attornment
|
|
12
|
|
|
9.5 Estoppel Certificate/Amendment
|
|
12
|
|
|
9.6 Severability
|
|
13
|
|
|
9.7 Captions
|
|
13
|
|
|
9.8 Successors and Assigns
|
|
13
|
|
|
9.9 Georgia Law
|
|
13
|
|
|
9.10 Time is of the Essence
|
|
13
|
|
|
9.11 Execution
|
|
13
|
|
|
9.12 Force Majeure
|
|
13
|
|
|
9.13 Mutual Warranty of Authority
|
|
13
|
|
|
9.14 Parking Rights
|
|
14
|
|
|
9.15 Recordation of Lease
|
|
14
|
|
|
9.16 Hazardous Substances
|
|
14
|
|
|
9.17 Names
|
|
15
|
|
|
9.18 Shared Communications Services
|
|
15
|
-ii-
TABLE OF CONTENTS
(continued)
|
|
|
|
|
|
|
|
|
Page
|
|
|
9.19 Ownership and Management Disclosure
|
|
15
|
|
|
9.20 Effect of Lease Termination
|
|
15
|
|
|
9.21 Quiet Enjoyment
|
|
15
|
-iii-
SCHEDULE OF EXHIBITS
|
|
|
Exhibit A
:
|
|
Floor Plan(s)
|
Exhibit B
:
|
|
Rules and Regulations
|
Exhibit C:
|
|
Tenant Improvements
|
-iv-
1900 LAKE PARK DRIVE
OFFICE LEASE
THIS LEASE AGREEMENT (the Lease), dated as of, but not necessarily on, November 1, 2009,
made by and between the undersigned Landlord and the undersigned Tenant.
W I T N E S S E T H T H A T:
Landlord, for and in consideration of the rents, covenants, agreements and stipulations herein
contained, to be paid, kept and performed by Tenant, has leased and rented, and by these presents
hereby leases and rents unto Tenant, and Tenant hereby leases upon the terms and conditions herein
contained, the Premises described in Section 1.1(b) below. This Lease shall create the
relationship of landlord and tenant between Landlord and Tenant; and Tenant has only a usufruct
which is not subject to levy and sale. So long as Tenant shall observe and perform the covenants
and agreements binding on it hereunder and subject to the terms and provisions hereof, Tenant shall
at all times during the Lease Term (as hereinafter defined) peacefully and quietly have and enjoy
possession of the Premises.
This Lease shall be applied and construed in a commercially reasonable manner. Whenever
herein the consent, approval or concurrence of either Landlord or Tenant shall be required for
action or forbearance by the other party, it is agreed that such consent, approval or concurrence
shall not be unreasonably withheld, delayed or conditioned, except as to matters specified as being
in the discretion or sole discretion of the party from which the consent, approval or concurrence
is required. Discretionary consent, approval or concurrence may be withheld, delayed or
conditioned without regard to any standard of reasonableness.
I
PREMISES AND OTHER DEFINITIONS
Terms not defined in this Lease shall have the respective meanings set forth in the Lease
Summary attached as a preamble hereto, and incorporated herein by this reference. Unless the
context otherwise specifies or requires, the following terms shall have the meanings herein
specified:
1.1
Premises
. Terms used in defining Premises are:
(a) The term Building shall mean the building located at 1900 Lake Park Drive,
Smyrna, Georgia, consisting of approximately 35,858 square feet of rentable space.
(b) The term Premises shall mean that portion of the Building located on the floor(s)
of the Building specified in the Lease Summary, which portion is shown on the floor plan(s)
attached hereto as Exhibit A together with a non-exclusive right in common with others to
use and enjoy those common areas or portions of the Building, including but not limited to
driveways, sidewalks, parking lots, hallways, corridors, trash rooms, mechanical and
electrical rooms, storage rooms, stairways, entrances, exits, restrooms, lobbies, stairs,
loading docks, pedestrian walks, roofs and basements, janitors and storage closets within
the Building and all other common rooms and common facilities within the Building
(collectively, the Common Areas). Upon any expansion or contraction of the Premises
pursuant to the terms of this Lease or other agreement of the parties, the term Premises
shall be deemed to apply to such space as adjusted by such expansion or contraction.
1.2
Area of the Premises
. The Rentable Area and the Expanded Rentable Area of the
Premises for all purposes of this Lease shall be the agreed quantity of square footage so
designated in the Lease Summary.
1.3
Prime Rate
shall mean the rate of interest announced from time to time by Bank
of America, N.A. as its prime rate of interest. An increase or decrease in the Prime Rate shall
result in a corresponding increase
or decrease in the rate of interest being charged hereunder and shall take effect on the day
the increase or decrease in the Prime Rate is made effective. In the event that Bank of America,
N.A. shall abandon or abolish the practice of publishing the Prime Rate, or should the same become
unascertainable, Landlord shall designate a comparable reference rate which shall then be deemed to
be the Prime Rate under this Lease.
1.4
Property Taxes
shall mean the following: (a) personal property ad valorem taxes
imposed upon the furniture, fixtures, machinery, equipment, apparatus, systems and appurtenances
used in connection with the Building for the operation thereof; (b) real estate ad valorem taxes,
assessments, impact fees, sewer charges and transit taxes; and (c) any other federal, state or
local governmental charge, general, special, ordinary or extraordinary (but not including income or
franchise taxes or any other taxes imposed upon or measured by Landlords income or profits, unless
the same shall be imposed in lieu of real estate ad valorem taxes) which may now or hereafter be
levied or assessed against the Building and the land underlying the Building or the rents derived
from the Building (in the case of special taxes or assessments which may be payable in
installments, only the amount of installments paid during a calendar year shall be included in the
taxes for that year).
II
TERM, ASSIGNMENT AND SUBLETTING
2.1
Term
. Except as otherwise provided herein, Tenant takes and accepts the Premises
from Landlord in their present condition and as suited for the use intended by Tenant, for the term
described below (the Lease Term). The Lease Term shall commence on the date specified in the
Lease Summary as the Commencement Date (the Commencement Date) and shall end at 6:00 p.m. local
time on the date specified in the Lease Summary as the Expiration Date (the Expiration Date).
The rental and other payments due hereunder from Tenant shall commence on the Rent Commencement
Date. Tenant may occupy the Premises for the two (2) weeks immediately preceding the Commencement
Date to install Tenants equipment, phone, cable and furnishings. Tenant shall be subject to all
the terms and conditions of this Lease during such two week period.
2.2
Removal of Tenants Property
. Upon or prior to the termination of this Lease,
Tenant shall have the obligation to remove from the Premises and the Building all of its personal
property and trade fixtures, and peaceably surrender the Premises to Landlord in a clean and ready
to occupy condition. Such property of Tenant not so removed from the Premises or the Building upon
the termination of this Lease shall be considered abandoned by Tenant and may be disposed of by
Landlord in any manner whatsoever without accounting to Tenant for same or being liable in any way
to Tenant for such disposition. Upon surrender of possession of the Premises, Tenant shall deliver
to Landlord all keys to the Premises. Tenant shall not remove from the Premises and the Building
those Tenant improvements to the mechanical, electrical or plumbing systems of the Building.
2.3
Holding Over
. In no event shall there be any renewal of this Lease by operation
of law, and if Tenant remains in possession of the Premises after the termination of this Lease
without written authorization executed by Landlord and Tenant, but with the acquiescence or consent
of Landlord, Tenant shall be deemed to be occupying the Premises under a month-to-month periodic
tenancy at a monthly rental equal to one hundred twenty-five percent (125%) of the Base Rental as
adjusted by Rental Adjustment in effect during the last month of the Lease Term, plus all
additional rental provided for in this Lease, and otherwise subject to all the covenants and
provisions of this Lease insofar as the same are applicable to a month-to-month periodic tenancy.
Landlord and Tenant agree that any such periodic tenancy may be terminated by thirty (30) days
prior written notice by either party to the other party. If Tenant remains in possession after
termination of this Lease without Landlords acquiescence or consent, Tenant thereupon shall be
deemed a tenant-at-sufferance subject to summary eviction as provided by law.
2.4
Assignment and Subleasing
.
(a) Tenant may not assign this Lease or sublease the Premises without obtaining the
prior written consent of Landlord which Landlord, which consent Landlord shall not
unreasonably withhold or delay.
(b) Tenant agrees to pay, as additional rental, to Landlord, on demand, reasonable
costs incurred by Landlord (i) in connection with any request by Tenant for Landlord to
consent to any
2
assignment or subleasing by Tenant, and (ii) in providing any services or materials to
any assignee or sublessee of Tenant.
(c) If, with the consent of Landlord, this Lease is assigned or the Premises or any
part thereof is subleased, Landlord may, after default by Tenant, collect rent from the
assignee, subtenant or occupant, and apply the net amount collected to the Base Rental and
additional rental herein reserved, but no such subleasing, occupancy or collection shall be
deemed (i) a waiver of any of Tenants covenants contained in this Lease, (ii) the
acceptance by Landlord of the subtenant as Tenant, or (iii) the release of Tenant from
further performance by Tenant of its covenants under this Lease.
(d) Landlords approval of or consent to an assignment or sublease transaction shall
not operate to release Tenant from its liability hereunder, and shall not affect Landlords
rights under this Section 2.4 as to any subsequent proposed assignment or sublease.
(e) Tenant covenants and agrees to deliver to Landlord one (1) fully executed
counterpart of the instruments and documents (including amendments thereto) evidencing any
approved assignment or subleasing effected pursuant to this Lease. Such delivery shall be
made promptly following the execution of any such instrument or document.
III
RENT
3.1
Base Rental
. Tenant shall pay to Landlord an annual base rent in monthly
installments for and during the Lease Term in the amounts specified in the Lease Summary (the Base
Rental). The monthly installments of Base Rental shall be paid in advance on the first (1st) day
of every calendar month during the Lease Term beginning on the Rent Commencement Date.
3.2
Operating Expenses
. Tenant acknowledges that in determining the Base Rental,
Landlord has assumed it will operate the Building during the hours of 8:00 a.m. to 6:00 p.m.,
Monday through Friday, and 8:00 a.m. to 6:00 p.m. Saturdays, holidays excluded. If Tenants
operations exceed such hours of operation, Landlord may sub-meter the Premises electric and HVAC,
at Landlords option, cost and expense, and Tenant shall pay any such incremental cost associated
with the provision of utilities for the Tenants extended hours of operation. Tenant shall
receive a Base Year of 2010 for operating expenses agreed to in 7/28/2009 proposal.
3.3
Security Deposit
. Upon the execution of this Lease, Tenant shall pay to Landlord
a Security Deposit as set forth in the Lease Summary.
3.4
Payments
. Tenant shall pay to Landlord all Base Rental, additional rent and all
other charges due and owing by Tenant under this Lease without deduction or set off, in legal
tender, at the address specified in the Lease Summary for the mailing of payments, or as otherwise
directed from time to time by Landlord.
3.5
Advanced Base Rental
. Upon the execution of this Lease, Tenant shall pay to
Landlord the first full month Base Rental.
3.6
Rent for Partial Months
. A prorated monthly installment, based on a thirty (30)
day month, shall be paid in advance (i) on the Rent Commencement Date for any fraction of a month
if the Lease Term begins on any day other than the first (1st) day of any month and (ii) on the
first (1st) day of the final month of the Lease Term for any fraction of a month if the Lease Term
shall terminate on any day other than the last day of any month.
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IV
PREPARATION, MAINTENANCE AND REPAIR OF PREMISES
4.1
Tenant Improvements
. Landlord, at Landlords expense, shall repaint and re-carpet
the Premises and replace the missing ceiling tiles in the Premises with finishes mutually agreeable
to Landlord and Tenant, such cost not to exceed $7.50 per rentable square foot. Except as otherwise
provided in this Section 4.1, Tenant is accepting the Premises as is, and the Landlord shall have
no obligation whatsoever to perform and contribute to any additional tenant improvements for the
Premises. Tenant, at Tenants expense, may make additional improvements to the Premises with UCBs
prior written consent. Improvements mutually agreed upon as of the date of this Lease are set
forth in Exhibit C.
4.2
Repairs by Tenant
. Tenant shall at its own expense keep the Premises in good
repair and tenantable condition and indemnify Landlord against any loss, damage or expense arising
by reason of any failure of Tenant so to keep the Premises in good repair and tenantable condition
or due to any act or neglect of Tenant, its agents, employees, contractors, invitees, licensees,
tenants or assignees. If Tenant fails to perform, or cause to be performed, such maintenance and
repairs, then at the option of Landlord, in its sole discretion, any such maintenance or repair may
be performed or caused to be performed by Landlord and the cost and expense thereof charged to
Tenant, and Tenant shall pay the amount thereof to Landlord on demand as additional rental.
Without limitation, Tenant shall be obligated to maintain the mechanical, plumbing, and electrical
systems that are specific to the Laboratory space, and shall be responsible for maintaining such
areas in accordance with all applicable laws, rules, statutes, ordinances and codes during the
Term.
4.3
Repairs by Landlord
. Landlord shall at its own expense unless otherwise provided
herein keep and maintain in good order and repair the Common Areas of the Building. Additionally,
Landlord is responsible for maintaining and repairing the roof.
4.4
Alterations by Tenant
. Tenant shall make no structural alterations or additions
of any kind in or to the Premises. Tenant shall otherwise have the right to alter the Premises
with Landlords consent, not to be unreasonably withheld or delayed so long as such alterations
comply with Landlords reasonable rules and regulations, all local law, rules and ordinances are
followed, and Tenant submits a governmentally approved set of plans to Landlord prior to
commencement of such alterations. If a building permit is required in connection with such work,
Landlord shall not unreasonably withhold, condition or delay its approval of the Tenants plans
prior to submittal for permit applications. Landlord shall not assess any fees in connection with
its review.
4.5
Discharge of Liens
. Tenant is not authorized to contract for or on behalf of
Landlord for work on or the furnishing of materials to the Premises or any other part of the
Building. Tenant shall discharge of record by payment, bond or otherwise, within thirty (30) days
subsequent to the date of its receipt of notice thereof from Landlord, any mechanics, laborers or
similar lien filed against the Premises or the Building for work or materials claimed to have been
furnished at the instance of Tenant. If Tenant shall fail to cause such lien or claim of lien to
be so discharged or bonded within such period, in addition to any other right or remedy it may
have, Landlord may, but shall not be obligated to, discharge the same by paying the amount claimed
to be due or by procuring the discharge of such lien or claim by deposit in court or bonding, and
in any such event, Landlord shall be entitled, if Landlord so elects, to compel the prosecution of
any action for the foreclosure of such lien or claim by the claimant and to pay the amount of the
judgment, if any, in favor of the claimant, with interest, costs and allowances. Tenant shall pay
as additional rental on demand from time to time any sum or sums so paid by Landlord and all costs
and expenses incurred by Landlord, including, but not limited to, reasonable attorneys fees in
processing such discharge or in defending any such action.
4.6
Damage and Destruction
.
(a) If the Building or Premises is damaged partially or wholly by fire, the elements,
act of God or other casualty, and if such damage cannot, in Landlords reasonable
estimation, be materially restored within one hundred twenty (120) days of such damage, then
either Landlord or Tenant may terminate this Lease as of the date of such fire or casualty
and the Lease Term shall end on such date as if that date had been originally fixed in this
Lease for the expiration of the Lease Term. Landlord or Tenant shall exercise its option provided herein by written notice to the other within sixty
(60) days of such fire or other casualty.
4
(b) If this Lease is not terminated pursuant to subsection (a) above, then Landlord,
within such one hundred twenty (120) day period, shall repair and restore to a condition
substantially the same as existing on the date of this Lease the Building or Premises, as
the case may be (except that Landlord may elect not to rebuild, and thus terminate this
Lease, if such damage occurs during the last year of the Lease Term, regardless of any term
extension option which is unexercised at the date of occurrence of the casualty). In the
event that Landlord shall fail to complete such repairs and material restoration within
sixty (60) days after the end of such 120 day period and Tenants use and enjoyment of the
Premises is then materially impaired by the uncompleted restoration, Tenant may at its
option and as its sole remedy terminate this Lease by delivering written notice to Landlord,
whereupon the Lease shall end on the date of such notice as if the date of such notice were
the date originally fixed in this Lease for the expiration of the term hereof; provided,
however, that if construction is delayed because of changes, deletions or additions in
construction requested by Tenant, or because of strikes, lockouts, casualties, acts of God,
war, material or labor shortages, governmental regulation or control or other causes beyond
the reasonable control of Landlord, the period for restoration, repair or rebuilding shall
be extended for the amount of time Landlord is so delayed. In no event shall Landlord be
required to rebuild, repair or replace any personal property, equipment or trade fixtures
which belong to Tenant.
(c) If this Lease is not terminated pursuant to this Section 4.6 and if the Premises
are unfit for occupancy in whole or in part following such damage, the Base Rental and
Rental Adjustment payable during the period in which the Premises are unfit for occupancy
shall be reduced in proportion to the number of square feet of Rentable Area of the premises
rendered unusable by such damage.
(d) Any insurance which may be carried by Landlord or Tenant against loss or damage to
the Building or Premises shall be for the sole benefit of the party carrying such insurance
and under its sole control except that Landlords insurance may be subject to control by the
holder or holders of any indebtedness secured by a mortgage or deed to secure debt covering
any interest of Landlord in the Premises or the Building.
(e) Notwithstanding anything herein to the contrary, in the event the holder of any
indebtedness secured by a mortgage or deed to secure debt covering the Premises or Building
requires that any insurance proceeds be paid to it, then Landlord shall have the right to
terminate this Lease by delivering written notice of termination to Tenant within fifteen
(15) days after such requirement is made by any such holder, whereupon the Lease shall end
on the date of such damage as if the date of such damage were the date originally fixed in
this Lease for the expiration of the Lease Term.
(f) If any such casualty stated in this Section 4.6 occurs, Landlord shall not be
liable to Tenant for inconvenience, annoyance, loss of profits, expenses or any other type
of injury or damage resulting from the repair of any such damage, or from any repair,
modification, arranging or rearranging of any portion of the Premises or any part or all of
the Building or for termination of this Lease as provided in this Section 4.6.
4.7
Eminent Domain
.
(a) If all or any substantial part of the Building or of the Premises should be taken
for any public or quasi-public use under governmental law, ordinance or regulation or by
right of eminent domain, or by private purchase in lieu thereof, and the taking would
prevent or materially interfere with Tenants use of the Premises for the purpose for which
it is then being used, this Lease shall terminate effective when the physical taking shall
occur in the same manner as if the date of such taking were the date originally fixed in
this Lease for the expiration of the Lease Term.
(b) If part of the Building or Premises is taken for any public or quasi-public use
under any governmental law, ordinance or regulation, or by right of eminent domain or by
private purchase in lieu thereof, and this Lease is not terminated as provided in subsection
(a) above, this Lease shall not terminate
5
but the Base Rental and Rental Adjustment payable hereunder during the unexpired
portion of this Lease shall be reduced to such extent, if any, as may be fair and reasonable
under all of the circumstances and Landlord shall undertake to restore the Building and
Premises to a condition suitable for Tenants use, as near to the condition thereof
immediately prior to such taking as is reasonably feasible under the circumstances.
(c) Tenant shall not share in any condemnation award or payment in lieu thereof or in
any award for damages resulting from any grade change of adjacent streets, the same being
hereby assigned to Landlord by Tenant; provided, however, that Tenant may, to the extent
provided by law, separately claim against and receive from the condemning authority, if
legally payable, compensation for Tenants removal, relocation costs, loss of business,
business interruption and loss of trade fixtures, but only if and to the extent no such
claim or award therefor will reduce or affect Landlords awards.
(d) Notwithstanding anything to the contrary contained in this Section 4.7, if during
the Lease Term the use or occupancy of any part of the Building or Premises shall be taken
or appropriated temporarily for any public or quasi-public use under any governmental law,
ordinance or regulation, or by right of eminent domain, this Lease shall be and remain
unaffected by such taking or appropriation and Tenant shall continue to pay in full all
rental payable hereunder by Tenant during the Lease Term provided Tenants Premises is not
affected. In the event of any such temporary appropriation or taking, Tenant shall be
entitled to receive that portion of any award which represents compensation for the loss of
use or occupancy of the Premises during the Lease Term, and Landlord shall be entitled to
receive that portion of any award which represents the cost of restoration and compensation
for the loss of use or occupancy of the Premises after the end of the term of this Lease.
4.8
Reports of Defects
. Tenant shall report to Landlord immediately in writing any
damage to or defective condition in or about the Building or Premises known to Tenant.
4.9
Landlords Right to Enter Premises
. Tenant shall not change the locks on any
entrance to the Premises or install additional locks without Landlords prior written consent,
which consent shall not be unreasonably withheld or delayed by Landlord. Upon Tenants written
request to Landlord, Landlord will make a reasonable change of locks on behalf of Tenant and at
Tenants sole cost and expense. Landlord and its agents, employees and contractors upon
forty-eight (48) hours prior telephonic notice shall have the right to enter the Premises at such
times as Landlord deems reasonably necessary to make necessary repairs, additions, alterations and
improvements to the Building, including, without limitation, the erection, use and maintenance of
pipes and conduits and repairs to adjacent premises or other premises. Landlord shall also be
allowed to take into and through the Premises any and all needed materials that may be required to
make such repairs, additions, alterations and improvements. During such time as work is being
carried on, in or about the Premises, provided such work is carried out in a manner so as not to
interfere unreasonably with the conduct of Tenants business therein, the rent provided herein
shall in no wise abate. In the event of emergency, or if otherwise necessary to prevent injury to
persons or damage to property, such entry to the Premises may be made without prior notice and by
force, if necessary.
V
USE AND SERVICES
5.1
Use
. Tenant shall use the Premises for the purposes stated in the Lease Summary
and for no other purpose. Tenant shall not use the Premises for any illegal purpose, nor violate
any statute, regulation, rule or order of any governmental body in its use thereof, nor create or
allow to exist any nuisances or trespasses, nor do any act in or about the Premises or bring
anything onto or into the Premises which will in any way increase the rate of insurance on the
Premises nor deface or injure the Premises or overload the floor of the Premises. Tenant shall
have access to the Premises seven days per week, twenty-four hours per day, at which time the
services set forth in Section 5.2 below shall be available (except as otherwise noted):
5.2
Services, Furniture and Equipment
. Landlord agrees to provide to Tenant the
following:
6
(a) Heating and air-conditioning service from 8:00 a.m. to 6:00 p.m., Monday through
Friday and 8:00 a.m. to 12:00 p.m. Saturday, holidays excepted;
(b) Use of furniture in the Premises consisting of eleven (11) existing Knoll cubicles
that are 8 x 8 in size;
(c) Access to and use of the employee cafeteria located at 2100 Lake Park Drive during
normal hours of cafeteria service subject to business conditions;
(d) Access to and use of mail room services excluding postage costs on outbound mail,
parcels and COD costs on inbound shipments;
(e) Shared access to the liquid nitrogen tank located in the truck court of the
Building;
(f) Janitorial services and those service required to maintain a first class office
complex (through the Landlords property management company);
(g) Electric current in quantity consistent with past operation of the Building;
(h) Campus security guard service 24 hours per day, seven days per week, 365 days per
year without interruption; and
(i) Campus reception services to include visitor management.
VI
COMPLIANCE WITH LAWS
6.1
Tenants Compliance with Laws
. Tenant shall comply, at its own expense, with all
statutes, regulations, rules, ordinances and orders of any governmental body, department or agency
thereof which apply to or result from Tenants use or occupancy of the Premises and shall abide by
and observe the Rules and Regulations attached to this Lease as Exhibit B and such other
reasonable rules and regulations for the use, occupancy or operation of the Building as may
hereafter be established in writing by Landlord.
6.2
Building Alterations
. If, in order to maintain the Building as an office building
or otherwise, Landlord shall be required by any governmental authority to repair, alter, remove,
construct, reconstruct or improve any part or all of the Building or Premises, Tenants obligations
under this Lease will not be affected, provided, however, that if such action by Landlord shall
render the Premises wholly unfit for occupancy and if, in Landlords reasonable estimation, it
cannot complete such acts within ninety (90) days, then at the option of Tenant to be exercised by
giving written notice to Landlord within sixty (60) days following the date of notice to Landlord
by such governmental authority, this Lease shall terminate on the date of such election and Tenant
shall immediately surrender the Premises to Landlord. In such event Tenant shall continue to owe
and pay rent and other charges up to but not beyond the time of such surrender. If Tenant shall
elect not to terminate this Lease as provided above, Landlord and Tenant shall have the same
respective rights and obligations as provided above in Sections 4.7(b) and (c), and the provisions
of Section 4.6(f) shall apply regardless of whether or not Tenant elects to terminate this Lease.
VII
INSURANCE, LIABILITY AND INDEMNIFICATION
7.1
Insurance
.
(a) Tenant agrees to carry fire and extended coverage insurance insuring Tenants
interest in its improvements and betterments to the Premises and any and all furniture,
equipment, supplies and other
7
property owned, leased, held or possessed by it and contained therein, such insurance
coverage to be in an amount equal to the full insurable value of such improvements and
property.
(b) Tenant also agrees to carry a policy or policies of workers compensation and
commercial general liability insurance, including personal injury and property damage, with
contractual liability endorsement, in the amount of Five Hundred Thousand Dollars
($500,000.00) for property damage and One Million Dollars ($1,000,000.00) per occurrence for
personal injuries or deaths of persons occurring in or about the Premises. Said policies
shall: (i) name Landlord as an additional insured, (ii) be issued by an insurance company
which is reasonably acceptable to Landlord and licensed to do business in the State of
Georgia, and (iii) provide that said insurance shall not and may not be canceled unless
thirty (30) days prior written notice shall have been given to Landlord. Said policy or
policies, or certificates thereof, shall be delivered to Landlord by Tenant upon
commencement of the term of the Lease and upon each renewal of said insurance.
(c) Landlord shall keep the Building insured during the Term against loss or damage by
fire, casualty or other insurable hazards and extended coverage in an amount at least equal
to the replacement cost of the Building. Landlord shall also carry a policy or policies of
workers compensation and commercial general liability insurance, including personal injury
and property damage, with contractual liability endorsement, in the amount of Five Hundred
Thousand Dollars ($500,000.00) for property damage and One Million Dollars ($1,000,000.00)
per occurrence for personal injuries or deaths of persons occurring in or about the
Premises.
7.2
Waiver of Subrogation
. Anything in this Lease to the contrary notwithstanding,
neither party shall be liable to the other for damages arising out of the damage to or destruction
of the contents of the Premises or for damage to or destruction of the Premises or the Building, or
by fire or other casualty which loss would be covered by a standard fire and extended risk
insurance policy, whether or not such damage or destruction is the result of negligence on the part
of either party, or its agents, servants, or employees, it being the understanding and agreement of
the parties is obligated to carry its own insurance against such risks and that each party will
look to its insurance for indemnity against any such damage. Neither Party shall have any interest
in the others insurance or the proceeds thereof.
7.3
Indemnity by Tenant
. Tenant agrees to indemnify and hold Landlord harmless from
and defend Landlord against any and all claims or liability for any injury or death to any of
Tenants employees, guests, invitees, agents or contractors, or damage to any property whatsoever:
(a) either (i) occurring in, on or about the Premises, or (ii) occurring in, on or
about any facilities (including, without limitation, elevators, stairways, passageways or
hallways) the use of which Tenant may have in conjunction with other tenants of the
Building, when such injury, death or damage shall be caused by the act, neglect or fault of,
or omission of any duty with respect to the same, by Tenant, its agents, employees,
contractors, invitees, licensees, tenants or assignees;
(b) arising from any work or thing whatsoever done by or on behalf of Tenant in or
about the Premises or from transactions of the Tenant concerning the Premises;
(c) arising from any breach or event of default on the part of the Tenant in the
performance of any covenant or agreement on the part of the Tenant to be performed pursuant
to the terms of this Lease; or
(d) otherwise arising from any act or neglect of the Tenant, or any of its agents,
employees, contractors, invitees, licensees, tenants or assignees.
7.4
Limitation of Liability
. LANDLORDS OBLIGATIONS AND LIABILITY WITH RESPECT TO
THIS LEASE SHALL BE LIMITED SOLELY TO LANDLORDS INTEREST IN THE BUILDING, AS SUCH INTEREST IS
CONSTITUTED FROM TIME TO TIME, AND NEITHER LANDLORD (BEYOND ITS INTEREST IN THE BUILDING) NOR ANY
OFFICER, DIRECTOR, SHAREHOLDER, MEMBER, TRUSTEE,
8
BENEFICIARY OR PARTNER OF LANDLORD SHALL HAVE ANY PERSONAL LIABILITY WHATSOEVER WITH RESPECT
TO THIS LEASE. IN ANY ACTION OR PROCEEDING BROUGHT TO ENFORCE THE OBLIGATION OF LANDLORD TO TENANT
UNDER THIS LEASE, LANDLORD AND TENANT AGREE THAT ANY FINAL JUDGMENT OR DECREE SHALL BE ENFORCEABLE
AGAINST LANDLORD ONLY TO THE EXTENT OF LANDLORDS INTEREST IN THE BUILDING, AS AFORESAID, AND ANY
SUCH JUDGMENT OR DECREE SHALL NOT BE CAPABLE OF EXECUTION AGAINST, NOR BE A LIEN ON, ANY ASSETS OF
LANDLORD OTHER THAN ITS INTEREST IN THE BUILDING, AS AFORESAID.
VIII
EVENTS OF DEFAULT AND RELATED REQUIREMENTS
8.1
Default and Remedies
.
(a) The occurrence of any of the following shall constitute an event of default
(Default) by Tenant hereunder:
(i) The Base Rental or additional rental payable under this Lease is not paid
within five (5) business days from designated due date;
(ii) Tenants interest in the Lease or the Premises shall be subjected to any
attachment, levy or sale pursuant to any order or decree entered against Tenant in
any legal proceeding and such order or decree shall not be vacated within thirty (30)
days of entry thereof;
(iii) Tenant breaches or fails to comply in any material respect with any of the
Rules and Regulations in Exhibit B hereto, as the same may hereafter be amended
from time to time, and such breach or failure shall continue for more than thirty
(30) days subsequent to the date of receipt by Tenant of written notice of such
breach or failure from Landlord; provided, however, that the foregoing shall not
apply to amended rules that unreasonably interfere with Tenants intended use of the
Premises.
(iv) Tenant breaches or fails to comply with any other term, provision,
condition or covenant of this Lease, and such breach or failure shall continue for
more than thirty (30) days subsequent to the date of receipt by Tenant of written
notice of such breach or failure from Landlord if the matter in question is not
reasonably susceptible of cure by Tenant within the 30-day period, then Tenant shall
have such additional time as may reasonably be necessary, but no more than an
additional seventy (70) days, within which to effect curative action provided that
Tenant institutes the curative action within the 30-day period and prosecutes the
same diligently to completion;
(v) Tenant, if a corporation, joint venture, partnership, limited liability
company, limited partnership or trust, without Landlords prior written consent and
the written assumption of this Lease by another party approved by Landlord, both in
Landlords discretion, shall be dissolved or its status as an entity is terminated;
or
(vi) If Tenant is a joint venture, trust, general partnership, limited
partnership or limited liability company, there shall be instituted by or against any
one or more general partners, trustees or managers of Tenant, without final dismissal
thereof within thirty (30) days of the date of institution, of any proceeding under
state insolvency laws or of any proceeding under the United States Bankruptcy Code.
(b) Upon the occurrence of a Default, Landlord shall have the option to do and perform
any one or more of the following in addition to, and not in limitation of, any other remedy
or right permitted it at law or in equity or by this Lease:
9
(i) Landlord, with or without terminating this Lease, may immediately or at any
time thereafter reenter the Premises and perform, correct or repair any condition
which shall constitute a failure on Tenants part to keep, observe, perform, satisfy
or abide by any term, condition, covenant, agreement or obligation of this Lease or
of the Rules and Regulations now in effect or hereafter adopted, and Tenant shall
fully reimburse and compensate Landlord on demand for all costs and expenses incurred
by Landlord in such performance, correction or repairing, including accrued interest
as provided in the next sentence. All sums so expended to cure Default shall accrue
interest from the date of demand until date of payment at a rate of interest which is
the lower of (x) a per annum rate equal to the Prime Rate plus two percent (2%), or
(y) sixteen percent (16%) per annum, but in no event at a rate higher than that
permitted by applicable law.
(ii) Landlord, with or without terminating this Lease, may immediately or at any
time thereafter demand in writing that Tenant vacate the Premises and thereupon
Tenant shall vacate the Premises and remove therefrom all property thereon belonging
to or placed on the Premises by, at the direction of or with consent of Tenant within
ten (10) days of receipt by Tenant of such notice from Landlord, whereupon Landlord
shall have the right to reenter and take possession of the Premises. Any such
demand, reentry and taking possession of the Premises by Landlord shall not of itself
constitute an acceptance by Landlord of a surrender of this Lease or of the Premises
by Tenant and shall not of itself constitute a termination of this Lease by Landlord.
(iii) Landlord, with or without terminating this Lease, may immediately or at
any time thereafter reenter the Premises and remove therefrom Tenant and all property
belonging to or placed on the Premises by, at the direction of or with consent of
Tenant. Any such reentry and removal by Landlord shall not of itself constitute an
acceptance by Landlord of a surrender of this Lease or of the Premises by Tenant and
shall not of itself constitute a termination of this Lease by Landlord.
(iv) Landlord, with or without terminating this Lease, may immediately or at any
time thereafter relet the Premises or any part thereof for such time or times, at
such rental or rentals and upon such other terms and conditions as Landlord in its
sole discretion may deem advisable, and Landlord may make any alterations or repairs
to the Premises which it may deem necessary or proper to facilitate such reletting;
and Tenant shall pay all costs of such reletting including but not limited to the
cost of any such alterations and repairs to the Premises, reasonable attorneys fees
and brokerage commissions; and if this Lease shall not have been terminated, Tenant
shall continue to pay all rent and all other charges due under this Lease up to and
including the date of beginning of payment of rent by any subsequent tenant of part
or all of the Premises, and thereafter Tenant shall pay monthly during the remainder
of the term of this Lease the difference, if any, between the rent and other charges
collected from any such subsequent tenant or tenants and the rent and other charges
reserved in this Lease, but Tenant shall not be entitled to receive any excess of any
such rents collected over the rents reserved herein.
(v) Landlord may immediately or at any time thereafter terminate this Lease, and
this Lease shall be deemed to have been terminated upon receipt by Tenant of written
notice of such termination; upon such termination Landlord shall recover from Tenant
all damages Landlord may suffer by reason of such termination including, without
limitation, unamortized sums expended by Landlord for construction of Tenant
Improvements, all arrearages in rentals, costs, charges, additional rentals and
reimbursements, the cost (including court costs and reasonable attorneys fees) of
recovering possession of the Premises, the cost of any alteration of or repair to the
Premises which is necessary or proper to prepare the same for reletting and, in
addition thereto, Landlord at its election shall have and recover as damages from
Tenant rents and other charges which Landlord would be entitled to receive from
Tenant pursuant to the provisions of clause (iv) of this subsection (b) above if the
Lease were not terminated.
(c) In the event Landlord institutes dispossessory proceedings or dispossesses or
evicts Tenant by summary proceedings or otherwise, Landlord shall have the option to do and
perform any one or more of the foregoing in addition to, and not in limitation of, any
remedy or right permitted it by law or in
10
equity or by this Lease. Specifically, without limiting the foregoing, in the event
Landlord institutes dispossessory proceedings or dispossesses or evicts Tenant by summary
proceedings or otherwise and/or re-enters and takes possession of the Premises, Tenant shall
remain liable for all rent (including Base Rental, Rental Adjustment and additional rental)
and all other charges under the Lease for the remainder of the Lease Term.
(d) No course of dealing between Landlord and Tenant or any failure or delay on the
part of Landlord in exercising any rights of Landlord under this Section 8.1 or under any
other provisions of this Lease shall operate as a waiver of any rights of Landlord hereunder
or under any other provisions of this Lease, nor shall any waiver of a Default on one
occasion operate as a waiver of any subsequent Default or of any other Default. No express
waiver shall affect any condition, covenant, rule or regulation other than the one specified
in such waiver and that one only for the time and in the manner specifically stated.
(e) The exercise by Landlord of any one or more of the rights and remedies provided in
this Lease shall not prevent the subsequent exercise by Landlord of any one or more of the
other rights and remedies herein provided. All remedies provided for in this Lease are
cumulative and may, at the election of Landlord, be exercised alternatively, successively or
in any other manner and are in addition to any other rights provided for or allowed by law
or in equity.
8.2
Insolvency or Bankruptcy
. The making by Tenant of an assignment for the benefit
of its creditors, the appointment under state law of a receiver to take possession of all or
substantially all of Tenants assets, or the voluntary or involuntary involvement of Tenant as a
principal in a state law insolvency or reorganization proceeding, may, at the option of Landlord,
be deemed and declared a Default by Tenant hereunder. Tenant covenants and agrees promptly to
notify Landlord in writing of (i) the occurrence of any of the events described in the preceding
sentence or any event similar thereto, whether occurring in Georgia or any other jurisdiction, and
(ii) the institution by or against Tenant of any proceeding under the United States Bankruptcy Code
including a copy of the petition filed to initiate such proceeding.
8.3
Late Payments
. Tenant shall pay, in the event Base Rental, additional rental or
other charge to be paid by Tenant hereunder are not paid when due, (A) a late fee of five percent
(5%) of the amount past due, which late fee Tenant acknowledges is an agreed reimbursement to
Landlord for the administrative expense incurred by Landlord as a result of Tenants late payment
and not a penalty; and (B) interest on the amount past due (excluding late fees) at a rate which is
the lower of (x) a per annum rate equal to the Prime Rate plus two percent (2%), or (y) sixteen
percent (16%) per annum, but in no event at a rate higher than that permitted by applicable law,
from due date until paid. Should Tenant make a partial payment of past due amounts, the amount of
such partial payment shall be applied first, to late fees, second, to accrued but unpaid interest,
and third, to past due amounts, in inverse order of their due date.
8.4
Attorneys Fees for Collection
. If any Base Rental, additional rental or other
debt owing by Tenant to Landlord hereunder is collected by or through an attorney-at-law, Tenant
agrees to pay the reasonable attorneys fees incurred by Landlord in such collection action.
8.5
No Waiver of Rights
. No failure or delay of either party to exercise any right or
power given it herein or to insist upon strict compliance by the other party of any obligation
imposed on it herein and no custom or practice of either party hereto at variance with any term
hereof shall constitute a waiver or a modification of the terms hereof by either party or any right
it has herein to demand strict compliance with the terms hereof by the other party. Neither party
has or shall have any authority to waive any provision of this Lease unless such waiver is
expressly made in writing.
IX
MISCELLANEOUS PROVISIONS
9.1
Brokers
. Tenant represents and warrants to Landlord that (except with respect to
any broker identified in the Lease Summary as Tenants Broker) no broker, agent, commission
salesperson or other person has represented Tenant in the negotiations for and procurement of this
Lease and of the Premises and that (except
11
with respect to any broker identified in the Lease Summary) no commissions, fees or
compensation of any kind are due and payable in connection herewith to any broker, agent,
commission salesperson or other person. Tenant agrees to indemnify and hold Landlord harmless from
all loss, cost and damage (including reasonable attorneys fees and court costs) suffered or
incurred by Landlord as a result of a breach by Tenant of the representation and warranty contained
in the immediately preceding sentence or as a result of Tenants failure to pay commissions, fees
or compensation due to any broker who represented Tenant, whether or not disclosed. Tenant
represents and discloses to Landlord that Tenants Broker identified in the Lease Summary has
represented Tenant. The commissions or other compensation due and payable to Tenants Broker by
reason of this Lease will be paid by Landlord pursuant to separate written agreements. Landlord
represents and warrants to Tenant that (except with respect to any broker identified in the Lease
Summary as Landlords Broker) no broker, agent, commission salesperson or other person has
represented Landlord in the negotiations for and procurement of this Lease and of the Premises and
that (except with respect to any broker identified in the Lease Summary) no commissions, fees or
compensation of any kind are due and payable in connection herewith to any broker, agent,
commission salesperson or other person. Landlord agrees to indemnify and hold Tenant harmless from
all loss, cost and damage (including reasonable attorneys fees and court costs) suffered or
incurred by Tenant as a result of a breach by Landlord of the representation and warranty contained
in the immediately preceding sentence or as a result of Landlords failure to pay commissions, fees
or compensation due to any broker who represented Landlord, whether or not disclosed. Landlord
represents and discloses to Tenant that Landlords Broker identified in the Lease Summary has
represented Landlord. The commissions or other compensation due and payable to Landlords Broker
by reason of this Lease will be paid by Landlord pursuant to separate written agreements.
9.2
Addresses and Notices
. All notices, unless oral notice is specified, required or
permitted to be given with respect to this Lease in order to be effective shall be in writing and
shall be sent to the address of the intended party at its address specified in the Lease Summary.
Notices shall be sent either by local or overnight courier service, or by the United States Postal
System, certified or registered mail, return receipt requested, with postage and charges prepaid.
Notices by courier service shall be deemed effective on date of delivery to the specified address.
Notices by the United States Postal System shall be deemed effective on the third (3rd) business
day subsequent to date of postmark or on the date of actual receipt by the addressee, whichever
shall be the earlier. In the event of a change of address by either party, such party shall give
written notice thereof in accordance with the foregoing.
9.3
Entire Agreement and Exhibits
. This Lease constitutes and contains the sole and
entire agreement of Landlord and Tenant with respect to the Premises and no prior or
contemporaneous oral or written representation or agreement between the parties and affecting the
Premises shall have legal effect. No modification or amendment of this Lease shall be binding upon
the parties unless such modification or amendment is in writing and signed by Landlord and Tenant.
The content of each and every exhibit, attachment and the Lease Summary which is referenced in this
Lease as being attached hereto is incorporated into this Lease as fully as if set forth in the body
of this Lease.
9.4
Subordination and Attornment
. Tenant shall, upon demand of Landlord, at any time
or times, execute, acknowledge and deliver to Landlord or to the holder of any mortgage, deed to
secure debt, deed of trust or other instrument affecting or encumbering the Building or the land
underlying the Building or to the lessor under any ground lease affecting the Building or the land
underlying the Building, without expense, any and all instruments that may be necessary to make
this Lease superior to any such mortgage, deed to secure debt, deed of trust or other instrument or
the grant of any such ground lease, and each renewal, modification, consolidation, replacement and
extension thereof.
9.5
Estoppel Certificate/Amendment
. At any time and from time to time, Tenant, on or
before the date specified in a request therefor made by Landlord, which date shall not be earlier
than ten (10) days from the making of such request, covenants and agrees to execute, acknowledge
and deliver to Landlord (a) a certificate evidencing (i) whether or not this Lease is in full force
and effect, (ii) whether or not this Lease has been amended in any manner, and if so specifying
such amendment or amendments, (iii) whether or not there are any existing events of default on the
part of Landlord hereunder to the knowledge of Tenant and specifying the nature of such events of
default, if any, and (iv) the date to which rent, and other amounts due hereunder, if any, have
been paid, or (b) amendments to this Lease required by the holder of a mortgage on the Building, as
long as such amendments do not increase the obligations or diminish the rights and benefits of
Tenant hereunder. Each certificate delivered
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pursuant to this Section may be relied on by any prospective purchaser or transferee of Landlords
interest hereunder or of any part of Landlords property or by any mortgagee of Landlords interest
hereunder or of any part of Landlords property or by an assignee of any such mortgagee or by any
ground lessor of Landlords interest hereunder.
9.6
Severability
. If any clause or provision of this Lease is or becomes illegal,
invalid or unenforceable because of present or future laws or any rule or regulation of any
governmental body or entity, effective during the Lease Term, the intention of the parties hereto
is that the remaining parts of this Lease shall not be affected thereby, unless the lack of such
clause or provision is, in the sole determination of Landlord, essential to the rights of both
parties in which event Landlord shall have the right to terminate this Lease on written notice to
Tenant.
9.7
Captions
. The captions used in this Lease are for convenience only and do not in
any way limit or amplify the terms and provisions hereof.
9.8
Successors and Assigns
. The words Landlord and Tenant as used herein shall
include the respective contracting party, whether singular or plural, and whether an individual,
masculine or feminine, or a corporation, general partnership, joint venture, limited partnership or
trust. The provisions of this Lease shall inure to the benefit of and be binding upon Landlord and
Tenant, and their respective successors, heirs and assigns, subject, however, in the case of
Tenant, to the provisions of Section 2.4 hereof. It is understood and agreed that the term
Landlord, as used in this Lease, means only the owner(s), or the lessee(s), from time to time of
the Building and/or the land underlying the Building so that in the event of any sale or sales of
the Building and/or the land underlying the Building, or of any lease thereof, the Landlord named
herein shall be and hereby is entirely freed and relieved of all covenants and obligations of
Landlord hereunder accruing thereafter to the extent of such sale or lease, and it shall be deemed
without further agreement that the purchaser, or the lessee, as the case may be, has assumed and
agreed, to the same extent, to carry out any and all covenants and obligations of Landlord
hereunder during the period such party has possession of all or such portion of the Building and/or
the land underlying the Building which it has purchased or leased. Should all of the land
underlying the Building and the entire Building be severed as to ownership by sale and/or lease,
then, unless the Tenant is otherwise notified to the contrary in writing, either the owner of the
entire Building or the lessee of the entire Building, as the case may be, which has the right to
lease space in the Building to tenants shall be deemed the Landlord. Tenant shall be bound to
any successor landlord for all the terms, covenants and conditions hereof and shall execute any
attornment agreement not in conflict herewith at the request of any successor landlord.
9.9
Georgia Law
. The laws of the State of Georgia shall govern the interpretation,
validity, performance and enforcement of this Lease.
9.10
Time is of the Essence
. Time is of the essence of this Lease. Unless
specifically provided otherwise, all references to terms of days or months shall be construed as
references to calendar days or calendar months, respectively.
9.11
Execution
. This Lease may be executed in any number of counterparts, each of
which shall be deemed an original and any of which shall be deemed to be complete in itself and may
be introduced into evidence or used for any purpose without the production of the other
counterparts.
9.12
Force Majeure
. A party to this Lease shall be excused from the performance of
its duties and obligations under this Lease, except obligations for the payment of money such as
Base Rental, for the period of delay, but in no event longer than ninety (90) days, caused by labor
disputes, governmental regulations, riots, war, terrorism, insurrection, acts of God or other
causes beyond the control of the party whose performance is being excused (but such causes shall
not include insufficiency of funds).
9.13
Mutual Warranty of Authority
. Landlord warrants to Tenant that Landlord is a
validly existing corporation under the laws of the State of Delaware, that its entry into and
performance of this Lease has been duly authorized, and that the party executing this Lease on its
behalf is duly authorized to do so. Tenant, if other than an individual, warrants to Landlord that
Tenant is a validly existing legal entity under the laws of the state of Georgia and that it is
duly qualified to do business in the State of Georgia, that its entry into and performance of this
Lease
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has been duly authorized, and that the officer(s), partner(s) or trustee(s), as applicable,
executing this Lease on its behalf are duly authorized to do so.
9.14
Parking Rights
. For use by Tenant and its employees and invitees, Landlord shall
provide for Tenants non-exclusive use a parking ration of 3 spaces per 1000 rentable square feet
which shall be surface spaces at no additional cost to Tenant.
9.15
Recordation of Lease
. This Lease is not in recordable form, and Tenant agrees
not to record or permit the recording of this Lease.
9.16
Hazardous Substances
.
(a) Tenant hereby covenants that Tenant shall not cause or permit any Hazardous
Substances to be placed, held, located or disposed of in, on or at the Premises or any part
thereof, and neither the Premises nor any part thereof shall ever be used as a dump site or
storage site (whether permanent or temporary) for any Hazardous Substances during the Lease
Term. Tenant hereby covenants that it shall dispose of all laboratory chemicals and medical
waste in accordance with all applicable laws, regulations and rules.
(b) Tenant hereby agrees to indemnify Landlord and hold Landlord harmless from and
against any and all losses, liabilities, including strict liability, damages, injuries,
expenses, including reasonable attorneys fees, costs of any settlement or judgment and
claims of any and every kind whatsoever paid, incurred or suffered by, or asserted against,
Landlord by any person or entity or governmental agency for, with respect to, or as a direct
or indirect result of, the presence on or under, or the escape, seepage, leakage, spillage,
discharge, emission, discharging or release from, the Premises of any Hazardous Substance,
laboratory chemicals and/or medical waste (including, without limitation, any losses,
liabilities, including strict liability, damages, injuries, expenses, including reasonable
attorneys fees, costs of any settlement or judgment or claims asserted or arising under the
Comprehensive Environmental Response, Compensation and Liability Act, any so-called federal,
state or local Superfund or Superlien laws, statute, law, ordinance, code, rule,
regulation, order or decree regulating, relating to or imposing liability, including strict
liability, substances or standards of conduct concerning any Hazardous Substance, laboratory
chemicals and/or medical waste), provided, however, that the foregoing indemnity is limited
to matters arising solely from Tenants violation of the covenant contained in subsection
(a) of this Section 9.16.
(c) For purposes of this Lease, Hazardous Substances shall mean and include those
elements or compounds which are contained in the list of hazardous substances now or
hereafter adopted by the United States Environmental Protection Agency (the EPA) or the
list of toxic pollutants designated by Congress or the EPA or which are now or hereafter
defined as hazardous, toxic, pollutant, infectious or radioactive by any other Federal,
state or local statute, law, ordinance, code, rule, regulation, order or decree regulating,
relating to, or imposing liability or standards of conduct concerning, any hazardous, toxic
or dangerous waste, substance or material, as now or at any time hereafter in effect.
(d) Landlord shall have the right but not the obligation, and without limitation of
Landlords rights under this Lease, to enter onto the Premises or to take such other actions
as it deems necessary or advisable to cleanup, remove, resolve or minimize the impact of, or
otherwise deal with, any Hazardous Substance following receipt of any notice from any person
or entity (including without limitation the EPA) asserting the existence of any Hazardous
Substance in, on or at the Premises or any part thereof which, if true, could result in an
order, suit or other action against Tenant or Landlord or both. All reasonable costs and
expenses incurred by Landlord in the exercise of any such rights, which costs and expenses
result from Tenants violation of the covenant contained in subsection (a) above, shall be
deemed additional rental under this Lease and shall be payable by Tenant upon demand.
(e) This Section 9.16 shall survive cancellation, termination or expiration of this
Lease.
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(f) Except as otherwise provided herein, Landlord assumes all responsibility for
compliance by the property/site/facility with all environmental laws, rules and regulations
and agrees to and does hereby hold Tenant harmless from any claims, liabilities, fines or
penalties which may be made or levied against Tenant on account thereof for any prelease
or pre-existing conditions. Landlord represents that the Premises are free from asbestos
and other hazardous substances.
9.17
Names
. Upon written notice to Tenant, Landlord reserves the right, from time to
time, to change the name of the development, the name of the Building and the street address of the
Building. Tenant shall not, without the prior written consent of Landlord, any name given the
development, the Building or any other deceptively similar name, or use any associated service mark
or logo of the development or the Building for any purpose other than Tenants business address.
9.18
Shared Communications Services
. Landlord may contract with a vendor (the Shared
Services Vendor) to make available to tenants of the Building certain shared communications
services. With respect to such shared communications services, if and so long as available,
Landlord and Tenant agree as follows:
(a) Tenant, at its election, may contract with Shared Services Vendor or any other
vendor for communications services. Tenant may make such election at its sole and absolute
discretion.
(b) Tenant acknowledges and agrees that Shared Services Vendor is an independent
contractor of Landlord and not Landlords employee, agent, partner or joint venturer and
Tenant waives any and all right Tenant may have or claim to have to assert the contrary.
(c) Tenant acknowledges and agrees that any cessation or interruption of shared
communications services or default by Shared Services Vendor under the terms and conditions
of Tenants agreement with Shared Services Vendor shall not constitute a default under this
Lease nor a constructive eviction by Landlord of Tenant. Tenant agrees that it shall not
abate or setoff against any amount of Base Rental, Rental Adjustment, additional rent or
other sum due under this Lease for any claim against Shared Services Vendor or for a default
under Tenants agreement with Shared Services Vendor. Tenant waives and releases Landlord
from any and all claims Tenant may have, now or in the future, against Landlord, if any,
that arise from or are related to the acts, omissions, negligence or gross negligence of
Shared Services Vendor or its agents and employees.
9.19
Ownership and Management Disclosure
. Landlord discloses to Tenant, and Tenant
acknowledges, that Landlord is the owner of record of the Building and the Premises.
9.20
Effect of Lease Termination
. No termination of this Lease by reason of exercise
of an optional right, lapse of time, failure of condition or election of a party to terminate shall
release or otherwise relieve either party from liability for breach of this Lease or from
performance of any contractual obligation provided herein accruing prior to such termination. The
possessory rights of Tenant, however, shall cease and expire as of the effective time of any such
termination.
9.21
Quiet Enjoyment
. Landlord covenants with Tenant that Tenant shall peaceably hold
and enjoy the Premises during the full term of this Lease and any extension and renewals upon
paying the rent and performing its covenants herein contained, subject only to the terms of this
Lease and any interests of record to which this Lease may be or become subject and subordinate.
15
IN WITNESS WHEREOF, the parties hereto have duly executed and sealed this Lease as of the date
and year first above stated.
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LANDLORD:
UCB, Inc., a Delaware corporation
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By:
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Name:
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Title:
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By:
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Name:
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Title:
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TENANT:
GeoVax, Inc., a Georgia corporation
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By:
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Name:
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Title:
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16
EXHIBIT A
FLOOR PLAN(S)
1900 LAKE PARK DRIVE
EXHIBIT B
RULES AND REGULATIONS
1. The sidewalks, and public portions of the Building, such as entrances, passages,
courts, elevators, vestibules, stairways, corridors or halls and the streets, alleys or
ways surrounding or in the vicinity of the Building shall not be obstructed, even
temporarily, or encumbered by Tenant or used for any purpose other than ingress and egress
to and from the Premises.
2. No awnings or other projections shall be attached to the outside walls of the
Building. No curtains, blinds, shades, louvered openings, tinted coating, film or screens
shall be attached to or hung in, or used in connection with, any window, glass surface or
door of the Premises, without the prior written consent of Landlord, unless installed by
Landlord.
3. No sign, advertisement, notice or other lettering shall be exhibited, inscribed,
painted or affixed by Tenant on any part of the outside of the Premises or Building or on
corridor walls or windows or other glass surfaces (including without limitation glass
storefronts). Signs on doors shall, at Tenants expense, be inscribed, painted or affixed
for each tenant by sign makers approved by Landlord. In the event of the violation of the
foregoing by Tenant, Landlord may remove same without any liability, and may charge the
expense incurred by such removal to Tenant.
4. The sashes, sash doors, skylights, windows, heating, ventilating and air
conditioning vents and doors that reflect or admit light and air into the halls,
passageways or other public places in the building shall not be covered or obstructed by
Tenant, nor shall any bottles, parcels or other articles be placed on the window sills.
5. No show cases or other articles shall be put in front of or affixed to any part of
the exterior of the Building, nor placed in the public halls, corridors or vestibules
without the prior written consent of Landlord.
6. The water and wash closets and other plumbing fixtures shall not be used for any
purposes other than those for which they were constructed, and no sweepings, rubbish, rags
or other substances shall be thrown therein. All damages resulting from any misuse of the
fixtures shall be borne by Tenant.
7. Tenant shall not in any way deface any part of the Premises or the Building. If
Tenant desires to use linoleum or other similar floor covering, an interlining of
builders deadening felt shall be first affixed to the floor, by a paste or other
material, soluble in water; the use of cement or other similar adhesive materials, which
are not water soluble, are expressly prohibited.
8. No vehicles or animals (other than seeing eye-dogs) of any kind shall be brought
into or kept in or about the Premises. No cooking shall be done or permitted by Tenant on
the Premises except in conformity to law and then only in the utility kitchen, if any, as
set forth in Tenants layout, which is to be primarily used by Tenants employees for
heating beverages and light snacks. Tenant shall not cause or permit any unusual or
objectionable odors to be produced upon or permeate from the Premises.
9. No space in the Building shall be used for manufacturing, distribution or for the
storage of merchandise or for the sale of merchandise, goods or property of any kind at
auction.
10. Tenant shall not make, or permit to be made, any unseemly or disturbing noises or
disturb or interfere with occupants of the Building or neighboring buildings or premises
or those having business with them, whether by the use of any musical instrument, radio,
talking machine, unmusical noise, whistling, singing or in any other way. Tenant shall not
throw anything out of the doors, windows or skylights or down the passageways. Tenant
shall not cause or permit any unseemly or disturbing activity or conduct to be visible
through any window, opening, doorway, glass storefront or other glass surface or any other
means of visibility that disturbs or interferes with (i) tenants or other occupants of the
building or their licensees or invitees or (ii) neighboring buildings or
premises or those having business with them, including without limitation, receptions,
parties, recreation and other activities of a social nature not directly related to
Tenants use of the Premises.
11. Neither Tenant, nor any of Tenants servants, employees, agents, visitors or
licensees, shall at any time bring or keep upon the Premises any inflammable, combustible
or explosive fluid or chemical substance, other than reasonable amounts of cleaning fluids
or solvents required in the normal operation of Tenants business.
12. No additional locks or bolts of any kind shall be placed upon any of the doors or
windows by Tenant, nor shall any changes be made in existing locks or the mechanism
thereof, without the prior written approval of Landlord and unless and until a duplicate
key is delivered to Landlord. Tenant shall, upon the termination of its tenancy, restore
to Landlord all keys of stores, offices and toilet rooms, either furnished to, or
otherwise procured by, Tenant, and in the event of the loss of any keys so furnished,
Tenant shall pay to Landlord the cost thereof.
13. Tenant shall not overload any floor. Tenant shall obtain Landlords consent before
bringing any safes, freight, furniture or bulky articles into the Building and Landlord
can specify to Tenant the location for the placement of such articles. All removals, or
the carrying in or out of any safes, freight, furniture or bulky matter of any description
must take place during the hours which Landlord or its agent may determine from time to
time. Landlord reserves the right to inspect all freight to be brought into the Building
and to exclude from the Building all freight which violates any of these Rules and
Regulations or the Lease of which these Rules and Regulations are a part.
14. Tenant shall not occupy or permit any portion of the Premises to be occupied, without
Landlords expressed prior written consent, as an office for a public stenographer or
typist, or for the possession, storage, manufacture or sale of liquor, narcotics, dope,
tobacco in any form, or as a barber or manicure shop, or as a public employment bureau or
agency, or for a public finance (personal loan) business; provided, however, nothing in
this sentence shall be deemed to prohibit Tenant or its employees or business invitees
from personal use of tobacco. Tenant shall not engage or pay any employees on the
Premises, except those actually working for Tenant on said premises, nor advertise for
laborers giving an address at the Building. Tenant shall not keep or utilize any jukebox,
billiard or pool table or other recreational device at or in the Premises.
15. Tenant agrees to employ such janitorial contractor as Landlord may from time to time
designate, for any waxing, polishing and other maintenance work of the Premises and of the
Tenants furniture, fixtures and equipment. Tenant agrees that it shall not employ any
other cleaning and maintenance contractor, nor any individual, firm or organization for
such purpose without Landlords prior written consent.
16. Landlord shall have the right to prohibit any advertising by Tenant which, in
Landlords opinion, tends to impair the reputation of the Building or its desirability as
a building for offices, and upon written notice from Landlord, Tenant shall refrain from
or discontinue such advertising.
17. Landlord reserves the right to exclude from the Building between the hours of 6:00
p.m. and 7:00 a.m. and at all hours on Sundays, legal holidays and after 2:00 p.m. on
Saturdays all persons who do not sign in and out on a register in the lobby of the
Building, showing the name of the person, the Premises visited and the time of arrival and
departure. All such persons entering or leaving the Building during such times may be
expected to be questioned by the Building security personnel as to their business in the
Building. Landlord shall in no case be liable for damages for any error with regard to the
admission to or exclusion from the Building of any person. In the case of invasion, mob,
riot, public excitement or other circumstances rendering such action advisable in the
Landlords opinion, Landlord reserves the right to prevent access to the Building during
the continuance of the same by such action as Landlord may deem appropriate, including
closing doors.
18. The Premises shall not be used for lodging or sleeping or for any immoral or illegal
purpose or for any other activity not appropriate, in Landlords sole discretion, to an
office building of the quality and stature of the Building.
19. The requirements of Tenant will be attended to only upon application at the office of
the Building. Building employees shall not perform any work or do anything outside of
their regular duties, unless under special instructions from the office of Landlord.
20. Canvassing, soliciting and peddling in the Building are prohibited and Tenant shall
cooperate to prevent the same.
21. There shall not be used in any space, or in the public halls of any building, either
by Tenant or by its jobbers or others, in the delivery or receipt of merchandise, any hand
trucks, except those equipped with rubber tires and side guards. No hand trucks shall be
used in passenger elevators.
22. Tenant, in order to obtain maximum effectiveness of the cooling system, shall lower
and/or close the blinds or drapes when suns rays fall directly on windows of Premises.
Tenant shall not remove the standard blinds installed in the Premises.
23. All paneling, rounds or other wood products not considered furniture shall be of fire
retardant materials. Before installation of any such materials, certification of the
materials fire retardant characteristics shall be submitted to Landlord or its agents, in
a manner satisfactory to Landlord.
24. Tenant shall not install any vending machines in the Building or Premises
without Landlords consent.
25. All articles and the arrangement style, color and general appearance thereof, in the
interior of the Premises that will be visible from the exterior thereof, including,
without limitation, window displays, advertising matter, signs, merchandise, furniture and
store fixtures, shall be subject to Landlords approval, and, in any case, shall be
maintained in keeping with the character and standards of the development of which the
Building is a part.
26. Landlord may waive any one or more of these Rules and Regulations for the benefit of
any particular Tenant or Tenants, but no such waiver by Landlord shall be construed as a
waiver of such Rules and Regulations in favor of any other Tenant or Tenants, nor prevent
Landlord from thereafter enforcing any such Rules and Regulations against any or all of
the Tenants of the Building.
27. Tenant shall abide by no-smoking restrictions in all areas within the Building, other
than spaces, designated or posted by Landlord as smoking areas.
28. These Rules and Regulations are in addition to, and shall not be construed to in any
way modify or amend, in whole or part, the terms, covenants, agreements and conditions of
the main text (including Special Stipulations) of the Lease, which text shall control in
the instance of conflict.
29. Landlord reserves the right to make such other and reasonable rules and regulations as
in its judgment may from time to time be needed for safety, care and cleanliness of the
Building, and for the preservation of good order therein. Such other Rules and Regulations
shall be effective upon written notification of Tenant.
EXHIBIT C
TENANT IMPROVEMENTS
BACKUP POWER OUTLET LIST
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Circuit
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Equipment
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ID
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Outlet Location
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Voltage
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Current
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ID
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Power
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Priority
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LP-28, LP-30
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360D
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208V
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15A
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Freezer
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2500
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Critical
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NC24
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360I
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208V
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15A
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Freezer
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2500
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Critical
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NC25
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360I
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208V
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15A
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Freezer
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2500
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Critical
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NC5
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360C
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120V
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20A
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Freezer
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1920
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Critical
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LP-1
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360A
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120V
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20A
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Roller bottle incubator
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2400
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High
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LP-13
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360D
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120V
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20A
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Refrigerator
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1300
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High
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LP-13
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360D
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120V
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20A
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Freezer
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600
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High
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LP-14
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360F
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120V
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20A
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Refrigerator
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300
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High
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LP-20
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360E
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|
120V
|
|
20A
|
|
Freezer
|
|
1265
|
|
High
|
LP-23
|
|
360D
|
|
120V
|
|
20A
|
|
Three incubators
|
|
1320
|
|
High
|
LP-3
|
|
360A
|
|
120V
|
|
20A
|
|
Chiller
|
|
1440
|
|
High
|
NC1
|
|
360A
|
|
120V
|
|
20A
|
|
Minitron incubator
|
|
1150
|
|
High
|
NC10
|
|
360D
|
|
120V
|
|
20A
|
|
Freezer
|
|
600
|
|
High
|
NC11
|
|
360D
|
|
120V
|
|
20A
|
|
Refrigerator
|
|
1000
|
|
High
|
NC14
|
|
360E
|
|
120V
|
|
20A
|
|
Refrigerator
|
|
1265
|
|
High
|
NC2
|
|
360A
|
|
120V
|
|
20A
|
|
Minitron incubator
|
|
1150
|
|
High
|
NC3
|
|
360A
|
|
120V
|
|
20A
|
|
Bioreactor
|
|
1300
|
|
High
|
NC4
|
|
360A
|
|
120V
|
|
20A
|
|
Refrigerator
|
|
1000
|
|
High
|
LP-12
|
|
360F
|
|
120V
|
|
20A
|
|
Incubator
|
|
400
|
|
High
|
NC21
|
|
360H
|
|
120V
|
|
20A
|
|
Manifold
|
|
120
|
|
High
|
LP-35
|
|
360A
|
|
120V
|
|
20A
|
|
Incubator
|
|
400
|
|
High
|
L3-15
|
|
360F
|
|
120V
|
|
20A
|
|
Laminar flow hood
|
|
1725
|
|
Low
|
LP-6
|
|
360E
|
|
120V
|
|
20A
|
|
FACSCanto
|
|
500
|
|
Low
|
Total connected Critical-priority load: 9420 W
Total connected High-priority load: 17,010 W
Total connected Low-priority load: 2225 W
Total connected Critical- & High-priority load: 26,430 W
Overall total connected load: 28,655 W
ELECTRICAL IMPROVEMENTS LIST
|
|
|
|
|
Improvement description
|
|
Circuit ID*
|
|
Location of outlet
|
|
Install 30-kW generator
|
|
NA
|
|
NA
|
Add 120V-20A circuit
|
|
NC1
|
|
Room 360A back wall
|
Add 120V-20A circuit
|
|
NC2
|
|
Room 360A back wall
|
Add 120V-20A circuit
|
|
NC3
|
|
Room 360A right wall
|
Convert circuit to 120V-20A
|
|
LP-3
|
|
Room 360A right wall
|
Add 120V-20A circuit
|
|
NC4
|
|
Room 360A front wall
|
Add 120V-20A circuit
|
|
NC5
|
|
Hallway 360C end
|
Add 120V-20A circuit
|
|
NC6
|
|
Room 360B, 1
st
wall
|
Add 120V-20A circuit
|
|
NC7
|
|
Room 360B, 2
nd
wall
|
Add 120V-20A circuit
|
|
NC8
|
|
Room 360B, 3
rd
wall
|
Add 120V-20A circuit
|
|
NC9
|
|
Room 360B, 4
th
wall
|
Add 120V-20A circuit
|
|
NC10
|
|
Room 360D, by flammable cabinet
|
Adapt circuit to 208V-15A (NEMA 6-15P)
|
|
LP-28,30
|
|
Room 360D, current chiller location
|
Wire LP-11 outlets in 360A to new circuit
|
|
NC12
|
|
Room 360A
|
Add 120V-20A circuit
|
|
NC11
|
|
Room 360D, near chiller
|
Add 120V-20A circuit
|
|
NC13
|
|
Room 360D, corner
|
Add 120V-20A circuit
|
|
NC14
|
|
Room 360E, blank wall
|
Add 208V-15A circuit
|
|
NC15
|
|
Room 360E, wall facing office
|
Add 120V-20A circuit
|
|
NC16
|
|
Room 360E, wall facing office
|
Add 120V-20A circuit
|
|
NC17
|
|
Room 360E, along bench
|
Add 120V-20A circuit
|
|
NC18
|
|
Room 360E, along bench
|
Add 120V-20A circuit
|
|
NC19
|
|
Room 360E, along bench
|
Add 120V-20A circuit
|
|
NC20
|
|
Room 360E, along bench
|
Add 120V-20A circuit
|
|
NC21
|
|
Room 360H, oven corner
|
Add 120V-20A circuit
|
|
NC22
|
|
Room 360H, next to sink
|
Add 208V circuit (Current TBD)
|
|
NC23
|
|
Room 360H, current fume hood location
|
Add 208V-15A circuit
|
|
NC24
|
|
Room 360I, back wall
|
Add 208V-15A circuit
|
|
NC25
|
|
Room 360I, back wall
|
*NCx indicates New Circuit x
PLUMBING IMPROVEMENTS LIST
|
|
|
Location
|
|
Description
|
Room 360A
|
|
Remove safety shower and eyewash
|
Room 360A
|
|
Add CO
2
valves with hose barb for incubators
|
Room 360A
|
|
Replace all 3/8 CO
2
pipes (currently labeled
|
|
|
for nitrogen) with 1/2 copper
|
Rooms 360A and 370A
|
|
Run two
1
/
2
copper pipes (one for air and
|
|
|
one for O
2
) with shutoff valves and hose barbs at
|
|
|
both ends between source (370A) and point of
|
|
|
use (360A).
|
Room 360D
|
|
Adapt existing Nitrogen plumbing to four hoods
|
|
|
to feed three incubators with CO
2
(hose barb
|
|
|
fittings)
|
Room 360F
|
|
Add CO
2
valve with hose barb for incubator
|
Room 360F
|
|
Cut and cap nitrogen pipe on both sides of
|
|
|
exterior wall
|
Room 360F
|
|
Add sink with foot control
|
Room 360H
|
|
Run CO
2
pipe from ceiling (using pipes
|
|
|
currently marked for nitrogen) down wall to
|
|
|
connect to CO
2
manifold
|
Room 360H
|
|
Connect deionized water system to cold water
|
|
|
supply
|
Room 360H
|
|
Connect deionized water system to dishwasher
|
Room 360H
|
|
Connect deionized water system to autoclave
|
Room 360H
|
|
Connect autoclave drain to existing drain pipe
|
Room 360H
|
|
Connect autoclave to cold water supply
|
NOTE: NEED TO DISCUSS HVAC REQUIREMENTS
POSITIVE VS. NEGATIVE PRESSURE IN ROOMS AND
ADDITION OF VENTILATION OR HEAT SINKS TO DEAL WITH HEAT GENERATED BY EQUIPMENT
CARPENTRY AND MOVING IMPROVEMENTS LIST
|
|
|
Location
|
|
Description
|
Room 360A
|
|
Remove entire bench along left wall
|
Room 360A
|
|
Remove entire bench along back wall
|
Room 360B
|
|
Remove carpet and replace with tile
|
Room 360C
|
|
Remove carpet and replace with tile
|
Hallway 360C
|
|
Add door and small section of wall to separate hallway (lab)
|
|
|
from office
|
Room 360A
|
|
Add adjustable track shelving along right wall
|
Room 360D
|
|
Remove 7 fume hoods
|
Room 360D
|
|
Install adjustable shelving along back wall and open bench
|
Room 360D
|
|
Remove small section of bench between the 4-hood bench
|
|
|
and the bench along the back wall. Remove chiller.
|
Room 360D
|
|
Remove all casework under one hood (the one next to the
|
|
|
walk-in hood)
|
Room 360D
|
|
Remove all casework under one hood (in corner of lab)
|
Room 360D
|
|
Rotate flammable cabinet 90°
|
Room 360F
|
|
Remove 3 fume hoods
|
Room 360K
|
|
Tile floor (currently bare concrete)
|
Rooms 360G and 370B
|
|
Add wall to separate lab (hallway) from office
|
Rooms 360G and 360H
|
|
Remove flammable cabinet and move to storage. Make
|
|
|
passthrough (double door size) between glasswash room
|
|
|
360H and hallway 360G.
|
Room 360H
|
|
Remove bench in corner of glasswash room 360H (location
|
|
|
currently marked as oven.
|
Room 360H
|
|
Remove 1 fume hood
|
Room 360H
|
|
Remove all casework along wall that currently has fume
|
|
|
hood
|
Room 360H
|
|
Remove one glassware cabinet (the one closest to the fume
|
|
|
hood) and move to hallway 360C.
|
Rooms 370A C
|
|
Move two cubicles from 370A to 370B & 370C
|
Room 360F
|
|
Remove small bench
|