þ
|
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
¨
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
Delaware
|
91-2003490
|
|
(State
or other jurisdiction
of
incorporation or organization)
|
(IRS
Employer
Identification
Number)
|
|
145
Union Square Drive, New Hope, Pennsylvania
|
18938
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Title
of each class
|
Name
of each exchange on which registered
|
||
None
|
None
|
Large
accelerated filer
¨
|
Accelerated
filer
¨
|
Non-accelerated
filer
¨
|
Smaller
Reporting Company
þ
|
PART
I
|
||
ITEM 1.
|
BUSINESS
|
2
|
ITEM 1A.
|
RISK
FACTORS
|
7
|
ITEM 1B.
|
UNRESOLVED
STAFF COMMENTS
|
13
|
ITEM 2.
|
PROPERTIES
|
13
|
ITEM 3.
|
LEGAL
PROCEEDINGS
|
13
|
ITEM 4.
|
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS
|
13
|
PART
II
|
||
ITEM 5.
|
MARKET
FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES
|
13
|
ITEM 6.
|
SELECTED
FINANCIAL DATA
|
14
|
ITEM 7.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
14
|
ITEM 7A.
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
18
|
ITEM 8.
|
FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA
|
18
|
ITEM 9.
|
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTS ON ACCOUNTING AND FINANCIAL
DISCLOSURES
|
18
|
ITEM 9A.
|
CONTROLS
AND PROCEDURES
|
18
|
ITEM 9B.
|
OTHER
INFORMATION
|
18
|
PART
III
|
||
ITEM 10.
|
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
19
|
ITEM 11.
|
EXECUTIVE
COMPENSATION
|
21
|
ITEM 12.
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
|
24
|
ITEM 13.
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
|
25
|
ITEM 14.
|
PRINCIPAL
ACCOUNTING FEES AND SERVICES
|
25
|
PART
IV
|
||
ITEM 15.
|
EXHIBITS,
FINANCIAL STATEMENT SCHEDULES
|
26
|
EXHIBIT
INDEX
|
27
|
|
SIGNATURES
|
29
|
•
|
the
status and anticipated timing of regulatory review and approval, if any,
for our product candidates;
|
•
|
our
product development efforts, including results from clinical
trials;
|
•
|
anticipated
dates of clinical trial initiation, completion and announcement of trial
results by us;
|
•
|
anticipated
clinical trial results and regulatory submission dates for our product
candidates by us;
|
•
|
analysis
and interpretation of data by regulatory
authorities;
|
•
|
anticipated
operating losses and capital
expenditures;
|
•
|
estimates
of the market opportunity and the commercialization plans for our product
candidates;
|
•
|
our
intention to rely on third parties for
manufacturing;
|
•
|
the
scope and duration of intellectual property protection for our
products;
|
•
|
our
ability to raise additional capital;
and
|
•
|
our
ability to acquire or in-license products or product
candidates;
|
ITEM
1.
|
BUSINESS
|
|
·
|
Analgesic/anti-inflammatory
preparations, ranging from simple aspirin to the COX-2
inhibitors;
|
·
|
Immunosuppressive/antineoplastic
drugs, including azathioprine and
methotrexate;
|
·
|
TNF
(Tumor Necrosis Factor) inhibitors, also known as anti-TNF therapy,
currently represented by etanercept (Enbrel®), infliximab (Remicade®), and
adalimumab (Humira®);
|
·
|
Soluble
Interleukin-l (IL-I) Receptor Therapy, Anakinra
(Kineret®).
|
·
|
Costimulatory
molecule inhibitor (abatacept, Orencia® Anti CD20 therapy, rituximab
(Rituxan®)
|
·
|
“Immunoadsorption
Therapy,” also known as Prosorba®, now in limited use in Europe and the
United States, entailing weekly sessions during which a patient’s blood is
separated and passed through a molecular filter. The use of such extreme
treatment modalities emphasizes the unmet need for a new treatment for
patients who cannot respond to existing
therapies.
|
·
|
completion
of extensive preclinical laboratory tests, preclinical animal studies and
formulation studies, all performed in accordance with the FDA’s Good
Laboratory Practice or GLP regulations and other
regulations;
|
·
|
submission
to the FDA of an IND application which must become effective before
clinical trials may begin;
|
·
|
performance
of multiple adequate and well-controlled clinical trials meeting FDA
requirements to establish the safety and efficacy of the product candidate
for each proposed indication;
|
·
|
submission
of a Biological License Application or BLA to the
FDA;
|
·
|
satisfactory
completion of an FDA pre-approval inspection of the manufacturing
facilities at which the product candidate is produced, and potentially
other involved facilities as well, to assess compliance with cGMP,
regulations and other applicable regulations;
and
|
·
|
the
FDA review and approval of the BLA prior to any commercial marketing, sale
or shipment of the drug.
|
·
|
Phase I clinical trials
are initially conducted in a limited population to test the drug
candidate for safety, dose tolerance, absorption, metabolism, distribution
and excretion in healthy humans or, on occasion, in patients, such as
cancer patients. In some cases, particularly in cancer trials, a sponsor
may decide to conduct what is referred to as a “Phase Ib” evaluation,
which is a second safety-focused Phase I clinical trial typically
designed to evaluate the impact of the drug candidate in combination with
currently FDA-approved drugs.
|
·
|
Phase II clinical trials
are generally conducted in a limited patient population to identify
possible adverse effects and safety risks, to determine the efficacy of
the drug candidate for specific targeted indications and to determine dose
tolerance and optimal dosage. Multiple Phase II clinical trials may
be conducted by the sponsor to obtain information prior to beginning
larger and more expensive Phase III clinical trials. In some cases, a
sponsor may decide to conduct what is referred to as a “Phase IIb”
evaluation, which is a second, confirmatory Phase II clinical trial
that could, if positive and accepted by the FDA, serve as a pivotal
clinical trial in the approval of a drug
candidate.
|
·
|
Phase III clinical
trials
are commonly referred to as pivotal trials. When
Phase II clinical trials demonstrate that a dose range of the drug
candidate is effective and has an acceptable safety profile,
Phase III clinical trials are undertaken in large patient populations
to further evaluate dosage, to provide substantial evidence of clinical
efficacy and to further test for safety in an expanded and diverse patient
population at multiple, geographically dispersed clinical trial
sites.
|
·
|
Priority
Review.
As explained above, a drug candidate may be eligible
for a six-month priority review. The FDA assigns priority review status to
an application if the drug candidate provides a significant improvement
compared to marketed drugs in the treatment, diagnosis or prevention of a
disease. A fast track drug would ordinarily meet the FDA’s criteria for
priority review, but may also be assigned a standard review. We do not
know whether any of our drug candidates will be assigned priority review
status or, if priority review status is assigned, whether that review or
approval will be faster than conventional FDA procedures, or that the FDA
will ultimately approve the
drug.
|
·
|
Accelerated
Approval.
Under the FDA’s accelerated approval
regulations, the FDA is authorized to approve drug candidates that have
been studied for their safety and efficacy in treating serious or
life-threatening illnesses and that provide meaningful therapeutic benefit
to patients over existing treatments based upon either a surrogate
endpoint that is reasonably likely to predict clinical benefit or on the
basis of an effect on a clinical endpoint other than patient survival or
irreversible morbidity. In clinical trials, surrogate endpoints are
alternative measurements of the symptoms of a disease or condition that
are substituted for measurements of observable clinical symptoms. A drug
candidate approved on this basis is subject to rigorous post-marketing
compliance requirements, including the completion of Phase IV or
post-approval clinical trials to validate the surrogate endpoint or
confirm the effect on the clinical endpoint. Failure to conduct required
post-approval studies with due diligence, or to validate a surrogate
endpoint or confirm a clinical benefit during post-marketing studies, may
cause the FDA to seek to withdraw the drug from the market on an expedited
basis. All promotional materials for drug candidates approved under
accelerated regulations are subject to prior review by the
FDA
|
·
|
the
progress of pre-clinical development and laboratory testing and clinical
trials;
|
·
|
time
and costs involved in obtaining regulatory
approvals;
|
·
|
the
number of indications we
pursue;
|
·
|
costs
in filing and prosecuting patent applications and enforcing or defending
patent claims; and
|
·
|
the
establishment of selected strategic alliances and activities required for
product commercialization.
|
·
|
unforeseen
safety issues;
|
·
|
determination
of dosing issues;
|
·
|
lack
of effectiveness during clinical
trials
|
·
|
slower
than expected rates of patient
recruitment
|
·
|
inability
to monitor patients adequately or after treatment;
and
|
·
|
inability
or unwillingness of medical investigators to follow our clinical
protocols.
|
·
|
Contract
manufacturers are obliged to operate in accordance with FDA-mandated
cGMPs. Their failure to establish and follow cGMPs and to
document their adherence to such practices may lead to significant delays
in the availability of material for clinical study and may delay or
prevent filing or approval of marketing applications for our products.
Additionally, failure to achieve and maintain high manufacturing
standards, including the incidence of manufacturing errors, could result
in patient injury or death, product recalls or withdrawals, delays or
failures in product testing or delivery, cost overruns or other problems
that could seriously hurt our
business.
|
·
|
It
may be difficult or impossible for us to find replacement manufacturers
quickly on acceptable terms, or at all. For example, we have
initially relied on a single contract drug substance manufacturer,
Eurogentec S.A., to produce PRTX-100. Changing this
manufacturer, or changing the manufacturer for any other products we
develop, may be difficult and expensive. The number of
potential manufacturers is limited, and changing manufacturers may require
confirmation of the analytical methods of the manufacturing processes and
procedures in accordance with FDA-mandated cGMPs. Such
confirmation of the analytical methods may be costly and
time-consuming.
|
·
|
Our
contract manufacturers may not perform as agreed or may not remain in the
contract manufacturing business for the time required to produce, store
and distribute our products
successfully.
|
·
|
announcements
of the introduction of new products by us or our
competitors;
|
·
|
market
conditions in the pharmaceutical and biotechnology
sectors;
|
·
|
rumors
relating to us or our
competitors;
|
·
|
litigation
or public concern about the safety of our potential
products;
|
·
|
our
quarterly operating results;
|
·
|
deviations
in our operating results from the estimates of securities
analysts;
|
·
|
FDA
or international regulatory actions;
and
|
·
|
depth
and liquidity of the market for our common
stock;
|
·
|
inability
to raise adequate financing.
|
ITEM
1B.
|
UNRESOLVED
STAFF COMMENTS
|
ITEM
5.
|
MARKET
FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY
SECURITIES
|
High
|
Low
|
|||||||
2008
|
||||||||
First
Quarter
|
$ | 1.85 | $ | 1.20 | ||||
Second
Quarter
|
1.50 | 1.05 | ||||||
Third
Quarter
|
1.50 | 1.01 | ||||||
Fourth
Quarter
|
1.18 | 0.68 | ||||||
2009
|
||||||||
First
Quarter
|
$ | 0.92 | $ | 0.36 | ||||
Second
Quarter
|
1.01 | 0.16 | ||||||
Third
Quarter
|
0.30 | 0.04 | ||||||
Fourth
Quarter
|
0.30 | 0.02 |
ITEM
6.
|
SELECTED
FINANCIAL DATA
|
ITEM
7.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
Year
Ended
May
31, 2009
|
Year
Ended
May
31, 2008
|
Year
Ended
May
31, 2007
|
||||||||||
Net
loss
|
$ | (7,230,206 | ) | $ | (10,490,758 | ) | $ | (8,451,942 | ) | |||
Adjustments
for non-cash operating items
|
803,067 | 1,188,064 | 1,996,715 | |||||||||
Net
cash operating loss
|
$ | (6,427,139 | ) | $ | (9,302,694 | ) | $ | (6,455,227 | ) | |||
Net
change in assets and liabilities
|
421,622 | 199,349 | (120,785 | ) | ||||||||
Net
cash used in operating activities
|
$ | (6,005,517 | ) | $ | (9,103,345 | ) | $ | (6,576,012 | ) | |||
Net
cash provided/(used) in investing activities
|
$ | 200,000 | $ | — | $ | (403,674 | ) | |||||
Net
cash provided by financing activities
|
$ | — | $ | — | $ | 14,533,295 |
|
·
|
Employee
Agreements-Officers
. As previously disclosed in our Form 10-Q filed
on April 14, 2009, Messers. Kane and Rose voluntarily terminated their
employment. Messers. Kane and Rose remain the CEO and CFO, respectively,
of the Company. As of the date of this report, while Mr. Rose has not
accepted full time employment elsewhere, Mr. Kane is now currently also
the Chairman and CEO of Patient Safety Technologies,
Inc.
|
|
·
|
Directors
Agreements
. To attract and retain qualified candidates
to serve on the board of directors, we have previously entered into
agreements with G. Kirk Raab, Chairman of the Board, Carleton A. Holstrom,
Chairman of the Audit Committee, Eugene A. Bauer, MD, Peter G. Tombros,
Frank M. Dougherty and Thomas P. Stagnaro under which Messrs. Raab,
Holstrom, Dr. Bauer, Mr. Tombros, Mr. Dougherty and Mr. Stagnaro receive
aggregate annual cash payments aggregating $150,000, $20,000, $20,000,
$20,000, $20,000 and $20,000 respectively, as directors’
fees. Pursuant to a Cash Waiver & Option Termination
Agreement dated April 10, 2009, each of the outside Directors of the
Company, G. Kirk Raab, Carleton A. Holstrom, Eugene A. Bauer, MD, Peter G.
Tombros, Frank M. Dougherty and Thomas P. Stagnaro who are currently
entitled to a Director's cash fee agreed to waive all such accrued and
unpaid Director cash fees and terminate any rights for further cash fees.
For Mr. Raab, those cash fees ceased as of April 1, 2009. For the other
Directors, those cash fees ceased as of February 1, 2009. In addition,
each of these Directors agreed to terminate immediately all of their
existing stock options in the Company (vested and
unvested).
|
|
·
|
Operating Lease – Office
Space
. We have entered into a three-year operating lease in New
Hope, PA for 3,795 square feet of office and laboratory space. The lease
commenced on January 9, 2004 and was originally to expire on February 28,
2007. On November 18, 2005, we modified the existing lease
which added an additional 2,147 square feet and extended the lease term to
January 31, 2008 and on April 30, 2007, we modified the existing lease and
extended the lease term to January 31,
2010.
|
|
·
|
Operating Lease –
Copier
. We entered into a sixty-three month operating
lease for a multi-function copier. The lease commenced on December 16,
2004 and will expire on March 16,
2010.
|
Name
|
Age
|
Position
and Offices Held with the Company
|
||
G.
Kirk Raab + #
|
73
|
Chairman
of the Board
|
||
Steven
H. Kane +
|
56
|
President,
Chief Executive Officer and Director
|
||
Marc
L. Rose, CPA
|
44
|
Vice
President, Chief Financial Officer, Treasurer and Corporate
Secretary
|
||
Eugene
A. Bauer, M.D. #
|
67
|
Director
|
||
Frank
M. Dougherty + #
|
61
|
Director
|
||
Carleton
A. Holstrom *
|
73
|
Director
|
||
Dinesh
Patel, Ph.D. *
|
58
|
Director
|
||
Thomas
P. Stagnaro *
|
66
|
Director
|
||
Peter
G. Tombros #
|
|
67
|
|
Director
|
Name and Principal
Position
|
Year
|
Salary
($) (1)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($) (2)
(3)
|
Non-Equity
Incentive
Plan
Compensation
($)
|
Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
|
All
Other
Compensation
(4)
|
Total
($)
|
|||||||||||||||||||||||||
Steven
H. Kane,
|
||||||||||||||||||||||||||||||||||
President
and
|
2009
|
350,000 | — | — | 107,040 | — | — | 30,021 | 487,061 | |||||||||||||||||||||||||
Chief
Executive Officer
|
2008
|
400,000 | 75,000 | — | — | — | — | 29,745 | 504,745 | |||||||||||||||||||||||||
Marc
L. Rose, CPA,
|
||||||||||||||||||||||||||||||||||
Vice
President and
|
2009
|
201,250 | — | — | 35,680 | — | — | — | 236,930 | |||||||||||||||||||||||||
Chief
Financial Officer
|
2008
|
230,000 | 40,000 | — | 37,644 | — | — | — | 307,644 |
(1)
|
In
January 2008 and 2009, the Compensation Committee did not authorize salary
increases for Messrs. Kane and Rose for calendar years 2008 or 2009,
respectively. Effective, April 16, 2009, salary payments ceased
under Messrs. Kane and Rose Employment Agreements pursuant to Settlement
Agreements as disclosed in our Form 10-Q filed on April 14,
2009.
|
(2)
|
In
July 2008, the Compensation Committee granted the following option awards:
Mr. Kane 300,000 and Mr. Rose 100,000. In January 2008, the Compensation
Committee granted the following option awards: Mr. Rose
40,000.
|
(3)
|
Amounts
are calculated in accordance with the provisions of Statement of Financial
Accounting Standards (“SFAS”) No. 123R “Share-based Payment.” See
Note 3. of the financial statements of the Company’s Annual Report for the
year ended May 31, 2009 regarding assumptions underlying valuation of
equity awards.
|
(4)
|
This
column represents the dollar amount for the Company paid portion of Mr.
Kane’s health insurance that is outside the Company’s standard insurance
provided to all other employees.
|
Option Awards
|
Stock Awards
|
||||||||||||||||||||||||||||||||
Name
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
Option
Exercise
Price ($)
|
Option
Expiration
Date
|
Number of
Shares or
Units of
Stock That
Have Not
Vested (#)
|
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested ($)
(1)
|
Equity Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested (#)
|
Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
|
||||||||||||||||||||||||
Steven
H. Kane, President and Chief Executive Officer
|
863,242 | — | — | $ | 1.50 |
12/16/2012
|
— | — | — | — | |||||||||||||||||||||||
100,000 | — | — | 1.50 |
8/13/2013
|
— | — | — | — | |||||||||||||||||||||||||
75,000 | — | — | 2.13 |
1/22/2014
|
— | — | — | — | |||||||||||||||||||||||||
175,000 | — | — | 2.55 |
1/13/2015
|
— | — | — | — | |||||||||||||||||||||||||
25,000 | — | — | 2.65 |
10/25/2015
|
— | — | — | — | |||||||||||||||||||||||||
25,000 | — | — | 2.87 |
10/24/2016
|
— | — | — | — | |||||||||||||||||||||||||
100,000 | 41,668 | (1) | — | 2.30 |
1/18/2017
|
— | — | — | — | ||||||||||||||||||||||||
300,000 | 237,500 | (2 ) | — | 0.45 |
7/24/2018
|
— | — | — | — | ||||||||||||||||||||||||
Marc
L. Rose, CPA, Vice President and Chief Financial Officer
|
100,000 | — | — | 2.55 |
1/13/2015
|
— | — | — | — | ||||||||||||||||||||||||
13,571 | 566 | (3) | — | 2.80 |
7/29/2015
|
— | — | — | — | ||||||||||||||||||||||||
30,000 | 5,001 | (4) | — | 2.85 |
1/11/2016
|
— | — | — | — | ||||||||||||||||||||||||
50,000 | 17,709 | (5) | — | 2.87 |
10/24/2016
|
— | — | — | — | ||||||||||||||||||||||||
50,000 | 20,834 | (6) | — | 2.30 |
1/18/2017
|
— | — | — | — | ||||||||||||||||||||||||
40,000 | 26,664 | (7) | — | 1.30 |
1/17/2018
|
— | — | — | — | ||||||||||||||||||||||||
100,000 | 79,165 | (8) | — | 0.45 |
7/24/2018
|
— | — | — | — |
|
(1)
|
These
stock options, granted on January 18, 2007, vest over four years at the
rate of 1/48
th
per month.
|
|
(2)
|
These
stock options, granted on July 24, 2008, vest over four years at the rate
of 1/48
th
per month.
|
|
(3)
|
These
stock options, granted on July 29, 2005 vest over four years at the rate
of 1/48
th
per month.
|
|
(4)
|
These
stock options, granted on January 11, 2006, vest over four years at the
rate of 1/48
th
per month.
|
|
(5)
|
These
stock options, granted on October 24, 2006, vest over four years at the
rate of 1/48
th
per month.
|
|
(6)
|
These
stock options, granted on January 18, 2007, vest over four years at the
rate of 1/48
th
per month.
|
|
(7)
|
These
stock options, granted on January 17, 2008, vest over four years at the
rate of 1/48
th
per month.
|
|
(8)
|
These
stock options, granted on July 24, 2008, vest over four years at the rate
of 1/48
th
per month.
|
Name
|
Fees Earned
or
Paid in Cash
($)
|
Stock
Awards
($)
|
Option
Awards
($) (1)
|
Non-Equity
Incentive Plan
Compensation
($)
|
Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
|
All
Other
Compensation
($)
|
Total
($)
|
|||||||||||||||||||||
G.
Kirk Raab (2)
|
125,000 | — | 53,520 | — | — | — | 178,520 | |||||||||||||||||||||
Eugene
A. Bauer, M.D.(3)
|
13,336 | — | 53,520 | — | — | — | 66,856 | |||||||||||||||||||||
Frank
M. Dougherty (4)
|
8,335 | — | 53,520 | — | — | — | 61,855 | |||||||||||||||||||||
Carleton
A. Holstrom (5)
|
13,336 | — | 53,520 | — | — | — | 66,856 | |||||||||||||||||||||
Dinesh
Patel, Ph.D. (6)
|
— | — | 108,870 | — | — | — | 108,870 | |||||||||||||||||||||
Thomas
P. Stagnaro (7)
|
8,335 | — | 53,520 | — | — | — | 61,855 | |||||||||||||||||||||
Peter
G. Tombros (8)
|
13,336 | — | 53,520 | — | — | — | 66,856 |
|
(1)
|
These
stock options, granted on July 24, 2008, 25% vested immediately and the
remainder were scheduled to vest at 1/36
th
per moth starting in July 2009. and are determined in accordance with FAS
123R.
|
|
(2)
|
As
of May 31, 2009, Mr. Raab has 0 stock options
outstanding.
|
|
(3)
|
As
of May 31, 2009, Dr. Bauer has 0 stock options
outstanding.
|
|
(4)
|
As
of May 31, 2009, Mr. Dougherty has 0 stock options
outstanding.
|
|
(5)
|
As
of May 31, 2009, Mr. Holstrom has 0 stock options
outstanding.
|
|
(6)
|
As
of May 31, 2009, Dr. Patel has 150,000 stock options outstanding and
37,500 are vested and exercisable.
|
|
(7)
|
As
of May 31, 2009, Mr. Stagnaro has 0 stock options
outstanding.
|
|
(8)
|
As
of May 31, 2009, Mr. Tombros has 0 stock options
outstanding.
|
ITEM 12.
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
|
Shares Beneficially Owned
|
||||||||
Name and Title
|
Number
|
Percent
|
||||||
G.
Kirk Raab, Chairman of the Board and Director
|
— | * | ||||||
Steven
H. Kane, Chief Executive Officer, President and Director
|
1,647,080 | (1) | 5.5 | % | ||||
Marc
L. Rose, CPA, Vice President, Chief Financial Officer, Treasurer and
Corporate Secretary
|
302,827 | (2) | 1.0 | % | ||||
Eugene
A. Bauer, M.D., Director
|
— | * | ||||||
Frank
M. Dougherty, Director
|
360,581 | (3) | 1.3 | % | ||||
Carleton
A. Holstrom, Director
|
20,000 | * | ||||||
Thomas
P. Stagnaro, Director
|
4,000 | * | ||||||
Peter
G. Tombros, Director
|
50,000 | (4) | * | |||||
Dinesh
Patel, Ph.D., Director
|
3,749,914 | (5) | 12.9 | % | ||||
vSpring
SBIC, L.P.
Attn:
Dinesh Patel
2795
E. Cottonwood Pkwy, Suite 360
Salt
Lake City, UT 84121
|
3,749,914 | (6) | 12.9 | % | ||||
John
E. Doherty, Former Director
|
2,961,549 | (7) | 10.3 | % | ||||
All
officers and directors as a group (7 persons)
|
6,134,402 | (8) | 20.0 | % |
|
(1)
|
Includes
options to purchase 1,423,659 shares of our common stock and warrants to
purchase 7,778 shares of our common stock exercisable within 60 days of
August 24, 2009.
|
|
(2)
|
Includes
options to purchase 287,827 shares of our common stock exercisable within
60 days of August 24, 2009.
|
|
(3)
|
Includes
warrants to purchase 3,778 shares of our common stock exercisable within
60 days of August 24, 2009.
|
|
(4)
|
Includes
warrants to purchase 10,000 shares of our common stock exercisable within
60 days of August 24, 2009.
|
|
(5)
|
Includes
options to purchase 37,500 shares of our common stock and warrants to
purchase 376,667 shares of our common stock exercisable within 60 days of
August 24, 2009.
|
|
(6)
|
Includes
options to purchase 37,500 shares of our common stock and warrants to
purchase 376,667 shares of our common stock exercisable within 60 days of
August 24, 2009.
|
|
(7)
|
Includes
options to purchase 10,000 shares of our common stock and warrants to
purchase 27,778 shares of our common stock exercisable within 60 days of
August 24, 2009.
|
|
(8)
|
Includes
options to purchase 1,748,986 shares of our common stock and warrants to
purchase 398,223 shares of our common stock exercisable within 60 days of
August 24, 2009.
|
Plan category
|
Number of securities to be
issued upon exercise of
outstanding options, warrants
and rights
|
Weighted-average exercise
price of outstanding options,
warrants and rights
|
Number of securities remaining
available for future issuance
under equity compensation
plans (excluding securities
reflected in column (a)
|
|||||||||
(a)
|
(b)
|
(c)
|
||||||||||
Equity
compensation plans approved by security holders – 2003 Stock Option
Plan
|
1,939,890 | $ | 1.63 | 2,556,110 | ||||||||
Equity
compensation plans not approved by security holders – Stand Alone Option
Grants
|
1,356,922 | $ | 1.48 | — | ||||||||
Total
|
3,296,812 | $ | 1.57 | 2,556,110 |
|
(a)
|
1.
Financial Statements
|
|
(b)
|
Exhibits
|
2.1
|
Stock
Purchase Agreement among the Company, Don Hanosh and Enerdyne Corporation,
dated December 1999
|
Incorporated
by reference, to Exhibit 2.1 to the Company’s 10-SB filing on December 6,
1999
|
|
2.2
|
Merger
Agreement and Plan of Re-organization between the Company and Enerdyne
Corporation
|
Incorporated
by reference, to Exhibit 2.2 to the Company’s 10-SB filing on December 6,
1999
|
|
2.3
|
Plan
of Merger and Agreement between Protalex, Inc., a New Mexico corporation
and Protalex, Inc. a Delaware Corporation
|
Incorporated
by reference, to Exhibit 2.1 to the Company’s 8-K filing on December 6,
2004
|
|
3.1
|
Certificate
of Incorporation of the Company
|
Incorporated
by reference, to Exhibit 3.1 to the Company’s 8-K filing on December 6,
2004
|
|
3.2
|
Bylaws
of the Company
|
Incorporated
by reference, to Exhibit 3.2 to the Company’s 8-K filing on December 6,
2004
|
|
3.3
|
State
of Delaware, Certificate of Amendment of Certificate of
Incorporation
|
Incorporated
by reference, to Exhibit 3.3 to the Company 10-QSB filed on January 13,
2006
|
|
4.1
|
Letter
Agreement with Pembroke Financial Ltd. Dated July 9, 2001
|
Incorporated
by reference, to Exhibit 10.9 to the Company’s 10-KSB/A filed on September
24, 2003
|
|
4.2
|
Securities
Purchase Agreement dated September 18, 2003 between the Company and
certain of the Selling Stockholders
|
Incorporated
by reference, to Exhibit 4.3 to the Company’s SB-2 filed on October 20,
2003.
|
|
4.3
|
Investor
Rights Agreement dated September 18, 2003 between the Company and certain
of the Selling Stockholders
|
Incorporated
by reference, to Exhibit 4.3 to the Company’s SB-2 filed on October 20,
2003.
|
|
4.4
|
Form
of Common Stock Purchase Warrant issued by the Company to the Selling
Stockholders
|
Incorporated
by reference, to Exhibit 4.4 to Company’s SB-2 filed on October 20,
2003.
|
|
4.5
|
Warrant
and Common Stock Purchase Agreement dated May 25, 2005 among the Company
and the several purchasers thereunder
|
Incorporated
by reference to Exhibit 4.5 to the Company’s Form SB-2 filed on June 16,
2005
|
|
4.6
|
Registration
Rights Agreement dated May 25, 2005 among the purchasers under the Warrant
and Common Stock Purchase Agreement of even date therewith
|
Incorporated
by reference to Exhibit 4.6 to the Company’s Form SB-2 filed on June 16,
2005
|
|
4.7
|
Addendum
1 to Subscription Agreement and Questionnaire of vSpring SBIC, LP dated
May 25, 2005
|
Incorporated
by reference to Exhibit 4.7 to the Company’s Annual Report on Form 10-KSB
filed on August 26, 2005
|
|
4.8
|
Warrant
and Common Stock Purchase Agreement dated December 22, 2005 among the
Company and the several purchasers thereunder
|
Incorporated
by reference, to Exhibit 4.5 to the Company’s SB-2 filed on January 27,
2006
|
|
4.9
|
Registration
Rights Agreement dated December 22, 2005 among the purchasers under the
Warrant and Common Stock Purchase Agreement of even date
therewith
|
Incorporated
by reference, to Exhibit 4.6 to the Company’s SB-2 filed on January 27,
2006
|
|
4.10
|
Form
of Warrant issued by the Company to the Selling Stockholders dated
December 22, 2005 of even date therewith
|
Incorporated
by reference, to Exhibit 4.7 to the Company’s SB-2 filed on January 27,
2006
|
|
4.11
|
Warrant
and Common Stock Purchase Agreement dated June 30, 2006 among the Company
and the several purchasers thereunder
|
Incorporated
by reference, to Exhibit 10.1 to the Company’s Current Report on Form 8-K
filed on July 10, 2006.
|
|
4.12
|
Registration
Rights Agreement dated June 30, 2006 among the purchasers under the
Warrant and Common Stock Purchase Agreement of even date
therewith
|
Incorporated
by reference, to Exhibit 10.2 to the Company’s Current Report on Form 8-K
filed on July 10, 2006
|
|
4.13
|
Form
of Warrant issued by the Company to the Selling Stockholders dated June
30, 2006 of even date therewith
|
Incorporated
by reference, to Exhibit 10.3 to the Company’s Current Report on Form 8-K
filed on July 10, 2006
|
|
10.1
|
Employment
offer letter executed by Steven H. Kane
|
Incorporated
by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form
10-QSB filed on January 13, 2006.
|
|
10.2
|
Board
appointment executed by G. Kirk Raab
|
Incorporated
by reference, to Exhibit 10.4 to the Company’s Annual Report on Form
10-KSB/A filed on September 24, 2003.
|
|
10.3
|
Form
of Option Agreement
|
Incorporated
by reference, to Exhibit 10.6 to the Company’s Annual Report on Form
10-KSB/A filed on September 24, 2003
|
|
10.4
|
Frame
Contract between the Company and Eurogentec S.A.
|
Incorporated
by reference, to Exhibit 10.5 to the Company’s 10-KSB/A filed on September
24, 2003
|
|
10.5
|
Assignment
of Intellectual Property from Alex LLC to the Company
|
Incorporated
by reference, to Exhibit 10.8 to the Company’s 10-KSB/A filed on September
24, 2003.
|
|
10.6
|
Assignment
of Intellectual Property from Dr. Paul Mann to the Company
|
Incorporated
by reference, to Exhibit 10.8 to the Company’s Annual Report on Form
10-KSB/A filed on September 24, 2003.
|
|
10.7
|
Stock
Redemption Agreement dated August 15, 2003, by and between the Company,
Paul L. Mann, Leslie A. McCament-Mann, Gail Stewe and Elizabeth Sarah Anne
Wiley
|
Incorporated
by reference, to Exhibit 10.10 to the Company’s Annual Report on Form
10-KSB/A filed on September 24, 2003.
|
|
10.8
|
Letter
dated August 21, 2003 from Paul L. Mann to the Company
|
Incorporated
by reference, to Exhibit 10.11 to the Company’s Annual Report on Form
10-KSB/A filed on September 24, 2003.
|
|
10.9
|
Technology
License Agreement dated November 17, 1999, between the Company and Alex,
LLC
|
Incorporated
by reference, to Exhibit 10.4 to the Company’s Registration of Securities
on Form 10-QSB filed on December 6, 1999.
|
|
10.10
|
Letter
Agreement, dated March 16, 2005, effective October 26, 2004, between the
Company and Carleton A. Holstrom
|
Incorporated
by reference, to Exhibit 10.3 to the Company’s Quarterly Report on Form
10-QSB/A filed on April 14, 2005.
|
|
10.11
|
Description
of the verbal agreement between the Company and Eugene A. Bauer,
M.D.
|
Incorporated
by reference to the Company’s Current Report on Form 8-K filed on February
22, 2005.
|
10.12
|
Protalex,
Inc. 2003 Stock Option Plan Amended and Restated as of July 29,
2005
|
Incorporated
by reference to Appendix B to the Company’s Proxy Statement filed on
September 23, 2005.
|
|
10.13
|
Description
of the verbal agreement between the Company and Peter G.
Tombros
|
Incorporated
by reference to the Company’s Current Report on Form 8-K filed on November
14, 2005.
|
|
10.14
|
Modified
lease agreement with Union Square LP, dated November 18,
2005
|
Incorporate
by reference to Exhibit 99.1 to the Company’s Current Report Form 8-K
filed on November 22, 2005.
|
|
10.15
|
Employment
offer letter executed by Marc L. Rose, CPA, Vice President, Chief
Financial Officer, Treasurer and Corporate Secretary
|
Incorporated
by reference, to Exhibit 10.2 to the Company’s Quarterly Report on Form
10-QSB filed on January 14, 2005.
|
|
10.16†
|
Service
Contract with AAIPharma Inc., dated January 29, 2007
|
Incorporated
by reference to Exhibit 10.18 to the Company’s Quarterly Report on Form
10-QSB filed on April 13, 2007.
|
|
10.17
|
Modified
lease agreement with Union Square LP, dated April 30, 2007
|
Incorporate
by reference to Exhibit 99.1 to the Company’s Current Report Form 8-K
filed on May 3, 2007.
|
|
10.18
|
Settlement
Agreement with Steven H. Kane, President, Chief Executive Officer and
Director dated April 14, 2009
|
Filed
herewith
|
|
10.19
|
Settlement
Agreement with Marc L. Rose, Vice President, Finance, Chief Financial
Officer, Secretary and Treasurer dated April 14, 2009
|
Filed
herewith
|
|
10.20
|
Cash
Waiver & Option Termination Agreement dated April 10, 2009 with G.
Kirk Raab, Carleton A. Holstrom, Eugene A. Bauer, MD, Peter G. Tombros,
Frank M. Dougherty and Thomas P. Stagnaro
|
Filed
herewith
|
|
10.21
|
Indemnification
Agreement with Directors and Executive Officers dated August
28, 2009
|
Filed
herewith
|
|
23.1
|
Consent
of Grant Thornton LLP
|
Filed
herewith
|
|
31.1
|
Certification
of Chief Executive Officer pursuant to Section 302(a) of the
Sarbanes-Oxley Act
|
Filed
herewith
|
|
31.2
|
Certification
of Chief Financial Officer pursuant to Section 302(a) of the
Sarbanes-Oxley Act
|
Filed
herewith
|
|
32.1
|
Certification
of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
Act
|
Filed
herewith
|
|
32.2
|
Certification
of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
Act
|
Filed
herewith
|
Protalex,
Inc.
|
|
By:
|
/s/
Steven H. Kane
|
Name:
|
Steven
H. Kane
|
Title:
|
President,
Chief Executive Officer and
Director
|
/s/ G. Kirk Raab
|
Chairman
of the Board and Director
|
August 28, 2009
|
||
G.
Kirk Raab
|
||||
/s/ Steven H. Kane
|
President, Chief Executive Officer and Director (Principal
|
August
28, 2009
|
||
Steven
H. Kane
|
Executive
Officer)
|
|||
/s/ Marc L. Rose, CPA
|
Vice President of Finance, Chief Financial Officer, Treasurer
|
August
28, 2009
|
||
Marc
L. Rose
|
and Corporate Secretary (Principal Financial and Accounting Officer)
|
|||
/s/ Eugene A. Bauer, MD
|
Director
|
August
28, 2009
|
||
Eugene
A. Bauer
|
||||
/s/ Frank M. Dougherty
|
Director
|
August
28, 2009
|
||
Frank
M. Dougherty
|
||||
/s/ Carleton A. Holstrom
|
Director
|
August
28, 2009
|
||
Carleton
A. Holstrom
|
||||
/s/ Dinesh Patel, PhD
|
Director
|
August
28, 2009
|
||
Dinesh
Patel
|
||||
/s/ Thomas P. Stagnaro
|
Director
|
August
28, 2009
|
||
Thomas
P. Stagnaro
|
||||
/s/ Peter G. Tombros
|
Director
|
August
28, 2009
|
||
Peter
G. Tombros
|
Page
|
|
Financial
Statements
|
|
Balance
Sheets at May 31, 2009 and 2008
|
3
|
Statements
of Operations for the Years Ended May 31, 2009, 2008 and 2007, and from
Inception (September 17, 1999) through May 31, 2009
|
4
|
Statement
of Changes in Stockholders’ Equity from Inception (September 17, 1999)
through May 31, 2009
|
5
|
Statements
of Cash Flows for the Years Ended May 31, 2009, 2008 and 2007 and from
Inception (September 17, 1999) through May 31, 2009
|
9
|
NOTES
TO FINANCIAL STATEMENTS
|
10
|
2009
|
2008
|
|||||||
CURRENT
ASSETS:
|
||||||||
Cash and cash
equivalents
|
$ | 2,637,292 | $ | 8,442,809 | ||||
Prepaid
expenses
|
193,757 | 429,207 | ||||||
Total
current assets
|
2,831,049 | 8,872,016 | ||||||
PROPERTY
& EQUIPMENT:
|
||||||||
Lab equipment
|
327,287 | 692,761 | ||||||
Office and computer
equipment
|
195,987 | 195,987 | ||||||
Furniture &
fixtures
|
40,701 | 40,701 | ||||||
Leasehold
improvements
|
89,967 | 89,967 | ||||||
653,942 | 1,019,416 | |||||||
Less
accumulated depreciation
|
(628,780 | ) | (823,649 | ) | ||||
25,162 | 195,767 | |||||||
OTHER
ASSETS:
|
||||||||
Deposits
|
7,990 | 7,990 | ||||||
Intellectual technology
property, net of accumulated amortization of $9,753 and $8,733 as of May
31, 2009 and May 31, 2008, respectively
|
10,547 | 11,567 | ||||||
Total
other assets
|
18,537 | 19,557 | ||||||
Total
assets
|
$ | 2,874,748 | $ | 9,087,340 | ||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||
CURRENT
LIABILITIES:
|
||||||||
Accounts
payable
|
$ | 398,734 | $ | 1,277,555 | ||||
Payroll
and related liabilities
|
1,185,638 | 35,262 | ||||||
Accrued
expenses
|
8,057 | 15,000 | ||||||
Deferred
rent
|
1,192 | 1,458 | ||||||
Total liabilities
|
1,593,621 | 1,329,275 | ||||||
STOCKHOLDERS’
EQUITY
|
||||||||
Common stock, par value
$0.00001, 100,000,000 shares authorized 28,600,464 shares issued and
outstanding
|
286 | 286 | ||||||
Additional paid in
capital
|
45,865,352 | 45,112,084 | ||||||
Deficit accumulated during the
development stage
|
(44,584,511 | ) | (37,354,305 | ) | ||||
Total stockholders’
equity
|
1,281,127 | 7,758,065 | ||||||
Total
liabilities and stockholders’ equity
|
$ | 2,874,748 | $ | 9,087,340 |
From Inception
|
||||||||||||||||
Year Ended
|
Year Ended
|
Year Ended
|
Through
|
|||||||||||||
May 31, 2009
|
May 31, 2008
|
May 31, 2007
|
May 31, 2009
|
|||||||||||||
REVENUES
|
$ | - | $ | - | $ | - | $ | - | ||||||||
OPERATING
EXPENSES:
|
||||||||||||||||
Research and development
(including depreciation and amortization)
|
(3,490,956 | ) | (7,657,127 | ) | (5,562,485 | ) | (27,753,874 | ) | ||||||||
Administrative (including
depreciation and amortization)
|
(3,505,259 | ) | (2,759,463 | ) | (3,360,252 | ) | (15,614,637 | ) | ||||||||
Professional
fees
|
(365,670 | ) | (619,314 | ) | (544,903 | ) | (3,245,134 | ) | ||||||||
Depreciation and
amortization
|
(4,146 | ) | (4,146 | ) | (5,122 | ) | (163,816 | ) | ||||||||
Operating
Loss
|
(7,366,031 | ) | (11,040,050 | ) | (9,472,762 | ) | (46,777,371 | ) | ||||||||
Other
income (expense)
|
||||||||||||||||
Interest income
|
57,651 | 549,292 | 1,020,820 | 2,195,878 | ||||||||||||
Interest
expense
|
- | - | - | (70,612 | ) | |||||||||||
Gain on disposal of
equipment
|
78,174 | - | - | 67,594 | ||||||||||||
Net
Loss
|
$ | (7,230,206 | ) | $ | (10,490,758 | ) | $ | (8,451,942 | ) | $ | (44,584,511 | ) | ||||
Weighted
average number of common shares outstanding
|
28,600,464 | 28,600,464 | 28,083,103 | 18,392,537 | ||||||||||||
Loss
per common share – basic and diluted
|
$ | (.25 | ) | $ | (.37 | ) | $ | (.30 | ) | $ | (2.42 | ) |
Deficit
|
||||||||||||||||||||||||
Accumulated
|
||||||||||||||||||||||||
Additional
|
Common
|
During The
|
||||||||||||||||||||||
Common Stock
|
Paid in
|
Stock-
|
Development
|
|||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Contra
|
Stage
|
Total
|
|||||||||||||||||||
September 17,
1999 — initial issuance of 10,000 shares for intellectual technology
license at $.03 per share
|
10,000 | $ | 300 | $ | — | $ | — | $ | — | $ | 300 | |||||||||||||
September 30,
1999 — cost of public shell acquisition over net assets acquired to be
accounted for as a Recapitalization
|
— | — | — | (250,000 | ) | — | (250,000 | ) | ||||||||||||||||
October 27,
1999 — issuance of 84 shares to individual for $25,000
|
84 | 25,000 | — | — | — | 25,000 | ||||||||||||||||||
November 15,
1999 — reverse merger transaction with Enerdyne Corporation, net
transaction amounts
|
8,972,463 | 118,547 | — | (118,547 | ) | — | — | |||||||||||||||||
November 18,
1999 — February 7, 2000 — issuance of 459,444 shares to various
investors at $0.36 per share
|
459,444 | 165,400 | — | — | — | 165,400 | ||||||||||||||||||
January 1,
2000 — issuance of 100,000 shares in exchange for legal
services
|
100,000 | 15,000 | — | — | — | 15,000 | ||||||||||||||||||
May
1 - 27, 2000 — issuance of 640,000 shares to various investors at $1.00
per share
|
640,000 | 640,000 | — | — | — | 640,000 | ||||||||||||||||||
May 27,
2000 — issuance of 1,644 shares to individual in exchange for interest
Due
|
1,644 | 1,644 | — | — | — | 1,644 | ||||||||||||||||||
Net
loss for the year ended May 31, 2000
|
— | — | — | — | (250,689 | ) | (250,689 | ) | ||||||||||||||||
Balance,
May 31, 2000
|
10,183,635 | 965,891 | — | (368,547 | ) | (250,689 | ) | 346,655 | ||||||||||||||||
December 7,
2000 — issuance of 425,000 shares to various investors at $1.00 per
share
|
425,000 | 425,000 | — | — | — | 425,000 | ||||||||||||||||||
May 31,
2001 — Forgiveness of debt owed to shareholder
|
— | — | 40,000 | — | — | 40,000 | ||||||||||||||||||
Net
loss for the year ended May 31, 2001
|
— | — | — | — | (553,866 | ) | (553,866 | ) | ||||||||||||||||
Balance,
May 31, 2001
|
10,608,635 | 1,390,891 | 40,000 | (368,547 | ) | (804,555 | ) | 257,789 |
Deficit
|
||||||||||||||||||||||||
Accumulated
|
||||||||||||||||||||||||
Additional
|
Common
|
During
The
|
||||||||||||||||||||||
Common
Stock
|
Paid
in
|
Stock-
|
Development
|
|||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Contra
|
Stage
|
Total
|
|||||||||||||||||||
August 13,
2001 — Contribution by Shareholders
|
— | — | 143,569 | — | — | 143,569 | ||||||||||||||||||
November 7,
2001 — issuance of 881,600 Shares at $1.25 per share
|
881,600 | 1,102,000 | — | — | — | 1,102,000 | ||||||||||||||||||
November 26,
2001 — options issued to board member
|
— | — | 133,000 | — | — | 133,000 | ||||||||||||||||||
Net
loss for the year ended May 31, 2002
|
— | — | — | — | (1,280,465 | ) | (1,280,465 | ) | ||||||||||||||||
Balance,
May 31, 2002
|
11,490,235 | 2,492,891 | 316,569 | (368,547 | ) | (2,085,020 | ) | 355,893 | ||||||||||||||||
July 5,
2002 — issuance of 842,000 shares at $1.50 per share
|
842,000 | 1,263,000 | — | — | — | 1,263,000 | ||||||||||||||||||
July 1,
2002 - May 1, 2003 – purchase of common stock from shareholder at
$.70 per share
|
(130,955 | ) | (91,667 | ) | — | — | — | (91,667 | ) | |||||||||||||||
January 15,
2003 - May 15, 2003 — common stock issued to Company
president
|
41,670 | 82,841 | — | — | — | 82,841 | ||||||||||||||||||
May 14,
2003 — common stock issued to employee
|
5,000 | 11,250 | — | — | — | 11,250 | ||||||||||||||||||
June 1,
2002 - May 31, 2003 – compensation related to stock options issued to
board members, employees and consultants
|
— | — | 287,343 | — | — | 287,343 | ||||||||||||||||||
Net
loss for the year ended May 31, 2003
|
— | — | — | — | (1,665,090 | ) | (1,665,090 | ) | ||||||||||||||||
Balance,
May 31, 2003
|
12,247,950 | 3,758,315 | 603,912 | (368,547 | ) | (3,750,110 | ) | 243,570 | ||||||||||||||||
June 15,
2003, common stock issued to Company president
|
8,334 | 16,418 | — | — | — | 16,418 | ||||||||||||||||||
June 15,
2003, purchase of common stock from shareholder
|
(12,093 | ) | (8,333 | ) | — | — | — | (8,333 | ) | |||||||||||||||
September 18,
2003 – issuance of 7,445,646 of common stock issued in private placement
At $1.70 per share, net of transaction costs
|
7,445,646 | 11,356,063 | — | — | — | 11,356,063 | ||||||||||||||||||
September 19,
2003 – repurchase and retired 2,994,803 shares for
$300,000
|
(2,994,803 | ) | (300,000 | ) | — | — | — | (300,000 | ) | |||||||||||||||
December 12,
2003 – issuance of 39,399 shares to terminated employees at $2.60 per
share
|
39,399 | 102,438 | — | — | — | 102,438 | ||||||||||||||||||
March 1,
2004 – common stock issued to employee at $2.55 per share
|
50,000 | 127,500 | — | — | — | 127,500 | ||||||||||||||||||
May 31,
2004 – reclassify common stock contra to common stock
|
— | (368,547 | ) | — | 368,547 | — | — |
Deficit
|
||||||||||||||||||||||||
Accumulated
|
||||||||||||||||||||||||
Additional
|
Common
|
During
The
|
||||||||||||||||||||||
Common
Stock
|
Paid
in
|
Stock-
|
Development
|
|||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Contra
|
Stage
|
Total
|
|||||||||||||||||||
June
1, 2003 – May 31, 2004 – compensation related to stock options issued
to board members, employees and consultants
|
— | — | 448,096 | — | — | 448,096 | ||||||||||||||||||
Net
loss for the year ended May 31, 2004
|
— | — | — | — | (2,989,364 | ) | (2,989,364 | ) | ||||||||||||||||
Balance,
May 31, 2004
|
16,784,433 | $ | 14,683,854 | $ | 1,052,008 | — | $ | (6,739,474 | ) | $ | 8,996,388 | |||||||||||||
November
30, 2004 – adjust March 1, 2004 common stock issued to
employee
|
(20,000 | ) | — | — | — | (20,000 | ) | |||||||||||||||||
January
13, 2005 – common stock issued to employee at $2.55 per
share
|
15,000 | 38,250 | — | — | — | 38,250 | ||||||||||||||||||
February
28, 2005 – Reclass Par Value for Reincorporation into DE as of
12/1/04
|
(14,701,935 | ) | 14,701,935 | — | — | 0 | ||||||||||||||||||
May
25, 2005 - issuance of 2,593,788 shares of common stock issued in private
placement At $1.95 per share, net of transaction costs
|
2,593,788 | 25 | 4,851,168 | — | — | 4,851,193 | ||||||||||||||||||
June
1, 2004 – May 31, 2005 – compensation related to stock options issued
to board members, employees and consultants
|
— | — | 308,711 | — | — | 308,711 | ||||||||||||||||||
Net
loss for the year ended May 31, 2005
|
— | — | — | — | (5,567,729 | ) | (5,567,729 | ) | ||||||||||||||||
Balance,
May 31, 2005
|
19,393,221 | $ | 194 | $ | 20,913,822 | — | $ | (12,307,203 | ) | $ | 8,606,813 | |||||||||||||
August
23, 2005 – common stock issued to employee
|
40,000 | 0 | 100,000 | — | — | 100,000 | ||||||||||||||||||
October
19, 2005 – common stock issued to employee
|
10,000 | 0 | 25,000 | — | — | 25,000 | ||||||||||||||||||
December
30, 2005 – issuance of 2,595,132 shares
of common stock issued in private placement at $2.25 per share, net of
transaction costs
|
2,595,132 | 26 | 5,510,941 | — | — | 5,510,967 | ||||||||||||||||||
June
1, 2005 – May 31, 2006 – warrants exercised
|
351,598 | 4 | 786,534 | — | — | 786,538 | ||||||||||||||||||
June
1, 2005– May 31, 2006 – compensation related to stock options issued
to board members, employees and consultants
|
— | — | 404,679 | — | — | 404,679 | ||||||||||||||||||
Net
loss for the year ended May 31, 2006
|
— | — | — | — | (6,104,402 | ) | (6,104,402 | ) | ||||||||||||||||
Balance,
May 31, 2006
|
22,389,951 | $ | 224 | $ | 27,740,976 | — | $ | (18,411,605 | ) | $ | 9,329,595 |
Deficit
|
||||||||||||||||||||||||
Accumulated
|
||||||||||||||||||||||||
Additional
|
Common
|
During
The
|
||||||||||||||||||||||
Common
Stock
|
Paid
in
|
Stock-
|
Development
|
|||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Contra
|
Stage
|
Total
|
|||||||||||||||||||
July
7, 2006 – issuance of 6,071,013 shares of common stock issued in private
placement at $2.50 per share, net of transaction costs
|
6,071,013 | 61 | 14,217,660 | — | — | 14,217,721 | ||||||||||||||||||
June
1, 2006 – May 31, 2007 – warrants exercised
|
133,500 | 1 | 300,373 | — | — | 300,374 | ||||||||||||||||||
June
1, 2006 – May 31, 2007 – stock options exercised
|
6,000 | 0 | 15,200 | — | — | 15,200 | ||||||||||||||||||
June
1, 2006 – May 31, 2007 – shared-based compensation to board members,
employees and consultants
|
— | — | 1,826,850 | — | — | 1,826,850 | ||||||||||||||||||
Net
loss for the year ended May 31, 2007
|
— | — | — | — | (8,451,942 | ) | (8,451,942 | ) | ||||||||||||||||
Balance,
May 31, 2007
|
28,600,464 | $ | 286 | $ | 44,101,059 | $ | — | $ | (26,863,547 | ) | $ | 17,237,798 | ||||||||||||
June
1, 2007 – May 31, 2008 – shared-based compensation to board members,
employees and consultants
|
— | — | 1,011,025 | — | — | 1,011,025 | ||||||||||||||||||
Net
loss for the year ended May 31, 2008
|
— | — | — | — | (10,490,758 | ) | (10,490,758 | ) | ||||||||||||||||
Balance,
May 31, 2008
|
28,600,464 | $ | 286 | $ | 45,112,084 | $ | — | $ | (37,354,305 | ) | $ | 7,758,065 | ||||||||||||
June
1, 2008 – May 31, 2009 – shared-based compensation to board members,
employees and consultants
|
— | — | 753,268 | — | — | 753,268 | ||||||||||||||||||
Net
loss for the year ended May 31, 2009
|
— | — | — | — | (7,230,206 | ) | (7,230,206 | ) | ||||||||||||||||
Balance,
May 31, 2009
|
28,600,464 | $ | 286 | $ | 45,865,352 | $ | — | $ | (44,584,511 | ) | $ | 1,281,127 |
From
Inception
|
||||||||||||||||
Year Ended
|
Year Ended
|
Year Ended
|
Through
|
|||||||||||||
May 31, 2009
|
May 31, 2008
|
May 31, 2007
|
May 31, 2009
|
|||||||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||||||
Net
loss
|
$ | (7,230,206 | ) | $ | (10,490,758 | ) | $ | (8,451,942 | ) | $ | (44,584,511 | ) | ||||
Adjustments
to reconcile net loss to net cash and cash equivalents used in operating
activities
|
||||||||||||||||
Gain
on disposal of equipment
|
(78,174 | ) | — | — | (67,594 | ) | ||||||||||
Depreciation
and amortization
|
49,799 | 177,039 | 169,865 | 904,702 | ||||||||||||
Share-based
compensation
|
753,268 | 1,011,025 | 1,826,850 | 5,656,668 | ||||||||||||
Non
cash expenses
|
— | — | — | 16,644 | ||||||||||||
(Increase)
decrease in:
|
||||||||||||||||
Prepaid
expenses and deposits
|
235,450 | (158,156 | ) | (49,864 | ) | (201,747 | ) | |||||||||
Increase
(decrease) in:
|
||||||||||||||||
Accounts
payable and accrued expenses
|
(885,764 | ) | 344,442 | (23,467 | ) | 406,791 | ||||||||||
Payroll
and related liabilities
|
1,150,376 | 14,601 | (46,754 | ) | 1,185,638 | |||||||||||
Other
liabilities
|
(266 | ) | (1,538 | ) | (700 | ) | 1,192 | |||||||||
Net
cash and cash equivalents used in operating activities
|
(6,005,517 | ) | (9,103,345 | ) | (6,576,012 | ) | (36,682,217 | ) | ||||||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||||||
Acquisition
of intellectual technology license – fee portion
|
— | — | — | (20,000 | ) | |||||||||||
Acquisition
of equipment
|
— | — | (403,674 | ) | (905,936 | ) | ||||||||||
Excess
of amounts paid for public shell over assets acquired to be accounted
for as a recapitalization
|
— | — | — | (250,000 | ) | |||||||||||
Proceeds
from disposal of equipment
|
200,000 | — | — | 206,000 | ||||||||||||
Net
cash and cash equivalents provided by/(used) in investing
activities
|
200,000 | — | (403,674 | ) | (969,936 | ) | ||||||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||||||
Proceeds
from stock issuance, including options and warrants
exercised
|
— | — | 14,533,295 | 40,658,458 | ||||||||||||
Principal
payment on equipment notes payable and capital leases
|
— | — | — | (295,411 | ) | |||||||||||
Contribution
by shareholders
|
— | — | — | 183,569 | ||||||||||||
Principal
payment on note payable to individuals
|
— | — | — | (225,717 | ) | |||||||||||
Issuance
of note payable to individuals
|
— | — | — | 368,546 | ||||||||||||
Acquisition
of common stock
|
— | — | — | (400,000 | ) | |||||||||||
Net
cash and cash equivalents provided by financing activities
|
— | — | 14,533,295 | 40,289,445 | ||||||||||||
NET
(DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS
|
(5,805,517 | ) | (9,103,345 | ) | 7,553,609 | 2,637,292 | ||||||||||
Cash
and cash equivalents, beginning
|
8,442,809 | 17,546,154 | 9,992,545 | — | ||||||||||||
Cash
and cash equivalents, end
|
$ | 2,637,292 | $ | 8,442,809 | $ | 17,546,154 | $ | 2,637,292 | ||||||||
SUPPLEMENTAL
SCHEDULE OF CASH
FLOW INFORMATION:
|
||||||||||||||||
Interest
paid
|
$ | - | $ | - | $ | - | $ | 66,770 | ||||||||
Taxes
paid
|
$ | - | $ | - | $ | - | $ | 100 |
1.
|
ORGANIZATION
AND BUSINESS ACTIVITIES
|
2.
|
LIQUIDITY
|
3.
|
BASIS
OF ACCOUNTING AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
|
Year Ended
May, 31, 2009
|
Year Ended
May, 31, 2008
|
Year Ended
May, 31, 2007
|
From Inception
Through
May 31, 2009
|
|||||||||||||
Dividends
per year
|
0 | 0 | 0 | 0 | ||||||||||||
Volatility
percentage
|
96%-112 | % | 94.4%-96.3 | % | 107 | % | 90%-112 | % | ||||||||
Risk
free interest rate
|
3.11%-3.51 | % | 4.67%-4.87 | % | 3.85%-4.42 | % | 2.07%-5.11 | % | ||||||||
Expected
life (years)
|
6.25-10 | 6.25 | 4 | 3-10 | ||||||||||||
Weighted
Average Fair Value
|
$ | .39 | 2.00 | 1.98 | 1.36 |
4.
|
REVERSE
MERGER
|
Account Description
|
Protalex, Inc.
|
Enderdyne
Corporation
|
Transaction
Adjustments
|
Balance Sheet at
November 16, 1999
|
||||||||||||
Cash
|
$ | 23,531 | $ | — | $ | — | $ | 23,531 | ||||||||
Note
receivable shareholder
|
— | 118,547 | — | 118,547 | ||||||||||||
License
|
20,300 | — | — | 20,300 | ||||||||||||
Investment
in Enerdyne
|
368,547 | — | (368,547 | ) | — | |||||||||||
Other
current assets
|
8,212 | — | — | 8,212 | ||||||||||||
Other
current liabilities
|
(17,555 | ) | — | — | (17,555 | ) | ||||||||||
Accounts
payable Alex
|
(40,000 | ) | — | — | (40,000 | ) | ||||||||||
Note
payable
|
(368,546 | ) | — | — | (368,546 | ) | ||||||||||
Common
stock
|
(25,300 | ) | (833,459 | ) | 714,912 | (143,847 | ) | |||||||||
Additional
paid in capital
|
— | (1,105,014 | ) | 1,105,014 | — | |||||||||||
Treasury
stock
|
— | 430,424 | (430,424 | ) | — | |||||||||||
Accumulated
deficit
|
30,811 | 1,389,502 | (1,389,502 | ) | 30,811 | |||||||||||
Common
stock – contra
|
— | — | 368,547 | 368,547 | ||||||||||||
$ | — | $ | — | $ | — | $ | — |
5.
|
INCOME
TAXES
|
Current:
|
Year Ended
May 31, 2009
|
Year Ended
May 31, 2008
|
Year Ended
May 31, 2007
|
|||||||||
Federal
|
$ | — | $ | — | $ | — | ||||||
State
|
— | — | — | |||||||||
Deferred:
|
||||||||||||
Federal
|
2,584,000 | 3,797,800 | 3,354,205 | |||||||||
State
|
456,000 | 670,200 | 591,795 | |||||||||
Increase
in valuation allowance
|
(3,040,000 | ) | (4,468,000 | ) | (3,946,000 | ) | ||||||
Income
tax benefit
|
$ | — | $ | — | $ | — |
Year Ended
May 31, 2009
|
Year Ended
May 31, 2008
|
Year Ended
May 31, 2007
|
||||||||||
Statutory
federal income tax rate
|
(34 | )% | (34 | )% | (34 | )% | ||||||
State
income taxes, net of federal income tax impact
|
(6 | )% | (6 | )% | (6 | )% | ||||||
Change
in valuation allowance
|
42 | % | 43 | % | 46 | % | ||||||
General
business credit/other
|
(2 | )% | (3 | )% | (6 | )% | ||||||
0 | % | 0 | % | 0 | % |
Assets:
|
May 31, 2009
|
May 31, 2008
|
May 31, 2007
|
|||||||||
Net
operating losses
|
$ | 14,296,000 | $ | 12,190,000 | $ | 8,616,000 | ||||||
Vacation
accrual
|
401,000 | 14,000 | 8,000 | |||||||||
Stock
based compensation
|
2,263,000 | 1,961,000 | 1,560,000 | |||||||||
Equipment
|
30,000 | 38,000 | 20,000 | |||||||||
General
business credit
|
1,852,000 | 1,599,000 | 1,130,000 | |||||||||
Deferred
tax assets
|
18,842,000 | 15,802,000 | 11,334,000 | |||||||||
Liability:
|
||||||||||||
Equipment
|
— | — | — | |||||||||
Gross
deferred tax asset
|
18,842,000 | 15,802,000 | 11,334,000 | |||||||||
Less
valuation allowance
|
(18,842,000 | ) | (15,802,000 | ) | (11,334,000 | ) | ||||||
Deferred
tax asset, net of valuation allowance
|
$ | — | $ | — | $ | — |
6.
|
RELATED
PARTIES
|
7.
|
STOCK
OPTIONS
|
Shares
|
Weighted
Average Exercise
Price
|
Weighted
Average Remaining
Contractual Term
(Years)
|
||||||||||
Outstanding
at May 31, 2006
|
3,834,625 | $ | 1.98 | 7.7 | ||||||||
Granted
|
458,000 | $ | 2.56 | — | ||||||||
Exercised
|
(6,000 | ) | $ | 2.53 | — | |||||||
Forfeited
|
(112,217 | ) | $ | 2.58 | — | |||||||
Expired
|
(210,546 | ) | $ | 2.54 | — | |||||||
Outstanding
at May 31, 2007
|
3,963,862 | $ | 2.00 | 6.9 | ||||||||
Granted
|
457,500 | $ | 1.27 | — | ||||||||
Exercised
|
0 | — | — | |||||||||
Forfeited
|
(48,428 | ) | $ | 2.75 | — | |||||||
Expired
|
(30,516 | ) | $ | 2.70 | — | |||||||
Outstanding
at May 31, 2008
|
4,342,418 | $ | 1.91 | 6.2 | ||||||||
Granted
|
1,685,000 | $ | 0.49 | — | ||||||||
Exercised
|
0 | — | — | |||||||||
Forfeited
|
(545,793 | ) | $ | 0.53 | — | |||||||
Expired
|
(2,184,813 | ) | $ | 1.67 | — | |||||||
Outstanding
at May 31, 2009
|
3,296,812 | $ | 1.57 | 6.0 | ||||||||
Exercisable
at May 31, 2009
|
2,505,294 | $ | 1.79 | — |
Total
|
Exercisable
|
|||||||||||||||||||||||
Exercise Price
Range
|
Number
|
Weighted
Average
Exercise Price
|
Weighted
Average
Remaining
Life
(years)
|
Number
|
Weighted
Average
Exercise Price
|
Weighted
Average
Remaining
Life
(years)
|
||||||||||||||||||
$0.00
– 0.45
|
576,876 | $ | 0.45 | 9.1 | 121,676 | $ | 0.45 | 9.1 | ||||||||||||||||
$0.46
– 0.90
|
150,000 | $ | 0.85 | 9.3 | 37,500 | $ | 0.85 | 9.3 | ||||||||||||||||
$0.91
– 1.35
|
351,563 | $ | 1.26 | 6.7 | 225,526 | $ | 1.26 | 6.7 | ||||||||||||||||
$1.36
– 1.80
|
1,256,922 | $ | 1.50 | 3.6 | 1,256,922 | $ | 1.50 | 3.6 | ||||||||||||||||
$1.81
– 2.25
|
119,166 | $ | 2.14 | 5.7 | 116,103 | $ | 2.14 | 5.7 | ||||||||||||||||
$2.26
– 2.70
|
560,714 | $ | 2.49 | 6.1 | 495,607 | $ | 2.52 | 6.1 | ||||||||||||||||
$2.70
– 3.15
|
281,571 | $ | 2.88 | 6.9 | 251,960 | $ | 2.87 | 6.9 | ||||||||||||||||
3,296,812 | $ | 1.57 | 6.0 | 2,505,294 | $ | 1.79 | 6.0 |
8.
|
COMMITMENTS
|
Year
ending May 31,
|
||||
2010
|
$ |
122,212
|
9.
|
SALE
AND REPURCHASE OF COMMON STOCK
|
10.
|
EMPLOYEE
BENEFITS
|
11.
|
UNAUDITED
QUARTERLY INFORMATION
|
Quarter
Ended
|
||||||||||||||||
August 31
|
November 30
|
February 28
|
May 31
|
|||||||||||||
Fiscal
2009
|
||||||||||||||||
Revenue
|
$ | — | $ | — | $ | — | $ | — | ||||||||
Net
loss
|
(2,398,932 | ) | (1,520,570 | ) | (1,603,928 | ) | (2,155,932 | ) | ||||||||
Basic
and diluted loss per share
|
(.08 | ) | (.05 | ) | (.06 | ) | (.08 | ) | ||||||||
|
August 31
|
November 30
|
February 29
|
May 31
|
||||||||||||
Fiscal
2008
|
||||||||||||||||
Revenue
|
$ | — | $ | — | $ | — | $ | — | ||||||||
Net
loss
|
(2,371,680 | ) | (2,814,598 | ) | (2,742,684 | ) | (2,561,795 | ) | ||||||||
Basic
and diluted loss per share
|
(.08 | ) | (.10 | ) | (.10 | ) | (.09 | ) | ||||||||
|
August 31
|
November 30
|
February 28
|
May 31
|
||||||||||||
Fiscal
2007
|
||||||||||||||||
Revenue
|
$ | — | $ | — | $ | — | $ | — | ||||||||
Net
loss
|
(1,504,529 | ) | (2,430,673 | ) | (2,512,995 | ) | (2,003,745 | ) | ||||||||
Basic
and diluted loss per share
|
(.06 | ) | (.08 | ) | (.09 | ) | (.07 | ) |
2.1
|
Stock
Purchase Agreement among the Company, Don Hanosh and Enerdyne Corporation,
dated December 6, 1999
|
Incorporated
by reference, to Exhibit 2.1 to the Company’s 10-SB filing on December 6,
1999
|
||
2.2
|
Merger
Agreement and Plan of Re-organization between the Company and Enerdyne
Corporation
|
Incorporated
by reference, to Exhibit 2.2 to the Company’s 10-SB filing on December 6,
1999
|
||
2.3
|
Plan
of Merger and Agreement between Protalex, Inc., a New Mexico corporation
and Protalex, Inc. a Delaware Corporation
|
Incorporated
by reference, to Exhibit 2.1 to the Company’s 8-K filing on December 6,
2004
|
||
3.1
|
Certificate
of Incorporation of the Company
|
Incorporated
by reference, to Exhibit 3.1 to the Company’s 8-K filing on December 6,
2004
|
||
3.2
|
Bylaws
of the Company
|
Incorporated
by reference, to Exhibit 3.2 to the Company’s 8-K filing on December 6,
2004
|
||
3.3
|
State
of Delaware, Certificate of Amendment of Certificate of
Incorporation
|
Incorporated
by reference, to Exhibit 3.3 to the Company 10-QSB filed on January 13,
2006
|
||
4.1
|
Letter
Agreement with Pembroke Financial Ltd. Dated July 9, 2001
|
Incorporated
by reference, to Exhibit 10.9 to the Company’s 10-KSB/A filed on September
24, 2003
|
||
4.2
|
Securities
Purchase Agreement dated September 18, 2003 between the Company and
certain of the Selling Stockholders
|
Incorporated
by reference, to Exhibit 4.3 to the Company’s SB-2 filed on October 20,
2003.
|
||
4.3
|
Investor
Rights Agreement dated September 18, 2003 between the Company and certain
of the Selling Stockholders
|
Incorporated
by reference, to Exhibit 4.3 to the Company’s SB-2 filed on October 20,
2003.
|
||
4.4
|
Form
of Common Stock Purchase Warrant issued by the Company to the Selling
Stockholders
|
Incorporated
by reference, to Exhibit 4.4 to Company’s SB-2 filed on October 20,
2003.
|
||
4.5
|
Warrant
and Common Stock Purchase Agreement dated May 25, 2005 among the Company
and the several purchasers thereunder
|
Incorporated
by reference to Exhibit 4.5 to the Company’s Form SB-2 filed on June 16,
2005
|
||
4.6
|
Registration
Rights Agreement dated May 25, 2005 among the purchasers under the Warrant
and Common Stock Purchase Agreement of even date therewith
|
Incorporated
by reference to Exhibit 4.6 to the Company’s Form SB-2 filed on June 16,
2005
|
||
4.7
|
Addendum
1 to Subscription Agreement and Questionnaire of vSpring SBIC, LP dated
May 25, 2005
|
Incorporated
by reference to Exhibit 4.7 to the Company’s Annual Report on Form 10-KSB
filed on August 26, 2005
|
||
4.8
|
Warrant
and Common Stock Purchase Agreement dated December 22, 2005 among the
Company and the several purchasers thereunder
|
Incorporated
by reference, to Exhibit 4.5 to the Company’s SB-2 filed on January 27,
2006
|
||
4.9
|
Registration
Rights Agreement dated December 22, 2005 among the purchasers under the
Warrant and Common Stock Purchase Agreement of even date
therewith
|
Incorporated
by reference, to Exhibit 4.6 to the Company’s SB-2 filed on January 27,
2006
|
||
4.10
|
Form
of Warrant issued by the Company to the Selling Stockholders dated
December 22, 2005 of even date therewith
|
Incorporated
by reference, to Exhibit 4.7 to the Company’s SB-2 filed on January 27,
2006
|
||
4.11
|
Warrant
and Common Stock Purchase Agreement dated June 30, 2006 among the Company
and the several purchasers thereunder
|
Incorporated
by reference, to Exhibit 10.1 to the Company’s Current Report on Form 8-K
filed on July 10, 2006.
|
||
4.12
|
Registration
Rights Agreement dated June 30, 2006 among the purchasers under the
Warrant and Common Stock Purchase Agreement of even date
therewith
|
Incorporated
by reference, to Exhibit 10.2 to the Company’s Current Report on Form 8-K
filed on July 10, 2006
|
||
4.13
|
Form
of Warrant issued by the Company to the Selling Stockholders dated June
30, 2006 of even date therewith
|
Incorporated
by reference, to Exhibit 10.3 to the Company’s Current Report on Form 8-K
filed on July 10, 2006
|
||
10.1
|
Employment
offer letter executed by Steven H. Kane
|
Incorporated
by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form
10-QSB filed on January 13, 2006.
|
||
10.2
|
Board
appointment executed by G. Kirk Raab
|
Incorporated
by reference, to Exhibit 10.4 to the Company’s Annual Report on Form
10-KSB/A filed on September 24, 2003.
|
||
10.3
|
Form
of Option Agreement
|
Incorporated
by reference, to Exhibit 10.6 to the Company’s Annual Report on Form
10-KSB/A filed on September 24, 2003
|
||
10.4
|
Frame
Contract between the Company and Eurogentec S.A.
|
Incorporated
by reference, to Exhibit 10.5 to the Company’s 10-KSB/A filed on September
24, 2003
|
||
10.5
|
Assignment
of Intellectual Property from Alex LLC to the Company
|
Incorporated
by reference, to Exhibit 10.8 to the Company’s 10-KSB/A filed on September
24, 2003.
|
||
10.6
|
Assignment
of Intellectual Property from Dr. Paul Mann to the Company
|
Incorporated
by reference, to Exhibit 10.8 to the Company’s Annual Report on Form
10-KSB/A filed on September 24, 2003.
|
||
10.7
|
Stock
Redemption Agreement dated August 15, 2003, by and between the Company,
Paul L. Mann, Leslie A. McCament-Mann, Gail Stewe and Elizabeth Sarah Anne
Wiley
|
Incorporated
by reference, to Exhibit 10.10 to the Company’s Annual Report on Form
10-KSB/A filed on September 24, 2003.
|
||
10.8
|
Letter
dated August 21, 2003 from Paul L. Mann to the Company
|
Incorporated
by reference, to Exhibit 10.11 to the Company’s Annual Report on Form
10-KSB/A filed on September 24, 2003.
|
||
10.9
|
Technology
License Agreement dated November 17, 1999, between the Company and Alex,
LLC
|
Incorporated
by reference, to Exhibit 10.4 to the Company’s Registration of Securities
on Form 10-SB filed on December 6, 1999.
|
||
10.10
|
|
Letter
Agreement, dated March 16, 2005, effective October 26, 2004, between the
Company and Carleton A. Holstrom
|
|
Incorporated
by reference, to Exhibit 10.3 to the Company’s Quarterly Report on Form
10-QSB/A filed on April 14,
2005.
|
10.11
|
Description
of the verbal agreement between the Company and Eugene A. Bauer,
M.D.
|
Incorporated
by reference to the Company’s Current Report on Form 8-K filed on February
22, 2005.
|
||
10.12
|
Protalex,
Inc. 2003 Stock Option Plan Amended and Restated as of July 29,
2005
|
Incorporated
by reference to Appendix B to the Company’s Proxy Statement filed on
September 23, 2005.
|
||
10.13
|
Description
of the verbal agreement between the Company and Peter G.
Tombros
|
Incorporated
by reference to the Company’s Current Report on Form 8-K filed on November
14, 2005.
|
||
10.14
|
Modified
lease agreement with Union Square LP, dated November 18,
2005
|
Incorporate
by reference to Exhibit 99.1 to the Company’s Current Report Form 8-K
filed on November 22, 2005.
|
||
10.15
|
Employment
offer letter executed by Marc L. Rose, CPA, Vice President, Chief
Financial Officer, Treasurer and Corporate Secretary
|
Incorporated
by reference, to Exhibit 10.2 to the Company’s Quarterly Report on Form
10-QSB filed on January 14, 2005.
|
||
10.16†
|
Service
Contract with AAIPharma Inc., dated January 29, 2007
|
Incorporated
by reference to Exhibit 10.18 to the Company’s Quarterly Report on Form
10-QSB filed on April 13, 2007.
|
||
10.17
|
Modified
lease agreement with Union Square LP, dated April 30, 2007
|
Incorporate
by reference to Exhibit 99.1 to the Company’s Current Report Form 8-K
filed on May 3, 2007.
|
||
10.18
|
Settlement
Agreement with Steven H. Kane, President, Chief Executive Officer and
Director dated April 14, 2009
|
Filed
herewith
|
||
10.19
|
Settlement
Agreement with Marc L. Rose, Vice President, Finance, Chief Financial
Officer, Secretary and Treasurer dated April 14, 2009
|
Filed
herewith
|
||
10.20
|
Cash
Waiver & Option Termination Agreement dated April 10, 2009 with G.
Kirk Raab, Carleton A. Holstrom, Eugene A. Bauer, MD, Peter G. Tombros,
Frank M. Dougherty and Thomas P. Stagnaro
|
Filed
herewith
|
||
10.21
|
Indemnification
Agreement with Directors and Executive Officers dated August
28, 2009
|
Filed
herewith
|
||
23.1
|
Consent
of Grant Thornton LLP
|
Filed
herewith
|
||
31.1
|
Certification
of Chief Executive Officer pursuant to Section 302(a) of the
Sarbanes-Oxley Act
|
Filed
herewith
|
||
31.2
|
Certification
of Chief Financial Officer pursuant to Section 302(a) of the
Sarbanes-Oxley Act
|
Filed
herewith
|
||
32.1
|
Certification
of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
Act
|
Filed
herewith
|
||
32.2
|
|
Certification
of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
Act
|
|
Filed
herewith
|
On
Behalf of Protalex
|
|
By:
|
|
Name:
|
|
Title:
|
|
Date:
|
|
|
|
Steven
Kane
|
|
Date:
|
On
Behalf of Protalex
|
|
By:
|
|
Name:
|
|
Title:
|
|
Date:
|
|
Marc
L. Rose
|
|
Date:
|
Bauer,
Eugene
|
325,000 | |||
Dougherty,
Frank
|
290,000 | |||
Holstrom,
Carleton
|
325,000 | |||
Raab,
G Kirk
|
864,333 | |||
Stagnaro,
Thomas
|
490,000 | |||
Tombros,
Peter
|
300,000 |
PROTALEX,
INC., a Delaware corporation
|
|
By:
|
|
MARC
ROSE, Chief Financial Officer
|
|
DIRECTOR:
|
|
|
|
(Print
Name)
|
|
(Signature)
|
COMPANY:
|
||
PROTALEX,
INC.,
|
||
a
Delaware corporation
|
||
By
:
|
|
|
Name:
|
|
|
Title:
|
|
|
Address:
|
|
|
INDEMNITEES:
|
||
|
||
[PRINT
DIRECTOR’S NAME & SIGNATURE]
|
||
Address:
|
|
|
|
||
|
||
[FUND
NAME IF
APPLICABLE]
|
Dated:
August 28, 2009
|
By: /s/ Steven H. Kane
|
Steven
H. Kane
|
|
President,
Chief Executive Officer and
Director
|
Dated:
August 28, 2009
|
By: /s/ Marc L. Rose
|
Marc
L. Rose
|
|
Vice President of Finance, Chief Financial Officer, Secretary and Treasurer
|
Dated:
August 28, 2009
|
By: /s/ Steven H. Kane
|
Steven
H. Kane
|
|
President,
Chief Executive Officer and
Director
|
Dated:
August 28, 2009
|
By: /s/ Marc L. Rose
|
Marc
L. Rose
|
|
Vice President of Finance, Chief Financial Officer, Secretary and Treasurer
|