UNITED STATES SECURITIES AND EXCHANGE COMMISSION
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Washington
, D.C. 20549
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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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52-2007292
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State or other jurisdiction of
incorporation or organization
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(I.R.S. Employer
Identification No.)
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9700 Great Seneca Highway
Rockville
, MD
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20850
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Common stock, $0.01 par value
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NYSE MKT
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Large accelerated filer
¨
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Accelerated filer
x
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
¨
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Page
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PART I
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3
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Item 1.
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Business
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3
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Item 1A.
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Risk Factors
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10
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Item 1B.
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Unresolved Staff Comments
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20
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Item 2.
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Properties
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20
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Item 3.
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Legal Proceedings
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20
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Item 4.
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Mine Safety Disclosure
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21
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PART II
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21
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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21
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Item 6.
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Selected Financial Data
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24
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Item 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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24
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Item 7A.
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Quantitative and Qualitative Disclosures About Market Risk
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30
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Item 8.
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Financial Statements and Supplementary Data
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31
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Item 9.
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Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
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49
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Item 9A.
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Controls and Procedures
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49
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Item 9B.
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Other Information
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50
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PART III
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50
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Item 10.
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Directors, Executive Officers and Corporate Governance
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50
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Item 11.
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Executive Compensation
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50
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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51
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Item 13.
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Certain Relationships and Related Transactions, and Director Independence
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51
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Item 14.
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Principal Accounting Fees and Services
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51
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PART IV
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51
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Item 15.
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Exhibits, Financial Statement Schedules
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51
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2 | ||
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ITEM 1.
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BUSINESS
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3 | ||
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Program
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Indication
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Development Status
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Future
Development Plan
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NSI 566
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Amyotrophic Lateral Sclerosis (ALS)
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Commenced Phase II clinical trials.
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Anticipated to complete dosing of the Phase II clinical trials during the second quarter of 2014.
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NSI 566
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Chronic Spinal Cord Injury
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Approved to commence Phase I clinical trials.
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Phase I Trial expected to commence during the second quarter of 2014.
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NSI 566
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Motor deficits due to ischemic stroke
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Commenced combined Phase I/II clinical trials in China.
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Dosing commenced during the fourth quarter of 2013.
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NSI 189
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Major Depressive Disorder
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Completed Phase Ia, Phase Ib dosing complete.
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Actively looking to partner development after Phase Ib trial.
Final Phase I data is being reviewed.
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4 | ||
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Medical Condition
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Number of Patients in United States
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Stem cells
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ALS
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30,000
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(1)
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Huntington’s disease
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30,000
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(2)
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Multiple Sclerosis
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400,000
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(3)
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Parkinson's Disease
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1.5 million
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(4)
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Spinal Cord Injury
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840,000
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(5)
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Stroke
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7.0 million
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(6)
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Small molecule compounds
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Alzheimer’s disease
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5.2 million
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(7)
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Depression
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14.8 million
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(8)
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Stroke
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7.0 million
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(6)
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Traumatic Brain Injury
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5.3 million
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(9)
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5 | ||
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6 | ||
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7 | ||
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8 | ||
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Name
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Position
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Age
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Position Since
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I. Richard Garr
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Chief Executive Officer, President, General Counsel, Chief Financial Officer
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61
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1996
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Karl Johe, Ph.D.
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Chief Scientific Officer
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53
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1996
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9 | ||
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·
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Neuralstem’s Twitter Account (
https://twitter.com/Neuralstem_Inc
)
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|
·
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Neuralstem’s Facebook Page (
https://www.facebook.com/Neuralstem
)
|
|
·
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Neuralstem’s Company Blog (
http://neuralstem.com/neuralstem-ceo-blog
)
|
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·
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Neuralstem’s Google+ Page (
https://plus.google.com/u/0/b/104875574397171789280/104875574397171789280/posts
)
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|
·
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Neuralstem’s LinkedIn Company Page (
http://www.linkedin.com/company/neuralstem-inc-
)
|
|
·
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Neuralstem Asia’s Weibo Account (
http://www.weibo.com/u/3516708787
)
|
|
·
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Neuralstem Asia’s Tencent Weibo Account (
http://t.qq.com/neuralstem
)
|
|
·
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Neuralstem Asia’s Facebook Page
(
https://www.facebook.com/NeuralstemAsia
)
|
|
·
|
Neuralstem Asia’s Twitter Account (
https://twitter.com/Neuralste_Asia)
|
ITEM 1A.
|
RISK FACTORS
|
10 | ||
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11 | ||
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12 | ||
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13 | ||
|
· | the clinical efficacy and safety of our proposed products; |
· | the superiority of our products to alternatives currently on the market; |
· | the potential advantages of our products over alternative treatment methods; and |
· | the reimbursement policies of government and third-party payors. |
14 | ||
|
· | the third parties do not successfully carry out their contractual duties; |
· | fail to meet regulatory obligations or expected deadlines; |
· | we replace a third party; or |
· | the quality or accuracy of the data obtained by third parties is compromised due to their failure to adhere to clinical protocols, regulatory requirements, or for other reasons. |
15 | ||
|
16 | ||
|
· | our board of directors is divided into three classes, with each class serving for a staggered three-year term, which prevents stockholders from electing an entirely new board of directors at an annual meeting; |
· | advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors and propose matters to be brought before an annual meeting of our stockholders may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of our company; and |
· | our board of directors may, without stockholder approval, issue series of preferred stock, or rights to acquire preferred stock, that could dilute the interest of, or impair the voting power of, holders of our common stock or could also be used as a method of discouraging, delaying or preventing a change of control. |
17 | ||
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18 | ||
|
19 | ||
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS
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ITEM 2.
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PROPERTIES
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ITEM 3.
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LEGAL PROCEEDINGS
|
20 | ||
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ITEM 4.
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MINE SAFETY DISCLOSURE
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ITEM 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
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High
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Low
|
|
||
2013
|
|
|
|
|
|
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First Quarter
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$
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1.40
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$
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1.03
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Second Quarter
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$
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1.59
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$
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1.00
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Third Quarter
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$
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3.02
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$
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1.30
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Fourth Quarter
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$
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3.04
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$
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2.07
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2012
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|
|
|
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|
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First Quarter
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$
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1.30
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$
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0.91
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Second Quarter
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$
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1.20
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$
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0.66
|
|
Third Quarter
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|
$
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1.96
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$
|
0.42
|
|
Fourth Quarter
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|
$
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1.57
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|
$
|
0.88
|
|
21 | ||
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|
Number of Securities
to be Issued upon Exercise of Outstanding Options, Warrants and Rights |
|
|
Weighted-
Average Exercise Price for Outstanding Options, Warrants and Rights |
|
Number of Securities
Remaining Available for Future Issuance under Equity compensation Plans (Excluding Securities Reflected in Column (a)) |
|
Plan Category
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(a)
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|
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(b)
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(c)
|
|
Equity compensation plans approved by security holders
|
|
|
|
|
|
|
|
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2005 Stock Plan, as amended and restated
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3,693,333
|
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$
|
1.20
|
|
-
|
|
2007 Stock Plan
|
|
6,026,819
|
|
$
|
3.17
|
|
2,027
|
|
2010 Equity Compensation Plan
|
|
9,258,680
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|
$
|
1.06
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|
4,693,332
|
|
Equity compensation plans not approved by security holders
|
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N/A
|
|
|
N/A
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N/A
|
|
Total
|
|
18,978,832
|
|
$
|
1.76
|
|
4,695,359
|
|
· | In January and February of 2013, we received and accepted a proposal from certain common stock purchase warrant holders. Pursuant to the proposal, the holders agreed to exercise certain warrants for cash in exchange for the Company: (i) reducing the current exercise price of their outstanding warrants from $3.17 to $1.25 (for 200,000 warrants) and from $2.14 to $1.25 (for 58,000 warrants), and (ii) issuing such holders replacement warrants, equal to the number of warrants exercised pursuant to the their proposal. Pursuant to the proposal, we issued an aggregate of 258,000 replacement warrants. The terms of the replacement warrants are to be substantially similar to the holders’ original warrants and have an exercise price of $1.25 and expire on March 31, 2020. |
22 | ||
|
· | In March 2013, we issued a common stock purchase warrant to purchase 10,000 shares of our common stock as compensation for business advisory services in connection with our wholly-owned subsidiary in the People’s Republic of China. The warrant has a term of 5 years and will expire on March 19, 2018, an exercise price of $1.4375 and provides for the adjustment of the purchase price and number of shares upon stock dividends and splits. The warrant does not contain any price protection provisions with regard to subsequent financings. |
· | In March 2013, the Company entered into a Loan and Security agreement for an initial $8 million term loan with an additional $2 million of borrowing capacity if certain conditions involving new partnerships are met. The loan is collateralized by substantially all of the Company’s assets, including our intellectual property. |
· | Between May and July of 2013, we received and accepted proposals from certain common stock purchase warrant holders. Pursuant to the proposals, the holders agreed to exercise their warrants to purchase 1,911,680 shares of our common stock, for cash, in exchange for us agreeing to: (i) reduce the original exercise price of the outstanding warrants from $2.13 to $1.07 for 440,000 warrants, from $2.13 to $1.25 for 958,005 warrants and from $2.14 to $1.25 for 513,675 warrants, and (ii) issue such holders a replacement warrant, equal to the number of warrants exercised pursuant to their proposal. Pursuant to the proposal, we issued an aggregate of 1,911,680 replacement warrants. The terms of the replacement warrants are substantially similar to the holders’ original warrants, other than having an exercise price of $1.25 and expiration dates of May 1, 2016 for 440,000 warrants and March 31, 2020 for 1,471,680 warrants. |
· | Between March and July of 2013, we received and accepted proposals from certain common stock purchase warrant holders. Pursuant to the proposals, the holders agreed to exercise their warrants for cash in exchange for us agreeing to issue such holders replacement warrants equal to the number of warrants exercised pursuant to the proposal. Pursuant to the proposal, we issued an aggregate of 539,324 replacement warrants. The replacement warrants have an exercise price of $1.25 and expire on March 31, 2020. |
· | In June of 2013, we issued one of our legal firms a common stock purchase warrant to purchase 150,000 shares of our common stock at an exercise price of $1.52 per share in exchange for certain legal work. The warrant has a term of 5 years and will expire on June 1, 2018. The warrant can be exercised after 6 months from the issuance date on a cashless basis at any time that the shares underlying the warrant are not subject to a registration statement. The warrant provides for an adjustment to the purchase price and number of shares underlying the warrant upon stock dividends and splits. The warrant does not contain any price protection provisions with regard to subsequent financings. |
· | In August 2013, we issued one of our advisors a common stock purchase warrant to purchase 2,000,000 shares of our common stock at an exercise price of $3.00 per share in exchange for strategic advisory services. The warrant has a term of 5 years as a result of the advisor reaching certain capital raising milestones. The warrant can be exercised after 6 months from the issuance date on a cashless basis at any time that the shares underlying the warrant are not subject to a registration statement. The warrant provides for an adjustment to the purchase price and number of shares underlying the warrant upon stock dividends and splits. The warrant does not contain any price protection provisions with regard to subsequent financings. |
· | During September 2013, we issued an aggregate of 72,440 common shares to a broker-dealer as compensation for the cash exercise of 1,448,798 outstanding common stock purchase warrants. Pursuant to the exercise, we received an aggregate of approximately $1,700,000 in proceeds. |
· |
In January 2014, we issued 459,618 shares of common stock as a result of the cashless exercise of 663,800 warrants with an average price of $1.08.
|
23 | ||
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
|
|
Year Ended December 31,
|
|
|||||||||||||
Statement of Operations Data:
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
|
|||||
Revenues
|
|
$
|
110,000
|
|
$
|
407,708
|
|
$
|
390,625
|
|
$
|
733,438
|
|
$
|
-
|
|
Total operating expenses
|
|
$
|
12,633,941
|
|
$
|
10,564,164
|
|
$
|
13,381,095
|
|
$
|
15,918,319
|
|
$
|
10,466,549
|
|
Operating loss
|
|
$
|
(12,523,941)
|
|
$
|
(10,156,456)
|
|
$
|
(12,990,470)
|
|
$
|
(15,184,881)
|
|
$
|
(10,466,549)
|
|
Interest expense
|
|
$
|
(1,394,274)
|
|
$
|
(2,699)
|
|
$
|
(821)
|
|
$
|
(2,662)
|
|
$
|
(776)
|
|
Warrant issuance and modification expense
|
|
$
|
(5,017,156)
|
|
$
|
-
|
|
$
|
-
|
|
$
|
(1,906,800)
|
|
$
|
-
|
|
Gain (loss) from change in fair value adjustment of warrant obligations
|
|
$
|
(965,329)
|
|
$
|
-
|
|
$
|
161,809
|
|
$
|
(1,352,234)
|
|
$
|
83,348
|
|
Net loss
|
|
$
|
(19,831,862)
|
|
$
|
(10,121,517)
|
|
$
|
(12,518,527)
|
|
$
|
(18,387,300)
|
|
$
|
(10,364,363)
|
|
Net loss per share - basic and diluted
|
|
$
|
(0.27)
|
|
$
|
(0.17)
|
|
$
|
(0.26)
|
|
$
|
(0.42)
|
|
$
|
(0.30)
|
|
|
|
As of December 31,
|
|
|||||||||||||
Balance Sheet Data:
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
|
|||||
Cash and equivalents
|
|
$
|
16,846,052
|
|
$
|
7,443,773
|
|
$
|
2,352,013
|
|
$
|
9,261,233
|
|
$
|
2,309,774
|
|
Working capital
|
|
$
|
11,682,987
|
|
$
|
5,896,454
|
|
$
|
590,385
|
|
$
|
7,093,237
|
|
$
|
892,552
|
|
Total assets
|
|
$
|
19,413,536
|
|
$
|
8,750,079
|
|
$
|
4,086,177
|
|
$
|
10,591,360
|
|
$
|
3,007,405
|
|
Long-term debt, net of discount
|
|
$
|
7,697,331
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
Fair value of derivative instruments
|
|
$
|
1,417,527
|
|
$
|
-
|
|
$
|
-
|
|
$
|
1,250,839
|
|
$
|
6,462,039
|
|
Total stockholders' equity (deficit)
|
|
$
|
8,418,199
|
|
$
|
6,972,633
|
|
$
|
1,659,818
|
|
$
|
7,854,350
|
|
$
|
(5,015,456)
|
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
·
|
Executive Overview
Overview discussion of our business in order to provide context for the remainder of MD&A.
|
|
·
|
Trends & Outlook
Discussion of what we view as the overall trends affecting our business and the strategy for 2014.
|
|
·
|
Critical Accounting Policies
Accounting policies that we believe are important to understanding the assumptions and judgments incorporated in our reported financial results and forecasts.
|
|
·
|
Results of Operations
Analysis of our financial results comparing the: (i) twelve month period ended December 31, 2013 to the comparable period of 2012 and (ii) twelve month period ended December 31, 2012 to the comparable period of 2011.
|
|
·
|
Liquidity and Capital Resources
An analysis of cash flows and discussion of our financial condition and future liquidity needs.
|
24 | ||
|
25 | ||
|
26 | ||
|
|
|
Year Ended December 31,
|
|
Increase (Decrease)
|
|
|||||||
|
|
2013
|
|
2012
|
|
$
|
|
%
|
|
|||
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Research & development costs
|
|
$
|
7,134,301
|
|
$
|
6,105,984
|
|
$
|
1,028,317
|
|
17
|
%
|
General & administrative expenses
|
|
|
5,254,915
|
|
|
4,247,037
|
|
|
1,007,878
|
|
24
|
%
|
Depreciation and amortization
|
|
|
244,725
|
|
|
211,143
|
|
|
33,582
|
|
16
|
%
|
Total expense
|
|
$
|
12,633,941
|
|
$
|
10,564,164
|
|
$
|
2,069,777
|
|
20
|
%
|
27 | ||
|
|
|
Year Ended December 31,
|
|
Increase (Decrease)
|
|
|||||||
|
|
2012
|
|
2011
|
|
$
|
|
%
|
|
|||
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Research & development costs
|
|
$
|
6,105,984
|
|
$
|
7,354,857
|
|
$
|
(1,248,873)
|
|
-17
|
%
|
General & administrative expenses
|
|
|
4,247,037
|
|
|
5,839,188
|
|
|
(1,592,151)
|
|
-27
|
%
|
Depreciation and amortization
|
|
|
211,143
|
|
|
187,050
|
|
|
24,093
|
|
13
|
%
|
Total expense
|
|
$
|
10,564,164
|
|
$
|
13,381,095
|
|
$
|
(2,816,931)
|
|
-21
|
%
|
28 | ||
|
|
|
Year Ended December 31,
|
|
Increase (Decrease)
|
|
|||||||
|
|
2013
|
|
2012
|
|
$
|
|
%
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
16,846,052
|
|
$
|
7,443,773
|
|
$
|
9,402,279
|
|
126
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in operating activities
|
|
$
|
(10,591,617)
|
|
$
|
(8,477,700)
|
|
$
|
(2,113,917)
|
|
25
|
%
|
Net cash used in investing activities
|
|
$
|
(537,050)
|
|
$
|
(254,858)
|
|
$
|
(282,192)
|
|
111
|
%
|
Net cash provided by financing activities
|
|
$
|
20,524,702
|
|
$
|
13,824,318
|
|
$
|
6,700,384
|
|
48
|
%
|
|
|
Year Ended December 31,
|
|
Increase (Decrease)
|
|
|||||||
|
|
2012
|
|
2011
|
|
$
|
|
%
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
7,443,773
|
|
$
|
2,352,013
|
|
$
|
5,091,760
|
|
216
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in operating activities
|
|
$
|
(8,477,700)
|
|
$
|
(8,096,696)
|
|
$
|
(381,004)
|
|
5
|
%
|
Net cash used in investing activities
|
|
$
|
(254,858)
|
|
$
|
(480,850)
|
|
$
|
225,992
|
|
-47
|
%
|
Net cash provided by financing activities
|
|
$
|
13,824,318
|
|
$
|
1,668,326
|
|
$
|
12,155,992
|
|
729
|
%
|
29 | ||
|
|
|
Less than 1
|
|
|
|
|
|
|
|
|
|
|||||
Contractual Obligations
|
|
year
|
|
1 - 3 Years
|
|
3 - 5 Years
|
|
More than 5 Years
|
|
Total
|
|
|||||
Operating facility leases
|
|
$
|
114,331
|
|
$
|
57,856
|
|
$
|
-
|
|
$
|
-
|
|
$
|
172,187
|
|
Long-term debt
|
|
|
2,939,989
|
|
|
5,060,011
|
|
|
-
|
|
|
-
|
|
|
8,000,000
|
|
Total contractual obligations
|
|
$
|
3,054,320
|
|
$
|
5,117,867
|
|
$
|
-
|
|
$
|
-
|
|
$
|
8,172,187
|
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
|
30 | ||
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
|
Page
|
Report of Independent Registered Public Accounting Firm
|
32
|
|
|
Consolidated Balance Sheets
|
33
|
|
|
Consolidated Statements of Operations and Comprehensive Loss
|
34
|
|
|
Consolidated Statements of Changes in Stockholders’ Equity |
35
|
|
|
Consolidated
Statements of Cash Flows
|
36
|
|
|
Notes to Consolidated Financial Statements
|
38
|
31 | ||
|
32 | ||
|
|
|
December 31,
|
|
||||
|
|
2013
|
|
2012
|
|
||
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
16,846,052
|
|
$
|
7,443,773
|
|
Billed and unbilled receivables
|
|
|
10,000
|
|
|
3,333
|
|
Deferred financing fees, current portion
|
|
|
507,334
|
|
|
-
|
|
Prepaid expenses
|
|
|
255,733
|
|
|
205,651
|
|
Total current assets
|
|
|
17,619,119
|
|
|
7,652,757
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
230,971
|
|
|
230,397
|
|
Patents, net
|
|
|
1,137,701
|
|
|
807,357
|
|
Deferred financing fees, net of current portion
|
|
|
360,848
|
|
|
-
|
|
Other assets
|
|
|
64,897
|
|
|
59,568
|
|
Total assets
|
|
$
|
19,413,536
|
|
$
|
8,750,079
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
$
|
1,196,190
|
|
$
|
1,199,662
|
|
Accrued bonuses
|
|
|
465,868
|
|
|
465,865
|
|
Current portion of long term debt, net of discount
|
|
|
2,763,121
|
|
|
-
|
|
Derivative instruments
|
|
|
1,417,527
|
|
|
-
|
|
Other current liabilities
|
|
|
93,426
|
|
|
90,776
|
|
Total current liabilities
|
|
|
5,936,132
|
|
|
1,756,303
|
|
|
|
|
|
|
|
|
|
Long term debt, net of discount and current portion
|
|
|
4,934,210
|
|
|
-
|
|
Other long term liabilities
|
|
|
124,995
|
|
|
21,143
|
|
Total liabilities
|
|
|
10,995,337
|
|
|
1,777,446
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies (Note 10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Preferred stock, 7,000,000 shares authorized, zero shares
issued and outstanding |
|
|
-
|
|
|
-
|
|
Common stock, $0.01 par value; 150 million shares authorized,
77,886,031 and 68,189,314 shares issued and outstanding in 2013 and 2012, respectively |
|
|
778,860
|
|
|
681,893
|
|
Additional paid-in capital
|
|
|
136,058,135
|
|
|
114,884,915
|
|
Accumulated other comprehensive income
|
|
|
7,241
|
|
|
-
|
|
Accumulated deficit
|
|
|
(128,426,037)
|
|
|
(108,594,175)
|
|
Total stockholders' equity
|
|
|
8,418,199
|
|
|
6,972,633
|
|
Total liabilities and stockholders' equity
|
|
$
|
19,413,536
|
|
$
|
8,750,079
|
|
33 | ||
|
|
|
Year Ended December 31,
|
|
|||||||
|
|
2013
|
|
2012
|
|
2011
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
110,000
|
|
$
|
407,708
|
|
$
|
390,625
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
Research and development costs
|
|
|
7,134,301
|
|
|
6,105,984
|
|
|
7,354,857
|
|
General and administrative expenses
|
|
|
5,254,915
|
|
|
4,247,037
|
|
|
5,839,188
|
|
Depreciation and amortization
|
|
|
244,725
|
|
|
211,143
|
|
|
187,050
|
|
Total operating expenses
|
|
|
12,633,941
|
|
|
10,564,164
|
|
|
13,381,095
|
|
Operating loss
|
|
|
(12,523,941)
|
|
|
(10,156,456)
|
|
|
(12,990,470)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
68,000
|
|
|
34,154
|
|
|
60,955
|
|
Interest expense
|
|
|
(1,394,274)
|
|
|
(2,699)
|
|
|
(821)
|
|
Warrant modification expense
|
|
|
(5,017,156)
|
|
|
-
|
|
|
-
|
|
Gain (loss) from change in fair value of derivative instruments
|
|
|
(965,329)
|
|
|
-
|
|
|
161,809
|
|
Litigation settlement
|
|
|
838
|
|
|
3,484
|
|
|
250,000
|
|
Total other income (expense)
|
|
|
(7,307,921)
|
|
|
34,939
|
|
|
471,943
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(19,831,862)
|
|
$
|
(10,121,517)
|
|
$
|
(12,518,527)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share - basic and diluted
|
|
$
|
(0.27)
|
|
$
|
(0.17)
|
|
$
|
(0.26)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding - basic and
diluted |
|
|
72,279,210
|
|
|
58,153,929
|
|
|
48,340,557
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(19,831,862)
|
|
$
|
(10,121,517)
|
|
$
|
(12,518,527)
|
|
Foreign currency translation adjustment
|
|
|
7,241
|
|
|
-
|
|
|
-
|
|
Comprehensive loss
|
|
$
|
(19,824,621)
|
|
$
|
(10,121,517)
|
|
$
|
(12,518,527)
|
|
34 | ||
|
|
|
Common
Stock Shares |
|
Common
Stock Amount |
|
Additional Paid-
In Capital |
|
Accumulated
Other Comprehensive Loss |
|
Accumulated
Deficit |
|
Total
Stockholders' Equity |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2011
|
|
46,897,529
|
|
$
|
468,975
|
|
$
|
93,339,506
|
|
$
|
-
|
|
$
|
(85,954,131)
|
|
$
|
7,854,350
|
|
Share based payments
|
|
-
|
|
|
-
|
|
|
2,924,089
|
|
|
-
|
|
|
-
|
|
|
2,924,089
|
|
Issuance of common stock from
warrants exercised, net of issuance costs of $158,020 |
|
1,468,775
|
|
|
14,688
|
|
|
1,653,638
|
|
|
-
|
|
|
-
|
|
|
1,668,326
|
|
Issuance of restricted common stock
and restricted common stock units in payment for 2010 executive bonuses |
|
-
|
|
|
-
|
|
|
77,500
|
|
|
-
|
|
|
-
|
|
|
77,500
|
|
Warrant issuances and modifications
|
|
-
|
|
|
-
|
|
|
1,089,030
|
|
|
-
|
|
|
-
|
|
|
1,089,030
|
|
Issuance of common stock for
prepaid consulting services |
|
315,814
|
|
|
3,158
|
|
|
561,892
|
|
|
-
|
|
|
-
|
|
|
565,050
|
|
Net loss
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(12,518,527)
|
|
|
(12,518,527)
|
|
Balance at December 31, 2011
|
|
48,682,118
|
|
|
486,821
|
|
|
99,645,655
|
|
|
-
|
|
|
(98,472,658)
|
|
|
1,659,818
|
|
Share based payments
|
|
-
|
|
|
-
|
|
|
1,369,886
|
|
|
-
|
|
|
-
|
|
|
1,369,886
|
|
Issuance of common stock at $1.02
from warrants exercised |
|
200,000
|
|
|
2,000
|
|
|
202,000
|
|
|
-
|
|
|
-
|
|
|
204,000
|
|
Issuance of common stock for
professional services, net of returned shares for amended agreement |
|
174,209
|
|
|
1,742
|
|
|
173,296
|
|
|
-
|
|
|
-
|
|
|
175,038
|
|
Issuance of common stock and
warrants from capital raises, net of issuance costs of $1,274,592 |
|
19,100,000
|
|
|
191,000
|
|
|
13,494,408
|
|
|
-
|
|
|
-
|
|
|
13,685,408
|
|
Issuance of common stock from
vested restricted stock units |
|
32,987
|
|
|
330
|
|
|
(330)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Net loss
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(10,121,517)
|
|
|
(10,121,517)
|
|
Balance at December 31, 2012
|
|
68,189,314
|
|
|
681,893
|
|
|
114,884,915
|
|
|
-
|
|
|
(108,594,175)
|
|
|
6,972,633
|
|
Share based payments
|
|
-
|
|
|
-
|
|
|
1,665,155
|
|
|
-
|
|
|
-
|
|
|
1,665,155
|
|
Issuance of common stock for
warrant exercises, net of fees of $113,200 |
|
5,302,935
|
|
|
53,029
|
|
|
5,979,277
|
|
|
|
|
|
|
|
|
6,032,306
|
|
Issuance of common stock and
replacement warrants as inducement for warrant exercises |
|
72,440
|
|
|
724
|
|
|
5,016,432
|
|
|
|
|
|
|
|
|
5,017,156
|
|
Issuance of common stock and
warrants for professional services, net of forfeited shares |
|
332,848
|
|
|
3,329
|
|
|
1,503,419
|
|
|
|
|
|
|
|
|
1,506,748
|
|
Issuance of common stock and
warrants from capital raises, net of issuance costs of $534,825 |
|
3,988,494
|
|
|
39,885
|
|
|
7,008,937
|
|
|
|
|
|
|
|
|
7,048,822
|
|
Foreign currency translation
adjustments |
|
|
|
|
|
|
|
|
|
|
7,241
|
|
|
|
|
|
7,241
|
|
Net loss
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(19,831,862)
|
|
|
(19,831,862)
|
|
Balance at December 31, 2013
|
|
77,886,031
|
|
$
|
778,860
|
|
$
|
136,058,135
|
|
$
|
7,241
|
|
$
|
(128,426,037)
|
|
$
|
8,418,199
|
|
35 | ||
|
|
|
For the Year Ended December 31,
|
|
|||||||
|
|
2013
|
|
2012
|
|
2011
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(19,831,862)
|
|
$
|
(10,121,517)
|
|
$
|
(12,518,527)
|
|
Adjustments to reconcile net loss to cash used in operating activities:
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
244,725
|
|
|
211,143
|
|
|
187,050
|
|
Share based compensation expenses
|
|
|
2,331,401
|
|
|
1,610,845
|
|
|
3,333,099
|
|
Amortization of deferred financing fees and debt discount
|
|
|
694,175
|
|
|
-
|
|
|
-
|
|
Warrant modification expense
|
|
|
5,017,156
|
|
|
-
|
|
|
-
|
|
(Gain) loss from change in fair value of warrant obligations
|
|
|
965,329
|
|
|
-
|
|
|
(161,809)
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
Billed and unbilled receivables
|
|
|
(6,667)
|
|
|
231,042
|
|
|
(234,375)
|
|
Prepaid expenses
|
|
|
125,470
|
|
|
164,117
|
|
|
(27,429)
|
|
Other current assets
|
|
|
-
|
|
|
-
|
|
|
322,127
|
|
Other assets
|
|
|
(5,183)
|
|
|
15,826
|
|
|
(14,519)
|
|
Accounts payable and accrued expenses
|
|
|
(116,750)
|
|
|
(644,022)
|
|
|
888,252
|
|
Accrued bonus expense
|
|
|
3
|
|
|
24,309
|
|
|
129,435
|
|
Other current liabilities
|
|
|
2,469
|
|
|
30,557
|
|
|
-
|
|
Other liabilities
|
|
|
(11,883)
|
|
|
-
|
|
|
-
|
|
Net cash used in operating activities
|
|
|
(10,591,617)
|
|
|
(8,477,700)
|
|
|
(8,096,696)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
Patent costs
|
|
|
(411,688)
|
|
|
(215,638)
|
|
|
(284,438)
|
|
Purchase of property and equipment
|
|
|
(125,362)
|
|
|
(39,220)
|
|
|
(196,412)
|
|
Net cash used in investing activities
|
|
|
(537,050)
|
|
|
(254,858)
|
|
|
(480,850)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock from warrants exercised
|
|
|
6,107,842
|
|
|
204,000
|
|
|
1,668,326
|
|
Proceeds from sale of common stock and warrants, net of issuance costs
|
|
|
7,048,822
|
|
|
13,685,408
|
|
|
-
|
|
Proceeds from issaunce of long-term debt, net of issuance costs
|
|
|
7,551,329
|
|
|
-
|
|
|
-
|
|
Payments on Note Payable
|
|
|
(183,291)
|
|
|
(65,090)
|
|
|
-
|
|
Net cash provided by financing activities
|
|
|
20,524,702
|
|
|
13,824,318
|
|
|
1,668,326
|
|
Effects of exchange rates on cash
|
|
|
6,244
|
|
|
-
|
|
|
-
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
9,402,279
|
|
|
5,091,760
|
|
|
(6,909,220)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of period
|
|
|
7,443,773
|
|
|
2,352,013
|
|
|
9,261,233
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of period
|
|
$
|
16,846,052
|
|
$
|
7,443,773
|
|
$
|
2,352,013
|
|
36 | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended December 31,
|
|
|||||||
|
|
2013
|
|
2012
|
|
2011
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow information:
|
|
|
|
|
|
|
|
|
|
|
Cash paid for interest
|
|
$
|
624,321
|
|
$
|
2,699
|
|
$
|
821
|
|
Cash paid for income taxes
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental schedule of non cash investing and financing activities:
|
|
|
|
|
|
|
|
|
|
|
Extinguishment of warrant obligations through exercise, expiration and modification
|
|
$
|
-
|
|
$
|
-
|
|
$
|
1,089,030
|
|
Issuance of common stock for services, net of returned shares for amended agreement
|
|
$
|
-
|
|
$
|
175,038
|
|
$
|
565,050
|
|
Issuance of common stock and options for executive bonuses
|
|
$
|
-
|
|
$
|
141,119
|
|
$
|
77,500
|
|
Financing of insurance premiums through note payable
|
|
$
|
183,472
|
|
$
|
146,452
|
|
$
|
-
|
|
Issuance of common stock for exercise of restricted stock units
|
|
$
|
-
|
|
$
|
330
|
|
$
|
-
|
|
Issuance of warrants for vendor services
|
|
$
|
658,326
|
|
$
|
-
|
|
$
|
-
|
|
Issuance of common stock for cashless exercise of warrants
|
|
$
|
587,500
|
|
$
|
-
|
|
$
|
-
|
|
Issuance of warrants for fees related to debt issaunce
|
|
$
|
452,187
|
|
$
|
-
|
|
$
|
-
|
|
Issuance of common stock for fees related to debt issuance
|
|
$
|
396,234
|
|
$
|
-
|
|
$
|
-
|
|
37 | ||
|
38 | ||
|
39 | ||
|
|
·
|
Level 1
inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.
|
|
·
|
Level 2
inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. the Black-Scholes model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, foreign exchange rates, and forward and spot prices for currencies and commodities.
|
|
·
|
Level 3
inputs are generally unobservable and typically reflect management's estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models.
|
|
December 31, 2013
|
|||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative instruments - stock purchase warrants
|
$
|
-
|
|
$
|
-
|
|
$
|
1,417,527
|
|
$
|
1,417,527
|
|
40 | ||
|
|
|
Derivative
Instruments - Stock Purchase Warrants |
|
Stock Options
|
|
||
Balance at January 1, 2011
|
|
$
|
1,250,839
|
|
$
|
-
|
|
Extinguishment through warrant exercises and modifications
|
|
|
(1,089,030)
|
|
|
-
|
|
Change in fair value
|
|
|
(161,809)
|
|
|
-
|
|
Balance at December 31, 2011
|
|
|
-
|
|
|
-
|
|
Issuance
|
|
|
-
|
|
|
-
|
|
Change in fair value
|
|
|
-
|
|
|
-
|
|
Balance at December 31, 2012
|
|
|
-
|
|
|
-
|
|
Issuance
|
|
|
452,198
|
|
|
35,000
|
|
Satisfaction of contingency
|
|
|
-
|
|
|
(54,881)
|
|
Change in fair value
|
|
|
965,329
|
|
|
19,881
|
|
Balance at December 31, 2013
|
|
$
|
1,417,527
|
|
$
|
-
|
|
41 | ||
|
|
|
Year Ended December 31,
|
|
|||||||
|
|
2013
|
|
2012
|
|
2011
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
Research and development costs
|
|
$
|
932,200
|
|
$
|
655,303
|
|
$
|
1,727,042
|
|
General and administrative expenses
|
|
|
1,399,201
|
|
|
955,542
|
|
|
1,606,057
|
|
Total
|
|
$
|
2,331,401
|
|
$
|
1,610,845
|
|
$
|
3,333,099
|
|
42 | ||
|
|
|
Number of Options
|
|
Weighted-
Average Exercise Price |
|
Weighted-
Average Remaining Contractual Life (in years) |
|
Aggregate
Intrinsic Value |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at January 1, 2013
|
|
|
14,787,287
|
|
$
|
1.98
|
|
|
6.1
|
|
$
|
1,926,000
|
|
Granted
|
|
|
3,840,962
|
|
$
|
1.11
|
|
|
|
|
|
|
|
Exercised
|
|
|
-
|
|
$
|
-
|
|
|
|
|
|
|
|
Forfeited/Expired
|
|
|
(51,042)
|
|
$
|
2.72
|
|
|
|
|
|
|
|
Outstanding at December 31, 2013
|
|
|
18,577,207
|
|
$
|
1.79
|
|
|
5.8
|
|
$
|
24,000,710
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable at December 31, 2013
|
|
|
12,659,353
|
|
$
|
2.14
|
|
|
4.5
|
|
$
|
12,938,385
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vested and expected to vest at December 31, 2013
|
|
|
18,577,207
|
|
$
|
1.79
|
|
|
5.8
|
|
$
|
24,000,710
|
|
Range of Exercise Prices
|
|
Number of Options
Outstanding |
|
Weighted-
Average Exercise Price |
|
Weighted-
Average Remaining Contractual Life (in years) |
|
Aggregate
Intrinsic Value |
|
||||
$0.50 - $1.00
|
|
|
7,400,000
|
|
$
|
0.78
|
|
|
6.3
|
|
$
|
15,734,000
|
|
$1.01 - $2.00
|
|
|
4,296,837
|
|
$
|
1.19
|
|
|
7.6
|
|
|
7,381,481
|
|
$2.01 - $3.00
|
|
|
2,077,037
|
|
$
|
2.48
|
|
|
5.4
|
|
|
885,229
|
|
$3.01 - $4.00
|
|
|
4,803,333
|
|
$
|
3.59
|
|
|
3.7
|
|
|
-
|
|
|
|
|
18,577,207
|
|
$
|
1.79
|
|
|
5.8
|
|
$
|
24,000,710
|
|
|
|
Year Ended December 31,
|
|
|||||||
|
|
2013
|
|
2012
|
|
2011
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
Annual dividend
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Expected life (in years)
|
|
|
3.0 - 6.5
|
|
|
2.0 - 4.0
|
|
|
2.0 - 3.5
|
|
Risk free interest rate
|
|
|
0.29% - 2.43%
|
|
|
0.24% - 0.65%
|
|
|
0.25% - 1.39%
|
|
Expected volatility
|
|
|
65.1% - 77.5%
|
|
|
55.5% - 77.4%
|
|
|
66.9% - 75.4%
|
|
43 | ||
|
|
|
Number of
RSU's |
|
Weighted-
Average Grant Date Fair Value |
|
||
Outstanding at January 1, 2013
|
|
|
371,491
|
|
$
|
2.10
|
|
Granted
|
|
|
30,702
|
|
$
|
1.14
|
|
Vested and converted to common shares
|
|
|
-
|
|
$
|
-
|
|
Forfeited
|
|
|
(568)
|
|
$
|
1.19
|
|
Outstanding at December 31, 2013
|
|
|
401,625
|
|
$
|
2.03
|
|
|
|
|
|
|
|
|
|
Exercisable at December 31, 2013
|
|
|
389,465
|
|
$
|
2.06
|
|
|
|
Number of
Warrants |
|
Weighted-
Average Exercised Price |
|
Weighted-
Average Remaining Contractual Life (in years) |
|
Aggregate
Intrinsic Value |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at January 1, 2013
|
|
|
19,840,176
|
|
$
|
2.08
|
|
|
3.5
|
|
$
|
854,649
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Granted
|
|
|
7,761,211
|
|
$
|
1.83
|
|
|
4.0
|
|
|
|
|
Exercised
|
|
|
(5,302,935)
|
|
$
|
1.30
|
|
|
|
|
|
|
|
Forfeited
|
|
|
(2,711,633)
|
|
$
|
3.10
|
|
|
|
|
|
|
|
Outstanding at December 31, 2013
|
|
|
19,586,819
|
|
$
|
1.96
|
|
|
3.4
|
|
$
|
21,146,495
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable at December 31, 2013
|
|
|
17,992,219
|
|
$
|
1.80
|
|
|
3.0
|
|
$
|
19,695,409
|
|
44 | ||
|
45 | ||
|
|
|
2013
|
|
2012
|
|
||
Furniture and fixtures
|
|
$
|
21,036
|
|
$
|
21,298
|
|
Computers and office equipment
|
|
|
58,741
|
|
|
89,492
|
|
Lab equipment
|
|
|
497,328
|
|
|
543,251
|
|
|
|
|
577,105
|
|
|
654,041
|
|
Less accumulated depreciation
|
|
|
(346,134)
|
|
|
(423,644)
|
|
Property and equipment, net
|
|
$
|
230,971
|
|
$
|
230,397
|
|
|
|
2013
|
|
2012
|
|
||||||||||||||
|
|
Gross
|
|
Accumulated
Amortization |
|
Net
|
|
Gross
|
|
Accumulated
Amortization |
|
Net
|
|
||||||
Patent asset
|
|
$
|
1,539,349
|
|
$
|
(401,648)
|
|
$
|
1,137,701
|
|
$
|
1,121,839
|
|
$
|
(314,482)
|
|
$
|
807,357
|
|
|
|
2013
|
|
2012
|
|
2011
|
|
|||
Current provision:
|
|
|
|
|
|
|
|
|
|
|
Federal
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
State
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Foreign
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Total current provision
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred provision (benefit):
|
|
|
|
|
|
|
|
|
|
|
Federal
|
|
|
(4,436,239)
|
|
|
(3,537,536)
|
|
|
(4,121,162)
|
|
State
|
|
|
502,696
|
|
|
(505,362)
|
|
|
(588,737)
|
|
Foreign
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Total deferred provision (benefit)
|
|
|
(3,933,543)
|
|
|
(4,042,898)
|
|
|
(4,709,899)
|
|
Change in valuation allowance
|
|
|
3,933,543
|
|
|
4,042,898
|
|
|
4,709,899
|
|
Consolidated income tax provision
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
Federal statutory rate
|
|
(34.0)
|
%
|
|
(34.0)
|
%
|
|
(34.0)
|
%
|
|
State income taxes, net of Federal benefits
|
|
(5.3)
|
%
|
|
(5.0)
|
%
|
|
(5.0)
|
%
|
|
Warrant inducement expense
|
|
9.9
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
|
Other
|
|
9.5
|
%
|
|
(0.9)
|
%
|
|
1.4
|
%
|
|
Valuation allowance
|
|
19.9
|
%
|
|
39.9
|
%
|
|
37.6
|
%
|
|
Total
|
|
0.0
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
|
46 | ||
|
|
|
2013
|
|
2012
|
|
||
Net operating loss carryforwards
|
|
$
|
31,541,018
|
|
$
|
28,564,716
|
|
Stock based compensation expense
|
|
|
9,923,714
|
|
|
9,173,701
|
|
Tax credit carryforwards and other
|
|
|
1,241,115
|
|
|
1,033,887
|
|
|
|
|
42,705,847
|
|
|
38,772,304
|
|
|
|
|
|
|
|
|
|
Valuation allowance
|
|
|
(42,705,847)
|
|
|
(38,772,304)
|
|
Net deferred tax assets
|
|
$
|
-
|
|
$
|
-
|
|
|
|
Quarter Ended
|
|
||||||||||
|
|
2013
|
|
||||||||||
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
102,500
|
|
$
|
2,500
|
|
$
|
2,500
|
|
$
|
2,500
|
|
Operating loss
|
|
$
|
(2,891,780)
|
|
$
|
(3,235,602)
|
|
$
|
(3,633,986)
|
|
$
|
(2,762,573)
|
|
Net loss
|
|
$
|
(3,590,087)
|
|
$
|
(6,251,630)
|
|
$
|
(6,686,957)
|
|
$
|
(3,303,188)
|
|
Net loss per share - basic and diluted
|
|
$
|
(0.05)
|
|
$
|
(0.09)
|
|
$
|
(0.09)
|
|
$
|
(0.04)
|
|
|
|
Quarter Ended
|
|
||||||||||
|
|
2012
|
|
||||||||||
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
156,250
|
|
$
|
78,125
|
|
$
|
170,833
|
|
$
|
2,500
|
|
Operating loss
|
|
$
|
(2,463,216)
|
|
$
|
(2,383,255)
|
|
$
|
(2,583,159)
|
|
$
|
(2,726,826)
|
|
Net loss
|
|
$
|
(2,452,781)
|
|
$
|
(2,376,381)
|
|
$
|
(2,577,391)
|
|
$
|
(2,714,964)
|
|
Net loss per share - basic and diluted
|
|
$
|
(0.05)
|
|
$
|
(0.04)
|
|
$
|
(0.04)
|
|
$
|
(0.04)
|
|
47 | ||
|
Year
|
|
Amount
|
|
|
2014
|
|
$
|
114,331
|
|
2015
|
|
|
57,856
|
|
2016
|
|
|
-
|
|
2017
|
|
|
-
|
|
2018
|
|
|
-
|
|
2019 and thereafter
|
|
|
-
|
|
Total minimum payments
|
|
$
|
172,187
|
|
48 | ||
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
49 | ||
|
Item 9B.
|
Other Information
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
50 | ||
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
ITEM 15.
|
|
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
|
|
|
|
1.
|
|
|
|
|
Financial Statements: See “Index to Financial Statements” in Part II, Item 8 of this Form 10-K.
|
|
|
|
2.
|
|
Exhibits: The exhibits listed in the accompanying index to exhibits are filed or incorporated by reference as part of this Form 10-K.
|
· | may have been qualified by disclosures that were made to the other parties in connection with the negotiation of the agreements, which disclosures are not necessarily reflected in the agreements; |
· | may apply standards of materiality that differ from those of a reasonable investor; and |
· | were made only as of specified dates contained in the agreements and are subject to later developments. |
51 | ||
|
|
|
NEURALSTEM, INC
|
||
|
|
|
||
Dated: March 10, 2014
|
|
By:
|
|
/S/ I Richard Garr
|
|
|
|
|
I Richard Garr
President and Chief Executive Officer
|
52 | ||
|
Name
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ I. Richard Garr
|
|
President, Chief Executive Officer, General Counsel and Director
|
|
March 10, 2014
|
I. Richard Garr
|
|
(Principal executive officer)
|
|
|
|
|
|
|
|
/s/ I. Richard Garr
|
|
Chief Financial Officer (Principal financial and accounting officer)
|
|
March 10, 2014
|
I. Richard Garr
|
|
|
|
|
|
|
|
|
|
/s/ Karl Johe
|
|
Chairman of the Board and Director
|
|
March 10, 2014
|
Karl Johe
|
|
|
|
|
|
|
|
|
|
/s/ William Oldaker
|
|
Director
|
|
March 10, 2014
|
William Oldaker
|
|
|
|
|
|
|
|
|
|
/s/ Scott V. Ogilvie
|
|
Director
|
|
March 10, 2014
|
Scott V. Ogilvie
|
|
|
|
|
|
|
|
|
|
/s/ Stanley Westreich
|
|
Director
|
|
March 10, 2014
|
Stanley Westreich
|
|
|
|
|
53 | ||
|
|
|
|
|
|
|
Incorporated by Reference
|
||||||
|
|
|
|
Filed/
|
|
|
|
|
|
|
|
|
Exhibit
|
|
|
|
Furnished
|
|
|
|
Exhibit
|
|
|
|
|
No.
|
|
Description
|
|
Herewith
|
|
Form
|
|
No.
|
|
File No.
|
|
Filing Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.01(i)
|
|
Amended and Restated Certificate of Incorporation of Neuralstem, Inc. filed on 9/29/05
|
|
|
|
10-K
|
|
3.01(i)
|
|
001-33672
|
|
3/31/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.02(i)
|
|
Certificate of Amendment to Certificate of Incorporation of Neuralstem, Inc. filed on 5/29/08
|
|
|
|
DEF 14A
|
|
Appendix I
|
|
001-33672
|
|
4/24/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.03(ii)
|
|
Amended and Restated Bylaws of Neuralstem, Inc. adopted on 7/16/07
|
|
|
|
10-QSB
|
|
3.2(i)
|
|
333-132923
|
|
8/14/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.01**
|
|
Amended and Restated 2005 Stock Plan adopted on 6/28/07
|
|
|
|
10-QSB
|
|
4.2(i)
|
|
333-132923
|
|
8/14/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.02**
|
|
Non-qualified Stock Option Agreement between Neuralstem, Inc. and Richard Garr dated 7/28/05
|
|
|
|
SB-2
|
|
4.4
|
|
333-132923
|
|
6/21/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.03**
|
|
Non-qualified Stock Option Agreement between Neuralstem, Inc. and Karl Johe dated 7/28/05
|
|
|
|
SB-2
|
|
4.5
|
|
333-132923
|
|
6/21/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.04**
|
|
Neuralstem, Inc. 2007 Stock Plan
|
|
|
|
10-QSB
|
|
4.21
|
|
333-132923
|
|
8/14/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.05
|
|
Form of Common Stock Purchase Warrant Issued to Karl Johe on 6/5/07
|
|
|
|
10-KSB
|
|
4.22
|
|
333-132923
|
|
3/27/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.06
|
|
Form of Placement Agent Warrant Issued to Midtown Partners & Company on 12/18/08
|
|
|
|
8-K
|
|
4.1
|
|
001-33672
|
|
12/18/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.07
|
|
Form of Consultant Common Stock Purchase Warrant issued on 1/5/09
|
|
|
|
S-3/A
|
|
10.1
|
|
333-157079
|
|
02/3/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.08
|
|
Form of Series D, E and F Warrants
|
|
|
|
8-K
|
|
4.01
|
|
001-33672
|
|
7/1/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.09
|
|
Form of Placement Agent Warrant
|
|
|
|
8-K
|
|
4.02
|
|
001-33672
|
|
7/1/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.10
|
|
Form of Consultant Warrant Issued 1/8/10
|
|
|
|
10-K
|
|
4.20
|
|
001-33672
|
|
3/31/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.11
|
|
Form of Replacement Warrant Issued 1/29/10
|
|
|
|
10-K
|
|
4.21
|
|
001-33672
|
|
3/31/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.12
|
|
Form of Series C Replacement Warrant Issued March of 2010 and May, June and July of 2013 (Original Ex. Price $2.13 and $1.25)
|
|
|
|
10-K
|
|
4.22
|
|
001-33672
|
|
3/31/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.13
|
|
Form of employee and consultant option grant pursuant to our 2007 Stock Plan and 2010 Equity Compensation Plan
|
|
|
|
10-K
|
|
4.23
|
|
001-33672
|
|
3/31/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.14
|
|
Form of Warrants dated 6/29/10
|
|
|
|
8-K
|
|
4.01
|
|
001-33672
|
|
6/29/10
|
54 | ||
|
4.15**
|
|
Amended Neuralstem 2010 Equity Compensation Plan adopted on June 21, 2013
|
|
|
|
DEF 14A
|
|
Appendix I
|
|
001-33672
|
|
4/30/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.16
|
|
Form of Consultant Warrant issued 10/1/09 and 10/1/10
|
|
|
|
S-3
|
|
4.07
|
|
333-169847
|
|
10/8/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.17**
|
|
Form of Restricted Stock Award Agreement pursuant to our 2007 Stock Plan and 2010 Equity Compensation Plan
|
|
|
|
S-8
|
|
4.06
|
|
333-172563
|
|
3/1/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.18**
|
|
Form of Restricted Stock Unit Agreement
|
|
|
|
S-8
|
|
4.08
|
|
333-172563
|
|
3/1/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.19
|
|
Form of Common Stock Purchase Warrant issued pursuant to February 2012 registered offering
|
|
|
|
8-K
|
|
4.01
|
|
001-33672
|
|
2/8/12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.20
|
|
Form of Common Stock Purchase Warrant issued to Consultants in June of 2012 and March 19, 2013
|
|
|
|
10-Q
|
|
4.20
|
|
001-33672
|
|
8/9/12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.21
|
|
Form of Underwriter Warrant issued to Aegis Capital Corp. on 8/20/12
|
|
|
|
8-K
|
|
4.1
|
|
001-33672
|
|
8/17/12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.22
|
|
Form of Placement Agent Warrant issued to Aegis Capital Corp. on 9/13/12
|
|
|
|
8-K
|
|
4.1
|
|
001-33672
|
|
9/19/12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.23
|
|
Form of Consulting Warrant issued January 2011 and March 2012
|
|
|
|
S-3
|
|
4.01
|
|
333-188859
|
|
5/24/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Replacement Warrant issued January, February and May of 2013 (Original Ex. Prices $3.17 and $2.14)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.24
|
|
Form of Lender Warrant issued March 22, 2013
|
|
|
|
8-K
|
|
4.01
|
|
011-33672
|
|
3/27/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.25
|
|
Form of Advisor Warrant issued March 22, 2013
|
|
|
|
8-K
|
|
4.02
|
|
011-33672
|
|
3/27/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.26
|
|
Form of Warrant issued June of 2013 to Legal Counsel
|
|
|
|
10-Q
|
|
4.26
|
|
001-33672
|
|
8/8/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.27
|
|
Form of Warrant issued in September 2013 in connection with Issuer’s registered direct offering
|
|
|
|
8-K
|
|
4.01
|
|
011-33672
|
|
9/10/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.28
|
|
Form of Warrant issued to strategic advisor in August 2013
|
|
|
|
10-Q
|
|
4.28
|
|
001-33672
|
|
11/12/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.29
|
|
Form of Investor Warrant issued January 2014
|
|
|
|
8-K
|
|
4.01
|
|
001-33672
|
|
1/6/14
|
55 | ||
|
10.01**
|
|
Employment Agreement with I. Richard Garr dated January 1, 2007 and amended as of November 1, 2005
|
|
|
|
SB-2
|
|
10.1
|
|
333-132923
|
|
6/21/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.02**
|
|
Amended terms to the Employment Agreement of I Richard Garr dated January 1, 2008
|
|
|
|
10-K
|
|
10.02
|
|
001-33672
|
|
3/31/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.03**
|
|
Employment Agreement with Karl Johe dated January 1, 2007 and amended as of November 1, 2005
|
|
|
|
SB-2
|
|
10.2
|
|
333-132923
|
|
6/21/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.04**
|
|
Amended terms to the Employment Agreement of Karl Johe dated January 1, 2009
|
|
|
|
10-K
|
|
10.04
|
|
001-33672
|
|
3/31/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.05**
|
|
Employment Agreement with Thomas Hazel, Ph.D dated August 11, 2008
|
|
|
|
10-K/A
|
|
10.05
|
|
001-33672
|
|
10/5/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.06
|
|
Consulting Agreement dated January 2010 between Market Development Consulting Group and the Company and amendments No. 1 and 2.
|
|
|
|
10-K
|
|
10.07
|
|
001-33672
|
|
3/16/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.07**
|
|
Renewal of I. Richard Garr Employment Agreement dated 7/25/12
|
|
|
|
8-K
|
|
10.01
|
|
001-33672
|
|
7/27/12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.08**
|
|
Renewal of Dr. Karl Johe Employment Agreement dated 7/25/12
|
|
|
|
8-K
|
|
10.02
|
|
001-33672
|
|
7/27/12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.09**
|
|
Renewal of Dr. Tom Hazel Employment Agreement dated 7/25/12
|
|
|
|
8-K
|
|
10.03
|
|
001-33672
|
|
7/27/12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.10
|
|
Loan and Security Agreement dated March 2013
|
|
|
|
8-K
|
|
10.01
|
|
011-33672
|
|
3/27/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.11
|
|
Intellectual Property and Security Agreement dated March 2013
|
|
|
|
8-K
|
|
10.02
|
|
011-33672
|
|
3/27/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.12
|
|
At the Market Offering Agreement entered into on October 25, 2013
|
|
|
|
8-K
|
|
10.01
|
|
011-33672
|
|
10/25/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.13
|
|
Form of Outside Director Agreement
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14.01
|
|
Neuralstem Code of Ethics
|
|
|
|
SB-2
|
|
14.1
|
|
333-132923
|
|
6/21/06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14.02
|
|
Neuralstem Financial Code of Profession Conduct adopted on May 16, 2007
|
|
|
|
8-K
|
|
14.2
|
|
333-132923
|
|
6/6/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21.01
|
|
Subsidiaries of Registrant
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23.01
|
|
Consent of Stegman & Company
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.1
|
|
Certification of the Principal Executive Officer and Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
*
|
|
|
|
|
|
|
|
|
56 | ||
|
32.1
|
|
Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. § 1350
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
***
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
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***
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase
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***
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase
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***
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101.LAB
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XBRL Taxonomy Extension Label Linkbase
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***
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase
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***
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57 | ||
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Member
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Chairperson
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Audit Committee
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Compensation/Nominating Committee
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Corporate Governance Committee
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“
NEURALSTEM, INC.
”
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By:
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Name:
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Title:
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DIRECTOR
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Name:
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Address:
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/s/ Stegman & Company
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Date: March 10, 2014
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By: /s/
I.
Richard Garr
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I. Richard Garr,
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Chief Executive Officer and Chief Financial Officer
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Date: March 10, 2014
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By:
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/s/ I. Richard Garr
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I. Richard Garr
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Chief Executive Officer and Chief Financial Officer
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