x
|
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
|
California
|
68-0454536
|
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
Title
of each class
|
Name
of each exchange on which registered
|
|
Common
Stock, $0.01 par value per share
|
NYSE
Amex
|
Large
accelerated filer
|
o
|
Accelerated
filer
|
o
|
Non-accelerated
filer
|
o
|
Smaller
reporting company
|
x
|
Page
|
||
PART
I
|
||
ITEM
1.
|
BUSINESS
|
4
|
ITEM 1A.
|
RISK FACTORS
|
10
|
ITEM 1B.
|
UNRESOLVED STAFF COMMENTS
|
23
|
ITEM
2.
|
PROPERTIES
|
23
|
ITEM
3.
|
LEGAL PROCEEDINGS
|
23
|
ITEM
4.
|
(Removed
and Reserved)
|
23
|
PART
II
|
||
ITEM
5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED
STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES
|
24
|
ITEM
6.
|
SELECTED FINANCIAL DATA
|
27
|
ITEM
7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
|
28
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
|
37
|
ITEM
8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA
|
38
|
ITEM
9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
|
66
|
ITEM 9A
|
CONTROLS AND PROCEDURES
|
66
|
ITEM 9A(T)
|
CONTROLS AND PROCEDURES
|
66
|
ITEM 9B.
|
OTHER INFORMATION
|
66
|
PART
III
|
||
ITEM
10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE
|
67
|
ITEM
11.
|
EXECUTIVE COMPENSATION
|
67
|
ITEM
12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
67
|
ITEM
13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
AND DIRECTOR INDEPENDENCE
|
67
|
ITEM
14.
|
PRINCIPAL ACCOUNTING FEES AND
SERVICES
|
67
|
PART
IV
|
||
ITEM
15.
|
EXHIBITS, FINANCIAL STATEMENT
SCHEDULES
|
68
|
ITEM 1.
|
BUSINESS
|
•
|
preclinical
laboratory tests, animal studies and formulation studies all performed in
accordance with the FDA’s Good Laboratory Practice
regulations;
|
|
•
|
submission
to the FDA of an Investigational New Drug (“IND”) application for human
clinical testing, which must become effective before human clinical trials
may begin;
|
|
•
|
performance
of adequate and well-controlled clinical trials to establish the safety
and efficacy of the product candidate for each proposed indication; these
clinical trials must be conducted in accordance with Good Clinical
Practice (“GCP”) Guidelines, including Institutional Review Board
oversight of the consent of subjects and registration of applicable
studies with clinicaltrials.gov;
|
|
•
|
submission
to the FDA of a New Drug Application (“NDA”) including payment of
substantial UserFees;
|
|
•
|
satisfactory
completion of an FDA inspection of the manufacturing facility or
facilities, including those of third-parties, at which the product is
produced to assess compliance with strictly enforced current GMP
regulations, as well as FDA audit for GCP compliance of one or more
clinical investigator sites; and
|
|
•
|
FDA
review and approval of the NDA before any commercial marketing, sale or
shipment of the product.
|
•
|
the
FDA’s Quality Systems Regulations (“QSRs”), which require manufacturers to
follow stringent design, testing, production, control, labeling,
packaging, storage, shipping, documentation and other quality assurance
procedures during all aspects of the manufacturing
process;
|
||
•
|
labeling
regulations which impose restrictions on labeling and promotional
activities, and FDA prohibitions against the promotion of products for
uncleared, unapproved, or “off-label” uses;
|
||
•
|
post-market
surveillance requirements which apply when necessary to protect the public
health or to provide additional safety and effectiveness data for the
device;
|
||
•
|
the
FDA Medical Device Reporting regulations, which require that manufacturers
report to the FDA if their device may have caused or contributed to a
death or serious injury or malfunctioned in a way that would likely cause
or contribute to a death or serious injury if it were to recur;
and
|
||
•
|
notices
of correction or removal, and recall regulations.
|
ITEM 1A
.
|
RISK
FACTORS
|
•
|
the
scope, rate of progress and cost of our pre-clinical studies and clinical
trials and other research and development activities;
|
||||
•
|
future
clinical trial results;
|
||||
•
|
the
terms and timing of any collaborative, licensing and other arrangements
that we may establish;
|
||||
•
|
the
cost and timing of regulatory approvals;
|
||||
•
|
the
cost of establishing clinical and commercial supplies of our product
candidates and any products that we may develop;
|
||||
•
|
the
effect of competing technological and market developments;
|
||||
•
|
the
cost of filing, prosecuting, defending and enforcing any patent claims and
other intellectual property rights; and
|
||||
•
|
the
extent to which we acquire or invest in businesses, products and
technologies, although we currently have no commitments or agreements
relating to any of these types of
transactions.
|
•
|
conduct
pre-clinical studies and clinical trials for our product candidates in
different indications;
|
||||
•
|
develop,
formulate, manufacture and commercialize our product candidates either
independently or with partners;
|
||||
•
|
pursue,
acquire or in-license additional compounds, products or technologies, or
expand the use of our technology;
|
||||
•
|
maintain,
defend and expand the scope of our intellectual property;
and
|
||||
•
|
hire
additional qualified personnel.
|
•
|
undertake
and complete clinical trials to demonstrate the efficacy and safety of our
product candidates;
|
||||
•
|
maintain
and expand our intellectual property rights;
|
||||
•
|
obtain
marketing and other approvals from the FDA and other regulatory agencies;
and
|
||||
•
|
select
collaborative partners with suitable manufacturing and commercial
capabilities.
|
•
|
the
failure of our product candidates to demonstrate safety and
efficacy;
|
|||
•
|
the
high cost of clinical trials and our lack of financial and other
resources; and
|
|||
•
|
our
inability to partner with firms with sufficient resources to assist us in
conducting clinical trials.
|
•
|
delays
in identifying and agreeing on acceptable terms with prospective clinical
trial sites;
|
||||
•
|
slower
than expected rates of patient recruitment and enrollment;
|
||||
•
|
increases
in time required to complete monitoring of patients during or after
participation in a trial; and
|
||||
•
|
unexpected
need for additional patient-related data.
|
•
|
perceptions
by members of the healthcare community, including physicians, about the
safety and effectiveness of our products;
|
||
•
|
published
studies demonstrating the cost-effectiveness of our products relative to
competing products;
|
||
•
|
availability
of reimbursement for our products from government or healthcare payers;
and
|
||
•
|
effectiveness
of marketing and distribution efforts by us and our licensees and
distributors, if any.
|
•
|
developing
drugs and devices;
|
|
•
|
conducting
preclinical testing and human clinical trials;
|
|
•
|
obtaining
FDA and other regulatory approvals of product
candidates;
|
|
•
|
formulating
and manufacturing products; and
|
|
•
|
launching,
marketing, distributing and selling
products.
|
•
|
develop
and patent processes or products earlier than we will;
|
|
•
|
develop
and commercialize products that are less expensive or more efficient than
any products that we may develop;
|
|
•
|
obtain
regulatory approvals for competing products more rapidly than we will;
and
|
|
•
|
improve
upon existing technological approaches or develop new or different
approaches that render any technology or products we develop obsolete or
uncompetitive.
|
•
|
the
results of preclinical or clinical trials relating to our product
candidates;
|
|||||||
•
|
the
announcement of new products by us or our competitors;
|
|||||||
•
|
announcement
of partnering arrangements by us or our competitors;
|
|||||||
•
|
quarterly
variations in our or our competitors’ results of
operations;
|
|||||||
•
|
announcements
by us related to litigation;
|
|||||||
•
|
changes
in our earnings estimates, investors’ perceptions, recommendations by
securities analysts or our failure to achieve analysts’ earning
estimates;
|
|||||||
•
|
developments
in our industry; and
|
|||||||
•
|
General,
economic and market conditions, including the recent volatility in the
financial markets and decrease in consumer confidence and other
factors unrelated to our operating performance or the operating
performance of our competitors.
|
•
|
a
classified board so that only one of the three classes of directors on our
Board of Directors is elected each year;
|
||||
•
|
elimination
of cumulative voting in the election of directors;
|
||||
•
|
procedures
for advance notification of shareholder nominations and
proposals;
|
||||
•
|
the
ability of our Board of Directors to amend our bylaws without shareholder
approval; and
|
||||
•
|
the
ability of our Board of Directors to issue up to 5,000,000 shares of
preferred stock without shareholder approval upon the terms and conditions
and with the rights, privileges and preferences as our Board of Directors
may determine.
|
ITEM 1B.
|
UNRESOLVED
STAFF COMMENTS
|
ITEM 2.
|
PROPERTIES
|
ITEM 3.
|
LEGAL
PROCEEDINGS
|
ITEM 4.
|
(REMOVED
AND RESERVED)
|
ITEM 5.
|
MARKET
FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES
|
2009
|
2008
|
|||||||||||||||
High
|
Low
|
High
|
Low
|
|||||||||||||
First
Quarter
|
2.95 | 1.02 | 2.41 | 2.15 | ||||||||||||
Second
Quarter
|
3.24 | 1.95 | 2.10 | 2.09 | ||||||||||||
Third
Quarter
|
2.57 | 1.62 | 1.70 | 1.57 | ||||||||||||
Fourth
Quarter
|
2.39 | 1.63 | 1.14 | 1.02 |
10/07 | 12/07 | 12/08 | 12/09 | |||||||||||||||||
NovaBay
Pharmaceuticals, Inc.
|
100.00 | 103.84 | 28.18 | 56.91 | ||||||||||||||||
NYSE
Amex Composite
|
100.00 | 101.45 | 61.54 | 83.49 | ||||||||||||||||
RDG
MicroCap Biotechnology
|
100.00 | 84.69 | 39.20 | 41.48 |
ITEM
6.
|
SELECTED
FINANCIAL DATA
|
Year
Ended December 31,
|
||||||||||||||||||||
2005
|
2006
|
2007
|
2008
|
2009
|
||||||||||||||||
(in
thousands, except per share data)
|
||||||||||||||||||||
Statements
of Operations Data:
|
||||||||||||||||||||
Revenue
|
$ | - | $ | 1,533 | $ | 5,913 | $ | 6,722 | $ | 15,684 | ||||||||||
Operating
expenses:
|
||||||||||||||||||||
Research
and development
|
1,952 | 4,087 | 7,421 | 9,595 | 7,337 | |||||||||||||||
General
and administrative
|
1,617 | 2,972 | 4,368 | 5,636 | 5,607 | |||||||||||||||
Total
operating expenses
|
3,569 | 7,059 | 11,789 | 15,231 | 12,944 | |||||||||||||||
Other
income (expense), net
|
106 | 240 | 488 | 397 | (36 | ) | ||||||||||||||
Net
income (loss) before income taxes
|
(3,463 | ) | (5,286 | ) | (5,388 | ) | (8,112 | ) | 2,704 | |||||||||||
Provision
for income taxes
|
- | - | (12 | ) | (2 | ) | (7 | ) | ||||||||||||
Net
income (loss) before income taxes
|
$ | (3,463 | ) | $ | (5,286 | ) | $ | (5,400 | ) | $ | (8,114 | ) | $ | 2,697 | ||||||
Net
income (loss) per share:
|
||||||||||||||||||||
Basic
|
$ | (0.71 | ) | $ | (0.92 | ) | $ | (0.60 | ) | $ | (0.38 | ) | $ | 0.12 | ||||||
Diluted
|
$ | (0.71 | ) | $ | (0.92 | ) | $ | (0.60 | ) | $ | (0.38 | ) | $ | 0.12 | ||||||
Shares
used in per share calculations:
|
||||||||||||||||||||
Basic
|
4,852 | 5,715 | 8,974 | 21,312 | 22,404 | |||||||||||||||
Diluted
|
4,852 | 5,715 | 8,974 | 21,312 | 23,115 |
Year
Ended December 31,
|
||||||||||||||||||||
2005
|
2006
|
2007
|
2008
|
2009
|
||||||||||||||||
(in
thousands)
|
||||||||||||||||||||
Balance
Sheet Data:
|
||||||||||||||||||||
Cash,
cash equivalents and short-term investments
|
$ | 3,212 | $ | 11,086 | $ | 22,353 | $ | 12,099 | $ | 10,992 | ||||||||||
Working
capital
|
2,985 | 7,926 | 18,194 | 8,033 | 11,568 | |||||||||||||||
Total
assets
|
3,562 | 11,866 | 23,922 | 13,969 | 17,523 | |||||||||||||||
Capital
lease obligation—current and non-current
|
- | - | 86 | 49 | 7 | |||||||||||||||
Equipment
loan—current and non-current
|
- | - | 716 | 836 | 470 | |||||||||||||||
Deferred
revenue—current and non-current
|
- | 9,167 | 7,517 | 4,167 | 2,167 | |||||||||||||||
Convertible
notes payable
|
- | - | - | - | - | |||||||||||||||
Convertible
preferred stock
|
175 | 192 | - | - | - | |||||||||||||||
Common
stock and additional paid-in capital
|
10,869 | 14,683 | 32,797 | 33,933 | 37,236 | |||||||||||||||
Total
stockholders’ equity
|
3,252 | 1,813 | 14,320 | 7,345 | 13,345 |
ITEM 7.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
-
|
a
decrease in clinical costs of $1.7 million resulting from lower costs
related to our trials in
2009;
|
-
|
a
decrease in employee costs of $0.5 million resulting from staffing cuts in
late 2008; and
|
-
|
a
decrease of $0.3 million in development costs due to reduced process
development activites;
|
Quarter
Ended
|
||||||||||||||||||||||||||||||||
March
31,
|
June
30,
|
Sept.
30,
|
Dec.
31,
|
March
31,
|
June
30,
|
Sept.
30,
|
Dec.
31,
|
|||||||||||||||||||||||||
2008
|
2008
|
2008
|
2008
|
2009
|
2009
|
2009
|
2009
|
|||||||||||||||||||||||||
(in
thousands, except per share data)
|
||||||||||||||||||||||||||||||||
Statements
of
Operations
Data:
|
||||||||||||||||||||||||||||||||
Revenue
|
$ | 1,492 | $ | 1,442 | $ | 1,592 | $ | 2,196 | $ | 2,611 | $ | 2,357 | $ | 3,224 | $ | 7,492 | ||||||||||||||||
Operating
expenses:
|
||||||||||||||||||||||||||||||||
Research
and
development
|
2,762 | 2,307 | 1,599 | 2,927 | 1,361 | 1,444 | 2,004 | 2,528 | ||||||||||||||||||||||||
General
and
administrative
|
1,569 | 1,640 | 1,559 | 868 | 1,579 | 1,191 | 1,309 | 1,528 | ||||||||||||||||||||||||
Total
operating
expenses
|
4,331 | 3,947 | 3,158 | 3,795 | 2,940 | 2,635 | 3,313 | 4,056 | ||||||||||||||||||||||||
Other
income
(expense),
net
|
163 | 94 | 77 | 63 | 11 | (11 | ) | (22 | ) | (14 | ) | |||||||||||||||||||||
Net
income (loss)
before
income taxes
|
(2,676 | ) | (2,411 | ) | (1,489 | ) | (1,536 | ) | (318 | ) | (289 | ) | (111 | ) | 3,422 | |||||||||||||||||
Provision
for income
taxes
|
(2 | ) | - | - | - | - | - | - | (7 | ) | ||||||||||||||||||||||
Net
income (loss)
after
income taxes
|
$ | (2,678 | ) | $ | (2,411 | ) | $ | (1,489 | ) | $ | (1,536 | ) | $ | (318 | ) | $ | (289 | ) | $ | (111 | ) | $ | 3,415 | |||||||||
Net
income (loss)
per
share:
|
||||||||||||||||||||||||||||||||
Basic
|
$ | (0.13 | ) | $ | (0.11 | ) | $ | (0.07 | ) | $ | (0.07 | ) | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.00 | ) | $ | 0.15 | |||||||||
Diluted
|
$ | (0.13 | ) | $ | (0.11 | ) | $ | (0.07 | ) | $ | (0.07 | ) | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.00 | ) | $ | 0.14 | |||||||||
Shares
used in per
share
calculations:
|
||||||||||||||||||||||||||||||||
Basic
|
21,288 | 21,334 | 21,443 | 21,469 | 21,620 | 21,931 | 23,251 | 23,253 | ||||||||||||||||||||||||
Diluted
|
21,288 | 21,334 | 21,443 | 21,469 | 21,620 | 21,931 | 23,251 | 23,935 |
Contractual
Obligations
|
Total
|
Less
Than 1year
|
1
- 3 Years
|
3
- 5 Years
|
More
Than 5 Years
|
|||||||||||||||
Operating
leases
|
$ | 5,410 | $ | 901 | $ | 1,914 | $ | 2,007 | $ | 588 | ||||||||||
Captial
lease
|
7 | 7 | - | - | - | |||||||||||||||
Equipment
loan
|
505 | 396 | 109 | - | - | |||||||||||||||
$ | 5,922 | $ | 1,304 | $ | 2,023 | $ | 2,007 | $ | 588 |
|
•
|
the
scope, rate of progress and cost of our pre-clinical studies and clinical
trials and other research and development
activities;
|
|
•
|
future
clinical trial results;
|
|
•
|
the
terms and timing of any collaborative, licensing and other arrangements
that we may establish;
|
|
•
|
the
cost and timing of regulatory
approvals;
|
|
•
|
the
cost of establishing clinical and commercial supplies of our product
candidates and any products that we may
develop;
|
|
•
|
the
effect of competing technological and market
developments;
|
|
•
|
the
cost of filing, prosecuting, defending and enforcing any patent claims and
other intellectual property rights;
and
|
|
•
|
the
extent to which we acquire or invest in businesses, products and
technologies, although we currently have no commitments or agreements
relating to any of these types of
transactions.
|
ITEM 7A.
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
|
ITEM 8.
|
FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA
|
INDEX
TO CONSOLIDATED FINANCIAL STATEMENTS
|
||
Page
|
||
Report
of Independent Registered Public Accounting Firm
|
39
|
|
Consolidated
Balance Sheets as of December 31, 2008 and 2009
|
40
|
|
Consolidated
Statements of Operations for the Years Ended December 31, 2007, 2008 and
2009 and for the cumulative period from July 1, 2002 ( date of development
stage inception) to December 31, 2009
|
41
|
|
Consolidated
Statements of Stockholders’ Equity for the cumulative period from July 1,
2002 (date of development stage inception) to December 31,
2009
|
42
|
|
Consolidated
Statements of Cash Flows for the Years Ended December 31, 2007, 2008 and
2009 and for the cumulative period from July 1, 2002 ( date of development
stage inception) to December 31, 2009
|
46
|
|
/s/
Davidson & Company LLP
|
|
Chartered
Accountants
|
Decmber
31,
|
December
31,
|
|||||||
2008
|
2009
|
|||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 12,099 | $ | 10,992 | ||||
Short-term
investments
|
- | 300 | ||||||
Accounts
receivable
|
- | 3,801 | ||||||
Prepaid
expenses and other current assets
|
414 | 513 | ||||||
Total
current assets
|
12,513 | 15,606 | ||||||
Other
Assets
|
- | 105 | ||||||
Property
and equipment, net
|
1,456 | 1,812 | ||||||
TOTAL
ASSETS
|
$ | 13,969 | $ | 17,523 | ||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
Liabilities:
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$ | 406 | $ | 272 | ||||
Accrued
liabilities
|
1,166 | 1,228 | ||||||
Capital
lease obligation
|
42 | 7 | ||||||
Equipment
loan
|
366 | 364 | ||||||
Deferred
revenue
|
2,500 | 2,167 | ||||||
Total
current liabilities
|
4,480 | 4,038 | ||||||
Deferred
Tax
|
- | 34 | ||||||
Capital
lease obligation - non-current
|
7 | - | ||||||
Equipment
loan - non-current
|
470 | 106 | ||||||
Deferred
revenue - non-current
|
1,667 | - | ||||||
Total
liabilities
|
6,624 | 4,178 | ||||||
Stockholders'
Equity:
|
||||||||
Common
stock, $0.01 par value; 65,000 shares authorized at December 31, 2009 and
December 31, 2008; 23,254 and 21,471 shares issued and outstanding at
December 31, 2009 and December 31, 2008, respectively
|
215 | 233 | ||||||
Additional
paid-in capital
|
33,718 | 37,003 | ||||||
Accumulated
other comprehensive income (loss)
|
- | - | ||||||
Accumulated
deficit during development stage
|
(26,588 | ) | (23,891 | ) | ||||
Total
stockholders' equity
|
7,345 | 13,345 | ||||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$ | 13,969 | $ | 17,523 |
Cumulative Period
|
||||||||||||||||
from
July 1, 2002
|
||||||||||||||||
(date
of
|
||||||||||||||||
development stage
|
||||||||||||||||
inception)
to
|
||||||||||||||||
Year
Ended December 31,
|
December
31,
|
|||||||||||||||
2007
|
2008
|
2009
|
2009
|
|||||||||||||
REVENUE
|
||||||||||||||||
License
and collaboration revenue
|
$ | 5,913 | $ | 6,722 | $ | 15,684 | $ | 29,852 | ||||||||
Total
revenue
|
5,913 | 6,722 | 15,684 | 29,852 | ||||||||||||
EXPENSES
|
||||||||||||||||
Operating
Expenses:
|
||||||||||||||||
Research
and development
|
7,421 | 9,595 | 7,337 | 32,344 | ||||||||||||
General
and administrative
|
4,368 | 5,636 | 5,607 | 22,571 | ||||||||||||
Total
operating expenses
|
11,789 | 15,231 | 12,944 | 54,915 | ||||||||||||
Other
income (loss), net
|
488 | 397 | (36 | ) | 1,193 | |||||||||||
Net
income (loss) before income taxes
|
(5,388 | ) | (8,112 | ) | 2,704 | (23,870 | ) | |||||||||
Provision
for income taxes
|
(12 | ) | (2 | ) | (7 | ) | (21 | ) | ||||||||
Net
income (loss) before income taxes
|
$ | (5,400 | ) | $ | (8,114 | ) | $ | 2,697 | $ | (23,891 | ) | |||||
Net
income (loss) per share:
|
||||||||||||||||
Basic
|
$ | (0.60 | ) | $ | (0.38 | ) | $ | 0.12 | ||||||||
Diluted
|
$ | (0.60 | ) | $ | (0.38 | ) | $ | 0.12 | ||||||||
Shares
used in per share calculations:
|
||||||||||||||||
Basic
|
8,974 | 21,312 | 22,404 | |||||||||||||
Diluted
|
8,974 | 21,312 | 23,115 |
Preferred
Stock
|
Common
Stock
|
Additional
Paid-In
|
Stock
Subscription
|
Accumulated
Other Compre-hensive Income
|
Accumulated
Deficit During Development
|
Total
Stockholders'
|
||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital | Receivable | (Loss) | Stage | Equity | ||||||||||||||||||||||||||||
Balance
at July 1, 2002
|
- | $ | - | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||||
Comprehensive
loss:
|
||||||||||||||||||||||||||||||||||||
Net
loss
|
- | - | - | - | - | - | - | (544 | ) | (544 | ) | |||||||||||||||||||||||||
Total
comprehensive
loss
|
(544 | ) | ||||||||||||||||||||||||||||||||||
Issuance
of Series A
preferred
stock and
common
stock for
acquisition
of LLC
|
2,723 | 27 | 3,902 | 39 | 462 | - | - | - | 528 | |||||||||||||||||||||||||||
Stock-based
compensation
expense
related
to non-
employee
stock options
|
- | - | - | - | 15 | - | - | - | 15 | |||||||||||||||||||||||||||
Sale
of stock warrants
|
- | - | - | - | 10 | - | - | - | 10 | |||||||||||||||||||||||||||
Balance
at December 31, 2002
|
2,723 | 27 | 3,902 | 39 | 487 | - | - | (544 | ) | 9 | ||||||||||||||||||||||||||
Comprehensive
loss:
|
||||||||||||||||||||||||||||||||||||
Net
loss
|
- | - | - | - | - | - | - | (977 | ) | (977 | ) | |||||||||||||||||||||||||
Total
comprehensive
loss
|
(977 | ) | ||||||||||||||||||||||||||||||||||
Issuance
of Series A
preferred
stock
|
492 | 5 | - | - | 192 | - | - | - | 197 | |||||||||||||||||||||||||||
Issuance
of Series B
preferred
stock net of
issuance
costs of $86
|
3,258 | 33 | - | - | 1,413 | - | - | - | 1,446 | |||||||||||||||||||||||||||
Issuance
of stock
|
- | - | 25 | - | 7 | - | - | - | 7 | |||||||||||||||||||||||||||
Issuance
of stock for
option
exercises
|
- | - | 40 | 1 | 7 | - | - | - | 8 | |||||||||||||||||||||||||||
Issuance
of stock for
warrant
exercises
|
- | - | 137 | 1 | 109 | - | - | - | 110 | |||||||||||||||||||||||||||
Stock-based
compensation
expense
related
to non-employee
stock
options
|
- | - | - | - | 2 | - | - | - | 2 | |||||||||||||||||||||||||||
Balance
at December 31, 2003
|
6,473 | 65 | 4,104 | 41 | 2,217 | - | - | (1,521 | ) | 802 | ||||||||||||||||||||||||||
Comprehensive
loss:
|
||||||||||||||||||||||||||||||||||||
Net
loss
|
- | - | - | - | - | - | - | (2,804 | ) | (2,804 | ) | |||||||||||||||||||||||||
Total
comprehensive loss
|
(2,804 | ) | ||||||||||||||||||||||||||||||||||
Issuance
of Series B
preferred
stock net of
issuance
costs of $127
|
2,694 | 27 | - | - | 1,112 | - | - | - | 1,139 | |||||||||||||||||||||||||||
Issuance
of Series B
preferred
stock upon
conversion
of notes
|
913 | 9 | - | - | 420 | - | - | - | 429 | |||||||||||||||||||||||||||
Issuance
of Series C
preferred
stock net of
issuance
costs of $123
|
6,311 | 63 | - | - | 5,178 | (873 | ) | - | - | 4,368 | ||||||||||||||||||||||||||
Issuance
of stock for
option
exercises
|
- | - | 5 | - | 1 | - | - | - | 1 | |||||||||||||||||||||||||||
Issuance
of stock for
warrant
exercises
|
- | - | 31 | - | 37 | - | - | - | 37 | |||||||||||||||||||||||||||
Issuance
of stock for
Series
B offering costs
|
- | - | 368 | 4 | 106 | - | - | - | 110 | |||||||||||||||||||||||||||
Issuance
of stock for
services
|
- | - | 15 | - | 4 | - | - | - | 4 | |||||||||||||||||||||||||||
Stock-based
compensation
expense
related
to non-
employee
stock options
|
- | - | - | - | 7 | - | - | - | 7 | |||||||||||||||||||||||||||
Balance
at December 31, 2004
|
16,391 | 164 | 4,523 | 45 | 9,082 | (873 | ) | - | (4,325 | ) | 4,093 |
Preferred
Stock
|
Common
Stock
|
Additional
Paid-In
|
Stock
Subscription
|
Accumulated
Other Compre-hensive Income
|
Accumulated
Deficit During Development
|
Total
Stockholders'
|
||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital | Receivable | (Loss) | Stage | Equity | ||||||||||||||||||||||||||||
Balance
at December 31, 2004
|
16,391 | 164 | 4,523 | 45 | 9,082 | (873 | ) | - | (4,325 | ) | 4,093 | |||||||||||||||||||||||||
Comprehensive
loss:
|
||||||||||||||||||||||||||||||||||||
Net
loss
|
- | - | - | - | - | - | - | (3,463 | ) | (3,463 | ) | |||||||||||||||||||||||||
Change
in unrealized
gains
(losses) on
investments
|
- | - | - | - | - | - | (4 | ) | - | (4 | ) | |||||||||||||||||||||||||
Total
comprehensive
loss
|
(3,467 | ) | ||||||||||||||||||||||||||||||||||
Issuance
of Series C
preferred
stock net of
issuance
costs of $140
|
355 | 4 | - | - | 158 | - | - | - | 162 | |||||||||||||||||||||||||||
Issuance
of Series D
preferred
stock net of
issuance
costs of $36
|
742 | 7 | - | - | 1,070 | - | - | - | 1,077 | |||||||||||||||||||||||||||
Issuance
of stock for
option
exercises
|
- | - | 50 | - | 12 | - | - | - | 12 | |||||||||||||||||||||||||||
Issuance
of stock for
warrant
exercises
|
- | - | 292 | 3 | 324 | - | - | - | 327 | |||||||||||||||||||||||||||
Issuance
of stock and
options
for Series C
offering
costs
|
- | - | 164 | 2 | 101 | - | - | - | 103 | |||||||||||||||||||||||||||
Issuance
of stock for
services
|
- | - | 20 | - | 17 | - | - | - | 17 | |||||||||||||||||||||||||||
Stock-based
compensation
expense
related
to non-employee
stock
options
|
- | - | - | - | 55 | - | - | - | 55 | |||||||||||||||||||||||||||
Proceeds
from stock
subscription
receivable
|
- | - | - | - | - | 873 | - | - | 873 | |||||||||||||||||||||||||||
Balance
at December 31, 2005
|
17,488 | 175 | 5,049 | 50 | 10,819 | - | (4 | ) | (7,788 | ) | 3,252 | |||||||||||||||||||||||||
Comprehensive
loss:
|
||||||||||||||||||||||||||||||||||||
Net
loss
|
- | - | - | - | - | - | - | (5,286 | ) | (5,286 | ) | |||||||||||||||||||||||||
Change
in unrealized
gains
(losses) on
investments
|
- | - | - | - | - | - | 16 | - | 16 | |||||||||||||||||||||||||||
Total
comprehensive
loss
|
(5,270 | ) | ||||||||||||||||||||||||||||||||||
Stock-based
compensation
expense
|
||||||||||||||||||||||||||||||||||||
Issuance
of Series D
preferred
stock net of
issuance
costs of $114
|
1,739 | 17 | - | - | 2,477 | - | - | - | 2,494 | |||||||||||||||||||||||||||
Issuance
of stock for
option
exercises
|
- | - | 80 | 1 | 22 | - | - | - | 23 | |||||||||||||||||||||||||||
Issuance
of stock for
warrant
exercises
|
- | - | 1,148 | 12 | 964 | - | - | - | 976 | |||||||||||||||||||||||||||
Issuance
of stock and
options
for Series D
offering
costs
|
- | - | 31 | - | 64 | - | - | - | 64 | |||||||||||||||||||||||||||
Issuance
of stock for
services
|
- | - | 3 | - | 5 | - | - | - | 5 | |||||||||||||||||||||||||||
Initial
public offering costs
|
- | - | - | - | (93 | ) | - | - | - | (93 | ) | |||||||||||||||||||||||||
Stock-based
compensation
expense
related
to employee and
director
stock options
|
- | - | - | - | 313 | - | - | - | 313 | |||||||||||||||||||||||||||
Stock-based
compensation
expense
related
to non-employee
stock
options
|
- | - | - | - | 49 | - | - | - | 49 | |||||||||||||||||||||||||||
Balance
at December 31, 2006
|
19,227 | 192 | 6,311 | 63 | 14,620 | - | 12 | (13,074 | ) | 1,813 |
Preferred
Stock
|
Common
Stock
|
Additional
Paid-In
|
Stock
Subscription
|
Accumulated
Other Compre-hensive Income
|
Accumulated
Deficit During Development
|
Total
Stockholders'
|
||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital | Receivable | (Loss) | Stage | Equity | ||||||||||||||||||||||||||||
Balance
at December 31, 2006
|
19,227 | 192 | 6,311 | 63 | 14,620 | - | 12 | (13,074 | ) | 1,813 | ||||||||||||||||||||||||||
Comprehensive
loss:
|
||||||||||||||||||||||||||||||||||||
Net
loss
|
- | - | - | - | - | - | - | (5,400 | ) | (5,400 | ) | |||||||||||||||||||||||||
Change
in unrealized
gains
(losses) on
investments
|
- | - | - | - | - | - | (15 | ) | - | (15 | ) | |||||||||||||||||||||||||
Total
comprehensive
loss
|
(5,415 | ) | ||||||||||||||||||||||||||||||||||
Conversion
of preferred
stock
to common stock
in
connection with IPO
|
(19,227 | ) | (192 | ) | 9,614 | 96 | 96 | - | - | - | - | |||||||||||||||||||||||||
Issuance
of stock and
warrants
in connection
with
IPO, net of offering
costs
|
- | - | 5,000 | 50 | 17,120 | - | - | - | 17,170 | |||||||||||||||||||||||||||
Issuance
of stock for
option
exercises
|
- | - | 298 | 3 | 111 | - | - | - | 114 | |||||||||||||||||||||||||||
Issuance
of stock for
services
|
- | - | 38 | - | 92 | - | - | - | 92 | |||||||||||||||||||||||||||
Issuance
of stock for
director
compensation
|
- | - | 8 | - | 29 | - | - | - | 29 | |||||||||||||||||||||||||||
Stock-based
compensation
expense
related
to employee and
director
stock options
|
- | - | - | - | 399 | - | - | - | 399 | |||||||||||||||||||||||||||
Stock-based
compensation
expense
related
to non-employee
stock
options
|
- | - | - | - | 118 | - | - | - | 118 | |||||||||||||||||||||||||||
Balance
at December 31, 2007
|
- | - | 21,269 | 212 | 32,585 | - | (3 | ) | (18,474 | ) | 14,320 | |||||||||||||||||||||||||
Comprehensive
loss:
|
||||||||||||||||||||||||||||||||||||
Net
loss
|
- | - | - | - | - | - | - | (8,114 | ) | (8,114 | ) | |||||||||||||||||||||||||
Realized
gains
|
- | - | - | - | - | - | 35 | - | 35 | |||||||||||||||||||||||||||
Change
in unrealized
gains
(losses) on
investments
|
- | - | - | - | - | - | (32 | ) | - | (32 | ) | |||||||||||||||||||||||||
Total
comprehensive
loss
|
(8,111 | ) | ||||||||||||||||||||||||||||||||||
Issuance
of warrants
|
67 | 67 | ||||||||||||||||||||||||||||||||||
Issuance
of stock for
option
exercises
|
- | - | 123 | 1 | 148 | - | - | - | 149 | |||||||||||||||||||||||||||
Issuance
of stock for
services
|
- | - | 30 | 1 | 84 | - | - | - | 85 | |||||||||||||||||||||||||||
Issuance
of stock for
director
compensation
|
- | - | 49 | 1 | 123 | - | - | - | 124 | |||||||||||||||||||||||||||
Stock-based
compensation
expense
related
to employee and
director
stock options
|
- | - | - | - | 721 | - | - | - | 721 | |||||||||||||||||||||||||||
Stock-based
compensation
expense
related
to non-employee
stock
options
|
- | - | - | - | (11 | ) | - | - | - | (11 | ) | |||||||||||||||||||||||||
Tax
benefit from stock
plans
|
- | - | - | - | 1 | - | - | - | 1 | |||||||||||||||||||||||||||
Balance
at December 31, 2008
|
- | - | 21,471 | 215 | 33,718 | - | - | (26,588 | ) | 7,345 |
Preferred
Stock
|
Common
Stock
|
Additional
Paid-In
|
Stock
Subscription
|
Accumulated
Other Compre-hensive Income
|
Accumulated
Deficit During Development
|
Total
Stockholders'
|
||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital | Receivable | (Loss) | Stage | Equity | ||||||||||||||||||||||||||||
Balance
at December 31, 2008
|
- | - | 21,471 | 215 | 33,718 | - | - | (26,588 | ) | 7,345 | ||||||||||||||||||||||||||
Comprehensive
loss:
|
||||||||||||||||||||||||||||||||||||
Net
income
|
- | - | - | - | - | - | - | 2,697 | 2,697 | |||||||||||||||||||||||||||
Realized
gains
|
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||
Change
in unrealized
gains
(losses) on
investments
|
- | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Total
comprehensive
loss
|
- | - | - | - | - | - | - | - | 2,697 | |||||||||||||||||||||||||||
Issuance
of common
stock
in connection
w/shelf
offering, net of
offering
costs
|
- | - | 1,225 | 12 | 1,932 | - | - | - | 1,944 | |||||||||||||||||||||||||||
Issuance
of stock for
option
exercises
|
- | - | 119 | 1 | 74 | - | - | - | 75 | |||||||||||||||||||||||||||
Issuance
of stock for
services
|
- | - | 309 | 4 | 75 | - | - | - | 79 | |||||||||||||||||||||||||||
Issuance
of stock for
director
compensation
|
- | - | 130 | 1 | 217 | - | - | - | 218 | |||||||||||||||||||||||||||
Stock-based
compensation
expense
related
to employee and
director
stock options
|
- | - | - | - | 702 | - | - | - | 702 | |||||||||||||||||||||||||||
Stock-based
compensation
expense
related
to non-
employee
stock
options
|
- | - | - | - | 285 | - | - | - | 285 | |||||||||||||||||||||||||||
Tax
benefit from stock
plans
|
- | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Balance
at December 31, 2009
|
- | - | 23,254 | $ | 233 | $ | 37,003 | $ | - | $ | - | $ | (23,891 | ) | $ | 13,345 |
Year
Ended December 31,
|
Cumulative
Period from July 1, 2002 (date of Development Stage inception) to December
31,
|
|||||||||||||||
2007
|
2008
|
2009
|
2009 | |||||||||||||
Cash
flows from operating activities:
|
||||||||||||||||
Net
income (loss)
|
$ | (5,400 | ) | $ | (8,114 | ) | $ | 2,697 | $ | (23,891 | ) | |||||
Adjustments
to reconcile net income (loss) to net cash used in operating
activities:
|
||||||||||||||||
Depreciation
and amortization
|
183 | 304 | 373 | 1,077 | ||||||||||||
Accretion
of discount on short-term investments
|
(246 | ) | (23 | ) | 42 | (259 | ) | |||||||||
Net
realized gain on sales of short-term investments
|
- | (35 | ) | - | (3 | ) | ||||||||||
Loss
on disposal of property and equipment
|
- | - | - | 121 | ||||||||||||
Stock-based
compensation expense for options issued to employees
and
directors
|
428 | 844 | 920 | 2,382 | ||||||||||||
Compensation
expense for warrants issued for services
|
- | 67 | 88 | 188 | ||||||||||||
Stock-based
compensation expense for options and stock issued to
non-employees
|
210 | (11 | ) | 273 | 798 | |||||||||||
Taxes
paid by LLC
|
- | - | - | 1 | ||||||||||||
Changes
in operating assets and liabilities:
|
||||||||||||||||
Increase
in accounts receivable
|
- | - | (3,801 | ) | (3,801 | ) | ||||||||||
(Increase)
decrease in prepaid expenses and other assets
|
(193 | ) | 88 | (204 | ) | (613 | ) | |||||||||
Increase
(decrease) in accounts payable and accrued liabilities
|
397 | 289 | (70 | ) | 1,527 | |||||||||||
Increase
(decrease) in deferred revenue
|
(1,650 | ) | (3,351 | ) | (2,000 | ) | 2,166 | |||||||||
Increase
in deferred tax
|
- | - | 34 | 34 | ||||||||||||
Net
cash used in operating activities
|
(6,271 | ) | (9,942 | ) | (1,648 | ) | (20,273 | ) | ||||||||
Cash
flows from investing activities:
|
||||||||||||||||
Purchases
of property and equipment
|
(663 | ) | (610 | ) | (731 | ) | (2,891 | ) | ||||||||
Proceeds
from disposal of property and equipment
|
1 | - | 2 | 46 | ||||||||||||
Purchases
of short-term investments
|
(49,197 | ) | (32,097 | ) | (3,975 | ) | (98,519 | ) | ||||||||
Proceeds
from maturities and sales of short-term investments
|
44,199 | 43,571 | 3,635 | 98,482 | ||||||||||||
Cash
acquired in purchase of LLC
|
- | - | - | 516 | ||||||||||||
Net
cash provided by (used in) investing activities
|
(5,660 | ) | 10,864 | (1,069 | ) | (2,366 | ) | |||||||||
Cash
flows from financing activities:
|
||||||||||||||||
Proceeds
from preferred stock issuances, net
|
- | - | - | 11,160 | ||||||||||||
Proceeds
from common stock issuances
|
- | - | - | 17 | ||||||||||||
Proceeds
from exercise of options and warrants
|
114 | 153 | 74 | 1,835 | ||||||||||||
Initial
public offering costs, net of costs
|
17,170 | - | - | 17,077 | ||||||||||||
Proceeds
from Shelf offering, net of costs
|
- | - | 1,944 | 1,944 | ||||||||||||
Proceeds
from stock subscription receivable
|
- | - | - | 873 | ||||||||||||
Proceeds
from issuance of notes
|
- | - | - | 405 | ||||||||||||
Principal
payments on capital lease
|
(31 | ) | (37 | ) | (42 | ) | (150 | ) | ||||||||
Proceeds
from borrowings under equipment loan
|
794 | 422 | - | 1,216 | ||||||||||||
Principal
payments on equipment loan
|
(78 | ) | (302 | ) | (366 | ) | (746 | ) | ||||||||
Net
cash provided by financing activities
|
17,969 | 236 | 1,610 | 33,631 | ||||||||||||
Net
increase (decrease) in cash and cash equivalents
|
6,038 | 1,158 | (1,107 | ) | 10,992 | |||||||||||
Cash
and cash equivalents, beginning of period
|
4,903 | 10,941 | 12,099 | - | ||||||||||||
Cash
and cash equivalents, end of period
|
$ | 10,941 | $ | 12,099 | $ | 10,992 | $ | 10,992 |
Year
Ended December 31,
|
Cumulative
Period from July 1, 2002 (date of Development Stage inception) to December
31,
|
|||||||||||||||
2007
|
2008
|
2009
|
2009 | |||||||||||||
Supplemental
Disclosure of non cash information
|
||||||||||||||||
Interest
paid
|
$ | 34 | $ | 102 | $ | 77 | $ | 223 | ||||||||
Income
taxes paid
|
$ | - | $ | - | $ | - | $ | - | ||||||||
Non-cash
financing and investing activities
|
||||||||||||||||
Issuance
of stock options and warrants for stock option costs
|
$ | 524 | $ | - | $ | 1,086 | $ | 1,887 | ||||||||
Property
and equipment acquired under capital lease obligations
|
$ | 117 | $ | 62 | $ | - | $ | 219 |
Year
Ended December 31,
|
||||||||||||
(in
thousands)
|
2007
|
2008
|
2009
|
|||||||||
Net
income (loss)
|
$ | (5,400 | ) | $ | (8,114 | ) | $ | 2,697 | ||||
Basic
shares
|
8,974 | 21,312 | 22,404 | |||||||||
Add:
shares issued upon assumed exercise of stock options
|
- | - | 711 | |||||||||
Diluted
shares
|
8,974 | 21,312 | 23,115 | |||||||||
Basic
EPS
|
$ | (0.60 | ) | $ | (0.38 | ) | $ | 0.12 | ||||
Diluted
EPS
|
$ | (0.60 | ) | $ | (0.38 | ) | $ | 0.12 |
Year
Ended December 31,
|
||||||||||||
(in
thousands)
|
2007
|
2008
|
2009
|
|||||||||
Stock
options
|
2,896 | 3,371 | 711 | |||||||||
Stock
warrants
|
350 | 650 | 1,875 |
December
31, 2008
|
||||||||||||||||
Gross
|
Gross
|
|||||||||||||||
Amortized
|
Unrealized/Realized
|
Unrealized/Realized
|
Market
|
|||||||||||||
(in
thousands)
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||
Corporate
bonds
|
$ | - | $ | - | $ | - | $ | - | ||||||||
U.S.
Agencies
|
- | - | - | - | ||||||||||||
Municipal
Bonds
|
- | - | - | - | ||||||||||||
Certificates
of Deposit
|
- | - | - | - | ||||||||||||
Other
Fixed Income
|
- | - | - | - | ||||||||||||
$ | - | $ | - | $ | - | $ | - |
December
31, 2009
|
||||||||||||||||
Gross
|
Gross
|
|||||||||||||||
Amortized
|
Unrealized/Realized
|
Unrealized/Realized
|
Market
|
|||||||||||||
(in
thousands)
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||
Corporate
bonds
|
$ | - | $ | - | $ | - | $ | - | ||||||||
U.S.
Agencies
|
- | - | - | - | ||||||||||||
Municipal
Bonds
|
- | - | - | - | ||||||||||||
Certificates
of Deposit
|
300 | - | - | 300 | ||||||||||||
Other
Fixed Income
|
- | - | - | - | ||||||||||||
$ | 300 | $ | - | $ | - | $ | 300 |
December
31, 2008
|
||||||||
Amortized
|
Market
|
|||||||
(in
thousands)
|
Cost
|
Value
|
||||||
Due
in one year or less
|
$ | - | $ | - | ||||
Due
after 10 years
|
- | - | ||||||
Total
|
$ | - | $ | - |
December
31, 2009
|
||||||||
Amortized
|
Market
|
|||||||
(in
thousands)
|
Cost
|
Value
|
||||||
Due
in one year or less
|
$ | 300 | $ | 300 | ||||
Due
after 10 years
|
- | - | ||||||
Total
|
$ | 300 | $ | 300 |
(in
thousands)
|
December 31,
2008
|
December 31,
2009
|
||||||
Office
and laboratory equipment
|
$ | 1,728 | $ | 2,430 | ||||
Furniture
and fixtures
|
113 | 113 | ||||||
Software
|
110 | 133 | ||||||
Leasehold
improvement
|
143 | 147 | ||||||
Total
property and equipment, at cost
|
2,094 | 2,823 | ||||||
Less:
accumulated depreciation
|
(638 | ) | (1,011 | ) | ||||
Total
property and equipment, net
|
$ | 1,456 | $ | 1,812 |
(in
thousands)
|
December 31,
2008
|
December 31,
2009
|
||||||
Research
and development
|
$ | 509 | $ | 118 | ||||
Employee
payroll and benefits
|
423 | 744 | ||||||
Professional
fees
|
182 | 58 | ||||||
Other
|
52 | 308 | ||||||
Total
accrued liabilities
|
$ | 1,166 | $ | 1,228 |
December
31,
|
December
31,
|
|||||||
(in
thousands)
|
2008
|
2009
|
||||||
Office
and laboratory equipment
|
$ | 229 | $ | 147 | ||||
Less:
accumulated depreciation
|
(47 | ) | (80 | ) | ||||
Capital
lease assets, net
|
$ | 182 | $ | 67 |
Lease
|
||||
(in
thousands)
|
Commitment
|
|||
Year
ending December 31,
2010
|
$ | 7 | ||
Total
minimum lease payments
|
7 | |||
Less:
amount representing interest
|
- | |||
Present
value of minimum lease payments
|
$ | 7 |
Loan
|
||||
(in
thousands)
|
Commitment
|
|||
Year
ending December 31:
|
||||
2010
|
$ | 396 | ||
2011
|
109 | |||
Total
minimum loan payments
|
505 | |||
Less:
amount representing interest
|
(35 | ) | ||
Present
value of minimum loan payments
|
$ | 470 |
Lease
|
||||
(in
thousands)
|
Commitment
|
|||
Year
ending December 31:
|
||||
2010
|
$ | 901 | ||
2011
|
938 | |||
2012
|
976 | |||
2013
|
1,015 | |||
2014
|
992 | |||
thereafter
|
588 | |||
Total
lease commitment
|
$ | 5,410 |
(in
thousands, except per share data)
|
Warrants
|
Weighted-Average
Exercise
Price
|
||||||
Outstanding
at December 31, 2006
|
- | $ | - | |||||
Warrants
granted
|
350 | $ | 4.00 | |||||
Outstanding
at December 31, 2007
|
350 | $ | 4.00 | |||||
Warrants
granted
|
300 | $ | 4.00 | |||||
Outstanding
at December 31, 2008
|
650 | $ | 4.00 | |||||
Warrants
granted
|
1,225 | $ | 2.75 | |||||
Outstanding
at December 31, 2009
|
1,875 | $ | 3.18 |
(in
thousands, except per share data)
|
Options
|
Weighted-Average
Exercise Price
|
Weighted-Average
Remaining Contractual Life (years)
|
Aggregate
Intrinsic Value
|
||||||||||||
Outstanding
at December 31, 2006
|
2,401 | $ | 0.83 | |||||||||||||
Options
granted
|
814 | $ | 3.30 | |||||||||||||
Options
exercised
|
(298 | ) | $ | 0.38 | ||||||||||||
Options
forfeited/cancelled
|
(21 | ) | $ | 1.52 | ||||||||||||
Outstanding
at December 31, 2007
|
2,896 | $ | 1.57 | |||||||||||||
Options
granted
|
903 | $ | 2.39 | |||||||||||||
Options
exercised
|
(122 | ) | $ | 1.18 | ||||||||||||
Options
forfeited/cancelled
|
(306 | ) | $ | 2.66 | ||||||||||||
Outstanding
at December 31, 2008
|
3,371 | $ | 1.70 | |||||||||||||
Options
granted
|
1,196 | $ | 1.80 | |||||||||||||
Options
exercised
|
(119 | ) | $ | 0.62 | ||||||||||||
Options
forfeited/cancelled
|
(301 | ) | $ | 2.42 | ||||||||||||
Outstanding
at December 31, 2009
|
4,147 | $ | 1.71 | 7.0 | $ | 2,456 | ||||||||||
Vested
and expected to vest at December 31, 2009
|
3,973 | $ | 1.69 | 6.9 | $ | 2,427 | ||||||||||
Vested
at December 31, 2009
|
2,360 | $ | 1.41 | 5.5 | $ | 2,084 | ||||||||||
Exercisable
at December 31, 2009
|
2,532 | $ | 1.53 | 5.6 | $ | 2,099 |
Options
Outstanding
|
Options
Vested
|
|||||||||||||||||||
Range
of Exercise Prices
|
Number
Outstanding
|
Weighted-Average
Remaining
Contractual
Life (years)
|
Weighted-Average
Exercise
Price
|
Number
Vested
|
Weighted-Average
Exercise
Price
|
|||||||||||||||
$0.20
|
494 | 2.1 | $ | 0.20 | 494 | $ | 0.20 | |||||||||||||
$0.30
|
318 | 4.0 | $ | 0.30 | 318 | $ | 0.30 | |||||||||||||
$0.56
|
162 | 4.5 | $ | 0.56 | 154 | $ | 0.56 | |||||||||||||
$1.20
- $1.56
|
503 | 8.3 | $ | 1.39 | 180 | $ | 1.24 | |||||||||||||
$1.70
- $1.99
|
1,686 | 8.2 | $ | 1.82 | 742 | $ | 1.75 | |||||||||||||
$2.00
- $2.41
|
407 | 8.1 | $ | 2.25 | 158 | $ | 2.26 | |||||||||||||
$3.56
- $4.00
|
577 | 8.0 | $ | 3.69 | 314 | $ | 3.69 | |||||||||||||
4,147 | 7.0 | $ | 1.71 | 2,360 | $ | 1.41 |
Year
Ended December 31,
|
|||||
Assumption
|
2007
|
2008
|
2009
|
||
Expected
price volatility
|
68.9%
|
70.3%
|
87.1%
|
||
Expected
term (in years)
|
6.0
|
6.1
|
6.1
|
||
Risk-free
interest rate
|
4.1%
|
3.1%
|
2.4%
|
||
Dividend
yield
|
0.0%
|
0.0%
|
0.0%
|
||
Weighted-average
fair value of options granted during the period
|
$2.17
|
$1.56
|
$1.31
|
Year
ended December 31,
|
||||||||||||
(in
thousands)
|
2007
|
2008
|
2009
|
|||||||||
Research
and development
|
$ | 206 | $ | 412 | $ | 548 | ||||||
General
and administrative
|
222 | 432 | 372 | |||||||||
Total
stock-based compensation expense
|
$ | 428 | $ | 844 | $ | 920 |
Year
Ended December 31,
|
||||||
Assumption
|
2007
|
2008
|
2009
|
|||
Expected
price volatility
|
71.0%
|
70.0%
|
87.2%
|
|||
Expected
term (in years)
|
5.3
|
6.1
|
5.6
|
|||
Risk-free
interest rate
|
4.7%
|
3.1%
|
1.9%
|
|||
Dividend
yield
|
0.0%
|
0.0%
|
0.0%
|
|||
Weighted-average
fair value of options granted during the period
|
$1.70
|
$1.26
|
$1.41
|
Year
Ended December 31,
|
||||||||||||
(in
thousands)
|
2007
|
2008
|
2009
|
|||||||||
Amortization
of Upfront Technology Access Fee
|
$ | 2,500 | $ | 2,500 | $ | 2,500 | ||||||
On-going
Research and Development
|
2,700 | 2,700 | 4,322 | |||||||||
Materials,
Equipment, and Contract Study Costs
|
611 | 1,386 | 1,349 | |||||||||
Milestone Payment | - | - | 1,000 | |||||||||
$ | 5,811 | $ | 6,586 | $ | 9,171 |
Year
Ended December 31,
|
||||||||||||
(in
thousands)
|
2007
|
2008
|
2009
|
|||||||||
Amortization
of Upfront Technology Access Fee
|
$ | - | $ | - | $ | 500 | ||||||
On-going
Research and Development
|
- | - | 1,200 | |||||||||
Materials,
Equipment, and Contract Study Costs
|
- | - | 1,063 | |||||||||
Milestone Payments | - | - | 3,750 | |||||||||
$ | - | $ | - | $ | 6,513 |
Year
Ended December 31,
|
||||||||||||
(in
thousands)
|
2007
|
2008
|
2009
|
|||||||||
Amortization
of Upfront Technology Access Fee
|
$ | 72 | $ | 128 | $ | - | ||||||
On-going
Research and Development
|
30 | 8 | - | |||||||||
Materials,
Equipment, and Contract Study Costs
|
- | - | - | |||||||||
$ | 102 | $ | 136 | $ | - |
Year
Ending December 31
|
||||||||||||
2007
|
2008
|
2009
|
||||||||||
United
States
|
(5,388 | ) | (8,112 | ) | 2,704 | |||||||
International
|
- | - | - | |||||||||
(5,388 | ) | (8,112 | ) | 2,704 |
Year
Ending December 31
|
||||||||||||
(in
thousands)
|
2007
|
2008
|
2009
|
|||||||||
Current
|
||||||||||||
Federal
|
$ | - | $ | - | $ | - | ||||||
State
|
12 | 2 | 7 | |||||||||
Other
|
- | - | - | |||||||||
Total
Current Tax Expense
|
12 | 2 | 7 | |||||||||
Deferred
|
||||||||||||
Federal
|
- | - | - | |||||||||
State
|
- | - | - | |||||||||
Other
|
- | - | - | |||||||||
Total
Deferred Tax Expense
|
- | - | - | |||||||||
Total
Tax Expense
|
$ | 12 | $ | 2 | $ | 7 |
Year
Ending December 31
|
||||||||
(in
thousands)
|
2008
|
2009
|
||||||
Deferred
Tax Assets:
|
||||||||
Accruals
|
$ | 409 | $ | 296 | ||||
Deferred
Revenue
|
1,660 | 664 | ||||||
Net
Operating Losses
|
7,946 | 7,780 | ||||||
Stock
Options
|
176 | 406 | ||||||
Other
Deferred Tax Assets
|
45 | 54 | ||||||
Total
Deferred Tax Assets
|
10,236 | 9,200 | ||||||
Deferred
Tax Liabilities:
|
||||||||
Property,
Plant & Equipment
|
(228 | ) | (322 | ) | ||||
Total
Deferred Tax Liabilities
|
(228 | ) | (322 | ) | ||||
Valuation
Allowance
|
$ | (10,008 | ) | $ | (8,878 | ) | ||
Net
Deferred Taxes
|
$ | - | $ | - |
2007
|
2008
|
2009
|
||
$1,997
|
$2,978
|
$(1,130)
|
Expiration
|
||||||||
Amount
|
Years
|
|||||||
Net
operating losses, federal
|
$ | 20,025 | 2024 - 2029 | |||||
Net
operating losses, state
|
$ | 20,012 | 2016 - 2029 | |||||
Tax
credits, state
|
$ | 15 | N/A |
Year
Ending December 31
|
||||||||||||
(in
thousands)
|
2007
|
2008
|
2009
|
|||||||||
Statutory
Rate
|
$ | (1,832 | ) | $ | (2,758 | ) | $ | 950 | ||||
State
Tax
|
(274 | ) | (435 | ) | 152 | |||||||
ISO
Related Expense for GAAP
|
81 | 207 | 196 | |||||||||
Change
in Valuation Allowance
|
1,997 | 2,978 | (1,130 | ) | ||||||||
Other
|
40 | 10 | (161 | ) | ||||||||
Total
|
$ | 12 | $ | 2 | $ | 7 |
ITEM 9.
|
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
|
ITEM
9A.
|
CONTROLS
AND PROCEDURES
|
ITEM 9A(T).
|
CONTROLS
AND PROCEDURES
|
ITEM 9B.
|
OTHER
INFORMATION
|
ITEM 10.
|
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE
|
ITEM 11.
|
EXECUTIVE
COMPENSATION
|
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
|
INDEX
TO CONSOLIDATED FINANCIAL STATEMENTS
|
||
Page
|
||
Report
of Independent Registered Public Accounting Firm
|
39
|
|
Consolidated
Balance Sheets as of December 31, 2008 and 2009
|
40
|
|
Consolidated
Statements of Operations for the Years Ended December 31, 2007, 2008 and
2009 and for the cumulative period from July 1, 2002 (date of development
stage inception) to December 31, 2009
|
41
|
|
Consolidated
Statements of Stockholder's Equity for the cumulative period from July 1,
2002 (date of development stage inception) to December 31,
2009
|
42
|
|
Consolidated
Statements of Cash Flows for the Years Ended December 31, 2007,2008 and
2009 and for the cumulative period from July 1, 2002 (date of development
stage inception) to December 31, 2009
|
46
|
Date:
March 26, 2010
|
NOVABAY
PHARMACEUTICALS, INC.
|
|
By:
|
/S/ RAMIN NAJAFI
|
|
Ramin
(“Ron”) Najafi
|
||
Chief
Executive Officer and President
|
Signature
|
Title
|
Date
|
|
/S/ RAMIN
NAJAFI
|
Chairman
of the Board, Chief Executive Officer and
President
(principal executive officer)
|
March
25, 2010
|
|
Ramin
(“Ron”) Najafi
|
|||
/S/ THOMAS PAULSON
|
Chief
Financial Officer and Treasurer (principal
financial
and accounting officer)
|
March
25, 2010
|
|
Thomas J. Paulson
|
|||
/S/ CHARLES J. CASHION
|
Director
|
March
23, 2010
|
|
Charles J. Cashion
|
|||
/S/ ANTHONY DAILLEY
|
Director
|
March
24, 2010
|
|
Anthony Dailley,
DDS
|
|||
/S/ PAUL FREIMAN
|
Director
|
March
24, 2010
|
|
Paul E. Freiman
|
|||
/S/ ALEX MCPHERSON
|
Director
|
March
23, 2010
|
|
Alex McPherson,
MD, Ph.D.
|
|||
/S/ ROBERT R. TUFTS
|
Director
|
March
24, 2010
|
|
Robert R. Tufts
|
|||
/S/ TONY
WICKS
|
Director
|
March
23, 2010
|
|
Tony
Wicks
|
|||
/S/ HARRY
F. HIXSON, JR., PhD
|
Director
|
March
26, 2010
|
|
Harry F. Hixson
|
Exhibit
No.
|
Description
|
|
3.1
|
Amended
and Restated Articles of Incorporation of the
Company (Incorporated by reference to the exhibit of the same
number from the Company’s quarterly report on Form 10-Q for the
quarter ended September 30, 2007 as filed with the SEC on November 15,
2007 (SEC File No. 001-33678).)
|
|
3.2
|
Amended
and Restated Bylaws of the Company (Incorporated by reference
to the exhibit of the same number from the Company’s quarterly report on
Form 8-K as filed with the SEC on January 26, 2010 (SEC File No.
001-33678).)
|
|
4.1*
|
Specimen
common stock certificate
|
|
4.2
|
Form
of Form of Common Stock Purchase Warrant issued in August 2009.
(Incorporated by reference to Exhibit 4.3 to the Company’s current report
on Form 8-K as filed with the SEC on August 21, 2009 (SEC File No.
001-33678).)
|
|
10.1*+
|
2002
Stock Option Plan, and forms of agreements thereto
|
|
10.2*+
|
2005
Stock Option Plan, and forms of agreements thereto
|
|
10.3*+
|
2007
Omnibus Incentive Plan, and forms of agreements thereto ((the Plan is
incorporated by reference to Exhibit 10.1 from the Company’s quarterly
report on Form 10-Q for the quarter ended June 30, 2008 as filed with
the SEC on August 14, 2008 (SEC File No. 001-33678), and the forms of
agreements thereto are incorporated by reference to the exhibit
referencing the Plan from the Company’s amendment to registration
statement of Form S-1 (File No. 333-140714) filed with the Securities
and Exchange Commission on May 29, 2007, as amended.)
|
|
10.4*+
|
Employment
Agreement dated January 1, 2007 by and between the Company and Ramin
(“Ron”) Najafi
|
|
10.5*+
|
Employment
Agreement dated January 1, 2007 by and between the Company and John
(“Jack”) O’Reilly
|
|
10.6*+
|
Employment
Agreement dated January 1, 2007 by and between the Company and
Behzad Khosrovi
|
|
10.7+
|
NovaBay
Pharmaceuticals, Inc. Employee Incentive Cash Compensation
Plan.
|
|
10.8*+
|
Employment
Agreement dated January 9, 2008 by and between the Company and
Thomas J. Paulson (Incorporated by reference to Exhibit 10.18
from the Company’s annual report on Form 10-K for the year end
December 31, 2007 as filed with the SEC on March 14, 2008 (SEC File No.
001-33678).)
|
|
10.9+
|
Retirement
and Consulting Agreement dated January 1, 2009 by and Between the Company
and John (“Jack”) O’Reilly (Incorporated by reference to Exhibit 10.9 from
the Company’s annual report on Form 10-K for the year end December
31, 2008, as filed with the SEC on March 31, 2009 (SEC File No.
001-33678).)
|
|
10.10*
|
Office
Lease dated June 3, 2004 by and between the Company and Emery Station
Associates II, LLC, as amended
|
|
10.11
|
Fifth
Amendment dated November 20, 2007 to Office Lease dated June 3,
2004 by and between the Company and Emery Station Associates II, LLC, as
amended (Incorporated by reference to Exhibit 10.20 from the
Company’s annual report on Form 10-K for the year ended December 31,
2007 as filed with the SEC on March 14, 2008 (SEC File No.
001-33678).)
|
|
10.12
|
Sixth
Amendment to Lease between Emery Station Office II, LLC and Novacal
Pharmaceuticals, Inc., effective September 1,
2008. (Incorporated by reference to Exhibit 10.1 from the
Company’s quarterly report on Form 10-Q/A for the quarter ended
September 30, 2008 as filed with the SEC on November 14, 2008 (SEC File
No. 001-33678).)
|
|
10.13†
|
Collaboration
and License Agreement, by and between the Company and Galderma S.A., dated
as of March 20, 2009 (Incorporated by reference to Exhibit 10.2 from
the Company’s quarterly report on Form 10-Q/A for the quarter ended
March 31, 2009, as filed with the SEC on August 4, 2009 (SEC File No.
001-33678).)
|
|
10.14+
|
Director Compensation Plan
|
|
10.15*†
|
Collaboration
and License Agreement dated August 29, 2006 by and between the Company and
Alcon Manufacturing, Ltd.
|
10.16*
|
Master
Security Agreement dated April 23, 2007 by and between the Company and
General Electric Capital Corporation
|
|
10.17*
|
Form
of Common Stock Purchase Warrant by and between the Company and the
underwriters
|
|
10.18††
|
Amendment
No. 1 to the Collaboration and License Agreement, dated as of December 1,
2009, between the Company and Galderma S.A.
|
|
10.19+
|
Named
Executive Officer Cash Compensation Arrangements
|
|
10.20+
|
Employment
Agreement, dated July 28, 2009, between the Company and Roy
Wu.
|
|
10.21
|
Placement
Agent Agreement, dated August 21, 2009, by and between the Company and
Maxim Group LLC (Incorporated by reference to Exhibit 1.1 from the
Company’s quarterly report on Form 8-K as filed with the SEC on
August 21, 2009 (SEC File No. 001-33678)).
|
|
10.22+
|
Employment
Agreement, dated October 15, 2009, between the Company and Mark
Anderson.
|
|
23.1
|
Consent
of Davidson & Company LLP
|
|
24.1
|
Power
of Attorney (included on the signature pages
hereto)
|
|
31.1
|
Certification
of the principal executive officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
|
31.2
|
Certification
of the principal financial officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
|
32.1
|
Certification
of the chief executive officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
|
|
32.2
|
Certification
of the chief financial officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
|
*
|
Incorporated
by reference to the exhibit of the same description from the
Company’s registration statement of Form S-1 (File No. 333-140714)
initially filed with the Securities and Exchange Commission on February
14, 2007, as amended.
|
+
|
Indicates
a management contract or compensatory plan or
arrangement
|
†
|
NovaBay
Pharmaceuticals, Inc. has been granted confidential treatment with respect
to certain portions of this exhibit (indicated by asterisks), which have
been separately filed with the Securities and Exchange
Commission.
|
††
|
NovaBay
Pharmaceuticals, Inc. has requested confidential treatment with respect to
certain portions of this exhibit (indicated by asterisks), which have been
separately filed with the Securities and Exchange
Commission.
|
·
|
Provide incentive to meet short-term and long-term corporate and individual goals
|
·
|
Encourage teamwork and ensure consistency among staff goals and objectives
|
·
|
Recognize performance contributions that significantly impact corporate results
|
·
|
Pay competitively in order to attract and retain quality performers
|
·
|
Encourage employee retention
|
Employee Rating
|
Individual Multiplier
|
Outstanding performance/Consistently exceeded objectives
|
125%
|
Excellent performance/ met or exceeded objectives
|
100%
|
Acceptable performance/ met most objectives
|
75%
|
Unacceptable performance/ did not meet objectives
|
0%
|
Status
|
Cash Payment
|
Comment
|
Non-Employee Director
|
$30,000 per year
|
Paid Quarterly
|
Chairman of the Compensation Committee
|
$10,000 per year
additional
|
Paid Quarterly
|
Lead Director
|
$12,000 per year
additional
|
Paid Quarterly
|
Chairman of the Audit Committee
|
12,000 per year
additional
|
Paid Quarterly
|
Chairman of the Nominating and Corporate Governance Committee
|
$8,000 per year
additional
|
Paid Quarterly
|
Non-Chairman Member of the Audit Committee
|
$6,000 per year
additional
|
Paid Quarterly
|
Non-Chairman Member of the Compensation and/or Nominating and Corporate Governance Committee
|
$5,000 for each committee per year additional
|
Paid Quarterly
|
Initial Equity Grant -
|
30,000 options (4-year vest, ¼ after one year and quarterly thereafter in equal quarterly installments)
|
Annual Equity Grant -
|
15,000 options (1-year vest in equal monthly installments)
|
|
(a)
|
upon the adoption of a resolution of the Committee and approved by the Board terminating the Plan; or
|
|
(b)
|
December 31, 2011.
|
1.
|
Unless otherwise stated, all terms appearing herein with a capital letter shall have the meaning set forth in the Agreement.
|
2.
|
The Parties agree to modify Section 1.3 as follow:
|
3.
|
The Parties agree to complete Section 8.1.3 with the following clause:
|
4.
|
The Parties agree to add the following Section 8.1.4:
|
5.
|
The Parties agree to modify Section 8.2.1 as follow:
|
Timing | Amount of Continuation Fee |
If paid on or before October 1, 2010
|
$[***]
|
If paid after October 1, 2010 but on or before December 31, 2010
|
$[***]
|
If paid after December 31, 2010 but on or before March 31, 2011
|
$[***]
|
If paid after March 31, 2011
|
$[***]
|
6.
|
All other terms of the Agreement shall remain in full force and effect.
|
GALDERMA | NOVABAY | |||
By: | /s/ Humberto C Antunes | By: | /s/ Ramin Najafi | |
Name: | Humberto C Antunes | Name: | Ramin "Ron" Najafi, Ph.D. | |
Title: | CEO | Title: | CEO & Chairman |
Name
|
Title
|
2010 Salary
|
|||
Ramin (“Ron”) Najafi, Ph.D.
|
Chairman and Chief Executive Officer
|
$
|
356,000
|
||
Thomas J. Paulson
|
Chief Financial Officer and Treasurer*
|
$
|
250,000
|
||
Behzad Khosrovi, Ph.D.
|
Chief Alliance Officer and SVP, Product Development
|
$
|
238,000
|
||
Mark B. Anderson, Ph.D.
|
Chief Scientific Officer
|
$
|
220,000
|
||
Roy J. Wu
|
Sr. Vice President, Business & Corporate Development
|
$
|
172,500
|
(30% of base salary at December 31, 2010) x [(0.8 x Corporate Performance) + (0.2 x Individual Performance Multiplier)]
|
I.
|
EMPLOYMENT
.
|
II.
|
PROPRIETARY RIGHTS,
CONFIDENTIAL INFORMATION, NONSOLICITATION,
ETC.
|
III.
|
COMPENSATION AND
BENEFITS
.
|
COMPANY: | |||
NOVABAY PHARMACEUTICALS, INC. | |||
|
By:
|
/s/ Ramin Najafi | |
Name: | Ramin "Ron" Najafi, Ph.D. | ||
Title: | Chairman and CEO | ||
Address: | 5980 Horton Street, Suite 550 | ||
Emeryville, CA 94608 | |||
Fax No.: | (510) 740-3629 | ||
E-mail: | rnajafi@novabaypharma.com | ||
EXECUTIVE: | |||
ROY J. WU | |||
/s/ Roy Wu | |||
Address: | 277 Juanita Way, | ||
San Francisco, CA 94127 | |||
Fax No.: | |||
E-mail: |
I.
|
EMPLOYMENT
.
|
II.
|
PROPRIETARY RIGHTS, CONFIDENTIAL INFORMATION, NONSOLICITATION, ETC.
|
III.
|
COMPENSATION AND BENEFITS
.
|
V.
|
ARBITRATION
.
|
VI.
|
LEGAL ADVICE
.
|
VII.
|
MISCELLANEOUS AND CONSTRUCTION
.
|
EXECUTIVE: | ||||
MARK ANDERSON | ||||
|
By: |
/s/ Mark Anderson
|
||
|
Address: |
|
||
|
Fax No.: |
|
||
E-mail: |
Vancouver, Canada
|
Chartered Accountants
|
/s/ Ramin Najafi
|
/s/ Thomas J. Paulson
|
/s/ Ramin Najafi
|
/s/ Thomas J. Paulson
|