Attached files
file | filename |
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EX-31.2 - PROTEIN POLYMER TECHNOLOGIES INC | v167335_ex31-2.htm |
EX-32.1 - PROTEIN POLYMER TECHNOLOGIES INC | v167335_ex32-1.htm |
EX-32.2 - PROTEIN POLYMER TECHNOLOGIES INC | v167335_ex32-2.htm |
EX-31.1 - PROTEIN POLYMER TECHNOLOGIES INC | v167335_ex31-1.htm |
EX-10.6 - PROTEIN POLYMER TECHNOLOGIES INC | v167335_ex10-6x5.htm |
EX-10.6 - PROTEIN POLYMER TECHNOLOGIES INC | v167335_ex10-6x6.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
10-Q
(Mark
One)
x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE
ACT OF 1934
|
For the
quarterly period ended September 30, 2009
OR
¨
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE
ACT OF 1934
|
For the
transition period from ______________________________ to
_____________________________
Commission
file number 0-19724
PROTEIN
POLYMER
TECHNOLOGIES,
INC.
(Exact
name of registrant as specified in its charter)
Delaware
|
33-0311631
|
(State
or other jurisdiction of
incorporation
or organization)
|
(I.R.S.
Employer Identification No.)
|
11494
Sorrento Valley Road, San Diego, CA 92121
(Address
of principal executive offices) (Zip Code)
(858)
558-6064
(Registrant’s
telephone number, including area code)
Indicate
by check mark whether the registrant: (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934
during the preceding 12 months (or for such shorter periods that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. YES þ NO
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large
accelerated
filer
¨
|
Accelerated
filer ¨ |
Non-accelerated
filer ¨
(Do
not check if a smaller reporting
company)
|
Smaller
reporting
company
þ
|
Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). YES ¨ NO þ
The
number of shares of the registrant’s common stock issued and outstanding as of
November 20, 2009 was 112,959,272.
PROTEIN
POLYMER TECHNOLOGIES, INC.
FORM
10-Q — QUARTERLY REPORT
FOR
THE PERIOD ENDED SEPTEMBER 30, 2009
Page
|
|||
PART
I. FINANCIAL INFORMATION
|
|||
Item
1.
|
Financial
Statements
|
||
Condensed
Balance Sheets as of September 30, 2009 (unaudited) and December 31,
2008
|
3
|
||
Condensed
Statements of Operations for the Three and Nine Months Ended September 30,
2009 and 2008 (unaudited)
|
4
|
||
Condensed
Statements of Cash Flows for the Three and Nine Months Ended September 30,
2009 and 2008 (unaudited)
|
5
|
||
Notes
to Condensed Financial Statements (unaudited)
|
6
|
||
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
15
|
|
Item
3.
|
Quantitative
and Qualitative Disclosures about Market Risk
|
18
|
|
Item
4T.
|
Controls
and Procedures
|
18
|
|
PART
II. OTHER INFORMATION
|
|||
Item
1.
|
Legal
Proceedings
|
20
|
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
20
|
|
Item
3.
|
Defaults
Upon Senior Securities
|
20
|
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
20
|
|
Item
5.
|
Other
Information
|
20
|
|
Item
6.
|
Exhibits
|
21
|
|
SIGNATURES
|
22
|
2
PART
I — FINANCIAL INFORMATION
Item 1. Financial
Statements
Protein
Polymer Technologies, Inc.
September 30,
2009
|
December 31,
|
|||||||
(unaudited)
|
2008
|
|||||||
Assets
|
||||||||
Current
assets:
|
||||||||
Cash
|
$ | 17,398 | $ | 1,291 | ||||
Prepaid
expenses and other current assets
|
77,525 | 35,011 | ||||||
Total
current assets
|
94,923 | 36,302 | ||||||
Deposits
|
29,979 | 29,679 | ||||||
Equipment
and leasehold improvements, net
|
13,381 | 24,429 | ||||||
Investment
|
520,000 | 520,000 | ||||||
Total
assets
|
$ | 658,283 | $ | 610,410 | ||||
Liabilities
and stockholders’ deficit
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$ | 1,101,345 | $ | 969,435 | ||||
Accrued
liabilities
|
1,278,816 | 844,073 | ||||||
Secured
notes payable – related party
|
6,414,837 | 6,414,837 | ||||||
Note
payable – Surgica - other
|
- | 519,071 | ||||||
Secured
notes payables, net of unamortized debt discount
|
50,688 | - | ||||||
Notes
payable – other, net of unamortized debt discount
|
278,015 | 158,589 | ||||||
Deferred
revenue
|
50,000 | - | ||||||
Fair
value of warrant and embedded derivative liability
obligations
|
1,553,306 | - | ||||||
Total
current liabilities
|
10,727,007 | 8,906,005 | ||||||
Commitments
and contingencies
|
||||||||
Stockholders’
deficit:
|
||||||||
Convertible
preferred stock, $0.01 par value; 5,000,000 shares authorized; 20,237
shares issued and outstanding at September 30, 2009 and December 31, 2008
– liquidation preference of $2,086,273 and $2,082,930 at September 30,
2009 and December 31, 2008, respectively.
|
1,834,299 | 1,834,299 | ||||||
Common
stock, $0.01 par value; 1,000,000,000 shares authorized; 112,959,272 and
109,387,843 shares issued and outstanding at September 30, 2009
and December 31, 2008, respectively.
|
1,129,593 | 1,093,878 | ||||||
Additional
paid-in capital
|
59,606,301 | 61,982,390 | ||||||
Accumulated
deficit
|
(72,638,917 | ) | (73,206,162 | ) | ||||
Total
stockholders’ deficit
|
(10,068,724 | ) | (8,295,595 | ) | ||||
Total
liabilities and stockholders’ deficit
|
$ | 658,283 | $ | 610,410 |
The
accompanying notes are an integral part of these condensed financial
statements.
3
Condensed
Statements of Operations
(unaudited)
Three months ended
|
Nine months ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Revenues
|
$ | 100 | $ | 17,213 | $ | 2,745 | $ | 23,968 | ||||||||
Operating
expenses:
|
||||||||||||||||
Research
and development
|
30,139 | 127,721 | 88,295 | 1,253,211 | ||||||||||||
Selling,
general and administrative
|
292,412 | 236,570 | 893,285 | 748,062 | ||||||||||||
Total
expenses
|
322,551 | 364,291 | 981,580 | 2,001,273 | ||||||||||||
Net
loss from operations
|
(322,451 | ) | (347,078 | ) | (978,835 | ) | (1,977,305 | ) | ||||||||
Other
income (expenses):
|
||||||||||||||||
Interest
and other income
|
- | 194 | - | 194 | ||||||||||||
Interest
and other expense
|
(212,387 | ) | (183,029 | ) | (565,544 | ) | (561,271 | ) | ||||||||
Gain
on sale of equipment
|
- | - | - | 40,646 | ||||||||||||
Gain
on settlement of note payable – Surgica
|
- | - | 638,380 | - | ||||||||||||
Gain
from change in fair value of warrant and embedded derivative
obligations
|
64,325 | - | 26,121 | - | ||||||||||||
Total
other income (expense)
|
(148,062 | ) | (182,835 | ) | 98,957 | (520,431 | ) | |||||||||
Net
loss
|
(470,513 | ) | (529,913 | ) | (879,878 | ) | (2,497,736 | ) | ||||||||
Dividends
on preferred stock
|
1,127 | 69,789 | 3,343 | 207,850 | ||||||||||||
Net
loss applicable to common shareholders
|
$ | (471,640 | ) | $ | (599,702 | ) | $ | (883,221 | ) | $ | (2,705,586 | ) | ||||
Basic
and diluted net loss per common share
|
$ | (0.004 | ) | $ | (0.006 | ) | $ | (0.008 | ) | $ | (0.029 | ) | ||||
Weighted
average number of common shares outstanding – basic and
diluted
|
112,959,272 | 105,944,857 | 112,802,286 | 93,614,046 |
The
accompanying notes are an integral part of these condensed financial
statements.
4
Condensed
Statements of Cash Flows
Nine months ended
|
||||||||
September 30,
|
||||||||
2009
|
2008
|
|||||||
Operating
activities
|
||||||||
Net
loss
|
$ | (879,878 | ) | $ | (2,497,736 | ) | ||
Adjustments
to reconcile net loss to net cash used for operating
activities:
|
||||||||
Depreciation
|
11,048 | 39,435 | ||||||
Stock-based
compensation expense
|
2,422 | 7,164 | ||||||
Debt
discount amortization
|
133,868 | 135,449 | ||||||
Gain
from change in fair value of warrant and embedded derivative
obligations
|
(26,121 | ) | - | |||||
Gain
on sale of fixed assets
|
- | (40,646 | ) | |||||
Gain
on settlement of note payable – Surgica
|
(638,380 | ) | - | |||||
Changes
in operating assets and liabilities:
|
||||||||
Deposits
|
(300 | ) | - | |||||
Prepaid
expenses and other current assets
|
(42,514 | ) | (25,592 | ) | ||||
Accounts
payable
|
131,910 | 114,711 | ||||||
Accrued
liabilities
|
554,052 | 490,839 | ||||||
Deferred
revenue
|
50,000 | - | ||||||
Net
cash used for operating activities
|
(703,893 | ) | (1,776,376 | ) | ||||
Investing
activities:
|
||||||||
Proceeds
from sale of equipment
|
- | 101,000 | ||||||
Net
cash provided by investing activities
|
- | 101,000 | ||||||
Financing
activities:
|
||||||||
Proceeds
from sale of common stock
|
75,000 | 1,655,000 | ||||||
Proceeds
from issuance of note payable
|
645,000 | - | ||||||
Net
cash provided by financing activities
|
720,000 | 1,655,000 | ||||||
Net
increase (decrease) in cash
|
16,107 | (20,376 | ) | |||||
Cash
at beginning of the period
|
1,291 | 21,936 | ||||||
Cash
at end of the period
|
$ | 17,398 | $ | 1,560 | ||||
Supplemental
disclosures of cash flow information
|
||||||||
Interest
paid
|
$ | 1,358 | $ | 2,129 | ||||
Non
cash investing and financing activity
|
||||||||
Debt
discount recorded in connection with issuance/amendment of
warrants
|
$ | - | $ | 135,449 | ||||
Warrants
issued with common stock and debt
|
$ | 551,539 | $ | - | ||||
Secured
note payable-related party issued for payment of accrued
interest
|
$ | - | $ | 538,837 |
The
accompanying notes are an integral part of these condensed financial
statements.
5
Protein
Polymer Technologies, Inc.
(unaudited)
Note
1. Basis of Presentation and Summary of Significant Accounting
Policies
The
accompanying unaudited condensed financial statements have been prepared in
accordance with U.S. generally accepted accounting principles and the rules and
regulations of the Securities and Exchange Commission (“SEC”) related to a
quarterly report on Form 10-Q under the modified rules and regulations for
“Smaller Reporting Companies”. Accordingly, they do not include all of the
information and disclosures required by U.S. generally accepted accounting
principles for complete financial statements. However, the Company believes that
the condensed financial statements, including the disclosures herein, include
all adjustments necessary in order to make the financial statements presented
not misleading. The balance sheet as of December 31, 2008 was derived from the
Company’s audited financial statements. The financial statements
herein should be read in conjunction with our financial statements and notes
thereto included in our Annual Report on Form 10-K for the year ended December
31, 2008, as filed with the U.S. Securities and Exchange
Commission. The results of operations for the three and nine months
ended September 30, 2009 are not necessarily indicative of the results expected
for the fiscal year ending December 31, 2009.
Going
Concern and Liquidity
The
accompanying financial statements have been prepared on a going concern basis,
which contemplates the realization of assets and the satisfaction of liabilities
in the normal course of business. For the nine months ended September 30, 2009,
the Company incurred net losses and negative cash flows from operating
activities of approximately $880,000 and $704,000, respectively, and at
September 30, 2009, the Company had a working capital deficit of approximately
$10,632,000 and an accumulated deficit of approximately $72,639,000. The
Company’s cash balance as of September 30, 2009 was approximately $17,000 and,
in combination with anticipated additional contract and license payments, is
insufficient to meet ongoing capital requirements.
From
January 1, 2009 through September 30, 2009, required operating capital has been
obtained through proceeds totaling $75,000 from equity issuances and proceeds
totaling $645,000 from issuance of debt.
Management
is currently in discussion with other potential financing sources and
collaborative partners and is investigating other funding in the form of equity
investments and license fees. If adequate funds are not available, the Company
will be required to significantly curtail operations, sell or license out
significant portions of its technology, or possibly cease
operations. The financial statements do not include any adjustments
that might result should the Company be unable to continue as a going
concern.
Use
of Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these
estimates.
6
Protein
Polymer Technologies, Inc.
Notes
to Condensed Financial Statements
(unaudited)
Revenue
Recognition
Revenues
are recognized when earned in accordance with the terms and performance
requirements of the contracts, If the research and development
activities are not successful, the Company is not obligated to refund payments
previously received.
Research
and Development Costs
Research
and development costs are expensed as incurred.
Stock-Based
Compensation
The
Company measures the cost of employee services received in exchange for an award
of equity instruments based on the grant-date fair value of the award. That cost
is recognized over the period during which an employee is required to provide
service in exchange for the award – the requisite service period. The Company
determines the grant-date fair value of employee share options using the
Black-Scholes-Merton option-pricing model.
Investment
The
investment balance at September 30, 2009 and December 31, 2008 represents shares
of common stock owned by the Company in a privately held company which were
acquired pursuant to a license agreement. Based on the Company’s
limited ownership percentage, the investment is reported using the cost
method. Under the cost method, the Company does not record its
proportional share of earnings and losses of the investee, and income on the
investment is only recorded to the extent of dividends distributed from earnings
of the investee received subsequent to the date of acquisition.
The
Company reviews the carrying value of its cost-method investment for impairment
when indicators of impairment are present. When an impairment test demonstrates
that the fair value of an investment is less than its cost, Company management
will determine whether the impairment is either temporary or
other-than-temporary. Examples of factors which may be indicative of
an other-than-temporary impairment include i) the length of time and extent to
which market value has been less than cost, ii) the financial condition and
near-term prospects of the issuer, iii) and the intent and ability of the
Company to retain its investment in the issuer for a period of time sufficient
to allow for any anticipated recovery in market value. If the decline
in fair value is determined by management to be other-than-temporary, the cost
basis of the investment is written down to its estimated fair value as of the
balance sheet date of the reporting period which the assessment is made. This
fair value becomes the investment’s new cost basis, which is not changed for
subsequent recoveries in fair value. Any recorded impairment write-down
will be included in earnings as a realized loss in the period such write-down
occurs.
As of
September 30, 2009, the Company was not aware of any indicators of impairment
and believes that the carrying amount of its investment was not impaired at
September 30, 2009.
7
Protein
Polymer Technologies, Inc.
Notes
to Condensed Financial Statements
(unaudited)
The
carrying value of the Company’s cash, accounts payable and accrued expenses
approximate their respective fair values because of the short maturities of
these instruments. The carrying value of the Company’s notes payable obligations
approximates their fair value as the stated interest rates of these instruments
reflect rates currently available to the Company.
The
Company measures the fair value of applicable financial and non-financial assets
based on the following levels of inputs:
Level 1:
Quoted prices in an active market for identical assets or
liabilities.
Level 2:
Observable inputs other than Level 1 prices such as quoted prices for
similar assets or liabilities; quoted prices in markets that are not active; or
other inputs that are observable or can be corroborated by observable market
data for substantially the full term of the assets or liabilities.
Level 3:
Unobservable inputs that are supported by little or no market activity and that
are significant to the fair value of the assets or liabilities.
At
September 30, 2009, the Company re-measured the fair value of warrants and
embedded derivatives to purchase shares of common stock that were classified as
liabilities (see Note 4). These instruments were valued using Level 3 inputs
because there are certain unobservable inputs associated with them. The
following table reconciles the liability for these instruments measured at fair
value on a recurring basis using Level 3 inputs for the nine months ended
September 30, 2009:
Balance
at December 31, 2008
|
$ | - | ||
Cumulative
effect of accounting change (Note 7)
|
933,000 | |||
Issuance
of new warrants and embedded derivatives
|
646,000 | |||
Gain
on change in fair value included in net loss
|
(26,000 | ) | ||
Balance
at September 30, 2009
|
$ | 1,553,000 |
Fair
Value of Warrant and Embedded Derivative Obligations
Effective
January 1, 2009, 50,687,119 of the Company’s warrants and embedded derivatives
to purchase common stock previously treated as equity pursuant to the derivative
treatment exemption were no longer afforded equity treatment due to exercise
price reset and anti-liquidation features.
On
January 1, 2009, the Company reduced additional paid-in capital by $2,380,000
and decreased the beginning accumulated deficit by $1,447,000 as a cumulative
effect to establish a long-term warrant and embedded derivative liability of
$933,000 to recognize the fair value of such instruments.
8
Protein
Polymer Technologies, Inc.
Notes
to Condensed Financial Statements
(unaudited)
These
instruments were initially issued in connection with placement of the Company’s
common stock. The instruments were not issued with the intent of effectively
hedging any future cash flow, fair value of any asset, liability or any net
investment in a foreign operation. The instruments do not qualify for hedge
accounting, and as such, all future changes in the fair value of these
instruments will be recognized currently in earnings until such time as the
instruments are exercised or expire. These instruments do not trade in an active
securities market, and as such, we estimate the fair value of these instruments
using the Black-Scholes-Merton option pricing model using the following
assumptions at September 30, 2009:
Annual
dividend yield
|
0
|
% | ||
Expected
life (years)
|
0.4
– 4.3
|
|||
Risk-free
interest rate
|
0.2%
- 2.4
|
% | ||
Expected
volatility
|
246%
- 476
|
% |
Expected
volatility is based primarily on historical volatility. Historical volatility
was computed using daily pricing observations for recent periods that correspond
to the expected life of the instruments. The Company believes this method
produces an estimate that is representative of our expectations of future
volatility over the expected term of these instruments. The Company currently
has no reason to believe future volatility over the expected remaining life of
these instruments is likely to differ materially from historical volatility. The
expected life is estimated by management based on the remaining term of the
instruments. The risk-free interest rate is based on the rate for U.S. Treasury
securities over the expected life.
Income
Taxes
The
Company records income taxes using the asset and liability method. Deferred tax
assets and liabilities are recognized for the estimated future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their future respective tax bases. Deferred
tax assets and liabilities are measured using enacted tax rates in effect for
the year in which those temporary differences are expected to be recorded or
settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment
date. A valuation allowance is established to reduce the deferred tax
asset if it is more likely that the related tax benefits will not be realized in
the future.
Net
Loss per Common Share
Basic
loss per share is calculated using the weighted-average number of outstanding
common shares during the period. Diluted loss per share is calculated using the
weighted-average number of outstanding common shares and dilutive common
equivalent shares outstanding during the period, using either the as-converted
method for convertible notes and convertible preferred stock or the treasury
stock method for options and warrants.
Excluded
from diluted loss per common share as of September 30, 2009 and 2008 were
86,492,424 and 143,710,780 shares, respectively, issuable upon conversion of
convertible preferred stock, and common stock options and warrants, because the
effect of the inclusion of these shares would be anti-dilutive.
9
Protein
Polymer Technologies, Inc.
Notes
to Condensed Financial Statements
(unaudited)
Reclassifications
Certain
prior year amounts have been reclassified to conform to the 2009
presentation.
Recent
Accounting Pronouncements
Effective
September 2009, the Company revised references to authoritative accounting
literature in accordance with FASB Accounting Standards Codification (the
“Codification”). The Codification became the source of authoritative GAAP
recognized by the FASB to be applied by nongovernmental entities.
Rules and interpretive releases of the SEC under authority of federal
securities laws are also sources of authoritative GAAP for SEC
registrants. On the effective date, the Codification superseded all
then-existing non-SEC accounting and reporting standards. All other
non-grandfathered non-SEC accounting literature not included in the Codification
became non-authoritative.
Note
2.
|
Investment
|
The
investment included on our balance sheets at September 30, 2009 and December 31,
2008 represents the Company’s cost basis in shares of common stock of Spine
Wave, Inc. (“Spine Wave”), a privately held company focused on the development
and commercialization of innovative products and technologies for the treatment
of spinal disorders.
As of
September 30, 2009 the Company was not aware of any indicators of impairment
with respect to its investment in Spine Wave, and it was not practicable for the
Company to estimate the fair value of this investment because of the lack of
quoted market prices and the inability to otherwise estimate fair value without
incurring excessive costs. Management believed that the carrying
amount of its investment in Spine Wave was not impaired at September 30,
2009.
As
discussed in Note 4, all of the Spine Wave shares owned by the Company serve as
collateral for a currently outstanding note payable.
Note
3.
|
Accrued
Liabilities
|
Accrued
liabilities consist approximately of the following:
September 30,
|
December 31,
|
|||||||
2009
|
2008
|
|||||||
Payroll
and employee benefits
|
$ | 91,000 | 67,000 | |||||
Professional
fees
|
14,000 | - | ||||||
Accrued
interest
|
920,000 | 610,000 | ||||||
Insurance
premium financing
|
69,000 | 27,000 | ||||||
Directors
fees
|
130,000 | 100,000 | ||||||
Other
|
55,000 | 40,000 | ||||||
$ | 1,279,000 | 844,000 |
10
Protein
Polymer Technologies, Inc.
Notes
to Condensed Financial Statements
(unaudited)
Note
4.
|
Notes
Payable
|
Secured
Notes Payable – Related Party
As of
September 30, 2009, the amount due on the secured notes payable – related party
note includes the $6,415,000 outstanding balance plus $885,000 of accrued
interest. On September 21, 2009, the Company extended the maturity
date to September 30, 2010.
The note
is secured by a senior security interest in and general lien upon (i) 2,400,000
shares of Spine Wave, Inc. common stock owned by the Company; and (ii) all U.S.
patents owned by the Company.
Secured
Notes Payable – Other
On
September 3, 2009, the Company received proceeds of $150,000 as a secured
loan. This note is due on March 2, 2010 and bears an annual interest
rate of 10%. The interest is payable on the maturity date, either in
cash or common stock at a rate of $0.04 per share at the discretion of the
Company. The note is convertible into the Company’s common stock at
the rate of $0.04 per share subject to applicable anti-dilution provisions and
future pricing provisions. As of September 30, 2009 the total amount
of accrued interest owed was $1,000. The note is secured by a junior
interest in and general lien upon (i) 2,400,000 shares of Spine Wave, Inc.
common stock owned by the Company; and (ii) all U.S. patents owned by the
Company.
A portion
of the proceeds totaling $99,000 were allocated to the future pricing provisions
as debt discount. The fair value of this embedded derivative was
estimated on the issuance date using the Black-Scholes-Merton option valuation
model with the following assumptions:
Expected
annual dividends
|
0 | % | ||
Risk-free
interest rate
|
0.21 | % | ||
Expected
term (in years)
|
0.5 | |||
Expected
Volatility
|
466 | % |
The
carrying value of the secured notes payable - other at September 30, 2009, is
comprised of the following:
Principal
value of notes
|
$ | 150,000 | ||
Less:
Unamortized debt discount
|
(99,000 | ) | ||
$ | 51,000 |
The total
debt discount recorded is being amortized as interest expense over the expected
term of the notes using the effective interest method. During the
nine months ended September 30, 2009, the Company did not record non-cash
interest expense based on the debt discount amortization of the embedded
derivative.
11
Protein
Polymer Technologies, Inc.
Notes
to Condensed Financial Statements
(unaudited)
Notes
Payable - Other
On July
7, 2009 and August 14, 2009, the Company received proceeds of $50,000 and
$30,000, respectively, as unsecured loans. These notes are due on
July 6, 2010 and August 13, 2010, respectively, and bear an annual interest rate
of 8%. The interest and principal are payable on the maturity dates,
either in cash or common stock at a rate of $0.034, and $0.025 per share,
respectively, at the discretion of the Company. In connection with
the loans, the Company granted warrants to the noteholders to purchase an
aggregate of 1,492,537, and 1,200,000, shares, respectively, of the Company’s
common stock at an exercise price of $0.034 and $0.025 per share,
respectively. As of September 30, 2009 the total amount of accrued
interest owed was $1,000.
A portion
of the proceeds totaling $79,000 were allocated to the warrant liabilities and
as debt discount. The fair value of these warrants was estimated on
the date of grant using the Black-Scholes-Merton option valuation model with the
following assumptions:
|
7/7/09
Warrant
|
8/14/09
Warrant
|
||||||
Expected
annual dividends
|
0 | % | 0 | % | ||||
Risk-free
interest rate
|
1.55 | % | 1.48 | % | ||||
Expected
term (in years)
|
3.0 | 3.0 | ||||||
Expected
Volatility
|
287 | % | 299 | % |
The
carrying value of the notes payable - other at September 30, 2009, is comprised
of the following:
Principal
value of notes
|
$ | 725,000 | ||
Less:
Unamortized debt discount
|
(447,000 | ) | ||
$ | 278,000 |
The total
debt discount recorded is being amortized as interest expense over the expected
term of the notes using the effective interest method. During the
nine months ended September 30, 2009, the Company recorded non-cash interest
expense of approximately $134,000 based on the debt discount amortization of the
warrants.
Surgica
Notes
In
December 2005, in connection with a license agreement with Surgica Corporation
for the rights to certain intellectual property, the Company assumed several
notes payable agreements with an aggregate principal balance of
$519,000.
In March
2007, the license agreement with Surgica was terminated. On October
15, 2008, the noteholders instituted suit against the Company in Superior Court
of California, County of Sacramento seeking payment of these
notes. Until a final determination was made with respect to the
disposition of the notes, the Company continued to carry them on its balance
sheet.
On May
19, 2009, the plaintiffs filed a request for dismissal with prejudice of the
action against the Company, and the Company paid nothing to plaintiffs in
exchange for the dismissal. The dismissal was granted, and the
Company reversed the principal liability balance of $519,000 and the accrued
interest of $119,000 relating to this license agreement and recorded a gain on
extinguishment of $638,000 for the three-month period ended June 30,
2009. As such, neither the liability nor the related accrued interest
appears on the Company’s balance sheet as of September 30,
2009.
12
Protein
Polymer Technologies, Inc.
Notes
to Condensed Financial Statements
(unaudited)
Note
5.
|
Common
Stock
|
The
Company’s Board of Directors agreed to the terms of a Stock Purchase Agreement
(“SPA”) and a Registration Rights Agreement (“RRA”), each dated as of September
27, 2007 and amended on November 28, 2007, with TAG Virgin Islands, Inc.(“TAG”),
as agent for certain purchasers of the Company’s common stock. TAG is a
registered investment advisor and advises a number of the Company’s
stockholders, including certain members of the Company’s Board of Directors, in
investment decisions, including decisions about whether to invest in the
Company’s stock. The SPA essentially provides for the Company selling,
from time to time, shares of its common stock, par value $0.01, to the
purchasers at a purchase price determined as the closing price of the stock on
sale date. As a component of the purchase of the common stock, the purchaser
also will receive a warrant to purchase the same number of shares of common
stock in the future. Each warrant expires in five years from the date of
purchase and is exercisable at a per share price, subject to certain
anti-dilution provisions, equal to 100% of the purchase price paid by the
purchase. The SPA can be terminated at any time by TAG. The
purchasers have certain registration rights, as provided by the RRA, to require
the Company, at its cost, to file an effective registration statement with the
Securities and Exchange Commission.
For the
nine months ended September 30, 2009, the Company received an aggregate of
$75,000 in subscriptions for the purchase of 3,571,429 shares of common stock
and 3,571,429 warrants, subject to the terms of the SPA and
RRA. Between September 27, 2007 and September 30, 2009, the
Company received proceeds of $2,357,000 for the purchase of 46,070,548 shares of
common stock and 46,070,548 warrants pursuant to this Stock Purchase
Agreement.
Note
6.
|
Stock
Options
|
The
Company did not grant options during the nine months ended September 30,
2009. Stock option activity for the nine months ended September 30,
2009 is as follows:
|
Options
Outstanding
|
Weighted
Average
Exercise
Price
|
Weighted Average
Remaining
Contractual Term
(Years)
|
|||||||||
Outstanding
at December 31, 2008
|
3,507,500 | $ | 0.68 | 4.40 | ||||||||
Issued
|
- | - | ||||||||||
Exercised
|
- | - | ||||||||||
Cancelled
|
(77,500 | ) | $ | 0.46 | ||||||||
Outstanding
at September 30, 2009
|
3,430,000 | $ | 0.69 | 3.74 | ||||||||
Exercisable
at September 30, 2009
|
3,430,000 | $ | 0.69 | 3.74 |
During
the three and nine month periods ended September 30, 2009, the Company
recognized $0 and $2,400 in stock-based compensation expense. The
charges in the comparable periods ended September 30, 2008 were $2,900 and
$7,200, respectively. As of September 30, 2009, all unrecognized
compensation expense related to unvested share-based compensation arrangements
was fully recognized. There was no intrinsic value related to the
stock options outstanding as of September 30, 2009.
13
Protein
Polymer Technologies, Inc.
Notes
to Condensed Financial Statements
(unaudited)
Note
7.
|
Warrants
to Purchase Common Stock
|
The Company has reserved for
issuance, out of currently authorized and unissued shares of common stock,
shares underlying outstanding warrants to purchase common stock. The
fair values of the warrant obligations were recorded as liabilities on the dates
of issuance. Upon exercise of the warrants, shares of common stock
will be issued out of currently authorized and unissued shares. A
summary of warrant activity for the nine months ended September 30, 2009 is as
follows:
Number of
Warrants
Outstanding
and
Exercisable
|
Weighted-
Average
Exercise
Price
|
|||||||
Outstanding,
December 31, 2008
|
63,246,315 | $ | 0.14 | |||||
Granted
|
26,437,043 | $ | 0.02 | |||||
Exercised
|
- | $ | - | |||||
Expired
|
(12,468,589 | ) | $ | 0.50 | ||||
Outstanding,
September 30, 2009
|
77,214,769 | $ | 0.04 |
At
September 30, 2009, the weighted-average remaining contractual life of the
warrants was approximately 3.10 years.
Note
8.
|
Sanyo
Contract
|
On June
29, 2009, the Company received from Sanyo Chemical Industries, Ltd. (“Sanyo”) a
fully executed copy of a License Agreement between Sanyo and the
Company. The effective date of the Agreement is June 18,
2009. Pursuant to the Agreement, the Company has granted
a non-exclusive, world-wide license to Sanyo of its technology, know-how, and
intellectual property relating to recombinant, repetitive unit proteins and
peptides, for the purposes of developing and commercializing products related to
Sanyo’s specific fields of business. The Agreement remains in effect
until the expiration of the last to expire of the Company’s patents licensed by
Sanyo under this Agreement. The Agreement further provides the
Company with initial and ongoing license fees, technical service and training
fees, and a percentage royalty on the quarterly net sales of any new products
developed by Sanyo under this Agreement.
Note
9.
|
Subsequent
Events
|
On
October 21, 2009 and November 12, 2009, the Company received proceeds of
$100,000 and $100,000, respectively, pursuant to note payable agreements entered
into with clients of TAG. These loans are represented by secured
notes issued by the Company. These notes are due on April 20, 2010
and May 11, 2010, respectively, and bear an annual interest rate of
10%. The interest is payable on the maturity dates, either in cash or
common stock at a rate of $0.04 per share at the discretion of the
Company. These notes are convertible into the Company’s common stock
at the rate of $0.04 per share subject to applicable anti-dilution
provisions. The Company did not grant warrants to the noteholders in
connection with these loans. These notes are secured by a junior
interest in and general lien upon (i) 2,400,000 shares of Spine Wave, Inc.
common stock owned by the Company; and (ii) all U.S. patents owned by the
Company.
The
Company evaluated subsequent events through November 20, 2009, which is the date
the financial statements were issued.
14
Item 2. Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
The
interim financial statements and this Management’s Discussion and Analysis of
Financial Condition and Results of Operations should be read in conjunction with
the financial statements and notes thereto for the year ended December 31,
2008, and the related Management’s Discussion and Analysis of Financial
Condition and Results of Operations, both of which are contained in our Annual
Report on Form 10-K for the year ended December 31, 2008. In addition to
historical information, this discussion and analysis contains forward-looking
statements that involve risks, uncertainties, and assumptions. When used herein,
the words “believe,” “anticipate,” “expect,” “estimate” and similar expressions
are intended to identify such forward-looking statements. Our actual results may
differ materially from those anticipated in these forward-looking statements as
a result of certain factors, including but not limited to those set forth under
the caption “Risk Factors” in the Form 10-K for the year ended
December 31,2008. We undertake no obligation to update any of the
forward-looking statements contained herein to reflect any future events or
developments.
Company
and Technology Background
Protein
Polymer Technologies, Inc. (hereafter the “Company”, “our” or “we”), a Delaware
corporation, is a biotechnology company incorporated on July 6, 1988. We are
engaged in the research, development and production of bio-active devices to
improve medical and surgical outcomes. Through our patented technology to
produce proteins of unique design, biological and physical product components
are integrated to provide for optimized clinical performance.
We are
focused on developing products to improve medical and surgical outcomes, based
on an extensive portfolio of proprietary biomaterials. Biomaterials are
materials that are used to direct, supplement, or replace the functions of
living systems. The interaction between materials and living systems is dynamic.
It involves the response of the living system to the materials (e.g.,
biocompatibility) and the response of the materials to the living system (e.g.,
remodeling). The requirements for performance within this demanding biological
environment have been a critical factor in limiting the possible metal, polymer,
and ceramic compositions to a relatively small number that to date have been
proven useful in medical devices implanted within the body.
The goal
of biomaterials development historically has been to produce inert materials,
i.e., materials that elicit little or no response from the living system.
However, we believe that such conventional biomaterials are constrained by their
inability to convey appropriate messages to the cells that surround them, the
same messages that are conveyed by proteins in normal human
tissues.
The
products we have targeted for development are based on a new generation of
biomaterials which have been designed to be recognized and accepted by human
cells to aid in the natural process of bodily repair, (including the healing of
tissue and the restoration or augmentation of its form and function) and,
ultimately, to promote the regeneration of tissues. We believe that the
successful realization of these properties will substantially expand the role
that artificial devices can play in the prevention and treatment of human
disability and disease, and enable the culture of native tissues for successful
reimplantation.
Through
our proprietary core technology, we produce high molecular weight polymers that
can be processed into a variety of material forms such as gels, sponges, films,
and fibers, with their physical strength and rate of resorption tailored to each
potential product application. These polymers are constructed of the same amino
acids as natural proteins found in the body. We have demonstrated that our
polymers can mimic the biological and chemical functions of natural proteins and
peptides, such as the attachment of cells through specific membrane receptors
and the ability to participate in enzymatic reactions, thus overcoming a
critical limitation of conventional biomaterials. In addition, materials made
from our polymers have demonstrated excellent biocompatibility in a variety of
preclinical safety studies.
15
Our
patented core technology enables messages that direct activities of cells to be
precisely formulated and presented in a structured environment similar to what
nature has demonstrated to be essential in creating, maintaining and restoring
the body’s functions. Our protein polymers are made by combining the techniques
of modern biotechnology and traditional polymer science. The techniques of
biotechnology are used to create synthetic genes that direct the biological
synthesis of protein polymers in recombinant microorganisms. The methods of
traditional polymer science are used to design novel materials for specific
product applications by combining the properties of individual “building block”
components in polymer form.
In
contrast to natural proteins, either isolated from natural sources or produced
using traditional genetic engineering techniques, our technology results in the
creation of new proteins with unique properties. We have demonstrated an ability
to create materials that:
· combine
properties of different proteins found in nature;
· reproduce
and amplify selected activities of natural proteins;
· eliminate
undesired properties of natural proteins; and
· incorporate
synthetic properties via chemical modifications
This
ability is fundamental to our current primary product research and development
focus — tissue repair and regeneration. Tissues are highly organized structures
made up of specific cells arranged in relation to an extracellular matrix
(“ECM”), which is principally composed of proteins. The behavior of cells is
determined largely by their interactions with the ECM. Thus, the ability to
structure the cells’ ECM environment allows the protein messages they receive —
and their activity — to be controlled.
Results
of Operations
Revenue. Product and licensing
revenues for the three and nine months ended September 30, 2009 were
approximately $0 and $3,000, respectively, compared to $17,000 and $24,000,
respectively, for revenue from product sales for the comparable periods in
2008.
Research and
Development Expenses. Research and development
expenses for the three and nine months ended September 30, 2009 were $30,000 and
$88,000, respectively, compared to $128,000 and $1,253,000, respectively, for
the comparable periods in 2008. The decline resulted from our
inability to raise additional capital, and the closing of our laboratory and
administrative facility, and the subsequent sub-contracting of the laboratory
function in 2008. We expect our research and development expenses
will increase in the future only to the extent that additional capital is
obtained or future collaborative development and licensing agreements are
secured.
Selling, General
and Administrative Expenses. Selling, general and
administrative expenses for the three and nine months ended September 30, 2009
were $292,000 and $893,000, respectively, as compared to $237,000 and $748,000,
respectively, for the comparable periods in 2008. To the extent
possible, we continue to concentrate on controlling costs in this area. We
expect our selling, general and administrative expenses will increase in the
future only to the extent that additional capital is obtained or future
collaborative development and licensing agreements are secured.
We
recognized a non-cash gain from the change in fair value of the warrant and
embedded derivative obligations for the three and nine months ended September
30, 2009 of $64,000 and $26,000,
respectively.
16
Operating
Losses. For the three months ended September 30, 2009, we recorded a net
loss applicable to common shareholders of $472,000 or $0.004 per share, as
compared to a loss of $600,000 or $0.006 per share for the comparable period in
2008. For the nine months ended September 30, 2009, we recorded a net loss
applicable to common shareholders of $883,000 or $0.008 per share, as compared
to a loss of $2,706,000 or $0.029 per share for the comparable period in
2008.
Liquidity
and Capital Resources
As of
September 30, 2009, we had cash totaling approximately $17,000, as compared to
$1,000 at December 31, 2008. As of September 30, 2009, we had a working capital
deficit of $10,632,000 compared to a working capital deficit of $8,870,000 at
December 31, 2008.
We do not
have any off balance sheet financing activities and do not have any special
purpose entities. We had no long-term capital lease obligations as of September
30, 2009. During the nine months ended September 30, 2009, we did not purchase
or sell any capital equipment or leasehold improvements. We do not
anticipate significant expenditures for capital equipment or leasehold
improvements for the remainder of 2009.
We
believe our existing available cash, cash equivalents, and accounts receivable,
in combination with anticipated contract research payments and revenues received
from the transfer of clinical testing materials, will not be sufficient to meet
our anticipated capital requirements during 2009. Substantial additional capital
resources are required to fund continuing expenditures related to our operating,
research, development, manufacturing and business development
activities.
As
discussed in Note 5 to the financial statements, the Company entered into a
common stock purchase agreement (hereafter “SPA”) in September 2007 and has
raised $2,357,000 as of September 30, 2009, as a result of that SPA. The
SPA has been our main source of external financing since September
2007.
Prior to
the SPA, required funding was provided to us through a note payable agreement
(known as the Szulik Loan) by Matthew Szulik, one of our stockholders. On January 9, 2008, we replaced the Szulik Loan by issuing to Mr.
Szulik a new note in the principal amount of $6,415,000. On September
21, 2009, the scheduled maturity date was extended to September 30,
2010.
Between
October 2, 2008 and November 20, 2009, the Company received proceeds of
$1,075,000 as loans from clients of TAG. These loans are represented
by notes issued by the Company. The term of these notes range from
six months to one year after issuance, and bear an annual interest rate ranging
from 8% to 10%. The interest and principal on the notes representing
$725,000 of these loans are payable on the maturity dates, either in cash or
common stock, at the discretion of the Company, at rates ranging from $0.02 to
$0.05 per share. The interest and principal on the notes representing
$350,000 of these loans are also payable on the maturity dates, but
the interest is payable, either in cash or common stock, at the discretion of
the Company, at a rate of $0.04 per share and these notes are convertible at the
rate of $0.04 per share, subject to applicable anti-dilution
clauses.
As noted
above, we believe our existing available cash as of September 30, 2009 will not
be sufficient to meet our anticipated capital requirements during
2009. We are unable to pay certain vendors in a timely manner and
remain over 90 days past due with certain critical vendors, such as outside
laboratories and law firms. Additionally, we are currently outsourcing
administrative and accounting functions as a result of cutbacks necessitated by
insufficient monetary resources. We are attempting to remedy this problem. Our
ability to continue operating is dependent on the receipt of additional funding
and substantial additional capital resources will be required to fund continuing
expenditures related to our research, development, manufacturing and business
development activities. If adequate funds are not available, we will be required
to significantly curtail our operating plans and most likely cease operations.
We are still in discussions with other potential financing sources and
collaborative partners, and are seeking additional funding in the form of equity
investments, license fees, loans, milestone payments or research and development
payments. We cannot assure that any of these other sources of funding will be
consummated in the timeframes needed for continuing operations or on terms
favorable to us, if at all.
17
Inflation
To date,
we believe that inflation and changing prices have not had a material impact on
our continuing operations. However, we have experienced increased general and
product liability insurance costs over the past two years, and these increases
are expected to continue for the foreseeable future.
Caution
on Forward-Looking Statements
Any
statements in this report about our expectations, beliefs, plans, objectives,
assumptions or future events or performance are not historical facts and are
forward-looking statements. You can identify these forward-looking statements by
the use of words or phrases such as “believe,” “may,” “could,” “will,”
“estimate,” “continue,” “anticipate,” “intend,” “seek,” “plan,” “expect,”
“should” or “would.” Among the factors that could cause actual results to differ
materially from those indicated in the forward-looking statements are risks and
uncertainties inherent in our business including, without limitation: the
potential for the FDA to impose non-clinical, clinical or other requirements to
be completed before or after use of any of our intellectual property or
methodology; our ability to demonstrate to the satisfaction of potential
collaborative development partners of the feasibility of utilizing our
intellectual property or methodology; the failure to generate the potential to
enter into and the terms of any strategic transaction relating to our
intellectual property or methodology; the scope, validity and duration of patent
protection and other intellectual property rights for our intellectual property
or methodology ; estimates of the potential markets for our intellectual
property or methodology and our ability to compete in these markets; our
products, our expected future revenues, operations and expenditures and
projected cash needs; our ability to raise sufficient capital and other risks
detailed in this report. Although we believe that the expectations reflected in
our forward-looking statements are reasonable, we cannot guarantee future
results, events, levels of activity, performance or achievement. We undertake no
obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise, unless required by
law. This caution is made under the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995.
Item 3.
Quantitative and Qualitative Disclosures about Market Risk
As a
smaller reporting company, as defined by Rule 12b-2 of the Exchange Act and in
Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting
obligations, and therefore are not required to provide the information requested
by this Item.
Item 4T.
Controls and Procedures
We
maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed by the Company in the reports we file or
submit under the Securities Exchange Act of 1934, is recorded, processed,
summarized and reported within the time periods specified in the Securities and
Exchange Commission’s rules and forms, and that such information is accumulated
and communicated to our management, including our Interim Chief Executive
Officer and Interim Principal Financial Officer, who is the same person, to
allow timely decisions regarding required disclosure. As reported in
our Annual Report on Form 10-K for the year ended December 31, 2008 (filed on
July 24, 2009), Company management identified material weaknesses in our
internal accounting control over financial reporting as of December 31, 2008,
including:
18
|
·
|
Pervasive,
entity-level control deficiencies across key COSO components in the
Company’s control environment,
including:
|
|
o
|
Controls
over the period-end financial closing and reporting
processes;
|
|
o
|
Controls
over managerial override;
|
|
o
|
Controls
to prevent or reduce the risk of fraudulent
activity;
|
|
o
|
Controls
to monitor other controls, including the role of the Board of Directors;
and
|
|
o
|
Controls
related to risk assessment.
|
|
·
|
An
absence of independence and financial expertise on the Board of Directors,
limiting its ability to provide effective
oversight.
|
|
·
|
An
absence of a formalized process to manage the Company’s internal controls
over financial reporting and become compliant with Section 404 of the
Sarbanes-Oxley Act.
|
|
·
|
Inadequate
controls over the period-end financial close and reporting
processes;
|
|
·
|
Insufficient
personnel resources and technical accounting expertise within the
accounting function to provide for adequate segregation of duties and to
properly account for non-routine or complex accounting matters;
and
|
|
·
|
Inadequate
documentation of policies, procedures, and controls related to finance and
accounting, including inadequate procedures for appropriately identifying,
assessing, and applying accounting
principles.
|
As a
result of these material weaknesses, management concluded that the Company’s
internal control over financial reporting was not effective as of December 31,
2008.
As of
September 30, 2009, our management, including our Interim Chief Executive
Officer and Interim Principal Financial Officer, who is the same person,
evaluated the effectiveness of our disclosure controls and procedures (as
defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act
of 1934). As part of its evaluation, management evaluated whether the previously
reported material weaknesses in internal control over financial reporting
continue to exist. Company management has determined that it cannot assert that
the reported material weaknesses have been effectively remediated as of
September 30, 2009. Accordingly, Company management, including our Interim Chief
Executive Officer and Interim Principal Financial Officer, who is the same
person, has concluded that Company’s disclosure controls and procedures were not
effective as of September 30, 2009.
Notwithstanding
the identified material weaknesses, Company management has concluded that the
financial statements included in this Quarterly Report present fairly, in all
material respects, the Company’s financial position, results of operations and
cash flows for the periods presented in conformity with accounting principles
generally accepted in the United States.
There
have been no changes in our internal control over financial reporting that
occurred during the quarter ended September 30, 2009 that have materially
affected, or are reasonably likely to materially affect, our internal control
over financial reporting.
19
Item 1.
Legal Proceedings
From time
to time, we are involved in litigation and proceedings in the ordinary course of
our business. We are not currently involved in any legal proceeding that we
believe would have a material adverse effect on our business or financial
condition.
During
the nine months ended September 30, 2009, we received an aggregate of $75,000
for the purchase of 3,571,429 common shares and 3,571,429 warrants to purchase
our common stock. Between January 1, 2009 and November 20, 2009, we
sold notes in the aggregate principal amount of $845,000 and issued warrants in
connection therewith to purchase 22,865,614 shares of our common
stock. Reference is made to Liquidity and Capital resources under
Management’s Discussion and Analysis of Financial Condition and Results of
Operations or information relating to these sales. The sales were
made pursuant to the exemption from the registration provisions of the
Securities Act of 1933 provided by Section 4 (2) thereof.
As of
November 20, 2009, we had used substantially all of the net proceeds which were
generated from the sale of our securities described in the preceding paragraph
to fund ongoing operations. We have no remaining proceeds from these sales and
will require further sales or other financing transactions or collaborative
development agreements to maintain ongoing operations.
Not
applicable.
Not
applicable.
20
Item 6.
Exhibits
The
following documents are included or incorporated by reference:
Exhibit Number
|
Description
|
|
10.6.1*
|
Secured
Promissory Note issued to Matthew J. Szulik, dated as of January 9,
2008.
|
|
10.6.2**
|
Form
of Promissory Note issued to noteholders, dated as of October 2, 2008,
November 3, 2008, December 11, 2008, February 6, 2009, March 18, 2009,
April 20, 2009, May 7, 2009, June 5, 2009, July 7, 2009, and August 14,
2009.
|
|
10.6.3**
|
Form
of Warrant to Purchase Shares of Common Stock of the Company in connection
with the Promissory Note issued to noteholders, dated as of October 2,
2008, November 3, 2008, December 11, 2008, February 6, 2009, March 18,
2009, April 20, 2009, and May 7, 2009, June 5, 2009, July 7,
2009, and August 14, 2009.
|
|
10.6.4***
|
License
Agreement, effective June 18, 2009 and dated June 29, 2009, between the
Company and Sanyo Chemical Industries, Ltd.
|
|
10.6.5
|
Secured
Promissory Note Replacement Agreement, dated as of September 21, 2009,
between the Company and Matthew J. Szulik.
|
|
10.6.6
|
Form
of Promissory Note issued to noteholders, dated as of September 3, 2009,
October 21, 2009, and November 12, 2009.
|
|
31.1
|
Certification
of Interim Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
|
31.2
|
Certification
of Interim Principal Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
|
32.1
|
Certification
of Interim Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
|
32.2
|
Certification
of Interim Principal Financial Officer pursuant to 18 U.S.C. Section 1350
as adopted pursuant to Section 960 of the Sarbanes-Oxley Act of
2002.
|
*
|
Incorporated
by reference to Registrant’s Report on Form 10-KSB for the fiscal year
ended December 31, 2007, SEC File No. 000-19724, as filed with the
Commission on May 12, 2008.
|
**
|
Incorporated
by reference to Registrant’s Report on Form 10-Q for the quarter ended
September 30, 2008, SEC File No. 000-19724, as filed with the Commission
on November 19, 2008.
|
***
|
Incorporated
by reference to Registrant’s Report on Form 10-K for the fiscal year ended
December 31, 2008, SEC File No. 000-19724, as filed with the Commission on
July 24, 2009.
|
21
SIGNATURES
In
accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
PROTEIN
POLYMER TECHNOLOGIES, INC.
|
||
|
|
|
Date:
November 20, 2009
|
By:
|
/s/
James B. McCarthy
|
James
B. McCarthy
|
||
Interim
Chief Executive Officer
|
||
Date:
November 20, 2009
|
By:
|
/s/
James B. McCarthy
|
James
B. McCarthy
|
||
Interim
Principal Financial
Officer
|
22