Attached files
file | filename |
---|---|
10-K - QUANTRX BIOMEDICAL CORP | v179442_10k.htm |
EX-32.2 - QUANTRX BIOMEDICAL CORP | v179442_ex32-2.htm |
EX-31.1 - QUANTRX BIOMEDICAL CORP | v179442_ex31-1.htm |
EX-31.2 - QUANTRX BIOMEDICAL CORP | v179442_ex31-2.htm |
EX-23.1 - QUANTRX BIOMEDICAL CORP | v179442_ex23-1.htm |
EX-32.1 - QUANTRX BIOMEDICAL CORP | v179442_ex32-1.htm |
EX-99.1 - QUANTRX BIOMEDICAL CORP | v179442_ex99-1.htm |
FLUOROPHARMA,
INC.
(a
development stage company)
FINANCIAL
STATEMENTS
Table
of Contents
Report
of Independent Registered Public Accounting Firm
|
2
|
|
Balance
Sheets
|
3
|
|
Statements
of Operations
|
4
|
|
Statements
of Cash Flows
|
5
|
|
Statements
of Stockholders’ Equity
|
6
|
|
Notes
to Financial Statements
|
7
|
1
To the
Board of Directors and Shareholders
FluoroPharma,
Inc.
REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
We have
audited the accompanying balance sheets of FluoroPharma, Inc. as of December 31,
2009 and 2008 and the related statements of operations, stockholders’ equity and
cash flows for the years then ended and for the period from June 13, 2003
(inception) to December 31, 2009. These financial statements are the
responsibility of the Company’s management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of FluoroPharma, Inc. as of December
31, 2009 and 2008, and the results of its operations and its cash flows for the
years then ended and for the period from June 13, 2003 (inception) to December
31, 2009, in conformity with accounting principles generally accepted in the
United States of America.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 2 to the financial
statements, the Company’s accumulated deficit and lack of revenues raise
substantial doubt about its ability to continue as a going concern. Management’s
plans regarding the resolution of this issue are also discussed in Note 2. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/
BehlerMick PS
BehlerMick
PS
Spokane,
Washington
March 30,
2010
2
FLUOROPHARMA,
INC. (a development stage company)
BALANCE
SHEETS
December 31, 2009
|
December 31, 2008
|
|||||||
ASSETS
|
||||||||
Current
Assets:
|
||||||||
Cash
and cash equivalents
|
$ | 1,724 | $ | 413 | ||||
Accounts
receivable
|
50,000 | - | ||||||
Deposits
|
- | 3,565 | ||||||
Prepaid
expenses
|
9,791 | 104,506 | ||||||
Total
Current Assets
|
61,515 | 108,484 | ||||||
Property
and equipment, net
|
58,994 | 274,405 | ||||||
Intangible
assets, net
|
71,533 | 90,158 | ||||||
Total
Assets
|
$ | 192,042 | $ | 473,047 | ||||
LIABILITIES
AND STOCKHOLDERS’ DEFICIT
|
||||||||
Current
Liabilities:
|
||||||||
Accounts
payable
|
$ | 785,789 | $ | 1,199,871 | ||||
Accrued
expenses
|
419,100 | 215,050 | ||||||
Short-term
convertible notes payable
|
50,000 | - | ||||||
Advances
from stockholder
|
- | 665,668 | ||||||
Notes
payable – stockholder
|
- | 900,000 | ||||||
Accrued
interest – stockholder
|
- | 83,067 | ||||||
Total
Current Liabilities
|
1,254,889 | 3,063,656 | ||||||
Commitments
and Contingencies
|
- | - | ||||||
Stockholders’
Equity (Deficit):
|
||||||||
Preferred
stock; $0.001 par value, 1,500,000 authorized no shares issued
and outstanding
|
- | - | ||||||
Common
stock - Class A - $0.001 par value, 15,000,000 authorized; 5,778,237 and
3,847,558 shares issued and outstanding
|
5,778 | 3,848 | ||||||
Common
stock- Class B - $0.001 par value, 3,500,000 authorized; 2,691,788 and 0
shares issued and outstanding
|
2,692 | - | ||||||
Additional
paid-in capital
|
6,442,801 | 5,051,666 | ||||||
Deficit
accumulated in the development stage
|
(7,514,118 | ) | (7,646,123 | ) | ||||
Total
Stockholders’ Deficit
|
(1,062,847 | ) | (2,590,609 | ) | ||||
Total
Liabilities and Stockholders’ Deficit
|
$ | 192,042 | $ | 473,047 |
The
accompanying notes are an integral part of these financial
statements.
3
FLUOROPHARMA,
INC. (a development stage company)
STATEMENTS
OF OPERATIONS
For
the Years Ended December 31,
|
June
13, 2003
(inception) to |
|||||||||||
2009
|
2008
|
December 31, 2009
|
||||||||||
Operating
Expenses:
|
||||||||||||
General
and administrative
|
$ | 652,519 | $ | 751,245 | $ | 2,459,350 | ||||||
Professional
fees
|
145,335 | 270,185 | 2,095,725 | |||||||||
Research
and development
|
269,451 | 1,125,299 | 3,958,743 | |||||||||
Amortization
|
18,624 | 18,901 | 67,575 | |||||||||
Depreciation
|
27,438 | 29,398 | 82,065 | |||||||||
Total
Operating Expenses
|
1,113,367 | 2,195,028 | 8,663,458 | |||||||||
Loss
from Operations
|
(1,113,367 | ) | (2,195,028 | ) | (8,663,458 | ) | ||||||
Other
Income (Expense):
|
||||||||||||
Interest
income
|
61 | - | 4,327 | |||||||||
Gain
on debt settlement
|
1,358,127 | - | 1,358,127 | |||||||||
Loss
on disposition of fixed assets
|
(55,911 | ) | (7,293 | ) | (63,204 | ) | ||||||
Interest
expense
|
(56,905 | ) | (69,823 | ) | (149,910 | ) | ||||||
Total
Other Income (Expense), net
|
1,245,372 | (77,116 | ) | 1,149,340 | ||||||||
Income
(Loss) Before Taxes
|
132,005 | (2,272,144 | ) | (7,514,118 | ) | |||||||
Provision
for Income Taxes
|
- | - | - | |||||||||
Net
Income (Loss)
|
$ | 132,005 | $ | (2,272,144 | ) | $ | (7,514,118 | ) | ||||
Basic
Net Income (Loss) per Common Share
|
$ | 0.02 | $ | (0.59 | ) | |||||||
Diluted
Net Income (Loss) per Common Share
|
$ | 0.02 | $ | (0.59 | ) | |||||||
Weighted
Average Shares Used in per Share Calculation:
|
||||||||||||
Basic
|
6,761,025 | 3,847,558 | ||||||||||
Diluted
|
6,803,025 | 3,847,558 |
The
accompanying notes are an integral part of these financial
statements.
4
FLUOROPHARMA,
INC. (a development stage company)
STATEMENTS
OF CASH FLOWS
For
the Years Ended December 31,
|
June
13, 2003
(inception)
to
|
|||||||||||
2009
|
2008
|
December 31, 2009
|
||||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
Net
income (loss)
|
$ | 132,005 | $ | (2,272,144 | ) | $ | (7,514,118 | ) | ||||
Adjustments
to reconcile net loss to net cash used by operating
activities:
|
||||||||||||
Depreciation
and amortization
|
46,062 | 48,299 | 149,640 | |||||||||
Issuance
of common stock for consulting
|
- | - | 23,488 | |||||||||
Expenses
related to employee stock options
|
157,933 | 274,299 | 480,277 | |||||||||
Non-cash
fair value of stock options issued to non-employees for
consulting
|
54,064 | 216,779 | 1,370,926 | |||||||||
Loss
on fixed asset dispositions
|
55,911 | 7,293 | 63,204 | |||||||||
Gain
on debt settlement
|
(1,358,127 | ) | - | (1,358,127 | ) | |||||||
Expenses
paid by issuance of preferred stock
|
- | - | 50,000 | |||||||||
(Increase)
decrease in:
|
||||||||||||
Prepaid
expenses
|
94,715 | 54,904 | (9,791 | ) | ||||||||
Deposits
|
3,565 | (1,704 | ) | - | ||||||||
Increase
(decrease) in:
|
||||||||||||
Accounts
payable
|
(98,396 | ) | 739,329 | 967,762 | ||||||||
Accrued
expenses
|
228,050 | 94,982 | 526,167 | |||||||||
Net
Cash Used by Operating Activities
|
(684,218 | ) | (837,963 | ) | (5,250,572 | ) | ||||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||
Cash
paid for intangible assets
|
- | (28,715 | ) | (139,109 | ) | |||||||
Cash
paid for purchase of property and equipment
|
(1,251 | ) | (66,708 | ) | (203,864 | ) | ||||||
Net
Cash Used by Investing Activities
|
(1,251 | ) | (95,423 | ) | (342,973 | ) | ||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
Proceeds
from issuance of notes – stockholder
|
- | 300,000 | 1,400,000 | |||||||||
Proceeds
from issuance of short-term convertible notes
|
50,000 | - | 50,000 | |||||||||
Advances
from stockholder
|
13,832 | 625,668 | 679,500 | |||||||||
Proceeds
from sale of common stock - Class A
|
- | - | 2,317,821 | |||||||||
Proceeds
from sale of common stock - Class B
|
622,948 | - | 622,948 | |||||||||
Proceeds
from sale of preferred stock
|
- | - | 525,000 | |||||||||
Net
Cash Provided by Financing Activities
|
686,780 | 925,668 | 5,595,269 | |||||||||
Net
Increase (Decrease) in Cash and Cash Equivalents
|
1,311 | (7,718 | ) | 1,724 | ||||||||
Cash
and Cash Equivalents, Beginning of Period
|
413 | 8,131 | - | |||||||||
Cash
and Cash Equivalents, End of Period
|
$ | 1,724 | $ | 413 | $ | 1,724 | ||||||
Supplemental
Cash Flow Disclosures:
|
||||||||||||
Interest
expense paid in cash
|
$ | 1,572 | $ | 1,009 | $ | 11,511 | ||||||
Income
tax paid
|
- | - | - | |||||||||
Supplemental
Non-Cash Disclosure:
|
||||||||||||
Conversion
of preferred stock to common stock
|
$ | - | $ | - | $ | 288 | ||||||
Notes
payable – stockholder – settled in common stock
|
900,000 | - | 1,400,000 | |||||||||
Accrued
interest – stockholder – settled in common stock
|
101,067 | - | 109,889 | |||||||||
Increase
in payables related to purchase of fixed assets
|
- | 133,713 | - | |||||||||
Advances
from stockholders settled in common stock
|
679,500 | - | 679,500 | |||||||||
Accounts
payable settled in common stock
|
103,872 | - | 103,872 | |||||||||
Accounts
payable settled in common stock options
|
30,500 | - | 30,500 | |||||||||
Accrued
expenses settled in common stock options
|
3,000 | - | 3,000 | |||||||||
Decrease
in accounts payable related to fixed asset disposition
|
133,314 | - | 133,314 | |||||||||
Decrease
in accounts payable related to settlement
|
48,000 | - | 48,000 | |||||||||
Decrease
in accrued expenses related to settlement
|
3,000 | - | 3,000 | |||||||||
Increase
in accounts receivable related to common stock issuance
|
50,000 | - | 50,000 |
The
accompanying notes are an integral part of these financial
statements.
5
FLUOROPHARMA,
INC. (a development stage company)
STATEMENTS
OF STOCKHOLDERS’ EQUITY
Preferred
Stock
|
Common
Stock – Class A
|
Common
Stock – Class B
|
Total
|
|||||||||||||||||||||||||||||||||
Number
of
Shares
|
Amount
|
Number
of
Shares
|
Amount
|
Number
of
Shares
|
Amount
|
Additional
Paid-in
Capital
|
Accumulated
Deficit
|
Stockholders’
Equity
|
||||||||||||||||||||||||||||
Issuance
of common stock
|
- | $ | - | 1,797,500 | $ | 1,798 | - | - | $ | - | $ | - | $ | 1,798 | ||||||||||||||||||||||
Issuance
of preferred stock
|
137,500 | 138 | - | - | 274,862 | - | 275,000 | |||||||||||||||||||||||||||||
Net
loss
|
- | - | - | (333,146 | ) | (333,146 | ) | |||||||||||||||||||||||||||||
BALANCE,
DECEMBER 31, 2004
|
137,500 | 138 | 1,797,500 | 1,798 | - | - | 274,862 | (333,146 | ) | (56,348 | ) | |||||||||||||||||||||||||
Issuance
of preferred stock for contract termination
|
25,000 | 25 | - | - | - | - | 49,975 | - | 50,000 | |||||||||||||||||||||||||||
Issuance
of preferred stock
|
125,000 | 125 | - | - | - | - | 249,875 | - | 250,000 | |||||||||||||||||||||||||||
Issuance
of stock options to non-employees
|
- | - | - | - | - | - | 158,803 | - | 158,803 | |||||||||||||||||||||||||||
Net
loss
|
- | - | - | - | - | - | - | (687,576 | ) | (687,576 | ) | |||||||||||||||||||||||||
BALANCE,
DECEMBER 31, 2005
|
287,500 | 288 | 1,797,500 | 1,798 | - | - | 733,515 | (1,020,722 | ) | (285,121 | ) | |||||||||||||||||||||||||
Issuance
of common stock for consulting
|
- | - | 16,425 | 16 | - | - | 23,472 | - | 23,488 | |||||||||||||||||||||||||||
Conversion
of preferred stock to common stock
|
(287,500 | ) | (288 | ) | 287,500 | 288 | - | - | - | - | - | |||||||||||||||||||||||||
Issuance
of common stock to induce conversion of preferred stock
|
- | - | 22,905 | 23 | - | - | (23 | ) | - | - | ||||||||||||||||||||||||||
Issuance
of common stock to investor
|
- | - | 1,096,170 | 1,095 | - | - | 1,564,928 | - | 1,566,023 | |||||||||||||||||||||||||||
Issuance
of stock options to employees
|
- | - | - | - | - | - | 28,806 | - | 28,806 | |||||||||||||||||||||||||||
Issuance
of stock options to non-employees
|
- | - | - | - | - | - | 511,888 | - | 511,888 | |||||||||||||||||||||||||||
Net
loss
|
- | - | - | - | - | - | - | (1,999,214 | ) | (1,999,214 | ) | |||||||||||||||||||||||||
BALANCE,
DECEMBER 31, 2006
|
- | - | 3.220,500 | 3,220 | - | - | 2,862,586 | (3,019,936 | ) | (154,130 | ) | |||||||||||||||||||||||||
Issuance
of common stock
|
- | - | 627,058 | 628 | - | - | 1,249,372 | - | 1,250,000 | |||||||||||||||||||||||||||
Issuance
of stock options to employees
|
- | - | - | - | - | - | 19,239 | - | 19,239 | |||||||||||||||||||||||||||
Issuance
of stock options to non-employees
|
- | - | - | - | - | - | 429,391 | - | 429,391 | |||||||||||||||||||||||||||
Net
loss
|
- | - | - | - | - | - | - | (2,354,043 | ) | (2,354,043 | ) | |||||||||||||||||||||||||
BALANCE,
DECEMBER 31, 2007
|
- | - | 3,847,558 | 3,848 | - | - | 4,560,588 | (5,373,979 | ) | (809,543 | ) | |||||||||||||||||||||||||
Issuance
of stock options to employees
|
- | - | - | - | - | - | 274,299 | - | 274,299 | |||||||||||||||||||||||||||
Issuance
of stock options to non-employees
|
- | - | - | - | - | - | 216,779 | - | 216,779 | |||||||||||||||||||||||||||
Net
loss
|
- | - | - | - | - | - | - | (2,272,144 | ) | (2,272,144 | ) | |||||||||||||||||||||||||
BALANCE,
DECEMBER 31, 2008
|
- | - | 3,847,558 | 3,848 | - | - | 5,051,666 | (7,646,123 | ) | (2,590,609 | ) | |||||||||||||||||||||||||
Issuance
of common stock (Class B)
|
- | - | - | - | 2,691,788 | 2,692 | 670,255 | - | 672,947 | |||||||||||||||||||||||||||
Issuance
of stock options to employees
|
- | - | - | - | - | - | 157,933 | - | 157,933 | |||||||||||||||||||||||||||
Non-cash
fair value of stock options to non-employees
|
- | - | - | - | - | - | 54,064 | - | 54,064 | |||||||||||||||||||||||||||
Fair
value of stockholder debt, payables and advances settled in common stock
(A)
|
- | - | 1,554,305 | 1,554 | - | - | 387,023 | - | 388,577 | |||||||||||||||||||||||||||
Fair
value of common stock issued (A) to settle accounts
payable
|
- | - | 376,374 | 376 | - | - | 103,496 | - | 103,872 | |||||||||||||||||||||||||||
Fair
value of common stock options issued to settle accounts payable and
accrued expenses
|
- | - | - | - | - | - | 18,364 | - | 18,364 | |||||||||||||||||||||||||||
Net
income
|
- | - | - | - | - | - | - | 132,005 | 132,005 | |||||||||||||||||||||||||||
BALANCE,
DECEMBER 31, 2009
|
- | $ | - | 5,778,237 | $ | 5,778 | 2,691,788 | $ | 2,692 | $ | 6,442,801 | $ | (7,514,118 | ) | $ | (1,062,847 | ) |
The
accompanying notes are an integral part of these financial
statements
6
FLUOROPHARMA,
INC. (a development stage company)
NOTES
TO FINANCIAL STATEMENTS
1.
|
DESCRIPTION
OF BUSINESS
|
FluoroPharma,
Inc. is a privately-held molecular imaging company headquartered in Boston,
Massachusetts, engaged in the discovery, development and commercialization of
proprietary diagnostic imaging products. The Company’s focus is the development
of novel positron emission tomography (PET) imaging agents for the efficient
detection and assessment of acute and chronic forms of coronary artery disease
(CAD). When used in these notes, the terms “Company,” “we,” “our,”
“ours,” or “us” mean FluoroPharma, Inc., a Delaware corporation.
The
Company is a development stage company as defined in Financial Accounting
Standards Board (FASB) Accounting Standards Codification (ASC) 915 “Development
Stage Entities”. The Company is devoting substantially all of its present
efforts to research and development of commercially viable products that meet
the standards of and are approved by the Food and Drug Administration, raising
capital and attracting qualified advisors and personnel to further advance the
Company’s goals. The Company has not commenced its planned principal operations,
has not generated any revenues from operations and has no assurance of any
future revenues. All losses accumulated since incorporation on June 13, 2003
have been considered as part of the Company's development stage
activities.
The
Company is organized as a C corporation for income tax purposes. Accordingly the
Company pays federal and state income taxes on any profits and retains losses to
be offset against any future taxable profits. Dividends are paid at the
discretion of the Board of Directors; however, the Company has never declared a
dividend and has no intention of declaring a dividend in the foreseeable future.
The Company currently intends to retain any earnings for the operation and
expansion of the business. The Company’s continued need to retain any earnings
for operations and expansion is likely to limit the Company’s ability to pay
future cash dividends.
2.
|
MANAGEMENT
STATEMENT REGARDING GOING CONCERN
|
The
accompanying financial statements have been prepared assuming that the Company
will continue to operate as a going concern, including the realization of its
assets and settlement of its liabilities at their carrying values in the
ordinary course of business for the foreseeable future. However, substantial
doubt about the Company’s ability to continue as a going concern exists because
the Company has experienced significant operating losses, negative cash flows
from operations since inception and has not established any revenue sources. The
Company has sustained cumulative losses of $7,514,118 and $7,646,123 as of
December 31, 2009 and 2008, respectively. The accompanying financial statements
do not include any adjustments relating to the recoverability and classification
of assets and liabilities that might be necessary if the Company is unable to
continue as a going concern.
The Company has historically financed
its operations through issuances of equity and the proceeds of debt instruments.
In the past, the Company has also provided for its cash needs by issuing common
stock, options and warrants for certain operating costs, including consulting
and professional fees. We
continue to actively pursue various funding options, including equity offerings
and debt financings, to obtain additional funds to continue the development of
our products and bring them to commercial markets. The Company is currently
negotiating several potential transactions; however, there can be no assurance
that we will be successful in our efforts to raise additional
capital.
7
The
Company believes that the successful growth and operation of its business is
dependent upon its ability to do any or all of the following:
|
·
|
obtain
adequate sources of debt or equity financing to pay unfunded operating
expenses and fund long-term business operations;
and
|
|
·
|
manage
or control working capital requirements by controlling operating
expenses.
|
There can
be no assurance that the Company will be successful in achieving its long-term
plans as set forth above, or that such plans, if consummated, will enable the
Company to obtain profitable operations or continue in the long-term as a going
concern.
3.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
|
This
summary of significant accounting policies of FluoroPharma is presented to
assist in understanding the Company’s financial statements. The financial
statements and notes are representations of the Company’s management, which is
responsible for their integrity and objectivity. These accounting policies
conform to accounting principles generally accepted in the United States of
America (GAAP) and have been consistently applied in the preparation of the
financial statements.
The
Financial Accounting Standards Board (FASB) issued the FASB Accounting Standards
Codification (the Codification or ASC), which is an aggregation of previously
issued authoritative GAAP in one comprehensive set of guidance, effective for
reporting in the third quarter of 2009. In accordance with the Codification,
references to previously issued accounting standards have been replaced by ASC
references. Subsequent revisions to GAAP will be incorporated into the ASC
through Accounting Standards Updates (ASU).
Accounting for Share-Based
Payments
FluoroPharma
follows the provisions of ASC Topic 718, which establishes the accounting for
transactions in which an entity exchanges equity securities for services and
requires companies to expense the estimated fair value of these awards over the
requisite service period. FluoroPharma uses the Black-Scholes option pricing
model in determining fair value. Accordingly, compensation cost has been
recognized using the fair value method and expected term accrual requirements as
prescribed, which resulted in employee stock-based compensation expense for the
year ended December 31, 2009 and 2008 of $157,933 and $274,299,
respectively.
The
Company accounts for share-based payments granted to non-employees in accordance
with ASC Topic 505, “Equity Based Payments to Non-Employees.” The Company
determines the fair value of the stock-based payment as either the fair value of
the consideration received or the fair value of the equity instruments issued,
whichever is more reliably measurable. If the fair value of the
equity instruments issued is used, it is measured using the stock price and
other measurement assumptions as of the earlier of either (1) the date at which
a commitment for performance by the counterparty to earn the equity instruments
is reached, or (2) the date at which the counterparty’s performance is
complete.
8
The fair
value of each share based payment is estimated on the measurement date using the
Black-Scholes model with the following assumptions, which are determined at the
beginning of each year and utilized in all calculations for that
year:
2009
|
2008
|
|||||||
Risk-free
interest rate
|
3.24 | % | 5.35 | % | ||||
Expected
volatility
|
70 | % | 117 | % | ||||
Dividend
yield
|
0 | % | 0 | % |
Risk-Free Interest Rate. The
interest rate used is based on the yield of a U.S. Treasury security as of the
beginning of the year.
Expected Volatility. The
Company calculates the expected volatility based on historical volatility of its
former parent company.
Dividend Yield. The Company
has never paid cash dividends, and does not currently intend to pay cash
dividends, and thus has assumed a 0% dividend yield.
Expected Term. For options,
the Company uses the option term as the expected term. For warrants, the Company
uses the actual term of the warrant.
Pre-Vesting Forfeitures.
Estimates of pre-vesting option forfeitures are based on Company experience. The
Company will adjust its estimate of forfeitures over the requisite service
period based on the extent to which actual forfeitures differ, or are expected
to differ, from such estimates. Changes in estimated forfeitures will be
recognized through a cumulative catch-up adjustment in the period of change and
will also impact the amount of compensation expense to be recognized in future
periods.
Cash and Cash
Equivalents
The
Company considers all highly liquid investments with maturities of three months
or less from date of purchase to be cash equivalents. Cash equivalents consisted
of money market funds at December 31, 2009 and 2008.
Concentration of
Risks
Financial
instruments that potentially expose the Company to concentrations of credit risk
consist primarily of cash and cash equivalents. The Company primarily maintains
its cash balances with financial institutions in federally insured accounts. The
Company has not experienced any losses to date resulting from this
practice.
Earnings per
Share
The
Company computes net income (loss) per common share in accordance with ASC Topic
260. Net income (loss) per share is based upon the weighted average number of
outstanding common shares and the dilutive effect of common share equivalents,
such as options and warrants to purchase common stock, and convertible notes, if
applicable, that are outstanding each year. In 2009, weighted average common
stock includes both Class A and Class B common stock as these classes have the
same rights with the exception of voting (see Note 10).
9
As of
December 31, 2009, the Company had outstanding options exercisable for 2,983,000
shares of its common stock, warrants exercisable for 394,278 shares of its
common stock, and notes payable convertible into 201,000 shares of its common
stock. Of the above options, warrants, and convertible notes, 210,000 common
share equivalents were considered dilutive for the year ended December 31, 2009,
which did not result in a material difference between basic and diluted earnings
per share.
Basic and
diluted earnings per share were the same for the year ended December 31, 2008,
as including common stock equivalents in the calculation of diluted earnings per
share would have been antidilutive. As of December 31, 2008, the Company had
outstanding options exercisable for 1,738,000 shares of its common stock and
warrants exercisable for 110,000 shares of its common stock.
Fair Value of Financial
Instruments
The
Company's financial instruments primarily consist of cash and cash equivalents
and accounts payable. All instruments are accounted for on the historical cost
basis, which, due to the short maturity of these financial instruments,
approximates the fair value at the reporting dates of these financial
statements.
ASC Topic
820 establishes a fair value hierarchy that prioritizes the inputs to valuation
techniques used to measure fair value into three levels as follows:
Level 1:
Quoted prices for identical instruments in active markets accessible at the
measurement date.
Level 2:
Quoted prices for similar instruments in active markets; quoted prices for
identical or similar instruments in markets that are not active; and
model-derived valuations whose inputs are observable or whose significant value
drivers are observable.
Level 3:
Unobservable inputs for the instrument are only used when there is little, if
any, market activity for the instrument at the measurement date. Prices or
valuation techniques that require inputs that are both significant to the fair
value measurement and unobservable (i.e. supported by little or no market
activity).
Impairments
The
Company assesses the impairment of long-lived assets, including other intangible
assets, whenever events or changes in circumstances indicate that their carrying
value may not be recoverable in accordance with ASC Topic 360-10-35, “Impairment
or Disposal of Long-Lived Assets.” The determination of related estimated useful
lives and whether or not these assets are impaired involves significant
judgments, related primarily to the future profitability and/or future value of
the assets. The Company holds investments in companies having operations or
technologies in areas which are within or adjacent to our strategic focus when
acquired, all of which are privately held and whose values are difficult to
determine. The Company records an investment impairment charge if it believes an
investment has experienced a decline in value that is other than
temporary.
Management
has determined that no impairments were required during the years ended December
31, 2009 and 2008.
10
Income
Taxes
The
Company accounts for income taxes and the related accounts under the liability
method. Deferred tax assets and liabilities are determined based on the
differences between the financial statement carrying amounts and the income tax
bases of assets and liabilities. A valuation allowance is applied against any
net deferred tax asset if, based on available evidence, it is more likely than
not that some or all of the deferred tax assets will not be
realized.
There is
no unrecognized tax benefit included in the consolidated balance sheet that
would, if recognized, affect the effective tax rate.
Our
policy is to recognize interest and/or penalties related to income tax matters
in income tax expense. We had no accrual for interest or penalties on our
balance sheets at December 31, 2009 or 2008, and have not recognized
interest and/or penalties in the statement of operations for the years ended
December 31, 2009 or 2008. See Note 9, Income Taxes.
Intangible
Assets
The
Company’s intangible assets consist of technology licenses and website
development costs, and are carried at the legal cost to obtain them. Intangible
assets are amortized using the straight line method over the estimated useful
life. Useful lives are as follows: technology licenses, five to 15 years;
website development costs, three years. The estimated aggregate amortization
expense for 2010 through 2014 is $15,643; $14,736; $10,712; $10,712; and
$4,258.
Property and
Equipment
Property
and equipment are stated at cost. Depreciation is computed using the
straight-line method over the estimated useful lives of the assets. The
Company’s property and equipment at December 31, 2009 and 2008 consisted of
computer and office equipment and machinery and equipment with estimated useful
lives of three to five years. Machinery and equipment with a book value of
$189,224 was disposed of, resulting in the settlement of $133,314 in accounts
payable and a loss on disposition of $55,911.
Recent Accounting
Pronouncements
Management
does not believe that any recently issued, but not yet effective, accounting
standards if currently adopted would have a material effect on the accompanying
financial statements.
Research and Development
Costs
Research
and development costs are expensed as incurred. The cost of intellectual
property purchased from others that is immediately marketable or that has an
alternative future use is capitalized and amortized as intangible assets.
Capitalized costs are amortized using the straight-line method over the
estimated economic life of the related asset.
The
accompanying financial statements are prepared in conformity with accounting
principles generally accepted in the United States of America, and include
certain estimates and assumptions which affect the reported amounts of assets
and liabilities at the date of the financial statements, and the reported
amounts of revenues and expenses during the reporting period. Accordingly,
actual results may differ from those estimates.
11
4.
|
OTHER
BALANCE SHEET INFORMATION
|
Components
of selected captions in the accompanying balance sheets as of December 31, 2009
and 2008 consist of:
2009
|
2008
|
|||||||
Prepaid
expenses:
|
||||||||
Prepaid
consulting
|
$ | - | $ | 92,649 | ||||
Prepaid
insurance
|
9,550 | 11,619 | ||||||
Other
|
241 | 238 | ||||||
Prepaid
expenses
|
$ | 9,791 | $ | 104,506 | ||||
Property
and equipment:
|
||||||||
Computers
and office equipment
|
$ | 15,934 | $ | 14,683 | ||||
Machinery
and equipment
|
120,768 | 309,992 | ||||||
Less:
accumulated depreciation
|
(77,708 | ) | (50,270 | ) | ||||
Property
and equipment, net
|
$ | 58,994 | $ | 274,405 | ||||
Accrued
expenses:
|
||||||||
Payroll
and related
|
$ | 354,750 | $ | 174,750 | ||||
Professional
fees
|
45,500 | 32,800 | ||||||
Accrued
interest
|
250 | - | ||||||
Other
|
18,600 | 7,500 | ||||||
Accrued
expenses
|
$ | 419,100 | $ | 215,050 |
5.
|
INTANGIBLE
ASSETS
|
Intangible
assets as of December 31, 2009 and 2008 consisted of the following:
2009
|
2008
|
|||||||
Technology
license
|
97,112 | 128,714 | ||||||
Website
development
|
10,394 | 10,394 | ||||||
Less:
accumulated amortization
|
(35,973 | ) | (48,950 | ) | ||||
Intangibles,
net
|
$ | 71,533 | $ | 90,158 |
In the
second quarter of 2009, FluoroPharma renegotiated three of its technology
licenses with Massachusetts General Hospital into one exclusive technology
license. The net book value of the renegotiated licenses, $43,398, was used as
the original cost of the new license and the remaining life of approximately 5
years. See Note 8 for commitments and contingencies associated with these
licenses.
6.
|
LIABILITY
SETTLEMENTS
|
On May 5,
2009, QuantRx and FluoroPharma reorganized their relationship by terminating
their investment agreement and related agreements. The termination of these
agreements, which were originally executed on March 10, 2006, allowed
FluoroPharma to close an equity financing with third party
investors. In conjunction with the termination of these agreements
and the additional investment in FluoroPharma, QuantRx agreed to convert all
outstanding receivables from FluoroPharma, consisting of previously issued notes
and related accrued interest and advances in the aggregate amount of $1,568,567
($1,536,767 of which was outstanding at December 31, 2008), into 1,148,275
shares of Class A common stock (fair value of $287,069). In addition,
warrants to purchase 284,278 shares of common stock were granted to QuantRx. The
warrants have an exercise price of $1.50 and a term of ten years. In connection
with this settlement, FluoroPharma recognized a gain on debt settlement of
$1,281,498.
12
In
connection with these agreements, FluoroPharma settled $112,000 in outstanding
advances from an executive and shareholder of the Company for 406,030 shares of
Class A common stock (fair value of $101,508). In connection with this
settlement, FluoroPharma recognized a gain on debt settlement of
$10,493.
In the
second quarter of 2009, FluoroPharma settled $84,315 in outstanding payables
with a company which is a shareholder of FluoroPharma and whose managing partner
is related to an executive of FluoroPharma with the issuance of 337,260 shares
of FluroroPharma Class A common stock (fair value of $84,315).
In the
second quarter of 2009, FluoroPharma settled $36,500 in outstanding payables and
accruals with a member of the Board of Directors of the Company for $10,000 and
options to purchase 90,000 shares of FluroroPharma Class A common stock (fair
value of $17,397). In connection with this settlement, FluoroPharma recognized a
gain on debt settlement of $9,103.
In the
second quarter of 2009, FluoroPharma settled a $50,000 outstanding payable with
a former executive of the Company for $20,000. FluoroPharma recognized a gain on
debt settlement of $30,000.
In the
second quarter of 2009, FluoroPharma settled outstanding accounts payables
aggregating $57,557 with the payment of $10,000, the issuance of 39,114 shares
of Class A common stock (fair value of $19,557) and the issuance of options to
purchase 5,000 shares of FluoroPharma Class A common stock (fair value of $967).
In connection with these settlements, FluoroPharma recognized an aggregate gain
on debt settlement of $27,033.
The
aggregate gain on these liability settlements was $1,358,127 or $0.20 per share
(basic and diluted).
7.
|
SHORT-TERM
CONVERTIBLE NOTES PAYABLE
|
In
November 2009, the Company issued a 6% convertible promissory note for $50,000
to an investor. In the event FluoroPharma does not complete a qualified
financing and the holder does not voluntarily convert, FluoroPharma is required
to repay the outstanding principal balance and accrued and unpaid interest on
December 31, 2010. Interest on the outstanding principal amount of the note is
payable at maturity. Interest expense for 2009 was $250. The Company used the
net proceeds for product development, working capital and general corporate
purposes.
The
conversion option embedded in the note described above was not considered a
derivative instrument and was not required to be bifurcated since it is indexed
to FluoroPharma’s stock and is classified as stockholders’ equity. Equity
classification of the embedded conversion option is met. Management also
concluded that while the embedded conversion option is not required to be
bifurcated, and the note could contain a beneficial conversion feature, it does
not as the share prices on the date of issuance equaled the effective conversion
price of the embedded conversion option.
13
8.
|
COMMITMENTS
AND CONTINGENCIES
|
License
Agreements
In the
second quarter of 2009, FluoroPharma renegotiated three of its technology
licenses with Massachusetts General Hospital (MGH) into one exclusive technology
license. The renegotiated license stipulates FluoroPharma meet certain
obligations, including, but not limited to, raising an aggregate $2 million in
capital by the second quarter of 2010; and meeting certain development
milestones relating to clinical trials and filings with the FDA. MGH has the
right to cancel or make non-exclusive certain licenses on certain patents should
the Company fail to meet stipulated obligations and milestones. Additionally,
upon commercialization, FluoroPharma is required to make specified milestone
payments and royalties on commercial sales.
All of
the Company’s other license agreements stipulate certain annual license fees and
development milestone payments in addition to royalty payments upon
commercialization.
Executive Employment
Contracts
The
Company has an employment contract with a key Company executive that provides
for the continuation of salary and the grant of certain options to the executive
if terminated for reasons other than cause, as defined in that agreement. The
contract also provides for a $1 million bonus should FluoroPharma execute
transactions as specified in the contract, including the sale of substantially
all of the Company’s assets or stock or a merger transaction, any of which
resulting in compensation to FluoroPharma’s stockholders aggregating in excess
of $100 million for such transaction. At December 31, 2009, the future
employment contract commitment for such key executive’s salary continuation
based on these termination clauses was approximately $950,000.
Legal
Contingencies
We may
occasionally become subject to legal proceedings and claims that arise in the
ordinary course of our business. It is impossible for us to predict
with any certainty the outcome of any disputes that may arise, and we cannot
predict whether any liability arising from claims and litigation will be
material in relation to our financial position or results of
operations.
9.
|
INCOME
TAXES
|
We are
subject to taxation in the U.S. and the Commonwealth of Massachusetts. With few
exceptions, the Company is no longer subject to U.S. federal, state and local
income tax examinations by tax authorities for years before 2004.
At
December 31, 2009 and 2008, the Company had gross deferred tax assets calculated
at an expected blended rate of 38% of approximately $3,444,174 and $3,002,334,
respectively, principally arising from net operating loss carryforwards for
income tax purposes. As management of the Company cannot determine that it is
more likely than not that the Company will realize the benefit of the deferred
tax asset, a valuation allowance of $3,432,457 and $2,986,083 has been
established at December 31, 2009 and 2008, respectively.
Additionally,
the future utilization of our net operating loss and R&D credit
carryforwards to offset future taxable income may be subject to an annual
limitation, pursuant to IRC Sections 382 and 383, as a result of ownership
changes that may have occurred previously or that could occur in the
future.
14
The
significant components of the Company’s net deferred tax assets (liabilities) at
December 31, 2009 and 2008 are as follows:
2009
|
2008
|
|||||||
Gross
deferred tax assets:
|
||||||||
Net
operating loss carryforwards
|
$ | 2,381,586 | $ | 2,200,520 | ||||
Stock
based expenses
|
710,435 | 587,691 | ||||||
Tax
credit carryforwards
|
222,134 | 213,477 | ||||||
All
others
|
130,019 | 646 | ||||||
3,444,174 | 3,002,334 | |||||||
Gross
deferred tax liabilities:
|
||||||||
Difference
between book and tax bases of tangible and intangible
assets
|
(11,717 | ) | (16,251 | ) | ||||
Deferred
tax asset valuation allowance
|
(3,432,457 | ) | (2,986,083 | ) | ||||
Net
deferred tax asset (liability)
|
$ | - | $ | - |
At
December 31, 2009, the Company has net operating loss carryforwards of
approximately $6,267,332, which expire in the years 2023 through 2029. The net
change in the allowance account was an increase of $446,374 for the year ended
December 31, 2009. For the year ended December 31, 2009, the
Company’s tax net operating loss was approximately $476,000 due to differences
between financial and tax accounting.
The
accounting for the tax benefits of acquired deductible temporary differences and
NOL carryforwards, which are not recognized at the acquisition date because a
valuation allowance is established and which are recognized subsequent to the
acquisition, will be applied first to reduce to zero any goodwill and other
non-current intangible assets related to the acquisition. Any
remaining benefits would be recognized as a reduction of income tax
expense.
10.
|
CAPITAL
STOCK
|
Preferred
Stock
The
Company has authorized 1,500,000 shares of preferred stock, $0.001 par value. At
December 31, 2009 and 2008, no shares of preferred stock were issued and
outstanding.
Common
Stock
The
Company has authorized 18,500,000 shares of its common stock, $0.001 par value,
of which 15,000,000 shares are designated Class A, and 3,500,000 are designated
Class B. The classes have identical rights with the exception of voting rights.
Class A shares receive one vote per share. Class B shares receive five votes per
share until February 28, 2011, at which time they receive one vote per share. At
December 31, 2009 and 2008, the Company had issued and outstanding 5,778,237 and
3,847,558 shares of its Class A common stock and 2,691,788 and 0 shares of its
Class B common stock, respectively.
15
Class
A Common Stock
All
issuances of Class A common stock in 2009 were related to certain liability
settlements. See Note 6. There were no issuances of Class A common stock in
2008.
Class
B Common Stock
In May
and June 2009, subsequent to the termination of certain investment agreements
with QuantRx (see Note 6), FluoroPharma issued 2,491,788 shares of Class B
common stock at $0.25 per share to accredited investors for aggregate proceeds
of $622,947.
In
October 2009, FluoroPharma issued 200,000 shares of Class B common stock at
$0.25 per share. As of December 31, 2009, $50,000 was receivable for this stock
and was received in January 2010.
There
were no issuances of Class B common stock in 2008.
11.
|
STOCK
PURCHASE WARRANTS
|
Common Stock
Warrants
All
issuances of common stock warrants in 2009 were related to certain liability
settlements. See Note 6.
The
following is a summary of all common stock warrant activity during the two years
ended December 31, 2009:
Number of Shares
Under Warrants
|
Exercise Price Per
Share
|
Weighted Average
Exercise Price
|
||||||||||
Warrants
issued and exercisable at December 31, 2007
|
110,000 | $ | 1.43 - $3.00 | $ | 2.18 | |||||||
Warrants
granted, expired, exercised
|
- | - | - | |||||||||
Warrants
issued and exercisable at December 31, 2008
|
110,000 | $ | 1.43 - $3.00 | $ | 2.18 | |||||||
Warrants
granted
|
284,278 | $ | 1.50 | $ | 1.50 | |||||||
Warrants
issued and exercisable at December 31, 2009
|
394,278 | $ | 1.43 - $3.00 | $ | 1.69 |
The
following represents additional information related to common stock warrants
outstanding and exercisable at December 31, 2009:
Exercise
Price
|
Number of Shares Under
Warrants
|
Weighted Average Remaining
Contract Life in Years
|
Weighted Average
Exercise Price
|
|||||||||||
$ | 1.43 | 57,500 |
3.19
|
$ | 1.43 | |||||||||
$ | 1.50 | 284,278 |
9.13
|
$ | 1.50 | |||||||||
$ | 3.00 | 52,500 |
2.04
|
$ | 3.00 | |||||||||
394,278 |
7.32
|
$ | 1.69 |
The
Company used the Black-Scholes option price calculation to value the warrants
granted in 2009 and 2008 using the following assumptions: risk-free rate of
3.24% and 5.35%; volatility of 0.70 and 1.17; actual term and exercise price of
warrants granted. See Note 3, Summary of Significant Accounting Policies,
“Accounting for Share Based Payments.”
16
12.
|
COMMON
STOCK OPTIONS
|
On
January 1, 2004, the Company adopted its Equity Incentive Plan (“the Plan”)
under which 3,000,000 shares of common stock are reserved for issuance under
options or other equity interests as set forth in the Plan. Under the Plan,
options are available for issuance to employees, officers, directors,
consultants and advisors. The Plan provides that the Board of Directors will
determine the exercise price and vesting terms of each option on the date of
grant. Options granted under the Plan generally expire ten years from the date
of grant.
In 2009,
the Company granted to employees, board members and consultants options to
purchase 1,590,000 shares of Class A common stock at an exercise price of $0.25
(aggregate fair value of $307,347, of which $131,446 was expensed in 2009).
These options have a ten year term and certain options include contingent
vesting provisions, and will be expensed when they vest. Additionally, options
to purchase 95,000 shares of Class A common stock with a fair value of $18,364
were issued in connection with certain liability settlements (see Note
6).
In 2008,
the Company granted to employees, board members and consultants options to
purchase 655,000 shares of Class A common stock at exercise prices ranging from
$1.43 to $1.99 with an aggregate fair value of $1,249,750. These options have a
ten year term and certain options have contingent vesting provisions and will be
expensed when they vest. In the years ending December 31, 2009 and 2008,
$137,552 and $335,779 were expensed related to these 2008 grants.
The
following is a summary of all common stock option activity during the two years
ended December 31, 2009:
Shares Under Options
Outstanding
|
Weighted Average Exercise
Price
|
|||||||
Outstanding
at December 31, 2007
|
1,083,000 | $ | 0.94 | |||||
Options
granted
|
655,000 | 1.85 | ||||||
Options
forfeited or exercised
|
- | - | ||||||
Outstanding
at December 31, 2008
|
1,738,000 | 1.28 | ||||||
Options
granted
|
1,685,000 | 0.25 | ||||||
Options
forfeited
|
(440,000 | ) | 1.95 | |||||
Options
exercised
|
- | - | ||||||
Outstanding
at December 31, 2009
|
2,983,000 | $ | 0.61 |
Options Exercisable
|
Weighted Average Exercise
Price Per Share
|
|||||||
Exercisable
at December 31, 2008
|
1,260,500 | $ | 1.06 | |||||
Exercisable
at December 31, 2009
|
1,968,000 | $ | 0.80 |
The
following represents additional information related to common stock options
outstanding and exercisable at December 31, 2009:
Outstanding
|
Exercisable
|
|||||||||||||||||||||
Exercise
Price
|
Number of
Shares
|
Weighted Average
Remaining
Contract Life in
Years
|
Weighted
Average
Exercise Price
|
Number of
Shares
|
Weighted
Average
Exercise Price
|
|||||||||||||||||
$ | 0.20 | 210,000 |
2.32
|
$ | 0.20 | 210,000 | $ | 0.20 | ||||||||||||||
$ | 0.25 | 1,705,000 |
9.40
|
$ | 0.25 | 690,000 | $ | 0.25 | ||||||||||||||
$ | 0.75 | 260,000 |
4.28
|
$ | 0.75 | 260,000 | $ | 0.75 | ||||||||||||||
$ | 1.00 | 212,000 |
3.00
|
$ | 1.00 | 212,000 | $ | 1.00 | ||||||||||||||
$ | 1.43 | 376,000 |
7.07
|
$ | 1.43 | 376,000 | $ | 1.43 | ||||||||||||||
$ | 1.75 | 110,000 |
8.06
|
$ | 1.75 | 110,000 | $ | 1.75 | ||||||||||||||
$ | 1.99 | 110,000 |
8.92
|
$ | 1.99 | 110,000 | $ | 1.99 | ||||||||||||||
2,983,000 |
7.64
|
$ | 0.61 | 1,968,000 | $ | 0.80 |
17
The
weighted average remaining contractual term for fully vested share options
(exercisable, above) and options expected to vest (outstanding, above) is 6.70
and 9.47 years. The aggregate intrinsic value of all of the Company’s
options is $10,500.
The
weighted-average grant-date fair value of options granted during 2009 and 2008
was $0.19 and $1.89, respectively. There were no options exercised during 2009
and 2008; therefore there was no intrinsic value of options exercised and no
related tax benefits were realized. The total fair value of shares vested during
2009 and 2008 was $200,686 and $438,989, respectively.
A summary
of the status of the Company’s nonvested stock options as of December 31, 2009
and changes during the year ended December 31, 2009 is presented
below:
Nonvested Stock Options
|
Shares
|
Weighted Average
Grant Date Fair Value
|
||||||
Nonvested
at December 31, 2008
|
477,500 | $ | 1.89 | |||||
Options
granted
|
1,685,000 | 0.19 | ||||||
Options
vested
|
(707,500 | ) | 0.28 | |||||
Options
forfeited
|
(440,000 | ) | 1.89 | |||||
Nonvested
at December 31, 2009
|
1,015,000 | $ | 0.19 |
As of
December 31, 2009, there was approximately $176,000 of unrecognized compensation
cost related to nonvested options. Weighted average period of nonvested stock
options was 9.5 years as of December 31, 2009.
The
Company used the Black-Scholes option price calculation to value the options
granted in 2008 and 2007 using the following assumptions: risk-free rate of
3.24% and 5.35%; volatility of 0.70 and 1.17; actual term and exercise price of
options granted. See Note 3, Summary of Significant Accounting Policies,
“Accounting for Share Based Payments.”
13.
|
RELATED
PARTY TRANSACTIONS
|
On May 5,
2009, QuantRx and FluoroPharma reorganized their relationship by terminating
their investment agreement and related agreements. See Note 6.
An
executive officer, who is also a beneficial owner of approximately 19% of
outstanding shares, was due $20,000 for licensing fees related to patent license
agreements (included in accounts payable) and $313,500 for accrued payroll as of
December 31, 2009. At December 31, 2008, $40,000 was due for
licensing fees related to patent license agreements, $120,191 for advances to
fund general operating expenses and $142,500 for accrued payroll, of which
$160,191 was included in accounts payable and $142,500 was included in accrued
expenses. In May 2009, FluoroPharma settled certain liabilities, see
Note 6.
In the
second quarter of 2009, FluoroPharma settled $84,315 in outstanding payables
with a company which is a shareholder of FluoroPharma and whose managing partner
is related to an executive of FluoroPharma with the issuance of 337,260 shares
of FluroroPharma Class A common stock (fair value of $84,315). In the years
ended December 31, 2009 and 2008, FluoroPharma rented space on a month-to-month
basis and reimbursed the company for certain administrative costs,
expensing $66,632 and $48,636, respectively. At December 31, 2009,
$22,880 was included in accounts payable related to this
arrangement.
18
A member
of the Company’s board of directors served as a member of the Company’s
strategic advisory board during 2009 and 2008. Fees and expenses related to
these agreements during the years ended December 31, 2009 and 2008, were $9,282
and $24,000, respectively. In the second quarter of 2009, FluoroPharma settled
certain liabilities, see Note 6.
14.
|
SUBSEQUENT
EVENTS
|
In
the first quarter of 2010, the Company issued a 6% convertible promissory note
for $100,000 to an investor. In the event FluoroPharma does not complete a
qualified financing and the holder does not voluntarily convert, FluoroPharma is
required to repay the outstanding principal balance and accrued and unpaid
interest on December 31, 2010. The terms of the note are substantially the same
as the note described in Note 7. The Company used the net proceeds for product
development, working capital and general corporate purposes.
The
Company evaluated subsequent events that occurred from January 1, 2010 through
March 30, 2010, the date the Company’s financial statements were issued. The
evaluation resulted in no other impact to the financial
statements.
19