Attached files
file | filename |
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EX-10.1 - Pathfinder Cell Therapy, Inc. | v200897_ex10-1.htm |
EX-31.1 - Pathfinder Cell Therapy, Inc. | v200897_ex31-1.htm |
EX-32.1 - Pathfinder Cell Therapy, Inc. | v200897_ex32-1.htm |
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
10-Q
(Mark
One)
þ QUARTERLY REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the quarterly period ended September 30, 2010
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: 0-20580
SYNTHEMED,
INC.
(Exact name
of registrant as specified in its charter)
Delaware
|
14-1745197
|
|
(State
or other jurisdiction of
|
(I.R.S.
Employer
|
|
incorporation
or organization)
|
Identification
No.)
|
200
Middlesex Essex Turnpike, Suite 210
|
08830
|
Iselin,
New Jersey
|
(Zip
Code)
|
(Address
of principal executive offices)
|
(732)
404-1117
(Issuer’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 Exchange Act of 1934 during the
preceding 12 months (or for such shorter period 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 has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding
12 months (or for such shorter period that the registrant was required to submit
and post such files).
Yes ¨ 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.
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
Indicate
the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date.
Common
Stock, $.001 Par Value – 110,055,964 shares outstanding at September 30,
2010
SYNTHEMED,
INC.
INDEX
Page
|
||||
Part
I -
|
FINANCIAL
INFORMATION
|
|||
Item
1.
|
Financial
Statements
|
|||
Condensed
Statements of Operations (unaudited) for the three-month and nine-month
periods ended September 30, 2009 and 2010
|
3
|
|||
Condensed
Balance Sheets as of December 31, 2009 and September 30, 2010
(unaudited)
|
4
|
|||
Condensed
Statements of Cash Flows (unaudited) for the nine-month periods ended
September 30, 2009 and 2010
|
5
|
|||
Notes
to Condensed Financial Statements (unaudited)
|
6
|
|||
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
12
|
||
Item
4.
|
Controls
and Procedures
|
16
|
||
Part
II -
|
OTHER
INFORMATION
|
|||
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
17
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||
Item
6.
|
Exhibits
|
17
|
||
Signature
|
17
|
2
PART
I - FINANCIAL INFORMATION
ITEM
1. FINANCIAL STATEMENTS
SYNTHEMED,
INC.
CONDENSED
STATEMENTS OF OPERATIONS
(unaudited)
(In
thousands, except per share data)
|
||||||||||||||||
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2009
|
2010
|
2009
|
2010
|
|||||||||||||
Revenue
|
||||||||||||||||
Product
sales
|
$ | 92 | $ | 55 | $ | 252 | $ | 320 | ||||||||
Revenue
|
92 | 55 | 252 | 320 | ||||||||||||
Cost
of goods sold
|
59 | 10 | 120 | 68 | ||||||||||||
Gross
profit
|
33 | 45 | 132 | 252 | ||||||||||||
Operating
expenses:
|
||||||||||||||||
Research
and development
|
491 | 189 | 1,158 | 673 | ||||||||||||
General
and administrative
|
300 | 328 | 1,133 | 1,080 | ||||||||||||
Sales
and marketing
|
316 | 125 | 1,097 | 518 | ||||||||||||
Operating
expenses
|
1,107 | 642 | 3,388 | 2,271 | ||||||||||||
(Loss)
from operations
|
(1,074 | ) | (597 | ) | (3,256 | ) | (2,019 | ) | ||||||||
Other
income/(expense):
|
||||||||||||||||
Interest
income
|
1 | - | 20 | 2 | ||||||||||||
Interest
expense
|
(1 | ) | (2 | ) | (2 | ) | (4 | ) | ||||||||
Other
income/(expense)
|
- | (2 | ) | 18 | (2 | ) | ||||||||||
Loss
before income tax benefit
|
(1,074 | ) | (599 | ) | (3,238 | ) | (2,021 | ) | ||||||||
Income
tax benefit
|
- | - | - | 433 | ||||||||||||
Net
loss
|
$ | (1,074 | ) | $ | (599 | ) | $ | (3,238 | ) | $ | (1,588 | ) | ||||
Net
loss per common share-basic and diluted
|
$ | (0.01 | ) | $ | (0.01 | ) | $ | (0.03 | ) | $ | (0.01 | ) | ||||
Weighted
average shares outstanding
|
99,802 | 109,438 | 99,479 | 109,230 |
See Notes
to Condensed Financial Statements
3
CONDENSED
BALANCE SHEETS
(In
thousands, except per share data)
|
||||||||
December
31,
|
September
30,
|
|||||||
2009
|
2010
|
|||||||
(unaudited)
|
||||||||
ASSETS
|
|
|||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 963 | $ | - | ||||
Accounts
receivable, net of allowance for doubtful accounts of $29 and $5,
respectively
|
49 | 24 | ||||||
Inventory,
net
|
126 | 68 | ||||||
Prepaid
expenses and deposits
|
57 | 88 | ||||||
Total
current assets
|
1,195 | 180 | ||||||
Machinery,
equipment and software, less accumulated depreciation
|
26 | 5 | ||||||
TOTAL
|
$ | 1,221 | $ | 185 | ||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$ | 64 | $ | 100 | ||||
Accrued
expenses
|
308 | 466 | ||||||
Insurance
note payable
|
7 | 44 | ||||||
Note
payable - Pathfinder, LLC
|
- | 56 | ||||||
Total
current liabilities
|
379 | 666 | ||||||
Commitments
and other contingencies (Note Q)
|
||||||||
Stockholders'
equity:
|
||||||||
Preferred
stock, $.01 par value; shares authorized
- 5,000;
|
||||||||
issued
and outstanding - none
|
||||||||
Common
stock, $.001 par value; shares authorized - 150,000
|
||||||||
issued
and outstanding - 109,041 and 110,056
|
109 | 110 | ||||||
Additional
paid-in capital
|
62,008 | 62,272 | ||||||
Accumulated
deficit
|
(61,275 | ) | (62,863 | ) | ||||
Total
stockholders' equity (capital deficit)
|
842 | (481 | ) | |||||
TOTAL
|
$ | 1,221 | $ | 185 |
See Notes
to Condensed Financial Statements
4
CONDENSED
STATEMENTS OF CASH FLOWS
(unaudited)
(In
thousands, except for per share data)
|
||||||||
Nine
Months Ended
|
||||||||
September
30,
|
||||||||
2009
|
2010
|
|||||||
Cash
flows from operating activities:
|
||||||||
Net
loss
|
$ | (3,238 | ) | $ | (1,588 | ) | ||
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||
Depreciation
|
42 | 9 | ||||||
Stock
based compensation
|
311 | 199 | ||||||
Shares
issued for director services and employee bonuses
|
75 | 66 | ||||||
Bad
debt expense
|
15 | 5 | ||||||
Loss
on disposal of furniture and equipment
|
- | 7 | ||||||
Changes
in operating assets and liabilities:
|
||||||||
(Increase)
decrease in accounts receivable
|
(7 | ) | 20 | |||||
Decrease
in inventory
|
36 | 58 | ||||||
Decrease
in prepaid expenses
|
90 | 93 | ||||||
(Decrease)
increase in accounts payable
|
(107 | ) | 36 | |||||
(Decrease)
increase in accrued expenses
|
(17 | ) | 158 | |||||
Net
cash used in operating activities
|
(2,800 | ) | (937 | ) | ||||
Cash
flows from investing activities:
|
||||||||
Sale
of furniture and equipment
|
- | 5 | ||||||
Net
cash provided by investing activities
|
- | 5 | ||||||
Cash
flows from financing activities:
|
||||||||
Net
proceeds from the issuance of common stock
|
903 | - | ||||||
Payments
of insurance note payable
|
(97 | ) | (87 | ) | ||||
Proceeds
from note payable - Pathfinder, LLC
|
- | 56 | ||||||
Proceeds
from exercise of stock options and warrants
|
10 | - | ||||||
Net
cash provided by (used in) financing activities
|
816 | (31 | ) | |||||
Net
(decrease) in cash and cash equivalents
|
(1,984 | ) | (963 | ) | ||||
Cash
and cash equivalents at beginning of period
|
2,944 | 963 | ||||||
Cash
and cash equivalents at end of period
|
$ | 960 | $ | - | ||||
Supplementary
disclosure of non-cash operating activities:
|
||||||||
Financing
of insurance premiums through notes payable
|
$ | 134 | $ | 124 |
See Notes
to Condensed Financial Statements
5
SYNTHEMED,
INC.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
(unaudited)
A)
|
Basis of Presentation
and Substantial Doubt on
Going Concern
|
The
accompanying condensed financial statements of SyntheMed, Inc. (the “Company”)
do not include all of the information and footnote disclosures normally included
in financial statements prepared in accordance with U.S. generally accepted
accounting principles; but, in the opinion of management, contain all
adjustments (which consist of only normal recurring adjustments) necessary for a
fair presentation of such financial information. Results of
operations and cash flows for interim periods are not necessarily indicative of
those to be achieved for full fiscal years. These condensed financial statements
have been presented on a going concern basis and do not include any adjustments
that might be necessary if the Company is unable to continue as a going
concern.
As of
September 30, 2010, the Company has no cash and does not anticipate having
sufficient revenue from operations to fund planned
operations. Insufficient funds have required the Company to delay,
scale back or eliminate some of its operations including research and
development programs and certain commercialization activities and to reduce the
number of sales personnel. In September 2010, the Company entered
into a credit agreement (the “Credit Agreement”) with Pathfinder, LLC, a cell
therapy company (“Pathfinder”), pursuant to which Pathfinder agreed to lend us
funds in amounts requested by us and approved by Pathfinder, subject to certain
minimum commitments. Contemporaneous with execution of the Credit
Agreement, the Company entered into a non-binding letter of intent relating to a
proposed business combination with Pathfinder. See (See Notes G, Q
and R of Notes to Condensed Financial Statements). No assurance can be given
that additional financing through the Credit Agreement or otherwise will be
available. In the absence of additional cash infusion, the Company
will be unable to continue as a going concern. If the financing from
Pathfinder is not made available, the Company would not be able to pay its
liabilities, may lose the rights to the intellectual property under the Yissum
agreement and may have to liquidate.
These
condensed financial statements do not include any adjustments relating to the
recoverability and classification of the carrying amount of recorded assets and
liabilities that might be necessary if the Company is unable to continue as a
going concern. These condensed financial statements should be read in
conjunction with the Company’s audited financial statements for the year ended
December 31, 2009, included in our Annual Report on Form 10-K filed with the
Securities and Exchange Commission. The report of our independent registered
public accounting firm contained in our 2009 Annual Report on Form 10-K also
contains an explanatory paragraph referring to an uncertainty concerning our
ability to continue as a going concern. Certain amounts in the prior year
financial statements have been reclassified to conform to the current year
presentation.
B)
|
Cash
and Cash Equivalents
|
The
Company considers all highly liquid investments purchased with a maturity of
three months or less to be cash equivalents. The Company deposits cash and cash
equivalents with high credit quality financial institutions and believe any
amounts in excess of insurance limitations to be at minimal risk. Cash and cash
equivalents held in these accounts are insured by the Federal Deposit Insurance
Corporation up to a maximum of $250,000 through December 31, 2013, and $100,000
thereafter.
C)
|
Accounts
Receivable
|
Accounts
receivable are stated at estimated net realizable value. Management evaluates
the need for an allowance for doubtful accounts based on a combination of
historical experience, aging analysis and information on specific accounts. In
cases where management is aware of circumstances that may impair a specific
customer’s ability to meet its financial obligations, management records a
specific allowance against amounts due and reduces the net recognized receivable
to the amount that we believe will be collected. For all other customers, the
Company maintains a reserve that considers the total receivables outstanding,
historical collection rates and economic trends. Account balances are written
off when collection efforts have been exhausted and the potential for recovery
is considered remote. At December 31, 2009 and September 30, 2010, the allowance
for doubtful accounts was $29,000 and $5,000, respectively.
6
D)
|
Inventory
|
Inventory
is stated at the lower of cost or market, as determined by the first-in,
first-out method. The Company maintains an allowance for potentially slow moving
and obsolete inventories. Management reviews on-hand inventory for potential
slow moving and obsolete amounts and estimates the level of inventory reserve
accordingly. The Company’s allowance for slow moving and obsolete inventories
includes an allowance for on-hand finished goods inventory which is within six
months of the expiration date.
December 31,
|
September
30,
|
|||||||
2009
|
2010
|
|||||||
Raw
materials
|
$ | 79,000 | $ | 59,000 | ||||
Finished
goods
|
53,000 | 14,000 | ||||||
132,000 | 73,000 | |||||||
Slow
moving and obsolete inventories
|
(6,000 | ) | (5,000 | ) | ||||
$ | 126,000 | $ | 68,000 |
The
production of the Company’s inventory is outsourced to third party facilities
located in Ohio, Minnesota and Prince Edward Island, Canada.
E)
|
Stock
Based Compensation Plans
|
At
September 30, 2010, the Company has two stock-based compensation plans: the 2001
Non-Qualified Stock Option Plan, under which the Company is authorized to issue
non-qualified stock options to purchase up to an aggregate of 10,000,000 shares
of common stock; and the 2006 Stock Option Plan, under which the Company is
authorized to issue incentive stock options and non-qualified stock options to
purchase up to an aggregate of 5,000,000 shares of common stock. At September
30, 2010, there were 278,000 options available for grant under these
plans. The exercise price is determined by the Compensation Committee
of the Board of Directors at the time of the granting of an option. Options vest
over a period not greater than five years, and expire no later than ten years
from the date of grant.
The
Company follows the FASB ASC 718 “Compensation – Stock Compensation” which
requires all share-based payments to employees, including grants of employee
stock options, to be recognized as compensation expense over the requisite
service period (generally the vesting period) in the financial statements based
on their fair values. For options with graded vesting, the Company values the
stock option grants and recognizes compensation expense as if each vesting
portion of the award was a separate award. The impact of forfeitures that may
occur prior to vesting is also estimated and considered in the amount of expense
recognized. In addition, the realization of tax benefits in excess of amounts
recognized for financial reporting purposes will be recognized in the cash flow
statement as a financing activity rather than as an operating
activity.
No tax
benefits were attributed to the stock-based compensation expense because a
valuation allowance was maintained for substantially all net deferred tax
assets. The Company elected to adopt the alternative method of calculating the
historical pool of windfall tax benefits. This is a simplified method to
determine the pool of windfall tax benefits that is used in determining the tax
effects of stock compensation in the results of operations and cash flow
reporting for awards that were outstanding as of the adoption of ASC
718.
7
The
Company uses the Black-Scholes option pricing model to determine the weighted
average fair value of options. The fair value of options at date of grant and
the assumptions utilized to determine such values are indicated in the following
table:
|
Nine
Months Ended
September 30,
|
|||||||
2009
|
2010
|
|||||||
Weighted
average fair value at date of grant for options granted during the
period
|
$ | 0.18 | $ | 0.11 | ||||
Risk-free
interest rates
|
1.16%-2.0 | % | 3.35%- 3.70 | % | ||||
Expected
option life in years
|
8-10 | 10 | ||||||
Expected
forfeiture rate
|
0 | % | 0 | % | ||||
Actual
vesting terms in years
|
2 | 1 | ||||||
Expected
stock price volatility
|
98.0 | % | 107.2% - 108.3 | % | ||||
Expected
dividend yield
|
-0- | -0- |
The
following summarizes the activities of the Company’s stock options for the nine
months ended September 30, 2010 (shares in thousands):
Shares
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Term
|
Aggregate
Intrinsic
Value
|
||||||||||
Number
of shares under option plans:
|
|||||||||||||
Outstanding
at January 1, 2010
|
13,195 | $ | 0.43 |
4.3
Years
|
|||||||||
Granted
|
1,061 | 0.12 |
9.4
Years
|
||||||||||
Exercised
|
- | - | |||||||||||
Canceled,
expired or forfeited
|
(1,255 | ) | 0.33 | ||||||||||
Outstanding
at September 30, 2010
|
13,001 | $ | 0.41 |
3.5
Years
|
$ | 0 | |||||||
Vested
and expected to vest after September 30, 2010 (A)
|
12,180 | $ | 0.39 |
3.1
Years
|
$ | 0 |
(A)
Options expected to vest, for options with vesting conditions based on
performance or market condition, are based on
management’s estimate of the probability of their vesting at the end of the
reporting period.
As of
September 30, 2010, there was approximately $9,000 of unrecognized stock
compensation related to unvested awards expected to be recognized over the next
3 months.
The
Company granted 1,470,000 and 1,061,000 options in the nine-month periods ended
September 30, 2009 and 2010, respectively. Of the 1,061,000 options granted
during the period ended September 30, 2010, 351,000 vested immediately and
710,000 vest upon the achievement of certain performance criteria during 2010.
The Company has recorded a charge of $11,000 and $25,000 in research and
development and general and administrative expense, respectively, for the fair
value of the options granted for the nine months ended September 30, 2010. Of the
1,470,000 options granted during the period ended September 30, 2009, 360,000
vested immediately, 100,000 vest one year from the date of grant, 100,000 vest
two years from the date of grant and 910,000 vest upon the achievement of
certain performance criteria during 2009. The Company has recorded a charge of
$11,000, $88,000 and $55,000 in research and development, general and
administrative and sales and marketing expense, respectively, for the fair value
of the options granted for the nine months ended September 30, 2009.Vesting of
the 910,000 options granted during the period ended September 30, 2009 was
similarly subject to achievement of certain performance criteria during
2009.
8
Under ASC
718 forfeitures are estimated at the time of valuation and reduce expense
ratably over the vesting period. This estimate is adjusted periodically based on
the extent to which actual forfeitures differ, or are expected to differ, from
the previous estimate.
At
September 30, 2010, the Company had 1,250,000 options outstanding which vest
upon the achievement of certain performance criteria including FDA-related
milestones associated with REPEL-CV and other product development programs,
certain sales and marketing activities, new product and business development
initiatives, financing activities and market based criteria. The
performance-based options have a term of 10 years from date of grant and an
exercise price range of $0.11 to $1.00. Of these options, 100,000 relate to the
achievement of certain FDA-related milestones for which the Company has recorded
an estimated credit of $8,000 for the nine months ended September 30, 2010
related to the reversal of previously recorded charges, 650,000 relate to
specific performance criteria including FDA-related milestones associated with
REPEL-CV and other product development programs, certain sales and marketing
activities, new product and business development initiatives, financing
activities, regulatory and administrative activities and the Company has
recorded an estimated charge of $11,000 and $25,000 in research and development
and general and administrative expense for the nine months period ended
September 30, 2010, respectively, for these options, and 500,000 relate to
market condition criteria for the Company’s common stock and recorded an
estimated charge of $33,000 in general and administrative expense for these
options for the nine months period ended September 30, 2010. The Company has
valued these market condition options utilizing the Black-Scholes option pricing
model rather than the preferable Lattice method due to the subjectivity of the
Lattice method’s assumptions when compared to the Black-Scholes pricing model
and the estimated immaterial difference between the two methods given the short
term vesting requirements of one and two years. At each reporting period for the
performance based grants only, management re-evaluates the probability that the
vesting contingency will be satisfied and adjusts the fair value charge
accordingly. Additionally, charges for the options that did not include
performance or market vesting conditions amounted to $33,000 for the nine months
period ended September 30, 2010.
In March
2010, the Board of Directors extended to December 31, 2010 the expiration date
of the following stock options that were scheduled to expire on March 21, 2010:
Dr. Richard Franklin, 1,000,000 options; Mr. Robert Hickey, 500,000 options; and
Dr. Eli Pines, 233,333 options. At the same time, the exercise price for each of
these stock options was increased from $0.12 per share to $0.14 per share. The
Company has recorded a charge of $14,000 and $91,000 in research and development
and general and administrative expense, respectively, for the fair value of the
options extended for the nine months ended September 30, 2010.
F)
|
Insurance
Note Payable
|
In March
2010, the Company entered into two short term financing agreements for product
liability and director and officer liability insurance premiums totaling
$124,000, payable in monthly installments including total interest of $6,000 and
$6,700, respectively. The monthly installments are due through December 2010 and
January 2011, respectively, and carry interest of 4.5% per annum and 3.75% per
annum, respectively.
G)
|
Note
Payable – Pathfinder, LLC
|
Under the
Credit Agreement, Pathfinder agreed to make revolving loans to the Company from
time to time until December 31, 2010 or such earlier date as Pathfinder shall
determine, in its sole and absolute discretion, upon at least five business
days’ prior written notice to the Company, in amounts requested by the Company
and approved by Pathfinder; provided that Pathfinder agreed to fund a minimum
amount equal to the Company’s wage and payroll tax obligations for so long as
the funding commitment remains in effect. Borrowings under the Credit Agreement,
which are to be evidenced by a note issued at the time of each borrowing, bear
interest at 6% per annum, and become due and payable on demand on the first
anniversary of such borrowing or the earlier to occur of a change of control of
the Company, as defined in the Credit Agreement. Upon the occurrence
of an event of default, the interest rate on outstanding principal amounts
increases to 10% per annum. The Company’s obligations under the
Credit Agreement and notes issued thereunder are secured by a lien in favor of
Pathfinder on substantially all of the Company’s assets. Upon
execution of the Credit Agreement, the Company borrowed approximately $56,000
thereunder. Subject to limited exceptions, expenditures from proceeds
of any borrowings under the Credit Agreement are subject to prior approval by
Pathfinder. Two of the Company’s directors are directors and founding principals
of Pathfinder, and one of such directors of the Company, the chairman of the
board of directors, is the principal executive officer of Pathfinder. (See Notes
Q and R of Notes to Condensed Financial Statements.)
9
H)
|
Net
Loss Per Common Share
|
Basic and
diluted net loss per common share is computed using the weighted average number
of shares outstanding during each period, which excludes 33,541,000 potential
common shares issuable upon the exercise of outstanding options and warrants
since their inclusion would have been be anti-dilutive.
I)
|
Common
Stock
|
For the
quarter ended March 31, 2010, the Company issued an aggregate of 162,500
shares of common stock, representing 65% of the $25,000 in fees due to the
Company’s non-employee directors for their service during the quarter with the
remaining $8,750 paid in cash. This policy was modified so that for the quarter
ended June 30, 2010, the Company issued an aggregate of 227,274 shares of
common stock, representing 100% of the $25,000 in fees due to the Company’s
non-employee directors and attributable to their services rendered during the
second quarter of 2010. For the quarter ended September 30, 2010, the
Company issued an aggregate of 625,000 shares of common stock, representing 100%
of the $25,000 in fees due to the Company’s non-employee directors and
attributable to their services rendered during the third quarter of 2010. In
each case, the shares were valued at fair market value on the date of grant, the
last trading day of the quarter, as reflected in the closing price on that day.
See Item 2.
J)
|
Newly
Adopted Accounting Pronouncements
|
In
February 2010, FASB issued ASU 2010-09 Subsequent Event (Topic 855) Amendments
to Certain Recognition and Disclosure Requirements. ASU 2010-09 removes the
requirement for an SEC filer to disclose a date through which subsequent events
have been evaluated in both issued and revised financial statements. That
amendment is effective for interim or annual periods ending after June 15, 2010.
The Company adopted ASU 2010-09 in February 2010 and did not disclose the date
through which subsequent events have been evaluated.
In June
2009, the FASB has issued FASB ASC 810-10 (previously known as SFAS
No. 167, Amendments to FASB Interpretation No 46(R)) which amends certain
requirements to improve financial reporting by enterprises involved with
variable interest entities and to provide more relevant and reliable information
to users of financial statements. The adoption of FASB ASC 810-10 effective
January 1, 2010 did not have any impact on the Company’s financial
statements.
K)
|
Recent
Accounting Pronouncements
|
In
October 2009, the FASB issued new guidance for revenue recognition with
multiple deliverables, which is effective for revenue arrangements entered into
or materially modified in fiscal years beginning on or after June 15, 2010,
although early adoption is permitted. This guidance eliminates the residual
method under the current guidance and replaces it with the “relative selling
price” method when allocating revenue in a multiple deliverable arrangement. The
selling price for each deliverable shall be determined using vendor specific
objective evidence of selling price, if it exists, otherwise third-party
evidence of selling price shall be used. If neither exists for a deliverable,
the vendor shall use its best estimate of the selling price for that
deliverable. After adoption, this guidance will also require expanded
qualitative and quantitative disclosures. The Company does not currently enter
into multiple deliverable revenue arrangements and, as a result, does not
anticipate any impact, upon adoption of the statement, on its financial
statements.
Income
Taxes
|
The
Company accounts for income taxes using the asset and liability method described
in FASB ASC 740-10 (Previously known as: SFAS No. 109), Income Taxes, the
objective of which is to establish deferred tax assets and liabilities for the
temporary differences between the financial reporting and the tax bases of the
Company’s assets and liabilities at enacted tax rates expected to be in effect
when such amounts are realized or settled. A valuation allowance related to
deferred tax assets is recorded when it is more likely than not that some
portion or all of the deferred tax assets will not be realized. At September 30,
2010, the Company had a deferred tax asset which was fully reserved by a
valuation allowance to reduce the deferred tax asset to the amount that is
expected to be realized.
10
On
January 14, 2010, the Company received proceeds of $433,000 from the sale of
certain New Jersey state tax losses. This is reflected as income tax benefits in
the accompanying Statement of Operations.
The
Company recognizes interest and penalties related to uncertain tax positions in
general and administrative expense. As of September 30, 2010, the Company has
not recorded any provisions for accrued interest and penalties related to
uncertain tax positions.
By
statute, tax years 2006 through 2009 remain open to examination by the major
taxing jurisdictions to which the Company is subject.
M)
|
Revenue
Recognition Policy
|
The
Company recognizes revenue when the amounts become fixed and determinable, when
product is shipped to customers and receipt of payment is reasonably assured.
Terms of sale are “f.o.b. shipping point” with the customer covering all costs
of shipment and insurance. All sales are final with no right of return except
for defective product.
N)
|
Retirement
Plan
|
In March
2007, the Company adopted a defined contribution retirement plan which qualifies
under section 401(k) of the Internal Revenue Code. The plan allows all
employees, upon commencement of employment, to voluntarily contribute amounts
not exceeding the maximum allowed under the Internal Revenue Code. The Company
is obligated to make a matching contribution equal to 100% of each employee’s
salary deferral contributions made at the rate of 4% of total compensation up to
a maximum of $245,000. During the nine months ended September 30, 2009 and 2010,
the Company made matching contributions to the plan in the amount of $29,000 and
$20,000, respectively.
O)
|
Shareholders
Rights Plan
|
On April
25, 2008, the Company’s Board of Directors approved the adoption of a
shareholder rights plan. The Board of Directors has declared a dividend
distribution of one right for each share of our common stock outstanding as of
the close of business on June 2, 2008. Initially, the rights will be represented
by common stock certificates, will not be traded separately from the common
stock and will not be exercisable. The rights generally will become exercisable
following any person becoming an “acquiring person” by acquiring, or commencing
a tender offer to acquire, beneficial ownership of 15% or more of the
outstanding shares of the Company’s common stock. If a person becomes an
“acquiring person,” each holder of a right, other than the acquirer, would be
entitled to receive, upon payment of the then purchase price, a number of shares
of our common stock or other securities having a value equal to twice the
purchase price. If the Company is acquired in a merger or other business
combination transaction after any such event, each holder of a right, other than
the acquirer, would be entitled to receive, upon payment of the then purchase
price, shares of the acquiring company having a value equal to twice the
purchase price. The rights are scheduled to expire on June 2, 2018 unless
earlier redeemed, terminated or exchanged in accordance with the terms of the
shareholder rights plan.
P)
|
Geographic
Information
|
Commencing
in the quarter ended June 30, 2009, the
Company began selling REPEL-CV in the United States, in addition to other
countries around the world. The following table summarizes the Company’s
revenues and long-lived assets by country for the three and nine months ended
September 30, 2009 and 2010, respectively (in thousands):
11
Geographic
Information
Three
Months Ended September 30,
|
Nine
Months Ended September 30,
|
As
of September 30,
|
||||||||||||||||||||||
2009
|
2010
|
2009
|
2010
|
2009
|
2010
|
|||||||||||||||||||
Revenues
|
Revenues
|
Long-Lived
Assets
|
||||||||||||||||||||||
United
States
|
$ | 45 | $ | 37 | $ | 85 | $ | 159 | $ | 32 | $ | 5 | ||||||||||||
Brazil
|
- | - | - | 61 | - | - | ||||||||||||||||||
Saudi
Arabia
|
11 | - | 35 | 15 | - | - | ||||||||||||||||||
Italy
|
- | - | 24 | 14 | - | - | ||||||||||||||||||
Czech
Republic
|
5 | - | 25 | 10 | - | - | ||||||||||||||||||
Hong
Kong
|
- | 8 | - | 15 | - | - | ||||||||||||||||||
Romania
|
- | - | 13 | - | - | - | ||||||||||||||||||
Russia
|
2 | 7 | 4 | 11 | - | - | ||||||||||||||||||
France
|
7 | - | 21 | - | - | - | ||||||||||||||||||
Dubai
|
10 | - | 10 | - | - | - | ||||||||||||||||||
Other
countries
|
12 | 3 | 35 | 35 | - | - | ||||||||||||||||||
$ | 92 | $ | 55 | $ | 252 | $ | 320 | $ | 32 | $ | 5 |
Q) Commitments
and Other Matters
Contemporaneous
with execution of the Credit Agreement, the Company entered into a non-binding
letter of intent relating to a proposed business combination with
Pathfinder. As presently contemplated, upon consummation of the
proposed transaction, Pathfinder would become a wholly-owned subsidiary of the
Company and the Company would issue to the members of Pathfinder a substantial
controlling equity interest in the Company and the Company’s Board of Directors
and management would be replaced by individuals designated by
Pathfinder. Consummation of the proposed transaction is subject to
negotiation and execution of a definitive agreement and the satisfaction or
waiver of conditions to be contained therein. (See Note G of Notes to Condensed
Financial Statements.)
Under the
Yissum agreement, the Company is obligated to pay a 5% royalty on net
sales, or, to preserve its rights under the agreement if its net sales or income
does not reach $1,000,000 by the end of fiscal 2010, an annual minimum royalty
of $250,000. At September 30, 2010, the Company has recorded a charge of
$188,000 for the anticipated annual minimum royalty obligation under the Yissum
Agreement attributable to the first nine months of 2010. If the financing
from Pathfinder is not made available, the Company may be unable to
pay the minimum royalty and may lose the rights to the intellectual
property under the Yissum agreement.
R) Subsequent
Events
We rely
on borrowings from Pathfinder under the Credit Agreement to fund shortfalls in
our operating requirements. Subsequent to September 30, 2010, we had
additional borrowings of $187,000 under the Credit Agreement. (See Note G of
Notes to Condensed Financial Statements.)
Item
2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Certain
statements in this Report under this Item 2 and elsewhere constitute
“forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995, including, without limitation, statements
regarding future cash requirements, the success of any pending or proposed
clinical trial and the timing or ability to achieve necessary regulatory
approvals. Such forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause the actual results,
performance or achievements of our Company, or industry results, to be
materially different from any future results, performance, or achievements
expressed or implied by such forward-looking statements. Such risks
and uncertainties include but are not limited to (i) potential adverse
developments regarding our efforts to obtain and maintain required FDA and other
approvals including, without limitation, approval by the FDA of an expanded
indication of REPEL-CV to include adult cardiac surgery patients; (ii) potential
inability to secure funding to engage in a strategic or other fundamental
transaction and (iii) unanticipated delays associated with manufacturing and
marketing activities. Reference is made to our Annual Report on Form
10-K for the year ended December 31, 2009, for a description of some of these
risks and uncertainties. Without limiting the foregoing, the words
“anticipates”, “plans”, “intends”, “expects” and similar expressions are
intended to identify such forward-looking statements that speak only as of the
date hereof. We undertake no obligation to publicly release the
results of any revisions to these forward-looking statements that may be made to
reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.
12
The
discussion and analysis of our financial condition and results of operations set
forth below under “Results of Operations” and “Liquidity and Capital Resources”
should be read in conjunction with our financial statements and notes thereto
appearing elsewhere herein.
General
We are a
biomaterials company engaged in the development and commercialization of
innovative and cost-effective medical devices for therapeutic
applications. Our products and product candidates, all of which are
based on our proprietary, bioresorbable polymer technology, are primarily
surgical implants designed to prevent or reduce the formation of adhesions (scar
tissue) following a broad range of surgical procedures. Our
commercialization efforts are currently focused on our lead product, REPEL-CV®
Bioresorbable Adhesion Barrier (“REPEL-CV”), for use in cardiac
surgery. REPEL-CV is a bioresorbable film designed to be placed over
the surface of the heart at the conclusion of surgery to reduce the formation of
post-operative adhesions.
We have
been selling REPEL-CV domestically since obtaining US Food and Drug
Administration clearance in March 2009 and internationally since obtaining CE
Mark approval in August 2006. In the United States and some foreign
countries, our marketing approval is limited to the pediatric market, while the
CE Mark approval, which covers the European Union (EU) and other countries, as
well as other foreign approvals subsequently obtained, apply broadly to both the
adult and pediatric market segments.
Following
FDA approval for the pediatric indication, we focused on clarifying the
additional clinical data that the FDA would require as a basis for expanding US
regulatory approval to include the adult indication. In August 2009,
we reached an understanding with the FDA regarding these data requirements and
the scope of the related clinical studies. Clearance to commence
these clinical studies is subject to submission to and approval by the FDA of an
IDE application. We are unable to fund these clinical
studies.
We
believe that there are a number of opportunities to leverage our polymer film
technology used in REPEL-CV in other anatomic sites where the presence of a
temporary barrier at the surgical site may provide clinical benefit at the point
of a subsequent surgery through the reduction of post-operative adhesions. In
May 2010, we obtained CE Mark approval for REPEL-GYN™, a barrier film
indicated for use in reducing the incidence, extent and severity of
post-operative adhesions in patients undergoing gynecologic surgery. In November
2008, we received 510(k) clearance from the FDA to market SinusShield™, another
application of our polymer film that is intended to reduce adhesions and act as
a space-occupying stent in nasal and sinus surgical procedures. We
are not currently engaged in commercialization efforts with respect to these
products.
Results
of Operations
Revenue
for the three and nine months ended September 30, 2010 was $55,000 and $320,000,
respectively, compared to $92,000 and $252,000 for the comparable prior year
periods, a decrease of 41.0% or $37,000 for the three month period and an
increase of 26.9% or $68,000 for the nine month period. The decrease in revenue
for the three month period is primarily attributable to the elimination of our
US sales personnel and reduced orders from international distributors. The
increase in revenue for the nine month period is primarily attributable to
increased sales of REPEL-CV in the United States which was launched in April
2009.
13
During
the nine month period ended September 30, 2010, revenue in the United States was
$159,000 which represented 49.7% of total revenue for the period. For more
detail on geographic breakdown, see Note P of Notes to Condensed Financial
Statements.
Cost of
goods sold was $10,000 and $68,000 for the three and nine months ended September
30, 2010, compared to $59,000 and $120,000 for the comparable prior year
periods, representing a decrease of 82.9% or $49,000 for the three month period
and a decrease of 43% or $52,000 for the nine month period. The decrease in cost
of goods sold for the three month period is primarily attributable to decreased
current year sales combined with lower current year inventory production costs.
The decrease for the nine month period is mainly attributable to a charge of
$48,000 in the prior year for a failed inventory production lot combined with
lower current year inventory production costs.
Cost
of goods sold reflects raw material costs and the cost of processing and
packaging REPEL-CV into saleable form.
We
incurred research and development expenses of $189,000 and $673,000 for the
three and nine months ended September 30, 2010, compared to $491,000 and
$1,158,000 for the comparable prior year periods, a decrease of 61.5% or
$302,000 for the three month period and a decrease of 41.9% or $485,000 for the
nine month period. The decrease for the three month period is primarily
attributable to reductions of $48,000 in new product development program costs
and lower regulatory costs of $206,000 due to higher costs associated with FDA
discussions during the prior year. The decrease for the nine month period is
mainly attributable to reductions of $145,000 in new product development program
costs and lower regulatory costs of $308,000 similar to the three month
reduction. We have suspended funding of all product development and clinical
development programs as a means of conserving cash.
General
and administrative expenses totaled $328,000 and $1,080,000 for the three and
nine months ended September 30, 2010, compared to $300,000 and $1,133,000 for
the comparable prior year periods, an increase of 9.6% or $28,000 for the three
month period and a decrease of 4.6% or $53,000 for the nine month period. The
increase for the three month period is primarily attributable to an increase in
legal fees of $40,000 partially offset by reduced depreciation of $9,000. The
decrease for the nine month period is primarily attributable to reductions in
legal fees of $16,000, depreciation expense of $32,000, investor relations
expense of $19,000 and bad debt expense of $10,000, partially offset by an
increase in consulting expenses of $15,000.
We
incurred sales and marketing expenses of $125,000 and $518,000 for the three and
nine months ended September 30, 2010, compared to $316,000 and $1,097,000 for
the comparable prior year periods, a decrease of 60.5% or $191,000 for the three
month period and a decrease of 52.8% or $579,000 for the nine month
period. The decrease for the three month period is primarily
attributable to reductions in compensation-related expenses of $134,000,
consulting fees of $59,000, travel expenses of $28,000, partially offset by an
increase in royalty expense of $58,000. The decrease for the nine month period
is primarily attributable to reductions in compensation-related expenses of
$442,000, consulting fees of $150,000, recruiting expenses of $46,000, travel
expenses of $49,000, advertising expense of $27,000 and training expenses of
$34,000, partially offset by increases in royalty expense of $176,000 and sales
commissions of $35,000.
Interest
income totaled $2,000 for the nine months ended September 30, 2010, compared to
$19,000 for the comparable prior year period, a decrease of 87.7% or $17,000.
The decrease is primarily attributable to lower average cash
balances.
We
recorded an income tax benefit of $433,000 for the nine months ended September
30, 2010. This amount was attributable to the receipt of funds associated with
the sale of certain accumulated New Jersey State tax operating losses. There was
no comparable amount for 2009.
Our net
loss was $599,000 and $1,588,000 for the three and nine months ended September
30, 2010, compared to $1,074,000 and $3,238,000 for the comparable prior year
periods, a decrease of 44.3% or $475,000 for the three month period and a
decrease of 51% or $1,650,000 for the nine month period. The decrease is
primarily attributable to the factors mentioned above. We expect to incur losses
for the foreseeable future.
14
Liquidity
and Capital Resources
At
September 30, 2010, we had no cash, compared to cash and cash equivalents of
$960,000 at September 30, 2009.
At
September 30, 2010, we had negative working capital of $486,000, compared to
working capital of $948,000 at September 30, 2009.
Net cash
used in operating activities was $937,000 for the nine months ended September
30, 2010, compared to $2,800,000 for the comparable prior year
period. Net cash used in operating activities for the current year
period was primarily comprised of a net loss of $1,588,000 offset by increases
totaling $194,000 in accounts payable and accrued expenses and decreases
totaling $171,000 in accounts receivable, inventory and prepaid expenses and the
impact of $286,000 in non-cash charges, primarily for stock-based compensation
and depreciation expenses. Net cash used in operating activities for the prior
year period was primarily comprised of a net loss of $3,238,000 and decreases
totaling $124,000 in accounts payable and accrued expenses, partially offset by
net decreases totaling $119,000 in accounts receivable, inventory and prepaid
expenses and by the impact of $443,000 in such non-cash expenses as stock-based
compensation and depreciation.
Net cash
provided by investing activities for the nine months ended September 30, 2010
was $5,000 which related to proceeds from the sale of furniture and equipment.
There was no comparable amount for 2009.
Net cash
used in financing activities for the nine months ended September 30, 2010 was
$31,000 compared to net cash provided by financing activities of $816,000 for
the prior year period. The current year amount was comprised of $87,000 in
payments of an insurance note payable for the financing of our product liability
and directors and officers insurance premiums offset by the net proceeds from a
short term note payable to Pathfinder of $56,000 under the Credit Agreement; the
prior year amount was comprised of $903,000 from the sale of common stock and
warrants, proceeds of $10,000 from the exercise of stock options,
partially offset by $97,000 in payments of an insurance note payable for the
financing of our product liability and directors and officers insurance
premiums. (See Notes F, G and Q of Notes to Condensed Financial
Statements.)
We do not
anticipate having sufficient revenue from operations to fund planned
expenditures. Insufficient funds have required us to delay, scale back or
eliminate some of our operations including research and development programs and
certain commercialization activities and to reduce the number of sales
personnel. We rely on borrowings from Pathfinder under the Credit
Agreement to fund shortfalls in our operating requirements. As of September 30,
2010, we had borrowed $56,000 under the Credit Agreement, and an additional
$187,000 since that date. No assurance can be given that additional
financing through the Credit Agreement or alternate financing transactions will
be available as and when needed. Subject to limited exceptions, all
borrowings under the Credit Agreement are at the discretion of Pathfinder and
the funding period, which is scheduled to expire on December 31, 2010, is
subject to early termination at the discretion of
Pathfinder. Moreover, expenditures from proceeds of any borrowings
under the Credit Agreement are generally subject to prior approval by
Pathfinder. For a detailed description of the Credit Agreement and
our borrowings thereunder, see Notes A, G and R of Notes to Condensed Financial
Statements. In the absence of additional cash infusion, we will be unable to
continue as a going concern. If the financing from Pathfinder is not made
available, the Company would not be able to pay its liabilities, may lose the
rights to the intellectual property under the Yissum agreement and may have to
liquidate. The report of our independent registered public accounting firm
contained in our 2009 Annual Report on Form 10-K, also contains an explanatory
paragraph referring to an uncertainty concerning our ability to continue as a
going concern
Contemporaneous
with execution of the Credit Agreement, we entered into a non-binding letter of
intent relating to a proposed business combination with
Pathfinder. As presently contemplated, upon consummation of the
proposed transaction, Pathfinder would become a wholly-owned subsidiary of our
company and we would issue to the members of Pathfinder a substantial
controlling equity interest in our company and the members of our Board of
Directors and management would be replaced by individuals designated by
Pathfinder. Consummation of the proposed transaction is subject to
negotiation and execution of a definitive agreement and the satisfaction or
waiver of conditions to be contained therein. The letter of intent
with Pathfinder follows a lengthy effort by our company, together with an
investment bank, to explore strategic alternatives, including a sale of
assets. As previously reported, that effort began after we obtained
direction from the US Food and Drug Administration regarding the scope and
parameters of the clinical studies the FDA would require to approve an expanded
indication for use of REPEL-CV® Bioresorbable Adhesion Barrier to include adults
and after it became clear that we would have insufficient capital to fund such
studies. Pending consummation of the proposed business combination
and subject to any restrictions that may be contained in the definitive
agreement, our Board of Directors, through a special committee comprised of
disinterested directors, will consider alternative third party proposals
consistent with its fiduciary duties and desire to maximize shareholder
value. There can be no assurance that we will be successful in
consummating the proposed business combination with Pathfinder or any other
alternative transaction.
15
At
September 30, 2010, we had employment agreements with three individuals that
expire as follows: one in September 2011, one in March 2011 and one in October
2012. Pursuant to these agreements, our commitment regarding cash severance
benefits aggregates $507,000 at September 30, 2010. We have also entered into
change of control agreements with its two executive officers pursuant to which,
upon the occurrence of events described therein, we could become obligated, in
addition to certain other benefits, to pay either 150% or 200%, depending on the
executive, of each such executive’s annual base salary plus the greater of the
prior year’s cash bonus or current year’s target bonus. Any severance
payments under the employment agreements would offset amounts required to be
paid under the change of control agreements.
Item
4. Controls and Procedures
Evaluation
of Disclosure Controls and Procedures
Our Chief
Executive Officer who is also our Chief Financial Officer, after
evaluating the effectiveness of our "disclosure controls
and procedures" (as defined in the Securities Exchange Act of 1934 Rule
13a-15(e); collectively, “Disclosure Controls”) as of the end of the period
covered by this quarterly report (the "Evaluation Date")
has concluded that as of the Evaluation Date, our Disclosure Controls were
effective to provide reasonable assurance that information required to be
disclosed in our reports filed or submitted under the Securities Exchange Act of
1934 is recorded, processed, summarized and reported within the time periods
specified by the SEC, and that material information relating to our company and
any consolidated subsidiaries is made known to management, including our Chief
Executive Officer and Chief Financial Officer, particularly during the period
when our periodic reports are being prepared to allow timely decisions regarding
required disclosure.
Changes
in Internal Control Over Financial Reporting
In
connection with the evaluation referred to in the
foregoing paragraph, we have identified no change in our internal
control over financial reporting that occurred during the quarter ended
September 30, 2010, that has materially affected, or is reasonably
likely to materially affect, our internal control over financial
reporting.
Inherent
Limitations on Effectiveness of Controls
Our
management, including the chief executive officer and chief financial officer
who is the same person, does not expect that our Disclosure Controls or our
internal control over financial reporting will prevent or detect all error and
all fraud. A control system, no matter how well designed and operated, can
provide only reasonable, not absolute, assurance that the control system’s
objectives will be met. The design of a control system must reflect the fact
that there are resource constraints, and the benefits of controls must be
considered relative to their costs. Further, because of the inherent limitations
in all control systems, no evaluation of controls can provide absolute assurance
that misstatements due to error or fraud will not occur or that all control
issues and instances of fraud, if any, within the company have been detected.
These inherent limitations include the realities that judgments in
decision-making can be faulty and that breakdowns can occur because of simple
error or mistake. Controls can also be circumvented by the individual acts of
some persons, by collusion of two or more people, or by management override of
the controls. The design of any system of controls is based in part on certain
assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under all potential
future conditions. Projections of any evaluation of controls effectiveness to
future periods are subject to risks. Over time, controls may become inadequate
because of changes in conditions or deterioration in the degree of compliance
with policies or procedures.
16
PART
II - OTHER INFORMATION
Item
2.
|
Unregistered
Sales of Equity Securities and Use of
Proceeds
|
Our non-employee directors are entitled
to cash compensation for their service as directors, payable
quarterly. In accordance with cash conserving measures adopted by our
Board of Directors that stipulates that such quarterly cash compensation would
be paid in shares, effective September 30, 2010 we granted an aggregate of
625,000 shares of common stock to our non-employee directors in full
satisfaction of $25,000 in aggregate board fees otherwise payable at that time
in cash to such directors and attributable to the third quarter of
2010. The shares were valued at fair market value on September 30,
2010, the last trading day of the quarter, as reflected in the closing price on
that day. In quarters commencing prior to the quarter ended June 30,
2010, such compensation was payable 65% in shares and the balance in cash.
Commencing with the second quarter, the full amount of such compensation is
payable in shares to further conserve cash. The transactions
were not registered under the Securities Act of 1933, in reliance on the
exemption provided by Section 4(2) thereunder.
Item
6.
|
Exhibits
|
|
10.1
|
Revolving
Credit and Security Agreement dated as of September 14, 2010 between
SyntheMed, Inc. and Pathfinder, LLC, as
lender.
|
|
31.1
|
Certification
of Principal Executive Officer and Principal Financial Officer Pursuant to
Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
|
32.1
|
Certification
of Principal Executive Officer and Principal Financial Officer Pursuant to
18 U.S.C.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
|
SIGNATURE
In
accordance with the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SyntheMed,
Inc.
|
||
By:
|
/s/ Robert P. Hickey
|
|
Robert
P. Hickey
|
||
President,
CEO and CFO
|
||
Dated: November 5,
2010
|
EXHIBIT
INDEX
ITEM
|
10.1
|
Revolving
Credit and Security Agreement dated as of September 14, 2010 between
SyntheMed, Inc. and Pathfinder, LLC, as
lender.
|
|
31.1
|
Certification
of Principal Executive Officer and Principal Financial Officer Pursuant to
Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
|
32.1
|
Certification
of Principal Executive Officer and Principal Financial Officer Pursuant to
18 U.S.C.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
|
17