Delaware
|
2836
|
841521955
|
(State
or other jurisdiction
|
(Primary
Standard Industrial
|
(I.R.S.
Employer
|
of
incorporation or organization)
|
Classification
Code Number)
|
Identification
No.)
|
Item
Description
|
Page
No.
|
|
WHERE
YOU CAN FIND MORE INFORMATION ABOUT US
|
5
|
|
CAUTIONARY
STATEMENT CONCERNING FORWARD-LOOKING INFORMATION
|
5
|
|
PROSPECTUS
SUMMARY
|
6
|
|
SUMMARY
CONSOLIDATED FINANCIAL DATA OF ADVAXIS
|
7
|
|
THE
OFFERING
|
9
|
|
RISK
FACTORS
|
10
|
|
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
|
24
|
|
USE
OF PROCEEDS
|
25
|
|
MARKET
FOR COMMON STOCK AND RELATED STOCKHOLDER MATTERS
|
25
|
|
DIVIDEND
POLICY
|
25
|
|
DILUTION
|
25
|
|
CAPITALIZATION
|
26
|
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
AND PLAN OF OPERATIONS
|
28
|
|
BUSINESS
|
39
|
|
MANAGEMENT
|
59
|
|
PRINCIPAL
AND MANAGEMENT STOCKHOLDERS
|
69
|
|
CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
|
71
|
|
FEBRUARY
2006 PRIVATE PLACEMENT
|
71
|
|
SELLING
STOCKHOLDERS
|
73
|
|
DESCRIPTION
OF CAPITAL STOCK OF THE COMPANY
|
86
|
|
SHARES
OF THE COMPANY ELIGIBLE FOR FUTURE SALE
|
87
|
|
PLAN
OF DISTRIBUTION
|
88
|
|
LEGAL
MATTERS
|
89
|
|
EXPERTS
|
90
|
|
ADDITIONAL
INFORMATION
|
90
|
|
FINANCIAL
STATEMENTS
|
F-1
|
Subject
to completion
|
Prospectus
|
Dated
June 12, 2007
|
·
|
Up
to 12,037,550
shares of outstanding
shares
as
of March 31, 2007.
|
·
|
Up
to 43,341,513 shares underlying our Convertible Secured Debentures
due
February 1, 2009 (the “Debentures”) sold in a February and March 2006
private placement of which 5,052,513 shares have been issued upon
conversion of $775,000 principal amount of the
Debentures.
|
·
|
Up
to 24,130,588 shares underlying warrants, including 4,500,000 shares
underlying warrants issued in the Debenture private
placement
|
Product
|
Indication
|
Stage
|
||
Lovaxin
C
|
Cervical,
head and neck cancers
|
Phase
I/II anticipated to be completed during six months ended July 31,
2007,
Phase II study in cervical cancer anticipated to commence in
2007*
|
||
Lovaxin
P
|
Prostate
cancer
|
Pre-clinical;
Phase I study anticipated to commence in late fiscal
2007
|
||
Lovaxin
B
|
Breast
cancer and melanoma
|
Pre-clinical;
Phase I study anticipated to commence in late fiscal
2008
|
||
Lovaxin
T
|
Cancer
through control of telomerase
|
Pre-clinical
|
Year
Ended October
31,
|
Three
Months Ended
January
31,
|
Period
from
March
1, 2002 (inception) to
|
||||||||||||||||||||
2004
|
2005
|
2006
|
2006
|
2007
|
October
31, 2006
|
January
31, 2007
|
||||||||||||||||
(unaudited)
|
(unaudited)
|
(unaudited)
|
(unaudited) | |||||||||||||||||||
Statement
of Operations Data:
|
||||||||||||||||||||||
Revenue
|
$
|
116,806
|
$
|
552,868
|
$
|
431,961
|
$
|
329,928
|
$
|
146,307
|
$
|
1,105,235
|
$
|
1,251,542
|
||||||||
Total
operating expenses
|
$
|
715,754
|
$
|
2,395,328
|
$
|
3,481,226
|
$
|
798,990
|
$
|
1,339,179
|
$
|
7,591,841
|
$
|
8,931,020
|
||||||||
Interest
expense (income)
|
$
|
13,132
|
$
|
(7,307
|
)
|
$
|
(437,299
|
)
|
$
|
(1,008
|
)
|
$
|
(153,355
|
)
|
$
|
(466,027
|
)
|
$
|
(619,382
|
)
|
||
Other
income
|
$
|
72
|
$
|
43,978
|
$
|
90,899
|
$
|
11,931
|
$
|
26,326
|
$
|
136,422
|
$
|
162,748
|
||||||||
Net
changes in fair value of common stock warrant liability and embedded
derivative liability
|
—
|
—
|
$
|
(2,802,078
|
)
|
—
|
$
|
1,282,871
|
$
|
(2,802,078
|
)
|
$
|
(1,519,207
|
)
|
||||||||
Net
loss
|
$
|
(655,892
|
)
|
$
|
(1,805,789
|
)
|
$
|
(6,197,744
|
)
|
$
|
(458,139
|
)
|
$
|
(37,030
|
)
|
$
|
(9,618,289
|
)
|
$
|
(9,655,319
|
)
|
|
Loss
per Share Information:
|
||||||||||||||||||||||
Net
loss per share, basic and diluted
|
$
|
(0.04
|
)
|
$
|
(0.05
|
)
|
$
|
(0.16
|
)
|
$
|
(0.01
|
)
|
$
|
(0.00
|
)
|
|
October
31,
|
October
31,
|
October
31,
|
January
31,
|
|||||||||
2004
|
2005
|
2006
|
2007
|
||||||||||
(unaudited)
|
(unaudited)
|
||||||||||||
Balance
Sheet Data:
|
|||||||||||||
Cash
and cash equivalents
|
$
|
32,279
|
$
|
2,075,206
|
$
|
2,761,166
|
$
|
1,977,809
|
|||||
Intangible
assets
|
$
|
469,803
|
$
|
751,088
|
$
|
956,409
|
$
|
959,842
|
|||||
Total
assets
|
$
|
502,083
|
$
|
2,904,039
|
$
|
4,002,704
|
$
|
3,239,714
|
|||||
Total
liabilities
|
$
|
1,841,579
|
$
|
1,152,465
|
$
|
7,709,845
|
$
|
6,441,447
|
|||||
Shareholders’
(Deficiency) Equity
|
$
|
(1,339,496
|
)
|
$
|
1,751,575
|
$
|
(3,707,141
|
)
|
$
|
(3,201,733
|
)
|
Common
stock offered by Selling Stockholders
|
48,502,633
shares(1)
|
|
Common
stock outstanding as of March 31, 2007
|
44,849,283
shares
(2)
|
|
Use
of proceeds
|
We
will not receive any proceeds from the sale of the common stock,
but we
will receive funds from the exercise of warrants by Selling Stockholders,
if exercised for cash.
|
|
“OTC
Bulletin Board Quote” as of March 30, 2007.
|
$.23
|
(1)
|
Represents
12,037,550
shares
issued to Selling Shareholders,
24,130,588 shares which may be acquired upon exercise of warrants
issued
to Selling Stockholders, and 12,334,495 shares which may be acquired
upon
conversion of principal and interest on our Debentures issued to
a Selling
Stockholder in February and March 2006 at a fixed conversion price
(“fixed
conversion price”) of $0.287 per share. As of March 31, 2007 to date
$775,000 of the principal was converted into aggregate of 5,052,513
shares
acquired leaving a principal of $2,225,000 to be converted excluding
interest. Assuming the “market price” conversion price of $0.2185 per
share (95% of the March 30, 2007 closing price) the number of shares
upon
conversion will be higher. Such price is to be revised upward to
$0.287 or
downward if the “market price” as defined is lower at time of conversion
in which event the number of shares issued upon conversion will
increase.
Up to an additional 31,007,018 shares may be offered for resale
by the
Selling Stockholders pursuant to this Prospectus in the event the
shares
were acquired by the Selling Stockholders as a result of conversions
or
dividend payments at a price less than $0.287 per share.
|
(2) |
The
number of shares of common stock outstanding as of March
31, 2007 listed
above excludes, in addition to the shares
offered,
|
·
|
26,009,220
shares issuable upon exercise of the warrants with exercise prices
ranging
from $0.1952 to $0.40 per share;
|
·
|
8,512,841
additional shares of common stock issuable upon exercise of
options;
|
·
|
Commitments
to issue stock, options or warrants.
|
·
|
competition
from companies that have substantially greater assets and financial
resources than we have;
|
·
|
need
for acceptance of products;
|
·
|
ability
to anticipate and adapt to a competitive market and rapid technological
developments;
|
·
|
amount
and timing of operating costs and capital expenditures relating to
expansion of our business, operations and
infrastructure;
|
·
|
need
to rely on multiple levels of outside funding due to the length of
the
product development cycles and governmental approved protocols associated
with the pharmaceutical industry;
and
|
·
|
dependence
upon key personnel including key independent consultants and
advisors.
|
·
|
The
number of and the outcome of clinical studies we are planning to
conduct.
For example, our R&D expenses may increase based on the number of
late-stage clinical studies which we may be required to
conduct;
|
·
|
The
number of products entering into development from late-stage research.
For
example, there is no guarantee that internal research efforts will
succeed
in generating sufficient data for us to make a positive development
decision or that an external candidate will be available on terms
acceptable to us. Some promising candidates may not yield sufficiently
positive pre-clinical results to meet our stringent development
criteria;
|
·
|
In-licensing
activities, including the timing and amount of related development
funding
or milestone payments. For example, we may enter into agreements
requiring
us to pay a significant up-front fee for the purchase of in-process
research and development which we may record as an R&D
expense;
|
·
|
Market
conditions. For example, when we seek to raise our next round of
financing
the market conditions may not provide adequate
funding.
|
·
|
As
part of our strategy, we invest in R&D. R&D as a percent of future
potential revenues can fluctuate with the changes in future levels
of
revenue. Lower revenues can lead to more limited spending on R&D
efforts; and
|
·
|
Future
levels of revenue.
|
·
|
Pre-clinical
study results that may show the product to be less effective than
desired
(e.g., the study failed to meet its primary objectives) or to have
harmful
or problematic side effects;
|
·
|
Failure
to receive the necessary regulatory approvals or a delay in receiving
such
approvals. Among other things, such delays may be caused by slow
enrollment in clinical studies, length of time to achieve study endpoints,
additional time requirements for data analysis or Biological
License Application (“BLA”)
preparation, discussions with the FDA, an FDA request for additional
pre-clinical or clinical data, or unexpected safety or manufacturing
issues.
|
·
|
Manufacturing
costs, pricing or reimbursement issues, or other factors that make
the
product uneconomical; and
|
·
|
The
proprietary rights of others and their competing products and technologies
that may prevent the product from being
commercialized.
|
·
|
significant
time and effort from our management
team;
|
·
|
coordination
of our research and development programs with the research and development
priorities of our collaborators;
and
|
·
|
effective
allocation of our resources to multiple
projects.
|
·
|
decreased
demand for our product candidates,
|
·
|
injury
to our reputation,
|
·
|
withdrawal
of clinical trial participants,
|
·
|
costs
of related litigation,
|
·
|
substantial
monetary awards to patients or other claimants,
|
·
|
loss
of revenues,
|
·
|
the
inability to commercialize product candidates,
and
|
·
|
increased
difficulty in raising required additional funds in the private and
public
capital markets.
|
·
|
price
and volume fluctuations in the overall stock market from time to
time;
|
·
|
fluctuations
in stock market prices and trading volumes of similar companies;
|
·
|
actual
or anticipated changes in our earnings or fluctuations in our operating
results or in the expectations of securities analysts;
|
·
|
general
economic conditions and trends;
|
·
|
major
catastrophic events;
|
·
|
sales
of large blocks of our stock;
|
·
|
departures
of key personnel;
|
·
|
changes
in the regulatory status of our product candidates, including results
of
our clinical trials;
|
·
|
events
affecting Penn or any future collaborators;
|
·
|
announcements
of new products or technologies, commercial relationships or other
events
by us or our competitors;
|
·
|
regulatory
developments in the United States and other countries;
|
·
|
failure
of our common stock to be listed or quoted on the Nasdaq Small Cap
Market,
American Stock Exchange, OTC Bulletin Board or another national market
system;
|
·
|
changes
in accounting principles;
|
·
|
discussion
of us or our stock price by the financial and scientific press and
in
online investor communities; and
|
·
|
The
impact of the embedded conversion feature in the secured convertible
debenture.
|
Conversion
Price
|
Number
of Shares Issuable
on
Conversion of Debentures
|
Percentage
of Issued
and
Outstanding as of March 31, 2007(1)
|
|||||
$0.287
|
7,752,613
|
14.7
|
%
|
||||
$0.25
|
8,900,000
|
16.6
|
%
|
||||
$0.20
|
11,125,000
|
19.9
|
%
|
||||
$0.15
|
14,833,333
|
24.9
|
%
|
||||
$0.10
|
22,250,000
|
33.2
|
%
|
||||
(1) |
Assumes
44,849,283 shares outstanding as of March 31, 2007 and gives effect
to the
shares issuable on conversion of the outstanding principal of
$2,225,000.
|
·
|
with
a price of less than $5.00 per share;
|
·
|
that
are not traded on a “recognized” national exchange;
|
·
|
whose
prices are not quoted on the NASDAQ automated quotation system; or
|
·
|
of
issuers with net tangible assets less than $2,000,000 (if the issuer
has
been in continuous operation for at least three years) or $5,000,000
(if
in continuous operation for less than three years), or with average
revenue of less than $6,000,000 for the last three years.
|
·
|
obtain
from the investor information about his or her financial situation,
investment experience and investment objectives;
|
·
|
reasonably
determine, based on that information, that transactions in penny
stocks
are suitable for the investor and that the investor has enough knowledge
and experience to be able to evaluate the risks of “penny stock”
transactions;
|
·
|
provide
the investor with a written statement setting forth the basis on
which the
broker-dealer made his or her determination; and
|
·
|
receive
a signed and dated copy of the statement from the investor, confirming
that it accurately reflects the investor’s financial situation, investment
experience and investment objectives.
|
· |
The
issuance of new equity securities pursuant to a future
offering;
|
· |
Changes
in interest rates;
|
· |
Competitive
developments, including announcements by competitors of new products
or
services or significant contracts, acquisitions, strategic partnerships,
joint ventures or capital
commitments;
|
· |
Variations
in quarterly operating results
|
· |
Change
in financial estimates by securities
analysts;
|
· |
The
depth and liquidity of the market for our common
stock;
|
· |
Investor
perceptions of our company and the technologies industries generally;
and
|
· |
General
economic and other national
conditions.
|
·
|
statements
as to the anticipated timing of clinical studies and other business
developments;
|
·
|
statements
as to the development of new
products;
|
·
|
expectations
as to the adequacy of our cash balances to support our operations
for
specified periods of time and as to the nature and level of cash
expenditures; and
|
·
|
expectations
as to the market opportunities for our products, as well as our ability
to
take advantage of those
opportunities.
|
·
|
Our
limited operating history and ability to continue as a going
concern;
|
·
|
Our
ability to successfully develop and commercialize products based
on our
therapies and the Listeria System;
|
·
|
A
lengthy approval process and the uncertainty of FDA and other government
regulatory requirements may have a material adverse effect on our
ability
to commercialize our applications;
|
·
|
Clinical
trials may fail to demonstrate the safety and effectiveness of our
applications or therapies, which could have a material adverse effect
on
our ability to obtain government regulatory
approval;
|
·
|
The
degree and nature of our
competition;
|
·
|
Our
ability to employ and retain qualified employees;
and
|
·
|
The
other factors referenced in this prospectus, including, without
limitation, under the section entitled “Risk Factors”, “Management’s
Discussion and Analysis of Financial Condition and Results of Operations
and Plan of Operations”, and
Business”.
|
|
Fiscal
2006
|
Fiscal
2005
|
|||||||||||
High
|
Low
|
High
|
Low
|
||||||||||
First
Quarter November 1 - January 31
|
$
|
0.27
|
$
|
0.16
|
N/A
|
N/A
|
|||||||
Second
Quarter February 1 - April 30
|
$
|
0.37
|
$
|
0.21
|
N/A
|
N/A
|
|||||||
Third
Quarter…May 1 - July 31
|
$
|
0.30
|
$
|
0.17
|
$
|
1.25
|
$
|
0.35
|
|||||
Fourth
Quarter August 1, - October 31
|
$
|
0.25
|
$
|
0.13
|
$
|
0.52
|
$
|
0.15
|
October
31, 2006
|
January
31, 2007
|
||||||
Indebtedness
|
|||||||
Secured
Convertible Debenture due 2/01/09 and fair value of embedded
derivative
|
$
|
5,017,696
|
$
|
3,880,405
|
|||
Notes
Payable*
|
313,000
|
345,125
|
|||||
Total
indebtedness
|
$
|
5,330,696
|
$
|
4,225,530
|
|||
Stockholders’
equity (deficit):
|
|||||||
Preferred
Stock, authorized 5,000,000,
|
|||||||
none
outstanding
|
—
|
—
|
|||||
Common
Stock, par value $.001
|
|||||||
authorized
500,000,000
|
|||||||
outstanding
40,238,992 and 42,331,051
|
40,239
|
42,330
|
|||||
Additional
paid in capital
|
|
|
5,914,793
|
|
|
6,455,140
|
|
Deficit
accumulated during development
|
|
|
(9,662,173
|
)
|
|
(9,699,203
|
)
|
Stockholders’
Deficiency
|
(3,707,141
|
)
|
(3,201,733
|
)
|
|||
Total
capitalization
|
$
|
1,623,555
|
$
|
1,023,797
|
Year
Ended October
31,
|
Three
Months Ended
January
31,
|
Period
from
March
1, 2002 (inception) to
|
||||||||||||||||||||
|
2004
(unaudited)
|
2005
|
2006
|
2006
(unaudited)
|
2007
(unaudited)
|
October
31, 2006
|
January
31, 2007
(unaudited)
|
|||||||||||||||
Statement
of Operations Data:
|
||||||||||||||||||||||
Revenue
|
$
|
116,806
|
$
|
552,868
|
$
|
431,961
|
$
|
329,928
|
$
|
146,307
|
$
|
1,105,235
|
$
|
1,251,542
|
||||||||
Total
operating expenses
|
$
|
715,754
|
$
|
2,395,328
|
$
|
3,481,226
|
$
|
798,990
|
$
|
1,339,179
|
$
|
7,591,841
|
$
|
8,931,020
|
||||||||
Interest
expense (income)
|
$
|
13,132
|
$
|
(7,307
|
)
|
$
|
(437,299
|
)
|
$
|
(1,008
|
)
|
$
|
(153,355
|
)
|
$
|
(466,027
|
)
|
$
|
(619,382
|
)
|
||
Other
income
|
$
|
72
|
$
|
43,978
|
$
|
90,899
|
$
|
11,931
|
$
|
26,326
|
$
|
136,422
|
$
|
162,748
|
||||||||
Net
changes in fair value of common stock warrant liability and embedded
derivative liability
|
—
|
—
|
$
|
(2,802,078
|
)
|
—
|
$
|
1,282,871
|
$
|
(2,802,078
|
)
|
$
|
(1,519,207
|
)
|
||||||||
Net
loss
|
$
|
(655,892
|
)
|
$
|
(1,805,789
|
)
|
$
|
(6,197,744
|
)
|
$
|
(458,139
|
)
|
$
|
(37,030
|
)
|
$
|
(9,618,289
|
)
|
$
|
(9,655,319
|
)
|
|
Loss
per Share Information:
|
||||||||||||||||||||||
Net
loss per share, basic and diluted
|
$
|
(0.04
|
)
|
$
|
(0.05
|
)
|
$
|
(0.16
|
)
|
$
|
(0.01
|
)
|
$
|
(0.00
|
)
|
October
31,
|
January
31,
|
||||||||||||
2004
(unaudited)
|
October
31,
2005
|
October
31,
2006
|
2007
(unaudited)
|
||||||||||
Balance
Sheet Data:
|
|||||||||||||
Cash
and cash equivalents
|
$
|
32,279
|
$
|
2,075,206
|
$
|
2,761,166
|
$
|
1,977,809
|
|||||
Intangible
assets
|
$
|
469,803
|
$
|
751,088
|
$
|
956,409
|
$
|
959,842
|
|||||
Total
assets
|
$
|
502,083
|
$
|
2,904,039
|
$
|
4,002,704
|
$
|
3,239,714
|
|||||
Total
liabilities
|
$
|
1,841,579
|
$
|
1,152,465
|
$
|
7,709,845
|
$
|
6,441,447
|
|||||
Shareholders’
(Deficiency) Equity
|
$
|
(1,339,496
|
)
|
$
|
1,751,575
|
$
|
(3,707,141
|
)
|
$
|
(3,201,733
|
)
|
· |
Complete
Phase I clinical study of Lovaxin
C;
|
· |
Initiate
a Phase II clinical study of Lovaxin C Cervical
Cancer;
|
· |
Initiate
Preclinical Studies and a Phase I study of Lovaxin P Prostate
Cancer;
|
· |
Initiate
Preclinical Studies and a Phase I study of Lovaxin B Breast
Cancer;
|
· |
Continue
preclinical development of Lovaxin
T;
|
· |
Continue
research to expand our technology
platform.
|
·
|
Cost
incurred to date: approximately $1,000,000
|
|
·
|
Estimated
future costs: $500,000 Phase I and $2,500,000 - $4,000,000 Phase
II
|
|
·
|
Anticipated
completion date: second/third quarter fiscal 2007 Phase I and 2008
and
beyond Phase II.
|
|
·
|
Uncertainties:
|
|
-
|
the
FDA (or relevant foreign regulatory authority) may not approve the
study
|
|
-
|
One
or more serious adverse events in patients enrolled in the
trial
|
|
-
|
difficulty
in recruiting patients
|
-
|
delays
in the program
|
|
-
|
Commencement
of material cash flows:
|
|
-
|
Unknown
at this stage and dependent upon a licensing deal or pursuant to
a
marketing collaboration subject to regulatory approval to market
and sell
the product.
|
|
-
|
Obtaining
favorable animal data
|
|
-
|
Proving
low toxicity in animals
|
|
-
|
Manufacturing
scale up to GMP level
|
|
-
|
FDA
(or foreign regulatory authority) may not approve the
study
|
|
-
|
The
occurrence of a severe or life threatening adverse event in a
patient
|
|
-
|
Delays
in the program
|
|
-
|
Commencement
of material cash flows:
|
|
-
|
Unknown
at this stage, dependent upon a licensing deal or a marketing
collaboration subject to regulatory approval to market and sell the
product.
|
·
|
Cost
incurred to date: $100,000
|
·
|
Estimated
future costs: $1,500,000
|
·
|
Anticipate
completion dates: fourth quarter of fiscal 2008 or
beyond
|
·
|
Risks
and uncertainties: Lovaxin C
(above)
|
·
|
Cost
incurred to date: $300,000
|
|
·
|
Estimated
future costs: $1,800,000
|
|
·
|
Anticipate
completion dates: fourth quarter of fiscal 2008 or
beyond
|
|
·
|
Risks
and uncertainties: See Lovaxin P
(above)
|
·
|
Clinical
trial expenses increased $96,425, or 370%, to $122,465 from $26,040
due to
the start-up of our clinical trial in the second quarter of Fiscal
2006.
|
·
|
Wages,
salaries and related lab costs increased $125,619, or 97%, to $255,138
from $129,519 principally due to our expanded research and development
staffing.
|
·
|
Subcontracted
and consulting expenses decreased by $76,512, or 44%, to $99,244
from
$175,756, primarily reflecting the reduced subcontract work performed
by
Dr. Paterson at Penn, pursuant to certain grants.
|
·
|
Manufacturing
expenses decreased $10,775, or 87%, to $1,585 from $12,360; the result
of
the completion of our manufacturing program in late fiscal year 2005
in
anticipation of the Lovaxin C toxicology and clinical trials required
in
2006.
|
·
|
Toxicology
study expenses of $33,558, incurred in the Fiscal 2006 Quarter as
a result
of the initiation of toxicology studies by Pharm Olam in connection
with
our Lovaxin C product candidates in anticipation of clinical studies
in
2006; none were incurred in the Fiscal 2007
Quarter.
|
·
|
Wages
and benefit expenses increased by $91,080, or $177% to $142,421 from
$51,342 due to hiring of a finance and administrative staff in the
second
quarter Fiscal 2006.
|
·
|
Consulting
fees and expenses increased by $323,422, or 202%, to $483,675 from
$160,253. Such increase was primarily attributed to an amendment
of Mr.
Appel’s (LVEP) consulting agreement resulting in: (i) an increase of
$159,909 of option expense of which $20,016 is due to vesting and
$139,893
is due to acceleration of his vesting; (ii) a decrease of his bonus
by
$15,476; and (iii) the issuance to Mr. Appel of 1,000,000 shares
of common
stock of the Company ($200,000). These expenses were partially offset
by
the decrease in other consulting expenses due to lower fair values
in the
Fiscal 2007 Quarter verses the prior Fiscal quarter in 2006 for other
consultants.
|
·
|
An
increase in legal fees and public relations expenses of $19,377,
or 32%,
to $79,509 from $61,151, primarily as a result of growth in personnel
and
changes in management.
|
·
|
Clinical
trial expenses increased $328,389, or 351%, from $93,525 to $421,915
due
to the start-up of our clinical trial in March 2006.
|
·
|
Wages,
salaries and related lab costs increased by $409,524, or 215%, from
$190,804 to $600,329 principally due to our expanded research and
development staffing in early 2006.
|
·
|
Subcontracted
expenses increased by $107,949, or 76.3%, from $141,366 to $249,315
reflecting the additional subcontract work performed by Dr. Paterson
at
Penn, pursuant to certain grants.
|
·
|
Manufacturing
expenses decreased $383,387, or 93.6%, from $409,542 to $26,155;
the
result of the fiscal 2005 manufacturing program in anticipation of
the
Lovaxin C for toxicology and clinical trials required in early
2006.
|
·
|
Toxicology
study expenses decreased $259,548, or 88.6%, from $293,105 to $33,558;
principally as a result of the initiation in the earlier period of
toxicology studies by Pharm Olam in connection with our Lovaxin C
product
candidates in anticipation of the clinical studies in
2006.
|
·
|
Consulting
fees and related expenses increased by $580,197, or 190%, from $305,153
for the twelve months ended October 31, 2005 to $885,349 for the
same
period in 2006 arising from a higher bonus expense, stock expense,
consulting fees and the fair value of options primarily for the Chief
Executive Officer(s) and consultants.
|
·
|
An
increase in legal fees and public relations expenses of $391,611,
or 364%,
from $107,370 for the twelve-months ended October 31, 2005 to $498,611
for
the same period in 2006, primarily as a result of an increase in
the costs
arising from being publicly held.
|
·
|
A
decrease in offering and analyst expenses of $132,498, all of which
were
incurred in fiscal 2005 while none were incurred in
2006.
|
·
|
An
increase in our related manufacturing expenses of $416,842, from
$(7,300)
to $409,542; such increase reflects the delay in the manufacturing
program
during 2004 because of delays in funding, and the manufacturing in
2005 of
Lovaxin C for toxicology and clinical trials;
|
·
|
Expenses
in fiscal 2005 of $293,105 reflecting the initiation of toxicology
studies
by Pharm Olam in connection with our Lovaxin C product candidates,
and the
payment of deferred license fees to Penn; none were incurred in the
prior
year.
|
·
|
Wages
and salaries related to our research and development program of $166,346
reflecting the recruitment of our R&D management team in early 2005;
none were incurred in the prior year.
|
·
|
Subcontracted
work of $141,366, reflecting the subcontract work performed by Dr.
Paterson at Penn, pursuant to certain grants; none were incurred
in the
prior year.
|
·
|
employee
related expenses increased by $123,157, or 56.4%, from $218,482 for
the
twelve months ended October 31, 2004 to $341,639 for the twelve months
ended October 31, 2005 arising from a bonus to Mr. Derbin, the then
Chief
Executive Officer, in stock, an increase in the salary of Mr. Derbin,
and
the cost of health insurance initiated in 2005;
|
·
|
offering
expenses increased by $117,498, or 100%, from $0 for the twelve months
ended October 31, 2004 to $117,498 for the twelve months ended October
31,
2005 arising from legal and banking expenses relating to the private
placement closed in November 2004;
|
·
|
an
increase in professional fees from $231,686 for the twelve-months
ended
October 31, 2004 to $460,691 for the twelve months ended October
31, 2005,
primarily as a result of an increase in legal fees, public relations
fees,
consulting fees and accounting
fees.
|
Product
|
Indication
|
Stage
|
||
Lovaxin
C
|
Cervical,
head and neck cancers
|
Phase
I/II anticipates to be completed during six months ended July 31,
2007,
Phase II study in cervical cancer anticipated to commence in
2007*
|
||
Lovaxin
P
|
Prostate
cancer
|
Pre-clinical;
Phase I study anticipated to commence in late fiscal
2007
|
||
Lovaxin
B
|
Breast
cancer and melanoma
|
Pre-clinical;
Phase I study anticipated to commence in late fiscal
2008
|
||
Lovaxin
T
|
Cancer
through control of telomerase
|
Pre-clinical
|
· |
Complete
our Phase I clinical study of Lovaxin C to document the practicability
of
using this agent safely in the therapeutic treatment of cervical
cancer
;
|
· |
Initiate
our Phase II clinical study of Lovaxin C in the therapeutic treatment
of
cancers;
|
· |
Initiate
a Phase I/II clinical study of Lovaxin P in the therapeutic treatment
of
prostate cancer;
|
· |
Initiate
a Phase I/II clinical study of Lovaxin B in the therapeutic treatment
of
breast cancer;
|
· |
Continue
the pre-clinical development of our product candidates, as well as
continue research to expand our technology platform;
and
|
· |
Initiate
strategic and development collaborations with biotechnology and
pharmaceutical companies.
|
1. |
Innate
immunity: the non-specific stimulation of all aspects of the immune
system
in response to a bacterial
infection.
|
2. |
Exogenous
pathway: the stimulation of helper T cell function that stimulates
and
supports cytotoxic T cell function.
|
3. |
Endogenous
pathway: the direct stimulation of cytotoxic T cells in an amplified
fashion due accelerated antigen fragment
generation.
|
4. |
Lack
of Tregs: the stimulation of the facilitory aspects of an anti-tumoral
immune response without the inhibitory aspects as a result of the
LLO
antigen fusion protein.
|
5. |
Supportive
local tumor environment: the adjuvant stimulation of various chemical
factors within the tumor that support the anti-tumor effect of the
immune
system stimulated by the effective delivery of the specific
antigen.
|
|
Patents
|
|
|
|
U.S.
Patent No. 6,051,237, issued April 18, 2000. Patent Application No.
08/336,372, filed November 8, 1994 for “Specific Immunotherapy of Cancer
Using a Live Recombinant Bacterial Vaccine Vector.” Filed November 8,
1994. Expires April 18, 2017.
|
|
|
|
U.S.
Patent No. 6,565,852, issued May 20, 2003, Paterson, et al., CIP
Patent
Application No. 09/535,212, filed March 27, 2000 for “Specific
Immunotherapy of Cancer Using a Live Recombinant Bacterial Vaccine
Vector.” Filed March 27, 2000. Expires November 8,
2014.
|
|
|
|
U.S.
Patent No. 6,099,848, issued August 8, 2000, Frankel et al., Patent
Application No. 08/972,902 “Immunogenic Compositions Comprising DAL/DAT
Double-Mutant, Auxotrophic, Attenuated Strains of Listeria and Their
Methods of Use.” Filed November 18, 1997. Expires November 18,
2017.
|
|
|
|
U.S.
Patent No. 6,504,020, issued January 7, 2003, Frankel et al. Divisional
Application No. 09/520,207 “Isolated Nucleic Acids Comprising Listeria DAL
And DAT Genes”. Filed March 7, 2000, Expires November 18,
2017.
|
|
|
|
U.S.
Patent No. 6,635,749, issued October 21, 2003, Frankel, et
al. Divisional U.S. Patent Application No. 10/136,253 for “Isolated
Nucleic Acids Comprising Listeria DAL and DAT Genes.” Filed May 1,
2002, Filed May 1, 2022. Expires November 18,
2017.
|
|
|
|
U.S.
Patent No. 5,830,702, issued November 3, 1998, Portnoy, et al. Patent
Application No. 08/366,477, filed December 30, 1994 for “Live, Recombinant
Listeria SSP Vaccines and Productions of Cytotoxic T Cell Response” Filed
December 30, 1997. Expires November 3, 2015.
|
|
|
|
US
Patent No. 6,767,542 issued July 27, 2004, Paterson, et al. Patent
Application No. 09/735,450 for “Compositions and Methods for Enhancing
Immunogenicity of Antigens.” Filed December 13, 2000. Expires March 29,
2020.
|
|
|
|
US
Patent No. 6,855,320 issued February 15, 2005, Paterson. Patent
Application No. 09/537,642 for “Fusion of Non-Hemolytic, Truncated Form of
Listeriolysin o to Antigens to Enhance Immunogenicity.” Filed March 29,
2000. Expires March 29, 2020.
|
|
|
|
US
Patent No. 7,135,188 issued November 14, 2006, Paterson, Patent
Application No. 10/441,851 for “Methods and compositions for immunotherapy
of cancer.” Filed May 20, 2003. Expires November 8,
2014.
|
|
U.S.
Patent Application No. 10/239,703 for “Compositions and Methods for
Enhancing Immunogenicity of Antigens.” Filed September 24, 2002, Paterson,
et al.
|
|
|
|
U.S.
Patent Application No. 10/660,194, “Immunogenic Compositions Comprising
DAL/DAT Double Mutant, Auxotrophic Attenuated Strains Of Listeria
And
Their Methods Of Use,” Filed September 11, 2003, Frankel et
al.
|
|
|
|
U.S.
Patent Application No. 10/835,662, “Compositions and methods for enhancing
the immunogenicity of antigens,” Filed April 30, 2004, Paterson et
al.
|
|
|
|
U.S.
Patent Application No. 10/949,667, “Methods and compositions for
immunotherapy of cancer,” Filed September 24, 2004, Paterson et
al.
|
|
|
|
U.S.
Patent Application No. 11/223,945, “Listeria-based and LLO-based
vaccines,” Filed September 13, 2005, Paterson et al.
|
|
|
|
U.S.
Patent Application No. 11/376,564, “Compositions and methods for enhancing
the immunogenicity of antigens,” Filed March 16, 2006, Paterson et
al.
|
|
|
|
U.S.
Patent Application No. 11/376,572, “Compositions and methods for enhancing
the immunogenicity of antigens,” Filed March 16, 2006, Paterson et
al.
|
|
Patents
|
|
|
|
Australian
Patent No. 730296, Patent Application No. 14108/99 for “Bacterial Vaccines
Comprising Auxotrophic, Attenuated Strains of Listeria Expressing
Heterologous Antigens.” Filed May 18, 2000. Frankel, et al. Expires
November 13, 2018.
|
|
|
|
Canadian
Patent Application No. 2,309,790 for “Bacterial Vaccines Comprising
Auxotrophic, Attenuated Strains of Listeria Expressing Heterologous
Antigens.” Filed May 18, 2000, Frankel, et al.
|
|
|
|
Patent
Applications
|
|
|
|
Canadian
Patent Application No. 2,204,666, for “Specific Immunotherapy of Cancer
Using a Live Recombinant Bacterial Vaccine Vector”. Filed November 3,
1995, Paterson et al.
|
|
|
|
Canadian
Patent Application No. 2,404,164 for “Compositions and Methods for
Enhancing Immunogenicity of Antigens.” Filed March 26, 2001. Paterson, et
al.
|
European
Patent Application No. 01928324.1 for “Compositions and Methods for
Enhancing Immunogenicity of Antigens.” Filed March 26, 2001. Paterson, et
al.
|
|
European
Patent Application No. 98957980.0 for “Bacterial Vaccines Comprising
Auxotrophic, Attenuated Strains of Listeria Expressing Heterologous
Antigens.” Filed May 18, 2000, Frankel, et al.
|
|
Israel
Patent Application No. 151942 for “Compositions and Methods for Enhancing
Immunogenicity of Antigens.” Filed March 26, 2001, Paterson, et
al.
|
|
|
|
Japanese
Patent Application No. 515534/96, filed November 3, 1995 for “Specific
Immunotherapy of Cancer Using a Live Recombinant Bacterial Vaccine
Vector”, Paterson, et al.
|
|
|
|
Japanese
Patent Application No. 2001-570290 for “Compositions and Methods for
Enhancing Immunogenicity of Antigens.” Filed March 26, 2001, Paterson, et
al.
|
|
|
|
PCT
International Patent Application No. PCT/US06/44681 for “Methods For
Producing, Growing, And Preserving Listeria
Vaccine Vectors.” Filed November 16, 2006, Rothman, et
al.
|
·
|
who
must be recruited as qualified
participants;
|
·
|
how
often to administer the drug; and
|
·
|
what
tests to perform on the
participants.
|
Name
|
|
Age
|
|
Position
|
||
|
|
|
|
|
||
Thomas
Moore (3)
|
|
56
|
|
Chief
Executive Officer and Chairman of the Board of
Directors
|
||
|
|
|
|
|
||
Dr.
James Patton (1)
|
|
48
|
|
Director
|
||
|
|
|
|
|
||
Roni
A. Appel (3) (4) (5)
|
|
39
|
|
Director
|
||
|
|
|
|
|
||
Dr.
Thomas McKearn (2)
|
|
56
|
|
Director
|
||
|
|
|
|
|
||
Richard
Berman (1) (2) (4)
|
|
63
|
|
Director
|
||
|
|
|
|
|
||
Martin
R. Wade III
|
|
56
|
|
Director
|
||
|
|
|
|
|
||
Dr.
John Rothman
|
|
59
|
|
Vice
President, Clinical Development
|
||
|
|
|
|
|
||
Fredrick
D. Cobb
|
|
60
|
|
Vice
President, Finance and Principal Financial
Officer
|
(1)
|
Member
of the Audit Committee.
|
||||
(2)
|
Member
of the Compensation Committee.
|
||||
(3)
|
Member
of the Nominating and Corporate Governance Committee.
|
||||
(4)
|
Member
of the Finance Committee
|
||||
(5)
|
Mr.
Appel resigned as President, Chief Executive Officer on December
15,
2006
|
|
·
|
reviewing
the results of the audit engagement with the independent registered
public
accounting firm;
|
|
·
|
identifying
irregularities in the management of our business in consultation
with our
independent accountants, and suggesting an appropriate course of
action;
|
|
·
|
reviewing
the adequacy, scope, and results of the internal accounting controls
and
procedures;
|
|
·
|
reviewing
the degree of independence of the auditors, as well as the nature
and
scope of our relationship with our independent registered public
accounting firm;
|
|
·
|
reviewing
the auditors’ fees; and
|
|
·
|
recommending
the engagement of auditors to the full Board of
Directors.
|
|
·
|
identifying
and recommending to the Board of Directors individuals qualified
to serve
as directors of the Company and on the committees of the
board;
|
|
·
|
advising
the Board with respect to matters of board composition, procedures
and
committees;
|
|
·
|
developing
and recommending to the Board a set of corporate governance principles
applicable to us and overseeing corporate governance matters generally
including review of possible conflicts and transactions with persons
affiliated with Directors or members of management; and
|
|
·
|
overseeing
the annual evaluation of the Board and our
management.
|
|
·
|
honest
and ethical conduct, including the ethical handling of actual or
apparent
conflicts of interest between personal and professional
relationships;
|
|
·
|
full,
fair, accurate, timely and understandable disclosure in reports and
documents that we file with, or submit to, the SEC and in other public
communications made by us;
|
|
·
|
compliance
with applicable governmental laws, rules and
regulations;
|
|
·
|
the
prompt internal reporting of violations of the code to an appropriate
person or persons identified in our code of ethics; and
|
|
·
|
accountability
for adherence to our code of
ethics.
|
Annual
Compensation
|
Long
Term Compensation
Awards
|
|||||||||||||||
Name
And Principal Position
|
Year
|
Salary($)
|
|
Bonus
($)
|
|
Other**
|
Securities
Underlying Options
|
|||||||||
Thomas
Moore*
|
2006
|
—
|
—
|
—
|
—
|
|||||||||||
|
||||||||||||||||
Roni
Appel(1)
|
2006
|
$
|
243,042
|
(2)
|
$
|
320,000
|
(3)
|
$
|
53,774
|
(5)
|
1,173,179
|
(2)
|
||||
President,
CEO, Secretary, Chief
|
2005
|
$
|
139,250
|
(2)
|
$
|
35,000
|
(4)
|
1,114,344
|
(2)
|
|||||||
Financial
Officer, and Director
|
2004
|
$
|
50,000
|
(4)
|
35,218
|
|||||||||||
|
||||||||||||||||
J.
Todd Derbin(6)
|
2006
|
$
|
73,200
|
$
|
3,850
|
(7)
|
$
|
4,043
|
(8)
|
|||||||
President,
Chief Executive Officer,
|
2005
|
$
|
225,000
|
$
|
45,000
|
(7)
|
684,473
|
(9)
|
||||||||
and
Director
|
2004
|
$
|
125,000
|
$
|
60,000
|
(7)
|
—
|
|||||||||
|
||||||||||||||||
Dr.
John Rothman
|
2006
|
$
|
201,538
|
(10)
|
$
|
10,000
|
$
|
23,320
|
(8)(17)
|
150,000
|
(11)
|
|||||
Vice
President, Clinical
|
2005
|
$
|
141,667
|
(13)
|
—
|
360,000
|
(12)
|
|||||||||
Development
|
—
|
|||||||||||||||
|
||||||||||||||||
Fredrick
D. Cobb
|
2006
|
$
|
93,195
|
(14)
|
—
|
—
|
300,000
|
(15)
|
||||||||
Vice
President Finance
|
||||||||||||||||
|
||||||||||||||||
Dr.
Vafa Shahabi
|
2006
|
$
|
111,370
|
(14)
|
—
|
$
|
3,288
|
(17)
|
250,000
|
(18)
|
||||||
2005
|
$
|
82,190
|
(16)
|
—
|
150,000
|
(19)
|
(1).
|
Mr.
Appel served as consultant (LVEP) in the capacity of Secretary and
CFO in
2004 and 2005. He was appointed President and CEO on January 1, 2006.
He
resigned his position of President, CEO and Secretary on December
15, 2006
and resigned from his CFO position on September 7, 2006. Pursuant
to the
consulting agreement, dated as of January 19, 2005, and amended on
April
15, 2005, October 31, 2005, and December 15, 2006, LVEP is to provide
various financial and strategic consulting services to
us.
|
(2).
|
Mr.
Appel’s compensation in 2005 and 2006 was paid through our consulting
agreement with LVEP. The option awards were the result of grants
of
options at $0.217 per share in fiscal 2006 and 0.287 per share in
fiscal
2005.
|
(3).
|
Represents
2005 bonus of $70,000 ($20,000 cash and $50,000 in stock) paid in
2006 and
a 2006 bonus of $250,000 paid in cash on January 2, 2007. It does
not
include the 1,000,000 shares of common stock awarded on December
15, 2006
and issued on January 3, 2007
|
(4). |
Represents
consulting fees of $50,000 in the ten months ended October 31, 2004
paid
to Carmel Ventures, Inc., of which he is a principal stockholder.
He
assigned $35,000 of such fees to Mr. Scott
Flamm.
|
(5). |
Represents
reimbursements for payroll taxes, healthcare cost, workers compensation,
401K match and employment related
cost.
|
(6). |
Mr.
Derbin resigned as President and CEO on December 31, 2005 and as
a
Director on September 7, 2006.
|
(7). |
In
determining Mr. Derbin’s bonus, the Board acted in part on a discretionary
basis. His 2004 bonus of $45,000 was paid in 2005 by issuance of
156,794
shares of the Company’s Common Stock based on $0.287 per share. His 2005
bonus of $3,850 was paid in 2006 by issuance of 17,422 shares of
Company’s
Common Stock based on $0.22 per
share
|
(8). |
Health
care insurance.
|
(9). |
Pursuant
to an employment agreement, 928,441 of options granted in 2003 had
vested,
and 427,796 of the 684,473 options granted in 2005 had vested on
termination of the agreement on December 31, 2005. The balance of
the
options were cancelled.
|
(10). |
Included
in his base compensation is $25,000 payable in
stock.
|
(11). |
Options
granted at $0.26 share.
|
(12). |
Options
granted at $0.287 per share.
|
(13). |
Dr.
Rothman entered employment on March 7, 2005; included in his salary
is the
issuance of 80,000 shares of common stock valued at
$14,800.
|
(14). |
Included
in base compensation is $6,667 payable in
stock.
|
(15). |
Includes
150,000 options at $0.26 per share as part of his employment agreement
and
150,000 options at $0.16 per share granted on September 21,
2006.
|
(16). |
Dr.
Shahabi entered employment on March 1, 2005; included in her compensation
is 80,000 shares of common stock valued at
$14,800.
|
(17). |
Represents
401(k) match.
|
(18). |
Represents
100,000 options granted at $0.24 per share and 150,000 options granted
at
$0.16 per share.
|
(19). |
Represents
150,000 options granted at $0.287 per share as part of her employment
agreement.
|
Name
|
Fiscal
Year
|
|
Number
Of Securities Underlying Options Granted
|
|
Percent
Of Total Options Granted To Employees In Fiscal
Period
|
|
Exercise Price
|
|
Expiration Date
|
|
Potential
Realizable Value At Assumed Annual Rates of Stock Price Appreciation
For
Option
Term($)
|
|||||||||||
|
|
|
|
|
|
5%
|
10%
|
|||||||||||||||
Roni
Appel
|
2006
|
1,173,179
|
(1)
|
53
|
%
|
$
|
0.217
|
12/31/2015
|
$
|
160,113
|
$
|
405,809
|
||||||||||
2005
|
1,114,344
|
(2)
|
34
|
%
|
$
|
0.29
|
3/31/2015
|
$
|
201,165
|
$
|
509,788
|
|||||||||||
2004
|
35,218
|
27
|
%
|
$
|
0.35
|
11/1/2012
|
$
|
7,753
|
$
|
19,648
|
||||||||||||
|
||||||||||||||||||||||
J.
Todd Derbin
|
2006
|
-
|
(3)
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||
2005
|
427,796
|
(4)
|
13
|
%
|
$
|
0.29
|
2/1/2015
|
$
|
78,034
|
$
|
197,753
|
|||||||||||
2004
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||
|
||||||||||||||||||||||
Dr.
John Rothman
|
2006
|
150,000
|
7
|
%
|
$
|
.026
|
3/29/2016
|
$
|
24,528
|
$
|
62,167
|
|||||||||||
2005
|
360,000
|
11
|
%
|
$
|
0.29
|
3/1/2015
|
$
|
64,988
|
$
|
164,692
|
||||||||||||
Fredrick
D. Cobb
|
2006
|
150,000
|
7
|
%
|
$
|
0.26
|
2/20/2016
|
$
|
19,811
|
$
|
50,212
|
|||||||||||
2006
|
150,000
|
7
|
%
|
$
|
0.16
|
9/20/2016
|
$
|
15,094
|
$
|
38,257
|
||||||||||||
|
||||||||||||||||||||||
Dr.
Vafa Shahabi
|
2006
|
100,000
|
5
|
%
|
$
|
0.24
|
7/1/2016
|
$
|
15,094
|
$
|
38,257
|
|||||||||||
2006
|
150,000
|
7
|
%
|
$
|
0.16
|
9/20/2016
|
$
|
15,094
|
$
|
38,257
|
||||||||||||
2005
|
150,000
|
5
|
%
|
$
|
0.29
|
3/1/2015
|
$
|
22,641
|
$
|
57,385
|
(1).
|
Reflects
a grant in January 2006 post 2005 fiscal year end increasing the
number of
options to 5% of the outstanding shares and options of the Company
as of
December 31, 2005.
|
(2).
|
Reflects
the grant in April 2005 equal to 3% of the outstanding shares and
other
options made.
|
(3). |
As
of January 1, 2007, 1,356,237 previously granted and vested but
unexercised options were forfeited.
|
(4).
|
684,473
options were granted to Mr. Derbin under the 2005 option plan of
which
256,677 options were surrendered pursuant to a termination of his
employment agreement.
|
Shares
Acquired On
|
Number
Of Securities
Underlying
Unexercised Options
At
Fiscal
Year-End (1)
|
Value
Of Unexercised
In-The-Money
Options
At
Fiscal Year-End($) (2)
|
|||||||||||||||||
Name
|
Year
|
Exercise
|
Exercisable
|
Unexercisable
|
Exercisable
|
Unexercisable
|
|||||||||||||
Roni
Appel (3)
|
2006
|
0
|
997,045
|
1,382,045
|
$
|
-
|
$
|
-
|
|||||||||||
2005
|
0
|
254,075
|
951,835
|
$
|
-
|
$
|
-
|
||||||||||||
2004
|
0
|
91,567
|
-
|
$
|
-
|
$
|
-
|
||||||||||||
|
|
|
|
|
|
|
|||||||||||||
J.
Todd Derbin
|
2006
|
0
|
1,356,236
|
(4)
|
-
|
$
|
4,445
|
-
|
|||||||||||
2005
|
0
|
1,273,135
|
83,101
|
$
|
47,033
|
$
|
4,017
|
||||||||||||
2004
|
0
|
586,382
|
586,382
|
$
|
53,947
|
$
|
51,015
|
||||||||||||
|
|
|
|
|
|
|
|||||||||||||
Dr.
John Rothman
|
2006
|
0
|
135,000
|
375,000
|
$
|
-
|
$
|
-
|
|||||||||||
2005
|
0
|
-
|
360,000
|
$
|
-
|
$
|
-
|
||||||||||||
|
|
|
|
|
|
|
|||||||||||||
Fredrick
D. Cobb
|
2006
|
0
|
-
|
300,000
|
$
|
-
|
$
|
6,000
|
|||||||||||
|
|
|
|
|
|
||||||||||||||
Dr.
Vafa Shahabi
|
2006
|
0
|
56,250
|
343,750
|
$
|
-
|
$
|
6,000
|
|||||||||||
2005
|
0
|
150,000
|
$
|
-
|
$
|
-
|
(1).
|
Certain
of the options are immediately exercisable of the date of grant but
any
shares purchased are subject to repurchase by us at the original
exercise
price paid per share if the optionee ceases service with us before
vesting
in such shares.
|
(2).
|
Based
respectively on the closing price of $0.20 per share as of October
31,
2006, the highest-bid price of $0.25 per share on October 31, 2005
quoted
on the OTC:BB, and the fair market value of October 31, 2004 of $0.195
per
share determined by the Board of Directors to equal our 2004 Private
Placement price per share less the exercise price payable for such
shares..
|
(3).
|
As
of December 15, 2006 all Mr. Appel’s options became fully vested and are
exercisable until the end of his ten year option
term.
|
(4).
|
Forfeited
as of January 1, 2007.
|
·
|
each
person who is known by us to be the owner of record or beneficial
owner of
more than 5% of our outstanding Common Stock and each person who
owns less
than 5% but is significant nonetheless;
|
·
|
each
of our directors;
|
·
|
our
chief executive officer and each of our executive officers;
and
|
·
|
all
of our directors and executive officers as a
group.
|
Number
of Shares of
Registrant
Common Stock
Beneficially
Owned as of
October
31, 2006
|
Percentage
of Class
Beneficially
Owned
|
||||||
|
|
|
|||||
J.
Todd Derbin(1)
|
2,195,033
|
(3)
|
5.2
|
%
|
|||
Roni
Appel(1)(2)
|
6,355,378
|
(4)
|
14.6
|
%
|
|||
Richard
Berman(1)
|
476,000
|
(5)
|
1.2
|
%
|
|||
Dr.
James Patton(1)
|
2,893,829
|
(6)
|
7.2
|
%
|
|||
Dr.
Thomas McKearn(1)
|
524,876
|
(7)
|
1.3
|
%
|
|||
Martin
R. Wade III(1)
|
150,000
|
(8)
|
0.4
|
%
|
|||
Dr.
John Rothman(2)
|
724,732
|
(9)
|
1.8
|
%
|
|||
Fredrick
D. Cobb(2)
|
349,641
|
(10)
|
0.9
|
%
|
|||
Estate
of Scott Flamm(1)
|
2,838,664
|
(11)
|
7.0
|
%
|
|||
The
Trustees of the University of Pennsylvania
Center
for Technology
Transfer,
University of Pennsylvania
3160
Chestnut Street, Suite 200
Philadelphia,
PA 19104-6283
|
6,339,282
|
15.8
|
%
|
||||
Nathan
Low
c/o
Sunrise Securities Corp.
641
Lexington Ave-25fl
New
York, NY 10022
|
2,728,526
|
(12)
|
6.8
|
%
|
|||
Amnon
Mandelbaum
c/o
Sunrise Securities Corp.
641
Lexington Ave-25fl
New
York, NY 10022
|
2,315,018
|
(13)
|
5.8
|
%
|
|||
Emigrant
Capital Corp.
6
East 43 Street, 8th Fl.
New
York, NY 10017
|
2,011,950
|
(14)
|
5.0
|
%
|
|||
Harvest
Advaxis LLC
30052
Aventura, Suite C
Rancho
Santa Margarita, CA 92688
|
2,011,950
|
(15)
|
4.8
|
%
|
|||
Cornell
Capital Partners LP
101
Hudson Street, Suite 3700
Jersey
City, New Jersey 07302
|
2,011,950
|
(16)
|
4.8
|
%
|
|||
All
Directors and Officers as a Group (9 people)
|
16,508,153
|
(17)
|
41.0
|
%
|
(1)
|
Director,
except for Mr. Derbin who served as a Director until his resignation
on
September 6, 2006 and Mr. Flamm who served as a Director until his
death
in January 2006
|
(2)
|
Officer,
except Mr. Appel who ceased to be an officer on December 15,
2006
|
(3)
|
Reflects
469,982 shares, 1,356,236 options and 368,815 warrants to purchase
shares.
Mr. Derbin resigned from the Board effective September 6, 2006 and
the
1,356,236 unexercised options expired on January 1,
2007.
|
(4)
|
Represents
2,976,288 shares and 2,379,090 options owned by Mr. Appel but does
not
reflect: (i) 486,470 warrants because such warrants are not exercisable
within 60 days due to the restriction that they are unexercisable
if after
exercise he would beneficially own more than 4.99% of the outstanding
shares, and (ii) 1,000,000 shares issued in December 2006 pursuant
to the
Third Amended LVEP Consulting agreement dated December 15,
2006.
|
Reflects
52,000 shares issued, 24,000 shares earned and 400,000
options.
|
|
(6)
|
Reflects
2,820,576 shares and 73,253 options but does not reflect 184,267
warrants
because of the restriction that they are unexercisable if after exercise
he would beneficially own more than 4.99% of the outstanding
shares.
|
(7)
|
Reflects
179,290 shares, 232,763 options and 112,823 warrants.
|
(8)
|
Reflects
options
|
(9)
|
Reflects
80,000 shares issued, 134,732 shares earned and 510,000
options
|
(10)
|
Reflects
49,641 shares earned and 300,000 options
|
(11)
|
Reflects
125,772 shares and 91,567 options owned by the estate and 2,621,325
shares
beneficially owned by Flamm Family Partners LP, of which the estate
is a
partner but does not reflect: (i) 202,097 warrants because of the
restriction that they are unexercisable if after exercise he would
beneficially own more than 4.99% of the outstanding shares, and (ii)
98,664 shares owned by a family member.
|
(12)
|
Reflects
1,124,253 shares owned by Mr. Low, 1,220,998 shares held by Sunrise
Equity
Partners (“SEP”) and 383,275 shares held by Sunrise Securities Corp., of
which Mr. Low is sole stockholder and director. It does not include
761,971 warrants held by Mr. Low and 1,742,160 warrants held by SEP
because of the restriction that they are unexercisable if after exercise
he would beneficially own more than 4.99% of the outstanding shares.
Mr.
Low is a manager of LC, the general partner of SEP, and as such,
is deemed
to have beneficial ownership of the securities held by SEP. However,
Mr.
Low disclaims beneficial interest in such shares except to the extent
of
his pecuniary interest therein. It also does not include 636,370
warrants
owned by Mr. Mandelbaum and 348,432 warrants held by Sunrise Securities
Corp., because of the similar 4.9% restriction and 71,497 shares
held by
Sunrise Foundation Trust, a charitable trust of which Mr. Low is
a
trustee. Mr. Low disclaims beneficial ownership of shares held by
Sunrise
Foundation Trust.
|
(13)
|
Reflects
1,094,020 shares owned by Mr. Mandelbaum and 1,220,998 shares held
by SEP,
but does not include 1,742,160 warrants held by SEP or 636,370 warrants
held by Mr. Mendelbaum because of the restriction that they are
unexercisable if after exercise he would beneficially own more than
4.99%
of the outstanding shares.
Mr. Mandelbaum is a manager of LC, the general partner of SEP, and
as
such, is deemed to have beneficial ownership of the securities held
by
SEP. However, Mr. Mandelbaum disclaims beneficial interest in such
shares
except to the extent of his pecuniary interest therein.
|
(14)
|
Reflects
1,777,003 shares and 234,947 warrants, but does not include 1,507,213
warrants because of the restriction that they are unexercisable if
after
exercise he would beneficially own more than 4.99% of the outstanding
shares, under current circumstances. Mr. Howard Milstein is the Chairman
and CEO and Mr. John Hart is the President of Emigrant.
|
(15)
|
Reflects
2,011,950 warrants but does not reflect 1,820,803 warrants because
of the
restriction that they are unexercisable if after exercise he would
beneficially own more than 4.99% of the outstanding shares. Mr. Robert
Harvey is the manager of Harvest Advaxis LLC.
|
(16)
|
Reflects
185,874 shares and 1,826,076 warrants but does not include: (i) 1,225,171
shares issued upon conversion of $175,000 principal amount of Debentures
subsequent to October 31, 2006 through February 1, 2007 and (ii)
the
shares issuable upon conversion of the outstanding $2,550,000 principal
amount of Debentures and exercise of 4,500,000 warrants which may
not be
converted or exercised, if Cornell and its affiliates after conversion
or
exercise would own in the aggregate more than 4.9% of the outstanding
voting shares. If the outstanding $2,550,000 of Debenture were otherwise
converted into shares at the average conversion price of $0.159 per
share
it could be converted into 16,037,736 shares. If the market price
decreases or increases the actual number of shares converted can
change
materially from the actual average price above.
|
(17)
|
Includes
an aggregate of 7,182,920 options, warrants and earned-but-not-issued
shares.
|
·
|
12,334,495
shares of common stock issued upon conversion and underlying our
Secured
Convertible Debenture issued to Cornell Capital Partners LP (“Cornell”), a
Selling Stockholder, pursuant to a transaction exempt from registration
under the Act. Up to 31,007,018 additional shares may be offered
by the
Selling Stockholder if the Debentures are converted in whole or in
part at
a price lower than the Fixed Conversion Price of $0.287 per share
(see
“February 2006 Private Placement”);
and
|
·
|
24,130,588
shares of common stock underlying warrants that were issued to Selling
Stockholders pursuant to transactions exempt from registration under
the
Act, including 4,500,000 warrants issued to Cornell in the private
placement of our Debentures.
|
· |
J.
Todd Derbin served as a consultant to the Company until June 30,
2006,
served as our Chief Executive Officer until December 31, 2005 and
our
Chairman of the Board of Directors from January 1, 2006 until September
6,
2006. He has served as a director from November 12, 2004 until September
6, 2006;
|
· |
Roni
Appel served as President and Chief Executive Officer from January
1, 2006
to December 15, 2006, and as our Chief Financial Officer from November
12,
2004 until December 15, 2006, and has served as a director since
November
12, 2004. Carmel Ventures, Inc., of which Mr. Appel is the principal
stockholder, provided consulting services to us from November 1,
2002 to
December 31, 2004; LVEP by which Mr. Appel is employed had paid his
compensation as our officer until December 15,
2006;
|
· |
Scott
Flamm served from November 12, 2004 until his death in January 2006
as a
director of the Company and of LVEP, of which he was a principal
stockholder and an employee, and which provides consulting services
to us.
He was a general partner of Flamm Family Partners,
L.P.;
|
· |
Thomas
McKearn has served as a director since November 12,
2004;
|
· |
Dr.
James Patton has served as a director since November 12, 2004 and
has
served as a consultant to us in the
past;
|
· |
Dr.
Yvonne Paterson has serves as a
consultant;
|
· |
The
Trustees of the University of Pennsylvania own the patents as to
which we
have an exclusive license;
|
· |
Sunrise
Securities Corp. acted as placement agent in the November 2004 Private
Placement. Nathan Low, Amnon Mandelbaum, Marcia Kucher, Derek Caldwell,
Richard Stone and David Goodfriend are all affiliated with or employed
by
Sunrise Securities Corp., the placement agent in that Private
Placement. Sunrise
Equity Partners, LP and Sunrise Foundation Trust are also affiliates
of
Sunrise Securities Corp;
|
· |
Dr.
David Filer is a consultant to us and provided consulting services
to the
Sunrise Securities Corp; and
|
· |
Reitler
Brown Holdings, LLC is an affiliate of Reitler Brown & Rosenblatt LLC,
counsel to the Company.
|
Name
|
Total
Shares
Owned
as of March 31,
2007
|
Shares
Registered
|
%
Before Offering***
|
%
After Offering***
|
|||||||||
Adele
Pfenninger
12
Spring Brook Road
Annandale,
NJ 08801
|
79,600
(1
|
)
|
35,395
(1)(A
|
)
|
0.18
|
%
|
0.10
|
%
|
|||||
AI
International Corporate (a) Holdings, Ltd.
c/o
FCIM Corp.
1
Rockefeller Plaza, Suite 1730
New
York, NY 10020
|
174,216
(2
|
)
|
87,108
(2)(A
|
)
|
0.
39
|
%
|
0.19
|
%
|
|||||
Alan
Gelband Company (b)
Defined
Contribution Pension Plan and Trust
30
Lincoln Plaza
New
York, NY 10023
|
174,216
(3
|
)
|
174,216
(3
|
)
|
0.39
|
%
|
**
|
||||||
Alan
Kestenbaum
18
Clover Drive
Great
Neck, NY 11021
|
177,700
(3)(A
|
)
|
174,216
(3
|
)
|
0.39
|
%
|
0.01
|
%
|
|||||
Beretz
Family Partners LP (c)
48
South Drive
Great
Neck, NY 11021
|
174,216
(2
|
)
|
87,108
(2)(A
|
)
|
0.39
|
%
|
0.19
|
%
|
|||||
Bridges
& Pipes, LLC (d)
830
Third Avenue
14th
Floor
New
York, NY 10022
|
696,864
(4
|
)
|
696,864
(4
|
)
|
1.53
|
%
|
**
|
||||||
Bruce
Fogel
218
Everglade Avenue
Palm
Beach, FL 33480
|
174,216
(3
|
)
|
174,216
(3
|
)
|
0.39
|
%
|
**
|
||||||
C.
Leonard Gordon
551
Fifth Avenue
New
York, NY 10176
|
174,216
(2
|
)
|
87,108
(2)(A
|
)
|
0.39
|
%
|
0.19
|
%
|
|||||
Carmel
Ventures, Inc* (e)
22
Ruth Lane
Demarest,
NJ 07627
|
505,008
(5
|
)
|
355,528
(5)(A
|
)
|
1.11
|
%
|
0.33
|
%
|
|||||
Catherine
Janus
4817
Creak Dr.
Western
Spring, IL 60558
|
65,949
(6
|
)
|
52,883
(6)(A
|
)
|
0.15
|
%
|
0.03
|
%
|
|||||
Chaim
Cymerman
c/o
Tomer Cymerman
Paamoni
10, Apt. 19
Bavli,
Tel Aviv
Israel
|
109,074
(7
|
)
|
87,297
(7)(A
|
)
|
0.24
|
%
|
0.05
|
%
|
Name
|
Total
Shares
Owned
as of
March
31,
2007
|
Shares
Registered
|
%
Before Offering***
|
%
After Offering***
|
|||||||||
Charles
Kwon
834
Monror Street
Evanston,
Il 60202
|
491,233
(8
|
)
|
211,063
(8)(A
|
)
|
1.09
|
%
|
0.62
|
%
|
|||||
Cranshire
Capital, LP (f)
666
Dundee Road
Suite
1901
Northbrook,
IL 60602
|
522,648
(9
|
)
|
522,648
(9
|
)
|
1.15
|
%
|
**
|
||||||
Crestwood
Holdings, LLC (g)
c/o
Ran Nizan
109
Boulevard Drive
Danbury,
CT 06810
|
360,253
(10
|
)
|
93,046
(10)(A
|
)
|
0.80
|
%
|
0.59
|
%
|
|||||
David
Stone
228
St. Charles Avenue,
Suite
1024
New
Orleans, LA 70130
|
348,432
(10)(B
|
)
|
174,216
(10)(C
|
)
|
0.77
|
%
|
0.39
|
%
|
|||||
David
Tendler
401
East 60th
Street
New
York, NY 10022
|
696,864
(11
|
)
|
348,432
(11)(A
|
)
|
1.54
|
%
|
0.77
|
%
|
|||||
Design
Investments, LTD (h)
9
Tanbark Circuit, Suite 1442
Werrington
Downs
NSW
2747
Australia
|
348,432
(11)(A
|
)
|
348,432
(11)(A
|
)
|
0.77
|
%
|
**
|
||||||
Emigrant
Capital Corp. (i)
6
East 43rd
Street, 8th
Floor
New
York, NY 10017
|
3,519,163(12
|
)
|
1,742,160
(12)(A
|
)
|
7.55
|
%
|
3.81
|
%
|
|||||
Eugene
Mancino
Blau
Mancino
12
Roszel Road, Suite C-101
Princeton,
NJ 08540
|
355,099
(13
|
)
|
106,272
(13)(A
|
)
|
0.79
|
%
|
0.55
|
%
|
|||||
Fawdon
Investments Ltd. (j)
4
Ibn Shaprut Street
Jerusalem,
Israel 92478
|
1,407,665
(4)(A
|
)
|
696,864
(4
|
)
|
3.09
|
%
|
1.56
|
%
|
|||||
Flamm
Family Partners, LP.* (k)
c/o
Scott Flamm
70
West Road
Short
Hills, NJ 07078
|
2,666,466
(14
|
)
|
36,231
(14)(A
|
)
|
5.94
|
%
|
5.86
|
%
|
Name
|
Total
Shares
Owned
as of
March
31,
2007
|
Shares
Registered
|
%
Before Offering***
|
%
After Offering***
|
|||||||||
Fred
Berdon Co, LP (l)
717
Post Road
Suite
105
Scarsdale,
NY 10583
|
348,432
(10)(B
|
)
|
174,216
(10)(C
|
)
|
0.77
|
%
|
0.39
|
%
|
|||||
Gina
Ferarri
36
Stone Run Road
Bedmingter,
NJ 07921
|
79,932
(15
|
)
|
35,511 (15)(A
|
)
|
0.18
|
%
|
0.10
|
%
|
|||||
|
|||||||||||||
Hal
H. Beretz
48
South Drive
Great
Neck, NY 11021
|
522,648
(16
|
)
|
261,324
(16)(A
|
)
|
1.16
|
%
|
0.58
|
%
|
|||||
Howard
Kaye Family Fund (m)
2
Mohican Trail
Scarsdale,
NY 10583
|
261,324
(16)(A
|
)
|
261,324
(16)(A
|
)
|
0.58
|
%
|
**
|
||||||
IRA
FBO / Walter S. Grossman (n) Pershing LLC
Custodian
277
North Ave.
Westport,
CT 06880
|
696,864
(11
|
)
|
348,432
(11)(A
|
)
|
1.55
|
%
|
0.78
|
%
|
|||||
Itai
Portnoi
26
Yakinton St.
Haifa,
Israel 34406
|
157,608
(17
|
)
|
70,093
(17)(A
|
)
|
0.35
|
%
|
0.19
|
%
|
|||||
J.
Todd Derbin*
P.O.
Box 128
Solebury,
PA 18963-0128
|
838,797(18
|
)
|
295,766
(18)(A
|
)
|
1.85
|
%
|
1.20
|
%
|
|||||
James
Patton*
1937
Swedesford
Malvern,
PA 19355
|
3,078,096
(19
|
)
|
2,968,292
(19)(A
|
)
|
6.82
|
%
|
0.24
|
%
|
|||||
|
|||||||||||||
James
Paul
c/o
Fulwider Patton
Howard
Hughes Center
6060
Center Drive, 10th
Floor
Los
Angeles, CA 90045
|
39,215
(20
|
)
|
17,430
(20)(A
|
)
|
|
0.09
|
%
|
0.05
|
%
|
||||
|
|||||||||||||
Jonas
Grossman
59
Huratio St.
New
York, NY 10014
|
80,640
(21
|
)
|
35,865
(21)(A
|
)
|
0.18
|
%
|
0.10
|
%
|
|||||
Kerry
Propper
59
Huratio St.
New
York, NY 10014
|
111,937
(22
|
)
|
89,663
(22)(A
|
)
|
0.25
|
%
|
0.05
|
%
|
Name
|
Total
Shares
Owned
as of
March
31,
2007
|
Shares
Registered
|
%
Before Offering***
|
%
After Offering***
|
|||||||||
Lilian
Flamm
c/o
Scott Flamm
70
West Road
Short
Hills, NJ 07078
|
197,328
(23
|
)
|
98,664 (23
|
)
|
0.44
|
%
|
0.22
|
%
|
|||||
Marilyn
Mendell
1203
River Road,
Apt.
Penthouse 4
Edgewater,
NJ 07020
|
239,500
(24
|
)
|
126,658
(24)(A
|
)
|
0.53
|
%
|
0.25
|
%
|
|||||
Mary
Ann Ryan Francis
1115
Beanaqt Ave.
Seaside
Park, NJ 08752
|
79,161
(25
|
)
|
35,180
(25)(A
|
)
|
0.18
|
%
|
0.10
|
%
|
|||||
Mordechai
Mashiach
8
Shlomzion Hamalka
Haifa,
Israel 34406
|
257,608
(25)(B
|
)
|
70,093
(25)(C
|
)
|
0.57
|
%
|
0.42
|
%
|
|||||
MEA
Group, LLC (o)
145
Talmadge Road
Edison,
NJ 08817
|
351,916
(25)(D
|
)
|
174,216
(25)(E
|
)
|
0.78
|
%
|
0.39
|
%
|
|||||
Peggy
Fern
1548
Herlong Court
Rock
Hill, SC 29732
|
79,712
(26
|
)
|
35,401
(26)(A
|
)
|
0.18
|
%
|
0.10
|
%
|
|||||
Penn
Footware Retirement Trust (q)
Line
& Grove Streets
PO
Box 87
Nanticoke,
PA 18634
|
174,216
(3
|
)
|
174,216
(3
|
)
|
0.39
|
%
|
**
|
||||||
Roni
Appel*
16
Sunset Road
Demarest,
NJ 07627
|
6,336,840(27
|
)
|
2,936,272
(27)(A
|
)
|
13.42
|
%
|
7.20
|
%
|
|||||
RP
Capital, LLC (r)
10900
Wilshire Blvd., Suite 500
Los
Angeles, CA 90024
|
87,108
(27)(B
|
)
|
87,108
(27)(B
|
)
|
0.19
|
%
|
**
|
||||||
Shai
Stern
43
Maple Avenue
Cedarhurst,
NY 11516
|
87,108
(27)(B
|
)
|
87,108
(27)(B
|
)
|
0.19
|
%
|
**
|
Name
|
Total
Shares
Owned
as of
March
31,
2007
|
Shares
Registered
|
%
Before Offering***
|
%
After Offering***
|
|||||||||
Scott
Flamm*
70
West Road
Short
Hills, NJ 07078
|
374,295
(28
|
)
|
125,772
(28)(A
|
)
|
0.83
|
%
|
0.55
|
%
|
|||||
SRG
Capital, LLC (s)
120
Broadway, 40th
Floor
New
York, NY 10271
|
348,432
(11)(A
|
)
|
348,432
(11)(A
|
)
|
0.77
|
%
|
**
|
||||||
Sunrise
Equity Partners, LP (t)
641
Lexington Avenue, 25th
Floor
New
York, NY 10022
|
2,838,158(28)(B
|
)
|
1,742,160
(28)(C
|
)
|
6.09
|
%
|
2.35
|
%
|
|||||
Thomas
McKearn*
6040
Lower Mountain Road
New
Hope, PA 18938
|
424,876
(29
|
)
|
90,549
(29)(A
|
)
|
0.94
|
%
|
0.74
|
%
|
|||||
Titan
Capital Management, LLC (u)
(TCMP3
Partners)
7
Centure Drive, Suite 201
Parsippany,
NJ 07054
|
348,432
(11)(A
|
)
|
348,432
(11)(A
|
)
|
0.77
|
%
|
**
|
||||||
The
Trustees of the University
of Pennsylvania
Center
for Technology Transfer University
of Pennsylvania
3160
Chestnut Street, Suite 200
Philadelphia,
PA 19104-6283
|
6,339,282
|
6,339,282
|
14.13
|
%
|
0.00
|
%
|
|||||||
Yair
Talmor
517
Old Chappaqua Road
Briarcliff
Manor, NY 10510
|
174,216
(2
|
)
|
87,108
(2)(A
|
)
|
0.39
|
%
|
0.19
|
%
|
|||||
Yoav
Millet
950
Third Avenue
New
York, NY 10022
|
175,958
(2)(B
|
)
|
87,108 (2)(A
|
)
|
0.39
|
%
|
0.20
|
%
|
Name
|
Total
Shares
Owned
as of
March
31,
2007
|
Shares
Registered
|
%
Before Offering***
|
%
After Offering***
|
|||||||||
Amnon
Mandelbaum*
c/o
Sunrise Securities Corp.
641
Lexington Avenue, 25th
Floor
New
York, NY 10022
|
1,766,559
(30
|
)
|
672,539
(30)(A
|
)
|
3.88
|
%
|
2.40
|
%
|
|||||
David
Goodfriend*
c/o
Sunrise Securities Corp.
641
Lexington Avenue, 25th
Floor
New
York, NY 10022
|
194,193
(31
|
)
|
74,727
(31)(A
|
)
|
0.43
|
%
|
0.27
|
%
|
|||||
David
Filer*
165
East 32 Street
New
York, NY 10016
|
428,476
(32
|
)
|
285,211
(32)(A
|
)
|
0.95
|
%
|
0.32
|
%
|
|||||
Marcia
Kucher*
c/o
Sunrise Securities Corp.
641
Lexington Avenue, 25th
Floor
New
York, NY 10022
|
2,070
(33
|
)
|
2,070
(33
|
)
|
0.00
|
%
|
**
|
||||||
Nathan
Low*(x)
c/o
Sunrise Securities Corp.
641
Lexington Avenue, 25th
Floor
New
York, NY 10022
|
761,971
(34
|
)
|
761,971
(34
|
)
|
1.67
|
%
|
**
|
||||||
Derek
Caldwell*
c/o
Sunrise Securities Corp.
641
Lexington Avenue, 25th
Floor
New
York, NY 10022
|
76,244
(35
|
)
|
73,170
(35)(A
|
)
|
0.17
|
%
|
0.01
|
%
|
|||||
Sunrise
Securities Corp.* (x)
641
Lexington Avenue, 25th
Floor
New
York, NY 10022
|
731,707
(36
|
)
|
348,432
(36)(A
|
)
|
1.62
|
%
|
0.85
|
%
|
|||||
Richard
Stone*
c/o
Sunrise Securities Corp.
641
Lexington Avenue, 25th
Floor
New
York, NY 10022
|
146,817
(37
|
)
|
146,341
(37)(A
|
)
|
0.33
|
%
|
**
|
||||||
Martin
Trust Agreement
U/A/
DTD 11/05/01
Peter
L. Martin TTE
3757
Webster St, Apt 203
San
Francisco, CA 94123
|
174,216
(3
|
)
|
174,216
(3
|
)
|
0.39
|
%
|
**
|
Name
|
Total
Shares
Owned
as of
March
31,
2007
|
Shares
Registered
|
%
Before Offering***
|
%
After Offering***
|
A.
Heifetz Technologies Ltd. (y)
22
Kanfey Nesharim St
Jerusalem,
Israel 95464
|
351,916
(25)(D
|
)
|
174,216
(25)(E
|
)
|
0.78
|
%
|
0.39
|
%
|
|||||
Balestra
Spectrum Partners, LLC (z)
1185
Avenue of the Americas
32nd
Floor
New
York, NY 10036
|
1,045,296
(38
|
)
|
522,648
(38)(A
|
)
|
2.30
|
%
|
1.15
|
%
|
|||||
Reitler
Brown Holdings, LLC* (aa)
800
Third Avenue, 21st
Floor
New
York, NY 10022
|
60,000
(39
|
)
|
60,000
(39
|
)
|
0.13
|
%
|
0.0
|
%
|
|||||
Leon
Recanata
Levinstein
Tower #21st
23
Menahem Begin Road
Tel
Aviv, Israel
|
487,805
(40
|
)
|
487,805
(40
|
)
|
1.08
|
%
|
**
|
||||||
FCC,
Ltd.
Levinstein
Tower #21st
23
Menahem Begin Road
Tel
Aviv, Israel
|
209,059(41
|
)
|
209,059(41
|
)
|
0.46
|
%
|
**
|
||||||
Harvest
Advaxis LLC (bb)
30052
Aventura, Suite C
Rancho
Santa Margarita, CA 92688
|
4,625,888
(42
|
) | 3,832,753 (42)(A | ) | 7.87 |
%
|
** |
(a)
|
Rima
Salam has voting and disposition rights on behalf of AI International
Corporate Holdings, Ltd.
|
(b)
|
Alan
Gelband has voting and disposition rights on behalf of Alan Gelband
Company Defined Contribution Pension Plan and Trust.
|
(c)
|
Hal
Beretz has voting and disposition rights on behalf of Beretz
Family
Partners LLP.
|
(d)
|
David
Fuchs has voting and disposition rights on behalf of Bridges
& Pipes
LLC.
|
(e)
|
Roni
Appel has voting and disposition rights on behalf of Carmel Ventures,
Inc.
|
(f)
|
Mitchell
P. Kopin, president of Downsview Capital Inc., the general partner
of
Cranshire Capital, L.P, has voting and disposition rights.
|
(g)
|
Ran
Nizan has voting and disposition rights on behalf of Crestwood
Holdings,
LLC.
|
(h)
|
Haim
Rolnitsky has voting and disposition rights on behalf of Design
Investments Ltd.
|
(i)
|
Howard
Milstein and John Hart have voting and disposition rights on
behalf of
Emigrant Capital Corp.
|
(j)
|
Joseph
Franck has voting and disposition rights on behalf of Fawdon
Investments,
Ltd.
|
(k)
|
Scott
Flamm, a former director of the Company, had voting and disposition
rights
on behalf of Flamm Family Partners LP., until his death in January
2006.
|
(l)
|
Frederick
Berdon has voting and disposition rights on behalf of Fred Berdon
Co.,
LP.
|
(m)
|
Howard
Kaye, the managing partner, has voting and disposition rights
on behalf of
Kay Family Fund.
|
(n)
|
Pershing
IMS has voting and disposition rights on behalf of IRA FBO /
Walter S.
Grossman.
|
(o)
|
Albert
Chabot has voting and disposition rights on behalf of MEA
Group
|
(p)
|
Shoshana
Loeb has voting and disposition rights on behalf of Open Ventures,
LLC.
|
(q)
|
Jeff
Davidowitz has voting and disposition rights on behalf of Penn
Footwear
Retirement Trust.
|
(r)
|
Eric
Richardson has voting and disposition rights on behalf of RP
Capital,
LLC.
|
(s)
|
Edwin
Mecabe and Tai May Lee jointly have voting and disposition rights
on
behalf of SRB Capital LLC.
|
(t)
|
Nathan
Low, Marilyn Adler and Amnon Mandelbaum are the managers of Level
Counter,
LLC, the general partner of Sunrise Equity Partners, L.P. The
unanimous
vote of such managers is required for voting and disposition
rights.
|
(u)
|
Walter
Schenker and Steven Slawson have voting and disposition rights
on behalf
of Titan Capital Management LLC.
|
(v)
|
Morten
Kiellan has voting and disposition rights on behalf of Trinity,
LLC.
|
(w)
|
Nathan
Low is a trustee of Sunrise Securities Corp.
|
(x)
|
Nathan
Low has voting and disposition rights on behalf of Sunrise Securities
Corp.
|
(y)
|
Avit
Heifetz has voting and disposition rights on behalf of A. Heifetz
Technologies Ltd.
|
(z)
|
James
L. Melcher has voting and disposition rights on behalf of Balestra
Spectrum Partners, LLC.
|
(aa)
|
Robert
Brown, Scott Rosenblatt, Edward G. Reitler and John Watkins have
voting
and disposition rights on behalf of Reitler Brown Holdings,
LLC.
|
(bb)
|
Robert
Harvey has voting and disposition rights on behalf of Harvest
Advaxis,,
LLC.
|
(1)
|
Reflects
35,395 shares of common stock and 44,205 warrants to purchase
shares of
common stock.
|
(1)(A)
|
Reflects
35,395 warrants
to purchase shares of common stock.
|
(2)
|
Reflects
87,108 shares of common stock and 87,108 warrants to purchase
shares of
common stock.
|
(2)(A)
|
Reflects
87,108
warrants to purchase shares of common stock.
|
(2)(B)
|
Reflects
88,850 shares of common stock and 87,108 warrants to purchase
shares of
common stock.
|
(3)
|
Reflects
174,216 warrants to purchase shares of common stock.
|
(3)(A)
|
Reflects
3,484 shares of common stock and 174,216 warrants to purchase
shares of
common stock.
|
(4)
|
Reflects
696,864 warrants to purchase shares of common stock.
|
(4)(A)
|
Reflects
710,801 shares of common stock and 696,864 warrants to purchase
shares of
common stock.
|
(5)
|
Reflects
413,441 warrants and 91,567 options exercisable for shares of
common stock
(355,528 shares of common stock transferred to R.
Appel).
|
(5)(A)
|
Reflects
355,528 warrants to purchase shares of common stock (355,528
shares of
common stock transferred to R. Appel).
|
(6)
|
Reflects
65,949 warrants to purchase shares of common stock.
|
(6)(A)
|
Reflects
52,883 warrants to purchase shares of common stock.
|
(7)
|
Reflects
109,074 warrants to purchase shares of common stock.
|
(7)(A)
|
Reflects
87,297 warrants to purchase shares of common stock.
|
(8)
|
Reflects
271,260 shares of common stock and 219,973 warrants to purchase
shares of
common stock.
|
(8)(A)
|
Reflects
211,063
warrants to purchase shares of common stock.
|
(9)
|
Reflects
522,648 warrants to purchase shares of common stock.
|
(10)
|
Reflects
244,933 shares of common stock and 115,320 warrants to purchase
shares of
common stock.
|
(10)(A)
|
Reflects
93,046
warrants to purchase shares of common
stock.
|
(10)(B)
|
Reflects
174,216 shares of common stock and 174,216 warrants to purchase
shares of
common stock.
|
(10)(C)
|
Reflects
174,216 warrants to purchase shares of common stock.
|
(11)
|
Reflects
348,432 shares of common stock and 348,432 warrants to purchase
shares of
common stock.
|
(11)(A)
|
Reflects
348,432 warrants to purchase shares of common
stock.
|
(12)
|
Reflects
1,777,003 shares of common stock and 1,742,160 warrants to purchase
shares
of common stock.
|
(12)(A)
|
Reflects
1,742,160 warrants to purchase shares of common stock.
|
(13)
|
Reflects
106,272 shares of common stock and 248,827 warrants to purchase
shares of
common stock.
|
(13)(A)
|
Reflects
106,272 warrants to purchase shares of common stock.
|
(14)
|
Reflects
2,621,325 shares of common stock and 45,141 warrants to purchase
shares of
common stock.
|
(14)(A)
|
Reflects
36,231 warrants to purchase shares of common stock.
|
(15)
|
Reflects
35,511 shares of common stock and 44,421 warrants to purchase shares
of
common stock.
|
(15)(A)
|
Reflects
35,511 warrants to purchase shares of common stock.
|
(16)
|
Reflects
261,324 shares of common stock and 261,324 warrants to purchase
shares of
common stock.
|
(16)(A)
|
Reflects
261,324 warrants to purchase shares of common stock.
|
(17)
|
Reflects
70,093 shares of common stock and 87,515 warrants to purchase shares
of
common stock.
|
(17)(A)
|
Reflects
70,093 warrants to purchase shares of common stock.
|
(18)
|
Reflects
469,982 shares of common stock and 368,815 shares of common stock
issuable
upon exercise of warrants.
|
(18)(A)
|
Reflects
295,766 warrants to purchase shares of common stock.
|
(19)
|
Reflects
73,253 options and 184,267 warrants to purchase shares of common
stock and
2,820,576 shares of common stock.
|
(19)(A)
|
Reflects
147,716 warrants to purchase shares of common stock.
|
(20)
|
Reflects
17,430 shares of common stock and 21,785 warrants to purchase shares
of
common stock.
|
(20)(A)
|
Reflects
17,430 warrants to purchase shares of common stock.
|
(21)
|
Reflects
35,865 shares of common stock and 44,775 warrants to purchase shares
of
common stock.
|
(21)(A)
|
Reflects
35,865 warrants to purchase shares of common stock.
|
(22)
|
Reflects
111,937 warrants to purchase shares of common stock.
|
(22)(A)
|
Reflects
89,663 warrants to purchase shares of common stock.
|
(23)
|
Reflects
98,664 shares of common stock and 98,664 warrants to purchase shares
of
common stock.
|
(23)(A)
|
Reflects
98,664 warrants to purchase shares of common stock.
|
(24)
|
Reflects
81,658 shares of common stock and 157,842 warrants to purchase
shares of
common stock.
|
(24)(A)
|
Reflects
126,658 warrants to purchase shares of common stock.
|
(25)
|
Reflects
35,180 shares of common stock and 43,981 warrants to purchase shares
of
common stock.
|
(25)(A)
|
Reflects
35,180 warrants to purchase shares of common stock.
|
(25)(B)
|
Reflects
170,093 shares of common stock and 87,515 warrants to purchase
shares of
common stock.
|
(25)(C)
|
Reflects
70,093 warrants to purchase shares of common stock.
|
(25)(D)
|
Reflects
177,700 shares of common stock and 174,216 warrants to purchase
shares of
common stock.
|
(25)(E)
|
Reflects
174,216 warrants to purchase shares of common stock.
|
(26)
|
Reflects
35,401 shares of common stock and 44,311 warrants to purchase shares
of
common stock.
|
(26)(A)
|
Reflects
35,401 warrants to purchase shares of common stock.
|
(27)
|
Reflects
3,976,288 shares of common stock (including 355,528 shares of common
stock
transferred to him subsequent to the commencement of the offering
from his
affiliate, Carmel) and 2,287,523 options and 73,029 warrants to
purchase
shares of common stock.
|
(27)(A)
|
Reflects 2,877,692
shares of common stock including 355,528 shares of common stock
transferred to him subsequent to the commencement of the offering
from his
affiliate, Carmel and, 58,580 warrants to purchase shares of common
stock
|
(27)(B)
|
Reflects
87,108 warrants to purchase shares of common stock
|
(28)
|
Reflects
125,772 shares of common stock, 156,956 warrants to purchase shares
of
common stock and 91,567 options.
|
(28)(A)
|
Reflects
125,772 warrants to purchase shares of common stock.
|
(28)(B)
|
Reflects
1,095,998 shares of common stock and 1,742,160 warrants to purchase
shares
of common stock.
|
(28)(C)
|
Reflects
1,742,160 warrants to purchase shares of common stock.
|
(29)
|
Reflects
179,290 shares of common stock, 132,763 options and 112,823 warrants
to
purchase shares of common stock.
|
(29)(A)
|
Reflects
90,549 warrants to purchase shares of common stock.
|
(30)
|
Reflects
1,094,020 shares of common stock and warrants to purchase 672,539
shares
of common stock, all of which securities were received as compensation
in
the ordinary course of business of his employer, Sunrise Securities
Corp.
as Placement Agent.
|
(30)(A)
|
Represents
warrants to purchase 672,539 shares of common stock.
|
(31)
|
Reflects
119,466 shares of common stock and 74,727 warrants to purchase
shares of
common stock, all of which securities were received as compensation
in the
ordinary course of business of the Selling Stockholder’s employer, Sunrise
Securities Corp. as Placement Agent.
|
(31)(A)
|
Represents
74,727 warrants to purchase shares of common stock.
|
(32)
|
Reflects
103,265 shares of common stock and 285,211 warrants to purchase
shares of
common stock which securities were purchased in the private placement
of
which 187,650 warrants to purchase common stock received as compensation
for consulting services rendered to Sunrise Securities Corp. as
Placement
Agent. Reflects 40,000 options to purchase shares of common stock.
Dr.
Filer is a consultant to Sunrise Securities
Corp.
|
(32)(a)
|
Reflects
97,561 warrants to purchase shares of common stock which securities
were
purchased in the private placement and 187,650 warrants to
purchase common
stock, received as compensation for consulting services rendered
to
Sunrise Securities Corp. as Placement Agent. Dr. Filer is a
consultant to
Sunrise Securities Corp.
|
(33)
|
Reflects
2,070 warrants to purchase shares of common stock, all of which
securities
were received as compensation in the ordinary course of business
of the
Selling Stockholder’s employer, Sunrise Securities Corp. as Placement
Agent.
|
(34)
|
Reflects
warrants to purchase 761,971 shares of common stock owned by
Mr. Low, all
of which securities were received as compensation in the ordinary
course
of business of his employer, Sunrise Capital as Placement
Agent.
|
(35)
|
Reflects
3,074 shares of common stock and 73,170 warrants to purchase
shares of
common stock, all of which securities were received as compensation
in the
ordinary course of business of his employer, Sunrise Securities
Corp. as
Placement Agent.
|
(35)(A)
|
Reflects
73,170 warrants to purchase shares of common stock.
|
(36)
|
Reflects
383,275 shares of common stock and 348,432 warrants to purchase
shares of
common stock. Nathan Low is its sole director and stockholder,
with 100%
beneficial ownership, voting and
|
(36)(A)
|
Reflects
348,432 warrants to purchase shares of common stock disposition
rights.
|
(37)
|
Reflects
476 shares of common stock and 146,341 warrants to purchase
shares of
common stock, all of which securities were received as compensation
in the
ordinary course of business of the Selling Stockholder’s employer, Sunrise
Securities Corp. as Placement Agent.
|
(37)(A)
|
Reflects
146,341 warrants to purchase shares of common stock.
|
(38)
|
Reflects
522,648 shares of common stock and 522,648 warrants to purchase
shares of
common stock.
|
(38)(A)
|
Reflects
522,648 warrants to purchase shares of common stock.
|
(39)
|
Reflects
60,000 warrants to purchase shares of common stock.
|
Shares
Owned
|
|||||||||||||
Name
|
Total
|
%
Before Offering
|
%
After Offering
|
Shares
Registered
|
|||||||||
Cornell
Capital Partners LP
101
Hudson Street, Suite 3700
Jersey
City, New Jersey 07302
|
1,966,547
|
(1)
|
4.9
|
%
|
0.0%
|
(2)
|
47,841,513
|
(3)
|
|
|
|
|
·
|
·
|
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits Investors;
|
·
|
block
trades in which the broker-dealer will attempt to sell the shares
as agent
but may position and resell a portion of the block as principal
to
facilitate the transaction;
|
·
|
purchases
by a broker-dealer as principal and resale by the broker-dealer
for its
account;
|
·
|
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
·
|
privately
negotiated transactions;
|
·
|
short
sales provided as to Cornell Capital that the Debenture is fully
converted;
|
·
|
broker-dealers
may agree with a Selling Stockholder to sell a specified number
of such
shares at a stipulated price per
share;
|
·
|
a
combination of any such methods of sale;
and
|
·
|
any
other method permitted pursuant to applicable
law.
|
Advaxis,
Inc.
|
Page
|
|
|
|
|
Balance
Sheet at January 31, 2007 (unaudited)
|
F-2
|
|
|
|
|
Statements
of Operations for the three month periods ended January 31, 2007
and 2006
and the period March 1, 2002 (inception) to January 31, 2007
(unaudited)
|
F-3
|
|
Cash
Flow Statements for the three month periods ended January 31, 2007
and
2006 and the period March 1,
2002
(inception) to January 31, 2007 (unaudited)
|
F-4
- F-5
|
|
Notes
to Financial Statements
|
F-6
- F-10
|
|
Report
of Independent Registered Public Accounting Firm
|
F-11
|
|
|
||
Balance
Sheet as of October 31, 2006
|
F-12
|
|
|
||
Statements
of Operations for the years ended October 31, 2005 and 2006 and the
period
from
|
|
|
March
1, 2002 (Inception) to October 31, 2006
|
F-13
|
|
|
||
Statements
of Stockholders’ Equity (Deficiency) for the Period from March 1, 2002
(Inception) to
|
||
October
31, 2006
|
F-14
|
|
|
||
Statements
of Cash Flows for the years ended October 31, 2005 and 2006 and the
period
from
|
|
|
March
1, 2002 (Inception) to October 31, 2006
|
F-15
- F-16
|
|
|
|
|
Notes
to the Financial Statements
|
F-17
- F-32
|
January
31, 2007
|
||||
ASSETS
|
||||
Current
Assets:
|
||||
Cash
|
$
|
1,977,809
|
||
Prepaid
expenses
|
16,718
|
|||
Total Current Assets
|
1,994,527
|
|||
|
||||
Property
and Equipment (net of accumulated depreciation of $30,775)
|
133,388
|
|||
Intangible
Assets (net of accumulated amortization of $107,796)
|
959,842
|
|||
Deferred
Financing Costs (net of accumulated amortization of
$111,919)
|
148,081
|
|||
Other
Assets
|
3,876
|
|||
Total Assets
|
$
|
3,239,714
|
||
LIABILITIES
& SHAREHOLDERS’ DEFICIENCY
|
|
|||
Current
Liabilities:
|
|
|||
Accounts
payable
|
$
|
813,668
|
||
Accrued
expenses
|
528,514
|
|||
Deferred
revenue
|
7,894
|
|||
Notes
payable - current portion
|
204,977
|
|||
Total
Current Liabilities
|
1,555,053
|
|||
|
||||
Interest
payable
|
159,444
|
|||
Notes
payable - net of current portion
|
345,125
|
|||
Convertible
Secured Debentures and fair value of embedded derivative
|
3,880,405
|
|||
Common
Stock Warrants
|
501,420
|
|||
Total
Liabilities
|
$
|
6,441,447
|
||
|
||||
Shareholders’
Deficiency:
|
||||
Common
Stock - $0.001 par value; authorized 500,000,000 shares, issued and
outstanding 42,331,051
|
42,330
|
|||
Additional
Paid-In Capital
|
6,455,140
|
|||
Deficit
accumulated during the development stage
|
(9,699,203
|
)
|
||
Total
Shareholders' Deficiency
|
$
|
(3,201,733
|
)
|
|
Total Liabilities & Shareholders’ Deficiency
|
$
|
3,239,714
|
|
3
Months
Ended
January
31,
|
3
Months
Ended
January
31,
|
Period
from
March
1, 2002
(Inception)
to
January
31,
|
|||||||
|
2007
|
2006
|
2007
|
|||||||
Revenue
|
$
|
146,307
|
$
|
329,928
|
$
|
1,251,542
|
||||
|
||||||||||
Research
& Development Expenses
|
494,107
|
385,107
|
3,742,155
|
|||||||
General
& Administrative Expenses
|
845,072
|
413,883
|
5,188,865
|
|||||||
Total
Operating expenses
|
1,339,179
|
798,990
|
8,931,020
|
|||||||
|
||||||||||
Loss
from Operations
|
(1,192,872
|
)
|
(469,062
|
)
|
(7,679,478
|
)
|
||||
|
||||||||||
Other
Income (expense):
|
||||||||||
Interest
expense
|
(153,355
|
)
|
(1,008
|
)
|
(619,382
|
)
|
||||
Other
Income
|
26,326
|
11,931
|
162,748
|
|||||||
Net
changes in fair value of common stock warrant
liability and embedded derivative liability
|
1,282,871
|
—
|
(1,519,207
|
)
|
||||||
Net
loss
|
(37,030
|
)
|
(458,139
|
)
|
(9,655,319
|
)
|
||||
|
||||||||||
Dividends
attributable to preferred shares
|
—
|
—
|
43,884
|
|||||||
|
||||||||||
Net
loss applicable to Common Stock
|
(37,030
|
)
|
$
|
(458,139
|
)
|
$
|
(9,699,203
|
)
|
||
|
||||||||||
Net
loss per share, basic and diluted
|
$
|
(0.00
|
)
|
$
|
(0.01
|
)
|
||||
|
||||||||||
Weighted
average number of shares outstanding basic and diluted
|
41,168,537
|
37,761,557
|
|
3
Months ended
January
31,
|
3
Months ended
January
31,
|
Period
from
March
1,2002
(Inception)
to
January
31,
|
|||||||
|
2007
|
2006
|
2007
|
|||||||
OPERATING
ACTIVITIES
|
|
|
|
|||||||
Net
loss
|
$
|
(37,030
|
)
|
$
|
(458,139
|
)
|
$
|
(9,655,319
|
)
|
|
Adjustments
to reconcile net loss
|
||||||||||
to
net cash used in operating activities:
|
||||||||||
Non-cash
charges to consultants and employees for options and stock
|
392,439
|
165,060
|
1,103,648
|
|||||||
Amortization
of deferred financing costs
|
29,606
|
111,919
|
||||||||
Non-cash
interest expense on convertible secured note
|
82,399
|
312,616
|
||||||||
Accrued
interest on notes payable
|
40,518
|
1,008
|
176,760
|
|||||||
Loss
on change in value of warrants and embedded derivative
|
(1,282,871
|
)
|
1,519,207
|
|||||||
Value
of penalty shares issued
|
—
|
—
|
117,498
|
|||||||
Depreciation
expense
|
6,334
|
4,081
|
30,775
|
|||||||
Amortization
expense of intangibles
|
13,241
|
10,159
|
110,967
|
|||||||
Decrease
(Increase) in prepaid expenses
|
21,382
|
—
|
(16,718
|
)
|
||||||
Decrease
(Increase) in other assets
|
724
|
—
|
(3,876
|
)
|
||||||
Increase
in accounts payable
|
3,447
|
34,683
|
1,128,874
|
|||||||
Decrease
in accrued expenses, net of non cash charges
|
6,047
|
—
|
512,325
|
|||||||
Increase
(Decrease) in Deferred Revenue
|
(12,456
|
)
|
—
|
7,893
|
||||||
Net
cash used in operating activities
|
(736,220
|
)
|
(243,148
|
)
|
(4,543,428
|
)
|
||||
INVESTING
ACTIVITIES
|
||||||||||
Cash
paid on acquisition of Great Expectations
|
—
|
—
|
(44,940
|
)
|
||||||
Purchase
of property and equipment
|
(29,400
|
)
|
(2,102
|
)
|
(118,583
|
)
|
||||
Cost
of intangible assets
|
(16,674
|
)
|
(24,316
|
)
|
(983,728
|
)
|
||||
Net
cash used in Investing Activities
|
(46,074
|
)
|
(26,418
|
)
|
(1,147,251
|
)
|
||||
FINANCING
ACTIVITIES
|
||||||||||
Proceeds
from convertible secured debenture
|
—
|
—
|
3,000,000
|
|||||||
Cash
paid for deferred financing costs
|
—
|
—
|
(260,000
|
)
|
||||||
Principal
Payments on notes payable
|
(1,063
|
)
|
—
|
(1,063
|
)
|
|||||
Proceeds
from notes payable
|
—
|
—
|
671,224
|
|||||||
Net
proceeds of issuance of Preferred Stock
|
—
|
—
|
235,000
|
|||||||
Net
proceeds of issuance of Common Stock
|
—
|
—
|
4,023,327
|
|||||||
Net
cash provided by (used in) Financing Activities
|
(1,063
|
)
|
—
|
7,668,488
|
||||||
Net
(Decrease) increase in cash
|
(783,357
|
)
|
(269,566
|
)
|
1,977,809
|
|||||
Cash
at beginning of period
|
2,761,166
|
2,075,206
|
—
|
|||||||
Cash
at end of period
|
$
|
1,977,809
|
$
|
1,805,640
|
$
|
1,977,809
|
|
3
Months ended
January
31,
|
3
Months ended
January
31,
|
Period
from
March
1, 2002
(Inception)
to
January
31,
|
|||||||
2007
|
2006
|
2007
|
||||||||
Equipment
acquired under capital lease
|
$
|
45,580
|
—
|
$
|
45,580
|
|||||
Common
Stock issued to Founders
|
—
|
—
|
$
|
40
|
||||||
Notes
payable and accrued interest converted to Preferred Stock
|
—
|
—
|
$
|
15,969
|
||||||
Stock
dividend on Preferred Stock
|
—
|
—
|
$
|
43,884
|
||||||
Notes
payable and accrued interest converted to Common Stock
|
$
|
150,000
|
—
|
$
|
1,063,158
|
|||||
Intangible
assets acquired with notes payable
|
—
|
—
|
$
|
360,000
|
||||||
Debt
discount in connection with recording the original value of the embedded
derivative liability
|
—
|
—
|
512,865
|
|||||||
Allocation
of the original secured convertible debentures to warrants
|
—
|
—
|
$
|
214,950
|
1. |
Business
Description
|
January
31,
2007
|
||||
Warrants
|
25,009,220
|
|||
Stock
Options
|
8,126,123
|
|||
Convertible
Debt (1)
|
17,317,487
|
|||
Total
All
|
50,452,830
|
(1)
|
Conversion
of the outstanding principal of $2,550,000 converted at 95% of the
January
31, 2007 closing price of $0.155 per share or $0.147 per
share.
|
2. |
Secured
Convertible
Debenture:
|
Convertible
Secured Debentures due February 1, 2009: 6% per annum
|
$
|
3,000,000
|
||
Common
Stock Warrant liability
|
$
|
(214,950
|
)
|
|
Embedded
derivative liability
|
$
|
(512,865
|
)
|
|
Convertible
Debenture as the date of sale
|
$
|
2,272,185
|
||
Amortization
of discount on warrants & embedded feature as of January 31,
2007
|
$
|
312,618
|
||
Conversion
of Cornell Capital Partners LP
|
$
|
(450,000
|
)
|
|
Convertible
Secured Debenture Liability as of January 31, 2007
|
$
|
2,134,803
|
||
Embedded
Derivative Liability
|
1,745,602
|
|||
Convertible
Secured Debentures and Fair Value of Embedded Derivative
Liability
|
$
|
3,880,405
|
Conversion
|
Amount
of
Conversion
|
Number
of
Shares
|
Conversion
Share
Price
|
|||||||
November
7, 2006
|
$
|
25,000
|
177,305
|
$
|
.1410
|
|||||
November
17, 2006
|
$
|
25,000
|
169,377
|
$
|
.1476
|
|||||
December
1, 2006
|
$
|
25,000
|
160,979
|
$
|
.1553
|
|||||
December
18, 2006
|
$
|
50,000
|
367,377
|
$
|
.1361
|
|||||
January
19, 2007
|
$
|
25,000
|
183,688
|
$
|
.1361
|
|||||
Total
|
$
|
150,000
|
1,058,726
|
Conversion
|
Amount
of
Conversion
|
Number
of
Shares
|
Conversion
Share
Price
|
|||||||
February
1, 2007
|
$
|
25,000
|
166,445
|
.1502
|
||||||
March
5, 2007
|
$
|
50,000
|
343,407
|
.1456
|
||||||
Inception
to date
|
$
|
525,000
|
3,335,480
|
|
October
31,
2006
|
|||
ASSETS
|
|
|||
Current
Assets:
|
|
|||
Cash
|
$
|
2,761,166
|
||
Prepaid
expenses
|
38,100
|
|||
Total Current Assets
|
2,799,266
|
|||
|
||||
Property
and Equipment (net of accumulated depreciation of $24,441)
|
64,742
|
|||
Intangible
Assets (net of accumulated amortization of $94,555)
|
956,409
|
|||
Deferred
Financing Costs (net of accumulated amortization of
$82,313)
|
177,687
|
|||
Other
Assets
|
4,600
|
|||
|
||||
TOTAL
ASSETS
|
$
|
4,002,704
|
||
|
||||
LIABILITIES
& SHAREHOLDERS’ DEFICIENCY
|
||||
Current
Liabilities:
|
||||
Accounts
payable
|
$
|
810,221
|
||
Accrued
expenses
|
522,467
|
|||
Deferred
revenue
|
20,350
|
|||
Notes
payable - current portion
|
191,577
|
|||
Total
Current Liabilities
|
1,544,615
|
|||
|
||||
Interest
payable
|
119,934
|
|||
Notes
payable - net of current portion
|
313,000
|
|||
Convertible
Secured Debentures and fair value of embedded derivative
|
5,017,696
|
|||
Common
Stock Warrants
|
714,600
|
|||
Total
Liabilities
|
$
|
7,709,845
|
||
|
||||
Shareholders’
Deficiency:
|
||||
Common
Stock - $0.001 par value; authorized 500,000,000 shares, issued and
outstanding 40,238,992
|
40,239
|
|||
Additional
Paid-In Capital
|
5,914,793
|
|||
Deficit
accumulated during the development stage
|
(9,662,173
|
)
|
||
Total
Shareholders' Deficiency
|
(3,707,141
|
)
|
||
TOTAL
LIABILITIES & SHAREHOLDERS’ DEFICIENCY
|
$
|
4,002,704
|
|
Year
Ended
October
31,
|
Year
Ended
October
31,
|
Period
from
March
1, 2002 (Inception) to
October
31,
|
|||||||
|
2005
|
2006
|
2006
|
|||||||
Revenue
|
$
|
552,868
|
$
|
431,961
|
$
|
1,105,235
|
||||
Research
& Development Expenses
|
1,175,536
|
1,404,164
|
3,248,048
|
|||||||
General
& Administrative Expenses
|
1,219,792
|
2,077,062
|
4,343,793
|
|||||||
Total
Operating expenses
|
2,395,328
|
3,481,226
|
7,591,841
|
|||||||
Loss
from Operations
|
(1,842,460
|
)
|
(3,049,265
|
)
|
(6,486,606
|
)
|
||||
Other
Income (expense):
|
||||||||||
Interest
expense
|
(7,307
|
)
|
(437,299
|
)
|
(466,027
|
)
|
||||
Other
Income
|
43,978
|
90,899
|
136,422
|
|||||||
Net
changes in fair value of common stock warrant liability and embedded
derivative liability
|
-
|
(2,802,078
|
)
|
(2,802,078
|
)
|
|||||
Net
loss
|
(1,805,789
|
)
|
(6,197,744
|
)
|
(9,618,289
|
)
|
||||
Dividends
attributable to preferred shares
|
43,884
|
|||||||||
Net
loss applicable to Common Stock
|
$
|
(1,805,789
|
)
|
$
|
(6,197,744
|
)
|
$
|
(9,662,173
|
)
|
|
Net
loss per share, basic and diluted
|
$
|
(0.05
|
)
|
$
|
(0.16
|
)
|
||||
Weighted
average number of shares outstanding basic and diluted
|
35,783,666
|
38,646,769
|
|
Preferred
Stock
|
|
Common
Stock
|
|
|
|
|
|
|
|
||||||||||||
|
|
Number
of Shares Outstanding
|
|
Amount
|
|
Number
of shares outstanding
|
|
Amount
|
|
Additional
Paid-in Capital
|
|
Deficit
Accumulated During the Development Stage
|
|
Shareholders'
Equity (Deficiency)
|
||||||||
Preferred
stock issued
|
3,418
|
$
|
235,000
|
$
|
235,000
|
|||||||||||||||||
Common
Stock Issued
|
40,000
|
$
|
40
|
$
|
(40
|
)
|
||||||||||||||||
Options
granted to consultants and professionals
|
10,493
|
10,493
|
||||||||||||||||||||
Net
Loss
|
(166,936
|
)
|
(166,936
|
)
|
||||||||||||||||||
Retroactive
restatement to reflect re-capitalization on November 12,
2004
|
(3,481
|
)
|
(235,000
|
)
|
15,557,723
|
15,558
|
219,442
|
|||||||||||||||
Balance
at December 31, 2002
|
15,597,723
|
$
|
15,598
|
$
|
229,895
|
$
|
(166,936
|
)
|
$
|
78,557
|
||||||||||||
Note
payable converted into preferred stock
|
232
|
15,969
|
15,969
|
|||||||||||||||||||
Options
granted to consultants and professionals
|
8,484
|
8,484
|
||||||||||||||||||||
Net
loss
|
(909,745
|
)
|
(909,745
|
)
|
||||||||||||||||||
Retroactive
restatement to reflect re-capitalization on November 12,
2004
|
(232
|
)
|
(15,969
|
)
|
15,969
|
|||||||||||||||||
Balance
at December 31, 2003
|
15,597,723
|
$
|
15,598
|
$
|
254,348
|
$
|
(1,076,681
|
)
|
$
|
(806,735
|
)
|
|||||||||||
Stock
dividend on preferred stock
|
638
|
43,884
|
(43,884
|
)
|
||||||||||||||||||
Net
loss
|
(538,076
|
)
|
(538,076
|
)
|
||||||||||||||||||
Options
granted to consultants and professionals
|
5,315
|
5,315
|
||||||||||||||||||||
Retroactive
restatement to reflect re-capitalization on November 12,
2004
|
(638
|
)
|
(43,884
|
)
|
43,884
|
|||||||||||||||||
Balance
at October 31, 2004
|
15,597,723
|
$
|
15,598
|
$
|
303,547
|
$
|
(1,658,641
|
)
|
$
|
(1,339,496
|
)
|
|||||||||||
Common
Stock issued to Placement Agent on re-capitalization
|
752,600
|
753
|
(753
|
)
|
||||||||||||||||||
Effect
of re-capitalization
|
752,600
|
753
|
(753
|
)
|
||||||||||||||||||
Options
granted to consultants and professionals
|
64,924
|
64,924
|
||||||||||||||||||||
Conversion
of Note payable to Common Stock
|
2,136,441
|
2,136
|
611,022
|
613,158
|
||||||||||||||||||
Issuance
of Common Stock for cash, net of shares to Placement Agent
|
17,450,693
|
17,451
|
4,335,549
|
4,353,000
|
||||||||||||||||||
Issuance
of common stock to consultants
|
586,970
|
587
|
166,190
|
166,777
|
||||||||||||||||||
Issuance
of common stock in connection with the registration
statement
|
409,401
|
408
|
117,090
|
117,498
|
||||||||||||||||||
Issuance
costs
|
(329,673
|
)
|
(329,673
|
)
|
||||||||||||||||||
Net
loss
|
(1,805,789
|
)
|
(1,805,789
|
)
|
||||||||||||||||||
Restatement
to reflect re- capitalization on November 12, 2004 including cash
paid of
$44,940
|
(88,824
|
)
|
(88,824
|
)
|
||||||||||||||||||
Balance
at October 31, 2005
|
37,686,428
|
$
|
37,686
|
$
|
5,178,319
|
$
|
(3,464,430
|
)
|
$
|
1,751,575
|
||||||||||||
Options
granted to consultants and professionals
|
172,831
|
172,831
|
||||||||||||||||||||
Options
granted to employees and directors
|
71,667
|
71,667
|
||||||||||||||||||||
Conversion
of debenture to Common Stock
|
1,766,902
|
1,767
|
298,233
|
300,000
|
||||||||||||||||||
Issuance
of Common Stock to employees and directors
|
229,422
|
229
|
54,629
|
54,858
|
||||||||||||||||||
Issuance
of common stock to consultants
|
556,240
|
557
|
139,114
|
139,674
|
||||||||||||||||||
Net
loss
|
(6,197,744
|
)
|
(6,197,744
|
)
|
||||||||||||||||||
Balance
at October 31, 2006
|
40,238,992
|
$
|
40,239
|
$
|
5,914,793
|
$
|
(9,662,173
|
)
|
$
|
(3,707,141
|
)
|
|
|
|
Period
from
|
|||||||
|
|
|
March
1
|
|||||||
|
|
|
2002
|
|||||||
|
Year
ended
|
Year
ended
|
(Inception)
to
|
|||||||
|
October
31,
|
October
31,
|
October
31,
|
|||||||
|
2005
|
2006
|
2006
|
|||||||
OPERATING
ACTIVITIES
|
|
|
|
|||||||
Net
loss
|
$
|
(1,805,789
|
)
|
$
|
(6,197,744
|
)
|
$
|
(9,618,289
|
)
|
|
Adjustments
to reconcile net loss
|
||||||||||
to
net cash used in operating activities:
|
||||||||||
Non-cash
charges to consultants and employees for options and stock
|
231,701
|
439,027
|
711,210
|
|||||||
Amortization
of deferred financing costs
|
82,313
|
82,313
|
||||||||
Non-cash
interest expense
|
230,218
|
230,218
|
||||||||
Accrued
interest on notes payable
|
12,308
|
123,934
|
136,242
|
|||||||
Loss
on change in value of warrants and embedded derivative
|
2,802,078
|
2,802,078
|
||||||||
Value
of penalty shares issued
|
117,498
|
117,498
|
||||||||
Depreciation
expense
|
7,432
|
17,009
|
24,441
|
|||||||
Amortization
expense of intangibles
|
33,669
|
45,068
|
97,726
|
|||||||
Increase
in prepaid expenses
|
(38,100
|
)
|
(38,100
|
)
|
||||||
Increase
in other assets
|
(4,600
|
)
|
(4,600
|
)
|
||||||
Increase
(decrease) in accounts payable
|
(132,149
|
)
|
158,335
|
1,125,427
|
||||||
Increase
in accrued expenses
|
-
|
522,467
|
506,278
|
|||||||
Deferred
Revenue
|
-
|
20,350
|
20,350
|
|||||||
Net
cash used in operating activities
|
(1,539,930
|
)
|
(1,795,045
|
)
|
(3,807,208
|
)
|
||||
INVESTING
ACTIVITIES
|
||||||||||
Cash
paid on acquisition of Great Expectations
|
(44,940
|
)
|
(44,940
|
)
|
||||||
Purchase
of property and equipment
|
(80,577
|
)
|
(8,606
|
)
|
(89,183
|
)
|
||||
Cost
of intangible assets
|
(314,953
|
)
|
(250,389
|
)
|
(967,054
|
)
|
||||
Net
cash used in Investing Activities
|
(440,470
|
)
|
(258,995
|
)
|
(1,101,177
|
)
|
||||
FINANCING
ACTIVITIES
|
||||||||||
Proceeds
from convertible secured debenture
|
3,000,000
|
3,000,000
|
||||||||
Cash
paid for deferred financing costs
|
(260,000
|
)
|
(260,000
|
)
|
||||||
Proceeds
from notes payable
|
671,224
|
|||||||||
Net
proceeds of issuance of Preferred Stock
|
0
|
235,000
|
||||||||
Net
proceeds of issuance of Common Stock
|
4,023,327
|
4,023,327
|
||||||||
Net
cash provided by Financing Activities
|
4,023,327
|
2,740,000
|
7,669,551
|
|||||||
Net
increase in cash
|
2,042,927
|
685,960
|
2,761,166
|
|||||||
Cash
at beginning of period
|
32,279
|
2,075,206
|
||||||||
Cash
at end of period
|
$
|
2,075,206
|
$
|
2,761,166
|
$
|
2,761,166
|
Supplemental Schedule of Noncash Investing and Financing
Activities
|
|
|
|
Period
from
|
|||||||
|
Year
ended
|
Year
ended
|
March
1, 2002
|
|||||||
|
October 31,
|
October
31,
|
(Inception)
to
|
|||||||
|
2005
|
2006
|
October
31, 2006
|
|||||||
Common
Stock issued to Founders
|
$
|
40
|
||||||||
Notes
payable and accrued interest converted to Preferred Stock
|
$
|
15,969
|
||||||||
Stock
dividend on Preferred Stock
|
43,884
|
|||||||||
Notes
payable and accrued interest converted to Common
Stock
|
$
|
613,158
|
$
|
300,000
|
$
|
913,158
|
||||
Intangible
assets acquired with notes payable
|
$
|
360,000
|
||||||||
Debt
discount in connection with recording the original value of the embedded
derivative liability
|
$
|
$
|
512,865
|
$
|
512,865
|
|||||
Allocation
of the original secured convertible debentures to warrants
|
$
|
$
|
214,950
|
$
|
214,950
|
|
October
31, 2006
|
|||
Warrants
|
25,009,220
|
|||
Stock
Options
|
6,959,077
|
|||
Convertible
Debt (1)
|
14,210,526
|
|||
Total
All
|
46,178,823
|
(1)
|
Conversion
of the outstanding principal of $2,700,000 converted at 95% of the
October
31, 2006 closing price of $0.20 per share, or $0.19 per
share.
|
|
Year
ended October 31, 2005
|
March
1, 2002
(date
of inception)
to
October
31, 2006
|
|||||
|
|
|
|||||
Net
Loss as reported
|
$
|
(1,805,789
|
)
|
$
|
(9,618,289
|
)
|
|
Add:
Stock based option expense included in recorded net loss
|
64,924
|
89,217
|
|||||
Deduct
stock option compensation expense determined under fair value based
method
|
(200,942
|
)
|
(328,176
|
)
|
|||
Adjusted
Net Loss
|
$
|
(1,941,807
|
)
|
$
|
(9,379,330
|
)
|
|
Basic
and Diluted Net Loss per share as reported
|
$
|
(0.05
|
)
|
||||
Basic
and Diluted Net Loss per share pro forma
|
$
|
(0.05
|
)
|
|
Year
Ended
|
Year
Ended
|
|||||
|
October
31, 2005
|
October
31, 2006
|
|||||
Expected
volatility
|
30
|
%
|
127.37
|
%
|
|||
Expected
Life
|
10
years
|
7.7
years
|
|||||
Dividend
yield
|
0
|
0
|
|||||
Risk-free
interest rate
|
4.5%-5.25
|
%
|
4.6
|
%
|
Trademarks
|
$
|
74,948
|
||
Patents
|
490,893
|
|||
License
|
485,123
|
|||
Less:
Accumulated Amortization
|
(94,555
|
)
|
||
|
||||
|
$
|
956,409
|
Year
ending October 31,
|
|
|||
2007
|
$
|
52,548
|
||
2008
|
52,548
|
|||
2009
|
52,548
|
|||
2010
|
52,548
|
|||
2011
|
52,548
|
Salaries
and other compensation
|
$
|
275,478
|
||
Consulting
|
185,683
|
|||
Other
(less than 5%)
|
61,306
|
|||
$
|
522,467
|
Two
notes payable with interest at 8% per annum, due on December 17,
2008. The
lender has served notice demanding payment pursuant to the November
2004
recapitalization and financing agreement
|
$
|
61,577
|
||
Note
payable with no interest payable at the time of the closing of the
Company's contemplated $5,000,000 equity financing
|
75,000
|
|||
Note
payable with no interest payable at the time of the closing of the
Company's contemplated $5,000,000 equity financing
|
8,000
|
|||
Note
payable with no interest payable at December 15, 2006, or at the
time of
the closing of the Company's contemplated $5,000,000 equity
financing
|
130,000
|
|||
230,000
|
||||
Total
|
504,577
|
|||
Less
current portion
|
191,577
|
|||
|
$
|
313,000
|
Aggregate
maturities of notes payable at October 31, 2006 are as
follows:
|
||||
2007
|
191,577
|
|||
2008
|
313,000
|
|||
|
||||
Total
|
$
|
504,577
|
Convertible
Secured Debentures due February 1, 2009: 6% per annum
|
$
|
3,000,000
|
||
Common
Stock Warrant liability
|
$
|
(214,950
|
)
|
|
Embedded
derivative liability
|
$
|
(512,865
|
)
|
|
Convertible
Debenture as the date of sale
|
$
|
2,272,185
|
||
Amortization
of discount on warrants & embedded feature as of October 31,
2006
|
$
|
230,218
|
||
Conversion
by Cornell Capital Partners LP
|
$
|
(300,000
|
)
|
|
Convertible
Secured Debenture Liability as of October 31, 2006
|
$
|
2,202,403
|
||
Embedded
Derivative Liability
|
2,815,293
|
|||
Convertible
Secured Debentures and Fair Value of Embedded Derivative
Liability
|
$
|
5,017,696
|
Date
of
Conversion
|
Amount
of
Conversion
|
Number
of
Shares
|
Conversion
Share
Price
|
|||||||
April
20, 2006
|
$
|
50,000
|
212,947
|
.2348
|
||||||
May
9, 2006
|
$
|
50,000
|
212,947
|
.2348
|
||||||
July
6, 2006
|
$
|
25,000
|
112,918
|
.2214
|
||||||
July
19, 2006
|
$
|
25,000
|
139,198
|
.1796
|
||||||
August
2, 2006
|
$
|
25,000
|
160,051
|
.1562
|
||||||
August
10, 2006
|
$
|
25,000
|
183,959
|
.1359
|
||||||
September
14, 2006
|
$
|
25,000
|
186,567
|
.1340
|
||||||
September
26, 2006
|
$
|
25,000
|
186,567
|
.1340
|
||||||
October
9, 2006
|
$
|
25,000
|
185,874
|
.1345
|
||||||
October
20, 2006
|
$
|
25,000
|
185,874
|
.1345
|
||||||
Total
|
$
|
300,000
|
1,766,902
|
Date
of
Conversion
|
Amount
of
Conversion
|
Number
of
Shares
|
Conversion
Share
Price
|
|||||||
November
7, 2006
|
$
|
25,000
|
177,305
|
$
|
.1410
|
|||||
November
17, 2006
|
$
|
25,000
|
169,377
|
$
|
.1476
|
|||||
December
1, 2006
|
$
|
25,000
|
160,979
|
$
|
.1553
|
|||||
December
18, 2006
|
$
|
50,000
|
367,377
|
$
|
.1361
|
|||||
January
19, 2007
|
$
|
25,000
|
183,688
|
$
|
.1361
|
|||||
February
1, 2007
|
$
|
25,000
|
166,445
|
$
|
.1502
|
|||||
Total
|
$
|
175,000
|
1,225,171
|
|
Shares
|
Weighted
Average Exercise Price
|
Remaining
Life
In Years
|
Aggregate
Intrinsic Value
|
|||||||||
Outstanding
as of October 31, 2004
|
2,389,271
|
$
|
0.23
|
8.4
|
|||||||||
Granted
|
3,242,547
|
$
|
0.29
|
||||||||||
Cancelled
or Expired
|
(789,279
|
)
|
$
|
0.23
|
|||||||||
Exercised
|
—
|
—
|
|||||||||||
Outstanding
as of October 31, 2005
|
4,842,539
|
$
|
0.27
|
8.1
|
6,867
|
||||||||
Granted
|
2,233,179
|
$
|
0.22
|
12,000
|
|||||||||
Cancelled
or Expired
|
(116,641
|
)
|
$
|
0.37
|
|||||||||
Exercised
|
—
|
—
|
|||||||||||
Outstanding
as of October 31, 2006
|
6,959,077
|
$
|
0.25
|
7.7
|
$
|
18,867
|
|||||||
Vested
& Exercisable at October 31, 2006
|
3,755,910
|
$
|
0.25
|
7.3
|
$
|
6,867
|
Options
Outstanding
|
Options
Exercisable
|
|||||||||||||||||||||
Range
of
Exercise
Prices
|
Number
Outstanding
|
Weighted-
Average
Remaining
Contractual
Life (in Years)
|
Weighted-
Average
Exercise
Price
per
Share
|
Aggregate
Intrinsic
Value
|
Number
Exercisable
|
Weighted-
Average
Exercise
Price
per
Share
|
Aggregate
Intrinsic
Value
|
|||||||||||||||
$
0.16-0.18
|
300
|
9.9
|
$
|
0.16
|
$
|
12,000
|
0
|
$
|
0.16
|
0
|
||||||||||||
0.19-0.21
|
2,607
|
6.7
|
0.20
|
6,867
|
1,899
|
0.20
|
$
|
6,867
|
||||||||||||||
0.24-0.26
|
760
|
9.4
|
0.26
|
0
|
50
|
0.26
|
0
|
|||||||||||||||
0.28-0.29
|
2,970
|
8.3
|
0.29
|
0
|
1,485
|
0.29
|
0
|
|||||||||||||||
0.35-0.43
|
322
|
6.3
|
0.37
|
|
322
|
0.37
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||
Total
|
6,959
|
7.7
|
$
|
0.25
|
$
|
18,867
|
3,756
|
$
|
0.25
|
$
|
6,867
|
|
Number
of Shares
|
Weighted
Average Exercise Price at Grant Date
|
Weighted
Average Remaining Contractual Term (in years)
|
|||||||
Non-vested
shares at October 31, 2005
|
2,386,542
|
$
|
0.29
|
8.5
|
||||||
Options
granted
|
2,233,179
|
$
|
0.22
|
9.4
|
||||||
Options
vested
|
(1,416,554
|
)
|
$
|
0.25
|
7.8
|
|||||
Options
forfeited or expired
|
-
|
-
|
-
|
|||||||
Non-vested
shares at October 31, 2006
|
3,203,167
|
$
|
0.25
|
9.0
|
Net
operating losses
|
$
|
2,090,711
|
||
Stock
based compensation
|
182,086
|
|||
Less
valuation allowance
|
(2,272,797
|
)
|
||
Deferred
tax asset
|
$
|
-0-
|
|
Year ended
October
31,
2005
|
Year ended
October
31,
2006
|
Period
from
March
1, 2002
(inception)
to
October
31, 2006
|
|||||||
|
|
|
|
|||||||
Provision
at federal statutory rate
|
34
|
%
|
34
|
%
|
34
|
%
|
||||
Valuation
allowance
|
(34
|
)
|
(34
|
)
|
(34
|
)
|
||||
|
-0-
|
%
|
-0-
|
%
|
-0-
|
%
|
|
$
|
2,204.07
|
|
|
|
|
Printing
and engraving expenses
|
|
$
|
22,000.00
|
|
|
|
Legal
fees and expenses
|
|
$
|
100,000.00
|
|
|
|
Accounting
fees and expenses
|
|
$
|
3,000.00
|
|
|
|
|
$
|
10,000.00
|
|
|
|
|
Miscellaneous
expense
|
|
$
|
2,500.00
|
|
|
|
Total
|
|
$
|
139,704.07
|
(of
which $100,000related to the Post-Effective Amendments )
|
|
EXHIBIT
NUMBER
|
DESCRIPTION
OF EXHIBIT
|
Exhibit
2.1
|
Agreement
and Plan of Merger dated March 29, 2006. Incorporated by reference
to
Annex B to Schedule DEF 14A Proxy Statement filed with the
SEC on May 15,
2006.
|
Exhibit
3.1
|
Amended
and Restated Articles of Incorporation. Incorporated by reference
to
Exhibit 3.1 to Report on Form 8K filed with the SEC on December 27,
2004.
|
Exhibit
3.1(a)
|
Amended
and Restated Certificate of Incorporation of Advaxis. Incorporated
by
reference to Exhibit Annex C to report on Schedule DEF 14A
Proxy Statement
filed with the SEC on May 15, 2006.
|
Exhibit
3.2
|
Bylaws.
Incorporated by reference to Exhibit 10.4 to Report on Form
10QSB filed
with the SEC on September 13, 2006.
|
Exhibit
4.1
|
Form
of common stock certificate incorporated by reference to exhibit
4.1 filed
with the SEC on March 9, 2006 Registration Statement on Form
SB-2 (File
No. 333-132298).
|
Exhibit
4.2
|
Form
of Secured Convertible Debenture issued in February 2006 to
Cornell
Capital Partners, LP incorporated by reference to exhibit 10.2
to Report
8K filed with the SEC on February 8,
2006.
|
Exhibit
4.3
|
Form
of Warrant issued in February 2006 to Cornell Capital Partners,
LP to
purchase 4,200,000 shares of common stock. Incorporated by
reference to
Exhibit 10.3 to Report on Form 8K filed with the SEC on February
8,
2006.
|
Exhibit
4.4
|
Form
of Warrant issued in February 2006 to Cornell Capital Partners,
LP to
purchase 300,000 shares of common stock. Incorporated by reference
to
Exhibit 10.4 to Report on Form 8K filed with the SEC on February
8,
2006.
|
Exhibit
4.5
|
Form
of Warrant issued to purchasers in the Private Placement. Incorporated
by
reference to Exhibit 4.1 to Report on Form 8K filed with the
SEC on
November 18, 2004.
|
Exhibit
4.6
|
Form
of Warrant issued to November 2004 Private Placement Agent.
Incorporated
by reference to Exhibit 4.2 to Report on Form 8K filed with
the SEC on
November 18, 2004.
|
Exhibit
6
|
Opinion
of Jody Walker, Esq. Incorporated by reference to Exhibit 5.1
to Report on Form SB-2 (File No.
333-132298).
|
Exhibit
6(a)
|
Opinion
of Reitler Brown & Rosenblatt,
LLC
|
Exhibit
10.1
|
Share
and Exchange Agreement, dated as of August 25, 2004, by and among
the
Company, Advaxis and the shareholders of Advaxis. Incorporated
by
reference to Exhibit 10.1 to Report on Form 8K filed with the
SEC on
November 18, 2004.
|
Exhibit
10.2
|
Securities
Purchase Agreement dated February 2, 2006 between Company and
Cornell
Capital Partners, LP. Incorporated by reference to Exhibit 10.1
to Report
on Form 8K filed with the SEC on February 8,
2006.
|
Exhibit
10.3
|
Security
Agreement dated February 2, 2006 between Company and Cornell
Capital
Partners, LP. Incorporated by reference to Exhibit 10.6 to Report
on Form
8K filed with the SEC on February 8,
2006.
|
Exhibit
10.4
|
Security
Agreement dated February 2, 2006 between Advaxis, Inc., a Delaware
corporation (subsidiary of the Company) and Cornell Capital Partners,
LP.
Incorporated by reference to Exhibit 10.7 to Report on Form 8K
filed with
the SEC on February 8, 2006.
|
Exhibit
10.5
|
Investor
Registration Rights Agreement dated February 2, 2006 between
Company and
Cornell Capital Partners, LP. Incorporated by reference to Exhibit
10.5 to
Report on Form 8K filed with the SEC on February 8,
2006.
|
Exhibit
10.6
|
Form
of Securities Purchase Agreement related to the November 2004
Private
Placement, by and among the Company and the purchasers listed
as
signatories thereto. Incorporated by reference to Exhibit 10.2
to Report
on Form 8K filed with the SEC on November 18,
2004.
|
Exhibit
10.7
|
Form
of Registration Rights Agreement related to the November 2004
Private
Placement, by and among the Company and the persons listed as
signatories
thereto. Incorporated by reference to Exhibit 10.3 to Report
on Form 8K
filed with the SEC on November 18,
2004.
|
Exhibit
10.8
|
Form
of Standstill Agreement, by and among the Company and persons
listed on
Schedule 1 attached thereto. Incorporated by reference to Exhibit
10.4 to
Report on Form 8K filed with the SEC on November 18,
2004.
|
Exhibit
10.9
|
Amended
and Restated Employment Agreement, dated December 20, 2004, by
and between
the Company and J.Todd Derbin. Incorporated by reference to Exhibit
10.1
to Report on Form 8K filed with the SEC on December 23,
2004.
|
Exhibit
10.10
|
2004
Stock Option Plan of the Company. Incorporated by reference to
Exhibit 4.1
to Report on Form S-8 filed with the SEC on December 1,
2005.
|
Exhibit
0.10(a)
|
2005
Stock Option Plan of the Company. Incorporated by reference to
Annex A of
Schedule DEF Proxy Statement filed with the SEC on May 15,
2006.
|
Exhibit
10.11*
|
License
Agreement, between University of Pennsylvania and the Company dated
as of June 17, 2002, as Amended and Restated on February 13,
2007.
|
Exhibit
10.12
|
Non-Exclusive
License and Bailment, dated as of March 17, 2004, between The
Regents of
the University of California and Advaxis, Inc. Filed as Exhibit
10.8 to
Post-Effective Amendment filed on January 5, 2006 to Registration
Statement on Form SB-2 (File No.
333-122504).
|
Exhibit
10.13
|
Consultancy
Agreement, dated as of January 19, 2005, by and between LVEP
Management,
LLC. and the Company. Filed as Exhibit 10.9 to Post-Effective
Amendment
filed on January 5, 2006 to Registration Statement on Form SB-2
(File No.
333-122504).
|
|
|
Exhibit
10.14
|
Government
Funding Agreement, dated as of April 5, 2004, by and between
David Carpi
and Advaxis, Inc. Filed as Exhibit 10.10 to Post-Effective Amendment
filed
on January 5, 2006 to Registration Statement on Form SB-2 (File
No.
333-122504).
|
Exhibit
10.15
|
Amended
and Restated Consulting and Placement Agreement, dated as of
May 28, 2003,
by and between David Carpi and Advaxis, Inc., as amended. Filed
as Exhibit
10.11 to Post-Effective Amendment filed on January 5, 2006
to Registration
Statement on Form SB-2 (File No.
333-122504).
|
Exhibit
10.16
|
Consultancy
Agreement, dated as of January 22, 2005, by and between Dr.
Yvonne
Paterson and Advaxis, Inc. Filed as Exhibit 10.12 to Post-Effective
Amendment filed on January 5, 2006 to Registration Statement
on Form SB-2
(File No. 333-122504).
|
Exhibit
10.17
|
Consultancy
Agreement, dated as of March 15, 2003, by and between Dr. Joy
A. Cavagnaro
and Advaxis, Inc. Filed as Exhibit 10.13 to Post-Effective
Amendment filed
on January 5, 2006 to Registration Statement on Form SB-2 (File
No.
333-1022504).
|
Exhibit
10.18
|
Grant
Writing Agreement, dated June 19, 2003, by and between DNA
Bridges, Inc.
and Advaxis, Inc. Filed as Exhibit 10.14 to Post-Effective
Amendment filed
on January 5, 2006 to Registration Statement on Form SB-2 (File
No.
333-022504).
|
Exhibit
10.19
|
Consulting
Agreement, dated as of July 2, 2004, by and between Sentinel
Consulting
Corporation and Advaxis, Inc. Filed as Exhibit 10.15 to Post-Effective
Amendment filed on January 5, 2006 to Registration Statement
on Form SB-2
(File No. 333-122504).
|
Exhibit
10.20
|
Agreement,
dated July 7, 2003, by and between Cobra Biomanufacturing PLC
and Advaxis,
Inc. Filed as Exhibit 10.16 on June 9, 2005 to Registration
Statement on
Form SB-2 (File No. 333-122504).
|
Exhibit
10.21
|
Securities
Purchase Agreement, dated as of January 12, 2005, by and between
the
Company and Harvest Advaxis LLC. Incorporated by reference
to Exhibit 10.1
to Report on Form 8K filed with the SEC on January 18,
2005.
|
Exhibit
10.22
|
Registration
Rights Agreement, dated as of January 12, 2005, by and between
the Company
and Harvest Advaxis LLC. Incorporated by reference to Exhibit
10.2 to
Report on Form 8K filed with the SEC on January 18,
2005.
|
Exhibit
10.23
|
Letter
Agreement, dated as of January 12, 2005 by and between the
Company and
Robert T. Harvey. Incorporated by reference to Exhibit 10.3
to Report on
Form 8K filed with the SEC on January 18,
2005.
|
Exhibit
10.24
|
Consultancy
Agreement, dated as of January 15, 2005, by and between Dr.
David Filer
and the Company. Filed as Exhibit 10.20 to Post-Effective Amendment
filed
on January 5, 2006 to Registration Statement on Form SB-2 (File
No.
333-122504).
|
Exhibit
10.25
|
Consultancy
Agreement, dated as of January 15, 2005, by and between Pharm-Olam
International Ltd. and the Company. Filed as Exhibit 10.21
to
Post-Effective Amendment filed on January 5, 2006 to Registration
Statement on Form SB-2 (File No.
333-122504).
|
Exhibit
10.26
|
Agreement,
dated February 1, 2004, by and between Strategic Growth International
Inc.
and the Company. Filed as Exhibit 10.22 to Post-Effective Amendment
filed
on January 5, 2006 to Registration Statement on Form SB-2 (File
No.
333-122504).
|
Exhibit
10.27
|
Letter
Agreement, dated February 10, 2005, by and between Richard
Berman and the
Company. Filed as Exhibit 10.23 to Post-Effective Amendment
filed on
January 5, 2006 to Registration Statement on Form SB-2 (File
No.
333-122504).
|
Exhibit
10.28
|
Employment
Agreement, dated February 8, 2005, by and between Vafa Shahabit
and the
Company. Filed as Exhibit 10.24 to Post-Effective Amendment
filed on
January 5, 2006 to Registration Statement on Form SB-2 (File
No.
333-122504).
|
Exhibit
10.29
|
Employment
Agreement, dated March 1, 2005, by and between John Rothman and
the
Company. Filed as Exhibit 10.25 to Post-Effective Amendment filed
on
January 5, 2006 to Registration Statement on Form SB-2 (File No.
333-122504).
|
Exhibit
10.30
|
Clinical
Research Services Agreement, dated April 6, 2005, between Pharm-Olam
International Ltd. and the Company. Incorporated by reference to
Exhibit
10.26 to the amendment filed on June 9, 2005 to Registration Statement
on
Form SB-2 (File No. 333-122504).
|
Exhibit
10.30(a)
|
Amendment
to Consultancy Agreement, dated as of April 4, 2005, between LVEP
Management LLC and the Company. Filed as Exhibit 10.27 to Post-Effective
Amendment filed on January 5, 2006 to Registration Statement on
Form SB-2
(File No. 333-122504).
|
Exhibit
10.30(b)
|
Second
Amendment dated October, 31, 2005 to Consultancy Agreement between
LVEP
Management LLC and the Company. Incorporated by reference to Exhibit
10.2
to Report on Form 8K filed with the SEC on November 9,
2005.
|
Exhibit
10.31
|
Royalty
Agreement, dated as of May 11, 2003, by and between Cobra
Bio-Manufacturing PLC and the Company. Filed as Exhibit 10.28 to
Post-Effective Amendment filed on January 5, 2006 to Registration
Statement on Form SB-2 (File No.
333-122504).
|
Exhibit
10.32
|
Letter
Agreement between the Company and Investors Relations Group Inc.,
dated
September 27, 2005. Filed as Exhibit 10.31 to Post-Effective Amendment
filed on January 5, 2006 to Registration Statement on Form SB-2
(File No.
333-122504).
|
Exhibit
10.33
|
Consultancy
Agreement between the Company and Freemind Group LLC, dated October
17,
2005. Filed as Exhibit 10.32 to Post-Effective Amendment filed
on January
5, 2006 to Registration Statement on Form SB-2 (File No.
333-122504).
|
Exhibit
10.34
|
Strategic
Collaboration and Long Term Vaccine Supply Agreement between the
Company
and Colera BioManufacturing PLC, dated October 31, 2005. Filed
as Exhibit
10.33 to Post-Effective Amendment No. 2 to Registration Statement
on Form
SB-2 (File No. 333-122504).*
|
Exhibit
10.35
|
Employment
Agreement dated February 9, 2006 between the Company and Frederick
D.
Cobb. Filed on March 9, 2006 with the initial filing of the Registration
Statement on Form SB-2 (File No.
333-132298)
|
Exhibit
10.36
|
Resignation
Agreement between J. Todd Derbin and the Company dated October
31, 2005.
Incorporated by reference to Exhibit 10.1 to report on Form 8-K
filed with
the SEC on November 9, 2005.
|
Exhibit
10.37
|
Third
Amendment dated December 15, 2006 to Consultancy between LVEP
Management LLC and Company Incorporated by reference to Exhibit
9.01 to
report on Form 8-K filed with the SEC on December 15,
2006.
|
Exhibit
10.38
|
2005
Stock Option Plan of the Company. Incorporated by reference to
Exhibit
Annex A to report on Schedule DEF 14A Proxy Statement filed with
the SEC
on May 15, 2006.
|
Exhibit
10.39
|
Agreement
and Plan of Merger dated March 29, 2006. Incorporated by reference
to
Exhibit Annex B to report on Schedule DEF 14A Proxy Statement filed
with
the SEC on May 15, 2006.
|
Exhibit
10.40
|
Consulting
Agreement dated June 1, 2006 by and between The Biologics Consulting,
Inc.
and the Company. Incorporated by reference to Exhibit 10.40 to
report on
Form 10-KSB filed with the SEC on February 13, 2007 (File No.
000-28489).
|
Exhibit
10.41
|
Consultancy
Agreement Change Order dated December 4, 2006 by and between
Pharm-Olam
International Ltd. and the Company. Incorporated by reference
to Exhibit
10.40 to report on Form 10-KSB filed with the SEC on February
13, 2007
(File No. 000-28489)
|
Exhibit
10.42
|
Agreement
dated October 28, 2006 by and between Apothecaries Ltd. and the
Company
Incorporated by reference to Exhibit 10.40 to report on Form
10-KSB filed
with the SEC on February 13, 2007 (File No.
000-28489).
|
Exhibit
10.43
|
Third
Lease Amendment Agreement dated October 1, 2006 by and between
the New
Jersey Economic Development Authority and the Company. Incorporated
by
reference to Exhibit 10.40 to report on Form 10-KSB filed with
the SEC on
February 13, 2007 (File No.
000-28489).
|
Exhibit
10.44
|
Sponsored
Research Agreement dated November 1, 2006 by and between University
of
Pennsylvania (Dr. Paterson Principal Investigator) and the Company.
Incorporated by reference to Exhibit 10.40 to report on Form
10-KSB filed
with the SEC on February 13, 2007 (File No.
000-28489).
|
Exhibit
14.1
|
Code
of Ethics. Incorporated by reference to Exhibit 14.1 to Report
on Form 8K
filed with the SEC on November 18,
2004.
|
Exhibit
21.1
|
Advaxis,
Inc., a Delaware corporation. Incorporated by reference to Exhibit
21.1 to
Post-Effective Amendment No. 1 to Form SB-2 filed with the SEC
on January
5, 2006
|
Exhibit
23.1**
|
Consent
of Goldstein Golub Kessler LLP
|
Exhibit
23.2
|
Consent of Reitler Brown & Rosenblatt LLC (included in Exhibit 6 above) |
Exhibit
24.1
|
Power
of Attorney (Included on the signature
page)
|
ADVAXIS,
INC.
|
||
|
|
|
By: | /s/ Thomas Moore | |
Thomas
Moore, Chief Executive Officer, and
Chairman
of the Board
|
SIGNATURE
|
TITLE
|
DATE
|
||
/s/
Thomas Moore
|
||||
Thomas
Moore
|
Chief
Executive Officer and Chairman of the Board
|
June
12, 2007
|
||
|
||||
/s/ Fredrick D. Cobb |
|
|||
Fredrick
D. Cobb
|
Vice
President of Finance (Principal Financial and Accounting
Officer)
|
June
12, 2007
|
||
|
||||
/s/ Roni Appel |
|
|||
Roni
Appel
|
Director
|
June
12, 2007
|
||
|
||||
/s/ Thomas McKearn | ||||
Thomas
McKearn
|
Director
|
June
12, 2007
|
||
/s/ James Patton | ||||
James
Patton
|
Director
|
June
12, 2007
|
||
/s/ Richard Berman | ||||
Richard
Berman
|
Director
|
June
12, 2007
|
||
/s/ Martin Wade | ||||
Martin
Wade
|
Director
|
June
12, 2007
|
ADVAXIS,
INC.
|
||
|
|
|
By: | /s/ Thomas Moore | |
Thomas
Moore, Chief Executive Officer, and
Chairman
of the Board
|
SIGNATURE
|
TITLE
|
DATE
|
||
/s/
Thomas Moore
|
||||
Thomas
Moore
|
Chief
Executive Officer, and Chairman of the Board
|
June
12, 2007
|
||
|
||||
/s/ Fredrick D. Cobb | ||||
Fredrick
D. Cobb
|
Vice
President of Finance (Principal Financial and Accounting
Officer)
|
June
12, 2007
|
||
|
||||
/s/ Roni Appel |
|
|||
Roni
Appel
|
Director
|
June
12, 2007
|
||
/s/ Thomas McKearn | ||||
Thomas
McKearn
|
Director
|
June
12, 2007
|
||
/s/ James Patton | ||||
James
Patton
|
Director
|
June
12, 2007
|
||
/s/ Richard Berman | ||||
Richard
Berman
|
Director
|
June
12, 2007
|
||
/s/ Martin Wade | ||||
Martin
Wade
|
Director
|
June
12, 2007
|
![]() |
800
Third Avenue, 21st
Floor
New
York, NY 10022-7604
Tel
(212) 209-3050
Fax
(212) 371-5500
|
June 11, 2007 |
Re:
|
Post-Effective
Amendment No. 1 to Registration Statement on Form SB-1 and Post-Effective
Amendment No. 3 to Registration Statement on Form SB-1 (SEC Commission
Files No. 333-132298 and 333-122504,
respectively)
|
Very
truly yours,
/s/
Reitler Brown & Rosenblatt LLC
|