Oragenics,
Inc.
Notes
to Financial Statements
(Unaudited)
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1.
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Organization
and Significant Accounting Policies
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Oragenics,
Inc. (formerly known as Oragen, Inc.) (the “Company” or “ONI”) was incorporated
in November 1996; however, operating activity did not commence until 1999. The
Company is dedicated to developing technologies associated with oral health,
broad spectrum antibiotics and general health benefits.
Basis of
Presentation
The
accompanying unaudited condensed financial statements as of March 31, 2009 and
December 31, 2008 and for the three months ended March 31, 2009 and 2008 have
been prepared in accordance with accounting principles generally accepted in the
United States of America (GAAP) for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes required by GAAP for complete
financial statements. In the opinion of management, the accompanying financial
statements include all adjustments, consisting of normal recurring accruals,
necessary for a fair presentation of the financial condition, results of
operations and cash flows for the periods presented. The results of operations
for the interim period March 31, 2009 are not necessarily indicative of the
results that may be expected for the year ended December 31, 2009 or any future
period.
These
financial statements should be read in conjunction with the audited financial
statements and notes thereto for the year ended December 31, 2008, which are
included in our Annual Report on Form 10-K filed with the Securities and
Exchange Commission on April 1, 2009. In that report the Company disclosed that
it expects to incur substantial expenditures to further develop each of its
technologies and that it believes its working capital will be insufficient to
meet the business objectives as presently structured and that without sufficient
capital to fund its operations, the Company will be unable to continue as a
going concern. The accompanying financial statements do not include any
adjustments that might result from the outcome of this uncertainty. However, the
Company currently believes that it will have sufficient resources to
commercialize selective products and that it will obtain funding to further
develop and commercialize other products.
Net loss
per share is computed using the weighted average number of shares of common
stock outstanding. Common equivalent shares from stock options and warrants are
excluded as their effect is anti-dilutive.
Income
taxes are accounted for under the asset and liability method. Deferred tax
assets and liabilities are recognized for future tax consequences attributable
to differences between the financial statement carrying amounts of existing
assets and liabilities and their respective tax bases and operating loss and tax
credit carryforwards. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. The effect
on deferred tax assets and liabilities of a change in tax rate is recognized in
operations in the period that includes the enactment date. Deferred tax assets
are reduced to estimated amounts expected to be realized by the use of a
valuation allowance.
In
September 2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income
Taxes, an interpretation of FASB Statements No. 109 ” (FIN 48). FIN
48 clarifies the accounting for uncertainty in income taxes by prescribing a
two-step method of first evaluating whether a tax position has met a more likely
than not recognition threshold and second, measuring that tax position to
determine the amount of benefit to be recognized in the financial statements.
FIN 48 provides guidance on the presentation of such positions within a
classified statement of financial position as well as on derecognition, interest
and penalties, accounting in interim periods, disclosure, and transition. FIN 48
was adopted by the Company effective January 1, 2007. As a
result of the implementation of Interpretation 48, the Company recognized a
$252,827 increase in the liability for unrecognized tax benefits that are
related to research and development credits, which was accounted for as a
reduction to the January 1, 2007 balance of the deferred tax asset
valuation allowance. The entire amount of this unrecognized tax benefit, if
recognized, would result in an increase to the deferred tax asset valuation
allowance, and would not have an impact on the effective tax rate.
The
Company files its income tax returns in the U.S. federal jurisdiction and in
Florida. With few exceptions, the Company is no longer subject to federal or
state income tax examinations by tax authorities for years before
2003.
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4.
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Fair
Value of Financial Instruments
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SFAS No.
157, Fair Value
Measurements (“SFAS 157”), defines fair value, establishes a framework
for measuring fair value in accordance with generally accepted accounting
principles, and expands disclosures about fair value measurements. SFAS 157
establishes a three-tier fair value hierarchy which prioritizes the inputs used
in measuring fair value as follows:
Level 1. Observable inputs
such as quoted prices in active markets;
Level 2. Inputs, other than
the quoted prices in active markets, that are observable either directly or
indirectly; and
Level 3. Unobservable inputs
in which there is little or no market data, which require the reporting entity
to develop its own assumptions.
The
Company does not have any assets or liabilities measured at fair value on a
recurring basis at March 31, 2009. The Company did not have any fair value
adjustments for assets and liabilities measured at fair value on a nonrecurring
basis during the three months ended March 31, 2009.
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5.
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Stock
Options Issued During the 1st
Quarter, 2009
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During
the quarter, the Company did not issue any stock options and there were no
forfeitures recorded. From January, 1, 2009 to the date of this
filing, 85,000 stock options previously granted have vested. Stock option
compensation expense of $18,944 was recorded and is a non-cash
expense. This amount is included in research and development and
general and administrative expenses in the accompanying statements of
operations.
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6.
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Outstanding
Warrants and Stock Options
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As of the
date of this filing there are approximately 5,777,778 warrants outstanding and
there are approximately 4,570,000 stock options have been granted that have not
been forfeited. The total number of outstanding warrants and unexercised stock
options is 10,347,778. If all warrants and stock options were exercised, the
total number of outstanding shares would be approximately
48,664,363.
The
Company recognizes revenue from the sales of product when title and risk of loss
pass to the customer, which is generally when product is
shipped. Grant revenues are recognized as the reimbursable expenses
are incurred over the life of the related grant.
Inventories
are stated at the lower of cost or market. Cost, which includes
material, labor and overhead, is determined on a first-in, first-out
basis.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The
following information should be read in conjunction with the Financial
Statements, including the notes thereto, included elsewhere in this Form 10-Q.
This discussion contains certain forward-looking statements that involve risks
and uncertainties. Our actual results and the timing of certain events could
differ materially from those discussed in these forward-looking statements as a
result of certain factors, including, but not limited to, those set forth herein
and elsewhere in this Form 10-Q.
During
the past few months, we have transitioned from strictly a research and
development company, and have started the commercialization of some of
our technologies. Although we feel that we have made significant
progress in many areas, the financial condition of the Company has forced us to
temporarily halt many of the initiatives we had in place. At present,
we are focusing the entire efforts of the Company to secure appropriate
financing.
During
the quarter and up to the date of this filing, the following significant events
occurred:
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Dr. Martin Handfield joins the
Company. On Jan 1, 2009, Dr. Martin
Handfield was appointed to the new position of Director, Research and
Development. Prior to joining the Company, Dr. Handfield was a tenured
faculty member at the Center for Molecular Microbiology and Department of
Oral Biology, University of Florida. Martin received his Ph.D. from Laval
University in Canada and is a co-inventor of the Company’s IVIAT platform
technology that enables the rapid identification of novel and potentially
important gene targets associated with the natural onset and progression
of human infections.
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The ONI BioPharma name change
was abandoned. On January 30, 2009, we announced that we would not
seek shareholder approval to change our corporate name to ONI BioPharma
Inc., but would continue to be registered as Oragenics,
Inc. This action was taken to reduce investor confusion in
light of our delisting from the NYSE Alternext and listings on the (OTC)
Bulletin Board and NYSE Euronext Alternext
Paris.
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Garden of Life. On
February 4, 2009, we announced that Garden of Life has been awarded rights
to use our oral-care probiotic ingredient, ProBiora3. This agreement gives
Garden of Life exclusive rights to use ProBiora3 in the natural products
market. ProBiora3 is a patent-pending probiotic formula containing a blend
of three bacteria that work below the gum line to address oral health at
its root cause.
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Management & Board of
Directors Changes. The following changes to the
Management team and the Board of Directors occurred during the first
quarter and the subsequent weeks until the time of this
filing:
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On
March 17, 2009, we announced that Stanley Stein resigned from his position
as the Company’s President and Chief Executive Officer, that David Hirsch
was appointed acting Chief Executive Officer and would remain as the
Company’s Chief Financial Officer, and that Robert Zahradnik, Vice
President of Business Development, was appointed acting Chief Operational
Officer.
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On
April 24th,
2009, Robert Zahradnik resigned as Vice President of Business Development
and acting Chief Operating Officer.
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On
May 9th,
2009, Dr. Marc Siegel resigned as a Director of the
Company.
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Strategic
Alternatives. On May 7th,
we announced that we would continue to seek strategic alternatives to fund
the Company such that it can continue operations. These
alternatives include, but are not limited to, raising capital through the
sale of equity, the sale of specific business units, and the sale of the
entire Company. If our efforts are unsuccessful, we may be forced to
discontinue operations and liquidate the Company’s
assets. There can be no assurances that we will be able to fund
the Company or that the liquidation of the Company’s assets can be
avoided.
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Financial
Position
Our
current financial condition coupled with the difficult economic climate has left
us with a limited number of options to adequately fund the Company such that we
can continue operations. While we remain optimistic that we will find an
alternative that will allow us to continue to operate as a going concern, there
can be no assurance that we will be able to do so. These alternatives include,
but are not limited to, raising capital through the sale of equity, the sale of
specific business units, and the sale of the entire Company. If our efforts are
unsuccessful, we may be forced to discontinue operations and liquidate the
Company’s assets or file for protection from our creditors under Chapter 11 of
the Federal Bankruptcy Code.
Since our
inception, the Company has funded a significant portion of its operations from
the public and private sales of its securities. There have been no significant
revenues from operations during the last two years. All of our revenues have
been from sponsored research agreements and various governmental grants. At this
time we have not generated meaningful revenues from sales of products. However,
if we are able to raise additional capital to continue operations, we anticipate
meaningful purchase orders and/or revenues from the sale of EvoraPlusTM, our
oral probiotic, as early as the 3rd quarter
of the current calendar year. We also anticipate that in the coming
months, we will have opportunities to partner with or license to large global
concerns for some of our technologies. It is also likely that we may
be able to negotiate upfront payments for these potential partnerships and/or
licenses.
Due to
the strained financial condition of the Company, we have reduced our operational
expenses and on April 30th, 2009,
to conserve capital, we terminated the employment of thirteen employees, leaving
us with five full-time employees who are presently working for deferred
compensation and fringe benefits.
Business
Objectives and Milestones
We have a
number of products and platforms. For ease in understanding, we have broken
these products and platforms down into four distinct Divisions:
(1)
Consumer Healthcare, which consists of ProBiora3TM, the
EvoraPlusTM,
Teddy’s PrideTM and
EvoraKidsTM as well
as the LPT3-04TM weight
loss agent;
(2)
Diagnostics, which consists of the PIVIATTM and
PCMATTM
platforms;
(3)
Antibiotics, which consists of the DPOLTTM
lantibiotic synthesis platform; and
(4)
Replacement Therapy, which consists of our SMaRTTM
Replacement Therapy technology.
Consumer
Healthcare
The
specific goal for our consumer products is to rapidly and effectively
commercialize ProBiora3TM and
LPT3-04TM.
ProBiora3TM
(Probiotics)
ProBiora3TM
contains three naturally occurring, live microorganisms that helps maintain
dental and oral health when administered to the host in adequate amounts. The
use of yogurt containing live
Lactobacillus cultures is an example of a probiotic
application. We will market ProBiora3TM under
self-proclaimed GRAS (“Generally Recognized As Safe”) status, which will
expedite our marketing efforts because it relieves us of the need for extensive
regulatory oversight. Two sets of subjects completed our ProBiora3TM human
study in 2006, and we believe the results confirmed that the product is safe for
human use and demonstrated a substantial effect of Probiora3 in reducing the
levels of specific bacteria in the mouths of young, healthy adult
subjects.
We have
developed a bifurcated strategy where we will establish two separate brands; (1)
where the actual technology, ProBiora3TM, will
be branded as an active ingredient for licensing and private labeling, and (2)
where we will market products under the three house brand names
below. Our house brands contain different ratios, or blends, of
the three natural strains contained in ProBiora3TM and
potentially different delivery mechanisms such that each product will be
tailored to the needs of specific markets. The products currently in production
or the product pipeline are:
· EvoraPlusTM,
a product with equal weight of all three strains that is optimally designed for
the general consumer
market.
· Teddy’s PrideTM,
a product that has a mixture which focuses exclusively on gum disease, a problem
endemic with cats
and dogs.
· EvoraKidsTM,
a product that has a greater concentration of strains designed to reduce dental
caries, which is
more of an issue for children.
Other
house products with different formulations and delivery systems are also in
planning. EvoraPlusTM was the
first product to market with Teddy’s Pride TM
expected to follow in the coming months. EvoraPlusTM is a
probiotic mint packaged in a 60 unit box with four 15 dose blister packs. The
intended usage is to take one mint twice a day after brushing. As such, one box
is designed to include a one-month’s supply of EvoraPlus TM. We
have completely outsourced the manufacturing and fulfillment
processes. Our manufacturer is a large, GMP certified manufacturer
with the ability to scale production to meet our expected needs.
Marketing
Progress
Anticipated
sales of EvoraPlusTM have
been slow to materialize for a variety of reasons including; the weakening
global economic environment, the timeliness of the product’s launch, and delays
in the adoption rates by mass retailers. Sales have also been
hampered due to the lack of appropriate funds available to drive our marketing
efforts.
Our
initial efforts to drive sales of our house products through the production of a
one-minute television spot have been delayed. Initial testing of our
spot ad was not satisfactory. However, we are re-formatting our spot
ad and we anticipate that the new version will be more successful in generating
demand for our products. However, our ability to purchase adequate
media time may be limited due to a lack of available capital.
We have
made significant progress in our efforts to generate interest in the sale or
licensing of ProBiora3TM as an
active ingredient. We have had multiple, meaningful discussions with
several large, global consumer products companies who are interested in
incorporating the technology into products already in the stream of
commerce. Many of these products are well known and used by millions
of people on a daily basis. We anticipate that it is likely that we
will be able to sell or license ProBiora3TM to one
or more of these companies by the end of the year.
We have
made significant progress in our efforts to procure distributors to penetrate
global markets. We are in negotiations with a large, multi-billion
dollar Japanese company that has expressed an interest in obtaining exclusive
distribution right to Japan and the Pacific Rim. We are also in
discussions with a large distributor for the European markets. We
anticipate, assuming we are able to secure funding, that we will have
distributors in place to cover Asia, Europe and Latin America by the end of the
year. We are also hopeful that we will be able to secure upfront
payments for exclusivity in certain regions.
Despite
our efforts to sell our house products and commercialize ProBiora3TM, there
can be no assurances that we will meet our timeline for commercialization or
that the product will meet the sales projections we have
anticipated.
LPT3-04TM
LPT3-04TM is a
small molecule weight management agent for which we filed a U.S. patent
application on April 5, 2006 to protect our intellectual property rights to the
agent and its analogs. As a natural substance, LPT3-04TM is
orally available, and we believe it has an excellent safety and tolerability
profile. As with ProBiora3TM,
LPT3-04TM would
fall under the self-proclaimed GRAS status and we will be able to market
products containing the technology without the burden of substantial regulatory
oversight in most, if not all, of the markets in which we plan on introducing
products.
Our
strategy for our LPT3-04TM is
similar to that of our oral probiotic in that we plan on developing a bifurcated
strategy where we market the technology as an active ingredient for licensing or
private labeling and we develop a house brand to market to consumers directly
and through mass retail. We plan on developing several products under the house
brand that will vary by formulation and delivery mechanism. We will also develop
a product for the Pet Market since obesity is a problem that is present in the
animal markets as well. Design work for the house brand is in progress and we
anticipate having it completed by year’s end. We may also market directly to
Medical Professionals and Veterinary Offices.
We are
currently in the process of developing an adequate delivery system for
LPT3-04TM. Due
to capital constraints, this process has been delayed and we now anticipate that
this process will be complete by the end of the third quarter, 2009. Once this
has been accomplished, we plan on initiating subsequent and more comprehensive
human trials. These trials are currently expected to begin in late 2009 and
should last approximately four to five months. If the results are
satisfactory, we will initiate marketing efforts immediately thereafter; however
there can be no assurances that the results of our contemplated clinical
trials.
Diagnostics
The goal
of our Diagnostics unit is to utilize the PIVIATTM and
PCMATTM
platforms to identify and secure intellectual property rights to gene targets
associated with the natural onset and progression of infections, cancers and
other diseases in humans, animals, and agricultural products. We believe these
platforms provide a number of profitable business models from which to realize
value.
PIVIATTM and PCMATTM
Proteomics-based In Vivo Induced Antigen
Technology (PIVIATTM) is a
platform technology that enables rapid identification of novel targets for use
in the diagnosis and treatment of human infectious diseases. The method is
faster, more cost effective, and more sensitive than other methods currently in
use to identify such targets. As an example, a recent tuberculosis project has
yielded 44 novel targets for
Mycobacterium tuberculosis that are currently being analyzed for their
use in vaccine and diagnostic strategies.
We are
currently in discussions with various collaborators to look at specific
diagnostic markers and to develop vaccines utilizing our PIVIATTM gene
targets.
Proteomics-based
Change Mediated Antigen Technology (PCMATTM) is a
platform technology that was derived from and greatly extends the potential
applicability of PIVIATTM. This
technology rapidly identifies proteins (and their genes) that are expressed when
a cell undergoes any sort of change. PCMAT TM has
been used to identify proteins of plants that are expressed when it becomes
infected. Such genes are excellent targets for manipulation to increase the
resistance of the plant to infection. It has also been used to identify novel
proteins of human bowel cells that are expressed when the cell undergoes
transformation to a cancerous cell. Such proteins are excellent targets for new
diagnostics and therapeutic strategies. PCMATTM has
the potential to study an extraordinary range of medical and agricultural
applications.
The first
major commercial effort that we have undertaken utilizing the PCMATTM
platform has been to extract genetic targets from tissue samples containing
colorectal cancer. Colorectal cancer affects millions of people worldwide. The
current “Gold Standard” in the detection of colorectal cancer is the use of a
colonoscopy. Due to the invasive nature and cost of colonoscopies, patient
compliance is low. As such, many cases of bowel cancer go undetected until the
cancer has reached an advanced stage. Using the PCMATTM
diagnostic platform, we have discovered what we believe to be unique genetic
markers that appear during the earliest stages of colorectal cancer. As
announced last summer, we entered into a Collaboration Agreement with a major,
global diagnostics company regarding our gene targets for various stages of
colorectal cancer that we discovered using the PCMATTM
platform. Although we are highly optimistic about this Collaboration Agreement,
there can be no assurances that this Agreement will result in a diagnostic test
that will be marketed to appropriate health care professionals, nor can there be
any assurance that upon further examination, the diagnostic company will elect
to use these markers. We anticipate that the diagnostics company will
finish validation by the end of the third quarter, 2009, at which point they
will likely make a decision on whether to include our targets into a diagnostic
test. If they choose to do so, our agreement provides for the payment
of milestone fees upon the application of a 510K.
At
present, we are in discussions with major global diagnostics companies to
license our platforms and gene targets. We are optimistic about our
prospects. However, there can be no assurances that these discussions
will result in licensing or partnership agreements. We also are
further developing our strategy to include the subsequent validation of gene
targets after they are identified through our two platforms. This subsequent
validation will make discovered targets significantly more valuable. It will
also afford us with the ability to continue the development process in-house and
potentially design our own diagnostic tests. To that end, we have identified a
number of diseases that hold the greatest promise for future revenues from a
diagnostic test. We plan on utilizing our platforms to discover gene targets for
these diseases. However, these plans have been delayed due to capital
constraints. Once proper funding is secured, we will then proceed
accordingly.
If we are
able to secure adequate financing, we intend to use our Mexican Subsidiary in
conjunction with the Instituto de Biolotecnología, Universidad Nacional Autonoma
de Mexico (“IBUNAM”), the premier biotechnology institute in Mexico, for a
number of PIVIATTM and
PCMATTM
projects. Most of these projects will focus on diseases that are problematic to
Mexico and Latin America such as cholera and dengue fever. Projects will not
only include human diseases but also diseases present in agriculture. As well as
applicable problems that are present in the mining industry.
Antibiotics
The
cornerstone of our Antibiotics Division is the DPOLTTM
(Differentially Protected Orthogonal Lantionine Technology) Synthetic Chemistry
Platform, which affords us the ability to synthesize a unique class of
antibiotics known as lantibiotics.
DPOLTTM
(Differentially Protected Orthogonal Lantionine Technology)
DPOLTTM is a
novel organic chemistry synthesis platform that will enable large scale, cost
effective production of clinical grade MU1140 and 50 other known lantibiotics.
Over the past 80 years, efforts to devise methods to investigate the usefulness
of this class of antibiotics have met with uniform failure. DPOLTTM is
anticipated to lead to 6-10 new antibiotics with novel mechanisms of action.
This represents a substantial potential pipeline of antibiotics to replace ones
that are currently failing due to the development of bacterial
resistance.
As
mentioned earlier, we announced the successful synthesis of an antibiotic using
our proprietary DPOLTTM
technology. The molecule belongs to a class of antibiotics called Lantibiotics
that were first discovered over 80 years ago. Although there are now over 50
different Lantibiotics known, this is the first report of a cost-effective
method for making one in sufficient amounts and with sufficient purity to enable
comprehensive testing and commercial viability.
This
initial antibiotic is very closely related to our lead antibiotic, MU 1140,
which has the potential to treat a wide variety of infections, including those
caused by MRSA and other drug resistant Gram positive bacteria. Domestically,
hospital borne infections alone have been on the rise, with an estimated
two-million patients contracting dangerous infection annually leading to
one-hundred-thousand deaths. Preliminary studies indicate that MU 1140 may be
the first new antibiotic in 35 years for the treatment of tuberculosis. In
addition to MU 1140, this technology will allow us to synthesize all 50 of the
known lantibiotics and to conveniently modify their structures in order to
improve their usefulness as antibiotics for the treatment of infectious
diseases. In effect, DPOLTTM will
provide a much needed pipeline of antibiotics at a time when drug resistant
bacteria are on the rise.
As a
first step in further development, the Company has retained a leading contract
manufacturer to refine and scale-up GMP production of the synthetic MU 1140
analog to achieve sufficient quantities for it to be fully tested for regulatory
approval. It is estimated that the regulatory process will take a minimum of
three years before this drug could become available. Other lantibiotics will
follow as they are developed and tested.
Last
fall, we announced that we were successful in using the DPOLTTM
platform to synthetically produce an analog of the MU 1140
molecule. We are now in the process of having the synthetic version
of MU 1140 scaled to production by Almac Sciences, one of Europe’s largest and
most reputable peptide manufacturers. This endeavor is more than half way
complete; however, due to capital constraints we have been forced to put the
project on hold. Once adequate financing is secured, we will complete
the process of scaling MU 1140, which we anticipate should take an additional
four to five months. This, in turn, should provide us with enough
synthetic MU 1140 to conduct preclinical testing. Once preclinical
testing is complete, we will seek partnership and/or licensing opportunities
with major pharmaceutical companies with the intent to fund subsequent phase I,
II & III FDA clinical trials.
Replacement
Therapy
Our
Replacement Therapy Division is centered on SMaRTTM
Replacement Therapy, our product for dental caries (tooth decay).
SMaRTTM
Replacement Therapy
SMaRTTM
Replacement Therapy™ is a professional/Rx product intended for the prevention of
dental caries (tooth decay). Dental caries remain a major health problem
afflicting a majority of the population in the United States and worldwide.
Lactic acid production by the oral bacterium Streptococcus mutans has long
been known to be integral to the pathogenic process for dental caries. Oragenics
Inc.’s replacement therapy technology replaces the indigenous, acid-producing
S. mutans with a
SMaRTTM
effector strain, which has been genetically modified so as not to produce the
acid associated with caries formation.
The
wild-type S mutans
originally used for construction of the SMaRT strain was isolated from a
human subject and was carefully selected based on its ability to produce the
antibiotic, MU1140. MU1140 has been shown to kill all other strains of S. mutans that it has been
tested against. The SMaRTTM
effector strain was generated by transforming this wild-type parent strain with
recombinant DNA that introduced a large deletion mutation in the gene for
lactate dehydrogenase (LDH) eliminating the strain’s ability to produce lactic
acid.
Our
SMaRTTM
effector strain for the replacement therapy of dental caries has the following
advantages over existing decay-prevention technologies: (1) a single treatment
regimen involving application of SMaRTTM cells
onto patients’ tooth surfaces using a cotton tipped swab for five minutes has
the potential to provide lifelong protection against most tooth decay; (2) the
possibility of deleterious side-effects are negligible since the effector strain
is essentially identical to the microorganism which is found universally on the
teeth of humans; (3) minimal patient education and compliance is
required.
SMaRTTM
Replacement Therapy offers the potential for lifelong protection against dental
caries following a single, painless application of a genetically modified
bacterial strain to the surfaces of the teeth. This technology is currently
approved for FDA phase 1b clinical trials. At present, our plans are to initiate
phase 1b trials once adequate financing has been achieved. We
anticipate the cost of conducting phase 1b to be under $1MM. We also
anticipate that phase 1b trials will take less than six months to
complete. Once phase 1b trials have been completed and safety has
been established, we plan on seeking partnerships and/or licensing arrangements
with major pharmaceutical companies. It would be our intent to use
these partnerships and/or licensing arrangements to fund subsequent clinical
trials, which we anticipate will be costly and may take several years to
complete.
Global
Expansion
Although
we are domiciled in the United States, we feel that there are numerous
advantages in utilizing overseas talent and markets for a variety of our
products and technologies. At present, we have established a Mexican
Subsidiary and initiated operations in Mexico earlier this year; however, due to
capital constraints, our operations in Mexico have been temporarily
halted. Once funding is secured, we intend on reinitiating our
efforts in Mexico on several fronts. Our common stock is currently
listed on the NYSE Paris Alternext Exchange and we have investigated
establishing operations in France; however, at present, we have temporarily
halted our initiatives to expand overseas due to capital
constraints.
Critical
Accounting Policies
Our
discussion and analysis of our financial condition and results of operations are
based upon our financial statements, which have been prepared in accordance with
accounting principles generally accepted in the United States of America. The
preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America requires us to make estimates
and assumptions that affect reported amounts and related disclosures. We
consider an accounting estimate to be critical if it requires assumptions to be
made that were uncertain at the time the estimate was made; and changes in the
estimate or different estimates that could have been made could have a material
impact on our results of operations or financial condition. Our financial
statements do not include any significant estimates other than stock based
compensation that would have a material impact on our results of operations or
financial condition.
New
Accounting Pronouncements
In March
2008, the FASB issued SFAS No. 161, Disclosures about Derivative
Instruments and Hedging Activities — an amendment of FASB Statement
No. 133 (“SFAS 161”). This statement amends
SFAS No. 133 by requiring enhanced disclosures about an entity’s
derivative instruments and hedging activities, but does not change
SFAS No. 133’s scope or accounting. SFAS 161 requires increased
qualitative, quantitative and credit-risk disclosures about the entity’s
derivative instruments and hedging activities. SFAS 161 is effective for
fiscal years, and interim periods within those fiscal years, beginning after
November 15, 2008, with earlier adoption permitted. The adoption of SFAS
161 did not have a material impact on the Company’s financial
statements.
In April
2008, the FASB issued FSP 142-3, Determination of the Useful Life of
Intangible Assets. FSP No. 142-3 amends the factors that should be
considered in developing renewal or extension assumptions used to determine the
useful life of a recognized intangible asset under
SFAS No. 142, Goodwill and Other Intangible
Assets. FSP No. 142-3 is effective for fiscal years beginning after
December 15, 2008. The implementation of this standard does not impact on
our consolidated financial position and results of operations.
In June
2008, the FASB issued FSP EITF No. 03-6-1, Determining Whether
Instruments Granted in
Share-Based Payment Transactions Are Participating
Securities. Under EITF No. 03-6-1, unvested share-based payment
awards that contain rights to receive nonforfeitable dividends (whether paid or
unpaid) are participating securities, and should be included in the two-class
method
of
computing EPS. EITF No. 03-6-1 is effective for fiscal years beginning
after December 15, 2008, and interim periods within those years.
The Company is not affected by the impact of EITF No. 03-6-1 on its
financial statements.
In
October 2008, the FASB issued FSP No. FAS 157-3, Determining the Fair Value of a
Financial Asset When the Market for That Asset is Not Active. FSP
No. 157-3 clarifies the application of SFAS No. 157, which the
Company adopted as of January 1, 2008, in cases where a market is not
active. The Company has considered the guidance provided by FSP No. 157-3
in its determination of estimated fair values as of December 31, 2008, and
there is not an impact to the financial statements and results of
operations.
Results
of Operations
Three
Months Ended March 31, 2009 and 2008
We had
$124,272 in revenues in the three months ended March 31, 2009 compared with
$125,000 in revenues in the same period in 2008. The revenue was generated from
the National Science Foundation (NSF) Phase II grant for work utilizing the
Company’s proprietary DPOLT TM
technology in the amount of $100,000 and EvoraPlus product sales in the amount
of $24,272. Our first quarter operating expenses increased by 126% to
$2,092,819 in the three months ended March 31, 2009 from $926,095 in the same
period in 2008. Research and development (R&D) expenses increased 22.4% to
$585,664 in the three months ended March 31, 2009 from $478,373 in the same
period in 2008. This increase was primarily due to consulting fees supporting
our DPOLT
TM platform. Selling, general and administration
(S,G&A) expenses increased 236.6% to $1,507,155 in the three months ended
March 31, 2009 from $447,722 in the same period in 2008. The increase can be
attributed to the Company’s hiring of a new management and new sales team
totaling $302,408 in salaries and fringe benefits. Legal fees
increased by $257,615 to support our rights offering initiative, the Alternext
Paris exchange and services to expand our global business in Mexico and
France. Consulting fees for investor relations increased by $206,084
due to the need for several investment firms to assist with our cash raising
activities. Other major S,G&A increases include travel and living
expenses $155,220 to support global growth initiatives and advertising expenses
$90,341 for our EvoraPlus product.
Interest
income decreased 88.7% to $521 in the three months ended March 31, 2009 from
$4,599 during the same period in 2008. This decrease is primarily due to the
Company’s reduced cash position.
We
incurred net losses of $1,980,351 and $791,636 during the three months ended
March 31, 2009 and 2008, respectively. The increase in our net loss was
principally caused by the increase in selling, general and administrative
expenses.
Liquidity
and Capital Resources
Since our
inception, we have funded our operations through the sale of equity securities
in private placement and our initial public offering, the sale of equity
securities and warrants in private placements, debt financing and
grants. During the first quarter of 2009, the Company has received
$100,000 of restricted funds as part of the $500,000 NSF Phase II grant to
advance development of its small peptide antibiotic synthesis program using the
Company’s proprietary DPOLTtm. This
federal grant will support studies focused on the synthesis and testing of our
lead antibiotic, MU 1140.
Our
operating activities used cash of $1,125,949 for the three months ended March
31, 2009 and $531,881 for the three months ended March 31, 2008. Our working
capital was a deficit of $2,405,773 as of March 31, 2009. Cash used by
operations in the three months ended March 31, 2009 resulted primarily from our
net loss from operations of $1,980,351.
Our
investing activities provided net reduction in cash of $9,074 during the three
month period ended March 31, 2009 as compared with a net increase in cash of
$27,250 for the same period ending March 31, 2008.
Our
financing activities for the three months ended March 31, 2009 provided net cash
of $27,013 from the net proceeds of a short term note payable to finance our
Product Liability insurance. Additional details of our financing
activities are provided below:
Warrant Exercises – Q1 2008 –
On August 7, 2007, we closed on $1,171,591 in equity based
financing. We issued a total of 4,600,000 shares of restricted common stock and
warrants to acquire 4,600,000 shares of common stock in a private placement to
accredited investors. The shares were sold to accredited investors at $0.25 per
share, except that per AMEX requirements, our former CEO, Dr. Ronald Evens
acquired his shares at $0.44 per share, which was the closing share price on
August 7, 2007. Each warrant to purchase shares of common stock is
exercisable at the price of $0.58 per share. The unexercised warrants expired on
August 8, 2008 (the “August 2007 Warrants”). On January 31, 2008 we
amended the August 2007 Warrants, to reduce the exercise price to $0.44, which
was the fair market value on the date of the amendment for a designated period
of time (from January 28, 2008 to February 29, 2008). In
February 2008, amended Warrants, of 4,536,364 were issued upon exercise at the
amended exercise price resulting in additional working capital proceeds to us of
$1,996,000. The remaining unexercised August 2007 warrants expired unexercised
on August 8, 2008.
NSF SBIR Grants – On
February 15, 2008, we were awarded a two year NSF SBIR Phase II grant to
advance development of our small peptide antibiotic synthesis program using the
Company’s proprietary DPOLTtm. This
federal grant will support studies focused on the synthesis and testing of our
lead antibiotic, MU 1140. While the grant will total $500,000, to date we have
received $225,000 of these restricted funds with the remaining balance to be
issued during the remaining two-year grant period.
Short Term Notes Payable – The
Company entered into a short term note payable for $53,087 with an interest rate
of 5.75% in March 2009 to finance product liability insurance. This
note matures on January 10, 2010. The Company entered into a short
term note payable in June 2008 with an interest rate of 5.75% to finance D&O
and employment related practices liability insurance. At December 31,
2008 the balance due was $27,687. There were no loans during the year
2007.
Line of Credit – On October
20, 2008, the Company obtained from Signature Bank of New York, a revolving line
of credit in the amount of up to $1,000,000, for the purpose of providing
working capital to the Company. It is secured by cash collateral of
the Company in the same amount deposited with Signature Bank, bears interest at
the Prime Rate of Signature Bank, as effective from time to time, and has a
final maturity of October 20, 2009. Other than submission of periodic
financial information of the Company to Signature Bank, the loan documentation
evidencing the revolving line of credit does not contain any financial
covenants. On January 21, 2009, this line of credit was terminated by
the Company.
Promissory Notes – On April
15th
2009 we entered into a loan agreement with an accredited investor for
a short term note in the amount of $100,000. The note matures
on April 15, 2011 and bears interest at the rate
of 15% per annum. In connection with this borrowing we also
issued warrants to acquire 100,000 shares of our common stock at an
excercise price of $.50 per share and such warrants are exerciseable for five
years. In addition, on May 4th
2009 we borrowed $32,556 from Dr. Jeffery Hillman, our founder, Chief
Science Officer and director. This borrowing is to be repaid upon demand
and does not bear interest. The proceeds from this borrowing
were used to purchase inventory for our Consumer Health Care products
division.
Our business is based on
commercializing entirely new and unique technologies, and our current business
plan contains a variety of assumptions and expectations that are subject to
uncertainty, including assumptions and expectations about manufacturing
capabilities, clinical testing cost and pricing, continuing technological
improvements, strategic licensing relationships and other relevant matters.
These assumptions take into account recent financings, as well as expected but
currently unidentified additional financings. We have
experienced losses from operations during the last three fiscal years and have
an accumulated deficit of $21,972,885 as of March 31, 2009. The net
loss from operations for the first quarter of 2009 was
$1,980,351. Cash used in operations for the three months ended March
31, 2009 was $1,125,949. As of March 31, 2009, our principal source
of liquidity was $57,923 of cash and cash equivalents. These
operating results occurred while developing and attempting to commercialize and
manufacture products from entirely new and unique technologies. Our business
plan requires significant spending related primarily to clinical testing
expenditures, as well as conducting basic research. These factors
place a significant strain on our limited financial resources and adversely
affect our ability to continue as a going concern. Our ultimate
success depends on our ability to continue to raise capital for our
operations.
Because
of our limited available financial resources, we have continued to adopt several
approaches to reduce expenditures by reducing our matching contributions for the
employee retirement plan, appreciably reducing travel and other operating costs,
decreasing the use of outside consultants and delaying the production of
additional supplies of our SmaRT Replacement Therapy™ technology to be used in
later clinical studies. As of March 31, 2009 and December 31, 2008
deferred payments totaling $143,583 were owed to Jeffrey D. Hillman, David
Hirsch, Stanley Stein and $34,000 to members of the former Board of Directors
and Audit Committee and are included in the accompanying balance sheets in
accounts payable and accrued expenses as of March 31, 2009 and December 31,
2008. These salary payments and meeting fees were agreed to be deferred
until such time as we obtain sufficient funding that payment can be
made. There is no time period on the payment of the deferred amounts
concerning our officers and former directors. The deferrals of
payments to our officers and former directors, do not reduce our expenses, but
serve to preserve our limited cash resources to the extent necessary to maintain
our operations.
Our
capital requirements for the remainder of 2009 will depend on numerous factors,
including the success of our commercialization efforts and of our research and
development, the resources we devote to develop and support our technologies and
the success of pursuing strategic licensing and funded product development
relationships with external partners. Subject to our ability to generate revenue
and cash flow from our consumer products and our ability to raise additional
capital , including through possible joint ventures and/or partnerships, we
expect to need to incur substantial expenditures to further commercialize or
develop each of our technologies including continued increases in costs related
to research, preclinical testing and clinical studies, as well as significant
costs associated with being a public company. We will require substantial funds
to conduct research and development and preclinical and Phase I clinical testing
of our licensed, patented technologies and to develop sublicensing relationships
for the Phase II and III clinical testing and manufacture and marketing of any
products that are approved for commercial sale. We must generate additional
capital resources to enable us to continue as a going concern. Our plans include
seeking financing, alliances or other partnership agreements with entities
interested in our technologies, or other business transactions that would
generate sufficient resources to assure continuation of our operations and
research and development programs as well as seeking equity
financing.
Our
future success depends on our ability to continue to raise capital and
ultimately generate revenue and attain profitability. We cannot be certain that
additional capital, whether through selling additional debt or equity securities
or obtaining a line of credit or other loan, will be available to us or, if
available, will be on terms acceptable to us. If we issue additional securities
to raise funds, these securities are likely to have rights, preferences, or
privileges senior to those of our common stock, and our current stockholders may
experience substantial dilution.
To date,
we have not obtained financing sufficient to support our plans going
forward. Until such time as additional financing for our operations
is obtained, we expect to continue to need to curtail our spending and we could
cease operations. While we continue to focus on our products and
technologies, we do not have sufficient capital resources to market our products
and complete the development of our technologies. We had a working
capital deficit at March 31, 2009 of $2,405,773. Our currently available
cash and cash equivalents of $57,923 is insufficient to enable us to
continue to operate beyond May 2009. Our cash and cash equivalent
position is currently less than our total accounts payable. In the
event adequate capital is not raised we would need to curtail or cease all
operations until we are able to raise additional capital or we could seek to
reorganize under the protection of Federal Bankruptcy Laws. In
addition, we expect to explore strategic alternatives that may be available to
us and our technologies.
ITEM
4T. CONTROLS AND PROCEDURES
Evaluation
of Disclosure Controls and Procedures
We
maintain “disclosure controls and procedures,” as such term is defined in Rule
13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that
are designed to ensure that information required to be disclosed in our Exchange
Act reports is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commission rules and forms, and
that such information is accumulated and communicated to our management,
including our Chief Executive Officer and Chief Financial Officer, as
appropriate, to allow timely decisions regarding required disclosure. We
conducted an evaluation (the “Evaluation”), under the supervision and with the
participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer
(“CFO”), of the effectiveness of the design and operation of our disclosure
controls and procedures (“Disclosure Controls”) as of the end of the period
covered by this report pursuant to Rule 13a-15 of the Exchange Act. Based on
this Evaluation, our CEO and CFO concluded that our Disclosure Controls were
effective as of the end of the period covered by this report.
Changes
in Internal Controls
We have
also evaluated our internal controls for financial reporting, and there have
been no significant changes in our internal controls or in other factors that
could significantly affect those controls subsequent to the date of their last
evaluation.
PART
II – OTHER INFORMATION
We are
not a party to any pending legal proceeding that is not in the
ordinary course of business or otherwise material to our financial condition or
business. Given our current financial condition it is possible
however that we could experience an increase in claims from creditors for which
we do not currently have the financial resources to defend.
In
addition to the other information set forth in this Form 10-Q, you should
carefully consider the factors discussed in Part I, Item 1A, subsection “Risk
Factors” of our Annual Report on Form 10-K for the fiscal year ended
December 31, 2008 which could materially affect our business, financial
condition or future results of operations. The risks described in our Annual
Report on Form 10-K for the fiscal year ended December 31, 2008 are
not the only risks that we face. Additional risks and uncertainties not
currently known to us or that we currently deem to be immaterial may also
materially adversely affect our business, financial condition and future results
of operations. Other than as set forth below, there have been no material
changes from the risk factors previously disclosed in Item 1A, subsection “Risk
Factors” to Part I of our Annual Report on Form 10-K for the fiscal year
ended December 31, 2008.
You
should carefully consider the risks described below before making an investment
decision in our securities. These risk factors are effective as of the date of
this Form 10-Q and shall be deemed to be modified or superseded to the extent
that a statement contained in our future filings modifies or replaces such
statement. All of these risks may impair our business operations. The
forward-looking statements in this Form 10-Q involve risks and uncertainties and
actual results may differ materially from the results we discuss in the
forward-looking statements. If any of the following risks actually occur, our
business, financial condition or results of operations could be materially
adversely affected. In that case, the trading price of our stock could decline,
and you may lose all or part of your investment.
Risks
Related to Our Business
We
have a limited operating history with significant losses and expect to continue
to experience losses for the foreseeable future and our independent auditors
have expressed doubt about our ability to continue as a going
concern.
We have
yet to establish any history of profitable operations. Our
profitability will require the successful commercialization of one or more of
the technologies we either license or own. Since our organization, we have
incurred operating losses and negative cash flow from operating activities as a
result of minimal sales coupled with our significant clinical development,
research and development, general and administrative, sales and marketing and
business development expenses. Furthermore, our cash burn rate and expenses have
recently increased significantly due to our aggressive commercialization,
marketing and international initiatives. We expect to incur losses for at least
the next several years as we expand our sales and marketing capabilities, make
use of the sales and marketing capabilities of third parties and continue our
clinical trials and research and development activities. Losses have
totaled approximately:
$1,980,351
for the quarter ended March 31, 2009
$6,021,742
for the year ended December 31, 2008
$2,311,712
for the year ended December 31, 2007
$2,935,719
for the year ended December 31, 2006
These
losses, among other things, have had and will continue to have an adverse effect
on our working capital, total assets and stockholders’ deficit. In light of our
recurring losses, accumulated deficit and cash flow difficulties, the report of
our independent registered public accounting firm on our financial statements
for the year ended December 31, 2008 contains an explanatory paragraph raising
substantial doubt about our ability to continue as a going concern. Our
financial statements do not include any adjustments that may be necessary in the
event we are unable to continue as a going concern.
We have
experienced losses from operations during the last three years and have an
accumulated deficit of $ 21,972,885 as of March 31, 2009 and $19,992,535 as of
December 31, 2008. We have an operating cash flow deficit of
$1,125,949 as of March 31, 2009 and $3,835,190 for the year ended December 31,
2008 and we sustained operating cash flow deficits of $1,913,760 and $2,224,538
in 2007 and 2006, respectively. In the fourth quarter of 2008 and first quarter
of 2009, we incurred significant additional expenses that were attributable to
our delisting from the NYSE Alternext and listing on the NYSE Euronext Alternext
Paris Exchange (the "New Paris Listing”). Our accounts payable
and accrued expenses have also increased due to the listing issues as well as
due to other operational changes instituted in connection with the launch of our
consumer products. At March 31, 2009, December 31, 2008 and December
31, 2007, we had working capital of approximately ($2,405,773), ($500,672) and
$260,534, respectively.
The
Company's principal source of liquidity at March 31, 2009 was $57,923 in cash
and cash equivalents. The Company currently does not have sufficient
capital to operate beyond May 2009.
We
continue to require additional financing to operate through the remainder of the
year.
We do not
have sufficient capital to sustain our operations beyond May 2009 and we will
require additional financing as soon as possible. If we are not able to raise
additional capital, among other things:
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·
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We
could seek to reorganize under the protection of the Federal Bankruptcy
Laws;
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·
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We
will need to scale back or cease our marketing and development
efforts;
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·
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We
will be forced to cease operations;
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·
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We
will be unable to pursue further development of our
technologies;
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·
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We
will be forced to sell off our technologies prior to maximizing their
potential value;
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We
will be unable to aggressively market our
products;
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·
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We
will be unable to pursue patenting some of our technologies and
development of our technologies and
products;
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·
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We
will have to lay-off personnel;
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·
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We
could be unable to continue to make public filings;
and
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·
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Our
licenses for our SMaRT™ Replacement Therapy technology and MU 1140
technology could be terminated.
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There can
be no assurance that we will be able to raise additional capital and any of
these events would significantly harm our business.
Our business may be adversely
affected by the current economic recession.
The
domestic and international economies are experiencing a significant recession.
This recession has been magnified by the tightening of the credit markets. The
domestic and international markets may remain depressed for an undeterminable
period of time. A prolonged recession could have a material adverse
effect on the Company's revenues, profits and its ability to obtain additional
financing if sales revenue is insufficient to sustain our operations as
needed. In such event, we could be forced to limit our marketing and
development efforts and significantly curtail or suspend our
operations, including laying-off employees, recording asset impairment
write-downs and other measures. We must generate significant revenues to achieve
and maintain profitability.
We
must spend at least $1 million annually on development of our MU 1140™ and
SMaRT™ Replacement Therapy technologies and $100,000 annually as minimum
royalties under our license agreements with the University of Florida Research
Foundation, Inc. We must also comply with certain other conditions of our
licenses. If we do not, our licenses to these and other technologies may be
terminated, and we may have to cease operations.
We hold
our MU 1140™ and SMaRT™ Replacement Therapy technologies under licenses from the
University of Florida Research Foundation, Inc. Under the terms of the licenses,
we must spend at least $1 million per year on development of those technologies
before the first commercial sale of products derived from those technologies. In
addition, we must pay $25,000 per quarter as minimum royalties to the University
of Florida Research Foundation, Inc. under our license agreements. The
University of Florida Research Foundation, Inc. may terminate our licenses in
respect of our MU 1140™ and our SMaRT™ Replacement Therapy technology and
technology if we breach our obligations to timely pay monies to it, submit
development reports to it or commit any other breach of the covenants contained
in the license agreements. There is no assurance that we will be able to comply
with these conditions. If our license is terminated, our investment in
development of our SMaRT™ Replacement Therapy™ and MU 1140™ technologies will
become valueless and we may have to cease operations.
Until
commercial sales of any products developed from these licensed technologies take
place, we will not be earning revenues from the sale of products derived from
them and will, therefore, have to raise the money we must spend on development
of our technologies by other means, such as commercialization and sale of our
consumer products, or the sale of our common stock. There is no assurance we
will achieve a sufficient level of sales to provide such funding or be able to
raise the financing necessary to meet our obligations under our licenses. If we
cannot, we may lose our licenses to these technologies and have to cease
operations.
Forward-Looking
Statements
This 10-Q
contains forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended and Section 21E of the Securities Exchange
Act of 1934, as amended. Such forward-looking statements include statements
regarding, among other things, (a) our need for and availability of working
capital, (b) our financing plans, (c) our strategies, (d) our projected sales
and profitability,(e) anticipated trends in our industry. Forward-looking
statements, which involve assumptions and describe our future plans, strategies,
and expectations, are generally identifiable by use of the words “may,” “will,”
“should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project”
or the negative of these words or other variations on these words or comparable
terminology. This information may involve known and unknown risks,
uncertainties, and other factors that may cause our actual results, performance,
or achievements to be materially different from the future results, performance,
or achievements expressed or implied by any forward-looking statements. These
statements may be found under “Management’s Discussion and Analysis or Plan of
Operation” and “Business,” as well as in this 10-Q generally. Actual events or
results may differ materially from those discussed in forward-looking statements
as a result of various factors, including, without limitation, the risks
outlined under “Risk Factors” and matters described in this 10-Q generally. In
light of these risks and uncertainties, there can be no assurance that the
forward-looking statements contained in this filing will in fact occur. In
addition to the information expressly required to be included in this filing, we
will provide such further material information, if any, as may be necessary to
make the required statements, in light of the circumstances under which they are
made, not misleading.
ITEM
6. EXHIBITS
Incorporated by reference to Exhibits
filed after signature page.
SIGNATURES
In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized
on this 20th day of
May, 2009.
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ORAGENICS,
INC.
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BY:
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/s/
David B. Hirsch
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David
B. Hirsch, Acting President and Chief Executive Officer,
and
Chief Financial Officer and Principal Executive
Officer
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EXHIBIT
INDEX
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Exhibit
Number
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Exhibit
Description
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Form
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File
No
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Exhibit
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Filing
Date
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Filed
Herewith
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31.1
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Certification
of Principal Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a),
promulgated under the Securities and Exchange Act of 1934, as
amended.
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X
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31.2
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Certification
of Principal Financial Officer pursuant to Rule 13a-14 and Rule 15d-14(a),
promulgated under the Securities and Exchange Act of 1934, as
amended.
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X
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32.1
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Certification
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 (Chief Executive Officer).
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X
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32.2
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Certification
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 (Chief Financial Officer).
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X
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