10-Q 1 a12-19618_110q.htm 10-Q

Table of Contents

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

(Mark One)

 

x

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2012

 

OR

 

o

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from                   to                   

 

COMMISSION FILE NUMBER 000-54556

 

TROVAGENE, INC.

(Exact Name of small business issuer as specified in its charter)

 

Delaware

 

27-2004382

(State or other jurisdiction of

 

(I.R.S. Employer

incorporation or organization)

 

Identification No.)

 

11055 Flintkote Avenue, Suite B, San Diego, California 92121

(Address of principal executive offices) (Zip Code)

 

Issuer’s telephone Number: (858) 952-7570

 

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x  No o

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x  No o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer o

 

Accelerated filer o

 

 

 

Non-accelerated filer o

 

Smaller reporting company x

(Do not check if a smaller reporting company)

 

 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o  No x

 

As of November 9, 2012 the issuer had 14,180,934 shares of Common Stock issued and outstanding.

 

 

 




Table of Contents

 

PART I

 

ITEM 1. FINANCIAL STATEMENTS.

 

INDEX TO FINANCIAL STATEMENTS

 

 

 

Page

 

 

 

Condensed Consolidated Balance Sheets as of September 30, 2012 (unaudited) and December 31, 2011

 

4

 

 

 

Condensed Consolidated Statements of Operations and Comprehensive Net (Loss) Income for the Three and Nine Months Ended September 30, 2012 and 2011 (unaudited) and the period August 4, 1999 (Inception) to September 30, 2012 (period from January 1, 2012 to September 30, 2012 unaudited)

 

5

 

 

 

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the period August 4, 1999 (Inception) to September 30, 2012 (period from January 1, 2012 to September 30, 2012 unaudited)

 

6

 

 

 

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2012 and 2011 (unaudited) and the period August 4, 1999 (Inception) to September 30, 2012 (period from January 1, 2012 to September 30, 2012 unaudited)

 

13

 

 

 

Notes to Condensed Consolidated Financial Statements (unaudited)

 

15

 

3



Table of Contents

 

Trovagene, Inc. and Subsidiaries

 

(A development stage company)

 

CONSOLIDATED BALANCE SHEETS

 

 

 

September 30,

 

December 31,

 

 

 

2012

 

2011

 

 

 

(unaudited)

 

 

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

7,815,128

 

$

700,374

 

Accounts receivable

 

128,188

 

99,140

 

Prepaid expenses

 

57,252

 

42,658

 

Total current assets

 

8,000,568

 

842,172

 

Property and equipment, net

 

208,393

 

22,504

 

Other assets

 

362,081

 

174,581

 

Total assets

 

$

8,571,042

 

$

1,039,257

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity (Deficiency)

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

140,034

 

$

928,364

 

Accrued expenses

 

617,509

 

501,517

 

Total current liabilities

 

757,543

 

1,429,881

 

Derivative financial instruments

 

2,838,107

 

3,840,644

 

Total liabilities

 

3,595,650

 

5,270,525

 

 

 

 

 

 

 

Commitments and contingencies (Note 8)

 

 

 

 

 

Stockholders’ equity (deficiency)

 

 

 

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value, 20,000,000 shares authorized, 95,600 shares outstanding at September 30, 2012 and December 31, 2011, designated as Series A Convertible Preferred Stock with liquidation preference of $956,000 at September 30, 2012 and December 31, 2011

 

96

 

96

 

 

 

 

 

 

 

Common stock, $0.0001 par value, 150,000,000 and 100,000,000 shares authorized at September 30, 2012 and December 31, 2011, respectively; 14,180,726 and 10,737,026 issued and outstanding at September 30, 2012 and December 31, 2011, respectively

 

1,418

 

1,073

 

 

 

 

 

 

 

Additional paid-in capital

 

53,840,264

 

39,365,994

 

Deficit accumulated during development stage

 

(48,866,386

)

(43,598,431

)

Total stockholders’ equity (deficiency)

 

4,975,392

 

(4,231,268

)

 

 

 

 

 

 

 

 

$

8,571,042

 

$

1,039,257

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements

 

4



Table of Contents

 

Trovagene, Inc. and Subsidiaries
(A Development Stage Company)

Consolidated Statements of Operations and Comprehensive (Loss) Income

(unaudited)

 

 

 

 

 

 

 

August 4, 1999

 

 

 

 

 

 

 

(Inception) to

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

September 30,

 

 

 

2012

 

2011

 

2012

 

2011

 

2012

 

Royalty income

 

$

41,500

 

$

45,000

 

$

117,153

 

$

193,946

 

$

762,223

 

Milestone fees

 

150,000

 

 

150,000

 

 

150,000

 

License fees

 

20,000

 

10,000

 

20,000

 

30,000

 

1,383,175

 

Total revenues

 

211,500

 

55,000

 

287,153

 

223,946

 

2,295,398

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

511,433

 

200,924

 

1,326,197

 

602,228

 

16,855,146

 

Purchased in process research and development

 

 

 

 

 

2,666,869

 

General and administrative

 

739,042

 

586,230

 

2,375,666

 

1,721,301

 

24,916,726

 

Total operating expenses

 

1,250,475

 

787,154

 

3,701,863

 

2,323,529

 

44,438,741

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

(1,038,975

)

(732,154

)

(3,414,710

)

(2,099,583

)

(42,143,343

)

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

 

 

173

 

266,883

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 

 

(56,637

)

(1,325,372

)

Amortization of deferred debt costs and original issue discount

 

 

 

 

 

(2,346,330

)

Change in fair value of derivative instruments—warrants

 

388,750

 

118,040

 

(1,824,565

)

540,789

 

(598,557

)

Gain on extinguishment of debt

 

 

623,383

 

 

623,383

 

623,383

 

Liquidated damages and other forbearance agreement settlement costs

 

 

 

 

 

(1,758,111

)

Net (loss) income and comprehensive (loss) income

 

(650,225

)

9,269

 

(5,239,275

)

(991,875

)

(47,281,447

)

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock dividend

 

(9,560

)

(9,560

)

(28,680

)

(28,680

)

(336,598

)

Series A Convertible Preferred stock conversion rate change accreted as a dividend

 

 

 

 

 

(455,385

)

Cumulative effect of early adopting ASC Topic 815-40

 

 

 

 

 

(792,956

)

 

 

 

 

 

 

 

 

 

 

 

 

Net loss and comprehensive loss attributable to common stockholders

 

$

(659,785

)

$

(291

)

$

(5,267,955

)

$

(1,020,555

)

$

(48,866,386

)

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS PER COMMON SHARE-BASIC AND DILUTED:

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(0.05

)

$

(.00

)

$

(0.42

)

$

(.11

)

 

 

Weighted average shares outstanding:

 

14,178,733

 

10,017,095

 

12,506,789

 

9,401,161

 

 

 

 

The accompanying notes are an integral part of these consolidated financial statements

 

5



Table of Contents

 

Trovagene, Inc. and Subsidiaries

(A Development Stage Company)

Consolidated Statements of Stockholders’ Equity (Deficiency)

 

 

 

Common Stock

 

Treasury Shares

 

Additional
Paid-In

 

Deferred
Stock
Based

 

Deficit
Accumulated
During
Development

 

Total
Stockholders’
Equity

 

 

 

Shares

 

Amount

 

Shares

 

Amount

 

Capital

 

Compensation

 

Stage

 

(Deficiency)

 

Balance, August 4, 1999 (Inception)

 

 

$

 

 

$

 

$

 

$

 

$

 

$

 

Issuance of common stock to founders for cash at $0.0012 per share

 

37,000,000

 

3,700

 

 

 

38,300

 

 

 

42,000

 

Net loss

 

 

 

 

 

 

 

(14,760

)

(14,760

)

Balance, January 31, 2000

 

37,000,000

 

$

3,700

 

 

$

 

$

38,300

 

 

(14,760

)

27,240

 

Net loss

 

 

 

 

 

 

 

(267,599

)

(267,599

)

Balance, January 31, 2001

 

37,000,000

 

$

3,700

 

 

$

 

$

38,300

 

 

(282,359

)

(240,359

)

Capital contribution of cash

 

 

 

 

 

45,188

 

 

 

45,188

 

Net loss

 

 

 

 

 

 

 

(524,224

)

(524,224

)

Balance, January 31, 2002

 

37,000,000

 

$

3,700

 

 

$

 

$

83,488

 

 

(806,583

)

(719,395

)

Issuance of common stock for cash at $0.003 per share

 

1,258,000

 

126

 

 

 

3,274

 

 

 

3,400

 

Capital contribution of cash

 

 

 

 

 

2,500

 

 

 

2,500

 

Net loss

 

 

 

 

 

 

 

(481,609

)

(481,609

)

Balance, January 31, 2003

 

38,258,000

 

$

3,826

 

 

$

 

$

89,262

 

 

(1,288,192

)

(1,195,104

)

Net loss

 

 

 

 

 

 

 

(383,021

)

(383,021

)

Balance, January 31, 2004

 

38,258,000

 

$

3,826

 

 

$

 

$

89,262

 

 

(1,671,213

)

(1,578,125

)

Waiver of founders’ deferred compensation

 

 

 

 

 

1,655,031

 

 

 

1,655,031

 

Private placement of common stock

 

440,868

 

44

 

 

 

2,512,906

 

 

 

2,512,950

 

Redemption of shares held by Panetta Partners, Inc.

 

(36,477,079

)

(3,648

)

 

 

(496,352

)

 

 

(500,000

)

Costs associated with recapitalization

 

 

 

 

 

(301,499

)

 

 

(301,499

)

Share exchange with founders

 

376,334

 

38

 

 

 

(38

)

 

 

 

Issuance of treasury shares

 

 

 

58,333

 

6

 

(6

)

 

 

 

Issuance of treasury shares to escrow

 

58,333

 

6

 

(58,333

)

(6

)

 

 

 

 

Issuance of common stock and warrants for cash at $11.70 per share

 

228,026

 

23

 

 

 

2,667,877

 

 

 

2,667,900

 

Issuance of 20,610 warrants to selling agents

 

 

 

 

 

403,038

 

 

 

403,038

 

Finders warrants charged to cost of capital

 

 

 

 

 

(403,038

)

 

 

(403,038

)

Deferred stock-based compensation

 

 

 

 

 

1,937,500

 

(1,937,500

)

 

 

Amortization of deferred stock-based compensation

 

 

 

 

 

 

245,697

 

 

245,697

 

Options issued to consultants

 

 

 

 

 

1,229,568

 

 

 

1,229,568

 

Warrants issued to consultants

 

 

 

 

 

2,630,440

 

 

 

2,630,440

 

Net loss

 

 

 

 

 

 

 

(5,371,027

)

(5,371,027

)

Balance, January 31, 2005

 

2,884,482

 

$

289

 

 

$

 

$

11,924,689

 

$

(1,691,803

)

$

(7,042,240

)

$

3,190,935

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

6



Table of Contents

 

Trovagene, Inc. and Subsidiaries

(A Development Stage Company)

Consolidated Statements of Stockholders’ Equity (Deficiency)

 

 

 

Preferred Stock

 

Common Stock

 

Treasury Shares

 

Additional
Paid-In

 

Deferred
Stock
Based

 

Deficit
Accumulated
During
Development

 

Total
Stockholders’
Equity

 

 

 

Shares

 

Amount

 

Shares

 

Amount

 

Shares

 

Amount

 

Capital

 

Compensation

 

Stage

 

(Deficiency)

 

Balance, January 31, 2005

 

 

$

 

2,884,482

 

$

289

 

 

$

 

$

11,924,689

 

$

(1,691,803

)

$

(7,042,240

)

$

3,190,935

 

Private placement of common stock

 

 

 

17,094

 

2

 

 

$

 

$

199,998

 

 

 

200,000

 

Payment of selling agents fees and expenses in cash

 

 

 

 

 

 

 

(179,600

)

 

 

(179,600

)

Common stock issued to selling agents

 

 

 

4,077

 

 

 

 

 

 

 

 

Private placement of common stock

 

 

 

252,564

 

25

 

 

 

2,954,974

 

 

 

2,954,999

 

Payment of selling agents fees and expenses in cash

 

 

 

 

 

 

 

(298,000

)

 

 

(298,000

)

Issuance of 20,205 warrants issued to selling agents

 

 

 

 

 

 

 

222,188

 

 

 

222,188

 

Selling agents warrants charged to cost of capital

 

 

 

 

 

 

 

(222,188

)

 

 

(222,188

)

Private placement of preferred stock and warrants for cash at $10.00 per share (restated)

 

277,100

 

277

 

 

 

 

 

2,770,723

 

 

 

2,771,000

 

Accretion of preferred stock dividends (restated)

 

 

 

 

 

 

 

792,956

 

 

(792,956

)

 

Value of warrants reclassified to derivative financial instrument liability

 

 

 

 

 

 

 

(567,085

)

 

 

(567,085

)

Payment of selling agents fees and expenses in cash

 

 

 

 

 

 

 

(277,102

)

 

 

(277,102

)

Issuance of 17,572 warrants issued to selling agents

 

 

 

 

 

 

 

167,397

 

 

 

167,397

 

Selling agents warrants charged to cost of capital

 

 

 

 

 

 

 

(167,397

)

 

 

(167,397

)

Return of treasury shares from escrow

 

 

 

(58,333

)

(6

)

58,333

 

6

 

 

 

 

 

Retirement of treasury shares

 

 

 

 

 

(58,333

)

(6

)

6

 

 

 

 

Common stock issued for services

 

 

 

833

 

 

 

 

16,500

 

 

 

16,500

 

Stock-based compensation expense for non-employees

 

 

 

 

 

 

 

2,928,298

 

 

 

2,928,298

 

Amortization of deferred stock-based compensation

 

 

 

 

 

 

 

 

645,832

 

 

 

645,832

 

Preferred stock dividend

 

 

 

 

 

 

 

 

 

(60,741

)

(60,741

)

Net loss

 

 

 

 

 

 

 

 

 

(7,844,326

)

(7,844,326

)

Balance, January 31, 2006

 

277,100

 

$

277

 

3,100,717

 

$

310

 

 

$

 

$

20,266,357

 

$

(1,045,971

)

$

(15,740,263

)

$

3,480,710

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

7



Table of Contents

 

Trovagene, Inc. and Subsidiaries

(A Development Stage Company)

Consolidated Statements of Stockholders’ Equity (Deficiency)

 

 

 

Preferred Stock

 

Common Stock

 

Additional
Paid-In

 

Deferred
Stock
Based

 

Deficit
Accumulated
During
Development

 

Total
Stockholders’
Equity

 

Temporary
Equity—
Unregistered
Common Stock

 

 

 

Shares

 

Amount

 

Shares

 

Amount

 

Capital

 

Compensation

 

Stage

 

(Deficiency)

 

Shares

 

Amount

 

Balance, January 31, 2006

 

277,100

 

$

277

 

3,100,717

 

$

310

 

$

20,266,357

 

$

(1,045,971

)

$

(15,740,263

)

$

3,480,710

 

 

$

 

Conversion of Series A preferred stock and issuance of common stock

 

(174,000

)

(174

)

137,739

 

14

 

160

 

 

 

 

 

 

Implementation of ASC 718

 

 

 

 

 

(1,045,971

)

1,045,971

 

 

 

 

 

Private placement of common stock

 

 

 

125,787

 

13

 

943,388

 

 

 

943,401

 

 

 

Payment of selling agents fees and expenses in cash

 

 

 

 

 

(118,341

)

 

 

(118,341

)

 

 

Issuance of 15,779 warrants to selling agents

 

 

 

 

 

55,568

 

 

 

55,568

 

 

 

Selling agents warrants charged to cost of capital

 

 

 

 

 

(55,568

)

 

 

(55,568

)

 

 

Issuance of common stock and warrants for cash at $6.00 per share

 

 

 

 

 

 

 

 

 

166,667

 

1,000,000

 

Payment of finder’s fees and expenses in cash

 

 

 

 

 

 

 

 

 

 

(80,000

)

Value of warrants classified as derivative financial instrument liability

 

 

 

 

 

 

 

 

 

 

(15,000

)

Issuance of 27,425 units to finder

 

 

 

 

 

167,856

 

 

 

167,856

 

 

 

Common Stock issued for services

 

 

 

1,449

 

 

9,566

 

 

 

9,566

 

 

 

Value attributed to warrants issued with 6% convertible debentures

 

 

 

 

 

1,991,822

 

 

 

1,991,822

 

 

 

Reclassification of derivative financial instruments to stockholders’ equity upon adoption of ASC 815-40

 

 

 

 

 

567,085

 

 

(455,385

)

111,700

 

 

 

Warrants issued for services

 

 

 

 

 

101,131

 

 

 

101,131

 

 

 

Donated services

 

 

 

 

 

62,500

 

 

 

62,500

 

 

 

Stock based compensation

 

 

 

 

 

1,572,545

 

 

 

1,572,545

 

 

 

Preferred stock dividend

 

 

 

 

 

 

 

(59,164

)

(59,164

)

 

 

Net loss

 

 

 

 

 

 

 

(7,134,067

)

(7,134,067

)

 

 

Balance, January 31, 2007

 

103,100

 

$

103

 

3,365,692

 

$

337

 

$

24,518,098

 

$

 

$

(23,388,879

)

$

1,129,659

 

166,667

 

$

905,000

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

8



Table of Contents

 

Trovagene, Inc. and Subsidiaries

(A Development Stage Company)

Consolidated Statements of Stockholders’ Equity (Deficiency)

 

 

 

Preferred Stock

 

Common Stock

 

Additional
Paid-In

 

Deficit
Accumulated
During
Development

 

Total
Stockholders’
Equity

 

Temporary Equity—
Unregistered
Common Stock

 

 

 

Shares

 

Amount

 

Shares

 

Amount

 

Capital

 

Stage

 

(Deficiency)

 

Shares

 

Amount

 

Balance, January 31, 2007

 

103,100

 

$

103

 

3,365,692

 

$

337

 

$

24,518,098

 

$

(23,388,879

)

1,129,659

 

166,667

 

$

905,000

 

Conversion of preferred stock to common stock

 

(7,500

)

(7

)

7,813

 

1

 

6

 

 

 

 

 

Private placement of common stock

 

 

 

283,333

 

28

 

849,972

 

 

850,000

 

 

 

Payment of selling agent fees and expenses

 

 

 

 

 

(51,733

)

 

(51,733

)

 

 

Issuance of warrants to selling agents

 

 

 

 

 

45,403

 

 

45,403

 

 

 

Selling agent warrants charged to cost of capital

 

 

 

 

 

(45,403

)

 

(45,403

)

 

 

Derivative liability—warrants at issuance

 

 

 

 

 

(45,371

)

 

(45,371

)

 

 

Donated services

 

 

 

 

 

275,000

 

 

275,000

 

 

 

Stock-based compensation expense

 

 

 

 

 

914,847

 

 

914,847

 

 

 

Preferred stock dividend

 

 

 

 

 

 

(35,054

)

(35,054

)

 

 

Net loss

 

 

 

 

 

 

(4,683,141

)

(4,683,141

)

 

 

Balance, December 31, 2007

 

95,600

 

$

96

 

3,656,838

 

$

366

 

$

26,460,819

 

$

(28,107,074

)

(1,645,793

)

166,667

 

$

905,000

 

Reclassification of common stock initially recorded as temporary equity

 

 

 

166,667

 

17

 

904,983

 

 

905,000

 

(166,667

)

(905,000

)

Private placement of common stock

 

 

 

330,682

 

33

 

1,144,967

 

 

1,145,000

 

 

 

Payment of selling agents fees and expenses

 

 

 

 

 

(74,500

)

 

(74,500

)

 

 

Conversion of debenture to common stock

 

 

 

31,214

 

3

 

93,638

 

 

93,641

 

 

 

Derivative liability—warrants at issuance

 

 

 

 

 

(201,122

)

 

(201,122

)

 

 

Donated services

 

 

 

 

 

390,750

 

 

390,750

 

 

 

Stock based compensation

 

 

 

 

 

543,697

 

 

543,697

 

 

 

Preferred stock dividend

 

 

 

 

 

 

(38,240

)

(38,240

)

 

 

Net loss

 

 

 

 

 

 

(5,166,240

)

(5,166,240

)

 

 

Balance, December 31, 2008

 

95,600

 

$

96

 

4,185,401

 

$

419

 

$

29,263,232

 

$

(33,311,554

)

$

(4,047,807

)

 

$

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

9



Table of Contents

 

Trovagene, Inc. and Subsidiaries

(A Development Stage Company)

Consolidated Statements of Stockholders’ Equity (Deficiency)

 

 

 

Preferred Stock

 

Common Stock

 

Additional
Paid-In

 

Deficit
Accumulated
During
Development

 

Total
Stockholders’
Equity

 

 

 

Shares

 

Amount

 

Shares

 

Amount

 

Capital

 

Stage

 

(Deficiency)

 

Balance December, 31, 2008

 

95,600

 

$

96

 

4,185,401

 

$

419

 

$

29,263,232

 

$

(33,311,554

)

$

(4,047,807

)

Issuance of shares of common stock in connection with convertible debenture forbearance agreement

 

 

 

906,245

 

91

 

1,739,868

 

 

1,739,959

 

Issuance of shares of common stock in payment of convertible debenture interest

 

 

 

60,147

 

6

 

112,285

 

 

112,291

 

Private placements of common stock

 

 

 

488,333

 

49

 

1,464,951

 

 

1,465,000

 

Issuance of common stock pursuant to a non-exclusive selling agent’s agreement

 

 

 

68,897

 

7

 

306,730

 

 

306,737

 

Issuance of shares of common stock re settlement for consulting services rendered

 

 

 

159,630

 

16

 

478,874

 

 

478,890

 

Stock based compensation expense

 

 

 

 

 

177,836

 

 

177,836

 

Preferred stock dividend

 

 

 

 

 

 

(38,240

)

(38,240

)

Derivative liability—warrants and price protected units upon issuance

 

 

 

 

 

(1,497,568

)

 

(1,497,568

)

Net loss

 

 

 

 

 

 

(2,483,807

)

(2,483,807

)

Balance, December 31, 2009

 

95,600

 

$

96

 

5,868,653

 

$

588

 

$

32,046,208

 

$

(35,833,601

)

$

(3,786,709

)

 

The accompanying notes are an integral part of these consolidated financial statements.

 

10



Table of Contents

 

Trovagene, Inc. and Subsidiaries

(A Development Stage Company)

Consolidated Statements of Stockholders’ Equity (Deficiency)

 

 

 

Preferred Stock

 

Common Stock

 

Additional
Paid-In

 

Accumulated
Deficit
During
Development

 

Total
Stockholders’
Equity

 

 

 

Shares

 

Amount

 

Shares

 

Amount

 

Capital

 

Stage

 

(Deficiency)

 

Balance, December 31, 2009

 

95,600

 

$

96

 

5,868,653

 

$

588

 

$

32,046,208

 

(35,833,601

)

$

(3,786,709

)

Issuance of shares of common stock in payment of convertible debenture interest

 

 

 

85,619

 

9

 

115,962

 

 

115,971

 

Issuance of common stock to selling agents

 

 

 

79,333

 

8

 

(8

)

 

 

Private placement of units

 

 

 

578,233

 

58

 

1,734,642

 

 

1,734,700

 

Derivative liabilitiy—price protected units upon issuance

 

 

 

 

 

(1,010,114

)

 

(1,010,114

)

Consulting services settled via issuance of stock

 

 

 

70,833

 

7

 

212,493

 

 

212,500

 

Shares issued in settlement of legal fees

 

 

 

29,240

 

3

 

99,997

 

 

100,000

 

Stock issued in payment of deferred salary to former CEO

 

 

 

12,745

 

1

 

28,345

 

 

28,346

 

Shares issued in connection with Agreement & Plan of Merger with Etherogen, Inc.

 

 

 

2,043,797

 

204

 

2,771,185

 

 

2,771,389

 

Stock Based Compensation expense

 

 

 

 

 

325,930

 

 

325,930

 

Preferred stock dividend

 

 

 

 

 

 

(38,240

)

(38,240

)

Net loss

 

 

 

 

 

 

(5,449,138

)

(5,449,138

)

Balance, December 31, 2010

 

95,600

 

$

96

 

8,768,453

 

$

878

 

$

36,324,640

 

$

(41,320,979

)

$

(4,995,365

)

 

The accompanying notes are an integral part of these consolidated financial statements.

 

11



Table of Contents

 

Trovagene, Inc. and Subsidiaries

(A Development Stage Company)

Consolidated Statements of Stockholders’ Equity (Deficiency)

 

 

 

Preferred
Stock
Shares

 

Preferred
Stock
Amount

 

Common
Stock
Shares

 

Common
Stock
Amount

 

Additional
Paid-In
Capital

 

Deficit
Accumulated
During
Development
Stage

 

Total
Stockholders’
Deficiency

 

Balance, December 31, 2010

 

95,600

 

$

96

 

8,768,453

 

$

878

 

$

36,324,640

 

$

(41,320,979

)

$

(4,995,365

)

Issuance of shares of common stock in payment of convertible debenture interest in accordance with Forbearance Agreement

 

 

 

64,214

 

6

 

85,269

 

 

85,275

 

Private placement of units

 

 

 

857,833

 

85

 

2,573,415

 

 

2,573,500

 

Derivative liability-fair value of warrants and price protected units issued

 

 

 

 

 

(1,298,618

)

 

(1,298,618

)

Shares issued in connection with Board Compensation

 

 

 

41,750

 

4

 

125,246

 

 

125,250

 

Issuance of common stock to shareholder as finder’s fees

 

 

 

90,258

 

9

 

(9

)

 

 

Issuance of common stock in connection with consulting services

 

 

 

58,333

 

6

 

174,994

 

 

175,000

 

Stock issued in connection with conversion of convertible debentures

 

 

 

856,185

 

85

 

1,130,079

 

 

1,130,164

 

Stock based compensation

 

 

 

 

 

250,978

 

 

250,978

 

Preferred stock dividend

 

 

 

 

 

 

(38,240

)

(38,240

)

Net loss

 

 

 

 

 

 

(2,239,212

)

(2,239,212

)

Balance, December 31, 2011

 

95,600

 

$

96

 

10,737,026

 

$

1,073

 

$

39,365,994

 

$

(43,598,431

)

$

(4,231,268

)

Units issued via registered direct public offering and private placement of units

 

 

 

3,278,334

 

328

 

12,479,672

 

 

12,480,000

 

Fees and expenses related to financing transactions — paid in cash

 

 

 

 

 

(1,533,885

)

 

(1,533,885

)

Derivative liability-fair value of warrants and price protected units issued

 

 

 

 

 

(765,329

)

 

(765,329

)

Correction of error in derivative liability—fair value of warrants price protected units issued

 

 

 

 

 

274,967

 

 

274,967

 

Warrants classified to Additional Paid in Capital

 

 

 

 

 

3,317,463

 

 

3,317,463

 

Issuance of common stock and warrant to shareholder as finder’s fees

 

 

 

30,450

 

3

 

(3

)

 

 

Issuance of common stock in connection with Asset Purchase Agreement with MultiGen Diagnostics, Inc.

 

 

 

125,000

 

13

 

187,487

 

 

187,500

 

Issuance of common stock in connection with consulting services

 

 

 

9,916

 

1

 

22,380

 

 

22,381

 

Issuance of warrant in connection with advisory services

 

 

 

 

 

142,508

 

 

142,508

 

Stock based compensation

 

 

 

 

 

349,010

 

 

349,010

 

Preferred stock dividend

 

 

 

 

 

 

(28,680

)

(28,680

)

Net loss

 

 

 

 

 

 

(5,239,275

)

(5,239,275

)

Balance, September 30, 2012 (unaudited)

 

95,600

 

$

96

 

14,180,726

 

$

1,418

 

$

53,840,264

 

$

(48,866,386

)

$

4,975,392

 

 

12



Table of Contents

 

Trovagene, Inc. and Subsidiaries

(A Development Stage Company)

Consolidated Statements of Cash Flows

(unaudited)

 

 

 

Nine Months Ended
September 30, 2012

 

Nine Months Ended
September 30, 2011

 

For the period
August 4, 1999
(Inception) to
September 30, 2012

 

 

 

 

 

 

 

 

 

Operating activities

 

 

 

 

 

 

 

Net loss

 

$

(5,239,275

)

$

(991,875

)

$

(47,281,447

)

 

 

 

 

 

 

 

 

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

26,331

 

7,708

 

248,130

 

Stock based compensation expense

 

349,010

 

203,675

 

11,829,335

 

 

 

 

 

 

 

 

 

Founders’, compensation contributed to equity

 

 

 

1,655,031

 

 

 

 

 

 

 

 

 

Donated services contributed to equity

 

 

 

829,381

 

 

 

 

 

 

 

 

 

Settlement of consulting services in stock

 

 

 

478,890

 

Amortization of deferred debt costs and original issue discount

 

 

 

2,346,330

 

Liquidated damages and other forbearance agreement settlement costs paid in stock

 

 

 

1,758,111

 

 

 

 

 

 

 

 

 

Interest expense on convertible debentures paid in stock

 

 

56,637

 

757,198

 

 

 

 

 

 

 

 

 

Change in fair value of financial instruments

 

1,824,565

 

(540,789

)

598,557

 

 

 

 

 

 

 

 

 

Gain on extinguishment of debt

 

 

(623,383

)

(623,383

)

 

 

 

 

 

 

 

 

Purchased in process research and development expense-related party

 

 

 

2,666,869

 

Stock issued in connection with payment of deferred salary

 

 

 

28,346

 

Stock issued in connection with settlement of legal fees

 

 

 

100,000

 

Stock and warrant issued in connection with consulting services

 

164,889

 

175,000

 

452,389

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Decrease (increase) in other assets

 

 

21,648

 

(69,881

)

Decrease (increase) in accounts receivable

 

(29,048

)

(16,508

)

(128,189

)

(Increase) decrease in prepaid expenses

 

(14,594

)

108,414

 

(57,252

)

(Decrease) increase in accounts payable, accrued expenses and other

 

(701,019

)

189,766

 

715,352

 

Net cash used in operating activities

 

(3,619,141

)

(1,409,707

)

(23,696,233

)

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

 

Assets acquired in Etherogen, Inc. merger

 

 

 

(104,700

)

Capital expenditures

 

(212,220

)