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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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20-5157386
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(State or Other Jurisdiction of
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(I.R.S. Employer
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Incorporation or Organization)
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Identification No.)
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24 New England Executive Park, Suite 105
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Burlington, MA
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01803
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(Address of Principal Executive Offices)
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(Zip Code)
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(Title of Class)
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(Name of exchange on which registered)
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Common Stock, par value $0.001 per share
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NASDAQ Capital Market
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Large accelerated filer
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¨
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Accelerated filer
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x
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Non-accelerated filer
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¨ (Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Page
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PART I
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1
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Item 1.
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Business
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1
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Item 1A.
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Risk Factors
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19
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Item 1B.
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Unresolved Staff Comments
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30
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Item 2.
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Properties
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31
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Item 3.
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Legal Proceedings
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31
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Item 4.
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Mine Safety Disclosures
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31
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PART II
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32
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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32
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Item 6.
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Selected Consolidated Financial Data
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34
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Item 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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34
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Item 7A.
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Quantitative and Qualitative Disclosures About Market Risk
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45
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Item 8.
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Financial Statements and Supplementary Data
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45
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Item 9.
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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45
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Item 9A.
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Controls and Procedures
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45
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Item 9B.
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Other Information
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46
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PART III
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47
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Item 10.
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Directors, Executive Officers and Corporate Governance
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47
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Item 11.
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Executive Compensation
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47
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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47
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Item 13.
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Certain Relationships and Related Transactions, and Director Independence
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48
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Item 14.
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Principal Accountant Fees and Services
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48
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PART IV
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49
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Item 15.
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Exhibits and Financial Statement Schedules
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49
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· | our growth strategy; |
· | the results of research and development activities; |
· | uncertainties relating to preclinical and clinical testing; |
· | financing and strategic agreements and relationships; |
· | the early stage of products under development; |
· | our need for substantial additional funds and uncertainties relating to financings; |
· | our ability to attract, integrate and retain key personnel; |
· | our ability to manufacture our product; |
· | government regulation; |
· | patent and intellectual property matters; |
· | dependence on third party manufacturers; and |
· | competition. |
Item 1.
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Business.
|
1 | ||
2 | ||
3 | ||
4 | ||
5 | ||
6 | ||
7 | ||
8 | ||
9 | ||
10 | ||
11 | ||
12 | ||
13 | ||
· | Completion of preclinical laboratory tests, animal studies and formulation studies according to Good Laboratory Practices or other applicable regulations; |
· | Submission to the FDA of an IND, which must become effective before human clinical trials may begin in the United States; |
· | Performance of adequate and well-controlled human clinical trials according to the FDA’s current good clinical practices, or GCPs, to establish the safety and efficacy of the proposed pharmaceutical product for its intended use; |
· | Submission to the FDA of an NDA or BLA for a new pharmaceutical product; |
· | Satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the pharmaceutical product is produced to assess compliance with the FDA’s cGMP, to assure that the facilities, methods and controls are adequate to preserve the pharmaceutical product’s identity, strength, quality and purity; |
· | Potential FDA audit of the preclinical and clinical trial sites that generated the data in support of the NDA/ BLA; and |
· | FDA review and approval of the NDA/BLA. |
14 | ||
· | Phase 1. The pharmaceutical product is usually introduced into healthy human subjects and tested for safety, dosage tolerance, absorption, metabolism, distribution and excretion. In the case of some products for severe or life-threatening diseases, such as cancer treatments, especially when the product may be too inherently toxic to ethically administer to healthy volunteers, the initial human testing is often conducted in patients. |
· | Phase 2. The pharmaceutical product is evaluated in a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance, optimal dosage and dosing schedule. |
· | Phase 3. Clinical trials are undertaken to further evaluate dosage, clinical efficacy and safety in an expanded patient population at geographically dispersed clinical trial sites. These clinical trials are intended to establish the overall risk/benefit ratio of the product and provide an adequate basis for product labeling. Generally, two adequate and well-controlled Phase 3 clinical trials are required by the FDA for approval of an NDA/BLA or foreign authorities for approval of marketing applications. |
15 | ||
16 | ||
Name
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Age
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Position
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Lindsay A. Rosenwald, M.D.
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58
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Chairman of the Board of Directors, President and Chief Executive Officer
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Lucy Lu, M.D.
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39
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Executive Vice President and Chief Financial Officer
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George Avgerinos, Ph.D.
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61
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Senior Vice President, Biologics Operations
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Kevin Horgan, M.D.
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54
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Chief Medical Officer
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17 | ||
18 | ||
Item 1A.
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Risk Factors
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· | continuing to undertake pre-clinical development and clinical trials; |
· | participating in regulatory approval processes; |
· | formulating and manufacturing products; and |
19 | ||
· | conducting sales and marketing activities. |
20 | ||
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•
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the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials;
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•
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we may be unable to demonstrate to the satisfaction of the FDA that a product candidate is safe and effective for any indication;
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•
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the FDA may not accept clinical data from trials which are conducted by individual investigators or in countries where the standard of care is potentially different from the United States;
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•
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the results of clinical trials may not meet the level of statistical significance required by the FDA for approval;
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•
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we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks;
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•
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the FDA may disagree with our interpretation of data from preclinical studies or clinical trials;
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•
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the FDA may fail to approve our manufacturing processes or facilities or those of third-party manufacturers with which we or our collaborators contract for clinical and commercial supplies; or
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•
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the approval policies or regulations of the FDA may significantly change in a manner rendering our clinical data insufficient for approval.
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21 | ||
· | obtaining regulatory clearance to commence a clinical trial; |
· | identifying, recruiting and training suitable clinical investigators; |
· | reaching agreement on acceptable terms with prospective clinical research organizations, or CROs, and trial sites, the terms of which can be subject to extensive negotiation, may be subject to modification from time to time and may vary significantly among different CROs and trial sites; |
· | obtaining sufficient quantities of a product candidate for use in clinical trials; |
· | obtaining Investigator Review Board, or IRB, or ethics committee approval to conduct a clinical trial at a prospective site; |
· | identifying, recruiting and enrolling patients to participate in a clinical trial; and |
· | retaining patients who have initiated a clinical trial but may withdraw due to adverse events from the therapy, insufficient efficacy, fatigue with the clinical trial process or personal issues. Any delays in the commencement of our clinical trials will delay our ability to pursue regulatory approval for our product candidates. In addition, many of the factors that cause, or lead to, a delay in the commencement of clinical trials may also ultimately lead to the denial of regulatory approval of a product candidate. |
· | failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols; |
· | inspection of the clinical trial operations or clinical trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold; |
· | stopping rules contained in the protocol; |
· | unforeseen safety issues or any determination that the clinical trial presents unacceptable health risks; and |
· | lack of adequate funding to continue the clinical trial. |
22 | ||
23 | ||
· | the efficacy and safety as demonstrated in clinical trials; |
· | the clinical indications for which the product is approved; |
· | acceptance by physicians, major operators of hospitals and clinics and patients of the product as a safe and effective treatment; |
· | acceptance of the product by the target population; |
· | the potential and perceived advantages of product candidates over alternative treatments; |
· | the safety of product candidates seen in a broader patient group, including its use outside the approved indications; |
· | the cost of treatment in relation to alternative treatments; |
· | the availability of adequate reimbursement and pricing by third parties and government authorities; |
24 | ||
· | relative convenience and ease of administration; |
· | the prevalence and severity of adverse events; |
· | the effectiveness of our sales and marketing efforts; and |
· | unfavorable publicity relating to the product. |
25 | ||
· | patent applications may not result in any patents being issued; |
· | patents that may be issued or in-licensed may be challenged, invalidated, modified, revoked, circumvented, found to be unenforceable, or otherwise may not provide any competitive advantage; |
· | our competitors, many of which have substantially greater resources than we or our partners and many of which have made significant investments in competing technologies, may seek, or may already have obtained, patents that may limit or interfere with our ability to make, use, and sell our potential products; |
· | there may be significant pressure on the United States government and other international governmental bodies to limit the scope of patent protection both inside and outside the United States for disease treatments that prove successful as a matter of public policy regarding worldwide health concerns; and |
· | countries other than the United States may have patent laws less favorable to patentees than those upheld by United States courts, allowing foreign competitors a better opportunity to create, develop, and market competing products. |
· | obtain licenses, which may not be available on commercially reasonable terms, if at all; |
· | abandon an infringing product candidate or redesign our products or processes to avoid infringement; |
· | pay substantial damages, including the possibility of treble damages and attorneys’ fees, if a court decides that the product or proprietary technology at issue infringes on or violates the third party’s rights; |
26 | ||
· | pay substantial royalties, fees and/or grant cross licenses to our technology; and/or |
· | defend litigation or administrative proceedings which may be costly whether we win or lose, and which could result in a substantial diversion of our financial and management resources. |
27 | ||
28 | ||
· | Announcements we make regarding our current product candidates and the acquisition of potential new product candidates; |
· | sales or potential sales of substantial amounts of our Common Stock; |
· | delay or failure in initiating or completing pre-clinical or clinical trials or unsatisfactory results of any of these trials; |
· | announcements about us or about our competitors, including clinical trial results, regulatory approvals or new product introductions; |
· | developments concerning our licensors, product manufacturers or our ability to produce TSO; |
· | litigation and other developments relating to our patents or other proprietary rights or those of our competitors; |
· | conditions in the pharmaceutical or biotechnology industries; |
· | governmental regulation and legislation; |
· | variations in our anticipated or actual operating results; and |
· | change in securities analysts’ estimates of our performance, or our failure to meet analysts’ expectations. |
· | the inability of stockholders to call special meetings; and |
· | the ability of our board of directors to designate the terms of and issue new series of preferred stock without stockholder approval, which could include the right to approve an acquisition or other change in our control or could be used to institute a rights plan, also known as a poison pill, that would work to dilute the stock ownership of a potential hostile acquirer, likely preventing acquisitions that have not been approved by our board of directors. |
29 | ||
Item 1B.
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Unresolved Staff Comments.
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30 | ||
Item 2.
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Properties.
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Item 3.
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Legal Proceedings.
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Item 4.
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Mine Safety Disclosures.
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31 | ||
Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
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2013
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2012
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||||||||
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High
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Low
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High
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Low
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||||
First quarter
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$
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9.72
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$
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4.84
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$
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9.52
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$
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5.00
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Second quarter
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$
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12.00
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$
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7.55
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$
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8.50
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$
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4.93
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Third quarter
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$
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10.05
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$
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6.82
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$
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6.92
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$
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5.20
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Fourth quarter
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$
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8.30
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$
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1.27
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$
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5.97
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$
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4.36
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32 | ||
(1)
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The chart is indexed based on the stock price on November 30, 2011.
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33 | ||
Item 6.
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Selected Consolidated Financial Data.
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For the Years Ended December 31,
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|||||||||||||
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2013
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2012
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2011
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2010
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2009
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|||||
(In thousands except per share amounts)
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|
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Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
$
|
25,682
|
|
$
|
17,468
|
|
$
|
8,583
|
|
$
|
8,341
|
|
$
|
2,270
|
|
General and administrative
|
|
|
10,098
|
|
|
8,665
|
|
|
5,755
|
|
|
900
|
|
|
343
|
|
In-process research and development
|
|
|
|
|
|
1,043
|
|
|
20,706
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
(35,780)
|
|
|
(27,176)
|
|
|
(35,044)
|
|
|
(9,241)
|
|
|
(2,613)
|
|
Interest income
|
|
|
545
|
|
|
236
|
|
|
165
|
|
|
61
|
|
|
|
|
Interest expense
|
|
|
(1,923)
|
|
|
(670)
|
|
|
(74)
|
|
|
(1,535)
|
|
|
(1,053)
|
|
Other income
|
|
|
|
|
|
|
|
|
|
|
|
733
|
|
|
|
|
Warrant expense
|
|
|
|
|
|
|
|
|
(1,407)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
(37,158)
|
|
|
(27,610)
|
|
|
(36,360)
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|
|
(9,982)
|
|
|
(3,666)
|
|
Common Stock dividend to Series A
Convertible Preferred Stockholders |
|
|
|
|
|
|
|
|
(5,861)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributed to Common Stockholders
|
|
$
|
(37,158)
|
|
$
|
(27,610)
|
|
$
|
(42,221)
|
|
$
|
(9,982)
|
|
$
|
(3,666)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per common share
|
|
$
|
(1.22)
|
|
$
|
(1.27)
|
|
$
|
(5.51)
|
|
$
|
(2.24)
|
|
$
|
(1.01)
|
|
Weighted average common shares
outstandingbasic and diluted |
|
|
30,429,743
|
|
|
21,654,984
|
|
|
7,662,984
|
|
|
4,453,786
|
|
|
3,612,769
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Financial Condition:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Cash
|
|
$
|
99,521
|
|
$
|
40,199
|
|
$
|
23,160
|
|
$
|
14,862
|
|
$
|
1,510
|
|
Total assets
|
|
$
|
100,582
|
|
$
|
40,992
|
|
$
|
23,375
|
|
$
|
14,939
|
|
$
|
1,687
|
|
Current liabilities
|
|
$
|
11,210
|
|
$
|
5,132
|
|
$
|
3,493
|
|
$
|
1,559
|
|
$
|
11,207
|
|
Long-term liabilities
|
|
$
|
8,094
|
|
$
|
13,827
|
|
$
|
750
|
|
$
|
|
|
$
|
570
|
|
Stockholders’ equity/(deficit)
|
|
$
|
81,278
|
|
$
|
22,033
|
|
$
|
19,132
|
|
$
|
(15,897)
|
|
$
|
(10,090)
|
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
· | TSO, or CNDO-201, the microscopic eggs of the porcine whipworm, for the treatment of autoimmune diseases, such as Crohn’s disease, or CD, ulcerative colitis, or UC, multiple sclerosis, or MS, autism, psoriasis, and type 1 diabetes, or T1D; and |
· | CNDO-109, a biologic that activates natural killer, or NK, cells of the immune system to seek and destroy cancer cells, for the treatment of acute myeloid leukemia. |
34 | ||
35 | ||
36 | ||
· | contract Research Organizations, or CROs, and other service providers in connection with clinical studies; |
· | investigative sites in connection with clinical studies; |
· | contract manufacturers in connection with production of clinical trial materials; |
· | vendors in connection with the preclinical development activities; and |
· | licensors for the achievement of milestone-related events. |
37 | ||
· | Fair Value of our common stock. When our stock was not publicly traded, we estimated the fair value of common stock as discussed in “Common Stock Valuations Prior to Becoming a Publicly Traded Company” below. Since November 17, 2011, we have utilized the public trading price of our common stock. |
· | Expected Term. Due to the limited exercise history of our own stock options, we determined the expected term based on the stratification of option holder groups. Our employee options meet the criteria for the Simplified Method under SAB 107 while the expected term for our non-employees is the remaining contractual life for both options and warrants. |
· | Volatility. As we have a very limited trading history for our Common Stock, the expected stock price volatility for our Common Stock was estimated by incorporating two years of our historical volatility and the average historical price volatility for industry peers based on daily price observations over a period equivalent to the expected term of the stock option grants. Industry peers consist of several public companies in the biopharmaceutical industry similar in size, stage of life cycle and financial leverage. Our historical volatility is weighted with that of the peer group and that combined historical volatility is weighted 80% with a 20% weighting of our implied volatility, which is obtained from traded options of our stock. We intend to continue to consistently apply this process using the same or similar public companies until we have sufficient historical information regarding the volatility of our own Common Stock that is consistent with the expected life of our options. Should circumstances change such that the identified companies are no longer similar to us, more suitable companies whose share prices are publicly available would be utilized in the calculation. |
· | Risk-free Rate. The risk-free interest rate is based on the yields of United States Treasury securities with maturities similar to the expected term of the options for each option group. |
· | Dividend Yield. We have never declared or paid any cash dividends and do not presently plan to pay cash dividends in the foreseeable future. Consequently, we used an expected dividend yield of zero. |
· | Expected Term. The contractual life for restricted stock issuance agreement of 5 years, which coincides with the vesting period. |
· | Volatility. As we have a very limited trading history for our Common Stock, the expected stock price volatility for our Common Stock was estimated by incorporating two years of our historical volatility and the average historical price volatility for industry peers based on daily price observations over a period equivalent to the expected term of the stock option grants. Industry peers consist of several public companies in the biopharmaceutical industry similar in size, stage of life cycle and financial leverage. Coronado’s historical volatility is weighted with that of the peer group and that combined historical volatility is weighted 80% with a 20% weighting of our implied volatility, which is obtained from traded options of our stock. |
· | Risk-free Rate. The risk-free interest rate is based on the yields of United States Treasury securities with maturities similar to the expected term of the restricted stock issuance agreement. |
38 | ||
· | arm’s length private transactions involving our preferred stock, including the sale of our Series A Convertible Preferred Stock, or Series A Shares, at $8.39 per share in 2010 and our Series C Convertible Preferred Stock, or Series C Shares, at $5.59 per share in 2011; |
· | independent valuations performed by knowledgeable experts in the field; |
· | our operating and financial performance; |
· | market conditions; |
· | developmental milestones achieved; |
· | business risks; and |
· | management and board experience. |
39 | ||
· | employee-related expenses, which include salaries and benefits, and rent expense; |
· | non cash stock-based compensation expense; |
· | license fees and milestone payments related to in-licensed products and intellectual property; |
· | expenses incurred under agreements with CROs, investigative sites and consultants that conduct or provide other services relating to our clinical trials and our preclinical activities; |
· | the cost of acquiring clinical trial materials from third party manufacturers; and |
· | costs associated with non-clinical activities, patent filings and regulatory filings. |
· | support of our expanded research and development activities; and |
· | an expanding infrastructure and increased professional fees and other costs associated with the regulatory requirements and increased compliance associated with being a public reporting company. |
|
|
For the year ended
|
|
|
|
|
|
|
||||
|
|
December 31,
|
|
Variance
|
|
|||||||
|
|
2013
|
|
2012
|
|
$
|
|
%
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
$
|
25,682
|
|
$
|
17,468
|
|
$
|
8,214
|
|
47
|
%
|
General and administrative
|
|
|
10,098
|
|
|
8,665
|
|
|
1,433
|
|
17
|
%
|
In-process research and development
|
|
|
|
|
|
1,043
|
|
|
(1,043)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
(35,780)
|
|
|
(27,176)
|
|
|
8,604
|
|
32
|
%
|
Interest income
|
|
|
545
|
|
|
236
|
|
|
309
|
|
131
|
%
|
Interest expense
|
|
|
(1,923)
|
|
|
(670)
|
|
|
1,253
|
|
187
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(37,158)
|
|
$
|
(27,610)
|
|
$
|
9,548
|
|
35
|
%
|
40 | ||
|
|
For the year ended
|
|
|
|
|
|
|
||||
|
|
December 31,
|
|
Variance
|
|
|||||||
|
|
2012
|
|
2011
|
|
$
|
|
%
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
$
|
17,468
|
|
$
|
8,583
|
|
$
|
8,885
|
|
104
|
%
|
General and administrative
|
|
|
8,665
|
|
|
5,755
|
|
|
2,910
|
|
51
|
%
|
In-process research and development
|
|
|
1,043
|
|
|
20,706
|
|
|
(19,663)
|
|
(95)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
(27,176)
|
|
|
(35,044)
|
|
|
(7,868)
|
|
(22)
|
%
|
Interest income
|
|
|
236
|
|
|
165
|
|
|
71
|
|
43
|
%
|
Interest expense
|
|
|
(670)
|
|
|
(74)
|
|
|
596
|
|
805
|
%
|
Warrant expense
|
|
|
|
|
|
(1,407)
|
|
|
(1,407)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(27,610)
|
|
$
|
(36,360)
|
|
$
|
(8,750)
|
|
(24)
|
%
|
41 | ||
42 | ||
|
|
For the Year Ended December 31,
|
|
|||||||
(In thousands)
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
Statement of Cash Flows Data:
|
|
|
|
|
|
|
|
|
|
|
Total cash provided by (used in):
|
|
|
|
|
|
|
|
|
|
|
Operating activities
|
|
$
|
(29,646)
|
|
$
|
(23,194)
|
|
$
|
(10,952)
|
|
Investing activities
|
|
|
(188)
|
|
|
(279)
|
|
|
(3,843)
|
|
Financing activities
|
|
|
89,156
|
|
|
40,512
|
|
|
23,093
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase in cash and cash equivalents
|
|
$
|
59,322
|
|
$
|
17,039
|
|
$
|
8,298
|
|
43 | ||
|
|
|
Payments due by period
|
|
||||||||||||
|
|
|
|
|
Less than
|
|
1 to 3
|
|
4 to 5
|
|
After 5
|
|
||||
($ in thousands)
|
|
Total
|
|
1 year
|
|
years
|
|
years
|
|
years
|
|
|||||
Note Payable and interest (1)
|
|
$
|
15,600
|
|
$
|
7,305
|
|
$
|
8,295
|
|
$
|
|
|
$
|
|
|
Operating leases (2)
|
|
|
1,231
|
|
|
351
|
|
|
858
|
|
|
22
|
|
|
|
|
Annual license fees (3)
|
|
|
13,918
|
|
|
4,468
|
|
|
2,950
|
|
|
500
|
|
|
6,000
|
|
Purchase and other obligations
|
|
|
8,437
|
|
|
4,947
|
|
|
3,490
|
|
|
|
|
|
|
|
Total
|
|
$
|
39,186
|
|
$
|
17,071
|
|
$
|
15,593
|
|
$
|
522
|
|
$
|
6,000
|
|
(1)
|
Relates to Hercules Note.
|
(2)
|
Relates to New York, NY, Burlington, MA and Woburn, MA leases.
|
(3)
|
Annual sublicense fees are projected through 2025 and include payments to Ovamed, Falk and UCLB.
|
44 | ||
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
Item 8.
|
Financial Statements and Supplementary Data.
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
|
Item 9A.
|
Controls and Procedures.
|
45 | ||
Item 9B.
|
Other Information.
|
46 | ||
|
|
|
|
Weighted-
|
|
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
|
Number of
|
|
Exercise
|
|
Number of Securities
|
|
|
|
|
Securities to be
|
|
Price of
|
|
Remaining Available for
|
|
|
|
|
Issued Upon
|
|
Outstanding
|
|
Future Issuance
|
|
|
|
|
Exercise of
|
|
Options,
|
|
Under Equity
|
|
|
|
|
Outstanding
|
|
Warrants
|
|
Compensation Plans
|
|
|
|
|
Options, Warrants
|
|
and
|
|
(Excluding Securities
|
|
|
|
|
and Rights
|
|
Rights
|
|
Reflected in Column (a))
|
|
|
Plan Category
|
|
(a)
|
|
(b)
|
|
(c)
|
|
|
Equity compensation plans approved by
stockholders |
|
3,117,777
|
|
$
|
4.58
|
|
966,720
|
|
Equity compensation plans not approved by
stockholders |
|
711,895
|
|
$
|
2.10
|
|
|
|
Total
|
|
3,829,672
|
|
|
|
|
966,720
|
|
47 | ||
48 | ||
Report of Independent Registered Public Accounting Firm
|
F-2
|
Consolidated Balance Sheets
|
F-3
|
Consolidated Statements of Operations
|
F-4
|
Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders’ Equity (Deficit)
|
F-5
|
Consolidated Statements of Cash Flows
|
F-7
|
Notes to Consolidated Financial Statements
|
F-9 F-32
|
|
|
|
|
Incorporated by Reference
|
||||||
|
|
|
|
(Unless Otherwise Indicated)
|
||||||
Exhibit
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
Exhibit Title
|
|
Form
|
|
File
|
|
Exhibit
|
|
Filing Date
|
|
|
|
|
|
|
|
|
|
|
|
3.1
|
|
Amended and Restated Certificate of Incorporation of the Registrant.
|
|
10-12G
|
|
000-54469
|
|
3.1
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
3.2
|
|
First Certificate of Amendment of Amended and Restated Certificate of Incorporation.
|
|
10-12G
|
|
000-54469
|
|
3.2
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
3.3
|
|
Certificate of Designation, Preferences and Rights of the Series B Preferred Stock.
|
|
10-12G
|
|
000-54469
|
|
3.3
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
3.4
|
|
Certificate of Designation, Preferences and Rights of the Series C Preferred Stock.
|
|
10-12G
|
|
000-54469
|
|
3.4
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.6
|
|
Amended and Restated Bylaws of the Registrant.
|
|
10-12G
|
|
000-54469
|
|
3.6
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
3.7
|
|
Second Amended and Restated Bylaws of the Registrant.
|
|
8-K
|
|
|
|
3.7
|
|
October 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
3.8
|
|
Second Certificate of Amendment of Amended and Restated Certificate of Incorporation, as Amended, of the Registrant.
|
|
|
|
|
|
3.8
|
|
Filed herewith
|
|
|
|
|
|
|
|
|
|
|
|
4.1
|
|
Form of Common Stock Certificate.
|
|
10-12G
|
|
000-54469
|
|
4.1
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
4.2
|
|
Form of Series A Preferred Stock Certificate.
|
|
10-12G
|
|
000-54469
|
|
4.2
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
4.3
|
|
Form of Series B Preferred Stock Certificate.
|
|
10-12G
|
|
000-54469
|
|
4.3
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
4.4
|
|
Form of Series C Preferred Stock Certificate.
|
|
10-12G
|
|
000-54469
|
|
4.4
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
4.5
|
|
Form of Warrant for the Purchase of Shares of Common Stock issued by the Registrant in connection with the 2008 bridge financing.
|
|
10-12G
|
|
000-54469
|
|
4.5
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
4.6
|
|
Form of Warrant for the Purchase of Shares of Common Stock issued by the Registrant in connection with the 2009 bridge financing.
|
|
10-12G
|
|
000-54469
|
|
4.6
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
4.7
|
|
Form of Warrant for the Purchase of Shares of Common Stock issued by the Registrant in connection with the Series A financing.
|
|
10-12G
|
|
000-54469
|
|
4.7
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
4.8
|
|
Form of Series C Convertible Preferred Stock Purchase Warrant issued by the Registrant in connection with the 2011 Series C financing.
|
|
10-12G
|
|
000-54469
|
|
4.8
|
|
July 15, 2011
|
49 | ||
4.10
|
|
Form of Consultant/Agent Warrant to Purchase Common Stock.
|
|
10-12G
|
|
000-54469
|
|
4.10
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
4.11
|
|
Warrant to Purchase Common Stock issued by the Registrant in connection with the 2012 secured loan facility with Hercules Technology Growth Capital, Inc.
|
|
8-K
|
|
|
|
4.10
|
|
August 29, 2012
|
|
|
|
|
|
|
|
|
|
|
|
10.1
|
|
Form of Note Purchase Agreement relating to the 2008 bridge financing.
|
|
10-12G
|
|
000-54469
|
|
10.1
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
10.2
|
|
Form of Note Purchase Agreement relating to the 2009 bridge financing.
|
|
10-12G
|
|
000-54469
|
|
10.2
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
10.3
|
|
Form of Subscription Agreement relating to the initial Series A financing.
|
|
10-12G
|
|
000-54469
|
|
10.3
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
10.4
|
|
Form of Subscription Agreement relating to the second Series A financing.
|
|
10-12G
|
|
000-54469
|
|
10.4
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
10.5
|
|
Form of Subscription Agreement relating to the Series C financing.
|
|
10-12G
|
|
000-54469
|
|
10.5
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
10.6
|
|
Form of Consent and Support Agreement.
|
|
10-12G
|
|
000-54469
|
|
10.6
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
10.7
|
|
Letter Agreement, dated April 29, 2011, by and between Manchester Securities Corp. and the Registrant.
|
|
10-12G
|
|
000-54469
|
|
10.7
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
10.8
|
|
Coronado Biosciences, Inc. 2007 Stock Incentive Plan.#
|
|
10-12G
|
|
000-54469
|
|
10.8
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
10.9
|
|
Form of 2007 Stock Incentive Plan and Award Agreement.#
|
|
10-12G
|
|
000-54469
|
|
10.9
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
10.10
|
|
Exclusive Sublicense Agreement, effective as of December 12, 2005, by and between Ovamed GmbH & Co KG and Collingwood Pharmaceuticals, Inc.
|
|
10-12G
|
|
000-54469
|
|
10.10
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
10.11
|
|
Manufacturing and Supply Agreement, dated March 29, 2006, by and among Collingwood Pharmaceuticals, Inc. and Ovamed GmbH.
|
|
10-12G
|
|
000-54469
|
|
10.11
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
10.12
|
|
License Agreement, dated November 5, 2007, between UCL Business PLC and the Registrant.
|
|
10-12G
|
|
000-54469
|
|
10.12
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
10.13
|
|
Letter Agreement, dated November 8, 2007, by and between Asphelia Pharmaceuticals, Inc. and Ovamed GmbH.
|
|
10-12G
|
|
000-54469
|
|
10.13
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
10.14
|
|
Amendment No. 1 to License Agreement, effective as of September 30, 2009, by and between the Registrant and UCL Business PLC.
|
|
10-12G
|
|
000-54469
|
|
10.14
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
10.15
|
|
Master Contract Services Agreement, effective as of April 1, 2010, by and between the Registrant and Progenitor Cell Therapy, LLC.
|
|
10-12G
|
|
000-54469
|
|
10.15
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
10.16
|
|
Term Sheet in causa Ovamed/Asphelia, dated June 8, 2010, by and between Ovamed GmbH and Asphelia, Inc.
|
|
10-12G
|
|
000-54469
|
|
10.16
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
10.17
|
|
Amendment and Agreement, dated January 7, 2011, by and among Asphelia Pharmaceuticals, Inc., the Registrant and OvaMed GmbH.
|
|
10-12G
|
|
000-54469
|
|
10.17
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
10.18
|
|
Asset Purchase Agreement, dated as of January 7, 2011, by and between the Registrant and Asphelia Pharmaceuticals, Inc.
|
|
10-12G
|
|
000-54469
|
|
10.18
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
10.19
|
|
Employment Agreement, dated as of March 21, 2011, by and among the Registrant and Bobby W. Sandage, Jr., Ph.D.#
|
|
10-12G
|
|
000-54469
|
|
10.19
|
|
July 15, 2011
|
50 | ||
10.20
|
|
Employment Agreement, dated as of April 1, 2011, by and among the Registrant and Glenn L. Cooper. M.D.#
|
|
10-12G
|
|
000-54469
|
|
10.20
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
10.21
|
|
Employment Agreement, dated as of May 16, 2011, by and between the Registrant and Dale Ritter.#
|
|
10-12G
|
|
000-54469
|
|
10.21
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
10.22
|
|
Separation Agreement, dated June 3, 2011, by and between the Registrant and Gary G. Gemignani.#
|
|
10-12G
|
|
000-54469
|
|
10.22
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
10.23
|
|
Separation Agreement, dated December 2, 2010, by and between the Registrant and Raymond J. Tesi, M.D.#
|
|
10-12G
|
|
000-54469
|
|
10.23
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
10.24
|
|
Consulting Agreement, entered into as of September 21, 2010, by and between the Registrant and Eric Rowinsky, M.D.#
|
|
10-12G
|
|
000-54469
|
|
10.24
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
10.25
|
|
Form of Indemnification Agreement by and between the Registrant and its officers and directors.
|
|
10-12G
|
|
000-54469
|
|
10.25
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
10.26
|
|
Lease Agreement dated May 26, 2011 relating to the Registrant’s premises located at 15 New England Executive Park, Burlington, Massachusetts 01803.
|
|
10-12G
|
|
000-54469
|
|
10.26
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
10.27
|
|
Master Contract Services Agreement, as of March 12, 2008, by and between the Registrant and BioReliance Corporation.
|
|
10-12G
|
|
000-54469
|
|
10.27
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
10.28
|
|
Consulting Agreements between the Registrant and each of Mark Lowdell, Ph.D. and UCL Consultants Limited.
|
|
10-12G
|
|
000-54469
|
|
10.28
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
10.29
|
|
10% Senior Promissory Note, as amended, issued by Asphelia Pharmaceuticals, Inc. to Paramount Credit Partners, LLC.
|
|
10-12G
|
|
000-54469
|
|
10.29
|
|
July 15, 2011
|
|
|
|
|
|
|
|
|
|
|
|
10.30
|
|
Employment Agreement, effective as of September 26, 2011, by and between the Registrant and Noah D. Beerman.#
|
|
8-K
|
|
|
|
10.30
|
|
September 26, 2011
|
|
|
|
|
|
|
|
|
|
|
|
10.31
|
|
Consulting Agreement, as of September 27, 2011, by and between the Registrant and Joel Weinstock, M.D.#
|
|
S-1/A
|
|
333-177041
|
|
10.31
|
|
October 7, 2011
|
|
|
|
|
|
|
|
|
|
|
|
10.32
|
|
Terms of Agreement, effective as of December 22, 2011, by and among the Registrant, OvaMed GmbH and Dr. Falk Pharma GmbH.
|
|
8-K
|
|
|
|
10.32
|
|
December 22, 2011
|
|
|
|
|
|
|
|
|
|
|
|
10.33
|
|
Amendment No. 1 to Employment Agreement, effective as of December 19, 2011, by and between the Registrant and Bobby W. Sandage, Jr., Ph.D.#
|
|
8-K
|
|
|
|
10.33
|
|
December 22, 2011
|
|
|
|
|
|
|
|
|
|
|
|
10.34
|
|
Side Agreement, effective as of November 15, 2011, by and between the University of Iowa Research Foundation, OvaMed GmbH and the Registrant.
|
|
S-1/A
|
|
333-177041
|
|
10.34
|
|
October 7, 2011
|
|
|
|
|
|
|
|
|
|
|
|
10.35
|
|
Employment Agreement, made and entered into on February 21, 2012, by and between the Registrant and Lucy Lu, M.D.#
|
|
8-K
|
|
|
|
10.35
|
|
February 23, 2012
|
|
|
|
|
|
|
|
|
|
|
|
10.36
|
|
Collaboration Agreement, dated as of March 20, 2012, between the Registrant, OvaMed GmbH and Dr. Falk Pharma GmbH.
|
|
8-K
|
|
|
|
10.36
|
|
March 23, 2012
|
|
|
|
|
|
|
|
|
|
|
|
10.37
|
|
Employment Agreement, made and entered into as of April 19, 2012, by and between the Registrant and Karin Hehenberger, M.D. and Ph.D.#
|
|
8-K
|
|
|
|
10.37
|
|
April 25, 2012
|
51 | ||
10.38
|
|
Amendment No. 2 to License Agreement, effective as of May 16, 2012, by and between the Registrant and UCL Business PLC.
|
|
8-K
|
|
|
|
10.38
|
|
May 25, 2012
|
|
|
|
|
|
|
|
|
|
|
|
10.39
|
|
Loan and Security Agreement, dated as of August 28, 2012, by and between the Registrant and Hercules Technology Growth Capital, Inc.
|
|
8-K
|
|
|
|
10.39
|
|
August 29, 2012
|
|
|
|
|
|
|
|
|
|
|
|
10.40
|
|
At Market Issuance Sales Agreement, dated as of October 5, 2012, by and between the Registrant and MLV & Co. LLC.
|
|
8-K
|
|
|
|
1.1
|
|
October 5, 2012
|
|
|
|
|
|
|
|
|
|
|
|
10.41
|
|
Second Amendment and Agreement, dated as of December 21, 2012, by and between the Registrant and Ovamed GmbH.
|
|
10-K
|
|
|
|
10.41
|
|
March 18, 2013
|
|
|
|
|
|
|
|
|
|
|
|
10.42
|
|
Separation and Release Agreement and Consulting Agreement, dated as of December 28, 2012, by and between the Registrant and Glenn L. Cooper, M.D.#
|
|
10-K
|
|
|
|
10.42
|
|
March 18, 2013
|
|
|
|
|
|
|
|
|
|
|
|
10.43
|
|
Second Amendment to Employment Agreement, dated as of December 28, 2012, by and between the Registrant and Bobby W. Sandage, Jr.#
|
|
10-K
|
|
|
|
10.43
|
|
March 18, 2013
|
|
|
|
|
|
|
|
|
|
|
|
10.44
|
|
Employment Agreement, dated as of January 7, 2013 and effective as of December 28, 2012, by and between the Registrant and Harlan F. Weisman, M.D.#
|
|
10-K
|
|
|
|
10.44
|
|
March 18, 2013
|
|
|
|
|
|
|
|
|
|
|
|
10.45
|
|
Commercial Lease Agreement effective March 1, 2013, by and between the Registrant and TSO Laboratories, Inc., as assigned to the Registrant on December 21, 2012.
|
|
10-K
|
|
|
|
10.45
|
|
March 18, 2013
|
|
|
|
|
|
|
|
|
|
|
|
10.46
|
|
At Market Issuance Sales Agreement, dated April 29, 2013, between the Registrant and MLV & Co. LLC.
|
|
8-K
|
|
|
|
10.46
|
|
April, 29, 2013
|
|
|
|
|
|
|
|
|
|
|
|
10.47
|
|
Research Agreement, dated February 22, 2013, by and between Coronado Biosciences, Inc. and Freie Universitat Berlin.
|
|
10-Q
|
|
|
|
10.47
|
|
May 9, 2013
|
|
|
|
|
|
|
|
|
|
|
|
10.48
|
|
License and Sublicense Agreement, dated February 22, 2013, by and between Coronado Biosciences, Inc. and Ovamed GmbH.
|
|
10-Q
|
|
|
|
10.48
|
|
May 9, 2013
|
|
|
|
|
|
|
|
|
|
|
|
10.49
|
|
Coronado Biosciences, Inc. 2013 Stock Incentive Plan.#
|
|
8-K
|
|
|
|
10.49
|
|
June 21, 2013
|
|
|
|
|
|
|
|
|
|
|
|
10.50
|
|
Amendment No. 1 to At Market Issuance Sales Agreement, dated July 12, 2013, between the Registrant and MLV & Co. LLC.
|
|
S-3
|
|
333-189935
|
|
10.50
|
|
July 12, 2013
|
|
|
|
|
|
|
|
|
|
|
|
10.51
|
|
Amendment to Employment Agreement dated April 19, 2013 by and between the Registrant and Dr. Karin Hehenberger, M.D., Ph.D.#
|
|
8-K
|
|
|
|
10.51
|
|
August 5, 2013
|
|
|
|
|
|
|
|
|
|
|
|
10.52
|
|
Executive Employment Agreement dated November 5, 2013 by and between Coronado Biosciences, Inc. and Kevin Horgan, M.D.#
|
|
8-K
|
|
|
|
10.52
|
|
November 6, 2013
|
|
|
|
|
|
|
|
|
|
|
|
10.53
|
|
Promissory Note dated as of February 13, 2014, in favor of Israel Discount Bank of New York.
|
|
8-K
|
|
|
|
10.53
|
|
February 18, 2014
|
52 | ||
10.54
|
|
Assignment and Pledge of Money Market Account dated as of February 13, 2014 in favor of Israel Discount Bank of New York.
|
|
8-K
|
|
|
|
10.54
|
|
February 18, 2014
|
|
|
|
|
|
|
|
|
|
|
|
10.55
|
|
Restricted Stock Issuance Agreement dated as of February 20, 2014, by and between the Registrant and Michael S. Weiss.
|
|
8-K/A
|
|
|
|
10.55
|
|
February 24, 2014
|
|
|
|
|
|
|
|
|
|
|
|
10.56
|
|
Shareholders’ Agreement dated as of February 20, 2014, by and among certain shareholders of the Registrant named therein.
|
|
8-K/A
|
|
|
|
10.56
|
|
February 24, 2014
|
|
|
|
|
|
|
|
|
|
|
|
10.57
|
|
Restricted Stock Issuance Agreement dated as of December 19, 2013, by and between the Registrant and Michael S. Weiss.
|
|
|
|
|
|
|
|
Filed herewith
|
|
|
|
|
|
|
|
|
|
|
|
10.58
|
|
Restricted Stock Issuance Agreement dated as of December 19, 2013, by and between the Registrant and Lindsay A. Rosenwald, MD.
|
|
|
|
|
|
|
|
Filed herewith
|
|
|
|
|
|
|
|
|
|
|
|
10.59
|
|
Confidential Separation and Release Agreement dated as of December 22, 2013, by and between the Registrant and Harlan F. Weisman, MD.#
|
|
|
|
|
|
|
|
Filed herewith
|
|
|
|
|
|
|
|
|
|
|
|
14.1
|
|
Code of Ethics of Coronado Biosciences, Inc. applicable to Directors, Officers and Employees.
|
|
S-1
|
|
333-177041
|
|
14.1
|
|
September 28, 2011
|
|
|
|
|
|
|
|
|
|
|
|
21.1
|
|
Subsidiaries of the Registrant.
|
|
|
|
|
|
|
|
Filed herewith
|
|
|
|
|
|
|
|
|
|
|
|
23.1
|
|
Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm.
|
|
|
|
|
|
|
|
Filed herewith
|
|
|
|
|
|
|
|
|
|
|
|
24.1
|
|
Power of Attorney (included on the signature page of this Form 10-K).
|
|
|
|
|
|
|
|
Filed herewith
|
|
|
|
|
|
|
|
|
|
|
|
31.1
|
|
Certification of Chairman, President and Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
|
Filed herewith
|
|
|
|
|
|
|
|
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
|
Filed herewith
|
|
|
|
|
|
|
|
|
|
|
|
32.1
|
|
Certification of the Chairman, President and Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
|
Filed herewith
|
|
|
|
|
|
|
|
|
|
|
|
32.2
|
|
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
|
Filed herewith
|
|
|
|
|
|
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document.
|
|
|
|
|
|
|
|
Furnished herewith
|
|
|
|
|
|
|
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
|
|
|
|
Furnished herewith
|
|
|
|
|
|
|
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
|
|
|
|
Furnished herewith
|
|
|
|
|
|
|
|
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
|
|
|
|
Furnished herewith
|
|
|
|
|
|
|
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
|
|
|
|
Furnished herewith
|
|
|
|
|
|
|
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
|
|
|
|
Furnished herewith
|
_______________
|
|
|
#
|
Management contract or compensatory plan.
|
|
|
The registrant has received confidential treatment with respect to portions of this exhibit. Those portions have been omitted from the exhibit and filed separately with the U.S. Securities and Exchange Commission.
|
53 | ||
|
Page(s)
|
|
|
Report of Independent Registered Public Accounting Firm
|
F-2
|
Consolidated Balance Sheets
|
F-3
|
Consolidated Statements of Operations
|
F-4
|
Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders’ Equity (Deficit)
|
F-5
|
Consolidated Statements of Cash Flows
|
F-7
|
Notes to Consolidated Financial Statements
|
F-9 F-32
|
F-1 | ||
F-2 | ||
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2013
|
|
|
2012
|
|
ASSETS
|
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
|
|
Cash
|
|
$
|
99,521
|
|
$
|
40,199
|
|
Prepaid and other current assets
|
|
|
510
|
|
|
393
|
|
Total current assets
|
|
|
100,031
|
|
|
40,592
|
|
Property & equipment, net
|
|
|
447
|
|
|
51
|
|
Other assets
|
|
|
104
|
|
|
349
|
|
Total Assets
|
|
$
|
100,582
|
|
$
|
40,992
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
468
|
|
$
|
1,029
|
|
Interest payable
|
|
|
109
|
|
|
119
|
|
Accrued expenses
|
|
|
4,430
|
|
|
2,185
|
|
Current portion of note payable
|
|
|
6,203
|
|
|
1,799
|
|
Total current liabilities
|
|
|
11,210
|
|
|
5,132
|
|
Note payable
|
|
|
7,017
|
|
|
12,386
|
|
Other long-term liabilities
|
|
|
1,077
|
|
|
1,441
|
|
Total Liabilities
|
|
|
19,304
|
|
|
18,959
|
|
Commitments and Contingencies (Note 6)
|
|
|
|
|
|
|
|
Stockholders’ Equity:
|
|
|
|
|
|
|
|
Convertible Preferred stock, $.001 par value, 129,767 and 584,390 Series C shares
authorized, 0 shares issued and outstanding as of December 31, 2013 and 2012, respectively |
|
|
|
|
|
|
|
Common stock, $.001 par value, 100,000,000 and 50,000,000 shares
authorized, 39,652,950 and 24,400,754 shares issued and outstanding as of December 31, 2013 and 2012, respectively |
|
|
40
|
|
|
24
|
|
Additional paid-in capital
|
|
|
202,580
|
|
|
106,193
|
|
Deficit accumulated during development stage
|
|
|
(121,342)
|
|
|
(84,184)
|
|
Total Stockholders’ Equity
|
|
|
81,278
|
|
|
22,033
|
|
Total Liabilities and Stockholders’ Equity
|
|
$
|
100,582
|
|
$
|
40,992
|
|
F-3 | ||
|
|
|
|
|
|
|
|
|
|
|
Period from
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 28, 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Date of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inception) to
|
|
|
|
|
For the year ended December 31,
|
|
December 31,
|
|
||||||||
|
|
2013
|
|
2012
|
|
2011
|
|
2013
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
$
|
25,682
|
|
$
|
17,468
|
|
$
|
8,583
|
|
$
|
67,691
|
|
General and administrative
|
|
|
10,098
|
|
|
8,665
|
|
|
5,755
|
|
|
26,377
|
|
In-process research and development
|
|
|
|
|
|
1,043
|
|
|
20,706
|
|
|
21,749
|
|
Loss from operations
|
|
|
(35,780)
|
|
|
(27,176)
|
|
|
(35,044)
|
|
|
(115,817)
|
|
Interest income
|
|
|
545
|
|
|
236
|
|
|
165
|
|
|
1,025
|
|
Interest expense
|
|
|
(1,923)
|
|
|
(670)
|
|
|
(74)
|
|
|
(5,876)
|
|
Other income
|
|
|
|
|
|
|
|
|
|
|
|
733
|
|
Warrant expense
|
|
|
|
|
|
|
|
|
(1,407)
|
|
|
(1,407)
|
|
Net loss
|
|
|
(37,158)
|
|
|
(27,610)
|
|
|
(36,360)
|
|
|
(121,342)
|
|
Common stock dividend to Series A Convertible Preferred
stockholders |
|
|
|
|
|
|
|
|
(5,861)
|
|
|
(5,861)
|
|
Net loss attributed to Common stockholders
|
|
$
|
(37,158)
|
|
$
|
(27,610)
|
|
$
|
(42,221)
|
|
$
|
(127,203)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per common share
|
|
$
|
(1.22)
|
|
$
|
(1.27)
|
|
$
|
(5.51)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstandingbasic
and diluted |
|
|
30,429,743
|
|
|
21,654,984
|
|
|
7,662,984
|
|
|
|
|
F-4 | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deficit
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
accumulated
|
|
Total
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
during
|
|
stockholders’
|
|
|||
|
|
Preferred Stock
|
|
Common stock
|
|
paid-in
|
|
development
|
|
Equity/
|
|
|||||||||
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
capital
|
|
stage
|
|
(Deficit)
|
|
|||||
Balances at June 28, 2006 (Date of Inception)
|
|
|
|
$
|
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(123)
|
|
|
(123)
|
|
Balances at December 31, 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(123)
|
|
|
(123)
|
|
Issuance of Common stock to founders
|
|
|
|
|
|
|
2,125,096
|
|
|
2
|
|
|
|
|
|
|
|
|
2
|
|
Issuance of restricted Common stock to non-
employees |
|
|
|
|
|
|
2,180,000
|
|
|
2
|
|
|
|
|
|
|
|
|
2
|
|
Issuance of restricted Common stock to
employees |
|
|
|
|
|
|
457,170
|
|
|
1
|
|
|
|
|
|
|
|
|
1
|
|
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
|
13
|
|
|
|
|
|
13
|
|
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,644)
|
|
|
(2,644)
|
|
Balances at December 31, 2007
|
|
|
|
|
|
|
4,762,266
|
|
|
5
|
|
|
13
|
|
|
(2,767)
|
|
|
(2,749)
|
|
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
|
25
|
|
|
|
|
|
25
|
|
Contribution of services by stockholder
|
|
|
|
|
|
|
|
|
|
|
|
|
20
|
|
|
|
|
|
20
|
|
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,799)
|
|
|
(3,799)
|
|
Balances at December 31, 2008
|
|
|
|
|
|
|
4,762,266
|
|
|
5
|
|
|
58
|
|
|
(6,566)
|
|
|
(6,503)
|
|
Issuance of Common stock to non-employees for
services |
|
|
|
|
|
|
5,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
|
39
|
|
|
|
|
|
39
|
|
Contribution of services by stockholder
|
|
|
|
|
|
|
|
|
|
|
|
|
40
|
|
|
|
|
|
40
|
|
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,666)
|
|
|
(3,666)
|
|
Balances at December 31, 2009
|
|
|
|
|
|
|
4,767,266
|
|
|
5
|
|
|
137
|
|
|
(10,232)
|
|
|
(10,090)
|
|
Issuance of Convertible Preferred Stock Series A
for cash |
|
2,584,166
|
|
|
21,681
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of Convertible Preferred Stock Series A
upon conversion of debt and accrued interest |
|
1,773,719
|
|
|
10,508
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs related to issuance of Convertible Preferred
Stock Series A, including Common stock warrants |
|
|
|
|
(2,912)
|
|
|
|
|
|
|
|
621
|
|
|
|
|
|
621
|
|
Reclassification of fair value of warrant liability
|
|
|
|
|
|
|
|
|
|
|
|
|
234
|
|
|
|
|
|
234
|
|
Change in fair value of embedded conversion
feature related to convertible debt |
|
|
|
|
|
|
|
|
|
|
|
|
831
|
|
|
|
|
|
831
|
|
Issuance of Common stock to non-employees for
services |
|
|
|
|
|
|
23,836
|
|
|
|
|
|
82
|
|
|
|
|
|
82
|
|
Issuance of Common stock warrants to non-
employees for services |
|
|
|
|
|
|
|
|
|
|
|
|
38
|
|
|
|
|
|
38
|
|
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
|
2,329
|
|
|
|
|
|
2,329
|
|
Contribution of services by stockholder
|
|
|
|
|
|
|
|
|
|
|
|
|
40
|
|
|
|
|
|
40
|
|
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(9,982)
|
|
|
(9,982)
|
|
F-5 | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deficit
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
accumulated
|
|
Total
|
|
||
|
|
|
|
|
|
|
|
|
|
|
AdditionaI
|
|
during
|
|
stockholders’
|
|
|||
|
|
Preferred Stock
|
|
Common stock
|
|
paid-in
|
|
development
|
|
Equity/
|
|
||||||||
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
capital
|
|
stage
|
|
(Deficit)
|
|
||||
Balances at December 31, 2010
|
|
4,357,885
|
|
|
29,277
|
|
4,791,102
|
|
5
|
|
|
4,312
|
|
|
(20,214)
|
|
|
(15,897)
|
|
Issuance of Convertible Preferred Stock Series B for
purchase of Asphelia assets |
|
2,525,677
|
|
|
16,114
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of Convertible Preferred Stock Series C for
cash |
|
4,612,624
|
|
|
25,785
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs related to issuance of Convertible Preferred
Stock Series C, including the fair value of Preferred Stock Series C warrants |
|
|
|
|
(4,171)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of Common stock for conversion of
Convertible Preferred Stock Series A |
|
(4,357,885)
|
|
|
(29,277)
|
|
4,357,885
|
|
4
|
|
|
29,273
|
|
|
|
|
|
29,277
|
|
Issuance of Common stock for conversion of
Convertible Preferred Stock Series B |
|
(2,525,677)
|
|
|
(16,114)
|
|
2,525,677
|
|
2
|
|
|
16,111
|
|
|
|
|
|
16,113
|
|
Issuance of Common stock for conversion of
Convertible Preferred Stock Series C |
|
(4,612,624)
|
|
|
(21,614)
|
|
4,612,624
|
|
5
|
|
|
21,609
|
|
|
|
|
|
21,614
|
|
Issuance of Common stock dividend to Preferred
Stock Series A stockholders |
|
|
|
|
|
|
2,178,917
|
|
2
|
|
|
(2)
|
|
|
|
|
|
|
|
Exercise of stock options
|
|
|
|
|
|
|
138,040
|
|
1
|
|
|
192
|
|
|
|
|
|
193
|
|
Warrant liability
|
|
|
|
|
|
|
|
|
|
|
|
2,693
|
|
|
|
|
|
2,693
|
|
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
1,469
|
|
|
|
|
|
1,469
|
|
Contribution of services by stockholder
|
|
|
|
|
|
|
|
|
|
|
|
30
|
|
|
|
|
|
30
|
|
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(36,360)
|
|
|
(36,360)
|
|
Balances at December 31, 2011
|
|
|
|
|
|
|
18,604,245
|
|
19
|
|
|
75,687
|
|
|
(56,574)
|
|
|
19,132
|
|
Issuance of Common stock for cash
|
|
|
|
|
|
|
5,750,000
|
|
5
|
|
|
28,745
|
|
|
|
|
|
28,750
|
|
Costs related to issuance of Common stock
|
|
|
|
|
|
|
|
|
|
|
|
(2,305)
|
|
|
|
|
|
(2,305)
|
|
Exercise of warrants
|
|
|
|
|
|
|
21,504
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of Common stock under ESPP
|
|
|
|
|
|
|
21,644
|
|
|
|
|
87
|
|
|
|
|
|
87
|
|
Issuance of Common stock for At the Market
Offering |
|
|
|
|
|
|
3,361
|
|
|
|
|
19
|
|
|
|
|
|
19
|
|
Costs related to the issuance of Common
stock for At the Market Offering |
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
|
|
|
(1)
|
|
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
3,961
|
|
|
|
|
|
3,961
|
|
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(27,610)
|
|
|
(27,610)
|
|
Balances at December 31, 2012
|
|
|
|
|
|
|
24,400,754
|
|
24
|
|
|
106,193
|
|
|
(84,184)
|
|
|
22,033
|
|
Exercise of stock options
|
|
|
|
|
|
|
550,157
|
|
1
|
|
|
969
|
|
|
|
|
|
970
|
|
Exercise of warrants
|
|
|
|
|
|
|
157,355
|
|
1
|
|
|
|
|
|
|
|
|
1
|
|
Issuance of Common stock under ESPP
|
|
|
|
|
|
|
27,570
|
|
|
|
|
92
|
|
|
|
|
|
92
|
|
Issuance of Common stock for At the Market
Offering |
|
|
|
|
|
|
10,558,422
|
|
10
|
|
|
91,327
|
|
|
|
|
|
91,337
|
|
Costs related to the issuance of Common
stock for At the Market Offering |
|
|
|
|
|
|
|
|
|
|
|
(1,899)
|
|
|
|
|
|
(1,899)
|
|
Issuance of Restricted Stock
|
|
|
|
|
|
|
3,958,692
|
|
4
|
|
|
(4)
|
|
|
|
|
|
|
|
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
5,902
|
|
|
|
|
|
5,902
|
|
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(37,158)
|
|
|
(37,158)
|
|
Balances at December 31, 2013
|
|
|
|
$
|
|
|
39,652,950
|
$
|
40
|
|
$
|
202,580
|
|
$
|
(121,342)
|
|
$
|
81,278
|
|
F-6 | ||
|
|
|
|
|
|
|
|
|
|
|
Period from
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 28, 2006
|
|
|
|
|
|
|
(Date of
|
|
||||||||
|
|
For the Year Ended
|
|
Inception) to
|
|
||||||||
|
|
December 31,
|
|
December 31,
|
|
||||||||
|
|
2013
|
|
2012
|
|
2011
|
|
2013
|
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(37,158)
|
|
$
|
(27,610)
|
|
$
|
(36,360)
|
|
$
|
(121,342)
|
|
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense
|
|
|
5,902
|
|
|
3,638
|
|
|
1,469
|
|
|
13,414
|
|
Acquired in-process research and development
|
|
|
|
|
|
1,043
|
|
|
20,706
|
|
|
21,749
|
|
Noncash interest expense
|
|
|
536
|
|
|
130
|
|
|
|
|
|
2,434
|
|
Noncash interest expenserelated parties
|
|
|
|
|
|
|
|
|
|
|
|
286
|
|
Contribution of services by stockholder
|
|
|
|
|
|
|
|
|
30
|
|
|
130
|
|
Issuance of Common stock to non-employee for services
|
|
|
|
|
|
|
|
|
|
|
|
121
|
|
Change in fair value of common stock warrant liability
|
|
|
|
|
|
|
|
|
|
|
|
234
|
|
Change in fair value of embedded conversion feature
|
|
|
|
|
|
|
|
|
|
|
|
831
|
|
Change in fair value of preferred stock warrant liability
|
|
|
|
|
|
|
|
|
1,407
|
|
|
1,407
|
|
Depreciation expense
|
|
|
17
|
|
|
3
|
|
|
22
|
|
|
61
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prepaid and other assets
|
|
|
(117)
|
|
|
(238)
|
|
|
(160)
|
|
|
(570)
|
|
Interest payablerelated parties
|
|
|
|
|
|
(19)
|
|
|
19
|
|
|
|
|
Interest payable
|
|
|
(10)
|
|
|
119
|
|
|
|
|
|
109
|
|
Accounts payable and accrued expenses
|
|
|
1,184
|
|
|
(260)
|
|
|
1,915
|
|
|
4,398
|
|
Net cash used in operating activities
|
|
|
(29,646)
|
|
|
(23,194)
|
|
|
(10,952)
|
|
|
(76,738)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of office equipment
|
|
|
(40)
|
|
|
(54)
|
|
|
|
|
|
(135)
|
|
Deposit for leasehold improvements
|
|
|
(148)
|
|
|
(225)
|
|
|
|
|
|
(373)
|
|
Purchase of in-process research and development
|
|
|
|
|
|
|
|
|
(3,843)
|
|
|
(3,843)
|
|
Net cash used in investing activities
|
|
|
(188)
|
|
|
(279)
|
|
|
(3,843)
|
|
|
(4,351)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from PCP notes payablerelated party
|
|
|
|
|
|
|
|
|
|
|
|
570
|
|
Payment of PCP notes payablerelated party
|
|
|
|
|
|
|
|
|
|
|
|
(570)
|
|
Payment of PCP notes payableAsphelia asset purchase
|
|
|
|
|
|
(750)
|
|
|
|
|
|
(750)
|
|
Proceeds from notes payablerelated parties
|
|
|
|
|
|
|
|
|
|
|
|
2,221
|
|
Proceeds from issuance of Series A Convertible Preferred Stock
|
|
|
|
|
|
|
|
|
|
|
|
21,681
|
|
Payment of costs related to the issuance of Series C
Convertible Preferred Stock |
|
|
|
|
|
|
|
|
|
|
|
(2,291)
|
|
Proceeds from issuance of Convertible Preferred Stock
Series C |
|
|
|
|
|
|
|
|
25,784
|
|
|
25,784
|
|
Payment of costs related to the issuance of Convertible
Preferred Stock Series C |
|
|
|
|
|
|
|
|
(2,884)
|
|
|
(2,884)
|
|
Proceeds from borrowings under line of credit
|
|
|
|
|
|
|
|
|
|
|
|
80
|
|
Payment of line of credit
|
|
|
|
|
|
|
|
|
|
|
|
(80)
|
|
Proceeds from Senior Convertible Notes
|
|
|
|
|
|
|
|
|
|
|
|
7,570
|
|
Payment of debt issue costs
|
|
|
|
|
|
|
|
|
|
|
|
(737)
|
|
Payment of notes payablerelated parties
|
|
|
|
|
|
|
|
|
|
|
|
(600)
|
|
Proceeds from issuance of Common stock
|
|
|
92,399
|
|
|
28,855
|
|
|
193
|
|
|
121,452
|
|
Payment of costs related to the issuance of Common stock
|
|
|
(1,898)
|
|
|
(2,305)
|
|
|
|
|
|
(4,203)
|
|
Payment of principal of Hercules Note
|
|
|
(1,345)
|
|
|
|
|
|
|
|
|
(1,345)
|
|
Proceeds from issuance of Hercules Note
|
|
|
|
|
|
15,000
|
|
|
|
|
|
15,000
|
|
Payment of debt issue costs associated with Hercules
Note |
|
|
|
|
|
(288)
|
|
|
|
|
|
(288)
|
|
Net cash provided by financing activities
|
|
|
89,156
|
|
|
40,512
|
|
|
23,093
|
|
|
180,610
|
|
Increase in cash and cash equivalents
|
|
|
59,322
|
|
|
17,039
|
|
|
8,298
|
|
|
99,521
|
|
Cashbeginning of period
|
|
|
40,199
|
|
|
23,160
|
|
|
14,862
|
|
|
|
|
Cashend of period
|
|
$
|
99,521
|
|
$
|
40,199
|
|
$
|
23,160
|
|
$
|
99,521
|
|
F-7 | ||
|
|
|
|
Period from
|
|
||||||||
|
|
|
|
June 28, 2006
|
|
||||||||
|
|
|
|
(Date of
|
|
||||||||
|
|
For the Year Ended
|
|
Inception) to
|
|
||||||||
|
|
December 31,
|
|
December 31,
|
|
||||||||
|
|
2013
|
|
2012
|
|
2011
|
|
|
2013
|
|
|||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for interest
|
|
$
|
1,387
|
|
$
|
421
|
|
$
|
53
|
|
$
|
1,949
|
|
Supplemental disclosure of non-cash financing and
investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of Convertible Preferred Stock Series B for
purchase of assets |
|
$
|
|
|
$
|
|
|
$
|
16,114
|
|
$
|
16,114
|
|
Assumption of PCP Note related to Asphelia Asset Purchase
|
|
$
|
|
|
$
|
|
|
$
|
750
|
|
$
|
750
|
|
Issuance of Convertible Preferred Stock Series C warrants
|
|
$
|
|
|
$
|
|
|
$
|
1,286
|
|
$
|
1,286
|
|
Issuance of Common stock warrants related to the Convertible Preferred Stock Series A financing
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
621
|
|
Conversion of Senior Convertible Notes into
Convertible Preferred Stock Series A |
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
8,601
|
|
Conversion of notes payablerelated parties into Convertible
Preferred Stock Series A |
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
1,907
|
|
Issuance of Common stock for Convertible Preferred Stock Series A, B and C
|
|
$
|
|
|
$
|
|
|
$
|
67,004
|
|
$
|
67,004
|
|
Issuance of Warrant related to Hercules Note
|
|
$
|
|
|
$
|
323
|
|
$
|
|
|
$
|
323
|
|
Issuance of Restricted Stock
|
|
$
|
4
|
|
$
|
|
|
$
|
|
|
$
|
4
|
|
F-8 | ||
F-9 | ||
F-10 | ||
F-11 | ||
|
|
For the year ended December 31,
|
|
|||||||
|
|
2013
|
|
2012
|
|
2011
|
|
|||
($ in thousands except share and per share amounts)
|
|
|
|
|
|
|
|
|
|
|
Historical net loss per share:
|
|
|
|
|
|
|
|
|
|
|
Numerator
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(37,158)
|
|
$
|
(27,610)
|
|
$
|
(36,360)
|
|
Common stock dividend to Series A Preferred
stockholders |
|
|
|
|
|
|
|
|
(5,861)
|
|
Net loss attributed to Common stockholders
|
|
$
|
(37,158)
|
|
$
|
(27,610)
|
|
$
|
(42,221)
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding
Denominator for basic and diluted net loss per share |
|
|
30,429,743
|
|
|
21,654,984
|
|
|
7,662,984
|
|
Basic and diluted net loss per share attributed
to common stockholders |
|
$
|
(1.22)
|
|
$
|
(1.27)
|
|
$
|
(5.51)
|
|
|
|
For the year ended December 31,
|
|
||||
|
|
2013
|
|
2012
|
|
2011
|
|
Series A Shares
|
|
|
|
|
|
3,796,733
|
|
Series B Shares
|
|
|
|
|
|
2,158,935
|
|
Series C Shares
|
|
|
|
|
|
1,966,635
|
|
Unvested restricted Common stock
|
|
|
|
|
|
|
|
Warrants to purchase Common stock
|
|
1,012,977
|
|
1,091,558
|
|
804,949
|
|
Options to purchase Common stock
|
|
3,936,199
|
|
2,279,603
|
|
1,479,291
|
|
Restricted Stock
|
|
140,995
|
|
|
|
|
|
|
|
5,090,171
|
|
3,371,161
|
|
10,206,543
|
|
F-12 | ||
|
|
Useful Life
|
|
As of December 31,
|
|
||||
($ in thousands)
|
|
(Years)
|
|
2013
|
|
2012
|
|
||
Construction in progress
|
|
N/A
|
|
$
|
373
|
|
$
|
|
|
Computer equipment
|
|
3
|
|
|
13
|
|
|
10
|
|
Furniture & fixtures
|
|
5
|
|
|
69
|
|
|
38
|
|
Leasehold improvements
|
|
5
|
|
|
12
|
|
|
6
|
|
Total property and equipment
|
|
|
|
|
467
|
|
|
54
|
|
Less: Accumulated depreciation
|
|
|
|
|
(20)
|
|
|
(3)
|
|
Property and equipment, net
|
|
|
|
$
|
447
|
|
$
|
51
|
|
|
|
As of December 31,
|
|
||||
|
|
2013
|
|
2012
|
|
||
($ in thousands)
|
|
|
|
|
|
|
|
Accrued expenses:
|
|
|
|
|
|
|
|
Salaries, bonuses and related benefits
|
|
$
|
450
|
|
$
|
1,064
|
|
Severance (Note 15)
|
|
|
1,502
|
|
|
354
|
|
Professional fees
|
|
|
351
|
|
|
320
|
|
Research and development expenses
|
|
|
1,245
|
|
|
403
|
|
State franchise taxes
|
|
|
190
|
|
|
|
|
Ovamed manufacturing rights short-term component (Note 14)
|
|
|
500
|
|
|
|
|
Other
|
|
|
192
|
|
|
44
|
|
Total accrued expenses
|
|
$
|
4,430
|
|
$
|
2,185
|
|
Other long-term liabilities:
|
|
|
|
|
|
|
|
Hercules Note end of term charge (Note 10)
|
|
|
398
|
|
|
398
|
|
Ovamed manufacturing rights long-term component (Note 14)
|
|
|
679
|
|
|
1,043
|
|
Total other long-term liabilities
|
|
$
|
1,077
|
|
$
|
1,441
|
|
F-13 | ||
($ in thousands)
|
|
|
|
|
2014
|
|
$
|
351
|
|
2015
|
|
|
365
|
|
2016
|
|
|
291
|
|
2017
|
|
|
202
|
|
2018
|
|
|
22
|
|
Total minimum lease payments
|
|
$
|
1,231
|
|
F-14 | ||
F-15 | ||
F-16 | ||
|
|
|
|
|
|
|
|
|
|
|
|
Period from June 28,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2006 (Date of
|
|
|
|
For the Year Ended December 31,
|
|
|
Inception) to
|
|
|||||||
($ in thousands)
|
|
2013
|
|
2012
|
|
2011
|
|
December 31, 2013
|
|
||||
Interest expense
|
|
$
|
1,903
|
|
$
|
609
|
|
$
|
|
|
$
|
3,544
|
|
Interest expenserelated parties
|
|
|
|
|
|
55
|
|
|
74
|
|
|
503
|
|
Amortization of embedded conversion feature
|
|
|
|
|
|
|
|
|
|
|
|
831
|
|
Change in fair value of common stock warrant liability
|
|
|
|
|
|
|
|
|
|
|
|
234
|
|
Amortization of deferred financing fees
|
|
|
20
|
|
|
6
|
|
|
|
|
|
764
|
|
Total interest expense
|
|
$
|
1,923
|
|
$
|
670
|
|
$
|
74
|
|
$
|
5,876
|
|
F-17 | ||
|
•
|
2,125,096 shares of fully vested common stock to its founders at par value of $0.001.
|
|
•
|
457,170 shares of restricted common stock were granted to certain employees of the Company under the Company’s 2007 Stock Incentive Plan, for payment of par value (see Note 13). The shares vest annually in equal amounts over three years and the fair value of the awards was determined and fixed on the grant date. Compensation expense is recorded on a straight-line basis over the vesting period.
|
|
•
|
2,180,000 shares of restricted common stock were issued to certain employees of PBS at par value of $0.001 that vest annually in equal amounts over three years (see Note 13). PBS provided various services to the Company. The fair value of the awards was determined on the grant date and the unvested awards were remeasured each reporting period. Compensation expense is recorded on a straight-line basis over the vesting period.
|
F-18 | ||
F-19 | ||
F-20 | ||
F-21 | ||
|
•
|
Risk-Free Interest Rate: The risk-free interest rate is based on the yields of United States Treasury securities with maturities similar to the expected term of the options for each option group.
|
|
•
|
Volatility: As the Company has a very limited trading history for its Common Stock, the expected stock price volatility for its Common Stock was estimated by incorporating two years of the Company’s historical volatility and the average historical price volatility for industry peers based on daily price observations over a period equivalent to the expected term of the stock option grants. Industry peers consist of several public companies in the biopharmaceutical industry similar in size, stage of life cycle and financial leverage. The Company’s historical volatility is weighted with that of the peer group and that combined historical volatility is weighted 80% with a 20% weighting of the Company’s implied volatility, which is obtained from traded options of the Company’s stock. The Company intends to continue to consistently apply this process using the same or similar public companies until it has sufficient historical information regarding the volatility of its Common Stock that is consistent with the expected life of the options. Should circumstances change such that the identified companies are no longer similar to the Company, more suitable companies whose share prices are publicly available would be utilized in the calculation.
|
|
•
|
Expected Term: Due to the limited exercise history of the Company’s stock options, the Company determined the expected term based on the stratification of option-holder groups. Employee options meet the criteria for the Simplified Method under SAB 107, while, while the expected term for non-employees is the remaining contractual life for both options and warrants.
|
|
•
|
Expected Dividend Rate: The Company has not paid and does not anticipate paying any cash dividends in the near future.
|
Stock option plans
|
|
|
2013
|
|
|
|
2012
|
|
Exercise price
|
|
|
$1.71$9.21
|
|
|
|
$4.75$7.84
|
|
Expected stock price volatility
|
|
|
81.3%112.7%
|
|
|
|
87.3%114.3%
|
|
Risk free rate of interest
|
|
|
1.01%3.04%
|
|
|
|
0.16%2.23%
|
|
Expected life of options
|
|
|
6 years10 years
|
|
|
|
2 years10 years
|
|
|
|
|
|
|
|
|
|
Period from
|
|
||||
|
|
|
|
|
|
|
|
June 28, 2006
|
|
||||
|
|
|
|
|
|
|
|
(Date of Inception) to
|
|
||||
|
|
2013
|
|
2012
|
|
2011
|
|
December 31, 2013
|
|
||||
($ in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee awards
|
|
$
|
4,867
|
|
$
|
2,408
|
|
$
|
520
|
|
$
|
8,072
|
|
Non-employee awards
|
|
|
897
|
|
|
664
|
|
|
662
|
|
|
4,310
|
|
Non-employee warrants
|
|
|
138
|
|
|
566
|
|
|
287
|
|
|
1,032
|
|
Total compensation expense
|
|
$
|
5,902
|
|
$
|
3,638
|
|
$
|
1,469
|
|
$
|
13,414
|
|
F-22 | ||
|
|
Outstanding Options
|
|
Weighted
|
|
||||||
|
|
Number of
Shares |
|
Weighted
Average Exercise Price |
|
Total
Weighted Average Intrinsic Value |
|
Average
Remaining Contractual Life (in years) |
|
||
($ in thousands except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at December 31, 2012
|
|
2,519,070
|
|
$
|
3.37
|
|
$
|
2,860
|
|
8.54
|
|
Options granted
|
|
2,466,590
|
|
$
|
5.34
|
|
|
|
|
|
|
Options exercised
|
|
(550,157)
|
|
$
|
1.76
|
|
|
478
|
|
|
|
Options cancelled/forfeited
|
|
(1,317,726)
|
|
$
|
5.51
|
|
|
|
|
|
|
Outstanding at December 31, 2013
|
|
3,117,777
|
|
$
|
4.31
|
|
$
|
|
|
8.36
|
|
Options vested and expected to vest
|
|
3,117,777
|
|
$
|
4.31
|
|
$
|
|
|
8.36
|
|
Options vested and exercisable
|
|
2,169,444
|
|
$
|
3.75
|
|
$
|
|
|
7.87
|
|
|
|
Restricted Stock
|
|
|||
|
|
|
|
Weighted
|
|
|
|
|
|
|
Average Grant
|
|
|
|
|
Number of
|
|
Date
|
|
|
|
|
Shares
|
|
Fair Value
|
|
|
Unvested balance at December 31, 2012
|
|
|
|
$
|
|
|
Restricted stock granted
|
|
3,958,692
|
|
|
1.93
|
|
Restricted stock vested
|
|
|
|
|
|
|
Restricted stock forfeited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unvested balance at December 31, 2013
|
|
3,958,692
|
|
$
|
1.93
|
|
F-23 | ||
($ in thousands)
|
|
|
|
|
Fair value of 2,525,677 Series B Shares
|
|
$
|
16,114
|
|
Cash payment
|
|
|
3,809
|
|
Fair value of PCP Note
|
|
|
750
|
|
Other transaction costs
|
|
|
33
|
|
Total asset acquisition cost
|
|
$
|
20,706
|
|
F-24 | ||
F-25 | ||
F-26 | ||
F-27 | ||
F-28 | ||
|
|
As of December 31,
|
|
||||
|
|
2013
|
|
2012
|
|
||
($ in thousands)
|
|
|
|
|
|
|
|
Deferred tax assets:
|
|
|
|
|
|
|
|
Net operating loss carryforwards
|
|
$
|
31,450
|
|
$
|
19,572
|
|
Amortization of up-front fees
|
|
|
2,865
|
|
|
3,087
|
|
Amortization of in-process R&D
|
|
|
460
|
|
|
407
|
|
Stock compensation
|
|
|
2,827
|
|
|
1,522
|
|
Accruals and reserves
|
|
|
854
|
|
|
622
|
|
Tax credits
|
|
|
2,686
|
|
|
991
|
|
Total deferred tax assets
|
|
|
41,142
|
|
|
26,201
|
|
Valuation allowance
|
|
|
(41,142)
|
|
|
(26,201)
|
|
Net deferred tax assets
|
|
$
|
|
|
$
|
|
|
F-29 | ||
|
|
For the Year Ended December 31,
|
|
||||||
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
Percentage of pre-tax income:
|
|
|
|
|
|
|
|
|
|
U.S. federal statutory income tax rate
|
|
35
|
%
|
|
35
|
%
|
|
35
|
%
|
State taxes, net of federal benefit
|
|
4
|
%
|
|
4
|
%
|
|
5
|
%
|
Acquired NOL
|
|
|
|
|
|
|
|
9
|
%
|
Credits
|
|
4
|
%
|
|
1
|
%
|
|
2
|
%
|
Non-deductible items
|
|
(2)
|
%
|
|
(2)
|
%
|
|
(21)
|
%
|
Other (1)
|
|
(1)
|
%
|
|
(5)
|
%
|
|
(2)
|
%
|
Change in valuation allowance
|
|
(40)
|
%
|
|
(33)
|
%
|
|
(28)
|
%
|
Effective income tax rate
|
|
0
|
%
|
|
0
|
%
|
|
0
|
%
|
F-30 | ||
F-31 | ||
(in thousands, except per share data)
|
|
First
Quarter |
|
Second
Quarter |
|
Third
Quarter |
|
Fourth
Quarter |
|
||||
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
$
|
(8,458)
|
|
$
|
(10,294)
|
|
$
|
(7,504)
|
|
$
|
(9,524)
|
|
Other income/(expense)
|
|
$
|
(400)
|
|
$
|
(376)
|
|
$
|
(328)
|
|
$
|
(274)
|
|
Net loss
|
|
$
|
(8,858)
|
|
$
|
(10,670)
|
|
$
|
(7,832)
|
|
$
|
(9,798)
|
|
Basic and diluted net loss per common share
|
|
$
|
(0.35)
|
|
$
|
(0.38)
|
|
$
|
(0.24)
|
|
$
|
(0.27)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
$
|
(6,581)
|
|
$
|
(6,465)
|
|
$
|
(5,831)
|
|
$
|
(8,299)
|
|
Other income/(expense)
|
|
$
|
25
|
|
$
|
10
|
|
$
|
(104)
|
|
$
|
(365)
|
|
Net loss
|
|
$
|
(6,556)
|
|
$
|
(6,455)
|
|
$
|
(5,935)
|
|
$
|
(8,664)
|
|
Basic and diluted net loss per common share
|
|
$
|
(0.35)
|
|
$
|
(0.34)
|
|
$
|
(0.24)
|
|
$
|
(0.36)
|
|
F-32 | ||
|
Coronado Biosciences, Inc.
|
|
|
|
|
|
By:
|
/s/ Lindsay A. Rosenwald, M.D.
|
|
|
Name: Lindsay A. Rosenwald, M.D.
|
|
|
Title: Chairman, President and Chief Executive Officer
|
|
March 14, 2014
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Lindsay A. Rosenwald, M.D.
|
|
Chairman of the Board of Directors, President and Chief
|
|
March 14, 2014
|
Lindsay A. Rosenwald, M.D.
|
|
Executive Officer (principal executive officer)
|
|
|
|
|
|
|
|
/s/ Lucy Lu, M.D.
|
|
Executive Vice President and Chief Financial Officer
|
|
March 14, 2014
|
Lucy Lu, M.D.
|
|
(principal financial officer)
|
|
|
|
|
|
|
|
/s/ Eric K. Rowinsky, M.D.
|
|
Vice Chairman of the Board of Directors
|
|
March 14, 2014
|
Eric K. Rowinsky, M.D.
|
|
|
|
|
|
|
|
|
|
/s/ Michael S. Weiss
|
|
Executive Vice Chairman, Strategic Development and
|
|
March 14, 2014
|
Michael S. Weiss
|
|
Director
|
|
|
|
|
|
|
|
/s/ David J. Barrett
|
|
Director
|
|
March 14, 2014
|
David J. Barrett
|
|
|
|
|
|
|
|
|
|
/s/ Jimmie Harvey, Jr., M.D.
|
|
Director
|
|
March 14, 2014
|
Jimmie Harvey, Jr., M.D.
|
|
|
|
|
|
|
|
|
|
/s/ J. Jay Lobell
|
|
Director
|
|
March 14, 2014
|
J. Jay Lobell
|
|
|
|
|
|
|
|
|
|
/s/ Malcolm Hoenlein
|
|
Director
|
|
March 14, 2014
|
Malcolm Hoenlein
|
|
|
|
|
Exhibit 3.8
SECOND CERTIFICATE OF AMENDMENT OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION, AS AMENDED
OF
CORONADO BIOSCIENCES, INC.
Coronado Biosciences, Inc., a corporation organized and existing under the laws of the State of Delaware (the “Company”), does hereby certify as follows:
ONE: The Company’s original Certificate of Incorporation was filed with the Delaware Secretary of State on June 28, 2006. An Amended and Restated Certificate of Incorporation of the Company was filed with the Delaware Secretary of State on April 21, 2010. A First Certificate of Amendment of Amended and Restated Certificate of Incorporation of the Company was filed with the Delaware Secretary of State on May 20, 2011.
TWO: Harlan F. Weisman is the duly elected Chairman of the Board of Directors of the Company and Chief Executive Officer of the Company.
THREE: This amendment of the Company’s Amended and Restated Certificate of Incorporation, as amended to date was duly adopted by the Company’s Board of Directors and stockholders in accordance with the applicable provisions of Sections 242 and 211 of the General Corporation Law of the State of Delaware.
FOUR: Article IV, Section A of the Company’s Amended and Restated Certificate of Incorporation, as amended to date is hereby amended to read in its entirety as follows:
“This Corporation is authorized to issue two classes of stock to be designated “Common Stock” and “Preferred Stock.” The total number of shares which the Corporation is authorized to issue is 115,000,000 shares, 100,000,000 of which shall be Common Stock, par value $0.001 per share, and 15,000,000 of which shall be Preferred Stock, par value $0.001 per share.”
FIVE: All other provisions of the Company’s Amended and Restated Certificate of Incorporation, as amended to date shall remain in full force and effect.
SIX: This Second Certificate of Amendment will be effective upon filing.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Company has caused this Second Certificate of Amendment to be executed on its behalf by Harlan Weisman, its Chairman of the Board and Chief Executive Officer, effective as of October 1, 2013.
CORONADO BIOSCIENCES, INC. | ||
By: | /s/ Harlan F. Weisman | |
Harlan Weisman, Chairman of the Board of Directors and Chief Executive Officer |
Exhibit 10.57
Coronado Biosciences Inc.
RESTRICTED STOCK ISSUANCE AGREEMENT
This RESTRICTED STOCK ISSUANCE AGREEMENT (the “Agreement”) is made and entered into as of December 19, 2013, by and between Coronado Biosciences Inc., a Delaware corporation (the “Company”), and Michael S. Weiss (the “Grantee”).
WHEREAS, in connection with Grantee’s service to the Company, the Company has agreed to issue One Million Nine Hundred Seventy-Nine Thousand Three Hundred Forty-Six (1,979,346) shares of Common Stock (the “Shares”).
NOW, THEREFORE, the parties agree as follows.
1. Issuance of Stock. The Company hereby agrees to issue to the Grantee the Shares, which for purposes of this Agreement have a fair market value equal to the closing price of $2.08 per share on December 18, 2013. All of the Shares received by the Grantee from the Company pursuant to this Agreement are subject to an option by the Company to repurchase such Shares.
2. Repurchase Option.
(a) The later of (i) voluntary termination of the Grantee’s employment with the Company, if Grantee is employed by the Company, and (ii) Grantee’s voluntary resignation from the Board of Directors of the Company, or refusal to stand for re-election, other than in both instances due to a disagreement with the Company (referred to as “a voluntary resignation”), shall be a “Triggering Event.”
(b) In the event that a Triggering Event occurs, the Company shall have an option (the “Repurchase Option”) for a period of 90 days following the Triggering Event to repurchase any of the Shares that are not vested under the vesting schedule set forth on Exhibit A hereto (“Unvested Shares”) at the price per share designated pursuant to paragraph (c) hereof. In the event the Company elects to exercise the Repurchase Option, it shall be exercised by the Company by written notice to the Grantee, which notice shall specify the number of Shares and the time (not later than 30 days from the date of the Company’s notice) and place for the closing of the repurchase of the Shares, which shall be reasonably convenient to the Grantee. Upon delivery of such notice and payment of the purchase price in accordance with the terms herewith, the Company shall become the legal and beneficial owner of the Shares being repurchased and all rights and interests therein or relating thereto, and the Company shall have the right to retain and transfer to its own name the number of Shares being repurchased by the Company.
(c) The purchase price for each Unvested Share repurchased pursuant to the Repurchase Option shall be $0.001 per share.
(d) Said purchase price shall be paid to the Grantee, at the Company’s option, (i) by delivery of a cashier’s check in the amount of the purchase price, (ii) by cancellation of any amount of the Grantee’s indebtedness to the Company equal to the purchase price for the shares being repurchased, or (iii) by a combination of (i) and (ii) so that the combined payment and cancellation of indebtedness equals such purchase price.
(e) Whenever the Company shall have the right to repurchase Shares hereunder, the Board of Directors may designate and assign to one or more assignees the right to exercise all or part of the Repurchase Option, provided that such assignees comply with the terms of this Agreement. In the event an assignee exercises all or part of the Repurchase Option, the purchase price shall be paid to the Grantee by delivery of a cashier’s check or in such other form acceptable to the Grantee.
3. Release of Shares From Repurchase Option/Accelerated Vesting. In the event the Repurchase Option is triggered pursuant to a Triggering Event and the Company (or its assigns) fails to exercise the Repurchase Option or timely complete the repurchase of any of the Shares, then, upon the expiration of the 90-day option exercise period, or the subsequent 30-day repurchase period, as the case may be, any and all such Shares not repurchased by the Company shall be immediately released from the Repurchase Option. In the event of any termination of Grantee’s employment with the Company or service on the Board of Directors of the Company, that does not constitute a Triggering Event, then all Shares shall be immediately released from the Repurchase Option. Upon the expiration or release of the Repurchase Option any unvested Shares shall immediately vest.
4. Restriction on Transfer. Except for a transfer to a “Related Party” (as defined below), none of the Unvested Shares or any beneficial interest therein shall be transferred, pledged, hypothecated, encumbered or otherwise disposed of in any way. For purposes of this Agreement, “Related Party” shall mean a spouse, lineal ancestor or descendant, natural or adopted, a spouse of a lineal ancestor or descendant, or a trust for the sole benefit of such persons or any of them.
All transferees of Shares or any interest therein (including Related Parties) will receive and hold such Shares or interest subject to the provisions of this Agreement, and shall agree in writing to take such Shares or interest therein subject to all the terms of this Agreement, including restrictions on further transfer. Any sale or transfer of the Company’s Shares shall be void unless the provisions of this Agreement are met.
5. Voting and Dividend Rights. Grantee, as beneficial owner of the Shares, shall have full voting and dividend rights with respect to the Shares during and after the vesting period. Dividends, if any, declared and paid on the Shares during the vesting period shall be accrued by the Company during the vesting period and paid to Grantee only if and when the related Shares vest and become non-forfeitable as provided in Sections 2 and 3 hereof. Any such accrued dividends shall be paid to Grantee no later than 30 days after the applicable vesting date. If any Unvested Shares are repurchased pursuant to the Repurchase Option, then, on the date of such repurchase, Grantee shall no longer have any rights as a stockholder with respect to such repurchased Shares or any interest therein, and Grantee shall not be entitled to receive any accrued dividends previously declared on such repurchased Shares.
6. Investment Intent; Legends on Certificates.
(a) Simultaneously with the execution hereof, the Grantee has executed and delivered to the Company a copy of the Investment Representation Statement in the form of Exhibit B hereto concerning the Grantee’s investment intent with respect to the Shares.
(b) The Grantee acknowledges that the certificates evidencing the Shares shall be endorsed with a legend, in addition to any other legends required by this Agreement or any other agreement to which the Shares are subject, substantially as follows.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD, MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS, OR THE AVAILABILITY OF EXEMPTIONS FROM SUCH REGISTRATION PROVISIONS. |
(c) The Grantee understands and agrees that neither the Company nor any agent of the Company shall be under any obligation to recognize and transfer any of the Shares if, in the opinion of counsel for the Company, such transfer would result in violation by the Company of any federal or state law with respect to the offering, issuance or sale of securities.
7. Adjustment for Stock Splits and the Like. All references to the number of Shares shall be appropriately adjusted to reflect any stock split, stock dividend or other change in the Shares that may be made by the Company after the date of this Agreement.
8. Tax Consequences.
(a) The Grantee has reviewed with the Grantee’s own tax advisors the federal, state, local and foreign (if applicable) tax consequences of this investment and the transactions contemplated by this Agreement. The Grantee is relying solely on such advisors and not on any statements or representations of the Company or any of its agents. The Grantee (and not the Company) shall be responsible for the Grantee’s own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement. The Grantee understands that Section 83 of the Internal Revenue Code of 1986, as amended (the “Code”), taxes as ordinary income the difference between the amount paid for the Shares and the fair market value of the Shares as of the date any restrictions on the Shares lapse. The Grantee understands that he may elect to be taxed at the time the Shares are purchased rather than when and as the Repurchase Option or 16(b) period expires by filing an election under Section 83(b) of the Code with the I.R.S. within 30 days from the date of purchase.
(b) THE GRANTEE ACKNOWLEDGES THAT IT IS THE GRANTEE’S SOLE RESPONSIBILITY AND NOT THE COMPANY’S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE GRANTEE REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE GRANTEE’S BEHALF.
(c) If the Grantee makes any tax election relating to the treatment of the Shares under the Code, at the time of such election the Grantee shall promptly notify the Company of such election.
9. General Provisions.
(a) This Agreement shall be construed and enforced in accordance with and governed by the laws of the State of New York. This Agreement represents the entire agreement between the parties with respect to the repurchase of the Shares by the Company and may be modified or amended only in a writing signed by all parties hereto.
(b) In addition to the legend set forth in paragraph 6 of this Agreement, the certificates representing the Shares shall be endorsed with the following legend.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A RESTRICTED STOCK ISSUANCE AGREEMENT AND TO THE RESTRICTIONS CONTAINED THEREIN, INCLUDING RESTRICTIONS UPON TRANSFER. A COPY OF THE AGREEMENT WILL BE FURNISHED TO ANY INTERESTED PARTY UPON WRITTEN REQUEST, WITHOUT CHARGE. |
(c) Any notice, demand or request required or permitted to be given pursuant to the terms of this Agreement shall be in writing and shall be deemed given when delivered personally or deposited in the U.S. mail, first class, certified or registered, return receipt requested, with postage prepaid, and addressed to the parties at the addresses of the parties set forth at the end of this Agreement or such other address as a party may designate by notifying the other in writing.
(d) The rights and obligations of the Company and the Grantee hereunder shall be binding upon, inure to the benefit of and be enforceable against their respective successors and assigns, legal representatives and heirs. In addition, the rights and obligations of the Company under Section 2 of this Agreement shall be transferable to any one or more persons or entities as set forth therein.
(e) Either party’s failure to enforce any provision or provisions of this Agreement, except for the exercise by the Company or its assigns of the Repurchase Option, shall not in any way be construed as a waiver of any such provision or provisions, nor prevent the party thereafter from enforcing each and every other provision of this Agreement. The rights granted the parties herein are cumulative and shall not constitute a waiver of any party’s right to assert all other legal remedies available to it under the circumstances.
(f) The Company and the Grantee agree, upon request, to execute any further documents or instruments necessary or desirable to carry out the purposes or intent of this Agreement.
(g) THIS AGREEMENT DOES NOT IN ANY MANNER OBLIGATE THE COMPANY TO CONTINUE THE GRANTEE’S RELATIONSHIP WITH THE COMPANY.
(h) This Agreement expresses the entire understanding with respect to the subject matter hereof and supersedes and terminates any prior oral or written agreements with respect to the subject matter hereof.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have duly executed this Restricted Stock Issuance Agreement as of the day and year first set forth above.
COMPANY: | |||
Coronado Biosciences Inc. | |||
By: | /s/ Lucy Lu | ||
Lucy Lu, EVP and CFO | |||
GRANTEE: | |||
Michael S. Weiss |
/s/ Michael S. Weiss | (SEAL) | ||
Address: | 787 7th Avenue, 48th floor | ||
New York, NY 10019 |
EXHIBIT A
VESTING SCHEDULE
The shares referenced in the attached Agreement shall be subject to a vesting schedule whereby the shares shall be released from the Repurchase Option as follows. Vesting shall be conditioned upon the Grantee’s continued employment with, or service on the Board of Directors of, the Company, except as provided in Section 3 above.
The Shares shall vest, if at all, in three equal installments as follows:
(a) | one-third of the shares will vest when the Company achieves a fully-diluted market capitalization of $147,862,699 (being two times the market capitalization on the date of grant of the Shares) provided, however, that if the market capitalization threshold is met prior to December 19, 2016, vesting shall occur on December 19, 2016; |
(b) | one-third of the shares will vest when the Company achieves a fully-diluted market capitalization of $221,794,048 (being three times the market capitalization on the date of grant of the Shares) provided, however, that if the market capitalization threshold is met prior to December 19, 2017, vesting shall occur on December 19, 2017; and |
(c) | one-third of the shares will vest when the Company achieves a fully-diluted market capitalization of $295,725,398 (being four times the market capitalization on the date of grant of the Shares) provided, however, that if the market capitalization threshold is met prior to December 19, 2018, vesting shall occur on December 19, 2018. |
To the extent that the application of a specified percentage results in a fractional number of Shares, the number of Shares then released will be rounded down to the next whole number of Shares.
For purposes of this Agreement, “market capitalization” shall be determined by multiplying the total number of Shares outstanding (including Shares issuable upon conversion, exchange or exercise of any derivative security, including without limitation, options, warrants, convertible equity or debt or restricted equity) by the last reported closing price of the Stock on any Exchange or in the over-the-counter market (the “Market Price”).
The shares will accelerate and vest 100% and be fully released from the Repurchase Option immediately prior to any Change of Control. A “Change of Control” means (a) any transaction, or series of transactions, resulting in the Company’s stockholders prior to such transaction holding less than a majority of the voting securities of the Company or the resulting entity, (b) a sale, license or lease of all or substantially all of the Company’s assets, or (c) any change in the composition of the Board of Directors such that a majority of the Board of Directors as of the date of this Agreement (“Existing Directors”) (including members of the Board of Directors then in place that were appointed by a majority of the Existing Directors), fails to represent such majority of the Board of Directors.
EXHIBIT B
INVESTMENT REPRESENTATION STATEMENT
Grantee: | Michael S. Weiss |
Issuer: | Coronado Biosciences Inc. (the “Company”) |
Security: | Common Stock |
No. of Shares: | 1,979,346 |
In connection with the receipt of the above securities, the Grantee represents to the Company as follows.
1. Grantee is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the securities. Grantee is acquiring the securities for investment for Grantee’s own account only and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act of 1933, as amended (the “Securities Act”).
2. Grantee understands that the securities have not been registered under the Securities Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Grantee’s investment intent as expressed herein.
3. Grantee further understands that the securities must be held indefinitely unless subsequently registered under the Securities Act or unless an exemption from registration is available. Moreover, Grantee understands that the Company is under no obligation to register the securities. In addition, Grantee understands that the certificate evidencing the securities will be imprinted with a legend that prohibits the transfer of the securities unless they are registered or such registration is not required in the opinion of counsel for the Company.
Date: December 19, 2013 | GRANTEE: | |
/s/ Michael S. Weiss | ||
Michael S. Weiss |
Exhibit 10.58
Coronado Biosciences Inc.
RESTRICTED STOCK ISSUANCE AGREEMENT
This RESTRICTED STOCK ISSUANCE AGREEMENT (the “Agreement”) is made and entered into as of December 19, 2013, by and between Coronado Biosciences Inc., a Delaware corporation (the “Company”), and Lindsay A. Rosenwald, MD (the “Grantee”).
WHEREAS, in connection with Grantee’s service to the Company, the Company has agreed to issue One Million Nine Hundred Seventy-Nine Thousand Three Hundred Forty-Six (1,979,346) shares of Common Stock (the “Shares”).
NOW, THEREFORE, the parties agree as follows.
1. Issuance of Stock. The Company hereby agrees to issue to the Grantee the Shares, which for purposes of this Agreement have a fair market value equal to the closing price of $2.08 per share on December 18, 2013. All of the Shares received by the Grantee from the Company pursuant to this Agreement are subject to an option by the Company to repurchase such Shares.
2. Repurchase Option.
(a) The later of (i) voluntary termination of the Grantee’s employment with the Company, if Grantee is employed by the Company, and (ii) Grantee’s voluntary resignation from the Board of Directors of the Company, or refusal to stand for re-election, other than in both instances due to a disagreement with the Company (referred to as “a voluntary resignation”), shall be a “Triggering Event.”
(b) In the event that a Triggering Event occurs, the Company shall have an option (the “Repurchase Option”) for a period of 90 days following the Triggering Event to repurchase any of the Shares that are not vested under the vesting schedule set forth on Exhibit A hereto (“Unvested Shares”) at the price per share designated pursuant to paragraph (c) hereof. In the event the Company elects to exercise the Repurchase Option, it shall be exercised by the Company by written notice to the Grantee, which notice shall specify the number of Shares and the time (not later than 30 days from the date of the Company’s notice) and place for the closing of the repurchase of the Shares, which shall be reasonably convenient to the Grantee. Upon delivery of such notice and payment of the purchase price in accordance with the terms herewith, the Company shall become the legal and beneficial owner of the Shares being repurchased and all rights and interests therein or relating thereto, and the Company shall have the right to retain and transfer to its own name the number of Shares being repurchased by the Company.
(c) The purchase price for each Unvested Share repurchased pursuant to the Repurchase Option shall be $0.001 per share.
(d) Said purchase price shall be paid to the Grantee, at the Company’s option, (i) by delivery of a cashier’s check in the amount of the purchase price, (ii) by cancellation of any amount of the Grantee’s indebtedness to the Company equal to the purchase price for the shares being repurchased, or (iii) by a combination of (i) and (ii) so that the combined payment and cancellation of indebtedness equals such purchase price.
(e) Whenever the Company shall have the right to repurchase Shares hereunder, the Board of Directors may designate and assign to one or more assignees the right to exercise all or part of the Repurchase Option, provided that such assignees comply with the terms of this Agreement. In the event an assignee exercises all or part of the Repurchase Option, the purchase price shall be paid to the Grantee by delivery of a cashier’s check or in such other form acceptable to the Grantee.
3. Release of Shares From Repurchase Option/Accelerated Vesting. In the event the Repurchase Option is triggered pursuant to a Triggering Event and the Company (or its assigns) fails to exercise the Repurchase Option or timely complete the repurchase of any of the Shares, then, upon the expiration of the 90-day option exercise period, or the subsequent 30-day repurchase period, as the case may be, any and all such Shares not repurchased by the Company shall be immediately released from the Repurchase Option. In the event of any termination of Grantee’s employment with the Company or service on the Board of Directors of the Company, that does not constitute a Triggering Event, then all Shares shall be immediately released from the Repurchase Option. Upon the expiration or release of the Repurchase Option any unvested Shares shall immediately vest.
4. Restriction on Transfer. Except for a transfer to a “Related Party” (as defined below), none of the Unvested Shares or any beneficial interest therein shall be transferred, pledged, hypothecated, encumbered or otherwise disposed of in any way. For purposes of this Agreement, “Related Party” shall mean a spouse, lineal ancestor or descendant, natural or adopted, a spouse of a lineal ancestor or descendant, or a trust for the sole benefit of such persons or any of them.
All transferees of Shares or any interest therein (including Related Parties) will receive and hold such Shares or interest subject to the provisions of this Agreement, and shall agree in writing to take such Shares or interest therein subject to all the terms of this Agreement, including restrictions on further transfer. Any sale or transfer of the Company’s Shares shall be void unless the provisions of this Agreement are met.
5. Voting and Dividend Rights. Grantee, as beneficial owner of the Shares, shall have full voting and dividend rights with respect to the Shares during and after the vesting period. Dividends, if any, declared and paid on the Shares during the vesting period shall be accrued by the Company during the vesting period and paid to Grantee only if and when the related Shares vest and become non-forfeitable as provided in Sections 2 and 3 hereof. Any such accrued dividends shall be paid to Grantee no later than 30 days after the applicable vesting date. If any Unvested Shares are repurchased pursuant to the Repurchase Option, then, on the date of such repurchase, Grantee shall no longer have any rights as a stockholder with respect to such repurchased Shares or any interest therein, and Grantee shall not be entitled to receive any accrued dividends previously declared on such repurchased Shares.
6. Investment Intent; Legends on Certificates.
(a) Simultaneously with the execution hereof, the Grantee has executed and delivered to the Company a copy of the Investment Representation Statement in the form of Exhibit B hereto concerning the Grantee’s investment intent with respect to the Shares.
(b) The Grantee acknowledges that the certificates evidencing the Shares shall be endorsed with a legend, in addition to any other legends required by this Agreement or any other agreement to which the Shares are subject, substantially as follows.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD, MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS, OR THE AVAILABILITY OF EXEMPTIONS FROM SUCH REGISTRATION PROVISIONS. |
(c) The Grantee understands and agrees that neither the Company nor any agent of the Company shall be under any obligation to recognize and transfer any of the Shares if, in the opinion of counsel for the Company, such transfer would result in violation by the Company of any federal or state law with respect to the offering, issuance or sale of securities.
7. Adjustment for Stock Splits and the Like. All references to the number of Shares shall be appropriately adjusted to reflect any stock split, stock dividend or other change in the Shares that may be made by the Company after the date of this Agreement.
8. Tax Consequences.
(a) The Grantee has reviewed with the Grantee’s own tax advisors the federal, state, local and foreign (if applicable) tax consequences of this investment and the transactions contemplated by this Agreement. The Grantee is relying solely on such advisors and not on any statements or representations of the Company or any of its agents. The Grantee (and not the Company) shall be responsible for the Grantee’s own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement. The Grantee understands that Section 83 of the Internal Revenue Code of 1986, as amended (the “Code”), taxes as ordinary income the difference between the amount paid for the Shares and the fair market value of the Shares as of the date any restrictions on the Shares lapse. The Grantee understands that he may elect to be taxed at the time the Shares are purchased rather than when and as the Repurchase Option or 16(b) period expires by filing an election under Section 83(b) of the Code with the I.R.S. within 30 days from the date of purchase.
(b) THE GRANTEE ACKNOWLEDGES THAT IT IS THE GRANTEE’S SOLE RESPONSIBILITY AND NOT THE COMPANY’S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE GRANTEE REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE GRANTEE’S BEHALF.
(c) If the Grantee makes any tax election relating to the treatment of the Shares under the Code, at the time of such election the Grantee shall promptly notify the Company of such election.
9. General Provisions.
(a) This Agreement shall be construed and enforced in accordance with and governed by the laws of the State of New York. This Agreement represents the entire agreement between the parties with respect to the repurchase of the Shares by the Company and may be modified or amended only in a writing signed by all parties hereto.
(b) In addition to the legend set forth in paragraph 6 of this Agreement, the certificates representing the Shares shall be endorsed with the following legend.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A RESTRICTED STOCK ISSUANCE AGREEMENT AND TO THE RESTRICTIONS CONTAINED THEREIN, INCLUDING RESTRICTIONS UPON TRANSFER. A COPY OF THE AGREEMENT WILL BE FURNISHED TO ANY INTERESTED PARTY UPON WRITTEN REQUEST, WITHOUT CHARGE. |
(c) Any notice, demand or request required or permitted to be given pursuant to the terms of this Agreement shall be in writing and shall be deemed given when delivered personally or deposited in the U.S. mail, first class, certified or registered, return receipt requested, with postage prepaid, and addressed to the parties at the addresses of the parties set forth at the end of this Agreement or such other address as a party may designate by notifying the other in writing.
(d) The rights and obligations of the Company and the Grantee hereunder shall be binding upon, inure to the benefit of and be enforceable against their respective successors and assigns, legal representatives and heirs. In addition, the rights and obligations of the Company under Section 2 of this Agreement shall be transferable to any one or more persons or entities as set forth therein.
(e) Either party’s failure to enforce any provision or provisions of this Agreement, except for the exercise by the Company or its assigns of the Repurchase Option, shall not in any way be construed as a waiver of any such provision or provisions, nor prevent the party thereafter from enforcing each and every other provision of this Agreement. The rights granted the parties herein are cumulative and shall not constitute a waiver of any party’s right to assert all other legal remedies available to it under the circumstances.
(f) The Company and the Grantee agree, upon request, to execute any further documents or instruments necessary or desirable to carry out the purposes or intent of this Agreement.
(g) THIS AGREEMENT DOES NOT IN ANY MANNER OBLIGATE THE COMPANY TO CONTINUE THE GRANTEE’S RELATIONSHIP WITH THE COMPANY.
(h) This Agreement expresses the entire understanding with respect to the subject matter hereof and supersedes and terminates any prior oral or written agreements with respect to the subject matter hereof.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have duly executed this Restricted Stock Issuance Agreement as of the day and year first set forth above.
COMPANY: | ||
Coronado Biosciences Inc. | ||
By: | /s/ Lucy Lu | |
Lucy Lu, EVP and CFO |
GRANTEE: | |
Lindsay A. Rosenwald, MD |
/s/ Lindsay A. Rosenwald | (SEAL) | ||
Address: | 787 7th Avenue, 48th floor | ||
New York, NY 10019 |
EXHIBIT A
VESTING SCHEDULE
The shares referenced in the attached Agreement shall be subject to a vesting schedule whereby the shares shall be released from the Repurchase Option as follows. Vesting shall be conditioned upon the Grantee’s continued employment with, or service on the Board of Directors of, the Company, except as provided in Section 3 above.
The Shares shall vest, if at all, in three equal installments as follows:
(a) | one-third of the shares will vest when the Company achieves a fully-diluted market capitalization of $147,862,699 (being two times the market capitalization on the date of grant of the Shares) provided, however, that if the market capitalization threshold is met prior to December 19, 2016, vesting shall occur on December 19, 2016; |
(b) | one-third of the shares will vest when the Company achieves a fully-diluted market capitalization of $221,794,048 (being three times the market capitalization on the date of grant of the Shares) provided, however, that if the market capitalization threshold is met prior to December 19, 2017, vesting shall occur on December 19, 2017; and |
(c) | one-third of the shares will vest when the Company achieves a fully-diluted market capitalization of $295,725,398 (being four times the market capitalization on the date of grant of the Shares) provided, however, that if the market capitalization threshold is met prior to December 19, 2018, vesting shall occur on December 19, 2018. |
To the extent that the application of a specified percentage results in a fractional number of Shares, the number of Shares then released will be rounded down to the next whole number of Shares.
For purposes of this Agreement, “market capitalization” shall be determined by multiplying the total number of Shares outstanding (including Shares issuable upon conversion, exchange or exercise of any derivative security, including without limitation, options, warrants, convertible equity or debt or restricted equity) by the last reported closing price of the Stock on any Exchange or in the over-the-counter market (the “Market Price”).
The shares will accelerate and vest 100% and be fully released from the Repurchase Option immediately prior to any Change of Control. A “Change of Control” means (a) any transaction, or series of transactions, resulting in the Company’s stockholders prior to such transaction holding less than a majority of the voting securities of the Company or the resulting entity, (b) a sale, license or lease of all or substantially all of the Company’s assets, or (c) any change in the composition of the Board of Directors such that a majority of the Board of Directors as of the date of this Agreement (“Existing Directors”) (including members of the Board of Directors then in place that were appointed by a majority of the Existing Directors), fails to represent such majority of the Board of Directors.
EXHIBIT B
INVESTMENT REPRESENTATION STATEMENT
Grantee: | Lindsay A. Rosenwald, MD |
Issuer: | Coronado Biosciences Inc. (the “Company”) |
Security: | Common Stock |
No. of Shares: | 1,979,346 |
In connection with the receipt of the above securities, the Grantee represents to the Company as follows.
1. Grantee is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the securities. Grantee is acquiring the securities for investment for Grantee’s own account only and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act of 1933, as amended (the “Securities Act”).
2. Grantee understands that the securities have not been registered under the Securities Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Grantee’s investment intent as expressed herein.
3. Grantee further understands that the securities must be held indefinitely unless subsequently registered under the Securities Act or unless an exemption from registration is available. Moreover, Grantee understands that the Company is under no obligation to register the securities. In addition, Grantee understands that the certificate evidencing the securities will be imprinted with a legend that prohibits the transfer of the securities unless they are registered or such registration is not required in the opinion of counsel for the Company.
Date: December 19, 2013 | GRANTEE: |
/s/ Lindsay A. Rosenwald | |
Lindsay A. Rosenwald, MD |
Exhibit 10.59
CONFIDENTIAL SEPARATION AND RELEASE AGREEMENT
This CONFIDENTIAL SEPARATION AND RELEASE AGREEMENT (the “Agreement”) is hereby made and entered into this 22nd day of December, 2013, by and between CORONADO BIOSCIENCES, INC. (the “Company” or “Coronado”) and HARLAN F. WEISMAN, MD (“Dr. Weisman”) (the Company and Dr. Weisman, together, the “Parties”).
1. Termination. Dr. Weisman’s employment with the Company and service as a director will terminate effective December 19, 2013 (the “Termination Date”). Dr. Weisman will be paid his salary through the Termination Date and for any accrued, unused vacation days. Except as set out in this Agreement, or any agreements or plans incorporated herein by reference, or as provided by the specific terms of a benefit plan or as required by law, all employee benefits will end on the Termination Date. Except as set forth in this Agreement, Dr. Weisman hereby acknowledges that he has been paid all compensation due and owing to him through the Termination Date for labor and services performed for the Company’s benefit. Dr. Weisman also hereby represents that he has returned or will return to the Company all Company-owned equipment, computers, smart phones, keys or passes, software, files, discs, materials, programs, documents (including any copies), as well as all backup tapes that are stored offsite. As to the treatment of funds already paid into the employee stock purchase plan and roll-over of Dr. Weisman’s 401-k plan, each will be handled in accordance with the Company’s normal, historical practices or as otherwise required by the Employment Agreement between Dr. Weisman and the Company dated January 7, 2013, and all such amendments thereto (the “Employment Agreement”). The Company agrees that Dr. Weisman shall be reimbursed for all reasonable business expenses incurred through the Termination Date. Finally, Dr. Weisman agrees that as of the Termination Date, he no longer holds a position within the Company and/or its subsidiaries, including any signature authority or power of attorney with respect to the Company, its subsidiaries and officers and directors.
2. Severance Benefits. If Dr. Weisman executes and does not revoke this Agreement as provided for in Section 21, below, the Company will provide him with the following payments and benefits collectively referred to in this Agreement as the “Severance Benefits”:
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a. Severance Pay. Pursuant to the Employment Agreement, the Company will pay Dr. Weisman a severance payment equivalent to twelve (12) months of his regular base salary. For purposes of this Agreement, the payment of Dr. Weisman’s base salary after the Termination Date is referred to as the “Severance Pay,” and the period during which he is receiving the Severance Pay is referred to as the “Severance Period.” The Severance Pay will be paid less applicable federal, state and local payroll taxes, and other withholdings required by law or authorized by Dr. Weisman. Dr. Weisman will receive the Severance Pay in accordance with the Company’s payroll procedures beginning on the sixtieth (60th) day following the Termination Date, as provided for in this Section 2(a). Each payment of the Severance Pay shall be treated as a separate payment for purposes of Section 409A of the Internal Revenue Code (the “Code”) and the guidance issued thereafter. Because the Company has determined that Dr. Weisman is a “specified employee” within the meaning of Section 409A of the Code, the timing of installments of the Severance Pay that are not exempt from Section 409A of the Code will be delayed until the earlier to occur of: (i) the date that is six months and one day after the Termination Date; or (ii) the date of Dr. Weisman’s death (such applicable date, the “Specified Employee Initial Payment Date”). On the Specified Employee Initial Payment Date, the Company will pay to Dr. Weisman a lump sum amount equal to the sum of the suspended installments of Severance Pay that Dr. Weisman would otherwise have received through the Specified Employee Initial Payment Date if payment of the Severance Pay had not been so delayed and will commence payment of the balance of the Severance Pay on the Company’s regular paydays in accordance with its payroll practices thereafter. For purposes of clarification, the “Severance Period” as referred to herein shall include the entire period between the Termination Date and the date on which Dr. Weisman receives the final installment of the Severance Pay, notwithstanding the delay of separate payments provided for herein.
b. Stock Options. On August 16, 2012, the Company granted Dr. Weisman an option to purchase 25,000 shares of Common Stock (the “Original Option”) under its 2007 Stock Incentive Plan, as amended (the “Plan”). As of August 16, 2013, one-third of the Original Option had vested and was exercisable for 8,333 shares. On January 7, 2013, the Company granted Dr. Weisman an additional option to purchase 1,686,590 shares of Common Stock (the “Additional Option,” and together with the Original Option, the “Options”) under its Plan. As of December 19, 2013, none of the Additional Option had vested. Pursuant to the Employment Agreement, an additional one-third of the Original Option and one-third of the Additional Option shall be accelerated and become fully exercisable for a total of 570,530 additional shares, on the Effective Date of this Agreement (as defined in Section 21 below). Notwithstanding anything to the contrary in the Plan, the Employment Agreement, or in Dr. Weisman’s stock option agreements relating to the Options, the exercise period for all of Dr. Weisman’s vested Options will be extended until December 19, 2015, two (2) years from the Termination Date, after which time the Options shall terminate. Except as provided above, Dr. Weisman’s Options continue to be governed by the terms of the Plan and Dr. Weisman’s stock option agreements.
c. Bonus Payment. Pursuant to the Employment Agreement, the Company will pay Dr. Weisman an Annual Milestone Bonus in the amount of Three Hundred Thousand Dollars ($300,000.00), less applicable federal, state and local payroll taxes, and other withholdings required by law or authorized by Dr. Weisman, for calendar year 2013 (the “Annual Milestone Bonus”). The Annual Milestone Bonus will be paid in a single lump-sum payment no later than March 15, 2014.
d. New York Residence. For the twelve (12) month period following the month in which the Termination Date occurs, the Company will pay Dr. Weisman the amount of Three Thousand Four Hundred Fifty Dollars ($3,450.00) per month, less applicable federal, state and local payroll taxes, and other withholdings required by law or authorized by Dr. Weisman, representing fifty percent (50%) of the monthly cost to Dr. Weisman of maintaining his New York apartment.
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e. Health Insurance Continuation. As additional consideration for Dr. Weisman’s execution of this Agreement, the Company will reimburse Dr. Weisman for the cost of his health continuation coverage premium under the Consolidated Omnibus Budget Reconciliation Act and/or applicable state continuation coverage law (collectively “COBRA”) on a monthly basis at the same rate paid by the Company for his health insurance premium during the final month of his employment with the Company for the lesser of: (i) the twelve (12) month period following the month in which the Termination Date occurs, or (ii) the maximum period permitted by applicable law. Dr. Weisman may thereafter have the right to continue his health insurance coverage under COBRA entirely at his own expense for the remaining part of the legally-required continuation period, if any. The Company’s obligation to pay a portion of Dr. Weisman’s health continuation coverage premiums will terminate if he becomes eligible for substantially equivalent health benefits from another employer during the reimbursement period, regardless of whether he elects such coverage.
If Dr. Weisman does not sign this Agreement and return it to the Company within twenty-one (21) days of the date it was provided to Dr. Weisman, or if Dr. Weisman revokes this Agreement pursuant to Section 21, Dr. Weisman will not be entitled to receive the Severance Benefits described above. Dr. Weisman hereby acknowledges and agrees that but for his execution of this Agreement, he would not be entitled to receive the Severance Benefits as set out herein.
3. Payment in Full. Dr. Weisman agrees and acknowledges that the Severance Benefits outlined in Section 2 above exceed the payments he would otherwise be entitled to receive and are specific and sufficient consideration for the releases and covenants contained in this Agreement. Dr. Weisman further represents and affirms that, except as set forth in this Agreement, he has been paid and/or received all leave (paid or unpaid), compensation, wages, bonuses, commissions, and/or benefits to which he may be entitled for any and all work performed for the benefit of the Company, including but not limited to his work as an employee and that no other leave (paid or unpaid), compensation, wages, bonuses, commissions and/or benefits are due, except as provided for in this Agreement.
4. Release of Claims. In consideration for the promises set forth in this Agreement, Dr. Weisman, for himself and for his spouse, family, heirs, and anyone acting for him, including representatives, attorneys, executors, administrators, successors, insurers, and assigns, hereby releases, acquits, and forever discharges the Company, its past, present and future directors, officers, partners, representatives, shareholders, employees, agents, attorneys, parents, subsidiaries, affiliates, successors, predecessors and assigns, (the “Company Releasees”) or any of them, from any and all actions, causes of action, grievances, obligations, costs, expenses, damages, punitive damages, losses, claims, liabilities, suits, debts, demands, agreements, orders, benefits (including attorneys’ fees and costs actually incurred), or liabilities of whatever character, in law or in equity, known or unknown, suspected or unsuspected, matured or unmatured, asserted or not asserted, based on any act, omission, event, occurrence, or non-occurrence from the beginning of time through the Effective Date of this Agreement, including but not limited to any claims or causes of action arising out of or in any way relating to Dr. Weisman’s employment, the termination of his employment with the Company, and/or any other occurrence arising before the Effective Date of this Agreement.
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This waiver and release includes, but is not limited to, claims that the Company and/or any of the Company Releasees:
a. have violated or breached any personnel policies, handbooks, contracts of employment, the Employment Agreement, severance pay agreements or covenants of good faith and fair dealing;
b. have discriminated against Dr. Weisman on the basis of age, race, color, sex, national origin, ancestry, disability, religion, harassment, marital status, parental status, handicap, genetic information, source of income, retaliation, veteran status or entitlement to benefits, in violation of any local, state or federal law, ordinance or regulation, including, but not limited to: Title VII of the Civil Rights Act of 1964; 42 U.S.C. § 1981; the Civil Rights Act of 1866, 1964, and 1991; the Age Discrimination in Employment Act as amended by the Older Workers’ Benefit Protection Act; the Americans With Disabilities Act of 1990; the Rehabilitation Act of 1973; the Worker Adjustment Retraining and Notification Act; the National Labor Relations Act; the Occupational Safety and Health Act of 1970; the Equal Pay Act of 1963; the Genetic Information Nondiscrimination Act of 2008; the Sarbanes-Oxley Act; the Pennsylvania Human Relations Act, 43 P.S. §§ 951 et seq.; Pennsylvania’s Whistleblower Law, 43 P.S. §§ 1421 et seq.; the New York State Human Rights Law; the New York Civil Rights Law; the New York City Human Rights Law; the New York Law on Equal Rights; the New York Law on Equal Pay; the New York Nondiscrimination for Legal Actions Law; the New York Retaliatory Action by Employers Law; the Massachusetts Fair Employment Practices Act, c. 151B of the Massachusetts General Laws; the Massachusetts Civil Rights Act, M.G.L. c. 12, §§ 11H and 11I; the Massachusetts Equal Rights Act, M.G.L. c. 93, § 102 and M.G.L. c. 214, § 1C; the Massachusetts Labor and Industries Act, M.G.L. c. 149, § 1 et seq.; the Massachusetts Privacy Act, M.G.L. c.214, §1B; and/or the Massachusetts Maternity Leave Act, M.G.L. c. 149, §105(d) (all as amended);
c. have violated public policy or common law, including claims under state and federal law for retaliatory discharge, negligent hiring or supervision, breach of contract, wrongful termination, tort, personal injury, invasion of privacy, defamation, intentional or negligent infliction of emotional distress and/or mental anguish, intentional interference with contract, negligence, detrimental reliance, loss of consortium to Dr. Weisman or to any member of his family, and/or promissory estoppel;
d. have failed to pay wages or otherwise violated any law governing the payment of wages or protection of workers seeking payment for work performed, including, but not limited to laws governing the payment of wages in Pennsylvania, Massachusetts and New York state, including the Pennsylvania Equal Pay Law, P.L. 1913, No. 694, the Pennsylvania Wage Payment and Collection Act, P.L. 637, No. 329, New York Wage-Hour Law, the New York Wage Payment Law, the New York Wage Theft Prevention Act, the Massachusetts Payment of Wage Act, M.G.L. c. 149, § 148, and other laws in the Commonwealth governing the payment of wages including but not limited to Massachusetts’s “Blue Laws,” and any other federal, state or local statutory and/or common laws; and/or
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e. have violated any other federal, state or local law, ordinance or regulation, including, but not limited to the Employee Retirement Income Security Act of 1974 (ERISA), the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), the Massachusetts Small Group Continuation of Coverage Law, Pennsylvania’s Act 2 of 2009, N.Y. Ins. Law § 3221(m), and/or the Family and Medical Leave Act (FMLA).
Excluded from this release are the following rights and claims, referred to collectively as the “Excluded Claims”: (i) any claims which cannot be waived by law, including but not limited to the right to file a charge with or participate in an investigation conducted by the Massachusetts Commission Against Discrimination, the U.S. Equal Employment Opportunity Commission or any other governmental agency charged with investigating complaints, whether based in employment discrimination, violations of laws governing the payment of wages, or otherwise (collectively, “Governmental Agencies”), provided that Dr. Weisman is waiving, however, his right to any monetary compensation, or other relief should Governmental Agencies pursue any claims on his behalf; (ii) if applicable, Dr. Weisman’s right to indemnification by the Company as an officer or director to the fullest extent permitted by applicable law and/or the Company’s governing documents; (iii) if applicable, Dr. Weisman’s right to coverage and to make a claim under the director and officer insurance policy of the Company; (iv) any claims related to Dr. Weisman’s vested benefits under any Company qualified benefit plan(s); and/or (v) claims for a breach of this Agreement.
Dr. Weisman expressly agrees and understands that this release and waiver of claims is a GENERAL RELEASE, and that any reference to specific claims arising out of or in connection with his employment is not intended to limit the release and waiver of claims. Dr. Weisman, his heirs, executors, beneficiaries, legal representatives and assigns, and individually and/or in their beneficial capacity, further agree never to institute against the Company or any of the Company Releasees any lawsuit with respect to any claim or cause of action of any type which may have existed at any time prior to the date of the execution of this Agreement.
5. No Filings/Covenant Not To Sue. Dr. Weisman represents that he has not filed any action, claim, charge, or complaint against the Company, or any of the Company Releasees, with any agency, court, governmental entity and/or Governmental Agencies. Dr. Weisman further represents that he has not communicated or otherwise initiated contact with a governmental body, agency or entity and/or Governmental Agencies for the purpose of discussing, in any capacity, issues, concerns, behaviors, patterns, practices or actual or perceived violations of any federal, state or local law, including but not limited to the federal False Claims Act, the Securities and Exchange Commission’s Dodd-Frank Act Whistleblower Program, the Stark law or any similar type of qui tam statute or program and has no basis to communicate or otherwise initiate such contact based upon his knowledge of and/or work or service performed for the Company.
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Dr. Weisman agrees as part of the material consideration for the Company’s payment of the Severance Benefits that he will not institute, maintain, prosecute, induce, or counsel or assist any person or entity in the instigation, commencement, maintenance, presentation, or prosecution of, any lawsuit, action, complaint, claim, or administrative or legal proceeding against the Company or any of the other Company Releasees, or in any way voluntarily participate or cooperate in any such actions or proceedings; provided that, nothing in this Agreement or in this Section 5 prohibits Dr. Weisman from instituting, maintaining or participating in any lawsuit, action or proceeding with respect to any Excluded Claims. This prohibition applies to every stage of any action, lawsuit, or proceeding, including, but not limited to, any pre-litigation investigation or fact gathering, pre-trial or pre-hearing investigation or preparation, hearing, arbitration proceedings, or trial, and bars Dr. Weisman from voluntarily testifying, providing documents or information, advising, counseling, or providing any other form of voluntary assistance to any person or entity who wishes to make or who is making any claim against Company or any of the other Company Releasees. Nothing in this Section shall prohibit Dr. Weisman from complying with a properly-served and lawfully issued subpoena or order issued by a court of competent jurisdiction that may elicit truthful information or documentation regarding Company or any of the Company Releasees. However, should Dr. Weisman receive any such subpoena or order, within two (2) business days following his receipt of same, he shall provide a copy of the subpoena or court order to Company’s Chief Executive Officer, by overnight mail, hand delivery, or facsimile, in order to provide Company with notice of the subpoena or order, including: (1) the case name, jurisdiction and index, docket, or other identification number or designation of the action or proceeding within which the subpoena or order has been issued; (2) the date upon which compliance with the subpoena or order is due; and (3) the location at which compliance with the subpoena or order has been requested. If approached by anyone for counsel or assistance in the presentation, maintenance, or prosecution of any lawsuit, action, complaint, claim, or administrative or legal proceeding against Company or any of the other Company Releasees, Dr. Weisman shall state no more than that he cannot provide counsel or assistance.
6. Tax Liability and Indemnification. Dr. Weisman acknowledges that he has not relied on any statements or representations by the Company or its attorneys with respect to the tax treatment of the Severance Benefits. In the event of an inquiry by any governmental or taxing authority, no Party or Party representative shall assert any position contrary to the terms of this Agreement.
7. Restrictive Covenants. Dr. Weisman acknowledges and agrees that pursuant to the Employment Agreement, he is and remains bound by certain restrictive covenants set forth in Section 9 of the Employment Agreement (the “Restrictive Covenants”) during the Severance Period and for the Restricted Period (as defined in the Employment Agreement). The Restrictive Covenants in Section 9 of the Employment Agreement include an agreement not to compete against the Company and an agreement not to solicit the Company’s employees and clients. Dr. Weisman acknowledges that the Restrictive Covenants survive the termination of his employment and the termination of his service pursuant to the Employment Agreement. The Parties agree that the Restrictive Covenants are incorporated by reference as if fully set forth herein and a breach of those provisions will also constitute a breach of this present Agreement.
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8. Post-Employment Cooperation and Notification of Employment. Dr. Weisman agrees to fully cooperate with the Company in all matters relating to the winding up of his work, including but not limited to, any current or future litigation in which the Company is or becomes involved. In the event Dr. Weisman’s assistance is needed after the Severance Period, the Company agrees to compensate Dr. Weisman at an hourly rate of $500 for all time spent providing such assistance. Dr. Weisman also agrees that he will provide the Company with no fewer than five (5) business days’ notice of his intent to accept employment or engagement as a consultant or independent contractor by or for a person or entity other than the Company during the Severance Period in order for the Company to determine, in its reasonable and good faith discretion, if such new employer is a competitor of the Company and/or if there is a reasonable risk that such new employment or engagement may violate the provisions of the Restrictive Covenants. This notice of intent to accept employment will identify the new employer, list Dr. Weisman’s anticipated title and describe his anticipated duties, and shall be directed to the attention of the Company’s Chief Executive Officer.
9. No Admissions/No Representations. Dr. Weisman understands, acknowledges and agrees that the release set out in Section 4 of this Agreement is a final compromise of any potential claims by Dr. Weisman against the Company and the Company Releases. Dr. Weisman further understands, acknowledges and agrees that the release set out in Section 4 of this Agreement in connection with his employment by and service to the Company is not an admission by the Company or the Company Releases that any such claims exist or that the Company or any of the Company Releases are liable for any such claims. The Parties each individually and independently acknowledge that, except as expressly set forth herein, no representation of any kind or character has been made to induce the execution of this Agreement. The Parties individually warrant for themselves that each is competent to execute this Agreement and accepts full responsibility therefore. The Parties further agree that this Agreement shall be deemed to have been prepared by the Parties jointly, and no ambiguity shall be resolved against any Party on the premise that it was responsible for drafting this Agreement, in whole or in part.
10. Confidentiality. Dr. Weisman hereby agrees and acknowledges that, except as otherwise expressly provided for herein, his post-employment obligations to the Company pursuant to the Employment Agreement and the Proprietary Information and Inventions Agreement (the “Confidentiality Agreements”) signed in connection with his employment with the Company remain in full force and effect, notwithstanding the termination of his employment and service thereunder. Dr. Weisman agrees to carefully guard the Company’s confidential and proprietary information that Dr. Weisman learned or had access to during Dr. Weisman’s work for and on behalf of the Company.
11. Mutual Non-Disparagement. Dr. Weisman agrees not to publicly or privately criticize, denigrate, or disparage or make any statements or remarks that have the intended or foreseeable effect of harming the reputation of the Company and/or any of its present and former directors, officers, partners, representatives, shareholders, employees, agents, attorneys, insurers, parents, subsidiaries, affiliates, successors, predecessors and assigns through any means of communication, including, but not limited to, print or broadcast media or any Internet communication outlet. The Company will instruct its officers and directors not to denigrate, defame, or disparage Dr. Weisman, his services, business and manner of doing business. Upon inquiry from any third party, the Company will only release Dr. Weisman’s dates of employment and positions held, unless Dr. Weisman provides written authorization and a release for the Company to provide additional information. Dr. Weisman will be permitted the opportunity to provide input regarding the press release announcing the termination of his employment.
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12. Relief and Enforcement. Dr. Weisman understands and agrees that any material breach of this Agreement by him will relieve the Company of its obligation to provide the Severance Benefits as set out in Section 2, above. Dr. Weisman also understands and agrees that if he violates the terms of Sections 1, 5, 7, 8, 10 or 11 of this Agreement, he will cause injury to the Company (and/or one or more of the Company Releasees) that will be difficult to quantify or repair, so that the Company (and/or the Company Releasees) will have no adequate remedy at law. Accordingly, Dr. Weisman agrees that if he violates Sections 1, 5, 7, 8, 10 or 11 of this Agreement, the Company (or the Company Releasees) will be entitled as a matter of right to obtain an injunction from a court of law, restraining him from any further violation of this Agreement. The right to an injunction is in addition to and not in lieu of any other remedies that the Company (or the Company Releasees) has at law or in equity. In any action to enforce the terms of this Agreement, the prevailing party shall be entitled to recover its reasonable attorneys’ fees. In order to be a “prevailing party” the Party who institutes any legal action must succeed on substantially all of the claims brought as part of such action; otherwise, the Party defending such action shall be the prevailing party.
13. No Re-employment. Dr. Weisman hereby covenants and agrees that he will not knowingly seek or accept employment with the Company or any of its affiliates, parents, subsidiaries, successors, predecessors and assigns. Dr. Weisman further agrees that the execution of this Agreement is good and sufficient cause for the Company and its affiliates, parents, subsidiaries, successors, predecessors and assigns to reject any application by Dr. Weisman for employment.
14. Voluntary Execution. By signing below, Dr. Weisman acknowledges that he has read the foregoing Agreement, that he understands its contents and that he has relied upon or had the opportunity to seek the legal advice of his attorney, who is the attorney of his own choosing.
15. Reservation of Rights/Waiver. Both Parties reserve the right to sue for breach of contract in the event that there is a breach of the covenants and/or obligations set forth herein. The failure of either Party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver thereof or deprive that Party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.
16. Choice of Law. This Agreement shall be governed by and interpreted under the laws of the Commonwealth of Massachusetts without regard for any conflict of law principle that would dictate the application of the laws of another jurisdiction.
17. Entire Agreement/Severability. This Agreement (inclusive of the Confidentiality Agreements) contains the entire, final expression of the agreement and understanding by and between the Parties with respect to the matters herein referred to, and it is a complete and exclusive statement of the terms thereof. This Agreement shall supersede all prior understandings, oral and written, hereto before had between the Parties. No amendments, representations, promises, agreements, or understandings, written or oral, not herein contained shall be valid or binding unless the same is in writing and signed by both Parties. Should any provision of this Agreement be declared or be determined by any agency or court to be illegal or invalid, the validity of the remaining parts, terms or provisions shall not be affected thereby and said illegal or invalid part, term or provision shall be deemed not a part of this Agreement.
Page 8 of 10 Confidential Separation and Release Agreement: H. Weisman and Coronado Biosciences, Inc. |
18 Binding Nature of Agreement. This Agreement shall inure to the benefit of and shall be binding upon Dr. Weisman, his heirs, administrators, representatives, executors, successors and assigns and upon the successors and assigns of the Company.
19. Headings. The headings of the sections of this Agreement are for convenience only and are not binding on any interpretation of this Agreement.
20. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
21. Review and Effective Date.
a. Agreement is Knowing and Voluntary. Dr. Weisman understands, agrees and acknowledges that he:
1. has carefully read and/or had read to him and fully understands all of the provisions of this Agreement;
2. knowingly and voluntarily agrees to all of the terms set forth in this Agreement;
3. knowingly and voluntarily intends to be legally bound by the same; and
4. was advised, and hereby is advised in writing, to consider the terms of this Agreement and consult with an attorney of Dr. Weisman’s choice prior to executing this Agreement.
b. 21-Day Consideration Period. Dr. Weisman acknowledges that the Company has offered him twenty-one (21) days to consider the terms and conditions of this Agreement and to decide whether to sign and enter into this Agreement. In the event that Dr. Weisman elects to sign this Agreement prior to the expiration of the twenty-one (21) day period, he acknowledges that in doing so, he will voluntarily waive the balance of the twenty-one (21) days permitted. Dr. Weisman understands and agrees that any change to the initially drafted terms of this Agreement are not material and will not restart the running of this twenty-one (21) day period.
c. 7-Day Revocation Period. Dr. Weisman has seven (7) days after his execution of this Agreement to revoke his acceptance of it (the “Revocation Period”). Any such revocation must be made in writing to be received by Robyn Hunter at the Company’s Burlington, Massachusetts office by the close of business on the seventh (7th) day following Dr. Weisman’s signature to be effective. The Parties acknowledge and agree that this Agreement is neither effective nor enforceable and neither Party is obligated to perform the promises contained herein in the event that the Agreement is revoked or until expiration of the seven (7) day revocation period, the “Effective Date” of this Agreement.
[Remainder of page left intentionally blank; signature page immediately follows.]
Page 9 of 10 Confidential Separation and Release Agreement: H. Weisman and Coronado Biosciences, Inc. |
THE PARTIES EACH ACKNOWLEDGE FOR THEMSELVES THAT THEY EACH HAVE CAREFULLY READ THE FOREGOING CONFIDENTIAL SEPARATION AND RELEASE AGREEMENT, AND FULLY UNDERSTAND EACH OF ITS TERMS. THE PARTIES FURTHER ACKNOWLEDGE FOR THEMSELVES THAT EACH HAS FULL KNOWLEDGE AND UNDERSTANDING OF THE AGREEMENT’S LEGAL CONSEQUENCES AND EACH INTENDS TO BE BOUND BY SAME.
Dated: | 20 December 2013 | /s/ Harlan F. Weisman, MD | |
HARLAN F. WEISMAN, MD | |||
Dated: | 12/22/13 | CORONADO BIOSCIENCES, INC. | |
/s/ Lindsay Rosenwald | |||
By: Lindsay Rosenwald | |||
Title: Chairman/CEO |
Page 10 of 10 Confidential Separation and Release Agreement: H. Weisman and Coronado Biosciences, Inc. |
Exhibit 21.1
SUBSIDIARIES OF CORONADO BIOSCIENCES, INC.
1. | Innmune Limited |
2. | TSO Development Corporation, Inc. |
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (No. 333-184616) and Form S-3 (Nos. 333-17704, 333-183943 and 333-189935) of Coronado Biosciences, Inc. of our report dated March 14, 2014 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
March 14, 2014
Exhibit 31.1
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Lindsay A. Rosenwald, M.D. certify that:
(1) I have reviewed this Annual Report on Form 10-K for the year ended December 31, 2013 of Coronado Biosciences, Inc. (the registrant);
(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects, the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
(4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) disclosed in the report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
(5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Dated: March 14, 2014 | By: |
/s/ Lindsay A. Rosenwald, M.D. |
||
Lindsay A. Rosenwald, M.D. | ||||
Chairman, President and Chief Executive Officer |
Exhibit 31.2
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Lucy Lu, certify that:
(1) I have reviewed this Annual Report on Form 10-K for the year ended December 31, 2013 of Coronado Biosciences, Inc. (the registrant);
(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects, the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
(4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) disclosed in the report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
(5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Dated: March 14, 2014 | By: |
/s/ Lucy Lu |
||
Lucy Lu | ||||
Chief Financial Officer |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S. C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report on Form 10-K of Coronado Biosciences, Inc. (the “Company”) for the period ended December 31, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Lindsay A. Rosenwald, M.D., Chairman, President and Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in the Report.
Dated: March 14, 2014 | By: |
/s/ Lindsay A. Rosenwald, M.D. |
||
Lindsay A. Rosenwald, M.D. | ||||
Chairman, President and Chief Executive Officer |
Exhibit 32.2
CERTIFICATION PURSUANT TO 18 U.S. C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report on Form 10-K of Coronado Biosciences, Inc. (the “Company”) for the period ended December 31, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Lucy Lu, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company, as of, and for, the periods presented in the Report.
Dated: March 14, 2014 | By: |
/s/ Lucy Lu |
||
Lucy Lu | ||||
Chief Financial Officer |
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Property and Equipment - Components of Property and Equipment (Detail) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | |
---|---|---|
Dec. 31, 2013
|
Dec. 31, 2012
|
|
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 467 | $ 54 |
Less: Accumulated depreciation | (20) | (3) |
Property and equipment, net | 447 | 51 |
Construction in Progress [Member]
|
||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 373 | 0 |
Useful Life (Years) | 0 years | |
Computer Equipment [Member]
|
||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 13 | 10 |
Useful Life (Years) | 3 years | |
Furniture and Fixtures [Member]
|
||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 69 | 38 |
Useful Life (Years) | 5 years | |
Leasehold Improvements [Member]
|
||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 12 | $ 6 |
Useful Life (Years) | 5 years |
Stock Plans and Stock-Based Compensation - Restricted Stock Activity (Detail) (Restricted Stock [Member], USD $)
|
12 Months Ended |
---|---|
Dec. 31, 2013
|
|
Restricted Stock [Member]
|
|
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Unvested balance at December 31, 2012 | 0 |
Restricted stock granted | 3,958,692 |
Restricted stock vested | 0 |
Restricted stock forfeited | 0 |
Unvested balance at December 31, 2013 | 3,958,692 |
Unvested balance at December 31, 2012 | $ 0 |
Restricted stock granted (Fair Value) | $ 1.93 |
Unvested balance at December 31, 2013 | $ 1.93 |
Debt- Additional Information (Detail) (USD $)
|
1 Months Ended | 12 Months Ended | 90 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 0 Months Ended | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Aug. 31, 2012
|
Sep. 30, 2010
|
Dec. 31, 2013
|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
Dec. 31, 2013
|
Aug. 16, 2012
|
Dec. 31, 2013
Series A [Member]
|
Dec. 31, 2012
Series A [Member]
|
Dec. 31, 2011
Series A [Member]
|
Dec. 31, 2010
Series A [Member]
|
Dec. 31, 2009
PCP Promissory Notes [Member]
|
Dec. 31, 2010
PCP Promissory Notes [Member]
|
Dec. 31, 2008
2008 Senior Convertible Notes [Member]
|
Dec. 31, 2009
2009 Senior Convertible Notes [Member]
|
Dec. 31, 2013
Senior Convertible Notes [Member]
|
Dec. 31, 2010
Senior Convertible Notes [Member]
Series A [Member]
|
Jan. 31, 2010
Related Party Notes [Member]
|
Sep. 30, 2008
Related Party Notes [Member]
|
Dec. 31, 2010
Related Party Notes [Member]
|
Dec. 31, 2013
Related Party Notes [Member]
|
Feb. 05, 2010
Related Party Notes [Member]
|
Jan. 31, 2010
Related Party Notes [Member]
Series A Common Stock [Member]
|
Dec. 31, 2010
Related Party Notes [Member]
Series A Common Stock [Member]
|
Dec. 31, 2009
Warrant [Member]
PCP Promissory Notes [Member]
|
Aug. 31, 2012
Hercules Debt Agreement [Member]
|
Dec. 31, 2013
Hercules Debt Agreement [Member]
|
Dec. 31, 2012
Hercules Debt Agreement [Member]
|
Aug. 31, 2012
Hercules Debt Agreement [Member]
Warrant [Member]
|
Jan. 07, 2011
Asphelia Asset Purchase [Member]
PCP Promissory Notes [Member]
|
|
Debt [Line Items] | |||||||||||||||||||||||||||||||
Term loan | $ 15,000,000 | ||||||||||||||||||||||||||||||
Received net proceeds | 570,000 | 14,700,000 | 750,000 | ||||||||||||||||||||||||||||
Subsequent private placement | 2,000,000 | ||||||||||||||||||||||||||||||
Warrant to purchase common stock | 20,000 | 27,175 | 73,009 | ||||||||||||||||||||||||||||
Warrant exercise price | 5.72 | 5.65 | |||||||||||||||||||||||||||||
Deduction rate on loan bears interest at a rate per annum | 3.25% | ||||||||||||||||||||||||||||||
Loan bears interest at a rate per annum | 10.00% | 8.00% | 8.00% | 8.00% | 9.25% | 10.00% | |||||||||||||||||||||||||
Interest rate | interest at a rate per annum equal to the greater of (i) 9.25% or (ii) 9.25% plus the sum of the prevailing prime rate minus 3.25% | ||||||||||||||||||||||||||||||
Maturity Date | Mar. 01, 2016 | ||||||||||||||||||||||||||||||
Interest payment term | interest-only payments for the initial 12 months and thereafter requires repayment of the principal balance with interest in 30 monthly installments. | ||||||||||||||||||||||||||||||
Charges on termination of the loan stated percentage | 2.65% | ||||||||||||||||||||||||||||||
Fair value of the warrant volatility | 104.51% | 87.20% | |||||||||||||||||||||||||||||
Fair value of risk-free interest rate | 1.06% | 1.10% | |||||||||||||||||||||||||||||
Approximate fair value of the warrant | 323,000 | ||||||||||||||||||||||||||||||
Charges on termination of the loan, amount | 398,000 | ||||||||||||||||||||||||||||||
Fees related to the loan agreement | 800,000 | 218,000 | |||||||||||||||||||||||||||||
Debt Discount | 700,000 | 939,000 | |||||||||||||||||||||||||||||
Interest rate for amortize loan discounts | 12.30% | ||||||||||||||||||||||||||||||
Interest expenses accretion of debt discounts | 381,000 | 123,000 | |||||||||||||||||||||||||||||
Interest expense related to the Hercules loan | 1,923,000 | 670,000 | 74,000 | 5,876,000 | 1,767,000 | 609,000 | |||||||||||||||||||||||||
Current portion of note payable | 6,203,000 | 1,799,000 | 6,203,000 | 6,203,000 | |||||||||||||||||||||||||||
Non current portion of notes payable | 7,017,000 | 12,386,000 | 7,017,000 | 7,017,000 | |||||||||||||||||||||||||||
Debt discount recorded | 100,000 | 434,000 | |||||||||||||||||||||||||||||
2014 | 6,203,000 | 6,203,000 | |||||||||||||||||||||||||||||
2015 | 6,866,000 | 6,866,000 | |||||||||||||||||||||||||||||
2016 | 587,000 | 587,000 | |||||||||||||||||||||||||||||
Common stock conversion price equal to lowest price paid by investors | 100.00% | 75.00% | |||||||||||||||||||||||||||||
Qualified equity financing amount | 10,000,000 | ||||||||||||||||||||||||||||||
Related party notes, principal and accrued interest | 300,000 | 1,600,000 | |||||||||||||||||||||||||||||
Convertible Preferred stock number of preferred stock converted into common stock | 36,194 | 273,046 | |||||||||||||||||||||||||||||
Share per price | $ 5.87 | $ 8.39 | $ 5.87 | ||||||||||||||||||||||||||||
Repaid the principal amount of accrued interest | 600,000 | ||||||||||||||||||||||||||||||
Increase Warrants pursuant to an anti-dilution | 5,090,171 | 3,371,161 | 10,206,543 | 0 | 0 | 3,796,733 | 40,787 | ||||||||||||||||||||||||
Cash Commissions percentage of gross proceeds | 2.00% | ||||||||||||||||||||||||||||||
Cash proceeds from 2008 Senior Convertible Notes | 4,100,000 | ||||||||||||||||||||||||||||||
Cash proceeds from Senior Convertible Notes | 3,500,000 | ||||||||||||||||||||||||||||||
Repayment Premium, Percentage | 42.90% | ||||||||||||||||||||||||||||||
Principal and accrued interest total | 8,600,000 | ||||||||||||||||||||||||||||||
Repayment Premium | $ 600,000 | ||||||||||||||||||||||||||||||
Senior convertible notes converted to shares | 1,464,479 | ||||||||||||||||||||||||||||||
Commission as percentage of gross proceeds | 7.00% | ||||||||||||||||||||||||||||||
Debt Conversion, Converted Instrument, Expiration or Due Date | Feb. 20, 2009 |
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