FORM
10-QSB
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
(Mark
One)
|
:
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
For
the
quarterly period ended March 31, 2007
OR
|
9
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
For
the
transition period from
to
Commission
file number 1-12830
BioTime,
Inc.
(Exact
name of small business issuer as specified in its charter)
|
California
|
94-3127919
|
|
(State
or other jurisdiction of incorporation
|
(IRS
Employer
|
|
or
organization)
|
Identification
No.)
|
6121
Hollis Street
Emeryville,
California 94608
(Address
of principal executive offices)
(510)
350-2940
(Issuer's
telephone number)
Indicate
by check mark whether the issuer (1) filed all reports required to be filed
by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the
past
90 days. Yes
X
No__
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes No X
APPLICABLE
ONLY TO CORPORATE ISSUERS:
Indicate
the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date. 22,834,374 common
shares, no par value, as of May
9,
2007.
Transitional
Small Business Disclosure Format (Check one) Yes No X
PART
1– FINANCIAL
INFORMATION
Statements
made in this Report that are not historical facts may constitute forward-looking
statements that are subject to risks and uncertainties that could cause actual
results to differ materially from those discussed. Such risks and uncertainties
include but are not limited to those discussed in this report under Item 1
of
the Notes to Financial Statements, and in BioTime's Annual Report on Form 10-K
filed with the Securities and Exchange Commission. Words such as “expects,”
“may,” “will,” “anticipates,” “intends,” “plans,” “believes,” “seeks,”
“estimates,” and similar expressions identify forward-looking
statements.
Item
1. Financial Statements
BIOTIME,
INC.
CONDENSED
BALANCE SHEET
|
|
March
31,
2007
(unaudited)
|
|
||
| ASSETS | ||||
|
CURRENT
ASSETS
|
||||
|
Cash
and cash equivalents
|
$
|
277,280
|
||
|
Accounts
receivable
|
4,287
|
|||
|
Prepaid
expenses and other current assets
|
53,246
|
|||
|
Total
current assets
|
334,813
|
|||
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EQUIPMENT,
net of accumulated depreciation of $582,690
|
10,861
|
|||
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DEPOSITS
AND OTHER ASSETS
|
20,976
|
|||
|
TOTAL
ASSETS
|
$
|
366,650
|
||
|
LIABILITIES
AND SHAREHOLDERS' DEFICIT
|
||||
|
CURRENT
LIABILITIES
|
||||
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Accounts
payable and accrued liabilities
|
$
|
553,358
|
||
|
Lines
of credit
|
100,000
|
|||
|
Current
portion of deferred license revenues
|
185,738
|
|||
|
Total
current liabilities
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839,096
|
|||
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DEFERRED
LICENSE REVENUES - less current portion
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1,217,477
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|||
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ROYALTY
OBLIGATION
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671,506
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|||
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OTHER
LONG-TERM LIABILITIES
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11,119
|
|||
|
Total
long-term liabilities
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2,739,198
|
|||
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COMMITMENT
|
||||
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SHAREHOLDERS'
DEFICIT:
Preferred
shares, no par value, undesignated as to Series,
authorized
1,000,000 shares; none issued
|
-
|
|||
|
Common
shares, no par value, authorized 50,000,000 shares; issued
and
outstanding 22,724,324
|
40,493,615
|
|||
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Contributed
capital
|
93,972
|
|||
|
Accumulated
deficit
|
(42,960,135
|
)
|
||
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Total
shareholders' deficit
|
(2,372,548
|
)
|
||
|
TOTAL
LIABILITIES AND SHAREHOLDERS' DEFICIT
|
$
|
366,650
|
See
accompanying notes to condensed interim financial statements.
1
BIOTIME,
INC.
CONDENSED
STATEMENTS OF OPERATIONS
(Unaudited)
|
Three
Months Ended
|
|||||||
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March
31, 2007
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March
31, 2006
|
||||||
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REVENUE:
|
|||||||
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License
fees
|
$
|
46,434
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$
|
35,802
|
|||
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Royalties
from product sales
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199,264
|
205,940
|
|||||
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Total
revenue
|
245,698
|
241,742
|
|||||
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OPERATING
EXPENSES:
|
|||||||
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Research
and development
|
(343,550
|
)
|
(265,932
|
)
|
|||
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General
and administrative
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(417,780
|
)
|
(436,881
|
)
|
|||
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Total
operating expenses
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(761,330
|
)
|
(702,813
|
)
|
|||
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INTEREST
INCOME (EXPENSE) AND OTHER:
|
(38,230
|
)
|
(17,116
|
)
|
|||
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NET
LOSS
|
$
|
(553,862
|
)
|
$
|
(478,187
|
)
|
|
|
LOSS
PER COMMON SHARE - BASIC AND DILUTED
|
$
|
(0.02
|
)
|
$
|
(0.02
|
)
|
|
|
WEIGHTED
AVERAGE NUMBER OF COMMON SHARES AND COMMON SHARE EQUIVALENTS OUTSTANDING
-
BASIC AND DILUTED
|
22,722,707
|
22,439,469
|
|||||
See
accompanying notes to condensed interim financial statements.
2
BIOTIME,
INC.
CONDENSED
STATEMENTS OF CASH FLOWS
(Unaudited)
|
Three
Months Ended
|
|||||||
|
March
31, 2007
|
March
31, 2006
|
||||||
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CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|||||||
|
Net
loss
|
$
|
(553,862
|
)
|
$
|
478,187
|
)
|
|
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
|||||||
|
Depreciation
|
1,758
|
1,464
|
|||||
|
Amortization
of line of credit costs
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5,965
|
-
|
|||||
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Interest
on royalty obligation
|
39,749
|
31,371
|
|||||
|
Stock-based
compensation
|
50,837
|
32,006
|
|||||
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Changes
in operating assets and liabilities:
|
|||||||
|
Accounts
receivable
|
2,889
|
(503,561
|
)
|
||||
|
Prepaid
expenses and other current assets
|
(8,713
|
)
|
(46,073
|
)
|
|||
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Accounts
payable and accrued liabilities
|
117,343
|
(251,760
|
)
|
||||
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Deferred
revenue
|
(38,925
|
)
|
468,041
|
||||
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Deferred
rent
|
1,001
|
1,945
|
|||||
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Net
cash used in operating activities
|
(381,958
|
)
|
(744,754
|
)
|
|||
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CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|||||||
|
Cash
used in investing activities, purchase of assets
|
(1,779
|
)
|
-
|
||||
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|||||||
|
Borrowings
under line of credit
|
100,000
|
-
|
|||||
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Exercise
of warrants
|
-
|
126
|
|||||
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Net
cash provided by financing activities
|
100,000
|
126
|
|||||
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DECREASE
IN CASH AND CASH
EQUIVALENTS:
|
(283,737
|
)
|
(744,628
|
)
|
|||
|
Cash
and cash equivalents at beginning of period
|
561,017
|
1,833,774
|
|||||
|
Cash
and cash equivalents at end of period
|
$
|
277,280
|
$
|
1,089,146
|
|||
See
accompanying notes to condensed interim financial statements.
3
BIOTIME,
INC.
NOTES
TO CONDENSED INTERIM FINANCIAL STATEMENTS
1.
Description of Organization
General
-
BioTime, Inc. (“BioTime”) was organized November 30, 1990 as a California
corporation. BioTime is a biomedical organization which is engaged in the
research and development of synthetic plasma expanders, blood volume substitute
solutions, and organ preservation solutions, for use in surgery, trauma care,
organ transplant procedures, and other areas of medicine.
The
unaudited condensed interim balance sheet as of March 31, 2007, and the
unaudited condensed interim statements of operations and cash flows for the
three months ended March 31, 2007 and 2006 have been prepared by BioTime
management. In the opinion of management, all adjustments (consisting only
of
normal recurring adjustments) necessary to present fairly the financial
position, results of operations, and cash flows at March 31, 2007 and for all
interim periods presented have been made. The results of operations for the
three months ended March 31, 2007 are not necessarily indicative of the
operating results anticipated for the full year.
Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted as permitted by regulations of the Securities and Exchange
Commission. Certain previously furnished amounts have been reclassified to
conform with presentations made during the current periods. It is suggested
that
these interim condensed financial statements be read in conjunction with the
annual audited financial statements and notes thereto included in BioTime's
Form
10-K for the year ended December 31, 2006.
Significant
Risks and Uncertainties- BioTime’s
operations are subject to a number of factors that can affect its operating
results and financial condition. Such factors include but are not limited to
the
following: the results of clinical trials of BioTime’s products; BioTime’s
ability to obtain United States Food and Drug Administration and foreign
regulatory approval to market its products; competition from products
manufactured and sold or being developed by other companies; the price of and
demand for BioTime products; BioTime’s ability to obtain additional financing
and the terms of any such financing that may be obtained; BioTime’s ability to
negotiate favorable licensing or other manufacturing and marketing agreements
for its products; the availability of ingredients used in BioTime’s products;
and the availability of reimbursement for the cost of BioTime’s products (and
related treatment) from government health administration authorities, private
health coverage insurers and other organizations.
Liquidity
and Going Concern
- The
accompanying condensed interim financial statements have been prepared assuming
BioTime will continue as a going concern. At March 31, 2007, BioTime had
$277,280 cash on hand and lines of credit for $573,600 (see Note 3), from which
$100,000 had been drawn at March 31, 2007. BioTime also had negative working
capital of $504,283, a shareholders’ deficit of $2,372,548, and an accumulated
deficit of $42,960,135. BioTime needs additional capital and greater revenues
to
continue its current operations, to complete clinical trials of
PentaLyteâ,
and to
conduct its planned product
4
development
and research programs. Sales of additional equity securities could result in
the
dilution of the interests of present shareholders. BioTime is also continuing
to
seek new agreements with pharmaceutical companies to provide product and
technology licensing fees and royalties. The availability and terms of equity
financing and new license agreements are uncertain. The unavailability or
inadequacy of additional financing or future revenues to meet capital needs
could force BioTime to modify, curtail, delay, suspend, or possibly discontinue
some or all aspects of its planned operations. Management believes that its
projected rate of spending, which includes possible spending cuts, cash on
hand,
anticipated royalties from the sale of Hextend®,
licensing fees, and available revolving lines of credit, will allow BioTime
to
operate through September 30, 2007. These conditions raise substantial doubt
about BioTime’s ability to continue as a going concern. The accompanying
condensed interim financial statements do not include any adjustments that
might
result from the outcome of this uncertainty.
2.
Summary
of Significant Accounting Policies
Financial
Statement Estimates
- The
preparation of condensed interim financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities
and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Revenue
Recognition -
Royalty
and license fee revenues consist of product royalty payments and fees under
license agreements and are recognized when earned. Up-front nonrefundable fees
where BioTime has no continuing performance obligations are recognized as
revenues when collection is reasonably assured. In situations where continuing
performance obligations exist, up-front nonrefundable fees are deferred and
amortized ratably over the performance period. If the performance period cannot
be reasonably estimated, BioTime amortizes nonrefundable fees over the life
of
the contract until such time that the performance period can be more reasonably
estimated. Milestones, if any, related to scientific or technical achievements
are recognized in income when the milestone is accomplished if (a) substantive
effort was required to achieve the milestone, (b) the amount of the milestone
payment appears reasonably commensurate with the effort expended and (c)
collection of the payment is reasonably assured.
BioTime
also
defers costs, including finders’ fees, which are directly related to license
agreements for which revenue has been deferred. Deferred costs are charged
to
expense proportionally and over the same period that related deferred revenue
is
recognized as revenue. Deferred costs are net against deferred revenues in
BioTime’s balance sheet.
BioTime
recognizes royalty revenues in the quarter in which the sales report is
received, rather than the quarter in which the sales took place, as BioTime
does
not have sufficient sales history to accurately predict quarterly sales.
Grant
income
is recognized as revenue when earned.
5
Indemnification
-
The
following is a summary of BioTime's agreements that BioTime has determined
are
within the scope of the Financial Accounting Standards Board (the “FASB”)
interpretation No. 45 (“FIN 45”), "Guarantor's Accounting and Disclosure
Requirements for Guarantees, including Indirect Guarantees of Indebtedness
of
Others -- an interpretation of FASB Statements No. 5, 57 and 107 and rescission
of FIN 34."
Under
its
bylaws, BioTime has agreed to indemnify its officers and directors for certain
events or occurrences arising as a result of the officer or director’s serving
in such capacity. The term of the indemnification period is for the officer's
or
director's lifetime. The maximum potential amount of future payments BioTime
could be required to make under the indemnification provisions contained in
its
bylaws is unlimited. However, BioTime has a directors’ and officers’ liability
insurance policy that limits its exposure and enables it to recover a portion
of
any future amounts paid. As a result of its insurance policy coverage, BioTime
believes the estimated fair value of these indemnification agreements is minimal
and has no liabilities recorded for these agreements as of March 31, 2007.
Under
its
license agreements with Hospira, Inc. ("Hospira") and CJ Corp. ("CJ"), BioTime
shall indemnify Abbott (Hospira’s predecessor in interest), Hospira, and/or CJ
for any cost or expense resulting from any third party claim or lawsuit arising
from alleged patent infringement by Abbott, Hospira, or CJ relating to actions
covered by the applicable license agreement. Management believes that the
possibility of payments under the indemnification clauses by BioTime is remote.
Therefore, BioTime has not recorded a provision for potential claims as of
March
31, 2007.
BioTime
enters into indemnification provisions under (i) its agreements with other
companies in its ordinary course of business, typically with business partners,
licensees, contractors, hospitals at which clinical studies are conducted,
and
landlords and (ii) its agreements with investors, investment bankers and
financial advisers. Under these provisions BioTime generally indemnifies and
holds harmless the indemnified party for losses suffered or incurred by the
indemnified party as a result of BioTime's activities or, in some cases, as
a
result of the indemnified party's activities under the agreement. These
indemnification provisions often include indemnifications relating to
representations made by BioTime with regard to intellectual property rights.
These indemnification provisions generally survive termination of the underlying
agreement. In some cases, BioTime has obtained liability insurance providing
coverage that limits its exposure for indemnified matters. The maximum potential
amount of future payments BioTime could be required to make under these
indemnification provisions is unlimited. BioTime has not incurred material
costs
to defend lawsuits or settle claims related to these indemnification agreements.
As a result, BioTime believes the estimated fair value of these agreements
is
minimal. Accordingly, BioTime has no liabilities recorded for these agreements
as of March 31, 2007.
Stock-Based
Compensation
- On
January 1, 2006, BioTime adopted Statement of Financial Accounting Standards
(“SFAS”) No. 123 (Revised 2004), “Share-Based Payment” (“SFAS 123(R)”) which
requires the measurement and recognition of compensation expense for all
share-based payment awards made to directors and employees including employee
stock options based on estimated fair values. SFAS 123(R) supersedes BioTime's
previous accounting
6
policy
using the intrinsic value method under Accounting Principles Board Opinion
(“APB”) No. 25, “Accounting for Stock Issued to Employees” for periods beginning
in fiscal 2006. In March 2005, the Securities and Exchange Commission issued
Staff Accounting Bulletin (“SAB”) No. 107, “Valuation of Share-Based Payment
Arrangements for Public Companies”, which provides supplemental implementation
guidance for SFAS 123(R). BioTime has applied the provisions of SAB 107 in
its
adoption of SFAS 123(R). Upon adoption of SFAS 123(R), BioTime has continued
to
utilize the Black-Scholes Merton option pricing model which was previously
used
for BioTime's pro forma disclosures under SFAS 123. BioTime's determination
of
fair value of share-based payment awards on the date of grant using an
option-pricing model is affected by BioTime's stock price as well as assumptions
regarding a number of highly complex and subjective variables. These variables
include, but are not limited to, BioTime's expected stock price volatility
over
the term of the awards, and the actual and projected employee stock options
exercise behaviors. The expected term of options granted is derived from
historical data on employee exercises and post-vesting employment termination
behavior. The risk-free rate is based on the U.S Treasury rates in effect during
the corresponding period of grant. Because changes in the subjective assumptions
can materially affect the estimated value, in management's opinion, the existing
valuation models may not provide an accurate measure of the fair value of
BioTime's employee stock options. Although the fair value of employee stock
options is determined in accordance with SFAS 123(R) and SAB 107 using an
option-pricing model, that value may not be indicative of the fair value
observed in a willing buyer/willing seller market transaction. See Note 8 for
additional information.
Recently
Issued Accounting Standards -In
July
2006, the FASB issued Interpretation No. 48, “Accounting for Uncertainty in
Income Taxes” (“FIN 48”). FIN 48 creates a single accounting and disclosure
model for uncertain tax positions, provides guidance on the minimum threshold
that a tax uncertainty is required to meet before it can be recognized in the
financial statements, and applies to all tax positions taken by a company,
both
those deemed to be routine as well as those for which there may be a high degree
of uncertainty.
FIN
48
establishes a two-step approach for evaluating tax positions. The first step
-
recognition - occurs when a company concludes (based solely on the technical
aspects of the tax matter) that a tax position is more likely than not to be
sustained on examination by a taxing authority. The second step - measurement
-
is only considered after step one has been satisfied, and measures any tax
benefit at the largest amount that is deemed more likely than not to be realized
upon ultimate settlement of the uncertainty. Tax positions that fail to qualify
for initial recognition are recognized in the first subsequent interim period
that they meet the more likely than not standard, when they are resolved through
negotiation or litigation with the taxing authority, or upon the expiration
of
the statute of limitations. Derecognition of a tax position previously
recognized would occur when a company subsequently concludes that a tax position
no longer meets the more likely than not threshold of being sustained. FIN
48
also significantly expands the financial statement disclosure requirements
relating to uncertain tax positions. FIN 48 is effective for fiscal years
beginning after December 15, 2006. Differences between the amounts
recognized in the balance sheet prior to adoption and the amounts recognized
in
the balance sheet after adoption will be accounted for as a cumulative effect
adjustment to the beginning balance of retained earnings. BioTime does not
believe that the adoption of FIN 48 will have a material effect on its condensed
interim financial statements.
7
In
September 2006, the FASB issued SFAS 157, “Fair Value Measurements,” which
defines fair value, establishes a framework for measuring fair value, and
requires additional disclosures about fair value measurements. SFAS 157 is
effective for fiscal years beginning after November 15, 2007. BioTime is
currently evaluating the effect, if any, that the adoption of SFAS 157 will
have
on its condensed interim financial statements.
In
February 2007, the FASB issued SFAS 159, “The Fair Value Option for Financial
Assets and Financial Liabilities.” SFAS 159 permits entities to choose to
measure many financial instruments, and certain other items, at fair value.
SFAS
159 applies to reporting periods beginning after November 15, 2007. BioTime
is
currently evaluating the effect, if any, that the adoption of SFAS 159 will
have
on its condensed interim financial statements.
3.
Lines of Credit
In
April
2006, BioTime entered into a Revolving Line of Credit Agreement (the “Credit
Agreement”) with Alfred D. Kingsley, Cyndel & Co., Inc., and George
Karfunkel, investors in BioTime, under which BioTime may borrow up to $500,000
for working capital purposes at an interest rate of 10% per annum. The maturity
date of the Credit Agreement is the earlier of (i) October 31, 2007 or (ii)
such date on which the borrower shall have received an aggregate of $600,000
through (A) the sale of capital stock, (B) the collection of licensing fees,
signing fees, milestone fees, or similar fees in excess of $1,000,000 under
any
present or future agreement pursuant to which the borrower grants one or more
licenses to use the borrower’s patents or technology, (C) funds borrowed from
other lenders, or (D) any combination of sources under clauses (A) through
(C).
Under the Credit Agreement, BioTime will prepay, and the credit line will be
reduced by, any funds received prior to the maturity date from those sources
discussed above. In consideration for making the line of credit available,
BioTime issued to the investors a total of 99,999 common shares. The line of
credit is collateralized by a security interest in BioTime’s right to receive
royalty and other payments under the license agreement with Hospira. The market
value of BioTime common shares was $0.38 per common share on April 12, 2006,
valuing the shares at $38,000. During the quarter ended March 31, 2007, BioTime
drew $100,000 under this line of credit and had requested an additional $200,000
which was received subsequent to March 31, 2007. See Note 10 to the condensed
interim financial statements.
BioTime
also has an available line of credit from American Express, which allows for
borrowings up to $43,600; no funds have yet been drawn from this line of credit.
Should any such money be drawn, interest will be payable on borrowings at a
total rate equal to the prime rate plus 3.99% per annum; however, regardless
of
the prime rate, the interest rate payable will at no time be less than 9.49%
per
annum. The line of credit will not expire unless terminated by one of the
parties.
BioTime
also secured a line of credit from Advanta in November 2006, which allows for
borrowings up to $30,000; no funds have yet been drawn from this line of credit.
Should any such money be drawn, interest will be payable on borrowings at a
Variable Rate Index, which will at no time be less than 8.25% per
annum.
8
4.
Royalty Obligation
In
December 2004, BioTime entered into an agreement with Summit Pharmaceuticals
International Corporation (“Summit”) to co-develop Hextend and PentaLyte for the
Japanese market. Under the agreement, BioTime received $300,000 in December
2004, $450,000 in April 2005, and $150,000 in October 2005. The payments
represent a partial reimbursement of BioTime’s development costs of Hextend and
PentaLyte. In June 2005, following BioTime’s approval of Summit’s development
plan for Hextend, BioTime paid to Summit a one-time fee of $130,000 for their
services in preparing the plan. The agreement states that revenues from Hextend
and PentaLyte in Japan will be shared between BioTime and Summit as follows:
BioTime 40% and Summit 60%. Additionally, BioTime will pay Summit 8% of all
net
royalties received from the sale of PentaLyte in the United States.
The
accounting treatment of the payments from Summit fall under the guidance of
Emerging Issues Task Force (“EITF”) 88-18, “Sales of Future Revenues.” EITF
88-18 addresses the accounting treatment when an enterprise (BioTime) receives
cash from an investor (Summit) and agrees to pay to the investor a specified
percentage or amount of the revenue or a measure of income of a particular
product line, business segment, trademark, patent, or contractual right. The
EITF reached a consensus on six independent factors that would require
reclassification of the proceeds as debt. BioTime meets one of the factors
whereby BioTime has significant continuing involvement in the generation of
the
cash flows due to the investor. As a result, BioTime initially recorded the
net
proceeds from Summit to date of $770,000 as long-term debt to
comply
with EITF 88-18, even though BioTime is not legally indebted to Summit for
that
amount.
In
July
2005, Summit sublicensed the rights to Hextend in Japan to Maruishi
Pharmaceutical Co., Ltd (“Maruishi”). In consideration for the license, Maruishi
agreed to pay Summit a series of milestone payments: Yen 70,000,000, (or
$593,390 USD based on foreign currency conversion rates at the time) upon
executing the agreement, Yen 100,000,000 upon regulatory filing in Japan, and
Yen 100,000,000 upon regulatory approval of Hextend in Japan. Consistent with
the terms of the BioTime and Summit agreement, Summit paid 40% of the initial
agreement execution amount, $237,356, to BioTime during October 2005. BioTime
does not expect the regulatory filing and approval milestones to be attained
for
several years.
The
initial accounting viewed the potential repayment of the $770,000 imputed debt
to come only from the 8% share of US PentaLyte revenues generated by BioTime
and
paid to Summit. BioTime first became aware of the terms of the Maruishi
sublicense during the fourth quarter of 2005, at which time BioTime prepared
an
estimate of the future cash flows, and determined that Summit will earn a
majority of its return on investment from its agreement with Maruishi, and
not
the 8% of BioTime’s U.S. PentaLyte sales. Considering this, the imputed $770,000
obligation to Summit is viewed for accounting purposes as a royalty obligation
which will be reduced by Summit’s 8% share of BioTime’s U.S. PentaLyte sales
plus Summit’s 60% share of Japanese revenue. Accordingly, BioTime recorded the
entire $593,390 paid by Maruishi to Summit for the sublicense as deferred
revenue, to be amortized over the remaining life of the patent through 2019.
BioTime’s 40% share of this payment was collected in October 2005 and the
remaining 60% share was recorded as a reduction of the long-term
royalty
9
obligation
of BioTime to Summit. The balance of the license fees received by BioTime is
still being treated as a long-term royalty obligation for financial accounting
purposes under EITF 88-18. Interest on the long-term royalty obligation is
accrued monthly, using the effective interest method beginning October 2005,
at
the rate of 25.2% per annum, which BioTime has determined is the appropriate
interest rate when the future cash flows from the transaction are considered.
Prior to October 2005, BioTime was accruing interest at a rate of 12% per annum
based upon its incremental borrowing rate because the effective interest rate
derived from future “deemed payments” could not be reasonably estimated. The
effective interest rate will be evaluated annually, or when events occur that
have significantly affected the estimate of future cash flows. BioTime has
recorded $31,749 and $31,371 of interest expense on the long-term royalty
obligation during
the three months ended March 31, 2007 and March 31, 2006,
respectively.
5.
Shareholders’ Deficit
During
April 1998, BioTime entered into a financial advisory services agreement with
Greenbelt Corp. ("Greenbelt"), a corporation controlled by Alfred D. Kingsley
and Gary K. Duberstein, who are also shareholders of BioTime. The agreement
has
been renewed each subsequent year ending March 31. For the twelve months ended
March 31, 2006, BioTime agreed to pay Greenbelt $45,000 in cash and issue
135,000 common shares. Expenses of $24,413 relating to the term of the agreement
were recognized during the three months ended March 31, 2006. During April
2006,
BioTime paid the remaining $45,000 obligation under the agreement for the twelve
months ended March 31, 2006 and issued 33,750 common shares. During
March 2006, the board of directors approved the renewal of the agreement with
Greenbelt for the 12 months ended March 31, 2007. BioTime will pay Greenbelt
a
cash fee of $90,000 and agreed to issue Greenbelt 200,000 common shares. The
cash fees were payable as follows: $30,000 on January 2, 2007, $30,000 on April
2, 2007, and $30,000 on October 1, 2007. However, BioTime elected to exercise
its right to defer the cash payment that would otherwise have been due on
January 2, 2007. The deferred payment must be paid no later than October 1,
2007. Under the terms of the Greenbelt agreement, BioTime will issue to
Greenbelt 30,000 additional common shares as consideration for the deferral
of
the cash payment. The condensed interim statement of operations for the three
months ended March 31, 2007 reflects an accrual of $16,800 as the value of
the
30,000 shares issued to Greenbelt as consideration for the deferral of the
payment due January 2, 2007. BioTime also elected to defer the cash payment
that
was due to Greenbelt on April 2, 2007; see Note 9.
Activity
related to the Greenbelt agreement is presented in the table below:
|
Balance
included in Accounts Payable at January 1,
|
Add:
Cash-based expense accrued
|
Add:
Stock-based expense accrued
|
Less:
Cash payments
|
Less:
Value of
stock-based
payments
|
Balance
included in Accounts Payable at March 31,
|
||||||
|
2007
|
$108,000
|
22,500
|
44,800
|
(0)
|
(40,500)
|
$134,800
|
|||||
|
2006
|
$
65,138
|
11,250
|
13,163
|
(0)
|
(31,388)
|
$58,163
|
10
During
the three months ended March 31, 2007 and 2006, BioTime issued to Greenbelt
150,000 and 101,250 common shares, valued at $40,500 and $31,388, respectively.
During
the three months ended March 31, 2006, 63 warrants were exercised for proceeds
of $126.
6.
Licensing Agreement
On
March
24, 2006, BioTime entered into a license agreement with Summit to develop
Hextend and PentaLyte in the People’s Republic of China, and Taiwan. Summit paid
BioTime $500,000 in May 2006 as the initial consideration for the China and
Taiwan license. BioTime also will be entitled to receive 50% of the royalties
and any milestone payments received by Summit from any third-party sublicense,
excluding the first payment made by a sublicensee upon execution of an agreement
with Summit. Summit has entered a sublicense agreement with Maruishi for Hextend
and PentaLyte in China and Taiwan. Milestone payments of Yen
20,000,000 are payable by Maruishi when the first new drug application for
Hextend is filed and when the first clinical study of PentaLyte begins under
the
sublicense.
7.
Net Loss Per Share
Basic
loss per share excludes dilution and is computed by dividing net loss by the
weighted average number of common shares outstanding during the period.
Diluted loss per share reflects the potential dilution from securities and
other contracts which are exercisable or convertible into common shares. For
the
three months ended March 31, 2007 and 2006, options to purchase 1,751,664 and
1,509,664 common shares, respectively, and warrants to purchase 7,912,714 and
8,169,909 common shares, respectively, were excluded from the computation of
loss per share as their inclusion would be antidilutive. As a result, there
is
no difference between basic and diluted calculations of loss per share for
all
periods presented.
8.
Stock-Based Compensation under SFAS 123(R)
On
January 1, 2006, BioTime adopted SFAS 123(R), which requires the measurement
and
recognition for all share-based payment awards made to BioTime’s employees and
directors including employee stock options. The following table summarizes
stock-based compensation expense related to employee and director stock options
awards for the three months ended March 31, 2007 and 2006, which was allocated
as follows:
|
|
|
Three
Months Ended March
31, 2007
|
|
Three
Months Ended March 31, 2006
|
|||
|
Stock-based
compensation expense:
|
|||||||
|
Research
and Development
|
$
|
–
|
$
|
–
|
|||
|
General
and Administrative
|
6,037
|
18,843
|
|||||
|
Stock-based
compensation expense included in operating expense
|
6,037
|
18,843
|
|||||
|
Total
stock-based compensation expense
|
$
|
6,037
|
$
|
18,843
|
|||
The
value
of each employee and director stock option was estimated on the date of grant
using the Black-Scholes Merton model for the purpose of the pro forma financial
disclosures in accordance with SFAS 123(R).
The
weighted-average estimated fair value of stock options granted during the three
months ended March 31, 2007 and 2006 was $0.25 and $0.25 per share,
respectively, using the Black-Scholes Merton model with the following
weighted-average assumptions:
|
Three
Months Ended
March
31, 2007
|
Three
Months Ended
March
31, 2006
|
||
|
Expected
lives (in years)
|
5
|
5
|
|
|
Risk
free interest rate
|
3.89%
|
4.79%
|
|
|
Volatility
|
78.34%
|
93.00%
|
|
|
Dividend
yield
|
0%
|
0%
|
|
|
Forfeiture
rate
|
0%
|
0%
|
For
options granted prior to 2006 and valued in accordance with SFAS 123, the
expected life and the expected volatility of the stock options were based upon
historical data. Forfeitures of employee stock options were accounted for on
an
as-incurred basis.
Fair
Value Estimates
BioTime
uses third-party analyses to assist in developing the assumptions used to
determine fair value of share-based payment awards granted. BioTime’s
determination of the fair value of share-based payment awards on the date of
grant using an option-pricing model is affected by BioTime’s stock price as well
as assumptions regarding a number of highly complex and subjective variables.
The variables include, but are not limited to BioTime’s expected stock price
volatility over the term of the awards, and the actual and projected employee
stock option exercise behaviors. Because changes in the subjective assumptions
can materially affect the estimated value, in management’s opinion, the existing
valuation models may not provide an accurate measure of the fair value of
BioTime’s employee stock options. Although the fair value of employee stock
options is determined in accordance with SFAS 123(R) and SAB 107 using an
option-pricing model, that value may not be indicative of the fair value
observed in a willing buyer/willing seller market transaction.
9.
Subsequent Events
On
April
2, 2007, BioTime issued 50,000 common shares in conjunction with the 2006
Greenbelt agreement. On April 2, 2007, BioTime elected to defer the cash payment
due to Greenbelt, and as consideration for the deferral BioTime issued Greenbelt
an additional 30,000 shares of common stock.
During
April 2007, BioTime drew an additional $200,000 on its revolving line of credit.
See Note 3 for terms of this agreement.
11
Item 2. Management's Discussion and Analysis or Plan of Operation.
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF
FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Overview
Since
its
inception in November 1990, BioTime has been engaged primarily in research
and
development activities, which have culminated in the commercial launch of
Hextend®,
our
lead product, and our recently completed clinical trial of PentaLyte®.
Our
operating revenues have been generated primarily from licensing fees and from
royalties on the sale of Hextend. Our ability to generate substantial operating
revenue depends upon our success in developing and marketing or licensing our
plasma volume expanders and organ preservation solutions and technology for
medical use.
Most
of
our research and development efforts have been devoted to our first three blood
volume replacement products: Hextend, PentaLyte, and HetaCool®.
By
testing and bringing all three products to the market, we can increase our
market share by providing the medical community with solutions to match
patients’ needs. By developing technology for the use of HetaCool in low
temperature surgery, trauma care, and organ transplant surgery, we may also
create new market segments for our product line.
Our
first
product, Hextend, is a physiologically balanced blood plasma volume expander,
for the treatment of hypovolemia. Hextend is being distributed in the United
States by Hospira, Inc. and in South Korea by CJ Corp. (“CJ”) under exclusive
licenses from us. Hospira also has the right to obtain regulatory approval
and
market Hextend in Latin America and Australia. Summit Pharmaceuticals
International Corporation (“Summit”) has a license to develop Hextend and
PentaLyte in Japan, the People’s Republic of China, and Taiwan. Summit has
entered into sublicenses with Maruishi Pharmaceutical Co., Ltd. (“Maruishi”) to
obtain regulatory approval, manufacture, and market Hextend in Japan, and
Hextend and PentaLyte in China and Taiwan.
Under
our
license agreements, Hospira and CJ will report sales of Hextend and pay us
the
royalties and license fees due on account of such sales after the end of each
calendar quarter. We recognize such revenues in the quarter in which the sales
report is received, rather than the quarter in which the sales took place.
Revenues
for the three months ended March 31, 2007 consist of royalties on sales made
by
Hospira during the period beginning October 1, 2006 and ending December 31,
2006. Royalty revenues recognized for that three-month period were $199,264,
substantially
unchanged from $202,037 of royalty
revenue from Hospira during the same period last year.
12
Licensee
sales to hospitals increased but were offset by a slight decrease in sales
to
the United States Armed Forces during the period. Hextend is part of the
Tactical Combat Casualty Care protocol and has been purchased by the Armed
Forces through intermittent large volume orders.
We
expect
to receive royalties of $163,676 from Hospira during May 2007, based on Hextend
sales during the three months ended March 31, 2007. Royalties increased 64%
from
royalty revenues of $99,957 received during the same period last year. The
increase is attributable to increased sales of Hextend. This revenue will be
reflected in our condensed interim financial statements for the second quarter
of 2007.
Hextend
has become the standard plasma volume expander at a number of prominent teaching
hospitals and leading medical centers. We believe that as Hextend use
proliferates within the leading US hospitals, other smaller hospitals will
follow their lead contributing to sales growth.
We
have
completed the patient enrollment and treatment portion of a Phase II clinical
trial of PentaLyte in which PentaLyte was used to treat hypovolemia in cardiac
surgery, and we are presently analyzing the results of the trial. Our ability
to
commence and complete additional clinical studies of PentaLyte depends on our
cash resources and the costs involved, which are not presently determinable.
Clinical trials of PentaLyte in the United States may take longer and may be
more costly than the Hextend clinical trials, which cost approximately
$3,000,000. The Food and Drug Administration (“FDA”) permitted us to proceed
directly into a Phase III clinical trial of Hextend involving only 120 patients
because the active ingredients in Hextend had already been approved for use
in
plasma expanders by the FDA in other products. Because PentaLyte contains a
starch (pentastarch) that has not been approved by the FDA for use in a plasma
volume expander (although pentastarch is approved in the US for use in certain
intravenous solutions used to collect certain blood cell fractions), we had
to
complete Phase I and Phase II clinical trials of PentaLyte. A subsequent Phase
III trial may involve more patients than the Hextend trials, and we do not
know
yet the actual scope or cost of the clinical trials that the FDA will require
for PentaLyte or the other products we are developing.
During
April 2007, we submitted a report of those results to Hospira. Although Hospira
has expressed its continued interest in PentaLyte, there is no assurance that
they will choose to obtain a license. If Hospira declines to license PentaLyte,
we would need to find a different licensee to manufacture and market PentaLyte
in the United States and Canada. Regardless of whether we license PentaLyte
to
Hospira, we will seek licensing arrangements for PentaLyte in
Europe.
Plasma
volume expanders containing pentastarch have been approved for use in certain
foreign countries including Canada, certain European Union countries, and Japan.
The regulatory agencies in those countries may be more willing to accept
applications for regulatory approval of PentaLyte based upon clinical trials
smaller in scope than those that may be required by the FDA. This would permit
us to bring PentaLyte to market overseas more quickly than in the United States,
provided that suitable licensing arrangements can be made with multinational
or
foreign pharmaceutical companies to obtain financing for clinical trials and
manufacturing and marketing arrangements.
13
We
are
also continuing to develop solutions for low temperature surgery. Once a
sufficient amount of data from successful low temperature surgery has been
compiled, we plan to seek permission to use Hextend as a complete replacement
for blood under near-freezing conditions. We currently plan to market Hextend
for complete blood volume replacement at very low temperatures under the
registered trademark “HetaCool®” after FDA approval is obtained, although the
time frame for such approval is presently uncertain.
We
have
been awarded a $299,990 research grant by the NIH for use in the development
of
HetaCool. We are using the grant to fund a project entitled “Resuscitating
Blood-Substituted Hypothermic Dogs” at the Texas Heart Institute in Houston
under the guidance of Dr. George V. Letsou. Dr. Letsou is Associate Professor
of
Surgery and Director of the Heart Failure Center at the University of Texas
Medical School in Houston, Texas. We were granted $149,994 for the project
during 2004 and $149,996 during 2005. We have received $240,352 of the grant
funds through March 31, 2007. In the first quarter of 2007, the time period
for
drawing down the remainder of the grant funds was extended for another year,
running through March 31, 2008.
BioTime
scientists believe the HetaCool program has the potential to produce a product
that could be used in very high fluid volumes (50 liters or more per procedure
if HetaCool were used as a multi-organ donor preservation solution or to
temporarily replace substantially all of the patient’s circulating blood volume)
in cardiovascular surgery, trauma treatment, and organ transplantation. However,
the cost and time to complete the development of HetaCool, including clinical
trials, cannot presently be determined.
We
will
depend upon royalties from the sale of Hextend by Hospira and CJ as our
principal source of revenues for the foreseeable future. Those royalty revenues
will be supplemented by license fees as we enter into new commercial license
agreements for our products.
The
amount and pace of research and development work that we can do or sponsor,
and
our ability to commence and complete clinical trials required to obtain FDA
and
foreign regulatory approval of products, depends upon the amount of money we
have. Future research and clinical study costs are not presently determinable
due to many factors, including the inherent uncertainty of these costs and
the
uncertainty as to timing, source, and amount of capital that will become
available for these projects. We have already curtailed the pace of our product
development efforts due to the limited amount of funds available, and we may
have to postpone further laboratory and clinical studies, unless our cash
resources increase through growth in revenues, the completion of licensing
agreements, additional equity investment, borrowing or third party sponsorship.
Because
our research and development expenses, clinical trial expenses, and production
and marketing expenses will be charged against earnings for financial reporting
purposes, management expects that there will be losses from operations in the
near term.
Hextend®,
PentaLyte®, and HetaCool® are registered trademarks of BioTime.
14
Results
of Operations
Revenues
During
the three months ended March 31, 2007, we recognized $46,434 of license fee
revenues related
to the CJ and Summit Agreements. The CJ license fee of $800,000, net of the
finder’s fees, has been deferred and is being recognized as revenue over the
life of the contract, which has been estimated to be approximately eight years
based on the current expected life of the patent covering BioTime’s products in
Korea. A portion of the proceeds received by Summit from Maruishi in conjunction
with the sublicense of Hextend have also been deferred and are being amortized
under the same terms as the CJ revenues. See Notes 2 and 4 to the condensed
interim financial statements.
For
the
three months ended March 31, 2007, we recognized $199,264 in royalty revenue,
whereas we recognized $205,940 for the three months ended March 31, 2006.
Licensee sales to hospitals increased but were offset by a slight decrease
in
sales to the United States Armed Forces during the period, reflecting the fact
that the Armed Forces purchase Hextend in intermittent large volume
orders.
Operating
Expenses
Research
and development expenses were $343,550 for the three months ended March 31,
2007, compared
to $265,932 for the three months ended March 31, 2006. This
increase is chiefly attributable to a payment of approximately $86,000 due
upon
the completion of our Phase II clinical trials. Research and development
expenses include clinical trials expenses, laboratory study expenses, salaries,
ongoing prosecution of regulatory applications in the United States, and
consultants’ fees.
General
and administrative expenses decreased to $417,780 for the three months ended
March 31, 2007 from $436,881 for the three months ended March 31, 2006. In
an
effort to conserve cash, we have continued to cut our expenses, and had cost
savings in the following general and administrative expenses: a decrease of
approximately $11,000 in insurance allocated to general and administrative,
a
decrease of approximately $9,000 in investor relations expense, a decrease
of
approximately $12,800 in stock based compensation, and a $5,000 decrease in
director compensation. The overall decrease was offset by an increase of
approximately $17,200 in patent expenses.
Interest
Income (Expense) and Other
For
the
three months ended March 31, 2007, we incurred net interest and other expense
of
$38,230, compared to expense of $17,116 for the three months ended March 31,
2006. This increase in expense is due to higher interest expense associated
with
our imputed royalty obligation under our license agreement with
Summit.
15
Income
Taxes
During
the three months ended March 31, 2007, we incurred no foreign withholding taxes.
With respect to Federal and state income taxes, our effective income tax rate
differs from the statutory rate due to the 100% valuation allowance established
for our deferred tax assets, which relate primarily to net operating loss
carryforwards, as realization of such benefits is not deemed to be
likely.
Liquidity
and Capital Resources
The
major
components of our net cash used in operations of approximately $382,000 in
the
first quarter of 2007 can be summarized as follows: we received approximately
$199,000 of royalty revenues from Hospira; offsetting this amount were total
cash-based research and development expenditures of approximately $242,000,
and
cash-based general and administrative expenditures of approximately
$339,000.
At
March
31, 2007, we had $277,280 cash on hand and lines of credit for $573,600, from
which $100,000 had been drawn at March 31, 2007. We drew an additional $200,000
on one of our lines of credit during April 2007.
We
will
need to obtain additional equity capital or licensing fees during 2007 to
finance our current operations because our current lines of credit and our
royalty revenues are not sufficient to fund our operations beyond September
30,
2007.
During
April 2007, we submitted to Hospira a report of the results of our Phase II
clinical study of PentaLyte. Although Hospira has expressed its continued
interest in PentaLyte, there is no assurance that they will choose to obtain
a
license. If Hospira declines to license PentaLyte, we would need to find a
different licensee to manufacture and market PentaLyte in the United States
and
Canada. Regardless of whether we license PentaLyte to Hospira, we will seek
licensing arrangements for PentaLyte in Europe.
Since
inception, we have primarily financed our operations through the sale of equity
securities, licensing fees, royalties on product sales by our licensees, and
borrowings. The amount of license fees and royalties that may be earned through
the licensing and sale of our products and technology, the timing of the receipt
of license fee payments, and the future availability and terms of equity
financing, are uncertain. The unavailability or inadequacy of financing or
revenues to meet future capital needs could force us to modify, curtail, delay
or suspend some or all aspects of our planned operations. Sales of additional
equity securities could result in the dilution of the interests of present
shareholders.
In
April
2006, BioTime entered into a Revolving Line of Credit Agreement (the “Credit
Agreement”) with Alfred D. Kingsley, Cyndel & Co., Inc., and George
Karfunkel, investors in BioTime, under which BioTime may borrow up to $500,000
for working capital purposes at an interest rate of 10% per annum. The maturity
date of the Credit Agreement is the earlier of (i) October 31, 2007 or (ii)
such
date on which the borrower shall have received an aggregate of $600,000 through
(A) the sale of capital stock, (B) the collection of licensing fees, signing
fees, milestone fees, or similar fees in excess of $1,000,000 under any present
or future agreement pursuant to which the borrower grants one or more licenses
to use the borrower’s patents or
16
technology,
(C) funds borrowed from other lenders, or (D) any combination of sources under
clauses (A) through (C). Under the Credit Agreement, BioTime will prepay, and
the credit line will be reduced by, any funds received prior to the maturity
date from those sources discussed above. In consideration for making the line
of
credit available, BioTime issued to the investors a total of 99,999 common
shares. The line of credit is collateralized by a security interest in BioTime’s
right to receive royalty and other payments under the license agreement with
Hospira. The market value of BioTime common shares was $0.38 per common share
on
April 12, 2006, valuing the shares at $38,000. As of March 31, 2007, we had
drawn $100,000 against this line of credit, and in April 2007 we drew an
additional $200,000.
We
have
no contractual obligations as of March 31, 2007, with the exception of a fixed,
non-cancelable operating lease on our office and laboratory facilities in
Emeryville, California. Under this lease, we are committed to make payments
of
$10,803 per month, increasing 3% annually, plus our pro rata share of operating
costs for the building and office complex, through May 31, 2010.
Item
3. Controls and Procedures
Evaluation
of Disclosure Controls and Procedures
Our
management, including our principal executive officers and our principal
financial officer, have reviewed and evaluated our disclosure controls and
procedures as of the end of the period covered by this quarterly report on
Form
10-QSB. Following this review and evaluation,
management
has collectively determined that our disclosure controls and procedures were
effective as of the end of the period covered by this quarterly report on Form
10-QSB.
Changes
in Internal Controls
There
were no changes in our internal controls over financial reporting during the
quarter ended March 31, 2007 that materially affected or that could reasonably
likely materially affect our internal controls over financial reporting.
17
PART
II – OTHER
INFORMATION
Item
6. Exhibits and Reports on Form 8-K
|
Exhibit
|
|
|
Numbers
|
Description
|
|
3.1
|
Articles
of Incorporation, as Amended †
|
|
3.2
|
Amendment
of Articles of Incorporation ****
|
|
3.3
|
By-Laws,
As Amended.#
|
|
4.1
|
Specimen
of Common Share Certificate.+
|
|
4.2
|
Form
of Warrant Agreement between BioTime, Inc. and American Stock Transfer
& Trust Company++
|
|
4.3
|
Form
of Amendment to Warrant Agreement between BioTime, Inc. and American
Stock
Transfer & Trust Company. +++
|
|
4.4
|
Form
of Warrant+++
|
|
10.1
|
Intellectual
Property Agreement between BioTime, Inc. and Hal
Sternberg.+
|
|
10.2
|
Intellectual
Property Agreement between BioTime, Inc. and Harold
Waitz.+
|
|
10.3
|
Intellectual
Property Agreement between BioTime, Inc. and Judith
Segall.+
|
|
10.4
|
Intellectual
Property Agreement between BioTime, Inc. and Steven
Seinberg.*
|
|
10.5
|
Agreement
between CMSI and BioTime Officers Releasing Employment Agreements,
Selling
Shares, and Transferring Non-Exclusive License.+
|
|
10.6
|
Agreement
for Trans Time, Inc. to Exchange CMSI Common Stock for BioTime, Inc.
Common Shares.+
|
|
10.7
|
2002
Stock Option Plan, as amended.##
|
|
10.8
|
Exclusive
License Agreement between Abbott Laboratories and BioTime, Inc. (Portions
of this exhibit have been omitted pursuant to a request for confidential
treatment).###
|
|
10.9
|
Modification
of Exclusive License Agreement between Abbott Laboratories and BioTime,
Inc. (Portions of this exhibit have been omitted pursuant to a request
for
confidential treatment).^
|
|
10.10
|
Warrant
Agreement, dated March 27, 2002, between BioTime, Inc. and Alfred
D.
Kingsley*
|
|
10.11
|
Warrant
for the Purchase of Common Shares, dated August 12, 2002, issued
to
Ladenburg Thalmann & Co. Inc.**
|
|
10.12
|
Exclusive
License Agreement between BioTime, Inc. and CJ Corp.***
|
|
10.13
|
Hextend
and PentaLyte Collaboration Agreement between BioTime, Inc. and Summit
Pharmaceuticals International Corporation‡
|
|
10.14
|
Lease
dated as of May 4, 2005 between BioTime, Inc. and Hollis R& D
Associates ‡‡
|
|
10.15
|
Addendum
to Hextend and PentaLyte Collaboration Agreement between BioTime,
Inc. and
Summit Pharmaceuticals International Corporation‡‡‡
|
|
10.16
|
Amendment
to Exclusive License Agreement Between BioTime, Inc. and Hospira,
Inc.††
|
|
10.17
|
Hextend
and PentaLyte China License Agreement between BioTime, Inc. and Summit
Pharmaceuticals International Corporation†††
|
|
10.18
|
Revolving
Credit Line Agreement between BioTime, Inc, Alfred D. Kingsley, Cyndel
& Co., Inc., and George Karfunkel, dated April 12, 2006. (Incorporated
by reference to BioTime’s Form 10-K for the year ended December 31,
2005)††††
|
|
10.19
|
Security
Agreement executed by BioTime, Inc., dated April 12, 2006. (Incorporated
by reference to BioTime’s Form 10-K for the year ended December 31, 2005)
††††
|
|
10.20
|
Form
of Revolving Credit Note of BioTime, Inc. in the principal amount
of
$166,666.67
dated April 12, 2006. ††††
|
|
31
|
Rule
13a-14(a)/15d-14(a) Certification ++++
|
|
32
|
Section
1350 Certification ++++
|
†Incorporated
by reference to BioTime’s Form 10-K for the fiscal year ended June 30,
1998.
+
Incorporated by reference to Registration Statement on Form S-1, File Number
33-44549 filed with the Securities and Exchange Commission on December 18,
1991,
and Amendment No. 1 and Amendment No. 2 thereto filed with the Securities and
Exchange Commission on February 6, 1992 and March 7, 1992,
respectively.
#
Incorporated by reference to Registration Statement on Form S-1, File Number
33-48717 and Post-Effective Amendment No. 1 thereto filed with the Securities
and Exchange Commission on June 22, 1992, and August 27, 1992,
respectively.
18
++ Incorporated
by reference to Registration Statement on Form S-2, File Number 333-109442,
filed with the Securities and Exchange Commission on October 3, 2003, and
Amendment No.1 thereto filed with the Securities and Exchange Commission on
November 13, 2003.
+++Incorporated
by reference to Registration Statement on Form S-2, File Number 333-128083,
filed with the Securities and Exchange Commission on September 2,
2005.
##
Incorporated by reference to Registration Statement on Form S-8, File Number
333-101651 filed with the Securities and Exchange Commission on December 4,
2002
and Registration Statement on Form S-8, File Number 333-122844 filed with the
Securities and Exchange Commission on February 23, 2005.
###
Incorporated by reference to BioTime’s Form 8-K, filed April 24,
1997.
^
Incorporated by reference to BioTime’s Form 10-Q for the quarter ended June 30,
1999.
*
Incorporated by reference to BioTime’s Form 10-K for the year ended December 31,
2001.
**
Incorporated by reference to BioTime’s Form 10-Q for the quarter ended June 30,
2002.
***
Incorporated by reference to BioTime’s Form 10-K/A-1 for the year ended December
31, 2002.
‡
Incorporated by reference to BioTime’s Form 8-K, filed December 30,
2004
‡‡
Incorporated by reference to Post-Effective Amendment No. 3 to Registration
Statement on Form S-2 File Number 333-109442, filed with the Securities and
Exchange Commission on May 24, 2005
‡‡‡
Incorporated by reference to BioTime’s Form 8-K, filed December 20,
2005
††
Incorporated by reference to BioTime’s Form 8-K, filed January 13,
2006
†††
Incorporated by reference to BioTime’s Form 8-K, filed March 30,
2006
††††
Incorporated by reference to BioTime’s Form 10-K For the year ended December 31,
2005
****
Incorporated by reference to BioTime’s Form 10-Q for the quarter ended June 30,
2006.
++++Filed
herewith
19
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
BIOTIME,
INC.
|
|
|
|
|
|
Date: May
15, 2007
|
By:
|
/s/ Judith
Segall
|
|
|
Judith
Segall
|
|||
|
|
Vice-President
- Operations
|
||
|
Member,
Office of the President*
|
|||
|
|
|
|
|
|
Date: May
15, 2007
|
By:
|
/s/ Hal
Sternberg
|
|
|
Hal
Sternberg
|
|||
|
|
Vice-President
- Research
|
||
|
Member,
Office of the President*
|
|||
|
|
|
|
|
|
Date: May
15, 2007
|
By:
|
/s/ Harold
Waitz
|
|
|
Harold
Waitz
|
|||
|
|
Vice-President
- Regulatory Affairs
|
||
|
Member,
Office of the President*
|
|||
|
|
|
|
|
|
Date: May
15, 2007
|
By:
|
/s/ Steven
A.
Seinberg
|
|
|
Steven
A. Seinberg
|
|||
|
|
Chief
Financial Officer
|
||
* The Office of the President is comprised of the three above-referenced
executive officers of BioTime who collectively exercise the powers of the Chief
Executive Officer
20
|
Exhibit
|
|
|
Numbers
|
Description
|
|
3.1
|
Articles
of Incorporation, as Amended †
|
|
3.2
|
Amendment
of Articles of Incorporation ****
|
|
3.3
|
By-Laws,
As Amended.#
|
|
4.1
|
Specimen
of Common Share Certificate.+
|
|
4.2
|
Form
of Warrant Agreement between BioTime, Inc. and American Stock Transfer
& Trust Company++
|
|
4.3
|
Form
of Amendment to Warrant Agreement between BioTime, Inc. and American
Stock
Transfer & Trust Company. +++
|
|
4.4
|
Form
of Warrant+++
|
|
10.1
|
Intellectual
Property Agreement between BioTime, Inc. and Hal
Sternberg.+
|
|
10.2
|
Intellectual
Property Agreement between BioTime, Inc. and Harold
Waitz.+
|
|
10.3
|
Intellectual
Property Agreement between BioTime, Inc. and Judith
Segall.+
|
|
10.4
|
Intellectual
Property Agreement between BioTime, Inc. and Steven
Seinberg.*
|
|
10.5
|
Agreement
between CMSI and BioTime Officers Releasing Employment Agreements,
Selling
Shares, and Transferring Non-Exclusive License.+
|
|
10.6
|
Agreement
for Trans Time, Inc. to Exchange CMSI Common Stock for BioTime, Inc.
Common Shares.+
|
|
10.7
|
2002
Stock Option Plan, as amended.##
|
|
10.8
|
Exclusive
License Agreement between Abbott Laboratories and BioTime, Inc. (Portions
of this exhibit have been omitted pursuant to a request for confidential
treatment).###
|
|
10.9
|
Modification
of Exclusive License Agreement between Abbott Laboratories and BioTime,
Inc. (Portions of this exhibit have been omitted pursuant to a request
for
confidential treatment).^
|
|
10.10
|
Warrant
Agreement, dated March 27, 2002, between BioTime, Inc. and Alfred
D.
Kingsley*
|
|
10.11
|
Warrant
for the Purchase of Common Shares, dated August 12, 2002, issued
to
Ladenburg Thalmann & Co. Inc.**
|
|
10.12
|
Exclusive
License Agreement between BioTime, Inc. and CJ Corp.***
|
|
10.13
|
Hextend
and PentaLyte Collaboration Agreement between BioTime, Inc. and Summit
Pharmaceuticals International Corporation‡
|
|
10.14
|
Lease
dated as of May 4, 2005 between BioTime, Inc. and Hollis R& D
Associates ‡‡
|
|
10.15
|
Addendum
to Hextend and PentaLyte Collaboration Agreement between BioTime,
Inc. and
Summit Pharmaceuticals International Corporation‡‡‡
|
|
10.16
|
Amendment
to Exclusive License Agreement Between BioTime, Inc. and Hospira,
Inc.††
|
|
10.17
|
Hextend
and PentaLyte China License Agreement between BioTime, Inc. and Summit
Pharmaceuticals International Corporation†††
|
|
10.18
|
Revolving
Credit Line Agreement between BioTime, Inc, Alfred D. Kingsley, Cyndel
& Co., Inc., and George Karfunkel, dated April 12, 2006. (Incorporated
by reference to BioTime’s Form 10-K for the year ended December 31,
2005)††††
|
|
10.19
|
Security
Agreement executed by BioTime, Inc., dated April 12, 2006. (Incorporated
by reference to BioTime’s Form 10-K for the year ended December 31, 2005)
††††
|
|
10.20
|
Form
of Revolving Credit Note of BioTime, Inc. in the principal amount
of
$166,666.67
dated April 12, 2006. ††††
|
|
31
|
Rule
13a-14(a)/15d-14(a) Certification ++++
|
|
32
|
Section
1350 Certification ++++
|
†Incorporated
by reference to BioTime’s Form 10-K for the fiscal year ended June 30,
1998.
+
Incorporated by reference to Registration Statement on Form S-1, File Number
33-44549 filed with the Securities and Exchange Commission on December 18,
1991,
and Amendment No. 1 and Amendment No. 2 thereto filed with the Securities and
Exchange Commission on February 6, 1992 and March 7, 1992,
respectively.
#
Incorporated by reference to Registration Statement on Form S-1, File Number
33-48717 and Post-Effective Amendment No. 1 thereto filed with the Securities
and Exchange Commission on June 22, 1992, and August 27, 1992,
respectively.
++ Incorporated
by reference to Registration Statement on Form S-2, File Number 333-109442,
filed with the Securities and Exchange Commission on October 3, 2003, and
Amendment No.1 thereto filed with the Securities and Exchange Commission on
November 13, 2003.
+++Incorporated
by reference to Registration Statement on Form S-2, File Number 333-128083,
filed with the Securities and Exchange Commission on September 2,
2005.
##
Incorporated by reference to Registration Statement on Form S-8, File Number
333-101651 filed with the Securities and Exchange Commission on December 4,
2002
and Registration Statement on Form S-8, File Number 333-122844 filed with the
Securities and Exchange Commission on February 23, 2005.
###
Incorporated by reference to BioTime’s Form 8-K, filed April 24,
1997.
^
Incorporated by reference to BioTime’s Form 10-Q for the quarter ended June 30,
1999.
*
Incorporated by reference to BioTime’s Form 10-K for the year ended December 31,
2001.
**
Incorporated by reference to BioTime’s Form 10-Q for the quarter ended June 30,
2002.
***
Incorporated by reference to BioTime’s Form 10-K/A-1 for the year ended December
31, 2002.
‡
Incorporated by reference to BioTime’s Form 8-K, filed December 30,
2004
‡‡
Incorporated by reference to Post-Effective Amendment No. 3 to Registration
Statement on Form S-2 File Number 333-109442, filed with the Securities and
Exchange Commission on May 24, 2005
‡‡‡
Incorporated by reference to BioTime’s Form 8-K, filed December 20,
2005
††
Incorporated by reference to BioTime’s Form 8-K, filed January 13,
2006
†††
Incorporated by reference to BioTime’s Form 8-K, filed March 30,
2006
††††
Incorporated by reference to BioTime’s Form 10-K For the year ended December 31,
2005
****
Incorporated by reference to BioTime’s Form 10-Q for the quarter ended June 30,
2006.
++++Filed
herewith
21
Exhibit 31CERTIFICATIONSI, Judith Segall, certify that:1. I have reviewed this quarterly report on Form 10-QSB of BioTime, Inc.;2. Based on my knowledge, this quarterly 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 quarterly 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 small business issuer as of, and for, the periods presented in this report;4. The small business issuer’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)) for the small business issuer 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 small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which the periodic reports are being prepared;
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reportingDate: May 15, 2007< div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">/s/ Judith Segall_______________Judith SegallVice-President - OperationsMember, Office of the President** The Office of the President is comprised of the three executive officers of the small business issuer who collectively exercise the powers of the Chief Executive Officer2
CERTIFICATIONSI, Hal Sternberg, certify that:1. I have reviewed this quarterly report on Form 10-QSB of BioTime, Inc.;2. Based on my knowledge, this quarterly 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 quarterly report;3. Based on my knowledge, the fi nancial 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 small business issuer as of, and for, the periods presented in this report;4. The small business issuer’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)) for the small business issuer 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 small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which the periodic reports are being prepared;
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reportingDate: May 15, 2007/s/ Hal Sternberg_______________Hal SternbergVice-President - ResearchMember, Office of the President** The Office of the President is comprised of the three executive officers of the issuer who collectively exercise the powers of the Chi ef Executive Officer4
CERTIFICATIONSI, Harold Waitz, certify that:1. I have reviewed this quarterly report on Form 10-QSB of BioTime, Inc.;2. Based on my knowledge, this quarterly 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 quarterly report;3. Based on my knowledge, the finan cial 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 small business issuer as of, and for, the periods presented in this report;4. The small business issuer’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)) for the small business issuer 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 small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which the periodic reports are being prepared;
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reportingDate: May 15, 2007/s/ Harold Waitz_______________Harold WaitzVice-President - Regulatory AffairsMember, Office of the President** The Office of the President is comprised of the three executive officers of the issuer who collectively exercise the powers of the Chief Executive Officer6
CERTIFICATIONSI, Steven A. Seinberg, certify that:1. I have reviewed this quarterly report on Form 10-QSB of BioTime, Inc.;2. Based on my knowledge, this quarterly 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 quarterly 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 small business issuer as of, and for, the periods presented in this report;4. The small business issuer’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)) for the small business issuer 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 small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which the periodic reports are being prepared;
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reportingDate: May 15, 2007< div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
/s/ Steven A. Seinberg_______________
Steven A. Seinberg
Chief Financial Officer
8
Exhibit
32
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 Quarterly Report on Form 10-QSB of BioTime, Inc. (the
ACompany@)
for the
quarter ended March 31, 2007 as filed with the Securities and Exchange
Commission on the date hereof (the AReport@),
we,
Judith Segall, Hal Sternberg, and Harold Waitz, collectively the Office of
the
President, and Steven A. Seinberg, Chief Financial Officer of the Company,
certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906
of the Sarbanes-Oxley Act of 2002, that:
1.
The
Report fully complies with the requirements of Section 13(a) or 15(d) of
the
Securities Exchange Act of 1934, as amended; and
2.
The
information contained in the Report fairly presents, in all material respects,
the financial condition and results of operations of the Company.
Date:
May
15, 2007
/s/
Judith
Segall
Judith
Segall
Vice-President
- Operations
Member,
Office of the President*
/s/
Hal
Sternberg
Hal
Sternberg
Vice-President
- Research
Member,
Office of the President*
/s/
Harold
Waitz
Harold
Waitz
Vice-President
- Regulatory Affairs
Member,
Office of the President*
/s/
Steven A.
Seinberg
Steven
A.
Seinberg
Chief
Financial Officer
*
The
Office of the President is comprised of the three above-referenced executives
of
the Company who collectively exercise the powers of the Chief Executive
Officer