Nevada
|
98-0373793
|
(State
or Other Jurisdiction of
Incorporation
Or Organization)
|
(I.R.S.
Employer Identification No.)
|
|
|
7
Deer Park Drive, Suite K, Monmouth Junction, New Jersey
08852
(Address
of Principal Executive Offices)
|
|
Large
accelerated filer ¨
|
Accelerated
filer ¨
|
|||
Non-accelerated
filer ¨
(Do not check if a smaller reporting company)
|
Smaller
reporting company þ
|
Page
|
||
PART I. FINANCIAL INFORMATION
|
|
|
|
|
|
|
Item
1. Financial Statements (March 31, 2008 and 2007 are
unaudited)
|
|
|
Consolidated
Balance Sheets
|
3
|
|
Consolidated
Statements of Operations
|
4
|
|
Consolidated
Statements of Changes in Stockholders’ Equity (Deficit)
|
5
|
|
Consolidated
Statements of Cash Flows
|
6
|
|
Notes
to Consolidated Financial Statements
|
8
|
|
|
|
|
Item
2. Management’s Discussion and Analysis or Plan of
Operation
|
13
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|
|
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Item
4. Controls and Procedures
|
14
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PART
II. OTHER INFORMATION
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|
|
Item 1. Legal Proceedings |
15
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|
Item
6. Exhibits
|
15
|
(a
development stage company)
|
|||||||
|
|
|
|||||
CONSOLIDATED
BALANCE SHEETS
|
|||||||
|
|
|
|||||
|
March
31,
|
December
31,
|
|||||
|
2008
|
2007
|
|||||
|
(Unaudited)
|
|
|||||
|
|
|
|||||
ASSETS
|
|
|
|||||
|
|
|
|||||
Current
Assets:
|
|
|
|||||
Cash
and cash equivalents
|
$
|
46,768
|
$
|
211,613
|
|||
Prepaid
expenses and other current assets
|
187,913
|
200,682
|
|||||
|
|||||||
Total
current assets
|
234,681
|
412,295
|
|||||
|
|||||||
Property
and equipment - net
|
122,687
|
144,457
|
|||||
|
|||||||
Other
assets
|
249,203
|
245,820
|
|||||
|
|||||||
Total
long-term assets
|
371,890
|
390,277
|
|||||
|
|||||||
Total
Assets
|
$
|
606,571
|
$
|
802,572
|
|||
|
|||||||
LIABILITIES
AND STOCKHOLDERS' EQUITY (DEFICIT)
|
|||||||
|
|||||||
Current
Liabilities:
|
|||||||
Accounts
payable
|
$
|
910,123
|
$
|
775,342
|
|||
Accrued
expenses and other current liabilities
|
228,090
|
131,526
|
|||||
Total
current liabilities
|
1,138,213
|
906,868
|
|||||
Long
term liabilities:
|
|||||||
Notes
payable - non-current
|
100,000
|
--
|
|||||
Total
long term liabilities
|
100,000
|
--
|
|||||
Total
liabilities
|
1,238,213
|
906,868
|
|||||
Stockholders’
Equity (Deficit):
|
|||||||
10%
Series A Preferred Stock, Par Value $0.001, 100,000,000 shares
authorized
at March 31, 2008 and December 31, 2007, 8,219,995 and 8,019,508
shares
issued and outstanding, respectively
|
8,219
|
8,019
|
|||||
Common
Stock, Par Value $0.001, 100,000,000 Shares authorized at March
31, 2008
and December 31, 2007, 25,044,932 shares issued and outstanding
|
25,045
|
25,045
|
|||||
Additional
paid-in capital
|
71,719,840
|
71,400,849
|
|||||
Deficit
accumulated during the development stage
|
(72,384,746
|
)
|
(71,538,209
|
)
|
|||
Total
stockholders' equity (deficit)
|
(631,642
|
)
|
(104,296
|
)
|
|||
|
|||||||
Total
Liabilities and Stockholders' Equity (Deficit)
|
$
|
606,571
|
$
|
802,572
|
|||
|
MEDASORB
TECHNOLOGIES CORPORATION
|
|||||||||||||
(a
development stage company)
|
|||||||||||||
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|||||||||||||
|
|
Period
from
|
|
|
|
|
|
|||
|
|
January
22,1997
|
|
|
|
|
|
|||
|
(date
of inception) to
|
|
Three
months ended March 31,
|
|
||||||
|
|
March
31, 2008
|
|
2008
|
|
2007
|
|
|||
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|||
|
|
|
|
|
|
|
|
|||
Revenue
|
|
$
|
--
|
|
$
|
--
|
|
$
|
--
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research
and development
|
|
|
42,663,407
|
|
|
355,127
|
|
|
344,411
|
|
Legal,
financial and other consulting
|
|
|
6,706,592
|
|
|
57,924
|
|
|
129,526
|
|
General
and administrative
|
|
|
21,633,599
|
|
|
233,524
|
|
|
685,419
|
|
Change
in fair value of management and incentive units
|
|
|
(6,055,483
|
)
|
|
--
|
|
|
--
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
expenses
|
|
|
64,948,115
|
|
|
646,575
|
|
|
1,159,356
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain
on disposal of property and equipment
|
|
|
(21,663
|
)
|
|
--
|
|
|
--
|
|
Gain
on extinguishment of debt
|
|
|
(216,617
|
)
|
|
--
|
|
--
|
||
Interest
expense (income), net
|
|
|
5,576,521
|
|
|
(525
|
)
|
|
(30,849
|
)
|
Penalties
associated with non-registration of
Series
A Preferred Stock
|
|
|
361,495
|
|
|
--
|
|
320,023
|
|
|
Net
loss
|
|
(70,647,851
|
)
|
(646,050
|
)
|
(1,448,530
|
)
|
|||
Series
A Preferred Stock Dividend
|
1,736,895
|
200,487
|
185,087
|
|||||||
Net
Loss available to common shareholders
|
$
|
(72,384,746
|
)
|
$
|
(846,537
|
)
|
$
|
(1,633,617
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted net loss per common share
|
|
|
|
|
$
|
(0.03
|
)
|
$
|
(0.
07
|
)
|
Weighted
average number of shares of
|
|
|
|
|
|
|
|
|
|
|
common
stock outstanding
|
|
|
|
|
|
25,044,932
|
|
|
24,628,274
|
|
|
|
MEDASORB
TECHNOLOGIES CORPORATION
|
|
|||||||||||||||||||
|
|
(a
development stage company)
|
|
|||||||||||||||||||
|
|
|
|
|||||||||||||||||||
|
|
CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(DEFICIT)
|
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Period
from December 31, 2007
to March 31, 2008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
Deficit
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
Additional
|
|
During
the
|
|
Total
|
|
|||||||
|
|
Common
Stock
|
|
Preferred
Stock
|
|
Paid-In
|
|
Development
|
|
Stockholders'
|
|
|||||||||||
|
|
Shares
|
|
Par
value
|
|
Shares
|
|
Par
Value
|
|
Capital
|
|
Stage
|
|
Equity
(Deficit)
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Balance
at December 31, 2007
|
|
|
25,044,932
|
|
$
|
25,045
|
|
|
8,019,508
|
|
$
|
8,019
|
|
$
|
71,400,849
|
|
$
|
(71,538,209
|
)
|
$
|
(104,296
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation - employees, consultants, and directors
|
|
|
--
|
|
|
--
|
|
|
--
|
|
|
--
|
|
|
118,704
|
|
|
--
|
|
|
118,704
|
|
Issuance
of Series A Preferred Stock as dividends
|
--
|
--
|
200,487
|
200
|
200,287
|
(200,487
|
)
|
--
|
||||||||||||||
Net
loss
|
|
|
--
|
|
|
--
|
|
|
--
|
|
|
--
|
|
|
--
|
|
|
(646,050
|
)
|
|
(646,050
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at March 31, 2008 (Unaudited)
|
|
|
25,044,932
|
|
$
|
25,045
|
|
|
8,219,995
|
|
$
|
8,219
|
|
$
|
71,719,840
|
|
$
|
(72,384,746
|
)
|
$
|
(631,642
|
)
|
|
|
MEDASORB
TECHNOLOGIES CORPORATION
|
|
|||||||
|
|
(a
development stage company)
|
|
|||||||
|
|
|
|
|
|
|
|
|||
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|||||||
|
|
Period
from
|
|
|
|
|
|
|||
|
|
January
22,1997
|
|
Three
months
|
|
Three
months
|
|
|||
|
|
(date
of inception) to
|
|
ended
|
|
Ended
|
|
|||
|
|
March
31, 2008
|
|
March
31, 2008
|
|
March
31, 2007
|
|
|||
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|||
Cash
flows from operating activities:
|
|
|
|
|
|
|||||
Net
loss
|
|
$
|
(70,647,851
|
)
|
$
|
(646,050
|
)
|
$
|
(1,448,530
|
)
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
|
|
Common
stock issued as inducement to convert convertible notes payable
and
accrued interest
|
|
|
3,351,961
|
|
|
--
|
|
|
--
|
|
Issuance
of common stock to consultant for services
|
|
|
30,000
|
|
|
--
|
|
|
--
|
|
Depreciation
and amortization
|
|
|
2,262,990
|
|
|
25,925
|
|
|
48,025
|
|
Amortization
of debt discount
|
|
|
1,000,000
|
|
|
--
|
|
|
--
|
|
Gain
on disposal of property and equipment
|
|
|
(21,663
|
)
|
|
--
|
|
|
--
|
|
Gain
on extinguishment of debt
|
|
|
(216,617
|
)
|
|
--
|
|
--
|
||
Abandoned
patents
|
|
|
183,556
|
|
|
--
|
|
|
--
|
|
Bad
debts - employee advances
|
|
|
255,882
|
|
|
--
|
|
|
--
|
|
Contributed
technology expense
|
|
|
4,550,000
|
|
|
--
|
|
|
--
|
|
Consulting
expense
|
|
|
237,836
|
|
|
--
|
|
|
--
|
|
Management
unit expense
|
|
|
1,334,285
|
|
|
--
|
|
|
--
|
|
Expense
for issuance of warrants
|
|
|
478,409
|
|
|
--
|
|
|
--
|
|
Expense
for issuance of options
|
|
|
1,008,636
|
|
|
118,704
|
|
|
457,085
|
|
Amortization
of deferred compensation
|
|
|
74,938
|
|
|
--
|
|
|
--
|
|
Penalties
in connection with non-registration event
|
361,496
|
--
|
--
|
|||||||
Changes
in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
Prepaid
expenses and other current assets
|
|
|
(459,461
|
)
|
|
12,769
|
|
(8,455
|
)
|
|
Other
assets
|
|
|
(56,393
|
)
|
|
(2,500
|
)
|
|
--
|
|
Accounts
payable and accrued expenses
|
|
|
2,957,424
|
|
|
231,345
|
|
(19,445
|
)
|
|
Accrued
interest expense
|
|
|
1,823,103
|
|
|
--
|
|
--
|
|
|
Dividend/penalty
payable
|
--
|
--
|
320,023
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
Net
cash used by operating activities
|
|
|
(51,491,469
|
)
|
|
(259,807
|
)
|
|
(651,297
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cash
flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
Proceeds
from sale of property and equipment
|
|
|
32,491
|
|
|
--
|
|
|
--
|
|
Purchases
of property and equipment
|
|
|
(2,221,851
|
)
|
|
(1,330
|
)
|
|
(21,428
|
)
|
Patent
costs
|
|
|
(409,386
|
)
|
|
(3,708
|
)
|
|
(10,758
|
)
|
Loan
receivable
|
|
|
(1,632,168
|
)
|
|
--
|
|
|
--
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
cash used by investing activities
|
|
|
(4,230,914
|
)
|
|
(5,038
|
)
|
|
(32,186
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cash
flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
Proceeds
from issuance of common stock
|
|
|
400,490
|
|
|
--
|
|
|
--
|
|
Proceeds
from issuance of preferred stock
|
|
|
4,679,437
|
|
|
--
|
|
|
--
|
|
Equity
contributions - net of fees incurred
|
|
|
41,711,198
|
|
|
--
|
|
|
--
|
|
Proceeds
from borrowings
|
|
|
8,478,631
|
|
|
100,000
|
|
|
--
|
|
Proceeds
from subscription receivables
|
|
|
499,395
|
|
|
--
|
|
|
--
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
cash provided by financing activities
|
|
|
55,769,151
|
|
|
100,000
|
|
--
|
|
Net
change in cash and cash equivalents
|
|
|
46,768
|
|
|
(164,845
|
)
|
|
(683,483
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents - beginning of period
|
|
|
--
|
|
|
211,613
|
|
|
2,873,138
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents - end of period
|
|
$
|
46,768
|
|
$
|
46,768
|
|
$
|
2,189,655
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
paid during the period for interest
|
|
$
|
590,189
|
|
$
|
--
|
|
$
|
--
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
schedule of noncash investing and financing
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note
payable principal and interest conversion to equity
|
|
$
|
10,201,714
|
|
$
|
--
|
|
$
|
--
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of member units for leasehold improvements
|
|
$
|
141,635
|
|
$
|
--
|
|
$
|
--
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of management units in settlement of cost of raising
capital
|
|
$
|
437,206
|
|
$
|
--
|
|
$
|
--
|
|
|
|
|
|
|
|
|
|
|
|
|
Change
in fair value of management units for cost of raising
capital
|
|
$
|
278,087
|
|
$
|
--
|
|
$
|
--
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange
of loan receivable for member units
|
|
$
|
1,632,168
|
|
$
|
--
|
|
$
|
--
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of equity in settlement of accounts payable
|
|
$
|
1,609,446
|
|
$
|
--
|
|
$
|
--
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of common stock in exchange for stock subscribed
|
|
$
|
399,395
|
|
$
|
--
|
|
$
|
--
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs
paid from proceeds in conjunction with issuance preferred
stock
|
|
$
|
620,563
|
|
$
|
--
|
|
$
|
--
|
|
Series
A Preferred Stock Dividends
|
$
|
1,736,895
|
$
|
200,487
|
$
|
185,087
|
||||
Net
effect of conversion of common stock to preferred stock prior to
merger
|
$
|
559
|
$
|
--
|
$
|
--
|
|
|
Weighted
|
Weighted
|
|||||||
|
|
Average
|
Average
|
|||||||
|
|
Exercise
|
Remaining
|
|||||||
|
Shares
|
per
Share
|
Life
(Years)
|
|||||||
|
|
|
|
|||||||
Outstanding,
January 1, 2008
|
2,098,502
|
$
|
9.41
|
7.7
|
||||||
Granted
|
3,014,000
|
$
|
0.25
|
10.0
|
||||||
Cancelled
|
--
|
$
|
--
|
--
|
||||||
Exercised
|
--
|
--
|
--
|
|||||||
Outstanding
March 31, 2008
|
5,112,502
|
$
|
4.01
|
8.1
|
|
|
Weighted
|
|||||
|
|
Average
|
|||||
|
|
Grant
Date
|
|||||
|
Shares
|
Fair
Value
|
|||||
|
|
|
|||||
Non-vested,
January 1, 2008
|
173,330
|
$
|
.80
|
||||
Granted
|
3,014,000
|
$
|
.11
|
||||
Cancelled
|
--
|
--
|
|||||
Vested
|
1,134,999
|
$
|
.15
|
||||
Exercised
|
--
|
--
|
|||||
Non-vested,
March 31, 2008
|
2,052,331
|
$
|
.15
|
Number
of Shares
|
Warrant
Exercise
|
Warrant
|
||||
To
be Purchased
|
Price
per Share
|
Expiration
Date
|
||||
15,569
|
|
$
|
6.64
|
|
|
March
31, 2010
|
816,691
|
|
$
|
4.98
|
|
|
June
30, 2011
|
2,100,000
|
|
$
|
2.00
|
|
|
June
30, 2011
|
339,954
|
|
$
|
2.00
|
|
|
September
30, 2011
|
52,
080
|
$
|
2.00
|
July
31, 2011
|
|||
400,000
|
$
|
2.00
|
October
31, 2011
|
|||
240,125
|
$
|
2.00
|
October
24, 2016
|
Number
of
|
|
Warrant
Exercise
|
|
|
Warrant
|
|
Shares
to be
|
|
Price
per
|
|
|
Expiration
|
|
Purchased
|
|
Preferred
Share
|
|
|
Date
|
|
525,000
|
|
$
|
1.00
|
|
|
June
30, 2011
|
Number
|
Description
|
|
|
|
|
31.1
|
Certification
of Al Kraus, Chief Executive Officer of the Registrant, pursuant
to Rules
13a-14(a) and 15(d)-14(a) of the Securities Exchange Act of
1934
|
|
|
|
|
31.2
|
Certification
of David Lamadrid, Chief Financial Officer of the Registrant, pursuant
to
Rules 13a-14(a) and 15(d)-14(a) of the Securities Exchange Act
of
1934
|
|
|
|
|
32.1
|
Certification
of Al Kraus, Chief Executive Officer of the Registrant, pursuant
to Rules
13a-14(B) and 15(d)-14(b) of the Securities Exchange Act of
1934
|
|
|
|
|
32.2
|
Certification
of David Lamadrid, Chief Financial Officer of the Registrant, pursuant
to
Rules 13a-14(B) and 15(d)-14(b) of the Securities Exchange Act
of
1934
|
MEDASORB
TECHNOLOGIES CORPORATION
|
||
|
|
|
Dated: May 15, 2008 | By: | /s/ David Lamadrid |
Name: David Lamadrid |
||
Title: Chief Financial Officer | ||
(On
behalf of the registrant and as
principal
accounting officer)
|
||
Number
|
Description
|
|
|
|
|
31.1
|
Certification
of Al Kraus, Chief Executive Officer of the Registrant, pursuant
to Rules
13a-14(a) and 15(d)-14(a) of the Securities Exchange Act of
1934
|
|
|
|
|
31.2
|
Certification
of David Lamadrid, Chief Financial Officer of the Registrant, pursuant
to
Rules 13a-14(a) and 15(d)-14(a) of the Securities Exchange Act
of
1934
|
|
|
|
|
32.1
|
Certification
of Al Kraus, Chief Executive Officer of the Registrant, pursuant
to Rules
13a-14(B) and 15(d)-14(b) of the Securities Exchange Act of
1934
|
|
|
|
|
32.2
|
Certification
of David Lamadrid, Chief Financial Officer of the Registrant, pursuant
to
Rules 13a-14(B) and 15(d)-14(b) of the Securities Exchange Act
of
1934
|