x
|
ANNUAL
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For
the fiscal year ended December 31, 2008
|
|
o
|
TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
Delaware
|
20-4121393
|
|
(State
or Other Jurisdiction of
|
(I.R.S.
Employer
|
|
Incorporation
or Organization)
|
Identification
No.)
|
Large
Accelerated Filer ¨
|
Accelerated
Filer ¨
|
Non-Accelerated
Filer ¨
|
Smaller
reporting company x
|
Common
Stock
|
31,520,186
|
Page
|
||
PART
I
|
||
Item
1. Business
|
1
|
|
Item
2. Properties
|
14
|
|
Item
3. Legal Proceedings
|
14
|
|
Item
4. Submission of Matters to a Vote of Security Holders
|
14
|
|
PART
II
|
||
Item
5. Market for Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
|
15
|
|
Item
6. Selected Financial Data
|
15
|
|
Item
7. Management’s Discussion and Analysis or Plan of
Operations
|
16
|
|
Item
8. Financial Statements
|
21
|
|
Item
9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosures
|
21
|
|
Item
9A(T). Controls and Procedures
|
22
|
|
PART
II
|
||
Item
10. Directors, Executive Officers and Corporate Governance
|
23
|
|
Item
11. Executive Compensation
|
25
|
|
Item
12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
|
30
|
|
Item
13. Certain Relationships and Related Transactions, and Director
Independence
|
31
|
|
Item
14. Principal Accountant Fees and Services
|
32
|
|
PART
III
|
||
Item
15. Exhibits
|
34
|
Item
1.
|
Description
of Business
|
|
·
|
Maxiphen
– Phenylephrine and guaifenesin-based DESI regulated prescription
decongestant / expectorant tablet product line for cough and cold offering
five products with varying dosage strengths and ingredient
combinations. Several formulations contain dextromethorphan and
chlorpheniramine.
|
|
·
|
Maxifed
– Pseudoephedrine and guaifenesin-based DESI regulated prescription
decongestant / expectorant tablet product line for cough and cold offering
four products with varying dosage strengths and ingredient combinations.
Several formulations contain
dextromethorphan.
|
|
·
|
Maxi-Tuss
– Hydrocodone-based DESI regulated prescription antitussive product line
offering three products with varying dosage strengths and active
ingredients. Certain formulations contain guaifenesin, phenylephrine and
chlorpheniramine.
|
|
·
|
Allfen
– Guaifenesin-based DESI regulated prescription expectorant product line
offering three products with varying dosage strengths and active
ingredients. Certain formulations contain dextromethorphan and
carbetapentane.
|
|
·
|
Promacet
– FDA approved prescription tablet containing butalbital and acetaminophen
for the relief of moderate to moderately severe
pain.
|
|
·
|
Maxinate
– DESI regulated and patented prescription pre-natal vitamin containing
DHA and choline.
|
|
·
|
Time-Hist
– Pseudoephedrine-based DESI regulated prescription decongestant /
antihistamine / antispasmodic tablet with pseudoephedrine,
chlorpheniramine and
methscopolamine.
|
|
·
|
Ambifed
– Pseudoephedrine and guaifenesin-based DESI regulated prescription
decongestant / expectorant tablet product line for cough and cold
treatment. This product line offers two products with varying
dosage strengths and ingredient
combinations.
|
|
·
|
Drug
Enforcement Administration: Controlled Substance Registration
Certificate
|
|
§
|
Schedules
3, 3N, 4
|
|
·
|
Drug
Enforcement Administration: Domestic Chemical Diversion Control
Registration Certificate
|
|
·
|
State
of Florida Department of Health – Drugs, Devices, and
Cosmetics
|
|
·
|
Complimentary
Drug Distributor and Prescription Drug
Wholesaler
|
Largest
Customers
|
||
MCR
|
AMBI
|
|
Cardinal Health,
Inc.
|
32%
|
78%
|
McKesson
Corporation
|
52%
|
*
|
AmeriSourceBergen Corp.
|
7%
|
*
|
North Carolina
Mutual
|
*
|
8%
|
Name
|
Age
|
Position
|
||
David
Ambrose
|
42
|
President,
Chief Executive Officer and Director
|
||
David
Barrett
|
33
|
Chief
Financial Officer
|
||
Gary
Dutton
|
35
|
Chief
Operating Officer and
Director
|
·
|
the number of potential products
in development;
|
·
|
costs of developing sales,
marketing and distribution channels and the Company’s ability to sell its
drugs;
|
·
|
competing technological and
market developments;
|
·
|
market acceptance of the
Company’s products; and
|
·
|
costs for recruiting and
retaining management, employees and
consultants.
|
·
|
reformulation of the
product;
|
·
|
additional
testing;
|
·
|
clinical trials;
or
|
·
|
changes in the labeling or
marketing of the product.
|
·
|
controls on healthcare spending
through limitations on the growth of private health insurance premiums and
Medicare and Medicaid
spending;
|
·
|
the increased use of managed care
contractors by government payors;
and
|
·
|
price controls on pharmaceutical
products.
|
•
|
Difficulties in integrating the
operations, technologies, products and personnel of the acquired
companies;
|
•
|
Diversion of management’s
attention from normal daily operations of the business;
|
•
|
Difficulties in entering markets
in which the Company has no or limited direct prior experience and where
competitors in such markets have stronger market positions;
|
•
|
Initial dependence on unfamiliar
partners;
|
•
|
Insufficient revenues to offset
increased expenses associated with acquisitions; and
|
•
|
The potential loss of key
employees of the acquired
companies.
|
•
|
Issue common stock that would
dilute the Company’s current shareholders’ percentage
ownership;
|
•
|
Assume
liabilities;
|
•
|
Record goodwill and
non-amortizable intangible assets that will be subject to impairment
testing on a regular basis and potential periodic impairment
charges;
|
•
|
Incur amortization expenses
related to certain intangible
assets;
|
•
|
Incur large and immediate
write-offs, and restructuring and other related expenses; or
|
•
|
Become subject to
litigation.
|
·
|
seasonality of sales of cough,
cold and allergy products;
|
·
|
demand for and market acceptance
of the Company’s products;
|
·
|
insufficient demand in the
marketplace causing the Company’s distributors to return
product;
|
·
|
the development of new
competitive products by
others;
|
·
|
changes in treatment practices of
physicians who currently prescribe the Company’s
products;
|
·
|
the timing, release and
competitiveness of the Company’s
products;
|
·
|
the mix of products that the
Company sells during any time
period;
|
·
|
increased price
competition;
|
·
|
increased expenses, whether
related to marketing, product development, administration or otherwise;
and
|
·
|
adverse changes in the level of
economic activity in the United States and other major regions in which
the Company does business.
|
·
|
timing of market introduction of
competitive drugs;
|
·
|
lower demonstrated clinical
safety and efficacy compared to other
drugs;
|
·
|
lack of
cost-effectiveness;
|
·
|
pricing and reimbursement
policies of government and third party payors such as insurance companies,
health maintenance organizations and other health plan
administrators;
|
·
|
lack of convenience or ease of
administration;
|
·
|
prevalence and severity of
adverse side effects;
|
·
|
other potential advantages of
alternative treatment methods;
and
|
·
|
ineffective marketing and
distribution support.
|
·
|
announcements
or developments related to the products of the Company’s
competitors;
|
·
|
quarterly
variations in the Company’s operating
expenses;
|
·
|
issuances
or sales of capital stock by the Company;
and
|
·
|
sales
of the common stock by the Company’s founders or other selling
stockholders.
|
Item
2.
|
Description
of Property.
|
Item
3.
|
Legal
Proceedings.
|
Item
4.
|
Submission
of Matters to a Vote of Security
Holders.
|
Item
5.
|
Market
for Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
|
Bid Price Per Share
|
||||||||
High
|
Low
|
|||||||
January
2007 - March 2007
|
$ | 7.25 | $ | 4.75 | ||||
April
2007 – June 2007
|
$ | 8.15 | $ | 5.82 | ||||
July
2007 – September 2007
|
$ | 6.47 | $ | 4.25 | ||||
October
2007 – December 2007
|
$ | 5.50 | $ | 3.01 | ||||
January
2008 – March 2008
|
$ | 4.40 | $ | 0.40 | ||||
April
2008 – June 2008
|
$ | 0.51 | $ | 0.22 | ||||
July
2008 – September 2008
|
$ | 0.45 | $ | 0.20 | ||||
October
2008 – December 2008
|
$ | 0.20 | $ | 0.04 |
Item
6.
|
Selected
Financial Data
|
Item
7.
|
Management’s
Discussion and Analysis or Plan of
Operation
|
For
the twelve-month
|
||||||||||||||||
period
ended
|
||||||||||||||||
December 31
|
2008
vs 2007
|
2008
vs 2007
|
||||||||||||||
2008
|
2007
|
($)
|
(%)
|
|||||||||||||
Revenues
|
$ | 4,129,612 | $ | 458,870 | $ | 3,670,742 | 800 | % | ||||||||
Cost
of goods sold
|
1,827,160 | 215,854 | 1,611,306 | 746 | % | |||||||||||
Gross
Profit
|
2,302,452 | 243,016 | 2,059,436 | 847 | % | |||||||||||
Operating
expenses:
|
||||||||||||||||
Selling,
general & administrative expenses
|
5,788,983 | 2,561,402 | 3,227,581 | 126 | % | |||||||||||
Research
& development costs
|
1,549,879 | 3,523,954 | (1,974,075 | ) | -56 | % | ||||||||||
Share
Based Compenssation
|
5,331,308 | 2,427,904 | 2,903,404 | 120 | % | |||||||||||
Amortization
of Deferred comp
|
589,874 | 242,447 | 347,427 | 143 | % | |||||||||||
Registration
Rights payments
|
0 | 490,550 | (490,550 | ) | -100 | % | ||||||||||
Total
operating expenses
|
13,260,044 | 9,246,257 | 4,013,787 | 43 | % | |||||||||||
Operating
loss
|
(10,957,592 | ) | (9,003,241 | ) | (1,954,351 | ) | 22 | % | ||||||||
Other
income (expense):
|
||||||||||||||||
Interest
income (expense)
|
(143,616 | ) | 206,804 | (350,420 | ) | -169 | % | |||||||||
Forgiveness
of debt
|
375,338 | 0 | 375,338 |
NM
|
||||||||||||
Net
loss
|
(10,725,870 | ) | (8,796,437 | ) | (1,929,433 | ) | 22 | % |
·
|
Net loss of approximately $10.7
million, adjusted for share-based payments aggregating $5.3 million and
the amortization of intangible assets acquired pursuant to the MCR and
AMBI acquisition amounting to approximately $0.6
million;
|
·
|
An increase in accounts
receivable of approximately $1.25 million which is primarily due to sales
of products sold in late November and early December 2008
;
|
·
|
A decrease in accounts payable of
approximately $0.3 million;
and
|
·
|
An increase in inventory of
approximately $0.1 million
|
Item
8.
|
Financial
Statements
|
Item
9.
|
Changes
in and Disagreements With Accountants on Accounting and Financial
Disclosure
|
Item
9A.
|
Controls
and Procedures
|
Item
9B.
|
Other
Information
|
Item
10.
|
Directors,
Executive Officers and Corporate
Governance
|
Name
|
Age
|
Position
|
David
Ambrose
|
42
|
President,
Chief Executive Officer and Director
|
David
Barrett
|
33
|
Chief
Financial Officer
|
Gary
Dutton
|
35
|
Chief
Operating Officer and Director
|
John
Abernathy
|
71
|
Director
|
Mark
Auerbach
|
70
|
Director
|
David
Dantzker
|
65
|
Director
|
Kevin
Esval
|
45
|
Director
|
Reuben
Seltzer
|
52
|
Director
|
·
|
Philip J.
Young filed one late report on Form 3 to report his initial
ownership;
|
·
|
Kevin
Esval filed one late report on Form 3 to report his initial
ownership;
|
·
|
John
Abernathy filed one late report on Form 4 in respect of one
transaction;
|
·
|
Mark
Auerbach filed one late report on Form 4 in respect of one
transaction;
|
·
|
Matthew
Colpoys filed one late report on Form 4 in respect of one
transaction;
|
·
|
David
Dantzker filed two late reports on Form 4 in respect of ten
transactions;
|
·
|
Gary E.
Dutton, Jr. filed one late report on Form 4 in respect of two
transactions ;
|
·
|
Reuben
Seltzer filed one late report on Form 4 in respect of five
transactions;
|
·
|
Alan
Kestenbaum filed one late report on Form 5 in respect of one
transaction.
|
Name
and
Principal
Position (a)
|
Year
(b)
|
Salary
($)
(c)
|
Stock
Awards
(1)
($)
(e)
|
Option
Awards
(1)
($)
(f)
|
Total
($)
(j)
|
|||||||||||
Gary
Shearman (2)
Former
President, Chief Executive Officer and Director
|
2008
2007
|
479,018
159,375
|
—
—
|
1,351,027
820,266
|
1,830,045
979,641
|
|||||||||||
Matt
Colpoys (3)
Former
President, Chief Executive Officer and Director
|
2008
2007
|
130,833
—
|
—
—
|
292,487
—
|
423,320
—
|
|||||||||||
David
J. Barrett (4)
Chief
Financial Officer
|
2008
2007
|
300,750
212,700
|
140,800
39,063
|
244,202
374,936
|
685,752
626,699
|
Option
Awards
|
Stock
Awards
|
|||||||||||||||||||||||||||
Name (a)
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
(b)
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
(c)
|
Equity
Incentive
Plan
Awards:
Number
of
Securities
Underlying
Unexercised
Unearned
Options
(#)
(d)
|
Option
Exercise
Price
($)
(e)
|
Option
Expiration
Date
(f)
|
Number
of
Shares
Or
Units That Have Not Vested
(#)
(g)
|
Market
Value of
Shares
Or
Units That Have Not Vested
($)
(h)
|
|||||||||||||||||||||
Matt
Colpoys (1)
|
500,000 | 1,500,000 | 2.00 |
6/6/2020
|
||||||||||||||||||||||||
David
Barrett (2)
|
60,000 | 40,000 | 7.97 |
6/26/2016
|
||||||||||||||||||||||||
6,250 | 18,750 | 3.88 |
12/07/2017
|
|||||||||||||||||||||||||
37,500 | $ | 5,625 | ||||||||||||||||||||||||||
120,000 | $ | 18,000 |
Name
|
Fees
Earned
or
Paid in Cash
($)
|
Option
Awards
(1)
($)
|
All
Other
Compensation
($)
|
Total
($)
|
|||||||||
Mark
Auerbach (2)
|
—
|
947,822
|
140,800
|
1,088,622
|
|||||||||
John
Abernathy (3)
|
—
|
160,363
|
70,400
|
230,763
|
|||||||||
David
Dantzker (4)
|
—
|
142,843
|
70,400
|
213,243
|
|||||||||
Kevin
Esval (5)
|
—
|
10,592
|
—
|
10,592
|
Item
12.
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
|
Number
of securities to be
issued
upon exercise of
outstanding
options, warrants
and
rights
|
Weighted-average
exercise
price
of outstanding options,
warrants
and rights
|
Number
of securities remaining
available
for future issuance
under
equity compensation
plans
(excluding securities
reflected
in column (a))
|
||||
(a)
|
(b)
|
(c)
|
||||
Equity
compensation plans approved by security holders (1)
|
1,312,043
|
$
|
2.85
|
1,437,957
|
||
Equity
compensation plans not approved by security holders (2)
|
4,000,000
|
$
|
2.00
|
1,825,000
|
||
Total
|
5,312,043
|
$
|
3,262,957
|
Stockholder
|
Number
of Shares of
Common
Stock
Beneficially
Owned at
April
27, 2009 (1)
|
Percentage
of
Shares
Beneficially
Owned
(1)
|
||||||
5%
or Greater Stockholders
|
||||||||
David
Ambrose
|
30,363,763 | (2) | 50.2 | % | ||||
Wheatley
New York Partners, LP (3)
|
3,167,857 | (4) | 9.8 | % | ||||
Wheatley
MedTech Partners, L.P. (3)
|
2,169,592 | (5) | 6.8 | % | ||||
Alan
Kestenbaum
|
2,007,008 | (6) | 6.4 | % | ||||
Directors
and Executive Officers:
|
||||||||
John
D. Abernathy, Director
|
724,217 | (8) | 2.3 | % | ||||
Mark
Auerbach, Director
|
1,897,416 | (9) | 5.9 | % | ||||
David
J. Barrett, Chief Financial Officer
|
587,778 | (10) | 1.9 | % | ||||
David
Dantzker, Director
|
230,647 | (11) | * | |||||
Gary
Dutton, Director
|
43,333 | (12) | * | |||||
Kevin
Esval, Director
|
50,000 | (13) | * | |||||
Reuben
Seltzer, Director
|
1,706,047 | (14) | 5.4 | % | ||||
All
directors and executive officers as a group (8
individuals)
|
35,603,201 | (16) | 57.8 | % |
Item
13.
|
Certain
Relationships and Related Transactions, and Director
Independence
|
Item
14.
|
Principal
Accountant Fees and
Services
|
2008
|
2007
|
|||||||
Audit
Fees
|
$ | 46,000 | $ | 28,000 | ||||
Audit
Related Fees
|
$ | 28,500 | $ | -- | ||||
Tax
Fees
|
$ | 10,921 | $ | 6,000 | ||||
All
Other Fees
|
$ | 22,048 | $ | 9,000 |
Item 15.
|
Exhibits
|
Exhibit
|
Incorporated
by Reference
|
Filed
|
||||||||
Number
|
Exhibit
Description
|
Form
|
Exhibit
|
Filing Date
|
Herewith
|
|||||
2.1
|
Agreement
and Plan of Merger, dated January 17, 2006, between Northern Way
Resources, Inc., a Nevada corporation and Northern Way Resources, Inc., a
Delaware corporation
|
8-K
|
2.1
|
1/23/06
|
||||||
2.2
|
Certificate
of Ownership and Merger merging Northern Way Resources, Inc., a Nevada
corporation into Northern Way Resources, Inc., a Delaware
corporation
|
8-K
|
2.2
|
1/23/06
|
||||||
2.3
|
Articles
of Merger merging Northern Way Resources, Inc., a Nevada corporation into
Northern Way Resources, Inc., a Delaware corporation
|
8-K
|
2.3
|
1/23/06
|
||||||
2.4
|
Agreement
of Merger and Plan of Reorganization, dated as of January 24, 2006, by and
among Neurotech Pharmaceuticals, Inc., Marco Hi-Tech JV Ltd., and Marco
Acquisition I, Inc.
|
8-K
|
2.1
|
1/30/06
|
||||||
2.5
|
Agreement
and Plan of Merger, dated as of November 16, 2006, by and among
Neuro-Hitech, Inc., QA Acquisition Corp., QA Merger LLC, Q-RNA, Inc., and
Dr. David Dantzker, as the Representative of the Q-RNA, Inc. security
holders.
|
8-K
|
2.1
|
12/5/06
|
||||||
2.6
|
Agreement
and Plan of Merger, dated as of June 5, 2008, by and among Neuro-Hitech,
Inc., GKI Acquisition Sub, Inc., GKI Acquisition Corporation and Timothy
J. Ryan, Matthew Colpoys, Jr. and Philip J. Young.
|
8-K
|
2.1
|
6/11/08
|
||||||
2.7
|
Amended
and Restated Stock Purchase Agreement, dated as of June 6, 2008, by and
among, Neuro-Hitech, Inc., GKI Acquisition Corporation, and David
Ambrose.
|
8-K
|
2.2
|
6/11/08
|
||||||
2.8
|
Modification
Agreement and Release by and among the Company, TG United Pharmaceuticals,
Inc. and David Ambrose
|
10-Q
|
2.1
|
11/19/08
|
||||||
3.1
|
Certificate
of Incorporation of Neurotech Pharmaceuticals, Inc.
|
8-K
|
3.1
|
1/23/06
|
||||||
3.2
|
Certificate
of Merger of Marco Acquisition I, Inc. with and into Marco Hi-Tech JV
Ltd.
|
8-K
|
3.5
|
1/30/06
|
3.3
|
Certificate
of Merger of Marco Acquisition I, Inc. with and into Marco Hi-Tech JV
Ltd.
|
8-K
|
3.6
|
1/30/06
|
||||||
3.4
|
Certificate
of Amendment of Certificate of Incorporation of Neurotech Pharmaceuticals,
Inc., changing name to Neuro-Hitech Pharmaceuticals, Inc.
|
8-K
|
3.7
|
1/30/06
|
||||||
3.5
|
Certificate
of Ownership and Merger effective August 11, 2006
|
8-K
|
3.1
|
8/11/06
|
||||||
3.6
|
By-laws
of the Company
|
8-K
|
3.2
|
1/23/06
|
||||||
3.7
|
Certificate
of Designation of Series A Preferred Stock
|
10-Q
|
3.1
|
11/19/08
|
||||||
3.8
|
Certificate
of Designation of Series B Preferred Stock
|
10-Q
|
3.2
|
11/19/08
|
||||||
4.1
|
Form
of Common Stock Purchase Warrant Certificate
|
8-K
|
4.1
|
1/30/06
|
||||||
4.2
|
Form
of Marco Hi-Tech JV Ltd. Registration Rights Agreement
|
8-K
|
10.4
|
1/30/06
|
||||||
4.3
|
Registration
Rights Agreement, dated as of November 29, 2006, by and among
Neuro-Hitech, Inc. and David Dantzker as the Representative of the Q-RNA,
Inc. security holders
|
8-K
|
4.1
|
12/5/06
|
||||||
4.4
|
Registration
Rights Agreement, dated as of November 29, 2006, by and among
Neuro-Hitech, Inc. and individuals and entities that are parties to the
Securities Purchase Agreement dated as of November 16,
2006
|
8-K
|
4.2
|
12/5/06
|
||||||
4.5
|
Form
of $13 Warrant issued pursuant to the Merger.
|
8-K
|
4.3
|
12/5/06
|
||||||
4.6
|
Form
of $18 Warrant issued pursuant to the Merger.
|
8-K
|
4.4
|
12/5/06
|
||||||
4.7
|
Form
of Warrant issued in connection with private offering
|
8-K
|
4.5
|
12/5/06
|
||||||
4.8
|
Stock
and Warrant Purchase Agreement, dated as of November 29, 2007, by and
among Neuro-Hitech, Inc. and the investors identified
therein
|
8-K
|
4.1
|
12/19/07
|
||||||
4.9
|
Registration
Rights Agreement, dated as of November 29, 2007, by and among
Neuro-Hitech, Inc. and the investors identified therein
|
8-K
|
4.2
|
12/19/07
|
4.10
|
Form
of Warrant issued in connection with private offering
|
8-K
|
4.3
|
12/19/07
|
||||||
4.11
|
Registration
Rights Agreement, dated as of November 18, 2008, by and between
Neuro-Hitech, Inc. and David Ambrose
|
10-Q
|
4.1
|
11/19/08
|
||||||
10.1
|
Neurotech
Pharmaceuticals, Inc. 2006 Incentive Stock Plan
|
8-K
|
10.1
|
1/30/06
|
||||||
10.2
|
Neurotech
Pharmaceuticals, Inc. 2006 Non-Employee Directors Stock Option
Plan
|
8-K
|
10.2
|
1/30/06
|
||||||
10.3
|
Form
of Private Placement Subscription Agreement
|
8-K
|
10.3
|
1/30/06
|
||||||
10.4
|
Securities
Purchase Agreement, dated January 5, 2006, by and between Marco Hi-Tech JV
Ltd. and the investors signatory thereto
|
8-K
|
10.5
|
1/30/06
|
||||||
10.5
|
Director
and Officer Indemnification Agreement dated January 24, 2006, between
Neurotech Pharmaceuticals, Inc. and Reuben Seltzer
|
8-K
|
10.6
|
1/30/06
|
||||||
10.6
|
Director
and Officer Indemnification Agreement dated January 24, 2006, between
Neurotech Pharmaceuticals, Inc. and John Abernathy
|
8-K
|
10.8
|
1/30/06
|
||||||
10.7
|
Director
and Officer Indemnification Agreement dated January 24, 2006, between
Neurotech Pharmaceuticals, Inc. and Mark Auerbach
|
8-K
|
10.9
|
1/30/06
|
||||||
10.8
|
Technology
License Contract, dated as of June 1, 1997, by and between Mayo Foundation
for Medical Education and Research and Marco Hi-Tech JV
Ltd.
|
8-K
|
10.12
|
1/30/06
|
||||||
10.9
|
Clinical
Research Agreement, dated March 1, 2002, by and between Georgetown
University and Marco Hi-Tech JV Ltd.
|
8-K
|
10.13
|
1/30/06
|
||||||
10.10
|
Offer
Letter, dated January 6, 2006, to John Abernathy from Marco Hi-Tech JV
Ltd.
|
8-K
|
10.14
|
1/30/06
|
||||||
10.11
|
Offer
Letter, dated January 5, 2006, to Mark Auerbach from Marco Hi-Tech JV
Ltd.
|
8-K
|
10.15
|
1/30/06
|
10.12
|
Development
Agreement dated February 1, 2006, between the Company and Org Syn
Laboratory, Inc
|
10-QSB
|
10.1
|
5/15/06
|
||||||
10.13
|
Development
Agreement dated March 15, 2006, between the Company and Xel
Herbaceuticals, Inc
|
10-QSB
|
10.2
|
5/15/06
|
||||||
10.14
|
Securities
Purchase Agreement, dated as of November 16, 2006, by and among
Neuro-Hitech, Inc. and the investors identified therein.
|
8-K
|
2.2
|
12/5/06
|
||||||
10.15
|
Amendment
No. 1 to 2006 Incentive Stock Plan
|
8-K
|
4.6
|
12/5/06
|
||||||
10.16
|
Amendment
No. 2 to 2006 Incentive Stock Plan
|
8-K
|
4.7
|
12/5/06
|
||||||
10.17
|
Consultant
Agreement, dated as of November 29, 2006, by and between Neuro-Hitech,
Inc., and D.F. Weaver Medical, Inc., Donald F. Weaver, Principal
Consultant.
|
8-K
|
10.1
|
12/5/06
|
||||||
10.18
|
2002
Q-RNA, Inc. Stock Incentive Plan
|
S-8
|
10.1
|
12/13/06
|
||||||
10.19
|
2006
Stock Incentive Plan
|
DEF
14A
|
6/05/07
|
|||||||
10.20
|
Non-Management
Directors Deferral Program
|
10-QSB
|
10.2
|
8/08/07
|
||||||
10.21
|
Officers
Deferral Program
|
10-QSB
|
10.3
|
8/08/07
|
||||||
10.22
|
Employment
Agreement, dated August 22, 2007, between Neuro-Hitech, Inc. and Gary
Shearman
|
8-K
|
10.1
|
8/29/07
|
||||||
10.23
|
Employment
Agreement, dated December 7, 2007, between Neuro-Hitech, Inc. and David
Barrett
|
8-K
|
10.1
|
12/11/07
|
||||||
10.24
|
Securities
Purchase Agreement, dated as of June 6, 2008, by and among Neuro-Hitech,
Inc. and each of the investors identified therein.
|
8-K
|
10.1
|
6/11/08
|
||||||
10.25
|
Consulting
Agreement, dated as of June 6, 2008, by and among Neuro-Hitech, Inc. and
David Ambrose.
|
8-K
|
10.2
|
6/11/08
|
||||||
10.26
|
Resignation
Agreement and Mutual Release, dated as of June 5, 2008, by and among
Neuro-Hitech, Inc. and Gary T. Shearman.
|
8-K
|
10.3
|
6/11/08
|
10.27
|
Employment
Agreement between NHI and Matthew E. Colpoys, dated June 6,
2008.
|
8-K
|
10.4
|
6/11/08
|
||||||
10.28
|
Manufacturing
and Distribution Agreement, effective June 6, 2008, between TG United
Pharmaceuticals, Inc. and Neuro-Hitech, Inc.*
|
10-Q
|
10.5
|
8/12/08
|
||||||
14.1
|
Code
of Ethics
|
10-KSB
|
14.1
|
3/31/06
|
||||||
16.1
|
Letter
of MSPC, Certified Public Accountants and Advisors, a Professional
Corporation, dated July 11, 2008, regarding change in independent
registered public accounting firm.
|
8-K
|
16.1
|
7/11/08
|
||||||
21.1
|
Subsidiaries
|
10-K
|
21.1
|
3/31/09
|
|
|||||
|
||||||||||
31.1
|
Certification
of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
X
|
||||||||
31.2
|
Certification
of the Chief Financial Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
X
|
||||||||
32.1
|
Certification
of the Chief Executive Officer and Chief Financial Officer Pursuant to 18
U.S.C. 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002
|
X
|
Page
|
||
Report
of Independent Registered Public Accounting Firm
|
F-1
|
|
Consolidated
Balance Sheets as of December 31, 2008 and 2007
|
F-3
|
|
Consolidated
Statements of Operations for the Years Ended December 31, 2008 and
2007
|
F-4
|
|
Consolidated
Statements of Changes in Stockholders’ Equity for the Years Ended December
31, 2008 and 2007
|
F-5
|
|
Consolidated
Statements of Cash Flows for the Years Ended December 31, 2008 and
2007
|
F-6
|
|
Notes
to the Consolidated Financial Statements
|
F-7
|
1900
NW Corporate Blvd., East Suite 210
Boca
Raton, Florida 33431
Tel.
561-886-4200
Fax.
561-886-3330
e-mail:info@sherbcpa.com
Offices
in New York and
Florida
|
/s/ Sherb & Co., LLP
|
||
Certified
Public Accountants
|
||
March
24, 2009
|
/s/ MSPC
|
|
Certified
Public Accountants and Advisors,
|
|
A
Professional
Corporation
|
December 31, 2008
|
December 31, 2007
|
|||||||
ASSETS:
|
||||||||
Current
Assets:
|
||||||||
Cash
and Cash Equivalents
|
$ | 397,147 | $ | 6,137,592 | ||||
Accounts
Receivable
|
1,310,852 | 63,300 | ||||||
Inventory
|
326,946 | 33,821 | ||||||
Prepaid
Inventory
|
1,025,059 | |||||||
Prepaid
Expenses
|
38,054 | 11,861 | ||||||
Total
Current Assets
|
3,098,058 | 6,246,574 | ||||||
Property
and Equipment, net
|
9,472 | 4,248 | ||||||
Other
Assets:
|
||||||||
Security
Deposit
|
- | 13,226 | ||||||
Intangible
Asset, net
|
6,021,751 | - | ||||||
Total
assets
|
$ | 9,129,281 | $ | 6,264,048 | ||||
LIABILITIES
AND STOCKHOLDERS' EQUITY:
|
||||||||
Current
Liabilities:
|
||||||||
Accounts
payable and accrued expenses
|
$ | 830,588 | $ | 1,000,399 | ||||
Accrued
Returns and Chargebacks
|
408,307 | |||||||
Total
current liabilities
|
1,238,895 | 1,000,399 | ||||||
Stockholders'
Equity:
|
||||||||
Preferred
stock, $.001 par value, 5,000,000 shares authorized:
|
||||||||
Series
A Preferred Stock,1,500,000 issued and outstanding at
December 31, 2008
|
1,500 | - | ||||||
Series
B Preferred Stock,1,397,463 issued and outstanding at
December 31, 2008
|
1,397 | - | ||||||
Common
stock, $.001 par value, 44,999,990 shares authorized, 31,520,186 and
14,004,853 issued and outstanding at December 31, 2008 and December 31,
2007, respectively
|
31,520 | 14,005 | ||||||
Subscriptions
receivable
|
(15,000 | ) | - | |||||
Deferred
Compensation
|
(15,936 | ) | (1,190,654 | ) | ||||
Additional
paid-in capital
|
51,443,428 | 39,270,951 | ||||||
Accumulated
deficit
|
(43,556,523 | ) | (32,830,653 | ) | ||||
Total
stockholders' equity
|
7,890,386 | 5,263,649 | ||||||
Total
liabilities and stockholders' equity
|
$ | 9,129,281 | $ | 6,264,048 |
Years Ended December 31,
|
||||||||
2008
|
2007
|
|||||||
Sales
|
$ | 4,129,612 | $ | 458,870 | ||||
Cost
of Goods Sold
|
1,827,160 | 215,854 | ||||||
Gross
Profit
|
2,302,452 | 243,016 | ||||||
Operating
Expenses:
|
||||||||
Selling,
General and Administrative Expenses
|
5,788,983 | 2,561,402 | ||||||
Research
and Development Costs
|
1,549,879 | 3,523,954 | ||||||
Share-Based
Compensation
|
5,331,308 | 2,427,904 | ||||||
Amortization
of Intangibles
|
589,874 | 242,447 | ||||||
Registration
Payment Arrangement
|
- | 490,550 | ||||||
Total
Operating Expenses
|
13,260,044 | 9,246,257 | ||||||
(Loss)
from Operations
|
(10,957,592 | ) | (9,003,241 | ) | ||||
Other
Income:
|
||||||||
Forgiveness
of Debt
|
375,338 | - | ||||||
Interest
and Dividend Income
|
21,150 | 206,804 | ||||||
Interest
Expense
|
(164,766 | ) | - | |||||
Total
Other Income
|
231,722 | 206,804 | ||||||
(Loss)
Before Provision for IncomeTaxes
|
(10,725,870 | ) | (8,796,437 | ) | ||||
Provision
for Income Taxes
|
- | - | ||||||
Net
(Loss)
|
$ | (10,725,870 | ) | $ | (8,796,437 | ) | ||
Basic
and Diluted (Loss) per Weighted Average Common Shares
Outstanding
|
$ | (0.45 | ) | $ | (0.71 | ) | ||
Weighted
Average - Common Shares Outstanding
|
23,910,380 | 12,351,746 |
Class
A -
Common
Stock
|
Preffered
Stock
|
Common
Stock
|
Additional
Paid-
In
Capital
|
Subscription
Receivable
|
Deferred
Compensation
|
Accumulated Deficit
|
||||||||||||||||||||||||||||||||||||||
Shares
|
Amount
|
Class
A
|
Class
B
|
Shares
|
Amount
|
(Deficit)
|
(Deficit)
|
Totals
|
||||||||||||||||||||||||||||||||||||
Balance
as of December 31, 2006
|
100 | $ | - | 11,855,135 | $ | 11,855 | $ | 28,891,967 | $ | (1,178,147 | ) | $ | (24,034,216 | ) | $ | 3,691,459 | ||||||||||||||||||||||||||||
Private
Placement of Common Stock, net of issuance costs of
$376,548
|
2,016,930 | 2,017 | 7,000,440 | 7,002,457 | ||||||||||||||||||||||||||||||||||||||||
Repurchase
of Class A Common Stock
|
(100 | ) | ||||||||||||||||||||||||||||||||||||||||||
Exercise
of Stock Options
|
12,059 | 12 | 45,812 | 45,824 | ||||||||||||||||||||||||||||||||||||||||
Share-Based
Compensation Expense
|
2,427,904 | 2,427,904 | ||||||||||||||||||||||||||||||||||||||||||
Recognition
of Common Stock or Warrants in connection with services to be
rendered
|
20,000 | 20 | 375,934 | (254,954 | ) | 121,000 | ||||||||||||||||||||||||||||||||||||||
Remeasurement
of Common Stock or Warrants in connection with services
rendered
|
38,445 | 38,445 | ||||||||||||||||||||||||||||||||||||||||||
Amortization
of Deferred Compensation
|
242,447 | 242,447 | ||||||||||||||||||||||||||||||||||||||||||
Penalty
shares issued in connection with Registration Rights
Agreement
|
100,729 | 101 | 490,449 | 490,550 | ||||||||||||||||||||||||||||||||||||||||
Net
(Loss)
|
(8,796,437 | ) | (8,796,437 | ) | ||||||||||||||||||||||||||||||||||||||||
Balance
as of December 31, 2007
|
- | - | 14,004,853 | 14,005 | 39,270,951 | (1,190,654 | ) | (32,830,653 | ) | 5,263,649 | ||||||||||||||||||||||||||||||||||
Private
Placement of Common Stock
|
13,172,000 | 13,172 | 3,279,828 | (15,000 | ) | 3,278,000 | ||||||||||||||||||||||||||||||||||||||
Share-Based
Compensation, net of Deferred Compensation and Stock
Grants
|
- | 4,215,976 | 4,215,976 | |||||||||||||||||||||||||||||||||||||||||
Common
Stock & Warrants Issued in connection with mergers
|
3,333,333 | 3,333 | 1,360,717 | 1,364,050 | ||||||||||||||||||||||||||||||||||||||||
Preffered
Shares Issued in connection with mergers
|
1,500 | 1,397 | 2,894,566 | 2,897,463 | ||||||||||||||||||||||||||||||||||||||||
Stock
Grants Issued on June 26, 2008
|
1,010,000 | 1,010 | 421,390 | 422,400 | ||||||||||||||||||||||||||||||||||||||||
Amortization
of Deferred Compensation
|
- | 1,174,718 | 1,174,718 | |||||||||||||||||||||||||||||||||||||||||
Net
(Loss)
|
(10,725,870 | ) | (10,725,870 | ) | ||||||||||||||||||||||||||||||||||||||||
Balance
as of December 31, 2008
|
- | - | $ | 1,500 | $ | 1,397 | 31,520,186 | $ | 31,520 | $ | 51,443,428 | $ | (15,000 | ) | $ | (15,936 | ) | $ | (43,556,523 | ) | $ | 7,890,386 |
For
The Years Ended
|
||||||||
December
31,
|
||||||||
2008
|
2007
|
|||||||
Cash
flows used in operating activities:
|
||||||||
Net
(Loss)
|
$ | (10,725,870 | ) | $ | (8,796,437 | ) | ||
Adjustments
to Reconcile Net (Loss) to Net Cash (Used In) Operating
Activities:
|
||||||||
Fair
Value of Options, Warrants, and Stock Appreciation Rights
|
4,215,976 | 2,427,904 | ||||||
Fair
Value of Shares Issued for Service
|
421,390 | |||||||
Amortization
of Deferred Compensation
|
1,174,718 | 242,447 | ||||||
Amortization
of Intangibles
|
589,874 | - | ||||||
Gain
on Sale of Net Assets
|
2,765 | - | ||||||
Registration
Payment Arrangement
|
- | 490,550 | ||||||
Depreciation
Expense
|
3,021 | 2,998 | ||||||
Other
Share-Based Selling, General and Administrative Expenses
|
- | 225,808 | ||||||
Change
in operating assets and liabilities:
|
||||||||
(Increase)
Decrease in Assets:
|
||||||||
Accounts
Receivable
|
(1,247,552 | ) | (37,500 | ) | ||||
Inventory
|
(80,253 | ) | (2,530 | ) | ||||
Prepaid
Expenses
|
206,465 | (1,166 | ) | |||||
Deferred
Charges
|
- | 93,750 | ||||||
Security
Deposits
|
13,226 | - | ||||||
Increase
(Decrease) in Liabilities:
|
||||||||
Accounts
Payable and Accrued Expenses
|
(269,813 | ) | (261,707 | ) | ||||
Deferred
revenue
|
1,393,805 | - | ||||||
Net
cash (used in) Operating activities
|
(4,302,248 | ) | (5,615,883 | ) | ||||
Cash
flows from investing activities:
|
||||||||
Business
Acquisition and Related Costs
|
||||||||
Investment
in Property and Equipment
|
(11,000 | ) | - | |||||
Cash
Used in Acquistion,net
|
(4,703,581 | ) | - | |||||
Net
cash (used in) Investing activities
|
(4,714,581 | ) | - | |||||
Cash
flows from financing activities:
|
||||||||
Net
Proceeds from Private Placement Offering of Common Stock
|
3,279,828 | 7,002,456 | ||||||
Net
Payments to Related Party
|
(3,444 | ) | ||||||
Proceeds
from the Sale of Stock
|
- | 45,824 | ||||||
Net
cash provided by Financing activities
|
3,276,384 | 7,048,280 | ||||||
Net
(decrease) increase in cash and cash equivalents
|
(5,740,445 | ) | 1,432,397 | |||||
- | ||||||||
Cash
and cash equivalents, beginning of year
|
6,137,592 | 4,705,195 | ||||||
Cash
and cash equivalents, end of year
|
$ | 397,147 | $ | 6,137,592 | ||||
Cash Paid For:
|
||||||||
Income
Taxes
|
$ | - | $ | - | ||||
Interest
|
$ | - | $ | - |
Largest
Customers
|
||||
2008
|
||||
McKesson
Corporation
|
39 | % | ||
Cardinal
Health, Inc.
|
53 | % |
Largest
Customers
|
||
MCR
|
AMBI
|
|
Cardinal Health,
Inc.
|
32%
|
78%
|
McKesson
Corporation
|
52%
|
*
|
AmeriSourceBergen Corp.
|
7%
|
*
|
North Carolina
Mutual
|
*
|
8%
|
December
31,
2008
|
December
31,
2007
|
|||||||
Options
|
5,312,043 | 2,775,319 | ||||||
Warrants
|
3,255,357 | 3,255,357 | ||||||
Preferred
Stock (if converted)
|
28,974,630 | - | ||||||
37,542,030 | 6,030,676 |
December 31,
2008
|
||||
Office
Equipment
|
$
|
11,000
|
||
Less:
Accumulated depreciation
|
1,528
|
|||
Net
Office Equipment
|
$
|
9,472
|
Pre-Modification
|
Adjustments
|
Post-Modification
|
||||||||||
Cash
|
$ | 4,492,624 | 400,000 | 4,892,624 | ||||||||
Notes
|
6,000,000 | (6,000,000 | ) | - | ||||||||
Fair
value of shares
|
1,366,666 | 2,897,463 | 4,264,130 | |||||||||
Assumption
of liabilities
|
1,518,161 | (2,403,660 | ) | (885,499 | ) | |||||||
$ | 13,377,451 | (5,106,196 | ) | 8,271,255 |
Pre-Modification
|
Adjustments
|
Post-Modification
|
||||||||||
Cash
|
$ | 189,042 | - | 189,042 | ||||||||
Inventory
|
212,872 | 1,257,717 | 1,470,589 | |||||||||
Intangible
assets
|
12,975,537 | (6,363,912 | ) | 6,611,625 | ||||||||
$ | 13,377,451 | (5,106,196 | ) | 8,271,255 |
For
the Year
Ended
December
31,
|
For
the Year
Ended
December
31,
|
|||||||
2008
|
2007
|
|||||||
Total
Revenue
|
$ | 8,084,170 | $ | 6,288,450 | ||||
Net
[Loss]
|
$ | (9,842,433 | ) | $ | (9,308,275 | ) | ||
Basic
& Diluted [Loss] Per Common Share
|
$ | (0.31 | ) | $ | (0.75 | ) |
Useful Life
(Years)
Weighted
Average
|
At December
31, 2008
|
At December
31, 2007
|
||||||||||
MCR
and AMBI Pharmaceuticals
|
4.87 | $ | 6,611,625 | $ | 0 | |||||||
$ | 6,611,625 | $ | 0 | |||||||||
Less:
accumulated amortization
|
$ | (589,874 | ) | |||||||||
$ | 6,021,751 | $ | 0 |
2009
|
$ | 1,322,325 | ||
2010
|
$ | 1,322,325 | ||
2011
|
$ | 1,322,325 | ||
2012
|
$ | 1,322,325 | ||
2013
|
$ | 732,451 | ||
$ | 6,021,751 |
·
|
Non-employee
directors of the Company and its subsidiaries are eligible to participate
in the Directors Plan. The term of the Directors Plan is ten years.
400,000 shares of common stock have been reserved for issuance under the
Directors Plan.
|
·
|
Options
may only be issued as non-qualified stock
options.
|
·
|
Stockholder
approval is required in order to replace or reprice
options.
|
·
|
The
Directors Plan is administered by a committee designated by the
board.
|
·
|
Options
shall be granted within ten years from the effective
date.
|
·
|
Upon
a “change in control” any unvested options shall vest and become
immediately exercisable.
|
Year Ended December 31,
|
Risk-Free
Interest Rate
|
Expected Term
|
Expected
Volatility
|
Expected
Dividends
|
|||||||
2008
|
3.20
|
%
|
5
|
121.0
|
%
|
None
|
|||||
2007
|
3.45
|
%
|
5
|
55.16
|
%
|
None
|
Options Outstanding as of 12/31/2008
|
Options Exercisable
|
|||||||||||||||||||||||
Exercise Price Range
|
Number of
Shares
Outstanding
|
Remaining
Contractual Life
|
Weighted Exercise PriceAverage Per Share
|
As of
12/31/2008
|
Weighted AverageExercise Price
Per Share
|
Aggregate
Intrinsic
Value
|
||||||||||||||||||
$0
to $2.50 per share
|
350,000 | 1.00 | $ | 2.50 | 350,000 | $ | 2.50 | $ | 0 |
Number of
Options
|
Weighted
Average
Exercise
Price
Per Share
|
Aggregate
Intrinsic
Value
|
||||||||||
Outstanding
at December 31, 2006
|
350,000 | 2.50 | $ | 0 | ||||||||
Granted
|
- | - | - | |||||||||
Exercised
|
- | - | - | |||||||||
Expired
|
- | - | - | |||||||||
Outstanding
at December 31, 2007
|
350,000 | 2.50 | $ | - | ||||||||
Granted
|
- | - | - | |||||||||
Exercised
|
- | - | - | |||||||||
Expired
|
- | - | - | |||||||||
Outstanding
at December 31, 2008
|
350,000 | $ | 2.50 | $ | 0 |
·
|
Company’s
officers, directors, key employees and consultants of the Company and its
subsidiaries are eligible to participate in the Incentive Plan. The term
of the Incentive Plan is ten years. 4,575,000 shares of common stock are
reserved for issuance under the Incentive
Plan.
|
·
|
Both
incentive and nonqualified stock options may be granted under the
Incentive Plan, as well as Stock Appreciation Rights, Restricted Stock,
Restricted Stock Units and Unrestricted
Stock.
|
·
|
The
Incentive Plan terminates on January 23,
2016.
|
·
|
The
Incentive Plan is administered by a committee designated by the
board.
|
Options
Outstanding as of 12/31/2008
|
Options
Exercisable
|
|||||||||||||||||||||||
Exercise
Price Range
|
Number of
Shares
Under
Option
|
Contractual
Life
|
Weighted
Average Exercise Price Per
Share
|
As of
12/31/2007
|
Weighted AverageExercise
Price
Per
Share
|
Aggregate
Intrinsic
Value
|
||||||||||||||||||
$0
to $2.50 per share
|
585,000 | 8.06 | $ | 1.21 | 280,833 | $ | 2.05 | $ | 0 | |||||||||||||||
$2.51
to $4.25 per share
|
51,940 | 8.95 | $ | 4.05 | 35,967 | $ | 4.12 | - | ||||||||||||||||
$4.26
to $6.25 per share
|
325,104 | 6.02 | $ | 5.97 | 289,680 | $ | 5.96 | - | ||||||||||||||||
962,043 | 606,480 | 0 |
Number of
Options
|
Weighted
Average
Exercise Price
Per Share
|
Aggregate
Intrinsic
Value
|
|||||
Outstanding
at December 31, 2006
|
1,240,000
|
$
|
5.07
|
||||
Granted
|
1,185,319
|
$
|
5.46
|
||||
Exercised
|
-
|
-
|
|||||
Expired
|
-
|
-
|
|||||
Outstanding
at December 31, 2007
|
2,425,319
|
$
|
5.26
|
-
|
|||
Granted
|
365,000
|
$
|
.44
|
-
|
|||
Exercised
|
-
|
-
|
-
|
||||
Expired
|
1,828,276
|
5.50
|
-
|
||||
Outstanding
at December 31, 2008
|
962,043
|
$
|
2.98
|
-
|
Options Outstanding as of
12/31/2008
|
Options
Exercisable
|
||||||||||||||
Exercise
Price Range
|
Number of
Option
|
Remaining
Contractual
Life
|
Weighted Exercise
PriceAverage Per
Share
|
As
of
12/31/2008
|
Weighted AverageExercise
Price
Per
Share
|
Aggregate
Intrinsic
Value
|
|||||||||
$0
to $2.00 per share
|
4,000,000
|
9.50
|
2.00
|
1,583,333
|
2.00
|
0
|
|||||||||
4,000,000
|
2.00
|
1,583,333
|
2.00
|
Options Outstanding as of
12/31/2008
|
Options Exercisable
|
|||||||||||||||||||
Number
of
|
Weighted
Average |
Weighted Average |
||||||||||||||||||
Shares
Under
|
Remaining
|
Exercise
Price
|
As
of
|
Exercise
Price
|
||||||||||||||||
Exercise Price Range
|
Option
|
Contractual Life
|
Per Share
|
12/31/2007
|
Per Share
|
|||||||||||||||
$0.00
to $2.50 per share
|
100,000 | 1.00 | $ | 2.50 | 100,000 | $ | 2.50 | |||||||||||||
$2.51
to $5.00 per share
|
437,500 | 2.10 | $ | 5.00 | 437,500 | $ | 5.00 | |||||||||||||
$5.01
to $7.00 per share
|
1,517,145 | 3.35 | $ | 7.05 | 1,517,145 | $ | 7.05 | |||||||||||||
*$7.01
to $13.00 per share
|
600,356 | 7.92 | $ | 13.00 | 600,356 | $ | 13.00 | |||||||||||||
*$13.01
to $18.00 per share
|
600,356 | 7.92 | $ | 18.00 | 600,356 | $ | 18.00 | |||||||||||||
3,255,357 | 3,255,357 |
Year Ended December 31,
2007
|
||||||||
Weighted
|
||||||||
Number
of
|
Average
Exercise
|
|||||||
Warrants
|
Price Per Share
|
|||||||
Beginning
of year
|
3,255,357 | $ | 9.75 | |||||
Granted
|
0 | $ | 0 | |||||
Exercised
|
- | - | ||||||
Expired
|
0 | $ | 0 | |||||
Outstanding
at end of year
|
3,255,357 | $ | 9.75 |
December 31,
|
||||||||
2008
|
2007
|
|||||||
Deferred
Tax Asset - Non-Current:
|
||||||||
Net
Operating Loss Carryforwards
|
$ | 1,246,000 | $ | 3,613,600 | ||||
Valuation
Allowance
|
(1,246,000 | ) | (3,613,600 | ) | ||||
$ | - | $ | - |
For
the Years Ended December 31,
|
2008
|
2007
|
||||||
Federal
statutory tax rate
|
-35.0 | % | -35.0 | % | ||||
Changes
to valuation allowance
|
12.0 | % | 12.9 | % | ||||
Effective
state tax rate, net of federal benefits
|
5.0 | % | 0.1 | % | ||||
Permanent
differences
|
18.0 | % | 22.0 | % | ||||
Effective
Income tax rate
|
0.00 | % | 0.00 | % |
NEURO-HITECH,
INC.
(Registrant)
|
||
Date:
April 30, 2009
|
||
/s/ David J. Barrett | ||
David
J. Barrett
Chief
Financial Officer
|