(MARK
ONE)
|
|
x |
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
|
FOR
THE FISCAL YEAR ENDED DECEMBER 31,
2005
|
o |
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
FOR
THE TRANSITION PERIOD FROM ____________ TO
____________
|
NEW
YORK
|
11-0853640
|
|
(State
or other jurisdiction of
|
(I.R.S.
Employer
|
|
Incorporation
or organization)
|
Identification
No.)
|
|
616
N. NORTH COURT, SUITE 120,
|
||
PALATINE,
ILLINOIS
|
60067
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
|
PAGE
|
||
PART
I
|
||
Item
1.
|
Business
|
1
|
Item
1A.
|
Risk
Factors
|
10
|
Item
1B.
|
Unresolved
Staff Comments
|
19
|
Item
2.
|
Properties
|
19
|
Item
3.
|
Legal
Proceedings
|
20
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
20
|
PART
II
|
||
Item
5.
|
Market
for Registrant's Common Equity and Related Stockholder Matters and
Issuer
Purchases of Equity Securities
|
20
|
Item
6.
|
Selected
Financial Data
|
21
|
Item
7.
|
Management's
Discussion and Analysis of Financial Condition and Results of
Operations
|
22
|
Item
7A.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
35
|
Item
8.
|
Financial
Statements and Supplementary Data
|
35
|
Item
9.
|
Changes
in and Disagreement with Accountants on Accounting and Financial
Disclosure
|
35
|
Item
9A.
|
Controls
and Procedures
|
35
|
Item
9B.
|
Other
Information
|
35
|
PART
III
|
||
Item
10.
|
Directors
and Executive Officers of the Registrant
|
36
|
Item
11.
|
Executive
Compensation
|
39
|
Item
12.
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
|
47
|
Item
13.
|
Certain
Relationships and Related Transactions
|
48
|
Item
14.
|
Principal
Accountant Fees and Services
|
50
|
PART
IV
|
||
Item
15.
|
Exhibits
and Financial Statement Schedules
|
51
|
Signatures
|
52
|
|
Index
to Consolidated Financial Statements
|
F-1
|
Opioid
Active Ingredients
(Generic
Names)
|
Frequently
Prescribed Opioid Analgesics
(Brand
Names)
|
Oxycodone
|
Percocet®,
Oxycontin®
|
Hydrocodone
|
Vicodin®,
Lortab®, Lorcet®
|
Morphine
|
Avinza®,
Kadian®, MSContin®
|
Hydromorphone
|
Dilaudid®,
Palladone®
|
Codeine
|
Tylenol®
with Codeine
|
Tramadol
|
Ultram®,
Ultracet®
|
Propoxyphene
|
Darvon®,
Darvocet®
|
Fentanyl
|
Duragesic®,
Actiq®
|
BID
PRICE
|
||||
PPERIOD
|
HIGH
|
LOW
|
||
2004
Fiscal Year
|
||||
First
Quarter
|
0.82
|
0.41
|
||
Second
Quarter
|
0.62
|
0.37
|
||
Third
Quarter
|
0.53
|
0.31
|
||
Fourth
Quarter
|
0.64
|
0.32
|
||
2005
Fiscal Year
|
||||
First
Quarter
|
0.70
|
0.33
|
||
Second
Quarter
|
0.81
|
0.41
|
||
Third
Quarter
|
0.73
|
0.40
|
||
Fourth
Quarter
|
1.36
|
0.27
|
||
2006
Fiscal Year
|
||||
First
Quarter (through
February 1, 2006)
|
0.50
|
0.25
|
YEARS
ENDED DECEMBER 31,
|
||||||||||||||||
2005
|
2004
|
2003
|
2002
|
2001
|
||||||||||||
(IN
THOUSANDS, EXCEPT PER SHARE DATA)
|
||||||||||||||||
OPERATING
DATA:
|
||||||||||||||||
Net
revenues
|
$
|
--
|
$
|
838
|
$
|
5,750
|
$
|
8,205
|
$
|
16,929
|
||||||
Operating
Costs
|
||||||||||||||||
Cost
of manufacturing
|
--
|
1,435
|
11,705
|
12,535
|
14,857
|
|||||||||||
Research
and development
|
6,265
|
4,130
|
1,460
|
1,517
|
1,327
|
|||||||||||
Selling,
general and Administrative expenses
|
5,296
|
5,238
|
7,903
|
7,216
|
6,616
|
|||||||||||
Plant
shutdown costs
|
--
|
--
|
1,926
|
(126
|
)
|
68
|
||||||||||
Interest
expense
|
636
|
2,962
|
6,001
|
4,728
|
3,913
|
|||||||||||
Interest
income
|
(36
|
)
|
(59
|
)
|
(25
|
)
|
(15
|
)
|
(69
|
)
|
||||||
Amortization
of debt discount and deferred private offering costs
|
--
|
72,491
|
24,771
|
12,558
|
2,591
|
|||||||||||
Loss
(gain) on extinguishments of debt
|
--
|
(12,401
|
)
|
--
|
28,415
|
--
|
||||||||||
Investment
in joint venture
|
--
|
--
|
--
|
--
|
(202
|
)
|
||||||||||
Other
(income) expense
|
(86
|
)
|
(2,962
|
)
|
464
|
966
|
(13
|
)
|
||||||||
Loss
before income tax benefit
|
(12,075
|
)
|
(69,996
|
)
|
(48,455
|
)
|
(59,589
|
)
|
(12,563
|
)
|
||||||
Income
tax benefit
|
--
|
--
|
--
|
--
|
--
|
|||||||||||
Net
loss
|
$
|
(12,075
|
)
|
$
|
(69,996
|
)
|
$
|
(48,455
|
)
|
$
|
(59,589
|
)
|
$
|
(12,563
|
)
|
|
Basic
and diluted loss per common share
|
$
|
(.18
|
)
|
$
|
(3.20
|
)
|
$
|
(2.28
|
)
|
$
|
(3.90
|
)
|
$
|
(.84
|
)
|
|
Weighted
average number of outstanding shares
|
66,573
|
21,861
|
21,227
|
15,262
|
15,021
|
DECEMBER
31,
|
||||||||||||||||
2005
|
2004
|
2003
|
2002
|
2001
|
||||||||||||
(IN
THOUSANDS)
|
||||||||||||||||
BALANCE
SHEET DATA:
|
||||||||||||||||
Working
capital (deficiency)
|
$
|
(2,478
|
)
|
$
|
2,423
|
$
|
(3,770
|
)
|
$
|
5,933
|
$
|
(8,276
|
)
|
|||
Total
assets
|
1,792
|
4,967
|
6,622
|
19,364
|
11,069
|
|||||||||||
Total
debt
|
7,613
|
5,093
|
53,142
|
25,398
|
67,321
|
|||||||||||
Total
liabilities
|
7,954
|
6,052
|
58,689
|
31,632
|
76,505
|
|||||||||||
Accumulated
deficit
|
(291,616
|
)
|
(279,541
|
)
|
(209,546
|
)
|
(161,090
|
)
|
(101,501
|
)
|
||||||
Stockholders'
equity (deficit)
|
$
|
(6,162
|
)
|
$
|
(1,085
|
)
|
$
|
(52,067
|
)
|
$
|
(12,268
|
)
|
$
|
(65,436
|
)
|
12/31/05
R&D
EXPENSES
|
12/31/04
R&D
EXPENSES
|
12/31/05-12/31/04
R&D
EXPENSES
$
CHANGE
|
12/31/05-12/31/04
R&D
EXPENSES
%
CHANGE
|
$
6,265
|
$
4,130
|
$
2,135
|
52%
|
12/31/05
SELLING,
MARKETING,
G&A
EXPENSES
|
12/31/04
SELLING,
MARKETING,
G&A
EXPENSES
|
12/31/05-12/31/04
SELLING,
MARKETING, G&A EXPENSES
$
CHANGE
|
12/31/05-12/31/04
SELLING,
MARKETING, G&A EXPENSES
%
CHANGE
|
$5,296
|
$5,238
|
$58
|
1%
|
12/31/05
ENVIRONMENTAL
COMPLIANCE
EXPENSES
|
12/31/04
ENVIRONMENTAL
COMPLIANCE
EXPENSES
|
12/31/05-12/31/04
ENVIRONMENTAL
COMPLIANCE
EXPENSES
CHANGE
|
12/31/05-12/31/04
ENVIRONMENTAL
COMPLIANCE
EXPENSES
CHANGE
|
$
61
|
$
180
|
($
119)
|
(66%)
|
12/31/05
INTEREST
EXPENSE,
NET
OF INTEREST INCOME
|
12/31/04
INTEREST
EXPENSE,
NET
OF INTEREST INCOME
|
12/31/05-12/31/04
INTEREST
EXPENSE,
NET
OF INTEREST INCOME
$
CHANGE
|
12/31/05-12/31/04
INTEREST
EXPENSE,
NET
OF INTEREST INCOME
%
CHANGE
|
$
600
|
$
2,903
|
($
2,303)
|
(79%)
|
12/31/05
NET
LOSS
|
12/31/04
NET
LOSS
|
12/31/05-12/31/04
NET
LOSS
$
CHANGE
|
12/31/05-12/31/04
NET
LOSS
%
CHANGE
|
$
12,075
|
$
69,996
|
($
57,921)
|
(83%)
|
12/31/04
NET
PRODUCT REVENUES
|
12/31/03
NET
PRODUCT REVENUES
|
12/31/04-12/31/03
NET
PRODUCT
REVENUE
$
CHANGE
|
12/31/04-12/31/03
NET
PRODUCT
REVENUE
%
CHANGE
|
$
838
|
$
5,750
|
($4,912)
|
(85%)
|
12/31/04
COST
OF MANUFACTURING
|
12/31/03
COST
OF MANUFACTURING
|
12/31/04-12/31/03
COST
OF MANUFACTURING
$
CHANGE
|
12/31/04-12/31/03
COST
OF MANUFACTURING
%
CHANGE
|
$
1,435
|
$
11,705
|
($10,270)
|
(88%)
|
12/31/04
R&D
EXPENSES
|
12/31/03
R&D
EXPENSES
|
12/31/04-12/31/03
R&D
EXPENSES
$
CHANGE
|
12/31/04-12/31/03
R&D
EXPENSES
%
CHANGE
|
$4,130
|
$1,460
|
$2,670
|
183%
|
12/31/04
SELLING,
MARKETING,
G&A
EXPENSES
|
12/31/03
SELLING,
MARKETING,
G&A
EXPENSES
|
12/31/04-12/31/03
SELLING,
MARKETING,
G&A
EXPENSES
$
CHANGE
|
12/31/04-12/31/03
SELLING,
MARKETING,
G&A
EXPENSES
%
CHANGE
|
$
5,238
|
$
7,903
|
($
2,665)
|
(34%)
|
12/31/04
ENVIRONMENTAL
COMPLIANCE EXPENSES
|
12/31/03
ENVIRONMENTAL
COMPLIANCE EXPENSES
|
12/31/04-12/31/03
ENVIRONMENTAL
COMPLIANCE EXPENSES
$
CHANGE
|
12/31/04-12/31/03
ENVIRONMENTAL
COMPLIANCE EXPENSES
%
CHANGE
|
$
180
|
$
227
|
($
47)
|
(21%)
|
12/31/04
INTEREST
EXPENSE, NET OF INTEREST INCOME
|
12/31/03
INTEREST
EXPENSE, NET OF INTEREST INCOME
|
12/31/04-12/31/03
INTEREST
EXPENSE, NET OF INTEREST INCOME
$
CHANGE
|
12/31/04-12/31/03
INTEREST
EXPENSE, NET OF INTEREST INCOME
%
CHANGE
|
$
2,903
|
$
5,976
|
($
3,073)
|
(51%)
|
12/31/04
DEBT
DISCOUNT AND DEFERRED PRIVATE DEBT OFFERING COSTS
|
12/31/03
DEBT
DISCOUNT AND DEFERRED PRIVATE DEBT OFFERING COSTS
|
12/31/04-12/31/03
DEBT
DISCOUNT AND DEFERRED PRIVATE DEBT OFFERING COSTS
$
CHANGE
|
12/31/04-12/31/03
DEBT
DISCOUNT AND DEFFERED PRIVATE DEBT OFFERING COSTS
%
CHANGE
|
$72,491,
consisting of
$1,030
private debt offering costs and
$71,461
debt discount
|
$24,771,
consisting of $1,099
private debt offering costs and $23,672
debt discount
|
$
47,720
|
193%
|
12/31/04
NET
LOSS
|
12/31/03
NET
LOSS
|
12/31/04-12/31/03
NET
LOSS
$
CHANGE
|
12/31/04-12/31/03
NET
LOSS
%
CHANGE
|
$
69,996
|
$
48,455
|
$21,541
|
44%
|
TOTAL
|
DUE
IN
2006
|
DUE
IN
2007
|
DUE
IN
2008
|
DUE
THEREAFTER
|
||||||||||||
Notes
payable
|
$
|
7,550
|
$
|
2,550
|
$
|
5,000
|
--
|
--
|
||||||||
Capital
leases
|
63
|
31
|
26
|
6
|
--
|
|||||||||||
Operating
leases
|
35
|
30
|
5
|
--
|
--
|
|||||||||||
Annual
interest on fixed rate debt (1)
|
128
|
128
|
--
|
--
|
--
|
|||||||||||
Employment
agreements
|
740
|
740
|
--
|
--
|
--
|
|||||||||||
Total
contractual obligations
|
$
|
8,516
|
$
|
3,479
|
$
|
5,031
|
$
|
6
|
$
|
--
|
Expected
cash payments on contractual obligations entered into subsequent
to
December 31, 2005
|
TOTAL
|
DUE
IN
2006
|
DUE
IN
2007
|
DUE
IN
2008
|
DUE
THEREAFTER
|
|||||||||||
Notes
payable
|
$
|
750
|
$
|
750
|
$
|
--
|
$
|
--
|
$
|
--
|
||||||
Annual
interest on fixed rate debt (1)
|
25
|
25
|
--
|
--
|
--
|
|||||||||||
$
|
775
|
$
|
775
|
$
|
--
|
$
|
--
|
$
|
--
|
(1) |
Interest
on variable rate debt is paid with shares of the Company’s common stock.
Such interest expense is estimated to be $600,000 for
2006.
|
NAME
|
AGE
|
POSITION
|
||
Andrew
D. Reddick
|
53
|
President,
Chief Executive Officer and Director
|
||
Ron
J. Spivey
|
59
|
Senior
Vice President and Chief Scientific Officer
|
||
Peter
A. Clemens
|
53
|
Senior
Vice President, Chief Financial Officer and Secretary
|
||
James
F. Emigh
|
50
|
Vice
President of Marketing and Administration
|
||
Robert
A. Seiser
|
42
|
Vice
President, Corporate Controller and Treasurer
|
||
Bruce
F. Wesson
|
63
|
Director
|
||
William
A. Sumner
|
68
|
Director
|
||
Jerry
N. Karabelas
|
53
|
Director
|
||
William
G. Skelly
|
55
|
Director
|
||
Immanuel
Thangaraj
|
35
|
Director
|
ANNUAL
COMPENSATION
|
LONG
TERM COMPENSATION
|
SECURITIES
|
||||||||||||||||||||||
UNDERLYING
|
||||||||||||||||||||||
STOCK
|
||||||||||||||||||||||
OTHER
|
RESTRICTED
|
OPTIONS
and
|
ALL
|
|||||||||||||||||||
ANNUAL
|
STOCK
|
RESTRICTED
|
OTHER
|
|||||||||||||||||||
NAME
AND
|
COMPEN-
|
UNIT
|
STOCK
|
COMPEN-
|
||||||||||||||||||
PRINCIPAL
POSITION
|
YEAR
|
SALARY
|
BONUS
|
SATION(3)
|
AWARDS($)(1)
|
UNITS
(#)
|
SATION
|
|||||||||||||||
Andrew
D. Reddick
|
2005
|
$
|
300,000
|
$
|
--
|
$ |
--
|
$
|
2,660,625
|
8,250,000
|
$
|
--
|
||||||||||
President
and Chief
|
2004
|
|
305,769
|
|
60,000
|
--
|
--
|
8,750,000
|
--
|
|||||||||||||
Executive
Officer
|
2003
|
96,923
|
--
|
--
|
--
|
--
|
--
|
|||||||||||||||
Ron
J. Spivey
|
2005
|
|
260,000
|
--
|
--
|
|
2,128,500
|
10,600,000(2
|
))
|
--
|
||||||||||||
Senior
Vice President
|
2004
|
190,000
|
--
|
--
|
--
|
3,000,000
|
--
|
|||||||||||||||
and
Chief Scientific Officer
|
2003
|
-0-
|
--
|
--
|
--
|
--
|
--
|
|||||||||||||||
Peter
A. Clemens
|
2005
|
|
180,000
|
--
|
|
9,000
|
|
1,419,000
|
4,400,000
|
--
|
||||||||||||
Senior
Vice President and
|
2004
|
172,789
|
|
60,000
|
9,000
|
--
|
375,000
|
--
|
||||||||||||||
Chief
Financial Office
|
2003
|
146,000
|
|
60,000
|
9,000
|
--
|
--
|
--
|
||||||||||||||
James
F. Emigh
|
2005
|
|
140,000
|
--
|
--
|
|
443,438
|
1,375,000
|
--
|
|||||||||||||
Vice
President/Marketing
|
2004
|
|
137,692
|
|
50,000
|
4,200
|
--
|
249,000
|
--
|
|||||||||||||
and
Administration
|
2003
|
|
127,800
|
--
|
4,200
|
--
|
--
|
--
|
||||||||||||||
Robert
A. Seiser
|
2005
|
|
132,942
|
--
|
--
|
|
532,125
|
1,650,000
|
--
|
|||||||||||||
Vice
President, Corporate
|
2004
|
|
123,077
|
|
50,000
|
4,500
|
--
|
249,000
|
--
|
|||||||||||||
Controller
and Treasurer
|
2003
|
$
|
110,923
|
$
|
7,000
|
$ |
4,500
|
$ |
--
|
--
|
$ |
--
|
(1) |
The
dollar value of the Restricted Stock Unit Awards is equal to the
difference between (A) the product of (x) the number of shares of
the
Company’s Common Stock underlying each award, multiplied by (y) $0.3325,
the average of the closing bid and asked prices of the Company’s Common
Stock on December 22, 2005, the date of grant of the Restricted Stock
Unit
Awards, as reported by the Over-the-Counter Bulletin Board (“OTCBB”), less
(B) the par value of $0.01 per share payable by the recipient of
the
Restricted Stock Unit Award upon the Company’s issuance of the shares. The
aggregate number of shares underlying Restricted Stock Unit Awards
made by
the Company as of December 31, 2005 to Messrs. Reddick, Spivey, Clemens,
Emigh and Seiser is 8,250,000, 6,600,000, 4,400,000, 1,375,000 and
1,650,000 shares respectively. The value of the shares underlying
Restricted Stock Unit Awards made by the Company as of December 31,
2005
to Messrs. Reddick, Spivey, Clemens, Emigh and Seiser is $2,103,750,
$1,683,000, $1,122,000, $350,625, and $420,750, respectively, based
on the
average of the closing bid and asked prices on December 30, 2005
of
$0.265, as reported by the OTCBB. Each of the Restricted Stock Units
vests
one-third upon grant and the balance in equal monthly increments
on the
first day of each month beginning January 1, 2006 and ending December
1,
2007. The vested shares underlying the Restricted Stock Unit Awards
will
be issued by the Company on the earlier of (i) a Change of Control
(as
defined in the Company‘s 2005 Restricted Stock Unit Award Plan), or (ii)
January 1, 2011. In the event of a Change of Control, the issuance
of
shares by the Company shall be made in a lump sum distribution. In
the
absence of a Change of Control, the issuance shall be made in four
(4)
equal installments on each of January 1, 2011, January 1, 2012, January
1,
2013 and January 1, 2014. The recipients of the Restricted Stock
Unit
Awards have no rights as a stockholder, including no dividend or
voting
rights, with respect to the shares underlying such Awards until the
shares
are issued by the Company.
|
(2) |
Consists
of (i) 6,600,000 shares of common stock underlying Restricted Stock
Unit
Awards, and (ii) 4,000,000 shares of common stock underlying stock
options.
|
(3) |
Consisted
of auto allowances which were discontinued after
2005.
|
PLAN
CATEGORY
|
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)
|
||||
Stock
Option Equity Compensation Plans Approved by Security
Holders
|
19,754,995
|
$
0.27
|
616,655
|
|||
Stock
Option Equity Compensation Plans Not Approved by Security
Holders
|
0
|
0
|
0
|
|||
Restricted
Stock Unit Equity Compensation Plans Approved by Security
Holders
|
0
|
0
|
0
|
|||
Restricted
Stock Unit Equity Compensation Plans Not Approved by Security
Holders
|
27,500,000
|
$0.01
|
2,500,000
|
|||
TOTAL
|
47,254,995
|
$
0.11
|
3,116,655
|
Individual
Option
Grants
|
Name
|
Number
of Securities Underlying Options Granted
|
Percent
of Total Options Granted in
Fiscal Year
|
Exercise
Price
Per
Share (1)
|
Expiration
Date
|
Potential
Realizable Value of
Assumed
Annual Rates of
Stock
Price Appreciation
for
Option Term(2)
|
|||||||
5%
|
10%
|
|||||||||||
Andrew
D. Reddick
|
--
|
--
|
--
|
--
|
--
|
--
|
||||||
Ron
J. Spivey
|
4,000,000
|
100%
|
$0.13
|
2014
|
$2,489,577
|
$4,054,419
|
||||||
Peter
A. Clemens
|
--
|
--
|
--
|
--
|
--
|
--
|
||||||
James
F. Emigh
|
--
|
--
|
--
|
--
|
--
|
--
|
||||||
Robert
A. Seiser
|
--
|
--
|
--
|
--
|
--
|
--
|
(1) |
The
stock option granted to Dr. Spivey provides for vesting of 3,110,668
shares upon the grant, 444,666 shares on January 1, 2006, and 444,666
shares on April 1, 2006.
|
(2) |
The
dollar amounts in these columns represent the potential realizable
value
of each option assuming that the market price of the Company’s common
stock (based on the average of the closing bid and asked prices of
the
Company’s common stock on December 9, 2005, the date of grant of the stock
option, of $0.485) appreciates in value from the date of grant at
the 5%
and 10% annual rates prescribed by regulation and therefore are not
intended to forecast possible future appreciation, if any, of the
price of
the Common Stock.
|
Individual
Restricted Stock Unit
Awards (“RSUs”)
|
Name
|
Number
of Securities Underlying RSUs
Granted
|
%
of Total RSUs Granted to Employees
in
Fiscal
Year
|
Payment
Price
Per
Share (1)
|
Expiration
Date
|
Potential
Realizable value at
Assumed
Annual Rates of
Stock
Price Appreciation
for
the RSU
Term(2)
|
|||||||
5%
|
10%
|
|||||||||||
Andrew
D. Reddick
|
8,250,000
|
30%
|
$0.01
|
2014
|
$4,173,000
|
$6,385,600
|
||||||
Ron
J. Spivey
|
6,600,000
|
24%
|
$0.01
|
2014
|
$3,338,400
|
$5,108,500
|
||||||
Peter
A. Clemens
|
4,400,000
|
16%
|
$0.01
|
2014
|
$2,225,600
|
$3,405,700
|
||||||
James
F. Emigh
|
1,375,000
|
5%
|
$0.01
|
2014
|
$695,500
|
$1,064,300
|
||||||
Robert
A. Seiser
|
1,650,000
|
6%
|
$0.01
|
2014
|
$834,600
|
$1,277,100
|
(1) |
Each
of the Restricted Stock Unit Awards vest one-third (1/3) upon grant
and
the balance in equal monthly increments on the first day of each
month
beginning January 1, 2006 and ending December 1, 2007. The vested
shares
underlying the Restricted Stock Unit Awards will be issued by the
Company
on the earlier (i) a Change of Control (as defined in the Company’s 2005
Restricted Stock Unit Award Plan), or (ii) January 1, 2011. In the
event
of a Change of Control, the Company’s issuance of the vested shares shall
be made in a lump sum distribution. In the absence of a Change of
Control,
the issuance of the vested shares shall be made in four (4) equal
installments on each of January 1, 2011, January 1, 2012, January
1, 2013
and January 1, 2014. Upon the Company’s distribution of the vested shares
underlying the Restricted Stock Unit Awards, the recipients must
submit to
the Company the par value of $0.01 per share. The recipients of the
Restricted Stock Unit Awards have no rights as a stockholder, including
no
dividend or voting rights, with respect to the shares underlying
such
awards until the shares are issued by the Company.
|
(2) |
The
dollar amounts in these columns represent the potential realizable
value
of each RSU assuming that the market price of the Common Stock (based
on
the average of the closing bid and asked prices of the Company’s Common
Stock on December 22, 2005, the date of award of Restricted Stock
Units,
of $0.3325) appreciates in value from the date of grant at the 5%
and 10%
annual rates prescribed by regulation and therefore are not intended
to
forecast possible future appreciation, if any, of the price of the
Common
Stock.
|
NUMBER
OF SECURITIES
UNDERLYING
UNEXERCISED
OPTIONS
AT FISCAL YEAR END
|
VALUE
OF UNEXERCISED
IN-THE-MONEY
OPTIONS AT
FISCAL
YEAR END (1)
|
|||||||
NAME
|
EXERCISABLE
|
UNEXERCISABLE
|
EXERCISABLE
|
UNEXERCISABLE
|
||||
Andrew
D. Reddick
|
7,000,000
|
1,750,000
|
$945,000
|
$236,250
|
||||
Ron
J. Spivey
|
5,777,334
|
1,222,666
|
$779,940
|
$165,060
|
||||
Peter
A. Clemens
|
718,750
|
281,250
|
$12,656
|
$37,969
|
||||
James
F. Emigh
|
213,250
|
186,750
|
$8,404
|
$25,211
|
||||
Robert
A. Seiser
|
213,250
|
186,750
|
$8,404
|
$25,211
|
(1) |
Value
is based upon difference between the exercise price of the options
and the
average of the closing bid and asked prices of the Company’s Common Stock
of $0.265
per share at December 30, 2005.
|
NAME
OF BENEFICIAL OWNER
|
AMOUNT
OWNED
|
PERCENT
OF
CLASS(1)
|
||
GCE
Holdings LLC,
c/o
Galen Partners III, L.P.
610
Fifth Ave., 5th
Floor, New York, New York 10020
|
256,325,501(2)
|
78.2%
|
||
Oracle
Strategic Partners, L.P
200
Greenwich Avenue, Suite 3, Greenwich, CT 06830
|
18,085,708(3)
|
5.5%
|
||
Andrew
D. Reddick
|
7,750,000(4)
|
2.3%
|
||
Ron
J. Spivey
|
7,000,000(5)
|
2.1%
|
||
William
G. Skelly
|
401,000(6)
|
.*
|
||
Bruce
F. Wesson
|
--(2)
|
*
|
||
William
A. Sumner
|
250,000(7)
|
*
|
||
Peter
A. Clemens
|
1,127,823(8)
|
*
|
||
Jerry
N. Karabelas
|
--(2)
|
*
|
||
Immanuel
Thangaraj
|
--(2)
|
*
|
||
Robert
A. Seiser
|
275,250
(9)
|
*
|
||
James
F. Emigh
|
320,000(10)
|
*
|
||
All
Directors and Officers as a Group (10 persons)
|
17,124,323(11)
|
5.0%
|
* |
Represents
less than 1% of the outstanding shares of the Company's Common
Stock.
|
(1) |
Shows
percentage ownership assuming (i) such party converts all of its
currently
convertible securities or securities convertible within 60 days of
February 1, 2006 into the Company's common stock, and (ii) no other
Company securityholder converts any of its convertible
securities.
|
(2) |
GCE
Holdings LLC, a Delaware limited liability company, is the assignee
of all
of the Company’s Preferred Stock (prior to its conversion into common
stock) formerly held by each of Galen Partners III, L.P., Galen Partners
International III, L.P., Galen Employee Fund III, L.P. (collectively,
“Galen”), Care Capital Investments II, LP, Care Capital Offshore
Investments II, LP (collectively, “Care Capital”) and Essex Woodlands
Health Ventures V, L.P. (“Essex”). Galen, Care Capital and Essex own 43%,
27% and 30%, respectively, of the membership interests in GCE Holdings
LLC. The following natural persons exercise voting, investment and
dispositive rights over the Company’s securities held of record by GCE
Holdings LLC: (i) Galen Partners III, L.P., Galen Partners International
III, L.P. and Galen Employee Fund III, L.P., William Grant, Bruce
F.
Wesson, L. John Wilkenson, David W. Jahns, Zubeen Shroff and Srini
Conjeevaram; and (ii) Care Capital Investments II, LP and Care Capital
Offshore Investments II, LP, Jan Leschly, Jerry Karabelas and David
Ramsay; and (iii) Essex Woodlands Health Ventures V, L.P., Immanuel
Thangaraj.
|
(3) |
Larry
N. Feinberg exercises voting, investment and dispositive rights over
the
Company’s securities held of record by Oracle Strategic Partners, L.P. The
information with respect to Oracle Strategic Partners is based on
filings
with the Commission and/or information provided to the
Company.
|
(4) |
Includes
7,750,000 shares subject to currently exercisable stock options.
Excludes
8,250,000 restricted stock unit awards (“RSUs”) granted to Mr. Reddick.
Mr. Reddick has no rights as a stockholder, including no dividend
or
voting rights, with respect to the shares underlying the RSUs until
the
shares are issued by the Company pursuant to the terms of Company’s 2005
Restricted Stock Unit Plan.
|
(5) |
Includes
7,000,000 shares subject to currently exercisable stock options.
Excludes
6,600,000 RSUs granted to Dr. Spivey. Dr. Spivey has no rights as
a
stockholder, including no dividend or voting rights, with respect
to the
shares underlying the RSUs until the shares are issued by the Company
pursuant to the terms of Company’s 2005 Restricted Stock Unit
Plan.
|
(6) |
Includes
390,000 shares subject to currently exercisable stock options. Excludes
1,000,000 RSUs granted to Mr. Skelly. Mr. Skelly has no rights as
a
stockholder, including no dividend or voting rights, with respect
to the
shares underlying the RSUs until the shares are issued by the Company
pursuant to the terms of the Company’s 2005 Restricted Stock Unit Plan.
|
(7) |
Includes
250,000 shares subject to currently exercisable stock options. Excludes
1,000,000 RSUs granted to Mr. Sumner. Mr. Sumner has no rights as
a
stockholder, including no dividend or voting rights, with respect
to the
shares underlying the RSUs until the shares are issued by the Company
pursuant to the terms of the Company’s 2005 Restricted Stock Unit Plan.
|
(8) |
Includes
812,500 shares subject to currently exercisable stock options. Excludes
4,400,000 RSUs granted to Mr. Clemens. Mr. Clemens has no rights
as a
stockholder, including no dividend or voting rights, with respect
to the
shares underlying the RSUs until the shares are issued by the Company
pursuant to the terms of Company’s 2005 Restricted Stock Unit
Plan.
|
(9) |
Includes
275,250 shares subject to currently exercisable stock options. Excludes
1,650,000 RSUs granted to Mr. Seiser. Mr. Seiser has no rights as
a
stockholder, including no dividend or voting rights, with respect
to the
shares underlying the RSUs until the shares are issued by the Company
pursuant to the terms of Company’s 2005 Restricted Stock Unit
Plan.
|
(10) |
Includes
275,250 shares subject to currently exercisable stock options. Excludes
1,375,000 RSUs granted to Mr. Emigh. Mr. Emigh has no rights as a
stockholder, including no dividend or voting rights, with respect
to the
shares underlying the RSUs until the shares are issued by the Company
pursuant to the terms of Company’s 2005 Restricted Stock Unit
Plan.
|
(11) |
Includes
16,753,000 shares which Directors and executive officers have the
right to
acquire within 60 days of February 1, 2006 through exercise of outstanding
stock options.
|
BDO
Seidman, LLP
|
2005
|
2004
|
|
Audit
Fees
|
$67,867
|
$45,613
|
|
Audit-Related
Fees
|
$7,480
|
-
|
|
Total
Audit and Audit-Related Fees
|
$75,347
|
$45,613
|
|
Tax
Fees
|
$28,000
|
-
|
|
All
Other Fees
|
-
|
-
|
|
Total
for BDO Seidman, LLP
|
$103,347
|
$45,613
|
(a)(1) |
Consolidated
Financial Statements -- See Index to Financial
Statements.
|
(a)(2) |
None
|
(b) |
Exhibits
-- See Index to Exhibits
|
ACURA
PHARMACEUTICALS, INC.
|
||
|
|
|
By: | /s/ ANDREW D. REDDICK | |
Andrew D. Reddick |
||
President and Chief Executive Officer | ||
(Principal Executive Officer) |
/s/
Andrew D. Reddick
|
President,
Chief Executive Officer and Director
|
February
14, 2006
|
Andrew
D. Reddick
|
(Principal
Executive Officer)
|
|
/s/
Peter A. Clemens
|
Senior
Vice President and Chief Financial Officer
|
February
16, 2006
|
Peter
Clemens
|
(Principal
Financial and Accounting
Officer)
|
|
/s/
William G. Skelly
|
Director
|
February
15, 2006
|
William
G. Skelly
|
||
/s/
Bruce F. Wesson
|
Director
|
February
16, 2006
|
Bruce
F. Wesson
|
||
/s/
William Sumner
|
Director
|
February
14, 2006
|
William
Sumner
|
||
|
Director
|
February
__, 2006
|
Jerry
Karabelas
|
||
/s/
Immanuel Thangaraj
|
Director
|
February
16, 2006
|
Immanuel
Thangaraj
|
||
|
Page
|
Reports
of Independent Registered Public Accounting Firms
|
F-2
- F-3
|
Consolidated
Balance Sheets
|
F-4
- F-5
|
Consolidated
Statements of Operations
|
F-6
|
Consolidated
Statements of Stockholders' Equity (Deficit)
|
F-7
|
Consolidated
Statements of Cash Flows
|
F-9
- F-10
|
Notes
to Consolidated Financial Statements
|
F-11
- F-27
|
/s/ BDO Seidman, LLP |
ASSETS
|
2005
|
2004
|
|||||
CURRENT
ASSETS
|
|||||||
Cash
and cash equivalents
|
$
|
260
|
$
|
3,103
|
|||
Prepaid
insurance
|
179
|
212
|
|||||
Prepaid
expenses and other current assets
|
5
|
95
|
|||||
Total
current assets
|
444
|
3,410
|
|||||
PROPERTY,
PLANT & EQUIPMENT, NET
|
1,341
|
1,555
|
|||||
DEPOSITS
|
7
|
2
|
|||||
TOTAL
ASSETS
|
$
|
1,792
|
$
|
4,967
|
LIABILITIES
AND STOCKHOLDERS' DEFICIT
|
2005
|
2004
|
|||||
CURRENT
LIABILITIES
|
|||||||
Senior
secured term notes payable
|
$
|
2,550
|
$
|
-
|
|||
Current
maturities of capital lease obligations
|
31
|
29
|
|||||
Accrued
expenses
|
341
|
959
|
|||||
Total
current liabilities
|
2,922
|
988
|
|||||
SECURED
TERM NOTE PAYABLE
|
5,000
|
5,000
|
|||||
CAPITAL
LEASE OBLIGATIONS, less current maturities
|
32
|
64
|
|||||
COMMITMENTS
AND CONTINGENCIES
|
|||||||
TOTAL
LIABILITIES
|
$
|
7,954
|
$
|
6,052
|
|||
STOCKHOLDERS'
DEFICIT
|
|||||||
Common
stock - $.01 par value;
|
|||||||
650,000,000
shares authorized;
|
|||||||
329,293,530
and 22,466,967 shares issued and
|
|||||||
outstanding
in 2005 and 2004, respectively
|
3,293
|
225
|
|||||
Convertible
preferred stock - $.01 par value;
|
|||||||
72,027,014
and 290,000,000 shares authorized
|
|||||||
and
available for issuance in 2005 and 2004, respectively;
|
|||||||
none
and 217,972,986 shares issued and
|
|||||||
outstanding
in 2005 and 2004, respectively
|
-
|
2,180
|
|||||
Additional
paid-in capital
|
287,885
|
277,129
|
|||||
Unearned
compensation
|
(5,724
|
)
|
(1,078
|
)
|
|||
Accumulated
deficit
|
(291,616
|
)
|
(279,541
|
)
|
|||
STOCKHOLDERS'
DEFICIT
|
(6,162
|
)
|
(1,085
|
)
|
|||
TOTAL
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
$
|
1,792
|
$
|
4,967
|
2005
|
2004
|
2003
|
||||||||
Net
product revenues
|
$
|
-
|
$
|
838
|
$
|
5,750
|
||||
Cost
of manufacturing
|
-
|
1,435
|
11,705
|
|||||||
Research
and development
|
6,265
|
4,130
|
1,460
|
|||||||
Selling,
marketing, general and administrative
|
5,296
|
5,238
|
7,903
|
|||||||
Plant
shutdown costs
|
-
|
-
|
1,926
|
|||||||
Loss
from operations
|
(11,561
|
)
|
(9,965
|
)
|
(17,244
|
)
|
||||
Other
income (expense)
|
||||||||||
Interest
expense
|
(636
|
)
|
(2,962
|
)
|
(6,001
|
)
|
||||
Interest
income
|
36
|
59
|
25
|
|||||||
Amortization
and write-off of debt discount and deferred private debt offering
costs
|
-
|
(72,491
|
)
|
(24,771
|
)
|
|||||
Gain
on debt restructuring
|
-
|
12,401
|
-
|
|||||||
Gain
on asset disposals
|
81
|
2,359
|
-
|
|||||||
Other
|
5
|
603
|
(464
|
)
|
||||||
NET
LOSS
|
$
|
(12,075
|
)
|
$
|
(69,996
|
)
|
$
|
(48,455
|
)
|
|
Basic
and diluted loss per common share
|
$
|
(0.18
|
)
|
$
|
(3.20
|
)
|
$
|
(2.28
|
)
|
|
Weighted
average number of outstanding common shares
|
66,573
|
21,861
|
21,227
|
Common
Stock
$.01
Par Value
|
Preferred
Stock
$.01
Par Value
|
||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Additional
Paid-in
Capital
|
Unearned
Compensation
|
Accumulated
Deficit
|
Total
|
||||||||||||||||||
Balance
at January 1, 2003
|
21,035
|
$
|
211
|
-
|
$
|
-
|
$
|
148,611
|
$
|
-
|
$
|
(161,090
|
)
|
$
|
(12,268
|
)
|
|||||||||
Net
loss for the year ended December
31, 2003
|
-
|
-
|
-
|
-
|
-
|
-
|
(48,455
|
)
|
(48,455
|
)
|
|||||||||||||||
Conversion
of debentures
|
567
|
5
|
-
|
-
|
322
|
-
|
-
|
327
|
|||||||||||||||||
Issuance
of warrant for lending commitment
|
-
|
-
|
-
|
-
|
581
|
-
|
-
|
581
|
|||||||||||||||||
Beneficial
conversion features in connection
with debt
|
-
|
-
|
-
|
-
|
7,178
|
-
|
-
|
7,178
|
|||||||||||||||||
Issuance
of warrant in severance
|
-
|
-
|
-
|
-
|
113
|
-
|
-
|
113
|
|||||||||||||||||
Increase
in fair value of warrants
|
-
|
-
|
-
|
-
|
457
|
-
|
-
|
457
|
|||||||||||||||||
Balance
at December 31, 2003
|
21,602
|
216
|
-
|
-
|
157,262
|
-
|
(209,545
|
)
|
(52,067
|
)
|
Net
loss for the year ended December
31, 2004
|
-
|
-
|
-
|
-
|
-
|
-
|
(69,996
|
)
|
(69,996
|
)
|
|||||||||||||||
Issuance
of Common Shares for payment
of interest
|
865
|
9
|
-
|
-
|
391
|
-
|
-
|
400
|
|||||||||||||||||
Intrinsic
value of issued options
|
-
|
-
|
-
|
-
|
3,030
|
(3,030
|
)
|
-
|
-
|
||||||||||||||||
Amortization
of unearned compensation
|
-
|
-
|
-
|
-
|
55
|
1,952
|
-
|
2,007
|
|||||||||||||||||
Issuance
of Preferred Shares for convertible
debentures:
|
|||||||||||||||||||||||||
Series
A Convertible
|
-
|
-
|
21,964
|
220
|
13,892
|
-
|
-
|
14,112
|
|||||||||||||||||
Series
B Junior Convertible
|
-
|
-
|
20,246
|
203
|
6,722
|
-
|
-
|
6,925
|
|||||||||||||||||
Series
C-1 Junior Convertible
|
-
|
-
|
56,423
|
564
|
32,025
|
-
|
-
|
32,589
|
|||||||||||||||||
Series
C-2 Junior Convertible
|
-
|
-
|
37,433
|
374
|
22,059
|
-
|
-
|
22,433
|
|||||||||||||||||
Series
C-3 Junior Convertible
|
-
|
-
|
81,907
|
819
|
27,693
|
-
|
-
|
28,512
|
|||||||||||||||||
Beneficial
conversion features in conjunction
with issuance of
convertible debentures
|
-
|
-
|
-
|
-
|
14,000
|
-
|
-
|
14,000
|
|||||||||||||||||
Balance
at December 31, 2004
|
22,467
|
225
|
217,973
|
2,180
|
277,129
|
(1,078
|
)
|
(279,541
|
)
|
(1,085
|
)
|
Balance
at December 31, 2004
|
22,467
|
225
|
217,973
|
2,180
|
277,129
|
(1,078
|
)
|
(279,541
|
)
|
(1,085
|
)
|
||||||||||||||
Net
loss for the year ended December
31, 2005
|
-
|
-
|
-
|
-
|
-
|
-
|
(12,075
|
)
|
(12,075
|
)
|
|||||||||||||||
Issuance
of Common Shares for interest
|
963
|
10
|
-
|
-
|
525
|
-
|
-
|
535
|
|||||||||||||||||
Intrinsic
value of issued options and
restricted stock units
|
-
|
-
|
-
|
-
|
11,105
|
(11,105
|
)
|
-
|
-
|
||||||||||||||||
Amortization
of unearned compensation
|
-
|
-
|
-
|
-
|
-
|
6,459
|
-
|
6,459
|
|||||||||||||||||
Issuance
of Common Shares for exercise
of options
|
35
|
1
|
-
|
-
|
4
|
-
|
-
|
5
|
|||||||||||||||||
Conversion
of Preferred Shares:
|
|||||||||||||||||||||||||
Series
A Convertible Preferred
|
109,819
|
1,098
|
(21,964
|
)
|
(220
|
)
|
(878
|
)
|
-
|
-
|
-
|
||||||||||||||
Series
B Junior Convertible
|
20,246
|
203
|
(20,246
|
)
|
(203
|
)
|
-
|
-
|
-
|
-
|
|||||||||||||||
Series
C-1 Junior Convertible
|
56,423
|
564
|
(56,423
|
)
|
(564
|
)
|
-
|
-
|
-
|
-
|
|||||||||||||||
Series
C-2 Junior Convertible
|
37,433
|
374
|
(37,433
|
)
|
(374
|
)
|
-
|
-
|
-
|
-
|
|||||||||||||||
Series
C-3 Junior Convertible
|
81,907
|
819
|
(81,907
|
)
|
(819
|
)
|
-
|
-
|
-
|
-
|
|||||||||||||||
Balance
at December 31, 2005
|
329,293
|
$
|
3,293
|
-
|
$
|
-
|
$
|
287,885
|
$
|
(5,724
|
)
|
$
|
(291,616
|
)
|
$
|
(6,162
|
)
|
|
2005
|
2004
|
2003
|
|||||||
Cash
flows from Operating Activities:
|
||||||||||
Net
loss
|
$
|
(12,075
|
)
|
$
|
(69,996
|
)
|
$
|
(48,455
|
)
|
|
Adjustments
to reconcile net loss to net cash used in operating
activities
|
||||||||||
Depreciation
and amortization
|
137
|
291
|
811
|
|||||||
Amortization
of debt discount and deferred private debt offering costs
|
-
|
30,684
|
24,771
|
|||||||
Write
off unamortized debt discount and deferred private debt offering
costs
|
-
|
41,807
|
-
|
|||||||
Gain
on debt restructuring
|
-
|
(12,401
|
)
|
-
|
||||||
Non-cash
stock compensation expense
|
6,459
|
2,007
|
-
|
|||||||
Gain
on Department of Justice settlement
|
-
|
(402
|
)
|
-
|
||||||
Amortization
of deferred product acquisition costs
|
-
|
6
|
42
|
|||||||
Provision
for losses on accounts receivable
|
-
|
(428
|
)
|
351
|
||||||
(Gain)
or loss on asset disposals
|
(81
|
)
|
(2,359
|
)
|
7
|
|||||
Debentures
and stock issued for interest expense
|
535
|
401
|
3,241
|
|||||||
Change
in fair value of warrants due to modification of terms
|
-
|
-
|
457
|
|||||||
Impairment
reserve against fixed assets
|
-
|
-
|
3,619
|
|||||||
Changes
in assets and liabilities
|
||||||||||
Accounts
receivable
|
-
|
729
|
(2,244
|
)
|
||||||
Inventories
|
-
|
312
|
28
|
|||||||
Prepaid
expenses and other current assets
|
121
|
94
|
(76
|
)
|
||||||
Other
assets and deposits
|
(5
|
)
|
184
|
103
|
||||||
Accounts
payable
|
-
|
(1,882
|
)
|
(877
|
)
|
|||||
Accrued
expenses
|
(618
|
)
|
1,460
|
2,137
|
||||||
Total
adjustments
|
6,548
|
60,503
|
32,270
|
|||||||
Net
cash used in operating activities
|
(5,527
|
)
|
(9,493
|
)
|
(16,085
|
)
|
||||
Cash
flows from Investing Activities:
|
||||||||||
Capital
expenditures
|
(35
|
)
|
(444
|
)
|
(410
|
)
|
||||
Proceeds
from asset disposals
|
193
|
4,538
|
-
|
|||||||
Net
cash provided by (used in) investing activities
|
158
|
4,094
|
(410
|
)
|
||||||
Cash
flows from Financing Activities:
|
||||||||||
Payments
on senior secured term notes payable
|
-
|
(4,000
|
)
|
-
|
||||||
Proceeds
from issuance of senior secured term notes payable
|
2,550
|
-
|
2,000
|
|||||||
Proceeds
from the exercise of stock options
|
5
|
-
|
-
|
|||||||
Payments
to Department of Justice
|
-
|
(31
|
)
|
(328
|
)
|
|||||
Payments
on capital lease obligations
|
(29
|
)
|
(45
|
)
|
(46
|
)
|
||||
Proceeds
from issuance of subordinated convertible debentures
|
-
|
11,951
|
6,600
|
|||||||
Payments
of private offering costs
|
-
|
(315
|
)
|
-
|
||||||
Net
cash provided by financing activities
|
2,526
|
7,560
|
8,226
|
|||||||
(Decrease)
increase in cash and cash equivalents
|
(2,843
|
)
|
2,161
|
(8,269
|
)
|
|||||
Cash
and cash equivalents at beginning of year
|
3,103
|
942
|
9,211
|
|||||||
Cash
and cash equivalents at end of year
|
$
|
260
|
$
|
3,103
|
$
|
942
|
1. |
The
Company issued 963,000 shares of common stock as payment of $535,000
of
Secured Term Note Payable accrued
interest.
|
2. |
217,973,000
shares of Convertible Preferred Stock were converted into 305,829,000
shares of Common Stock.
|
1. |
The
Company's Convertible Subordinated Debentures contained beneficial
conversation features which were valued at
$14,000,000.
|
2. |
The
Company repaid $166,000 of indebtedness in the form of product
deliveries.
|
3. |
Bridge
Loans of $2,000,000 and accrued interest of $49,000 were converted
into
like amounts of Convertible Subordinated
Debentures.
|
4. |
The
Company issued 865,000 shares of common stock as payment of $400,000
of
Senior Secured Term Note Payable accrued
interest.
|
5. |
Convertible
Subordinated Debentures of $100,632,000 and accrued interest of
$3,939,000
were converted into 217,973,000 shares of Convertible Preferred
Stock.
|
1. |
The
Company's bridge loans contained beneficial conversion features
valued at
$578,000.
|
2. |
The
Company's convertible debentures contained beneficial conversation
features valued at $6,600,000.
|
3. |
The
Company issued $3,241,000 of debentures as payment of like amounts
of
debenture accrued interest.
|
4. |
The
Company repaid $2,037,000 of indebtedness in the form of product
deliveries.
|
5. |
The
Company issued 645,000 warrants with an estimated relative fair
value of
$582,000 for the lending commitment in the form of debentures and
bridge
loans.
|
6. |
The
Company issued 567,000 shares of common stock upon conversion of
$327,000
of debentures.
|
7. |
The
Company issued 150,000 warrants with an estimated relative fair
value of
$113,000 in connection with the termination of an employment
agreement.
|
8. |
Equipment
financed through capital leases aggregated approximately
$111,000.
|
2004
|
2003
|
||||||
Beginning
balance
|
$
|
428
|
$
|
14
|
|||
Provision
for losses on accounts receivable
|
-
|
351
|
|||||
Provision
for all other allowances
|
-
|
71
|
|||||
Write-offs
|
(428
|
)
|
(8
|
)
|
|||
Ending
balance
|
$
|
-
|
$
|
428
|
Building
and building improvements
|
10
- 40 years
|
Land
improvements
|
20
- 40 years
|
Machinery
and equipment
|
7
-
10 years
|
Scientific
equipment
|
5
-
10 years
|
Computer
hardware and software
|
3
-
10 years
|
Office
equipment
|
5
-
10 years
|
|
Year
ended December 31,
|
|||||||||
(in
thousands, except per share data)
|
||||||||||
|
2005
|
2004
|
2003
|
|||||||
Net
loss, as reported
|
$
|
(12,075
|
)
|
$
|
(69,996
|
)
|
$
|
(48,455
|
)
|
|
Add:
total stock-based employee compensation expense included in reported
net
loss
|
6,458
|
1,952
|
-
|
|||||||
Deduct:
total stock-based employee compensation expense determined under
fair
value-based method for all awards
|
(7,242
|
)
|
(3,058
|
)
|
(662
|
)
|
||||
Net
loss, pro forma
|
$
|
(12,859
|
)
|
$
|
(71,102
|
)
|
$
|
(49,117
|
)
|
|
Loss
per share:
|
||||||||||
Basic
and Diluted EPS - as reported
|
$
|
(0.18
|
)
|
$
|
(3.20
|
)
|
$
|
(2.28
|
)
|
|
Basic
and Diluted EPS - as pro forma
|
$
|
(0.19
|
)
|
$
|
(3.25
|
)
|
$
|
(2.31
|
)
|
|
Grants
issued during
|
|||||||||
|
2005
|
2004
|
2003
|
|||||||
Expected
life (years)
|
4
|
2
- 5
|
2.5
|
|||||||
Risk-free
interest rate
|
4.5
|
%
|
2.4%
- 4.6
|
%
|
1.8
|
%
|
||||
Expected
volatility factor
|
120
|
%
|
73%
- 87
|
%
|
94
|
%
|
||||
Dividend
yield
|
0.0
|
%
|
0.0
|
%
|
0.0
|
%
|
||||
Weighted
average fair value
|
$
|
0.37
|
$
|
0.25
|
$
|
0.53
|
Convertible
Preferred
Stock
|
Authorized
Preferred
Shares
at
12/31/04
|
Number
of
Converted
Preferred
Shares
|
Number
of
Common
Shares
Issued
Upon
Conversion
|
Authorized
Preferred
Shares
Available
for
Issuance
at 12/31/05
|
|||||||||
Series
A
|
45,000
|
21,964
|
109,819
|
23,036
|
|||||||||
Series
B Junior
|
25,000
|
20,246
|
20,246
|
4,754
|
|||||||||
Series
C-1 Junior
|
70,000
|
56,423
|
56,423
|
13,577
|
|||||||||
Series
C-2 Junior
|
50,000
|
37,433
|
37,433
|
12,567
|
|||||||||
Series
C-3 Junior
|
100,000
|
81,907
|
81,907
|
18,093
|
|||||||||
Total
|
290,000
|
217,973
|
305,828
|
72,027
|
|
December
31,
|
||||||
|
2005
|
2004
|
|||||
Building
and building improvements
|
$
|
1,485
|
$
|
1,510
|
|||
Land
and land improvements
|
161
|
127
|
|||||
Machinery
and equipment
|
2,324
|
3,425
|
|||||
Scientific
equipment
|
473
|
450
|
|||||
Computer
hardware and software
|
196
|
255
|
|||||
Office
equipment
|
42
|
174
|
|||||
Other
personal property
|
50
|
48
|
|||||
Construction
in progress
|
1
|
5
|
|||||
4,732
|
5,994
|
||||||
Less
accumulated depreciation and amortization (including $53 in 2005
and $35
in 2004 on capital leased assets)
|
(3,271
|
)
|
(4,301
|
)
|
|||
1,461
|
1,693
|
||||||
Less
impairment reserve
|
(120
|
)
|
(138
|
)
|
|||
$
|
1,341
|
$
|
1,555
|
|
December
31,
|
||||||
|
2005
|
2004
|
|||||
Bonus,
payroll, payroll taxes and benefits
|
$
|
50
|
$
|
573
|
|||
Legal
fees
|
74
|
34
|
|||||
Audit
examination and tax preparation fees
|
65
|
85
|
|||||
Franchise
taxes
|
20
|
-
|
|||||
Property
taxes
|
52
|
30
|
|||||
Clinical,
regulatory, trademarks, and patent consulting fees
|
78
|
108
|
|||||
Directors
fees
|
2
|
-
|
|||||
Clinical
and laboratory testing services
|
-
|
47
|
|||||
Litigation
settlement
|
-
|
25
|
|||||
Medicaid
rebates
|
-
|
50
|
|||||
Other
fees and services
|
-
|
7
|
|||||
$
|
341
|
$
|
959
|
|
December
31,
|
||||||
|
2005
|
2004
|
|||||
Term
note payable (a)
|
$
|
5,000
|
$
|
5,000
|
|||
Bridge
loans (b)
|
$
|
2,550
|
$
|
-
|
|||
Capital
lease obligations
|
63
|
93
|
|||||
2,613
|
93
|
||||||
Less:
Current maturities
|
(2,581
|
)
|
(29
|
)
|
|||
$
|
32
|
$
|
64
|
(a) |
The
Company was a party to a certain loan agreement with Watson
Pharmaceuticals, Inc. ("Watson") pursuant to which Watson made
term loans
to the Company (the "Watson Term Loan Agreement") in the aggregate
principal amount of $21.4 million as evidenced by two promissory
notes
(the "Watson Notes"). It was a condition to the completion of the
2004
Debenture Offering that simultaneous with the closing of the 2004
Purchase
Agreement, the Company shall have paid Watson the sum of approximately
$4.3 million (which amount was funded from the proceeds of the
2004
Debenture Offering) and conveyed to Watson certain Company assets
in
consideration for Watson's forgiveness of approximately $16.4 million
of
indebtedness under the Watson Notes, resulting in a $12.1 million
gain for
the Company. As part of such transaction, the Watson Notes were
amended to
extend the maturity date of such notes from March 31, 2006 to June
30,
2007, to provide for satisfaction of future interest payments under
the
Watson Notes in the form of the Company's Common Stock, to reduce
the
principal amount of the Watson Notes from $21.4 million to $5.0
million,
and to provide for the forbearance from the exercise of rights
and
remedies upon the occurrence of certain events of default under
the Watson
Notes (the Watson Notes as so amended, the "2004 Note"). Simultaneous
with
the issuance of the 2004 Note, each of Care Capital, Essex Woodland
Health
Ventures, Galen Partners and the other investors in the 2004 Debentures
as
of February 10, 2004 (collectively, the "Watson Note Purchasers")
purchased the 2004 Note from Watson in consideration for a payment
to
Watson of $1.0 million.
|
Warrants
outstanding
|
||||||||||
Range
of
Exercise
Prices
|
Shares
|
Weighted
Average
Remaining
Life
in Years
|
Weighted Average
Exercise
Price
|
|||||||
$ 0.13
to $0.66
|
16,242
|
6.37
|
$
|
0.34
|
Years
Ended December 31,
|
|||||||||||||||||||
2005
|
2004
|
2003
|
|||||||||||||||||
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|
Amount
|
%
|
||||||||
|
|
|
|
|
|
|
|||||||||||||
Federal
statutory rate
|
$
|
(4,105
|
)
|
(34
|
)%
|
$
|
(23,798
|
)
|
(34
|
)%
|
$
|
(15,966
|
)
|
(34
|
)%
|
||||
Loss
for which no benefit was provided
|
4,104
|
34
|
3,716
|
5.3
|
4,357
|
9.2
|
|||||||||||||
Non-deductible
financing costs
|
-
|
-
|
24,647
|
35.2
|
11,589
|
24.6
|
|||||||||||||
Federal
tax carryback refund
|
-
|
-
|
(122
|
)
|
(.2
|
)
|
-
|
-
|
|||||||||||
Debt
forgiveness
|
-
|
-
|
(4,307
|
)
|
(6.1
|
)
|
-
|
-
|
|||||||||||
Department
of Justice settlement
|
-
|
-
|
(137
|
)
|
(.2
|
)
|
11
|
.1
|
|||||||||||
Other
|
1
|
-
|
1
|
-
|
9
|
.1
|
|||||||||||||
|
|||||||||||||||||||
Actual
tax benefit
|
$
|
-
|
-
|
$
|
-
|
-
|
$
|
-
|
-
|
|
December
31,
|
|||||||||
|
2005
|
2004
|
2003
|
|||||||
Deferred
tax assets:
|
||||||||||
Net
operating loss carryforwards
|
$
|
57,748
|
$
|
55,178
|
$
|
55,998
|
||||
Stock
compensation
|
3,555
|
843
|
-
|
|||||||
Accrued
expenses
|
16
|
254
|
205
|
|||||||
Accrued
shutdown costs
|
50
|
71
|
703
|
|||||||
Debt
issue costs
|
12
|
-
|
-
|
|||||||
Asset
reserves
|
-
|
-
|
1,016
|
|||||||
Research
and development tax credit
|
-
|
-
|
29
|
|||||||
Capital
loss carryforwards
|
-
|
-
|
212
|
|||||||
Other
|
66
|
71
|
73
|
|||||||
Depreciation
|
-
|
-
|
20
|
|||||||
Gross
deferred tax assets
|
61,447
|
56,417
|
58,256
|
|||||||
Deferred
tax liabilities:
|
||||||||||
Depreciation
|
(38
|
)
|
(26
|
)
|
-
|
|||||
Net
deferred tax assets
before
valuation allowance
|
61,409
|
56,391
|
58,256
|
|||||||
Valuation
allowance
|
(61,409
|
)
|
(56,391
|
)
|
(58,256
|
)
|
||||
Net
deferred tax assets
|
$
|
-
|
$
|
-
|
$
|
-
|
1. |
401(k)
and Profit-sharing Plan
|
2. |
Stock
Option Plans
|
|
Years
Ended December 31,
|
||||||||||||||||||
|
2005
|
|
2004
|
|
2003
|
||||||||||||||
|
Shares
|
|
Weighted
Average
Exercise
Price
|
|
Shares
|
|
Weighted
Average
Exercise
Price
|
|
Shares
|
|
Weighted
Average
Exercise
Price
|
||||||||
Outstanding,
beginning
|
|
17,499
|
|
$
|
0.44
|
|
|
3,525
|
|
$
|
1.83
|
|
|
5,009
|
|
$
|
1.80
|
||
|
Granted
|
|
4,000
|
|
|
0.13
|
|
|
14,475
|
|
|
0.13
|
|
|
45
|
|
|
0.96
|
|
|
Exercised
|
|
(35
|
)
|
|
0.13
|
|
|
(-
|
)
|
|
-
|
|
|
(-
|
)
|
|
-
|
|
|
Cancelled
|
|
(1,709
|
)
|
|
1.65
|
|
|
(501
|
)
|
|
1.85
|
|
|
(1,529
|
)
|
|
1.69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Outstanding,
ending
|
|
19,755
|
|
$
|
0.27
|
|
|
17,499
|
|
$
|
0.44
|
|
|
3,525
|
|
$
|
1.83
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Options
exercisable, end
of year
|
|
15,698
|
|
$
|
0.31
|
|
|
9,558
|
|
$
|
0.66
|
|
|
2,871
|
|
$
|
1.91
|
|
|
Options
Outstanding
|
|
Options
Exercisable
|
||||||||
Range
of Exercise Prices
|
|
Shares
|
|
Weighted
Average
Remaining
Life
in Years
|
|
Weighted
Average
Exercise
Price
|
|
Shares
|
|
Weighted
Average
Exercise
Price
|
||
$0.13
to $1.00
|
|
18,294
|
|
8.36
|
|
$
|
0.14
|
|
14,239
|
|
$
|
0.15
|
$1.01
to $2.00
|
|
800
|
|
3.39
|
|
1.41
|
|
798
|
|
1.41
|
||
$2.01
to $4.38
|
|
661
|
|
2.77
|
|
2.40
|
|
661
|
|
2.40
|
||
|
|
|
|
|
|
|||||||
Total
|
|
19,755
|
|
7.99
|
|
$
|
36.05
|
|
15,698
|
|
$
|
0.31
|
Restricted
stock units outstanding
|
|||||||
Shares
|
Number
vested
|
Number
issuable
|
|||||
27,500
|
9,167
|
-
|
Total
|
Due
in
2006
|
Due
in
2007
|
Due
in
2008
|
Due
Thereafter
|
||||||||||||
Notes
payable
|
$
|
7,550
|
$
|
2,550
|
$
|
5,000
|
$
|
-
|
$
|
-
|
||||||
Capital
leases
|
63
|
31
|
26
|
6
|
-
|
|||||||||||
Operating
leases
|
35
|
30
|
5
|
-
|
-
|
|||||||||||
Annual
interest on fixed rate debt
|
128
|
128
|
-
|
-
|
-
|
|||||||||||
Employment
agreements
|
740
|
740
|
-
|
-
|
-
|
|||||||||||
Total
contractual obligations
|
$
|
8,516
|
$
|
3,479
|
$
|
5,031
|
$
|
6
|
$
|
-
|
Expected
cash payments on contractual obligations entered into subsequent
to
December 31, 2005
|
Total
|
Due
in
2006
|
Due
in
2007
|
Due
in
2008
|
Due
Thereafter
|
|||||||||||
Notes
payable
|
$
|
750
|
$
|
750
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||
Annual
interest on fixed rate debt
|
25
|
25
|
-
|
-
|
-
|
|||||||||||
$
|
775
|
$
|
775
|
$
|
-
|
$
|
-
|
$
|
-
|
For
the Three Month Period Ending
|
||||||||||||||||
March
31,
2005
|
June
30,
2005
|
September
30,
2005
|
December
31,
2005
|
Annual
Year
2005
|
||||||||||||
Net
product revenues
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||
Loss
from operations
|
(1,908
|
)
|
(1,266
|
)
|
(1,473
|
)
|
(
6,914
|
)
|
(11,561
|
)
|
||||||
Net
loss
|
(1,948
|
)
|
(1,382
|
)
|
(1,635
|
)
|
(7,110
|
)
|
(12,075
|
)
|
||||||
Loss
per common share - basic and diluted
|
$
|
(.09
|
)
|
$
|
(.06
|
)
|
$
|
(.07
|
)
|
$
|
(.04
|
)
|
$
|
(.18
|
)
|
For
the Three Month Period Ending
|
||||||||||||||||
March
31,
2004
|
June
30,
2004
|
September
30,
2004
|
December
31,
2004
|
Annual
Year
2004
|
||||||||||||
Net
product revenues
|
$
|
628
|
$
|
210
|
$
|
-
|
$
|
-
|
$
|
838
|
||||||
Loss
from operations
|
(2,084
|
)
|
(2,120
|
)
|
(3,810
|
)
|
(1,951
|
)
|
(9,965
|
)
|
||||||
Amortization
and write-off of debt discount and deferred private debt offering
costs
|
(10,843
|
)
|
(13,812
|
)
|
(47,836
|
)
|
(-
|
)
|
(72,491
|
)
|
||||||
Gain
on debt restructuring
|
12,401
|
-
|
-
|
-
|
12,401
|
|||||||||||
Gain
(loss) on asset disposals
|
1,754
|
1
|
633
|
(29
|
)
|
2,359
|
||||||||||
Net
income (loss)
|
$
|
680
|
$
|
(17,112
|
)
|
$
|
(51,480
|
)
|
$
|
(2,084
|
)
|
$
|
(69,996
|
)
|
||
Earnings
(loss) per common share - basic
|
$
|
.03
|
$
|
(.79
|
)
|
$
|
(2.35
|
)
|
$
|
(.09
|
)
|
$
|
(3.20
|
)
|
||
Earnings
(loss) per common share - diluted
|
$
|
.00
|
$
|
(.79
|
)
|
$
|
(2.35
|
)
|
$
|
(.09
|
)
|
$
|
(3.20
|
)
|
EXHIBIT
NUMBER
|
DOCUMENT
|
|
3.1
|
Certificate
of Incorporation and amendments (incorporated by reference to Exhibit
3.1
to the Registrant's Annual Report on 10-K for the year ended December
31,
1999).
|
|
3.2
|
Restated
Bylaws (incorporated by reference to Exhibit 3.1 to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended June 30,
1993).
|
|
3.3
|
Restated
By-Laws (incorporated by reference to Exhibit 3.3 to the Registrant's
Annual Report Form 10-K for the year ended December 31, 1998 (the
"1998
Form 10-K")).
|
|
4.1
|
Form
of 5% Convertible Senior Secured Debenture (incorporated by reference
to
Exhibit 4.1 to the Registrant's Current Report on Form 8-K dated
December
20, 2002 (the "December 2002 Form 8-K")).
|
|
4.2
|
Form
of Convertible Senior Secured Debenture issued pursuant to the Debenture
and Share Purchase Agreement dated as of February 6, 2004 (incorporated
by
reference to Exhibit 4.1 of the Registrant's Current Report on Form
8-K
dated February 10, 2004 (the "February 2004 Form 8-K").
|
|
10.1
|
Credit
Agreement, dated as of December 22, 1992, among the Registrant and
The
Chase Manhattan Bank, N.A. (incorporated by reference to Exhibit
10.1 to
the Registrant's Annual Report on Form 10-K for the year ended December
31, 1992 (the "1992 Form 10-K")).
|
|
10.2
|
Amendment
Two, dated as of January 12, 1994, to Credit Agreement among the
Registrant and The Chase Manhattan Bank, N.A., together with forms
of
Stock Warrant and Registration Rights Agreement (incorporated by
reference
to Exhibit 10.1 to the Registrant's Annual Report on Form 10-K for
the
year ended December 31, 1993 (the "1993 Form 10-K")).
|
|
10.3
|
Amendment
Three, dated as of May 31, 1994, to Credit Agreement among the Registrant
and The Chase Manhattan Bank, N.A. (incorporated by reference to
Exhibit
6(a) to the Registrant's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1994).
|
|
10.4
|
Amendment
Four, dated as of July 1994, to Credit Agreement among the Registrant
and
The Chase Manhattan Bank, N.A. (incorporated by reference to Exhibit
6(a)
to the Registrant's Quarterly Report on Form 10-Q for the quarter
ended
June 30, 1994).
|
|
10.5
|
Amendment
Five, dated as of March 21, 1995, to Credit Agreement among the Registrant
and The Chase Manhattan Bank, N.A. (incorporated by reference to
Exhibit
10.7 to the Registrant's Current Report on Form 8-K dated March 21,
1995
(the "March 1995 8-K")).
|
|
10.5(1)
|
Form
of Warrants issued to The Bank of New York, The Chase Manhattan Bank,
N.A.
and the Israel Discount Bank (incorporated by reference to Exhibit
10.5(i)
to the Registrant's Annual Report on Form 10-K for the year ended
December
31, 1995 (the "1995 Form 10-K")).
|
|
10.5(2)
|
Letter
Agreement, dated July 10, 1995, among the Registrant, The Chase Manhattan
Bank, N.A., The Bank of New York and Israel Discount Bank of New
York
(incorporated by reference to Exhibit 6(a) to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1995 (the "June
1995
10-Q")).
|
|
10.5(3)
|
Letter
Agreement, dated November 16, 1995, among the Registrant, The Chase
Manhattan Bank, N.A., The Bank of New York and Israel Discount Bank
of New
York (incorporated by reference to Exhibit 10.25(iv) to the 1995
10-K).
|
|
10.5(4)
|
Amendment
6, dated as of August 6, 1996, to Credit Agreement among the Registrant,
The Chase Manhattan Bank, N.A., The Bank of New York and Israel Discount
Bank of New York (incorporated by reference to Exhibit 10.1 to Amendment
No. 1 to the Registrant's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1996 (the "June 1996 10-Q").
|
|
10.5(5)
|
Letter
Agreement, dated March 25, 1997 among the Registrant, The Chase Manhattan
Bank, as successor in interest to The Chase Manhattan Bank (National
Association), The Bank of New York and Israel Discount
Bank.
|
|
10.6
|
Agreement
Regarding Release of Security Interests dated as of March 21,1995
by and
among the Registrant, Mallinckrodt Chemical Acquisition, Inc. and
The
Chase Manhattan Bank, N.A. (incorporated by reference to Exhibit
10.9 of
the March 1995 8-K).
|
EXHIBIT
NUMBER
|
DOCUMENT
|
|
10.7
|
Consulting
Agreement dated as of September, 1993 between the Registrant and
Joseph F.
Limongelli (incorporated by reference to Exhibit 10.6 to the 1993
Form
10-K).
|
|
10.8
|
Employment
Agreement, dated as of January 1, 1993, between the Registrant and
Rosendo
Ferran (incorporated by reference to Exhibit 10.2 to the 1992 Form
10-K).
|
|
10.10(1)
|
Registrant’s
1984 Stock Option Plan, as amended (incorporated by reference to
Exhibit
10.3 to the 1992 Form 10-K).
|
|
10.10(2)
|
Registrant’s
1995 Stock Option and Restricted Stock Purchase Plan (incorporated
by
reference to Exhibit 4.1 to the Registrant's Registration Statement
on
Form S-8, File No. 33-98396).
|
|
10.10(3)
|
Registrant’s
Non-Employee Director Stock Option Plan.
|
|
10.11
|
Leases,
effective February 13, 1989 and January 1, 1990, respectively, among
the
Registrant and Milton J. Ackerman, Sue Ackerman, Lee Hinderstein,
Thelma
Hinderstein and Marilyn Weiss (incorporated by reference to Exhibits
10.6
and 10.7, respectively, to the Registrant's Annual Report on Form
10-K for
the year ended December 31, 1989).
|
|
10.12
|
Lease,
effective as of April 15, 1988, among the Registrant and Milton J.
Ackerman, Sue Ackerman, Lee Hinderstein, Thelma Hinderstein and Marilyn
Weiss, and Rider thereto (incorporated by reference to Exhibit 10.12
to
the Registrant's Annual Report on Form 10-K for the year ended December
31, 1987).
|
|
10.12(l)
|
Lease,
as of October 31, 1994, among Registrant and Milton J. Ackerman,
Sue
Ackerman, Lee Hinderstein, Thelma Hinderstein and Marilyn Weiss,
together
with Modification, Consolidation and Extension Agreement (incorporated
by
reference to Exhibit 10.12(i) to the 1995 Form 10-K).
|
|
10.13
|
Asset
Purchase Agreement dated as of March 21, 1995 among Mallinckrodt
Chemical
Acquisition, Inc. ("Acquisition"), Mallinckrodt Chemical, Inc., as
guarantor and the Registrant (incorporated by reference to Exhibit
10.1 to
the March 1995 8-K).
|
|
10.14
|
Toll
Manufacturing Agreement for APAP/Oxycodone Tablets dated as of March
21,
1995 between Acquisition and the Registrant (incorporated by reference
to
Exhibit 10.2 to the March 1995 8-K).
|
|
10.15
|
Capsule
ANDA Option Agreement dated as of March 21, 1995 between Acquisition
and
the Registrant (incorporated by reference to Exhibit 10.3 to the
March
1995 8-K).
|
|
10.16
|
Tablet
ANDA Non competition Agreement dated as of March 21, 1995 between
the
Registrant and Acquisition (incorporated by reference to Exhibit
10.4 to
the March 1995 8-K).
|
|
10.17
|
Subordinated
Non-Negotiable Promissory Term Note in the amount of $1,200,00 dated
March
21, 1995 issued by the Registrant to Acquisition (incorporated by
reference to Exhibit 10.5 to the March 1995 8-K).
|
|
10.18
|
Term
Note Security Agreement dated as of March 21, 1995 among the Company,
Houba, Inc. and Acquisition (incorporated by reference to Exhibit
10.6 to
the March 1995 8-K).
|
|
10.19
|
Amendment
dated March 21, 1995 to Subordination Agreement dated as of July
21, 1994
between Mallinckrodt Chemical, Inc., Acquisition, the Registrant,
The
Chase Manhattan Bank (National Association), Israel Discount Bank
of New
York, The Bank of New York, and The Chase Manhattan Bank (National
Association) (incorporated by reference to Exhibit 10.8 to the March
1995
8-K).
|
|
10.20
|
Agreement
dated as of March 30, 1995 between the Registrant and Zatpack, Inc.
(incorporated by reference to Exhibit 10.10 to the March
8-K).
|
|
10.21
|
Waiver
and Termination Agreement dated as of March 30, 1995 between Zuellig
Group, W.A., Inc. and Indiana Fine Chemicals Corporation (incorporated
by
reference to Exhibit 10.11 to the March 1995 8-K).
|
|
10.22
|
Convertible
Subordinated Note of the Registrant dated December 1, 1994 issued
to
Zatpack, Inc. (incorporated by reference to Exhibit 10.12 to the
March
8-K).
|
|
10.23
|
Agreement
dated as of March 30, 1995 among the Registrant, Indiana Fine Chemicals
Corporation, Zuellig Group, N.A., Inc., Houba Inc., Zetapharm, Inc.
and
Zuellig Botanical, Inc. (incorporated by reference to Exhibit 10.13
to the
March 1995 8-K).
|
|
10.24
|
Supply
Agreement dated as of March 30, 1995 between Houba, Inc. and ZetaPharm,
Inc. (incorporated by reference to Exhibit 10.14 to the March 1995
8-K).
|
EXHIBIT
NUMBER
|
DOCUMENT
|
|
10.25
|
Form
of 10% Convertible Subordinated Debenture (incorporated by reference
to
Exhibit 6(a) to the June 1995 10-Q).
|
|
10.26
|
Form
of Redeemable Common Stock Purchase Warrant (incorporated by reference
to
Exhibit 6(a) to the June 1995 10-Q).
|
|
10.27
|
Form
of 10% Convertible Subordinated Debenture (incorporated by reference
to
Exhibit 4.1 to the Registrant's Current Report on Form 8-K dated
December
4, 1995 (the "December 1995 8-K")).
|
|
10.28
|
Form
of Redeemable Common Stock Purchase Warrant (incorporated by reference
to
Exhibit 4.2 to the December 1995 8-K).
|
|
10.29
|
Form
of 10% Convertible Subordinated Debenture (incorporated by reference
to
Exhibit 99 to the June 1996 10-Q).
|
|
10.30
|
Form
of Redeemable Common Stock Purchase Warrant (incorporated by reference
to
Exhibit 4.1 to Amendment No. 1 to the June 1996 10-Q).
|
|
10.31
|
Form
of 5% Convertible Senior Secured Debenture (incorporated by reference
to
Exhibit 4.1 to the Registrant's Current Report on Form 8-K dated
March 24,
1998 (the "March 1998 8-K")).
|
|
10.32
|
Form
of Common Stock Purchase Warrant (incorporated by reference to Exhibit
4.2
to the March 1998 8-K).
|
|
10.33
|
Debenture
and Warrant Purchase Agreement dated March 10, 1998, by and among
the
Registrant, Galen Partners III, L.P. and the other Purchasers listed
on
the signature page thereto (incorporated by reference to Exhibit
10.1 to
the March 1998 8-K).
|
|
10.34
|
Form
of General Security Agreement of Registrant dated March 10, 1998
(incorporated by reference to Exhibit 10.2 to the March 1998
8-K).
|
|
10.35
|
Form
of Agreement of Guaranty of Subsidiaries of Registrant dated March
10,
1998 (incorporated by reference to Exhibit 10.3 to the March 1998
8-K).
|
|
10.36
|
Form
of Guarantor General Security Agreement dated March 10, 1998 (incorporated
by reference to Exhibit 10.4 to the March 1998 8-K).
|
|
10.37
|
Stock
Pledge Agreement dated March 10, 1998 by and between the Registrant
and
Galen Partners III, L.P., as agent (incorporated by reference to
Exhibit
10.5 to the March 1998 8-K).
|
|
10.38
|
Form
of Irrevocable Proxy Agreement (incorporated by reference to Exhibit
10.6
to the March 1998 8-K).
|
|
10.39
|
Agency
Letter Agreement dated March 10, 1998 by and among the purchasers
a party
to the Debenture and Warrant Purchase Agreement, dated March 10,
1998
(incorporated by reference to Exhibit 10.7 to the March 1998
8-K).
|
|
10.40
|
Press
Release of Registrant dated March 13, 1998 (incorporated by reference
to
Exhibit 99.1 to the March 1998 8-K).
|
|
10.41
|
Current
Report on Form 8-K as filed by the Registrant with the Securities
and
Exchange Commission on March 24, 1998.
|
|
10.42
|
Letter
Agreement between the Registrant and the U.S. Department of Justice
dated
March 27, 1998 relating to the restructuring of the fine assessed
by the
Department of Justice under the Plea Agreement dated June 21,
1993.
|
|
10.43
|
Employment
Agreement dated as of March 10, 1998 between the Registrant and Michael
K.
Reicher (incorporated by reference to Exhibit 10.43 to the Registrant's
Annual Report of Form 10-K for the year ended December 31, 1997 (the
"1997
Form 10-K")).
|
|
10.44
|
Employment
Agreement dated as of March 10, 1998 between the Registrant and Peter
Clemens (incorporated by reference to Exhibit 10.44 to the 1997 Form
10-K).
|
|
*10.44A
|
First
Amendment to Employment Agreement made as of June 28,
2000 between the Registrant and Peter Clemens
|
|
10.45
|
Second
Amendment to Executive Employment Agreement between Registrant and
Peter
A. Clemens, dated as of January 5, 2005 (incorporated by reference
to
Exhibit 10.1 to the Registrant's Current Report on Form 8-K dated
January
28, 2005).
|
|
10.46
|
Third
Amendment to Executive Employment Agreement dated December 22, 2005
between Registrant and Peter A. Clemens (incorporated by reference
to
Exhibit 10.3 to the Registrant’s Current Report on Form 8-K dated December
22, 2005 (the “December 2005 Form
8-K”).
|
EXHIBIT
NUMBER
|
DOCUMENT
|
|
10.47
|
Amended,
Restated and Consolidated Bridge Loan Agreement dated as of December
2,
1998 between the Registrant, Galen Partners III, L.P., Galen Partners
International III, L.P., Galen Employee Fund III, L.P. and the other
signatures thereto (incorporated by reference to Exhibit 10.45 to
the 1998
Form 10-K).
|
|
10.48
|
First
Amendment to Amended, Restated and Consolidated Bridge Loan Agreement
dated December 7, 1998 between the Registrant and the lenders listed
on
the signature page thereto (incorporated by reference to Exhibit
10.46 to
the 1998 Form 10-K).
|
|
10.49
|
Second
Amendment to Amended, Restated and Consolidated Bridge Loan Agreement
dated March 8, 1999 between the Registrant and the lenders listed
on the
signature page thereto (incorporated by reference to Exhibit 10.47
to the
1998 Form 10-K).
|
|
10.50
|
Form
of 10% Convertible Secured Note due May 30, 1999 (incorporated by
reference to Exhibit 10.48 to the 1998 Form 10-K).
|
|
10.51
|
Form
of Common Stock Purchase Warrant issued pursuant to be Amended, Restated
and Consolidated Bridge Loan Agreement (incorporated by reference
to
Exhibit 10.49 to the 1998 Form 10-K).
|
|
10.52
|
Amended
and Restated General Security Agreement dated December 2, 1998 between
the
Company and Galen Partners III, L.P., as Agent (incorporated by reference
to Exhibit 10.50 to the 1998 Form 10-K).
|
|
10.53
|
Subordination
Agreement dated December 2, 1998 between the Registrant and Galen
Partners
III, L.P., as Agent (incorporated by reference to Exhibit 10.51 to
the
1998 Form 10-K).
|
|
10.54
|
Agency
Letter Agreement dated December 2, 1998 by and among the lenders
a party
to the Amended, Restated and Consolidated Bridge Loan Agreement,
as
amended (incorporated by reference to Exhibit 10.52 to the 1998 Form
10-K).
|
|
10.55
|
Lease
Agreement dated March 17, 1999 between the Registrant and Par
Pharmaceuticals, Inc. (incorporated by reference to Exhibit 10.53
to the
1998 Form 10-K).
|
|
10.56
|
Lease
Agreement dated September 1, 1998 between the Registrant and Crimson
Ridge
Partners (incorporated by reference to Exhibit 10.54 to the 1998
Form
10-K).
|
|
10.57
|
Manufacturing
and Supply Agreement dated March 17, 1999 between the Registrant
and Par
Pharmaceuticals, Inc. (incorporated by reference to Exhibit 10.55
to the
1998 Form 10-K).
|
|
10.58
|
Registrant’s
1998 Stock Option Plan (incorporated by reference to Exhibit 10.56
to the
1998 Form 10-K).
|
|
10.59
|
Loan
Agreement dated March 29, 2000 between the Registrant and Watson
Pharmaceuticals, Inc. (incorporated by reference to Exhibit 10.57
to the
Registrant's Current Report on Form 8-K dated March 29, 2000 (the
"March
2000 8-K")).+
|
|
10.60
|
Amendment
to Loan Agreement dated March 31, 2000 between the Registrant and
Watson
Pharmaceuticals, Inc. (incorporated by reference to Exhibit 10.58
to the
March 2000 8-K).
|
|
10.61
|
Secured
Promissory Note in the principal amount of $17,500,000 issued by
the
Registrant, as the maker, in favor of Watson Pharmaceuticals, Inc.
dated
March 31, 2000 (incorporated by reference to Exhibit 10.59 to the
March
2000 8-K).
|
|
10.62
|
Watson
Security Agreement dated March 29, 2000 between the Registrant and
Watson
Pharmaceuticals, Inc. (incorporated by reference to Exhibit 10.60
to the
March 2000 8-K).
|
|
10.63
|
Stock
Pledge Agreement dated March 29, 2000 between the Registrant and
Watson
Pharmaceuticals, Inc. (incorporated by reference to Exhibit 10.61
to the
March 2000 8-K).
|
|
10.64
|
Watson
Guarantee dated March 29, 2000 between Houba, Inc. and Watson
Pharmaceuticals, Inc., as the guarantors, in favor of Watson
Pharmaceuticals, Inc. (incorporated by reference to Exhibit 10.62
to the
March 2000 8-K).
|
|
10.65
|
Watson's
Guarantors Security Agreement dated March 29, 2000 between Halsey
Pharmaceuticals, Inc., Houba, Inc. and Watson Pharmaceuticals, Inc.
(incorporated by reference to Exhibit 10.63 to the March 2000
8-K).
|
|
10.66
|
Subordination
Agreement dated March 29, 2000 by and among the Registrant, Watson
Pharmaceuticals, Inc. and the holders of the Registrant's outstanding
5%
convertible debentures due March 10, 2003. (incorporated by reference
to
Exhibit 10.64 to the March 2000 8-K).+
|
|
10.67
|
Real
Estate Mortgage dated March 29, 2000 between Houba, Inc. and Watson
Pharmaceuticals, Inc. (incorporated by reference to Exhibit 10.65
to the
March 2000 8-K).
|
EXHIBIT
NUMBER
|
DOCUMENT
|
|
10.68
|
Subordination
Agreement by and among Houba, Inc., Galen Partners, III, L.P., Oracle
Strategic Partners, L.P. and Watson Pharmaceuticals, Inc. (incorporated
by
reference to Exhibit 10.66 to the March 2000 8-K).
|
|
10.69
|
Product
Purchase Agreement dated March 29, 2000 between the Registrant and
Watson
Pharmaceuticals, Inc. (incorporated by reference to Exhibit 10.67
to the
March, 2000 8-K).+
|
|
10.70
|
Finished
Goods Supply Agreement dated March 29, 2000 between the Registrant
and
Watson Pharmaceuticals, Inc. (incorporated by reference to Exhibit
10.68
to the March 2000 8-K).+
|
|
10.71
|
Active
Ingredient Supply Agreement dated March 29, 2000 between the Registrant
and Watson Pharmaceuticals, Inc. (incorporated by reference to Exhibit
10.69 to the March 2000 8-K).+
|
|
10.72
|
Right
of First Negotiation Agreement dated March 29, 2000 between the Registrant
and Watson Pharmaceuticals, Inc. (incorporated by reference to Exhibit
10.70 to the March 2000 8-K).+
|
|
10.73
|
Finished
Goods Supply Agreement (Core Products) dated March 29, 2000 between
the
Registrant and Watson Pharmaceuticals, Inc. (incorporated by reference
to
Exhibit 10.71 to the March 2000 8-K).+
|
|
10.74
|
Debenture
and Warrant Purchase Agreement dated May 26, 1999 by and among the
Registrant, Oracle Strategic Partners, L.P. and the other purchasers
listed on the signature page thereto (the "Oracle Purchase Agreement")
(incorporated by reference to Exhibit 10.72 to the Registrant's Annual
Report on Form 10-K for the year ended December 31,1999 (the “1999 Form
10-K”)).
|
|
10.75
|
Form
of 5% Convertible Senior Secured Debenture issued pursuant to the
Oracle
Purchase Agreement (incorporated by reference to Exhibit 10.73 to
the 1999
Form 10-K.
|
|
10.76
|
Form
of Common Stock Purchase Warrant issued pursuant to the Oracle Purchase
Agreement (incorporated by reference to Exhibit 10.74 to the 1999
Form
10-K.
|
|
10.77
|
Lease
Termination and Settlement Agreement dated March 20, 2000 between
the
Registrant and Atlantic Properties Company in respect of the Registrant's
Brooklyn, New York leased facility (incorporated by reference to
Exhibit
10.75 to the 1999 Form 10-K).
|
|
10.78
|
Debenture
Purchase Agreement dated December 20, 2002 by and among the Registrant,
Care Capital Investments II, LP, Essex Woodlands Health Ventures
V, L.P.
and the other purchasers listed on the signature page thereto (the
"2002
Debentureholders") (incorporated by reference to Exhibit 10.1 to
the
Registrant’s current report on Form 8-K dated December 27, 2002 (the
“December 2002 Form 8-K”)).
|
|
10.79
|
Form
of General Security Agreement dated December 20, 2002 between the
Registrant and the 2002 Debentureholders (incorporated by reference
to
Exhibit 10.2 to the December 2002 Form 8-K).
|
|
10.80
|
Form
of Agreement of Guaranty of Subsidiaries of the Registrant dated
December
20, 2002 between Houba, Inc., Halsey Pharmaceuticals, Inc. and the
2002
Debentureholders (incorporated by reference to Exhibit 10.3 to the
December 2002 Form 8-K).
|
|
10.81
|
Form
of Guarantor General Security Agreement between the Guarantors and
the
2002 Debentureholders dated December 20, 2002 (incorporated by reference
to Exhibit 10.4 to the December 2002 Form 8-K).
|
|
10.82
|
Stock
Pledge Agreement dated December 20, 2002 by and between the Registrant
and
Galen Partners III, L.P., as agent (incorporated by reference to
Exhibit
10.5 to the December 2002 Form 8-K).
|
|
10.83
|
Voting
Agreement dated December 20, 2002 (incorporated by reference to Exhibit
10.6 to the December 2002 Form 8-K).
|
|
10.84
|
Debentureholders
Agreement dated December 20, 2002 (incorporated by reference to Exhibit
10.7 to the December 2002 Form 8-K).
|
|
10.85
|
Amendment
to Debenture and Warrant Purchase Agreement between the Registrant,
Galen
Partners III, L.P. and other signatories thereto, dated December
20, 2002,
amending the Debenture and Warrant Purchase Agreement dated March
10, 1998
between the Company, Galen Partners III, L.P. and the other signatories
thereto (incorporated by reference to Exhibit 10.8 to the December
2002
Form 8-K).
|
|
10.86
|
Amendment
to Debenture and Warrant Purchase Agreement between the Registrant,
Oracle
Strategic Partners, L.P. and the other signatories thereto, dated
December
20, 2002, amending the Debenture and Warrant Purchase Agreement dated
May
26, 1999 between the Company, Oracle Strategic Partners, L.P. and
the
other signatories thereto (incorporated by reference to Exhibit 10.9
to
the December 2002 Form 8-K).
|
EXHIBIT
NUMBER
|
DOCUMENT
|
|
10.87
|
Amended
and Restated 5% Convertible Senior Secured Debenture due March 31,
2006
(incorporated by reference to Exhibit 10.10 to the December 2002
Form
8-K).
|
|
10.88
|
Second
Amendment to Loan Agreement dated December 20, 2002, between the
Registrant and Watson Pharmaceuticals, Inc., amending the Loan Agreement
dated March 29, 2000 between the Registrant and Watson Pharmaceuticals,
Inc. (incorporated by reference to Exhibit 10.11 to the December
2002 Form
8-K).
|
|
10.89
|
Amended
and Restated Secured Promissory Note dated December 20, 2002, issued
by
the Registrant in favor of Watson Pharmaceuticals, Inc. in the principal
amount $17,500,000 (incorporated by reference to Exhibit 10.12 to
the
December 2002 Form 8-K).
|
|
10.90
|
Second
Amendment to Finished Goods Supply Agreement (Core Products) dated
December 20, 2002, between the Registrant and Watson Pharmaceuticals,
Inc.
amending the Finished Goods Supply Agreement (Core Products) dated
March
29, 2000 2008 (incorporated by reference to Exhibit 10.13 to the
December
2002 Form 8-K).
|
|
10.91
|
Watson
Common Stock Purchase Warrant dated December 20, 2002 (incorporated
by
reference to Exhibit 10.14 to the December 2002 Form
8-K).
|
|
10.92
|
Registration
Rights Agreement dated December 20, 2002 (incorporated by reference
to
Exhibit 10.15 to the December 2002 Form 8-K).
|
|
10.93
|
Warrant
Recapitalization Agreement dated December 20, 2002 (incorporated
by
reference to Exhibit 10.15 to the December 2002 Form
8-K).
|
|
10.94
|
Debenture
and Share Purchase Agreement dated as of February 6, 2004 by and
among the
Registrant, Care Capital Investments, II, LP, Essex Woodlands Health
Ventures V, L.P., Galen Partners III, L.P. and the other purchasers
listed
on the signature page thereto (incorporated by reference to Exhibit
10.1
of the February 2004 Form 8-K).
|
|
10.95
|
Debenture
Conversion Agreement dated as of February 6, 2004 by and among the
Registrant, Care Capital, Essex Woodlands, Galen Partners and the
other
signatories thereto (incorporated by reference to Exhibit 10.2 of
the
February 2004 Form 8-K).
|
|
10.96
|
Amended
and Restated Certificate of Incorporation of the Registrant (incorporated
by reference to Exhibit 10.3 of the February 2004 Form
8-K).
|
|
10.97
|
Investor
Rights Agreement dated as of February 6, 2004 by and among the Registrant,
Care Capital, Essex Woodlands, Galen Partners and the other signatories
thereto (incorporated by reference to Exhibit 10.4 of the February
2004
Form 8-K).
|
|
10.98
|
Amended
and Restated Voting Agreement dated as of February 6, 2004 by and
among
the Registrant, Care Capital, Essex Woodlands, Galen Partners and
the
other signatories thereto (incorporated by reference to Exhibit 10.5
of
the February 2004 Form 8-K).
|
|
10.99
|
Amended
and Restated Registration Rights Agreement dated as of February 6,
2004 by
and among the Registrant, Watson Pharmaceuticals, Care Capital, Essex
Woodlands, Galen Partners and the other signatories thereto (incorporated
by reference to Exhibit 10.6 of the February 2004 Form
8-K).
|
|
10.100
|
Amended
and Restated Subordination Agreement dated as of February 6, 2004
by and
among the Registrant, Care Capital, Essex Woodlands, Galen Partners
and
the other signatories thereto (incorporated by reference to Exhibit
10.7
of the February 2004 Form 8-K).
|
|
10.101
|
Company
General Security Agreement (incorporated by reference to Exhibit
10.8 of
the February 2004 Form 8-K).
|
|
10.102
|
Form
of Unconditional Agreement of Guaranty (incorporated by reference
to
Exhibit 10.9 of the February 2004 Form 8-K).
|
|
10.103
|
Form
of Guarantor Security Agreement (incorporated by reference to Exhibit
10.10 of the February 2004 Form 8-K).
|
|
10.104
|
Stock
Pledge Agreement dated as of February 6, 2004 by and between the
Registrant and Galen Partners, as agent (incorporated by reference
to
Exhibit 10.11 of the February 2004 Form
8-K).
|
EXHIBIT
NUMBER
|
DOCUMENT
|
|
10.105
|
Umbrella
Agreement dated as of February 6, 2004 by and among the Registrant,
Watson
Pharmaceuticals, Care Capital, Essex Woodlands, Galen Partners and
the
other signatories thereto (incorporated by reference to Exhibit 10.12
of
the February 2004 Form 8-K).
|
|
10.106
|
Third
Amendment to Loan Agreement dated as of February 6, 2004 by and among
the
Registrant and Watson Pharmaceuticals (incorporated by reference
to
Exhibit 10.13 of the February 2004 Form 8-K).
|
|
10.107
|
Amended
and Restated Promissory Note in the principal amount of $5,000,000
issued
by the Registrant in favor of Watson Pharmaceuticals (incorporated
by
reference to Exhibit 10.14 of the February 2004 Form
8-K).
|
|
10.108
|
Hydrocodone
API Supply Option Agreement dated as of February 6, 2004 between
the
Registrant and Watson Pharmaceuticals (incorporated by reference
to
Exhibit 10.15 of the February 2004 Form 8-K).
|
|
10.109
|
Noteholders
Agreement dated as of February 6, 2004 by and among the Registrant,
Care
Capital, Essex Woodlands, Galen Partners and the other signatories
thereto
(incorporated by reference to Exhibit 10.16 of the February 2004
Form
8-K).
|
|
10.110
|
Asset
Purchase Agreement dated March 19, 2004 by and among the Registrant,
Axiom
Pharmaceutical Corporation and IVAX Pharmaceuticals New York LLC
(incorporated by reference to Exhibit 2.1 of the Registrant's Form
8-K
filed March 25, 2004 (the "March 2004 Form 8-K")).
|
|
10.111
|
Voting
Agreement dated March 19, 2004 by and among the Registrant, IVAX
Pharmaceuticals New York LLC and certain holders of Halsey Drug Co.,
Inc.
voting securities (incorporated by reference to Exhibit 10.1 of the
March
2004 Form 8-K).
|
|
10.112
|
Use
and License Agreement dated March 19, 2004 by and among the Registrant,
Axiom Pharmaceutical Corporation and IVAX Pharmaceuticals New York
LLC
(incorporated by reference to Exhibit 10.2 of the March 2004 Form
8-K.)
|
|
10.113
|
Executive
Employment Agreement dated as of November 18, 2002 between the Registrant
and Vijai Kumar (incorporated by reference to Exhibit 10.1 to the
Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30,
2004 (the “June 2004 10-Q”)).
|
|
10.114
|
Executive
Employment Agreement dated as of August 26, 2003 between the Registrant
and Andrew D. Reddick (incorporated by reference to Exhibit 10.2
to June
2004 10-Q).
|
|
10.115
|
Amendment
to Executive Employment Agreement between the Registrant and Andrew
D.
Reddick, dated May 27, 2004 (incorporated by reference to Exhibit
10.4 to
the June 2004 10-Q).
|
|
*10.116
|
Second
Amendment to Executive Employment Agreement between the Registrant
and
Andrew D. Reddick, dated May 24, 2005.
|
|
10.117
|
Third
Amendment to Executive Employment Agreement between the Registrant
and
Andrew D. Reddick, dated December 22, 2005 (incorporated by reference
to
Exhibit 10.1 to the December 2005 Form 8-K).
|
|
10.118
|
Executive
Employment Agreement dated as of April 5, 2004 between the Registrant
and
Ron J. Spivey (incorporated by reference to Exhibit 10.3 to the June
2004
10-Q).
|
|
10.119
|
Amendment
to Executive Employment Agreement dated December 22, 2005 between
Registrant and Ron J. Spivey (incorporated by reference to Exhibit
10.2 to
the December 2005 Form 8-K).
|
|
10.120
|
Separation
Agreement and General Release dated September 18, 2003 between the
Registrant and Michael K. Reicher (incorporated by reference to Exhibit
10.5 to June 2004 10-Q).
|
|
10.121
|
First
Amendment to Separation Agreement and General Release between the
Registrant and Michael K. Reicher, December 4, 2003 (incorporated
by
reference to Exhibit 10.6 to June 2004 10-Q).
|
|
10.122
|
Asset
Purchase Agreement dated as of February 18, 2004 by and between the
Registrant and Mutual Pharmaceutical Company, Inc. (incorporated
by
reference to Exhibit 10.7 to June 2004 10-Q).
|
|
10.123
|
Amendment
to Debenture and Share Purchase Agreement by and among the Registrant,
Care Capital Investments II, LP, Essex Woodlands Health Ventures
V, L.P.
and other signatories thereto, dated as of June 1, 2004 (incorporated
by
reference to Exhibit 10.8 to June 2004 10-Q).
|
|
10.124
|
First
Amendment to Debenture Purchase Agreement by and among the Registrant,
Galen Partner III, L.P., Care Capital Investments II, LP, Essex Woodlands
Health Ventures V, L.P. and other signatories thereto, dated as of
August
11, 2004 (incorporated by reference to Exhibit 10.9 to June 2004
10-Q).
|
EXHIBIT
NUMBER
|
DOCUMENT
|
|
10.125
|
Letter
of Support from Galen Partner III, L.P., Care Capital Investments
II, LP,
and Essex Woodlands Health Ventures V, L.P. to the Registrant, dated
May
5, 2003 (incorporated by reference to Exhibit 10.10 to June 2004
10-Q).
|
|
10.126
|
Loan
Agreement dated June 22, 2005 between the Registrant, Essex Woodlands
Health Venture V, L.P., Care Capital Investments II, L.P., Care Capital
Offshore Investments II, L.P., Galen Partners III, L.P., Galen Partners
International III, L.P., and Galen Employee Fund III, L.P. (incorporated
by reference to Exhibit 10.1 to the Registrant's Current Report on
Form
8-K dated June 22, 2005 (the “June 2005 Form 8-K”)).
|
|
10.127
|
Subordination
Agreement dated June 22, 2005 between the Registrant, Essex Woodlands
Health Venture V, L.P., Care Capital Investments II, L.P., Care Capital
Offshore Investments II, L.P., Galen Partners III, L.P., Galen Partners
International III, L.P., Galen Employee Fund III, L.P., and the other
signatories thereto (incorporated by reference to Exhibit 10.3 of
the June
2005 Form 8-K).
|
|
10.128
|
Company
General Security Agreement dated June 22, 2005 by and between Registrant
and Galen Partners III, L.P., as Agent (incorporated by reference
to
Exhibit 10.4 of the June 2005 Form 8-K).
|
|
10.129
|
Guaranty
of Axiom Pharmaceutical Corporation dated June 22, 2005 (incorporated
by
reference to Exhibit 10.5 of the June 2005 Form 8-K).
|
|
10.130
|
Guaranty
of Acura Pharmaceutical Technologies, Inc. dated June 22, 2005
(incorporated by reference to Exhibit 10.6 of the June 2005 Form
8-K).
|
|
10.131
|
Guarantors
Security Agreement by and among Axiom Pharmaceutical Corporation,
Registrant, and Galen Partners III, L.P., as Agent, dated June 22,
2005
(incorporated by reference to Exhibit 10.7 of the June 2005 Form
8-K).
|
|
10.132
|
Stock
Pledge Agreement by and between Registrant and Galen Partners III,
L.P.,
as Agent, dated June 22, 2005 (incorporated by reference to Exhibit
10.8
of the June 2005 Form 8-K).
|
|
10.133
|
Loan
Agreement dated September 16, 2005 between the Registrant, Essex
Woodlands
Health Venture V, L.P., Care Capital Investments II, L.P., Care Capital
Offshore Investments II, L.P., Galen Partners III, L.P., Galen Partners
International III, L.P., and Galen Employee Fund III, L.P. (incorporated
by reference to Exhibit 10.1 to the Registrant's Current Report on
Form
8-K dated September 16, 2005 (the “September 2005 Form 8-K”)).
|
|
10.134
|
Subordination
Agreement dated September 16, 2005 between the Registrant, Essex
Woodlands
Health Venture V, L.P., Care Capital Investments II, L.P., Care Capital
Offshore Investments II, L.P., Galen Partners III, L.P., Galen Partners
International III, L.P., Galen Employee Fund III, L.P., and the other
signatories thereto (incorporated by reference to Exhibit 10.3 of
the
September 2005 Form 8-K).
|
|
10.135
|
Company
General Security Agreement dated September 16, 2005 by and between
Registrant and Galen Partners III, L.P., as Agent (incorporated by
reference to Exhibit 10.4 of the September 2005 Form 8-K).
|
|
10.136
|
Guaranty
of Axiom Pharmaceutical Corporation dated September 16, 2005 (incorporated
by reference to Exhibit 10.5 of the September 2005 Form 8-K).
|
|
10.137
|
Guaranty
of Acura Pharmaceutical Technologies, Inc. dated September 16, 2005
(incorporated by reference to Exhibit 10.6 of the September 2005
Form
8-K).
|
|
10.138
|
Guarantors
Security Agreement by and among Axiom Pharmaceutical Corporation,
Registrant, and Galen Partners III, L.P., as Agent, dated September
16,
2005 (incorporated by reference to Exhibit 10.7 of the September
2005 Form
8-K).
|
|
10.139
|
Stock
Pledge Agreement by and between Registrant and Galen Partners III,
L.P.,
as Agent, dated September 16, 2005 (incorporated by reference to
Exhibit
10.8 of the September 2005 Form 8-K).
|
|
10.140
|
Joinder
and Amendment to Amended and Restated Voting Agreement dated November
9,
2005 between the Registrant, GCE Holdings, Essex Woodlands Health
Venture
V, L.P., Care Capital Investments II, L.P., Care Capital Offshore
Investments II, L.P., Galen Partners III, L.P., Galen Partners
International III, L.P., and Galen Employee Fund III, L.P. (incorporated
by reference to Exhibit 10.1 to the Registrant's Current Report on
Form
8-K dated November 9, 2005 (the “November 2005 Form 8-K”)).
|
|
10.141
|
Loan
Agreement dated November 9, 2005 between the Registrant, Essex Woodlands
Health Venture V, L.P., Care Capital Investments II, L.P., Care Capital
Offshore Investments II, L.P., Galen Partners III, L.P., Galen Partners
International III, L.P., and Galen Employee Fund III, L.P. and the
Additional Lenders that become a party thereto (incorporated by reference
to Exhibit 10.2 of the November 2005 Form 8-K).
|
EXHIBIT
NUMBER
|
DOCUMENT
|
|
10.142
|
Subordination
Agreement dated November 9, 2005 between the Registrant, Essex Woodlands
Health Venture V, L.P., Care Capital Investments II, L.P., Care Capital
Offshore Investments II, L.P., Galen Partners III, L.P., Galen Partners
International III, L.P., Galen Employee Fund III, L.P., and the other
signatories thereto (incorporated by reference to Exhibit 10.4 of
the
November 2005 Form 8-K).
|
|
10.143
|
Company
General Security Agreement dated November 9, 2005 by and between
Registrant and Galen Partners III, L.P., as Agent (incorporated by
reference to Exhibit 10.5 of the November 2005 Form
8-K).
|
|
10.144
|
Guaranty
of Axiom Pharmaceutical Corporation dated November 9, 2005 (incorporated
by reference to Exhibit 10.6 of the November 2005 Form 8-K).
|
|
10.145
|
Guaranty
of Acura Pharmaceutical Technologies, Inc. dated November 9, 2005
(incorporated by reference to Exhibit 10.7 of the November 2005 Form
8-K).
|
|
10.146
|
Guarantors
Security Agreement by and among Axiom Pharmaceutical Corporation,
Registrant, and Galen Partners III, L.P., as Agent, dated November
9, 2005
(incorporated by reference to Exhibit 10.8 of the November 2005 Form
8-K).
|
|
10.147
|
Stock
Pledge Agreement by and between Registrant and Galen Partners III,
L.P.,
as Agent, dated November 9, 2005 (incorporated by reference to Exhibit
10.9 of the November 2005 Form 8-K).
|
|
*10.148
|
Voting
Agreement by and between Registrant and GCE Holdings, LLC dated as
of
December 22, 2005
|
|
10.149
|
Registrant’s
2005 Restricted Stock Unit Award Plan (incorporated by reference
to
Exhibit 10.4 to the December 2005 Form 8-K).
|
|
14
|
Code
of Ethics (incorporated by reference to Exhibit 14 of the Registrant’s
Form 10-K filed April 22, 2004 (the “2003 Form 10-K”).
|
|
*21
|
Subsidiaries
of the Registrant.
|
|
*23.1
|
Consent
of Grant Thornton LLP, independent registered public accounting firm,
dated February 16, 2006 to the incorporation by reference of its
report to
the consolidated financial statements of the Registrant for the year
ended
December 31, 2003 contained in its Form 10-K into the registrant's
Registration Statements on Form S-8 (Registration Nos. 333-63288
and
33-98356).
|
|
*23.2
|
Consent
of BDO Seidman LLP, independent registered public accounting firm,
to the
incorporation by reference of its report to the consolidated financial
statements of the Registrant for the years ended December 31, 2005
and
2004 contained in its Form 10-K into the Registrant’s Registration
Statements on Form S-8 (Registration Nos. 333-63288 and
33-98356).
|
|
*31.1
|
Certification
of Periodic Report by Chief Executive Officer pursuant to Rule 13a-14
and
15d-14 of the Securities Exchange Act of 1934.
|
|
*31.2
|
Certification
of Periodic Report by Chief Financial Officer pursuant to Rule 13a-14
and
15d-14 of the Securities Exchange Act of 1934.
|
|
*32.1
|
Certification
of Periodic Report by Chief Executive Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act
of 2002.
|
|
*32.2
|
Certification
of Periodic Report by Chief Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act
of 2002.
|
* |
Filed
herewith.
|
+ |
A
portion of this exhibit has been omitted pursuant to an application
for
confidential treatment pursuant to Rule 24b-2 of the Securities Exchange
Act of 1934, as amended.
|