We maintain an administrative office in Summit, New Jersey and currently
outsource all of our product development and regulatory activities, including
clinical trial activities, manufacturing and laboratory operations to
third-party contract research organizations, consultants and facilities.
In April 2009, under prior management, we ceased all operations and terminated
all employees in light of insufficient funds to continue our clinical trials and
related product development. Our business was dormant until new management took
control of our operations in November 2009 following the "change in control"
transaction described below. We are currently actively pursuing the commercial
development of PRTX-100 for the treatment of RA.
On December 8, 2010, we effected a reverse stock split of the outstanding shares
of our common stock, with par value of $0.00001 per share ("Common Stock"), on
the basis of one new share of Common Stock for each five shares of Common Stock
outstanding. All references in this Report to number of shares, price per share
and weighted average number of shares outstanding of Common Stock prior to this
reverse stock split have been adjusted to reflect the reverse stock split on a
retroactive basis, unless otherwise noted.
Change in Control Transaction and Incremental Financing
On November 11, 2009 (the "Effective Date"), we consummated a financing
transaction (the "Financing") in which we raised $3,000,000 of working capital
pursuant to a Securities Purchase Agreement (the "Purchase Agreement") with
Niobe Ventures, LLC, a Delaware limited liability company ("Niobe"). Pursuant to
the Purchase Agreement, we issued to Niobe (i) 8,695,652 restricted shares of
our Common Stock at a purchase price of $0.23 per share (or $2 million in the
aggregate) and (ii) a senior secured convertible promissory note in the
principal amount of $1 million convertible into shares of our Common Stock at an
initial conversion price equal to $0.23 per share (the "$1 Million Secured
Note"). On February 11, 2011, Niobe converted the $1 Million Secured Note,
including $37,500 of accrued interest thereon, into 4,510,870 shares of Common
As contemplated by the Purchase Agreement, all of our executive officers and all
of the members of our Board of Directors (the "Board") prior to the closing of
the Financing, with the exception of Frank M. Dougherty
, resigned effective
concurrently with the closing of the Financing. Mr. Dougherty
upon the expiration of the 10-day notice period required by Rule 14f-1 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). In addition,
effective upon the closing of the Financing, our Board appointed Arnold P. Kling
as a director and then elected him as our president and elected Kirk M. Warshaw
as our chief financial officer and secretary.
In addition, on the Effective Date, we terminated (i) the Investor Rights
Agreement dated September 18, 2003
among us, vSpring SBIC L.P.
certain of the investors set forth on Schedule A thereto and the Registration
Rights Agreement dated May 25, 2005
among us, vSpring and certain of the
investors set forth on Schedule I thereto in accordance with their respective
terms and (ii) stock options exercisable for an aggregate of 246,714 shares of
Common Stock (approximately 41% of our then outstanding stock options).