AVI
BIOPHARMA, INC.
(A
Development Stage Company)
BALANCE SHEETS
(unaudited)
|
|
March 31,
|
|
December 31,
|
|
|
|
2007
|
|
2006
|
|
|
|
(Restated)
|
|
(Restated)
|
|
Assets
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
14,964,915
|
|
$
|
20,159,201
|
|
Short-term
securitiesavailable-for-sale
|
|
12,081,196
|
|
12,992,931
|
|
Accounts
receivable
|
|
551,783
|
|
51,498
|
|
Other current
assets
|
|
709,486
|
|
736,283
|
|
Total Current
Assets
|
|
28,307,380
|
|
33,939,913
|
|
|
|
|
|
|
|
Property and
Equipment, net of accumulated depreciation and amortization of $10,603,407 and
$10,174,712
|
|
4,103,482
|
|
4,329,583
|
|
Patent Costs,
net of accumulated amortization of $1,533,630 and $1,496,699
|
|
2,611,476
|
|
2,558,541
|
|
Other Assets
|
|
284,709
|
|
34,709
|
|
Total Assets
|
|
$
|
35,307,047
|
|
$
|
40,862,746
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
and Shareholders Equity
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
Accounts payable
|
|
$
|
1,889,929
|
|
$
|
1,401,584
|
|
Accrued employee
compensation
|
|
1,021,336
|
|
1,371,353
|
|
Warrant
liability
|
|
3,693,885
|
|
5,192,576
|
|
Other
liabilities
|
|
1,435,490
|
|
377,908
|
|
Total Current
Liabilities
|
|
8,040,640
|
|
8,343,421
|
|
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders
Equity:
|
|
|
|
|
|
Preferred stock,
$.0001 par value, 20,000,000 shares authorized; none issued and outstanding
|
|
|
|
|
|
Common stock,
$.0001 par value, 200,000,000 shares authorized; 53,282,841 and 53,182,841 issued
and outstanding
|
|
5,328
|
|
5,318
|
|
Additional
paid-in capital
|
|
234,658,816
|
|
231,685,419
|
|
Accumulated
other comprehensive income
|
|
16,377
|
|
18,418
|
|
Deficit
accumulated during the development stage
|
|
(207,414,114
|
)
|
(199,189,830
|
)
|
Total
Shareholders Equity
|
|
27,266,407
|
|
32,519,325
|
|
Total
Liabilities and Shareholders Equity
|
|
$
|
35,307,047
|
|
$
|
40,862,746
|
|
See
accompanying notes to financial statements.
2
AVI
BIOPHARMA, INC.
(A
Development Stage Company)
STATEMENTS OF OPERATIONS
(unaudited)
|
|
|
|
|
|
July 22, 1980
|
|
|
|
Three months ended March 31,
|
|
(Inception) to
|
|
|
|
2007
|
|
2006
|
|
March 31, 2007
|
|
|
|
(Restated)
|
|
(Restated)
|
|
(Restated)
|
|
|
|
|
|
|
|
|
|
Revenues from
license fees, grants and research contracts
|
|
$
|
536,042
|
|
$
|
65,962
|
|
$
|
10,516,861
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development
|
|
6,317,641
|
|
6,763,245
|
|
153,964,856
|
|
General and
administrative
|
|
4,303,885
|
|
2,821,726
|
|
45,124,413
|
|
Acquired
in-process research and development
|
|
|
|
|
|
19,545,028
|
|
|
|
10,621,526
|
|
9,584,971
|
|
218,634,297
|
|
|
|
|
|
|
|
|
|
Other income
(loss):
|
|
|
|
|
|
|
|
Interest income,
net
|
|
362,509
|
|
457,859
|
|
7,812,051
|
|
Gain (loss) on
warrant liability
|
|
1,498,691
|
|
(14,195,376
|
)
|
6,030,117
|
|
Realized gain on
sale of short-term securitiesavailable-for-sale
|
|
|
|
|
|
3,862,502
|
|
Write-down of
short-term securitiesavailable-for-sale
|
|
|
|
|
|
(17,001,348
|
)
|
|
|
1,861,200
|
|
(13,737,517
|
)
|
703,322
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(8,224,284
|
)
|
$
|
(23,256,526
|
)
|
$
|
(207,414,114
|
)
|
|
|
|
|
|
|
|
|
Net loss per
share - basic and diluted
|
|
$
|
(0.15
|
)
|
$
|
(0.45
|
)
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding for computing basic and diluted loss per
share
|
|
53,241,730
|
|
51,715,050
|
|
|
|
See
accompanying notes to financial statements.
3
AVI
BIOPHARMA, INC.
(A
Development Stage Company)
STATEMENTS OF CASH FLOWS
(unaudited)
|
|
|
|
|
|
For the Period
|
|
|
|
|
|
|
|
July 22, 1980
|
|
|
|
Three months ended March 31,
|
|
(Inception) to
|
|
|
|
2007
|
|
2006
|
|
March 31, 2007
|
|
|
|
(Restated)
|
|
(Restated)
|
|
(Restated)
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(8,224,284
|
)
|
$
|
(23,256,526
|
)
|
$
|
(207,414,114
|
)
|
Adjustments to
reconcile net loss to net cash flows used in operating activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
479,630
|
|
525,141
|
|
13,299,869
|
|
Loss on disposal
of assets
|
|
53,498
|
|
164,253
|
|
368,676
|
|
Realized gain on
sale of short-term securitiesavailable-for-sale
|
|
|
|
|
|
(3,862,502
|
)
|
Write-down of
short-term securitiesavailable-for-sale
|
|
|
|
|
|
17,001,348
|
|
Issuance of
common stock to vendors
|
|
300,000
|
|
700,000
|
|
1,675,000
|
|
Compensation
expense on issuance of common stock and partnership units
|
|
|
|
|
|
861,655
|
|
Compensation
expense to non-employees on issuance of options and warrants to purchase
common stock or partnership units
|
|
312,637
|
|
525,126
|
|
2,955,690
|
|
Stock-based
compensation
|
|
2,360,770
|
|
1,937,271
|
|
7,242,240
|
|
Conversion of
interest accrued to common stock
|
|
|
|
|
|
7,860
|
|
Acquired
in-process research and development
|
|
|
|
|
|
19,545,028
|
|
(Gain) loss on
warrant liability
|
|
(1,498,691
|
)
|
14,195,376
|
|
(6,030,117
|
)
|
(Increase)
decrease in:
|
|
|
|
|
|
|
|
Accounts
receivable and other current assets
|
|
(473,488
|
)
|
281,612
|
|
(1,261,269
|
)
|
Other assets
|
|
|
|
2,900
|
|
(34,709
|
)
|
Net increase
(decrease) in accounts payable, accrued employee compensation, and other
liabilities
|
|
1,195,910
|
|
(363,169
|
)
|
4,641,755
|
|
Net cash used in
operating activities
|
|
(5,494,018
|
)
|
(5,288,016
|
)
|
(151,003,590
|
)
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Purchase of
property and equipment
|
|
(464,029
|
)
|
(194,546
|
)
|
(15,762,540
|
)
|
Patent costs
|
|
(145,933
|
)
|
(94,999
|
)
|
(4,620,963
|
)
|
Purchase of
marketable securities
|
|
|
|
(1,026,087
|
)
|
(112,865,796
|
)
|
Sale of
marketable securities
|
|
909,694
|
|
902,117
|
|
105,710,131
|
|
Acquisition
costs
|
|
|
|
|
|
(2,377,616
|
)
|
Net cash
provided by (used in) investing activities
|
|
299,732
|
|
(413,515
|
)
|
(29,916,784
|
)
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Proceeds from
sale of common stock, warrants, and partnership units, net of offering costs,
and exercise of options and warrants
|
|
|
|
7,971,098
|
|
196,270,726
|
|
Buyback of
common stock pursuant to rescission offering
|
|
|
|
|
|
(288,795
|
)
|
Withdrawal of
partnership net assets
|
|
|
|
|
|
(176,642
|
)
|
Issuance of
convertible debt
|
|
|
|
|
|
80,000
|
|
Net cash
provided by financing activities
|
|
|
|
7,971,098
|
|
195,885,289
|
|
|
|
|
|
|
|
|
|
Increase
(decrease) in cash and cash equivalents
|
|
(5,194,286
|
)
|
2,269,567
|
|
14,964,915
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents:
|
|
|
|
|
|
|
|
Beginning of
period
|
|
20,159,201
|
|
34,597,734
|
|
|
|
End of period
|
|
$
|
14,964,915
|
|
$
|
36,867,301
|
|
$
|
14,964,915
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
SCHEDULE OF NONCASH INVESTING ACTIVITIES AND FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
Short-term
securitiesavailable-for-sale received in connection with the private
offering
|
|
$
|
|
|
$
|
|
|
$
|
17,897,000
|
|
Change in
unrealized gain on short-term securitiesavailable-for-sale
|
|
$
|
(2,041
|
)
|
$
|
1,890
|
|
$
|
16,377
|
|
Issuance of
common stock and warrants in satisfaction of liabilities
|
|
$
|
|
|
$
|
175,000
|
|
$
|
545,000
|
|
See
accompanying notes to financial statements.
4
AVI BIOPHARMA, INC.
NOTES TO
FINANCIAL STATEMENTS
(Unaudited)
Note 1. Basis of Presentation
The
financial information included herein for the three-month period ended March
31, 2007 and 2006 and the financial information as of March 31, 2007 is
unaudited; however, such information reflects all adjustments consisting only
of normal recurring adjustments, which, in the opinion of management, are
necessary for a fair presentation of the financial position, results of
operations and cash flows for the interim periods. The financial information as
of December 31, 2006 is derived from AVI BioPharma, Inc.s (the Companys)
Form 10-K. The interim financial statements should be read in conjunction with
the financial statements and the notes thereto included in the Companys Form
10-K. The results of operations for the interim periods presented are not
necessarily indicative of the results to be expected for the full year.
Stock-based compensation costs are generally based on the fair value
calculated from the Black-Scholes option-pricing model on the date of grant for
stock options and on the date of enrollment for the Plan. The fair value of
stock grants is amortized as compensation expense on a straight-line basis over
the vesting period of the grants. Stock options granted to employees are
service-based and typically vest over four years
.
The fair market values of stock options granted during the periods
presented were measured on the date of grant using the Black-Scholes
option-pricing model, with the following weighted average assumptions:
Three Months Ended March 31,
|
|
2007
|
|
2006
|
|
Risk-free
interest rate
|
|
4.91
|
%
|
4.07
|
%
|
Expected
dividend yield
|
|
0
|
%
|
0
|
%
|
Expected lives
|
|
8.0 years
|
|
9.3 years
|
|
Expected
volatility
|
|
90
|
%
|
91
|
%
|
The risk-free interest
rate is estimated using an average of treasury bill interest rates. The
expected dividend yield is zero as the Company has not paid any dividends to
date and does not expect to pay dividends in the future. The expected lives are
estimated using expected and historical exercise behavior. The expected
volatility is estimated using historical calculated volatility and considers
factors such as future events or circumstances that could impact volatility.
As part of the requirements of FSAS 123R, the Company is required to
estimate potential forfeiture of stock grants and adjust compensation cost
recorded accordingly. The estimate of forfeitures will be adjusted over the
requisite service period to the extent that actual forfeitures differ, or are
expected to differ, from such estimates. Changes in estimated forfeitures will
be recognized through a cumulative catch-up in the period of change and will
also impact the amount of stock compensation expense to be recognized in future
periods
.
5
A summary of the Companys
stock option compensation activity with respect to the fiscal quarter ended
March 31, 2007 follows:
Stock Options
|
|
Shares
|
|
Weighted
Average
Exercisable
Price
|
|
Weighted
Average
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic
Value
|
|
Outstanding at
January 1, 2007
|
|
5,571,470
|
|
$
|
5.12
|
|
|
|
|
|
Granted
|
|
1,137,548
|
|
$
|
2.78
|
|
|
|
|
|
Exercised
|
|
|
|
$
|
|
|
|
|
|
|
Canceled or
expired
|
|
(43,646
|
)
|
$
|
5.58
|
|
|
|
|
|
Outstanding at
March 31, 2007
|
|
6,665,372
|
|
$
|
4.72
|
|
6.07
|
|
$
|
(12,780,458
|
)
|
|
|
|
|
|
|
|
|
|
|
Vested at March
31, 2007 and expected to vest
|
|
6,621,056
|
|
$
|
4.72
|
|
6.05
|
|
$
|
(12,720,904
|
)
|
|
|
|
|
|
|
|
|
|
|
Exercisable at
March 31, 2007
|
|
4,449,582
|
|
$
|
5.00
|
|
4.66
|
|
$
|
(9,802,794
|
)
|
The weighted average fair value per share of
stock-based payments granted to employees during the three months ended March
31, 2007 and March 31, 2006 was $2.25 and $6.25, respectively. During the same
periods, the total intrinsic value of stock options exercised were $0 and
$729,759, and the total fair value of stock options that vested were $1,303,398
and $1,103,771, respectively.
As of March 31, 2007, there was $4,922,460 of
total unrecognized compensation cost related to nonvested share-based
compensation arrangements granted under the Plan. These costs are expected to
be recognized over a weighted-average period of 2.4 years.
During the first quarter of fiscal 2007, no
stock options were exercised. The Company is obligated to issue shares from the
2002 Equity Incentive Plan reserve upon the exercise of stock options. The Company
does not currently expect to repurchase shares from any source to satisfy its
obligations under the Plan.
The following are the stock-based
compensation costs recognized in the Companys statements of operations:
|
|
Three Months Ended
March 31, 2007
|
|
Three Months Ended
March 31, 2006
|
|
Research and
development
|
|
$
|
397,037
|
|
$
|
539,497
|
|
General and
administrative
|
|
906,361
|
|
564,274
|
|
Total
|
|
$
|
1,303,398
|
|
$
|
1,103,771
|
|
The
2000 Employee Stock Purchase Plan
(ESPP) provides that eligible employees may contribute, through payroll,
deductions, up to 10% of their earnings toward the purchase of the Companys
Common Stock at 85% of the fair market value at specific dates. On January 1,
2006, the Company adopted SFAS 123R, which requires the measurement and recognition
of compensation expense for all share based payment awards made to the Companys
employees and directors related to the Employee Stock Purchase Plan, based on
estimated fair values.
6
During the first quarter of 2007 the total compensation expense for
participants in the ESPP was $7,849 using the Black-Scholes option-pricing
model with a weighted average estimated fair value per share of $1.26, expected
life of six months, risk free interest rate of 5.17%, volatility of 70.90%, and
no dividend yield.
During
the first quarter of 2006 the total compensation expense for participants in
the ESPP was $15,118 using the Black-Scholes option-pricing model with a weighted average estimated fair value
per share of $1.07, expected life of six months, risk free interest rate of
3.5%, volatility of 73.21%, and no dividend yield. At March 31, 2007,
248,144 shares remain available for purchase through the plan and there were 86
employees eligible to participate in the plan, of which 29 were participants.
On March 27, 2007, in connection with
his resignation, the Company entered into a Separation and Release Agreement
with AVIs former Chairman and Chief Executive Officer. Pursuant to this
agreement, he may exercise his previously granted options until March 28,
2010. This modification of these stock options in the first quarter of 2007
increased compensation costs by $1,057,372.
On March 15, 2006 unvested stock options for
nine employees in the Companys Colorado facility were accelerated. These
employees joined Cook Group Inc. in April 2006. The acceleration of these stock
options in the first quarter of 2006 increased compensation costs by $833,500.
During the first quarter of 2007 and 2006,
the total compensation expense for stock-based compensation was $2,360,770 and
$1,937,271, respectively.
The Company records the fair value of stock options granted to
non-employees in exchange for services in accordance with EITF 96-18
Accounting for Equity Instruments That are Issued to Other Than
Employees for Acquiring, or in Conjunction with Selling, Goods or Services
.
The fair value of the options granted is expensed when the measurement date is
known. The performance for services was satisfied on the grant date for stock
options granted to non-employees. The total fair value of the options granted
to non-employees during the three months ended March 31, 2007 and March 31,
2006 was $312,637 and $525,126
which was expensed to research and development, respectively.
Warrants.
Certain of the Companys
warrants issued in connection with financing arrangements are classified as
liabilities in accordance with EITF 00-19
Accounting for derivative
financial instruments indexed to, and potentially settled in, a companys own
stock.
The fair market value
of these warrants is recorded on the balance sheet at issuance and marked to
market at each financial reporting period. The change in the fair value of the
warrants is recorded in the Statement of Operations as a non-cash gain (loss)
and is estimated using the Black-Scholes option-pricing model with the
following weighted average assumptions:
Three Months Ended March 31,
|
|
2007
|
|
2006
|
|
Risk-free
interest rate
|
|
4.4%-4.5
|
%
|
4.7
|
%
|
Expected
dividend yield
|
|
0
|
%
|
0
|
%
|
Expected lives
|
|
1.7-3.1 years
|
|
2.7-4.1 years
|
|
Expected
volatility
|
|
79.8%-88.9
|
%
|
82.7%-86.3
|
%
|
7
The risk-free interest
rate is estimated using an average of treasury bill interest rates. The
expected dividend yield is zero as the Company has not paid any dividends to
date and does not expect to pay dividends in the future. The expected lives are
based on the remaining contractual lives of the related warrants. The expected
volatility is estimated using historical calculated volatility and considers
factors such as future events or circumstances that could impact volatility.
For warrants classified
as permanent equity in accordance with EITF 00-19, the fair value of the
warrants is recorded in shareholders equity and no further adjustments are
made.
Commitments
and Contingencies
.
In the normal course of business, the
Company may be named as a party to various legal claims, actions and
complaints, including matters involving employment, intellectual property,
effects from the use of drugs utilizing our technology, or others. It
is impossible to predict with certainty whether any resulting
liability would have a material adverse effect on the Companys financial
position, results of operations or cash flows.
Financial Instruments
.
The carrying
amounts reported in the balance sheets for cash and cash equivalents, accounts
receivable, accounts payable, and other current monetary assets and liabilities
approximate fair value because of the immediate or short-term maturity of these financial instruments.
License
Arrangements.
License
arrangements may consist of non-refundable upfront license fees, data transfer
fees, research reimbursement payments, exclusive licensed rights to patented or
patent pending compounds, technology access fees, various performance or sales
milestones and future product royalty payments. Some of these arrangements are
multiple element arrangements.
The Company defers recognition of
non-refundable upfront fees if it has continuing performance obligations without
which the technology, right, product or service conveyed in conjunction with
the non-refundable fee has no utility to the licensee that is separate and
independent of Company performance under the other elements of the arrangement.
In addition, if the Company has continuing involvement through research and
development services that are required because its know-how and expertise
related to the technology is proprietary to the Company, or can only be
performed by the Company, then such up-front fees are deferred and recognized
over the period of continuing involvement.
Payments related to substantive,
performance-based milestones in a research and development arrangement are
recognized as revenue upon the achievement of the milestones as specified in
the underlying agreements when they represent the culmination of the earnings
process.
Government
Research Contract Revenue.
The Company recognizes revenues from federal research
contracts during the period in which the related expenditures are incurred.
Income
Taxes.
In
July 2006, the FASB issued FASB Interpretation No. 48, Accounting for
Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109 (FIN
48). FIN 48 clarifies the accounting for uncertainty in income taxes by
prescribing the recognition threshold a tax position is required to meet before
being recognized in the financial
8
statements. It also provides guidance on
derecognition, classification, interest and penalties, accounting in interim
periods, disclosure, and transition. The provisions of FIN 48 are effective for
the Company as of January 1, 2007, with cumulative effect, if any, of applying
FIN 48 recorded as an adjustment to opening retained earnings in the year of adoption.
The Company adopted FIN 48 on January 1, 2007, which did not have a material
impact on the consolidated financial statements. See Note 7.
Note 2. Restatement of Prior Financial
Information:
In
December 2003, January 2004, January 2005 and November 2005, the Company issued
warrants in connection with various financing transactions
in registered
offerings
. Previously, the
Company had classified these warrants in the shareholders equity section of
the Companys balance sheet. In accordance with EITF 00-19, if a financial
instrument requires settlement in registered shares, the financial instrument
cannot be classified within equity, as the companys ability to maintain an
effective registration statement is outside that companys control. The
warrants issued by the Company require settlement in registered shares and,
accordingly, should be recorded as a liability at fair value at the date of
grant, and marked to market at each reporting period.
The Company has evaluated the financial
statement impact in each of the previously filed reporting periods effected,
and concluded that the changes are quantitatively material to its previously
filed financial statements. The amounts previously recorded in each of the
three months ended March 31, 2007 and 2006 have been adjusted to reduce equity
and increase liabilities for the issued warrants, and changes in fair value
will be recorded on their own line item.
The
effect of the correction of this error on the balance sheet as of March 31,
2007 and the statement of operations for the three month period ended March 31,
2007 is summarized as follows:
|
|
March 31, 2007
As Previously
Reported
|
|
Adjustments
|
|
March 31, 2007
As Restated
|
|
|
|
|
|
|
|
|
|
Warrant
liability
|
|
|
|
3,693,885
|
|
3,693,885
|
|
Total Current
Liabilities
|
|
4,346,755
|
|
3,693,885
|
|
8,040,640
|
|
Additional
paid-in capital
|
|
244,382,818
|
|
(9,724,002
|
)
|
234,658,816
|
|
Deficit
accumulated during the development stage
|
|
(213,444,231
|
)
|
6,030,117
|
|
(207,414,114
|
)
|
Total
Shareholders Equity
|
|
30,960,292
|
|
(3,693,885
|
)
|
27,266,407
|
|
|
|
|
|
|
|
|
|
Gain on warrant liability
|
|
|
|
1,498,691
|
|
1,498,691
|
|
Net loss
|
|
(9,722,975
|
)
|
1,498,691
|
|
(8,224,284
|
)
|
Net loss per share (basic
and diluted)
|
|
(0.18
|
)
|
0.03
|
|
(0.15
|
)
|
9
The
effect of the correction of this error on the balance sheet as of December 31,
2006 is summarized as follows:
|
|
December 31,
2006 As
Previously
Reported
|
|
Adjustments
|
|
December 31,
2006 As Restated
|
|
|
|
|
|
|
|
|
|
Warrant
liability
|
|
|
|
5,192,576
|
|
5,192,576
|
|
Total Current
Liabilities
|
|
3,150,845
|
|
5,192,576
|
|
8,343,421
|
|
Additional
paid-in capital
|
|
241,409,421
|
|
(9,724,002
|
)
|
231,685,419
|
|
Deficit
accumulated During the development stage
|
|
(203,721,256
|
)
|
4,531,426
|
|
(199,189,830
|
)
|
Total
Shareholders Equity
|
|
37,711,901
|
|
(5,192,576
|
)
|
32,519,325
|
|
The
effect of the correction of this error on the statement of operations for the
three month period ended March 31, 2006 is summarized as follows:
|
|
March 31, 2006
As Previously
Reported
|
|
Adjustments
|
|
March 31, 2006
As Restated
|
|
|
|
|
|
|
|
|
|
Loss on warrant liability
|
|
|
|
(14,195,376
|
)
|
(14,195,376
|
)
|
Net loss
|
|
(9,061,150
|
)
|
(14,195,376
|
)
|
(23,256,526
|
)
|
Net loss per share (basic and diluted)
|
|
(0.18
|
)
|
(0.27
|
)
|
(0.45
|
)
|
The
effect of the correction of this error on the statement of operations from July
22, 1980 (Inception) through March 31, 2007 is summarized as follows:
|
|
July 22, 1980
(Inception)
through March
31, 2007 As
Previously
Reported
|
|
Adjustments
|
|
July 22, 1980
(Inception)
through March 31,
2007
As Restated
|
|
|
|
|
|
|
|
|
|
Gain on warrant liability
|
|
|
|
6,030,117
|
|
6,030,117
|
|
Net loss
|
|
(213,444,231
|
)
|
6,030,117
|
|
(207,414,114
|
)
|
The correction of this error did not impact
cash used in operating activities, cash provided by (used in) investing
activities, or cash provided by financing activities.
Note 3. Liquidity
The Company is in the development stage. Since its inception in 1980
through March 31, 2007, the Company has incurred losses of approximately
$207 million, substantially all of which
10
resulted from expenditures related to research and development, general
and administrative expenses, non-cash write-downs in 2002 of $4,478,260 and in
2001 of $12,523,088 on short-term securitiesavailable-for-sale that had an
other than temporary impairment as defined by SEC accounting rules and a
one-time charge of $19,545,028 for acquired in-process research and development
reflecting the acquisition of ImmunoTherapy Corporation. The Company has not
generated any material revenue from product sales to date, and there can be no
assurance that revenues from product sales will be achieved. Moreover, even if
the Company does achieve revenues from
product sales, the Company expects to incur operating losses over the next
several years.
The
financial
statements have been prepared assuming that the Company will continue as a
going concern. The Companys ability to achieve a profitable level of
operations in the future will depend in large part on completing product
development of its antisense products, obtaining regulatory approvals for such
products, and bringing these products to market. During the period required to
develop these products, the Company will require substantial additional
financing. There is no assurance that such financing will be available when
needed or that the Companys planned products will be commercially successful.
The Company believes it has sufficient cash to fund operations through 2007.
For 2007, the Company expects expenditures for operations, including
collaborative efforts and GMP facilities to be approximately $25 to $28
million. Expenditures for 2007 could increase if the Company undertakes
additional collaborative efforts. If necessary, however, the Companys
management has the ability to significantly curtail certain expenditures because
a significant amount of the Companys costs are variable.
In December 2006, the Company announced the
execution of a two-year $28 million research contract with the Defense Threat
Reduction Agency (DTRA), an agency of the United States Department of Defense
(DoD). The contract is directed toward funding the Companys development of
antisense therapeutics to treat the effects of Ebola, Marburg and Junin
hemorrhagic viruses, which are seen as biological warfare and bioterrorism
agents. Funding under this contract is expected over two years, with
approximately $18.0 million committed in the first year, and the remainder
anticipated in the second year. In the first quarter of 2007, the Company
recognized $485,292 in research contract revenue from this contract.
In January 2006, the Company announced that the final version of the
2006 defense appropriations act had been approved, which included an allocation
of $11.0 million to fund its ongoing defense-related programs. Net of
government administrative costs, it is anticipated that the Company will
receive up to $9.8 million under this allocation. The Companys NEUGENE
®
technology is expected to be used to continue developing therapeutic agents
against Ebola, Marburg and dengue viruses, as well as to continue developing
countermeasures for anthrax exposure and antidotes for ricin toxin. The Company
has received signed contracts for three of the projects, with government
expenditures of $7.1 million. The Company continues to work with the government
to define the scope of work to be performed on the fourth project, dengue
viruses. The Company expects that funding under these contracts will be
received over the next 12 months as it seeks reimbursement for its research
under the contracts, and such funding has not yet been received and is not
reflected in the Companys 2007 first quarter financial statements.
The likelihood of the long-term success of
the Company must be considered in light of the
11
expenses,
difficulties and delays
frequently encountered in the development and commercialization of new
pharmaceutical products, competitive factors in the marketplace as well as the
burdensome regulatory environment in which the Company operates. There can be
no assurance that the Company will ever achieve significant revenues or
profitable operations. In this regard, the Companys long term success may be
adversely affected by the resignation of the Companys Chief Executive Officer
in March 2007, as the Company must find a permanent CEO.
Note 4. Earnings Per Share
Basic EPS is calculated using the weighted average number of common
shares outstanding for the period and diluted EPS is computed using the
weighted average number of common shares and dilutive common equivalent shares
outstanding. Given that the Company is in a loss position, there is no
difference between basic EPS and diluted EPS since the common stock equivalents
would be antidilutive.
Three Months Ended March 31,
|
|
2007
|
|
2006
|
|
|
|
(Restated)
|
|
(Restated)
|
|
Net loss
|
|
$
|
(8,224,284
|
)
|
$
|
(23,256,526
|
)
|
Weighted average
number of shares of common stock and common stock equivalents outstanding:
|
|
|
|
|
|
Weighted average
number of common shares Outstanding for computing basic earnings per share
|
|
53,241,730
|
|
51,715,050
|
|
Dilutive effect
of warrants and stock options after application of the treasury stock method
|
|
|
*
|
|
*
|
Weighted average
number of common shares outstanding for computing diluted earnings per share
|
|
53,241,730
|
|
51,715,050
|
|
Net loss per
share - basic and diluted
|
|
$
|
(0.15
|
)
|
$
|
(0.45
|
)
|
* Warrants and stock options to
purchase 15,173,475 and 17,214,065 shares of common stock as of March 31, 2007
and 2006, respectively, were excluded from the earnings per share calculation
as their effect would have been antidilutive.
Note 5. Comprehensive Income and securities
available for sale
Comprehensive income (loss) includes charges
or credits to equity that did not result from transactions with shareholders.
The Companys only component of other comprehensive income (loss) is
unrealized gain (loss) on cash equivalents and short-term
securitiesavailable-for-sale. Accordingly, such investment securities are
stated on the balance sheet at their fair market value. The Company classifies
its investment securities with an original maturity of three months or less
from the date of purchase as cash equivalents. The Company classifies its
investment securities with an original maturity of more than three months from
the date of purchase as short-term securitiesavailable-for-sale
. At
March 31, 2007 and December 31, 2006, the Companys investments in marketable
securities had gross unrealized gains of $16,377 and $
18,418, respectively. The unrealized
difference between the adjusted cost and the fair market value of these securities
has been reflected as a separate component of shareholders equity.
12
The following table sets forth the calculation of comprehensive income
for the periods indicated:
|
|
Three Months Ended
March 31,
|
|
|
|
(Restated)
|
|
|
|
2007
|
|
2006
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(8,224,284
|
)
|
$
|
(23,256,526
|
)
|
Unrealized gain
(loss) on marketable securities
|
|
(2,041
|
)
|
1,890
|
|
|
|
|
|
|
|
Total
comprehensive loss
|
|
$
|
(8,226,325)
|
|
$
|
(23,254,636)
|
|
Note 6. Significant Agreements
On January 8, 2007, the Company announced
that it had entered into a cross-license agreement with Eleos Inc. for the
development of antisense drugs targeting p53, a well-studied human protein that
controls cellular response to genetic damage. Under the terms of the agreement,
the Company is granting Eleos Inc. an exclusive license to the Companys NEUGENE
®
third-generation antisense chemistry to treat cancer with p53-related drugs. In
return, Eleos Inc. is granting the Company an exclusive license to its patents
for treatment of most viral diseases with drugs that target p53. The companies
are sharing rights in other medical fields where targeting p53 may be
therapeutically useful. Each company will make milestone payments and royalty
payments to the other on development and sales of products that utilize
technology licensed under the agreement. In addition, Eleos Inc. is making an
upfront payment of $500,000 to the Company. The Company recognized $31,250 in
license fees in the first quarter of 2007; the remaining $468,750
has
been classified as deferred revenue
.
In February 2007, the Company issued 100,000
shares of the Companys common stock with a market value of $300,000 for
consulting services, which was expensed to research and development.
On March 27, 2007, the Board of Directors
appointed K.Michael Forrest as interim Chief Executive Officer and set his
compensation as follows: (a) annual salary - $385,000 and (b) options to
acquire 300,000 shares of the Companys common stock. The stock options
granted to Mr. Forrest become exercisable starting one month after the grant
date, with one-twelfth of the options becoming exercisable at that time and an
additional one-twelfth of the options becoming exercisable each month
thereafter. The exercise price is $2.45 per share.
On March 27, 2007, in connection with
the resignation of AVIs Chairman and Chief Executive Officer, the Company
entered into a Separation and Release Agreement, pursuant to which the former
Chairman and CEO is entitled to receive his base compensation for 18
months ($562,500 in the aggregate) and medical insurance for the same
18 month period and may exercise his previously granted options until
March 28, 2010. The Company recognized $1,619,872 in total compensation expense
to general and administrative in the first quarter of 2007, including $562,500
in cash compensation and $1,057,372 in SFAS 123R expenses.
Note 7. Other current assets
Amounts included in other
current assets are as follows:
13
|
|
March 31, 2007
|
|
December 31, 2006
|
|
|
|
|
|
|
|
Prepaid expenses
|
|
$
|
449,263
|
|
$
|
480,003
|
|
Prepaid rents
|
|
102,837
|
|
100,838
|
|
Restricted cash
|
|
157,386
|
|
155,442
|
|
|
|
|
|
|
|
Other current
assets
|
|
$
|
709,486
|
|
$
|
736,283
|
|
Starting in April 2006, the Company was required to pledge $150,000 as
collateral for company credit cards issued to certain employees. The Company
classifies this amount as restricted cash. As of March 31, 2007, restricted
cash including accrued interest was $157,386. The remaining components of other
current assets include normally occurring prepaid expenses and rents.
Note 8. Income Taxes
The Company adopted the provisions of FIN 48 on January 1, 2007, which
did not materially impact its consolidated financial statements. No
unrecognized tax benefits were recorded as of the date of adoption. As a result
of the implementation of FIN 48, the Company did not recognize any liability
for unrecognized tax benefits. There are no unrecognized tax benefits included
in the balance sheet that would, if recognized, affect the effective tax rate.
The Companys policy is to recognize interest and/or penalties related
to income tax matters in income tax expense. The Company had no accrual for
interest or penalties on its balance sheet at March 31, 2007 and at December
31, 2006, and has not recognized interest and/or penalties in the statement of
operations for the three months ended March 31, 2007.
At January 1, 2007, the Company had net deferred tax assets of
$79,398,000. The deferred tax assets are primarily composed of federal and
state tax net operating loss carryforwards, federal and state R&D credit
carryforwards, share-based compensation expense and intangibles. Due to
uncertainties surrounding its ability to generate future taxable income to
realize these assets, a full valuation allowance has been established to offset
its net deferred tax asset. Additionally, the Internal Revenue Code rules under
Section 382 could limit the future use of its net operating loss and R&D
credit carryforwards to offset future taxable income based on ownership changes
and the value of the Companys stock.
Note 9. Subsequent Events
On April 19, 2007, the Company entered into a real property purchase
agreement with WKL Investments Airport, LLC (WKL) to purchase a parcel of real
property at 1749 SW Airport Avenue, Corvallis, Oregon 97330, including
improvements situated on the land and intangibles related to the land. Under
the terms of the real property purchase agreement, the total purchase price of
the property is $3,300,000. The Company paid the purchase price as follows:
paid $250,000 in an earnest money deposit, assumed two loans secured by the
property in the amount of $2,196,208, paid $125,000 in immediately available
funds, and issued 270,758 shares of AVI common stock (at $2.77 per share or
$750,000 in the aggregate) to WKL in exchange for the property. As of March 31,
2007, the Company recorded $250,000 in an earnest money deposit to other
assets.
14
On May 2, 2007, the Company entered into a
cross-license and collaboration agreement with Ercole Biotech, Inc. (Ercole)
to develop drugs that may prove effective in treating the genetic diseases
Duchenne muscular dystrophy and beta thalassemia and a stock purchase agreement
in connection therewith. Under the terms of the stock purchase
agreement, Ercole issued AVI shares of
Ercole Series A2 Preferred Stock, and the Company issued to Ercole 73,607 shares of the Companys common
stock with a market value of $200,000.
Item 2.
Managements
Discussion and Analysis or Plan of Operations
This section should be read in conjunction with the same titled section
contained in our Annual Report on Form 10-K as filed with the SEC for the year
ended December 31, 2006 and the Risk Factors contained in such report.
Forward-Looking Information
The
Financial Statements and Notes thereto should be read in conjunction with the
following discussion. The discussion in this Form 10-Q contains certain
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Exchange Act. Forward looking statements are
identified by such words as believe, expect, anticipate and words of
similar import. All statements other than historical or current facts,
including, without limitation, statements about our business strategy, plans
and objectives of management and our future prospects, are forward-looking
statements. Such forward-looking statements involve risks and uncertainties,
including, but not limited to, the results of research and development efforts,
the success of raising funds in the current offering or future offerings under
our current shelf registration, the results of pre-clinical and clinical
testing, the effect of regulation by FDA and other agencies, the impact of
competitive products, product development, commercialization and technological
difficulties, and other risks detailed in the Companys Securities and Exchange
Commission filings, that could cause actual results to differ materially from
the expected results reflected in such forward looking statements.
Overview
From our inception in 1980, we have devoted
our resources primarily to fund our research
and development efforts. We have been unprofitable since inception and, other
than limited interest, license fees, grants and research contracts, we have had
no material revenues from the sale of products or other sources, other than
from government grants and research contracts, and we do not expect material
revenues for the foreseeable future. We expect to continue to incur losses for
the foreseeable future as we continue to expand our research and development
efforts and enter additional collaborative efforts. As of March 31,
2007, the Companys accumulated deficit was $207,414,114.
Results of Operations
Revenues, from license fees, grants and research contracts, increased
to $536,042 in the first quarter of 2007 from $65,962 in the comparable period
in 2006, due to increases in research contracts revenues of $485,292 and license
fees of $31,250, partially offset by decreases in grants revenues of $46,462.
15
Operating expenses increased to $10,621,526 in the first quarter of
2007 from $9,584,971 in the first quarter of 2006 due to increases in general
and administrative, which increased to $4,303,885 in 2007 from $2,821,726 in
the comparable period in 2006. This general and administrative increase was due
primarily to increases in employee costs of approximately $1,200,000, of which
approximately $1,620,000 (including $562,500 in cash compensation and
$1,057,372 in SFAS 123R expenses) was related to the Separation and Release
Agreement with the Companys former Chief Executive Officer, partially offset
by decreases in SFAS 123R expenses of approximately $130,000 and salaries and
bonuses of approximately $330,000. General and administrative also includes
increases in legal expenses of approximately $230,000 and accounting expenses
of approximately $50,000. Research and development decreased to $6,317,641 in
the first quarter of 2007 from $6,763,245 in the first quarter of 2006. This
research and development decrease was due primarily to decreases in employee
costs of approximately $940,000, of which approximately $430,000 was related to
the acceleration of the vesting of certain stock options in the first quarter
of 2006 and decreases in SFAS 123R expenses of approximately $140,000 and
salaries and bonuses of approximately $360,000, partially offset by increases
in chemical and lab supply costs of approximately $390,000, government contract
related equipment expenses of approximately $350,000, and professional
consultant costs of approximately $160,000. The remaining research and
development decrease was due to net decreases in clinical trial related
expenses of approximately $500,000, partially offset by increases in leasehold
and patent amortization expenses of approximately $50,000 and facility costs of
approximately $40,000. Net interest income decreased to $362,509 in the first quarter
of 2007 from $457,859 in the first quarter of 2006 due to decreases in average
cash, cash equivalents and short-term securities, partially offset by increases
in average interest rates of the Companys interest earning investments. Gain
(loss) on warrant liability
was
a gain of $1,498,691 in the first quarter of 2007 compared to a loss of
$14,195,376 in the first quarter of 2006. The gain (loss) on warrant liability
is a function of the Companys stock price and fluctuates as the market price
of the Companys stock fluctuates.
Liquidity and Capital Resources
The Company does not expect any material revenues
in 2007 or 2008 from its business activities other than from potential
government grants and research contracts. The Company
expects that its cash
requirements through 2007 will be satisfied by existing cash resources. To fund
its operations beyond 2007, the Company will need to secure additional funds.
Such funds could come from technology license fees, government grants and
research contracts, and accessing capital markets.
In December 2006, the Company announced the
execution of a two-year $28 million research contract with the Defense Threat
Reduction Agency (DTRA), an agency of the United States Department of Defense
(DoD). The contract is directed toward funding the Companys development of
antisense therapeutics to treat the effects of Ebola, Marburg and Junin
hemorrhagic viruses, which are seen as biological warfare and bioterrorism
agents. Funding under this contract is expected over two years, with
approximately $18.0 million committed in the first year, and the remainder
anticipated in the second year. In the first quarter of 2007, the Company
recognized $485,292 in research contract revenue from this contract.
16
In January 2006, the Company announced that
the final version of the 2006 defense appropriations act had been approved,
which included an allocation of $11.0 million to fund its ongoing
defense-related programs. Net of government administrative costs, it is
anticipated that the Company will receive up to $9.8 million under this
allocation. The Companys NEUGENE
®
technology is expected
to be used to continue developing therapeutic agents against Ebola, Marburg and
dengue viruses, as well as to continue developing countermeasures for anthrax
exposure and antidotes for ricin toxin. The Company has received signed
contracts for three of the projects, with government expenditures of $7.1
million. The Company continues to work with the government to define the scope
of work to be performed on the fourth project, dengue viruses. The Company
expects that funding under these contracts will be received over the next 12
months as it seeks reimbursement for its research under the contracts, and such
funding has not yet been received and is not reflected in the Companys 2007
first quarter financial statements
.
The Companys cash, cash equivalents and short-term securities were
$27,046,111 at March 31, 2007, compared with $33,152,132 at December 31, 2006.
The decrease of $6,106,021 was due primarily to $5,494,018 used in operations
and $609,962 used for purchases of property and equipment and patent related
costs.
The Companys short-term securities include certificates of deposit,
commercial paper and other highly liquid investments with original maturities
in excess of 90 days at the time of purchase and less than one year from the
balance sheet date. The Company classifies its investment securities as
available-for-sale and, accordingly, such investment securities are stated on
the balance sheet at their fair market value with unrealized gains (losses)
recorded as a separate component of shareholders equity and comprehensive
income (loss).
The Companys future expenditures and capital requirements depend on
numerous factors, most of which are difficult to project beyond the short term,
including without limitation, the progress of its research and development
programs, the progress of its pre-clinical and clinical trials, the time and
costs involved in obtaining regulatory approvals, the cost of filing,
prosecuting, defending and enforcing any patent claims and other intellectual
property rights, competing technological and market developments, its ability
to establish collaborative arrangements and the terms of any such arrangements,
and the costs associated with commercialization of its products. The Companys
cash requirements are expected to continue to increase each year as the Company
expands its activities and operations. There can be no assurance, however, that
the Company will ever be able to generate product revenues or achieve or
sustain profitability.
In addition, the Companys prospects for profitability and long term
success may be adversely affected by the recent resignation of its Chief
Executive Officer. There can be no assurance that the Company will be able to
find and employ a permanent CEO that will be able to lead the Company
successfully in the near term. The failure to secure a permanent replacement
may adversely affect the Companys research and development efforts.
The Company expects to continue to incur losses as it
expands its research and development activities and related regulatory work and
increases its collaborative efforts.
For 2007, the Company expects expenditures for operations,
including collaborative efforts and GMP facilities to be approximately $25 to
$28 million. Expenditures for 2007 could increase if the Company undertakes
additional collaborative efforts. If necessary, however, the Companys
management has the ability to significantly curtail certain expenditures
because a significant amount of the Companys costs are variable
.
17
Critical
Accounting Policies and Estimates
The discussion and analysis of the Companys financial condition and
results of operations are based upon its financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States. The preparation of these financial statements requires the
Company to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses and related disclosure of contingent
assets and liabilities. The Companys critical accounting policies and
estimates are consistent with the disclosure in the Companys Form 10-K.
Item 3. Quantitative and
Qualitative Disclosures about Market Risk
There has been no material change in the Companys market risk exposure
since the filing of our 2006 Annual Report on Form 10-K.
18
Item 4. Controls and Procedures
Disclosure Controls and Procedures
In connection with the preparation of our Quarterly Report on Form
10-Q, for the period ending March 31, 2007, originally filed on May 10, 2007,
an evaluation was performed under the supervision of our management, including
our Chief Executive Officer and Chief Financial Officer, of the effectiveness
of the design and operation of our disclosure controls and procedures (as
defined in Rule 13a-15(e) under the Exchange Act). Based on that evaluation,
our Chief Executive Officer and Chief Financial Officer concluded at that time
that our disclosure controls and procedures were effective as of the end of the
period covered by that Quarterly Report. Subsequently, as reported in Item 9A
of our Amended Annual Report on Form 10-K/A as of December 31, 2006, the
Company determined that it was necessary to restate certain of its previously
issued consolidated financial statements and that such previously issued
financial statements should no longer be relied upon.
In connection with the restatement, as of the
end of the period covered by this report, we carried out an evaluation, under
the supervision and with the participation of the Companys management,
including the Companys Chief Executive Officer (CEO) and Chief Financial
Officer (CFO), of the effectiveness of the design and operation of our
disclosure controls and procedures (as such terms are defined in Rules
13a-15(c) under the Securities Exchange Act of 1934, as amended (the Exchange
Act)). Based upon that evaluation, our CEO and CFO concluded that our
disclosure controls and procedures were not effective as of March 31, 2007.
Internal Controls and Procedures
There were no changes in our internal control over financial reporting
that occurred during the three months ended March 31, 2007 that have materially
affected, or are reasonably likely to materially affect, our internal control
over financial reporting.
As described in Item 9A of our Amended Annual Report on Form 10-K/A for
the fiscal year ended December 31, 2006, management conducted an assessment of
the effectiveness of our internal control over financial reporting as of
December 31, 2006, based upon the Internal Control-Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Based on this assessment, management concluded that, as of December 31, 2006,
the Company did not maintain effective internal control over financial reporting.
The Company identified the following material weakness in internal control over
financial reporting as of December 31, 2006:
Management lacked adequate technical expertise
to ensure the proper application, at inception, of SFAS No. 133, Accounting
for Derivative Instruments and Hedging Activities, and EITF 00-19 Accounting
for Derivative Financial Instruments Indexed to, and Potentially Settled in, a
Companys Own Stock related to certain stock warrants. As a result, the
Company failed to identify that certain warrants should be liability
classified. This material weakness resulted in a misstatement requiring the
restatement of the Companys financial statements for the years ended December
31, 2006, 2005 and 2004 and for each of the interim periods in 2006 and 2005.
19
During the fiscal year ending December 31, 2007, we developed a
remediation plan that would result in the implementation of significant changes
in our internal control over financial reporting, including the following:
The Company has adopted additional controls
wherein if the issuance of warrants or other derivative financial instruments
is contemplated, legal counsel and an independent accountant will be consulted
as to the financial statement impact that the issuance of such warrants or
other derivative financial instruments may have, prior to issuance.
The Company began to execute these remediative measures above in the
third quarter of 2007. Additional measures may be forthcoming as the Company
evaluates the effectiveness of these efforts. We cannot assure you that these
remediation efforts will be successful or that our internal control over
financial reporting will be effective in accomplishing all control objectives
all of the time.
PART II -
OTHER INFORMATION
Item 1. Legal
Proceedings.
None
Item 1A.
Risk
Factors.
In March 2007, the Companys Chief Executive officer resigned and an
interim CEO was appointed. The Company intends to commence a search for a
permanent replacement. There can be no assurance that the Company will be able
to find and employ a new permanent CEO that will be able to lead the Company
successfully in the near term. The failure to secure a permanent replacement
may adversely affect the Companys research and development efforts.
Item 2. Unregistered
Sales of Equity Securities and Use of Proceeds.
None
Item 3 Defaults Upon Senior
Securities.
None
Item 4. Submission of
Matters to a Vote of Securities Holders.
None
Item 5. Other Information.
None
20
Item 6
.
Exhibits
|
|
|
|
Incorporated by Reference to Filings Indicated
|
Exhibit No
|
|
Exhibit
Description
|
|
Form
|
|
File
No.
|
|
Exhibit
|
|
Filing
Date
|
|
Filed
Herewith
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.1
|
|
Third Restated Articles of
Incorporation of AntiVirals Inc.
|
|
SB-2
|
|
333-20513
|
|
3.1
|
|
5/29/97
|
|
|
4.2
|
|
First Amendment to Third
Restated Articles of Incorporation of AntiVirals Inc.
|
|
8-K
|
|
0-22613
|
|
3.3
|
|
9/30/98
|
|
|
4.3
|
|
Amendment to Article 2 of
the Companys Third Restated Articles of Incorporation
|
|
DEF 14A
|
|
1-14895
|
|
N/A
|
|
4/11/02
|
|
|
4.4
|
|
Bylaws of AntiVirals Inc.
|
|
SB-2
|
|
333-20513
|
|
3.2
|
|
5/29/97
|
|
|
10.58+*
|
|
Cross License Agreement
dated January 8, 2007 by and between Eleos, Inc. and AVI BioPharma, Inc.
|
|
|
|
|
|
|
|
|
|
X
|
10.59*
|
|
Separation and Release
Agreement dated March 27, 2007 by and between Denis R. Burger, Ph.D. and AVI
BioPharma, Inc.
|
|
|
|
|
|
|
|
|
|
X
|
31.1
|
|
Certification of the
Companys Chief Executive Officer, K. Michael Forrest, pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
|
|
|
X
|
31.2
|
|
Certification of Chief
Financial Officer, Mark M. Webber pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
|
|
|
X
|
32
|
|
Certification of the
Companys Chief Executive Officer, K. Michael Forrest, and Chief Financial
Officer, Mark M. Webber, pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
|
|
|
|
|
|
|
|
|
X
|
Materials in the exhibit marked with a +
have been omitted pursuant to a request for confidential treatment filed with
the Securities and Exchange Commission. Omitted portions have been filed
separately with the Securities and Exchange Commission.
* Materials in the exhibit marked with a *
were filed in the originally filed 10-Q.
21
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: November 2, 2007
|
AVI BIOPHARMA, INC.
|
|
|
|
|
|
By:
|
/s/ K. MICHAEL FORREST
|
|
|
K. Michael Forrest
|
|
Interim Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
|
|
|
|
By:
|
/s/ MARK M. WEBBER
|
|
|
Mark M. Webber
|
|
Chief
Financial Officer and Chief Information
|
|
Officer
|
|
(Principal Financial and Accounting Officer)
|
22
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