Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation.
The accompanying Management’s Discussion and Analysis of Financial Condition and Results of Operation should be read in conjunction with our unaudited consolidated financial statements, and notes thereto, filed with our Quarterly Report on Form 10-Q for the quarter ended June 30, 2011.
Disclosure Regarding Forward-Looking Statements
Certain statements contained in this Quarterly Report on Form 10-Q may be deemed to be forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995, and the Company intends that such forward-looking statements be subject to the safe-harbor created thereby. Such forward-looking statements relate to, among other things: general economic or industry conditions, nationally and in the physician, urology and medical device communities in which we intend to do business; our ability to raise capital to fund our 2011 and 2012 working capital needs and launch our products into the marketplace; our ability to pursue additional development of our existing and proposed products on a timely basis or at all; legislation or regulatory requirements, including our securing of all U.S. Food and Drug Administration (“FDA”) and other regulatory approvals on a timely basis, or at all, prior to being able to market and sell our products in the United States; competition from larger and more well established medical device companies and other competitors; the development of products that may be superior to the products offered by us; securing and protecting our intellectual property and assets, and enforcing breaches of the same; the quality or composition of our products and the strength and reliability of our contract vendors and partners; changes in accounting principles, policies or guidelines; financial or political instability; acts of war or terrorism; and other economic, competitive, governmental, regulatory and technical factors affecting our operations, proposed products and prices. We caution that these statements are qualified by important factors that could cause actual results to differ materially from those reflected by the forward-looking statements contained herein.
Overview
ProUroCare Medical Inc. (“ProUroCare,” the “Company,” “we” or “us,” which terms include reference to our wholly owned subsidiary, ProUroCare Inc. (“PUC”)) is an emerging medical device company that is in the process of obtaining FDA clearance for its first product, an innovative prostate imaging system known as the ProUroScan™ System. The ProUroScan System is an imaging system designed for use as an aid to the physician in documenting abnormalities in the prostate that have been previously detected by a digital rectal exam (“DRE”). As an adjunct to a DRE, the ProUroScan System will be used following an abnormal DRE to generate a real-time image of the prostate. The final composite image is saved as a permanent electronic record and can be conveniently retrieved to view previous test results.
We own patents and exclusively license patents and know-how related to the creation in real-time of two- and three-dimensional images of soft tissue using special software to process data acquired by probes that incorporate arrays of sensitive mechanical force sensors. The ProUroScan System is our first embodiment of this technology, to be used to image the prostate. We believe that this technology can be applied to other soft tissue organs in the future.
The ProUroScan System was developed over the past several years under agreements with our development partner, Artann Laboratories, Inc. (“Artann”), a scientific technology company focused on early-stage technology development. During 2008 and 2009, our research and development activities conducted through Artann were primarily directed toward completion of the final configuration of the ProUroScan System and conducting clinical trials for submission of a 510(k) application to the FDA. By agreement, Artann is responsible for submission of the 510(k) and all follow-on activities required to obtain FDA clearance in the United States. Once cleared and upon ProUroCare’s first commercial sale of a ProUroScan System, Artann will transfer the 510(k) to ProUroCare.
The ProUroScan System is not currently marketed or sold and has not yet been cleared for marketing by the FDA. Our goal is to have the ProUroScan System regulated by the FDA as a Class II device. A Class II device is one in which general and specific controls exist to ensure that the device is safe and effective. In a 510(k) application, applicants must demonstrate that the proposed device is substantially equivalent to an existing approved product, or “predicate device.” Products that employ new or novel technologies, and for which through the 510(k) review process are found to have no comparable predicate device and are low risk, may be cleared for marketing under Section 513(f) of the Food, Drug and Cosmetic Act (“FDCA”). This path, referred to as a “de novo” application, is intended to allow new or novel technology devices to be cleared for marketing when an appropriate predicate device does not exist.
In November 2009, a 510(k) application for market clearance was filed with the FDA. From that submission, the FDA determined that the ProUroScan System was not substantially equivalent (“NSE”) to a device currently being marketed. Therefore, as required by Section 513(f)(2) of the FDCA, a submission was made on May 21, 2010 to request 510(k) clearance under the de novo process. This request asked the FDA to define mechanical imaging systems as devices that are intended to produce an elasticity image of the prostate as an aid in documenting abnormalities of the prostate that are initially identified by digital rectal examination and to be used by physicians as a documentation tool. The de novo submission also recommended that the classification regulation state that a “mechanical imaging system” device consists of a trans-rectal probe with pressure sensor arrays and a motion tracking system that provides real time images of the prostate. These proprietary components are unique to the ProUroScan System. Once cleared, the ProUroScan System may serve as a predicate for future filings and where supported expanded indications for use.
The FDA is currently reviewing the de novo application and we are engaged in active dialog with FDA review personnel. During the course of this dialog, we have supplied answers to various questions and made some changes to documents as requested by the FDA as they relate to the de novo application. We may receive additional questions and input from the FDA and we expect to continue to respond in an expeditious manner. Our focus is to accelerate the clearance process as much as possible within the FDA review framework.
We expect to market the system in cooperation with a yet-to-be-determined medical device company that has an established worldwide presence in the urology market. In March 2011, we engaged the Minneapolis investment firm Cherry Tree & Associates to assist us in identifying a strategic distribution partner to help market our products, and are actively working to achieve that objective.
During this pre-revenue stage, in addition to work performed by Artann, we have conducted our development and clinical activities primarily through the use of contracted resources that specialize in developing regulatory strategies, managing the clinical trial process and counseling on FDA matters. We have found that using consultants and contractors to perform these functions during our development stage has allowed us to engage specialized talent and capabilities as needed by the business while providing the flexibility to engage them as our financial resources have permitted. For manufacturing, we have identified a highly qualified company, Logic PD (Minneapolis, MN), to produce the first commercial ProUroScan Systems. Logic has recently completed the production of three pre-commercial systems to establish and validate the manufacturing process.
An important initiative for 2011 will be to produce additional ProUroScan Systems and place them in the facilities of physicians on our physician advisory council following FDA clearance. We believe that the insights gained from the participation of these influential physicians will prove invaluable to our success. We have identified the key opinion leaders who will expand our base of clinical reference while evaluating physician training and in-service programs.
In addition to the research and development work, we incur ongoing expenses that are directly related to being a public company, including professional audit and legal fees, public and investor relations, directors’ and officers’ insurance premiums, financial printing, press releases, and transfer agent fees. We also incur costs associated with the prosecution and maintenance of our intellectual property. Other expenses incurred include executive officer compensation, travel, insurance, telephone, supplies and other miscellaneous expenses. Following FDA clearance, as we move into production and begin marketing our products, we expect to add internal resources in the areas of sales and marketing, engineering and quality control.
Results of Operations
The following discussion of the financial condition and results of operations should be read in conjunction with the financial statements included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future.
Three months ended June 30, 2011 compared to the three months ended June 30, 2010:
Operating Expenses/Operating Loss
.
Our operating expenses (and our operating loss) for the three months ended June 30, 2011 were $377,134, a decrease of $152,025, or 29%, compared to $529,159 last year. This decreased loss is a result of our decision to conserve cash prior to FDA clearance of our ProUroScan System by incurring only expenses essential to obtain FDA clearance, transfer and validate manufacturing processes, expand and strengthen our patent position and prepare detailed commercialization scale-up plans. These cost reduction efforts included reduced usage of operations, reimbursement, and financial consultants, which reduced consulting fees by $70,000 or 56%, to $56,000 compared to $126,000 during the same period last year, and the reduction of contracted development and engineering costs by $36,000 or 77%, to $11,000 compared to $47,000 during the same period last year. Compensation expense related to stock options was $48,000 during the three months ended June 30, 2011, an increase of $53,000, compared to an income of $6,000 in the prior year period that included a revaluation of unvested options previously granted to a consultant. Other expense reductions were made in the areas of investor and public relations.
Net Interest Expense
.
Net interest expense for the three months ended June 30, 2011 was $23,207, a decrease of 97% compared to $867,862 during the same period last year. Our interest expense includes the stated interest on funds we have borrowed and debt issuance costs, primarily the cost of equity paid as consideration to lenders and loan guarantors, incurred in obtaining the loans or in refinancing the loans if the modifications of the loan terms are not considered significant under the accounting rules. During the three months ended June 30, 2010, our interest also included the $651,000 cost of warrants issued as interest pursuant to a debt offering during that period. Stated interest expense for the three months ended June 30, 2011 was $22,200, a decrease of 29% compared to $31,000 during the same period last year. This reduction was primarily due to the 40% reduction of debt from $2.8 million on June, 2010 to $1.7 million to June 30, 2011. Interest expense related to debt issuance costs declined from $166,000 during the three months ended June 30, 2010 to $1,000 this year, as the modifications of certain loans refinanced were considered significant under the accounting rules and were therefore classified a debt extinguishment expense in the 2011 period.
Debt Extinguishment Expense
. Our debt extinguishment expense arises primarily from the issuance of stock or warrants issued pursuant to the modification or changes to provisions of short-term loans from lenders in certain financing transactions. Debt extinguishment expense for the three months ended June 30, 2011 increased to $88,479 from $5,000 during the same period last year, as a result of debt issuance cost, primarily the cost of equity paid as consideration to lenders and loan guarantors, related to debt refinancings with significantly modified terms.
Six months ended June 30, 2011 compared to the six months ended June 30, 2010:
Operating Expenses/Operating Loss
.
Our operating expenses (and our operating loss) for the six months ended June 30, 2011 were $726,342, a decrease of $372,121, or 34%, compared to $1,098,463 last year. This decreased loss is a result of our decision to conserve cash prior to FDA clearance of our ProUroScan System by incurring only expenses essential to obtain FDA clearance, transfer and validate manufacturing processes, expand and strengthen our patent position and prepare detailed commercialization scale-up plans. These cost reduction efforts included the reduction of operations, reimbursement and financial consulting costs by $161,000 or 65%, to $89,000 compared to $250,000 during the same period last year, and the reduction of contracted development and engineering costs by $100,000 or 82%, to $23,000 compared to $123,000 during the same period last year. Other expense reductions were made in the areas of investor relations, public relations and directors’ fees.
Net Interest Expense
.
Net interest expense for the six months ended June 30, 2011 was $52,922, a decrease of 94% compared to $949,083 during the same period last year. Stated interest expense for the six months ended June 30, 2011 was $43,000, a decrease of 57% compared to $99,000 during the same period last year. This reduction was primarily due to the 40% reduction of debt from $2.8 million on June, 2010 to $1.7 million to June 30, 2011. Interest expense related to debt issuance costs declined from $199,000 during the six months ended June 30, 2010 to $10,000 this year, as the modifications of certain loans refinanced were considered significant under the accounting rules and were therefore classified a debt extinguishment expense in the 2011 period. During the six months ended June 30, 2010, our interest included the $651,000 cost of warrants issued as interest pursuant to a debt offering during that period.
Debt Extinguishment Expense
. Our debt extinguishment expense for the six months ended June 30, 2010 included a charge of $870,981 that represented the excess fair value of the securities issued over the carrying value of the debt and interest at the time of the conversion of a $600,000 loan from the Phillips W. Smith Family Trust and $97,546 of accrued interest thereon into 381,173 equity units. Excluding this charge, debt extinguishment expense for the six months ended June 30, 2011 increased to $224,497 or 354% from $49,445 during the same period last year, as a result of debt issuance cost, primarily the cost of equity paid as consideration to lenders and loan guarantors, related to debt refinancings with significantly modified terms.
Balance Sheet Changes
During the six months ended June 30, 2011, we converted $311,018 of short term notes payable into long-term convertible debt. In addition, working with two of our service providers, we converted a total $165,698 of accounts payable into equity and a long-term convertible note. On April 15, 2011, we completed a six-month extension of our $900,000 secured promissory note with Crown Bank. On May 11, 2011 we established a $100,000 bank line of credit, and have borrowed the full amount as of June 30, 2011. On June 29, 2011 and August 12, 2011, we closed on a total of $225,000 in a private placement of convertible secured debt.
Liquidity and Capital Resources
Assets; Property Acquisitions and Dispositions
Our primary assets are our intellectual property rights, including patents and patent applications related to the mechanical imaging technology. These intellectual property rights, combined with our rights to patents and patent applications provided under our license and commercialization and development agreements with Artann, are the foundation for our proposed product offerings. Our intellectual property rights and all other Company assets secure $900,000 of senior bank notes and $525,025 of subordinated promissory notes and, as a result, are not available to secure additional senior debt financing. We do not anticipate selling any significant assets in the near term.
Sources and Uses of Cash
Net cash used in operating activities was $583,000 during the six months ended June 30, 2011 compared to $1,383,000 in 2010. The reduction of cash used is a result of our decision to conserve cash during the pre-FDA clearance period by incurring only expenses essential to obtain FDA clearance, transfer and validate manufacturing processes, expand and protect our patent position, and from a reduction in amounts used to increase operating assets and reduce operating liabilities compared to last year.
Net cash provided by financing activities was $200,000 during the six months ended June 30, 2011, resulting from borrowing provided under a $125,000 secured debt placement, a $100,000 bank line of credit, and a $99,000 insurance financing installment loan, less the repayment of $106,000 in other loans. Net cash provided by financing activities was $1.2 million during the six months ended June 30, 2010, resulting primarily from the $885,000 proceeds of a private debt offering and proceeds of $335,000 from the exercise of warrants by certain warrant holders, offset by a $100,000 repayment of bank debt.
Cash Requirements and Financing
Our cash and financing requirements can be broken down into three components: short term funds required to continue operations in the period leading up to FDA clearance, funds required to launch the ProUroScan System into the market following FDA clearance, and funds required for other obligations.
Pre-FDA Clearance.
Our short-term objective is to obtain sufficient funding to bridge the Company through two key events that we believe will accrue significant incremental value to shareholders, namely, (1) FDA clearance of our ProUroScan System and (2) the establishment of a strategic corporate relationship with a large urology product, diagnostic, therapeutic, or drug company. During this period, we must cover our current expenses and obligations, and fund any additional cost of consultants and legal representation needed to advance the FDA review process, as well as costs incurred to meet with prospective corporate partners. Recognizing the uncertainty inherent in projecting what the FDA’s review and clearance timeline will be, we are managing our expenses tightly during the pre-clearance period. Product development projects and certain remaining activities necessary to commercialize the ProUroScan System have been put on hold. Operating expenses that continue during this period include the compensation of our two executive officers, public company compliance and reporting costs, consulting costs related to interfacing with FDA, patent legal fees, directors’ and officers’ insurance premiums, debt service and office expenses. In total, we project these expenses will average less than $90,000 per month from July through December 2011. As funding permits, we expect that following FDA clearance but before corporate or other financing becomes available we will pursue a limited number of key activities that will serve to accelerate the eventual market introduction and increase Company value. We are presently engaged in a private offering of secured debt to meet these short term needs, with a goal to realize additional net proceeds of approximately $1 million. As of August 9, 2011, we had only limited cash available, and are dependent upon our ability to successfully raise these new funds to provide the cash needed to fund operations in the short-term.
Post-FDA Clearance
. Following FDA clearance, as we scale up operations for our commercial launch, we expect our cash requirements to increase significantly. Scale-up and commercial launch activities during the course of the first year include the establishment of internal regulatory and quality resources, the creation of a limited sales force, commercial sales of systems and tests, and the commencement of post-FDA studies in the institutions of our physician advisory council. We estimate that we will require $3.6 million to $4.2 million during the twelve months following FDA clearance to accomplish these goals. We anticipate that the funding required to launch the ProUroScan System will come from a strategic corporate partner, a new financing initiative, or both. These sources may be augmented by funds that may be realized from alternative funding sources that we have in place, including callable warrants and a financing commitment, as described below. In March 2011, we engaged the Minneapolis investment firm Cherry Tree & Associates to assist us in identifying a strategic distribution partner to help market our products, and are actively working to achieve that objective. We expect such a distribution partner may provide financial support in the form of loans, licensing fees, equity investment or a combination of these. In addition to financial support, a successful collaboration with such a partner would allow us to gain access to downstream marketing, manufacturing and sales support.
Another possible source of funding for our activities following FDA clearance is the remaining funding available under the terms of a $3.125 million Securities Purchase Agreement (the “SPA”) we executed with Seaside 88, LP (“Seaside”) in 2010. At the time the SPA was executed, we closed on an $875,000 first tranche of the funding. Under the terms of the SPA, the remaining $2.250 million funding is to be provided in six monthly tranches beginning with a $750,000 tranche within thirty days of receiving FDA clearance followed by five $300,000 tranches. At each of the future closings, we will sell unregistered shares of our common stock to Seaside at a cost that is 50% of the stock’s volume weighted average selling price (“VWASP”) during the 10 trading days preceding each closing date, subject to a floor VWASP of $2.50 per share, below which the parties are not obligated to close.
Other Obligations
. We are required to make a cash payment of $750,000 pursuant to the terms of the Artann development agreement upon receipt of FDA regulatory clearance. We expect that the majority of this obligation will be funded by the first tranche of funding under the Seaside SPA.
Our $900,000 secured promissory note with Crown Bank matures in September 2011, and will have to be repaid, renewed or refinanced at that time.
Other Funding Sources
.
If we experience extended delays in obtaining FDA clearance or in establishing a corporate partnership arrangement, we may need to obtain funding from other sources to execute our business plan. The additional funding may be from the redemption of outstanding warrants as described below, or from the issuance of equity securities, convertible debt, or other private debt. If any of these funding events occur, existing shareholders will likely experience dilution in their ownership interest. If additional funds are raised by the issuance of debt or certain equity instruments, we may become subject to certain operational limitations, and such securities may have rights senior to those of our existing holders of common stock.
As of June 30, 2011, we had 3,590,894 currently redeemable warrants outstanding. These warrants have an exercise price of $1.30 per share. If and when we choose to exercise our right to redeem the warrants, holders of the warrants will have a period of 30 days to exercise their warrants. We could realize up to approximately $4.7 million depending on the number of warrants actually exercised. We may call these warrants in 2011 to attempt to meet our financing needs outlined above. In addition, we will gain the ability to redeem 2,840,412 warrants with a $1.30 exercise price if the last sale price of our common stock were to equal or exceed $4.00 per share for a period of 10 consecutive trading days. If we were to subsequently exercise our redemption right on these warrants, we could realize up to an additional $3.7 million depending on the number of warrants actually exercised pursuant to such redemption. Our ability to successfully raise additional funding through the redemption of the warrants will depend to a high degree upon the market price of our common stock in relation to the exercise price. There can be no assurance that we will be able to redeem the warrants, or how much would be realized if such redemptions were made.
If our funding from warrants or other private funding initiatives is delayed or proves insufficient to allow an aggressive ramp-up toward market launch, or if FDA clearance of the ProUroScan System is delayed, we will be forced to delay U.S. commercialization activities.
Off-Balance Sheet Arrangements
None.
Going Concern
We have incurred operating losses, accumulated deficit and negative cash flows from operations since inception. As of June 30, 2011, we had an accumulated deficit of approximately $34.9 million. These factors, among others, raise substantial doubt about our ability to continue as a going concern. Our consolidated financial statements included in this Quarterly Report on Form 10-Q do not include any adjustments related to recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should we be unable to continue as a going concern.
Critical Accounting Policies
Our critical accounting policies are policies which have a high impact on the reporting of our financial condition and results, and require significant judgments and estimates. Our critical accounting policies relate to (a) the valuation of stock-based compensation awarded to employees, directors, loan guarantors and consultants, (b) the valuation of warrants issued as an incentive for early-exercise of outstanding warrants and (c) the accounting for debt with beneficial conversion features.
Valuation of Stock-Based Compensation
Since inception, we have measured and recognized compensation expense for all share-based payment awards made to employees and directors including employee stock options based on fair value. Our determination of fair value of share-based payment awards is based on the date of grant using an option-pricing model which incorporates a number of highly complex and subjective variables. These variables include, but are not limited to, the expected volatility of our stock price and estimates regarding projected employee stock option exercise behaviors and forfeitures. We recognize the expense related to the fair value of the award straight-line over the vesting period.
Valuation of Warrants Issued as an Incentive for Early-Exercise of Outstanding Warrants
We have completed two tender offers pursuant to which we have issued warrants as an incentive to certain warrant holders to exercise their existing warrants during the offering periods. Our determination of fair value of the replacement warrants is based on the date of grant using an option-pricing model which incorporates a number of highly complex and subjective variables. These variables include, but are not limited to, the expected volatility of our stock price. We recognize the expense related to the fair value of the warrants immediately upon issuance as incentive for early warrant exercise expense.
Accounting for Debt with Beneficial Conversion Features
The beneficial conversion features of the promissory notes were valued using the Black-Scholes pricing model. The resulting original issue discount is amortized over the life of the promissory notes using the straight-line method, which approximates the interest method.
Item 4. Controls and Procedures.
Disclosure Controls and Procedures
We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
As of June 30, 2011, the end of the period covered by this Quarterly Report on Form 10-Q, we carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective.
Changes in Internal Control Over Financial Reporting
During the quarter ended June 30, 2011, there has been no change in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART II. OTHER INFORMATION.
Item 1A. Risk Factors.
Investing in our securities involves a high degree of risk. You should carefully consider the risks and uncertainties set forth under Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2010 before investing in our securities. These risks and uncertainties are not the only ones facing our Company; additional risks and uncertainties may also impair our business operations. If any of the risks actually occur, our business, financial condition, results of operations or cash flows would likely suffer. In that case, the trading price of our securities could fall, and you may lose all or part of your investment. We undertake no obligation to update or revise any forward-looking statement except as required by the SEC.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Common Stock and Warrants
On April 13, 2011, the Company issued 36,669 shares of its common stock to its directors for $19,250 of directors’ fees earned during the three months ended March 31, 2011, in lieu of cash.
On April 15, 2011, the Company issued 113,333 shares to each of James Davis, a Director of the Company, and William Reiling, a greater than 5% shareholder of the Company as consideration for their guarantees of the Company’s $900,000 secured bank loan.
On May 12, 2011, the Company issued 8,475 shares of its common stock to an investor as consideration for providing a guarantee for the Company’s $100,000 line of credit with a bank. As consideration for providing the guaranty, the Company issued to the guarantor 6,667 shares of stock, and will accrue for issuance 1,111 shares of its common stock for each month or portion thereof that the principal amount of the loan remains outstanding beginning November 12, 2011. All accrued shares will be issued upon repayment of the loan.
On June 3, 2011, the Company issued 11,112 shares of common stock valued at $12,000 to David Koenig, a director, in lieu of cash for consulting fees.
Warrants
On June 21, 2011, the Company issued 150,000, five-year warrants to acquire shares of the Company’s common stock at $1.30 per share to a consultant pursuant to a six-month consulting agreement. Under the terms of the agreement, 100,000 of the warrants vested immediately, while the remaining 50,000 will vest over the last three months of the consulting period.
Convertible Debt
On June 29, 2011, the Company held a first closing on $125,000 in a private placement of 10% secured, subordinated convertible notes. Mr. Davis and Jack Petersen, a greater than 5% shareholder at the time of the transaction, each purchased $50,000 of the notes, and Larry Getlin, a Director of the Company, purchased $25,000 of the notes.
The notes bear interest at 10% per annum, mature on September 15, 2013 and are convertible into shares of the Company’s common stock at a conversion price of $1.30 per share.
Sales of the securities described above were made in compliance with the requirements of Rule 506 of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”) and the exemption from registration provided under Section 4(2) of the Securities Act. In qualifying for such exemption, the Company relied upon representations from the investors regarding their status as “accredited investors” under Regulation D and the limited manner of the offering.
Item 6. Exhibits.
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Exhibit No.
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Description
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10.1 *
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Line of credit agreement dated May 12, 2011 by and between ProUroCare Medical Inc. and Central Bank.
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10.2 *
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Form of 10% Secured, Subordinated Convertible Note issued pursuant to the Company’s private placement of promissory notes on June 29, 2011 (incorporated by reference to Exhibit 99.1 to Current Report on Form 8-K filed May 9, 2011).
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31.1 *
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Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Sarbanes-Oxley Act of 2002.
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31.2 *
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Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Sarbanes-Oxley Act of 2002.
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32.1 *
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Certification of Chief Executive Officer and Chief Financial Officer pursuant to pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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_______________
*Filed herewith.
Pursuant to the Securities Exchange Act of 1934, as amended, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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ProUroCare Medical Inc.
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Date: August 15, 2011
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By:
/s/ Richard C. Carlson
Name: Richard C. Carlson
Title: Chief Executive Officer
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Date: August 15, 2011
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By:
/s/ Richard Thon
Name: Richard Thon
Title: Chief Financial Officer
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Exhibit Index
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Exhibit No.
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Description
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10.1 *
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Line of credit agreement dated May 12, 2011 by and between ProUroCare Medical Inc. and Central Bank.
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10.2 *
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Form of 10% Secured, Subordinated Convertible Note issued pursuant to the Company’s private placement of promissory notes on June 29, 2011 (incorporated by reference to Exhibit 99.1 to Current Report on Form 8-K filed May 9, 2011).
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31.1 *
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Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Sarbanes-Oxley Act of 2002.
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31.2 *
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Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Sarbanes-Oxley Act of 2002.
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32.1 *
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Certification of Chief Executive Officer and Chief Financial Officer pursuant to pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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_______________
*Filed herewith.