Nevada
|
NeoGenomics,
Inc.
|
74-2897368
|
(State
or Other Jurisdiction of
Incorporation
or Organization)
|
(Name
of Registrant in Our
Charter)
|
(I.R.S.
Employer
Identification
No.)
|
Robert
P. Gasparini
|
||
12701
Commonwealth Drive, Suite 9
|
12701
Commonwealth Drive, Suite 9
|
|
Fort
Myers, Florida 33913
|
Fort
Myers, Florida 33913
|
|
(239)
768-0600
|
8731
|
(239)
768-0600
|
(Address
and telephone number of Principal Executive Offices
and
Principal Place of Business)
|
(Primary
Standard Industrial Classification Code Number)
|
(Name,
address and telephone number
of
agent for service)
|
With
a copy to:
Clayton
E. Parker, Esq.
Kirkpatrick
& Lockhart Preston Gates Ellis LLP
201
S. Biscayne Boulevard, Suite 2000
Miami,
Florida 33131
Telephone:
(305) 539-3300
Facsimile:
(305) 358-7095
|
||
Proposed
Maximum
|
||||
Title
Of Each Class
Of
Securities To Be Registered
|
Amount
To
Be Registered
|
Proposed
Maximum Offering Price
Per
Share(1)
|
Aggregate
Offering
Price(1)
|
Amount
Of
Registration Fee
|
Common
Stock, par value $0.001 per share
|
7,000,000
shares
|
$1.65
|
$11,340,000
|
$1,235.85
|
TOTAL
|
7,000,000
shares
|
$1.65
|
$11,340,000
|
$1,235.85
|
|
|
|
|
|
(1) Estimated
solely for the purpose of calculating the registration fee pursuant
to
Rule 457(c) under the Securities Act of 1933. For the purposes
of this
table, we have
used
the average of the closing bid and asked prices as of a recent
date.
|
|
·
|
Those Investors
set forth in the section herein entitled “Selling Stockholders” who intend
to sell up to 2,666,667 shares of Common Stock previously issued
and sold
by the Parent Company to the Investors for a purchase price
equal to $1.50 per share during the period from May 31, 2007 through
June
6, 2007 pursuant to a private equity transaction (the “Private
Placement”). The Investors received registration
rights with their shares and therefore, such shares are being registered
hereunder;
|
|
·
|
Those
Investors set forth in the section herein entitled “Selling Stockholders”
who intend to sell up to 1,500,000 shares of Common Stock previously
sold
by Aspen Select Healthcare,
L.P.(Aspen) to the Investors during the period from June
1, 2007 through June 5, 2007 in connection with the Private
Placement. The Investors received registration
rights with their shares and therefore, such shares are being registered
hereunder;
|
|
·
|
Noble
International Investments, Inc. (Noble)
which intends to sell up to 98,417 shares of Common Stock underlying
warrants previously issued by the Parent Company to Noble on June
5, 2007
in consideration for Noble’s services as placement agent in connection
with the Private Placement. Noble received piggy back
registration rights with its shares and therefore, such shares
are being
registered hereunder;
|
|
·
|
Dr.
Michael Dent, Chairman of the Board who intends to sell up to 345,671
shares of Common Stock previously issued and sold by the Company
to
Michael Dent as founder shares;
|
|
·
|
Aspen,
which intends to sell up to 1,889,245 shares of Common Stock previously
issued and sold by the Company to Aspen on April 15,
2003. Aspen received registration rights with
respect to these 1,889,245 shares and therefore,
such shares are being registered hereunder;
and
|
|
·
|
Lewis
Opportunity Fund and LAM Opportunity Fund are managed by Lewis
Asset
Management (LAM), which intends to sell up to 500,000 shares of
Common
Stock previously issued to LAM by the Company on June 6,
2007 upon conversion of certain warrants previously
sold by Aspen to LAM on June 6, 2007. The Company issued these
shares at an exercise price of $0.26 per share and
received gross proceeds equal to $130,000. LAM
received registration rights with its warrants and therefore,
such shares underlying such warrants are being registered
hereunder.
|
|
·
|
cytogenetics
testing, which analyzes human
chromosomes;
|
|
·
|
Fluorescence
In-Situ Hybridization (FISH) testing, which analyzes abnormalities
at the
chromosomal and gene levels;
|
|
·
|
flow
cytometry testing, which analyzes gene expression of specific markers
inside cells and on cell surfaces;
and
|
|
·
|
molecular
testing which involves analysis of DNA and RNA to diagnose and
predict the
clinical significance of various genetic sequence
disorders.
|
|
·
|
clinical
lab testing,
|
|
·
|
anatomic
pathology testing, and
|
|
·
|
genetic
and molecular testing.
|
Attributes
|
Clinical
|
Anatomic
Pathology
|
Genetic/Molecular
|
Testing
Performed On
|
Blood,
Urine
|
Tissue/Cells
|
Chromosomes/Genes/DNA
|
Testing
Volume
|
High
|
Low
|
Low
|
Physician
Involvement
|
Low
|
High
- Pathologist
|
Low
- Medium
|
Malpractice
Ins. Required
|
Low
|
High
|
Low
|
Other
Professionals Req.
|
None
|
None
|
Cyto/Molecular
geneticist
|
Level
of Automation
|
High
|
Low-Moderate
|
Moderate
|
Diagnostic
in Nature
|
Usually
Not
|
Yes
|
Yes
|
Types
of Diseases Tested
|
Many
Possible
|
Primarily
to Rule out Cancer
|
Rapidly
Growing
|
Typical
per Price/Test
|
$5
- $35/Test
|
$25
- $500/Test
|
$200
- $1,000/Test
|
Estimated
Size of Market
|
$25
- $30 Billion
|
$10
- $12 Billion
|
$4
- $5 Billion (2)
|
Estimated
Annual Growth Rate
|
4%
-5%
|
6%
- 7%
|
25+%
|
EstablishedCompetitors
|
Quest
Diagnostics
|
Quest
Diagnostics
|
Genzyme
Genetics
|
LabCorp
|
LabCorp
|
Quest
Diagnostics
|
|
Bio
Reference Labs
|
Genzyme
Genetics
|
LabCorp
|
|
DSI
Laboratories
|
Ameripath
|
Major
Universities
|
|
Hospital
Labs
|
Local
Pathologists
|
||
Regional
Labs
|
|||
(1)Derived
from industry analyst reports.
(2) Includes
flow cytometry testing, which historically has been classified
under
anatomic pathology.
|
FY
2006
|
FY
2005
|
%
Inc (Dec)
|
||||||||||
Customer
Requisitions Rec’d (Cases)
|
9,563
|
2,982
|
220.7 | % | ||||||||
Number
of Tests Performed
|
12,838
|
4,082
|
214.5 | % | ||||||||
Average
Number of Tests/Requisition
|
1.34
|
1.37
|
(2.1 | %) | ||||||||
Total
Testing Revenue
|
$ |
6,475,996
|
$ |
1,885,324
|
243.5 | % | ||||||
Average
Revenue/Requisition
|
$ |
677.19
|
$ |
632.23
|
7.1 | % | ||||||
Average
Revenue/Test
|
$ |
504.44
|
$ |
461.86
|
9.2 | % | ||||||
FY
2007
|
FY
2006
|
%
Inc (Dec)
|
||||||||||
Customer
Requisitions Rec’d (Cases)
|
3,083
|
1,948
|
55.4 | % | ||||||||
Number
of Tests Performed
|
4,196
|
2,664
|
57.5 | % | ||||||||
Average
Number of Tests/Requisition
|
1.36
|
1.37
|
(0.7 | %) | ||||||||
Total
Testing Revenue
|
$ |
2,242,661
|
$ |
1,343,800
|
66.9 | % | ||||||
Average
Revenue/Requisition
|
$ |
727.43
|
$ |
689.83
|
5.5 | % | ||||||
Average
Revenue/Test
|
$ |
534.48
|
$ |
504.42
|
6.0 | % | ||||||
Average
Revenue/Test
|
||||
Cytogenetics
|
$ |
400-$500
|
||
Fluorescence
In Situ Hybridization (FISH)
|
||||
-
Technical component
|
$ |
300-$1000
|
||
-
Professional component
|
$ |
200-$500
|
||
Flow
cytometry
|
||||
-
Technical component
|
$ |
400-$700
|
||
-
Professional component
|
$ |
100-$200
|
||
Morphology
|
$ |
400-$700
|
||
Total
|
$ |
1,800-$3,600
|
||
|
·
|
Those Investors
set forth in the section herein entitled “Selling Stockholders” who intend
to sell up to 2,666,667 shares of Common Stock previously issued
and sold
by the Parent Company to the Investors for a purchase price
equal to $1.50 per share during the period from May 31, 2007 through
June
6, 2007 pursuant to a private equity transaction (the “Private
Placement”). The Investors received registration
rights with their shares and therefore, such shares are being registered
hereunder;
|
|
·
|
Those
Investors set forth in the section herein entitled “Selling Stockholders”
who intend to sell up to 1,500,000 shares of Common Stock previously
sold
by Aspen Select Healthcare,
L.P.(Aspen) to the Investors during the period from June
1, 2007 through June 5, 2007 in connection with the Private
Placement. The Investors received registration
rights with their shares and therefore, such shares are being registered
hereunder;
|
|
·
|
Noble
International Investments, Inc. (Noble)
which intends to sell up to 98,417 shares of Common Stock underlying
warrants previously issued by the Parent Company to Noble on June
5, 2007
in consideration for Noble’s services as placement agent in connection
with the Private Placement. Noble received piggy-back
registration rights with its shares and therefore, such shares
are being
registered hereunder;
|
|
·
|
Dr.
Michael Dent, Chairman of the Board who intends to sell up to 345,671
shares of Common Stock previously issued and sold by the Company
to
Michael Dent as founder shares;
|
|
·
|
Aspen,
which intends to sell up to 1,889,245 shares of Common Stock previously
issued and sold by the Company to Aspen on April 15,
2003. Aspen received registration rights with
respect to these 1,889,245 shares and therefore,
such shares are being registered hereunder;
and
|
|
·
|
Lewis
Opportunity Fund and LAM Opportunity Fund are managed by Lewis
Asset
Management (LAM), which intends to sell up to 500,000 shares of
Common
Stock previously issued to LAM by the Company on June 6,
2007 upon conversion of certain warrants previously
sold by Aspen to LAM on June 6, 2007. The Company issued these
shares at an exercise price of $0.26 per share and
received gross proceeds equal to $130,000. LAM
received registration rights with its warrants and therefore,
such shares underlying such warrants are being registered
hereunder.
|
Common
Stock Offered
|
7,000,000
shares by selling stockholders
|
Offering
Price
|
Market
price
|
Common
Stock Currently Outstanding
|
31,285,980
shares as of June 30, 2007
|
Use
of Proceeds
|
We
will not receive any proceeds of the shares offered by the selling
stockholders. See “Use of Proceeds”.
|
Risk
Factors
|
The
securities offered hereby involve a high degree of risk. See “Risk
Factors”.
|
Over-the-Counter
Bulletin Board Symbol
|
NGNM.OB
|
For
the Years Ended
December
31,
|
||||||||
2006
|
2005
|
|||||||
Statement
of Operations Data:
|
||||||||
Net
revenue
|
$ |
6,475,996
|
$ |
1,885,324
|
||||
Cost
of revenue
|
2,759,190
|
1,132,671
|
||||||
Gross
margin
|
3,716,806
|
752,653
|
||||||
Other
operating expense
|
3,576,812
|
1,553,017
|
||||||
Other
income/expense
|
269,655
|
196,796
|
||||||
Net
income (loss)
|
$ | (129,661 | ) | $ | (997,160 | ) | ||
Net
income (loss) per share - basic and diluted
|
$ | (0.00 | ) | $ | (0.04 | ) | ||
Weighted
average number of shares outstanding – basic and diluted
|
26,166,031
|
22,264,435
|
||||||
As
of December 31,
|
||||||||
2006
|
2005
|
|||||||
Balance
Sheet Data:
|
||||||||
Assets:
|
||||||||
Cash
and cash equivalents
|
$ |
126,266
|
$ |
10,944
|
||||
Accounts
receivable (net of allowance for doubtful accounts of $103,463
as of
December 31, 2006 and $37,807 as of December 31, 2005)
|
1,549,758
|
551,099
|
||||||
Inventories
|
117,362
|
60,000
|
||||||
Other
current assets
|
102,172
|
58,509
|
||||||
Total
current assets
|
1,895,558
|
680,552
|
||||||
Furniture
and equipment (net of accumulated depreciation of $494,942
as of December
31, 2006 and $261,311 as of December 31, 2005)
|
1,202,487
|
381,556
|
||||||
Other
assets
|
33,903
|
17,996
|
||||||
Total
assets
|
$ |
3,131,948
|
$ |
1,080,104
|
||||
Liabilities
& Stockholders’ Equity (Deficit):
|
||||||||
Total
current liabilities
|
$ |
2,628,487
|
$ |
665,849
|
||||
Long
term liabilities:
Long
term portion of equipment capital leases at December 31, 2006
and due
to
affiliates
(net of discount of $90,806) at December 31, 2005
|
448,947
|
1,409,194
|
||||||
Total
liabilities
|
3,077,434
|
2,075,043
|
Common
Stock, $0.001 par value, 100,000,000 shares authorized; 27,061,476
shares
issued and outstanding as of December31, 2006; 22,836,754 shares
issued
and outstanding as of December 31, 2005
|
27,061
|
22,836
|
||||||
Additional
paid-in capital
|
11,300,135
|
10,005,308
|
||||||
Deferred
stock compensation
|
(122,623 | ) | (2,685 | ) | ||||
Accumulated
deficit
|
(11,150,059 | ) | (11,020,398 | ) | ||||
Total
stockholders’ equity (deficit)
|
54,514
|
(994,939 | ) | |||||
Total
Liabilities and Stockholders’ Equity
|
$ |
3,131,948
|
$ |
1,080,104
|
||||
For
the Periods Ended
March
31,
|
||||||||
2007
|
2006
|
|||||||
Statement
of Operations Data:
|
||||||||
Revenue
|
$ |
2,242,661
|
$ |
1,343,800
|
||||
Cost
of Revenue
|
936,734
|
576,797
|
||||||
Gross
Profit
|
1,305,927
|
767,003
|
||||||
Other
Operating Expenses
|
1,525,472
|
660,569
|
||||||
Net
Income (Loss)
|
$ | (219,545 | ) | $ |
106,434
|
|||
Net
Income (Loss) Per Share – Basic
|
$ | (0.01 | ) | $ |
0.00
|
|||
Net
Income (Loss) Per Share – Diluted
|
$ | (0.01 | ) | $ |
0.00
|
|||
Weighted
Average Number of Shares Outstanding – Basic
|
27,371,233
|
24,752,083
|
||||||
Diluted
|
27,371,233
|
25,512,363
|
||||||
As
of March 31,
|
||||||||
2007
|
2006
|
|||||||
Balance
Sheet Data:
|
||||||||
Assets:
|
||||||||
Cash
and cash equivalents
|
$ |
575,393
|
$ |
260,081
|
||||
Accounts
receivable (net of allowance for doubtful accounts of $126,363
as of March
31, 2007 and $47,712 as of March 31, 2006)
|
1,986,229
|
898,095
|
||||||
Inventories
|
155,190
|
46,704
|
||||||
Other
current assets
|
106,039
|
77,953
|
||||||
Total
current assets
|
2,822,851
|
1,282,833
|
||||||
Furniture
and Equipment (net of accumulated depreciation of $492,548
as of March 31,
2007 and $301,002 as of March 31, 2006)
|
1,409,381
|
736,611
|
||||||
Other
Assets
|
39,791
|
12,638
|
||||||
Total
assets
|
$ |
4,272,023
|
$ |
2,032,082
|
||||
Liabilities
& Stockholders’ Equity:
|
||||||||
Total
current liabilities
|
$ |
2,872,277
|
$ |
764,726
|
||||
Long
term liabilities:
(Long
term portions of equipment leases)
|
610,056
|
1,531,508
|
||||||
Total
liabilities
|
3,482,333
|
2,296,234
|
||||||
Common
Stock, $0.001 par value, 100,000,000 shares authorized; 27,697,958
shares
issued and outstanding as of March 31, 2007; 26,218,843 shares
issued and
outstanding as of March 31, 2006
|
27,698
|
26,219
|
||||||
Additional
paid-in capital
|
12,342,983
|
10,683,399
|
||||||
Deferred
stock compensation
|
(211,388 | ) | (59,805 | ) | ||||
Accumulated
deficit
|
(11,369,603 | ) | (10,913,965 | ) | ||||
Total
stockholders’ equity (deficit)
|
789,690
|
(264,152 | ) | |||||
Total
Liabilities and Stockholders’ Equity
|
$ |
4,272,023
|
$ |
2,032,082
|
||||
|
·
|
pricing
differences between our fee schedules and the reimbursement rates
of the
payers;
|
|
·
|
disputes
with payers as to which party is responsible for payment;
and
|
|
·
|
disparity
in coverage and information requirements among various
carriers.
|
|
·
|
With
a price of less than $5.00 per
share;
|
|
·
|
That
are not traded on a “recognized” national
exchange;
|
|
·
|
Whose
prices are not quoted on the Nasdaq automated quotation
system;
|
|
·
|
Nasdaq
stocks that trade below $5.00 per share are deemed a “penny stock” for
purposes of Section 15(b)(6) of the Exchange
Act;
|
|
·
|
In
issuers with net tangible assets less than $2.0 million (if the
issuer has
been in continuous operation for at least three (3) years) or $5.0
million
(if in continuous operation for less than three (3) years), or
with
average revenues of less than $6.0 million for the last three (3)
years.
|
|
·
|
Broker/dealers
dealing in penny stocks are required to provide potential investors
with a
document disclosing the risks of penny stocks. Moreover, broker/dealers
are required to determine whether an investment in a penny stock
is a
suitable investment for a prospective investor. These requirements
may
reduce the potential market for our Common Stock by reducing the
number of
potential investors. This may make it more difficult for investors
in our
Common Stock to sell shares to third parties or to otherwise dispose
of
them. This could cause our stock price to
decline.
|
Selling
Stockholders
|
Shares
Beneficially Owned Before Offering(1)
|
Percentage
of Outstanding Shares Beneficially Owned Before Offering(1)
|
Shares
To Be Sold In The Offering
|
Percentage
of Outstanding Shares Beneficially Owned After The
Offering
|
||||||||||||
James
R. Rehak & Joann M. Rehak JTWROS
|
383,633
|
1.23 | % |
33,333
|
1.12 | % | ||||||||||
Leonard
Samuels IRA
|
110,000
|
*
|
110,000
|
*
|
||||||||||||
A.
Scott Logan Revocable Living Trust
|
3,400,000 | (2) | 10.56 | % |
500,000
|
9.15 | % | |||||||||
William
J. Robison
|
55,000
|
*
|
55,000
|
*
|
||||||||||||
Mosaic
Partners Fund
|
277,640
|
*
|
177,500
|
*
|
||||||||||||
Mosaic
Partners Fund (US), LP
|
119,129
|
*
|
72,500
|
*
|
||||||||||||
Ridgecrest
Ltd.
|
53,000
|
*
|
53,000
|
*
|
||||||||||||
Ridgecrest
Partners QP, LP
|
205,000
|
*
|
205,000
|
*
|
||||||||||||
Ridgecrest,
LP
|
12,000
|
*
|
12,000
|
*
|
||||||||||||
Leviticus
Partners, LP
|
200,000
|
*
|
200,000
|
*
|
||||||||||||
1837
Partners, L.P.
|
1,689,429
|
5.40 | % | 886,000 | (3) | 2.64 | % | |||||||||
1837
Partners QP, L.P.
|
404,968
|
1.29 | % | 228,200 | (4) |
*
|
||||||||||
1837
Partners, Ltd.
|
425,203
|
1.36 | % | 235,500 | (5) |
*
|
||||||||||
Lewis
Opportunity Fund, LP
|
1,077,617
|
3.44 | % | 1,077,617 | (6) |
*
|
||||||||||
LAM
Opportunity Fund, Ltd.
|
220,717
|
*
|
135,717 | (7) |
*
|
|||||||||||
Mark
G. Egan IRA Rollover
|
600,000
|
1.92 | % | 600,000 | (8) |
*
|
||||||||||
Aspen
Select Healthcare, L.P.
|
12,341,577 | (8) | 35.63 | % | 1,889,245 | (9) | 31.92 | % | ||||||||
Dr.
Michael T. Dent
|
2,756,492
|
8.67 | % |
345,671
|
7.67 | % | ||||||||||
Noble
International Investments, Inc.
|
98,417 | (10) |
*
|
98,417 | (10) |
*
|
||||||||||
Total:
|
24,429,822
|
67.61 | % |
7,000,000
|
59.82 | % | ||||||||||
* Less
than one percent (1%).
(1) Applicable
percentage of ownership is based on 31,285,984 shares of our
Common Stock
outstanding as of June 30, 2007, together with securities exercisable
or
convertible into shares of Common Stock within sixty (60) days
of June 30,
2007 for each stockholder. Beneficial ownership is determined
in accordance with the rules of the SEC and generally includes
voting or
investment power with respect to securities. Shares of Common
Stock are deemed to be beneficially owned by the person holding
such
securities for the purpose of computing the percentage of ownership
of
such person, but are not treated as outstanding for the purpose
of
computing the percentage ownership of any other person. Note
that affiliates are subject to Rule 144 and Insider trading regulations
-
percentage computation is for form purposes only.
(2) SKL
Family Limited Partnership has direct ownership of 2,000,000
shares and
currently exercisable warrants to purchase 900,000 shares. A.
Scott Logan Revocable Living Trust has direct ownership of 500,000
shares. A. Scott Logan is the general partner SKL Limited
Family Partnership and trustee for A. Scott Logan Revocable Living
Trust. A. Scott Logan has only 1% of the assets of SKL Family
Limited Partnership. An additional 1% of asset is
owned by A. Scott Logan son’s, and 98% of asserts is owned by a grantor
retained annuity trust.
(3) Of
these shares, 383,100 were acquired by 1837 Partners, L.P. as
an Investor from the Company and 502,900 were acquired as a
Investor from Aspen in connection with the Private Placement.
(4) Of
these shares, 108,000 were acquired by 1837 Partners QP, L.P.
as an
Investor from the Company and 120,500 were acquired as an Investor
from
Aspen in connection with the Private Placement.
(5) Of
these shares, 108,900 were acquired by 1837 Partners Ltd. as
an Investor
from the Company and 126,600 were acquired as an Investor from
Aspen in
connection with the Private Placement.
(6) Of
these shares, 455,117 were acquired by Lewis Opportunity Fund,
LP as an
Investor from the Company, 207,500 were acquired as an Investor
from Aspen
in connection with the Private Placement and 415,000 were issued
by the
Company upon the conversion of warrants previously purchased
from
Aspen.
(7) Of
these shares, 93,217 were acquired by Lewis Opportunity Fund,
Ltd. as an
Investor from the Company, 42,500 were acquired as an Investor
from Aspen
in connection with the Private Placement and 85,000 were issued
by the
Company upon the conversion of warrants previously purchased
from
Aspen.
(8) Of
these shares, 100,000 were acquired by Mark G. Egan IRA Rollover
as an
Investor from the Company and 500,000 were acquired as
an Investor from Aspen in connection with the Private
Placement.
(9) Of
these shares, 250,000 underlie currently exercisable warrants
issued by
the Company in connection with the Private Placement.
(10) These
shares represent shares of our Common Stock issuable to Noble
upon
conversion of currently exercisable warrants issued by the Company
in
connection with the Private Placement for Noble’s service as placement
agent.
|
|
·
|
James
R. Rehak & Joann M. Rehak JTWROS
(“Rehaks”). The Rehaks purchased 33,333 shares of
our Common Stock at a purchase price of $1.50 per share, and the
Company
in turn received $50,000 as part of the Private Placement. The
Rehaks received registration rights with the shares and therefore,
we are
registering these 33,000 shares in this offering. All
investment decisions of the Rekaks are made
by James. R. Rehak
and Joann M. Rehak.
|
|
·
|
Leonard
Samuels IRA (“LSI”). LSI purchased 110,000 shares of our
Common Stock at a purchase price of $1.50 per share, and the Company
in
turn received $165,000 as part of the Private Placement. LSI
received registration rights with the shares and therefore, we
are
registering these 110,000 shares in this offering. All
investment decisions of LSI are made by Charles Schwab & Co. Inc., as
Custodian for Leonard Samuels IRA.
|
|
·
|
A.
Scott Logan Revocable Living Trust (SL Trust). SL Ttrust
purchased 500,000 shares of our Common Stock at a purchase price
of $1.50
per share, and the Company in turn received $750,000 as part of
the
Private Placement. SL Trust received registration rights with
the shares and therefore, we are registering these 500,000 shares
in this
offering. All investment decisions of SL Trust are made by A.
Scott Logan, Trustee.
|
|
·
|
William
J. Robison (Mr. Robison). Mr. Robison, who serves
as a member of the Board of Directors of the Company, purchased
55,000
shares of our Common Stock at a purchase price of $1.50 per share,
and the
Company in turn received $82,500 as part of the Private
Placement. Mr. Robison received registration rights with the
shares and therefore, we are registering these 55,000 shares in
this
offering.
|
|
·
|
1837
Partners, L.P. (1837P1). 1837P1 purchased 383,100
shares of our Common Stock from the Company at a purchase price
of $1.50
per share, and the Company in turn received $574,650 as part of
the
Private Placement. 1837P1 received registration rights with the
shares and therefore, we are registering these 383,100 shares in
this
offering. All investment decisions of 1837P1 are made by
Francis Tuite.
|
|
·
|
1837
Partners QP, L.P. (1837P2). 1837P2 purchased
108,000 shares of our Common Stock from the Company at a purchase
price of
$1.50 per share, and the Company in turn received $162,000 as part
of the
Private Placement. 1837P2 received registration
rights with the shares and therefore, we are registering these
108,000
shares in this offering. All investment decisions of 1837P2 are
made by Francis Tuite.
|
|
·
|
1837
Partners, Ltd. (1837P3). 1837P3 purchased 108,900
shares of our Common Stock from the Company at a purchase price
of $1.50
per share, and the Company in turn received $163,350 as part of
the
Private Placement. 1837P3 received registration rights with the
shares and therefore, we are registering these 383,100 shares in
this
offering. All investment decisions of 1837P3 are made by
Francis Tuite.
|
|
·
|
Lewis
Opportunity Fund, LP (LOF). LOF purchased 455,117
shares of our Common Stock from the Company at a purchase price
of $1.50
per share, and the Company in turn received $682,676 as part of
the
Private Placement. LOF received registration rights with the
shares and therefore, we are registering these 455,117 shares in
this
offering. All investment decisions of LOF are made by Austin
Lewis.
|
|
·
|
LAM
Opportunity Fund, Ltd. (LAMOF). LAMOF purchased
93,217 shares of our Common Stock from the Company at a
purchase price of $1.50 per share, and the Company in turn
received $139,826 as part of the Private Placement. LAMOF
received registration rights with the shares and therefore, we
are
registering these 93,217 shares in this offering. All
investment decisions of LAMOF are made by Austin
Lewis.
|
|
·
|
Mark
G. Egan IRA Rollover (MGE). MGE purchased 100,000
shares of our Common Stock from the Company at a purchase price
of $1.50
per share, and the Company in turn received $150,000 as part of
the
Private Placement. MGE received registration rights with the
shares and therefore, we are registering these 100,000 shares in
this
offering. All investment decisions of MGE are made by Marlin
Capital.
|
|
·
|
Mosaic
Partners Fund (Mosaic). Mosaic purchased 177,500
shares of our Common Stock from the Company at a purchase price
of $1.50
per share, and the Company in turn received $266,250 as part of
the
Private Placement. Mosaic received registration
rights with the shares and therefore, we are registering these
177,500
shares in this offering. All investment decisions of Mosaic are
made by Ajay Sekhand.
|
|
·
|
Mosaic
Partners Fund (US), LP (MPF). MPF purchased
72,500 shares of our Common Stock from the Company at a purchase
price of
$1.50 per share, and the Company in turn received $108,750 as part
of the
Private Placement. MPF received registration rights with the
shares and therefore, we are registering these 72,500 shares in
this
offering. All investment decisions of MPF are made Ajay
Sekhand.
|
|
·
|
Ridgecrest
Ltd. (Ridgecrest). Ridgecrest purchased 53,000
shares of our Common Stock from the Company at a purchase price
of $1.50
per share, and the Company in turn received $79,500 as part of
the Private
Placement. Ridgecrest received registration rights with the
shares and therefore, we are registering these 53,000 shares in
this
offering. All investment decisions of Ridgecrest are made by
Todd McElroy.
|
|
·
|
Ridgecrest
Partners QP, LP (Ridgecrest
II). Ridgecrest II purchased 205,000 shares of
our Common Stock from the Company at a purchase price of $1.50
per share,
and the Company in turn received $307,500 as part of the Private
Placement. Ridgecrest II received registration rights with the
shares and therefore, we are registering these 205,000 shares in
this
offering. All investment decisions of Ridgecrest II are made by
Todd McElroy.
|
|
·
|
Ridgecrest,
LP (Ridgecrest III). Ridgecrest III purchased
12,000 shares of our Common Stock from the Company at a purchase
price of
$1.50 per share, and the Company in turn received $18,000 as part
of
the
|
|
·
|
Leviticus
Partners, LP (Leviticus). Leviticus purchased
200,000 shares of our Common Stock from the Company at a purchase
price of
$1.50 per share, and the Company in turn received $300,000 as part
of the
Private Placement. Leviticus received registration rights with
the shares and therefore, we are registering these 200,000 shares
in this
offering. All investment decisions of Leviticus are made by
Adam M. Hutt.
|
|
·
|
1837
Partners, L.P. (1837P1). 1837P1 purchased 502,900
shares of our Common Stock from Aspen on June 1, 2007 and
received registration rights with the shares and therefore, we
are registering these 502,900 shares in this
offering.
|
|
·
|
1837
Partners QP, L.P. (1837P2). 1837P2 purchased
120,500 shares of our Common Stock on June 1, 2007 and received
registration rights with the shares and therefore, we are registering
these 108,000 shares in this
offering.
|
|
·
|
1837
Partners, Ltd. (1837P3). 1837P3 purchased 126,600
shares of our Common Stock from Aspen on June 1, 2007 and received
registration rights with the shares and therefore, we are registering
these 126,600 shares in this
offering
|
|
·
|
Lewis
Opportunity Fund, LP (LOF). LOF purchased 207,500
shares of our Common Stock from Aspen on June 5, 2007 and
received registration rights with the shares and therefore, we
are registering these 207,500 shares in this offering. All
investment decisions of LOF are made by
LAM.
|
|
·
|
LAM
Opportunity Fund, Ltd. (LAMOF). LAMOF purchased
42,500 shares of our Common Stock from Aspen on June 5, 2007 and
received
registration rights with the shares and therefore, we are registering
these 42,500 shares in this
offering.
|
|
·
|
Mark
G. Egan IRA Rollover (MGE). MGE purchased 500,000
shares of our Common Stock from Aspen on June 5, 2007 and received
registration rights with the shares and therefore, we are registering
these 500,000 shares in this
offering
|
|
·
|
Noble
International Investments, Inc.
(Noble). The Company engaged Noble,
an unaffiliated registered broker-dealer, to advise us as our placement
agent in connection with the Private Placement pursuant to that
certain
Letter Agreement, dated May 21, 2007, by and between the Parent
Company
and Noble. In consideration for its services, Noble received
(a) warrants to purchase 98,417 shares of our Common Stock, which
such
warrants have a five (5) year term, a purchase price equal to
$1.50 per share, cashless exercise provisions, customary anti-dilution
provisions and the same other terms, conditions, rights and preferences
as
those shares sold to the Investors by the Company in the Private
Placement, and (b) an additional cash fee equal to five percent
(5%) of
the gross proceeds from each sale made to the Investors by the
Company, or
$147,625.50. Noble received piggy-back registration rights with
its shares, and therefore we are registering 98,417 shares for
Noble
hereunder. All investment decisions for Noble are made by Shaun
Titcomb.
|
|
·
|
Lewis
Opportunity Fund, LP (LOF). LOF purchased from
Aspen a warrant to purchase 415,000 shares of our Common Stock
on June 6,
2007and received registration rights for the shares underlying
the warrant. On June 6, 2007, 2007, LOF exercised the warrant
whereby the Company issued and sold to LOF 415,000 shares at $0.26
per
share. As a result, the Company received
$107,900. We are registering these 415,000 shares in this
offering. All investment decisions of LOF are made by Austin
Lewis.
|
|
·
|
LAM
Opportunity Fund, Ltd. (LAMOF). LAMOF purchased
from Aspen a warrant to purchase 85,000 shares of our Common Stock
on June
6, 2007 and received registration rights for the shares underlying
the
warrant. On June 6, 2007, LAMOF exercised the warrant whereby
the Company issued and sold to LOF 85,000 shares at $0.26 per
share. As a result, the Company received $22,100. We
are registering these 85,000 shares in this offering. All
investment decisions of LAMOF are made by Austin
Lewis.
|
|
·
|
Revenue
Recognition
|
|
·
|
Accounts
Receivable
|
|
·
|
Increase
of approximately 234% in employee labor and benefit related
costs;
|
|
·
|
Increase
of approximately 136% in supply costs;
and
|
|
·
|
Increase
of approximately 183% in postage and delivery
costs.
|
|
·
|
Increase
of approximately 88% in employee labor and benefit related
costs;
|
|
·
|
Increase
of approximately 470% in facility
costs;
|
|
·
|
Increase
of approximately 71% in supply costs;
and
|
|
·
|
Increase
of approximately 133% in postage and delivery
costs.
|
Request
Date
|
Completion
Date
|
Shares
of Common Stock Issued/Sold
|
Gross
Proceeds Received
|
Cornell
Fee
|
Escrow
Fee
|
Net
Proceeds
|
ASP(1)
|
8/29/2005
|
9/8/2005
|
63,776
|
$25,000
|
$1,250
|
$500
|
$23,250
|
|
12/10/2005
|
12/18/2005
|
241,779
|
50,000
|
2,500
|
500
|
47,000
|
|
Subtotal
- 2005
|
305,555
|
$75,000
|
$3,750
|
$1,000
|
$70,250
|
$0.25
|
|
7/19/2006
|
7/28/2006
|
83,491
|
53,000
|
2,500
|
500
|
50,000
|
|
8/8/2006
|
8/16/2006
|
279,486
|
250,000
|
12,500
|
500
|
237,000
|
|
10/18/2006
|
10/23/2006
|
167,842
|
200,000
|
10,000
|
500
|
189,500
|
|
Subtotal
- 2006
|
530,819
|
$503,000
|
$25,000
|
$1,500
|
$476,500
|
$0.95
|
|
12/29/2006
|
1/10/2007
|
98,522
|
150,000
|
7,500
|
500
|
142,000
|
|
1/16/2007
|
1/24/2007
|
100,053
|
150,000
|
7,500
|
500
|
142,000
|
|
2/1/2007
|
2/12/2007
|
65,902
|
100,000
|
5,000
|
500
|
94,500
|
|
2/19/2007
|
2/28/2007
|
166,611
|
250,000
|
12,500
|
500
|
237,000
|
|
2/28/2007
|
3/7/2007
|
180,963
|
250,000
|
12,500
|
500
|
237,000
|
|
4/5/2007
|
4/16/2007
|
164,777
|
250,000
|
12,500
|
500
|
237,000
|
|
4/20/2007
|
4/30/2007
|
173,467
|
250,000
|
12,500
|
500
|
237,000
|
|
Subtotal
- 2007 YTD
|
950,295
|
$1,400,000
|
$70,000
|
$3,500
|
$1,326,500
|
$1.48
|
|
Total
Since Inception
|
1,786,669
|
$1,978,000
|
$98,750
|
$6,000
|
$1,873,250
|
$1.19
|
|
Remaining
|
$3,022,000
|
||||||
Total
Facility
|
$5,000,000
|
||||||
(1) Average
Selling Price of shares issued.
|
|||||||
Years
ending December 31,
|
Amounts
|
|||
2007
|
$ |
227,082
|
||
2008
|
219,471
|
|||
2009
|
214,015
|
|||
2010
|
219,907
|
|||
2011
|
105,710
|
|||
Total
minimum lease payments
|
$ |
986,185
|
||
Date
|
Type
|
Months
|
Cost
|
Monthly
Payment
|
Balance
at December 31, 2006
|
||||||||||||
March
2006
|
Laboratory
Equipment
|
60
|
$ |
134,200
|
$ |
2,692
|
$ |
117,117
|
|||||||||
August
2006
|
Laboratory
Equipment
|
60
|
48,200
|
1,200
|
43,724
|
||||||||||||
August
2006
|
Laboratory
Equipment
|
60
|
98,400
|
2,366
|
90,140
|
||||||||||||
August
2006
|
Laboratory
Equipment
|
60
|
101,057
|
2,316
|
89,630
|
||||||||||||
August
2006
|
Laboratory
Equipment
|
60
|
100,200
|
2,105
|
86,740
|
||||||||||||
November
2006
|
Laboratory
Equipment
|
60
|
19,900
|
434
|
19,348
|
||||||||||||
November
2006
|
Computer
Equipment
|
60
|
9,700
|
228
|
9,366
|
||||||||||||
December
2006
|
Computer
Equipment
|
48
|
19,292
|
549
|
17,742
|
||||||||||||
December
2006
|
Computer
Equipment
|
48
|
25,308
|
718
|
24,003
|
||||||||||||
December
2006
|
Office
Equipment
|
60
|
46,100
|
994
|
45,567
|
||||||||||||
Total
|
$ |
602,357
|
$ |
13,602
|
$ |
543,377
|
|||||||||||
Years
ending December 31,
|
Amounts
|
|||
2007
|
$ |
163,219
|
||
2008
|
163,219
|
|||
2009
|
163,219
|
|||
2010
|
161,951
|
|||
2011
|
89,582
|
|||
Total
future minimum lease payments
|
741,190
|
|||
Less
amount representing interest
|
197,813
|
|||
Present
value of future minimum lease payments
|
543,377
|
|||
Less
current maturities
|
94,430
|
|||
Obligations
under capital leases - long term
|
$ |
448,947
|
||
Monthly
|
Obligation
at
|
||||||||||||||||
Date
|
Type
|
Months
|
Cost
|
Payment
|
March
31, 2007
|
||||||||||||
Feb
2007
|
Computer
Hardware
|
36
|
$ |
3,618
|
$ |
127
|
$ |
3,289
|
|||||||||
Feb
2007
|
Computer
Hardware
|
36
|
4,508
|
153
|
4,202
|
||||||||||||
Feb
2007
|
Lab
Equipment
|
48
|
80,015
|
2,289
|
75,181
|
||||||||||||
Mar
2007
|
Lab
Equipment
|
60
|
135,655
|
2,746
|
135,646
|
||||||||||||
Mar
2007
|
Computer
Software
|
36
|
15,783
|
527
|
14,693
|
||||||||||||
Totals
|
|
$ |
239,579
|
$ |
5,842
|
$ |
233,011
|
2005
|
||||
Net
loss:
|
||||
As
reported
|
$ | (997,160 | ) | |
Pro
forma
|
$ | (1,022,550 | ) | |
Loss
per share:
|
||||
As
reported
|
$ | (0.04 | ) | |
Pro
forma
|
$ | (0.05 | ) | |
Number
of Shares
|
Weighted
Average Exercise Price
|
|||||||
Outstanding
at December 31, 2004
|
882,329
|
$ |
0.16
|
|||||
Granted
|
1,442,235
|
0.27
|
||||||
Exercised
|
(42,235 | ) |
0.00
|
|||||
Canceled
|
(482,329 | ) |
0.09
|
|||||
Outstanding
at December 31, 2005
|
1,800,000
|
0.27
|
||||||
Granted
|
1,010,397
|
0.69
|
||||||
Exercised
|
(211,814 | ) |
0.31
|
|||||
Canceled
|
(481,916 | ) |
0.41
|
|||||
Outstanding
at December 31, 2006
|
2,116,667
|
0.43
|
||||||
Exercisable
at December 31, 2006
|
1,155,166
|
$ |
0.28
|
|||||
Exercise
Price
|
Number
Outstanding
|
Weighted
Average Remaining Contractual Life (In
Years)
|
Options
Exercisable
|
Weighted
Average Exercise Price
|
$
0.00-0.30
|
1,289,000
|
7.9
|
1,032,500
|
$
0.25
|
$
0.31-0.46
|
188,417
|
7.4
|
73,916
|
$
0.34
|
$
0.47-0.71
|
406,250
|
9.5
|
28,750
|
$
0.62
|
$
0.72-1.08
|
85,000
|
9.7
|
0
|
$
0.00
|
$
1.09-1.64
|
148,000
|
9.9
|
20,000
|
$
1.30
|
2,116,667
|
1,155,166
|
|||
|
·
|
cytogenetics
testing, which analyzes human
chromosomes;
|
|
·
|
Fluorescence
In-Situ Hybridization (FISH) testing, which analyzes abnormalities
at the
chromosomal and gene levels;
|
|
·
|
flow
cytometry testing, which analyzes gene expression of specific markers
inside cells and on cell surfaces;
and
|
|
·
|
molecular
testing which involves analysis of DNA and RNA to diagnose and
predict the
clinical significance of various genetic sequence
disorders.
|
|
·
|
clinical
lab testing,
|
|
·
|
anatomic
pathology testing, and
|
|
·
|
genetic
and molecular testing.
|
Attributes
|
Clinical
|
Anatomic
Pathology
|
Genetic/Molecular
|
Testing
Performed On
|
Blood,
Urine
|
Tissue/Cells
|
Chromosomes/Genes/DNA
|
Testing
Volume
|
High
|
Low
|
Low
|
Physician
Involvement
|
Low
|
High
- Pathologist
|
Low
Medium
|
Malpractice
Ins. Required
|
Low
|
High
|
Low
|
Other
Professionals Req.
|
None
|
None
|
Cyto/Molecular
geneticist
|
Level
of Automation
|
High
|
Low-Moderate
|
Moderate
|
Diagnostic
in Nature
|
Usually
Not
|
Yes
|
Yes
|
Types
of Diseases Tested
|
Many
Possible
|
Primarily
to Rule out Cancer
|
Rapidly
Growing
|
Typical
per Price/Test
|
$5
- $35/Test
|
$25
- $500/Test
|
$200
- $1,000/Test
|
Estimated
Size of Market
|
$25
- $30 Billion
|
$10
- $12 Billion
|
$4
- $5 Billion (2)
|
Estimated
Annual Growth Rate
|
4%
-5%
|
6%
- 7%
|
25+%
|
EstablishedCompetitors
|
Quest
Diagnostics
|
Quest
Diagnostics
|
Genzyme
Genetics
|
LabCorp
|
LabCorp
|
Quest
Diagnostics
|
|
Bio
Reference Labs
|
Genzyme
Genetics
|
LabCorp
|
|
DSI
Laboratories
|
Ameripath
|
Major
Universities
|
|
Hospital
Labs
|
Local
Pathologists
|
||
Regional
Labs
|
|||
(1)Derived
from industry analyst reports.
(2) Includes
flow cytometry testing,
which historically has been classified under anatomic
pathology.
|
FY
2006
|
FY
2005
|
%
Inc (Dec)
|
||||||||||
Customer
Requisitions Rec’d (Cases)
|
9,563
|
2,982
|
220.7 | % | ||||||||
Number
of Tests Performed
|
12,838
|
4,082
|
214.5 | % | ||||||||
Average
Number of Tests/Requisition
|
1.34
|
1.37
|
(2.1 | %) | ||||||||
Total
Testing Revenue
|
$ |
6,475,996
|
$ |
1,885,324
|
243.5 | % | ||||||
Average
Revenue/Requisition
|
$ |
677.19
|
$ |
632.23
|
7.1 | % | ||||||
Average
Revenue/Test
|
$ |
504.44
|
$ |
461.86
|
9.2 | % | ||||||
|