2016 Q3 Form 10-Q Financial Statement

#000114420417055799 Filed on November 02, 2017

View on sec.gov

Income Statement

Concept 2016 Q3
Revenue $0.00
YoY Change
Cost Of Revenue
YoY Change
Gross Profit
YoY Change
Gross Profit Margin
Selling, General & Admin $10.50M
YoY Change 291.79%
% of Gross Profit
Research & Development $8.481M
YoY Change 70.99%
% of Gross Profit
Depreciation & Amortization $150.0K
YoY Change -43.61%
% of Gross Profit
Operating Expenses $18.98M
YoY Change 148.32%
Operating Profit -$18.98M
YoY Change 148.32%
Interest Expense $220.0K
YoY Change 2100.0%
% of Operating Profit
Other Income/Expense, Net
YoY Change
Pretax Income -$18.76M
YoY Change 145.55%
Income Tax
% Of Pretax Income
Net Earnings -$68.21M
YoY Change 793.41%
Net Earnings / Revenue
Basic Earnings Per Share
Diluted Earnings Per Share -$317.4K
COMMON SHARES
Basic Shares Outstanding 58.44M shares
Diluted Shares Outstanding

Balance Sheet

Concept 2016 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $179.3M
YoY Change 62.85%
Cash & Equivalents $92.90M
Short-Term Investments $86.40M
Other Short-Term Assets $1.300M
YoY Change 550.0%
Inventory
Prepaid Expenses
Receivables
Other Receivables
Total Short-Term Assets $180.6M
YoY Change 63.56%
LONG-TERM ASSETS
Property, Plant & Equipment $1.769M
YoY Change -3.49%
Goodwill
YoY Change
Intangibles
YoY Change
Long-Term Investments
YoY Change
Other Assets
YoY Change
Total Long-Term Assets $1.769M
YoY Change -3.49%
TOTAL ASSETS
Total Short-Term Assets $180.6M
Total Long-Term Assets $1.769M
Total Assets $182.3M
YoY Change 62.47%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $228.0K
YoY Change -80.36%
Accrued Expenses $2.966M
YoY Change 84.45%
Deferred Revenue
YoY Change
Short-Term Debt $0.00
YoY Change
Long-Term Debt Due
YoY Change
Total Short-Term Liabilities $3.194M
YoY Change 11.87%
LONG-TERM LIABILITIES
Long-Term Debt $0.00
YoY Change
Other Long-Term Liabilities
YoY Change
Total Long-Term Liabilities $0.00
YoY Change
TOTAL LIABILITIES
Total Short-Term Liabilities $3.194M
Total Long-Term Liabilities $0.00
Total Liabilities $3.200M
YoY Change 10.34%
SHAREHOLDERS EQUITY
Retained Earnings
YoY Change
Common Stock $3.000K
YoY Change 50.0%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $179.1M
YoY Change
Total Liabilities & Shareholders Equity $182.3M
YoY Change 62.44%

Cashflow Statement

Concept 2016 Q3
OPERATING ACTIVITIES
Net Income -$68.21M
YoY Change 793.41%
Depreciation, Depletion And Amortization $150.0K
YoY Change -43.61%
Cash From Operating Activities -$12.21M
YoY Change 217.97%
INVESTING ACTIVITIES
Capital Expenditures -$720.0K
YoY Change 928.57%
Acquisitions
YoY Change
Other Investing Activities -$15.63M
YoY Change -176.54%
Cash From Investing Activities -$16.35M
YoY Change -180.34%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 500.0K
YoY Change -70.76%
NET CHANGE
Cash From Operating Activities -12.21M
Cash From Investing Activities -16.35M
Cash From Financing Activities 500.0K
Net Change In Cash -28.06M
YoY Change -254.01%
FREE CASH FLOW
Cash From Operating Activities -$12.21M
Capital Expenditures -$720.0K
Free Cash Flow -$11.49M
YoY Change 204.77%

Facts In Submission

Frame Concept Type Concept / XBRL Key Value Unit
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<div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;size: 8.5in 11.0in"> <div style="CLEAR:both;LINE-HEIGHT: normal; TEXT-INDENT: 0in; MARGIN: 0in; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <b><u><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt">NOTE 8. LEGAL PROCEEDINGS</font></u></b></div> <div style="CLEAR:both;LINE-HEIGHT: normal; TEXT-INDENT: -0.5in; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"><b><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></b></div> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"><u><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt">Class Action Lawsuits</font></u> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt">. On April 10, 2017, the SEC announced settlements with us and with other public companies and unrelated parties in the&#160;<i>In the Matter of Certain Stock Promotion</i> investigation. Our settlement with the SEC is consistent with our previous disclosures (including in our Form 10-K that we filed with the SEC on March 9, 2017). On April 14 2017, a purported shareholder filed a class action complaint in the United States District Court, Northern District of California for violations of the federal securities laws (<i>Leonard DeSilvio v. Lion Biotechnologies, Inc., et al., case no: 3:17cv2086</i> ) against our company and three of our former officers and directors. On April 19, 2017, a second class action complaint&#160; <i>(Amra Kuc vs. Lion Biotechnologies, Inc., et al., case no: 3:17cv2086</i>) was filed in the same court. Both complaints allege, among other things, that the defendants violated the federal securities laws by making materially false and misleading statements, or by failing to make certain disclosures, regarding the actions taken by Manish Singh, our former CEO, and our former investor relations firm that were the subject of the <i> In the Matter of Certain Stock Promotions</i> SEC investigation. On July 20, 2017 the plaintiff in the <i>Kuc</i> case filed a notice to voluntarily dismiss that case. The Court entered an order dismissing the <i>Kuc</i> complaint on July 21, 2017. On July 26, 2017, the court appointed a movant as lead plaintiff. On September 8, 2017, the lead plaintiff filed an amended complaint that alleges, among other things, that the defendants violated the federal securities laws by making materially false and misleading statements, or by failing to make certain disclosures, regarding the actions taken by Manish Singh and our former investor relations firm that were the subject of the <i>In the Matter of Certain Stock Promotions</i> SEC investigation. On October 6, 2017, the court entered an order setting a schedule for the case, which includes a briefing schedule for motions to dismiss and a hearing date of December 22, 2017.</font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt">We intend to vigorously defend against the foregoing complaints. Based on the very early stage of the litigation, it is not possible to estimate the amount or range of possible loss that might result from an adverse judgment or a settlement of these matters.</font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> <font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"></font> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"><font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt;FONT-FAMILY:times new roman,times,serif"><u> Solomon Capital, LLC.</u> On April 8, 2016, a lawsuit titled <i> Solomon Capital, LLC, Solomon Capital 401(K) Trust, Solomon Sharbat and Shelhav Raff v. Lion Biotechnologies, Inc.</i> was filed by Solomon Capital, LLC, Solomon Capital 401(k) Trust, Solomon Sharbat and Shelhav Raff against the Company in the Supreme Court of the State of New York, County of New York (index no. 651881/2016). The plaintiffs allege that, between June and November 2012 they provided to the Company $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">0.1</font> million and that they advanced and paid on our behalf an additional $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">0.2</font> million. The complaint further alleges that the Company agreed to (i) provide them with promissory notes totaling $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">0.2</font> million, plus interest, (ii) issue a total of <font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"> 111,425</font> shares to the plaintiffs (before the 1-for-100 reverse split of our common stock effected in September 2013), and (iii) allow the plaintiffs to convert the foregoing funds into our securities in the next transaction. The plaintiffs allege that they should have been able to convert their advances and payments into shares of the Company&#8217;s common stock in the restructuring that was effected in May 2013. Based on the foregoing, the plaintiffs allege causes for breach of contract and unjust enrichment and demand judgment against the Company in an unspecified amount exceeding $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">1.5</font> million, plus interest and attorneys&#8217; fees.</font></font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"><font style="FONT-FAMILY:times new roman,times,serif">&#160;</font></font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt">On June 3, 2016, the Company filed an answer and counterclaims in the lawsuit. In its counterclaims, the Company alleges that the plaintiffs misrepresented their qualifications to assist it in fundraising and that they failed to disclose that they were under investigation for securities laws violations. The Company is seeking damages in an amount exceeding $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">0.5</font> million and an order rescinding any and all agreements that the plaintiffs contend entitled them to obtain stock in the Company.</font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt">On April 19, 2017, the Court granted plaintiffs&#8217; counsel&#8217;s motion to withdraw from the case. On May 25, 2017, plaintiffs filed a notice that they had hired new counsel. On June 7, 2017, the judge presiding over the case recused herself because of a conflict of interest arising from her relationship with plaintiffs&#8217; new attorneys.&#160; The case has been assigned to a new judge, but the court has not yet scheduled a status conference or otherwise set a schedule for the case.</font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt">The Company intends to vigorously defend the complaint and pursue its counterclaims.</font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> </font>&#160;</div> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"><font style="FONT-SIZE: 10pt"><font style="FONT-FAMILY:times new roman,times,serif"><u>Litigation Involving Dr. Steven Fischkoff</u>.&#160; On June 13, 2017, in an action titled <i>Steven Fischkoff v. Lion Biotechnologies, Inc. and Maria Fardis</i>, Dr. Steven Fischkoff, our former Vice President and Chief Medical Officer, filed a lawsuit against the Company in the Supreme Court of the State of New York County of New York.&#160; Dr. Fischkoff was dismissed by the Company on March 28, 2017.&#160; Dr. Fischkoff was terminated &#8220;for cause&#8221; as that term is defined in his employment agreement. In his complaint, Dr. Fischkoff alleges breaches of his employment agreement and violation of New York Labor Law for failure to pay monies purportedly owed to him, and seeks to recover amounts including severance pay and retention bonus (totaling $<font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">300,000</font>), a prorated incentive bonus, and amounts relating to unvested options to <font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"> 150,000</font> shares of our common stock, together with prejudgment interest, costs, expenses and attorneys&#8217; fees. On July 5, 2017, the Company filed a removal petition and removed the lawsuit to the United States District Court for the Southern District of New York, where the case has been assigned case no. 17-cv-05041.&#160; On July 14, 2017, the Company filed a partial answer and counterclaims against Dr. Fischkoff, denying his allegations, and alleging breach of contract and related claims, breach of fiduciary duty, and state and federal trade secret misappropriation and related claims, and sought a temporary restraining order and preliminary injunction against Dr. Fischkoff.&#160; On July 18, 2017, the court issued a temporary restraining order against Dr. Fischkoff requiring him to return Company materials, prohibiting him from disclosing or using Company materials, and granting expedited discovery, which is currently proceeding.</font></font></div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">&#160;</div> <div style="CLEAR:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif" align="justify">We intend to vigorously defend against Dr. Fischkoff&#8217;s lawsuit and pursue the Company&#8217;s counterclaims.&#160; Based on the very early stage of the litigation, it is not possible to estimate the amount or range of (i) a possible loss that might result from an adverse judgment or settlement of this action, or (ii) the potential recovery that might result from a favorable judgment or a settlement of this action.</div> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> </font>&#160;</div> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"><font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"></font></font> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"><font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"><font style="FONT-SIZE: 10pt;FONT-FAMILY:times new roman,times,serif"><u> Other Matters.</u> During the second quarter of 2016, warrants representing <font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"> 128,500</font> shares were exercised. The <font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"> 128,500</font> shares of common stock had previously been registered for re-sale. However, we believe that these <font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"> 128,500</font> warrant shares were sold by the holders in open market transactions in May 2016 at a time when the registration statement was ineffective. Accordingly, those sales were not made in accordance with Sections 5 and 10(a)(3) of the Securities Act, and the purchasers of those shares may have rescission rights (if they still own the shares) or claims for damages (if they no longer own the shares). The amount of any such liability is uncertain and as such, an accrual for any potential loss has not been made. The Company believes that any claims brought against it would not result in a material impact to the Company&#8217;s financial position or results of operations. The Company has not accrued a loss for a potential claim associated with this matter as it is unable to estimate any at this time.</font></font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"><font style="FONT-SIZE: 10pt;FONT-FAMILY:times new roman,times,serif"> &#160;</font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt">The Company may be involved, from time to time, in legal proceedings and claims arising in the ordinary course of its business. Such matters are subject to many uncertainties and outcomes are not predictable with assurance. The Company accrues amounts, to the extent they can be reasonably estimated, that it believes are adequate to address any liabilities related to legal proceedings and other loss contingencies that the Company believes will result in a probable loss. While there can be no assurances as to the ultimate outcome of any legal proceeding or other loss contingency involving the Company, management does not believe any pending matter will be resolved in a manner that would have a material adverse effect on the Company&#8217;s financial position, results of operations or cash flows.</font></div> </div> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table>
iova Offering Costs Under Accounts Payable And Accrued Expenses
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0 USD
iova Offering Costs Under Accounts Payable And Accrued Expenses
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235000 USD
us-gaap Conversion Of Stock Amount Converted1
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0 USD
us-gaap Conversion Of Stock Amount Converted1
ConversionOfStockAmountConverted1
3000 USD
iova Deemed Dividend Related To Beneficial Conversion Feature
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49454000 USD
iova Deemed Dividend Related To Beneficial Conversion Feature
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0 USD
CY2017Q3 us-gaap Operating Leases Future Minimum Payments Due Current
OperatingLeasesFutureMinimumPaymentsDueCurrent
276000 USD
CY2017Q3 us-gaap Shares Issued Price Per Share
SharesIssuedPricePerShare
6.50
CY2017Q3 us-gaap Proceeds From Issuance Of Common Stock
ProceedsFromIssuanceOfCommonStock
53800000 USD
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1023000 USD
CY2017Q3 us-gaap Operating Leases Future Minimum Payments Due In Three Years
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700000 USD
CY2017Q3 us-gaap Operating Leases Future Minimum Payments Due In Four Years
OperatingLeasesFutureMinimumPaymentsDueInFourYears
495000 USD
CY2017Q3 us-gaap Operating Leases Future Minimum Payments Due In Five Years
OperatingLeasesFutureMinimumPaymentsDueInFiveYears
169000 USD
CY2017Q3 us-gaap Operating Leases Future Minimum Payments Due
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2663000 USD
CY2017Q3 us-gaap Stock Issued During Period Shares New Issues
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us-gaap Use Of Estimates
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<div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> </div> <font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"></font> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <strong><i><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"><font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt">Use of Estimates</font></font></i></strong></div> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt">The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include valuation of short-term investments, accounting for potential liabilities, the valuation allowance associated with the Company&#8217;s deferred tax assets, and the assumptions made in valuing stock instruments issued for services.</font></div> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table>
us-gaap Prior Period Reclassification Adjustment Description
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<div style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> </div> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <strong><i><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"><font style="FONT-FAMILY: 'Times New Roman','serif'; FONT-SIZE: 10pt"></font>Reclassifications</font></i></strong></div> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt"> <font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt"> &#160;</font></div> <div style="CLEAR:both;LINE-HEIGHT: normal; MARGIN: 0in 0in 0pt; FONT-FAMILY: Calibri,sans-serif; FONT-SIZE: 11pt" align="justify"><font style="FONT-FAMILY: 'Times New Roman',serif; FONT-SIZE: 10pt">Certain amounts within the statements of cash flows for the prior periods have been reclassified to conform with the current period presentation. These reclassifications had no impact on the Company's previously reported financial position or cash flows for any of the periods presented.</font></div> </div><table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table>

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