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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): February 11, 2011
Aastrom Biosciences, Inc.
(Exact name of registrant as specified in its charter)
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Michigan
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000-22025
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94-3096597 |
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(State or other jurisdiction
of incorporation)
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(Commission
File Number)
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(I.R.S. Employer
Identification No.) |
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24 Frank Lloyd Wright
Drive, P.O. Box 376, Ann
Arbor, Michigan
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48106 |
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(Address of principal executive offices)
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(Zip Code) |
Registrants telephone number, including area code: (734) 930-5555
Not Applicable
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 4.02(a) |
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Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or
Completed Interim Review. |
On February 11, 2011, in connection with responding to certain comments raised by the Staff of the
Securities and Exchange Commission (the SEC) in its periodic review of the Companys SEC filings,
the Company in consultation with its Audit Committee, concluded that its previously issued
financial statements for all periods included in the Companys annual report on Form 10-K for the
fiscal year ended June 30, 2010 and included in the Companys quarterly reports on Form 10-Q for
the quarters ended September 30, 2008 through September 30, 2010 (collectively, the Affected
Periods) should be restated because of a misapplication in the guidance around accounting for
Warrants (as defined below) and should no longer be relied upon. However, the non-cash adjustments
to the financial statements, in all of the Affected Periods, do not impact the amounts previously
reported for the Companys cash and cash equivalents, operating expenses or cash flows.
The warrants at issue (collectively, the Warrants) include:
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(i) |
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warrants to purchase an aggregate of 158,088 shares of the Companys common stock,
issued in July 2003 at an exercise price of $9.84 per share; |
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(ii) |
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warrants to purchase an aggregate of 300,000 shares of the Companys common stock,
issued in April 2004 at an exercise price of $13.20 per share; |
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(iii) |
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warrants to purchase an aggregate of 320,248 shares of the Companys common stock,
issued in October 2004 at an exercise price of $13.92 per share; |
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(iv) |
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warrants to purchase an aggregate of 740,131 shares of the Companys common stock,
issued in October 2007 at an exercise price of $12.72 per share; |
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(v) |
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Class A warrants to purchase an aggregate of 4,882,228 shares of the Companys common
stock, issued in January 2010 at an exercise price of $2.97 per share; and |
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(vi) |
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Class B warrants to purchase an aggregate of 3,254,818
shares of the Company's common stock, issued
in January 2010 at an exercise price of $2.08 per share. |
Historically, the Warrants were reflected as a component of equity as opposed to liabilities on the
balance sheets and the income statements did not include the subsequent non-cash changes in
estimated fair value of the Warrants in accordance with Accounting Standards Codification 815,
Derivatives and Hedging (ASC 815). The Warrants generally provide that, in the event the related
registration statement is not available for the issuance of the Warrant shares, the holder may
exercise the Warrant on a cashless basis (i.e., applying a portion of the Warrant shares to the
payment of the exercise price). In addition, certain of the Warrants provide the holder with
weighted-average anti-dilution price protection in the event we issue securities at a price per
share that is less than the exercise price of the Warrants.
However, under the guidance of ASC 815, warrant instruments that could potentially require net cash
settlement in the absence of express language precluding such settlement, and, additionally,
warrants that provide for anti-dilution price protection, should be initially classified as
derivative liabilities at their estimated fair values, regardless of the likelihood that such
instruments will ever be settled in cash. In periods subsequent to issuance, changes in the
estimated fair value of the derivative instruments should be reported in the statement of
operations. The Audit Committee, together with management, determined that the financial
statements in the Affected Periods should be restated to reflect the Warrants as liabilities, with
subsequent changes in their estimated fair value recorded as non-cash income or expense in each
Affected Period.
The Company currently anticipates filing an amended Annual Report on Form 10-K/A for the fiscal
year ended June 30, 2010 and amended Quarterly Reports on Form 10-Q/A for the fiscal quarters ended
September 30, 2009, December 31, 2009, March 31, 2010 and September 30, 2010, each with restated
financial statements reflecting reclassification of the Warrants identified above within the next
two weeks but is presently targeting such a filing on or before February 18, 2011.
The Company has determined that the above-mentioned restatements of its financial statements
resulted from a material weakness in its internal control over financial reporting, specifically
related to its process and procedures related to the accounting for stock purchase warrants. The
Company has assessed and implemented its remediation plan to address the material weakness.
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The Companys Audit Committee and management have discussed the matters in this Current Report on
Form 8-K with its independent registered public accounting firm, PricewaterhouseCoopers LLP.
The Company also, under the supervision of its Audit Committee, inquired into the circumstances
relating to the above-referenced accounting treatments to assure that there are no other financial
reporting or disclosure control items that may be of concern. The results of this inquiry indicate
that, apart from the adjustments discussed in this Form 8-K, no other adjustments to the Companys
financial statements appear necessary.
On February 14, 2011, the Company issued a press release announcing the foregoing events. The
reader is advised to read this press release in its entirety. A copy of the press release is
attached hereto as Exhibit 99.1 and incorporated by reference herein.
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Item 9.01 |
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Financial Statements and Exhibits. |
Cautionary Note Regarding Forward-looking Statements:
To the extent that statements in this Current Report on Form 8-K are not strictly historical,
including statements as to plans, intentions, goals, future financial conditions and adjustments to
the financial statements, the filing of amended SEC filings, remediation plans, or otherwise as to
future events, such statements are forward-looking, and are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements
contained in this Current Report on Form 8-K are subject to certain risks and uncertainties that
could cause actual results to differ materially from the statements made. Such risks and others are
further described in the Companys filings with the SEC including the most recent reports on Forms
10-K, 10-Q and 8-K, and any amendments thereto.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Aastrom Biosciences, Inc.
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Date: February 14, 2011 |
By: |
/s/ Timothy Mayleben
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Name: |
Timothy Mayleben |
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Title: |
Chief Executive Officer and President |
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exv99w1
Exhibit 99.1
Aastrom Biosciences Dominos Farms, Lobby K 24 Frank Lloyd Wright Drive Ann Arbor, MI 48105 T 734 9305555 F 734 6650485 www.aastrom.com |
Aastrom Announces Restatement of Historical Financial
Results to Reflect Reclassification of Warrants
Accounting for Warrants Will Have No Impact on Companys Current or
Previously Reported Cash Position or Operating Expenses
ANN ARBOR, Mich., February 14, 2011 (GLOBE NEWSWIRE) Aastrom Biosciences, Inc. (Nasdaq: ASTM)
announced today that the company will be restating its financial statements for all periods
included in an amended annual report on Form 10-K/A for the fiscal period ended June 30, 2010, as
well as amended Form 10-Q/As for the quarters ended September 30, 2009, December 31, 2009, March
31, 2010 and September 30, 2010 as a result of comments received from the Securities and Exchange
Commission following a review of the companys annual report on Form 10-K for the fiscal year ended
June 30, 2010. The restatements will correct for a misapplication of the accounting for warrants to
purchase shares of the companys common stock that were issued in connection with prior equity
offerings. These warrants will now be reclassified as liabilities, with changes in the fair value
of the warrants recorded as non-cash income or expense in each reporting period.
All the restatements involve non-cash, non-operating expenses and will have no impact on the
companys current or previously stated cash position, operating expenses or cash flows. Aastrom
anticipates filing the amended annual and quarterly reports within the next two weeks, but is
presently targeting such a filing on or before February 18, 2011 with restated financial statements
reflecting the treatments of the warrants described above. A current report on Form 8-K that
further describes the foregoing restatement of the companys financial statements has been filed by
Aastrom today and is available at www.sec.gov.
About Aastrom Biosciences
Aastrom Biosciences is developing expanded autologous cellular therapies for use in the treatment
of severe, chronic cardiovascular diseases. The companys proprietary cell-processing technology
enables the manufacture of mixed-cell therapies expanded from a patients own bone marrow and
delivered directly to damaged tissues. Aastrom has advanced its cell therapies into late-stage
clinical development, including a planned Phase 3 clinical program for the treatment of patients
with critical limb ischemia and two ongoing
more
Phase 2 clinical trials in patients with dilated cardiomyopathy. For more information, please visit
Aastroms website at www.aastrom.com.
Media and investor contact
Stephen Zoegall
Berry & Company
212 2538881
ir@aastrom.com
szoegall@berrypr.com
This document contains forward-looking statements, including without limitation, statements concerning clinical trial plans and progress, objectives and expectations, clinical activity
timing, intended product development, the performance and contribution of certain individuals and
expected timing of collecting and analyzing treatment data, all of which involve certain risks and
uncertainties. These statements are often, but are not always, made through the use of words or
phrases such as anticipates, intends, estimates, plans, expects, we believe, we
intend, and similar words or phrases, or future or conditional verbs such as will, would,
should, potential, could, may, or similar expressions. Actual results may differ
significantly from the expectations contained in the forward-looking statements. Among the factors
that may result in differences are the inherent uncertainties associated with clinical trial and
product development activities, regulatory approval requirements, competitive developments, and the
availability of resources and the allocation of resources among different potential uses. These and
other significant factors are discussed in greater detail in Aastroms Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission. These
forward looking statements reflect managements current views and Aastrom does not undertake to
update any of these forward-looking statements to reflect a change in its views or events or
circumstances that occur after the date of this release except as required by law.