UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q/A
(Mark One)
[X] QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the
quarterly period ended
April 30, 2012
or
[ ]
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the
transition period from ___to ___
Commission
File Number:
0-11485
ACCELR8
TECHNOLOGY CORPORATION
(Exact
name of registrant as specified in its charter)
|
|
COLORADO
|
84-1072256
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
|
|
7000
N Broadway, Bldg. 3-307, Denver, CO 80221
(Address
of principal executive offices) (Zip Code)
(303)
863-8088
(Registrant’s
telephone number, including area code)
_________________
(Former
name, former address and former fiscal year, if changed since last report)
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes
X
No [ ]
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company.
|
|
Large
accelerated filer [ ]
|
Accelerated
filer [ ]
|
Non-accelerated
filer [ ]
|
Smaller
reporting company [X
]
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No
X
As of April
30, 2012 there were 11,103,367 shares of common stock outstanding.
EXPLANATORY
NOTE
We are
amending this Form 10-Q for the quarter ended April 30, 2012, as originally filed on June 13, 2012 to include a
Material Agreement that was omitted from the original filing and to correct a heading included in the Form 10-Q. Except
for these amendments, no other changes were made to the Form 10-Q as previously filed.
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Accelr8 Technology Corporation
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1
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INDEX
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Page
|
PART
1.
|
FINANCIAL
INFORMATION
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Item
1.
|
Financial
Statements
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|
|
Condensed
Balance Sheets April 30, 2012 (unaudited) and July 31, 2011
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3
|
|
Condensed
Statements of Operations for the three and nine months ended April 30, 2012 and 2011 (unaudited)
|
4
|
|
Condensed
Statements of Cash Flows for the nine months ended April 30, 2012 and 2011 (unaudited)
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5
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|
Notes
to Unaudited Condensed Financial Statements
|
6-13
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Item
2.
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Management’s
Discussion and Analysis of Financial Condition and Results of Operations
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14
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Item
3.
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Quantitative
and Qualitative Disclosures About Market Risk
|
22
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Item
4.
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Controls
and Procedures
|
23
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Part
II.
|
OTHER
INFORMATION
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|
Item
1.
|
Legal
Proceedings
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23
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Item
1A.
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Risk
Factors
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23
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Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
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23
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Item
3.
|
Defaults
Upon Senior Securities
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23
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Item
4.
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Mine Safety Disclosures
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24
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Item
5.
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Other
Information
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24
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Item
6.
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Exhibits
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24
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SIGNATURES
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|
25-30
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CERTIFICATION
OF OFFICERS
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Accelr8 Technology Corporation
|
2
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|
PART
I. FINANCIAL INFORMATION
Item
1. Financial Statements
Accelr8 Technology Corporation
|
Condensed Balance Sheets
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ASSETS
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April 30, 2012 (Unaudited)
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July 31, 2011
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|
Current assets:
|
|
|
|
|
|
|
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Cash and cash equivalents
|
|
$
|
212,995
|
|
|
$
|
775,856
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|
Trade Accounts receivable
|
|
|
600,000
|
|
|
|
596,128
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|
Inventory
|
|
|
30,278
|
|
|
|
30,278
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|
Prepaid expenses and other current assets
|
|
|
24,781
|
|
|
|
20,577
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|
Total current assets
|
|
|
868,054
|
|
|
|
1,422,839
|
|
Long Term Accounts Receivable, Net of current portion
|
|
|
743,396
|
|
|
|
745,440
|
|
Property and equipment, net
|
|
|
1,982
|
|
|
|
3,528
|
|
|
|
|
|
|
|
|
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|
Investments, net
|
|
|
1,414,259
|
|
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|
1,304,522
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|
|
|
|
|
|
|
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Intellectual property, net (Note 3)
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|
2,651,360
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|
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2,788,009
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|
|
|
|
|
|
|
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Total assets
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|
$
|
5,679,051
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|
|
$
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6,264,338
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|
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LIABILITIES AND SHAREHOLDERS’ EQUITY
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|
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Current liabilities:
|
|
|
|
|
|
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|
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Accounts payable
|
|
$
|
49,981
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|
|
$
|
34,961
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|
Accrued compensation and other liabilities
|
|
|
43,854
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|
|
|
24,582
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|
Deferred revenue
|
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|
93,454
|
|
|
|
9,797
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|
Total current liabilities
|
|
|
187,289
|
|
|
|
69,340
|
|
|
|
|
|
|
|
|
|
|
Long-term liabilities:
|
|
|
|
|
|
|
|
|
Deferred compensation
|
|
|
1,470,508
|
|
|
|
1,379,522
|
|
Total liabilities
|
|
|
1,657,797
|
|
|
|
1,448,862
|
|
|
|
|
|
|
|
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Commitments and Contingencies
|
|
|
|
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|
|
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|
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|
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Shareholders’ equity
|
|
|
|
|
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Common Stock, no par value; 19,000,000 shares authorized; 11,103,367 (2012) and 11,103,367 (2011) shares issued and outstanding
|
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14,333,258
|
|
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14,333,258
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Contributed capital
|
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|
1,594,478
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|
|
|
1,246,864
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Accumulated (deficit)
|
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(11,632,892
|
)
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(10,491,046
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)
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Shares held for employee benefit (1,129,110 shares at cost)
|
|
|
(273,600
|
)
|
|
|
(273,600
|
)
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Total shareholders’ equity
|
|
|
4,021,254
|
|
|
|
4,815,476
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders’ equity
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|
$
|
5,679,051
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|
|
$
|
6,264,338
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|
See
Accompanying Notes to Financial Statements
|
|
|
Accelr8 Technology Corporation
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3
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Accelr8 Technology Corporation
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Condensed Statements of Operations
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For the Three and Nine Months ended April 30, 2012 and 2011
|
(Unaudited)
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|
|
3 Months Ended April 30
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|
9 Months Ended April 30
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|
|
2012
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|
2011
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|
2012
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|
2011
|
Revenues:
|
|
|
|
|
|
|
|
|
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|
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OptiChem® revenues
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$
|
13,207
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|
|
$
|
25,772
|
|
|
$
|
33,543
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|
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$
|
40,813
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|
Technical development fees
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|
0
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|
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|
214,500
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|
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|
140,000
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|
|
|
734,908
|
|
Qualified Therapeutic Discovery Grant
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0
|
|
|
|
0
|
|
|
|
0
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|
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|
244,479
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|
License Fee
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|
|
0
|
|
|
|
0
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|
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50,000
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|
|
|
0
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|
Total Revenues
|
|
|
13,207
|
|
|
|
240,272
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223,543
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|
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1,020,200
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|
|
|
|
|
|
|
|
|
|
|
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Costs and expenses:
|
|
|
|
|
|
|
|
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|
|
|
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|
|
|
|
Research and development
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109,860
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|
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|
126,918
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|
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302,900
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|
|
|
345,602
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|
General and administrative
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248,207
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181,881
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|
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905,453
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|
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|
606,693
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Amortization
|
|
|
64,497
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|
|
|
63,463
|
|
|
|
192,845
|
|
|
|
189,860
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Marketing and sales
|
|
|
344
|
|
|
|
1,246
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|
|
|
4,560
|
|
|
|
7,739
|
|
Depreciation
|
|
|
516
|
|
|
|
599
|
|
|
|
1,546
|
|
|
|
1,797
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|
Total costs and expenses
|
|
|
423,424
|
|
|
|
374,107
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|
|
|
1,407,304
|
|
|
|
1,151,691
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) from operations
|
|
|
(410,217
|
)
|
|
|
(133,835
|
)
|
|
|
(1,183,761
|
)
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|
|
(131,491
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)
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|
|
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|
|
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|
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|
|
|
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Other income:
|
|
|
|
|
|
|
|
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|
|
|
|
|
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Interest and dividend income
|
|
|
4,061
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|
|
|
4,077
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|
|
|
11,898
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|
|
|
11,481
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|
Unrealized gain on investments
|
|
|
17,773
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|
|
|
5,764
|
|
|
|
29,017
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|
|
|
36,907
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|
Gain on the sale of assets
|
|
|
0
|
|
|
|
0
|
|
|
|
1,000
|
|
|
|
0
|
|
Total other income
|
|
|
21,834
|
|
|
|
9,841
|
|
|
|
41,915
|
|
|
|
48,388
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Loss)
|
|
$
|
(388,383
|
)
|
|
$
|
(123,994
|
)
|
|
$
|
(1,141,846
|
)
|
|
$
|
(83,103
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net
loss per share
|
|
$
|
(.03
|
)
|
|
$
|
(.01
|
)
|
|
$
|
(.10
|
)
|
|
$
|
(.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding
|
|
|
11,103,367
|
|
|
|
10,704,785
|
|
|
|
11,103,367
|
|
|
|
10,704,785
|
|
See
Accompanying Notes to Financial Statements
|
|
|
Accelr8 Technology Corporation
|
4
|
|
Accelr8 Technology Corporation
|
Condensed Statements of Cash Flows
|
For the Nine Months Ended April 30, 2012 and 2011
|
(Unaudited)
|
|
|
|
|
2012
|
|
|
|
2011
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
Net Income (loss)
|
|
$
|
(1,141,846
|
)
|
|
$
|
(83,103
|
)
|
Adjustments to reconcile net (loss) to net cash (used in) operating activities:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
1,546
|
|
|
|
1,797
|
|
Amortization
|
|
|
192,845
|
|
|
|
189,860
|
|
Fair value of stock options granted for services
|
|
|
347,614
|
|
|
|
18,677
|
|
Unrealized holding (gain) loss on investments
|
|
|
(29,017
|
)
|
|
|
(36,907
|
)
|
Reinvested earnings – interest and dividends
|
|
|
(5,719
|
)
|
|
|
(4,383
|
)
|
(Increase) decrease in assets:
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(1,828
|
)
|
|
|
(18,642
|
)
|
Inventory
|
|
|
0
|
|
|
|
2,072
|
|
Prepaid expense and other
|
|
|
(4,204
|
)
|
|
|
(12,770
|
)
|
Increase (decrease) in liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
15,030
|
|
|
|
62,651
|
|
Accrued liabilities
|
|
|
19,271
|
|
|
|
14,489
|
|
Deferred revenue
|
|
|
83,657
|
|
|
|
(20,225
|
)
|
Deferred compensation
|
|
|
90,986
|
|
|
|
97,540
|
|
Net cash provided (used in) operating activities
|
|
|
(431,665
|
)
|
|
|
211,056
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Sale of common stock
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
Purchases of equipment and patents
|
|
|
(56,196
|
)
|
|
|
(47,068
|
)
|
Contribution to deferred compensation trust
|
|
|
(75,000
|
)
|
|
|
(75,000
|
)
|
Net cash used in investing activities
|
|
|
(131,196
|
)
|
|
|
(122,068
|
)
|
|
|
|
|
|
|
|
|
|
Increase (Decrease) in cash and cash equivalents
|
|
|
(562,861
|
)
|
|
|
88,988
|
|
|
|
|
|
|
|
|
|
|
Beginning balance
|
|
|
775,856
|
|
|
|
283,273
|
|
|
|
|
|
|
|
|
|
|
Ending balance
|
|
$
|
212,995
|
|
|
$
|
372,261
|
|
See Accompanying
Notes to Financial Statements
|
|
|
Accelr8 Technology Corporation
|
5
|
|
ACCELR8
TECHNOLOGY CORPORATION
NOTES
TO FINANCIAL STATEMENTS
Note
1. Basis of Presentation
The
financial statements included herein have been prepared by Accelr8 Technology Corporation (the "Company") without audit,
pursuant to the rules and regulations of the United States Securities and Exchange Commission ("SEC"). Certain information
and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted as allowed by such rules and regulations. The Company believes that the disclosures
are adequate to make the information presented not misleading. These financial statements should be read in conjunction with our
annual audited financial statements dated July 31, 2011, included in our annual report on Form 10-K as filed with the SEC on October
27, 2011.
Management
believes that the accompanying unaudited financial statements are prepared in conformity with generally accepted accounting principles,
which require the use of management estimates, and contain all adjustments (including normal recurring adjustments) necessary
to present fairly the operations and cash flows for the periods presented. The results of operations for the three months and
nine months ended April 30, 2012 may not be indicative of the results of operations for the year ended July 31, 2012.
Note
2. Summary of Significant Accounting Policies
Use of
Estimates
The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Concentration
of Credit Risk
Financial
instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash equivalents, accounts
receivable, and notes receivable, including receivables from major customers. The Company places its cash equivalents with a high
credit quality financial institution. The Company periodically maintains cash balances at a commercial bank in the excess of the
Federal Deposit Insurance Corporation insurance limit of $250,000. At April 30, 2012 and 2011, the Company’s uninsured cash
balance was $0. The Company grants credit to domestic and international clients in various industries. Exposure to losses on accounts
receivable is principally dependent on each client's financial position. The Company performs ongoing credit evaluations of its
clients' financial condition.
|
|
|
Accelr8 Technology Corporation
|
6
|
|
Estimated
Fair Value of Financial Instruments
The
carrying amount of cash and cash equivalents, investments and other long-term liabilities approximates fair value at April 30,
2012 and July 31, 2011. The carrying value of all other financial instruments potentially subject to valuation risk, principally
consisting of accounts receivable and accounts payable, also approximates fair value.
Income Taxes
The
Company has no unrecognized tax benefits. Should the Company determine that any penalty and interest be accrued as a result of
current or future tax positions taken on its returns, such penalties and interest will be accrued in its financial statements
as other non-interest expense and as interest expense during the period in which such determination is made. The Company files
federal and state income tax returns. These returns are subject to examination by taxing authorities for all tax years after 2007.
Note
3. Recently Issued Accounting Pronouncements
In
May 2011, the FASB issued Accounting Standards Update No. 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve
Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs”. The amendments result in common fair
value measurement and disclosure requirements in U.S. generally accepted accounting principles (GAAP) and International Financial
Reporting Standards (IFRSs), and do not require additional fair value measurements and are not intended to establish valuation
standards or affect valuation practices. The amendments in this update are effective during interim and annual periods beginning
after December 15, 2011. Adoption of the new requirement in the current quarter did not have an effect on the Company’s
financial position, results of operations or cash flow.
In
June 2011, the FASB issued Accounting Standards Update No. 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive
Income”. In this update, FASB eliminated the option to present components of other comprehensive income as part of the statement
of changes in stockholders’ equity. The amendments require that all non-owner changes in equity be presented either in a
single continuous statement of comprehensive income or in two separate but consecutive statements. The amendments in this update
are effective for fiscal years, and interim periods within these years, beginning after December 15, 2011. Adoption of the new
requirement is not expected to have an effect on the Company’s financial position, results of operations or cash flow.
In
September 2011, the FASB issued ASU No. 2011-08, Intangibles – Goodwill and Other (Topic 350). ASU No. 2011-08 redefines
the approach to goodwill impairment testing by providing companies with the option to qualitatively evaluate the likelihood of
impairment before proceeding to Step 1 of the impairment test (i.e. comparison of the fair value of a reporting unit to its carrying
value). The amendment also provides more guidance on the types of events and circumstances that an entity should consider between
annual impairment tests in determining whether it is more likely than not that the fair value of a reporting unit is less than
its carrying amount. The amendments are effective for annual and interim goodwill impairment tests performed for fiscal years
beginning December 15, 2011. Early adoption is permitted, including for annual and interim goodwill impairment tests performed
as of a date before September 15, 2011, if an entity’s financial statements for the most recent annual or interim period
have not yet been issued, or for nonpublic entities, that have not been made available for issuance. Adoption of the new requirement
is not expected to have an effect on the Company’s financial position, results of operations, cash flow and the annual goodwill
impairment test.
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Accelr8 Technology Corporation
|
7
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|
Note
4. Intellectual Property
Intellectual
property consisted of the following:
|
|
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|
April 30, 2012
|
|
|
|
July 31, 2011
|
|
|
|
|
|
|
|
|
|
|
OptiChem® Technologies
|
|
$
|
4,454,538
|
|
|
$
|
4,454,538
|
|
Patents
|
|
|
660,988
|
|
|
|
604,792
|
|
Trademarks
|
|
|
49,018
|
|
|
|
49,018
|
|
Total intellectual property
|
|
|
5,164,544
|
|
|
|
5,108,348
|
|
Accumulated amortization
|
|
|
(2,513,184
|
)
|
|
|
(2,320,339
|
)
|
Net intellectual property
|
|
$
|
2,651,360
|
|
|
$
|
2,788,009
|
|
Intellectual
properties are recorded at cost and are being amortized on a straight-line basis over their estimated useful lives of 20 years,
which approximates the patent and patent application life of the OptiChem(R) technologies. Amortization expense was $192,845 and
$189,860, respectively, for the nine months ended April 30, 2012 and 2011.
The
Company routinely evaluates the recoverability of its long-lived assets based upon estimated future cash flows from or estimated
fair value of such long-lived assets. If in management's judgment, the anticipated undiscounted cash flows or estimated fair value
are insufficient to recover the carrying amount of the long-lived asset, the Company will determine the amount of the impairment,
and the value of the asset will be written down. Management believes that the fair value of the technology exceeds the carrying
value. However, it is possible that future impairment testing may result in intangible asset write-offs, which could adversely
affect the Company's financial condition and results of operations.
Note
5. Research and Option Agreement and License and Supply Agreements
The
Company originally signed a licensing agreement for microarraying slides using OptiChem® coatings with Schott Jenear Glas
GmbH (“SCHOTT”) on November 4, 2004. Since this time, SCHOTT and the Company have extended this license. On August
15, 2011 Schott Technical Glass Solutions GmbH (Jena, Germany) renewed and expanded its licenses for OptiChem® microarray
slide products, designated as Schott Nexterion Slide H and Slide HS. The terms remain substantially the same as in previous agreements,
with the expansion to include microarray slide products intended for use in medical diagnostic devices. Previous agreements excluded
medical applications. This expansion makes SCHOTT the second company that intends to use OptiChem® coatings on medical devices
with the other company being Nanosphere.
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Accelr8 Technology Corporation
|
8
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|
The
new agreement extends the non-exclusive license through November 24, 2014. SCHOTT paid the Company $150,000, with $50,000 being
a one time license fee and $100,000 being nonrefundable prepaid royalties. Royalties consist of 5% of SCHOTT’S net product
sales. For medical applications, SCHOTT agrees to refer individual customers directly to Accelr8 for licensing if annual purchases
by a customer exceed 20,000 units.
On
October 5, 2007, the Company additionally entered into an exclusive seven year license with NanoString Technologies, Inc. (“NanoString”).
The license grants NanoString the right to apply OptiChem® coatings to NanoString’s proprietary molecular detection
products.
On
June 14, 2010, the Company entered into an Evaluation Agreement and Letter of Intent with Novartis Vaccines and Diagnostics, Inc.
(“Novartis”) for a technical evaluation project with the Company’s BACcel™ rapid diagnostic technology.
Under the agreements with Novartis, Accelr8 received technical development fees of $ 842,408 during the fiscal year ended July
31, 2011 and $140,000 in the quarter ended October 31, 2011. The evaluation agreement with Novartis expired on September 30, 2011
without Novartis exercising its option for licensing the Company’s BACcel™ system intellectual property. During the
nine months ended April 30, 2012 and 2011, total revenues from Novartis were $140,000 and $734,908 respectively.
On
July 9, 2010, the Company entered into a non-exclusive patent-life OptiChem® license with Nanosphere, Inc. The license grants
to Nanosphere the right to apply OptiChem® coatings to Nanosphere’s proprietary analytical products. The products may
include FDA-regulated diagnostics devices, unlike other current licensees. Pursuant to the license agreement, Nanosphere paid
the Company a nonrefundable first-year fee of $150,000 plus a $15,000 technology transfer fee. On each anniversary of the agreement
date, Nanosphere will pay to the Company the amounts of $350,000 in 2011, $600,000 in 2012, and $750,000 in 2013 in order to complete
the payments for rights under the remaining patent life. Pursuant to the Company’s revenue recognition policy and generally
accepted accounting policies, all of the amounts due from Nanosphere have been recognized as OptiChem® revenue during the
fiscal year ended July 31, 2010. During the fiscal years ended July 31, 2011 and 2010, total revenues from Nanosphere were $0
and $1,842,596, respectively or 0% and 82.05% of total revenues.
Note
6. Employee Stock Based Compensation
On
April 30, 2012, there were Common Stock options outstanding at prices ranging from $0.73 to $4.50 with expiration dates between
May 6, 2011 and April 19, 2022. For the nine months ended April 30, 2012 and 2011, stock options exercisable into 985,000 and
1,010,000 shares of Common Stock, respectively, were not included in the computation of diluted earnings per share because their
effect was antidilutive.
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Accelr8 Technology Corporation
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9
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For
the nine month periods ended April 30, 2012 and 2011, the Company accounted for stock based compensation to employees and directors
under the modified prospective application method. Using this method we apply the standard to new awards, and to awards modified,
repurchased, or cancelled. Additionally, compensation costs for the unvested portion of awards are recognized as compensation
expense as the requisite service is rendered.
The
fair value of options granted under the stock option agreements and stock-based compensation plans discussed above is estimated
on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions used for grants
for the nine months ended April 30, 2012 and 2011: no dividend yield; risk free interest rate of 2.37% to 5%; expected life of
3-10 years; and expected volatility of 44% to 134%. The weighted average remaining contractual life of options outstanding at
April 30, 2012 and 2011 was 2.67 and 4.40 years, respectively.
As
of April 30, 2012, and 2011, the total unrecognized share-based compensation cost related to unvested stock options was $0. For
the nine month period ended April 30, 2012 and 2011, the Company recognized $59,256 and $347,614, respectively in stock based
compensation costs related to the issuance to employees and directors.
Note
7. Securities Purchase Agreement.
On
April 20, 2012, the Company entered into a Securities Purchase Agreement with Abeja Ventures, LLC (“Investor”) pursuant
to which the Company agreed to sell and issue to Investor (1) 14,000,000 shares of the Company’s common stock at a purchase
price of $1.03 per share for an aggregate purchase price of $14,420,000 (the “Purchase Price”); (2) a warrant to purchase
7,000,000 shares of the Company’s common stock at an exercise price of $1.03 per share; and (3) another warrant to purchase
7,000,000 shares of the Company’s common stock at an exercise price of $2.00 per share, with each warrant exercisable prior
to the fifth anniversary of the closing of the transactions contemplated by the Securities Purchase Agreement (collectively, the
“Investment”).
Under
the terms of the Securities Purchase Agreement, the shares of the Company’s common stock, and the warrants to purchase additional
shares of the Company’s common stock, to be issued and purchased in the Investment, and the shares of the Company’s
common stock issuable upon exercise of the warrants (collectively, the “Securities”), will be issued in a transaction
not involving any public offering and will not be registered under the Securities Act of 1933, as amended (the “Securities
Act”).
In
connection with the closing of the Investment, the Company will enter into a Registration Rights Agreement with Investor pursuant
to which the Investor and certain other parties will be granted certain demand and piggy-back registration rights, including for
shelf registrations, with respect to the resale of the securities to be issued in connection with the Investment (the “Securities”).
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Accelr8 Technology Corporation
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10
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The
closing of the Investment is subject to certain conditions, including the Company’s receipt of all required approvals from
the Company’s stockholders, the NYSE Amex Stock Market and other third parties. In particular, the closing is conditioned
upon the Company’s receipt of the requisite stockholder approval to increase the number of authorized shares of the Company’s
common stock to cover the Securities (the “Charter Amendment”). Under Section 7-110-103 of the Colorado Business Corporation
Act, the Charter Amendment is required to be approved by holders of at least a majority of the shares present in person or by
proxy at a meeting of the stockholders at which a quorum is present. In addition, under Section 713 of the NYSE Amex Company Guide,
the issuance of the Securities must be approved by holders of at least a majority of the shares present in person or by proxy
at a meeting of the stockholders at which a quorum is present.
Under
the terms of the Securities Purchase Agreement, the Company is required to promptly file with the Securities and Exchange Commission
(the “SEC”) and mail to its stockholders of record a Definitive Proxy Statement on Schedule 14A relating to a special
meeting of the Company’s stockholders (the “Special Meeting”), which is scheduled to be held on June 26, 2012
for the purpose of, among other things, approving the Investment and the Charter Amendment as well as certain related matters
to be set forth and described in detail in such Definitive Proxy Statement on Schedule 14A.
Certain
stockholders of the Company, holding approximately 32% of the Company’s issued and outstanding shares of common stock, have
entered into Voting Agreements with Investor pursuant to which they have agreed to vote their shares in favor of the Securities
Purchase Agreement, the Investment and the transactions contemplated thereby and certain related matters.
Pursuant
to the Securities Purchase Agreement, the Company is required to pay the Investor a break-up fee equal to two percent of the equity
value of the Company if (i) the Investor terminates the Securities Purchase Agreement because the Board (a) changes its recommendation
to the shareholders to approve the transactions contemplated by the Securities Purchase Agreement (the “Company Board Recommendation”),
(b) refuses to confirm the Company Board Recommendation when a takeover proposal from a person other than the Investor is announced,
or (c) does not oppose a takeover proposal from a person other than the Investor, or (ii) the Company terminates the Securities
Purchase Agreement because, prior to the Company’s stockholders approving the Securities Purchase Agreement, the Board authorizes
the Company to enter into a alternative transaction that is superior to the Securities Purchase Agreement.
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Accelr8 Technology Corporation
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11
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Additionally,
pursuant to the Securities Purchase Agreement, the Company is required to pay the Investor a break-up fee equal to two percent
of the equity value of the Company if (i) the Investor terminates the Securities Purchase Agreement because the Company breaches
any representation, warrant or covenant and the stockholders did not approve the Securities Purchase Agreement at the Stockholders
Meeting or (ii) the Company or Investor terminates the Securities Purchase Agreement (A) because the Securities Purchase Agreement
did not close by July 2, 2012, as may be extended pursuant to the terms of the Securities Purchase Agreement, and the Company’s
stockholders did not approve the Securities Purchase Agreement or (B) because the Company’s stockholders did not approve
the Securities Purchase Agreement at the Special Meeting, provided that prior to such terminations described in clauses (i) and
(ii) of this paragraph, a takeover proposal from a person other than the Investor has been publicly disclosed or communicated
to the Company or Board and not withdrawn and within 12 months following the termination of the Securities Purchase Agreement
the Company enters into a definitive agreement with respect to such takeover proposal.
The
payment of the foregoing break-up fees is subject to certain exceptions set forth in the Securities Purchase Agreement.
In
addition to the termination rights described above, the Securities Purchase Agreement provides for certain other termination rights
in favor of the Company and Investor.
In
connection with the Securities Purchase Agreement, the current members of the Board, other than Thomas Geimer, intend to resign
and the Board proposes to appoint Jack Schuler, John Patience, and Lawrence Mehren, to the Board, effective as of the closing
of the Investment. Also in connection with the Securities Purchase Agreement, the officers of the Company will resign, including
Thomas Geimer and Lawrence Mehren will be appointed Chief Executive Officer, effective as of the closing of the Investment.
The foregoing
description of the Securities Purchase Agreement is a summary and is qualified in its entirety by the terms of the Securities
Purchase Agreement, attached hereto as Exhibit 10.1
Note
8. Subsequent Event.
On May 15, 2012, the Company and Denver Health received notice that the Defense Medical Research and Development Program
(DMRDP) recommended $2 million funding of a proposed 35-month project submitted jointly by Denver Health and Accelr8. The
DMRDP solicited proposals to “advance state-of-the-art solutions for world-class medical care.”
The
joint proposal became the sole recipient under the Military Infectious Diseases Applied Research Award (MID-ARA) program for rapid
detection of serious antibiotic-resistant infections.
The
project will apply the Company’s BACcel™ same-shift rapid diagnostic system to wound infections and other serious
infections secondary to trauma. The intended scope encompasses the full range from battlefield injuries at Level III field hospitals
through post-rehabilitation care, and medical care for veterans and their dependents. The MID-ARA program’s purpose is “…
to accelerate the transition of medical technologies into deployed products; and to accelerate the translation of advances in
knowledge into new standards of care in multiple military-relevant areas.”
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Accelr8 Technology Corporation
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12
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Item
2. Management's Discussion and Analysis of Financial Condition and Result of Operations
Forward
Looking Information
This
Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the Company, intends that such forward-looking statements be subject to the safe harbors created
thereby. These forward-looking statements, which can be identified by the use of words such as "may," "will,"
"expect," "anticipate," "estimate," or "continue," or variations thereon or comparable
terminology, include the plans and objectives of Management for future operations, including plans and objectives relating to
the products and future economic performance of the Company. In addition, all statements other than statements of historical facts
that address activities, events, or developments the Company expects, believes, or anticipates will or may occur in the future,
and other such matters, are forward-looking statements.
The
forward-looking statements included herein are based on current expectations that involve a number of risks and uncertainties.
These forward-looking statements are based on assumptions that the Company will retain key management personnel, the Company will
be successful in the development of the BACcel™ system, the Company will obtain sufficient capital to complete the development
of the BACcel™ system, the Company will find a long term strategic partner to assist in developing, manufacturing and taking
the BACcel™ system to market, the Company will be able to protect its intellectual property, the Company's ability to respond
to technological change, that the Company will continue as a going concern, that the Company will accurately anticipate market
demand for the Company's products and that there will be no material adverse change in the Company's operations or business. Assumptions
relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions
and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the
control of the Company. Although the Company believes that the assumptions underlying the forward-looking statements are reasonable,
any of the assumptions could prove inaccurate and, therefore, there can be no assurance that the results contemplated in forward-looking
statements will be realized. We undertake no obligation to publicly update or revise any forward-looking statements, whether as
a result of new information, future events or otherwise.
The
following discussion should be read in conjunction with the Company's unaudited condensed financial statements and related notes
included elsewhere herein. The Company's future operating results may be affected by various trends and factors which are beyond
the Company's control. These include, among other factors, general public perception of issues and solutions, and other uncertain
business conditions that may affect the Company's business. The Company cautions the reader that a number of important factors
discussed herein, and in other reports, filed with the Securities and Exchange Commission including but not limited to the risks
in the section entitled "Risk Factors" are in its 10-K for the year ended July 31, 2011, could affect the Company's
actual results and cause actual results to differ materially from those discussed in forward-looking statements.
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Accelr8 Technology Corporation
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13
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Overview
Our
vision is to develop and commercialize an innovative, integrated system to rapidly identify bacteria and their mechanisms of antibiotic
resistance in critically ill patients. Our business strategy for primary products in vertical markets is to prove the validity
of our technology and recruit an industry leader as a commercial partner or licensee. We also plan to spin off specific OEM technology
components through additional licensed applications that do not compete with our platform licensees.
We
envision our continuing role as licensor and alliance partner as one of leading the technical development of new technology, validating
the application methods, expanding platform applications, and integrating additional capabilities into our proprietary platforms.
Since
2007, we have focused our efforts on the development of an innovative rapid diagnostic platform, the BACcel™ system, intended
for rapid diagnosis in life-threatening bacterial infections. Our goal is to reduce the failure rate of initial therapy by shortening
the lab turnaround time to less than 8 hours, rather than the 2-3 days now required. Rapid testing would provide guidance in time
to influence initial therapy from the first day.
The
BACcel™ system applies our proprietary technology to eliminate time-consuming bacterial culturing, thus eliminating the
major source of delay with current testing methods. Proprietary technologies include our patented analytical methods, and our
patented OptiChem® surface coatings. The BACcel™ system includes a fixed instrument and proprietary single-use (disposable)
test cassettes. Each cassette tests a single patient specimen and then must be discarded.
The
BACcel™ system uses long-accepted clinical microbiology principles, but applies our proprietary technology to adapt them
to analyze live bacteria extracted directly from a patient specimen. The instrumentation uses an automated digital microscope
to measure the responses of extracted live bacterial cells to various test conditions. The system analyzes thousands of these
individual cells to arrive at organism identification and antibiotic resistance characteristics.
Based
on data obtained during development, Management believes that the BACcel™ system will identify the organisms present in
a patient's specimen and count the number of organisms of each type in less than 2 hours after receiving a specimen. Management
believes that the BACcel™ system will then additionally report major categories of antibiotic resistance mechanism present
for each type of organism within a total of 4-6 hours after receiving a specimen. The clinical purpose is to narrow the drug choices
available for initial therapy by rapidly reporting presumptive identification and major resistance types, thus ruling out antibiotic
classes that are most likely to fail.
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Accelr8 Technology Corporation
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14
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Management
believes that the BACcel™ system is the only new diagnostic technology under development that will address a clinically
adequate range of species and antibiotic resistance mechanisms needed to help manage critical infectious diseases. Management
also believes that other rapid technologies, such as gene detection, are better suited to screening non-infected carriers of a
small number of species and resistance mechanisms, but are too limited to compete with the BACcel™ platform for managing
infected and especially critically ill ICU patients.
During the nine months ended April 30, 2012 the Company applied the latest prototype version of the automated BACcel(tm) system
to define technical specifications needed for product design and market launch in international clinical markets and research
markets in the US.
Accelr8
also began to expand the diagnostic scope of the BACcel™ system with studies on additional specimen types and medical indications.
In particular, the Company began studies for rapid analysis of positive blood cultures. Feasibility studies showed that the BACcel™
system has the potential to reduce the typical 3-4 day turnaround time for cultures to second-day results.
In
addition, the Company demonstrated feasibility for an innovative specimen preparation method that can reduce specimen handling
time from 45 minutes to 10 minutes. The new BAC-Xtrax™ technology can be fully automated and integrated into the BACcel™
system for full “specimen-to-answer” performance. The BAC-Xtrax™ technology could also enable a stand-alone
product for hospital and research labs and integrate into other analytical platforms.
The
Company received notice of abstract acceptance to make two technical presentations at the annual General Meeting of the American
Society for Microbiology on June 17, 2012. One of the presentations, co-authored with investigators at Denver Health, will disclose
rapid analysis in positive blood cultures of a complex, major type of antibiotic resistance known as "extended-spectrum beta-lactamase"
or "ESBL." This resistance phenotype has proven problematic in hospital laboratories and is continually increasing in
prevalence. The second presentation will describe performance of the BAC-Xtrax™ rapid specimen preparation method that Accelr8
has now demonstrated in its automated laboratory prototype. The BAC-Xtrax™ preparation method is the subject of a new patent
filed during the 9-month period.
On
June 14, 2010, the Company entered into an Evaluation Agreement and Letter of Intent with Novartis for a technical evaluation
project with the Company’s BACcel™ rapid diagnostic technology. . Under the agreements with Novartis, Accelr8 received
technical development fees of $ 842,408 during the fiscal year ended July 31, 2011 and $140,000 in the quarter ended October 31,
2011. The evaluation agreement with Novartis expired on September 30, 2011 without Novartis exercising its option for licensing
the Company’s BACcel™ system intellectual property.
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Accelr8 Technology Corporation
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15
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|
On
April 20, 2012, the Company entered into a Securities Purchase Agreement with Abeja Ventures, LLC (“Investor”) pursuant
to which the Company agreed to sell and issue to Investor (1) 14,000,000 shares of the Company’s common stock at a purchase
price of $1.03 per share for an aggregate purchase price of $14,420,000 (the “Purchase Price”); (2) a warrant to purchase
7,000,000 shares of the Company’s common stock at an exercise price of $1.03 per share; and (3) another warrant to purchase
7,000,000 shares of the Company’s common stock at an exercise price of $2.00 per share, with each warrant exercisable prior
to the fifth anniversary of the closing of the transactions contemplated by the Securities Purchase Agreement (collectively, the
“Investment”). See Note 7 to the condensed financial statements, above.
The
purpose is to complete the product development and market introduction of the Company’s BACcel™ culture-free, diagnostic
system for same-shift identification and antibiotic resistance testing of bacterial and fungal pathogens. Subsequent to shareholder
approval and closing, Larry Mehren will become CEO and David Howson will become the Chief Scientific Officer of the Company.
Recently
Issued Accounting Pronouncements
In
May 2011, the FASB issued Accounting Standards Update No. 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve
Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs”. The amendments result in common fair
value measurement and disclosure requirements in U.S. generally accepted accounting principles (GAAP) and International Financial
Reporting Standards (IFRSs), and do not require additional fair value measurements and are not intended to establish valuation
standards or affect valuation practices. The amendments in this update are effective during interim and annual periods beginning
after December 15, 2011. Adoption of the new requirement in the current quarter did not have an effect on the Company’s
financial position, results of operations or cash flow.
In
June 2011, the FASB issued Accounting Standards Update No. 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive
Income”. In this update, FASB eliminated the option to present components of other comprehensive income as part of the statement
of changes in stockholders’ equity. The amendments require that all non-owner changes in equity be presented either in a
single continuous statement of comprehensive income or in two separate but consecutive statements. The amendments in this update
are effective for fiscal years, and interim periods within these years, beginning after December 15, 2011. Adoption of the new
requirement is not expected to have an effect on the Company’s financial position, results of operations or cash flow.
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Accelr8 Technology Corporation
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16
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In
September 2011, the FASB issued ASU No. 2011-08, Intangibles – Goodwill and Other (Topic 350). ASU No. 2011-08 redefines
the approach to goodwill impairment testing by providing companies with the option to qualitatively evaluate the likelihood of
impairment before proceeding to Step 1 of the impairment test (i.e. comparison of the fair value of a reporting unit to its carrying
value). The amendment also provides more guidance on the types of events and circumstances that an entity should consider between
annual impairment tests in determining whether it is more likely than not that the fair value of a reporting unit is less than
its carrying amount. The amendments are effective for annual and interim goodwill impairment tests performed for fiscal years
beginning December 15, 2011. Early adoption is permitted, including for annual and interim goodwill impairment tests performed
as of a date before September 15, 2011, if an entity’s financial statements for the most recent annual or interim period
have not yet been issued, or for nonpublic entities, that have not been made available for issuance. Adoption of the new requirement
is not expected to have an effect on the Company’s financial position, results of operations, cash flow and the annual goodwill
impairment test.
Changes
in Results of Operations: three months ended April 30, 2012 compared to three months ended April 30, 2011.
During
the three months ended April 30, 2012, OptiChem(R) revenues were $13,207 as compared to $25,772 during the three month period
ended April 30, 2011, a decrease of $12,565 or 48.8%. The decrease was due to the decreased royalties earned from sales of slides
H and HS sold by Schott .
Technical
development fees during the three-month period ended April 30, 2012 were $0 as compared to $214,500 during the three-month period
ended April 30, 2011, a decrease of $214,500 or 100%. The decrease in technical development fees were the result of the Evaluation
Agreement and the Letter of Intent, each as amended, with Novartis which expired on September 30, 2011.
Research
and development expenses for the three months ended April 30, 2012 were $109,860 as compared to $126,918 during the three months
ended April 30, 2011, a decrease of $17,058 or 13.4%. This decrease was primarily due to decreased laboratory supplies totaling
$23,883.
During
the three months ended April 30, 2012, general and administrative expenses were $248,207 as compared to $181,881 during the three
months ended April 30, 2011, an increase of $66,326 or 36.7%. The increase was primarily due to an increase in stock based and
deferred compensation costs totaling $97,793.
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Accelr8 Technology Corporation
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17
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The
increase in amortization was negligible for the three months ended April 30, 2012 as compared to the three month period ended
April 30, 2011.
Marketing
and sales expenses for the three months ended April 30, 2012 were $344 as compared to $1,246 during the three months ended April
30, 2011, a decrease of $902. Marketing related charges consist of costs incurred to attend business meetings.
Depreciation
for the three months ended April 30, 2012 was $516 as compared to $599 during the three months ended April 30, 2011, a decrease
of $83 or 13.86%. The decreased depreciation was the result of assets becoming fully depreciated, coupled with no new purchases
of on-site lab equipment during the quarter ended April 30, 2012.
As
a result of the above factors, loss from operations for the three months ended April 30, 2012 was $410,217 as compared to a loss
of $133,835 during the three months ended April 30, 2011, an increased loss of $276,382 or 206.5%.
Interest
and dividend income during the three months ended April 30, 2012 was $4,061 as compared to $4,077 during the three months ended
April 30, 2011, a decrease of $16 Interest income decreased primarily as a result of the interest that accrued on the Company’s
long term receivable.
An
unrealized holding gain on investments held in the deferred compensation trust for the three months ended April 30, 2012 was $17,773
as compared to an unrealized gain of $5,764 during the three months ended April 30, 2011, an increase of $12,009 or 208.3%. The
change was a result of market fluctuations in the price of marketable securities held in the deferred compensation trust for employee
benefit.
As
a result of these factors, net loss for the three months ended April 30, 2012 was $388,383 as compared to $123,994 during the
three months ended April 30, 2011, an increased loss of $264,389 or 213.2%.
Changes
in Results of Operations: Nine months ended April 30, 2012 compared to nine months ended april 30, 2011
.
During
the nine months ended April 30, 2012, OptiChem(R) revenues were $33,543 as compared to $40,813 during the nine month period ended
April 30, 2011, a decrease of $7,270 or 17.8%. The decrease was due to reduced royalties earned from sales of slides H and HS
sold by Schott. Of the $33,543 of OptiChem(R) revenues, $16,343 was applied toward deferred revenue from pre-paid royalties.
Technical
development fees during the nine-month period ended April 30, 2012 were $140,000 as compared to $734,908 during the nine-month
period ended April 30, 2011, a decrease of $594,908 or 81%. Technical development fees were the result of the Evaluation Agreement
and the Letter of Intent, each as amended, with Novartis which expired on September 30, 2011.
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Accelr8 Technology Corporation
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18
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|
During
the nine months ended April 30, 2011, the Company received a grant in the amount of $244,479 as part of a new Internal Revenue
Code 48D program created by the Patient Protection and Affordable Care Act. No such grants were obtained during the nine months
ended April 30, 2012.
Research
and development expenses for the nine months ended April 30, 2012 were $302,900 as compared to $345,602 during the nine months
ended April 30, 2011, a decrease of $42,702 or 12.4%. This decrease was primarily the result of a reduction in laboratory wages
and laboratory supplies and other research and development costs associated with the Novartis evaluation agreement.
During
the nine months ended April 30, 2012, general and administrative expenses were $905,453 as compared to $606,693 during the nine
month period ended April 30, 2011, an increase of $298,760 or 49.2%. The increase was primarily due to stock based and deferred
compensation costs.
Marketing
and sales expenses for the nine months ended April 30, 2012 were $4,560 as compared to $7,739 during the nine months ended April
30, 2011, a decrease of $3,179 or 41.1%. The decreased marketing and sales expenses were primarily due to lower travel related
costs in connection with industry conferences and other travel expenses.
Depreciation
for the nine months ended April 30, 2012 was $1,546 as compared to $1,797 during the nine months ended April 30, 2011, a decrease
of $251 or 13.9%. The decreased depreciation was the result of some assets becoming fully depreciated, coupled with no new purchases
of lab equipment during the nine months ended April 30, 2011As a result of the above factors, loss from operations for the nine
months ended April 30, 2012 was $1,183,761 as compared to a loss of $131,491 during the nine months ended April 30, 2011, an increase
of $1,052,270 or 800.3%.
Investment
and dividend income during the nine months ended April 30, 2012 was $11,898 as compared to $11,481 during the nine months ended
April 30, 2011 an increase of $417 or 3.6%. Interest income increased primarily as a result of the interest that accrued on the
Company’s long term receivable.
Gain
on the sale of equipment was the result of the sale of certain laboratory equipment for $1,000 during the nine months ended April
30, 2012 that was not present during the nine months ended April 30, 2011.
An
unrealized holding gain on investments held in the deferred compensation trust for the nine months ended April 30, 2012 was a
gain of $29,017, as compared to a gain of $36,907 for the nine months ended April 30, 2011, a decreased gain of $7,890 or 21.4%.
The change was the result of market fluctuations in the price of marketable securities held in the deferred compensation trust
for employee benefit.
As
a result of these factors, net loss for the nine months ended April 30, 2012 was $1,141,846 as compared to $83,013 during the
nine months ended April 30, 2011.
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Accelr8 Technology Corporation
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19
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Capital
Resources and Liquidity
During
the nine months ended April 30, 2012 we did not generate positive cash flows from operating activities.
At
April 30, 2012, as compared to July 31, 2011, cash and cash equivalents decreased by $562,861 from $775,856 to $212,995, or approximately
72.54% and the Company's working capital decreased $672,734 or 49.7% from $1,353,499 to $680,765. During the same period, shareholders'
equity decreased from $4,815,476 to $4,021,254.
The
net cash used in operating activities was $431,665 during the nine months ended April 30, 2012 compared to cash provided by operating
activities of $211,056 during the nine months ended April 30, 2011. The principal element that gave rise to the decrease of cash
used in operating activities was the net loss of $1,141,846 adjusted by items not currently requiring the use of cash such as
depreciation, amortization, stock based compensation totaling $507,269 and other changes in accruals totaling $202,912.
The
Company has historically funded its operations generally through its existing cash balances, cash flow generated from operations
and sales of equity securities. Our primary use of capital has been for the research and development of the BACcel(TM) system.
Notwithstanding our investments in research and development, there can be no assurance that the BACcel(TM) system or any of
our other products will be successful, or even if they are successful, will provide sufficient revenues to continue our current
operations.
Our
working capital requirements are expected to increase in line with the growth of our business. We have no lines of credit or other
bank or off balance sheet financing arrangements.
On
April 20, 2012, the Company entered into a Securities Purchase Agreement with Abeja Ventures, LLC (“Investor”) pursuant
to which the Company agreed to sell and issue to Investor (1) 14,000,000 shares of the Company’s common stock at a purchase
price of $1.03 per share for an aggregate purchase price of $14,420,000 (the “Purchase Price”); (2) a warrant to purchase
7,000,000 shares of the Company’s common stock at an exercise price of $1.03 per share; and (3) another warrant to purchase
7,000,000 shares of the Company’s common stock at an exercise price of $2.00 per share, with each warrant exercisable prior
to the fifth anniversary of the closing of the transactions contemplated by the Securities Purchase Agreement (collectively, the
“Investment”). See Note 7 above.
The
Company anticipates this Investment will occur on or about June 26, 2012.
Subject to the
receipt of the Investment, management believes that current cash balances plus cash flow from operations will be sufficient
to fund our capital and liquidity needs for the foreseeable future. However, the closing on the Investment is subject to
certain conditions to closing that have not yet occurred and there can be no assurance that they will occur. If the Company
did not close on the Investment, it would not have sufficient capital to fund its capital and liquidity needs for the next 12
months
and we would be required to obtain additional capital through the issuance of debt or equity securities or
other means to execute our plans. There can be no assurance that such capital would be available in sufficient amounts or on
terms acceptable to us, if at all.
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Accelr8 Technology Corporation
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20
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Any
additional issuances of equity or convertible debt securities in the future, including but not limited to the exercise of the
warrants issued in connection with the Investment, will result in dilution to our current common stockholders.
Item
3. Quantitative and Qualitative Disclosures About Market Risk
Interest
Rate Risk
The
Company’s interest income is sensitive to fluctuations in the general level of U.S. interest rates. As such, changes in
U.S. interest rates affect the interest earned on the Company’s cash, cash equivalents, and short-term investments.
Item
4. Controls and Procedures
An
evaluation was conducted under the supervision and with the participation of the Company's Management, including Thomas V. Geimer,
the Company's Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), of the effectiveness of
the design and operation of the Company's disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under
the Securities Exchange Act of 1934, as amended (“Exchange Act”). Based on that evaluation, Mr. Geimer concluded that
as of April 30, 2012, the Company's disclosure controls and procedures were effective as of such date to ensure that information
required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is recorded,
processed, summarized and reported within the time periods specified in SEC rules and forms. Mr. Geimer also confirmed that there
was no change in the Company's internal control over financial reporting during the quarter ended April 30, 2012.
PART
II. OTHER INFORMATION
Item
1. Legal Proceedings
Not Applicable.
Item
1A. Risk Factors
Not Applicable.
Item
2. Unregistered Sales of Equity Securities and Use of Proceeds
Not
Applicable.
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Accelr8 Technology Corporation
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Item
3. Defaults upon Senior Securities
Not applicable.
Item
4. Mine Safety Disclosures
Not applicable.
Item
5. Other Information
None.
Item
6. Exhibits
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Exhibit
No.
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Description
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10.1
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Securities Purchase Agreement dated April
20, 2012 by and between Accelr8 Technology Corporation and Abeja Ventures, LLC
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31.1
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Certification
of Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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31.2
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Certification
of Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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32.1
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Certification
of Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act 0f 2002.
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Accelr8 Technology Corporation
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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 thereunto duly authorized.
Dated:
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ACCELR8 TECHNOLOGY CORPORATION
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June 14, 2012
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/s/ Thomas V. Geimer
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Thomas V. Geimer, Secretary,
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Chief Executive Officer and
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Chief Financial Officer
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June 14, 2012
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/s/ Bruce H. McDonald
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Bruce H. McDonald, Principal
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Accounting Officer
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Accelr8 Technology Corporation
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23
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