x
|
QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
Florida
(State
or other jurisdiction of incorporation)
|
58-2349413
(I.R.S.
Employer Identification No.)
|
|
60
State Street, Suite 700, Boston, MA
(Address
of principal executive offices)
|
02109
(Zip
Code)
|
PART
I FINANCIAL INFORMATION
|
|
Item
1. Financial Statements
|
|
3
|
|
4
|
|
5
|
|
9
|
|
10
|
|
18
|
|
23
|
|
PART
II OTHER INFORMATION
|
|
24
|
|
24
|
|
24
|
|
24
|
|
24
|
|
24
|
|
25
|
HEPALIFE TECHNOLOGIES, INC.
|
||||||||
(A
Development Stage Company)
|
||||||||
CONSOLIDATED
BALANCE SHEETS
|
||||||||
September
30, 2008 and December 31, 2007
|
||||||||
(Unaudited)
|
||||||||
September
30,
|
December
31,
|
|||||||
(Expressed
in U.S. Dollars)
|
2008
|
2007
|
||||||
ASSETS
|
||||||||
Current
assets
|
||||||||
Cash
|
$ | 3,653,554 | $ | 534,113 | ||||
Prepaid
expenses and other receivables
|
53,689 | 4,338 | ||||||
Total
current assets
|
3,707,243 | 538,451 | ||||||
Equipment, net (Note
7)
|
- | 10,882 | ||||||
License fee (Note
5)
|
75,000 | 75,000 | ||||||
Deferred financing costs
(Note 9)
|
- | 210,728 | ||||||
Total
assets
|
$ | 3,782,243 | $ | 835,061 | ||||
LIABILITIES
|
||||||||
Current
liabilities
|
||||||||
Accounts
payable and accrued liabilities
|
$ | 48,872 | $ | 4,800 | ||||
Accounts
payable - related parties (Note 4)
|
- | 208,330 | ||||||
Notes
payable - related party (Note 4)
|
- | 877,800 | ||||||
Total
current liabilities
|
48,872 | 1,090,930 | ||||||
Convertible promissory note,
at face value (Note 9)
|
- | 755,000 | ||||||
Discount
on convertible promissory notes (Note 9)
|
- | (468,343 | ) | |||||
- | 286,657 | |||||||
Total
liabilities
|
48,872 | 1,377,587 | ||||||
Commitments
and Contingencies (Note 5, 6)
|
||||||||
STOCKHOLDERS'
EQUITY (DEFICIENCY)
|
||||||||
Stockholders'
Equity (Deficiency)
|
||||||||
Preferred
stock: $0.10 par value; Authorized: 1,000,000 Issued and outstanding:
none
|
- | - | ||||||
Common
stock: $0.001 par value; Authorized: 300,000,000Issued and outstanding:
91,596,829 (2007: 76,264,584)
|
91,598 | 76,265 | ||||||
Additional
paid-in capital
|
21,806,840 | 15,039,050 | ||||||
Common
stock issuable
|
170,000 | - | ||||||
Accumulated
other comprehensive income (loss)
|
(3,356 | ) | (3,772 | ) | ||||
Loss
accumulated during the development stage
|
(18,331,711 | ) | (15,654,069 | ) | ||||
Total
stockholders' equity (deficiency)
|
3,733,371 | (542,526 | ) | |||||
Total
liabilities and stockholders' equity (deficiency)
|
$ | 3,782,243 | $ | 835,061 | ||||
(The
accompanying notes are an integral part of these financial
statements)
|
HEPALIFE
TECHNOLOGIES, INC.
|
||||||||||||||||||||
(A
Development Stage Company)
|
||||||||||||||||||||
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
||||||||||||||||||||
For
the three months and nine months ended September 30, 2008 and
2007
|
||||||||||||||||||||
and
from inception (October 21, 1997) to September 30, 2008
|
||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||
From
inception
|
||||||||||||||||||||
(October
21, 1997)
|
||||||||||||||||||||
Three
months ended September 30,
|
Nine
months ended September 30,
|
to
September 30,
|
||||||||||||||||||
(Expressed
in U.S. Dollars)
|
2008
|
2007
|
2008
|
2007
|
2008
|
|||||||||||||||
Revenue
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
Expenses
|
||||||||||||||||||||
Administrative
and general
|
74,038 | 67,938 | 145,408 | 170,453 | 786,756 | |||||||||||||||
Depreciation
|
2,607 | 4,177 | 7,820 | 12,078 | 35,409 | |||||||||||||||
Professional
fees- accounting and legal
|
60,783 | 17,920 | 149,588 | 93,385 | 657,109 | |||||||||||||||
Management
and consulting fees (Note 4)
|
6,593 | 3,685 | 8,093 | 27,127 | 1,010,430 | |||||||||||||||
Research
and development (Notes 5 and 6)
|
84,803 | 2,095 | 294,008 | 66,685 | 1,315,296 | |||||||||||||||
Salary
and benefits
|
343,747 | 301,012 | 986,497 | 1,209,091 | 5,463,467 | |||||||||||||||
Shareholder
and investor relations
|
172,125 | 270,409 | 341,595 | 481,790 | 4,125,984 | |||||||||||||||
Stock
offering costs
|
- | - | - | - | 1,926,713 | |||||||||||||||
Transfer
agent and filing
|
965 | - | 2,210 | 4,468 | 18,227 | |||||||||||||||
Travel
|
13,746 | 22,018 | 34,682 | 60,195 | 328,281 | |||||||||||||||
759,407 | 689,254 | 1,969,901 | 2,125,272 | 15,667,672 | ||||||||||||||||
Operating
Loss
|
(759,407 | ) | (689,254 | ) | (1,969,901 | ) | (2,125,272 | ) | (15,667,672 | ) | ||||||||||
Other
income (expenses)
|
||||||||||||||||||||
Interest
on promissory note
|
- | (18,807 | ) | (41,615 | ) | (61,625 | ) | (355,112 | ) | |||||||||||
Interest,
bank charges and foreign exchange loss
|
(786 | ) | (274 | ) | (9,959 | ) | (5,417 | ) | (34,505 | ) | ||||||||||
Interest
income
|
14,498 | 15,851 | 25,964 | 30,080 | 115,252 | |||||||||||||||
Other
income / (loss)
|
(3,060 | ) | - | (3,060 | ) | - | (3,060 | ) | ||||||||||||
Amortization
of discount on issuance of convertible promissory notes (Note
9)
|
- | (1,029,527 | ) | (468,343 | ) | (1,092,320 | ) | (2,093,099 | ) | |||||||||||
Amortization
of deferred financing costs (Note 9)
|
- | (36,991 | ) | (210,728 | ) | (45,796 | ) | (293,515 | ) | |||||||||||
10,652 | (1,069,748 | ) | (707,741 | ) | (1,175,078 | ) | (2,664,039 | ) | ||||||||||||
Net
loss available to common shareholders
|
$ | (748,755 | ) | $ | (1,759,002 | ) | $ | (2,677,642 | ) | $ | (3,300,350 | ) | $ | (18,331,711 | ) | |||||
Loss per share - basic
and diluted
|
$ | (0.01 | ) | $ | (0.02 | ) | $ | (0.03 | ) | $ | (0.04 | ) | ||||||||
Weighted average number of
common shares outstanding - basic and diluted
|
91,735,959 | 74,156,604 | 83,923,575 | 73,539,141 | ||||||||||||||||
(The
accompanying notes are an integral part of these financial
statements)
|
CONSOLIDATED
STATEMENT OF STOCKHOLDERS' EQUITY
(DEFICIENCY)
|
||||||||||||||||||||||||||||||||
From
inception (October 21, 1997) to September 30, 2008
|
||||||||||||||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||||||||||||||
Common
|
Accumulated
|
Loss
accumulated
|
Total
|
|||||||||||||||||||||||||||||
Common
Stock
|
Additional
|
Stock
|
other
comprehensive
|
during
development
|
Comprehensive
|
stockholders'
|
||||||||||||||||||||||||||
(Expressed
in U.S. Dollars)
|
Shares
|
Amount
|
paid-in
capital
|
Issuable
|
income
|
stage
|
income
(loss)
|
equity
(deficiency)
|
||||||||||||||||||||||||
Common
stock issued for service rendered at $0.00025 per share, October 21,
1997
|
12,000,000 | $ | 12,000 | $ | (9,000 | ) | $ | - | $ | - | $ | - | $ | 3,000 | ||||||||||||||||||
Common
stock issued for cash at $0.0625 per share during 1997
|
1,200,000 | 1,200 | 73,800 | - | - | 75,000 | ||||||||||||||||||||||||||
Comprehensive
income Income from inception (October 21, 1997) to December 31,
1997
|
- | - | - | - | 42 | 42 | 42 | |||||||||||||||||||||||||
Total
comprehensive income
|
42 | |||||||||||||||||||||||||||||||
Balance,
December 31, 1997
|
13,200,000 | 13,200 | 64,800 | - | - | 42 | 78,042 | |||||||||||||||||||||||||
Common
stock issued for service rendered at $0.025 per share, December 15,
1998
|
16,000,000 | 16,000 | 384,000 | - | 400,000 | |||||||||||||||||||||||||||
Comprehensive
income (loss) Loss, year ended December 31, 1998
|
- | - | - | (471,988 | ) | (471,988 | ) | (471,988 | ) | |||||||||||||||||||||||
Total
comprehensive income
|
(471,988 | ) | ||||||||||||||||||||||||||||||
Balance,
December 31, 1998
|
29,200,000 | 29,200 | 448,800 | - | - | (471,946 | ) | 6,054 | ||||||||||||||||||||||||
Common
stock issued for cash at $0.025 per share, March 1999
|
12,000,000 | 12,000 | 288,000 | - | 300,000 | |||||||||||||||||||||||||||
Comprehensive
income (loss) Loss, year ended December 31, 1999
|
- | - | - | (121,045 | ) | (121,045 | ) | (121,045 | ) | |||||||||||||||||||||||
Total
comprehensive income
|
(121,045 | ) | ||||||||||||||||||||||||||||||
Balance,
December 31, 1999
|
41,200,000 | 41,200 | 736,800 | - | - | (592,991 | ) | 185,009 | ||||||||||||||||||||||||
Comprehensive
income (loss) Loss, year ended December 31, 2000
|
- | - | - | (80,608 | ) | (80,608 | ) | (80,608 | ) | |||||||||||||||||||||||
Total
comprehensive income
|
(80,608 | ) | ||||||||||||||||||||||||||||||
Balance,
December 31, 2000
|
41,200,000 | 41,200 | 736,800 | - | - | (673,599 | ) | 104,401 | ||||||||||||||||||||||||
Conversion
of debt to equity at $0.015 per share, July 31, 2001
|
8,933,332 | 8,933 | 125,067 | - | 134,000 | |||||||||||||||||||||||||||
Comprehensive
income (loss) Loss, year ended December 31, 2001
|
- | - | - | (160,364 | ) | (160,364 | ) | (160,364 | ) | |||||||||||||||||||||||
Total
comprehensive income
|
(160,364 | ) | ||||||||||||||||||||||||||||||
Balance,
December 31, 2001
|
50,133,332 | 50,133 | 861,867 | - | - | (833,963 | ) | 78,037 |
CONSOLIDATED
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)
|
||||||||||||||||||||||||||||||||
From
inception (October 21, 1997) to September 30, 2008
(continued)
|
||||||||||||||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||||||||||||||
Common
|
Accumulated
|
Loss
accumulated
|
Total
|
|||||||||||||||||||||||||||||
Common
Stock
|
Additional
|
Stock
|
other
comprehensive
|
during
development
|
Comprehensive
|
stockholders'
|
||||||||||||||||||||||||||
(Expressed
in U.S. Dollars)
|
Shares
|
Amount
|
paid-in
capital
|
Issuable
|
income
|
stage
|
income
(loss)
|
equity
(deficiency)
|
||||||||||||||||||||||||
Common
stock issued for services at $0.06 per share, April 23,
2002
|
10,000 | 10 | 590 | - | 600 | |||||||||||||||||||||||||||
Conversion
of debt to equity at $0.05 per share, April 26, 2002
|
2,160,000 | 2,160 | 105,840 | - | 108,000 | |||||||||||||||||||||||||||
Common
stock issued for investor relations services at $0.05 per share, July 25,
2002
|
2,390,000 | 2,390 | 117,110 | - | 119,500 | |||||||||||||||||||||||||||
Conversion
of debt to equity at $0.05 per share, December 18, 2002
|
1,920,000 | 1,920 | 94,080 | - | 96,000 | |||||||||||||||||||||||||||
Comprehensive
income (loss) Loss, year ended December 31, 2002
|
- | - | - | (375,472 | ) | (375,472 | ) | (375,472 | ) | |||||||||||||||||||||||
Total
comprehensive income
|
(375,472 | ) | ||||||||||||||||||||||||||||||
Balance,
December 31, 2002
|
56,613,332 | 56,613 | 1,179,487 | - | - | (1,209,435 | ) | 26,665 | ||||||||||||||||||||||||
Common
stock issued pursuant to exercise of stock options during the year at
between $0.07 to $2.11 per share
|
282,500 | 283 | 398,317 | - | 398,600 | |||||||||||||||||||||||||||
Common
stock issued pursuant to exercise of share purchase warrants in November
2003 at $0.025 per share
|
7,300,000 | 7,300 | 175,200 | - | 182,500 | |||||||||||||||||||||||||||
Comprehensive
income (loss) Loss, year ended December 31, 2003
|
- | - | - | (1,102,723 | ) | (1,102,723 | ) | (1,102,723 | ) | |||||||||||||||||||||||
Total
comprehensive income
|
(1,102,723 | ) | ||||||||||||||||||||||||||||||
Balance,
December 31, 2003
|
64,195,832 | 64,196 | 1,753,004 | - | - | (2,312,158 | ) | (494,958 | ) | |||||||||||||||||||||||
Common
stock issued pursuant to exercise of stock options during the year between
$0.07 to $2.11 per share
|
1,622,000 | 1,622 | 1,339,998 | - | 1,341,620 | |||||||||||||||||||||||||||
Common
stock issued pursuant to exercise of share purchase warrants in December
2004 at $0.025 per share
|
2,000,000 | 2,000 | 48,000 | - | 50,000 | |||||||||||||||||||||||||||
Comprehensive
income (loss) Loss, year ended December 31, 2004
|
- | - | - | (1,435,613 | ) | (1,435,613 | ) | (1,435,613 | ) | |||||||||||||||||||||||
Total
comprehensive income
|
(1,435,613 | ) | ||||||||||||||||||||||||||||||
Balance,
December 31, 2004
|
67,817,832 | 67,818 | 3,141,002 | - | - | (3,747,771 | ) | (538,951 | ) | |||||||||||||||||||||||
Common
stock issued pursuant to exercise of stock options in March 2005 at $3.10
per share
|
50,000 | 50 | 154,950 | - | 155,000 | |||||||||||||||||||||||||||
Common
stock issued pursuant to exercise of stock options in May 2005 at $2.11
per share
|
45,000 | 45 | 94,905 | - | 94,950 | |||||||||||||||||||||||||||
Common
stock issued pursuant to exercise of stock options in June 2005 at $2.11
per share
|
100,000 | 100 | 210,900 | - | 211,000 | |||||||||||||||||||||||||||
Common
stock issued pursuant to exercise of stock options in October 2005 at
$2.11 per share
|
40,000 | 40 | 84,360 | - | 84,400 | |||||||||||||||||||||||||||
Common
stock issued pursuant to exercise of stock options in March 2005 at $2.11
per share
|
50,000 | 50 | 105,450 | - | 105,500 | |||||||||||||||||||||||||||
Common
stock issued pursuant to exercise of share purchase warrants in March 2005
at $0.025 per share
|
1,250,000 | 1,250 | 30,000 | - | 31,250 | |||||||||||||||||||||||||||
Restricted
common stock issued in June 2005pursuant to share purchase
agreement
|
20,000 | 20 | 37,580 | - | 37,600 | |||||||||||||||||||||||||||
Restricted
common stock issued in July 2005pursuant to share purchase
agreement
|
691,598 | 692 | 1,382,504 | - | 1,383,196 | |||||||||||||||||||||||||||
Comprehensive
income (loss) Loss, year ended December 31, 2005
|
(2,813,602 | ) | (2,813,602 | ) | (2,813,602 | ) |
CONSOLIDATED
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)
|
||||||||||||||||||||||||||||||||
From
inception (October 21, 1997) to September 30, 2008
(continued)
|
||||||||||||||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||||||||||||||
Common
|
Accumulated
|
Loss
accumulated
|
Total
|
|||||||||||||||||||||||||||||
Common
Stock
|
Additional
|
Stock
|
other
comprehensive
|
during
development
|
Comprehensive
|
stockholders'
|
||||||||||||||||||||||||||
(Expressed
in U.S. Dollars)
|
Shares
|
Amount
|
paid-in
capital
|
Issuable
|
income
|
stage
|
income
(loss)
|
equity
(deficiency)
|
||||||||||||||||||||||||
Total
comprehensive income
|
(2,813,602 | ) | ||||||||||||||||||||||||||||||
Balance,
December 31, 2005
|
70,064,430 | 70,065 | 5,241,651 | - | - | (6,561,373 | ) | (1,249,657 | ) | |||||||||||||||||||||||
Restricted
common stock issued in January 2006 pursuant to share purchase
agreement
|
374,753 | 375 | 505,542 | - | - | 505,917 | ||||||||||||||||||||||||||
Common
stock issued in the first quarter of 2006 to Fusion Capital for
cash
|
431,381 | 431 | 449,569 | - | - | 450,000 | ||||||||||||||||||||||||||
Common
stock issued in the second quarter of 2006 to Fusion Capital for
cash
|
416,303 | 416 | 329,584 | - | - | 330,000 | ||||||||||||||||||||||||||
Common
stock issued in the third quarter of 2006 to Fusion Capital for
cash
|
758,606 | 759 | 584,234 | - | - | 584,993 | ||||||||||||||||||||||||||
Common
stock issued in the fourth quarter of 2006 to Fusion Capital for
cash
|
548,371 | 548 | 354,455 | - | - | 355,003 | ||||||||||||||||||||||||||
Exercise
of stock options
|
175,000 | 175 | 12,075 | - | - | 12,250 | ||||||||||||||||||||||||||
Stock
based compensation expenses
|
- | - | 2,607,302 | - | - | 2,607,302 | ||||||||||||||||||||||||||
Comprehensive
income (loss) Loss, year ended December 31,
2006
|
(4,654,499 | ) | (4,654,499 | ) | (4,654,499 | ) | ||||||||||||||||||||||||||
Total
comprehensive income
|
(4,654,499 | ) | ||||||||||||||||||||||||||||||
Balance,
December 31, 2006
|
72,768,844 | 72,769 | 10,084,412 | - | - | (11,215,872 | ) | (1,058,691 | ) | |||||||||||||||||||||||
Common
stock issued in the first quarter of 2007 to Fusion Capital for
cash
|
382,000 | 382 | 204,619 | 205,001 | ||||||||||||||||||||||||||||
Common
stock issued in the second quarter of 2007 to Fusion Capital for
cash
|
509,019 | 509 | 289,491 | 290,000 | ||||||||||||||||||||||||||||
Common
stock converted from convertible promissory notes
|
2,604,721 | 2,605 | 1,742,395 | 1,745,000 | ||||||||||||||||||||||||||||
Stock
based compensation expenses
|
935,044 | 935,044 | ||||||||||||||||||||||||||||||
Proceeds
allocated to the warrants issued with the convertible
notes
|
497,689 | 497,689 | ||||||||||||||||||||||||||||||
Warrants
issued for the payment of broker's fees
|
64,990 | 64,990 | ||||||||||||||||||||||||||||||
Intrinsic
value of the beneficial conversion feature of the
notes
|
1,220,410 | 1,220,410 | ||||||||||||||||||||||||||||||
Comprehensive
income (loss) Foreign currency translation adjustment
|
(3,772 | ) | (3,772 | ) | (3,772 | ) | ||||||||||||||||||||||||||
Loss,
year ended December 31, 2007
|
(4,438,197 | ) | (4,438,197 | ) | (4,438,197 | ) | ||||||||||||||||||||||||||
Total
comprehensive income
|
(4,441,969 | ) |
CONSOLIDATED
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)
|
||||||||||||||||||||||||||||||||
From
inception (October 21, 1997) to September 30, 2008 (continued)
|
||||||||||||||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||||||||||||||
Common
|
Accumulated
|
Loss
accumulated
|
Total
|
|||||||||||||||||||||||||||||
Common
Stock
|
Additional
|
Stock
|
other
comprehensive
|
during
development
|
Comprehensive
|
stockholders'
|
||||||||||||||||||||||||||
(Expressed
in U.S. Dollars)
|
Shares
|
Amount
|
paid-in
capital
|
Issuable
|
income
|
stage
|
income
(loss)
|
equity
(deficiency)
|
||||||||||||||||||||||||
76,264,584 | 76,265 | 15,039,050 | - | (3,772 | ) | (15,654,069 | ) | (542,526 | ) | |||||||||||||||||||||||
Common
stock converted from convertible promissory notes in January
2008
|
2,342,415 | 2,343 | 752,657 | 755,000 | ||||||||||||||||||||||||||||
Common
stock converted from notes in June 2008
|
2,065,412 | 2,065 | 975,680 | 977,745 | ||||||||||||||||||||||||||||
Common
stock and warrants issued for cash and placement fees at $0.425 per share
in May 2008
|
10,924,418 | 10,925 | 4,519,875 | 4,530,800 | ||||||||||||||||||||||||||||
Common
shares issued for services received in 2008
|
170,000 | 170,000 | ||||||||||||||||||||||||||||||
Stock
based compensation expenses
|
519,578 | 519,578 | ||||||||||||||||||||||||||||||
Comprehensive
income (loss)Foreign currency translation adjustment
|
416 | 416 | 416 | |||||||||||||||||||||||||||||
Loss,
nine months ended September 30, 2008
|
(2,677,642 | ) | (2,677,642 | ) | (2,677,642 | ) | ||||||||||||||||||||||||||
Total
comprehensive income
|
$ | (2,677,226 | ) | |||||||||||||||||||||||||||||
Balance,
September 30, 2008
|
91,596,829 | $ | 91,598 | $ | 21,806,840 | $ | 170,000 | $ | (3,356 | ) | $ | (18,331,711 | ) | $ | 3,733,371 | |||||||||||||||||
(The
accompanying notes are an integral part of these financial
statements)
|
HEPALIFE
TECHNOLOGIES, INC.
|
||||||||||||
(A
Development Stage Company)
|
||||||||||||
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
||||||||||||
For
the nine months ended September 30, 2008 and 2007
|
||||||||||||
and
from inception (October 21, 1997) to September 30, 2008
|
||||||||||||
(Unaudited)
|
||||||||||||
From
inception
|
||||||||||||
(October
21, 1997)
|
||||||||||||
September
30,
|
September
30,
|
to
September 30,
|
||||||||||
(Expressed
in U.S. Dollars)
|
2008
|
2007
|
2008
|
|||||||||
Cash
flows from operating activities
|
||||||||||||
Net
Loss
|
$ | (2,677,642 | ) | $ | (3,300,350 | ) | $ | (18,331,711 | ) | |||
Adjustments
to reconcile net loss to net cash from operating
activities:
|
||||||||||||
Depreciation
|
7,820 | 12,078 | 35,409 | |||||||||
Common
stock issued for services
|
170,000 | - | 1,031,100 | |||||||||
Common
stock issued as stock offering costs
|
- | - | 1,926,713 | |||||||||
Stock
based compensation expenses
|
519,578 | 787,648 | 4,061,924 | |||||||||
Loss
on disposal of equipment
|
3,060 | 3,060 | ||||||||||
Amortization
of discount on issuance of convertible promissory notes
|
468,343 | 1,092,320 | 2,093,099 | |||||||||
Amortization
of deferred financing costs
|
210,728 | 45,796 | 293,515 | |||||||||
Change
in assets and liabilities:
|
||||||||||||
Decrease
(Increase) in prepaid expenses
|
(49,349 | ) | 3,225 | (53,687 | ) | |||||||
Increase
(Decrease) in accounts payable
|
44,072 | (121,567 | ) | 48,872 | ||||||||
Increase
(Decrease) in accounts payable - related party
|
(108,385 | ) | 30,989 | 99,945 | ||||||||
Net
cash used in operating activities
|
(1,411,775 | ) | (1,449,861 | ) | (8,791,761 | ) | ||||||
Cash
flows from investing activities
|
||||||||||||
Purchase
of property and equipment
|
- | (3,878 | ) | (38,471 | ) | |||||||
Increase
in license fees
|
- | - | (75,000 | ) | ||||||||
Net
cash used in investing activities
|
- | (3,878 | ) | (113,471 | ) | |||||||
Cash
flows from financing activities
|
||||||||||||
Proceeds
from issuance of common stock
|
4,530,800 | 495,001 | 9,787,867 | |||||||||
Proceeds
from issuance of convertible notes
|
- | 2,125,000 | 2,125,000 | |||||||||
Repayment
of promissory notes
|
- | (132,200 | ) | 877,800 | ||||||||
Cash
paid for finders fee
|
- | (228,525 | ) | (228,525 | ) | |||||||
Net
cash provided by financing activities
|
4,530,800 | 2,259,276 | 12,562,142 | |||||||||
Increase
in cash and cash equivalents
|
3,119,025 | 805,537 | 3,656,910 | |||||||||
Effect
of foreign exchange rate
|
416 | (3,131 | ) | (3,356 | ) | |||||||
Cash and cash
equivalents, beginning of period
|
534,113 | 252,887 | - | |||||||||
Cash and cash
equivalents, end of period
|
$ | 3,653,554 | $ | 1,055,293 | $ | 3,653,554 | ||||||
Supplemental
disclosure of cash flow information:
|
||||||||||||
Interest
paid in cash
|
$ | 150,000 | $ | 25,930 | $ | 247,575 | ||||||
Income
tax paid in cash
|
$ | - | $ | - | $ | - | ||||||
Non-cash
Investing and Financing Activities:
|
||||||||||||
Common
stock issued for services
|
$ | 232,078 | $ | - | $ | 1,093,078 | ||||||
Issuance
of common stock as stock offering costs
|
$ | - | $ | - | $ | 1,926,713 | ||||||
Issuance
of warrants for deferred financing costs
|
$ | - | $ | 64,990 | $ | 64,990 | ||||||
Conversion
of note payable and related interest payable to equity
|
$ | 977,745 | $ | $ | 977,745 | |||||||
Conversion
of debt to equity
|
$ | 755,000 | $ | - | $ | 2,500,000 | ||||||
(The
accompanying notes are an integral part of these financial
statements)
|
Three
months ended
|
Nine
months ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Numerator
- net loss available to common stockholders
|
$ | (748,755 | ) | $ | (1,759,001 | ) | $ | (2,677,642 | ) | $ | (3,300,350 | ) | ||||
Denominator
- weighted average number of common shares outstanding
|
91,735,959 | 74,156,604 | 83,923,575 | 73,539,141 | ||||||||||||
Basic
and diluted loss per common share
|
$ | (0.01 | ) | $ | (0.02 | ) | $ | (0.03 | ) | $ | (0.04 | ) |
September
30,
|
December
31,
|
|||||||
2008
|
2007
|
|||||||
Computer
equipment
|
$ | - | $ | 37,382 | ||||
Furniture
and fixtures
|
- | 1,089 | ||||||
- | 38,471 | |||||||
Less:
accumulated depreciation
|
- | (27,589 | ) | |||||
$ | - | $ | 10,882 |
Risk
free interest rate
|
4.58%
|
Expected
term
|
5.0
years
|
Expected
volatility
|
96.2%
|
Dividend
per share
|
$0.00
|
Risk
free interest rate
|
2.46%
|
Expected
term
|
2.0
years
|
Expected
volatility
|
94.1%
|
Dividend
per share
|
$0.00
|
Remaining
|
Aggregate
|
|||||||||||||||
Weighted
average
|
contractual
|
intrinsic
|
||||||||||||||
Number
of options
|
exercise
price
|
term
|
value
|
|||||||||||||
Outstanding
at December 31, 2006
|
10,350,000 | $ | 0.67 | |||||||||||||
Granted
|
2,026,750 | 0.52 | ||||||||||||||
Cancelled
|
(10,350,000 | ) | 0.67 | |||||||||||||
Outstanding
at December 31, 2007
|
2,026,750 | 0.52 | ||||||||||||||
Granted
|
775,000 | 0.54 | ||||||||||||||
Outstanding
at September 30, 2008
|
2,801,750 | 0.54 | 8.71 | $ | - | |||||||||||
Exercisable
at September 30, 2008
|
- | $ | 0.54 | |||||||||||||
Available
for grant at September 30, 2008
|
34,996,250 |
Number
of options
|
Fair
value per share
|
|||||||
Unvested,
December 31, 2006
|
4,650,000 | $ | 0.51 | |||||
Granted
during 2007
|
2,026,750 | 0.43 | ||||||
Cancelled
during 2007
|
(4,650,000 | ) | 0.51 | |||||
Unvested,
December 31, 2007
|
2,026,750 | 0.43 | ||||||
Granted
during 2008
|
775,000 | 0.37 | ||||||
Unvested,
September 30, 2008
|
2,801,750 | 0.41 |
Bylaws,
amended September 30, 2008
|
Certification
of the Chief Executive Officer pursuant to Rule
13a-14(a)
|
Certification
by the Chief Executive Officer pursuant to 18 U.S.C. 1350 as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
Hepalife Technologies,
Inc.
|
||
(Registrant)
|
||
Date
|
Signature
|
Title
|
November
14, 2008
|
/s/ Frank Menzler
|
Director,
President, CEO, CFO
|
Frank
Menzler
|