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| PEX > SEC Filings for PEX > Form 10-Q on 14-May-2009 | All Recent SEC Filings |
14-May-2009
Quarterly Report
Forward Looking Statements
This Quarterly Report on Form 10-Q includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). We have based these forward-looking statements on our current
expectations and projections about future events. These forward-looking
statements are subject to known and unknown risks, uncertainties and assumptions
about us that may cause our actual results, levels of activity, performance or
achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by such
forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as "may," "should," "could," "would," "expect,"
"plan," "anticipate," "believe," "estimate," "continue," or the negative of such
terms or other similar expressions. Factors that might cause or contribute to
such a discrepancy include, but are not limited to, those described in our other
Securities and Exchange Commission filings.
The following discussion should be read in conjunction with our unaudited Financial Statements and related Notes thereto included elsewhere in this report.
Critical Accounting Policies
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 at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.
Overview
We were formed on June 1, 2006 as a blank check company for the purpose of acquiring, through a merger, capital stock exchange, asset acquisition or other similar business combination, one or more operating businesses in the healthcare industry. We intended to use cash derived from the net proceeds of our initial public offering to effect a business combination. On March 4, 2009, our Board of Directors determined that the Company will not consummate a business combination within the time frame required by our Second Amended and Restated Certificate of Incorporation and accordingly, approved the dissolution and liquidation of the Company, subject to approval by the Company's stockholders. On March 6, 2009, following announcement of our Board of Directors' determination to seek dissolution and liquidation, the NYSE Amex halted trading of our warrants as they are expected to expire worthless.
Apex Acquisition Sub, Inc. is a Delaware corporation and a wholly-owned subsidiary of Apex ("Acquisition Sub"). Acquisition Sub was formed for the purpose of effecting a proposed merger transaction and has engaged in no other business activities or operations since its formation.
Results of Operations
The Company's net income of $50,514 for the three months ended March 31, 2009 consisted of formation and operating costs of $146,266 offset by interest and other income of $251,227. During the same three month period, we recorded a provision for income taxes in the amount of $54,447. For the three months ended March 31, 2008, the Company incurred a net loss of $108,699, consisting of formation and operating costs of $766,734 offset by interest and other income of $611,133 and a benefit for income taxes of $46,902. .
The net income of $633,910 for the period from June 1, 2006 (date of inception) to March 31, 2009 consisted of formation and operating costs of $2,004,922, offset by interest and other income of $3,212,034 and a provision for income taxes of $573,202.
Interest and other income during the first quarter of 2009 included $27,152 in interest income and $224,069 due to the reversal of deferred interest. Operating costs during the three month period ending March 31, 2008 included $380,400 in expenses related to due diligence associated with the terminated merger of Dynogen. In addition, $150,000 of legal expenses, associated with Dynogen, were incurred.
Liquidity and Capital Resources
We have used all or substantially all of the net proceeds of the Public Offering and private placement that occurred immediately prior thereto held outside the trust account and the up to $1,600,000 of dividend income (net of income taxes payable thereon) available to us for working capital to acquire a target business, including identifying and evaluating prospective acquisition candidates, selecting the target business, and structuring, negotiating and consummating the business combination.
In November, 2008, the Company issued promissory notes for $170,000 to our Initial Stockholders, of which $78,284 was received as of December 31, 2008, to provide ongoing working capital. The remaining balance of the notes was received during the first quarter of 2009. As of May 4, 2009, the Company amended and restated the promissory notes issued in November 2008. The amended and restated promissory notes provide for an aggregate principal amount of up to $520,000. We believe the funds available to us outside of the Trust Account ($6,494 as of March 31, 2009), and the remaining proceeds from the amended and restated notes by the Initial Stockholders, will be sufficient to allow us to consummate the liquidation and distribution process.
Off-Balance Sheet Arrangements
Options and warrants issued in conjunction with our initial public offering are equity linked derivatives and accordingly represent off-balance sheet arrangements. The options and warrants meet the scope exception in paragraph 11(a) of Statement of Financial Accounting Standards 133 "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133") and are accordingly not accounted for as derivatives for purposes of SFAS 133, but instead are accounted for as equity. See Note 4 to the financial statements for more information.
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