x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934.
|
Delaware
|
91-1689591
|
(State
or other jurisdiction of
incorporation
or organization)
|
(I.R.S.
Employer
Identification
No.)
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Large
accelerated filer o
|
Accelerated
filer o
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Non-accelerated
filer o (Do not check if
a smaller reporting company)
|
Smaller
reporting company x
|
Title
|
Shares
outstanding as of November 2, 2009
|
Common
Stock, par value $0.001
|
41,098,270
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3
|
|
3
|
|
3
|
|
4
|
|
5
|
|
6
|
|
11
|
|
17
|
|
17
|
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17
|
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17
|
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18
|
|
20
|
|
21
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Financial
Statements
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September
30,
2009
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December 31,
2008
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|||||||
ASSETS
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||||||||
Current
Assets
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||||||||
Cash
and cash equivalents
|
$
|
1,946,908
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$
|
6,363,243
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||||
Accounts
receivable
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240,363
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177,253
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||||||
Interest
and other receivables
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6,282
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1,157
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||||||
Prepaid
expenses and other assets
|
285,807
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286,539
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||||||
Total
current assets
|
2,479,360
|
6,828,192
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||||||
Property
and Equipment — net of accumulated depreciation of $1,245,400 and
$1,289,844, respectively
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555,364
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790,947
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||||||
Intangible
assets — net of accumulated amortization of $493,671 and $465,724,
respectively
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564,359
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557,639
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||||||
Restricted
cash
|
473,711
|
473,711
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||||||
$
|
4,072,794
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$
|
8,650,489
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|||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||
Current
Liabilities
|
||||||||
Accounts
payable
|
$
|
26,102
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$
|
238,701
|
||||
Accrued
liabilities
|
633,277
|
668,694
|
||||||
Current
portion of term loan
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—
|
87,850
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||||||
Total
current liabilities
|
659,379
|
995,245
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||||||
Deferred
rent
|
271,790
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310,010
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||||||
Long-term
portion of term loan
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—
|
23,269
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||||||
Total
liabilities
|
931,169
|
1,328,524
|
||||||
Commitments
and Contingencies
|
||||||||
Stockholders’
Equity
|
||||||||
Preferred
stock, authorized 5,000,000 shares, $.01 par value, none issued or
outstanding
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—
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—
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||||||
Common
stock, authorized 100,000,000 shares, $.001 par value 41,098,270 and
41,130,270 issued and outstanding as of September 30, 2009, and
December 31, 2008, respectively
|
41,098
|
41,130
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||||||
Additional
paid-in capital
|
72,138,140
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71,255,901
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||||||
Accumulated
deficit
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(69,037,613
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)
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(63,975,066
|
)
|
||||
Total
stockholders’ equity
|
3,141,625
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7,321,965
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||||||
$
|
4,072,794
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$
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8,650,489
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Three
months ended
September
30,
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Nine
months ended
September 30,
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|||||||||||||||
2009
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2008
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2009
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2008
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|||||||||||||
Revenues
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||||||||||||||||
Royalty
income
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$
|
261,651
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$
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236,308
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$
|
664,212
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$
|
781,435
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||||||||
Total
revenues
|
261,651
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236,308
|
664,212
|
781,435
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||||||||||||
Operating
expenses
|
||||||||||||||||
Marketing
and selling
|
54,351
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116,840
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200,402
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545,579
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||||||||||||
Research
and development
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572,189
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2,307,103
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2,187,626
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4,387,636
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||||||||||||
General
and administrative
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1,220,745
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947,684
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3,347,279
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3,242,614
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||||||||||||
1,847,285
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3,371,627
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5,735,307
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8,175,829
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|||||||||||||
Facility
lease termination
|
||||||||||||||||
Gain
from lease buyout
|
—
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(4,100,000
|
)
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—
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(4,100,000
|
)
|
||||||||||
Expenses
related to relocation and lease buyout
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—
|
116,867
|
—
|
116,867
|
||||||||||||
Total
facility lease buyout
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—
|
(3,983,133
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)
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—
|
(3,983,133
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)
|
||||||||||
Total
operating (revenue) expenses
|
1,847,285
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(611,506
|
)
|
5,735,307
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4,192,696
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|||||||||||
Income
(loss) from operations
|
(1,585,634)
|
) |
847,814
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(5,071,095)
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(3,411,261
|
)
|
||||||||||
Other
income (expense)
|
||||||||||||||||
Interest
income
|
948
|
45,858
|
12,060
|
205,530
|
||||||||||||
Interest
expense
|
—
|
(3,393
|
)
|
(3,512
|
)
|
(11,565
|
)
|
|||||||||
Other
|
—
|
91
|
—
|
1,329
|
||||||||||||
Total
other income
|
948
|
42,556
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8,548
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195,294
|
||||||||||||
Net
(loss) income
|
$
|
(1,584,686
|
)
|
$
|
890,370
|
$
|
(5,062,547
|
)
|
$
|
(3,215,967
|
)
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|||||
Net
(loss) income per share, basic and diluted
|
$
|
(0.04
|
)
|
$
|
.02
|
$
|
(0.12
|
)
|
$
|
(0.08
|
)
|
|||||
Shares
used in computing basic net (loss) income per share
|
41,098,270
|
41,130,270
|
41,098,270
|
41,110,684
|
||||||||||||
Shares
used in computing diluted net (loss) income per share
|
41,098,270
|
41,561,623
|
41,098,270
|
41,110,684
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Nine
months ended
September 30,
|
||||||||
2009
|
2008
|
|||||||
Cash
flows from operating activities:
|
||||||||
Net
loss
|
$
|
(5,062,547
|
)
|
$
|
(3,215,967
|
)
|
||
Reconciliation
of net loss to net cash used in operating activities
|
||||||||
Depreciation
and amortization
|
330,529
|
312,064
|
||||||
Write-off
of intangible assets
|
86,681
|
38,424
|
||||||
(Gain)
on sale of equipment
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(14,016
|
)
|
—
|
|||||
Share-based
compensation for employee services
|
962,596
|
894,327
|
||||||
Increase
(decrease) in cash resulting from changes in assets and
liabilities
|
||||||||
Accounts
and other receivables
|
(68,235
|
)
|
(18,298
|
)
|
||||
Prepaid
expenses and other current assets
|
732
|
99,806
|
||||||
Accounts
payable and accrued expenses
|
(451,860
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)
|
(281,049
|
)
|
||||
Net
(cash used) in operating activities
|
(4,216,120
|
)
|
(2,170,693
|
)
|
||||
Cash
flows from investing activities:
|
||||||||
Purchase
of equipment and furniture
|
(95,419
|
)
|
(2,615
|
)
|
||||
Proceeds
from insurance settlement
|
85,267
|
—
|
||||||
Proceeds
from sale of fixed assets
|
80,000
|
—
|
||||||
Patent
and technology rights payments
|
(158,912
|
)
|
(159,832
|
)
|
||||
Restricted
cash
|
—
|
(564,000
|
)
|
|||||
Net
(cash used) by investing activities
|
(89,064
|
)
|
(726,447
|
)
|
||||
Cash
flows from financing activities:
|
||||||||
Payments
on term loan
|
(111,119
|
)
|
(59,331
|
)
|
||||
Proceeds
from exercise of common stock options and warrants
|
(32
|
)
|
40,086
|
|||||
Net
(cash used) by financing activities
|
(111,151
|
)
|
(19,245
|
)
|
||||
Net
(decrease) in cash
|
(4,416,335
|
)
|
(2,916,385
|
)
|
||||
Cash
at beginning of period
|
6,363,243
|
11,825,371
|
||||||
Cash
at end of period
|
$
|
1,946,908
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$
|
8,908,986
|
||||
Cash
paid during the period for interest
|
$
|
2,165
|
$
|
10,502
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
|||||||||||||||
Functions
|
2009
|
2008
|
2009
|
2008
|
||||||||||||
Marketing
and selling
|
$
|
36,426
|
$
|
10,139
|
$
|
49,097
|
$
|
53,219
|
||||||||
Research
and development
|
210,751
|
95,731
|
357,172
|
267,451
|
||||||||||||
General
and administrative
|
139,791
|
172,580
|
556,327
|
573,657
|
||||||||||||
Total
|
$
|
386,968
|
$
|
278,450
|
$
|
962,596
|
$
|
894,327
|
Three
months ended
September 30,
|
Nine
months ended
September 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Weighted-average
number shares – basic
|
41,098,270
|
41,130,270
|
41,098,270
|
41,110,684
|
||||||||||||
Effect
of dilutive securities:
|
||||||||||||||||
Stock
options
|
—
|
83,431
|
—
|
—
|
||||||||||||
Warrants
|
—
|
347,922
|
—
|
—
|
||||||||||||
Weighted-average
shares - diluted
|
41,098,270
|
41,561,623
|
41,098,270
|
41,110,684
|
2009
|
2008
|
|||||||
Assumed
exercise of stock options
|
5,148,193
|
4,352,512
|
||||||
Assumed
conversion of warrants
|
2,226,550
|
3,171,399
|
||||||
Total
|
7,374,743
|
7,523,911
|
Issue
Date
|
Issued
Warrants
|
Exercise
Price
|
Term
|
Outstanding
Warrants
|
Expiration
Date
|
|||||||||
September 30, 2002
|
750,000
|
$
|
0.50
|
10 years
|
750,000
|
September 30, 2012
|
||||||||
February 8, 2005
|
75,000
|
5.00
|
5
years
|
75,000
|
February
7, 2010
|
|||||||||
April
21, 2006
|
11,000
|
7.50
|
5
years
|
11,000
|
April
20, 2011
|
|||||||||
December
4, 2007
|
1,390,550
|
2.10
|
5
years
|
1,390,550
|
December
3, 2012
|
|||||||||
Grand
Total
|
2,226,550
|
2,226,550
|
Period
|
Monthly Basic Rental - Total
Premises
|
|||
November
1, 2009 – August 31, 2010
|
$25,684.60 | |||
September
1, 2010 – October 31, 2010
|
$26,444.60 | |||
November
1, 2010 – August 31, 2011
|
$26,444.60 | |||
September
1, 2011 – August 31, 2012
|
$27,249.67 | |||
September
1, 2012 – August 31, 2013
|
$28,009.67 | |||
September
1, 2013 – August 31, 2014
|
$28,904.13 | |||
September
1, 2014 – August 31, 2015
|
$29,775.21 | |||
September
1, 2015 – January 31, 2016
|
$30,669.67 |
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations.
|
Controls
and Procedures
|
Legal
Proceedings
|
Risk
Factors
|
Other
Information
|
Period
|
Monthly Basic Rental - Total
Premises
|
|||
November
1, 2009 – August 31, 2010
|
$25,684.60 | |||
September
1, 2010 – October 31, 2010
|
$26,444.60 | |||
November
1, 2010 – August 31, 2011
|
$26,444.60 | |||
September
1, 2011 – August 31, 2012
|
$27,249.67 | |||
September
1, 2012 – August 31, 2013
|
$28,009.67 | |||
September
1, 2013 – August 31, 2014
|
$28,904.13 | |||
September
1, 2014 – August 31, 2015
|
$29,775.21 | |||
September
1, 2015 – January 31, 2016
|
$30,669.67 |
Exhibits
|
Incorporated
by Reference
|
||||||||||||||||||||
Exhibit No.
|
Description
|
Filed
Herewith
|
Form
|
Exhibit No.
|
File No.
|
Filing Date
|
||||||||||||||
10.1
|
Form
of Director Indemnification Agreement dated May 26, 2009
|
8-K
|
10.1
|
09860027
|
5/29/2009
|
|||||||||||||||
10.2
|
Form
of Officer Indemnification Agreement dated May 26, 2009
|
8-K
|
10.2
|
09860027
|
5/29/2009
|
|||||||||||||||
10.3
|
Separation
and Release of Claims Agreement dated August 28, 2009, between Bruce S.
Morra and the Company
|
X
|
||||||||||||||||||
10.4
|
Letter
Agreement Regarding Separation and Release of Claims Agreement dated
September 9, 2009, between Bruce S. Morra and the Company
|
X
|
||||||||||||||||||
10.5
|
Letter
Agreement Regarding Employment dated October 28, 2009, between Stephen J.
Turner and the Company, and between Richard M. Levy and the
Company
|
8-K
|
10.1
|
091152300
|
11/3/2009
|
|||||||||||||||
10.6
|
First
Amendment to Lease dated November 5, 2009, between Arden Realty Limited
Partnership and the Company
|
X
|
||||||||||||||||||
31.1
|
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of. 2002
|
X
|
||||||||||||||||||
31.2
|
Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
X
|
||||||||||||||||||
32.1
|
Certification
of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
|
X
|
||||||||||||||||||
32.2
|
Certification
of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
|
X
|
SCOLR
Pharma, Inc.
|
|||
By:
|
/s/ STEPHEN
J. TURNER
|
||
Date:
November 6, 2009
|
Stephen
J. Turner
|
||
President
and Chief Executive Officer
|
|||
(Principal
Executive Officer)
|
By:
|
/s/ RICHARD
M. LEVY
|
||
Date:
November 6, 2009
|
Richard
M. Levy
|
||
Chief
Financial Officer and Vice President - Finance
|
|||
(Principal
Financial Officer)
|
Incorporated
by Reference
|
||||||||||||||||||||
Exhibit No.
|
Description
|
Filed
Herewith
|
Form
|
Exhibit No.
|
File No.
|
Filing Date
|
||||||||||||||
10.1
|
Form
of Director Indemnification Agreement dated May 26, 2009
|
8-K
|
10.1
|
09860027
|
5/29/2009
|
|||||||||||||||
10.2
|
Form
of Officer Indemnification Agreement dated May 26, 2009
|
8-K
|
10.2
|
09860027
|
5/29/2009
|
|||||||||||||||
10.3
|
Separation
and Release of Claims Agreement dated August 28, 2009, between Bruce S.
Morra and the Company
|
X
|
||||||||||||||||||
10.4
|
Letter
Agreement Regarding Separation and Release of Claims Agreement dated
September 9, 2009, between Bruce S. Morra and the Company
|
X
|
||||||||||||||||||
10.5
|
Letter
Agreement Regarding Employment dated October 28, 2009, between Stephen J.
Turner and the Company, and between Richard M. Levy and the
Company
|
8-K
|
10.1
|
091152300
|
11/3/2009
|
|||||||||||||||
10.6
|
First
Amendment to Lease dated November 5, 2009, between Arden Realty Limited
Partnership and the Company
|
X
|
||||||||||||||||||
31.1
|
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of. 2002
|
X
|
||||||||||||||||||
31.2
|
Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
X
|
||||||||||||||||||
32.1
|
Certification
of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
|
X
|
||||||||||||||||||
32.2
|
Certification
of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
|
X
|