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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File No. 001-32157
 ADVENTRX Pharmaceuticals, Inc.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    84-1318182(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)6725 Mesa Ridge Road, Ste 100, San Diego, CA
    
    92121(Address of principal executive offices)
    
    (Zip Code)
 (858) 552-0866  (Registrants telephone number, including area code)
  Title of each class:
    
    Name of each exchange on which registered:Common Stock, par value $0.001 per share
    
    NYSE Amex
 None
 YES o NO þ
 YES o NO þ
 þ o
 YES
o NO o
 þ
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller Reporting Company þ
 o þ




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Table Of Contents
 PageForward-Looking Statements
    
    
    iItem 1. Business
    
    
    1Item 1A. Risk Factors
    
    
    15Item 1B. Unresolved Staff Comments
    
    
    38Item 2. Properties
    
    
    38Item 3. Legal Proceedings
    
    
    38Item 4. [Reserved]
    
    
    38PART II
    
    
    39Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
    
    
    39Item 6. Selected Financial Data
    
    
    40Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    40Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    50Item 8. Financial Statements and Supplementary Data
    
    
    50Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    50Item 9A(T). Controls and Procedures
    
    
    50Item 9B. Other Information
    
    
    51PART III
    
    
    52Item 10. Directors, Executive Officers and Corporate Governance
    
    
    52Item 11. Executive Compensation
    
    
    57Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    67Item 13. Certain Relationships and Related Transactions, and Director Independence
    
    
    69Item 14. Principal Accounting Fees and Services
    
    
    73PART IV
    
    
    73Item 15. Exhibits and Financial Statement Schedules
    
    
    73SIGNATURES
    
    
    80Exhibit 10.45Exhibit 10.59Exhibit 10.63Exhibit 10.65Exhibit 21.1Exhibit 23.1Exhibit 31.1Exhibit 31.2Exhibit 32.1




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Forward-Looking Statements
 This Annual Report on Form 10-K , particularly in Item 1 Business, and Item 7 Managements
Discussion and Analysis of Financial Condition and Results of Operations, and the documents
incorporated by reference, 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. All statements, other than statements of historical fact, are statements that could be
deemed forward-looking statements, including, but not limited to, statements regarding our business
strategy, expectations and plans, our objectives for future operations, including product
development and acquisition, and our future financial position. When used in this report, the words
believe, may, could, will, estimate, continue, anticipate, intend, expect,
indicate and similar expressions are intended to identify forward-looking statements.
 We have based these forward-looking statements on our current expectations and projections
about future events and trends that we believe may affect our financial condition, results of
operations, business strategy, short-term and long-term business operations and objectives, and
financial needs. These forward-looking statements are subject to risks
and uncertainties that could cause our actual results to differ materially from those reflected in
these forward-looking statements. Factors that could cause or contribute to such differences
include, but are not limited to those described in Item 1A Risk Factors of this report. Except
as required by law, we do not intend to update the forward-looking statements discussed in this
report publicly or to update the reasons actual results could differ materially from those
anticipated in these forward-looking statements, even if new information becomes available in the
future.
 In light of these risks and uncertainties and our assumptions, the forward-looking events and
circumstances discussed in this report and in the documents incorporated in this report may not
occur and actual results could differ materially and adversely from those anticipated or implied in
such forward-looking statements. Accordingly, you are cautioned not to place undue reliance on such
forward-looking statements.
  -i-




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Item 1. Business
 Overview
  ® ®
 
    
    reducing the incidence and severity of adverse effects; and
 
    
    improving their pharmacoeconomics and convenience to healthcare practitioners and
patients.
  Business Strategy
  
    
    Seek regulatory approval for ANX-530 in the U.S.In December 2009, we submitted an
NDA for ANX-530 to the FDA. In March 2010, we announced that we had received a
refusal-to-file letter from the FDA. We have requested a face-to-face meeting with the
FDA to understand its requirements and define the path to a successful filing of the
ANX-530 NDA at the earliest possible time.
 
    
    Seek regulatory approval for ANX-514 in the U.S.We have assembled an expert team of
individuals and contract organizations with highly specific and relevant backgrounds to
assist us in evaluating the data from our bioequivalence study of ANX-514. We expect
to meet with the FDA in the summer of 2010 to discuss our analyses of the
bioequivalence study data.
 
    
    Establish highly leverageable sales and marketing capabilities in the U.S.The
nature of the oncology marketplace in general, and the anticipated target audience for
our product candidates in particular, are relatively concentrated. Accordingly, we
believe a meaningful portion of the U.S. markets for our product candidates can be
accessed through an experienced sales force that targets key constituents of the
treatment/product-selection decision-making process. In addition, we will
evaluate opportunities to leverage an existing sales force by adding complementary
products with a similar target audience. However, we remain receptive to partnering
our product candidates in the U.S. if presented with terms that are sufficiently
attractive.
  -1-




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
    
    Partner with leading organizations to develop and market ANX-530 and ANX-514 outside
the U.S.We plan to draw on the development, regulatory and commercial expertise of
other companies in instances where we believe our product candidates would benefit from
such expertise. In addition, if we determine that the commercial potential of our
product candidates is best realized through an established sales organization, whether
within or outside the U.S., we may, and for markets outside the U.S., we plan to,
commercialize products for which we obtain regulatory approval through a variety of
licensing, collaboration and distribution arrangements with other pharmaceutical and
biotechnology companies. For example, in March 2009, we entered into a license
agreement with Shin Poong Pharmaceutical Co., Ltd. pursuant to which we granted Shin
Poong an exclusive license to make use and sell ANX-514 in South Korea.
 
    
    Pursue additional indications and commercial opportunities for ANX-530 and ANX-514
independently and through collaborations.We may increase the value of our product
candidates by seeking approval for label changes and pursuing other commercial
opportunities. For example, we or a future partner may conduct clinical or nonclinical
studies that seek to differentiate further ANX-530 and ANX-514 from Navelbine and
Taxotere, respectively.
 
    
    Acquire and develop new and improved formulations of currently marketed products.
We may pursue development of novel formulations of other currently approved products, whether for the treatment of cancer or
other diseases or conditions, that we believe can be improved, the U.S. markets for
which are relatively concentrated and to which we can apply our operational
capabilities.
 Oncology Focus
    Our Lead Product Candidates  ANX-530 (vinorelbine injectable emulsion) and ANX-514 (docetaxel
injectable emulsion)
 Opportunities for New Formulations
   -2-




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Regulatory Strategy
    Commercialization Strategy
   -3-




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HCPCS Product Codes and Reimbursement
     ANX-530 (vinorelbine injectable emulsion)
 Background; Limitations of Current Formulations
     -4-




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ANX-530 NDA Submission and FDA Refusal-to-File Letter
     Market and Opportunity
    -5-




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FDA Acceptance of Brand Name Exelbine
  ANX-514 (docetaxel injectable emulsion)
 Background; Limitations of Taxotere
    Nonclinical Efficacy and Safety
   -6-




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Bioequivalence Study
    Market and Opportunity
  
     -7-




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Prior Cost-Containment and Fundraising Activities
 ®
   Competition
   -8-




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Manufacturing
   -9-




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Intellectual Property
 ANX-530 (vinorelbine injectable emulsion)
  ANX-514 (docetaxel injectable emulsion)
      -10-




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Research and Development
  Licensing Agreement
 SD Pharmaceuticals
  
    
    For ANX-530, vinca alkaloid intravenous emulsion formulation for cancer
treatment and any other disease indication.
 
    
    For ANX-514, docetaxel intravenous emulsion formulation for cancer treatment
and any other disease indication.
 Government Regulations
    -11-




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FDA Approval Process
       -12-




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Section 505(b)(2) New Drug Applications
    Other Regulatory Requirements
   -13-




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Employees
    -14-




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Formation and Subsidiaries
  
 Item 1A. Risk Factors
  RISKS RELATED TO OUR BUSINESS
 Risks Related to Our Capital Requirements, Finances and Operations
 We have incurred losses since our inception, we expect our operating expenses to continue to
exceed our revenues for the foreseeable future and we may never generate revenues sufficient to
achieve profitability.
  The success of our business currently is dependent primarily on the success of ANX-530 and
ANX-514 and we cannot be certain these product candidates will receive regulatory approval or be
successfully commercialized.
   -15-




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Our financial resources are limited, we will need to obtain additional funding to pursue our
business strategy and we may not be able to obtain such funding on a timely basis or on
commercially reasonable terms, if at all.
   
    
    the costs of seeking regulatory approval for ANX-530 and ANX-514, including any
bioequivalence or clinical studies, process development, scale-up and other
manufacturing and stability activities, or other work required to achieve such
approval, as well as the timing of such activities and approval;
 
    
    the timing and terms of any collaborative, licensing and other strategic
arrangements that we may establish;
 
    
    the costs related to developing, acquiring and/or contracting for sales, marketing
and distribution capabilities and regulatory compliance capabilities, most immediately
with respect to ANX-530;
 
    
    the extent to which we invest in or acquire new technologies, product candidates,
products or businesses;
 
    
    the scope, prioritization and number of development and/or commercialization
programs we pursue and the rate of progress and costs with respect to such programs;
 
    
    the extent to which we will need to rebuild our workforce, which currently consists
of three full-time employees and one part-time employee, and the cost involved in
recruiting, training and incentivizing new employees;
 
    
    the effect of competing technological and market developments; and
 
    
    the cost involved in establishing, enforcing or defending patent claims and other
intellectual property rights.
    -16-




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Our ability to raise capital may be limited by applicable laws and regulations.
      -17-




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Our ability to raise capital may be limited by contractual restrictions.
  Raising additional capital may cause dilution to our existing stockholders, require us to
relinquish proprietary rights or restrict our operations.
   -18-




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We will need to increase the size of our organization, and we may experience difficulties in
attracting and retaining qualified personnel and managing growth.
   We may not be able to manage our business effectively if we are unable to retain key personnel.
  If we are unable to raise sufficient additional capital, we may be forced to reduce our current
and/or planned development and commercialization activities, partner our product candidates or
products at inopportune times or pursue less expensive but higher-risk development and
commercialization paths, which we have done in the past.
   -19-




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The use of our net operating loss carry forwards and research and development tax credits may be
limited.
   If we fail to maintain an effective system of internal control over financial reporting and
disclosure controls and procedures, we may not be able to accurately report our financial results.
As a result, current and potential investors could lose confidence in our financial reporting,
which could harm our business and have an adverse effect on our stock price.
    -20-




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Our operations might be interrupted by the occurrence of a natural disaster or other catastrophic
event.
  Risks Related to Drug Development and Commercialization
 Further testing and/or validation of our product candidates and related manufacturing processes may
be required and regulatory approval may be delayed or denied, which would limit or prevent us from
marketing our product candidates and significantly impair our ability to generate revenues.
    -21-




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We may not achieve our projected development and commercialization goals in the time frames we
announce. Delays in the commencement or completion of nonclinical testing, bioequivalence or
clinical trials or manufacturing, regulatory or launch activities could result in increased costs
to us and delay or limit our ability to generate revenues.
   
    
    delays in reaching agreement on acceptable terms with prospective CROs and contract
manufacturing organizations, or CMOs, the terms of which can be subject to extensive
negotiation and may vary significantly among different CROs and CMOs;
 
    
    failures on the part of our CROs and CMOs in developing procedures and protocols or
otherwise conducting activities on timeframes requested by us;
 
    
    changes in regulatory requirements or other standards or guidance relating to
nonclinical testing, including testing of pharmaceutical products in animals;
 
    
    a lack of availability of capacity at our CMOs, or of the component materials,
including the API or related materials, including vials and stoppers, necessary to
manufacture our product candidates or products; and
 
    
    unforeseen results of nonclinical testing that require us to amend study or test
designs or delay future testing or bioequivalence or clinical trials and related
regulatory filings.
  
    
    obtaining regulatory approval to commence a trial;
 
    
    identifying appropriate trial sites and reaching agreement on acceptable terms with
prospective CROs, trial sites and investigators, the terms of which can be subject to
extensive negotiation and may vary significantly among different CROs, trial sites and
investigators;
 
    
    manufacturing sufficient quantities of a product candidate;
  -22-




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
    
    obtaining IRB approval to conduct a trial at a prospective site;
 
    
    recruiting and enrolling patients to participate in trials for a variety of reasons,
including competition from other clinical trials for the same indication as our product
candidates and the perception that the design of a trial or the proposed treatment
regimen is less beneficial to patients than available alternatives; and
 
    
    retaining patients who have initiated a trial but may be prone to withdraw due to
side effects from the therapy, lack of efficacy or personal issues, or who are lost to
further follow-up.
   
    
    failure to conduct the trial in accordance with regulatory requirements or the
trials protocol;
 
    
    inspection of trial operations or trial sites by the FDA or other regulatory
authorities resulting in the imposition of a clinical hold;
 
    
    unforeseen safety issues; or
 
    
    lack of adequate funding to continue the trial.
    -23-




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Positive results in our nonclinical testing and/or bioequivalence trials do not ensure that future
bioequivalence or clinical trials will be successful or that our product candidates will receive
the regulatory approvals necessary for their commercialization.
       -24-




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We currently have no sales or marketing capability and our failure to develop these and related
capabilities internally or contract with third parties to perform these activities successfully
could delay and/or limit our ability to generate revenues in the event one or more of our product
candidates obtains regulatory approval.
   If any of our product candidates for which we receive regulatory approval do not achieve broad
market acceptance (including as a result of our inability to differentiate our products from
competitor products or promote any such differences or as a result of failing to obtain
reimbursement rates for our products that make our products competitive from the healthcare
providers perspective), the revenues we generate from their sales will be limited and our business
may not be profitable.
  
    
    our products perceived advantages over existing treatment methods (including
relative convenience and ease of administration and prevalence and severity of any
adverse side effects);
 
    
    claims or other information (including limitations or warnings) in our products
approved labeling;
 
    
    the resources we devote to marketing our products and restrictions on promotional
claims we can make with respect to our products;
 
    
    reimbursement and coverage policies of government and other third-party payors;
 
    
    pricing and cost-effectiveness;
  -25-




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
    
    in the U.S., the ability of group purchasing organizations (including distributors
and other network providers) to sell our products to their constituencies;
 
    
    the establishment and demonstration in the medical community of the safety and
efficacy of our products and our ability to provide acceptable evidence of safety and
efficacy;
 
    
    availability of alternative treatments; and
 
    
    the prevalence of off-label substitution of chemically equivalent products or
alternative treatments.
    We do not have manufacturing capabilities and are dependent on single source manufacturers and
suppliers for certain of our product candidates and their component materials, and the loss of any
of these manufacturers or suppliers, or their failure to provide us with an adequate supply of
products or component materials on commercially acceptable terms, or at all, could harm our
business.
    -26-




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-27-




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We rely significantly on third parties to conduct our nonclinical testing and bioequivalence and
clinical studies and other aspects of our development programs and if those third parties do not
satisfactorily perform their contractual obligations or meet anticipated deadlines, the development
of our product candidates could be adversely affected.
    If we receive regulatory approval for one or more of our product candidates, we may face
competition from generic products, which could exert downward pressure on the pricing and market
share of our products and limit our ability to generate revenues.
   -28-




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If we receive regulatory approval for one or more of our product candidates, we may face
competition for our products from lower priced products from foreign countries that have placed
price controls on pharmaceutical products.
  Even if we receive regulatory approval for one or more of our product candidates, they may still
face future development and regulatory difficulties that could materially and adversely affect our
business, financial condition and results of operations and cause our stock price to decline.
  
    
    issue warning letters or untitled letters;
 
    
    impose civil or criminal penalties;
 
    
    suspend or withdraw regulatory approval;
 
    
    suspend or terminate any ongoing bioequivalence or clinical trials;
 
    
    refuse to approve pending applications or supplements to approved applications;
 
    
    impose restrictions or affirmative obligations on our or our CMOs operations,
including costly new manufacturing requirements;
 
    
    close the facilities of a CMO; or
 
    
    seize or detain products or require a product recall.
 Even if one or more of our product candidates receive regulatory approval in the U.S., we may never
receive approval or commercialize our products outside of the U.S., which would limit our ability
to realize the full market potential of our product candidates.
   -29-




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Our product candidates may cause undesirable side effects or have other properties that could delay
or prevent their regulatory approval or commercialization.
   
    
    regulatory authorities may require the addition of labeling statements, such as a
black box warning or a contraindication;
 
    
    regulatory authorities may withdraw their approval of the product;
 
    
    we may be required to change the way the product is administered, conduct additional
clinical trials or change the labeling of the product; and
 
    
    our reputation may suffer.
  Risks Related to Our Intellectual Property
 Our success will depend on patents and other protection we obtain on our product candidates and
proprietary technology.
  
    
    obtain and maintain patent protection with respect to our products;
 
    
    prevent third parties from infringing upon our proprietary rights;
 
    
    maintain trade secrets;
 
    
    operate without infringing upon the patents and proprietary rights of others; and
 
    
    obtain appropriate licenses to patents or proprietary rights held by third parties
if infringement would otherwise occur, both in the U.S. and in foreign countries.
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Exclusivity for our emulsion-formulation product candidates may be limited because of the nature of
patent protection available for these candidates.
  If we are sued for infringing the proprietary rights of third parties, it will be costly and time
consuming, and an unfavorable outcome would have an adverse effect on our business.
    -31-




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
    
    infringement and other intellectual property claims which, with or without merit,
may be expensive and time consuming to litigate and may divert our managements
attention from our core business;
 
    
    substantial damages for infringement, including the potential for treble damages and
attorneys fees, which we may have to pay if a court decides that the product at issue
infringes on or violates the third partys rights;
 
    
    a court prohibiting us from selling or licensing the product unless the third party
licenses its product rights to us, which it may not be required to do;
 
    
    if a license is available from the third party, we may have to pay substantial
royalties, fees and/or grant cross-licenses to our products; and
 
    
    redesigning our products or processes so they do not infringe, which may not be
possible or may require substantial funds and time.
   RISKS RELATED TO OUR INDUSTRY
 We expect intense competition in the marketplace for each of our products, if any are approved.
   -32-




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We are subject to uncertainty relating to healthcare reform measures and reimbursement policies
that, if not favorable to our products, could hinder or prevent our products commercial success.
  
    
    our ability to set a price we believe is fair for our products;
 
    
    our ability to generate revenues or achieve or maintain profitability;
 
    
    the future revenues and profitability of our potential customers, suppliers and
collaborators; and
 
    
    the availability to us of capital.
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We face potential product liability exposure and, if successful claims are brought against us, we
may incur substantial liability for a product or product candidate and may have to limit its
commercialization. In the future, we anticipate that we will need to obtain additional or increased
product liability insurance coverage and it is uncertain that such increased or additional
insurance coverage can be obtained on commercially reasonable terms.
  
    
    decreased demand for our products;
 
    
    impairment of our business reputation;
 
    
    withdrawal of bioequivalence or clinical trial participants;
 
    
    costs of related litigation;
 
    
    substantial monetary awards to patients or other claimants;
 
    
    loss of revenues; and
 
    
    the inability to commercialize our products and product candidates.
    -34-




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RISKS RELATED TO OUR COMMON STOCK
 We currently are not in compliance with NYSE Amex continued listing standards and are at risk of
being delisted from the NYSE Amex equities market.
     If our common stock were delisted and determined to be a penny stock, a broker-dealer may find it
more difficult to trade our common stock and an investor may find it more difficult to acquire or
dispose of our common stock in the secondary market.
   -35-




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The market price of our common stock historically has been and is likely to continue to be
highly volatile.
  
    
    the level of our financial resources;
 
    
    announcements of entry into or consummation of a financing or strategic transaction;
 
    
    changes in the regulatory status of our product candidates, including results of any
bioequivalence and clinical trials and other research and development programs;
 
    
    FDA or international regulatory actions and regulatory developments in the U.S. and
foreign countries;
 
    
    announcements of new products or technologies, commercial relationships or other
events (including bioequivalence and clinical trial results and regulatory events and
actions) by us or our competitors;
 
    
    market conditions in the pharmaceutical, biopharmaceutical, specialty pharmaceutical
and biotechnology sectors;
 
    
    developments concerning intellectual property rights generally or those of us or our
competitors;
 
    
    litigation or public concern about the safety of our products or product candidates;
 
    
    changes in securities analysts estimates of our financial performance or deviations
in our business and the trading price of our common stock from the estimates of
securities analysts;
 
    
    events affecting any future collaborations, commercial agreements and grants;
 
    
    fluctuations in stock market prices and trading volumes of similar companies;
 
    
    sales of large blocks of our common stock, including sales by our executive
officers, directors and significant stockholders or pursuant to shelf or resale
registration statements that register shares of our common stock that may be sold by
certain of our current or future stockholders;
 
    
    discussion of us or our stock price by the financial and scientific press and in
online investor communities;
 
    
    commencement of delisting proceedings by the NYSE Amex;
 
    
    additions or departures of key personnel; and
 
    
    changes in third-party payor reimbursement policies.
  Sales of substantial amounts of our common stock or the perception that such sales may occur could
cause the market price of our common stock to drop significantly, even if our business is
performing well.
   -36-




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Anti-takeover provisions in our charter documents and under Delaware law may make an acquisition of
us, which may be beneficial to our stockholders, more difficult, which could depress our stock
price. Alternatively, prohibitions on anti-takeover provisions in our charter documents may
restrict us from acting in the best interests of our stockholders.
   Because we do not expect to pay dividends with respect to our common stock in the foreseeable
future, you must rely on stock appreciation for any return on your investment.
   -37-




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Item 1B. Unresolved Staff Comments
  
 Item 2. Properties
  
 Item 3. Legal Proceedings
  
 Item 4. [Reserved]
  -38-




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PART II
 
 Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
 Market Information
  Common Stock Price2009
    
    
    2008High
    
    
    Low
    
    
    High
    
    
    LowFirst Quarter
    
    $
    0.18
    
    
    $
    0.09
    
    
    $
    0.64
    
    
    $
    0.36Second Quarter
    
    $
    0.22
    
    
    $
    0.11
    
    
    $
    0.54
    
    
    $
    0.33Third Quarter
    
    $
    0.20
    
    
    $
    0.12
    
    
    $
    0.38
    
    
    $
    0.18Fourth Quarter
    
    $
    0.43
    
    
    $
    0.09
    
    
    $
    0.21
    
    
    $
    0.07
  Dividend Policy
   Recent Sales of Unregistered Securities
     -39-




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Item 6. Selected Financial Data
  
 Item 7. Managements Discussion and Analysis of Financial Condition and Results of
Operations
 The following discussion and analysis of our financial condition and results of operations
should be read in conjunction with the consolidated financial statements and related notes
appearing elsewhere in this report. In addition to historical information, this discussion and
analysis contains forward-looking statements that involve risks, uncertainties, and assumptions.
Our actual results may differ materially from those anticipated in these forward-looking statements
as a result of certain factors, including but not limited to those identified under Item 1A Risk
Factors in this report.
 Overview
    -40-




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Recent Financings
   -41-




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-42-




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Critical Accounting Policies and Estimates
  Revenue Recognition.
   R&D Expenses.
   -43-




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Purchased In-Process Research and Development.
 Share-based Compensation Expenses.
    -44-




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Income Taxes.
  Costs Associated with Exit or Disposal Activities.
 
    
    In October 2008, we completed a work force reduction of nine employees. As a result,
we recorded severance-related charges including salary, payroll taxes and health
benefits of $403,000, of which approximately $384,000 was recorded in R&D and the
remainder in selling, general and administrative, or SG&A. In connection with the
October 2008 reduction in workforce, severance-related charges of $244,000 were
recorded in the fourth quarter of 2008, $120,000 were recorded in the first quarter of
2009, and the remainder were recorded in the second quarter of 2009.
 
    
    In January 2009, we completed a work force reduction of six employees. As a result,
we recorded severance related charges including salary, payroll taxes and health
benefits of $193,000, of which $96,000 was recorded in R&D and the remainder in SG&A.
In connection with the January 2009 reduction in workforce, severance-related charges
of $144,000 were recorded in the first quarter of 2009 and the remainder were recorded
in the second quarter of 2009.
 
    
    In April 2009, we completed a work force reduction of nine employees. As a result,
we recorded severance-related charges including salary, payroll taxes and health
benefits of $190,000, of which $128,000 was recorded in R&D and the remainder in SG&A.
In connection with the April 2009 reduction in workforce, severance-related charges of
$114,000 were recorded in the first quarter of 2009 and the remainder were recorded in
the second quarter of 2009.
 Convertible Instruments.
   -45-




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##### Table of Contents



Results of Operations
    
    
    the number and location of sites included in trials and the rate of site approval
for the trial;
 
    
    the rates of patient recruitment and enrollment;
 
    
    the ratio of randomized to evaluable patients;
 
    
    the availability and cost of reference product in the jurisdiction of each site;
 
    
    the time and cost of process development activities related to our product
candidates;
 
    
    the costs of manufacturing our product candidates;
 
    
    the time and cost of stability studies, including the need to identify critical
parameters, methods to evaluate and test these parameters and validation of such
methods and tests; and
 
    
    the costs, requirements, timing of and the ability to secure regulatory approvals.
    -46-




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##### Table of Contents



Operating ExpensesYears EndedDecember 31,2009
    
    
    2008Research and development
    
    
    56
    %
    
    
    64
    %Selling, general and administrative
    
    
    43
    %
    
    
    35
    %Depreciation and amortization
    
    
    1
    %
    
    
    1
    %Total operating expenses
    
    
    100
    %
    
    
    100
    %
 Comparison of 2009 and 2008
 Revenue .
  R&D Expenses .
 January 1, 2005Years Ended
    
    
    throughDecember 31,
    
    
    December 31,2009
    
    
    2008
    
    
    2009External bioequivalence and clinical trial fees and expenses
    
    $
    603,097
    
    
    $
    3,373,865
    
    
    $
    23,802,576External nonclinical study fees and expenses (1)
    
    
    5,083,474
    
    
    
    10,585,695
    
    
    
    24,028,948Personnel costs
    
    
    779,510
    
    
    
    3,237,158
    
    
    
    10,290,698Stock-based compensation expense
    
    
    41,569
    
    
    
    725,465
    
    
    
    2,925,730Total
    
    $
    6,507,650
    
    
    $
    17,922,183
    
    
    $
    61,047,952
 
 (1)
    
    External nonclinical study fees and expenses include preclinical, research-related
manufacturing, quality assurance and regulatory expenses.  -47-




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##### Table of Contents



Selling, General and Administrative Expenses.
  Interest and Other Income/(Expense).
 Net Loss.
 Liquidity and Capital Resources
    -48-




---



##### Table of Contents



IncreaseDecember 31,
    
    
    (Decrease)
    
    
    December 31,2009
    
    
    During 2009
    
    
    2008Cash
    
    $
    8,667,404
    
    
    $
    (1,182,500
    )
    
    $
    9,849,904Net working capital
    
    $
    6,618,807
    
    
    $
    883,288
    
    
    $
    5,735,519
 Year Ended
    
    
    Change
    
    
    Year EndedDecember 31,
    
    
    Between
    
    
    December 31,2009
    
    
    Periods
    
    
    2008Net cash used in operating activities
    
    $
    (12,616,416
    )
    
    $
    11,171,188
    
    
    $
    (23,787,604
    )Net cash provided by investing activities
    
    
    16,000
    
    
    
    (18,840,769
    )
    
    
    18,856,769Net cash provided by financing activities
    
    
    11,417,916
    
    
    
    11,417,916
    
    
    
    Net decrease in cash
    
    $
    (1,182,500
    )
    
    $
    (3,748,335
    )
    
    $
    (4,930,835
    )
 Operating activities .
 Investing activities .
 Financing activities .
 Management Outlook
    -49-




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##### Table of Contents



Recent Accounting Pronouncements
  
 Item 7A. Quantitative and Qualitative Disclosures About Market Risk
  
 Item 8. Financial Statements and Supplementary Data
  
 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
  
 Item 9A(T). Controls and Procedures
 Disclosure Controls and Procedures
   Changes in Internal Control over Financial Reporting
   -50-




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##### Table of Contents



Managements Report on Internal Control over Financial Reporting
 Internal Control  Integrated Framework Internal Control  Integrated Framework
   
 Item 9B. Other Information
   -51-




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##### Table of Contents



PART III
 
 Item 10. Directors, Executive Officers and Corporate Governance
 DIRECTORS
  Name
    
    Age
    
    Position/Committee Membership*
    
    Director SinceMichael M. Goldberg
    
    51
    
    Audit Committee and Compensation Committee (chair)
    
    2004Odysseas D. Kostas
    
    35
    
    Audit Committee
    
    2010Jack Lief
    
    63
    
    Chair of the Board, Audit Committee (chair) and Compensation Committee
    
    2006Mark J. Pykett
    
    45
    
    Nominating & Governance Committee (chair)
    
    2004Eric K. Rowinsky
    
    53
    
    Nominating & Governance Committee
    
    2008
 
 *
    
    Each of the directors served in the capacity set forth in the table for all of 2009, except
Dr. Kostas who was appointed to the board and the audit committee in February 2010. Dr. Pykett
served on the audit committee during 2009 and until February 2010.  Audit Committee
  Biographical Information and Qualifications of Directors
    -52-




---



##### Table of Contents



Michael M. Goldberg, M.D M.B.A.
 Odysseas D. Kostas, M.D
 Jack Lief
 Mark J. Pykett Ph.D., M.B.A., V.M.D.
  -53-




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##### Table of Contents



Eric K. Rowinsky, M.D.
 Director Arrangements
   -54-




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##### Table of Contents



EXECUTIVE OFFICERS
  Name
    
    Age
    
    PositionBrian M. Culley
    
    38
    
    Chief Executive OfficerPatrick L. Keran
    
    38
    
    President and Chief Operating Officer
 Biographical Information of Executive Officers
 Brian M. Culley, M.A., M.B.A
 Patrick L. Keran, J.D
  -55-




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##### Table of Contents



SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
  CODE OF ETHICS
   -56-




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##### Table of Contents



Item 11. Executive Compensation
 EXECUTIVE COMPENSATION
  Summary Compensation TableNon-Equity
    
    
    NonqualifiedStock
    
    
    Option
    
    
    Incentive Plan
    
    
    Deferred
    
    
    All OtherAwards
    
    
    Awards
    
    
    Compensation
    
    
    Compensation
    
    
    CompensationName and Principal Position
    
    Year
    
    
    Salary
    
    
    Bonus
    
    
    (1)
    
    
    (2)
    
    
    (3)
    
    
    Earnings
    
    
    (4)
    
    
    TotalBrian M. Culley
    
    
    2009
    
    
    $
    316,817
    
    
    
    
    
    
    $
    0
    
    
    $
    215,900
    
    
    $
    225,000
    
    
    
    
    
    
    $
    962
    (5)
    
    $
    758,679Chief Executive Officer
    
    
    2008
    
    
    $
    262,500
    
    
    
    
    
    
    
    
    
    
    $
    102,160
    
    
    
    
    
    
    
    
    
    
    $
    14,398
    
    
    $
    379,058Patrick L. Keran
    
    
    2009
    
    
    $
    290,781
    
    
    
    
    
    
    $
    0
    
    
    $
    215,900
    
    
    $
    225,000
    
    
    
    
    
    
    $
    6,154
    
    
    $
    737,835President and
    
    
    2008
    
    
    $
    231,000
    
    
    
    
    
    
    
    
    
    
    $
    102,160
    
    
    
    
    
    
    
    
    
    
    $
    14,233
    
    
    $
    347,393Chief Operating OfficerMichele L. Yelmene
    
    
    2009
    
    
    $
    102,834
    
    
    
    
    
    
    $
    0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    94,829
    (7)
    
    $
    197,663Former Vice President,
    
    
    2008
    
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/aRegulatory Affairs and
Quality (6)
 (1)
    
    The amounts in this column represent the grant date fair value of a restricted stock unit
award granted to each of the named executive officers on January 30, 2009, calculated in
accordance with the provisions of FASB ASC Topic 718. Mr. Culley received 1,200,000
restricted stock units, Mr. Keran received 850,000 restricted stock units and Ms. Yelmene
received 450,000 restricted stock units. Vesting and settlement of the restricted stock unit
awards were conditioned upon our consummation of a strategic transaction. The grant date fair
value of zero for each of these awards is based on our assessment that achievement of the
vesting condition was not probable (assessed as of the grant date). Assuming 100% probability
of meeting the vesting condition, the value of the restricted stock unit awards as of the
grant date would have been $108,000 for Mr. Culley, $76,500 for Mr. Keran, and $40,500 for Ms.
Yelmene. The restricted stock unit awards granted to Mr. Culley and Mr. Keran were forfeited
by them and cancelled in July 2009 and the restricted stock unit award granted to Ms. Yelmene
was also cancelled in July 2009 in connection with the termination of her employment. As a
result of these cancellations, the officers have not and will not receive any compensation or
pecuniary value from these restricted stock unit awards.(2)
    
    The amounts in this column represent the aggregate grant date fair value of option awards
granted to the named executive officers in 2009 and 2008, respectively, calculated in
accordance with the provisions of FASB ASC Topic 718. For a description of the assumptions
used to calculate the grant date fair value of the option awards granted in 2009, see Note 7
of the Notes to Consolidated Financial Statements contained in this report. For a description
of the assumptions used to calculate the grant date fair value of the option awards granted in
2008, see Note 8 of the Notes to Consolidated Financial Statements contained in our annual
report on Form 10-K for the year ended December 31, 2008.(3)
    
    We paid the amounts set forth in this column pursuant to the terms of our 2009 mid-year
incentive plan. See Narrative to Summary Compensation Table  Short-term Non-equity
Incentive Plan and Employment Retention and Severance Arrangements below for a description of
the material terms of our 2009 mid-year incentive plan.(4)
    
    Except as otherwise indicated, the amounts in this column consist of (a) matching
contributions made pursuant to our tax-qualified 401(k) plan and (b) premiums paid for life insurance policies for the benefit of our executives.(5)
    
    Consists only of the
premiums paid for life insurance policies for the benefit of Mr.
Culley.(6)
    
    Ms. Yelmenes employment with us ended on July 1, 2009. She has served as a consultant to us
since her employment ended pursuant to a consulting agreement, the material terms of which are
described below under Narrative to Summary Compensation Table  Consulting Arrangements with
Michele Yelmene. Compensation information for Ms. Yelmene for 2008 is not included because
she was not a 2008 named executive officer.(7)
    
    Consists of (a) matching contributions pursuant to our 401(k) plan of $4,746, (b) life
insurance premiums of $238, (c) accrued vacation benefits paid in connection with termination
of employment of $30,220, and (d) consulting fees earned of $59,625. 
  -57-




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##### Table of Contents



Narrative Disclosure to Summary Compensation Table
 Base Salary
  Short-term Non-equity Incentive Plan and Employment Retention and Severance Arrangements
  2009 Mid-Year Incentive Plan
 Retention and Severance Arrangements
  -58-




---



##### Table of Contents



2009 Stock Option Awards
    -59-




---



##### Table of Contents



Other Employment Benefits and Arrangements
 Vacation Benefits.
 Other Agreements
 Consulting Arrangements with Michele Yelmene
    -60-




---



##### Table of Contents



Outstanding Equity Awards at Fiscal Year-End 2009
  Outstanding Equity Awards at Fiscal Year-End for Fiscal Year 2009Option Awards
    
    
    Stock AwardsEquityIncentivePlanEquity
    
    
    Awards:Incentive
    
    
    MarketEquity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Plan
    
    
    or PayoutIncentive
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Market
    
    
    Awards:
    
    
    Value ofPlan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Value of
    
    
    Number of
    
    
    UnearnedAwards:
    
    
    
    
    
    
    
    
    
    
    Number
    
    
    Shares
    
    
    Unearned
    
    
    Shares,Number of
    
    
    Number of
    
    
    Number of
    
    
    
    
    
    
    
    
    
    
    of Shares
    
    
    or Units
    
    
    Shares,
    
    
    Units orSecurities
    
    
    Securities
    
    
    Securities
    
    
    
    
    
    
    
    
    
    
    of Units
    
    
    of Stock
    
    
    Units or
    
    
    OtherUnderlying
    
    
    Underlying
    
    
    Underlying
    
    
    
    
    
    
    
    
    
    
    of Stock
    
    
    That
    
    
    Other
    
    
    RightsUnexercised
    
    
    Unexercised
    
    
    Unexercised
    
    
    Option
    
    
    
    
    
    
    That
    
    
    Have
    
    
    Rights
    
    
    ThatOptions
    
    
    Options
    
    
    Unearned
    
    
    Exercise
    
    
    Option
    
    
    Have Not
    
    
    Not
    
    
    That Have
    
    
    Have Not(#)
    
    
    (#)
    
    
    Options
    
    
    Price
    
    
    Expiration
    
    
    Vested
    
    
    Vested
    
    
    Not Vested
    
    
    VestedName
    
    Exercisable
    
    
    Unexercisable
    
    
    (#)
    
    
    ($)
    
    
    Date
    
    
    (#)
    
    
    ($)
    
    
    (#)
    
    
    ($)Brian M. Culley
    
    
    100,000
    
    
    
    
    
    
    
    
    
    
    $
    2.30
    
    
    
    7/13/2015
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    78,333
    (1)
    
    
    1,667
    (1)
    
    
    
    
    
    $
    4.75
    
    
    
    1/30/2016
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    109,375
    (2)
    
    
    40,625
    (2)
    
    
    
    
    
    $
    2.75
    
    
    
    1/11/2017
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,000
    (3)
    
    
    160,000
    (3)
    
    
    
    
    
    $
    0.54
    
    
    
    3/30/2018
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,700,000
    (4)
    
    
    
    
    
    $
    0.13
    
    
    
    7/20/2019
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Patrick L. Keran
    
    
    83,333
    (5)
    
    
    16,667
    (5)
    
    
    
    
    
    $
    2.99
    
    
    
    8/17/2016
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    36,457
    (2)
    
    
    13,543
    (2)
    
    
    
    
    
    $
    2.75
    
    
    
    1/11/2017
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,000
    (3)
    
    
    160,000
    (3)
    
    
    
    
    
    $
    0.54
    
    
    
    3/30/2018
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,700,000
    (4)
    
    
    
    
    
    $
    0.13
    
    
    
    7/20/2019
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Michele L. Yelmene
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 (1)
    
    Subject to accelerated vesting in the event of a change in control, as described below under
Acceleration of Vesting of Stock Options Granted Under 2005 Equity Incentive Plan, this
option vested and became exercisable with respect to 1/4 of the total underlying shares on
January 1, 2007 and vests and becomes exercisable with respect to 1/48 of the total underlying
shares at the end of each successive calendar month thereafter.(2)
    
    Subject to accelerated vesting in the event of a change in control or an involuntary
termination within 24 months of a change in control, as described below under Acceleration of
Vesting of Stock Options Granted Under 2005 Equity Incentive Plan, this option vested and
became exercisable with respect to 1/4 of the total underlying shares subject to the option on
January 1, 2008 and vests and becomes exercisable with respect to 1/48 of the total underlying
shares at the end of each successive month thereafter.(3)
    
    Subject to accelerated vesting in the event of a change in control or an involuntary
termination within 24 months of a change in control, as described below under Acceleration of
Vesting of Stock Options Granted Under 2005 Equity Incentive Plan, this option vested and
became exercisable with respect to 1/5 of the total underlying shares on each of January 1,
2009 and January 1, 2010, and vests and becomes exercisable with respect to 1/5 of the total
underlying shares on each of January 1, 2011, January 1, 2012 and January 1, 2013.(4)
    
    Subject to accelerated vesting in the event of a change in control or an involuntary
termination, as described above under Narrative Disclosure to Summary Compensation Table 
2009 Stock Option Awards, this option vested and became exercisable with respect to 1/4 of
the total underlying shares on January 1, 2010 and vests and becomes exercisable with respect
to 1/4 of the total underlying shares on each of January 1, 2011, January 1, 2012 and
January 1, 2013.(5)
    
    Subject to accelerated vesting in the event of a change in control or an involuntary
termination within 24 months of a change in control, as described below under Acceleration of
Vesting of Stock Options Granted Under 2005 Equity Incentive Plan, this option vested and
became exercisable with respect to 1/4 of the total underlying shares subject to the option on
August 7, 2007 and vests and becomes exercisable with respect to 1/48 of the total underlying
shares at the end of each successive month thereafter.  -61-




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##### Table of Contents



Acceleration of Vesting of Outstanding Stock Options Granted Under 2005 Equity Incentive Plan
    Tax-Qualified Defined Contribution Plan
   -62-




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##### Table of Contents



DIRECTOR COMPENSATION
  Director Compensation for Fiscal Year 2009
 NonqualifiedNon-Equity
    
    
    DeferredFees Earned or
    
    
    Stock
    
    
    
    
    
    
    Incentive Plan
    
    
    Compensation
    
    
    All OtherName
    
    Paid in Cash
    
    
    Awards
    
    
    Option Awards
    
    
    Compensation
    
    
    Earnings
    
    
    Compensation
    
    
    TotalMark N.K. Bagnall(1)
    
    $
    6,495
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    191,952
    (2)
    
    $
    198,447Alexander J. Denner(3)
    
    $
    11,902
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    11,902Michael M. Goldberg
    
    $
    32,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    32.500Jack Lief
    
    $
    54,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    54,000Mark J. Pykett
    
    $
    32,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    32,500Eric K. Rowinsky
    
    $
    26,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    1,050
    (4)
    
    $
    27,550
 (1)
    
    Mr. Bagnall resigned from our board of directors effective August 24, 2009. His resignation was not due to a disagreement with us on any matter relating to
our operations, policies or practices.(2)
    
    This amount consists of
(a) a severance payment of $165,500, (b) a
severance-related health benefit allowance of $18,352, and (c) consulting fees of $8,100.
See Separation and Consulting Services Agreements with Mark N.K. Bagnall below for a description of our employment separation and consulting agreements
with Mr. Bagnall.(3)
    
    Dr. Denner resigned from our board of directors and the compensation committee effective October 16, 2009. His resignation was not due to a disagreement
with us on any matter relating to our operations, policies or practices.(4)
    
    This amount represents fees earned for consulting services provided to us under a consulting agreement with Dr. Rowinsky. See Consulting Services
Agreement with Eric K. Rowinsky below for a description of our consulting services agreement with Dr. Rowinsky. Overview of Non-Employee Director Compensation
 Retainer
  2009 Quarterly Retainer
 Chairperson
    
    
    MemberBoard of Directors
    
    $
    6,250
    
    
    $
    2,500Audit Committee
    
    $
    5,000
    
    
    $
    2,500Compensation Committee
    
    $
    2,500
    
    
    $
    1,250Nominating and Governance Committee
    
    $
    2,500
    
    
    $
    1,250Research and Development Committee
    
    $
    2,500
    
    
    $
    1,250
  -63-




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##### Table of Contents



2010 Quarterly Retainer
 Chairperson
    
    
    MemberBoard of Directors
    
    $
    10,000
    *
    
    $
    5,000Audit Committee
    
    $
    1,875
    
    
    $
    Compensation Committee
    
    $
    875
    
    
    $
    Nominating and Governance Committee
    
    $
    875
    
    
    $
    Research and
Development Committee**
    
    $
    875
    
    
    $
    
 *
    
    If, in the future, our board of directors appoints a lead independent director, such directors
quarterly retainer would be $10,000 per quarter.**
    
    The research and development
committee was disbanded by our board of directors in March 2010. Meeting Fees
    Equity Compensation
  th th
  -64-




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##### Table of Contents



th th
  Separation and Consulting Services Agreements with Mark N.K. Bagnall
    -65-




---



##### Table of Contents



Consulting Services Agreement with Eric K. Rowinsky
   -66-




---



##### Table of Contents



Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
  Beneficial
    
    
    Percent ofName and Address of Beneficial Owner (1)(2)
    
    Ownership (3)
    
    
    ClassMichael M. Goldberg(4)
    
    
    337,110
    
    
    
    *Odysseas D. Kostas(5)
    
    
    22,221
    
    
    
    *Jack Lief(6)
    
    
    238,888
    
    
    
    *Mark J. Pykett(7)
    
    
    296,888
    
    
    
    *Eric K. Rowinsky(8)
    
    
    188,888
    
    
    
    *Brian M. Culley(9)
    
    
    806,875
    
    
    
    *Patrick L. Keran(10)
    
    
    637,290
    
    
    
    *Michele L. Yelmene
    
    
    
    
    
    
    *All directors and executive officers as a group (7 persons) (11)
    
    
    2,528,160
    
    
    
    1
    %
 
 *
    
    Less than 1%(1)
    
    Unless otherwise indicated, the address of each of the listed persons is c/o ADVENTRX
Pharmaceuticals, Inc., 6725 Mesa Ridge Road, Suite 100, San Diego, CA 92121.(2)
    
    We do not know of any person or group of persons that holds 5% or more of our common
stock as of the Evaluation Date.(3)
    
    Beneficial ownership of shares is determined in accordance with the rules of the SEC
and generally includes any shares over which a person exercises sole or shared voting or
investment power, or of which a person has the right to acquire ownership within 60 days of
the Evaluation Date. Except as otherwise noted, each person or entity has sole voting and
investment power with respect to the shares shown. Unless otherwise noted, none of the
shares shown as beneficially owned on this table are subject to pledge. In calculating the
percentage ownership of each person identified in the table, shares underlying options held
by that person that are either currently exercisable or exercisable within 60 days of the
Evaluation Date are deemed outstanding. These shares, however, are not deemed outstanding
for the purposes of computing the percentage ownership of any other individual or entity.
Percentage ownership for each person is based on the number of shares of our common stock
outstanding as of the Evaluation Date, together with the applicable number of shares of
common stock subject to options currently exercisable or exercisable within 60 days of the
Evaluation Date for that person or group of persons.(4)
    
    Consists of (a) 311,110 shares of common stock subject to options currently exercisable
or exercisable within 60 days of the Evaluation Date and (b) 26,000 shares of common stock
held directly by Dr. Goldberg.(5)
    
    Consists of 22,221 shares of common stock subject to options currently exercisable or
exercisable within 60 days of the Evaluation Date.(6)
    
    Consists of 238,888 shares of common stock subject to options currently exercisable or
exercisable within 60 days of the Evaluation Date.(7)
    
    Consists of (a) 288,888 shares of common stock subject to options currently exercisable
or exercisable within 60 days of the Evaluation Date and (b) 8,000 shares of common stock
held by Dr. Pykett and his spouse, as joint tenants.(8)
    
    Consists of 188,888 shares of common stock subject to options currently exercisable or
exercisable within 60 days of the Evaluation Date.(9)
    
    Consists of 806,875 shares of common stock subject to options currently exercisable or
exercisable within 60 days of the Evaluation Date.(10)
    
    Consists of 637,290 shares of common stock subject to options currently exercisable or
exercisable within 60 days of the Evaluation Date.(11)
    
    Includes 2,494,160 shares of common stock subject to options currently exercisable or
exercisable within 60 days of the Evaluation Date.  -67-




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EQUITY COMPENSATION PLAN INFORMATION
  Number of SecuritiesRemaining Availablefor Future IssuanceNumber of Securities
    
    
    Weighted-Average
    
    
    Under Equityto be Issued Upon
    
    
    Exercise Price of
    
    
    Compensation PlansExercise of
    
    
    Outstanding
    
    
    (excluding securitiesOutstanding Options,
    
    
    Options, Warrants
    
    
    reflected inPlan Category
    
    Warrants and Rights
    
    
    and Rights
    
    
    column (a))(a)
    
    
    (b)
    
    
    (c)Equity Compensation Plans Approved
by Security Holders:2008 Omnibus Incentive Plan(1)
    
    
    3,650,000
    
    
    $
    0.15
    
    
    
    14,383,6562005 Equity Incentive Plan(1)
    
    
    2,209,000
    
    
    $
    1.88
    
    
    
    02005 Employee Stock Purchase Plan(2)
    
    
    0
    
    
    $
    
    
    
    
    3,923,634Equity Compensation Plans Not
Approved by Security Holders:
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    5,859,000
    
    
    $
    0.80
    
    
    
    18,307,290
 (1)
    
    In May 2008, our stockholders approved our 2008 Omnibus Incentive Plan, following which no
awards have been or will be granted under our 2005 Equity Incentive Plan and no automatic
increase will occur to the maximum number of shares that may be issued pursuant to our 2005
Equity Incentive Plan. However, our 2005 Equity Incentive Plan will continue to govern any
outstanding awards previously granted under that plan. In addition, if, after December 31,
2007, any shares of our common stock subject to an award under our 2005 Equity Incentive Plan
are forfeited, expire or are settled for cash pursuant to the terms of an award, we may use
the shares subject to the award for awards under our 2008 Omnibus Incentive Plan to the extent
of the forfeiture, expiration or settlement. The shares of common stock will be added back as
one share for every one share of common stock forfeited, expired or settled for cash if the
shares were subject to options or stock appreciation rights granted under our 2005 Equity
Incentive Plan and as 1.2 shares for every one share of common stock forfeited, expired or
settled for cash if the shares were subject to awards other than options or stock appreciation
rights granted under our 2005 Equity Incentive Plan.(2)
    
    Our 2005 Employee Stock Purchase Plan contains a provision for an automatic increase in the
number of shares available for grant on the first day of each fiscal year beginning in 2006
and on each anniversary of that date thereafter equal to the lesser of (i) one percent of the
number of outstanding shares of our common stock on such day, (ii) 750,000 and (iii) such
other amount as our board of directors may specify prior to the date such annual increase is
to take effect.  -68-




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Item 13. Certain Relationships and Related Transactions, and Director Independence
 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
   Consulting Services Agreement with Talaris Advisors LLC
  Separation Arrangements with Former Chief Executive Officer and President
    -69-




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Separation and Consulting Services Arrangements with Former Chief Financial Officer and Senior Vice
President
      -70-




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Separation Arrangements with Former Chief Scientific Officer and Senior Vice President
    Separation Arrangements with Former President and Chief Medical Officer
    -71-




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Indemnification of Officers and Directors
  DIRECTOR INDEPENDENCE
   -72-




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Item 14. Principal Accounting Fees and Services
  2008
    
    
    2009Audit Fees (1)
    
    $
    188,779
    
    
    $
    217,000Audit-Related Fees (2)
    
    
    14,500
    
    
    
    8,339Tax Fees
    
    
    
    
    
    
    All Other Fees
    
    
    
    
    
    
    Total
    
    $
    203,279
    
    
    $
    225,339
 
 (1)
    
    Audit Fees represent fees for professional
services provided in connection with the audit of
our annual financial statements (including the
audit of internal controls over financial
reporting under Section 404 of the Sarbanes Oxley
Act, if conducted), review of our quarterly
financial statements, review of our registration
statements on Forms S-3 and S-1, and related
services normally provided in connection with
statutory and regulatory filings and engagements.(2)
    
    Audit-Related Fees consist primarily of
assurance and related services that are
reasonably related to the performance of the
annual audit or review of our financial
statements. During 2008 and 2009, such fees were
incurred for consultation in responding to SEC
staff comments regarding our financial statements
as of and for the year ended December 31, 2007
and our internal control over financial
reporting. Policy Regarding Pre-Approval of Audit and Non-Audit Services by the Companys Independent
Registered Public Accounting Firm
  
 PART IV
 
 Item 15. Exhibits and Financial Statement Schedules
 (a)
    
    Documents Filed. The following documents are filed as part of this report:
 (1)
    
    Financial Statements. The following report of J.H. Cohn LLP and
financial statements:
 
    
    Report of J.H. Cohn LLP, Independent Registered Public Accounting Firm
 
    
    Consolidated Balance Sheets as of December 31, 2009 and 2008
 
    
    Consolidated Statements of Operations for the years ended December 31, 2009
and 2008 and from inception through December 31, 2009
 
    
    Consolidated Statements of Stockholders Equity (Deficit) and Comprehensive
Loss from inception through December 31, 2009
 
    
    Consolidated Statements of Cash Flows for the years ended December 31, 2009
and 2008 and from inception through December 31, 2009
 
    
    Notes to Consolidated Financial Statements
  -73-




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(2)
    
    Financial Statement Schedules. See subsection (c) below.
 (3)
    
    Exhibits. See subsection (b) below.
 (b)
    
    Exhibits.
 Exhibit
    
    Description2.1
    (1)
    
    Agreement and Plan of Merger, dated April 7, 2006, among the registrant, Speed
Acquisition, Inc., SD Pharmaceuticals, Inc. and certain individuals named
therein (including exhibits thereto)3.1
    (2)
    
    Amended and Restated Certificate of Incorporation of the registrant3.2
    (3)
    
    Certificate of Amendment to the Amended and Restated Certificate of
Incorporation of the registrant dated October 5, 20093.3
    (4)
    
    Certificate of Designation of Preferences, Rights and Limitations of 0% Series A
Convertible Preferred Stock3.4
    (5)
    
    Certificate of Designation of Preferences, Rights and Limitations of 5% Series B
Convertible Preferred Stock3.5
    (6)
    
    Certificate of Designation of Preferences, Rights and Limitations of 5% Series C
Convertible Preferred Stock3.6
    (7)
    
    Certificate of Designation of Preferences, Rights and Limitations of 4.25660%
Series D Convertible Preferred Stock3.7
    (8)
    
    Certificate of Designation of Preferences, Rights and Limitations of
3.73344597664961% Series E Convertible Preferred Stock3.8
    (9)
    
    Amended and Restated Bylaws of the registrant (formerly known as Biokeys
Pharmaceuticals, Inc.)10.1
    (10)
    
    Securities Purchase Agreement, dated July 21, 2005, among the registrant and the
Purchasers (as defined therein)10.2
    (10)
    
    Rights Agreement, dated July 27, 2005, among the registrant, the Icahn
Purchasers and Viking (each as defined therein)10.3
    (11)
    
    First Amendment to Rights Agreement, dated September 22, 2006, among the
registrant and the Icahn Purchasers (as defined therein)10.4
    (12)
    
    Second Amendment to Rights Agreement, dated February 25, 2008, among the
registrant and the Icahn Purchasers (as defined therein)10.5
    (13)
    
    Third Amendment to Rights Agreement, dated August 26, 2009, among the registrant
and Icahn Purchasers (as defined therein)10.6
    (10)
    
    Form of $2.26 Common Stock Warrant issued on July 27, 2005 to Icahn Partners LP,
Icahn Partners Master Fund LP, High River Limited Partnership, Viking Global
Equities LP and VGE III Portfolio Ltd.10.7
    (10)
    
    Form of $2.26 Common Stock Warrant issued on July 27, 2005 to North Sound Legacy
Institutional Fund LLC and North Sound Legacy International Ltd.10.8
    (4)
    
    Engagement Letter Agreement, dated June 7, 2009, by and between the registrant
and Rodman & Renshaw, LLC10.9
    (4)
    
    Securities Purchase Agreement, date June 8, 2009, governing the issuance and
sale of the registrants 0% Series A Convertible Preferred Stock10.10
    (4)
    
    Form of Common Stock Purchase Warrant issued on June 12, 2009 by the registrant
to the purchasers of the registrants 0% Series A Convertible Preferred Stock
and to Rodman & Renshaw, LLC10.11
    (5)
    
    Engagement Letter Agreement, dated June 26, 2009, by and between the registrant
and Rodman & Renshaw, LLC
  -74-




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Exhibit
    
    Description10.12
    (5)
    
    Securities Purchase Agreement, dated June 29, 2009, governing the issuance and
sale of the registrants 5% Series B Convertible Preferred Stock10.13
    (5)
    
    Form of Common Stock Purchase Warrant issued on July 6, 2009 by the registrant
to Rodman & Renshaw, LLC10.14
    (6)
    
    Engagement Letter Agreement, dated August 4, 2009, by and between the registrant
and Rodman & Renshaw, LLC10.15
    (6)
    
    Securities Purchase Agreement, dated August 5, 2009, governing the issuance and
sale of the registrants 5% Series C Convertible Preferred Stock10.16
    (6)
    
    Form of Common Stock Purchase Warrant issued on August 10, 2009 by the
registrant to Rodman & Renshaw, LLC10.17
    (14)
    
    Engagement Letter Agreement, dated September 24, 2009, by and between the
registrant and Rodman & Renshaw, LLC10.18
    (7)
    
    Engagement Letter Agreement, dated September 29, 2009, by and between the
registrant and Rodman & Renshaw, LLC10.19
    (7)
    
    Form of Securities Purchase Agreement, dated October 6, 2009, governing the
issuance and sale of the registrants 4.25660% Series D Convertible Preferred
Stock10.20
    (7)
    
    Form of Common Stock Purchase Warrant issued on October 9, 2009 by the
registrant to the purchasers of the registrants 4.25660% Series D Convertible
Preferred Stock and to Rodman & Renshaw, LLC10.21
    (8)
    
    Engagement Letter Agreement, dated January 3, 2010, by and between the
registrant and Rodman & Renshaw, LLC10.22
    (8)
    
    Securities Purchase Agreement, dated as of January 4, 2010, governing the
issuance and sale of the registrants 3.73344597664961% Series E Convertible
Preferred Stock10.23
    (8)
    
    Form of Common Stock Purchase Warrant issued on January 7, 2010 by the
registrant to the purchasers of the registrants 3.73344597664961% Series E
Convertible Preferred Stock and to Rodman & Renshaw, LLC10.24
    #(15)
    
    2005 Equity Incentive Plan10.25
    #(16)
    
    Form of Stock Option Agreement under the 2005 Equity Incentive Plan10.26
    #(17)
    
    Form of Stock Option Agreement under the 2005 Equity Incentive Plan (for
director option grants beginning in 2008)10.27
    #(18)
    
    Form of Stock Option Agreement under the 2005 Equity Incentive Plan (for option
grants to employees approved in March 2008)10.28
    #(2)
    
    Form of Restricted Share Award Agreement under the 2005 Equity Incentive Plan10.29
    #(19)
    
    2008 Omnibus Incentive Plan10.30
    #(20)
    
    Form of Notice of Grant of Restricted Stock Units under the 2008 Omnibus
Incentive Plan (for grants to employees in January 2009)10.31
    #(20)
    
    Form of Restricted Stock Units Agreement under the 2008 Omnibus Incentive Plan10.32
    #(21)
    
    Form of Non-Statutory Stock Option Grant Agreement (for directors) under the
2008 Omnibus Incentive Plan10.33
    #(21)
    
    Form of Non-Statutory/Incentive Stock Option Grant Agreement (for
consultants/employees) under the 2008 Omnibus Incentive Plan
  -75-




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Exhibit
    
    Description10.34
    #(22)
    
    Form of Incentive Stock Option Grant Agreement under the 2008 Omnibus Incentive
Plan (for grant to Brian M. Culley in July 2009)10.35
    #(22)
    
    Form of Incentive Stock Option Grant Agreement under the 2008 Omnibus Incentive
Plan (for grant to Patrick L. Keran in July 2009)10.36
    #(23)
    
    Form of letter, dated January 20, 2010, modifying options granted to Brian M.
Culley and Patrick L. Keran in July 200910.37
    #(23)
    
    Form of Incentive Stock Option Grant Agreement under the 2008 Omnibus Incentive
Plan (for grant to Brian M. Culley in January 2010)10.38
    #(23)
    
    Form of Incentive Stock Option Grant Agreement under the 2008 Omnibus Incentive
Plan (for grant to Patrick L. Keran in January 2010)10.39
    (17)
    
    License Agreement, dated December 10, 2005, among SD Pharmaceuticals, Latitude
Pharmaceuticals and Andrew Chen, including a certain letter, dated November 20,
2007, clarifying the scope of rights thereunder10.40
    (24)
    
    License Agreement, dated March 25, 2009, among the registrant, SD
Pharmaceuticals, Inc. and Shin Poong Pharmaceutical Co., Ltd.10.41
    (25)
    
    Standard Multi-Tenant Office Lease  Gross, dated June 3, 2004, between the
registrant and George V. Casey & Ellen M. Casey, Trustees of the Casey Family
Trust dated June 22, 199810.42
    (2)
    
    First Amendment to the Standard Multi-Tenant Office Lease  Gross, dated June 3,
2004 between the registrant and George V. & Ellen M. Casey, Trustees of the
Casey Family Trust dated June 22, 199810.43
    (26)
    
    Second Amendment to Standard Mutli-Tenant Officer Lease  Gross, dated July 22,
2009, by and among Westcore Mesa View, LLC, DD Mesa View LLC and the registrant10.44
    (27)
    
    Third Amendment to Standard Multi-Tenant Office Lease  Gross, dated December
10, 2009, by and among Westcore Mesa View, LLC, DD Mesa View, LLC and the
registrant10.45
    
    
    Fourth Amendment to Standard Multi-Tenant Office Lease  Gross, dated February
4, 2010, by and among Westcore Mesa View, LLC, DD Mesa View, LLC and the
registrant10.46
    #(28)
    
    Confidential Separation Agreement and General Release of All Claims, effective
December 4, 2008, between the registrant and Joan M. Robbins10.47
    #(17)
    
    Letter agreement regarding terms of separation with James A. Merritt, effective
as of February 12, 200810.48
    #(29)
    
    Letter Agreement regarding terms of separation with Gregory P. Hanson, dated
April 2, 200810.49
    #(29)
    
    Consulting Agreement, dated April 2, 2008, with Gregory P. Hanson10.50
    #(21)
    
    Offer letter, dated April 1, 2008, to Mark N.K. Bagnall (including Exhibits A, B
and C thereto)10.51
    #(24)
    
    Confidential Separation Agreement and General Release of All Claims, effective
January 8, 2009, and Consulting Agreement, dated December 31, 2008, between the
registrant and Mark N.K. Bagnall10.52
    #(30)
    
    Consulting Agreement, dated August 24, 2009, with Mark N.K. Bagnall10.53
    #(28)
    
    Confidential Separation Agreement and General Release of All Claims, effective
December 31, 2008, between the registrant and Evan M. Levine, including letter,
dated November 7, 2008, related thereto10.54
    #(31)
    
    Offer letter, dated November 15, 2004, to Brian M. Culley10.55
    #(20)
    
    Retention and Incentive Agreement, dated January 28, 2009 between the registrant
and Brian M. Culley
  -76-




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Exhibit
    
    Description10.56
    #(24)
    
    Retention and Incentive Agreement, dated January 28, 2009, between the
registrant and Patrick L. Keran10.57
    #(24)
    
    Retention and Incentive Agreement, dated January 28, 2009, between the
registrant and Mark E. Erwin10.58
    #(24)
    
    Retention and Incentive Agreement, dated January 28, 2009, between the
registrant and Michele L. Yelmene10.59
    #
    
    Consulting Agreement, effective as of July 15, 2009, and Amendment to Consulting
Agreement, effective as of December 31, 2009, between the registrant and Michele
L. Yelmene10.60
    #(22)
    
    2009 Mid-Year Incentive Plan for Brian M. Culley and Patrick L. Keran10.61
    #(22)
    
    Retention and Severance Plan (as of July 21, 2009) for Brian M. Culley and
Patrick L. Keran10.62
    #(23)
    
    2010 Incentive Plan for Brian M. Culley and Patrick L. Keran10.63
    #
    
    Consulting Agreement, effective as of November 23, 2009, between the registrant
and Eric K. Rowinsky10.64
    #(32)
    
    Director Compensation Policy, adopted June 21, 200610.65
    #
    
    Director Compensation Policy, adopted January 25, 201010.66
    (33)
    
    Form of Director and Officer Indemnification Agreement21.1
    
    
    List of Subsidiaries23.1
    
    
    Consent of J.H. Cohn LLP, Independent Registered Public Accounting Firm31.1
    
    
    Certification of principal executive officer pursuant to Rule 13a-14(a)/15d-14(a)31.2
    
    
    Certification of principal financial officer pursuant to Rule 13a-14(a)/15d-14(a)32.1
    ±
    
    Certification of principal executive officer and principal financial officer
pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
 
 
    
    Indicates that confidential treatment has been requested or granted to
certain portions, which portions have been omitted and filed
separately with the SEC#
    
    Indicates management contract or compensatory plan±
    
    These certifications are being furnished solely to accompany this
report pursuant to 18 U.S.C. 1350, and are not being filed for
purposes of Section 18 of the Securities Exchange Act of 1934 and are
not to be incorporated by reference into any filing of the registrant,
whether made before or after the date hereof, regardless of any
general incorporation by reference language in such filing.(1)
    
    Filed with the registrants Amendment No. 1 to Current Report on Form 8-K/A on May 1, 2006
(SEC file number 001-32157-06796248)(2)
    
    Filed with the registrants Annual Report on Form 10-K on March 16, 2006 (SEC file number
001-32157-06693266)(3)
    
    Filed with the registrants Current Report on Form 8-K on October 13, 2009 (SEC file number
001-32157-091115090)(4)
    
    Filed with the registrants Current Report on Form 8-K on June 8, 2009 (SEC file number
001-32157-09878961)  -77-




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(5)
    
    Filed with the registrants Current Report on Form 8-K on June 30, 2009 (SEC file number
001-32157-09917820)(6)
    
    Filed with the registrants Current Report on Form 8-K on August 5, 2009 (SEC file number
001-32157-09989205)(7)
    
    Filed with the registrants Amendment No. 3 to the Registration Statement on Form S-1 on
October 5, 2009 (SEC file number 333-160778-091107945)(8)
    
    Filed with the registrants Current Report on Form 8-K on January 4, 2010 (SEC file number
001-32157- 10500379)(9)
    
    Filed with the registrants Current Report on Form 8-K on December 15, 2008 (SEC file number
001-32157-081249921)(10)
    
    Filed with the registrants Quarterly Report on Form 10-Q on August 12, 2005 (SEC file number
001-32157-051022046)(11)
    
    Filed with the registrants Current Report on Form 8-K on September 22, 2006 (SEC file number
001-32157-061103268)(12)
    
    Filed with the registrants Current Report on Form 8-K on February 25, 2008 (SEC file number
001-32157 08638638)(13)
    
    Filed with the registrants Current Report on Form 8-K on September 1, 2009 (SEC file number
001-32157-091049161)(14)
    
    Filed with the registrants Amendment No. 2 to the Registration Statement on Form S-1 on
September 25, 2009 (SEC file number 333-160778-091087750)(15)
    
    Filed with the registrants Annual Report on Form 10-K on March 15, 2007 (SEC file number
001-32157-07697283)(16)
    
    Filed with the registrants Registration Statement on Form S-8 on July 13, 2005 (SEC file
number 333-126551-05951362)(17)
    
    Filed with registrants Annual Report on Form 10-K on March 17, 2008 (SEC file number
001-32157-08690952)(18)
    
    Filed with the registrants Quarterly Report on Form 10-Q on May 12, 2008 (SEC file number
001-32157-08820541)(19)
    
    Filed with the registrants Current Report on Form 8-K on June 2, 2008 (SEC file number
001-32157-08874724)(20)
    
    Filed with the registrants Current Report on Form 8-K on February 2, 2009 (SEC file number
001-32157- 09561715)(21)
    
    Filed with the registrants Quarterly Report on Form 10-Q on August 11, 2008 (SEC file number
001-32157-081005744)(22)
    
    Filed with the registrants Current Report on Form 8-K on July 22, 2009 (SEC file number
001-32157-09957353)(23)
    
    Filed with the registrants Current Report on Form 8-K on January 26, 2010 (SEC file number
001-32157- 10547818)(24)
    
    Filed with the registrants Quarterly Report on Form 10-Q on May 15, 2009 (SEC file number
001-32157-09878961)(25)
    
    Filed with the registrants Quarterly Report on Form 10-QSB on August 10, 2004 (SEC file
number 001-32157-04963741)(26)
    
    Filed with the registrants Current Report on Form 8-K on August 20, 2009 (SEC file number
001-32157-091025631)(27)
    
    Filed with the registrants Current Report on Form 8-K on December 24, 2009 (SEC file number
001-32157-091260100)  -78-




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(28)
    
    Filed with the registrants Annual Report on Form 10-K on March 27, 2009 (SEC file number
001-32157-09708145)(29)
    
    Filed with the registrants Current Report on Form 8-K on April 16, 2008 (SEC file number
001-32157-08760483)(30)
    
    Filed with the registrants Current Report on Form 8-K on August 28, 2009 (SEC file number
001-32157-091043396)(31)
    
    Filed with the registrants Annual Report on Form 10-KSB on March 31, 2005 (SEC file number
001-32157-05719975)(32)
    
    Filed with the registrants Current Report on Form 8-K on June 23, 2006 (SEC file number
001-32157-06922676)(33)
    
    Filed with the registrants Current Report on Form 8-K on October 23, 2006 (SEC file number
001-32157-061156993) (c)
    
    Financial Statement Schedules. All schedules are omitted because they are not
applicable, the amounts involved are not significant or the required information is shown in
the financial statements or notes thereto.
  -79-




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SIGNATURES
  Date: March 18, 2010
    
    ADVENTRX Pharmaceuticals, Inc.By:
    
    /s/ Brian M. CulleyBrian M. CulleyChief Executive Officer
   Signature
    
    Title
    
    Date/s/ Brian M. Culley

Brian M. Culley
    
    Chief Executive Officer 
(Principal Executive Officer)
    
    March 18, 2010/s/ Patrick L. Keran

Patrick L. Keran
    
    President and Chief Operating Officer 
(Principal
Financial and Accounting Officer)
    
    March 18, 2010/s/ Jack Lief

Jack Lief
    
    Chair of the Board
    
    March 18, 2010/s/ Michael M. Goldberg

Michael M. Goldberg
    
    Director
    
    March 18, 2010/s/ Odysseas D. Kostas

Odysseas D. Kostas
    
    Director
    
    March 18, 2010/s/ Mark J. Pykett

Mark J. Pykett
    
    Director
    
    March 18, 2010/s/ Eric K. Rowinsky

Eric K. Rowinsky
    
    Director
    
    March 18, 2010
  -80-




---



##### Table of Contents



Index to Consolidated Financial Statements
 PageReport of Independent Registered Public Accounting Firm
    
    F-2Financial Statements:Consolidated Balance Sheets
    
    F-3Consolidated Statements of Operations
    
    F-4Consolidated Statements of Stockholders Equity (Deficit) and Comprehensive Loss
    
    F-5  F-10Consolidated Statements of Cash Flows
    
    F-11  F-12Notes to Consolidated Financial Statements
    
    F-13  F-33Financial Statement Schedules:Financial statement schedules have been omitted for the reason that the
required information is presented in financial statements or notes thereto, the
amounts involved are not significant or the schedules are not applicable.
  F-1




---



##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
     
  F-2




---



##### Table of Contents



ADVENTRX Pharmaceuticals, Inc. and Subsidiaries
 
 Consolidated Balance Sheets
 December 31,2009
    
    
    2008AssetsCurrent assets:Cash
    
    $
    8,667,404
    
    
    $
    9,849,904Interest and other receivables
    
    
    14,841
    
    
    
    121,736Prepaid expenses
    
    
    290,249
    
    
    
    477,902Total current assets
    
    
    8,972,494
    
    
    
    10,449,542Property and equipment, net
    
    
    44,210
    
    
    
    199,052Other assets
    
    
    10,513
    
    
    
    60,664Total assets
    
    $
    9,027,217
    
    
    $
    10,709,258Liabilities and Stockholders EquityCurrent liabilities:Accounts payable
    
    $
    385,358
    
    
    $
    1,721,376Accrued liabilities
    
    
    1,379,010
    
    
    
    2,077,188Accrued compensation and payroll taxes
    
    
    589,319
    
    
    
    915,459Total current liabilities
    
    
    2,353,687
    
    
    
    4,714,023Commitments and contingenciesStockholders equity:0% Series A Convertible Preferred Stock, $0.001
par value, 1,993 shares authorized; 1,993
shares issued and 0 shares outstanding as of
December 31, 2009 and 0 shares issued and
outstanding as of December 31, 2008
    
    
    
    
    
    
    5% Series B Convertible Preferred Stock, $0.001
par value, 1,361 shares authorized; 1,361
shares issued and 0 shares outstanding as of
December 31, 2009 and 0 shares issued and
outstanding as of December 31, 2008
    
    
    
    
    
    
    5% Series C Convertible Preferred Stock, $0.001
par value, 922 shares authorized; 922 shares
issued and 0 shares outstanding as of December
31, 2009 and 0 shares issued and outstanding as
of December 31, 2008
    
    
    
    
    
    
    4.25660% Series D Convertible Preferred Stock,
$0.001 par value, 11,283 shares authorized;
11,283 shares issued and 0 shares outstanding
as of December 31, 2009 and 0 shares issued and
outstanding as of December 31, 2008
    
    
    
    
    
    
    Common stock, $0.001 par value; 500,000,000
shares authorized and 205,285,265 shares issued
and outstanding at December 31, 2009;
200,000,000 shares authorized and 90,252,572
shares issued and outstanding at December 31,
2008
    
    
    205,286
    
    
    
    90,254Additional paid-in capital
    
    
    148,506,647
    
    
    
    131,751,439Deficit accumulated during the development stage
    
    
    (142,038,403
    )
    
    
    (125,846,458
    )Total stockholders equity
    
    
    6,673,530
    
    
    
    5,995,235Total liabilities and stockholders equity
    
    $
    9,027,217
    
    
    $
    10,709,258
   F-3




---



##### Table of Contents



ADVENTRX Pharmaceuticals, Inc. and Subsidiaries
 
 Consolidated Statements of Operations
 Inception(June 12, 1996)ThroughYears Ended December 31,
    
    
    December 31,2009
    
    
    2008
    
    
    2009Licensing revenue
    
    $
    300,000
    
    
    $
    500,000
    
    
    $
    1,300,000Net sales
    
    
    
    
    
    
    
    
    
    
    174,830Grant revenue
    
    
    
    
    
    
    
    
    
    
    129,733Total net revenue
    
    
    300,000
    
    
    
    500,000
    
    
    
    1,604,563Cost of sales
    
    
    
    
    
    
    
    
    
    
    51,094Gross margin
    
    
    300,000
    
    
    
    500,000
    
    
    
    1,553,469Operating expenses:Research and development
    
    
    6,507,650
    
    
    
    17,922,183
    
    
    
    68,522,205Selling, general and administrative
    
    
    4,998,307
    
    
    
    9,719,613
    
    
    
    47,967,510Depreciation and amortization
    
    
    79,728
    
    
    
    168,039
    
    
    
    10,877,798In-process research and development
    
    
    
    
    
    
    
    
    
    
    10,422,130Impairment loss  write-off of goodwill
    
    
    
    
    
    
    
    
    
    
    5,702,130Equity in loss of investee
    
    
    
    
    
    
    
    
    
    
    178,936Total operating expenses
    
    
    11,585,685
    
    
    
    27,809,835
    
    
    
    143,670,709Loss from operations
    
    
    (11,285,685
    )
    
    
    (27,309,835
    )
    
    
    (142,117,240
    )Loss on fair value of warrants
    
    
    
    
    
    
    
    
    
    
    (12,239,688
    )Interest income
    
    
    7,162
    
    
    
    549,964
    
    
    
    4,589,188Interest expense
    
    
    
    
    
    
    
    
    
    
    (179,090
    )Other income (expense)
    
    
    (46,535
    )
    
    
    112,378
    
    
    
    65,845Loss before income taxes
    
    
    (11,325,058
    )
    
    
    (26,647,493
    )
    
    
    (149,880,985
    )Provision for income taxes
    
    
    
    
    
    
    
    
    
    
    Loss before cumulative effect of change
in accounting principle
    
    
    (11,325,058
    )
    
    
    (26,647,493
    )
    
    
    (149,880,985
    )Cumulative effect of change in accounting
principle
    
    
    
    
    
    
    
    
    
    
    (25,821
    )Net loss
    
    
    (11,325,058
    )
    
    
    (26,647,493
    )
    
    
    (149,906,806
    )Preferred stock dividends
    
    
    
    
    
    
    
    
    
    
    (621,240
    )Deemed dividends on preferred stock
    
    
    (4,866,887
    )
    
    
    
    
    
    
    (4,866,887
    )Net loss applicable to common stock
    
    $
    (16,191,945
    )
    
    $
    (26,647,493
    )
    
    $
    (155,394,933
    )Loss per common share  basic and diluted
    
    $
    (0.14
    )
    
    $
    (0.30
    )Weighted average shares outstanding 
basic and diluted
    
    
    116,678,997
    
    
    
    90,252,572
   F-4




---



##### Table of Contents



ADVENTRX Pharmaceuticals, Inc. and Subsidiaries
 
 Consolidated Statements of Stockholders Equity (Deficit) and Comprehensive Loss
  DeficitCumulative convertible
    
    
    Convertible
    
    
    Cumulative convertible
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accumulated
    
    
    accumulated
    
    
    
    
    
    
    Totalpreferred stock,
    
    
    preferred stock,
    
    
    preferred stock,
    
    
    
    
    
    
    
    
    
    
    Additional
    
    
    other
    
    
    during the
    
    
    Treasury
    
    
    stockholdersseries A through C
    
    
    series A (2009)
    
    
    series B through D (2009)
    
    
    Common stock
    
    
    paid-in
    
    
    comprehensive
    
    
    development
    
    
    stock,
    
    
    equity
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    capital
    
    
    income (loss)
    
    
    stage
    
    
    at cost
    
    
    (deficit)
    
    
    lossBalances at June 12,
1996 (date of
incorporation)
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Sale of common stock
without par value
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    503
    
    
    
    5
    
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10Change in par value of
common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4
    )
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Issuance of common stock
and net liabilities
assumed in acquisition
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,716,132
    
    
    
    1,716
    
    
    
    3,224
    
    
    
    
    
    
    
    (18,094
    )
    
    
    
    
    
    
    (13,154
    )Issuance of common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,010,111
    
    
    
    2,010
    
    
    
    456
    
    
    
    
    
    
    
    (2,466
    )
    
    
    
    
    
    
    Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (259,476
    )
    
    
    
    
    
    
    (259,476
    )
    
    $
    (259,476
    )Balances at December 31,
1996
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,726,746
    
    
    
    3,727
    
    
    
    3,689
    
    
    
    
    
    
    
    (280,036
    )
    
    
    
    
    
    
    (272,620
    )
    
    $
    (259,476
    )Sale of common stock,
net of offering costs of
$9,976
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,004,554
    
    
    
    1,004
    
    
    
    1,789,975
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,790,979Issuance of common stock
in acquisition
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    375,891
    
    
    
    376
    
    
    
    887,874
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    888,250Minority interest
deficiency at
acquisition charged to
the Company
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (45,003
    )
    
    
    
    
    
    
    (45,003
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,979,400
    )
    
    
    
    
    
    
    (1,979,400
    )
    
    $
    (1,979,400
    )Balances at December 31,
1997
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,107,191
    
    
    
    5,107
    
    
    
    2,681,538
    
    
    
    
    
    
    
    (2,304,439
    )
    
    
    
    
    
    
    382,206
    
    
    $
    (1,979,400
    )Rescission of acquisition
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (375,891
    )
    
    
    (376
    )
    
    
    (887,874
    )
    
    
    
    
    
    
    561,166
    
    
    
    
    
    
    
    (327,084
    )Issuance of common stock
at conversion of notes
payable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    450,264
    
    
    
    451
    
    
    
    363,549
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    364,000Expense related to stock
warrants issued
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    260,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    260,000Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,204,380
    )
    
    
    
    
    
    
    (1,204,380
    )
    
    $
    (1,204,380
    )Balances at December 31,
1998
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,181,564
    
    
    
    5,182
    
    
    
    2,417,213
    
    
    
    
    
    
    
    (2,947,653
    )
    
    
    
    
    
    
    (525,258
    )
    
    $
    (1,204,380
    )Sale of common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    678,412
    
    
    
    678
    
    
    
    134,322
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    135,000Expense related to stock
warrants issued
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    212,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    212,000Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,055,485
    )
    
    
    
    
    
    
    (1,055,485
    )
    
    $
    (1,055,485
    )Balances at December 31,
1999
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,859,976
    
    
    
    5,860
    
    
    
    2,763,535
    
    
    
    
    
    
    
    (4,003,138
    )
    
    
    
    
    
    
    (1,233,743
    )
    
    $
    (1,055,485
    )Sale of preferred stock,
net of offering costs of
$76,500
    
    
    3,200
    
    
    
    32
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,123,468
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,123,500Issuance of common stock
at conversion of notes
and interest payable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    412,487
    
    
    
    412
    
    
    
    492,085
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    492,497Issuance of common stock
at conversion of notes
payable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    70,354
    
    
    
    70
    
    
    
    83,930
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    84,000Issuance of common stock
to settle obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    495,111
    
    
    
    496
    
    
    
    1,201,664
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,202,160Issuance of common stock
for acquisition
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,999,990
    
    
    
    7,000
    
    
    
    9,325,769
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,332,769
  F-5




---



##### Table of Contents





ADVENTRX Pharmaceuticals, Inc. and Subsidiaries   Consolidated Statements of Stockholders Equity (Deficit) and Comprehensive Loss
 DeficitCumulative convertible
    
    
    Convertible
    
    
    Cumulative convertible
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accumulated
    
    
    accumulated
    
    
    
    
    
    
    Totalpreferred stock,
    
    
    preferred stock,
    
    
    preferred stock,
    
    
    
    
    
    
    
    
    
    
    Additional
    
    
    other
    
    
    during the
    
    
    Treasury
    
    
    stockholdersseries A through C
    
    
    series A (2009)
    
    
    series B through D (2009)
    
    
    Common stock
    
    
    paid-in
    
    
    comprehensive
    
    
    development
    
    
    stock,
    
    
    equity
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    capital
    
    
    income (loss)
    
    
    Stage
    
    
    at cost
    
    
    (deficit)
    
    
    lossIssuance of
warrants for
acquisition
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    4,767,664
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    4,767,664Stock issued for
acquisition costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    150,000
    
    
    
    150
    
    
    
    487,350
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    487,500Expense related to
stock warrants
issued
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    140,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    140,000Dividends payable
on preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (85,000
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (85,000
    )Cashless exercise
of warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    599,066
    
    
    
    599
    
    
    
    (599
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,701,084
    )
    
    
    
    
    
    
    (3,701,084
    )
    
    $
    (3,701,084
    )Balances at
December 31, 2000
    
    
    3,200
    
    
    
    32
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,586,984
    
    
    
    14,587
    
    
    
    22,299,866
    
    
    
    
    
    
    
    (7,704,222
    )
    
    
    
    
    
    
    14,610,263
    
    
    $
    (3,701,084
    )
  F-6




---



##### Table of Contents





ADVENTRX Pharmaceuticals, Inc. and Subsidiaries   Consolidated Statements of Stockholders Equity (Deficit) and Comprehensive Loss
 DeficitCumulative convertible
    
    
    Convertible
    
    
    Cumulative convertible
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accumulated
    
    
    accumulated
    
    
    
    
    
    
    Totalpreferred stock,
    
    
    preferred stock,
    
    
    preferred stock,
    
    
    
    
    
    
    
    
    
    
    Additional
    
    
    other
    
    
    during the
    
    
    Treasury
    
    
    stockholdersseries A through C
    
    
    series A (2009)
    
    
    series B through D (2009)
    
    
    Common stock
    
    
    paid-in
    
    
    comprehensive
    
    
    development
    
    
    stock,
    
    
    equity
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    capital
    
    
    income (loss)
    
    
    stage
    
    
    at cost
    
    
    (deficit)
    
    
    lossDividends payable on preferred
stock
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    (256,000
    )
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    (256,000
    )Repurchase of warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (55,279
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (55,279
    )Sale of warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    47,741
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    47,741Cashless exercise of warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    218,493
    
    
    
    219
    
    
    
    (219
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Issuance of common stock to pay
preferred dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    93,421
    
    
    
    93
    
    
    
    212,907
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    213,000Detachable warrants issued with
notes payable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    450,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    450,000Issuance of warrants to pay
operating expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    167,138
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    167,138Issuance of common stock to pay
operating expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    106,293
    
    
    
    106
    
    
    
    387,165
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    387,271Issuance of preferred stock to
pay operating expenses
    
    
    137
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    136,499
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    136,500Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16,339,120
    )
    
    
    
    
    
    
    (16,339,120
    )
    
    $
    (16,339,120
    )Balances at December 31, 2001
    
    
    3,337
    
    
    
    33
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,005,191
    
    
    
    15,005
    
    
    
    23,389,818
    
    
    
    
    
    
    
    (24,043,342
    )
    
    
    
    
    
    
    (638,486
    )
    
    $
    (16,339,120
    )Dividends payable on preferred
stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (242,400
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (242,400
    )Repurchase of warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Sale of warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    240,000
    
    
    
    240
    
    
    
    117,613
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    117,853Cashless exercise of warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100,201
    
    
    
    100
    
    
    
    (100
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercise of warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    344,573
    
    
    
    345
    
    
    
    168,477
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    168,822Sale of preferred stock at $1.50
per share
    
    
    200,000
    
    
    
    2,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    298,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    300,000Sale of preferred stock at $10.00
per share
    
    
    70,109
    
    
    
    701
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    700,392
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    701,093Conversion of preferred stock
into common stock
    
    
    (3,000
    )
    
    
    (30
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,800,000
    
    
    
    1,800
    
    
    
    (1,770
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Preferred stock dividends forgiven
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    335,440
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    335,440Issuance of warrants to pay
operating expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    163,109
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    163,109Issuance of common stock to pay
operating expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,292
    
    
    
    6
    
    
    
    12,263
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,269Issuance of preferred stock to
pay operating expenses
    
    
    136
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,001Issuance of stock options to
employees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    329,296
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    329,296Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,105,727
    )
    
    
    
    
    
    
    (2,105,727
    )
    
    $
    (2,105,727
    )Balances at December 31, 2002
    
    
    270,582
    
    
    
    2,705
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,496,257
    
    
    
    17,496
    
    
    
    25,276,138
    
    
    
    
    
    
    
    (26,149,069
    )
    
    
    
    
    
    
    (852,730
    )
    
    $
    (2,105,727
    )
  F-7




---



##### Table of Contents



ADVENTRX Pharmaceuticals, Inc. and Subsidiaries   Consolidated Statements of Stockholders Equity (Deficit) and Comprehensive Loss
 DeficitCumulative convertible
    
    
    Convertible
    
    
    Cumulative convertible
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accumulated
    
    
    accumulated
    
    
    
    
    
    
    Totalpreferred stock,
    
    
    preferred stock,
    
    
    preferred stock,
    
    
    
    
    
    
    
    
    
    
    Additional
    
    
    other
    
    
    during the
    
    
    Treasury
    
    
    stockholdersseries A through C
    
    
    series A (2009)
    
    
    series B through D (2009)
    
    
    Common stock
    
    
    paid-in
    
    
    comprehensive
    
    
    development
    
    
    stock,
    
    
    equity
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    capital
    
    
    income (loss)
    
    
    stage
    
    
    at cost
    
    
    (deficit)
    
    
    lossDividends payable on
preferred stock
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    (37,840
    )
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    (37,840
    )Conversion of Series C
preferred stock into common
stock
    
    
    (70,109
    )
    
    
    (701
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,021,860
    
    
    
    14,022
    
    
    
    (13,321
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Issuance of common stock to
pay interest on Bridge Notes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    165,830
    
    
    
    165
    
    
    
    53,326
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    53,491Sale of common stock at
$0.40 per share, net of
issuance costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,640,737
    
    
    
    6,676
    
    
    
    2,590,656
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,597,332Sale of common stock at
$1.00 per share, net of
issuance costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,701,733
    
    
    
    3,668
    
    
    
    3,989,181
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,992,849Exchange of warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    235,291
    
    
    
    235
    
    
    
    49,486
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    49,721Issuance of common stock to
pay operating expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    230,000
    
    
    
    230
    
    
    
    206,569
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    206,799Issuance of warrants to pay
operating expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    156,735
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    156,735Issuance of stock options to
employees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    286,033
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    286,033Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,332,077
    )
    
    
    
    
    
    
    (2,332,077
    )
    
    $
    (2,332,077
    )Balances at December 31, 2003
    
    
    200,473
    
    
    
    2,004
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    42,491,708
    
    
    
    42,492
    
    
    
    32,556,963
    
    
    
    
    
    
    
    (28,481,146
    )
    
    
    
    
    
    
    4,120,313
    
    
    $
    (2,332,077
    )Extinguishment of dividends
payable on preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    72,800
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    72,800Conversion of Series A
cumulative preferred stock
    
    
    (473
    )
    
    
    (4
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    236,500
    
    
    
    236
    
    
    
    (232
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Conversion of Series B
preferred stock
    
    
    (200,000
    )
    
    
    (2,000
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200,000
    
    
    
    200
    
    
    
    1,800
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cashless exercise of warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    464,573
    
    
    
    465
    
    
    
    (465
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercise of warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,832
    
    
    
    23
    
    
    
    27,330
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,353Issuance of warrants in
settlement of a claim
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    86,375
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    86,375Sale of common stock at
$1.50 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,417,624
    
    
    
    10,419
    
    
    
    15,616,031
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,626,450Payment of financing and
offering costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,366,774
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,366,774
    )Issuance of stock options to
employees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    524,922
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    524,922Acquisition of treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    34,747
    
    
    
    
    
    
    
    
    
    
    
    (34,747
    )
    
    
    Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,701,048
    )
    
    
    
    
    
    
    (6,701,048
    )
    
    $
    (6,701,048
    )Balances at December 31, 2004
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    53,834,237
    
    
    
    53,835
    
    
    
    47,553,497
    
    
    
    
    
    
    
    (35,182,194
    )
    
    
    (34,747
    )
    
    
    12,390,391
    
    
    $
    (6,701,048
    )
  F-8




---



##### Table of Contents



ADVENTRX Pharmaceuticals, Inc. and Subsidiaries   Consolidated Statements of Stockholders Equity (Deficit) and Comprehensive Loss
 DeficitCumulative convertible
    
    
    Convertible
    
    
    Cumulative convertible
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accumulated
    
    
    accumulated
    
    
    
    
    
    
    Totalpreferred stock,
    
    
    preferred stock,
    
    
    preferred stock,
    
    
    
    
    
    
    
    
    
    
    Additional
    
    
    other
    
    
    during the
    
    
    Treasury
    
    
    stockholdersseries A through C
    
    
    series A (2009)
    
    
    series B through D (2009)
    
    
    Common stock
    
    
    paid-in
    
    
    comprehensive
    
    
    development
    
    
    stock,
    
    
    equity
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    capital
    
    
    income (loss)
    
    
    stage
    
    
    at cost
    
    
    (deficit)
    
    
    lossNet loss
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    (24,782,646
    )
    
    $
    
    
    
    $
    (24,782,646
    )
    
    $
    (24,782,646
    )Effect of change in fair
value of available-for-sale securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,722
    )
    
    
    
    
    
    
    
    
    
    
    (1,722
    )
    
    
    (1,722
    )Par value of shares issued
in conjunction with
mezzanine financing
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,810,809
    
    
    
    10,811
    
    
    
    (10,811
    )
    
    
    
    
    
    
    
    
    
    
    Cashless exercise of warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    149,613
    
    
    
    149
    
    
    
    (149
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercise of warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,258,703
    
    
    
    2,259
    
    
    
    3,071,179
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,073,438Exercise of stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    185,000
    
    
    
    185
    
    
    
    144,815
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    145,000Issuance of stock options to
employees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    994,874
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    994,874Issuance of stock options to
non-employee
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    93,549
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    93,549Issuance of common stock to
vendor
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    125,000
    
    
    
    125
    
    
    
    258,375
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    258,500Balances at December 31,
2005, as restated
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    67,363,362
    
    
    
    67,364
    
    
    
    52,105,329
    
    
    
    (1,722
    )
    
    
    (59,964,840
    )
    
    
    (34,747
    )
    
    
    (7,828,616
    )
    
    $
    (24,784,368
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (29,331,773
    )
    
    
    
    
    
    
    (29,331,773
    )
    
    $
    (29,331,773
    )Effect of change in fair
value of available-for-sale securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (368
    )
    
    
    
    
    
    
    
    
    
    
    (368
    )
    
    
    (368
    )Cashless exercise of warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    420,161
    
    
    
    420
    
    
    
    (420
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercise of warrants, net of
financing costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,103,746
    
    
    
    5,104
    
    
    
    7,686,486
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,691,590Acquisition of SD
Pharmaceuticals. Inc.
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,099,990
    
    
    
    2,100
    
    
    
    10,161,852
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,163,952Sale of common stock at
$2.75 per share, net of
offering costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,545,000
    
    
    
    14,545
    
    
    
    37,055,666
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    37,070,211Issuance of stock for
severance agreement
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    60,145
    
    
    
    60
    
    
    
    196,614
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    196,674Exercise of stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    92,500
    
    
    
    93
    
    
    
    125,658
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    125,751Issuance of restricted stock
to non-employees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,000
    
    
    
    15
    
    
    
    68,635
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    68,650Issuance of stock options to
employees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,697,452
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,697,452Issuance of stock options to
non-employee
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    104,225
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    104,225Cancellation of treasury
stock shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (23,165
    )
    
    
    (23
    )
    
    
    (34,724
    )
    
    
    
    
    
    
    
    
    
    
    34,747
    
    
    
    Balances at December 31,
2006, as restated
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    89,676,739
    
    
    
    89,678
    
    
    
    109,166,773
    
    
    
    (2,090
    )
    
    
    (89,296,613
    )
    
    
    
    
    
    
    19,957,748
    
    
    $
    (29,332,141
    )Cumulative effect of change
in accounting principle
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,116,751
    
    
    
    
    
    
    
    12,239,688
    
    
    
    
    
    
    
    30,356,439Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (22,142,040
    )
    
    
    
    
    
    
    (22,142,040
    )
    
    $
    (22,142,040
    )Effect of change in fair
value of available-for-sale securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,792
    
    
    
    
    
    
    
    
    
    
    
    4,792
    
    
    
    4,792Exercise of stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    575,833
    
    
    
    576
    
    
    
    441,040
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    441,616Issuance of stock options to
employees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,414,077
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,414,077
  F-9




---



##### Table of Contents



ADVENTRX Pharmaceuticals, Inc. and Subsidiaries   Consolidated Statements of Stockholders Equity (Deficit) and Comprehensive Loss
 DeficitCumulative convertible
    
    
    Convertible
    
    
    Cumulative convertible
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accumulated
    
    
    accumulated
    
    
    
    
    
    
    Totalpreferred stock,
    
    
    preferred stock,
    
    
    preferred stock,
    
    
    
    
    
    
    
    
    
    
    Additional
    
    
    other
    
    
    during the
    
    
    Treasury
    
    
    stockholdersseries A through C
    
    
    series A (2009)
    
    
    series B through D (2009)
    
    
    Common stock
    
    
    paid-in
    
    
    comprehensive
    
    
    development
    
    
    stock,
    
    
    equity
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    capital
    
    
    income (loss)
    
    
    stage
    
    
    at cost
    
    
    (deficit)
    
    
    lossIssuance of stock options to
non-employee
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    1,908
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    1,908Balances at December 31, 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    90,252,572
    
    
    
    90,254
    
    
    
    130,140,549
    
    
    
    2,702
    
    
    
    (99,198,965
    )
    
    
    
    
    
    
    31,034,540
    
    
    $
    (22,137,248
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (26,647,493
    )
    
    
    
    
    
    
    (26,647,493
    )
    
    $
    (26,647,493
    )Effect of change in fair
value of available-for-sale
securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,702
    )
    
    
    
    
    
    
    
    
    
    
    (2,702
    )
    
    
    (2,702
    )Exercise of stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Issuance of stock options to
employees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,605,908
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,605,908Issuance of stock options to
non-employee
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,982
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,982Balances at December 31, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    90,252,572
    
    
    
    90,254
    
    
    
    131,751,439
    
    
    
    
    
    
    
    (125,846,458
    )
    
    
    
    
    
    
    5,995,235
    
    
    $
    (26,650,195
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,325,058
    )
    
    
    
    
    
    
    (11,325,058
    )
    
    $
    (11,325,058
    )Sale of series A preferred
stock, net of offering costs
of $389,125
    
    
    
    
    
    
    
    
    
    
    1,993
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,735,627
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,735,629Conversion of series A
preferred stock into common
stock
    
    
    
    
    
    
    
    
    
    
    (1,993
    )
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    18,036,199
    
    
    
    18,036
    
    
    
    (18,034
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Sale of series B preferred
stock, net of offering costs
of $247,643
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,361
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    833,030
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    833,031Conversion of series B
preferred stock into common
stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,361
    )
    
    
    (1
    )
    
    
    9,504,189
    
    
    
    9,504
    
    
    
    (9,503
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Sale of series C preferred
stock, net of offering costs
of $143,885
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    922
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    711,198
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    711,199Conversion of series C
preferred stock into common
stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (922
    )
    
    
    (1
    )
    
    
    7,092,307
    
    
    
    7,092
    
    
    
    (7,091
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Sale of series D preferred
stock, net of offering costs
of $1,327,664
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,283
    
    
    
    11
    
    
    
    
    
    
    
    
    
    
    
    5,124,125
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,124,136Conversion of series D
preferred stock into common
stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,283
    )
    
    
    (11
    )
    
    
    59,999,998
    
    
    
    60,000
    
    
    
    (59,989
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Deemed dividend on series A
preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,207,536
    
    
    
    
    
    
    
    (1,207,536
    )
    
    
    
    
    
    
    Deemed dividend on series B
preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    214,795
    
    
    
    
    
    
    
    (214,795
    )
    
    
    
    
    
    
    Deemed dividend on series C
preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    186,173
    
    
    
    
    
    
    
    (186,173
    )
    
    
    
    
    
    
    Deemed dividend on series D
preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,258,383
    
    
    
    
    
    
    
    (3,258,383
    )
    
    
    
    
    
    
    Issuance of stock options to
employees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    585,438
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    585,438Series A warrants exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,000,000
    
    
    
    6,000
    
    
    
    894,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    900,000Series D warrants exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,400,000
    
    
    
    14,400
    
    
    
    2,099,520
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,113,920Balances at December 31, 2009
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    205,285,265
    
    
    $
    205,286
    
    
    $
    148,506,647
    
    
    $
    
    
    
    $
    (142,038,403
    )
    
    $
    
    
    
    $
    6,673,530
    
    
    $
    (11,325,058
    )
   F-10




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##### Table of Contents



ADVENTRX Pharmaceuticals, Inc. and Subsidiaries
 
 Consolidated Statements of Cash Flows
 Inception(June 12, 1996)ThroughYears Ended December 31,
    
    
    December 31,2009
    
    
    2008
    
    
    2009Cash flows from operating activities:Net loss
    
    $
    (11,325,058
    )
    
    $
    (26,647,493
    )
    
    $
    (149,906,807
    )Adjustments to reconcile net loss to net cash used in
operating activities:Depreciation and amortization
    
    
    79,728
    
    
    
    168,039
    
    
    
    10,427,799(Gain)/loss on disposal of fixed assets
    
    
    59,114
    
    
    
    (3,598
    )
    
    
    55,516Loss on fair value of warrants
    
    
    
    
    
    
    
    
    
    
    12,239,688Amortization of debt discount
    
    
    
    
    
    
    
    
    
    
    450,000Forgiveness of employee receivable
    
    
    
    
    
    
    
    
    
    
    30,036Impairment loss  write-off of goodwill
    
    
    
    
    
    
    
    
    
    
    5,702,130Expenses related to employee stock options and
restricted stock issued
    
    
    585,437
    
    
    
    1,605,907
    
    
    
    8,437,999Expenses related to options issued to non-employees
    
    
    
    
    
    
    4,983
    
    
    
    204,664Expenses paid by issuance of common stock
    
    
    
    
    
    
    
    
    
    
    1,341,372Expenses paid by issuance of warrants
    
    
    
    
    
    
    
    
    
    
    573,357Expenses paid by issuance of preferred stock
    
    
    
    
    
    
    
    
    
    
    142,501Expenses related to stock warrants issued
    
    
    
    
    
    
    
    
    
    
    612,000Equity in loss of investee
    
    
    
    
    
    
    
    
    
    
    178,936In-process research and development
    
    
    
    
    
    
    
    
    
    
    10,422,130Write-off of license agreement
    
    
    
    
    
    
    
    
    
    
    152,866Write-off assets available-for-sale
    
    
    
    
    
    
    
    
    
    
    108,000Cumulative effect of change in accounting principle
    
    
    
    
    
    
    
    
    
    
    25,821Accretion of discount
    
    
    
    
    
    
    (208,103
    )
    
    
    (1,249,853
    )Accretion of discount on investments in securities
    
    
    
    
    
    
    
    
    
    
    (354,641
    )Changes in assets and liabilities, net of effect
of acquisitions:(Increase) decrease in prepaid and other assets
    
    
    344,699
    
    
    
    85,723
    
    
    
    (562,972
    )Increase (decrease) in accounts payable and
accrued liabilities
    
    
    (2,360,336
    )
    
    
    1,221,208
    
    
    
    2,530,395Decrease in long-term liabilities
    
    
    
    
    
    
    (14,270
    )
    
    
    Net cash used in operating activities
    
    
    (12,616,416
    )
    
    
    (23,787,604
    )
    
    
    (98,439,063
    )Cash flows from investing activities:Proceeds from sales and maturities of short-term
investments
    
    
    
    
    
    
    33,243,602
    
    
    
    112,788,378Purchases of short-term investments
    
    
    
    
    
    
    (14,355,784
    )
    
    
    (111,183,884
    )Purchases of property and equipment
    
    
    
    
    
    
    (64,955
    )
    
    
    (1,030,354
    )Proceeds from sale of property and equipment
    
    
    16,000
    
    
    
    33,906
    
    
    
    49,906Purchase of certificate of deposit
    
    
    
    
    
    
    
    
    
    
    (1,016,330
    )
  F-11




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##### Table of Contents



ADVENTRX Pharmaceuticals, Inc. and Subsidiaries   Consolidated Statements of Cash Flows
 Inception(June 12, 1996)ThroughYears Ended December 31,
    
    
    December 31,2009
    
    
    2008
    
    
    2009Maturity of certificate of deposit
    
    
    
    
    
    
    
    
    
    
    1,016,330Cash paid for acquisitions, net of cash
acquired
    
    
    
    
    
    
    
    
    
    
    32,395Payment on obligation under license
agreement
    
    
    
    
    
    
    
    
    
    
    (106,250
    )Issuance of note receivable  related party
    
    
    
    
    
    
    
    
    
    
    (35,000
    )Payments on note receivable
    
    
    
    
    
    
    
    
    
    
    405,993Advance to investee
    
    
    
    
    
    
    
    
    
    
    (90,475
    )Cash transferred in rescission of acquisition
    
    
    
    
    
    
    
    
    
    
    (19,475
    )Cash received in rescission of acquisition
    
    
    
    
    
    
    
    
    
    
    230,000Net cash provided by investing activities
    
    
    16,000
    
    
    
    18,856,769
    
    
    
    1,041,234Cash flows from financing activities:Proceeds from sale of common stock
    
    
    
    
    
    
    
    
    
    
    84,151,342Proceeds from exercise of stock options
    
    
    
    
    
    
    
    
    
    
    712,367Proceeds from sale or exercise of warrants
    
    
    3,013,920
    
    
    
    
    
    
    
    14,396,814Proceeds from sale of preferred stock
    
    
    9,820,500
    
    
    
    
    
    
    
    14,021,493Repurchase of warrants
    
    
    
    
    
    
    
    
    
    
    (55,279
    )Payments for financing and offering costs
    
    
    (1,416,504
    )
    
    
    
    
    
    
    (7,900,313
    )Payments on notes payable and long-term debt
    
    
    
    
    
    
    
    
    
    
    (605,909
    )Proceeds from issuance of notes payable and
detachable warrants
    
    
    
    
    
    
    
    
    
    
    1,344,718Net cash provided by financing activities
    
    
    11,417,916
    
    
    
    
    
    
    
    106,065,233Net (decrease) increase in cash and cash
equivalents
    
    
    (1,182,500
    )
    
    
    (4,930,835
    )
    
    
    8,667,404Cash and cash equivalents at beginning of period
    
    
    9,849,904
    
    
    
    14,780,739
    
    
    
    Cash at end of period
    
    $
    8,667,404
    
    
    $
    9,849,904
    
    
    $
    8,667,404
   F-12




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##### Table of Contents



ADVENTRX Pharmaceuticals, Inc. and Subsidiaries
 
 Notes to Consolidated Financial Statements
 December 31, 2009
 (1)
    
    Description of Business
   (2)
    
    Summary of Significant Accounting Policies
 Basis of Presentation
  Use of Estimates
  Cash Equivalents
   F-13




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##### Table of Contents



ADVENTRX Pharmaceuticals, Inc. and Subsidiaries   Notes to Consolidated Financial Statements
December 31, 2009
 Concentrations
   Property and Equipment
  Impairment of Long-Lived Assets
  Revenue Recognition
     F-14




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##### Table of Contents



ADVENTRX Pharmaceuticals, Inc. and Subsidiaries   Notes to Consolidated Financial Statements
December 31, 2009
 Research and Development Expenses
    Purchased In-Process Research and Development
   F-15




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##### Table of Contents



ADVENTRX Pharmaceuticals, Inc. and Subsidiaries   Notes to Consolidated Financial Statements
December 31, 2009
 Stock-Based Compensation
  Patent Costs
  Income Taxes
    Comprehensive Loss
  Net Loss per Common Share
   2009
    
    
    2008Warrants
    
    
    23,658,733
    
    
    
    13,373,549Options
    
    
    5,859,000
    
    
    
    4,364,83329,517,733
    
    
    
    17,738,382
  F-16




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##### Table of Contents



ADVENTRX Pharmaceuticals, Inc. and Subsidiaries   Notes to Consolidated Financial Statements
December 31, 2009
 Supplemental Cash Flow Information
 Inception(June 12, 1996)ThroughYears Ended December 31,
    
    
    December 31,2009
    
    
    2008
    
    
    2009Supplemental disclosures of cash flow information:Interest paid
    
    $
    
    
    
    $
    
    
    
    $
    179,090Income taxes paid
    
    
    
    
    
    
    
    
    
    
    Supplemental disclosures of non-cash investing and
financing activities:Issuance of warrants, common stock and preferred
stock for:Conversion of notes payable and accrued interest
    
    
    
    
    
    
    
    
    
    
    1,213,988Prepaid services to consultants
    
    
    
    
    
    
    
    
    
    
    1,482,781Conversion of preferred stock
    
    
    94,632
    
    
    
    
    
    
    
    97,337Acquisitions
    
    
    
    
    
    
    
    
    
    
    24,781,555Payment of dividends
    
    
    
    
    
    
    
    
    
    
    213,000Financial advisor services in conjunction with
private placements
    
    
    691,812
    
    
    
    
    
    
    
    1,829,268Acquisition of treasury stock in settlement of a
claim
    
    
    
    
    
    
    
    
    
    
    34,737Cancellation of treasury stock
    
    
    
    
    
    
    
    
    
    
    (34,737
    )Assumptions of liabilities in acquisitions
    
    
    
    
    
    
    
    
    
    
    1,235,907Acquisition of license agreement for long-term debt
    
    
    
    
    
    
    
    
    
    
    161,180Cashless exercise of warrants
    
    
    
    
    
    
    
    
    
    
    4,312Dividends accrued
    
    
    
    
    
    
    
    
    
    
    621,040Trade asset converted to available for sale asset
    
    
    
    
    
    
    
    
    
    
    108,000Dividends extinguished
    
    
    
    
    
    
    
    
    
    
    408,240Trade payable converted to note payable
    
    
    
    
    
    
    
    
    
    
    83,948Issuance of warrants for return of common stock
    
    
    
    
    
    
    
    
    
    
    50,852Detachable warrants issued with notes payable
    
    
    
    
    
    
    
    
    
    
    450,000Unrealized loss on short-term investments
    
    
    
    
    
    
    2,702
    
    
    
    Cumulative preferred stock dividends
    
    
    5,738,500
    
    
    
    
    
    
    
    5,738,500
 Recent Accounting Pronouncements
 Generally
Accepted Accounting Principles
 Revenue
Recognition Multiple-Deliverable Revenue Arrangements a consensus of the FASB
Emerging Issues Task Force Revenue Recognition  Multiple Element Arrangements
  F-17




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##### Table of Contents



ADVENTRX Pharmaceuticals, Inc. and Subsidiaries   Notes to Consolidated Financial Statements
December 31, 2009
 Subsequent Events
   (3)
    
    Fair Value Measurements
   Level 1 
    
    Quoted prices in active markets for identical assets or liabilities.
  F-18




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##### Table of Contents



ADVENTRX Pharmaceuticals, Inc. and Subsidiaries   Notes to Consolidated Financial Statements
December 31, 2009
 
 Level 2 
    
    Inputs other than Level 1 that are observable, either directly or
indirectly, such as quoted prices for similar assets or liabilities; quoted prices in
markets that are not active; or other inputs that are observable or can be corroborated
by observable market data for substantially the full term of the assets or liabilities.
 Level 3 
    
    Unobservable inputs that are supported by little or no market activity and
that are significant to the fair value of the assets or liabilities.
  (4)
    
    Property and Equipment
  Useful Lives
    
    2009
    
    
    2008Office furniture, computer and lab equipment
    
    3  5 years
    
    $
    293,480
    
    
    $
    720,257Computer software
    
    3 years
    
    
    89,422
    
    
    
    103,306382,902
    
    
    
    823,563Less accumulated depreciation and amortization
    
    
    
    
    (338,692
    )
    
    
    (624,511
    )Property and equipment, net
    
    
    
    $
    44,210
    
    
    $
    199,052
  (5)
    
    Accrued Liabilities
  2009
    
    
    2008Accrued contracts and study expenses
    
    $
    1,144,279
    
    
    $
    1,620,988Other accrued liabilities
    
    
    234,731
    
    
    
    434,172Deferred rent
    
    
    
    
    
    
    22,028Accrued liabilities
    
    $
    1,379,010
    
    
    $
    2,077,188
 (6)
    
    Capital Stock and Warrants
 Authorized Share Increase
  0% Series A Convertible Preferred Stock
   F-19




---



##### Table of Contents



ADVENTRX Pharmaceuticals, Inc. and Subsidiaries   Notes to Consolidated Financial Statements
December 31, 2009
   5% Series B Convertible Preferred Stock
     F-20




---



##### Table of Contents



ADVENTRX Pharmaceuticals, Inc. and Subsidiaries   Notes to Consolidated Financial Statements
December 31, 2009
 5% Series C Convertible Preferred Stock
    4.25660% Series D Convertible Preferred Stock
   F-21




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##### Table of Contents



ADVENTRX Pharmaceuticals, Inc. and Subsidiaries   Notes to Consolidated Financial Statements
December 31, 2009
   Common Stock Issued for Warrants Exercised
   Warrants
   Warrants
    
    
    Exercise Price
    
    
    Expiration Date10,810,809
    
    
    $
    2.2600
    
    
    July 20122,116,290
    
    
    $
    0.1500
    
    
    June 2014901,810
    
    
    $
    0.1500
    
    
    June 2014475,209
    
    
    $
    0.1790
    
    
    July 2012354,615
    
    
    $
    0.1625
    
    
    August 20145,400,000
    
    
    $
    0.1468
    
    
    October 20143,600,000
    
    
    $
    0.2350
    
    
    October 201423,658,733
  F-22




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##### Table of Contents



ADVENTRX Pharmaceuticals, Inc. and Subsidiaries   Notes to Consolidated Financial Statements
December 31, 2009
 (7)
    
    Equity Incentive Plans
  Years Ended December 31,2009
    
    
    2008Selling, general and administrative expense
    
    $
    543,868
    
    
    $
    885,426Research and development expense
    
    
    41,569
    
    
    
    725,464Stock-based compensation expense before taxes
    
    
    585,437
    
    
    
    1,610,890Related income tax benefits
    
    
    
    
    
    
    Stock-based compensation expense
    
    $
    585,437
    
    
    $
    1,610,890Net stock-based compensation expense per common
share  basic and diluted
    
    $
    0.01
    
    
    $
    0.02Stock-based compensation expense from:Stock options
    
    $
    585,437
    
    
    $
    1,610,890Share grant
    
    
    
    
    
    
    Restricted stock awards
    
    
    
    
    
    
    $
    585,437
    
    
    $
    1,610,890
  2005 Equity Incentive Plan and 2008 Omnibus Incentive Plan
    F-23




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##### Table of Contents



ADVENTRX Pharmaceuticals, Inc. and Subsidiaries   Notes to Consolidated Financial Statements
December 31, 2009
     Weighted-Weighted-
    
    
    AverageAverage
    
    
    Remaining
    
    
    AggregateExercise
    
    
    Contractual
    
    
    IntrinsicShares
    
    
    Price
    
    
    Years
    
    
    ValueOutstanding at December 31, 2008
    
    
    4,364,833
    
    
    $
    1.77Granted
    
    
    3,400,000
    
    
    $
    0.13Exercised
    
    
    
    
    
    
    Cancelled/forfeited/expired
    
    
    (1,905,833
    )
    
    $
    1.83Outstanding at December 31, 2009
    
    
    5,859,000
    
    
    $
    0.80
    
    
    
    8.56
    
    
    $
    748,000Options exercisable at December 31, 2009
    
    1,762,434
    
    
    $
    2.10
    
    
    
    6.83
    
    
    $
    Vested and expected to vest at December
31, 2009
    
    
    4,642,612
    
    
    $
    0.93
    
    
    
    8.39
    
    
    $
    542,581
  F-24




---



##### Table of Contents



ADVENTRX Pharmaceuticals, Inc. and Subsidiaries   Notes to Consolidated Financial Statements
December 31, 2009
    Years Ended December 31,2009
    
    
    2008Risk-free interest rate
    
    
    2.7
    %
    
    
    2.75  3.3
    %Dividend yield
    
    
    0.0
    %
    
    
    0.0
    %Expected volatility
    
    
    183
    %
    
    
    125  149
    %Weighted-average volatility
    
    
    183
    %
    
    
    146
    %Expected term (in years)
    
    6.0 years
    
    
    6.2 years
   Years Ended December 31,2009
    
    
    2008Risk-free interest rate
    
    
    N/A
    
    
    3.3  3.7
    %Dividend yield
    
    
    N/A
    
    
    0.0
    %Expected volatility
    
    
    N/A
    
    
    147
    %Contractual term (in years)
    
    
    N/A
    
    
    6.5  7.3 years
   F-25




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##### Table of Contents



ADVENTRX Pharmaceuticals, Inc. and Subsidiaries   Notes to Consolidated Financial Statements
December 31, 2009
  Options Outstanding
    
    
    Options ExercisableWeighted-Average
    
    
    Weighted-
    
    
    
    
    
    
    Weighted-Number
    
    
    Remaining
    
    
    Average
    
    
    Number
    
    
    AverageOutstanding
    
    
    Contractual
    
    
    Exercise
    
    
    Exercisable
    
    
    ExerciseRange of Exercise Price
    
    in 000s
    
    
    Life
    
    
    Price
    
    
    in 000s
    
    
    Price$0.13
    
    
    3,400
    
    
    
    9.55
    
    
    $
    0.13
    
    
    
    
    
    
    $
    0.00$0.37 to $2.50
    
    
    1,614
    
    
    
    7.36
    
    
    $
    0.92
    
    
    
    994
    
    
    $
    1.17$2.50 to $4.75
    
    
    845
    
    
    
    6.87
    
    
    $
    3.25
    
    
    
    768
    
    
    $
    3.295,859
    
    
    
    8.56
    
    
    $
    0.80
    
    
    
    1,762
    
    
    $
    2.10
 Employee Stock Purchase Plan
  (8)
    
    Commitments
 Operating Leases
    Year Ending December 31,2010
    
    $
    60,8632011
    
    
    5,267Total
    
    $
    66,130
  F-26




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##### Table of Contents



ADVENTRX Pharmaceuticals, Inc. and Subsidiaries   Notes to Consolidated Financial Statements
December 31, 2009
 (9)
    
    Material License Agreements
 Shin Poong Agreement
   Theragenex Agreement
   (10)
    
    Income Taxes
   F-27




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##### Table of Contents



ADVENTRX Pharmaceuticals, Inc. and Subsidiaries   Notes to Consolidated Financial Statements
December 31, 2009
  December 31,2009
    
    
    2008Income tax benefit at federal statutory rate
    
    $
    (3,851,000
    )
    
    $
    (9,060,000
    )State taxes
    
    
    2,000
    
    
    
    2,000R & D Credit
    
    
    (150,000
    )
    
    
    (310,000
    )Stock options
    
    
    770,000
    
    
    
    542,000Net operating true-ups
    
    
    (20,000
    )
    
    
    (1,600,000
    )Other
    
    
    60,000
    
    
    
    (49,000
    )Change in federal valuation allowance
    
    
    3,189,000
    
    
    
    10,475,000Total
    
    $
    
    
    
    $
    
  December 31,2009
    
    
    2008Deferred tax assets:Accrued expenses
    
    $
    85,538
    
    
    $
    248,776Stock options expense under ASC 718
    
    
    1,008,517
    
    
    
    1,677,809Net operating loss carry forwards
    
    
    37,484,836
    
    
    
    33,102,741Income tax credit carry forwards
    
    
    2,478,625
    
    
    
    2,262,374Property and equipment
    
    
    12,094
    
    
    
    41,056Intangibles
    
    
    2,360,396
    
    
    
    2,285,263Other
    
    
    6,553
    
    
    
    6,553Total deferred tax assets
    
    
    43,436,559
    
    
    
    39,624,572Less: valuation allowance
    
    
    (43,436,559
    )
    
    
    (39,624,572
    )Total deferred tax assets, net of valuation allowance
    
    $
    
    
    
    $
    
     F-28




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##### Table of Contents



ADVENTRX Pharmaceuticals, Inc. and Subsidiaries   Notes to Consolidated Financial Statements
December 31, 2009
     (11)
    
    Litigation
  (12)
    
    401(k)Plan
  (13)
    
    Segment Information
   F-29




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##### Table of Contents



ADVENTRX Pharmaceuticals, Inc. and Subsidiaries   Notes to Consolidated Financial Statements
December 31, 2009
 (14)
    
    Summary of Quarterly Financial Data (unaudited)
  Quarterly statements of operations data
 Quarters Endedfor 2009 (unaudited):
    
    March 31
    
    
    June 30
    
    
    September 30
    
    
    December 31Licensing revenue
    
    $
    300,000
    
    
    $
    
    
    
    $
    
    
    
    $
    Gross margin
    
    
    300,000
    
    
    
    
    
    
    
    
    
    
    
    Loss from operations
    
    
    (3,158,786
    )
    
    
    (2,552,485
    )
    
    
    (2,349,865
    )
    
    
    (3,224,549
    )Net loss
    
    
    (3,157,010
    )
    
    
    (2,595,541
    )
    
    
    (2,352,586
    )
    
    
    (3,219,921
    )Net loss applicable to common stock
    
    
    (3,157,010
    )
    
    
    (3,827,956
    )
    
    
    (2,728,675
    )
    
    
    (6,478,304
    )Basic and diluted net loss per share
    
    $
    (0.03
    )
    
    $
    (0.04
    )
    
    $
    (0.02
    )
    
    $
    (0.04
    )Basic and diluted weighted average
number of shares of common stock
outstanding
    
    
    90,252,572
    
    
    
    93,389,302
    
    
    
    119,480,719
    
    
    
    162,731,662
 Quarters Endedfor 2008 (unaudited):
    
    March 31
    
    
    June 30
    
    
    September 30
    
    
    December 31Licensing revenue
    
    $
    
    
    
    $
    500,000
    
    
    $
    
    
    
    $
    Gross margin
    
    
    
    
    
    
    500,000
    
    
    
    
    
    
    
    Loss from operations
    
    
    (6,232,280
    )
    
    
    (6,691,199
    )
    
    
    (6,856,013
    )
    
    
    (7,530,343
    )Net loss
    
    
    (5,933,072
    )
    
    
    (6,425,530
    )
    
    
    (6,776,863
    )
    
    
    (7,512,028
    )Basic and diluted net loss per share
    
    $
    (0.07
    )
    
    $
    (0.07
    )
    
    $
    (0.08
    )
    
    $
    (0.08
    )Basic and diluted weighted average
number of shares of common stock
outstanding
    
    
    90,252,572
    
    
    
    90,252,572
    
    
    
    90,252,572
    
    
    
    90,252,572
 (15)
    
    Severance Related Expenses
     F-30




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##### Table of Contents



ADVENTRX Pharmaceuticals, Inc. and Subsidiaries   Notes to Consolidated Financial Statements
December 31, 2009
      F-31




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##### Table of Contents



ADVENTRX Pharmaceuticals, Inc. and Subsidiaries   Notes to Consolidated Financial Statements
December 31, 2009
 (16)
    
    Subsequent Events
  3.73344597664961% Series E Convertible Preferred Stock
    Warrant Exercises
   F-32




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##### Table of Contents



ADVENTRX Pharmaceuticals, Inc. and Subsidiaries   Notes to Consolidated Financial Statements
December 31, 2009
 Management Appointments
  FDA Refusal-to-File ANX-530 NDA
   F-33




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##### Table of Contents



Exhibit Index
 Exhibit
    
    Description2.1
    (1)
    
    Agreement and Plan of Merger, dated April 7, 2006, among the registrant, Speed
Acquisition, Inc., SD Pharmaceuticals, Inc. and certain individuals named
therein (including exhibits thereto)3.1
    (2)
    
    Amended and Restated Certificate of Incorporation of the registrant3.2
    (3)
    
    Certificate of Amendment to the Amended and Restated Certificate of
Incorporation of the registrant dated October 5, 20093.3
    (4)
    
    Certificate of Designation of Preferences, Rights and Limitations of 0% Series A
Convertible Preferred Stock3.4
    (5)
    
    Certificate of Designation of Preferences, Rights and Limitations of 5% Series B
Convertible Preferred Stock3.5
    (6)
    
    Certificate of Designation of Preferences, Rights and Limitations of 5% Series C
Convertible Preferred Stock3.6
    (7)
    
    Certificate of Designation of Preferences, Rights and Limitations of 4.25660%
Series D Convertible Preferred Stock3.7
    (8)
    
    Certificate of Designation of Preferences, Rights and Limitations of
3.73344597664961% Series E Convertible Preferred Stock3.8
    (9)
    
    Amended and Restated Bylaws of the registrant (formerly known as Biokeys
Pharmaceuticals, Inc.)10.1
    (10)
    
    Securities Purchase Agreement, dated July 21, 2005, among the registrant and the
Purchasers (as defined therein)10.2
    (10)
    
    Rights Agreement, dated July 27, 2005, among the registrant, the Icahn
Purchasers and Viking (each as defined therein)10.3
    (11)
    
    First Amendment to Rights Agreement, dated September 22, 2006, among the
registrant and the Icahn Purchasers (as defined therein)10.4
    (12)
    
    Second Amendment to Rights Agreement, dated February 25, 2008, among the
registrant and the Icahn Purchasers (as defined therein)10.5
    (13)
    
    Third Amendment to Rights Agreement, dated August 26, 2009, among the registrant
and Icahn Purchasers (as defined therein)10.6
    (10)
    
    Form of $2.26 Common Stock Warrant issued on July 27, 2005 to Icahn Partners LP,
Icahn Partners Master Fund LP, High River Limited Partnership, Viking Global
Equities LP and VGE III Portfolio Ltd.10.7
    (10)
    
    Form of $2.26 Common Stock Warrant issued on July 27, 2005 to North Sound Legacy
Institutional Fund LLC and North Sound Legacy International Ltd.10.8
    (4)
    
    Engagement Letter Agreement, dated June 7, 2009, by and between the registrant
and Rodman & Renshaw, LLC10.9
    (4)
    
    Securities Purchase Agreement, date June 8, 2009, governing the issuance and
sale of the registrants 0% Series A Convertible Preferred Stock10.10
    (4)
    
    Form of Common Stock Purchase Warrant issued on June 12, 2009 by the registrant
to the purchasers of the registrants 0% Series A Convertible Preferred Stock
and to Rodman & Renshaw, LLC10.11
    (5)
    
    Engagement Letter Agreement, dated June 26, 2009, by and between the registrant
and Rodman & Renshaw, LLC




---



##### Table of Contents



Exhibit
    
    Description10.12
    (5)
    
    Securities Purchase Agreement, dated June 29, 2009, governing the issuance and
sale of the registrants 5% Series B Convertible Preferred Stock10.13
    (5)
    
    Form of Common Stock Purchase Warrant issued on July 6, 2009 by the registrant
to Rodman & Renshaw, LLC10.14
    (6)
    
    Engagement Letter Agreement, dated August 4, 2009, by and between the registrant
and Rodman & Renshaw, LLC10.15
    (6)
    
    Securities Purchase Agreement, dated August 5, 2009, governing the issuance and
sale of the registrants 5% Series C Convertible Preferred Stock10.16
    (6)
    
    Form of Common Stock Purchase Warrant issued on August 10, 2009 by the
registrant to Rodman & Renshaw, LLC10.17
    (14)
    
    Engagement Letter Agreement, dated September 24, 2009, by and between the
registrant and Rodman & Renshaw, LLC10.18
    (7)
    
    Engagement Letter Agreement, dated September 29, 2009, by and between the
registrant and Rodman & Renshaw, LLC10.19
    (7)
    
    Form of Securities Purchase Agreement, dated October 6, 2009, governing the
issuance and sale of the registrants 4.25660% Series D Convertible Preferred
Stock10.20
    (7)
    
    Form of Common Stock Purchase Warrant issued on October 9, 2009 by the
registrant to the purchasers of the registrants 4.25660% Series D Convertible
Preferred Stock and to Rodman & Renshaw, LLC10.21
    (8)
    
    Engagement Letter Agreement, dated January 3, 2010, by and between the
registrant and Rodman & Renshaw, LLC10.22
    (8)
    
    Securities Purchase Agreement, dated as of January 4, 2010, governing the
issuance and sale of the registrants 3.73344597664961% Series E Convertible
Preferred Stock10.23
    (8)
    
    Form of Common Stock Purchase Warrant issued on January 7, 2010 by the
registrant to the purchasers of the registrants 3.73344597664961% Series E
Convertible Preferred Stock and to Rodman & Renshaw, LLC10.24
    #(15)
    
    2005 Equity Incentive Plan10.25
    #(16)
    
    Form of Stock Option Agreement under the 2005 Equity Incentive Plan10.26
    #(17)
    
    Form of Stock Option Agreement under the 2005 Equity Incentive Plan (for
director option grants beginning in 2008)10.27
    #(18)
    
    Form of Stock Option Agreement under the 2005 Equity Incentive Plan (for option
grants to employees approved in March 2008)10.28
    #(2)
    
    Form of Restricted Share Award Agreement under the 2005 Equity Incentive Plan10.29
    #(19)
    
    2008 Omnibus Incentive Plan10.30
    #(20)
    
    Form of Notice of Grant of Restricted Stock Units under the 2008 Omnibus
Incentive Plan (for grants to employees in January 2009)10.31
    #(20)
    
    Form of Restricted Stock Units Agreement under the 2008 Omnibus Incentive Plan10.32
    #(21)
    
    Form of Non-Statutory Stock Option Grant Agreement (for directors) under the
2008 Omnibus Incentive Plan10.33
    #(21)
    
    Form of Non-Statutory/Incentive Stock Option Grant Agreement (for
consultants/employees) under the 2008 Omnibus Incentive Plan




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##### Table of Contents



Exhibit
    
    Description10.34
    #(22)
    
    Form of Incentive Stock Option Grant Agreement under the 2008 Omnibus Incentive
Plan (for grant to Brian M. Culley in July 2009)10.35
    #(22)
    
    Form of Incentive Stock Option Grant Agreement under the 2008 Omnibus Incentive
Plan (for grant to Patrick L. Keran in July 2009)10.36
    #(23)
    
    Form of letter, dated January 20, 2010, modifying options granted to Brian M.
Culley and Patrick L. Keran in July 200910.37
    #(23)
    
    Form of Incentive Stock Option Grant Agreement under the 2008 Omnibus Incentive
Plan (for grant to Brian M. Culley in January 2010)10.38
    #(23)
    
    Form of Incentive Stock Option Grant Agreement under the 2008 Omnibus Incentive
Plan (for grant to Patrick L. Keran in January 2010)10.39
    (17)
    
    License Agreement, dated December 10, 2005, among SD Pharmaceuticals, Latitude
Pharmaceuticals and Andrew Chen, including a certain letter, dated November 20,
2007, clarifying the scope of rights thereunder10.40
    (24)
    
    License Agreement, dated March 25, 2009, among the registrant, SD
Pharmaceuticals, Inc. and Shin Poong Pharmaceutical Co., Ltd.10.41
    (25)
    
    Standard Multi-Tenant Office Lease  Gross, dated June 3, 2004, between the
registrant and George V. Casey & Ellen M. Casey, Trustees of the Casey Family
Trust dated June 22, 199810.42
    (2)
    
    First Amendment to the Standard Multi-Tenant Office Lease  Gross, dated June 3,
2004 between the registrant and George V. & Ellen M. Casey, Trustees of the
Casey Family Trust dated June 22, 199810.43
    (26)
    
    Second Amendment to Standard Mutli-Tenant Officer Lease  Gross, dated July 22,
2009, by and among Westcore Mesa View, LLC, DD Mesa View LLC and the registrant10.44
    (27)
    
    Third Amendment to Standard Multi-Tenant Office Lease  Gross, dated December
10, 2009, by and among Westcore Mesa View, LLC, DD Mesa View, LLC and the
registrant10.45
    
    
    Fourth Amendment to Standard Multi-Tenant Office Lease  Gross, dated February
4, 2010, by and among Westcore Mesa View, LLC, DD Mesa View, LLC and the
registrant10.46
    #(28)
    
    Confidential Separation Agreement and General Release of All Claims, effective
December 4, 2008, between the registrant and Joan M. Robbins10.47
    #(17)
    
    Letter agreement regarding terms of separation with James A. Merritt, effective
as of February 12, 200810.48
    #(29)
    
    Letter Agreement regarding terms of separation with Gregory P. Hanson, dated
April 2, 200810.49
    #(29)
    
    Consulting Agreement, dated April 2, 2008, with Gregory P. Hanson10.50
    #(21)
    
    Offer letter, dated April 1, 2008, to Mark N.K. Bagnall (including Exhibits A, B
and C thereto)10.51
    #(24)
    
    Confidential Separation Agreement and General Release of All Claims, effective
January 8, 2009, and Consulting Agreement, dated December 31, 2008, between the
registrant and Mark N.K. Bagnall10.52
    #(30)
    
    Consulting Agreement, dated August 24, 2009, with Mark N.K. Bagnall10.53
    #(28)
    
    Confidential Separation Agreement and General Release of All Claims, effective
December 31, 2008, between the registrant and Evan M. Levine, including letter,
dated November 7, 2008, related thereto10.54
    #(31)
    
    Offer letter, dated November 15, 2004, to Brian M. Culley10.55
    #(20)
    
    Retention and Incentive Agreement, dated January 28, 2009 between the registrant
and Brian M. Culley




---



##### Table of Contents



Exhibit
    
    Description10.56
    #(24)
    
    Retention and Incentive Agreement, dated January 28, 2009, between the
registrant and Patrick L. Keran10.57
    #(24)
    
    Retention and Incentive Agreement, dated January 28, 2009, between the
registrant and Mark E. Erwin10.58
    #(24)
    
    Retention and Incentive Agreement, dated January 28, 2009, between the
registrant and Michele L. Yelmene10.59
    #
    
    Consulting Agreement, effective as of July 15, 2009, and Amendment to Consulting
Agreement, effective as of December 31, 2009, between the registrant and Michele
L. Yelmene10.60
    #(22)
    
    2009 Mid-Year Incentive Plan for Brian M. Culley and Patrick L. Keran10.61
    #(22)
    
    Retention and Severance Plan (as of July 21, 2009) for Brian M. Culley and
Patrick L. Keran10.62
    #(23)
    
    2010 Incentive Plan for Brian M. Culley and Patrick L. Keran10.63
    #
    
    Consulting Agreement, effective as of November 23, 2009, between the registrant
and Eric K. Rowinsky10.64
    #(32)
    
    Director Compensation Policy, adopted June 21, 200610.65
    #
    
    Director Compensation Policy, adopted January 25, 201010.66
    (33)
    
    Form of Director and Officer Indemnification Agreement21.1
    
    
    List of Subsidiaries23.1
    
    
    Consent of J.H. Cohn LLP, Independent Registered Public Accounting Firm31.1
    
    
    Certification of principal executive officer pursuant to Rule 13a-14(a)/15d-14(a)31.2
    
    
    Certification of principal financial officer pursuant to Rule 13a-14(a)/15d-14(a)32.1
    ±
    
    Certification of principal executive officer and principal financial officer
pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
 
 
    
    Indicates that confidential treatment has been requested or granted to
certain portions, which portions have been omitted and filed
separately with the SEC#
    
    Indicates management contract or compensatory plan±
    
    These certifications are being furnished solely to accompany this
report pursuant to 18 U.S.C. 1350, and are not being filed for
purposes of Section 18 of the Securities Exchange Act of 1934 and are
not to be incorporated by reference into any filing of the registrant,
whether made before or after the date hereof, regardless of any
general incorporation by reference language in such filing.(1)
    
    Filed with the registrants Amendment No. 1 to Current Report on Form 8-K/A on May 1, 2006
(SEC file number 001-32157-06796248)(2)
    
    Filed with the registrants Annual Report on Form 10-K on March 16, 2006 (SEC file number
001-32157-06693266)(3)
    
    Filed with the registrants Current Report on Form 8-K on October 13, 2009 (SEC file number
001-32157-091115090)(4)
    
    Filed with the registrants Current Report on Form 8-K on June 8, 2009 (SEC file number
001-32157-09878961)




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##### Table of Contents



(5)
    
    Filed with the registrants Current Report on Form 8-K on June 30, 2009 (SEC file number
001-32157-09917820)(6)
    
    Filed with the registrants Current Report on Form 8-K on August 5, 2009 (SEC file number
001-32157-09989205)(7)
    
    Filed with the registrants Amendment No. 3 to the Registration Statement on Form S-1 on
October 5, 2009 (SEC file number 333-160778-091107945)(8)
    
    Filed with the registrants Current Report on Form 8-K on January 4, 2010 (SEC file number
001-32157- 10500379)(9)
    
    Filed with the registrants Current Report on Form 8-K on December 15, 2008 (SEC file number
001-32157-081249921)(10)
    
    Filed with the registrants Quarterly Report on Form 10-Q on August 12, 2005 (SEC file number
001-32157-051022046)(11)
    
    Filed with the registrants Current Report on Form 8-K on September 22, 2006 (SEC file number
001-32157-061103268)(12)
    
    Filed with the registrants Current Report on Form 8-K on February 25, 2008 (SEC file number
001-32157 08638638)(13)
    
    Filed with the registrants Current Report on Form 8-K on September 1, 2009 (SEC file number
001-32157-091049161)(14)
    
    Filed with the registrants Amendment No. 2 to the Registration Statement on Form S-1 on
September 25, 2009 (SEC file number 333-160778-091087750)(15)
    
    Filed with the registrants Annual Report on Form 10-K on March 15, 2007 (SEC file number
001-32157-07697283)(16)
    
    Filed with the registrants Registration Statement on Form S-8 on July 13, 2005 (SEC file
number 333-126551-05951362)(17)
    
    Filed with registrants Annual Report on Form 10-K on March 17, 2008 (SEC file number
001-32157-08690952)(18)
    
    Filed with the registrants Quarterly Report on Form 10-Q on May 12, 2008 (SEC file number
001-32157-08820541)(19)
    
    Filed with the registrants Current Report on Form 8-K on June 2, 2008 (SEC file number
001-32157-08874724)(20)
    
    Filed with the registrants Current Report on Form 8-K on February 2, 2009 (SEC file number
001-32157- 09561715)(21)
    
    Filed with the registrants Quarterly Report on Form 10-Q on August 11, 2008 (SEC file number
001-32157-081005744)(22)
    
    Filed with the registrants Current Report on Form 8-K on July 22, 2009 (SEC file number
001-32157-09957353)(23)
    
    Filed with the registrants Current Report on Form 8-K on January 26, 2010 (SEC file number
001-32157- 10547818)(24)
    
    Filed with the registrants Quarterly Report on Form 10-Q on May 15, 2009 (SEC file number
001-32157-09878961)(25)
    
    Filed with the registrants Quarterly Report on Form 10-QSB on August 10, 2004 (SEC file
number 001-32157-04963741)(26)
    
    Filed with the registrants Current Report on Form 8-K on August 20, 2009 (SEC file number
001-32157-091025631)(27)
    
    Filed with the registrants Current Report on Form 8-K on December 24, 2009 (SEC file number
001-32157-091260100)




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##### Table of Contents



(28)
    
    Filed with the registrants Annual Report on Form 10-K on March 27, 2009 (SEC file number
001-32157-09708145)(29)
    
    Filed with the registrants Current Report on Form 8-K on April 16, 2008 (SEC file number
001-32157-08760483)(30)
    
    Filed with the registrants Current Report on Form 8-K on August 28, 2009 (SEC file number
001-32157-091043396)(31)
    
    Filed with the registrants Annual Report on Form 10-KSB on March 31, 2005 (SEC file number
001-32157-05719975)(32)
    
    Filed with the registrants Current Report on Form 8-K on June 23, 2006 (SEC file number
001-32157-06922676)(33)
    
    Filed with the registrants Current Report on Form 8-K on October 23, 2006 (SEC file number
001-32157-061156993)