##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 FOR THE QUARTERLY PERIOD ENDED NOVEMBER 30, 2008
 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 NUMBER 0-24050
 NORTHFIELD LABORATORIES INC.
  DELAWARE
    
    36-3378733(State or other jurisdiction
    
    (I.R.S. Employerof incorporation or organization)
    
    Identification Number)1560 SHERMAN AVENUE, SUITE 1000, EVANSTON,ILLINOIS
    
    60201-4800(Address of principal executive offices)
    
    (Zip Code)
  þ o
  Large accelerated filer
o
    
    Accelerated filer o
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)

    Smaller Reporting Company
þ
 o þ




---



##### 



TABLE OF CONTENTS
 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

1REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

2PART IITEM 1. FINANCIAL STATEMENTSITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

11ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

15ITEM 4. CONTROLS AND PROCEDURES

15Part IIITEM 1. Legal Proceedings

15ITEM 1A. Risk Factors

15ITEM 2. Submission of Matters to a Vote of Security Holders

16SIGNATURES

17EX-15EX-31.1EX-31.2EX-32.1EX-32.2




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##### Table of Contents



CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
    1




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
         2




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##### Table of Contents



NORTHFIELD LABORATORIES INC.
   November 30,
    
    
    May 31,2008
    
    
    2008(unaudited)AssetsCurrent assets:Cash and cash equivalents
    
    $
    5,029,721
    
    
    
    12,746,540Restricted cash
    
    
    77,125
    
    
    
    301,292Marketable securities
    
    
    4,997,683
    
    
    
    7,979,830Prepaid expenses
    
    
    466,087
    
    
    
    696,253Other current assets
    
    
    305,948
    
    
    
    Total current assets
    
    
    10,876,564
    
    
    
    21,723,915Property, plant, and equipment
    
    
    20,271,112
    
    
    
    19,747,948Accumulated depreciation
    
    
    (11,834,879
    )
    
    
    (11,506,730
    )Net property, plant, and equipment
    
    
    8,436,233
    
    
    
    8,241,218Other assets
    
    
    19,550
    
    
    
    19,550$
    19,332,347
    
    
    
    29,984,683Liabilities and Shareholders EquityCurrent liabilities:Accounts payable
    
    $
    1,654,539
    
    
    
    1,917,260Accrued expenses
    
    
    71,549
    
    
    
    111,637Government grant liability
    
    
    77,125
    
    
    
    301,292Accrued compensation and benefits
    
    
    709,914
    
    
    
    658,012Other current liabilities
    
    
    305,948
    
    
    
    Total current liabilities
    
    
    2,819,075
    
    
    
    2,988,201Other liabilities
    
    
    15,478
    
    
    
    14,392Total liabilities
    
    
    2,834,553
    
    
    
    3,002,593Shareholders equity:Preferred stock, $.01 par value. Authorized 5,000,000 shares;
none issued and outstanding
    
    
    
    
    
    
    Common stock, $.01 par value. Authorized 60,000,000 shares;
issued 26,960,233 at November 30, 2008 and 26,960,233 at
May 31, 2008
    
    
    269,602
    
    
    
    269,602Additional paid-in capital
    
    
    247,985,630
    
    
    
    246,954,375Deficit accumulated during the development stage
    
    
    (231,732,045
    )
    
    
    (220,216,494
    )16,523,187
    
    
    
    27,007,483Less cost of common shares in treasury; 1,717 shares and
1,717 shares, respectively
    
    
    (25,393
    )
    
    
    (25,393
    )Total shareholders equity
    
    
    16,497,794
    
    
    
    26,982,090$
    19,332,347
    
    
    
    29,984,683
  3




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##### Table of Contents



NORTHFIELD LABORATORIES INC.
  
 CumulativefromJune 19, 1985Three months ended November 30,
    
    
    Six months ended November 30,
    
    
    through2008
    
    
    2007
    
    
    2008
    
    
    2007
    
    
    November 30, 2008(unaudited)
    
    
    (unaudited)
    
    
    (unaudited)
    
    
    (unaudited)
    
    
    (unaudited)Revenues  license income
    
    $
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,000,000Costs and expenses:Research and development
    
    
    4,270,510
    
    
    
    3,940,402
    
    
    
    8,652,400
    
    
    
    7,717,904
    
    
    
    193,409,357General and administrative
    
    
    1,377,326
    
    
    
    1,481,547
    
    
    
    2,999,411
    
    
    
    2,991,830
    
    
    
    73,462,1575,647,836
    
    
    
    5,421,949
    
    
    
    11,651,811
    
    
    
    10,709,734
    
    
    
    266,871,514Other income and expense:Interest income
    
    
    54,006
    
    
    
    401,241
    
    
    
    136,260
    
    
    
    883,569
    
    
    
    32,297,624Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    83,234$
    54,006
    
    
    
    401,241
    
    
    
    136,260
    
    
    
    883,569
    
    
    
    32,214,390Net loss before cumulative effect of change
in accounting principle
    
    
    (5,593,830
    )
    
    
    (5,020,708
    )
    
    
    (11,515,551
    )
    
    
    (9,826,165
    )
    
    
    (231,657,124
    )Cumulative effect of change in
accounting principle
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    74,921Net loss
    
    $
    (5,593,830
    )
    
    
    (5,020,708
    )
    
    
    (11,515,551
    )
    
    
    (9,826,165
    )
    
    
    (231,732,045
    )Net loss per share  basic and diluted
    
    $
    (0.21
    )
    
    
    (0.19
    )
    
    
    (0.43
    )
    
    
    (0.36
    )
    
    
    (17.52
    )Shares used in calculation of
per share data  basic and diluted
    
    
    26,958,516
    
    
    
    26,938,461
    
    
    
    26,958,516
    
    
    
    26,925,310
    
    
    
    13,225,137
  4




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##### Table of Contents



NORTHFIELD LABORATORIES INC.
  
 Deficit
    
    
    
    
    
    
    
    
    
    
    TotalSeries A convertible
    
    
    Series B convertible
    
    
    
    
    
    
    accumulated
    
    
    
    
    
    
    
    
    
    
    share-Preferred stock
    
    
    Common stock
    
    
    preferred stock
    
    
    preferred stock
    
    
    Additional
    
    
    during the
    
    
    Deferred
    
    
    
    
    
    
    holdersNumber
    
    
    Aggregate
    
    
    Number
    
    
    Aggregate
    
    
    Number
    
    
    Aggregate
    
    
    Number
    
    
    Aggregate
    
    
    paid-in
    
    
    development
    
    
    compen-
    
    
    Treasury
    
    
    equityof shares
    
    
    amount
    
    
    of shares
    
    
    amount
    
    
    of shares
    
    
    amount
    
    
    of shares
    
    
    amount
    
    
    capital
    
    
    stage
    
    
    sation
    
    
    shares
    
    
    (deficit)Issuance of common stock on August 27, 1985
    
    
    
    
    
    $
    
    
    
    
    3,500,000
    
    
    $
    35,000
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    (28,000
    )
    
    $
    
    
    
    $
    
    
    
    
    
    
    
    $
    7,000Issuance of Series A convertible preferred stock at $4.00 per share on
August 27, 1985 (net of costs of issuance of $79,150)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    250,000
    
    
    
    250,000
    
    
    
    
    
    
    
    
    
    
    
    670,850
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    920,850Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (607,688
    )
    
    
    
    
    
    
    
    
    
    
    (607,688
    )Balance at May 31, 1986
    
    
    
    
    
    $
    
    
    
    
    3,500,000
    
    
    $
    35,000
    
    
    
    250,000
    
    
    $
    250,000
    
    
    
    
    
    
    $
    
    
    
    $
    642,850
    
    
    $
    (607,688
    )
    
    
    
    
    
    
    
    
    
    $
    320,162Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,429,953
    )
    
    
    
    
    
    
    
    
    
    
    (2,429,953
    )Deferred compensation relating to grant of stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,340,000
    
    
    
    
    
    
    
    (2,340,000
    )
    
    
    
    
    
    
    Amortization of deferred compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    720,000
    
    
    
    
    
    
    
    720,000Balance at May 31, 1987
    
    
    
    
    
    $
    
    
    
    
    3,500,000
    
    
    
    35,000
    
    
    
    250,000
    
    
    $
    250,000
    
    
    
    
    
    
    $
    
    
    
    $
    2,982,850
    
    
    $
    (3,037,641
    )
    
    $
    (1,620,000
    )
    
    
    
    
    
    $
    (1,389,791
    )Issuance of Series B convertible preferred stock at $35.68 per share on
August 14, 1987 (net of costs of issuance of $75,450)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    200,633
    
    
    
    200,633
    
    
    
    6,882,502
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,083,135Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,057,254
    )
    
    
    
    
    
    
    
    
    
    
    (3,057,254
    )Amortization of deferred compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    566,136
    
    
    
    
    
    
    
    566,136Balance at May 31, 1988
    
    
    
    
    
    $
    
    
    
    
    3,500,000
    
    
    $
    35,000
    
    
    
    250,000
    
    
    $
    250,000
    
    
    
    200,633
    
    
    
    200,633
    
    
    $
    9,865,352
    
    
    $
    (6,094,895
    )
    
    $
    (1,053,864
    )
    
    
    
    
    
    $
    3,202,226Issuance of common stock at $24.21 per share on June 7, 1988 (net of costs of issuance of
$246,000)
    
    
    
    
    
    
    
    
    
    
    413,020
    
    
    
    4,130
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,749,870
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,754,000Conversion of Series A convertible preferred stock to common stock on June 7, 1988
    
    
    
    
    
    
    
    
    
    
    1,250,000
    
    
    
    12,500
    
    
    
    (250,000
    )
    
    
    (250,000
    )
    
    
    
    
    
    
    
    
    
    
    237,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Conversion of Series B convertible preferred stock to common stock on June 7, 1988
    
    
    
    
    
    
    
    
    
    
    1,003,165
    
    
    
    10,032
    
    
    
    
    
    
    
    
    
    
    
    (200,633
    )
    
    
    (200,633
    )
    
    
    190,601
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercise of stock options at $2.00 per share
    
    
    
    
    
    
    
    
    
    
    47,115
    
    
    
    471
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    93,759
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    94,230Issuance of common stock at $28.49 per share on March 6, 1989 (net of costs of issuance
of $21,395)
    
    
    
    
    
    
    
    
    
    
    175,525
    
    
    
    1,755
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,976,855
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,978,610Issuance of common stock at $28.49 per share on March 30, 1989 (net of costs of
issuance of $10,697)
    
    
    
    
    
    
    
    
    
    
    87,760
    
    
    
    878
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,488,356
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,489,234Sale of options at $28.29 per share to purchase common stock at $.20 per share on
March 30, 1989 (net of costs of issuance of $4,162)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,443,118
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,443,118Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (791,206
    )
    
    
    
    
    
    
    
    
    
    
    (791,206
    )Deferred compensation relating to grant of stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    683,040
    
    
    
    
    
    
    
    (683,040
    )
    
    
    
    
    
    
    Amortization of deferred compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    800,729
    
    
    
    
    
    
    
    800,729Balance at May 31, 1989
    
    
    
    
    
    $
    
    
    
    
    6,476,585
    
    
    $
    64,766
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    35,728,451
    
    
    $
    (6,886,101
    )
    
    $
    (936,175
    )
    
    
    
    
    
    $
    27,970,941Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,490,394
    )
    
    
    
    
    
    
    
    
    
    
    (3,490,394
    )Deferred compensation relating to grant of stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    699,163
    
    
    
    
    
    
    
    (699,163
    )
    
    
    
    
    
    
    Amortization of deferred compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    546,278
    
    
    
    
    
    
    
    546,278Balance at May 31, 1990
    
    
    
    
    
    $
    
    
    
    
    6,476,585
    
    
    $
    64,766
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    36,427,614
    
    
    $
    (10,376,495
    )
    
    $
    (1,089,060
    )
    
    
    
    
    
    $
    25,026,825Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,579,872
    )
    
    
    
    
    
    
    
    
    
    
    (5,579,872
    )Amortization of deferred compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    435,296
    
    
    
    
    
    
    
    435,296Balance at May 31, 1991
    
    
    
    
    
    $
    
    
    
    
    6,476,585
    
    
    $
    64,766
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    36,427,614
    
    
    $
    (15,956,367
    )
    
    $
    (653,764
    )
    
    
    
    
    
    $
    19,882,249Exercise of stock warrants at $5.60 per share
    
    
    
    
    
    
    
    
    
    
    90,000
    
    
    
    900
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    503,100
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    504,000Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,006,495
    )
    
    
    
    
    
    
    
    
    
    
    (7,006,495
    )Amortization of deferred compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    254,025
    
    
    
    
    
    
    
    254,025Balance at May 31, 1992
    
    
    
    
    
    $
    
    
    
    
    6,566,585
    
    
    $
    65,666
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    36,930,714
    
    
    $
    (22,962,862
    )
    
    $
    (399,739
    )
    
    
    
    
    
    $
    13,633,779Exercise of stock warrants at $7.14 per share
    
    
    
    
    
    
    
    
    
    
    15,000
    
    
    
    150
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    106,890
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    107,040Issuance of common stock at $15.19 per share on April 19, 1993 (net of costs of issuance
of $20,724)
    
    
    
    
    
    
    
    
    
    
    374,370
    
    
    
    3,744
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,663,710
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,667,454Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,066,609
    )
    
    
    
    
    
    
    
    
    
    
    (8,066,609
    )Amortization of deferred compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    254,025
    
    
    
    
    
    
    
    254,025Balance at May 31, 1993
    
    
    
    
    
    $
    
    
    
    
    6,955,955
    
    
    $
    69,560
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    42,701,314
    
    
    $
    (31,029,471
    )
    
    $
    (145,714
    )
    
    
    
    
    
    $
    11,595,689Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,363,810
    )
    
    
    
    
    
    
    
    
    
    
    (7,363,810
    )Issuance of common stock at $6.50 per share on May 26, 1994 (net of costs of issuance
of $2,061,149)
    
    
    
    
    
    
    
    
    
    
    2,500,000
    
    
    
    25,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,163,851
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,188,851Cancellation of stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (85,400
    )
    
    
    
    
    
    
    85,400
    
    
    
    
    
    
    
    Amortization of deferred compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    267
    
    
    
    
    
    
    
    267Balance at May 31, 1994
    
    
    
    
    
    $
    
    
    
    
    9,455,955
    
    
    $
    94,560
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    56,779,765
    
    
    $
    (38,393,281
    )
    
    $
    (60,047
    )
    
    
    
    
    
    $
    18,420,997Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,439,013
    )
    
    
    
    
    
    
    
    
    
    
    (7,439,013
    )Issuance of common stock at $6.50 per share on June 20, 1994 (net of issuance costs of
$172,500)
    
    
    
    
    
    
    
    
    
    
    375,000
    
    
    
    3,750
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,261,250
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,265,000Exercise of stock options at $7.14 per share
    
    
    
    
    
    
    
    
    
    
    10,000
    
    
    
    100
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    71,300
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    71,400Exercise of stock options at $2.00 per share
    
    
    
    
    
    
    
    
    
    
    187,570
    
    
    
    1,875
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    373,264
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    375,139Cancellation of stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (106,750
    )
    
    
    
    
    
    
    106,750
    
    
    
    
    
    
    
    Amortization of deferred compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (67,892
    )
    
    
    
    
    
    
    (67,892
    )Balance at May 31, 1995
    
    
    
    
    
    $
    
    
    
    
    10,028,525
    
    
    $
    100,285
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    59,378,829
    
    
    $
    (45,832,294
    )
    
    $
    (21,189
    )
    
    
    
    
    
    $
    13,625,631Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,778,875
    )
    
    
    
    
    
    
    
    
    
    
    (4,778,875
    )Issuance of common stock at $17.75 per share on August 9, 1995 (net of issuance costs
of $3,565,125)
    
    
    
    
    
    
    
    
    
    
    2,925,000
    
    
    
    29,250
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    48,324,374
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    48,353,624Issuance of common stock at $17.75 per share on September 11, 1995 (net of issuance
costs of $423,238)
    
    
    
    
    
    
    
    
    
    
    438,750
    
    
    
    4,388
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,360,187
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,364,575Exercise of stock options at $2.00 per share
    
    
    
    
    
    
    
    
    
    
    182,380
    
    
    
    1,824
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    362,937
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    364,761Exercise of stock options at $6.38 per share
    
    
    
    
    
    
    
    
    
    
    1,500
    
    
    
    15
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,555
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,570Exercise of stock options at $7.14 per share
    
    
    
    
    
    
    
    
    
    
    10,000
    
    
    
    100
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    71,300
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    71,400Cancellation of stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (80,062
    )
    
    
    
    
    
    
    80,062
    
    
    
    
    
    
    
    Amortization of deferred compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (62,726
    )
    
    
    
    
    
    
    (62,726
    )Balance at May 31, 1996
    
    
    
    
    
    $
    
    
    
    
    13,586,155
    
    
    $
    135,862
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    115,427,120
    
    
    $
    (50,611,169
    )
    
    $
    (3,853
    )
    
    
    
    
    
    $
    64,947,960
  5




---



##### Table of Contents



NORTHFIELD LABORATORIES INC.
  
 Deficit
    
    
    
    
    
    
    
    
    
    
    TotalSeries A convertible
    
    
    Series B convertible
    
    
    
    
    
    
    accumulated
    
    
    
    
    
    
    
    
    
    
    share-Preferred stock
    
    
    Common stock
    
    
    preferred stock
    
    
    preferred stock
    
    
    Additional
    
    
    during the
    
    
    Deferred
    
    
    
    
    
    
    holdersNumber
    
    
    Aggregate
    
    
    Number
    
    
    Aggregate
    
    
    Number
    
    
    Aggregate
    
    
    Number
    
    
    Aggregate
    
    
    paid-in
    
    
    development
    
    
    compen-
    
    
    Treasury
    
    
    equityof shares
    
    
    amount
    
    
    of shares
    
    
    amount
    
    
    of shares
    
    
    amount
    
    
    of shares
    
    
    amount
    
    
    capital
    
    
    stage
    
    
    sation
    
    
    shares
    
    
    (deficit)Net loss
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    (4,245,693
    )
    
    $
    
    
    
    $
    
    
    
    $
    (4,245,693
    )Exercise of stock options at $0.20 per share
    
    
    
    
    
    
    
    
    
    
    263,285
    
    
    
    2,633
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,025
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    52,658Exercise of stock options at $2.00 per share
    
    
    
    
    
    
    
    
    
    
    232,935
    
    
    
    2,329
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    463,540
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    465,869Exercise of stock options at $7.14 per share
    
    
    
    
    
    
    
    
    
    
    10,000
    
    
    
    100
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    71,300
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    71,400Amortization of deferred compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,569
    
    
    
    
    
    
    
    2,569Balance at May 31, 1997
    
    
    
    
    
    $
    
    
    
    
    14,092,375
    
    
    $
    140,924
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    116,011,985
    
    
    $
    (54,856,862
    )
    
    $
    (1,284
    )
    
    $
    
    
    
    $
    61,294,763Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,883,378
    )
    
    
    
    
    
    
    
    
    
    
    (5,883,378
    )Exercise of stock options at $7.14 per share
    
    
    
    
    
    
    
    
    
    
    5,000
    
    
    
    50
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35,650
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35,700Amortization of deferred compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,284
    
    
    
    
    
    
    
    1,284Balance at May 31, 1998
    
    
    
    
    
    $
    
    
    
    
    14,097,375
    
    
    $
    140,974
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    116,047,635
    
    
    $
    (60,740,240
    )
    
    $
    
    
    
    $
    
    
    
    $
    55,448,369Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,416,333
    )
    
    
    
    
    
    
    
    
    
    
    (7,416,333
    )Non-cash compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,354
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,354Exercise of stock options at $7.14 per share
    
    
    
    
    
    
    
    
    
    
    17,500
    
    
    
    175
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    124,775
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    124,950Exercise of stock warrants at $8.00 per share
    
    
    
    
    
    
    
    
    
    
    125,000
    
    
    
    1,250
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    998,750
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,000,000Balance at May 31, 1999
    
    
    
    
    
    $
    
    
    
    
    14,239,875
    
    
    $
    142,399
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    117,185,514
    
    
    $
    (68,156,573
    )
    
    $
    
    
    
    $
    
    
    
    $
    49,171,340Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,167,070
    )
    
    
    
    
    
    
    
    
    
    
    (9,167,070
    )Non-cash compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    57,112
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    57,112Exercise of stock options at $13.38 per share
    
    
    
    
    
    
    
    
    
    
    2,500
    
    
    
    25
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33,425
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33,450Balance at May 31, 2000
    
    
    
    
    
    $
    
    
    
    
    14,242,375
    
    
    $
    142,424
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    117,276,051
    
    
    $
    (77,323,643
    )
    
    $
    
    
    
    $
    
    
    
    $
    40,094,832Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,174,609
    )
    
    
    
    
    
    
    
    
    
    
    (10,174,609
    )Non-cash compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercise of stock options at $6.38 per share
    
    
    
    
    
    
    
    
    
    
    6,000
    
    
    
    60
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    38,220
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    38,280Exercise of stock options at $10.81 per share
    
    
    
    
    
    
    
    
    
    
    17,500
    
    
    
    175
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    189,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    189,175Balance at May 31, 2001
    
    
    
    
    
    $
    
    
    
    
    14,265,875
    
    
    $
    142,659
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    117,503,271
    
    
    $
    (87,498,252
    )
    
    $
    
    
    
    $
    
    
    
    $
    30,147,678Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,717,360
    )
    
    
    
    
    
    
    
    
    
    
    (10,717,360
    )Balance at May 31, 2002
    
    
    
    
    
    $
    
    
    
    
    14,265,875
    
    
    $
    142,659
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    117,503,271
    
    
    $
    (98,215,612
    )
    
    $
    
    
    
    $
    
    
    
    $
    19,430,318Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,250,145
    )
    
    
    
    
    
    
    
    
    
    
    (12,250,145
    )Balance at May 31, 2003
    
    
    
    
    
    $
    
    
    
    
    14,265,875
    
    
    
    142,659
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    117,503,271
    
    
    $
    (110,465,757
    )
    
    $
    
    
    
    $
    
    
    
    $
    7,180,173Issuance of common stock at $5.60 per share on
July 28, 2003 (net of costs of issuance of $909,229)
    
    
    
    
    
    
    
    
    
    
    1,892,857
    
    
    
    18,928
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,671,843
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,690,771Issuance of common stock to directors at $6.08
per share on October 30, 2003
    
    
    
    
    
    
    
    
    
    
    12,335
    
    
    
    123
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    74,877
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    75,000Deferred compensation related to stock grants
    
    
    
    
    
    
    
    
    
    
    25,500
    
    
    
    255
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    190,995
    
    
    
    
    
    
    
    (191,250
    )
    
    
    
    
    
    
    Amortization of deferred compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35,630
    
    
    
    
    
    
    
    35,630Issuance of common stock at $5.80 per share on January
29, 2004 (net of costs of issuance of $1,126,104)
    
    
    
    
    
    
    
    
    
    
    2,585,965
    
    
    
    25,860
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,846,633
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,872,493Issuance of common stock at $5.80 per share on February
18, 2004 (net of costs of issuance of $116,423)
    
    
    
    
    
    
    
    
    
    
    237,008
    
    
    
    2,370
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,255,853
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,258,223Issuance of common stock at $5.80 per share on April
15, 2004 (net of costs of issuance of $192,242)
    
    
    
    
    
    
    
    
    
    
    409,483
    
    
    
    4,095
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,178,664
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,182,759Issuance of common stock at $12.00 per share on May
18, 2004 (net of costs of issuance of $1,716,831.36)
    
    
    
    
    
    
    
    
    
    
    1,954,416
    
    
    
    19,544
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21,716,616
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21,736,160Exercise of stock options at $6.38 per share
    
    
    
    
    
    
    
    
    
    
    15,000
    
    
    
    150
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    95,550
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    95,700Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14,573,798
    )
    
    
    
    
    
    
    
    
    
    
    (14,573,798
    )Balance at May 31, 2004
    
    
    
    
    
    $
    

    
    
    

    21,398,439
    
    
    $
    213,984
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    166,534,302
    
    
    $
    (125,039,555
    )
    
    $
    (155,620
    )
    
    $
    
    
    
    $
    41,553,111Deferred compensation related to stock grants
    
    
    
    
    
    
    
    
    
    
    5,500
    
    
    
    55
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    71,055
    
    
    
    
    
    
    
    (71,110
    )
    
    
    
    
    
    
    Amortization of deferred compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    122,121
    
    
    
    
    
    
    
    122,121Exercise of stock options between $5.08 and $14.17 per
share
    
    
    
    
    
    
    
    
    
    
    167,875
    
    
    
    1,679
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,739,585
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,741,264Cost of shares in treasury, 1,717 shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (25,393
    )
    
    
    (25,393
    )Issuance of common stock to directors at $12.66 per
share on September 21, 2004
    
    
    
    
    
    
    
    
    
    
    5,925
    
    
    
    59
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    74,941
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    75,000Issuance of common stock at $15.00 per share on February
9, 2005 (net of costs of issuance of $4,995,689)
    
    
    
    
    
    
    
    
    
    
    5,175,000
    
    
    
    51,750
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    72,577,561
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    72,629,311Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (20,321,456
    )
    
    
    
    
    
    
    
    
    
    
    (20,321,456
    )Balance at May 31, 2005
    
    
    
    
    
    $
    

    
    
    

    26,752,739
    
    
    $
    267,527
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    240,997,444
    
    
    $
    (145,361,011
    )
    
    $
    (104,609
    )
    
    $
    (25,393
    )
    
    $
    95,773,958Amortization of deferred compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    95,550
    
    
    
    
    
    
    
    95,550Exercise of stock options at $7.13 and $10.66 per share
    
    
    
    
    
    
    
    
    
    
    2,875
    
    
    
    29
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,295
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,324Issuance of common stock to directors at $13.05 per
share on September 29, 2005
    
    
    
    
    
    
    
    
    
    
    5,750
    
    
    
    57
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    74,943
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    75,000Issuance of common stock to director at $13.21 per
share on October 3, 2005
    
    
    
    
    
    
    
    
    
    
    1,135
    
    
    
    12
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,988
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,000Issuance of common stock to director at $10.67 per
share on February 24, 2006
    
    
    
    
    
    
    
    
    
    
    1,406
    
    
    
    14
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,986
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,000Exercise of stock options at $10.66, $5.15 and $11.09
per share
    
    
    
    
    
    
    
    
    
    
    8,000
    
    
    
    80
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    65,075
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    65,155Exercise of stock options at $10.66 and $7.13 per share
    
    
    
    
    
    
    
    
    
    
    2,750
    
    
    
    28
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26,640
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26,668Exercise of stock options at $5.15 and $7.13 per share
    
    
    
    
    
    
    
    
    
    
    3,000
    
    
    
    30
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,905
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,935Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (26,775,418
    )
    
    
    
    
    
    
    
    
    
    
    (26,775,418
    )Balance at May 31, 2006
    
    
    
    
    
    $
    
    
    
    

    26,777,655
    
    
    $
    267,777
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    241,240,276
    
    
    $
    (172,136,429
    )
    
    $
    (9,059
    )
    
    $
    (25,393
    )
    
    $
    69,337,172Eliminate remaining deferred compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,059
    )
    
    
    
    
    
    
    9,059
    
    
    
    
    
    
    
    Exercise of stock options at $5.15 and $7.13 per share
    
    
    
    
    
    
    
    
    
    
    2,750
    
    
    
    28
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,105
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,133Exercise of stock options at $7.13 per share
    
    
    
    
    
    
    
    
    
    
    750
    
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,348
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,355Issuance of common stock to directors at $13.03 per share
on September 20, 2006
    
    
    
    
    
    
    
    
    
    
    6,912
    
    
    
    69
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    89,931
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    90,000Exercise of stock options at $11.44 per share
    
    
    
    
    
    
    
    
    
    
    10,000
    
    
    
    100
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    114,300
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    114,400Exercise of stock options at $5.15, $11.92 and $13.21
per share
    
    
    
    
    
    
    
    
    
    
    3,125
    
    
    
    31
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24,646
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24,677Exercise of stock options at $5.08 and $6.08 per share
    
    
    
    
    
    
    
    
    
    
    15,000
    
    
    
    150
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    81,050
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    81,200Exercise of stock options at $5.15 per share
    
    
    
    
    
    
    
    
    
    
    3,000
    
    
    
    30
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,420
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,450Exercise of stock options at $11.92 per share
    
    
    
    
    
    
    
    
    
    
    375
    
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,466
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,470Exercise of warrants at $6.88 per share
    
    
    
    
    
    
    
    
    
    
    96,974
    
    
    
    969
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    666,211
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    667,180Share-based compenstion
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,655,849
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,655,849Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (27,671,177
    )
    
    
    
    
    
    
    
    
    
    
    (27,671,177
    )Balance at May 31, 2007
    
    
    
    
    
    $
    
    
    
    
    26,916,541
    
    
    $
    269,165
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    244,905,543
    
    
    $
    (199,807,606
    )
    
    $
    
    
    
    $
    (25,393
    )
    
    $
    45,341,709Issuance of common stock to directors at $2.06 per
share on September 25, 2007
    
    
    
    
    
    
    
    
    
    
    43,692
    
    
    
    437
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    89,563
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    90,000Share-based compenstion
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,959,269
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,959,269Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (20,408,888
    )
    
    
    
    
    
    
    
    
    
    
    (20,408,888
    )Balance at May 31, 2008
    
    
    
    
    
    $
    
    
    
    
    26,960,233
    
    
    $
    269,602
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    246,954,375
    
    
    $
    (220,216,494
    )
    
    $
    
    
    
    $
    (25,393
    )
    
    $
    26,982,090Share-based compenstion
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,031,255
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,031,255Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,515,551
    )
    
    
    
    
    
    
    
    
    
    
    (11,515,551
    )Balance at November 30, 2008
    
    
    
    
    
    $
    
    
    
    
    26,960,233
    
    
    $
    269,602
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    247,985,630
    
    
    $
    (231,732,045
    )
    
    $
    
    
    
    $
    (25,393
    )
    
    $
    16,497,794
  6




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##### Table of Contents



NORTHFIELD LABORATORIES INC.
  
 CumulativefromJune 19, 1985Six months ended
    
    throughNovember 30, 2008
    
    November 30, 2007
    
    November 30, 2008(unaudited)
    
    (unaudited)
    
    (unaudited)Cash flows from operating activities:Net loss
    
    $
    (11,515,551
    )
    
    
    (9,826,165
    )
    
    
    (231,732,045
    )Adjustments to reconcile net loss to net
cash used in operating activities:Marketable security amortization
    
    
    (99,010
    )
    
    
    (335,685
    )
    
    
    (4,132,024
    )Depreciation and amortization
    
    
    337,419
    
    
    
    324,954
    
    
    
    20,411,561Share-based compensation
    
    
    1,031,255
    
    
    
    1,176,218
    
    
    
    9,887,397Loss of sale of equipment
    
    
    3,397
    
    
    
    
    
    
    
    91,908Changes in assets and liabilities:Restricted cash
    
    
    224,167
    
    
    
    (1,155,470
    )
    
    
    982,379Prepaid expenses
    
    
    230,166
    
    
    
    69,737
    
    
    
    (675,298
    )Other current assets
    
    
    (305,948
    )
    
    
    148,016
    
    
    
    (2,202,199
    )Other assets
    
    
    
    
    
    
    
    
    
    
    55,791Accounts payable
    
    
    (445,611
    )
    
    
    (2,259,895
    )
    
    
    1,471,649Accrued expenses
    
    
    (40,088
    )
    
    
    21,773
    
    
    
    71,549Government grant liability
    
    
    (224,167
    )
    
    
    1,155,470
    
    
    
    (982,379
    )Accrued compensation and benefits
    
    
    51,902
    
    
    
    95,220
    
    
    
    709,914Other current liabilities
    
    
    305,948
    
    
    
    
    
    
    
    313,379Other liabilities
    
    
    1,086
    
    
    
    4,466
    
    
    
    8,047Net cash used in operating activities
    
    
    (10,445,035
    )
    
    
    (10,581,361
    )
    
    
    (205,720,371
    )Cash flows from investing activities:Purchase of property, plant, equipment, and
capitalized engineering costs
    
    
    (352,941
    )
    
    
    (213,227
    )
    
    
    (28,615,064
    )Proceeds from sale of land and equipment
    
    
    
    
    
    
    
    
    
    
    1,863,023Proceeds from matured marketable securities
    
    
    16,000,000
    
    
    
    35,946,753
    
    
    
    777,808,105Proceeds from sale of marketable securities
    
    
    
    
    
    
    
    
    
    
    7,141,656Purchase of marketable securities
    
    
    (12,918,843
    )
    
    
    (28,865,348
    )
    
    
    (785,821,200
    )Net cash provided by (used in) investing activities
    
    
    2,728,216
    
    
    
    6,868,178
    
    
    
    (27,623,480
    )Cash flows from financing activities:Proceeds from issuance of common stock
    
    
    
    
    
    
    
    
    
    
    237,055,000Payment of common stock issuance costs
    
    
    
    
    
    
    
    
    
    
    (14,128,531
    )Proceeds from issuance of preferred stock
    
    
    
    
    
    
    
    
    
    
    6,644,953Proceeds from sale of stock options to purchase common shares
    
    
    
    
    
    
    
    
    
    
    7,443,118Proceeds from issuance of notes payable
    
    
    
    
    
    
    
    
    
    
    1,500,000Repayment of notes payable
    
    
    
    
    
    
    
    
    
    
    (140,968
    )Net cash provided by financing activities
    
    
    
    
    
    
    
    
    
    
    238,373,572Net increase (decrease) in cash
    
    
    (7,716,819
    )
    
    
    (3,713,183
    )
    
    
    5,029,721Cash at beginning of period
    
    
    12,746,540
    
    
    
    23,224,026
    
    
    
    Cash at end of period
    
    $
    5,029,721
    
    
    
    19,510,843
    
    
    
    5,029,721Supplemental Schedule of Noncash Financing Activities :Exercise of stock option, 5,000 shares in exchange for
1,717 treasury shares.
    
    $
    
    
    
    
    
    
    
    
    25,393
  7




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##### Table of Contents



Northfield Laboratories Inc.
(a company in the development stage)
 Notes to the Financial Statements
 November 30, 2008
(unaudited)
 (1) BASIS OF PRESENTATION
  (2) GOING CONCERN UNCERTAINTY
   (3) USE OF ESTIMATES
  (4) COMPUTATION OF NET LOSS PER SHARE
  (5) SHARE-BASED COMPENSATION
  8




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##### Table of Contents



Three Months Ended
    
    
    Six Months EndedNovember 30,
    
    
    November 30,
    
    
    November 30,
    
    
    November 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Fair Value
    
    $
    6,354
    
    
    $
    98,800
    
    
    $
    6,354
    
    
    $
    681,500Expected volatility
    
    
    108.93
    %
    
    
    96.47
    %
    
    
    108.93
    %
    
    
    95.9
    %Risk-free interest rate
    
    
    2.76
    %
    
    
    4.22
    %
    
    
    2.76
    %
    
    
    4.82
    %Dividend yield
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Expected lives
    
    6.1 years
    
    6.2 years
    
    6.1 years
    
    6.29 years
 9




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##### Table of Contents



Weighted AverageWeighted
    
    
    RemainingRange of
    
    
    Average
    
    
    Contractual Term
    
    
    Aggregate IntrinsicShares
    
    
    Exercise Prices
    
    
    Exercise Price
    
    
    (years)
    
    
    ValueOutstanding at May 31, 2008
    
    
    2,090,125
    
    
    $
    1.36$18.55
    
    
    $
    8.32Granted at Fair Value
    
    
    0
    
    
    
    
    
    
    
    Exercised
    
    
    0
    
    
    
    
    
    
    
    Expired
    
    
    0
    
    
    
    
    
    
    
    Cancelled
    
    
    0
    
    
    
    
    
    
    
    Outstanding at August 31, 2008
    
    
    2,090,125
    
    
    $
    1.36$18.55
    
    
    $
    8.32
    
    
    
    6.52
    
    
    $
    0Exercisable at August 31, 2008
    
    
    1,553,500
    
    
    $
    1.36$18.55
    
    
    $
    8.72
    
    
    
    6.00
    
    
    $
    0Granted at Fair Value
    
    
    20,000
    
    
    $
    0.38
    
    
    $
    0.38Exercised
    
    
    0
    
    
    
    
    
    
    
    Expired
    
    
    0
    
    
    
    
    
    
    
    Cancelled
    
    
    57,500
    
    
    $
    1.36$13.42

    
    
    $
    3.80Outstanding at November 30, 2008
    
    
    2,052,625
    
    
    $
    0.38$18.55
    
    
    $
    8.37
    
    
    
    6.25
    
    
    $
    6,400Exercisable at November 30, 2008
    
    
    1,562,875
    
    
    $
    1.36$18.55
    
    
    $
    8.88
    
    
    
    5.73
    
    
    $
    0
  (6) RESTRICTED CASH
    (7) MARKETABLE SECURITIES
   10




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##### Table of Contents



(8) MISCELLANEOUS RECEIVABLE
  (9) PROPERTY, PLANT & EQUIPMENT
   (10) INCOME TAXES
  (11) LEGAL PROCEEDINGS
  
 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
 RECENT DEVELOPMENTS
 ®
 RESULTS OF OPERATIONS
  11




---



##### Table of Contents



OPERATING EXPENSES
         INTEREST INCOME
    12




---



##### Table of Contents



NET LOSS
   LIQUIDITY AND CAPITAL RESOURCES
       CRITICAL ACCOUNTING POLICIES
  SHARE-BASED COMPENSATION
   13




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##### Table of Contents



NET DEFERRED TAX ASSETS VALUATION
  CONTRACTUAL OBLIGATIONS
  Less than
    
    1  3Contractual Obligations
    
    Total
    
    One Year
    
    YearsLease Obligations (1)
    
    $
    294,871
    
    
    $
    294,871
    
    
    
    Other Obligations (2)
    
    $
    2,852,535
    
    
    $
    2,852,535
    
    
    
    Total Contractual Cash Obligations
    
    $
    3,147,406
    
    
    $
    3,147,406
    
    
    
    
 
 (1)
    
    The lease for our Evanston headquarters is cancelable with six months notice combined with a
termination payment equal to three months base rent at any time after February 14, 2009. If
the lease is cancelled as of February 15, 2009, unamortized broker commissions of $17,470 would
also be due.During the third fiscal quarter of 2009, we expect to make a payment of approximately
$110,000 to terminate the lease for our corporate office in Evanston, Illinois. In the first
 quarter of fiscal 2010 (June 2009), we will be consolidating our operations at our owned
Mt. Prospect, Illinois facility.(2)
    
    Represents payments required to be made upon termination of
employment of our officers. Figures shown represent compensation payable upon the termination of the employment
of these officers for reasons other than death, disability, cause or voluntary termination of
employment by the officers other than for good reason. Additional payments may be
required in connection with a termination of employment of
certain executive officers following a change in control of Northfield. RECENT ACCOUNTING PRONOUNCEMENTS
   . .
 14




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##### Table of Contents



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
 
 
 ITEM 4. CONTROLS AND PROCEDURES.
  
 Part II
 OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 Item 1A. Risk Factors.
 The following risk factor should be read in conjunction with our Annual Report on Form 10-K for the
fiscal year ended May 31, 2008, including the other risk factors identified within the Annual
Report.
 Our financial resources are limited and we will need to raise additional capital in the future to
continue our business.
 15




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##### Table of Contents



Item 2. Submission of Matters to a Vote of Security Holders
  Nominee
    
    For
    
    WithheldSteven A. Gould, M.D.
    
    
    21,263,700
    
    
    
    3,129,674John F. Bierbaum
    
    
    21,329,858
    
    
    
    3,063,516Bruce S. Chelberg
    
    
    21,346,789
    
    
    
    3,046,585Alan L. Heller
    
    
    21,408,592
    
    
    
    2,984,782Paul M. Ness, M.D.
    
    
    20,211,927
    
    
    
    4,181,447David A. Savner
    
    
    21,478,486
    
    
    
    2,914,888Edward C. Wood, Jr.
    
    
    21,513,802
    
    
    
    2,879,572
   Proposal
    
    For
    
    Against
    
    Abstain
    
    Non-VotesThe proposal to ratify the
appointment of KPMG LLP
as the independent registered public accounting firm for the
Company to serve for the Companys
2009 fiscal year was approved.
    
    
    22,605,950
    
    
    
    1,392,550
    
    
    
    394,874
    
    
    
    0The proposal to amend the 2003 Equity
Compensation Plan to increase the
number of common stock awards
available under the plan and increase
the annual limits on the number of shares
that may be awarded to participants was
not approved.
    
    
    9,243,960
    
    
    
    5,577,121
    
    
    
    144,864
    
    
    
    9,427,429The proposal to amend the Companys
restated certificate of incorporation
to effect a reverse split of the
outstanding shares of the Companys
common stock was not approved.
    
    
    18,340,001
    
    
    
    5,912,817
    
    
    
    140,556
    
    
    
    0
 16




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##### Table of Contents



SIGNATURES
   Signature
    
    Title/s/ Steven A. Gould

Steven A. Gould, M.D.
    
    Chairman of the Board and Chief
Executive Officer/s/ Jack Kogut

Jack Kogut
    
    Senior Vice President of
Administration
 17