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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Medgenics(Regs) | LSE:MEDG | London | Ordinary Share | COM SHS USD0.0001 (REGS) |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 302.50 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMMEDG TIDMMEDU
RNS Number : 8940J
Medgenics Inc
13 August 2012
Press Release 13 August 2012
Medgenics Announces Second Quarter 2012 Financial Results
Medgenics, Inc. (NYSE Amex: MDGN and AIM: MEDU, MEDG) (the "Company"), the developer of Biopump(TM), a novel technology for the sustained production and delivery of therapeutic proteins in patients using their own tissue, today announced financial results for three and six months ended June 30, 2012, and the filing with the U.S. Securities and Exchange Commission ("SEC") of the Company's Quarterly Report on Form 10-Q. The Form 10-Q includes unaudited consolidated financial statements containing the information highlighted below, as well as additional information regarding the Company. The Form 10-Q is available at www.sec.gov and at www.medgenics.com.
Second Quarter Financial Results
Gross research and development ("R&D") expense for the second quarter of 2012 increased to $1.64 million from $1.54 million for same period in 2011. Higher R&D expense is due to an increase in the use of materials and sub-contractors in connection with preparations for the Company's planned Phase II EPODURE clinical trials in Israel and the U.S., preparations for the trials of INFRADURE in Israel and an increase in R&D personnel. Net R&D expense for the 2012 second quarter was $1.18 million compared with net R&D expense of $1.04 million for the prior year's second quarter.
General and administrative expense for the second quarter of 2012 was $2.77 million compared with $1.05 million for the second quarter of 2011, reflecting higher legal and professional services fees, increased activities in the U.S. and stock-based compensation expenses related to shares granted to consultants and to the newly appointed Chairman of the Board.
Financial expense for the second quarter of 2012 increased to $2.97 million from $0.23 million for the same period in 2011, mainly a result of changes in valuation of the warrant liability. Financial income for the second quarter of 2012 increased to $17,000from $4,000 in the same period of 2011.
The Company reported a net loss for the second quarter of 2012 of $6.91 million or $0.69 per share, compared with a net loss for the second quarter of 2011 of $2.32 million or $0.26 per share.
"The past several months have been transformative for Medgenics and featured a number of accomplishments delivering key milestones in our 2012 plan, and enhancing Medgenics' ability to move forward on strategic priorities," stated Andrew L. Pearlman, Ph.D., Chief Executive Officer of Medgenics. "We substantially advanced our clinical development program for EPODURE(TM) and INFRADURE(TM) in both the U.S. and Israel, launched our first U.S. Biopump processing center, expanded our management team with seasoned professionals and strengthened our balance sheet to provide the financial support to allow us to continue to execute to our plan. These are greatly augmented by the addition of our new Chairman, Dr Sol Barer, whose accomplishments and experience will significantly help accelerate the company's efforts towards execution of our strategic plan. We look forward to building on the momentum of the first half of the year, particularly with important clinical progress in the months to come."
Six Month Financial Results
Gross R&D expense for the six months ended June 30, 2012 was $3.23 million, up from $2.72 million for the same period in 2011. For the six months ended June 30, 2012, net R&D expense decreased to $1.75million from $2.22 million for the comparable prior-year period due to the participation by the Israeli Office of the Chief Scientist of $1.49 million in the 2012 period compared with $0.50 million for the 2011 period, which was partially offset by higher gross R&D expenses as detailed above. General and administrative expense for the first six months of 2012 was $4.13 million compared with $1.83 million for the first six months of 2011. The Company's net loss for the first six months of 2012 was $9.66 million or $0.98 per share, compared with a net loss of $2.66 million or $0.37 per share for the same period of 2011.
Medgenics ended the second quarter of 2012 with $9.04 million in cash and cash equivalents, compared with $5.00 million as of December 31, 2011. For the six months ended June 30, 2012, the Company used $4.34 million in net cash to fund operating activities, compared with $3.00 million for the six months ended June 30, 2011. In June 2012 the Company raised $9.50 million of gross proceeds (approximately $8.40 million, net) in a Private Placement.
About Medgenics
Medgenics is developing and commercializing Biopump(TM), a proprietary tissue-based platform technology for the sustained production and delivery of therapeutic proteins using the patient's own skin biopsy for the treatment of a range of chronic diseases including anemia, hepatitis and hemophilia, among others. Medgenics believes this approach has multiple benefits compared with current treatments, which include regular and costly injections of therapeutic proteins.
Medgenics has three long-acting protein therapy products in development based on this technology:
-- EPODURE(TM) to produce and deliver erythropoietin for many months from a single administration, which has demonstrated elevation and stabilization of hemoglobin levels in anemic patients for periods of six months to more than 36 months in a Phase I/II dose-ranging trial in Israel and has launched a Phase IIa trial in dialysis patients in Israel. An Investigational New Drug application has been cleared by the FDA to initiate a Phase IIb study to evaluate the safety and efficacy of EPODURE in the treatment of anemia in dialysis patients in the U.S.
-- INFRADURE(TM) for sustained production and delivery of interferon-alpha for use in the treatment of hepatitis is awaiting final approval of the Israeli Ministry of Health of two Phase I/II trials in Israel in hepatitis C, slated to commence Q3 2012; and which received Orphan Drug Designation from the FDA for the treatment of hepatitis D.
-- HEMODURE(TM) for sustained production and delivery of clotting Factor VIII therapy for the sustained prophylactic treatment of hemophilia is in development.
Medgenics is focused on the development and manufacturing of its innovative Biopumps, aiming to bring them to market via strategic partnerships with major pharmaceutical and/or medical device companies. In addition to treatments for anemia, hepatitis and hemophilia, Medgenics plans to develop and/or out-license a pipeline of future Biopump products targeting the large and rapidly growing global protein therapy market, which is forecast to reach $132 billion in 2013. Other potential applications for Biopumps include multiple sclerosis, arthritis, pediatric growth hormone deficiency, obesity and diabetes.
Forward-looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and as that term is defined in the Private Securities Litigation Reform Act of 1995, which include all statements other than statements of historical fact, including (without limitation) those regarding the Company's financial position, its development and business strategy, its product candidates and the plans and objectives of management for future operations. The Company intends that such forward-looking statements be subject to the safe harbors created by such laws. Forward-looking statements are sometimes identified by their use of the terms and phrases such as "estimate," "project," "intend, " "forecast," "anticipate," "plan," "planning, "expect," "believe," "will," "will likely," "should," "could," "would," "may" or the negative of such terms and other comparable terminology. All such forward-looking statements are based on current expectations and are subject to risks and uncertainties. Should any of these risks or uncertainties materialize, or should any of the Company's assumptions prove incorrect, actual results may differ materially from those included within these forward-looking statements. Accordingly, no undue reliance should be placed on these forward-looking statements, which speak only as of the date made. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based. As a result of these factors, the events described in the forward-looking statements contained in this release may not occur.
For further information, contact:
Medgenics, Inc. Phone: +972 4 902 8900 Dr. Andrew L. Pearlman Andrew.pearlman@medgenics.com LHA Anne Marie Fields Phone: 212-838-3777 afields@lhai.com @LHA_IR_PR Abchurch Communications Phone: +44 207 398 7719 Adam Michael Joanne Shears Jamie Hooper jamie.hooper@abchurch-group.com SVS Securities plc (Joint Broker) Phone: +44 207 638 5600 Alex Mattey Ian Callaway Nomura Code Securities (NOMAD & Phone: +44 207 776 1200 Joint Broker) Jonathan Senior/Giles Balleny
- Tables to Follow-
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
December June 30, 31, -------------------- 2012 2011 2011 --------- --------- --------- (Unaudited) -------------------- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 9,040 $ 10,116 $ 4,995 Accounts receivable and prepaid expenses 1,702 1,026 1,122 --------- --------- --------- Total current assets 10,742 11,142 6,117 --------- --------- --------- LONG-TERM ASSETS: Restricted lease deposits 57 49 52 Severance pay fund 264 353 259 --------- --------- --------- Total long-term assets 321 402 311 --------- --------- --------- PROPERTY AND EQUIPMENT, NET 407 378 434 --------- --------- --------- Total assets $ 11,470 $ 11,922 $ 6,862 ========= ========= =========
The accompanying notes are an integral part of the interim consolidated financial statements.
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
December June 30, 31, -------------------- 2012 2011 2011 --------- --------- --------- Unaudited -------------------- LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Trade payables $ 917 $ 869 $ 903 Other accounts payable and accrued expenses 1,249 1,272 1,156 --------- Total current liabilities 2,166 2,141 2,059 --------- --------- --------- LONG-TERM LIABILITIES: Accrued severance pay 1,387 1,146 1,328 Liability in respect of warrants 4,107 1,321 478 --------- --------- --------- Total long-term liabilities 5,494 2,467 1,806 --------- --------- --------- Total liabilities 7,660 4,608 3,865 --------- --------- --------- STOCKHOLDERS' EQUITY: Common stock - $0.0001 par value; 100,000,000 shares authorized; 11,746,251, 9,638,948 and 9,722,725 shares issued and outstanding at June 30, 2012, June 30, 2011 and December 31, 2011, respectively 1 1 1 Additional paid-in capital 62,972 51,383 52,501 Deficit accumulated during the development stage (59,163) (44,070) (49,505) --------- --------- --------- Total stockholders' equity 3,810 7,314 2,997 --------- --------- --------- Total liabilities and stockholders' equity $ 11,470 $ 11,922 $ 6,862 ========= ========= =========
The accompanying notes are an integral part of the interim consolidated financial statements.
CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except share and per share data)
Period from January 27, Six months ended Three months ended 2000 (inception) June 30, June 30, through --------------------- ---------------------- 2012 2011 2012 2011 June 30, 2012 --------- --------- ---------- --------- ---------------- Unaudited --------------------------------------------------------------- Research and development expenses $ 3,231 $ 2,718 $ 1,639 $ 1,544 $ 33,673 Less - Participation by the Office of the Chief Scientist (1,486) (503) (464) (503) (6,779) U.S. Government grant - - - - (244) Participation by third party - - - - (1,067) --------- --------- ---------- --------- ---------------- Research and development expenses, net 1,745 2,215 1,175 1,041 25,583 General and administrative expenses 4,133 1,832 2,774 1,052 30,531 Other income: Excess amount of participation in research and development from third party - - - - (2,904) --------- --------- ---------- --------- ---------------- Operating loss (5,878) (4,047) (3,949) (2,093) (53,210) Financial expenses (3,773) (133) (2,972) (232) (7,053) Financial income 1 1,521 17 4 755 --------- --------- ---------- --------- ---------------- Loss before taxes on income (9,650) (2,659) (6,904) (2,321) (59,508) Taxes on income 8 2 8 2 84 --------- --------- ---------- --------- ---------------- Loss $ (9,658) $ (2,661) $ (6,912) $ (2,323) $ (59,592) ========= ========= ========== ========= ================ Basic and diluted loss per share $ (0.98) $ (0.37) $ (0.69) $ (0.26) ========= ========= ========== ========= Weighted average number of shares of Common stock used in computing basic and diluted loss per share 9,893,072 7,212,074 10,032,760 9,033,672 ========= ========= ========== =========
The accompanying notes are an integral part of the interim consolidated financial statements.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
U.S. dollars in thousands (except share and per share data)
Deficit accumulated Additional during the Total paid-in development stockholders' Common stock capital stage equity (deficit) -------------------- ------------ ------------- ------------------ Shares Amount ---------- -------- Balance as of December 31, 2010 5,295,531 $ 1 $ 34,334 $ (41,409) $ (7,074) Issuance of Common stock at $4.54 per share and warrants at $0.46 per share, Net 2,624,100 (*) 10,389 10,389 Issuance of Common stock upon conversion of debentures 1,407,898 (*) 5,577 5,577 Exercise of warrants in January through June 2011 311,419 (*) 872 - 872 Stock based compensation related to options and warrants granted to consultants and employees - - 211 - 211 Loss - - - (2,661) (2,661) ---------- -------- ------------ ------------- ------------------ Balance as of June 30, 2011 (Unaudited) 9,638,948 $ 1 $ 51,383 $ (44,070) $ 7,314 ========== ======== ============ ============= ==================
(*) Represents an amount lower than $1.
The accompanying notes are an integral part of the interim consolidated financial statements.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
U.S. dollars in thousands (except share and per share data)
Deficit accumulated Additional during the Total paid-in development stockholders' Common stock capital stage equity --------------------- ------------ ------------- --------------- Shares Amount ----------- -------- Balance as of December 31, 2011 9,722,725 $ 1 $ 52,501 $ (49,505) $ 2,997 Stock based compensation related to issuance of restricted common stock, January 2012 35,000 (*) 55 - 55 Issuance of Common stock to consultants at $4.84 and $8.79 per share, March and June 2012 30,000 (*) 204 - 204 Issuance of Common stock and warrants at $4.90 per unit, net, June 2012 1,944,734 (*) 8,407 - 8,407 Exercise of options and warrants, January through June 2012 13,792 (*) 117 - 117 Stock based compensation related to options and warrants granted to consultants and employees - - 1,688 - 1,688 Loss - - - (9,658) (9,658) ----------- -------- ------------ ------------- --------------- Balance as of June 30, 2012 (Unaudited) 11,746,251 $ 1 $ 62,972 $ (59,163) $ 3,810 =========== ======== ============ ============= ===============
(*) Represents an amount lower than $1.
The accompanying notes are an integral part of the interim consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Period from January 27, 2000 (inception) Six months ended through June 30, June 30, -------------------- 2012 2011 2012 --------- --------- ----------------- Unaudited --------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Loss $ (9,658) $ (2,661) $ (59,592) Adjustments to reconcile loss to net cash used in operating activities: Depreciation 72 36 1,153 Loss from disposal of property and equipment - - 330 Issuance of shares as consideration for providing security for letter of credit - - 16 Stock based compensation related to options, warrants and restricted shares granted to employees, directors and consultants 1,743 211 8,905 Interest and amortization of beneficial conversion feature of convertible note - 759 Change in fair value of convertible debentures and warrants 3,717 (1,479) 5,359 Accrued severance pay, net 54 24 1,123 Exchange differences on a restricted lease deposit - (1) 3 Exchange differences on a long term loan - - 3 Increase in trade payables 219 126 1,726 Decrease (increase) in account receivable and prepaid expenses (580) 629 (1,702) Increase in other accounts payable and accrued expenses 93 118 1,796 Net cash used in operating activities (4,340) (2,997) (40,121) --------- --------- ----------------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment (45) (171) (2,064) Proceeds from disposal of property and equipment - - 173 Increase in restricted lease deposit (5) (2) (60) --------- --------- ----------------- Net cash used in investing activities $ (50) $ (173) $ (1,951) --------- --------- -----------------
The accompanying notes are an integral part of the interim consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Period from January 27, 2000 (inception) Six months ended through June 30, June 30, ------------------ 2012 2011 2012 -------- -------- ----------------- Unaudited ------------------------------------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of shares and warrants, net $ 8,407 $ 10,389 $ 42,908 Proceeds from exercise of options and warrants, net 28 38 1,039 Repayment of a long-term loan - - (73) Proceeds from long term loan - - 70 Issuance of a convertible debenture and warrants - - 7,168 Net cash provided by financing activities 8,435 10,427 51,112 -------- -------- ----------------- Increase in cash and cash equivalents 4,045 7,257 9,040 Balance of cash and cash equivalents at the beginning of the period 4,995 2,859 - -------- -------- ----------------- Balance of cash and cash equivalents at the end of the period $ 9,040 $ 10,116 $ 9,040 ======== ======== ================= Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $ - $ 49 $ 242 ======== ======== ================= Taxes $ 31 $ - $ 129 ======== ======== ================= Supplemental disclosure of non-cash flow information: Issuance expenses paid with shares $ - $ - $ 310 ======== ======== ================= Issuance of Common stock upon conversion of a convertible debentures $ - $ 5,577 $ 8,430 ======== ======== ================= Issuance of Common stock and warrants to consultants $ 205 $ - $ 1,356 ======== ======== ================= Classification of liability in respect of warrants into equity due to the exercise of warrants $ 88 $ 834 $ 1,219 ======== ======== =================
The accompanying notes are an integral part of the interim consolidated financial statements.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 1:- GENERAL
a. Medgenics, Inc. (the "Company") was incorporated in January 2000 in Delaware. The Company has a wholly-owned subsidiary, Medgenics Medical Israel Ltd. (formerly Biogenics Ltd.) (the "Subsidiary"), which was incorporated in Israel in March 2000. The Company and the Subsidiary are engaged in the research and development of products in the field of biotechnology and associated medical equipment and are thus considered development stage companies as defined inAccounting Standards Codification ("ASC") topic number 915, "Development Stage Entities" ("ASC 915").
On December 4, 2007 the Company's Common stock was admitted for trading on the AIM market of the London Stock Exchange.
On April 13, 2011 the Company completed an Initial Public Offering ("IPO") of its Common stock on the NYSE MKT (formerly NYSE Amex), raising $10,389 in net proceeds.
b. The Company and the Subsidiary are in the development stage. As reflected in the accompanying financial statements, the Company incurred a loss for the six month period ended June 30, 2012 of $9,658 and had a negative cash flow from operating activities of $4,340 during the six month period ended June 30, 2012. The accumulated deficit as of June 30, 2012 is $59,163. The Company and the Subsidiary have not yet generated revenues from product sale. The Company previously generated income from partnering on development programs and expects to continue to expand its partnering activity. Management's plans also include seeking additional investments and commercial agreements to continue the operations of the Company and the Subsidiary.
However, there is no assurance that the Company will be successful in its efforts to raise the necessary capital and/or reach such commercial agreements to continue its planned research and development activities. The Company believes that the net proceeds of the private placement (see note 3(b)2), plus Company's existing cash and cash equivalents, should be sufficient to meet its operating and capital requirements into the first quarter of 2013. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The consolidated financial statements do not include any adjustments with respect to the carrying amounts of assets and liabilities and their classification that might result from the outcome of this uncertainty.
c. In April 2012, the Subsidiary received approval for an additional Research and Development program from the Office of the Chief Scientist in Israel ("OCS") for the period October 2011 through September 2012. The approval allows for a grant of up to approximately $2,100 based on research and development expenses, not funded by others, of up to $3,900. To date, $100 has been received.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited interim financial statements of Medgenics, Inc., a development stage company, have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC") and should be read in conjunction with the audited financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2011 (2011 Form 10-K) as filed with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements that would substantially duplicate the disclosure contained in the audited financial statements for the most recent fiscal year as reported in the 2011 Form 10-K, have been omitted.
Impact of recently issued accounting standards
a. In May 2011, the FASB issued ASU 2011-04, "Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs". The new guidance does not extend the use of fair value accounting, but provides guidance on how it should be applied where its use is already required or permitted by other standards within GAAP or International Financial Reporting Standards ("IFRS"). The new guidance also changes the wording used to describe many requirements in GAAP for measuring fair value and for disclosing information about fair value measurements and it clarifies the FASB's intent about the application of existing fair value measurements. The Company adopted the provisions of this new guidance on January 1, 2012. The Company does not expect the adoption of the new provisions to have a material impact on its consolidated financial position, results of operations or cash flows.
b. On June 16, 2011, the Financial Accounting Standards Board issued ASU No. 2011-05, "Presentation of Comprehensive Income". This standard eliminates the current option to report other comprehensive income and its components in the statement of changes in shareholders' equity and provides for either a single continuous statement or two separate statements. Both options require companies to present the components of net income and total net income, the components of other comprehensive income along with a total for other comprehensive income. Companies are also required to present reclassification adjustments for items that are reclassified from other comprehensive income to net income within these statements. This standard will be applied retrospectively for fiscal years beginning after December 15, 2011 with early adoption permitted. The disclosure requirements of this standard will not have a material effect on the Company's results of operations or financial position as the amendment impacts presentation only.
NOTE 3:- STOCKHOLDERS' EQUITY
a. In March 2012, the Company's Board of Directors approved an amendment to the stock incentive plan increasing the number of shares of Common stock authorized for issuance thereunder to a total of 2,478,571 shares of Common stock, subject to stockholder approval. The Company's stockholders approved the amendment at the Company's annual meeting of stockholders on April 3, 2012.
b. Issuance of shares, stock options and warrants to investors
1. In January and February 2012, unexercised warrants held by several investors to purchase a total of 34,804 shares of Common stock expired.
2. In June 2012, the Company completed a private placement transaction in which the Company issued 1,944,734 units with each unit consisting of one share of the Company's Common stock and a warrant to purchase 0.75 of one share of Common stock. The warrants to purchase 1,458,550 of Common stock were issued with an exercise price of $8.34 per share, will become exercisable on December 15, 2012 (which, if all were exercised in full, would result in the issuance of 1,458,576 shares of Common stock due to the rounding of fractional shares) and will expire on June 18, 2017. In addition, warrants to purchase 194,473 shares of Common stock having an exercise price of $9.17 per share were issued to the placement agent, will become exercisable on December 18, 2012 and will expire on June 18, 2017. Each unit was sold for a purchase price of $4.90 for total gross proceeds of $9,529 or approximately $8,407 in net proceeds after deducting private placement fees of $953 and other offering costs of $169.
.
3. In May and June 2012, three investors exercised warrants to purchase 46,711 shares of Common stock at an exercise price of $5.37 per share using the cashless exercise method. Using this cashless exercise method, the investors were issued 4,168 shares.
4. Subsequent to the balance sheet date, in July 2012, 14 investors exercised warrants to purchase 132,860 shares of Common stock at exercise prices ranging from $4.99 to $5.57 per share using the cashless exercise method. Using this cashless exercise method, the investors were issued 84,110 shares. An additional three investors exercised warrants to purchase 6,142 shares of Common stock at exercise prices ranging from $4.54 to $5.57 per share or an aggregate exercise price of $29. In addition, in July and August 2012, 47,500 publicly traded warrants were exercised at an exercise price of $6.00 per share. The cash consideration received was $285.
c. Issuance of shares, stock options and warrants to employees and directors
1. In January 2012, the Company granted 15,000 options and 7,000 shares of restricted Common stock to each of 5 non-executive Directors of the Company. These shares of Common stock are restricted in that they may not be disposed of and are not entitled to dividends. 50% of these shares were vested the day after the grant and 50% will vest one year from the grant date. All of the options are for a term of 10 years, vest in three equal installments and have an exercise price of $2.66. These options and restricted Common stock were granted under the stock incentive plan.
2. In April 2012, the Company granted to the Company's employees 47,254 options exercisable at a price of $5.13 per share. The options have a 10 year term and vest in four equal annual tranches. The options were granted under the stock incentive plan.
3. In May 2012, unexercised options held by an employee to purchase 42,783 shares of Common stock expired.
4. In June 2012, the Chief Executive Officer of the Company transferred by gift 16,200 warrants with an exercise price of $2.49 per share to four individuals who are not immediate family.
5. In June 2012, a Director of the Company exercised options to purchase 4,286 shares of Common stock at an exercise price of $6.55 per share or an aggregate exercise price of $28.
6. In June 2012, an employee exercised options to purchase 6,723 shares of Common stock at an exercise price of $5.47 per share using the cashless exercise method. The employee was issued 2,433 shares as a result of the option exercise.
7. In June 2012, the Company granted the Chairman of the Board of the Company 900,000 options exercisable at a price of $10.80 per share. The options have a 5 year term. 300,000 options vested immediately upon approval of the listing application by the NYSE MKT and half of the remaining 600,000 options will vest on each of June 30, 2013 and June 30, 2014. The total compensation of $3,975 will be recognized over the vesting period. The Company recorded an expense in the amount of $1,325 during the current period. These options were granted outside of the stock incentive plan.
8. Subsequent to the balance sheet date, in July 2012, three employees exercised options to purchase 32,793 shares of Common stock at exercise prices ranging from $5.42 to $8.19 per share using the cashless exercise method. Using this cashless exercise method, the employees were issued 16,857 shares.
9. Subsequent to the balance sheet date, in July 2012, the Company granted to an employee 20,000 options exercisable at a price of $14.50 per share. The options have a 10 year term and vest in four equal annual tranches. The options were granted under the stock incentive plan.
10. In December 2010, the Company granted the Executive Chairman of the Board of the Company 57,142 shares of restricted Common stock in compensation for his services in his new role as the Executive Chairman of the Board of the Company. These shares of Common stock are restricted in that they may not be disposed of and are not entitled to dividends. These restrictions will be removed in relation to 14,285 shares of Common stock on each of October 18, 2012 and October 18, 2013 and the final 28,572 shares of Common stock on October 18, 2014. The value of these restricted shares of Common stock, $285, was based on the fair value at the grant date and is being recognized as an expense using the straight line method. The Company recorded expenses in the amount of $37 in the six months ended June 30, 2012.
A summary of the Company's activity for restricted shares granted to employees and directors is as follows:
Six months ended June 30, 2012 -------------------------- Restricted shares Outstanding Exercisable ----------------------------- ------------ ------------ Number of restricted shares as of December 31, 2011 57,142 - Granted 35,000 17,500 ------------ ------------ Number of restricted shares as of June 30, 2012 92,142 17,500 ============ ============
11. A summary of the Company's activity for options and warrants granted to employees and directors is as follows:
Six months ended June 30, 2012 ---------------------------------------------------------- Weighted Number Weighted average of average remaining Aggregate options exercise contractual intrinsic and warrants price terms (years) value price -------------- ---------- --------------- ------------- Outstanding at December 31, 2011 2,078,788 $ 4.17 Granted 1,022,254 9.94 Expired (42,783) 4.10 Exercised (11,009) 5.89 Given by the CEO to Investors (16,200) 2.49 -------------- ---------- Outstanding at June 30, 2012 3,031,050 $ 6.12 4.90 $ 14,171 ============== ========== =============== ============= Exercisable at June 30, 2012 1,859,788 $ 5.01 3.58 $ 10,773 ============== ========== =============== ============= Vested and expected to vest at June 30, 2012 2,972,487 $ 6.09 4.85 $ 14,001 ============== ========== =============== =============
As of June 30, 2012, there was $713 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted to employees. That cost is expected to be recognized over a weighted-average period of 2.8 years.
The aggregate intrinsic value represents the total intrinsic value (the difference between the Company's Common share fair value as of June 30, 2012 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on June 30, 2012.
Calculation of aggregate intrinsic value is based on the share price of the Company's Common stock as of June 30, 2012 ($10.80 per share, as reported on the NYSE MKT (formerly NYSE Amex)).
d. Issuance of shares, stock options and warrants to consultants
1. In March 2012, the Company issued 15,000 shares of Common stock to a consultant. Total compensation, measured as the grant date fair market value of the stock, amounted to $73 and was recorded as an operating expense in the statement of operations.
2. In April 2012, the Company granted options to purchase 15,280 shares of Common stock at an exercise price of $5.13 per share to a consultant. The options have a 10 year term and vest in three equal annual tranches. The options were granted under the stock incentive plan.
3. In May 2012, two consultants exercised warrants to purchase 4,937 shares of Common stock at an exercise price of $5.37 per share using the cashless exercise method. Using this cashless exercise method, the consultants were issued 505 shares.
4. In June 2012, the Company granted options to purchase 25,000 shares of Common stock at an exercise price of $6.86 per share to each of two consultants. The options have a 10 year term and vest in three equal annual tranches. The options were granted under the stock incentive plan. In addition, in June 2012, the Company issued 194,473 warrants to the placement agent for its June 2012 private placement. See note 3(b)2.
5. In June 2012, the Company issued 15,000 shares of Common stock to a consultant. Total compensation, measured as the grant date fair market value of the stock, amounted to $131 and was recorded as an operating expense in the statement of operations.
6. In June 2012, a consultant exercised warrants to purchase 1,188 shares of Common stock at an exercise price of $5.32 per share and 143 shares of Common stock at an exercise price of $5.19 per share using the cashless exercise method. Using this cashless exercise method, the consultant was issued 363 shares. In addition, a consultant exercised warrants to purchase 4,675 shares of Common stock at an exercise price of $4.99 per share using the cashless exercise method. Using this cashless exercise method, the consultant was issued 2,037 shares.
7. Subsequent to the balance sheet date, in July 2012, the Company granted options to purchase 5,646 shares of Common stock at an exercise price of $14.50 per share to each of two consultants. The options have a 10 year term and vest in three equal annual tranches. The options were granted under the stock incentive plan.
8. Subsequent to the balance sheet date, in July and August 2012, seven consultants exercised warrants to purchase 13,786 shares of Common stock at exercise prices ranging from $5.19 to $5.32 per share using the cashless exercise method. Using this cashless exercise method, the consultants were issued 8,523 shares. In addition, in August 2012, a consultant exercised warrants to purchase 75,000 shares of Common stock at an exercise price of $4.80 per share or an aggregate exercise price of $360.
9. A summary of the Company's activity for warrants and options granted to consultants under the stock incentive plan is as follows:
Six months ended June 30, 2012 ---------------------------------------------------------- Weighted Weighted average Number of average remaining Aggregate options exercise contractual intrinsic and warrants price terms (years) value price -------------- ---------- --------------- ------------- Outstanding at December 31, 2011 540,338 $ 5.49 Granted 259,753 8.49 Exercised (10,943) 5.20 -------------- ---------- Outstanding at June 30, 2012 789,148 $ 6.47 4.23 $ 3,413 ============== ========== =============== ============= Exercisable at June 30, 2012 472,096 $ 5.30 2.72 $ 2,598 ============== ========== =============== =============
As of June 30, 2012, there was $51 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted to consultants under the Company's stock incentive plan. That cost is expected to be recognized over a weighted-average period of 1.4 years.
Calculation of aggregate intrinsic value is based on the share price of the Company's Common stock as of June 30, 2012 ($10.80 per share, as reported on the NYSE MKT (formerly NYSE Amex)).
e. Compensation expenses
Compensation expense related to shares, warrants and options granted to employees, directors and consultants was recorded in the Statement of Operations in the following line items:
Six months ended Three months ended June 30, June 30, ------------------- --------------------- 2012 2011 2012 2011 ---------- ------- ----------- -------- Research and development expenses $ 98 $ 55 $ 72 $ 25 General and administrative expenses 1,849 156 1,626 98 ---------- ------- ----------- -------- $ 1,947 $ 211 $ 1,698 $ 123 ========== ======= =========== ======== f. Summary of options and warrants:
A summary of all the options and warrants outstanding as of June 30, 2012 is presented in the following table:
As of June 30, 2012 -------------------------------------------------------------- Weighted Average Exercise Remaining Price Options Options Contractual per Share and Warrants and Warrants Terms (in Options / Warrants ($) Outstanding Exercisable years) -------------------------- ----------- -------------- -------------- ----------------- Options: Granted to Employees and Directors 2.49 182,806 182,806 3.8 2.66 75,000 - 9.5 3.14 244,857 35,000 9.4 3.64 40,000 - 9.0 3.86 11,429 - 9.2 5.13 47,254 - 9.8 5.47 42,813 42,813 1.0 6.55 47,142 12,857 8.5 7.35 332,046 332,046 0.4 8.19 218,713 65,275 8.2 10.80 900,000 300,000 5.0 -------------- -------------- 2,142,060 970,797 -------------- -------------- Granted to Consultants 4.20 19,354 12,903 2.4 5.13 15,280 - 9.8 5.47 19,354 19,354 1.3 6.65 38,136 12,712 8.4 6.86 50,000 - 10.0 7.35 46,045 46,045 0.4 8.19 38,136 12,712 8.2 -------------- -------------- 262,305 103,726 -------------- -------------- Total Options 2,368,365 1,074,523 -------------- -------------- As of June 30, 2012 -------------------------------------------------------------- Weighted Average Exercise Remaining Price Options Options Contractual per Share and Warrants and Warrants Terms (in Options / Warrants ($) Outstanding Exercisable years) ---------------------------- ----------- -------------- -------------- ----------------- Warrants: Granted to Employees and Directors 2.49 888,990 888,990 3.8 -------------- -------------- Granted to Consultants 3.19 11,370 11,370 3.2 4.01 50,000 50,000 4.0 4.80 150,000 150,000 4.1 4.99 6,635 6,635 3.8 5.19 16,579 16,579 0.4 5.32 31,637 31,637 0.2 5.57 102,149 102,149 1.1 9.17 194,473 - 4.9 -------------- -------------- 562,843 368,370 -------------- -------------- Granted to Investors 0.0002 35,922 35,922 3.8 2.49 16,200 16,200 3.8 4.58 428,571 428,571 3.2 4.99 73,383 73,383 3.8 5.32 119,421 119,421 0.3 5.57 50,721 50,721 0.4 6.00 2,829,000 2,829,000 3.8 8.34 1,458,550 - 4.9 -------------- -------------- 5,011,768 3,553,218 -------------- -------------- Total Warrants 6,463,601 4,810,578 -------------- -------------- Total Options and Warrants 8,831,966 5,885,101 ============== ============== NOTE 4:- FAIR VALUE MEASURMENTS
The Company adopted the provision of ASC 820, "Fair Value Measurements and Disclosures" ("ASC 820") on January 1, 2008. ASC 820 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and consider assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions and risk of nonperformance.
ASC 820 also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument's categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. ASC 820 establishes three levels of inputs that may be used to measure fair value:
Level 1 - quoted prices in active markets for identical assets or liabilities;
Level 2 - inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities 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; or
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.
The Company classified certain warrants issued to investors through the years 2006 and 2007 and warrants issued to the purchasers of the 2010 Convertible Debentures as a liability and measure them at fair value according to ASC 815-40-15-7I.
The changes in level 3 liabilities measured at fair value on a recurring basis:
Fair value of liability in respect of warrants -------------- Balance as of December 31, 2010 $ 3,670 Change in fair value of the liability in respect of warrants (3,192) -------------- Balance as of December 31, 2011 478 Change in fair value of the liability in respect of warrants 3,629 -------------- Balance as of June 30, 2012 (unaudited) $ 4,107 ==============
-Ends-
This information is provided by RNS
The company news service from the London Stock Exchange
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