TIDMMEDG TIDMMEDU
RNS Number : 0674L
Medgenics Inc
06 August 2013
Press Release 6 August 2013
Medgenics Reports Second Quarter Financial Results
Medgenics, Inc. (NYSE MKT: MDGN and AIM: MEDU, MEDG) (the
"Company"), the developer of a novel technology for the sustained
production and delivery of therapeutic proteins in patients using
their own tissue, today reported financial results for the three
and six months ended June 30, 2013 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 interim
consolidated financial statements containing the information
presented below, as well as additional information regarding the
Company. The Form 10-Q is available at www.sec.gov and at
www.medgenics.com.
Management Commentary
"The first half of 2013 was an active and productive period
during which we made progress in a number of significant areas and
positioned the Company to address important near term milestones,"
stated Andrew L. Pearlman, Ph.D., President and Chief Executive
Officer of Medgenics. "We advanced our clinical programs, fortified
our patent portfolio, were awarded a grant of approximately $2
million from the Israeli Office of the Chief Scientist (OCS) and
raised substantial capital in a public offering to support the
forward momentum of our programs.
"In April 2013 we reported interim data from our Israeli Phase
IIa clinical study of EPODURE to treat anemia in patients with
end-stage renal disease who are on dialysis, which showed sustained
hemoglobin levels in patients for months without the need for
injections of erythropoietin. We completed a number of key
preparations and continue to be on target to initiate our U.S.
Phase II study of EPODURE in similar patients. This will be our
first U.S. clinical study for the Biopump technology. We reported
the launch and enrollment of the first patient in our Phase I/II
proof-of-concept clinical study of INFRADURE in the treatment of
hepatitis C in Israel, and look forward to reporting interim data
from this study before year-end. We expect to use data from this
trial to support the clinical development and regulatory strategy
for INFRADURE to treat hepatitis D, an indication for which we have
U.S. orphan drug designation. We are exploring its role in treating
hepatitis B as well.
"In addition, we continue to make advances in optimizing our
Biopump platform through a number of developments that include
enhancements to the protein expression technology and Biopump
processing methods, as well as to improvements inpatient
administration. These developments have the potential to further
increase production and delivery of protein and to extend the
duration of clinical effect," added Dr. Pearlman.
Second Quarter Financial Results
Gross research and development (R&D) expense for the second
quarter of 2013 increased to $2.07 million from $1.64 million for
same period in 2012. Net R&D expense for the 2013 second
quarter was $0.86 million compared with net R&D expense of
$1.18 million for the prior year's second quarter. The decrease in
net R&D expense was due to the participation by the OCS of
$1.22 million in the three months ended June 30, 2013, compared
with $0.46 million in the same period in 2012, somewhat offset by
the increase in the gross R&D expense.
General and administrative expense for the second quarter of
2013 decreased to $1.59 million compared with $2.77 million for the
comparative quarter in 2012, due primarily to lower stock-based
compensation expense related to options and restricted shares
granted to directors and consultants.
Financial expenses for the quarter ended June 30, 2013 were
$0.03 million, compared with $2.97 million for the same period in
2012. This decrease was mainly due to the change in valuation of
the warrant liability.
Financial income for the quarter ended June 30, 2013 was $0.37
million, increasing from $0.02 million for the same period in 2012.
This increase was primarily due to the change in valuation of the
warrant liability.
For the second quarter of 2013 the Company reported a net loss
of $2.10 million or $0.11 per share, compared with a net loss of
$6.91 million or $0.69 per share for the second quarter of
2012.
Six Month Financial Results
Gross R&D expense for the first half of 2013 increased to
$4.10 million from $3.23 million for same period in 2012 due to an
increase in R&D personnel. Net R&D expense for the first
half of 2013 was $2.89 million compared with net R&D expense of
$1.75 million for the first half of 2012. The increase in net
R&D expense was due to the participation by the OCS of $1.22
million in the six months ended June 30, 2013 compared with $1.49
million in the same period in 2012, and by the increase in the
gross R&D expense as explained above.
General and administrative expense for the six months ended June
30, 2013 of $4.13 million was consistent with the prior-year
period.
Financial income for the six months ended June 30, 2013 of $1.29
million was due primarily to the change in valuation of the warrant
liability.
For the six months ended June 30, 2013, the Company reported a
net loss of $5.78 million or $0.42 diluted loss per share, compared
with a net loss of $9.66 million or $0.98 per share in the
comparable 2012 period.
The Company ended the second quarter with cash and cash
equivalents of $28.98 million, compared with $6.43 million as of
December 31, 2012. Medgenics raised gross proceeds of approximately
$32 million in a public offering of common stock and warrants
during the first quarter of 2013. The Company used $6.18 million in
net cash to fund operating activities during the first half of
2013, compared with $4.34 million for the first half of 2012.
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 tissue for the treatment of a range of chronic diseases
including anemia, hepatitis, among others. For more information,
please visit www.medgenics.com.
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 Phone: +1 212-838-3777
Anne Marie Fields
afields@lhai.com
Abchurch Communications Phone: +44 207 398 7718
Joanne Shears
Jamie Hooper
Harriet Rae
Harriet.rae@abchurch-group.com
Nomura Code Securities (NOMAD & Joint Phone: +44 207 776 1200
Broker)
Jonathan Senior
Giles Balleny
SVS Securities plc (Joint Broker) Phone: +44 207 638 5600
Alex Brearley
-Tables to follow-
MEDGENICS, INC. AND ITS SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
------------------------------------------------------------------------
U.S. dollars in thousands
December
June 30, 31,
------------------
2013 2012 2012
-------- -------- --------
(Unaudited)
------------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 28,979 $ 9,040 $ 6,431
Accounts receivable and prepaid expenses 1,818 1,702 539
-------- -------- --------
Total current assets 30,797 10,742 6,970
-------- -------- --------
LONG-TERM ASSETS:
Restricted lease deposits 43 57 62
Severance pay fund 243 264 283
Property and equipment, net 410 407 352
-------- -------- --------
Total long-term assets 696 728 697
-------- -------- --------
DEFERRED ISSUANCE EXPENSES - - 40
-------- -------- --------
Total assets $ 31,493 $ 11,470 $ 7,707
======== ======== ========
The accompanying notes are an integral part of the interim
consolidated financial statements.
MEDGENICS, INC. AND ITS SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
---------------------------------------------------------------------------------
U.S. dollars in thousands
December
June 30, 31,
--------------------
2013 2012 2012
-------- ---------- -----------
(Unaudited)
--------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables $ 901 $ 917 $ 877
Other accounts payable and accrued expenses 1,425 1,249 1,473
--------
Total current liabilities 2,326 2,166 2,350
-------- ---------- -----------
LONG-TERM LIABILITIES:
Accrued severance pay 1,446 1,387 1,492
Liability in respect of warrants 654 4,107 1,931
-------- ---------- -----------
Total long-term liabilities 2,100 5,494 3,423
-------- ---------- -----------
Total liabilities 4,426 7,660 5,773
-------- ---------- -----------
STOCKHOLDERS' EQUITY:
Common stock - $ 0.0001 par value;
100,000,000 shares authorized; 18,481,308,
11,746,251 and 12,307,808 shares issued
and outstanding at June 30, 2013, June
30, 2012 and December 31, 2012, respectively 2 1 1
Additional paid-in capital 97,419 62,972 66,509
Deficit accumulated during the development
stage (70,354) (59,163) (64,576)
-------- ---------- -----------
Total stockholders' equity 27,067 3,810 1,934
-------- ---------- -----------
Total liabilities and stockholders'
equity $ 31,493 $ 11,470 $ 7,707
======== ========== ===========
The accompanying notes are an integral part of the interim
consolidated financial statements.
MEDGENICS, INC. AND ITS SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except share and per share data)
Period
from January
27, 2000
(inception)
Six months ended Three months ended through
June 30, June 30, June 30,
--------------------- ----------------------
2013 2012 2013 2012 2013
---------- --------- ---------- ---------- -------------
Unaudited
------------------------------------------------------------
Research and development
expenses $ 4,104 $ 3,231 $ 2,073 $ 1,639 $ 41,733
Less - Participation by the
Office of the Chief Scientist (1,218) (1,486) (1,218) (464) (8,267)
U.S. Government grant - - - - (244)
Participation by third party - - - - (1,067)
---------- --------- ---------- ---------- -------------
Research and development
expenses, net 2,886 1,745 855 1,175 32,155
General and administrative
expenses 4,134 4,133 1,588 2,774 37,729
Other income:
Excess amount of participation
in research and development
from third party - - - - (2,904)
---------- --------- ---------- ---------- -------------
Operating loss (7,020) (5,878) (2,443) (3,949) (66,980)
Financial expenses (39) (3,773) (25) (2,972) (4,072)
Financial income 1,286 1 371 17 369
---------- --------- ---------- ---------- -------------
Loss before taxes on income (5,773) (9,650) (2,097) (6,904) (70,683)
Taxes on income 5 8 2 8 100
---------- --------- ---------- ---------- -------------
Loss $ (5,778) $ (9,658) $ (2,099) $ (6,912) $ (70,783)
========== ========= ========== ========== =============
Basic loss per share $ (0.34) $ (0.98) $ (0.11) $ (0.69)
========== ========= ========== ==========
Diluted loss per share $ (0.42) $ (0.98) $ (0.11) $ (0.69)
Weighted average number of
Common stock used in computing
basic loss per share 16,850,657 9,893,072 18,410,951 10,032,760
========== ========= ========== ==========
Weighted average number of
Common stock used in computing
diluted loss per share 16,895,741 9,893,072 18,410,951 10,032,760
========== ========= ========== ==========
The accompanying notes are an integral part of the interim
consolidated financial statements.
MEDGENICS, INC. AND ITS SUBSIDIARY
(A Development Stage Company)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
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.
MEDGENICS, INC. AND ITS SUBSIDIARY
(A Development Stage Company)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
U.S. dollars in thousands (except share data)
Deficit
accumulated
Additional during the Total
paid-in development stockholders'
Common stock capital stage equity
------------------ ---------- ------------ --------------
Shares Amount
---------- ------
Balance as of December 31, 2012 12,307,808 $ 1 $ 66,509 $ (64,576) $ 1,934
Issuance of Common stock and warrants at $
5.24 per share and $ 0.01 per warrant, net
of issuance costs in the amount of $ 3,050 6,070,000 1 28,820 - 28,821
Stock based compensation related to Common
stock to consultants at $ 7.25 per share (**) 55,000 (*) 494 - 494
Issuance and vesting of restricted common
stock 45,000 (*) 274 - 274
Exercise of warrants and options 3,500 (*) 13 - 13
Stock based compensation related to options
and warrants granted to consultants and employees - - 1,309 - 1,309
Loss - - - (5,778) (5,778)
---------- ------ ---------- ------------ --------------
Balance as of June 30, 2013 (unaudited) 18,481,308 $ 2 $ 97,419 $ (70,354) $ 27,067
========== ====== ========== ============ ==============
(*) Represents an amount lower than $1.
(**) Includes stock based compensation for an additional 25,000
shares which were not issued as of June 30, 2013.
The accompanying notes are an integral part of the interim
consolidated financial statements.
MEDGENICS, INC. AND ITS SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Period from
January 27,
2000 (inception)
Six months ended through
June 30, June 30,
--------------------
2013 2012 2013
--------- --------- -----------------
Unaudited
---------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Loss $ (5,778) $ (9,658) $ (70,783)
Adjustments to reconcile loss to net
cash used in operating activities:
Depreciation 84 72 1,310
Loss from disposal of property and
equipment - - 330
Stock based compensation to employees
and consultants 2,077 1,947 12,262
Interest and amortization of beneficial
conversion feature of convertible note - - 759
Change in fair value of convertible
debentures and warrants (1,277) 3,717 2,701
Accrued severance pay, net (6) 54 1,203
Exchange differences on a restricted
lease deposit and on long term loan 1 - 2
Increase in accounts receivable and
prepaid expenses (1,256) (580) (1,835)
Increase in trade payables 24 15 1,505
Increase (decrease) in other accounts
payable and accrued expenses (48) 93 1,972
Net cash used in operating activities (6,179) (4,340) (50,574)
--------- --------- -----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (142) (45) (2,224)
Proceeds from disposal of property
and equipment - - 173
Increase in restricted lease deposit (5) (5) (65)
--------- --------- -----------------
Net cash used in investing activities $ (147) $ (50) $ (2,116)
--------- --------- -----------------
The accompanying notes are an integral part of the interim
consolidated financial statements.
MEDGENICS, INC. AND ITS SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Period from
January 27,
2000 (inception)
Six months ended through
June 30, June 30,
-------------------
2013 2012 2013
-------- --------- -----------------
Unaudited
--------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of shares and
warrants, net $ 28,821 $ 8,407 $ 71,769
Deferred issuance expenses 40 - -
Proceeds from exercise of options and
warrants, net 13 28 2,735
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 28,874 8,435 81,669
-------- --------- -----------------
Increase in cash and cash equivalents 22,548 4,045 28,979
Balance of cash and cash equivalents
at the beginning of the period 6,431 4,995 -
-------- --------- -----------------
Balance of cash and cash equivalents
at the end of the period $ 28,979 $ 9,040 $ 28,979
======== ========= =================
Supplemental disclosure of cash flow
information:
Cash paid during the period for:
Interest $ - $ - $ 242
======== ========= =================
Taxes $ 5 $ 31 $ 153
======== ========= =================
Supplemental disclosure of non-cash
flow information:
Issuance expenses paid with shares $ - $ - $ 310
======== ========= =================
Issuance of Common stock upon conversion
of a convertible debenture $ - $ - $ 8,430
======== ========= =================
Classification of liability in respect
of warrants into equity due to the
exercise of warrants $ - $ 89 $ 2,014
======== ========= =================
The accompanying notes are an integral part of the interim
consolidated financial statements.
MEDGENICS, INC. AND ITS SUBSIDIARY
(A Development Stage Company)
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 in Accounting 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.
In February 2013, the Company closed an underwritten public
offering of 5,600,000 shares of Common stock and Series 2013-A
warrants to purchase up to an aggregate of 2,800,000 shares of
Common stock. The shares and the warrants were sold together as a
fixed combination, each consisting of one share of Common stock and
a warrant to purchase one-half of a share of Common stock, at a
price to the public of $ 5.25 per fixed combination. In March 2013,
the underwriters exercised their option to purchase 470,000 shares
of Common stock at $ 5.24 per share and 840,000 warrants to
purchase 420,000 shares of Common stock at $ 0.01 per warrant.
Gross proceeds were $ 31,871 or approximately $ 28,821 in net
proceeds after deducting underwriting discounts and commissions of
$ 2,550 and other offering costs of approximately $ 500.
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, 2013 of $
5,778 and had a negative cash flow from operating activities of $
6,179 during the six month period ended June 30, 2013. The
accumulated deficit as of June 30, 2013 is $ 70,354. 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 pursue its partnering activity.
Management's plans also include seeking additional investments and
commercial agreements to continue the operations of the Company and
the Subsidiary.
The Company believes that the net proceeds of the underwritten
public offering in February 2013, plus its existing cash and cash
equivalents, should be sufficient to meet its operating and capital
requirements through 2014.
c. In May 2013, the Subsidiary received approval for an
additional Research and Development program from the Office of the
Chief Scientist in Israel ("OCS") for the period December 2012
through November 2013. The approval allows for a grant of up to
approximately $2,000 based on research and development expenses,
not funded by others, of up to $3,660. As of June 30, 2013, $1,218
has been recorded as grants receivable. In July 2013, subsequent to
the balance sheet date, $65 has been received.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited interim financial statements of the
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, 2012 ("2012 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 2012 Form 10-K, have
been omitted.
NOTE 3:- STOCKHOLDERS' EQUITY
a. General:
In March 2013, the Compensation Committee of 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 3,855,802 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 30, 2013.
b. Issuance of stock options, warrants and restricted shares to employees and directors:
1. In January 2013, 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 $ 7.25. These options
and shares of restricted Common stock were granted under the stock
incentive plan. The fair value of these options and shares of
restricted Common stock at the grant date was $ 4.449 per option
and $ 7.50 per share. The Company recorded compensation expenses in
the amount of $ 246 in the six months ended June 30, 2013.
2. In March 2013, the Company granted 10,000 shares of
restricted Common stock to an employee. These shares are restricted
in that they may not be disposed of and are not entitled to
dividends. These restrictions will be removed in relation to 5,000
shares of Common stock on each of March 28, 2014 and March 28,
2015. The shares were issued under the stock incentive plan. The
fair value of these shares of restricted Common stock at the grant
date amounted to $ 49, and will be recognized as an expense using
the straight line method.
A summary of the Company's activity for restricted shares
granted to employees and directors is as follows:
Six months ended
Restricted shares June 30, 2013
------------------------------------------- ----------------
Number of restricted shares as of December
31, 2012 60,357
Vested (35,000)
Granted 45,000
----------------
Number of restricted shares as of June
30, 2013 70,357
================
3. In March 2013, an employee exercised options to purchase
3,500 shares of Common Stock at $ 3.64 per share or an aggregate
exercise price of $ 13.
4. In March 2013, the Company granted to employees of the
Company options to purchase 110,000 shares of common stock
exercisable at an exercise price of $ 4.85 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. The fair value
of these options at the grant date was $ 290.
5. In March 2013, the Company announced the appointment of a new
member of the Board of Directors effective March 15, 2013. In
connection with the appointment, the new board member was awarded
stock options covering up to 300,000 shares of the Company's common
stock, at a per share exercise price of $ 4.99, subject to approval
by the NYSE MKT of an additional listing application covering the
issuance of the shares underlying such options. On April 12, 2013,
prior to approval by the NYSE MKT of the additional listing
application, the Compensation Committee of the Company's Board of
Directors determined instead to issue such options under the
Company's stock incentive plan. 100,000 shares underlying such
options vested immediately upon issuance in April 2013 and the
remaining underlying shares will vest equally on each of March 15,
2014 and March 15, 2015, subject to continuous service through each
vesting date. The options may only be exercised for cash and will
expire on March 15, 2018. The Company recorded related expenses in
the amount of $ 322 in the six months ended June 30, 2013.
6. A summary of the Company's activity for options and warrants
granted to employees and directors is as follows:
Six months ended
June 30, 2013
------------------------------------------------------
Weighted
Number Weighted average
of average remaining Aggregate
options exercise contractual intrinsic
and warrants price terms (years) value price
------------- --------- -------------- ------------
Outstanding at December
31, 2012 2,656,587 $ 6.04
Granted 485,000 $ 5.31
Expired/Forfeited (28,994) $ 5.41
Exercised (3,500) $ 3.64
------------- ---------
Outstanding at June
30, 2013 3,109,093 $ 5.93 $ 4.85 $ 1,646
============= ========= ============== ============
Vested and expected
to vest at June 30,
2013 3,054,379 $ 5.92 $ 4.82 $ 1,637
============= ========= ============== ============
Exercisable at June
30, 2013 2,014,806 $ 5.46 $ 3.86 $ 1,481
============= ========= ============== ============
As of June 30, 2013, there was $ 2,829 of total unrecognized
compensation cost related to non-vested share-based compensation
arrangements granted to employees and directors. That cost is
expected to be recognized over a weighted-average period of 1.7
years.
The aggregate intrinsic value represents the total intrinsic
value (the difference between the Company's Common share fair value
as of June 30, 2013 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, 2013.
Calculation of aggregate intrinsic value is based on the share
price of the Company's Common stock as of June 30, 2013 ($ 3.80 per
share, as reported on the NYSE MKT).
c. Issuance of shares, stock options and warrants to consultants:
1. In January 2013, the Company issued a total of 55,000 shares
of Common stock to two consultants. Total compensation, measured as
the grant date fair market value of the stock, amounted to $ 494
and was recorded as an operating expense in the Statement of
Operations. As part of the agreement with the consultant, the
Company has an obligation to issue an additional 25,000 shares for
services received during the six month period ended June 30,
2013.
2. In March 2013, the Company approved the grant to two
consultants of warrants to purchase a total of 25,000 shares at an
exercise price of $ 4.99 per share. The warrants have a five year
term and vested immediately upon issuance in April 2013. Total
compensation amounted to $ 80 and was recorded as an operating
expense in the Statement of Operations.
3. In June 2013, the Company entered into an agreement with a
consultant for a period of 24 months. Under the terms of the
agreement, the Company will issue warrants to purchase 100,000
shares at an exercise price at the market price of the issue, with
a five year term and will be immediately exercisable upon issuance.
Total compensation of $10 was recorded as an operating expense in
the Statement of Operations.
4. A summary of the Company's activity for warrants and options
granted to consultants is as follows:
Six months ended
June 30, 2013
------------------------------------------------------
Weighted
Number Weighted average
of average remaining Aggregate
options exercise contractual intrinsic
and warrants price terms (years) value price
------------- --------- -------------- ------------
Outstanding at December
31, 2012 521,904 $ 7.29
============= =========
Granted 25,000 $ 4.99
Outstanding at June
30, 2013 546,904 $ 7.17 $ 4.34 $ 7
============= ========= ============== ============
Exercisable at June
30, 2013 466,667 $ 7.04 $ 3.63 $ 7
============= ========= ============== ============
As of June 30, 2013, there was $ 382 of total unrecognized
compensation cost related to non-vested share-based compensation
arrangements granted to consultants. That cost is expected to be
recognized over a weighted-average period of one year.
Calculation of aggregate intrinsic value is based on the share
price of the Company's Common stock as of June 30, 2013 ($ 3.80 per
share, as reported on the NYSE MKT).
d. 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,
2013 2012 2013 2012
Research and development
expenses $ 66 $ 98 $ 42 $ 72
General and administrative
expenses 2,011 1,849 580 1,626
--------- -------- --------- ----------
$ 2,077 $ 1,947 $ 622 $ 1,698
========= ======== ========= ==========
e. Summary of options and warrants:
A summary of all the options and warrants outstanding as of June
30, 2013 is presented in the following table:
As of June 30, 2013
-------------------------------------------
Weighted
Average
Remaining
Exercise Options and Options and Contractual
Price per Warrants Warrants Terms (in
Options / Warrants Share ($) Outstanding Exercisable years)
------------------------------ ------------- -------------- ------------ --------------
Options:
Granted to Employees
and Directors 2.49-3.14 499,806 294,556 6.2
3.64-4.99 453,629 105,057 6.0
5.13-7.25 163,967 37,240 8.4
8.19-14.50 1,109,451 695,713 4.6
---------- ------------
2,226,853 1,132,566
---------- ------------
Granted to Consultants
4.20-5.34 53,988 43,801 3.0
6.65-8.19 119,916 61,158 7.8
14.50 11,292 - 8.6
185,196 104,959
---------- ------------
Total Options 2,412,049 1,237,525
---------- ------------
Warrants:
Granted to Employees and
Directors 2.49 882,240 882,240 2.8
------------ ------------
Granted to Consultants 3.19-4.01 61,370 61,370 2.9
4.99 31,635 31,635 4.4
5.50 67,230 67,230 0.4
9.17-11.16 201,473 201,473 4.0
361,708 361,708
------------ ------------
Granted to Investors
0.0002 35,922 35,922 2.8
2.49 22,950 22,950 2.8
4.54-6.00 3,233,521 3,233,521 2.7
6.78-8.34 4,678,550 4,678,550 4.4
7,970,943 7,970,943
------------ ------------
Total Warrants 9,214,891 9,214,891
------------ ------------
Total Option and Warrants 11,626,940 10,452,416
============ ============
NOTE 4:- FAIR VALUE MEASUREMENTS
The Company classified certain warrants with down-round
protection issued to the purchasers of convertible debentures in
2010 as a liability at their fair value according to ASC
815-40-15-7I. The liability in respect of these warrants will be
remeasured at each reporting period until exercised or expired.
Changes in the fair value of these warrants are reported in the
statements of operations as financial income or expense.
The fair value of these warrants was estimated at June 30, 2013
and December 31, 2012 using the Binomial pricing model with the
following assumptions:
June 30, December 31,
2013 2012
--------- -------------
Dividend yield 0% 0%
Expected volatility 79.14% 78.1%
Risk-free interest rate 0.43% 0.3%
Contractual life (in years) 2.23 2.7
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, 2011 $ 478
Classification of liability in respect of warrants
into equity due to the exercise of warrants (883)
Change in the fair value of liability in respect
of warrants 2,336
-------------
Balance as of December 31, 2012 1,931
Change in the fair value of liability in respect
of warrants (1,277)
-------------
Balance as of June 30, 2013 (unaudited) $ 654
=============
NOTE 5:- LOSS PER SHARE
Details in the computation of diluted loss per share:
Six months ended June 30,
---------------------------------------------
2013 2012
----------------------- --------------------
Weighted Weighted
average average
number of number of
shares Loss shares Loss
---------- ----------- ---------- -------
For the computation of basic
loss 16,850,657 $ 5,778 9,893,072 $ 9,658
========== =========== ========== =======
Effect of potential dilutive
common shares issuable upon
exercise of warrants classified
as liability 45,084 $1,722 (**) - (*) - (*)
For the computation of diluted
loss 16,895,741 $ 7,055 9,893,072 $ 9,658
========== =========== ========== =======
Three months ended June 30,
----------------------------------------
2013 2012
------------------- -------------------
Weighted Weighted
average average
number of number of
shares Loss shares Loss
---------- ------- ---------- -------
For the computation of basic
and diluted loss 18,410,951 $ 2,099 10,032,760 $ 6,912
========== ======= ========== =======
(*) Anti-dilutive.
(**) Financial income resulted from changes in fair value of warrants classified as liability.
The total weighted average number of shares related to the
outstanding options, warrants and restricted shares excluded from
the calculations of diluted loss per share due to their
anti-dilutive effect was 10,289,103 and 6,507,183 for the six
months ended June 30, 2013 and 2012, respectively.
- - - - -
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SSIFEMFDSEFA
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