TIDMMEDG TIDMMEDU
RNS Number : 4925S
Medgenics Inc
07 November 2013
Press Release 7 November 2013
Medgenics Reports Third Quarter Financial Results
Business Update Conference Call Scheduled for Tomorrow at 8:30
a.m. Eastern time
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 nine months ended September 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.
Highlights of the third quarter and recent weeks include:
-- Appointed a new leadership team including President and CEO
Michael Cola, formerly with Shire and Safeguard Scientifics; CFO
John Leaman, formerly with Shire and McKinsey; and Global Head of
R&D Garry Neil, formerly with Johnson & Johnson; also
announced the retirement of founder and former CEO Andrew L.
Pearlman, Ph.D.
-- Appointed biopharmaceutical industry veteran Wilbur H. (Bill)
Gantz to the Company's Board of Directors
-- Reported new, positive data on the Company's
second-generation viral vectors in a poster presentation at the
European Society of Gene and Cell Therapy Congress
Management Commentary
"It was with great pleasure that the new executive team joined
Medgenics in mid-September. We are excited to be building upon the
Company's strong scientific and technological foundation, and are
refining new strategic initiatives to advance the clinical
development program in carefully selected specialty and orphan
indications," stated Michael Cola, President and Chief Executive
Officer of Medgenics. "Our Board of Directors, enhanced by the
recent addition of Bill Gantz, is comprised of an impressive team
of industry leaders. We are delighted to be working together to
implement our shared vision for the future of Medgenics."
"The Company achieved a significant milestone with the recent
presentation of new, positive data on our second-generation viral
vectors that optimize the Biopump platform through a number of
enhancements to our protein expression technology and processing
methods, as well as improvements in patient administration. In
vitro and in vivo models of the second-generation viral vectors
showed potential to substantially increase the duration and levels
of the protein secretion of the Biopump along with enhanced
surgical techniques. These advances can be clinically meaningful,
particularly for patients on chronic protein therapy. Based on
these results, we believe that all clinical programs, including the
proposed EPODURE trial in the U.S., could benefit from the
potentially improved performance from a second-generation vector.
Our plan is to use Biopumps utilizing these vectors in clinical
trials expected to commence in the first half of 2014," commented
Garry Neil, M.D., Global Head of R&D for Medgenics.
Third Quarter Financial Results
Gross research and development (R&D) expense for the third
quarter of 2013 increased to $2.45 million from $1.89 million for
same period in 2012. Net R&D expense for the third quarter of
2013 was $2.34 million compared with net R&D expense of $1.61
million for the prior-year third quarter. The increase in net
R&D expense was due mainly to higher headcount and an increase
in clinical activities.
General and administrative expense for the three months ended
September 30, 2013 was $2.56 million, up from $1.47 million for the
same period in 2012 primarily due to increases in general and
administrative personnel, directors' equity compensation and
professional fees.
Financial expense for the quarter ended September 30, 2013
increased to $1.26 million from nil for the same period in 2012,
mainly due to the change in valuation of the warrant liability.
Financial income for the quarter ended September 30, 2013
declined to $0.02 million from $0.06 million for the same period in
2012, primarily due to the change in valuation of the warrant
liability.
For the third quarter of 2013 the Company reported a net loss of
$6.14 million or $0.33 per share, compared with a net loss of $3.03
million or $0.25 per share for the third quarter of 2012.
Nine Month Financial Results
Gross R&D expense for the first nine months of 2013
increased to $6.56 million from $5.13 million for same period in
2012 due to an increase in R&D personnel and clinical
activities. Net R&D expense for the first nine months of 2013
was $5.23 million compared with net R&D expense of $3.36
million for the first nine months of 2012. The increase in net
R&D expense was due to a reduction in participation by the OCS,
$1.33 million in the 2013 period versus $1.77 million in the 2012
period, and the increase in the gross R&D expense as explained
above.
General and administrative expense for the nine months ended
September 30, 2013 of $6.70 million increased from $5.60 million in
the prior-year period primarily due to increases in general and
administrative personnel, directors' equity compensation and
professional fees.
Financial expense for the nine months ended September 30, 2013
of $0.02 million decreased from $3.72 million for the same period
in 2012, primarily due to the change in valuation of the warrant
liability.
Financial income for the nine months ended September 30, 2013
increased by an insignificant amount compared to the same period in
2012.
For the nine months ended September 30, 2013, the Company
reported a net loss of $11.92 million or $0.68 per share, compared
with a net loss of $12.69 million or $1.20 per share in the
comparable 2012 period.
The Company ended the third quarter of 2013 with cash and cash
equivalents of $26.79 million, compared with $6.43 million as of
December 31, 2012. The Company used $8.36 million in net cash to
fund operating activities during the first nine months of 2013,
compared with $5.87 million in the first nine months of 2012.
Conference Call
Medgenics management will host a Business Update conference call
to discuss the Company's progress and to answer questions tomorrow,
Friday, November 8, 2013 beginning at 8:30 a.m. Eastern time.
Shareholders and other interested parties may participate in the
call by dialing 877-664-6134 (from within the U.S.) or 702-495-1913
(from outside the U.S.) or 1-809-457-877 (toll-free from Israel)
and entering passcode 94707205. The call will also be broadcast
live on the Company's website at www.medgenics.com.
A replay of the conference call will be accessible two hours
after its completion through November 14, 2013, by dialing
855-859-2056 (domestic) or 404-537-3406 (international) and
referencing conference ID number 94707205. The call will also be
archived for 90 days on the Company's website at
www.medgenics.com.
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.
Contacts:
Medgenics, Inc.
John Leaman, CFO
john.leaman@medgenics.com
LHA
Anne Marie Fields,
afields@lhai.com
@LHA_IR_PR 212-838-3777
Abchurch Communications
Joanne Shears / Jamie Hooper / Harriet
Rae
harriet.rae@abchurch-group.com +44 207 398 7718
Oriel Securities (NOMAD & Joint
Broker)
Jonathan Senior / Giles Balleny +44 207 710 7617
SVS Securities plc (Joint Broker)
Alex Brearley +44 203 700 0100
Tables to Follow
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
September December
30, 31,
2013 2012
----------- ---------
(Unaudited)
-----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 26,791 $ 6,431
Accounts receivable and prepaid expenses 1,009 539
----------- ---------
Total current assets 27,800 6,970
----------- ---------
LONG-TERM ASSETS:
Restricted lease deposits 46 62
Severance pay fund 93 283
Property and equipment, net 381 352
Total long-term assets 520 697
----------- ---------
DEFERRED ISSUANCE EXPENSES - 40
----------- ---------
Total assets $ 28,320 $ 7,707
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables $ 1,546 $ 877
Other accounts payable and accrued expenses 2,042 1,473
----------- ---------
Total current liabilities 3,588 2,350
----------- ---------
LONG-TERM LIABILITIES:
Accrued severance pay 873 1,492
Liability in respect of warrants 1,911 1,931
----------- ---------
Total long-term liabilities 2,784 3,423
----------- ---------
Total liabilities 6,372 5,773
----------- ---------
STOCKHOLDERS' EQUITY:
Common stock - $ 0.0001 par value;
100,000,000 shares authorized;18,481,308 and
12,307,808 shares issued and outstanding at
September 30, 2013 and December 31, 2012, respectively 2 1
Additional paid-in capital 98,443 66,509
Deficit accumulated during the development
stage (76,497) (64,576)
----------- ---------
Total stockholders' equity 21,948 1,934
----------- ---------
Total liabilities and stockholders' equity $ 28,320 $ 7,707
=========== =========
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)
Nine months ended Three months Period from
September 30, ended January
September 30, 27, 2000
(inception)
through
September
30,
2013 2012 2013 2012 2013
Unaudited
Research and
development
expenses $ 6,556 $ 5,125 $ 2,452 $ 1,894 $ 44,185
Less -
Participation
by
the Office of
the Chief
Scientist (1,327) (1,769) (109) (283) (8,376)
U.S. Government
grant - - - - (244)
Participation by
third
party - - - - (1,067)
-------------- ----------- ------------ ----------------- -----------
Research and
development
expenses, net 5,229 3,356 2,343 1,611 34,498
General and
administrative
expenses 6,695 5,603 2,561 1,470 40,290
Other income:
Excess amount of
participation
in research and
development
from third party - - - - (2,904)
-------------- ----------- ------------ ----------------- -----------
Operating loss (11,924) (8,959) (4,904) (3,081) (71,884)
Financial
expenses (21) (3,721) (1,260) - (5,311)
Financial income 29 4 21 55 369
-------------- ----------- ------------ ----------------- -----------
Loss before taxes
on income (11,916) (12,676) (6,143) (3,026) (76,826)
Taxes on income 5 9 - 1 100
-------------- ----------- ------------ ----------------- -----------
Loss $(11,921) $ (12,685) $(6,143) $ (3,027) $ (76,926)
============== =========== ============ ================= ===========
Basic and diluted
loss
per share $ (0.68) $ (1.20) $ (0.33) $ (0.25)
============== =========== ============ =================
Weighted average
number
of shares of
Common stock
used in
computing basic
loss per share 17,435,235 10,604,924 18,410,951 12,013,153
================== =========== ============== =============
Weighted average
number
of shares of
Common stock
used in
computing
diluted
loss per share 17,468,255 10,604,924 18,410,951 12,013,153
================== =========== ============= =================
The accompanying notes are an integral part of the interim
consolidated financial statements.
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 35,000 (*) 55 - 55
Issuance of Common stock
to consultants at $ 4.84
and $ 8.79 per share 30,000 (*) 204 - 204
Issuance of Common stock
and warrants at $4.90 per
unit of one share and 0.75
warrant 1,944,734 (*) 8,407 - 8,407
Exercise of options and
warrants 504,111 (*) 2,263 - 2,263
Stock based compensation
related to options and
warrants granted to consultants
and employees - - 1,973 - 1,973
Loss - - - (12,685) (12,685)
---------- ------ ---------- ------------ ---------------
Balance as of September
30, 2012 (unaudited) 12,236,570 $ 1 $ 65,403 $ (62,190) $ 3,214
========== ====== ========== ============ ===============
(*) 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
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,
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 6,070,000 1 28,820 - 28,821
Stock based compensation
related to Common stock
to consultants at $ 7.25
per share (**) 55,000 (*) 594 - 594
Issuance and vesting of
restricted common stock 45,000 (*) 331 - 331
Exercise of warrants and
options 3,500 (*) 13 - 13
Stock based compensation
related to options and warrants
granted to consultants and
employees - - 2,176 - 2,176
Loss - - (11,921) (11,921)
---------- ------ ---------- ------------ --------------
Balance as of September
30, 2013 (unaudited) 18,481,308 $ 2 $ 98,443 $ (76,497) $ 21,948
========== ====== ========== ============ ==============
(*) Represents an amount lower than $ 1.
(**) Includes stock based compensation for an additional 25,000
shares which were approved, but not issued, as of September 30,
2013.
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)
Nine months ended through
September 30, September 30,
----------------------
2013 2012 2013
---------- ---------- -----------------
Unaudited
-----------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Loss $ (11,921) $ (12,685) $ (76,926)
Adjustments to reconcile loss to net
cash used in operating activities:
Depreciation 130 108 1,356
Loss from disposal of property and equipment - - 330
Stock based compensation to employees
and consultants 3,101 2,232 13,286
Interest and amortization of beneficial
conversion feature of convertible note - - 759
Change in fair value of convertible
debentures and warrants (20) 3,632 3,958
Accrued severance pay, net (429) 237 780
Exchange differences on a restricted
lease deposit and on long term loan 1 (2) 2
Changes in operating assets and liabilities:
Accounts receivable and prepaid expenses (447) 503 (1,026)
Trade payables 669 (133) 2,150
Other accounts payable and accrued expenses 569 239 2,589
Restricted lease deposit (8) (5) (68)
Net cash used in operating activities (8,355) (5,874) (52,810)
---------- ---------- -----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (159) (54) (2,241)
Proceeds from disposal of property and
equipment - - 173
Net cash used in investing activities $ (159) $ (54) $ (2,068)
---------- ---------- -----------------
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)
through
Nine months ended September
September 30, 30,
-------------------
2013 2012 2013
---------- ------- -----------------
Unaudited
--------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of shares and
warrants, net $ 28,861 $ 8,407 $ 71,769
Proceeds from exercise of options and
warrants, net 13 1,525 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 9,932 81,669
---------- ------- -----------------
Increase in cash and cash equivalents 20,360 4,004 26,791
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 $ 26,791 $ 8,999 $ 26,791
========== ======= =================
Supplemental disclosure of cash flow
information:
Cash paid during the period for:
Interest $ - $ - $ 242
========== ======= =================
Taxes $ 5 $ 40 $ 153
========== ======= =================
Supplemental disclosure of non-cash
flow information:
Issuance expenses paid with Common stock $ - $ - $ 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 $ - $ 738 $ 2,014
========== ======= =================
The accompanying notes are an integral part of the interim
consolidated financial statements.
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").
The Company's Common stock is traded on the NYSE MKT (formerly
NYSE Amex) and on the AIM market of the London Stock Exchange
("AIM").
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 nine month period ended September 30, 2013
of $ 11,921 and had a negative cash flow from operating activities
of $ 8,355 during the nine month period ended September 30, 2013.
The accumulated deficit as of September 30, 2013 is $ 76,497. 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 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.
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 September 30, 2013,
$909 has been received and $664 recorded as grants receivable. In
October 2013, subsequent to the balance sheet date, an additional
$348 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 there under 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 shares and warrants to investors:
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 at a price to the public of $ 5.25 per fixed
combination. Each combination consisted of one share of Common
stock and a warrant to purchase one-half of a share of Common stock
at an exercise price of $6.78 per share. In March 2013, the
underwriters exercised their overallotment option and purchased an
additional 420,000 shares of Common stock at $5.24 per share and an
additional 840,000 warrants 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.
c. Issuance of stock options, warrants and restricted shares to employees and directors:
1. A summary of the Company's activity for restricted shares
granted to employees and directors is as follows:
Nine months
ended
September 30,
Restricted shares 2013
-------------------------------------------- --------------
Number of restricted shares as of December
31, 2012 60,357
Vested (35,000)
Granted 45,000
--------------
Number of restricted shares as of September
30, 2013 70,357
==============
2. A summary of the Company's activity for options and warrants
granted to employees and directors is as follows:
Nine months ended
September 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 4,160,000 $ 4.49
Expired/Forfeited (34,994) $ 5.56
Exercised (3,500) $ 3.64
--------------- -----------
Outstanding at September
30, 2013 6,778,093 $ 5.09 $ 7.37 $ 21,264
=============== =========== ============== =============
Vested and expected
to vest at September
30, 2013 6,546,700 $ 5.10 $ 7.31 $ 20,544
=============== =========== ============== =============
Exercisable at September
30, 2013 2,150,224 $ 5.48 $ 3.46 $ 6,881
=============== =========== ============== =============
The aggregate intrinsic value represents the total intrinsic
value (the difference between the Company's Common share fair value
as of September 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 September 30, 2013.
Calculation of aggregate intrinsic value is based on the share
price of the Company's Common stock as reported on the NYSE MKT as
of September 30, 2013 ($7.80 per share).
As of September 30, 2013, there was $9,879 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 2.2
years.
In September 2013, upon the resignation of our former CEO, the
Company caused his unvested options to become fully vested as of
his separation date (September 13, 2013), and all options vested as
of the separation date will be exercisable through the one-year
anniversary of his separation date. The Company recorded an
additional expense in the amount of $120 during the quarter.
d. 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 nine month period ended September 30,
2013.
2. A summary of the Company's activity for warrants and options
granted to consultants is as follows:
Nine months ended
September 30, 2013
------------------------------------------------------
Weighted
Number Weighted average
of average remaining Aggregate
options exercise contractual intrinsic
and warrants price terms (years) value price
------------- --------- -------------- ------------
Outstanding at December31,
2012 521,904 $ 7.29
Granted 125,000 $ 4.01
Expired/Forfeited (25,000) $ 7.56
Outstanding at September
30, 2013 621,904 $ 6.61 4.28 $ 1,083
============= ========= ============== ============
Exercisable at September
30, 2013 561,907 $ 6.57 3.84 $ 1,010
============= ========= ============== ============
The aggregate intrinsic value represents the total intrinsic
value (the difference between the Company's Common share fair value
as of September 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 September 30, 2013.
As of September 30, 2013, there was $467 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 1.3 years.
Calculation of aggregate intrinsic value is based on the share
price of the Company's Common stock as reported on the NYSE MKT as
of September 30, 2013 ($7.80 per share).
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:
Nine months ended Three months ended
September 30, September 30,
2013 2012 2013 2012
Research and development
expenses $ 221 $ 193 $ 155 $ 95
General and administrative
expenses 2,880 2,039 869 190
$ 3,101 $ 2,232 $ 1,024 $ 285
f. Summary of options and warrants:
A summary of all the options and warrants outstanding as of
September 30, 2013 is presented in the following table:
As of September 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 2.49-3.14 499,806 354,556 4.3 6.0
3.64-4.99 3,653,629 117,915 9.5 9.0
5.13-7.25 632,967 35,740 9.6 4.4
8.19-14.50 1,109,451 759,773 4.4 4.4
----------- -----------
5,895,853 1,267,984
----------- -----------
Granted to Consultants
4.20-5.14 34,634 24,447 4.3
6.65-8.19 119,916 73,870 7.8
14.50 5,646 1,882 8.8
160,196 100,199
----------- ----------
Total Options 6,056,049 1,368,183
----------- ----------
Warrants:
Granted to Employees
and Directors 2.49 882,240 882,240 2.5
--------------- -------------
Granted to Consultants 3.19-4.01 161,370 161,370 3.9
4.99 31,635 31,635 4.1
5.50 67,230 67,230 0.2
9.17-11.16 201,473 201,473 3.7
461,708 461,708
--------------- -------------
Granted to Investors
0.0002 35,922 35,922 2.5
2.49 22,950 22,950 2.5
4.54-6.00 3,233,521 3,233,521 2.5
6.78-8.34 4,678,550 4,678,550 4.2
7,970,943 7,970,943
--------------- -----------------
Total Warrants 9,314,891 9,314,891
----------- -----------------
Total Option and Warrants 15,370,940 10,683,074
=================== =============
NOTE 4:- CONTINGENCIES
In September 2013, three executives joined the Company. Per
their employment agreements, if terminated without cause, these
executives will be entitled to severance pay in the aggregate
amount of $2,975.
NOTE 5:- FAIR VALUE MEASURMENTS
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 is
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 September 30,
2013 and December 31, 2012 using the Binomial pricing model with
the following assumptions:
September December
30, 31,
2013 2012
---------- ---------
Dividend yield 0% 0%
Expected volatility 81.6% 78.1%
Risk-free interest rate 0.3% 0.3%
Contractual life (in years) 2.0 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 (20)
-------------
Balance as of September 30, 2013 (unaudited) $ 1,911
=============
-Ends-
This information is provided by RNS
The company news service from the London Stock Exchange
END
QRTNKODBQBDDNDK
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