Medgenics Inc

1st Quarter Results

RNS Number : 3608E
Medgenics Inc
09 May 2013
 



 

 

Press Release

9 May 2013

 

 

Medgenics Reports First Quarter 2013 Financial Results

 

Medgenics, Inc. (NYSE MKT: MDGN and AIM: MEDU, MEDG) (the "Company"), the developer of a novel platform technology for the sustained production and delivery of therapeutic proteins in patients using their own tissue, today reported financial results for the three months ended March 31, 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 First Quarter and recent weeks: 

·     Raised gross proceeds of approximately $32 million in a public offering of common stock and warrants

·     Appointed Joseph J. Grano, Jr., former Chairman and CEO of UBS Financial Services, to the Company's Board of Directors

·     Received a Notice of Allowance from the U.S. Patent Office for claims that expand the patent protection for the Company's Biopumpäplatform technology for additional therapeutic proteins

·     Reported interim results from the Company's ongoing Phase IIa study of EPODUREäto treat anemia in dialysis patients

 

Management Commentary

 

"During the first quarter we achieved important milestones that strengthened our position in key areas and advanced our strategic and clinical goals," stated Andrew L. Pearlman, Ph.D., President and Chief Executive Officer of Medgenics. "We raised gross proceeds of approximately $32 million to strengthen our financial foundation, reported interim clinical results from our Phase IIa anemia trial in patients with end-stage renal disease, fortified our intellectual property and enhanced our Board of Directors with the appointment of Joseph J. Grano, Jr.

 

"We look forward to advancing our clinical studies in both Israel and the U.S. and to achieving a number of value-creating milestones throughout the remainder of 2013," concluded Dr. Pearlman.

 

First Quarter Financial Results

 

Gross research and development ("R&D") expense for the first quarter of 2013 increased to $2.03 million from $1.59 million for same period in 2012 due to an increase in R&D personnel.  Net R&D expense for the 2013 first quarter was $2.03 million compared with net R&D expense of $0.57 million for the prior year's first quarter, when grants of $1.02 million were received from the Israel Office of the Chief Scientist.

 

General and administrative expense for the first quarter of 2013 was $2.55 million compared with $1.36 million for the first quarter of 2012, primarily due to increased stock-based compensation granted to directors and consultants.

 

Financial income for the first quarter of 2013 increased to $0.92 million from $0.02 million for the same period in 2012, mainly as a result of changes in valuation of the warrant liability. 

 

For the quarter ended March 31, 2013, the Company reported a net loss of $3.68 million or $0.29 diluted loss per share, compared with a net loss of $2.71 million or $0.28 per share in the comparable 2012 period.

 

As of March 31, 2013, Medgenics had cash and cash equivalents of $32.46 million, compared with $6.43 million as of December 31, 2012.  For the three months ended March 31, 2013, the Company used $2.80 million in net cash to fund operating activities, compared with $2.36 million for the three months ended March 31, 2012.

 

 

About Medgenics

 

Medgenics is developing and commercializing Biopump™, 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 and hemophilia, among others. 

 

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.

Dr. Andrew L. Pearlman

[email protected]

Phone: +972 4 902 8900

 

LHA
Anne Marie Fields

[email protected]

Phone: +1 212-838-3777

Abchurch Communications

Adam Michael

Joanne Shears

Jamie Hooper

[email protected]  

 

Phone: +44 207 398 7719

Nomura Code Securities (NOMAD & Joint Broker)

Jonathan Senior

Giles Balleny

 

Phone: +44 207 776 1200

 

SVS Securities plc (Joint Broker)

Alex Brearley

 

Phone: +44 207 638 5600

 

 

-Tables to follow-

 

 

 

 

MEDGENICS, INC. AND ITS SUBSIDIARY

 (A Development Stage Company)

CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands

 


March 31,


December 31,

 

 



2013


2012

 

 


Unaudited



 

 






 

 

ASSETS





 

 






 

 

CURRENT ASSETS:





 

 






 

 

 Cash and cash equivalents


$       32,463


$       6,431

 

 

 Accounts receivable and prepaid expenses


572


539

 

 






 

 

Total current assets


33,035


6,970

 

 






 

 

LONG-TERM ASSETS:





 

 






 

 

 Restricted lease deposits


45


62

 

 

 Severance pay fund


229


283

 

 






 

 

Total long-term assets


274


345

 

 






 

 






 

 

PROPERTY AND EQUIPMENT, NET


350


352

 

 






 

 






 

 

DEFERRED ISSUANCE EXPENSES


-


40

 

 






 

 

Total assets


$     33,659


$     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

 


March 31,


December 31,

 

 



2013


2012

 

 


Unaudited



 

 






 

 

LIABILITIES AND STOCKHOLDERS' EQUITY





 

 






 

 

CURRENT LIABILITIES:





 

 






 

 

Trade payables 


$          951


$          877

 

 

Other accounts payable and accrued expenses


1,718


1,473

 

 






 

 

Total current liabilities


2,669


2,350

 

 






 

 

LONG-TERM LIABILITIES:





 

 






 

 

Accrued severance pay


1,429


1,492

 

 

Liability in respect of warrants


1,017


1,931

 

 






 

 

Total long-term liabilities


2,446


3,423

 

 






 

 

Total liabilities


5,115


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 March 31, 2013 and December 31, 2012, respectively


2


1

 

 

Additional paid-in capital


96,797


66,509

 

 

Deficit accumulated during the development stage


(68,255)


(64,576)

 

 






 

 

Total stockholders' equity


28,544


1,934

 

 






 

 

Total liabilities and stockholders' equity


$            33,659


$          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)

 


Three months ended

March 31,


Period from January 27, 2000 (inception) through March 31,


2013


2012


2013


Unaudited







Research and development expenses

$      2,031


$    1,592


$   39,660







Less - Participation by the Office of the Chief Scientist

-


(1,022)


(7,049)

  U.S. Government grant



-


(244)

  Participation by third party

-


-


(1,067)







Research and development expenses, net

2,031


570


31,300







General and administrative expenses

2,546


1,359


36,141







Other income:






Excess amount of participation in research and development from third party

-


-


(2,904)







Operating loss

(4,577)


(1,929)


(64,537)







Financial expenses

(14)


(801)


(4,410)

Financial income

915


18


361







Loss before taxes on income

(3,676)


(2,712)


(68,586)







Taxes on income

3


-


98







Loss

$     (3,679)


$   (2,712)


$  (68,684)







Basic loss per share

$       (0.24)


$     (0.28)









Diluted loss per share

$       (0.29)


$     (0.28)









Weighted average number of Common stock used in computing basic loss per share

15,222,268


9,753,725



Weighted average number of Common stock used in computing diluted loss per share

15,634,768


9,753,725



 

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)



Common stock


 

 

Additional

paid-in

capital


Deficit

accumulated

during the

development

stage


 

Total

stockholders'

equity



Shares


Amount


















Balance as of December  31, 2011


9,722,725


$            1


$        52,501


$       (49,505)


$          2,997












Stock based compensation related to options and warrants granted to consultants and employees


-


-


122


-


122












Issuance of restricted common stock


35,000


(*)


55


-


55












Issuance of Common stock to consultants at $4.84 per share


15,000


(*)


73


-


73












Loss


-


-


-


(2,712 )


(2,712)












Balance as of  March 31, 2012 (Unaudited)


9,772,725


$           1


$        52,751


$       (52,217)


$             535

 

(*) 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)

 



Common stock


 

 

Additional

paid-in

capital


Deficit

accumulated

during the

development

stage


 

Total

stockholders'

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


(*)


462


-


462

Issuance and vesting of restricted common stock


45,000


(*)


215


-


215

Exercise of  warrants and options


3,500


(*)


13


-


13

Stock based compensation related to options and warrants granted to consultants and employees


-


-


778


-


778

Loss


-


-


-


(3,679)


(3,679)












Balance as of  March 31, 2013 (unaudited)


18,481,308


$           2


$         96,797


$       (68,255)


$         28,544

 

 

 

(*) Represents an amount lower than $1.

(**) Includes stock based compensation for an additional 13,000 shares which were not issued as of March 31, 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



Three months ended

March 31,


Period from January 27, 2000 (inception) through March 31,



2013


2012


2013



Unaudited








CASH FLOWS FROM OPERATING ACTIVITIES:







 








 

 Loss


$      (3,679)


$       (2,712)


$   (68,684)

 








 

Adjustments to reconcile loss to net cash used in operating activities:







 








 

Depreciation


39


35


1,265

 

Loss from disposal of property and equipment


-


-


330

 

Stock based compensation to employees and consultants


1,455


177


11,640

 

Interest and amortization of beneficial conversion feature of convertible note


-


-


759

 

Change in fair value of convertible debentures and warrants


(914)


796


3,064

 

Accrued severance pay, net


(9)


86


1,200

 

Exchange differences on a restricted lease deposit and on long term loan


22


(1)


23

 

Increase in accounts receivable and prepaid expenses


(33)


(727)


 (612)

 

Increase (decrease) in trade payables


74


(6)


1,555

 

Increase (decrease) in other accounts payable and accrued expenses


245


(10)


2,265

 








 

Net cash used in operating activities


(2,800)


(2,362)


(47,195)

 








 

CASH FLOWS FROM INVESTING ACTIVITIES:







 








 

Purchase of property and equipment


(37)


(36)


(2,119)

 

Proceeds from disposal of property and equipment


-


-


173

 








 

Net cash used in investing activities


$             (42)


$              (40)


$         (2,011)

 

 

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

 



Three months ended

March 31,


Period from January 27, 2000 (inception) through March 31,

 

 



2013


2012


2013

 

 



Unaudited

 

 








 

 








 

 

CASH FLOWS FROM FINANCING ACTIVITIES:







 

 








 

 

Proceeds from issuance of shares and warrants, net


 $     28,821


$            -


$          71,769

 

 

Deferred issuance expenses


40


-


-

 

 

Proceeds from exercise of options and warrants, net


13


-


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


-


81,669

 

 








 

 

Increase (decrease) in cash and cash equivalents


26,032


(2,402)


32,463

 

 








 

 

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


$   2,463


$     2,593


$           32,463

 

 








 

 

Supplemental disclosure of cash flow information:







 

 








 

 

Cash paid during the period for:







 

 








 

 

Interest


     $            -


$            -


$               242

 

 








 

 

Taxes


   $         46


$         10


$               194

 

 








 

 

Supplemental disclosure of non-cash flow information:







 

 








 

 

Issuance expenses paid with shares


$           -


$            -


$               310

 

 








 

 

Issuance of Common stock upon conversion of a convertible debentures


$           -


$            -


$            8,430

 

 








 

 

Classification of liability in respect of warrants into equity due to the exercise of warrants


$           -


$            -


$            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

 

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 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 three month period ended March 31, 2013 of $3,679 and had a negative cash flow from operating activities of $2,800 during the three month period ended March 31, 2013. The accumulated deficit as of March 31, 2013 is $68,255. 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.

 

 

 

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.              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 $188 in the three months ended March 31, 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:

Restricted shares


Three months ended

March 31, 2013




Number of restricted shares as of  December 31, 2012


60,357

Vested


(35,000)




Granted


45,000




Number of restricted shares as of  March 31, 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. 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.   A summary of the Company's activity for options and warrants granted to employees and directors is as follows:



Three months ended

March 31, 2013



Number of

options and warrants


Weighted

average

exercise price


Weighted average remaining contractual terms (years)


Aggregate intrinsic value price



















Outstanding at January 1, 2013


2,656,587


$             6.04














Granted


185,000


$             5.82














Forfeited


(3,571)


$             7.21














Exercised


(3,500)


$             3.64














Outstanding at March 31, 2013 


2,834,516


$             6.03


                5.08


$       3,146  










Vested and expected to vest at March  31, 2013 


2,774,118


$             5.98


               5.04


$        3,124










Exercisable at March 31, 2013


1,626,558


$             4.50


                3.94


$         2,722

 

As of March 31, 2013, there was $3,351 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 2.0 years.

 

The aggregate intrinsic value represents the total intrinsic value (the difference between the Company's Common share fair value as of March 31, 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 March 31, 2013.

 

Calculation of aggregate intrinsic value is based on the share price of the Company's Common stock as of March 31, 2013 ($4.85 per share, as reported on the NYSE MKT).

 

 

B.      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 $462 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 13,000 shares for services received during the three month period ended March 31, 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.   A summary of the Company's activity for warrants and options granted to consultants is as follows:



Three months ended

March 31, 2013



Number of

options and warrants


Weighted

average

exercise price


Weighted average remaining contractual terms (years)


Aggregate intrinsic value price










Outstanding at January 1, 2013


521,904


$             7.29


 










Outstanding at March 31, 2013 


521,904


$             7.29


              4.57


$             73










Exercisable at March  31, 2013 


419,908


$              7.20


              3.54


$             73

 

As of March 31, 2013, there was $251 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 0.9 years.

 

Calculation of aggregate intrinsic value is based on the share price of the Company's Common stock as of March 31, 2013 ($4.85 per share, as reported on the NYSE MKT).

 

 

C.      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:

 



Three months ended

March 31,



2013


2012






Research and development expenses

$

$             24

     

$           26

General and administrative expenses


1,431


96








 $       1,455


$          122

 

 

D.      Summary of options and warrants:

 

A summary of all the options and warrants outstanding as of March 31, 2013 is presented in the following table:

 

 



As of March 31, 2013

 

Options / Warrants


Exercise

 Price per

 Share ($)



Options and

 Warrants

 Outstanding



Options and

 Warrants

 Exercisable



Weighted

 Average

 Remaining

 Contractual

Terms (in years)















Options:

















Granted to Employees and Directors



2.49




182,806




182,806




3.0





2.66




75,000




25,000




8.8





3.14




244,143




86,750




8.7





3.64




32,200




2,200




8.3





3.86




11,429




2,857




8.4





4.85




110,000




-




10





5.13




46,111




-




9.0





5.31




23,280




23,280




0.2





6.55




42,856




25,712




7.8





7.25




75,000




-




9.8





8.19




171,451




95,713




7.5





9.25




18,000




-




9.5





10.80




900,000




300,000




4.3





14.50




20,000




-




9.3









1,952,276




744,318























Granted to Consultants




















4.20




19,354




19,354




1.7





5.13




15,280




-




9.0





5.31




19,354




19,354




0.5





6.65




31,780




19,068




7.7





6.86




50,000




-




9.2





8.19




38,136




25,424




7.5





14.50




11,292




-




9.3









185,196




83,200























Total Options







2,137,472




827,518






 

 



As of March 31, 2013

Options / Warrants


Exercise

 Price per

 Share ($)



Options and

 Warrants

 Outstanding



Options and

 Warrants

 Exercisable



Weighted

 Average

 Remaining

 Contractual

Terms (in years)


 














 

Warrants:
















 

Granted to Employees and Directors



2.49




882,240




882,240




3.0

 

















 

Granted to Consultants



3.19




11,370




11,370




2.5

 




4.01




50,000




50,000




3.3

 




4.99




6,635




6,635




3.0

 




5.57




67,230




67,230




0.7

 




9.17




194,473




194,473




4.2

 




11.16




7,000




7,000




4.3

 








336,708




336,708





 

















 

Granted to Investors
















 




0.0002




35,922




35,922




3.0

 




2.49




22,950




22,950




3.0

 




4.54




412,500




412,500




2.5

 




4.99




57,291




57,291




3.0

 




6.00




2,763,730




2,763,730




3.0

 




6.78




3,220,000




3,220,000




4.9

 




8.34




1,458,550




1,458,550




4.2

 








7,970,943




7,970,943





 

















 

Total Warrants







9,189,891




9,189,891





 

















 

Total  Option and  Warrants







11,628,506




10,117,409





 

 

 

NOTE 4:-      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 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 March 31, 2013 and December 31, 2012 using the Binomial pricing model with the following assumptions:

 


March 31, 2013

December 31, 2012




Dividend yield

0%

0%

Expected volatility

77.5%

78.1%

Risk-free interest rate

0.3%

0.3%

Contractual life (in years)

2.5

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


(914)




Balance as of March 31, 2013 (unaudited)


1,017

 

 

NOTE 5:-      LOSS PER SHARE

 

Details in the computation of diluted loss per share:



Three months ended March 31,




2013


2012










Weighted average number of shares


Loss


Weighted average number of

shares


Loss




15,222,268


$     3,679


9,753,725


$   2,712


For the computation of basic loss
















Effect of potential dilutive common shares issuable upon exercise of warrants classified as liability


412,500


914 (**)


(*) -


(*) -












For the computation of diluted loss


15,634,768


$     4,593


9,753,725


$   2,712


 

(*)      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 9,264,499 and 6,287,832 for the three months ended March 31, 2013 and 2012, respectively.

 

 

NOTE 6:-      SUBSEQUENT EVENTS

 

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 expenses in the amount of $261 in March 2013.

 

 

- Ends -


This information is provided by RNS
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