Filed Pursuant to Rule 424(b)(5)
Registration No. 333-185338
PROSPECTUS SUPPLEMENT
(To Prospectus Dated December 19, 2012)
Up to $3,600,000
Ordinary Shares
We entered into a Controlled Equity Offering
SM sales agreement, dated February 18, 2015, with Cantor Fitzgerald & Co. relating to our ordinary shares offered
by this prospectus supplement and the accompanying prospectus. In accordance with the terms of the sales agreement, we may offer
and sell ordinary shares having an aggregate offering price of up to $3,600,000 from time to time on or after the date hereof,
pursuant to this prospectus supplement through Cantor Fitzgerald & Co., acting as agent.
Our ordinary shares are listed on The NASDAQ
Capital Market under the symbol “ROSG.” On July 7, 2015, the last reported sale price of our ordinary shares on The
NASDAQ Capital Market was $3.12 per share.
Sales of our ordinary shares, if any, under
this prospectus supplement and the accompanying prospectus may be made in sales deemed to be “at-the-market” equity
offerings as defined in Rule 415 promulgated under the Securities Act of 1933, as amended (Securities Act), including sales made
directly on or through The NASDAQ Capital Market, the existing trading market for our ordinary shares, sales made to or through
a market maker other than on an exchange or otherwise, in negotiated transactions at market prices prevailing at the time of sale
or at prices related to such prevailing market prices, and/or any other method permitted by law, including in privately negotiated
transactions. Cantor Fitzgerald & Co. will act as sales agent on a best efforts basis and use commercially reasonable efforts
to sell on our behalf all of the ordinary shares requested to be sold by us, consistent with its normal trading and sales practices,
on mutually agreed terms between Cantor Fitzgerald & Co. and us. There is no arrangement for funds to be received in any escrow,
trust or similar arrangement.
Cantor Fitzgerald & Co. will be entitled
to compensation at a fixed commission rate of up to 3.0% of the gross sales price per share sold. In connection with the sale of
our ordinary shares on our behalf, Cantor Fitzgerald & Co. will be deemed to be an “underwriter” within the meaning
of the Securities Act and the compensation of Cantor Fitzgerald & Co. will be deemed to be underwriting commissions or discounts.
As of July 7, 2015, the aggregate market
value of our outstanding ordinary shares held by non-affiliates was approximately $56,602,536, based on 14,503,684 ordinary shares
outstanding, of which 14,366,126 ordinary shares were held by non-affiliates, and a per share price of $3.94 based on the closing
sale price of our ordinary shares on May 20, 2015. We have sold securities with an aggregate market value of approximately $10,606,190,
pursuant to General Instruction I.B.5. of Form F-3 during the prior 12 calendar month period that ends on, and includes, the date
of this prospectus supplement.
Investing in our securities involves
a high degree of risk. Before making an investment decision, please read “Risk Factors” beginning on page S-6 of
this prospectus supplement, page 3 of the accompanying prospectus and in the documents incorporated by reference into this prospectus
supplement and the accompanying prospectus.
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement
or the accompanying prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus supplement is
July 8, 2015
TABLE OF CONTENTS
Prospectus Supplement
ABOUT THIS PROSPECTUS SUPPLEMENT
This prospectus supplement and the accompanying
prospectus are part of a “shelf” registration statement on Form F-3 (File No. 333-185338) that we filed with the Securities
and Exchange Commission (SEC) on December 7, 2012 and that was declared effective on December 19, 2012.
This document is in two parts. The first
part is this prospectus supplement, which describes the terms of this offering and also adds to and updates information contained
in the accompanying prospectus and the documents incorporated by reference into this prospectus supplement and the accompanying
prospectus. The second part is the accompanying prospectus, which gives more general information about the ordinary shares and
other securities we may offer from time to time under our shelf registration statement, some of which does not apply to the securities
offered by this prospectus supplement. To the extent there is a conflict between the information contained in this prospectus supplement,
on the one hand, and the information contained in the accompanying prospectus or any document incorporated by reference herein
or therein, on the other hand, you should rely on the information in this prospectus supplement.
You should read this prospectus supplement,
the accompanying prospectus, the documents incorporated by reference in this prospectus supplement and the accompanying prospectus
and any free writing prospectus that we have authorized for use in connection with this offering before making an investment decision.
You should also read and consider the information in the documents referred to in the sections of this prospectus supplement entitled
“Where You Can Find Additional Information” and “Incorporation of Certain Information by Reference.”
You should rely only on the information
contained or incorporated by reference in this prospectus supplement, the accompanying prospectus and any free writing prospectus
that we have authorized for use in connection with this offering. We have not authorized anyone to provide you with different information.
If anyone provides you with different or inconsistent information, you should not rely on it.
We are not making an offer to sell the securities
covered by this prospectus supplement in any jurisdiction where the offer or sale is not permitted.
The information appearing in this prospectus
supplement, the accompanying prospectus, the documents incorporated by reference in this prospectus supplement and the accompanying
prospectus and any free writing prospectus that we have authorized for use in connection with this offering is accurate only as
of its respective date, regardless of the time of delivery of the respective document or of any sale of securities covered by this
prospectus supplement. You should not assume that the information contained in or incorporated by reference in this prospectus
supplement or the accompanying prospectus, or in any free writing prospectus that we have authorized for use in connection with
this offering, is accurate as of any date other than the respective dates thereof.
In this prospectus supplement, “we,”
“us,” “our,” “the company,” “Rosetta” and “Rosetta Genomics” refer
to Rosetta Genomics Ltd. and its subsidiaries, unless the context otherwise requires.
We own or have the rights to use various
trademarks, trade names or service marks that are used in this prospectus, including miRview ®, miRview ®
mets, miRview ® squamous, miRview ® meso, miRview ® mets 2,
miRview ® lung, miRview ® bladder, miRview ® kidney, miRview ®
meso prognosis, Rosetta Cancer Origin Test TM, Rosetta Lung Cancer Test TM, Rosetta Kidney Cancer Test TM,
Rosetta Mesothelioma Test TM and Unknown is Unacceptable TM. All other trademarks, trade names or service
marks that are used in this prospectus are the property of their respective owners.
PROSPECTUS SUPPLEMENT
SUMMARY
This
summary highlights certain information about us, this offering and information appearing elsewhere in this prospectus supplement,
in the accompanying prospectus and in the documents we incorporate by reference. This summary is not complete and does not contain
all of the information that you should consider before investing in our securities. After you read this summary, to fully understand
our company and this offering and its consequences to you, you should read this entire prospectus supplement and the accompanying
prospectus carefully, including the information referred to under the heading “Risk Factors” in this prospectus supplement
beginning on page S-6, and the financial statements and related notes that we incorporate by reference into this prospectus
supplement and the accompanying prospectus, as well as the other documents that we incorporate by reference into this prospectus
supplement and the accompanying prospectus.
Rosetta Genomics
We are seeking to
develop and commercialize new diagnostic tests and therapeutics based on a group of genes known as microRNAs, as well as diagnostic
tests which complement our microRNA-based tests and therapeutics. MicroRNAs are naturally expressed, or produced, using instructions
encoded in DNA and are believed to play an important role in normal function and in various pathologies. We have established a
CLIA-certified, CAP-accredited laboratory in Philadelphia, which enables us to commercialize our own diagnostic tests applying
our microRNA technology. We have recently purchased CynoGen, Inc. (d/b/a/ PersonalizeDx), a company which has a CLIA-certified,
CAP-accredited laboratory in Lake Forest, California, focusing on early detection of genomic changes, through Fluorescence in situ
Hybridization (FISH) technology. This technology may detect cancer, measure the potential aggressiveness of the disease, and identify
patients most likely to respond to targeted therapies.
We
believe that we were the first commercial enterprise to focus on the emerging microRNA field, and that as a result, we have developed
an early and strong intellectual property position related to the development and commercialization of microRNA-based diagnostics.
Using our intellectual property, collaborative relationships with leading commercial enterprises and academic and medical institutions,
and expertise in the field of microRNAs, we have initiated microRNA-based diagnostic programs for various cancers. We are currently
marketing and selling the following four diagnostic tests based on our proprietary microRNA technologies:
| · | Rosetta Cancer
Origin Test ™ – This test is our second-generation microRNA-based diagnostic for the identification
of the primary site of metastatic cancer, specifically metastatic cancer of unknown primary (CUP). The Rosetta Cancer Origin Test
™ has replaced miRview® mets as our primary CUP assay. |
| · | Rosetta Lung Cancer
Test ™ – This test is a microRNA-based lung cancer classification test for cytology samples, mainly
fine-needle aspirate, or FNA, samples as well as pathology samples, such as small biopsies and resections. This test classifies
primary lung cancers into Neuroendocrine vs. non-small cell lung cancer, or NSCLC, and then further classifies NSCLC into squamous
vs. non-squamous and Neuroendocrine into small cell lung cancer, or SCLC, vs. carcinoid. The Rosetta Lung Cancer Test ™
has replaced miRview ® squamous as our primary lung diagnostic assay. |
| · | Rosetta Kidney
Cancer Test ™ – This test is a microRNA-based kidney tumor classification test for pathology samples.
This test was designed to classify primary kidney tumors into one of the four most common types: the malignant renal cell carcinomas
clear cell (conventional), papillary and chromophobe as well as the benign oncocytoma. |
| · | Rosetta Mesothelioma
Test ™ – This test leverages microRNA’s high-specificity as biomarkers to differentiate mesothelioma,
a cancer connected to asbestos exposure and other risk factors, from other carcinomas in the lung and pleura, a medically and legally
important differential diagnosis. |
In addition,
we are commercializing tests in the following fields, as well as others, out of our newly acquired facility in Lake Forest, California:
| · | Prelude DCIS (PDx):
This test is a proprietary prognostic test for breast cancer that assesses low risk or high risk for recurrence. |
| · | ACTN4 (AM):
This test includes a proprietary marker to assess prognosis in early stage lung cancer. |
| · | FGFR3 (AM):
This test leverages proprietary mutations to identify low grade bladder cancer. |
| · | ERG (AM): This
test includes a proprietary marker to assess prostate cancer prognosis. |
We
currently have distribution agreements with respect to some of these tests covering Australia, Canada, Greece, India, Israel, New
Zealand, Qatar, Romania, Saudi Arabia, Singapore, Turkey and the United Arab Emirates. All of these distribution agreements call
for samples to be sent to our CLIA-certified laboratory in Philadelphia for analysis.
In general, we are
generating demand for our testing services, through our direct selling effort in the United States and are successfully fulfilling
that demand in our lab in Philadelphia, Pennsylvania and Lake Forest, California. We are working with our Director of Reimbursement
and Managed Care to gain more consistent payment from commercial payors, as well as to secure reimbursement coverage from Medicare.
We are increasing our activity to establish policy-level reimbursement, which could improve our ability to receive prompt payment
from commercial payors. We announced that the designated Medicare Administrative Contractor, or MAC, for the Rosetta Cancer Origin
Test TM is covering this test for all Medicare beneficiaries, and are receiving approved payments for claims submitted.
To strengthen our sales and marketing departments, we hired Mr. Douglas Sites as our subsidiary’s Executive Vice President
Sales and Marketing to lead and direct the commercial team as new products are added to our portfolio. Mr. Sites brings extensive
experience in marketing to hematology/oncology, pathology and endocrinology, the primary focus of our current product line and
the anticipated launch of the thyroid test.
Rosetta has entered
into two separate agreements to sell and market products for Admera Health which offers products to oncology physicians that are
key call points for the Rosetta sales force. By entering into this agreement, Rosetta could gain additional opportunities to meet
with oncologists and urologists and discuss new products that may improve the patients’ diagnostic experience.
In addition, we have
a number of projects in our diagnostics and therapeutics pipelines. In our diagnostics pipeline, we are in the development stage
for one diagnostic assay and in the discovery stage for four different diagnostic assays.
| · | We are in the development
stage for a diagnostic assay for the differential diagnosis of thyroid nodules in indeterminate Fine Needle Aspirates (FNAs). We
have performed initial studies in thyroid resection samples as well as FNAs in cellblocks and stained smears, which demonstrated
that by using microRNA expression levels we can differentiate malignant nodules from benign nodules. We are currently commencing
larger studies. |
| · | We are in the discovery
stage for a blood- or urine-based diagnostic test for the minimally-invasive diagnosis of chronic kidney rejection (chronic allograft
nephropathy) in patients following kidney transplantation. We are now conducting a proof of concept study looking for miRNA biomarkers
differentiating patients with biopsy confirmed allograft nephropathy from patients with no rejection. |
| · | We are in the discovery
stage for a blood-based diagnostic test for early diagnosis and refined risk stratification of patients following Myocardial Infarction
(MI). We have performed a proof of concept (POC) study which demonstrated that by using microRNA expression levels in serum we
could identify heart failure (HF) patients. We also performed additional studies involving various blood fractions to assess the
feasibility to develop a minimally invasive microRNA-based stratification test for HF. |
| · | We are in the discovery
stage for a diagnostic assay for the risk stratification of non-muscle-invasive bladder cancer patients. We have performed two
foundational studies that demonstrate the role of miRNAs in risk stratification of bladder cancer patients. We plan to initiate
an additional study this year and expect to launch this new assay by the end of 2016. |
| · | We are in the discovery
stage for a diagnostic assay for the pre-surgical risk stratification of endometrial cancer patients. We plan to initiate proof
of concept studies in 2015. |
| · | We are in the early
discovery stage for a diagnostic assay for the early diagnosis of Alzheimer’s disease (AD). We have performed preliminary
studies comparing serum samples of AD patients to samples of healthy controls and identified several microRNAs differentially expressed
in AD serum were expressed in AD brain. Rosetta plans to conduct a proof-of-concept study in additional cohorts in order to profile
differentially expressed microRNAs in the cerebrospinal fluid of AD patients compared with normal donors using deep sequencing.
We plan to advance studies relating to this project in 2015. |
MicroRNAs also represent
potential targets for the development of novel drugs. We have three distinct therapeutic projects:
| · | We have completed
the discovery stage of a project aimed at developing a microRNA-based therapeutic for the treatment of human Cytomegalovirus (CMV)
infection. We performed a screening with a library of microRNA mimetics and microRNA inhibitors and are now studying the effects
of several candidates on the viral replication and infectivity. Those candidates were further examined in Gancyclovir resistant
viral strain as well as in human fresh isolate. |
| · | We are participating
in the Rimonim Consortium, which is supported by the Office of the Chief Scientist at the Ministry of Economy of the State of Israel,
or the OCS. The aim of this consortium is to develop novel technologies for the use of short interfering RNA, or siRNA, and microRNA
mimetics or anti-miRNAs for therapeutics. In this consortium we are attempting to: (1) develop novel RNA molecules that contain
chemical modifications or conjugations for therapeutic purposes; and (2) develop novel delivery systems for microRNAs that will
enable targeted delivery to desired cells. The consortium includes four companies and five academic groups. The transfer of know-how
developed in the framework of the consortium or rights to manufacture based on and/or incorporating such know-how to third parties
which are not members of the consortium requires the consent of the OCS. |
| · | We are working in
collaboration with Prof. Ronit Satchi-Fainaro (Department of Physiology and Pharmacology, Sackler School of Medicine, Tel Aviv
University) on a “Magneton” project, which is supported by the OCS. This project aims at developing a nano-carrier
delivery system for micoRNA mimetics for the treatment of cancer, the transfer of knowledge discovered in this project is subject
to limitations specified in the Israeli R&D law. |
Our
Strategy
Rosetta’s goal
is to become a leader in the development and commercialization of microRNA-based diagnostic tests. Our key business strategies
to achieve this goal are as follows:
| · | Leverage our knowledge
and experience. We plan to leverage our extensive microRNA knowledge and experience to potentially develop additional tissue
based as well as body fluid-based diagnostic tests. |
| · | Maximize sales
of our current commercial tests through geographic partners and our own commercial efforts. We plan to maximize revenues from
our four current commercial tests via corporate relationships and through our own targeted commercial efforts. To date we have
entered into distribution agreements with five distributors, pursuant to which these distributors have the right to commercialize
these tests in their territories. Furthermore, during 2014 we expanded our sales force from ten to 12 territory managers at the
end of 2014. |
| · | Build and maintain
a strong intellectual property position. We believe that we were the first commercial enterprise to focus on the emerging field
of microRNAs. We also believe we have an early and strong intellectual property position (both patents we own and those we have
exclusively, co-exclusively, or non-exclusively licensed) in the area of developing and commercializing microRNA-based diagnostic
tests. Our patent strategy is to seek broad coverage on all of our identified microRNA sequences. We have also filed, and intend
to continue to file, patent applications that claim our technical platforms and method-of-use for specific diagnostic and therapeutic
applications. |
| · | Leverage our intellectual
property position and microRNA expertise to continue to establish strategic collaborations. We intend to continue to establish
strategic collaborations with leading clinical diagnostic and pharmaceutical companies to further develop and commercialize microRNA-based
diagnostics. We believe that our strong intellectual property position and expertise in the field of microRNAs will be very attractive
to additional collaboration partners. |
| · | Selectively pursue
opportunities to expand our business and enhance our product offerings. We plan to selectively pursue opportunities
to acquire, license, or invest in complementary businesses, products, technologies and assets teams that will allow us to expand
our portfolio of diagnostic tests and therapeutics, accelerate the pace of our innovation, and expand into additional markets beyond
what we can achieve organically. |
Recent Development
On April 13, 2015, we acquired CynoGen,
Inc. (d/b/a PersonalizeDx) from Prelude Corporation, a Fjord Ventures portfolio company. The purchase price included $2.0 million
in cash, 500,000 of our ordinary shares and the provision of certain assets and services to Prelude Corporation. PersonalizeDx
is a molecular diagnostics and services company serving community-based pathologists, urologists, oncologists and other reference
laboratories across the United States. PersonalizeDx is focused on the detection of genomic changes through FISH technology, which
helps to detect cancer, measure the potential aggressiveness of the disease and identify patients most likely to respond to targeted
therapies.
Corporate
Information
We were incorporated under the laws of
the State of Israel on March 9, 2000 as Rosetta Genomics Ltd., an Israeli company. The principal legislation under which we operate
is the Israeli Companies Law, 5759-1999, as amended, or the Companies Law. Our principal executive office is located at 10 Plaut
Street, Science Park, Rehovot 76706 Israel, and our telephone number is +972-73-222-0700. Our wholly owned subsidiary, Rosetta
Genomics Inc., which was incorporated in Delaware on April 21, 2005, is located at 3711 Market Street, Suite 740, Philadelphia,
Pennsylvania 19104, and 3 Independence Way, Princeton, New Jersey 08540, and its telephone number is (215) 382-9000 and 609-419-4000.
Rosetta Genomics Inc. serves as our agent for service of process in the United States. Our web site address is www.rosettagenomics.com.
The information on our web site is not incorporated by reference into this prospectus supplement or the accompanying prospectus
and should not be considered to be a part of this prospectus supplement or the accompanying prospectus.
On July 6, 2011, our shareholders approved
a 1-for-4 reverse split of our ordinary shares, which we refer to herein as the July 2011 reverse split. The July 2011 reverse
split was effective upon shareholder approval. On May 14, 2012, our shareholders approved a 1-for-15 reverse split of our ordinary
shares, which we refer to herein as the May 2012 reverse split. The May 2012 reverse split was effective upon shareholder approval.
Unless otherwise noted, the information set forth in this prospectus reflects the July 2011 reverse split and the May 2012 reverse
split. Information incorporated by reference in this prospectus supplement and the accompanying prospectus from documents filed
with the SEC prior to the effective dates of these reverse splits will not reflect the reverse splits.
THE OFFERING
| Ordinary shares offered by us |
|
Ordinary shares having an aggregate offering price of up to $3,600,000. |
| |
|
|
| Ordinary shares to be outstanding |
|
|
| after this offering |
|
Up to 15,657,530 shares, assuming the sale of 1,153,846 ordinary shares in this offering at an offering price of $3.12 per share, which was the last reported sale price of our ordinary shares on The NASDAQ Capital Market on July 7, 2015. The actual number of shares issued will vary depending on the actual sales prices under this offering. |
| |
|
|
| Manner of offering |
|
“At-the-market” offering that may be made from time to time through our sales agent, Cantor Fitzgerald & Co. and/or any other method permitted by law, including in privately negotiated transactions. See “Plan of Distribution” on page S-13. |
| |
|
|
| Use of Proceeds |
|
We intend to use the net proceeds of this offering for our operations and for other general corporate purposes, including, but not limited to, repayment or refinancing of indebtedness or other corporate borrowings, working capital, intellectual property protection and enforcement, capital expenditures, investments, acquisitions or collaborations, research and development and product development. See “Use of Proceeds” on page S-9. |
| |
|
|
| Risk Factors |
|
Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page S-6 for a discussion of factors you should consider carefully when making an investment decision. |
| |
|
|
| NASDAQ Capital Market symbol |
|
ROSG |
The number of ordinary shares to be outstanding
immediately after this offering as shown above is based on 14,503,684 ordinary shares outstanding as of July 7, 2015, but does
not include the following:
| |
· |
1,139,759 ordinary shares issuable upon exercise of stock options outstanding under our stock plans, at a weighted average exercise price of $5.46 per share; |
| |
· |
58,718 ordinary shares issuable upon the vesting of outstanding restricted stock units; |
| |
· |
452,209 ordinary shares available for future grant or issuance pursuant to our stock plans; and |
| |
· |
335,543 ordinary shares issuable upon exercise of outstanding warrants, at a weighted average exercise price of $22.97 per share. |
RISK FACTORS
Investment in our ordinary shares involves
risks. Before deciding whether to invest in our ordinary shares, you should consider carefully the risk factors discussed below
and those contained in “Part I. Item 3. Key Information – D. Risk Factors” of our Annual Report on Form 20-F
for the fiscal year ended December 31, 2014, as filed with the SEC on March 16, 2015, which is incorporated herein by reference
in its entirety, as well as any amendment or update to our risk factors reflected in subsequent filings with the SEC. If any of
the risks or uncertainties described in our SEC filings actually occurs, our business, financial condition, results of operations
or cash flow could be materially and adversely affected. This could cause the trading price of our ordinary shares to decline,
resulting in a loss of all or part of your investment. The risks and uncertainties we have described are not the only ones facing
our company. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect
our business operations.
Risk Related to Our Business, Our Financial
Results and Need for Financing
We will require substantial additional
funds to continue our operations and, if additional funds are not available, we may need to significantly scale back or cease our
operations.
We have used substantial funds to discover, develop,
commercialize and protect our microRNA tests and technologies and will require substantial additional funds to continue our
operations. As of December 31, 2014, we had cash, cash equivalents and short-term bank deposits of $15.6 million, compared to
$24.4 million as of December 31, 2013. Subsequent to the balance sheet date, we entered into the Controlled Equity
OfferingSM Sales Agreement with Cantor Fitzgerald & Co., as sales agent. In addition, following our
acquisition of CynoGen, we expect to incur increased costs that may adversely affect our current results of operations and
liquidity in 2016 and beyond. We may seek additional funding through collaborative arrangements and public or private equity
offerings and debt financings, and we may elect to raise additional funds even before we need them if the conditions for
raising capital are favorable. Additional funds may not be available to us when needed on acceptable terms, or at all. In
addition, the terms of any financing may adversely affect the holdings or the rights of our existing shareholders. For
example, if we raise additional funds by issuing equity securities, further dilution to our then-existing shareholders may
result. Debt financing, if available, may involve restrictive covenants that could limit our flexibility in conducting future
business activities. If we are unable to obtain funding on a timely basis, we may be required to significantly curtail one or
more of our research or development programs. We also could be required to seek funds through arrangements with collaborators
or others that may require us to relinquish rights to some of our technologies, tests or products in development or approved
tests or products that we would otherwise pursue on our own. Our failure to raise capital when needed will materially harm
our business, financial condition and results of operations.
Risks Related to the Combined Company Following the PersonalizeDx
Acquisition
Successful integration of PersonalizeDx with us and successful
operation of the combined company are not assured. Also, integrating our business with that of PersonalizeDx may divert the attention
of management away from operations.
There can be no assurance that we will be
able to maintain and grow the acquired business and operations of PersonalizeDx. In addition, the market segments in which PersonalizeDx
operates may experience declines in demand and/or new competitors. Integrating and coordinating certain aspects of the operations,
portfolio of products and personnel of PersonalizeDx with ours have involved will continue to involve complex operational, technological
and personnel-related challenges. This process will be time-consuming and expensive, may disrupt the businesses of either or both
of the companies and may not result in the full benefits expected by us and PersonalizeDx, including cost synergies expected to
arise from supply chain efficiencies and overlapping general and administrative functions. The potential difficulties, and resulting
costs and delays, include:
| · | managing a larger combined company; |
| · | consolidating corporate and administrative infrastructures; |
| · | issues in integrating research and development, commercial and sales
forces; |
| · | difficulties attracting and retaining key personnel; |
| · | loss of customers and suppliers and inability to attract new customers
and suppliers; |
| · | unanticipated issues in integrating information technology, communications
and other systems; |
| · | incompatibility of purchasing, logistics, marketing, administration
and other systems and processes; |
| · | unforeseen and unexpected liabilities related to the acquisition or
PersonalizeDx’s business; and |
| · | potential costs of relocating employees to PersonalizeDx’s facilities
or our other facilities. |
Additionally, the integration of our and
PersonalizeDx’s operations, products and personnel may place a significant burden on management and other internal resources.
The diversion of management’s attention, and any difficulties encountered in the transition and integration process, could
harm the combined company’s business, financial condition and operating results.
The combined company may not be able to adequately protect
or enforce its intellectual property rights, which could harm its competitive position.
The combined company’s success and
future revenue growth will depend, in part, on its ability to protect its intellectual property. The combined company will primarily
rely on patent, copyright, trademark and trade secret laws, as well as nondisclosure agreements and other methods, to protect its
proprietary technologies and processes. It is possible that competitors or other unauthorized third parties may obtain, copy, use
or disclose proprietary technologies and processes, despite efforts by the combined company to protect its proprietary technologies
and processes. While the combined company will hold and have access to significant number of patents, there can be no assurances
that any additional patents will be issued. Even if new patents are issued, the claims allowed may not be sufficiently broad to
protect the combined company’s technology. In addition, any of our or PersonalizeDx’s existing patents, and any future
patents issued to the combined company, may be challenged, invalidated or circumvented. As such, any rights granted under these
patents may not provide the combined company with meaningful protection. We and PersonalizeDx may not have, and in the future the
combined company may not have, foreign patents or pending applications corresponding to its U.S. patents and applications. Even
if foreign patents are granted, effective enforcement in foreign countries may not be available. If the combined company’s
patents do not adequately protect its technology, competitors may be able to offer products similar to the combined company’s
products. The combined company’s competitors may also be able to develop similar technology independently or design around
its patents.
In addition, as a result of the acquisition of PersonalizeDx,
after twelve months from the date of the acquisition, we will be required to renegotiate the terms of certain agreements under
which PersonalizeDx had in-licensed proprietary markers from Abbott Molecular, Inc. We cannot be sure that we will be able to renegotiate
these license agreements on acceptable terms or at all. If we are unable to do so, we may lose the ability to commercialize the
products that rely on these licenses.
Risks Related to This Offering
Our management will have broad discretion over the use
of any net proceeds from this offering, you may not agree with how we use the proceeds, and the proceeds may not be invested successfully.
Our management will have broad discretion
as to the use of any net proceeds from this offering and could use them for purposes other than those contemplated at the time
of this offering. Accordingly, you will be relying on the judgment of our management with regard to the use of any proceeds from
the sale of ordinary shares in this offering, and you will not have the opportunity, as part of your investment decision, to assess
whether the proceeds are being used appropriately. It is possible that the proceeds will be invested in a way that does not yield
a favorable, or any, return for Rosetta.
You may experience immediate and substantial dilution
in the book value per ordinary share you purchase in the offering.
The offering price per share in this offering
may exceed the net tangible book value per share of our outstanding ordinary shares prior to this offering. Assuming that an aggregate
of 1,153,846 ordinary shares are sold at a price of $3.12 per share, the last reported sale price of our ordinary shares on The
NASDAQ Capital Market on July 7, 2015, for aggregate gross proceeds of approximately $3.6 million, and after deducting commissions
and estimated aggregate offering expenses payable by us, you will experience immediate dilution of $1.23 per share, after giving
effect to this offering at the assumed size and offering price. The exercise of outstanding stock options or warrants may result
in further dilution of your investment. See the section below entitled “Dilution” for a more detailed illustration
of the dilution you would incur if you participate in this offering.
Our shareholders may experience significant dilution as
a result of future equity offerings or issuances and exercise of outstanding options and warrants.
In order to raise additional capital or
pursue strategic transactions, we may in the future offer, issue or sell additional ordinary shares or other securities convertible
into or exchangeable for our ordinary shares. We cannot assure you that we will be able to sell shares or other securities in any
other transaction at a price per share or that have an exercise price or conversion price per shares that is equal to or greater
than the price for the securities purchased by investors in this offering, and investors purchasing shares or other securities
in the future could have rights superior to existing shareholders. The price per share at which we sell or issue additional ordinary
shares or other securities convertible into or exchangeable for our ordinary shares future transactions may be higher or lower
than such price.
Sales of a significant number of ordinary shares in the
public markets, or the perception that such sales could occur, could depress the market price of our ordinary shares.
Sales of a substantial number of ordinary
shares in the public markets could depress the market price of our ordinary shares and impair our ability to raise capital through
the sale of additional equity securities. We cannot predict the effect that future sales of our ordinary shares would have on the
market price of our ordinary shares.
We do not intend to pay any cash dividends in the foreseeable
future and, therefore, any return on your investment in our ordinary shares must come from increases in the fair market value and
trading price of our ordinary shares.
We do not intend to pay any cash dividends
in the foreseeable future and, therefore, any return on your investment in our ordinary shares must come from increases in the
fair market value and trading price of our ordinary shares.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
This prospectus supplement and the accompanying
prospectus and the documents we have filed with the SEC that are incorporated by reference into this prospectus supplement and
the accompanying prospectus contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933,
as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking
statements reflect our current view about future plans, intentions or expectations. These forward-looking statements may be included
herein or incorporated by reference in this prospectus and include, in particular, statements about our plans, strategies and prospects
and may be identified by terminology such as “may,” “goal,” “strategy,” “target,”
“likely,” “could,” “seek,” “will,” “should,” “expect,”
“plan,” “intend,” “anticipate,” “believe,” “estimate,” “aim,”
“potential,” or “continue” or the negative of those terms or other comparable terminology. These forward-looking
statements are subject to risks, uncertainties and assumptions about us. Although we believe that our plans, intentions and expectations
are reasonable, we may not achieve our plans, intentions or expectations.
Important factors that could cause actual
results to differ materially from the forward-looking statements we make in this prospectus supplement and accompanying prospectus
are set forth in this prospectus under the caption “Risk Factors”, and in the reports we have filed or will file with
the SEC and which are incorporated by reference herein, including statements under the caption “Risk Factors” and “Forward-Looking
Statements” in such reports. All forward-looking statements attributable to us or persons acting on our behalf are expressly
qualified in their entirety by the cautionary statements in this prospectus under the caption “Risk Factors”, and in
the reports we have filed or will file with the SEC and which are incorporated by reference herein, including statements under
the caption “Risk Factors” and “Forward-Looking Statements” in such reports, in which we have disclosed
the material risks related to our business. These forward-looking statements involve risks and uncertainties, and the cautionary
statements identify important factors that could cause actual results to differ materially from those predicted in any forward-looking
statements. We undertake no obligation to update any of the forward-looking statements after the date of this prospectus supplement
to conform those statements to reflect the occurrence of unanticipated events, except as required by applicable law. You should
read this prospectus supplement and the accompanying prospectus and the documents incorporated by reference completely and with
the understanding that our actual future results, levels of activity, performance and achievements may be materially different
from what we expect. We qualify all of our forward-looking statements by these cautionary statements.
CAPITALIZATION
AND INDEBTEDNESS
The table below sets forth our capitalization
and indebtedness as of December 31, 2014:
| |
· |
on a pro forma basis to reflect (i) the sale of 2,204,764 ordinary shares at a weighted average price of $4.46 per share between January 1, 2015 and July 7, 2015 pursuant to the Controlled Equity Sales agreement with Cantor Fitzgerald & Co. and the prospectus supplement dated February 18, 2015, and (ii) the issuance of 500,000 ordinary shares to Prelude Corporation on April 13, 2015, as partial consideration for our acquisition of CynoGen, Inc.; and |
| |
· |
on a pro forma as adjusted basis to further reflect the sale of an aggregate of 1,153,846 ordinary shares at an assumed price of $3.12 per share, the last reported sale price of our ordinary shares on The NASDAQ Capital Market on July 7, 2015, for aggregate gross proceeds of approximately $3.6 million, after deducting commissions and estimated aggregate offering expenses payable by us. |
| | |
As of December 31, 2014 | |
| | |
Actual | | |
Pro Forma | | |
Pro Forma As Adjusted | |
| | |
(in thousands, except share and per share data) | |
| | |
| | |
| | |
| |
| Debt: | |
| | | |
| | | |
| | |
| Warrants related to share purchase agreement | |
$ | 2 | | |
$ | 2 | | |
$ | 2 | |
| Total Debt | |
$ | 2 | | |
$ | 2 | | |
$ | 2 | |
| | |
| | | |
| | | |
| | |
| Shareholders’ equity: | |
| | | |
| | | |
| | |
| Ordinary shares of NIS 0.6 par value: 40,000,000 shares authorized; 11,765,678 shares issued; 11,762,420 shares outstanding, actual; 14,470,442 shares issued; 14,467,184 shares outstanding, pro forma; and 15,624,288 shares issued; 15,621,030 shares outstanding, pro forma as adjusted | |
$ | 1,830 | | |
$ | 2,249 | | |
$ | 2,432 | |
| Additional paid-in capital | |
$ | 136,160 | | |
$ | 146,638 | | |
$ | 149,947 | |
| Accumulated deficit | |
$ | (122,925 | ) | |
$ | (122,925 | ) | |
$ | (122,925 | ) |
| Total shareholders’ equity | |
$ | 15,065 | | |
$ | 25,962 | | |
$ | 29,454 | |
USE OF PROCEEDS
We cannot assure you that we will receive
any proceeds in connection with the ordinary shares offered pursuant to this prospectus supplement and the accompanying prospectus.
We intend to use any net proceeds from the sale of ordinary shares under this prospectus supplement and the accompanying prospectus
for our operations and for other general corporate purposes, including, but not limited to, repayment or refinancing of future
indebtedness or other future corporate borrowings, working capital, intellectual property protection and enforcement, capital expenditures,
investments, acquisitions or collaborations, research and development and product development. We have not determined the amount
of net proceeds, if any, to be used specifically for the foregoing purposes. As a result, our management will have broad discretion
in the allocation of any net proceeds. Pending use of any net proceeds, we would expect to invest any proceeds in a variety of
capital preservation instruments, including short-term, investment-grade, interest-bearing instruments.
DIVIDEND POLICY
We have never declared or paid cash dividends
on our ordinary shares. We currently intend to retain our future earnings, if any, for use in our business and therefore do not
anticipate paying cash dividends in the foreseeable future. Payment of future dividends, if any, will be at the discretion of our
board of directors after taking into account various factors, including our financial condition, operating results, current and
anticipated cash needs and plans for expansion.
DILUTION
Net tangible book value per share is
equal to our total tangible assets minus total liabilities, all divided by the number of ordinary shares outstanding. If you
invest in our ordinary shares in this offering, you will experience dilution to the extent of the difference between the
price per share you pay in this offering and the net tangible book value per ordinary share immediately after this offering.
Our pro forma net tangible book value as of December 31, 2014, after giving effect to (i) the sale of 2,704,764 ordinary
shares at a weighted average price of $4.21 per share between January 1, 2015, and the date of this prospectus supplement,
pursuant to the Controlled Equity Sales agreement with Cantor Fitzgerald & Co. and the prospectus supplement dated
February 18, 2015, and (ii) the issuance of 500,000 ordinary shares to Prelude Corporation on April 13, 2015, as partial
consideration for our acquisition of CynoGen, Inc., was approximately $26.0 million, or $1.79 per ordinary share.
After giving effect to the sale of our ordinary
shares in the aggregate amount of $3.6 million in this offering at an assumed offering price of $3.12 per share, the last reported
sale price of our ordinary shares on The NASDAQ Capital Market on July 7, 2015, and after deducting estimated offering commissions
and expenses payable by us, our pro forma as adjusted net tangible book value would have been approximately $29.4 million, or approximately
$1.89 per ordinary share, as of December 31, 2014. This represents an immediate increase in pro forma net tangible book value of
approximately $0.10 per share to existing stockholders and an immediate dilution of approximately $1.23 per share to investors
in this offering. The following table illustrates this calculation on a per share basis.
| Assumed public offering price per share | |
| | | |
$3.12 |
| Pro forma net tangible book value per share as of December 31, 2014 | |
$ | 1.79 | |
| Increase in pro forma net tangible book value per share attributable to this offering | |
$ | 0.10 | |
| Pro Forma as adjusted net tangible book value per share after this offering | |
| | | |
$1.89 |
| Dilution per share to new investors purchasing shares in this offering | |
| | | |
$1.23 |
The table above assumes for illustrative
purposes that an aggregate of 1,153,846 ordinary shares are sold at a price of $3.12 per ordinary share, the last reported sale
price of our ordinary shares on The NASDAQ Capital Market on July 7, 2015, for aggregate gross proceeds of $3.6 million. The shares
sold in this offering, if any, will be sold from time to time at various prices. An increase of $0.50 per share in the price at
which the shares are sold from the assumed offering price of $3.12 per share shown in the table above, assuming all of our ordinary
shares in the aggregate amount of $3.6 million are sold at that price, would increase our pro forma as adjusted net tangible book
value per share after the offering to $1.90 per share and would decrease the dilution per share to new investors in this offering
to $1.22 per share, after deducting commissions and estimated aggregate offering expenses payable by us. A decrease of $0.50 per
share in the price at which the shares are sold from the assumed offering price of $3.12 per share shown in the table above, assuming
all of our ordinary shares in the aggregate amount of $3.6 million are sold at that price, would decrease our pro forma as adjusted
net tangible book value per share after the offering to $1.86 per share and would increase the dilution per share to new investors
in this offering to $1.26 per share, after deducting commissions and estimated aggregate offering expenses payable by us. This
information is supplied for illustrative purposes only.
The information above is based on 11,762,420
ordinary shares outstanding as of December 31, 2014, and does not include the following as of December 31, 2014:
| |
· |
1,139,759 ordinary shares issuable upon exercise of stock options outstanding under our stock plans, at a weighted average exercise price of $5.46 per share; |
| |
· |
82,500 ordinary shares issuable upon the vesting of outstanding restricted stock units; |
| |
· |
428,427 ordinary shares available for future grant or issuance pursuant to our stock plans; and |
| |
· |
335,543 ordinary shares issuable upon exercise of outstanding warrants, at a weighted average exercise price of $22.97 per share. |
To the extent that outstanding options or warrants are exercised,
there may be further dilution to new investors.
MARKET FOR OUR ORDINARY SHARES
Our ordinary shares
began trading on The NASDAQ Global Market on February 27, 2007 under the symbol “ROSG.” On June 30, 2010, we transferred
the listing of our ordinary shares from The NASDAQ Global Market to The NASDAQ Capital Market. Prior to February 27, 2007, there
was no established public trading market for our ordinary shares. The high and low sales prices per share of our ordinary shares
for the periods indicated are set forth below. This information reflects the 1-for-4 July 2011 reverse split and the
1-for 15 May 2012 reverse split.
| Year Ended | |
High | | |
Low | |
| December 31, 2010 | |
$ | 208.79 | | |
$ | 54.00 | |
| December 31, 2011 | |
$ | 61.80 | | |
$ | 1.95 | |
| December 31, 2012 | |
$ | 23.43 | | |
$ | 1.40 | |
| December 31, 2013 | |
$ | 5.98 | | |
$ | 2.35 | |
| December 31, 2014 | |
$ | 6.69 | | |
$ | 2.07 | |
| | |
| | | |
| | |
| Quarter Ended | |
| | | |
| | |
| March 31, 2013 | |
$ | 5.98 | | |
$ | 4.21 | |
| June 30, 2013 | |
$ | 4.70 | | |
$ | 3.09 | |
| September 30, 2013 | |
$ | 3.90 | | |
$ | 3.00 | |
| December 31, 2013 | |
$ | 3.59 | | |
$ | 2.35 | |
| March 31, 2014 | |
$ | 6.69 | | |
$ | 2.87 | |
| June 30, 2014 | |
$ | 5.40 | | |
$ | 3.43 | |
| September 30, 2014 | |
$ | 4.37 | | |
$ | 3.25 | |
| December 31, 2014 | |
$ | 3.53 | | |
$ | 2.07 | |
| March 31, 2015 | |
$ | 4.80 | | |
$ | 2.32 | |
| June 30, 2015 | |
$ | 4.18 | | |
$ | 2.91 | |
| | |
| | | |
| | |
| Month Ended | |
| | | |
| | |
| January 31, 2015 | |
$ | 3.49 | | |
$ | 2.32 | |
| February 28, 2015 | |
$ | 4.80 | | |
$ | 2.92 | |
| March 31, 2015 | |
$ | 3.47 | | |
$ | 2.82 | |
| April 30, 2015 | |
$ | 4.18 | | |
$ | 2.91 | |
| May 31, 2015 | |
$ | 3.94 | | |
$ | 3.44 | |
| June 30, 2015 | |
$ | 3.77 | | |
$ | 3.24 | |
PLAN OF DISTRIBUTION
On February 18, 2015, we entered into a
Controlled Equity Offering SM sales agreement with Cantor Fitzgerald & Co., or Cantor, under which we may issue
and sell our ordinary shares having an aggregate gross sales price as set forth from time to time on or after the date hereof in
one or more prospectus supplements through Cantor, acting as agent. Pursuant to this prospectus supplement, we may issue and sell
our ordinary shares having an aggregate gross sales price of up to $3,600,000 from time to time on or after the date hereof through
Cantor, acting as agent. The sales agreement was filed as an exhibit to a report on Form 6-K/A filed under the Exchange Act on
February 18, 2015, and incorporated by reference in this prospectus supplement.
Cantor may sell our ordinary shares by any
method permitted by law deemed to be an “at-the-market” offering as defined in Rule 415 promulgated under the Securities
Act, including sales made directly on The NASDAQ Capital Market, on any other existing trading market for our ordinary shares or
to or through a market maker. Cantor may also sell our ordinary shares by any other method permitted by law, including in privately
negotiated transactions. We may instruct Cantor not to sell ordinary shares if the sales cannot be effected at or above the price
designated by us from time to time. We or Cantor may suspend the offering of ordinary shares upon notice and subject to other conditions.
We will pay Cantor commissions, in cash,
for its services in acting as agent in the sale of our ordinary shares. Cantor will be entitled to compensation at a fixed commission
rate of up to 3.0% of the gross sales price per share sold. Because there is no minimum offering amount required as a condition
to close this offering, the actual total public offering amount, commissions and proceeds to us, if any, are not determinable at
this time. We estimate that the total expenses for the offering, excluding compensation and reimbursements payable to Cantor under
the terms of the sales agreement, will be approximately $40,000.
Settlement for sales of ordinary shares
will occur on the third business day following the date on which any sales are made, or on some other date that is agreed upon
by us and Cantor in connection with a particular transaction, in return for payment of the net proceeds to us. Sales of our ordinary
shares as contemplated in this prospectus supplement will be settled through the facilities of The Depository Trust Company or
by such other means as we and Cantor may agree upon. There is no arrangement for funds to be received in an escrow, trust or similar
arrangement.
Cantor will use its commercially reasonable
efforts, consistent with its sales and trading practices, to solicit offers to purchase the ordinary shares under the terms and
subject to the conditions set forth in the sales agreement. In connection with the sale of the ordinary shares on our behalf, Cantor
will be deemed to be an “underwriter” within the meaning of the Securities Act and the compensation of Cantor will
be deemed to be underwriting commissions or discounts. We have agreed to provide indemnification and contribution to Cantor against
certain civil liabilities, including liabilities under the Securities Act.
The offering of our ordinary shares pursuant
to the sales agreement will terminate upon the earlier of (1) the sale of all ordinary shares subject to the sales agreement, or
(2) termination of the sales agreement as permitted therein. We and Cantor may each terminate the sales agreement at any time upon
ten days prior notice.
Cantor and its affiliates may in the future
provide various investment banking, commercial banking and other financial services for us and our affiliates, for which services
they may in the future receive customary fees. To the extent required by Regulation M, Cantor will not engage in any market making
activities involving our ordinary shares while the offering is ongoing under this prospectus supplement.
This prospectus supplement and the accompanying
prospectus in electronic format may be made available on a website maintained by Cantor and Cantor may distribute this prospectus
supplement and the accompanying prospectus electronically.
EXPENSES
We estimate that the total expenses of this
offering payable by us, excluding the fees of Cantor and Cantor’s reimbursable expenses, will be approximately $40,000 as
follows:
| Transfer agent fees and expenses | |
$ | 3,000 | |
| Printer fees and expenses | |
| 5,000 | |
| Legal fees and expenses | |
| 20,000 | |
| Accounting fees and expenses | |
| 8,000 | |
| Miscellaneous | |
| 4,000 | |
| Total | |
$ | 40,000 | |
LEGAL MATTERS
Certain legal matters
in connection with the securities offered hereby will be passed upon for us by Amar Reiter Jeanne Shochatovitch, Ramat Gan, Israel.
Cantor is being represented in connection with this offering by Reed Smith LLP, New York, New York.
EXPERTS
The consolidated financial
statements of Rosetta Genomics Ltd. appearing in Rosetta Genomics Ltd. Report on Form 20-F as filed with the SEC on March 16, 2015,
have been audited by Kost Forer Gabbay and Kasierer (a Member of Ernst & Young Global), independent registered public accounting
firm, as set forth in their report thereon, and incorporated herein by reference. Such consolidated financial statements are incorporated
herein by reference in reliance upon such report given on the authority of such firm as experts in accounting and auditing. The
address of Kost Forer Gabbay and Kasierer is 3 Aminadav St., Tel-Aviv, Israel 67067.
INCORPORATION OF
CERTAIN INFORMATION BY REFERENCE
The SEC allows us to “incorporate
by reference” the information we file with it, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is considered to be part of this prospectus and information we
file later with the SEC will automatically update and supersede this information. The documents we are incorporating by reference
as of their respective dates of filing are:
| |
· |
Annual Report on Form 20-F for the year ended December 31, 2014, filed on March 16, 2015 (File No. 001-33042); |
| |
· |
Reports on Form 6-K filed
on January 12, 2015, February 18, 2015, as amended on February 18, 2015, April 14, 2015, and July 8, 2015 (File Nos.
001-33042); and |
| |
· |
the description of our ordinary shares contained in our Form 8-A filed on September 22, 2006 (File No. 001-33042). |
All subsequent annual reports on Form 20-F
filed by us and all subsequent reports on Form 6-K filed by us that are identified by us as being incorporated by reference shall
be deemed to be incorporated by reference into this prospectus supplement and deemed to be a part hereof after the date of this
prospectus supplement but before the termination of the offering by this prospectus supplement.
Any statement contained in a document incorporated
by reference herein shall be deemed to be modified or superseded for all purposes to the extent that a statement contained in this
prospectus supplement, or in any other subsequently filed document which is also incorporated or deemed to be incorporated by reference,
modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this prospectus supplement.
Each person, including any beneficial owner
to whom this prospectus supplement is delivered, may request, orally or in writing, a copy of these documents, which will be provided
at no cost, by contacting:
Oded Biran Adv.
Chief Legal Officer
Rosetta Genomics Ltd.
3 Independence Way STE 209
Princeton 08540
New Jersey, U.S.A.
Phone: (609) 419-9000
WHERE YOU CAN FIND ADDITIONAL INFORMATION
This prospectus supplement and the accompanying
prospectus are part of a registration statement on Form F-3 that we filed with the SEC relating to the securities offered by this
prospectus supplement and accompanying prospectus, which includes additional information. You should refer to the registration
statement and its exhibits for additional information. Whenever we make reference in this prospectus supplement and accompanying
prospectus to any of our contracts, agreements or other documents, the references are not necessarily complete and you should refer
to the exhibits attached to the registration statement for copies of the actual contract, agreements or other document.
We are subject to the informational requirements
of the Exchange Act applicable to foreign private issuers. We, as a “foreign private issuer,” are exempt from the rules
under the Exchange Act prescribing certain disclosure and procedural requirements for proxy solicitations, and our officers, directors
and principal shareholders are exempt from the reporting and “short-swing” profit recovery provisions contained in
Section 16 of the Exchange Act, with respect to their purchases and sales of shares. In addition, we are not required to file annual,
quarterly and current reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities
are registered under the Exchange Act. However, we anticipate filing with the SEC, within four months after the end of each fiscal
year, an annual report on Form 20-F containing financial statements audited by an independent accounting firm.
You may read and copy any materials we file
or furnish with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may also obtain
copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, N.E., Washington,
D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference Room. You can
review our SEC filings and the registration statement by accessing the SEC’s internet site at http://www.sec.gov.
We also maintain a website at www.rosettagenomics.com,
through which you can access our SEC filings. The information set forth on our website is not part of this prospectus.
Prospectus
$75,000,000
of
Ordinary Shares
Debt Securities
Warrants
Units
ROSETTA GENOMICS LTD.
We may from time to time offer and sell up to $75,000,000 aggregate
dollar amount of ordinary shares, debt securities, warrants and units. We will specify in one or more prospectus supplements the
terms of the securities to be offered and sold. We may sell these securities to or through underwriters or dealers and also to
other purchasers or through agents. We will set forth the names of any underwriters, dealers or agents in a prospectus supplement.
Our ordinary shares are currently listed on The NASDAQ Capital
Market under the symbol “ROSG.” On December 19, 2012, the last reported sale price of our ordinary shares was $4.90
per share. As of December 19, 2012, the aggregate market value of
our outstanding ordinary shares held by non-affiliates was approximately $48,643,874, based on 9,096,548 shares of outstanding
common stock, of which 9,092,313 shares were held by non-affiliates, and a per share price of $5.35 based on the closing sale
price of our ordinary shares on October 22, 2012. We have offered securities with an
aggregate market value of approximately $10,152,882, consisting of (1) 540,000 ordinary shares we offered and sold in April 2012
at a public offering price of $2.55 per share, (2) 632,057 ordinary shares we offered and sold in May 2012 at a public offering
price of $3.50 per share, and (3) 570,755 ordinary shares we offered and sold in May 2012 at a public offering price of $11.50
per share, pursuant to General Instruction I.B.5. of Form F-3 during the prior 12 calendar month period that ends on, and
includes, the date of this prospectus supplement.
AN INVESTMENT IN OUR SECURITIES INVOLVES
RISKS. SEE THE
SECTION ENTITLED “RISK FACTORS”
BEGINNING ON PAGE 3.
Neither the Securities and Exchange Commission
nor any state securities commission has
approved or disapproved of these securities
or determined if this prospectus is truthful
or complete. Any representation to the
contrary is a criminal offense.
This prospectus may not be used to consummate
sales of securities unless it is accompanied by a prospectus supplement.
The date of this
prospectus is December 19, 2012
ABOUT THIS PROSPECTUS
This prospectus is part of a registration
statement that we filed with the Securities and Exchange Commission, or the SEC, using a “shelf” registration process.
Under this shelf registration process, we may from time to time sell ordinary shares, debt securities, warrants or units, or any
combination of these securities, in one or more offerings up to a total dollar amount of $75,000,000. We have provided to you in
this prospectus a general description of the securities we may offer. Each time we sell securities, we will, to the extent required
by law, provide a prospectus supplement that will contain specific information about the terms of the offering. We may also add,
update or change in any accompanying prospectus supplement or any free writing prospectus we may authorize to be delivered to you
any of the information contained in this prospectus. To the extent there is a conflict between the information contained in this
prospectus and the prospectus supplement, you should rely on the information in the prospectus supplement, provided that if any
statement in one of these documents is inconsistent with a statement in another document having a later date—for example,
a document incorporated by reference in this prospectus or any prospectus supplement—the statement in the document having
the later date modifies or supersedes the earlier statement. This prospectus, together with any accompanying prospectus supplement
and any free writing prospectus we may authorize to be delivered to you, includes all material information relating to the offering
of our securities.
As permitted by the rules and regulations
of the SEC, the registration statement, of which this prospectus forms a part, includes additional information not contained
in this prospectus. You may read the registration statement and the other reports we file with the SEC at the SEC’s web site
or at the SEC’s offices described below under the heading “Where You Can Find Additional Information.”
In this prospectus, unless otherwise stated
or the context otherwise requires, references to “Rosetta,” “Rosetta Genomics,” “we,” “us”
and “our” and similar references refer to Rosetta Genomics Ltd. and our subsidiaries.
You should rely only on the information
contained or incorporated by reference in this prospectus, any accompanying prospectus supplement or any “free writing prospectus”
we may authorize to be delivered to you. We have not authorized anyone to provide you with different information. If anyone provides
you with different or inconsistent information, you should not rely on it. You should assume that the information appearing in
this prospectus, any prospectus supplement and the documents incorporated by reference herein and therein are accurate only as
of their respective dates. Our business, financial condition, results of operations and prospects may have changed since those
dates. Neither this prospectus nor any accompanying prospectus supplement shall constitute an offer or solicitation by anyone in
any jurisdiction in which such offer or solicitation is not authorized or in which the person making such offer or solicitation
is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation.
PROSPECTUS
SUMMARY
This summary highlights only some of
the information included or incorporated by reference in this prospectus. You should carefully read this prospectus together with
the additional information about us described in the sections entitled “Where You Can Find Additional Information”
and “Incorporation of Certain Information by Reference” before purchasing our securities.
Rosetta Genomics
We are seeking to develop and commercialize
new diagnostic tests based on a recently discovered group of genes known as microRNAs. MicroRNAs are naturally expressed, or produced,
using instructions encoded in DNA and are believed to play an important role in normal function and in various pathologies. We
have established a laboratory in Philadelphia, Pennsylvania that is certified under the Clinical Laboratory Improvement Amendments
of 1988, or CLIA, which enables us to develop, validate and commercialize our own diagnostic tests applying our microRNA technology.
This laboratory is also accredited by the College of American Pathologists, or CAP.
We believe that we were the first commercial
enterprise to focus on the emerging microRNA field, and that as a result, we have developed an early and strong intellectual property
position related to the development and commercialization of microRNA-based diagnostics. Using our intellectual property, collaborative
relationships with leading commercial enterprises and academic and medical institutions, and expertise in the field of microRNAs,
we have initiated microRNA-based diagnostic programs for various cancers. In late-2008, we launched our first three diagnostic
tests applying our microRNA technology:
| 1. | miRview® mets — for identification
of the origin of the primary tumor of metastases; |
| 2. | miRview® squamous — for differentiating
squamous from non squamous non-small cell lung cancer; and |
| 3. | miRview® meso — for differentiating
mesothelioma from carcinomas in the lung and pleura. |
In December 2010, we launched our fourth
product, miRview® mets2, which expands the utility of our original miRview® mets test.
In July 2011, we launched our fifth product,
miRview® lung, for differentiating primary lung cancers into four types: squamous lung cancer, non squamous non-small
cell lung cancer, carcinoid lung cancer and small cell lung cancer.
In May 2012, we announced the launch of
our sixth product, miRview® kidney, to classify the four most common kidney tumors: Clear Cell Renal Cell Carcinoma,
or RCC, Papillary RCC, Chromophobe RCC and Oncocytoma.
We currently have distribution agreements
with respect to some of these tests covering Australia, Canada, Greece, India, Israel, New Zealand, Qatar, Saudi Arabia, Singapore,
Turkey and the United Arab Emirates. In addition, in July 2012 we entered into a co-marketing agreement with Precision Therapeutics,
Inc., or Precision Therapeutics, pursuant to which we have granted Precision Therapeutics the co-exclusive right, along with us,
to market miRview® mets2 in the United States. This agreement was amended and restated in October 2012,
and Precision Therapeutics began its co-marketing efforts in October 2012. All of these agreements call for samples to be sent
to our CLIA-certified laboratory in Philadelphia, Pennsylvania for analysis.
In general, we are generating increasing
demand for our testing services, primarily miRview® mets2, through our direct selling effort in the
United States and are successfully fulfilling that demand in our lab in Philadelphia, Pennsylvania, and we are working, with our
reimbursement vendor and consultants, to gain more consistent payment from commercial payors as well as to secure reimbursement
coverage from Medicare for our tests which have not yet received coverage. In May 2012, we announced that the designated Medicare
Administrative Contractor, or MAC, for the miRview® mets2 test had informed us that it plans to cover
this test for all Medicare beneficiaries, and in June 2012, we announced that the MAC had established a reimbursement rate for
the test.
In addition, we are in the discovery stage
for a body fluid-based diagnostic test for heart failure. We have performed a proof of concept study which demonstrated that by
using microRNA expression levels in blood we can identify heart failure patients. We are currently performing additional studies
to assess the feasibility to develop a minimally-invasive microRNA-based stratification test for heart failure.
MicroRNAs also represent potential targets
for the development of novel drugs. We are participating in the Rimonim Consortium, which is supported by the Office of the Chief
Scientist at the Ministry of Industry, Trade and Labor of the State of Israel, or the OCS. The aim of this consortium is to develop
technologies for the use of short interfering RNA, or siRNA, and microRNA mimetics for therapeutics. In this consortium we hope
to develop novel microRNA mimetic molecules with novel chemical modifications, as well as novel delivery systems for microRNAs.
The consortium includes six companies and five academic groups. The transfer of know-how developed in the framework of the consortium
or rights to manufacture based on and/or incorporating such know-how to third parties which are not members of the consortium requires
the consent of the OCS.
Corporate Information
We were incorporated under the laws of the
State of Israel on March 9, 2000 as Rosetta Genomics Ltd., an Israeli company. The principal legislation under which we operate
is the Israeli Companies Law, 5759-1999, as amended, or the Companies Law. Our principal executive office is located at 10 Plaut
Street, Science Park, Rehovot 76706 Israel, and our telephone number is +972-73-222-0700. Our wholly owned subsidiary, Rosetta
Genomics Inc., which was incorporated in Delaware on April 21, 2005, is located at 3711 Market Street, Suite 740, Philadelphia,
Pennsylvania 19104, and its telephone number is (215) 382-9000. Rosetta Genomics Inc. serves as our agent for service of process
in the United States. Our web site address is www.rosettagenomics.com. The information on our web site is not incorporated
by reference into this prospectus and should not be considered to be a part of this prospectus.
On May 14, 2012, our shareholders approved
a 1-for-15 reverse split of our ordinary shares, which we refer to herein as the May 2012 reverse split. The May 2012 reverse split
was effective upon shareholder approval. Unless otherwise noted, the information set forth in this prospectus reflects the May
2012 reverse split. Information incorporated by reference in this prospectus from documents filed with the SEC prior to May 14,
2012 does not reflect the May 2012 reverse split.
RISK FACTORS
Investing in our ordinary shares is very
risky. Please carefully consider the risk factors described in our periodic reports filed with the SEC, including those set forth
under the caption “Item 3. Key Information - D. Risk Factors” in our annual report on Form 20-F for the year ended
December 31, 2011 (File No. 001-33042), which is incorporated by reference in this prospectus. Before making an investment decision,
you should carefully consider these risks as well as other information we include or incorporate by reference in this prospectus.
You should be able to bear a complete loss of your investment.
FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking
statements. These forward-looking statements may be included herein or incorporated by reference in this prospectus and include,
in particular, statements about our plans, strategies and prospects and may be identified by terminology such as “may,”
“will,” “should,” “expect,” “scheduled,” “plan,” “intend,”
“anticipate,” “believe,” “estimate,” “aim,” “potential,” or “continue”
or the negative of those terms or other comparable terminology. These forward-looking statements are subject to risks, uncertainties
and assumptions about us. Although we believe that our plans, intentions and expectations are reasonable, we may not achieve our
plans, intentions or expectations.
Important factors that could cause actual
results to differ materially from the forward-looking statements we make in this prospectus are set forth in “Risk Factors.”
All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by
the cautionary statements in “Risk Factors,” in which we have disclosed the material risks related to our business.
These forward-looking statements involve risks and uncertainties, and the cautionary statements identify important factors that
could cause actual results to differ materially from those predicted in any forward-looking statements. We undertake no obligation
to update any of the forward-looking statements after the date of this prospectus to conform those statements to reflect the occurrence
of unanticipated events, except as required by applicable law. You should read this prospectus, the documents incorporated by reference
in this prospectus and any supplements to this prospectus, completely and with the understanding that our actual future results,
levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking
statements by these cautionary statements.
OFFER STATISTICS AND EXPECTED TIMETABLE
We may sell from time to time pursuant to
this prospectus (as may be detailed in prospectus supplements) an indeterminate number of securities as shall have a maximum aggregate
offering price of $75,000,000. The actual per share price of the securities that we will offer pursuant hereto will depend on a
number of factors that may be relevant as of the time of offer.
CAPITALIZATION AND INDEBTEDNESS
The table below sets forth our capitalization
and indebtedness as of June 30, 2012:
| · | on a pro forma basis to give effect to (1) the issuance of 211,865 ordinary shares upon the conversion of the remaining $300,000
in principal amount of a convertible debenture (the “Debenture”), at a conversion price of $1.416 per share, on July
27, 2012, and (2) the sale and issuance of 6,325,000 ordinary shares in a public offering in August 2012 at a public offering price
of $5.00 per share. |
| | |
As of June 30, 2012 | |
| | |
Actual | | |
Pro Forma | |
| | |
(in thousands, except share and per share
data) | |
| Debt: | |
$ | 13 | | |
$ | 13 | |
| Current maturities of capital lease | |
| - | | |
| - | |
| Long-term capital lease | |
| 300 | | |
| - | |
| Debenture | |
| 2,064 | | |
| - | |
| Embedded conversion feature in the convertible debenture | |
| 387 | | |
| 387 | |
| Warrants related to share purchase agreement | |
| 2,764 | | |
| 400 | |
| Total debt | |
| | | |
| | |
| | |
| | | |
| | |
| Shareholders’ equity: | |
$ | 398 | | |
$ | 1,378 | |
| Ordinary shares of NIS 0.6 par value; 20,000,000 authorized, 2,562,940 shares issued and 2,559,683 shares outstanding, actual; and 20,000,000 authorized, 9,099,805 shares issued and 9,096,548 shares outstanding, pro forma | |
| 94,948 | | |
| 125,154 | |
| Additional paid in capital | |
| - | | |
| - | |
| Other comprehensive income | |
| (91,629 | ) | |
| (91,629 | ) |
| Deficit accumulated during the development stage | |
| 3,717 | | |
| 34,903 | |
| Total shareholders’ equity | |
| - | | |
| - | |
| Non-controlling interest | |
| 3,717 | | |
| 34,903 | |
| Total equity | |
$ | 6,481 | | |
$ | 35,303 | |
MARKET FOR OUR ORDINARY SHARES
Our ordinary shares began trading on The
NASDAQ Global Market on February 27, 2007 under the symbol “ROSG.” On June 30, 2010, we transferred the listing of
our ordinary shares from The NASDAQ Global Market to The NASDAQ Capital Market. Prior to February 27, 2007, there was no established
public trading market for our ordinary shares. The high and low sales prices per share of our ordinary shares for the periods indicated
are set forth below. This information reflects a 1-for-4 reverse stock split effected on July 6, 2011 and the May 2012 reverse
split.
| Year Ended | |
High | | |
Low | |
| December 31, 2007 | |
$ | 619.77 | | |
$ | 71.25 | |
| December 31, 2008 | |
$ | 374.98 | | |
$ | 64.80 | |
| December 31, 2009 | |
$ | 227.99 | | |
$ | 70.79 | |
| December 31, 2010 | |
$ | 208.79 | | |
$ | 54.00 | |
| December 31, 2011 | |
$ | 61.80 | | |
$ | 1.95 | |
| | |
| | | |
| | |
| Quarter Ended | |
| | | |
| | |
| March 31, 2010 | |
$ | 208.79 | | |
$ | 95.40 | |
| June 30, 2010 | |
$ | 143.99 | | |
$ | 93.00 | |
| September 30, 2010 | |
$ | 103.55 | | |
$ | 55.80 | |
| December 31, 2010 | |
$ | 106.19 | | |
$ | 54.00 | |
| March 31, 2011 | |
$ | 61.80 | | |
$ | 30.00 | |
| June 30, 2011 | |
$ | 33.00 | | |
$ | 12.00 | |
| September 30, 2011 | |
$ | 36.45 | | |
$ | 13.65 | |
| December 31, 2011 | |
$ | 20.55 | | |
$ | 1.95 | |
| March 31, 2012 | |
$ | 11.25 | | |
$ | 2.43 | |
| June 30, 2012 | |
$ | 23.43 | | |
$ | 1.40 | |
| September 30, 2012 | |
$ | 12.87 | | |
$ | 3.88 | |
| | |
| | | |
| | |
| Month Ended | |
| | | |
| | |
| June 30, 2012 | |
$ | 17.35 | | |
$ | 9.29 | |
| July 31, 2012 | |
$ | 12.87 | | |
$ | 7.63 | |
| August 31, 2012 | |
$ | 7.83 | | |
$ | 3.88 | |
| September 30, 2012 | |
$ | 7.73 | | |
$ | 5.15 | |
| October 31, 2012 | |
$ | 7.34 | | |
$ | 4.55 | |
| November 30, 2012 | |
$ | 5.39 | | |
$ | 3.92 | |
USE OF PROCEEDS
We
cannot assure you that we will receive any proceeds in connection with securities offered pursuant to this prospectus. Unless
otherwise indicated in the applicable prospectus supplement, we intend to use any net proceeds from the sale of securities under
this prospectus for our operations and for other general corporate purposes, including, but not limited to, repayment or refinancing
of indebtedness or other corporate borrowings, working capital, intellectual property protection and enforcement, capital expenditures,
investments, acquisitions or collaborations, research and development and product development. We may set forth additional information
on the use of proceeds from the sale of securities we offer under this prospectus in a prospectus supplement relating to the specific
offering. We have not determined the amount of net proceeds to be used specifically for the foregoing purposes. As a result, our
management will have broad discretion in the allocation of the net proceeds. Pending use of the net proceeds, we would expect to
invest any proceeds in a variety of capital preservation instruments, including short-term, investment-grade, interest-bearing
instruments.
DESCRIPTION OF SECURITIES
The descriptions of the securities contained
in this prospectus, together with the applicable prospectus supplements, summarize the material terms and provisions of the various
types of securities that we may offer. We will describe in the applicable prospectus supplement relating to any securities the
particular terms of the securities offered by that prospectus supplement. If we so indicate in the applicable prospectus supplement,
the terms of the securities may differ from the terms we have summarized below. We will also include in the prospectus supplement
information, where applicable, about material U.S. federal income tax considerations relating to the securities, and the securities
exchange, if any, on which the securities will be listed.
We may sell from time to time, in one or
more offerings, ordinary shares, debt securities, warrants to purchase any such securities and units.
In this prospectus, we refer to the ordinary
shares, debt securities, warrants and units that may be offered by us collectively as “securities.” The total dollar
amount of all securities that we may issue under this prospectus will not exceed $75,000,000.
This prospectus may not be used to consummate
a sale of securities unless it is accompanied by a prospectus supplement.
DESCRIPTION OF ORDINARY SHARES
As of December 6, 2012, our authorized
share capital was NIS 12,000,000 divided into 20,000,000, ordinary shares nominal (par) value NIS 0.6 each. As of December 6, 2012,
9,099,805 ordinary shares were issued and 9,096,548 were outstanding. As of December 6, 2012, there were approximately 60 shareholders
of record of our ordinary shares. All our ordinary shares rank pari passu in all respects, and all our issued and outstanding
ordinary shares are fully paid and non-assessable.
Rights
Attached to Our Ordinary Shares
Dividend Rights
Our articles of association, or Articles,
provide that our board of directors may, subject to the applicable provisions of the Companies Law, from time to time, declare
such dividend as may appear to the board of directors to be justified by the profits of the company. Subject to the rights of the
holders of shares with preferential or other special rights that may be authorized in the future, holders of ordinary shares are
entitled to receive dividends according to their rights and interest in our profits. Dividends, to the extent declared, are distributed
according to the proportion of the nominal (par) value paid up on account of the shares held at the date so appointed by the company,
without regard to the premium paid in excess of the nominal (par) value, if any. Under the Companies Law, a company may distribute
a dividend only if: (1) the distribution does not create a reasonable concern that the company will be unable to meet its existing
and anticipated obligations as they become due (hereinafter “the Ability to Pay Criterion”); and (2) the distribution
is out of the company’s profits, as defined under the Companies Law (hereinafter: “the Profit Criterion”). If
the company does not meet the Profit Criterion, a court may allow it to distribute a dividend, as long as the court is convinced
that the distribution meets the Ability to Pay Criterion.
Voting Rights.
Holders of ordinary shares, not in default
of any calls or other sums payable in respect of their shares, have one vote for each ordinary share held on all matters submitted
to a vote of shareholders. These voting rights may be affected by the grant of any special voting rights to the holders of a class
of shares with preferential rights that may be authorized in the future. The ordinary shares do not have cumulative voting rights
in the election of directors. As a result, holders of ordinary shares that represent more than 50% of the voting power at the general
meeting of shareholders, in person or by proxy, have the power to elect all the directors whose positions are being filled at that
meeting to the exclusion of the remaining shareholders. However, external directors are elected by a majority vote at a shareholders’
meeting, on the condition that either:
| · | the majority includes at least a majority of the shares of shareholders who are not controlling shareholders and who do not
have a personal interest in the matter (other than a personal interest which is not the result of an affiliation with a controlling
shareholder), who are present and voted on the matter of the election of the external director (disregarding abstentions); or |
| · | the non-controlling shareholders or shareholders that do not have a personal interest in the matter (other than a personal
interest which is not the result of an affiliation with a controlling shareholder), who are present and voted against the election
of the external director hold two percent or less of the voting power of the company. |
External directors are elected for a term
of three years and may be re-elected to two additional terms of three years each (with an exception that applies to companies whose
shares are listed for trading on specified exchanges outside of Israel which companies may reappoint an external director to additional
three year periods), provided that with respect to the appointment for each such additional three-year term, one of the following
has occurred: (a) the reappointment of the external director has been proposed by one or more shareholders holding together one
percent or more of the aggregate voting rights in the company and the appointment was approved at the general meeting of the shareholders
by a simple majority, and provided that: (i) in calculating the majority, votes of controlling shareholders or shareholders having
a personal interest in the appointment (other than a personal interest which is not the result of an affiliation with a controlling
shareholder) and abstentions are disregarded, and (ii) the total number of shares of shareholders who do not have a personal interest
in the appointment (other than a personal interest which is not the result of an affiliation with a controlling shareholder) and/or
who are not controlling shareholders, present and voting in favor of the appointment exceed two percent of the aggregate voting
rights in the company; or (b) the reappointment of the external director has been proposed by the board of directors and the appointment
was approved by the majority required for the initial appointment of an external director.
Liquidation Rights
In the event of our liquidation, subject
to applicable law, after satisfaction of liabilities to creditors, our assets will be distributed to the holders of ordinary shares
in proportion to their respective holdings. This liquidation right may be affected by the grant of preferential dividends or distribution
rights to the holders of a class of shares with preferential rights that may be authorized in the future.
Capital Calls
Under our Articles and the Companies Law,
the liability of our shareholders is limited to the par value of the shares held by them.
Transfer of Shares
Fully paid ordinary shares are issued in
registered form and may be transferred pursuant to our Articles, unless such transfer is restricted or prohibited by another instrument
and subject to applicable securities laws.
Transfer
Agent and Registrar
The transfer agent and registrar for our
ordinary shares is American Stock Transfer & Trust Company.
The
NASDAQ Capital Market
Our ordinary shares are listed on The NASDAQ
Capital Market under the symbol “ROSG.”
Warrants
As of December 6, 2012, we had the following warrants outstanding:
| · | Warrants issued in the January 2010 Registered Offering. In connection with a registered direct offering in January
2010, which we refer to herein as the January 2010 Registered Offering, we issued to the investors warrants to purchase up to 21,104
ordinary shares at an exercise price of $150.00 per share. These warrants expire on January 19, 2015. In addition, we issued warrants
to purchase up to 1,581 ordinary shares at an exercise price of $150.00 per share to the placement agent and its affiliates for
services as placement agent. These placement agent warrants expire on November 23, 2014. |
| · | Warrants issued in the 2010 Private Placement. In connection with a private placement in December 2010, which we refer
to herein as the 2010 Private Placement, we issued to the investors Series A warrants to purchase up to 20,841 ordinary shares
at an exercise price of $78.00 per share. These Series A warrants expire on December 1, 2015. In addition, we issued warrants to
purchase up to 1,045 ordinary shares at an exercise price of $78.00 per share to the placement agent and its affiliates for services
as placement agent. These placement agent warrants expire on December 1, 2015. Pursuant to the anti-dilution provisions, the exercise
price of these warrants issued in the 2010 Private Placement was adjusted to $60.00 per share. |
| · | Warrants issued in the February 2011 Private Placement. In connection with a private placement in February 2011, which
we refer to herein as the February 2011 Private Placement, we issued to the investors warrants to purchase up to 56,776 ordinary
shares at an exercise price of $48.00 per share. These warrants expire on February 23, 2016. In addition, we issued warrants to
purchase up to 1,895 ordinary shares at an exercise price of $48.00 per share to the placement agent and its affiliates for services
as placement agent. These placement agent warrants expire on February 23, 2016. |
| · | Warrants issued in the February 2011 Registered Offering. In connection with a registered direct offering in February
2011, which we refer to herein as the February 2011 Registered Offering, we issued to the investors warrants to purchase up to
45,509 ordinary shares at an exercise price of $48.00 per share. These warrants expire on February 23, 2016. In addition, we issued
warrants to purchase up to 2,276 ordinary shares at an exercise price of $45.00 per share to the placement agent and its affiliates
for services as placement agent. These placement agent warrants expire on November 24, 2014. |
| · | Warrants issued to consultants. On April 11, 2011, we issued warrants to purchase an aggregate of 1,168 shares to four
consultants. The warrants vest over a five year period and have an exercise price of $29.40 per share and expire on April 11, 2021.
As of December 6, 2012, warrants to purchase an aggregate of 1,001 of these shares had terminated by their terms. On May 22, 2012,
we issued warrants to purchase an aggregate of 750 shares to the consultants. The warrants vest over a five year period and have
an exercise price of $7.43 per share and expire on May 22, 2022. As of December 6, 2012, warrants to purchase an aggregate of 550
of these shares had terminated by their terms. |
| · | Warrants issued in the October 2011 Private Placement. In connection with a private placement in October 2011, which
we refer to herein as the October 2011 Private Placement, we issued to the investors Series A Warrants to purchase up to an aggregate
of 135,010 ordinary shares at an exercise price of $15.00 per share. The Series A Warrants expire on October 19, 2016. In addition,
we issued warrants to purchase up to 3,378 ordinary shares at an exercise price of $15.00 per share to the placement agent and
its affiliates for services as placement agent. These placement agent warrants expire on October 19, 2016. Pursuant to the anti-dilution
provisions, the exercise price of these warrants issued in the October 2011 Private Placement was adjusted to $7.50 per share.
As of December 6, 2012, Series A warrants to purchase 113,342 shares had been exercised. |
| · | Warrants issued in the January 2012 Debenture transaction. In connection with a private placement in January 2012 of
the Debenture, we issued warrants to purchase up to 4,241 ordinary shares at an exercise price of $1.557 per share to the placement
agent and its affiliates for services as placement agent. These placement agent warrants expire on January 26, 2017. |
| · | Warrants issued in the April 2012 Registered Direct Offering. In connection with a registered direct offering in April
2012, which we refer to herein as the April 2012 Registered Direct Offering, we issued warrants to purchase up to 13,505 ordinary
shares at an exercise price of $3.1875 per share to the placement agent and its affiliates for services as placement agent. These
placement agent warrants expire on April 12, 2017. |
| · | Warrants issued in the Initial May 2012 Registered Direct Offering. In connection with a registered direct offering
in May 2012, which we refer to herein as the Initial May 2012 Registered Direct Offering, we issued warrants to purchase up to
15,802 ordinary shares at an exercise price of $4.375 per share to the placement agent and its affiliates for services as placement
agent. These placement agent warrants expire on May 16, 2017. |
| · | Warrants issued in the Subsequent May 2012 Registered Direct Offering. In connection with a registered direct offering
in May 2012, which we refer to herein as the Subsequent May 2012 Registered Direct Offering, we issued warrants to purchase up
to 14,269 ordinary shares at an exercise price of $14.375 per share to the placement agent and its affiliates for services as placement
agent. These placement agent warrants expire on May 24, 2017. |
| · | Warrants issued in the August 2012 Public Offering. In connection with an underwritten public offering in August 2012,
which we refer to herein as the August 2012 Public Offering, we issued warrants to purchase up to 148,937 ordinary shares at an
exercise price of $6.25 per share to the underwriter and its affiliates for services as underwriter. These warrants expire on August
2, 2017. |
| · | Warrants issued to former placement agent. In connection with a “fee tail” arrangement with a former placement
agent, we issued the following warrants on September 12, 2012 to the former placement agent and its affiliates (all of the following
warrants expire on November 24, 2014): |
| · | warrants to purchase up to 6,175 ordinary shares at an exercise price of $2.805 per share to the former placement agent and
its affiliates in connection with the April 2012 Registered Direct Offering; |
| · | warrants to purchase up to 1,325 ordinary shares at an exercise price of $3.85 per share to the former placement agent and
its affiliates in connection with the Initial May 2012 Registered Direct Offering; |
| · | warrants to purchase up to 2,918 ordinary shares at an exercise price of $12.65 per share to the former placement agent and
its affiliates in connection with the Subsequent May 2012 Registered Direct Offering; and |
| · | warrants to purchase up to 16,063 ordinary shares at an exercise price of $5.50 per share to the former placement agent and
its affiliates in connection with the August 2012 Public Offering. |
Special Rights
Subject to all other provisions of our Articles,
from time to time, by resolution of our shareholders, we may provide for shares with preferred or deferred rights or rights of
redemption or other special rights and/or such restrictions, whether in regard to liquidation, dividends, voting, repayment of
share capital or otherwise, as may be stipulated in such resolution provided that any resolution with respect to the issuance of
such shares will be made only by the board of directors.
Modification of Rights
Pursuant to our Articles, if at any time
our share capital is divided into different classes of shares, the rights attached to any class, unless otherwise provided by our
Articles, may be modified or abrogated by us, by a resolution of the shareholders, subject to the consent in writing of the holders
of at least a majority of the issued shares of such class or the adoption of a resolution passed at a separate meeting of the holders
of the shares of such class.
Shareholders’ Meetings and Resolutions
Pursuant to our Articles, the quorum required
for an ordinary meeting of shareholders consists of at least two shareholders, not in default of any calls or other sums payable
in respect of their shares, present in person or by proxy, who hold shares conferring in the aggregate more than 25% of the voting
power of the company, unless otherwise required by applicable rules or our Articles. A meeting adjourned for lack of a quorum generally
is adjourned to the same day in the following week at the same time and place or any time and place as the chairman of the meeting
may designate. At such reconvened meeting, the required quorum consists of any two shareholders, not in default of any calls or
other sums payable in respect of their shares, present in person or by proxy.
Under the Companies Law, and the Company's
articles of association, notice of any general shareholders meeting will be given at least 21 calendar days ’ prior notice
of any general shareholders meeting or 35 days prior to such meeting, to the extent required under regulations promulgated under
the Companies Law.
Under the Companies Law and our Articles,
all resolutions of our shareholders require a simple majority of the shares present, in person or by proxy or by written ballot,
and voting on the matter, subject to certain exceptions provided for in our Articles namely: (a) the amendment of the provisions
of our Articles relating to the election of directors, which require the approval of the greater of (i) holders of not less than
seventy-five percent (75%) of the voting power represented at a meeting in person or by proxy and voting thereon, or (ii) holders
of a majority of the outstanding voting power of all shares of the company voting on such matter at a general meeting; (b) the
removal of any director from office, the election of a director in place of a director so removed or the filling of any vacancy,
however created, on the board of directors, which require the vote of the holders of at least 75% of the voting power represented
at the general meeting; and (c) the consummation of a merger (as defined in the Companies Law) which requires the approval of the
holders of at least a majority of the voting power of the company.
Under the Companies Law, each and every
shareholder has a duty to act in good faith and in customary manner in exercising his or her rights and fulfilling his or her obligations
towards the company in which he or she holds shares and towards other shareholders, and refrain from abusing his or her power in
the company, including in voting in the general meeting of shareholders or at class meetings on the following matters:
| · | any amendment to the articles of association; |
| · | an increase of our authorized share capital; |
| · | approval of interested party transactions that require shareholder approval. |
In addition, each and every shareholder
has the general duty to refrain from discriminating against other shareholders. In addition, any controlling shareholder, any shareholder
who knows that it possesses the power to determine the outcome of a shareholder or class vote and any shareholder who, pursuant
to the company’s articles of association has the power to appoint or prevent the appointment of an office holder in the company
is under a duty to act with fairness towards the company. The Companies Law does not describe the substance of this duty of fairness.
Our annual general meetings are held once
in every calendar year at such time (within a period of not more than fifteen months after the last preceding annual general meeting)
and at such place determined by our board of directors. All general meetings other than annual general meetings are called extraordinary
general meetings.
Our board of directors may, in its discretion,
convene additional meetings as “extraordinary general meetings.” In addition, the board of directors must convene an
extraordinary general meeting upon the demand of two of the directors, one fourth of the directors in office, one or more shareholders
having at least 5% of the outstanding share capital and at least 1% of the voting power in the company, or one or more shareholders
having at least 5% of the voting power in the company. The chairperson of the board of directors shall preside at each of our general
meetings, or if at any meeting the chairperson is not present within fifteen (15) minutes after the time fixed for holding the
meeting or is unwilling to act as chairperson, then if there is a co-chairperson, such co-chairperson shall preside at the meeting,
or in the absence of both, the shareholders present shall choose someone of their number to be chairperson. The chairperson of
the board of directors is not entitled to a vote at a general meeting in his capacity as chairperson.
Limitation on Owning Securities
Our Articles and Israeli law do not restrict
in any way the ownership or voting of ordinary shares by non-residents or persons who are not citizens of Israel, except with respect
to subjects of nations which are in a state of war with Israel. We are members of the Rimonim Consortium, which is supported by
the OCS. According to the Encouragement of Industrial Research and Development Law, 5744-1984, a change of control of our company
should be reported to the research committee at the Ministry of Industry, Trade and Labor (the Committee), and a change in the
holding of the means of control in our company (means of control include the right to vote at a general meeting of a company or
a corresponding body of another corporation or the right to appoint directors of the corporation or its general manager) which
results in any person not being a citizen or resident of Israel or corporation incorporated in Israel holding 5% or more of the
issued share capital or of the voting power of our company, should be reported to the committee, which (according to its internal
proceedings) will notify us of its decision within seven days from the date thereof, and such person should sign an undertaking
in the form published by the research committee.
Mergers and Acquisitions and Tender Offers under Israeli
Law
The Companies Law includes provisions that
allow a merger transaction and requires that each company that is a party to a merger have the transaction approved by its board
of directors and by a simple majority of shares present, in person or by proxy, at a general meeting and voting on the transaction
(including the separate vote of each class of shares of the party to the merger which is not the surviving entity) at a shareholders’
meeting called on at least 35 days’ prior notice. In addition, under our Articles, approval of a merger transaction requires
that holders of at least a majority of the voting power of the company vote in favor of the merger transaction. In determining
whether the required majority under the Companies Law has approved the merger, if shares of a company are held by the other party
to the merger, or by any person holding 25% or more of the voting rights or 25% or more of the means of appointing directors of
the other party to the merger, then a vote against the merger by holders of the majority of the shares present and voting, excluding
shares held by the other party to the merger or by such person, or by any person or entity acting on behalf of either of them,
including their relatives or entities controlled by any of them, is sufficient to reject the merger transaction. If the transaction
would have been approved but for the separate approval of each class or exclusion of the votes of certain shareholders as provided
above, a court may still approve the merger upon the request of holders of at least 25% of the voting rights of a company, if the
court holds that the merger is fair and reasonable, taking into account the value of the parties to the merger and the consideration
offered to the shareholders. Notwithstanding the foregoing, a merger that is also an extraordinary transaction with a controlling
shareholder or with another person in which a controlling shareholder has a personal interest, requires approval as an extraordinary
transaction with a controlling shareholder.
Under the Companies Law, each merging company
must inform its secured creditors of the proposed merger plans. Upon the request of a creditor of either party of the proposed
merger, the court may delay or prevent the merger if it concludes that there exists a reasonable concern that as a result of the
merger, the surviving company will be unable to satisfy the obligations of any of the parties to the merger and may further give
instructions to secure the rights of creditors. In addition, a merger may not be completed unless at least 50 days have passed
from the time that a proposal for the approval of the merger has been filed with the Israel Registrar of Companies and 30 days
have passed from the time that the approval of the merging parties’ shareholders has been received.
The Companies Law also provides that, subject
to certain exceptions, an acquisition of shares of a public company must be made by means of a special tender offer if as a result
of the acquisition the purchaser would become a holder of 25% or more of the voting rights in the company and there is no existing
holder of 25% or more of the voting rights in the company. Similarly, the Companies Law provides that, subject to certain exceptions,
an acquisition of shares in a public company must be made by means of a special tender offer if as a result of the acquisition
the purchaser would become a holder of more than 45% of the voting rights in the company, if there is no other shareholder of the
company that holds more than 45% of the voting rights in the company.
Under the Companies Law, a person may not
acquire shares in a public company if, following the acquisition, the acquirer will hold more than 90% of the company’s shares
or more than 90% of any class of shares, other than by means of a tender offer to acquire all of the shares or all of the shares
of the particular class.
The Companies Law also provides that as
long as a shareholder in a public company holds more than 90% of the company’s shares or of a class of shares, that shareholder
shall be precluded from purchasing any additional shares. In order that all of the shares that the acquirer offered to purchase
be transferred to him by operation of law, one of the following needs to have occurred: (i) the shareholders who declined or do
not respond to the tender offer hold less than 5% of the company’s outstanding share capital or of the relevant class of
shares and the majority of offerees who do not have a personal interest in accepting the tender offer accepted the offer, or (ii)
the shareholders who declined or do not respond to the tender offer hold less than 2% of the company’s outstanding share
capital or of the relevant class of shares.
A shareholder that had its shares so transferred,
whether he or she accepted the tender offer or not, has the right, within six months from the date of acceptance of the tender
offer, to petition the court to determine that the tender offer was for less than fair value and that the fair value should be
paid as determined by the court. However, the purchaser may provide in its offer that shareholders who accept the tender offer
will not be entitled to such rights.
If the conditions set forth above are not
met, the acquirer may not acquire additional shares of the company from shareholders who accepted the tender offer to the extent
that following such acquisition the acquirer would own more than 90% of the company’s issued and outstanding share capital.
The above restrictions apply, in addition
to the acquisition of shares, to the acquisition of voting power. In addition, the provisions regarding tender offers shall also
apply to the acquisition of any other securities of the company.
Share History
The following is a summary of the history
of our share capital for the last three years.
Ordinary
Share Issuances
Stock Options. Since January 1, 2009,
we have issued 4,574 ordinary shares upon the exercise of stock options.
Prometheus Private Placement. On
April 27, 2009, we sold 33,334 of our ordinary shares at $240.00 per share pursuant to a stock purchase agreement entered into
between us and Prometheus Laboratories Inc. on April 10, 2009.
January 2010 Registered Offering.
On January 19, 2010, we closed the January 2010 Registered Offering, pursuant to which we sold an aggregate of 42,167 ordinary
shares at a price of $120.00 per share and issued warrants to purchase a total of 21,104 ordinary shares at an exercise price of
$150.00 per share to institutional investors. The ordinary shares and warrants were issued pursuant to a prospectus supplement
dated as of January 13, 2010, which was filed with the SEC in connection with a takedown from our shelf registration statement
on Form F-3 (File No. 333-163063), which became effective on November 24, 2009, and the base prospectus dated as of November 24,
2009 contained in such registration statement. In connection with the offering, we also issued to the placement agent and its affiliates
warrants to purchase a total of 1,581 ordinary shares at an exercise price of $150.00 per share.
2010 Private Placement. On December
1, 2010, we closed the 2010 Private Placement, pursuant to which we sold an aggregate of 41,667 of our ordinary shares at a price
of $60.00 per share and issued Series A warrants to purchase up to an aggregate of 20,841 ordinary shares with an exercise price
of $78.00 per share and Series B warrants to purchase up to an aggregate of 10,417 ordinary shares with an exercise price of $0.60
per share. On February 9, 2011, the Series B warrants were automatically exercised on a cashless basis and we issued an aggregate
of 10,307 ordinary shares. In connection with the 2010 Private Placement, we also issued to the placement agent and its affiliates
warrants to purchase a total of 1,045 ordinary shares at an exercise price of $78.00 per share. Following the February 2011 Private
Placement and the February 2011 Registered Offering, the exercise price of the Series A warrants and the warrants issued to the
placement agent and its affiliates in the 2010 Private Placement was adjusted to $60.00 per share pursuant to the terms thereof.
February 2011 Private Placement.
On February 23, 2011, we closed the February 2011 Private Placement, pursuant to which we sold an aggregate of 75,695 of our ordinary
shares at a price of $36.00 per share and issued warrants to purchase up to an aggregate of 56,776 ordinary shares at an exercise
price of $48.00 per share. In connection with the February 2011 Private Placement, we also issued to the placement agent and its
affiliates warrants to purchase a total of 1,895 ordinary shares at an exercise price of $48.00 per share.
February 2011 Registered Offering.
On February 23, 2011, we closed the February 2011 Registered Offering, pursuant to which we sold an aggregate of 90,978 of our
ordinary shares at a price of $36.00 per share and issued warrants to purchase up to an aggregate of 45,509 ordinary shares with
an exercise price of $48.00 per share. In connection with the February 2011 Registered Offering, we also issued to the placement
agent and its affiliates warrants to purchase a total of 2,276 ordinary shares at an exercise price of $45.00 per share.
October 2011 Private Placement. On
October 19, 2011, we closed the October 2011 Private Placement, pursuant to which we sold an aggregate of 135,010 of our ordinary
shares at a price of $11.25 per share and issued Series A warrants to purchase up to an aggregate of 135,010 ordinary shares with
an exercise price of $15.00 per share and Series B warrants to purchase up to an aggregate of 67,500 ordinary shares with an exercise
price an exercise price equal to the greater of $0.15 or NIS 0.6 per share. On November 28, 2011, the Series B warrants were automatically
exercised on a cashless basis and we issued an aggregate of 65,748 ordinary shares. As of July 15, 2012, Series A Warrants to purchase
113,342 shares had been exercised. In connection with the October 2011 Private Placement, we also issued to the placement agent
and its affiliates warrants to purchase a total of 3,378 ordinary shares at an exercise price of $15.00 per share. In November
2011, the exercise price of the Series A warrants and the warrants issued to the placement agent and its affiliates in the October
2011 Private Placement was adjusted to $7.50 per share pursuant to the terms thereof.
January 2012 Debenture Transaction.
On January 26, 2012, we entered into a Secured Loan Agreement, pursuant to which on January 27, 2012, we sold and issued the $1,750,000
Debenture to accredited investors. Beginning on March 15, 2012, an aggregate of $300,000 in principal amount of the Debenture became
convertible, subject to certain limitations, into our ordinary shares at a conversion price of $1.416 per share. On June 21, 2012,
we entered into an agreement with the Debenture holders pursuant to which we prepaid an aggregate of $1,450,000 principal amount
and $288,000 in interest and the Debenture holders agreed to convert the remaining $300,000 principal amount no later than July
31, 2012. The remaining $300,000 in principal amount was converted into 211,865 ordinary shares on July 27, 2012. In connection
with this transaction, we issued warrants to purchase up to 4,241 ordinary shares at an exercise price of $1.557 per share to the
placement agent and its affiliates for services as placement agent. These placement agent warrants expire on January 26, 2017.
April 2012 Registered Direct Offering.
On April 17, 2012, we closed the sale of 540,000 ordinary shares at a price of $2.55 per share in the April 2012 Registered Direct
Offering. In connection with the April 2012 Registered Direct Offering, we issued warrants to purchase up to 13,505 ordinary shares
at an exercise price of $3.1875 per share to the placement agent and its affiliates for services as placement agent. These placement
agent warrants expire on April 12, 2017. In connection with this transaction, we also issued warrants to purchase up to 6,175 ordinary
shares at an exercise price of $2.805 per share to a former placement agent and its affiliates pursuant to a “fee tail”
provision. These warrants expire on November 24, 2014.
Initial May 2012 Registered Direct Offering.
On May 22, 2012, we closed the sale of 632,057 ordinary shares at a price of $3.50 per share in the Initial May 2012 Registered
Direct Offering. In connection with the Initial May 2012 Registered Direct Offering, we issued warrants to purchase up to 15,802
ordinary shares at an exercise price of $4.375 per share to the placement agent and its affiliates for services as placement agent.
These placement agent warrants expire on May 16, 2017. In connection with this transaction, we also issued warrants to purchase
up to 1,325 ordinary shares at an exercise price of $3.85 per share to a former placement agent and its affiliates pursuant to
a “fee tail” provision. These warrants expire on November 24, 2014.
Subsequent May 2012 Registered Direct
Offering. On May 31, 2012, we closed the sale of 570,755 ordinary shares at a price of $11.50 per share in the Subsequent May
2012 Registered Direct Offering. In connection with the Subsequent May 2012 Registered Direct Offering, we issued warrants to purchase
up to 14,269 ordinary shares at an exercise price of $14.375 per share to the placement agent and its affiliates for services as
placement agent. These placement agent warrants expire on May 24, 2017. In connection with this transaction, we also issued warrants
to purchase up to 2,918 ordinary shares at an exercise price of $12.65 per share to a former placement agent and its affiliates
pursuant to a “fee tail” provision. These warrants expire on November 24, 2014.
August 2012 Public Offering. On August
8, 2012, we closed the sale of 5,500,000 ordinary shares at a price of $5.00 per share in the August 2012 Public Offering. On August
29, 2012, we closed the sale of an additional 825,000 ordinary shares at a price of $5.00 per share in the August 2012 Public Offering,
pursuant to the full exercise of the underwriter’s over-allotment option. In connection with the August 2012 Public Offering,
we issued warrants to purchase up to 148,937 ordinary shares at an exercise price of $6.25 per share to the underwriter and its
affiliates for services as underwriter. These placement agent warrants expire on August 2, 2017. In connection with this transaction,
we also issued warrants to purchase up to 16,063 ordinary shares at an exercise price of $5.50 per share to a former placement
agent and its affiliates pursuant to a “fee tail” provision. These warrants expire on November 24, 2014.
Authorized
Share Capital
On December 22, 2009, our shareholders approved
an increase to our authorized share capital by NIS 100,000, divided into 10,000,000 ordinary shares, par (nominal) value NIS 0.01
each (prior to giving effect to the 1-for-4 reverse stock split effected on July 6, 2011), so that following such increase, the
authorized share capital was NIS 275,784 divided into 27,578,371, ordinary shares par (nominal) value NIS 0.01 each (prior to giving
effect to the 1-for-4 reverse stock split effected on July 6, 2011 and the May 2012 reverse split).
On October 21, 2010, our shareholders approved
an increase to our authorized share capital by NIS 300,000, divided into 30,000,000 ordinary shares, par (nominal) value NIS 0.01
each (prior to giving effect to the 1-for-4 reverse stock split effected on July 6, 2011 and the May 2012 reverse split), so that
following such increase, the authorized share capital is NIS 575,784 divided into 57,578,371, ordinary shares par (nominal) value
NIS 0.01 each (prior to giving effect to the 1-for-4 reverse stock split effected on July 6, 2011 and the May 2012 reverse split).
On July 6, 2011, our shareholders approved
an increase to our authorized share capital by NIS 216 to NIS 576,000, divided into 57,600,000 ordinary shares with a nominal (par)
value of NIS 0.01 each (prior to giving effect to the 1-for-4 reverse stock split effected on July 6, 2011 and the May 2012 reverse
split), and the 1-for-4 reverse stock split effected by the consolidation of our authorized share capital into 14,400,000 ordinary
shares with a nominal (par) value of NIS 0.04 each, by consolidating every four (4) ordinary shares with a nominal (par) value
NIS 0.01 each into one (1) ordinary share with a nominal (par) value of NIS 0.04 each. Following these actions our registered (authorized)
share capital was NIS 576,000 divided into 14,400,000 ordinary shares with a nominal (par) value of NIS 0.04 each. On July 6, 2011,
our shareholders subsequently approved an increase to our registered (authorized) share capital by NIS 624,000, divided into 15,600,000
ordinary shares, nominal (par) value NIS 0.04 each, so that following such increase, the registered (authorized) share capital
was NIS 1,200,000 divided into 30,000,000, ordinary shares nominal (par) value NIS 0.04 each.
On May 14, 2012, our shareholders approved
the May 2012 reverse split effected by the consolidation of our authorized share capital into 2,000,000 ordinary shares with a
nominal (par) value of NIS 0.6 each, by consolidating every fifteen (15) ordinary shares with a nominal (par) value NIS 0.04 each
into one (1) ordinary share with a nominal (par) value of NIS 0.6 each. Following these actions, our registered (authorized) share
capital was NIS 1,200,000 divided into 2,000,000 ordinary shares with a nominal (par) value of NIS 0.6 each. On May 14, 2012, our
shareholders subsequently approved an increase to our registered (authorized) share capital by NIS 10,800,000, divided into 18,000,000
ordinary shares, nominal (par) value NIS 0.6 each, so that following such increase, the registered (authorized) share capital was
NIS 12,000,000 divided into 20,000,000, ordinary shares nominal (par) value NIS 0.6 each.
DESCRIPTION OF DEBT SECURITIES
The following description, together with
the additional information we include in any applicable prospectus supplement, summarizes the material terms and provisions of
the debt securities that we may offer under this prospectus. While the terms we have summarized below will apply generally to any
future debt securities we may offer, we will describe the particular terms of any debt securities that we may offer in more detail
in the applicable prospectus supplement. If we so indicate in a prospectus supplement, the terms of any debt securities we offer
under that prospectus supplement may differ from the terms we describe below.
We will issue senior notes under a senior
indenture that we will enter into with a trustee to be named in the senior indenture. We will issue subordinated notes under a
subordinated indenture that we will enter into with a trustee to be named in the subordinated indenture. We have filed forms of
these documents as exhibits to the registration statement, of which this prospectus forms a part. We will describe changes
to the indentures in connection with an offering of debt securities in a prospectus supplement. We use the term “indentures”
to refer to both the senior indenture and the subordinated indenture. The indentures will be qualified under the Trust Indenture
Act of 1939, or the Trust Indenture Act. We use the term “trustee” to refer to either the trustee under the senior
indenture or the trustee under the subordinated indenture, as applicable.
The following summaries of material provisions
of senior notes, subordinated notes and the indentures are subject to, and qualified in their entirety by reference to, the provisions
of the indenture applicable to a particular series of debt securities. Except as we may otherwise indicate, the terms of the senior
indenture and the subordinated indenture are identical.
General
If we decide to issue any senior notes or
subordinated notes pursuant to this prospectus, we will describe in a prospectus supplement the terms of the series of notes, including
the following:
| · | any limit on the amount that may be issued; |
| · | whether or not we will issue the series of notes in global form, the terms and who the depository will be; |
| · | the annual interest rate, which may be fixed or variable, or the method for determining the rate and the date interest will
begin to accrue, the dates interest will be payable and the regular record dates for interest payment dates or the method for determining
such dates; |
| · | If the notes are guaranteed the name of the guarantor and a brief outline of the contract of guarantee; |
| · | whether or not the notes will be secured or unsecured, and the terms of any secured debt; |
| · | whether or not the notes will be senior or subordinated; |
| · | the terms of the subordination of any series of subordinated debt; |
| · | the terms on which the notes may be convertible into or exchangeable for ordinary shares or other securities of ours, including
provisions as to whether conversion or exchange is mandatory, at the option of the holder or at our option and provisions pursuant
to which the number of ordinary shares or other securities of ours that the holders of the series of debt securities receive would
be subject to adjustment; |
| · | the place where payments will be payable and the currency in which the debt is payable; |
| · | our right, if any, to defer payment of interest and the maximum length of any such deferral period; |
| · | the date, if any, after which, and the price at which, we may, at our option, redeem the series of notes pursuant to any optional
redemption provisions; |
| · | the date, if any, on which, and the price at which we are obligated, pursuant to any mandatory sinking fund provisions or otherwise,
to redeem, or at the holder’s option to purchase, the series of notes; |
| · | whether the indenture will restrict our ability to pay dividends, or will require us to maintain any asset ratios or reserves; |
| · | whether we will be restricted from incurring any additional indebtedness; |
| · | a discussion of any material or special U.S. federal income tax considerations; |
| · | the denominations in which we will issue the series of notes, if other than denominations of $1,000 and any integral multiple
thereof; |
| · | the definition and consequences of events of default under the indentures; and |
| · | any other specific terms, preferences, rights or limitations of, or restrictions on, the debt securities. |
Subordination of Subordinated Notes
Subordinated notes will be unsecured and
will be subordinate and junior in priority of payment to certain indebtedness to which we may be subject to the extent described
in a prospectus supplement. The subordinated indenture does not limit the amount of subordinated notes that we may issue. It also
does not limit us from issuing any other secured or unsecured debt.
Form, Exchange and Transfer
We will issue the notes of each series only
in fully registered form without coupons and, unless we otherwise specify in the applicable prospectus supplement, in denominations
of $1,000 and any integral multiple thereof. The indentures provide that we may issue notes of a series in temporary or permanent
global form and as book-entry securities that will be deposited with, or on behalf of, The Depository Trust Company, New York,
New York, or DTC, or another depository named by us and identified in a prospectus supplement with respect to that series.
At the option of the holder, subject to
the terms of the indentures and the limitations applicable to global securities described in the applicable prospectus supplement,
the holder of the notes of any series can exchange the notes for other notes of the same series, in any authorized denomination
and of like tenor and aggregate principal amount.
Subject to the terms of the indentures and
the limitations applicable to global securities set forth in the applicable prospectus supplement, holders of the notes may present
the notes for exchange or for registration of transfer, duly endorsed or with the form of transfer endorsed thereon duly executed
if so required by us or the security registrar, at the office of the security registrar or at the office of any transfer agent
designated by us for this purpose. Unless otherwise provided in the notes that the holder presents for transfer or exchange, we
will not require any payment for any registration of transfer or exchange, but we may require payment of any taxes or other governmental
charges.
We will name in the applicable prospectus
supplement the security registrar, and any transfer agent in addition to the security registrar, that we initially designate for
any notes. We may at any time designate additional transfer agents or rescind the designation of any transfer agent or approve
a change in the office through which any transfer agent acts, except that we will be required to maintain a transfer agent in each
place of payment for the notes of each series.
If we elect to redeem the notes of any series,
we will not be required to:
| · | reissue, register the transfer of, or exchange any notes of that series during a period beginning at the opening of business
15 days before the day of mailing of a notice of redemption of any notes that may be selected for redemption and ending at
the close of business on the day of the mailing; or |
| · | register the transfer of or exchange any notes so selected for redemption, in whole or in part, except the unredeemed portion
of any notes we are redeeming in part. |
Consolidation, Merger or Sale
The indentures do not contain any covenant
that restricts our ability to merge or consolidate, or sell, convey, transfer or otherwise dispose of all or substantially all
of our assets. However, any successor to or acquirer of such assets must assume all of our obligations under the indentures or
the notes, as appropriate.
Events of Default Under the Indentures
The following are events of default under
the indentures with respect to any series of notes that we may issue:
| · | if we fail to pay interest when due and our failure continues for 90 days and the time for payment has not been extended
or deferred; |
| · | if we fail to pay the principal, or premium, if any, when due and the time for payment has not been extended or delayed; |
| · | if we fail to observe or perform any other covenant contained in the notes or the indentures, other than a covenant specifically
relating to another series of notes, and our failure continues for 90 days after we receive notice from the trustee or holders
of at least 25% in aggregate principal amount of the outstanding notes of the applicable series; and |
| · | if we experience specified events of bankruptcy, insolvency or reorganization. |
If an event of default with respect to notes
of any series occurs and is continuing, the trustee or the holders of at least 25% in aggregate principal amount of the outstanding
notes of that series, by notice to us in writing, and to the trustee if notice is given by such holders, may declare the unpaid
principal of, or premium, if any, on and accrued interest, if any, on the notes due and payable immediately.
The holders of a majority in principal amount
of the outstanding notes of an affected series may waive any default or event of default with respect to the series and its consequences,
except uncured defaults or events of default regarding payment of principal, or premium, if any, or interest, unless we have cured
the default or event of default in accordance with the indenture. Any waiver shall cure the default or event of default.
Subject to the terms of the indentures,
if an event of default under an indenture shall occur and be continuing, the trustee will be under no obligation to exercise any
of its rights or powers under such indenture at the request or direction of any of the holders of the applicable series of notes,
unless such holders have offered the trustee reasonable indemnity. In such event, the holders of a majority in principal amount
of the outstanding notes of any series will have the right to direct the time, method and place of conducting any proceeding for
any remedy available to the trustee, or exercising any trust or power conferred on the trustee, with respect to the notes of that
series, provided that:
| · | the direction so given by the holder is not in conflict with any law or the applicable indenture; and |
| · | subject to its duties under the Trust Indenture Act, the trustee need not take any action that might involve it in personal
liability or might be unduly prejudicial to the holders not involved in the proceeding. |
A holder of the notes of any series will
only have the right to institute a proceeding under the indentures or to appoint a receiver or trustee, or to seek other remedies,
if:
| · | the holder has given written notice to the trustee of a continuing event of default with respect to that series; |
| · | the holders of at least 25% in aggregate principal amount of the outstanding notes of that series have made written request,
and such holders have offered reasonable indemnity to the trustee to institute the proceeding as trustee; and |
| · | the trustee does not institute the proceeding, and does not receive from the holders of a majority in aggregate principal amount
of the outstanding notes of that series other conflicting directions within 60 days after the notice, request and offer. |
These limitations do not apply to a suit
instituted by a holder of notes if we default in the payment of the principal of, or the premium, if any, or interest on, the notes.
We will periodically file statements with
the trustee regarding our compliance with specified covenants in the indentures.
Discharge
Each indenture provides that we can elect,
under specified circumstances, to be discharged from our obligations with respect to one or more series of debt securities, except
for obligations to:
| · | register the transfer or exchange of debt securities of the series; |
| · | replace stolen, lost or mutilated debt securities of the series; |
| · | maintain paying agencies; |
| · | hold monies for payment in trust; |
| · | compensate and indemnify the trustee; and |
| · | appoint any successor trustee. |
In order to exercise our rights to be discharged,
we must deposit with the trustee money or government obligations sufficient to pay all the principal of, any premium, if any, and
interest on, the debt securities of the series on the dates payments are due.
Modification of Indenture; Waiver
We and the trustee may change an indenture
without the consent of any holders with respect to specific matters, including:
| · | to fix any ambiguity, defect or inconsistency in the indenture; or |
| · | to change anything that does not materially adversely affect the interests of any holder of notes or any series. |
In addition, under the indentures, we and
the trustee may change the rights of holders of a series of notes with the written consent of the holders of at least a majority
in aggregate principal amount of the outstanding notes of each series that is affected. However, we and the trustee may only make
the following changes with the consent of each holder of any outstanding notes affected:
| · | extending the fixed maturity of the series of notes; |
| · | reducing the principal amount, the rate of interest or any premium payable upon the redemption of any notes; or |
| · | reducing the minimum percentage of notes, the holders of which are required to consent to any amendment. |
Information Concerning the Trustee
The trustee, other than during the occurrence
and continuance of an event of default under an indenture, undertakes to perform only those duties as are specifically set forth
in the applicable indenture. Upon an event of default under an indenture, the trustee must use the same degree of care and skill
as a prudent person would exercise or use in the conduct of his or her own affairs. Subject to this provision, the trustee is under
no obligation to exercise any of the powers given to it by the indentures at the request of any holder of notes unless it is offered
reasonable security and indemnity against the costs, expenses and liabilities that it might incur.
Payment and Paying Agents
Unless we otherwise indicate in the applicable
prospectus supplement, we will make payment of the interest on any notes on any interest payment date to the person in whose name
the notes, or one or more predecessor securities, are registered at the close of business on the regular record date for the interest
payment.
We will pay principal of and any premium
and interest on the notes of a particular series at the office of the paying agents designated by us, except that unless we otherwise
indicate in the applicable prospectus supplement, we will make interest payments by check which we will mail to the holder. Unless
we otherwise indicate in a prospectus supplement, we will designate the corporate trust office of the trustee as our sole paying
agent for payments with respect to notes of each series. We will name in the applicable prospectus supplement any other paying
agents that we initially designate for the notes of a particular series. We will maintain a paying agent in each place of payment
for the notes of a particular series.
All money we pay to a paying agent or the
trustee for the payment of the principal of or any premium or interest on any notes which remains unclaimed at the end of two years
after such principal, premium or interest has become due and payable will be repaid to us, and the holder of the security thereafter
may look only to us for payment thereof.
DESCRIPTION OF WARRANTS
We may issue warrants
to purchase ordinary shares and/or debt securities in one or more series together with other securities or separately, as described
in the applicable prospectus supplement. Below is a description of certain general terms and provisions of the warrants that we
may offer. Particular terms of the warrants will be described in the warrant agreements and the prospectus supplement to the warrants.
The applicable
prospectus supplement will contain, where applicable, the following terms of and other information relating to the warrants:
| · | the specific designation and aggregate number of, and the price at which we will issue, the warrants; |
| · | the currency or currency units in which the offering price, if any, and the exercise price are payable; |
| · | the designation, amount and terms of the securities purchasable upon exercise of the warrants; |
| · | if applicable, the exercise price for our ordinary shares and the number of ordinary shares to be received upon exercise of
the warrants; |
| · | if applicable, the exercise price for our debt securities, the amount of debt securities to be received upon exercise, and
a description of that series of debt securities; |
| · | the date on which the right to exercise the warrants will begin and the date on which that right will expire or, if you may
not continuously exercise the warrants throughout that period, the specific date or dates on which you may exercise the warrants; |
| · | if applicable, provisions for changes to or adjustments in the exercise price of the warrants; |
| · | whether the warrants will be issued in fully registered form or bearer form, in definitive or global form or in any combination
of these forms, although, in any case, the form of a warrant included in a unit will correspond to the form of the unit and of
any security included in that unit; |
| · | the identity of the warrant agent for the warrants and of any other depositaries, execution or paying agents, transfer agents,
registrars or other agents; |
| · | the proposed listing, if any, of the warrants or any securities purchasable upon exercise of the warrants on any securities
exchange; |
| · | if applicable, the date from and after which the warrants and the ordinary shares and/or debt securities will be separately
transferable; |
| · | if applicable, the minimum or maximum amount of the warrants that may be exercised at any one time; |
| · | information with respect to book-entry procedures, if any; |
| · | the anti-dilution provisions of the warrants, if any; |
| · | any redemption or call provisions; |
| · | whether the warrants are to be sold separately or with other securities as parts of units; and |
| · | any additional material terms of the warrants, including terms, procedures and limitations relating to the exchange and exercise
of the warrants. |
DESCRIPTION OF UNITS
We may issue units consisting of ordinary
shares, debt securities and/or warrants for the purchase of ordinary shares and/or debt securities in one or more series. In this
prospectus, we have summarized certain general features of the units. We urge you, however, to read the prospectus supplements
related to the series of units being offered, as well as the unit agreements that contain the terms of the units. We will file
as exhibits to an amendment to the registration statement of which this prospectus is a part, or will incorporate by reference
from a Form 6-K that we file with the SEC, as applicable, the form of unit agreement and any supplemental agreements that
describe the terms of the series of units we are offering before the issuance of the related series of units.
PLAN OF DISTRIBUTION
We may offer securities
under this prospectus from time to time pursuant to underwritten public offerings, negotiated transactions, block trades or a combination
of these methods. We may sell the securities (1) through underwriters or dealers, (2) through agents or (3) directly
to one or more purchasers, or through a combination of such methods. We may distribute the securities from time to time in one
or more transactions at:
| · | a fixed price or prices, which may be changed; |
| · | market prices prevailing at the time of sale; |
| · | prices related to the prevailing market prices; or |
We may directly
solicit offers to purchase the securities being offered by this prospectus. We may also designate agents to solicit offers to purchase
the securities from time to time. We will name in a prospectus supplement any underwriter or agent involved in the offer or sale
of the securities.
If we utilize a
dealer in the sale of the securities being offered by this prospectus, we will sell the securities to the dealer, as principal.
The dealer may then resell the securities to the public at varying prices to be determined by the dealer at the time of resale.
If we utilize an
underwriter in the sale of the securities being offered by this prospectus, we will execute an underwriting agreement with the
underwriter at the time of sale, and we will provide the name of any underwriter in the prospectus supplement which the underwriter
will use to make resales of the securities to the public. In connection with the sale of the securities, we, or the purchasers
of the securities for whom the underwriter may act as agent, may compensate the underwriter in the form of underwriting discounts
or commissions. The underwriter may sell the securities to or through dealers, and the underwriter may compensate those dealers
in the form of discounts, concessions or commissions.
With respect to
underwritten public offerings, negotiated transactions and block trades, we will provide in the applicable prospectus supplement
any compensation we pay to underwriters, dealers or agents in connection with the offering of the securities, and any discounts,
concessions or commissions allowed by underwriters to participating dealers. Underwriters, dealers and agents participating in
the distribution of the securities may be deemed to be underwriters within the meaning of the Securities Act of 1933, as amended,
or the Securities Act, and any discounts and commissions received by them and any profit realized by them on resale of the securities
may be deemed to be underwriting discounts and commissions. We may enter into agreements to indemnify underwriters, dealers and
agents against civil liabilities, including liabilities under the Securities Act, or to contribute to payments they may be required
to make in respect thereof.
Our ordinary shares
sold pursuant to the registration statement of which this prospectus is a part will be authorized for quotation and trading on
The NASDAQ Capital Market. The applicable prospectus supplement will contain information, where applicable, as to any other listing,
if any, on The NASDAQ Capital Market or any securities market or other securities exchange of the securities covered by the prospectus
supplement. To facilitate the offering of the securities, certain persons participating in the offering may engage in transactions
that stabilize, maintain or otherwise affect the price of the securities. This may include over-allotments or short sales of the
securities, which involve the sale by persons participating in the offering of more securities than we sold to them. In these circumstances,
these persons would cover such over-allotments or short positions by making purchases in the open market or by exercising their
over-allotment option. In addition, these persons may stabilize or maintain the price of the securities by bidding for or purchasing
the applicable security in the open market or by imposing penalty bids, whereby selling concessions allowed to dealers participating
in the offering may be reclaimed if the securities sold by them are repurchased in connection with stabilization transactions.
The effect of these transactions may be to stabilize or maintain the market price of the securities at a level above that which
might otherwise prevail in the open market. These transactions may be discontinued at any time.
Any underwriters,
dealers and agents may engage in other transactions with us, or perform other services for us, in the ordinary course of their
business.
LEGAL MATTERS
Certain legal matters with respect
to the legality of the issuance of the ordinary shares offered by this prospectus will be passed upon for us by Raved Magriso
Benkel & Co, Tel Aviv, Israel.
EXPERTS
The consolidated financial statements
of Rosetta Genomics Ltd. appearing in Rosetta Genomics Ltd. Report on Form 6-K as filed with the SEC on December 7, 2012, have
been audited by Kost Forer Gabbay & Kasierer (a Member of Ernst & Young Global), independent registered public accounting
firm, as set forth in their report thereon, and incorporated herein by reference. Such consolidated financial statements are incorporated
herein by reference in reliance upon such report given on the authority of such firm as experts in accounting and auditing. The
address of Kost Forer Gabbay & Kasierer is 3 Aminadav St., Tel-Aviv, Israel 67067.
EXPENSES
The following
are the estimated expenses related to the filing of the registration statement of which this prospectus forms a part, all of which
will be paid by us. In addition, we anticipate incurring additional expenses in the future in connection with the offering
of our securities pursuant to this prospectus. Any such additional expenses will be disclosed in a prospectus supplement.
| SEC registration fee | |
| $ 10, 230 | |
| FINRA review | |
| 11,750 | |
| Legal fees and expenses* | |
| 25,000 | |
| Accounting fees and expenses* | |
| 10,000 | |
| Miscellaneous* | |
| 3,020 | |
| Total* | |
$ | 60,000 | |
__________
*Estimated
INCORPORATION OF CERTAIN INFORMATION
BY REFERENCE
The SEC allows us to “incorporate
by reference” the information we file with it, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is considered to be part of this prospectus and information we
file later with the SEC will automatically update and supersede this information. The documents we are incorporating by reference
as of their respective dates of filing are:
| · | Annual Report on Form 20-F for the year ended December 31, 2011, filed on April 2, 2012 (File No. 001-33042), as amended by
Amendment No. 1 on Form 20-F/A to the Annual Report on Form 20-F for the year ended December 31, 2011, filed on May 1, 2012 (File
No. 001-33042); |
| · | Reports on Form 6-K filed on April 16, 2012, April 19, 2012, April 20, 2012, April 23, 2012, April 23, 2012, May 14, 2012,
May 15, 2012, May 16, 2012, May 17, 2012, May 17, 2012, May 24, 2012, May 25, 2012, May 25, 2012, May 31, 2012, June 6, 2012, June
13, 2012, June 19, 2012, June 22, 2012, June 25, 2012, June 26, 2012, July 16, 2012, July 24, 2012, July 25, 2012, August 3, 2012,
August 23, 2012, August 30, 2012 (SEC Accession No. 0001144204-12-048805), September 28, 2012, October 2, 2012, October 12, 2012,
October, 12, 2012, October 16, 2012, and December 7, 2012 (File Nos. 001-33042); and |
| · | the description of our ordinary shares contained in our Form 8-A filed on September 22, 2006 (File
No. 001-33042). |
All subsequent annual reports on Form 20-F
filed by us and all subsequent reports on Form 6-K filed by us that are identified by us as being incorporated by reference shall
be deemed to be incorporated by reference into this prospectus and deemed to be a part hereof after the date of this prospectus
but before the termination of the offering by this prospectus.
Any statement contained in a document incorporated
by reference herein shall be deemed to be modified or superseded for all purposes to the extent that a statement contained in this
prospectus, or in any other subsequently filed document which is also incorporated or deemed to be incorporated by reference, modifies
or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this prospectus.
You may request, orally or in writing, a
copy of these documents, which will be provided to you at no cost, by contacting:
Oded Biran Adv.
General Counsel
Rosetta Genomics Ltd.
10 Plaut Street, Science Park
Rehovot 76706 POB 4059
Israel
+972-73-222-0700
WHERE YOU CAN FIND ADDITIONAL
INFORMATION
This prospectus is part of a registration
statement on Form F-1 that we filed with the SEC relating to the securities offered by this prospectus, which includes additional
information. You should refer to the registration statement and its exhibits for additional information. Whenever we make reference
in this prospectus to any of our contracts, agreements or other documents, the references are not necessarily complete and you
should refer to the exhibits attached to the registration statement for copies of the actual contract, agreements or other document.
We are subject to the informational requirements
of the Exchange Act applicable to foreign private issuers. We, as a “foreign private issuer,” are exempt from the rules
under the Exchange Act prescribing certain disclosure and procedural requirements for proxy solicitations, and our officers, directors
and principal shareholders are exempt from the reporting and “short-swing” profit recovery provisions contained in
Section 16 of the Exchange Act, with respect to their purchases and sales of shares. In addition, we are not required to file annual,
quarterly and current reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities
are registered under the Exchange Act.
You may read and copy any materials we file
or furnish with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may also obtain
copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, N.E., Washington,
DC 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference Room. You can
review our SEC filings and the registration statement by accessing the SEC’s internet site at http://www.sec.gov.
We also maintain a website at www.rosettagenomics.com,
through which you can access our SEC filings. The information set forth on our website is not part of this prospectus.
ENFORCEABILITY OF CIVIL LIABILITIES
We are incorporated under the laws of the
State of Israel. Service of process upon us and upon our directors and officers and the Israeli experts named in this prospectus,
substantially all of whom reside outside the United States, may be difficult to obtain within the United States. Furthermore, because
substantially all of our assets and substantially all of our directors and officers are located outside the United States, any
judgment obtained in the United States against us or any of our directors and officers may not be collectible within the United
States.
We have been informed by our legal counsel
in Israel that it may be difficult to assert U.S. securities law claims in original actions instituted in Israel. Israeli courts
may refuse to hear a claim based on a violation of U.S. securities laws because Israel is not the most appropriate forum to bring
such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law
is applicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law must be proved as a fact,
which can be a time-consuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little
binding case law in Israel addressing these matters.
Subject to specified time limitations and
legal procedures, Israeli courts may enforce a U.S. judgment in a civil matter which, subject to certain exceptions, is non-appealable,
including judgments based upon the civil liability provisions of the Securities Act and the Exchange Act and including a monetary
or compensatory judgment in a non-civil matter, provided that:
| · | the judgment was rendered by a court which was, according to the laws of the state of the court, competent to render the judgment; |
| · | the judgment may no longer be appealed; |
| · | the obligation imposed by the judgment is enforceable according to the rules relating to the enforceability of judgments in
Israel and the substance of the judgment is not contrary to public policy; and |
| · | the judgment is executory in the state in which it was given. |
Notwithstanding the previous sentence, an
Israeli court will not declare a foreign civil judgment enforceable if:
| · | the judgment was given in a state whose laws do not provide for the enforcement of judgments of Israeli courts (subject to
exceptional cases); |
| · | the enforcement of the judgment is likely to prejudice the sovereignty or security of the State of Israel; |
| · | the judgment was obtained by fraud; |
| · | the possibility given to the defendant to bring its arguments and evidence before the court was not reasonable in the opinion
of the Israeli court; |
| · | the judgment was rendered by a court not competent to render it according to the laws of private international law as they
apply in Israel; |
| · | the judgment is contradictory to another judgment that was given in the same matter between the same parties and that is still
valid; or |
| · | at the time the action was brought in the foreign court, a lawsuit in the same matter and between the same parties was pending
before a court or tribunal in Israel. |
We have irrevocably appointed our wholly
owned U.S. subsidiary, Rosetta Genomics Inc., as our agent to receive service of process in any action against us in any U.S. federal
or state court arising out of this offering or any purchase or sale of securities in connection with this offering.
If a foreign judgment is enforced by an Israeli court, it generally
will be payable in Israeli currency, which can then be converted into non-Israeli currency and transferred out of Israel. The usual
practice in an action before an Israeli court to recover an amount in a non-Israeli currency is for the Israeli court to issue
a judgment for the equivalent amount in Israeli currency at the rate of exchange in force on the date of the judgment, but the
judgment debtor may make payment in foreign currency. Pending collection, the amount of the judgment of an Israeli court stated
in Israeli currency ordinarily will be linked to the Israeli consumer price index plus interest at the annual statutory rate set
by Israeli regulations prevailing at the time. Judgment creditors must bear the risk of unfavorable exchange rate fluctuations.
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to our directors, officers and controlling, we have been informed that in the
opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
Up to $3,600,000
Ordinary Shares
Prospectus Supplement
July 8, 2015
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