TIDMMEDG TIDMMEDU
RNS Number : 8940J
Medgenics Inc
13 August 2012
Press Release 13 August 2012
Medgenics Announces Second Quarter 2012 Financial Results
Medgenics, Inc. (NYSE Amex: MDGN and AIM: MEDU, MEDG) (the
"Company"), the developer of Biopump(TM), a novel technology for
the sustained production and delivery of therapeutic proteins in
patients using their own tissue, today announced financial results
for three and six months ended June 30, 2012, and the filing with
the U.S. Securities and Exchange Commission ("SEC") of the
Company's Quarterly Report on Form 10-Q. The Form 10-Q includes
unaudited consolidated financial statements containing the
information highlighted below, as well as additional information
regarding the Company. The Form 10-Q is available at www.sec.gov
and at www.medgenics.com.
Second Quarter Financial Results
Gross research and development ("R&D") expense for the
second quarter of 2012 increased to $1.64 million from $1.54
million for same period in 2011. Higher R&D expense is due to
an increase in the use of materials and sub-contractors in
connection with preparations for the Company's planned Phase II
EPODURE clinical trials in Israel and the U.S., preparations for
the trials of INFRADURE in Israel and an increase in R&D
personnel. Net R&D expense for the 2012 second quarter was
$1.18 million compared with net R&D expense of $1.04 million
for the prior year's second quarter.
General and administrative expense for the second quarter of
2012 was $2.77 million compared with $1.05 million for the second
quarter of 2011, reflecting higher legal and professional services
fees, increased activities in the U.S. and stock-based compensation
expenses related to shares granted to consultants and to the newly
appointed Chairman of the Board.
Financial expense for the second quarter of 2012 increased to
$2.97 million from $0.23 million for the same period in 2011,
mainly a result of changes in valuation of the warrant liability.
Financial income for the second quarter of 2012 increased to
$17,000from $4,000 in the same period of 2011.
The Company reported a net loss for the second quarter of 2012
of $6.91 million or $0.69 per share, compared with a net loss for
the second quarter of 2011 of $2.32 million or $0.26 per share.
"The past several months have been transformative for Medgenics
and featured a number of accomplishments delivering key milestones
in our 2012 plan, and enhancing Medgenics' ability to move forward
on strategic priorities," stated Andrew L. Pearlman, Ph.D., Chief
Executive Officer of Medgenics. "We substantially advanced our
clinical development program for EPODURE(TM) and INFRADURE(TM) in
both the U.S. and Israel, launched our first U.S. Biopump
processing center, expanded our management team with seasoned
professionals and strengthened our balance sheet to provide the
financial support to allow us to continue to execute to our plan.
These are greatly augmented by the addition of our new Chairman, Dr
Sol Barer, whose accomplishments and experience will significantly
help accelerate the company's efforts towards execution of our
strategic plan. We look forward to building on the momentum of the
first half of the year, particularly with important clinical
progress in the months to come."
Six Month Financial Results
Gross R&D expense for the six months ended June 30, 2012 was
$3.23 million, up from $2.72 million for the same period in 2011.
For the six months ended June 30, 2012, net R&D expense
decreased to $1.75million from $2.22 million for the comparable
prior-year period due to the participation by the Israeli Office of
the Chief Scientist of $1.49 million in the 2012 period compared
with $0.50 million for the 2011 period, which was partially offset
by higher gross R&D expenses as detailed above. General and
administrative expense for the first six months of 2012 was $4.13
million compared with $1.83 million for the first six months of
2011. The Company's net loss for the first six months of 2012 was
$9.66 million or $0.98 per share, compared with a net loss of $2.66
million or $0.37 per share for the same period of 2011.
Medgenics ended the second quarter of 2012 with $9.04 million in
cash and cash equivalents, compared with $5.00 million as of
December 31, 2011. For the six months ended June 30, 2012, the
Company used $4.34 million in net cash to fund operating
activities, compared with $3.00 million for the six months ended
June 30, 2011. In June 2012 the Company raised $9.50 million of
gross proceeds (approximately $8.40 million, net) in a Private
Placement.
About Medgenics
Medgenics is developing and commercializing Biopump(TM), a
proprietary tissue-based platform technology for the sustained
production and delivery of therapeutic proteins using the patient's
own skin biopsy for the treatment of a range of chronic diseases
including anemia, hepatitis and hemophilia, among others. Medgenics
believes this approach has multiple benefits compared with current
treatments, which include regular and costly injections of
therapeutic proteins.
Medgenics has three long-acting protein therapy products in
development based on this technology:
-- EPODURE(TM) to produce and deliver erythropoietin for many
months from a single administration, which has demonstrated
elevation and stabilization of hemoglobin levels in anemic patients
for periods of six months to more than 36 months in a Phase I/II
dose-ranging trial in Israel and has launched a Phase IIa trial in
dialysis patients in Israel. An Investigational New Drug
application has been cleared by the FDA to initiate a Phase IIb
study to evaluate the safety and efficacy of EPODURE in the
treatment of anemia in dialysis patients in the U.S.
-- INFRADURE(TM) for sustained production and delivery of
interferon-alpha for use in the treatment of hepatitis is awaiting
final approval of the Israeli Ministry of Health of two Phase I/II
trials in Israel in hepatitis C, slated to commence Q3 2012; and
which received Orphan Drug Designation from the FDA for the
treatment of hepatitis D.
-- HEMODURE(TM) for sustained production and delivery of
clotting Factor VIII therapy for the sustained prophylactic
treatment of hemophilia is in development.
Medgenics is focused on the development and manufacturing of its
innovative Biopumps, aiming to bring them to market via strategic
partnerships with major pharmaceutical and/or medical device
companies. In addition to treatments for anemia, hepatitis and
hemophilia, Medgenics plans to develop and/or out-license a
pipeline of future Biopump products targeting the large and rapidly
growing global protein therapy market, which is forecast to reach
$132 billion in 2013. Other potential applications for Biopumps
include multiple sclerosis, arthritis, pediatric growth hormone
deficiency, obesity and diabetes.
Forward-looking Statements
This release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, Section 21E
of the Securities Exchange Act of 1934 and as that term is defined
in the Private Securities Litigation Reform Act of 1995, which
include all statements other than statements of historical fact,
including (without limitation) those regarding the Company's
financial position, its development and business strategy, its
product candidates and the plans and objectives of management for
future operations. The Company intends that such forward-looking
statements be subject to the safe harbors created by such laws.
Forward-looking statements are sometimes identified by their use of
the terms and phrases such as "estimate," "project," "intend, "
"forecast," "anticipate," "plan," "planning, "expect," "believe,"
"will," "will likely," "should," "could," "would," "may" or the
negative of such terms and other comparable terminology. All such
forward-looking statements are based on current expectations and
are subject to risks and uncertainties. Should any of these risks
or uncertainties materialize, or should any of the Company's
assumptions prove incorrect, actual results may differ materially
from those included within these forward-looking statements.
Accordingly, no undue reliance should be placed on these
forward-looking statements, which speak only as of the date made.
The Company expressly disclaims any obligation or undertaking to
disseminate any updates or revisions to any forward-looking
statements contained herein to reflect any change in the Company's
expectations with regard thereto or any change in events,
conditions or circumstances on which any such statements are based.
As a result of these factors, the events described in the
forward-looking statements contained in this release may not
occur.
For further information, contact:
Medgenics, Inc. Phone: +972 4 902 8900
Dr. Andrew L. Pearlman
Andrew.pearlman@medgenics.com
LHA
Anne Marie Fields Phone: 212-838-3777
afields@lhai.com
@LHA_IR_PR
Abchurch Communications Phone: +44 207 398 7719
Adam Michael
Joanne Shears
Jamie Hooper
jamie.hooper@abchurch-group.com
SVS Securities plc (Joint Broker) Phone: +44 207 638 5600
Alex Mattey
Ian Callaway
Nomura Code Securities (NOMAD & Phone: +44 207 776 1200
Joint Broker)
Jonathan Senior/Giles Balleny
- Tables to Follow-
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
December
June 30, 31,
--------------------
2012 2011 2011
--------- --------- ---------
(Unaudited)
--------------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 9,040 $ 10,116 $ 4,995
Accounts receivable and prepaid
expenses 1,702 1,026 1,122
--------- --------- ---------
Total current assets 10,742 11,142 6,117
--------- --------- ---------
LONG-TERM ASSETS:
Restricted lease deposits 57 49 52
Severance pay fund 264 353 259
--------- --------- ---------
Total long-term assets 321 402 311
--------- --------- ---------
PROPERTY AND EQUIPMENT, NET 407 378 434
--------- --------- ---------
Total assets $ 11,470 $ 11,922 $ 6,862
========= ========= =========
The accompanying notes are an integral part of the interim
consolidated financial statements.
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
December
June 30, 31,
--------------------
2012 2011 2011
--------- --------- ---------
Unaudited
--------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables $ 917 $ 869 $ 903
Other accounts payable and accrued
expenses 1,249 1,272 1,156
---------
Total current liabilities 2,166 2,141 2,059
--------- --------- ---------
LONG-TERM LIABILITIES:
Accrued severance pay 1,387 1,146 1,328
Liability in respect of warrants 4,107 1,321 478
--------- --------- ---------
Total long-term liabilities 5,494 2,467 1,806
--------- --------- ---------
Total liabilities 7,660 4,608 3,865
--------- --------- ---------
STOCKHOLDERS' EQUITY:
Common stock - $0.0001 par value;
100,000,000 shares authorized;
11,746,251, 9,638,948 and 9,722,725
shares issued and outstanding at
June 30, 2012, June 30, 2011 and
December 31, 2011, respectively 1 1 1
Additional paid-in capital 62,972 51,383 52,501
Deficit accumulated during the
development stage (59,163) (44,070) (49,505)
--------- --------- ---------
Total stockholders' equity 3,810 7,314 2,997
--------- --------- ---------
Total liabilities and stockholders'
equity $ 11,470 $ 11,922 $ 6,862
========= ========= =========
The accompanying notes are an integral part of the interim
consolidated financial statements.
CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except share and per share data)
Period from
January 27,
Six months ended Three months ended 2000 (inception)
June 30, June 30, through
--------------------- ----------------------
2012 2011 2012 2011 June 30, 2012
--------- --------- ---------- --------- ----------------
Unaudited
---------------------------------------------------------------
Research and development expenses $ 3,231 $ 2,718 $ 1,639 $ 1,544 $ 33,673
Less - Participation by the Office of the Chief
Scientist (1,486) (503) (464) (503) (6,779)
U.S. Government grant - - - - (244)
Participation by third party - - - - (1,067)
--------- --------- ---------- --------- ----------------
Research and development expenses, net 1,745 2,215 1,175 1,041 25,583
General and administrative expenses 4,133 1,832 2,774 1,052 30,531
Other income:
Excess amount of participation in research and
development from third party - - - - (2,904)
--------- --------- ---------- --------- ----------------
Operating loss (5,878) (4,047) (3,949) (2,093) (53,210)
Financial expenses (3,773) (133) (2,972) (232) (7,053)
Financial income 1 1,521 17 4 755
--------- --------- ---------- --------- ----------------
Loss before taxes on income (9,650) (2,659) (6,904) (2,321) (59,508)
Taxes on income 8 2 8 2 84
--------- --------- ---------- --------- ----------------
Loss $ (9,658) $ (2,661) $ (6,912) $ (2,323) $ (59,592)
========= ========= ========== ========= ================
Basic and diluted loss per share $ (0.98) $ (0.37) $ (0.69) $ (0.26)
========= ========= ========== =========
Weighted average number of shares of Common
stock
used in computing basic and diluted loss per
share 9,893,072 7,212,074 10,032,760 9,033,672
========= ========= ========== =========
The accompanying notes are an integral part of the interim
consolidated financial statements.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
U.S. dollars in thousands (except share and per share data)
Deficit
accumulated
Additional during the Total
paid-in development stockholders'
Common stock capital stage equity (deficit)
-------------------- ------------ ------------- ------------------
Shares Amount
---------- --------
Balance as of December 31, 2010 5,295,531 $ 1 $ 34,334 $ (41,409) $ (7,074)
Issuance of Common stock at $4.54 per share
and warrants at $0.46 per share,
Net 2,624,100 (*) 10,389 10,389
Issuance of Common stock upon conversion of
debentures 1,407,898 (*) 5,577 5,577
Exercise of warrants in January through June
2011 311,419 (*) 872 - 872
Stock based compensation related to options
and warrants
granted to consultants and employees - - 211 - 211
Loss - - - (2,661) (2,661)
---------- -------- ------------ ------------- ------------------
Balance as of June 30, 2011 (Unaudited) 9,638,948 $ 1 $ 51,383 $ (44,070) $ 7,314
========== ======== ============ ============= ==================
(*) Represents an amount lower than $1.
The accompanying notes are an integral part of the interim
consolidated financial statements.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
U.S. dollars in thousands (except share and per share data)
Deficit
accumulated
Additional during the Total
paid-in development stockholders'
Common stock capital stage equity
--------------------- ------------ ------------- ---------------
Shares Amount
----------- --------
Balance as of December 31, 2011 9,722,725 $ 1 $ 52,501 $ (49,505) $ 2,997
Stock based compensation related to issuance
of restricted common stock, January 2012 35,000 (*) 55 - 55
Issuance of Common stock to consultants at
$4.84 and $8.79 per share, March and June
2012 30,000 (*) 204 - 204
Issuance of Common stock and warrants at $4.90
per unit, net, June 2012 1,944,734 (*) 8,407 - 8,407
Exercise of options and warrants, January
through June 2012 13,792 (*) 117 - 117
Stock based compensation related to options
and warrants
granted to consultants and employees - - 1,688 - 1,688
Loss - - - (9,658) (9,658)
----------- -------- ------------ ------------- ---------------
Balance as of June 30, 2012 (Unaudited) 11,746,251 $ 1 $ 62,972 $ (59,163) $ 3,810
=========== ======== ============ ============= ===============
(*) Represents an amount lower than $1.
The accompanying notes are an integral part of the interim
consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Period from
January 27,
2000 (inception)
Six months ended through
June 30, June 30,
--------------------
2012 2011 2012
--------- --------- -----------------
Unaudited
---------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Loss $ (9,658) $ (2,661) $ (59,592)
Adjustments to reconcile loss to net cash
used in operating activities:
Depreciation 72 36 1,153
Loss from disposal of property and equipment - - 330
Issuance of shares as consideration for
providing security for letter of credit - - 16
Stock based compensation related to options,
warrants and restricted shares granted
to employees, directors and consultants 1,743 211 8,905
Interest and amortization of beneficial
conversion feature of convertible note - 759
Change in fair value of convertible debentures
and warrants 3,717 (1,479) 5,359
Accrued severance pay, net 54 24 1,123
Exchange differences on a restricted lease
deposit - (1) 3
Exchange differences on a long term loan - - 3
Increase in trade payables 219 126 1,726
Decrease (increase) in account receivable
and prepaid expenses (580) 629 (1,702)
Increase in other accounts payable and
accrued expenses 93 118 1,796
Net cash used in operating activities (4,340) (2,997) (40,121)
--------- --------- -----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (45) (171) (2,064)
Proceeds from disposal of property and
equipment - - 173
Increase in restricted lease deposit (5) (2) (60)
--------- --------- -----------------
Net cash used in investing activities $ (50) $ (173) $ (1,951)
--------- --------- -----------------
The accompanying notes are an integral part of the interim
consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Period from
January 27,
2000 (inception)
Six months ended through
June 30, June 30,
------------------
2012 2011 2012
-------- -------- -----------------
Unaudited
-------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of shares and warrants,
net $ 8,407 $ 10,389 $ 42,908
Proceeds from exercise of options and warrants,
net 28 38 1,039
Repayment of a long-term loan - - (73)
Proceeds from long term loan - - 70
Issuance of a convertible debenture and
warrants - - 7,168
Net cash provided by financing activities 8,435 10,427 51,112
-------- -------- -----------------
Increase in cash and cash equivalents 4,045 7,257 9,040
Balance of cash and cash equivalents at
the beginning of the period 4,995 2,859 -
-------- -------- -----------------
Balance of cash and cash equivalents at
the end of the period $ 9,040 $ 10,116 $ 9,040
======== ======== =================
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ - $ 49 $ 242
======== ======== =================
Taxes $ 31 $ - $ 129
======== ======== =================
Supplemental disclosure of non-cash flow
information:
Issuance expenses paid with shares $ - $ - $ 310
======== ======== =================
Issuance of Common stock upon conversion
of a convertible debentures $ - $ 5,577 $ 8,430
======== ======== =================
Issuance of Common stock and warrants to
consultants $ 205 $ - $ 1,356
======== ======== =================
Classification of liability in respect
of warrants into equity due to the exercise
of warrants $ 88 $ 834 $ 1,219
======== ======== =================
The accompanying notes are an integral part of the interim
consolidated financial statements.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 1:- GENERAL
a. Medgenics, Inc. (the "Company") was incorporated in January
2000 in Delaware. The Company has a wholly-owned subsidiary,
Medgenics Medical Israel Ltd. (formerly Biogenics Ltd.) (the
"Subsidiary"), which was incorporated in Israel in March 2000. The
Company and the Subsidiary are engaged in the research and
development of products in the field of biotechnology and
associated medical equipment and are thus considered development
stage companies as defined inAccounting Standards Codification
("ASC") topic number 915, "Development Stage Entities" ("ASC
915").
On December 4, 2007 the Company's Common stock was admitted for
trading on the AIM market of the London Stock Exchange.
On April 13, 2011 the Company completed an Initial Public
Offering ("IPO") of its Common stock on the NYSE MKT (formerly NYSE
Amex), raising $10,389 in net proceeds.
b. The Company and the Subsidiary are in the development stage.
As reflected in the accompanying financial statements, the Company
incurred a loss for the six month period ended June 30, 2012 of
$9,658 and had a negative cash flow from operating activities of
$4,340 during the six month period ended June 30, 2012. The
accumulated deficit as of June 30, 2012 is $59,163. The Company and
the Subsidiary have not yet generated revenues from product sale.
The Company previously generated income from partnering on
development programs and expects to continue to expand its
partnering activity. Management's plans also include seeking
additional investments and commercial agreements to continue the
operations of the Company and the Subsidiary.
However, there is no assurance that the Company will be
successful in its efforts to raise the necessary capital and/or
reach such commercial agreements to continue its planned research
and development activities. The Company believes that the net
proceeds of the private placement (see note 3(b)2), plus Company's
existing cash and cash equivalents, should be sufficient to meet
its operating and capital requirements into the first quarter of
2013. These conditions raise substantial doubt about the Company's
ability to continue as a going concern. The consolidated financial
statements do not include any adjustments with respect to the
carrying amounts of assets and liabilities and their classification
that might result from the outcome of this uncertainty.
c. In April 2012, the Subsidiary received approval for an
additional Research and Development program from the Office of the
Chief Scientist in Israel ("OCS") for the period October 2011
through September 2012. The approval allows for a grant of up to
approximately $2,100 based on research and development expenses,
not funded by others, of up to $3,900. To date, $100 has been
received.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited interim financial statements of
Medgenics, Inc., a development stage company, have been prepared in
accordance with accounting principles generally accepted in the
United States of America and the rules of the Securities and
Exchange Commission ("SEC") and should be read in conjunction with
the audited financial statements and notes thereto included in the
Annual Report on Form 10-K for the year ended December 31, 2011
(2011 Form 10-K) as filed with the SEC. In the opinion of
management, all adjustments, consisting of normal recurring
adjustments, necessary for a fair presentation of financial
position and the results of operations for the interim periods
presented have been reflected herein. The results of operations for
interim periods are not necessarily indicative of the results to be
expected for the full year. Notes to the financial statements that
would substantially duplicate the disclosure contained in the
audited financial statements for the most recent fiscal year as
reported in the 2011 Form 10-K, have been omitted.
Impact of recently issued accounting standards
a. In May 2011, the FASB issued ASU 2011-04, "Fair Value
Measurement (Topic 820): Amendments to Achieve Common Fair Value
Measurement and Disclosure Requirements in U.S. GAAP and IFRSs".
The new guidance does not extend the use of fair value accounting,
but provides guidance on how it should be applied where its use is
already required or permitted by other standards within GAAP or
International Financial Reporting Standards ("IFRS"). The new
guidance also changes the wording used to describe many
requirements in GAAP for measuring fair value and for disclosing
information about fair value measurements and it clarifies the
FASB's intent about the application of existing fair value
measurements. The Company adopted the provisions of this new
guidance on January 1, 2012. The Company does not expect the
adoption of the new provisions to have a material impact on its
consolidated financial position, results of operations or cash
flows.
b. On June 16, 2011, the Financial Accounting Standards Board
issued ASU No. 2011-05, "Presentation of Comprehensive Income".
This standard eliminates the current option to report other
comprehensive income and its components in the statement of changes
in shareholders' equity and provides for either a single continuous
statement or two separate statements. Both options require
companies to present the components of net income and total net
income, the components of other comprehensive income along with a
total for other comprehensive income. Companies are also required
to present reclassification adjustments for items that are
reclassified from other comprehensive income to net income within
these statements. This standard will be applied retrospectively for
fiscal years beginning after December 15, 2011 with early adoption
permitted. The disclosure requirements of this standard will not
have a material effect on the Company's results of operations or
financial position as the amendment impacts presentation only.
NOTE 3:- STOCKHOLDERS' EQUITY
a. In March 2012, the Company's Board of Directors approved an
amendment to the stock incentive plan increasing the number of
shares of Common stock authorized for issuance thereunder to a
total of 2,478,571 shares of Common stock, subject to stockholder
approval. The Company's stockholders approved the amendment at the
Company's annual meeting of stockholders on April 3, 2012.
b. Issuance of shares, stock options and warrants to investors
1. In January and February 2012, unexercised warrants held by
several investors to purchase a total of 34,804 shares of Common
stock expired.
2. In June 2012, the Company completed a private placement
transaction in which the Company issued 1,944,734 units with each
unit consisting of one share of the Company's Common stock and a
warrant to purchase 0.75 of one share of Common stock. The warrants
to purchase 1,458,550 of Common stock were issued with an exercise
price of $8.34 per share, will become exercisable on December 15,
2012 (which, if all were exercised in full, would result in the
issuance of 1,458,576 shares of Common stock due to the rounding of
fractional shares) and will expire on June 18, 2017. In addition,
warrants to purchase 194,473 shares of Common stock having an
exercise price of $9.17 per share were issued to the placement
agent, will become exercisable on December 18, 2012 and will expire
on June 18, 2017. Each unit was sold for a purchase price of $4.90
for total gross proceeds of $9,529 or approximately $8,407 in net
proceeds after deducting private placement fees of $953 and other
offering costs of $169.
.
3. In May and June 2012, three investors exercised warrants to
purchase 46,711 shares of Common stock at an exercise price of
$5.37 per share using the cashless exercise method. Using this
cashless exercise method, the investors were issued 4,168
shares.
4. Subsequent to the balance sheet date, in July 2012, 14
investors exercised warrants to purchase 132,860 shares of Common
stock at exercise prices ranging from $4.99 to $5.57 per share
using the cashless exercise method. Using this cashless exercise
method, the investors were issued 84,110 shares. An additional
three investors exercised warrants to purchase 6,142 shares of
Common stock at exercise prices ranging from $4.54 to $5.57 per
share or an aggregate exercise price of $29. In addition, in July
and August 2012, 47,500 publicly traded warrants were exercised at
an exercise price of $6.00 per share. The cash consideration
received was $285.
c. Issuance of shares, stock options and warrants to employees and directors
1. In January 2012, the Company granted 15,000 options and 7,000
shares of restricted Common stock to each of 5 non-executive
Directors of the Company. These shares of Common stock are
restricted in that they may not be disposed of and are not entitled
to dividends. 50% of these shares were vested the day after the
grant and 50% will vest one year from the grant date. All of the
options are for a term of 10 years, vest in three equal
installments and have an exercise price of $2.66. These options and
restricted Common stock were granted under the stock incentive
plan.
2. In April 2012, the Company granted to the Company's employees
47,254 options exercisable at a price of $5.13 per share. The
options have a 10 year term and vest in four equal annual tranches.
The options were granted under the stock incentive plan.
3. In May 2012, unexercised options held by an employee to
purchase 42,783 shares of Common stock expired.
4. In June 2012, the Chief Executive Officer of the Company
transferred by gift 16,200 warrants with an exercise price of $2.49
per share to four individuals who are not immediate family.
5. In June 2012, a Director of the Company exercised options to
purchase 4,286 shares of Common stock at an exercise price of $6.55
per share or an aggregate exercise price of $28.
6. In June 2012, an employee exercised options to purchase 6,723
shares of Common stock at an exercise price of $5.47 per share
using the cashless exercise method. The employee was issued 2,433
shares as a result of the option exercise.
7. In June 2012, the Company granted the Chairman of the Board
of the Company 900,000 options exercisable at a price of $10.80 per
share. The options have a 5 year term. 300,000 options vested
immediately upon approval of the listing application by the NYSE
MKT and half of the remaining 600,000 options will vest on each of
June 30, 2013 and June 30, 2014. The total compensation of $3,975
will be recognized over the vesting period. The Company recorded an
expense in the amount of $1,325 during the current period. These
options were granted outside of the stock incentive plan.
8. Subsequent to the balance sheet date, in July 2012, three
employees exercised options to purchase 32,793 shares of Common
stock at exercise prices ranging from $5.42 to $8.19 per share
using the cashless exercise method. Using this cashless exercise
method, the employees were issued 16,857 shares.
9. Subsequent to the balance sheet date, in July 2012, the
Company granted to an employee 20,000 options exercisable at a
price of $14.50 per share. The options have a 10 year term and vest
in four equal annual tranches. The options were granted under the
stock incentive plan.
10. In December 2010, the Company granted the Executive Chairman
of the Board of the Company 57,142 shares of restricted Common
stock in compensation for his services in his new role as the
Executive Chairman of the Board of the Company. These shares of
Common stock are restricted in that they may not be disposed of and
are not entitled to dividends. These restrictions will be removed
in relation to 14,285 shares of Common stock on each of October 18,
2012 and October 18, 2013 and the final 28,572 shares of Common
stock on October 18, 2014. The value of these restricted shares of
Common stock, $285, was based on the fair value at the grant date
and is being recognized as an expense using the straight line
method. The Company recorded expenses in the amount of $37 in the
six months ended June 30, 2012.
A summary of the Company's activity for restricted shares
granted to employees and directors is as follows:
Six months ended
June 30, 2012
--------------------------
Restricted shares Outstanding Exercisable
----------------------------- ------------ ------------
Number of restricted shares
as of December 31, 2011 57,142 -
Granted 35,000 17,500
------------ ------------
Number of restricted shares
as of June 30, 2012 92,142 17,500
============ ============
11. A summary of the Company's activity for options and warrants
granted to employees and directors is as follows:
Six months ended June 30, 2012
----------------------------------------------------------
Weighted
Number Weighted average
of average remaining Aggregate
options exercise contractual intrinsic
and warrants price terms (years) value price
-------------- ---------- --------------- -------------
Outstanding at December
31, 2011 2,078,788 $ 4.17
Granted 1,022,254 9.94
Expired (42,783) 4.10
Exercised (11,009) 5.89
Given by the CEO to Investors (16,200) 2.49
-------------- ----------
Outstanding at June 30,
2012 3,031,050 $ 6.12 4.90 $ 14,171
============== ========== =============== =============
Exercisable at June 30,
2012 1,859,788 $ 5.01 3.58 $ 10,773
============== ========== =============== =============
Vested and expected to
vest at
June 30, 2012 2,972,487 $ 6.09 4.85 $ 14,001
============== ========== =============== =============
As of June 30, 2012, there was $713 of total unrecognized
compensation cost related to non-vested share-based compensation
arrangements granted to employees. That cost is expected to be
recognized over a weighted-average period of 2.8 years.
The aggregate intrinsic value represents the total intrinsic
value (the difference between the Company's Common share fair value
as of June 30, 2012 and the exercise price, multiplied by the
number of in-the-money options) that would have been received by
the option holders had all option holders exercised their options
on June 30, 2012.
Calculation of aggregate intrinsic value is based on the share
price of the Company's Common stock as of June 30, 2012 ($10.80 per
share, as reported on the NYSE MKT (formerly NYSE Amex)).
d. Issuance of shares, stock options and warrants to consultants
1. In March 2012, the Company issued 15,000 shares of Common
stock to a consultant. Total compensation, measured as the grant
date fair market value of the stock, amounted to $73 and was
recorded as an operating expense in the statement of
operations.
2. In April 2012, the Company granted options to purchase 15,280
shares of Common stock at an exercise price of $5.13 per share to a
consultant. The options have a 10 year term and vest in three equal
annual tranches. The options were granted under the stock incentive
plan.
3. In May 2012, two consultants exercised warrants to purchase
4,937 shares of Common stock at an exercise price of $5.37 per
share using the cashless exercise method. Using this cashless
exercise method, the consultants were issued 505 shares.
4. In June 2012, the Company granted options to purchase 25,000
shares of Common stock at an exercise price of $6.86 per share to
each of two consultants. The options have a 10 year term and vest
in three equal annual tranches. The options were granted under the
stock incentive plan. In addition, in June 2012, the Company issued
194,473 warrants to the placement agent for its June 2012 private
placement. See note 3(b)2.
5. In June 2012, the Company issued 15,000 shares of Common
stock to a consultant. Total compensation, measured as the grant
date fair market value of the stock, amounted to $131 and was
recorded as an operating expense in the statement of
operations.
6. In June 2012, a consultant exercised warrants to purchase
1,188 shares of Common stock at an exercise price of $5.32 per
share and 143 shares of Common stock at an exercise price of $5.19
per share using the cashless exercise method. Using this cashless
exercise method, the consultant was issued 363 shares. In addition,
a consultant exercised warrants to purchase 4,675 shares of Common
stock at an exercise price of $4.99 per share using the cashless
exercise method. Using this cashless exercise method, the
consultant was issued 2,037 shares.
7. Subsequent to the balance sheet date, in July 2012, the
Company granted options to purchase 5,646 shares of Common stock at
an exercise price of $14.50 per share to each of two consultants.
The options have a 10 year term and vest in three equal annual
tranches. The options were granted under the stock incentive
plan.
8. Subsequent to the balance sheet date, in July and August
2012, seven consultants exercised warrants to purchase 13,786
shares of Common stock at exercise prices ranging from $5.19 to
$5.32 per share using the cashless exercise method. Using this
cashless exercise method, the consultants were issued 8,523 shares.
In addition, in August 2012, a consultant exercised warrants to
purchase 75,000 shares of Common stock at an exercise price of
$4.80 per share or an aggregate exercise price of $360.
9. A summary of the Company's activity for warrants and options
granted to consultants under the stock incentive plan is as
follows:
Six months ended June 30, 2012
----------------------------------------------------------
Weighted
Weighted average
Number of average remaining Aggregate
options exercise contractual intrinsic
and warrants price terms (years) value price
-------------- ---------- --------------- -------------
Outstanding at December 31,
2011 540,338 $ 5.49
Granted 259,753 8.49
Exercised (10,943) 5.20
-------------- ----------
Outstanding at June 30, 2012 789,148 $ 6.47 4.23 $ 3,413
============== ========== =============== =============
Exercisable at June 30, 2012 472,096 $ 5.30 2.72 $ 2,598
============== ========== =============== =============
As of June 30, 2012, there was $51 of total unrecognized
compensation cost related to non-vested share-based compensation
arrangements granted to consultants under the Company's stock
incentive plan. That cost is expected to be recognized over a
weighted-average period of 1.4 years.
Calculation of aggregate intrinsic value is based on the share
price of the Company's Common stock as of June 30, 2012 ($10.80 per
share, as reported on the NYSE MKT (formerly NYSE Amex)).
e. Compensation expenses
Compensation expense related to shares, warrants and options
granted to employees, directors and consultants was recorded in the
Statement of Operations in the following line items:
Six months ended Three months ended
June 30, June 30,
------------------- ---------------------
2012 2011 2012 2011
---------- ------- ----------- --------
Research and development
expenses $ 98 $ 55 $ 72 $ 25
General and administrative
expenses 1,849 156 1,626 98
---------- ------- ----------- --------
$ 1,947 $ 211 $ 1,698 $ 123
========== ======= =========== ========
f. Summary of options and warrants:
A summary of all the options and warrants outstanding as of June
30, 2012 is presented in the following table:
As of June 30, 2012
--------------------------------------------------------------
Weighted Average
Exercise Remaining
Price Options Options Contractual
per Share and Warrants and Warrants Terms (in
Options / Warrants ($) Outstanding Exercisable years)
-------------------------- ----------- -------------- -------------- -----------------
Options:
Granted to Employees and
Directors 2.49 182,806 182,806 3.8
2.66 75,000 - 9.5
3.14 244,857 35,000 9.4
3.64 40,000 - 9.0
3.86 11,429 - 9.2
5.13 47,254 - 9.8
5.47 42,813 42,813 1.0
6.55 47,142 12,857 8.5
7.35 332,046 332,046 0.4
8.19 218,713 65,275 8.2
10.80 900,000 300,000 5.0
-------------- --------------
2,142,060 970,797
-------------- --------------
Granted to Consultants 4.20 19,354 12,903 2.4
5.13 15,280 - 9.8
5.47 19,354 19,354 1.3
6.65 38,136 12,712 8.4
6.86 50,000 - 10.0
7.35 46,045 46,045 0.4
8.19 38,136 12,712 8.2
-------------- --------------
262,305 103,726
-------------- --------------
Total Options 2,368,365 1,074,523
-------------- --------------
As of June 30, 2012
--------------------------------------------------------------
Weighted Average
Exercise Remaining
Price Options Options Contractual
per Share and Warrants and Warrants Terms (in
Options / Warrants ($) Outstanding Exercisable years)
---------------------------- ----------- -------------- -------------- -----------------
Warrants:
Granted to Employees and
Directors 2.49 888,990 888,990 3.8
-------------- --------------
Granted to Consultants 3.19 11,370 11,370 3.2
4.01 50,000 50,000 4.0
4.80 150,000 150,000 4.1
4.99 6,635 6,635 3.8
5.19 16,579 16,579 0.4
5.32 31,637 31,637 0.2
5.57 102,149 102,149 1.1
9.17 194,473 - 4.9
-------------- --------------
562,843 368,370
-------------- --------------
Granted to Investors 0.0002 35,922 35,922 3.8
2.49 16,200 16,200 3.8
4.58 428,571 428,571 3.2
4.99 73,383 73,383 3.8
5.32 119,421 119,421 0.3
5.57 50,721 50,721 0.4
6.00 2,829,000 2,829,000 3.8
8.34 1,458,550 - 4.9
-------------- --------------
5,011,768 3,553,218
-------------- --------------
Total Warrants 6,463,601 4,810,578
-------------- --------------
Total Options and Warrants 8,831,966 5,885,101
============== ==============
NOTE 4:- FAIR VALUE MEASURMENTS
The Company adopted the provision of ASC 820, "Fair Value
Measurements and Disclosures" ("ASC 820") on January 1, 2008. ASC
820 defines fair value as the price that would be received from
selling an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date.
When determining the fair value measurements for assets and
liabilities required to be recorded at fair value, the Company
considers the principal or most advantageous market in which it
would transact and consider assumptions that market participants
would use when pricing the asset or liability, such as inherent
risk, transfer restrictions and risk of nonperformance.
ASC 820 also establishes a fair value hierarchy that requires an
entity to maximize the use of observable inputs and minimize the
use of unobservable inputs when measuring fair value. A financial
instrument's categorization within the fair value hierarchy is
based on the lowest level of input that is significant to the fair
value measurement. ASC 820 establishes three levels of inputs that
may be used to measure fair value:
Level 1 - quoted prices in active markets for identical assets or liabilities;
Level 2 - inputs other than Level 1 that are observable, either
directly or indirectly, such as quoted prices in active markets for
similar assets or liabilities, quoted prices for identical or
similar assets or liabilities in markets that are not active, or
other inputs that are observable or can be corroborated by
observable market data for substantially the full term of the
assets or liabilities; or
Level 3 - unobservable inputs that are supported by little or no
market activity and that are significant to the fair value of the
assets or liabilities.
The Company classified certain warrants issued to investors
through the years 2006 and 2007 and warrants issued to the
purchasers of the 2010 Convertible Debentures as a liability and
measure them at fair value according to ASC 815-40-15-7I.
The changes in level 3 liabilities measured at fair value on a
recurring basis:
Fair value
of liability
in respect of
warrants
--------------
Balance as of December 31, 2010 $ 3,670
Change in fair value of the liability in
respect of warrants (3,192)
--------------
Balance as of December 31, 2011 478
Change in fair value of the liability in
respect of warrants 3,629
--------------
Balance as of June 30, 2012 (unaudited) $ 4,107
==============
-Ends-
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR PJMBTMBIBBJT
Medgenics(Regs) (LSE:MEDG)
Historical Stock Chart
From Jun 2024 to Jul 2024
Medgenics(Regs) (LSE:MEDG)
Historical Stock Chart
From Jul 2023 to Jul 2024
