Delaware
|
20-8133057
|
(State or other jurisdiction of
|
(I.R.S. Employer
|
incorporation or organization)
|
Identification No.)
|
Large accelerated filer
¨
|
Accelerated filer
¨
|
Non-accelerated filer
¨
(Do not check if a smaller reporting company)
|
Smaller reporting company
x
|
Page
Number
|
||
PART I
|
||
Item 1. Financial Statements
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3
|
|
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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33
|
|
Item 3. Quantitative and Qualitative Disclosures About Market Risk
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38
|
|
Item 4. Controls and Procedures
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38
|
|
PART II
|
||
Item 1. Legal Proceedings
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39
|
|
Item 1A. Risk Factors
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39
|
|
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
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39
|
|
Item 5. Other Information
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39
|
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Item 6. Exhibits
|
40
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Page
|
||
Consolidated Balance Sheets
|
5
|
|
Consolidated Statements of Operations
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6
|
|
Statements of Changes in Stockholders' Equity (Deficiency)
|
7 – 13
|
|
Consolidated Statements of Cash Flows
|
14 - 15
|
|
Notes to Consolidated Financial Statements
|
16 - 32
|
June 30,
|
December 31,
|
|||||||
2 0 1 1
|
2 0 1 0
|
|||||||
Unaudited
|
Audited
|
|||||||
ASSETS
|
||||||||
Current Assets:
|
||||||||
Cash and cash equivalents
|
$ | 2,899 | $ | 93 | ||||
Prepaid expenses
|
49 | 59 | ||||||
Other receivable
|
186 | 427 | ||||||
Total current assets
|
3,134 | 579 | ||||||
Long-Term Investments:
|
||||||||
Prepaid expenses
|
9 | 1 | ||||||
Severance pay fund
|
94 | 90 | ||||||
Total long-term investments
|
103 | 91 | ||||||
Property and Equipment, Net
|
380 | 419 | ||||||
Total assets
|
$ | 3,617 | $ | 1,089 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
|
||||||||
Current Liabilities:
|
||||||||
Trade payables
|
$ | 296 | $ | 307 | ||||
Accrued expenses
|
595 | 508 | ||||||
Other accounts payable
|
385 | 471 | ||||||
Short-term convertible note
|
- | 137 | ||||||
Total current liabilities
|
1,276 | 1,423 | ||||||
Accrued Severance Pay
|
94 | 125 | ||||||
Total liabilities
|
1,370 | 1,548 | ||||||
Stockholders' Equity (Deficiency):
|
||||||||
Stock capital: (Note 8)
|
6 | 5 | ||||||
Common stock of $0.00005 par value - Authorized: 800,000,000 shares at June 30, 2011 and December 31, 2010; Issued and outstanding: 122,573,928 and 95,832,978 shares at June 30, 2011 and December 31, 2010, respectively.
|
||||||||
Additional paid-in-capital
|
44,203 | 39,696 | ||||||
Deficit accumulated during the development stage
|
(41,962 | ) | (40,160 | ) | ||||
Total stockholders' equity (deficiency)
|
2,247 | (459 | ) | |||||
Total liabilities and stockholders' equity
|
$ | 3,617 | $ | 1,089 |
Six months
|
Three months
|
Period from
September 22,
2000 (inception
date) through
|
||||||||||||||||||
ended June 30,
|
ended June 30,
|
June 30,
|
||||||||||||||||||
2 0 1 1
|
2 0 1 0
|
2 0 1 1
|
2 0 1 0
|
2 0 1 1
|
||||||||||||||||
Unaudited
|
Unaudited
|
Unaudited
|
||||||||||||||||||
Operating costs and expenses:
|
||||||||||||||||||||
Research and development, net
|
$ | 856 | $ | 587 | $ | 586 | $ | 348 | $ | 23,586 | ||||||||||
General and administrative
|
1,087 | 638 | 829 | 268 | 15,885 | |||||||||||||||
Total operating costs and expenses
|
1,943 | 1,225 | 1,415 | 616 | 39,471 | |||||||||||||||
Financial (income) expenses, net
|
(14 | ) | 4 | (191 | ) | (2 | ) | 2,382 | ||||||||||||
Other income
|
132
|
-
|
132
|
-
|
132
|
|||||||||||||||
Total loss before income taxes
|
1,797 | 1,229 | 1,092 | 614 | 41,721 | |||||||||||||||
Taxes on income
|
5 | - | 5 | - | 77 | |||||||||||||||
Loss from continuing operations
|
1,802 | 1,229 | 1,097 | 614 | 41,798 | |||||||||||||||
Net loss from discontinued operations
|
- | - | - | - | 164 | |||||||||||||||
Net loss
|
1,802 | 1,229 | 1,097 | 614 | 41,962 | |||||||||||||||
Basic and diluted net loss per share from continuing operations
|
0.02 | 0.01 | 0.01 | 0.01 | ||||||||||||||||
Weighted average number of shares outstanding used in computing basic and diluted net loss per share
|
115,108,731 | 85,552,899 | 121,253,983 | 88,609,663 |
Deficit
|
||||||||||||||||||||||||
accumulated
|
Total
|
|||||||||||||||||||||||
Additional
|
Deferred
|
during the
|
stockholders'
|
|||||||||||||||||||||
Common stock
|
paid-in
|
Stock - based
|
development
|
equity
|
||||||||||||||||||||
Number
|
Amount
|
capital
|
compensation
|
stage
|
(deficiency)
|
|||||||||||||||||||
Balance as of September 22, 2000 (date of inception)
|
- | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||
Stock issued on September 22, 2000 for cash at $0.00188 per share
|
8,500,000 | 1 | 16 | - | - | 17 | ||||||||||||||||||
Stock issued on March 31, 2001 for cash at $0.0375 per share
|
1,600,000 | * - | 60 | - | - | 60 | ||||||||||||||||||
Contribution of capital
|
- | - | 8 | - | - | 8 | ||||||||||||||||||
Net loss
|
- | - | - | - | (17 | ) | (17 | ) | ||||||||||||||||
Balance as of March 31, 2001
|
10,100,000 | 1 | 84 | - | (17 | ) | 68 | |||||||||||||||||
Contribution of capital
|
- | - | 11 | - | - | 11 | ||||||||||||||||||
Net loss
|
- | - | - | - | (26 | ) | (26 | ) | ||||||||||||||||
Balance as of March 31, 2002
|
10,100,000 | 1 | 95 | - | (43 | ) | 53 | |||||||||||||||||
Contribution of capital
|
- | - | 15 | - | - | 15 | ||||||||||||||||||
Net loss
|
- | - | - | - | (47 | ) | (47 | ) | ||||||||||||||||
Balance as of March 31, 2003
|
10,100,000 | 1 | 110 | - | (90 | ) | 21 | |||||||||||||||||
2-for-1 stock split
|
10,100,000 | * - | - | - | - | - | ||||||||||||||||||
Stock issued on August 31, 2003 to purchase mineral option at $0.065 per share
|
100,000 | * - | 6 | - | - | 6 | ||||||||||||||||||
Cancellation of shares granted to Company's President
|
(10,062,000 | ) | * - | * - | - | - | - | |||||||||||||||||
Contribution of capital
|
- | * - | 15 | - | - | 15 | ||||||||||||||||||
Net loss
|
- | - | - | - | (73 | ) | (73 | ) | ||||||||||||||||
Balance as of March 31, 2004
|
10,238,000 | $ | 1 | $ | 131 | $ | - | $ | (163 | ) | $ | (31 | ) |
Deficit
accumulated
|
Total
|
|||||||||||||||||||||||
Additional
|
Deferred
|
during the
|
stockholders'
|
|||||||||||||||||||||
Common stock
|
paid-in
|
Stock - based
|
development
|
equity
|
||||||||||||||||||||
Number
|
Amount
|
capital
|
compensation
|
stage
|
(deficiency)
|
|||||||||||||||||||
Balance as of March 31, 2004
|
10,238,000 | $ | 1 | $ | 131 | $ | - | $ | (163 | ) | $ | (31 | ) | |||||||||||
Stock issued on June 24, 2004 for private placement at $0.01 per share, net of $25,000 issuance expenses
|
8,510,000 | * - | 60 | - | - | 60 | ||||||||||||||||||
Contribution capital
|
- | - | 7 | - | - | 7 | ||||||||||||||||||
Stock issued in 2004 for private placement at $0.75 per unit
|
1,894,808 | * - | 1,418 | - | - | 1,418 | ||||||||||||||||||
Cancellation of shares granted to service providers
|
(1,800,000 | ) | * - | - | - | - | ||||||||||||||||||
Deferred stock-based compensation related to options granted to employees
|
- | - | 5,979 | (5,979 | ) | - | - | |||||||||||||||||
Amortization of deferred stock-based compensation related to shares and options granted to employees
|
- | - | - | 584 | - | 584 | ||||||||||||||||||
Compensation related to shares and options granted to service providers
|
2,025,000 | * - | 17,506 | - | - | 17,506 | ||||||||||||||||||
Net loss
|
- | - | - | - | (18,840 | ) | (18,840 | ) | ||||||||||||||||
Balance as of March 31, 2005
|
20,867,808 | $ | 1 | $ | 25,101 | $ | (5,395 | ) | $ | (19,003 | ) | $ | 704 |
Deficit
accumulated
|
Total
|
|||||||||||||||||||||||
Additional
|
Deferred
|
during the
|
stockholders'
|
|||||||||||||||||||||
Common stock
|
paid-in
|
Stock - based
|
development
|
equity
|
||||||||||||||||||||
Number
|
Amount
|
capital
|
compensation
|
stage
|
(deficiency)
|
|||||||||||||||||||
Balance as of March 31, 2005
|
20,867,808 | $ | 1 | $ | 25,101 | $ | (5,395 | ) | $ | (19,003 | ) | $ | 704 | |||||||||||
Stock issued on May 12, 2005 for private placement at $0.8 per share
|
186,875 | * - | 149 | - | - | 149 | ||||||||||||||||||
Stock issued on July 27, 2005 for private placement at $0.6 per share
|
165,000 | * - | 99 | - | - | 99 | ||||||||||||||||||
Stock issued on September 30, 2005 for private placement at $0.8 per share
|
312,500 | * - | 225 | - | - | 225 | ||||||||||||||||||
Stock issued on December 7, 2005 for private placement at $0.8 per share
|
187,500 | * - | 135 | - | - | 135 | ||||||||||||||||||
Forfeiture of options granted to employees
|
- | - | (3,363 | ) | 3,363 | - | - | |||||||||||||||||
Deferred stock-based compensation related to shares and options granted to directors and employees
|
200,000 | * - | 486 | (486 | ) | - | - | |||||||||||||||||
Amortization of deferred stock-based compensation related to options and shares granted to employees and directors
|
- | - | 51 | 1,123 | - | 1,174 | ||||||||||||||||||
Stock-based compensation related to options and shares granted to service providers
|
934,904 | * - | 662 | - | - | 662 | ||||||||||||||||||
Reclassification due to application of ASC 815-40-25 (formerly EITF 00-19)
|
- | - | (7,906 | ) | (7,906 | ) | ||||||||||||||||||
Beneficial conversion feature related to a convertible bridge loan
|
- | - | 164 | - | - | 164 | ||||||||||||||||||
Net loss
|
- | - | - | - | (3,317 | ) | (3,317 | ) | ||||||||||||||||
Balance as of March 31, 2006
|
22,854,587 | $ | 1 | $ | 15,803 | $ | (1,395 | ) | $ | (22,320 | ) | $ | (7,911 | ) | ||||||||||
Elimination of deferred stock compensation due to implementation of ASC 718-10 (formerly SFAS 123(R))
|
- | - | (1,395 | ) | 1,395 | - | - | |||||||||||||||||
Stock-based compensation related to shares and options granted to directors and employees
|
200,000 | * - | 1,168 | - | - | 1,168 | ||||||||||||||||||
Reclassification due to application of ASC 815-40-25 (formerly EITF 00-19)
|
- | - | 7,191 | - | - | 7,191 | ||||||||||||||||||
Stock-based compensation related to options and shares granted to service providers
|
1,147,225 | - | 453 | - | - | 453 | ||||||||||||||||||
Warrants issued to convertible note holder
|
- | - | 11 | - | - | 11 | ||||||||||||||||||
Warrants issued to loan holder
|
- | - | 110 | - | - | 110 | ||||||||||||||||||
Beneficial conversion feature related to convertible bridge loans
|
- | - | 1,086 | - | - | 1,086 | ||||||||||||||||||
Net loss
|
- | - | - | - | (3,924 | ) | (3,924 | ) | ||||||||||||||||
Balance as of December 31, 2006
|
24,201,812 | $ | 1 | $ | 24,427 | $ | - | $ | (26,244 | ) | $ | (1,816 | ) |
Deficit
accumulated
|
Total
|
|||||||||||||||||||||||
Additional
|
Deferred
|
during the
|
stockholders'
|
|||||||||||||||||||||
Common stock
|
paid-in
|
Stock - based
|
development
|
equity
|
||||||||||||||||||||
Number
|
Capital
|
compensation
|
stage
|
stage
|
(deficiency)
|
|||||||||||||||||||
Balance as of December 31, 2006
|
24,201,812 | $ | 1 | $ | 24,427 | $ | - | $ | (26,244 | ) | $ | (1,816 | ) | |||||||||||
Stock-based compensation related to options and shares granted to service providers
|
544,095 | 1,446 | - | - | 1,446 | |||||||||||||||||||
Warrants issued to convertible note holder
|
- | - | 109 | - | - | 109 | ||||||||||||||||||
Stock-based compensation related to shares and options granted to directors and employees
|
200,000 | * - | 1,232 | - | - | 1,232 | ||||||||||||||||||
Beneficial conversion feature related to convertible loans
|
- | - | 407 | - | - | 407 | ||||||||||||||||||
Conversion of convertible loans
|
725,881 | * - | 224 | - | - | 224 | ||||||||||||||||||
Exercise of warrants
|
3,832,621 | * - | 214 | - | - | 214 | ||||||||||||||||||
Stock issued for private placement at $0.1818 per unit, net of finder's fee
|
11,500,000 | 1 | 1,999 | - | - | 2,000 | ||||||||||||||||||
Net loss
|
- | - | - | - | (6,244 | ) | (6,244 | ) | ||||||||||||||||
Balance as of December 31, 2007
|
41,004,409 | $ | 2 | $ | 30,058 | $ | - | $ | (32,488 | ) | $ | (2,428 | ) | |||||||||||
Stock-based compensation related to options and stock granted to service providers
|
90,000 | - | 33 | - | - | 33 | ||||||||||||||||||
Stock-based compensation related to stock and options granted to directors and employees
|
- | - | 731 | - | - | 731 | ||||||||||||||||||
Conversion of convertible loans
|
3,644,610 | * - | 1,276 | - | - | 1,276 | ||||||||||||||||||
Exercise of warrants
|
1,860,000 | * - | - | - | - | - | ||||||||||||||||||
Exercise of options
|
17,399 | * - | 3 | - | - | 3 | ||||||||||||||||||
Stock issued for private placement at $0.1818 per unit, net of finder's fee
|
8,625,000 | 1 | 1,499 | - | - | 1,500 | ||||||||||||||||||
Subscription of shares for private placement at $0.1818 per unit
|
- | - | 281 | - | - | 281 | ||||||||||||||||||
Net loss
|
- | - | - | - | (3,472 | ) | (3,472 | ) | ||||||||||||||||
Balance as of December 31, 2008
|
55,241,418 | $ | 3 | $ | 33,881 | $ | - | $ | (35,960 | ) | $ | (2,076 | ) | |||||||||||
Common stock
|
Additional paid-in
|
Deferred
stock
- based
|
Deficit
accumulated
during the
development
|
Total
stockholders'
equity
|
||||||||||||||||||||
Number
|
Amount
|
capital
|
compensation
|
stage
|
(deficiency)
|
|||||||||||||||||||
Balance as of December 31, 2008
|
55,241,418 | $ | 3 | $ | 33,881 | $ | - | $ | (35,960 | ) | $ | (2,076 | ) | |||||||||||
Stock-based compensation related to options and stock granted to service providers
|
5,284,284 | ( | *) | 775 | - | - | 775 | |||||||||||||||||
Stock-based compensation related to stock and options granted to directors and employees
|
- | - | 409 | - | - | 409 | ||||||||||||||||||
Conversion of convertible loans
|
2,500,000 | ( | *) | 200 | - | - | 200 | |||||||||||||||||
Exercise of warrants
|
3,366,783 | ( | *) | - | - | - | - | |||||||||||||||||
Stock issued for amendment of private placement
|
9,916,667 | 1 | - | - | - | 1 | ||||||||||||||||||
Subscription of shares
|
- | - | 729 | - | - | 729 | ||||||||||||||||||
Net loss
|
- | - | - | - | $ | (1,781 | ) | (1,781 | ) | |||||||||||||||
Balance as of December 31, 2009
|
76,309,152 | $ | 4 | $ | 35,994 | $ | - | $ | (37,741 | ) | $ | (1,743 | ) | |||||||||||
Deficit
|
||||||||||||||||||||||||
accumulated
|
Total
|
|||||||||||||||||||||||
Common stock
|
Additional
paid-in
|
Deferred
Stock - based
|
during the
development
|
stockholders'
equity
|
||||||||||||||||||||
Number
|
Amount
|
capital
|
compensation
|
stage
|
(deficiency)
|
|||||||||||||||||||
Balance as of December 31, 2009
|
76,309,152 | $ | 4 | $ | 35,994 | - | $ | (37,741 | ) | $ | (1,743 | ) | ||||||||||||
Stock-based compensation related to options and stock granted to service providers
|
443,333 | * - | 96 | - | - | 96 | ||||||||||||||||||
Stock-based compensation related to stock and options granted to directors and employees
|
466,667 | * - | 388 | - | - | 388 | ||||||||||||||||||
Stock issued for amendment of private placement
|
7,250,000 | 1 | 1,750 | - | - | 1,751 | ||||||||||||||||||
Conversion of convertible note
|
402,385 | * - | 135 | - | - | 135 | ||||||||||||||||||
Conversion of convertible loans
|
1,016,109 | * - | 189 | - | - | 189 | ||||||||||||||||||
Issuance of shares
|
2,475,000 | 400 | 400 | |||||||||||||||||||||
Exercise of options
|
1,540,885 | * - | 77 | - | - | 77 | ||||||||||||||||||
Exercise of warrants
|
3,929,446 | * - | 11 | - | - | 11 | ||||||||||||||||||
Subscription of shares for private placement at $0.12 per unit
|
455 | - | - | 455 | ||||||||||||||||||||
Conversion of trade payable to stock
|
201 | 201 | ||||||||||||||||||||||
Issuance of shares on account of previously subscribed shares
|
2,000,001 | * - | - | - | - | - | ||||||||||||||||||
Net loss
|
- | - | - | - | (2,419 | ) | (2,419 | ) | ||||||||||||||||
Balance as of December 31, 2010
|
95,832,978 | $ | 5 | $ | 39,696 | $ | - | $ | (40,160 | ) | $ | (459 | ) |
Deficit
|
||||||||||||||||||||||||
accumulated
|
Total
|
|||||||||||||||||||||||
Additional
|
Deferred
|
during the
|
stockholders'
|
|||||||||||||||||||||
Common stock
|
paid-in
|
Stock - based
|
development
|
equity
|
||||||||||||||||||||
Number
|
Amount
|
capital
|
compensation
|
stage
|
(deficiency)
|
|||||||||||||||||||
Balance as of December 31, 2010
|
95,832,978 | $ | 5 | $ | 39,696 | $ | - | $ | (40,160 | ) | $ | (459 | ) | |||||||||||
Stock-based compensation related to options and stock granted to service providers
|
490,000 | - | 222 | - | - | 222 | ||||||||||||||||||
Stock-based compensation related to stock and options granted to directors and employees
|
238,333 | - | 443 | - | - | 443 | ||||||||||||||||||
Conversion of convertible note
|
445,617 | - | 137 | - | - | 137 | ||||||||||||||||||
Exercise of options , net
|
906,068 | - | 80 | - | - | 80 | ||||||||||||||||||
Stock issued for private placement
|
14,160,933 | 1 | 3,601 | - | - | 3,602 | ||||||||||||||||||
Issuance of shares on account of previously
|
||||||||||||||||||||||||
subscribed shares
|
10,499,999 | - | 24 | - | - | 24 | ||||||||||||||||||
Net loss
|
- | - | - | - | (1,802 | ) | (1,802 | ) | ||||||||||||||||
Balance as of June 30, 2011
|
122,573,928 | $ | 6 | 44,203 | $ | - | $ | (41,962 | ) | $ | 2,247 | |||||||||||||
Six months
|
Period from
September 22,
2000
(inception
date) through
|
|||||||||||
ended June 30,
|
June 30,
|
|||||||||||
2 0 1 1
|
2 0 1 0
|
2 0 1 1
|
||||||||||
Unaudited
|
Unaudited
|
|||||||||||
Cash flows from operating activities:
|
||||||||||||
Net loss
|
$ | (1,802 | ) | $ | (1,229 | ) | $ | (41,962 | ) | |||
Less - loss for the period from discontinued operations
|
- | - | 164 | |||||||||
Adjustments to reconcile net loss to net cash used in operating activities:
|
- | - | ||||||||||
Depreciation and amortization of deferred charges
|
76 | 84 | 924 | |||||||||
Severance pay, net
|
35 | )) | 2 | - | ||||||||
Accrued interest on loans
|
- | - | 448 | |||||||||
Stock-based compensation related to options granted to employees
|
443 | 183 | 6,129 | |||||||||
Amortization of discount on short-term loans
|
- | - | 1,864 | |||||||||
Change in fair value of options and warrants
|
- | - | (795 | ) | ||||||||
Expenses related to shares and options granted to service providers
|
222 | 101 | 21,259 | |||||||||
Increase (decrease) in trade payables and convertible loans
|
(11 | ) | (33 | ) | 769 | |||||||
Increase (decrease) in other accounts payable and accrued expenses
|
1 | (122 | ) | 1,462 | ||||||||
Decrease (increase) in other receivable and prepaid expenses
|
251 | (84 | ) | (235 | ) | |||||||
Liability from shareholders
|
- | (25 | ) | - | ||||||||
Erosion of restricted cash
|
- | - | (6 | ) | ||||||||
Net cash used in continuing operating activities
|
(855 | ) | (1,123 | ) | (9,979 | ) | ||||||
Net cash used in discontinued operating activities
|
- | - | (23 | ) | ||||||||
Total net cash used in operating activities
|
$ | (855 | ) | $ | (1,123 | ) | (10,002 | ) | ||||
Cash flows from investing activities:
|
||||||||||||
Purchase of property and equipment
|
(37 | ) | - | (1,122 | ) | |||||||
Restricted cash
|
- | - | 6 | |||||||||
Investment in lease deposit
|
(8 | ) | (9 | ) | ||||||||
Net cash used in continuing investing activities
|
(45 | ) | - | (1,125 | ) | |||||||
Net cash used in discontinued investing activities
|
- | - | (16 | ) | ||||||||
Total net cash used in investing activities
|
(45 | ) | - | (1,141 | ) | |||||||
Six months
|
Period from
September 22,
2000 (inception
date) through
|
|||||||||||
ended June 30,
|
June 30,
|
|||||||||||
2 0 1 1
|
2 0 1 0
|
2 0 1 1
|
||||||||||
Unaudited
|
Unaudited
|
|||||||||||
Cash flows from financing activities:
|
||||||||||||
Proceeds from issuance of Common stock, net
|
$ | 3,626 | $ | 1,800 | $ | 12,343 | ||||||
Proceeds from loans, notes and issuance of warrants, net
|
- | - | 2,061 | |||||||||
Credit from bank
|
- | (45 | ) | - | ||||||||
Proceeds from exercise of warrants and options
|
80 | 92 | 196 | |||||||||
Repayment of short-term loans
|
- | - | (601 | ) | ||||||||
Net cash provided by continuing financing activities
|
3,706 | 1,847 | 13,999 | |||||||||
Net cash provided by discontinued financing activities
|
- | - | 43 | |||||||||
Total net cash provided by financing activities
|
3,706 | 1,847 | 14,042 | |||||||||
Increase in cash and cash equivalents
|
2,806 | 724 | 2,899 | |||||||||
Cash and cash equivalents at the beginning of the period
|
93 | 1 | - | |||||||||
Cash and cash equivalents at end of the period
|
$ | 2,899 | $ | 725 | $ | 2,899 | ||||||
Non-cash financing activities:
|
||||||||||||
Conversion of trade payable to Common Stock
|
137 | 324 | ||||||||||
Conversion of other accounts payable to Common Stock
|
24 | - | ||||||||||
NOTE 1 -
|
GENERAL
|
A.
|
Brainstorm Cell Therapeutics Inc. (formerly: Golden Hand Resources Inc.) ("Company") was incorporated in the State of Washington on September 22, 2000.
|
B
.
|
On May 21, 2004, the former major stockholders of the Company entered into a purchase agreement with a group of private investors, who purchased from the former major stockholders 6,880,000 shares of the then issued and outstanding 10,238,000 shares of Common Stock.
|
C.
|
On July 8, 2004, the Company entered into a licensing agreement with Ramot of Tel Aviv University Ltd. ("Ramot"), an Israeli corporation, to acquire a license certain stem cell technology (see Note 3). Subsequent to this agreement, the Company decided to focus on the development of novel cell therapies for neurodegenerative diseases, particularly Parkinson's disease, based on the acquired technology and research to be conducted and funded by the Company.
|
D.
|
On November 22, 2004, the Company changed its name from Golden Hand Resources Inc. to Brainstorm Cell Therapeutics Inc. to better reflect its new line of business in the development of novel cell therapies for neurodegenerative diseases. The Company owns all operational property and equipment.
|
E.
|
On October 25, 2004, the Company formed a wholly-owned subsidiary in Israel, Brainstorm Cell Therapeutics Ltd. ("BCT").
|
F.
|
On September 17, 2006, the Company's changed its fiscal year-end from March 31 to December 31.
|
G.
|
In December 2006, the Company changed its state of incorporation from Washington to Delaware.
|
H
.
|
Since inception, the Company has devoted substantially all of its efforts to research and development, recruiting management and technical staff, acquiring assets and raising capital. In addition, the Company has not generated revenues. Accordingly, the Company is considered to be in the development stage, as defined in Statement of Financial Accounting Standards No. 7, "Accounting and reporting by development Stage Enterprises" ASC 915-10 (formerly "SFAS" 7).
|
I.
|
In October 2010, the Israeli Ministry of Health granted clearance for a Phase I/II clinical trial using the Company’s autologous NurOwn™ stem cell therapy in patients with ALS, subject to some additional process specifications as well as completion of the sterility validation study for tests performed.
|
J
.
|
In February 2011, the U.S. Food and Drug Administration (FDA) granted orphan drug designation to the Company’s NurOwn™ autologous adult stem cell product candidate for the treatment of amyotrophic lateral sclerosis (ALS).
|
NOTE 1 -
|
GENERAL (Cont.)
|
NOTE 2 -
|
SIGNIFICANT ACCOUNTING POLICIES
|
NOTE 3
-
|
UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|
NOTE 4 -
|
RESEARCH AND LICENSE AGREEMENT
|
NOTE 4
|
-
|
RESEARCH AND LICENSE AGREEMENT (Cont.)
|
|
a)
|
Ramot released the Company from its obligation to fund the extended research period in the total amount of $1,140. Therefore, the Company reversed an expense in 2009, equal to $760, from its research and development expenses that were previously expensed.
|
|
b)
|
Past due amounts of $240 for the initial research period plus interest of $32 owed by the Company to Ramot were converted into 1,120,000 shares of Common Stock on December 30, 2009. Ramot was required to deposit the shares with a broker and only sell the shares in the open market after 185 days from the issuance date.
|
|
c)
|
In the event that the total proceeds generated by sales of the shares on December 31, 2010, together with the March 31, 2010 payment, are less than $240 on or prior to December 31, 2010, then on such date the Company would be required to pay to Ramot the difference between the proceeds that Ramot has received from sales of the shares up to such date together with the September Payment (if any) that has been transferred to Ramot up to such date, and $240. Related compensation in the amount of $51 was recorded as research and development expenses.
|
NOTE 5
|
-
|
CONSULTING AGREEMENTS
|
|
A.
|
On July 8, 2004, the Company entered into consulting agreements with each of Prof. Eldad Melamed and Dr. Daniel Offen (together, the "Consultants"), under which the Consultants provide the Company scientific and medical consulting services in consideration for a monthly payment of $6 each. In addition, the Company granted each of the Consultants, a fully vested warrant to purchase 1,097,215 shares of Common Stock at an exercise price of $0.01 per share. The warrants issued pursuant to the agreements were issued to the Consultants effective as of November 4, 2004. Each of the warrants was exercisable for a seven-year period beginning on November 4, 2005. As of June 2011, all the above warrants had been exercised.
|
|
B.
|
On December 16, 2010, the Company granted to the Consultants 1,100,000 shares of the Company's Common Stock for services rendered through December 31, 2010. Related compensation in the amount of $220 is recorded as research and development expense.
|
|
C
.
|
On June 27, 2011, the Company granted to one of the Consultants 400,000 shares of Common Stock of the Company for services rendered through December 31, 2009 in the amount of $192.
|
NOTE 5
|
-
|
CONSULTING AGREEMENTS (Cont.)
|
|
E.
|
As of June 30, 2011, the Company had a total liability of $57 for services rendered by the Consultants under the abovementioned agreements.
|
NOTE 6
|
-
|
SHORT-TERM CONVERTIBLE NOTE
|
NOTE 7
|
-
|
SHORT-TERM LOANS
|
NOTE 8
|
-
|
STOCK CAPITAL
|
|
A.
|
The rights of Common Stock are as follows:
|
NOTE 8
|
-
|
STOCK CAPITAL (Cont.)
|
|
B.
|
Issuance of shares warrants and options:
|
|
1.
|
Private placements:
|
|
a)
|
On June 24, 2004, the Company issued to investors 8,510,000 shares of Common Stock for total proceeds of $60 (net of $25 issuance expenses).
|
|
b)
|
On February 23, 2005, the Company completed a private placement for the sale of 1,894,808 units for total proceeds of $1,418. Each unit consists of one share of Common Stock and a three-year warrant to purchase one share of Common Stock at $2.50 per share. This private placement was consummated in three tranches which closed in October 2004, November 2004 and February 2005.
|
|
c)
|
On May 12, 2005, the Company issued to an investor 186,875 shares of Common Stock at a price of $0.8 per share for total proceeds of $149.
|
|
d)
|
On July 27, 2005, the Company issued to investors 165,000 shares of Common Stock at a price of $0.6 per share for total proceeds of $99.
|
|
e)
|
On August 11, 2005, the Company signed a private placement agreement with investors for the sale of up to 1,250,000 units at a price of $0.8 per unit. Each unit consists of one share of Common Stock and one warrant to purchase one share of Common Stock at $1.00 per share. The warrants are exercisable for a period of three years from issuance. On March 31, 2005, the Company sold 312,500 units for total net proceeds of $225. On December 7, 2005, the Company sold 187,500 units for total net proceeds of $135.
|
|
f)
|
On July 2, 2007, the Company entered into an investment agreement, pursuant to which the Company agreed to sell up to 27,500,000 shares of Common Stock, for an aggregate subscription price of up to $5 million and warrants to purchase up to 30,250,000 shares of Common Stock. Separate closings of the purchase and sale of the shares and the warrants were originally scheduled to take place as follows:
|
Purchase date
|
Purchase price
|
Number of
subscription
shares
|
Number of
warrant
shares
|
|||||||||
August 30, 2007
|
$1,250 (includes $250 paid
as a convertible loan)
|
6,875,000 | 7,562,500 | |||||||||
November 15, 2007
|
$ | 750 | 4,125,000 | 4,537,500 | ||||||||
February 15, 2008
|
$ | 750 | 4,125,000 | 4,537,500 | ||||||||
May 15, 2008
|
$ | 750 | 4,125,000 | 4,537,500 | ||||||||
July 30, 2008
|
$ | 750 | 4,125,000 | 4,537,500 | ||||||||
November 15, 2008
|
$ | 750 | 4,125,000 | 4,537,500 |
|
(a)
|
The investor shall invest the remaining amount of the original investment agreement at price per share of $0.12 in monthly installments of not less than $50 starting August 1, 2009. The investor may accelerate such payments in its discretion.
|
NOTE 8
|
-
|
STOCK CAPITAL (Cont.)
|
B.
|
Issuance of shares warrants and options: (Cont.)
|
|
1.
|
Private placements: (Cont.)
|
|
f)
|
(Cont.)
|
|
(b)
|
The exercise price of the last 10,083,334 warrants was reduced from an exercise price of $0.36 per share to $0.29 per share.
|
|
(c)
|
All warrants expire on November 5, 2013 instead of November 5, 2011.
|
|
(d)
|
The price per share of the investment agreement decreased from $0.1818 to $0.12, therefore the Company adjusted the number of Shares of Common Stock issuable pursuant the investment agreement retroactively and issued to the investor on October 28, 2009 an additional 9,916,667 shares of Common Stock for past investment.
|
|
(e)
|
The investor has the right to cease payments in the event that the price per share as of the closing on five consecutive trading days shall decrease to $0.05.
|
|
g)
|
In January 2010, the Company issued 1,250,000 units to a private investor for total proceeds of $250. Each unit consists of one share of Common Stock and a two-year warrant to purchase one share of Common Stock at $0.50 per share.
|
|
h)
|
In February 2010, the Company issued 6,000,000 shares of Common Stock to three investors (2,000,000 to each investor) and warrants to purchase an aggregate of 3,000,000 shares of Common Stock (1,000,000 to each investor) with an exercise price of $0.5 for aggregate proceeds of $1,500 ($500 each) through February 17, 2012.
|
|
i)
|
On February 7, 2011, the Company issued 833,333 shares of Common Stock, at a price of $0.3 per share, and a warrant to purchase 641,026 shares of the Company's Common Stock at an exercise price of $0.39 per share for one year for total proceeds of $250.
|
NOTE 8
|
-
|
STOCK CAPITAL (Cont.)
|
|
B.
|
Issuance of shares warrants and options: (Cont.)
|
|
1.
|
Private placements: (Cont.)
|
|
j)
|
On February 23, 2011, the Company entered into an investment agreement, pursuant to which the Company sold 12,815,000 shares of Common Stock, for an aggregate subscription price of $3.6 million and warrants to purchase up to 19,222,500 shares of Common Stock as follows: warrant to purchase 12,815,000 shares of Common Stock at $0.5 for two years, and warrants to purchase 6,407,500 shares of Common Stock at $0.28 for one year.
|
|
2.
|
Share-based compensation to employees and to directors:
|
|
a)
|
Options to employees and directors:
|
NOTE 8
|
-
|
STOCK CAPITAL (Cont.)
|
|
B.
|
Issuance of shares, warrants and options: (Cont.)
|
|
2.
|
Share-based compensation to employees and to directors: (Cont.)
|
|
a)
|
Options to employees and directors: (Cont.)
|
NOTE 8
|
-
|
STOCK CAPITAL (Cont.)
|
|
B.
|
Issuance of shares, warrants and options: (Cont.)
|
|
2.
|
Share-based compensation to employees and to directors: (Cont.)
|
|
a)
|
Options to employees and directors: (Cont.)
|
|
·
|
An option for the purchase of 166,666 shares of Common Stock at an exercise price equal to $0.00005 per share to Mr. Israeli; and
|
|
·
|
An option for the purchase of 33,334 shares of Common Stock at an exercise price equal to $0.00005 per share to Hadasit,
|
NOTE 8
|
-
|
STOCK CAPITAL (Cont.)
|
|
B.
|
Issuance of shares, warrants and options: (Cont.)
|
|
2.
|
Share-based compensation to employees and to directors: (Cont.)
|
|
a)
|
Options to employees and directors: (Cont.)
|
For the period ended
June 30, 2011
|
||||||||||||
Amount of
options
|
Weighted
average
exercise
price
|
Aggregate
intrinsic
value
|
||||||||||
$
|
$
|
|||||||||||
Outstanding at beginning of period
|
6,893,024 | 0.183 | - | |||||||||
Granted
|
1,251,665 | 0.148 | ||||||||||
Exercised
|
(618,823 | ) | 0.159 | |||||||||
Cancelled
|
(1,849,268 | ) | 0.159 | |||||||||
Outstanding at end of period
|
5,676,598 | 0.166 | 941,323 | |||||||||
Vested and expected-to-vest at end of period
|
3,989,932 | 0.147 | 585,487 |
NOTE 8
|
-
|
STOCK CAPITAL (Cont.)
|
|
B.
|
Issuance of shares, warrants and options: (Cont.)
|
|
2.
|
Share-based compensation to employees and to directors: (Cont.)
|
|
b)
|
Restricted shares to directors:
|
NOTE 8
|
-
|
STOCK CAPITAL (Cont.)
|
|
B.
|
Issuance of shares, warrants and options: (Cont.)
|
|
3.
|
Shares and warrants to investors and service providers:
|
|
a)
|
Warrants to investors and service providers and investors:
|
Issuance date
|
Number of
warrants
issued
|
Exercised
|
Forfeited
|
Outstanding
|
Exercise
Price $ |
Warrants
exercisable
|
Exercisable through
|
|||||||||||||||||||||
November 2004
|
12,800,845 | 10,723,197 | 151,803 | 1,925,845 | 0.01 | 1,925,845 |
November 2012
|
|||||||||||||||||||||
December 2004
|
1,800,000 | 1,800,000 | - | 0.00005 | — | - | ||||||||||||||||||||||
February 2005
|
1,894,808 | 1,894,808 | - | 2.5 | - | - | ||||||||||||||||||||||
May 2005
|
47,500 | 47,500 | - | 1.62 | - | - | ||||||||||||||||||||||
June 2005
|
30,000 | 30,000 | 0.75 | 30,000 |
June 2015
|
|||||||||||||||||||||||
August 2005
|
70,000 | 70,000 | - | 0.15 | - | - | ||||||||||||||||||||||
September 2005
|
3,000 | 3,000 | - | 0.15 | - | - | ||||||||||||||||||||||
September 2005
|
36,000 | 36,000 | - | 0.75 | - | - | ||||||||||||||||||||||
September-December 2005
|
500,000 | 500,000 | - | 1 | - | - | ||||||||||||||||||||||
December 2005
|
20,000 | 20,000 | - | 0.15 | - | - | ||||||||||||||||||||||
December 2005
|
457,163 | 457,163 | 0.15 | 457,163 |
December 2015
|
|||||||||||||||||||||||
February 2006
|
230,000 | 230,000 | 0.65 | 230,000 |
February 2016
|
|||||||||||||||||||||||
February 2006
|
40,000 | 40,000 | - | 1.5 | - | |||||||||||||||||||||||
February 2006
|
8,000 | 8,000 | - | 0.15 | - | |||||||||||||||||||||||
February 2006
|
189,000 | 97,696 | 91,304 | - | 0. 5 | - | - | |||||||||||||||||||||
May 2006
|
50,000 | 50,000 | 0.0005 | 50,000 |
May 2016
|
|||||||||||||||||||||||
May -December 2006
|
48,000 | 48,000 | 0.35 | 48,000 |
May - December 2011
|
|||||||||||||||||||||||
May -December 2006
|
48,000 | 48,000 | 0.75 | 48,000 |
May - December 2011
|
|||||||||||||||||||||||
May 2006
|
200,000 | 200,000 | - | 1 | - |
May 2011
|
||||||||||||||||||||||
June 2006
|
24,000 | 24,000 | - | 0.15 | - |
June 2011
|
||||||||||||||||||||||
May 2006
|
19,355 | 19,355 | - | 0.15 | - |
May 2011
|
||||||||||||||||||||||
October 2006
|
630,000 | 630,000 | - | 0.3 | - | - | ||||||||||||||||||||||
December 2006
|
200,000 | 200,000 | - | 0.45 | - | - | ||||||||||||||||||||||
March 2007
|
200,000 | 200,000 | 0.47 | 200,000 |
March 2012
|
|||||||||||||||||||||||
March 2007
|
500,000 | 500,000 | 0.47 | 458,333 |
March 2017
|
|||||||||||||||||||||||
March 2007
|
50,000 | 50,000 | - | 0.15 | - | - | ||||||||||||||||||||||
March 2007
|
15,000 | 15,000 | 0.15 | 15,000 |
February 2012
|
|||||||||||||||||||||||
February 2007
|
50,000 | 50,000 | - | 0.45 | - | - | ||||||||||||||||||||||
March 2007
|
225,000 | 225,000 | - | 0.45 | - | - | ||||||||||||||||||||||
March 2007
|
50,000 | 50,000 | 0.45 | 50,000 |
March 2012
|
|||||||||||||||||||||||
April 2007
|
33,300 | 33,300 | - | 0.45 | - | - | ||||||||||||||||||||||
May 2007
|
250,000 | 250,000 | - | 0.45 | - | - | ||||||||||||||||||||||
July 2007
|
500,000 | 500,000 | 0.39 | 500,000 |
July 2017
|
|||||||||||||||||||||||
September 2007
|
500,000 | 500,000 | 0.15 | 500,000 |
August 2017
|
|||||||||||||||||||||||
August 2007
|
7,562,500 | 7,562,500 | 0.2 | 7,562,500 |
November 2013
|
|||||||||||||||||||||||
July 2007
|
30,000 | 30,000 | - | 0.45 | - | - | ||||||||||||||||||||||
July 2007
|
100,000 | 100,000 | - | 0.45 | - | - | ||||||||||||||||||||||
October 2007
|
200,000 | 200,000 | 0.15 | 200,000 |
August-October 2017
|
|||||||||||||||||||||||
November 2007
|
2,520,833 | 2,520,833 | 0.20 | 2,520,833 |
November 2013
|
|||||||||||||||||||||||
November 2007
|
2,016,667 | 2,016,667 | 0.29 | 2,016,667 |
November 2013
|
|||||||||||||||||||||||
April 2008
|
4,537,500 | 4,537,500 | 0.29 | 4,537,500 |
November 2013
|
|||||||||||||||||||||||
August 2008
|
3,529,166 | 3,529,166 | 0.29 | 3,529,166 |
November 2013
|
|||||||||||||||||||||||
August 2008
|
1,008,334 | 1,008,334 | 0.29 | 1,008,333 |
November 2013
|
|||||||||||||||||||||||
November 2008
|
100,000 | 100,000 | 0.15 | 100,000 |
September 2018
|
|||||||||||||||||||||||
April 2009
|
200,000 | 200,000 | 0.1 | 200,000 |
April 2019
|
|||||||||||||||||||||||
October 2009
|
200,000 | 200,000 | 0.067 | 66,667 |
October 2019
|
|||||||||||||||||||||||
October 2009
|
4,537,500 | 4,537,500 | 0.29 | 4,537,500 |
November 2013
|
|||||||||||||||||||||||
January 2010
|
1,250,000 | 1,250,000 | 0.5 | 1,250,000 |
January 2012
|
|||||||||||||||||||||||
February 2010
|
125,000 | 125,000 | 0.01 | 125,000 |
February 2012
|
|||||||||||||||||||||||
February 2010
|
3,000,000 | 3,000,000 | 0.5 | 3,000,000 |
February 2012
|
|||||||||||||||||||||||
January 2011
|
4,537,500 | 4,537,500 | 0.29 | 4,537,500 |
November 2013
|
|||||||||||||||||||||||
February 2011
|
641,026 | 641,026 | 0.39 | 641,026 |
February 2012
|
|||||||||||||||||||||||
February 2011
|
6,407,500 | 6,407,500 | 0.28 | 6,407,500 |
February 2012
|
|||||||||||||||||||||||
February 2011
|
12,815,000 | 12,815,000 | 0.5 | 12,815,000 |
February 2013
|
|||||||||||||||||||||||
77,037,497 | 13,273,893 | 3,895,070 | 59,868,534 | 59,735,201 |
NOTE 8
|
-
|
STOCK CAPITAL (Cont.)
|
|
B.
|
Issuance of shares, warrants and options: (Cont.)
|
|
3.
|
Shares and warrants to service providers: (Cont.)
|
|
a)
|
Warrants: (Cont.)
|
|
b)
|
Shares:
|
NOTE 8
|
-
|
STOCK CAPITAL (Cont.)
|
|
B.
|
Issuance of shares, warrants and options: (Cont.)
|
|
3.
|
Shares and warrants to service providers: (Cont.)
|
|
b)
|
Shares: (Cont.)
|
NOTE 8
|
-
|
STOCK CAPITAL (Cont.)
|
|
B.
|
Issuance of shares, warrants and options: (Cont.)
|
|
3.
|
Shares and warrants to service providers: (Cont.)
|
|
b)
|
Shares: (Cont.)
|
NOTE 8
|
-
|
STOCK CAPITAL (Cont.)
|
B.
|
Issuance of shares, warrants and options: (Cont.)
|
3.
|
Shares and warrants to service providers: (Cont.)
|
b)
|
Shares: (Cont.)
|
Six months
|
Three months
|
Period from
September 22,
2000 (inception
date) through
|
||||||||||||||||||
ended June 30,
|
ended June 30,
|
June 30,
|
||||||||||||||||||
2 0 1 1
|
2 0 1 0
|
2 0 1 1
|
2 0 1 0
|
2 0 1 1
|
||||||||||||||||
Unaudited
|
Unaudited
|
Unaudited
|
||||||||||||||||||
Research and development
|
19 | 47 | 10 | 17 | $ | 17,258 | ||||||||||||||
General and administrative
|
454 | 237 | 456 | 82 | 9,492 | |||||||||||||||
Financial expenses, net
|
192 | - | 192 | - | 248 | |||||||||||||||
Total stock-based compensation expense
|
665 | 284 | 658 | 99 | $ | 26,998 |
NOTE 9
|
-
|
SUBSEQUENT EVENTS
|
|
A.
|
On July 25, 2011, the Company signed a settlement agreement with it’s prior CEO according to which the Company will pay the prior CEO $265 for payroll debt. In addition, 150,000 unvested options became fully vested and exercisable until April 30, 2012.
|
B.
|
In July 2011, an investor exercised a warrant to purchase 759,334 shares of Common Stock of the Company at $0.28 per share, for $213 (see note 8 B 1 j).
|
|
C.
|
In July 2011 the Company granted to one of its investors 309,977 shares of Common Stock on account of previous conversion of a convertible loan (see note 8 B 3 b).
|
|
D.
|
In July 2011, an employee and several former employees exercised 403,993 options for $59.
|
|
E.
|
In July 2011, a consultant of the Company exercised 50,000 options for $8.
|
|
·
|
Finalizing a GMP compliant production process;
|
|
·
|
Demonstrating Safety Tolerability and Therapeutic effect of transplantation of Autologous cultured Bone Marrow Stromal Cells secreting Neurothrophic factors (MSC-NTF) in a Phase I/II Clinical trial in human ALS patients;
|
|
·
|
Setting up a centralized facility to provide the therapeutic products and services for transplantation in patients in the US and in Europe, as part of the clinical development program; and
|
|
·
|
Submitting an IND to the FDA.
|
|
·
|
Bone marrow aspiration from patient;
|
|
·
|
Isolation and expansion of the mesenchymal stem cells;
|
|
·
|
Differentiation of the expanded stem cells into neurotrophic-factor secreting cells; and
|
|
·
|
Autologous transplantation into the patient into the site of damage.
|
|
·
|
our ability to obtain funding from third parties, including any future collaborative partners;
|
|
·
|
the scope, rate of progress and cost of our clinical trials and other research and development programs;
|
|
·
|
the time and costs required to gain regulatory approvals;
|
|
·
|
the terms and timing of any collaborative, licensing and other arrangements that we may establish;
|
|
·
|
the costs of filing, prosecuting, defending and enforcing patents, patent applications, patent claims, trademarks and other intellectual property rights;
|
|
·
|
the effect of competition and market developments; and
|
|
·
|
future pre-clinical and clinical trial results.
|
|
·
|
The Company did not maintain effective controls over certain aspects of the financial reporting process because we lacked a sufficient complement of personnel with a level of accounting expertise and an adequate supervisory review structure that is commensurate with the Company’s financial reporting requirements.
|
BRAINSTORM CELL THERAPEUTICS INC.
|
||
August 15, 2011
|
By:
|
/s/ Adrian Harel
|
Name: Adrian Harel
|
||
Title: Acting Chief Executive Officer (Principal
Executive Officer)
|
August 15, 2011
|
By:
|
/s/ Liat Sossover
|
Name: Liat Sossover
|
||
Title: Chief Financial Officer (Principal
Financial Officer)
|
Exhibit
Number
|
Description
|
|
10.1
|
Clinical Trial Agreement, entered into as of February 17, 2010, among BrainStorm Cell Therapeutics Ltd., Prof. Dimitrios Karussis and Hadasit Medical Research Services and Development Ltd.
|
|
10.2
|
Amendment to the Clinical Trial Agreement, entered into as of June 27, 2011, among BrainStorm Cell Therapeutics Ltd., Prof. Dimitrios Karousis and Hadasit Medical Research Services and Development Ltd.
|
|
10.3
|
BrainStorm Cell Therapeutics Inc. Director Compensation Plan.
|
|
10.4
|
Common Stock Purchase Warrant, dated as of February 17, 2010, issued by BrainStorm Cell Therapeutics Inc. to Hadasit Medical Research Services and Development Ltd.
|
|
10.5
|
Common Stock Purchase Warrant, dated as of February 17, 2010, issued by BrainStorm Cell Therapeutics Inc. to Hadasit Medical Research Services and Development Ltd.
|
|
10.6
|
Common Stock Purchase Warrant, dated as of February 17, 2010, issued by BrainStorm Cell Therapeutics Inc. to Hadasit Medical Research Services and Development Ltd.
|
|
10.7
|
Brainstorm Cell Therapeutics Inc. Amended and Restated 2004 Global Share Option Plan is incorporated herein by reference to Exhibit A to the Registrant’s Definitive Schedule 14A filed April 29, 2011 (File No. 000-54365).
|
|
10.8
|
Brainstorm Cell Therapeutics Inc. Amended and Restated 2005 U.S. Stock Option and Incentive Plan is incorporated herein by reference to Exhibit B to the Registrant’s Definitive Schedule 14A filed April 29, 2011 (File No. 000-54365).
|
|
10.9
|
Form of Stock Option Agreement for usage under the Registrant’s Amended and Restated 2004 Global Share Option Plan.
|
|
10.10
|
Form of Restricted Stock Agreement for usage under the Registrant’s Amended and Restated 2005 U.S. Stock Option and Incentive Plan.
|
|
10.11
|
Settlement and Waiver Agreement, dated July 25, 2011, by and among BrainStorm Cell Therapeutics Inc., BrainStorm Cell Therapeutics Ltd., Abraham Efrati and Pro Int Ltd. is incorporated herein by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 8-K filed July 28, 2011 (File No. 000-54365).
|
|
31.1
|
Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2
|
Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32.1
|
Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
32.2
|
Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
PREAMBLE
|
1
|
|
1.
|
STUDY, INVESTIGATOR AND SITE
|
2
|
2.
|
COMPLIANCE WITH LAWS, REGULATIONS AND GUIDELINES
|
3
|
3.
|
INFORMED CONSENT
|
3
|
4.
|
RECORDKEEPING, REPORTING AND ACCESS
|
3
|
5.
|
COMPENSATION FOR STUDY
|
4
|
6.
|
CONFIDENTIAL INFORMATION
|
5
|
7.
|
PUBLICATIONS
|
6
|
8.
|
INTELLECTUAL PROPERTY
|
7
|
9.
|
TANGIBLE MATERIALS
|
8
|
10.
|
INDEMNIFICATION, INSURANCE, LIMITED LIABILITIES
|
8
|
11.
|
TERM AND TERMINATION
|
11
|
12.
|
CHANGES TO THE PROTOCOL
|
12
|
13,
|
ASSIGNMENTS
|
12
|
14.
|
APPLICABLE LAW
|
12
|
15.
|
INDEPENDENT CONTRACTORS
|
12
|
16.
|
NOTICES
|
12
|
17.
|
ENTIRE AGREEMENT
|
13
|
Schedule A - Protocol
|
15
|
|
Schedule B - GMP Agreement
|
16
|
|
Schedule C - Consideration
|
17
|
1.
|
STUDY, INVESTIGATOR AND SITE
|
|
A.
|
Hadasit shall contribute the Investigator for purpose of carrying out a clinical trial (the:
“
Study
”)
in accordance with the Sponsor Protocol titled “Explorative clinical trial to evaluate the safety and tolerability of injection of mesenchymal bone marrow stem cells secreting neurotrophic factors (MSC- NTF), in patients with amyotrophic lateral sclerosis (ALS)” (the
“
Protocol
”),
which has been drafted jointly by the Sponsor and the Investigator. A copy of the Protocol is attached herein as
Schedule A
.
|
|
B.
|
In the event that the Investigator ceases to be available for purpose of the Study (including without limitation the event of termination of employment between HMO and the investigator for any reason whatsoever), Hadasit shall use its best efforts to procure within 30 days his/her substitution by a suitably qualified person acceptable to Sponsor. If such substitute is not acceptable to the Sponsor, Sponsor shall be entitled to terminate this Agreement without further notice, and this shall be Sponsor’s sole remedy in such circumstances.
|
|
C.
|
Notwithstanding anything to the contrary herein, the Sponsor hereby represents and warrants that it has examined the facilities of the Institution and found them entirely adequate and suitable for the purpose of performance of the Protocol and the Study. In addition, nothing contained herein shall be construed as casting upon the Institution, the Investigator or HMO an undertaking to purchase any special equipment for purpose of the Study or to improve its existing equipment.
|
|
D.
|
The Product used in the Study shall be processed in a class 10,000 laboratory in Hadassah National Facility operated according to GMP Standards under the Agreement attached hereto as
Schedule B
.
|
2.
|
COMPLIANCE WITH LAWS, REGULATIONS AND GUIDELINES
|
|
B.
|
Prior to commencement of the Study, the Investigator will seek at the Sponsor’s expense any consents or approvals that must be obtained from the HMO’s ethics committee (the
“
Committee
”).
The Investigator will comply with all requirements established by the Committee and agrees to execute such assurances and other documents as the Committee may reasonably request. The Sponsor shall assist the Investigator to the extent required in this regard including, without limitation, signing the relevant forms and amending the Sponsor’s documents which shall be filed with the Committee. The Investigator will not enroll patients in the Study until the Protocol has been reviewed and approved by the Committee. The Sponsor shall be liable to obtain any further approval that may be required under applicable law. Any delay in the performance by the Institution and/or the Investigator’s of any of their undertakings hereunder due to insufficient approvals shall not be deemed to be a breach of this Agreement by them.
|
3.
|
INFORMED CONSENT
|
|
A.
|
The Investigator will be responsible for obtaining the written informed consent of each subject participating in the Study (or his or her authorized legal representative) before his or her participation in the Study. The form that shall be used in this regard shall be drafted by the Investigator and approved by the Sponsor, however the Investigator shall be responsible for its content.
|
|
B.
|
Without derogating from the generality of the aforementioned, the parties agree that such informed consent shall be granted only under circumstances that provide the prospective Study subject (or his or her representative) with sufficient opportunity to consider whether or not to participate and that minimize the possibility of coercion or undue influence. The parties further agree that any such written informed consent shall be obtained in compliance with all applicable laws, regulations, standards or guidelines.
|
4.
|
RECORDKEEPING, REPORTING AND ACCESS
|
|
A.
|
ACCESS. The Sponsor and/or any regulatory authorities may, to the extent reasonably necessary or to the extent required by applicable laws, regulations, standards or guidelines, subject to prior coordination with the Investigator and at the normal working hours in HMO (i.e. 8:00AM-16:00 PM):
|
|
(1)
|
examine and inspect the Investigator’s and the Institution’s facilities required for performance of the Study; and
|
|
(2)
|
confidentially inspect all data and work product relating to the Study.
|
|
(3)
|
Notwithstanding anything to the contrary herein, any information and/or data to be provided to the Sponsor under Sub Sections 1-2 above or under any other provision hereunder, shall be subject to the provisions of section 6(D) below and to the rights of the Subject of the Study for medical confidentiality and privacy under any applicable law or regulation (including, without limitation, HMO’s internal procedures).
|
|
B.
|
The Investigator shall prepare and maintain reasonably complete and accurate written records, accounts, notes, reports and data of the Study, including case report forms. The Investigator will retain or will cause the Institution to retain all such materials and data that the Institution has to retain under any applicable law for such periods as such law determines. After the termination of such applicable retention periods, the Institution shall no longer have any duty whatsoever to retain any such materials and data.
|
|
C.
|
REPORTING OF ADVERSE EVENTS
|
|
D.
|
INTERVAL AND FINAL STUDY REPORTS
|
5.
|
COMPENSATION FOR STUDY
|
6.
|
CONFIDENTIAL INFORMATION
|
|
A.
|
Subject to the publication rights set out in section 7 below, the Investigator and the Institution agree to keep in confidence any written information expressly marked as “confidential” that is forwarded by the Sponsor to the Investigator or the Institution for purpose of the Study (or such oral information which is clearly defined as confidential upon its disclosure); or (b) information that comprises the Proprietary Data of the Sponsor as defined in section 8 hereto (the information described in clauses (a) and (b) above being collectively the
“
Confidential Information
”).
However, the obligation of non-disclosure and non-use shall not apply to the following:
|
|
(1)
|
Information that is or becomes publicly available other than as a result of disclosure by the Investigator or the Institution;
|
|
(2)
|
Information that the Institution can demonstrate based in records is already independently known by the Investigator, or employees of the Institution and/or the HMO, prior to its disclosure; or
|
|
(3)
|
Information that the Institution can demonstrate based in records was independently developed by employees of the Institution or of HMO who have not been exposed to the Confidential Information;
|
|
(4)
|
Information at or after such time that the Institution can demonstrate based in records that the same is disclosed on a non confidential basis to the Investigator or the Institution or the HMO, or their employees, by a third party; or
|
|
(5)
|
Information that the disclosure thereof is required under any law, court writ or any competent authority. However, if the Investigator and/or the Institution are legally required to disclose any Confidential Information to a court or governmental authority, prompt written notice thereof shall be given to the Sponsor.
|
|
B.
|
The obligations of non-disclosure hereunder shall continue for 3 years after the termination of this Agreement for any reason whatsoever.
|
|
C.
|
At the request of the Sponsor, the Investigator or the Institution, as the case may be, will return to the Sponsor all copies or other manifestations of Confidential Information that may be in the possession of the Investigator or the Institution, except for materials that have to be retained by the Investigator or the Institution as aforementioned and subject further to Section 4(B) hereto.
|
|
D.
|
Confidentiality of Medical Records
. Sponsor, Investigator, and Institution understand, acknowledge and agree that they share the common goal of securing all individually identifiable health information and according that information the highest possible degree of confidentiality and protection from disclosure; accordingly, all individually identifiable health information shall at all times be treated as confidential by the parties in accordance with all federal, state and local laws, rules and regulations governing the confidentiality and privacy of individually identifiable health information as applicable, including, but not limited to, the Health Insurance Portability and Accountability Act of 1996
(“
HIP AA
”)
and any regulations and official guidance promulgated thereunder, as well as the Israeli Patient’s Rights Law, 1996 (the “PR Law”), the Israeli Protection of Privacy Law, 1981 (the
“
PP Law
”)
and any regulations and rules promulgated thereunder, and the parties agree to take such additional steps and/or to negotiate such amendments to this Agreement as may be required to ensure that the parties are and remain in compliance with the HIP AA regulations and official guidance, as well as the PR and PP Laws and any regulations and rules promulgated thereunder. It is hereby agreed that any undertaking of the Institution and/or Investigators hereunder whatsoever is subject to any restrictions and/or limitations deemed necessary by the Institution and/or Investigators in their sole discretion, to comply with the above provisions. It is hereby made expressly clear that no patient identifiable information will be provided, or made available, to the Sponsor or any party acting on its behalf, without the express written consent of the patient.
|
7.
|
PUBLICATIONS
|
|
A.
|
Notwithstanding anything contained herein to the contrary, the Investigator and/or Institution may publish the results of the Study in scientific publications, provided that the Investigator and/or Institution have notified the Sponsor of their intent to publish and have received the consent of the Sponsor as set forth in Sub-Section
B
below. The Investigator and/or Institution and the Sponsor shall be listed as co-authors on said publication. Any said scientific publication will not contain the Sponsor’s Confidential Information without the Sponsor’s prior written approval, which for the purpose of this section shall not include the Study results.
|
|
B.
|
The Investigator will provide Sponsor with a copy of any proposed publication or presentation materials
(“
Material
”)
and a written notice of intent (on behalf of the Investigator or any Study staff at the Institution) to publish or present the Material at least 45 days prior to the scheduled presentation or publication submission date (the
“
Evaluation Period
”),
during which Sponsor shall inform the Investigator and the Institution if (i) it wishes to seek patent protection for any such Material, and (ii) if any such material contains New IP that is not patentable that is supported by an Israeli patent attorney opinion
(“
New Trade Secrets
”).
If the Sponsor does not so notify the Investigator within the Evaluation Period, the Sponsor shall be deemed to have given its consent to publication of the Material. If the Sponsor so notifies the Investigator within the Evaluation Period, (i) the material shall be edited to remove the New Trade Secrets, if any, and (ii) the Sponsor shall have an additional sixty (60) days, beginning from the end of the Evaluation Period to prepare and submit any patent application it wishes or achieve an Israeli patent attorney opinion that New IP is not patentable, and after such time, Investigator and/or Institution shall be free to publish the Material, other than New Trade Secrets subject to the limitations contained herein.
|
|
C.
|
Notwithstanding anything to the contrary herein, the Sponsor shall not use the names of the Institution, HMO or the Investigator and shall not disclose their involvement in the Study or the Products without the Institution’s prior written approval, all except for (a) references to publications which are already in the public domain at the time of publication and (b) applications for regulatory approvals to official authorities, and (c) as requested by regulatory authorities or as required by law or applicable regulation or stock exchange rule and/or regulation. Subject to the foregoing, the Sponsor shall include appropriate acknowledgement and credit to the Institution, HMO, the Investigator and their employees in any publication relating to the Study and/or to the Product in whatever media, including application(s) to official authorities or presentations to potential investors.
|
8.
|
INTELLECTUAL PROPERTY
|
|
A.
|
Intellectual property, including ideas, documents, information, know-how, trade secrets, reports, analyses, data and inventions (collectively, the
“
Proprietary Data
”)
owned by either Party prior to initiation of the Study shall be owned by that Party. Proprietary Data generated by the Investigator or the Institution or their respective employees, agents or contractors, from the performance of the Study and this Agreement
(“
New IP
”)
shall be owned by the Sponsor, and the Investigator and the Institution will disclose to the Sponsor all such New IP. For the purpose hereof and for the avoidance of doubt, frozen bone-marrow, collected by the Investigator and stored in HMO other than for the purpose of the Work defined in Schedule B hereof, shall be owned by HMO, and in any event shall not be owned by the Sponsor and shall not be regarded as Sponsor’s Proprietary Data or as New IP for the purpose hereof.
|
|
B.
|
The Investigator and the Institution hereby assign and transfer to the Sponsor all right, title and interest in such Proprietary Data and agree to take all further acts reasonably required (including without limitation execution of assignment forms), at the Sponsor’s expense, to convey title in such property to the Sponsor and/or to assist the Sponsor to perfect and protect such rights.
|
|
C.
|
New IP shall not include and Institution and/or the Investigator shall retain any and all rights, including intellectual property rights, to any inventions, discoveries and improvements or other technology, whether patentable or not, and all patent applications or patents based thereon :
|
|
(i)
|
conceived or made by HMO employees during the period of the Study which are not direct result of the implementation of the Study Protocol and/or the Work Plan as defined in Schedule B; and
|
(ii)
|
which are not directly claiming the Product.
|
|
D.
|
Notwithstanding, HMO and Hadasit shall have a perpetual fully paid-up non exclusive and non-transferable license to use the New IP for non-commercial purposes solely in connection with processes conducted by the Investigator or other HMO employees and delegates appointed by HMO prior to initiation of the Study, which for the avoidance of doubt does not include procedures which are Sponsor’s Proprietary Data, such as specific protocols for differentiation of cells.
|
|
E.
|
Subject to Section 6, nothing contained herein shall prevent Institution and/or HMO and/or Investigators from using the Proprietary Data for academic research, non commercial therapeutic and educational purposes only, provided that that every person or entity making use of the Proprietary Data is explicitly made aware by the Institution or the Investigator or HMO of the Sponsor’s proprietary interest therein.
|
9.
|
TANGIBLE MATERIALS
|
10.
|
INDEMNIFICATION, INSURANCE, LIMITED LIABILITIES
|
|
A.
|
The Sponsor shall defend, indemnify and hold harmless the Investigator, the Institution, HMO and any of their employees, agents or contractors (collectively the “Indemnitees”) promptly upon their first demand from and against any loss, damage, liability and expense (including legal fees, arising out of or resulting from the performance of the Study and/or from the direct or indirect use, sale or manufacture by the Sponsor of the Study and/or the Study results and /or of products incorporating or involving such results and, without limitation to the foregoing, from or against product liability claims or claims regarding third party’s intellectual properly rights; provided however:
|
|
(1)
|
that the Sponsor’s indemnification obligations under this Section shall be proportionately reduced to the extent the loss was caused or increased by the negligence or willful misconduct of an Indemnitee (but only to the extent that such demands, claims, or judgments are due to the negligence or willful malfeasance of the Indemnitees);
|
|
(2)
|
that the Sponsor is notified in writing as soon as practicable under the circumstances of any complaint or claim potentially subject to indemnification;
|
|
(3)
|
the Indemnitees give the Sponsor all reasonable cooperation in the defense of the claims subject to Sponsor proving Indemnitees with legal defense within the specified defense periods under Israeli law.
|
|
(4)
|
the Indemnitees do not settle any claim or compromise any defense thereof without the consent of the Sponsor, which will not be unreasonably withheld and subject to Sponsor proving Indemnitees with legal defense within the specified defense periods under Israeli law. Sponsor may admit fault on behalf of the Indemnitees only subject to written approval of the Institution, which shall not be unreasonably withheld.
|
|
B.
|
The Indemnitees shall be entitled, at their sole discretion, to either (i) instruct the Sponsor to assume defense of any litigation or other legal procedure which entitles them to indemnification under this Agreement, in which case the Indemnitees shall be entitled to approve the choice of the legal counsel of the Sponsor, such approval shall not be unreasonably withheld, or (ii) to manage their defense themselves, in which case the Sponsor shall be responsible to any legal expenses (including reasonable attorney fees) stemming from such procedure and the results thereof.
|
|
C.
|
The Sponsor shall reimburse Institution for reasonable and necessary medical expenses incurred by Study Subjects as a direct result of the treatment of adverse reactions resulting from the administration of the Product and/or Study drugs and/or devices or procedures performed in accordance with the Protocol, provided such expenses are not covered by the Study Subject’s medical or hospital insurance coverage and are in no way attributable to the negligence or misconduct of any agent or employee of the Institution. No other compensation of any type will be provided by the Sponsor to the Study Subjects.
|
|
D.
|
Without derogating from the aforementioned, the Sponsor warrants and undertakes that it has purchased, and shall maintain during the entire term of the Agreement and for all relevant times subsequent thereto (including under applicable statues of limitation), sufficient insurance coverage for the Study and for the Sponsor’s liabilities hereunder, including without limitation, for claims relating to negligence of both Sponsor and of personnel performing the Study, and for claims relating to product liability, which insurance coverage shall be satisfactory to the Institution. The Sponsor further undertakes that HMO, the Institution, the Investigator and their employees will be included as co-insured in such insurance policy/ies. The insurance shall not be diminished or cancelled throughout the Study and the subsequent periods (according to the limitation/obsolescence act). Thirty (30) days prior to such insurance expiry, Sponsor shall provide the Institution with a policy extension or a new valid policy. Absence to provide such policy extension or a valid insurance policy shall entitle to Institution to terminate this Agreement and the Study immediately and without notice.
|
|
E.
|
Disclaimer of Warranty.
Nothing contained in this Agreement shall be construed as a warranty by the Institution and the Investigator that the results of the Study will be useful or commercially exploitable or of any value whatsoever. In addition, and without derogating from the aforementioned the Institution and the Investigator disclaim all warranties, either express or implied, with respect to the Study and any products that incorporate, integrate or are designed based in whole or part, on the Study results (“Products”), including without limitation implied warranties of merchantability, efficacy and fitness for a particular purpose. The entire risk arising out of the production and use of the Study and the Products and any accompanying materials remains solely with the Sponsor, and the Sponsor shall be solely responsible for any use of the Work and/or the Product.
|
|
F.
|
Limitation on liability.
Without derogating from the above, and except in the event of willful malfeasance or medical malpractice to the Study subjects, if the Institution or the Investigator are found liable (whether under contract, tort (including negligence) or otherwise), then the cumulative liability thereof for all claims whatsoever related to the Study or the Products or otherwise arising out of this Agreement, shall not exceed a total consideration actually paid to it by the Sponsor under this Agreement. This limitation of liability is intended to apply to all claims of the Sponsor without regard to which other provisions of this Agreement have been breached or have proved ineffective.
|
|
G.
|
Exclusion of Consequential Damages.
Neither party shall be liable (whether under contract, tort (including negligence) or otherwise) to the other party, or any third party for any indirect, incidental or consequential damages, including, without limitation, any loss or damage to business earnings, lost profits or goodwill and lost or damaged data or documentation, suffered by any person, arising from and/or related with and/or connected to this agreement even if such party is advised of the possibility of such damages.
|
11.
|
TERM AND TERMINATION
|
|
A.
|
This Agreement shall become effective upon its execution by both parties and shall be in effect during the entire period of the Study as set forth in Schedule A hereto, unless terminated by the parties as set forth herein.
|
|
B.
|
Hadasit and the Sponsor may either terminate this Agreement upon the filing by any person of a petition for the winding-up or liquidation or the appointment of a receiver on most of the assets of the terminated party, if petition has not been withdrawn or dismissed within 21 days of its filing. In addition, each party may terminate this Agreement without further notice in case the terminated party has breached this Agreement and did not cure such breach within 21 days of delivery of a written notice from the non-defaulting party. The Sponsor may terminate this Agreement without prior notice as set in Section 1 (B) hereto.
|
|
C.
|
In addition, this Agreement may be terminated by cither Hadasit or the Sponsor for any other reason upon 60 days written notice. If Hadasit terminates this Agreement pursuant to this Sub-Section, it shall not be automatically entitled to all costs and non-cancelable commitments incurred prior such termination pursuant to Sub-Section 11D hereof.
|
|
D.
|
In the event of termination, the Sponsor shall reimburse the Institution for all costs and non-cancelable commitments incurred until the date of termination with regard to the performance of this Agreement.
|
|
E.
|
Subject to Sub-Section D above, upon termination of this Agreement, the Investigator and the Institution shall return to the Sponsor any funds not expended or irrevocably committed prior to the effective termination date.
|
|
F.
|
The Sponsor shall be obliged notwithstanding the termination of this Agreement for any reason to continue supplying any material and drug supplied by the Sponsor and used in the Study, and the Institution and the Investigator shall continue to provide supportive treatment to Study subjects who have begun to receive treatment with the Product as defined by the Investigator, in each case in order to comply with applicable laws and regulations and/or to avoid injury or harm to the Study subjects.
|
|
G.
|
Termination of this Agreement by either party shall not affect the rights and obligations of the parties accrued prior to the effective date of the termination. The rights and duties under Sections 4, 6, 7, 8, 10, 14, and 16 will survive the termination or expiration of this Agreement.
|
12.
|
CHANGES TO THE PROTOCOL
|
13.
|
ASSIGNMENTS
|
14.
|
APPLICABLE LAW
|
15.
|
INDEPENDENT CONTRACTORS
|
16.
|
NOTICES
|
17.
|
ENTIRE AGREEMENT
|
By:
|
/s/ Rami Efrati
|
|
Name:
|
Rami Efrati
|
|
Title:
|
CFO
|
|
Date:
|
February 17, 2010
|
/s/ Dimitrios Karussis
|
February 17, 2010
|
[signature]
|
By:
|
/s/ Illegible
|
|
Name:
|
||
Title:
|
||
Date:
|
(A)
|
The undersigned are all of the parties to a Clinical Trial Agreement dated February 17, 2011 (the “
Agreement
”) relating to the Company.
|
(B)
|
T
he parties intend to amend the Agreement as set forth below.
|
1.
|
Definitions
. Capitalized terms used in this Amendment shall have the meanings assigned to them in the Agreement.
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2.
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Stud
y Coo
r
dinator
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2.1.
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The following sentence is added at the end of Section 1.A of the Agreement:
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2.2.
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In Section 1.B, the phrase: “In the event that the Investigator ceases to be available” is amended to read: “In the event that the Investigator or the Project Coordinator ceases to be available”.
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3.
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Termination
.
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3.1.
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Section 1l.C of the Agreement is amended to read as follows:
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3.2.
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Sections 11.D and 11.E of the Agreement are hereby deleted.
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4.
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Sched
ules
.
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4.1.
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Protocol
.
Schedule A of the Agreement is hereby replaced with the
Amended and Restated Schedule A attached hereto.
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4.2.
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Payment
.
Schedule C of the Agreement is hereby replaced with the Amended and Restated Schedule C attached hereto.
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5.
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Limi
te
d Amendment
. Except as set forth herein, this Amendment shall not constitute a modification, acceptance or waiver of any other provision of the Agreement, or any right, power or remedy of any party under the Agreement. Except as
amended
hereby, all terms of the Agreement
remain
in full force and effect.
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6.
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Miscellane
ous
. The Provisions of Section 14 (Governing Law) of the Agreement shall apply to this Amendment.
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By:
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/s/ Adrian Harel
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Name:
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Adrian Harel
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Title:
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CEO
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Date:
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6/13/2011
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/s/
Prof. Dimitrios Karussis
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[signature]
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By:
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/s/ Illegible | |
Name:
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||
Title:
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||
Date:
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6/13/2011
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Warrant No.: 2010-1
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Number of Shares: 500,000
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(subject to adjustment)
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Date of Issuance: February 17, 2010
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BRAINSTORM CELL THERAPEUTICS, INC.
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By:
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[Corporate Seal]
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Title:
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ATTEST:
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To:_________________
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Dated:____________
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0
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_____ shares of the Common Stock covered by such Warrant; or
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0
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the maximum number of shares of Common Stock covered by such Warrant pursuant to the cashless exercise procedure set forth in Section 1(b).
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0
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$______ in lawful money of the United States; and/or
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0
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the cancellation of such portion of the attached Warrant as is exercisable for a total of _____ Warrant Shares (using a Fair Market Value of $_____ per share for purposes of this calculation); and/or
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0
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the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in Section 1(b), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in Section 1(b).
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Signature:
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Address:
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Name of Assignee
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Address
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No. of Shares
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||
Dated:
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Signature:
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By:
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Warrant No.: 2010-2
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Number of Shares: 500,000
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(subject to adjustment)
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Date of Issuance: February 17, 2010
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To:_________________
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Dated:____________
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0
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_____ shares of the Common Stock covered by such Warrant; or
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0
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the maximum number of shares of Common Stock covered by such Warrant pursuant to the cashless exercise procedure set forth in Section 1(b).
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0
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$______ in lawful money of the United States; and/or
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0
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the cancellation of such portion of the attached Warrant as is exercisable for a total of _____ Warrant Shares (using a Fair Market Value of $_____ per share for purposes of this calculation); and/or
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0
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the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in Section 1(b), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in Section 1(b).
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Signature:
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Address:
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Name of Assignee
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Address
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No. of Shares
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Dated:
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Signature:
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By:
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Warrant No.: 2010-3
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Number of Shares: 500,000
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(subject to adjustment)
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Date of Issuance: February 17, 2010
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BRAINSTORM CELL THERAPEUTICS, INC.
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||||
By:
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||||
[Corporate Seal]
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Title:
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ATTEST:
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||||
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To:
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Dated:
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0
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_____ shares of the Common Stock covered by such Warrant; or
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0
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the maximum number of shares of Common Stock covered by such Warrant pursuant to the cashless exercise procedure set forth in Section 1(b).
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0
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$______ in lawful money of the United States; and/or
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0
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the cancellation of such portion of the attached Warrant as is exercisable for a total of _____ Warrant Shares (using a Fair Market Value of $_____ per share for purposes of this calculation); and/or
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0
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the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in Section 1(b), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in Section 1(b).
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Signature:
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||
Address:
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Name of Assignee
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Address
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No. of Shares
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Dated:
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Signature:
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Signature Guaranteed:
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By:
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BETWEEN:
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Brainstorm Cell Therapeutics Inc.
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A company incorporated in Delaware
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(hereinafter the “
Company”
)
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AND:
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___________________
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I.D. No. ____________
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____________________, Israel
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(hereinafter the “
Optionee
”)
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WHEREAS
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On November 25, 2004, the Company duly adopted and the Board approved the 2004 Global Share Option Plan (the “Plan”), and Appendix A – Israel to the Plan (the “Israeli Appendix”), forming an integral part of the Plan, a copy of which is attached as Exhibit A hereto; and
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WHEREAS
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On March 28, 2005 the Company’s shareholders approved and ratified the Plan and the Israeli Appendix in a Special Meeting of Shareholders; and on June 5, 2008, the Company's shareholders approved to amend and restate the Company’s 2004 Global Share Option Plan and 2005 U.S. Stock Option and Incentive Plan to increase the number of shares of common stock available for issuance under these stock option plans in the aggregate by 5,000,000 shares; and on June 10, 2011, the Company's shareholders approved to amend and restate the Company’s 2004 Global Share Option Plan and 2005 U.S. Stock Option and Incentive Plan to increase the number of shares of common stock available for issuance under these stock option plans in the aggregate by 5,000,000 shares; and
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WHEREAS
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Pursuant to the Plan and the Israeli Appendix, the Company has decided to grant Options to purchase Shares of the Company to the Optionee, and the Optionee has agreed to such grant, subject to all the terms and conditions as set forth in the Plan, the Israeli Appendix and as provided herein;
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1.
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Preamble and Definitions
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1.1
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The preamble to this agreement constitutes an integral part hereof.
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1.2
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Unless otherwise defined herein, capitalized terms used herein shall have the meaning ascribed to them in the Plan and/or the Israeli Appendix.
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2.
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Grant of Options
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2.1
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The Company hereby grants to the Optionee the number of Options as set forth in
Exhibit B
hereto. Each Option shall be exercisable for one Share, upon payment of the Purchase Price as set forth in
Exhibit B
, subject to the terms and the conditions as set forth in the Plan and/or the Israeli Appendix and as provided herein.
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2.2
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The Optionee is aware that the Company intends in the future to issue additional shares and to grant additional options to various entities and individuals, as the Company in its sole discretion shall determine.
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3.
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Period of Option and Conditions of Exercise
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3.1
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The terms of this Option Agreement shall commence on the Date of Grant and terminate at the Expiration Date, or at the time at which the Option expires pursuant to the terms of the Plan and/or the Israeli Appendix or pursuant to this Option Agreement.
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3.2
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Options may be exercised only to purchase whole Shares, and in no case may a fraction of a Share be purchased. If any fractional Share would be deliverable upon exercise, such fraction shall be rounded up one-half or less, or otherwise rounded down, to the nearest whole number.
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4.
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Adjustments
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5.
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Vesting; Period of Exercise
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Subject to the provisions of the Plan and/or the Israeli Appendix and except as otherwise provided for herein, Options shall vest and become exercisable according to the Vesting Dates set forth in
Exhibit B
hereto, provided that the Optionee is an Employee of, or providing services to, the Company and/or its Affiliates on the applicable Vesting Date
.
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All unexercised Options granted to the Optionee shall terminate and shall no longer be exercisable on the Expiration Date, as described in Section 2.8 of the Plan.
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6.
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Exercise of Options
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6.1
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Options may be exercised in accordance with the provisions of Section 8.1 of the Plan. The Purchase Price shall be payable upon the exercise of an Option in accordance with Section 6.2 of the Plan.
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6.2
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In order for the Company to issue Shares upon the exercise of any of the Options, the Optionee hereby agrees to sign any and all documents required by any applicable law and/or by the Company's incorporation documents. The Optionee further agrees that in the event that the Company and its counsel deem it necessary or advisable, in their sole discretion, the issuance of Shares may be conditioned upon certain representations, warranties, and acknowledgments by the Optionee.
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6.3
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The Company shall not be obligated to issue any Shares upon the exercise of an Option if such issuance, in the opinion of the Company, might constitute a violation by the Company of any provision of law.
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7.
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Restrictions on Transfer of Options and Shares
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7.1
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The transfer of Options and the transfer of Shares to be issued upon exercise of the Options shall be subject to the limitations set forth in the Plan, in the Israeli Appendix, in the Company’s incorporation documents, in any shareholders’ agreement to which the holders of common stock of the Company are bound or in any applicable law including securities law of any jurisdiction.
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7.2
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With respect to any Approved 102 Option, subject to the provisions of Section 102 and any rules or regulation or orders or procedures promulgated thereunder, an Optionee shall not sell or release from trust any Share received upon the exercise of an Approved 102 Option and/or any share received subsequently following any realization of rights, including without limitation, bonus shares, until the lapse of the Holding Period required under Section 102 of the Ordinance. Notwithstanding the above, if any such sale or release occurs during the Holding Period, the sanctions under Section 102 of the Ordinance and under any rules or regulation or orders or procedures promulgated thereunder shall apply to and shall be borne by such Optionee.
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7.3
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With respect to Unapproved 102 Option, if the Optionee ceases to be employed by the Company or any Affiliate, the Optionee shall extend to the Company and/or its Affiliate a security or guarantee for the payment of tax due at the time of sale of Shares, all in accordance with the provisions of Section 102 and the rules, regulation or orders promulgated thereunder.
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7.4
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The Optionee shall not dispose of any Shares in transactions, which violate, in the opinion of the Company, any applicable laws, rules and regulations.
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7.5
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The Optionee agrees that the Company shall have the authority to endorse upon the certificate or certificates representing the Shares such legends referring to the foregoing restrictions, and any other applicable restrictions as it may deem appropriate (which do not violate the Optionee's rights according to this Option Agreement).
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8.
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Taxes; Indemnification
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8.1
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Any tax consequences arising from the grant or exercise of any Option, from the payment for Shares covered thereby or from any other event or act (of the Company and/or its Affiliates, the Trustee or the Optionee), hereunder, shall be borne solely by the Optionee. The Company and/or its Affiliates and/or the Trustee shall withhold taxes according to the requirements under the applicable laws, rules, and regulations, including withholding taxes at source. Furthermore, the Optionee hereby agrees to indemnify the Company and/or its Affiliates and/or the Trustee and hold them
harmless against and from any and all liability for any such tax or interest or penalty thereon, including without limitation, liabilities relating to the necessity to withhold, or to have withheld, any such tax from any payment made to the Optionee.
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8.2
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The Optionee will not be entitled to receive from the Company and/or the Trustee any Shares allocated or issued upon the exercise of Options prior to the full payments of the Optionee’s tax liabilities arising from Options which were granted to her and/or Shares issued upon the exercise of Options. For the avoidance of doubt, neither the Company nor the Trustee shall be required to release any share certificate to the Optionee until all payments required to be made by the Optionee have been fully satisfied.
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8.3
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The receipt of the Options and the acquisition of the Shares to be issued upon the exercise of the Options may result in tax consequences. THE OPTIONEE IS ADVISED TO CONSULT A TAX ADVISER WITH RESPECT TO THE TAX CONSEQUENCES OF RECEIVING OR EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
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8.4
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With respect to Approved 102 Options, the Optionee hereby acknowledges that he is familiar with the provisions of Section 102 and the regulations and rules promulgated thereunder, including without limitations the type of Option granted hereunder and the tax implications applicable to such grant. The Optionee accepts the provisions of the trust agreement signed between the Company and the Trustee, attached as
Exhibit C
hereto, and agrees to be bound by its terms.
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9.
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Miscellaneous
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9.1
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No Obligation to Exercise Options
. The grant and acceptance of these Options imposes no obligation on the Optionee to exercise them.
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9.2
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Confidentiality
. The Optionee shall regard the information in this Option Agreement and its exhibits attached hereto as confidential information and the Optionee shall not reveal its contents to anyone except when required by law or for the purpose of gaining legal or tax advice.
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9.3
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Continuation of Employment or Service
. Nothing in the Plan, the Israeli Appendix and this Option Agreement shall be construed as imposing any obligation on the Company or an Affiliate to continue the Optionee’s employment or service and nothing in the Plan, the Israeli Appendix or in this Option Agreement shall confer upon the Optionee any right to continue in the employ or service of the Company and/or an Affiliate or restrict the right of the Company or an Affiliate to terminate such employment or service at any time.
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9.4
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Entire Agreement
. Subject to the provisions of the Plan and/or the Israeli Appendix, to which this Option Agreement is subject, this Option Agreement, together with the exhibits hereto, constitute the entire agreement between the Optionee and the Company with respect to Options granted hereunder, and supersedes all prior agreements, understandings and arrangements, oral or written, between the Optionee and the Company with respect to the subject matter hereof.
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9.5
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Failure to Enforce - Not a Waiver
. The failure of any party to enforce at any time any provisions of this Option Agreement or the Plan and/or the Israeli Appendix shall in no way be construed to be a waiver of such provision or of any other provision hereof.
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9.6
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Provisions of the Plan and/or the Israeli Appendix
. The Options provided for herein are granted pursuant to the Plan and/or the Israeli Appendix and said Options and this Option Agreement are in all respects governed by the Plan and/or the Israeli Appendix and subject to all of the terms and provisions of the Plan and/or the Israeli Appendix.
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9.7
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Binding Effect
. The Plan, the Israeli Appendix and this Option Agreement shall be binding upon the heirs, executors, administrators and successors of the parties hereof.
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9.8
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Notices
. All notices or other communications given or made hereunder shall be in writing and shall be delivered or mailed by registered mail or delivered by email or facsimile with written confirmation of receipt to the Optionee and/or to the Company at the addresses shown on the letterhead above, or at such other place as the Company may designate by written notice to the Optionee. The Optionee is responsible for notifying the Company in writing of any change in the Optionee’s address, and the Company shall be deemed to have complied with any obligation to provide the Optionee with notice by sending such notice to the address indicated above.
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Company’s Signature:
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Name:
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Liat Sossover
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Position:
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Chief Financial Officer
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Signature: _________________
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______
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Date
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Optionee’s signature
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ExhibitA:
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Brainstorm Cell Therapeutics Inc. 2004 Global Share Option Plan and Appendix A - Israel
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Exhibit B:
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Terms of the Option
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Exhibit C:
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Trust Agreement
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Name of the Optionee:
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_____________________
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Date of Grant:
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_____________________
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Designation:
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Capital Gain Option (CGO
)
|
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1. Number of Options granted:
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____________
(_____ thousands)
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2. Purchase Price:
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$___
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3. Vesting Dates:
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33% after 12 months from January 23 2011, and 24 equal monthly installments thereafter.
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4. Expiration Date:
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__________ (unless otherwise adjusted as provided herein)
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Optionee
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Company
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Number of Shares Vested
|
Vesting Date
|
BrainStorm Cell Therapeutics Inc.
|
||
By:
|
||
Name:
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||
Title:
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[Name of Participant]
|
||
Address:
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||
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August 15, 2011
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/s/ Adrian Harel
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Name: Adrian Harel
|
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Title: Acting Chief Executive Officer (Principal Executive Officer)
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August 15, 2011
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/s/ Liat Sossover
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Name: Liat Sossover
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Title: Chief Financial Officer (Principal Financial Officer)
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August 15, 2011
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/s/ Adrian Harel
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Name: Adrian Harel
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Title: Acting Chief Executive Officer (Principal Executive Officer)
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August 15, 2011
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/s/ Liat Sossover
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Name: Liat Sossover
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Title: Chief Financial Officer (Principal Financial Officer)
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