☒
☐
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the years ended December 31, 2017 and 2016
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to _____________
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Nevada
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32-0379665
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Large accelerated filer
o
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
☑
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(Do not check if a smaller reporting company)
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Emerging growth company
☑
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Page
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PART I
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Item 1.
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Business.
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3
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Item 1A.
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Risk Factors.
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33
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Item 1B.
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Unresolved Staff Comments.
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46
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Item 2.
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Properties.
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46
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Item 3.
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Legal Proceedings.
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46
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Item 4.
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Mine Safety Disclosures.
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46
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PART II
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
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47
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Item 6.
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Selected Financial Data.
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50
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Item 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations.
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50
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Item 7A.
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Quantitative and Qualitative Disclosures About Market Risk.
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57
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Item 8.
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Financial Statements and Supplementary Data.
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57
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Item 9.
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Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
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57
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Item 9A.
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Controls and Procedures.
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58
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Item 9B.
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Other Information.
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58
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PART III
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Item 10.
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Directors, Executive Officers, and Corporate Governance.
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59
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Item 11.
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Executive Compensation.
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61
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
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62
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Item 13.
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Certain Relationships and Related Transactions, and Director Independence.
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64
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Item 14.
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Principal Accounting Fees and Services.
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65
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PART IV
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Item 15.
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Exhibits, Financial Statement Schedules
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66
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Signatures
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68
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·
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being permitted to present only two years of audited financial statements and only two years of related Management’s Discussion & Analysis of Financial Condition and Results of Operations in this report on Form 10-K;
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·
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not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended, or the Sarbanes-Oxley Act;
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·
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reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements; and
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·
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exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
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·
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Haematological malignancies (leukemias, lymphomas, etc.). One of the most effective treatments for these conditions is bone marrow transplantation. However, this is a risky and difficult procedure primarily because of potential conflicts between host and donor immune systems and also due to viral infections that often follow even successful bone marrow transplantations.
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·
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The broader set of cancers, including solid tumors, that can potentially be treated effectively using genetically modified cells such as CAR-T cells, but also face efficacy and economic constraints due to limited persistence based on immune system issues.
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·
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Organ failure and transplantation. A variety of conditions can be treated by the transplantation of vital organs. However, transplantation is limited both by the problem of rejection and an insufficient supply of available donor organs.
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·
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Non-malignant haematological conditions (such as sickle cell anemia) which could, in many cases, also be effectively treated by bone marrow transplantation if the procedure did not pose such threatening conflicts between host and donor immune systems.
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a)
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many blood cancer patients are not candidates for the primary treatment (HSCT) that represents a potential cure;
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b)
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there is high mortality among those patients who are candidates for HSCT and do undergo the procedure; and
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c)
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those patients who successfully undergo and survive HSCT take dangerous, expensive, and quality-of-life reducing immunosuppression medications, typically for a prolonged period of time.
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Initial Malignancy Indications
(note estimates for
North America and EU only)
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Prevalence
(Number patients)
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Annual Bone Marrow
Transplantations
|
||||||
Non-Hodgkin’s Lymphoma
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|
920,460
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15,017
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||||
Multiple Myeloma
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216,784
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20,654
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||||||
Leukemia
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586,671
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18,582
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||||||
Total
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1,723,915
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54,253
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1)
|
As noted above, increasing incidence of these disorders in the West, largely driven by the aging population.
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2)
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Improvement and proliferation of HSCT treatments.
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3)
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A “virtuous circle” of lowered death rate due to better transplantations leading to more aggressive focus on HSCT.
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4)
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The growing use of milder conditioning regimens, which makes the procedure more survivable for older patients (see table below).
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Name: VETO CELLS EFFECTIVE IN PREVENTING GRAFT REJECTION AND DEVOID OF GRAFT VERSUS HOST POTENTIAL
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||||||||||
Country
|
Patent Number
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Filed
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Expires
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Status
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Assignee
|
|||||
USA (Basic)
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6,544,506
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05-Jan-2000
|
05-Jan-2020
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Granted
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Yeda Research and Development Co. Ltd.
|
|||||
USA (National Phase)
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7,270,810
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28-Dec-2000
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1-Dec-2021
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Granted
|
Yeda Research and Development Co. Ltd.
|
|||||
Europe
|
1244803
|
28-Dec-2000
|
28-Dec-2020
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Granted
|
Yeda Research and Development Co. Ltd.
|
|||||
Israel
|
150440
|
28-Dec-2000
|
28-Dec-2020
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Granted
|
Yeda Research and Development Co. Ltd.
|
Name: ANTI THIRD PARTY CENTRAL MEMORY T CELLS, METHODS OF PRODUCING SAME AND USE OF SAME IN TRANSPLANTATION AND DISEASE TREATMENT
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||||||||||
Country
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Patent Number
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Filed
|
Expires
|
Status
|
Assignee
|
|||||
USA
|
9,738,872
|
29-Oct-2009
|
29-Oct-2029
|
Granted
|
Yeda Research and Development Co. Ltd.
|
|||||
Europe
|
2365823
|
29-Oct-2009
|
29-Oct-2029
|
Granted
|
Yeda Research and Development Co. Ltd.
|
|||||
Israel
|
212587
|
29-Oct-2009
|
29-Oct-2029
|
Granted
|
Yeda Research and Development Co. Ltd.
|
|||||
India
|
285832
|
29-Oct-2009
|
29-Oct-2029
|
Granted
|
Yeda Research and Development Co. Ltd.
|
|||||
China
|
ZL200980153053.4
|
29-Oct-2009
|
29-Oct-2029
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Granted
|
Yeda Research and Development Co. Ltd.
|
|||||
Russian Federation
|
2506311
|
29-Oct-2009
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29-Oct-2029
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Granted
|
Yeda Research and Development Co. Ltd.
|
Name: USE OF ANTI THIRD PARTY CENTRAL MEMORY T CELLS FOR ANTI-LEUKEMIA/LYMPHOMA TREATMENT | ||||||||||
Country
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Patent Number
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Filed
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Expires
|
Status
|
Assignee
|
|||||
USA
|
9,421,228
|
08-Sep-2011
|
08-Sep-2031
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Granted
|
Yeda Research and Development Co. Ltd.
|
|||||
USA
|
2016-0354410-A1
|
08-Sep-2011
|
08-Sep-2031
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Pending
|
Yeda Research and Development Co. Ltd.
|
|||||
Japan
|
5,977,238
|
08-Sep-2011
|
08-Sep-2031
|
Granted
|
Yeda Research and Development Co. Ltd.
|
|||||
Canada
|
2,810,632
|
08-Sep-2011
|
08-Sep-2031
|
Pending
|
Yeda Research and Development Co. Ltd.
|
|||||
China
|
ZL201180053858.9
|
08-Sep-2011
|
08-Sep-2031
|
Granted
|
Yeda Research and Development Co. Ltd.
|
|||||
China
|
CN 105907713 A
|
08-Sep-2011
|
08-Sep-2031
|
Pending
|
Yeda Research and Development Co. Ltd.
|
|||||
Republic of Korea
|
10-1788826
|
08-Sep-2011
|
08-Sep-2031
|
Granted
|
Yeda Research and Development Co. Ltd.
|
|||||
Israel
|
225102
|
08-Sep-2011
|
08-Sep-2031
|
Granted
|
Yeda Research and Development Co. Ltd.
|
|||||
Brazil
|
BR 11 2013 005756 4
|
08-Sep-2011
|
08-Sep-2031
|
Pending
|
Yeda Research and Development Co. Ltd.
|
|||||
Mexico
|
MX/a/2013/002668
|
08-Sep-2011
|
08-Sep-2031
|
Allowed
|
Yeda Research and Development Co. Ltd.
|
|||||
Singapore
|
188473
|
08-Sep-2011
|
08-Sep-2031
|
Granted
|
Yeda Research and Development Co. Ltd.
|
|||||
Europe
|
2613801
|
08-Sep-2011
|
08-Sep-2031
|
Granted
|
Yeda Research and Development Co. Ltd.
|
|||||
Hong Kong
|
HK1187528
|
08-Sep-2011
|
08-Sep-2031
|
Granted
|
Yeda Research and Development Co. Ltd.
|
Name: ANTI THIRD PARTY CENTRAL MEMORY T CELLS, METHODS OF PRODUCING SAME AND USE OF SAME IN TRANSPLANTATION AND DISEASE TREATMENT | ||||||||||
Country
|
Patent Number
|
Filed
|
Expires
|
Status
|
Assignee
|
|||||
USA
|
15/825,275
|
06-Sep-2012
|
06-Sep-2032
|
Pending
|
Yeda Research and Development Co. Ltd.
|
|||||
Europe
|
2753351
|
06-Sep-2012
|
06-Sep-2032
|
Granted
|
Yeda Research and Development Co. Ltd.
|
|||||
Hong Kong
|
HK1200099
|
06-Sep-2012
|
06-Sep-2032
|
Granted
|
Yeda Research and Development Co. Ltd.
|
|||||
Japan
|
6,196,620
|
06-Sep-2012
|
06-Sep-2032
|
Granted
|
Yeda Research and Development Co. Ltd.
|
|||||
Canada
|
2,848,121
|
06-Sep-2012
|
06-Sep-2032
|
Pending
|
Yeda Research and Development Co. Ltd.
|
|||||
China
|
ZL201280054739.X
|
06-Sep-2012
|
06-Sep-2032
|
Granted
|
Yeda Research and Development Co. Ltd.
|
|||||
Australia
|
2012305931
|
06-Sep-2012
|
06-Sep-2032
|
Granted
|
Yeda Research and Development Co. Ltd.
|
|||||
Republic of Korea
|
10-2014-7009267
|
06-Sep-2012
|
06-Sep-2032
|
Pending
|
Yeda Research and Development Co. Ltd.
|
|||||
New Zealand
|
622749
|
06-Sep-2012
|
06-Sep-2032
|
Granted
|
Yeda Research and Development Co. Ltd.
|
|||||
South Africa
|
2014/01993
|
06-Sep-2012
|
06-Sep-2032
|
Granted
|
Yeda Research and Development Co. Ltd.
|
|||||
India
|
577/MUMNP/2014
|
06-Sep-2012
|
06-Sep-2032
|
Pending
|
Yeda Research and Development Co. Ltd.
|
|||||
Israel
|
231397
|
06-Sep-2012
|
06-Sep-2032
|
Pending
|
Yeda Research and Development Co. Ltd.
|
|||||
Russian Federation
|
2636503
|
06-Sep-2012
|
06-Sep-2032
|
Granted
|
Yeda Research and Development Co. Ltd.
|
|||||
Brazil
|
BR 11 2014 005355 3
|
06-Sep-2012
|
06-Sep-2032
|
Pending
|
Yeda Research and Development Co. Ltd.
|
|||||
Mexico
|
351226
|
06-Sep-2012
|
06-Sep-2032
|
Granted
|
Yeda Research and Development Co. Ltd.
|
|||||
Singapore
|
11201400513P
|
06-Sep-2012
|
06-Sep-2032
|
Granted
|
Yeda Research and Development Co. Ltd.
|
Name: GENETICALLY MODIFIED ANTI-THIRD PARTY CENTRAL MEMORY T CELLS AND USE OF SAME IN IMMUNOTHERAPY
|
||||||||||
Country
|
Patent Number
|
Filed
|
Expires
|
Status
|
Assignee
|
|||||
USA
|
15/744,905
|
14-July-2016
|
16-Jul-2036
|
Pending
|
Yeda Research and Development Co. Ltd
|
|||||
Europe
|
16750269.9
|
14-July-2016
|
16-Jul-2036
|
Pending
|
Yeda Research and Development Co. Ltd.
|
|||||
China
|
CN108135938A
|
14-July-2016
|
16-Jul-2036
|
Pending
|
Yeda Research and Development Co. Ltd.
|
|||||
Japan
|
2018-501339
|
14-July-2016
|
16-Jul-2036
|
Pending
|
Yeda Research and Development Co. Ltd.
|
|||||
Israel
|
256916
|
14-July-2016
|
16-Jul-2036
|
Pending
|
Yeda Research and Development Co. Ltd.
|
|||||
Canada
|
2,991,690
|
14-July-2016
|
16-Jul-2036
|
Pending
|
Yeda Research and Development Co. Ltd.
|
|||||
Australia
|
2016291825
|
14-July-2016
|
16-Jul-2036
|
Pending
|
Yeda Research and Development Co. Ltd.
|
Name: USE OF ANTI THIRD PARTY CENTRAL MEMORY T CELLS
|
||||||||||
Country
|
Patent Number
|
Filed
|
Expires
|
Status
|
Assignee
|
|||||
China
|
201680053579.5
|
14-Jul-2016
|
16-JuL-2036
|
Pending
|
Yeda Research and Development Co. Ltd.
|
|||||
Europe
|
16745186.3
|
14-Jul-2016
|
16-JuL-2036
|
Pending
|
Yeda Research and Development Co. Ltd.
|
Name:
METHODS OF TRANSPLANTATION AND DISEASE TREATMENT
|
||||||||||
Country
|
Patent Number
|
Filed
|
Expires
|
Status
|
Assignee
|
|||||
USA
|
15/744,881
|
14-Jul-2016
|
14-JuL-2036
|
Pending
|
Yeda Research and Development Co. Ltd.
|
Name: METHODS OF TRANSPLANTATION AND DISEASE TREATMENT
|
||||||||||
Country
|
Patent Number
|
Filed
|
Expires
|
Status
|
Assignee
|
|||||
USA
|
15/873,943
|
18-Jan-2018
|
16-Jul-2038
|
Pending
|
Yeda Research and Development Co. Ltd.
|
Name: VETO CELLS GENERATED FROM MEMORY T CELLS | ||||||||||
Country
|
Patent Number
|
Filed
|
Expires
|
Status
|
Assignee
|
|||||
PCT
|
WO2018/002924
|
27-Jun-2017
|
27-Jun-2037
|
Pending
|
Yeda Research and Development Co. Ltd.
|
Name: GENETICALLY MODIFIED VETO CELLS AND USE OF SAME IN IMMUNOTHERAPY
|
||||||||||
Country
|
Patent Number
|
Filed
|
Expires
|
Status
|
Assignee
|
|||||
PCT
|
IL2018/050071
|
18-Jan-2018
|
18-Jan-2038
|
Pending
|
Yeda Research and Development Co. Ltd.
|
Name: A COMBINATION THERAPY FOR A STABLE AND LONG TERM ENGRAFTMENT
|
||||||||||
Country
|
Patent Number
|
Filed
|
Expires
|
Status
|
Assignee
|
|||||
Singapore
|
10201801905W
|
20-Dec-2012
|
20-Dec-2032
|
Pending
|
Yeda Research and Development Co. Ltd.
|
|||||
Mexico
|
MX/a/2014/007647
|
20-Dec-2012
|
20-Dec-2032
|
Pending
|
Yeda Research and Development Co. Ltd.
|
|||||
Russian Federation
|
2657758
|
20-Dec-2012
|
20-Dec-2032
|
Granted
|
Yeda Research and Development Co. Ltd.
|
|||||
Israel
|
233303
|
20-Dec-2012
|
20-Dec-2032
|
Pending
|
Yeda Research and Development Co. Ltd.
|
India
|
1468/MUMNP/2014
|
20-Dec-2012
|
20-Dec-2032
|
Pending
|
Yeda Research and Development Co. Ltd.
|
|||||
New Zealand
|
627272
|
20-Dec-2012
|
20-Dec-2032
|
Granted
|
Yeda Research and Development Co. Ltd.
|
|||||
Republic of Korea
|
10-2014-7020449
|
20-Dec-2012
|
20-Dec-2032
|
Pending
|
Yeda Research and Development Co. Ltd.
|
|||||
Australia
|
2012355990
|
20-Dec-2012
|
20-Dec-2032
|
Granted
|
Yeda Research and Development Co. Ltd.
|
|||||
China
|
CN 104470542 A
|
20-Dec-2012
|
20-Dec-2032
|
Pending
|
Yeda Research and Development Co. Ltd.
|
|||||
Canada
|
2,859,953
|
20-Dec-2012
|
20-Dec-2032
|
Pending
|
Yeda Research and Development Co. Ltd.
|
|||||
Europe
|
2793914
|
20-Dec-2012
|
20-Dec-2032
|
Pending
|
Yeda Research and Development Co. Ltd.
|
|||||
USA
|
2014-0363437-A1
|
20-Dec-2012
|
20-Dec-2032
|
Pending
|
Yeda Research and Development Co. Ltd.
|
|||||
Hong Kong
|
15103467.1
|
20-Dec-2012
|
20-Dec-2032
|
Pending
|
Yeda Research and Development Co. Ltd.
|
Name: A COMBINATION THERAPY FOR A STABLE AND LONG TERM ENGRAFTMENT USING SPECIFIC PROTOCOLS FOR T/B CELL DEPLETION
|
||||||||||
Country
|
Patent Number
|
Filed
|
Expires
|
Status
|
Assignee
|
|||||
Singapore
|
11201403456U
|
20-Dec-2012
|
20-Dec-2032
|
Granted
|
Yeda Research and Development Co. Ltd.
|
|||||
Mexico
|
MX/a/2014/007648
|
20-Dec-2012
|
20-Dec-2032
|
Pending
|
Yeda Research and Development Co. Ltd.
|
|||||
Brazil
|
BR 11 2014 015959 9
|
20-Dec-2012
|
20-Dec-2032
|
Pending
|
Yeda Research and Development Co. Ltd.
|
|||||
Russian Federation
|
2648354
|
20-Dec-2012
|
20-Dec-2032
|
Granted
|
Yeda Research and Development Co. Ltd.
|
|||||
Israel
|
233302
|
20-Dec-2012
|
20-Dec-2032
|
Pending
|
Yeda Research and Development Co. Ltd.
|
|||||
India
|
1467/MUMNP/2014
|
20-Dec-2012
|
20-Dec-2032
|
Pending
|
Yeda Research and Development Co. Ltd.
|
|||||
South Africa
|
2014/05298
|
20-Dec-2012
|
20-Dec-2032
|
Granted
|
Yeda Research and Development Co. Ltd.
|
|||||
New Zealand
|
627549
|
20-Dec-2012
|
20-Dec-2032
|
Granted
|
Yeda Research and Development Co. Ltd.
|
|||||
Australia
|
2012355989
|
20-Dec-2012
|
20-Dec-2032
|
Granted
|
Yeda Research and Development Co. Ltd.
|
|||||
Australia
|
2016259415
|
20-Dec-2012
|
20-Dec-2032
|
Allowed
|
Yeda Research and Development Co. Ltd.
|
|||||
China
|
CN 104093314 A
|
20-Dec-2012
|
20-Dec-2032
|
Pending
|
Yeda Research and Development Co. Ltd.
|
|||||
Canada
|
2,859,952
|
20-Dec-2012
|
20-Dec-2032
|
Pending
|
Yeda Research and Development Co. Ltd.
|
|||||
Japan
|
6,313,219
|
20-Dec-2012
|
20-Dec-2032
|
Granted
|
Yeda Research and Development Co. Ltd.
|
|||||
Europe
|
2797421
|
20-Dec-2012
|
20-Dec-2032
|
Pending
|
Yeda Research and Development Co. Ltd.
|
|||||
USA
|
2014-0369974-A1
|
20-Dec-2012
|
20-Dec-2032
|
Pending
|
Yeda Research and Development Co. Ltd.
|
|||||
Hong Kong
|
15103468.0
|
20-Dec-2012
|
20-Dec-2032
|
Pending
|
Yeda Research and Development Co. Ltd.
|
1)
|
Significantly improve outcomes of transplantations by reducing host rejection rate of T-cell depleted bone marrow, markedly reducing both the risk of GVHD and the need for using aggressive amounts of immunosuppression medications, as well as preventing viral infections that typically threaten patients post transplantation. This would significantly reduce the HSCT transplant mortality rate and therefore lead to broader use of this treatment.
|
2)
|
Substantively increase the number of transplantations by enabling lower myeloablative conditioning and therefore making the therapy accessible to older and sicker patients (who today may not survive ablation).
|
3)
|
Further increase the number of transplantations by making transplantation appropriate for other indications (for which today transplantation would be considered an inappropriately risky treatment).
|
·
|
Gene modified cell therapy is considered to be one of the most promising cancer treatment approaches in decades, with companies like Kite Pharma and JUNO Therapeutics having recently been acquired at multi-billion dollar valuations after having successfully treated relatively small numbers of patients in clinical trails.
|
·
|
While gene modified treatments such as CAR-T have shown remarkable results in cancer treatment trials, their published successes to date have been mostly limited to “autologous” blood cell cancer treatments using the patient’s own cells. There are concerns that this type of “personalized” treatment may not have favorable economics on a large scale basis.
|
·
|
The ideal more lucrative commercial path for CAR-T and similar genetically engineered cell therapies is to become “allogeneic” or off-the-shelf product with drug-like distribution economics and to treat a broad spectrum of cancers including solid tumors.
|
·
|
Preclinical data show that Veto Cells can help genetically modified T-cells from the same donor to overcome rejection issues (among the problems exhibited to date by CAR-T therapy in an allogeneic setting), hence significantly increasing their persistence (longevity) and thus their efficacy in eradicating cancer. Based on this preclinical data, Cell Source believes that Veto Cells could potentially enable the use of Off-the-shelf CAR-T cells directed against malignant cells.
|
·
|
Other than primary disease (typically blood cell cancer) the leading causes of death in unrelated donor bone marrow transplants are rejection, GVHD (Graft vs. Host Disease, where the donor bone marrow rejects the host or recipient), and infections, which collectively are responsible for 30% of deaths after unrelated donor transplants within the first 100 days post transplant.
|
·
|
It is well established that GVHD can be prevented by T cell depletion of the bone marrow transplant. However, this procedure is also is associated with an increased rate of graft rejection. Preclinical studies clearly suggest that this problem can be overcome by adding Veto Cells to the bone marrow transplant. However, viruses such as CMV and EBV remain a major threat to patients post-transplant.
|
·
|
Cell Source has developed a next generation Veto Cell that not only facilitates mismatched transplants but also protects the transplant recipient against these common viruses. During the initial period after a stem cell transplantation the patient’s body undergoes an immune system reconstitution period. While the “new” immune system is building up, the patient is particularly vulnerable to viral infections such as CMV, an infection that is typically development in about half of bone marrow transplant recipients during the first 100 days post transplantation. Veto cells can fend off CMV until such time as the patient’s own immune system reconstitutes to the point that it can fight off the infection on its own.
|
·
|
Combining GVHD prevention by using T cell depleted transplants with anti-rejection action as well as virus prevention, Veto Cell could potentially significantly increase survival rates post-transplant.
|
·
|
Based on preclinical data, veto cells can also be used to facilitate organ transplants (e.g. kidney transplant combined with a bone marrow transplant) with partially mismatched donors and either reduce or eliminate the need for lifelong daily anti-rejection treatment currently given to even fully matched donor organ recipients.
|
·
|
Cell Source is currently in the process of attaining regulatory validation for the production of its Anti-viral Veto Cells in Europe and plans to commence doing so in the US this year, with a view to commencing human clinical trials by the end of 2018.
|
1)
|
It has an outer surface coating that triggers attack by specific host T-cells (and only those specific T-cells).
|
2)
|
It can annihilate an attacking T-cell without itself being damaged (specifically, it exposes or releases a death-signaling molecule when an attacking T-cell binds to it).
|
3)
|
It has been oriented to attack cells of a simulated third party (i.e., neither host nor donor) and thus exhibits markedly reduced risk of GVHD or graft rejection.
|
4)
|
It is long-lived and endures in the body for extended periods.
|
5)
|
It migrates to the thymus and lymph nodes.
|
1)
|
It destroys the host T-cells so they will not attack (reject) the donor bone marrow cells.
|
2)
|
It makes space in the host bone marrow for the new donor cells.
|
3)
|
It destroys diseased host blood cells so that they do not proliferate and cause relapse following the procedure.
|
·
|
Host rejection - the myeloablative conditioning does not destroy all of the host T-cells. Those that remain may aggressively attack the donor bone marrow cells before they can engraft.
|
·
|
“Graft versus Host Disease” (GVHD) -the transplanted cells include donor T-cells which recognize the host's body as foreign and attack it.
|
·
|
Viral infections are a common complication from HSCT and result in 20% of early patients deaths in unrelated-donor transplants in the US
|
Offering
|
Objective
|
Major Activities
|
Estimated Start Date
|
|||
Anti-viral Veto Cell
|
Validate and introduce new commercial treatment to increase engraftment of allogeneic bone marrow transplantations
|
1. Regulatory approval and treatment protocols
2. Conduct human clinical trials
3. Develop plan for commercial exploitation
|
·
Initiate a human clinical trial in the US by 2019
·
Commence human trials in Europe in 2019 or 2020
|
|||
Veto – CAR-T Cell Therapy
|
Validate the possibility of combining Veto Cell treatment with CAR-T cell treatment for both blood cell cancer and solid tumor cancer treatment
|
4. Collaboration with Zelig Eshhar, inventor of Car-T cells
5. Validate combined treatment model in preclinical trials
|
·
Proof of concept in 2018
·
If preclinical studies are successful , human trials
would be the next step
|
1. |
Anti-rejection” Veto Cell tolerance therapy for both matched and mismatched allogeneic bone marrow transplantations
.
|
2. |
Anti-cancer” Veto + CAR-T cell therapy for blood cell and solid tumor cancers
.
|
3. |
Anti-rejection” Veto Cell tolerance therapy for both matched and mismatched organ transplantatio
n.
|
4. |
Veto Cell tolerance therapy for non-malignant disorders.
|
1)
|
Complete development of human treatment protocol (2-5 years)
|
2)
|
Apply for and receive approval to commence human trials (9-18 months)
|
3)
|
Recruit patients (1-6 months)
|
4)
|
Conduct Phase I trials showing safety of product (1-2 years)
|
5)
|
Apply for and receive approval to conduct trials showing product efficacy (6-12 months)
|
6)
|
Data collecting and analysis (6-12 months)
|
7)
|
Conduct Phase II efficacy trials (2-3 years)
|
8)
|
Data collecting and analysis (6-12 months)
|
9)
|
Apply for and receive approval to conduct trials showing efficacy in larger numbers of patients (6-12 months)
|
10)
|
Conduct Phase III efficacy trials with larger numbers of patients (2-4 years)
|
11)
|
Data collecting and analysis (6-12 months)
|
12)
|
Apply for and receive approval for production scale manufacturing facilities (6-12 months)
|
13)
|
Contract third party or establish own production facilities (6-30 months)
|
14)
|
Contract third party or establish own distribution platform (6-18 months)
|
15)
|
Commence manufacturing and distribution (6-12 months)
|
·
|
successfully complete adequate and well-controlled clinical trials that demonstrate statistically significant safety and efficacy and to obtain all requisite regulatory approvals in a timely and cost-effective manner;
|
·
|
effectively use patents and possibly exclusive partnership agreements with important third party treatment providers and collaborations partners to maintain a stable competitive stance for our Technology;
|
·
|
attract and retain appropriate clinical and commercial personnel and service providers; and
|
·
|
establish adequate distribution relationships for our products.
|
Strategy
Element
|
Introductory period
(years 1 -3 post FDA approval)
|
Years 4+
|
||
Market Segments
|
·
Lymphoma and Leukemia
·
Solid tumors e.g. breast cancer.
|
·
Same as before plus broader set of solid tumor targets, kidney and liver
failure, sickle cell anemia beta thalassemia and other non-malignant
hematological disorders;
|
||
Product Rollout
|
·
Veto Cell therapy for B-cell malignancies
·
Veto+CAR-T Veto Cell therapy for both blood cell and solid tumor
cancers
|
·
Veto Cell tolerizing treatment for HSCT and organ transplantation
·
Veto Cell therapy for cancer and non-malignant disorders;
|
||
Customer/ Geographic Focus
|
·
North America
·
Western Europe
·
China
|
·
North America, Western & Eastern Europe, Australia/New Zealand,
Russia, Brazil, selected Asian markets
|
||
Channels/Go to Market
|
·
Direct relationships with leading transplantation centers
·
International production and distribution through partners
|
·
Partnership with global market leaders
|
||
Pricing
|
·
Consistent with other cell therapy offerings currently associated with
transplantations and immuno-oncology
|
·
Potentially higher volume, lower cost for “off the shelf” offerings
|
||
Operations
|
·
Three production centers:
-
US
-
Western Europe
-
Far East
·
Initial capacity leased from major transplantation centers.
|
·
Regional production centers owned or JV with partners
|
1)
|
Severity of unmet medical need: degree of severity of the indication and the effectiveness of existing treatments. These criteria help determine the proper regulatory pathway.
|
2)
|
Technology relevance: relative value of the ability to manage immune response to the treatment of a given indication.
|
1)
|
Treating patients after the end of Phase 2 (with either partial or full insurance reimbursement available); and
|
2)
|
Potential upfront and milestone driven licensing revenues from collaborations with third parties.
|
a.
|
by January 1, 2022, to have commenced Phase II clinical trials in a respect of a Product;
|
b.
|
by January 1, 2025, to have either ommnenced Phase III clinical trials or to have received FDA or EMA marketing approval in a respect of a Product (“Marketing Approval”);
|
c.
|
within 12 (twelve) months from the date of Marketing Approval, to have made a First Commercial Sale of a Product; or
|
d.
|
in case commercial sale of any Product having commenced, there shall be a period of 12 (twelve) months or more during which no sales of any Product shall take place by the Company or its Sublicensees (except as a result of force majeure or other factors beyond the control of the Company)."
|
·
|
Title.
All right, title and interest in and to the Licensed Information and the Patents (as those terms are defined in the Yeda License Agreement) and all right, title and interest in and to any drawings, plans, diagrams, specifications, other documents, models, or any other physical matter in any way containing, representing or embodying any of the foregoing, vest and shall vest in Yeda and subject to the license granted in the Yeda License Agreement.
|
·
|
Patents.
Both Yeda and the Company shall consult with one another on the filing of patent applications for any portion of Licensed Information and/or corresponding to patent application existing at the time the Yeda License Agreement was executed. Yeda shall retain outside patent counsel that will be approved by Cell Source, to prepare, file and prosecute patent applications. All applications will be filed in Yeda’s name.
|
·
|
Patents; Patent Infringements.
Where the Company determines that a third party is infringing one or more of the Patents or is sued, in prosecuting or defending such litigation, the Company must pay any expenses or costs or other liabilities incurred in connection with such litigation (including attorney’s fees, costs and other sums awarded to the counterparty in such action). The Company agreed to indemnify Yeda against any such expenses or costs or other liabilities.
|
·
|
License.
With regard to the expiration of Patents, a Product is deemed to be covered by a Patent so long as such Product is protected by “Orphan Drug” status (or the like). The Company has an exclusive worldwide license under the Licensed Information and the Patents for the development, manufacture and sales of the Products. License remains in force in each country with respect to each Product until the later of (i) the expiration of the last Patent in such country covering such Product or (ii) the expiration of a 15-year period commencing the day FDA New Drug Approval is received for a Product in such country.
|
i.
|
the proposed Sublicense is for monetary consideration only;
|
ii.
|
the proposed Sublicense is to be granted in a bona fide arm’s length commercial transaction;
|
iii.
|
a copy of the agreement granting the Sublicense and all amendments thereof shall be made available to Yeda, 14 days before their execution and Cell Source shall submit to Yeda copies of all such Sublicenses and all amendments thereof promptly upon execution thereof; and
|
iv.
|
the proposed Sublicense is made by written agreement, the provisions of which are consistent with the terms of the License and contain, inter alia, the following terms and conditions, including: the Sublicense shall expire automatically on the termination of the License for any reason.
|
·
|
Termination.
The Yeda License Agreement terminates on the later of: (i) the expiration of the last of the Patents or (ii) the expiry of a continuous period of 20 years during which there shall not have been a First commercial sale of any product in any country. Yeda may terminate by written notice, effective immediately, if the Company challenges the validity of any of the Patents. If a challenge is unsuccessful, then in addition to Yeda’s right to termination, the Company shall pay to Yeda liquidated damages in the amount of $8,000,000. Either the Company or Yeda may terminate the Yeda License Agreement and the License by serving a written notice upon (i) occurrence of a material breach or (ii) the granting of a winding-up order. Additionally, Yeda may terminate for failure to reimburse Yeda for patent application and/or prosecution expenses.
|
·
|
the degree and range of protection any patents will afford us against competitors, including whether third parties will find ways to invalidate or otherwise circumvent the patents that we license;
|
·
|
whether or not others will obtain patents claiming aspects similar to those covered by the patents that we license; or
|
·
|
whether we will need to initiate litigation or administrative proceedings, which may be costly whether we win or lose.
|
·
|
the duration of the clinical trial;
|
·
|
the number of sites included in the trials;
|
·
|
the countries in which the trial is conducted;
|
·
|
the length of time required and ability to enroll eligible patients;
|
·
|
the number of patients that participate in the trials;
|
·
|
the number of doses that patients receive;
|
·
|
the drop-out or discontinuation rates of patients;
|
·
|
per patient trial costs;
|
·
|
third party contractors failing to comply with regulatory requirements or meet their contractual obligations to us in a timely manner;
|
·
|
our final product candidates having different properties in humans than in laboratory testing;
|
·
|
the need to suspend or terminate our clinical trials;
|
·
|
insufficient or inadequate supply of quality of necessary materials to conduct our trials;
|
·
|
potential additional safety monitoring, or other conditions required by FDA or comparable foreign regulatory authorities regarding the scope or design of our clinical trials, or other studies requested by regulatory agencies;
|
·
|
problems engaging institutional review boards (“IRB”) to oversee trials or in obtaining and maintaining IRB approval of studies;
|
·
|
the duration of patient follow-up;
|
·
|
the efficacy and safety profile of a product candidate;
|
·
|
the costs and timing of obtaining regulatory approvals; and
|
·
|
the costs involved in enforcing or defending patent claims or other intellectual property rights.
|
·
|
delays in the development of manufacturing capabilities for our product candidates to enable their consistent production at clinical trial scale;
|
·
|
delays in the commencement of clinical trials as a result of clinical trial holds or the need to obtain additional information to complete an Investigational New Drug Application (IND);
|
·
|
delays in obtaining regulatory approval to commence new trials;
|
·
|
adverse safety events experienced during our clinical trials;
|
·
|
insufficient efficacy during trials leading to withdrawal of product candidate;
|
·
|
delays in obtaining clinical materials;
|
·
|
slower than expected patient recruitment for participation in clinical trials; and
|
·
|
delays in reaching agreement on acceptable clinical trial agreement terms with prospective sites or obtaining institutional review board approval.
|
·
|
our clinical trials may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical and/or preclinical testing or to abandon programs;
|
·
|
the results obtained in earlier stage clinical testing may not be indicative of results in future clinical trials;
|
·
|
clinical trial results may not meet the level of statistical significance required by the FDA or other regulatory agencies;
|
·
|
enrollment in our clinical trials for our product candidates may be slower than we anticipate, resulting in significant delays and additional expense;
|
·
|
we, or regulators, may suspend or terminate our clinical trials if the participating patients are being exposed to unacceptable health risks; and
|
·
|
the effects of our product candidates on patients may not be the desired effects or may include undesirable side effects or other characteristics that may delay or preclude regulatory approval or limit their commercial use, if approved.
|
·
|
the therapeutic endpoints chosen for evaluation;
|
·
|
the eligibility criteria defined in the protocol;
|
·
|
the perceived benefit of the investigational drug under study;
|
·
|
the size of the patient population required for analysis of the clinical trial’s therapeutic endpoints;
|
·
|
our ability to recruit clinical trial investigators and sites with the appropriate competencies and experience;
|
·
|
our ability to obtain and maintain patient consents; and
|
·
|
competition for patients by clinical trial programs for other treatments.
|
·
|
variations in our quarterly operating results;
|
·
|
announcements that our revenue or income are below analysts’ expectations;
|
·
|
general economic slowdowns;
|
·
|
sales of large blocks of the Company’s Common Stock; and
|
·
|
announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments.
|
·
|
Ten notes with principal amounts totaling $575,000 that matured January 2017 through September 2017.
|
·
|
Seven notes with principal amounts totaling $485,000 that matured February 2018 through May 2018.
|
·
|
Seven notes with principal amounts totaling $1,063,000 that matured June 2016 through December 2017.
|
·
|
Two notes with principal amounts totaling $350,000 that matured in January 2018 and March 2018.
|
·
|
Only two years of audited financial statements in addition to any required unaudited interim financial statements with correspondingly reduced "Management's Discussion and Analysis of Financial Condition and Results of Operations" disclosure;
|
·
|
Reduced disclosure about our executive compensation arrangements;
|
·
|
No non-binding advisory votes on executive compensation or golden parachute arrangements;
|
·
|
Exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting.
|
·
|
our ability to raise funds for general corporate purposes and operations, including our clinical trials;
|
·
|
the commercial feasibility and success of our technology;
|
·
|
our ability to recruit qualified management and technical personnel;
|
·
|
the success of our clinical trials;
|
·
|
our ability to obtain and maintain required regulatory approvals for our products; and
|
·
|
the other factors discussed in the “Risk Factors” section and elsewhere in this Annual Report on Form 10-K.
|
2018 Fiscal Year
|
||||||||
High
|
Low
|
|||||||
First Quarter ended March 31, 2018
|
$
|
0.43
|
$
|
0.25
|
||||
Second Quarter ended June 30, 2018
|
$
|
0.85
|
$
|
0.42
|
2017 Fiscal Year
|
||||||||
High
|
Low
|
|||||||
First Quarter ended March 31, 2017
|
$
|
0.53
|
$
|
0.35
|
||||
Second Quarter ended June 30, 2017
|
$
|
0.45
|
$
|
0.25
|
||||
Third Quarter ended September 30, 2017
|
$
|
0.40
|
$
|
0.30
|
||||
Fourth Quarter ended December 31, 2017
|
$
|
0.4
5
|
$
|
0.20
|
2016 Fiscal Year
|
||||||||
High
|
Low
|
|||||||
First Quarter ended March 31, 2016
|
$
|
1.55
|
$
|
0.75
|
||||
Second Quarter ended June 30, 2016
|
$
|
1.10
|
$
|
0.80
|
||||
Third Quarter ended September 30, 2016
|
$
|
1.50
|
$
|
0.72
|
||||
Fourth Quarter ended December 31, 2016
|
$
|
1.10
|
$
|
0.45
|
2015 Fiscal Year
|
||||||||
High
|
Low
|
|||||||
First Quarter ended March 31, 2015
|
$
|
1.35
|
$
|
0.20
|
||||
Second Quarter ended June 30, 2015
|
$
|
1.60
|
$
|
0.73
|
||||
Third Quarter ended September 30, 2015
|
$
|
1.39
|
$
|
1.00
|
||||
Fourth Quarter ended December 31, 2015
|
$
|
1.60
|
$
|
1.05
|
1. |
Complete development of human treatment protocol (2-5 years)
|
2. |
Apply for and receive approval to commence human trials (9-18 months)
|
3. |
Recruit patients (1-6 months)
|
4. |
Conduct Phase I trials showing safety of product (1-2 years)
|
5. |
Apply for and receive approval to conduct trials showing product efficacy (6-12 months)
|
6. |
Data collecting and analysis (6-12 months)
|
7. |
Conduct Phase II efficacy trials (2-3 years)
|
8. |
Data collecting and analysis (6-12 months)
|
9. |
Apply for and receive approval to conduct trials showing efficacy in larger numbers of patients (6-12 months)
|
10. |
Conduct Phase III efficacy trials with larger numbers of patients (2-4 years)
|
11. |
Data collecting and analysis (6-12 months)
|
12. |
Apply for and receive approval for production scale manufacturing facilities (6-12 months)
|
13. |
Contract third party or establish own production facilities (6-30 months)
|
14. |
Contract third party or establish own distribution platform (6-18 months)
|
15. |
Commence manufacturing and distribution (6-12 months)
|
For the Year Ended
|
||||||||||||
December 31,
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
Revenues
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||
Operating Expenses
|
||||||||||||
Research and development
|
637,318
|
554,185
|
392,925
|
|||||||||
Research and development - related party
|
839,538
|
812,638
|
829,970
|
|||||||||
Selling, general and administrative
|
815,947
|
951,783
|
1,097,580
|
|||||||||
Total Operating Expenses
|
2,292,803
|
2,318,606
|
2,320,475
|
|||||||||
Loss From Operations
|
(2,292,803
|
)
|
(2,318,606
|
)
|
(2,320,475
|
)
|
||||||
Other (Expense) Income
|
||||||||||||
Interest expense
|
(174,970
|
)
|
(243,425
|
)
|
(32,612
|
)
|
||||||
Interest expense - related parties
|
(3,000
|
)
|
(3,000
|
)
|
(3,000
|
)
|
||||||
Amortization of debt discount
|
(389,218
|
)
|
(1,238,351
|
)
|
(340,668
|
)
|
||||||
Amortization of debt discount - related parties
|
(48,944
|
)
|
(35,000
|
)
|
(15,600
|
)
|
||||||
Change in fair value of derivative liability
|
590,173
|
2,870,600
|
208,250
|
|||||||||
Loss on exchange of notes payable for preferred shares
|
(725,355
|
)
|
-
|
-
|
||||||||
Loss on exchange of warrants for common shares
|
(38,393
|
)
|
-
|
-
|
||||||||
Total Other (Expense) Income
|
(789,707
|
)
|
1,350,824
|
(183,630
|
)
|
|||||||
Net Loss
|
$
|
(3,082,510
|
)
|
$
|
(967,782
|
)
|
$
|
(2,504,105
|
)
|
December 31,
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
Cash
|
$
|
371,048
|
$
|
3,735
|
$
|
6,944
|
||||||
Working capital deficiency
|
$
|
(4,557,374
|
)
|
$
|
(6,243,356
|
)
|
$
|
(5,711,374
|
)
|
Name
|
Age
|
Title(s)
|
Dennis Brown
|
68
|
Director (Chairman)
|
Itamar Shimrat
|
58
|
Chief Executive Officer, Chief Financial Officer and Director
|
Yoram Drucker
|
52
|
Director
|
David Zolty
|
68
|
Director
|
Ben Friedman
|
59
|
Director
|
1. |
any bankruptcy petition filed by or against such person or any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
|
2. |
any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
|
3. |
being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from or otherwise limiting his involvement in any type of business, securities or banking activities or to be associated with any person practicing in banking or securities activities;
|
4. |
being found by a court of competent jurisdiction in a civil action, the SEC or the Commodity Futures Trading Commission to have violated a Federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;
|
5. |
being subject of, or a party to, any Federal or state judicial or administrative order, judgment decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of any Federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
|
6. |
being subject of or party to any sanction or order, not subsequently reversed, suspended, or vacated, of any self-regulatory organization, any registered entity or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
|
Name and
|
Stock
|
Option
|
All Other
|
||||||||||||||||||||||
Principal Position
|
Year
|
Salary
|
Bonus
|
Awards
|
Awards
|
Compensation
|
Total
|
||||||||||||||||||
Itamar Shimrat
|
2017 | $ |
179,064
|
$ | - | $ | - | $ | - | $ | - | $ |
179,064
|
||||||||||||
Chief Executive Officer
|
2016 | $ |
184,728
|
$ | - | $ | - | $ | - | $ | - | $ |
184,728
|
||||||||||||
|
2015
|
$ | 181,198 | $ | - | $ | - | $ | 212,000 | (1) | $ | - | $ | 393,198 |
(1)
|
On November 10, 2014, in connection with the effectiveness of the Registration Statement, the Company became obligated to issue to certain founders of Cell Source Limited (including Itamar Shimrat) five-year warrants to purchase an aggregate of 3,000,000 shares of common stock at an exercise price of $0.75 per share. The warrants were issued during the year ended December 31, 2015. The amount above represents the grant date fair value of the warrant to purchase 750,000 shares of common stock issued to Itamar Shimrat during the years ended December 31, 2015, calculated in accordance with FASB ASC Topic 718. For a detailed discussion of the assumptions used in estimating fair values, see Note 4 – Fair Value in the notes that accompany our consolidated financial statements.
|
Option Awards
|
Stock Awards
|
||||||||||||||||||||||||||||||||
Equity
|
|||||||||||||||||||||||||||||||||
incentive
|
|||||||||||||||||||||||||||||||||
plan
|
|||||||||||||||||||||||||||||||||
Equity
|
awards:
|
||||||||||||||||||||||||||||||||
incentive
|
Market or
|
||||||||||||||||||||||||||||||||
Equity
|
plan
|
payout
|
|||||||||||||||||||||||||||||||
incentive
|
awards:
|
value of
|
|||||||||||||||||||||||||||||||
plan awards:
|
Number of
|
unearned
|
|||||||||||||||||||||||||||||||
Number of
|
Number of
|
Number of
|
Number
|
Market
|
unearned
|
shares,
|
|||||||||||||||||||||||||||
securities
|
securities
|
securities
|
of shares
|
value of
|
shares,
|
units or
|
|||||||||||||||||||||||||||
underlying
|
underlying
|
underlying
|
or units of
|
shares of
|
units or
|
other
|
|||||||||||||||||||||||||||
unexercised
|
unexercised
|
unexercised
|
Option
|
Option
|
stock that
|
units
|
other rights
|
rights
|
|||||||||||||||||||||||||
options
|
options
|
unearned
|
exercise
|
expiration
|
have not
|
that have
|
that have
|
that have
|
|||||||||||||||||||||||||
Name
|
exercisable
|
unexercisable
|
options
|
price
|
date
|
vested
|
not vested
|
not vested
|
not vested
|
||||||||||||||||||||||||
Itamar Shimrat
|
750,000
|
-
|
-
|
$
|
0.75
|
11/10/2019
|
-
|
$
|
-
|
-
|
$
|
-
|
Change in
|
|||||||||||||||||||||||||
Present Value
|
|||||||||||||||||||||||||
and
|
|||||||||||||||||||||||||
Fees
|
Nonqualified
|
||||||||||||||||||||||||
Earned or
|
Deferred
|
||||||||||||||||||||||||
Paid In
|
Stock
|
Option
|
Compensation
|
All Other
|
|||||||||||||||||||||
Year
|
Salary
|
Awards
|
Awards
|
Earnings
|
Compensation
|
Total
|
|||||||||||||||||||
Dennis Brown
|
2017
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
2016 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||
Yoram Drucker
|
2017
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
2016 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||
David Zolty
|
2017
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
2016 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||
Ben Friedman
|
2017
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
2016 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - |
As of July 23, 2018
|
|||||||||
Name and Address of Beneficial Owner (10)
|
Amount and Nature
of
Beneficial Ownership (1)
|
Percentage of
Class (2)
|
|||||||
Directors and Officers:
|
|||||||||
Yoram Drucker, Director
|
|
1,125,004
|
(3)
|
4.34
|
%
|
||||
Itamar Shimrat, Chief Executive Officer, Chief Financial Officer and Director
|
1,301,110
|
(4) |
4.99
|
%
|
|||||
David Zolty, Director
|
1,108,318
|
(5) |
4.99
|
%
|
|||||
Ben Friedman, Director (6)
|
4,383,344
|
(7) |
17.76
|
%
|
|||||
Dennis Brown, Director (Executive Chairman)
|
200,000
|
(8) |
*
|
||||||
All directors and executive officers as a group (5 persons)
|
8,117,776
|
30.36
|
%
|
||||||
Yeda Research & Development Co. Ltd.
P.O. Box 95
Rehovot, 76100, Israel
|
|
1,270,439
|
(9) |
4.99
|
%
|
* |
less than 1%
|
(1) |
Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of common stock subject to options or warrants currently exercisable or convertible, or exercisable or convertible within 60 days of July 23, 2018 are deemed outstanding for computing the percentage of the person holding such option or warrant but are not deemed outstanding for computing the percentage of any other person.
|
(2) |
Based on 25,349,236 shares issued and outstanding as of July 23, 2018.
|
(3) |
Includes a five-year warrant to purchase 550,000 shares of common stock with an exercise price of $0.75 per share.
|
(4) |
Includes 725,136 shares of a five-year warrant to purchase 750,000 shares of common stock with an exercise price of $0.75 per share, which warrant is subject to a 4.99% conversion limitation.
|
(5) |
Includes a five-year warrant to purchase 12,500 shares of common stock with an exercise price of $0.75 per share.
|
(6) |
Mr. Friedman’s beneficial ownership includes shares beneficially owned by his wife, Phyllis Friedman.
|
(7) |
Excludes a five-year warrant to purchase 50,000 shares of common stock with an exercise price of $0.75 per share, which warrant is subject to a 4.99% conversion limitation.
|
(8) |
Includes a five-year warrant to purchase 100,000 shares of common stock with an exercise price of $0.75 per share.
|
(9) |
Includes 110,467 shares of a five-year warrant to purchase 1,995,376 shares of common stock with an exercise price of $0.001 per share, which warrant is subject to a 4.99% conversion limitation.
|
(10) |
Except as otherwise indicated, the address of each beneficial owner is c/o Cell Source, Inc., 57 West 57
th
Street, Suite 400, New York, New York 10019.
|
As of December 31, 2016
|
|||||||||
Name and Address of Beneficial Owner (10)
|
Amount and Nature
of
Beneficial Ownership (1)
|
Percentage of
Class (2)
|
|||||||
Directors and Officers:
|
|||||||||
Yoram Drucker, Director
|
|
1,125,004
|
(3) |
4.46
|
%
|
||||
Itamar Shimrat, Chief Executive Officer, Chief Financial Officer and Director
|
1,265,974
|
(4) |
4.99
|
%
|
|||||
David Zolty, Director
|
1,108,318
|
(5) |
4.49
|
%
|
|||||
Ben Friedman, Director (6)
|
4,383,344
|
(7) |
17.76
|
%
|
|||||
Dennis Brown, Director (Executive Chairman)
|
200,000
|
(8) |
*
|
||||||
All directors and executive officers as a group (5 persons)
|
8,082,640
|
31.05
|
%
|
||||||
Yeda Research & Development Co. Ltd.
P.O. Box 95
Rehovot, 76100, Israel
|
1,235,251
|
(9) |
4.99
|
%
|
* |
less than 1%
|
(1) |
Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of common stock subject to options or warrants currently exercisable or convertible, or exercisable or convertible within 60 days of December 31, 2016
are deemed outstanding for computing the percentage of the person holding such option or warrant but are not deemed outstanding for computing the percentage of any other person.
|
(2) |
Based on 24,679,256 shares issued and outstanding as of December 31, 2016.
|
(3) |
Includes a five-year warrant to purchase 550,000 shares of common stock with an exercise price of $0.75 per share.
|
4) |
Includes 690,970 shares of a five-year warrant to purchase 750,000 shares of common stock with an exercise price of $0.75 per share, which warrant is subject to a 4.99% conversion limitation.
|
5) |
Includes a five-year warrant to purchase 12,500 shares of common stock with an exercise price of $0.75 per share.
|
(6) |
Mr. Friedman’s beneficial ownership includes shares beneficially owned by his wife, Phyllis Friedman.
|
(7) |
Excludes a five-year warrant to purchase 50,000 shares of common stock with an exercise price of $0.75 per share, which warrant is subject to a 4.99% conversion limitation.
|
(8) |
Includes a five-year warrant to purchase 100,000 shares of common stock with an exercise price of $0.75 per share.
|
(9) |
Includes 75,279 shares of a five-year warrant to purchase 1,995,376 shares of common stock with an exercise price of $0.001 per share, which warrant is subject to a 4.99% conversion limitation.
|
(10) |
Except as otherwise indicated, the address of each beneficial owner is c/o Cell Source, Inc., 57 West 57
th
Street, Suite 400, New York, New York 10019.
|
|
For the Years Ended
December 31,
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
Audit Fees
|
$
|
73,000
|
$
|
123,000
|
$
|
111,000
|
||||||
Tax fees
|
--
|
--
|
3,605
|
|||||||||
All other fees
|
--
|
--
|
--
|
|||||||||
$
|
73,000
|
$
|
123,000
|
$
|
114,605
|
10.28(13)
|
Form of July 2015 Warrant
|
|
10.29(15)
|
Form of Bridge Note Subscription Agreement
|
|
10.30(15)
|
Form of Convertible Note
|
|
10.31(15)
|
Form of March 2016 Note
|
|
10.32(15)
|
Form of March 2016 Warrant
|
|
10.33 *
|
Form of July 2016 Warrants
|
|
10.34 *
|
Second Amendment to Research and License Agreement dated as of Novmber 28, 2016 between the Company and Yeda Research and Development Company Limited
|
|
10.35 *
|
Third Amendment to Research and License Agreement dated as of March 29, 2018 between the Company and Yeda Research and Development Company Limited
|
|
10.36 *
|
Fourth Amendment to Research and License Agreement dated as of March 30, 2018 between the Company and Yeda Research and Development Company Limited
|
|
10.37(16)
|
Convertible Note due July 27, 2016
|
|
10.38(17)
|
Promissory Note dated May 10, 2016
|
|
16.1(1)
|
|
Letter from Paritz & Company, P.A.
|
21(14)
|
|
Subsidiaries
|
31.1 *
|
|
Certification of principal executive and principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
32.1 *
|
|
Certification of principal executive and principal financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
101.INS *
|
|
XBRL Instance Document
|
101.SCH *
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL *
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF *
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB *
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE *
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
(1) |
Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 1, 2014.
|
(2) |
Incorporated by reference to the Company’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on June 6, 2012.
|
(3) |
Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on June 26, 2014.
|
(4) |
Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on June 6, 2014.
|
(5) |
Incorporated by reference to the Company’s Form 10-Q filed with the Securities and Exchange Commission on August 19, 2014.
|
(6) |
Incorporated by reference to the Company’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on August 8, 2014.
|
(7) |
Incorporated by reference to the Company’s Registration Statement Form S-1/A filed with the Securities and Exchange Commission on September 23, 2014.
|
(8) |
Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on June 30, 2014.
|
(9) |
Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on December 2, 2014.
|
(10) |
Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on April 1, 2015.
|
(11) |
Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on June 3, 2015.
|
(12) |
Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on June 10, 2015.
|
(13) |
Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on July 28, 2015.
|
(14) |
Incorporated by reference to the Company’s Form 10-K filed with the Securities and Exchange Commission on March 13, 2015.
|
(15) |
Incorporated by reference to the Company’s Form 10-K filed with the Securities and Exchange Commission on April 14, 2016.
|
(16) |
Incorporated by reference to the Company’s Form 10-Q filed with the Securities and Exchange Commission on May 13, 2016.
|
(17) |
Incorporated by reference to the Company’s Form 10-Q filed with the Securities and Exchange Commission on August 15, 2016.
|
CELL SOURCE, INC.
|
|||
Dated: July 24, 2018
|
By:
|
/s/ Itamar Shimrat
|
|
Name:
|
Itamar Shimrat
|
||
Title:
|
Chief Executive Officer and
|
||
Chief Financial Officer
|
|||
(Principal Executive, Financial
|
|||
and Accounting Officer)
|
SIGNATURE
|
TITLE
|
DATE
|
|||
By:
|
/s/ Dennis Brown |
Chairman
|
July 24, 2018
|
||
Dennis Brown
|
|||||
By:
|
/s/ Itamar Shimrat |
Chief Executive Officer, Chief Financial Officer and Director
|
July 24, 2018
|
||
Itamar Shimrat
|
(Principal Executive, Financial and Accounting Officer)
|
||||
By:
|
/s/ Ben Friedman |
Director
|
July 24, 2018
|
||
Ben Friedman
|
|||||
By:
|
/s/ Yoram Drucker |
Director
|
July 24, 2018
|
||
Yoram Drucker
|
|||||
By:
|
/s/ David Zolty |
Director
|
July 24, 2018
|
||
David Zolty
|
Page
|
|
Report of Independent Registered Public Accounting Firm
|
F-1
|
Consolidated Balance Sheets as of December 31, 2017, 2016 and 2015
|
F-2
|
Consolidated Statements of Operations for the Years Ended December 31, 2017, 2016 and 2015
|
F-3
|
Consolidated Statements of Stockholders' Deficiency for the Years Ended December 31, 2017, 2016 and 2015
|
F-4 |
Consolidated Statements of Cash Flows for the Years Ended December 31, 2017, 2016 and 2015
|
F-5
|
Notes to Consolidated Financial Statements
|
F-6
|
December 31,
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
Assets
|
||||||||||||
Current Assets:
|
||||||||||||
Cash
|
$
|
371,048
|
$
|
3,735
|
$
|
6,944
|
||||||
Prepaid expenses
|
124,693
|
136,631
|
71,882
|
|||||||||
Other current assets
|
35,936
|
70,330
|
134,736
|
|||||||||
Total Current Assets
|
531,677
|
210,696
|
213,562
|
|||||||||
Property, plant and equipment, net
|
-
|
407
|
1,267
|
|||||||||
Total Assets
|
$
|
531,677
|
$
|
211,103
|
$
|
214,829
|
||||||
Liabilities and Stockholders' Deficiency
|
||||||||||||
Current Liabilities:
|
||||||||||||
Accounts payable
|
$
|
201,824
|
$
|
219,094
|
$
|
119,862
|
||||||
Accrued expenses
|
821,244
|
875,212
|
441,485
|
|||||||||
Accrued expenses - related party
|
-
|
-
|
207,955
|
|||||||||
Accrued interest
|
248,746
|
257,401
|
25,138
|
|||||||||
Accrued interest - related parties
|
13,310
|
10,310
|
6,674
|
|||||||||
Accrued compensation
|
626,758
|
507,162
|
324,672
|
|||||||||
Accrued compensation - related party
|
19,262
|
19,177
|
-
|
|||||||||
Advances payable
|
100,000
|
302,426
|
450,000
|
|||||||||
Notes payable, net of debt discount of $89,326, $49,050 and $41,600 as of December 31, 2017, 2016
and 2015, respectively
|
1,173,674
|
1,813,950
|
708,400
|
|||||||||
Notes payable - related parties, net of debt discount of $0, $2,300 and $19,300 as of December 31, 2017,
2016 and 2015, respectively
|
150,000
|
147,700
|
180,700
|
|||||||||
Convertible notes payable, current portion, net of debt discount of $34,173, $256,280 and $214,550 as of
December 31, 2017, 2016 and 2015, respectively
|
800,827
|
1,126,220
|
180,450
|
|||||||||
Convertible notes payable - related parties, net of debt discount of $28,356, $0 and $0 as of
December 31, 2017, 2016 and 2015, respectively
|
196,644
|
-
|
-
|
|||||||||
Derivative liabilities
|
628,200
|
1,175,400
|
3,279,600
|
|||||||||
Accrued dividend payable
|
108,562
|
-
|
-
|
|||||||||
Total Current Liabilities
|
5,089,051
|
6,454,052
|
5,924,936
|
|||||||||
Convertible notes payable, non-current portion, net of debt discount of $0, $0 and $288,832 at
December 31, 2017, 2016 and 2015, respectively
|
-
|
-
|
43,668
|
|||||||||
Accrued interest, non-current portion
|
-
|
-
|
4,474
|
|||||||||
Total Liabilities
|
5,089,051
|
6,454,052
|
5,973,078
|
|||||||||
Commitments and contingencies (Note 11)
|
-
|
-
|
-
|
|||||||||
Stockholders' Deficiency:
|
||||||||||||
Convertible Preferred Stock, $0.001 par value, 10,000,000 shares authorized; Series A Convertible
Preferred Stock, 1,335,000 shares designated, 643,790, 0 and 0 shares issued and outstanding as of
December 31, 2017, 2016 and 2015, respectively; and liquidation preference of $4,936,987, $0 and $0
as of December 31, 2017, 2016 and 2015, respectively
|
644
|
-
|
-
|
|||||||||
Common Stock, $0.001 par value, 200,000,000 shares authorized, 25,349,236, 24,679,256 and 23,929,256
shares issued and outstanding as of December 31, 2017, 2016 and 2015, respectively
|
25,349
|
24,679
|
23,929
|
|||||||||
Additional paid-in capital
|
9,969,520
|
5,202,749
|
4,720,417
|
|||||||||
Accumulated deficit
|
(14,552,887
|
)
|
(11,470,377
|
)
|
(10,502,595
|
)
|
||||||
Total Stockholders' Deficiency
|
(4,557,374
|
)
|
(6,242,949
|
)
|
(5,758,249
|
)
|
||||||
Total Liabilities and Stockholders' Deficiency
|
$
|
531,677
|
$
|
211,103
|
$
|
214,829
|
For the Years Ended December 31,
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
Operating Expenses:
|
||||||||||||
Research and development
|
$
|
637,318
|
$
|
554,185
|
$
|
392,925
|
||||||
Research and development - related parties
|
839,538
|
812,638
|
829,970
|
|||||||||
Selling, general and administrative
|
815,947
|
951,783
|
1,097,580
|
|||||||||
Total Operating Expenses
|
2,292,803
|
2,318,606
|
2,320,475
|
|||||||||
Loss From Operations
|
(2,292,803
|
)
|
(2,318,606
|
)
|
(2,320,475
|
)
|
||||||
Other (Expense) Income:
|
||||||||||||
Interest expense
|
(174,970
|
)
|
(243,425
|
)
|
(32,612
|
)
|
||||||
Interest expense - related parties
|
(3,000
|
)
|
(3,000
|
)
|
(3,000
|
)
|
||||||
Amortization of debt discount
|
(389,218
|
)
|
(1,238,351
|
)
|
(340,668
|
)
|
||||||
Amortization of debt discount - related parties
|
(48,944
|
)
|
(35,000
|
)
|
(15,600
|
)
|
||||||
Change in fair value of derivative liabilities
|
590,173
|
2,870,600
|
208,250
|
|||||||||
Loss on exchange of notes payable for preferred shares
|
(725,355
|
)
|
-
|
-
|
||||||||
Loss on exchange of warrants for common shares
|
(38,393
|
)
|
-
|
-
|
||||||||
Total Other (Expense) Income
|
(789,707
|
)
|
1,350,824
|
(183,630
|
)
|
|||||||
Net Loss
|
(3,082,510
|
)
|
(967,782
|
)
|
(2,504,105
|
)
|
||||||
Dividend attributable to Series A preferred stockholders
|
(240,559
|
)
|
-
|
-
|
||||||||
Net Loss Applicable to Common Stockholders
|
$
|
(3,323,069
|
)
|
$
|
(967,782
|
)
|
$
|
(2,504,105
|
)
|
|||
Net Loss Per Common Share - Basic and Diluted
|
$
|
(0.12
|
)
|
$
|
(0.04
|
)
|
$
|
(0.10
|
)
|
|||
Weighted Average Common Shares Outstanding - Basic and Diluted
|
26,774,860
|
26,193,639
|
25,718,570
|
|
Convertible Preferred
|
Additional
|
Total
|
|||||||||||||||||||||||||
|
Stock - Series A
|
Common Stock
|
Paid-In
|
Accumulated
|
Stockholders'
|
|||||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Deficiency
|
|||||||||||||||||||||
|
||||||||||||||||||||||||||||
Balance, December 31, 2014
|
-
|
$
|
-
|
23,579,256
|
$
|
23,579
|
$
|
4,191,183
|
$
|
(7,998,490
|
)
|
$
|
(3,783,728
|
)
|
||||||||||||||
Common Stock issued as debt discount in connection with
issuance of convertible notes payable
|
-
|
-
|
250,000
|
250
|
71,150
|
-
|
71,400
|
|||||||||||||||||||||
Stock-based compensation:
|
||||||||||||||||||||||||||||
Common stock
|
-
|
-
|
100,000
|
100
|
39,900
|
-
|
40,000
|
|||||||||||||||||||||
Warrants
|
-
|
-
|
-
|
-
|
418,184
|
-
|
418,184
|
|||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
-
|
(2,504,105
|
)
|
(2,504,105
|
)
|
|||||||||||||||||||
|
||||||||||||||||||||||||||||
Balance, December 31, 2015
|
-
|
$
|
-
|
23,929,256
|
$
|
23,929
|
$
|
4,720,417
|
$
|
(10,502,595
|
)
|
$
|
(5,758,249
|
)
|
||||||||||||||
Common Stock issued as debt discount in connection with
issuance of convertible notes payable
|
-
|
-
|
750,000
|
750
|
186,750
|
-
|
187,500
|
|||||||||||||||||||||
Elimination of liability due to related party in connection with
revision of contract terms
|
-
|
-
|
-
|
-
|
200,000
|
-
|
200,000
|
|||||||||||||||||||||
Stock-based compensation - warrants
|
-
|
-
|
-
|
-
|
95,582
|
-
|
95,582
|
|||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
-
|
(967,782
|
)
|
(967,782
|
)
|
|||||||||||||||||||
|
||||||||||||||||||||||||||||
Balance, December 31, 2016
|
-
|
$
|
-
|
24,679,256
|
$
|
24,679
|
$
|
5,202,749
|
$
|
(11,470,377
|
)
|
$
|
(6,242,949
|
)
|
||||||||||||||
Issuance of Series A Convertible Preferred Stock for cash,
net of offering expenses of $54,543
|
306,759
|
307
|
-
|
-
|
2,240,277
|
-
|
2,240,584
|
|||||||||||||||||||||
Issuance of Series A Convertible Preferred Stock in exchange
for advances payable
|
23,834
|
24
|
-
|
-
|
178,722
|
-
|
178,746
|
|||||||||||||||||||||
Issuance of Series A Convertible Preferred Stock in exchange
for notes payable
|
281,697
|
282
|
-
|
-
|
2,112,452
|
-
|
2,112,734
|
|||||||||||||||||||||
Issuance of Series A Convertible Preferred Stock as debt
discount in connection with the issuance of notes payable
|
24,000
|
24
|
-
|
-
|
119,976
|
-
|
120,000
|
|||||||||||||||||||||
Issuance of Series A Convertible Preferred and Common
Stock in connection with the extension of notes payable
|
7,500
|
7
|
243,750
|
244
|
116,937
|
-
|
117,188
|
|||||||||||||||||||||
Series A Convertible Preferred Stock dividends:
|
||||||||||||||||||||||||||||
Accrual of earned dividends
|
-
|
-
|
-
|
-
|
(240,559
|
)
|
-
|
(240,559
|
)
|
|||||||||||||||||||
Payment of dividends in-kind
|
-
|
-
|
176,230
|
176
|
131,997
|
-
|
132,173
|
|||||||||||||||||||||
Issuance of Common Stock in exchange for surrender of
warrants
|
-
|
-
|
250,000
|
250
|
62,250
|
-
|
62,500
|
|||||||||||||||||||||
Stock-based compensation:
|
||||||||||||||||||||||||||||
Warrants
|
-
|
-
|
-
|
-
|
44,719
|
-
|
44,719
|
|||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
-
|
(3,082,510
|
)
|
(3,082,510
|
)
|
|||||||||||||||||||
|
||||||||||||||||||||||||||||
Balance, December 31, 2017
|
643,790
|
$
|
644
|
25,349,236
|
$
|
25,349
|
$
|
9,969,520
|
$
|
(14,552,887
|
)
|
$
|
(4,557,374
|
)
|
For The Years Ended December 31,
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
Cash Flows From Operating Activities:
|
||||||||||||
Net loss
|
$
|
(3,082,510
|
)
|
$
|
(967,782
|
)
|
$
|
(2,504,105
|
)
|
|||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||||||
Change in fair value of derivative liabilities
|
(590,173
|
)
|
(2,870,600
|
)
|
(208,250
|
)
|
||||||
Amortization of debt discount
|
438,162
|
1,273,351
|
356,268
|
|||||||||
Loss on exchange of notes payable for equity
|
725,355
|
-
|
-
|
|||||||||
Loss on exchange of warrants for common shares
|
38,393
|
-
|
-
|
|||||||||
Depreciation
|
407
|
860
|
860
|
|||||||||
Stock-based compensation:
|
||||||||||||
Common stock
|
-
|
-
|
100,000
|
|||||||||
Warrants
|
44,719
|
114,759
|
35,884
|
|||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Prepaid expenses
|
(23,105
|
)
|
(39,949
|
)
|
156,474
|
|||||||
Other current assets
|
34,394
|
64,406
|
(108,662
|
)
|
||||||||
Def financing costs
|
-
|
-
|
(152,932
|
)
|
||||||||
Accounts payable
|
(17,270
|
)
|
99,232
|
323,853
|
||||||||
Accrued expenses
|
(134,671
|
)
|
410,703
|
-
|
||||||||
Accrued expenses - related parties
|
-
|
(7,955
|
)
|
-
|
||||||||
Accrued interest
|
155,804
|
242,789
|
-
|
|||||||||
Accrued interest - related parties
|
3,000
|
3,636
|
-
|
|||||||||
Accrued compensation
|
119,681
|
182,490
|
-
|
|||||||||
Net Cash Used In Operating Activities
|
(2,287,814
|
)
|
(1,494,060
|
)
|
(2,000,610
|
)
|
||||||
Cash Flows From Financing Activities:
|
||||||||||||
Proceeds from issuance of notes payable
|
135,000
|
1,503,000
|
1,577,500
|
|||||||||
Proceeds from issuance of notes payable - related party
|
225,000
|
-
|
-
|
|||||||||
Repayment of note payable - related party
|
-
|
(50,000
|
)
|
-
|
||||||||
Payment of debt issuance costs
|
-
|
(44,575
|
)
|
(39,426
|
)
|
|||||||
Deferred financing costs
|
-
|
(20,000
|
)
|
-
|
||||||||
Proceeds from issuance of preferred stock - Series A
|
2,295,127
|
-
|
-
|
|||||||||
Proceeds from cash advances
|
-
|
102,426
|
450,000
|
|||||||||
Net Cash Provided By Financing Activities
|
2,655,127
|
1,490,851
|
1,988,074
|
|||||||||
Net Increase (Decrease) In Cash
|
367,313
|
(3,209
|
)
|
(12,536
|
)
|
|||||||
Cash - Beginning of Year
|
3,735
|
6,944
|
19,480
|
|||||||||
Cash - End of Year
|
$
|
371,048
|
$
|
3,735
|
$
|
6,944
|
||||||
Supplemental Disclosures of Cash Flow Information:
|
||||||||||||
Non-cash investing and financing activities:
|
||||||||||||
Preferred stock issued in exchange for notes and advances payable
|
$
|
2,291,480
|
$
|
-
|
$
|
-
|
||||||
Reduction of additional paid-in capital for public offering issuance costs that were previously paid
|
$
|
(54,543
|
)
|
$
|
-
|
$
|
-
|
|||||
Accrual of earned preferred stock dividends
|
$
|
(240,559
|
)
|
$
|
-
|
$
|
-
|
|||||
Common stock issued in connection with payment of Series A Convertible Preferred Stock
dividends in-kind
|
$
|
132,173
|
$
|
-
|
$
|
-
|
||||||
Common stock issued in connection with exchange of warrants
|
$
|
62,500
|
$
|
-
|
$
|
-
|
||||||
Stock issued in connection with issuances and extensions of notes payable
|
$
|
237,188
|
$
|
187,500
|
$
|
71,400
|
||||||
Warrants and conversion options issued in connection with issuance and extension of notes payable
|
$
|
67,080
|
$
|
761,600
|
$
|
650,150
|
||||||
Accrual of deferred financing costs
|
$
|
-
|
$
|
-
|
$
|
159,574
|
||||||
Advances payable exchanged for a convertible note
|
$
|
-
|
$
|
250,000
|
$
|
-
|
||||||
Elimination of liability due to related party in connection with revision of contract terms and recored as
an increase to additional paid-in capital
|
$
|
-
|
$
|
200,000
|
$
|
-
|
||||||
Accrued interest converted into convertible note
|
$
|
-
|
$
|
15,000
|
$
|
-
|
||||||
Warrants issued in connection with deferred financing costs
|
$
|
-
|
$
|
4,800
|
$
|
-
|
||||||
Reclassification of warrants to derivative liabilities
|
$
|
-
|
$
|
-
|
$
|
482,300
|
December 31,
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
Warrants
|
|
11,615,481
|
|
11,865,481
|
|
11,074,324
|
||||||
Convertible notes
|
1,530,433
|
2,028,999
|
2,166,331
|
|||||||||
Convertible preferred stock
|
6,437,900
|
-
|
-
|
|||||||||
Total
|
19,583,814
|
13,894,480
|
13,240,655
|
Level 1 |
Inputs use quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.
|
Level 2 |
Inputs use directly or indirectly observable inputs. These inputs include quoted prices for similar assets and liabilities in active markets as well as other inputs such as interest rates and yield curves that are observable at commonly quoted intervals.
|
Level 3 |
Inputs are unobservable inputs, including inputs that are available in situations where there is little, if any, market activity for the related asset or liability.
|
|
Quoted Prices
|
|||||||||||||||
In Active
|
Significant
|
|||||||||||||||
Markets for
|
Other
|
Significant
|
||||||||||||||
Identical
|
Observable
|
Unobservable
|
||||||||||||||
Liabilities
|
Inputs
|
Inputs
|
||||||||||||||
Total
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||||||
Accrued compensation
|
$
|
79,262
|
$
|
-
|
$
|
-
|
$
|
79,262
|
||||||||
Derivative liability
|
628,200
|
-
|
-
|
628,200
|
||||||||||||
Balance - December 31, 2017
|
$
|
707,462
|
$
|
-
|
$
|
-
|
$
|
707,462
|
||||||||
Accrued compensation
|
$
|
79,178
|
$
|
-
|
$
|
-
|
$
|
79,178
|
||||||||
Derivative liability
|
1,175,400
|
-
|
-
|
1,175,400
|
||||||||||||
Balance - December 31, 2016
|
$
|
1,254,578
|
$
|
-
|
$
|
-
|
$
|
1,254,578
|
||||||||
Accrued compensation
|
$
|
60,000
|
$
|
-
|
$
|
-
|
$
|
60,000
|
||||||||
Derivative liability
|
3,279,600
|
-
|
-
|
3,279,600
|
||||||||||||
Balance - December 31, 2015
|
$
|
3,339,600
|
$
|
-
|
$
|
-
|
$
|
3,339,600
|
For the Years Ended
|
||||||||||||
December 31,
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
Risk-free interest rate
|
1.04% - 2.09
|
%
|
0.21% - 1.93
|
%
|
0.14% - 1.93
|
%
|
||||||
Expected term (years)
|
0.25 - 4.00
|
0.04 - 5.00
|
0.04 - 6.50
|
|||||||||
Expected volatility
|
110
|
%
|
110% - 159
|
%
|
159% - 172
|
%
|
||||||
Expected dividends
|
0.00
|
%
|
0.00
|
%
|
0.00
|
%
|
Accrued
|
Derivative
|
|||||||||||
Compensation
|
Liability
|
Total
|
||||||||||
Balance - December 31, 2014
|
$
|
901,300
|
$
|
2,318,700
|
$
|
3,220,000
|
||||||
Issuance of warrants and conversion options
|
-
|
686,850
|
686,850
|
|||||||||
Accrual of warrant and common stock obligation
|
110,684
|
-
|
110,684
|
|||||||||
Change in fair value
|
(51,500
|
)
|
(208,250
|
)
|
(259,750
|
)
|
||||||
Reclassification to equity upon issuance
|
(418,184
|
)
|
-
|
(418,184
|
)
|
|||||||
Reclassification to derivative liability upon issuance
|
(482,300
|
)
|
482,300
|
-
|
||||||||
Balance - December 31, 2015
|
$
|
60,000
|
$
|
3,279,600
|
$
|
3,339,600
|
||||||
Issuance of warrants and conversion options
|
-
|
766,400
|
766,400
|
|||||||||
Accrual of obligations
|
44,033
|
-
|
44,033
|
|||||||||
Change in fair value
|
(24,855
|
)
|
(2,870,600
|
)
|
(2,895,455
|
)
|
||||||
Balance - December 31, 2016
|
$
|
79,178
|
$
|
1,175,400
|
$
|
1,254,578
|
||||||
Issuance of warrants and conversion options
|
-
|
67,080
|
67,080
|
|||||||||
Exchange of warrant for common stock
|
-
|
(24,107
|
)
|
(24,107
|
)
|
|||||||
Accrual of obligations
|
-
|
-
|
-
|
|||||||||
Change in fair value
|
85
|
(590,173
|
)
|
(590,088
|
)
|
|||||||
Balance - December 31, 2017
|
$
|
79,262
|
$
|
628,200
|
$
|
707,462
|
December 31,
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
Accrued research and development
|
$
|
245,504
|
$
|
247,930
|
$
|
186,815
|
||||||
Accrued legal fees
|
119,216
|
154,362
|
177,574
|
|||||||||
Accrued other professional fees
|
50,731
|
3,937
|
30,524
|
|||||||||
Accrued director compensation
|
12,000
|
12,000
|
12,000
|
|||||||||
Accrued Scientified Advisory Board compensation
|
109,000
|
83,000
|
31,000
|
|||||||||
Other accrued expenses
|
284,793
|
373,982
|
3,572
|
|||||||||
Total accrued expenses
|
$
|
821,244
|
$
|
875,211
|
$
|
441,485
|
December 31,
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
Witholding tax
|
$
|
147,082
|
$
|
102,492
|
$
|
41,443
|
||||||
Social security
|
54,218
|
37,958
|
14,395
|
|||||||||
Stock-based compensation expense
|
60,000
|
60,000
|
60,000
|
|||||||||
Pension insurance
|
97,221
|
59,310
|
26,749
|
|||||||||
Accrued payroll
|
132,366
|
136,469
|
93,166
|
|||||||||
Vacation
|
38,059
|
28,096
|
20,210
|
|||||||||
Severance
|
|
97,812
|
|
82,838
|
$
|
68,710
|
||||||
$ | 626,758 | $ | 507,163 | 325,673 |
i) |
On March 26, 2015, the Company issued two notes payable in the principal amount of $250,000 each and warrants for the purchase of a total of 500,000 shares of common stock at $0.75 per share for a period of four years. These notes did not accrue interest and matured on March 26, 2016. The warrants were 100% vested upon issuance, valued at $177,200 on the date of issuance, and recorded as a debt discount. The discount was amortized to expense over the term of those notes.
|
ii) |
On May 15, 2015, the Company issued a note payable in the principal amount of $250,000 and warrants for the purchase of 250,000 shares of common stock at $0.75 per share for a period of four years. This note accrued interest at the rate of 12% per annum and matured on September 15, 2015. The warrants were 100% vested upon issuance, valued at $88,600 on the date of issuance, and recorded as a debt discount. The discount was amortized to expense over the term of this note.
|
·
|
Issued 5,000 shares of Series A Preferred Stock. Those shares were valued at $37,500 on the date of issuance, recorded as a debt discount
, and amortized to expense over the terms of those extension periods; and
|
·
|
Issued 125,000 shares of common stock. Those shares were valued at $31,250 on the date of issuance, recorded as a debt discount
, and amortized to expense over the terms of those extension periods; and
|
·
|
Issued 250,000 shares of common stock in exchange for outstanding warrants as more fully described in Note 10,
Stockholders' Deficiency
.
|
iii) |
On March 8, 2016, the Company issued two notes payable in the total principal amount of $600,000 and warrants for the purchase of a total of 300,000 shares of common stock at $0.75 per share for a period of four years. These notes accrued interest at the rate of 10% per annum and matured on September 8, 2016. The warrants were 100% vested upon issuance, valued at $93,400 on the date of issuance, and recorded as a debt discount. The discount was amortized to expense over the term of those notes. In accordance with the Company's sequencing policy, these warrants were determined to be and were recorded as derivative liabilities.
|
iv) |
On May 10, 2016, the Company issued a note payable in the principal amount of $53,000. This note accrued interest at the rate of 6% per annum and matured on November 10, 2016.
|
v) |
On various dates from July 20, 2016 to October 13, 2016, the Company issued a series of five notes payable in the total principal amount of $460,000 and warrants to purchase of 345,000 shares of common stock at $0.75 per share for a period of five years. These notes accrued interest at the rate of 10% per annum and matured on various dates from January 1, 2017 to April 13, 2017. The warrants were 100% vested upon issuance, valued at a total of $121,700 on the date of issuance, and were recorded as a debt discount. The discount was amortized to expense over the term of those notes. In accordance with the Company's sequencing policy, these warrants were determined to be and were recorded as derivative liabilities.
|
·
|
There is an effective registration statement covering the resale of the underlying shares of common stock; and
|
·
|
The common stock has traded for twenty consecutive trading days prior to notice to the warrant holder with a closing price of at least $2.50 per share and an average trading volume of 100,000 shares per day.
|
December 31,
|
||||||||||||||
2017
|
2016
|
2015
|
||||||||||||
i) |
Notes issued on November 11 and 26, 2015, net of debt discounts
|
$
|
50,000
|
$
|
50,000
|
$
|
100,000
|
|||||||
ii) |
Notes issued on July 20, 2015, net of debt discounts
|
100,000
|
97,700
|
80,700
|
||||||||||
Total
|
$
|
150,000
|
$
|
147,700
|
$
|
180,700
|
i) |
On November 11 and 26, 2014, the Company issued to its Chief Executive Officer two promissory notes totaling $100,000. These notes accrued interest at the rate of 6% per annum and matured six months after issuance. Principal of $50,000 was repaid on March 31, 2016. The maturity date of the remaining note has been extended to September 30, 2018 and as of that date principal and interest of $50,000 and $13,310, respectively, was due to this related party.
|
ii) |
On July 20, 2015, the Company issued to a member of its Board of Directors a note payable in the principal amount of $100,000 and warrants for the purchase of a total of 100,000 shares of common stock at $0.75 per share for a period of four years. This note did not accrue interest and matured on January 24, 2017. The warrants were 100% vested upon issuance, valued at $34,900 on the date of issuance, and recorded as a debt discount. The discount was amortized to expense over the term of those notes.
|
December 31,
|
||||||||||||||
2017
|
2016
|
2015
|
||||||||||||
i) |
Convertible notes issued on July 24, 2015, net of debt discounts
|
$
|
127,841
|
$
|
142,200
|
$
|
110,300
|
|||||||
ii) |
Convertible notes issued on October 7, 2015, net of debt discounts
|
265,000
|
239,250
|
194,800
|
||||||||||
iii) |
Convertible notes issued on November 9 and 17, 2015, net of debt discounts
|
-
|
264,250
|
71,950
|
||||||||||
iv) |
Convertible notes issued on various dates from January 6, 2016 to March 15, 2016,
net of debt discounts
|
290,000
|
230,520
|
-
|
||||||||||
v) |
Convertible note issued on January 14, 2016, net of debt discounts
|
-
|
250,000
|
-
|
||||||||||
vi) |
Convertible notes issued on May 18, 2017, net of debt discounts
|
117,986
|
-
|
-
|
||||||||||
Total
|
$
|
800,827
|
$
|
1,126,220
|
$
|
377,050
|
i) |
On July 24, 2015, the Company issued three convertible notes payable in the total principal amount of $145,000 and warrants for the purchase of a total of 145,000 shares of common stock at $0.75 per share for a period of four years. These notes accrued interest at the rate of 10% per annum after the first ninety days they were outstanding and matured on July 24, 2016. The conversion option was valued at $10,900 on the date of issuance and were recorded as a debt discount. The warrants were 100% vested upon issuance, valued at $
50,600
on the date of issuance, and recorded as a debt discount. These discounts were amortized to expense over the term of those notes.
|
·
|
These notes must be repaid if Company receives $3,000,000 or more in proceeds from the closing of any offering or offerings after July 24, 2015; and
|
·
|
On or after the sixteenth day following the maturity dates, the holders have the option to convert all or part of the outstanding principal and accrued but unpaid interest into shares of common stock at a conversion price equal to the lesser of (i) $0.75; or (ii) seventy percent of the average daily volume weighted average price (“VWAP”) of common stock for the twenty trading days prior to the maturity date.
|
·
|
There is an effective registration statement covering the resale of the underlying shares of common stock; and
|
·
|
The common stock has traded for twenty consecutive trading days prior to notice to the warrant holder with a closing price of at least $2.50 per share and an average trading volume of 100,000 shares per day.
|
ii) |
On October 7, 2015, the Company issued two convertible notes payable in the total principal amount of $250,000 and 250,000 shares of common stock. These notes accrued interest at the rate of 6% per annum and matured on October 7, 2016. The conversion option was valued at $600 on the date of issuance and recorded as a debt discount. The common shares were valued at $71,400 on the date of issuance and recorded as a debt discount with a corresponding increase to additional paid-in capital. These discounts were amortized to expense over the term of the notes.
|
iii) |
On November 9 and 17, 2015, the Company issued a series of convertible notes payable in the total principal amount of $332,500. These notes accrued interest at the rate of 10% per annum and matured on May 9 and 17, 2017. The conversion option was valued at $287,350 on the date of issuance and recorded as a debt discount. Such discount was amortized to expense over the term of those notes. In accordance with the Company's sequencing policy, this conversion option was determined to be and recorded as a derivative liability.
|
iv) |
On various dates from January 6, 2016 through March 15, 2016, the Company issued a series of convertible notes payable in the total principal amount of $390,000. These notes accrued interest at the rate of 10% per annum and matured on various dates from July 6, 2017 through September 15, 2017. The conversion option was valued at $327,700 on the date of issuance and recorded as a debt discount. Such discount was amortized to expense over the term of those notes. In accordance with the Company's sequencing policy, the conversion options were determined to be and recorded as a derivative liability.
|
v) |
On January 14, 2016, the Company issued a convertible note payable in the principal amount of $250,000. This note accrued interest at the rate of 10% per annum beginning from the date the funds were advanced on January 28, 2015 and matured on July 27, 2016. The conversion option was valued at $179,000 on January 14, 2016, the date such terms were formalized, and recorded as a debt discount. Such discount was amortized to expense over the remaining term of the note. In accordance with the Company's sequencing policy, this conversion option was determined to be and recorded as a derivative liability.
|
vi) |
On May 18, 2017, the Company issued three convertible notes payable in the total principal amount of $135,000 and a total of 9,000 shares of Series A Preferred Stock. These notes did not accrue interest and matured on May 18, 2018. Proceeds from the issuance of such notes were allocated proportionately to the value of the notes and the shares. Consequently, those shares were allocated $45,000 on the date of issuance and recorded as debt discounts. Such discounts were amortized to expense over the term of those notes.
|
December 31,
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
Convertible notes issued on May 18, 2017, net of debt discounts
|
$
|
196,644
|
-
|
-
|
·
|
During the years ended December 31, 2017, 2016 and 2015, the Company recorded interest expense related to notes payable of $177,970, $246,425 and $35,612, respectively.
|
·
|
During the years ended December 31, 2017, 2016 and 2015, the Company recorded amortization of debt discount of $438,162, $1,273,351 and $356,268, respectively.
|
For the Years Ended December 31,
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
Israel
|
$
|
(1,793,483
|
)
|
$
|
(2,008,136
|
)
|
$
|
(1,986,936
|
)
|
|||
United States
|
(1,289,027
|
)
|
1,040,354
|
(517,169
|
)
|
|||||||
Income before income taxes
|
$
|
(3,082,510
|
)
|
$
|
(967,782
|
)
|
$
|
(2,504,105
|
)
|
December 31,
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
Net operating loss carryforwards
|
$
|
3,712,000
|
$
|
3,310,000
|
$
|
2,094,000
|
||||||
Foreign deferred research and development costs
|
331,000
|
317,000
|
356,000
|
|||||||||
Stock-based compensation expense
|
26,000
|
34,000
|
26,000
|
|||||||||
Deferred tax assets
|
4,069,000
|
3,661,000
|
2,476,000
|
|||||||||
Valuation allowance
|
(4,069,000
|
)
|
(3,661,000
|
)
|
(2,476,000
|
)
|
||||||
Deferred tax assets, net
|
$
|
-
|
$
|
-
|
-
|
For the Years Ended December 31
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
Current
|
||||||||||||
Foreign
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||
Federal
|
-
|
-
|
-
|
|||||||||
U.S. State and local
|
-
|
-
|
-
|
|||||||||
Deferred
|
||||||||||||
Foreign
|
(357,000
|
)
|
(390,000
|
)
|
(358,000
|
)
|
||||||
Federal
|
110,000
|
(623,000
|
)
|
(226,000
|
)
|
|||||||
U.S. State and local
|
(161,000
|
)
|
(172,000
|
)
|
(62,000
|
)
|
||||||
(408,000
|
)
|
(1,185,000
|
)
|
(646,000
|
)
|
|||||||
Change in valuation allowance
|
408,000
|
1,185,000
|
646,000
|
|||||||||
Income tax provision (benefit)
|
$
|
-
|
$
|
-
|
$
|
-
|
For the Years Ended December 31,
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
Expected federal statutory rate
|
|
(34.0
|
%)
|
|
(34.0
|
%)
|
|
(34.0
|
%)
|
|||
State and local taxes, net of federal tax benefit
|
(9.4
|
%)
|
(9.4
|
%)
|
(2.5
|
%)
|
||||||
Statutory rate differential - domestic vs. foreign
|
11.3
|
%
|
38.2
|
%
|
7.7
|
%
|
||||||
Permanent differences
|
3.1
|
%
|
(124.4
|
%)
|
0.6
|
%
|
||||||
Change in tax rates and other
|
15.8
|
%
|
7.2
|
%
|
2.4
|
%
|
||||||
Change in valuation allowance
|
13.2
|
%
|
122.4
|
%
|
25.8
|
%
|
||||||
Income tax provision (benefit)
|
0.0
|
%
|
0.0
|
%
|
0.0
|
%
|
·
|
93,750 shares of common stock valued at $0.25 per share in connection with the extension of convertible notes payable, as more fully described in Note 8(c)(i),
Notes Payable
;
|
·
|
25,000 shares of common stock valued at $0.25 per share in connection with the extension of a note payable, as more fully described in Note 8(a)(v),
Notes Payable
; and
|
·
|
125,000 shares of common stock valued at $0.25 per share in connection with the extension of a notes payable, as more fully described in Note 8(a)(i),
Notes Payable
.
|
1) |
Conversion
|
2) |
Dividends
|
3) |
Voting
|
4) |
Liquidation Preference
|
• |
6% of net revenue for treatments sold directly by Cell Source; and
|
• |
6% of cash received by Cell Source pursuant to Cell Source treatment licensing or partnering agreements.
|
Weighted
|
||||||||||||||||
Weighted
|
Average
|
|||||||||||||||
Average
|
Remaining
|
|||||||||||||||
Number of
|
Exercise
|
Life
|
Intrinsic
|
|||||||||||||
Warrants
|
Price
|
In Years
|
Value
|
|||||||||||||
Outstanding, December 31, 2014
|
8,503,159 | $ | 0.57 | |||||||||||||
Granted
|
4,615,000 | 0.75 | ||||||||||||||
Exercised
|
- | - | ||||||||||||||
Forfeited
|
- | - | ||||||||||||||
Outstanding, December 31, 2015
|
13,118,159 | $ | 0.63 | |||||||||||||
Granted
|
791,157 | 0.75 | ||||||||||||||
Exercised
|
- | - | ||||||||||||||
Forfeited
|
- | - | ||||||||||||||
Outstanding, December 31, 2016
|
13,909,316 | $ | 0.64 | |||||||||||||
Granted
|
- | - | ||||||||||||||
Exercised
|
- | - | ||||||||||||||
Exchanged | (250,000 | ) | 0.75 | |||||||||||||
Forfeited
|
- | - | ||||||||||||||
Outstanding, December 31, 2017
|
13,659,316 | $ | 0.64 | 1.7 | $ | 508,915 | ||||||||||
Exercisable, December 31, 2017
|
13,659,316 | $ | 0.64 | 1.7 | $ | 508,915 |
Warrants Outstanding
|
Warrants Exercisable
|
|||||||||||||
Weighted
|
||||||||||||||
Outstanding
|
Average
|
Exercisable
|
||||||||||||
Exercise
|
Number of
|
Remaining Life
|
Number of
|
|||||||||||
Price
|
Warrants
|
In Years
|
Warrants
|
|||||||||||
$ | 0.001 | 2,043,835 | 2.9 | 2,043,835 | ||||||||||
$ | 0.750 | 11,615,481 | 1.6 | 11,615,481 | ||||||||||
13,659,316 | 1.7 | 13,659,316 |
1) |
The Company has an exclusive worldwide license for the Veto Cell technology for the development, manufacture and sale of the products derived therefrom
for a period through the expiration of the applicable patents or fifteen years after the receipt of new drug approval, whichever occurs later
;
|
2) |
The Company committed to engage Yeda to perform research services in the amount of $800,000 per annum through October 3, 2018
;
|
3) |
The Company is obligated to pay Yeda an annual license fee of $50,000 until the conclusion of the research period; and
|
4) |
The Company is obligated to pay Yeda a royalty of 4% of net future sales by the Company or any sub-licensees.
|
1) |
On October 3, 2011, as more fully described in Note 11,
Commitments and Contingencies
, the Company entered into a Research and License Agreement with Yeda Research and Development Company Limited (“Yeda”) in connection with Veto Cell technology. Yeda is the technology transfer and commercial arm of the Weizmann Institute of Science located in Rehovot, Israel. As Yeda is a founder and a significant shareholder of the Company, it is a related party.
|
2) |
On November 11 and 26, 2014, as more fully described in Note 8(b),
Notes Payable
, the Company issued promissory notes totaling $100,000 to the President/CEO of the Company and principal of $50,000 was repaid on March 31, 2016. As of December 31, 2017, $50,000 of the principal is outstanding.
|
3) |
On July 20, 2015, as more fully described in Note 8(b),
Notes Payable
, the Company issued a promissory note in the amount of $100,000 to a member of the Company's Board of Directors.
|
4) |
On May 18, 2017, as more fully described in Note 8(d),
Notes Payable
, the Company issued
to two entities individually controlled by two members of the Company's Board of Directors convertible notes payable in the total principal amount of $225,000 and a total of 15,000 shares of Series A Preferred Stock
.
|
1) |
On February 21 and 26, 2018, the Company issued a series of bridge notes payable in the total principal amount of $500,000 with individual terms of ninety days. These notes did not accrue interest and all mature on or before May 26, 2018. Concurrent with the issuance of these notes, the Company issued warrants for the purchase of up to 300,000 shares of common stock at $0.75 per share through May 26, 2023.
|
2) |
On March 3, 2018, the Company raised $50,000 through the sale of 6,667 shares of Series A Preferred Stock at $7.50 per share and incurred no transaction costs.
|
|
WARRANT
|
|
NO. CBTB __
|
|
_____ Shares
|
By:
|
|
Name: Itamar Shimrat
|
|
Title: CEO
|
WHEREAS |
Yeda and Cell Source are parties to a research and licence agreement dated October 3
rd
, 2011, as amended by a first amendment thereto dated April 8, 2014 (together, "
the R&L Agreement”
); and
|
WHEREAS |
Cell Source has notified Yeda in writing that it does not wish to exercise its option rights under the Evaluation and Exclusive License Agreement between the parties dated October 3rd, 2011 (as amended from time to time), and the parties wish to amend the R&L Agreement accordingly; and
|
WHEREAS |
the parties also wish to update Appendix A (Patent Cards) of the R&L Agreement, to amend the development milestones and to make certain additional amendments to the R&L Agreement, all subject to the terms and conditions set out in this Amendment below.
|
1. |
Terms and phrases used in this Amendment
which are defined in the R&L Agreement shall have in this Amendment the same meaning as that attributed to them in the R&L Agreement, unless otherwise expressly defined in this Amendment.
|
2. |
This Amendment and the R&L Agreement shall be read as one and shall represent the complete current understanding between the parties with respect to the subject matter hereof. Subject to the modifications contained herein, the provisions of the R&L Agreement shall remain unaltered and in full force and effect.
|
3. |
The above preamble forms an integral part of this Amendment.
|
4.
|
The R&L
Agreement shall be modified, as of the Effective Date, as follows:
|
4.1 |
In the first paragraph of the preamble thereto, the numbers “2000-017, 2005-082, 2008-108, 2010-071, 2010-073, 2011-077” shall be deleted and replaced by the following: “2000-017, 2008-108, 2010-073, 2011-077, 2011-095, 2015-049, 2015-062, 2016-027” and Appendix A to the R&L Agreement shall be replaced in its entirety by
Annex A
of this Amendment;
|
4.2 |
The final paragraph of the preamble thereto (including Appendix 1 thereto which is referenced in said paragraph) shall be deleted in its entirety;
|
4.3 |
Clause 3 thereto shall be amended such that the words: “provided that, in the event the a R&L Agreement shall be executed between the parties in accordance of the E&O Agreement (as amended), then the annual Research Budget in respect of the Research Period shall, beginning on the date such R&L Agreement shall be signed, be an amount of US$ 900,000 (nine hundred thousand US Dollars) per year” shall be deleted;
|
4.4 |
The final paragraph of clause 3 thereto shall be deleted in its entirety and replaced by the following:
|
4.5 |
In clause 4 thereto, the words “3 (three) month” shall be deleted wherever they appear and replaced by the words “6 (six) month”;
|
4.6 |
Clause 13.2.1 shall be deleted in its entirety and replaced by the following:
|
“13.2.1 |
If the Company fails to achieve any one of the milestones set forth in sub-clauses (a) to (e) below by the dates specified therefor, Yeda shall be entitled, at its option: (i) to modify the Licence hereunder so that it is non-exclusive only, by written notice to the Company (any such amendment of this Agreement by Yeda as aforesaid, being effective immediately, the Company’s consent thereto (written or otherwise) not being required, notwithstanding the provisions of clause 17.2 below); or (ii) to terminate this Agreement (including the Licence hereunder) by giving the Company 30 (thirty) days’ written notice:
|
4.7 |
In clause 13 thereto, the words “which has not been cured by the party in breach within 21 (twenty-one) days (or, in the case of failure by the Company to pay any amount due from the Company to Yeda pursuant to or in connection with this Agreement on or before the due date of payment, 10 (ten) days)” shall deleted and replaced by the words: “which has not been cured by the party in breach within 30 (thirty) days”;
|
4.8 |
Yeda’s bank details in clause 17.7 thereto shall deleted and replaced by the following: “Bank Leumi le–Israel B.M., Rehovot business branch, 2 Ilan Ramon Street, Ness Ziona, branch #978, account no. 6370094; swift: LUMIILITTLV, Routing Number: IL010978, IBAN no. IL7401 09780 0000 0637 0094”.
|
5.
|
For the avoidance of doubt, this Amendment constitutes the entire agreement between the parties hereto in respect of the subject matter hereof, and supersede all prior agreements or understandings between the parties relating to the subject matter hereof (including any previous correspondence in this regard, between the parties, or on their behalf) and may be amended only by a written document signed by both parties hereto.
|
For YEDA RESEARCH AND DEVELOPMENT COMPANY LIMITED
|
For CELL SOURCE LIMITED
|
|||
Signature:
|
/s/ Mudl Sheves
/s/ Gil Granot-Mayor
|
Signature:
|
/s/ Itamar Shimrat
|
|
Name
|
Prof. Mudl Sheves
Gil-Granot-Mayor
|
Name:
|
Itamar Shimrat
|
|
Title
|
Chairman
CEO |
Title:
|
Chief Executive Officer
|
Country
|
Application
|
Publication
|
Grant
|
Status
|
U.S.A
|
05/01/2000 - 09/477,737
|
-
|
6,544,506 - 08/04/2003
|
Granted
|
PCT
|
28/12/2000 - PCT/IL00/00872
|
12/07/2001 - WO 01/49243
|
-
|
Published
|
European Patent Office
|
28/12/2000 - 00983473.0
|
02/10/2002 - 1 244 803
|
1 244 803 - 22/02/2006
|
Validated
|
France
|
28/12/2000 - 00983473.0
|
-
|
1 244 803 - 22/02/2006
|
Granted
|
Germany
|
28/12/2000 - 00983473.0
|
-
|
60026166.2 - 22/02/2006
|
Granted
|
Italy
|
28/12/2000 - 00983473.0
|
-
|
1 244 803 - 22/02/2006
|
Granted
|
Switzerland
|
28/12/2000 - 00983473.0
|
-
|
1 244 803 - 22/02/2006
|
Granted
|
United Kingdom
|
28/12/2000 - 00983473.0
|
-
|
1 244 803 - 22/02/2006
|
Granted
|
Israel
|
28/12/2000 - 150440
|
-
|
150440 - 31/03/2011
|
Granted
|
U.S.A
|
28/12/2000 - 10/169,028
|
-
|
7,270,810 - 18/09/2007
|
Granted
|
Country
|
Application
|
Publication
|
Grant
|
Status
|
U.S.A
|
30/10/2008 - 61/193,137
|
-
|
-
|
Expired
|
U.S.A
|
12/06/2009 - 61/213,482
|
-
|
-
|
Expired
|
PCT
|
29/10/2009 - PCT/IL2009/001014
|
06/05/2010 - WO 2010/049935
|
-
|
Published
|
China
|
29/10/2009 - 200980153053.4
|
07/12/2011 - 102271702
|
ZL200980153053.4 - 25/11/2015
|
Granted
|
European Patent Office
|
29/10/2009 - 09764302.7
|
21/09/2011 - 2 365 823
|
-
|
Pending
|
India
|
29/10/2009 - 905/MUMNP/2011
|
-
|
-
|
Pending
|
Israel
|
29/10/2009 - 212587
|
-
|
212587 - 01/04/2016
|
Granted
|
Russian Federation
|
29/10/2009 - 2011121630
|
-
|
2506311 - 10/02/2014
|
Granted
|
U.S.A
|
29/10/2009 - 13/126,472
|
01/09/2011 - 2011-0212071
|
-
|
Pending
|
Country
|
Application
|
Publication
|
Grant
|
Status
|
U.S.A
|
08/09/2010 - 61/380,716
|
-
|
-
|
Expired
|
PCT
|
08/09/2011 - PCT/IL2011/000727
|
15/03/2012 - WO 2012/032526
|
-
|
Published
|
Brazil
|
08/09/2011 - BR 11 2013 005756 4
|
31/12/2013 - BR 11 2013 005756 4
|
-
|
Published
|
Canada
|
08/09/2011 - 2,810,632
|
-
|
-
|
Pending
|
China
|
08/09/2011 - 201610307275.9
|
31/08/2016 - CN 105907713 A
|
-
|
Published
|
China
|
08/09/2011 - 201180053858.9
|
04/09/2013 - CN 103282047 A
|
ZL201180053858.9 - 24/08/2016
|
Granted
|
European Patent Office
|
08/09/2011 - 11773325.3
|
17/07/2013 - 2 613 801
|
2 613 801 - 08/06/2016
|
Validated
|
Austria
|
08/09/2011 - 11773325.3
|
17/07/2013 - 2 613 801
|
2 613 801 - 08/06/2016
|
Granted
|
Belgium
|
08/09/2011 - 11773325.3
|
17/07/2013 - 2 613 801
|
2 613 801 - 08/06/2016
|
Granted
|
Czech Republic
|
08/09/2011 - 11773325.3
|
17/07/2013 - 2 613 801
|
2 613 801 - 08/06/2016
|
Granted
|
France
|
08/09/2011 - 11773325.3
|
17/07/2013 - 2 613 801
|
2 613 801 - 08/06/2016
|
Granted
|
Germany
|
08/09/2011 - 11773325.3
|
17/07/2013 - 2 613 801
|
2 613 801 - 08/06/2016
|
Granted
|
Greece
|
08/09/2011 - 11773325.3
|
17/07/2013 - 2 613 801
|
2 613 801 - 08/06/2016
|
Granted
|
Hungary
|
08/09/2011 - 11773325.3
|
17/07/2013 - 2 613 801
|
2 613 801 - 08/06/2016
|
Granted
|
Ireland
|
08/09/2011 - 11773325.3
|
17/07/2013 - 2 613 801
|
2 613 801 - 08/06/2016
|
Granted
|
Italy
|
08/09/2011 - 11773325.3
|
17/07/2013 - 2 613 801
|
2 613 801 - 08/06/2016
|
Granted
|
Poland
|
08/09/2011 - 11773325.3
|
17/07/2013 - 2 613 801
|
2 613 801 - 08/06/2016
|
Granted
|
Portugal
|
08/09/2011 - 11773325.3
|
17/07/2013 - 2 613 801
|
2 613 801 - 08/06/2016
|
Granted
|
Spain
|
08/09/2011 - 11773325.3
|
17/07/2013 - 2 613 801
|
2 613 801 - 08/06/2016
|
Granted
|
Sweden
|
08/09/2011 - 11773325.3
|
17/07/2013 - 2 613 801
|
2 613 801 - 08/06/2016
|
Granted
|
Switzerland
|
08/09/2011 - 11773325.3
|
17/07/2013 - 2 613 801
|
2 613 801 - 08/06/2016
|
Granted
|
The Netherlands
|
08/09/2011 - 11773325.3
|
17/07/2013 - 2 613 801
|
2 613 801 - 08/06/2016
|
Granted
|
Turkey
|
08/09/2011 - 11773325.3
|
17/07/2013 - 2 613 801
|
2 613 801 - 08/06/2016
|
Granted
|
United Kingdom
|
08/09/2011 - 11773325.3
|
17/07/2013 - 2 613 801
|
2 613 801 - 08/06/2016
|
Granted
|
Hong Kong
|
08/09/2011 - 14100513.2
|
-
|
-
|
Allowed
|
Israel
|
08/09/2011 - 225102
|
-
|
-
|
Pending
|
Japan
|
08/09/2011 - 2013-527738
|
30/09/2013 - P2013-537187A
|
5,977,238 - 29/07/2016
|
Granted
|
Korea
|
08/09/2011 - 2013-7008892
|
-
|
-
|
Pending
|
Mexico
|
08/09/2011 - MX/a/2013/002668
|
-
|
-
|
Pending
|
Singapore
|
08/09/2011 - 201301743-9
|
-
|
188473 - 26/01/2016
|
Granted
|
U.S.A
|
08/09/2011- 15/242,666
|
-
|
-
|
Pending
|
U.S.A
|
08/09/2011 - 13/821,255
|
04/07/2013 - 2013-0171108-A1
|
9,421,228 - 23/08/2016
|
Granted
|
Country
|
Application
|
Publication
|
Grant
|
Status
|
U.S.A
|
08/09/2011 - 61/532,172
|
-
|
-
|
Expired
|
PCT
|
06/09/2012 - PCT/IL2012/050354
|
14/03/2013 - WO 2013/035099
|
-
|
Published
|
Australia
|
06/09/2012 - 20120305931
|
-
|
-
|
Pending
|
Brazil
|
06/09/2012 - BR 11 2014 005355 3
|
21/10/2014 -
|
-
|
Published
|
Canada
|
06/09/2012 - 2,848,121
|
-
|
-
|
Pending
|
China
|
06/09/2012 - 201280054739.X
|
16/07/2014 - CN 103930130 A
|
201280054739.X - 06/06/2016
|
Granted
|
European Patent Office
|
06/09/2012 - 12769743.1
|
16/07/2014 - 2753351
|
-
|
Pending
|
Hong Kong
|
06/09/2012 - HK 15100534.6
|
31/07/2015 - 1200099A
|
-
|
Published
|
India
|
06/09/2012 - 577/MUMNP/2014
|
-
|
-
|
Pending
|
Israel
|
06/09/2012 - 231397
|
-
|
-
|
Pending
|
Japan
|
06/09/2012 - 2014-529143
|
06/10/2014 - P2014-526244A
|
-
|
Published
|
Korea
|
06/09/2012 - 10-2014-7009267
|
23/07/2014 - 10-2014-0092298
|
-
|
Published
|
Mexico
|
06/09/2012 - MX/a/2014/002771
|
-
|
-
|
Pending
|
New Zealand
|
06/09/2012 - 622749
|
-
|
622749 - 02/02/2016
|
Granted
|
Russian Federation
|
06/09/2012 - 2014110897
|
-
|
-
|
Pending
|
Singapore
|
06/09/2012 - 11201400513P
|
-
|
-
|
Pending
|
South Africa
|
06/09/2012 - 2014/01993
|
19/09/2014 -
|
-
|
Allowed
|
U.S.A
|
06/09/2012 - 14/343,053
|
31/07/2014 - 2014-0212398
|
-
|
Pending
|
Russian Federation
|
20/12/2012 - 2014128479
|
-
|
-
|
Pending
|
Russian Federation
|
20/12/2012 - 2014129632
|
27/06/2013 - WO 2013/093919
|
-
|
Pending
|
Singapore
|
20/12/2012 - 11201403459X
|
-
|
-
|
Pending
|
Singapore
|
20/12/2012 - 11201403456U
|
-
|
11201403456U - 08/06/2016
|
Granted
|
South Africa
|
20/12/2012 - 2014/05071
|
-
|
2014/05071 - 25/11/2015
|
Granted
|
South Africa
|
20/12/2012 - 2014/05298
|
-
|
2014/05298 - 25/11/2015
|
Granted
|
U.S.A
|
20/12/2012 - 14/367,923
|
18/12/2014 - 2014-0369974
|
-
|
Published
|
U.S.A
|
20/12/2012 - 14/367,917
|
11/12/2014 - 2014-0363437
|
-
|
Published
|
Country
|
Application
|
Publication
|
Grant
|
Status
|
U.S.A
|
16/07/2015 - 62/193,207
|
-
|
-
|
Expired
|
PCT
|
14/07/2016 - PCT/IL2016/050774
|
-
|
-
|
Pending
|
Country
|
Application
|
Publication
|
Grant
|
Status
|
U.S.A
|
16/07/2015 - 62/193,207
|
-
|
-
|
Expired
|
PCT
|
14/07/2016 -
|
-
|
-
|
Pending
|
Country
|
Application
|
Publication
|
Grant
|
Status
|
U.S.A
|
27/06/2016 -
|
-
|
-
|
Pending
|
WHEREAS |
Yeda and Cell Source are parties to a research and licence agreement dated October 3, 2011, as amended by a first amendment thereto dated April 8, 2014 and a second amendment dated November 28, 2016 ("
the R&L Agreement”
); and
|
WHEREAS |
Cell Source wishes to fund additional research at the Institute, to be carried out jointly by Prof. Zelig Eshhar and Prof. Yair Reisner until March 1, 2018, and thereafter by Prof. Zelig Eshhar and Prof. Ruth Arnon (the “
Scientists
”), as more particularly set out herein, and Yeda is willing, subject to and in accordance with the terms and conditions of this Amendment, to procure the performance of the additional research at the Institute,
|
1. |
Amendment
.
|
1.1. |
Terms and phrases used in this Amendment
which are defined in the R&L Agreement shall have in this Amendment the same meaning as that attributed to them in the R&L Agreement, unless otherwise expressly defined in this Amendment.
|
1.2. |
This Amendment and the R&L Agreement shall be read as one and shall represent the complete current understanding between the parties with respect to the subject matter hereof. Subject to the modifications contained herein, the provisions of the R&L Agreement shall remain unaltered and in full force and effect.
|
|
|
Ref. 09-1809-17-541
|
No. 198302_006
|
1.3. |
The above preamble and the appendices hereto form an integral part of this Amendment.
|
2. |
Additional
Research
.
|
2.1. |
In
addition
to the Research conducted pursuant to the R&L Agreement, and in consideration of the sums to be paid by the Company to Yeda pursuant to clause 2.2 below, Yeda undertakes to procure the performance of the research program attached hereto as
Annex A
(the “
Additional Research
”) at the Institute during the 12-month period commencing on January 1, 2018 (the “
Additional Research Period
”).
|
2.1.1. |
From January 1, 2018 until February 28, 2018, the Additional Research shall be performed under the supervision of Prof. Zelig Eshhar and Prof. Yair Reisner.
|
2.1.2. |
From March 1, 2018 through the end of the Additional Research Period, the Additional Research shall be performed under the supervision of Prof Zelig Eshhar and Prof. Ruth Arnon
.
|
2.2. |
The Company undertakes to pay to Yeda the amount of US$ 100,000 (one hundred thousand US dollars) (the “
Additional Research Budget
”) as follows:
|
2.2.1. |
The amount of US$ 50,000 (fifty thousand US dollars), to fund the portion of the Additional Research to be conducted under the supervision of Prof. Yair Reisner and Prof. Ruth Arnon, which amount shall be deducted from the Research Budget payable during the “year” of the Research, pursuant to the R&L Agreement, during with this Amendment is executed; and
|
2.2.2. |
The amount of US$ 50,000 (fifty thousand US dollars) to fund the portion of the Additional Research to be conducted under the supervision of Prof. Zelig Eshhar. For avoidance of doubt no deduction shall be made to the Research Budget in respect of the payment of this amount.
|
2.3. |
The Additional Research Budget shall be paid in full within 14 days of the date of execution hereof. Other than with respect to amount and payment dates, which shall be governed by the provisions hereof, the Additional Research Budget shall be governed by the terms of the R&L Agreement which pertain to the Research Budget.
|
2.4. |
The provisions of sections 2.2 of the R&L Agreement shall apply mutatis mutandis in the case that one or both of the Scientists shall cease to be available for the supervision of the performance of the Additional Research.
|
2.5. |
All right and title to the results of the Additional Research shall vest in Yeda, and such results shall be deemed Licensed Information pursuant to the R&L Agreement.
|
|
2 |
|
Ref. 09-1809-17-541
|
No. 198302_006
|
2.6. |
With respect to the Company’s license to the results of the Additional Research only, the definition of “Products” in the R&L Agreement shall be deemed to include products for CAR-T cell therapy for treatment of disease.
|
2.7. |
Notwithstanding the provisions of sections 4.1 and 4.2 of the R&L Agreement, Yeda shall procure submission by the Scientists of a written report finalizing the results of the Additional Research within 60 days of the conclusion of the Additional Research, no interim reports being required, and Yeda shall submit to the Company a final financial report within 60 days of the conclusion of the Additional Research, no interim financial reports being required.
|
2.8. |
No representation or warranty is granted by the Company with respect to the results of the Additional Research, as set forth more fully in section 2.3 of the R&L Agreement.
|
2.9. |
The provisions of the sections 2.2 and 2.3 of the R&L Agreement shall apply to the Additional Research.
|
2.10. |
The terms and conditions of the R&L Agreement with respect to the Research shall apply mutatis mutandis to the Additional Research and the results thereof, unless expressly provided otherwise herein.
|
3. |
Entire Agreement
. For the avoidance of doubt, the R&L Agreement and this Amendment constitute the entire agreement between the parties hereto in respect of the subject matter hereof, and supersede all prior agreements or understandings between the parties relating to the subject matter hereof (including any previous correspondence in this regard, between the parties, or on their behalf) and may be amended only by a written document signed by both parties hereto.
|
For YEDA RESEARCH AND DEVELOPMENT COMPANY LIMITED
|
for CELL SOURCE LIMITED
|
|||
Signature:
|
/s/ Mudl Sheves
/s/ Gil Granot- Mayor
|
Signature:
|
/s/ Itamar Shimrat
|
|
Name
|
Prof. Mudl Sheves
Gil Granot-Mayor
|
Name:
|
Itamar Shimrat
|
|
Title
|
Chairman
CEO
|
Title:
|
Chief Executive Officer
|
|
3 |
|
Ref. 09-1809-17-541
|
No. 198302_006
|
1. |
Human studies:
|
A.1 |
Define optimal procedure for attaining VETO-CAR cells that retain their veto activity in-vitro after transfection and exhibit specific killing of a tumor cell line expressing the CAR antigen target using the vector against Her-2.
|
A.2 |
Based on A1 attempt to optimize VETO-CAR cells for multiple myeloma.
|
B. |
Continue our attempts to develop a short assay for veto activity.
|
B. |
Continue to optimize the use of genetically modified veto cells (OT1-veto) as opposed to OT1 and veto infused separately.
|
C. |
Finalize the study on the potential role of Tcm plus BM in the treatment of autoimmune NOD diabetic mice.
|
D. |
Continue to investigate the potential role of Tcm plus BM in the treatment of sickle cell disease in mice.
|
E. |
Continue to investigate the feasibility of generating anti-leukemia veto cells following immunization of the donor with leukemia specific antigens.
|
|
4 |
|
Ref. 09-1809-17-541
|
No. 198302_006
|
WHEREAS |
Yeda and Cell Source are parties (the “Parties”) to a research and licence agreement dated October
3
, 2011, as amended by a first amendment thereto dated April 8, 2014 a second amendment thereto dated November 28, 2016, and a third amendment dated
March 29, 2018
(together, "
the R&L Agreement”
); and
|
WHEREAS |
Professor Yair Reisner is leaving the Weizmann Institute of Science (the “Institute”) and commencing employment at the University of Texas M.D. Anderson Cancer Center, (hereinafter “MDA”) in Texas in the United States of America; and
|
WHEREAS |
the Parties are aware that Prof. Ruth Arnon shall be assuming the role of supervising the Research as defined in the R&L Agreement; and
|
WHEREAS |
the Parties also wish to modify the R&L Agreement with respect to the milestones and other aspects of the Research;
|
1.
|
Terms and phrases used in this Amendment
which are defined in the R&L Agreement shall have in this Amendment the same meaning as that attributed to them in the R&L Agreement, unless otherwise expressly defined in this Amendment.
|
2.
|
This Amendment and the R&L Agreement shall be read as one and shall represent the complete current understanding between the parties with respect to the subject matter hereof. Subject to the modifications contained herein, the provisions of the R&L Agreement shall remain unaltered and in full force and effect.
|
|
|
|
Ref. 09-1809-18-702
|
No. 205156 003
|
3.
|
The above preamble and sections form an integral part of this Amendment.
|
4.
|
Cell Source acknowledges that it has, and shall have, no claim against Yeda, the Institute, or Prof. Yair Reisner, or their continued use of IP owned by Yeda and licensed to the Company with regard to the departure of Prof. Yair Reisner from the Institute.
|
5.
|
Clause 3 of the R&L
Agreement shall be modified, with effect as of the Effective Date, whereby:
|
a.
|
Instalments paid with respect to the period between October 2017 – March 2018 shall not be effected;
|
b.
|
The instalment payable with respect to the Research conducted during April-June 2018 shall be in the amount of one hundred thousand (US$ 100,000) dollars, in place of two hundred thousand (US$ 200,000) dollars; and
|
c.
|
The instalment payable with respect to the Research conducted during July-September 2018 shall be in the amount of fifty thousand (US$ 50,000) dollars, in place of two hundred thousand (US$ 200,000) dollars.
|
a.
|
For the period of October-December 2018: fifty thousand (US$ 50,000) dollars;
|
b.
|
For the period of January-March 2019: twenty-five thousand (US$ 25,000) dollars;
|
c.
|
For the period of April-June 2019: twenty-five thousand (US$ 25,000) dollars.
|
6.
|
The milestone stated in Clause 13.2.1(a) (by January 1, 2018, to have successfully filed a pre-IND application in respect of a Product with the FDA or other equivalent regulatory agency in another country) is deemed achieved based upon the representations provided by the Company in respect of ‘internal IND’ procedures having been concluded at MDA.
|
7.
|
The milestone in Clause 13.2.1(b) shall be replaced by the following:
|
8.
|
The milestone in Clause 13.2.1(c) shall be replaced by the following:
|
|
2 |
|
Ref. 09-1809-18-702
|
No. 205156 003
|
9.
|
The work plan included as Annex A to the Third Amendment to the Research and Licence Agreement shall be replaced by the Work Plan for Cell Source:1
st
April 2018 – 30 June 2019, annexed hereto as
Annex A
.
|
10.
|
The work plan included as Appendix B to the Research and Licence Agreement shall continue to apply, subject to the modifications in the Work Plan for Cell Source (Ruth Arnon only): 1
st
April 2018 – 30 June 2019, annexed hereto as
Annex B
.
|
11.
|
Yeda’s bank details in clause 17.7 thereto shall deleted and replaced by the following: “Account no. 5320022, Bank Leumi le Israel B.M, LeumiTech Herzliya branch no. 864 Swift code: LUMIILITXXX. Routing no. IL010864. IBAN: IL72 0108 6400 0007 5320 022. Branch address: 15 Galalei Haplada, Herzliya, Israel”.
|
12.
|
For the avoidance of doubt, this Amendment constitutes the entire agreement between the parties hereto in respect of the subject matter hereof, and supersedes all prior agreements or understandings between the parties relating to the subject matter hereof (including any previous correspondence in this regard, between the parties, or on their behalf), and may be amended only by a written document signed by both parties hereto.
|
|
3 |
|
Ref. 09-1809-18-702
|
No. 205156 003
|
For YEDA RESEARCH AND DEVELOPMENT CO., LTD
|
For CELL SOURCE LIMITED
|
|||
Signature:
|
/s/ Mudl Sheves
/s/ Gil Granot-Mayor
|
Signature:
|
/s/ Itamar Shimrat
|
|
Name
|
Prof. Mudl Sheves
Gil Granot-Mayor
|
Name:
|
Itamar Shimrat
|
|
Title
|
Chairman
CEO
|
Title:
|
Chief Executive Officer
|
|
4 |
|
Ref. 09-1809-18-702
|
No. 205156 003
|
1.
|
Human studies :
|
A.
|
Human VETO-project : continue collaboration with Zelig.
|
* |
The proposed plan might be changed according to progress and therefore while some aims will be intensively investigated other might not be performed.
|
|
5 |
|
Ref. 09-1809-18-702
|
No. 205156 003
|
2.
|
Human studies :
|
B.
|
Continue to optimize the use of genetically modified veto cells (OT1-veto) as opposed to OT1 and veto infused separately.
|
C.
|
Finalize the study on the potential role of Tcm plus BM in the treatment of autoimmune NOD diabetic mice.
|
D.
|
Continue to investigate the potential role of Tcm plus BM in the treatment of sickle cell disease in mice
|
E.
|
Continue to Investigate the feasibility of generating anti-leukemia veto cells following immunization of the donor with leukemia specific antigens.
|
* |
The proposed plan might be changed according to progress and therefore while some aims will be intensively investigated other might not be performed.
|
|
6 |
|
Ref. 09-1809-18-702
|
No. 205156 003
|
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Dated: July 24, 2018
|
By:
|
/s/ Itamar Shimrat
|
Itamar Shimrat
|
||
Chief Executive Officer and Chief Financial Officer
|
||
(Principal Executive, Financial and Accounting Officer)
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated: July 24, 2018
|
By:
|
/s/ Itamar Shimrat
|
Itamar Shimrat
|
||
Chief Executive Officer and Chief Financial Officer
|
||
(Principal Executive, Financial and Accounting Officer)
|