Delaware
|
20-8133057
|
(State or other jurisdiction of
|
(I.R.S. Employer
|
incorporation or organization)
|
Identification No.)
|
Large accelerated filer ¨
|
Accelerated filer ¨
|
|
Non-accelerated filer ¨ (Do not check if a smaller reporting company)
|
Smaller reporting company x
|
Page Number
|
||
PART I
|
||
Item 1. Financial Statements
|
2 | |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
30 | |
Item 3. Quantitative and Qualitative Disclosures About Market Risk
|
34 | |
Item 4. Controls and Procedures
|
35 | |
PART II
|
||
Item 1. Legal Proceedings
|
36 | |
Item 1A. Risk Factors
|
36 | |
Item 5. Other Information
|
36 | |
Item 6. Exhibits
|
36 |
Page
|
||
Consolidated Balance Sheets
|
4
|
|
Consolidated Statements of Operations
|
5
|
|
Statements of Changes in Stockholders' Equity (Deficiency)
|
6 – 12
|
|
Consolidated Statements of Cash Flows
|
13
|
|
Notes to Consolidated Financial Statements
|
14 - 29
|
March 31,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
Unaudited
|
Audited
|
|||||||
ASSETS
|
||||||||
Current Assets:
|
||||||||
Cash and cash equivalents
|
$ | 3,664 | $ | 93 | ||||
Accounts other receivable and prepaid expenses
|
221 | 486 | ||||||
Total current assets
|
3,885 | 579 | ||||||
Long-Term Investments:
|
||||||||
Prepaid expenses
|
- | 1 | ||||||
Severance pay fund
|
100 | 90 | ||||||
Total long-term investments
|
100 | 91 | ||||||
Property and Equipment, Net
|
418 | 419 | ||||||
Total assets
|
$ | 4,403 | $ | 1,089 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
|
||||||||
Current Liabilities:
|
||||||||
Trade payables
|
$ | 401 | $ | 307 | ||||
Other accounts payable and accrued expenses
|
1,209 | 979 | ||||||
Short-term convertible note
|
- | 137 | ||||||
Total current liabilities
|
1,610 | 1,423 | ||||||
Accrued Severance Pay
|
127 | 125 | ||||||
Total liabilities
|
1,737 | 1,548 | ||||||
Commitments And Contingencies Stockholders' Equity (Deficiency):
|
||||||||
Stock capital: (Note 8)
|
6 | 5 | ||||||
Common stock of $0.00005 par value - Authorized: 800,000,000 shares at March 31, 2011 and December 31, 2010; Issued and outstanding: 121,034,291 and 95,832,978 shares at March 31, 2011 and December 31, 2010, respectively.
|
||||||||
Additional paid-in-capital
|
43,525 | 39,696 | ||||||
Deficit accumulated during the development stage
|
(40,865 | ) | (40,160 | ) | ||||
Total stockholders' equity (deficiency)
|
2,666 | (459 | ) | |||||
Total liabilities and stockholders' equity
|
$ | 4,403 | $ | 1,089 |
Three months
|
Period from
September 22,
2000 (inception
date) through
|
|||||||||||
ended March 31,
|
March 31,
|
|||||||||||
2011
|
2010
|
2011
|
||||||||||
Unaudited
|
Unaudited
|
|||||||||||
Operating costs and expenses:
|
||||||||||||
Research and development, net
|
$ | 270 | $ | 239 | $ | 23,000 | ||||||
General and administrative
|
258 | 370 | 15,056 | |||||||||
Total operating costs and expenses
|
528 | 609 | 38,056 | |||||||||
Financial income expenses, net
|
177 | 6 | 2,573 | |||||||||
Operating loss
|
705 | 615 | 40,629 | |||||||||
Taxes on income
|
- | - | 72 | |||||||||
Loss from continuing operations
|
705 | 615 | 40,701 | |||||||||
Net loss from discontinued operations
|
- | - | 164 | |||||||||
Net loss
|
705 | 615 | 40,865 | |||||||||
Basic and diluted net loss per share from continuing operations
|
$ | 0.01 | $ | 0.01 | ||||||||
Weighted average number of shares outstanding used in computing basic and diluted net loss per share
|
108,895,199 | 81,560,155 |
Deficit
accumulated
|
Total
|
|||||||||||||||||||||||
Additional
|
Deferred
|
during the
|
stockholders'
|
|||||||||||||||||||||
Common stock
|
paid-in
|
Stock - based
|
development
|
equity
|
||||||||||||||||||||
Number
|
Amount
|
capital
|
compensation
|
stage
|
(deficiency)
|
|||||||||||||||||||
Balance as of September 22, 2000 (date of inception)
|
- | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||
Stock issued on September 22, 2000 for cash at $0.00188 per share
|
8,500,000 | 1 | 16 | - | - | 17 | ||||||||||||||||||
Stock issued on March 31, 2001 for cash at $0.0375 per share
|
1,600,000 | * - | 60 | - | - | 60 | ||||||||||||||||||
Contribution of capital
|
- | - | 8 | - | - | 8 | ||||||||||||||||||
Net loss
|
- | - | - | - | (17 | ) | (17 | ) | ||||||||||||||||
Balance as of March 31, 2001
|
10,100,000 | 1 | 84 | - | (17 | ) | 68 | |||||||||||||||||
Contribution of capital
|
- | - | 11 | - | - | 11 | ||||||||||||||||||
Net loss
|
- | - | - | - | (26 | ) | (26 | ) | ||||||||||||||||
Balance as of March 31, 2002
|
10,100,000 | 1 | 95 | - | (43 | ) | 53 | |||||||||||||||||
Contribution of capital
|
- | - | 15 | - | - | 15 | ||||||||||||||||||
Net loss
|
- | - | - | - | (47 | ) | (47 | ) | ||||||||||||||||
Balance as of March 31, 2003
|
10,100,000 | 1 | 110 | - | (90 | ) | 21 | |||||||||||||||||
2-for-1 stock split
|
10,100,000 | * - | - | - | - | - | ||||||||||||||||||
Stock issued on August 31, 2003 to purchase mineral option at $0.065 per share
|
100,000 | * - | 6 | - | - | 6 | ||||||||||||||||||
Cancellation of shares granted to Company's President
|
(10,062,000 | ) | * - | * - | - | - | - | |||||||||||||||||
Contribution of capital
|
- | * - | 15 | - | - | 15 | ||||||||||||||||||
Net loss
|
- | - | - | - | (73 | ) | (73 | ) | ||||||||||||||||
Balance as of March 31, 2004
|
10,238,000 | $ | 1 | $ | 131 | $ | - | $ | (163 | ) | $ | (31 | ) | |||||||||||
Deficit
accumulated
|
Total
|
|||||||||||||||||||||||
Additional
|
Deferred
|
during the
|
stockholders'
|
|||||||||||||||||||||
Common stock
|
paid-in
|
Stock - based
|
development
|
equity
|
||||||||||||||||||||
Number
|
Amount
|
capital
|
compensation
|
stage
|
(deficiency)
|
|||||||||||||||||||
Balance as of March 31, 2004
|
10,238,000 | $ | 1 | $ | 131 | $ | - | $ | (163 | ) | $ | (31 | ) | |||||||||||
Stock issued on June 24, 2004 for private placement at $0.01 per share, net of $25,000 issuance expenses
|
8,510,000 | * - | 60 | - | - | 60 | ||||||||||||||||||
Contribution capital
|
- | - | 7 | - | - | 7 | ||||||||||||||||||
Stock issued in 2004 for private placement at $0.75 per unit
|
1,894,808 | * - | 1,418 | - | - | 1,418 | ||||||||||||||||||
Cancellation of shares granted to service providers
|
(1,800,000 | ) | * - | - | - | - | ||||||||||||||||||
Deferred stock-based compensation related to options granted to employees
|
- | - | 5,979 | (5,979 | ) | - | - | |||||||||||||||||
Amortization of deferred stock-based compensation related to shares and options granted to employees
|
- | - | - | 584 | - | 584 | ||||||||||||||||||
Compensation related to shares and options granted to service providers
|
2,025,000 | * - | 17,506 | - | - | 17,506 | ||||||||||||||||||
Net loss
|
- | - | - | - | (18,840 | ) | (18,840 | ) | ||||||||||||||||
Balance as of March 31, 2005
|
20,867,808 | $ | 1 | $ | 25,101 | $ | (5,395 | ) | $ | (19,003 | ) | $ | 704 |
Deficit
accumulated
|
Total
|
|||||||||||||||||||||||
Additional
|
Deferred
|
during the
|
stockholders'
|
|||||||||||||||||||||
Common stock
|
paid-in
|
Stock - based
|
development
|
equity
|
||||||||||||||||||||
Number
|
Amount
|
capital
|
compensation
|
stage
|
(deficiency)
|
|||||||||||||||||||
Balance as of March 31, 2005
|
20,867,808 | $ | 1 | $ | 25,101 | $ | (5,395 | ) | $ | (19,003 | ) | $ | 704 | |||||||||||
Stock issued on May 12, 2005 for private placement at $0.8 per share
|
186,875 | * - | 149 | - | - | 149 | ||||||||||||||||||
Stock issued on July 27, 2005 for private placement at $0.6 per share
|
165,000 | * - | 99 | - | - | 99 | ||||||||||||||||||
Stock issued on September 30, 2005 for private placement at $0.8 per share
|
312,500 | * - | 225 | - | - | 225 | ||||||||||||||||||
Stock issued on December 7, 2005 for private placement at $0.8 per share
|
187,500 | * - | 135 | - | - | 135 | ||||||||||||||||||
Forfeiture of options granted to employees
|
- | - | (3,363 | ) | 3,363 | - | - | |||||||||||||||||
Deferred stock-based compensation related to shares and options granted to directors and employees
|
200,000 | * - | 486 | (486 | ) | - | - | |||||||||||||||||
Amortization of deferred stock-based compensation related to options and shares granted to employees and directors
|
- | - | 51 | 1,123 | - | 1,174 | ||||||||||||||||||
Stock-based compensation related to options and shares granted to service providers
|
934,904 | * - | 662 | - | - | 662 | ||||||||||||||||||
Reclassification due to application of ASC 815-40-25 (formerly EITF 00-19)
|
- | - | (7,906 | ) | (7,906 | ) | ||||||||||||||||||
Beneficial conversion feature related to a convertible bridge loan
|
- | - | 164 | - | - | 164 | ||||||||||||||||||
Net loss
|
- | - | - | - | (3,317 | ) | (3,317 | ) | ||||||||||||||||
Balance as of March 31, 2006
|
22,854,587 | $ | 1 | $ | 15,803 | $ | (1,395 | ) | $ | (22,320 | ) | $ | (7,911 | ) | ||||||||||
Elimination of deferred stock compensation due to implementation of ASC 718-10 (formerly SFAS 123(R))
|
- | - | (1,395 | ) | 1,395 | - | - | |||||||||||||||||
Stock-based compensation related to shares and options granted to directors and employees
|
200,000 | * - | 1,168 | - | - | 1,168 | ||||||||||||||||||
Reclassification due to application of ASC 815-40-25 (formerly EITF 00-19)
|
- | - | 7,191 | - | - | 7,191 | ||||||||||||||||||
Stock-based compensation related to options and shares granted to service providers
|
1,147,225 | - | 453 | - | - | 453 | ||||||||||||||||||
Warrants issued to convertible note holder
|
- | - | 11 | - | - | 11 | ||||||||||||||||||
Warrants issued to loan holder
|
- | - | 110 | - | - | 110 | ||||||||||||||||||
Beneficial conversion feature related to convertible bridge loans
|
- | - | 1,086 | - | - | 1,086 | ||||||||||||||||||
Net loss
|
- | - | - | - | (3,924 | ) | (3,924 | ) | ||||||||||||||||
Balance as of December 31, 2006
|
24,201,812 | $ | 1 | $ | 24,427 | $ | - | $ | (26,244 | ) | $ | (1,816 | ) |
Deficit
accumulated
|
Total
|
|||||||||||||||||||||||
Additional
|
Deferred
|
during the
|
stockholders'
|
|||||||||||||||||||||
Common stock
|
paid-in
|
Stock - based
|
development
|
equity
|
||||||||||||||||||||
Number
|
Capital
|
compensation
|
stage
|
stage
|
(deficiency)
|
|||||||||||||||||||
Balance as of December 31, 2006
|
24,201,812 | $ | 1 | $ | 24,427 | $ | - | $ | (26,244 | ) | $ | (1,816 | ) | |||||||||||
Stock-based compensation related to options and shares granted to service providers
|
544,095 | 1,446 | - | - | 1,446 | |||||||||||||||||||
Warrants issued to convertible note holder
|
- | - | 109 | - | - | 109 | ||||||||||||||||||
Stock-based compensation related to shares and options granted to directors and employees
|
200,000 | * - | 1,232 | - | - | 1,232 | ||||||||||||||||||
Beneficial conversion feature related to convertible loans
|
- | - | 407 | - | - | 407 | ||||||||||||||||||
Conversion of convertible loans
|
725,881 | * - | 224 | - | - | 224 | ||||||||||||||||||
Exercise of warrants
|
3,832,621 | * - | 214 | - | - | 214 | ||||||||||||||||||
Stock issued for private placement at $0.1818 per unit, net of finder's fee
|
11,500,000 | 1 | 1,999 | - | - | 2,000 | ||||||||||||||||||
Net loss
|
- | - | - | - | (6,244 | ) | (6,244 | ) | ||||||||||||||||
Balance as of December 31, 2007
|
41,004,409 | $ | 2 | $ | 30,058 | $ | - | $ | (32,488 | ) | $ | (2,428 | ) | |||||||||||
Stock-based compensation related to options and stock granted to service providers
|
90,000 | - | 33 | - | - | 33 | ||||||||||||||||||
Stock-based compensation related to stock and options granted to directors and employees
|
- | - | 731 | - | - | 731 | ||||||||||||||||||
Conversion of convertible loans
|
3,644,610 | * - | 1,276 | - | - | 1,276 | ||||||||||||||||||
Exercise of warrants
|
1,860,000 | * - | - | - | - | - | ||||||||||||||||||
Exercise of options
|
17,399 | * - | 3 | - | - | 3 | ||||||||||||||||||
Stock issued for private placement at $0.1818 per unit, net of finder's fee
|
8,625,000 | 1 | 1,499 | - | - | 1,500 | ||||||||||||||||||
Subscription of shares for private placement at $0.1818 per unit
|
- | - | 281 | - | - | 281 | ||||||||||||||||||
Net loss
|
- | - | - | - | (3,472 | ) | (3,472 | ) | ||||||||||||||||
Balance as of December 31, 2008
|
55,241,418 | $ | 3 | $ | 33,881 | $ | - | $ | (35,960 | ) | $ | (2,076 | ) |
Common stock
|
Additional paid-in
|
Deferred
stock - based
|
Deficit
accumulated
during the
development
|
Total
stockholders'
equity
|
||||||||||||||||||||
Number
|
Amount
|
capital
|
compensation
|
stage
|
(deficiency)
|
|||||||||||||||||||
Balance as of December 31, 2008
|
55,241,418 | $ | 3 | $ | 33,881 | $ | - | $ | (35,960 | ) | $ | (2,076 | ) | |||||||||||
Stock-based compensation related to options and stock granted to service providers
|
5,284,284 | (* | ) | 775 | - | - | 775 | |||||||||||||||||
Stock-based compensation related to stock and options granted to directors and employees
|
- | - | 409 | - | - | 409 | ||||||||||||||||||
Conversion of convertible loans
|
2,500,000 | (* | ) | 200 | - | - | 200 | |||||||||||||||||
Exercise of warrants
|
3,366,783 | (* | ) | - | - | - | - | |||||||||||||||||
Stock issued for amendment of private placement
|
9,916,667 | 1 | - | - | - | 1 | ||||||||||||||||||
Subscription of shares
|
- | - | 729 | - | - | 729 | ||||||||||||||||||
Net loss
|
- | - | - | - | $ | (1,781 | ) | (1,781 | ) | |||||||||||||||
Balance as of December 31, 2009
|
76,309,152 | $ | 4 | $ | 35,994 | $ | - | $ | (37,741 | ) | $ | (1,743 | ) |
Deficit
|
||||||||||||||||||||||||
accumulated
|
Total
|
|||||||||||||||||||||||
Common stock
|
Additional
paid-in
|
Deferred
Stock - based
|
during the
development
|
stockholders'
equity
|
||||||||||||||||||||
Number
|
Amount
|
capital
|
compensation
|
stage
|
(deficiency)
|
|||||||||||||||||||
Balance as of December 31, 2009
|
76,309,152 | $ | 4 | $ | 35,994 | - | $ | (37,741 | ) | $ | (1,743 | ) | ||||||||||||
Stock-based compensation related to options and stock granted to service providers
|
443,333 | * - | 96 | - | - | 96 | ||||||||||||||||||
Stock-based compensation related to stock and options granted to directors and employees
|
466,667 | * - | 388 | - | - | 388 | ||||||||||||||||||
Stock issued for amendment of private placement
|
7,250,000 | 1 | 1,750 | - | - | 1,751 | ||||||||||||||||||
Conversion of convertible note
|
402,385 | * - | 135 | - | - | 135 | ||||||||||||||||||
Conversion of convertible loans
|
1,016,109 | * - | 189 | - | - | 189 | ||||||||||||||||||
Issuance of shares
|
2,475,000 | 400 | 400 | |||||||||||||||||||||
Exercise of options
|
1,540,885 | * - | 77 | - | - | 77 | ||||||||||||||||||
Exercise of warrants
|
3,929,446 | * - | 11 | - | - | 11 | ||||||||||||||||||
Subscription of shares for private placement at $0.12 per unit
|
455 | - | - | 455 | ||||||||||||||||||||
Conversion of trade payable to stock
|
201 | 201 | ||||||||||||||||||||||
Issuance of shares on account of previously subscribed shares
|
2,000,001 | * - | - | - | - | - | ||||||||||||||||||
Net loss
|
- | - | - | - | (2,419 | ) | (2,419 | ) | ||||||||||||||||
Balance as of December 31, 2010
|
95,832,978 | $ | 5 | $ | 39,696 | $ | - | $ | (40,160 | ) | $ | (459 | ) |
Deficit
|
||||||||||||||||||||||||
accumulated
|
Total
|
|||||||||||||||||||||||
Common stock
|
Additional
paid-in
|
Deferred
Stock - based
|
during the
development
|
stockholders'
equity
|
||||||||||||||||||||
Number
|
Amount
|
capital
|
compensation
|
stage
|
(deficiency)
|
|||||||||||||||||||
Balance as of December 31, 2010
|
95,832,978 | $ | 5 | $ | 39,696 | $ | - | $ | (40,160 | ) | $ | (459 | ) | |||||||||||
Stock-based compensation related to options and stock granted to service providers
|
- | - | (20 | ) | - | - | (20 | ) | ||||||||||||||||
Stock-based compensation related to stock and options granted to directors and employees
|
- | - | 27 | - | - | 27 | ||||||||||||||||||
Stock issued for private placement
|
833,333 | - | 250 | - | - | 250 | ||||||||||||||||||
Conversion of convertible note
|
445,617 | - | 137 | - | - | 137 | ||||||||||||||||||
Exercise of options , net
|
94,764 | - | 55 | - | - | 55 | ||||||||||||||||||
Stock issued for private placement
|
13,327,600 | 1 | 3,356 | - | - | 3,357 | ||||||||||||||||||
Issuance of shares on account of previously
subscribed shares (See also Note 7B.1.f)
|
10,499,999 | - | 24 | - | - | 24 | ||||||||||||||||||
Net loss
|
- | - | - | - | (705 | ) | (705 | ) | ||||||||||||||||
Balance as of March 31, 2011
|
121,034,291 | $ | 6 | 43,525 | $ | - | $ | (40,865 | ) | $ | 2,666 |
Three months
ended March 31,
|
Period from
September 22,
2000
(inception date)
through March 31,
|
|||||||||||
2011
|
2010
|
2011
|
||||||||||
Unaudited
|
Unaudited
|
|||||||||||
Cash flows from operating activities:
|
||||||||||||
Net loss
|
$ | (705 | ) | $ | (615 | ) | $ | (40,865 | ) | |||
Less - loss for the period from discontinued operations
|
- | - | 164 | |||||||||
Adjustments to reconcile net loss to net cash used in operating activities:
|
698 | |||||||||||
Depreciation and amortization of deferred charges
|
38 | 42 | 188 | |||||||||
Severance pay, net
|
(8 | ) | 12 | 27 | ||||||||
Accrued interest on loans
|
- | - | 448 | |||||||||
Amortization of discount on short-term loans
|
- | - | 1,864 | |||||||||
Change in fair value of options and warrants
|
- | - | (795 | ) | ||||||||
Expenses related to shares and options granted to service providers
|
(20 | ) | 87 | 21,017 | ||||||||
Stock-based compensation granted to employees
|
27 | 96 | 5,713 | |||||||||
Decrease (increase) in other accounts receivable and prepaid expenses
|
265 | (65 | ) | (221 | ) | |||||||
Increase (decrease) in trade payables
|
94 | (61 | ) | 874 | ||||||||
Increase (decrease) in other accounts payable and accrued expenses
|
254 | (94 | ) | 1,715 | ||||||||
Erosion of restricted cash
|
- | - | (6 | ) | ||||||||
Net cash used in continuing operating activities
|
(55 | ) | (598 | ) | (9,179 | ) | ||||||
Net cash used in discontinued operating activities
|
- | - | (23 | ) | ||||||||
Total net cash used in operating activities
|
(55 | ) | (598 | ) | (9,202 | ) | ||||||
Cash flows from investing activities:
|
||||||||||||
Purchase of property and equipment
|
(37 | ) | (4 | ) | (1,122 | ) | ||||||
Restricted cash
|
- | - | 6 | |||||||||
Investment in lease deposit
|
1 | - | - | |||||||||
Net cash used in continuing investing activities
|
(36 | ) | (4 | ) | (1,116 | ) | ||||||
Net cash used in discontinued investing activities
|
- | - | (16 | ) | ||||||||
Total net cash used in investing activities
|
(36 | ) | (4 | ) | (1,132 | ) | ||||||
Cash flows from financing activities:
|
||||||||||||
Proceeds from issuance of Common stock, net
|
3,607 | 1,800 | 12,324 | |||||||||
Proceeds from loans, notes and issuance of warrants, net
|
- | - | 2,061 | |||||||||
Credit from bank
|
- | (37 | ) | - | ||||||||
Proceeds from exercise of warrants and options
|
55 | 53 | 171 | |||||||||
Repayment of short-term loans
|
- | - | (601 | ) | ||||||||
Net cash provided by continuing financing activities
|
3,662 | 1,816 | 13,955 | |||||||||
Net cash provided by discontinued financing activities
|
- | - | 43 | |||||||||
Total net cash provided by financing activities
|
3,662 | 1,816 | 13,998 | |||||||||
Increase in cash and cash equivalents
|
3,571 | 1,214 | 3,664 | |||||||||
Cash and cash equivalents at the beginning of the period
|
93 | 1 | - | |||||||||
Cash and cash equivalents at end of the period
|
3,664 | 1,215 | 3,664 | |||||||||
Non-cash financing activities:
|
||||||||||||
Conversion of convertible loan and convertible note to shares | ||||||||||||
Conversion of trade payable to Common Stock $84
|
137 | 324 | ||||||||||
Conversion of other accounts payable to Common Stock
|
24 |
A.
|
Brainstorm Cell Therapeutics Inc. (formerly: Golden Hand Resources Inc.) ("Company") was incorporated in the State of Washington on September 22, 2000.
|
B.
|
On May 21, 2004, the former major stockholders of the Company entered into a purchase agreement with a group of private investors, who purchased from the former major stockholders 6,880,000 shares of the then issued and outstanding 10,238,000 shares of Common Stock.
|
C.
|
On July 8, 2004, the Company entered into a licensing agreement with Ramot of Tel Aviv University Ltd. ("Ramot"), an Israeli corporation, to acquire a license certain stem cell technology (see Note 3). Subsequent to this agreement, the Company decided to focus on the development of novel cell therapies for neurodegenerative diseases, particularly Parkinson's disease, based on the acquired technology and research to be conducted and funded by the Company.
|
D.
|
On November 22, 2004, the Company changed its name from Golden Hand Resources Inc. to Brainstorm Cell Therapeutics Inc. to better reflect its new line of business in the development of novel cell therapies for neurodegenerative diseases. The Company owns all operational property and equipment.
|
E.
|
On October 25, 2004, the Company formed a wholly-owned subsidiary in Israel, Brainstorm Cell Therapeutics Ltd. ("BCT").
|
F.
|
On September 17, 2006, the Company's changed its fiscal year-end from March 31 to December 31.
|
G.
|
In December 2006, the Company changed its state of incorporation from Washington to Delaware.
|
H.
|
Since inception, the Company has devoted substantially all of its efforts to research and development, recruiting management and technical staff, acquiring assets and raising capital. In addition, the Company has not generated revenues. Accordingly, the Company is considered to be in the development stage, as defined in Statement of Financial Accounting Standards No. 7, "Accounting and reporting by development Stage Enterprises" ASC 915-10 (formerly "SFAS" 7).
|
I.
|
In October 2010, the Israeli Ministry of Health granted clearance for a Phase I/II clinical trial using the Company’s autologous NurOwn™ stem cell therapy in patients with ALS, subject to some additional process specifications as well as completion of the sterility validation study for tests performed. This clearance is a significant milestone for the Company and may expedite further fundraisings.
|
J.
|
In February 2011, the U.S. Food and Drug Administration (FDA) granted orphan drug designation to the Company’s NurOwn™ autologous adult stem cell product candidate for the treatment of amyotrophic lateral sclerosis (ALS).
|
|
a)
|
Ramot released the Company from its obligation to fund the extended research period in the total amount of $1,140. Therefore, the Company reversed an expense in 2009, equal to $760, from its research and development expenses that were previously expensed.
|
|
b)
|
Past due amounts of $240 for the initial research period plus interest of $32 owed by the Company to Ramot were converted into 1,120,000 shares of Common Stock on December 30, 2009. Ramot was required to deposit the shares with a broker and only sell the shares in the open market after 185 days from the issuance date.
|
|
c)
|
In the event that the total proceeds generated by sales of the shares on December 31, 2010, together with the March 31, 2010 payment, are less than $240 on or prior to December 31, 2010, then on such date the Company would be required to pay to Ramot the difference between the proceeds that Ramot has received from sales of the shares up to such date together with the September Payment (if any) that has been transferred to Ramot up to such date, and $240. Related compensation in the amount of $51 was recorded as research and development expenses.
|
|
A.
|
On July 8, 2004, the Company entered into consulting agreements with each of Prof. Eldad Melamed and Dr. Daniel Offen (together, the "Consultants"), under which the Consultants provide the Company scientific and medical consulting services in consideration for a monthly payment of $6 each. In addition, the Company granted each of the Consultants, a fully vested warrant to purchase 1,097,215 shares of Common Stock at an exercise price of $0.01 per share. The warrants issued pursuant to the agreements were issued to the Consultants effective as of November 4, 2004. Each of the warrants was exercisable for a seven-year period beginning on November 4, 2005. As of September 2010, all the above warrants had been exercised.
|
|
B.
|
On December 16, 2010, the Company granted to the consultants 1,100,000 shares of the Company's Common Stock for services rendered through December 31, 2010. Related compensation in the amount of $220 is recorded as research and development expense.
|
|
C.
|
As of March 31, 2011, the Company had a total liability of $212 for services rendered by the Consultants under the abovementioned agreements.
|
A.
|
The rights of Common Stock are as follows:
|
B.
|
Issuance of shares warrants and options:
|
1.
|
Private placements:
|
|
a)
|
On June 24, 2004, the Company issued to investors 8,510,000 shares of Common Stock for total proceeds of $60 (net of $25 issuance expenses).
|
|
b)
|
On February 23, 2005, the Company completed a private placement for the sale of 1,894,808 units for total proceeds of $1,418. Each unit consists of one share of Common Stock and a three-year warrant to purchase one share of Common Stock at $2.50 per share. This private placement was consummated in three tranches which closed in October 2004, November 2004 and February 2005.
|
|
c)
|
On May 12, 2005, the Company issued to an investor 186,875 shares of Common Stock at a price of $0.8 per share for total proceeds of $149.
|
|
d)
|
On July 27, 2005, the Company issued to investors 165,000 shares of Common Stock at a price of $0.6 per share for total proceeds of $99.
|
|
e)
|
On August 11, 2005, the Company signed a private placement agreement with investors for the sale of up to 1,250,000 units at a price of $0.8 per unit. Each unit consists of one share of Common Stock and one warrant to purchase one share of Common Stock at $1.00 per share. The warrants are exercisable for a period of three years from issuance. On March 31, 2005, the Company sold 312,500 units for total net proceeds of $225. On December 7, 2005, the Company sold 187,500 units for total net proceeds of $135.
|
|
f)
|
On July 2, 2007, the Company entered into an investment agreement, pursuant to which the Company agreed to sell up to 27,500,000 shares of Common Stock, for an aggregate subscription price of up to $5 million and warrants to purchase up to 30,250,000 shares of Common Stock. Separate closings of the purchase and sale of the shares and the warrants were originally scheduled to take place as follows:
|
Purchase date
|
Purchase price
|
Number of
subscription
shares
|
Number of
warrant
shares
|
|||||||||
August 30, 2007
|
$1,250 (includes $250 paid as a convertible loan)
|
6,875,000 | 7,562,500 | |||||||||
November 15, 2007
|
$ | 750 | 4,125,000 | 4,537,500 | ||||||||
February 15, 2008
|
$ | 750 | 4,125,000 | 4,537,500 | ||||||||
May 15, 2008
|
$ | 750 | 4,125,000 | 4,537,500 | ||||||||
July 30, 2008
|
$ | 750 | 4,125,000 | 4,537,500 | ||||||||
November 15, 2008
|
$ | 750 | 4,125,000 | 4,537,500 |
|
(a)
|
The investor shall invest the remaining amount of the original investment agreement at price per share of $0.12 in monthly installments of not less than $50 starting August 1, 2009. The investor may accelerate such payments in its discretion.
|
B.
|
Issuance of shares warrants and options: (Cont.)
|
1.
|
Private placements: (Cont.)
|
f)
|
(Cont.)
|
(b)
|
The exercise price of the last 10,083,334 warrants was reduced from an exercise price of $0.36 per share to $0.29 per share.
|
(c)
|
All warrants expire on November 5, 2013 instead of November 5, 2011.
|
(d)
|
The price per share of the investment agreement decreased from $0.1818 to $0.12, therefore the Company adjusted the number of Shares of Common Stock issuable pursuant the investment agreement retroactively and issued to the investor on October 28, 2009 an additional 9,916,667 shares of Common Stock for past investment.
|
(e)
|
The investor has the right to cease payments in the event that the price per share as of the closing on five consecutive trading days shall decrease to $0.05.
|
g)
|
In January 2010, the Company issued 1,250,000 units to a private investor for total proceeds of $250. Each unit consists of one share of Common Stock and a two-year warrant to purchase one share of Common Stock at $0.50 per share.
|
h)
|
In February 2010, the Company issued 6,000,000 shares of Common Stock to three investors (2,000,000 to each investor) and warrants to purchase an aggregate of 3,000,000 shares of Common Stock (1,000,000 to each investor) with an exercise price of $0.5 for aggregate proceeds of $1,500 ($500 each) through February 17, 2012.
|
i)
|
On February 7, 2011, the Company issued 833,333 shares of Common Stock, at a price of $0.3 per share, and a warrant to purchase 641,026 shares of the Company's Common Stock at an exercise price of $0.39 per share for one year for total proceeds of $250.
|
B.
|
Issuance of shares warrants and options: (Cont.)
|
|
1.
|
Private placements: (Cont.)
|
j)
|
On February 23, 2011, the Company entered into an investment agreement, pursuant to which the Company sold 12,815,000 shares of Common Stock, for an aggregate subscription price of $3.6 million and warrants to purchase up to 19,222,500 shares of Common Stock as follows: warrant to purchase 12,815,000 shares of Common Stock at $0.5 for two years, and warrants to purchase 6,407,500 shares of Common Stock at $0.28 for one year.
|
2.
|
Share-based compensation to employees and to directors:
|
a)
|
Options to employees and directors:
|
B.
|
Issuance of shares, warrants and options: (Cont.)
|
2.
|
Share-based compensation to employees and to directors: (Cont.)
|
a)
|
Options to employees and directors: (Cont.)
|
B.
|
Issuance of shares, warrants and options: (Cont.)
|
2.
|
Share-based compensation to employees and to directors: (Cont.)
|
a)
|
Options to employees and directors: (Cont.)
|
|
·
|
An option for the purchase of 166,666 shares of Common Stock at an exercise price equal to $0.00005 per share to Mr. Israeli; and
|
|
·
|
An option for the purchase of 33,334 shares of Common Stock at an exercise price equal to $0.00005 per share to Hadasit,
|
|
·
|
* Such options will vest and become exercisable in twelve (12) consecutive equal monthly amounts.
|
B.
|
Issuance of shares, warrants and options: (Cont.)
|
2.
|
Share-based compensation to employees and to directors: (Cont.)
|
a)
|
Options to employees and directors: (Cont.)
|
b)
|
Restricted shares to directors:
|
For the period ended
March 31, 2011
|
||||||||||||
Amount
of
options
|
Weighted
average
exercise
price
|
Aggregate
intrinsic
value
|
||||||||||
$
|
$
|
|||||||||||
Outstanding at beginning of period
|
6,893,024 | 0.183 | - | |||||||||
Granted
|
- | - | - | |||||||||
Exercised
|
(222,997 | ) | 0.15 | - | ||||||||
Cancelled
|
(982,601 | ) | 0.15 | - | ||||||||
Outstanding at end of period
|
5,687,426 | 0.184 | 1,045,634 | |||||||||
Vested and expected-to-vest at end of period
|
6,893,024 | 0.184 | 1,264,634 |
B.
|
Issuance of shares, warrants and options: (Cont.)
|
2.
|
Share-based compensation to employees and to directors: (Cont.)
|
b)
|
Restricted shares to directors (Cont.):
|
B.
|
Issuance of shares, warrants and options: (Cont.)
|
3.
|
Shares and warrants to investors and service providers:
|
a)
|
Warrants to investors and service providers and investors:
|
Issuance date
|
Number of
warrants
issued
|
Exercised
|
Forfeited
|
Outstanding
|
Exercise
Price $
|
Warrants
exercisable
|
Exercisable through
|
|||||||||||||||||||||
November 2004
|
12,800,845 | 10,511,069 | 151,803 | 2,137,973 | 0.01 | 2,137,973 |
November 2012
|
|||||||||||||||||||||
December 2004
|
1,800,000 | 1,800,000 | - | 0.00005 | — | - | ||||||||||||||||||||||
February 2005
|
1,894,808 | 1,894,808 | - | 2.5 | - | - | ||||||||||||||||||||||
May 2005
|
47,500 | 47,500 | - | 1.62 | - | - | ||||||||||||||||||||||
June 2005
|
30,000 | 30,000 | 0.75 | 30,000 |
June 2015
|
|||||||||||||||||||||||
August 2005
|
70,000 | 70,000 | - | 0.15 | - | - | ||||||||||||||||||||||
September 2005
|
3,000 | 3,000 | - | 0.15 | - | - | ||||||||||||||||||||||
September 2005
|
36,000 | 36,000 | - | 0.75 | - | - | ||||||||||||||||||||||
September-December 2005
|
500,000 | 500,000 | - | 1 | - | - | ||||||||||||||||||||||
December 2005
|
20,000 | 20,000 | - | 0.15 | - | - | ||||||||||||||||||||||
December 2005
|
457,163 | 457,163 | 0.15 | 457,163 |
December 2015
|
|||||||||||||||||||||||
February 2006
|
230,000 | 230,000 | 0.65 | 230,000 |
February 2016
|
|||||||||||||||||||||||
February 2006
|
40,000 | 40,000 | - | 1.5 | - | |||||||||||||||||||||||
February 2006
|
8,000 | 8,000 | - | 0.15 | - | |||||||||||||||||||||||
February 2006
|
189,000 | 97,696 | 91,304 | - | 0. 5 | - | - | |||||||||||||||||||||
May 2006
|
50,000 | 50,000 | 0.0005 | 50,000 |
May 2016
|
|||||||||||||||||||||||
May -December 2006
|
48,000 | 48,000 | 0.35 | 48,000 |
May - December 2011
|
|||||||||||||||||||||||
May -December 2006
|
48,000 | 48,000 | 0.75 | 48,000 |
May - December 2011
|
|||||||||||||||||||||||
May 2006
|
200,000 | 200,000 | 1 | 200,000 |
May 2011
|
|||||||||||||||||||||||
June 2006
|
24,000 | 24,000 | 0.15 | 24,000 |
June 2011
|
|||||||||||||||||||||||
May 2006
|
19,355 | 19,355 | 0.15 | 19,355 |
May 2011
|
|||||||||||||||||||||||
October 2006
|
630,000 | 630,000 | - | 0.3 | - | - | ||||||||||||||||||||||
December 2006
|
200,000 | 200,000 | - | 0.45 | - | - | ||||||||||||||||||||||
March 2007
|
200,000 | 200,000 | 0.47 | 200,000 |
March 2012
|
|||||||||||||||||||||||
March 2007
|
500,000 | 500,000 | 0.47 | 458,333 |
March 2017
|
|||||||||||||||||||||||
March 2007
|
50,000 | 50,000 | - | 0.15 | - | - | ||||||||||||||||||||||
March 2007
|
15,000 | 15,000 | 0.15 | 15,000 |
February 2012
|
|||||||||||||||||||||||
February 2007
|
50,000 | 50,000 | - | 0.45 | - | - | ||||||||||||||||||||||
March 2007
|
225,000 | 225,000 | - | 0.45 | - | - | ||||||||||||||||||||||
March 2007
|
50,000 | 50,000 | 0.45 | 50,000 |
March 2012
|
|||||||||||||||||||||||
April 2007
|
33,300 | 33,300 | - | 0.45 | - | - | ||||||||||||||||||||||
May 2007
|
250,000 | 250,000 | - | 0.45 | - | - | ||||||||||||||||||||||
July 2007
|
500,000 | 500,000 | 0.39 | 500,000 |
July 2017
|
|||||||||||||||||||||||
September 2007
|
500,000 | 500,000 | 0.15 | 500,000 |
August 2017
|
|||||||||||||||||||||||
August 2007
|
7,562,500 | 7,562,500 | 0.2 | 7,562,500 |
November 2013
|
|||||||||||||||||||||||
July 2007
|
30,000 | 30,000 | - | 0.45 | - | - | ||||||||||||||||||||||
July 2007
|
100,000 | 100,000 | - | 0.45 | - | - | ||||||||||||||||||||||
October 2007
|
200,000 | 200,000 | 0.15 | 200,000 |
August-October 2017
|
|||||||||||||||||||||||
November 2007
|
2,520,833 | 2,520,833 | 0.20 | 2,520,833 |
November 2013
|
|||||||||||||||||||||||
November 2007
|
2,016,667 | 2,016,667 | 0.29 | 2,016,667 |
November 2013
|
|||||||||||||||||||||||
April 2008
|
4,537,500 | 4,537,500 | 0.29 | 4,537,500 |
November 2013
|
|||||||||||||||||||||||
August 2008
|
3,529,166 | 3,529,166 | 0.29 | 3,529,166 |
November 2013
|
|||||||||||||||||||||||
August 2008
|
1,008,334 | 1,008,334 | 0.29 | 1,008,333 |
November 2013
|
|||||||||||||||||||||||
November 2008
|
100,000 | 100,000 | 0.15 | 100,000 |
September 2018
|
|||||||||||||||||||||||
April 2009
|
200,000 | 200,000 | 0.1 | 200,000 |
April 2019
|
|||||||||||||||||||||||
October 2009
|
200,000 | 200,000 | 0.067 | 66,667 |
October 2019
|
|||||||||||||||||||||||
October 2009
|
4,537,500 | 4,537,500 | 0.29 | 4,537,500 |
November 2013
|
|||||||||||||||||||||||
January 2010
|
1,250,000 | 1,250,000 | 0.5 | 1,250,000 |
January 2012
|
|||||||||||||||||||||||
February 2010
|
125,000 | 125,000 | 0.01 | 125,000 |
February 2012
|
|||||||||||||||||||||||
February 2010
|
3,000,000 | 3,000,000 | 0.5 | 3,000,000 |
February 2012
|
|||||||||||||||||||||||
January 2011
|
4,537,500 | 4,537,500 | 0.29 | 4,537,500 |
November 2013
|
|||||||||||||||||||||||
February 2011
|
641,026 | 641,026 | 0.39 | 641,026 |
February 2012
|
|||||||||||||||||||||||
February 2011
|
6,407,500 | 6,407,500 | 0.28 | 6,407,500 |
February 2012
|
|||||||||||||||||||||||
February 2011
|
12,815,000 | 12,815,000 | 0.5 | 12,815,000 |
February 2013
|
|||||||||||||||||||||||
77,037,497 | 13,061,765 | 3,777,715 | 60,198,017 | 60,023,016 |
B.
|
Issuance of shares, warrants and options: (Cont.)
|
3.
|
Shares and warrants to service providers: (Cont.)
|
a)
|
Warrants: (Cont.)
|
b)
|
Shares:
|
B.
|
Issuance of shares, warrants and options: (Cont.)
|
3.
|
Shares and warrants to service providers: (Cont.)
|
b)
|
Shares: (Cont.)
|
B.
|
Issuance of shares, warrants and options: (Cont.)
|
3.
|
Shares and warrants to service providers: (Cont.)
|
b)
|
Shares: (Cont.)
|
B.
|
Issuance of shares, warrants and options: (Cont.)
|
3.
|
Shares and warrants to service providers: (Cont.)
|
b)
|
Shares: (Cont.)
|
Three months
ended March 31
|
Period from
September 22, 2000
(inception date)
through
March 30,
|
|||||||||||
2011
|
2010
|
2010
|
||||||||||
Unaudited
|
Unaudited
|
|||||||||||
Research and development
|
$ | 9 | $ | 30 | $ | 17,248 | ||||||
General and administrative
|
(2 | ) | 155 | 9,036 | ||||||||
Financial expenses, net
|
- | - | 56 | |||||||||
Total stock-based compensation expense
|
$ | 7 | $ | 185 | $ | 26,340 |
|
·
|
Finalizing a GMP compliant production process;
|
|
·
|
Demonstrating safety in human ALS patients;
|
|
·
|
Setting up centralized facilities to provide the therapeutic products and services for transplantation in patients in the US and in Europe, as part of the clinical development program; and
|
|
·
|
Submitting an IND to the FDA.
|
|
·
|
Bone marrow aspiration from patient;
|
|
·
|
Isolation and expansion of the mesenchymal stem cells;
|
|
·
|
Differentiation of the expanded stem cells into neurotrophic-factor secreting cells; and
|
|
·
|
Autologous transplantation into the patient into the site of damage.
|
|
·
|
our ability to obtain funding from third parties, including any future collaborative partners;
|
·
|
the scope, rate of progress and cost of our clinical trials and other research and development programs;
|
|
·
|
the time and costs required to gain regulatory approvals;
|
|
·
|
the terms and timing of any collaborative, licensing and other arrangements that we may establish;
|
|
·
|
the costs of filing, prosecuting, defending and enforcing patents, patent applications, patent claims, trademarks and other intellectual property rights;
|
|
·
|
the effect of competition and market developments; and
|
|
·
|
future pre-clinical and clinical trial results.
|
·
|
The Company did not maintain effective controls over certain aspects of the financial reporting process because we lacked a sufficient complement of personnel with a level of accounting expertise and an adequate supervisory review structure that is commensurate with the Company’s financial reporting requirements.
|
BRAINSTORM CELL THERAPEUTICS INC.
|
||
|
||
May 13, 2011
|
By:
|
/s/ Adrian Harel
|
Name: Adrian Harel
Title: Acting Chief Executive Officer (Principal Executive Officer)
|
May 13, 2011
|
By:
|
/s/ Liat Sossover
|
Name: Liat Sossover
Title: Chief Financial Officer (Principal
Financial Officer)
|
Exhibit
Number
|
Description
|
|
31.1
|
Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2
|
Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32.1
|
Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
32.2
|
Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|