DELAWARE
|
20-8133057
|
(State
or other jurisdiction of
|
(I.R.S.
Employer
|
incorporation
or organization)
|
Identification
No.)
|
|
|
Page
Number
|
PART
I
|
|
|
|
|
|
Item
1. Financial Statements
|
|
4
|
Item
2. Plan of Operation
|
|
27
|
Item
3. Controls and Procedures
|
|
37
|
|
|
|
PART
II
|
|
|
|
|
|
Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds
|
|
37
|
Item 5. Other Information |
37
|
|
Item
6. Exhibits
|
|
37
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Page
|
||||
Consolidated
Balance Sheets
|
5
|
|||
|
|
|||
Consolidated
Statements of Operations
|
6
|
|||
|
|
|||
Statements
of Changes in Stockholders' Equity (Deficiency)
|
7
- 8
|
|||
|
|
|||
Consolidated
Statements of Cash Flows
|
9
|
|||
|
|
|||
Notes
to Consolidated Financial Statements
|
10 -
26
|
June
30,
|
December
31
|
||||||
2007
|
2006
|
||||||
Unaudited
|
|||||||
ASSETS
|
|||||||
CURRENT
ASSETS:
|
|||||||
Cash
and cash equivalents
|
$
|
4
|
$
|
60
|
|||
Restricted
cash
|
32
|
32
|
|||||
Accounts
receivable and prepaid expenses
|
87
|
42
|
|||||
Total
current assets
|
123
|
134
|
|||||
LONG-TERM
INVESTMENTS:
|
|||||||
Prepaid
expenses
|
8
|
8
|
|||||
Severance
pay fund
|
45
|
38
|
|||||
53
|
46
|
||||||
PROPERTY
AND EQUIPMENT, NET
|
482
|
491
|
|||||
OTHER
ASSETS, NET
|
20
|
52
|
|||||
Total
assets
|
$
|
678
|
$
|
723
|
|||
LIABILITIES
AND STOCKHOLDERS' DEFICIENCY
|
|||||||
CURRENT
LIABILITIES:
|
|||||||
Trade
payables
|
$
|
681
|
$
|
721
|
|||
Other
accounts payable and accrued expenses
|
1,111
|
651
|
|||||
Short-term
convertible loans
|
1,650
|
937
|
|||||
Short-term
loan
|
206
|
189
|
|||||
Total
current liabilities
|
3,648
|
2,498
|
|||||
|
|||||||
ACCRUED
SEVERANCE PAY
|
54
|
41
|
|||||
Total
liabilities
|
$
|
3,702
|
$
|
2,539
|
|||
STOCKHOLDERS'
DEFICIENCY:
|
|||||||
Stock
capital: (Note 7)
|
|||||||
Common
stock of $ 0.00005 par value - Authorized: 800,000,000 shares at
June 30, 2007 and December 31, 2006; Issued and outstanding:
25,302,066 and 24,201,812 shares at June 30, 2007 and December 31,
2006, respectively
|
1
|
1
|
|||||
Additional
paid-in capital
|
26,095
|
24,427
|
|||||
Deficit
accumulated during the development stage
|
(29,120
|
)
|
(26,244
|
)
|
|||
Total
stockholders' deficiency
|
(3,024
|
)
|
(1,816
|
)
|
|||
Total
liabilities and stockholders' deficiency
|
$
|
678
|
$
|
723
|
Six
months ended
June
30,
|
Period
from September 22, 2000 (inception date) through June
30,
|
|||||||||
2007
|
2006
|
2007
|
||||||||
Unaudited
|
Unaudited
|
|||||||||
Operating
costs and expenses:
|
||||||||||
Research
and development
|
$
|
618
|
$
|
443
|
$
|
2,934
|
||||
Research
and development expenses (income) related to stocks, warrants and
options
granted to employees and service providers
|
378
|
(537
|
)
|
16,001
|
||||||
General
and administrative
|
339
|
352
|
2,230
|
|||||||
General
and administrative expenses related to stocks, warrants and options
granted to employees and service providers
|
866
|
1,217
|
6,045
|
|||||||
Total
operating costs and expenses
|
2,201
|
1,475
|
27,210
|
|||||||
Financial
expenses, net
|
664
|
64
|
1,681
|
|||||||
2,865
|
1,539
|
28,891
|
||||||||
Taxes
on income
|
11
|
16
|
65
|
|||||||
Loss
from continuing operations
|
2,876
|
1,555
|
28,956
|
|||||||
Net
loss from discontinued operations
|
-
|
-
|
164
|
|||||||
Net
loss
|
$
|
2,876
|
$
|
1,555
|
$
|
29,120
|
||||
Basic
and diluted net loss per share from continuing operations
|
$
|
0.12
|
$
|
0.07
|
||||||
Weighted
average number of shares outstanding used in computing basic and
diluted
net loss per share
|
24,596,881
|
22,909,615
|
Common
stock
|
|||||||||||||||||||
Number
|
Amount
|
Additonal
paid-in
capital
|
Deferred
stock-based compensation
|
Deficit
accumulated during the development stage
|
Total
stockholders' equity(deficiency)
|
||||||||||||||
Balance
as of September 22, 2000 (date of inception)
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
Stock
issued on September 22, 2000 for cash at $ 0.00188 per
stock
|
8,500,000
|
1
|
15
|
-
|
-
|
16
|
|||||||||||||
Stock
issued on March 31, 2001 for cash at $ 0.0375 per
stock
|
1,600,000
|
-
|
60
|
-
|
-
|
60
|
|||||||||||||
Contribution
of capital
|
-
|
-
|
8
|
-
|
-
|
8
|
|||||||||||||
Net
loss
|
-
|
-
|
-
|
-
|
(17
|
)
|
(17
|
)
|
|||||||||||
Balance
as of March 31, 2001
|
10,100,000
|
1
|
83
|
-
|
(17
|
)
|
67
|
||||||||||||
Contribution
of capital
|
-
|
-
|
11
|
-
|
-
|
11
|
|||||||||||||
Net
loss
|
-
|
-
|
-
|
-
|
(26
|
)
|
(26
|
)
|
|||||||||||
|
|||||||||||||||||||
Balance
as of March 31, 2002
|
10,100,000
|
1
|
94
|
-
|
(43
|
)
|
52
|
||||||||||||
|
|||||||||||||||||||
Contribution
of capital
|
-
|
-
|
15
|
-
|
-
|
15
|
|||||||||||||
Net
loss
|
-
|
-
|
-
|
-
|
(47
|
)
|
(47
|
)
|
|||||||||||
Balance
as of March 31, 2003
|
10,100,000
|
1
|
109
|
-
|
(90
|
)
|
20
|
||||||||||||
2-for-1
stock split
|
10,100,000
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||
Stock
issued on August 31, 2003 to purchase mineral option at $ 0.065 per
stock
|
100,000
|
6
|
-
|
-
|
6
|
||||||||||||||
Cancellation
of stocks granted to Company's President
|
(10,062,000
|
)
|
(1
|
)
|
1
|
-
|
-
|
-
|
|||||||||||
Contribution
of capital
|
-
|
-
|
15
|
-
|
-
|
15
|
|||||||||||||
Net
loss
|
-
|
-
|
-
|
-
|
(73
|
)
|
(73
|
)
|
|||||||||||
Balance
as of March 31, 2004
|
10,238,000
|
-
|
131
|
-
|
(163
|
)
|
(32
|
)
|
|||||||||||
Stock
issued on June 24, 2004 for private placement at $ 0.01 per stock,
net of $ 25,000 issuance expenses (Note 7c(1)(a))
|
8,510,000
|
1
|
60
|
-
|
-
|
61
|
|||||||||||||
Contribution
of capital (Note 7b)
|
-
|
-
|
7
|
-
|
-
|
7
|
|||||||||||||
Stock
issued in 2004 for private placement at $ 0.75 per unit
(Note 7c(1)(a))
|
1,894,808
|
1,418
|
-
|
-
|
1,418
|
||||||||||||||
Cancellation
of stocks 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 stocks and options
granted
to employees (Note 7c(2))
|
-
|
-
|
-
|
584
|
-
|
584
|
|||||||||||||
Compensation
related to stocks and options granted to service providers (Note
7c(3)(c))
|
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
|
Common
stock
|
|||||||||||||||||||
Number
|
Amount
|
Additional
paid-in capital
|
Deferred
stock-based compensation
|
Deficit
accumulated during the development stage
|
Total
stockholders' equity (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 stock (Note
7c(1)(d))
|
186,875
|
149
|
-
|
-
|
149
|
||||||||||||||
Stock
issued on July 27, 2005 for private placement at $ 0.6 per stock
(Note 7c(1)(e))
|
165,000
|
99
|
-
|
-
|
99
|
||||||||||||||
Stock
issued on September 30, 2005 for private placement at $0.8 per share(Note
7c(1)(f))
|
312,500
|
225
|
-
|
-
|
225
|
||||||||||||||
Stock
issued on December 07, 2005 for private placement at $0.8 per share
(Note
7c(1)(f))
|
187,500
|
135
|
-
|
-
|
135
|
||||||||||||||
Forfeiture
of options granted to employees
|
-
|
-
|
(3,363
|
)
|
3,363
|
-
|
-
|
||||||||||||
Deferred
stock-based compensation related to stocks and options granted to
directors and employees
|
200,000
|
486
|
(486
|
)
|
-
|
-
|
|||||||||||||
Amortization
of deferred stock-based compensation related to options and stocks
granted
to employees and directors (Note 7c(2))
|
-
|
-
|
51
|
1,123
|
-
|
1,174
|
|||||||||||||
Stock-based
compensation related to options and stocks granted to service providers
(Note 7c(3)(c))
|
934,904
|
662
|
-
|
-
|
662
|
||||||||||||||
Reclassification
due to application of 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 FAS
123(R)
|
-
|
-
|
(1,395
|
)
|
1,395
|
-
|
-
|
||||||||||||
Stock-based
compensation related to stocks and options granted to directors and
employees
|
200,000
|
1,168
|
-
|
-
|
1,168
|
||||||||||||||
Reclassification
due to application of EITF 00-19
|
-
|
-
|
7,191
|
-
|
-
|
7,191
|
|||||||||||||
Stock-based
compensation related to options and stocks granted to service providers
(Note 7c)
|
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
|
)
|
|||||||||||
Stock-based
compensation related to options and stocks granted to service providers
(Note 7b)
|
464,095
|
-
|
714
|
-
|
-
|
714
|
|||||||||||||
Warrants
issued to convertible note holder (Note 6)
|
-
|
-
|
84
|
-
|
-
|
84
|
|||||||||||||
Stock-based
compensation related to stocks and options granted to directors and
employees
|
200,000
|
-
|
530
|
-
|
-
|
530
|
|||||||||||||
Beneficial
conversion feature related to convertible bridge loans (Note
6)
|
-
|
252
|
252
|
||||||||||||||||
Conversion
of convertible loans
|
436,159
|
-
|
88
|
-
|
-
|
88
|
|||||||||||||
Net
loss
|
-
|
-
|
-
|
-
|
(2,876
|
)
|
(2,876
|
)
|
|||||||||||
Balance
as of June 30, 2007 (unaudited)
|
25,302,066
|
1
|
$
|
26,095
|
$
|
-
|
$
|
(29,120
|
)
|
$
|
(3,024
|
)
|
Six
months ended
June
30,
|
Period
from September 22, 2000 (inception date) through June
30,
|
|||||||||
2007
|
2006
|
2007
|
||||||||
Unaudited
|
Unaudited
|
|||||||||
Cash
flows from operating activities:
|
||||||||||
Net
loss
|
$
|
(2,876
|
)
|
$
|
(1,555
|
)
|
$
|
(29,120
|
)
|
|
Less
- loss for the period from discontinued operations
|
-
|
-
|
164
|
|||||||
Adjustments
to reconcile net loss to net cash provided by (used in) operating
activities:
|
||||||||||
Depreciation
|
93
|
35
|
298
|
|||||||
Erosion
of restricted cash
|
-
|
(2
|
)
|
-
|
||||||
Accrued
severance pay, net
|
6
|
4
|
9
|
|||||||
Accrued
interest on loans
|
104
|
75
|
184
|
|||||||
Amortization
of discount on short-term loans
|
502
|
103
|
1,353
|
|||||||
Change
in fair value of options and warrants
|
-
|
(795
|
)
|
(795
|
)
|
|||||
Expenses
related to stocks and options granted to service providers
|
714
|
657
|
19,401
|
|||||||
Amortization
of deferred stock-based compensation related to options granted to
employees and directors
|
530
|
738
|
3,455
|
|||||||
Increase
in accounts receivable and prepaid expenses
|
(45
|
)
|
(41
|
)
|
(86
|
)
|
||||
Increase
(decrease) in trade payables
|
(40
|
)
|
140
|
680
|
||||||
Increase
(decrease) in other accounts payable and accrued expenses
|
460
|
(151
|
)
|
1,106
|
||||||
Net
cash used in continuing operating activities
|
(552
|
)
|
(792
|
)
|
(3,351
|
)
|
||||
Net
cash used in discontinued operating activities
|
-
|
-
|
(23
|
)
|
||||||
Total
net cash used in operating activities (Note 1g)
|
(552
|
)
|
(792
|
)
|
(3,374
|
)
|
||||
Cash
flows from investing activities:
|
||||||||||
Purchase
of property and equipment
|
(39
|
)
|
(104
|
)
|
(618
|
)
|
||||
Restricted
cash
|
-
|
-
|
(32
|
)
|
||||||
Investment
in lease deposit
|
-
|
1
|
(8
|
)
|
||||||
Net
cash used in continuing investing activities
|
(39
|
)
|
(103
|
)
|
(658
|
)
|
||||
Net
cash used in discontinued investing activities
|
-
|
-
|
(16
|
)
|
||||||
Total
net cash used in investing activities
|
(39
|
)
|
(103
|
)
|
(674
|
)
|
||||
Cash
flows from financing activities:
|
||||||||||
Proceeds
from issuance of Common stock and warrants, net
|
-
|
-
|
2,087
|
|||||||
Proceeds
from loans, notes and issuance of warrants, net
|
535
|
1,098
|
1,922
|
|||||||
Net
cash provided by continuing financing activities
|
535
|
1,098
|
4,009
|
|||||||
Net
cash provided by discontinued financing activities
|
-
|
-
|
43
|
|||||||
Total
net cash provided by financing activities
|
535
|
1,098
|
4,052
|
|||||||
Increase
(decrease) in cash and cash equivalents
|
(56
|
)
|
203
|
4
|
||||||
Cash
and cash equivalents at the beginning of the period
|
60
|
289
|
-
|
|||||||
Cash
and cash equivalents at end of the period
|
$
|
4
|
$
|
492
|
$
|
4
|
NOTE
1:-
|
GENERAL
|
a.
|
Brainstorm
Cell Therapeutics Inc. (formerly: Golden Hand Resources Inc.) ("the
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 the Company's 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
certain stem cell technology (see Note 3 to the financial statements
as of
December 31, 2006). 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.
|
e.
|
On
October 25, 2004, the Company formed a wholly-owned subsidiary in
Israel,
Brainstorm Cell Therapeutics Ltd. ("BCT").
|
f.
|
On
December 21 2006, the Company changed its state of incorporation
from
Washington to Delaware.
|
g.
|
As
of June 30, 2007, the Company had accumulated deficit of $ 29,120,
working
capital deficiency of $ 3,525, incurred net loss of $ 2,876 and negative
cash flows from operating activities in the amount of $ 552 for the
six months ended June 30, 2007. In addition, the Company has not yet
generated any revenues.
|
NOTE
1:-
|
GENERAL
(Cont.)
|
h.
|
On
September 17, 2006, the Board of Directors of the Company determined
to
change the Company's fiscal year-end from March 31 to December 31.
|
NOTE
2:-
|
SIGNIFICANT
ACCOUNTING POLICIES
|
NOTE
3:-
|
UNAUDITED
INTERIM CONSOLIDATED FINANCIAL
STATEMENTS
|
NOTE
4:-
|
RESEARCH
AND LICENSE AGREEMENT
|
NOTE
5:-
|
CONSULTING
AGREEMENTS
|
NOTE
6:-
|
SHORT-TERM
CONVERTIBLE LOANS
|
a.
|
On
April 10, 2007, the Company issued a $ 25 Convertible Promissory
Note to a
third party. Interest on the note will accrue at the rate of 8% per
annum
and will be due and payable in full on April 10, 2008. The note will
become immediately due and payable upon the occurrence of certain
Events
of Default, as defined in the note. The third party has the right
at any
time prior to the close of business on the Maturity Date to convert
all or
part of the outstanding principal and interest amount of the note
into
shares of the Company's Common stock (the "Common stock"). The Conversion
Price, as defined in the note, will be 75% (60% upon the occurrence
of an
Event of Default) of the average of the last bid and ask price of
the
Common stock as quoted on the Over-the-Counter Bulletin Board for
the five
trading days prior to the Company's receipt of the third party written
notice of election to convert, but in no event the conversion price
be
greater than $ 0.35 or more than 1,000,000 shares of Common stock
be
issued. The Conversion Price will be adjusted in the event of a stock
dividend, subdivision, combination or stock split of the outstanding
shares.
|
Note
|
$
|
21
|
||
Discount
|
(6
|
)
|
||
Accrued
interest
|
*)
-
|
|||
$
|
15
|
NOTE
6:-
|
SHORT-TERM
CONVERTIBLE LOANS (Cont.)
|
b.
|
On
May 6, 2007, the Company issued a $ 250 Convertible Promissory
Note to a
third party. Interest on the note will accrue at the rate of 8%
per Annum
and will be due and payable in full on May 6, 2008. The note will
become
immediately due and payable upon the occurrence of certain Events
of
Default, as defined in the note. The third party has the right
at any time
prior to the close of business on the Maturity Date to convert
all or part
of the outstanding principal and interest amount of the note into
shares
of the Company's Common stock (the "Common stock"). The Conversion
Price,
as defined in the note, will be 75% (60% upon the occurrence of
an Event
of Default) of the average of the last bid and ask price of the
Common
stock as quoted on the Over-the-Counter Bulletin Board for the
five
trading days prior to the Company's receipt of the third party
written
notice of election to convert but in no event the conversion price
be
greater than $ 0.35 or more than 5,000,000 shares of Common stock
be
issued. The Conversion Price will be adjusted in the event of a
stock
dividend, subdivision, combination or stock split of the outstanding
shares.
|
Note
|
$
|
204
|
||
Discount
|
(71
|
)
|
||
Accrued
interest
|
3
|
|||
$
|
136
|
NOTE
7:-
|
STOCK
CAPITAL
|
a.
|
The
rights of Common stock are as
follows:
|
b.
|
The
former president of the Company donated services valued at $ 6 and
rent
valued at $ 2 for the six months ended September 30, 2004. These
amounts were charged to the statement of operations as part of
discontinued operations and classified as additional paid in capital
in
the stockholders' equity.
|
c.
|
Issuance
of stocks, 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
round for
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 four tranches which closed in October 2004, November
2004
and February 2005.
|
c)
|
On
March 21, 2005, the Company entered into lock up agreements with
29 of its
stockholders with respect to 15,290,000 shares held by them .Under
these
lock-up agreements, these stockholders
may not transfer their shares to anyone other than permitted transferees
without the prior consent of the Company' Board of Directors, for
the
period of time as follows: (i) 85% of the shares shall be restricted
from
transfer for the twenty-four month period following July 8, 2004, and
(ii) 15% of the shares shall be restricted from transfer for the
twelve
month period following July 8,
2004.
|
NOTE
7:-
|
STOCK
CAPITAL (Cont.)
|
d)
|
On
May 12, 2005, the Company issued to a certain investor 186,875 shares
of
its Common stock for total proceeds of $ 149 at a price per stock
of $
0.8.
|
e)
|
On
July 27, 2005, the Company issued to certain investors 165,000 shares
of
its Common stock for total proceeds of $ 99 at a price per stock
of $
0.6.
|
f)
|
On
August 11, 2005, the Company signed a private placement agreement
("PPM")
with investors for the sale of up to 1,250,000 units at a price per
unit
of $ 0.8. 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 September 30, 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.
|
2.
|
Share-based
compensation to employees and to
directors
|
a)
|
Options
to employees and directors:
|
NOTE
7:-
|
STOCK
CAPITAL (Cont.)
|
NOTE
7:-
|
STOCK
CAPITAL (Cont.)
|
Six
months ended
June
30, 2007
|
|||||||
Amount
of options
|
Weighted
average exercise price
|
||||||
$
|
|||||||
Outstanding
at beginning of the period
|
2,850,760
|
$
|
0.188
|
||||
Granted
|
890,000
|
0.434
|
|||||
forfeited
|
-
|
-
|
|||||
Outstanding
at end of period
|
3,740,760
|
$
|
0.247
|
||||
Vested
and expected-to-vest options at end of period
|
2,534,381
|
$
|
0.178
|
b)
|
Restricted
shares to directors:
|
3.
|
Stocks
and warrants to service providers and
investors:
|
NOTE
7:-
|
STOCK
CAPITAL (Cont.)
|
a)
|
Warrants:
|
Issuance
date
|
Number
of warrants
|
Exercise
price
|
Warrants
exercisable
|
Exercisable
through
|
|||||||||
November
2004
|
12,800,845
|
$
|
0.01
|
12,800,845
|
November
2010
|
||||||||
December
2004
|
1,800,000
|
$
|
0.00005
|
1,800,000
|
December
2014
|
||||||||
|
|||||||||||||
14,600,845
|
14,600,845
|
|
|||||||||||
|
|||||||||||||
February
2005, see c(1)
|
1,894,808
|
$
|
2.5
|
1,894,808
|
February
2008
|
||||||||
May
2005
|
47,500
|
$
|
1.62
|
47,500
|
May
2010
|
||||||||
June
2005
|
30,000
|
$
|
0.75
|
30,000
|
June
2010
|
||||||||
August
2005
|
70,000
|
$
|
0.15
|
70,000
|
August
2008
|
||||||||
September
2005
|
3,000
|
$
|
0.15
|
3,000
|
September
2008
|
||||||||
September
2005
|
36,000
|
$
|
0.75
|
21,929
|
September
2010
|
||||||||
September
- December 2005
|
500,000
|
$
|
1
|
500,000
|
September
- December 2008
|
||||||||
December
2005
|
20,000
|
$
|
0.15
|
20,000
|
December
2008
|
||||||||
December
2005
|
457,163
|
$
|
0.15
|
235,053
|
July
2010
|
||||||||
|
|||||||||||||
17,659,316
|
17,423,135
|
|
|||||||||||
|
|||||||||||||
February
2006
|
230,000
|
$
|
0.65
|
76,666
|
February
2008
|
||||||||
February
2006
|
40,000
|
$
|
1.5
|
40,000
|
February
2011
|
||||||||
February
2006
|
8,000
|
$
|
0.15
|
8,000
|
February
2011
|
||||||||
February
2006
|
189,000
|
$
|
0.
5
|
189,000
|
February
2009
|
||||||||
May
2006
|
50,000
|
$
|
0.0005
|
50,000
|
May
2016
|
||||||||
May
-December 2006
|
48,000
|
$
|
0.35
|
48,000
|
May
- December 2011
|
||||||||
May
-December 2006
|
48,000
|
$
|
0.75
|
48,000
|
May
- December 2011
|
||||||||
May
2006
|
200,000
|
$
|
1
|
200,000
|
May
2011
|
||||||||
June
2006
|
24,000
|
$
|
0.15
|
24,000
|
June
2011
|
||||||||
May
2006
|
19,355
|
$
|
0.15
|
19,355
|
May
2011
|
||||||||
October
2006
|
630,000
|
$
|
0.3
|
630,000
|
October
2009
|
||||||||
December
2006
|
200,000
|
$
|
0.45
|
200,000
|
December
2008
|
||||||||
|
|||||||||||||
19,345,671
|
18,956,156
|
|
|||||||||||
|
|||||||||||||
March
2007
|
200,000
|
$
|
0.47
|
200,000
|
March
2012
|
||||||||
March
2007
|
500,000
|
$
|
0.47
|
46,119
|
March
2017
|
||||||||
March
2007
|
50,000
|
$
|
0.15
|
50,000
|
March
2010
|
||||||||
March
2007
|
15,000
|
$
|
0.15
|
0
|
February
2012
|
||||||||
February
2007
|
50,000
|
$
|
0.45
|
50,000
|
February
2009
|
||||||||
March
2007
|
225,000
|
$
|
0.45
|
225,000
|
March
2009
|
||||||||
March
2007
|
50,000
|
$
|
0.45
|
50,000
|
March
2010
|
||||||||
April
2007
|
33,300
|
$
|
0.45
|
33,300
|
April
2009
|
||||||||
May
2007
|
250,000
|
$
|
0.45
|
250,000
|
May
2010
|
||||||||
20,718,971
|
19,860,575
|
NOTE
7:-
|
STOCK
CAPITAL (Cont.)
|
b)
|
Stocks:
|
NOTE
7:-
|
STOCK
CAPITAL (Cont.)
|
NOTE
7:-
|
STOCK
CAPITAL (Cont.)
|
NOTE
7:-
|
STOCK
CAPITAL (Cont.)
|
Six
months ended
June
30, 2007
|
|||||||
Amount
of shares
|
Weighted
average issue price
|
||||||
$
|
|||||||
Outstanding
at beginning of the period
|
2,307,129
|
0.97
|
|||||
Issued
|
464,095
|
0.33
|
|||||
Outstanding
at end of period
|
2,771,224
|
0.86
|
c.
|
Stock-based
compensation recorded by the Company in respect of stocks and warrants
granted to service providers amounted to $ 734 for the six months
ended June 30, 2007.
|
NOTE
8:-
|
SUBSEQUENT
EVENTS
|
a.
|
On
July 3, 2007, the Company issued a $ 30 Convertible Promissory
Note to a
shareholder. Interest on the Note will accrue at the rate of 8%
per annum
and will be due and payable in full on July 3, 2008. The Note will
become
immediately due and payable upon the occurrence of certain Events
of
Default, as defined in the Note. The third party has the right
at any time
prior to the close of business on the Maturity Date to convert
all or part
of the outstanding principal and interest amount of the Note into
shares
of the Company's Common stock (the "Common stock"). The Conversion
Price,
as defined in the Note, will be 75% (60% upon an event of default)
of the
average of the last bid and ask price of the Common stock as quoted
on the
Over-the-Counter Bulletin Board for the five trading days prior
to the
Company's receipt of the third party written notice of election
to convert
but in no event the conversion price be greater than $ 0.35 or
more than
1,000,000 shares of Common stock be issued. The Conversion Price
will be
adjusted in the event of a stock dividend, subdivision, combination
or
stock split of the outstanding
shares.
|
NOTE
8:-
|
SUBSEQUENT
EVENTS (Cont.)
|
b.
|
On
July 3, 2007, the Company issued a $ 100 Convertible Promissory
Note to a
third party. Interest on the Note will accrue at the rate of 8%
per annum
and will be due and payable in full on July 3, 2008. The Note will
become
immediately due and payable upon the occurrence of certain Events
of
Default, as defined in the Note. The third party has the right
at any time
prior to the close of business on the Maturity Date to convert
all or part
of the outstanding principal and interest amount of the Note into
shares
of the Company's Common stock (the "Common stock"). The Conversion
Price,
as defined in the Note, will be 75% of the average of the last
bid and ask
price of the Common stock as quoted on the Over-the-Counter Bulletin
Board
for the five trading days prior to the Company's receipt of the
third
party written notice of election to convert but in no event the
conversion
price be greater than $ 0.35 or more than 2,000,000 shares of Common
stock be issued. The Conversion Price will be adjusted in the event
of a
stock dividend, subdivision, combination or stock split of the
outstanding
shares.
|
c.
|
On
July 1, 2007, the Company’s board of directors reached the following
resolutions:
|
1.
|
Issuance
of 380,000 shares of Common stock of the Company to certain service
providers.
|
2.
|
Issuance
of 1,250,000 shares to service provider as a finder fee for introduction
to investor (see Note 8d).
|
3.
|
Granting
of options to purchase 750,000 shares of Common stock of the Company,
to
its consultants and employees at an exercise price of $ 0.39. The
options
shall be vested in equal portions in 36 months from the day of grant
and
be exercisable for a period of 10
years.
|
4.
|
Grant
of options to purchase 100,000 shares of Common stock of the Company
to
one of its directors at an exercise price of $ 0.15. The options
shall be
fully vested from the grant date and be exercisable for a period
of 10
years.
|
5.
|
Issuance
of 200,000 restricted shares to two of the Company’s
directors.
|
6.
|
Confirming
the investment agreement with new investor for up to 5 millions dollar
(see Note 8d).
|
7.
|
Appointment
of Chaim Lebovits as the president of the
Company.
|
NOTE
8:-
|
SUBSEQUENT
EVENTS (Cont.)
|
d.
|
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 the Company’s
Common stock, for an aggregate subscription price of up to $5.0 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
shall
take place as follows:
|
Purchase
date
|
Purchase
price
|
Number
of
subscription
shares
|
Number
of warrant shares
|
|||
|
||||||
August
30, 2007
|
$1,250,000
(includes $250,000 that paid as a convertible loan (Note
6b))
|
6,875,000
|
7,562,500
|
|||
November
15, 2007
|
$750,000
|
4,125,000
|
4,537,500
|
|||
February
15, 2008
|
$750,000
|
4,125,000
|
4,537,500
|
|||
May
15, 2008
|
$750,000
|
4,125,000
|
4,537,500
|
|||
July
30, 2008
|
$750,000
|
4,125,000
|
4,537,500
|
|||
November
15, 2008
|
$750,000
|
4,125,000
|
4,537,500
|
NOTE
8:-
|
SUBSEQUENT
EVENTS (Cont.)
|
e.
|
On
July 26, 2007 the Company entered into a Second Amended and Restated
Research and License Agreement with Ramot. On August 1, 2007, the
Company
obtained a waiver and release from Ramot pursuant to which Ramot
agreed to
an amended payment schedule regarding the Company payment obligations
under the amended license agreement, dated March 30, 2006, and waived
all
claims against the company resulting from the Company's previous
defaults
and non-payment under the original and first amended license agreement.
The payments described in the waiver and release cover all of payment
obligations that were past due and not yet due pursuant to the original
license agreement. The waiver and release amends and restates the
original
payment schedule under the license agreement as
follows:
|
Payment
date
|
Amount
|
|||
September
5, 2007
|
100,000
|
|||
November
20, 2007
|
150,000
|
|||
February
20, 2008
|
150,000
|
|||
May
20, 2008
|
150,000
|
|||
August
4, 2008
|
90,000
|
Payment
date
|
Amount
|
|||
|
||||
August
4, 2008
|
60,000
|
|||
November
20, 2008
|
150,000
|
|||
February
20, 2009
|
170,000
|
Payment
Date
|
Amount
|
|||
September
5, 2007
|
$
|
100,000
|
||
November
20, 2007
|
$
|
150,000
|
||
February
20, 2008
|
$
|
150,000
|
||
May
20, 2008
|
$
|
150,000
|
||
August
4, 2008
|
$
|
90,000
|
Payment
Date
|
Amount
|
|||
August
4, 2008
|
$
|
60,000
|
||
November
20, 2008
|
$
|
150,000
|
||
February
20, 2009
|
$
|
170,000
|
·
|
To
define and optimize our NurOwnTM technology in human bone marrow
cells, in
order to prepare the final production process for clinical studies
in
accordance with health authorities’ guidelines. To reach this goal we
intend to optimize methods for the stem cell growth and differentiation
in
specialized growth media, as well as methods for freezing, thawing,
storing and transporting of the expanded mesenchymal stem cells,
as well
as the differentiated neuronal
cells;
|
·
|
To
verify the robustness and the reproducibility of the
process;
|
·
|
To
further repeat the process using bone marrow from Parkinson’s
patients;
|
·
|
To
conduct large efficacy studies in animal models of PD (such as mice
and
rats) in order to further evaluate the engraftment, survival and
efficacy
of our astrocyte-like cell in these
models;
|
·
|
To
finish conducting safety and efficacy studies in primates-monkeys;
|
·
|
To
conduct a full tumorgenicity study in animals;
|
·
|
To
generate process SOPs, protocols and reports for the file
submission;
|
·
|
To
finalize analytical methodology and product specifications to be
used as
release criteria of the final cell product for clinical trials in
humans;
|
·
|
To
set up a quality control system for the processing of our cells;
and
|
·
|
To
write up clinical protocols for phase I & II clinical studies, and
start the clinical trials.
|
·
|
Improving
the bone marrow stem cells expansion prior to
differentiation;
|
·
|
Evaluation
of methodologies for cryo-preservation of the expanded bone marrow
cells
prior to differentiation;
|
·
|
Characterization
of the propagated mesenchymal stem according to established
CD-markers;
|
·
|
Determination
of timing and growth conditions for the differentiation process;
|
·
|
Development
of molecular tools and cell surface markers to evaluate cell
differentiation;
|
·
|
Demonstrating
that the bone marrow derived differentiated cells do produce and
secrete
several neuron-specific markers;
|
·
|
Transplantation
of the bone marrow derived neural-like cells in the striatum of model
animals resulting in long-term engraftment;
and
|
·
|
Parkinson’s
model animals transplanted with the bone marrow derived neural-like
cells
show significant improvement in their rotational
behavior.
|
· |
Complete
preclinical studies in rodents to confirm safety and
efficacy;
|
· |
Complete
preclinical studies to confirm safety in
monkeys;
|
· |
Conduct
full safety study of the final cell product for PD;
|
· |
Write
up clinical protocols for Phase I & II clinical studies;
and
|
· |
Raise
additional equity or debt financing or a combination of equity
and debt
financing in addition to the $5,000,000 from ACCBT Corp. that we
expect
to receive under the recent subscription
agreement.
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