Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2022 | May 10, 2022 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2022 | |
Entity File Number | 001-36641 | |
Entity Registrant Name | BRAINSTORM CELL THERAPEUTICS INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-7273918 | |
Entity Address, Address Line One | 1325 Avenue of Americas, 28th Floor | |
Entity Address, City or Town | NY | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10019 | |
City Area Code | 201 | |
Local Phone Number | 488-0460 | |
Title of 12(b) Security | Common Stock, $0.00005 par value | |
Trading Symbol | BCLI | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 36,486,180 | |
Entity Central Index Key | 0001137883 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
INTERIM CONDENSED CONSOLIDATED
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current Assets: | ||
Cash and cash equivalents | $ 15,151 | $ 18,856 |
Short-term deposit (Note 4) | 3,246 | 3,238 |
Other accounts receivable | 61 | 86 |
Prepaid expenses and other current assets (Note 5) | 802 | 1,100 |
Total current assets | 19,260 | 23,280 |
Long-Term Assets: | ||
Prepaid expenses and other long-term assets | 27 | 27 |
Operating lease right of use asset (Note 6) | 5,380 | 4,781 |
Property and Equipment, Net | 1,124 | 1,189 |
Total Long-Term Assets | 6,531 | 5,997 |
Total assets | 25,791 | 29,277 |
Current Liabilities: | ||
Accounts payables | 4,570 | 3,700 |
Accrued expenses | 71 | 83 |
Operating lease liability (Note 6) | 1,629 | 1,461 |
Other accounts payables | 1,102 | 1,073 |
Total current liabilities | 7,372 | 6,317 |
Long-Term Liabilities: | ||
Operating lease liability (Note 6) | 3,932 | 3,618 |
Total long-term liabilities | 3,932 | 3,618 |
Total liabilities | 11,304 | 9,935 |
Stockholders' Equity: | ||
Stock capital: (Note 7) Common Stock of $0.00005 par value - Authorized: 100,000,000 shares March 31, 2022 and December 31, 2021 respectively; Issued and outstanding: 36,486,180 and 36,401,413 shares at March 31, 2022 and December 31, 2021 respectively. | 12 | 12 |
Additional paid-in-capital | 193,495 | 192,990 |
Treasury stocks | (116) | (116) |
Accumulated deficit | (178,904) | (173,544) |
Total stockholders' equity | 14,487 | 19,342 |
Total liabilities and stockholders' equity | $ 25,791 | $ 29,277 |
INTERIM CONDENSED CONSOLIDATE_2
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 |
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Common stock, par value (in dollars per share) | $ 0.00005 | $ 0.00005 |
Common stock, shares Authorized | 100,000,000 | 100,000,000 |
Common stock, shares Issued | 36,486,180 | 36,401,413 |
Common stock, shares outstanding | 36,486,180 | 36,401,413 |
INTERIM CONDENSED CONSOLIDATE_3
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Operating expenses: | ||
Research and development, net (Note 8) | $ 2,616 | $ 4,341 |
General and administrative | 2,859 | 2,588 |
Operating loss | (5,475) | (6,929) |
Financial income, net | 115 | 267 |
Net loss | $ (5,360) | $ (6,662) |
Basic net loss per share from continuing operations | $ (0.15) | $ (0.19) |
Diluted net loss per share from continuing operations | $ (0.15) | $ (0.19) |
Weighted average number of shares outstanding used in computing basic net loss per share | 36,436,882 | 35,791,309 |
Weighted average number of shares outstanding used in computing diluted net loss per share | 36,436,882 | 35,791,309 |
STATEMENTS OF CHANGES IN STOCKH
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Common Stock | Additional paid-in capital | Treasury stocks | Accumulated Deficit | Total | |
Balance at Dec. 31, 2020 | $ 12,000 | [1] | $ 184,655,000 | $ (116,000) | $ (149,087,000) | $ 35,464,000 |
Balance (in shares) at Dec. 31, 2020 | 35,159,977 | |||||
Stock-based compensation related to stock and options granted to directors and employees | 290,000 | 0 | 0 | 290,000 | ||
Stock-based compensation related to stock and options granted to directors and employees (in shares) | 0 | |||||
Issuance of shares in at-the-market (ATM) offering (Note 7) | 7,104,000 | 7,104,000 | ||||
Issuance of shares in at-the-market (ATM) offering (Note 7) (in shares) | 1,156,897 | |||||
Exercise of options | 5,000 | 0 | 5,000 | |||
Exercise of options (in shares) | 1,687 | |||||
Net loss | (6,662,000) | (6,662,000) | ||||
Balance at Mar. 31, 2021 | $ 12,000 | [1] | 192,054,000 | (116,000) | (155,749,000) | 36,201,000 |
Balance (in shares) at Mar. 31, 2021 | 36,318,561 | |||||
Balance at Dec. 31, 2021 | $ 12,000 | [1] | 192,990,000 | (116,000) | (173,544,000) | 19,342,000 |
Balance (in shares) at Dec. 31, 2021 | 36,401,413 | |||||
Stock-based compensation related to stock and options granted to directors and employees | 505,000 | 0 | 505,000 | |||
Stock-based compensation related to stock and options granted to directors and employees (in shares) | 84,767 | |||||
Net loss | $ 0 | 0 | (5,360,000) | (5,360,000) | ||
Balance at Mar. 31, 2022 | $ 12,000 | [1] | $ 193,495,000 | $ (116,000) | $ (178,904,000) | $ 14,487,000 |
Balance (in shares) at Mar. 31, 2022 | 36,486,180 | |||||
[1] | Represents an amount less than $1. |
INTERIM CONDENSED CONSOLIDATE_4
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (5,360) | $ (6,662) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 74 | 61 |
Stock-based compensation related to options granted to employees and directors | 505 | 290 |
Change in operating lease liability | (117) | (293) |
Decrease in other accounts receivable and prepaid expenses | 323 | 322 |
Increase (decrease) in trade payables | 870 | (2,865) |
Increase in other accounts payable and accrued expenses | 17 | 179 |
Total net cash used in operating activities | (3,688) | (8,968) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (9) | (30) |
Changes in short-term deposit | (8) | (7) |
Total net cash used in investing activities | (17) | (37) |
Cash flows from financing activities: | ||
Proceeds from exercise of options | 5 | |
Proceeds from issuance of shares in at-the-market (ATM) offering (Note 7) | 7,104 | |
Total net cash provided by financing activities | 7,109 | |
Decrease in cash and cash equivalents | (3,705) | (1,896) |
Cash and cash equivalents at the beginning of the period | 18,856 | 37,829 |
Cash and cash equivalents at end of the period | $ 15,151 | 35,933 |
Supplemental schedule of non-cash transactions | ||
Right of use lease asset and liability | $ 85 |
GENERAL
GENERAL | 3 Months Ended |
Mar. 31, 2022 | |
GENERAL | |
GENERAL | NOTE 1 - GENERAL A. The Company was incorporated in the State of Delaware on November 15, 2006, and previously was incorporated in the State of Washington. In October 2004, the Company formed its wholly-owned subsidiary, Brainstorm Cell Therapeutics Ltd. (“BCT”) in Israel, which currently conducts all of the research and development activities of the Company. BCT formed wholly-owned subsidiaries Brainstorm Cell Therapeutics UK Ltd. in the United Kingdom on February 19, 2013 (currently inactive), Advanced Cell Therapies Ltd. in Israel on June 21, 2018 and Brainstorm Cell Therapeutics Limited in Ireland on October 1, 2019. The Common Stock is publicly traded on the Nasdaq Capital Market under the symbol “BCLI”. B. The Company, through BCT, holds rights to commercialize certain stem cell technology developed by Ramot of Tel Aviv University Ltd. (“Ramot”) (see Note 3). Using this technology, the Company has been developing novel adult stem cell therapies for debilitating neurodegenerative disorders such as Amyotrophic Lateral Sclerosis (ALS, also known as Lou Gehrig’s Disease), Progressive Multiple Sclerosis (PMS) and Alzheimer’s disease (AD). The Company developed a proprietary process, called NurOwn®, for the propagation of Mesenchymal Stem Cells and their differentiation into neurotrophic factor secreting cells. These cells are then transplanted at or near the site of damage, offering the hope of more effectively treating neurodegenerative diseases. The process is currently autologous, or self-transplanted. C. Since its inception, the Company has devoted substantially all of its efforts to research and development. The Company is still in its development and clinical stage and has not yet generated revenues. The Company has incurred operating losses since its inception and expects to continue to incur operating losses for the near-term. As of March 31, 2022, the Company had an accumulated deficit of approximately $ 179 million. The extent of the Company’s future operating losses and the timing of becoming profitable are uncertain. The Company’s primary sources of cash have been proceeds from the issuance and sale of its Common Stock and warrants, the exercise of warrants, sales of Common Stock via its ATM program and other funding transactions. While the Company has been successful in raising financing recently and in the past, there can be no assurance that it will be able to do so in the future on a timely basis on terms acceptable to the Company, or at all. The Company has not yet commercialized any of its product candidates. Even if the Company commercializes one or more of its product candidates, it may not become profitable in the near-term. The Company’s ability to achieve profitability depends on a number of factors, including its ability to obtain regulatory approval for its product candidates, successfully complete any post-approval regulatory obligations and successfully commercialize its product candidates alone or in partnership. The Company believes its existing cash will be sufficient to fund its anticipated operating cash requirements for at least twelve months following the date of this filing. The Company currently has sufficient cash to execute on its ongoing operating activities. Management expects that the Company will continue to generate losses from the clinical development and regulatory activities, which will result in a negative cash flow from operating activity. If the Company is granted a BLA approval, additional capital raise will be needed to commercialize NurOwn® for ALS, and to conduct additional trials that may be needed for other indications. The actual amount of cash that the Company will need to operate is subject to many factors, including, but not limited to, the timing, design and conduct of clinical trials for its product candidates along with cost to commercialize these product candidates. In early 2020, the World Health Organization declared the rapidly spreading coronavirus disease (COVID-19) outbreak a pandemic. This pandemic has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. The Company considered the impact of COVID-19 on its operations and determined that there were no material adverse impacts on the Company’s results of operations and financial position as of March 31, 2022. These estimates may change, as new events occur and additional information is obtained. |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2022 | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES A. Unaudited Interim Financial Statements The accompanying unaudited interim condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of U.S. Securities and Exchange Commission Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included (consisting only of normal recurring adjustments except as otherwise discussed). For further information, reference is made to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. Operating results for the three months ended March 31, 2022, are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. B. Significant Accounting Policies The significant accounting policies followed in the preparation of these unaudited interim condensed consolidated financial statements are identical to those applied in the preparation of the latest annual financial statements. C. Recent Accounting Standards Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s condensed financial statements. D. Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. |
RESEARCH AND LICENSE AGREEMENT
RESEARCH AND LICENSE AGREEMENT | 3 Months Ended |
Mar. 31, 2022 | |
RESEARCH AND LICENSE AGREEMENT | |
RESEARCH AND LICENSE AGREEMENT | NOTE 3 - RESEARCH AND LICENSE AGREEMENT In 2004, the Company entered into a Research and License Agreement, as amended and restated, with Ramot (the “License Agreement”). Pursuant to the remuneration terms of the License Agreement, the Company has agreed to pay Ramot royalties on Net Sales of the Licensed Product as follows : a) So long as the making, producing, manufacturing, using, marketing, selling, importing or exporting (collectively, the “Commercialization”) of such Licensed Product is covered by a Valid Claim or is covered by Orphan Drug Status, the Company shall pay Ramot a royalty of 5% of the Net Sales received by the Company and resulting from such Commercialization; and b) In the event the Commercialization of the Licensed Product is neither covered by a Valid Claim nor by Orphan Drug status, the Company shall pay Ramot a royalty of 3% of the Net Sales received by the Company resulting from such Commercialization. This royalty shall be paid from the First Commercial Sale of the Licensed Product and for a period of fifteen ( 15 ) years thereafter. Capitalized terms set forth above which are not defined shall have the meanings attributed to them under the License Agreement. |
SHORT TERM DEPOSITS
SHORT TERM DEPOSITS | 3 Months Ended |
Mar. 31, 2022 | |
SHORT TERM DEPOSITS | |
SHORT TERM DEPOSITS | NOTE 4 - SHORT TERM DEPOSITS Short term deposits on March 31, 2022 and December 31, 2021 include bank deposits bearing annual interest rates varying from 0.15%to 1.66%, with maturities of up to 1.75 years as of March 31, 2022 and December 31, 2021. |
PREPAID EXPENSES
PREPAID EXPENSES | 3 Months Ended |
Mar. 31, 2022 | |
PREPAID EXPENSES | |
PREPAID EXPENSES | NOTE 5 - PREPAID EXPENSES As of March 31, 2022, and as of December 31, 2021, prepaid expenses include director’s insurance of $724 and $1,086, respectively. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2022 | |
LEASES | |
LEASES | NOTE 6 - LEASES On January 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”) using the modified retrospective approach for all lease arrangements at the beginning of the period of adoption. The Company leases facilities, clinical research rooms, and vehicles under operating leases. As of March 31, 2022, the Company’s ROU assets and lease liabilities for operating leases totaled $5,380 and $5,561, respectively. The impact of adopting the new lease standard was not material to the Company’s condensed consolidated statement of operations for the periods presented. Supplemental cash flow information related to operating leases was as follows (unaudited): Three Months Ended March 31, 2022 Cash payments for operating leases $ 677 As of March 31, 2022, the Company’s operating leases had a weighted average remaining lease term of 3.66 years and a weighted average discount rate of 6.74%. Future lease payments under operating leases as of March 31, 2022 were as follows: Operating Leases Remainder of 2022 1,460 2023 1,165 2024 1,544 2025 1,287 2026 216 Total future lease payments 5,672 Less imputed interest (111) Total lease liability balance 5,561 |
STOCK CAPITAL
STOCK CAPITAL | 3 Months Ended |
Mar. 31, 2022 | |
STOCK CAPITAL | |
STOCK CAPITAL | NOTE 7 – STOCK CAPITAL The rights of Common Stock are as follows: Holders of the Company’s Common Stock have the right to receive notice to participate and vote in general meetings of the Company, the right to a share in the excess of assets upon liquidation of the Company and the right to receive dividends, if declared. NOTE 7 – STOCK CAPITAL (Cont.): Private placements and public offerings: 2018 Warrant Exercise Agreement: On June 6, 2018, the Company entered into a Warrant Exercise Agreement (the “2018 Warrant Exercise Agreement”) with certain holders (the “2018 Warrant Holders”) of warrants (the “2015 Warrants”) to purchase Common Stock. The 2015 Warrants were originally issued in the Company’s January 8, 2015, private placement. Pursuant to the 2018 Warrant Exercise Agreement, the 2018 Warrant Holders exercised their 2015 Warrants for a total of 2,458,201 shares of Common Stock at an amended exercise price of $5 per share. The warrant exercises generated gross cash proceeds to the Company of $12.3 million. In addition, the Company issued new warrants to the 2018 Warrant Holders to purchase an aggregate 2,458,201 unregistered shares of Common Stock, at an exercise price of $9.00, with an expiration date of December 31, 2020 (the “2018 Warrants”). In connection with the issuance of the 2019 Warrants (described below), certain 2018 Warrants were amended on August 2, 2019, to reduce the exercise price to $7.00 per share and to extend the expiration date to December 31, 2021 (the “Amended 2018 Warrants”). Between July 20, 2020, and July 24, 2020, 2018 Warrant Holders exercised an aggregate of 280,000 shares of the Amended 2018 Warrants (the “2018 Exercised Shares”), which exercises generated gross cash proceeds to the Company of $1,960,000. The 2018 Warrants have not been registered under the Securities Act of 1933, as amended (the Securities Act), or state securities laws. The shares issuable upon exercise of the Amended 2018 Warrants have been registered for resale on the Company’s registration statement on Form S-3 (File No. 333-225995). The exercised shares have been registered for resale on the Company’s registration statement on Form S-3 (File No. 333-201704). The issuance of the exercised shares and 2018 Warrants was exempt from the registration requirements of the Securities Act pursuant to the exemption for transactions by an issuer not involving any public offering under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated under the Securities Act. The Company made this determination based on the representations that each party is an “accredited investor” within the meaning of Rule 501 of Regulation D. 2019 Warrant Exercise Agreement: On August 2, 2019, the Company entered into a Warrant Exercise Agreement which generated gross cash proceeds to the Company of approximately $3.3 million. Pursuant to the agreement, certain holders (the “2019 Warrant Holders”) of the 2018 Warrants agreed to exercise 842,000 shares of Common Stock of their 2018 Warrants, at an amended exercise price of $3.90 per share, and the Company agreed to issue new warrant shares to the Holders to purchase 842,000 shares of Common Stock (the “2019 Warrants”), at an exercise price of $7.00, with an expiration date of December 31, 2021. The 2018 Warrants held by the 2019 Warrant Holders, to the extent not exercised, were also amended to reduce the exercise price to $7.00 per share and to extend the expiration date to December 31, 2021 (the “Amended 2018 Warrants”). Between July 15, 2020, and July 24, 2020, 2019 Warrant Holders exercised an aggregate of 620,000 shares of the 2019 Warrants (the “2019 Exercised Shares”), which exercises generated gross cash proceeds to the Company of $ 4,340,000. NOTE 7 – STOCK CAPITAL (Cont.): The Amended 2018 Warrants and 2019 Warrants have not been registered under the Securities Act of 1933, as amended (the Securities Act), or state securities laws. The shares issuable upon exercise of the 2019 Warrants have been registered for resale on the Company’s registration statement on Form S-3 (File No. 333-233349), and the shares issuable upon exercise of the Amended 2018 Warrants have been registered for resale on the Company’s registration statement on Form S-3 (File No. 333-225995). The exercised shares have been registered for resale on the Company’s registration statement on Form S-3 (File No. 333-225995). The issuance of the exercised shares, Amended 2018 Warrants and 2019 Warrants is exempt from the registration requirements of the Securities Act pursuant to the exemption for transactions by an issuer not involving any public offering under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated under the Securities Act. The Company made this determination based on the representations that each party is an “accredited investor” within the meaning of Rule 501 of Regulation D. At-the-market (ATM) Offerings: On June 11, 2019, the Company entered into a distribution agreement with Raymond James & Associates, Inc. (“Raymond James”), pursuant to which the Company sold, through the Raymond James, shares of Common Stock having an aggregate offering amount of $20,000,000 (the “June 11, 2019 ATM”) in an “at the market” offering as defined in Rule 415 promulgated under the Securities Act, including, without limitation, by sales made directly on the Nasdaq Capital Market, on any other existing trading market for the Shares, through a market maker or as otherwise agreed by the Company and Raymond James. On March 6, 2020, the Company entered into a new distribution agreement with Raymond James (the “Agent”), pursuant to which the Company was able to sell from time to time, through the Agent, shares of Common Stock, having an aggregate offering price of up to $50,000,000 (the “March 6, 2020, ATM”). Sales under the March 6, 2020. ATM were made by any method permitted by law that is deemed to be an “at the market” offering as defined in Rule 415 promulgated under the Securities Act, including, without limitation, sales made directly on the Nasdaq Capital Market, on any other existing trading market for the Shares, through a market maker or as otherwise agreed by the Company and Raymond James. Under the March 6, 2020, ATM, the Company sold an aggregate of 2,446,641 shares of Common Stock at an average price of $9.45 per share, raising gross proceeds of approximately $23.11 million. On September 25, 2020, the Company entered into an Amended and Restated Distribution Agreement (the “Distribution Agreement”) with SVB Leerink LLC (“Leerink”) and Raymond James & Associates (together with Leerink, the “Agents”) pursuant to which the Company may sell from time to time, through the Agents, shares of Common Stock, having an aggregate offering price of up to $45,000,000, which aggregate amount includes amount unsold pursuant to the March 6, 2020, ATM (the “September 25, 2020, ATM”). Sales under the September 25, 2020, ATM are to be made by any method permitted by law that is deemed to be an “at the market” offering as defined in Rule 415 promulgated under the Securities Act, including, without limitation, sales made directly on the Nasdaq Capital Market, on any other existing trading market for the Shares, through a market maker or as otherwise agreed by the Company and the Agents. The Distribution Agreement amends and restates in its entirety the Company’s prior agreement with Raymond James entered into on March 6, 2020 (the “March 6, 2020, ATM”). The Company previously sold 2,446,641 shares of Common Stock for gross proceeds of approximately $23.11 million of Common Stock under the March 6, 2020, ATM. During the quarter ended September 30, 2021, the Company did not sell any additional shares of its Common Stock pursuant to the September 25, 2020, ATM. Since inception and as of September 30, 2021, the Company has sold 4,721,282 shares of Common Stock for gross proceeds of approximately $29.1 million under the September 25, 2020, ATM. NOTE 7 – STOCK CAPITAL (Cont.): The Company has no obligation under the September 25, 2020, ATM to sell any shares and may at any time suspend sales or terminate the September 25, 2020, ATM in accordance with its terms. Subject to the terms and conditions of the Distribution Agreement, the Agents will use their commercially reasonable efforts to sell on the Company’s behalf, from time to time consistent with its normal sales and trading practices, such Shares based upon instructions from the Company (including any price, time or size limits or other customary parameters or conditions the Company may impose). The Company has provided the Agents with customary indemnification rights, and the Agents will be entitled to a fixed commission of 3.0% of the aggregate gross proceeds from the Shares sold. The Distribution Agreement contains customary representations and warranties, and the Company is required to deliver customary closing documents and certificates in connection with sales of the Shares. Shares sold under the ATMs are issued pursuant to the Company’s existing Shelf Registration Statement, and the Prospectus Supplement to the Registration Statements filed June 11, 2019, March 6, 2020, and September 25, 2020, respectively. On August 9, 2021, the Company entered into an Amended and Restated Distribution Agreement (the “New Distribution Agreement”) with the Agents pursuant to which the Company may sell from time to time, through the Agents, shares of Common Stock, having an aggregate offering price of up to $100,000,000 (the “August 9, 2021, ATM”). Sales under the August 9, 2021, ATM are to be made by any method permitted by law that is deemed to be an “at the market” offering as defined in Rule 415 promulgated under the Securities Act, including, without limitation, sales made directly on the Nasdaq Capital Market, on any other existing trading market for the Shares, through a market maker or as otherwise agreed by the Company and the Agents. In connection with the New Distribution Agreement, the Company terminated the previous Distribution Agreement and the September 25, 2020 ATM. As of March 31, 2022, the Company did not sell any shares of its Common Stock pursuant to the August 9, 2021, ATM. Registered Direct Offering: On March 6, 2020, the Company entered into and closed a $10.0 million registered direct offering of 1,250,000 shares of common stock at a per share purchase price equal to $8.00. The purchaser also received a three-year warrant to purchase up to 250,000 shares of Common Stock at any exercise price of $15.00 per share. Capital Raised Since Inception: Since its inception through March 31, 2022, the Company has raised approximately $151 million gross in cash in consideration for issuances of Common Stock and warrants in private placements and public offerings as well as proceeds from warrants exercises. NOTE 7 – STOCK CAPITAL (Cont.): Stock Plans: During the fiscal year ended December 31, 2021, the Company had outstanding awards for stock options under four stockholder approved plans: (i) the 2004 Global Stock Option Plan and the Israeli Appendix thereto (the “2004 Global Plan”) (ii) the 2005 U.S. Stock Option and Incentive Plan (the “2005 U.S. Plan,” and together with the 2004 Global Plan, the “Prior Plans”); (iii) the 2014 Global Share Option Plan and the Israeli Appendix thereto (which applies solely to participants who are residents of Israel) (the “2014 Global Plan”); and (iv) the 2014 Stock Incentive Plan (the “2014 U.S. Plan” and together with the 2014 Global Plan, the “2014 Plans”). The 2004 Global Plan and 2005 U.S. Plan expired on November 25, 2014, and March 28, 2015, respectively. Grants that were made under the Prior Plans remain outstanding pursuant to their terms. The 2014 Plans were approved by the stockholders on August 14, 2014 (at which time the Company ceased to issue awards under each of the 2005 U.S. Plan and 2004 Global Plan) and amended on June 21, 2016, and November 29, 2018. Unless otherwise stated, option grants prior to August 14, 2014, were made pursuant to the Company’s Prior Plans, and grants issued on or after August 14, 2014, were made pursuant to the Company’s 2014 Plans, and expire on the tenth anniversary of the grant date. The 2014 Plans have a shared pool of 5,600,000 shares of Common Stock available for issuance. As of March 31, 2022, 3,037,962 shares were available for future issuances under the 2014 Plans. The exercise price of the options granted under the 2014 Plans may not be less than the nominal value of the shares into which such options are exercised. Any options under the 2014 Plans that are canceled or forfeited before expiration become available for future grants. The Governance, Nominating and Compensation Committee (the “GNC Committee”) of the Board of Directors of the Company administers the Company’s stock incentive compensation and equity-based plans. Share-based compensation to employees and to directors: Under the 2014 Plans, the Company may award stock options to certain employees, officers, directors, and/or service providers. The stock options vest in accordance with such conditions and restrictions determined by the GNC Committee. These conditions and restrictions may include the achievement of certain performance goals and/or continued employment with the Company through a specified period. Stock options awarded are valued based upon the Black-Scholes option pricing model and the Company recognizes this value as stock compensation expense over the periods in which the options vest. Use of the Black Scholes option-pricing model requires that the Company make certain assumptions, including expected volatility, risk-free interest rate, expected dividend yield, and the expected life of the options. The Company granted 26,400 stock options during the three months ended March 31, 2022. NOTE 7 – STOCK CAPITAL (Cont.): A summary of the Company’s option activity related to options to employees and directors, and related information as of March 31, 2022, is as follows: For the Three months ended March 31, 2022 Weighted average Aggregate Amount of exercise intrinsic options * price value $ $ Outstanding at December 31, 2021 1,310,417 4.1734 Granted 26,400 3.0400 Outstanding at March 31, 2022 1,336,817 4.091 — Exercisable at March 31, 2022 1,026.609 3.0351 333,549 * Represents Employee Stock Options only (not including RSUs). The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the fair market value of the Company’s shares on March 31, 2022, multiplied by the number of in-the-money options on those dates) that would have been received by the option holders had all option holders exercised their options on those dates. As of March 31, 2022, there was $1,221 of total unrecognized compensation cost related to non-vested options under the Plan. The cost is expected to be recognized over a weighted average period of 1.53 years. Compensation expense recorded by the Company in respect of its stock-based employees and directors compensation awards in accordance with ASC 718-10 for the three months ended March 31, 2022 and 2021 amounted to $287 and $224, respectively. NOTE 7 - STOCK CAPITAL (Cont.): Restricted Stock: The Company awards stock and restricted stock to certain employees, officers, directors, and/or service providers. The restricted stock vests in accordance with such conditions and restrictions determined by the GNC Committee. These conditions and restrictions may include the achievement of certain performance goals and/or continued employment with the Company through a specified restricted period. The purchase price (if any) of shares of restricted stock is determined by the GNC Committee. If the performance goals and other restrictions are not attained, the grantee will automatically forfeit their unvested awards of restricted stock to the Company. Compensation expense for restricted stock is based on fair market value at the grant date. Weighted Average Remaining Number of Shares Weighted Average Contractual of Restricted Grant Date Fair Term Stock Value (Years) Nonvested as of December 31, 2021 272,596 5.49 1.23 Granted 39,767 3.06 Vested 41,691 4.59 Nonvested as of March 31, 2022 270,672 5.28 1.33 Compensation expense recorded by the Company in respect of its stock and restricted stock awards to certain employees, officers, directors, and/or service providers for the three months ended March 31, 2022 and March 31, 2021 amounted to $218 and $64, respectively. As of March 31, 2022, there was $765 of total unrecognized compensation cost related to non-vested restricted stock under the Plan. The cost is expected to be recognized over a weighted average period of 1.36 years. Total Stock-Based Compensation Expense The total stock-based compensation expense, related to shares, options and warrants granted to employees, directors and service providers was comprised, at each period, as follows: Three months ended March 31, 2022 2021 Research and development $ 147 $ (65) General and administrative 358 355 Total stock-based compensation expense $ 505 $ 290 |
RESEARCH AND DEVELOPMENT, NET
RESEARCH AND DEVELOPMENT, NET | 3 Months Ended |
Mar. 31, 2022 | |
RESEARCH AND DEVELOPMENT, NET | |
RESEARCH AND DEVELOPMENT, NET | NOTE 8 - RESEARCH AND DEVELOPMENT, NET Composition: Three months ended March 31, 2022 2021 Research and development $ 2,616 $ 4,807 Less: Participation by other grants $ — $ (466) 2,616 4,341 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2022 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 9 – SUBSEQUENT EVENTS In accordance with ASC 855 “Subsequent Events” the Company evaluated subsequent events through the date the condensed consolidated financial statements were issued. The Company concluded that no other subsequent events have occurred that would require recognition or disclosure in the condensed consolidated financial statements. |
BASIS OF PRESENTATION AND SIG_2
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | |
Unaudited Interim Financial Statements | A. Unaudited Interim Financial Statements The accompanying unaudited interim condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of U.S. Securities and Exchange Commission Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included (consisting only of normal recurring adjustments except as otherwise discussed). For further information, reference is made to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. Operating results for the three months ended March 31, 2022, are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. |
Significant Accounting Policies | B. Significant Accounting Policies The significant accounting policies followed in the preparation of these unaudited interim condensed consolidated financial statements are identical to those applied in the preparation of the latest annual financial statements. |
Recent Accounting Standards | C. Recent Accounting Standards Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s condensed financial statements. |
Use of estimates | D. Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
LEASES | |
Schedule of supplemental cash flow information related to operating leases | Supplemental cash flow information related to operating leases was as follows (unaudited): Three Months Ended March 31, 2022 Cash payments for operating leases $ 677 |
Schedule of future lease payments under operating leases | Operating Leases Remainder of 2022 1,460 2023 1,165 2024 1,544 2025 1,287 2026 216 Total future lease payments 5,672 Less imputed interest (111) Total lease liability balance 5,561 |
STOCK CAPITAL (Tables)
STOCK CAPITAL (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
STOCK CAPITAL | |
Summary of the Company's option activity | NOTE 7 – STOCK CAPITAL (Cont.): A summary of the Company’s option activity related to options to employees and directors, and related information as of March 31, 2022, is as follows: For the Three months ended March 31, 2022 Weighted average Aggregate Amount of exercise intrinsic options * price value $ $ Outstanding at December 31, 2021 1,310,417 4.1734 Granted 26,400 3.0400 Outstanding at March 31, 2022 1,336,817 4.091 — Exercisable at March 31, 2022 1,026.609 3.0351 333,549 * Represents Employee Stock Options only (not including RSUs). |
Schedule of compensation expense for restricted stock is based on fair market value at the grant date | Weighted Average Remaining Number of Shares Weighted Average Contractual of Restricted Grant Date Fair Term Stock Value (Years) Nonvested as of December 31, 2021 272,596 5.49 1.23 Granted 39,767 3.06 Vested 41,691 4.59 Nonvested as of March 31, 2022 270,672 5.28 1.33 |
Schedule of total stock-based compensation expense | The total stock-based compensation expense, related to shares, options and warrants granted to employees, directors and service providers was comprised, at each period, as follows: Three months ended March 31, 2022 2021 Research and development $ 147 $ (65) General and administrative 358 355 Total stock-based compensation expense $ 505 $ 290 |
RESEARCH AND DEVELOPMENT, NET (
RESEARCH AND DEVELOPMENT, NET (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
RESEARCH AND DEVELOPMENT, NET | |
Schedule of Research and development, Net | Three months ended March 31, 2022 2021 Research and development $ 2,616 $ 4,807 Less: Participation by other grants $ — $ (466) 2,616 4,341 |
GENERAL (Details)
GENERAL (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
GENERAL | ||
Accumulated deficit | $ (178,904) | $ (173,544) |
RESEARCH AND LICENSE AGREEMENT
RESEARCH AND LICENSE AGREEMENT (Details) | 3 Months Ended |
Mar. 31, 2022 | |
RESEARCH AND LICENSE AGREEMENT | |
Percentage of royalty payment if licensed product covered by valid claim or orphan drug status | 5.00% |
Percentage of royalty payment if licensed product not covered by valid claim or orphan drug status | 3.00% |
Validity of royalty payment not covered by valid claim or orphan drug status | 15 years |
SHORT TERM DEPOSITS (Details)
SHORT TERM DEPOSITS (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Cash and Cash Equivalents [Line Items] | ||
Maturity of short term deposits | 1 year 9 months | 1 year 9 months |
Minimum | ||
Cash and Cash Equivalents [Line Items] | ||
Annual interest rate on bank deposits | 0.15% | 0.15% |
Maximum | ||
Cash and Cash Equivalents [Line Items] | ||
Annual interest rate on bank deposits | 1.66% | 1.66% |
PREPAID EXPENSES (Details)
PREPAID EXPENSES (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
PREPAID EXPENSES | ||
Prepaid expense | $ 724 | $ 1,086 |
LEASES - Supplemental cash flow
LEASES - Supplemental cash flow information related to operating leases (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
LEASES | |
Cash payments for operating leases | $ 677 |
LEASES - Future lease payments
LEASES - Future lease payments under operating leases (Details) $ in Thousands | Mar. 31, 2022USD ($) |
LEASES | |
Remainder of 2022 | $ 1,460 |
2023 | 1,165 |
2024 | 1,544 |
2025 | 1,287 |
2026 | 216 |
Total future lease payments | 5,672 |
Less imputed interest | (111) |
Total lease liability balance | $ 5,561 |
LEASES - Additional information
LEASES - Additional information (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
LEASES | ||
Operating Lease, Right-of-Use Asset | $ 5,380 | $ 4,781 |
Operating Lease, Liability | $ 5,561 | |
Operating Lease, Weighted Average Remaining Lease Term | 3 years 7 months 28 days | |
Operating Lease, Weighted Average Discount Rate, Percent | 6.74% |
STOCK CAPITAL - Employee Stock
STOCK CAPITAL - Employee Stock Option (Details) - Employee Stock Option | 3 Months Ended | |
Mar. 31, 2022USD ($)$ / sharesshares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Amount of options, Outstanding at beginning of period | shares | 1,310,417 | [1] |
Amount of options, Granted | shares | 26,400 | [1] |
Amount of options, Outstanding at end of period | shares | 1,336,817 | [1] |
Amount of options, Vested at end of period | shares | 1,026.609 | [1] |
Weighted average exercise price, Outstanding at beginning of period (in dollars per share) | $ / shares | $ 4.1734 | |
Weighted average exercise price, Granted (in dollars per share) | $ / shares | 3.0400 | |
Weighted average exercise price, Outstanding at end of period (in dollars per share) | $ / shares | 4.091 | |
Weighted average exercise price, Vested at end of period (in dollars per share) | $ / shares | $ 3.0351 | |
Aggregate intrinsic value, Vested at end of period (in dollars) | $ | $ 333,549 | |
[1] | Represents Employee Stock Options only (not including RSUs). |
STOCK CAPITAL - Restricted Stoc
STOCK CAPITAL - Restricted Stock (Details) - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
STOCK CAPITAL | ||
Number of Shares of Restricted Stock, Nonvested at beginning of period | 272,596 | |
Granted | 39,767 | |
Vested | 41,691 | |
Number of Shares of Restricted Stock, Nonvested at end of period | 270,672 | 272,596 |
Weighted Average Grant Date Fair Value, Nonvested at beginning of period | $ 5.49 | |
Granted | 3.06 | |
Vested | 4.59 | |
Weighted Average Grant Date Fair Value, Nonvested at end of period | $ 5.28 | $ 5.49 |
Weighted Average Remaining Contractual Term (Years), Nonvested | 1 year 3 months 29 days | 1 year 2 months 23 days |
STOCK CAPITAL - Stock-Based Com
STOCK CAPITAL - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation expense | $ 505 | $ 290 |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation expense | 147 | (65) |
General and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation expense | $ 358 | $ 355 |
STOCK CAPITAL - Additional info
STOCK CAPITAL - Additional information (Details) - USD ($) | Aug. 09, 2021 | Sep. 25, 2020 | Jul. 24, 2020 | Jul. 24, 2020 | Mar. 06, 2020 | Aug. 02, 2019 | Jun. 11, 2019 | Jun. 06, 2018 | Mar. 31, 2022 | Mar. 31, 2021 | Sep. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 250,000 | |||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 15 | |||||||||||
Aggregate offering amount | $ 10,000,000 | |||||||||||
Aggregate shares sold | 1,250,000 | |||||||||||
Average Price | $ 8 | |||||||||||
Gross Proceeds | $ 151,000,000 | |||||||||||
Warrant term (in years) | 3 years | |||||||||||
Common Stock, Capital Shares Reserved for Future Issuance | 3,037,962 | |||||||||||
Stock or Unit Option Plan Expense | $ 505,000 | $ 290,000 | ||||||||||
Share-based Compensation | $ 505,000 | 290,000 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 39,767 | |||||||||||
2018 Warrant | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 842,000 | 2,458,201 | ||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5 | |||||||||||
Proceeds from Warrant Exercises | $ 12,300,000 | |||||||||||
Warrants Issued To Purchase Of Common Stock | 2,458,201 | |||||||||||
2018 Amended Warrants | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 280,000 | 280,000 | ||||||||||
Proceeds from Warrant Exercises | $ 1,960,000 | |||||||||||
2019 Warrant | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 620,000 | 620,000 | ||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 7 | |||||||||||
Proceeds from Warrant Exercises | $ 4,340,000 | $ 3,300,000 | ||||||||||
Employee Stock Option | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Total Unrecognized Compensation Cost | $ 1,221,000 | |||||||||||
Weighted average period | 1 year 6 months 10 days | |||||||||||
Stock or Unit Option Plan Expense | $ 287,000 | 224,000 | ||||||||||
Amount of options, Granted | [1] | 26,400 | ||||||||||
Restricted Stock | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Total Unrecognized Compensation Cost | $ 765,000 | |||||||||||
Weighted average period | 1 year 4 months 9 days | |||||||||||
Share-based Compensation | $ 218,000 | $ 64,000 | ||||||||||
Global Share Option Plan 2014 And US Stock Option And Incentive Plan 2014 [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Stock Issued During Period, Shares, Issued for Services | 5,600,000 | |||||||||||
Common Stock | 2018 Warrant | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | 9 | |||||||||||
Common Stock | 2019 Warrant | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 7 | $ 3.90 | ||||||||||
At Market Offering [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Aggregate offering amount | $ 100,000,000 | $ 45,000,000 | $ 50,000,000 | $ 20,000,000 | ||||||||
Aggregate shares sold | 2,446,641 | 4,721,282 | ||||||||||
Average Price | $ 9.45 | |||||||||||
Gross Proceeds | $ 23,110,000 | $ 29,100,000 | ||||||||||
Fixed Commission Percentage | 3.00% | |||||||||||
[1] | Represents Employee Stock Options only (not including RSUs). |
RESEARCH AND DEVELOPMENT, NET_2
RESEARCH AND DEVELOPMENT, NET (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Research And Development Arrangement [Line Items] | ||
Research and development | $ 2,616 | $ 4,807 |
Research and Development Expense | $ 2,616 | 4,341 |
Other | ||
Research And Development Arrangement [Line Items] | ||
Less : Participation | $ (466) |