UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2010
OR
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 000-52691
PROLOR BIOTECH, INC.
(Exact name of registrant as specified in its charter)
Nevada | 20-0854033 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
3 Sapir Street, Weizmann Science Park | ||
Nes-Ziona, Israel | 74140 | |
(Address of principal executive offices) | (Zip Code) |
(866) 644-7811
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (check one):
Large accelerated filer o | Accelerated Filer o | |
Non-accelerated filer o | (Do not check if a smaller reporting company) | Smaller reporting company x |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of November 5, 2010 there were 53,458,243 shares of common stock, par value $0.00001 per share (“Common Stock”), outstanding.
PROLOR BIOTECH, INC.
INDEX TO FORM 10-Q FILING
FOR THE QUARTER ENDED JUNE 30, 2010
Table of Contents
Page | ||
PART I | ||
ITEM 1. | Financial Statements. | 3 |
ITEM 2. | Management’s Discussion and Analysis of Financial Condition and Results of | |
Operations | 15 | |
ITEM 3. | Quantitative and Qualitative Disclosures About Market Risk | 23 |
ITEM 4. | Controls and Procedures | 23 |
PART II | ||
ITEM 1. | Legal Proceedings | 24 |
ITEM 1A | Risk Factors | 24 |
ITEM 2. | Unregistered Sales of Equity Securities and Use of Proceeds. | 24 |
ITEM 3. | Defaults Upon Senior Securities | 24 |
ITEM 4. | (Removed and Reserved) | 24 |
ITEM 5. | Other Information. | 24 |
ITEM 6. | Exhibits. | 24 |
SIGNATURES | 25 | |
CERTIFICATION | 26 |
PART I | – FINANCIAL INFORMATION |
ITEM 1. | Financial Statements. |
PROLOR BIOTECH, INC. AND SUBSIDIARIES
(A development stage company)
CONSOLIDATED BALANCE SHEETS
September 30, 2010 | December 31, 2009 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 16,461,208 | $ | 3,521,866 | ||||
Short term deposits | 8,375,086 | - | ||||||
Accounts receivable and prepaid expenses | 484,924 | 85,280 | ||||||
Restricted cash | 99,674 | 91,730 | ||||||
Total Current Assets | 25,420,892 | 3,698,876 | ||||||
Long-term Assets: | ||||||||
Property and equipment, net | 299,288 | 284,315 | ||||||
Severance pay fund | 168,043 | 124,324 | ||||||
Long term deposit | 2,247 | 1,906 | ||||||
Total Long Term Assets | 469,578 | 410,545 | ||||||
Total Assets | $ | 25,890,470 | $ | 4,109,421 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
Current Liabilities: | ||||||||
Trade payables | $ | 140,628 | $ | 131,924 | ||||
Related party payables | 54,873 | 203,583 | ||||||
Accrued expenses and other liabilities | 598,921 | 504,612 | ||||||
Total Current Liabilities | 794,422 | 840,119 | ||||||
Accrued Severance Pay | 200,382 | 140,237 | ||||||
Commitments and Contingent Liabilities | ||||||||
Shareholders' Equity: | ||||||||
Stock capital - | ||||||||
Preferred stock of $ 0.00001 par value – 10,000,000 shares of preferred stock authorized, none and 1,800,000 issued and outstanding as of September 30, 2010 and December 31, 2009, respectively. | - | 18 | ||||||
Common Stock of $ 0.00001 par value – 300,000,000 shares of Common Stock authorized 53,445,536 and 35,569,028 shares issued and outstanding as of September 30, 2010 and December 31, 2009, respectively. | 534 | 355 | ||||||
Additional paid-in capital | 56,593,823 | 30,153,517 | ||||||
(Deficit) accumulated during the development stage | (31,698,691 | ) | (27,024,825 | ) | ||||
Total Shareholders' Equity | 24,895,666 | 3,129,065 | ||||||
Total Liabilities and Shareholders' Equity | $ | 25,890,470 | $ | 4,109,421 |
The accompanying notes are an integral part of the consolidated financial statements.
3
PROLOR BIOTECH, INC. AND SUBSIDIARIES
(A development stage company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the three months ended September 30, | For the nine months ended September 30, | Period from May 31, 2005 (date of inception) | ||||||||||||||||||
2010 | 2009 | 2010 | 2009 | 2010 | ||||||||||||||||
Revenues | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
Operating expenses: | ||||||||||||||||||||
In-process research and development write-off | - | - | - | - | 3,222,831 | |||||||||||||||
Research and development, net | 1,110,317 | 575,917 | 2,958,073 | 3,466,320 | 16,058,831 | |||||||||||||||
General and administrative | 645,112 | 401,868 | 1,773,241 | 1,374,910 | 12,992,767 | |||||||||||||||
Total operating expenses | 1,755,429 | 977,785 | 4,731,317 | 4,841,230 | 32,274,429 | |||||||||||||||
Operating (loss) | (1,755,429 | ) | (977,785 | ) | (4,731,314 | ) | (4,841,230 | ) | (32,274,429 | ) | ||||||||||
Financial income | 364,538 | 73,256 | 57,448 | 101,234 | 934,694 | |||||||||||||||
Financial (expenses) | - | ( 1,041 | ) | - | (100,667 | ) | (358,956 | ) | ||||||||||||
Net (loss) | $ | (1,390,891 | ) | $ | (905,570 | ) | $ | (4,673,866 | ) | $ | (4,840,663 | ) | $ | (31,698,691 | ) | |||||
(Loss) per share (basic & diluted) | $ | (0.03 | ) | $ | (0.03 | ) | $ | (0.12 | ) | $ | (0.14 | ) | $ | (1.13 | ) | |||||
Weighted average number of shares outstanding | 42,931,281 | 35,549,028 | 39,027,340 | 35,549,028 | 28,018,313 |
The accompanying notes are an integral part of the consolidated financial statements.
4
PROLOR BIOTECH, INC. AND SUBSIDIARIES
(A development stage company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the nine months ended September 30, | Period from May 31, 2005 (date of inception) | |||||||||||
2010 | 2009 | 2010 | ||||||||||
Cash flows from operating activities | ||||||||||||
Net (loss) | $ | (4,673,866 | ) | $ | (4,840,663 | ) | $ | (31,698,691 | ) | |||
Adjustments to reconcile net (loss) to net cash (used in) | ||||||||||||
operating activities: | ||||||||||||
Depreciation | 62,800 | 58,112 | 261,742 | |||||||||
In-process research and development write-off | - | - | 3,222,831 | |||||||||
Stock based compensation | 677,257 | 572,526 | 7,873,042 | |||||||||
Increase (decrease) in accrued severance pay, net | 16,426 | (384 | ) | 32,339 | ||||||||
(Increase) in accounts receivable and prepaid expenses | (399,644 | ) | (690,919 | ) | (484,647 | ) | ||||||
Increase in trade payables | 8,704 | 15,807 | 130,524 | |||||||||
Increase (decrease) in related parties | (148,710 | ) | (5,462 | ) | 54,873 | |||||||
Long term deposit exchange rate differences | (22 | ) | - | (44 | ) | |||||||
Increase (decrease) in accrued expenses and other liabilities | 94,309 | 57,981 | 477,905 | |||||||||
Net cash (used in) operating activities | (4,362,746 | ) | (4,833,002 | ) | (20,130,126 | ) | ||||||
Cash flows from investing activities | ||||||||||||
Purchase of property and equipment | (77,773 | ) | (46,840 | ) | (546,674 | ) | ||||||
Payment for the acquisition of ModigeneTech Ltd. | - | - | (474,837 | ) | ||||||||
Long term deposit | (319 | ) | (23 | ) | (2,203 | ) | ||||||
Short term deposit | (8,375,086 | ) | - | (8,375,086 | ) | |||||||
Restricted deposit | (7,944 | ) | (1,066 | ) | (99,674 | ) | ||||||
Net cash (used in) investing activities | (8,461,122 | ) | (47,929 | ) | (9,498,474 | ) | ||||||
Cash flows from financing activities | ||||||||||||
Short term bank credit | - | - | (2,841 | ) | ||||||||
Proceeds from loans | - | - | (173,000 | ) | ||||||||
Principal payment of loans | - | - | 173,000 | |||||||||
Proceeds from issuance of shares | 24,145,241 | 1,996,000 | 44,456,998 | |||||||||
Proceeds from warrants and stock options exercise | 1,617,969 | - | 1,635,651 | |||||||||
Net cash provided by financing activities | 25,763,210 | 1,996,000 | 46,089,808 | |||||||||
Increase (decrease) in cash and cash equivalents | 12,939,342 | (2,884,931 | ) | 16,461,208 | ||||||||
Cash and cash equivalents at the beginning of the period | 3,521,866 | 7,465,232 | - | |||||||||
Cash and cash equivalents at the end of the period | $ | 16,461,208 | $ | 4,580,301 | $ | 16,461,208 | ||||||
The accompanying notes are an integral part of the unaudited consolidated financial statements.
5
PROLOR BIOTECH, INC. AND SUBSIDIARIES
(A development stage company)
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(Unaudited)
For the nine months ended September 30, | Period from May 31, 2005 (date of inception)to September 30, | |||||||||||
Non cash transactions: | 2010 | 2009 | 2010 | |||||||||
Employee options exercised into shares | $ | - | $ | - | $ | 140 | ||||||
Issuance of Common Stock in reverse acquisition | $ | - | $ | - | $ | 73 | ||||||
Conversion of preferred stock to Common Stock | $ | 18 | $ | - | $ | 18 | ||||||
Cashless exercise of outstanding warrants | $ | 871,278 | $ | - | $ | 871,278 | ||||||
Additional information: | ||||||||||||
Cash paid for income taxes | $ | - | $ | - | $ | - | ||||||
Cash paid for interest expense | $ | 9 | $ | 59 | $ | 353,733 |
The accompanying notes are an integral part of the unaudited consolidated financial statements.
6
PROLOR BIOTECH, INC. AND SUBSIDIARIES
(A development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2010
(Unaudited)
NOTE 1:- | GENERAL | |
a. | PROLOR Biotech, Inc. (“the Company”) was formed on August 22, 2003 under the laws of the state of Nevada. The Company is engaged in the development of therapeutic proteins with extended half-lives, through its subsidiaries, Modigene Inc., a Delaware-based subsidiary, and ModigeneTech Ltd., an Israeli-based subsidiary. | |
b. | The Company is devoting substantially all of its efforts toward research and development activities. The Company’s activities also include raising capital, recruiting personnel and building infrastructure. In the course of such activities, the Company has sustained operating losses and expects such losses to continue for the foreseeable future. The Company has not generated any revenues or product sales and has not achieved profitable operations or positive cash flow from operations. The Company’s deficit accumulated during the development stage aggregated $31,698,691 as of September 30, 2010. There is no assurance that profitable operations, if ever achieved, could be sustained on a continuing basis. The Company believes that its current cash resources will enable the continuance of the Company’s activities for at least the next twelve months with no need for additional financing. | |
c. | On March 11, 2010 and March 17, 2010, the Company entered into two substantially identical securities purchase agreements with certain private investors (the “Investors”), pursuant to which the Investors agreed to purchase an aggregate of 10,382,975 shares (the “Shares”) of Common Stock at a purchase price of $2.35 per Share. On March 17, 2010, the Company closed on the issuance of the Shares for aggregate consideration of $24,145,241 ($24,399,991 net of $254,750 issuing expenses). The Company issued the Shares in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 of Regulation D promulgated thereunder. Each Investor represented to the Company that such person was an “accredited investor” as defined in Rule 501(a) under the Securities Act and that such Investor’s Shares were being acquired for investment purposes. The Shares have not been registered under the Securities Act and are “restricted securities” as that term is defined by Rule 144 under the Securities Act. The Company has not undertaken to register the Shares, and no registration rights have been granted to the Investors in respect of the Shares. Additionally, each Investor entered into a lockup agreement in respect of the Shares, pursuant to which such Investor may not sell or otherwise transfer such Shares for a period of one year. | |
d. | On May 20, 2010, all 1,000,000 issued and outstanding shares of Series B Preferred Stock were converted into 2,167,780 shares of Common Stock. On May 21, 2010 all 800,000 issued and outstanding shares of Series A Preferred Stock were converted into 4,000,000 shares of Common Stock. No shares of the Company’s preferred stock were outstanding as of September 30, 2010. |
7
PROLOR BIOTECH, INC. AND SUBSIDIARIES
(A development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2010
(Unaudited)
NOTE 2:- | SIGNIFICANT ACCOUNTING POLICIES | |
a. | Basis of presentation: | |
The accompanying unaudited financial statements of the Company are presented in accordance with the requirements of Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted pursuant to such Securities and Exchange Commission (“SEC”) rules and regulations. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been made. The results for these interim periods are not necessarily indicative of the results for the entire year. The accompanying financial statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2009 and the notes thereto included in the Company’s Annual Report on Form 10-K filed with the SEC on March 26, 2010. | ||
b. | Principles of consolidation: | |
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Modigene Inc. and ModigeneTech Ltd. Intercompany transactions and balances have been eliminated upon consolidation. | ||
c. | Loss per share: | |
Basic and diluted losses per share are presented in accordance with ASC No. 260 “Earnings per share.” Outstanding share options and warrants, convertible preferred stock and restricted stock have been excluded from the calculation of the diluted loss per share because all such securities are antidilutive. The number of shares of Common Stock issuable upon exercise or conversion of the foregoing securities that has been excluded from calculations for the three months ended September 30, 2010 and 2009 and the period from May 31, 2005 (date of inception) to September 30, 2010 was 17,877,596, 9,420,772 and 7,072,495, respectively. The number of shares of Common Stock issuable excluded from calculations for the nine months ended September 30, 2010 and 2009 was 16,664,421 and 9,372,821, respectively. | ||
d. | Fair value measurements: | |
As defined in ASC 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”), fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820-10 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. |
8
PROLOR BIOTECH, INC. AND SUBSIDIARIES
(A development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2010
(Unaudited)
NOTE 2:- | SIGNIFICANT ACCOUNTING POLICIES (continued): | |||||||||||||
d. | Fair value measurements (continued): | |||||||||||||
Level 2: Other inputs that are observable, directly or indirectly, such as quoted prices for similar assets and liabilities or market corroborated inputs. Level 3: Unobservable inputs are used when little or no market data is available, which requires the Company to develop its own assumptions about how market participants would value the assets or liabilities. The fair value hierarchy gives the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques in its assessment that maximize the use of observable inputs and minimize the use of unobservable inputs. The following table presents the Company’s financial assets and liabilities that are carried at fair value, classified according to the three categories described above: |
Fair Value Measurements at September 30, 2010 | ||||||||||||||||
Quoted Prices in Active Markets for Identical Assets | Significant Other ObservableInputs | Significant UnobservableInputs | ||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
Cash and cash equivalents | $ | 16,461,208 | $ | 16,461,208 | $ | - | $ | - | ||||||||
Short term deposits | 8,375,086 | 8,375,086 | - | - | ||||||||||||
Restricted cash | 99,674 | 99,674 | - | - | ||||||||||||
Total assets at fair value | $ | 24,935,968 | $ | 24,935,968 | $ | - | $ | - |
Fair Value Measurements at December 31, 2009 | ||||||||||||||||
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | ||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
Cash and cash equivalents | $ | 3,521,866 | $ | 3,521,866 | $ | - | $ | - | ||||||||
Restricted cash | 91,730 | 91,730 | - | - | ||||||||||||
Total assets at fair value | $ | 3,613,596 | $ | 3,613,596 | $ | - | $ | - |
9
PROLOR BIOTECH, INC. AND SUBSIDIARIES
(A development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2010
(Unaudited)
NOTE 3:- | RECENT ACCOUNTING PRONOUNCEMENTS |
In April 2010, the FASB issued Accounting Standards Update No. 2010-17 (“ASU 2010-17”), Revenue Recognition-Milestone Method (Topic 605): Milestone Method of Revenue Recognition. The amendments in ASU 2010-17 are effective on a prospective basis for milestones achieved in fiscal years, and interim periods within those years, beginning on or after June 15, 2010. Early adoption is permitted. The Company does not expect the provisions of ASU 2010-17 to have a material effect on its financial statements In April 2010, the FASB issued Accounting Standards Update No. 2010-13 (“ASU 2010-13”), Compensation—Stock Compensation (Topic 718), which clarifies the classification of an employee share-based payment award with an exercise price denominated in the currency of a market in which the underlying security trades. ASU 2010-13 will be effective for the first fiscal quarter beginning after December 15, 2010, with early adoption permitted. The Company does not expect the provisions of ASU 2010-13 to have a material effect on its financial statements. In February 2010, the FASB issued Accounting Standards Update No. 2010-09 (“ASU 2010-09”), Subsequent Events (Topic 855) regarding subsequent events and amendments to certain recognition and disclosure requirements. Under ASU 2010-09, a public company that is an SEC filer, as defined therein, is not required to disclose the date through which subsequent events have been evaluated. ASU 2010-09 was effective upon issuance. The adoption of this ASU 2010-09 did not have a material impact on the Company's financial statements. In January 2010, the FASB issued Accounting Standards Update No. 2010-06 (“ASU 2010-06”), Fair Value Measurements and Disclosures (Topic 820), regarding fair value measurements and disclosures and improvement in the disclosure about fair value measurements. ASU 2010-06 requires additional disclosures regarding significant transfers in and out of Levels 1 and 2 of fair value measurements, including a description of the reasons for the transfers. Further, this ASU 2010-06 requires additional disclosures for the activity in Level 3 fair value measurements, requiring presentation of information about purchases, sales, issuances and settlements in the reconciliation for fair value measurements. ASU 2010-06 is effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The Company is currently evaluating the impact of ASU 2010-06; however, the Company does not expect that its adoption will have a material impact on its financial statements. There were other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company’s consolidated financial position, results of operations or cash flows. |
10
PROLOR BIOTECH, INC. AND SUBSIDIARIES
(A development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2010
(Unaudited)
NOTE 4:- | EMPLOYEES' STOCK OPTION PLANS | ||||||||||
The Company issued stock options to purchase shares of Common Stock under the Company’s 2005 Stock Incentive Plan (the “2005 Plan”) and the Company’s 2007 Equity Incentive Plan (the “2007 Plan”). The Company accounts for stock-based compensation using the fair value recognition provisions of ASC No. 718 “Compensation – stock compensation.” The fair value of each stock option is calculated based upon grant date fair value using the Black-Scholes option-pricing model using the following weighted average assumptions: |
Options granted under 2005 & 2007 Plan in the nine months ended | Options granted under 2007 Plan in the nine months ended | |||||||
September 30, 2009 | September 30, 2010 | |||||||
annual dividends of | $ | 0.00 | $ | 0.00 | ||||
expected volatility of | 116.72 | % | 104.45 | % | ||||
risk-free interest rate of | 0.01 | % | 0.30 | % | ||||
expected options expiration | 5 | 7 |
The fair value of stock options granted in the nine months ended September 30, 2010 and 2009 were $1,101,100 and $131,342, respectively. | |||||||||||
The following is a summary of the stock options granted under the 2005 and 2007 Plans: |
For the nine months ended | ||||||||
September 30, 2010 | ||||||||
Number of Options | Weighted Average Exercise Price | |||||||
Outstanding at the beginning of the period | 4,785,439 | $ | 1.11 | |||||
Exercised | (555,130 | ) | $ | 1.48 | ||||
Forfeited | (106,468 | ) | $ | 2.24 | ||||
Issued under the 2007 plan | 500,000 | $ | 2.40 | |||||
Issued under the 2007 plan | 50,000 | $ | 2.35 | |||||
Outstanding at the end of the period | 4,673,841 | $ | 1.29 | |||||
Options exercisable | 2,903,673 | $ | 1.14 |
11
PROLOR BIOTECH, INC. AND SUBSIDIARIES
(A development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2010
(Unaudited)
NOTE 4:- | EMPLOYEES' STOCK OPTION PLANS (continued) |
For the nine months ended | ||||||||
September 30, 2009 | ||||||||
Number of Options | Weighted Average Exercise Price | |||||||
Outstanding at the beginning of the period | 4,432,292 | $ | 1.14 | |||||
Issued under the 2005 plan | 175,500 | $ | 0.65 | |||||
Issued under the 2007 plan | 200,000 | $ | 0.65 | |||||
Forfeited | (2,353 | ) | $ | 1.49 | ||||
Outstanding at the end of the period | 4,805,439 | $ | 1.10 | |||||
Options exercisable | 2,721,397 | $ | 1.19 |
The options outstanding as of September 30, 2010 have been separated into exercise prices, as follows: | ||||||||||||||
Remaining Weighted Average | ||||||||||||||
Exercise Price | Options Outstanding | Contractual Life (years) | Options Exercisable | |||||||||||
$ | 0.650 | 375,000 | 8.35 | 182,083 | ||||||||||
$ | 0.879 | 984,401 | 5.52 | 984,401 | ||||||||||
$ | 0.900 | 1,950,000 | 7.42 | 975,000 | ||||||||||
$ | 0.930 | 25,000 | 7.43 | 16,667 | ||||||||||
$ | 1.318 | 119,452 | 5.83 | 119,452 | ||||||||||
$ | 1.500 | 121,169 | 7.57 | 77,251 | ||||||||||
$ | 2.000 | 425,000 | 6.61 | 425,000 | ||||||||||
$ | 2.500 | 123,819 | 2.69 | 123,819 | ||||||||||
$ | 2.350 | 50,000 | 9.27 | - | ||||||||||
$ | 2.400 | 500,000 | 9.29 | - | ||||||||||
4,673,841 | 2,903,673 | |||||||||||||
12
PROLOR BIOTECH, INC. AND SUBSIDIARIES
(A development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2010
(Unaudited)
NOTE 4:- | EMPLOYEES' STOCK OPTION PLANS (continued) |
Weighted average fair values and average exercise prices of options at date of grant and total aggregate intrinsic value of outstanding options are as follows: |
September 30, | December 31, | |||||||
2010 | 2009 | |||||||
Weighted average fair value on date of grant | $ | 0.77 | $ | 0.71 | ||||
Total aggregate intrinsic value | $ | 25,414,677 | $ | 6,556,831 |
Stock-based compensation expense for the three months ended September 30, 2010 and 2009 and for the period from May 31, 2005 (date of inception) to September 30, 2010 was $208,785, $155,815 and $7,873,042, respectively. Stock-based compensation expense for the nine months ended September 30, 2010 and 2009 was $677,257 and $572,526, respectively. Stock-based compensation expense for the period from May 31, 2005 (date of inception) through September 30, 2010 includes $3,876,960 expensed in the acquisition of a subsidiary and on behalf of deferred compensation on restricted shares. |
NOTE 5:- | STOCK WARRANTS |
For the nine months ended | ||||||||
September 30, 2010 | ||||||||
Number of warrants | Weighted Average Exercise Price | |||||||
Outstanding and exercisable at the beginning of the period | 3,558,924 | $ | 2.18 | |||||
Exercised | (1,004,116 | ) | $ | 2.21 | ||||
Outstanding and exercisable at the end of the period | 2,554,808 | $ | 2.17 |
Proceeds from exercise of 1,000,116 warrants into 770,634 shares in the nine months ended September 30, 2010 were $795,833. Total aggregate intrinsic value of warrants outstanding as of September 30, 2010 was $9,810,808. |
13
PROLOR BIOTECH, INC. AND SUBSIDIARIES
(A development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2010
(Unaudited)
NOTE 6:- | SUBSEQUENT EVENTS |
As defined in FASB ASC 855-10, “Subsequent Events”, subsequent events are events or transactions that occur after the balance sheet date but before financial statements are issued or available to be issued. Subsequent to September 30, 2010 and through November 3, 2010, 12,707 new common shares were issued in connection with the exercise of outstanding warrants. |
14
ITEM 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (“PSLRA”), Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), about our expectations, beliefs or intentions regarding our product development efforts, business, financial condition, results of operations, strategies or prospects. You can identify such forward-looking statements by the words “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” “likely,” “goal,” “assumes,” “targets” and similar expressions and/or the use of future tense or conditional constructions (such as “will,” “may,” “could,” “should” and the like) and by the fact that these statements do not relate strictly to historical or current matters. Rather, forward-looking statements relate to anticipated or expected events, activities, trends or results as of the date they are made. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties that could cause our actual results to differ materially from any future results expressed or implied by the forward-looking statements. Many factors could cause our actual operations or results to differ materially from the operations and results anticipated in forward-looking statements. These factors include, but are not limited to the factors contained in “Item 1A — Risk Factors” of our Annual Report on Form 10-K as updated by our subsequently filed Forms 10-Q or other documents we file with the SEC. We do not undertake any obligation to update forward-looking statements, except as required by applicable law. We intend that all forward-looking statements be subject to the safe harbor provisions of PSLRA. These forward-looking statements are only predictions and reflect our views as of the date they are made with respect to future events and financial performance.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
The discussion and analysis of the Company’s financial condition and results of operations are based on the Company’s financial statements, which the Company has prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The preparation of these financial statements requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenues and expenses during the reporting periods. On an ongoing basis, the Company evaluates such estimates and judgments, including those described in greater detail below. The Company bases its estimates on historical experience and on various other factors that the Company believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Overview
We are a development stage biopharmaceutical company utilizing patented technology to develop longer-acting, proprietary versions of already-approved therapeutic proteins that currently generate billions of dollars in annual global sales. We have obtained certain exclusive worldwide rights from Washington University in St. Louis, Missouri to use a short, naturally-occurring amino acid sequence (peptide) that has the effect of slowing the removal from the body of the therapeutic protein to which it is attached. This Carboxyl Terminal Peptide (CTP) can be readily attached to a wide array of existing therapeutic proteins, stabilizing the therapeutic protein in the bloodstream and extending its life span without additional toxicity or loss of desired biological activity. We are using the CTP technology to develop new, proprietary versions of certain existing therapeutic proteins that have longer life spans than therapeutic proteins without CTP. We believe that our products will have greatly improved therapeutic profiles and distinct market advantages.
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We believe our products in development will provide several key advantages over our competitor’s existing products, including:
· | significant reduction in the number of injections required to achieve the same or superior therapeutic effect from the same dosage; |
· | extended patent protection for proprietary new formulations of existing therapies; |
· | faster commercialization with greater chance of success and lower costs than those typically associated with a new therapeutic protein; and |
· | manufacturing using industry-standard biotechnology-based protein production processes. |
Merck & Co. developed the first novel protein containing CTP, named ELONVA®, a long-acting CTP-modified version of the fertility drug follicle stimulating hormone (FSH). On January 28, 2010, Merck received marketing authorization from the European Commission for ELONVA® with unified labeling valid in all European Union Member States. Merck licensed the CTP technology directly from Washington University (prior to the formation of our subsidiary, Modigene Delaware) for application only to Follicle Stimulating Hormone (FSH) and three other hormones, human Chorionic Gonadotropin (hCG), Luteinizing Hormone (LH) and Thyroid-Stimulating Hormone (TSH).
Our internal product development program is currently focused on extending the life span of the following biopharmaceuticals, which together address an established market estimated to exceed $15 billion:
· | Human Growth Hormone (hGH) |
· | Interferon β |
· | Factor VIIa, Factor IX |
· | Erythropoietin (EPO) |
· | Anti-Obesity Peptide |
· | Glucagon-Like Peptide-1 (GLP-1) |
Worldwide sales of hGH are estimated at $3.0 billion, those of EPO are estimated at $10.0 billion, those of interferon β are estimated at $5.3 billion, and those of Factor VIIa and Factor IX are estimated at $1.5 billion in the aggregate. We believe that the CTP technology will be broadly applicable to these as well as other best-selling therapeutic proteins in the market and will be attractive to potential partners because it will allow them to extend proprietary rights for therapeutic proteins with near-term patent expirations.
Critical Accounting Policies
The historical financial statements of the Company included with this Quarterly Report have been prepared in accordance with GAAP. The significant accounting policies followed in the preparation of the financial statements, on a consistent basis, are described below.
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 materially from those estimates.
Financial Statements in United States Dollars: The functional currency of the Company is the U.S. Dollar, as the U.S. Dollar is the primary currency of the economic environment in which the Company expects to continue to operate in the foreseeable future. The majority of our R&D subsidiary’s operations are currently conducted in Israel, and most of the Israeli expenses are paid in New Israeli Shekels; however, most expenses are denominated and determined in U.S. Dollars. Financing and investing activities, including loans and equity transactions, are denominated in U.S. Dollars. The majority of our assets, however, are held in the U.S.
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Accordingly, the functional and reporting currency of the Company is the U.S. Dollar. Monetary accounts maintained in currencies other than the dollar are remeasured in U.S. Dollars. All transaction gains and losses from the remeasurement of monetary balance sheet items are reflected in the statements of operations as financial income or expense, as appropriate.
Principles of Consolidation: The consolidated financial statements include the accounts of the Company’s wholly-owned subsidiary, Modigene Delaware, and its wholly-owned subsidiary, ModigeneTech. Intercompany transactions and balances have been eliminated upon consolidation.
Research and Development Costs and Participation: Research and development (“R&D”) costs are expensed as they are incurred and consist of salaries, benefits and other personnel-related costs, fees paid to consultants, clinical trials and related clinical manufacturing costs, license and milestone fees, and facilities and overhead costs. R&D expenses consist of independent R&D costs and costs associated with collaborative R&D and in-licensing arrangements. Participation from government for development of approved projects are recognized as a reduction of expenses as the related costs are incurred.
Concentrations of Credit Risk: Financial instruments that potentially subjected the Company to concentrations of credit risk consist principally of cash and cash equivalents.
Cash and cash equivalents are invested in major banks in Israel and the United States. Such deposits in the United States are not insured. Management believes that the financial institutions that hold the Company’s investments are financially sound, and, accordingly, minimal credit risk exists with respect to these investments.
The Company has no off-balance sheet concentration of credit risk, such as foreign exchange contracts or other foreign hedging arrangements.
Royalty-bearing Grants: Royalty-bearing grants from the Government of Israel for participation in the development of approved projects are recognized as a reduction of expenses as the related costs are incurred. Funding is recognized at the time ModigeneTech is entitled to such grants, on the basis of the costs incurred.
Research and development grants received by ModigeneTech for the three months ended September 30, 2010 and 2009 and for the period from May 31, 2005 (inception date) through September 30, 2010 amounted to $92,106, $49,341 and $2,842,694, respectively. Research and development grants received by ModigeneTech for the nine months ended September 30, 2010 and 2009 amounted to $837,929 and $438,770, respectively.
Loss per Share: Basic and diluted losses per share are presented in accordance with ASC 260-10 “Earnings per share.” Outstanding share options, warrants and restricted shares have been excluded from the calculation of the diluted loss per share because all such securities are antidilutive. The total weighted average number of shares of Common Stock related to outstanding options, warrants and restricted shares excluded from the calculations of diluted loss per share was 17,877,596, 9,420,772 and 7,072,495 for the three months ended September 30, 2010 and 2009 and for the period from May 31, 2005 (inception date) through September 30, 2010, respectively. The total weighted average number of shares of Common Stock related to outstanding options warrants and restricted shares excluded from the calculations of diluted loss per share was 16,664,421 and 9,372,821 for the nine months ended September 30, 2010 and 2009, respectively.
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Results of Operation
Three and Nine Months Ended September 30, 2010 Compared to the Three and Nine Months ended September 30, 2009
Revenue
The Company has not generated any revenue from operations since its inception. To date, the Company has funded its operations primarily through grants from the Israeli Office of the Chief Scientist (the “OCS”) and the sale of equity securities. If the Company’s development efforts result in clinical success, regulatory approval and successful commercialization of the Company’s products, then the Company could generate revenue from sales of its products.
Research and Development Expense
The Company expects its research and development expenses to increase as it continues to develop its product candidates. Research and development expense consists of:
· | internal costs associated with research and development activities; |
· | payments made to third party contract research organizations, contract manufacturers, investigative sites, and consultants; |
· | manufacturing development costs; |
· | personnel-related expenses, including salaries, benefits, travel, and related costs for the personnel involved in the research and development; |
· | activities relating to the advancement of product candidates through preclinical studies and clinical trials; and |
· | facilities and other expenses, which include expenses for rent and maintenance of facilities, as well as laboratory and other supplies. |
The Company expects its research and development expenditures to increase significantly in the near future in connection with the ongoing production of its protein drug candidates. The Company intends to continue to hire new employees, in research and development, in order to meet its operation plans.
The Company has multiple research and development projects ongoing at any one time. The Company utilizes its internal resources, employees and infrastructure across multiple projects and tracks time spent by employees on specific projects. The Company believes that significant investment in product development is a competitive necessity and plans to continue these investments in order to realize the potential of its product candidates. For the three months ended September 30, 2010 and 2009 and for the period from May 31, 2005 (inception date) through September 30, 2010, the Company incurred net research and development expenses of $1,110,317, $575,917 and $16,058,831, respectively. For the nine months ended September 30, 2010 and 2009, the Company incurred net research and development expenses of $2,958,073 and $3,466,320, respectively. The decrease for the nine-month 2010 period as compared to the nine-month 2009 period resulted primarily from reduction in development expenses associated with the manufacturing of non-GMP and GMP of hGH-CTP following the Company’s manufacture of a sufficient stockpile of drug product. The increase for the three-month 2010 period as compared to the three-month 2009 period resulted primarily from development expenses associated with other pipeline candidates. The successful development of the Company’s product candidates is subject to numerous risks, uncertainties and other factors. Beyond the next twelve months, the Company cannot reasonably estimate or know the nature, timing and costs of the efforts that will be necessary to complete the remainder of the development of, or the period, if any, in which material net cash inflows may commence from the Company’s product candidates or any of the Company’s other development efforts. This is due to the numerous risks and uncertainties associated with the duration and cost of clinical trials which vary significantly over the life of a project as a result of differences arising during clinical development, including:
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· | completion of such preclinical and clinical trials; |
· | the number of clinical sites included in the trials; |
· | the length of time required to enroll suitable patients; |
· | the number of patients that ultimately participate in the trials; |
· | adverse medical events or side effects in treated patients; |
· | lack of comparability with complementary technologies; |
· | obtaining capital necessary to fund operations, including research and development efforts; and |
· | the results of clinical trials. |
The Company’s expenditures are subject to additional uncertainties, including the terms and timing of regulatory approvals, and the expense of filing, prosecuting, defending and enforcing any patent claims or other intellectual property rights. The Company may obtain unexpected results from its clinical trials. The Company may elect to discontinue, delay or modify clinical trials of some product candidates or focus on others. A change in the outcome of any of the foregoing variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate. For example, if the United States Food and Drug Administration (“FDA”) or other regulatory authorities were to require the Company to conduct clinical trials beyond those which it currently anticipates will be required for the completion of the clinical development of a product candidate, or if the Company experiences significant delays in enrollment in any of its clinical trials, the Company could be required to expend significant additional financial resources and time on the completion of clinical development. Drug development may take several years and millions of dollars in development costs. If the Company does not obtain or maintain regulatory approval for its products, its financial condition and results of operations will be substantially harmed.
General and Administrative Expense
General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation expenses for persons serving in the Company’s executive and administration functions. Other general and administrative expenses includes facility-related costs not otherwise included in research and development expenses and professional fees for legal and accounting services. The Company expects that its general and administrative expense will increase as it adds additional personnel. For the three months ended September 30, 2010 and 2009 and for the period from May 31, 2005 (inception date) through September 30, 2010, the Company incurred general and administrative expenses of $645,112, $401,868 and $12,992,767, respectively. For the nine months ended September 30, 2010 and 2009, the Company incurred general and administrative expenses in the aggregate of $1,773,241 and $1,374,910, respectively. The increase in general and administrative expense for both the three and nine months ended September 30, 2010 as compared to the 2009 periods was due primarily to an increase in stock-based compensation relating to options.
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Financial expenses and income consists of the following:
· | interest earned on the Company’s cash and cash equivalents; |
· | interest expenses on short term bank credit; and |
· | expenses or income resulting from fluctuations of the New Israeli Shekel and Euro, which a portion of the Company’s assets and liabilities are denominated in, against the United States Dollar. |
For the three months ended September 30, 2010 and 2009 and for the period from May 31, 2005 (inception date) through September 30, 2010, the Company incurred net financial (expense) income of $364,538, $72,215 and $575,738, respectively. For the nine months ended September 30, 2010 and 2009, the Company incurred net financial (expense) in the aggregate of $57,448 and $567, respectively. Financial expense for the periods presented resulted primarily from currency fluctuations on deposits in New Israeli Shekels and the Euro. The increase in net financial income for the three and nine months ended September 30, 2010 as compared to the 2009 periods was primarily due to higher interest amount received from deposits related with the cash received in the March 11, 2010 and March 17, 2010 financings.
Stock-based Compensation
The Company’s stock-based compensation expenses are recorded according to ASC 718-10, “Compensation - Stock Compensation”, which requires the measurement and recognition of compensation expenses for all stock-based payment awards made to employees and directors, including employee stock options under the Company’s stock plans, based on estimated fair values.
ASC 718-10 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in the Company’s consolidated statement of operations. The Company estimates the fair value of stock options granted using the Black-Scholes-Merton option-pricing model.
For the three months ended September 30, 2010 and September 30, 2009 and for the period from May 31, 2005 (inception date) through September 30, 2010, the Company incurred stock-based compensation expenses of $208,785, $155,815 and $7,873,042, respectively. For the nine months ended September 30, 2010 and September 30, 2009, the Company incurred stock-based compensation expenses in the aggregate of $677,257 and $572,526, respectively. The increase in stock-based compensation expenses for the three and nine-months ended September 30, 2010 as compared to the 2009 periods is primarily due to a greater number of stock options granted for the 2010 periods as compared to the 2009 periods.
The Company applies ASC 505 "Equity" with respect to options and warrants issued to non-employees (other than non-employee directors). ASC 505 requires the use of an option valuation model to measure the fair value of the options at the grant date.
Cash Flows
For the nine months ended September 30, 2010 and 2009 net cash used in operations was approximately $4,362,746 and $4,833,002, respectively. Our research and development cash expenses are expected to increase significantly over the next 12 months as we progress with the clinical development of our lead drug product, hGH-CTP.
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For the nine months ended September 30, 2010 and 2009 net cash used in investing activities was approximately $8,461,122 and $47,929, respectively. The difference for the 2010 period resulted primarily from cash investments in short-term bank deposits. The deposits are held mostly in US$.
For the nine months ended September 30, 2010 and 2009 net cash provided by financing activities was approximately $25,763,210 and $1,996,000, respectively. The increase in 2010 resulted from our issuance of 10,382,975 shares of Common Stock for aggregate consideration of $24,145,241 ($24,399,991 net of $254,750 issuing expenses) in a private placement that was consummated in March 2010, as well as from option and warrant exercises.
Liquidity and Capital Resources
The Company expects to incur losses from operations for the foreseeable future. The Company expects to incur increasing research and development expenses, including expenses related to the hiring of personnel and additional clinical trials. The Company expects that general and administrative expenses will also increase as the Company expands its finance and administrative staff, adds infrastructure, and incurs additional costs related to being a public company in the United States, including the costs of directors’ and officers’ insurance, investor relations programs and increased professional fees. Our future capital requirements will depend on a number of factors, including the continued progress of our research and development of product candidates, the timing and outcome of clinical trials and regulatory approvals, the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims and other intellectual property rights, the status of competitive products, the availability of financing, and our success in developing markets for our product candidates.
Our research and development cash expenses are expected to increase significantly over the next 12 months as we progress with the clinical development of our lead drug product, hGH-CTP, and, as of September 30, 2010, our principal source of liquidity was our $16.5 million in unrestricted cash and cash equivalents and $8.4 million in short-term investments. We believe that our existing cash and cash equivalents and short-term investments will be sufficient to enable us to fund our operating expenses and capital expenditure requirements at least for the next twelve months. We have based this estimate on assumptions that may prove to be wrong or subject to change, and we may be required to use our available capital resources sooner than we currently expect. Because of the numerous risks and uncertainties associated with the development and commercialization of our product candidates, we are unable to estimate the amounts of increased capital outlays and operating expenditures associated with our current and anticipated clinical trials. Our future capital requirements will depend on many factors, including the progress and results of our clinical trials, the duration and cost of discovery and preclinical development, and laboratory testing and clinical trials for our product candidates, the timing and outcome of regulatory review of our product candidates, the number and development requirements of other product candidates that we pursue, and the costs of commercialization activities, including product marketing, sales and distribution. We do not anticipate that we will generate product revenues for at least the next several years. In the absence of additional funding, we expect continuing operating losses to result in increases in our cash used in operations over the next several years. To the extent that our capital resources are insufficient to meet our future capital requirements, we will need to finance our future cash needs through public or private equity offerings, debt financings or corporate collaboration and licensing arrangements
In May 2010, in connection with the Company's listing of its Common Stock on the Tel Aviv Stock Exchange, all shares of the Company’s Series A preferred stock and Series B preferred stock were converted in accordance with their respective terms into an aggregate of 6,167,780 shares of Common Stock. We currently do not have any issued and outstanding preferred shares. We do not currently have any commitments for future external funding. We may need to raise additional funds more quickly if one or more of our assumptions proves to be incorrect or if we choose to expand our product development efforts more rapidly than we presently anticipate, and we may decide to raise additional funds even before we need them if the conditions for raising capital are favorable. We may seek to sell additional equity or debt securities or obtain a bank credit facility. The sale of additional equity or debt securities may result in dilution to our stockholders. The incurrence of indebtedness would result in increased fixed obligations and could also result in covenants that would restrict our operations. Additional equity or debt financing, grants, or corporate collaboration and licensing arrangements may not be available on acceptable terms, if at all. If adequate funds are not available, we may be required to delay, reduce the scope of or eliminate our research and development programs, reduce our planned commercialization efforts or obtain funds through arrangements with collaborators or others that may require us to relinquish rights to certain product candidates that we might otherwise seek to develop or commercialize independently.
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Effects of Inflation and Currency Fluctuations
Inflation generally affects the Company by increasing its cost of labor and clinical trial costs. The Company does not believe that inflation had a material effect on its results of operations for the three months ended September 30, 2010 or 2009.
Currency fluctuations could affect the Company by increasing or decreasing costs mainly for goods and services acquired in Israel. The Company does not believe currency fluctuations had a material effect on its results of operations for the three month periods ended September 30, 2010 or 2009.
The Company had no off-balance sheet arrangements as of September 30, 2010.
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ITEM 3. | Quantitative and Qualitative Disclosures About Market Risk |
Not required for smaller reporting companies as defined in Rule 12b-2 of the Exchange Act.
ITEM 4. | Controls and Procedures |
Evaluation of Disclosure Controls and Procedures
We maintain a system of disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) that is designed to provide reasonable assurance that information we are required to disclose in the reports we file or submit under the Exchange Act is accumulated and communicated to management in a timely manner. Our Chief Executive Officer and Chief Financial Officer evaluated this system of disclosure controls and procedures as of the end of the period covered by this quarterly report and, based on that evaluation, have concluded that the system was operating effectively as of such date to ensure appropriate disclosure.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 of the Exchange Act that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II | OTHER INFORMATION |
ITEM 1. | Legal Proceedings. |
None.
ITEM 1A | Risk Factors |
There have been no material changes in our risk factors since the filing of our Annual Report on Form 10-K for the year ended December 31, 2009.
ITEM 2. | Unregistered Sales of Equity Securities and Use of Proceeds. |
None.
ITEM 3. | Defaults Upon Senior Securities. |
None.
ITEM 4. | (Removed and Reserved). |
ITEM 5. | Other Information. |
None.
ITEM 6. | Exhibits. |
31.1 | Certification of Chief Executive Officer pursuant to Item 601(b)(31) of Regulation S-K (Filed herewith). |
31.2 | Certification of Principal Financial Officer pursuant to Item 601(b)(31) of Regulation S-K (Filed herewith). |
32.1 | Certification of Chief Executive Officer pursuant to Item 601(b)(32) of Regulation S-K (Filed herewith). |
32.2 | Certification of Principal Financial Officer pursuant to Item 601(b)(32) of Regulation S-K (Filed herewith). |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
PROLOR BIOTECH, INC. | |||
November 12, 2010 | |||
Date | /s/ Abraham Havron | ||
Abraham Havron | |||
Chief Executive Officer | |||
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