XML 44 R14.htm IDEA: XBRL DOCUMENT
v2.4.0.6

SHARE CAPITAL | 12 Months Ended
--- | ---
Dec. 31, 2011
SHARE CAPITAL | NOTE 7 - SHARE CAPITAL
| a. | Rights of the Company’s Common Stock
The Company’s common stock is listed on the NYSE Amex and, since September 6, 2010, on the Tel Aviv Stock Exchange. Each share of Common Stock is entitled to one vote. The holders of shares of Common Stock are also entitled to receive dividends whenever funds are legally available, when and if declared by the Board of Directors. Since its inception, the Company has not declared any dividends.
| b. | Stock based compensation
On December 14, 2006, the Board of Directors adopted the Protalix BioTherapeutics, Inc. 2006 Stock Incentive Plan (the “Plan”). The grant of options to Israeli employees under the Plan is subject to the terms stipulated by Sections 102 and 102A of the Israeli Income Tax Ordinance. Each option grant is subject to the track chosen by the Company, either Section 102 or Section 102A of the Israeli Income Tax Ordinance, and pursuant to the terms thereof, the Company is not allowed to claim, as an expense for tax purposes, the amounts credited to employees as a benefit, including amounts recorded as salary benefits in the Company’s accounts, in respect of options granted to employees under the Plan, with the exception of the work-income benefit component, if any, determined on the grant date. For Israeli non-employees, the share option plan is subject to Section 3(i) of the Israeli Income Tax Ordinance. As of December 31, 2011, 47,920 shares of Common Stock remain available for grant under the Plan. For purposes of determining the fair value of the options granted to employees and non-employees, the Company’s management uses the fair value of the Common Stock. From January 1, 2009 through December 31, 2011, the Company granted options to certain employees and non-employees as follows:
| 1. | Options granted to employees:
| a) | Below is a table summarizing all of the option grants to employees for each of the three years in the period ended December 31, 2011:
Year of Grant |  |  | No. of options granted |  |  | Exercise price range |  |  | Vesting period |  | Fair value at grant |  |  | Expiration Period |
2009* |  |  |  | 504,000 |  |  | $ | 2.65 |  |  | Upon achievement of certain milestones* |  | $ | 1,068 |  |  |  | 10 years |
2009 |  |  |  | 120,400 |  |  | $ | 2.65 |  |  | 4 years |  | $ | 212 |  |  |  | 10 years |
2010 |  |  |  | 1,016,000 |  |  | $ | 6.90 |  |  | 3 years commencing upon achievement of a certain milestone |  | $ | 5,673 |  |  |  | 10 years |
2010 |  |  |  | 428,000 |  |  | $ | 6.32-$9.66 |  |  | 4 years |  | $ | 2,147 |  |  |  | 10 years |
|  |  |  |  | 2,068,400 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
* The milestone was achieved as of December 31, 2009 and the options vested in full. Set forth below are grants made by the Company to employees (including related parties) during the three-year period ended December 31, 2011 (such grants appear in the table above):
| 1. | In February, 2009, the Company’s Board of Directors approved the grant of options to purchase 624,400 shares of Common Stock to the Company’s Chief Executive Officer and certain officers and employees of the Company with an exercise price equal to $2.65 per share. The options vest as follows:
(i) 504,000 of the options vest immediately upon the achievement of certain clinical and operational performance milestones, which milestones must be achieved within one year of the date of grant or the options will be forfeited. The options expire within a period of 10 years from the date of grant. The vesting conditions of these options were satisfied prior to December 31, 2009. Accordingly, these options were fully vested at December 31, 2009 and the Company recognized all of the expenses for these options during 2009. (ii) 120,400 of the options vest as follows: 25% within one year from the date of grant, with the remainder vesting in 12 equal quarterly tranches over 36 months. The options expire within a period of 10 years from the date of grant. The Company’s management assumed the simplified method to reflect the expected life regarding these options. The Company used the simplified method in 2009 as the Company did not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term due to the limited period of time its equity shares have been publicly traded.
| 2. | In February 2010, the Company’s Board of Directors approved the grant of options to purchase 1,016,000 shares of Common Stock, in the aggregate, to the Company’s Chief Executive Officer and certain officers and employees of the Company with an exercise price equal to $6.90 per share. The options vest quarterly over a three-year period commencing upon the FDA’s approval of taliglucerase alfa, if at all. The Company treated the awards as performance-based awards and, given that the performance condition is outside the Company's control, concluded that the performance condition was not probable until the performance condition actually occurs. As a result, no share-based compensation expense was recognized as of December 31, 2011. The Company will start recording these expenses following the FDA’s marketing approval of taliglucerase alfa, if at all.
| 3. | In February 2010, the Company’s Board of Directors approved the grant of options to purchase 160,000 shares of Common Stock with an exercise price equal to $6.81 per share to a new executive officer of the Company. The options expire on the tenth anniversary of the date of grant, unless terminated earlier. The first 25% of the options vest on the first anniversary of the date of grant and the remaining 75% vest in 12 equal tranches on a quarterly basis for three years thereafter.
| 4. | In September 2010, the Company’s Board of Directors approved the grant of options to purchase 160,000 shares of Common Stock to a new executive officer of the Company with an exercise price equal to $7.55 per share and options to purchase 40,000 shares of Common Stock to a new employee of the Company with an exercise price equal to $6.32 per share. The options vest over a four-year period, with the first 25% vesting on the first anniversary of the applicable date of the grant and the remaining 75% vesting in equal tranches on a quarterly basis for a three-year period thereafter. The options expire on the tenth anniversary of the date of grant, unless terminated earlier.
| 5. | In November 2010, the Company’s Board of Directors approved the grant of options to purchase 68,000 shares of Common Stock to a new officer of the Company with an exercise price equal to $9.66 per share. The options vest over a four-year period, with the first 25% vesting on the first anniversary of the applicable date of the grant and the remaining 75% vesting in equal tranches on a quarterly basis for a three-year period thereafter. The options expire on the tenth anniversary of the date of grant, unless terminated earlier.
| 6. | In September 2010, the Company’s Board of Directors modified the terms of the options previously granted to an executive in 2001, by extending the life of the options until 2016. At the date of modification, all of the options were fully vested. The Company concluded that there was no incremental increase in the value of the awards and therefore no accounting charges need to be recorded in connection with the modifications.
| b) | The fair value of options granted during the years ended December 31, 2009 and 2010 were $1,280 and $7,820 respectively. The fair value of each option granted is estimated on the date of grant using the Black-Scholes option-pricing model, with the following weighted average assumptions:
|  | 2009 |  |  | 2010 |
Dividend yield |  |  | 0% |  |  |  | 0% |
Expected volatility |  |  | 75% |  |  |  | 75% |
Risk-free interest rate |  |  | 2.74% |  |  |  | 3.23% |
Expected life – in years |  |  | 9.2 |  |  |  | 8.8 |
The expected volatility is based on the historical volatility of the Common Stock and those of comparable companies. The risk-free interest rate assumption is based on observed interest rates appropriate for the expected term of the stock options granted in dollar terms. The Company’s management uses the contractual term or its expectations, based on historical incidence of option exercises, as applicable (during 2009 - using the simplified method), of each option as its expected life. The pre-vesting forfeiture rate of approximately 6.3% is estimated based on pre-vesting forfeiture experience. The total unrecognized compensation cost of employee stock options at December 31, 2011 is $6,218 (net of forfeiture rate) out of which $5,639 is expected to be recognized over a three-year period commencing upon the FDA’s approval of taliglucerase alfa, if at all. The remaining compensation cost of $579 is expected to be recognized over a weighted average period of 0.9 years. The total cash received from employees as a result of employee stock option exercises for the years ended December 31, 2009, 2010 and 2011 was $293, $501 and $277, respectively. The Company did not realize any tax benefit in connection with these exercises. During 2011, the Company issued 181,685 shares of Common Stock in connection with the exercise of 182,093 options by certain employees of the Company. The Company received cash proceeds equal to $268 in connection with such exercises. Of such options, 2,132 options were exercised on a “net-exercise” basis.
| 2. | Options granted to consultants, directors, and other service providers:
As of December 31, 2011, the Company has recognized and recorded all compensation costs related to outstanding options for consultants, directors and other services providers. No cash was received from consultants as a result of consultant stock option exercises for the years ended December 31, 2009, 2010, and $0.2 was received in 2011. The Company did not realize any tax benefits in connection with these exercises. During 2009, the Company issued 3,853,441 shares of Common Stock in connection with the exercise of 3,866,093 options by certain consultants, directors, and other service providers of the Company. The Company did not receive cash proceeds in connection with such exercises as all of such options were exercised on a “net-exercise” basis. During 2011, the Company issued 200,000 shares of Common Stock in connection with the exercise of 200,000 options by certain consultant of the Company. The Company received cash proceeds equal to $0.2 in connection with such exercise.
| 3. | A summary of share option plans, and related information, under all of the Company’s equity incentive plans for the years ended December 31, 2009, 2010 and 2011 are as follows:
| a. | Options granted to employees:
|  | Year ended December 31, |
|  | 2009 |  |  | 2010 |  |  | 2011 |
|  |  |  |  | Weighted |  |  |  |  |  | Weighted |  |  |  |  |  | Weighted |
|  | Number |  |  | average |  |  | Number |  |  | average |  |  | Number |  |  | average |
|  | of |  |  | exercise |  |  | of |  |  | exercise |  |  | of |  |  | exercise |
|  | options |  |  | price |  |  | options |  |  | price |  |  | options |  |  | price |
Outstanding at beginning of year |  |  | 5,890,641 |  |  | $ | 2.118 |  |  |  | 5,366,729 |  |  | $ | 2.476 |  |  |  | 6,367,979 |  |  | $ | 3.576 |
Changes during the year: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Granted |  |  | 624,400 |  |  |  | 2.650 |  |  |  | 1,444,000 |  |  |  | 7.076 |  |  |  |  |  |  |  |  |
Forfeited and Expired |  |  | 1,400 |  |  |  | 2.650 |  |  |  | 13,441 |  |  |  | 3.551 |  |  |  | 44,856 |  |  |  | 6.207 |
Exercised (*) |  |  | 1,146,912 |  |  |  | 0.733 |  |  |  | 429,309 |  |  |  | 1.602 |  |  |  | 182,093 |  |  |  | 1.652 |
Outstanding at end of year |  |  | 5,366,729 |  |  | $ | 2.476 |  |  |  | 6,367,979 |  |  | $ | 3.576 |  |  |  | 6,141,030 |  |  | $ | 3.563 |
Exercisable at end of year |  |  | 3,680,382 |  |  | $ | 1.785 |  |  |  | 4,267,850 |  |  | $ | 2.183 |  |  |  | 4,647,834 |  |  | $ | 2.581 |
(*) The total intrinsic value of options exercised during the years ended December 31, 2009, 2010 and 2011, was $7,258, $3,050 and $1,252, respectively.
| b. | Options granted to consultants, directors, and other service providers:
|  | Year ended December 31, |
|  | 2009 |  |  | 2010 |  |  | 2011 |
|  |  |  |  | Weighted |  |  |  |  |  | Weighted |  |  |  |  |  | Weighted |
|  | Number |  |  | average |  |  | Number |  |  | average |  |  | Number |  |  | average |
|  | of |  |  | exercise |  |  | of |  |  | exercise |  |  | of |  |  | exercise |
|  | options |  |  | price |  |  | options |  |  | price |  |  | options |  |  | price |
Outstanding at beginning of year |  |  | 5,304,785 |  |  | $ | 1.285 |  |  |  | 1,438,692 |  |  | $ | 4.697 |  |  |  | 1,438,692 |  |  | $ | 4.697 |
Changes during the year-Exercised (*) |  |  | 3,866,093 |  |  |  | 0.016 |  |  |  |  |  |  |  |  |  |  |  | 200,000 |  |  |  | 0.001 |
Outstanding at end of year |  |  | 1,438,692 |  |  | $ | 4.697 |  |  |  | 1,438,692 |  |  | $ | 4.697 |  |  |  | 1,238,692 |  |  | $ | 5.385 |
Exercisable at end of year |  |  | 1,407,234 |  |  | $ | 4.674 |  |  |  | 1,421,734 |  |  | $ | 4.653 |  |  |  | 1,235,567 |  |  | $ | 5.385 |
| (*) | The total intrinsic value of options exercised during the years ended December 31, 2009, 2010 and 2011, was $41,281, $0 and $1,886, respectively.
| c. | The following tables summarize information concerning outstanding and exercisable options as of December 31, 2011:
December 31, 2011 |
Options outstanding |  | Options exercisable |
|  |  | Number of |  |  | Weighted |  | Number of |  |  | Weighted |
|  |  | options |  |  | average |  | options |  |  | average |
|  |  | outstanding |  |  | remaining |  | exercisable |  |  | remaining |
Exercise |  |  | at end of |  |  | contractual |  | at end of |  |  | contractual |
prices |  |  | year |  |  | life |  | year |  |  | life |
$ | 0.001 |  |  |  | 719,207 |  |  | 3.54 |  |  | 719,207 |  |  |  | 3.54 |
$ | 0.120 |  |  |  | 987,356 |  |  | 2.30 |  |  | 987,356 |  |  |  | 2.30 |
$ | 0.399 |  |  |  | 26,673 |  |  | 3.35 |  |  | 26,673 |  |  |  | 3.35 |
$ | 0.972 |  |  |  | 1,325,988 |  |  | 4.47 |  |  | 1,325,988 |  |  |  | 4.47 |
$ | 2.350 |  |  |  | 160,000 |  |  | 6.82 |  |  | 120,000 |  |  |  | 6.82 |
$ | 2.650 |  |  |  | 604,956 |  |  | 7.15 |  |  | 573,550 |  |  |  | 7.15 |
$ | 3.020 |  |  |  | 50,000 |  |  | 6.10 |  |  | 46,875 |  |  |  | 6.10 |
$ | 5.000 |  |  |  | 1,720,000 |  |  | 6.10 |  |  | 1,559,210 |  |  |  | 6.10 |
$ | 6.810 |  |  |  | 160,000 |  |  | 8.10 |  |  | 70,000 |  |  |  | 8.10 |
$ | 6.900 |  |  |  | 1,010,000 |  |  | 8.15 |  |  |  |  |  |  |  |
$ | 7.550 |  |  |  | 160,000 |  |  | 8.66 |  |  | 50,000 |  |  |  | 8.66 |
$ | 9.660 |  |  |  | 68,000 |  |  | 8.84 |  |  | 17,000 |  |  |  | 8.84 |
$ | 16.700 |  |  |  | 387,542 |  |  | 5.00 |  |  | 387,542 |  |  |  | 5.00 |
|  |  |  |  | 7,379,722 |  |  |  |  |  | 5,883,401 |  |  |  |  |
The aggregate intrinsic value of the total outstanding and of total vested and exercisable options as of December 31, 2011 is $15,551 and $15,371, respectively.
| d. | The following table illustrates the effect of share-based compensation on the statement of operations:
|  | Year ended December 31, |
|  | 2009 |  |  | 2010 |  |  | 2011 |
Research and development expenses |  | $ | 1,489 |  |  | $ | 630 |  |  | $ | 422 |
General and administrative expenses |  |  | 1,194 |  |  |  | 652 |  |  |  | 464 |
|  | $ | 2,683 |  |  | $ | 1,282 |  |  | $ | 886 |
| c. | Public Offering
On March 23, 2011, the Company issued and sold 4,000,000 shares of Common Stock in an underwritten public offering at a price to the public of $5.50 per share. The net proceeds to the Company were approximately $20,590 (net of underwriting commissions and issuance costs of $1,410). In February 2012, the Company issued and sold 5,175,000 shares of Common Stock. See Note 11b.

X
- Definition The entire disclosure for shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Including, but not limited to: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms, and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables, effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 04 -Article 3 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 29, 30, 31 -Article 5 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB TOPIC 4.E) -URI http://asc.fasb.org/extlink&oid=6228006&loc=d3e74512-122707 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21484-112644 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section S99 -Paragraph 4 -Subparagraph (SAB TOPIC 4.C) -URI http://asc.fasb.org/extlink&oid=6959260&loc=d3e187143-122770 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 129 -Paragraph 2, 3, 4, 5, 6, 7, 8 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Glossary Preferred Stock -URI http://asc.fasb.org/extlink&oid=6521494 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 5 -Paragraph 15 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Article 4 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.3-04) -URI http://asc.fasb.org/extlink&oid=6959260&loc=d3e187085-122770 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 4 -Section C Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21488-112644 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.29-31) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Article 4 -Section 08 -Paragraph d Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 4 -Section E Reference 16: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6405834&loc=d3e23285-112656 Reference 17: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 18: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(d),(e)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 Reference 19: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Accounting Research Bulletin (ARB) -Number 43 -Chapter 1 -Section B -Paragraph 7, 11A -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 20: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21463-112644 Reference 21: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Accounting Principles Board Opinion (APB) -Number 12 -Paragraph 10 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 22: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21506-112644 Reference 23: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21564-112644 + Details
Name: | us-gaap_StockholdersEquityNoteDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration