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SHARE CAPITAL AND STOCK OPTIONS
 12 Months Ended
Jun. 30, 2012
SHARE CAPITAL AND STOCK OPTIONS [Abstract]  
SHARE CAPITAL AND STOCK OPTIONS
NOTE 9: - SHARE CAPITAL AND STOCK OPTIONS

a.
The Company's authorized common stock consists of 100,000,000 shares with a par value of $0.00001 per share. All shares have equal voting rights and are entitled to one vote per share in all matters to be voted upon by stockholders. The shares have no pre-emptive, subscription, conversion or redemption rights and may be issued only as fully paid and non-assessable shares. Holders of the common stock are entitled to equal ratable rights to dividends and distributions with respect to the common stock, as may be declared by the Board of Directors out of funds legally available.

The Company's authorized preferred stock consists of 10,000,000 shares of preferred stock, par value $0.00001 per share, with series, rights, preferences, privileges and restrictions as may be designated from time to time by the Company's Board of Directors. No shares of preferred stock have been issued.

b.
In the May 2007 Agreement, there is a provision that requires the Company for a period of four years (subject to acceleration under certain circumstances) not to sell any of the Company's common stock for less than $0.0125 per share (pre-split price). The May 2007 Agreement provides that any sale below that price must be preceded by consent from each purchaser in the placement.

Since that date, the Company had effected a one-for-200 reverse stock split. The Company decided to proceed and enter into additional security purchase agreements notwithstanding this provision for the following reasons:
·
The agreement does not contain any provisions for the adjustment of the specified minimum price in the event of stock splits and the like. If such agreement were to have contained such a provision, the floor price would be $2.50.


·
The majority of purchasers in the private placement have sold the stock purchased in the placement, and thus the number of purchasers whose consent is purportedly required has been substantially reduced. The number of shares outstanding as to which this provision currently applies according the information supplied by transfer agent is approximately 2 million shares.


·
An agreement that prevents the Company's Board of Directors from issuing shares that are necessary to finance the Company's business may be unenforceable.

It is unclear what could be the consequences of a court decision that the issuance of shares below $2.50 per share violates the May 2007 Agreement.

In connection therewith, the Company approved the issuance of warrants to purchase up to 161,724 shares of its common stock to each of the investors who was a party to the May 2007 Agreement that held shares purchased pursuant to such agreement, as of August 6, 2008, conditioned on having the investors execute a general release pursuant to which the Company will be released from liability including, but not limited to, any claims, demands, or causes of action arising out of, relating to, or regarding sales of certain equity securities notwithstanding the above mentioned provision. The Company received a general release from some of the investors, and issued them warrants to purchase 105,583 shares of its common stock. On November 9, 2010, all of such warrants expired unexercised.

c.
On July 7, 2009, the Company announced that the first patient has been enrolled in a Phase I clinical trial of its PLX-PAD product. Upon the occurrence of such event, certain investors had an option from prior agreements from November 2008 through January 2009 to purchase additional shares and warrants. Accordingly, certain investors purchased in July 2009, 1,058,708 shares of common stock at a purchase price of $0.75 per share, for an aggregate purchase price of $794, and warrants to purchase up to an additional 1,058,708 shares of common stock with an exercise price of $1.50 per share. The warrants are exercisable for a period of 4 years and six months commencing six months following the issuance.

d.
On October 12, 2009, certain institutional investors purchased 2,702,822 shares of the Company's common stock and warrants to purchase 1,081,129 shares of common stock. The price per share of common stock was $1.12, and the exercise price of the warrants was $1.60 per share. The warrants will be exercisable for a period of five years commencing six months following the issuance thereof. The gross proceeds received from this offering were approximately $3,027. Total cash costs related to this placement amounted to $242.

e.
On April 27, 2010, the Company closed a private placement pursuant to which it sold to certain investors 2,393,329 shares of common stock and warrants to purchase 717,999 shares of common stock and 717,999 shares of common stock, at exercise prices per share of $1.25 (the "$1.25 Warrants") and $1.40 (the "$1.40 Warrants"), respectively. The price per share of common stock was $1.12. The aggregate gross proceeds from the sale of the common stock and the warrants were $2,681. The warrants are exercisable six months following the issuance thereof, for a period of two and a half years and five years thereafter for the $1.25 Warrants and the $1.40 Warrants, respectively.

The Company paid a transaction fee to finders in an amount of $54 in cash and issued them warrants exercisable at an exercise price of $1.12 per share to purchase 146,144 shares of the Company's common stock.

f.
During the year ended June 30, 2010, the Company issued 45,053 shares of common stock to its investor relations consultants as compensation for their services.

g.
On October 18, 2010, the Company closed a private placement, pursuant to which the Company sold 4,375,000 shares of the Company's common stock at a price of $1.20 per share and warrants to purchase 2,625,000 shares of common Stock, at an exercise price per share of $1.80. No separate consideration was paid for the warrants. The warrants have a term of four years and are exercisable starting six months following the issuance thereof. The aggregate gross proceeds from the sale of the shares and the warrants were $5,250.

The Company paid a transaction fee to finders in an amount of $244 in cash and issued them warrants to purchase 151,050 shares of the Company's common stock.

 
In connection with the purchase agreements, the Company agreed to file a resale registration statement with the Securities and Exchange Commission covering the shares and the shares of common stock issuable upon the exercise of the warrants within 60 days from closing. The registration statement was filed and on December 10, 2010 it became effective.

h.
On February 1, 2011, the Company closed a firm commitment underwritten public offering of 11,000,000 units, with each unit consisting of one share of the Company's common stock and one warrant to purchase 0.4 shares of common stock, at a purchase price of $3.25 per unit. The warrants sold in the offering will be exercisable for a period of five years commencing six months following issuance, at an exercise price of $4.20 per share. Also, on February 1, 2011 the Company closed the exercise by the underwriters of their full overallotment option to purchase an additional 1,650,000 shares of common stock and warrants to purchase 660,000 shares of common stock. The aggregate net proceeds to the Company were $38,142, after deducting underwriting commissions and discounts and expenses payable by the Company associated with the offering.

i.
During the year ended June 30, 2011, the Company issued 90,000 shares of common stock to its investor relations consultants as compensation for their services.

j.
In January-June 2011, a total of 769,391 warrants were exercised via a "cashless" manner, resulting in the issuance of 362,746 shares of common stock to investors of the Company. In addition 2,079,968 warrants were exercised and resulted in the issuance of 2,079,968 shares of common stock by investors of the Company. The aggregate cash consideration received was $3,593.

k.
From July 2011 through June 2012, a total of 406,783 warrants were exercised via a "cashless" exercise, resulting in the issuance of 168,424 shares of common stock to investors of the Company. In addition 355,411 warrants were exercised for cash and resulted in the issuance of 355,411 shares of common stock to investors of the Company. The aggregate cash consideration received was $556.

l.
On October 26, 2011, the Company issued 500,000 shares of common stock as a payment to Biopharmax Group Ltd as part of the agreement for building the new Company's facility. On May 28, 2011, the shares were sold to Biopharmax Group Ltd and deducted from its payable balance, in the amount of $1,272.

m.
On May 9, 2012, the Company issued 1,000,000 shares as an advance payment to Biopharmax Group Ltd as part of the agreement for building the new Company's facility. As of June 30, 2012, the shares were not sold. As of June 30, 2012 the value of the shares of $2,400 was recorded in the Company balance sheet as an advanced payment asset.

n.
Options, warrants, restricted stock and restricted stock units to employees, directors and consultants:

The Company has approved two incentive option plans from 2003 and from 2005 (the "2003 Plan" and the "2005 Plan", and collectively, the "Plans"). Under these Plans, options, restricted stock and restricted stock units (the "Awards") may be granted to the Company's officers, directors, employees and consultants. Any Awards that are cancelled or forfeited before expiration become available for future grants.

As of June 30, 2012, the number of shares of common stock authorized for issuance under the 2005 Plan amounted to 10,353,355. 808,134 shares are still available for future grant under the 2005 Plan as of June 30, 2012. Under the 2003 Plan, 20,500 options are authorized for issuance, and 15,296 options are still available for future grant as of June 30, 2012.

a.
Options to employees and directors:

The Company accounted for its options to employees and directors under the fair value method in accordance with ASC 718. A summary of the Company's share option activity for options granted to employees and directors under the Plans is as follows:

 
Year ended June 30, 2012
 
Number

Weighted Average Exercise Price

Weighted Average Remaining Contractual Terms (in years)

Aggregate Intrinsic Value Price
Options outstanding at beginning of period

2,200,616

$ 3.84






Options exercised

(19,800 )

0.66






Options forfeited

(98,644 )

3.95






Options outstanding at end of the period

2,082,172

$ 3.87


4.87

$ 928
Options exercisable at the end of the period

2,082,172

$ 3.87


4.87

$ 928
Options vested

2,082,172

$ 3.87


4.87

$ 928

Intrinsic value of exercisable options (the difference between the Company's closing stock price on the last trading day in the period and the exercise price, multiplied by the number of in-the-money options) represents the amount that would have been received by the employees and directors option holders had all option holders exercised their options on June 30, 2012. This amount changes based on the fair market value of the Company's common stock.

Compensation expenses related to options granted to employees and directors were recorded as follows:

 
Year ended June 30,
 
2012

2011

2010
Research and development expenses
$ -

$ 2

$ 73
General and administrative expenses

-


2


138
 
$ -

$ 4

$ 211


b.
Options and warrants to non-employees:

A summary of the Company's activity related to options and warrants to consultants is as follows:

 
Year ended June 30, 2012
 
Number

Weighted Average Exercise Price

Weighted Average Remaining Contractual Terms (in years)

Aggregate Intrinsic Value Price
Options and warrants outstanding at beginning of period

425,000

$ 3.65






Options and warrants granted

12,000


0






Options and warrants exercised

(55,000 )

1.37






Options and warrants outstanding at end of the period

382,000

$ 3.86


4.59

$ 396
 















Options and warrants exercisable at the end of the period

367,000

$ 4.02


4.40

$ 360
 















Options and warrants vested

382,000

$ 3.86


4.59

$ 396

Compensation expenses related to options and warrants granted to consultants were recorded as follows:

 
Year ended June 30,
 
2012

2011

2010
Research and development expenses
$ 19

$ 32

$ 90
General and administrative expenses

37


73


71
 
$ 56

$ 105

$ 161

Future expenses related to options and warrants granted to consultants for an average time of almost year and a half is $17.

c.
Restricted stock and restricted stock units to employees and directors:

On December 21, 2011, the Company's Compensation Committee approved a grant of a total of 1,547,250 restricted stock units to the Company's employees and directors.

On May 8, 2012, the Company's Compensation Committee approved a grant of a total of 282,000 restricted stock units to the Company's employees.

In addition, the Company granted total of 32,388 restricted stock units to several employees during the year ended June 30, 2012.

The following table summarizes the activities for unvested restricted stock units and restricted stock granted to employees and directors for the year ended June 30, 2012:

 
Number
Unvested at the beginning of period

2,138,955
Granted

1,861,638
Forfeited

(146,517 )
Vested

(1,768,800 )
Unvested at the end of the period

2,085,276
Expected to vest after June 30, 2012

2,043,133

Compensation expenses related to restricted stock and restricted stock units granted to employees and directors were recorded as follows:

 
Year ended June 30,
 
 
2012

2011

2010
Research and development expenses
$ 1,163

$ 1,027

$ 582
General and administrative expenses

3,487


1,717


775
 
$ 4,650

$ 2,744

$ 1,357

 
Future expenses related to restricted stock and restricted stock units granted to employees and directors for an average time of almost two years is $2,468.

d.
Restricted stock and restricted stock units to consultants:

During the year ended June 30, 2012, the Company granted restricted stock to several consultants and service providers.

The following table summarizes the activities for unvested restricted stock units and restricted stock granted to consultants for the year ended June 30, 2012:

 
Number
Unvested at the beginning of period

149,998
Granted

53,433
Vested

(137,431 )
Unvested at the end of the period

66,000
Expected to vest after June 30, 2012

66,000

Compensation expenses related to restricted stock and restricted stock units granted to consultants were recorded as follows:

 
Year ended June 30,
 
2012

2011

2010
Research and development expenses
$ 201

$ 294

$
40
General and administrative expenses

20


178


50
 
$ 221

$ 472

$
90

Future expenses related to restricted stock and restricted stock units granted to consultants for an average time of almost two years is $84.

o.
Summary of warrants and options:

A summary of all the warrants and options outstanding as of June 30, 2012 is presented in this table:


Warrants / Options
Exercise Price per Share

Options and Warrants for Common Stock

Options and Warrants Exercisable

Weighted Average Remaining Contractual Terms(in years)
Warrants:
$ 1.00


2,002,245


2,002,245


1.41
 
$ 1.20


6,250


6,250


0.30
 
$ 1.25 - 1.28


687,072


687,072


0.51
 
$ 1.40 - $ 1.50


1,768,040


1,768,040


2.33
 
$ 1.60


181,221


181,221


2.78
 
$ 1.80 - $ 1.91


3,538,240


3,538,240


2.00
 
$ 2.50


12,900


12,900


0.47
 
$ 4.20


5,060,000


5,060,000


4.09
 
$ 5.00


495,000


495,000


0.43
Total warrants





13,750,968


13,750,968




 















Options:
$ 0.00


110,000


95,000


7.51
 
$ 0.62


471,612


471,612


6.02
 
$ 1.04-$ 1.45


86,956


86,956


3.67
 
$ 2.97


20,000


20,000


5.86
 
$ 3.50


920,000


920,000


4.49
 
$ 3.72 - $ 3.80


31,550


31,550


4.44
 
$ 4.00


42,500


42,500


4.30
 
$ 4.38 - $ 4.40


456,804


456,804


4.93
 
$ 6.80


36,250


36,250


5.37
 
$ 8.20


40,000


40,000


3.63
 
$ 20.00


142,500


142,500


3.98
Total options





2,358,172


2,343,172




 















Total warrants and options


16,109,140


16,094,140





This summary does not include 2,151,276 restricted stock units that are not vested as of June 30, 2012.