Attached files

file filename
EXCEL - IDEA: XBRL DOCUMENT - MABCURE INC.Financial_Report.xls
XML - IDEA: XBRL DOCUMENT - MABCURE INC.R2.htm
XML - IDEA: XBRL DOCUMENT - MABCURE INC.R7.htm
XML - IDEA: XBRL DOCUMENT - MABCURE INC.R1.htm
XML - IDEA: XBRL DOCUMENT - MABCURE INC.R9.htm
XML - IDEA: XBRL DOCUMENT - MABCURE INC.R3.htm
XML - IDEA: XBRL DOCUMENT - MABCURE INC.R5.htm
XML - IDEA: XBRL DOCUMENT - MABCURE INC.R8.htm
XML - IDEA: XBRL DOCUMENT - MABCURE INC.R4.htm
XML - IDEA: XBRL DOCUMENT - MABCURE INC.R16.htm
XML - IDEA: XBRL DOCUMENT - MABCURE INC.R15.htm
XML - IDEA: XBRL DOCUMENT - MABCURE INC.R12.htm
XML - IDEA: XBRL DOCUMENT - MABCURE INC.R10.htm
XML - IDEA: XBRL DOCUMENT - MABCURE INC.R11.htm
XML - IDEA: XBRL DOCUMENT - MABCURE INC.R14.htm
XML - IDEA: XBRL DOCUMENT - MABCURE INC.R13.htm
EX-31.2 - CERTIFICATION - MABCURE INC.exhibit31-2.htm
EX-32.1 - CERTIFICATION - MABCURE INC.exhibit32-1.htm
EX-31.1 - CERTIFICATION - MABCURE INC.exhibit31-1.htm
EX-32.2 - CERTIFICATION - MABCURE INC.exhibit32-2.htm
EX-10.13 - MANAGEMENT SERVICES AGREEMENT - MABCURE INC.exhibit10-13.htm
XML - IDEA: XBRL DOCUMENT - MABCURE INC.R6.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2011

or

[   ] 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 333-141131

 
MABCURE INC.
(Exact name of Registrant as specified in its charter)

Nevada 20-4907813
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)  
   
228 Park Ave S #15740  
New York, New York 10003
(Address of principal executive offices) (Zip Code)

(845) 591-3144
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

N/A N/A
Title of each class Name of each exchange on which registered

Securities registered pursuant to Section 12(g) of the Act:

Shares of Common Stock, $0.001 par value
Title of Class

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes [   ]     No [X]

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes [   ]     No [X]


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 [   ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]

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.

Large accelerated filer [   ]        Accelerated filer [   ]        Non-accelerated filer [   ]        smaller reporting company [X]

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes [   ]     No [X]

The aggregate market value of voting and non-voting common equity held by non-affiliates was $7,109,498 based upon 32,315,902 shares held by non-affiliates and a closing market price of $0.22 per share on June 30, 2011.

As of March 31, 2012, there were 64,363,902 shares of common stock issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Exhibits incorporated by reference are referred to in Part IV.


TABLE OF CONTENTS

    Page
FORM 10-K   1
PART I   2
ITEM 1. BUSINESS 3
ITEM 2. PROPERTIES 11
ITEM 3. LEGAL PROCEEDINGS 11
ITEM 4. MINE SAFETY DISCLOSURES 12
PART II   12
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 12
ITEM 6. SELECTED FINANCIAL DATA 13
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 14
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA F-1
ITEM 9A. CONTROLS AND PROCEDURES 19
ITEM 9B. OTHER INFORMATION 20
PART III   21
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 21
ITEM 11. EXECUTIVE COMPENSATION 23
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 26
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. 27
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 28
PART IV   29
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES 29
SIGNATURES   31

1


Forward-Looking Statements

This Annual Report contains forward-looking statements within the meaning of 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”). These forward-looking statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” or the negative of these terms or other comparable terminology. These forward-looking statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks set out in the section hereof entitled “Risk Factors” and the risks set out below, any of which may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

These risks include, by way of example and not in limitation:

  • risks related to our ability to continue as a going concern;
  • the uncertainty of profitability based upon our history of losses;
  • risks related to failure to obtain adequate financing on a timely basis and on acceptable terms for our planned development projects;
  • risks related to our ability to acquire blood samples for the development and testing of our products;
  • risks related to our ability to continue to fund research and development costs;
  • risks related to conducting business internationally due to our operations in Belgium;
  • risks related to receiving approvals from the United States Food and Drug Administration (the “FDA”) to market our products;
  • risks related to our ability to successfully develop our technology into commercial products,
  • risks related to our ability to successfully prosecute and protect our intellectual property;
  • risks related to environmental, health and safety rules and regulations;
  • risks related to tax assessments;
  • risks related to the impact of any healthcare reform legislation; and
  • other risks and uncertainties related to our prospects, properties, and business strategy.

The above list is not an exhaustive list of the factors that may affect any of our forward-looking statements. These and other risks described in this Annual Report should be considered carefully and readers should not place undue reliance on our forward-looking statements.

Forward-looking statements are made based on management’s beliefs, estimates and opinions on the date the forward-looking statements are made, and we undertake no obligation to update forward-looking statements should these beliefs, estimates, and opinions or other circumstances change. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these forward-looking statements to actual results.

Our consolidated financial statements are stated in United States dollars (“US$”) and are prepared in accordance with United States generally accepted accounting principles (“GAAP”).

In this Annual Report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to "common stock" refer to the shares of our common stock.

As used in this Annual Report, the terms "we," "us," "our," "MabCure," and “Issuer” mean MabCure Inc., and its consolidated subsidiary, unless the context clearly requires otherwise.

2


PART I

ITEM 1.              BUSINESS

Formation and year of organization

We were incorporated on May 8, 2006, in the State of Nevada under the name “Smartec Holdings, Inc.” Our authorized capital at formation consisted of 75,000,000 shares of our common stock (the “Common Shares”) with a par value of $0.001 per common share.

Effective November 26, 2007, we filed a certificate of change increasing our authorized capital from 75,000,000 common shares with a par value of $0.001 per common share to 1,500,000,000 common shares with a par value of $0.001 per common share. On that date, we also effected a forward stock split on a twenty-to-one basis.

On January 22, 2008, we changed our name from “Smartec Holdings, Inc.” to “MabCure Inc.” following the merger with our wholly-owned subsidiary, MabCure, Inc.

On October 30, 2008, we established MabCure, N.V., a wholly-owned subsidiary in Belgium. The Belgian subsidiary was established in order to accelerate the development and commercialization of MabCure’s proprietary products for the early detection of cancer with specific antibodies and for the creation of highly specific therapeutics (antibodies and novel drugs) against cancer.

Our principal executive offices are located in New York at the following address: 228 Park Ave S #15740, New York, NY 1003. Our telephone number is (845) 5913144

Our common shares are traded on the over-the-counter market and quoted on the over-the-counter bulletin board (the “OTCBB”) under the symbol “MBCI.” On March 31, 2012, the closing price for our common shares as reported on the OTCBB was $0.09 per share.

Bankruptcy, Receivership or Similar Proceeding

We have never declared bankruptcy, have never been in receivership, and have never been involved in any legal actions or proceedings.

Purchase of Assets

On January 10, 2008, we entered into an asset purchase agreement with Indigoleaf Associates Ltd. (“Indigoleaf”), and Dr. Amnon Gonenne, pursuant to which we agreed to purchase all of Indigoleaf’s interest and rights to a proprietary technology for the rapid and efficient generation of monoclonal antibodies against desired antigens such as cancer markers, including, but not limited to, the know-how, secrets, inventions, practices, methods, knowledge and data owned by Indigoleaf. We purchased this proprietary technology pursuant to an intellectual property transfer agreement and consummated the other transactions contemplated by the asset purchase agreement on July 7, 2008. Pursuant to the asset purchase agreement, as amended on April 2, 2009, we issued 25,638,400 shares of our common stock to Indigoleaf in consideration for the purchase of Indigoleaf’s proprietary technology, and we issued 6,409,600 shares of common stock to Dr. Gonenne in consideration for being one of the founders of the Company’s cancer therapy and detection business. The shares issued were valued at $16,000,000. The shares issued to Dr. Gonenne were described in error in the asset purchase agreement as having been issued to Dr. Gonenne in consideration for future services that Dr. Gonenne agreed to provide to us, and this error has been corrected in the April 2, 2009 amendment.

On June 27, 2008, pursuant to the asset purchase agreement, we closed a private placement consisting of 1,300,000 units of our securities at a price of $1.00 per unit, for aggregate proceeds of $1,300,000. Each unit consists of: (i) one common share; (ii) one non-transferable share purchase warrant entitling the holder thereof to purchase one share of common stock for a period of 12 months commencing from the closing of the asset purchase agreement, at

3


an exercise price of $1.25 per common share; and (iii) one non-transferable share purchase warrant entitling the holder thereof to purchase one share of common stock for a period of 24 months commencing from the closing of the asset purchase agreement, at an exercise price of $1.25 per common share (“Two-Year Warrants”). The terms of the Two-Year Warrants were subsequently amended as discussed further below.

On April 2, 2009, we entered into an amendment to the asset purchase agreement dated January 10, 2008, whereby the parties specified their original intention that the 6,409,600 shares of our common stock that were issued to Dr. Gonenne were, in fact, issued to Dr. Gonenne as founder’s shares as consideration for being one of the founders of our cancer therapy and detection business. Pursuant to the amendment to the asset purchase agreement, up to 75 percent of the shares issued to Dr. Gonenne, i.e., up to 4,807,200 shares of our common stock were subject to a lapsing repurchase right by us in the event Dr. Gonenne’s employment agreement with the Company had been terminated within 18 months from July 7, 2008. All of the 4,807,200 shares of common stock issued to Dr. Gonenne that had been subject to the lapsing repurchase right have been released from the lapsing repurchase right and are no longer subject thereto.

The purchase of intellectual property from Indigoleaf was accounted for under ASC Topic 350. The value of the intellectual property acquired on July 7, 2008 was calculated based on the June 27, 2008 private placement transaction discounted by a factor to reflect the fact that the issued stock was restricted and escrowed for an extended period of time under the agreement. This value amounted to $16,000,000 for the shares issued and was recorded by us as an intangible asset, “intellectual property” (IP) in the accompanying consolidated balance sheets as of December 31, 2010. In accordance with ASC Topic 350, we perform, at least annually, impairment testing in the last quarter of the year. In the last quarter of 2011, the impairment testing we performed led us to write off $11,400,000 of the IP’s value, primarily as a result of the declining stock value of our stock during the year. Once the value of the IP is written down, it cannot be written back up except through additional acquisitions.

2009 marked the beginning of our research and development activities. In 2010, using the proprietary technology that we purchased in 2008, we concentrated on expanding our library of highly specific monoclonal antibodies (MAbs) against a number of different cancers. In addition, we optimized our production capability to be able to prepare sufficient quantities of MAbs for the planned clinical trials. Our main focus during the year 2010 was ovarian cancer research. Beyond our lab activities, we created new relationships and collaborations with European medical centers to lead our clinical trials.

Recent Corporate Developments

On January 18, 2011, we entered into an investment agreement with Centurion Private Equity, LLC, an affiliate of Roswell Capital Partners, for the provision of an equity funding facility of up to the amount of $10 million. Concurrently, we issued to Centurion a senior secured convertible debenture in the amount of $100,000, which loan was repaid with funds received from the New Debenture.

On June 28, 2011, we entered into a one-year working capital agreement with a third party lender for a $63,500 convertible debenture, carrying an interest rate of 14% per annum. In connection with this loan, we issued 288,636 warrants to purchase our common stock at an exercise price of $0.11 per share for a term of three years from the date of issuance

On November 15, 2011, we entered into a license agreement with Biotech Investment Corp. ("BIC") pursuant to which we granted to Biotech an exclusive worldwide license to certain MabCure hybridoma clones producing antibodies against prostate cancer and certain MabCure developed anti-PROSCA monoclonal antibodies against prostate cancer to conduct research, development, and commercialization efforts in the field of diagnosis, imaging, and therapy of prostate cancer. In consideration for the grant of the exclusive license, BIC (a) paid us a one-time license fee in the amount of $500,000, of which $100,000 had been advanced to us in August 2011, and agreed to pay us a royalty on the sale or sublicensing of any products based on or embodying the licensed technology in an amount equal to 12.5%; and (b) issued to us shares of BIC amounting to 15% of the outstanding shares of BIC on a fully diluted basis.

4


As part of the licensing transaction with BIC, on October 25, 2011, we entered into a $100,000 senior secured convertible debenture (the “New Debenture”) with BIC, the funds from which were used to pay off our previous senior secured convertible debenture (the “Old Debenture”) which matured on October 18, 2011. The New Debenture matures on October 20, 2012 and bears interest at the rate of 8% per annum. The New Debenture is convertible into shares of our common stock at any time prior to maturity, at a price equal to $0.10 per share. As part of the New Debenture agreement, we issued 350,000 shares to BIC.

On March 20, 2012, we entered into an agreement with the City University of New York - Center for Advanced Technology (CUNY CAT) pursuant to which we retained CUNY CAT to evaluate our monoclonal antibodies against ovarian cancer cells as diagnostic reagents.

[SRK – Is this March 20, 2012? If so, then put at the top since the recent developments are in reverse chronological order.]

During the year 2012, we plan to validate and optimize our test assay for ovarian cancer, using purified antibody candidates that were previously selected. Once validation is achieved, the assay will be used to test the clinical samples (blood and urine) obtained from150 patients enrolled in our completed clinical study in Bangkok,Thailand.

Business of Issuer

Principal Products and Markets

We are a development stage company originally in the business of developing a detergent for removing pesticides from fruits and vegetables. Because we were unsuccessful in implementing our business plan, we considered various alternatives to ensure viability and solvency. We are currently in the business of developing and commercializing our proprietary antibody technology for the early detection of cancer and for the creation of highly specific therapeutics (antibodies and novel drugs) against cancer.

We entered the business of “early detection of cancer” through an asset purchase agreement dated January 10, 2008, with Indigoleaf and Dr. Amnon Gonenne, pursuant to which we agreed to purchase all of Indigoleaf’s interest and rights to a proprietary technology for the rapid and efficient generation of monoclonal antibodies against desired antigens such as cancer markers, including, but not limited to, the know-how, secrets, inventions, practices, methods, knowledge and data owned by Indigoleaf. We purchased this proprietary technology pursuant to an intellectual property transfer agreement and consummated the other transactions contemplated by the asset purchase agreement on July 7, 2008.

Distribution Methods of the Products

At present, we are conducting research and development using our proprietary antibody technology for the early detection of cancer and for the creation of highly specific therapeutics (antibodies and novel drugs) against cancer. As such, our products are currently not ready for distribution.

Status of any Publicly Announced New Product

At present, we have not publicly announced any new products but we intend to continue with the research and development of our technology.

Competitive Business Conditions and our Competitive Position in the Industry and Methods of Competition

We are aware of an FDA-approved blood test, OVA1, by Vermillion Inc., for assessing the risk of having ovarian cancer in women who present with pelvic mass. This test may compete with one of our leading Monoclonal

5


Antibody (“MAb") products for the diagnosis of ovarian in this particular patient population. However, the OVA1 test is based on algorithmic analysis of 5 non-cancer specific markers and therefore cannot yield high diagnostic specificity and sensitivity. In contrast, our leading antibodies against ovarian cancer are directed at putative cells surface targets that are unique to ovarian cancer, and, therefore, are expected to yield a definitive diagnostic result with high specificity and selectivity, as opposed to a risk assessment. We believe that if successful, our antibodies will offer a superior test to OVA1.

We are not aware of any FDA-approved blood tests which compete with our two leading Monoclonal Antibody (“MAb") products for the diagnosis of prostate cancers or for colorectal cancer.

There may be companies attempting to develop genomics (DNA-based) or proteomics (protein-pattern based) diagnostic tests for cancer. We believe that these statistical-pattern-based tests are inherently susceptible to errors, are time consuming, need technical expertise for both performance and analyses, and are relatively expensive. Hence, our anti-ovarian cancer test may have a clear advantage since it is expected to be highly specific, fast, and simple, and should be competitive in price.

Sources and Availability of Raw Materials and the Names of Our Principal Suppliers

We are currently in the research and development stage, and thus have no suppliers of raw materials. As we conduct our research and development, we use blood samples that contain various types of cancers at various stages of the cancer’s evolvement. We obtain these blood samples from hospitals and research institutions throughout Europe and the Far East. We rely on these blood samples in order to effectively conduct our research. Should we be unable to obtain blood samples that contain the specific cancer we are researching, it may cause a delay in our research.

Dependence on one or a few Major Customers

At present, we are in the development stage by conducting research and development and, as such, have no customers. We will likely plan and initiate sales strategies once our product is fully developed.

Intellectual Property

At present, we do not own, either legally or beneficially, any patents, registered trademarks, licenses, franchises, or concessions.

In July 2010, we filed a provisional patent application for our ovarian cancer diagnostic antibodies with the U.S. Patent and Trademark Office. The filing was based on positive results of a recent study which showed that our tumor-specific monoclonal antibodies (MAbs) successfully identified ovarian cancer in blood (94 percent) and distinguished it from benign tumors of the ovaries or healthy blood obtained from men and women. The patent application covers a panel of MAbs, each of which is capable of diagnosing ovarian cancer, and several that can correctly distinguish between ovarian cancer and benign tumors. In order to proceed with the international application of the provisional patent we were required to provide additional scientific data to support our claims, including, in particular, the identity of the ovarian cancer antigens (markers) recognized by our antibodies. Since we have not yet identified those target antigens, we decided not to proceed with the patent application. Once we identify the target antigens, we plan to proceed with a new patent application.

During 2008, we acquired a proprietary platform technology for the rapid and efficient generation of monoclonal antibodies against desired antigens such as cancer markers. This technology is based on an improvement of the non-proprietary, classic hybridoma technology for the production of antibodies in animals. Using our proprietary technology, we are able to generate highly specific monoclonal antibodies (MAbs). While the technology is novel and patentable, we have as of yet not filed any patents relating to the technology, because enforcing patent protection may be difficult since the products (MAbs) created by the technology have no "finger prints" that could link them to our technology. Our Chief Executive Officer and our Chief Scientific Officer each have an encrypted copy of our proprietary operating procedures for the production of hybridomas against cancer. In addition, an identical encrypted copy is kept by our corporate attorney.

6


Refer to Note 3 to the Consolidated Financial Statements entitled, “Purchase of Intellectual Property and Stock Issuance to Founder” for further discussion on the purchase of our proprietary technology.

Governmental Approval

We are subject to the laws and regulations of those jurisdictions in which we plan to license our technology. In the United States, we will be required to obtain regulatory approval for our products from the Food and Drug Administration (FDA), and in Europe we will be required to obtain the “Conformité Européene” (CE mark).

Effect of Existing or Probable Governmental Regulations on the Business

Our research and development activities and the manufacturing and marketing of our proposed MAb products are subject to the laws and regulations of governmental authorities in the United States and any other countries in which our products are ultimately marketed. In the United States, the Food and Drug Administration (FDA), among other activities, regulates new product approvals to establish the safety and efficacy of the types of products and technologies our Company is currently developing. Governments in other countries have similar requirements for testing and marketing.

Regulation by governmental authorities in the United States and foreign countries is a significant factor in the development, manufacture, and marketing of our proposed MAb products and in our ongoing research and development activities.

The products and technologies that we are currently researching and developing will require regulatory approval by governmental agencies prior to commercialization. Various federal statutes and regulations also govern or influence the testing, manufacturing, safety, labeling, storage, record keeping, and marketing of related products. The process of obtaining these approvals and the subsequent compliance with applicable statutes and regulations require the expenditure of substantial time and financial resources. Any failure by us or our collaborators, licensors, or licensees to obtain, or any delay in obtaining regulatory approval, could have a material adverse effect on our business.

Research and Development Expenditures

During the years ended December 31, 2011 and 2010, we incurred $390,640 and $461,452, respectively, in research and development expenditures, which included salaries and wages for our scientists.

Employees

As of December 31, 2011, we had three employees on a full-time basis; MabCure is managed by Dr. Amnon Gonenne, our President and Chief Executive Officer; Dr. Charles T. Tackney, our Chief Scientific Officer; and Mr. Ron Kalfus, our Chief Financial Officer.

Risk Factors

We do not have sufficient cash to pay our independent registered public accounting firm for the required financial audit of our 2011 financial statements.

Due to our lack of cash resources, we did not have sufficient cash to pay our independent registered public accounting firm to complete their audit of our 2011 financial statements that are included in this Annual Report on Form 10-K. Since our Annual Report on Form 10-K for the period ending December 31, 2011 has been filed without audited financial statements and without the required audit opinion of our current independent registered public accounting firm, our Form 10-K is deficient and does not comply with the reporting requirements of the Securities Exchange Act of 1934 (the “Exchange Act”).

7


We intend to complete the required audit of our financial statements for the period ending December 31, 2011 as soon as we obtain the necessary funds. When we complete the audit of our annual financial statements, we will be required to file an amended Annual Report on Form 10-K for the year 2011. This amended filing may include adjustments to our financial statements and results of operations as compared to the reports previously filed without an audit performed by our independent registered public accounting firm.

Our current failure to comply with the Exchange Act’s reporting requirements may result in the SEC instituting an administrative proceeding seeking revocation of the registration of our registered securities. In addition, our failure to comply with the Exchange Act’s reporting requirements could adversely affect the value of our common stock. Furthermore, our failure to satisfy the current public information requirement of Rule 144 means that the reduced Rule 144 holding period prior to the resale of our unregistered stock is unavailable to holders of our unregistered stock, which may adversely affect a stockholder’s ability to resell our stock and cause our share price to decline. Similarly, our filing deficiency and failure to have the required financial statements audit require us to use the longer and more expensive Form S-1 to register current or future unregistered shares that have or may be issued. This may also have a negative impact on the trading price of our common stock and on our market listing on the OTC Bulletin Board, and may adversely impact our ability to obtain necessary financing.

We have no operating history and have maintained losses since inception, which we expect to continue into the future.

We were incorporated on May 8, 2006, and have limited operations. We have not realized any revenues to date. Our products are under development and will not be ready for commercial sale until we have completed development, conducted clinical trials, and received all regulatory approvals. We have no operating history upon which an evaluation of our future success or failure can be made. Our net loss from inception to December 31, 2011 is $15,507,960. Based upon our proposed plans, we expect to incur operating losses in future periods. This will happen because there are substantial costs and expenses associated with the development and commercialization of our proposed products. We may fail to generate revenues in the future. Failure to generate revenues will cause us to either change our line of business or to go out of business because we will not have the money to pay our ongoing expenses.

There is a substantial doubt that we will be able to continue as a going concern.

Since we are a development stage company, have no established source of revenue, and are dependent on our ability to raise capital from shareholders or other sources to sustain operations, there is a substantial doubt that we will be able to continue as a going concern.

We will, in all likelihood, continue to incur expenses without generating significant revenues into the foreseeable future, at least until we complete development of our products and commence their commercialization. Our only source of funds to date has been the sale of our common stock. Because we cannot ensure that we will be able to generate interest in our products or that we will be able to generate any significant revenues or income, the identification of new sources of equity financing will be difficult. If we are successful in closing on any new financing, existing investors will experience substantial dilution. Our ability to obtain debt financing is also severely impacted by our financial condition, and likely not even feasible, given that we do not have revenues or profits to pay interest or repay principal.

As a result, if we are unable to obtain additional financing at this stage in our operations, our business will fail and our stockholders may lose some or all of their investment in our common stock.

Our inability to complete our product development activities successfully may severely limit our ability to operate and finance operations.

Commercialization of our technology will require significant additional research and development as well as substantial clinical trials. We believe that Europe and the United States will be the principal markets for our technology, although we may elect to expand into other regions. We may not be able to successfully complete

8


development of our technology, or successfully market our technology. Our research and development programs may not be successful. Our technology may not prove to be safe and efficacious in clinical trials, and we may not obtain the necessary regulatory approvals for our technology. Whether or not any of these events occur, we may not have adequate resources to continue operations for the period required to resolve any issues delaying commercialization, and we may not be able to raise capital to finance our continued operation during the period required for resolution of these issues.

If we are not able to adequately protect our proprietary technology, our Company will suffer a material adverse effect.

Our ability to compete successfully and achieve any revenue will depend, in part, on our ability to protect our proprietary technology and operate without infringing upon the rights of others. In addition, the departure of any of our management or any significant technical personnel or consultants we hire or retain in the future, the breach of their confidentiality and non-disclosure obligations, or the failure to achieve our intellectual property objectives may have a material adverse effect on our business, financial condition, and results of operations. We believe our success depends upon the knowledge and experience of our management and our ability to commercialize our existing technology and to develop new technologies.

We may not be able to successfully protect our proprietary technology, and our proprietary technology may otherwise become known, or similar technology may be independently developed by competitors. While we believe that we have adequately protected our proprietary technology, and we intend to take all appropriate and reasonable legal measures to protect it in the future, the use of our technology by a competitor could have a material adverse effect on our business, financial condition, and results of operations. In addition, competitors may discover novel uses, develop similar or more marketable technologies, or offer services similar to those offered by our Company at lower prices. If we are unsuccessful in addressing the risks related to protecting our proprietary technology, our business will most likely fail.

We may be subject to intellectual property infringement litigation, which may be time-consuming and costly.

We may need to bring legal claims to enforce or protect our intellectual property rights. Any litigation, whether successful or unsuccessful, may result in substantial costs and a diversion of our Company's resources. In addition, notwithstanding our rights to our intellectual property, other persons may bring claims against us alleging that we have infringed on their intellectual property rights or that our intellectual property rights are not valid. Any claims against us, with or without merit, could be time consuming and costly to defend or litigate, divert our attention and resources, result in the loss of goodwill associated with our business, or require us to make changes to our technology.

Clinical trials are expensive, time consuming, and difficult to design and implement, and it is unclear whether the results of such clinical trials will be favorable.

We commenced clinical trials of our proposed products in January 2010. Clinical trials will be expensive and may be difficult to implement due to the number of patients and testing sites that may be required, and could be subject to delay or failure at any stage of the trials. We expect our current funding will be sufficient only to enable us to continue our operations as currently planned until approximately the second quarter of 2012. Accordingly, we will require additional funds to conduct additional clinical trials, obtain the necessary FDA approvals, and market our products. Any delay or failure of, or adverse results from, clinical trials will likely require us to obtain even further funding in order to address such delays or failures, or to refocus our efforts on other product candidates, and such delay, failure, or adverse results could make it much more difficult or expensive for us to obtain funding. Similarly, human clinical trials for our products will be expensive and difficult to design and implement in part because they will be subject to rigorous regulatory requirements. The clinical trial process is also time-consuming. We estimate that clinical trials of our proposed products will take at least several years to complete once initiated. Furthermore, we may encounter problems that could cause us to abandon or repeat clinical trials, further delaying or preventing the completion of such trials.

The results of our clinical trials may not support our product claims.

9


Even if our clinical trials are completed as planned, we cannot be certain that their results will support our product claims. Even if pre-clinical testing and early clinical trials for a product are successful, this does not ensure that later clinical trials will be successful, and we cannot be sure that the results of later clinical trials will replicate the results of prior clinical trials and pre-clinical testing or meet our expectations. The clinical trial process may fail to demonstrate that our products are safe for humans or effective for indicated uses. Any such failure would likely cause us to abandon the product and may delay development of other product candidates.

Our products are subject to government regulations and approvals which may delay or prevent the marketing of potential products and impose costly procedures upon our activities.

The FDA and comparable agencies in state and local jurisdictions and in foreign countries impose substantial requirements upon pre-clinical and clinical testing, manufacturing and marketing of pharmaceutical and biotechnology products. Lengthy and detailed pre-clinical and clinical testing, validation of manufacturing and quality control processes, and other costly and time-consuming procedures are required. Satisfaction of these requirements typically takes several years and the time needed to satisfy them may vary substantially, based on the type, complexity, and novelty of the pharmaceutical product. The effect of government regulation may be to delay or to prevent marketing of potential products for a considerable period of time and to impose costly procedures upon our activities. The FDA or any other regulatory agency may not grant approval on a timely basis, or at all, for any product we develop. Success in pre-clinical or early stage clinical trials does not assure success in later stage clinical trials. Data obtained from pre-clinical and clinical activities are susceptible to varying interpretations that could delay, limit, or prevent regulatory approval. If regulatory approval of a product is granted, such approval may impose limitations on the indicated uses for which a product may be marketed. Further, even after we have obtained regulatory approval, later discovery of previously unknown problems with a product may result in restrictions on the product, including withdrawal of the product from the market. Delay in obtaining or failure to obtain regulatory approvals would make it difficult or impossible to market our products and would harm our business.

We may require additional funding, and our future access to capital is uncertain. Insufficient funds may limit our ability to develop and commercialize new products, services, and technologies.

Our business can change unpredictably due to a variety of factors, including competition, regulation, legal proceedings, or other events, which could impact our funding needs or our cash flow from operations or increase our required capital expenditures. In addition, our estimates of the funds necessary to develop and commercialize our MAbs for the early detection of cancer with specific antibodies and for the creation of highly specific therapeutics (antibodies and novel drugs) against cancer or other diagnostic testing products or services may be inaccurate or we may acquire products or other assets in the future, in each case which could require additional funds. Furthermore, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. We may seek the additional capital through public or private equity offerings, debt financings, and collaborative and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest may be diluted and the terms may include liquidation or other preferences or rights that adversely affect your rights as a stockholder. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions such as incurring additional debt, making capital expenditures, or declaring dividends. If we raise additional funds through collaboration and licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies or products, or grant licenses on terms that are not favorable to us.

Adequate funds, whether through the financial markets or from other sources, may not be available when we need them or on terms acceptable to us. For example, the United States has recently experienced an economic recession, the long-term impact of which cannot be predicted. Furthermore, as a result of the recent volatility in domestic and international capital markets, the cost and availability of credit has been and may continue to be adversely affected as compared to its normal function. Concern about the stability of the markets generally and the strength of counterparties specifically has led many lenders and institutional investors to reduce, and in some cases, cease to

10


provide funding to borrowers. Insufficient funds could cause us to delay, scale back, or choose not to develop and commercialize new products and technologies, including diagnostic testing products and services.

Our principal shareholder has resigned from the Board and has been terminated as Chief Scientific Officer.

Our principal shareholder, Indigoleaf Associates Ltd., a company that is beneficially owned by Dr. Elisha Orr, currently holds approximately 40.7% of our shares of common stock. On November 30, 2010, Dr. Orr resigned from our Board of Directors. Although he did not state the reason for his resignation from our Board of Directors, we believe that his resignation from the Board of Directors was related to a difference of opinion with our other Directors concerning (a) the composition of the Company’s Board and management going forward, (b) the location of the Company’s laboratory facilities, and (c) sources of financing for the Company’s operations. Furthermore, on December 2, 2010, our subsidiary, MabCure N.V., terminated, for cause, its Management Services Agreement with Dr. Orr, pursuant to which Dr. Orr had served as our Chief Scientific Officer.

Through his beneficial ownership of Indigoleaf Associates Ltd., Dr. Orr retains approximately a 40.7% interest in our outstanding shares, thereby having a significant say in all matters requiring stockholder approval. It is possible that Dr. Orr will cause Indigoleaf Associates Ltd. to vote its shares against any proposed management recommendation that requires shareholder approval, which may lead to an inability on the part of our current management and Board to pursue strategic growth, which, in turn, may have a material adverse impact on shareholder value. In addition, Dr. Orr may initiate a contest for control of the Company, which could distract our management from operations, divert Company resources, and negatively impact the Company’s financial condition, profitability and prospects.

ITEM 2.              PROPERTIES

Our Principal Executive Offices

Our principal executive offices had been located at De Schiervellaan 3/B1, 3500 Hasselt, Belgium, which is also the residence of our principal executive officer, Dr. Amnon Gonenne. As of April 1, 2011, we relocated our principal executive offices to 760 Parkside Avenue #208, Brooklyn, New York 11226. As of March 15, 2012, our principal executive offices have been located at 228 Park Avenue South, Suite 15740 NY, NY 10003. We believe that the condition of our property is satisfactory, suitable, and adequate for our current needs.

ITEM 3.              LEGAL PROCEEDINGS

We know of no material, active or pending legal proceedings against our Company, nor of any proceedings that a governmental authority is contemplating against us.

We know of no material proceedings to which any of our Directors, officers, affiliates, owner of record or beneficially of more than 5 percent of our voting securities or security holders is an adverse party or has a material interest adverse to our interest.

On January 10, 2011, we received a letter from counsel to Dr. Elisha Orr, our former Chief Scientific Officer, demanding payment of approximately $160,000 for unpaid management services fees, including payment for a three-month notice period, and for the reimbursement of certain expenses. In our response to Dr. Orr’s counsel, we have refuted the claims presented in the letter primarily because Dr. Orr was dismissed for breach and therefore was not entitled to three months notice, and because the Company fully reimbursed Dr. Orr for all reimbursable expenses. Upon Dr. Orr’s return of certain Company property in his possession, we intend to reconcile all amounts and pay Dr. Orr the amounts that are owed to him, which include amounts related to unpaid salaries and management service fees totaling $99,839 as of December 31, 2011, and which have been recorded under accounts payable and accrued liabilities.

11


ITEM 4.              MINE SAFETY DISCLOSURES

Not applicable

PART II

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our Common Shares are traded on the over-the-counter market and quoted on the OTCBB under the symbol “MBCI.” On March 31, 2012, the closing price for our common shares as reported on the OTCBB was $0.09.

The high and the low bid prices for our common shares are based on inter-dealer prices, without retail mark-up, markdown, or commission, and may not represent actual transactions.

The table below sets forth the range of high and low bid information for our common shares as quoted on the OTCBB for each of the quarters during the fiscal year ended December 31, 2011 and December 31, 2010:

For the Fiscal Year Ended December 31, 2011
For the Quarter ended High Low
March 31
June 30
September 30
December 31
$0.48
$0.36
$0.20
$0.12
$0.34
$0.20
$0.11
$0.07

For the Fiscal Year Ended December 31, 2010
For the Quarter ended High Low
March 31
June 30
September 30
December 31
$0.75
$0.50
$0.80
$0.85
$0.50
$0.25
$0.23
$0.42

Holders of our Common Shares

As of March _31_, 2012, there were eleven registered stockholders holding 64,363,902 common shares issued and outstanding.

Dividends

Since our inception, we have not declared nor paid any cash dividends on our capital stock and we do not anticipate paying any cash dividends in the foreseeable future. Our current policy is to retain any earnings in order to finance our operations. Our Board of Directors will determine future declarations and payments of dividends, if any, in light of the then-current conditions it deems relevant and in accordance with applicable corporate law.

12


There are no restrictions in our Articles of Incorporation or Bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:

  • we would not be able to pay our debts as they become due in the usual course of business; or

  • our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of stockholders who have preferential rights superior to those receiving the distribution.

Securities Authorized for Issuance under Equity Compensation Plans

Our equity compensation plan administrator is authorized to grant options to acquire, in aggregate, up to a total of 6,034,800 Common shares.

Recent Sales of Unregistered Securities

During the fiscal year ended December 31, 2011, except as included in our Quarterly Reports on Form 10-Q or in our Current Reports on Form 8-K, we have not sold any equity securities not registered under the Securities Act.

Purchases of Equity Securities by the Issuer and Affiliated Purchases

During each month within the fourth quarter of the fiscal year ended December 31, 2011, neither we nor any “affiliated purchaser,” as that term is defined in Rule 10b-18(a)(3) under the Exchange Act, repurchased any of our Common Shares or other securities.

ITEM 6.              SELECTED FINANCIAL DATA

Not applicable.

13



ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help you understand our historical results of operations during the periods presented and our financial condition. This MD&A should be read in conjunction with our consolidated financial statements and the accompanying notes to consolidated financial statements, and contains forward-looking statements that involve risks and uncertainties. See section entitled “Forward-Looking Statements” above.

EXECUTIVE OVERVIEW

We were incorporated in the State of Nevada on May 8, 2006. We are a development stage company with limited operations and no revenues from our business operations. We did not have sufficient cash to pay our independent registered public accounting firm to complete the audit of our 2011 financial statements included in this Annual Report on Form 10K. As a result, the 2011 financial statements that are included in this Annual Report on Form 10K are presented without the required audit opinions of our independent registered public accounting firm. Although we have been able to fund our operations to date, there is no assurance that our capital raising efforts will be able to attract the additional capital or other funds needed to sustain our operations.

Since 2008, we have been in the business of developing and commercializing our proprietary antibody technology for the early detection of cancer and for the creation of highly specific therapeutics (antibodies and novel drugs) against cancer.

On November 15, 2011, we entered into a license agreement with Biotech Investment Corp. ("BIC") pursuant to which we granted to BIC an exclusive worldwide license to certain MabCure hybridoma clones producing antibodies against prostate cancer and certain MabCure developed anti-PROSCA monoclonal antibodies against prostate cancer to conduct research, development, and commercialization efforts in the field of diagnosis, imaging, and therapy of prostate cancer. In consideration for the grant of the exclusive license, Biotech (a) paid us a onetime license fee in the amount of $500,000, of which $100,000 had been advanced to us in August 2011, and agreed to pay us a royalty on the sale or sublicensing of any products based on or embodying the licensed technology in an amount equal to 12.5%; and (b) issued to us shares of BIC amounting to 15% of the outstanding shares of BIC on a fully diluted basis. Of the $500,000 one-time license fee, $350,000 is being used by us for the payment of operating costs and expenses to enable the Company to conduct clinical trials and research and development relating to ovarian cancer. The remaining $150,000 is being used for the payment of our existing indebtedness, to the exclusion of payment or settlement of certain pre-existing claims as defined in the agreement.

As part of the licensing transaction with BIC, on October 25, 2011, we entered into a $100,000 senior secured convertible debenture (the “New Debenture”) with BIC, the funds from which were used to pay off our previous senior secured convertible debenture (the “Old Debenture”) which matured on October 18, 2011. The New Debenture matures on October 20, 2012 and bears interest at the rate of 8% per annum. The New Debenture is convertible into shares of our common stock at any time prior to maturity, at a price equal to $0.10 per share. As part of the New Debenture agreement, we issued 350,000 shares to BIC. The New Debenture includes a security interest on all of our assets that shall be automatically released following the date that the shares issuable upon conversion of the debenture can be resold without restriction under Rule 144, and 15% of the aggregate volume accrues to the debenture amount.

In January 2011, we entered into an investment agreement with Centurion Private Equity, LLC (the “Investor” or “Centurion”), an affiliate of Roswell Capital Partners, for the provision of an equity funding facility of up to the amount of $10 million. Pursuant to the terms and conditions of the Investment Agreement, we may sell newly issued shares of our common stock (the “Put Shares”) to the Investor (each such sale, a “Put”) from time to time at a price equal to the lesser of (i) 97% of the “Market Price” (as defined below) of our common stock or (ii) the Market Price of our common stock minus $0.01, subject to certain dollar and share volume limitations for each Put, until the earlier of (a) 24 months from the date our registration statement is declared effective, (b) 30 months from the date of the Investment Agreement, or (c) until all Puts under the Investment Agreement have reached an

14


aggregate gross sales price equal to $10 million. The Investment Agreement provides that prior to exercising any Put we must have a registration statement declared effective with respect to the Put Shares. “Market Price” means the average of the three lowest daily volume weighted average prices published daily by Bloomberg LP for our common stock during the fifteen consecutive trading day period immediately following the date specified by us on which we intend to exercise the applicable Put. As consideration for the provision of the equity funding facility, we issued to the Investor 465,224 commitment shares and 34,892 fee shares to cover the Investor’s transaction fees. On June 29, 2011, we issued 100,000 shares in connection with our first Put notice under the Equity Funding Facility. Under this first Put, we received proceeds of $10,829 on July 27, 2011. On November 29, 2011, we issued 100,000 shares in connection with our second Put notice under the Equity Funding Facility, of which 57,500 shares remain unused and held in escrow by our Equity Funding Facility agent. Under this second Put, we received proceeds of $4,957 on December 27, 2011.

Concurrent with the closing of the Investment Agreement, the Investor purchased a $100,000 senior secured convertible debenture. The debenture was due to mature on October 18, 2011 and bore interest at the rate of 8% per annum which was payable to the Investor at maturity. On June 6, 2011, we entered into an amendment related to this debenture under which the Investor agreed to fix the price at which the Debenture may be converted into common stock to $0.165 per share. In addition, on June 6, 2011, we entered into an amendment to the Investment Agreement with the Investor pursuant to which we issued to the Investor an additional 465,224 commitment shares. We repaid the debenture with the funds we received from the New Debenture.

As of April 1, 2011, we relocated our principal executive offices and our principal place of business to 760 Parkside Avenue #208, Brooklyn,, NY 11226. Our lease expired on March 15, 2012. Our current mailing address is 228 Park Avenue South, #15740, New York, NY 10003.

Over the next twelve months, we plan to:

  • conduct validation and optimization studies on our ovarian cancer reagents under our agreement with City college of NY (CCNY);
  • test the clinical specimens collected from our Thai study, as well as the clinical specimens collected from Belgian patients.

RESULTS OF OPERATIONS

For the years ended December 31, 2011 and December 31, 2010

Beginning January 2009, we commenced our research and development activities with the proprietary antibody technology we acquired for the early detection of cancer and for the creation of highly specific therapeutics (antibodies and novel drugs) against cancer.

Revenues were $500,000 for the year ended December 31, 2011, compared to $0 for the year ended December 31, 2010. The revenue is from a license agreement we entered into with Biotech Investment Corp. ("BIC") pursuant to which we granted to Biotech an exclusive worldwide license to certain MabCure hybridoma clones producing antibodies against prostate cancer and certain MabCure developed anti-PROSCA monoclonal antibodies against prostate cancer to conduct research, development, and commercialization efforts in the field of diagnosis, imaging, and therapy of prostate cancer. The cash consideration for the grant of the exclusive license was a one-time license fee in the amount of $500,000.

Research and development expenses were $390,640 for the year ended December 31, 2011, compared to $461,452 for the year ended December 31, 2010. The decrease in research and development expenses was primarily due to a reduction in payroll-related expenses compared to the same period for the previous year and a reduction in our R&D activities as a result of cash flow shortages. Research and development expenses primarily consist of salaries and wages for our scientists.

15


General and administrative expenses were $819,105 for the year ended December 31, 2011, compared to $557,968 for the year ended December 31, 2010. The increase in general and administrative expenses was primarily due to an increase in stock-based compensation as well as an increase in professional fees. General and administrative expenses primarily consist of salaries and wages, stock-based compensation, and professional fees.

In the fourth quarter of 2011, in accordance with ASC Topic 350, we performed impairment testing on our acquired intellectual property (IP) which had a carrying value as of December 31, 2010 of $16,000,000. The impairment testing we performed led us to write off $11,400,000 of the IP’s value, primarily as a result of the declining stock value of our stock during the year. The impairment loss is shown as a separate item on our consolidated statement of operations, but is part of our loss from operations.

Our net loss for the year ended December 31, 2011, was $12,264,835 or $0.19 per share compared to $1,225,802 or $0.02 per share for the year ended December 31, 2010. The weighted average number of shares outstanding was 63,350,840 for the year ended December 31, 2011, compared to 62,054,520 for the year ended December 31, 2010.

LIQUIDITY AND CAPITAL RESOURCES

As outlined in the overview above, in January 2011, we entered into an investment agreement with Centurion for the provision of an equity funding facility of up to the amount of $10 million. Drawing funds from this facility is at our sole discretion and will be based on our ongoing needs for capital. We are now able to draw funds from the facility given that the SEC declared as effective our S-1 related to this equity funding facility. The facility will be available to us for a period of two years or 30 months from the date of the Investment Agreement, whichever is sooner. During this time, we will be working towards securing additional sources of capital.

As discussed above, on November 15, 2011, we entered into a license agreement pursuant to which we granted an exclusive worldwide license to certain of our hybridoma clones producing antibodies against prostate cancer and certain anti-PROSCA monoclonal antibodies against prostate cancer. In consideration, we received $500,000, of which $100,000 were advanced to us in August 2011. In addition, we will be receiving a royalty of 12.5% on the sale or sublicensing of any products based on or embodying the licensed technology. The funds from the licensing agreement will be used primarily to advance our R&D as well as for general corporate purposes

We can give no assurance that we will be able to obtain additional capital or that any additional capital that we are able to obtain will be sufficient to meet our needs, which raises substantial doubt about our ability to continue operating as a going concern. We do not have any bank credit lines. In addition to the equity funding facility with Centurion, we currently plan to attempt to obtain financing from additional investors through third-party loans or convertible debentures. Furthermore, we may seek to obtain funding through strategic alliances with larger pharmaceutical or biomedical companies. We can give no assurances that we will be able to obtain any additional funding from these sources, or that such funding will be available to us on favorable terms.

Given the current pace of clinical development of our products, and our limited financial resources, we estimate that we have sufficient cash on hand to fund clinical development only through the second quarter of 2012. If we are unable to raise additional capital or enter into strategic partnerships and/or license agreements, we will be required to cease operations or curtail our desired development activities, which will delay the development of our products. Moreover, we will need additional financing after development of our products until we can achieve profitability, if ever.

Due to our lack of cash resources, we did not have sufficient cash to pay our independent registered public accounting firm to complete their audit of our 2011 financial statements that are included in this Annual Report on Form 10-K. Since our Annual Report on Form 10-K for the period ending December 31, 2011 has been filed without audited financial statements and without the required audit opinion of our independent registered public accounting firm, our Form 10-K is deficient and does not comply with the reporting requirements of the Securities Exchange Act of 1934 (the “Exchange Act”). The lack of a completed audit may make it more difficult for us to raise funds. If we are unable to obtain additional funding for operations, we may not be able to continue operations

16


as proposed, requiring us to modify our business plan, curtail various aspects of our operations, or cease operations. In such event, investors may lose a portion or all of their investment.

As of December 31, 2011

As of December 31, 2011, our cash balance was $146,436. We have been working on various fronts to attempt to obtain additional capital to fund our operations, including third-party loans, convertible debentures, equity investments, and strategic alliances. During the year ended December 31, 2011, we were able to obtain (i) a total of $200,000 in convertible debentures, consisting of $100,000 from Centurion Private Equity, LLC and $100,000 from Biotech Investment Corp ( BIC) on October 25, 2011 (the proceeds of which we used to repay the Centurion convertible debenture), (ii) $63,500 from a one-year working capital convertible debenture, and (iii) proceeds of $15,786 from shares issued under our equity funding facility. In addition, we received $500,000 related to the license agreement discussed above as well as advances of $57,153 from related parties.

Stockholders’ equity as of December 31, 2011 was $3,876,037, compared to equity of $15,724,959 as of December 31, 2010. The decrease in stockholders’ equity is mainly a result of the $11,400,000 impairment loss on IP recorded in the fourth quarter of 2011, slightly offset by the issuance of equity securities and stock-based compensation. The issuance of equity securities is described below in the section entitled, “Recent Private Placements.”

For the year ended December 31, 2011, net cash used in operating activities was $61,387 compared to net cash used in operating activities of $691,796 for the year ended December 31, 2010. In both years, cash used in operating activities was used to fund our losses for the respective periods.

For the year ended December 31, 2011, net cash provided by investing activities was $53,159 and was primarily from the sale of equipment from our laboratories.

Net cash flows from financing activities for the year ended December 31, 2011 were $166,834, which resulted primarily from proceeds of $263,500 from the issuance of convertible debentures and repayment of $100,000 of the convertible debentures. Net cash flows from financing activities for the year ended December 31, 2010 were $503,445, which resulted primarily from net proceeds of $500,000 in connection with our March 2010 private placement.

Contractual Obligations

Our contractual obligations consist mainly of payments related to capital and operating leases used in the operation of our business as well as short-term debt. The following table summarizes our contractual obligations as of December 31, 2011:

    2012     2013 & 2014     Total  
Operating leases $  4,519   $  -   $  4,519  
Capital lease obligations   9,091     -     9,091  
Short-term debt   296,758     -     296,758  
Total contractual obligations $ 310,368   $  -   $  310,368  

Key Financial Transactions

On November 15, 2011, we entered into a license agreement with Biotech Investment Corp. ("BIC") pursuant to which we granted to Biotech an exclusive worldwide license to certain MabCure hybridoma clones producing antibodies against prostate cancer and certain MabCure developed anti-PROSCA monoclonal antibodies against prostate cancer to conduct research, development, and commercialization efforts in the field of diagnosis, imaging, and therapy of prostate cancer. In consideration for the grant of the exclusive license, BIC (a) paid us a one-time

17


license fee in the amount of $500,000, of which $100,000 had been advanced to us in August 2011, and agreed to pay us a royalty on the sale or sublicensing of any products based on or embodying the licensed technology in an amount equal to 12.5%; and (b) issued to us shares of BIC amounting to 15% of the outstanding shares of BIC on a fully diluted basis.

As part of the licensing transaction with BIC, on October 25, 2011, we entered into a $100,000 senior secured convertible debenture (the “New Debenture”) with BIC, the funds from which were used to pay off our previous senior secured convertible debenture (the “Old Debenture”) which matured on October 18, 2011. The New Debenture matures on October 20, 2012 and bears interest at the rate of 8% per annum. The New Debenture is convertible into shares of our common stock at any time prior to maturity, at a price equal to $0.10 per share. As part of the New Debenture agreement, we issued 350,000 shares to BIC.

On January 18, 2011, we entered into an investment agreement with Centurion Private Equity, LLC, an affiliate of Roswell Capital Partners, for the provision of an equity funding facility of up to the amount of $10 million. Concurrently, we issued to Centurion a senior secured convertible debenture in the amount of $100,000. We repaid the debenture with the funds we received from the New Debenture.

On March 5, 2010, we closed a private placement consisting of 1,000,000 units of our securities at a price of $0.50 per unit, for aggregate proceeds of $500,000. Each unit consists of: (i) one common share; (ii) one non-transferable share purchase warrant entitling the holder thereof to purchase one share of common stock for a period of 24 months commencing from the closing of the private placement agreement, at an exercise price of $0.60 per common share; and (iii) one non-transferable share purchase warrant entitling the holder thereof to purchase one share of common stock for a period of 24 months commencing from the closing of the private placement agreement, at an exercise price of $0.70 per common share.

On March 5, 2010, we entered into a conversion agreement with the lender of a bridge loan in the amount of $500,000, pursuant to which the loan and all accrued interest was converted into equity securities. In full repayment of the loan and all accrued interest, we issued to the lender 1,000,000 units, with each unit consisting of: (i) one common share; (ii) one non-transferable share purchase warrant entitling the holder thereof to purchase one share of common stock until February 16, 2012, at a price per share of $0.60; and (iii) one non-transferable common stock purchase warrant entitling the holder thereof to purchase one share of common stock until February 16, 2012, at a price per share of $0.70.

Going Concern

Our registered independent auditors have included an explanatory paragraph in their report on our consolidated financial statements regarding our ability to continue as a going concern. Our consolidated financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our registered independent auditors. The consolidated financial statements do not include any adjustments that might result from the outcome of that uncertainty.

We expect our current funds will be sufficient only to enable us to continue our operations as currently planned until approximately the second quarter of 2012. We currently estimate that we will require an additional $2,000,000 to $5,000,000 to fund our operations for the subsequent 12 to 24 month period.

However, there are no assurances that we will be able to obtain funds required for our continued operation. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will not be able to meet our other obligations as they become due and we will be forced to scale down or perhaps even cease the operation of our business. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

Off-Balance Sheet Arrangements

18


There are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

CRITICAL ACCOUNTING POLICIES

Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosures of contingent assets and liabilities as of the date of the financial statements and during the applicable periods. We base these estimates on historical experience and on other factors that we believe are reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions and could have a material impact on our financial statements.

Stock-based Compensation

The Company accounts for stock-based compensation in accordance with ASC Topics 505 and 718. Stock-based compensation for stock options is measured based on the estimated fair value of each award on the date of grant using the Black-Scholes valuation model. Stock-based compensation for restricted shares is measured based on the closing fair market value of the Company's common stock price on the date of grate. The Company recognizes stock-based compensation costs as expense ratably on a straight-line basis over the requisite service period

We account for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with ASC Topic 505. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earlier of a performance commitment or completion of performance by the provider of goods or services as defined by ASC Topic 505. As of December 31, 2011, we have adopted a stock option plan and have granted stock options. Refer to Notes 1 and 6 to the Notes to Consolidated Financial Statements for further information.

Impairment of Intellectual Property

The purchase of intellectual property from Indigoleaf was accounted for under ASC Topic 350. We believe that there are no legal, regulatory, contractual, competitive, or economic factors that limit the useful life of this intangible asset. Consequently, we consider the useful life of this asset to be indefinite and we have recorded in the fourth quarter of 2011 an amortization expense of $11,400,000. In accordance with ASC Topic 350, we perform, at least annually, impairment testing in the last quarter of the year.

Refer to Note 1 to the Consolidated Financial Statements entitled “Summary of Significant Accounting Policies” included in this Annual Report for a discussion of other accounting policies utilized by the Company.

RECENT ACCOUNTING PRONOUNCEMENTS

Refer to Note 10 to the Consolidated Financial Statements entitled “Recent Accounting Pronouncements” included in this Annual Report for a discussion of recent accounting pronouncements and their impact on our Financial Statements.

ITEM 7A.            QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

19


The following Financial Statements have not been audited and no auditor’s report is filed herewith.

ITEM 8.              FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

MABCURE INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2011, AND 2010

Financial Statements-  
   
Consolidated Balance Sheets as of December 31, 2011 and 2010 F-3
   
Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2011 and 2010 and Cumulative from Inception F-4
   
Consolidated Statement of Stockholders’ Equity for the Period From Inception through December 31, 2011 F-5
   
Consolidated Statements of Cash Flows for the Years Ended December 31, 2011 and 2010 and Cumulative from Inception F-6
   
Notes to Consolidated Financial Statements December 31, 2011 and 2010 F-7

F-1


F-2


MABCUREINC. AND SUBSIDIARY
(A DEVELOPMENT STAGECOMPANY)
CONSOLIDATED BALANCESHEETS
AS OF DECEMBER 31, 2011, AND 2010
(Unaudited)

    2011     2010  
ASSETS            
Current Assets:            
 Cash and cash equivalents $  146,436   $  3,415  
 Accounts receivable - Other   -     44,923  
 Prepaid expenses   12,773     7,890  
     Total current assets   159,209     56,228  
             
Property and Equipment:            
 Computer and office equipment   12,409     11,733  
 Furniture and fixtures   8,050     8,244  
 Laboratory equipment   46,692     118,625  
 Vehicles   33,302     66,544  
 Website development costs   3,640     3,640  
    104,093     208,786  
 Less: Accumulated depreciation and amortization   (62,215 )   (84,867 )
     Net property and equipment   41,878     123,919  
             
Other Assets:            
 Intellectual property   4,600,000     16,000,000  
 Patent pending   4,675     4,675  
 Deposits and other   5,423     1,988  
 Deferred offering costs   -     20,663  
     Total other assets   4,610,098     16,027,326  
Total Assets $  4,811,185   $  16,207,473  
             
LIABILITIES AND STOCKHOLDERS' EQUITY            
Current Liabilities:            
 Accounts payable and accrued liabilities $  630,173   $  286,044  
 Due to related parties - Directors and officers   43,811     10,629  
 Current portion of capital lease obligations   9,091     36,308  
 Loans payable - net of debt discount of $44,685 and $0   252,073     133,258  
     Total current liabilities   935,148     466,239  
             
Long-Term Debt, less current portion:            
Capital lease obligations   -     16,275  
     Total liabilities   935,148     482,514  
             
Commitments and Contingencies            
             
Stockholders' equity:            
Common stock, $0.001 par value; 1,500,000,000 shares authorized; 62,399,725
and 60,399,725 shares issued and outstanding in 2011 and 2010, respectively
  64,015     62,400  
Additional paid-in capital   19,340,379     18,924,500  
Donated capital   13,000     13,000  
Accumulated other comprehensive loss   (33,397 )   (31,816 )
Deficit accumulated during the development stage   (15,507,960 )   (3,243,125 )
     Total stockholders’ equity   3,876,037     15,724,959  
Total Liabilities and Stockholders' Equity $  4,811,185   $  16,207,473  

The accompanying notes are an integral part of these consolidated financial statements.

F-3


MABCUREINC. AND SUBSIDIARY
(A DEVELOPMENT STAGECOMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVELOSS
FOR THEYEARS ENDED DECEMBER 31, 2011, AND 2010, AND
CUMULATIVEFROM INCEPTION (MAY 8, 2006) THROUGH DECEMBER 31, 2011
(Unaudited)

    Years Ended December 31,     Cumulative  
    2011     2010     from inception  
                   
                   
Revenues $  500,000   $  -   $  500,000  
Expenses:                  
 Research and development   390,640     461,452     1,201,035  
 General and administrative   819,105     557,968     3,037,932  
 Impairment loss on IP   11,400,000     -     11,400,000  
         Total expenses   12,609,745     1,019,420     15,638,967  
                   
Loss from operations   (12,109,745 )   (1,019,420 )   (15,138,967 )
Other Income (Expense):                  
     Interest income   18     470     10,636  
     Interest expense   (186,661 )   (206,852 )   (411,182 )
     Gain on derivative liability   26,769     -     26,769  
     Other income   4,784     -     4,784  
         Total other income (expense)   (155,090 )   (206,382 )   (368,993 )
Loss before income taxes   (12,264,835 )   (1,225,802 )   (15,507,960 )
Provision for income taxes   -     -     -  
Net loss $  (12,264,835 ) $  (1,225,802 ) $  (15,507,960 )
Comprehensive Loss:                  
     Foreign currency translation adjustment   (1,581 )   (11,534 )   (33,397 )
Total Comprehensive Loss $  (12,266,416 ) $  (1,237,336 ) $  (15,541,357 )
Basic and diluted loss per share $  (0.19 ) $  (0.02 )      
Weighted average number of shares                  
outstanding - basic and diluted   63,350,840     62,054,520        

The accompanying notes are an integral part of these consolidated financial statements.

F-4


MABCUREINC. AND SUBSIDIARY
(A DEVELOPMENT STAGECOMPANY)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THEPERIODS FROM INCEPTION (MAY 8, 2006)
THROUGH DECEMBER 31, 2011
(Unaudited)

                                  Deficit        
                            Accumulated     Accumulated          
                Additional           other     During the        
    Common Stock     Paid in     Donated       comprehensive     Development        
    Number     Amount     Capital     Capital     loss     Stage     Total  
                                           
Balance, May 8, 2006 (Date of Inception)   -   $  -   $  -   $  -   $  -   $  -   $  -  
Common stock issued for cash at $0.02 per share, December 20, 2006   2,550,000     2,550     48,450     -     -     -     51,000  
Donated services   -     -     -     4,000     -     -     4,000  
Loss for the period   -     -     -     -     -     (4,000 )   (4,000 )
Balance, December 31, 2006   2,550,000     2,550     48,450     4,000     -     (4,000 )   51,000  
Donated services   -     -     -     6,000     -     -     6,000  
Forward stock split (20:1)   48,450,000     48,450     (48,450 )   -     -     -     -  
Returned to treasury   (24,000,000 )   (24,000 )   24,000     -     -     -     -  
Loss for the period   -     -     -     -     -     (106,265 )   (106,265 )
Balance, December 31, 2007   27,000,000     27,000     24,000     10,000     -     (110,265 )   (49,265 )
Donated services   -     -     -     3,000     -     -     3,000  
Common stock issued for cash   1,300,000     1,300     1,298,700     -     -     -     1,300,000  
Common stock issued for purchase of intellectual property   32,048,000     32,048     15,967,952     -     -     -     16,000,000  
Foreign currency translation adjustment   -     -     -     -     (7,470 )   -     (7,470 )
Loss for the period   -     -     -     -     -     (524,098 )   (524,098 )
Balance, December 31, 2008   60,348,000     60,348     17,290,652     13,000     (7,470 )   (634,363 )   16,722,167  
Common stock issued for investor relations services   51,725     52     44,949     -     -     -     45,001  
Stock-based compensation (options)   -     -     247,916     -     -     -     247,916  
Foreign currency translation adjustment   -     -     -     -     (12,812 )   -     (12,812 )
Loss for the period                                 (1,382,960 )   (1,382,960 )
Balance, December 31, 2009   60,399,725     60,400     17,583,517     13,000     (20,282 )   (2,017,323 )   15,619,312  
Common stock issued for cash - Bluewater   1,000,000     1,000     499,000     -     -     -     500,000  
Conversion of debt and accrued interest to equity - Chrysler   1,000,000     1,000     514,411     -     -     -     515,411  
Stock-based compensation (options)   -     -     131,901     -     -     -     131,901  
Increase in the value of warrants due to amendment of term   -     -     195,671     -     -     -     195,671  
Foreign currency translation adjustment   -     -     -     -     (11,534 )   -     (11,534 )
Loss for the period   -     -     -     -     -     (1,225,802 )   (1,225,802 )
Balance, December 31, 2010   62,399,725   $  62,400   $  18,924,500   $  13,000   $  (31,816 ) $  (3,243,125 ) $  15,724,959  
Commitment shares issued under Equity Funding Facility - Centurion   500,116     500     (500 )   -     -     -     -  
Commitment shares issued for removal of conversion feature on debenture - Centurion   465,224     465     129,240     -     -     -     129,705  
Common stock issued under licensing agreement - Biotech Investment Corp   350,000     350     (350 )   -     -     -     -  
Common stock issued for Put transactions under Equity Funding Facility   200,000     200     15,587     -     -     -     15,787  
Common stock issued for consulting sevices   100,000     100     35,900     -     -     -     36,000  
Stock-based compensation (options)   -     -     214,285     -     -     -     214,285  
Value of warrants issued under convertible debenture   -     -     53,621     -     -     -     53,621  
Deferred offering costs   -     -     (31,904 )   -     -     -     (31,904 )
Foreign currency translation adjustment   -     -     -     -     (1,581 )   -     (1,581 )
Loss for the period   -     -     -     -     -     (12,264,835 )   (12,264,835 )
Balance, December 31, 2011   64,015,065   $  64,015   $  19,340,379   $  13,000   $  (33,397 ) $  (15,507,960 ) $  3,876,037  

The accompanying notes are an integral part of these consolidated financial statements.

F-5


MABCUREINC. AND SUBSIDIARY
(A DEVELOPMENT STAGECOMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2011, AND 2010, AND
CUMULATIVEFROM INCEPTION (MAY 8, 2006) THROUGH DECEMBER 31, 2011
(Unaudited)

    Years ended December 31,     Cumulative  
    2011     2010     from inception  
Cash flows from operating activities:                  
Net loss $  (12,264,835 ) $  (1,225,802 ) $  (15,507,960 )
Adjustments to reconcile net loss to net cash used in operating activities:            
 Impairment loss on IP   11,400,000     -     11,400,000  
 Gain on derivative liability   (26,769 )   -     (26,769 )
 Financing costs   156,474     -     156,474  
 Depreciation and amortization   32,657     43,081     119,386  
 Amortization of debt discount   8,936     -     8,936  
 Donated services   -     -     13,000  
 Stock-based compensation   214,285     131,901     594,102  
 Common stock issued for investor relations services   -     -     45,001  
 Common stock issued for consulting services   36,000     -     36,000  
 Increase in value of warrants due to amendment of term   -     195,671     195,671  
 Gain on sale of fixed assets   (4,784 )   -     (4,784 )
 Changes in net assets and liabilities:                  
   Decrease (increase) in accounts receivable - other   44,923     (15,396 )   (2,287 )
   Decrease (increase) in prepaid expenses and other current assets   (4,883 )   23,782     (12,720 )
   Decrease (increase) in deposits and other   (3,435 )   2,187     (5,698 )
   Increase in accounts payable and accrued liabilities   350,044     152,780     654,854  
Net cash used in operating activities   (61,387 )   (691,796 )   (2,336,794 )
                   
Cash flows from investing activities:                  
 Capital expenditures   (1,265 )   (9,313 )   (66,834 )
 Proceeds from sale of property and equipment   54,424     -     54,424  
 Patent pending   -     (4,675 )   (4,675 )
Net cash provided by (used in) investing activities   53,159     (13,988 )   (17,085 )
                   
Cash flows from financing activities:                  
 Proceeds from loan payable   263,500     75,000     931,813  
 Payments on loan payable   (100,000 )   -     (135,055 )
 Payments of principal on capital lease obligations   (27,058 )   (33,604 )   (120,569 )
 Proceeds (repayments) from loans from related parties   25,847     (17,288 )   37,052  
 Issuance of common stock for cash   15,786     500,000     1,866,786  
 Deferred offering costs   (11,241 )   (20,663 )   (31,904 )
Net cash provided by financing activities   166,834     503,445     2,548,123  
                   
Effects of exchange rate changes on cash and cash equivalents   (15,585 )   (8,726 )   (47,808 )
                   
Net increase during period   143,021     (211,065 )   146,436  
Cash and cash equivalents at beginning of period   3,415     214,480     -  
Cash and cash equivalents at end of period $  146,436   $  3,415   $  146,436  
                   
Supplemental disclosure of cash flow information                  
 Cash paid during the period for:                  
   Interest $  8,090   $  4,479   $  20,538  
   Income taxes $  -   $  -   $  -  

Supplemental Information of Noncash Investing and Financing Activities:

On July 7, 2008, MabCure issued 32,048,400 shares of common stock for the purchase of intellectual property valued at $16,000,000. Refer to Note 3 for further details of this transaction.

On March 5, 2010, MabCure entered into a conversion agreement wherein the Company exchanged $500,000 in outstanding debt and related accrued interest of $15,411 for equity securities. Refer to Note 6 for further details of this transaction.

On February 24, 2011, the Company issued 100,000 shares of common stock, valued at $36,000, for consulting services pursuant to a six-month agreement.

The accompanying notes are an integral part of these consolidated financial statements.

F-6


MABCURE INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

(1)      Summary of Significant Accounting Policies

     Basis of Presentation and Organization

MabCure Inc. (“MabCure” or the “Company”) was incorporated in the State of Nevada on May 8, 2006, under the name of Smartec Holdings, Inc. The Company originally was in the business of developing a detergent for removing pesticides from fruits and vegetables. Because the Company was not successful in implementing its business plan, it considered various alternatives to ensure the viability and solvency of the Company. On January 10, 2008, the Company changed its name to MabCure Inc. to better reflect its new business plan. On January 10, 2008, MabCure entered into an asset purchase agreement with Indigoleaf Associates Ltd. (“Indigoleaf”) and Dr. Amnon Gonenne pursuant to which the Company agreed to purchase all of Indigoleaf’s interest and rights to a proprietary technology for the rapid and efficient generation of monoclonal antibodies against desired antigens such as cancer markers, including, but not limited to, the know-how, secrets, inventions, practices, methods, knowledge and data owned by Indigoleaf. The Company purchased this proprietary technology pursuant to an intellectual property transfer agreement and consummated the other transactions contemplated by the asset purchase agreement on July 7, 2008. Pursuant to the asset purchase agreement, as amended on April 2, 2009, the Company issued 25,638,400 shares of its common stock to Indigoleaf in consideration for the purchase of Indigoleaf’s proprietary technology, and the Company issued 6,409,600 shares of common stock to Dr. Gonenne in consideration for being one of the founders of the Company’s cancer therapy and detection business.

On October 30, 2008, the Company established MabCure, N.V., a wholly-owned subsidiary in Belgium. The Belgian subsidiary was established in order to accelerate the development and commercialization of MabCure’s proprietary products for the early detection of cancer with specific antibodies and for the creation of highly specific therapeutics (antibodies and novel drugs) against cancer.

     Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned Belgian subsidiary, MabCure, N.V. All significant intercompany accounts and transactions have been eliminated in consolidation.

     Cash and Cash Equivalents

For purposes of reporting within the consolidated statements of cash flows, the Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents.

     Property and equipment

Property and equipment are recorded at historical cost. Minor additions and renewals are expensed in the year incurred. Major additions and renewals are capitalized and depreciated over their estimated useful lives. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gain or loss is included in the results of operations for the respective period. The Company uses the straight-line method of depreciation. Depreciation expense for the years ended December 31, 2011 and 2010 totaled $32,657 and $43,081, respectively. The estimated useful lives for significant property and equipment categories are as follows:

Computers and office equipment 3 years
Computer software 3 years
Furniture and Fixtures 5-10 years
Equipment and tools 5 years
Vehicles 5 years

F-7


     Deferred Offering Costs

The Company defers the direct incremental costs of raising capital until such time as the offering is completed. At the time of the completion of the offering, the costs are charged against the capital raised. Should the offering be terminated, deferred offering costs are charged to operations during the period in which the offering is terminated. See Note 4 for additional information.

     Impairment of Intellectual Property

The purchase of intellectual property (IP) from Indigoleaf was accounted for under Accounting Standards Codification (“ASC”) Topic 350. In accordance with ASC Topic 350, the Company performs, at least annually, impairment testing in the last quarter of the year. In the last quarter of 2011, the impairment testing performed led management to write off $11,400,000 of the IP’s value, primarily as a result of the declining stock value of our stock during the year. See Note 3 below for a further discussion.

     Impairment of Long-Lived Assets

The Company evaluates the recoverability of long-lived assets and the related estimated remaining lives at each balance sheet date. The Company records an impairment or change in useful life whenever events or changes in circumstances indicate that the carrying amount may not be recoverable or the useful life has changed. For the years ended December 31, 2011 and 2010, no events or circumstances occurred for which an evaluation of the recoverability of long-lived assets was required.

     Derivative Instruments

In connection with the sale of debt or equity instruments, we may sell options or warrants to purchase our common stock. In certain circumstances, these options or warrants may be classified as derivative liabilities, rather than as equity. Additionally, the debt or equity instruments may contain embedded derivative instruments, such as conversion options, which in certain circumstances may be required to be bifurcated from the associated host instrument and accounted for separately as a derivative instrument asset or liability.

Derivative instruments are re-valued at the end of each reporting period, with changes in the fair value recorded as charges or credits to income, in the period in which the changes occur. We determine the fair value of these instruments using the Black-Scholes option pricing model. That model requires assumptions related to the remaining term of the instruments and risk-free rates of return, our current common stock price and expected dividend yield, and the expected volatility of our common stock price over the life of the option. The identification of, and accounting for, derivative instruments and the assumptions used to value them can significantly affect our financial statements.

     Fair Value of Financial Instruments

The Company estimates the fair value of financial instruments using the available market information and valuation methods. Considerable judgment is required in estimating fair value. Accordingly, the estimates of fair value may not be indicative of the amounts the Company could realize in a current market exchange. As of December 31, 2011, and 2010, the carrying value of the Company’s financial instruments approximated fair value due to the short-term maturity of these instruments.

     Foreign Currency Translation

MabCure accounts for foreign currency translation pursuant to Accounting Standards Codification ("ASC") Topic 830. The functional currency of the Company’s Belgian subsidiary is the euro. Under ASC Topic 830, all assets and liabilities are translated into United States dollars using the current exchange rate at the end of each fiscal period. Revenues and expenses are translated using the average exchange rates prevailing throughout the respective periods. Translation adjustments are included in other comprehensive income (loss) for the period. Certain transactions of the Company’s Belgian subsidiary are denominated in United States dollars. Translation gains or losses related to such transactions are

F-8


recognized for each reporting period in the related interim consolidated statements of operations and comprehensive (loss).

     Basic and Diluted Loss per Share

In accordance with ASC Topic 260, basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted loss per common share is computed similarly to basic loss per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Due to net losses for the years ended December 31, 2011 and 2010, diluted loss per share is calculated using the weighted average number of common shares outstanding and excludes the effects of potential common stock shares that are antidilutive. The potential shares of common stock that have been excluded from the diluted loss per share calculation above for the years ended December 31, 2011 and 2010 were as follows:

  December 31,
  2011   2010
Stock options 2,910,000      660,000
Warrants 5,588,636 (1)   5,300,000

     (1) 4,000,000 of those warrants expired in 2012 post the balance sheet date.

Income Taxes

The Company accounts for income taxes pursuant to ASC Topic 740. Under ASC Topic 740, deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the consolidated financial statement classification of the assets and liabilities generating the differences.

The Company maintains a valuation allowance with respect to deferred tax assets. The Company establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s consolidated financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carryforward period under the Federal tax laws.

Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the realizability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimate.

The Company has adopted the provisions of ASC Topic 740-10-05 "Accounting for Uncertainty in Income Taxes." The ASC clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements. The ASC prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The ASC provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

     Stock-based Compensation

The Company accounts for stock-based compensation in accordance with ASC Topics 505 and 718. Stock-based compensation for stock options is measured based on the estimated fair value of each award on the date of grant using the Black-Scholes valuation model. Stock-based compensation for restricted shares is measured based on the closing fair market value of the Company's common stock price on the date of grate. The Company recognizes stock-based compensation costs as expense ratably on a straight-line basis over the requisite service period.

The allocation of stock-based compensation expense by functional area for the years ended December 31, 2011 and 2010 was as follows:

F-9



    Years Ended December 31,  
    2011     2010  
Research and development $ 44,959   $ 25,422  
General and administrative   169,326     106,479  
Total $ 214,285   $ 131,901  

On May 19, 2011, the Company granted stock options to certain employees, members of the Company Board of Directors, and certain consultants of the Company to purchase a total of 2,250,000 shares of its common stock at an exercise price of $0.50 per share. On September 24, 2010, the Company granted to a newly-appointed director 120,000 options to purchase a like number of shares of common stock. On December 10, 2009, the Company granted to employees 120,000 options to purchase a like number of shares of common stock. On August 10, 2009, the Company granted to directors and officers 420,000 options to purchase a like number of shares of common stock. As of December 31, 2011, 1,960,000 of granted options were fully vested. Fair value was estimated at the date of grant using the Black-Scholes pricing model, with the following weighted average assumptions:

  2011 2010
Risk-free interest rate 1.37% 1.37%
Expected dividend yield None None
Expected life 5 years 5 years
Expected volatility 166.66% 166.66%

The weighted-average grant-date fair values of options granted in 2011 and 2010 were $0.75 and $0.75 per share, respectively.

The risk-free interest rate used in the Black-Scholes valuation method is based on the implied yield currently available in U.S. Treasury securities at maturity with an equivalent term. The Company has not declared or paid any dividends and does not currently expect to do so in the future. The expected term of options represents the period that our stock-based awards are expected to be outstanding and was determined based on projected holding periods for the remaining unexercised shares. Consideration was given to the contractual terms of our stock-based awards, vesting schedules and expectations of future employee behavior. Expected volatility is based on the historical volatility of the stock prices of several companies in the Company’s industry.

The Company’s stock price volatility and option lives involve management’s best estimates, both of which impact the fair value of the option calculated under the Black-Scholes methodology and, ultimately, the expense that will be recognized over the life of the option.

When options are exercised, the policy of the Company is to issue previously unissued shares of common stock to satisfy share option exercises. As of December 31, 2011, the Company had 1,435,984,935 shares of authorized but unissued common stock.

No tax benefits were attributed to the stock-based compensation expense because a valuation allowance was maintained for substantially all net deferred tax assets.

The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with ASC Topic 505. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earlier of a performance commitment or completion of performance by the provider of goods or services as defined by ASC Topic 505.

     Estimates

F-10


The accompanying consolidated financial statements are prepared on the basis of accounting principles generally accepted in the United States of America. The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of December 31, 2010 and 2009, and expenses for the years ended December 31, 2010 and 2009 and cumulative from inception. Actual results could differ from those estimates made by management.

     Reclassification

Certain 2010 amounts have been reclassified to conform to the 2011 presentation.

(2)      Development Stage Activities and Going Concern

The Company is currently in the development stage. The original business plan of the Company was to develop a detergent for removing pesticides from fruits and vegetables. However, the Company has changed its business plan to develop and commercialize its proprietary antibody technology for the early detection of cancer and for the creation of highly specific therapeutics (antibodies and novel drugs) against cancer.

Given the current pace of clinical development of our products, the Company estimates that it has sufficient cash on hand to fund clinical development only through the second quarter of 2012. Management of the Company is making efforts to raise additional funding by obtaining bridge financing in the form of convertible debt.

While management of the Company believes that it will be successful in its capital formation and planned operating activities, there can be no assurance that the Company will be able to raise additional equity capital, or be successful in the development and commercialization of its proprietary antibody technology for the early detection of cancer or for the creation of highly specific therapeutics (antibodies and novel drugs) against cancer that will generate sufficient revenues to sustain the operations of the Company.

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. We did not have sufficient cash to pay our independent registered public accounting firm to complete the audit of our 2011 financial statements included in this Annual Report on Form 10K. As a result, the 2011 financial statements that are included in this Annual Report on Form 10K are presented without the required audit opinions of our independent registered public accounting firm.

MabCure has not established any source of revenues to cover its operating costs, and as such, has incurred an operating loss since inception. Further, as of December 31, 2011 and 2010, the cash resources of the Company were insufficient to meet its current business plan. These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

(3)      Purchase of Intellectual Property and Stock Issuance to Founder

On January 10, 2008, MabCure entered into an asset purchase agreement with Indigoleaf and Dr. Amnon Gonenne pursuant to which the Company agreed to purchase all of Indigoleaf’s interest and rights to a proprietary technology for the rapid and efficient generation of monoclonal antibodies against desired antigens such as cancer markers, including, but not limited to, the know-how, secrets, inventions, practices, methods, knowledge and data owned by Indigoleaf. The Company purchased this proprietary technology pursuant to an intellectual property transfer agreement and consummated the other transactions contemplated by the asset purchase agreement on July 7, 2008. Pursuant to the asset purchase agreement, as amended on April 2, 2009, the Company issued 25,638,400 shares of its common stock to Indigoleaf in consideration for the purchase of Indigoleaf’s proprietary technology, and issued 6,409,600 shares of common stock to Dr. Gonenne in consideration for being one of the founders of the Company’s cancer therapy and detection business. The shares issued were valued at $16,000,000.

F-11


The purchase of intellectual property from Indigoleaf was accounted for under ASC Topic 350. We believe that there are no legal, regulatory, contractual, competitive, or economic factors that limit the useful life of this intangible asset. Consequently, we consider the useful life of this asset to be indefinite. As such, we have recorded no amortization expense.

In accordance with ASC Topic 350, we perform, at least annually, impairment testing in the last quarter of the year. In the last quarter of 2011, the impairment testing performed led management to write down the value of the IP by $11,400,000, primarily as a result of the declining value of the Company’s stock during the year. The $11,400,000 impairment loss is shown as a separate item on the consolidated statement of operations, but is part of the Company’s loss from operations.

(4)      Loan Payable and Lease Obligations

Leases:

     Capital Leases

The Company currently has capital lease commitments for laboratory equipment and vehicles. As of December 31, 2011, and 2010, the total cost of capitalized leases, net of accumulated amortization, presented in the accompanying consolidated balance sheets amounted to $9,091 and $52,583, respectively. Amortization of the capital lease costs for items used in research and development is included in research and development expenses. Amortization of the capital lease costs for items not used in research and development is included in depreciation and amortization expense.

     Operating Lease

In April 2011, the Company relocated its principal executive offices to Brooklyn, New York. The lease in Brooklyn, New York expired on March 15, 2012, and the Company did not renew the lease.

Future noncancellable minimum rental commitments for leases as of December 31, 2011 were as follows:

    Operating     Capital  
Year   Leases     Leases  
2011 $  4,519   $  9,855  
2012   -     -  
Total $  4,519     9,855  
             
Less - Amount representing interest         (764 )
Present value of net minimum lease payments         9,091  
Less - Current portion         (9,091 )
Capital lease obligations, less current portion       $  -  

     Loans Payable and Equity Funding Facility

On October 25, 2011, MabCure entered into a $100,000 senior secured convertible debenture (the “New Debenture”) with Biotech Investment Corp. ("Biotech"), the funds from which were used to pay off MabCure's previous senior secured convertible debenture (the “Old Debenture”) which matured on October 18, 2011. The New Debenture matures on October 20, 2012 and bears interest at the rate of 8% per annum. The New Debenture is convertible into shares of the Company’s common stock at any time prior to maturity, at a price equal to $0.10 per share. As part of the New Debenture agreement, the Company issued 350,000 shares to Biotech.

F-12


The New Debenture includes a security interest on all of the Company’s assets that shall be automatically released following the date that the shares issuable upon conversion of the debenture can be resold without restriction under Rule 144, and 15% of the aggregate volume accrues to the debenture amount.

On June 28, 2011, the Company entered into a one-year working capital agreement with a third party lender for a $63,500 convertible debenture, carrying an interest rate of 14% per annum. The debenture is convertible into shares of common stock beginning December 26, 2011 which is 180 days after the execution of the debenture agreement. Following the 180th day and until the 240th day, the lender may convert the loan at the higher of $0.11 or 50% discount to the “market price”. The agreement defines the “market price” as the average of the three lowest closing bid prices for the Company’s common stock during the 10 trading day period ending one trading day prior to the date the conversion notice is sent by the lender. Following the 240th day, the lender may convert the loan at the lesser of $0.11 or 39% discount to the “market price” as defined above. The Company has the option to prepay the loan at anytime with varying degrees of prepayment penalty. During the two-day period ending on and including the 240th day following the executing of this agreement, the Company may prepay the loan without incurring any prepayment penalties. In connection with this loan, the Company issued 288,636 warrants to purchase the Company’s common stock at an exercise price of $0.11 per share for a term of three years from date of issuance. Proceeds from this loan were received by the Company on July 6, 2011. Post balance sheet date, the lender converted part of the notes into shares as of April ---16--2012, and the balance of the debenture is $35,500.

For financial reporting purposes, the Company recorded a discount of $44,685 to reflect the value of the warrants issued. The estimated value of the warrants was determined using the Black-Scholes option pricing model under the following assumptions: life of 3 years, risk free interest rate of 0.75%, a dividend yield of 0% and volatility of 190.96% . Expected volatility is based on the historical volatility of the stock prices of several companies in the Company’s industry. The discount is being amortized to the date of maturity unless repaid or converted earlier. In addition, the Company has determined that the conversion feature of the debenture is considered to be a derivative financial instrument. Such derivative was recorded at its fair value on December 26, 2011, the date at which the debenture can first be converted, and then marked-to-market at the end of each reporting period.

On January 18, 2011, the Company entered into an investment agreement (“Investment Agreement”) with Centurion Private Equity, LLC (the “Investor”), an affiliate of Roswell Capital Partners, for the provision of an equity line funding facility of up to the amount of $10 million. Pursuant to the terms and conditions of the Investment Agreement, the Company may sell newly issued shares of its common stock (the “Put Shares”) to the Investor (each such sale, a “Put”) from time to time at a price equal to the lesser of (i) 97% of the “Market Price” (as defined below) of its common stock or (ii) the Market Price of its common stock minus $0.01, subject to certain dollar and share volume limitations for each Put, until the earlier of (a) 24 months from the date its registration statement is declared effective, (b) 30 months from the date of the Investment Agreement, or (c) until all Puts under the Investment Agreement have reached an aggregate gross sales price equal to $10 million. The Investment Agreement provides that prior to exercising any Put, the Company must have a registration statement declared effective with the SEC with respect to the Put Shares. Such registration has been declared effective by the SEC on June 27, 2011. “Market Price” means the average of the three lowest daily volume weighted average prices published daily by Bloomberg LP for the Company’s common stock during the fifteen consecutive trading day period immediately following the date specified by the Company on which it intends to exercise the applicable Put. As consideration for the provision of the equity funding facility, the Company issued to the Investor 465,224 commitment shares and 34,892 fee shares to cover the Investor’s transaction fees.

Concurrent with the closing of the Investment Agreement, the Investor purchased a $100,000 senior secured convertible debenture (the "Old Debenture"). The Old Debenture matured on October 18, 2011 and bore interest at the rate of 8% per annum which was payable to the Investor. The Old Debenture was originally convertible into shares of the Company’s common stock at any time prior to maturity, at a price equal to the lesser of (i) a price equal to 90% of the “Conversion Market Price” (as defined below) on the date of the initial issuance of the Old Debenture or (ii) 90% of the Conversion Market Price of the Company’s common stock on the applicable conversion date. “Conversion Market Price” was defined as the average of the three lowest daily volume weighted average prices published daily by Bloomberg, LP for the Company’s common stock over the fifteen consecutive trading day period immediately preceding the date in question.

F-13


On June 6, 2011, the Company entered into an amendment to the Old Debenture, pursuant to which the conversion price of the Old Debenture was fixed at $0.165 per share. In addition, the Company entered into an amendment to the Investment Agreement with the Investor pursuant to which the Company issued to the Investor an additional 465,224 commitment shares. The value of the shares issued, totaling $97,697, was recorded as financing costs and is included in interest expense on the consolidated statement of operations.

The Old Debenture included a security interest on all of the Company’s assets. As discussed above, on October 25, 2011, the Company repaid the Old Debenture using funds received from the New Debenture. As of December 31, 2011, the principle due was $100,000 plus $2,995 of accrued interest.

As described above, as of June 6, 2011, the Old Debenture ceased to contain a conversion option that was considered to be a derivative financial instrument. The Company removed the derivative liability from its consolidated balance sheet as of June 6, 2011 and the fair value of the warrants was reclassified to additional paid-in capital. For the year ended December 31, 2011, gain on derivative liability amounted to $26,769.

In addition, the Company determined that the change in terms of the conversion option to be substantially different and accounted for the amendment as a debt extinguishment. The Company determined that the effect of the amendment was not material.

On December 7, 2010, the Company entered into a loan agreement to obtain a bridge loan of $75,000 from a stockholder. The loan amount bears interest at a rate of ten percent per annum, is unsecured, and is due upon demand. The accrued interest will be payable on the repayment of the loan. The loan amount will be used for ordinary working capital needs. As of December 31, 2011, the principle due was $75,000 plus $8,491 of accrued interest.

The Company received loans from a third-party that were provided for working capital purposes. The loans are non-interest bearing, unsecured, and have no terms for repayment. On each of December 31, 2011 and December 31, 2010, the amount due was $58,258.

Loans payable, net of debt discounts, amounted to $252,073 at December 31, 2011, and to $133,258 at December 31, 2010.

(5)      Stockholders’ Equity

     Common stock

The Company is authorized to issue 1,500,000,000 shares of $0.001 par value common stock. All common stock shares have equal voting rights, are non-assessable, have one vote per share, and entitle stockholders to receive dividends. Upon liquidation or wind-up, stockholders are entitled to participate equally with respect to any distribution of net assets or any dividends which may be declared. Voting rights are not cumulative and, therefore, the holders of more than 50 percent of the common stock could, if they choose to do so, elect all of the Directors of the Company.

Effective November 26, 2007, we filed a certificate of change increasing our authorized capital from 75,000,000 common shares with a par value of $0.001 per common share to 1,500,000,000 common shares with a par value of $0.001 per common share. On that date, we also effected a forward stock split on a twenty-to-one basis. The accompanying consolidated financial statements have been adjusted accordingly to reflect this forward stock split.

On December 20, 2006, the Company issued 51,000,000 shares of common stock at a price of $0.001 per share for total proceeds of $51,000.

On December 11, 2007, 24,000,000 shares of common stock were returned to the treasury and retired. The par value of the returned shares of $24,000 was reallocated to additional paid-in capital.

On June 27, 2008, pursuant to the asset purchase agreement, the Company closed a private placement consisting of 1,300,000 units of MabCure’s securities at a price of $1.00 per unit, for aggregate proceeds of $1,300,000. Each unit

F-14


consists of: (i) one common share; (ii) one non-transferable share purchase warrant entitling the holder thereof to purchase one share of common stock for a period of 12 months commencing from the closing of the asset purchase agreement, at an exercise price of $1.25 per common share; and (iii) one non-transferable share purchase warrant entitling the holder thereof to purchase one share of common stock for a period of 24 months commencing from the closing of the asset purchase agreement, at an exercise price of $1.25 per common share (“Two-Year Warrants”). On September 17, 2010, the Company entered into an amendment of its Subscription Agreement dated June 27, 2008, pursuant to which the Company extended the term of the Two-Year Warrants until June 27, 2012 and reset the exercise price of the Two-Year Warrants to $0.50 per share.

On July 7, 2008, the Company issued 25,638,400 shares of its common stock to Indigoleaf Associates Ltd, and 6,409,600 shares of the Company’s common stock to Dr. Amnon Gonenne following the asset purchase agreement discussed in Note 3.

On October 28, 2009, the Company issued 51,725 shares of common stock to a third party provider of investor relations services pursuant to a consulting agreement dated August 7, 2009. The value of the transaction was $45,001.

On September 2, 2009, the Company entered into a loan agreement to obtain a bridge loan of $500,000 from a third-party lender for ordinary working capital needs. On March 5, 2010, the Company entered into a conversion agreement with the lender, pursuant to which the loan and all accrued interest was converted into equity securities. In full repayment of the loan and all accrued interest, the Company issued to the lender 1,000,000 units, with each unit consisting of: (i) one common share; (ii) one non-transferable share purchase warrant entitling the holder thereof to purchase one share of common stock until February 16, 2012, at a price per share of $0.60; and (iii) one non-transferable common stock purchase warrant entitling the holder thereof to purchase one share of common stock until February 16, 2012, at a price per share of $0.70.

On March 5, 2010, the Company closed an offshore private placement consisting of 1,000,000 units of securities at a price of $0.50 per unit, for aggregate proceeds of $500,000. Each unit consists of: (i) one common share; (ii) one non-transferable share purchase warrant entitling the holder thereof to purchase one share of common stock for a period of 24 months commencing from the closing of the private placement agreement, at an exercise price of $0.60 per common share; and (iii) one non-transferable share purchase warrant entitling the holder thereof to purchase one share of common stock for a period of 24 months commencing from the closing of the private placement agreement, at an exercise price of $0.70 per common share.

On February 24, 2011, the Company issued 100,000 shares of common stock, valued at $36,000, to a third party provider of consulting services to raise financing pursuant to a six-month agreement dated February 24, 2011. The value of the stock issuance was recognized as deferred compensation and was amortized over the six-month term of the agreement. Stock compensation amounted to $36,000 for the year ended December 31, 2011 and is included in general and administrative expenses.

On June 6, 2011, the Company issued 465,224 shares of common stock in connection with the change of terms of the Old Debenture, as outlined in the previous note.

On June 29, 2011, the Company issued 100,000 shares in connection with its first Put notice under the Equity Funding Facility outlined in Note 4. Under this first Put, the Company received proceeds of $10,829 on July 27, 2011.

On October 26, 2011, the Company issued 350,000 shares to Biotech in connection with the New Debenture entered into on October 25, 2011, which transaction is discussed in more detail in Note 4 to the Consolidated Financial Statements.

On November 29, 2011, the Company issued 100,000 shares in connection with its second Put notice under the Equity Funding Facility outlined in Note 4. Under this second Put, the Company received proceeds of $4,957 on December 27, 2011.

     Stock options

F-15


On August 4, 2009, as part of the Company’s Annual Meeting of Shareholders, the shareholders of the Company approved the adoption of the MabCure, Inc. 2009 Stock Option Plan (the “Plan”). The purpose of this Plan is to retain the services of valued key employees and consultants of the Company and to encourage such persons to acquire a greater proprietary interest in the Company, thereby strengthening their incentive to achieve the objectives of the shareholders of the Company, and to serve as an aid and inducement in the hiring of new employees and to provide an equity incentive to consultants and other persons selected by the Company. The Company has reserved 6,034,800 shares of common stock, par value $0.001 per share, for issuance under the Plan, subject to adjustment to protect against dilution in the event of certain changes in the Company’s capitalization.

The following is a summary of stock option grants issued under the Plan:

In August 2009, the Company granted an option to each of two members of the Company’s Board of Directors to purchase 120,000 shares (total of 240,000 shares) of its common stock at an exercise price of $0.87 per share.

In August 2009, the Company granted an option to purchase 180,000 shares of its common stock at an exercise price of $0.87 per share to its Chief Financial Officer.

In December 2009, the Company granted an option to purchase 120,000 shares of its common stock at an exercise price of $0.65 per share to certain employees of the Company.

In September 2010, the Company granted to a newly-appointed member of the Company’s Board of Directors options to purchase 120,000 shares of its common stock at an exercise price of $0.45 per share.

On May 19, 2011, the Company granted stock options to certain employees, members of the Company Board of Directors, and certain consultants of the Company to purchase a total of 2,250,000 shares of its common stock at an exercise price of $0.50 per share. The terms of the options include the following:

1.           Options for 850,000 shares of common stock that vest over periods of one to three years and expire five years from the date of vesting.

2.           Options for 1,400,000 shares of common stock that vest upon the completion of qualified financing (as defined) and expire five years from the date of such qualified financing.

The following table summarizes stock option activity for the Company during the year ended December 31, 2011:

    Weighted Weighted Average  
  Options Average Remaining Aggregate
    Exercise Price Contractual Term Intrinsic Value
Outstanding December 31, 2008 None      
     Granted 540,000 $0.82    
     Exercised - -    
     Forfeited or expired - -    
Outstanding December 31, 2009 540,000 $0.82 4.68 -
     Granted 120,000 $0.45 4.73 -
     Exercised - - - -
     Forfeited or expired - - - -
Outstanding December 31, 2010 660,000 $0.75 3.87 -
     Granted 2,250,000 $0.50 4.73 -
     Exercised - - - -
     Forfeited or expired - - - -
     Outstanding December 31, 2011 2,910,000 $0.75 3.87 -
Vested and Exercisable at December 31, 2011 1,960,000 $0.83 3.67 -

As of December 31, 2011, the total unrecognized compensation cost related to stock options amounted to $86,879, which will be recognized over the remaining requisite service period through October 2011.

Warrants

F-16


A summary of the warrants outstanding at December 31, 2011 is as follows:

Warrants Exercise Expiration
  Price Date
1,300,000 $0.50 June 2012
2,000,000 $0.60 February 2012
2,000,000 $0.70 February 2012
   288,636 $0.11 June 2014
5,588,636    

(6)      Income Taxes

Components of loss before income taxes for the years ended December 31, 2011 and 2010 are as follows:

    2011     2010  
United States $  (12,126,504 ) $  (778,792 )
Belgium   (138,333 )   (447,010 )
             
Total $  (12,264,837 ) $  (1,225,802 )

MabCure is subject to U.S. income taxes. The Company’s subsidiary incorporated in Belgium is subject to Belgian income taxes. The effective tax rates used to calculate deferred income taxes are 34% for the United States and 33.99% for Belgium.

At December 31, 2011, the Company had available approximately $1.8 million of net operating loss carry forwards, for U.S. income tax purposes which expire in the years 2026 through 2030. The Company’s subsidiary has Belgian net operating loss carryforwards of $940,000 with no expiration date.

Significant components of the Company’s deferred tax assets at December 31, 2011 and 2010 are as follows:

    2011     2010  
Net operating loss carryforwards $  936,664   $  936,664  
Accrued salaries   22,351     22,351  
Stock based compensation   78,185     78,185  
Accrued expenses   (1,457 )   (1,457 )
             
Total deferred tax assets   1,035,743     1,035,743  
Valuation allowance   (1,035,743 )   (1,035,743 )
             
Net deferred tax assets $  —   $  —  

Due to the uncertainty of their realization, no income tax benefit has been recorded by the Company for these deferred tax assets as valuation allowances have been established for any such benefits. The increase in the valuation allowance was the result of increases in the above stated items.

At December 31, 2011 and 2010, the Company had no material unrecognized tax benefits and no adjustments to liabilities or operations were required. The Company does not expect that its unrecognized tax benefits will materially increase within the next twelve months. We recognize interest and penalties related to uncertain tax positions in general and administrative expense. As of December 31, 2011 and 2010, we have not recorded any provisions for accrued interest and penalties related to uncertain tax positions.

MabCure files U.S. federal and state income tax returns in jurisdictions with varying statutes of limitations. The 2007 through 2010 tax years generally remain subject to examination by federal and state tax authorities. The Company’s

F-17


subsidiary filed its initial return covering the period October 24, 2008 through December 31, 2009 in 2010 and such return is subject to examination by Belgian tax authorities for three years.

(7)      Related Party Transactions

As of December 31, 2011, and 2010, the Company owed to directors and officers of the Company a total of $43,811 and $10,629, respectively, for various working capital loans received by the Company. The loans are unsecured, non-interest bearing, and have no terms for repayment.

(8)      Commitments and Contingencies

Commitments

The Company is subject to various commitments under contractual and other commercial obligations. Refer to Note 4 entitled “Loan Payable and Lease Obligations” for minimum rental commitments under non-cancelable operating and capital lease obligations as of December 31, 2011.

Contingencies

On January 10, 2011, the Company received a letter from counsel to Dr. Elisha Orr, our former Chief Scientific Officer, demanding payment of approximately $160,000 for unpaid management services fees, including payment for a three-month notice period, and for the reimbursement of certain expenses. In the Company’s response to Dr. Orr’s counsel, the Company has refuted the claims presented in the letter primarily because Dr. Orr was dismissed for breach and therefore was not entitled to three months notice, and because the Company fully reimbursed Dr. Orr for all reimbursable expenses. Upon Dr. Orr’s return of certain Company property in his possession, the Company intends to reconcile all amounts and pay Dr. Orr the amounts that are owed to him, which include amounts related to unpaid salaries and management service fees totaling $99,839 as of December 31, 2011, and which have been recorded under accounts payable and accrued liabilities.

(9)      Recent Accounting Pronouncements

In January 2010, the FASB issued ASU 2010-06, "Improving Disclosures about Fair Value Measurements.” This update requires additional disclosure within the roll forward of activity for assets and liabilities measured at fair value on a recurring basis, including transfers of assets and liabilities between Level 1 and Level 2 of the fair value hierarchy and the separate presentation of purchases, sales, issuances and settlements of assets and liabilities within Level 3 of the fair value hierarchy. In addition, the update requires enhanced disclosures of the valuation techniques and inputs used in the fair value measurements within Levels 2 and 3. The new disclosure requirements are effective for interim and annual periods beginning after December 15, 2009, except for the disclosure of purchases, sales, issuances and settlements of Level 3 measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010. As ASU 2010-06 only requires enhanced disclosures, the Company does not expect that the adoption of this update will have a material effect on its financial statements.

In February 2010, the FASB issued ASU No. 2010-09, "Amendments to Certain Recognition and Disclosure Requirements,” which eliminates the requirement for SEC filers to disclose the date through which an entity has evaluated subsequent events. ASC No. 2010-09 is effective for its fiscal quarter beginning after December 15, 2010. The adoption of ASC No. 2010-06 will not have a material impact on the Company's financial statements.

In April 2010, the FASB issued Accounting Standards Update 2010-13, “Compensation—Stock Compensation (Topic 718): Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades,” or ASU 2010-13. ASU 2010-13 provides amendments to Topic 718 to clarify that an employee share-based payment award with an exercise price denominated in currency of a market in which a substantial porting of the entity’s equity securities trades should not be considered to contain a condition that is not a market, performance, or service condition. Therefore, an entity would not classify such an award as a liability if it otherwise qualifies as equity. The amendments in this Update are effective for fiscal years, and interim periods within

F-18


those fiscal years, beginning on or after December 15, 2010. The Company does not expect the adoption of ASU 2010-17 to have a significant impact on its consolidated financial statements.

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC did not, or are not believed by management to, have a material impact on the Company’s present or future consolidated financial statements.

(10)    Subsequent Events

On March 20, 2012, the Company entered into an agreement with the City College of NY (CCNY) to retain CCNY to perform services relating to the validation and optimization of the Company's ovarian cancer diagnostic reagents.

F-19


ITEM 9.              CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A.           CONTROLS AND PROCEDURES

(a) Disclosure Controls and Procedures

Disclosure controls and procedures are the controls and other procedures that are designed to provide reasonable assurance that information required to be disclosed by the issuer in the reports that it files or submits under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including the principal executive and principal financial officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

We have carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act as of the end of the fiscal year covered by this Annual Report.

Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were not effective as of the end of the fiscal year covered by this Annual Report on Form 10-K.

(b) Management’s Annual Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Securities Exchange Act Rule 13a-15(f). Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with U.S. GAAP.

Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, we conducted an assessment of the design and effectiveness of our internal control over financial reporting as of the fiscal year covered by this Report based on the framework issued by the Committee of Sponsoring Organizations (“COSO”) of the Treadway Commission in Internal Control—Integrated Framework.

Based on this assessment, management concluded that, as of December 31, 2011, the Company’s internal control over financial reporting was not effective. Our management reached this conclusion after identifying the following two areas of material weakness in our internal control systems:

  1.

Inadequate and ineffective application of complex accounting; and

  2.

Management did not sufficiently monitor internal control over financial reporting. Specifically the Company did not have sufficient personnel with an appropriate level of technical accounting knowledge and experience who could execute appropriate application of complex accounting with respect to stock compensation and warrant modification.

We plan to take steps to enhance and improve the design of our internal control over financial reporting. During the period covered by this annual report on Form 10-K, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we intend to hire on an as-needed outsourced basis, a qualified person to address the above stated issues; however, the remediation effort is dependent upon our securing additional financing to cover the

19


costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be materially adversely affected.

This Annual Report does not include an attestation report of our Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the SEC that permit the Company to provide only management’s report in this Annual Report.

(c) Change in Internal Control over Financial Reporting

There were no significant changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our fourth fiscal quarter, that could materially affect, or are reasonably likely to materially affect, our internal control over financial reporting.

(d) Limitations on the Effectiveness of Internal Controls

Our management, including our Chief Executive Officer and our Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting are or will be capable of preventing or detecting all errors or all fraud. Any control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements, due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns may occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risk.

ITEM 9B.           OTHER INFORMATION

None.

20


PART III

ITEM 10.           DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Directors, Executive Officers, Promoters and Control Persons

The following individuals serve as the Directors and executive officers of our Company. All Directors of our Company hold office until the next annual meeting of our shareholders or until their successors have been elected and qualified. The executive officers of our Company are appointed by our Board of Directors and hold office until their death, resignation, or removal from office:

Name Age Position Held with our Company Date First Elected or Appointed
Dr. Amnon Gonenne 68 President, Chief Executive Officer and Director July 7, 2008
Dr. David S. Frank 67 Director April 26, 2009
Dr. Charles T. Tackney 62 Chief Scientific Officer December 2, 2010
Dov Weinberg 59 Chief Financial Officer March 1, 2012

Business Experience

The following is a brief account of the education and business experience during at least the past five years of each Director, executive officer, and key employee of our Company, indicating the person's principal occupation during that period, and the name and principal business of the organization in which such occupation and employment were carried out.

Dr. Amnon Gonenne, President, Chief Executive Officer, and Director

Dr. Gonenne has more than twenty years experience in the biotechnology field. He has held a number of top executive positions including positions in regulatory affairs, supervision of international clinical trials, serving as Vice-President of Corporate Development for Biotechnology General Corp. in New York and serving as Chief Executive Officer of Immunotherapy Inc. in New York. He has played a significant role in the successful registration and licensing of several genetically engineered products in the United States, Israel, and Japan. Between the years 2000 and 2002, he served as Chief Executive Officer of a venture capital fund, Elscint Biomedical Investment (Israel), which made major investments in Gamida Cell Ltd. (Israel), a leading stem cell company. Since 2002, and prior to joining MabCure, Dr. Gonenne worked as an independent bio-tech consultant for start-up companies.

Dr. Gonenne received his Doctorate degree in Biochemistry and Biophysics from Syracuse University and completed his post-doctorate training at the University of California, San Diego Medical School.

The Board has concluded that Dr. Gonenne should serve as a Director of the Company because of his experience as one of the founders of the Company’s cancer therapy and detection business, his experience as the Company’s Chief Executive Officer, and his more than twenty years experience in the biotechnology field.

Dr. David S. Frank, Director

Dr. Frank is the Managing Director of MEDx Associates, a consulting company in the field of diagnostics. He also serves as the Chairman of the Board of Nehora Photonics Ltd., a medical device company located in Israel. From 2007-2010, Dr. Frank served as a faculty member at the LAHAV-Tel Aviv University Graduate School of Business, where he taught “Health Care Technology” courses for bioscience entrepreneurs. From 1995-2007, Dr. Frank was the executive director of business development at Ortho-Clinical Diagnostics, a Johnson & Johnson company.

Dr. Frank received his Doctorate degree in Biochemistry from Cornell University.

21


The Board has concluded that Dr. Frank should serve as a Director of the Company because of his rich background in working for clinical diagnostics companies, his extensive knowledge of the bio-technology industry, and his experience in bio-technology business development.

Dr. Charles Tackney, Chief Scientific Officer

Dr. Tackney is a scientific and business leader with diverse experience in clinical medicine and new technology development, spanning the areas of molecular biology, biotechnology and diagnostics. Since 2009, he has served as the Chief Scientific Officer at NeuroMark Genomics, Inc. From 1997 through 2008, Dr. Tackney worked in various positions for the Ortho Clinical Diagnostics unit of Johnson & Johnson, including, (i) Director, Diagnostic Biomarker Evaluation Group, (ii) Scientific Director, Advanced Research & Technology Assessment World Wide, (iii) Director, Prion Research Group, (iv) Hepatitis Director, Worldwide Marketing, (v) Group Leader, Protein Engineering, and (vi) Senior Scientist, Department of New Technology R&D. From 1994 through 1997, Dr. Tackney served as a consultant for Access BioResource. From 1985 through 1994, Dr. Tackney served as the Director of the Department of Molecular Biology at ImClone Systems Inc.

Dr. Tackney earned his PhD in molecular genetics from the City University of New York and was awarded a postdoctoral research fellowship from the Damon Runyon Foundation at Columbia University College of Physicians and Surgeons.

Dov Weinberg, Chief Financial Officer

Mr. Weinberg has more than 11 years of experience in the medical device area. He is an owner and president of Weinberg Dalyo Inc., a U.S corporation, which renders business development and financial services to companies in the life science industry. Mr. Weinberg has been serving as CFO of QRS systems Inc. Innovate Inc. Orgenesis Inc. and NaNaMEd LLC, and was the Chief Financial officer of Impulse Dynamics from December 2000 till 2009. Prior to that Mr. Weinberg served for more than 15 years as the CFO of a large industrial multinational public corporation in charge of finance, information systems, and taxation of the company and its worldwide subsidiaries.

Mr. Weinberg is a Certified Public Accountant since 1979 and holds an MBA from Bar Ilan University (1984) and a B.A. in Economics and Accounting from Tel Aviv University (1997).

Board Leadership Structure

The Company has chosen to combine the principal executive officer and Board chairman positions. The Company believes that this Board leadership structure is the most appropriate for the Company for the following reasons. First, the Company is a development stage company and at this early stage, it is more efficient to have the leadership of the Board in the same hands as the principal executive officer of the Company. The challenges faced by the Company at this stage – obtaining financing and performing research and development activities – are most efficiently dealt with by having one person intimately familiar with both the operational aspects as well as the strategic aspects of the Company’s business. Second, Dr. Gonenne is uniquely suited to fulfill both positions of responsibility because he possesses both the strategic vision as well as the hands-on management experience that the Company needs to execute its business plan.

Family Relationships

There are no family relationships among our Directors or executive officers.

Involvement in Certain Legal Proceedings

None of our Directors, executive officers, promoters or control persons has been involved in any of the following events during the past ten years:

  • any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

22


  • any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offences);

  • being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or

  • being found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

Committees of the Board of Directors

At present, we do not have any committees of the Board of Directors.

Code of Ethics

At present, we have not adopted a Code of Ethics applicable to our principal executive, financial and accounting officers; however, we are considering whether to implement such a Code in the near future.

Compliance with Section 16(a) of the Securities Exchange Act

Section 16(a) of the Exchange Act requires our Directors, executive officers and persons who own more than 10 percent of a registered class of our equity securities to file with the SEC initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our Common Shares and other equity securities, on Forms 3, 4 and 5 respectively. Directors, executive officers and persons who own more than 10 percent of a registered class of our equity securities are required by the SEC regulations to furnish us with copies of all Section 16(a) reports that they file.

Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we believe that all filing requirements applicable to our Directors, executive officers, and persons who own more than 10 percent of a registered class of our equity securities were complied with.

Audit Committee

We do not presently have a separately constituted audit committee or any other committees of our Board of Directors. Nor do we have an audit committee “financial expert.” As such, our entire Board of Directors acts as our audit committee.

Board’s Role in Risk Oversight

The Board assesses on an ongoing basis the risks faced by the Company. These risks include financial, technological, competitive, and operational risks. The Board dedicates time at each of its meetings to review and consider the relevant risks faced by the Company at that time. In addition, since the Company does not have an Audit Committee, the entire Board is also responsible for the assessment and oversight of the Company’s financial risk exposures.

ITEM 11.           EXECUTIVE COMPENSATION

The particulars of compensation paid to the following persons during the fiscal period ended December 31, 2011, are set out in the summary compensation table below:

  • our Chief Executive Officer (Principal Executive Officer);
  • our Chief Financial Officer (Principal Financial Officer);

23


  • each of our three most highly compensated executive officers, other than the Principal Executive Officer and the Principal Financial Officer, who were serving as executive officers at the end of the fiscal year ended December 31, 2011; and
  • up to two additional individuals for whom disclosure would have been provided under the item above but for the fact that the individual was not serving as our executive officer at the end of the fiscal year ended December 31, 2011;

(Collectively, the “Named Executive Officers”):

SUMMARY COMPENSATION TABLE




Name




Year



Salary
($)(8)



Bonus
($)


Stock
Awards
($)


Option
Awards
($)

Non-Equity
Incentive Plan
Compensation
($)
Nonqualified
Deferred
Compensation
Earnings
($)


All Other
Compensation
($)



Total
($)
Dr. Amnon
Gonenne(1)
2011
2010
168,000
168,000
0
0
0
0
5,081(4)
0
0
0
0
0
6,945(7)
5,976 (7)
180,026
173,976
Ron Kalfus(2)
2011
2010
96,000
96,000
0
0
0
0
72,291(5)
0
0
0
0
0
0
0
168,291
96,000
Dr. Charles T.
Tackney(3)
2011
2010
100,000
3,014
0
0
0
0
10,617(6)
0
0
0
0
0
0
0
110,617
3,014

Notes:

  (1)

Dr. Gonenne has been our President, Chief Executive Officer (Principal Executive Officer), and a Director since July 7, 2008.

  (2)

Mr. Kalfus served as our Chief Financial Officer (Principal Financial Officer) from November 7, 2008 through February 29, 2012.

  (3)

Dr. Tackney has been our Chief Scientific Officer since December 2, 2010.

  (4)

In 2011, Dr. Gonenne was granted 200,000 options to purchase like number of shares of common stock.

  (5)

In 2011, Mr. Kalfus was granted 1,000,000 options to purchase a like number of shares of common stock.

  (6)

In 2011, Dr. Tackney was granted 200,000 options to purchase like number of shares of common stock. In addition, pursuant to Dr. Tackney’s employment agreement, the Company undertook to grant Dr. Tackney 200,000 options to purchase a like number of shares of common stock, but as of December 31, 2011 the Board had yet to formally grant the options to Dr. Tackney.

  (7)

Represents rent paid for Dr. Gonenne’s personal residence. During 2010 and 2011, Dr. Gonenne's personal residence also served as the location of the Company's primary office in Belgium.

  (8)

The salary amounts actually paid were, for Dr Gonenne $63,000 in 2011 and $105,000 in 2010. for Dr.Tackney $36,348 in 2011 and $3,014 in 2010 and for Mr Kalfus $40,000 in 2011 and $72,000 in 2010

Stock option grants

The following table sets forth information as of December 31, 2011 concerning unexercised options, unvested stock and equity incentive plan awards for the executive officers named in the Summary Compensation Table.

Name




Number of Securities
Underlying
Unexercised Options
(#)
Exercisable
Number of Securities
Underlying
Unexercised Options
(#)
Unexercisable
Equity Incentive Plan
Awards: Number of
Securities Underlying
Unexercised Unearned
Options
(#)
Option Exercise
Price
($)


Option Expiration
Date



Ron Kalfus 1,180,000 600,000(1) 0 $0.87 August 10, 2014
Dr. Charles Tackney 200,000 100,000(2) 0 $0.50 May 19, 2016

  (1)

Since Mr. Kalfus is no longer employed by the Company, 200,000 unexercisable options have been forfeited. And 400,000 has been granted vesting in March 2012

24



  (2)

40,000 of the above 100,000 unexercisable options will vest and become exercisable on May 19, 2012 and the remaining 60,000 options will vest and become exercisable in equal amounts of 30,000 on May 19, 2013 and May 19, 2014.

Employment Contracts and Termination of Employment Agreements

As of July 7, 2008, we entered into an employment agreement with Dr. Amnon Gonenne, pursuant to which Dr. Gonenne serves as our President and Chief Executive Officer. In consideration for his services, we pay him an annual salary of $168,000, plus such benefits and bonuses as are set out in his employment agreement. The term of the agreement is for an indefinite period and may be terminated with or without cause, according to the terms of the agreement.

As of November 7, 2008, we entered into an employment agreement with Mr. Ron Kalfus, pursuant to which Mr. Kalfus served as our Chief Financial Officer. In consideration for his services, we paid him an annual salary of $96,000, plus such benefits as are set out in his employment agreement. The term of the agreement was for an indefinite period and may be terminated with or without cause, according to the terms of the agreement. On February 2, 2012, Mr. Ron Kalfus, the Company's Chief Financial Officer, informed the Company that he was resigning from his position as CFO, which resignation went into effect on February 29, 2012.

We entered into an employment agreement with Dr. Charles T. Tackney, effective as of December 2, 2010, pursuant to which Dr. Tackney serves as our Chief Scientific Officer. In consideration for his services, we pay him an annual salary of $100,000, plus such benefits as are set out in his employment agreement. The term of the agreement is for an indefinite period and may be terminated with or without cause, according to the terms of the agreement.

On February 29, 2012, we entered into a management services agreement with the Mr. Dov Weinberg. The agreement sets forth standard terms of services, covering matters such as financial services and compensation, as well as customary confidentiality and proprietary information provisions. Pursuant to his management services agreement, we will pay Mr. Weinberg a monthly fee of $5,000. In addition, we will grant Mr. Weinberg 200,000 stock options entitling Mr. Weinberg to purchase 200,000 shares of our common stock at the fair market value of the stock on the date of grant. The stock options will vest over a 3 year period.

There are currently no arrangements or plans in which we provide pension, retirement or similar benefits for our Directors and officers; however our Board of Directors may approve any such plan at any time in their discretion, in which case Dr. Gonenne, Dr. Tackney, and Mr. Kalfus will participate in such plans. We currently do not have any material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our Directors or officers, except that we have agreed that each of Dr. Tackney and Dr. Gonenne are eligible to receive an annual discretionary bonus and that stock options may be granted at the discretion of our Board in the future.

We have no plans or arrangements in respect of remuneration received or that may be received by the officers to compensate such officers in the event of termination of employment (as a result of resignation, retirement, change of control) or a change of responsibilities following a change of control, with the exception of a severance payment of one month’s salary for every full year of service. The Company has also undertaken to grant stock options to its employees, and the options to be granted will vest in the event of a change in control of the Company.

Director Compensation

Our Board of Directors has adopted that each director of the Company receive: (i) a $4,000 annual payment for services rendered as a Director; (ii) an additional $8,000 annual payment for serving on one or more committees of the Board; and (iii) reimbursement for any reasonable expenses incurred in the performance of the duties and functions of a director. During 2011 and 2010, we paid $2,667 and $9,333, respectively, to directors of the Company and owe an additional $8,667 and $5,666, respectively, for the services of our directors during 2011 and 2010.

25



 DIRECTOR COMPENSATION TABLE FOR FISCAL 2011 






Name


Fees
earned or
paid in
cash
($)




Stock
Awards
($)




Option
Awards
($)



Non-Equity
Incentive Plan
Compensation
($)
Change in
Pension Value
Nonqualified
Deferred
Compensation
Earnings
($)




All Other
Compensation
($)





Total
($)
Dr. David S. Frank 4,000 0 5,081(2) 0 0 0 9,081
Gad Berdugo(1) 1,667 0 2,540(3) 0 0 0 4,207

Notes:

  (1)

Mr. Berdugo resigned from the Board of Directors of MabCure on June 2, 2011

  (2)

In 2011, Dr. Frank was granted 200,000 options to purchase like number of shares of common stock, which became fully vested on November 15, 2011.

  (3)

In 2011, Mr. Berdugo was granted 200,000 options to purchase like number of shares of common stock, 100,000 of which became fully vested on November 15, 2011 and 100,000 were forfeited following Mr. Berdugo’s resignation from the Board.


ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Beneficial Ownership of Holdings

The following table sets forth, as of March , 2012, certain information with respect to the beneficial ownership of our common stock by each stockholder known by us to be the beneficial owner of more than 5 percent of our common stock, as well as by each of our current Directors and executive officers as a group. Each person has sole voting and investment power with respect to the shares of common stock, except as otherwise indicated. Beneficial ownership consists of a direct interest in the shares of common stock, except as otherwise indicated.

Name and Address
of Beneficial Owner

Title of Class
Amount and Nature of
Beneficial Ownership(1)

Percentage of Class(2)
Indigoleaf Associates Ltd.(3)
Unit 6 – The Court Yard
Gaulby Lane, Stoughton
Leicester, United Kingdom LE2 2FL
Common Stock 25,638,400 39.8%
Dr. Amnon Gonenne
228 Park Ave S#15740
New York, NY 10003
Common Stock 6,409,600 10.0%
Dov Weinberg Common Stock 0(4) 0%
Dr. Charles T. Tackney Common Stock 100,000(5) <1.00%
David Frank Common Stock 320,000(6) <1.00%
Directors and Executive Officers as a Group (4 people) Common Stock 8,009,600 11.63%
Directors and Executive Officers and 5% Stockholders as a Group Common Stock 33,548,000 48.71%

Notes:

  (1)

Except as otherwise indicated, we believe that the beneficial owners of the common stock listed above, based on information furnished by such owners, have sole investment and voting power with respect to such shares, subject to community property laws where applicable. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of common stock subject to options or warrants currently exercisable, or exercisable within 60 days, are deemed outstanding for purposes of computing the percentage ownership of

26



the person holding such option or warrants, but are not deemed outstanding for purposes of computing the percentage ownership of any other person. Unless otherwise indicated, the address of each person listed is c/o MabCure Inc., 228 Park Ave S #15740, New York, NY 10003.

     
  (2)

Based on 64,363,902 shares of common stock issued and outstanding as of March 31__, 2012.

     
  (3)

Dr. Elisha Orr, our former Chief Scientific Officer, is the sole shareholder of Indigoleaf Associates Ltd.

     
  (4)

We issued [200,000] options to Dov Weinberg, but none of the options have vested.

     
  (5)

We issued 200,000 options to Dr. Charles Tackney, of which 100,000 have vested and are exercisable.

     
  (6)

We issued 320,000 options to David Frank, all of which have vested and are exercisable.

Changes in Control

We are unaware of any contract or other arrangement the operation of which may at a subsequent date result in a change of control of our Company.

Equity Compensation Plan Information








Plan category

Number of securities
to be issued upon
exercise of outstanding
options, warrants and
rights

(a)


Weighted-average
exercise price of
outstanding options,
warrants and rights

(b)
Number of securities
remaining available for
future issuance under equity
compensation plans
(excluding securities reflected
in column (a))

(c)
Equity compensation plans approved by security holders 3,110,000 0.75 2,924,800
Total 3,110,000 0.75 2,924,800

ITEM 13.           CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

Since the beginning of the fiscal year preceding the last fiscal year and except as disclosed below, none of the following persons has had any direct or indirect material interest in any transaction to which our Company was or is a party, or in any proposed transaction to which our Company proposes to be a party:

  • any Director or officer of our Company;

  • any proposed Director of officer of our Company;

  • any person who beneficially owns, directly or indirectly, shares carrying more than 5 percent of the voting rights attached to our common stock; or

  • any member of the immediate family of any of the foregoing persons (including a spouse, parents, children, siblings, and in-laws).

As of December 31, 2011, we owed to certain of our directors and officers $43,811 for various working capital loans received by us through December 31, 2011. The loans are unsecured, non-interest bearing, and have no terms for repayment.

27


Dr. Amnon Gonenne is not an Independent Director of the Company as he is an executive officer. Dr. David S. Frank is an Independent Director. The determination of independence of Directors has been made using the definition of "Independent Director" contained under Nasdaq Marketplace Rule 4200(a)(15).

ITEM 14.           PRINCIPAL ACCOUNTING FEES AND SERVICES

Audit Fees

During calendar year 2011, we utilized two independent registered public accounting firms:

From November 3, 2008 through March 9, 2011, our principal independent accountant was Etania Audit Group, P.C. (“Etania”) (formerly known as Davis Accounting Group). Etania audited the Company’s December 31, 2009 financial statements and reviewed the quarters ended March 31, 2010 and 2009, June 30, 2010 and 2009 and September 30, 2010 and 2009. In the first quarter of 2011, the Securities and Exchange Commission advised us that Etania was not duly licensed when it issued its audit opinion on the Company’s financial statements included in the Company’s annual reports on Form 10-K for the years ended December 31, 2009 and 2008. Accordingly, the SEC required us to have our financial statements for the years ended December 31, 2009 and 2008 audited by a different firm.

In March 2011, we engaged Rotenberg Meril Solomon Bertiger & Guttilla, P.C. (“Rotenberg Meril”) to serve as the independent registered public accounting firm of the Company. Rotenberg Meril has audited our financial statements for the years ended December 31, 2010, 2009 and 2008.

The aggregate fees billed or billable for each of the last two fiscal years for professional services rendered by the principal account for the audit of our financial statements and review of financial statements included in our quarterly Reports on Form 10-Q and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:

  December 31, 2011(1) December 31, 2010(2)
Audit Fees $21,000 $36,000
Audit Related Fees 0 0
Tax Fees $500 $500
All Other Fees 0 0

Notes:

  (1)

For the year ended December 31, 2011, audit fees to Rotenberg Meril totaled $21,000.

  (2)

For the year ended December 31, 2010, audit fees to Rotenberg Meril totaled $21,000 and $15,000 to Etania. Tax fees to Etania totaled $500.

In each of the last two fiscal years ended December 31, 2011 and 2010, there were no fees billed for assurance and related services by the principal accountant that are reasonably related to the performance of the audit or review of our financial statements and are not reported under Item 9(e)(1) of Schedule 14A, for professional services rendered by the principal account for tax compliance, tax advice, and tax planning, for products and services provided by the principal accountant, other than the services reported in Item 9(e)(1) through 9(d)(3) of Schedule 14A.

Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors

Given the small size of our Board as well as the limited activities of our Company, our Board of Directors acts as our Audit Committee. Our Board pre-approves all audit and permissible non-audit services. These services may include audit services, audit-related services, tax services, and other services. Our Board approves these services on a case-by-case basis.

28


PART IV

ITEM 15.           EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a) Financial Statements and financial statement schedules

(1) and (2) The financial statements and financial statement schedules required to be filed as part of this report are set forth in Item 8 of Part II of this report.

(3) Exhibits. See Item 15(b) below.

(b) Exhibits required by Item 601 of Regulation S-K

Exhibit No.

Description

3.1

Articles of Incorporation (incorporated by reference from our Registration Statement on Form SB-2 filed on March 8, 2007).

   

3.2

Bylaws (incorporated by reference from our Registration Statement on Form SB-2 filed on March 8, 2007).

   

3.3

Certificate of Change (incorporated by reference from our Quarterly Report on Form 10-QSB filed on November 20, 2007).

   

3.4

Certificate of Correction (incorporated by reference from our Quarterly Report on Form 10-QSB/A filed on November 23, 2007).

   

3.5

Articles of Merger (incorporated by reference from our Current Report on Form 8-K filed on January 24, 2008).

   

10.1

Employment Agreement dated July 7, 2008 with Dr. Amnon Gonenne (incorporated by reference from our Current Report on Form 8-K filed on July 10, 2008).

   
10.1.1 Amendment to Employment Agreement with Dr. Amnon Gonenne dated April 2, 2009 (incorporated by reference from our Annual Report on Form 10-K filed on April 10, 2009).

 

 

10.2

Employment Agreement dated December 2, 2010 with Dr. Charles Tackney (incorporated by reference from our Annual Report on Form 10-K filed on April 15, 2011).

   

10.3

Director Agreement dated April 17, 2009 with David S. Frank (incorporated by reference from our Quarterly Report on Form 10-Q filed on May 13, 2009)

   

10.4

Conversion Agreement by and between Registrant and Chrysler Enterprises Ltd. executed March 5, 2010 (incorporated by reference from our Current Report on Form 8-K filed on March 8, 2010).

   

10.5

Subscription Agreement by and between Registrant and investor executed March 5, 2010 (incorporated by reference from our Current Report on Form 8-K filed on March 8, 2010).

   

10.6

Amendment to the Subscription Agreement with Paramount Trading Company signed on September 17, 2010 (incorporated by reference from our Current Report on Form 8-K filed on September 20, 2010).

   

10.7

Investment Agreement, dated as of January 18, 2011, between Registrant and Centurion Private Equity, LLC (incorporated by reference from our Current Report on Form 8-K filed on January 20, 2011).

   

10.7.1

Amendment to Investment Agreement, dated as of June 6, 2011, between Registrant and Centurion Private Equity, LLC (incorporated by reference from our Current Report on Form 8-K filed on June 9, 2011).

29



10.8

Registration Rights Agreement, dated as of January 18, 2011, between Registrant and Centurion Private Equity, LLC (incorporated by reference from our Current Report on Form 8-K filed on January 20, 2011

   
10.9

Securities Purchase Agreement, dated as of January 18, 2011, between Registrant and Centurion Private Equity, LLC (incorporated by reference from our Current Report on Form 8-K filed on January 20, 2011).

   
10.9.1

Amendment to Securities Purchase Agreement, dated as of June 6, 2011, between Registrant and Centurion Private Equity, LLC (incorporated by reference from our Current Report on Form 8-K filed on June 9, 2011).

   
10.10

Debenture dated as of January 18, 2011, between Registrant and Centurion Private Equity, LLC (incorporated by reference from our Current Report on Form 8-K filed on January 20, 2011).

   
10.11

Debenture dated as of October 25, 2011, between Registrant and Biotech Investment Corp. (incorporated by reference from our Quarterly Report on Form 10-Q filed on November 21, 2011).

   
10.12

License Agreement dated as of November 10, 2011 between Registrant and Biotech Investment Corp. (incorporated by reference from our Quarterly Report on Form 10-Q filed on November 21, 2011).

   
10.13*

Management Services Agreement, dated February 29, 2012, between Registrant and Dov Weinberg.

   
21*

Subsidiaries of the Registrant

   
31.1*

Section 302 Certification of the Sarbanes-Oxley Act of 2002 of Dr. Amnon Gonenne

   
31.2*

Section 302 Certification of the Sarbanes-Oxley Act of 2002 of Ron Kalfus

   
32.1*

Section 906 Certification of the Sarbanes-Oxley Act of 2002 of Dr. Amnon Gonenne

   
32.2*

Section 906 Certification of the Sarbanes-Oxley Act of 2002 of Ron Kalfus

*Filed herewith

30


SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

MABCURE, INC.
(Registrant)

By: /s/Dr. Amnon Gonenne    
  Name: Dr. Amnon Gonenne    
  Title: President, Chief Executive Officer    
  (Principal Executive Officer) and Director    
       
Dated: April 16__, 2012    

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

By: /s/ Dr. Amnon Gonenne   By: /s/ Dov Weinberg
  Name: Dr. Amnon Gonenne     Name: Dov Weinberg
  Title: President, Chief Executive Officer     Title: Chief Financial Officer (Principal
  (Principal Executive Officer) and Director     Financial and Accounting Officer)
         
Dated: April _16_, 2012      
         
         
By: /s/ Dr. David S. Frank      
  Name: Dr. David S. Frank      
  Title: Director      
         
Dated: April _16_, 2012      

31