UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

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FORM 10-Q

 

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(Mark One)

x

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2014

 

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: 001-35112

 

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Medgenics, Inc.

(Exact name of registrant as specified in its charter)

 

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Delaware		98-0217544
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
435 Devon Park Drive, Building 700 Wayne, Pennsylvania		19087
(Address of Principal Executive Offices)		(Zip Code)

 

(610) 254-4201

(Registrant’s telephone number, including area code)

 

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

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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   ☒     No   ☐

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes   ☒     No   ☐

 

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 definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one):

 

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

 

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2).    Yes     ☐   No   ☒

 

As of October 10, 2014, the registrant had 18,910,403 shares of common stock, $0.0001 par value, outstanding.

 

  

MEDGENICS, INC.

 

CONTENTS

 

		Page
PART I	FINANCIAL INFORMATION	3
ITEM 1.	Financial Statements	3
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	25
ITEM 4.	Controls and Procedures	25
PART II	OTHER INFORMATION	26
ITEM 1.	Legal Proceedings	26
ITEM 1A.	Risk Factors	26
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
ITEM 3.	Defaults Upon Senior Securities	26
ITEM 4.	Mine Safety Disclosures	26
ITEM 5.	Other Information	26
ITEM 6.	Exhibits	27
Signatures		28

 

Unless the context otherwise requires, all references in this Quarterly Report on Form 10-Q to the “Company”, “Medgenics”, “we,” “us” and “our” refer to Medgenics, Inc., a Delaware corporation organized on January 27, 2000, and its wholly-owned subsidiary, Medgenics Medical Israel Ltd., a company organized under the laws of the State of Israel. We use BioPump^TM , EPODURE^TM and TARGT^TM, as trademarks in the United States and elsewhere. All other trademarks or trade names referred to in this document are the property of their respective owners.

  

 

PART I — FINANCIAL INFORMATION

 

ITEM 1 — Financial Statements

   

MEDGENICS, INC. AND ITS SUBSIDIARY

 

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

 

As of September 30, 2014

 

IN U.S. DOLLARS IN THOUSANDS

 

(Unaudited)

  

INDEX

 

		Page
Consolidated Balance Sheets		4 - 5
Consolidated Statements of Operations		6
Statements of Changes in Stockholders' Equity		7
Consolidated Statements of Cash Flows		8 - 9
Notes to the Interim Consolidated Financial Statements		10– 18

  

 

MEDGENICS, INC. AND ITS SUBSIDIARY

 

CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands (except share and per share data)

 

		September 30,				December 31,
		2014				2013
		Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	14,706			$	22,390
Accounts receivable and prepaid expenses			511				202
Total current assets			15,217				22,592
LONG-TERM ASSETS:
Restricted lease deposits			28				42
Severance pay fund			110				96
Property and equipment, net			484				357
Deferred costs			34				-
Total long-term assets			656				495
Total assets		$	15,873			$	23,087

  

The accompanying notes are an integral part of the interim consolidated financial statements

 

 

MEDGENICS, INC. AND ITS SUBSIDIARY

 

CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands (except share and per share data)

 

		September 30,				December 31,
		2014				2013
		Unaudited
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables		$	552			$	1,062
Other accounts payable and accrued expenses			1,971				1,952
Total current liabilities			2,523				3,014
LONG-TERM LIABILITIES:
Accrued severance pay			415				439
Liability in respect of warrants			623				1,211
Total long-term liabilities			1,038				1,650
Total liabilities			3,561				4,664
STOCKHOLDERS' EQUITY:
Common stock - $0.0001 par value; 100,000,000 shares authorized;  18,917,403 shares issued and 18,908,903 shares outstanding at September 30, 2014;18,497,307 shares issued and outstanding at December 31, 2013			2				2
Additional paid-in capital			106,252				100,126
Accumulated deficit			(93,942	)			(81,705	)
Total stockholders' equity			12,312				18,423
Total liabilities and stockholders' equity		$	15,873			$	23,087

 

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

 

 

MEDGENICS, INC. AND ITS SUBSIDIARY

 

CONSOLIDATED STATEMENTS OF OPERATIONS

U.S. dollars in thousands (except share and per share data)

 

		Nine months ended September 30,								Three months ended September 30,
		2014				2013				2014				2013
		Unaudited
Research and development expenses		$	6,378			$	6,556			$	2,281			$	2,452
Less:
Participation by the Office of the Chief Scientist			(1,898	)			(1,327	)			(716	)			(109	)
Research and development expenses, net			4,480				5,229				1,565				2,343
General and administrative expenses			8,262				6,695				2,305				2,561
Operating loss			(12,742	)			(11,924	)			(3,870	)			(4,904	)
Financial expenses			(92	)			(21	)			(64	)			(1,260	)
Financial income			605				29				896				21
Loss before taxes on income			(12,229	)			(11,916	)			(3,038	)			(6,143	)
Taxes on income			8				5				2				-
Loss		$	(12,237	)		$	(11,921	)		$	(3,040	)		$	(6,143	)
Basic loss per share		$	(0.65	)		$	(0.68	)		$	(0.16	)		$	(0.33	)
Diluted loss per share		$	(0.68	)		$	(0.68	)		$	(0.21	)		$	(0.33	)
Weighted average number of common stock used in computing basic loss per share			18,716,109				17,435,235				18,817,557				18,410,951
Weighted average number of common stock used in computing diluted loss per share			18,863,403				17,468,255				18,938,723				18,410,951

   

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

 

 

MEDGENICS, INC. AND ITS SUBSIDIARY

 

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

U.S. dollars in thousands (except share and per share data)

 

		Common stock								Additional paid-in capital				Accumulated deficit				Total stockholders' equity
		Shares				Amount
Balance as of  December 31, 2012			12,307,808			$	1			$	66,509			$	(64,576	)		$	1,934
Issuance of common stock and warrants at $ 5.24 per share and $ 0.01 per warrant			6,070,000				1				28,820				-				28,821
Stock based compensation related to the issuance of common stock to consultants (**)			55,000				(*)				594				-				594
Stock based compensation related to the issuance and vesting of restricted common stock to directors and an employee			45,000				(*)				331				-				331
Stock based compensation related to options and warrants granted to consultants and employees			-				-				2,176				-				2,176
Exercise of  warrants and options			3,500				(*)				13				-				13
Loss			-				-				-				(11,921	)			(11,921	)
Balance as of  September 30, 2013 (unaudited)			18,481,308			$	2			$	98,443			$	(76,497	)		$	21,948
Balance as of December 31, 2013			18,497,307			$	2			$	100,126			$	(81,705	)		$	18,423
Stock-based compensation related to the issuance and vesting of restricted common stock to directors and an employee, net (***)			23,000				(*)				371				-				371
Stock-based compensation related to options and warrants granted to consultants, directors and employees			-				-				4,512				-				4,512
Exercise of  warrants and options			364,096				(*)				1,243				-				1,243
Loss			-				-				-				(12,237	)			(12,237	)
Balance as of  September 30, 2014 (unaudited)			18,884,403			$	2			$	106,252			$	(93,942	)		$	12,312

 

(* ) Represents an amount lower than $ 1.

(**) Includes stock based compensation for an additional 25,000 shares which were not issued as of September 30, 2013 and 2014.

(***) Does not include 24,500 restricted shares not yet vested.

 

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

 

 

MEDGENICS, INC. AND ITS SUBSIDIARY

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

  

		Nine months ended September 30,
		2014				2013
		Unaudited
CASH FLOWS FROM OPERATING ACTIVITIES:
Loss		$	(12,237	)		$	(11,921	)
Adjustments to reconcile loss to net cash used in operating activities:
Depreciation			162				130
Stock-based compensation related to options, warrants, common shares and restricted shares granted to employees, directors and consultants			4,883				3,101
Change in fair value of warrants			(574	)			(20	)
Accrued severance pay, net			(439	)			(429	)
Exchange differences on a restricted lease deposit and on long term loan			(1	)			1
Changes in operating assets and liabilities:
Accounts receivable and prepaid expenses			(308	)			(447	)
Trade payables			(510	)			669
Other accounts payable and accrued expenses			420				569
Restricted lease deposits			14				(8	)
Net cash used in operating activities			(8,590	)			(8,355	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment			(289	)			(159	)
Net cash used in investing activities		$	(289	)		$	(159	)

  

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

 

 

MEDGENICS, INC. AND ITS SUBSIDIARY

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

 

		Nine months ended September 30,
		2014				2013
		Unaudited
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of shares and warrants, net		$	-			$	28,861
Proceeds from exercise of options and warrants, net			1,229				13
Deferred costs			(34	)			-
Net cash provided by financing activities			1,195				28,874
Increase (decrease)  in cash and cash equivalents			(7,684	)			20,360
Balance of cash and cash equivalents at the beginning of the period			22,390				6,431
Balance of cash and cash equivalents at the end of the period		$	14,706			$	26,791
Supplemental disclosure of cash flow information:
Cash paid during the period for taxes		$	8			$	5

  

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

 

 

MEDGENICS, INC. AND ITS SUBSIDIARY

 

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share and per share data)

 

NOTE 1:-

GENERAL

 

a.

Medgenics, Inc. (the "Company") was incorporated in January 2000 in Delaware. The Company has a wholly-owned subsidiary, Medgenics Medical Israel Ltd. (the "Subsidiary"), which was incorporated in Israel in March 2000. The Company and the Subsidiary are engaged in the research and development of products in the field of biotechnology and associated medical equipment.

 

The Company's common stock is traded on the NYSE MKT.

 

In April 2014, stockholders approved the cancellation of the Company's common stock from trading on the London Stock Exchange's Alternative Investment Market, or AIM. The last day of trading of the Company's common stock on AIM was April 15, 2014.

 

b.

As reflected in the accompanying financial statements, the Company incurred a loss for the nine month period ended September 30, 2014 of $12,237 and had a negative cash flow from operating activities of $8,590 during the nine month period ended September 30, 2014. The accumulated deficit as of September 30, 2014 is $93,942. The Company and the Subsidiary have not yet generated revenues from product sale. Management's plans also include seeking additional investments and commercial agreements to continue the operations of the Company and the Subsidiary.

 

The Company believes that its existing cash and cash equivalents, should be sufficient to meet its operating and capital requirements into the fourth quarter of 2015.

 

	c.	In April 2014, the Subsidiary received approval for an additional Research and Development program from the Office of the Chief Scientist (OCS) at the Ministry of Economy of Israel for the period from December 2013 through November 2014. The approval allows for a grant of up to approximately $2,200 based on research and development expenses, not funded by others, of up to $3,900.

During the nine months ended September 30, 2014, a total of $1,813 was received from the OCS and $8 recorded as a grant receivable.

 

 

MEDGENICS, INC. AND ITS SUBSIDIARY

 

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share and per share data)

 

NOTE 2:-

SIGNIFICANT ACCOUNTING POLICIES

 

The accompanying unaudited interim financial statements of the Company, have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and the rules of the Securities and Exchange Commission ("SEC") and should be read in conjunction with the audited financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2013 ("2013 Form 10-K") as filed with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements that would substantially duplicate the disclosure contained in the audited financial statements for the most recent fiscal year as reported in the 2013 Form 10-K have been omitted.

 

Effective January 1, 2014, the Company adopted the authoritative guidance, issued by the Financial Accounting Standards Board (“FASB”) in July 2013, which requires that an unrecognized tax benefit, or portion of an unrecognized tax benefit, be presented as a reduction of a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward. If an applicable deferred tax asset is not available or a company does not expect to use the applicable deferred tax asset, the unrecognized tax benefit should be presented as a liability in the financial statements and should not be combined with an unrelated deferred tax asset. The adoption of this guidance had no impact on the Company's consolidated financial statements.

 

In June 2014 the FASB issued ASU 2014-10 regarding development stage entities. The ASU removes the definition of development stage entity, as was previously defined under U.S. GAAP, from the accounting standards codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP.

 

In addition, the ASU eliminates the requirements for development stage entities to (i) present inception-to-date information in the statement of income, cash flow and stockholders' equity, (ii) label the financial statements as those of a development stage entity, (iii) disclose a description of the development stage activities in which the entity is engaged, and (iv) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage.

 

The Company has applied the ASU effective from the financial statements as of June 30, 2014. 

 

NOTE 3:-

COMMITMENTS AND CONTINGENCIES

 

a.

In May 2014, the Company signed an agreement with the Board of Trustees of the Leland Stanford Junior University (“Stanford”). According to the agreement, Stanford granted the Company a non-exclusive license for a patent for commercial development, production and marketing of certain products based on its know-how. In consideration, the Company agreed to pay Stanford the following amounts:

 

 

MEDGENICS, INC. AND ITS SUBSIDIARY

 

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share and per share data)

 

NOTE 3:-

COMMITMENTS AND CONTINGENCIES (Cont.)

 

i) An issue royalty of $25 upon signing the agreement.

ii) License maintenance fees of:

1.

$10 in May 2015 and May 2016

2.

$20 in May 2017 and May 2018

3.

$50 in May 2019 and each year thereafter

iii) Royalties at a rate of 1.5% of net sales.

iv) Milestone payments of:

1.

$50 upon dosing of the first patient with a licensed product

2.

$150 upon the first approval in the U.S. of a licensed product

3.

$150 upon the first approval in Europe or Japan of a licensed product.

 

b.

The license agreement with the University of Michigan was terminated effective August 13, 2014.

 

NOTE 4:-

STOCKHOLDERS' EQUITY

 

a.

Issuance of stock options, warrants and restricted shares to employees and directors:

 

1.

In April 2014, stockholders approved an amendment to the Company's Stock Incentive Plan, increasing the number of shares authorized to be issued under such plan by 2,000,000 shares.

 

2.

A summary of the Company's activity for restricted shares granted to employees and directors is as follows:

 

Restricted shares		Nine months ended September 30, 2014
Number of restricted shares as of December 31, 2013			56,072
Vested			(79,072	)
Forfeited			(8,500	)
Granted			56,000
Number of restricted shares as of  September 30, 2014			24,500

 

 

MEDGENICS, INC. AND ITS SUBSIDIARY

 

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share and per share data)

 

NOTE 4:-

STOCKHOLDERS' EQUITY (Cont.)

 

3.

A summary of the Company's activity for options and warrants granted to employees and directors is as follows:

 

		Nine months ended September 30, 2014
		Number of options and warrants				Weighted Average exercise price				Weighted average remaining contractual terms (years)				Aggregate intrinsic value
Outstanding at December 31, 2013			7,366,043			$	5.19
Granted			1,227,373			$	6.71
Forfeited			(46,786	)		$	5.76
Exercised			(311,506	)		$	2.80
Outstanding at September 30, 2014			8,235,124			$	5.50				7.02			$	6,113
Vested and expected to vest at September  30, 2014			8,005,976			$	5.51				6.97			$	5,997
Exercisable at September 30, 2014			3,802,762			$	5.77				5.00			$	3,833

  

Calculation of aggregate intrinsic value is based on the closing share price of the Company's common stock as reported on the NYSE MKT on September 30, 2014 ($5.19 per share).

 

As of September 30, 2014, there was $9,584 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted to employees and directors. That cost is expected to be recognized over a weighted-average period of 1.6 years.

  

 

MEDGENICS, INC. AND ITS SUBSIDIARY

 

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share and per share data)

 

NOTE 4:-

STOCKHOLDERS' EQUITY (Cont.)

 

b.

Issuance of shares, stock options and warrants to consultants:

 

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

 

		Nine months ended September 30, 2014
		Number of options and warrants				Weighted average exercise price				Weighted average remaining contractual terms (years)				Aggregate intrinsic value
Outstanding at December 31, 2013			579,674			$	6.72
Forfeited			(80,782	)		$	7.81
Exercised			(45,066	)		$	6.04
Outstanding at September 30, 2014			453,826			$	6.60				3.48			$	232
Exercisable at  September  30, 2014			423,733			$	6.63				3.10			$	232

  

Calculation of aggregate intrinsic value is based on the closing share price of the Company's common stock as reported on the NYSE MKT on September 30, 2014 ($5.19 per share).

 

As of September 30, 2014, there was $96 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted to consultants. That cost is expected to be recognized over a weighted-average period of 1.8 years. 

 

c.

Compensation expenses:

 

Compensation expense related to shares, warrants and options granted to employees, directors and consultants was recorded in the Statements of Operations in the following line items:

 

 

MEDGENICS, INC. AND ITS SUBSIDIARY

 

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share and per share data)

 

NOTE 4:-

STOCKHOLDERS' EQUITY (Cont.)

 

		Nine months ended September 30,								Three months ended September 30,
		2014				2013				2014				2013
		Unaudited								Unaudited
Research and development expenses		$	829			$	221			$	336			$	155
General and administrative expenses			4,054				2,880				1,025				869
		$	4,883			$	3,101			$	1,361			$	1,024

 

 

MEDGENICS, INC. AND ITS SUBSIDIARY

 

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share and per share data)

 

NOTE 4:-

STOCKHOLDERS' EQUITY (Cont.)

 

d.

Summary of options and warrants:

 

A summary of all the options and warrants outstanding as of September 30, 2014 is presented in the following table:

 

						As of September 30, 2014
Options / Warrants		Exercise Price per Share ($)				Options and Warrants Outstanding				Options and Warrants Exercisable				Weighted Average Remaining Contractual Terms (in years)
Options:
Granted to Employees and Directors			2.49-3.14				199,000				128,000				7.2
			3.64-4.99				3,625,429				1,306,739				8.5
			5.13-7.25				2,199,140				381,168				8.5
			8.19-14.5				1,306,365				1,081,665				4.2
							7,329,934				2,897,572
Granted to Consultants
			5.13				15,280				10,187				7.5
			6.29-6.65				44,068				19,068				7.8
							59,348				29,255
Total Options							7,389,282				2,926,827
Warrants:
Granted to Employees and Directors			2.49				905,190				905,190				1.5
Granted to Consultants			3.19-4.01				161,370				161,370				2.9
			4.99				31,635				31,635				3.1
			9.17-11.16				201,473				201,473				2.7
							394,478				394,478
Issued to Investors
			0.0002				35,922				35,922				1.5
			4.54-6.00				3,229,771				3,229,771				1.5
			6.78-8.34				8,360,034	(*)			8,360,034	(*)			3.2
							11,625,727				11,625,727
Total Warrants							12,925,395				12,925,395
Total  Options and  Warrants							20,314,677				15,852,222

 

(*) Represents warrants to purchase 4,666,226 shares of common stock.

 

 

MEDGENICS, INC. AND ITS SUBSIDIARY

 

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share and per share data)

 

NOTE 5:-

FAIR VALUE MEASUREMENTS

 

The Company classified certain warrants with down-round protection issued to the purchasers of convertible debentures in 2010 as a liability at their fair value according to ASC 815-40-15-7I. The liability in respect of these warrants will be remeasured at each reporting period until exercised or expired. Changes in the fair value of these warrants are reported in the statements of operations as financial income or expense.

 

The fair value of these warrants was estimated at September 30, 2014 and December 31, 2013 using the Binomial pricing model with the following assumptions:

 

		September 30, 2014				December 31, 2013
Dividend yield			0	%			0	%
Expected volatility			52.1	%			78.1	%
Risk-free interest rate			0.1	%			0.3	%
Contractual life (in years)			1.0				1.7

 

The changes in level 3 liabilities measured at fair value on a recurring basis:

 

		Fair value  of liability  in respect  of warrants
Balance as of December 31, 2012		$	1,931
Change in the liability in respect of warrants			(20	)
Balance as of September 30, 2013 (unaudited)		$	1,911
Balance as of December 31, 2013		$	1,211
Change due to exercise of warrants			(14	)
Change in the liability in respect of warrants			(574	)
Balance as of September 30, 2014 (unaudited)		$	623

  

 

MEDGENICS, INC. AND ITS SUBSIDIARY

 

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share and per share data)

 

NOTE 6:-

LOSS PER SHARE

 

Details in the computation of diluted loss per share:

  

		Nine months ended September 30,
		2014								2013
		Weighted average number of shares				Loss				Weighted average number of shares				Loss
		Unaudited
For the computation of basic loss			18,716,109			$	12,237				17,435,235			$	11,921
Effect of potential dilutive common shares issuable upon exercise of warrants classified as liability			147,294				574	(**)			33,020				20	(**)
For the computation of diluted loss			18,863,403			$	12,811				17,468,255			$	11,941

  

		Three months ended September 30,
		2014								2013
		Weighted average number of shares				Loss				Weighted average number of Shares				Loss
		Unaudited
For the computation of basic loss			18,817,557			$	3,040				18,410,951			$	6,143
Effect of potential dilutive common shares issuable upon exercise of warrants classified as liability			121,166				880	(**)			-	(*)			-	(*)
For the computation of diluted loss			18,938,723			$	3,920				18,410,951			$	6,143

 

(*)

Anti-dilutive.

(**)

Financial income resulted from changes in fair value of warrants classified as liability.

 

The total weighted average number of shares related to the outstanding options, warrants and restricted shares excluded from the calculations of diluted loss per share due to their anti-dilutive effect was 16,341,224 and 10,875,098 for the nine months ended September 30, 2014 and 2013, respectively.

 

- - - - -

 

 

ITEM 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

The following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q.

 

Forward Looking Statements

 

This Quarterly Report on Form 10-Q contains “forward-looking statements” that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. The statements contained in this Quarterly Report on Form 10-Q that are not purely historical are 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”). Forward-looking statements are often identified by the use of words such as, but not limited to, “aim,” “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “seek,” “should,” “target,” “will,” “would” and similar expressions or variations intended to identify forward-looking statements. These statements are based on the beliefs and assumptions of our management based on information currently available to management. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section titled “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2013, and any updates to those risk factors included in Part II, Item 1A of this Quarterly Report on Form 10-Q. Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

 

Overview

 

We are an ex vivo gene therapy company, developing an innovative and proprietary platform technology offering what we believe to be a novel therapeutic approach for use in the $50 billion orphan and rare disease therapeutics markets. Our TARGT^TM (Transduced Autologous Regenerative Gene Therapy) Platform Technology (previously called BioPump^TM) is designed to provide sustained protein and peptide therapy to treat a range of chronic diseases and conditions. We are currently studying our lead product TARGT_epo (previously called EPODURE^TM) in a Phase 1/2 clinical trial in patients with Chronic Kidney Disease (CKD) and End Stage Renal Disease (ESRD), and we plan on studying TARGT_epo in identified orphan populations of unmet need including ESRD patients who are hypo-responsive to recombinant humanized erythropoietin (rHuEPO), and Beta Thalassemia Intermedia patients. We have initiated in vivo proof of concept pre-clinical studies with several other orphan/rare disease candidates, and we anticipate initiating discussions with regulatory agencies for some of those programs in 2015.

 

Since our inception on January 27, 2000, we have focused our efforts on research and development and clinical trials and have received no revenue from product sales. We have funded our operations principally through equity and debt financings, participation from the Office of the Chief Scientist (OCS) in Israel and a collaborative agreement. Our operations to date have been primarily limited to organizing and staffing our company, developing the TARGT platform technology and its applications, developing and initiating clinical and pre-clinical trials for our product candidates, and improving and maintaining our patent portfolio.

 

We have generated significant losses to date, and we expect to continue to generate losses as we progress towards the commercialization of our product candidates.  We have incurred net losses of approximately $12.24 million for the nine month period ended September 30, 2014. As of September 30, 2014, we had stockholders’ equity of approximately $12.31 million.  We are unable to predict the extent of any future losses or when we will become profitable, if at all.

 

  

Recent Developments

 

In June 2014, the first patient was enrolled in our Phase 1/2 clinical trial of MDGN-201 (TARGT_epo). The aim of the ongoing trial is to validate the potential of our TARGT platform technology using a second generation viral vector, which was developed to enhance durability of the proposed therapeutic effect. The ongoing study will evaluate the potential of the updated platform to offer sustained production and delivery of endogenous erythropoietin (eEPO) to treat anemia in dialysis patients with ESRD or CKD. This open-label trial is expected to enroll up to 18 patients with either CKD or ESRD who require rHuEPO treatment for anemia. We expect that each patient will receive one or more TARGT_epo microorgans and will be followed for at least one year. The trial endpoints include plasma eEPO levels, blood counts and safety assessment. On October 15, 2014, we announced initial clinical data on the first three patients of the Phase 1/2 trial. The three patients were 3.5, 2.5, and 1 month post implantation of TARGT_epo microorgans. All patients were producing sustained physiological levels of eEPO, and all patients were meeting their targeted hemoglobin levels (9-12g/dl) due to red blood cell production stimulated by eEPO. No patient has required additional rHuEPO (e.g., EPREX) or a blood transfusion following the implantation of the TARGT_epo microorgan(s). There have not been any reported treatment related safety issues. Finally, on October 15, 2014, we announced pre-clinical in vivo data that showed the TARGT platform was producing GLP-2 (glucagon-like peptide-2) in severe combined immunodeficiency (SCID) mouse models.

 

In April 2014, our wholly-owned subsidiary, Medgenics Medical Israel Ltd., which we refer to as MMI, was awarded a government grant of up to NIS 7.7 million (approximately $2.2 million) from the OCS. The grant will be used to cover research and development expenses for the 12-month period from December 2013 through November 2014 to support further research and clinical development of our TARGT platform technology with respect to the treatment of rare and orphan diseases and anemia. Under the terms of the OCS grant, MMI will be required to repay the grant in full, plus interest, through royalties on revenue received from commercializing the developed technology. The payment of royalties is contingent on such revenues and, in the absence of such revenues, no royalty payments to the OCS will be required. During the nine months ended September 30, 2014, MMI received $1.81 million under this and previous OCS grants.

 

Financial Operations Overview

 

Research and Development Expense

 

Research and development expense consists of: (i) internal costs associated with our development activities; (ii) payments we make to third party contract research organizations, contract manufacturers, clinical trial sites and consultants; (iii) technology and intellectual property license costs; (iv) manufacturing development costs; (v) personnel related expenses, including salaries, and other related costs, including stock-based compensation expense, for the personnel involved in product development; (vi) activities related to regulatory filings and the advancement of our product candidates through preclinical studies and clinical trials; and (vii) facilities and other allocated expenses, which include direct and allocated expenses for rent, facility maintenance, as well as laboratory and other supplies. All research and development costs are expensed as incurred.

 

Conducting a significant amount of development is central to our business model. Product candidates in later-stage clinical development generally have higher development costs than those in earlier stages of development, primarily due to the significantly increased size and duration of the clinical trials. We plan to increase our research and development expenses for the foreseeable future in order to complete the ongoing Phase 1/2 trial of TARGT_epo with a new viral vector and implantation protocol, expand the study of TARGT_epo into one or more Phase 2 trials in identified orphan disease populations, including ESRD patients who are hypo-responsive to rHuEPO and Beta Thalassemia Intermedia patients, and our earlier-stage research and development projects including in other targeted rare and orphan disease indications including TARGT_GLP-2 for short bowel syndrome.

 

The process of conducting pre-clinical studies and clinical trials necessary to obtain regulatory approval is costly and time consuming. The probability of success for each product candidate and clinical trial may be affected by a variety of factors, including, among others, the quality of the product candidate’s early clinical data, investment in the program, competition, manufacturing capabilities and commercial viability. As a result of these uncertainties, together with the uncertainty associated with clinical trial enrollments and the risks inherent in the development process, we are unable to determine the duration and completion costs of current or future clinical stages of our product candidates or when, or to what extent, we will generate revenues from the commercialization and sale of any of our product candidates. Development timelines, probability of success and development costs vary widely.

 

  

General and Administrative Expense

 

General and administrative expense consists primarily of salaries and other related costs, including stock-based compensation expense, for persons serving as our directors and in our executive, finance and accounting functions. Other general and administrative expense includes facility-related costs not otherwise included in research and development expense, costs associated with industry and trade shows, and professional fees for legal, accounting and consulting services. We expect that our general and administrative expenses will increase as we add personnel.

 

Financial Expenses and Income

 

Financial expenses consists primarily of warrant valuations.

 

Financial income consists primarily of warrant valuations and interest earned on our cash and cash equivalents.

 

Results of Operations for the Nine Months Ended September 30, 2014 and 2013

 

Research and Development Expenses

 

Gross research and development expenses for the nine months ended September 30, 2014 were $6.38 million, decreasing from $6.56 million for the same period in 2013 mainly due to a decrease in subcontractor costs. Research and development expenses, net for the nine months ended September 30, 2014 were $4.48 million, decreasing from $5.23 million for the same period in 2013 due to an increase of $0.57 million in the participation by the OCS in addition to the decrease in gross research and development expenses.

 

General and Administrative Expenses

 

General and administrative expenses for the nine months ended September 30, 2014 were $8.26 million, increasing from $6.70 million for the same period in 2013 primarily due to an increase in personnel and increased stock-based compensation expenses related to options granted to general and administrative personnel.

 

Financial Expenses and Income

 

Financial expenses for the nine months ended September 30, 2014 were $0.09 million, increasing from $0.02 million for the same period in 2013. The increase was mainly due to foreign currency exchange differences.

 

Financial income for the nine months ended September 30, 2014 was $0.61 million, increasing from $0.03 million for the same period in 2013. The increase was primarily due to the change in valuation of the warrant liability.

 

Results of Operations for the Three Months Ended September 30, 2014 and 2013

 

Research and Development Expenses

 

Gross research and development expenses for the three months ended September 30, 2014 were $2.28 million, decreasing from $2.45 million for the same period in 2013 due mainly to a decrease in subcontractor costs. Net research and development expenses for the three months ended September 30, 2014 decreased to $1.57 million from $2.34 million for the same period in 2013. The decrease in net research and development expenses was due to an increase of $0.61 million in the participation by the OCS in addition to the decrease in gross research and development expenses.

 

  

General and Administrative Expenses

 

General and administrative expenses for the three months ended September 30, 2014 were $2.31 million, decreasing from $2.56 million for the same period in 2013 primarily due to a decrease in professional fees.

 

Financial Expenses and Income

 

Financial expenses for the three months ended September 30, 2014 were $0.06 million, decreasing from $1.26 million for the same period in 2013. This decrease of $1.20 million was mainly due to the change in valuation of the warrant liability.

 

Financial income for the three months ended September 30, 2014 was $0.90 million increasing from $0.02 million for the same period in 2013. The increase was primarily due to the change in valuation of the warrant liability.

 

Liquidity and Capital Resources

 

Sources of Liquidity

 

Since the beginning of 2013, we have financed our operations primarily through a combination of equity issues and grants from the OCS.

 

We received $10.44 million from inception through September 30, 2014 from the OCS in development grants, of which $1.81 million was received during the nine months ended September 30, 2014 and $0.91 million was received during the nine months ended September 30, 2013.

 

In February 2013, we completed a registered public offering of 5,600,000 shares of common stock and 5,600,000 Series 2013-A warrants to purchase up to an aggregate of 2,800,000 shares of common stock. The net proceeds were approximately $26.55 million. The underwriters exercised their option in March 2013 with respect to an additional 470,000 shares of common stock and an additional 840,000 Series 2013-A warrants to purchase up to 420,000 shares of common stock, for additional net proceeds of approximately $2.27 million.

 

Cash Flows

 

We had cash and cash equivalents of $14.71 million at September 30, 2014 and $22.39 million at December 31, 2013. The decrease in our cash balance during the nine months ended September 30, 2014 was primarily the result of operating activities during the period.

 

Net cash used in operating activities of $8.59 million for the nine months ended September 30, 2014 and $8.36 million for the nine months ended September 30, 2013 primarily reflected our cash expenses for our operations.

 

Net cash used in investing activities of $0.29 million for the nine months ended September 30, 2014 and $0.16 million for the nine months ended September 30, 2013 relates mainly to our purchases of property and equipment.

 

Net cash provided by financing activities was $1.20 million for the nine months ended September 30, 2014 and $28.87 million for the nine months ended September 30, 2013. Our cash flows from financing activities during the nine months ended September 30, 2014 were primarily the result of the exercise of options and warrants while our cash flows from financing activities during the nine months ended September 30, 2013 were primarily the result of our registered public offering of common stock and Series 2013-A warrants during the period.

 

  

Funding Requirements

 

Our future capital requirements will depend on a number of factors, including our success in targeting rare and orphan disease candidates, the timing and outcome of clinical trials and regulatory approvals, the costs involved in preparing, filing, prosecuting, maintaining, defending, and enforcing patent claims and other intellectual property rights, the acquisition of licenses to new products or compounds, the status of competitive products, the availability of financing, and our success in developing markets for our product candidates.

 

Without taking into account any revenue we may receive as a result of licensing or other commercialization agreements, we believe that cash on hand will be sufficient to enable us to fund our operating expenses and capital expenditure requirements into the fourth quarter of 2015. We have based this estimate on assumptions that may prove to be wrong and we could use our available resources sooner than we currently expect. Because of the numerous risks and uncertainties associated with the development and commercialization of our product candidates, we are unable to estimate the amounts of increased capital outlays and operating expenditures associated with our current and anticipated clinical trials.

 

We do not anticipate that we will generate revenue from the sale of products for at least four years; however, we may seek licensing or other commercialization agreements for existing and new TARGT applications. In the absence of additional funding or adequate funding from licensing or commercialization agreements, we expect our continuing operating losses to result in decreases, in our cash balances over the next several quarters.

 

Absent significant licensing or other commercialization arrangements, we will need to finance our future cash needs through public or private equity offerings or debt financings in the future. We do not currently have any commitments for future external funding beyond the OCS grant discussed above. We may need to raise additional funds more quickly if one or more of our assumptions prove to be incorrect, if we choose to expand our product development efforts more rapidly than we presently anticipate, or if we enter into additional collaboration or licensing agreements or acquire additional assets, and we may decide to raise additional funds even before we need them if the conditions for raising capital are favorable. We may seek to encourage holders of our warrants to exercise, sell additional equity or debt securities or obtain a bank credit facility. The sale of additional equity or debt securities, if convertible, could result in dilution to our stockholders. The incurrence of indebtedness would result in increased fixed obligations and could also result in covenants that would restrict our operations.

 

Our plans include seeking additional investments, commercial agreements, and targeted business development opportunities to expand our pipeline and continue our operations. However, while we continue to aggressively pursue these opportunities, there is no assurance that we will be successful in our efforts to raise the necessary capital, consummate targeted business development opportunities, and/or reach such commercial agreements to continue our planned research and development activities.

 

Critical Accounting Policies

 

Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses. On an ongoing basis, we evaluate these estimates and judgments, including those described below. We base our estimates on our historical experience and on various other assumptions that we believe to be reasonable under the circumstances. These estimates and assumptions form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results and experiences may differ materially from these estimates.

 

While our significant accounting policies are more fully described in Note 2 to our financial statements included elsewhere in this Quarterly Report on Form 10-Q, we believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating our reported financial results and affect the more significant judgments and estimates that we use in the preparation of our financial statements.

 

  

Liability in Respect of Warrants

 

In the past, we issued warrants whose exercise price is subject to downward adjustment. In accordance with Accounting Standards Codification No. 815-40-15-7I, we classified these warrants as a liability at their fair value. The warrants liability will be remeasured at each reporting period until exercised or expired. The decrease in the fair value of the warrants of $0.57 million and $0.02 million during the nine months ended September 30, 2014 and 2013, respectively, are reported in the Statements of Operations as financial income.

 

We estimate the fair value of these warrants at the respective balance sheet dates using the Binomial option pricing model. We use a number of assumptions to estimate the fair value, including the remaining contractual terms of the warrants, risk-free interest rates, expected dividend yield and expected volatility of the price of the underlying common stock. These assumptions could differ significantly in the future, thus resulting in variability of the fair value which would impact the results of operations in the future.

 

Stock-Based Compensation

 

We account for stock options according to the Accounting Standards Codification No. 718 (ASC 718) “Compensation - Stock Compensation.” Under ASC 718, stock-based compensation cost is measured at grant date, based on the estimated fair value of the award, and is recognized as an expense over the employee’s requisite service period on a straight-line basis.

 

We account for stock options granted to non-employees on a fair value basis using an option pricing method in accordance with ASC 718. The initial non-cash charge to operations for non-employee options with vesting are revalued at the end of each reporting period based upon the change in the fair value of the options and amortized to consulting expense over the related vesting period.

 

For the purpose of valuing options and warrants granted to our employees, non-employees and directors and officers during the nine months ended September 30, 2014 and 2013, we used the Binomial options pricing model. To determine the risk-free interest rate, we utilized the U.S. Treasury yield curve in effect at the time of grant with a term consistent with the expected term of our awards. We estimated the expected life of the options granted based on anticipated exercises in the future periods assuming the success of our business model as currently forecast. The expected dividend yield reflects our current and expected future policy for dividends on our common stock. The expected stock price volatility for our stock options was calculated by examining historical volatilities for publicly traded industry peers as we do not have sufficient trading history for our common stock. We will continue to analyze the expected stock price volatility and expected term assumptions as more historical data for our common stock becomes available. We currently estimate that we will experience 5%-8% forfeitures for those options currently outstanding.

 

ASU 2014-10 regarding development stage entities

 

In June 2014 the FASB issued ASU 2014-10 regarding development stage entities. The ASU removes the definition of development stage entity, as was previously defined under generally accepted accounting principles in the United States (U.S. GAAP), from the accounting standards codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP.

 

In addition, the ASU eliminates the requirements for development stage entities to (i) present inception-to-date information in the statement of income, cash flow and stockholders’ equity, (ii) label the financial statements as those of a development stage entity, (iii) disclose a description of the development stage activities in which the entity is engaged, and (iv) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage.

 

We have applied the ASU effective from the financial statements as of June 30, 2014.

 

  

Off-Balance Sheet Arrangements

 

In May 2014, we signed an agreement with the Board of Trustees of the Leland Stanford Junior University (Stanford). According to the agreement, Stanford granted us a non-exclusive license for a patent for commercial development, production and marketing of certain products based on its know-how. In consideration, we agreed to pay Stanford the following amounts:

 

i)  An issue royalty of $25,000 upon signing the agreement.

ii) License maintenance fees of:

1.

$10,000 in May 2015 and May 2016

2.

$20,000 in May 2017 and May 2018

3.

$50,000 in May 2019 and each year thereafter

 iii) Royalties at a rate of 1.5% of net sales.

iv)  Milestone payments of: 

1.

$50,000 upon dosing of the first patient with a licensed product

2.

$150,000 upon the first approval in the U.S. of a licensed product

3.

$150,000 upon the first approval in Europe or Japan of a licensed product

 

The license agreement with the University of Michigan was terminated effective August 13, 2014.

 

ITEM 3 — Quantitative and Qualitative Disclosures about Market Risk

 

There has been no significant change in our exposure to market risk during the nine months ended September 30, 2014. For a discussion of our exposure to market risk, refer to Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” contained in our Annual Report on Form 10-K for the year ended December 31, 2013.

 

ITEM 4 — Controls and Procedures

 

Evaluation of disclosure controls and procedures

 

As required by Exchange Act Rule 13a-15(b), in connection with the filing of this Quarterly Report on Form 10-Q, we carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of September 30, 2014, the end of the period covered by this report.

 

Changes in Internal Control Over Financial Reporting

 

There were no changes in our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) during the quarter ended September 30, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 

PART II — OTHER INFORMATION

 

ITEM 1 — Legal Proceedings

 

We are not currently a party, as plaintiff or defendant, to any legal proceedings which, individually or in the aggregate, are expected by us to have a material effect on our business, financial condition or results of operation if determined adversely to us.

 

ITEM 1A — Risk Factors

 

Following increased terrorist attacks, Israel launched Operation Protective Edge in July in the Gaza Strip. During this operation our activities were not affected; however, there is no assurance that they will not be significantly affected in the future.

 

ITEM 2 — Unregistered Sales of Equity Securities and Use of Proceeds

 

Recent Sales of Unregistered Securities

 

At the end of June 2014, an investor exercised warrants to purchase 3,750 shares of common stock at an exercise price of $4.54 per share using the cashless exercise method. Using this cashless exercise method, the investor was issued 1,674 shares of common stock in July 2014. The issuance of these shares was deemed exempt from registration under the Securities Act in reliance upon Section 4(2) of the Securities Act. There were no underwriters employed in connection with this transaction.

 

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

 

None.

 

ITEM 3 — Defaults Upon Senior Securities

 

None.

 

ITEM 4 — Mine Safety Disclosures

 

Not applicable.

 

ITEM 5 — Other Information

 

None.

 

 

ITEM 6 — Exhibits

  

Exhibit No.		Description
3.1		Amended and Restated Certificate of Incorporation (previously filed as Exhibit 3.1 to the Company’s Registration Statement on Form S-1 filed November 5, 2010 (File No. 333-170425) and incorporated herein by reference).
3.2		Certificate of Amendment to Amended and Restated Certificate of Incorporation (previously filed as Exhibit 3.2 to the Company’s Registration Statement on Form S-1 filed November 5, 2010 (File No. 333-170425) and incorporated herein by reference).
3.3		Certificate of Amendment to Amended and Restated Certificate of Incorporation dated as of February 14, 2011 (previously filed as Exhibit 4.3 to the Company’s Post-Effective Amendment No. 1 to Form S-1 on Form S-3 filed July 16, 2012 (File No. 333-170425) and incorporated herein by reference).
3.4		Second Amended and Restated By-Laws (previously filed as Exhibit 3.3 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 (File No. 001-35112) and incorporated herein by reference).
10.1		Employment Agreement, dated as of September 8, 2014, between Medgenics, Inc. and Scott Applebaum (filed herewith).
10.2		Addendum to Employment Agreement, dated as of July 15, 2014, among Medgenics, Inc., Medgenics Medical Israel, Ltd. and Phyllis Bellin (previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed July 18, 2014 (File No. 001-35112) and incorporated herein by reference).
10.3		First Amendment to Addendum to Employment Agreement, dated as of September 17, 2014, among Medgenics, Inc., Medgenics Medical Israel, Ltd. and Phyllis Bellin (filed herewith).
31.1		Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
31.2		Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.1		Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
101		Interactive Data File (furnished herewith).

   

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

	MEDGENICS, INC.
Date: October 15, 2014	By:	/s/ Michael F. Cola
		Michael F. Cola
		President and Chief Executive Officer
		(Principal Executive Officer)
Date: October 15, 2014	By:	/s/ John H. Leaman
		John H. Leaman
		Chief Financial Officer
		(Principal Financial Officer)