Attached files
| file | filename |
|---|---|
| EX-32.1 - EXHIBIT 32.1 - Artemis Therapeutics, Inc. | exhibit_32-1.htm |
| EX-31.1 - EXHIBIT 31.1 - Artemis Therapeutics, Inc. | exhibit_31-1.htm |
| EX-31.2 - EXHIBIT 31.2 - Artemis Therapeutics, Inc. | exhibit_31-2.htm |
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-Q
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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended March 31, 2016
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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(Commission file number 0-24431)
________________
NEW YORK GLOBAL INNOVATIONS INC.
(Exact name of registrant as specified in its charter)
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DELAWARE
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84-1417774
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(State or other jurisdiction of
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(I.R.S. Employer Identification No.)
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incorporation or organization)
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18 East 16th Street, Suite 307, New York, NY
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10003
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(Address of principal executive offices)
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(Zip Code)
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(646) 233-1454
(Registrant’s telephone number, including area code)
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
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.
x 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).
o Yes x 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 the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
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of the Exchange Act. (Check one):
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Large accelerated filer ¨
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Accelerated filer ¨
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Non-accelerated filer ¨(do not check if a smaller reporting company)
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Smaller reporting company x
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Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes x No £
The number of shares of Common Stock of the registrant outstanding was 43,173,592 as of May 2, 2016.
NEW YORK GLOBAL INNOVATIONS INC.
INDEX TO FORM 10-Q
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PAGE
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PART I.
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FINANCIAL INFORMATION
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3
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4
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5
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6
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7
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8
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PART II.
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OTHER INFORMATION
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9
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10
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2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
NEW YORK GLOBAL INNOVATIONS INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(U.S. DOLLARS IN THOUSANDS)
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MAR. 31,
2016
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DEC. 31,
2015
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UNAUDITED
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AUDITED
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ASSETS
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CURRENT ASSETS:
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Cash and cash equivalents
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$ | 577 | $ | 628 | ||||
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Short-term deposit
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30 | 30 | ||||||
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Other accounts receivable and prepaid expenses
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57 | 48 | ||||||
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TOTAL CURRENT ASSETS
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664 | 706 | ||||||
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TOTAL ASSETS
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$ | 664 | $ | 706 | ||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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CURRENT LIABILITIES:
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Trade payables
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$ | - | $ | - | ||||
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Accrued expenses and other payables
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50 | 50 | ||||||
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TOTAL CURRENT LIABILITIES
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50 | 50 | ||||||
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Warrants to issue shares
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3 | 5 | ||||||
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TOTAL LIABILITIES
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53 | 55 | ||||||
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STOCKHOLDERS’ EQUITY:
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Capital Stock:
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Preferred stock of $0.01 par value - Authorized: 10,000,000 shares; Issued and outstanding: 0 shares as of March 31, 2016 and as of December 31, 2015
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- | - | ||||||
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Common stock of $0.01 par value - Authorized: 75,000,000; Issued and outstanding: 43,173,592 as of March 31, 2016 and as of December 31, 2015
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432 | 432 | ||||||
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Additional paid-in capital
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17,796 | 17,796 | ||||||
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Accumulated other comprehensive income
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118 | 118 | ||||||
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Accumulated deficit
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(17,735 | ) | (17,695 | ) | ||||
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TOTAL STOCKHOLDERS’ EQUITY
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611 | 651 | ||||||
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
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$ | 664 | $ | 706 | ||||
The accompanying notes are an integral part of the consolidated financial statements.
3
NEW YORK GLOBAL INNOVATIONS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
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THREE MONTHS ENDED
MARCH 31,
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2016
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2015
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UNAUDITED
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Revenues
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$ | - | $ | - | ||||
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Cost of revenues
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- | |||||||
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Gross profit
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- | - | ||||||
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Income from sale of operations, net
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- | - | ||||||
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Operating expenses:
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Research and development
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- | - | ||||||
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Selling and marketing
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- | - | ||||||
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General and administrative
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40 | 34 | ||||||
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Total operating expenses
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(40 | ) | (34 | ) | ||||
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Operating loss
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(40 | ) | (34 | ) | ||||
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Financial income, net
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2 | 1 | ||||||
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Financial income (expenses) related to warrants
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(2 | ) | - | |||||
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Total financial income (expenses), net
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- | 1 | ||||||
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Net loss
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$ | (40 | ) | $ | (33 | ) | ||
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Net loss per share:
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Basic and diluted
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$ | 0.00 | $ | 0.00 | ||||
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Weighted average number of shares of Common Stock used in computing basic and diluted net loss per share
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43,173,592 | 43,173,592 | ||||||
The accompanying notes are an integral part of the consolidated financial statements.
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NEW YORK GLOBAL INNOVATIONS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. DOLLARS IN THOUSANDS)
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THREE MONTHS ENDED ON
MARCH 31,
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2016
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2015
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UNAUDITED
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UNAUDITED
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CASH FLOWS FROM OPERATING ACTIVITIES:
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Net loss
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$ | (40 | ) | $ | (33 | ) | ||
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Adjustments required to reconcile net loss to net cash
used in operating activities:
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Decrease (increase) in other accounts receivable and prepaid expenses
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(9 | ) | 4 | |||||
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Decrease in trade payables
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- | (5 | ) | |||||
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Changes in warrants to issue shares
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(2 | ) | (9 | ) | ||||
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Decrease in accrued expenses and other payables
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- | (6 | ) | |||||
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NET CASH USED IN OPERATING ACTIVITIES
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(51 | ) | (49 | ) | ||||
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CASH FLOWS FROM INVESTING ACTIVITIES:
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Release of restricted cash balances
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- | 205 | ||||||
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NET CASH PROVIDED BY INVESTING ACTIVITIES
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- | 205 | ||||||
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Increase (decrease) in cash and cash equivalents
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(51 | ) | 156 | |||||
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Cash and cash equivalents at the beginning of the year
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628 | 613 | ||||||
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Cash and cash equivalents at the end of the period
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$ | 577 | $ | 769 | ||||
The accompanying notes are an integral part of the consolidated financial statements.
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NEW YORK GLOBAL INNOVATIONS INC.
(U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
NOTE 1: BASIS OF PRESENTATION
The accompanying condensed unaudited interim consolidated financial statements have been prepared by New York Global Innovations Inc., or the Company, in accordance with accounting principles generally accepted in the United States of America, or US GAAP, for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. These financial statements reflect all adjustments, consisting of normal recurring adjustments and accruals, which are, in the opinion of management, necessary for a fair presentation of the financial position of the Company as of March 31, 2016 and the results of operations and cash flows for the interim periods indicated in conformity with US GAAP applicable to interim periods. Accordingly, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with US GAAP have been condensed or omitted. These financial statements should be read in conjunction with the audited financial statements and notes thereto of the Company for the year ended December 31, 2015 that are included in the Company’s Form 10-K filed with the Securities and Exchange Commission on March 10, 2016, or our Annual Report. The results of operations presented are not necessarily indicative of the results to be expected for future quarters or for the year ending December 31, 2016.
In October 2013, the Company entered into an Asset Purchase Agreement, as amended, or APA, with Spectra Systems Corporation, or Spectra. Pursuant to the terms of the APA, Spectra acquired at the closing in February 2014 substantially all of the assets of the Company, or the Asset Sale, with certain exclusions described below.
In consideration for the acquisition of assets pursuant to the APA, Spectra paid the Company $840,684, plus Spectra’s and the Company’s joint good faith estimate of the closing date inventory value on the closing date. Spectra also paid the Company the following post-closing conditional payments:
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$185,000 in post-closing conditional payments depending on orders placed by a former customer and agreements to be entered into with a separate customer assigned to Spectra;
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$200,000, which was deposited with Wells Fargo Bank, National Association and held in accordance with the terms of an escrow agreement to secure the Company’s obligations to pay Spectra any indemnification claims for a period of up to one year after the date of the Closing (which amount was released to the Company in March 2015); and
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·
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$134,000, an amount equal to 50% of all pre-closing accounts receivable collected after the Closing.
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In addition, as a result of the closing of the sale of our assets, the Company’s former President and Chief Executive Officer, Tal Gilat, received 5% of the net proceeds of the net consideration received by the Company.
Following the Asset Sale, the Company’s Board of Directors is exploring strategic alternatives to deploy the proceeds of the Asset Sale, which may include future acquisitions, a merger with another company, or other actions to redeploy capital, including, without limitation, the sale of the public shell company into which the net proceeds may be retained.
Shell Company Status
Based on the lack of Company business activities since the closing of the Asset Sale, our Company is classified as a “shell” company by the Securities and Exchange Commission. The term shell company means a Company that has:
(1) No or nominal operations; and
(2) Either:
(i) No or nominal assets;
(ii) Assets consisting solely of cash and cash equivalents; or
(iii) Assets consisting of any amount of cash and cash equivalents and nominal other assets.
As a result of the Asset Sale completion on February 28, 2014, the Company no longer has revenue-producing operations. The Company believes that it will continue to experience losses and negative cash flows in the near future and will not be able to return to positive cash flow without obtaining additional financing in the near term or entering into a business transaction. The Company experiences difficulties accessing the equity and debt markets and raising such capital or entering into a business transaction, and there can be no assurance that the Company will be able to raise such additional capital on favorable terms or at all or enter into a business transaction. If additional funds are raised through the issuance of equity securities or by entering into a business transaction, the Company’s existing stockholders will experience significant dilution. As a result of the foregoing factors, there is substantial doubt about the Company’s ability to continue as a going concern. In order to conserve the Company’s cash and manage its liquidity, the Company has implemented cost-cutting initiatives.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
In this section, “Management’s Discussion and Analysis of Financial Condition and Results of Operation,” references to “we,” “us,” or “our,” refer to New York Global Innovations Inc. and its consolidated subsidiaries and dollar amounts are in thousands, except as otherwise stated.
This Quarterly Report on Form 10-Q contains statements that may constitute “forward-looking statements.” Generally, forward-looking statements include words or phrases such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “projects,” “could,” “may,” “might,” “should,” “will,” the negative of such terms, and words and phrases of similar import. For example, when we discuss possible strategic alternatives, we are using forward-looking statements. Such statements are based on management’s current expectations and are subject to a number of risks and uncertainties, including, but not limited to, the risks detailed from time to time in our filings with the Securities and Exchange Commission, or the SEC. These risks and uncertainties could cause our actual results to differ materially from those described in our forward-looking statements. Any forward-looking statement represents our expectations or forecasts only as of the date it was made and should not be relied upon as representing its expectations or forecasts as of any subsequent date. Except as required by law, we undertake no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, even if our expectations or forecasts change.
The following discussion and analysis should be read in conjunction with the financial statements, related notes and other information included in this Quarterly Report on Form 10-Q and with the Risk Factors included in Part I, Item 1A of our Annual Report.
OVERVIEW
The Company’s Board of Directors is now exploring strategic alternatives to deploy the proceeds of the Asset Sale, which may include future acquisitions, a merger with another company, or other actions to redeploy capital, including, without limitation, the sale of the public shell company into which the net proceeds may be retained.
THREE MONTHS ENDED MARCH 31, 2016 COMPARED WITH THREE MONTHS ENDED MARCH 31, 2015
REVENUES. Since the closing of the Asset Sale on February 28, 2014, the Company no longer has revenue-producing operations.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses consist primarily of compensation costs for administrative, finance and general management personnel, insurance, legal, accounting and administrative costs. General and administrative expenses increased by $6, or 18%, to $40 in the three months ended March 31, 2016, from $34 in the three months ended March 31, 2015. This increase in general and administrative expenses was primarily related to increases in professional expenses.
FINANCIAL INCOME, NET. Financial income, net, decreased by $1, or 100%, from financial income, net of $1 in the three months ended March 31, 2015 to zero in the three months ended March 31, 2016. This change in financial income, net was primarily related to $2 of financial income related to the change in exchange rates and a $2 expense related to a decrease in the value of warrants.
NET LOSS. We incurred a net loss of $40 in the three months ended March 31, 2016, compared with a net loss of $33 in the three months ended March 31, 2015, which represents an increase of $7 in net loss. This increase in net loss was primarily related to the increase in our operational expenses due to the increase in professional expenses, an increase in financial income and an expense related to a decrease in the value of our warrants.
CONTRACTUAL OBLIGATIONS AND COMMITMENTS. As of March 31, 2016, the Company has no contractual commitments.
LIQUIDITY AND CAPITAL RESOURCES. We have incurred substantial losses since our inception in April 1997. As of March 31, 2016, we had an accumulated deficit of $17,735 and a positive working capital (current assets less current liabilities) of $614. Losses will probably continue in the foreseeable future.
We do not have any material capital commitments for capital expenditures as of March 31, 2016.
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We have sustained significant operating losses in recent periods, which has resulted in a significant reduction in our cash reserves. Due to the Asset Sale, the Company no longer has revenue-producing operations. The Company believes that it will continue to experience losses and negative cash flows from operating activities in the near future and will not be able to return to positive cash flow without obtaining additional financing in the near term or entering into a business transaction. If additional funds are raised through the issuance of equity securities or entering into a business transaction, the Company’s existing stockholders will experience significant further dilution. In order to conserve the Company’s cash and manage its liquidity, the Company has implemented cost-cutting initiatives.
As a result of the Asset Sale, the Company received $841 in cash, plus Spectra’s and the Company’s good faith estimate of the inventory value at the closing date, and $134, an amount equal to 50% of all pre-closing accounts receivable collected after the closing date. In addition, in March 2015, the Company received $200 previously held by Wells Fargo Bank, National Association in accordance with the terms of an escrow agreement to secure the Company’s obligations to pay Spectra any indemnification claims for a period of up to one year after the closing date.
Following the Asset Sale, the Company’s Board of Directors is exploring strategic alternatives to deploy proceeds of the Asset Sale, which may include future acquisitions, a merger with another company, or other actions to redeploy capital, including, without limitation, the sale of the public shell company into which the net proceeds may be retained.
As of March 31, 2016, we had cash and cash equivalents of $577, compared to $769 as of March 31, 2015. We had negative cash flows from operating activities of $51 in the three months ended March 31, 2016 compared to positive cash flows of $156 in the three months ended March 31, 2015. The negative cash flows from operating activities in the three months ended March 31, 2016 are attributable mainly to a net loss of $40, an increase in other accounts receivable, prepaid expenses of $9, and a change in warrants to issue shares of $2.
We did not have any cash flows from investing activities in the three months ended March 31, 2016, compared to positive cash flows from investing activities of $205 for the three months ended March 31, 2015.
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ITEM 4.
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CONTROLS AND PROCEDURES
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Under the direction of the Chairman, who performs the duties of our principal executive officer, and Chief Financial Officer, we evaluated our disclosure controls and procedures and concluded that our disclosure controls and procedures were effective as of March 31, 2016.
No change in our internal control over financial reporting occurred during the quarter ended March 31, 2016 that has materially affected, or is reasonably likely to materially affect, such internal control over financial reporting.
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PART II. OTHER INFORMATION
ITEM 6. EXHIBITS
The following exhibits are being filed or furnished with this Report:
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EXHIBIT
NUMBER
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DESCRIPTION
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31.1
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Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.*
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31.2
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Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.*
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32.1
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Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350.**
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101.1
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The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheet, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Cash Flows and (iv) related notes to these financial statements, tagged as blocks of text and in detail.*
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* Filed herewith
**Furnished herewith
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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.
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NEW YORK GLOBAL INNOVATIONS INC.
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Dated: May 2, 2016
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By: /s/ Gadi Peleg
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Gadi Peleg
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Chairman of the Board
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(Principal Executive Officer)
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Dated: May 2, 2016
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By: /s/ Chanan Morris
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Chanan Morris
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Chief Financial Officer
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(Principal Financial and Accounting Officer)
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10