false
--12-31
FY
2012
2012-12-31
10-K
0001006281
93497809
Yes
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359000000
Protalix BioTherapeutics, Inc.
No
No
PLX
20000
31000
9000
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-INDENT: 0in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <strong>NOTE 2 - LICENSE AND SUPPLY AGREEMENT</strong></p> <p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif"> On November 30, 2009, Protalix Ltd. and Pfizer entered into the Pfizer Agreement pursuant to which Pfizer was granted an exclusive, worldwide license to develop and commercialize taliglucerase alfa, except in Israel. Under the terms and conditions of the Pfizer Agreement, Protalix Ltd. retained the right to commercialize taliglucerase alfa in Israel. Under the Pfizer Agreement, Pfizer made an upfront payment to Protalix Ltd. of $60.0 million in connection with the execution of the agreement and shortly thereafter paid Protalix Ltd. an additional $5.0 million upon the Company's filing of a proposed pediatric investigation plan to the Pediatric Committee of the EMA. Protalix Ltd. received a $25.0 million milestone payment in connection with the approval of taliglucerase alfa by the FDA in May 2012. Protalix Ltd. is entitled to 40% of the results (profits or losses) earned on Pfizer's sales of taliglucerase alfa. Such result (profit or loss) will be calculated while, in addition to other adjustments, taking into account Protalix Ltd.'s cost of goods sold and Pfizer's commercial expenses, with certain expenses capped or borne solely by one party ("Collaboration Operation"). Of the losses incurred by the Collaboration Operation through December 31, 2011, 40% will be deducted from the cash payments to be paid to the Company as its share in the profits from future years, if any. This deduction will be limited to a certain percentage of any quarterly profit. As of December 31, 2012, the Company accrued a liability in respect of these losses equal to $8.5 million, out of which $5.4 million is classified as a long term liability, and the remainder is included in accounts payable and accruals-other.</p> <p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif"> The Company has determined that the initial, non-refundable upfront license fee payment of $60.0 million together with the first $5.0 million payment will be recognized on a straight line basis as revenue over the estimated relationship period (approximately $4.6 million per year). The Company has estimated that the relationship period for its arrangement with Pfizer will be approximately 14 years (commencing upon the Company's receipt of the up-front license payment) based on the Company's last material patent relating to taliglucerase alfa to expire. The $25.0 million milestone payment received in connection with the FDA's approval of taliglucerase alfa in the United States was considered to be a substantive milestone for purposes of revenue recognition and, accordingly, was recorded as revenue during the period in which the milestone was achieved.</p> <p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif"> The Company's deliverables under this collaboration include an exclusive license to taliglucerase alfa as an enzyme replacement therapy for the treatment of Gaucher disease, certain research and development services as required under the Pfizer Agreement for taliglucerase alfa and manufacturing of taliglucerase alfa.</p> <p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif"> According to the terms and conditions of the Pfizer Agreement, the Company retained manufacturing rights and sells its products to Pfizer. In addition, Pfizer is required to reimburse the Company for certain costs it incurs in connection with certain development expenses for taliglucerase alfa. In connection with the payments received under the Pfizer Agreement, Protalix Ltd. is obligated to pay certain royalties. See Note 6a.</p> <p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif"> </p> <!--EndFragment--></div> </div>
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<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="WIDTH: 50%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center"> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; WIDTH: 50%; FONT-WEIGHT: bold; TEXT-DECORATION: none"> Jurisdiction:</td> <td style="PADDING-BOTTOM: 1pt; WIDTH: 1%; FONT-WEIGHT: bold"> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; WIDTH: 1%; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-SIZE: 10pt; FONT-WEIGHT: bold; TEXT-ALIGN: right; WIDTH: 47%"> <strong>Years:</strong></td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; WIDTH: 1%; FONT-WEIGHT: bold"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">Israel</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">2009-2012</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">United States (*)</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">2009-2012</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">Netherlands</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">2009-2012</td> <td style="TEXT-ALIGN: left"> </td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> (*) Includes federal, state and local (or similar provincial jurisdictions) tax positions.</p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div> <table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 1.25in" cellspacing="0" cellpadding="0"><!--StartFragment--> <tr style="VERTICAL-ALIGN: bottom"> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Year of<br /> grant</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">No. of options<br /> or restricted<br /> stock granted</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Exercise<br /> price range</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" nowrap="nowrap">Vesting period</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Fair value<br /> at grant<br /> (U.S.<br /> dollars in<br /> thousands)</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Expiration<br /> period</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 10%">2010</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: right; WIDTH: 10%">1,016,000</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: center; WIDTH: 10%">$6.90</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: center; WIDTH: 35%">3 years commencing<br /> upon achievement of a<br /> certain milestone</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">5,673</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right; WIDTH: 10%">10 years</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: left">2010</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">428,000</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: center">$6.32-$9.66</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: center">4 years</td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">2,147</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">10 years</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: left">2012</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">400,000</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: center">n/a</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: center">3 years</td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">2,288</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">n/a</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">2012</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 1,100,000</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt; TEXT-ALIGN: center"> n/a</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="TEXT-ALIGN: center; PADDING-BOTTOM: 1pt">4 years</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">$</td> <td style="TEXT-ALIGN: right; PADDING-BOTTOM: 1pt">6,292</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt; TEXT-ALIGN: right"> n/a</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">2,944,000</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: center"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <!--EndFragment--></table> </div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="WIDTH: 65%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 0.9in" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Years</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; WIDTH: 85%">Laboratory equipment</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: right; WIDTH: 12%">5</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td>Furniture</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">10-15</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">Computer equipment</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">3</td> <td style="TEXT-ALIGN: left"> </td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 98.65pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <!--EndFragment--></div> </div>
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P10Y
P24M
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12
1000
3138000
3139000
1496792
60000
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-INDENT: -17.3pt; MARGIN: 0pt 0px 0pt 71.3pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 70%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 0.5in" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6">December 31,</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="PADDING-BOTTOM: 1pt; FONT-STYLE: italic">(U.S. dollars in thousands)</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2011</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2012</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; TEXT-INDENT: -26.45pt; PADDING-LEFT: 26.45pt; FONT-WEIGHT: bold"> a. Other assets:</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 45pt; WIDTH: 74%"> Deferred costs*</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">1,558</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">89</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="PADDING-LEFT: 45pt">Institutions</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">375</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">542</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 45pt">State of Israel (see Note 6a)</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,296</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">2,400</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 45pt">Restricted deposit</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">208</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">298</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 45pt">Prepaid expenses</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">235</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">251</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 45pt">Sundry</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 165</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 106</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 3,837</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 3,686</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif"> * Manufacturing costs of inventory, paid by Pfizer, but not delivered.</p> <p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif"> <em>(U.S. dollars in thousands)</em></p> <table style="MARGIN-TOP: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0px" cellspacing="0" cellpadding="0"> <tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"> </td> <td style="TEXT-ALIGN: left; WIDTH: 0.5in"><strong>b.</strong></td> <td style="TEXT-ALIGN: justify"><strong>Accounts payable and accruals - other:</strong></td> </tr> </table> <p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 70%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 0.5in" cellspacing="0" cellpadding="0"> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 45pt; WIDTH: 74%"> Payroll and related expenses</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">1,108</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">1,748</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 45pt">Provision for vacation</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,221</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,453</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 45pt">Accrued expenses</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">2,327</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">2,032</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 45pt">Royalties payable</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">89</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,560</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; TEXT-INDENT: -0.1in; PADDING-LEFT: 52.2pt"> Liability in connection with collaboration operation- current portion</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,322</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">3,122</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; PADDING-LEFT: 45pt"> Property and equipment suppliers</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 1,473</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 1,136</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 7,540</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 11,051</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <p style="TEXT-INDENT: 0in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px; FONT: bold 10pt Times New Roman, Times, Serif"> </p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="WIDTH: 70%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 0.5in" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="10">Year ended December 31,</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2010</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2011</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2012</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-STYLE: italic">(U.S. dollars in thousands)</td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2"> </td> <td> </td> <td> </td> <td style="TEXT-ALIGN: right" colspan="2"> </td> <td> </td> <td> </td> <td style="TEXT-ALIGN: right" colspan="2"> </td> <td> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; TEXT-INDENT: -28.85pt; PADDING-LEFT: 28.85pt; FONT-WEIGHT: bold"> c. Revenues:</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; TEXT-INDENT: -0.1in; PADDING-LEFT: 0.6in; WIDTH: 61%"> Deferred revenues from the license and supply agreement with Pfizer</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">4,563</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">4,563</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">4,563</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 0.5in">Milestone payment (see note 2)</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">25,000</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; PADDING-LEFT: 0.5in"> Revenues from selling products</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 2,079</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 3,823</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 5,307</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-INDENT: -28.85pt; PADDING-LEFT: 28.85pt; FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 6,642</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 8,386</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 34,870</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <!--EndFragment--></div> </div>
39%, 25% and 0%
0.15
11051000
7540000
3122000
1322000
1136000
1473000
5267000
5032000
1410000
1374000
2032000
2327000
8500000
1560000
89000
21300000
1453000
1221000
14786000
11148000
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-INDENT: 0in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <strong>NOTE 9 - SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION</strong></p> <p style="TEXT-INDENT: -17.3pt; MARGIN: 0pt 0px 0pt 71.3pt; FONT: 10pt Times New Roman, Times, Serif"> <strong>Balance sheets:</strong></p> <p style="TEXT-INDENT: -17.3pt; MARGIN: 0pt 0px 0pt 71.3pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 70%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 0.5in" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6">December 31,</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="PADDING-BOTTOM: 1pt; FONT-STYLE: italic">(U.S. dollars in thousands)</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2011</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2012</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; TEXT-INDENT: -26.45pt; PADDING-LEFT: 26.45pt; FONT-WEIGHT: bold"> a. Other assets:</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 45pt; WIDTH: 74%"> Deferred costs*</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">1,558</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">89</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="PADDING-LEFT: 45pt">Institutions</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">375</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">542</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 45pt">State of Israel (see Note 6a)</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,296</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">2,400</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 45pt">Restricted deposit</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">208</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">298</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 45pt">Prepaid expenses</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">235</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">251</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 45pt">Sundry</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 165</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 106</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 3,837</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 3,686</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif"> * Manufacturing costs of inventory, paid by Pfizer, but not delivered.</p> <p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif"> <em>(U.S. dollars in thousands)</em></p> <table style="MARGIN-TOP: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0px" cellspacing="0" cellpadding="0"> <tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"> </td> <td style="TEXT-ALIGN: left; WIDTH: 0.5in"><strong>b.</strong></td> <td style="TEXT-ALIGN: justify"><strong>Accounts payable and accruals - other:</strong></td> </tr> </table> <p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 70%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 0.5in" cellspacing="0" cellpadding="0"> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 45pt; WIDTH: 74%"> Payroll and related expenses</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">1,108</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">1,748</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 45pt">Provision for vacation</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,221</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,453</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 45pt">Accrued expenses</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">2,327</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">2,032</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 45pt">Royalties payable</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">89</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,560</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; TEXT-INDENT: -0.1in; PADDING-LEFT: 52.2pt"> Liability in connection with collaboration operation- current portion</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,322</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">3,122</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; PADDING-LEFT: 45pt"> Property and equipment suppliers</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 1,473</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 1,136</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 7,540</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 11,051</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <p style="TEXT-INDENT: 0in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px; FONT: bold 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: bold 10pt Times New Roman, Times, Serif"> <strong>Statements of operations:</strong></p> <p style="MARGIN: 0pt 0px; FONT: bold 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 70%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 0.5in" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="10">Year ended December 31,</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2010</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2011</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2012</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-STYLE: italic">(U.S. dollars in thousands)</td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2"> </td> <td> </td> <td> </td> <td style="TEXT-ALIGN: right" colspan="2"> </td> <td> </td> <td> </td> <td style="TEXT-ALIGN: right" colspan="2"> </td> <td> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; TEXT-INDENT: -28.85pt; PADDING-LEFT: 28.85pt; FONT-WEIGHT: bold"> c. Revenues:</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; TEXT-INDENT: -0.1in; PADDING-LEFT: 0.6in; WIDTH: 61%"> Deferred revenues from the license and supply agreement with Pfizer</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">4,563</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">4,563</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">4,563</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 0.5in">Milestone payment (see note 2)</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">25,000</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; PADDING-LEFT: 0.5in"> Revenues from selling products</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 2,079</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 3,823</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 5,307</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-INDENT: -28.85pt; PADDING-LEFT: 28.85pt; FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 6,642</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 8,386</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 34,870</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <p style="TEXT-INDENT: 0in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <!--EndFragment--></div> </div>
180145000
145814000
4612000
886000
1282000
4612000
886000
1282000
1780000
1410000
4756000
422000
630000
2775000
464000
652000
7751000
886000
1282000
220000
7761168
7469088
7280469
0
10000
43000
78727000
51805000
61170000
32491000
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in"> </td> <td>Basis of presentation</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> The Company's financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP").</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-INDENT: 0in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <strong>NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES</strong></p> <p style="MARGIN: 0pt 0px; FONT: bold 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">a.</td> <td>General</td> </tr> </table> <p style="MARGIN: 0pt 0px; FONT: bold 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.75in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">1.</td> <td>Operation</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 1in; TEXT-INDENT: 0in"> </p> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 1in; TEXT-INDENT: 0in"> Protalix BioTherapeutics, Inc. (collectively with its subsidiaries, the "Company"), and its wholly-owned subsidiary, Protalix Ltd., are biopharmaceutical companies focused on the development and commercialization of recombinant therapeutic proteins based on the Company's proprietary ProCellEx<sup>®</sup> protein expression system ("ProCellEx"). In September 2009, Protalix Ltd. formed another wholly-owned subsidiary under the laws of the Netherlands, Protalix B.V., in connection with the European Medicines Agency ("EMA") application process in the European Union. The Company's two subsidiaries are referred to collectively herein as the "Subsidiaries."</p> <p style="MARGIN: 0pt 0px; FONT: bold 10pt Times New Roman, Times, Serif"> </p> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 1in; TEXT-INDENT: 0in"> On May 1, 2012, the U.S. Food and Drug Administration (<font style="TEXT-TRANSFORM: uppercase">"</font>FDA<font style="TEXT-TRANSFORM: uppercase">"</font>) approved taliglucerase alfa for injection, the Company's first approved drug product, as an enzyme replacement therapy (ERT) for the long-term treatment of adult patients with a confirmed diagnosis of type 1 Gaucher disease. Taliglucerase alfa is a proprietary, recombinant form of glucocerebrosidase (GCD) that the Company developed using ProCellEx. Taliglucerase alfa was also approved by the Israeli Ministry of Health (the "Israeli MOH") in September 2012 and recently in Uruguay. Taliglucerase alfa is the first plant cell-based recombinant therapeutic protein approved by each of the FDA and the Israeli MOH.</p> <p style="MARGIN: 0pt 0px; FONT: bold 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> Taliglucerase alfa is being marketed in the United States under the brand name ELELYSO™ by Pfizer Inc. (<font style="TEXT-TRANSFORM: uppercase">"</font>Pfizer<font style="TEXT-TRANSFORM: uppercase">"</font>), the Company's commercialization partner, as provided in the exclusive license and supply agreement by and between Protalix Ltd. and Pfizer (the <font style="TEXT-TRANSFORM: uppercase">"</font>Pfizer Agreement<font style="TEXT-TRANSFORM: uppercase">"</font>). The Company, through Protalix Ltd., markets ELELYSO in Israel.</p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> Protalix Ltd. granted Pfizer an exclusive, worldwide license to develop and commercialize taliglucerase alfa under the Pfizer Agreement, but retained those rights in Israel. The Company has agreed to a specific allocation between Protalix Ltd. and Pfizer regarding the responsibilities for the continued development efforts for taliglucerase alfa. To date, the Company has received an upfront payment of $60.0 million in connection with the execution of the Pfizer Agreement and shortly thereafter an additional $5.0 million clinical development-related milestone payment. The Company received an additional $25.0 million milestone payment in connection with the FDA's approval of taliglucerase alfa in the United States, which was considered to be a substantive milestone for purposes of revenue recognition, and, accordingly, was recorded as revenue during the period in which the milestone was achieved. The agreement provides that the Company share with Pfizer the net profits or loss related to the development and commercialization of taliglucerase alfa on a 40% and 60% basis, respectively, except with respect to the profits or losses related to commercialization efforts in Israel, where the Company retained exclusive marketing rights. <font style="COLOR: black">In calculating the net profits or losses under the agreement, there are certain agreed upon limits on the amounts that may be deducted from gross sales for certain expenses and costs of goods sold</font>.</p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> In December 2012, Protalix Ltd. entered into a Clinical Development Agreement with Pfizer under which Protalix Ltd. will continue to manage, administer and sponsor current, ongoing clinical trials relating to taliglucerase alfa. According to the terms of the agreement, Protalix Ltd. was eligible to receive a payment of $8.3 million upon the achievement of certain near-term clinical development goals. The goals were achieved, and the payment made, in December 2012. The Company evaluated the terms of the agreement and the nature of the payment made by Pfizer and concluded that the amount received represents an upfront funding of the anticipated costs of the Company's ongoing clinical trials relating to taliglucerase alfa. Accordingly, the amount was deferred upon receipt and will be recognized as a reduction of research and development expenses over the ongoing clinical trial period.</p> <p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> The Company is cooperating with Pfizer to obtain marketing approval for taliglucerase alfa in additional countries and jurisdictions. Currently, marketing authorization applications have been filed for Brazil and other countries. The European Commission (EC) issued a Commission Decision refusing the marketing authorization for taliglucerase alfa in the European Union. This decision is an endorsement of the EMA's Committee for Medicinal Products for Human Use (CHMP) June 2012 opinion recommending against the marketing authorization of taliglucerase alfa. While the CHMP gave a positive risk-benefit assessment for taliglucerase alfa, its recommendation was based solely on the orphan market exclusivity granted to VPRIV<sup>®</sup>, Shire plc's Gaucher disease treatment. It was not based on the safety and efficacy profile of taliglucerase alfa.</p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> In addition to taliglucerase alfa, the Company is working on the development of certain other products using ProCellEx.</p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> Currently, patients are being treated with taliglucerase alfa on a commercial basis in the United States and Israel. In addition, patients are being treated globally through the Company's clinical trials and related studies, compassionate use programs, special access agreements, named patient provisions and other programs designed to ensure that treatments are available to Gaucher patients in light of recent shortages of approved treatments. On July 13, 2010, the Company announced that the French regulatory authority had granted an Autorisation Temporaire d'Utilisation (ATU), or Temporary Authorization for Use, for taliglucerase alfa for the treatment of Gaucher disease. An ATU is the regulatory mechanism used by the French Health Products and Safety Agency to make non-approved drugs available to patients in France when a genuine public health need exists. This ATU allows Gaucher patients in France to receive treatment with taliglucerase alfa before marketing authorization for the product is granted in the European Union. Payment for taliglucerase alfa has been secured through government allocations to hospitals. Notwithstanding the EC's decision not to approve the market authorization of taliglucerase alfa in the EU, the Company, together with Pfizer, will continue to supply taliglucerase alfa as required by physicians under the ATU process for as long as it is authorized by the French regulatory authorities. In addition, taliglucerase alfa is currently being provided to Gaucher patients under special access agreements or named patient provisions in Brazil and in other countries.</p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> On August 10, 2010, Pfizer entered into a short-term supply agreement with the Ministry of Health of Brazil pursuant to which the Company and Pfizer have provided taliglucerase alfa to the Brazilian Ministry of Health for the treatment of Gaucher patients. During the remainder of 2010 and the first quarter of 2011, the Company and Pfizer completed the supply of products deliverable under the short-term supply agreement. During 2011, Pfizer recorded an allowance for sales returns in connection with the supply agreement because the Brazilian Ministry of Health requested that Pfizer consider the replacement of certain vials that might expire during 2012. During the third quarter of 2012 resupply for certain vials was completed. Revenue, net of allowance for sales returns, generated from the Brazilian Ministry of Health was recorded by Pfizer, and the Company recorded its share of such revenues in accordance with the terms and conditions of the Pfizer Agreement.</p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.75in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">2.</td> <td>Liquidity and Financial Resources</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> In addition to the approval of taliglucerase alfa by the FDA and the Israeli MOH, successful completion of the Company's development programs and its transition to normal operations is dependent upon obtaining the foreign regulatory approvals required to sell its products internationally. In accordance with the terms and conditions of the Pfizer Agreement, the Company received a $25.0 million milestone payment in connection with the FDA's approval of taliglucerase alfa in the United States. A substantial amount of time may pass before the Company achieves a level of revenues adequate to support its operations, if at all and the Company also expects to incur substantial expenditures in connection with the regulatory approval process for each of its product candidates during their respective developmental periods.</p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> Obtaining marketing approval with respect to any product candidate is directly dependent on the Company's ability to implement the necessary regulatory steps required to obtain such approval in the United States and in other countries. The Company cannot reasonably predict the outcome of these activities.</p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> Based on its current cash resources and commitments, the Company believes it will be able to maintain its current planned development activities and the corresponding level of expenditures for at least the next 12 months, although no assurance can be given that it will not need additional funds prior to such time. If there are unexpected increases in general and administrative expenses or research and development expenses, the Company may need to seek additional financing during the next 12 months.</p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">b.</td> <td>Basis of presentation</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> The Company's financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP").</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">c.</td> <td>Use of estimates in the preparation of financial statements</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">d.</td> <td>Functional currency</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> The dollar is the currency of the primary economic environment in which the operations of the Company and its Subsidiaries are conducted. Most of the Company's revenues are derived in dollars. Most of the Company's expenses and capital expenditures are incurred in dollars, and the major source of the Company's financing has been provided in dollars.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> Transactions and balances originally denominated in dollars are presented at their original amounts. Balances in non-dollar currencies are translated into dollars using historical and current exchange rates for non-monetary and monetary balances, respectively. For non-dollar transactions and other items (stated below) reflected in the statements of operations, the following exchange rates are used: (i) for transactions - exchange rates at the transaction dates or average rates; and (ii) for other items (derived from non-monetary balance sheet items such as depreciation and amortization, etc.) - historical exchange rates. Currency transaction gains and losses are carried to financial income or expenses, as appropriate.</p> <p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">e.</td> <td>Cash equivalents</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> The Company considers all short-term, highly liquid investments, which include short-term bank deposits with original maturities of three months or less from the date of purchase, that are not restricted as to withdrawal or use and are readily convertible to known amounts of cash, to be cash equivalents.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">f.</td> <td>Inventories</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> Inventories are valued at the lower of cost or market. Cost of raw and packaging materials and purchased products is determined using the "moving average" basis.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> Cost of finished products that are capitalized is determined as follows: the value of the raw and packaging materials component is determined primarily on a using the "moving average" basis; the value of the labor and overhead component is determined on an average basis over the production period.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> Prior to the FDA's approval of taliglucerase alfa, manufacturing costs related to taliglucerase alfa were not capitalized; rather, such costs were expensed as research and development expenses. Effective as of the FDA approval of taliglucerase alfa on May 1, 2012, the Company capitalizes manufacturing costs associated with taliglucerase alfa.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">g.</td> <td>Property and equipment</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 1in; TEXT-INDENT: -0.25in"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.75in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">1.</td> <td><font style="FONT-WEIGHT: normal">Property and equipment are stated at cost, net of accumulated depreciation and amortization.</font> </td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 1in; TEXT-INDENT: -0.25in"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.75in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">2.</td> <td style="FONT-WEIGHT: normal">The Company's assets are depreciated by the straight-line method on the basis of their estimated useful lives as follows:</td> </tr> </table> <p style="MARGIN: 0pt 0px; FONT: bold 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 65%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 1.5in" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Years</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; WIDTH: 85%">Laboratory equipment</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: right; WIDTH: 12%">5</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td>Furniture</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">10-15</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">Computer equipment</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">3</td> <td style="TEXT-ALIGN: left"> </td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 98.65pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> Leasehold improvements are amortized by the straight-line method over the expected lease term, which is shorter than the estimated useful life of the improvements.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">h.</td> <td>Impairment in value of long-lived assets:</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> The Company tests long-lived assets for impairment if an indication of impairment exists. If the sum of expected future cash flows of definite life assets (undiscounted and without interest charges) is less than the carrying amount of such assets, the Company recognizes an impairment loss, and writes down the assets to their estimated fair values.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">i.</td> <td>Income taxes</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 1.25in; TEXT-INDENT: -0.5in"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.75in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">1.</td> <td style="FONT-WEIGHT: normal">Deferred income taxes</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> Deferred taxes are determined utilizing the assets and liabilities method based on the estimated future tax effects of the differences between the financial accounting and tax bases of assets and liabilities under the applicable tax laws. Deferred tax balances are computed using the tax rates expected to be in effect when those differences reverse. A valuation allowance in respect of deferred tax assets is provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company has provided a full valuation allowance with respect to its deferred tax assets.</p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> The guidance prohibits the recognition of deferred tax liabilities or assets that arise from differences between the financial reporting and tax bases of assets and liabilities that are measured from the local currency into dollars using historical exchange rates, and that result from changes in exchange rates or indexing for tax purposes. Consequently, the above mentioned differences with respect to Protalix Ltd. were not reflected in the computation of deferred tax assets and liabilities.</p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.75in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">2.</td> <td style="FONT-WEIGHT: normal">Uncertainty in income taxes</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> Tax benefits recognized in the financial statements are those that the Company's management deems at least more likely than not to be sustained, based on technical merits. The amount of benefits recorded for these tax benefits is measured as the largest benefit the Company's management deems more likely than not to be sustained.</p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">j.</td> <td>Revenue Recognition</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> The Company recognizes revenue when the earnings process is complete, which is when revenue is realized or realizable and earned, there is persuasive evidence a revenue arrangement exists, delivery of goods or services has occurred, the sales price is fixed or determinable and collectability is reasonably assured.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.75in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">1.</td> <td style="FONT-WEIGHT: normal">Revenues from the license and supply agreement with Pfizer</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> The Company recognizes revenue from milestone payments received pursuant to the Pfizer Agreement in accordance with guidance regarding revenue recognition and accounting for revenue arrangements with multiple deliverables. As the arrangement with Pfizer requires the Company's continued involvement with respect to the proposed commercialization of taliglucerase alfa, the non-refundable, up-front license payment the Company received from Pfizer was deferred and recognized over the related performance period. The Company estimated the performance period of 14 years (commencing upon the date of the Company's receipt of the up-front license payment payable by Pfizer under the Pfizer Agreement) based on the date the last relevant patent expires. See Note 2. The Company adjusts the performance periods, if appropriate, based on the applicable facts and circumstances. Each milestone payment that is considered to be substantive for purposes of revenue recognition is recorded as revenue during the period during which the milestone is achieved.</p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.75in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">2.</td> <td style="FONT-WEIGHT: normal">Revenues from selling products to Pfizer</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> The Company recognizes revenues from products sold to Pfizer upon delivery, when the sales price is fixed or determinable and collectability is reasonably assured.</p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.75in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">3.</td> <td style="FONT-WEIGHT: normal">Company's share in the collaboration agreement</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 1in; TEXT-INDENT: 0in"> </p> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 1in; TEXT-INDENT: 0in"> Under the terms and conditions of the Pfizer Agreement, the Company is entitled to 40% of the profits or loss from sales of taliglucerase alfa, and related expenses incurred, except with respect to sales in Israel, where the Company retained exclusive marketing rights. Since Pfizer bears most of the risks and rewards relating to the agreement, the Company's share in the profits and loss in the agreement is recognized on a net basis. The Company recognizes its share of net profit or loss from the Pfizer Agreement based on reports it receives from Pfizer summarizing the results of the collaborative activities under the agreement for the applicable period. Under the terms of the Pfizer Agreement, for its subsidiaries operating outside the United States, financial information is included based on the fiscal year ending November 30, while financial information for the U.S. entity is included based on the fiscal year ending December 31.</p> <p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">k.</td> <td>Research and development costs</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> Research and development costs are expensed as incurred and consist primarily of personnel, subcontractors and consultants (mainly in connection with clinical trials), facilities, equipment and supplies for research and development activities. Grants received by the Israeli Subsidiary from the Office of the Chief Scientist of Israel's Ministry of Industry, Trade and Labor (the "OCS") are recognized when the grant becomes receivable, provided there is reasonable assurance that the Company or the Subsidiary will comply with the conditions attached to the grant and there is reasonable assurance the grant will be received. The grant is deducted from the research and development expenses as the applicable costs are incurred.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> Reimbursements received from Pfizer are recognized when the reimbursements become receivable, provided there is reasonable assurance that the Company will comply with the conditions attached to the reimbursements and there is reasonable assurance the reimbursements will be received. The reimbursements are deducted from the research and development expenses as the applicable costs are incurred.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> In connection with purchases of assets, amounts assigned to intangible assets to be used in a particular research and development project that have no alternative future use are charged to research and development costs at the purchase date.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> Nonrefundable advance payments for goods or services that will be used or rendered for future research and development activities are deferred and amortized over the period that the goods are consumed or the related services are performed.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">l.</td> <td>Concentration of credit risks and trade receivable</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> Financial instruments that potentially subject the Company to concentration of credit risk consist principally of bank deposits. The Company deposits these instruments with highly rated financial institutions, mainly in Israeli banks, and, as a matter of policy, limits the amounts of credit exposure to any one financial institution. The Company has not experienced any credit losses in these accounts and does not believe it is exposed to any significant credit risk on these instruments.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> <font style="COLOR: black">The Company's trade</font> receivable <font style="COLOR: black">represents mainly amounts to be received from Pfizer, as the Company currently receives most of its revenues from Pfizer. The Company does not require Pfizer to post collateral with respect to the receivables. The Company performs periodic credit evaluations of Pfizer's financial condition and believes there is no significant risk with respect to Pfizer's payment of the receivables.</font></p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">m.</td> <td>Share-based compensation</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> The Company accounts for employee's share-based payment awards classified as equity awards using the grant-date fair value method. The fair value of share-based payment transactions is recognized as an expense over the requisite service period, net of estimated forfeitures. The Company estimates forfeitures based on historical experience and anticipated future conditions.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> The Company elected to recognize compensation cost for an award with only service conditions that has a graded vesting schedule using the accelerated method based on the multiple-option award approach.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> When stock options are granted as consideration for services provided by consultants and other non-employees, the grant is accounted for based on the fair value of the stock options issued. Options granted is measured on a final basis at the end of the related service period and is recognized over the related service period using the straight-line method.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">n.</td> <td>Net Loss per share</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> Basic and diluted loss per share ("LPS") are computed by dividing net loss by the weighted average number of shares of the Company's Common Stock, par value $0.001 per share (the "Common Stock") outstanding for each period.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> Diluted LPS does not include 7,761,168, 7,469,088 and 7,280,469 <font style="COLOR: black">shares of Common Stock underlying outstanding options and restricted shares of Common Stock</font> for the fiscal years ended December 31, 2010, 2011 and 2012, respectively, because the effect would be anti-dilutive.</p> <!--EndFragment--></div> </div>
52035000
27001000
35900000
81266000
25034000
-8899000
-45366000
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in"> </td> <td>Cash equivalents</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> The Company considers all short-term, highly liquid investments, which include short-term bank deposits with original maturities of three months or less from the date of purchase, that are not restricted as to withdrawal or use and are readily convertible to known amounts of cash, to be cash equivalents.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-INDENT: 0in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <strong>NOTE 6 - COMMITMENTS</strong></p> <p style="MARGIN: 0pt 0px; FONT: bold 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">a.</td> <td>Royalty commitments</td> </tr> </table> <p style="MARGIN: 0pt 0px; FONT: bold 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.75in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">1.</td> <td style="FONT-WEIGHT: normal">The Company is obligated to pay royalties to the OCS on proceeds from the sale of products developed from research and development activities that were funded, partially, by grants from the OCS. At the time the grants were received, successful development of the related projects was not assured.</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> In the case of failure of a project that was partly financed as described above, the Company is not obligated to pay any such royalties or repay funding received from the OCS.</p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> Under the terms of the funding arrangements with the OCS, royalties of 3% to 6% are payable on the sale of products developed from projects funded by the OCS, which payments shall not exceed, in the aggregate, 100% of the amount of the grant received (dollar linked), plus, commencing upon January 1, 2001, interest at annual rate based on LIBOR. In addition, if the Company receives approval to manufacture products developed with government grants outside the State of Israel, it will be required to pay an increased total amount of royalties (possibly up to 300% of the grant amounts plus interest), depending on the manufacturing volume that is performed outside the State of Israel, and, possibly, an increased royalty rate.</p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> Royalty expenses to the OCS are included in the statement of operations as a component of the cost of revenues and were approximately $769,000, $158,000 and $1.5 million during the years ended December 31, 2010, 2011 and 2012, respectively.</p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> At December 31, 2012, the maximum royalty amount payable by the Company under these funding arrangements is approximately $21.3 million (without interest, assuming 100% of the funds are payable).</p> <p style="TEXT-INDENT: 0in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.75in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">2.</td> <td style="FONT-WEIGHT: normal">The Company is a party to certain research and license agreements. Under the <font style="COLOR: black">agreements, the Company is obligated</font> to pay royalties at varying rates from its future revenues. The aggregate royalties payable under all of the agreements is equal to a varying range of percentages of net sales of licensed products. Royalty expenses under the agreements are included in the statement of operations as a component of the cost of revenues and were approximately $115,000, $19,000 and $674,000 during the years ended December 31, 2010, 2011 and 2012, respectively.</td> </tr> </table> <p style="MARGIN: 0pt 0px; FONT: bold 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> Under each agreement, the Company is also obligated to pay milestone, licensing and other payments to the counterparties of the agreement. The payments under the agreements are for varying amounts and are subject to varying conditions. If all of the contingencies with respect to milestone payments under the research and license agreements are met, the aggregate milestone payments payable would be approximately $1.0 million and would be payable, if at all, as the Company's projects progress over the course of a number of years. In addition, a milestone payment of approximately $100,000 was made in respect of the agreements during the year ended December 31, 2010. No milestone payments were made during 2011 and 2012.</p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> None of the agreements has a fixed termination date. Subject to earlier termination for other reasons, each agreement terminates after a certain number of years following the first commercial sale of any licensed product under the agreement or after a certain number of years without the initiation of commercial sales of any product under the agreement.</p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">b.</td> <td>Subcontracting Agreements</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> The Company has entered into sub-contracting agreements with several clinical providers and consultants in Israel, the United States and certain other countries in connection with its primary product development process and with expenditure of the company's manufacturing facilities. As of December 31, 2012, total commitments under said agreements were approximately $1.3 million.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">c.</td> <td>Lease Agreements</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> The Company is a party to a number of lease agreements for its facilities, the latest of which expires in 2016. The Company has the option to extend certain of such agreements on three occasions for additional five-year periods, for a total of 15 additional years. Under the leases, the aggregate monthly rental payments are approximately $82,000. As of December 31, 2012, the Company provided bank guarantees of approximately $298,000, in the aggregate, to secure the fulfillment of its obligations under the lease agreements. The future minimum lease payments required in each of the next five years under the operating leases for such premises are approximately as follows: 2013 - $976,000, 2014 - $968,000, 2015 - $985,000 and 2016 - $823,000. Lease expenses totaled $891,000, $994,000 and $971,000 for the years ended December 31, 2010, 2011 and 2012, respectively.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">d.</td> <td>Vehicle Lease and Maintenance Agreements</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> The Company entered into several three-year lease and maintenance agreements for vehicles which are regularly amended as new vehicles are leased. The current monthly lease fees aggregate approximately $49,000. The expected lease payments for the years ending December 31, 2013, 2014 and 2015 are approximately $526,000, $385,000 and $175,000, respectively.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; WIDTH: 100%; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">e.</td> <td>Yissum Agreement</td> </tr> </table> <p style="TEXT-ALIGN: left; MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="TEXT-ALIGN: left; MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> On August 8, 2007, the Company signed an agreement with the Yissum Research and Development Company, the technology transfer arm of the Hebrew University of Jerusalem, Israel ("Yissum"), and the Boyce Thompson Institute for Plant Research, at Cornell University, Ithaca, New York ("Boyce Thompson"), to develop a proprietary plant cell-based acetylcholinesterase (AChE) and its molecular variants for the use in several therapeutic and prophylactic indications, including a biodefense program and organophosphate-based pesticide treatment. Pursuant to the agreement, the Company has received an exclusive worldwide right and license to certain technology, including patents and additional patent applications relating to AChE (the "Licensed Technology"), for all therapeutic and prophylactic indications. In consideration for the license, the Company is <font style="COLOR: black">obligated to pay Yissum and</font> Boyce Thompson, collectively, <font style="COLOR: black">an annual, non-refundable initial maintenance fee of $20,000,</font> commencing on the fourth anniversary of the execution of the agreement, which is subject to a 12% annual increase. <font style="COLOR: black">In addition,</font> the Company is required to make certain milestone payments equal to up to $700,000, in the aggregate, upon its achievement of clinical milestones and royalties from sales derived from any drugs developed by the Company with the Licensed Technology. The agreement does not terminate until either party to the agreement elect to terminate the agreement, subject to certain terms and conditions set forth therein.</p> <!--EndFragment--></div> </div>
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93489809
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400000
93489809
85630157
93000
86000
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td>Concentration of credit risks and trade receivable</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> Financial instruments that potentially subject the Company to concentration of credit risk consist principally of bank deposits. The Company deposits these instruments with highly rated financial institutions, mainly in Israeli banks, and, as a matter of policy, limits the amounts of credit exposure to any one financial institution. The Company has not experienced any credit losses in these accounts and does not believe it is exposed to any significant credit risk on these instruments.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> <font style="COLOR: black">The Company's trade</font> receivable <font style="COLOR: black">represents mainly amounts to be received from Pfizer, as the Company currently receives most of its revenues from Pfizer. The Company does not require Pfizer to post collateral with respect to the receivables. The Company performs periodic credit evaluations of Pfizer's financial condition and believes there is no significant risk with respect to Pfizer's payment of the receivables.</font></p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <!--EndFragment--></div> </div>
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<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in"> </td> <td>Net Loss per share</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> Basic and diluted loss per share ("LPS") are computed by dividing net loss by the weighted average number of shares of the Company's Common Stock, par value $0.001 per share (the "Common Stock") outstanding for each period.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> Diluted LPS does not include 7,761,168, 7,469,088 and 7,280,469 <font style="COLOR: black">shares of Common Stock underlying outstanding options and restricted shares of Common Stock</font> for the fiscal years ended December 31, 2010, 2011 and 2012, respectively, because the effect would be anti-dilutive.</p> <!--EndFragment--></div> </div>
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0.25
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7000000
P1Y1M6D
554000
2000
968000
171000
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591000
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in"> </td> <td>Functional currency</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> The dollar is the currency of the primary economic environment in which the operations of the Company and its Subsidiaries are conducted. Most of the Company's revenues are derived in dollars. Most of the Company's expenses and capital expenditures are incurred in dollars, and the major source of the Company's financing has been provided in dollars.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> Transactions and balances originally denominated in dollars are presented at their original amounts. Balances in non-dollar currencies are translated into dollars using historical and current exchange rates for non-monetary and monetary balances, respectively. For non-dollar transactions and other items (stated below) reflected in the statements of operations, the following exchange rates are used: (i) for transactions - exchange rates at the transaction dates or average rates; and (ii) for other items (derived from non-monetary balance sheet items such as depreciation and amortization, etc.) - historical exchange rates. Currency transaction gains and losses are carried to financial income or expenses, as appropriate.</p> <!--EndFragment--></div> </div>
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1443000
6861000
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in"> </td> <td>Impairment in value of long-lived assets:</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> The Company tests long-lived assets for impairment if an indication of impairment exists. If the sum of expected future cash flows of definite life assets (undiscounted and without interest charges) is less than the carrying amount of such assets, the Company recognizes an impairment loss, and writes down the assets to their estimated fair values.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-INDENT: 0in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <strong>NOTE 8 - TAXES ON INCOME</strong></p> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 0.75in; TEXT-INDENT: -0.25in"> </p> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">a.</td> <td>The Company</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> Protalix BioTherapeutics, Inc. is taxed according to U.S. tax laws. The Company's income is, or will be, taxed in the United States at the rate of up to 39%.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 1in; TEXT-INDENT: -0.5in"> </p> <table style="MARGIN-TOP: 0pt; WIDTH: 100%; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">b.</td> <td>Protalix Ltd.</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> The Israeli Subsidiary is taxed according to Israeli tax laws:</p> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 1in; TEXT-INDENT: -0.25in"> </p> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.75in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">1.</td> <td>Measurement of results for tax purposes</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> Since 2008, the Company has measured the results of the Israeli Subsidiary for tax purposes in nominal terms in NIS. Pursuant to the Israel Income Tax Law (Adjustments for Inflation), 1985 (the "Adjustments Law"), the Subsidiary's results for tax purposes have been measured through 2007 on a real basis, based on changes in the Israel consumer price index.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 1in; TEXT-INDENT: -0.25in"> </p> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.75in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">2.</td> <td>Tax rates</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> The income of the Israeli Subsidiary, other than income from "Approved Enterprises," is taxed in Israel at the regular rate. See 3 below. According to the provisions of the Law for Amending the Israel Income Tax Ordinance, 2005, corporate tax rates will be gradually lowered, resulting in a corporate tax rate for 2009 and thereafter: 2009 - 26% and for 2010 and thereafter - 25%.</p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> On July 14, 2009, the Israel Economic Efficiency Law (Legislation Amendments for Applying the Economic Plan for 2009 and 2010), 2009, became effective, stipulating, among other things, an additional gradual decrease in tax rates in 2011 and thereafter, as follows: 2011 - 24%, 2012 - 23%, 2013 - 22%, 2014 - 21%, 2015 - 20% and 2016 and thereafter - 18%.</p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> On December 5, 2011, the "Tax Burden Distribution Law" (hereinafter - the 2011 amendment) was officially published, discontinuing a previously approved gradual decrease in corporate tax provided in the 2009 amendment, and setting the corporate tax rate in Israel for 2012 and thereafter to 25%.</p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> Capital gain is subject to capital gain tax according to corporate tax rate in the year of selling the assets.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 1in; TEXT-INDENT: -0.25in"> </p> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.75in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">3.</td> <td>The Law for the Encouragement of Capital Investments, 1959 (the "Encouragement of Capital Investments Law")</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> Under the Encouragement of Capital Investments Law, including Amendment No. 60 to the Encouragement of Capital Investments Law as published in April 2005, by virtue of the "Approved Enterprise" or "Benefited Enterprise" status the Israeli Subsidiary is entitled to various tax benefits as follows:</p> <p style="TEXT-INDENT: -37.1pt; MARGIN: 0pt 0px 0pt 1.5in; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 70.9pt"> </td> <td style="WIDTH: 37.1pt">a.</td> <td><strong>Reduced tax rates</strong></td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> Income derived from the Approved Enterprise during a 10-year period commencing upon the year in which the enterprise first realizes taxable income is tax exempt, provided that the maximum period to which it is restricted by the Encouragement of Capital Investments Law has not elapsed.</p> <p style="MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> The Israeli Subsidiary has an "Approved Enterprise" plan since 2004 and "Benefited Enterprise" plan since 2009. The period of benefits in respect of the main enterprise of the Company has not yet commenced. The period during which the Company is entitled to benefits in connection with the Benefited Enterprise expires in 2021.</p> <p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> If the Israeli Subsidiary subsequently pays a dividend out of income derived from the "Approved Enterprise" or "Benefited Enterprise" during the tax exemption period, it will be subject to a tax on the amount distributed, including any company tax on these amounts, at the rate which would have been applicable had such income not been exempted.</p> <p style="MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> In addition to the corporate taxes in Israel, the Company might be subject to a withholding tax on the U.S. revenue source portion of the payments made to the Company for its share of Pfizer's net profits under the Pfizer Agreement. The withholding tax rate is currently 15%.</p> <p style="TEXT-INDENT: -0.25in; MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 1in"> </td> <td style="WIDTH: 0.25in">b.</td> <td><strong>Accelerated depreciation</strong></td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> The Israeli Subsidiary is entitled to claim accelerated depreciation, as provided by Israeli law, in the first five years of operation of each asset, in respect of buildings, machinery and equipment used by the Approved Enterprise and the Benefited Enterprise.</p> <p style="TEXT-INDENT: -0.25in; MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 1in"> </td> <td style="WIDTH: 0.25in">c.</td> <td><strong>Conditions for entitlement to the benefits</strong></td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> The Israeli Subsidiary's entitlement to the benefits described above is subject to its fulfilling the conditions stipulated by the law, rules and regulations published thereunder, and the instruments of approval for the specific investment in an approved enterprise. If there is any failure by the Israeli Subsidiary to comply with these conditions, the benefits may be cancelled and the Subsidiary may be required to refund the amount of the benefits, in whole or in part, with interest. The Israeli Subsidiary received a final implementation approval with respect to its "Approved Enterprise" from the Investment Center.</p> <p style="TEXT-INDENT: -0.25in; MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 1in"> </td> <td style="WIDTH: 0.25in">d.</td> <td><strong>Amendment of the Law for the Encouragement of Capital Investments, 1959</strong></td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> The Encouragement of Capital Investments Law was amended as part of the Economic Policy Law for the years 2011-2012, which was passed by the Israeli Knesset on December 29, 2010 (the "Capital Investments Law Amendment").</p> <p style="MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> The Capital Investments Law Amendment sets alternative benefit tracks to those currently in effect under the provisions of the Encouragement of Capital Investments Law.</p> <p style="MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> The benefits granted to the Benefited Enterprises will be unlimited in time, unlike the benefits granted to special Benefited enterprises, which will be limited for a 10-year period. The benefits shall be granted to companies that will qualify under criteria set in the law; for the most part, those criteria are similar to the criteria that were set in the Encouragement of Capital Investments Law prior to its amendment.</p> <p style="MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> Under the transitional provisions of the Encouragement of Capital Investments Law, the Company is entitled to take advantage of the tax benefits available under the Encouragement of Capital Investments Law prior to its amendment until the end of the benefits period, as defined in the Encouragement of Capital Investments Law. The Company will be allowed to set the "year of election" no later than tax year 2012, provided that the minimum qualifying investment was made not later than the end of 2010. On each year during the benefits period, the Company will be able to elect that the Capital Investments Amendment apply to the Company, thereby making the tax rates described above available to the Company. An election to have the Capital Investments Amendment apply is irrecoverable. The Company elected not to have the Capital Investments Amendment apply to the Company.</p> <p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 1in; TEXT-INDENT: -0.25in"> </p> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.75in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">4.</td> <td>The Law for the Encouragement of Industry (Taxation), 1969:</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> The Israeli Subsidiary is an "industrial company," as defined under the Law for the Encouragement of Industry (Taxation), 1969 (the "Law for the Encouragement of Industry"). As such, the Israeli Subsidiary is entitled to claim depreciation at increased rates for equipment used in industrial activity, as stipulated by regulations published under Law for the Encouragement of Industry, and has done so.</p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> Under the provisions of the Income Tax Regulations "Accelerated Depreciation in respect of Equipment acquired during the Defined Period" (Temporary Orders), industrial companies whose operations are mostly "eligible operations" are entitled to claim accelerated depreciation at a rate of 50% on machinery and equipment acquired from June 1, 2008 to May 31, 2009.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 1in; TEXT-INDENT: -0.5in"> </p> <table style="MARGIN-TOP: 0pt; WIDTH: 100%; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">c.</td> <td>Tax losses carried forward to future years</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> As of December 31, 2012, the Company had aggregate net operating loss (NOL) carry-forwards equal to approximately $72.5 million that are available to reduce future taxable income as follows:</p> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 1in; TEXT-INDENT: -0.25in"> </p> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.75in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">1.</td> <td>The Company</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> The NOL carry-forward of the Company equal to approximately $13.8 million may be restricted under Section 382 of the Internal Revenue Code ("IRC"). IRC Section 382 applies whenever a corporation with NOL experiences an ownership change. As a result of IRC Section 382, the taxable income for any post change year that may be offset by a pre-change NOL may not exceed the general IRC Section 382 limitation, which is the fair market value of the pre-change entity multiplied by the IRC long-term tax exempt rate.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 1in; TEXT-INDENT: -0.25in"> </p> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.75in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">2.</td> <td>Protalix Ltd.</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> At December 31, 2012, the Israeli Subsidiary had approximately $58.7 million of NOL carry-forwards that are available to reduce future taxable income with no limited period of use.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 0.75in; TEXT-INDENT: -0.25in"> </p> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">d.</td> <td>Deferred income taxes:</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> The components of the Company's net deferred tax assets at December 31, 2011 and 2012 were as follows:</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 70%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 1in" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6">December 31,</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="PADDING-BOTTOM: 1pt; FONT-STYLE: italic">(U.S. dollars in thousands)</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2011</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2012</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td>In respect of:</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 9pt; WIDTH: 74%"> Research and development expenses</td> <td style="WIDTH: 1%; COLOR: black"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%; COLOR: black">4,119</td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> </td> <td style="WIDTH: 1%; COLOR: black"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> </td> <td style="TEXT-ALIGN: right; WIDTH: 10%; COLOR: black">6,003</td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 9pt">Property and equipment</td> <td style="COLOR: black"> </td> <td style="TEXT-ALIGN: left; COLOR: black"> </td> <td style="TEXT-ALIGN: right; COLOR: black">(149</td> <td style="TEXT-ALIGN: left; COLOR: black">)</td> <td style="COLOR: black"> </td> <td style="TEXT-ALIGN: left; COLOR: black"> </td> <td style="TEXT-ALIGN: right; COLOR: black">(647</td> <td style="TEXT-ALIGN: left; COLOR: black">)</td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 9pt">Provision for vacation</td> <td style="COLOR: black"> </td> <td style="TEXT-ALIGN: left; COLOR: black"> </td> <td style="TEXT-ALIGN: right; COLOR: black">305</td> <td style="TEXT-ALIGN: left; COLOR: black"> </td> <td style="COLOR: black"> </td> <td style="TEXT-ALIGN: left; COLOR: black"> </td> <td style="TEXT-ALIGN: right; COLOR: black">363</td> <td style="TEXT-ALIGN: left; COLOR: black"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 9pt">Severance pay obligation</td> <td style="COLOR: black"> </td> <td style="TEXT-ALIGN: left; COLOR: black"> </td> <td style="TEXT-ALIGN: right; COLOR: black">164</td> <td style="TEXT-ALIGN: left; COLOR: black"> </td> <td style="COLOR: black"> </td> <td style="TEXT-ALIGN: left; COLOR: black"> </td> <td style="TEXT-ALIGN: right; COLOR: black">192</td> <td style="TEXT-ALIGN: left; COLOR: black"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 9pt">Deferred revenues</td> <td style="COLOR: black"> </td> <td style="TEXT-ALIGN: left; COLOR: black"> </td> <td style="TEXT-ALIGN: right; COLOR: black">4,746</td> <td style="TEXT-ALIGN: left; COLOR: black"> </td> <td style="COLOR: black"> </td> <td style="TEXT-ALIGN: left; COLOR: black"> </td> <td style="TEXT-ALIGN: right; COLOR: black">10,449</td> <td style="TEXT-ALIGN: left; COLOR: black"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 9pt">Net operating loss carry forwards</td> <td style="COLOR: black"> </td> <td style="TEXT-ALIGN: left; COLOR: black"> </td> <td style="TEXT-ALIGN: right; COLOR: black">4,579</td> <td style="TEXT-ALIGN: left; COLOR: black"> </td> <td style="COLOR: black"> </td> <td style="TEXT-ALIGN: left; COLOR: black"> </td> <td style="TEXT-ALIGN: right; COLOR: black">15,176</td> <td style="TEXT-ALIGN: left; COLOR: black"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">Valuation allowance</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (13,764</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">)</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (31,536</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">)</td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> -</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> -</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> Deferred taxes are computed using the tax rates expected to be in effect when those differences reverse. The Company used tax rates of 39%, 25% and 0%.</p> <p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 1in; TEXT-INDENT: -0.5in"> </p> <table style="MARGIN-TOP: 0pt; WIDTH: 100%; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">e.</td> <td>Reconciliation of the theoretical tax expense to actual tax expense</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> The main reconciling item between the statutory tax rate of the Company and the effective rate is the provision for full valuation allowance in respect of tax benefits from carry forward tax losses due to the uncertainty of the realization of such tax benefits (see above).</p> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 1in; TEXT-INDENT: -0.5in"> </p> <table style="MARGIN-TOP: 0pt; WIDTH: 100%; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">f.</td> <td>Tax assessments</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> In accordance with the Income Tax Ordinance, as of December 31, 2012, all of Protalix Ltd.'s tax assessments through tax year 2008 are considered final.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> A summary of open tax years by major jurisdiction is presented below:</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 50%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center"> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; WIDTH: 50%; FONT-WEIGHT: bold; TEXT-DECORATION: none"> Jurisdiction:</td> <td style="PADDING-BOTTOM: 1pt; WIDTH: 1%; FONT-WEIGHT: bold"> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; WIDTH: 1%; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; FONT-SIZE: 10pt; FONT-WEIGHT: bold; TEXT-ALIGN: right; WIDTH: 47%"> <strong>Years:</strong></td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; WIDTH: 1%; FONT-WEIGHT: bold"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">Israel</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">2009-2012</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">United States (*)</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">2009-2012</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">Netherlands</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">2009-2012</td> <td style="TEXT-ALIGN: left"> </td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> (*) Includes federal, state and local (or similar provincial jurisdictions) tax positions.</p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td>Income taxes</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 1.25in; TEXT-INDENT: -0.5in"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.75in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">1.</td> <td style="FONT-WEIGHT: normal">Deferred income taxes</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> Deferred taxes are determined utilizing the assets and liabilities method based on the estimated future tax effects of the differences between the financial accounting and tax bases of assets and liabilities under the applicable tax laws. Deferred tax balances are computed using the tax rates expected to be in effect when those differences reverse. A valuation allowance in respect of deferred tax assets is provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company has provided a full valuation allowance with respect to its deferred tax assets.</p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> The guidance prohibits the recognition of deferred tax liabilities or assets that arise from differences between the financial reporting and tax bases of assets and liabilities that are measured from the local currency into dollars using historical exchange rates, and that result from changes in exchange rates or indexing for tax purposes. Consequently, the above mentioned differences with respect to Protalix Ltd. were not reflected in the computation of deferred tax assets and liabilities.</p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.75in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">2.</td> <td style="FONT-WEIGHT: normal">Uncertainty in income taxes</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> Tax benefits recognized in the financial statements are those that the Company's management deems at least more likely than not to be sustained, based on technical merits. The amount of benefits recorded for these tax benefits is measured as the largest benefit the Company's management deems more likely than not to be sustained.</p> <!--EndFragment--></div> </div>
2977000
6147000
-1029000
-243000
-3891000
6860000
1281000
-3005000
-4563000
3760000
-910000
1189000
80000
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-INDENT: 0in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <strong>NOTE 4 - INVENTORIES</strong></p> <p style="MARGIN: 0pt 0px; FONT: bold 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">a.</td> <td style="FONT-WEIGHT: normal">Inventories at December 31, 2011 and 2012 consisted of the following:</td> </tr> </table> <p style="MARGIN: 0pt 0px; FONT: bold 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 70%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 1in" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6" nowrap="nowrap">December 31,</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt" nowrap="nowrap"> (<em>U.S. dollars in thousands)</em></td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">2011</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">2012</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; WIDTH: 70%">Raw materials</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 12%">279</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 12%">2,118</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">Work in progress</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">192</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">Finished goods</td> <td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 1pt"> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 1,729</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt">Total inventory</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 279</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 4,039</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">b.</td> <td style="FONT-WEIGHT: normal">During the year ended December 31, 2011 and 2012, <font style="COLOR: black">the Company recorded</font> approximately $363,000 and $684,000 respectively, for write-down of inventory under cost of revenues.</td> </tr> </table> <!--EndFragment--></div> </div>
1729000
4039000
279000
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in"> </td> <td>Inventories</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> Inventories are valued at the lower of cost or market. Cost of raw and packaging materials and purchased products is determined using the "moving average" basis.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> Cost of finished products that are capitalized is determined as follows: the value of the raw and packaging materials component is determined primarily on a using the "moving average" basis; the value of the labor and overhead component is determined on an average basis over the production period.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> Prior to the FDA's approval of taliglucerase alfa, manufacturing costs related to taliglucerase alfa were not capitalized; rather, such costs were expensed as research and development expenses. Effective as of the FDA approval of taliglucerase alfa on May 1, 2012, the Company capitalizes manufacturing costs associated with taliglucerase alfa.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <!--EndFragment--></div> </div>
2118000
279000
192000
684000
363000
82084000
77882000
78727000
51805000
25755000
18693000
56329000
59189000
5425000
6566000
26558000
20927000
501000
-2286000
-5868000
-7992000
635000
-23570000
-38464000
-11618000
-36529000
-28998000
-11618000
-36529000
-28998000
2009
2012
2009
2012
2009
2012
-12172000
-36531000
-29966000
526000
976000
823000
175000
985000
385000
968000
971000
994000
891000
72500000
58700000
13800000
3686000
3837000
89000
1558000
542000
375000
2400000
1296000
298000
208000
106000
165000
138000
165000
137000
1800000
1400000
2068000
5705000
7855000
2016000
1700000
36000
14000
26000
276000
155000
377000
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-INDENT: 0in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <strong>NOTE 5 - LIABILITY FOR EMPLOYEE RIGHTS UPON RETIREMENT</strong></p> <p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif"> The Israeli Subsidiary is required to make a severance payment upon dismissal of an employee or upon termination of employment in certain circumstances. The severance pay liability to the employees (based upon length of service and the latest monthly salary - one month's salary for each year employed) is recorded on the Company's balance sheets under "Liability for employee rights upon retirement." The liability is recorded as if it were payable at each balance sheet date on an undiscounted basis.</p> <p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif"> The liability is funded in part from the purchase of insurance policies or by the establishment of pension funds with dedicated deposits in the funds. The amounts used to fund these liabilities are included in the Company's balance sheets under "Funds in respect of employee rights upon retirement." These policies are the Company's assets. However, under labor agreements and subject to certain limitations, any policy may be transferred to the ownership of the individual employee for whose benefit the funds were deposited. In the years ended December 31, 2010, 2011 and 2012, the Company deposited approximately $174,000, $181,000 and $177,000, respectively, with insurance companies in connection with its severance payment obligations.</p> <p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif"> In accordance with the current employment agreements with certain employees, the Company makes regular deposits with certain insurance companies for accounts controlled by each applicable employee in order to secure the employee's rights upon retirement. The Company is fully relieved from any severance pay liability with respect to each such employee after it makes the payments on behalf of the employee. The liability accrued in respect of these employees and the amounts funded, as of the respective agreement dates, are not reflected in the Company's balance sheets, as the amounts funded are not under the control and management of the Company and the pension or severance pay risks have been irrevocably transferred to the applicable insurance companies (the "Contribution Plans").</p> <p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif"> The amounts of severance pay expenses were approximately $1.1 million, $816,000 and $1.0 million for the years ended December 31, 2010, 2011 and 2012, respectively, of which approximately $531,000 $641,000 and $670,000 in the years ended December 31, 2010, 2011 and 2012, respectively, were in respect of a Contribution Plan. Gain on amounts funded in respect of employee rights upon retirement totaled approximately $26,000, $14,000 and $36,000 for the years ended December 31, 2010, 2011 and 2012, respectively.</p> <p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif"> The Company expects to contribute approximately $963,000 in the year ending December 31, 2013 to insurance companies in connection with its severance liabilities for its operations for that year, approximately $773,000 of which will be contributed to one or more Contribution Plans.</p> <p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif"> <strong> </strong></p> <p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif"> During the five-year period following December 31, 2012, the Company expects to pay future benefits to 4 employees upon the employee's normal retirement age. The Company anticipates that the benefits payable will be immaterial.</p> <p style="MARGIN: 0pt 0px 0pt 0.5in; FONT: 10pt Times New Roman, Times, Serif"> </p> <!--EndFragment--></div> </div>
251000
235000
60000000
5000000
25400000
20600000
2000
1230000
277000
501000
19000
39000
1200000
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-INDENT: 0in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <strong>NOTE 3 - PROPERTY AND EQUIPMENT</strong></p> <p style="MARGIN: 0pt 0px; FONT: bold 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.5in">a.</td> <td style="FONT-WEIGHT: normal">Composition of property and equipment grouped by major classifications is as follows:</td> </tr> </table> <p style="MARGIN: 0pt 0px; FONT: bold 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 70%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 1in" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6">December 31,</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt" nowrap="nowrap"> (<em>U.S. dollars in thousands)</em></td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">2011</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">2012</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; WIDTH: 70%">Laboratory equipment</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 12%">13,079</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 12%">14,502</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">Furniture and computer equipment</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,522</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,818</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">Leasehold improvements</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">13,705</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">14,447</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">Equipment under construction</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 1,113</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 329</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="PADDING-BOTTOM: 1pt; PADDING-LEFT: 7.35pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">$</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 29,419</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">$</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 31,096</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td> </td> <td style="FONT-SIZE: 1pt"> </td> <td style="TEXT-ALIGN: left; FONT-SIZE: 1pt"> </td> <td style="TEXT-ALIGN: right; FONT-SIZE: 1pt"> </td> <td style="TEXT-ALIGN: left; FONT-SIZE: 1pt"> </td> <td style="FONT-SIZE: 1pt"> </td> <td style="TEXT-ALIGN: left; FONT-SIZE: 1pt"> </td> <td style="TEXT-ALIGN: right; FONT-SIZE: 1pt"> </td> <td style="TEXT-ALIGN: left; FONT-SIZE: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; PADDING-LEFT: 9pt"> Less - accumulated depreciation and amortization</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (11,148</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">)</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (14,786</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">)</td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 18,271</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 16,310</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <p style="TEXT-INDENT: 0in; MARGIN: 0pt 0px 0pt 4.3pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">b.</td> <td style="FONT-WEIGHT: normal">Depreciation and amortization in respect of property and equipment totaled approximately $3.1 million, $3.6 million and $3.7 million for the years ended December 31, 2010, 2011 and 2012, respectively, out of which the Company recorded a total write down of approximately $43,000, $10,000 and $0, respectively.</td> </tr> </table> <p style="MARGIN: 0pt 0px; FONT: bold 10pt Times New Roman, Times, Serif"> </p> <!--EndFragment--></div> </div>
14502000
13079000
1818000
1522000
14447000
13705000
329000
1113000
31096000
29419000
16310000
18271000
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in"> </td> <td>Property and equipment</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 1in; TEXT-INDENT: -0.25in"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.75in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">1.</td> <td><font style="FONT-WEIGHT: normal">Property and equipment are stated at cost, net of accumulated depreciation and amortization.</font> </td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 1in; TEXT-INDENT: -0.25in"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.75in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">2.</td> <td style="FONT-WEIGHT: normal">The Company's assets are depreciated by the straight-line method on the basis of their estimated useful lives as follows:</td> </tr> </table> <p style="MARGIN: 0pt 0px; FONT: bold 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 65%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 1.5in" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Years</td> <td style="PADDING-BOTTOM: 1pt" nowrap="nowrap"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; WIDTH: 85%">Laboratory equipment</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: right; WIDTH: 12%">5</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td>Furniture</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">10-15</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">Computer equipment</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">3</td> <td style="TEXT-ALIGN: left"> </td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 98.65pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> Leasehold improvements are amortized by the straight-line method over the expected lease term, which is shorter than the estimated useful life of the improvements.</p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="WIDTH: 70%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 1in" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6">December 31,</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt" nowrap="nowrap"> (<em>U.S. dollars in thousands)</em></td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">2011</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">2012</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; WIDTH: 70%">Laboratory equipment</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 12%">13,079</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 12%">14,502</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">Furniture and computer equipment</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,522</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,818</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">Leasehold improvements</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">13,705</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">14,447</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">Equipment under construction</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 1,113</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 329</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="PADDING-BOTTOM: 1pt; PADDING-LEFT: 7.35pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">$</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 29,419</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">$</td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 31,096</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td> </td> <td style="FONT-SIZE: 1pt"> </td> <td style="TEXT-ALIGN: left; FONT-SIZE: 1pt"> </td> <td style="TEXT-ALIGN: right; FONT-SIZE: 1pt"> </td> <td style="TEXT-ALIGN: left; FONT-SIZE: 1pt"> </td> <td style="FONT-SIZE: 1pt"> </td> <td style="TEXT-ALIGN: left; FONT-SIZE: 1pt"> </td> <td style="TEXT-ALIGN: right; FONT-SIZE: 1pt"> </td> <td style="TEXT-ALIGN: left; FONT-SIZE: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; PADDING-LEFT: 9pt"> Less - accumulated depreciation and amortization</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (11,148</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">)</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (14,786</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">)</td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 18,271</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 16,310</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <p style="TEXT-INDENT: 0in; MARGIN: 0pt 0px 0pt 4.3pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <!--EndFragment--></div> </div>
P5Y
P3Y
P10Y
P15Y
6000
375000
215000
215000
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-INDENT: 0in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <strong>NOTE 10 - RELATED PARTY TRANSACTIONS</strong></p> <p style="MARGIN: 0pt 0px; FONT: bold 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 70%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 0.5in" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="COLOR: blue; FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="10">Year ended December 31,</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="PADDING-BOTTOM: 2.5pt; FONT-STYLE: italic"> (U.S. dollars in thousands)</td> <td style="PADDING-BOTTOM: 2.5pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2010</td> <td style="PADDING-BOTTOM: 2.5pt; FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 2.5pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2011</td> <td style="PADDING-BOTTOM: 2.5pt; FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 2.5pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2012</td> <td style="PADDING-BOTTOM: 2.5pt; FONT-WEIGHT: bold"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; TEXT-INDENT: -0.25in; PADDING-LEFT: 0.5in; WIDTH: 61%"> <strong>a.</strong> Management and consulting fees to the Chairman of the Board</td> <td style="PADDING-BOTTOM: 2.5pt; WIDTH: 1%"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; WIDTH: 1%"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; WIDTH: 10%"> 6</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; WIDTH: 1%"> </td> <td style="PADDING-BOTTOM: 2.5pt; WIDTH: 1%"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; WIDTH: 10%"> -</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; WIDTH: 1%"> </td> <td style="PADDING-BOTTOM: 2.5pt; WIDTH: 1%"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; WIDTH: 10%"> -</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; TEXT-INDENT: -0.25in; PADDING-LEFT: 0.5in"> <strong>b.</strong> Compensation to the non-executive directors (except the Chairman of the Board in 2010, and includes the interim Chairman of the Board in 2011 and 2012)</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 215</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 215</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 375</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <!--EndFragment--></div> </div>
36665000
37818000
37691000
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td>Research and development costs</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> Research and development costs are expensed as incurred and consist primarily of personnel, subcontractors and consultants (mainly in connection with clinical trials), facilities, equipment and supplies for research and development activities. Grants received by the Israeli Subsidiary from the Office of the Chief Scientist of Israel's Ministry of Industry, Trade and Labor (the "OCS") are recognized when the grant becomes receivable, provided there is reasonable assurance that the Company or the Subsidiary will comply with the conditions attached to the grant and there is reasonable assurance the grant will be received. The grant is deducted from the research and development expenses as the applicable costs are incurred.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> Reimbursements received from Pfizer are recognized when the reimbursements become receivable, provided there is reasonable assurance that the Company will comply with the conditions attached to the reimbursements and there is reasonable assurance the reimbursements will be received. The reimbursements are deducted from the research and development expenses as the applicable costs are incurred.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> In connection with purchases of assets, amounts assigned to intangible assets to be used in a particular research and development project that have no alternative future use are charged to research and development costs at the purchase date.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> Nonrefundable advance payments for goods or services that will be used or rendered for future research and development activities are deferred and amortized over the period that the goods are consumed or the related services are performed.</p> <!--EndFragment--></div> </div>
-183595000
-171977000
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">j.</td> <td>Revenue Recognition</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> The Company recognizes revenue when the earnings process is complete, which is when revenue is realized or realizable and earned, there is persuasive evidence a revenue arrangement exists, delivery of goods or services has occurred, the sales price is fixed or determinable and collectability is reasonably assured.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.75in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">1.</td> <td style="FONT-WEIGHT: normal">Revenues from the license and supply agreement with Pfizer</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> The Company recognizes revenue from milestone payments received pursuant to the Pfizer Agreement in accordance with guidance regarding revenue recognition and accounting for revenue arrangements with multiple deliverables. As the arrangement with Pfizer requires the Company's continued involvement with respect to the proposed commercialization of taliglucerase alfa, the non-refundable, up-front license payment the Company received from Pfizer was deferred and recognized over the related performance period. The Company estimated the performance period of 14 years (commencing upon the date of the Company's receipt of the up-front license payment payable by Pfizer under the Pfizer Agreement) based on the date the last relevant patent expires. See Note 2. The Company adjusts the performance periods, if appropriate, based on the applicable facts and circumstances. Each milestone payment that is considered to be substantive for purposes of revenue recognition is recorded as revenue during the period during which the milestone is achieved.</p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.75in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">2.</td> <td style="FONT-WEIGHT: normal">Revenues from selling products to Pfizer</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> The Company recognizes revenues from products sold to Pfizer upon delivery, when the sales price is fixed or determinable and collectability is reasonably assured.</p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.75in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">3.</td> <td style="FONT-WEIGHT: normal">Company's share in the collaboration agreement</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 1in; TEXT-INDENT: 0in"> </p> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 1in; TEXT-INDENT: 0in"> Under the terms and conditions of the Pfizer Agreement, the Company is entitled to 40% of the profits or loss from sales of taliglucerase alfa, and related expenses incurred, except with respect to sales in Israel, where the Company retained exclusive marketing rights. Since Pfizer bears most of the risks and rewards relating to the agreement, the Company's share in the profits and loss in the agreement is recognized on a net basis. The Company recognizes its share of net profit or loss from the Pfizer Agreement based on reports it receives from Pfizer summarizing the results of the collaborative activities under the agreement for the applicable period. Under the terms of the Pfizer Agreement, for its subsidiaries operating outside the United States, financial information is included based on the fiscal year ending November 30, while financial information for the U.S. entity is included based on the fiscal year ending December 31.</p> <p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <!--EndFragment--></div> </div>
34870000
8386000
6642000
4563000
4563000
4563000
25000000
5307000
3823000
2079000
1500000
158000
769000
674000
19000
115000
1000000
100000
5.25
5.5
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="WIDTH: 70%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 1in" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6">December 31,</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="PADDING-BOTTOM: 1pt; FONT-STYLE: italic">(U.S. dollars in thousands)</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2011</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2012</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td>In respect of:</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 9pt; WIDTH: 74%"> Research and development expenses</td> <td style="WIDTH: 1%; COLOR: black"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%; COLOR: black">4,119</td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> </td> <td style="WIDTH: 1%; COLOR: black"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> </td> <td style="TEXT-ALIGN: right; WIDTH: 10%; COLOR: black">6,003</td> <td style="TEXT-ALIGN: left; WIDTH: 1%; COLOR: black"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 9pt">Property and equipment</td> <td style="COLOR: black"> </td> <td style="TEXT-ALIGN: left; COLOR: black"> </td> <td style="TEXT-ALIGN: right; COLOR: black">(149</td> <td style="TEXT-ALIGN: left; COLOR: black">)</td> <td style="COLOR: black"> </td> <td style="TEXT-ALIGN: left; COLOR: black"> </td> <td style="TEXT-ALIGN: right; COLOR: black">(647</td> <td style="TEXT-ALIGN: left; COLOR: black">)</td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 9pt">Provision for vacation</td> <td style="COLOR: black"> </td> <td style="TEXT-ALIGN: left; COLOR: black"> </td> <td style="TEXT-ALIGN: right; COLOR: black">305</td> <td style="TEXT-ALIGN: left; COLOR: black"> </td> <td style="COLOR: black"> </td> <td style="TEXT-ALIGN: left; COLOR: black"> </td> <td style="TEXT-ALIGN: right; COLOR: black">363</td> <td style="TEXT-ALIGN: left; COLOR: black"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 9pt">Severance pay obligation</td> <td style="COLOR: black"> </td> <td style="TEXT-ALIGN: left; COLOR: black"> </td> <td style="TEXT-ALIGN: right; COLOR: black">164</td> <td style="TEXT-ALIGN: left; COLOR: black"> </td> <td style="COLOR: black"> </td> <td style="TEXT-ALIGN: left; COLOR: black"> </td> <td style="TEXT-ALIGN: right; COLOR: black">192</td> <td style="TEXT-ALIGN: left; COLOR: black"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 9pt">Deferred revenues</td> <td style="COLOR: black"> </td> <td style="TEXT-ALIGN: left; COLOR: black"> </td> <td style="TEXT-ALIGN: right; COLOR: black">4,746</td> <td style="TEXT-ALIGN: left; COLOR: black"> </td> <td style="COLOR: black"> </td> <td style="TEXT-ALIGN: left; COLOR: black"> </td> <td style="TEXT-ALIGN: right; COLOR: black">10,449</td> <td style="TEXT-ALIGN: left; COLOR: black"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 9pt">Net operating loss carry forwards</td> <td style="COLOR: black"> </td> <td style="TEXT-ALIGN: left; COLOR: black"> </td> <td style="TEXT-ALIGN: right; COLOR: black">4,579</td> <td style="TEXT-ALIGN: left; COLOR: black"> </td> <td style="COLOR: black"> </td> <td style="TEXT-ALIGN: left; COLOR: black"> </td> <td style="TEXT-ALIGN: right; COLOR: black">15,176</td> <td style="TEXT-ALIGN: left; COLOR: black"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">Valuation allowance</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (13,764</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">)</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> (31,536</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">)</td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> -</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> -</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="WIDTH: 70%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 0.75in" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: center"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="10">Year ended December 31,</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="PADDING-BOTTOM: 1pt; FONT-STYLE: italic">(U.S. dollars in thousands)</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2010</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2011</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2012</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; TEXT-INDENT: -12.6pt; PADDING-LEFT: 12.6pt"> Cost of revenues</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">220</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; TEXT-INDENT: -12.6pt; PADDING-LEFT: 12.6pt; WIDTH: 61%"> Research and development expenses</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">630</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">422</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: right; WIDTH: 10%">4,756</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; TEXT-INDENT: -12.6pt; PADDING-LEFT: 12.6pt"> General and administrative expenses</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 652</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 464</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 2,775</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="PADDING-BOTTOM: 2.5pt; FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 1,282</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 886</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 7,751</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="WIDTH: 70%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 1in" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6" nowrap="nowrap">December 31,</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt" nowrap="nowrap"> (<em>U.S. dollars in thousands)</em></td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">2011</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">2012</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; WIDTH: 70%">Raw materials</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 12%">279</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 12%">2,118</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">Work in progress</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">192</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">Finished goods</td> <td style="PADDING-BOTTOM: 1pt; FONT-SIZE: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; FONT-SIZE: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right; FONT-SIZE: 1pt"> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; FONT-SIZE: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 1,729</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt">Total inventory</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 279</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 4,039</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="WIDTH: 70%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 0.5in" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="COLOR: blue; FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="10">Year ended December 31,</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="PADDING-BOTTOM: 2.5pt; FONT-STYLE: italic">(U.S. dollars in thousands)</td> <td style="PADDING-BOTTOM: 2.5pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2010</td> <td style="PADDING-BOTTOM: 2.5pt; FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 2.5pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2011</td> <td style="PADDING-BOTTOM: 2.5pt; FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 2.5pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2012</td> <td style="PADDING-BOTTOM: 2.5pt; FONT-WEIGHT: bold"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; TEXT-INDENT: -0.25in; PADDING-LEFT: 0.5in; WIDTH: 61%"> <strong>a.</strong> Management and consulting fees to the Chairman of the Board</td> <td style="PADDING-BOTTOM: 2.5pt; WIDTH: 1%"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; WIDTH: 1%"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; WIDTH: 10%"> 6</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; WIDTH: 1%"> </td> <td style="PADDING-BOTTOM: 2.5pt; WIDTH: 1%"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; WIDTH: 10%"> -</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; WIDTH: 1%"> </td> <td style="PADDING-BOTTOM: 2.5pt; WIDTH: 1%"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; WIDTH: 10%"> -</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; TEXT-INDENT: -0.25in; PADDING-LEFT: 0.5in"> <strong>b.</strong> Compensation to the non-executive directors (except the Chairman of the Board in 2010, and includes the interim Chairman of the Board in 2011 and 2012)</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 215</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 215</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 375</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <p style="TEXT-INDENT: 0in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="WIDTH: 50%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="5">Year ended December 31, 2012</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: center" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Number of<br /> Restricted Shares</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: center">Outstanding at beginning of year</td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2"> </td> <td> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: center">Changes during the year:</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: center; WIDTH: 90%">Granted</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: right; WIDTH: 7%">1,500,000</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: center; PADDING-BOTTOM: 1pt; PADDING-LEFT: 15.95pt"> Forfeited</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 3,208</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: center; PADDING-BOTTOM: 2.5pt">Outstanding at end of year</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 1,496,792</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: center; PADDING-BOTTOM: 2.5pt">Exercisable at end of year</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 102,084</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <p style="TEXT-ALIGN: left; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="WIDTH: 70%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 0.75in" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="18" nowrap="nowrap">December 31, 2012</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="10" nowrap="nowrap">Options and restricted stock<br /> outstanding</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6" nowrap="nowrap">Options exercisable and<br /> restricted stock vested</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Exercise<br /> prices</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Number of<br /> Options and<br /> restricted stock<br /> outstanding<br /> at end of<br /> year</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Weighted<br /> average<br /> remaining<br /> contractual<br /> life</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Number of<br /> options<br /> exercisable and<br /> restricted stock<br /> vested at end of<br /> year</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Weighted<br /> average<br /> remaining<br /> contractual<br /> life</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right; WIDTH: 18%">n/a (Restricted Stock)</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: right; WIDTH: 17%">1,496,792</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: right; WIDTH: 17%"> <p style="TEXT-ALIGN: right; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> n/a</p> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: right; WIDTH: 17%">102,084</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: right; WIDTH: 17%"> <p style="TEXT-ALIGN: right; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> n/a</p> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">0.001</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">719,207</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">2.54</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">719,207</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">2.54</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">0.120</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">447,850</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1.05</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">447,850</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1.05</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">0.399</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">23,087</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1.92</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">23,087</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1.92</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">0.972</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">996,353</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">3.44</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">996,353</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">3.44</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">2.350</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">40,000</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">5.82</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">40,000</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">5.82</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">2.650</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">402,882</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">6.15</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">396,744</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">6.15</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">3.020</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">50,000</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">5.10</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">50,000</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">5.10</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">5.000</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,708,000</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">5.10</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,708,000</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">5.10</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">6.810</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">160,000</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">7.10</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">110,000</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">7.10</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">6.900</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,003,083</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">7.15</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">168,083</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">7.15</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">7.550</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">160,000</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">7.66</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">90,000</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">7.66</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">9.660</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">68,000</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">7.83</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">34,000</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">7.83</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">$</td> <td style="TEXT-ALIGN: right; PADDING-BOTTOM: 1pt">16.700</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 387,542</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 3.99</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 387,542</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 3.99</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="TEXT-ALIGN: right; PADDING-BOTTOM: 2.5pt"> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 7,662,796</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="TEXT-ALIGN: right; PADDING-BOTTOM: 2.5pt"> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 5,272,950</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="TEXT-ALIGN: right; PADDING-BOTTOM: 2.5pt"> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td> </td> </tr> </table> <p style="MARGIN: 0pt 0px; FONT: bold 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="22" nowrap="nowrap">Year ended December 31,</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6" nowrap="nowrap">2010</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6" nowrap="nowrap">2011</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6" nowrap="nowrap">2012</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" colspan="2" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" colspan="2" nowrap="nowrap"> Weighted</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Weighted</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" colspan="2" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Weighted</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Number</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">average</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Number</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">average</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Number</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">average</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">of</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">exercise</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">of</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">exercise</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">of</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">exercise</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">options</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">price</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">options</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">price</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">options</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">price</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; TEXT-INDENT: -0.1in; PADDING-LEFT: 0.1in; WIDTH: 40%"> Outstanding at beginning of year</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: right; WIDTH: 7%">5,366,729</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 7%">2.476</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: right; WIDTH: 7%">6,367,979</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 7%">3.576</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: right; WIDTH: 7%">6,141,030</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 7%">3.563</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">Changes during the year:</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="PADDING-LEFT: 0.25in">Granted</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,444,000</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">7.076</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 0.25in">Forfeited and Expired</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">13,441</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">3.551</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">44,856</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">6.207</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">25,858</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">4.372</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="PADDING-BOTTOM: 1pt; PADDING-LEFT: 0.25in">Exercised (*)</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 429,309</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 1.602</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 182,093</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 1.652</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 861,593</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 1.346</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt">Outstanding at end of year</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 6,367,979</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 3.576</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 6,141,030</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 3.563</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 5,253,579</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 3.923</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt">Exercisable at end of year</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 4,267,850</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 2.183</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 4,647,834</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 2.581</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 4,258,441</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 3.201</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <p style="TEXT-INDENT: -0.2in; MARGIN: 0pt 0px 0pt 84.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="22">Year ended December 31,</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6">2010</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6">2011</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6">2012</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-WEIGHT: bold"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2"> Weighted</td> <td style="FONT-WEIGHT: bold"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2"> Weighted</td> <td style="FONT-WEIGHT: bold"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2"> Weighted</td> <td style="FONT-WEIGHT: bold"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2"> Number</td> <td style="FONT-WEIGHT: bold"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2"> average</td> <td style="FONT-WEIGHT: bold"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2"> Number</td> <td style="FONT-WEIGHT: bold"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2"> average</td> <td style="FONT-WEIGHT: bold"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2"> Number</td> <td style="FONT-WEIGHT: bold"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2"> average</td> <td style="FONT-WEIGHT: bold"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2"> of</td> <td style="FONT-WEIGHT: bold"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2"> exercise</td> <td style="FONT-WEIGHT: bold"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2"> of</td> <td style="FONT-WEIGHT: bold"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2"> exercise</td> <td style="FONT-WEIGHT: bold"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2"> of</td> <td style="FONT-WEIGHT: bold"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2"> exercise</td> <td style="FONT-WEIGHT: bold"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">options</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">price</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">options</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">price</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">options</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">price</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; TEXT-INDENT: -0.1in; PADDING-LEFT: 0.1in; WIDTH: 40%"> Outstanding at beginning of year</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: right; WIDTH: 7%">1,438,692</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 7%">4.697</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: right; WIDTH: 7%">1,438,692</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 7%">4.697</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: right; WIDTH: 7%">1,238,692</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 7%">5.385</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; TEXT-INDENT: -0.1in; PADDING-LEFT: 0.1in"> Changes during the year- Exercised (*)</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">200,000</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">0.001</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">326,267</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">0.12</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; TEXT-INDENT: -0.1in; PADDING-LEFT: 0.1in"> Outstanding at end of year</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 1,438,692</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 4.697</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 1,238,692</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 5.385</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 912,425</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 7.259</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; TEXT-INDENT: -0.1in; PADDING-LEFT: 0.1in"> Exercisable at end of year</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 1,421,734</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 4.653</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 1,235,567</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 5.385</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 912,425</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 7.259</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <p style="MARGIN: 0pt 0px; FONT: bold 10pt Times New Roman, Times, Serif"> </p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="WIDTH: 50%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 1.25in" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="PADDING-LEFT: 0px"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2010</td> <td style="PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; PADDING-LEFT: 0px; WIDTH: 87%"> Dividend yield</td> <td style="PADDING-BOTTOM: 2.5pt; WIDTH: 1%"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; WIDTH: 10%"> 0</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; WIDTH: 1%"> %</td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; PADDING-LEFT: 0px"> Expected volatility</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 75</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt">%</td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; PADDING-LEFT: 0px"> Risk-free interest rate</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 3.23</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt">%</td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; PADDING-LEFT: 0px"> Expected life - in years</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 8.8</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> </p> <!--EndFragment--></div> </div>
298000
1000000
816000
1100000
7751000
886000
1282000
P3Y
P4Y
P3Y
P4Y
P4Y
P4Y
P4Y
P4Y
3208
3208
1500000
1496792
0
P8Y9M18D
0.75
0.0323
9741655
11341655
1016000
160000
160000
68000
40000
1500000
176986
12400000
19700000
912425
1235567
1421734
4258441
4647834
4267850
7.259
5.385
4.653
3.201
2.581
2.183
2300000
1900000
0
4800000
1300000
3100000
25858
44856
13441
4.372
6.207
3.551
1444000
1016000
428000
400000
1100000
2944000
1100000
912425
1238692
1438692
1438692
5253579
6141030
6367979
5366729
7.259
5.385
4.697
4.697
3.923
3.563
3.576
2.476
0.12
0.001
1.346
1.652
1.602
7.076
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.25in"> </td> <td>Share-based compensation</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> The Company accounts for employee's share-based payment awards classified as equity awards using the grant-date fair value method. The fair value of share-based payment transactions is recognized as an expense over the requisite service period, net of estimated forfeitures. The Company estimates forfeitures based on historical experience and anticipated future conditions.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> The Company elected to recognize compensation cost for an award with only service conditions that has a graded vesting schedule using the accelerated method based on the multiple-option award approach.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> When stock options are granted as consideration for services provided by consultants and other non-employees, the grant is accounted for based on the fair value of the stock options issued. Options granted is measured on a final basis at the end of the related service period and is recognized over the related service period using the straight-line method.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <!--EndFragment--></div> </div>
P2Y6M15D
P1Y18D
P1Y11M1D
P3Y5M9D
P5Y9M26D
P6Y1M24D
P5Y1M6D
P5Y1M6D
P7Y1M6D
P7Y1M24D
P7Y7M28D
P7Y9M29D
P3Y11M27D
P0Y
6.32
6.32
5272950
102084
719207
447850
23087
996353
40000
396744
50000
1708000
110000
168083
90000
34000
387542
719207
447850
23087
996353
40000
402882
50000
1708000
160000
1003083
160000
68000
387542
7662796
1496792
P2Y6M15D
P1Y18D
P1Y11M1D
P3Y5M9D
P5Y9M26D
P6Y1M24D
P5Y1M6D
P5Y1M6D
P7Y1M6D
P7Y1M24D
P7Y7M28D
P7Y9M29D
P3Y11M27D
P0Y
0.001
0.12
0.399
0.972
2.35
2.65
3.02
5.0
6.81
6.9
7.55
9.66
16.7
6.9
9.66
6.9
6.81
7.55
9.66
93489809
85630157
81248472
80841237
-3357000
-26077000
-11323000
15883000
93000
86000
81000
81000
180145000
145814000
124044000
122252000
-183595000
-171977000
-135448000
-106450000
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-INDENT: 0in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <strong>NOTE 7 - SHARE CAPITAL</strong></p> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 1in; TEXT-INDENT: -0.5in"> </p> <table style="MARGIN-TOP: 0pt; WIDTH: 100%; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">a.</td> <td>Rights of the Company's Common Stock</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> The Company's common stock is listed on the NYSE MKT and, since September 6, 2010, on the Tel Aviv Stock Exchange. Each share of Common Stock is entitled to one vote. The holders of shares of Common Stock are also entitled to receive dividends whenever funds are legally available, when and if declared by the Board of Directors. Since its inception, the Company has not declared any dividends.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 1in; TEXT-INDENT: -0.5in"> </p> <table style="MARGIN-TOP: 0pt; WIDTH: 100%; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">b.</td> <td>Stock based compensation</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> On December 14, 2006, the Board of Directors adopted the Protalix BioTherapeutics, Inc. 2006 Stock Incentive Plan (the "Plan"). The Plan was amended on June 17, 2012 to increase the number of shares of common stock available under the plan from 9,741,655 shares to 11,341,655 shares. The grant of options to Israeli employees under the Plan is subject to the terms stipulated by Sections 102 and 102A of the Israeli Income Tax Ordinance. Each option grant is subject to the track chosen by the Company, either Section 102 or Section 102A of the Israeli Income Tax Ordinance, and pursuant to the terms thereof, the Company is not allowed to claim, as an expense for tax purposes, the amounts credited to employees as a benefit, including amounts recorded as salary benefits in the Company's accounts, in respect of options granted to employees under the Plan, with the exception of the work-income benefit component, if any, determined on the grant date. For Israeli non-employees, the share option plan is subject to Section 3(i) of the Israeli Income Tax Ordinance.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> As of December 31, 2012, 176,986 shares of Common Stock remain available for grant under the Plan.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> For purposes of determining the fair value of the options and restricted stock granted to employees and non-employees, the Company's management uses the fair value of the Common Stock.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> From January 1, 2010 through December 31, 2012, the Company granted options and shares of restricted stock to certain employees and non-employees as follows:</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.75in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">1.</td> <td>Options and restricted stock granted to employees:</td> </tr> </table> <p style="TEXT-INDENT: -0.25in; MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 1in"> </td> <td style="WIDTH: 0.25in">a)</td> <td>Below is a table summarizing all of the options and restricted stock grants to employees for each of the three years in the three-year period ended December 31, 2012:</td> </tr> </table> <p style="MARGIN: 0pt 0px; FONT: bold 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 80%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 1.25in" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Year of<br /> grant</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">No. of options<br /> or restricted<br /> stock granted</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Exercise<br /> price range</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" nowrap="nowrap">Vesting period</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Fair value<br /> at grant<br /> (U.S.<br /> dollars in<br /> thousands)</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Expiration<br /> period</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 10%">2010</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: right; WIDTH: 10%">1,016,000</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: center; WIDTH: 10%">$6.90</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: center; WIDTH: 35%">3 years commencing<br /> upon achievement of a<br /> certain milestone</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">5,673</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right; WIDTH: 10%">10 years</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: left">2010</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">428,000</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: center">$6.32-$9.66</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: center">4 years</td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">2,147</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">10 years</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: left">2012</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">400,000</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: center">n/a</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: center">3 years</td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">2,288</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right">n/a</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">2012</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 1,100,000</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt; TEXT-ALIGN: center"> n/a</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="TEXT-ALIGN: center; PADDING-BOTTOM: 1pt">4 years</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">$</td> <td style="TEXT-ALIGN: right; PADDING-BOTTOM: 1pt">6,292</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt; TEXT-ALIGN: right"> n/a</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">2,944,000</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: center"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> Set forth below are grants made by the Company to employees (including related parties) during the three-year period ended December 31, 2012 (such grants appear in the table above):</p> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 1.5in; TEXT-INDENT: -0.25in"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 1.25in"> </td> <td style="COLOR: black; FONT-WEIGHT: normal; WIDTH: 0.25in"> 1.</td> <td style="FONT-WEIGHT: normal">In February 2010, the Company's Board of Directors approved the grant of options to purchase 1,016,000 shares of Common Stock, in the aggregate, to the Company's Chief Executive Officer and certain officers and employees of the Company with an exercise price equal to $6.90 per share. The options vest quarterly over a three-year period commencing upon the FDA's approval of taliglucerase alfa. The Company treated the awards as performance-based awards and, given that the performance condition is outside the Company's control, concluded that the performance condition was not probable until the performance condition actually occurred. <font style="COLOR: black">Upon the FDA's</font> approval of taliglucerase alfa on May 1, 2012<font style="COLOR: black">, the Company started recognizing share based compensation expenses</font> related to such options. Share based compensation related to services performed from the date of grant of the respective options through the FDA approval date, <font style="COLOR: black">were recognized on that date.</font></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 1.5in; TEXT-INDENT: -0.25in"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 1.25in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">2.</td> <td style="COLOR: black; FONT-WEIGHT: normal">In February 2010, the Company's Board of Directors approved the grant of options to purchase 160,000 shares of Common Stock with an exercise price equal to $6.81 per share to a new executive officer of the Company. The options expire on the tenth anniversary of the date of grant, unless terminated earlier. The first 25% of the options vest on the first anniversary of the date of grant and the remaining 75% vest in 12 equal tranches on a quarterly basis for three years thereafter.</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 1.5in; TEXT-INDENT: -0.25in"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 1.25in"> </td> <td style="COLOR: black; FONT-WEIGHT: normal; WIDTH: 0.25in"> 3.</td> <td><font style="FONT-WEIGHT: normal">In September 2010, the Company's Board of Directors approved the grant of options to purchase 160,000 shares of Common Stock to a new executive officer of the Company with an exercise price equal to $7.55 per share and options to purchase 40,000 shares of Common Stock to a new employee of the Company with an exercise price equal to $6.32 per share. The options vest over a four-year period, with the first 25% vesting on the first anniversary of the applicable date of the grant and the remaining 75% vesting in equal tranches on a quarterly basis for a three-year period thereafter. <font style="COLOR: black">The options expire on the tenth anniversary of the date of grant, unless terminated earlier.</font></font> </td> </tr> </table> <p style="MARGIN: 0pt 0px; FONT: bold 10pt Times New Roman, Times, Serif"> </p> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 1.5in; TEXT-INDENT: -0.25in"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 1.25in"> </td> <td style="COLOR: black; FONT-WEIGHT: normal; WIDTH: 0.25in"> 4.</td> <td style="FONT-WEIGHT: normal">In November 2010, the Company's Board of Directors approved the grant of options to purchase 68,000 shares of Common Stock to a new officer of the Company with an exercise price equal to $9.66 per share. The options vest over a four-year period, with the first 25% vesting on the first anniversary of the applicable date of the grant and the remaining 75% vesting in equal tranches on a quarterly basis for a three-year period thereafter. <font style="COLOR: black">The options expire on the tenth anniversary of the date of grant, unless terminated earlier.</font></td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 1.5in; TEXT-INDENT: -0.25in"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 1.25in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">5.</td> <td style="FONT-WEIGHT: normal">In September 2010, the Company's Board of Directors modified the terms of the options previously granted to an executive in 2001, by extending the life of the options until 2016. At the date of modification, all of the options were fully vested. The Company concluded that there was no incremental increase in the value of the awards and therefore no accounting charges need to be recorded in connection with the modifications.</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 1.5in; TEXT-INDENT: -0.25in"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 1.25in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">6.</td> <td style="FONT-WEIGHT: normal">On July 16, 2012, the Company's Board of Directors approved the grant of 1,500,000 shares of restricted Common Stock to its officers and certain other employees. Of such restricted stock, 1,100,000 of the shares were issued to the Company's named executive officers and vest in 16 equal, quarterly increments over a four-year period, commencing upon the date of grant, and are subject to a 24-month lock-up period, commencing upon the applicable vesting dates. Immediately and automatically in the event of a Change in Control, as such term is defined in the Plan, as amended, all of the shares of restricted Common Stock issued to the named executive officers shall vest, and the lock-up periods shall terminate, subject to certain exceptions. The remaining 400,000 shares of restricted Common Stock were issued to other employees of the Company and vest in 12 equal, quarterly increments over a three-year period, commencing upon the date of grant. The Company estimated the fair value of the restricted stock on the date of grant to be approximately $8.6 million.</td> </tr> </table> <p style="TEXT-INDENT: -0.25in; MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; WIDTH: 100%; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 1in"> </td> <td style="WIDTH: 0.25in">b)</td> <td>The fair value of options and restricted stock granted during the years ended December 31, 2010 and 2012 were $7.8 million and $8.6 million respectively. The fair value of each option granted in 2010 is estimated on the date of grant using the Black-Scholes option-pricing model, with the following weighted average assumptions:</td> </tr> </table> <p style="MARGIN: 0pt 0px; FONT: bold 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 50%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 1.25in" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="PADDING-LEFT: 0px"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2">2010</td> <td style="PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; PADDING-LEFT: 0px; WIDTH: 87%"> Dividend yield</td> <td style="PADDING-BOTTOM: 2.5pt; WIDTH: 1%"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right; WIDTH: 10%"> 0</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; WIDTH: 1%"> %</td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; PADDING-LEFT: 0px"> Expected volatility</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 75</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt">%</td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; PADDING-LEFT: 0px"> Risk-free interest rate</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 3.23</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt">%</td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; PADDING-LEFT: 0px"> Expected life - in years</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 8.8</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> The expected volatility is based on the historical volatility of the Common Stock and those of comparable companies. The risk-free interest rate assumption is based on observed interest rates appropriate for the expected term of the stock options granted in dollar terms. The Company's management uses the contractual term or its expectations, based on historical incidence of option exercises, as applicable (during 2010 - using the simplified method), of each option as its expected life. The pre-vesting forfeiture rate of approximately 6.1% is estimated based on pre-vesting forfeiture experience.</p> <p style="MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> The fair value of the restricted stock is based on the Company's share price on the NYSE MKT on the grant date.</p> <p style="MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> The total unrecognized compensation cost of employee stock options and restricted stock at December 31, 2012 is approximately $7.0 million (net of forfeiture rate). The unrecognized compensation cost of employee stock options is expected to be recognized over a weighted average period of 1.1 years.</p> <p style="MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> The total cash received from employees as a result of employee stock option exercises for the years ended December 31, 2010, 2011 and 2012 was approximately $501,000, $277,000 and $1.2 million, respectively. The Company did not realize any tax benefit in connection with these exercises.</p> <p style="MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> During 2012, the Company issued 861,593 shares of Common Stock in connection with the exercise of 861,593 options by certain employees of the Company. The Company received cash proceeds equal to approximately $1.2 million in connection with such exercises.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 1in; TEXT-INDENT: -0.25in"> </p> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.75in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">2.</td> <td>Options granted to consultants, directors, and other service providers:</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 1in; TEXT-INDENT: 0in"> </p> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 1in; TEXT-INDENT: 0in"> As of December 31, 2012, the Company has recognized and recorded all compensation costs related to outstanding options for consultants, directors and other services providers.</p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> No cash was received from consultants as a result of consultant stock option exercises for the years ended December 31, 2010, and 2011 and approximately $39,000 was received during the year ended December 31, 2012. The Company did not realize any tax benefits in connection with these exercises.</p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 1in; FONT: 10pt Times New Roman, Times, Serif"> During 2012, the Company issued 326,267 shares of Common Stock in connection with the exercise of 326,267 options by consultants of the Company. The Company received cash proceeds equal to approximately $39,000 in connection with such exercise.</p> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 1in; TEXT-INDENT: -0.25in"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.75in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.25in">3.</td> <td style="FONT-WEIGHT: normal">A summary of share option plans, and related information, under all of the Company's equity incentive plans for the years ended December 31, 2010, 2011 and 2012 are as follows:</td> </tr> </table> <p style="TEXT-INDENT: -0.25in; MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 1in"> </td> <td style="WIDTH: 0.25in">a.</td> <td>Options granted to employees:</td> </tr> </table> <p style="MARGIN: 0pt 0px; FONT: bold 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="22" nowrap="nowrap">Year ended December 31,</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6" nowrap="nowrap">2010</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6" nowrap="nowrap">2011</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6" nowrap="nowrap">2012</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" colspan="2" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" colspan="2" nowrap="nowrap"> Weighted</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Weighted</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" colspan="2" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Weighted</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Number</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">average</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Number</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">average</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Number</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">average</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">of</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">exercise</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">of</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">exercise</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">of</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">exercise</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">options</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">price</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">options</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">price</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">options</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">price</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; TEXT-INDENT: -0.1in; PADDING-LEFT: 0.1in; WIDTH: 40%"> Outstanding at beginning of year</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: right; WIDTH: 7%">5,366,729</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 7%">2.476</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: right; WIDTH: 7%">6,367,979</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 7%">3.576</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: right; WIDTH: 7%">6,141,030</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 7%">3.563</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">Changes during the year:</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="PADDING-LEFT: 0.25in">Granted</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,444,000</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">7.076</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 0.25in">Forfeited and Expired</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">13,441</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">3.551</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">44,856</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">6.207</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">25,858</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">4.372</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="PADDING-BOTTOM: 1pt; PADDING-LEFT: 0.25in">Exercised (*)</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 429,309</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 1.602</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 182,093</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 1.652</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 861,593</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 1.346</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt">Outstanding at end of year</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 6,367,979</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 3.576</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 6,141,030</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 3.563</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 5,253,579</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 3.923</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt">Exercisable at end of year</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 4,267,850</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 2.183</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 4,647,834</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 2.581</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 4,258,441</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 3.201</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <p style="TEXT-INDENT: -0.2in; MARGIN: 0pt 0px 0pt 84.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 70.55pt"> </td> <td style="WIDTH: 14.4pt">(*)</td> <td>The total intrinsic value of options exercised during the years ended December 31, 2010, 2011 and 2012, was approximately $3.1 million, $1.3 million and $4.8 million, respectively.</td> </tr> </table> <p style="TEXT-INDENT: -0.2in; MARGIN: 0pt 0px 0pt 84.95pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 1in"> </td> <td style="WIDTH: 0.25in">b.</td> <td>Restricted stock granted to employees:</td> </tr> </table> <p style="MARGIN: 0pt 0px; FONT: bold 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 50%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0" align="center"> <tr style="VERTICAL-ALIGN: bottom"> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="5">Year ended December 31, 2012</td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: center" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Number of<br /> Restricted Shares</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: center">Outstanding at beginning of year</td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2"> </td> <td> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: center">Changes during the year:</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: center; WIDTH: 90%">Granted</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: right; WIDTH: 7%">1,500,000</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: center; PADDING-BOTTOM: 1pt; PADDING-LEFT: 15.95pt"> Forfeited</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 3,208</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: center; PADDING-BOTTOM: 2.5pt">Outstanding at end of year</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 1,496,792</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: center; PADDING-BOTTOM: 2.5pt">Exercisable at end of year</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 102,084</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <p style="TEXT-ALIGN: left; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 1in"> </td> <td style="WIDTH: 0.25in">c.</td> <td>Options granted to consultants, directors, and other service providers:</td> </tr> </table> <p style="MARGIN: 0pt 0px; FONT: bold 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="22">Year ended December 31,</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6">2010</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6">2011</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6">2012</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="FONT-WEIGHT: bold"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2"> Weighted</td> <td style="FONT-WEIGHT: bold"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2"> Weighted</td> <td style="FONT-WEIGHT: bold"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2"> Weighted</td> <td style="FONT-WEIGHT: bold"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2"> Number</td> <td style="FONT-WEIGHT: bold"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2"> average</td> <td style="FONT-WEIGHT: bold"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2"> Number</td> <td style="FONT-WEIGHT: bold"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2"> average</td> <td style="FONT-WEIGHT: bold"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2"> Number</td> <td style="FONT-WEIGHT: bold"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2"> average</td> <td style="FONT-WEIGHT: bold"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2"> of</td> <td style="FONT-WEIGHT: bold"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2"> exercise</td> <td style="FONT-WEIGHT: bold"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2"> of</td> <td style="FONT-WEIGHT: bold"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2"> exercise</td> <td style="FONT-WEIGHT: bold"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2"> of</td> <td style="FONT-WEIGHT: bold"> </td> <td style="FONT-WEIGHT: bold"> </td> <td style="TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2"> exercise</td> <td style="FONT-WEIGHT: bold"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">options</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">price</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">options</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">price</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">options</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">price</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; TEXT-INDENT: -0.1in; PADDING-LEFT: 0.1in; WIDTH: 40%"> Outstanding at beginning of year</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: right; WIDTH: 7%">1,438,692</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 7%">4.697</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: right; WIDTH: 7%">1,438,692</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 7%">4.697</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: right; WIDTH: 7%">1,238,692</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 7%">5.385</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; TEXT-INDENT: -0.1in; PADDING-LEFT: 0.1in"> Changes during the year- Exercised (*)</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 200,000</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 0.001</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 326,267</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 0.12</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; TEXT-INDENT: -0.1in; PADDING-LEFT: 0.1in"> Outstanding at end of year</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 1,438,692</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 4.697</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 1,238,692</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 5.385</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 912,425</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 7.259</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt; TEXT-INDENT: -0.1in; PADDING-LEFT: 0.1in"> Exercisable at end of year</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 1,421,734</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 4.653</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 1,235,567</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 5.385</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 912,425</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 7.259</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <p style="MARGIN: 0pt 0px; FONT: bold 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 63.8pt"> </td> <td style="WIDTH: 14pt">(*)</td> <td>The total intrinsic value of options exercised during the years ended December 31, 2010, 2011 and 2012, was approximately $0, $1.9 million and $2.3 million, respectively.</td> </tr> </table> <p style="TEXT-INDENT: -0.25in; MARGIN: 0pt 0px 0pt 1.25in; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 1in"> </td> <td style="WIDTH: 0.25in">d.</td> <td>The following tables summarize information concerning outstanding and exercisable options and restricted stock as of December 31, 2012:</td> </tr> </table> <p style="MARGIN: 0pt 0px; FONT: bold 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 70%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 0.75in" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="18" nowrap="nowrap">December 31, 2012</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="10" nowrap="nowrap">Options and restricted stock<br /> outstanding</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="6" nowrap="nowrap">Options exercisable and<br /> restricted stock vested</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Exercise<br /> prices</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Number of<br /> Options and<br /> restricted stock<br /> outstanding<br /> at end of<br /> year</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Weighted<br /> average<br /> remaining<br /> contractual<br /> life</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Number of<br /> options<br /> exercisable and<br /> restricted stock<br /> vested at end of<br /> year</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2" nowrap="nowrap">Weighted<br /> average<br /> remaining<br /> contractual<br /> life</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold" nowrap="nowrap"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right; WIDTH: 18%">n/a (Restricted Stock)</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: right; WIDTH: 17%">1,496,792</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: right; WIDTH: 17%"> <p style="TEXT-ALIGN: right; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> n/a</p> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: right; WIDTH: 17%">102,084</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: right; WIDTH: 17%"> <p style="TEXT-ALIGN: right; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> n/a</p> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">0.001</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">719,207</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">2.54</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">719,207</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">2.54</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">0.120</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">447,850</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1.05</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">447,850</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1.05</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">0.399</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">23,087</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1.92</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">23,087</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1.92</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">0.972</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">996,353</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">3.44</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">996,353</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">3.44</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">2.350</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">40,000</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">5.82</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">40,000</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">5.82</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">2.650</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">402,882</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">6.15</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">396,744</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">6.15</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">3.020</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">50,000</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">5.10</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">50,000</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">5.10</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">5.000</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,708,000</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">5.10</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,708,000</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">5.10</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">6.810</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">160,000</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">7.10</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">110,000</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">7.10</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">6.900</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">1,003,083</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">7.15</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">168,083</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">7.15</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">7.550</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">160,000</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">7.66</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">90,000</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">7.66</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">9.660</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">68,000</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">7.83</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">34,000</td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">7.83</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt">$</td> <td style="TEXT-ALIGN: right; PADDING-BOTTOM: 1pt">16.700</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 387,542</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 3.99</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 387,542</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 3.99</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="TEXT-ALIGN: right; PADDING-BOTTOM: 2.5pt"> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 7,662,796</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="TEXT-ALIGN: right; PADDING-BOTTOM: 2.5pt"> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 5,272,950</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="TEXT-ALIGN: right; PADDING-BOTTOM: 2.5pt"> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <p style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> The aggregate intrinsic value of the total outstanding and of total vested and exercisable options and restricted stock as of December 31, 2012 is approximately $19.7 million and $12.4 million, respectively.</p> <p style="TEXT-INDENT: -20.15pt; MARGIN: 0pt 0px 0pt 92.15pt; FONT: 10pt Times New Roman, Times, Serif"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 72pt"> </td> <td style="WIDTH: 20.15pt">e.</td> <td>The following table illustrates the effect of share-based compensation on the statement of operations:</td> </tr> </table> <p style="MARGIN: 0pt 0px; FONT: bold 10pt Times New Roman, Times, Serif"> </p> <table style="WIDTH: 70%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; MARGIN-LEFT: 0.75in" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: center"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="10">Year ended December 31,</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="PADDING-BOTTOM: 1pt; FONT-STYLE: italic">(U.S. dollars in thousands)</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2010</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2011</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center; FONT-WEIGHT: bold" colspan="2">2012</td> <td style="PADDING-BOTTOM: 1pt; FONT-WEIGHT: bold"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; TEXT-INDENT: -12.6pt; PADDING-LEFT: 12.6pt"> Cost of revenues</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right"> </td> <td style="TEXT-ALIGN: left"> </td> <td> </td> <td style="TEXT-ALIGN: left">$</td> <td style="TEXT-ALIGN: right">220</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; TEXT-INDENT: -12.6pt; PADDING-LEFT: 12.6pt; WIDTH: 61%"> Research and development expenses</td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">630</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 10%">422</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="WIDTH: 1%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> <td style="TEXT-ALIGN: right; WIDTH: 10%">4,756</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt; TEXT-INDENT: -12.6pt; PADDING-LEFT: 12.6pt"> General and administrative expenses</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 652</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 464</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 2,775</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="PADDING-BOTTOM: 2.5pt; FONT-WEIGHT: bold"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 1,282</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 886</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 7,751</td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> </td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 1in; TEXT-INDENT: -0.5in"> </p> <table style="MARGIN-TOP: 0pt; WIDTH: 100%; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 0.5in"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 0.28in">c.</td> <td>Public Offerings</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 78pt; TEXT-INDENT: -21.3pt"> </p> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 56.7pt"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 21.3pt">1.</td> <td><font style="FONT-WEIGHT: normal">On March 23, 2011, the Company issued and sold 4,000,000 shares of Common Stock in an underwritten public offering at a price to the public of $5.50 per share. The net proceeds to the Company were approximately $20.6 million (net of underwriting commissions and issuance costs of $1.4 million</font>)</td> </tr> </table> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 78pt; TEXT-INDENT: -21.3pt"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 56.7pt"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 21.3pt">2.</td> <td style="FONT-WEIGHT: normal">On February 22, 2012, the Company issued and sold 5,175,000 shares of Common Stock in an underwritten public offering at a price to the public of $5.25 per share. The net proceeds to the Company were approximately $25.4 million (net of underwriting commissions and issuance costs of $1.8 million).</td> </tr> </table> <p style="MARGIN: 0pt 0px; FONT: bold 10pt Times New Roman, Times, Serif"> </p> <!--EndFragment--></div> </div>
5175000
4000000
1187860
381685
407235
8000
326267
200000
861593
182093
429309
5000
4000
25383000
20586000
25388000
20590000
1000
1000
1198000
298000
510000
1199000
299000
510000
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="TEXT-INDENT: 0in; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <strong>NOTE 11 - SUBSEQUENT EVENTS</strong></p> <p style="FONT: 10pt Times New Roman, Times, Serif; FONT-WEIGHT: normal; MARGIN: 0pt 0px 0pt 56.7pt; TEXT-INDENT: -20.7pt"> </p> <table style="MARGIN-TOP: 0pt; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td style="WIDTH: 36pt"> </td> <td style="FONT-WEIGHT: normal; WIDTH: 20.7pt">a.</td> <td style="FONT-WEIGHT: normal">During January and February 2013, the Company issued a total of 8,000 shares of Common Stock in connection with the exercise of options to purchase 8,000 shares of Common Stock by certain employees of the Company. The Company received aggregate cash proceeds equal to approximately $19,000 in connection with the exercise of such options.</td> </tr> </table> <p style="MARGIN: 0pt 0px; FONT: bold 10pt Times New Roman, Times, Serif"> </p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <table style="MARGIN-TOP: 0pt; FONT: bold 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0pt" cellspacing="0" cellpadding="0" width="100%"> <tr style="VERTICAL-ALIGN: top"> <td>Use of estimates in the preparation of financial statements</td> </tr> </table> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates.</p> <p style="MARGIN: 0pt 0px 0pt 0.75in; FONT: 10pt Times New Roman, Times, Serif"> </p> <!--EndFragment--></div> </div>
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