Attached files

file filename
EXCEL - IDEA: XBRL DOCUMENT - ANDAIN, INC.Financial_Report.xls
EX-21 - ANDAIN, INC.exhibit21.htm
EX-31 - ANDAIN, INC.exhibit31.htm
EX-31.2 - ANDAIN, INC.exhibit312.htm

U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2013

 

OR

 

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______________ TO ______________

 

COMMISSION FILE NUMBER: 0-51216

 

ANDAIN, INC.

(Exact Name of Company as Specified in its Charter)

 

Nevada   20-2066406
(State or Other Jurisdiction of Incorporation or Organization)   (I.R.S. Employer Identification No.)

 

400 South Beverly Drive, Suite 312, Beverly Hills, California   90212
(Addres of Principal Executive Offices)   (Zip Code)

 

Company’s Telephone Number:   (310) 286 - 1777
 
(Former Name, Former Address, and Former Fiscal Year, if Changed Since Last Report)

 

Indicate by check mark whether the Company (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Company was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [x] No [ ]

 

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

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

 

Large accelerated filer [ ] Accelerated filer [ ]

Non-accelerated filer [ ] Smaller reporting company [X]

 

Indicate by check mark whether the Company is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes [ ] No [x]

 

As of November 19, 2013, the Company had 85,115,242 shares of common stock issued and outstanding.

   
 

TABLE OF CONTENTS

 

PART I – FINANCIAL INFORMATION PAGE

 

Item 1. financial statements

 

CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2013 (UNAUDITED) AND DECEMBER 31, 2012 4

 

CONSOLIDATED StatementS of operations (UNAUDITED) FOR THE THREE AND NINE months ENDED SEPTEMBER 30, 2013 and September 30, 2012, AND PERIOD OF INCEPTION THROUGH SEPTEMBER 30, 2013 5

 

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE nine MONTHS ENDED SEPTEMBER 30, 2013 AND SEPTEMBER 30, 2012, AND PERIOD OF INCEPTION THROUGH SEPTEMBER 30, 2013 6

 

NOTES TO CONSOLIDATED fINANCIAL STATEMENTS (UNAUDITED) 8

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS of FINANCIAL CONDITION AND RESULTS OF OPERATIONS 16

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 23

 

ITEM 4. CONTROLS AND PROCEDURES 23

 

PART II other information

 

ITEM 1. LEGAL PROCEEDINGS 24

 

ITEM 1A. RISK FACTORS 25

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 25

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES 25

 

item 4. MINE SAFETY DISCLOSURES 25

 

item 5. OTHER INFORMATION 25

 

item 6. EXHIBITS 25

 

SIGNATURE 26

 

PART I – FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS.

 

ANDAIN, INC.

(A Development Stage Company)

CONSOLIDATED BALANCE SHEETS

(U.S. Dollars)

 

   September 30,  December 31,
   2013  2012
   (Unaudited)   
ASSETS          
  Current assets:          
   Related party receivables  $—     $66,467 
   Accounts receivable   —      432,782 
      Total current assets   —      499,249 
Long-term assets:          
   Property, plant and equipment, net   —      24,808 
Total assets  $—     $524,057 
LIABILITIES AND STOCKHOLDERS’ DEFICIT          
Current liabilities:          
   Credit from banks  $—     $3,449 
   Related party accounts payable and accrued expenses   37,358    —   
   Accounts payable and accrued expenses   239,880    697,164 
   Related party accrued compensation   422,150    166,904 
   Related party loans   127,000    127,000 
      Total current liabilities   826,388    994,517 
Total liabilities   826,388    994,517 
Stockholders’ deficit:          
Preferred stock, $0.001 par value, 10,000,000 authorized
shares; no shares issued and outstanding
   —      —   
Common stock, $0.001 par value, 500,000,000 shares
authorized; 85,115,242 shares issued and outstanding at
September 30, 2013 and 56,704,928 at December 31, 2012
   84,840    56,704 
   Stock payable   84,000    —   
   Additional paid-in capital   6,868,618    6,475,002 
   Accumulated deficit during development stage   (7,804,955)   (6,547,265)
   Accumulated other comprehensive income (loss)   (58,891)   (189,483)
      Total Andain, Inc.’s stockholders’ deficit   (826,388)   (205,042)
  Non-controlling interest   —      (265,418)
      Total stockholders’ deficit   (826,388)   (470,460)
Total liabilities and stockholders’ deficit  $—     $524,057 

 

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

 

ANDAIN, INC.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS

(U.S. Dollars)

(Unaudited)

 

   Nine Months Ended
September 30,
  Three Months Ended
September 30,
  Period from July 23, 2004 (Date of Inception) Through
September 30,
   2013  2012  2013  2012  2013
Revenues:                         
Government grants  $—     $—     $—     $—     $682,690 
Consulting income   63,767    88,404    —      12,158    629,399 
Total revenue   63,767    88,404    —      12,158    1,312,089 
Operating expenses:                         
General and administrative   (465,057)   (155,660)   (197,455)   (33,907)   (7,565,504)
Research and development   (476,579)   (452,043)   (13,247)   (107,270)   (867,866)
   Marketing & Sales   (1,050)        (1,050)        (1,050)
Loss on disposal of associate   —      —      —      —      (135,424)
Impairment of goodwill   —      —      —      —      (412,699)
Impairment loss   (378,771)   —      (376,771)   —      (556,500)
Other income, net   —      610,396    —      610,396    251,175 
Total operating income (expenses)   (1,321,457)   2,693    (588,523)   469,219    (9,287,868)
Operating profit (loss)   (1,257,690)   91,079    (588,523)   481,377    (7,975,779)
Financial income, net   —      (3,506)   —      22,379    42,234 
Net loss, including non-controlling interests   (1,257,690)   87,591    (588,523)   503,756    (7,933,545)
Less: Net attributable to non-controlling interest   —      2,809    —      66,841    128,590 
Net loss  $(1,257,690)  $84,782   $(588,523)  $436,915   $(7,804,955)
                          
Loss per share – basic and diluted:                         
Net loss attributable to Andain Inc.  $(0.02)  $(0.00)  $(0.01)  $(0.02)     
Weighted average number of shares outstanding   66,848,178    23,905,304    85,115,242    27,438,650      

 

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

 

ANDAIN, INC.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. Dollars)

(Unaudited)

  Nine Months Ended September 30,  Period from July 23, 2004 (Date of Inception) Through September 30,
   2013  2012  2013
Cash flows from operating activities:               
Net (loss) attributable to Andain Inc.  $(1,257,690)  $84,782   $ (7, 804,955)  
Adjustments to reconcile net (loss) to net cash provided by               
(used in) operating activities:               
     Bad debt expense   63,767    —      63,767 
     Depreciation   —      9,532    50,915 
     Loss from acquisition of subsidiary   —      —      135,424 
     Impairment of goodwill   —      —      337,685 
     Impairment of loan   378,771    —      556,500 
     Minority interest   —      2,809    (128,286)
     Shares issued for professional services   475,686    —      1,652,874 
     Stock based compensation to key management   193,120    143,236    2,055,120 
     Contribution of services from shareholders   36,000    —      548,982 
     Changes in foreign exchange rates   130,592    —      (65,597)
     Impairment of intangible assets   —      —      20,649 
Changes in operating assets and  liabilities:               
     Accounts payable   (470,156)   (672,494)   190,398 
     Accounts receivable   (90,090)   163,181    (522,528)
     Accrued compensation   360,000    270,000    2,712,693 
Net cash provided by (used in) operating activities   (180,000)   1,046    (196,359)
Cash flows from investing activities:               
Purchase of equipment   —      —      (70,548)
Acquisition of patent   —      —      (20,649)
Acquisition of subsidiary   —      (480)   (461,752)
Net cash used in investing activities   —      (480)   (552,949)
Cash flows from financing activities:               
Proceeds from increase in bank overdrafts   —      —      3,448 
Proceeds from stock issued for cash   180,000    —      1,038,978 
Proceeds from other loans   —      —      (59,520)
Loan from majority stockholder   —      —      (15,754)
Loans from key management personnel   —      —      (218,767)
Net cash provided by financing activities   180,000    —      748,385 

 

ANDAIN, INC.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. Dollars)

(Unaudited)

(continued)

 

  Nine Months Ended September 30,  Period from
July 23, 2004
(Date of Inception)
Through September 30,
   2013  2012  2013
Increase (decrease) in cash and cash equivalents   —      566    (923)
Cash and cash equivalents, beginning of period   —      872    —   
Effects of exchange rate changes on balance of cash held in foreign currencies   —      (19)   923 
Cash and cash equivalents, end of period  $—     $1,419   $—   
Non-cash investing and financing activities:               
Issuance of common stock for purchase of intellectual property  $—     $—     $4,500 
Issuance of common stock for purchase of subsidiary  $—     $—     $2,500 
Subsidiaries sold to stockholder:               
Effect of subsidiary sale   (370,526)   —      (370,526)
   $—     $—     $—   
Additional acquisition of control in Meizam Arad Investments Ltd.:               
Non-controlling interest  $(8,528)  $—     $(8,528)

Loss from transactions with shareholder recorded to additional paid in capital

   8,528    —      8,528 
   $—     $—     $—   
Additional information:               
  Cash paid for income taxes  $—     $—     $—   
  Cash paid for interest expense  $—     $—     $—   

 

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

 

ANDAIN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012, AND

PERIOD OF JULY 23, 2004 (DATE OF INCEPTION) THROUGH SEPTEMBER 30, 2013

(U.S. Dollars)

(Unaudited)

 

NOTE 1 – GENERAL INFORMATION

 

Andain Inc. (“Company”) was established in 2004 in the State of Nevada, U.S.A. Since commencing operations in 2006, the Company has been engaged, both independently and through its consolidated entities (collectively, the “Group”), in the development of medical technology, from early stage development to advanced clinical trials, for a wide range of medical needs.

 

On May 14, 2013, the Company’s board of directors (with Sam Shlomo Elimelech, a director, recusing himself) decided to simplify the Company’s corporate structure by transferring all assets and technologies from its subsidiaries to the Company, and sell its subsidiaries with their accumulated losses to Mr. Elimelech, the Company’s president and CEO; the effective date of the transactions is January 1, 2013. Accordingly, the Company sold all its holdings in: Impact Active Team Ltd., TPDS Ltd., Meizam – Advanced Enterprise Center Arad Ltd., and Gaia Med Ltd. to Mr. Elimelech. Simultaneously with the sale of subsidiaries, the Company acquired an additional 7.5% interest in Meizam Arad Investments Ltd., which then became a wholly owned and the only subsidiary of the Company (the effective date of this transaction is also January 1, 2013).

 

On April 29, 2013 the Company entered into a Regulation S Stock Purchase Agreement with 1568934 Ontario Limited. Under this agreement, the purchaser purchased from the Company 21,316,000 restricted shares of common stock for a total consideration of $180,000. These shares were issued on June 27, 2013.

 

For the calendar year of 2013 the Company continues to use offices provided by 1568934 Ontario Limited, an affiliate of the Company, located in Beverly Hills, California. This office space is approximately 1,000 square feet; the Company pays 50,000 shares of restricted common stock each month for rent, electricity, telephones, and other expenses of the office. The Company is under an annual renewable lease of these offices. On June 27, 2013, the Company issued 600,000 restricted shares of common stock to 1568934 Ontario Limited under this arrangement as rent payment for the 2013 calendar year

  

NOTE 2 – GOING CONCERN

 

The Company’s consolidated financial statements are prepared using generally accepted accounting principles applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not established any source of revenue to cover its operating costs. The Company has sustained operating losses and expects such losses to continue for the foreseeable future. The Company will engage in very limited activities without incurring any liabilities that must be satisfied in cash until a source of funding is secured. The Company will offer non-cash consideration as a mean of financing its operations. If the Company is unable to obtain revenue-producing contracts or financing or if the revenue or financing it does obtain is insufficient to cover any operating losses it may incur, it may substantially curtail or terminate its operations.

 

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES

 

Use of Estimates.

 

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. While management believes that such estimates are fair when considered in conjunction with the consolidated financial position and results of operations taken as a whole, actual results could differ from those estimates and such differences may be material to the financial statements.

 

Basis of Presentation.

 

The accompanying unaudited financial statements of the Company are presented in accordance with the requirements of Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted pursuant to such U.S. Securities and Exchange Commission (“SEC”) rules and regulations. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been made. The results for these interim periods are not necessarily indicative of the results for the entire year. The accompanying financial statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2012 and the notes thereto included in the Company’s Report on Form 10-K filed with the SEC on May 13, 2013.

 

Functional and Reporting Currency.

 

The consolidated financial statements are presented in U.S. Dollars, which is the Company’s functional currency and presentation currency. The financial statements of entities that use a functional currency other than the U.S. Dollar are translated into U.S. Dollars. Assets and liabilities are translated using the exchange rate on the respective balance sheet dates. Items in the income statement and cash flow statement are translated into U.S. Dollars using the average rates of exchange for the periods involved. The resulting translation adjustments are recorded as a separate component of other comprehensive income/(loss) within stockholders’ equity.

 

The functional currency of foreign entities is generally the local currency unless the primary economic environment requires the use of another currency. Gains or losses arising from the translation or settlement of foreign-currency-denominated monetary assets and liabilities into the functional currency are recognized in the income in the period in which they arise. However, currency differences on intercompany loans that have the nature of a permanent investment are accounted for as translation differences as a separate component of other comprehensive income/(loss) within stockholders’ equity.

 

New Israeli Shekel (“NIS”) amounts as of September 30, 2013 have been translated into U.S. Dollars at the representative rate of exchange on September 30, 2013 (USD 1 = NIS 3.537).

 

Consolidation Principles.

 

The consolidated financial statements of the Company include the accounts of the Company, and all entities in which a direct or indirect controlling interest exists through voting rights or qualifying variable interests. All intercompany balances and transactions have been eliminated in the consolidated financial statements.

 

Recently Issued Accounting Pronouncements.

 

1. ASC Topic 220, "Comprehensive Income"

 

Effective January 1, 2013, the Company adopted Accounting Standard Update (“ASU”) No. 2013-02, “Comprehensive Income (Topic 220) - Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income”. ASU 2013-02 requires an entity to provide information about amounts reclassified out of accumulated other comprehensive income.

 

According to ASU 2013-02, significant items that are required under U.S. GAAP to be reclassified to net income in their entirety shall be presented by the respective line items of net income either on the face of the financial statements or in the footnotes. Items that are not required under U.S. GAAP to be reclassified to net income in their entirety, will be required to be cross-referenced to other disclosures required under U.S. GAAP that provide additional detail about those amounts. The standard became effective, prospectively, for interim and annual periods beginning after December 15, 2012.

 

The adoption of ASU 2013-02 did not have a material impact on the financial position or results of operations of the Company.

 

2. ASC Topic 210, “Balance Sheet”

 

Effective January 1, 2013, the Company adopted ASU 2011-11, “Balance Sheet (Topic 210) - Disclosures about Offsetting Assets and Liabilities”. ASU 2011-11 enhances disclosures about financial instruments and derivative instruments that are either offset in accordance with the Accounting Standards Codification or are subject to an enforceable master netting arrangement or similar agreement. 

 

The amended guidance became effective, in a retrospective manner to all comparative periods presented, for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods.

 

The adoption of ASU 2011-11 did not have a material impact on the financial position or results of operations of the Company.

 

NOTE 4 EVENTS DURING THE REPORTED PERIOD

 

A. On May 14, 2013, the Company’s board of directors (with Sam Shlomo Elimelech, a director, recusing himself) decided to simplify the Company’s corporate structure by transferring all assets and technologies from its subsidiaries to the Company, and sell its subsidiaries with their accumulated losses to Mr. Elimelech, the Company’s president and CEO; the effective date of the transactions is January 1, 2013. Accordingly, the Company sold all its holdings in: Impact Active Team Ltd., TPDS Ltd., Meizam – Advanced Enterprise Center Arad Ltd., and Gaia Med Ltd. to Mr. Elimelech. Simultaneously with the sale of subsidiaries, the Company acquired an additional 7.5% interest in Meizam Arad Investments Ltd., which then became a wholly owned and the only subsidiary of the Company (the effective date of this transaction is also January 1, 2013).

 

These transactions are set forth below:

 

· On May 15, 2013, the Company’s subsidiary Meizam Arad Investments Ltd. (“Meizam Investments”) entered into an Acquisition Agreement with Meizam – Advanced Enterprise Center Arad Ltd. (“Meizam Arad”) to sell all of the shares of common stock held by Meizam Investments of the subsidiary Gaia-Med Ltd. to Meizam Arad. See Exhibit 10.26.

 

· On May 15, 2013, the Company’s subsidiary Meizam Investments entered into an Acquisition Agreement with Meizam Arad to sell all of the shares of common stock held by Meizam Investments of the subsidiary TPDS Ltd. to Meizam Arad. See Exhibit 10.27.

 

· On May 15, 2013, the Company entered into an Acquisition Agreement with Meizam Arad to sell all of the shares of common stock held by the Company of the subsidiary TPDS Ltd. to Meizam Arad. See Exhibit 10.28.

 

· On May 15, 2013, the Company entered into an Acquisition Agreement with Meizam Arad to sell all of the shares held by the Company of its subsidiary Impact Active Team Ltd. (“Impact Active”) to Meizam Arad. See Exhibit 10.29

  

· On May 15, 2013, the Company entered into an Acquisition Agreement with Mr. Elimelech to sell all of the shares of common stock held by the Company of its subsidiary Meizam Arad to Mr. Elimelech. See Exhibit 10.30.

 

· On May 15, 2013, the Company entered into an Acquisition Agreement with Mr. Mar-Chaim to sell all of the shares held by Mr. Mar-Chaim in the Company’s subsidiary Meizam Investments to the Company. See Exhibit 10.31.

 

· On May 15, 2013, the Company entered into an Acquisition Agreement with Mr. Elimelech to sell all of the shares held by Mr. Elimelech of its subsidiary Meizam Investments to the Company. See Exhibit 10.32.

 

· On May 15, 2013, the Company’s subsidiary Meizam Investments entered into an Acquisition Agreement with Mr. Elimelech to sell all of the shares held by Meizam Investments of the Company’s subsidiary Meizam Arad to Mr. Elimelech. See Exhibit 10.33

 

Working capital deficiency, excluding cash and cash equivalents  $(70,786)
Property and equipment, net   24,808 
Non-controlling interest   256,890 
Accumulated other comprehensive (loss)   159,614 
Profit from transactions with stockholder – recorded to additional paid in capital   (370,526)
   $—   

 

B. Simultaneously with the sale of subsidiaries, the Company acquired additional 7.5% in Meizam Arad Investments Ltd. for no additional cost from Mr. Elimelech. Meizam Arad Investments Ltd. became a wholly owned and the only subsidiary of the Company. The transaction was recorded to additional paid in capital, being a transaction with a stockholder. These transactions are set forth below:

 

· On May 15, 2013, the Company entered into an Acquisition Agreement with Mr. Mar-Chaim to sell all of the shares held by Mr. Mar-Chaim in the Company’s subsidiary Meizam Investments to the Company.

 

· On May 15, 2013, the Company entered into an Acquisition Agreement with Mr. Elimelech to sell all of the shares held by Mr. Elimelech of its subsidiary Meizam Investments to the Company.

 

Additional acquisition of control in Meizam Arad Investments Ltd.:     
Non-controlling interest  $(8,528)
Loss from transactions with stockholder recorded to additional paid in capital   8,528 
   $—   

 

On July 15, 2013, the Company accepted the resignation of Yarel + Partners, the independent registered public accounting firm who was previously engaged as the principal accountant to audit the Company’s financial statements. The decision to accept this resignation was approved by the Company’s Board of Directors.

  

NOTE 5 – STOCKHOLDERS’ EQUITY

 

On January 28, 2013, the Company issued a total of 400,000 free trading shares of common stock under the 2011 Stock and Option Plan in connection with the conversion of accounts payables for services provided in exchange of short-term liabilities accrued in prior years in the amount of $24,000. The Company granted an additional 1,400,000 shares for services during the period ending September 30, 2013. These shares have not been issued as of September 30, 2013 and the Company recorded $84,000 in Stock Payable.

 

On February 13, 2013 the Company engaged in a financial public relations services agreement with Investor Communications Services (a division of A.I.D. Capital, LLC.). According to the agreement 375,000 shares were issued for services to be provided in the six months period ending June 30, 2013 valued at $15,000. The Company recorded stock based compensation in the amount of $15,000 for the three months ended March 31, 2013. These shares were subsequently cancelled due to non-performance of services.

 

During the period ending September 30, 2013, the Company issued 1,309,314 shares for services in the aggregate of $369,467. These shares were valued on the date of grant.

 

During the period ending September 30, 2013, the Company rewarded Gai Mar-Chaim and Sam Shlomo Elimelech 5,440,000 shares for their services to the Company. These shares were valued in the amount of $193,120 on the date of grant.

 

During the period ending September 30, 2013, the Company issued 21,316,000 shares for cash in the amount of $180,000.

 

During the period ending September 30, 2013, the Company cancelled 55,000 shares for non-performance of services.

 

When preparing the financial statements for the three months ended March 31, 2013, the Company discovered that the number of shares outstanding as of March 31, 2013 as disclosed on the front cover and under Item 12 of the recently in the recently filed Form 10-K were incorrectly noted as 57,669,242; the correct number is 57,479,928. This results in a very small changes in the percentages notes in the chart under Item 12: Gerald Fialkov 14.54%; Shlomo Elimelech: 38.74%; Gai Mar-Chaim: 38.72%; and all directors and executive officers: 76.59%.

 

NOTE 6 – RELATED PARTY TRANSACTIONS

 

Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are disclosed below.

 

The following entities have been identified as related parties of the Company as of September 30, 2013:

 

1568934 Ontario Limited  Greater than 10% stockholder
Sam Elimelech  Director and greater than 10% stockholder
Gai Mar-Chaim  Director and greater than 10% stockholder
Meizam Arad Investments Ltd.  Wholly owned subsidiary
Impact Active Team Ltd.  Israeli company with common director
TPDS Ltd.  Israeli company with common director
Meizam - Advanced Enterprise Center Arad Ltd.  Israeli company with common director
Gaia Med Ltd.  Israeli company with common director
P.O.C. Hi Tech Ltd.  Israeli company with common director

 

The following transactions were carried out with related parties:

 

   For the nine months ended September 30,
   2013  2012
Income statements:          
  Directors’ remuneration  $360,000   $270,000 
  Stock based compensation   193,120    —   
           
Balance sheets:          
Related party receivable (payable)
- P.O.C. Hi Tech Ltd.
- Meizam Advanced Enterprise Center Arad Ltd.
- Impact Active Team Ltd.
   —      66,467 
  Payables – key management personnel (1)   422,150    166,904 
  Stockholder loans   127,000    127,000 

 

(1) The annual compensation to key management personnel is $480,000 per year. During 2012 the Company recorded forgiveness of loans from key management personnel in the amount of $512,982. The amount was recorded as an equity transaction.

 

NOTE 7 – SUBSEQUENT EVENTS

 

Effective on October 3, 2013, the Company appointed M&K CPAS, PLLC from 4100 North Sam Houston Pkwy W Houston, TX 77086, as the Company’s new independent registered public accounting firm to review the Company’s financial statements for the interim period ended on September 30, 2013.

 

NOTE 8 – PRIOR PERIOD ADJUSTMENTS

 

During the preparation of its June 30, 2012, the Company restated its financial statements for the three months ended March 31, 2012, to give retrospective effect to the elimination of the extraordinary gain on forgiveness of debt that was recognized in the unaudited consolidated statements as of March 31 2012. As of the date of this report settlement of $185,309 of the debt to the Company’s local legal counsel has not yet been closed, and the remaining $44,726 was reclassified to research and development expenses as follows:

  

   As Previously
Reported
  Prior Period Adjustments  As Restated
                
                
Extraordinary gain on forgiveness of debt  $(230,126)  $230,126   $—   
                
Net loss  $118,778   $185,309   $304,087 
                
Net loss attributable to non-controlling interest  $31,062   $13,898   $44,960 
                
Net loss attributable to Andain, Inc. stockholders  $87,716   $171,411   $259,127 
                
Net loss per share (basic) attributable to Andain, Inc  $0.00   $(0.01)  $(0.01)

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 

The following management’s discussion and analysis of financial condition and results of operations is based upon, and should be read in conjunction with, the Company’s unaudited financial statements and related notes included elsewhere in this Form 10-Q, which have been prepared in accordance with accounting principles generally accepted in the United States.

 

Overview.

 

(a) General Discussion.

 

The Company invests in commercialization of its technologies and products. The Company’s main efforts are to optimize development, engineering for production, regulation, pre-clinical and clinical trials and market penetration, respectfully, to each of its products. The Company is constantly working to enhance its products by new synergetic novel technologies keeping each of its products advantageous in its market.

 

The Company’s technological / industrial accelerating incubator specializes in utilization of the industrial infrastructure of companies that it works with, optimizing each product’s research and development and engineering development to the “best-in-the-market” product.

 

The Company’s team of experts manages all technological, medical, regulatory and other aspects needed to insure timely development, and market presence within the planed program and budget.

 

The Company operates five product lines:

 

· Miniature insulin pump

· Targeted drug delivery nano-particles 

· Stem cell therapy

· Ultasonic catheter for brain cancer therapy 

· Peptide booster for anti-wrinkle cosmeceuticals

 

Miniature Disposable Insulin Pump.

 

The Company is committed to develop a fully disposable miniature insulin pump, suitable for diabetics type I and type II as well, without any government grant, saving the need to pay future royalties. The Company’s main challenge was to achieve production cost capable of competing with the low price of the insulin pen syringe injector for diabetes type II. The Company’s detailed market survey showed a significant advantage of such a product in the market, providing the comfort of a “band aid” patch size product, accurate as the expensive insulin pumps and preventing any hyper or hypo life threatening situations to the patient (stable blood glucose level superior to the syringe use).

 

The Company’s team developed successfully the technology of the Gemini, a fully disposable pump, and lab tested all regulatory aspects of the Gemini pump, ready for the clinical trials initial production batch. During the first quarter of 2013, the Company’s team focused on technology transfer for GMP/GLP production, and Helsinky approval for clinical trials.

 

The Company estimates that the Gemini's efforts of development, regulatory affairs and manufacturing in order to complete the required clinical trials, will require a budget of $750,000. In addition we estimate that $600,000 will be required to introduce the innovative pump to the market and to large distributors.

 

Nano-particles Targeted Drug Delivery Technology.

 

The Company is also committed to develop its nano-particle technology with the capacity to accommodate hydrophobic (repelling water based molecules), as well as hydrophilic (attracting water based molecules) properties. These developments enable the Company to carry out GSK RELENZA (zanamivir) drug for swine flu (H1N1) therapy. The Company’s lab results show very stable nano-particle with over a six months shelf life capable of carrying hydrophobic and hydrophilic molecules with a high drug load, providing exceptional drug delivery efficiency. During the first quarter of 2013, the Company’s team mapped all intellectual properties used in developing the multi-task nano-particles to secure in its intellectual properties.

 

The Company estimates that the additional development, regulatory affairs and manufacturing in order to complete all required clinical trials, will require a budget of $1,100,000.

 

Stem Cell Therapy for Muscular Injuries.

 

The Company has completed successful animal studies with positive results on limb therapy. The initial animal studies showed very promising rehabilitating results. Based on these results, the Company has modified and accelerated its development program with two pillar technologies with strong intellectual properties: (i) Direct a stem cell to a myogenic (muscle) cell without any spontaneous direction into unhealthy cells such as cancer tumors; and (ii) mass produce the directed myogenic cells for patient treatment. As part of the of the development phase, the Company has developed a “harvesting” procedure of human fat tissue from the patient as a row material for extracting the stem cells, diverting and directing them to muscle cells, and reproducing them for an effective treatment. Currently, the Company is developing the upscale production process for commercial use.

 

The Company estimates that the additional development, regulatory affairs and manufacturing in order to complete all required pre-clinical trials, will require a budget of $650,000.

 

(b) Operations.

 

Insulin Pumps.

 

The Company separates its Gemini pump development in any aspect from the development of its Gaia Med Diamond semi-disposable pump. The Company has successfully managed to develop Gaia-Med’s technology and intellectual properties secured by patents, and develop new, separate intellectual properties for the Gemini pump. During 2012 the Company further developed and enhanced the Gemini patents. Those enhancements will be filed in second half of 2013. The Company’s development success of new and separate technology that is not based or relates in any aspect on Gaia-Med’s technology precludes the Company and its technological industrial incubator from any royalties payment for the Gemini product line. The Company and its technology incubator also continue developing the semi-disposable Gaia-Med pump within its original program. Therefore, the Company intends to establish a new business unit to accommodate all assets and operations of the Gemini pump as soon as this pump is ready for clinical trials batch production.

 

Nano-Particles.

 

The Company separates its new development in any aspect from previous development performed in its former subsidiary TPDS Ltd.

 

The Company has successfully managed to develop new technology and intellectual properties to be secured by new patents, for the multi-tasking nano-particles, to be filed in after the completion of the Company's next financing round. The Company’s development success of new and separate technology that is not based or relates in any aspect to TPDS’ technology precludes the Company and its technological industrial incubator from any royalties payment for this product line. Currently, the Company and its incubator halted development of TPDS technology, and now develop only its new technology. The Company will revisit the original TPDS development program during 2013, according to the pre-clinical results of the new technology and product.

 

With the next financing round the Company intends to establish a new business unit to accommodate all assets and operations of the new nano-particle technology and development.

 

Stem Cell Therapy.

 

The Company intends to establish a new business unit to accommodate all assets and operations of the new stem cell technology and development of the project as soon as the clinical trials commence.

 

Results of Operations.

 

(a) Total Revenue.

 

The Company had total revenue of $0 for the three months ended September 30, 2013 compared to $12,158 for the three months ended September 30, 2012, a decrease of $12,158 The Company had total revenue of $63,767 for the Nine months ended September 30, 2013 compared to $88,404 for the nine months ended September 30, 2012, a decrease of $24,637 or approximately 28%. The decrease in total revenue resulted primarily from a delayed billing as of the affiliation agreements transfer with POC Hi-Tech Ltd, Impact Active Team Ltd, and Meizam Advanced Enterprise Center Arad Ltd.

 

The Company had total revenue of $1,312,089 for the period of July 23, 2004 (date of inception) through September 30, 2013.

 

(b) Research and development Expenses.

 

The Company had research and development expenses of $13,247 for the three months ended September 30, 2013 compared to $107,270 for the three months ended September 30, 2012, a decrease of $94,023. The Company had research and development expenses of $476,579 for the nine months ended September 30, 2013 compared to $452,043 for the nine months ended September 30, 2012, an increase of $24,536 or approximately 5%. The increases in research and development expenses were mainly due to increase in FDA regulation expenses.

 

The Company had research and development expenses of $867,866 for the period of July 23, 2004 (date of inception) through September 30, 2013.

 

(c) General and Administrative Expenses.

 

The Company had general and administrative expenses of $197,455 for the three months ended September 30, 2013 compared to $33,907 for the three months ended September 30, 2012, an increase of $163,548 or approximately 83%. The Company had general and administrative expenses of $465,057 for the nine months ended September 30, 2013 compared to $155,660 for the nine months ended September 30, 2012, an increase of $309,397 or approximately 67%. The increases in general and administrative expenses were mainly due to increase in professional services.

 

The Company had general and administrative expenses of $7,565,504 for the period of July 23, 2004 (date of inception) through September 30, 2013.

 

(d) Net Profit (Loss).

 

The Company had a net loss of $588,523 for the three months ended September 30, 2013 compared to a net profit of $503,756 for the three months ended September 30, 2013. The Company had a net loss of $1,257,690 for the nine months ended September 30, 2013 compared to a net profit of $87,591 for the nine months ended September 30, 2012, an increase of $1,345,281. The increase in net loss is the result primarily from the Company’s corporate restructuring.

 

The Company had a net loss of $7,804,955 for the period of July 23, 2004 (date of inception) through September 30, 2013.

 

Operating Activities.

 

Net cash used by operating activities was $180,000 for the nine months ended September 30, 2013 compared to net cash provided by operating activities of $1,046 for the nine months ended September 30, 2012, a change of $178,954. This change was the result of the increase in the net loss.

 

The net cash used in operating activities was $196,359 for the period of July 23, 2004 (date of inception) through September 30, 2013.

 

Investing Activities.

 

Net cash used in investing activities was $0 for the nine months ended September 30, 2013 compared to $480 for the nine months ended September 30, 2012.

 

Net cash used in investing activities was $552,949 for the period of July 23, 2004 (date of inception) through September 30, 2013.

 

Liquidity and Capital Resources.

 

As of September 30, 2013, the Company had total current assets of $0 and total current liabilities of $826,388 resulting in a working capital deficit of $826,388. The cash and cash equivalents was $0 as of September 30, 2013 compared to $0 as of December 31, 2012.

 

The net cash provided by financing activities was $180,000 for the nine months ended September 30, 2013 compared to net cash provided by financing activities of $0 for the nine months ended September 30, 2012. This increase is attributed to share issuance for cash in the nine months ended September 30, 2013. Net cash provided by financing activities was $748,385 for the period of inception of July 23, 2004 (date of inception) through September 30, 2013.

 

The Company’s current cash and cash equivalents balance will not be sufficient to fund its operations for the next 12 months. The Company’s ability to continue as a going concern on a longer-term basis will be dependent upon its ability to generate sufficient cash flow from operations to meet its obligations on a timely basis, and to obtain additional financing, and ultimately attain profitability. The Company’s continued operations, as well as the implementation of the Company’s business plan will depend upon its ability to raise additional funds through bank borrowings and equity or debt financing.

 

Whereas the Company has been successful in the past in raising capital, no assurance can be given that these sources of financing will continue to be available to it and/or that demand for the Company’s common stock will be sufficient to meet its capital needs, or that financing will be available on terms favorable to the Company. If funding is insufficient at any time in the future, the Company may not be able to take advantage of business opportunities or respond to competitive pressures, or may be required to reduce the scope of the Company’s planned product development and marketing efforts, any of which could have a negative impact on its business and operating results. In addition, insufficient funding may have a material adverse effect on the Company’s financial condition, which could require it to:

 

· curtail operations significantly; 

· sell significant assets;

· seek arrangements with strategic partners or other parties that may require the Company to relinquish significant rights to products, technologies or markets; or 

· explore other strategic alternatives including a merger or sale of the Company.

 

To the extent that the Company raises additional capital through the sale of equity or convertible debt securities, the issuance of such securities may result in dilution to the Company’s existing stockholders. If additional funds are raised through the issuance of debt securities, these securities may have rights, preferences and privileges senior to holders of common stock and the terms of such debt could impose restrictions on the Company’s operations. Regardless of whether the Company’s cash assets prove to be inadequate to meet its operational needs, the Company may seek to compensate providers of services by issuance of stock in lieu of cash, which may also result in dilution to the Company’s existing stockholders.

 

Inflation.

 

The impact of inflation on the Company’s costs and the ability to pass on cost increases to its customers over time is dependent upon market conditions. The Company is not aware of any inflationary pressures that have had any significant impact on its operations over the past quarter and the Company does not anticipate that inflationary factors will have a significant impact on future operations.

 

Off-Balance Sheet Arrangements.

 

The Company does not maintain off-balance sheet arrangements nor does it participate in non-exchange traded contracts requiring fair value accounting treatment.

 

Critical Accounting Policies.

 

The SEC has issued Financial Reporting Release No. 60, “Cautionary Advice Regarding Disclosure About Critical Accounting Policies” (“FRR 60”), suggesting companies provide additional disclosure and commentary on their most critical accounting policies. In FRR 60, the Commission has defined the most critical accounting policies as the ones that are most important to the portrayal of a company’s financial condition and operating results, and require management to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on this definition, the Company’s most critical accounting policies include: (a) use of estimates; (b) impairment of long-lived assets; and (c) share-based compensation. The methods, estimates and judgments the Company uses in applying these most critical accounting policies have a significant impact on the results the Company reports in its financial statements.

 

(a) Use of Estimates.

 

The preparation of financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates these estimates, including those related to revenue recognition and concentration of credit risk. The Company bases its estimates on historical experience and on various other assumptions that is believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

 

(b) Impairment Long-Lived Assets.

 

For purposes of recognition and measurement of an impairment loss, a long-lived asset or assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The Company assesses the impairment of long-lived assets (including identifiable intangible assets) annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

 

When management determines that the carrying value of long-lived assets may not be recoverable based upon the existence of one or more of the above indicators of impairment, we test for any impairment based on a projected undiscounted cash flow method. Projected future operating results and cash flows of the asset or asset group are used to establish the fair value used in evaluating the carrying value of long-lived and intangible assets. The Company estimates the future cash flows of the long-lived assets using current and long-term financial forecasts. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If this were the case, an impairment loss would be recognized. The impairment loss recognized is the amount by which the carrying amount exceeds the fair value.

 

(c) Revenue Recognition.

 

The Company recognizes revenue when all four recognition criteria have been met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, seller’s price to buyer is fixed or determinable, and collectability is reasonably assured.

 

(d) Share-Based Compensation.

 

The Company follows ASC Topic 718-10, “Stock Compensation,” which addresses accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. Topic 718-10 requires measurement of the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. Upon the adoption of Topic ASC 718-10, the Company maintained its method of valuation for stock option awards using the Black-Scholes valuation model, which has historically been used for the purpose of providing pro-forma financial disclosures in accordance with Topic ASC 718-10.

 

The use of the Black-Scholes valuation model to estimate the fair value of stock option awards requires the Company to make judgments and assumptions regarding the risk-free interest rate, expected dividend yield, expected term and expected volatility over the expected term of the award. The assumptions used in calculating the fair value of share-based payment awards represent management’s best estimates, but these estimates involve inherent uncertainties and the actual amount of expense could be materially different in the future.

 

Compensation expense is only recognized on awards that ultimately vest.

 

Forward Looking Statements.

 

Information in this Form 10-Q contains “forward looking statements” within the meaning of Rule 175 of the Securities Act of 1933, as amended, and Rule 3b-6 of the Securities Act of 1934, as amended. When used in this Form 10-Q, the words “expects,” “anticipates,” “believes,” “plans,” “will” and similar expressions are intended to identify forward-looking statements. These are statements that relate to future periods and include, but are not limited to, statements regarding the adequacy of cash, expectations regarding net losses and cash flow, statements regarding growth, the need for future financing, dependence on personnel, and operating expenses.

 

Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. These forward-looking statements speak only as of the date hereof. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not applicable.

 

ITEM 4. CONTROLS AND PROCEDURES.

 

Evaluation of Disclosure Controls and Procedures.

 

The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in its periodic reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the principal executive officer/principal financial officer, to allow timely decisions regarding required disclosure.

 

As of the end of the period covered by this report, the Company’s management carried out an evaluation, under the supervision and with the participation of the principal executive officer/principal financial officer, of disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based upon the evaluation, the principal executive officer/principal financial officer concluded that the Company’s disclosure controls and procedures were not effective at a reasonable assurance level to ensure that information required to be disclosed by it in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. In addition, the principal executive officer/principal financial officer concluded that the Company’s disclosure controls and procedures were not effective at a reasonable assurance level to ensure that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including the principal executive officer/principal financial officer, to allow timely decisions regarding required disclosure.

 

Inherent Limitations of Control Systems.

 

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, will be or have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, and/or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, and/or the degree of compliance with the policies and procedures may deteriorate. Because of the inherent limitations in a cost-effective internal control system, misstatements due to error or fraud may occur and not be detected.

 

Changes in Internal Control Over Financial Reporting.

 

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended September 30, 2013 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. 

 

PART II – OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS.

 

From time to time, the Company may become party to litigation or other legal proceedings that the Company considers to be a part of the ordinary course of the business. There are no material legal proceedings to report, except as outlined in the last Form 10-K. There are no changes to those legal proceedings as reported in that Form 10-K.

 

ITEM 1A. RISK FACTORS.

 

There have been no material changes in the risk factors as previously disclosed in response to Item 1A.of Part I of the Company’s latest Form 10-K.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

 

There were no unregistered sales of the Company’s equity securities during the three months ended September 30, 2013 that were not previously reported by the Company.

 

There were no purchases of the Company’s common stock by the Company or its affiliates during the three months ended September 30, 2013.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

 

Not applicable.

 

ITEM 4. MINE SAFETY DISCLOSURES.

 

Not applicable.

 

ITEM 5. OTHER INFORMATION.

 

Subsequent Events.

 

Effective on October 3, 2013, the Company appointed M&K CPAS, PLLC from 4100 North Sam Houston Pkwy W Houston, TX 77086, as the Company’s new independent registered public accounting firm to review the Company’s financial statements for the interim period ended on September 30, 2013

 

ITEM 6. EXHIBITS.

 

Exhibits included or incorporated by reference herein are set forth in the Exhibit Index. 

 

SIGNATURE

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

      Andain, Inc.
       
Dated: November 19, 2013   By: /s/ Sam Shlomo Elimelech
        Sam Shlomo Elimelech, President
        (principal executive officer)

 

 

 EXHIBIT INDEX

 

Number Description

3.1Articles of Incorporation, dated July 14, 2004 (incorporated by reference to Exhibit 3.1 of the Form 10-SB filed on March 24, 2005).
3.2Bylaws, dated August 1, 2004 (incorporated by reference to Exhibit 3.2 of the Form 10-SB filed on March 24, 2005).
4.1Option issued to 1568934 Ontario Limited by the Company, dated January 14, 2011 (incorporated by reference to Exhibit 10.6 of the Form 8-K filed on March 29, 2011).
4.2Employee Stock Option Plan, dated January 15, 2011 (incorporated by reference to Exhibit 4.2 of the Form 10-Q filed on November 21, 2011).
4.3Stock Option Grant to Sam Elimelech, dated January 20, 2011 (incorporated by reference to Exhibit 4.3 of the Form 10-Q filed on November 21, 2011).
4.4Stock Option Grant to Gai Mar-Chaim, dated January 20, 2011 (incorporated by reference to Exhibit 4.4 of the Form 10-Q filed on November 21, 2011).
4.52011 Stock and Option Plan, dated July 26, 2011 (incorporated by reference to Exhibit 4 of the Form S-8 filed on July 26, 2011).
10.1Affiliation Agreement between the Impact Active Team Ltd. and P.O.C. High-Tech (1992) Ltd. Corporation, dated July 23, 2004 (incorporated by reference to Exhibit 10.8 of the Form SB-2 filed on February 13, 2007).
10.2Consulting Agreement between the Company and Dr. Leonid Lurya, dated May 16, 2006 (incorporated by reference to Exhibit 10.2 of the Form 10-K filed on December 30, 2010).
10.3Share Purchase Agreement between the Company and Pangea Investments GmbH, dated June 11, 2006 (not including Schedule 1, Disclosure Schedule) (incorporated by reference to Exhibit 10.1 of the Form 8-K filed on July 5, 2006).
10.4Technology Purchase Agreement between the Company and Pangea Investments GmbH, dated June 11, 2006 (incorporated by reference to Exhibit 10.2 of the Form 8-K filed on July 5, 2006).
10.5Finder’s Fee Agreement between the Company and Pangea Investments GmbH, dated June 11, 2006 (incorporated by reference to Exhibit 10.5 of the Form 8-K filed on July 5, 2006).
10.6Consulting Agreement between the Company and Pangea Investments GmbH, dated July 3, 2006 (incorporated by reference to Exhibit 10.3 of the Form 8-K filed on July 5, 2006).
10.7Business Development Services Agreement between the Company and Pangea Investments GmbH, dated July 3, 2006 (incorporated by reference to Exhibit 10.4 of the Form 8-K filed on July 5, 2006).
10.8Employment Agreement between the Company and Sam Elimelech, dated July 3, 2006 (incorporated by reference to Exhibit 10.6 of the Form 8-K filed on July 5, 2006).
10.9Employment Agreement between the Company and Gai Mar-Chaim, dated July 3, 2006 (incorporated by reference to Exhibit 10.7 of the Form 8-K filed on July 5, 2006).
10.10Regulation S Stock Purchase Agreement between the Company and 1568934 Ontario Limited, dated July 19, 2006 (incorporated by reference to Exhibit 10.11 of the Form 10-K/A filed on February 7, 2011).
10.11Consulting Agreement between the Company and Meizam - Advanced Enterprise Center Arad Ltd., dated October 25, 2006 (incorporated by reference to Exhibit 10.10 of the Form 10-K filed on December 30, 2010).
10.12Employment Agreement between the Company and Sam Elimelech, dated January 1, 2011 (incorporated by reference to Exhibit 10.1 of the Form 8-K filed on March 29, 2011).
10.13Employment Agreement between the Company and Gai Mar-Chaim, dated January 1, 2011 (incorporated by reference to Exhibit 10.2 of the Form 8-K filed on March 29, 2011).
10.14Regulation S Stock Purchase Agreement between the Company and Sam Elimelech, dated January 5, 2011 (incorporated by reference to Exhibit 10.3 of the Form 8-K filed on March 29, 2011).
10.15Regulation S Stock Purchase Agreement between the Company and Gai Mar-Chaim, dated January 5, 2011 (incorporated by reference to Exhibit 10.4 of the Form 8-K filed on March 29, 2011).
10.16Regulation S Stock Purchase Agreement between the Company and 1568934 Ontario Limited, dated January 14, 2011 (incorporated by reference to Exhibit 10.5 of the Form 8-K filed on March 29, 2011).
10.17Stock Purchase Agreement between the Company and Meizam Arad Investments Ltd., dated January 31, 2011 (incorporated by reference to Exhibit 10.7 of the Form 8-K filed on March 29, 2011).

 

10.18Stock Purchase Agreement between Meizam – Advanced Enterprise Center Arad Ltd and Meizam Arad Investments Ltd., dated January 31, 2011 (incorporated by reference to Exhibit 10.8 of the Form 8-K filed on March 29, 2011).
10.19Regulation S Stock Purchase Agreement between the Company and 1568934 Ontario Limited, dated May 24, 2011 (incorporated by reference to Exhibit 10 of the Form 8-K filed on July 19, 2011) (excluding Schedules 2.4, 2.7, and 2.10).
10.20Regulation S Stock Purchase Agreement between the Company and 1568934 Ontario Limited, dated July 29, 2011 (incorporated by reference to Exhibit 10 of the Form 8-K filed on August 16, 2011) (excluding Schedules 2.4, 2.7, and 2.10).
10.21Regulation S Stock Purchase Agreement between the Company and 1568934 Ontario Limited, dated December 26, 2011 (incorporated by reference to Exhibit 10 of the Form 8-K filed on February 6, 2012) (including Schedule 1.4 (Option to Purchase Shares of Common Stock) and Schedule 2.4 (Litigation); excluding Schedule 2.7).
10.22Corporate Office Services Agreement between the Company and 1568934 Ontario Limited, dated January 5, 2012 (incorporated by reference to Exhibit 10.22 of the Form 10-Q filed on August 29, 2012).
10.23Regulation S Stock Purchase Agreement between the Company and Eran Elimelech, dated July 29, 2012 (incorporated by reference to Exhibit 10.23 of the Form 10-Q filed on August 29, 2012).
10.24Regulation S Stock Purchase Agreement between the Company and Sam Elimelech, dated July 29, 2012 ((incorporated by reference to Exhibit 10.24 of the Form 10-Q filed on November 19, 2012).
10.25Regulation S Stock Purchase Agreement between the Company and Gai Mar-Chaim, dated July 29, 2012 ((incorporated by reference to Exhibit 10.25 of the Form 10-Q filed on November 19, 2012).
10.26Acquisition Agreement between Meizam – Advanced Enterprise Center Arad Ltd. and Meizam Arad Investments Ltd. (Gaia Med Ltd.), dated May 15, 2013 (incorporated by reference to Exhibit 10.26 of the Form 10-Q filed on May 20, 2013).
10.27Acquisition Agreement between Meizam – Advanced Enterprise Center Arad Ltd. and Meizam Arad Investments Ltd. (TPDS Ltd.), dated May 15, 2013 (incorporated by reference to Exhibit 10.27 of the Form 10-Q filed on May 20, 2013).
10.28Acquisition Agreement between Meizam – Advanced Enterprise Center Arad Ltd. and the Company (TPDS Ltd.), dated May 15, 2013 (incorporated by reference to Exhibit 10.28 of the Form 10-Q filed on May 20, 2013).
10.29Acquisition Agreement between Meizam – Advanced Enterprise Center Arad Ltd. and the Company (Impact Active Team Ltd.), dated May 15, 2013 (incorporated by reference to Exhibit 10.29 of the Form 10-Q filed on May 20, 2013).
10.30Acquisition Agreement between Sam Shlomo Elimelech and the Company (Meizam – Advanced Enterprise Center Arad Ltd.), dated May 15, 2013 (incorporated by reference to Exhibit 10.30 of the Form 10-Q filed on May 20, 2013).
10.31Acquisition Agreement between the Company and Gai Mar-Chaim (Meizam Arad Investments Ltd.), dated May 15, 2013 (incorporated by reference to Exhibit 10.31 of the Form 10-Q filed on May 20, 2013).
10.32Acquisition Agreement between the Company and Sam Shlomo Elimelech (Meizam Arad Investments Ltd.), dated May 15, 2013 (incorporated by reference to Exhibit 10.32 of the Form 10-Q filed on May 20, 2013).
10.33Acquisition Agreement between Sam Shlomo Elimelech and Meizam Arad Investments Ltd. (Meizam – Advanced Enterprise Center Arad Ltd.), dated May 15, 2013 (incorporated by reference to Exhibit 10.33 of the Form 10-Q filed on May 20, 2013).
10.34Regulation S Stock Purchase Agreement between the Company and 1568934 Ontario Limited, dated April 10, 2013 (including Schedule 1.3 (Option to Purchase of Shares of Common Stock)) (incorporated by reference to Exhibit 10 of the Form 8-K filed on June 21, 2013).
16.1Letter on Change in Certifying Accountant (incorporated by reference to Exhibit 16 of the Form 8-K filed on January 5, 2006).
16.2Letter on Change in Certifying Accountant (incorporated by reference to Exhibit 16 of the Form 8-K filed on November 5, 2010).
16.3Letter on Change in Certifying Accountant (incorporated by reference to Exhibit 16 of the Form 8-K filed on July 24, 2012).
16.4Letter on Change in Certifying Accountant (incorporated by reference to Exhibit 16 of the Form 8-K/A filed on August 13, 2013).
21Subsidiaries of the Company (filed herewith).
23.1Consent of Dov Weinstein & Co. C.P.A. (Isr) (incorporated by reference to Exhibit 23.1 of the Form 10-K filed on May 13, 2013).
23.2Consent of Yarel + Partners, CPA (incorporated by reference to Exhibit 23.2 of the Form 10-K filed on May 13, 2013).
31.1Rule 13a-14(a)/15d-14(a) Certification of Sam Shlomo Elimelech (filed herewith).
31.2Rule 13a-14(a)/15d-14(a) Certification of Gai Mar-Chaim (filed herewith).
32Section 1350 Certification of Sam Shlomo Elimelech and Gai Mar-Chaim (filed herewith).