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F-1
BIOLINERX LTD. filed this Form F-1 on 10/02/2012
Entire Document
 
F - 49

 
 
BioLineRx Ltd.
 
NOTES TO THE FINANCIAL STATEMENTS
 
NOTE 12 – COMMITMENTS AND CONTINGENT LIABILITIES (cont.)

 
a.
Commitments (cont.)

 
5)
Early Development Program (“EDP”) agreement

On the signature date of an investment agreement with Pan Atlantic Bank and Trust Limited (“Pan Atlantic”) in 2007, the Company also entered into an agreement with Pan Atlantic for the funding of an early development program (the “EDP Agreement”). According to the EDP Agreement, Pan Atlantic undertook to provide grants for the promotion of drug-development projects in the preliminary stages of research in an aggregate amount of up to $5,000,000, in semi-annual “calls” of up to $625,000 each, through April 2011. In parallel, for every dollar of EDP project funding provided by Pan Atlantic, the Company committed to provide twenty cents of funding (i.e., a funding ratio of 5:1). Pan Atlantic undertakings under the EDP agreement are not subject to Pan Atlantic being a lender to, or a shareholder of, the Company.

In consideration for the EDP funding commitment, BioLineRx granted to Pan Atlantic the right to participate in a future public offering of BioLineRx outside of Israel, at the public offering price, in an amount of up to $5,000,000.
 
During 2009, 2010 and 2011, Pan Atlantic provided funding to the Company of NIS 4,881,000, NIS 3,877,000 and NIS 4,455,000, respectively, under the EDP Agreement. The amounts recognized as a reduction of research and development expenses in 2009, 2010 and 2011 were NIS 3,297,000, NIS 2,997,000 and NIS 3,589,000, respectively.

 
b.
Contingent liabilities

Guarantees and liens:

 
1)
As part of the Company’s obligations under the Incubator agreement and to secure its liabilities to the OCS, the Company originally provided a NIS 8,100,000 bank guarantee (linked to the CPI) in favor of Israel’s Ministry of Finance.

The guarantee is valid through March 2013. According to the Incubator agreement, after the two year anniversary of the initial date of the Incubator agreement, the amount of the guarantee has been reduced every year by half of the amount of the Incubator’s reported approved expenses. As of December 31, 2011, the balance of the guarantee amounted to approximately NIS 2,700,000.

To secure the above guarantee, the Company has pledged to a bank a short-term deposit in the amount of NIS 2,125,000, which is presented under non-current assets.

 
2)
To secure the Company’s liability to the lessor of its premises, the Company has pledged several dollar-denominated bank deposits in the amount of $163,000 (NIS 621,000), which are presented under non-current assets.