United States
Securities And Exchange Commission
Washington, D.C. 20549
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Form 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report: July 8, 2004
Golden Hand Resources, Inc.
(Exact name of registrant as specified in its charter)
Washington 333-61610 91206105
(State or other jurisdiction of (Commission file (I.R.S. Employer
incorporation or organization) number) Identification No.)
36 Derech Bait Lechem
Jerusalem, Israel
011-972-6737445
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
ITEM 5. OTHER INFORMATION
RESEARCH AND LICENSE AGREEMENT
On July 8, 2004, we entered into a Research and License Agreement ("Agreeement"
or "Research and License Agreement") with Ramot at Tel Aviv University Ltd., a
company formed under the laws of Israel. Ramot is the technology licensing
company of Tel Aviv University Ltd., having a place of business at Tel Aviv
University in Ramat-Aviv, Tel Aviv 61392, Israel. Under the terms of this
Agreement, Ramot granted to us an exclusive license to (a) certain stem cell
technology developed at the Felsenstein Medical Research Center of Tel Aviv
University and related patent applications, (b) the results of further research
to be performed at Tel Aviv University relating to this technology under the
supervision of Professor Eldad Melamed and Dr. Daniel Offen, the lead inventors,
and (c) intellectual property developed by Prof. Melamed or Dr. Offen in the
performance of consulting services for us.
The term of this Agreement, unless earlier terminated as provided in the
Agreement, will continue in full force and effect on a product-by-product and
country-by-country basis until the expiration of all payment obligations
pursuant to the Agreement. Ramot may terminate the Research and License
Agreement if: (a) we fail to reach certain development milestones as set out in
the Research and License Agreement; (b) we do not raise at least $750,000 of
investment capital within six months from the date of execution of the Research
and License Agreement; or (c) we otherwise materially breach the agreement.
According to the terms of the Research and License Agreement, we agreed to fund
further research relating to the licensed technology in an amount of $570,000
per year for an initial period of two years, and for an additional two-year
period if certain research milestones are met.
In consideration for the license, we agreed to pay Ramot:
- an up front license fee payment of $100,000;
- an amount equal to 5% of all Net Sales of Products as those terms
are defined in the Research and License Agreement ; and
- an amount equal to all 30% of all Sublicense Receipts as such term
is defined in the Research and License Agreement.
In addition, we agreed to issue to Ramot or its designees, upon the completion
of an investment in our company from investors of an aggregate of $750,000,
warrants to purchase a number of shares of our common stock equal to 29% of our
issued and outstanding shares immediately following such investment. Such
warrants shall be exercisable for a period of ten years beginning on the first
anniversary of the Research and License Agreement at an exercise price of $0.01
per share. The other terms of the warrants shall be negotiated by the parties in
good faith and shall include among other things: (i) provisions for cashless
exercise; (ii) provisions requiring us to register the shares underlying the
warrants (whether by demand, piggy back registration or otherwise) by no later
than twenty-one (21) months following the execution of the Research and License
Agreement with the effectiveness of such registration being maintained for the
full term of the warrants; and (iii) provisions requiring us to indemnify the
warrant holders for misstatements in our filings, if any, and to obtain
insurance policies to cover these indemnification obligations.
Simultaneously with the execution of the Research and License Agreement with
Ramot, we entered into individual consulting agreements with Professor Melamed
and Professor Ofen. We have agreed to pay each of Prof. Melamed and Dr. Ofen
during the consulting term, which shall be equal to the term of our Research and
License Agreement with Ramot, a fee of $72,000 (seventy-two thousand U.S.
Dollars) per annum. In addition, we agreed to issue each of Prof. Melamed and
Dr. Offen, upon the completion of an investment in our company of an aggregate
of $750,000 by investors, warrants to purchase a number of shares of our common
stock equal to 3% of our issued and outstanding shares immediately following
such investment on the same terms as the warrants to be issued to Ramot, or its
designees. According to each of the consulting agreements, all intellectual
property developed by Prof. Melamed or Dr. Offen in the performance of services
under the consulting agreement will be owned by Ramot and licensed to us under
the Research and License Agreement.
The foregoing descriptions of the Research and License Agreement and the
consulting agreements with Prof. Melamed and Dr. Offen are qualified in their
entirety by reference to these agreements, copies of which have been filed as
Exhibits to this Current Report on Form 8-K.
INTELLECTUAL PROPERTY
We do not own any patents or patent applications. Our exclusive license from
Ramot includes a license under a PCT application (and the Israeli patent filed
in November 2002 from which it claims priority) relating to methods, nucleic
acid constructs and cells for treating neurodegenerative disorders and to
foreign counterparts which may be filed in the future.
PLAN OF OPERATION
The Research and License Agreement with Ramot grants us a license under certain
stem cell technology developed by Professor Eldad Melamed (MD), Dr. Daniel Offen
(PhD) and Yossef Levy (MSc) at the Felsenstein Medical Research Center of Tel
Aviv University, and provides us with a license to the results of research
relating to such technology conducted and to be funded by us in accordance with
a defined research plan and budget. It is intended that Prof. Melamed's and Dr.
Offen's team would continue the research of applications of adult stem cell
transplantation for neurodegenerative diseases with an initial focus on
treatment for Parkinson's Disease. We believe, although we cannot provide
assurances, that this technology has the potential to provide an alternative to
current therapies for a number of unmet medical needs in large markets.
Parkinson's disease (PD) is a chronic, progressive neurodegenerative disorder,
affecting certain nerve cells in the brain that produce dopamine. Dopamine is a
chemical messenger (neurotransmitter) in a part of the brain that directs and
controls movement. In PD, these dopamine-producing nerve cells break down,
causing dopamine levels to drop and brain signals that direct movement to become
abnormal. The cause of the disease is unknown.
The classic symptoms of Parkinson's disease are shaking (tremor), stiff muscles
(rigidity) and slow movement. A person with fully developed PD may also have a
stooped posture, a blank stare or fixed facial expression, speech problems and
difficulties with balance or walking.
Our approach is intended to focus on the processing of human mesenchymal stem
cells, present in adult marrow, which are capable of self-renewal, as well as
differentiation into many mesenchymal-derived tissues. Our aim is to "repair"
damaged cells and diseased tissue by augmentation with healthy cells provided by
stem cell transplants.
COMPETITION
Several other companies or groups are known to be working in the stem cell area,
with a view to addressing PD and other neurodegenerative diseases. Our
competitors are companies which have longer operating histories, and have
substantially greater financial, development and marketing resources than we do.
LEGAL PROCEEDINGS
From time to time, we may become involved in various lawsuits and legal
proceedings which arise in the ordinary course of business. Litigation is
subject to inherent uncertainties, and an adverse result in these or other
matters may arise from time to time that may harm our business. We are currently
not aware of nor do we have any knowledge of any such legal proceedings or
claims that we believe will have, individually or in the aggregate, a material
adverse affect on our business, financial condition or operating results.
EMPLOYEES
As of July 7, 2004, we currently only have two executive officers, Ms. Arbel and
Mr. Frankenberger, and no day to day employees. We are currently managed by Ms.
Irit Arbel our President. We currently use consultants, attorneys and
accountants as necessary. As we progress in our relationship with Ramot, we may
engage additional employees, researchers and/or scientific directors.
Facilities
Our address is 36 Derech Bait Lechem, Jerusalem, Israel. We are provided with
such space at no charge from one of our current shareholders. We intend to lease
new office space in the United States and/or in Israel in the near future.
Recent Activities
In addition to the signing of the Research and License Agreement, we have
recently completed a private placement for the sale of 10,210,000 shares of our
common stock in consideration for the amount of $102,100. Such shares were sold
pursuant to Regulation D, Rule 506 and/or Section 4(2) of the Securities Act.
RISK FACTORS
This investment has a high degree of risk. Before you invest you should
carefully consider the risks and uncertainties described below and the other
information in this prospectus. If any of the following risks actually occur,
our business, operating results and financial condition could be harmed and the
value of our stock could go down. This means you could lose all or a part of
your investment.
OUR COMPANY HAS A HISTORY OF LOSSES AND EXPECT TO INCUR LOSSES FOR THE
FORESEEABLE FUTURE.
We are start up company. As a result, our business model is still in an evolving
stage. At March 31, 2004, we had $4,759 in total current assets and $47,667 in
current liabilities. Revenues were $0 for the year ended March 31, 2004 compared
with $82,889 for the same period last year. Since we have only recently
commenced operations in the stem cell research arena, we do not have the benefit
of the many years of experience that some other companies have and can use to
modify their business plans and optimize their business strategies. In addition,
as we are a development stage company, we do not expect to generate revenues in
the near future.
OUR BUSINESS IN THE FORESEEABLE FUTURE WILL BE BASED ON TECHNOLOGY LICENSED FROM
RAMOT AND IF THIS LICENSE WERE TO BE TERMINATED FOR ANY REASON, INCLUDING
FAILURE TO PAY THE REQUIRED RESEARCH FUNDING OR ROYALTIES, OUR RESULTS OF
OPERATIONS MAY BE SEVERELY IMPACTED AND WE MAY BE FORCED TO CEASE OUR
OPERATIONS.
Within 45 days of the effectiveness of the Research and License Agreement, and
up front license fee payment of $100,000 and an amount equal to 5% of all our
net sales. Additionally, Ramot is entitled to terminate the Research and License
Agreement in the event that we do not raise at least $750,000 of investment
capital within six months from the date of execution of the Research and License
Agreement. We also agreed to fund further research relating to the licensed
technology in an amount of $570,000 per year for an initial period of two years,
and for an additional two-year period if certain research milestones are met. If
we breach the agreement and Ramot elects to terminate our license we may be
forced to cease operations or explore the development of a new business.
IN ORDER TO EXECUTE OUR BUSINESS PLAN, WE WILL NEED TO RAISE ADDITIONAL CAPITAL.
IF WE ARE UNABLE TO RAISE ADDITIONAL CAPITAL, WE WILL NOT BE ABLE TO ACHIEVE OUR
BUSINESS PLAN AND YOU COULD LOSE YOUR INVESTMENT.
We need to raise additional funds through public or private debt or equity
financings to fully execute our business plan. Any additional capital raised
through the sale of equity may dilute your ownership interest. We may not be
able to raise additional funds on favorable terms, or at all. If we are unable
to obtain additional funds, we will be unable to execute our business plan and
you could lose your investment.
WE DEPEND UPON KEY PERSONNEL, NEED ADDITIONAL PERSONNEL AND IF WE ARE UNABLE TO
MAINTAIN OUR CURRENT PERSONNEL OR OBTAIN NEW PERSONNEL OUR RESULTS OF OPERATIONS
WILL BE NEGATIVELY IMPACTED
Our success depends on services of our consultants, Prof. Melamed and Dr. Offen.
The loss of either of these individuals could have a material and adverse effect
on our business operations. Additionally, the success of our company will
largely depend upon our ability to successfully attract and maintain competent
and qualified key management and scientific personnel. As with any startup
company, there can be no guaranty that we will be able to attract such
individuals or that the presence of such individuals will necessarily translate
into profitability for our company. Our inability to attract and retain key
personnel may materially and adversely affect our business operations.
ENTRY INTO CLINICAL TRIALS WITH ONE OR MORE PRODUCT CANDIDATES MAY NOT RESULT IN
ANY COMMERCIALLY VIABLE PRODUCTS.
We may never generate revenues from product sales because of a variety of risks
inherent in our business, including the following risks:
o clinical trials may not demonstrate the safety and efficacy of proposed
product candidates;
o completion of clinical trials may be delayed, or costs of clinical trials may
exceed anticipated amounts;
o we may not be able to obtain regulatory approval of our products, or may
experience delays in obtaining such approvals;
o others may have proprietary rights which prevent us from marketing our
products; and
WE HAVE A LIMITED OPERATING HISTORY WHICH WILL LIMIT YOUR ABILITY TO EVALUATE
OUR OPERATIONS AND PROSPECTS.
We were incorporated under the laws of the State of Washington on September 22,
2000, but only recently changed our business model to focus on stem cell
research in connection with the signing of the Research and License Agreement
with Ramot. Due to our limited operating history in the stem cell research
arena, our ability to operate successfully is materially uncertain and our
operations are subject to all risks inherent in a developing business
enterprise. We have a limited operating history upon which you may evaluate our
operations and prospects. Our limited operating history makes it difficult to
evaluate our stem cell technology and research, as well as commercial viability,
and market acceptance of our potential products. Our potential success must be
evaluated in light of the problems, expenses and difficulties frequently
encountered by new businesses in general and bio-technology businesses
specifically. Our stem cell technology is in its early development stages. It is
a new approach that has never proven to work in human testing.
OUR BUSINESS MODEL IS NOT PROVEN AND MAY NOT RESULT IN THE GENERATION OF A NET
PROFIT OR REVENUES
To date, we have not generated revenue nor have we produced marketable products
from our relationship with Ramot. Although we believe there will be a demand for
the products we intend to develop, there can be no assurance that the medical
community and/or its patients will accept our products. There can be no
assurance that the implementation of our overall business plan developed by
management will result in sales or, that if it does result in sales, that such
sales will necessarily translate into profitability. If we do not reach a
profitable status, we may be forced to cease doing business.
OUR ABILITY TO COMMERCIALIZE THE PRODUCTS WE INTEND TO DEVELOP WILL DEPEND UPON
OUR ABILITY TO PROVE THE EFFICACY AND SAFETY OF THESE PRODUCTS ACCORDING TO
GOVERNMENT REGULATIONS
Our present and proposed activities are subject to extensive and rigorous
regulation by governmental authorities in the United States and other countries.
To clinically test, produce and market our proposed future products for human
use, we must satisfy mandatory procedural and safety and efficacy requirements
established by the FDA and comparable state and foreign regulatory agencies.
Typically, such rules require that products be approved by the government agency
as safe and effective for their intended use prior to being marketed. The
approval process is expensive, time consuming and subject to unanticipated
delays. Our product candidates may not be approved. In addition, our product
approvals could be withdrawn for failure to comply with regulatory standards or
due to unforeseen problems after the product's marketing approval.
Testing is necessary to determine safety and efficacy before a submission may be
filed with the FDA to obtain authorization to market regulated products. In
addition, the FDA imposes various requirements on manufacturers and sellers of
products under its jurisdiction, such as labeling, Good Manufacturing Practices,
record keeping and reporting requirements. The FDA also may require
post-marketing testing and surveillance programs to monitor a product's effects.
Furthermore, changes in existing regulations or the adoption of new regulations
could prevent us from obtaining, or affect the timing of, future regulatory
approvals or could negatively affect the marketing of our existing products.
We will not be able to commercialize our products as planned and our operating
results will be hurt if any of the following occur:
o the regulatory agencies find our testing protocols to be inadequate;
o the appropriate authorizations are not granted on a timely basis, or
at all;
o the process to obtain authorization takes longer than expected or we
have insufficient funds to pursue such approvals;
o we lose previously-received authorizations; or
o we do not comply with regulatory requirements.
Medical and biopharmaceutical research and development involves the controlled
use of hazardous materials, such as radioactive compounds and chemical solvents.
We are subject to federal, state and local laws and regulations governing the
use, manufacture, storage, handling and disposal of such materials and waste
products. In addition, we handle and dispose of human tissue. Although we
believe that our safety procedures for handling these materials are adequate, if
accidental contamination or injury were to occur, we could be liable for
damages.
IF RAMOT IS UNABLE TO OBTAIN PATENTS ON THE PATENT APPLICATIONS AND TECHNOLOGY
EXCLUSIVELY LICENSED TO US OR IF PATENTS ARE OBTAINED BUT DO NOT PROVIDE
MEANINGFUL PROTECTION, WE MAY NOT BE ABLE TO SUCCESSFULLY MARKET OUR PROPOSED
PRODUCTS.
We rely upon the patent application as filed by Ramot with the Israeli Patent
Office and the license granted to us by Ramot under the Research and License
Agreement. We have agreed with Ramot in the Research and License Agreement to
seek comprehensive patent protection for all inventions licensed to us under the
Research and License Agreement. However, we cannot be sure that any patents will
be issued to Ramot as a result of its domestic or future foreign patent
applications or that any issued patents will withstand challenges by others.
We also rely upon unpatented proprietary technology, know-how and trade secrets
and seek to protect them through confidentiality agreements with employees,
consultants and advisors. If these confidentiality agreements are breached, we
may not have adequate remedies for the breach. In addition, others may
independently develop or otherwise acquire substantially the same proprietary
technology as our technology and trade secrets.
WE HAVE ENGAGED A NUMBER OF ACADEMIC CONSULTANTS AND, AS A RESULT, WE MAY NOT BE
ABLE TO PROTECT THE CONFIDENTIALITY OF OUR TECHNOLOGY, WHICH, IF DISSEMINATED,
COULD NEGATIVELY IMPACT OUR RESULTS OF OPERATIONS
We have relationships with a number of academic consultants who are not employed
by us. Accordingly, we have limited control over their activities and can expect
only limited amounts of their time to be dedicated to our activities. These
persons may have consulting, employment or advisory arrangements with other
entities that may conflict with or compete with their obligations to us. Our
consultants typically sign agreements that provide for confidentiality of our
proprietary information and results of studies. However, in connection with
every relationship, we may not be able to maintain the confidentiality of our
technology, the dissemination of which could hurt our competitive position and
results of operations. To the extent that our scientific consultants develop
inventions or processes independently that may be applicable to our proposed
products, disputes may arise as to the ownership of the proprietary rights to
such information, and we may not win those disputes.
COMPETITION IN OUR INDUSTRY MAY NEGATIVELY IMPACT OUR RESULTS FROM OPERATIONS
There are companies within the medical community that are researching procedures
and medication to cure or slow the effects of Parkinson's Disease. These
companies are developing traditional chemical compounds, new biological drugs,
cloned human proteins and other treatments which are likely to impact the
markets which we intend to target.
In addition to the foregoing, we face the threat that large and established
companies in the medical industry may enter the market at any time. These
companies may consist of substantially larger companies with greater financial,
technical, engineering, personnel and marketing resources, longer operating
histories, greater name recognition and larger customer bases than we will have.
We also may compete with smaller, emerging companies. These companies may have
larger, more established customer bases and other competitive advantages.
Competition from existing or new competitors could substantially reduce our
revenues or cause us to cease our operations in this field.
YOU MAY EXPERIENCE DIFFICULTIES IN ATTEMPTING TO ENFORCE LIABILITIES BASED UPON
U.S. FEDERAL SECURITIES LAWS AGAINST US AND OUR NON-U.S. RESIDENT DIRECTORS AND
OFFICERS.
Our operations are located in Israel and our principal assets are located
outside the United States. Our President and one of our directors is a foreign
citizen and does not reside in the United States. It may be difficult for courts
in the United States to obtain jurisdiction over these foreign assets or persons
and as a result, it may be difficult or impossible for you to enforce judgments
rendered against us, them or our or their directors or executive officers in
United States courts. In addition, the courts in the countries in which we and
our subsidiaries are organized or where we and our subsidiaries assets are
located may not permit lawsuits of the enforcement of judgments arising out of
the United States and state securities or similar laws. Thus, should any
situation arise in the future in which you have a cause of action against these
persons or entities, you are at greater risk in investing in our company rather
than a domestic company because of greater potential difficulties in bring
lawsuits or, if successful, collecting judgments against these persons or
entities as opposed to domestic persons or entities.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
10.1 Research and License Agreement between the Company and Ramot
10.2 Consulting Agreement between the Company and Professor Melamed
10.3 Consulting Agreement between the Company and Professor Ofen
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Golden Hand Resources, Inc.
Date: July 14, 2004
/s/ Irit Arbel
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President