NOTE

1:- GENERAL

Medgenics, Inc. (the "Company") was incorporated in January 2000 in Delaware. The Company has a wholly-owned subsidiary, Medgenics Medical Israel Ltd. (the "Subsidiary"), which was incorporated in Israel in March 2000. The Company and the Subsidiary are engaged in the research and development of products in the field of biotechnology and associated medical equipment.

The Company's common stock is traded on the NYSE MKT.

As reflected in the accompanying financial statements, the Company incurred a loss for the nine month period ended September 30, 2015 of $31,529 and had a negative cash flow from operating activities of $16,878 during the nine month period ended September 30, 2015. The accumulated deficit as of September 30, 2015 is $131,667. The Company and the Subsidiary have not yet generated revenues from product sale. Management's plans also include seeking additional investments and commercial agreements to continue the operations of the Company and the Subsidiary.

In September 2015, the Company acquired neuroFix, LLC, a Delaware limited liability company (“neuroFix”). As a result of neuroFix lacking outputs necessary to be considered a business as that term is defined in ASC 805 - Business Combination, the acquisition was determined not to be a business since no significant processes were acquired. Therefore, the transaction was treated as an asset acquisition. We determined that the acquired assets can only be economically used for the specific and intended purpose and have no alternative future use after taking into consideration that further research and development, regulatory marketing approval efforts will be required in order to reach technological feasibility. Accordingly, the entire initial purchase consideration of $8,170 thousand was immediately expensed to non-recurring R&D expenses.