☐ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended December 31, |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
Sol-Gel Technologies Ltd. | ||
(Exact name of Registrant as specified in its charter) | ||
N/A | ||
(Translation of Registrant’s name into English) | ||
Israel | ||
(Jurisdiction of incorporation or organization) |
7 Golda Meir St., Weizmann Science Park, Ness Ziona, 7403650, Israel |
(Address of principal executive offices) |
Gilad Mamlok, Chief Financial Officer |
7 Golda Meir St., Weizmann Science Park, Ness Ziona, 7403650, Israel |
Tel: 972-8-9313429; Fax: 972-153-523044444 |
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Ordinary Shares, par value NIS 0.1 per share | SLGL | The Nasdaq Stock Market LLC |
None |
(Title of Class) |
None |
(Title of Class) |
Large Accelerated filer ☐ | Accelerated filer ☐ | Non-accelerated filer Emerging growth company |
Year Ended December 31, | ||||||||||||||||||||
2016 | 2017 | 2018 | 2019 | 2020 | ||||||||||||||||
(in thousands, except share and per share data) | ||||||||||||||||||||
Statement of Operations Data: | ||||||||||||||||||||
Collaboration Revenues | $ | - | $ | 174 | $ | 129 | $ | 22,904 | $ | 8,771 | ||||||||||
Research and development expenses | 17,023 | 25,805 | 28,146 | 40,578 | 27,913 | |||||||||||||||
General and administrative expenses | 3,773 | 6,002 | 5,504 | 8,276 | 11,091 | |||||||||||||||
Total operating loss | 20,756 | 31,633 | 33,521 | 25,950 | 30,233 | |||||||||||||||
Financial expenses (income), net | 15 | (65 | ) | (1,318 | ) | (1,374 | ) | (943 | ) | |||||||||||
Loss before income taxes | 20,771 | 31,568 | 32,203 | 24,576 | 29,290 | |||||||||||||||
Income taxes | 33 | |||||||||||||||||||
Loss for the year | $ | 20,771 | $ | 31,568 | $ | 32,203 | $ | 24,609 | $ | 29,290 | ||||||||||
Basic and diluted loss per ordinary share* | $ | 3.30 | $ | 5.02 | $ | 1.80 | $ | 1.26 | $ | 1.3 | ||||||||||
Weighted average number of ordinary shares outstanding – basic and diluted* | 3,494,579 | 6,290,244 | 17,867,589 | 19,534,562 | 22,574,688 |
Year Ended December 31, | ||||||||||||
2015 | 2016 | 2017 | ||||||||||
(in thousands, except share and per share data) | ||||||||||||
Statement of Operations Data: | ||||||||||||
Revenues | $ | - | $ | - | $ | 174 | ||||||
Research and development expenses | 7,184 | 17,023 | 25,805 | |||||||||
General and administrative expenses | 2,463 | 3,733 | 6,002 | |||||||||
Total operating loss | 9,647 | 20,756 | 31,633 | |||||||||
Financial expenses, net | 13 | 15 | (65 | ) | ||||||||
Loss for the year | $ | 9,660 | $ | 20,771 | $ | 31,568 | ||||||
Basic and diluted loss per ordinary share | $ | 1.53 | $ | 3.30 | $ | 5.02 | ||||||
Weighted average number of ordinary shares outstanding – basic and diluted | 6,290,242 | 6,290,242 | 6,290,244 |
Year Ended December 31, | As of December 31, | |||||||||||||||||||||||||||||||
2015 | 2016 | 2017 | 2016 | 2017 | 2018 | 2019 | 2020 | |||||||||||||||||||||||||
Balance Sheet Data: | (in thousands) | (in thousands) | ||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 5,895 | $ | 7,001 | $ | 5,024 | $ | 7,001 | $ | 5,024 | $ | 5,325 | $ | 9,412 | $ | 7,122 | ||||||||||||||||
Total Assets | 8,244 | 10,985 | 15,315 | 10,985 | 15,315 | 69,682 | 61,301 | 59,161 | ||||||||||||||||||||||||
Total liabilities | 19,762 | 42,322 | 68,014 | 42,322 | 68,014 | 5,773 | 8,836 | 8,312 | ||||||||||||||||||||||||
Accumulated deficit | (42,922 | ) | (63,693 | ) | (95,261 | ) | (63,693 | ) | (95,261 | ) | (127,464 | ) | (152,073 | ) | (181,363 | ) | ||||||||||||||||
Total capital deficiency | (11,518 | ) | (31,337 | ) | (52,699 | ) | ||||||||||||||||||||||||||
Total shareholders’ equity (capital deficiency) | (31,337 | ) | (52,699 | ) | 63,909 | 52,465 | 50,849 |
• | the federal Physician Payment Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the government information related to certain payments or other “transfers of value” made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other health care providers beginning in 2022, and teaching hospitals, and requires applicable manufacturers and group purchasing organizations to report annually to the government ownership and investment interests held by the physicians described above and their immediate family members and payments or other “transfers of value” to such physician owners. Covered manufacturers are required to submit reports to the government by the 90th day of each calendar year; |
• | Twyneo®, a novel, once-daily, non-antibiotic topical cream, which we are developing for the treatment of acne, containing a fixed-dose combination of encapsulated benzoyl peroxide, or E-BPO, and encapsulated tretinoin. Acne is one of the three most prevalent skin diseases in the world and is the most commonly treated skin disease in the United States. According to the American Academy of Dermatology, acne affects approximately 40 to 50 million people in the United States, of which approximately 10% are treated with prescription medications. In July 2017, we reported positive top-line results from a double-blind, dose-ranging active- and placebo-controlled, six-arm, multi-center Phase II clinical trial of Twyneo® in the United States in 726 subjects, 128 of which subjects across six treatment groups did not complete the study. The clinical trial evaluated the efficacy, tolerability and safety of two Twyneo® concentrations, Twyneo® Low and Twyneo® High, each containing a lower or higher concentration, respectively, of encapsulated tretinoin and an identical concentration of encapsulated benzoyl peroxide. Tretinoin and benzoyl peroxide, the two active components in Twyneo®, are both widely-used therapies for the treatment of acne that historically have not been conveniently co-administered due to stability concerns. The trial also evaluated the contribution of encapsulated tretinoin and encapsulated benzoyl peroxide, in the same concentrations as those in the respective Twyneo® treatment groups, to the efficacy of Twyneo® High and Twyneo® Low. In this trial, Twyneo® showed statistically significant improvements in all pre-defined co-primary and secondary efficacy endpoints, as compared to vehicle. In addition, Twyneo® was well tolerated with no treatment-related serious adverse events. Based on the efficacy data we observed in the Phase II trial, we believe Twyneo®, if approved, has the potential to become a preferred treatment for acne. On December 30, 2019, we announced top-line results from two pivotal Phase 3 clinical trials evaluating Twyneo® for the treatment of acne. Twyneo® met all co-primary endpoints in both Phase 3 trials. The Phase 3 program enrolled an aggregate of 858 patients aged nine and older in two multicenter, randomized, double-blind, parallel group, vehicle-controlled trials at 63 sites across the United States. Twyneo® demonstrated statistically significant improvement in each of the co-primary endpoints of (1) the proportion of patients who succeeded in achieving at least a two grade reduction from baseline and Clear (grade 0) or Almost Clear (grade 1) at Week 12 on a 5-point Investigator Global Assessment (IGA) scale, (2) an absolute change from baseline in inflammatory lesion count at Week 12, and (3) and an absolute change from baseline in non-inflammatory lesion count at Week 12. In addition, Twyneo® was found to be well-tolerated. Our NDA for Twyneo® has been accepted for filing by the FDA, which assigned a PDUFA goal date of August 1, 2021. |
• | Epsolay®, a topical cream containing 5% encapsulated benzoyl peroxide, which we are developing for the treatment of papulopustular (subtype II) rosacea. Rosacea is a chronic skin disease characterized by facial redness, inflammatory lesions, burning and stinging. According to the U.S. National Rosacea Society, approximately 16 million people in the United States are affected by rosacea. According to a study we commissioned, approximately 4.8 million people in the United States experience subtype II symptoms. Subtype II rosacea is characterized by small, dome-shaped erythematous papules, tiny surmounting pustules on the central aspects of the face, solid facial erythema and edema, and thickening/overgrowth of skin. Subtype II rosacea resembles acne, except that comedowns are absent, and patients may report associated burning and stinging sensations. We evaluated Epsolay® in a double blind, randomized, dose-ranging Phase II clinical trial involving 92 adult subjects at ten centers in the United States. In this trial, Epsolay® showed statistically significant improvements in the Investigator Global Assessment, or IGA, pre-defined co-primary efficacy endpoint and in the percent change in inflammatory lesion count at week 12, as compared to vehicle. Epsolay® was also well tolerated in this trial. Current topical therapies for subtype II rosacea are limited due to tolerability concerns. For example, BPO, a common therapy for acne, is not used for the treatment of subtype II rosacea due to side effects. As encapsulated BPO, Epsolay® is designed to redefine the standard of care for the treatment of subtype II rosacea. If approved, we expect Epsolay® to be the first product containing BPO that is marketed for the treatment of subtype II rosacea. On July 8, 2019, we announced positive top-line results from our Phase 3 program evaluating Epsolay®. The program enrolled 733 patients aged 18 and older in two identical, double-blind, vehicle-controlled Phase 3 clinical trials at 54 sites across the United States. Epsolay® demonstrated statistically significant improvement in both co-primary endpoints of (1) the number of patients achieving “clear” or “almost clear” in the Investigator Global Assessment (IGA) relative to baseline at week 12 and (2) absolute mean reduction from baseline in inflammatory lesion count at week 12. In an additional analysis, Epsolay® demonstrated rapid efficacy, achieving statistically significant improvements on both co-primary endpoints compared with vehicle as early as Week 2. In addition, Epsolay® was found to be well-tolerated. On February 12, 2020, we announced positive topline results from our open-label, long-term safety study, evaluating Epsolay® for a treatment duration up to 52 weeks. Our NDA for Epsolay® has been accepted for filing by the FDA, which assigned a PDUFA goal date of April 26, 2021. |
• | We designed Twyneo® to protect tretinoin from oxidative decomposition, which occurs when it is combined with benzoyl peroxide, with the goal of enhancing stability without reducing efficacy. We believe this could allow for a suitable clinical and commercial shelf life. |
• | The silica shell creates a barrier between the two drug substances and the skin. As a result, we believe Twyneo® can reduce irritation typically associated with topical application of benzoyl peroxide and tretinoin, leading to greater tolerability to acne-affected skin. |
VERED Phase II Efficacy Results at Week 12 (ITT) | Vehicle (N=30) | VERED 1% (N=32) | VERED 5% (N=30) | |||||||||
Dichotomized IGA – Primary Success | ||||||||||||
Success | 6 (20.0 | )% | 12 (37.5 | )% | 16 (53.3 | )% | ||||||
Failure | 24 (80.0 | )% | 20 (62.5 | )% | 14 (46.7 | )% | ||||||
p-value relative to vehicle | 0.0836 | 0.0013 | ||||||||||
Inflammatory Lesion Count – Change from Baseline | ||||||||||||
Mean | (7.4 | ) | (21.6 | ) | (14.1 | ) | ||||||
Median | (10.0 | ) | (12.5 | ) | (15.0 | ) | ||||||
p-value relative to vehicle | 0.0276 | 0.0037 | ||||||||||
LOCF (last observation carried forward) used to impute mission observations | 0.0836 | 0.0013 |
For the Year Ended December 31, | ||||||||||||
2015 | 2016 | 2017 | ||||||||||
(in thousands) | ||||||||||||
Revenues | $ | - | $ | - | $ | 174 | ||||||
Research and development expenses | 7,184 | 17,023 | 25,805 | |||||||||
General and administrative expenses | 2,463 | 3,733 | 6,002 | |||||||||
Total operating loss | 9,647 | 20,756 | 31,633 | |||||||||
Financial expenses (income), net | 13 | 15 | (65 | ) | ||||||||
Loss for the period | $ | 9,660 | $ | 20,771 | $ | 31,568 |
Year ended December 31, | ||||||||||||
2018 | 2019 | 2020 | ||||||||||
(in thousands) | ||||||||||||
Collaboration Revenues | $ | 129 | $ | 22,904 | $ | 8,771 | ||||||
Research and development | 28,146 | 40,578 | 27,913 | |||||||||
General and administrative | 5,504 | 8,276 | 11,091 | |||||||||
Total operating loss | 33,521 | 25,950 | 30,233 | |||||||||
Financial income, net | (1.318 | ) | (1,374 | ) | 943 | |||||||
Loss before income taxes | 32,203 | 24,576 | 29,290 | |||||||||
Income taxes | 33 | |||||||||||
Loss for the year | $ | 32,203 | $ | 24,609 | $ | 29,290 |
Year Ended December 31, | ||||||||
2016 | 2017 | |||||||
(in thousands) | ||||||||
Payroll and related expenses | $ | 3,629 | $ | 6,133 | ||||
Clinical trial expenses | 9,686 | 12,768 | ||||||
Professional consulting and subcontracted work | 1,830 | 4,455 | ||||||
Other | 1,878 | 2,448 | ||||||
Total research and development expenses | $ | 17,023 | $ | 25,805 |
Year Ended December 31, | ||||||||
2019 | 2020 | |||||||
(in thousands) | ||||||||
Payroll and related expenses | $ | 6,001 | $ | 6,194 | ||||
Clinical trial expenses | 23,037 | 5,179 | ||||||
Professional consulting and subcontracted work | 7,425 | 12,855 | ||||||
Other | 4,115 | 3,685 | ||||||
Total research and development expenses | $ | 40,578 | $ | 27,913 |
Year Ended December 31, | ||||||||
2015 | 2016 | |||||||
(in thousands) | ||||||||
Payroll and related expenses | $ | 2,647 | $ | 3,629 | ||||
Clinical trial expenses | 517 | 9,686 | ||||||
Professional consulting and subcontracted work | 2,001 | 1,830 | ||||||
In-process research and development acquired | 431 | — | ||||||
Other | 1,588 | 1,878 | ||||||
Total research and development expenses | $ | 7,184 | $ | 17,023 |
For the Year Ended December 31, | ||||||||||||
2015 | 2016 | 2017 | ||||||||||
Value of one ordinary share | $6.31 | $11.99 | $20.47-$24.37 | |||||||||
Dividend yield | 0% | 0% | 0% | |||||||||
Expected volatility | 62.46% – 66.22% | 68.45% – 79.1% | 72.91% – 78.71% | |||||||||
Risk-free interest rate | 1.61% – 1.81% | 0.95% – 1.34% | 1.57% – 2.23% | |||||||||
Expected term | 5.5 – 7.5 years | 5 – 6.71 years | 5 – 7 years |
Date of grant | Number of shares subject to awards granted | Class of shares subject to the awards granted | Type of equity instrument awarded | Exercise price per share | Estimated fair value per ordinary share at grant date | |||||||||||||||
March 29, 2015 | 272,339 | Ordinary | options | $ | 1.59 | $ | 6.31 | |||||||||||||
April 12, 2015 | 39,854 | Ordinary | options | $ | 1.59 | $ | 6.31 | |||||||||||||
August 2, 2016 | 90,760 | Ordinary | options | $ | 1.59 | $ | 11.99 | |||||||||||||
February 12, 2017 | 53,831 | Ordinary | options | $ | 1.59 | $ | 20.47 | |||||||||||||
July 13, 2017 | 27,072 | Ordinary | options | $ | 1.59 | $ | 24.37 | |||||||||||||
July 13, 2017 | 380,646 | Ordinary | options | $ | 5.57 | $ | 24.37 | |||||||||||||
August 22, 2017 | 126,900 | Ordinary | options | $ | 5.57 | $ | 24.37 | |||||||||||||
October 1, 2017 | 1,800 | Ordinary | options | $ | 5.57 | $ | 24.37 |
Year Ended December 31, | ||||||||||||
2018 | 2019 | 2020 | ||||||||||
(in thousands) | ||||||||||||
Net cash used in operating activities | $ | (23,467 | ) | $ | (22,500 | ) | $ | (25,241 | ) | |||
Net cash provided by (used in) investing activities | (54,735 | ) | 16,024 | (2,694 | ) | |||||||
Net cash provided by financing activities | 78,819 | 10,613 | 26,457 | |||||||||
Increase (decrease) in cash and cash equivalents | $ | 617 | $ | 4,137 | $ | (1,478 | ) |
Year Ended December 31, | ||||||||||||
2015 | 2016 | 2017 | ||||||||||
(in thousands) | ||||||||||||
Net cash used in operating activities | $ | (8,044 | ) | $ | (18,495 | ) | $ | (24,089 | ) | |||
Net cash used in investing activities | (210 | ) | (391 | ) | (5,938 | ) | ||||||
Net cash from financing activities | 13,572 | 20,000 | 28,000 | |||||||||
Increase (decrease) in cash and cash equivalents | $ | 5,301 | $ | 1,106 | $ | (1,977 | ) |
Total | Less than 1 year | 1 – 3 years | 3 – 5 years | More than 5 years | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Operating lease obligations (1) | $ | 2,140 | $ | 778 | $ | 1,362 | - | - | ||||||||||||
Total | $ | 2,140 | $ | 778 | $ | 1,362 | - | - |
Total | Less than 1 year | 1 – 3 years | 3 – 5 years | More than 5 years | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Operating lease obligations (1) | $ | 1,437 | $ | 479 | $ | 958 | - | - | ||||||||||||
Total | $ | 1,437 | $ | 479 | $ | 958 | - | - |
(1) | Operating lease obligations consist of payments pursuant to several lease agreements that are scheduled to expire on December 31, |
Name | Age | Position | |||||
Moshe Arkin | Chairman of the Board of Directors | ||||||
Alon Seri-Levy | Chief Executive Officer and Director | ||||||
Gilad Mamlok | Chief Financial Officer | ||||||
Ofer Toledano | Vice President Research and Development | ||||||
Ofra Levy-Hacham | Vice President Clinical and Regulatory Affairs | ||||||
Karine Neimann | Vice President Projects and Planning, Chief Chemist | ||||||
Itzik Yosef | Vice President Operations | ||||||
Dov Zamir | Vice President Special Projects | ||||||
Vice President Quality | |||||||
John Vieira | 51 | U.S. Head of Commercialization | |||||
Itai Arkin | Director | ||||||
Shmuel Ben Zvi | Director | ||||||
Hani Lerman | Director | ||||||
Yaffa Krindel-Sieradzki | Director | ||||||
Jonathan B. Siegel | 47 | Director | |||||
Ran Gottfried | External Director | ||||||
Jerrold S. Gattegno | External Director |
Value of Equity | ||||||||||||||||||||||||||||||||||||||||
Base Salary or | Value of | Based | ||||||||||||||||||||||||||||||||||||||
Other | Social | Compensation | All Other | |||||||||||||||||||||||||||||||||||||
Name and Position of director or officer | Payment (1) | benefits (2) | Granted (3) | Compensation (4) | Total | Base Salary or Other Payment (1) | Value of Social Benefits (2) | Value of Equity Based Compensation Granted (3) | All Other Compensation (4) | Total | ||||||||||||||||||||||||||||||
(Amounts in U.S.$ dollars are based on 2017 monthly average representative U.S. dollar – NIS rate of exchange) | ||||||||||||||||||||||||||||||||||||||||
(Amounts in U.S. dollars are based on 2020 monthly average representative U.S. dollar – NIS rate of exchange) | (Amounts in U.S. dollars are based on 2020 monthly average representative U.S. dollar – NIS rate of exchange) | |||||||||||||||||||||||||||||||||||||||
Alon Seri-Levy / CEO | 223 | 47 | 468 | 346 | 1,084 | 314 | 61 | 239 | 22 | 636 | ||||||||||||||||||||||||||||||
Gilad Mamlok / CFO | 147 | 43 | 721 | 26 | 936 | 262 | 54 | 137 | 48 | 501 | ||||||||||||||||||||||||||||||
John Vieira / U.S. Head of Commercialization | 241 | 17 | 113 | 26 | 398 | |||||||||||||||||||||||||||||||||||
Ofer Toledano / VP R&D | 157 | 45 | 296 | 187 | 685 | 206 | 57 | 79 | 24 | 366 | ||||||||||||||||||||||||||||||
Haim Barsimantov / Former CTO | 133 | 34 | 291 | 203 | 661 | |||||||||||||||||||||||||||||||||||
Ofra Levy-Hacham / VP QA & RA | 120 | 37 | 233 | 91 | 481 | |||||||||||||||||||||||||||||||||||
Ofra Levy-Hacham / VP Clinical & RA | 152 | 45 | 63 | 21 | 280 |
(1) | “Base Salary or Other Payment” means the aggregate yearly gross monthly salaries or other payments with respect to the Company's Executive Officers and members of the board of directors for the year |
(2) | “Social Benefits” include payments to the National Insurance Institute, advanced education funds, managers’ insurance and pension funds; vacation pay; and recuperation pay as mandated by Israeli law. |
(3) | Consists of the fair value of the equity-based compensation granted during |
(4) | “All Other Compensation” includes, among other things, car-related expenses, communication expenses, basic health insurance, holiday presents, and 2018, 2019 and 2020 special bonuses |
(1) | to recommend to the board of directors the compensation policy for directors and officers, and to recommend to the board of directors once every three years whether the compensation policy that had been approved should be extended for a period of more than three years; |
(2) | to recommend to the board of directors updates to the compensation policy, from time to time, and examine its implementation; |
(3) | to decide whether to approve the terms of office and employment of directors and officers that require approval of the compensation committee; and |
(4) | to decide whether the compensation terms of the chief executive officer, which were determined pursuant to the compensation policy, will be exempted from approval by the shareholders because such approval would harm the ability to engage the chief executive officer. |
– | with the exception of office holders who report directly to the chief executive officer, determining the variable components on long-term performance basis and on measurable criteria; however, the company may determine that an immaterial part of the variable components of the compensation package of an office holder’s shall be awarded based on non-measurable criteria, if such amount is not higher than three monthly salaries per annum, while taking into account such office holder contribution to the company; |
– | the ratio between variable and fixed components, as well as the limit of the values of variable components at the time of their grant. |
As of December 31, | ||||||||||||||||||||||||
2015 | 2016 | 2017 | ||||||||||||||||||||||
Company | Company | Company | ||||||||||||||||||||||
Employees | Consultants | Employees | Consultants | Employees | Consultants | |||||||||||||||||||
Management and administration | 5 | 5 | 6 | |||||||||||||||||||||
Research and development | 35 | 1 | 33 | 1 | 43 | - |
As of December 31, | ||||||||||||||||||||||||
2018 | 2019 | 2020 | ||||||||||||||||||||||
Company | Company | Company | ||||||||||||||||||||||
Employees | Consultants | Employees | Consultants | Employees | Consultants | |||||||||||||||||||
Management | 8 | 9 | 9 | |||||||||||||||||||||
Research and development and other | 48 | 52 | 56 |
Shares Beneficially Owned | ||||||||
Name of Beneficial Owner | Number | Percentage | ||||||
5% or greater shareholders | ||||||||
M. Arkin Dermatology Ltd. (1) | 14,432,266 | 62.75 | % | |||||
The Phoenix Holding Ltd. (2) | 2,672,944 | 11.62 | % | |||||
Directors, director nominees and executive officers | ||||||||
Moshe Arkin (1) | 14,518,266 | 63.12 | % | |||||
Alon Seri-Levy (3) | 285,188 | 1.23 | % | |||||
Gilad Mamlok | * | * | ||||||
Ofer Toledano | * | * | ||||||
Ofra Levy-Hacham | * | * | ||||||
Karine Neimann | * | * | ||||||
Itzik Yosef | * | * | ||||||
Dubi Zamir | * | * | ||||||
Nissim Bilman | * | * | ||||||
John Vieira | * | * | ||||||
Itai Arkin | * | * | ||||||
Ran Gottfried | * | * | ||||||
Jerrold S. Gattegno | * | * | ||||||
Shmuel Ben Zvi | * | * | ||||||
Hani Lerman | * | * | ||||||
Yaffa Krindel Sieradzki | * | * | ||||||
Jonathan Siegel | * | * | ||||||
All directors, director nominees and executive officers as a group (17 persons) (1) | 15,292,379 | 64.49 | % |
Shares Beneficially Owned | ||||||||
Name of Beneficial Owner | Number | Percentage | ||||||
5% or greater shareholders | ||||||||
M.Arkin Dermatology Ltd. (1) | 13,613,936 | 71.95 | % | |||||
The Phoenix Holding Ltd. (2) | 1,009,504 | 5.33 | % | |||||
Directors, director nominees and executive officers | ||||||||
Moshe Arkin (1) | 13,613,936 | 71.95 | % | |||||
Alon Seri-Levy | * | * | ||||||
Gilad Mamlok | * | * | ||||||
Ofer Toledano | * | * | ||||||
Ofra Levy-Hacham | * | * | ||||||
Karine Neimann | * | * | ||||||
Itzik Yosef | * | * | ||||||
Dov Zamir | — | — | ||||||
Karin Baer | — | — | ||||||
Itai Arkin | — | — | ||||||
Ran Gottfried | — | — | ||||||
Jerrold S. Gattegno | — | — | ||||||
Shmuel Ben Zvi | — | — | ||||||
Hani Lerman | * | * | ||||||
Yaffa Krindel Sieradzki | — | — | ||||||
All directors, director nominees and executive officers as a group (15 persons) (1) | 14,623,440 | 77.28 | % |
* | Less than 1%. |
(1) | Based on the Schedule |
(2) | Based on the Schedule |
(3) | Consists of options to purchase 285,188 ordinary shares exercisable within 60 days of February 26, 2021. The |
U.S.$ | ||||||||
Price per Ordinary Share | ||||||||
Annual Data | High | Low | ||||||
2018 (until March 23, 2018) | 16.48 | 9.41 | ||||||
Quarterly Data | ||||||||
2018 | ||||||||
First quarter (until March 23, 2018) | 16.48 | 9.41 | ||||||
Most Recent Six Months Data | ||||||||
March 2018 (until March 23, 2018) | 12.20 | 9.83 | ||||||
February 2018 | 16.48 | 9.41 |
Tax Year | Development Region “A” | Other Areas within Israel | Development Region “A” | Other Areas within Israel | ||||||||||||
2011 – 2012 | 10 | % | 15 | % | 10 | % | 15 | % | ||||||||
2013 | 7 | % | 12.5 | % | 7 | % | 12.5 | % | ||||||||
2014 – 2016 | 9 | % | 16 | % | 9 | % | 16 | % | ||||||||
2017 and thereafter | 7.5 | % | 16 | % | 7.5 | % | 16 | % |
• | pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and asset dispositions; | ||
• | provide reasonable assurance that transactions are recorded as necessary to permit the preparation of our financial statements in accordance with generally accepted accounting principles; | ||
• | provide reasonable assurance that receipts and expenditures are made only in accordance with authorizations of our management and board of directors (as appropriate); and | ||
• | provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements. |
Year Ended December 31, | Year Ended December 31, | |||||||||||||||
Services Rendered | 2017 | 2016 | 2020 | 2019 | ||||||||||||
(U.S. dollars in thousands) | (U.S. dollars in thousands) | |||||||||||||||
Audit Fees (1) | 210 | 149 | 187 | 164 | ||||||||||||
Tax (2) | 12 | - | 29 | 37 | ||||||||||||
Total | 222 | 149 | 216 | 201 |
(1) | Audit Fees consist of professional services rendered in connection with the audit of our consolidated financial statements, review of our consolidated quarterly financial statements, issuance of comfort letters, consents and |
(2) | Tax fees relate to tax compliance, planning and advice. |
Exhibit Number | Exhibit Description | |
SOL-GEL TECHNOLOGIES LTD. | ||||
By: | /s/ Alon Seri-Levy | |||
Name: | Alon Seri-Levy | |||
Title: | Chief Executive Officer and Director | |||
By: | /s/ Gilad Mamlok | |||
Name: | Gilad Mamlok | |||
Title: | Chief Financial Officer |
Page | |
F-2 | |
CONSOLIDATED FINANCIAL STATEMENTS: | |
F-3 | |
F-4 | |
F-5 | |
F-6 | |
F-7 |
Tel-Aviv, Israel | /s/ Kesselman & Kesselman |
March | Certified Public Accountants (Isr.) |
A member firm of PricewaterhouseCoopers International Limited |
December 31 | ||||||||
2019 | 2020 | |||||||
Assets | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 9,412 | $ | 7,122 | ||||
Bank deposits | - | 21,400 | ||||||
Marketable securities | 40,966 | 21,652 | ||||||
Receivables from collaborative arrangements | 4,120 | 2,153 | ||||||
Prepaid expenses and other current assets | 1,293 | 1,074 | ||||||
TOTAL CURRENT ASSETS | 55,791 | 53,401 | ||||||
NON-CURRENT ASSETS: | ||||||||
Restricted long-term deposits and cash | 472 | 1,293 | ||||||
Property and equipment, net | 2,314 | 1,817 | ||||||
Operating lease right-of-use assets | 2,040 | 1,896 | ||||||
Funds in respect of employee rights upon retirement | 684 | 754 | ||||||
TOTAL NON-CURRENT ASSETS | 5,510 | 5,760 | ||||||
TOTAL ASSETS | $ | 61,301 | $ | 59,161 | ||||
Liabilities and shareholders' equity | ||||||||
CURRENT LIABILITIES: | ||||||||
Accounts payable | $ | 1,710 | $ | 1,203 | ||||
Other accounts payable | 4,123 | 4,088 | ||||||
Current maturities of operating leases | 672 | 673 | ||||||
TOTAL CURRENT LIABILITIES | 6,505 | 5,964 | ||||||
LONG-TERM LIABILITIES: | ||||||||
Operating leases liabilities | 1,373 | 1,299 | ||||||
Liability for employee rights upon retirement | 958 | 1,049 | ||||||
TOTAL LONG-TERM LIABILITIES | 2,331 | 2,348 | ||||||
COMMITMENTS | ||||||||
TOTAL LIABILITIES | 8,836 | 8,312 | ||||||
SHAREHOLDERS' EQUITY: | ||||||||
Ordinary shares, NIS 0.1 par value – authorized: 50,000,000 as of December 31, 2019 and 2020, respectively; issued and outstanding: 20,402,800 and 23,000,782 as of December 31, 2019 and December 31, 2020, respectively | 561 | 635 | ||||||
Additional paid-in capital | 203,977 | 231,577 | ||||||
Accumulated deficit | (152,073 | ) | (181,363 | ) | ||||
TOTAL SHAREHOLDERS' EQUITY | 52,465 | 50,849 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 61,301 | $ | 59,161 |
December 31 | ||||||||
2016 | 2017 | |||||||
Assets | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 7,001 | $ | 5,024 | ||||
Bank deposit | - | 4,000 | ||||||
Prepaid expenses and other current assets | 472 | 1,511 | ||||||
Advance payment | 823 | 13 | ||||||
TOTAL CURRENT ASSETS | 8,296 | 10,548 | ||||||
NON-CURRENT ASSETS: | ||||||||
Long term receivables | 1,190 | 1,653 | ||||||
Restricted long term deposits | 107 | 120 | ||||||
Property and equipment, net | 798 | 2,314 | ||||||
Funds in respect of employee rights upon retirement | 594 | 680 | ||||||
TOTAL NON-CURRENT ASSETS | 2,689 | 4,767 | ||||||
TOTAL ASSETS | $ | 10,985 | $ | 15,315 | ||||
Liabilities net of capital deficiency | ||||||||
CURRENT LIABILITIES: | ||||||||
Accounts payable | $ | 667 | $ | 534 | ||||
Accrued expenses and other | 3,623 | 1,332 | ||||||
Loans from the controlling shareholder | 37,338 | 65,338 | ||||||
TOTAL CURRENT LIABILITIES | 41,628 | 67,204 | ||||||
LONG-TERM LIABILITIES – | ||||||||
Liability for employee rights upon retirement | 694 | 810 | ||||||
TOTAL LONG-TERM LIABILITIES | 694 | 810 | ||||||
COMMITMENTS | ||||||||
TOTAL LIABILITIES | 42,322 | 68,014 | ||||||
CAPITAL DEFICIENCY: | ||||||||
Ordinary shares, NIS 0.1 par value – authorized: 8,775,783 and 50,000,000 as of December 31, 2016 and 2017, respectively; issued and outstanding: 6,290,242 and 6,290,244 as of December 31, 2016 and December 31, 2017, respectively | 82 | 82 | ||||||
Additional paid-in capital | 32,274 | 42,480 | ||||||
Accumulated deficit | (63,693 | ) | (95,261 | ) | ||||
TOTAL CAPITAL DEFICIENCY | (31,337 | ) | (52,699 | ) | ||||
TOTAL LIABILITIES NET OF CAPITAL DEFICIENCY | $ | 10,985 | $ | 15,315 |
Year ended December 31, | Year ended December 31, | |||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | 2020 | |||||||||||||||||||
REVENUES | 174 | |||||||||||||||||||||||
RESEARCH AND DEVELOPMENT EXPENSES | $ | 7,184 | $ | 17,023 | $ | 25,805 | ||||||||||||||||||
GENERAL AND ADMINISTRATIVE EXPENSES | 2,463 | 3,733 | 6,002 | |||||||||||||||||||||
COLLABORATION REVENUES | $ | 129 | $ | 22,904 | $ | 8,771 | ||||||||||||||||||
OPERATING EXPENSES | ||||||||||||||||||||||||
Research and Development | 28,146 | 40,578 | 27,913 | |||||||||||||||||||||
General and Administrative | 5,504 | 8,276 | 11,091 | |||||||||||||||||||||
TOTAL OPERATING LOSS | 9,647 | 20,756 | 31,633 | 33,521 | 25,950 | 30,233 | ||||||||||||||||||
FINANCIAL EXPENSES (INCOME), NET | 13 | 15 | (65 | ) | ||||||||||||||||||||
FINANCIAL INCOME, net | (1,318 | ) | (1,374 | ) | (943 | ) | ||||||||||||||||||
LOSS BEFORE INCOME TAXES | 32,203 | 24,576 | 29,290 | |||||||||||||||||||||
INCOME TAXES | - | 33 | - | |||||||||||||||||||||
LOSS FOR THE YEAR | $ | 9,660 | $ | 20,771 | $ | 31,568 | $ | 32,203 | $ | 24,609 | $ | 29,290 | ||||||||||||
BASIC AND DILUTED LOSS PER ORDINARY SHARE | $ | 1.53 | $ | 3.30 | $ | 5.02 | $ | 1.80 | $ | 1.26 | $ | 1.30 | ||||||||||||
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING USED IN COMPUTATION OF BASIC AND DILUTED LOSS PER SHARE | 6,290,242 | 6,290,242 | 6,290,244 | 17,867,589 | 19,534,562 | 22,574,688 |
Ordinary shares | Additional paid-in capital | Accumulated deficit | Total | |||||||||||||||||
Number of shares | Amounts | Amounts | ||||||||||||||||||
BALANCE AS OF JANUARY 1, 2015 | 6,290,242 | $ | 82 | $ | 30,193 | $ | (33,262 | ) | $ | (2,987 | ) | |||||||||
CHANGES DURING 2015: | ||||||||||||||||||||
Loss for the year | (9,660 | ) | (9,660 | ) | ||||||||||||||||
Share-based compensation | 1,129 | 1,129 | ||||||||||||||||||
BALANCE AS OF JANUARY 1, 2016 | 6,290,242 | 82 | 31,322 | (42,922 | ) | (11,518 | ) | |||||||||||||
CHANGES DURING 2016: | ||||||||||||||||||||
Loss for the year | (20,771 | ) | (20,771 | ) | ||||||||||||||||
Share-based compensation | 952 | 952 | ||||||||||||||||||
BALANCE AS OF DECEMBER 31, 2016 | 6,290,242 | 82 | 32,274 | (63,693 | ) | (31,337 | ) | |||||||||||||
CHANGES DURING 2017: | ||||||||||||||||||||
Loss for the year | (31,568 | ) | (31,568 | ) | ||||||||||||||||
Issuance of shares due to in- process research and development acquired | 2 | * | 6,232 | 6,232 | ||||||||||||||||
Share-based compensation | 3,974 | 3,974 | ||||||||||||||||||
BALANCE AS OF DECEMBER 31, 2017 | 6,290,244 | $ | 82 | $ | 42,480 | $ | (95,261 | ) | $ | (52,699 | ) |
Ordinary shares | Additional paid-in capital | Accumulated deficit | Total | |||||||||||||||||
Number of shares | Amounts | Amounts | ||||||||||||||||||
BALANCE AS OF JANUARY 1, 2018 | 6,290,244 | 82 | 42,480 | (95,261 | ) | (52,699 | ) | |||||||||||||
CHANGES DURING 2018: | ||||||||||||||||||||
Loss for the year | (32,203 | ) | (32,203 | ) | ||||||||||||||||
Stock split | * | 66 | (66 | ) | - | |||||||||||||||
Conversion of loans from the Controlling shareholder | 5,444,825 | 160 | 65,178 | 65,338 | ||||||||||||||||
Issuance of shares through an initial public offering, net of issuance costs | 7,187,500 | 211 | 78,564 | 78,775 | ||||||||||||||||
Exercise of options granted to employee | 27,399 | 1 | 43 | 44 | ||||||||||||||||
Share-based compensation | 4,654 | 4,654 | ||||||||||||||||||
BALANCE AS OF DECEMBER 31, 2018 | 18,949,968 | 520 | 190,853 | (127,464 | ) | 63,909 | ||||||||||||||
CHANGES DURING 2019: | ||||||||||||||||||||
Loss for the year | (24,609 | ) | (24,609 | ) | ||||||||||||||||
Vesting of restricted share units | 15,332 | * | * | - | ||||||||||||||||
Issuance of shares through public offering, net of issuance costs | 1,437,500 | 41 | 10,572 | 10,613 | ||||||||||||||||
Share-based compensation | 2,552 | 2,552 | ||||||||||||||||||
BALANCE AS OF DECEMBER 31, 2019 | 20,402,800 | 561 | 203,977 | (152,073 | ) | 52,465 | ||||||||||||||
CHANGES DURING 2020: | ||||||||||||||||||||
Loss for the year | (29,290 | ) | (29,290 | ) | ||||||||||||||||
Issuance of shares and warrants through public offering, net of issuance costs | 2,091,907 | 61 | 21,245 | 21,306 | ||||||||||||||||
Issuance of shares and warrants through private placement from the controlling shareholder | 454,628 | 13 | 4,987 | 5,000 | ||||||||||||||||
Vesting of restricted share units | 23,000 | * | ||||||||||||||||||
Exercise of options | 28,447 | * | 151 | 151 | ||||||||||||||||
Share-based compensation | 1,217 | 1,217 | ||||||||||||||||||
BALANCE AS OF DECEMBER 31, 2020 | 23,000,782 | 635 | 231,577 | (181,363 | ) | 50,849 |
Year ended December 31, | Year ended December 31, | |||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | 2020 | |||||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||||||||||
Loss | $ | (9,660 | ) | $ | (20,771 | ) | $ | (31,568 | ) | $ | (32,203 | ) | $ | (24,609 | ) | $ | (29,290 | ) | ||||||
Adjustments required to reconcile loss to net cash used in operating activities: | ||||||||||||||||||||||||
Depreciation | 300 | 359 | 471 | 762 | 887 | 946 | ||||||||||||||||||
Changes in accrued liability for employee rights upon retirement | (86 | ) | 68 | 30 | 106 | 38 | 21 | |||||||||||||||||
Share-based compensation | 1,129 | 952 | 3,974 | |||||||||||||||||||||
In-process research and development acquired | 431 | - | 6,232 | |||||||||||||||||||||
Share-based compensation expenses | 4,654 | 2,552 | 1,217 | |||||||||||||||||||||
Net changes in operating leases | - | 5 | 71 | |||||||||||||||||||||
Changes in fair value of marketable securities | 29 | 65 | 138 | |||||||||||||||||||||
Finance expenses, net | 17 | 8 | (50 | ) | (34 | ) | 50 | 12 | ||||||||||||||||
Changes in operating asset and liabilities: | ||||||||||||||||||||||||
Receivables from collaborative arrangements | - | (4,120 | ) | 1,967 | ||||||||||||||||||||
Prepaid expenses and other current assets | 1 | (228 | ) | (1,039 | ) | (1,463 | ) | 1,694 | 219 | |||||||||||||||
Accounts payable, accrued expenses and other | 449 | 2,505 | (2,486 | ) | 3,029 | 938 | (542 | ) | ||||||||||||||||
Advance payment | (625 | ) | (198 | ) | 810 | |||||||||||||||||||
Long term receivables | - | (1,190 | ) | (463 | ) | 1,653 | - | - | ||||||||||||||||
Net cash used in operating activities | (8,044 | ) | (18,495 | ) | (24,089 | ) | (23,467 | ) | (22,500 | ) | (25,241 | ) | ||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||||||||||
Purchase of property and equipment | (291 | ) | (385 | ) | (1,925 | ) | (1,052 | ) | (597 | ) | (449 | ) | ||||||||||||
Deposits | (8 | ) | (15 | ) | (4,013 | ) | ||||||||||||||||||
Amounts funded in respect of employee rights upon retirement, net | 89 | 9 | - | |||||||||||||||||||||
Net cash used in investing activities | (210 | ) | (391 | ) | (5,938 | ) | ||||||||||||||||||
Bank deposits | 3,000 | 1,000 | (21,400 | ) | ||||||||||||||||||||
Restricted long-term deposits | 8 | (10 | ) | (21 | ) | |||||||||||||||||||
Investments in marketable securities | (71,783 | ) | (38,702 | ) | (32,322 | ) | ||||||||||||||||||
Proceeds from sales and maturity of marketable securities | 15,092 | 54,333 | 51,498 | |||||||||||||||||||||
Net cash provided by (used in) investing activities | (54,735 | ) | 16,024 | (2,694 | ) | |||||||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||||||||||
Loans received from the controlling shareholder | 13,572 | 20,000 | 28,000 | |||||||||||||||||||||
Proceeds from exercise of options granted to employees | 44 | - | 151 | |||||||||||||||||||||
Proceeds from issuance of shares and warrants through public offering, net of issuance costs | 78,775 | 10,613 | 21,306 | |||||||||||||||||||||
Net proceeds from issuance of shares and warrants to the controlling shareholder through private placement | 5,000 | |||||||||||||||||||||||
Net cash provided by financing activities | 13,572 | 20,000 | 28,000 | 78,819 | 10,613 | 26,457 | ||||||||||||||||||
EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS | (17 | ) | (8 | ) | 50 | 34 | (50 | ) | (12 | ) | ||||||||||||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 5,301 | 1,106 | (1,977 | ) | 651 | 4,087 | (1,490 | ) | ||||||||||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR | 594 | 5,895 | 7,001 | |||||||||||||||||||||
CASH AND CASH EQUIVALENTS AT END OF THE YEAR | $ | 5,895 | $ | 7,001 | $ | 5,024 | ||||||||||||||||||
SUPPLEMENTARY INFORMATION ON INVESTING AND FINANCING ACTIVITIES NOT INVOLVING CASH FLOWS: | ||||||||||||||||||||||||
Purchase of property and equipment | $ | 23 | $ | 10 | $ | 62 | ||||||||||||||||||
Acquisition of in-process research and development product candidate | $ | 431 | $ | - | $ | 6,232 | ||||||||||||||||||
CASH AND CASH EQUIVALENTS AND RESRICTED CASH AT BEGINNING OF THE YEAR | 5,024 | 5,675 | 9,762 | |||||||||||||||||||||
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF THE YEAR | $ | 5,675 | $ | 9,762 | $ | 8,272 | ||||||||||||||||||
Cash and Cash equivalents | 5,325 | 9,412 | 7,122 | |||||||||||||||||||||
Restricted cash | 350 | 350 | 1,150 | |||||||||||||||||||||
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH SHOWN IN STATEMENT OF CASH FLOWS | $ | 5,675 | $ | 9,762 | $ | 8,272 |
SUPPLEMENTARY INFORMATION ON INVESTING AND FINANCING ACTIVITIES NOT INVOLVING CASH FLOWS: | ||||||||||||
Recognition of new operating lease ROU and liabilities | $ | - | $ | 1,329 | $ | 378 | ||||||
Conversion of loans from the controlling shareholder | $ | 65,338 | $ | - | $ | - | ||||||
SUPPLEMENTARY INFORMATION: | ||||||||||||
Income taxes paid | $ | - | $ | - | $ | 7 | ||||||
Interest received | $ | 1,477 | $ | 1,600 | $ | 770 |
Basis of presentation |
Use of estimates in the preparation of financial statements |
Functional and presentation currency |
Cash and cash equivalents |
d. | Bank deposits |
e. | Marketable securities |
f. | Derivatives and hedging The Company carries out transactions involving foreign currency exchange derivative financial instruments. The transactions are designed to hedge the Company’s exposure in currencies other than the U.S. dollar. The derivative does not meet the definition of a cash flow accounting hedge, therefore the changes in the fair value are included in financial expense (income), net. The currency hedged items are denominated in New Israeli Shekel (NIS). The counterparties to the derivatives are major banks in Israel. |
g. |
h. | Property and equipment: |
1) | Property and equipment are stated at cost, net of accumulated depreciation and amortization. |
2) | The Company’s property and equipment are depreciated utilizing the straight-line method on the basis of their estimated useful life. |
% | |
Laboratory equipment | 10 – 33 (mainly 15 – 25) |
Office equipment and furniture | 7 – 15 |
Computers and related equipment | 33 |
Impairment of long-lived assets |
Share-based compensation |
Research and development expenses |
Revenue recognition |
Income taxes: |
1) | Deferred taxes |
n. |
o. | Loss per share |
Fair value measurement |
Concentration of credit risks |
Newly issued and recently adopted accounting |
December 31, | ||||||||
2019 | 2020 | |||||||
Level 2 securities: | ||||||||
U.S government and agency bonds | $ | 2,499 | $ | 4,192 | ||||
Canada government bonds | 999 | - | ||||||
Other foreign government bonds | 3,521 | 2,006 | ||||||
Corporate bonds* | 33,947 | 15,454 | ||||||
Total | $ | 40,966 | $ | 21,652 |
December 31 | ||||||||
2016 | 2017 | |||||||
Cost: | ||||||||
Laboratory equipment | $ | 1,263 | $ | 2,247 | ||||
Office equipment and furniture | 234 | 254 | ||||||
Computers and software | 282 | 364 | ||||||
Leasehold improvements | 528 | 1,429 | ||||||
2,307 | 4,294 | |||||||
Less: | ||||||||
Accumulated depreciation and amortization | (1,509 | ) | (1,980 | ) | ||||
Property and equipment, net | $ | 798 | $ | 2,314 |
December 31, | ||||||||
2019 | 2020 | |||||||
Balance at beginning of the year | $ | 56,662 | $ | 40,966 | ||||
Additions | 38,702 | 32,322 | ||||||
Sale or maturity | (54,333 | ) | (51,498 | ) | ||||
Changes in fair value during the year | (65 | ) | (138 | ) | ||||
Balance at end of the year | $ | 40,966 | $ | 21,652 |
Market value | ||||
December 31, | ||||
2020 | ||||
Due within one year | 21,652 | |||
1 to 2 years | - | |||
Total | 21,652 |
December 31 | ||||||||
2019 | 2020 | |||||||
Cost: | ||||||||
Laboratory equipment | $ | 3,242 | $ | 3,644 | ||||
Office equipment and furniture | 265 | 265 | ||||||
Computers and software | 490 | 530 | ||||||
Leasehold improvements | 1,946 | 1,953 | ||||||
5,943 | 6,392 | |||||||
Less: | ||||||||
Accumulated depreciation and amortization | (3,629 | ) | (4,575 | ) | ||||
Property and equipment, net | $ | 2,314 | $ | 1,817 |
a. | Royalty Commitments: |
1) | The Company is obligated to pay royalties to the |
2) | The Company has an agreement, that was amended several times (hereafter — the agreements) with Yissum Research Development Company (hereafter — “Yissum”), the technology-licensing arm of the Hebrew University of Jerusalem. |
i. |
1.5% – 8% of proceeds received by the Company for the sub-license or license of certain patents. |
b. | Lease Agreements |
Year | Amount | |||
2018 | 479 | |||
2019 | 479 | |||
2020 | 479 | |||
Total | $ | 1,437 |
As of December 31, | ||||||||
2019 | 2020 | |||||||
Assets | ||||||||
Operating Leases | ||||||||
Operating lease right-of-use assets | $ | 2,040 | $ | 1,896 | ||||
Liabilities | ||||||||
Current liabilities | ||||||||
Current maturities of operating leases | $ | 672 | $ | 673 | ||||
Long-term liabilities | ||||||||
Non-current operating leases | $ | 1,373 | $ | 1,299 | ||||
Weighted Average Remaining Lease Term | ||||||||
Operating leases | 1.66 | 1.29 | ||||||
Weighted Average Discount Rate | ||||||||
Operating leases | 7.44 | % | 6.25 | % |
Year Ended December 31, | ||||||||
2019 | 2020 | |||||||
Operating lease cost: | $ | 643 | $ | 685 |
Year Ended December 31, | ||||||||
2019 | 2020 | |||||||
Cash paid for amounts included in the measurement of leases liabilities: | ||||||||
Operating cash flows from operating leases | $ | 807 | $ | 735 |
Operating Leases | ||||
For the year ended December 31, 2020 | ||||
2021 | $ | 778 | ||
2022 | 714 | |||
2023 | 648 | |||
Total minimum lease payments | 2,140 | |||
Less: amount of lease payments representing interest | (168 | ) | ||
Present value of future minimum lease payments | 1,972 | |||
Less: Current maturities of operating leases | 673 | |||
Long-term operating leases liabilities | 1,299 | |||
$ | 1,972 |
In June 2008, the Company entered into a Master Clinical Trial Services Agreement with a third party, which was later amended in April |
d. | In 2016 through 2020, the Company entered into twelve collaboration agreements with two third parties for the development, manufacturing and commercialization of ten product candidates (including an agreement assumed by the Company in August 2018, following the transfer of an in-process research and development product candidate from a related party). See detailed information in note 7b. |
e. | In October 2017, the Company entered into a Clinical Development Master Services Agreement with a third party, to retain it as clinical research organization for certain product candidate, subject to task work orders to be issued by the Company. As consideration for its services the Company will pay a total amount of approximately |
f. | In |
a. | In 2007, the Company granted rights to a third party for use and commercialization of a product for skin protection. Under this agreement, the Company is entitled to royalties during the years |
In |
Upon FDA approval, the third As of December 31, 2020, the Company decided not to pursue one of the agreements with one of the third parties collaborators. In February 2019, the Company announced that a This Agreement is considered to be within the scope of ASC 808, as the parties are active participants and exposed to the risks and rewards of the |
a. |
1) | Rights of the Company’s ordinary shares Each ordinary share is entitled to one vote. The holder of the ordinary shares is also entitled to receive dividends whenever funds are legally available, when and if declared by the Board of Directors. Since its inception, the Company has not declared any dividends. |
2) |
On January 19, 2018, the Company executed a 1-for-1.8 share split of the Company’s shares by way of an issuance of bonus shares for each share. Upon the effectiveness of the share split, (i) 0.8 bonus shares were issued for each outstanding share, (ii) the number of ordinary shares into which each outstanding option to purchase ordinary shares is exercisable was proportionally increased, and (iii) the exercise price of each outstanding option to purchase ordinary shares was proportionately decreased. Unless otherwise indicated, and except for authorized capital, all of the share numbers, loss per share amounts, share prices and option exercise prices in these financial statements have been adjusted, on a retroactive basis, to reflect this 1-for-1.8 share |
In January 2018, the Company completed an Immediately prior to the closing of the IPO, the outstanding promissory note |
4) | On August 12, 2019, the Company completed an underwritten follow-on public offering, in which it issued 1,437,500 ordinary shares, including the full exercise by the underwriters of their option to purchase 187,500 additional ordinary shares, at a public offering price of $8.00 per ordinary share. The total proceeds received from the offering, net of issuance costs, were approximately $10,613. |
5) | On February 19, 2020, the Company completed an underwritten public offering, in which it issued 2,091,907 ordinary shares and 2,091,907 warrants to purchase up to 1,673,525 ordinary shares, at a public offering price of $11.00 per ordinary shares. The warrants are exercisable over a three-years period from the date of issuance at a per share exercise price of $14, subject to certain adjustments as defined in the agreement. The total proceeds received from the offering, net of issuance costs, were approximately $21,306. |
b. | Share-based compensation: |
1) | Option plan |
2) | Options grants |
a. | Option granted to employees and directors |
i. | In |
In |
iii. | In December 2019, the Company granted a total of 6,300 options to several employees to purchase ordinary shares at an exercise price of $8.32 per share. |
2018 | 2019 | |||
Value of one ordinary share | $6.24-$10.40 | $6.08-$8.59 | ||
Dividend yield | 0% | 0% | ||
Expected volatility | 70.43 %-73.35% | 74.87%-77.83 % | ||
Risk-free interest rate | 2.67%-2.83% | 1.82%-2.75% | ||
Expected term | 5.50-7 years | 6.11 years |
2015 | 2016 | 2017 | ||||
Value of one ordinary share | $6.31 | $11.99 | $20.47-$24.37 | |||
Dividend yield | 0% | 0% | 0% | |||
Expected volatility | 62.46%-66.22% | 68.46%-79.1% | 72.91%-78.71% | |||
Risk-free interest rate | 1.61%-1.81% | 0.95%-1.34% | 1.57%-2.23% | |||
Expected term | 5.5-7.5 years | 5-6.71 years | 5-7 years |
Year ended December 31 | Year ended December 31 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2015 | 2016 | 2017 | 2019 | 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of options | Weighted average exercise price | Weighted average remaining contractual life | Number of options | Weighted average exercise price | Weighted average remaining contractual life | Number of options | Weighted average exercise price | Weighted average remaining contractual life | Number of options | Weighted average exercise price | Weighted average remaining contractual life | Number of options | Weighted average exercise price | Weighted average remaining contractual life | ||||||||||||||||||||||||||||||||||||||||||||||
Options outstanding at the beginning of the year | - | - | - | 312,194 | $ | 1.59 | 9.25 | 402,955 | $ | 1.59 | 8.55 | 938,090 | $ | 4.47 | 7.89 | 1,031,591 | $ | 4.74 | 7.25 | |||||||||||||||||||||||||||||||||||||||||
Granted | 312,194 | $ | 1.59 | 9.25 | 90,761 | $ | 1.59 | 9.59 | 468,572 | $ | 4.99 | 9.52 | 95,300 | $ | 6.24 | 9.17 | - | - | - | |||||||||||||||||||||||||||||||||||||||||
Exercised | - | - | - | (28,447 | ) | $ | 5.27 | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Expired | (563 | ) | $ | 5.57 | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Forfeited | - | - | - | - | - | - | (21,747 | ) | $ | 2.25 | 7.87 | (1,238 | ) | $ | 5.57 | - | (2,250 | ) | $ | 7.77 | - | |||||||||||||||||||||||||||||||||||||||
Options outstanding at the end of the year | 312,194 | $ | 1.59 | 9.25 | 402,955 | $ | 1.59 | 8.55 | 849,780 | $ | 3.45 | 8.63 | 1,031,591 | $ | 4.74 | 7.25 | 1,000,894 | $ | 4.63 | 6.05 | ||||||||||||||||||||||||||||||||||||||||
Options exercisable at the end of the year | 97,560 | $ | 1.59 | 9.25 | 192,338 | $ | 1.59 | 9.59 | 297,420 | $ | 1.59 | 7.49 | 683,979 | $ | 3.60 | 6.56 | 900,687 | $ | 4.08 | 5.67 |
b. | Option granted to non-employees |
2018 | |||
Value of one ordinary share | $ 10.40 | ||
Dividend yield | 0% | ||
Expected volatility | 79.07% | ||
Risk-free interest rate | 2.86% | ||
Expected term | 10 years |
Year ended December 31 | ||||||||||||||||||||||||||||||||||||
2017 | 2019 | 2020 | ||||||||||||||||||||||||||||||||||
Number of options | Weighted average exercise price | Weighted average remaining contractual life | Number of options | Weighted average exercise price | Weighted average remaining contractual life | Number of options | Weighted average exercise price | Weighted average remaining contractual life | ||||||||||||||||||||||||||||
Options outstanding at the beginning of the year | - | - | - | 198,575 | $ | 7.48 | 8.81 | 198,575 | $ | 7.48 | 7.84 | |||||||||||||||||||||||||
Granted | 121,680 | $ | 5.12 | 9.54 | - | - | - | - | - | - | ||||||||||||||||||||||||||
Options outstanding at the end of the year | 121,680 | $ | 5.12 | 9.54 | 198,575 | $ | 7.48 | 7.84 | 198,575 | $ | 7.70 | 6.84 | ||||||||||||||||||||||||
Options exercisable at the end of the year | 7,614 | $ | 1.59 | 9.54 | 96,588 | $ | 6.97 | 7.78 | 137,771 | 7.34 | 6.8 |
c. | The aggregate intrinsic value of the total outstanding and of total exercisable options as of December 31, |
d. | Restricted Share Units (RSUs) granted to Directors In February 2018 and September 2018, the board of directors approved and recommended the Company shareholders to approve a total grant of 46,000 and 11,500 RSUs, respectively, to its independent and external directors that vest annually in equal portions over a three-year period. The fair value of shares as of the date of grant was $495 and $105 respectively. As of December 31, 2020, 38,332 RSUs were vested. |
e. | The following table illustrates the effect of share-based compensation on the statements of operations: |
Year ended December 31 | ||||||||||||
2018 | 2019 | 2020 | ||||||||||
Research and development expenses | $ | 2,708 | $ | 1,028 | $ | 431 | ||||||
General and administrative expenses | $ | 1,946 | $ | 1,524 | $ | 786 | ||||||
$ | 4,654 | $ | 2,552 | $ | 1,217 |
Year ended December 31 | ||||||||||||
2015 | 2016 | 2017 | ||||||||||
Research and development expenses | $ | 468 | $ | 541 | $ | 1,932 | ||||||
General and administrative expenses | 661 | 411 | 2,042 | |||||||||
$ | 1,129 | $ | 952 | $ | 3,974 |
a. | Tax rates in Israel |
b. | Tax rates for the U.S Subsidiary |
Tax benefits under the Law for the Encouragement of Capital Investments, 1959 (the “Investment Law”) |
Tax assessments |
Losses for tax purposes carried forward to future years |
Deferred income taxes: |
December, 31 | ||||||||
2019 | 2020 | |||||||
In respect of: | ||||||||
Net operating loss carry forward | $ | 25,879 | $ | 34,835 | ||||
Research and development expenses | 7,842 | 7,133 | ||||||
Other | 1,226 | 1,085 | ||||||
Less – valuation allowance | (34,947 | ) | (43,053 | ) | ||||
Net deferred tax assets | $ | — | $ | — |
As of December 31 | ||||||||
2016 | 2017 | |||||||
In respect of: | ||||||||
Net operating loss carry forward | $ | 10,912 | $ | 16,342 | ||||
Research and development expenses | 2,935 | 4,099 | ||||||
Other | 152 | 1,541 | ||||||
Less – valuation allowance | (13,999 | ) | (21,982 | ) | ||||
Net deferred tax assets | $ | — | $ | — |
Reconciliation of theoretical tax expenses to actual expenses |
Roll forward of valuation allowance |
Balance at January 1, 2018 | $ | 21,982 | ||
Additions | 4,184 | |||
Balance at December 31, 2018 | $ | 26,166 | ||
Additions | 8,781 | |||
Balance at December 31, 2019 | $ | 34,947 | ||
Additions | 8,106 | |||
Balance at December 31, 2020 | $ | 43,053 |
Balance at January 1, 2015 | $ | 8,692 | ||
Additions | 2,196 | |||
Balance at December 31, 2015 | $ | 10,888 | ||
Additions | 3,111 | |||
Balance at December 31, 2016 | $ | 13,999 | ||
Additions | 7,983 | |||
Balance at December 31, 2017 | $ | 21,982 |
i. | Provision for uncertain tax positions |
December, 31 | ||||||||
2019 | 2020 | |||||||
Accrued expenses | $ | 3,249 | $ | 3,250 | ||||
Employees payables | 841 | 812 | ||||||
Other | 33 | 26 | ||||||
$ | 4,123 | $ | 4,088 |
a. | Related parties include the Controlling Shareholder and companies under his control, the Board of Directors and the Executive Officers of the |
b. |
As to options and restricted shares granted to |