☐ | 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, 2021 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______ |
☐ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Israel | Tel Aviv 6744316, Israel Tel: +972 3 7177050 | |
(Jurisdiction of incorporation or organization) | (Address of principal executive offices) |
Title of each class to be registered | Trading Symbol(s) | Name of each exchange on which each class is to be registered | ||
Ordinary shares, par value NIS 0.03 per share | PRFX | The Nasdaq Stock Market LLC |
Large accelerated filer ☐ | Accelerated filer ☐ | Non-accelerated filer ☒ | ||||
Emerging Growth Company ☒ |
Page | ||
5 | ||
PART I | ||
A. | ||
B. | Capitalization and Indebtedness | |
C. | Reasons for the Offer and Use of Proceeds | |
D. | Risk Factors | |
A. | History and Development of the Company | |
B. | Business Overview | |
C. | Organizational Structure | |
D. | Property, Plants and Equipment | |
A. | Operating Results | |
B. | Liquidity and Capital Resources | |
C. | Research and Development, Patents and Licenses | |
D. | Trend Information | |
E. | Critical Accounting Estimates | |
59 | ||
A. | Directors and Senior Management | 60 |
B. | Compensation | 62 |
C. | Board Practices | 65 |
D. | Employees | 78 |
E. | Share Ownership | 78 |
79 | ||
A. | Major Shareholders | 79 |
B. | Related Party Transactions | 80 |
C. | Interests of Experts and Counsel | 81 |
81 | ||
A. | Statements and Other Financial Information | 81 |
B. | Significant Changes | 82 |
82 | ||
A. | Offer and Listing Details | 82 |
B. | Plan of Distribution | 82 |
C. | Markets | 82 |
D. | Selling Shareholders | 82 |
E. | Dilution | 82 |
F. | Expenses of the Issue | 82 |
82 | ||
A. | Share Capital | 82 |
B. | Articles of Association | 82 |
C. | Material Contracts | 82 |
D. | Exchange Controls | 82 |
E. | Taxation | 82 |
F. | Dividends and Paying Agents | 92 |
G. | Statement by Experts | 92 |
H. | Documents on Display | 92 |
I. | Subsidiary Information | 92 |
93 | ||
93 | ||
A. | Debt Securities | 93 |
B. | Warrants and rights | 93 |
C. | Other Securities | 93 |
D. | American Depositary Shares | 93 |
PART II | ||
93 | ||
93 | ||
93 | ||
94 | ||
94 | ||
94 | ||
95 | ||
95 | ||
95 | ||
96 | ||
97 | ||
PART III | ||
97 | ||
97 | ||
98 | ||
100 |
● | our history of |
● | our dependence on the success of our initial product candidate, PRF-110; |
● | the outcomes of preclinical studies, clinical trials and other research regarding PRF-110 and future product candidates; |
● | the impact of the COVID-19 pandemic on our operations; |
● | our limited experience managing clinical trials; |
● | our ability to retain key personnel and recruit additional employees; |
● | our reliance on third parties for the conduct of clinical trials, product manufacturing and development; |
● | the impact of competition and new technologies; |
● | our ability to comply with regulatory requirements relating to the development and marketing of our product candidates; |
● | our ability to establish and maintain strategic partnerships and other corporate collaborations; |
● | the implementation of our business model and strategic plans for our business and product candidates; |
● | the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates and our ability to operate our business without infringing the intellectual property rights of others; |
● | the overall global economic environment; |
● | our ability to develop an active trading market for our ordinary shares and whether the market price of our ordinary shares is volatile; |
● | statements as to the impact of the political and security situation in Israel on our business; and |
● | those factors referred to in “Item 3.D. Risk Factors,” “Item 4. Information on the Company,” and “Item 5. Operating and Financial Review and Prospects”, as well as in this Annual Report on Form 20-F generally. |
A. | [RESERVED] |
Year ended December 31, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Operating expenses: | ||||||||||||
Research and development | (354,000 | ) | (136,000 | ) | (223,000 | ) | ||||||
Selling, general and administrative | (1,317,000 | ) | (553,000 | ) | (277,000 | ) | ||||||
Operating loss for the period | (1,671,000 | ) | (689,000 | ) | (500,000 | ) | ||||||
Financial expenses, net: | (2,162,000 | ) | (590,000 | ) | (328,000 | ) | ||||||
Loss before taxes | (3,833,000 | ) | (1,279,000 | ) | (828,000 | ) | ||||||
Tax expenses | (220,000 | ) | - | - | ||||||||
Comprehensive loss | (4,053,000 | ) | (1,279,000 | ) | (828,000 | ) | ||||||
Loss per ordinary share, basic and diluted | (1.25 | ) | (4.17 | ) | (3.24 | ) |
December 31, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Cash and cash equivalents | 15,677,000 | 941,000 | 40,000 | |||||||||
Restricted cash | �� | 13,000 | 6,000 | 6,000 | ||||||||
Prepaid clinical trial expenses and deferred clinical trial costs | 1,294,000 | - | - | |||||||||
Prepaid expenses and other current assets | 807,000 | 25,000 | 34,000 | |||||||||
Total current assets | 17,791,000 | 972,000 | 80,000 | |||||||||
Property and equipment, net | 10,000 | - | - | |||||||||
Other non-current asset | - | 192,000 | - | |||||||||
Total current liabilities | 961,000 | 6,339,000 | 18,000 | |||||||||
Convertible debt | - | - | 4,520,000 | |||||||||
Provision for tax benefits | 220,000 | - | - | |||||||||
Derivative warrant liability | - | 447,000 | - | |||||||||
Temporary equity | - | 6,621,000 | 6,621,000 | |||||||||
Shareholders’ equity (deficit) | 16,620,000 | (12,243,000 | ) | (11,078,000 | ) |
B. | Capitalization and Indebtedness |
C. | Reasons for the Offer and Use of Proceeds |
D. | Risk Factors |
● | We have incurred significant losses since our inception and expect to incur losses for the foreseeable future. We may never achieve or maintain profitability; |
● | Our limited operating history may make it difficult for you to assess our future viability. We have never generated revenues and may never be profitable; |
● | We will need substantial additional funding, which may not be available to us on acceptable terms or at all. If we are unable to raise capital when needed, we may be forced to delay, reduce and/or eliminate our research and drug development programs or future commercialization efforts; |
● | We are dependent on the success of our initial product candidate, PRF-110, for which two clinical trials are planned. Our clinical trials of PRF-110 may not be successful. If we are unable to obtain approval for and commercialize PRF-110 or experience significant delays in doing so, our business will be materially harmed; |
● | We have experienced delays in the manufacturing of our clinical trial batches and if we experience further delays, our business will be further harmed. |
● | We are dependent on a single supplier from which we obtain some of our critical materials and components used in manufacturing. |
● | The COVID-19 pandemic may adversely affect our development efforts including the planned clinical trials for PRF-110; |
● | We have not yet commercialized any products or technologies, and we may never become profitable; |
● | The loss of the services of our key personnel would negatively affect our business; |
● | If we are unable to successfully complete our clinical trial programs for PRF-110, or if such clinical trials take longer to complete than we project, our ability to execute our current business strategy will be adversely affected; |
● | We have limited experience in conducting and managing clinical trials necessary to obtain regulatory approvals. If our drug candidates and technologies do not receive the necessary regulatory approvals, we will be unable to commercialize our products; |
● | If third parties on which we will have to rely for clinical trials do not perform as contractually required or as we expect, we may not be able to obtain regulatory approval for or commercialize our products; |
● | Even if we or our collaborative/strategic partners or potential collaborative/strategic partners receive approval to market our drug candidates, if our products fail to achieve market acceptance, we will never record meaningful revenues; |
● | If our competitors develop and market products that are less expensive or more effective than our product, our revenues and results may be harmed and our commercial opportunities may be reduced or eliminated; |
● | We may not be able to successfully identify and execute strategic alliances or other relationships with third parties or to successfully manage the impacts of acquisitions, dispositions or relationships on our operations. |
● | We are subject to risks relating to intellectual property rights and risks of infringement; |
● | If we are unable to maintain patent protection for our products, our competitors could develop and commercialize products and technology similar or identical to our product candidates, and our ability to successfully commercialize any product candidates we may develop, and our science may be adversely affected; |
● | Obtaining and maintaining our patent protection depends on compliance with various procedural measures, document submissions, fee payments and other requirements imposed by government patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements; |
● | Conditions in the Middle East and in Israel may harm our operations; |
● | Your rights and responsibilities as a shareholder will be governed by Israeli law which may differ in some respects from the rights and responsibilities of shareholders of U.S. companies. |
● | Our international clinical trials may be delayed or otherwise adversely impacted by social, political and economic factors affecting the particular foreign country; |
● | We are currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instability due to the ongoing military conflict between Russia and Ukraine |
● | Because we are not subject to compliance with rules requiring the adoption of certain corporate governance measures, our shareholders have limited protections against interested director transactions, conflicts of interest and similar matters; |
● | We are an emerging growth company and the reduced disclosure requirements applicable to emerging growth companies may make our ordinary shares less attractive to investors; |
● | We incur increased costs as a result of operating as a public company listed on a U.S. national securities exchange and our management will be required to devote substantial time to new compliance initiatives; |
● |
● | Because certain of our directors and executive officers are among our largest shareholders, they can exert significant control over our business and affairs and have actual or potential interests that may depart from investors; |
● | U.S. shareholders may suffer adverse tax consequences if we are characterized as a passive foreign investment company, or PFIC, for U.S. federal income tax purposes; |
● | The market price of our ordinary shares may be highly volatile, which could result in substantial losses for holders of our ordinary |
● | initiate and manage clinical trials for PRF-110; |
● | seek regulatory approvals; |
● | implement internal systems and infrastructures; |
● | hire management and other personnel; and |
● | progress PRF-110 towards commercialization. |
● | the costs, timing and outcome of manufacturing clinical trial and commercial quantities of PRF-110; |
● | the scope, progress, results and costs of our current and future clinical trials of PRF-110 for our current targeted uses; |
● | the costs, timing and outcome of regulatory review of PRF-110; |
● | the extent to which we acquire or invest in businesses, products and technologies, including entering into or maintaining licensing or collaboration arrangements for PRF-110 on favorable terms, although we currently have no commitments or agreements to complete any such transactions; |
● | the costs and timing of future commercialization activities, including drug sales, marketing, manufacturing and distribution, for any of our product candidates for which we receive marketing approval, to the extent that such sales, marketing, manufacturing and distribution are not the responsibility of any collaborator that we may have at such time; |
● | the amount of revenue, if any, received from commercial sales of PRF-110, should it receive marketing approval; |
● | the costs of preparing, filing and prosecuting patent applications, maintaining, defending and enforcing our intellectual property rights and defending intellectual property-related claims; |
● | our ability to establish strategic collaborations, licensing or other arrangements and the financial terms of any such agreements, including the timing and amount of any future milestone, royalty or other payments due under any such agreement; |
● | our headcount growth and associated costs as we expand our business operations and our research and development activities; |
● | the costs of operating as a public company; |
● | maintaining minimum shareholders’ equity requirements under the Nasdaq rules; and |
● | the impact of the COVID-19 pandemic and the Russian invasion of Ukraine, which may exacerbate the magnitude of the factors discussed above. |
● | establishment of supply arrangements with third-party raw materials and drug product suppliers and manufacturers who are able to manufacture clinical trial and commercial quantities of PRF-110 and to develop, validate and maintain a commercially viable manufacturing process that is compliant with current Good Manufacturing Practices, or cGMP, at a scale sufficient to meet anticipated demand and over time enable us to reduce our cost of manufacturing; |
● | initiation and successful patient enrolment and completion of additional clinical trials on a timely basis; |
● | our ability to demonstrate PRF-110’s safety, tolerability and efficacy to the FDA or any comparable foreign regulatory authority for marketing approval; |
● | timely receipt of marketing approvals for PRF-110; |
● | maintaining patent protection, trade secret protection and regulatory exclusivity, both in the U.S. and internationally; |
● | successfully defending and enforcing our rights in our intellectual property portfolio; |
● | avoiding and successfully defending against any claims that we have infringed, misappropriated or otherwise violated any intellectual property of any third party; |
● | the performance of our future collaborators, if any; |
● | the extent of, and our ability to timely complete, any required post-marketing approval commitments imposed by FDA or other applicable regulatory authorities; |
● | establishment of scaled production arrangements with third-party manufacturers to obtain finished products that are compliant with cGMP and appropriately packaged for sale; |
● | successful launch of commercial sales following any marketing approval; |
● | a continued acceptable safety profile following any marketing approval; |
● | commercial acceptance by patients, the medical community and third-party payors; |
● | the availability of coverage and adequate reimbursement and pricing by third-party payors and government authorities; |
● | the availability, perceived advantages, relative cost, relative safety and relative efficacy of alternative and competing treatments; and |
● | our ability to compete with other post-operative pain, or POP, treatments. |
● | the timing of regulatory approvals in the countries, and for the uses, we seek; |
● | the competitive environment; |
● | the establishment and demonstration in the medical community of the safety and clinical efficacy of our products and their potential advantages over existing therapeutic products; |
● | our ability to enter into strategic agreements with pharmaceutical and biotechnology companies with strong marketing and sales capabilities; |
● | the adequacy and success of distribution, sales and marketing efforts; and |
● | the pricing and reimbursement policies of government and third-party payors, such as insurance companies, health maintenance organizations and other plan administrators. |
● | obtaining regulatory approvals (e.g., an Investigational New Drug, or IND, application) to commence a clinical trial; |
● | reaching agreement on acceptable terms with prospective contract research organizations, or CROs, and trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; |
● | slower than expected rates of patient recruitment due to narrow screening requirements and competing clinical studies; |
● | the inability of patients to meet protocol requirements imposed by the FDA or other regulatory authorities; |
● | the need or desire to modify our manufacturing process; |
● | delays, suspension, or termination of the clinical trials due to the institutional review board responsible for overseeing the study at a particular study site; and |
● | governmental or regulatory delays or “clinical holds” requiring suspension or termination of the trials. |
● | assist us in developing, testing and obtaining regulatory approval; |
● | manufacture our drug candidates; and |
● | market and distribute our products. |
● | perceptions by members of the health care community, including physicians, of the safety and efficacy of our product; |
● | the potential advantages that our product offers over existing treatment methods or other products that may be developed; |
● | the cost-effectiveness of our product relative to competing products; |
● | the availability of government or third-party pay or reimbursement for our products; and |
● | the effectiveness of our or our partners’ sales, marketing and distribution efforts. |
● | litigation involving patients taking our drug; |
● | restrictions on such drugs, manufacturers or manufacturing processes; |
● | restrictions on the labeling or marketing of a drug; |
● | restrictions on drug distribution or use; |
● | requirements to conduct post-marketing studies or clinical trials; |
● | warning letters or untitled letters; |
● | withdrawal of the drugs from the market; |
● | refusal to approve pending applications or supplements to approved applications that we submit; |
● | recall of drugs; |
● | fines, restitution or disgorgement of profits or revenues; |
● | suspension or withdrawal of marketing approvals; |
● | damage to relationships with any potential collaborators; |
● | exclusion from or restrictions on coverage by third-party payors; |
● | unfavorable press coverage and damage to our reputation; |
● | refusal to permit the import or export of drugs; |
● | drug seizure; or |
● | injunctions or the imposition of civil or criminal penalties. |
● | decreased demand for a product; |
● | damage to our reputation; |
● | withdrawal of clinical trial volunteers; and |
● | loss of revenues. |
● | the potential disruption of our ongoing business; |
● | the distraction of management away from the ongoing oversight of our existing business activities; |
● | incurring additional indebtedness; |
● | the anticipated benefits and cost savings of those transactions not being realized fully, or at all, or taking longer to realize than anticipated; |
● | an increase in the scope and complexity of our operations; and |
● | the loss or reduction of control over certain of our assets. |
● | result in costly litigation; |
● | divert management’s attention and resources; |
● | cause product shipment delays; and |
● | require us to enter into royalty or licensing agreements. Such royalty or licensing agreements, if required, may not be available on terms acceptable to us, if at all. |
● | others may be able to make products that are similar to our product candidates or utilize similar science or technology but that are not covered by the claims of the patents that we may own or license from our licensors or that incorporate certain research in our product candidates that is in the public domain; |
● | we might not have been the first to file patent applications covering our inventions; |
● | others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; |
● | issued patents that we hold rights to may be held invalid or unenforceable, including as a result of legal challenges by our competitors or other third parties; |
● | our competitors or other third parties might conduct research and development activities in countries where do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; |
● | the patents of others may harm our business if, for example, we are found to have infringed those patents or if those patents serve as prior art to our patents which could potentially invalidate our patents; and |
● | we may choose not to file a patent in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property, which could ultimately result in public disclosure of the intellectual property if the third party’s patent application is published or issues to a patent. |
● | difficulty in establishing or managing relationships with clinical research organizations and physicians; |
● | different standards for the conduct of clinical trials and/or health care reimbursement; |
● | our inability to locate qualified local consultants, physicians, and partners; |
● | the potential burden of complying with a variety of foreign laws, medical standards and regulatory requirements, including the regulation of pharmaceutical products and treatment; and |
● | general geopolitical risks, such as political and economic instability, and changes in diplomatic and trade relations. |
● | not being required to comply with the auditor attestation requirements in the assessment of our internal control over financial reporting; |
● | not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements; and |
● | reduced disclosure obligations regarding executive compensation. |
● | to elect or defeat the election of our directors; |
● | amend or prevent amendment of our charter documents or by-laws; |
● | effect or prevent a merger, sale of assets or other corporate transaction; and |
● | to control the outcome of any other matter submitted to our shareholders for vote. |
● | less liquid trading market for our securities; |
● | more limited market quotations for our securities; |
● | determination that our ordinary shares and/or warrants are a “penny stock” that requires brokers to adhere to more stringent rules and possibly resulting in a reduced level of trading activity in the secondary trading market for our securities; |
● | more limited research coverage by stock analysts; |
● | loss of reputation; and |
● | more difficult and more expensive equity financings in the future. |
● | changes or developments in laws or regulations governing our business; |
● | announcements of regulatory approvals or the failure to obtain them, or specific label indications or patient populations for their use, or changes or delays in the regulatory review process; |
● | unsatisfactory results of preclinical studies or clinical trials; |
● | adverse actions taken by regulatory agencies with respect to our manufacturing supply chain or sales and marketing activities; |
● | announcements of innovations or new products by us or our competitors; |
● | any intellectual property infringement, misappropriation or other actions in which we may become involved; |
● | any adverse changes to our relationships with manufacturers or suppliers; |
● | announcements concerning our competitors; |
● | achievement of expected product sales and profitability or our failure to meet expectations; |
● | our commencement of, or involvement in, litigation; and |
● | any changes in our board of directors or management. |
INFORMATION ON THE COMPANY |
A. | History and Development of the Company |
B. | Business Overview |
● | addressing unmet medical needs; |
● | de-risked drug development by using long-established APIs and our patented, proprietary extended release drug-delivery system; |
● | reduced development costs; |
● | rapid preclinical and clinical testing; |
● | well understood paths to approval: and |
● | the potential to disrupt current practices. |
● | PRF-110 is highly viscous and thus stays in place when placed into a surgical wound bed. |
● | PRF-110 remains within the surgical site when the skin is closed, without being toxic or proinflammatory. |
● | PRF-110 is easy to administer and its use is consistent with current surgical practice. |
● | PRF-110 is highly uniform and resistant to degradation in the wound, resulting is sustained,/extended release of the analgesic. |
● | Ropivacaine, the active drug used in PRF-110, is a safe and well-characterized local anesthetic. |
● | The components that make up the remainder of the PRF-110 formulation are classified as GRAS (Generally Regarded As Safe) by the FDA. |
● | We have amassed a human toxicology portfolio for PRF-110, demonstrating that there are no PRF-110-asociated serious adverse events in either healthy controls or in surgical patients. |
● | Based on extensive toxicology and pharmacokinetic studies, as well as positive Phase 2 results, the FDA has granted our company an IND for PRF-110 and approved the initiation of Phase 3 trials for the treatment of post-operative pain. |
● | Unlike many drug trials that take months to years to complete and which are complex and whose endpoints are difficult to interpret, the planned trials are expected to last for 72 hours with a seven day and a one-month follow-up, with primary endpoint of pain measurement on the familiar scale of 0 (no pain) to 10 (worst imaginable pain). |
● | Upon completion of the Phase 3 studies, if successful, we plan to apply for a NDA for the management of post-operative pain. |
● | If and when approved for commercial sale, we intend to capitalize on the opportunity and carry out post-approval trials in a number of additional surgical indications, including breast augmentation/reduction, bariatric procedures, hysterectomy, cholecystectomy as well as orthopaedic procedures including joint replacements and open fracture repair. We intend to capitalize on these opportunities to become the leader in opiate-free, long-acting local and regional analgesia. |
● | Hospitals; |
● | Free-standing surgical centers; and |
● | Surgical offices. |
● | Posimir by Durect (DRRX). A bupivacaine collagen matrix was recently approved by the FDA for only arthroscopic subacromial decompression (niche market ~600,000 annual procedures in the U.S.). |
● | Xaracoll by Innocoll, |
● |
● | TLC590, from the Taiwan Liposome Company, is a liposomal formulation of ropivacaine that |
● | completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice, or GLP, regulations; |
● | submission to the FDA of an IND, which must take effect before human clinical trials begin; |
● | approval by an independent institutional review board, or IRB, representing each clinical site before each clinical trial may be initiated; |
● | performance of adequate and well-controlled human clinical trials in accordance with good clinical practices, or GCP, to establish the safety and efficacy of the proposed drug product for each proposed indication; |
● | preparation and submission to the FDA of an NDA requesting marketing for one or more proposed indications; |
● | review by an FDA advisory committee, where appropriate or if applicable; |
● | satisfactory completion of one or more FDA inspections of the manufacturing facility or facilities at which the product, or components thereof, are produced to assess compliance with current Good Manufacturing Practices, or cGMP, requirements and to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity; |
● | satisfactory completion of FDA audits of clinical trial sites to assure compliance with GCPs and the integrity of the clinical data; |
● | payment of user fees and securing FDA approval of the NDA; and |
● | compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy, or REMS, and the potential requirement to conduct post-approval studies. |
Phase 1: | The drug is initially introduced into healthy human subjects or, in certain indications such as cancer, patients with the target disease or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness and to determine optimal dosage. |
Phase 2: | The drug is administered to a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage. |
Phase 3: | The drug is administered to an expanded patient population, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product for approval, to establish the overall risk-benefit profile of the product, and to provide adequate information for the labeling of the product. |
Phase 4: | Post-approval studies, which are conducted following initial approval, are typically conducted to gain additional experience and data from treatment of patients in the intended therapeutic indication. |
● | restrictions on the marketing or manufacturing of the product, including total or partial suspension of production, complete withdrawal of the product from the market or product recalls; |
● | fines, warning letters or holds on post-approval clinical trials; |
● | refusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product license approvals; |
● | product seizure or detention, or refusal to permit the import or export of products; or |
● | injunctions or the imposition of civil or criminal penalties. |
● | Compliance with the EU’s stringent pharmacovigilance and safety reporting rules, pursuant to which inter alia post-authorization studies and additional monitoring obligations can be imposed, has to be ensured. |
● | The manufacturing of authorized drugs, for which a separate manufacturer’s license is mandatory, must also be conducted in strict compliance with the EMA’s GMP requirements and comparable requirements of other regulatory bodies in the EU, which mandate the methods, facilities and controls used in manufacturing, processing and packing of drugs to assure their safety and identity. |
● | The marketing and promotion of authorized drugs, including industry-sponsored continuing medical education and advertising directed toward the prescribers of drugs, cooperation with healthcare professionals and advertising of drugs directed to the general public, are strictly regulated in the EU notably under Directive 2001/83EC, as amended, and EU member state laws. |
C. | Organizational Structure |
D. | Property, Plant and Equipment |
UNRESOLVED STAFF COMMENTS |
ITEM 5. | OPERATING AND FINANCIAL REVIEW AND PROSPECTS |
● | continue the ongoing and planned preclinical and clinical development of our drug candidates; |
● | build a portfolio of drug candidates through the acquisition or in-license of drugs, drug candidates or technologies; |
● | initiate preclinical studies and clinical trials for any additional drug candidates that we may pursue in the future; |
● | seek marketing approvals for our current and future drug candidates that successfully complete clinical trials; |
● | establish a sales, marketing and distribution infrastructure to commercialize any drug candidate for which we may obtain marketing approval; |
● | develop, maintain, expand and protect our intellectual property portfolio; |
● | implement operational, financial and management systems; and |
● | attract, hire and retain additional administrative, clinical, regulatory and scientific personnel. |
● | employee-related expenses, including salaries, benefits and stock-based compensation expense; |
● | fees paid to consultants for services directly related to our drug development and regulatory effort; |
● | expenses incurred under agreements with contract research organizations, as well as contract manufacturing organizations and consultants that conduct preclinical studies and clinical trials; |
● | costs associated with preclinical activities and development activities; and |
● | costs associated with technology and intellectual property |
● | number of clinical trials required for approval and any requirement for extension trials; |
● | per patient trial costs; |
● | number of patients that participate in the clinical trials; |
● | number of sites included in the clinical trials; |
● | countries in which the clinical trial is conducted; |
● | length of time required to enroll eligible patients; |
● | potential additional safety monitoring or other studies requested by regulatory agencies; and |
● | efficacy and safety profile of the drug candidate. |
A. | Operating Results |
Year ended December 31, | Year ended December 31, | |||||||||||||||||||||||
2020 | 2019 | 2018 | 2021 | 2020 | 2019 | |||||||||||||||||||
(US$) | (US$ thousands) | |||||||||||||||||||||||
Statement of comprehensive loss data: | ||||||||||||||||||||||||
Research and development | 354,000 | 136,000 | 223,000 | 2,860 | 354 | 136, | ||||||||||||||||||
General and administrative | 1,317,000 | 553,000 | 277,000 | 4,348 | 1,317 | 553 | ||||||||||||||||||
Total operating costs | 1,671,000 | 689,000 | 500,000 | |||||||||||||||||||||
Total operating loss | 7,208 | 1,671 | 689 | |||||||||||||||||||||
Financial expenses, net | 2,162,000 | 590,000 | 328,000 | 32 | 2,162 | 590 | ||||||||||||||||||
Loss before taxes | 3,833,000 | 1,279,000 | 828,000 | 7,240 | 3,833 | 1,279 | ||||||||||||||||||
Tax expenses | 220,000 | - | - | 6 | 220 | - | ||||||||||||||||||
Net loss | 4,053,000 | 1,279,000 | 828,000 | 7,246 | 4,053 | 1,279 |
Our statements are prepared in accordance with U.S. GAAP. Some of the accounting methods and policies used in preparing our financial statements under U.S. GAAP are based on complex and subjective assessments by our management or on estimates based on past experience and assumptions deemed realistic and reasonable based on the circumstances concerned. The actual value of our assets, liabilities and shareholders’ equity and of our accumulated deficit could differ from the value derived from these estimates if conditions change and these changes had an impact on the assumptions adopted. See Note 2 to our financial statements for a description of our significant accounting policies.
We determined the fair value of the Company’s warrants using Black-Scholes model of which the most significant assumption was the underlying share price and volatility.
JOBS Act Exemptions and Foreign Private Issuer Status |
● | the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; |
● | the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; |
● | the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K, upon the occurrence of specified significant events; and |
● | Regulation FD, which regulates selective disclosures of material information by issuers. |
B. | Liquidity and Capital Resources. |
In July 2021, as a result of an exercise of warrants held by one of the Purchasers, we received gross proceeds of approximately $1.9 million.
April 9, 2021.
● | the costs, timing and outcome of manufacturing clinical trial and commercial quantities of PRF-110; |
● | the scope, progress, results and costs of our current and future clinical trials of PRF-110 for our current targeted uses; |
● | the costs, timing and outcome of regulatory review of PRF-110; |
● | the extent to which we acquire or invest in businesses, products and technologies, including entering into or maintaining licensing or collaboration arrangements for PRF-110 on favorable terms, although we currently have no commitments or agreements to complete any such transactions; |
● | the costs and timing of future commercialization activities, including drug sales, marketing, manufacturing and distribution, for any of our product candidates for which we receive marketing approval, to the extent that such sales, marketing, manufacturing and distribution are not the responsibility of any collaborator that we may have at such time; |
● | the amount of revenue, if any, received from commercial sales of PRF-110, should it receive marketing approval; |
● | the costs of preparing, filing and prosecuting patent applications, maintaining, defending and enforcing our intellectual property rights and defending intellectual property-related claims; |
● | our ability to establish strategic collaborations, licensing or other arrangements and the financial terms of any such agreements, including the timing and amount of any future milestone, royalty or other payments due under any such agreement; |
● | our headcount growth and associated costs as we expand our business operations and our research and development activities; |
● | the costs of operating as a public company; |
● | maintaining minimum shareholders’ equity requirements under the Nasdaq rules; and |
● | the impact of the COVID-19 |
Payments due by period | ||||||||||||||||||||
(US$ thousands) | ||||||||||||||||||||
Less than 1 year | 1-3 years | 3-5 years | More than 5 years | Total | ||||||||||||||||
Obligations under master clinical research organization agreement (1) | $ | 1,744 | - | - | - | 1,744 | ||||||||||||||
Obligations under master clinical trial agreement (2) | $ | 7,205 | - | - | 7,205 | |||||||||||||||
Total | $ | 1,744 | 7,205 | - | - | 8,949 |
Year ended December 31, | ||||||||||||||||||||||||
(US$ thousands) | ||||||||||||||||||||||||
2020 | 2019 | 2018 | 2021 | 2020 | 2019 | |||||||||||||||||||
Net cash used in operating activities | (2,557,000 | ) | (609,000 | ) | (635,000 | ) | (6,553 | ) | (2,557 | ) | (609 | ) | ||||||||||||
Net cash used in investing activities | (10,000 | ) | - | - | (50 | ) | (10 | ) | - | |||||||||||||||
Net cash provided by financing activities | 17,310,000 | 1,510,000 | 488,000 | 7,484 | 17,310 | 1,510 | ||||||||||||||||||
Increase in cash and cash equivalents and restricted cash | 14,743,000 | 901,000 | (147,000 | ) | 881 | 14,743 | 901 | |||||||||||||||||
Cash and cash equivalents and restricted cash, at the beginning of year | 947,000 | 46,000 | 193,000 | 15,690 | 947 | 46 | ||||||||||||||||||
Cash and cash equivalents and restricted cash, at the end of year | 15,690,000 | 947,000 | 46,000 | 16,571 | 15,690 | 947 |
C. | Research and Development, Patents and Licenses |
D. | Trend Information |
Payments due by period | ||||||||||||||||||||
Less than 1 year | 1-3 years | 3-5 years | More than 5 years | Total | ||||||||||||||||
Obligations under master clinical research organization agreement (1) | $ | 2,907,000 | - | - | - | $ | 2,907,000 | |||||||||||||
Obligations under master clinical trial agreement (2) | $ | 7,107,000 | - | - | - | $ | 7,107,000 | |||||||||||||
Total | $ | 10,014,000 | $ | 10,014,000 |
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES |
A. | Directors and Senior Management |
Name | Age | Position | ||
Senior Management | ||||
Chief Executive Officer and Chief Financial Officer | ||||
Prof. Eli Hazum | Chief Technology Officer and Director | |||
Dr. Sigal Aviel | Chief Operating Officer | |||
Vice President of Pharmaceutical Operations | ||||
Non-Employee Director | ||||
Dr. Ehud Geller | Chairman of the Board and Director | |||
Director | ||||
Dr. Ellen S. Baron(1) (2) (3)(4) | External Director | |||
External Director |
(1) | Member of the Compensation Committee |
(2) | Member of the Audit Committee |
(3) | Independent Director under Israeli Law |
(4) | Independent Director under the Nasdaq Listing Rules |
B. | Compensation |
Salaries, fees, commissions, and bonuses (in thousands of U.S. dollars) | Pension, retirement and similar benefits (in thousands of U.S. dollars) | Value of Options Granted(1) (in thousands of U.S. dollars) | ||||||||||
All senior management and directors as a group, consisting of 8 persons | 1,269 | 168 | 797 |
Salaries, fees, commissions, and bonuses (in thousands of U.S. dollars) | Pension, retirement and similar benefits (in thousands of U.S. dollars) | Value of Options Granted(1) (in thousands of U.S. dollars) | ||||||||||
All senior management and directors as a group, consisting of 10 persons | 646 | 29 | 38 |
(1) | Consists of amounts recognized as share-based compensation expense for the year ended December 31, |
Name and Position(1) | Salary | Social Benefits(2) | Bonuses | Value of Options Granted(3) | All Other Compensation(4) | Total | ||||||||||||||||||
(in thousands of U.S. dollars) | ||||||||||||||||||||||||
Ehud Geller, Chairman | - | - | - | 79 | 156 | 235 | ||||||||||||||||||
Ilan Hadar, Chief Executive Officer | 276 | 60 | 93 | 317 | 24 | 770 | ||||||||||||||||||
Eli Hazum Chief Technology Officer | - | - | - | 79 | 151 | 230 | ||||||||||||||||||
Rita Keynan Vice President of Pharmaceutical Operations | 218 | 62 | 95 | 85 | 460 | |||||||||||||||||||
Sigal Aviel Chief Operating Officer | 209 | 46 | 47 | - | - | 302 |
Name and Position(1) | Salary | Social Benefits(2) | Bonuses | Value of Options Granted(3) | All Other Compensation(4) | Total | ||||||||||||||||||
(in thousands of U.S. dollars) | ||||||||||||||||||||||||
Ehud Geller, Chairman | - | - | - | - | 150 | 150 | ||||||||||||||||||
Ilan Hadar, Chief Executive Officer | 47 | 8 | - | - | 3 | 58 | ||||||||||||||||||
Eli Hazum Chief Technology Officer | 144 | - | 36 | - | - | 180 | ||||||||||||||||||
David Weinstein Former Chief Medical Officer | 64 | - | 20 | 2 | 15 | 101 | ||||||||||||||||||
Sigal Aviel Chief Operating Officer | 117 | 21 | 27 | 36 | - | 201 |
(1) | All executive officers listed in the table were employed on a full-time basis during |
(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 amounts recognized as share-based compensation expense for the year ended December 31, |
(4) | “All Other Compensation” includes chairman of the board of directors' annual fee, automobile-related expenses pursuant to the Company’s automobile leasing program and consulting related fees. |
C. | Board Practices |
● | at least a majority of the shares of non-controlling shareholders or shareholders that do not have a personal interest in the approval voted at the meeting are voted in favor (disregarding abstentions); or |
● | the total number of shares of non-controlling shareholders or shareholders that do not have a personal interest in the approval voted against the proposal does not exceed 2% of the aggregate voting rights in the company. |
● | an employment relationship; |
● | a business or professional relationship maintained on a regular basis; |
● | control; and |
● | service as an office holder, excluding service as a director in a private company prior to the first offering of its shares to the public if such director was appointed as a director of the private company in order to serve as an external director following the initial public offering. |
● | such majority includes at least a majority of the shares held by shareholders who are non-controlling shareholders and do not have a personal interest in the election of the external director (other than a personal interest not deriving from a relationship with a controlling shareholder) that are voted at the meeting, excluding abstentions, to which we refer as a disinterested majority; or |
● | the total number of shares voted by non-controlling shareholders and by shareholders who do not have a personal interest in the election of the external director, against the election of the external director, does not exceed 2% of the aggregate voting rights in the company. |
● | his or her service for each such additional term is recommended by one or more shareholders holding at least 1% of the company’s voting rights and is approved at a shareholders meeting by a disinterested majority, where the total number of shares held by non-controlling, disinterested shareholders voting for such reelection exceeds 2% of the aggregate voting rights in the company. In such event, the external director so reappointed may not be a Related or Competing Shareholder, as defined below, or a relative of such shareholder, at the time of the appointment, and is not and has not had any affiliation with a Related or Competing Shareholder, at such time or during the two years preceding such person’s reappointment to serve an additional term as external director. The term “Related or Competing Shareholder” means a shareholder proposing the reappointment or a shareholder holding 5% or more of the outstanding shares or voting rights of the company, provided, that at the time of the reappointment, such shareholder, the controlling shareholder of such shareholder, or a company controlled by such shareholder, have a business relationship with the company or are competitors of the company; |
● | the external director proposed his or her own nomination, and such nomination was approved in accordance with the requirements described above; |
● | his or her service for each such additional term is recommended by the board of directors and is approved at a shareholders meeting by the same majority required for the initial election of an external director (as described above). |
● | he or she meets the qualifications for being appointed as an external director, except for the requirement that the director be an Israeli resident (which does not apply to companies whose securities have been offered outside of Israel or are listed outside of Israel); and |
● | he or she has not served as a director of the company for a period exceeding nine consecutive years, provided that, for this purpose, a break of less than two years in service shall not be deemed to interrupt the continuation of the service. |
● | retaining and terminating our independent auditors, subject to the ratification of the board of directors, and in the case of retention, to that of the shareholders; |
● | pre-approving of audit and non-audit services and related fees and terms, to be provided by the independent auditors; |
● | overseeing the accounting and financial reporting processes of the Company and audits of our financial statements, the effectiveness of our internal control over financial reporting and making such reports as may be required of an audit committee under the rules and regulations promulgated under the Exchange Act; |
● | reviewing with management and our independent auditor our annual and quarterly financial statements prior to publication or filing (or submission, as the case may be) to the SEC; |
● | recommending to the board of directors the retention and termination of the internal auditor, and the internal auditor’s engagement fees and terms, in accordance with the Companies Law as well as approving the yearly or periodic work plan proposed by the internal auditor; |
● | reviewing with our general counsel and/or external counsel, as deem necessary, legal and regulatory matters that could have a material impact on the financial statements; |
● | identifying irregularities in our business administration, inter alia, by consulting with the internal auditor or with the independent auditor, and suggesting corrective measures to the board of directors; and |
● | reviewing policies and procedures with respect to transactions (other than transactions related to the compensation or terms of services) between the company and officers and directors, or affiliates of officers or directors, or transactions that are not in the ordinary course of the Company’s business and deciding whether to approve such acts and transactions if so required under the Companies Law. |
● | determining whether there are deficiencies or irregularities in the business management practices of our company, including in consultation with our internal auditor or the independent auditor, and making recommendations to the board of directors to improve such practices; |
● | determining the approval process for transactions with a controlling shareholder or in which a controlling shareholder has a personal interest; |
● | determining whether to approve certain related party transactions (including transactions in which an office holder has a personal interest and whether such transaction is extraordinary or material under Companies Law) (see “— Approval of Related Party Transactions under Israeli Law”); |
● | where the board of directors approves the working plan of the internal auditor, to examine such working plan before its submission to the board of directors and proposing amendments thereto; |
● | examining our internal controls and internal auditor’s performance, including whether the internal auditor has sufficient resources and tools to dispose of its responsibilities; |
● | examining the scope of our auditor’s work and compensation and submitting a recommendation with respect thereto to our board of directors or shareholders, depending on which of them is considering the appointment of our auditor; and |
● | establishing procedures for the handling of employees’ complaints as to the management of our business and the protection to be provided to such employees. |
● | recommending whether a compensation policy should continue in effect, if the then-current policy has a term of greater than five years from the company’s initial public offering, or otherwise three years (approval of either a new compensation policy or the continuation of an existing compensation policy must in any case occur five years from the company’s initial public offering, or otherwise every three years); |
● | recommending to the board of directors periodic updates to the compensation policy; |
● | assessing implementation of the compensation policy; |
● | determining whether to approve the terms of compensation of certain office holders which, according to the Companies Law, require the committee’s approval; and |
● | determining whether the compensation terms of a candidate for the position of the chief executive officer of the company needs to be brought to approval of the shareholders according to the Companies Law. |
● | the responsibilities set forth in the compensation policy; |
● | reviewing and approving the granting of options and other incentive awards to the extent such authority is delegated by our board of directors; and |
● | reviewing, evaluating and making recommendations regarding the compensation and benefits for our non-employee directors. |
● | overseeing our corporate governance functions on behalf of the board; |
● | making recommendations to the board regarding corporate governance issues; |
● | identifying and evaluating candidates to serve as our directors consistent with the criteria approved by the board; |
● | reviewing and evaluating the performance of the board; |
● | serving as a focal point for communication between director candidates, non-committee directors and our management; selecting or recommending to the board for selection candidates to the board; and |
● | making other recommendations to the board regarding affairs relating to our directors. |
● | a person (or a relative of a person) who holds more than 5% of the company’s outstanding shares or voting rights; |
● | a person (or a relative of a person) who has the power to appoint a director or the general manager of the company; |
● | an office holder or director (or a relative of an officer or director) of the company; or |
● | a member of the company’s independent accounting firm, or anyone on its behalf. |
● | information on the advisability of a given action brought for his or her approval or performed by virtue of his or her position; and |
● | all other important information pertaining to these actions. |
● | refrain from any act involving a conflict of interest between the performance of his or her duties to the company and his or her other duties or personal affairs; |
● | refrain from any activity that is competitive with the company; |
● | refrain from exploiting any business opportunity of the company to receive a personal gain for himself or herself or others; and |
● | disclose to the company any information or documents relating to the company’s affairs which the office holder received as a result of his or her position as an office holder. |
● | a transaction other than in the ordinary course of business; |
● | a transaction that is not on market terms; or |
● | a transaction that may have a material impact on the company’s profitability, assets, or liabilities. |
● | an amendment of the articles of association of the company; |
● | an increase in the company’s authorized share capital; |
● | a merger; or |
● | the approval of related party transactions and acts of office holders that require shareholder approval. |
● | financial liability imposed on him or her in favor of another person pursuant to a judgment, including a settlement or arbitrator’s award approved by a court. However, if an undertaking to indemnify an office holder with respect to such liability is provided in advance, then such an undertaking must be limited to events which, in the opinion of the board of directors, can be foreseen based on the company’s activities when the undertaking to indemnify is given, and to an amount or according to criteria determined by the board of directors as reasonable under the circumstances, and such undertaking must detail the abovementioned foreseen events and amount or criteria; |
● | reasonable litigation expenses, including attorneys’ fees, incurred by the office holder: (i) as a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation or proceeding, provided that (a) no indictment was filed against such office holder as a result of such investigation or proceeding and (b) no financial liability was imposed upon him or her as a substitute for the criminal proceeding as a result of such investigation or proceeding or, if such financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent; and (ii) in connection with a monetary sanction; |
● | expenses associated with an administrative procedure, as defined in the Israeli Securities Law, conducted regarding an office holder, including reasonable litigation expenses and reasonable attorneys’ fees; and |
● | reasonable litigation expenses, including attorneys’ fees, incurred by the office holder or imposed by a court in proceedings instituted against him or her by the company, on its behalf, or by a third party or in connection with criminal proceedings in which the office holder was acquitted or as a result of a conviction for an offense that does not require proof of criminal intent. |
● | a breach of duty of care to the company or to a third party, including a breach arising out of the negligent conduct of the office holder; |
● | a breach of fiduciary duty to the company, to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company; |
● | a monetary liability imposed on the office holder in favor of a third party; and |
● | expenses incurred by an office holder in connection with an administrative procedure, including reasonable litigation expenses and reasonable attorneys’ fees. |
● | a breach of fiduciary duty, except for indemnification and insurance for a breach of the fiduciary duty to the company and to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company; |
● | a breach of duty of care committed intentionally or recklessly, excluding a breach arising out of the negligent conduct of the office holder; |
● | an act or omission committed with intent to derive illegal personal benefit; or |
● | a fine or forfeit levied against the office holder. |
D. | Employees. |
E. | Share Ownership. |
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS |
A. | Major Shareholders |
● | each of our directors and senior management; |
● | all of our directors and senior management as a group; and |
● | each person (or group of affiliated persons) known by us to be the beneficial owner of 5% or more of the outstanding ordinary shares. |
Ordinary Shares Beneficially Owned | Percentage Owned** | |||||||
Senior Management and Directors | ||||||||
Ilan Hadar(1) | - | - | ||||||
Dr. Ehud Geller(2) | 3,292,250 | 32.7 | % | |||||
Dr. Sigal Aviel(3) | 89,540 | * | ||||||
Rita Keynan(4) | - | - | ||||||
Prof. Eli Hazum(5) | 153,882 | 1.5 | % | |||||
Ellen S. Baron(6) | - | - | ||||||
Augustine Lawlor(6) | - | - | ||||||
Efi Cohen-Arazi(6) | - | - | ||||||
All senior management and directors as a group (8 persons) | 3,535,672 | 34.3 | % | |||||
More than 5% Shareholders | ||||||||
XT Hi-Tech Investments (1992) Ltd. (7) | 1,752,959 | 17.4 | % | |||||
D Partners 2 (8) | 571,289 | 5.7 | % | |||||
Medica III Investment group (2) | 3,292,250 | 32.7 | % | |||||
Armistice Capital, LLC(9) | 839,346 | 8.3 | % |
Ordinary Shares Beneficially Owned | Percentage Owned** | |||||||
Senior Management and Directors | ||||||||
Ilan Hadar(1) | 90,769 | 0.8 | % | |||||
Dr. Ehud Geller(2) | 3,310,417 | 30.2 | % | |||||
Dr. Sigal Aviel(3) | 102,331 | 0.9 | % | |||||
Rita Keynan(4) | 40,467 | 0.4 | % | |||||
Prof. Eli Hazum(5) | 172,049 | 1.6 | % | |||||
Ellen S. Baron(6) | 18,167 | 0.2 | % | |||||
Augustine Lawlor(6) | 18,167 | 0.2 | % | |||||
Efi Cohen-Arazi(6) | 18,167 | 0.2 | % | |||||
All senior management and directors as a group (8 persons) | 3,770,532 | 34.4 | % | |||||
More than 5% Shareholders | ||||||||
XT Hi-Tech Investments (1992) Ltd. (7) | 852,959 | 8.1 | % | |||||
Medica III Investment group (2) | 3,310,417 | 30.2 | % |
* | Less than 1% |
(1) | Consists of options to purchase 90,769 ordinary shares exercisable at $5.738 per share and expiring on November 24, 2030. Does not include options to purchase 2022. |
(2) | Consists of 3,292,250 beneficially owned by the Medica III Investment group which includes Medica III Investments (International) L.P. which holds 1,112,745 ordinary shares, Medica III Investments (Israel) L.P. which holds 404,455 ordinary shares, Medica III Investments (S.F.) L.P. which holds 439,574 ordinary shares, Medica III Investments (P.F.) L.P. which holds 236,573 ordinary shares, Medica III Investments (Israel) (B) L.P. which holds 571,429 ordinary shares, and Poalim Medica III Investments L.P. which holds 527,474 ordinary shares. The beneficial owners under Medica Group are: MCP Opportunity Secondary Program III L.P 10.57%, NYC Police Pension Fund 8.8%, Quantum Partners LDC 13.2%, Migdal Insurance Company Ltd 8.8%. None of which include individuals who hold more than 5% interest. Medica III Management L.P., an entity held 50% by Dr. Ehud Geller and 50% by Batsheva Elran, is the managing entity of Medica III Fund. The principal business address of Medica III Investment is 60C Medinat Hayehudim, Herzliya, 4676670, Israel. Does not include options to purchase |
(3) | Consists of options to purchase |
(4) | Consists of options to purchase 40,467 ordinary shares exercisable at $5.738 per share and expiring on January 1, 2031. Does not include options to purchase |
(5) | Consists of options to purchase 153,882 ordinary shares exercisable at $0.24 per share and expiring on April 2, |
2024 and options to purchase 18,167 ordinary shares exercisable at $4.50 per share and expiring on February 23, 2031. Does not include options to purchase |
(6) | Consists of options to purchase 18,167 ordinary shares exercisable at $4.50 per share and expiring on February 23, 2031. Does not include options to purchase 41,833 ordinary shares exercisable at $4.50 per share and expiring on February 23, 2031, that vest in more than 60 days from March 15, 2022. |
(7) | The following information is based on a Schedule 13G filed on January 25, 2022. XT Hi-Tech Investments (1992) Ltd., or XT Hi-Tech, is |
B. | Related Party Transactions |
C. | Interests of Experts and Counsel |
FINANCIAL INFORMATION. |
A. | Statements and Other Financial Information. |
B. | Significant Changes |
THE OFFER AND LISTING |
A. | Offer and Listing Details |
B. | Plan of Distribution |
C. | Markets |
D. | Selling Shareholders |
E. | Dilution |
F. | Expenses of the Issue |
ADDITIONAL INFORMATION |
A. | Share Capital |
B. | Memorandum and Articles of Association |
C. | Material Contracts |
D. | Exchange Controls |
E. | Taxation. |
● | amortization over an eight-year period of the cost of patents and rights to use a patent and know-how which were purchased in good faith and are used for the development or advancement of the Industrial Enterprise; |
● | deduction over a three-year period of expenses incurred in connection with the issuance and listing of shares on a stock market; and |
● | under certain conditions, an election to file tax returns with related Israeli Industrial Companies. |
● | owns a Preferred Enterprise, which is defined as an “Industrial Enterprise” (as defined under the Investment Law) that is classified as either a “Competitive Enterprise” (as defined under the Investment Law) or a “Competitive Enterprise in the Field of Renewable Energy” (as defined under the Investment Law); |
● | is controlled and managed from Israel; |
● | is not a “Family Company,” a “Home Company,” or a “Kibbutz” (collective community) as defined under the Income Tax Ordinance; |
● | keeps acceptable books of account and files reports in accordance with the provisions of the Investment Law and the Income Tax Ordinance; and |
● | was not, and certain officers of which were not, convicted of certain crimes in the 10 years prior to the tax year with respect to which benefits are being claimed. |
F. | Dividends and Paying Agents |
G. | Statement by Experts |
H. | Documents on Display |
I. | Subsidiary Information. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES |
A. | Debt Securities. |
B. | Warrants and rights. |
C. | Other Securities. |
D. | American Depositary Shares |
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES |
ITEM 14. | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |
ITEM 15. | CONTROLS AND PROCEDURES |
AUDIT COMMITTEE FINANCIAL EXPERT |
ITEM 16B. | CODE OF ETHICS |
ITEM 16C. | PRINCIPAL ACCOUNTANT FEES AND SERVICES |
Year Ended December 31, | Year Ended December 31, | |||||||||||||||
2020 | 2019 | 2021 | 2020 | |||||||||||||
(USD in thousands) | ||||||||||||||||
Audit fees (1) | 80 | 135 | 141 | 107 | ||||||||||||
Audit-related fees | - | - | - | - | ||||||||||||
Tax fees | - | - | - | - | ||||||||||||
All other fees | - | - | - | 45 | ||||||||||||
Total | 80 | 135 | 141 | 152 |
(1) | The audit fees for the years ended December 31, |
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES |
ITEM 16E. | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS |
ITEM |
ITEM 16G. CORPORATE GOVERNANCE |
● | Shareholder approval. We will seek shareholder approval for all corporate actions requiring such approval under the requirements of the Companies Law, rather than seeking approval for corporate actions in accordance with Nasdaq Listing Rule 5635. In particular, under this Nasdaq Listing Rule, shareholder approval is generally required for: (i) an acquisition of shares or assets of another company that involves the issuance of 20% or more of the acquirer’s shares or voting rights or if a director, officer or 5% shareholder has greater than a 5% interest in the target company or the consideration to be received; (ii) the issuance of shares leading to a change of control; (iii) adoption or amendment of equity compensation arrangements; and (iv) issuances of 20% or more of the shares or voting rights (including securities convertible into, or exercisable for, equity) of a listed company via a private placement (or via sales by directors, officers or 5% shareholders) if such equity is issued (or sold) at below the greater of the book or market value of shares. By contrast, under the Companies Law, shareholder approval is required (subject to certain limited exceptions) for, among other things: (a) transactions with directors concerning the terms of their service (including indemnification, exemption, and insurance for their service or for any other position that they may hold at a company), for which approvals of the compensation committee, board of directors, and shareholders are all required; (b) extraordinary transactions with controlling shareholders of publicly held companies, which require the special approval described below under “Disclosure of Personal Interests of Controlling Shareholders and Approval of Certain Transactions;” (c) terms of office and employment or other engagement of our controlling shareholder, if any, or such controlling shareholder’s relative, which require the special approval described below under “Disclosure of Personal Interests of Controlling Shareholders and Approval of Certain Transactions;” (d) approval of transactions with Company’s Chief Executive Officer with respect to his or hers compensation, whether in accordance with the approved compensation policy of the Company or not in accordance with the approved compensation policy of the Company, or transactions with officers of the Company not in accordance with the approved compensation policy; and (e) approval of the compensation policy of the Company for office holders. In addition, under the Companies Law, a merger requires approval of the shareholders of each of the merging companies. |
● | Nomination of our directors. Israeli law and our amended articles of association do not require director nominations to be made by a nominating committee of our board of directors consisting solely of independent directors, as required under the Listing Rules of the Nasdaq Stock Market. We rely on the exemption available to foreign private issuers under the Nasdaq Listing Rules and follow Israeli law and practice with regard to the process of nominating directors, in accordance with which directors are recommended by our board of directors for election by our shareholders (other than directors elected by our board of directors to fill a vacancy). |
● | Quorum requirement. Under our amended and restated articles of association and as permitted under the Companies Law, a quorum for any meeting of shareholders shall be the presence of at least two shareholders present in person, by proxy or by a written ballot, who hold at least 25% of the voting power of our shares (or if a higher percentage is required by law, such higher percentage) instead of 33 1/3% of the issued share capital required under the Nasdaq Listing Rules. If within half an hour from the time designated for the meeting a quorum is not present, them will stand adjourned to the same day in the following week, at the same time and place. If a quorum is not present at the adjourned meeting within half hour from the time designated for its start, the meeting shall take place with any number of participants. |
● | Periodic reports. As opposed to making periodic reports to shareholders and proxy solicitation materials available to shareholders in the manner specified by the Nasdaq Marketplace Rules, the Companies Law does not require us to distribute periodic reports directly to shareholders, and the generally accepted business practice in Israel is not to distribute such reports to shareholders but to make such reports available through a public website. We will only mail such reports to shareholders upon request; and |
● | Compensation of officers. We follow Israeli law and practice with respect to the approval of officer compensation. While our compensation committee currently complies with the provisions of the Nasdaq Listing Rules relating to composition requirements and Israeli law generally requires that the compensation of the chief executive officer and all other executive officers be approved, or recommended to the board for approval, by the compensation committee (and in certain instances, shareholder approval is required), Israeli law includes relief from compensation committee approval in certain instances. For details regarding the approvals required under the Israeli Companies Law and regulation promulgated thereunder for the approval of compensation of the chief executive officer, all other executive officers and directors, see Item 6C “Directors, Senior Management and Employees— Board Practices — Approval of Related Party Transactions under Israeli Law — Disclosure of Personal Interests of an Office Holder and Approval of Certain Transactions”). |
MINE SAFETY DISCLOSURE |
We have elected to provide financial statements and related information pursuant to Item 18.
The financial statements and the related notes required by this Item are included in this Annual Report on Form 20-F beginning on page F-1.
98
100 PAINREFORM LTD. FINANCIAL STATEMENTS AS OF DECEMBER 31, 2021 U.S. DOLLARS IN THOUSANDS INDEX
To the Opinion on the Financial Statements We have audited the accompanying balance Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our We conducted our Our /s/ Kesselman & Kesselman Certified Public Accountants (Isr.) A member of PricewaterhouseCoopers International Limited Tel-Aviv, Israel March 16, 2022 We have served as the Company’s auditor since 2021 F - 2 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and Board of Directors of PainReform Ltd. Opinion on the Financial Statements We have audited the accompanying balance sheet of PainReform Ltd. (the "Company") as of December 31, 2020, the related statements of comprehensive loss, changes in shareholders’ deficit and cash flows for each of the two years in the period ended December 31, 2020, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Certified Public Accountants A Firm in the Deloitte Global Network Tel Aviv, Israel March 18, 2021 We have served as the Company's auditor since 2008. F - PAINREFORM LTD.
The accompanying notes are an integral part of the financial statements. F - 4 PAINREFORM LTD.
(*) Share and per share
The accompanying notes are an integral part of the financial statements. F - 5 PAINREFORM LTD. U.S. dollars in thousands (except share data)
The accompanying notes are an integral part of the financial statements. F - PAINREFORM LTD. U.S. dollars in thousands (except share data)
PAINREFORM LTD.
The accompanying notes are an integral part of the financial statements. F - PAINREFORM LTD. U.S. dollars in thousands, except share and per share data
Since its inception, the Company has devoted substantially all of its efforts to research and development, clinical trials, and capital raising activities. The Company is still in its development and clinical stage and has not yet generated revenues. The Company has incurred losses of $7,246, $4,053 and $1,279 for the years ended December 31, 2021, 2020 and 2019, respectively. As of December 31, 2021, the Company’s accumulated deficit was $23,727. The Company has funded its operations to date primarily through equity financing. Additional funding will be required to complete the Company’s research and development and clinical trials, to attain regulatory approvals, to begin the commercialization efforts of the Company’s product and to achieve a level of sales adequate to support the Company’s cost structure. On March 11, 2021, the Company closed a private placement of 1,304,346 ordinary shares and accompanying warrants to purchase an aggregate of up to 652,173 ordinary shares at a combined purchase price of $4.60 per share and accompanying warrant resulting in gross proceeds of $6,000. The warrants are exercisable immediately at an exercise price of $4.60 per share and expire five and a half years from the issuance date. On July 22 2021, the Company issued 419,673 ordinary shares upon exercise of warrants for consideration totalling $1,930 (Note 9). Based on the Company's current operating plan, the Company believes that its existing capital resources will be sufficient to fund operations for at least twelve months after the date the financial statements are issued.
On September 3, 2020, the Company closed its initial public offering ("IPO") of 2,500,000 units at a price of $8.00 per unit. Each unit consisted of one ordinary share and one warrant to purchase one ordinary share. The ordinary shares and warrants were immediately separable from the units and were issued separately. The warrants are exercisable immediately, expire five years from the date of issuance and have an exercise price of $8.80 per share. On October 5, 2020, the underwriters exercised their over-allotment option and were issued warrants to purchase 375,000 ordinary shares in return for net amount of $3. The Company received gross proceeds of approximately $20,000 (net proceeds of approximately $17.3 million after deducting underwriting discounts and commissions and other offering expenses). F - 9 PAINREFORM LTD. NOTES TO FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data
The financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The significant accounting policies described below have been applied consistently in relation to all the periods presented, unless otherwise stated.
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company evaluates on an ongoing basis its assumptions. The Company’s management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates.
The Company’s functional currency is the U.S. dollar (“dollar” or “$”) since the dollar is the currency of the primary economic environment in which the Company has operated and expects to continue to operate in the foreseeable future. Transactions and balances denominated in dollars are presented at their original amounts. Transactions and balances denominated in currencies other than dollars have been re-measured to F - 10 PAINREFORM LTD. NOTES TO FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data
Cash equivalents are short-term highly liquid investments that are readily convertible to cash with original maturities of three months or less at acquisition.
As of December 31, 2021 and 2020, the Company’s restricted cash consisted of immaterial bank deposits that were denominated in New Israeli Shekel. Restricted deposits are presented at cost including accrued interest. These bank deposits are used as securities for the Company's credit card and rent guaranty.
The carrying values of Company’s financial assets and liabilities, including cash and cash equivalents, restricted cash, other current assets, trade payables and other accounts payable approximate their fair value due to the short-term maturity of these instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. Assets and liabilities recorded at fair value in the financial statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels are directly related to the amount of subjectivity with the inputs to the valuation of these assets or liabilities as follows: Level 1 - Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date; Level 2 - Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable inputs for similar assets or liabilities. These include quoted prices for identical or similar assets or liabilities in active markets and quoted prices for identical or similar assets of liabilities in markets that are not active; Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets at the following rates:
*The depreciable life of leasehold improvements is limited by the expected lease term, unless there is a transfer of title or a purchase option for the leased asset reasonably certain of exercise.
Research and development costs include costs of payroll and related expenses of employees, subcontractors and consultants and other costs related to the Company's operation of its planned clinical trial. Research and development expenses are charged to the statements of comprehensive loss as incurred. Clinical trial costs are a significant component of research and development expenses and include costs associated with third-party contractors. The Company outsources its clinical trial activities utilizing external entities such as clinical research organizations, independent clinical investigators, and other third-party service providers to assist the Company with the execution of its clinical trials. Clinical trial costs are expensed as incurred. F - PAINREFORM LTD. NOTES TO FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data
The Company accounts for income taxes in accordance with ASC 740, “Income Taxes”. ASC 740 prescribes the use of the asset and liability method whereby deferred tax The Company implements a two-step approach to recognize and measure uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents and restricted cash. Cash and cash equivalents and restricted cash are invested in a major bank in Management believes that the The Company
Proceeds from the sale of notes with a conversion feature are allocated to equity based on the intrinsic value of such conversion feature (if any) in accordance with ASC 470-20 “Debt with Conversion and Other Options”, with a corresponding discount on the notes recorded in liabilities which is amortized in finance expense over the term of the notes. Convertible notes with convertible features that are determined to not be beneficial are allocated entirely to liabilities. F - PAINREFORM LTD. NOTES TO FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data
Financial equity instruments that do not meet the US GAAP criteria for equity classification are classified as a liability at fair value and are adjusted to fair value at each reporting period. Changes in fair value are recognized in the Company’s statements of comprehensive loss in accordance with ASC 815,
Basic loss per share is computed by dividing the loss for the period applicable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. For the years ended December 31, 2021, 2020 The loss and the weighted average number of shares used in computing basic and diluted net loss per share is as follows:
Share-based compensation to employees and consultants is accounted for in accordance with ASC 718, “Compensation - Share Compensation” (“ASC 718”), which requires estimation of the fair value of share-based payment awards on the date of grant. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service period using the graded vesting method. The Company has elected to recognize forfeitures, as incurred. The fair value of share options granted was estimated using the Black Scholes model, which requires a number of assumptions, of which the most significant are the expected share price, volatility, and the expected option term. Expected volatility was calculated based on comparable public companies in the same industry. The expected share option term is calculated for share options granted using the “simplified” method. The risk-free interest rate is based on the yield from U.S. treasury bonds with an equivalent term. The expected dividend yield assumption is based on the Company’s historical experience and expectation of no future dividend F - PAINREFORM LTD. NOTES TO FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data
The Company capitalizes certain legal and other third-party fees that are directly related to the Company’s in-process equity financings until such financings are consummated. After the consummation of such equity financings, these costs are recorded as a reduction of the respective gross proceeds. Should a planned equity financing be abandoned, terminated or significantly delayed, the deferred offering costs are written off to operating expenses. As of December 31,
The Company has one operating segment. An operating segment is defined as a component that engages in
Right of Use ("ROU") assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company elected the practical expedient of the short-term lease recognition exemption for all leases with a term shorter than 12 months
remove certain exceptions. Effective January 1,
In August 2020, the FASB issued guidance that is expected to reduce complexity and improve comparability of financial reporting associated with accounting for convertible instruments and contracts in an entity’s own equity. This guidance will be effective for the Company on January 1, 2022 and is not expected to have a material impact on the Company’s financial statements and disclosures. F - PAINREFORM LTD. NOTES TO FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data
During the year ended December 31, 2019, the Company issued warrants related to its convertible notes (refer to Note A summary of significant unobservable inputs (Level 3 inputs) used in measuring
F - 15 PAINREFORM LTD. NOTES TO FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data
The following table presents changes in the fair value of the derivative warrant liability recorded in respect of the warrants:
Concurrent with the closing of the IPO, all of the Company’s convertible notes (inclusive of accrued interest on all outstanding notes) were converted into 2,415,022 units (consisting of one ordinary share and one warrant to purchase one ordinary share).
On September 3, 2020, upon consummation of the IPO, the outstanding balance of the 2019 Convertible Notes was converted into 312,170 units, each consisting of one ordinary share and one warrant to purchase one ordinary Additionally, on the IPO consummation date, the amount and exercise price of the warrants originally granted in August and December 2019,
As a result of the issuance of the Agents' Warrants, the Company recorded a discount on the convertible note, which was amortized as financial expense amounting to $65 for the year ended December 31, 2020. F - PAINREFORM LTD. NOTES TO FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data
Taxable income of the Company is subject to the Israeli Corporate tax rate which was 23% for the years ended December 31,
As of December 31,
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows:
In assessing the realization of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences are deductible and net operating losses are utilized. Based on consideration of these factors, the Company recorded a full valuation allowance on December 31, 2020.
The primary difference between the statutory tax rate of the Company and the effective rate results virtually from the changes in valuation allowance in respect of carry forward tax losses, share based compensation expenses and research and development expenses due to the uncertainty of the realization of such tax benefits.
A reconciliation of the opening and closing amounts of total unrecognized tax benefits is as follows:
The balance of total unrecognized tax The Company recognizes interest and penalties, if any, related to unrecognized tax F - PAINREFORM LTD. NOTES TO FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data
Convertible Preferred Shares: Convertible preferred shares consisted of the following:
The preferred shares conferred upon their holders all rights accruing to holders of ordinary shares On September 3, 2020, upon consummation of the IPO, all of the Company’s outstanding convertible preferred shares were converted into 2,954,267 ordinary shares. F - 18 PAINREFORM LTD. NOTES TO FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data
Ordinary shares: The ordinary shares confer upon their holders the right to participate and vote in general shareholder meetings of the Company and to share in the distribution of dividends, if any, declared by the Company, and rights to receive a distribution of assets upon liquidation. Shares developments:
On October 5, 2020 the underwriters exercised their over-allotment option and were issued warrants to purchase 375,000 ordinary shares in return for net amount of $3. The warrants are exercisable through September 3, 2025, at an exercise price of $8.80.
On July 22, 2021, as a result of an exercise of warrants to purchase 419,673 shares held by one of the Purchasers, the Company received gross proceeds of $1,930. In connection with the private placement, the Company also entered into a Registration Rights Agreement, dated as of March 8, 2021, with the Purchasers (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, the Company filed a registration statement (the “Registration Statement”), with the SEC to register the resale of the ordinary shares and the ordinary shares issuable upon exercise of the warrants. The Registration Statement was declared effective on April 9, 2021. The Company paid the placement agents of the private placement a cash placement fee equal to $390 and an expense reimbursement of $40. The Company also issued to the placement agents warrants to purchase 52,173 ordinary shares, at an exercise price of $5.06 per ordinary share and a term expiring on March 10, 2026. The Company paid a total of approximately $500 in placement agent fees and other expenses. F - PAINREFORM LTD. NOTES TO FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data
Warrants and warrants units The following table summarizes the warrants and warrants units outstanding as of December 31,
(*) Each warrant is exercisable into
On August 7, 2008, the Board of Directors approved the adoption of the 2008 Share Option Plan (the “2008 Plan”).
F - PAINREFORM LTD. NOTES TO FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data
On July 2, 2019, the Board of Directors approved the adoption of the 2019 Share Option Plan (the “2019 Plan”). Under the 2019 Plan, the Company may grant its officers, directors, employees and consultants share options of the Company. Each share option granted shall be exercisable at such times and terms and conditions as the Board of Directors may specify in the applicable share option agreement, provided that no share option will be granted with a term in excess of 10 years. Upon the adoption of the 2019 Plan, the Company reserved for issuance On In January through May 2021 the The following table summarizes information about options granted
F - 21 PAINREFORM LTD. NOTES TO FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data
The Company recognized The following table summarizes information about share options outstanding and exercisable in 2019 plan to employees and directors
The intrinsic value of share options outstanding as of December 31, 2021 and 2020 was $224 and respectively.
F - PAINREFORM LTD. NOTES TO FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data
F - PAINREFORM LTD. NOTES TO FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data
The sublease ceased as of August 2019, and
Balances with related parties:
Transactions with related parties:
F - |