Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 07, 2022 | |
Cover [Abstract] | ||
Entity Registrant Name | ENTERA BIO LTD. | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2022 | |
Entity Central Index Key | 0001638097 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Amendment Flag | false | |
Entity Current Reporting Status | Yes | |
Entity Common Stock, Shares Outstanding | 28,809,922 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Entity Shell Company | false | |
Entity Small Business | true | |
Entity Interactive Data Current | Yes | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Incorporation, State or Country Code | L3 | |
Entity Address, Address Line One | Kiryat Hadassah | |
Entity Address, Address Line Two | Minrav Building – Fifth Floor | |
Entity Address, City or Town | Jerusalem | |
Entity Address, Postal Zip Code | 9112002 | |
Entity Address, Country | IL | |
City Area Code | 972 | |
Local Phone Number | 2-532-7151 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-38556 | |
Entity Tax Identification Number | 00-0000000 | |
Trading Symbol | ENTX | |
Security Exchange Name | NASDAQ | |
Title of 12(b) Security | Ordinary Shares |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | |
CURRENT ASSETS: | |||
Cash and cash equivalents | $ 14,323 | $ 24,892 | |
Accounts receivable | 233 | 183 | |
Other current assets | 634 | 254 | |
TOTAL CURRENT ASSETS | 15,190 | 25,329 | |
NON-CURRENT ASSETS: | |||
Property and equipment, net | 152 | 156 | |
Operating lease right-of-use assets | 126 | 239 | |
Deferred income taxes | 66 | 217 | |
Funds in respect of employee rights upon retirement | 6 | 46 | |
TOTAL NON-CURRENT ASSETS | 350 | 658 | |
TOTAL ASSETS | 15,540 | 25,987 | |
CURRENT LIABILITIES: | |||
Accounts payable | 413 | 166 | |
Accrued expenses and other payables | 651 | 2,801 | |
Current maturities of operating lease | 129 | 179 | |
Contract liabilities | 0 | 15 | |
TOTAL CURRENT LIABILITIES | 1,193 | 3,161 | |
NON-CURRENT LIABILITIES: | |||
Operating lease liabilities | 3 | 123 | |
Liability for employee rights upon retirement | 32 | 138 | |
TOTAL NON-CURRENT LIABILITIES | 35 | 261 | |
TOTAL LIABILITIES | 1,228 | 3,422 | |
COMMITMENTS AND CONTINGENCIES | |||
SHAREHOLDERS' EQUITY: | |||
Ordinary Shares, NIS 0.0000769 par value: Authorized - as of September 30, 2022 and December 31, 2021, 140,010,000 shares; issued and outstanding: - as of September 30, 2022 and December 31, 2021, 28,809,922 and 28,804,411 shares, respectively | [1] | ||
Additional paid-in capital | 106,733 | 104,950 | |
Accumulated other comprehensive income | 41 | 41 | |
Accumulated deficit | (92,462) | (82,426) | |
TOTAL SHAREHOLDERS' EQUITY | 14,312 | 22,565 | |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 15,540 | $ 25,987 | |
[1]Represents an amount less than one thousand US dollars |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) (Unaudited) - ₪ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Ordinary share, par value | ₪ 0.0000769 | ₪ 0.0000769 |
Ordinary shares, authorized | 140,010,000 | 140,010,000 |
Ordinary shares, issued | 28,809,922 | 28,804,411 |
Ordinary shares, outstanding | 28,809,922 | 28,804,411 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
REVENUES | $ 8 | $ 140 | $ 120 | $ 406 |
COST OF REVENUES | 6 | 65 | 93 | 237 |
GROSS PROFIT | 2 | 75 | 27 | 169 |
OPERATING EXPENSES: | ||||
Research and development | 1,413 | 1,771 | 4,497 | 4,122 |
General and administrative | 1,460 | 1,535 | 5,512 | 4,208 |
Other income | (6) | (11) | (33) | (32) |
TOTAL OPERATING EXPENSES | 2,867 | 3,295 | 9,976 | 8,298 |
OPERATING LOSS | 2,865 | 3,220 | 9,949 | 8,129 |
FINANCIAL (INCOME) LOSS, NET | 8 | 7 | (96) | 2 |
LOSS BEFORE INCOME TAX | 2,873 | 3,227 | 9,853 | 8,131 |
INCOME TAX BENEFIT (EXPENSES) | 194 | (13) | 183 | (44) |
NET LOSS | $ 3,067 | $ 3,214 | $ 10,036 | $ 8,087 |
LOSS PER SHARE BASIC | $ 0.11 | $ 0.11 | $ 0.35 | $ 0.32 |
LOSS PER SHARE DILUTED | $ 0.11 | $ 0.11 | $ 0.35 | $ 0.32 |
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING USED IN COMPUTATION OF BASIC LOSS PER SHARE | 28,809,922 | 28,680,833 | 28,807,470 | 25,203,221 |
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING USED IN COMPUTATION OF DILUTED LOSS PER SHARE | 28,809,922 | 28,680,833 | 28,807,470 | 25,203,221 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands | Ordinary shares [Member] | Additional paid-in capital [Member] | Accumulated other Comprehensive income [Member] | Accumulated deficit [Member] | Total | |
Balance at Dec. 31, 2020 | [1] | $ 77,708 | $ 41 | $ (70,239) | $ 7,510 | |
BALANCE (in shares) at Dec. 31, 2020 | 21,057,922 | |||||
CHANGES DURING THE YEAR ENDED | ||||||
Net loss | $ 0 | 0 | 0 | (8,087) | (8,087) | |
Issuance of shares due to the ATM program, net of issuance costs | [1] | 21,805 | 0 | 0 | 21,805 | |
Issuance of shares due to the ATM program, net of issuance costs (in shares) | 4,386,728 | |||||
Exercise of options to ordinary shares | [1] | 397 | 0 | 0 | 397 | |
Exercise of options to ordinary shares (in shares) | 157,711 | |||||
Exercise of warrants to ordinary shares | [1] | 3,158 | 0 | 0 | 3,158 | |
Exercise of warrants to ordinary shares (in shares) | 3,175,050 | |||||
Share-based compensation | $ 0 | 1,493 | 0 | 0 | 1,493 | |
Vested restricted share units | $ 0 | 0 | 0 | 0 | 0 | |
Vested restricted share units (in shares) | 7,000 | |||||
BALANCE (in shares) at Sep. 30, 2021 | 28,784,411 | |||||
Balance at Sep. 30, 2021 | [1] | 104,561 | 41 | (78,326) | 26,276 | |
Balance at Jun. 30, 2021 | [1] | 101,348 | 41 | (75,112) | 26,277 | |
BALANCE (in shares) at Jun. 30, 2021 | 28,286,211 | |||||
CHANGES DURING THE YEAR ENDED | ||||||
Net loss | $ 0 | 0 | 0 | (3,214) | (3,214) | |
Issuance of shares due to the ATM program, net of issuance costs | [1] | 2,463 | 0 | 0 | 2,463 | |
Issuance of shares due to the ATM program, net of issuance costs (in shares) | 440,463 | |||||
Exercise of options to ordinary shares | [1] | 122 | 0 | 0 | 122 | |
Exercise of options to ordinary shares (in shares) | 57,737 | |||||
Share-based compensation | $ 0 | 628 | 0 | 0 | 628 | |
BALANCE (in shares) at Sep. 30, 2021 | 28,784,411 | |||||
Balance at Sep. 30, 2021 | [1] | 104,561 | 41 | (78,326) | 26,276 | |
Balance at Dec. 31, 2021 | [1] | 104,950 | 41 | (82,426) | 22,565 | |
BALANCE (in shares) at Dec. 31, 2021 | 28,804,411 | |||||
CHANGES DURING THE YEAR ENDED | ||||||
Net loss | $ 0 | 0 | 0 | (10,036) | (10,036) | |
Exercise of options to ordinary shares | [1] | 13 | 0 | 0 | 13 | |
Exercise of options to ordinary shares (in shares) | 5,511 | |||||
Share-based compensation | $ 0 | 1,770 | 0 | 0 | 1,770 | |
BALANCE (in shares) at Sep. 30, 2022 | 28,809,922 | |||||
Balance at Sep. 30, 2022 | [1] | 106,733 | 41 | (92,462) | 14,312 | |
Balance at Jun. 30, 2022 | [1] | 106,623 | 41 | (89,395) | 17,269 | |
BALANCE (in shares) at Jun. 30, 2022 | 28,809,922 | |||||
CHANGES DURING THE YEAR ENDED | ||||||
Net loss | $ 0 | 0 | 0 | (3,067) | (3,067) | |
Share-based compensation | $ 0 | 110 | 0 | 0 | 110 | |
BALANCE (in shares) at Sep. 30, 2022 | 28,809,922 | |||||
Balance at Sep. 30, 2022 | [1] | $ 106,733 | $ 41 | $ (92,462) | $ 14,312 | |
[1]Represents an amount less than one thousand US dollars. |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (10,036) | $ (8,087) |
Adjustments required to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 48 | 39 |
Deferred income taxes | 151 | (166) |
Share-based compensation | 1,770 | 1,493 |
Finance income, net | (74) | (6) |
Changes in operating asset and liabilities: | ||
Decrease (increase) in accounts receivable | (50) | 3 |
Increase in other current assets | (380) | (198) |
Increase in accounts payable | 247 | 161 |
Increase (decrease) in accrued expenses and other payables | (2,149) | 368 |
Decrease in contract liabilities | (15) | (158) |
Net cash used in operating activities | (10,488) | (6,551) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Funds with respect to employee rights upon retirement | (55) | 0 |
Purchase of property and equipment | (44) | (7) |
Net cash used in investing activities | (99) | (7) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of shares through ATM programs, net of issuance costs | 0 | 21,805 |
Exercise of options and warrants into shares | 13 | 3,555 |
Net cash provided by financing activities | 13 | 25,360 |
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (10,574) | 18,802 |
CASH, CASH EQUIVALENTS AND RESTRICTED DEPOSITS AT BEGINNING OF THE PERIOD | 24,964 | 8,663 |
CASH, CASH EQUIVALENTS AND RESTRICTED DEPOSITS AT END OF THE PERIOD | 14,390 | 27,465 |
Reconciliation in amounts on consolidated balance sheets: | ||
Cash and cash equivalents | 14,323 | 27,395 |
Restricted deposits included in other current assets | 67 | 70 |
Total cash and cash equivalents and restricted cash | 14,390 | 27,465 |
SUPPLEMENTARY INFORMATION ON INVESTING AND FINANCING ACTIVITIES NOT INVOLVING CASH FLOWS: | ||
Operating lease right of use assets obtained in exchange for new operating lease liabilities | 0 | 31 |
SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION: | ||
Income taxes paid | $ 165 | $ 2 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | NOTE 1 - DESCRIPTION OF BUSINESS: a. Entera Bio Ltd. (collectively with its subsidiary, the "Company") was incorporated on September 30, 2009 under the laws of the State of Israel and commenced operations on June 1, 2010. On January 8, 2018, the Company incorporated Entera Bio Inc., a wholly owned subsidiary incorporated in Delaware, United States. The Company is a leader in the development of orally delivered macromolecule therapeutics, including peptides and other therapeutic proteins. The Company applies its platform for use in areas with significant unmet medical need, where adoption of injectable therapies is limited due to cost, convenience and compliance challenges for patients. The Company’s most advanced product candidates, EB613 for the treatment of osteoporosis and EB612 for the treatment of hypoparathyroidism, are based on its proprietary technology platform and are both in clinical development. Additionally, the Company intends to license its oral delivery technology to biopharmaceutical companies for use with their proprietary compounds. Entera established such a collaboration with Amgen Inc. (“Amgen”) in December 2018, for the use of the Company’s oral delivery platform in the field of inflammatory diseases. b. The Company's ordinary shares, NIS 0.0000769 par value per share (“ordinary shares”), have been listed for trading on the Nasdaq Capital Market since the Company’s initial public offering in July 2018, in which total of 1,400,000 ordinary shares and 1,400,000 warrants to purchase up to 700,000 ordinary shares were issued in consideration for net proceeds of $9.6 million, after deducting offering expenses. c. On December 10, 2018, the Company entered into a research collaboration and license agreement with Amgen (the “Amgen Agreement”) for the use of the Company’s oral delivery platform in the field of inflammatory disease and other serious illnesses. Pursuant to the Amgen Agreement, the Company and Amgen have agreed to use the Company’s proprietary drug delivery platform to develop oral formulations for one preclinical large molecule program that Amgen has selected. Amgen also has options to select up to two additional programs to include in the Amgen Agreement. Amgen is responsible for the clinical development, regulatory approval, manufacturing and worldwide commercialization of the programs. The Company granted Amgen an exclusive, worldwide, sublicensable license under certain of its intellectual property relating to its drug delivery technology to develop, manufacture and commercialize the applicable products. The Company has retained all intellectual property rights to its drug delivery technology, and Amgen has retained all rights to its large molecules and any subsequent improvements, and ownership of certain intellectual property developed through the performance of the agreement is to be determined by U.S. patent law. Because the Company is engaged in research and development activities, it has not derived significant income from its activities and has incurred accumulated losses in the amount of $92.5 million through September 30, 2022 and negative cash flows from operating activities. The Company's management is of the opinion that its available funds as of September 30, 2022 will allow the Company to operate under its current plans through the second quarter of 2023. This assumes ongoing R&D, the Hypo PK study and continued investments in production, analytics, and clinical research operations to enable initiation of EB613 phase 3 during the second half of 2023. These factors raise substantial doubt as to the Company's ability to continue as a going concern. Management is in the process of evaluating various financing alternatives in the public or private equity markets or through the license of the Company's technology to additional external parties through partnerships or research collaborations as the Company will need to finance future research and development activities, general and administrative expenses and working capital through fund raising. However, there is no certainty about the Company's ability to obtain such funding. The financial statements do not include any adjustments that may be necessary should the Company be unable to continue as a going concern. d. Covid-19 Since the World Health Organization declared the outbreak of COVID-19 a pandemic in March 2020, the Company has adjusted its operations to co-exist with the pandemic and has encouraged its employees to get vaccinated against COVID-19. Though the effects of the pandemic have generally lessened, its effects may continue to impact the Company’s business operations, include due to new variants of the virus from time to time, and there is uncertainty in the nature and degree of its continued effects over time. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: a. Basis of presentation of the financial statements These unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP") for interim financial statements. Accordingly, they do not include all of the information and notes required by U.S. GAAP for annual financial statements. In the opinion of management, these unaudited condensed consolidated financial statements reflect all adjustments, which include normal recurring adjustments, necessary for a fair statement of the Company’s consolidated financial position as of September 30, 2022, the consolidated results of operations, statements of changes in shareholders' equity for the three and nine-month periods ended September 30, 2022 and 2021 and cash flows for the nine-month periods ended September 30, 2022 and 2021. The consolidated results for the three and nine-month periods ended September 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited financial statements of the Company for the year ended December 31, 2021 as filed with the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission on March 8, 2022. The comparative balance sheet at December 31, 2021 has been derived from the audited financial statements at that date but does not include all disclosures required by U.S. GAAP for annual financial statements. b. Loss per share Basic loss per share is computed on the basis of the net loss for the period, divided by the weighted average number of outstanding ordinary shares during the period. D iluted loss per share is based upon the weighted average number of ordinary shares and of ordinary shares equivalents outstanding when dilutive. Ordinary share equivalents include outstanding stock options and warrants, which are included under the treasury stock method when dilutive. The calculation of diluted loss per share does not include options and warrants exercisable into shares and shares for the nine months ended September 30, 2022 and 2021, respectively, and shares and shares for the three months ended September 30, 2022 and 2021, respectively, because the effect would be anti-dilutive. c. Newly issued and recently adopted accounting pronouncements: Recently issued accounting pronouncements adopted 1) In November 2021, the FASB issued ASU 2021-10 “Government Assistance (Topic 832)”, which requires annual disclosures that increase the transparency of transactions involving government grants, including (1) the types of transactions, (2) the accounting for those transactions, and (3) the effect of those transactions on an entity’s financial statements. The amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2021. The adoption of this guidance did not have material impact on the Company’s consolidated financial statements. 2) In August 2020, the FASB issued ASU 2020-06 “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 – 40).” This guidance simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The amendments to this guidance are effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. The adoption of this guidance did not have material impact on the Company’s consolidated financial statements. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2022 | |
Share-based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | NOTE 3 - SHARE-BASED COMPENSATION: a. On August 23, 2021, the Company’s Board of Directors approved the following option grants which were approved by the shareholders of the Company on October 4, 2021: i. Grants of options to purchase ordinary shares with a total fair value 0f $195 for each of the seven non-executive board members on January 1, 2022. The options will vest over three years in twelve equal quarterly instalments starting on January 1, 2022, which was the vesting commencement date. On January 1, 2022, which is considered the awards grant date, the Company granted options to purchase 752,899 ordinary shares to non-executive directors with an exercise price of $2.815 per share. ii. Grants of options to purchase ordinary shares with a total fair value 0f $65 for each of the seven non-executive board members on January 1, 2022. The options will vest over one year in four equal quarterly instalments starting on January 1, 2022, which was the vesting commencement date. On January 1, 2022, which is considered the awards grant date, the Company granted options to purchase 250,964 ordinary shares to non-executive directors with an exercise price of $2.815 per share. b. On March 31, 2022, the Company’s Board of Directors approved the following option grants: i. options to purchase 80,000 ordinary shares to an executive officer and a service provider, in each case, with an exercise price of $2.86 per share. The fair value of the options was $147. ii. options to purchase 55,000 ordinary shares to certain executive officers with an exercise price of $2.86 per share. This grant was subject to shareholders' approval, which was obtained at a meeting of the Company’s shareholders held on September 7, 2022. The fair value of the options was $37. The options vest over four years from the date of grant; 25% vest on the first anniversary of the date of grant and the remaining 75% of the option will vest in twelve equal quarterly installments following the first anniversary of the grant date. c. On April 28, 2022, the Company’s Board of Directors approved options grants to purchase 220,000 ordinary shares to employees with an exercise price of $2.57 per share. The options vest over four years from the date of grant; 25% vest on the first anniversary of the date of grant and the remaining 75% of the option will vest in twelve equal quarterly installments following the first anniversary of the grant date. The fair value of the options was $364. d. On May 11, 2022, the Company’s Board of Directors approved a grant of options to purchase 500,000 ordinary shares to Ms. Miranda Toledano, who was serving as the Company’s Chief Financial Officer at the time of the grant. Ms. Toledano has since been appointed the Company’s Chief Executive Officer (as described in Note 3(e) below). This grant was subject to shareholders' approval, which was obtained at a meeting of the Company’s shareholders held on September 7, 2022. These options have an exercise price of $ 2.00 four years e. On July 15, 2022, the Company’s Board of Directors appointed Ms. Miranda Toledano as the Company’s Chief Executive Officer and approved a grant of options to purchase 600,000 ordinary shares at an exercise price of $1.40 per share, which are in addition to the options described in note 3d above. This grant was subject to shareholders' approval, which was obtained at a meeting of the Company’s shareholders held on September 7, 2022. The options vest over four years from the date of grant; 25% vest on the first anniversary of the date of grant and the remaining 75% of the option will vest in twelve equal quarterly installments following the first anniversary of the applicable grant date. The fair value of the options was $524. In addition, upon the occurrence of a Triggering Event (as defined below) and subject to the approval of the Board of Directors, Ms. Toledano will be granted additional options to purchases 200,000 ordinary shares. The exercise price will be determined at the time of the Board of Directors’ approval. "Triggering Event" means the earlier of the following events: (i) the execution by the Company of a binding strategic or partnership agreement with a strategic partner to fund the Company's Phase III FDA Trial; or (b) raising sufficient funding to complete the Company's Phase III FDA Trial, in each case as such event is approved by the Board of Directors. The fair value of each option granted is estimated at the date of grant using the Black-Scholes option-pricing model, with the following weighted average assumptions: Nine months ended September 30, 2022 Exercise price $1.40-$2.86 Dividend yield - Expected volatility 69%-70.2% Risk-free interest rate 1.35%-3.36% Expected life - in years 5.5-6.5 f. On June 15, 2022, the Company entered into a separation agreement with Dr. Phillip Schwartz, the Company’s former President of R&D, under which Dr. Schwartz agreed to continue to provide services to the Company until July 21, 2022 (the “Separation Date”). Pursuant to the terms of the separation agreement, which were approved by the Company’s shareholders on September 7, 2022, Dr. Schwartz received a full acceleration of his unvested options, as of the Separation date, to purchase 68,750 ordinary shares granted in April 2021 that otherwise would have been forfeited. These options, together with 31,250 already vested options granted in April 2021 and 357,500 already vested options to purchase ordinary shares granted in 2017, will be exercisable for a period of 10 years from their respective initial grant dates. The acceleration described above was recognized as a "Type III" modification; therefore, on the shareholder approval date, the Company recognized the incremental costs of unvested options based on the fair value of the options on such date. In addition, the extension of the exercise period for the vested awards was recognized as a "Type I" modification. The total expense amount was $112 thousand, which was classified as additional share-based compensation costs in the research and development expenses. In addition, the separation agreement provides for the following payments to Dr. Schwartz, all of which would have otherwise been payable in accordance with either Israeli law or pursuant to his existing employment agreement: a one-time cash separation payment in an amount equal to NIS 537,600 (approximately $155.9) and additional payments of NIS 737,771 (approximately $214.0) in respect of all other ongoing accrued benefits, subject to any mandatory deductions. The foregoing payments were recognized in the research and development expenses. g. On July 15, 2022, the Company entered into a mutual separation agreement with the Company’s former Chief Executive Officer, Dr. Spiros Jamas. Pursuant to the separation agreement, Dr. Jamas received the following benefits: (i) a one-time lump sum payment of his annual base salary for a period of 13 months, for a total gross amount equal to $411.7; and (ii) an extension of the exercise period for the vested portion of the options granted on January 4, 2021, based on the award original terms, representing an aggregate of 492,832 ordinary shares, through the end of a two-year period commencing on July 15, 2022. Effective July 15, 2022, upon termination of the employment agreement with Dr. Jamas, the remaining 821,386 unvested options were forfeited and recognized as a reverse of expense of $457 in the general and administrative expenses. |
SUPPLEMENTARY FINANCIAL STATEME
SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION | 9 Months Ended |
Sep. 30, 2022 | |
Supplementary Financial Statement Information [Abstract] | |
SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION | NOTE 4 - SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION: Balance sheets: September 30, December 31, Accrued expenses and other payables: 2022 2021 Employees and employees related 159 147 Income tax - 134 Provision for vacation 114 308 Accrued expenses 378 2,212 651 2,801 |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of presentation of the financial statements | a. Basis of presentation of the financial statements These unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP") for interim financial statements. Accordingly, they do not include all of the information and notes required by U.S. GAAP for annual financial statements. In the opinion of management, these unaudited condensed consolidated financial statements reflect all adjustments, which include normal recurring adjustments, necessary for a fair statement of the Company’s consolidated financial position as of September 30, 2022, the consolidated results of operations, statements of changes in shareholders' equity for the three and nine-month periods ended September 30, 2022 and 2021 and cash flows for the nine-month periods ended September 30, 2022 and 2021. The consolidated results for the three and nine-month periods ended September 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited financial statements of the Company for the year ended December 31, 2021 as filed with the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission on March 8, 2022. The comparative balance sheet at December 31, 2021 has been derived from the audited financial statements at that date but does not include all disclosures required by U.S. GAAP for annual financial statements. |
Loss per share | b. Loss per share Basic loss per share is computed on the basis of the net loss for the period, divided by the weighted average number of outstanding ordinary shares during the period. D iluted loss per share is based upon the weighted average number of ordinary shares and of ordinary shares equivalents outstanding when dilutive. Ordinary share equivalents include outstanding stock options and warrants, which are included under the treasury stock method when dilutive. The calculation of diluted loss per share does not include options and warrants exercisable into shares and shares for the nine months ended September 30, 2022 and 2021, respectively, and shares and shares for the three months ended September 30, 2022 and 2021, respectively, because the effect would be anti-dilutive. |
Newly issued and recently adopted accounting pronouncements | c. Newly issued and recently adopted accounting pronouncements: Recently issued accounting pronouncements adopted 1) In November 2021, the FASB issued ASU 2021-10 “Government Assistance (Topic 832)”, which requires annual disclosures that increase the transparency of transactions involving government grants, including (1) the types of transactions, (2) the accounting for those transactions, and (3) the effect of those transactions on an entity’s financial statements. The amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2021. The adoption of this guidance did not have material impact on the Company’s consolidated financial statements. 2) In August 2020, the FASB issued ASU 2020-06 “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 – 40).” This guidance simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The amendments to this guidance are effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. The adoption of this guidance did not have material impact on the Company’s consolidated financial statements. |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of fair value assumptions of option granted using Black-Scholes option-pricing model | Nine months ended September 30, 2022 Exercise price $1.40-$2.86 Dividend yield - Expected volatility 69%-70.2% Risk-free interest rate 1.35%-3.36% Expected life - in years 5.5-6.5 |
SUPPLEMENTARY FINANCIAL STATE_2
SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION (Table) | 9 Months Ended |
Sep. 30, 2022 | |
Supplementary Financial Statement Information [Abstract] | |
Schedule of accounts payable and accrued liabilities | September 30, December 31, Accrued expenses and other payables: 2022 2021 Employees and employees related 159 147 Income tax - 134 Provision for vacation 114 308 Accrued expenses 378 2,212 651 2,801 |
DESCRIPTION OF BUSINESS (Detail
DESCRIPTION OF BUSINESS (Detail Textuals) $ in Thousands | 9 Months Ended | ||||
Sep. 30, 2022 USD ($) | Sep. 30, 2022 ₪ / shares | Sep. 30, 2022 USD ($) shares | Dec. 31, 2021 ₪ / shares | Dec. 31, 2021 USD ($) | |
General [Line Items] | |||||
Ordinary share, par value | ₪ / shares | ₪ 0.0000769 | ₪ 0.0000769 | |||
Number of warrants issued | 1,400,000 | ||||
Number of ordinary shares will be purchased by exercising warrants | 700,000 | ||||
Net proceeds from share issuance | $ | $ 9,600 | ||||
Accumulated deficit | $ | $ (92,462) | $ (82,426) | |||
Ordinary shares [Member] | |||||
General [Line Items] | |||||
Number of shares issued | 1,400,000 |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Detail Textuals) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Significant Accounting Policies [Line Items] | ||||
Number of antidilutive securities excluded from computation of earnings per share | 6,068,670 | 5,492,432 | 6,239,921 | 7,025,691 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) | 9 Months Ended |
Sep. 30, 2022 $ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Dividend yield | 0% |
Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price | $ 1.4 |
Expected volatility | 69% |
Risk-free interest rate | 1.35% |
Expected life - in years | 5 years 6 months |
Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price | $ 2.86 |
Expected volatility | 70.20% |
Risk-free interest rate | 3.36% |
Expected life - in years | 6 years 6 months |
SHARE-BASED COMPENSATION (Det_2
SHARE-BASED COMPENSATION (Detail Textuals) $ / shares in Units, ₪ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||
Jul. 15, 2022 USD ($) $ / shares shares | May 11, 2022 USD ($) $ / shares shares | Jun. 15, 2022 ILS (₪) shares | Jun. 15, 2022 USD ($) shares | Apr. 28, 2022 USD ($) $ / shares shares | Aug. 23, 2021 USD ($) $ / shares shares | Apr. 30, 2021 shares | Sep. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) $ / shares shares | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Description of terms of share-based payment arrangement | The options vest over four years from the date of grant; 25% vest on the first anniversary of the date of grant and the remaining 75% of the option will vest in twelve equal quarterly installments following the first anniversary of the grant date | |||||||||||
Vestion period | 4 years | |||||||||||
General and administrative expenses | $ | $ 1,460,000 | $ 1,535,000 | $ 5,512,000 | $ 4,208,000 | ||||||||
Executive Officer and Service Provider [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Number of additional options granted to purchase ordinary shares | 80,000 | |||||||||||
Exercise price of options granted | $ / shares | $ 2.86 | |||||||||||
Fair value of options at the date of grant | $ | $ 147,000 | |||||||||||
Service Provider [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Exercise price of options granted | $ / shares | $ 2.86 | |||||||||||
Executive Officer [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Number of additional options granted to purchase ordinary shares | 55,000 | |||||||||||
Exercise price of options granted | $ / shares | $ 2.86 | |||||||||||
Fair value of options at the date of grant | $ | $ 37,000 | |||||||||||
Former CEO [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Number of additional options granted to purchase ordinary shares | 492,832 | |||||||||||
Vestion period | 2 years | |||||||||||
Annual base salary | $ | $ 411,700 | |||||||||||
Description of mutual separation | (i) a one-time lump sum payment of his annual base salary for a period of 13 months, for a total gross amount equal to $411.7; and (ii) an extension of the exercise period for the vested portion of the options granted on January 4, 2021, based on the award original terms, representing an aggregate of 492,832 ordinary shares, through the end of a two-year period commencing on July 15, 2022. Effective July 15, 2022 | |||||||||||
General and administrative expenses | $ | $ 457,000 | |||||||||||
Number of unvested options forfeited | 821,386 | 821,386 | ||||||||||
Non-executive director [Member] | Vest over twelve equal quarterly instalments starting on January 1, 2022 [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Number of additional options granted to purchase ordinary shares | 752,899 | |||||||||||
Exercise price of options granted | $ / shares | $ 2.815 | |||||||||||
Vestion period | 3 years | |||||||||||
Fair value of options at the date of grant | $ | $ 195,000 | |||||||||||
Non-executive director [Member] | Vest over four equal quarterly instalments starting on January 1, 2022 [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Number of additional options granted to purchase ordinary shares | 250,964 | |||||||||||
Exercise price of options granted | $ / shares | $ 2.815 | |||||||||||
Vestion period | 1 year | |||||||||||
Fair value of options at the date of grant | $ | $ 65,000 | |||||||||||
Employee [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Description of terms of share-based payment arrangement | The options vest over four years from the date of grant; 25% vest on the first anniversary of the date of grant and the remaining 75% of the option will vest in twelve equal quarterly installments following the first anniversary of the grant date. | |||||||||||
Number of additional options granted to purchase ordinary shares | 220,000 | |||||||||||
Exercise price of options granted | $ / shares | $ 2.57 | |||||||||||
Vestion period | 4 years | |||||||||||
Fair value of options at the date of grant | $ | $ 364,000 | |||||||||||
New CEO [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Description of terms of share-based payment arrangement | This grant was subject to shareholders' approval, which was obtained at a meeting of the Company’s shareholders held on September 7, 2022. The options vest over four years from the date of grant; 25% vest on the first anniversary of the date of grant and the remaining 75% of the option will vest in twelve equal quarterly installments following the first anniversary of the applicable grant date. | |||||||||||
Number of additional options granted to purchase ordinary shares | 600,000 | |||||||||||
Exercise price of options granted | $ / shares | $ 1.4 | |||||||||||
Vestion period | 4 years | |||||||||||
Fair value of options at the date of grant | $ | $ 524,000 | |||||||||||
New CEO [Member] | Triggering Event [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Ordinary shares available for future grant | 200,000 | |||||||||||
Chief Financial Officer [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Description of terms of share-based payment arrangement | This grant was subject to shareholders' approval, which was obtained at a meeting of the Company’s shareholders held on September 7, 2022. These options have an exercise price of $2.00 per share and vest over four years from the date of grant; 25% vest on the first anniversary of the date of grant and the remaining 75% of the option will vest in twelve equal quarterly installments following the first anniversary of the grant date. | |||||||||||
Number of additional options granted to purchase ordinary shares | 500,000 | |||||||||||
Exercise price of options granted | $ / shares | $ 2 | |||||||||||
Vestion period | 4 years | |||||||||||
Fair value of options at the date of grant | $ | $ 390,000 | |||||||||||
President of R&D [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Stock-based compensation expenses | $ | $ 112,000 | |||||||||||
Cash separation payment | ₪ 537,600 | 155,900 | ||||||||||
Additional cash separation payment | ₪ 737,771 | $ 214,000 | ||||||||||
President of R&D [Member] | 2017 Grant [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Ordinary shares available for future grant | 31,250 | |||||||||||
Number of additional options granted to purchase ordinary shares | 357,500 | 357,500 | 68,750 | |||||||||
Vestion period | 10 years | 10 years |
SUPPLEMENTARY FINANCIAL STATE_3
SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Accrued expenses and other payables: | ||
Employees and employees related | $ 159 | $ 147 |
Income tax | 0 | 134 |
Provision for vacation | 114 | 308 |
Accrued expenses | 378 | 2,212 |
Accrued expenses and other payables, total | $ 651 | $ 2,801 |