Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 05, 2020 | |
Document Information Line Items | ||
Entity Registrant Name | INTEC PHARMA LTD. | |
Trading Symbol | NTEC | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 3,948,226 | |
Amendment Flag | false | |
Entity Central Index Key | 0001638381 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Document Period End Date | Sep. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Shell Company | false | |
Entity Ex Transition Period | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-37521 | |
Entity Address, Country | IL | |
Entity Incorporation, State or Country Code | L3 | |
Entity Tax Identification Number | 82-3163169 | |
Entity Address, Address Line One | 12 Hartom Street Har Hotzvim | |
Entity Address, City or Town | Jerusalem | |
Entity Address, Postal Zip Code | 9777512 | |
City Area Code | +972-2 | |
Local Phone Number | 586-4657 | |
Title of 12(b) Security | Ordinary Shares, no par value | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 17,076 | $ 9,292 |
Investment in marketable securities | 770 | |
Prepaid expenses and other receivables | 609 | 3,683 |
TOTAL CURRENT ASSETS | 17,685 | 13,745 |
NON-CURRENT ASSETS: | ||
Property and equipment, net | 1,680 | 2,575 |
Operating lease right-of-use assets | 954 | 1,243 |
Other assets (Note 3a) | 3,717 | 3,717 |
TOTAL NON-CURRENT ASSETS | 6,351 | 7,535 |
TOTAL ASSETS | 24,036 | 21,280 |
CURRENT LIABILITIES - | ||
Accounts payable and accruals: Trade | 531 | 3,507 |
Other (Note 5) | 4,019 | 4,835 |
TOTAL CURRENT LIABILITIES | 4,550 | 8,342 |
LONG-TERM LIABILITIES - | ||
Non-current operating lease liabilities | 458 | 799 |
Other liabilities | 951 | 604 |
TOTAL LONG-TERM LIABILITIES | 1,409 | 1,403 |
TOTAL LIABILITIES | 5,959 | 9,745 |
COMMITMENTS AND CONTINGENT LIABILITIES (Note 3) | ||
SHAREHOLDERS’ EQUITY: | ||
Ordinary shares, with no par value - authorized: 17,500,000 and 5,000,000 Ordinary Shares as of September 30, 2020 and December 31, 2019, respectively; issued and outstanding: 3,948,226 and 1,794,611 Ordinary Shares as of September 30, 2020 and December 31, 2019, respectively | 727 | 727 |
Additional paid-in capital | 217,330 | 200,231 |
Accumulated deficit | (199,980) | (189,423) |
TOTAL SHAREHOLDERS’ EQUITY | 18,077 | 11,535 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ 24,036 | $ 21,280 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parentheticals) - shares | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Ordinary shares, authorized | 17,500,000 | 5,000,000 |
Ordinary shares, issued | 3,948,226 | 1,794,611 |
Ordinary shares, outstanding | 3,948,226 | 1,794,611 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
OPERATING EXPENSES: | ||||
RESEARCH AND DEVELOPMENT EXPENSES, net | $ (2,112) | $ (8,448) | $ (5,411) | $ (24,850) |
GENERAL AND ADMINISTRATIVE EXPENSES | (1,529) | (2,157) | (4,874) | (6,491) |
IMPAIRMENT OF LONG-LIVED ASSETS | (9,759) | (9,759) | ||
OPERATING LOSS | (3,641) | (20,364) | (10,285) | (41,100) |
FINANCIAL INCOME (EXPENSES), net | (57) | 14 | (123) | 157 |
LOSS BEFORE INCOME TAX | (3,698) | (20,350) | (10,408) | (40,943) |
INCOME TAX | (42) | (28) | (149) | (100) |
NET LOSS | $ (3,740) | $ (20,378) | $ (10,557) | $ (41,043) |
LOSS PER SHARE BASIC AND DILUTED (in Dollars per share) | $ (0.95) | $ (12.16) | $ (3.35) | $ (24.61) |
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING USED IN COMPUTATION OF BASIC AND DILUTED LOSS PER ORDINARY SHARE IN THOUSANDS (in Shares) | 3,952 | 1,676 | 3,153 | 1,668 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands | Ordinary Shares | Additional paid-in capital | Accumulated Deficit | Total |
BALANCE at Dec. 31, 2018 | $ 727 | $ 194,642 | $ (141,824) | $ 53,545 |
BALANCE (in Shares) at Dec. 31, 2018 | 1,661,649 | |||
Issuance of ordinary shares, net of issuance costs (Note 4a(1)) | 1,969 | 1,969 | ||
Issuance of ordinary shares, net of issuance costs (Note 4a(1)) (in Shares) | 85,834 | |||
Exercise of options | 268 | 268 | ||
Exercise of options (in Shares) | 3,491 | |||
Share-based compensation (Note 4) | 2,748 | 2,748 | ||
Net loss | (41,043) | (41,043) | ||
BALANCE at Sep. 30, 2019 | $ 727 | 199,627 | (182,867) | 17,487 |
BALANCE (in Shares) at Sep. 30, 2019 | 1,750,974 | |||
BALANCE at Jun. 30, 2019 | $ 727 | 196,871 | (162,489) | 35,109 |
BALANCE (in Shares) at Jun. 30, 2019 | 1,665,140 | |||
Issuance of ordinary shares, net of issuance costs (Note 4a(1)) | 1,969 | 1,969 | ||
Issuance of ordinary shares, net of issuance costs (Note 4a(1)) (in Shares) | 85,834 | |||
Share-based compensation (Note 4) | 787 | 787 | ||
Net loss | (20,378) | (20,378) | ||
BALANCE at Sep. 30, 2019 | $ 727 | 199,627 | (182,867) | 17,487 |
BALANCE (in Shares) at Sep. 30, 2019 | 1,750,974 | |||
BALANCE at Dec. 31, 2019 | $ 727 | 200,231 | (189,423) | 11,535 |
BALANCE (in Shares) at Dec. 31, 2019 | 1,794,611 | |||
Issuance of ordinary shares, net of issuance costs (Note 4a(1)) | 421 | 421 | ||
Issuance of ordinary shares, net of issuance costs (Note 4a(1)) (in Shares) | 41,569 | |||
Issuance of ordinary shares and warrants, net of issuance costs (Note 4a(2)) | 5,692 | 5,692 | ||
Issuance of ordinary shares and warrants, net of issuance costs (Note 4a(2)) (in Shares) | 812,500 | |||
Issuance of ordinary shares and warrants, net of issuance costs (Note 4a(3)) | 4,426 | 4,426 | ||
Issuance of ordinary shares and warrants, net of issuance costs (Note 4a(3)) (in Shares) | 814,598 | |||
Issuance of ordinary shares and pre-funded warrants, net of issuance costs (Note 4a(5)) | 4,599 | 4,599 | ||
Issuance of ordinary shares and pre-funded warrants, net of issuance costs (Note 4a(5)) (in Shares) | 356,250 | |||
Exercise of warrants (Note 4a(2) and 4a(3)) | 769 | 769 | ||
Exercise of warrants (Note 4a(2) and 4a(3)) (in Shares) | 128,698 | |||
Share-based compensation (Note 4) | 1,192 | 1,192 | ||
Net loss | (10,557) | (10,557) | ||
BALANCE at Sep. 30, 2020 | $ 727 | 217,330 | (199,980) | 18,077 |
BALANCE (in Shares) at Sep. 30, 2020 | 3,948,226 | |||
BALANCE at Jun. 30, 2020 | $ 727 | 211,691 | (196,240) | 16,178 |
BALANCE (in Shares) at Jun. 30, 2020 | 3,471,403 | |||
Issuance of ordinary shares and pre-funded warrants, net of issuance costs (Note 4a(5)) | 4,599 | 4,599 | ||
Issuance of ordinary shares and pre-funded warrants, net of issuance costs (Note 4a(5)) (in Shares) | 356,250 | |||
Exercise of warrants (Note 4a(2) and 4a(3)) | 704 | 704 | ||
Exercise of warrants (Note 4a(2) and 4a(3)) (in Shares) | 120,573 | |||
Share-based compensation (Note 4) | 336 | 336 | ||
Net loss | (3,740) | (3,740) | ||
BALANCE at Sep. 30, 2020 | $ 727 | $ 217,330 | $ (199,980) | $ 18,077 |
BALANCE (in Shares) at Sep. 30, 2020 | 3,948,226 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (10,557) | $ (41,043) |
Adjustments required to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 911 | 643 |
Impairment of long-lived asset | 9,759 | |
Exchange differences on cash and cash equivalents | 18 | 69 |
Change in right of use asset | 372 | 523 |
Change in lease liabilities | (410) | (380) |
Gains on marketable securities | (2) | (10) |
Share-based compensation | 1,192 | 2,748 |
Changes in operating assets and liabilities: | ||
Decrease in prepaid expenses and other receivables | 3,074 | 483 |
Increase in deferred tax assets | (223) | |
Increase (decrease) in accounts payable and accruals | (3,806) | 3,268 |
Increase in other liabilities | 347 | 245 |
Net cash used in operating activities | (8,861) | (23,918) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (16) | (791) |
Investment in other assets | (2,315) | |
Proceeds from disposal of marketable securities, net | 772 | 576 |
Net cash provided by (used in) investing activities | 756 | (2,530) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of ordinary shares, net of issuance costs (Note 4a(1)) | 421 | 1,969 |
Proceeds from issuance of ordinary shares and warrants, net of issuance costs (Note 4a(2)) | 5,692 | |
Proceeds from issuance of ordinary shares and warrants, net of issuance costs (Note 4a(3)) | 4,426 | |
Proceeds from issuance of ordinary shares and pre-funded warrants, net of issuance costs (Note 4a(5)) | 4,599 | |
Proceeds from exercise of warrants (Note 4a(2) and 4a(3)) | 769 | |
Proceeds from exercise of options | 268 | |
Net cash provided by financing activities | 15,907 | 2,237 |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 7,802 | (24,211) |
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD | 9,292 | 39,246 |
EXCHANGE DIFFERENCES ON CASH AND CASH EQUIVALENTS | (18) | (69) |
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD | 17,076 | 14,966 |
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING ACTIVITIES: | ||
Liability with respect to property and equipment | 123 | |
Liability with respect to other assets (see note 3a) | 549 | |
SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION - | ||
Taxes paid | 9 | 50 |
Interest received | $ 32 | $ 315 |
NATURE OF OPERATIONS AND BASIS
NATURE OF OPERATIONS AND BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS AND BASIS OF PRESENTATION | NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION: a. Nature of operations 1) Intec Pharma Ltd. ("Intec") is engaged in the development of proprietary technology which enables the gastric retention of certain drugs. The technology is intended to significantly improve the efficiency of the drugs and substantially reduce their side-effects or the effective doses. Intec is a limited liability public company incorporated in Israel. Intec’s ordinary shares are traded on the NASDAQ Capital Market ("NASDAQ"). In September 2017, Intec incorporated a wholly-owned subsidiary in the United States of America in the State of Delaware - Intec Pharma Inc. (the "Subsidiary", together with Intec - "the Company"). The Subsidiary was incorporated mainly to provide Intec executive and management services, including business development, medical affairs and investor relationship activities outside of Israel. 2) The Company engages in research and development activities and has not yet generated revenues from operations. On July 22, 2019, the Company announced top-line results according to which its Phase III clinical trial for AP-CD/LD did not achieve its primary and secondary endpoints. Accordingly, there is no assurance that the Company’s operations will generate positive cash flows. As of September 30, 2020, the cumulative losses of the Company were approximately $200 million. Management expects that the Company will continue to incur losses from its operations, which will result in negative cash flows from operating activities. The Company believes that it has adequate cash to fund its ongoing activities into the first quarter of 2022. Its ability to continue to execute its operating plan is dependent on its ability to obtain additional capital principally through entering into collaborations, strategic alliances, or license agreements with third parties and/or raising capital from the public and/or private investors and/or institutional investors. The negative outcome of the Phase III clinical trial that was announced on July 22, 2019 and uncertainty regarding the Company's development programs is expected to adversely affect its ability to obtain funding and there is no assurance that it will be successful in obtaining the level of financing needed for its activities. If the Company is unsuccessful in securing sufficient financing, it may need to curtail or cease operations. In addition, the COVID-19 pandemic, that has spread globally, has resulted in significant financial market volatility and uncertainty in recent months. Many countries around the world, including in Israel and the United States, have implemented significant governmental measures to control the spread of the virus, including temporary closure of businesses, severe restrictions on travel and the movement of people, and other material limitations on the conduct of business. The Company has implemented remote working and work place protocols for its employees in accordance with government requirements. The implementation of measures to prevent the spread of coronavirus have resulted in disruptions to the Company’s partnering efforts which depend, in part, on attendance at in-person meetings, industry conferences and other events. It is still early to assess the full impact of the coronavirus outbreak and the extent to which the coronavirus impacts the Company’s operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration and severity of the outbreak, and the actions that may be required to contain the coronavirus or treat its impact. As of the date of issuance of these condensed consolidated financial statements, the extent to which the COVID-19 pandemic may materially impact the Company’s financial condition, liquidity, or results of operations is uncertain. Furthermore, the estimation process required to prepare the Company’s consolidated financial statements required assumptions to be made about future events and conditions and the impact of COVID-19 on the Company’s financial results, and while the Company’s management believe such assumptions are reasonable, they are inherently subjective and uncertain. The Company’s actual results could differ materially from those estimates. As a result of these uncertainties, there is substantial doubt about the Company’s ability to continue as a going concern. These financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty. 3) On September 3, 2019, the Company was notified by NASDAQ that it was not in compliance with the minimum bid price requirements for continued listing on the NASDAQ. The notification provided that the Company had 180 calendar days, or until March 2, 2020, to regain compliance. On March 3, 2020, the Company was notified that it is eligible for an additional 180 calendar day period, or until August 31, 2020, to regain compliance. As a result of tolling of compliance periods by NASDAQ, on April 17, 2020, the Company was notified that the term to regain compliance was extended until November 13, 2020. To regain compliance, the bid price of the Company’s ordinary shares must have a closing bid price of at least $1.00 per share for a minimum of 10 consecutive business days. Accordingly, on July 15, 2020, the Company’s shareholders approved amendments to the Company’s articles of association to effect a reverse share split of its ordinary shares at a ratio with the range from 1-for-5 to 1-for-25, to be effective at the ratio and on a date to be determined by the board of directors in its sole discretion. The Company subsequently implemented a 1-for-20 reverse share split of its ordinary shares which was effective for NASDAQ marketplace purposes at the open of business on October 30, 2020, for more details see note 6. If the bid price of the Company’s ordinary shares is at least $1.00 per share for at least 10 consecutive days following the effectiveness of the reverse share split, then the Company expects to regain compliance with the minimum bid price requirement. Failure to meet these requirements could result in a delisting of the Company’s ordinary shares which could negatively impact the Company’s ability to raise capital. All share and per share amounts in these unaudited condensed consolidated financial statements have been retroactively adjusted to reflect the reverse share split. For more details see note 6. b. Basis of presentation The unaudited interim condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") and S-X Article 10 for interim financial statements. Accordingly, they do not contain all information and notes required by US GAAP for annual financial statements. In the opinion of management, these unaudited condensed consolidated interim 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, 2020, the consolidated results of operations, changes in equity for the three and nine-month periods ended September 30, 2020 and 2019 and cash flows for the nine-month periods ended September 30, 2020 and 2019. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s annual financial statements for the year ended December 31, 2019, as filed in the 10-K on March 13, 2020. The condensed balance sheet data as of December 31, 2019 included in these unaudited condensed consolidated financial statements was derived from the audited financial statements for the year ended December 31, 2019 but does not include all disclosures required by US GAAP for annual financial statements. The results for the nine-month period ended September 30, 2020 are not necessarily indicative of the results expected for the year ending December 31, 2020. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: a. Principles of consolidation The consolidated financial statements include the accounts of Intec and its Subsidiary. Intercompany balances and transactions have been eliminated upon consolidation. b. Fair value measurement Fair value is based on the price that would be received from the sale of an asset or that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, the guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described as follows: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considers counterparty credit risk in its assessment of fair value. c. Loss per share Loss per share, basic and diluted, is computed on the basis of the net loss for the period divided by the weighted average number of ordinary shares outstanding during the period. Diluted 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 following share options and warrants were excluded from the calculation of diluted loss per ordinary share because their effect would have been anti-dilutive for the periods presented (share data): Three months ended September 30 Nine months ended September 30 2020 2019 2020 2019 Outstanding stock options 244,413 207,838 226,018 215,715 Warrants 1,121,811 - 899,835 - d. Research and development expenses, net Research and development expenses, net for the three and nine-month period ended September 30, 2019, are net of participation in research and development expenses in the amount of approximately $168 thousand and $983 thousand, respectively. For the nine-month period ended September 30, 2020, the Company had no participation in research and development expenses. |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENT LIABILITIES | NOTE 3 - COMMITMENTS AND CONTINGENT LIABILITIES: a. LTS Process Development Agreement In December 2018, the Company entered into a Process Development Agreement for Manufacturing Services with Lohmann Therapie-Systeme AG ("LTS") for the manufacture of AP-CD/LD (the “Agreement”). Under the Agreement, the Company will bear the costs incurred by LTS to acquire the production equipment for AP-CD/LD (“Equipment”) which amounted to approximately €6.8 million (approximately $7.8 million), and this amount will later be reimbursed to the Company by LTS in the form of a reduction in the purchase price of the AP-CD/LD product. As of December 31, 2019, the Company paid in full all the consideration and has recognized the Equipment as non-current other assets. In 2019, the Company performed an impairment assessment on certain of its long-lived assets which resulted an impairment charge of the Equipment in the amount of approximately $4.1 million. As of December 31, 2019, the fair value of the Equipment was approximately $3.7 million. The Agreement also contains several termination rights and as of September 30, 2020, the Company has a liability in the amount of €2.0 million (approximately $2.3 million) for LTS’s facility upgrading costs. This liability will be paid to LTS only if the Company decides not to continue with the project or commercialization of AP-CD/LD. b. Lawsuit In December, 2019, two former directors and officers (the “plaintiffs”) filed a statement of claim with the Jerusalem District Labor Court alleging breach of contract related to a purported vesting of certain options issued to the plaintiffs pursuant to the execution of the LTS Agreement and further alleging payments due for unredeemed vacation days. The plaintiffs are seeking pecuniary damages of NIS 2.4 million (approximately $700 thousand) plus interest and linkage to the Israeli CPI. In addition, the plaintiffs have filed motions to obtain liens on the Company’s assets to secure any future recovery. That motion was withdrawn pursuant to the court’s recommendation at the conclusion of a hearing held on February 9, 2020. The Company records a provision in its financial statements to the extent that it concludes that a contingent liability is probable, and the amount thereof is estimable. The Company together with its legal advisors believe that it has good defense arguments to the claims against it and filed a statement of defense to the complaint on March 8, 2020 in which it rejected all of the plaintiffs’ claims. Accordingly, management assessed the likelihood of damages and concluded that no provisions are needed to be recorded within the financial statements regarding the matter disclosed in this note. |
SHARE CAPITAL
SHARE CAPITAL | 9 Months Ended |
Sep. 30, 2020 | |
SHARE CAPITAL | NOTE 4 - SHARE CAPITAL: a. Changes in share capital 1) On March 1, 2019, the Company entered into a Sales Agreement with Cowen which provides that, upon the terms and subject to the conditions and limitations in the Sales Agreement, the Company may elect from time to time, to offer and sell ordinary shares through an “at-the-market” equity offering program through Cowen acting as sales agent. The issuance and sale of ordinary shares by the Company under the offering program is being made pursuant to the Company’s effective “shelf” registration statement on Form S-3 filed with the SEC on March 1, 2019 and declared effective on March 28, 2019, as amended by a prospectus supplement filed on March 13, 2020. On May 4, 2020, the Company terminated the prospectus supplement, but the sales agreement remains in full force and effect. During January 2020, the Company sold 41,569 ordinary shares under the Sales Agreement at an average price of $10.50 per share for aggregate net proceeds of approximately $421 thousand, net of issuance expenses of approximately $15 thousand. 2) On February 3, 2020, the Company completed an underwritten public offering, pursuant to which the Company issued 764,000 ordinary shares, pre-funded warrants to purchase 48,500 ordinary shares and warrants to purchase 812,500 ordinary shares. Each pre-funded warrant was exercisable at an exercise price of $0.002 per share. All the pre-funded warrants were exercised following the closing of the offering. Each ordinary share and warrant or pre-funded warrant and warrant were sold together at a combined price of $8.00. Each warrant shall be exercisable at an exercise price of $8.00 per share and has a term of five years from the date of issuance. The Company has also concluded that the warrants are classified as equity, since it meets all criteria for equity classification. The total net proceeds were approximately $5.7 million, after deducting underwriting discounts, commissions and other offering expenses in the amount of $800 thousand. In June and July 2020, warrants to purchase 44,625 ordinary shares were exercised for consideration of $357 thousand. As of September 30, 2020, warrants to purchase 767,875 ordinary shares remained outstanding. 3) On May 6, 2020, the Company completed a registered direct offering, pursuant to which the Company sold and issued to certain institutional investors 814,598 ordinary shares at a purchase price per share of $6.138. In addition, in a concurrent private placement, the Company also sold and issued to the purchasers in the offering unregistered warrants to purchase 407,299 ordinary shares. Each warrant shall be exercisable at an exercise price of $4.90 per share and has a term of five and one-half years from the date of issuance. The Company has also concluded that the warrants are classified as equity, since it meets all criteria for equity classification. The total net proceeds were approximately $4.5 million, after deducting placement agent and other offering expenses in the amount of approximately $500 thousand. In July 2020, warrants to purchase 84,073 ordinary shares were exercised for consideration of approximately $412 thousand. As of September 30, 2020, warrants to purchase 323,226 ordinary shares remained outstanding. 4) On July 15, 2020, the Company increased its authorized share capital from 5,000,000 ordinary shares to 17,500,000 ordinary shares. 5) On August 10, 2020, the Company completed a registered direct offering, pursuant to which the Company sold and issued to Aspire Capital Fund LLC (“Aspire Capital”), 356,250 ordinary shares at a purchase price per share of $7.022. In addition, the Company also sold and issued to Aspire Capital pre-funded warrants to purchase 356,250 ordinary shares at a purchase price per share of $6.822. Each pre-funded warrant shall be exercisable at an exercise price of $0.20 per share. The pre-funded warrants are exercisable immediately and may be exercised at any time until all of the pre-funded warrants are exercised in full. The Company has also concluded that the pre-funded warrants are classified as equity, since it meets all criteria for equity classification. The total net proceeds were approximately $4.6 million, after deducting commitment fee and other offering expenses in the amount of approximately $330 thousand. As of September 30, 2020, no pre-funded warrants were exercised. 6) The Company implemented a 1-for-20 reverse share split of its outstanding ordinary shares that was effective for NASDAQ purposes at the open of business on October 30, 2020. All share and per share amounts in these unaudited condensed consolidated financial statements have been retroactively adjusted to reflect the reverse share split. For more details see note 6. b. Share-based compensation: 1) In January 2016, the Company's board of directors approved a new option plan (the "2015 Plan"). Originally, the maximum number of ordinary shares reserved for issuance under the 2015 Plan was 35,000 ordinary shares for grants to directors, employees and consultants. In July 2016, an increase of 35,000 ordinary shares was approved by the board of directors. In December 2017, June 2018 and December 2019, an increase of 105,000, 50,000 and 50,000 ordinary shares, respectively, was approved by the Company’s shareholders at a general meeting of shareholders. In July 2020, the Company’s shareholders approved a further increase of 175,000 ordinary shares. As of September 30, 2020, 165,738 shares remain available for grant under the Plan. In the nine months ended September 30, 2020 and 2019, the Company granted options as follows: Nine months ended September 30, 2020 Number of options granted Exercise price Vesting period Expiration Employees 47,250 $6.15-$8.57 3 years 7 years 37,750 $ 6.43 1.29 years 7 years Directors 10,000 $ 6.15 3 years 7 years Nine months ended September 30, 2019 Number of options granted Exercise price range Vesting period range Expiration Employees 73,250 $8.94-$152.80 3 years 7 years Directors 6,000 $97.20 3 years 7 years The fair value of options granted to employees and directors during the nine months ended September 30, 2020, and 2019 was $416 thousand and $4.4 million, respectively. The fair value of options granted to employees and directors on the date of grant was computed using the Black-Scholes model. The underlying data used for computing the fair value of the options are as follows: Nine months ended September 30 2020 2019 Value of ordinary share $5.60-$6.20 $23.00-$149.20 Dividend yield 0% 0% Expected volatility 102.58%-110.4% 53.32%-97.81% Risk-free interest rate 0.28%-1.42% 1.75%-2.57% Expected term 5 years 5 years 2) The following table illustrates the effect of share-based compensation on the statements of operations: Three months ended Nine months ended 2020 2019 2020 2019 U.S. dollars in thousands U.S. dollars in thousands Research and development expenses, net $ 136 $ 371 $ 495 $ 1,538 General and administrative expenses 200 416 697 1,210 $ 336 $ 787 $ 1,192 $ 2,748 |
ACCOUNTS PAYBLE AND ACCRUALS -
ACCOUNTS PAYBLE AND ACCRUALS - OTHER | 9 Months Ended |
Sep. 30, 2020 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYBLE AND ACCRUALS - OTHER | NOTE 5 - ACCOUNTS PAYBLE AND ACCRUALS - OTHER: September 30, December 31, 2020 2019 U.S. dollars in thousands Expenses payable $ 2,704 $ 2,838 Salary and related expenses, including social security and other taxes 518 1,277 Current operating lease liabilities 558 544 Accrual for vacation days and recreation pay for employees 217 154 Other 22 22 $ 4,019 $ 4,835 |
EVENT SUBSEQUENT TO SEPTEMBER 3
EVENT SUBSEQUENT TO SEPTEMBER 30, 2020 | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
EVENT SUBSEQUENT TO SEPTEMBER 30, 2020 | NOTE 6 - EVENT SUBSEQUENT TO SEPTEMBER 30, 2020 The Company implemented a 1-for-20 reverse share split of its outstanding ordinary shares that was effective for NASDAQ purposes at the open of business on October 30, 2020. As a result of the reverse share split, every 20 outstanding ordinary shares was combined into one ordinary share. All fractional shares created by the reverse share split were rounded up to the nearest whole share. The number of authorized shares was proportionately reduced from 350,000,000 ordinary shares to 17,500,000 ordinary shares. The reverse share split decreased the Company’s outstanding ordinary shares from 78,964,492 shares to 3,948,226 shares as of that date. All share and per share amounts in these unaudited condensed consolidated financial statements has been retroactively adjusted to reflect the reverse share split. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Principles of consolidation | a. Principles of consolidation The consolidated financial statements include the accounts of Intec and its Subsidiary. Intercompany balances and transactions have been eliminated upon consolidation. |
Fair value measurement | b. Fair value measurement Fair value is based on the price that would be received from the sale of an asset or that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, the guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described as follows: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considers counterparty credit risk in its assessment of fair value. |
Loss per share | c. Loss per share Loss per share, basic and diluted, is computed on the basis of the net loss for the period divided by the weighted average number of ordinary shares outstanding during the period. Diluted 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 following share options and warrants were excluded from the calculation of diluted loss per ordinary share because their effect would have been anti-dilutive for the periods presented (share data): Three months ended September 30 Nine months ended September 30 2020 2019 2020 2019 Outstanding stock options 244,413 207,838 226,018 215,715 Warrants 1,121,811 - 899,835 - |
Research and development expenses, net | d. Research and development expenses, net Research and development expenses, net for the three and nine-month period ended September 30, 2019, are net of participation in research and development expenses in the amount of approximately $168 thousand and $983 thousand, respectively. For the nine-month period ended September 30, 2020, the Company had no participation in research and development expenses. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of anti-dilutive securities | Three months ended September 30 Nine months ended September 30 2020 2019 2020 2019 Outstanding stock options 244,413 207,838 226,018 215,715 Warrants 1,121,811 - 899,835 - |
SHARE CAPITAL (Tables)
SHARE CAPITAL (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Schedule of options granted to employees and directors | Nine months ended September 30, 2020 Number of options granted Exercise price Vesting period Expiration Employees 47,250 $6.15-$8.57 3 years 7 years 37,750 $ 6.43 1.29 years 7 years Directors 10,000 $ 6.15 3 years 7 years Nine months ended September 30, 2019 Number of options granted Exercise price range Vesting period range Expiration Employees 73,250 $8.94-$152.80 3 years 7 years Directors 6,000 $97.20 3 years 7 years |
Schedule of underlying data used for computing the fair value of the options | Nine months ended September 30 2020 2019 Value of ordinary share $5.60-$6.20 $23.00-$149.20 Dividend yield 0% 0% Expected volatility 102.58%-110.4% 53.32%-97.81% Risk-free interest rate 0.28%-1.42% 1.75%-2.57% Expected term 5 years 5 years |
Schedule of effect of share-based compensation | Three months ended Nine months ended 2020 2019 2020 2019 U.S. dollars in thousands U.S. dollars in thousands Research and development expenses, net $ 136 $ 371 $ 495 $ 1,538 General and administrative expenses 200 416 697 1,210 $ 336 $ 787 $ 1,192 $ 2,748 |
ACCOUNTS PAYBLE AND ACCRUALS _2
ACCOUNTS PAYBLE AND ACCRUALS - OTHER (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of accounts payable and accruals - other | September 30, December 31, 2020 2019 U.S. dollars in thousands Expenses payable $ 2,704 $ 2,838 Salary and related expenses, including social security and other taxes 518 1,277 Current operating lease liabilities 558 544 Accrual for vacation days and recreation pay for employees 217 154 Other 22 22 $ 4,019 $ 4,835 |
NATURE OF OPERATIONS AND BASI_2
NATURE OF OPERATIONS AND BASIS OF PRESENTATION (Details) - (Narrative) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Accumulated deficit | $ (199,980) | $ (189,423) |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Details) - (Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Research and Development Expense [Member] | ||||
Participation in research and development expenses | $ 0 | $ 168 | $ 0 | $ 983 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedule of anti-dilutive securities - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Outstanding stock options [Member] | ||||
Shares excluded from the computation of diluted net loss per share, because the effect of their inclusion in the computation would be anti-dilutive | 244,413 | 207,838 | 226,018 | 215,715 |
Warrants [Member] | ||||
Shares excluded from the computation of diluted net loss per share, because the effect of their inclusion in the computation would be anti-dilutive | 1,121,811 | 899,835 |
COMMITMENTS AND CONTINGENT LI_2
COMMITMENTS AND CONTINGENT LIABILITIES (Details) - (LTS Process Development Agreement - Narrative) - LTS Production equipment agreement [Member] € in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2018EUR (€) | |
Impairment charge | $ 4.1 | ||
Fair value of equipment | $ 3.7 | ||
Total cost of equipment | $ 2.3 | € 2 |
COMMITMENTS AND CONTINGENT LI_3
COMMITMENTS AND CONTINGENT LIABILITIES (Details) - (Lawsuit - Narrative) - 9 months ended Sep. 30, 2020 $ in Thousands, ₪ in Millions | USD ($) | ILS (₪) |
Plaintiffs pecuniary damages | $ 700 | ₪ 2.4 |
SHARE CAPITAL (Details)
SHARE CAPITAL (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 10, 2020 | May 06, 2020 | Feb. 03, 2020 | Jul. 31, 2020 | Jan. 31, 2020 | Jul. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Jul. 15, 2020 | Dec. 31, 2019 | Jun. 30, 2018 | Dec. 31, 2017 | Jul. 31, 2016 | Jan. 31, 2016 |
Proceeds from issuance of ordinary shares, net of issuance costs (in Dollars) | $ 421 | $ 1,969 | ||||||||||||
Proceeds from issuance of ordinary shares and warrants, net of issuance costs (in Dollars) | 5,692 | |||||||||||||
Proceeds from exercise of warrants (in Dollars) | 769 | |||||||||||||
Proceeds from issuance of ordinary shares and warrants, net of issuance costs (in Dollars) | $ 4,426 | |||||||||||||
Ordinary shares, authorized | 17,500,000 | 5,000,000 | ||||||||||||
Proceeds from issuance of ordinary shares and pre-funded warrants, net of issuance costs (in Dollars) | $ 4,599 | |||||||||||||
2015 Plan [Member] | ||||||||||||||
Number of ordinary shares reserved for issuance under the 2015 plan | 175,000 | 175,000 | 50,000 | 50,000 | 105,000 | 35,000 | 35,000 | |||||||
Number of shares available for grant | 165,738 | |||||||||||||
Increase in authorized share capital [Member] | ||||||||||||||
Authorized ordinary shares before the increase in authorized share capital | 5,000,000 | |||||||||||||
Authorized ordinary shares post the increase in authorized share capital | 17,500,000 | |||||||||||||
Reverse Share Split [Member] | ||||||||||||||
Reverse stock split, description | 1-for-20 reverse share split | |||||||||||||
Cowen [Member] | Sales Agreement [Member] | ||||||||||||||
Number of shares issued | 41,569 | |||||||||||||
Average price per share (in Dollars per share) | $ 10.50 | |||||||||||||
Proceeds from issuance of ordinary shares, net of issuance costs (in Dollars) | $ 421 | |||||||||||||
Issuance expenses (in Dollars) | $ 15 | |||||||||||||
Fair value of options granted [Member] | ||||||||||||||
Fair value of options granted (in Dollars) | $ 416 | $ 4,400 | ||||||||||||
Underwritten Public Offering [Member] | ||||||||||||||
Number of shares issued | 764,000 | |||||||||||||
Issuance expenses (in Dollars) | $ 800 | |||||||||||||
Number of pre-funded warrants issued during the period | 48,500 | |||||||||||||
Number of warrants issued | 812,500 | |||||||||||||
Pre-funded warrants exercise price (in Dollars per share) | $ 0.002 | |||||||||||||
Combined price of share and warrant (in Dollars per share) | 8 | |||||||||||||
Exercise price (in Dollars per share) | $ 8 | |||||||||||||
Term of the warrants | 5 years | |||||||||||||
Proceeds from issuance of ordinary shares and warrants, net of issuance costs (in Dollars) | $ 5,700 | |||||||||||||
Outstanding warrants | 767,875 | |||||||||||||
Underwritten Public Offering [Member] | Exercise of warrants [Member] | ||||||||||||||
Number of warrants exercised | 44,625 | |||||||||||||
Proceeds from exercise of warrants (in Dollars) | $ 357 | |||||||||||||
Registered Direct Offering and Concurrent Private Placement [Member] | ||||||||||||||
Number of shares issued | 814,598 | |||||||||||||
Issuance expenses (in Dollars) | $ 500 | |||||||||||||
Number of warrants issued | 407,299 | |||||||||||||
Exercise price (in Dollars per share) | $ 4.90 | |||||||||||||
Outstanding warrants | 323,226 | |||||||||||||
Purchase price (in Dollars per share) | $ 6.138 | |||||||||||||
Term of the warrants | five and one-half years | |||||||||||||
Proceeds from issuance of ordinary shares and warrants, net of issuance costs (in Dollars) | $ 4,500 | |||||||||||||
Registered Direct Offering and Concurrent Private Placement [Member] | Exercise of warrants [Member] | ||||||||||||||
Number of warrants exercised | 84,073 | |||||||||||||
Proceeds from exercise of warrants (in Dollars) | $ 412 | |||||||||||||
Registered Direct Offering [Member] | Aspire Capital Fund LLC [Member] | ||||||||||||||
Number of shares issued | 356,250 | |||||||||||||
Issuance expenses (in Dollars) | $ 330 | |||||||||||||
Number of pre-funded warrants issued during the period | 356,250 | |||||||||||||
Exercise price (in Dollars per share) | $ 0.20 | |||||||||||||
Purchase price (in Dollars per share) | 7.022 | |||||||||||||
Purchase price of pre-funded warrants (in Dollars per share) | $ 6.822 | |||||||||||||
Proceeds from issuance of ordinary shares and pre-funded warrants, net of issuance costs (in Dollars) | $ 4,600 |
SHARE CAPITAL (Details) - Sched
SHARE CAPITAL (Details) - Schedule of options granted to employees and directors - $ / shares | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Employees [Member] | ||
Number of options granted (in Shares) | 47,250 | 73,250 |
Exercise price range, minimum (in Dollars per share) | $ 6.15 | $ 8.94 |
Exercise price range, maximum (in Dollars per share) | $ 8.57 | $ 152.80 |
Vesting period | 3 years | 3 years |
Expiration | 7 years | 7 years |
Employees [Member] | ||
Number of options granted (in Shares) | 37,750 | |
Exercise price range, maximum (in Dollars per share) | $ 6.43 | |
Vesting period | 1 year 3 months 14 days | |
Expiration | 7 years | |
Directors [Member] | ||
Number of options granted (in Shares) | 10,000 | 6,000 |
Exercise price range, maximum (in Dollars per share) | $ 6.15 | $ 97.20 |
Vesting period | 3 years | 3 years |
Expiration | 7 years | 7 years |
SHARE CAPITAL (Details) - Sch_2
SHARE CAPITAL (Details) - Schedule of underlying data used for computing the fair value of the options - $ / shares | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
SHARE CAPITAL (Details) - Schedule of underlying data used for computing the fair value of the options [Line Items] | ||
Dividend yield | 0.00% | 0.00% |
Expected term | 5 years | 5 years |
Minimum [Member] | ||
SHARE CAPITAL (Details) - Schedule of underlying data used for computing the fair value of the options [Line Items] | ||
Value of ordinary share (in Dollars per share) | $ 5.60 | $ 23 |
Expected volatility | 102.58% | 53.32% |
Risk-free interest rate | 0.28% | 1.75% |
Maximum [Member] | ||
SHARE CAPITAL (Details) - Schedule of underlying data used for computing the fair value of the options [Line Items] | ||
Value of ordinary share (in Dollars per share) | $ 6.20 | $ 149.20 |
Expected volatility | 110.40% | 97.81% |
Risk-free interest rate | 1.42% | 2.57% |
SHARE CAPITAL (Details) - Sch_3
SHARE CAPITAL (Details) - Schedule of effect of share-based compensation - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based compensation | $ 336 | $ 787 | $ 1,192 | $ 2,748 |
Research and development expenses, net [Member] | ||||
Share-based compensation | 136 | 371 | 495 | 1,538 |
General and administrative expenses [Member] | ||||
Share-based compensation | $ 200 | $ 416 | $ 697 | $ 1,210 |
ACCOUNTS PAYBLE AND ACCRUALS _3
ACCOUNTS PAYBLE AND ACCRUALS - OTHER (Details) - Schedule of accounts payable and accruals - other - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Schedule of accounts payable and accruals - other [Abstract] | ||
Expenses payable | $ 2,704 | $ 2,838 |
Salary and related expenses, including social security and other taxes | 518 | 1,277 |
Current operating lease liabilities | 558 | 544 |
Accrual for vacation days and recreation pay for employees | 217 | 154 |
Other | 22 | 22 |
Accounts payable and accruals - other | $ 4,019 | $ 4,835 |
EVENT SUBSEQUENT TO SEPTEMBER_2
EVENT SUBSEQUENT TO SEPTEMBER 30, 2020 (Details) - Subsequent Event [Member] - Reverse Share Split [Member] | 1 Months Ended |
Oct. 30, 2020shares | |
Reverse share split, description | 1-for-20 reverse share split |
Authorized ordinary shares before the reverse share split | 350,000,000 |
Authorized ordinary shares post the reserve share split | 17,500,000 |
Outstanding ordinary shares before the reserve share split | 78,964,492 |
Outstanding ordinary shares post the reverse share split | 3,948,226 |