☐ | 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 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Ordinary Shares, par value NIS 48.00 | CHEK | Nasdaq Capital Market |
Warrants to purchase Ordinary Shares | CHEKZ | Nasdaq Capital Market |
☐ Large Accelerated filer | ☐ Accelerated filer | ☒ Non-accelerated filer | ☐ Emerging growth company |
☒ U.S. GAAP | ☐ International Financial Reporting Standards as issued by the International Accounting Standards Board | ☐ Other |
☐ Item 17 ☐ Item 18 |
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3 | ||
A. | Directors and Senior Management | 3 |
B. | Advisers | 3 |
C. | Auditors | 3 |
3 | ||
3 | ||
A. | [Reserved.] | 3 |
B. | Capitalization and Indebtedness | 3 |
C. | Reasons for the Offer and Use of Proceeds | 3 |
D. | Risk factors | 3 |
25 | ||
A. | History and Development of the Company | 25 |
B. | Business Overview | 25 |
C. | Organizational Structure | 44 |
D. | Property, Plants and Equipment | 44 |
44 | ||
44 | ||
A. | Operating Results | 45 |
B. | Liquidity and Capital Resources | 48 |
C. | Research and development, patents and licenses, etc. | 50 |
D. | Trend Information | 50 |
E. | Critical Accounting Estimates | 50 |
51 | ||
A. | Directors and senior management | 51 |
B. | Compensation of Directors and Executive Officers | 53 |
C. | Board Practices | 55 |
D. | Employees | 61 |
E. | Share Ownership | 63 |
F. | Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation | 63 |
63 | ||
A. | Major shareholders | 63 |
B. | Related Party Transactions | 64 |
C. | Interests of Experts and Counsel | 64 |
65 | ||
A. | Consolidated Statements and Other Financial Information | 65 |
B. | Significant Changes | 65 |
65 | ||
A. | Offer and Listing Details | 65 |
B. | Plan of Distribution | 65 |
C. | Markets for Ordinary Shares | 65 |
D. | Selling Shareholders | 65 |
E. | Dilution | 65 |
F. | Expenses of the Issue | 65 |
65 | ||
A. | Share Capital | 65 |
B. | Memorandum and Articles of Association | 65 |
C. | Material Contracts | 66 |
D. | Exchange controls | 66 |
E. | Taxation | 66 |
F. | Dividends and paying agents | 74 |
G. | Statement by experts | 74 |
H. | Documents on display | 74 |
I. | Subsidiary Information | 74 |
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• | our history of losses; |
• | our needs for additional capital to fund our operations and our inability to obtain additional capital on acceptable terms, or at all; |
• | the initiation, timing, progress and results of our clinical trials and other product development efforts; |
• | our reliance on one product; |
• | the clinical development, commercialization and market acceptance of C-Scan; |
• | our ability to receive de novo classification or premarket approval and other regulatory approvals for C-Scan; |
• | our ability to successfully complete clinical trials and obtain desired performance. |
• | our reliance on single-source suppliers; |
• | our ability to achieve an acceptable cost of goods; |
• | our reliance on third parties, such as for purposes of our clinical trials and clinical development and the manufacturing, marketing and distribution of C-Scan; |
• | our ability to establish and maintain strategic partnerships and other corporate collaborations; |
• | our ability to achieve reimbursement and coverage from government and private third-party payors; |
• | the implementation of our business model and strategic plans for our business; |
• | the scope of protection we are able to establish and maintain for intellectual property rights covering C-Scan and our ability to operate our business without infringing the intellectual property rights of others; |
• | competitive companies, technologies and our industry; |
• | current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidity risk; and |
• | those factors referred to in “Item 3. Key Information – 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 generally. |
• | We have a history of losses, may incur future losses and may not achieve profitability; |
• | We will require additional funding in order to complete the development, scale up manufacturing and commercialization of C-Scan, which may cause dilution to our existing shareholders, restrict our operations or require us to relinquish rights to C-Scan or intellectual property. If additional capital is not available, we may have to delay, reduce or cease the development or commercialization of C-Scan; |
• | Although we received FDA approval of our Investigational Device Exemption, or IDE (including our IDE amended application) for our U.S. pivotal study, the timing of the initiation of the second part of the U.S. pivotal study and, if commenced, the outcome of the study is inherently uncertain, even if the study is completed; |
• | Clinical failure can occur at any stage of clinical development and we may not succeed in completing the development of our product. Our clinical experience to date does not necessarily predict future results and may not have revealed certain potential limitations of the technology and potential complications from C-Scan and may require further clinical validation. Any product version we advance through clinical trials may not have favorable results in later clinical trials or receive regulatory approval; |
• | We may face a number of challenges with respect to our commercialization efforts and may not succeed to commercialize our product, obtain required regulatory approvals or manufacture commercial quantities of C-Scan at an acceptable cost to enable us to generate significant revenues; |
• | We expect to derive most of our revenues from sales of one product. Our inability to successfully commercialize this product, or any subsequent decline in demand for this product, could severely harm our ability to generate revenues. |
• | If healthcare professionals do not recommend our product to their patients, C-Scan may not achieve market acceptance and we may not become profitable; |
• | We expect to face competition from large, well-established manufacturers of traditional technologies for CRC screening and detection of gastrointestinal disorders, as well as from new competitive technologies, especially within the field of biomarkers; |
• | We may rely on local distributors and/or strategic partners to market and distribute C-Scan in those countries where we intend to market and distribute C-Scan; |
• | We have limited manufacturing capabilities and if we are unable to scale up our manufacturing operations to meet the necessary quantities for our upcoming clinical studies or anticipated market demand, our growth could be limited and our business, financial condition and results of operations could be materially adversely affected; |
• | Our reliance on sole or single source suppliers could harm our ability to conduct clinical trials and meet demand for our product in a timely manner or within budget; |
• | A health epidemic, pandemic or other outbreak, including the current COVID-19 pandemic, may materially and adversely affect our business, financial condition and results of operations; |
• | We may not be successful in establishing and maintaining strategic partnerships, which could adversely affect our ability to develop and commercialize C-Scan; |
• | If we are unable to obtain, or experience significant delays in obtaining, FDA clearances or approvals, or equivalent third country approvals for C-Scan or future products or product enhancements, our ability to commercially distribute and market our products could suffer; |
• | There is no guarantee that the FDA will grant a de novo classification request or PMA approval of C-Scan and failure to obtain necessary clearances or approvals for our future products would adversely affect our ability to grow our business; |
• | If we or our future manufacturers or distributors do not obtain and maintain the necessary regulatory clearances or approvals, or equivalent third country approvals in a specific country or region, we or our future distributors will not be able to market and sell C-Scan or future products in that country or region; |
• | The results of our current or future clinical trials may not support our product candidate requirements or intended use claims or may result in the discovery of adverse side effects; |
• | If we fail to obtain or maintain necessary regulatory clearances or CE Certificates for C-Scan or if there are regulatory changes in our existing or future target markets, our ability to sell C-Scan and generate revenues could be harmed; |
• | Our failure to comply with radiation safety or radio frequency regulations in a specific country or region could impair our ability to conduct our clinical trials, or commercially distribute and market C-Scan in that country or region; |
• | Our business is subject to complex environmental and health legislation in various jurisdictions that may increase our costs and our risk of noncompliance; and |
• | If we are unable to achieve reimbursement and coverage from government and private third-party payors for procedures using C-Scan, or if reimbursement is insufficient to create an economic benefit for purchasing or using C-Scan when compared to alternative procedures, demand for our products may not grow at the rate we expect. |
• | If we are unable to protect our intellectual property rights, our competitive position could be harmed. |
• | Third-party claims of infringement or other claims against us could require us to redesign C-Scan, seek licenses, or engage in future costly intellectual property litigation, which could negatively affect our future business and financial performance. |
• | Our principal offices, research and development facilities our manufacturing sites and some of our suppliers are located in Israel and, therefore, our business, financial condition and results of operation may be adversely affected by political, economic and military instability in Israel. |
• | Pursuant to the terms of the Israeli government grants we received for research and development expenditures, we are obligated to pay certain royalties on our revenues to the Israeli government. In addition, the terms of Israeli government grant we received require us to satisfy specified conditions and to make additional payments in addition to repayment of the grants upon certain events. |
• | Our ordinary shares could be delisted from the Nasdaq Capital Market. |
• | Our stock price has and may be subject to fluctuation, and purchasers of our securities could incur substantial losses. |
• | Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidity risk. |
• | we may not have adequate financial or other resources to complete the development of our product, demonstrate adequate clinical results, attain required regulatory approvals and licensures, obtain adequate manufacturing and capacity and begin the commercialization efforts for C-Scan; |
• | we may fail to obtain or maintain required regulatory approvals and licensures for C-Scan in our target markets or may face adverse regulatory or legal actions relating to our system even if regulatory approval is obtained; |
• | we may not demonstrate adequate clinical safety and clinical effectiveness results from our current or future versions of C-Scan, to support regulatory body approval or market acceptance and adoption; |
• | we may face ongoing limitations imposed by the Nuclear Regulatory Commission, or NRC, or other nuclear regulatory commissions in jurisdictions in which we intend to commercialize C-Scan in relation to the disposal of our C-Scan Cap in the sanitary system, such as requiring patients to retrieve our C-Scan Cap after use, which could impact engagement with clinical sites and enrollment pace in our clinical studies and make C-Scan less attractive; |
• | we may not be able to maintain an adequate supply chain due to reliance on single or sole suppliers for critical components and scale up the manufacture of C-Scan to commercial quantities at an adequate quality or at an acceptable cost; |
• | we may not be able to establish adequate sales, marketing and distribution channels; |
• | healthcare professionals and patients may not accept C-Scan; |
• | we may not be aware of possible complications from the continued use of C-Scan because we have limited clinical experience with respect to the actual use of C-Scan; |
• | other technological breakthroughs in colorectal cancer, or CRC, screening, treatment and prevention may reduce the demand for C-Scan; |
• | changes in the market for CRC screening, new alliances between existing market participants and the entrance of new market participants may interfere with our market penetration efforts; |
• | government and private third-party payors may not agree to provide coding, coverage and payment adequate to reimburse healthcare providers and patients for any or all of the purchase price in conjunction with clinical effectiveness of C-Scan, which may adversely affect healthcare providers’ and patients’ willingness to purchase C-Scan; |
• | uncertainty as to market demand may result in inefficient pricing of C-Scan; |
• | we may not be able to adequately protect our intellectual property or may face third-party claims of intellectual property infringement; and |
• | we are dependent upon the results of ongoing clinical studies relating to C-Scan which may impact its perceived value as against competing products. |
• | market acceptance of a new product, including healthcare professionals’ and patients’ preferences; |
• | market acceptance of the clinical safety and performance of C-Scan; |
• | development of competitive or similarly cost-effective products by our competitors; |
• | development delays of C-Scan, including delays in clinical trials or FDA clearance; |
• | technological innovations in CRC screening, treatment and prevention; |
• | adverse medical side effects suffered by patients using C-Scan, whether actually resulting from the use of C-Scan or not; |
• | changes in regulatory policies toward CRC screening or imaging technologies; |
• | regulatory approval, changes in regulatory approval, clearance requirements and licensure for our product, including by the NRC or other radiation safety authorities; |
• | third-party claims of intellectual property infringement; |
• | budget constraints and the availability of reimbursement or insurance coverage from third-party payors for C-Scan; |
• | increases in market acceptance of other technologies; |
• | adverse responses from certain of our competitors to the offering of C-Scan; |
• | licensure and perceived risk of manufacturing and using a product containing a radioactive source (including associated agencies refusal to authorize capsule disposal), loss or theft; |
• | licensure of medical centers (including clinical study sites) to use or offer product containing a radioactive source; and |
• | the shelf life of our C-Scan Cap. |
• | there is sufficient long-term clinical and health-economic evidence to convince them to alter their existing screening methods and device recommendations; |
• | there are recommendations from prominent physicians, educators and/or associations that C-Scan is safe and effective; |
• | we obtain favorable data from clinical and health-economic studies for C-Scan; |
• | reimbursement or insurance coverage from government and private third-party payors is available; |
• | healthcare professionals obtain required approvals and licensures for the handling, storage, dispensing and disposal of C-Scan; and |
• | healthcare professionals become familiar with the complexities of C-Scan. |
• | foreign certification, registration and other regulatory requirements; |
• | customs clearance and shipping delays; |
• | import and export controls; |
• | trade restrictions; |
• | multiple and possibly overlapping tax structures; |
• | difficulty forecasting the results of our international operations and managing our inventory due to our reliance on third-party distributors; |
• | differing laws and regulations, business and clinical practices, licensures, government and private third-party payor reimbursement policies and patient preferences; |
• | differing standards of intellectual property protection among countries; |
• | difficulties in staffing and managing our international operations; |
• | difficulties in penetrating markets in which our competitors’ products are more established and achieving a competitive sale price for our product; |
• | currency exchange rate fluctuations and foreign currency exchange controls and tax rates; and |
• | political and economic instability, war or acts of terrorism or natural disasters, emergence of a pandemic, or other widespread health emergencies (or concerns over the possibility of such an emergency, including for example, the COVID-19 pandemic). |
• | we may not be able to demonstrate to FDA’s satisfaction that our products are safe and effective for their intended use; |
• | in the case of a 510(k) submission, we may not be able to demonstrate to FDA’s satisfaction that our products are substantially equivalent to a legally marketed predicate; |
• | the data from our non-clinical studies and clinical trials may be insufficient to support clearance or approval; |
• | in the case that PMA submission is required, that the manufacturing process or facilities we use may not meet applicable requirements; and |
• | changes in FDA’s 510(k) clearance, de novo reclassification, or PMA approval processes and policies, or the adoption of new regulations may require additional data and delays in getting to market. |
• | patients do not enroll in the clinical trial at the rate we expect; |
• | patients do not comply with trial protocols; |
• | patient follow-up is not at the rate we expect; |
• | patients withdraw from the study; |
• | patients experience severe adverse side effects, including damage to the colon wall or related to excessive radiation exposure as a result of capsule malfunction or break down or retention and may require to undergo a surgical procedure; |
• | patient death during a clinical trial, even though their death may be unrelated to our product; |
• | FDA, institutional review boards, or IRBs, or other regulatory authorities do not approve a clinical trial protocol or a clinical trial, or place a clinical trial on hold; |
• | IRBs, Ethics Committees and third-party clinical investigators may delay or reject our trial protocol and Informed Consent Form; |
• | third-party clinical investigators decline to participate in a study or trial or do not perform a study or trial on our anticipated schedule or consistent with the investigator agreements, study or trial protocol, good clinical practices, quality of clinical data or other FDA or IRBs, Ethics Committees, or any other applicable requirements; |
• | third-party organizations do not perform data collection, monitoring and analysis in a timely or accurate manner or consistent with the study or trial protocol or investigational or statistical plans; |
• | regulatory inspections of our studies, trials or manufacturing facilities may require us to, among other things, undertake corrective action or suspend or terminate our studies or clinical trials; |
• | changes in governmental regulations or administrative actions; |
• | we may not be able to develop C-Scan at the rate or to the stage we desire; |
• | the interim or final results of the study or clinical trial are inconclusive or unfavorable as to safety or efficacy; |
• | a regulatory agency or our Notified Body concludes that our trial design is or was inadequate to demonstrate safety and efficacy; |
• | the capsule disposal was not authorized by regulatory agencies or patients failed to collect the capsule following procedure completion; |
• | the capsule was lost in the sewer system; |
• | loss of clinical data; and |
• | a health epidemic, pandemic or other outbreak, including the current COVID-19 pandemic. |
• | untitled letters, warning letters, fines, injunctions, corporate integrity agreements, consent decrees and civil penalties; |
• | unanticipated expenditures to address or defend such actions; |
• | customer notifications for repair, replacement or refunds; |
• | recall, detention or seizure of our products; |
• | operating restrictions or partial suspension or total shutdown of production; |
• | refusing or delaying our requests for 510(k) clearance, de novo classification or premarket approval of new products or modified products; |
• | operating restrictions; |
• | withdrawing 510(k) clearances, de novo classification, or PMA approvals that have already been granted; |
• | suspension or withdrawal of our CE Certificates; |
• | refusal to grant export approval for our products; or |
• | civil or criminal prosecution. |
• | pending and future patent applications may not result in the issuance of patents or, if issued, may not be issued in a form that will be advantageous to us; |
• | our issued patents may be challenged, invalidated or legally circumvented by third parties; |
• | our patents may not be upheld as valid and enforceable or prevent the development of competitive products; |
• | the eligibility of certain inventions related to diagnostic medicine, more specifically diagnostic methods and processes, for patent protection in the United States has been limited recently which may affect our ability to enforce our issued patents in the United States or may make it difficult to obtain broad patent protection going forward in the United States; |
• | the eligibility to protect methods for treating humans, which is available in the US, is generally not available in other countries, for example in Europe; |
• | for a variety of reasons, we may decide not to file for patent protection on various improvements or additional features; and |
• | intellectual property protection and/or enforcement may be unavailable or limited in some countries where laws or law enforcement practices may not protect our proprietary rights to the same extent as the laws of the United States, the European Union, Canada or Israel. |
• | the agreements may be breached, may not provide the scope of protection we believe they provide or may be determined to be unenforceable, in part or in whole; |
• | we may have inadequate remedies for any breach; |
• | proprietary information could be disclosed to our competitors; or |
• | others may independently develop substantially equivalent or superior proprietary information and techniques or otherwise gain access to our trade secrets or disclose such technologies. |
• | we may not be able to develop C-Scan at the rate or to the stage we desire; |
• | inability to obtain the approvals necessary to commence further clinical trials; |
• | unsatisfactory results of clinical trials; |
• | announcements of regulatory approval or the failure to obtain it, or specific label indications or patient populations for its use, or changes or delays in the regulatory review process; |
• | any intellectual property infringement actions in which we may become involved; |
• | announcements concerning our competitors or the medical device industry in general; |
• | achievement of expected product sales and profitability or our failure to meet expectations; |
• | our commencement of, or involvement in, litigation; |
• | any major changes in our board of directors or management; |
• | legislation in the United States relating to the sale or pricing of medical device; |
• | future substantial sales of our ordinary shares; |
• | changes in earnings estimates or recommendations by securities analysts, if our ordinary shares are covered by analysts; |
• | the trading volume of our ordinary shares; or |
• | natural disasters and political and economic instability, including wars, terrorism, political unrest, results of certain elections and votes, emergence of a pandemic, or other widespread health emergencies (or concerns over the possibility of such an emergency, including for example, the COVID-19 pandemic), boycotts, adoption or expansion of government trade restrictions, and other business restrictions. |
• | seeking to obtain regulatory approvals for the sale of C-Scan in the United States; |
• | enter into partnerships in the future when strategically attractive, including potentially with major medical device companies; |
• | obtaining government and private third-party reimbursement for our technology; |
• | improving and enhancing our existing technology portfolio and developing new technologies; and |
• | successfully marketing our product to establish a large customer base, primarily in the U.S. |
![](https://capedge.com/proxy/20-F/0001178913-23-001275/image1.jpg)
![](https://capedge.com/proxy/20-F/0001178913-23-001275/image00014.jpg)
• | X-ray Source – Including radioactive material sealed in a cylindrical housing. |
• | Collimator – Radiation shield around the source, which absorbs most of the radiation. Several radial holes enable emission of radiation in defined directions. |
• | X-ray Sensor – Comprised of several solid state X-ray detectors for measuring the scattered radiation intensity. |
• | Tilt Sensor – Indication of capsule motion (3D acceleration). |
• | Rotation Motor – For rotating the collimator and X-ray Source. |
• | Compass sensor – Indication of true north (reference coordinate system). |
• | Pressure sensor – indicating the hydrostatic pressure inside the colon. |
• | Source Concealment Mechanism – Conceals the source inside the radiation shield. |
• | R-T – Radio frequency transceiver device to communicate with the receiver. |
• | Batteries – Electrical power supply for the capsule. |
• | Memory – Data storage. The capsule should be able to store up to an hour of measured data. |
• | C-Scan Track Coil – Transmits a continuous electromagnetic field utilized by an external localization system to track 3D position. |
![](https://capedge.com/proxy/20-F/0001178913-23-001275/image3.jpg)
![](https://capedge.com/proxy/20-F/0001178913-23-001275/image4.jpg)
• | Sticker Housings – Biocompatible and water-resistant stickers and housing integrating all functional components, attached to the patient’s back, enabling approximately five days of continuous operation. |
• | Recorder – Consists of receiver electronics embedded software and nonvolatile memory. |
• | Antennas – Radio frequency antennas are embedded into the sticker housings and used to communicate with the capsule. |
• | Activation/Deactivation Circuit – Used to activate/deactivate the C-Scan Track through a specialized protocol. |
• | UI Indicators – Provides user with vocal and vibration indication as required. |
• | PCB – Electronics’ printed circuit boards. |
• | Microcontroller – Runs embedded software, logic that manages the C-Scan Track and SCA. |
• | RF Transceivers – Several transceivers used to communicate with the capsule. |
• | TILT/Compass Sensors – To determine the patient’s body movements. |
• | Batteries – Electrical power supply for the C-Scan Track. |
• | Memory – Non-volatile data storage to store data acquired by the system. |
![](https://capedge.com/proxy/20-F/0001178913-23-001275/image5.jpg)
• | Load and display procedure information and data; |
• | Image review, enabling the user to view structural information of the colon wall; |
• | Produce procedure report; and |
• | Store procedure results on server. |
![](https://capedge.com/proxy/20-F/0001178913-23-001275/image6.jpg)
• | Modulation Transfer Function, or MTF. The capsule was moved along a longitudinal-edge phantom setup in 3mm steps. The figure below shows a typical raw signal after filtering for peak detection. The same test was carried out using an angular-edge phantom setup, which demonstrated similar results to those shown below. These tests do not take into account noise characteristics. |
![](https://capedge.com/proxy/20-F/0001178913-23-001275/image7.jpg)
![](https://capedge.com/proxy/20-F/0001178913-23-001275/image8.jpg)
• | Resolution Limit: Estimation of the Smallest Visible Object Size. In order to estimate the size of the smallest visible object, both spatial resolution and noise characteristics must be taken into account. The graph below presents the estimated MTF of C-Scan. Noise analysis indicates MTF 1/3 for minimum visibility, which demonstrates that the smallest visible object that can be detected with the existing design of C-Scan (in the conditions used, which included a colon diameter of 30mm) is of approximately 5-6 mm (see graph below). |
![](https://capedge.com/proxy/20-F/0001178913-23-001275/image9.jpg)
• | The number of photons hitting the detector per time frame. |
• | The angular spread of the photon beam coming out of the capsule collimator. |
![](https://capedge.com/proxy/20-F/0001178913-23-001275/image10.jpg)
![](https://capedge.com/proxy/20-F/0001178913-23-001275/image11.jpg)
![](https://capedge.com/proxy/20-F/0001178913-23-001275/image12.jpg)
![](https://capedge.com/proxy/20-F/0001178913-23-001275/image13.jpg)
• | our technology has been tested on a limited basis and therefore we cannot assure the product’s clinical value; |
• | we need to raise an amount of capital sufficient to complete the development of our technology, obtain the requisite regulatory approvals and commercialize our current and future products; |
• | following the receipt of CE Mark of conformity to protection standards for sale of the C-Scan system in the European Union, we may need to obtain additional regulatory approvals in certain local jurisdictions in the European Union before we can commence marketing and sale of C-Scan and will need to obtain the requisite regulatory approvals in the United States, Japan and other markets where we plan to focus our commercialization efforts; |
• | we need to obtain reimbursement coverage from third-party payors for procedures using C-Scan; |
• | we need to scale-up our manufacturing capabilities of C-Scan in commercial quantities at an adequate quality and at an acceptable cost; and |
• | we need to establish and expand our user base while competing against other sellers of capsule endoscopy systems as well as other current and future CRC screening technologies and methods. |
• | product design and development; |
• | product testing; |
• | validation and verifications; |
• | product manufacturing (good manufacturing practices); |
• | product labeling; |
• | product storage, shipping and handling; |
• | premarket clearance or approval; |
• | advertising and promotion; |
• | product marketing, sales and distribution; |
• | product recalls; and |
• | post-market surveillance reporting death or serious injuries and medical device reporting. |
• | Class I devices, which are subject to only general controls (e.g., labeling, medical devices reporting, and prohibitions against adulteration and misbranding) and, in some cases, to the 510(k) premarket clearance requirements; |
• | Class II devices, generally requiring 510(k) premarket clearance before they may be commercially marketed in the United States; and |
• | Class III devices, consisting of devices deemed by the FDA to pose the greatest risk, such as life-sustaining, life-supporting or implantable devices, or devices deemed not substantially equivalent to a predicate device, generally requiring the submission of a PMA approval supported by clinical trial data. |
• | establishment registration and device listing with the FDA; |
• | QSR requirements, which require manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the design and manufacturing process; |
• | labeling regulations and FDA prohibitions against the promotion of investigational products, or the promotion of ‘‘off-label’’ uses of cleared or approved products; |
• | requirements related to promotional activities; |
• | clearance or approval of product modifications to 510(k)-cleared devices that could significantly affect safety or effectiveness or that would constitute a major change in intended use of one of our cleared devices, or approval of certain modifications to PMA-approved devices; |
• | medical device reporting regulations, which require that a manufacturer report to the FDA if a device it markets may have caused or contributed to a death or serious injury, or has malfunctioned and the device or a similar device that it markets would be likely to cause or contribute to a death or serious injury, if the malfunction were to recur; |
• | correction, removal and recall reporting regulations, which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDCA that may present a risk to health; |
• | the FDA’s recall authority, whereby the agency can order device manufacturers to recall from the market a product that is in violation of governing laws and regulations; and |
• | post-market surveillance activities and regulations, which apply when deemed by the FDA to be necessary to protect the public health or to provide additional safety and effectiveness data for the device. |
• | FDA untitled letters, FDA Form 483s, FDA warning letters, it has come to our attention letters, fines, injunctions, consent decrees and civil penalties; |
• | unanticipated expenditures to address or defend such actions; |
• | customer notifications or repair, replacement, refunds, recall, detention or seizure of our products; |
• | recall, detention or seizure of our products; |
• | operating restrictions, partial suspension or total shutdown of production; |
• | refusing or delaying our requests for regulatory approvals or clearances of new products or modified products; |
• | withdrawing of 510(k) clearances or PMA approvals that have already been granted; |
• | refusal to grant export approval for our products; or |
• | civil or criminal prosecution. |
• | The federal Anti-Kickback Statute, which prohibits, among other things, knowingly or willingly offering, paying, soliciting or receiving remuneration, directly or indirectly, in cash or in kind, to induce or reward the purchasing, leasing, ordering or arranging for or recommending the purchase, lease or order of any health care items or service for which payment may be made, in whole or in part, by federal healthcare programs such as Medicare and Medicaid. This statute has been interpreted to apply to arrangements between medical device manufacturers on one hand and prescribers, purchasers and formulary managers on the other. Further, PPACA, among other things, clarified that a person or entity needs not to have actual knowledge of the federal Anti-Kickback Statute or specific intent to violate it. Although there are a number of statutory exemptions and regulatory safe harbors to the federal Anti-Kickback Statute protecting certain common business arrangements and activities from prosecution or regulatory sanctions, the exemptions and safe harbors are drawn narrowly, and practices that do not fit squarely within an exemption or safe harbor may be subject to scrutiny; |
• | The federal civil False Claims Act, which prohibits, among other things, individuals or entities from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment of government funds or knowingly making, using or causing to be made or used, a false record or statement material to an obligation to pay money to the government or knowingly concealing or knowingly and improperly avoiding, decreasing, or concealing an obligation to pay money to the federal government. In addition, PPACA amended the Social Security Act to provide that the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act. Many medical device manufacturers and other healthcare companies have been investigated and have reached substantial financial settlements with the federal government under the civil False Claims Act for a variety of alleged improper marketing activities, including providing free product to customers with the expectation that the customers would bill federal programs for the product; providing consulting fees, grants, free travel, and other benefits to physicians to induce them to use the company’s products. In addition, in recent years the government has pursued civil False Claims Act cases against a number of manufacturers for causing false claims to be submitted as a result of the marketing of their products for unapproved, and thus non-reimbursable, uses. Device manufacturers also are subject to other federal false claim laws, including, among others, federal criminal healthcare fraud and false statement statutes that extend to non-government health benefit programs; |
• | Analogous state laws and regulations, such as state anti-kickback and false claims laws, may apply to items or services reimbursed under Medicaid and other state programs or, in several states, apply regardless of the payor. Several states now require medical device manufacturers to report expenses relating to the marketing and promotion or require them to implement compliance programs or marketing codes. For example, California, Connecticut and Nevada mandate the implementation of corporate compliance programs, while Massachusetts and Vermont impose more detailed restrictions on device manufacturers’ marketing practices and tracking and reporting of gifts, compensation and other remuneration to healthcare providers; |
• | The federal Foreign Corrupt Practices Act of 1997 and other similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from providing money or anything of value to officials of foreign governments, foreign political parties, or international organizations with the intent to obtain or retain business or seek a business advantage. Recently, there has been a substantial increase in anti-bribery law enforcement activity by U.S. regulators, with more frequent and aggressive investigations and enforcement proceedings by both the Department of Justice and the U.S. Securities and Exchange Commission. Violations of these laws can result in the imposition of substantial fines, interruptions of business, loss of supplier, vendor or other third-party relationships, termination of necessary licenses and permits, and other legal or equitable sanctions. Other internal or government investigations or legal or regulatory proceedings, including lawsuits brought by private litigants, may also follow as a consequence; and |
• | The federal Physician Payment Sunshine Act, being implemented as the Open Payments Program, requires manufacturers of “covered products” (drugs, devices, biologics, or medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program) to track and publicly report payments and other transfers of value that they provide to U.S. physicians and teaching hospitals, as well as any ownership interests that U.S. physicians hold in applicable manufacturer. Applicable manufacturers must submit a report to the Centers for Medicare & Medicaid Services, or CMS, by the 90th day of each calendar year disclosing payments and transfers of value made in the preceding calendar year. |
• | No. 1 type license for marketing – Specially controlled medical devices (Class III, IV) |
• | No. 2 type license for marketing – Controlled medical devices (Class II) |
• | No. 3 type license for marketing – General medical devices (Class I) |
• | CRC education and awareness as part of First Lady Jill Biden’s cancer screening messaging efforts, |
• | Comprehensive CRC screening solutions supporting current screening tools, enabling the workgroup to reach underserved communities, |
• | Building on previous successes of the CDC’s Colorectal Cancer Control Program (CRCCP). |
• | employee-related expenses for research and development staff (including research and development, clinical, operations, production and Q&A staff), including salaries, benefits and related expenses, share-based compensation and travel expenses; |
• | payments associated with clinical activities including payments made to third-party CROs, investigative sites, patients, materials and consultants; |
• | payments associated with the development activities of our advanced C-Scan system and non-clinical activities, including payments made to third-party subcontractors, providers and consultants; |
• | manufacturing development costs and manufacturing scale up costs; |
• | costs associated with regulatory operations; |
• | facilities, depreciation and other expenses, which include direct and allocated expenses for rent and maintenance of facilities; and |
• | costs associated with obtaining and maintaining patents. |
Year Ended December 31, | ||||||||
2022 | 2021 | |||||||
(US$ in thousands, except per share data) | ||||||||
Research and development expenses, net | $ | 14,271 | $ | 12,349 | ||||
General and administrative expenses | 5,763 | 4,972 | ||||||
Operating loss | 20,034 | 17,321 | ||||||
Finance income, net | 926 | 119 | ||||||
Net loss | $ | 19,108 | $ | 17,202 |
2022 | 2021 | Change | ||||||||||
(US$ in thousands) | ||||||||||||
Salaries and related expenses | $ | 8,257 | $ | 7,428 | $ | 829 | ||||||
Share-based compensation | 493 | 329 | 164 | |||||||||
Materials | 2,258 | 3,020 | (762 | ) | ||||||||
Subcontractors and consultants (*) | 1,375 | 820 | 555 | |||||||||
Depreciation | 289 | 169 | 120 | |||||||||
Cost for registration of patents | 140 | 153 | (13 | ) | ||||||||
Other research and development expenses(*) | 1,681 | 861 | 820 | |||||||||
14,493 | 12,780 | 1,713 | ||||||||||
Less participation of the IIA (formerly the OCS) | (222 | ) | (431 | ) | 209 | |||||||
Total research and development expenses, net | $ | 14,271 | $ | 12,349 | $ | 1,922 |
2022 | 2021 | Change | ||||||||||
(US$ in thousands) | ||||||||||||
Salaries and related expenses | $ | 1,784 | $ | 2,042 | $ | (258 | ) | |||||
Share-based compensation | 386 | 162 | 224 | |||||||||
Professional services | 1,092 | 710 | 382 | |||||||||
Office rent and maintenance | 246 | 172 | 74 | |||||||||
Depreciation | 116 | 36 | 80 | |||||||||
Other general and administrative expenses | 2,139 | 1,850 | 289 | |||||||||
Total general and administrative expenses | $ | 5,763 | $ | 4,972 | $ | 791 |
Year Ended December 31 | ||||||||
2021 | 2020 | |||||||
(US$ in thousands, except per share data) | ||||||||
Research and development expenses, net | $ | 12,349 | $ | 10,008 | ||||
General and administrative expenses | 4,972 | 3,924 | ||||||
Operating loss | 17,321 | 13,932 | ||||||
Finance income, net | 119 | 86 | ||||||
Net loss | $ | 17,202 | $ | 13,846 |
2021 | 2020 | Change | ||||||||||
(US$ in thousands) | ||||||||||||
Salaries and related expenses | $ | 7,428 | $ | 6,173 | $ | 1,255 | ||||||
Share-based compensation | 329 | 165 | 164 | |||||||||
Materials | 3,020 | 1,792 | 1,228 | |||||||||
Subcontractors and consultants(*) | 820 | 1,103 | (283 | ) | ||||||||
Depreciation | 169 | 123 | 46 | |||||||||
Cost for registration of patents | 153 | 164 | (11 | ) | ||||||||
Other research and development expenses(*) | 861 | 488 | 373 | |||||||||
12,780 | 10,008 | 2,772 | ||||||||||
Less participation of the IIA (formerly the OCS) | (431 | ) | - | (431 | ) | |||||||
Total research and development expenses, net | $ | 12,349 | $ | 10,008 | $ | 2,341 |
2021 | 2020 | Change | ||||||||||
(US$ in thousands) | ||||||||||||
Salaries and related expenses | $ | 2,042 | $ | 1,698 | $ | 344 | ||||||
Share-based compensation | 162 | 243 | (81 | ) | ||||||||
Professional services | 710 | 574 | 136 | |||||||||
Office rent and maintenance | 172 | 174 | (2 | ) | ||||||||
Depreciation | 36 | 25 | 11 | |||||||||
Other general and administrative expenses | 1,850 | 1,210 | 640 | |||||||||
Total general and administrative expenses | $ | 4,972 | $ | 3,924 | $ | 1,048 |
• | our ability to obtain funding from third parties, including any future collaborative partners; |
• | the scope, rate of progress and cost of our clinical trials and other research and development programs; |
• | the time and costs required to gain regulatory approvals; |
• | the terms and timing of any collaborative, licensing and other arrangements that we may establish; |
• | the costs of filing, prosecuting, defending and enforcing patents, patent applications, patent claims, trademarks and other intellectual property rights; |
• | any product liability or other lawsuits related to our product; |
• | the expenses needed to attract and retain skilled personnel; |
• | the costs and timing of future commercialization activities, including product manufacturing, marketing, sales, and distribution; |
• | the revenue, if any, received from commercial sales of our product; |
• | the general and administrative expenses related to being a public company; |
• | the effect of competition and market developments |
• | future clinical trial results; |
• | the COVID – 19 pandemic; and |
• | the political and security situation in Israel. |
Year Ended December 31, | ||||||||||||
2022 | 2021 | 2020 | ||||||||||
US$ (in thousands) | ||||||||||||
Net cash used in operating activities | $ | (18,707 | ) | $ | (16,264 | ) | $ | (13,113 | ) | |||
Net cash used in investing activities | $ | (12,508 | ) | $ | (16,006 | ) | $ | (10,451 | ) | |||
Net cash provided by financing activities | $ | 8,850 | $ | 51,024 | $ | 23,582 |
• | completion of the clinical development of C-Scan; |
• | conducting clinical trials in the United States and other territories for purposes of regulatory approval and post-marketing validation; |
• | development of advanced version and future generations of C-Scan and future products; |
• | FDA and additional regulatory filing activities in countries we intend to commercialize our system; |
• | Manufacturing scale up costs; and |
• | Capital expenditures. |
Name | Age | Position(s) |
Alex Ovadia | 61 | Chief Executive Officer |
Mira Rosenzweig | 51 | Chief Financial Officer |
Yoav Kimchy | 62 | Chief Technology Officer |
Boaz Shpigelman | 51 | Vice President, Research and Development |
Joshua (Shuki) Belkar | 54 | Vice President, Operations |
Hanit Brenner-Lavie | 51 | Vice President, Clinical Affairs |
Israel Hershko | 57 | Vice President, Quality Assurance and Regulatory Affairs |
Steven Hanley (1)(2) | 55 | Chairman of the Board of Directors |
Clara Ezed (3)(4) | 53 | Director |
Mary Jo Gorman (1)(2)(3)(4) | 63 | Director |
XiangQian (XQ) Lin | 41 | Director |
Yuval Yanai (1)(2)(3)(4) | 70 | Director |
(1) | Member of our Nominating Committee. |
(2) | Member of our Financing Committee. |
(3) | Member of our Compensation Committee. |
(4) | Member of our Audit Committee. |
Salary Cost (1) | Bonus (2) | Share-Based Compensation (3) | Total | |||||||||||||
Name and Principal Position | US$ | |||||||||||||||
Alex Ovadia – Chief Executive Officer | $ | 405,742 | $ | 3,603 | $ | 309,320 | $ | 718,665 | ||||||||
Yoav Kimchy – Chief Technology Officer | $ | 369,727 | $ | (7,074 | ) | $ | 26,425 | $ | 389,078 | |||||||
Mira Rosenzweig- Chief Financial Officer | $ | 285,710 | $ | 2,275 | $ | 40,669 | $ | 328,654 | ||||||||
Boaz Shpigelman -Vice President, Research and Development | $ | 285,883 | $ | (1,260 | ) | $ | 33,055 | $ | 317,678 | |||||||
Joshua (Shuki) Belkar- Vice President, Operation | $ | 268,171 | $ | 1,395 | $ | 38,430 | $ | 307,996 |
(1) | “Salary Cost” includes the Covered Executive’s gross salary plus payment of social benefits made by us on behalf of such Covered Executive. Such benefits may include, to the extent applicable to the Covered Executive, payments, contributions and/or allocations for savings funds, education funds, pension, severance, risk insurances, payments for social security and tax gross-up payments, vacation, a leased car and associated expenses, medical insurances and benefits, convalescence or recreation pay and other benefits and perquisites consistent with our policies. |
(2) | Represents an adjustment to the amount of the estimated 2021 annual bonus that was recorded in the year ended December 31, 2021 to the actual 2021 annual bonus that was approved for payment in 2022. |
(3) | Represents the share-based compensation expenses recorded in our consolidated financial statements for the year ended December 31, 2022 based on the fair value of the grant date of the equity awards, in accordance with accounting guidance for equity-based compensation. |
Name | Date of Grant | Security Type | Purchase Price | Number of Shares Underlying Award | Expiration Date | Total Benefit (in US$) | Benefit recognized in 2022 (in US$) | |||||||
Mira Rosenzweig(1) | March 21, 2022 | Options | $10.184 | 1,225 | March 21, 2032 | $8,596 | $3,948 | |||||||
March 21, 2022 | RSU | 525 | March 21, 2032 | $4,341 | $1,994 | |||||||||
Yoav Kimchy(1) | March 21, 2022 | Options | $10.184 | 700 | March 21, 2032 | $4,912 | $2,256 | |||||||
March 21, 2022 | RSU | 300 | March 21, 2032 | $2,480 | $1,140 | |||||||||
Boaz Shpigelman(1) | March 21, 2022 | Options | $10.184 | 1,050 | March 21, 2032 | $7,368 | $3,384 | |||||||
March 21, 2022 | RSU | 450 | March 21, 2032 | $3,721 | $1,709 | |||||||||
Joshua (Shuki) Belkar(1) | March 21, 2022 | Options | $10.184 | 1,225 | March 21, 2032 | $8,596 | $3,948 | |||||||
March 21, 2022 | RSU | 525 | March 21, 2032 | $4,341 | $1,994 |
(1) | All options and RSUs granted to the Covered Executives in fiscal year 2022 vest over a four-year period commencing on their date of grant, such that 25% of the award shall vest on the first anniversary of the date of grant and 2.0833% will vest at the end of each month thereafter. Alex Ovadia, our chief executive officer, was not granted any equity-based compensation in 2022. |
• | oversight of our independent registered public accounting firm and recommending the engagement, compensation or termination of engagement of our independent registered public accounting firm to the board of directors or shareholders for their approval, as applicable, in accordance with the requirements of the Israeli Companies Law; |
• | recommending the engagement or termination of the person filling the office of our internal auditor; and |
• | recommending the terms of audit and non-audit services provided by the independent registered public accounting firm for pre-approval by our board of directors or shareholders for their approval, as applicable, in accordance with the requirements of the Israeli Companies Law. |
• | determining whether there are deficiencies 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 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 Israeli Companies Law (see “— Approval of Related Party Transactions under Israeli Law”); |
• | determining whether a competitive process must be implemented for the approval of certain transactions with controlling shareholders or its relative or in which a controlling shareholder has a personal interest (whether or not the transaction is an extraordinary transaction), under the supervision of the audit committee or other party determined by the audit committee and in accordance with standards to be determined by the audit committee, or whether a different process determined by the audit committee should be implemented for the approval of such transactions; |
• | determining the process for the approval of certain transactions with controlling shareholders or in which a controlling shareholder has a personal interest that the audit committee has determined are not extraordinary transactions but are not immaterial transactions; |
• | 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 compensation 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 to the board of directors for its approval (i) a compensation policy; (ii) whether a compensation policy should continue in effect, if the then-current policy has a term of greater than three years (approval of either a new compensation policy or the continuation of an existing compensation policy must in any case occur every three years); and (iii) periodic updates to the compensation policy. See “— Compensation Committee and Compensation Policy.” In addition, the compensation committee is required to periodically examine the implementation of the compensation policy; |
• | the approval of the terms of employment and service of office holders (including determining whether the compensation terms of a candidate for chief executive officer of the company need not be brought to approval of the shareholders); and |
• | reviewing and approving grants of options and other incentive awards to persons other than office holders to the extent such authority is delegated by our board of directors, subject to the limitations on such delegation as provided in the Israeli Companies Law. |
• | the knowledge, skills, expertise, professional experience and accomplishments of the relevant office holder; |
• | the office holder’s roles and responsibilities and prior compensation agreements with him or her; |
• | with respect to variable compensation – the possibility of reducing variable compensation at the discretion of the board of directors, and the possibility of setting a limit on the exercise value of non-cash variable equity-based compensation; and |
• | with respect to severance compensation, the period of employment or service of the office holder, the terms of his or her compensation during such period, the company’s performance during such period, the person’s contribution towards the company’s achievement of its goals and the maximization of its profits, and the circumstances under which the person is leaving the company. |
• | the link between variable compensation (e.g., bonuses) and long-term performance and measurable criteria (i.e., variable compensation must be determined based on long-term performance and measurable criteria). Only “non-material” portion of variable compensation may be determined based on criteria that is not measurable, taking into account office holders’ contribution to the company; |
• | the ratio of variable to fixed compensation, and the ceiling for the value of variable compensation, which is determined at the time of payment, except that the ceiling for equity-based compensation is determined at the time of grant; |
• | the conditions under which an office holder would be required to repay compensation paid to him or her if it was later shown that the data upon which such compensation was based was inaccurate and was required to be restated in the company’s financial statements; |
• | the minimum holding or vesting period for variable, equity-based compensation, while taking into account long-term objectives; and |
• | maximum limits for severance compensation. |
• | 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, within the meaning of the Israeli Companies Law (including a director and the general manager) of the company (or a relative thereof); or |
• | a member of the company’s independent accounting firm, or anyone on his or her 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 any such action. |
• | refrain from any 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 majority of the shares held by all shareholders who do not have a personal interest in the transaction and who are present and voting on the matter approves the transaction, excluding abstentions; or |
• | the shares voted against the transaction by shareholders who have no personal interest in the transaction and who are present and voting at the meeting do not exceed 2% of the voting rights in the company. |
• | an amendment to the company’s articles of association; |
• | an increase of the company’s authorized share capital; |
• | a merger; and |
• | the approval of related party transactions and acts of office holders that require shareholder approval. |
• | a 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 shall detail the abovementioned foreseen events and amount or criteria; |
• | reasonable litigation expenses, including attorneys’ fees, incurred by the office holder (1) 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 (i) no indictment was filed against such office holder as a result of such investigation or proceeding; and (ii) 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 (2) in connection with a monetary sanction; |
• | 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; and |
• | expenses, including reasonable litigation expenses and legal fees, incurred by an office holder in relation to an administrative proceeding instituted against such office holder, or certain compensation payments made to an injured party imposed on an office holder by an administrative proceeding, pursuant to certain provisions of the Israeli Securities Law. |
• | a breach of the duty of loyalty to the company, provided that the office holder acted in good faith and had a reasonable basis to believe that the act would not harm the company; |
• | a breach of the duty of care to the company or to a third party, to the extent such a breach arises out of the negligent conduct of the office holder; |
• | a financial liability imposed on the office holder in favor of a third party; and |
• | expenses, including reasonable litigation expenses and legal fees, incurred by an office holder in relation to an administrative proceeding instituted against such office holder or certain compensation payments to an injured party imposed on an office holder by an administrative proceeding, pursuant to certain provisions of the Securities Law. |
• | a breach of the duty of loyalty, except for indemnification and insurance for a breach of the duty of loyalty 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 breach of the 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, monetary sanction or forfeit levied against the office holder. |
• | To determine whether and to what extent awards are to be granted to participants under the 2015 Plan and to select the eligible recipients of awards under the 2015 Plan; |
• | To approve forms of agreement for use under the 2015 Plan; |
• | To determine the terms and conditions of any award under the 2015 Plan, including the exercise price, the time or times and the extent to which the awards may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any award or the ordinary shares relating thereto, based in each case on such factors as the Administrator, at its sole discretion, shall determine; |
• | To determine the fair market value of the shares covered by each award; |
• | To make an election as to the type of Section 102 Option; |
• | To prescribe, amend and rescind rules and regulations relating to the 2015 Plan, including rules and regulations relating to sub-plans established for the purpose of qualifying for preferred tax treatment under foreign tax laws; |
• | To authorize conversion or substitution under the 2015 Plan of any or all awards and to cancel or suspend awards, as necessary, provided the material interests of the participants are not harmed; |
• | To construe and interpret the terms of the 2015 Plan and awards granted pursuant to the 2015 Plan; and |
• | To alter, revise or otherwise adjust the terms of the 2015 Plan and the award agreement, as may be required pursuant to any applicable laws of local or foreign jurisdictions. |
Ordinary Shares Beneficially Owned | ||||||||
Number | Percent | |||||||
Directors and Executive Officers | ||||||||
Alex Ovadia (1) | 19,271 | * | ||||||
Yoav Kimchy (2) | 7,440 | * | ||||||
Boaz Shpigelman (3) | 4,823 | * | ||||||
Joshua (Shuki) Belkar (4) | 3,370 | * | ||||||
Hanit Brenner-Lavie (5) | 790 | * | ||||||
Israel Hershko (6) | 3,279 | * | ||||||
Mira Rosenzweig (7) | 3,660 | * | ||||||
Steven Hanley (8) | 1,253 | * | ||||||
Clara Ezed (9) | 1,207 | * | ||||||
Mary Jo Gorman (10) | 1,247 | * | ||||||
XiangQian (XQ) Lin (11) | 2,150 | * | ||||||
Yuval Yanai (12) | 1,254 | * | ||||||
All director and executive officers as a group (12 persons)(13) | 49,743 | 0.84 | % |
(1) | Includes (i) 752 outstanding ordinary shares, and (ii) 18,519 ordinary shares subject to options currently exercisable or options and/or RSUs that will become exercisable or vested within 60 days of the date of this table |
(2) | Includes (i) 2,289 ordinary shares directly held by Yoav Kimchy, (ii) 3,730 ordinary shares subject to options and RSUs held by Yoav Kimchy currently exercisable or options and/or RSUs held by Yoav Kimchy that will become exercisable or vested within 60 days of the date of this table, (iii) 1,334 ordinary shares directly held by Sigalit Kimchy, the wife of Yoav Kimchy, and (iv) 87 ordinary shares subject to options and RSUs held by Sigalit Kimchy currently exercisable or options and/or RSUs that will become exercisable or vested within 60 days of the date of this table. Yoav Kimchy and Sigalit Kimchy have joint beneficial ownership over the shares beneficially held by them. |
(3) | Includes (i) 914 outstanding ordinary shares, and (ii) 3,909 ordinary shares subject to options currently exercisable or options and/or RSUs that will become exercisable or vested within 60 days of the date of this table. |
(4) | Includes (i) 385 ordinary shares, and (ii) 2,985 ordinary shares subject to options currently exercisable or options and/or RSUs that will become exercisable or vested within 60 days of the date of this table. |
(5) | Includes 790 ordinary shares subject to options currently exercisable or options and/or RSUs that will become exercisable or vested within 60 days of the date of this table. |
(6) | Includes (i) 565 outstanding ordinary shares, and (ii) 2,714 ordinary shares subject to options currently exercisable or options and/or RSUs that will become exercisable or vested within 60 days of the date of this table. |
(7) | Includes (i) 415 outstanding ordinary shares, and (ii) 3,245 ordinary shares subject to options currently exercisable or options and/or RSUs that will become exercisable or vested within 60 days of the date of this table. |
(8) | Includes (i) 258 outstanding ordinary shares, and (ii) 995 ordinary shares subject to options currently exercisable or options and/or RSUs that will become exercisable or vested within 60 days of the date of this table. |
(9) | Includes (i) 212 outstanding ordinary shares, and (ii) 995 ordinary shares subject to options currently exercisable or options and/or RSUs that will become exercisable or vested within 60 days of the date of this table. |
(10) | Includes (i) 252 outstanding ordinary shares, and (ii) 995 ordinary shares subject to options currently exercisable or options and/or RSUs that will become exercisable or vested within 60 days of the date of this table. |
(11) | Includes (i) 953 outstanding ordinary shares, and (ii) 1,197 ordinary shares subject to options currently exercisable or options and/or RSUs that will become exercisable or vested within 60 days of the date of this table. |
(12) | Includes (i) 259 outstanding ordinary shares, and (ii) 995 ordinary shares subject to options currently exercisable or options and/or RSUs that will become exercisable or vested within 60 days of the date of this table. |
(13) | Includes (i) 8,588 outstanding ordinary shares, and (ii) 41,155 ordinary shares subject to options currently exercisable or options and/or RSUs that will become exercisable or vested within 60 days of the date of this table. |
• | approval of certain related party transactions; |
• | increases or reductions of our authorized share capital; |
• | mergers; and |
• | the exercise of our board of director’s powers by a general meeting, if our board of directors is unable to exercise its powers and the exercise of any of its powers is essential for our proper management. |
• | amortization over an eight-year period, beginning from the year in which such rights were first used, of the cost of purchased know-how and patents and rights to use a patent and know-how which are used for the development or advancement of the Industrial Enterprise; |
• | under limited conditions, a Parent Company (as such term defined in the Industry Encouragement Law) may elect to file consolidated tax returns with related Israeli Industrial Companies; and |
• | expenses related to a public offering are deductible in equal amounts over three years beginning from the year of the offering. |
• | an individual citizen or resident of the United States; |
• | a corporation (or other entity treated as a corporation) that is created or organized (or treated as created or organized) in or under the laws of the United States, any state thereof or the District of Columbia; |
• | an estate whose income is includible in gross income for U.S. federal income tax purposes regardless of its source; or |
• | a trust if (i) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S. persons are authorized to control all substantial decisions of the trust; or (ii) it has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person. |
• | financial institutions or financial services entities; |
• | broker-dealers; |
• | persons that are subject to the mark-to-market accounting rules under Section 475 of the Code; |
• | tax-exempt entities; |
• | retirement plans; |
• | governments or agencies or instrumentalities thereof; |
• | insurance companies; |
• | regulated investment companies; |
• | real estate investment trusts; |
• | grantor trusts; |
• | certain expatriates or former long-term residents of the United States; |
• | persons that actually or constructively own 5% or more of our shares (by vote or value); |
• | persons that acquired our securities pursuant to an exercise of employee options, in connection with employee incentive plans or otherwise as compensation; |
• | persons that hold our securities as part of a straddle, constructive sale, hedging, conversion or other integrated transaction; |
• | persons whose functional currency is not the U.S. dollar; |
• | passive foreign investment companies; or |
• | controlled foreign corporations. |
• | any gain recognized by the U.S. Holder on the sale or other disposition of its ordinary shares or Series C Warrants or Series D Warrants; and |
• | any “excess distribution” made to the U.S. Holder (generally, any distributions to such U.S. Holder during a taxable year of the U.S. Holder that are greater than 125% of the average annual distributions received by such U.S. Holder in respect of the ordinary shares during the three preceding taxable years of such U.S. Holder or, if shorter, such U.S. Holder’s holding period for the ordinary shares). |
• | the U.S. Holder’s gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the ordinary shares or Series C Warrants or Series D Warrants; |
• | the amount allocated to the U.S. Holder’s taxable year in which the U.S. Holder recognized the gain or received the excess distribution or to the period in the U.S. Holder’s holding period before the first day of our first taxable year in which we qualified as a PFIC will be taxed as ordinary income; |
• | the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highest ordinary tax rate in effect for that year and applicable to the U.S. Holder; and |
• | the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such other taxable year of the U.S. Holder. |
• | fails to provide an accurate taxpayer identification number; |
• | is notified by the IRS that backup withholding is required; or |
• | in certain circumstances, fails to comply with applicable certification requirements. |
2022 | 2021 | |||||||
Audit Fees (1) | $ | 110,000 | $ | 140,000 | ||||
Tax Fees (2) | $ | 15,264 | $ | 5,060 | ||||
Other Fees (3) | $ | 4,070 | $ | 2,961 | ||||
Total | $ | 129,339 | $ | 148,021 |
(1) | The audit fees for the years ended December 31, 2022 and 2021 were for professional services rendered for the audits of our financial statements, consents and in connection with certain of our filings with the U.S. Securities and Exchange Commission. |
(2) | Tax fees for the year ended December 31, 2022, are for services rendered by our auditors in connection with a tax audit and tax study. Tax fees for the year ended December 31, 2021 are for services rendered by our auditors in connection with a tax audit. |
(3) | Other fees for the year ended December 31, 2022 and 2021, are for services rendered by our auditors in connection with a benchmark study. |
• | 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. Our Board of Directors elected to 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 the board of directors for election by the shareholders (other than directors elected by the board of directors to fill a vacancy). Our Board of Directors established a Nominating Committee, whose role is to select and recommend to the Board of Directors for selection, director nominees, while considering the appropriate size and composition of the Board of Directors, the requirements of applicable law regarding service as a member of our Board of Directors and the criteria for the selection of new members of the Board of Directors, and determined that our Nominating Committee need not be composed solely of independent directors (within the meaning of Nasdaq Listing Rules). However, our Nominating Committee currently consists solely of independent directors (within the meaning of Nasdaq Listing Rules). |
• | 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”. |
• | Shareholder approval. We will seek shareholder approval for all corporate actions requiring such approval under the requirements of the Israeli Companies Law, rather than seeking approval for corporate actions in accordance with Nasdaq Listing Rule 5635. In particular, under the Nasdaq Listing Rule, shareholder approval is generally required for: (i) an acquisition of shares/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 (or such persons collectively have a 10% or greater interest) in the target company or the assets to be acquired or the consideration to be received and the present or potential issuance of ordinary shares, or securities convertible into or exercisable for ordinary shares, could result in an increase in outstanding common shares or voting power of 5% or more; (ii) the issuance of shares leading to a change of control; (iii) adoption/amendment of a stock option or purchase plan or other equity compensation arrangements, pursuant to which stock may be acquired by officers, directors, employees or consultants (with certain limited exception); 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 (and/or via sales by directors/officers/5% shareholders) if such equity is issued (or sold) at below the greater of the book or market value of shares. We will seek shareholder approval for all actions requiring such under the Israeli Companies Law. Under the Israeli Companies Law, the adoption of, and material changes to, equity-based compensation plans generally require the approval of the board of directors. For details regarding the approvals required under the Israeli Companies Law 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.” For details regarding the approvals required under the Israeli Companies Law for the approval of transactions with and compensation of controlling shareholders, see “Item 6C “Directors, Senior Management and Employees — Board Practices - Approval of Related Party Transactions under Israeli Law — Disclosure of Personal Interests of Controlling Shareholders and Approval of Certain Transactions.” For details regarding the approvals required under the Israeli Companies Law for certain acquisitions of our shares and mergers, see Exhibit 2.1. “Description of Securities — Acquisitions under Israeli Law.” |
• | Quorum requirement. Under our amended and restated articles of association and as permitted under the Israeli 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 the meeting was adjourned for lack of a quorum, at the adjourned meeting, at least two shareholders present in person or by proxy shall constitute a quorum, unless the meeting of shareholders was convened at the demand of shareholders, in which case, the quorum shall be the presence of one or more shareholders holding at least 5% of our issued share capital and at least one percent of the voting power of our shares, or one or more shareholders with at least 5% of the voting power of our shares. |
Exhibit No. | Description |
2.1 |
2.2 |
2.3 |
2.4 |
2.5 |
2.6 |
2.7 |
2.8 |
2.9 |
2.10 |
4.1 |
4.2 |
4.3 |
4.4 |
4.5 |
4.6 |
4.7 |
4.8 |
4.9 |
4.10 |
4.11 |
4.12 |
4.13 |
4.14 |
4.15 |
4.16 |
4.17 |
4.18 |
4.19 |
4.20 |
4.21 |
4.22 |
4.23 |
4.24 |
4.25 |
4.26 |
4.27 |
4.28 |
4.29 |
4.30 |
4.31 |
12.1 |
12.2 |
15.1 |
(1) | Incorporated by reference to the Registration Statement on Form F-1 of the Registrant (File No. 333-201250). |
(2) | Incorporated by reference to Annex B of Exhibit 99.3 to the Form 6-K filed by the Registrant with the Form 6-K filed by the Registrant with the Securities Exchange Commission on July 6, 2015. |
(3) | Incorporated by reference to the Form 6-K filed by the Registrant with the Securities and Exchange Commission on August 12, 2016. |
(4) | Incorporated by reference to the Form 6-K filed by the Registrant with the Securities and Exchange Commission on June 24, 2015. |
(5) | Incorporated by reference to the Registration Statement on Form F-1/A by the Registrant with the Securities and Exchange Commission on April 25, 2018. |
(6) | Incorporated by reference to the Form 6-K filed by the Registrant with the Securities and Exchange Commission on May 4, 2018. |
(7) | Incorporated by reference to the Form 6-K filed by the Registrant with the Securities and Exchange Commission on February 6, 2019. |
(8) | Incorporated by reference to the Annual Report on Form 20-F filed by the Registrant with the SEC on March 6, 2020. |
(9) | Incorporated by reference to the Form 6-K filed by the Registrant with the Securities and Exchange Commission on April 22, 2020. |
(10) | Incorporated by reference to the Form 6-K filed by the Registrant with the Securities and Exchange Commission on May 4, 2020. |
(11) | Incorporated by reference to the Form 6-K filed by the Registrant with the Securities and Exchange Commission on May 12, 2020. |
(12) | Incorporated by reference to the Form 6-K filed by the Registrant with the Securities and Exchange Commission on July 24, 2020. |
(13) | Incorporated by reference to the Registration Statement on Form F-1 by the Registrant with the SEC on May 20, 2020. |
(14) | Incorporated by reference to the Annual Report on Form 20-F filed by the Registrant with the Securities and Exchange Commission on March 15, 2016. |
(15) | Incorporated by reference to the Annex A of Exhibit 99.1 to the Form 6-K filed by the Registrant with the Securities and Exchange Commission on October 11, 2020. |
(16) | Incorporated by reference to the Form 6-K filed by the Registrant with the Securities and Exchange Commission on July 2, 2021. |
(17) | Incorporated by reference to the Form 6-K filed by the Registrant with the Securities and Exchange Commission on March 3, 2022. |
(18) | Incorporated by reference to the Annual Report on Form 20-F filed by the Registrant with the SEC on March 18, 2021. |
(19) | Incorporated by reference to the Annual Report on Form 20-F filed by the Registrant with the SEC on April 6, 2022. |
(20) | Incorporated by reference to the Registration Statement on Form F-1/A by the Registrant with the Securities and Exchange Commission on February 17, 2015. |
(21) | Incorporated by reference to the Form 6-K filed by the Registrant with the Securities and Exchange Commission on November 22, 2017. |
(22) | Incorporated by reference to the Annual Report on Form 20-F filed by the Registrant with the SEC on March 15, 2016. |
Date: March 31, 2023 | CHECK-CAP LTD. By: /s/ Alex Ovadia Name: Alex Ovadia Title: Chief Executive Officer (Principal Executive Officer) By: /s/ Mira Rosenzweig Name: Mira Rosenzweig Title: Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
Page | ||
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 1197) | F-2 | |
F-4 | ||
F-5 | ||
F-6 | ||
F-7- F-8 | ||
F-9 - F-37 |
![image0.jpg](https://capedge.com/proxy/20-F/0001178913-23-001275/image0.jpg)
1. | We read the agreements and analyzed the terms of the Company’s equity transaction. |
2. | We evaluated the interpretation and application of the relevant accounting guidance in relation to the appropriateness of the classification in equity of warrants issued in this transaction. |
3. | We agreed the consideration received from the transaction to the respective bank statement. |
4. | We compared the shares issued and outstanding to the confirmation obtained directly from the transfer agent. |
December 31, | ||||||||||||
Note | 2 0 2 2 | 2 0 2 1 | ||||||||||
Assets | ||||||||||||
Current assets | ||||||||||||
Cash and cash equivalents | $ | 4,090 | $ | 26,457 | ||||||||
Restricted cash | 2(N) | 352 | 350 | |||||||||
Short-term bank deposit | 37,609 | 25,104 | ||||||||||
Prepaid expenses and other current assets | 3 | 579 | 839 | |||||||||
Total current assets | 42,630 | 52,750 | ||||||||||
Non-current assets | ||||||||||||
Property and equipment, net | 4 | 1,751 | 1,793 | |||||||||
Operating leases | 5 | 1,060 | 1,116 | |||||||||
Total non-current assets | 2,811 | 2,909 | ||||||||||
Total assets | $ | 45,441 | $ | 55,659 | ||||||||
Liabilities and shareholders' equity | ||||||||||||
Current liabilities | ||||||||||||
Accounts payable and accruals | ||||||||||||
Trade | $ | 952 | $ | 1,050 | ||||||||
Other | 802 | 680 | ||||||||||
Employees and payroll accruals | 6 | 1,261 | 1,961 | |||||||||
Operating lease liabilities | 5 | 337 | 350 | |||||||||
Other current liabilities | 56 | - | ||||||||||
Total current liabilities | 3,408 | 4,041 | ||||||||||
Non-current liabilities | ||||||||||||
Royalties provision | 8(A) | 94 | 132 | |||||||||
Operating lease liabilities | 5 | 627 | 795 | |||||||||
Total non-current liabilities | 721 | 927 | ||||||||||
Shareholders' equity | 10 | |||||||||||
Share capital, Ordinary shares 48 NIS par value (18,000,000 authorized shares as | ||||||||||||
of December 31, 2022 and 2021; 5,844,463 and 4,840,089 shares issued and | ||||||||||||
outstanding as of December 31, 2022 and 2021, respectively) (1) | 83,664 | 68,787 | ||||||||||
Additional paid-in capital | 84,941 | 90,089 | ||||||||||
Accumulated deficit | (127,293 | ) | (108,185 | ) | ||||||||
Total shareholders' equity | 41,312 | 50,691 | ||||||||||
Total liabilities and shareholders' equity | $ | 45,441 | $ | 55,659 |
Year ended December 31, | ||||||||||||||||
Note | 2 0 2 2 | 2 0 2 1 | 2 0 2 0 | |||||||||||||
Research and development expenses, net | 12 | $ | 14,271 | $ | 12,349 | $ | 10,008 | |||||||||
General and administrative expenses | 13 | 5,763 | 4,972 | 3,924 | ||||||||||||
Operating loss | 20,034 | 17,321 | 13,932 | |||||||||||||
Finance income, net | 14 | 926 | 119 | 86 | ||||||||||||
Net loss | $ | 19,108 | $ | 17,202 | $ | 13,846 | ||||||||||
Comprehensive loss | $ | 19,108 | $ | 17,202 | $ | 13,846 | ||||||||||
Loss per share: | ||||||||||||||||
Net loss per ordinary share - basic and diluted | $ | 3.37 | $ | 4.14 | $ | 9.01 | ||||||||||
Weighted average number of ordinary shares outstanding - basic and diluted | 15 | 5,671,786 | 4,159,870 | 1,537,060 |
Additional | Total | |||||||||||||||||||
paid-in | Accumulated | Shareholders’ | ||||||||||||||||||
Number | Amount | capital | deficit | equity | ||||||||||||||||
Balance as of December 31, 2019 | 433,129 | $ | 5,407 | $ | 77,964 | $ | (77,137 | ) | $ | 6,234 | ||||||||||
Changes during 2020: | ||||||||||||||||||||
Issuance of ordinary shares in private | ||||||||||||||||||||
placement, net of issuance expenses in | ||||||||||||||||||||
an amount of approximately $29 | 136,009 | 1,894 | 2,837 | - | 4,731 | |||||||||||||||
Issuance of ordinary shares and warrants | ||||||||||||||||||||
in the April – May 2020 Financings, net | ||||||||||||||||||||
of issuance expenses in an amount of $1,361 | 958,335 | 13,039 | (2,900 | ) | - | 10,139 | ||||||||||||||
Issuance of ordinary shares and | ||||||||||||||||||||
warrants in the Warrant Exercise Transaction, | ||||||||||||||||||||
net of issuance expenses in an amount of $920 | 802,712 | 11,290 | (2,578 | ) | - | 8,712 | ||||||||||||||
RSU vesting | 1,258 | 16 | (16 | ) | - | - | ||||||||||||||
Share-based compensation | - | - | 408 | 408 | ||||||||||||||||
Net loss | - | - | - | (13,846 | ) | (13,846 | ) | |||||||||||||
Balance as of December 31, 2020 | 2,331,443 | $ | 31,646 | $ | 75,715 | $ | (90,983 | ) | $ | 16,378 | ||||||||||
Changes during 2021: | ||||||||||||||||||||
Exercise of warrants, net of issuance expenses in an amount of $22 | 1,210,235 | 18,099 | 1,120 | - | 19,219 | |||||||||||||||
Issuance of ordinary shares and warrants in the June 2021 Registered Direct Offering, net of issuance expenses in an amount of $3,199 | 1,296,297 | 19,011 | 12,790 | - | 31,801 | |||||||||||||||
Option exercise | 350 | 5 | (1 | ) | - | 4 | ||||||||||||||
RSU vesting | 1,764 | 26 | (26 | ) | - | - | ||||||||||||||
Share-based compensation | - | - | 491 | - | 491 | |||||||||||||||
Net loss | - | - | - | (17,202 | ) | (17,202 | ) | |||||||||||||
Balance as of December 31, 2021 | 4,840,089 | $ | 68,787 | $ | 90,089 | $ | (108,185 | ) | $ | 50,691 | ||||||||||
Changes during 2022: | ||||||||||||||||||||
Issuance of ordinary shares and warrants in the March 2022 Registered Direct Offering, net of issuance expenses in an amount of $1,150 | 1,000,000 | 14,815 | (5,965 | ) | - | 8,850 | ||||||||||||||
RSU vesting | 4,374 | 62 | (62 | ) | - | |||||||||||||||
Share-based compensation | - | 879 | - | 879 | ||||||||||||||||
Net loss | - | (19,108 | ) | (19,108 | ) | |||||||||||||||
Balance as of December 31, 2022 | 5,844,463 | 83,664 | 84,941 | (127,293 | ) | 41,312 |
2 0 2 2 | 2 0 2 1 | 2 0 2 0 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||
Net loss | $ | (19,108 | ) | $ | (17,202 | ) | $ | (13,846 | ) | |||
Adjustments required to reconcile net loss to net cash used in operating activities: | ||||||||||||
Depreciation and amortization | 404 | 205 | 148 | |||||||||
Share-based compensation | 879 | 491 | 408 | |||||||||
Financial expense (income), net | (624 | ) | - | 7 | ||||||||
Changes in assets and liabilities items: | ||||||||||||
Decrease (increase) in prepaid and other current assets and non-current assets | 273 | (549 | ) | 106 | ||||||||
Increase (decrease) in trade accounts payable, accruals and other current liabilities | 207 | 362 | (317 | ) | ||||||||
Increase (decrease) in employees and payroll accruals | (700 | ) | 451 | 409 | ||||||||
Decrease in royalties provision | (38 | ) | (22 | ) | (28 | ) | ||||||
Net cash used in operating activities | $ | (18,707 | ) | $ | (16,264 | ) | $ | (13,113 | ) | |||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||
Purchase of property and equipment | (486 | ) | (1,006 | ) | (379 | ) | ||||||
Investment in short-term bank and other deposits | (12,022 | ) | (15,000 | ) | (10,072 | ) | ||||||
Net cash used in investing activities | $ | (12,508 | ) | $ | (16,006 | ) | $ | (10,451 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||
Exercise of warrants into ordinary shares, net of issuance expenses | - | 19,219 | - | |||||||||
Issuance of ordinary shares in the registered direct offerings, net of issuance expenses | 8,850 | 31,801 | 10,139 | |||||||||
Options exercise | - | 4 | - | |||||||||
Issuance of ordinary shares and warrants in the Warrant Exercise Transaction, net of issuance expenses | - | - | 8,712 | |||||||||
Issuance of ordinary shares in the private placement, net of issuance expenses | - | - | 4,731 | |||||||||
Net cash provided by financing activities | $ | 8,850 | $ | 51,024 | $ | 23,582 | ||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | (22,365 | ) | 18,754 | 18 | ||||||||
Cash, cash equivalents and restricted cash at the beginning of the year | 26,807 | 8,053 | 8,035 | |||||||||
Cash, cash equivalents and restricted cash at the end of the year | $ | 4,442 | $ | 26,807 | $ | 8,053 | ||||||
Supplemental information for Cash Flow: | ||||||||||||
2 0 2 2 | 2 0 2 1 | 2 0 2 0 | ||||||||||
Supplemental disclosure of non-cash flow information | ||||||||||||
Purchase of property and equipment | 35 | 161 | 45 | |||||||||
Lease liabilities arising from obtaining right-of-use assets | 307 | 1,048 | 151 | |||||||||
Supplemental disclosure of cash flow information | ||||||||||||
Cash paid for taxes | 5 | 33 | 5 | |||||||||
Interest received | 548 | 62 | 54 |
2 0 2 2 | 2 0 2 1 | 2 0 2 0 | ||||||||||
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO THE CONSOLIDATED BALANCE SHEET | ||||||||||||
Cash and Cash equivalents | $ | 4,090 | $ | 26,457 | $ | 7,703 | ||||||
Restricted cash included current assets | 352 | 350 | 350 | |||||||||
Total cash, cash equivalents, and restricted cash | $ | 4,442 | $ | 26,807 | $ | 8,053 |
A. | General |
(1) | Check Cap Ltd. (the “Company") was incorporated under the laws of the State of Israel. The registered address of its offices is 29 Abba Hushi Avenue, Isfiya 3009000, Israel. |
(2) | The Company has a wholly-owned subsidiary, Check-Cap US, Inc., that was incorporated under the laws of the State of Delaware on May 15, 2015. |
(3) | The Company is a clinical-stage medical diagnostics company aiming to redefine colorectal cancer (CRC) screening and prevention through the introduction of C-Scan®, the first and only patient-friendly preparation-free screening test to detect polyps before they may transform into cancer. The Company’s disruptive capsule-based screening technology aims to significantly increase screening adherence worldwide and help millions of people to stay healthy through preventive CRC screening. C-Scan uses an ultra-low dose X-ray capsule, an integrated positioning, control and recording system, as well as proprietary software to generate a 3D map of the inner lining of the colon. C-Scan is non-invasive and requires no preparation or sedation, allowing the patients to continue their daily routine with no interruption as the capsule is propelled through the gastrointestinal tract by natural motility. |
(4) | Since its inception, the Company has devoted substantially all of its efforts to research and development, clinical trials, recruiting management and technical staff, acquiring assets and raising capital. The Company is still in its development and clinical stage and has not yet generated revenues. The Company has incurred losses of $19,108 and $17,202 for the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022, the Company's accumulated deficit was approximately $127,293. The extent of the Company's future operating losses and the timing of becoming profitable are uncertain. |
A. | General (cont.) |
(5) | As described in Notes 10B(2)(b) and 10B(2)(d), on February 24, 2015, the Company consummated an Initial Public Offering in the United States (U.S.) (the "IPO") concurrently with a private placement. |
A. | General (cont.) |
(6) | On December 23, 2021, the Company announced that it received a letter from the Staff, indicating that the Company is not in compliance with the minimum bid price requirement for continued listing set forth in Nasdaq Listing Rule 5550(a)(2), which requires listed companies to maintain a minimum bid price of $1.00 per share. The Company was provided by Nasdaq with a compliance period of 180 calendar days (i.e., until June 21, 2022) to regain compliance pursuant to Nasdaq Listing Rules. On June 22, 2022, the Company received a letter from the Staff notifying it that Nasdaq granted the Company a 180-day extension, or until December 19, 2022, or the Extension Period, to regain compliance with the Minimum Bid Price Requirement. In order to regain compliance, on August 11, 2022, the Company’s shareholders approved a reverse share split (“Reverse Share Split”) of its ordinary shares within a range of 1 for 10 to 1 for 20, the exact ratio to be determined by further action of the Company’s Board of Directors, to be effective on a date to be determined by the Company’s Board of Directors and announced by the Company, and to amend the Company’s Articles of Association accordingly. The Board of Directors subsequently approved a reverse share split of the Company’s ordinary shares at the ratio of 1-for-20, such that each twenty (20) ordinary shares, par value NIS 2.40 per share, consolidated into one (1) ordinary share, par value NIS 48.00, effective as of November 23, 2022. The first date when the Company’s ordinary shares began trading on the Nasdaq Capital Market after implementation of the Reverse Share Split was November 25, 2022. Following the implementation of the Reverse Share Split, the Company’s authorized share capital comprised of 18,000,000 ordinary shares. No fractional ordinary shares were issued as a result of the Reverse Share Split. All fractional ordinary shares were rounded up to the nearest whole ordinary share. In addition, a proportionate adjustment made to the per share exercise price and the number of shares issuable upon the exercise of all outstanding options and warrants entitling the holders to purchase ordinary shares. Furthermore, following completion of the Reverse Share Split, the number of ordinary shares issuable pursuant to the Company’s 2006 Unit Option Plan and 2015 Equity Incentive Plan and 2015 US Sub-Plan to the 2015 Equity Incentive Plan, as well as the number of shares and exercise prices subject to outstanding options under the plans and the number of shares subject to outstanding restricted stock units (“RSUs”) under the plans were appropriately adjusted. The Company subsequently received a letter informing it that, for the 10 consecutive business days from November 25, 2022 to December 8, 2022, the closing bid price of the Company’s ordinary shares had been at $1.00 per share or greater and that accordingly, the Company has regained compliance with Nasdaq Listing Rule 5550(a)(2) and Nasdaq considers the prior bid price deficiency matter now closed. |
(7) | In early 2020, the World Health Organization declared the rapidly spreading coronavirus disease (COVID-19) outbreak a pandemic. The Company experienced temporary disruptions to its operations as a result of the COVID-19 pandemic including disruptions to the Company’s clinical studies For example, during a period of few months during the year ending December 31, 2022, there was a global shortage in iodine due to COVID-19, which is critical patient intake used in the C-Scan procedure. As a result, the Company faced delays in its clinical trials. The extent to which the COVID-19 pandemic shall impact the Company’s operations in the future will depend on future developments, which are highly uncertain and cannot be predicted with confidence. In particular, any future spread of COVID-19 globally or the reinstatement of restrictions or other actions that may be required to contain COVID-19 or treat its impact could materially adversely impact the Company’s operations and workforce, including its research and clinical trials and its ability to continue raise capital, could affect the operations of key governmental agencies, such as the U.S. Food and Drug Administration (“FDA”), which may delay the Company’s development plans, and could result in the inability of the Company’s suppliers to deliver components or raw materials on a timely basis or at all, each of which in turn could have a material adverse impact on the Company’s business, financial condition and results of operation. |
A. | Use of estimates in preparation of financial statements |
B. | Principles of consolidation |
C. | Financial statements in U.S. dollars |
D. | Cash and cash equivalents |
E. | Short-term bank deposit |
F. | Cash flow hedges |
F. | Cash flow hedges (cont.) |
G. | Property and equipment |
Length of useful life | Depreciation rate | |||||||
Years | % | |||||||
Office furniture and equipment | 10-14 | 7-10 | ||||||
Laboratory equipment | 3-7 | 15-33 | ||||||
Computers and auxiliary equipment | 3 | 33 |
H. | Impairment of long-lived assets |
I. | Research and development costs |
J. | Contingent liabilities |
K. | Share-based compensation |
L. | Income taxes |
M. | Fair value of financial instruments |
• | Level 1. Observable inputs based on unadjusted quoted prices in active markets for identical assets or liabilities; |
• | Level 2. Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and |
• | Level 3. Unobservable inputs for which there is little or no market data requiring the Company to develop its own assumptions. |
N. | Restricted Cash |
O. | Leases |
P. | Recent accounting pronouncements |
Q. | Reclassification |
December 31, | ||||||||
2 0 2 2 | 2 0 2 1 | |||||||
Government institutions | 88 | 206 | ||||||
Prepaid expenses | 260 | 470 | ||||||
Deposits | 8 | 13 | ||||||
Other assets | 223 | 150 | ||||||
579 | 839 |
NOTE 4 - PROPERTY AND EQUIPMENT, NET
December 31, | ||||||||
2 0 2 2 | 2 0 2 1 | |||||||
Cost: | ||||||||
Office furniture and equipment | 799 | 723 | ||||||
Laboratory equipment | 1,915 | 1,721 | ||||||
Computers and auxiliary equipment | 574 | 540 | ||||||
3,288 | 2,984 | |||||||
Accumulated depreciation | 1,537 | 1,191 | ||||||
Property and equipment, net | 1,751 | 1,793 |
(1) | On January 1, 2019, the Company adopted ASU 2016-02, using the modified retrospective approach for all lease arrangements at the beginning period of adoption. |
(2) | On January 26, 2021, the Company entered into a new lease agreement, as amended (the “Amended Lease Agreement”), according to which, effective as of April 1, 2021, the Company leases a total of approximately 1,550 square meters at its facility located in Isfiya, Israel. The Amended Lease Agreement expires on December 31, 2023, and the Company has an option to extend the lease period for an additional three years. The Company has the right to terminate the Amended Lease Agreement at any time, upon at least 60 days prior written notice. Monthly rental expenses under the lease agreement are $16.1. Prior to entering into the Amended Lease Agreement, the Company leased approximately 900 square meters at the same facility under a lease agreement, originally scheduled to expire on May 31, 2022. According to ASC 842, the Amended Lease Agreement was accounted for as a lease modification and, therefore, the lease liability was remeasured as of the modification date with an adjustment recorded to the underlying right of use asset. |
(3) | On December 30, 2021, the Company entered into a Sub-lease Agreement (the “Sub-lease Agreement”), with a Company supplier (the “Lessor”) according to which, the Company leases approximately 70 square meters laboratory space for the production of certain components, at the supplier’s premises in Petach Tikva, Israel. The Sub-lease Agreement entered into effect on September 21, 2022, after receipt of certain permits including a business license from Petach Tikva municipality. The Sub-lease Agreement expires on January 31, 2025, and the Company has an option to extend the lease period for an additional two years. The Company has the right to terminate the Sub-lease Agreement at any time, upon at least 90 days prior written notice. |
(4) | On March 1, 2022, the Company entered into a lease agreement of certain offices in Petach Tikva Israel, according to which, the Company leases approximately 140 square meters offices, The lease agreement expires on February 28, 2024, and the Company has an option to extend the lease period for two additional periods of one year each. Total monthly rental expense under the lease agreement is approximately $1.7. The lease agreement is recorded under ASC 842. |
(5) | In addition, the Company leases vehicles under various operating lease agreements. |
Year | ||||
Ended | ||||
December | ||||
31, 2022 | ||||
Cash payments for operating leases | $ | 389 |
Operating | ||||
Leases | ||||
2023 | $ | 352 | ||
2024 | 282 | |||
2025 and after | 410 | |||
Total future lease payments | 1,044 | |||
Less imputed interest | (80 | ) | ||
Total lease liability balance | $ | 964 |
A. | Composition: |
December 31, | ||||||||
2 0 2 2 | 2 0 2 1 | |||||||
Short-term employee benefits: | ||||||||
Benefits for vacation and recreation pay | 529 | 573 | ||||||
Liability for payroll, bonuses and wages | 732 | 1,388 | ||||||
1,261 | 1,961 |
B. | Post-employment benefits |
C. | Short-term employee benefits |
(1) | Paid vacation days |
(2) | Related parties |
A. | The Company |
1. | Corporate tax rates in Israel |
2. | The Law for the Encouragement of Capital Investments, 1959 (the "Investments Law") |
a) | Reduced tax rates |
b) | Conditions for entitlement to the benefits |
c) | Amendment of the Law for the Encouragement of Capital Investments, 1959 |
2. | The Law for the Encouragement of Capital Investments, 1959 (the "Investments Law") (Cont.) |
c) | Amendment of the Law for the Encouragement of Capital Investments, 1959 (Cont.) |
B. | Check-Cap US, Inc. |
C. | Deferred income taxes |
December 31, | ||||||||
2 0 2 2 | 2 0 2 1 | |||||||
Carry-forward tax losses | 24,232 | 24,677 | ||||||
Less valuation allowance | (24,232 | ) | (24,677 | ) | ||||
- | - |
D. | Reconciliation of the theoretical tax expense to actual tax expense |
A. | Royalties provision |
1. | Royalties to an ASIC designer |
2. | Reimbursement liability to Predecessor Entity's unit holders |
December 31, | ||||||||
2 0 2 2 | 2 0 2 1 | |||||||
Royalties to an ASIC designer | 94 | 132 | ||||||
94 | 132 |
B. | Commitments |
(1) | Royalties |
(2) | Rental agreements |
1. | On January 26, 2021, the Company entered into the Amended Lease Agreement according to which, effective as of April 1, 2021, it leases approximately 1,550 square meters at the facility located in Isfiya, Israel. The Amended Lease Agreement expires on December 31, 2023, and the Company has an option to extend the lease period for an additional three years. The Company has the right to terminate the agreement at any time, upon at least 60 days prior written notice. |
2. | On December 30, 2021, the Company entered into a Sub-lease Agreement (the “Sub-lease Agreement”), with a Company supplier (the “Lessor”) according to which, the Company leases approximately 70 square meters laboratory space for the production of certain components in Petach Tikva, Israel. The Sub-lease Agreement entered into effect on September 21, 2022, after receipt of certain permits including a business license from Petach Tikva municipality. The Sub-lease Agreement expires on January 31, 2025, and the Company has an option to extend the lease period for an additional two years. The Company has the right to terminate the agreement at any time, upon at least 90 days prior written notice. The Lessor has the right to terminate the Sub-lease Agreement, upon at least 12 months prior written notice. The Sub Lease Agreement is part of an amended agreement with the supplier for certain additional services. Total monthly rental expenses under the Sub-lease Agreement and the payment for other services is $26.9. |
B. | Commitments (Cont.) |
3. | On March 1, 2022, the Company entered into a lease agreement of certain offices in Petach Tikva Israel, according to which, the Company leases approximately 140 square meters offices, The lease agreement expires on February 28, 2024, and the Company has an option to extend the lease period for two additional periods of one year each. Total monthly rental expense under the lease agreement is approximately $1.7. . |
4. | Vehicle lease and maintenance agreements |
(4) | The Company issued purchase orders to certain suppliers in order to secure strategic inventory of key components that as of December 31, 2022 have not yet been supplied. |
C. | Legal |
December 31, 2022 | ||||||||||||
Fair value measurements using input type | ||||||||||||
Level 1 | Level 2 | Total | ||||||||||
Cash and cash equivalents: | ||||||||||||
Money market funds | $ | 2.5 | $ | 2.5 | ||||||||
Other current liabilities: | ||||||||||||
Foreign currency derivative instruments | - | $ | (56 | ) | $ | (56 | ) | |||||
Total financial assets (liabilities) | $ | 2.5 | $ | (56 | ) | $ | (53.5 | ) |
December 31, 2021 | ||||||||||||
Fair value measurements using input type | ||||||||||||
Level 1 | Level 2 | Total | ||||||||||
Cash and cash equivalents: | ||||||||||||
Money market funds | $ | 2,160 | $ | 2,160 | ||||||||
Other current assets: | ||||||||||||
Foreign currency derivative instruments | $ | 65 | $ | 65 | ||||||||
Total financial assets | $ | 2,160 | $ | 65 | $ | 2,225 |
A. | Effective November 23, 2022, the Company's Board of Directors effected a Reverse Share Split of 1-for-20 (i.e., 20 ordinary shares were combined into one ordinary share). Share and per share amounts in the financial statements, prior to November 23, 2022, have been adjusted to reflect the Reverse Share Split. |
B. | Ordinary shares |
1. | The ordinary shares provide their holder with rights to receive dividends in cash and shares, and rights to participate at the time of distributing liquidation dividends. Additionally, the ordinary shareholders have the right to vote at shareholder meetings in a manner that each share provides one voting right to its holder. | |
2. | Changes in ordinary share capital |
a) | On May 11, 2010, the Company issued, free of charge, to all of its shareholders (except for certain ordinary shareholders), warrants to purchase an aggregate of 1,609 ordinary shares (hereafter- "Anti-dilution Warrants"). The Anti-dilution Warrants were issued in order to prevent the dilution of the holdings of such Company shareholders due to certain options granted to the then Company's CEO ("CEO options"). The Anti-dilution Warrants were subject to automatic exercise, without consideration (unless the holder thereof objected to such exercise), upon the exercise by the Company's CEO of the CEO Options. The fair value of the Anti-dilution Warrants on the grant date was immaterial. Anti-dilution warrants to purchase 37 and 387 ordinary shares were exercised during the years ended December 31, 2019 and 2018, respectively. The remaining Anti-dilution Warrants to purchase 326 ordinary shares expired on May 11, 2020. |
b) | On February 24, 2015, the Company consummated an IPO in the U.S. of 8,334 units at a public offering price of $1,440 per unit, before underwriting discounts and offering expenses. Each unit consisted of one ordinary share and one-half of a Series A Warrant to purchase one ordinary share. Each unit was issued with one and one-half non-transferrable Long Term Incentive Warrants. Each whole Series A Warrant entitled the holder to purchase one ordinary share at an exercise price of $1,800. Upon vesting, each Long Term Incentive Warrant entitles the holder to purchase one ordinary share at an exercise price of $1,656. The Series A Warrants expired on February 24, 2020. |
c) | Immediately prior to the consummation of the IPO, certain members of the Company's management exercised options to purchase 1,282 ordinary shares granted to them under the 2006 Unit Option Plan. | |
B. | Ordinary shares (Cont.) |
2. | Changes in ordinary share capital (Cont.) |
d) | On August 20, 2014, the Company entered into a certain credit line agreement, pursuant to which it obtained a credit line in an aggregate principal amount of $12,000 from certain lenders and existing shareholders (the "Lenders"). The credit line amount was deposited in an escrow account at the closing, which was consummated on October 14, 2014. The Company issued to each Lender at closing a warrant (collectively, the "Credit Line Warrants"), to purchase a number of the Company's ordinary shares constituting 2% of its share capital on a fully diluted basis (assuming conversion of all of the Company's convertible securities into ordinary shares at a 1:1 conversion rate) as of the closing for each $1,000 (or portion thereof) extended by such Lender. The Company issued Credit Line Warrants ("CLA Warrants") to purchase in the aggregate 11,078 of its ordinary shares. The CLA Warrants are exercisable for a period of ten years at an exercise price of NIS 48 per share, and may be exercised on a net issuance basis. |
e) | No CLA Warrants were exercised during the years ended December 31, 2022, 2021 and 2020. As of December 31, 2022, CLA Warrants to purchase 370 ordinary shares were outstanding. |
f) | On October 14, 2014, the Company issued warrants to purchase an aggregate 924 ordinary shares (the “Pontifax Warrants”) to the Pontifax Funds in consideration of their commitment to provide to the Company, for no consideration, certain business development and chairman services. As of December 31, 2021, Pontifax Warrants to purchase 462 ordinary shares, with an exercise price of $1,214.4 per share, were outstanding. These warrants expired on October 14, 2022. |
g) | Upon the closing of the IPO, the Company issued warrants to purchase 417 ordinary shares at an exercise price of $1,800 to the IPO lead underwriter and warrants to purchase 63 ordinary shares at an exercise price of $1,214.4 to the Company's U.S. legal counsel. These warrants expired on February 24, 2020. |
h) | On August 11, 2016, the Company consummated a registered direct offering of 2,682 ordinary shares at a price of $456 per share and pre-funded warrants to purchase 10,477 ordinary shares at a purchase price of $444 per pre-funded warrant. The pre-funded warrants have an exercise price of $12 per share, subject to certain adjustments and will expire on August 11, 2023, unless otherwise extended in accordance with the terms of the pre-funded warrants. The Company received gross proceeds from the August registered direct offering of approximately $5,900 (including proceeds from the exercise of 2,396 pre-funded warrants at the closing of the offering). On January 23, 2017, the remaining pre-funded warrants to purchase 1,209 ordinary shares were exercised, for additional proceeds of approximately $14.5. |
B. | Ordinary shares (Cont.) |
2. | Changes in ordinary share capital (Cont.) |
i) | On June 2, 2017, the Company consummated a registered direct offering of 5,623 ordinary shares at a price of $480 per share and a simultaneous private placement of one-year warrants to purchase 5,623 ordinary shares at an exercise price of $510 per share immediately exercisable. The Company received gross proceeds from this registered direct offering of approximately $2,690. On June 2, 2018, all of the warrants issued to investors in this offering expired. As of December 31, 2021, warrants to purchase 282 ordinary shares issued to the placement agent in connection with the offering were outstanding. These placement agent warrants expired on June 2, 2022. |
j) | On November 22, 2017, the Company consummated a registered direct offering of 9,470 ordinary shares at a price of $264 per share and a simultaneous private placement of five-year warrants to purchase 7,103 ordinary shares at an exercise price of $300 per share immediately exercisable. The Company received gross proceeds from this registered direct offering of approximately $2,500. On April 25, 2018, 2,841 of these warrants were cashless exercised into 679 ordinary shares. On July 27, 2020, as part of the Warrants Exercise Transaction (see Note 10B(2)(n)), all of the 4,262 warrants that were outstanding as of that date were exercised into ordinary shares. As of December 31, 2021, warrants to purchase 474 ordinary shares issued to the placement agent in connection with the offering were outstanding. These placement agent warrants expired on November 22, 2022. |
k) | On May 8, 2018, the Company consummated an underwritten public offering (the “2018 Public Offering”) of 136,924 units (the “2018 Units”), at a public offering price of $110 per unit, and 22,546 pre-funded units (the “2018 Pre-funded Units”), at a public offering price of $109.8 per 2018 Pre-funded Unit. Each 2018 Unit consisted of one ordinary share of the Company and one Series C warrant to purchase one ordinary share of the Company. Each 2018 Pre-funded Unit consisted of one pre-funded warrant to purchase one ordinary share and one Series C Warrant to purchase one ordinary share. The exercise price of each pre-funded warrant included in the 2018 Pre-funded Unit was $0.2 per share. The Series C warrants have an exercise price of $110 per share, are exercisable immediately and will expire five years from the date of issuance. |
l) | On February 6, 2019, the Company issued 94,075 units, (the “2019 Units”) at a purchase price of $51.6 per unit, and 1,024,876 pre-funded units (the “2019 Pre-funded Units”), at a purchase price of $51.4 per 2019 Pre-Funded Unit, in a registered direct offering (the “2019 Registered Direct Offering”). Each unit consisted of one ordinary share of the Company and one Series D Warrant to purchase 0.5 ordinary share of the Company. Each 2019 Pre-Funded Unit consisted of one pre-funded warrant to purchase one ordinary share and one Series D Warrant to purchase 0.5 ordinary share. The exercise price of each pre-funded warrant included in the 2019 Pre-Funded Unit was $0.2 per share. The Series D Warrants have an exercise price of $51.6 per ordinary share and are immediately exercisable and will expire on the fifth anniversary of the original issuance date. The Company also issued placement agent warrants to purchase up to an aggregate of 10,173 ordinary shares, on the same terms as the warrants issued to the investors, except they have an exercise price of $64.5 per share. The Company received gross proceeds from the February 2019 Registered Direct Offering of approximately $7,500 (including proceeds from the exercise of 51,244 pre-funded warrants), or approximately $6,500, net of issuance expenses in the amount of $987. On July 27, 2020, as part of the Warrants Exercise Transaction (see Note 10B(2)(n)), warrants to purchase 48,450 ordinary shares were exercised for ordinary shares and warrants. As of December 31, 2022, warrants to purchase 24,210 ordinary shares held by certain investors and warrants to purchase 10,173 ordinary shares held by the placement agent were outstanding. |
B. | Ordinary shares (Cont.) |
2. | Changes in ordinary share capital (Cont.) |
m) | On December 19, 2019, the Company entered into definitive agreements with certain investors to sell an aggregate of 136,009 ordinary shares at a purchase price of $35 per share in a private placement, resulting in gross proceeds of approximately $4,760. The closing of the transaction occurred in February 2020. | |
n) | April – May 2020 registered direct offerings |
o) | On July 23, 2020, the Company entered into a warrant exercise agreement, (the “Warrants Exercise Transaction”), with several existing institutional investors who are the holders (the “Holders”) of warrants issued in May 2020, April 2020, February 2019 and November 2017 (the “Old Warrants”), to purchase ordinary shares, pursuant to which the Holders agreed to exercise in cash their Old Warrants to purchase up to an aggregate of 802,712 ordinary shares having exercise prices ranging from $300.00 to $16 per share issued by the Company, at a reduced exercise price of $12 per share, resulting in gross proceeds to the Company of approximately $9,632 or approximately $8,712, net of issuance expenses in the amount of approximately $920. Closing occurred on July 27, 2020. Under the Warrants Exercise Transaction agreement, the Company also issued to the Holders new unregistered warrants to purchase up to 963,254 ordinary shares, (the “Private Placement Warrants”). The Private Placement Warrants are immediately exercisable, expire five and one-half years from issuance date and have an exercise price of $16 per share, subject to certain adjustment. The Private Placement Warrants may be exercised on a cashless basis if at the time of exercise thereof, there is no effective registration statement registering the ordinary shares underlying the warrants. The terms of the warrants did not include features that would preclude equity classification. In addition, the Company issued unregistered placement agent warrants to purchase up to an aggregate of 56,190 ordinary shares on the same terms as the warrants issued to the Holders, except that they have an exercise price of $15 per share. During the first quarter of 2021, an aggregate of 878,628 warrants held by certain investors and 56,190 warrants held by the placement agent, were exercised into ordinary shares. As of December 31, 2022 and 2021, warrants to purchase 84,626 ordinary shares held by certain investors, were outstanding. |
B. | Ordinary shares (Cont.) |
2. | Changes in ordinary share capital (Cont.) |
p) | During the first quarter of 2021, as a result of an exercise of warrants by the investors from the Warrants Exercise Transaction and the April-May 2020 Offerings, the Company issued an aggregate of 1,210,235 ordinary shares, at exercise prices ranging from $15-$16 per share, for total gross proceeds of approximately $19,240 to the Company. |
q) | On June 30, 2021, the Company entered into a definitive agreement with several institutional and accredited investors for the purchase and sale of 1,296,297 of the Company's ordinary shares and accompanying short-term warrants to purchase up to an aggregate of 1,296,297 of the Company's ordinary shares in a registered direct offering (the “June 2021 Registered Direct Offering”). The June 2021 Registered Direct Offering was consummated on July 2, 2021. The warrants are immediately exercisable at an exercise price of $30 per ordinary share, subject to certain adjustments, and will expire three and one-half years from the issuance date. The warrants may be exercised on a cashless basis if at the time of exercise thereof, there is no effective registration statement registering the ordinary shares underlying the warrants. The terms of the warrants did not include features that would preclude equity classification. The Company also issued registered placement agent warrants to purchase up to an aggregate of 64,815 ordinary shares, substantially on the same terms as the warrants issued to the investors in the private placement, except they have an exercise price of $33.75 per share. Upon any exercise of the warrants for cash, the Company agreed to pay the placement agent warrants to purchase up to 5.0% of the number of ordinary shares issued upon the cash exercise of the warrants (up to 64,815 warrants). As of December 31, 2022 and 2021, warrants to purchase 1,296,297 ordinary shares held by certain investors and 64,815 warrants held by the placement agent, were outstanding. The Company received gross proceeds from the June 2021 Registered Direct Offering of approximately $35,000, or approximately $31,801, net of issuance expenses in the amount of $3,199. (See Note 17(2) regarding change of exercise price and term of exercise of date of 926,297 warrants). |
r) | On March 1, 2022, the Company entered into a definitive agreement with several institutional and accredited investors for the purchase and sale of 1,000,000 of the Company's ordinary shares and accompanying warrants to purchase up to an aggregate of 750,000 of the Company's ordinary shares in a registered direct offering (the “March 2022 Registered Direct Offering”). The March 2022 Registered Direct Offering was consummated on March 3, 2022. The warrants are immediately exercisable at an exercise price of $13 per share, subject to certain adjustments, and will expire five years from the issuance date. The warrants may be exercised on a cashless basis if at the time of exercise thereof, there is no effective registration statement registering the ordinary shares underlying the warrants. The terms of the warrants did not include features that would preclude equity classification. The Company also issued registered placement agent warrants to purchase up to an aggregate of 50,000 ordinary shares, substantially on the same terms as the warrants issued to the investors in the private placement, except they have an exercise price of $12.5 per share and expiration date is March 1, 2027. Upon any exercise of the warrants for cash, the Company agreed to pay the placement agent warrants to purchase up to 5.0% of the number of ordinary shares issued upon the cash exercise of the warrants (up to 37,500 warrants). Simultaneously with this offering, the Company has entered into a warrant amendment agreement, or the Warrant Amendment Agreement, with the investors in this March 2022 Registered Direct Offering. Pursuant to the Warrant Amendment Agreement, certain warrants to purchase up to an aggregate of 926,297 ordinary shares of the Company that were issued to the investors in July 2021 were amended to have a reduced exercise price of $13 per share and the term of exercise was extended to January 2, 2025. The Company received gross proceeds from the March 2022 Registered Direct Offering of $10,000, or approximately $8,850, net of issuance expenses in the amount of approximately $1,150. |
A. | General |
1. | In connection with the transfer of all of the business operations and substantially all of the assets of Check-Cap LLC to the Company in 2009, the Company assumed the Check-Cap LLC 2006 Unit Option Plan (the "2006 Plan"). According to the 2006 Plan, the Company is authorized to grant options to purchase ordinary shares of the Company to employees, directors and consultants of the Company. The options granted according to the 2006 Plan are generally exercisable for 10 years from the grant date unless otherwise determined by the Company's Board of Directors, vest over a period to be determined by the Company's Board of Directors, and have an exercise price to be determined by the Company's Board of Directors. |
2. | On August 13, 2015, the shareholders approved and adopted the Check-Cap Ltd. 2015 Equity Incentive Plan (the "2015 Israeli Plan") and the Check-Cap Ltd. 2015 United States Sub-Plan to Check-Cap Ltd. 2015 Equity Incentive Plan (the "2015 U.S. Sub-Plan" and together with the 2015 Israeli Plan, the "2015 Plan"). As of such date, the Company ceased to grant options under the 2006 Plan. All of the remaining shares authorized but unissued under the 2006 Plan were rolled over to the 2015 Plan. |
3. | On August 5, 2020, the Company's Board of Directors resolved to increase the number of ordinary shares of the Company reserved for issuance under the 2015 Plan by an additional 17,500 shares to 77,780 shares. |
4. | On August 5, 2021, the Company's Board of Directors resolved to increase the number of ordinary shares of the Company reserved for issuance under the 2015 Plan by an additional 125,000. |
5. | On January 27, 2022, the Company's Board of Directors resolved to increase the number of ordinary shares of the Company reserved for issuance under the 2015 Plan by an additional 25,000. |
6. | As of December 31, 2022, no shares were available for future awards under the 2015 Plan. |
7. | On January 4, 2023, the Company's Board of Directors resolved to increase the number of ordinary shares of the Company reserved for issuance under the 2015 Plan by an additional 30,000. |
B. | Details of share-based grants made by the Company |
The following tables presents the grant dates, number of underlying shares and related exercise prices of awards granted to employees and non-employees during the years 2022, 2021 and 2020 as well as the estimated fair value of the underlying ordinary shares on the grant date:
NOTE 11 - SHARE-BASED COMPENSATION (Cont.)
B. | Details of share-based grants made by the Company (Cont.)
|
Share based | |||||||||||||||||||||
Fair value | expenses (1) | ||||||||||||||||||||
Grant date | No. of options | Expiration date | Exercise price | on grant date | $in thousands | Vesting terms | |||||||||||||||
March 5, 2020 | 399 | March 5, 2030 | $ | 36.4 | $ | 23.44 | $ | 9 | (2 | ) | |||||||||||
May 27, 2020 | 133 | May 27, 2030 | $ | 11.8 | $ | 8.47 | $ | 1 | (2 | ) | |||||||||||
August 5, 2020 | 18,014 | August 5, 2030 | $ | 12 | $ | 9.73 | $ | 175 | (4 | ) | |||||||||||
November 17, 2020 | 1,036 | November 17, 2030 | $ | 6.4 | $ | 4.22 | $ | 4 | (4 | ) | |||||||||||
December 10, 2020 (3) | 11,250 | December 10, 2030 | $ | 6.4 | $ | 5.5 | $ | 62 | (4 | ) | |||||||||||
March 17, 2021 | 1,274 | March 17, 2031 | $ | 45.4 | $ | 42.8 | $ | 54 | (4 | ) | |||||||||||
May 11, 2021 | 903 | May 11, 2031 | $ | 11.8 | $ | 26.07 | $ | 23 | (4 | ) | |||||||||||
August 4, 2021 (5) | 36,701 | August 4, 2031 | $ | 24.6 | $ | 18.47 | $ | 678 | (4 | ) | |||||||||||
September 13, 2021 | 750 | September 13, 2031 | $ | 21 | $ | 16.92 | $ | 13 | (8 | ) | |||||||||||
September 20, 2021 (6) | 1,250 | September 20, 2031 | $ | 20.6 | $ | 16.15 | $ | 20 | (4 | ) | |||||||||||
November 2, 2021 | 1,556 | November 2, 2031 | $ | 22.2 | $ | 18.91 | $ | 31 | (4 | ) | |||||||||||
December 9, 2021 (7( | 38,334 | December 9, 2031 | $ | 26.8 | $ | 12.98 | $ | 497 | (7 | ) | |||||||||||
December 9, 2021 (7) | 19,167 | December 9, 2031 | $ | 26.8 | $ | 13.14 | $ | 252 | (7 | ) | |||||||||||
January 27, 2022(9) | 16,800 | January 27, 2032 | $ | 12.96 | $ | 7.98 | $ | 134 | (4 | ) | |||||||||||
March 21, 2022 (10) | 8,472 | March 21, 2032 | $ | 10.184 | $ | 7.02 | $ | 59 | (4 | ) | |||||||||||
May 31, 2022 | 1,157 | May 31, 2032 | $ | 7.254 | $ | 6.27 | $ | 7 | (4 | ) | |||||||||||
August 29, 2022 | 1,661 | August 29, 2032 | $ | 8.23 | $ | 6.91 | $ | 11 | (4 | ) | |||||||||||
November 29, 2022 | 1,024 | November 29, 2032 | $ | 4.81 | $ | 2.38 | $ | 2 | (4 | ) | |||||||||||
December 29, 2022(11) | 29,125 | December 29, 2032 | $ | 4.14 | $ | 1.64 | $ | 48 | (10 | ) |
No. of RSUs | Fair value on | Share based | Vesting | ||||||||||||||
Grant date | and PSUs | Expiration date | grant date | expenses (1) | terms | ||||||||||||
August 4, 2021 (7) | 15,000 | August 4, 2031 | $ | 21.8 | $ | 327 | (6 | ) | |||||||||
January 27, 2022 (9) | 7,200 | January 27, 2032 | $ | 9.58 | $ | 69 | (6 | ) | |||||||||
March 21, 2022 (10) | 2,850 | March 21, 2032 | $ | 8.27 | $ | 24 | (6 | ) |
NOTE 11 - SHARE-BASED COMPENSATION (Cont.)
B. | Details of share-based grants made by the Company (Cont.) |
1. | Share based expenses are based on their fair value on grant date. The amount is charged to the statement of operations over the vesting periods. |
2. | The options vest over a period of three years commencing on the date of grant, such that one third of the options vested on the first anniversary of the date of grant and thereafter, the remaining options vest in quarterly installments. |
3. | On December 10, 2020, the Company's Board of Directors approved the award of 11,250 options to the Company’s officers, with an exercise price of $6.4, equal to the higher of the share price at the grant date on Nasdaq and the average closing price of our ordinary shares on Nasdaq during the 30 trading days prior to the grant date. |
4. | The options vest over a period of four years commencing on the date of grant, such that 25% of the options vest and become exercisable on the first anniversary of the date of grant and thereafter, vest monthly in equal portions at the end of each month over the subsequent thirty-six (36) months. |
5. | On August 4, 2021, the Company's Board of Directors approved the award of 36,694 options and 15,000 RSUs, of which, 12,075 options and 5,175 RSUs were issued to certain of the Company’s officers. The remaining options and RSUs were issued to certain employees. |
6. | On September 20, 2021, the Company's Board of Directors approved the award of 1,250 options to the Company’s VP clinical, with an exercise price of $20.6, equal to the higher of the share price at the grant date on Nasdaq and the average closing price of our ordinary shares on Nasdaq during the 30 trading days prior to the grant date. |
7. | On December 9, 2021, the Company's shareholders approved the award of 57,500 options to the Company’s CEO. The options shall vest as follows: (i) two-thirds of the options (38,334 options) shall vest over a period of four years commencing on their date of grant, such that 25% of the options shall vest on the first anniversary of the date of grant and an additional 2.0833% will vest at the end of each month thereafter; and (ii) one third of the options (19,166 options) shall fully vest upon the approval by the FDA of the use of our C-Scan, in humans, subject, in each case, to the CEO’s continuing service with the Company on each applicable vesting date. The exercise price of the options of $26.8, equal to the average closing price of the Company’s ordinary shares on the Nasdaq Capital Market during the 30 trading days prior to the approval of the grant of the award by the shareholders, plus a 50% premium. The compensation expense was based on the fair value on the grant date and was estimated at approximately $749. The fair value amount is charged to the statement of operations over the vesting periods of which $335 and $23 were recorded to general and administrative expenses in the year ended December 31, 2022 and 2021, respectively. |
8. | Options granted to service provider. The options vest over a period of twelve (12) months. |
9. | On January 27, 2022, the Company's Board of Directors approved the award to certain employees of 16,800 options, with an exercise price of $12.96, equal to the higher of the share price at the grant date on Nasdaq and the average closing price of our ordinary shares on Nasdaq during the 30 trading days prior to the grant date, and 7,200 RSUs. |
10. | On March 21, 2022, the Company's Board of Directors approved the award of 8,472 options and 2,850 RSUs to certain executive officers and employees, of which 6,650 options and the 2,850 RSUs were granted to certain officers. The options have an exercise price of $10.184, equal to the higher of the share price at the grant date on Nasdaq and the average closing price of our ordinary shares on Nasdaq during the 30 trading days prior to the grant date. |
11. | On December 29, 2022, the Company's shareholders approved the award of 29,125 options to members of the Company's Board of Directors. The options shall become fully vested on the first anniversary of the date of grant, subject to each of the Board of Directors continuing service with the Company on the vesting date. The exercise price of the options is $4.14, equal to two times the closing price of the Company’s ordinary shares on the Nasdaq Capital Market on the date of the approval of the option grant by the Company’s shareholders. |
NOTE 11 - SHARE-BASED COMPENSATION (Cont.)
C. | Options Fair Value |
For the year ended December 31, | |||||||||||
2 0 2 2 | 2 0 2 1 | 2 0 2 0 | |||||||||
Expected volatility | 109%-118% | 115%-153% | 95%-98% | ||||||||
Risk-free rate | 1.7%-3.9% | 0.81%-1.34% | 0.31%-0.83% | ||||||||
Dividend yield | 0% | 0% | 0% | ||||||||
Expected term (in years) | 5.5-6.08 | 5.27-6.41 | 5.88 - 6.1 | ||||||||
Share price |
| $2.07 - $9.58 |
| $0.8 - $2.27 |
| $0.28 - $1.57 |
D. | Effect of share-based compensation transactions on the Company's statements of operations |
For the year ended December 31, | ||||||||||||
2 0 2 2 | 2 0 2 1 | 2 0 2 0 | ||||||||||
Research and development, net | 493 | 329 | 165 | |||||||||
General and administrative, net | 482 | 162 | 243 | |||||||||
Total | 975 | 491 | 408 |
E. | A summary of the Company's option activity related to options granted to employees, service providers and directors, and related information under the 2006 Plan and the 2015 Plan is as follows: |
Year ended December 31, 2022 | ||||||||||||||||
Weighted | Aggregate | |||||||||||||||
Weighted | average | intrinsic | ||||||||||||||
average of | remaining | value | ||||||||||||||
exercise | contractual | ($in | ||||||||||||||
Price | life | thousands) | ||||||||||||||
Number | (in $) | (in years) | (2) | |||||||||||||
Options outstanding at beginning of year | 145,895 | 48.2 | 9.13 | - | ||||||||||||
Options granted | 58,239 | 7.75 | ||||||||||||||
Options forfeited | (12,242 | ) | 59.07 | |||||||||||||
Options exercised | - | - | ||||||||||||||
Options outstanding at end of year | 191,892 | 35.35 | 8.59 | - | ||||||||||||
Options exercisable at end of year | 55,259 | 79.79 | 7.39 | - |
NOTE 11 - SHARE-BASED COMPENSATION (Cont.)
Year ended December 31, 2021 | ||||||||||||||||
Weighted | Aggregate | |||||||||||||||
Weighted | average | intrinsic | ||||||||||||||
average of | remaining | value | ||||||||||||||
exercise | contractual | ($in | ||||||||||||||
Price | life | thousands) | ||||||||||||||
Number | (in $) | (in years) | (2) | |||||||||||||
Options outstanding at beginning of year | 54,516 | 95.3 | 8.74 | - | ||||||||||||
Options granted | 99,935 | 26.0 | ||||||||||||||
Options forfeited | (8,206 | ) | 92.9 | |||||||||||||
Options exercised | (350 | ) | 12.0 | |||||||||||||
Options outstanding at end of year | 145,895 | 48.2 | 9.13 | - | ||||||||||||
Options exercisable at end of year | 27,037 | 154.3 | 7.03 | - |
Year ended December 31, 2020 | ||||||||||||||||
Weighted | Aggregate | |||||||||||||||
Weighted | average | intrinsic | ||||||||||||||
average of | remaining | value | ||||||||||||||
exercise | contractual | ($in | ||||||||||||||
price | life | thousands) | ||||||||||||||
Number | (in $) | (in years) | (2) | |||||||||||||
Options outstanding at beginning of year | 27,456 | 204.8 | 8.30 | - | ||||||||||||
Options granted | 30,832 | 10.4 | ||||||||||||||
Options forfeited | (3,772 | ) | 196.6 | |||||||||||||
Options outstanding at end of year | 54,516 | 95.3 | 8.74 | - | ||||||||||||
Options exercisable at end of year | 15,486 | 282.8 | 7.00 | - |
1. | The weighted average grant date fair values of options granted during the years ended December 31, 2022, 2021 and 2020 were $4.5, $15.7 and $8.2, respectively. |
2. | As of December 31, 2022, all the outstanding options in the amount of 191,892, with an average exercise price of $35.35, are out of the money. |
Year ended December 31 | ||||||||||||
2 0 2 2 | 2 0 2 1 | 2 0 2 0 | ||||||||||
Number of RSUs | ||||||||||||
Unvested at beginning of year | 16,628 | 3,637 | 4,985 | |||||||||
Granted | 10,050 | 15,000 | - | |||||||||
Vested | (4,374 | ) | (1,764 | ) | (1,258 | ) | ||||||
Forfeited | (2,601 | ) | (245 | ) | (90 | ) | ||||||
Unvested at end of year | 19,703 | 16,628 | 3,637 |
3. | The weighted average grant date fair values of RSUs awarded during the years ended December 31, 2022 and 2021 were $9.2 and $21.8, respectively. |
4. | As of December 31, 2022, 2021 and 2020, there was $1,111, $1,644 and $328 unrecognized compensation cost related to non-vested share-based compensation arrangements (options and RSUs) granted under the 2006 Plan and 2015 Plan. This cost is expected to be recognized over a period of up to 4 years. |
For the year ended December 31, | ||||||||||||
2 0 2 2 | 2 0 2 1 | 2 0 2 0 | ||||||||||
Salaries and related expenses | 8,257 | 7,428 | 6,173 | |||||||||
Share-based compensation | 493 | 329 | 165 | |||||||||
Materials | 2,258 | 3,020 | 1,792 | |||||||||
Subcontractors and consultants | 1,375 | 820 | 1,103 | |||||||||
Depreciation | 289 | 169 | 123 | |||||||||
Cost for registration of patents | 140 | 153 | 164 | |||||||||
Others | 1,681 | 861 | 488 | |||||||||
14,493 | 12,780 | 10,008 | ||||||||||
Less participation of the IIA | (222 | ) | (431 | ) | - | |||||||
Total research and development expenses, net | 14,271 | 12,349 | 10,008 |
For the year ended December 31, | ||||||||||||
2 0 2 2 | 2 0 2 1 | 2 0 2 0 | ||||||||||
Salaries and related expenses | 1,784 | 2,042 | 1,698 | |||||||||
Share-based compensation, net | 386 | 162 | 243 | |||||||||
Professional services | 1,092 | 710 | 574 | |||||||||
Office rent and maintenance | 246 | 172 | 174 | |||||||||
Depreciation | 116 | 36 | 25 | |||||||||
Others | 2,139 | 1,850 | 1,210 | |||||||||
Total general and administrative expenses | 5,763 | 4,972 | 3,924 |
For the year ended December 31, | ||||||||||||
2 0 2 2 | 2 0 2 1 | 2 0 2 0 | ||||||||||
Interest income on short-term deposits and other | 1,047 | 101 | 69 | |||||||||
Bank fees and interest expenses | (12 | ) | (13 | ) | (12 | ) | ||||||
Changes in provision for royalties | 37 | 22 | 28 | |||||||||
Exchange rate differences | (25 | ) | (43 | ) | (6 | ) | ||||||
Changes in fair value of derivatives | (121 | ) | 52 | 7 | ||||||||
Total financing income, net | 926 | 119 | 86 |
For the year ended December 31, | ||||||||||||
2 0 2 2 | 2 0 2 1 | 2 0 2 0 | ||||||||||
Net loss | 19,108 | 17,202 | 13,846 | |||||||||
Shares used in computing net loss per ordinary share, basic and diluted | 5,671,786 | 4,159,870 | 1,537,060 | |||||||||
Net loss per ordinary share, basic and diluted | 3.37 | 4.14 | 9.01 |
For the year ended December 31, | ||||||||||||
2 0 2 2 | 2 0 2 1 | 2 0 2 0 | ||||||||||
(number) | ||||||||||||
Warrants and share options | 2,912,147 | 1,170,262 | 1,104,431 |
A. | Compensation to the non-executive directors: |
For the year ended December 31, | ||||||||||||
2 0 2 2 | 2 0 2 1 | 2 0 2 0 | ||||||||||
Fees, including reimbursement of expenses | 270 | 272 | 251 | |||||||||
Share-based compensation | (10 | ) | 24 | 76 | ||||||||
260 | 296 | 327 |
B. | Transactions with related parties: |
For the year ended December 31, | ||||||||||||
2 0 2 2 | 2 0 2 1 | 2 0 2 0 | ||||||||||
Consulting fees, including share-based compensation and reimbursement of expenses | 58 | 61 | 57 | |||||||||
58 | 61 | 57 |
F - 37