| The Company | Note
1 The
Company: Background PhotoMedex,
Inc. (and its subsidiaries) (the “Company”), re-incorporated in Nevada on December 30, 2010, originally formed in
Delaware in 1980, is in the process of transitioning from a skin health company providing medical and cosmetic solutions for dermatological
conditions to a real estate investment company holding investments in a variety of current and future projects, including residential
developments, commercial properties such as gas station sites, and hotels and resort communities, as described further in this
report. The
Company was originally, until the recent sale of the Company’s last significant business unit (its consumer products division
which was sold to ICTV Brands, Inc. on January 23, 2017), as described below and in other sections of this report, a Global Skin
Health company providing integrated disease management and aesthetic solutions to dermatologists, professional aestheticians and
consumers. The Company provided proprietary products and services that address skin diseases and conditions including psoriasis,
acne, actinic keratosis (a precursor to certain types of skin cancer), photo damage and unwanted hair. Starting in August 2014,
the Company began to restructure its operations and redirect its efforts in a manner that management expected would result in
improved results of operations and address certain defaults in its then commercial bank loan covenants. As part of such redirected
efforts, management maintained comprehensive efforts to minimize the Company’s operational costs and capital expenditures.
During this time the Company also sold off certain business units and product lines to support this restructuring and on January
31, 2017, sold the last remaining major product line, its consumer products division. The Company did not present the consumer
products segment as a discontinued operation, since the consumer products represented the entire remaining major operations of
the Company. On
March 31, 2017, the Company and its newly-formed subsidiary FC Global Realty Operating Partnership, LLC, a Delaware limited liability
company (“Acquiror”) entered into an Interest Contribution Agreement (the “Agreement”) with First Capital
Real Estate Operating Partnership, L.P., a Delaware limited partnership (“Contributor”), and First Capital Real Estate
Trust Incorporated, a Maryland corporation, (the “Contributor Parent” and, together with Contributor, the “Contributor
Parties”), under which the Contributor will contribute mostly certain real estate assets (the “Contributed Properties”)
to the Company’s subsidiary in a series of three installments which will conclude no later than December 31, 2017. In exchange,
the Contributor will receive shares of the Company’s Common Stock and newly designated Series A Convertible Preferred Stock
as described below. As a result of this transaction, the Company
has primarily become a real estate investment company for the purpose of investing in a diversified portfolio of quality commercial
and residential real estate properties and other real estate investments located both throughout the United States and in various
international locales. The first installment of contributed assets (the “First Contribution”) closed on May 17, 2017
(the “Initial Closing”). The main provisions of the Agreement are summarized below. First
Contribution In the Initial Closing, the Contributor
transferred certain assets comprising the Contributed Properties to the Company. On the Initial Closing date, the Contributor
transferred to the Acquiror four vacant land sites set for development into gas stations, which are located in Atwater and Merced,
northern California, and which have an agreed upon value of approximately $2.6 million. The Contributor then completed the
transfer to the Acquiror of its 17.9% passive interest in a limited liability company that is constructing a single family residential
development located in Los Lunas, New Mexico (the “Avalon Property”) on June 26, 2017. This residential development
in New Mexico consists of 251, non-contiguous, single family residential lots and a 10,000 square foot club house. 37 of the lots
have been finished, and the remaining 214 are platted and engineered lots. The agreed upon value of its share of this property
is approximately $7.4 million. In return for the Contributed Properties,
the Company issued to the Contributor 879,234 duly authorized, fully paid and non-assessable shares of the Company’s common
stock, par value $0.01 per share (the “Common Stock”), which represented approximately 19.9% of the Company’s
issued and outstanding Common Stock immediately prior to the Initial Closing, at an agreed upon Per Share Value (defined below)
of $2.5183, or $2,214,175 in the aggregate. These shares of Common Stock are restricted and unregistered. The Company issued the
remaining $7,785,825 of the approximately $10 million agreed upon consideration to the Contributor in the form of 123,668 shares
of the Company’s newly designated non-voting Series A Convertible Preferred Stock, par value $0.01 per share (the “Series
A Stock”). Each share of the Series A Stock is convertible into 25 shares of the Company’s Common Stock, subject to
the satisfaction of certain conditions, including stockholder approval in accordance with the rules of The Nasdaq Stock Market
(“ Nasdaq VWAP Per Share Value The
Series A Convertible Preferred Stock does not have voting rights; however, the Company may not (a) alter or change adversely the
powers, preferences or rights of that stock, (b) amend or change its certificate of incorporation in a manner that adversely affects
that stock, (c) increase the number of shares of preferred stock, or (d) otherwise enter into an agreement that accomplishes any
of the foregoing, without the affirmative vote of a majority of the holders of the outstanding Series A Convertible Preferred
Stock prior to any such change. At the Initial Closing, the Company assumed
the liabilities associated with the Contributed Properties, except that it did not assume any liabilities with respect to the
Avalon Property until that property’s contribution was completed on June 26, 2017. The obligations that the Acquiror assumed
at the Initial Closing include the following: Obligations of the Contributor and its affiliates under certain agreements covering
the contributed properties, including an Operating Agreement of Central Valley Gas Station Development, LLC, a Delaware limited
liability company, dated January 28, 2013, and all amendments thereto; and a Construction Contract dated November 19, 2014 between
Central Valley Gas Stations Development, LLC, as owner and First Capital Builders, LLC, as Contractor, with respect to the project
known commonly as Green Sands and Buhach Rd., Atwater, CA. Once the full interest in the Avalon Property was contributed
to the Company, the Company also assumed the Operating Agreement of Avalon Jubilee, LLC, a New Mexico limited liability company
dated as of May 16, 2012, and all amendments thereto; and a Development Services Agreement dated September 15, 2015 by and between
UR-FC Contributed Assets, LLC, a Delaware limited liability company, as Owner, and Land Strategies, LLC, a Nevada limited liability
company, as Developer, with respect to real property owned by Avalon Jubilee, LLC. As of the Initial Closing, the Company
also assumed an installment note dated April 7, 2015 made by First Capital Real Estate Investments, LLC (“FCREI”)
in favor of George Zambelli (“Zambelli”) in the original principal amount of $470 (the “Note”) and a Long
Form Deed of Trust and Assignment of Rents dated April 7, 2015 between FCREI, as Trustor, Fidelity National Title Company, as
Trustee (“Trustee”), and Zambelli, as Beneficiary (the “Deed of Trust”), which secures the Note. The Company is expected to enter into
amended agreements with respect to some or all of these agreements. Finally,
the Company will assume all ancillary agreements, commitments and obligations with respect to these properties. The Company elected to early adopt ASU
2017-01 B usiness Combinations (Topic 805) Clarifying the Definition of a Business. Acquisition of Real Estate Assets. Second
Contribution Contributor Parent is also required to
contribute two additional property interests valued at the agreed upon value amount of $20 million if certain conditions as set
forth in the Agreement are satisfied by December 31, 2017. This second installment is mandatory. Contributor
Parent must contribute to the Acquirer its 100% ownership interest in a private hotel that is currently undergoing renovations
to convert to a Wyndham Garden Hotel. This 265 room full service hotel is located in Amarillo, Texas and has an agreed upon value
of approximately $16 million and outstanding loans of approximately $10.11 million. Before contributing the property to the Acquiror,
Contributor Parent must resolve a lawsuit concerning ownership of the property. Only when Contributor Parent has confirmed that
it is the full and undisputed owner of the property may it contribute that interest to the Acquiror. On July 3, 2017, the Company and the Acquiror
entered into an Agreement to Waive Second Closing Deliverables (the “Second Waiver”) with the Contributor Parties,
amending the Agreement. The Contributor Parties have received an offer to purchase the Amarillo Hotel from a non-related third
party. Under the Second Waiver, the Company and the Acquiror agreed to waive the requirement for the Contributor Parties to contribute
to the Acquiror their 100% ownership interest in the Amarillo Hotel, and to accept in its place a contribution in cash of not less
than $5.89 million from the Contributor Parties from the sale proceeds of the Amarillo Hotel, after the satisfaction of the outstanding
loan, provided that the sale is completed and closed upon not later than August 31, 2017. In exchange the Contributor Parties shall
receive shares of stock in the Company, such amount to be calculated as set forth in the Second Waiver and Agreement. If the sale
of the Amarillo Hotel is not completed and closed by August 31, 2017, the waiver of the requirement for the contribution of the
interest in the Amarillo Hotel will lapse. As of the filing of this report, August 21, 2017 the sale of the Amarillo Hotel has
not been completed. In
addition, Contributor Parent must contribute to the Acquiror its interest in Dutchman’s Bay and Serenity Bay (referred to
as the “Antigua Resort Developments”), two planned full service resort hotel developments located in Antigua and Barbuda
in which Contributor Parent owns a 75% interest in coordination with the Antigua government. Serenity Bay is a planned five star
resort comprised of five contiguous parcels (28.33 acres) zoned for hotel and residential use that are planned for 246 units and
80 one, two and three bedroom condo units. Dutchman’s Bay, is a planned four star condo hotel with 180 guestrooms, 102 two
bedroom condos, and 14 three bedroom villas. For the property in Antigua, Contributor Parent must obtain an amendment to its agreement
with the government to extend the time for development of these properties and confirm that all development conditions in the
original agreement with the government have been either satisfied or waived. In exchange for each of these properties, the Company will issue to Contributor a number of duly authorized,
fully paid and non-assessable shares of the Company’s Common Stock or Series A Convertible Preferred Stock, determined by
dividing the $20 million agreed upon value of that contribution by the Per Share Value. The shares shall be comprised entirely
of shares of Common Stock if the issuance has been approved by the Company’s stockholders prior to the issuance thereof and
shall be comprised entirely of shares of Series A Convertible Preferred Stock if such approval has not yet been obtained. The Company has determined in accordance
with the updated guidance of ASU 2017-01 B usiness Combinations (Topic 805) Clarifying the Definition of a Business Derivatives and
Hedging Derivatives and Hedging Contracts in the Entity’s Own Equity Acquisition of Real
Estate Assets Optional
Contribution Contributor Parent has the option to contribute
either or both of two additional property interests valued at the agreed upon value of $66.5 million if certain conditions as set
forth in the Agreement are satisfied by December 31, 2017. This third installment is optional in Contributor Parent’s sole
discretion. The
Contributor Parent may contribute to the Acquiror its interest in a resort development project on an island just south of Hilton
Head, South Carolina (“Melrose”). Contributor Parent currently has the property under a Letter of Intent and expects
to close on the property by December 31, 2017. Melrose is valued by Contributor Parent at $22.5 million, based upon a senior lending
position that Contributor Parent holds under the Letter of Intent on this property. Contributor
Parent also may contribute to the Acquiror a golf and surf club development project on the Baja Peninsula in Mexico (“Punta
Brava”). Contributor Parent also has this property under a Letter of Intent and expects to close by December 31, 2017. Punta
Brava is valued at the agreed upon value by Contributor Parent at $44 million based on Contributor Parent’s commitment of
$5 million upon closing on this property, plus a commitment for an additional $5 million and a second commitment of $34 million
for construction of the project. In exchange for each of these properties,
the Company will issue to Contributor a number of duly authorized, fully paid and non-assessable shares of the Company’s
Common Stock or Series A Convertible Preferred Stock, determined by dividing an agreed upon value of $86,450 (130% of the value
of the agreed upon value of $66,500) that contribution) by the Per Share Value. The shares shall be comprised entirely of shares
of Common Stock if the issuance has been approved by the Company’s stockholders prior to the issuance thereof and shall be
comprised entirely of shares of Series A Convertible Preferred Stock if such approval has not yet been obtained. In addition, the
Company will issued to Contributor a five (5) year warrant (the “Warrant”) to purchase up to 25,000,000 shares of the
Company’s Common Stock at an exercise price of $3.00 per share that shall vest with respect to the number of underlying shares
upon the achievement of the milestone specified in the Agreement. The number of warrant shares and the exercise price will be equitably
adjusted in the event of a stock split, stock combination, recapitalization or similar transaction. These optional contributions
represent a potential liability to the company as the number of shares to be issued is fixed but the market value of the shares
fluctuates. It is possible that the share price could rise to a level that upon contribution of the properties causes the Company
to give consideration that exceeds the fair value of the assets acquired. This would represent a potential liability to the Company
and to quantify the liability the Company has used the Black Scholes formula. The warrants also represent a potential liability
in that the Company may be required to issues shares at $3 when the shares price is significantly higher. To estimate the fair value of the liability
associated with optionality granted to the Contributor as well as the warrant liability Management has used the Black Scholes option
pricing formula. The key input in the calculation is the assumption of how volatile the Company stock will be over the life of
the option. The more volatile the Company is expected to be, the greater its potential liability. Future volatility is unknown,
as such Management has used a volatility proxy of 39.45% which equals the average volatility of stocks in the Company’s forward
looking peer group of Real Estate Development. After the calculation is performed, additional factors must be considered.
It is possible that despite being economically rational to contribute the properties based on the Company stock price relative
to the value of the optional properties the Contributor may not have the ability to contribute. Therefore a 50% discount is applied
to the option value produced by the Black Scholes formula to arrive at final liability value for the optionality component. The
warrants receive a further 50% discount as they contain a vesting schedule with milestones that must be achieved by the Contributor
once the property is contributed. As of June 30, 2017 the fair value of such liability is estimated to be $1,222 and
is represented on the Balance sheet. The Company has determined that the company’s
contractual obligations under the optional contributions does not constitute a derivative instrument in accordance with ASC 815-10
- Derivatives and Hedging Contracts in the Entity’s Own Equity The
above optional contributions were determined to represent a financial liabilities related to future contingent assets contributions.
See Note 2 Acquisitions and Dispositions . Resignation
and Appointment of Officers and Directors Pursuant to the Agreement, there were changes
to the Company’s named executive officers and its board of directors that were made on May 17, 2017. Named
Executive Officers Dr. Dolev Rafaeli and Dennis McGrath resigned
from their positions as officers of the Company and its subsidiaries, and Dr. Yoav Ben-Dror resigned from his position as director
of the Company and its subsidiaries. Dr. Rafaeli resigned as Chief Executive Officer, and Mr. McGrath resigned as President
and Chief Operating Officer, of the Company; following such resignation both employees assumed other positions within the company
and their employment terms were remained unchanged. Suneet Singal was appointed as Chief Executive
Officer of the Company, and Stephen Johnson as the Company’s Chief Financial Officer. Mr. Singal had signed an employment
agreement with the Company on the date of the First Closing; Mr. Johnson signed an employment agreement with the Company on July
28, 2017. See also Note 14. Dr.
Ben-Dror resigned as a director of the Company’s foreign subsidiaries, including Radiancy (Israel) Ltd. and Photo Therapeutics
Limited in the United Kingdom. He will not continue his affiliation with those companies. Board
of Directors At
the closing for the First Contribution, certain members of the Company’s board of directors resigned, and the board was
expanded, so that the board consists of seven (7) persons, of whom (i) three (3) were designated by the Company’s departing
board, (ii) three (3) were designated by Contributor Parent; and (iii) one (1) (the “Nonaffiliated Director”) was
selected by the other six (6) directors At
the Closing, Lewis C. Pell, Dr. Yoav Ben-Dror and Stephen P. Connelly each resigned from the Board. Dr. Rafaeli and Mr. McGrath remained on
the Board as the Company’s designees, and Michael R. Stewart was appointed as the Company’s Independent Director Designee. Suneet
Singal, Richard J. Leider and Dr. Bob Froehlich were appointed as the Contributor Parent’s designees (with Richard J. Leider
and Dr. Bob Froehlich serving as Independent Directors). Together,
the six board members selected Darrel Menthe as the Nonaffiliated Director. Mr. Menthe also serves as an Independent Director.
The Agreement provided that the compensation committee, nominations and corporate governance committee and audit committee of
the Company shall each consist of the Company’s designee who is an Independent Director, one of Contributor Parent’s
designees who is an Independent Director and the Nonaffiliated Director. General
Conditions In
each case, the Company’s board of directors will determine whether or not the pre-contribution conditions have been satisfied
before accepting the property interests and issuing shares of the Company’s stock to Contributor Parent. The
Agreement is subject to the usual pre- and post-closing representations, warranties and covenants, and restricts the Company’s
conduct to the conduct to that in the ordinary course of business between the signing and December 31, 2017. Under the Agreement, amounts due to Dr.
Dolev Rafaeli and Dennis McGrath under their employment agreements, as well as amounts due to Dr. Yoav Ben-Dror for his services
as a board member of the Company’s foreign subsidiaries (see Note 6), will be converted to convertible secured notes (the
“Payout Notes”) after approval from the Company’s stockholders. The Payout Notes will be due one year after the
stockholder approval and carry a ten percent (10%) interest rate. The principal will convert to shares of the Company’s Common
Stock at the lower of (i) the Per Share Value or (ii) the VWAP with respect to on-exchange transactions in the Company’s
Common Stock executed on the NASDAQ during the thirty (30) trading days prior to the maturity date as reported by Bloomberg L.P.;
provided, however, that the value of the Company’s Common Stock shall in no event be less than $1.75 per share. The Payout
Notes will be secured by a security interest in all assets of the Company; provided, however, that such security interest will
be subordinated to any (i) claims or liens to the holders of any debt (including mortgage debt) being assumed by the Company as
a result of the transaction contemplated by the Agreement, and (ii) all post-closing indebtedness incurred by the Company or its
subsidiaries. The holders of the Payout Notes will have demand registration rights which will require the filing of a resale registration
statement on appropriate form that registers for re-sale the shares of Common Stock underlying the Payout Notes within thirty (30)
days of issuance with best efforts to cause the same to become effective within one-hundred twenty (120) days of issuance. Special
Meeting of Stockholders As promptly as possible following the Initial
Closing, the Company is required file a proxy statement and hold a special meeting of its stockholders to authorize and approve
the following matters: ● an increase in the number of authorized
shares of common stock, $.01 par value per share, of the Company from fifty million (50,000,000) shares to five hundred million
(500,000,000) shares and increase the number of authorized shares of preferred stock, $.01 par value per share, of the Company
from five million (5,000,000) shares to fifty million (50,000,000) shares; •
the issuance to the Contributor or its designee or designees of the Company’s common and/or preferred shares in exchange
for the contributed assets, and the issuance of the Warrant and, upon exercise of the Warrant, the underlying shares of the Company’s
Common Stock in exchange for the contribution of the optional property interests, if any are made; •
the amendment and restatement of the Articles of Incorporation of the Company; •
the approval of the issuance of the Payout Notes and the issuance of the Company’s Common Stock upon conversion thereof;
and •
the election of a new Board of Directors as set forth above in Resignation and Appointment of Officers and Directors in this report. Board
members, officers and certain insiders of the Company are subject to a voting agreement under which they are obligated to vote
in favor of the proposals at the above mentioned stockholder meeting. Registration
Rights Promptly
following the execution of the Agreement, the Company is required prepare and file with the Securities and Exchange Commission
two registration statements on Form S-3 (or such other form available for this purpose) (the “Registration Statements”)
to register (a) the primary offering by the Company (i) to the holders of the Payout Notes the Common Stock underlying the Payout
Notes, and (ii) to the unaffiliated shareholders of Contributor Parent the Common Stock distributed to such unaffiliated shareholders
as a dividend by Contributor Parent and (b) the secondary offering (i) by the Contributor Parties of all the shares of the Company’s
Common Stock (including, without limitation, the shares of Common Stock underlying the Warrant) retained by the Contributor Parties,
(ii) by Maxim Group LLC of the shares received by it as compensation for services rendered to Contributor Parent, and (ii) by
certain affiliates of the Contributor Parent who receive shares from Contributor Parent. Termination
Fee Finally,
the transaction is subject to a termination provision under which, in the event of a material breach of the terms of the transaction,
the breaching company must pay all out-of-pocket expenses of the non-breaching company incurred up to the date of termination
of the transaction. The
Company will conduct most of its building, construction financing and site management activities through various subsidiaries
affiliated with the Contributor Parties. The Company will maintain only a small staff of employees to handle its accounting, legal
and compliance activities, including a new Chief Executive Officer and a new Chief Financial Officer, who assumed their duties
following the close of the First Contribution. Notification
of Delisting of Shares The
Company received a written notification (the “Original Notice”) on November 18, 2016 from The NASDAQ Stock Market
LLC (“NASDAQ”) that the Company’s stockholder equity reported on its Form 10-Q for the period ended September
30, 2016 had fallen below the minimum requirement of $2.5 million, and that the Company was therefore not in compliance with the
requirements for continued listing on the NASDAQ Capital Market under NASDAQ Marketplace Rule 5550(b)(1). The Original Notice
provided the Company with a period of 45 calendar days, or until January 2, 2017, to submit a plan to regain compliance with the
listing rules; that plan was filed with NASDAQ on January 10, 2017 under a one-week extension due to the holiday period. NASDAQ
granted the Company a combined extension of time to comply with the Rule until March 10, 2017. On
March 15, 2017, in a letter from Nasdaq to the Company (the “Nasdaq March 15th Letter”), Nasdaq granted the Company
a further extension until May 17, 2017, to comply with the Continued Listing Rule, subject to (i) the Company having signed a
definitive agreement with the Contributor Parent on or before March 31, 2017, which it did (i.e. the Contribution Agreement),
and (ii) the Company having closed the transaction contemplated by such definitive agreement on or before May 17, 2017. As a result
of the Company’s acquisition of the Contributed Assets in the Initial Closing on May 17, 2017, the Company, as of May 17,
2017, has complied with the requirements of the Nasdaq March 15th Letter and, as of that date, is in compliance with the Continued
Listing Rule, including the requirement to maintain shareholder equity of at least $2.5 million. However,
on May 22, 2017, the Company received an additional letter from Nasdaq, notifying the Company that, while it was now in compliance
with the Continued Listing Rule, it was not in compliance with Listing Rule 5110(a) because it failed to submit an initial listing
application to receive approval to list the post-transaction entities, prior to the Initial Closing. Because of this failure,
Nasdaq had determined to delist the Company’s securities from listing and registration on The Nasdaq Stock Market. Under
Nasdaq rules, the Company had the right to appeal Nasdaq’s delisting determination and request a hearing, which it did.
At the hearing on June 26, 2917, the Company presented to Nasdaq its request that the delisting determination be set aside and
its plan to satisfy all necessary criteria for listing on NASDAQ and to comply with the requirements of an initial listing application.
Nevertheless, on July 5, 2017, the Company received another notice (the “July 5th Notice”) from NASDAQ indicating
that, based upon the Company’s non-compliance with NASDAQ Listing Rule 5110a, which requires an issuer to file an initial
listing application and satisfy the initial listing criteria upon completion of a change of control transaction, the NASDAQ Hearings
Panel had determined to delist the Company’s common stock from NASDAQ and that trading of the Company’s common stock
would be suspended on NASDAQ effective with the open of business on July 7, 2017. The Company has appealed the Panel’s
determination; however, the appeal does not stay the suspension of trading of the Company’s securities on NASDAQ. The Company
has already filed an initial listing application with NASDAQ, and is working to evidence full compliance with the applicable NASDAQ
Listing Rules as soon as possible. The Company cannot determine at this time whether NASDAQ will accepts its initial listing application. Upon
the suspension of trading on NASDAQ, the Company’s common stock moved to trade over-the-counter via the OTC Markets’
“Pink” tier. On July 24, 2017, the Company received written notice that its common stock had been up-listed and approved
for trading on OTCQB, the higher tier of the OTC Markets, under its existing symbol “PHMD.” The Securities and Exchange
Commission (the “SEC”) considers the OTCQB marketplace to be an “established public market” for the purpose
of determining the public market price of a company’s stock when registering securities for resale with the SEC, and the
majority of broker-dealers trade stocks on the OTCQB marketplace. Listing on the OTCQB generally provides that a company maintain
higher reporting standards and requirements and imposes management certification and compliance requirements. The Company believes
that trading its stock on the OTCQB will likely enhance liquidity and shareholder value while its NASDAQ appeal is pending. Liquidity
and Going Concern As of June 30, 2017, the Company had an
accumulated deficit of $116,345. To date, and subsequent to the recent sale of the Company’s last significant business unit,
the Company has dedicated most of its financial resources to general and administrative expenses. At present, the Company is not
generating any revenues from operating activities. Cash and cash equivalents as of June 30,
2017 were $2,329, including restricted cash of $250. The Company has historically financed its activities with cash from operations,
the private placement of equity and debt securities, borrowings under lines of credit and, in the most recent periods with sales
of certain assets and business units. The Company will be required to obtain additional liquidity resources in order to support
its operations. On January 23, 2017, the Company sold its consumer products division to ICTV Brands, Inc., for a total selling
price of $9.5 million. The Company has collected $5 million of that purchase price; the remaining amount of up to $4.5 million
was payable through a contingent royalty on the sale of consumer products by ICTV Brands. On
July 12, 2017 the Company, along with its subsidiaries Radiancy, Inc. (“Radiancy”); PhotoTherapeutics Ltd. (“PHMD
UK”); and Radiancy (Israel) Limited (“Radiancy Israel” and together with the Company, Radiancy and PHMD UK the
“Sellers” and each individually a “Seller”) entered into a Termination and Release Agreement (the “Release”)
between the Sellers and ICTV Brands Inc. (“ICTV”) and its subsidiary ICTV Holdings, Inc. (“ICTV Holdings”).
The Sellers, ICTV and ICTV Holdings are referred to herein individually as a “Party” and collectively as the “Parties.” Under
the terms of the Release, the Asset Purchase Agreement among the Parties, dated October 4, 2016, as amended by the First Amendment
to the Asset Purchase Agreement, dated January 23, 2017 (as so amended, the “Purchase Agreement”), is terminated and
of no further force and effect, except for certain surviving rights, obligations and covenants described in the Release. Pursuant
to the Release, each of the Sellers, on one hand, and ICTV and ICTV Holdings, on the other hand, fully release, forever discharge
and covenant not to sue any other Party, from and with respect to any and all past and present claims arising out of, based upon
or relating to the Purchase Agreement (other than the surviving covenants described in the Purchase Agreement) or the transactions
contemplated thereby. Pursuant to the terms of the Release, ICTV
paid to the Company, within 3 business days of the date of the Release, $2,000 in cash and in immediately available funds (the
“Payment”). Subject to this Payment, neither ICTV nor ICTV Holdings shall have any further royalty or other payment
obligations under the Purchase Agreement. The Company received $2,000 on July 13, 2017. As partial consideration for the releases
provided by ICTV Holdings to the Sellers pursuant to the Release and |
