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REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
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SHELL COMPANY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Tel: +972 3 7177050
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(Jurisdiction of incorporation or organization)
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(Address of principal executive offices)
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Title of each class to be registered
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Trading Symbol(s)
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Name of each exchange on which each
class is to be registered |
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The
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Large accelerated filer ☐
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Accelerated filer ☐
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Emerging Growth Company
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A. |
[RESERVED] |
4 |
B. |
Capitalization and Indebtedness |
4 |
C. |
Reasons for the Offer and Use of Proceeds |
4 |
D. |
Risk Factors |
4 |
37 | ||
A. |
History and Development of the Company |
37 |
B. |
Business Overview |
38 |
C. |
Organizational Structure |
56 |
D. |
Property, Plants and Equipment |
56 |
56 | ||
56 | ||
A. |
Operating Results |
60 |
B. |
Liquidity and Capital Resources |
61 |
C. |
Research and Development, Patents and Licenses |
65 |
D. |
Trend Information |
65 |
E. |
Critical Accounting Estimates |
65 |
66 | ||
A. |
Directors and Senior Management |
66 |
B. |
Compensation |
69 |
C. |
Board Practices |
71 |
D. |
Employees |
86 |
E. |
Share Ownership |
86 |
F |
Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation |
87 |
87 | ||
A. |
Major Shareholders |
87 |
B. |
Related Party Transactions |
89 |
C. |
Interests of Experts and Counsel |
90 |
90 | ||
A. |
Statements and Other Financial Information |
90 |
B. |
Significant Changes |
90 |
91 | ||
A. |
Offer and Listing Details |
91 |
B. |
Plan of Distribution |
91 |
C. |
Markets |
91 |
D. |
Selling Shareholders |
91 |
E. |
Dilution |
91 |
F. |
Expenses of the Issue |
91 |
91 | ||
A. |
Share Capital |
91 |
B. |
Articles of Association |
91 |
C. |
Material Contracts |
91 |
D. |
Exchange Controls |
91 |
E. |
Taxation |
91 |
F. |
Dividends and Paying Agents |
103 |
G. |
Statement by Experts |
103 |
H. |
Documents on Display |
103 |
I. |
Subsidiary Information |
103 |
J. |
Annual Report to Security Holders. |
103 |
103 | ||
104 | ||
A. |
Debt Securities |
104 |
B. |
Warrants and rights |
104 |
C. |
Other Securities |
104 |
D. |
American Depositary Shares |
104 |
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104 | ||
104 | ||
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our ability to continue as a going concern; | |
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our history of losses and needs for additional capital to fund our operations
and our ability to obtain additional capital on acceptable terms, or at all; |
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our dependence on the success of our initial product candidate, PRF-110; |
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the outcomes of preclinical studies, clinical trials and other research regarding
PRF-110 and future product candidates; |
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the impact of the COVID-19 pandemic and other pandemics on our operations; |
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our limited experience managing clinical trials; |
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our ability to retain key personnel and recruit additional employees; |
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our reliance on third parties for the conduct of clinical trials, product manufacturing
and development; |
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the impact of competition and new technologies; |
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our ability to comply with regulatory requirements relating to the development and
marketing of our product candidates; |
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our ability to establish and maintain strategic partnerships and other corporate collaborations;
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the implementation of our business model and strategic plans for our business and
product candidates; |
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the scope of protection we are able to establish and maintain for intellectual property
rights covering our product candidates and our ability to operate our business without infringing the intellectual property rights of
others; |
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the overall global economic environment; |
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our ability to develop an active trading market for our ordinary shares and whether
the market price of our ordinary shares is volatile; |
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statements as to the impact of the political and security situation in Israel on our
business; and |
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those factors referred to in “Item 3.D. Risk Factors,” “Item 4.
Information on the Company,” and “Item 5. Operating and Financial Review and Prospects”, as well as in this Annual Report
on Form 20-F generally. |
A. |
[RESERVED] |
B. |
Capitalization and Indebtedness |
C. |
Reasons for the Offer and Use of Proceeds |
D. |
Risk Factors |
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The report of our independent registered public accounting firm contains an explanatory
paragraph regarding substantial doubt about our ability to continue as a going concern; |
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We have incurred significant losses and negative cash flows
from operations since our inception and expect to incur losses for the foreseeable future. We may never achieve or maintain profitability;
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Our limited operating history may make it difficult for you to assess our future viability.
We have never generated revenues and may never be profitable; |
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We will need substantial additional funding, which may not be available to us on acceptable
terms or at all. If we are unable to raise capital when needed, we may be forced to delay, reduce and/or eliminate our research and drug
development programs or future commercialization efforts; |
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If we are unable to develop and maintain an effective system
of internal control over financial reporting, or if we fail to remediate material weaknesses that are identified, we may not be able
to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and
adversely affect our business and operating results. |
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We are dependent on the success of our initial
product candidate, PRF-110, for which one clinical trial has begun in March 2023, and future additional trials are currently planned.
Our clinical trials of PRF-110 may not be successful. If we are unable to obtain approval for and commercialize PRF-110 or experience
significant delays in doing so, our business will be materially harmed; |
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We have experienced delays in the manufacturing of our clinical trial batches and
if we experience further delays, our business will be further harmed. |
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We are dependent on a single supplier from which we obtain some of our critical materials
and components used in manufacturing. |
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The COVID-19 pandemic may adversely affect our development efforts including the planned
clinical trials for PRF-110; |
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We have not yet commercialized any products or technologies, and we may never become
profitable; |
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If we are unable to successfully complete our clinical trial programs for PRF-110,
or if such clinical trials take longer to complete than we project, our ability to execute our current business strategy will be adversely
affected; |
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We have limited experience in conducting and managing clinical trials necessary to
obtain regulatory approvals. If our drug candidates and technologies do not receive the necessary regulatory approvals, we will be unable
to commercialize our products; |
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If third parties on which we will have to rely for clinical trials do not perform
as contractually required or as we expect, we may not be able to obtain regulatory approval for or commercialize our products; |
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If our competitors develop and market products that are less expensive or more effective
than our product, our revenues and results may be harmed and our commercial opportunities may be reduced or eliminated; |
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If we are unable to maintain patent protection for our products, our competitors could
develop and commercialize products and technology similar or identical to our product candidates, and our ability to successfully commercialize
any product candidates we may develop, and our science may be adversely affected; |
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Conditions in the Middle East and in Israel may harm our operations; |
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Our international clinical trials may be delayed or otherwise adversely impacted by
social, political and economic factors affecting the particular foreign country; |
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If we fail to regain compliance with the Nasdaq minimum listing requirements, our
ordinary shares will be subject to delisting. Our ability to publicly or privately sell equity securities and the liquidity of our ordinary
shares could be adversely affected if our ordinary shares are delisted. |
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We are currently operating in a period of economic uncertainty and capital markets
disruption, which has been significantly impacted by geopolitical instability due to the ongoing military conflict between Russia and
Ukraine |
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Because we are not subject to compliance with rules requiring the adoption of certain
corporate governance measures, our shareholders have limited protections against interested director transactions, conflicts of interest
and similar matters; |
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If we are unable to satisfy the requirements of Section 404 of the Sarbanes-Oxley
Act as they apply to a foreign private issuer that is listed on a U.S. exchange, or our internal control over financial reporting is not
effective, the reliability of our financial statements may be questioned and our share price and the ADS price may suffer. |
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initiate and manage clinical trials for PRF-110; |
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seek regulatory approvals; |
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implement internal systems and infrastructures; |
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hire management and other personnel; and |
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progress PRF-110 towards commercialization. |
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the costs, timing and outcome of manufacturing clinical trial and commercial quantities
of PRF-110; |
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the scope, progress, results and costs of our current and future clinical trials of
PRF-110 for our current targeted uses; |
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the costs, timing and outcome of regulatory review of PRF-110; |
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the extent to which we acquire or invest in businesses, products and technologies,
including entering into or maintaining licensing or collaboration arrangements for PRF-110 on favorable terms, although we currently have
no commitments or agreements to complete any such transactions; |
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the costs and timing of future commercialization activities, including drug sales,
marketing, manufacturing and distribution, for any of our product candidates for which we receive marketing approval, to the extent that
such sales, marketing, manufacturing and distribution are not the responsibility of any collaborator that we may have at such time;
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the amount of revenue, if any, received from commercial sales of PRF-110, should it
receive marketing approval; |
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the costs of preparing, filing and prosecuting patent applications, maintaining, defending
and enforcing our intellectual property rights and defending intellectual property-related claims; |
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our ability to establish strategic collaborations, licensing or other arrangements
and the financial terms of any such agreements, including the timing and amount of any future milestone, royalty or other payments due
under any such agreement; |
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our headcount growth and associated costs as we expand our business operations and
our research and development activities; |
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the costs of operating as a public company; |
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maintaining minimum shareholders’ equity requirements under the Nasdaq rules;
and |
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the impact of the COVID-19 pandemic and other pandemics,
and the Russian invasion of Ukraine, which may exacerbate the magnitude of the factors discussed above. |
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establishment of supply arrangements with third-party raw materials and drug product
suppliers and manufacturers who are able to manufacture clinical trial and commercial quantities of PRF-110 and to develop, validate and
maintain a commercially viable manufacturing process that is compliant with current Good Manufacturing Practices, or cGMP, at a scale
sufficient to meet anticipated demand and over time enable us to reduce our cost of manufacturing; |
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initiation and successful patient enrolment and completion of additional clinical
trials on a timely basis; |
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our ability to demonstrate PRF-110’s safety, tolerability and efficacy to the
FDA or any comparable foreign regulatory authority for marketing approval; |
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timely receipt of marketing approvals for PRF-110; |
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maintaining patent protection, trade secret protection and regulatory exclusivity,
both in the U.S. and internationally; |
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successfully defending and enforcing our rights in our intellectual property portfolio;
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avoiding and successfully defending against any claims that we have infringed, misappropriated
or otherwise violated any intellectual property of any third party; |
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the performance of our future collaborators, if any; |
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the extent of, and our ability to timely complete, any required post-marketing approval
commitments imposed by FDA or other applicable regulatory authorities; |
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establishment of scaled production arrangements with third-party manufacturers to
obtain finished products that are compliant with cGMP and appropriately packaged for sale; |
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successful launch of commercial sales following any marketing approval; |
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a continued acceptable safety profile following any marketing approval; |
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commercial acceptance by patients, the medical community and third-party payors;
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the availability of coverage and adequate reimbursement and pricing by third-party
payors and government authorities; |
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the availability, perceived advantages, relative cost, relative safety and relative
efficacy of alternative and competing treatments; and |
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our ability to compete with other post-operative pain, or POP, treatments. |
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the timing of regulatory approvals in the countries, and for the uses we seek;
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the competitive environment; |
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the establishment and demonstration in the medical community of the safety and clinical
efficacy of our products and their potential advantages over existing therapeutic products; |
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our ability to enter into strategic agreements with pharmaceutical and biotechnology
companies with strong marketing and sales capabilities; |
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the adequacy and success of distribution and
marketing efforts; and |
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the pricing and reimbursement policies of government and third-party payors, such
as insurance companies, health maintenance organizations and other plan administrators. |
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obtaining regulatory approvals (e.g., an Investigational New Drug, or IND, application)
to commence a clinical trial; |
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reaching agreement on acceptable terms with prospective contract research organizations,
or CROs, and trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and
trial sites; |
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slower than expected rates of patient recruitment due to narrow screening requirements
and competing clinical studies; |
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the inability of patients to meet protocol requirements imposed by the FDA or other
regulatory authorities; |
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the need or desire to modify our manufacturing process; |
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delays, suspension, or termination of the clinical trials due to the institutional
review board responsible for overseeing the study at a particular study site; and |
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governmental or regulatory delays or “clinical holds” requiring suspension
or termination of the trials. |
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assist us in developing, testing and obtaining regulatory approval; |
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manufacture our drug candidates; and |
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market and distribute our products. |
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perceptions by members of the health care community, including physicians, of the
safety and efficacy of our product; |
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the potential advantages that our product offers over existing treatment methods or
other products that may be developed; |
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the cost-effectiveness of our product relative to competing products; |
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the availability of government or third-party pay or reimbursement for our products;
and |
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the effectiveness of our or our partners’ sales, marketing and distribution
efforts. |
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litigation involving patients taking our drug; |
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restrictions on such drugs, manufacturers or manufacturing processes; |
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restrictions on the labeling or marketing of a drug; |
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restrictions on drug distribution or use; |
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requirements to conduct post-marketing studies or clinical trials; |
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warning letters or untitled letters; |
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withdrawal of the drugs from the market; |
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refusal to approve pending applications or supplements to approved applications that
we submit; |
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recall of drugs; |
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fines, restitution or disgorgement of profits or revenues; |
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suspension or withdrawal of marketing approvals; |
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damage to relationships with any potential collaborators; |
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exclusion from or restrictions on coverage by third-party payors; |
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unfavorable press coverage and damage to our reputation; |
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refusal to permit the import or export of drugs; |
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drug seizure; or |
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injunctions or the imposition of civil or criminal penalties. |
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decreased demand for a product; |
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damage to our reputation; |
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withdrawal of clinical trial volunteers; and |
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loss of revenues. |
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the potential disruption of our ongoing business; |
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the distraction of management away from the ongoing oversight of our existing business
activities; |
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incurring additional indebtedness; |
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the anticipated benefits and cost savings of those transactions not being realized
fully, or at all, or taking longer to realize than anticipated; |
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an increase in the scope and complexity of our operations; and |
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the loss or reduction of control over certain of our assets. |
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result in costly litigation; |
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divert management’s attention and resources; |
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cause product shipment delays; and |
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require us to enter into royalty or licensing agreements. Such royalty
or licensing agreements, if required, may not be available on terms acceptable to us, if at all. |
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others may be able to make products that are similar to our product candidates or
utilize similar science or technology but that are not covered by the claims of the patents that we may own or license from our licensors
or that incorporate certain research in our product candidates that is in the public domain; |
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we might not have been the first to file patent applications covering our inventions;
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others may independently develop similar or alternative technologies or duplicate
any of our technologies without infringing our intellectual property rights; |
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issued patents that we hold rights to may be held invalid or unenforceable, including
as a result of legal challenges by our competitors or other third parties; |
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our competitors or other third parties might conduct research and development activities
in countries where do not have patent rights and then use the information learned from such activities to develop competitive products
for sale in our major commercial markets; |
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the patents of others may harm our business if, for example, we are found to have
infringed those patents or if those patents serve as prior art to our patents which could potentially invalidate our patents; and
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we may choose not to file a patent in order to maintain certain trade secrets or know-how,
and a third party may subsequently file a patent covering such intellectual property, which could ultimately result in public disclosure
of the intellectual property if the third party’s patent application is published or issues to a patent. |
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difficulty in establishing or managing relationships with clinical research organizations
and physicians; |
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different standards for the conduct of clinical trials and/or health care reimbursement;
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our inability to locate qualified local consultants, physicians, and partners;
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the potential burden of complying with a variety of foreign laws, medical standards
and regulatory requirements, including the regulation of pharmaceutical products and treatment; and |
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general geopolitical risks, such as political and economic instability, and changes
in diplomatic and trade relations. |
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to elect or defeat the election of our directors; |
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amend or prevent amendment of our charter documents or by-laws; |
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effect or prevent a merger, sale of assets or other corporate transaction; and
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to control the outcome of any other matter submitted to our shareholders for vote.
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less liquid trading market for our securities; |
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more limited market quotations for our securities; |
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determination that our ordinary shares and/or warrants are a “penny stock”
that requires brokers to adhere to more stringent rules and possibly resulting in a reduced level of trading activity in the secondary
trading market for our securities; |
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more limited research coverage by stock analysts; |
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loss of reputation; and |
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more difficult and more expensive equity financings in the future. |
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changes or developments in laws or regulations governing our business; |
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announcements of regulatory approvals or the failure to obtain them, or specific label
indications or patient populations for their use, or changes or delays in the regulatory review process; |
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unsatisfactory results of preclinical studies or clinical trials; |
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adverse actions taken by regulatory agencies with respect to our manufacturing supply
chain or sales and marketing activities; |
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announcements of innovations or new products by us or our competitors; |
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any intellectual property infringement, misappropriation or other actions in which
we may become involved; |
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any adverse changes to our relationships with manufacturers or suppliers; |
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announcements concerning our competitors; |
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achievement of expected product sales and profitability or our failure to meet expectations;
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our commencement of, or involvement in, litigation; and |
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any changes in our board of directors or management. |
ITEM 4.
INFORMATION ON THE COMPANY |
A. |
History and Development of the Company |
B. |
Business Overview |
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addressing unmet medical needs; |
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de-risked drug development by using long-established APIs and our patented, proprietary
extended release drug-delivery system; |
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reduced development costs; |
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rapid preclinical and clinical testing; |
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well understood paths to approval: and |
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the potential to disrupt current practices. |
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PRF-110 is highly viscous and thus stays in place when placed into a surgical wound
bed. |
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PRF-110 remains within the surgical site when the skin is closed, without being toxic
or proinflammatory. |
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PRF-110 is easy to administer and its use is consistent with current surgical practice.
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PRF-110 is highly uniform and resistant to degradation in the wound, resulting is
sustained,/extended release of the analgesic. |
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Ropivacaine, the active drug used in PRF-110, is a safe and well-characterized local
anesthetic. |
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The components that make up the remainder of the PRF-110 formulation are classified
as GRAS (Generally Regarded As Safe) by the FDA. |
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We have amassed a human toxicology portfolio for PRF-110, demonstrating that there
are no PRF-110-associated serious adverse events in either healthy controls or in surgical patients. |
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Based on extensive toxicology and pharmacokinetic studies, as well as positive Phase
2 results, the FDA has granted our company an IND for PRF-110 and approved the initiation of Phase 3 trials for the treatment of post-operative
pain. |
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Unlike many drug trials that take months to years to complete and which are complex
and whose endpoints are difficult to interpret, the planned trials are expected to last for 72 hours with a seven day and a one-month
follow-up, with primary endpoint of pain measurement on the familiar scale of 0 (no pain) to 10 (worst imaginable pain). |
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Upon completion of the Phase 3 studies, if successful, we plan to apply for an NDA
for the management of post-operative pain. |
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If and when approved for commercial sale, we intend to capitalize on the opportunity
and carry out post-approval trials in a number of additional surgical indications, including breast augmentation/reduction, bariatric
procedures, hysterectomy, cholecystectomy as well as orthopaedic procedures including joint replacements and open fracture repair. We
intend to capitalize on these opportunities to become the leader in opiate-free, long-acting local and regional analgesia. |
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Hospitals; |
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Free-standing surgical centers; and |
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Surgical offices. |
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Posimir by Durect (DRRX). A bupivacaine collagen matrix was recently approved by the
FDA for only arthroscopic subacromial decompression (niche market ~600,000 annual procedures in the U.S.). |
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Xaracoll by Innocoll, a surgically implantable and bioresorbable bupivacaine-collagen
matrix, FDA approved the product for only open inguinal hernia repair. |
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Allay Therapeutics ATX-101, a product based on bupivacaine is in development stage.
|
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TLC590, from the Taiwan Liposome Company, is a liposomal formulation of ropivacaine
that completed Phase II trials in patients following hernia surgery. |
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completion of preclinical laboratory tests, animal studies and formulation studies
in compliance with the FDA’s good laboratory practice, or GLP, regulations; |
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submission to the FDA of an IND, which must take effect before human clinical trials
begin; |
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approval by an independent institutional review board, or IRB, representing each clinical
site before each clinical trial may be initiated; |
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performance of adequate and well-controlled human clinical trials in accordance with
good clinical practices, or GCP, to establish the safety and efficacy of the proposed drug product for each proposed indication;
|
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preparation and submission to the FDA of an NDA requesting marketing for one or more
proposed indications; |
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review by an FDA advisory committee, where appropriate or if applicable; |
● |
satisfactory completion of one or more FDA inspections of the manufacturing facility
or facilities at which the product, or components thereof, are produced to assess compliance with current Good Manufacturing Practices,
or cGMP, requirements and to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength,
quality and purity; |
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satisfactory completion of FDA audits of clinical trial sites to assure compliance
with GCPs and the integrity of the clinical data; |
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payment of user fees and securing FDA approval of the NDA; and |
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compliance with any post-approval requirements, including the potential requirement
to implement a Risk Evaluation and Mitigation Strategy, or REMS, and the potential requirement to conduct post-approval studies.
|
Phase 1: |
The drug is initially introduced into healthy human subjects or, in certain indications
such as cancer, patients with the target disease or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution,
excretion and, if possible, to gain an early indication of its effectiveness and to determine optimal dosage.
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Phase 2: |
The drug is administered to a limited patient population to identify possible adverse
effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage
tolerance and optimal dosage.
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Phase 3: |
The drug is administered to an expanded patient population, generally at geographically
dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and
safety of the product for approval, to establish the overall risk-benefit profile of the product, and to provide adequate information
for the labeling of the product.
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Phase 4: |
Post-approval studies, which are conducted following initial approval, are typically
conducted to gain additional experience and data from treatment of patients in the intended therapeutic indication. |
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restrictions on the marketing or manufacturing of the product, including total or
partial suspension of production, complete withdrawal of the product from the market or product recalls; |
● |
fines, warning letters or holds on post-approval clinical trials; |
● |
refusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension
or revocation of product license approvals; |
● |
product seizure or detention, or refusal to permit the import or export of products;
or |
● |
injunctions or the imposition of civil or criminal penalties. |
● |
Compliance with the EU’s stringent pharmacovigilance and safety reporting rules,
pursuant to which inter alia post-authorization studies and additional monitoring obligations
can be imposed, has to be ensured. |
● |
The manufacturing of authorized drugs, for which a separate manufacturer’s license
is mandatory, must also be conducted in strict compliance with the EMA’s GMP requirements and comparable requirements of other regulatory
bodies in the EU, which mandate the methods, facilities and controls used in manufacturing, processing and packing of drugs to assure
their safety and identity. |
● |
The marketing and promotion of authorized drugs, including industry-sponsored continuing
medical education and advertising directed toward the prescribers of drugs, cooperation with healthcare professionals and advertising
of drugs directed to the general public, are strictly regulated in the EU notably under Directive 2001/83EC, as amended, and EU member
state laws. |
C. |
Organizational Structure |
D. |
Property, Plant and Equipment |
ITEM 4A.
UNRESOLVED STAFF COMMENTS |
ITEM 5. OPERATING
AND FINANCIAL REVIEW AND PROSPECTS |
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continue the ongoing and planned preclinical and clinical development of our drug
candidates; |
● |
build a portfolio of drug candidates through the acquisition or in-license of drugs,
drug candidates or technologies; |
● |
initiate preclinical studies and clinical trials for any additional drug candidates
that we may pursue in the future; |
● |
seek marketing approvals for our current and future drug candidates that successfully
complete clinical trials; |
● |
establish a sales, marketing and distribution infrastructure to commercialize any
drug candidate for which we may obtain marketing approval; |
● |
develop, maintain, expand and protect our intellectual property portfolio; |
● |
implement operational, financial and management systems; and |
● |
attract, hire and retain additional administrative, clinical, regulatory and scientific
personnel. |
● |
employee-related expenses, including salaries, benefits and stock-based compensation
expense; |
● |
fees paid to consultants for services directly related to our drug development and
regulatory effort; |
● |
expenses incurred under agreements with contract research organizations, as well as CMOs
and consultants that conduct preclinical studies and clinical trials; |
● |
costs associated with preclinical activities and development activities; and
|
● |
costs associated with technology and intellectual property licenses. |
● |
number of clinical trials required for approval and any requirement for extension
trials; |
● |
per patient trial costs; |
● |
number of patients that participate in the clinical trials; |
● |
number of sites included in the clinical trials; |
● |
countries in which the clinical trial is conducted; |
● |
length of time required to enroll eligible patients; |
● |
potential additional safety monitoring or other studies requested by regulatory agencies;
and |
● |
efficacy and safety profile of the drug candidate. |
A. |
Operating Results |
|
Year ended December 31, |
|||||||||||
|
2022 |
2021 |
2020 |
|||||||||
Statements of comprehensive loss data: |
(US$ thousands) |
|||||||||||
Research and development |
4,422 |
2,860 |
354 |
|||||||||
General and administrative |
4,447 |
4,348 |
1,317 |
|||||||||
Total operating loss |
8,869 |
7,208 |
1,671 |
|||||||||
Interest expenses | - |
- |
987 |
|||||||||
Other financial income (expenses), net | (86 | ) | 32 |
1,175 |
||||||||
Loss before taxes |
8,783 |
7,240 |
3,833 |
|||||||||
Income tax expense |
9 |
6 |
220 |
|||||||||
Net loss |
8,792 |
7,246 |
4,053 |
JOBS Act Exemptions and Foreign Private Issuer Status |
● |
the sections of the Exchange Act regulating the solicitation of proxies, consents
or authorizations in respect of a security registered under the Exchange Act; |
● |
the sections of the Exchange Act requiring insiders to file public reports of their
stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; |
● |
the rules under the Exchange Act requiring the filing with the SEC of quarterly reports
on Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K, upon the occurrence
of specified significant events; and |
● |
Regulation FD, which regulates selective disclosures of material information
by issuers. |
B. |
Liquidity and Capital Resources. |
● |
the costs, timing and outcome of manufacturing clinical trial and commercial quantities
of PRF-110; |
● |
the scope, progress, results and costs of our current and future clinical trials of
PRF-110 for our current targeted uses; |
● |
the costs, timing and outcome of regulatory review of PRF-110; |
● |
the extent to which we acquire or invest in businesses, products and technologies,
including entering into or maintaining licensing or collaboration arrangements for PRF-110 on favorable terms, although we currently have
no commitments or agreements to complete any such transactions; |
● |
the costs and timing of future commercialization activities, including drug sales,
marketing, manufacturing and distribution, for any of our product candidates for which we receive marketing approval, to the extent that
such sales, marketing, manufacturing and distribution are not the responsibility of any collaborator that we may have at such time;
|
● |
the amount of revenue, if any, received from commercial sales of PRF-110, should it
receive marketing approval; |
● |
the costs of preparing, filing and prosecuting patent applications, maintaining, defending
and enforcing our intellectual property rights and defending intellectual property-related claims; |
● |
our ability to establish strategic collaborations, licensing or other arrangements
and the financial terms of any such agreements, including the timing and amount of any future milestone, royalty or other payments due
under any such agreement; |
● |
our headcount growth and associated costs as we expand our business operations and
our research and development activities; |
● |
the costs of operating as a public company; |
● |
maintaining minimum shareholders’ equity requirements under the Nasdaq rules;
and |
● |
the impact of the COVID-19 pandemic and the Russian invasion of Ukraine, which
may exacerbate the magnitude of the factors discussed above. |
Payments due by period |
||||||||||||||||||||
(US$ thousands) |
||||||||||||||||||||
Less than 1 year |
1-3 Years |
3-5 Years |
More than 5 years |
Total |
||||||||||||||||
Obligations under master clinical research organization agreement(1)
|
3,886 |
972 |
— |
— |
4,858 |
|||||||||||||||
Obligations under master clinical trial agreement(2)
|
5,088 |
1,272 |
— |
— |
6,360 |
|||||||||||||||
Total |
$ |
8,974 |
2,244 |
— |
— |
$ |
11,218 |
Years ended December 31, |
||||||||||||
(US$ thousands) |
||||||||||||
2022 |
2021 |
2020 |
||||||||||
Net cash used in operating activities |
(6,459 |
) |
(6,553 |
) |
(2,557 |
) | ||||||
Net cash used in investing activities |
(6,006 |
) |
(50 |
) |
(10 |
) | ||||||
Net cash provided by financing activities |
— |
7,484 |
17,310 |
|||||||||
(Decrease) Increase in cash and cash equivalents and restricted cash |
(12,465 |
) |
881 |
14,743 |
||||||||
Cash and cash equivalents and restricted cash, at the beginning
of the year |
16,571 |
15,690 |
947 |
|||||||||
Cash and cash equivalents and restricted cash, at the end of
the year |
4,106 |
16,571 |
15,690 |
C. |
Research and Development, Patents and Licenses |
D. |
Trend Information |
ITEM 6.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES |
A. |
Directors and Senior Management |
Name |
|
Age |
|
Position |
Senior Management |
|
|
|
|
Ilan Hadar |
|
53 |
|
Chief Executive Officer and Chief Financial Officer |
Prof. Eli Hazum |
|
75 |
|
Chief Technology Officer and Director |
Dr. Sigal Aviel |
|
59 |
|
Chief Operating Officer |
Rita Keynan |
|
54 |
|
Vice President of Pharmaceutical Operations |
|
|
|
|
|
Non-Employee Director |
|
|
|
|
Dr. Ehud Geller |
|
76 |
|
Chairman of the Board and Director |
Efi Cohen-Arazi(1)
(2) (3) (4) |
|
68 |
|
Director |
Dr. Ellen S. Baron(1)
(2) (3)(4) |
|
70 |
|
External Director |
Augustine Lawlor(1)
(2) (3)(4) |
|
67 |
|
External Director |
(1) |
Member of the Compensation Committee |
(2) |
Member of the Audit Committee |
(3) |
Independent Director under Israeli Law |
(4) |
Independent Director under the Nasdaq Listing Rules |
B. |
Compensation |
Salaries, fees, commissions, and bonuses |
Pension, retirement and similar benefits |
Value of
Options Granted(1) |
||||||||||
(in thousands of U.S. dollars) |
(in thousands of U.S. dollars) |
(in thousands of U.S. dollars)
|
||||||||||
All senior management and directors as a group, consisting of
8 persons |
1,326 |
153 |
1,314 |
(1) |
Consists of amounts recognized as share-based compensation expense
for the year ended December 31, 2022. Assumptions and key variables used in the calculation of such amounts are discussed in Note
10 of our financial statements. |
Name and Position(1)
|
Salary |
Social Benefits(2)
|
Bonuses |
Value of Options Granted (3)
|
All Other Compensation(4)
|
Total |
||||||||||||||||||
(in thousands of U.S. dollars) |
||||||||||||||||||||||||
Ehud Geller,
Chairman |
- |
- |
- |
91 |
150 |
241 |
||||||||||||||||||
Ilan Hadar,
Chief Executive Officer |
321 |
54 |
82 |
621 |
- |
1,078 |
||||||||||||||||||
Eli Hazum
Chief Technology Officer |
- |
- |
- |
91 |
144 |
235 |
||||||||||||||||||
Rita Keynan
Vice President of Pharmaceutical Operations
|
216 |
55 |
44 |
208 |
- |
523 |
||||||||||||||||||
Sigal Aviel
Chief Operating Officer |
233 |
44 |
52 |
28 |
- |
357 |
(1) |
All executive officers listed in the table were employed on a full-time basis during 2022. |
(2) |
“Social Benefits” include payments to the National Insurance Institute,
advanced education funds, managers’ insurance and pension funds, vacation pay and recuperation pay as mandated by Israeli law.
|
(3) |
Consists of amounts recognized as share-based compensation expense
for the year ended December 31, 2022. Assumptions and key variables used in the calculation of such amounts are discussed in Note
10 of our financial statements. |
(4) |
“All Other Compensation” includes chairman of the board of directors' annual fee and directors’
consulting related fees. |
C. |
Board Practices |
● |
at least a majority of the shares of non-controlling shareholders or shareholders
that do not have a personal interest in the approval voted at the meeting are voted in favor (disregarding abstentions); or |
● |
the total number of shares of non-controlling shareholders or shareholders that do
not have a personal interest in the approval voted against the proposal does not exceed 2% of the aggregate voting rights in the company.
|
● |
an employment relationship; |
● |
a business or professional relationship maintained on a regular basis; |
● |
control; and |
● |
service as an office holder, excluding service as a director in a private company
prior to the first offering of its shares to the public if such director was appointed as a director of the private company in order to
serve as an external director following the initial public offering. |
● |
such majority includes at least a majority of the shares held by shareholders who
are non-controlling shareholders and do not have a personal interest in the election of the external director (other than a personal interest
not deriving from a relationship with a controlling shareholder) that are voted at the meeting, excluding abstentions, to which we refer
as a disinterested majority; or |
● |
the total number of shares voted by non-controlling shareholders and by shareholders
who do not have a personal interest in the election of the external director, against the election of the external director, does not
exceed 2% of the aggregate voting rights in the company. |
● |
his or her service for each such additional term is recommended by one or more shareholders
holding at least 1% of the company’s voting rights and is approved at a shareholders meeting by a disinterested majority, where
the total number of shares held by non-controlling, disinterested shareholders voting for such reelection exceeds 2% of the aggregate
voting rights in the company. In such event, the external director so reappointed may not be a Related or Competing Shareholder, as defined
below, or a relative of such shareholder, at the time of the appointment, and is not and has not had any affiliation with a Related or
Competing Shareholder, at such time or during the two years preceding such person’s reappointment to serve an additional term as
external director. The term “Related or Competing Shareholder” means a shareholder proposing the reappointment or a shareholder
holding 5% or more of the outstanding shares or voting rights of the company, provided, that at the time of the reappointment, such shareholder,
the controlling shareholder of such shareholder, or a company controlled by such shareholder, have a business relationship with the company
or are competitors of the company; |
● |
the external director proposed his or her own nomination, and such nomination was
approved in accordance with the requirements described above; |
● |
his or her service for each such additional term is recommended by the board of directors
and is approved at a shareholders meeting by the same majority required for the initial election of an external director (as described
above). |
● |
he or she meets the qualifications for being appointed as an external director, except
for the requirement that the director be an Israeli resident (which does not apply to companies whose securities have been offered outside
of Israel or are listed outside of Israel); and |
● |
he or she has not served as a director of the company for a period exceeding nine
consecutive years, provided that, for this purpose, a break of less than two years in service shall not be deemed to interrupt the continuation
of the service. |
● |
retaining and terminating our independent auditors, subject to the ratification of
the board of directors, and in the case of retention, to that of the shareholders; |
● |
pre-approving of audit and non-audit services and related fees and terms, to be provided
by the independent auditors; |
● |
overseeing the accounting and financial reporting processes of the Company and audits
of our financial statements, the effectiveness of our internal control over financial reporting and making such reports as may be required
of an audit committee under the rules and regulations promulgated under the Exchange Act; |
● |
reviewing with management and our independent auditor our annual and quarterly financial
statements prior to publication or filing (or submission, as the case may be) to the SEC; |
● |
recommending to the board of directors the retention and termination of the internal
auditor, and the internal auditor’s engagement fees and terms, in accordance with the Companies Law as well as approving the yearly
or periodic work plan proposed by the internal auditor; |
● |
reviewing with our general counsel and/or external counsel, as deem necessary, legal
and regulatory matters that could have a material impact on the financial statements; |
● |
identifying irregularities in our business administration, inter alia, by consulting
with the internal auditor or with the independent auditor, and suggesting corrective measures to the board of directors; and |
● |
reviewing policies and procedures with respect to transactions (other than transactions
related to the compensation or terms of services) between the company and officers and directors, or affiliates of officers or directors,
or transactions that are not in the ordinary course of the Company’s business and deciding whether to approve such acts and transactions
if so required under the Companies Law. |
● |
determining whether there are deficiencies or irregularities in the business management
practices of our company, including in consultation with our internal auditor or the independent auditor, and making recommendations to
the board of directors to improve such practices; |
● |
determining the approval process for transactions with a controlling shareholder or
in which a controlling shareholder has a personal interest; |
● |
determining whether to approve certain related party transactions (including transactions
in which an office holder has a personal interest and whether such transaction is extraordinary or material under Companies Law) (see
“— Approval of Related Party Transactions under Israeli Law”); |
● |
where the board of directors approves the working plan of the internal auditor, to
examine such working plan before its submission to the board of directors and proposing amendments thereto; |
● |
examining our internal controls and internal auditor’s performance, including
whether the internal auditor has sufficient resources and tools to dispose of its responsibilities; |
● |
examining the scope of our auditor’s work and compensation and submitting a
recommendation with respect thereto to our board of directors or shareholders, depending on which of them is considering the appointment
of our auditor; and |
● |
establishing procedures for the handling of employees’ complaints as to the
management of our business and the protection to be provided to such employees. |
● |
Officers’ interests are as closely as possible aligned with our interests;
|
● |
The correlation between pay and performance will be enhanced; |
● |
We will be able to recruit and retain top level executives capable of leading us to further business success,
facing the challenges ahead; |
● |
Our officers will be motivated to achieve a high level of business performance without taking unreasonable
risks. Therefore, the variable compensation component may not be based on extreme business performance goals which might potentially impose
unreasonable risks on our officers; and |
● |
An appropriate balance between different compensation elements (e.g., fixed vs. variable, short-term vs.
long-term and cash payments vs. equity-based compensation). |
● |
recommending whether a compensation policy should continue in effect, if the then-current
policy has a term of greater than five years from the company’s initial public offering, or otherwise three years (approval of either
a new compensation policy or the continuation of an existing compensation policy must in any case occur five years from the company’s
initial public offering, or otherwise every three years); |
● |
recommending to the board of directors periodic updates to the compensation policy;
|
● |
assessing implementation of the compensation policy; |
● |
determining whether to approve the terms of compensation of certain office holders
which, according to the Companies Law, require the committee’s approval; and |
● |
determining whether the compensation terms of a candidate for the position of the
chief executive officer of the company needs to be brought to approval of the shareholders according to the Companies Law. |
● |
the responsibilities set forth in the compensation policy; |
● |
reviewing and approving the granting of options and other incentive awards to the
extent such authority is delegated by our board of directors; and |
● |
reviewing, evaluating and making recommendations regarding the compensation and benefits
for our non-employee directors. |
● |
overseeing our corporate governance functions on behalf of the board; |
● |
making recommendations to the board regarding corporate governance issues; |
● |
identifying and evaluating candidates to serve as our directors consistent with the
criteria approved by the board; |
● |
reviewing and evaluating the performance of the board; |
● |
serving as a focal point for communication between director candidates, non-committee
directors and our management; selecting or recommending to the board for selection candidates to the board; and |
● |
making other recommendations to the board regarding affairs relating to our directors.
|
● |
a person (or a relative of a person) who holds more than 5% of the company’s
outstanding shares or voting rights; |
● |
a person (or a relative of a person) who has the power to appoint a director or the
general manager of the company; |
● |
an office holder or director (or a relative of an officer or director) of the company;
or |
● |
a member of the company’s independent accounting firm, or anyone on its behalf.
|
● |
information on the advisability of a given action brought for his or her approval
or performed by virtue of his or her position; and |
● |
all other important information pertaining to these actions. |
● |
refrain from any act involving a conflict of interest between the performance of his
or her duties to the company and his or her other duties or personal affairs; |
● |
refrain from any activity that is competitive with the company; |
● |
refrain from exploiting any business opportunity of the company to receive a personal
gain for himself or herself or others; and |
● |
disclose to the company any information or documents relating to the company’s
affairs which the office holder received as a result of his or her position as an office holder. |
● |
a transaction other than in the ordinary course of business; |
● |
a transaction that is not on market terms; or |
● |
a transaction that may have a material impact on the company’s profitability,
assets, or liabilities. |
● |
an amendment of the articles of association of the company; |
● |
an increase in the company’s authorized share capital; |
● |
a merger; or |
● |
the approval of related party transactions and acts of office holders that require shareholder approval.
|
● |
financial liability imposed on him or her in favor of another person pursuant to a
judgment, including a settlement or arbitrator’s award approved by a court. However, if an undertaking to indemnify an office holder
with respect to such liability is provided in advance, then such an undertaking must be limited to events which, in the opinion of the
board of directors, can be foreseen based on the company’s activities when the undertaking to indemnify is given, and to an amount
or according to criteria determined by the board of directors as reasonable under the circumstances, and such undertaking must detail
the abovementioned foreseen events and amount or criteria; |
● |
reasonable litigation expenses, including attorneys’ fees, incurred by the office holder: (i) as
a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation or proceeding,
provided that (a) no indictment was filed against such office holder as a result of such investigation or proceeding and (b) no
financial liability was imposed upon him or her as a substitute for the criminal proceeding as a result of such investigation or proceeding
or, if such financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent;
and (ii) in connection with a monetary sanction; |
● |
expenses associated with an administrative procedure, as defined in the Israeli Securities
Law, conducted regarding an office holder, including reasonable litigation expenses and reasonable attorneys’ fees; and |
● |
reasonable litigation expenses, including attorneys’ fees, incurred by the office
holder or imposed by a court in proceedings instituted against him or her by the company, on its behalf, or by a third party or in connection
with criminal proceedings in which the office holder was acquitted or as a result of a conviction for an offense that does not require
proof of criminal intent. |
● |
a breach of duty of care to the company or to a third party, including a breach arising out of the negligent
conduct of the office holder; |
● |
a breach of fiduciary duty to the company, to the extent that the office holder acted in good faith and
had a reasonable basis to believe that the act would not prejudice the company; |
● |
a monetary liability imposed on the office holder in favor of a third party; and |
● |
expenses incurred by an office holder in connection with an administrative procedure, including reasonable
litigation expenses and reasonable attorneys’ fees. |
● |
a breach of fiduciary duty, except for indemnification and insurance for a breach of the fiduciary duty
to the company and to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not
prejudice the company; |
● |
a breach of duty of care committed intentionally or recklessly, excluding a breach arising out of the negligent
conduct of the office holder; |
● |
an act or omission committed with intent to derive illegal personal benefit; or |
● |
a fine or forfeit levied against the office holder. |
D. |
Employees. |
E. |
Share Ownership. |
F. |
Disclosure of a Registrant’s Action to Recover Erroneously
Awarded Compensation |
ITEM 7.
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS |
A. |
Major Shareholders |
● |
each of our directors and senior management; |
● |
all of our directors and senior management as a group; and |
● |
each person (or group of affiliated persons) known by us to be the beneficial owner of 5% or more of the
outstanding ordinary shares. |
|
Ordinary Shares Beneficially Owned |
Percentage Owned** |
||||||
Senior Management and Directors |
||||||||
Ilan Hadar(1)
|
294,619 |
2.5 |
% | |||||
Dr. Ehud Geller(2)
|
3,337,250 |
28.6 |
% | |||||
Dr. Sigal Aviel(3)
|
129,291 |
1.1 |
% | |||||
Rita Keynan(4)
|
149,345 |
1.3 |
% | |||||
Prof. Eli Hazum(5)
|
198,882 |
1.7 |
% | |||||
Ellen S. Baron(6)
|
45,000 |
* |
% | |||||
Augustine Lawlor(6)
|
45,000 |
* |
% | |||||
Efi Cohen-Arazi(6)
|
45,000 |
* |
% | |||||
All senior management and directors as a group (8 persons) |
4,244,387 |
36.4 |
% | |||||
More than 5% Shareholders |
||||||||
XT Hi-Tech Investments (1992) Ltd. (7)
|
852,959 |
7.3 |
% | |||||
Medica III Investment group (2)
|
3,337,250 |
28.6 |
% |
* |
Less than 1% |
** |
Based on 11,586,303 ordinary shares outstanding. |
(1) |
Consists of options to purchase 294,619 ordinary shares exercisable at $0.57 per share
and expiring on November 23, 2032. Does not include options to purchase 176,771 ordinary shares exercisable at $0.57 per share and expiring
on November 23, 2032, that vest in more than 60 days from
March 13, 2023. |
(2) |
Consists of 3,337,250 beneficially owned by the Medica III Investment group which
includes Medica III Investments (International) L.P. which holds 1,112,745 ordinary shares, Medica III Investments (Israel) L.P. which
holds 404,455 ordinary shares, Medica III Investments (S.F.) L.P. which holds 439,574 ordinary shares, Medica III Investments (P.F.) L.P.
which holds 236,573 ordinary shares, Medica III Investments (Israel) (B) L.P. which holds 571,429 ordinary shares, and Poalim Medica III
Investments L.P. which holds 527,474 ordinary shares and Dr. Ehud Geller who holds 45,000 ordinary shares exercisable at $4.5. The beneficial
owners under Medica Group are: MCP Opportunity Secondary Program III L.P 10.57%, NYC Police Pension Fund 8.8%, Quantum Partners LDC 13.2%,
Migdal Insurance Company Ltd 8.8%. None of which include individuals who hold more than 5% interest. Medica III Management L.P., an entity
held 50% by Dr. Ehud Geller and 50% by Batsheva Elran, is the managing entity of Medica III Fund. The principal business address
of Medica III Investment is 60C Medinat Hayehudim, Herzliya, 4676670, Israel. Does not include options to purchase 15,000 ordinary shares
approved for issuance to Mr. Geller. Such options are exercisable at $4.50 per share and expiring on February 23, 2031, that vest in more
than 60 days from March 13, 2023. |
(3) |
Consists of options to purchase 129,291 ordinary shares exercisable at a weighted
average exercise price of $0.57 and expiring on November 23, 2032. Does not include options to purchase 46,875 ordinary shares exercisable
at $0.57 per share and expiring on November 23, 2032, that vest in more than 60 days from March 13, 2023. |
(4) |
Consists of options to purchase 149,345 ordinary shares exercisable at $0.57 per share
and expiring on November 23, 2032. Does not include options to purchase 89,607 ordinary shares exercisable at $0.57 per share and expiring
on November 23, 2032, that vest in more than 60 days from March 13, 2023. |
(5) |
Consists of options to purchase 153,882 ordinary shares exercisable at $0.24 per share
and expiring on April 2, 2024 and
options to purchase 45,000 ordinary shares exercisable at $4.50 per share and expiring on February 23, 2031. Does not include options
to purchase 15,000 ordinary shares exercisable at $4.50 per share and expiring on February 23, 2031, that vest in more than 60 days from
March 13, 2023 |
(6) |
Consists of options to purchase 45,000 ordinary shares exercisable at $4.50 per share
and expiring on February 23, 2031. Does not include options to purchase 15,000 ordinary shares exercisable at $4.50 per share and expiring
on February 23, 2031, that vest in more than 60 days from March 13, 2023. |
(7) |
The following information is based on a Schedule 13G filed on January 25, 2022. XT
Hi-Tech Investments (1992) Ltd., or XT Hi-Tech, is a direct wholly owned subsidiary XT Holdings Ltd., of which Orona Investments Ltd.,
or Orona, and Lynav Holdings Ltd., or Lynav, are each the direct owners of one-half of the outstanding ordinary shares. Orona is indirectly
owned 56% by Mr. Udi Angel, who also indirectly owns 100% of the means of control of Orona. Lynav is held 95% by CIBC Bank and Trust Company
(Cayman) Ltd., or CIBC, as trustee of a discretionary trust established in the Cayman Islands. Udi Angel is member of the board of directors
of XT Hi-Tech and has a casting vote with respect to various decisions taken by the board including voting and disposition over shares
held by XT Hi-Tech. The principal business address XT Hi-Tech is 9 Andrei Sakharov St., Haifa, Israel. |
B. |
Related Party Transactions |
C. |
Interests of Experts and Counsel |
ITEM 8.
FINANCIAL INFORMATION. |
A. |
Statements and Other Financial Information. |
B. |
Significant Changes |
ITEM 9.
THE OFFER AND LISTING |
A. |
Offer and Listing Details |
B. |
Plan of Distribution |
C. |
Markets |
D. |
Selling Shareholders |
E. |
Dilution |
F. |
Expenses of the Issue |
ITEM 10.
ADDITIONAL INFORMATION |
A. |
Share Capital |
B. |
Memorandum and Articles of Association |
C. |
Material Contracts |
D. |
Exchange Controls |
E. |
Taxation. |
● |
amortization over an eight-year period of the cost of patents and rights to use a
patent and know-how which were purchased in good faith and are used for the development or advancement of the Industrial Enterprise;
|
● |
deduction over a three-year period of expenses incurred in connection with the issuance and listing of
shares on a stock market; and |
● |
under certain conditions, an election to file tax returns with related Israeli Industrial Companies.
|
● |
owns a Preferred Enterprise, which is defined as an “Industrial Enterprise”
(as defined under the Investment Law) that is classified as either a “Competitive Enterprise” (as defined under the Investment
Law) or a “Competitive Enterprise in the Field of Renewable Energy” (as defined under the Investment Law); |
● |
is controlled and managed from Israel; |
● |
is not a “Family Company,” a “Home Company,” or a “Kibbutz” (collective
community) as defined under the Income Tax Ordinance; |
● |
keeps acceptable books of account and files reports in accordance with the provisions of the Investment
Law and the Income Tax Ordinance; and |
● |
was not, and certain officers of which were not, convicted of certain crimes in the 10 years prior
to the tax year with respect to which benefits are being claimed. |
F. |
Dividends and Paying Agents |
G. |
Statement by Experts |
H. |
Documents on Display |
I. |
Subsidiary Information. |
J. |
Annual Report to Security Holders. |
ITEM 11.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 12.
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES |
A. |
Debt Securities. |
B. |
Warrants and rights. |
C. |
Other Securities. |
D. |
American Depositary Shares |
ITEM 13. DEFAULTS,
DIVIDEND ARREARAGES AND DELINQUENCIES |
ITEM 14. MATERIAL MODIFICATIONS
TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |
ITEM 15. CONTROLS
AND PROCEDURES |
ITEM 16A.
AUDIT COMMITTEE FINANCIAL EXPERT |
ITEM 16B. CODE OF ETHICS |
ITEM 16C. PRINCIPAL ACCOUNTANT FEES
AND SERVICES |
|
Year Ended December 31, |
|||||||
|
2022 |
2021 |
||||||
(USD in thousands) |
||||||||
Audit fees (1) |
107 |
107 |
||||||
Audit-related fees |
5 |
– |
||||||
Tax fees |
- |
– |
||||||
All other fees |
23 |
34 |
||||||
Total |
135 |
152 |
(1) |
The audit fees for the years ended December
31, 2022 and 2021 include professional services rendered in connection with the audit of our annual financial statements and the review
of our interim financial statements, statutory audits of the Company, issuance of consents and assistance with review of documents filed
with the SEC. |
ITEM 16D.
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES |
ITEM 16E. PURCHASES OF EQUITY SECURITIES
BY THE ISSUER AND AFFILIATED PURCHASERS |
ITEM 16F. CHANGE IN REGISTRANT’S
CERTIFYING ACCOUNTANT |
ITEM 16G.
CORPORATE GOVERNANCE |
● |
Shareholder approval. We
will seek shareholder approval for all corporate actions requiring such approval under the requirements of the Companies Law, rather than
seeking approval for corporate actions in accordance with Nasdaq Listing Rule 5635. In particular, under this Nasdaq Listing Rule,
shareholder approval is generally required for: (i) an acquisition of shares or assets of another company that involves the issuance
of 20% or more of the acquirer’s shares or voting rights or if a director, officer or 5% shareholder has greater than a 5% interest
in the target company or the consideration to be received; (ii) the issuance of shares leading to a change of control; (iii) adoption
or amendment of equity compensation arrangements; and (iv) issuances of 20% or more of the shares or voting rights (including securities
convertible into, or exercisable for, equity) of a listed company via a private placement (or via sales by directors, officers or 5% shareholders)
if such equity is issued (or sold) at below the greater of the book or market value of shares. By contrast, under the Companies Law, shareholder
approval is required (subject to certain limited exceptions) for, among other things: (a) transactions with directors concerning
the terms of their service (including indemnification, exemption, and insurance for their service or for any other position that they
may hold at a company), for which approvals of the compensation committee, board of directors, and shareholders are all required; (b) extraordinary
transactions with controlling shareholders of publicly held companies, which require the special approval described below under “Disclosure
of Personal Interests of Controlling Shareholders and Approval of Certain Transactions;” (c) terms of office and employment
or other engagement of our controlling shareholder, if any, or such controlling shareholder’s relative, which require the special
approval described below under “Disclosure of Personal Interests of Controlling Shareholders and Approval of Certain Transactions;”
(d) approval of transactions with Company’s Chief Executive Officer with respect to his or hers compensation, whether in accordance
with the approved compensation policy of the Company or not in accordance with the approved compensation policy of the Company, or transactions
with officers of the Company not in accordance with the approved compensation policy; and (e) approval of the compensation policy
of the Company for office holders. In addition, under the Companies Law, a merger requires approval of the shareholders of each of the
merging companies. |
● |
Nomination of our directors.
Israeli law and our amended articles of association do not require director nominations to be made by a nominating committee of our board
of directors consisting solely of independent directors, as required under the Listing Rules of the Nasdaq Stock Market. We rely on the
exemption available to foreign private issuers under the Nasdaq Listing Rules and follow Israeli law and practice with regard to the process
of nominating directors, in accordance with which directors are recommended by our board of directors for election by our shareholders
(other than directors elected by our board of directors to fill a vacancy). |
● |
Quorum requirement. Under
our amended and restated articles of association and as permitted under the Companies Law, a quorum for any meeting of shareholders shall
be the presence of at least two shareholders present in person, by proxy or by a written ballot, who hold at least 25% of the voting power
of our shares (or if a higher percentage is required by law, such higher percentage) instead of 33 1/3% of the issued share capital required
under the Nasdaq Listing Rules. If within half an hour from the time designated for the meeting a quorum is not present, them will stand
adjourned to the same day in the following week, at the same time and place. If a quorum is not present at the adjourned meeting within
half hour from the time designated for its start, the meeting shall take place with any number of participants. |
● |
Periodic reports. As opposed
to making periodic reports to shareholders and proxy solicitation materials available to shareholders in the manner specified by the Nasdaq
Marketplace Rules, the Companies Law does not require us to distribute periodic reports directly to shareholders, and the generally accepted
business practice in Israel is not to distribute such reports to shareholders but to make such reports available through a public website.
We will only mail such reports to shareholders upon request; and |
● |
Compensation of officers.
We follow Israeli law and practice with respect to the approval of officer compensation. While our compensation committee currently
complies with the provisions of the Nasdaq Listing Rules relating to composition requirements and Israeli law generally requires that
the compensation of the chief executive officer and all other executive officers be approved, or recommended to the board for approval,
by the compensation committee (and in certain instances, shareholder approval is required), Israeli law includes relief from compensation
committee approval in certain instances. For details regarding the approvals required under the Israeli Companies Law and regulation promulgated
thereunder for the approval of compensation of the chief executive officer, all other executive officers and directors, see Item 6C “Directors,
Senior Management and Employees— Board Practices — Approval of Related Party Transactions under Israeli Law — Disclosure
of Personal Interests of an Office Holder and Approval of Certain Transactions”). |
ITEM 16H.
MINE SAFETY DISCLOSURE |
ITEM 17. FINANCIAL STATEMENTS
|
ITEM 18. FINANCIAL STATEMENTS
|
ITEM 19. EXHIBITS.
|
Exhibit No. |
|
Exhibit Description |
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* |
Filed herewith. |
# |
Management contract or compensatory plan. |
|
PAINREFORM LTD. |
| |
|
|
|
|
Date: March 15, 2023 |
By: |
/s/ Ilan Hadar |
|
|
|
Ilan Hadar |
|
|
|
Chief Executive Officer |
|
Page
|
|
(Firm Name: Kesselman & Kesselman / PCAOB ID No. (Firm Name: Brightman Almagor Zohar & Co / PCAOB ID No. |
F-2
|
F-4
|
|
F-5
|
|
F-6
|
|
F-8
|
|
F-9 - F-29
|
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1(b) to the financial statements, the Company has incurred recurring losses and negative cash flows from operations and has an accumulated deficit as of December 31, 2022 that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1(b). The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
We have served as the Company's auditor since 2021.
We have audited the statements of comprehensive loss, changes in convertible preferred shares and shareholders’ equity (deficit), and cash flows of PainReform Ltd. (the "Company") for the year ended December 31, 2020, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the results of operations and its cash flows for the year ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
BALANCE SHEETS
|
U.S. dollars in thousands (except share and per share data)
|
As of December 31,
|
||||||||||||
Note
|
2022
|
2021
|
||||||||||
Assets
|
||||||||||||
Current assets:
|
||||||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
||||||||
Short term deposit
|
|
|
||||||||||
Restricted cash
|
2f
|
|
|
|||||||||
Prepaid clinical trial expenses and deferred clinical trial costs
|
8b
|
|
|
|||||||||
Prepaid expenses and other current assets
|
3
|
|
|
|||||||||
Total current assets
|
|
|
||||||||||
Property and equipment, net
|
|
|
||||||||||
Total assets
|
$
|
|
$
|
|
||||||||
Liabilities and shareholders’ equity
|
||||||||||||
Trade payables
|
$
|
|
$
|
|
||||||||
Employees and related liabilities
|
|
|
||||||||||
Accrued expenses
|
4
|
|
|
|||||||||
Total current liabilities
|
$
|
|
$
|
|
||||||||
Non-current liabilities:
|
||||||||||||
Provision for unrecognized tax positions
|
7f
|
|
|
|||||||||
Total non-current liabilities
|
|
|
||||||||||
Total liabilities
|
$
|
|
$
|
|
||||||||
Commitments
|
8
|
|||||||||||
Shareholders’ Equity:
|
10
|
|||||||||||
Ordinary shares, NIS
and 2021, respectively; Issued and outstanding:
December 31, 2022 and 2021, respectively.
|
$
|
|
$
|
|
||||||||
Additional paid-in capital
|
|
|
||||||||||
Accumulated deficit
|
(
|
)
|
(
|
)
|
||||||||
Total shareholders’ equity
|
|
|
||||||||||
Total liabilities and shareholders’ equity
|
$
|
|
$
|
|
PAINREFORM LTD.
STATEMENTS OF COMPREHENSIVE LOSS
|
U.S. dollars in thousands (except share and per share data)
|
For the Year Ended
December 31, |
||||||||||||||||
Note
|
2022
|
2021
|
2020
|
|||||||||||||
Operating expenses:
|
||||||||||||||||
Research and development expenses
|
11a
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||||
General and administrative expenses
|
11b
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||||
Operating loss
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||
Interest expenses
|
|
|
(
|
)
|
||||||||||||
Other financial income (expenses), net
|
11c
|
|
|
(
|
)
|
(
|
)
|
|||||||||
Loss before taxes
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||
Income tax expenses
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||
Net loss and comprehensive loss
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||||||
Basic and diluted net loss per share
|
2p
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||||
Weighted average number of shares of Ordinary Share used in computing basic and diluted net loss per share
|
|
|
|
PAINREFORM LTD.
STATEMENTS OF CHANGES IN CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS’ EQUITY (DEFICIT)
|
U.S. dollars in thousands (except share data)
|
Convertible preferred shares
(Temporary equity) |
Ordinary Shares
|
Additional
paid-in |
Accumulated
|
Total
shareholders’ |
||||||||||||||||||||||||
Number
|
Amount
|
Number
|
Amount
|
capital
|
deficit
|
equity (deficit)
|
||||||||||||||||||||||
Balance as of January 31, 2020
|
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
||||||||||||||
Conversion of preferred shares into ordinary shares
|
(
|
)
|
(
|
)
|
|
|
|
|
|
|||||||||||||||||||
Conversion of convertible notes into ordinary shares
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Share issuance under Initial Public Offering, net
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Equity classification of a derivative warrant liability (Note 4)
|
-
|
-
|
-
|
|
|
|
|
|||||||||||||||||||||
Share-based compensation to employees
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Share-based compensation to service providers
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Operating lease provided by controlling shareholder
|
-
|
|
-
|
|
|
|
|
|||||||||||||||||||||
Net loss and comprehensive loss
|
-
|
|
-
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||
Balance as of December 31, 2020
|
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
PAINREFORM LTD.
STATEMENTS OF CHANGES IN CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS’ EQUITY (DEFICIT) (Cont.)
|
U.S. dollars in thousands (except share data)
|
Ordinary shares
|
Additional
paid-in |
Accumulated
|
Total
shareholders’ |
|||||||||||||||||
Number
|
Amount
|
capital
|
deficit
|
equity (deficit)
|
||||||||||||||||
Balance as of Jan 1, 2021
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||
Share-based compensation to employees and directors
|
|
|
|
|
|
|||||||||||||||
Share-based compensation to service providers
|
|
|
|
|
|
|||||||||||||||
Shares and warrants issuance - Private Investment in Public Equity ("PIPE"), net
|
|
|
|
|
|
|||||||||||||||
Exercise of warrants
|
|
|
|
|
|
|||||||||||||||
Net loss and comprehensive loss
|
-
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||
Balance as of December 31, 2021
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||
Share-based compensation to employees and directors
|
|
|
|
|
|
|||||||||||||||
Share-based compensation to service providers
|
|
|
|
|
|
|||||||||||||||
Share issuance to service providers
|
|
|
|
|
|
|
||||||||||||||
Net loss and comprehensive loss
|
-
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||
Balance as of December 31, 2022
|
||||||||||||||||||||
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
PAINREFORM LTD.
STATEMENTS OF CASH FLOWS
|
U.S. dollars in thousands
|
For the Year Ended
December 31, |
||||||||||||
2022
|
2021
|
2020
|
||||||||||
Cash flows from operating activities
|
||||||||||||
Net loss
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||||||
Depreciation
|
|
|
( |
)
|
||||||||
Operating lease provided by controlling shareholder
|
|
|
|
|||||||||
Share-based compensation to employees
|
|
|
|
|||||||||
Share-based compensation to service providers
|
|
|
|
|||||||||
Interest expense and amortization of discount on convertible notes
|
|
|
|
|||||||||
Interest income
|
(
|
) |
|
|
||||||||
Revaluation of derivative warrant liability
|
|
|
|
|||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Prepaid expenses and other current assets
|
|
|
(
|
)
|
(
|
)
|
||||||
Trade payables
|
|
(
|
)
|
|
||||||||
Employees, related liabilities and accrued expenses
|
|
|
|
|||||||||
Net cash used in operating activities
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Cash flows from investing activities
|
||||||||||||
Purchase of property and equipment
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Purchase of short-term deposit
|
(
|
)
|
|
|
||||||||
Net cash used in investing activities
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Cash flows from financing activities
|
||||||||||||
Proceeds from exercise of warrants
|
|
|
|
|||||||||
Proceeds from issuance of ordinary shares
|
||||||||||||
under Private Investment in Public Equity
|
|
|
|
|||||||||
Issuance costs
|
|
(
|
)
|
|
||||||||
Proceeds from issuance of ordinary shares under Initial Public Offering, net
|
|
|
|
|||||||||
Net cash provided by financing activities
|
|
|
|
|||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
(
|
)
|
|
|
||||||||
Cash, cash equivalents and restricted cash at the beginning of the year
|
|
|
|
|||||||||
Cash, cash equivalents and restricted cash at the end of the year
|
$
|
|
$
|
|
$
|
|
(*) |
Represents amount less than $1
|
Supplemental cash flow information:
December 31,
|
||||||||||||
2022
|
2021
|
2020
|
||||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
$
|
|
||||||
Restricted cash
|
|
|
|
|||||||||
Total cash, cash equivalents, and restricted cash
|
$
|
|
$
|
|
$
|
|
PAINREFORM LTD.
U.S. dollars in thousands, except share and per share data
NOTE 1:- |
GENERAL
|
a. |
PainReform Ltd. ("the Company") was incorporated and started business operations in November 2007. The Company is a clinical stage specialty pharmaceutical company focused on the reformulation of established therapeutics. The Company’s proprietary extended-release drug-delivery system is designed to provide an extended period of post-surgical pain relief without the need for repeated dose administration while reducing the potential need for the use of opiates.
|
b. |
Liquidity
|
c. |
The Company effected a
|
PAINREFORM LTD.
NOTES TO FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
NOTE 1:- |
GENERAL (Cont.)
|
d. |
In December 2019, an outbreak of a novel coronavirus disease, or COVID-19, was first identified and began to spread across the globe and, in March 2020, the World Health Organization declared it a pandemic. This contagious disease has spread across the globe and is impacting economic activity and financial markets worldwide. While the spread of COVID-19 has not yet materially impacted the Company's operations nor affected management’s judgment and assumptions at the end of 2022, 2021 and 2020, the Company's previously anticipated timeline for its planned trials has been impacted by COVID-19, particularly in the manufacturing process. The extent to which COVID-19 continues to impact the Company's development efforts will depend on future developments, which are highly uncertain and cannot be predicted, including the actions to contain COVID-19 or treat its impact, among others.
|
e. |
U.S. and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the start of the military conflict between Russia and Ukraine. In February 2022, Russia launched a full-scale military invasion of Ukraine. Although the length and impact of the ongoing military conflict is highly unpredictable, the conflict in Ukraine could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets. Additionally, Russia’s prior annexation of Crimea, recent recognition of two separatist republics in the Donetsk and Luhansk regions of Ukraine and subsequent military interventions in Ukraine have led to sanctions and other penalties being levied by the United States, European Union and other countries against Russia, Belarus, the Crimea Region of Ukraine, the so-called Donetsk People’s Republic, and the so-called Luhansk People’s Republic, including agreement to remove certain Russian financial institutions from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment system. Additional potential sanctions and penalties have also been proposed and/or threatened. Russian military actions and the resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets, potentially making it more difficult for us to obtain additional funds. Any of the abovementioned factors could affect our business, prospects, financial condition, and operating results. The extent and duration of the military action, sanctions and resulting market disruptions are impossible to predict.
|
f. |
The continued listing standards of Nasdaq require, among other things, that the minimum bid price of a listed company’s stock be at or above $1.00. If the closing minimum bid price is below $1.00 for a period of more than 30 consecutive trading days, the listed company will fail to comply with Nasdaq’s listing rules and, if it does not regain compliance within the grace period, will be subject to delisting. As previously reported, on August 16, 2022, the Company received a notice from the Nasdaq Listing Qualifications Department notifying us that for 30 consecutive trading days, the bid price of our ordinary shares had closed below the minimum $1.00 per share requirement. In accordance with Nasdaq’s listing rules, the Company were afforded a grace period of 180 calendar days, or until February 6, 2023, to regain compliance with the bid price requirement. In order to regain compliance, the bid price of ordinary shares must close at a price of at least $1.00 per share for a minimum of 10 consecutive trading days. On February 7, 2023, Nasdaq notified us that the Company were eligible for a second 180 day compliance period. If at anytime before August 7, 2023, the bid price of our ordinary shares closes at or above $1 per share for a minimum of 10 consecutive trading days, the Company will regain compliance with the listing standards of Nasdaq. If the Company fail to regain compliance by August 7, 2023, our ordinary shares will be subject to delisting.
|
PAINREFORM LTD.
NOTES TO FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
NOTE 1:- |
GENERAL (Cont.)
|
g. |
The Company report our financial results in U.S. dollars. A portion of research and development and general and administrative expenses of our Israeli operations are incurred in New Israeli Shekel ("NIS"). As a result, the Company is exposed to exchange rate risks that may materially and adversely affect our financial results. If the NIS appreciates against the U.S. dollar, or if the value of the NIS decline against the U.S. dollar, at a time when the rate of inflation in the cost of Israeli goods and services exceed the rate of decline in the relative value of the NIS, then the U.S. dollar-denominated cost of our operations in Israel would increase and our results of operations could be materially and adversely affected. Inflation in Israel compounds the adverse impact of a devaluation of the NIS against the U.S. dollar by further increasing the amount of our Israeli expenses. Israeli inflation may also (in the future) outweigh the positive effect of any appreciation of the U.S. dollar relative to the NIS, if, and to the extent that, it outpaces such appreciation or precedes such appreciation. The Israeli rate of inflation did not have a material adverse effect on our financial condition during 2022 ,2021 and 2020. Given our general lack of currency hedging arrangements to protect us from fluctuations in the exchange rates of the NIS in relation to the U.S. dollar (and/or from inflation of such non-U.S. currencies), the Company may be exposed to material adverse effects from such movements. the Company cannot predict any future trends in the rate of inflation in Israel or the rate of devaluation (if any) of the U.S. dollar against the NIS.
|
h. |
In April 2022, the Company's board of directors decided to increase the number of reserved Ordinary Shares under the 2019 PainReform Option Plan (the “2019 Plan”) by an additional amount of
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES
|
a. |
Basis of presentation:
|
|
b. |
Use of estimate in preparation of financial statements:
|
PAINREFORM LTD.
NOTES TO FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
c. |
Financial statements in United States dollars:
|
d. |
Cash and cash equivalents:
|
e. |
Short term deposit:
|
f. |
Restricted cash:
|
g. |
Fair Value Measurements:
|
PAINREFORM LTD.
NOTES TO FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
h. |
Property and equipment, net:
|
%
|
||||
Computers, software and electronic equipment
|
|
|||
Furniture and office equipment
|
|
i. |
Research and development expenses:
|
j. |
Employee severance benefits:
|
k. |
Legal and other contingencies:
|
PAINREFORM LTD.
NOTES TO FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
l. |
Income taxes:
|
m. |
Concentrations of credit risk:
|
PAINREFORM LTD.
NOTES TO FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
n. |
Convertible notes:
|
o. |
Derivative warrant liability
|
p. |
Basic and diluted loss per share:
|
Year ended
December 31, |
||||||||||||
2022
|
2021
|
2020
|
||||||||||
Numerator:
|
||||||||||||
Net loss applicable to shareholders of ordinary shares
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||
Denominator:
|
||||||||||||
Shares of Ordinary Share and restricted shares used in computing basic and diluted net loss per share |
|
|
|
|||||||||
Net loss per share of ordinary share, basic and diluted
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
PAINREFORM LTD.
NOTES TO FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
q. |
Share-based compensation:
|
r. |
Deferred offering costs
|
The Company has one operating and reportable segment. An operating segment is defined as a component that engages in business activities whose operating results are reviewed by the chief operating decision maker, who is the Company’s Chief Executive Officer, for the purpose of assessing performance and allocating resources and for which discrete financial information is available.
All of the Company's leases are classified as short-term. Lease expense for lease payments is recognized on a straight-line basis over the lease term in general and administrative (Note 8a).
PAINREFORM LTD.
NOTES TO FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
u. |
Recently adopted accounting pronouncement
|
v. |
Recently Issued Accounting Pronouncements Not Yet Adopted
|
NOTE 3:-
|
PREPAID EXPENSES AND OTHER CURRENT ASSETS
|
December 31,
|
||||||||
2022
|
2021
|
|||||||
Receivables from governmental authorities
|
$
|
|
$
|
|
||||
Prepaid expenses
|
|
|
||||||
Other
|
|
|
||||||
$
|
|
$
|
|
NOTE 4:- |
ACCURUED EXPENSES
|
December 31,
|
||||||||
2022
|
2021
|
|||||||
Directors’ fees
|
$
|
|
$
|
|
||||
Manufacturing expenses
|
|
|
||||||
Advisors and legal expenses
|
|
|
||||||
$
|
|
$
|
|
PAINREFORM LTD.
NOTES TO FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
NOTE 5:- |
FAIR VALUE MEASUREMENTS
|
September 3,
|
December 31
|
|||||||
2020
|
2019
|
|||||||
Exercise price
|
$
|
|
$
|
|
||||
Expected volatility
|
|
%
|
|
%
|
||||
Risk free rate
|
|
%
|
|
%
|
||||
Expected life (years)
|
|
|
||||||
Dividend yield
|
|
|
NOTE 6:- |
CONVERTIBLE NOTES
|
a. |
From 2014 until 2019, the Company issued convertible notes in the total principal amount of $
|
Concurrent with the closing of the IPO, all of the Company’s convertible notes (inclusive of accrued interest on all outstanding notes) were converted into
b. |
In August and December 2019, the Company issued
|
PAINREFORM LTD.
NOTES TO FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
NOTE 6:- |
CONVERTIBLE NOTES (Cont.)
|
c. |
On December 9, 2019, in connection with the 2019 Convertible Notes, the Company issued to the placement agent in the offering described above warrants (the “Agents' Warrants”) to purchase an aggregate of
|
NOTE 7:- |
TAXES ON INCOME
|
a. |
Tax rates applicable to the Company:
|
b. |
Net operating loss carry forward:
|
c. |
As of December 31, 2022, the Company had final tax assessments for tax years prior to and including the tax year ended December 31, 2016.
|
d. |
Deferred income taxes:
|
December 31,
|
||||||||
2022
|
2021
|
|||||||
Net operating loss carry forward
|
$
|
|
$
|
|
||||
Research and development expenses
|
|
|
||||||
Other
|
|
|
||||||
Less: Valuation allowance
|
(
|
)
|
(
|
)
|
||||
Net deferred tax asset
|
$
|
|
$
|
|
PAINREFORM LTD.
NOTES TO FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
NOTE 7:- |
TAXES ON INCOME (Cont.)
|
e.
|
Reconciliation of theoretical tax expenses to actual expenses
|
f. |
Uncertain tax positions:
|
December 31,
|
||||||||||||
2022
|
2021
|
2020
|
||||||||||
Opening balance
|
$
|
|
$
|
|
$
|
|
||||||
Tax positions taken in the current year
|
|
|
||||||||||
Interest and Exchange difference
|
|
|
|
|||||||||
Closing balance
|
$
|
|
$
|
|
$
|
|
PAINREFORM LTD.
NOTES TO FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
NOTE 8:- |
COMMITMENTS:
|
a. |
During the year ended December 31, 2020, the Company was party to a lease agreement with a related party for an annual fee of $
|
b. |
On November 13, 2020, and December 3, 2020, the Company entered into a Master Clinical Research Organization Agreement (the “First Agreement”) and a Master Clinical Trial Agreement (the “Second Agreement”) with Lotus Clinical Research (“Lotus”) as the Company's clinical research organization.
|
PAINREFORM LTD.
NOTES TO FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
NOTE 9:- |
TEMPORARY EQUITY
|
Convertible Preferred Shares - Series A
|
||||||||||||||||
Shares
Authorized |
Shares
Issued and Outstanding |
Carrying
Value |
Liquidation
Preference |
|||||||||||||
As of December 31, 2019
|
|
|
$
|
|
$
|
|
NOTE 10:- |
SHAREHOLDERS’ EQUITY
|
a. |
Ordinary shares:
|
b. |
Shares activity:
|
1. |
On July 6, 2020, pursuant to the Company’s shareholders approval, the Company effected a
|
2. |
In addition, on the IPO closing date, the Company granted to the underwriters of the IPO warrants to purchase
As part of the IPO, the Company granted the IPO underwriters an over-allotment to purchase up to
On October 5, 2020 the underwriters exercised their over-allotment option and were issued warrants to purchase
|
PAINREFORM LTD.
NOTES TO FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
NOTE 10:- |
SHAREHOLDERS’ EQUITY (Cont.)
|
3. |
On March 11, 2021, the Company issued to certain institutional investors (the “Purchasers”)
On July 22, 2021, as a result of an exercise of warrants to purchase
In connection with the private placement, the Company also entered into a Registration Rights Agreement, dated as of March 8, 2021, with the Purchasers (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, the Company filed a registration statement (the “Registration Statement”), with the SEC to register the resale of the ordinary shares and the Ordinary Shares issuable upon exercise of the warrants. The Registration Statement was declared effective on April 9, 2021.
The Company paid the placement agents of the private placement a cash placement fee equal to $
|
4. |
In April 2022, the Company issued
|
c. |
Warrants and warrants units:
|
Type
|
Issuance Date
|
Number of warrants
|
Exercise price
|
Exercisable through
|
August 2019 warrants
|
|
|
$
|
|
December 2019 warrants
|
|
|
$
|
|
Warrants to underwriters
|
|
|
$
|
|
Warrants to underwriters
|
|
|
$
|
|
IPO warrants
|
|
|
$
|
|
PIPE warrants
|
|
|
$
|
|
Warrants to PIPE placement agent
|
|
|
$
|
|
TOTAL
|
|
|
|
|
PAINREFORM LTD.
NOTES TO FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
NOTE 10:- |
SHAREHOLDERS’ EQUITY (Cont.)
|
d. |
Share-based compensation:
|
1. |
The 2008 Plan
|
On August 7, 2008, the Board of Directors approved the adoption of the 2008 Share Option Plan (the “2008 Plan”). The 2008 Plan has expired, and no additional grants may be made.
As a result of the Modification, (A)
The intrinsic value of share options outstanding and exercisable as of December 31, 2022 was $
|
2. |
The 2019 Plan
|
On July 2, 2019, the Board of Directors approved the adoption of the 2019 Plan. Under the 2019 Plan, the Company may grant its officers, directors, employees and consultants share options of the Company. Each share option granted shall be exercisable at such times and terms and conditions as the Board of Directors may specify in the applicable share option agreement, provided that no share option will be granted with a term in
Upon the adoption of the 2019 Plan, the Company reserved for issuance
On February 23, 2021, the shareholders of the Company approved the grant of options to purchase an aggregate of
In addition, the unrecognized compensation cost as of the date of Modification will be recognized over the vesting period of the new options. As a result, an amount of
In April 2022, the Company’s board of directors approved the grant of options to purchase
|
PAINREFORM LTD.
NOTES TO FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
NOTE 10:- |
SHAREHOLDERS’ EQUITY (Cont.)
|
2. |
The 2019 Plan (Cont.)
|
Modification of share-based compensation
On November 23, 2022 ("the commencement date"), the Company’s board of directors approved: (1) the cancellation of certain outstanding options granted to employees in September 2019 (which were fully vested), November 2020, January 2021, May 2021 and April 2022, and the grant of a greater number of replacement options thereof under the new terms with a lower exercise price of US $
As a result of the Modification, (A)
The New Options vest and become exercisable under the following schedule: 50% of the shares covered by the options are immediately vesting on the commencement date determined by the administrator (and in the absence of such determination, the date on which such options were granted), and
The Modification was considered as a Type I modification. The total incremental fair value of these options amounted to $
In
addition, the unrecognized compensation cost as of the date of Modification will be recognized over the vesting period of the new
options. As a result, an amount of
As of December 31, 2022, the Company had
The intrinsic value of share options outstanding as of December 31, 2022 was $
|
PAINREFORM LTD.
NOTES TO FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
NOTE 10:- |
SHAREHOLDERS’ EQUITY (Cont.)
|
3. |
The following tables summarizes information about options granted to employees and directors:
The 2008 Plan
Share options outstanding and exercisable to employees and directors under the 2008 Plan are as follows:
|
|
Number of
options
|
Weighted
average
exercise
price
|
Weighted
average
remaining
contractual
life
|
|||||||||
USD | ||||||||||||
Options outstanding at beginning of year
|
|
$
|
|
|
||||||||
Changes during the year:
|
||||||||||||
Options granted
|
-
|
|
|
|||||||||
Options exercised
|
-
|
|
|
|||||||||
Options forfeited
|
-
|
|
|
|||||||||
Options outstanding at end of year
|
|
$
|
|
|
||||||||
Options exercisable at end of year
|
|
$
|
|
|
The 2019 Plan
Share options outstanding and exercisable to employees and directors under the 2019 Plan are as follows:
|
|
Number of
options
|
Weighted
average
exercise
price
|
Weighted
average
remaining
contractual
life
|
|||||||||
USD | ||||||||||||
Options outstanding at beginning of year
|
|
$
|
|
|
||||||||
Changes during the year:
|
|
|
|
|||||||||
Options granted
|
|
|
|
|||||||||
Options cancelled
|
|
|
|
|||||||||
Options exercised
|
|
|
-
|
|||||||||
Options forfeited
|
|
|
|
|||||||||
Options outstanding at end of year
|
|
$
|
|
|
||||||||
Options exercisable at end of year
|
|
$
|
|
|
PAINREFORM LTD.
NOTES TO FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
NOTE 10:- |
SHAREHOLDERS’ EQUITY (Cont.)
|
4. |
The following table sets forth the assumptions that were used in determining the fair value of options granted to employees in 2019 plan for the years ended on December 31, 2022 and 2021:
|
2022*
|
|
2021*
|
|
|||||
Expected term
|
|
|
||||||
Risk-free interest rates
|
|
%
|
|
%
|
||||
Volatility
|
|
%
|
|
%
|
||||
Dividend yield
|
|
|
||||||
Exercise price
|
$
|
|
$
|
|
* The assumptions presented above are the original assumptions used to determine the options fair value at the date of the grants. The assumptions used to determine the incremental value of the options at the modification date are as presented at the Company's options valuation.
The Company recognized $
|
5. |
In August 2020, the Company entered into an IR/PR service agreement (the “Service Agreement”) with Crescendo Communications, LLC (“Crescendo”), for a period of two years, commencing immediately after the IPO closing date, and in consideration for
In May 2022, following discussions between the Company and Crescendo regarding the number of shares to which he is entitled, the Company's board of Directors approved the grant of an additional
|
PAINREFORM LTD.
NOTES TO FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
NOTE 11:- |
SELECTED STATEMENTS OF OPERATIONS DATA
|
a. |
Research and development expenses:
|
Year ended December 31,
|
||||||||||||
2022
|
2021
|
2020
|
||||||||||
Subcontractors and consultants
|
$
|
|
$
|
|
$
|
|
||||||
Payroll and related expenses
|
|
|
|
|||||||||
Share-based compensation expense
|
|
|
|
|||||||||
Clinical trials expenses
|
|
|
|
|||||||||
Other expenses
|
|
|
|
|||||||||
$
|
|
$
|
|
$
|
|
b. |
General and administrative expenses:
|
Year ended December 31,
|
||||||||||||
2022
|
2021
|
2020
|
||||||||||
Professional services
|
$
|
|
$
|
|
$
|
|
||||||
Payroll and related expenses
|
|
|
|
|||||||||
D&O insurance
|
|
|
|
|||||||||
Rent and office maintenance
|
|
|
|
|||||||||
Share-based compensation expense
|
|
|
|
|||||||||
Other expenses
|
|
|
|
|||||||||
$
|
|
$
|
|
$
|
|
c. |
Other financial income (expenses), net: |
|
Year ended December 31,
|
||||||||||||
2022
|
2021
|
2020
|
||||||||||
Interest income
|
|
|
|
|||||||||
Issuance expenses
|
|
|
(
|
)
|
||||||||
Bank fees
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Change in fair value of derivative warrant liability
|
|
|
(
|
)
|
||||||||
Exchange rate differences
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||
Total other financial expenses, net
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
PAINREFORM LTD.
NOTES TO FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
NOTE 12:- |
RELATED PARTIES BALANCES AND TRANSACTIONS
|
a. |
During the year ended December 31, 2019 the Company issued convertible notes in the amount of $
|
b. |
Starting in January 2014, the Company sub-leased office space and received management services from Zori Medica 2010 Ltd., a private company affiliated with Medica Venture Partners, the controlling shareholder of the Company. The Company was subject to an annual rental fee of $
|
c. |
On January 26, 2020, the Company’s Board of Directors approved a one-time immediate payment of $
|
d. |
On February 23, 2021, the shareholders of the Company approved the grant of options to purchase an aggregate of
|
Year ended December 31,
|
||||||||||||
2022
|
2021
|
2020
|
||||||||||
Employees accrued salaries and bonuses
|
$
|
|
$
|
|
$
|
|
||||||
Directors accrued fees expenses
|
|
|
|
|||||||||
$
|
|
$
|
|
$
|
|
Year ended December 31,
|
||||||||||||
2022
|
2021
|
2020
|
||||||||||
Amounts charged to:
|
||||||||||||
Research and development expenses
|
$
|
|
$
|
|
$
|
|
||||||
General and administrative expenses
|
|
|
|
|||||||||
Interest expense on convertible notes
|
$
|
|
$
|
|
$
|
|
NOTE 13:- |
SUBSEQUENT EVENTS
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has
materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely
affect the company’s ability to record, process, summarize and report financial information; and
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial
reporting.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has
materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely
affect the company’s ability to record, process, summarize and report financial information; and
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial
reporting.
|
/s/ Kesselman & Kesselman
|
Certified Public Accountants (Isr.)
|
A member of PricewaterhouseCoopers International Limited
|
Tel-Aviv, Israel
|
March 15, 2023
|
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BALANCE SHEETS (Parenthetical) $ in Thousands |
Dec. 31, 2022
₪ / shares
shares
|
Dec. 31, 2021
₪ / shares
shares
|
---|---|---|
Statement of Financial Position [Abstract] | ||
Ordinary shares, par value (in New Shekels per share) | (per share) | ₪ 0.03 | ₪ 0.03 |
Ordinary shares, shares authorized | 26,666,667 | |
Ordinary shares, shares issued | 10,634,166 | 10,482,056 |
Ordinary shares, shares outstanding | 10,634,166 | 10,482,056 |
STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Operating expenses: | |||
Research and development expenses | $ (4,422) | $ (2,860) | $ (354) |
General and administrative expenses | (4,447) | (4,348) | (1,317) |
Operating loss | (8,869) | (7,208) | (1,671) |
Interest expenses | 0 | 0 | (987) |
Other financial income (expenses), net | 86 | (32) | (1,175) |
Loss before taxes | (8,783) | (7,240) | (3,833) |
Tax expenses | (9) | (6) | (220) |
Net loss and comprehensive loss | $ (8,792) | $ (7,246) | $ (4,053) |
Basic and diluted net loss per share basic (in dollars per share) | $ (0.82) | $ (0.74) | $ (1.25) |
Basic and diluted net loss per share diluted (in dollars per share) | $ (0.82) | $ (0.74) | $ (1.25) |
Shares of ordinary share and restricted shares used in computing basic net loss per share | 10,661,170 | 9,812,234 | 3,243,943 |
Shares of ordinary share and restricted shares used in computing diluted net loss per share | 10,661,170 | 9,812,234 | 3,243,943 |
GENERAL |
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Compensation Related Costs [Abstract] | |||||||||||||||||||||||||||
GENERAL |
Since its inception, the Company has devoted substantially all its efforts to research and development, clinical trials, and capital raising activities. The Company is still in its development and clinical stage and has not yet generated revenues.
The Company has incurred significant losses and negative cash flows from operations and incurred losses of $8,792, $7,246 and $4,053 for the years ended December 31, 2022, 2021 and 2020, respectively. During the years ended December 31, 2022, 2021 and 2020, the Company had negative operating cash outflows of $6,459, $6,553, and $2,557, respectively. As of December 31, 2022, the Company’s accumulated deficit was $32,519. The Company has funded its operations to date primarily through equity financing and has cash on hand (including short term deposits and restricted cash) of $10,191 as of December 31, 2022.
The Company expects to continue incurring losses, and negative cash flows from operations until its product, PRF-110, reaches commercial profitability. As a result of the initiation of the Company's Phase III clinical trial in March 2023, along with its current cash position, the Company does not have sufficient resources to fund operations until the end of its phase III study, nor to continue as a going concern for at least one year from the issuance date of these financial statements.
Management's plans include continued raising capital through sale of additional equity securities, debt or capital inflows from strategic partnerships. There are no assurances, however, that the Company's will successfully obtain the level of financing needed for its operations. If the Company is unsuccessful in raising capital, it may need to reduce activities, curtail, or abandon some or all of its operations, which could materially harm the Company’s business, financial condition and results of operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
These financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business and do not include any adjustments that might result from the outcome of this uncertainty.
On March 11, 2021, the Company closed a private placement of 1,304,346 ordinary shares, par value NIS 0.03 per share (the “Ordinary Shares”) and accompanying warrants to purchase an aggregate of up to 652,173 Ordinary Shares at a combined purchase price of $4.60 per share and accompanying warrant resulting in gross proceeds of $6,000. The warrants are exercisable immediately at an exercise price of $4.60 per share and expire five and a half years from the issuance date.
On July 22, 2021, the Company issued 419,673 Ordinary Shares upon exercise of warrants for consideration totalling $1,930 (Note 10).
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SIGNIFICANT ACCOUNTING POLICIES |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SIGNIFICANT ACCOUNTING POLICIES |
The financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”).
The significant accounting policies described below have been applied consistently in relation to all the periods presented, unless otherwise stated.
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company evaluates on an ongoing basis its assumptions. Estimates are primarily used for, but not limited to, valuation of share-based compensation, capitalization of software costs, valuation allowance and uncertain tax positions. The Company’s management believes that the estimates, judgments, and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates.
The Company’s functional currency is the U.S. dollar (“dollar” or “$”) since the dollar is the currency of the primary economic environment in which the Company has operated and expects to continue to operate in the foreseeable future. Transactions and balances originally denominated in U.S. dollars are presented at their original amounts. Balances in non-U.S. dollar currencies are translated into U.S. dollars using historical and current exchange rates for non-monetary and monetary balances, respectively. For non-U.S. dollar transactions and other items in the statements of income (indicated below), the following exchange rates are used: (i) for transactions - exchange rates at transaction dates or average exchange rates; and (ii) for other items (derived from non-monetary balance sheet items such as depreciation) - historical exchange rates. Currency transaction gains and losses are presented in financial income or expenses, as appropriate.
Cash equivalents are short-term highly liquid investments that are readily convertible to cash with original maturities of three months or less at acquisition.
Bank deposits with original maturity dates of more than three months but at balance sheet date are less than one year are included in short-term deposits. The fair value of bank deposits approximates the carrying value since they bear interest at rates close to the prevailing market rates.
As of December 31, 2022 and 2021, the Company’s restricted cash consisted of immaterial bank deposits that were denominated in NIS. Restricted deposits are presented at cost including accrued interest. These bank deposits are used as securities for the Company's credit cards.
The carrying values of Company’s financial assets and liabilities, including cash and cash equivalents, restricted cash, other current assets, trade payables and other accounts payable approximate their fair value due to the short-term maturity of these instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. Assets and liabilities recorded at fair value in the financial statements are categorized as follows:
Level 1 - Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;
Level 2 - Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable inputs for similar assets or liabilities. These include quoted prices for identical or similar assets or liabilities in active markets and quoted prices for identical or similar assets of liabilities in markets that are not active;
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
As of December 31, 2022, and 2021 no assets or liabilities are measured in fair value.
Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets at the following rates:
Research and development costs include costs of payroll and related expenses of employees, subcontractors and consultants and other costs related to the Company's operation of its planned clinical trials. Research and development expenses are charged to the statements of comprehensive loss as incurred.
Clinical trial costs are a significant component of research and development expenses and include costs associated with third-party contractors. The Company outsources its clinical trial activities utilizing external entities such as clinical research organizations, independent clinical investigators, and other third-party service providers to assist the Company with the execution of its clinical trials. Clinical trial costs are expensed as incurred.
The Company is required to make severance payments upon dismissal of an Israeli employee or upon termination of employment in certain circumstances.
In accordance with the current employment terms with all of its employees (Section 14 of the Israeli Severance Pay Law, 1963) located in Israel, the Company makes regular deposits with certain insurance companies for accounts controlled by each applicable employee in order to secure the employee’s full retirement benefit and severance obligation. The Company is relieved from any severance pay liability with respect to each such employee after it makes the payments on behalf of the employee. The liability accrued in respect of these employees and the amounts funded, as of the respective agreement dates, are not reflected on the Company’s balance sheet, as the amounts funded are not under the control and management of the Company and the pension or severance pay risks have been irrevocably transferred to the applicable insurance companies. The amounts of severance payment expenses were $60, $58 and $13 for the years ended December 31, 2022, 2021 and 2020, respectively.
Certain conditions may exist as of the date of the financial statements, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management assesses such contingent liabilities, if any, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s management evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought. Management applies the guidance in ASC 450-20, “Loss Contingencies” when assessing losses resulting from contingencies. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be reasonable estimated, then the estimated liability is recorded as accrued expenses in the Company’s financial statements. Legal costs incurred in connection with loss contingencies are expensed as incurred.
The Company accounts for income taxes in accordance with ASC 740, “Income Taxes”. ASC 740 prescribes the use of the asset and liability method whereby deferred tax asset and liability account balances are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value if it is more likely than not that a portion or all the deferred tax assets will not be realized, based on the weight of available positive and negative evidence. As of December 31, 2022, and 2021, the Company had a full valuation allowance on its deferred tax assets. Deferred tax liabilities and assets are classified as non-current in accordance with ASU 2015‑17.
The Company implements a two-step approach to recognize and measure uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax positions as the largest amount that is more than 50% (cumulative basis) likely to be realized upon ultimate settlement. As of December 31, 2022 and 2021, the total gross amount of provision for unrecognized tax positions was $243 and $234, respectively (Note 7f). The Company recognizes interest and penalties, if any, related to unrecognized tax positions in tax expenses and exchange differences in financial expense.
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents and restricted cash. Cash and cash equivalents and restricted cash are invested in a major bank in Israel and the United States.
Management believes that the banks that hold the Company’s cash, cash equivalent and restricted cash are financially sound and, accordingly, minimal credit risk exists with respect to this cash, cash equivalent and restricted cash.
The Company relies, and expects to continue to rely, on a single supplier to manufacture supplies and raw materials for its clinical trial. This clinical trial could be adversely affected by a significant interruption in these manufacturing services or the availability of raw materials.
Proceeds from the sale of notes with a conversion feature are allocated to equity based on the intrinsic value of such conversion feature (if any) in accordance with ASC 470-20 “Debt with Conversion and Other Options”, with a corresponding discount on the notes recorded in liabilities which is amortized in finance expense over the term of the notes. Convertible notes with convertible features that are determined to not be beneficial are allocated entirely to liabilities.
Financial equity instruments that do not meet the US GAAP criteria for equity classification are classified as a liability at fair value and are adjusted to fair value at each reporting period. Changes in fair value are recognized in the Company’s statements of comprehensive loss in accordance with ASC 815, “Accounting for Derivative Financial Instruments”.
Basic loss per share is computed on the basis of the net loss for the period divided by the weighted average number of Ordinary Shares and vested Ordinary Shares issuable for little or no further consideration outstanding during the period. Diluted loss per share is based upon the weighted average number of ordinary shares and of potential Ordinary Shares outstanding when dilutive. Potential Ordinary Shares include outstanding stock options, restricted shares and warrants, which are included under the treasury stock method when dilutive.
For the years ended December 31, 2022, 2021 and 2020, all outstanding share options, restricted shares, convertible notes, and warrants have been excluded from the calculation of the diluted net loss per share as all such securities are anti-dilutive for all years presented.
The loss and the weighted average number of shares used in computing basic and diluted net loss per share is as follows:
Share-based compensation to employees and consultants is accounted for in accordance with ASC 718, “Compensation - Share Compensation” (“ASC 718”), which requires estimation of the fair value of share-based payment awards on the date of grant. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service period using the strait line method. The Company has elected to recognize forfeitures, as incurred. The Company grants share (“Share Based Compensation”) to its employees, officers, directors, and non-employees in consideration for services rendered (Note 10).
The Company accounts for Share-Based Compensation awards classified as equity awards using the grant-date fair value method. The fair value at grant-date of the issued equity award is recognized as an expense on a straight-line basis over the requisite service period. The fair value of each share option granted is estimated using the Black-Scholes option pricing model, which requires a number of assumptions, of which the most significant are the expected share price, volatility, and the expected option term. Expected volatility was calculated based on comparable public companies in the same industry. The expected share option term is calculated for share options granted using the “simplified” method when the required conditions are met. The risk-free interest rate is based on the yield from U.S. treasury bonds with an equivalent term.
The expected dividend yield assumption is based on the Company’s historical experience and expectation of no future dividend pay outs. The Company has historically not paid cash dividends and has no foreseeable plans to pay cash dividends in the future.
The Company elected to recognize Share-Based Compensation cost for awards with only service conditions that have a graded vesting schedule using the straight-line method based on the multiple-option award approach.
The Company capitalizes certain legal and other third-party fees that are directly related to the Company’s in-process equity financings until such financings are consummated. After the consummation of such equity financings, these costs are recorded as a reduction of the respective gross proceeds. Should a planned equity financing be abandoned, terminated, or significantly delayed, the deferred offering costs are written off to operating expenses. As of December 31, 2022 and 2021, there were no deferred offering costs.
s. Segment Reporting
The Company has one operating and reportable segment. An operating segment is defined as a component that engages in business activities whose operating results are reviewed by the chief operating decision maker, who is the Company’s Chief Executive Officer, for the purpose of assessing performance and allocating resources and for which discrete financial information is available. t. Leases
In accordance with Accounting Standards Codification (“ASC”) 842, Leases, the Company determines whether an arrangement is or contains a lease at the inception of the arrangement and whether such a lease is classified as a financing lease or operating lease at the commencement date of the lease. The Company elected not to recognize the right-of-use assets and lease liabilities for short-term leases which it defines as leases with lease terms. The company defines a short-term lease if a lease has a lease term of 12 months or less and does not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise.
All of the Company's leases are classified as short-term. Lease expense for lease payments is recognized on a straight-line basis over the lease term in general and administrative (Note 8a).
In August 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). This guidance simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity. The Company adopted ASU 2020-06 on January 1, 2022 and it did not have a material impact on the Company’s financial statements and disclosures.
Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements.
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PREPAID EXPENSES AND OTHER CURRENT ASSETS |
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PREPAID EXPENSES AND OTHER CURRENT ASSETS |
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ACCURUED EXPENSES |
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Accrued Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCURUED EXPENSES |
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FAIR VALUE MEASUREMENTS |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS |
During the year ended December 31, 2019, the Company issued warrants related to its convertible notes (refer to Note 6(b)). As of December 31, 2019, the warrants did not meet the US GAAP criteria for equity classification, and accordingly were classified as a derivative warrant liability and were measured at fair value on the issuance date and as of December 31, 2019, as well as through the date of consummation of the IPO, with changes in fair value recognized as financial expenses in the statements of comprehensive loss. On September 3, 2020, upon consummation of the IPO, the exercise price of the warrants and the number of shares to be issued upon exercise of the warrants were fixed (refer to Note 6(b)), such that they met the criteria for equity classification under US GAAP. Accordingly, the derivative warrant liability was classified to equity as of such date.
A summary of significant unobservable inputs (Level 3 inputs) used in measuring the fair value of these warrants is as follows:
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CONVERTIBLE NOTES |
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Debt Disclosure [Abstract] | ||||||||||||
CONVERTIBLE NOTES |
Concurrent with the closing of the IPO, all of the Company’s convertible notes (inclusive of accrued interest on all outstanding notes) were converted into 2,415,022 units (consisting of one Ordinary Share and one warrant to purchase one Ordinary Share).
On September 3, 2020, upon consummation of the IPO, the outstanding balance of the 2019 Convertible Notes was converted into 312,170 units, each consisting of one Ordinary Share and one warrant to purchase one Ordinary Share, exercisable immediately, at an exercise price of $8.80 and with an expiry date of 5 years from the IPO closing date. Additionally, on the IPO consummation date, the amount and exercise price of the warrants originally granted in August and December 2019, was fixed at 297,589 warrants and at an exercise price of $6.72, each exercisable into a single unit (refer to Note 1(c)), consisting of one Ordinary Share and one warrant to purchase one Ordinary Shares, exercisable through September 3, 2025, at an exercise price of $8.80. Accordingly, since the warrants met the criteria of equity classification, the respective derivative warrant liability, was classified in equity (refer to note 5).
As a result of the issuance of the Agents' Warrants, the Company recorded a discount on the convertible note, which was amortized as financial expense amounting to $65 for the year ended December 31, 2020.
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TAXES ON INCOME |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
TAXES ON INCOME |
Taxable income of the Company is subject to the Israeli Corporate tax rate which was 23% for the years ended December 31, 2022, 2021 and 2020.
As of December 31, 2022, and 2021, the Company had net operating loss carry forwards for Israeli income tax purposes of approximately $19,695 and $19,261, respectively. Net operating loss carry forwards in Israel may be carried forward indefinitely and offset against future taxable income.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows:
In assessing the realization of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred tax assets will not be realized.
The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences are deductible and net operating losses are utilized. Based on consideration of these factors, the Company recorded a full valuation allowance on December 31, 2022, and 2021.
The primary difference between the statutory tax rate of the Company and the effective rate results virtually from the changes in valuation allowance in respect of carry forward tax losses, share based compensation expenses and research and development expenses due to the uncertainty of the realization of such tax benefits.
A reconciliation of the opening and closing amounts of total unrecognized tax benefits is as follows:
The balance of total unrecognized tax position as of December 31, 2022, 2021 and 2020 is $243, $234, $220 respectively, which, if recognized, would affect the effective tax rate in the Company's statements of comprehensive loss.
The Company recognizes interest and penalties, if any, related to unrecognized tax positions in tax expenses and exchange differences in financial expense. The accrued interest and exchange difference related to uncertain tax positions and the expenses recognized during the year ended December 31, 2022, 2021 and 2020 is $9, $14, $3 respectively.
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COMMITMENTS AND CONTINGENCIES |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||
COMMITMENTS AND CONTINGENCIES |
On December 10, 2020, the Company entered into a new rental agreement with an un-related party for a period of twelve months starting on January 1, 2021, with an extension option for an additional twelve months, for an annual rental fee of $20. As of December 31, 2021, the agreement was terminated.
On July 26, 2021, the Company engaged in a new rental agreement for a period of twelve months starting on August 15, 2021. In August 2022, the company extended the lease for an additional 12 months up to August 2023. The company has an extension option for an additional twelve months subject to the Company's prior notice. The Company is not reasonably certain to exercise this extension option. The annual rent is $68.
According to the agreements Lotus will serve as the clinical research organization for the Company's planned Phase 3 trials of PRF-110, which are expected to commence in March 2023 and to take place during the years 2023 - 2024. Under the First Agreement, the Company is obligated to pay an accumulated amount of approximately $2,907 based upon a milestone completion and under the Second Agreement an accumulated amount of approximately $7,107 based upon actual number of evaluable subjects.
During the fourth quarter of 2022 and throughout the first quarter of 2023 the company and the CRO negotiated the term of the first and the second agreements and mutually agreed to update the total milestone completion payment to $5,568 and to update the payment for the actual number of evaluable subject to $8,636.
As of December 31, 2022, and 2021, the Company accounted for the amounts of $1,728 as prepaid clinical trial expense and recorded $1,110 and $145 as clinical trials expenses in 2022 and 2021, respectively. No expenses were recorded in 2020.
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TEMPORARY EQUITY |
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Temporary Equity Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
TEMPORARY EQUITY |
Convertible Preferred Shares:
Convertible preferred shares consisted of the following:
The preferred shares conferred upon their holders all rights accruing to holders of Ordinary Shares in the Company, and, in addition, the rights, preferences and privileges granted to the preferred shares as follows.
On September 3, 2020, upon consummation of the IPO, all of the Company’s outstanding convertible preferred shares were converted into 2,954,267 Ordinary Shares.
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SHAREHOLDERS' EQUITY |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHAREHOLDERS' EQUITY |
The Ordinary Shares confer upon their holders the right to participate and vote in general shareholder meetings of the Company and to share in the distribution of dividends, if any, declared by the Company, and rights to receive a distribution of assets upon liquidation.
The following table summarizes the warrants and warrants units outstanding as of December 31, 2022:
(*) Each warrant is exercisable into one IPO unit consisting of one share and one IPO warrant with an exercise price of $8.80.
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SELECTED STATEMENTS OF OPERATIONS DATA |
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Disclosure Text Block Supplement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SELECTED STATEMENTS OF OPERATIONS DATA |
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RELATED PARTIES BALANCES AND TRANSACTIONS |
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Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RELATED PARTIES BALANCES AND TRANSACTIONS |
The sublease ceased as of August 2019, and from then until December 31, 2020 the Company was provided with an office space at no cost by Medica Venture Partners. For the years ended December 31, 2020 and 2019, the Company recorded an amount of $33 and $25, respectively, as a lease expense and a corresponding increase in additional paid-in capital, representing a contribution from its controlling shareholder. As of December 31, 2020, the lease agreement with the related party was terminated.
Balances with related parties:
Transactions with related parties:
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SUBSEQUENT EVENTS |
12 Months Ended | ||
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Dec. 31, 2022 | |||
Subsequent Events [Abstract] | |||
SUBSEQUENT EVENTS |
In February 2023, the Company issued 86,965 Ordinary shares par value NIS 0.03, to Crescendo in connection with the second grant (Note 10d.5 and 10b.4).
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SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of presentation |
The financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”).
The significant accounting policies described below have been applied consistently in relation to all the periods presented, unless otherwise stated.
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Use of estimate in preparation of financial statements |
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company evaluates on an ongoing basis its assumptions. Estimates are primarily used for, but not limited to, valuation of share-based compensation, capitalization of software costs, valuation allowance and uncertain tax positions. The Company’s management believes that the estimates, judgments, and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates.
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Financial statements in United States dollars |
The Company’s functional currency is the U.S. dollar (“dollar” or “$”) since the dollar is the currency of the primary economic environment in which the Company has operated and expects to continue to operate in the foreseeable future. Transactions and balances originally denominated in U.S. dollars are presented at their original amounts. Balances in non-U.S. dollar currencies are translated into U.S. dollars using historical and current exchange rates for non-monetary and monetary balances, respectively. For non-U.S. dollar transactions and other items in the statements of income (indicated below), the following exchange rates are used: (i) for transactions - exchange rates at transaction dates or average exchange rates; and (ii) for other items (derived from non-monetary balance sheet items such as depreciation) - historical exchange rates. Currency transaction gains and losses are presented in financial income or expenses, as appropriate.
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Cash and cash equivalents |
Cash equivalents are short-term highly liquid investments that are readily convertible to cash with original maturities of three months or less at acquisition.
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Short term deposit |
Bank deposits with original maturity dates of more than three months but at balance sheet date are less than one year are included in short-term deposits. The fair value of bank deposits approximates the carrying value since they bear interest at rates close to the prevailing market rates.
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Restricted cash |
As of December 31, 2022 and 2021, the Company’s restricted cash consisted of immaterial bank deposits that were denominated in NIS. Restricted deposits are presented at cost including accrued interest. These bank deposits are used as securities for the Company's credit cards.
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Fair Value Measurements |
The carrying values of Company’s financial assets and liabilities, including cash and cash equivalents, restricted cash, other current assets, trade payables and other accounts payable approximate their fair value due to the short-term maturity of these instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. Assets and liabilities recorded at fair value in the financial statements are categorized as follows:
Level 1 - Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;
Level 2 - Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable inputs for similar assets or liabilities. These include quoted prices for identical or similar assets or liabilities in active markets and quoted prices for identical or similar assets of liabilities in markets that are not active;
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
As of December 31, 2022, and 2021 no assets or liabilities are measured in fair value.
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Property and equipment, net |
Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets at the following rates:
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Research and development expenses |
Research and development costs include costs of payroll and related expenses of employees, subcontractors and consultants and other costs related to the Company's operation of its planned clinical trials. Research and development expenses are charged to the statements of comprehensive loss as incurred.
Clinical trial costs are a significant component of research and development expenses and include costs associated with third-party contractors. The Company outsources its clinical trial activities utilizing external entities such as clinical research organizations, independent clinical investigators, and other third-party service providers to assist the Company with the execution of its clinical trials. Clinical trial costs are expensed as incurred.
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Employee severance benefits |
The Company is required to make severance payments upon dismissal of an Israeli employee or upon termination of employment in certain circumstances.
In accordance with the current employment terms with all of its employees (Section 14 of the Israeli Severance Pay Law, 1963) located in Israel, the Company makes regular deposits with certain insurance companies for accounts controlled by each applicable employee in order to secure the employee’s full retirement benefit and severance obligation. The Company is relieved from any severance pay liability with respect to each such employee after it makes the payments on behalf of the employee. The liability accrued in respect of these employees and the amounts funded, as of the respective agreement dates, are not reflected on the Company’s balance sheet, as the amounts funded are not under the control and management of the Company and the pension or severance pay risks have been irrevocably transferred to the applicable insurance companies. The amounts of severance payment expenses were $60, $58 and $13 for the years ended December 31, 2022, 2021 and 2020, respectively.
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Legal and other contingencies |
Certain conditions may exist as of the date of the financial statements, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management assesses such contingent liabilities, if any, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s management evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought. Management applies the guidance in ASC 450-20, “Loss Contingencies” when assessing losses resulting from contingencies. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be reasonable estimated, then the estimated liability is recorded as accrued expenses in the Company’s financial statements. Legal costs incurred in connection with loss contingencies are expensed as incurred.
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Income taxes |
The Company accounts for income taxes in accordance with ASC 740, “Income Taxes”. ASC 740 prescribes the use of the asset and liability method whereby deferred tax asset and liability account balances are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value if it is more likely than not that a portion or all the deferred tax assets will not be realized, based on the weight of available positive and negative evidence. As of December 31, 2022, and 2021, the Company had a full valuation allowance on its deferred tax assets. Deferred tax liabilities and assets are classified as non-current in accordance with ASU 2015‑17.
The Company implements a two-step approach to recognize and measure uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax positions as the largest amount that is more than 50% (cumulative basis) likely to be realized upon ultimate settlement. As of December 31, 2022 and 2021, the total gross amount of provision for unrecognized tax positions was $243 and $234, respectively (Note 7f). The Company recognizes interest and penalties, if any, related to unrecognized tax positions in tax expenses and exchange differences in financial expense.
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Concentrations of credit risk |
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents and restricted cash. Cash and cash equivalents and restricted cash are invested in a major bank in Israel and the United States.
Management believes that the banks that hold the Company’s cash, cash equivalent and restricted cash are financially sound and, accordingly, minimal credit risk exists with respect to this cash, cash equivalent and restricted cash.
The Company relies, and expects to continue to rely, on a single supplier to manufacture supplies and raw materials for its clinical trial. This clinical trial could be adversely affected by a significant interruption in these manufacturing services or the availability of raw materials.
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Convertible notes |
Proceeds from the sale of notes with a conversion feature are allocated to equity based on the intrinsic value of such conversion feature (if any) in accordance with ASC 470-20 “Debt with Conversion and Other Options”, with a corresponding discount on the notes recorded in liabilities which is amortized in finance expense over the term of the notes. Convertible notes with convertible features that are determined to not be beneficial are allocated entirely to liabilities.
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Derivative warrant liability |
Financial equity instruments that do not meet the US GAAP criteria for equity classification are classified as a liability at fair value and are adjusted to fair value at each reporting period. Changes in fair value are recognized in the Company’s statements of comprehensive loss in accordance with ASC 815, “Accounting for Derivative Financial Instruments”.
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Basic and diluted loss per share |
Basic loss per share is computed on the basis of the net loss for the period divided by the weighted average number of Ordinary Shares and vested Ordinary Shares issuable for little or no further consideration outstanding during the period. Diluted loss per share is based upon the weighted average number of ordinary shares and of potential Ordinary Shares outstanding when dilutive. Potential Ordinary Shares include outstanding stock options, restricted shares and warrants, which are included under the treasury stock method when dilutive.
For the years ended December 31, 2022, 2021 and 2020, all outstanding share options, restricted shares, convertible notes, and warrants have been excluded from the calculation of the diluted net loss per share as all such securities are anti-dilutive for all years presented.
The loss and the weighted average number of shares used in computing basic and diluted net loss per share is as follows:
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Share-based compensation |
Share-based compensation to employees and consultants is accounted for in accordance with ASC 718, “Compensation - Share Compensation” (“ASC 718”), which requires estimation of the fair value of share-based payment awards on the date of grant. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service period using the strait line method. The Company has elected to recognize forfeitures, as incurred. The Company grants share (“Share Based Compensation”) to its employees, officers, directors, and non-employees in consideration for services rendered (Note 10).
The Company accounts for Share-Based Compensation awards classified as equity awards using the grant-date fair value method. The fair value at grant-date of the issued equity award is recognized as an expense on a straight-line basis over the requisite service period. The fair value of each share option granted is estimated using the Black-Scholes option pricing model, which requires a number of assumptions, of which the most significant are the expected share price, volatility, and the expected option term. Expected volatility was calculated based on comparable public companies in the same industry. The expected share option term is calculated for share options granted using the “simplified” method when the required conditions are met. The risk-free interest rate is based on the yield from U.S. treasury bonds with an equivalent term.
The expected dividend yield assumption is based on the Company’s historical experience and expectation of no future dividend pay outs. The Company has historically not paid cash dividends and has no foreseeable plans to pay cash dividends in the future.
The Company elected to recognize Share-Based Compensation cost for awards with only service conditions that have a graded vesting schedule using the straight-line method based on the multiple-option award approach.
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Deferred offering costs |
The Company capitalizes certain legal and other third-party fees that are directly related to the Company’s in-process equity financings until such financings are consummated. After the consummation of such equity financings, these costs are recorded as a reduction of the respective gross proceeds. Should a planned equity financing be abandoned, terminated, or significantly delayed, the deferred offering costs are written off to operating expenses. As of December 31, 2022 and 2021, there were no deferred offering costs.
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Segment Reporting |
s. Segment Reporting
The Company has one operating and reportable segment. An operating segment is defined as a component that engages in business activities whose operating results are reviewed by the chief operating decision maker, who is the Company’s Chief Executive Officer, for the purpose of assessing performance and allocating resources and for which discrete financial information is available. |
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Leases |
t. Leases
In accordance with Accounting Standards Codification (“ASC”) 842, Leases, the Company determines whether an arrangement is or contains a lease at the inception of the arrangement and whether such a lease is classified as a financing lease or operating lease at the commencement date of the lease. The Company elected not to recognize the right-of-use assets and lease liabilities for short-term leases which it defines as leases with lease terms. The company defines a short-term lease if a lease has a lease term of 12 months or less and does not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise.
All of the Company's leases are classified as short-term. Lease expense for lease payments is recognized on a straight-line basis over the lease term in general and administrative (Note 8a). |
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Recently adopted accounting pronouncement |
In August 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). This guidance simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity. The Company adopted ASU 2020-06 on January 1, 2022 and it did not have a material impact on the Company’s financial statements and disclosures.
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Recently Issued Accounting Pronouncements Not Yet Adopted |
Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements.
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SIGNIFICANT ACCOUNTING POLICIES (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of depreciation rates for property and equipment |
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Schedule of computation of basic and diluted losses per share |
|
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of prepaid expenses and other current assets |
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ACCURUED EXPENSES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of accrued expenses |
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FAIR VALUE MEASUREMENTS (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of significant unobservable inputs (Level 3 inputs) used in measuring the warrants |
|
TAXES ON INCOME (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of deferred income taxes |
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Schedule of unrecognized tax benefits |
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TEMPORARY EQUITY (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Temporary Equity Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of convertible preferred shares |
Convertible preferred shares consisted of the following:
|
SHAREHOLDERS' EQUITY (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of warrants and warrants units outstanding |
(*) Each warrant is exercisable into one IPO unit consisting of one share and one IPO warrant with an exercise price of $8.80.
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Schedule of Black-Scholes to estimate fair value |
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Plan Twenty Thousand Nineteen [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of share options outstanding and exercisable to employees and directors |
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2008 Plan [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of share options outstanding and exercisable to employees and directors |
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SELECTED STATEMENTS OF OPERATIONS DATA (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure Text Block Supplement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of research and development expenses |
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Schedule of general and administrative expenses |
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Schedule of financial expenses net |
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RELATED PARTIES BALANCES AND TRANSACTIONS (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of balances and transactions with related parties |
Balances with related parties:
Transactions with related parties:
|
GENERAL (Narrative) (Details) $ / shares in Units, $ in Thousands |
1 Months Ended | 12 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 11, 2021
USD ($)
shares
|
Oct. 05, 2020
USD ($)
shares
|
Sep. 03, 2020
$ / shares
shares
|
Jul. 06, 2020 |
Jul. 22, 2021
USD ($)
shares
|
Dec. 31, 2022
USD ($)
$ / shares
shares
|
Dec. 31, 2021
USD ($)
|
Dec. 31, 2020
USD ($)
|
Feb. 28, 2023
₪ / shares
shares
|
Apr. 30, 2022
shares
|
Mar. 11, 2021
₪ / shares
shares
|
Mar. 11, 2021
$ / shares
shares
|
Dec. 31, 2019
$ / shares
|
Aug. 31, 2019
$ / shares
|
|
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||
Net loss | $ (8,792) | $ (7,246) | $ (4,053) | |||||||||||
Accumulated deficit | (32,519) | (23,727) | ||||||||||||
Cash | 10,191 | |||||||||||||
Reverse split | 1-for-3 reverse split | |||||||||||||
Proceeds from exercise of warrants | $ 1,930 | $ 0 | 1,930 | 0 | ||||||||||
Number of ordinary shares called by warrants | shares | 419,673 | 3,950,217 | ||||||||||||
Warrants Issued to purchase aggregate ordinary shares | shares | 52,173 | |||||||||||||
Warrants exercise price | $ / shares | $ 5.06 | $ 100 | $ 100 | |||||||||||
Share-based compensation to employees | $ 1,389 | 812 | 38 | |||||||||||
Cash used in operating activities | $ (6,459) | $ (6,553) | $ (2,557) | |||||||||||
Subsequent Event [Member] | ||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||
Ordinary shares issued | shares | 86,965 | |||||||||||||
Original issue price per share | ₪ / shares | ₪ 0.03 | |||||||||||||
Private Placement [Member] | ||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||
Gross proceeds from issuance of warrants | $ 6,000 | |||||||||||||
Number of ordinary shares called by warrants | shares | 1,304,346 | 1,304,346 | ||||||||||||
Warrants Issued to purchase aggregate ordinary shares | shares | 652,173 | |||||||||||||
Combined purchase price | (per share) | ₪ 0.03 | $ 4.6 | ||||||||||||
Proceeds from issuance of private placement | $ 5,554 | |||||||||||||
Warrants exercise price | $ / shares | $ 4.6 | |||||||||||||
IPO [Member] | ||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||
Ordinary shares issued | shares | 2,500,000 | |||||||||||||
Original issue price per share | $ / shares | $ 8 | |||||||||||||
Warrants expired | 5 years | |||||||||||||
Warrants exercise price | $ / shares | $ 8.8 | $ 8.8 | ||||||||||||
Over-Allotment Option [Member] | ||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||
Gross proceeds from issuance of warrants | $ 20,000 | |||||||||||||
Net proceeds after deducting underwriting discounts and commissions | $ 17,300 | |||||||||||||
Number of ordinary shares called by warrants | shares | 375,000 | |||||||||||||
Proceeds from issuance of private placement | $ 3,000 | |||||||||||||
2019 Plan [Member] | Board Of Director [Member] | ||||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||||
Ordinary shares issued | shares | 1,000,000 |
SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|---|---|
Accounting Policies [Abstract] | ||||
Unrecognized tax | $ 243 | $ 234 | $ 220 | $ 0 |
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Depreciation Rates for Property and Equipment) (Details) |
12 Months Ended |
---|---|
Dec. 31, 2022 | |
Computers, software and electronic equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Annual depreciation rate | 33.00% |
Furniture and office equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Annual depreciation rate | 7.00% |
SIGNIFICANT ACCOUNTING POLICIES (Schedule of Computation of Basic and Diluted Losses Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Numerator: | |||
Net loss applicable to shareholders of ordinary shares | $ (8,792) | $ (7,246) | $ (4,053) |
Denominator: | |||
Shares of ordinary share and restricted shares used in computing basic net loss per share | 10,661,170 | 9,812,234 | 3,243,943 |
Shares of ordinary share and restricted shares used in computing diluted net loss per share | 10,661,170 | 9,812,234 | 3,243,943 |
Basic and diluted net loss per share basic (in dollars per share) | $ (0.82) | $ (0.74) | $ (1.25) |
Basic and diluted net loss per share diluted (in dollars per share) | $ (0.82) | $ (0.74) | $ (1.25) |
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Schedule of Prepaid Expenses and Other Current Assets) (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Receivables from governmental authorities | $ 55 | $ 218 |
Prepaid expenses | 310 | 473 |
Other | 0 | 30 |
Total prepaid expenses and other current assets | $ 365 | $ 721 |
ACCURUED EXPENSES (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Accrued Liabilities [Abstract] | ||
Directors’ fees | $ 33 | $ 46 |
Manufacturing expenses | 168 | 13 |
Advisors and legal expenses | 155 | 139 |
ACCURUED EXPENSES | $ 356 | $ 198 |
FAIR VALUE MEASUREMENTS (Schedule of significant unobservable inputs (Level 3 inputs) used in measuring the warrants) (Details) - $ / shares |
8 Months Ended | 12 Months Ended | |
---|---|---|---|
Sep. 03, 2020 |
Dec. 31, 2019 |
Apr. 30, 2022 |
|
Defined Benefit Plan, Plan Assets, Level 3 Reconciliation [Line Items] | |||
Exercise price (in dollars per share) | $ 1.06 | ||
Level 3 inputs [Member] | |||
Defined Benefit Plan, Plan Assets, Level 3 Reconciliation [Line Items] | |||
Expected volatility | 72.29% | 72.29% | |
Risk free rate | 0.22% | ||
Dividend yield | 0.00% | 0.00% | |
Level 3 inputs [Member] | Minimum [Member] | |||
Defined Benefit Plan, Plan Assets, Level 3 Reconciliation [Line Items] | |||
Exercise price (in dollars per share) | $ 6.72 | $ 2.55 | |
Risk free rate | 1.50% | ||
Expected life (years) | 3 years 11 months 23 days | 4 years 7 months 24 days | |
Level 3 inputs [Member] | Maximum [Member] | |||
Defined Benefit Plan, Plan Assets, Level 3 Reconciliation [Line Items] | |||
Exercise price (in dollars per share) | $ 8.8 | $ 4.74 | |
Risk free rate | 1.67% | ||
Expected life (years) | 5 years | 5 years |
CONVERTIBLE NOTES (Narrative) (Details) $ / shares in Units, $ in Thousands |
1 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 03, 2020
$ / shares
shares
|
Dec. 09, 2019
$ / shares
shares
|
Dec. 31, 2019
USD ($)
$ / shares
|
Aug. 31, 2019
USD ($)
$ / shares
|
Dec. 31, 2022
$ / shares
shares
|
Dec. 31, 2020
USD ($)
|
Dec. 31, 2019
USD ($)
$ / shares
|
|
Convertible Notes (Details) [Line Items] | |||||||
Convertible notes | $ | $ 4,417 | $ 4,417 | |||||
Interest expense | $ | $ 271 | 379 | |||||
Convertible notes issued (in Shares) | shares | 2,415,022 | ||||||
Convertible notes (units) | 14.2 | 14.2 | |||||
Convertible notes and warrants total consideration | $ | $ 1,420 | $ 1,420 | $ 1,420 | ||||
Convertible notes and warrants consideration per unit (in Dollars per share) | $ 100 | $ 100 | $ 5.06 | $ 100 | |||
Discount of warrant | 10.00% | 10.00% | |||||
Financing expense | $ | $ 65 | ||||||
Convertible Notes Related Warrants 2019 [Member] | |||||||
Convertible Notes (Details) [Line Items] | |||||||
Convertible notes and warrants consideration per unit (in Dollars per share) | $ 8.8 | ||||||
Warrant exercise price per unit | $ 6.72 | ||||||
Ordinary Shares issued | shares | 55,785 | ||||||
Warrant expired | Dec. 08, 2024 | ||||||
IPO [Member] | |||||||
Convertible Notes (Details) [Line Items] | |||||||
Convertible notes issued (in Shares) | shares | 312,170 | ||||||
Convertible notes and warrants consideration per unit (in Dollars per share) | $ 8.8 | $ 8.8 | |||||
Warrant term | 5 years | ||||||
Ordinary Shares issued | shares | 2,500,000 | ||||||
IPO [Member] | Convertible Notes Related Warrants 2019 [Member] | |||||||
Convertible Notes (Details) [Line Items] | |||||||
Convertible notes and warrants consideration per unit (in Dollars per share) | $ 6.72 | ||||||
Convertible debt conversion price (in Dollars per share) | $ 8.8 | ||||||
Warrant excercise | shares | 297,589 |
TAXES ON INCOME (Narrative) (Details) - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Tax Credit Carryforward [Line Items] | ||||
Corporate tax rate | 23.00% | 23.00% | 23.00% | |
Provision for unrecognized tax positions | $ 243 | $ 234 | $ 220 | $ 0 |
Interest and Exchange difference | 9 | 14 | $ 3 | |
Israeli [Member] | ||||
Tax Credit Carryforward [Line Items] | ||||
Net operating loss carry forwards | $ 19,695 | $ 19,261 |
TAXES ON INCOME (Schedule of Deferred Income Taxes) (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Deferred tax assets: | ||
Net operating loss carry forward | $ 4,530 | $ 4,434 |
Research and development expenses | 812 | 463 |
Other | 34 | 21 |
Less: Valuation allowance | (5,376) | (4,918) |
Net deferred tax asset | $ 0 | $ 0 |
TAXES ON INCOME (Schedule of Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Income Tax Disclosure [Abstract] | |||
Opening balance | $ 234 | $ 220 | $ 0 |
Tax positions taken in the current year | 0 | 217 | |
Interest and Exchange difference | 9 | 14 | 3 |
Closing balance | $ 243 | $ 234 | $ 220 |
COMMITMENTS AND CONTINGENCIES (Narrative) (Details) - USD ($) $ in Thousands |
12 Months Ended | |||||
---|---|---|---|---|---|---|
Dec. 03, 2020 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Jul. 26, 2021 |
Dec. 31, 2020 |
Dec. 10, 2020 |
|
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||||
Annual rental fee | $ 33 | $ 68 | $ 33 | $ 20 | ||
Prepaid clinical trial expenses and deferred clinical trial costs | 1,728 | $ 1,728 | ||||
Clinical trial expense | 1,110 | 145 | ||||
Amount of Milestone completion payment | 5,568 | |||||
Milestone payment for actual number of evaluable | 8,636 | |||||
First Agreement [Member] | ||||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||||
Accumulated payment on clinical research development | $ 2,907 | |||||
Second Agreement [Member] | ||||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||||
Accumulated payment on clinical research development | $ 7,107 | |||||
Non refundable payment of clinical research and development. | $ 1,728 | $ 1,728 |
TEMPORARY EQUITY (Narrative) (Details) |
Sep. 03, 2020
shares
|
---|---|
Temporary Equity Disclosure [Abstract] | |
Outstanding convertible preferred shares | 2,954,267 |
TEMPORARY EQUITY (Schedule of Convertible Preferred Shares) (Details) $ in Thousands |
Dec. 31, 2019
USD ($)
shares
|
---|---|
Temporary Equity Disclosure [Abstract] | |
Shares Authorized | shares | 18,300,000 |
Shares Issued and Outstanding | shares | 2,954,267 |
Carrying Value | $ | $ 6,621 |
Liquidation Preference | $ | $ 15,250 |
SHAREHOLDERS' EQUITY (Narrative) (Details) $ / shares in Units, $ in Thousands |
1 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 11, 2021
USD ($)
shares
|
Oct. 05, 2020
USD ($)
$ / shares
shares
|
Sep. 03, 2020
$ / shares
shares
|
Jul. 06, 2020 |
Sep. 30, 2019
shares
|
Nov. 23, 2022
$ / shares
|
May 31, 2022
USD ($)
|
Apr. 30, 2022
$ / shares
shares
|
Jul. 22, 2021
USD ($)
shares
|
May 31, 2021
$ / shares
shares
|
Feb. 23, 2021
$ / shares
shares
|
Jan. 31, 2021
$ / shares
shares
|
Nov. 30, 2020
$ / shares
shares
|
Sep. 30, 2019
$ / shares
shares
|
Dec. 31, 2022
USD ($)
$ / shares
shares
|
Dec. 31, 2021
USD ($)
|
Dec. 31, 2020
USD ($)
|
Dec. 31, 2022
₪ / shares
|
Dec. 31, 2022
USD ($)
$ / shares
shares
|
May 31, 2022
₪ / shares
shares
|
Dec. 31, 2021
₪ / shares
shares
|
Mar. 11, 2021
₪ / shares
shares
|
Mar. 11, 2021
$ / shares
shares
|
Oct. 03, 2020
$ / shares
|
Aug. 31, 2020
shares
|
Dec. 31, 2019
$ / shares
|
Dec. 09, 2019
$ / shares
|
Aug. 31, 2019
$ / shares
|
Jul. 02, 2019
shares
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||
Ordinary share issued | 152,110 | 10,634,166 | 10,482,056 | ||||||||||||||||||||||||||
Reverse split | 3-for-1 | ||||||||||||||||||||||||||||
Convertible notes issued (in Shares) | 2,415,022 | ||||||||||||||||||||||||||||
Warrants exercise price | $ / shares | $ 5.06 | $ 100 | $ 100 | ||||||||||||||||||||||||||
Outstanding convertible preferred shares | 2,954,267 | ||||||||||||||||||||||||||||
Options granted | 51,166 | 164,455 | 51,072 | 300,000 | 133,652 | 267,296 | 988,773 | ||||||||||||||||||||||
Per share price | (per share) | $ 4.5 | ₪ 0.03 | ₪ 0.03 | ||||||||||||||||||||||||||
Share-based compensation expense | $ | $ 285 | $ 99 | $ 18 | ||||||||||||||||||||||||||
Intrinsic value of share options outstanding | $ | $ 9 | ||||||||||||||||||||||||||||
Intrinsic value of share options exercisable | $ | $ 9 | ||||||||||||||||||||||||||||
Warrants Issued to purchase aggregate ordinary shares | 52,173 | ||||||||||||||||||||||||||||
Number of ordinary shares called by warrants | 419,673 | 3,950,217 | |||||||||||||||||||||||||||
Proceeds from exercise of warrants | $ | $ 1,930 | $ 0 | 1,930 | 0 | |||||||||||||||||||||||||
Placement agent fees and other expense | $ | 500 | ||||||||||||||||||||||||||||
Private placement fee | $ | 390 | ||||||||||||||||||||||||||||
Reimbursement Expense | $ | $ 40 | ||||||||||||||||||||||||||||
Lower exercise price | $ / shares | $ 0.57 | ||||||||||||||||||||||||||||
Cancelled | 667,641 | ||||||||||||||||||||||||||||
Stock option share percentage granted | 6.25% | ||||||||||||||||||||||||||||
Incremental Fair Value Of Stock Options | $ | $ 165 | ||||||||||||||||||||||||||||
Percentage of incremental fair value vested | 50.00% | ||||||||||||||||||||||||||||
Percentage Of Unrecognized Compensation Cost | 50.00% | ||||||||||||||||||||||||||||
Unrecognized compensation cost | $ | $ 454 | ||||||||||||||||||||||||||||
Number of unvested stock options | 619,387 | ||||||||||||||||||||||||||||
Vested Incremental Fair Value Of Stock Options | $ | $ 83 | ||||||||||||||||||||||||||||
General and Administrative Expense [Member] | |||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||
Share-based compensation expense | $ | 1,104 | 713 | 18 | ||||||||||||||||||||||||||
Research and Development Expense [Member] | |||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||
Share-based compensation expense | $ | $ 285 | 99 | 20 | ||||||||||||||||||||||||||
Chief Executive Officer [Member] | |||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||
Options granted | 60,000 | ||||||||||||||||||||||||||||
2008 Plan [Member] | |||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||
Term plan | excess of 10 years | ||||||||||||||||||||||||||||
Options outstanding | 153,882 | 153,882 | |||||||||||||||||||||||||||
Options granted | 164,455 | 51,072 | 133,652 | 267,296 | 51,166 | 0 | |||||||||||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Forfeitures in Period | 0 | ||||||||||||||||||||||||||||
Intrinsic value of share options outstanding | $ | $ 27 | ||||||||||||||||||||||||||||
Weighted average exercise price of options granted | $ / shares | $ 1.06 | $ 3.01 | $ 5.74 | $ 5.74 | $ 3.34 | $ 0 | |||||||||||||||||||||||
Cancelled | 667,641 | ||||||||||||||||||||||||||||
2019 Plan [Member] | |||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||
Reserve for issuance | 971,476 | ||||||||||||||||||||||||||||
Options outstanding | 1,339,939 | 971,476 | |||||||||||||||||||||||||||
Options granted | 1,153,228 | ||||||||||||||||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Forfeitures in Period | 117,124 | ||||||||||||||||||||||||||||
Number of options approved for grant | 164,455 | ||||||||||||||||||||||||||||
Vesting period of options | 4 years | ||||||||||||||||||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Rights | 4/16 of the options shall vest following the lapse of a period of twelve months commencing at the date of grant. The remaining 12/16 of the options shall vest on quarterly basis, so that 1/16 of the options shall vest on the expiry of each quarter. | ||||||||||||||||||||||||||||
Weighted average grant date fair value per option | $ / shares | $ 0.89 | ||||||||||||||||||||||||||||
Weighted average exercise price of options granted | $ / shares | $ 1.06 | $ 0.64 | |||||||||||||||||||||||||||
Cancelled | 667,641 | ||||||||||||||||||||||||||||
Percentage Of Unrecognized Compensation Cost | 50.00% | ||||||||||||||||||||||||||||
Unrecognized compensation cost | $ | $ 454 | ||||||||||||||||||||||||||||
Convertible Notes Related Warrants 2019 [Member] | |||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||
Warrants exercise price | $ / shares | $ 8.8 | ||||||||||||||||||||||||||||
IPO [Member] | |||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||
Convertible notes issued (in Shares) | 312,170 | ||||||||||||||||||||||||||||
Warrants Expired | 5 years | ||||||||||||||||||||||||||||
Warrants exercise price | $ / shares | $ 8.8 | $ 8.8 | |||||||||||||||||||||||||||
IPO [Member] | Convertible Notes Related Warrants 2019 [Member] | |||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||
Warrants exercise price | $ / shares | $ 6.72 | ||||||||||||||||||||||||||||
Warrant excercise | 297,589 | ||||||||||||||||||||||||||||
Over-Allotment Option [Member] | |||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||
Warrant excercise | 375,000 | ||||||||||||||||||||||||||||
Per share price | $ / shares | $ 0.01 | ||||||||||||||||||||||||||||
Number of ordinary shares called by warrants | 375,000 | ||||||||||||||||||||||||||||
Proceeds from issuance of private placement | $ | $ 3,000 | ||||||||||||||||||||||||||||
Private Placement [Member] | |||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||
Warrants exercise price | $ / shares | $ 4.6 | ||||||||||||||||||||||||||||
Warrants Issued to purchase aggregate ordinary shares | 652,173 | ||||||||||||||||||||||||||||
Number of ordinary shares called by warrants | 1,304,346 | 1,304,346 | |||||||||||||||||||||||||||
Gross proceeds from issuance of private placement | $ | $ 6,000 | ||||||||||||||||||||||||||||
Proceeds from issuance of private placement | $ | $ 5,554 | ||||||||||||||||||||||||||||
Combined purchase price | (per share) | ₪ 0.03 | $ 4.6 | |||||||||||||||||||||||||||
Employee Stock [Member] | |||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||
Options granted | 21,268 | ||||||||||||||||||||||||||||
Unrecognized compensation cost | $ | $ 1,032 | ||||||||||||||||||||||||||||
New Option [Member] | 2008 Plan [Member] | |||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||
Options granted | 988,773 | ||||||||||||||||||||||||||||
New Option [Member] | 2008 Plan [Member] | Employee [Member] | |||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||
Options granted | 21,268 | ||||||||||||||||||||||||||||
Crescendo Communications [Member] | |||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||
Ordinary share issued | 86,965 | ||||||||||||||||||||||||||||
Per share price | ₪ / shares | ₪ 0.03 | ||||||||||||||||||||||||||||
Share-based compensation expense | $ | $ 67 | ||||||||||||||||||||||||||||
Crescendo Communications [Member] | Restricted Stock [Member] | |||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||
Ordinary share issued | 152,110 | ||||||||||||||||||||||||||||
Percentage of shares issued | 3.75% | ||||||||||||||||||||||||||||
Share-based compensation expense | $ | $ 275 | $ 412 | $ 137 | ||||||||||||||||||||||||||
Underwriters [Member] | |||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||
Warrants exercise price | $ / shares | $ 8.8 | ||||||||||||||||||||||||||||
Warrant excercise | 375,000 | ||||||||||||||||||||||||||||
Warrant expired date | Sep. 03, 2025 | ||||||||||||||||||||||||||||
Amount of return | $ | $ 3 | ||||||||||||||||||||||||||||
Underwriters [Member] | IPO [Member] | |||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||
Warrants Expired | 5 years | ||||||||||||||||||||||||||||
Options granted | 125,000 | ||||||||||||||||||||||||||||
Per share price | $ / shares | $ 10 | $ 10 | |||||||||||||||||||||||||||
Offering price | 125.00% |
SHAREHOLDERS' EQUITY (Schedule of Warrants and Warrants Units Outstanding) (Details) - $ / shares |
12 Months Ended | |||||
---|---|---|---|---|---|---|
Dec. 31, 2022 |
Jul. 22, 2021 |
Dec. 31, 2019 |
Aug. 31, 2019 |
|||
Class of Warrant or Right [Line Items] | ||||||
Number of warrants | 3,950,217 | 419,673 | ||||
Exercise price | $ 5.06 | $ 100 | $ 100 | |||
August 2019 warrants [Member] | ||||||
Class of Warrant or Right [Line Items] | ||||||
Issuance Date | Aug. 22, 2019 | |||||
Number of warrants | 205,268 | |||||
Exercise price | [1] | $ 6.72 | ||||
Exercisable through | Aug. 22, 2024 | |||||
December 2019 warrants [Member] | ||||||
Class of Warrant or Right [Line Items] | ||||||
Issuance Date | Dec. 09, 2019 | |||||
Number of warrants | 148,106 | |||||
Exercise price | [1] | $ 6.72 | ||||
Exercisable through | Dec. 08, 2024 | |||||
Warrants to underwriters [Member] | ||||||
Class of Warrant or Right [Line Items] | ||||||
Issuance Date | Sep. 03, 2020 | |||||
Number of warrants | 125,000 | |||||
Exercise price | $ 10 | |||||
Exercisable through | Sep. 01, 2025 | |||||
Warrants To Underwriters [Member] | ||||||
Class of Warrant or Right [Line Items] | ||||||
Issuance Date | Oct. 05, 2020 | |||||
Number of warrants | 375,000 | |||||
Exercise price | $ 8.8 | |||||
Exercisable through | Sep. 03, 2025 | |||||
IPO warrants [Member] | ||||||
Class of Warrant or Right [Line Items] | ||||||
Issuance Date | Sep. 03, 2020 | |||||
Number of warrants | 2,812,170 | |||||
Exercise price | $ 8.8 | |||||
Exercisable through | Sep. 03, 2025 | |||||
PIPE warrants [Member] | ||||||
Class of Warrant or Right [Line Items] | ||||||
Issuance Date | Mar. 11, 2021 | |||||
Number of warrants | 232,500 | |||||
Exercise price | $ 4.6 | |||||
Exercisable through | Sep. 10, 2026 | |||||
Warrants to PIPE placement agent [Member] | ||||||
Class of Warrant or Right [Line Items] | ||||||
Issuance Date | Mar. 11, 2021 | |||||
Number of warrants | 52,173 | |||||
Exercise price | $ 5.06 | |||||
Exercisable through | Mar. 08, 2026 | |||||
|
SHAREHOLDERS' EQUITY (Schedule of share options outstanding and exercisable under 2008 Plan) (Details) - $ / shares |
1 Months Ended | 12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2019 |
Apr. 30, 2022 |
May 31, 2021 |
Feb. 23, 2021 |
Jan. 31, 2021 |
Nov. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Number of options | |||||||||
Granted | 51,166 | 164,455 | 51,072 | 300,000 | 133,652 | 267,296 | 988,773 | ||
2008 Plan [Member] | |||||||||
Number of options | |||||||||
Options outstanding | 153,882 | ||||||||
Granted | 164,455 | 51,072 | 133,652 | 267,296 | 51,166 | 0 | |||
Exercised | 0 | ||||||||
Forfeited | 0 | ||||||||
Options outstanding | 153,882 | 153,882 | |||||||
Exercisable at the end of the year | 153,882 | ||||||||
Weighted-average exercise price | |||||||||
Outstanding at the beginning of the year | $ 0.24 | ||||||||
Granted | $ 1.06 | $ 3.01 | $ 5.74 | $ 5.74 | $ 3.34 | 0 | |||
Exercised | 0 | ||||||||
Forfeited | 0 | ||||||||
Outstanding at the end of the year | 0.24 | $ 0.24 | |||||||
Exercisable at the end of the year | $ 0.24 | ||||||||
Weighted-average remaining contractual term | |||||||||
Outstanding at the beginning of the year | 1 year 3 months | 2 years 3 months | |||||||
Exercisable at the end of the year | 1 year 3 months |
SHAREHOLDERS' EQUITY (Schedule of Stock Option Activity) (Details) - $ / shares |
1 Months Ended | 12 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2019 |
Apr. 30, 2022 |
May 31, 2021 |
Feb. 23, 2021 |
Jan. 31, 2021 |
Nov. 30, 2020 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Number of options | ||||||||
Granted | 51,166 | 164,455 | 51,072 | 300,000 | 133,652 | 267,296 | 988,773 | |
Cancelled | 667,641 | |||||||
2019 Plan [Member] | ||||||||
Number of options | ||||||||
Options outstanding | 971,476 | |||||||
Changes during the year | 361,280 | |||||||
Granted | 1,153,228 | |||||||
Forfeited | 117,124 | |||||||
Cancelled | 667,641 | |||||||
Exercised | 0 | |||||||
Options outstanding | 1,339,939 | 971,476 | ||||||
Exercisable at the end of the year | 720,552 | |||||||
Weighted-average exercise price | ||||||||
Outstanding at the beginning of the year | $ 4.51 | |||||||
Changes during the year | 3.58 | |||||||
Granted | $ 1.06 | 0.64 | ||||||
Cancelled | 4.19 | |||||||
Forfeited | $ 3.34 | 3.34 | ||||||
Exercised | 0 | |||||||
Outstanding at the end of the year | 1.44 | $ 4.51 | ||||||
Exercisable at the end of the year | $ 1.5 | |||||||
Weighted-average remaining contractual term | ||||||||
Outstanding at the beginning of the year | 9 years 4 months 20 days | 8 years 8 months 19 days | ||||||
Changes during the year | 8 years 1 month 20 days | |||||||
Granted | 9 years 9 months 25 days | |||||||
Cancelled | 8 years 2 months 15 days | |||||||
Forfeited | 6 years 5 months 12 days | |||||||
Exercisable at the end of the year | 9 years 3 months |
SHAREHOLDERS' EQUITY (Schedule of assumptions used for fair value of options) (Details) - $ / shares |
12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Apr. 30, 2022 |
May 31, 2021 |
Jan. 31, 2021 |
Nov. 30, 2020 |
||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Exercise price | $ 1.06 | ||||||||
2019 Plan [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Dividend yield | 0.00% | 0.00% | |||||||
Exercise price | $ 3.01 | $ 5.74 | $ 5.74 | ||||||
Minimum [Member] | 2019 Plan [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Expected life | 5 years 3 months 10 days | [1] | 5 years 10 months 9 days | ||||||
Risk-free interest rates | 2.69% | [1] | 0.52% | ||||||
Volatility | 79.30% | [1] | 69.67% | ||||||
Exercise price | $ 0.57 | [1] | $ 3.013 | ||||||
Maximum [Member] | 2019 Plan [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Expected life | 6 years 25 days | [1] | 6 years 1 month 9 days | ||||||
Risk-free interest rates | 3.88% | [1] | 1.13% | ||||||
Volatility | 82.60% | [1] | 78.99% | ||||||
Exercise price | $ 1.06 | [1] | $ 5.738 | ||||||
|
SELECTED STATEMENTS OF OPERATIONS DATA (Schedule of Research and Development Expenses) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Schedule Of Financial Expenses Net [Abstract] | |||
Subcontractors and consultants | $ 2,228 | $ 1,654 | $ 217 |
Payroll and related expenses | 766 | 719 | 90 |
Share-based compensation expense | 285 | 99 | 18 |
Clinical trials expenses | 1,121 | 357 | 0 |
Other expenses | 22 | 31 | 29 |
Total Research and development expenses | $ 4,422 | $ 2,860 | $ 354 |
SELECTED STATEMENTS OF OPERATIONS DATA (Schedule of General and Administrative Expenses) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Schedule Of Financial Expenses Net [Abstract] | |||
Professional services | $ 1,489 | $ 1,697 | $ 727 |
Payroll and related expenses | 780 | 688 | 154 |
D&O insurance | 653 | 935 | 360 |
Rent and office maintenance | 249 | 210 | 37 |
Share-based compensation expense | 1,104 | 713 | 20 |
Other expenses | 172 | 105 | 19 |
Total General and administrative expenses | $ 4,447 | $ 4,348 | $ 1,317 |
SELECTED STATEMENTS OF OPERATIONS DATA (Schedule of Financial Expenses, Net) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Schedule Of Financial Expenses Net [Abstract] | |||
Interest income | $ 160 | $ 0 | $ 0 |
Issuance expenses | 0 | 0 | (65) |
Bank fees | (13) | (10) | (3) |
Change in fair value of derivative warrant liability | 0 | 0 | (1,105) |
Exchange rate differences | (61) | (22) | (2) |
Total other financial expenses, net | $ 86 | $ (32) | $ (1,175) |
RELATED PARTIES BALANCES AND TRANSACTIONS (Details) - USD ($) |
1 Months Ended | 12 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2019 |
Apr. 30, 2022 |
May 31, 2021 |
Feb. 23, 2021 |
Jan. 31, 2021 |
Nov. 30, 2020 |
Jan. 26, 2020 |
Dec. 31, 2022 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Jul. 26, 2021 |
Dec. 10, 2020 |
|
Related Party Transaction [Line Items] | ||||||||||||
Convertible notes | $ 4,417,000 | |||||||||||
Rental properties | $ 33,000 | $ 33,000 | $ 68,000 | $ 20,000 | ||||||||
Management fee | $ 20,000 | |||||||||||
Operating lease provided by controlling shareholder | 33,000 | |||||||||||
Options granted | 51,166 | 164,455 | 51,072 | 300,000 | 133,652 | 267,296 | 988,773 | |||||
Additional Paid-in Capital [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Operating lease provided by controlling shareholder | $ 33,000 | 25,000 | ||||||||||
Director [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
One time payment | $ 150,000 | |||||||||||
Board of Directors Chairman [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
One time payment, quarterly basis | $ 37,500 | |||||||||||
Chief Executive Officer [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Options granted | 60,000 | |||||||||||
Three board members, Chairman of the board of directors and to its Chief Technology Officer [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Options granted | 300,000 | |||||||||||
Shareholder [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Convertible notes | $ 95,000 | |||||||||||
Convertible notes annual interest rate | 8.00% |
RELATED PARTIES BALANCES AND TRANSACTION ( Schedule of Balances and Transactions with Related Parties ) (Details) - USD ($) $ in Thousands |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|---|
Related Party Transactions [Abstract] | |||
Employees accrued salaries and bonuses | $ 359 | $ 356 | $ 79 |
Directors accrued fees expenses | 33 | 82 | 35 |
Employees and directors expense | $ 392 | $ 438 | $ 114 |
RELATED PARTIES BALANCES AND TRANSACTIONS (Schedule of Balances and Transactions with Related Parties) (Details1) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Amounts charged to | |||
Research and development expenses | $ 702 | $ 151 | $ 0 |
General and administrative expenses | 2,091 | 2,155 | 370 |
Interest expense on convertible notes | $ 0 | $ 0 | $ 251 |
SUBSEQUENT EVENTS (Narrative) (Details) - Subsequent Event [Member] |
Feb. 28, 2023
₪ / shares
shares
|
---|---|
Subsequent Event [Line Items] | |
Ordinary shares issued | shares | 86,965 |
Share price per unit (in Dollars per share) | ₪ / shares | ₪ 0.03 |
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