Exhibit 99.1
INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
INTERIM CONDENSED FINANCIAL STATEMENTS
AS OF JUNE 30, 2023
UNAUDITED
_______________________
________________
____________
INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
(UNAUDITED)
TABLE OF CONTENTS
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INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
UNAUDITED INTERIM CONDENSED STATEMENTS OF FINANCIAL POSITION
(U.S. dollars in thousands)
June 30, | December 31, | |||||||
2023 | 2022 | |||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | ||||||||
Deposits | ||||||||
Other current assets | ||||||||
Total current assets | ||||||||
Non-Current Assets: | ||||||||
Right of use assets, net | ||||||||
Property, plant and equipment, net | ||||||||
Total non-current assets | ||||||||
Total Assets |
The accompanying notes are an integral part of the financial statements.
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INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
UNAUDITED INTERIM CONDENSED STATEMENTS OF FINANCIAL POSITION
(U.S. dollars in thousands)
June 30, | December 31, | |||||||||||
Note | 2023 | 2022 | ||||||||||
LIABILITIES AND SHAREHOLDERS’ DEFICIT | ||||||||||||
Current Liabilities: | ||||||||||||
Trade accounts payable | ||||||||||||
Other accounts payable | 3 | |||||||||||
Lease liabilities | ||||||||||||
Financial liabilities at fair market value | 4 | |||||||||||
Total current liabilities | ||||||||||||
Non-Current Liabilities: | ||||||||||||
Lease liabilities | ||||||||||||
Loan from the Israeli Innovation Authority | ||||||||||||
Total non- current liabilities | ||||||||||||
Shareholders’ Equity: | ||||||||||||
Share capital and additional paid-in capital | 2 | |||||||||||
Foreign exchange reserve | ( | ) | ( | ) | ||||||||
Accumulated deficit | ( | ) | ( | ) | ||||||||
Total equity | ||||||||||||
Total Liabilities and Shareholders’ Equity |
September 27, 2023 | ||||
Yafit Tehila Chief Financial Officer |
Dagi Ben-Noon Chief Executive Officer |
Date of approval of financial statements |
The accompanying notes are an integral part of the financial statements.
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INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
UNAUDITED INTERIM CONDENSED STATEMENTS OF COMPREHENSIVE LOSS
(U.S. dollars in thousands)
Six months ended June 30, | Six months ended June 30, | |||||||
2023 | 2022 | |||||||
Research and development expenses | ||||||||
Sales and marketing expenses | ||||||||
General and administrative expenses | ||||||||
Operating loss | ||||||||
Finance income | ( | ) | ( | ) | ||||
Finance expense | ||||||||
Loss before tax | ||||||||
Taxes on income | ||||||||
Total net loss | ||||||||
Other comprehensive loss, net of tax: | ||||||||
Items that will not be reclassified to profit or loss: | ||||||||
Exchange losses arising on translation to presentation currency | ( | ) | ( | ) | ||||
Total comprehensive loss | ||||||||
Weighted average number of ordinary shares | ||||||||
( | ) | ( | ) |
The accompanying notes are an integral part of the financial statements.
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INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
UNAUDITED INTERIM CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(U.S. dollars in thousands)
For the six months ended June 30, 2023:
Ordinary Share Capital | ||||||||||||||||||||
Number of shares | Share Additional | Adjustments arising from translating financial operation | Accumulated deficit | Total | ||||||||||||||||
Balance at January 1, 2023: | ( | ) | ( | ) | ||||||||||||||||
Changes during the period: | ||||||||||||||||||||
Net loss | - | ( | ) | ( | ) | |||||||||||||||
Other comprehensive loss | - | ( | ) | ( | ) | |||||||||||||||
Total comprehensive loss | - | ( | ) | ( | ) | ( | ) | |||||||||||||
RSUs vesting | ||||||||||||||||||||
Share-based compensation | - | |||||||||||||||||||
Balance at June 30, 2023 | ( | ) | ( | ) |
For the six months ended June 30, 2022:
Ordinary Share Capital | ||||||||||||||||||||
Number of shares | Share Additional | Adjustments arising from translating financial operation | Accumulated deficit | Total | ||||||||||||||||
Balance at January 1, 2022: | ( | ) | ||||||||||||||||||
Changes during the period: | ||||||||||||||||||||
Net loss | - | ( | ) | ( | ) | |||||||||||||||
Other comprehensive loss | - | ( | ) | ( | ) | |||||||||||||||
Total comprehensive loss | - | ( | ) | ( | ) | ( | ) | |||||||||||||
Share based compensation to exercise | ||||||||||||||||||||
RSUs vesting | ||||||||||||||||||||
Share base compensation | - | |||||||||||||||||||
Balance at June 30, 2022 | ( | ) | ( | ) |
The accompanying notes are an integral part of the financial statements.
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INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
UNAUDITED INTERIM CONDENSED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands)
Six months ended June 30, 2023 | Six months ended June 30, 2022 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net loss | ( | ) | ( | ) | ||||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
Depreciation | ||||||||
Increase (decrease) in other current assets | ||||||||
Increase (decrease) in trade accounts payable | ( | ) | ||||||
Increase (decrease) in other accounts payable | ||||||||
Share based compensation | ||||||||
Change in fair market value of financial liabilities at fair market value | ( | ) | ||||||
Financial income | ( | ) | ( | ) | ||||
Financial expenses | ||||||||
Net cash used in operating activities | ( | ) | ( | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchase of property, plant and equipment | ( | ) | ( | ) | ||||
Change in deposits, net | ( | ) | ||||||
Change in restricted deposits | ( | ) | ||||||
Net cash provided investing activities | ( | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Principal paid on lease liabilities | ( | ) | ( | ) | ||||
Net cash provided financing activities | ( | ) | ( | ) | ||||
Net increase in cash and cash equivalents | ( | ) | ( | ) | ||||
Cash and cash equivalents at the beginning of the period | ||||||||
Effects of exchange rate changes on cash and cash equivalents | ( | ) | ( | ) | ||||
Cash and cash equivalents at the end of the period |
The accompanying notes are an integral part of the financial statements.
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INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
(U.S. dollars in thousands)
NOTE 1 – GENERAL:
1. | INSPIRA TECHNOLOGIES OXY B.H.N. LTD (formerly: INSENSE MEDICAL LTD) (the “Company”) was incorporated in Israel and commenced its operations on February 27, 2018. The Company’s functional currency is the New Israeli Shekel (“NIS”). |
The Company operates in the medical technology industry in the field of respiratory support technology. It is engaged in the research, development, manufacturing-related activities, and go-to-market activities of proprietary products and technologies. The Company is developing the following products:
(*) The INSPIRA ART500 (Augmented Respiratory Technology), a respiratory support technology geared towards utilizing direct blood oxygenation to boost patient saturation levels within minutes while the patient is awake and spontaneously breathing. The aim is to reduce the need for invasive mechanical ventilation, with the potential to reduce risks, complications and high costs.
(*) The HYLA blood sensor, a non-invasive optical blood sensor designed to perform real-time and continuous blood measurements, potentially minimizing the need to take actual blood samples from patients.
(*) The INSPIRA ART100, an advanced form of life support system, better known by the medical industry as a cardiopulmonary bypass system, is being designed for use in surgical procedures requiring cardiopulmonary bypass for six hours or less.
The Company’s products are in the development stage. The INSPIRA ART100 device and the INSPIRA ART500 have not yet been tested or used in humans and the Company’s products have not been approved by the U.S. Food and Drug Administration.
On July 16, 2021, the Company completed
its initial public offering (the “IPO”) on the Nasdaq Capital Market, whereby the Company sold
In October 2021, investors exercised
tradable warrants to purchase
2. | The Company has not generated any revenue since its inception and the Company is still in its development stage. The Company’s operating losses for the six-months ended June 30, 2023 and 2022 were $ |
3. | The Company’s management intends to raise additional funds through offerings of its securities, that will be utilized to fund product development and continue operations. |
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INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
(U.S. dollars in thousands)
NOTE 1 – GENERAL (Cont.):
On April 4, 2023, the Company, entered
into a sales agreement with Roth Capital Partners, LLC, as sales agent (the “Sales Agent”), pursuant to which the Company
may offer and sell, from time to time, through the Sales Agent, the Company’s Ordinary Shares, no par value per share (the “ATM”).
The Ordinary Shares shall be offered and sold pursuant to the Company’s Registration Statement on Form F-3 (the “Registration
Statement”) filed on August 10, 2022 and the prospectus supplement to the Registration Statement. The Company will pay the Sales
Agent a commission amounting to
4. | Management believes that the proceeds of its funding agreements, combined with its cash on hand and the Company’s plans to raise additional funds through the ATM facility or through other means, are sufficient to operate in the foreseeable future. |
5. | These interim condensed financial statements were authorized by the Company’s board of directors on September 27 2023. |
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES:
The principal accounting policies adopted in the preparation of the financial statements are set out below. The policies have been consistently applied to all the years presented, unless otherwise stated.
Basis of preparation
These interim condensed financial statements have been prepared in accordance with the International Accounting Standards (the “IAS”) 34 Interim Financial Reporting, as issued by the International Accounting Standards Board (IASB). They do not include all disclosures that would otherwise be required in a complete set of financial statements and should be read in conjunction with the 2022 annual financial statements filed with the Company’s annual report on Form 20-F filed with the U.S. Securities and Exchange Commission on March 31, 2023. The Company has applied the same accounting policies and methods of computation in its interim financial statements as in its 2022 annual financial statements.
Impact of accounting standards to be applied in future periods
There are a number of standards and interpretations which have been issued by the IAS board that are effective for periods beginning subsequent to December 31, 2023 (the date through which the Company’s next annual financial statements will be prepared up to) that the Company decided not to adopt early. The Company does not believe these standards and interpretations will have a material impact on the financial statements once adopted.
A number of amended standards became applicable for the current reporting period. The Company did not have to change its accounting policies or make retrospective adjustments as a result of adopting these amended standards:
1. | Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice Statement 2 |
2. | Definition of Accounting Estimates – Amendments to IAS 8 |
3. | Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction – Amendments to IAS 12 |
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INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
(U.S. dollars in thousands)
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.):
Amendments to IAS 1, Presentation of Financial Statements and IFRS Practice Statement 2, Making Materiality Judgement
On February 11, 2021, the IASB issued amendments to IAS 1, “Presentation of Financial Statements and IFRS Practice Statement 2, Making Materiality Judgement,” to provide guidance in determining which accounting policy to disclose. The amendments require entities to disclose material accounting policies rather than significant policies. The amendments clarify that accounting policy information is material if users of an entity’s financial statements would need it to understand other material information in the financial statements. In assessing the materiality of accounting policy information, entities need to consider both size of the transaction, other events or conditions and the nature of them, even if the related amounts are immaterial. The adoption of the amendments as of January 1, 2023, did not have an impact on the Company’s financial statements.
Amendments to IAS 8, Accounting Policies, Change in Accounting Estimates and Errors
On February 11, 2021, the IASB issued amendments to IAS 8, “Accounting Policies, Changes in Accounting Estimates and Errors,” to clarify how to distinguish changes in accounting policies, which must be applied retrospectively, from changes in accounting estimate, which are accounted for prospectively. The amendments clarify the definition of accounting estimates as “monetary amounts in the financial statements that are subject to measurement uncertainty.” The amendments clarify that a change in accounting estimate is a change in input or a change in a measurement technique used to develop an accounting estimate, if they do not result in the correction of a prior period error. The adoption of the amendments as of January 1, 2023, did not have an impact on the Company’s financial statements.
Amendments to IAS 12, Income Taxes
On May 6, 2021, the IASB released “Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction (Amendments to IAS 12).” The amendment relates to the recognition of deferred tax when an entity accounts for transactions, such as leases or decommissioning obligations, by recognizing both an asset and a liability. The objective of this amendment is to narrow the initial recognition exemption in paragraphs 15 and 24 of IAS 12, so that it would not apply to transactions that give rise to both taxable and deductible temporary differences, to the extent the amounts recognized for the temporary differences are the same. The adoption of the amendments as of January 1, 2023, did not have an impact on the Company’s financial statements.
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INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
(U.S. dollars in thousands)
NOTE 3 – OTHER ACCOUNTS PAYABLE:
June 30, 2023 | December 31, 2022 | |||||||
Employees’ salaries and related liabilities | ||||||||
Related parties | ||||||||
Accrued expenses | ||||||||
Other | ||||||||
Total |
NOTE 4 – FINACIAL LIABILITIES AT FAIR VALUE:
June 30, 2023 | December 31, 2022 | |||||||
Non-tradable warrants (1) | ||||||||
Non-tradable warrants of SAFE and Convertible Loan investors (2) | ||||||||
Tradable warrants (3) | ||||||||
Financial liability (4) | ||||||||
Total |
1. | Non-Tradable Warrants |
As part of an agreement signed in 2019,
the Company’s then convertible loan investors received, upon conversion in 2020,
The warrants shall
be converted into Ordinary Shares at an exercise price equal to the IPO price which was $
On July 2021, as part of the IPO, the investors received the specified warrants.
As of June 30, 2023, the fair market value of the warrants was $
2. | Non-tradable warrants, SAFE and Convertible Loan investors |
On July 16, 2021, following the IPO,
the Company issued
The non-tradable warrants were designated to be measured at fair market value through profit or loss.
The non-tradable warrants fair market
value as of June 30, 2023, was $
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INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
(U.S. dollars in thousands)
NOTE 4 – FINACIAL LIABILITIES AT FAIR VALUE (Cont.):
3. | Tradable warrants |
The Company sold
The tradable warrants fair market value
as of June 30, 2023, was $
4. | Financial liability |
Financial liability to pay
The fair market value as of June 30,
2023, was $
NOTE 5 – SHARE BASED COMPENSATION:
In December 2019, the Company established
a share option plan (the “Plan”). As of June 30, 2023, a total of
On March 24, 2022,
On March 24, 2022, the Company’s
board of directors granted options to purchase
On April 6, 2022, the Company’s
board of directors approved a grant of fully vested
On May 19, 2022, the Company’s
board of directors approved a grant of
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INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
(U.S. dollars in thousands)
NOTE 5 – SHARE BASED COMPENSATION (Cont.):
On November 22, 2022, the Company’s
board of directors approved a grant of
The fair market value of all granted options was estimated by using the Black-Scholes model, aimed at modelling the value of the Company’s assets over time. The simulation approach was designed to take into account the terms and conditions of the share options, as well as the capital structure of the Company and the volatility of its assets, on the date of grant based on certain assumptions. Those conditions are, among others:
(i) | The expected volatility is 50%; |
(ii) | The dividend rate 0%; and |
(iii) | Expected term – three years. |
The valuation was completed with the assistance of an external valuator based on the management’s assumptions.
During the six months ended June 30, 2023, the Company
recorded share-based payment expenses in the amount of $
Six months ended June 30, 2023 | ||||||||
Number of options | Weighted average Exercise price NIS | |||||||
Outstanding at beginning of year | ||||||||
Granted | ||||||||
Exercised | ||||||||
Forfeited | ||||||||
Outstanding as of June 30, 2023 | ||||||||
Exercisable options |
During the six-months ended June 30,
2023, the Company recorded share-based payment expenses of option to services providers and advisers in the amount of $
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INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
(U.S. dollars in thousands)
NOTE 5 – SHARE BASED COMPENSATION (Cont.):
Number of RSUs | ||||
Outstanding at beginning of year | ||||
Granted | ||||
Vested | ||||
Outstanding as of June 30, 2023 | ||||
Vested as of June 30, 2023 |
During the six months ended June 30,
2023, the Company recorded share-based payment expenses of RSUs to services providers and advisers in the amount of $
Six months ended June 30, 2023 | ||||||||
Number of options | Weighted average Exercise price NIS | |||||||
Outstanding at beginning of year | ||||||||
Forfeited | ||||||||
Outstanding as of June 30, 2023 | ||||||||
Exercisable options as of June 30, 2023 |
During the six-months ended June 30,
2023, the Company recorded share-based payment expenses of options to employees and directors in the amount of $
Number of RSUs | ||||
Outstanding at beginning of year | ||||
Granted | ||||
Forfeited | ( | ) | ||
Vested | ( | ) | ||
Outstanding as of June 30, 2023 | ||||
Vested as of June 30, 2023 |
During the six months ended June 30,
2023, the Company recorded share-based payment expenses of RSUs to employees and directors in the amount of $
During the six months ended June 30,
2022, the Company recorded share-based payment expenses in the amount of $
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INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
(U.S. dollars in thousands)
NOTE 5 - SHARE BASED COMPENSATION (Cont.):
Six months ended June 30, 2022 | ||||||||
Number of options | Weighted average exercise price in NIS | |||||||
Outstanding at beginning of year | ||||||||
Granted | ||||||||
Exercised | ( | ) | ||||||
Forfeited | ||||||||
Outstanding as of June 30, 2022 | ||||||||
Exercisable options |
During the six-months period ended
June 30, 2022, the Company recorded share-based payment expenses of option to services providers and advisers in the amount of $
Number of RSUs | ||||
Outstanding at beginning of year | ||||
Granted | ||||
Vested | ||||
Outstanding as of June 30, 2022 | ||||
Vested as of June 30, 2022 |
During the six-months period ended
June 30, 2022, the Company recorded share-based payment expenses of RSUs to services providers and advisers in the amount of $
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INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
(U.S. dollars in thousands)
NOTE 5 - SHARE BASED COMPENSATION (Cont.):
Six months ended June 30, 2022 | ||||||||
Number of options | Weighted average exercise price in NIS | |||||||
Outstanding at beginning of year | ||||||||
Forfeited | ( | ) | ||||||
Outstanding as of June 30, 2022 | ||||||||
Exercisable options |
During the six-months period ended
June 30, 2022, the Company recorded share-based payment expenses of options to employees and directors in the amount of $
Number of RSUs | ||||
Outstanding at beginning of year | ||||
Granted | ||||
Vested | ||||
Outstanding as of June 30, 2022 | ||||
Vested as of June 30, 2022 |
During the six-months ended June 30,
2022, the Company recorded share-based payment expenses of RSUs to employees and directors in the amount of $
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INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
(U.S. dollars in thousands)
NOTE 6 – FAIR MARKET VALUE MEASUREMENT:
Fair market value hierarchy
The following tables detail the Company’s assets and liabilities, measured or disclosed at fair market value, using a three-level hierarchy, based on the lowest level of input that is significant to the entire fair market value measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability.
As of June 30, 2023:
Level 1 | Level 2 | Level 3 | ||||||||||
Non-Tradable Warrants | ||||||||||||
Non-tradable warrants of SAFE and Convertible Loan investors | ||||||||||||
Financial liability | ||||||||||||
Tradable warrants | ||||||||||||
Total |
As of December 31, 2022:
Level 1 | Level 2 | Level 3 | ||||||||||
Non-Tradable Warrants | ||||||||||||
Non-tradable warrants of SAFE and Convertible Loan investors | ||||||||||||
Financial liability | ||||||||||||
Tradable warrants | ||||||||||||
Total |
As of June 30, 2023, the fair market value measurement of the warrant’s securities in the table above was estimated using the Black-Scholes model, based on assumptions for the variable that are required as of the warrants’ valuation date.
The key inputs that were used in the
both items of non-tradable warrants valuation were: a risk-free interest rate spread between
As of December 31, 2022, the fair market value measurement of the SAFE and the warrant’s securities in the table above was estimated using the Black Scholes model, based on a variety of significant unobservable inputs- thus representing a level 2 measurement within the fair market value hierarchy.
The key inputs that were used in the
both items of non-tradable warrants valuation were: a risk-free interest rate spread between
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INSPIRA TECHNOLOGIES OXY B.H.N. LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
(U.S. dollars in thousands)
NOTE 6 – FAIR MARKET VALUE MEASUREMENT (Cont.):
The carrying amounts of trade and other receivables and trade and other payables are assumed to approximate their fair market values due to their short-term nature.
NOTE 7 – COMMITMENTS AND CONTINGENCIES:
Commitments
1. | The Company has a bank guarantee in the amount of $ |
2. | In July 2022, the Company entered into an agreement with a contractor for the development of the HYLA™ blood sensor. The total payment agreed, per the contract, is $ |
Contingencies
1. | On March 4, 2022, Exchange Listing, LLC, or Exchange, filed a complaint in the federal United States District Court for the Southern District of New York against the Company and the Company’s Chief Financial Officer, Joe Hayon, in connection with a contract between the parties pursuant to which Exchange provided certain consultancy services to us in preparation for our IPO. The precise damages sought are not yet established. However, Exchange seeks approximately $250,000, plus 75,000 Ordinary Shares or the cash equivalent. On July 1, 2022, the Company filed a motion to dismiss for failure to state a claim upon which relief can be granted, or 12(b)(6) motion, based on the language of the contract between the parties. |
On March 8, 2023, the court issued an order granting our 12(b)(6) motion in part and denying it in part. Specifically, the court dismissed all claims against Joe Hayon, and he is no longer a party in the action. The court also dismissed the breach of contract action (Count I) to the extent it was based on improper termination or frustration. The Court also dismissed Count IV (Quantum Merit on the written agreement), Count VI (Breach of Implied Covenant of Good Faith) and Count VII (Fraud in the Inducement). The court has not dismissed Count 1 (breach of written agreement based on alleged anticipatory repudiation), Count II (breach of alleged oral agreement), Count III (promissory estoppel to the extent based on alleged oral agreement) or Count V (quantum meruit based on alleged oral agreement).
On June 29, 2023, the Company and
Exchange signed a settlement agreement. The Company agreed to pay Exchange $
2. | On December 12, 2021, the Company terminated its employment agreement with Dr. Udi Nussinovitch, one of its founders who served as the Company’s Chief Scientific Officer since March 2018. On February 24, 2022, the Company sued Mr. Nussinovitch for breach good faith and his fiduciary duties as a shareholder and former officer of the Company. On November 9, 2022, the Company received notice of a complaint filed by Mr. Nussinovitch, as well as a complaint filed with the regional labor court in Tel Aviv on November 8, 2022. Mr. Nussinovitch has alleged certain deficiencies in the Company’s Extraordinary General Meeting of Shareholders held on Friday, December 17, 2021, resulting from his status as a minority shareholder. In addition, with respect to the labor dispute, Mr. Nussinovitch is seeking renumeration and the issuance of Ordinary Shares. A partial hearing was held on July 19. 2023, and the parties were required by the court to file their positions on a stay of the proceeding pending the decision on the case initiated by the Plaintiff in the District Court. The Company strongly disagrees with the claims, believes it has meritorious defenses and will vigorously defend itself against the claims. |
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