Full Press Release Details
FINANCIAL STATEMENTS
DOLLARS IN THOUSANDS
| Page | |
| Condensed Balance Sheets | 2 |
| Condensed Statements of Comprehensive Loss | 3 |
| Condensed Statement of Changes in Convertible Preferred Shares and Shareholders' Deficit | 4 |
| Condensed Statements of Cash Flows | 5 |
| Notes to Condensed Financial Statements | 6 - 12 |
- - - - - - - - - - - - - -
BALANCE SHEETS (UNAUDITED)
dollars in thousands (except share and per share data)
| As of June 30, | As of December 31, | |||||||||||
| Note | 2020 | 2019 | ||||||||||
| Assets | ||||||||||||
| Current assets: | ||||||||||||
| Cash and cash equivalents | $ | 544 | $ | 941 | ||||||||
| Restricted cash | 6 | 6 | ||||||||||
| Other current assets | 14 | 25 | ||||||||||
| Total current assets | 564 | 972 | ||||||||||
| Property and equipment, net | (*) | (*) | ||||||||||
| Other non-current assets | 274 | 192 | ||||||||||
| Total assets | $ | 838 | $ | 1,164 | ||||||||
| Liabilities and shareholders' deficit | ||||||||||||
| Current liabilities: | ||||||||||||
| Trade payables | $ | 13 | $ | - | ||||||||
| Other accounts payable | 62 | 166 | ||||||||||
| August and December 2019 Convertible notes | 5b | 1,452 | 1,032 | |||||||||
| Convertible notes | 5a | 5,342 | 5,141 | |||||||||
| Total current liabilities | 6,869 | 6,339 | ||||||||||
| Non-current liabilities: | ||||||||||||
| Derivative warrant liability | 4 | 1,512 | 447 | |||||||||
| Total non-current liabilities | 1,512 | 447 | ||||||||||
| Temporary equity: | ||||||||||||
| Convertible preferred shares, NIS 0.03 par value; Authorized: 18,300,000 shares; Issued and outstanding: 2,954,267 shares; Aggregate liquidation preference of $15,846 and $15,250 as of June 30, 2020 and December 31, 2019, respectively | 6,621 | 6,621 | ||||||||||
| Shareholders' deficit: | ||||||||||||
| Ordinary shares, NIS 0.03 par value; Authorized: 4,700,000 shares; Issued and outstanding: 576,556 shares; | 5 | 5 | ||||||||||
| Additional paid-in capital | 222 | 180 | ||||||||||
| Accumulated deficit | (14,391 | ) | (12,428 | ) | ||||||||
| Total shareholders' deficit | (14,164 | ) | (12,243 | ) | ||||||||
| Total liabilities, temporary equity and shareholders' deficit | $ | 838 | $ | 1,164 |
accompanying notes are an integral part of the condensed financial statements (the "Financial Statements").
STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)
dollars in thousands (except share and per share data)
| Six months ended June 30, | ||||||||||||
| Note | 2020 | 2019 | ||||||||||
| Operating expenses: | ||||||||||||
| Research and development expenses | $ | (65 | ) | $ | (31 | ) | ||||||
| General and administrative expenses | (215 | ) | (210 | ) | ||||||||
| Operating loss | (280 | ) | (241 | ) | ||||||||
| Financial expense, net | 9 | (1,683 | ) | (185 | ) | |||||||
| Net loss and comprehensive loss | $ | (1,963 | ) | $ | (426 | ) | ||||||
| Basic and diluted net loss per share | 6 | $ | (4.44 | ) | $ | (1.69 | ) | |||||
| Weighted average number of shares of ordinary share used in computing basic and diluted net loss per share | 576,556 | 576,556 |
accompanying notes are an integral part of the condensed financial statements (the "Financial statements").
STATEMENT OF CHANGES IN CONVERTIBLE PREFERRED SHARES AND
SHAREHOLDERS' DEFICIT (UNAUDITED)
dollars in thousands (except share data)
| Convertible preferred shares | Ordinary shares | Additional paid-in | Accumulated | Total shareholders' | ||||||||||||||||||||||||
| Number | Amount | Number | Amount | capital | deficit | deficit | ||||||||||||||||||||||
| Balance as of January 1, 2020 | 2,954,267 | $ | 6,621 | 576,556 | $ | 5 | $ | 180 | $ | (12,428 | ) | $ | (12,243 | ) | ||||||||||||||
| Share-based compensation | - | - | - | - | 26 | - | 26 | |||||||||||||||||||||
| Operating lease provided by controlling shareholder | - | - | - | - | 16 | - | 16 | |||||||||||||||||||||
| Net loss and comprehensive loss | - | - | - | - | - | (1,963 | ) | (1,963 | ) | |||||||||||||||||||
| Balance as of June 30, 2020 | 2,954,267 | $ | 6,621 | 576,556 | $ | 5 | $ | 222 | (14,391 | ) | $ | (14,164 | ) |
| Convertible preferred shares | Ordinary shares | Additional paid-in | Accumulated | Total shareholders' | ||||||||||||||||||||||||
| Number | Amount | Number | Amount | capital | deficit | deficit | ||||||||||||||||||||||
| Balance as of January 1, 2019 | 2,954,267 | $ | 6,621 | 576,556 | $ | 5 | $ | 66 | $ | (11,149 | ) | $ | (11,078 | ) | ||||||||||||||
| Share-based compensation | - | - | - | - | 24 | - | 24 | |||||||||||||||||||||
| Net loss and comprehensive loss | - | - | - | - | - | (426 | ) | (426 | ) | |||||||||||||||||||
| Balance as of June 30, 2019 | 2,954,267 | $ | 6,621 | 576,556 | $ | 5 | $ | 90 | $ | (11,575 | ) | $ | (11,480 | ) |
accompanying notes are an integral part of the condensed financial statements (the "Financial statements").
STATEMENTS OF CASH FLOWS (UNAUDITED)
dollars in thousands
| Six months ended June 30, | ||||||||
| 2020 | 2019 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | (1,963 | ) | $ | (426 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation | (* | ) | (* | ) | ||||
| Share-based compensation | 26 | 24 | ||||||
| Accrued interest and amortization of discount on convertible notes | 621 | 184 | ||||||
| Revaluation of derivative warrant liability | 1,065 | - | ||||||
| Operating lease provided by controlling shareholder | 16 | - | ||||||
| Change in: | ||||||||
| Other current assets | 11 | 14 | ||||||
| Trade payables | 13 | (2 | ) | |||||
| Other accounts payable | (104 | ) | 13 | |||||
| Net cash used in operating activities | (315 | ) | (193 | ) | ||||
| Cash flows from investing activities | ||||||||
| Net cash provided by investing activities | - | - | ||||||
| Cash flows from financing activities | ||||||||
| Payment of financing fees in connection with initial public offering | (82 | ) | - | |||||
| Proceeds from issuance of convertible notes | - | 241 | ||||||
| Net cash provided by financing activities | (82 | ) | 241 | |||||
| Change in cash, cash equivalents and restricted cash | (397 | ) | 48 | |||||
| Cash, cash equivalents and restricted cash at the beginning of the year | 947 | 46 | ||||||
| Cash, cash equivalents and restricted cash at the end of the period | $ | 550 | $ | 94 |
accompanying notes are an integral part of the condensed financial statements (the "Financial Statements").
TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
dollars in thousands, except share and per share data
accompanying financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and
satisfaction of liabilities in the normal course of business. Since its inception, the Company has devoted substantially all of
its efforts to research and development, clinical trials, and capital raising activities. The Company is still in the research
and development pre-clinical phase and has not yet generated revenues. The Company incurred losses of $1,963 for the six months
ended June 30, 2020. As of June 30, 2020, the Company's accumulated deficit was $14,391. The Company has funded its operations
to date primarily through equity financing and the issuance of convertible notes.
funding will be required to complete the Company's research and development activities, performance of clinical trials,
to attain regulatory approvals, to begin the commercialization efforts of the Company's product and to achieve a level of
sales adequate to support the Company's cost structure.
While the Company has been
successful in raising financing to date, there can be no assurance that it will be able to successfully obtain additional financing
expects that the Company will continue to generate losses from the development, clinical development and regulatory activities
of its product, which will result in negative cash flows from operating activities. The Company's financial statements do
not reflect any adjustments that might result from the outcome of this uncertainty.
TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
dollars in thousands, except share and per share data
financial statements should be read in conjunction with the audited financial statements and the accompanying notes of the
Company for the year ended December 31, 2019 included in the Company's prospectus filed with the SEC pursuant to Rule
424(b)(4) on September 2, 2020. The significant accounting policies applied in the annual financial statements of the Company
as of December 31, 2019, are applied consistently in these condensed financial statements, except for the following:
August 2018, the FASB issued ASU 2018-13, Fair Value Measurement - Disclosure Framework (Topic 820). The updated guidance improves
the disclosure requirements on fair value measurements. The updated guidance if effective for fiscal years, and interim periods
within those fiscal years, beginning after December 15, 2019. The implementation of the updated guidance did not have a significant
effect on Company's condensed financial statements.
accompanying balance sheet as of June 30, 2020, the statements of comprehensive loss, the statements of cash flows and the
statement of changes in convertible preferred shares and shareholders' equity for the six months ended June 30, 2020
and 2019, are unaudited.
accompanying unaudited financial statements have been prepared in a condensed format and include the unaudited financial operations
of the Company as of June 30, 2020 and for the six months period then ended, in accordance with U.S. GAAP, relating to the preparation
of financial statements for interim periods.
the accompanying unaudited financial statements do not include all the information and footnotes required by generally
accepted accounting principles for complete set of financial statements. These unaudited financial statements should be read
in conjunction with the audited financial statements and the accompanying notes of the Company for the year ended December
31, 2019 included in the Company's prospectus filed with the SEC pursuant to Rule 424(b)(4) on September
2, 2020. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the six months ended June 30, 2020, are not necessarily
indicative of the results that may be expected for the year ended December 31, 2020.
TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
dollars in thousands, except share and per share data
August and December, 2019, the Company issued warrants related to its convertible notes (refer to Note 5(b)). As the warrants
did not meet the US GAAP criteria for equity classification, they were classified as liabilities and measured at fair value on
the issuance date and in each reporting date with changes in fair value recognized as finance expenses in the statements of comprehensive
loss. Following the Company's IPO on September 3, 2020, whereby the exercise price of the warrants became
fixed and there were no other features that resulted in liability classification, the warrants were reclassified to equity.
summary of significant unobservable inputs (Level 3 inputs) used in measuring the warrants issued as of June 30, 2020 and December
31, 2019 is as follows:
| June 30, 2020 | December 31, 2019 | |||||||
| Exercise price | $ | 6.72 | $2.55-$4.74 | |||||
| Expected volatility | 75 | % | 72.29 | % | ||||
| Risk free rate | 0.29 | % | 1.5%-1.67% | |||||
| Expected life (years) | 5 | 4.65-5 | ||||||
| Dividend yield | 0 | % | 0 | % |
The following table presents changes in the fair value of the
derivative warrant liability recorded in respect of the warrants:
| Balance as of December 31, 2019 | $ | 447 | ||
| Changes in fair value | 1,065 | |||
| Balance as of June 30, 2020 | $ | 1,512 |
TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
dollars in thousands, except share and per share data
the event that the notes were not earlier converted or paid, then, the Company would have been required to
pay the accrued amount by the end of the note term on December 31, 2020.
Company concluded the conversion feature is not a beneficial conversion feature pursuant to the provisions of ASC 470-20, "Debt
with Conversion and Other Options." Accordingly, the proceeds were recorded in liabilities in their entirety at the date
prior to the initial public offering ("IPO"), the convertible note holders delivered written notice to the Company to convert the
notes held into 2,415,022 Series A preferred Shares at the original conversion price.
TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
dollars in thousands, except share and per share data
loss per share is calculated based on the weighted average number of ordinary shares outstanding during each period.
outstanding share options, 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.
loss and the weighted average number of shares used in computing basic and diluted net loss per share is as follows:
| Six months ended June 30, | ||||||||
| 2020 | 2019 | |||||||
| Numerator: | ||||||||
| Net loss applicable to shareholders of ordinary shares | $ | (1,963 | ) | $ | (426 | ) | ||
| Interest accrued on preferred shares | (597 | ) | (549 | ) | ||||
| Total loss attributed to ordinary shares | (2,560 | ) | (975 | ) | ||||
| Denominator: | ||||||||
| Shares of ordinary share used in computing basic and diluted net loss per share | 576,556 | 576,556 | ||||||
| Net loss per share of ordinary share, basic and diluted | $ | (4.44 | ) | $ | (1.69 | ) |
The sublease ceased as of August
2019, and since then the Company was provided with an office space at no cost by Medica Venture Partners. For the six months ended
June 30, 2020 the Company recorded an amount of $16 as a lease expense and a corresponding increase in additional paid in capital,
representing a contribution from its controlling shareholder.
options outstanding and exercisable to employees and directors under the 2008 Plan as of June 30, 2020 and December 31, 2019
| Number of options | Weighted average exercise price | Weighted average remaining contractual life | ||||||||||
| Options outstanding as of December 31, 2019 | 153,882 | $ | 0.24 | 4.25 | ||||||||
| Options outstanding as of June 30, 2020 | 153,882 | $ | 0.24 | 3.75 | ||||||||
| Options exercisable as of June 30, 2020 | 153,882 | $ | 0.24 | 3.75 |
TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
dollars in thousands, except share and per share data
options outstanding and exercisable to employees and directors under the 2019 Plan as of June 30, 2020 and December 31, 2019,
| As of June 30, 2020 | ||||||||||||
| Number of options | Weighted average exercise price | Weighted average remaining contractual life | ||||||||||
| Options outstanding as of June 30, 2020 | 219,456 | $ | 2.62 | 9.06 | ||||||||
| Options exercisable as of June 30, 2020 | 187,478 | $ | 2.49 | 9.06 |
| As of December 31, 2019 | ||||||||||||
| Number of options | Weighted average exercise price | Weighted average remaining contractual life | ||||||||||
| Granted | 219,456 | $ | 2.62 | 10 | ||||||||
| Options outstanding as of December 31, 2019 | 219,456 | $ | 2.62 | 9.56 | ||||||||
| Options exercisable as of December 31, 2019 | 147,235 | $ | 2.26 | 9.56 |