| SHAREHOLDERS’ EQUITY |
|
NOTE 10 - |
SHAREHOLDERS’
EQUITY |
|
(1) |
The ordinary shares confer upon the holders
the right to receive notice to participate and vote in general meetings of shareholders of
the Company, the right to receive dividends, if declared, and the right to participate in
the distribution of the surplus assets of the Company in an event of liquidation. |
|
(2) |
Public and private placements: |
On August 5, 2020, the Company raised
$6,067 (gross) through a public offering of 5,175,000 ordinary shares at $1.168 per share. After deducting closing costs and fees, the
Company received proceeds of approximately $5,847.
On January 27, 2021, the Company entered,
subject to the approval of the general meeting of shareholders, into a series of share purchase agreement with its controlling shareholder,
Epoch Partner Investments Limited, for a total of $7,500, Alpha Capital Anstalt , for a total of $4,000, Clover Wolf Capital Limited
Partnership for a total of $3,100 and Clover Alpha L.P for a total of $400. According to the agreements, the investors will invest in
two tranches a total of $15,000, and in return the Company will issue to the investors a total of 11,485,697 ordinary shares at a share
price of $1.304, reflecting a 20% discount on the average closing price of the Company’s share in the seven trading days preceding
the date of the transaction’s approval by the Board. The first tranche of $9,000 (60% of the total investment) was received following
the approval of the Company’s shareholders at a general meeting of the shareholders, on March 7, 2021 (“the first Closing
Date”), and the Company issued 6,891,418 shares.
The second tranche of $6,000 was due
following the approval of the listing of the Company’s securities on Nasdaq (the “Second Closing Milestone” and such
date, “the Second Closing Date”). In May 2021, the Company and the investors agreed to execute the second tranche prior to
the achievement of the Second Closing Milestone, and the second tranche of $6,000 was received on May 9, 2021. Accordingly, the Company
issued to the investors 4,594,279 shares.
On December 13, 2021, the Company
raised $16,994 (gross) through a public offering of 3,892,152 ordinary shares inclusive of 578,325 shares offered pursuant to the underwriters’
over-allotment option, at a price to the public of $3.45 per share, gross, and to certain investors in lieu of ordinary shares, pre-funded
warrants to purchase up to an aggregate of 1,034,000 ordinary shares at a price of $3.449 per pre-funded warrant. The exercise price
for each such pre-funded warrant to ordinary share is $0.001. After deducting closing costs underwriting discounts and fees, the Company
received proceeds of approximately $15,966.
The pre-funded warrants were classified
as a component of permanent equity because they met the permanent equity criteria classification. The pre-funded warrants are freestanding
financial instruments that are legally detachable and separately exercisable from the ordinary shares with which they were issued, are
immediately exercisable and grant the holders the right to receive a fixed number of ordinary shares upon exercise. The pre-funded warrants
do not embody an obligation for the Company to repurchase its shares and do not provide any guarantee of value or return.
|
(3) |
On September 13, 2020 the Company’s general meeting of shareholders approved the increase of the Company’s authorized share capital to 2,500,000,000 shares and canceled the shares par value. |
|
(4) |
On August 8, 2021, the Company completed a reverse stock split of its ordinary shares. As a result of the reverse stock split, the following changes have occurred (i) every eight shares have been combined into one share; (ii) the number of shares underlying each option have been proportionately decreased on a 8-for-1 basis, and the exercise price of each such outstanding share option has been proportionately increased on a 8-for-1 basis. Accordingly, all option numbers, share numbers, share prices, exercise prices and losses per share have been adjusted within these consolidated financial statements, on a retroactive basis, to reflect this 8-for-1 reverse stock split. |
In 2009, the Company has forfeited 5,434
ordinary shares at a value of approximately $41.
In 2021, the Company has canceled these
shares.
|
C. |
Shares and
options to employees: |
|
(1) |
The fair value of options granted was estimated
using the Black-Scholes option pricing model, and based on the following assumptions: |
| |
|
For the
year ended
December 31, |
|
For the
year ended
December 31, |
| |
|
2021 |
|
2020 |
| Exercise price |
|
$1.69 - $8.75 |
|
$1.56 - $1.77 |
| Expected volatility |
|
89.8% - 96.1% |
|
88.77% - 90.84% |
| Risk-free interest |
|
0.67% - 1.02% |
|
0.4% - 0.46% |
| Expected life of up to (years) |
|
6.22 |
|
6.2 |
|
(2) |
The following table summarizes the option
activity for the years ended December 31, 2021 and 2020 for options granted to employees,
officers and members of the Company’s Board of Directors (“the Board”): |
| |
|
Number of
Share
Options |
|
|
Weighted
Average
Exercise
Price Per
Share |
|
|
Weighted
Average
Remaining
Contractual
Term
(in years) |
|
| Balance as of January 1, 2020 |
|
|
1,272,615 |
|
|
$ |
1.52 |
|
|
|
|
|
| Granted |
|
|
370,351 |
|
|
$ |
1.60 |
|
|
|
|
|
| Expired |
|
|
(35,788 |
) |
|
$ |
1.60 |
|
|
|
|
|
| Forfeited |
|
|
137,667 |
) |
|
$ |
1.68 |
|
|
|
|
|
| Exercised |
|
|
(13,750 |
) |
|
$ |
0.88 |
|
|
|
|
|
| Balance as of December 31, 2020 |
|
|
1,455,761 |
|
|
$ |
1.68 |
|
|
|
7.69 |
|
| Granted |
|
|
108,929 |
|
|
$ |
2.02 |
|
|
|
|
|
| Expired |
|
|
(13,875 |
) |
|
$ |
2.94 |
|
|
|
|
|
| Forfeited |
|
|
(24,635 |
) |
|
$ |
1.85 |
|
|
|
|
|
| Exercised |
|
|
(189,700 |
) |
|
$ |
2.06 |
|
|
|
|
|
| Balance as of December 31, 2021 |
|
|
1,336,480 |
|
|
$ |
1.64 |
|
|
|
7.03 |
|
| Exercisable at the end of year |
|
|
858,994 |
|
|
$ |
1.55 |
|
|
|
6.36 |
|
As of December 31, 2021, a total of 846,105
outstanding and exercisable options are “in the money” with aggregate intrinsic value of $1,321.
The weighted average fair value of options
granted during the year ended December 31, 2021, was $6.89 per share.
|
(3) |
Options granted during 2020 and 2021: |
|
(a) |
On June 4, 2020, the Company granted 142,594 options to purchase an aggregate of 142,594 ordinary shares to 27 employees of the Company, at an exercise price of $1.68 per share. The options will vest in four equal installments over a period of four years from the date of grant. The options are exercisable for 10 years from the date of grant. |
|
(b) |
On August 30, 2020, the Company granted 170,258 options to purchase an aggregate of 170,258 ordinary shares to six officers of the Company, as follows: 27,333 options for the Company’s CEO, and 142,925 options for five officers of the Company, at an exercise price of $1.52 per share. The CEO’s options will vest in 16 equal quarterly installments over a period of four years from the date of grant. The officer’s options will vest as follows: a quarter after one year and the rest will vest in 12 equally quarterly installments over a period of three years from August 30, 2021. The options are exercisable for 10 years from the date of grant. |
|
(c) |
On October 28, 2020, the Company granted 57,500 options to purchase an aggregate of 57,500 ordinary shares to 2 officers of the Company, as follows: 32,500 options for the Company’s CEO, and 25,000 options for the Chairman of the Board of Directors, at an exercise price of $1.60 per share. The options will vest as follows: a quarter after one year and the rest will vest in 12 equal quarterly installments over a period of three years from October 28, 2021. The options are exercisable for 10 years from the date of grant. |
|
(d) |
In January 2021, the Company granted 100,000 options to purchase an aggregate of 100,000 ordinary shares to a member of the Company’s Board of directors, at an exercise price of $1.60 per share. The options will vest as follows: |
|
a. |
25,000 options - a quarter after one
year and the rest will vest in 12 equal quarterly installments over a period of three years
from December 13, 2020. |
|
b. |
75,000 options- based
on target achievement:
|
|
i. |
37,500
options will vest and become exercisable, on the date
of receipt by the company of two regulatory approvals in China from the NMPA (National Medical
Products Administration) for the marketing and sale of ProSense product and for the sale
of probes of the company, and no later than December 31, 2022.
|
|
ii. |
37,500
options will vest and become exercisable, with the sale of a Consoles and Probes as
determined in the options agreemet in one calendar year in Chinese territory, and no later
than the end of 2024. |
The options are exercisable for 10 years
from the date of grant.
|
(e) |
On April 28, 2021, the Company granted 8,929 options to purchase an aggregate of 8,929 ordinary shares to five officers of the Company, as follows: 4,319 options for the Company’s CEO, and 4,610 options for four officers, at an exercise price of $5.76 per share. The options will vest as follows: a quarter after one year and the rest will vest in 12 equal quarterly installments over a period of three years from April 28, 2022. The options are exercisable for 10 years from the date of grant. |
|
(4) |
The total share-based compensation the
Company recognized for share-based payments is as follows: |
| |
|
Year ended
December 31, |
|
|
Year ended
December 31, |
|
| |
|
2021 |
|
|
2020 |
|
| Cost of revenues |
|
|
15 |
|
|
|
16 |
|
| Sales and marketing |
|
|
15 |
|
|
|
26 |
|
| Research and development |
|
|
109 |
|
|
|
67 |
|
| General and administrative |
|
|
177 |
|
|
|
120 |
|
| |
|
|
316 |
|
|
|
229 |
|
As of December 31,
2021, the total unrecognized share-based compensation cost, related to non-vested share option grant arrangements under the plan was
$217. This cost is expected to be recognized over the remaining vesting period of four years, until the end of December 31, 2025.
|