☐
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REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
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☒
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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 December 31, 2019 |
☐
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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
Date of event requiring this shell company report ___ |
Title of each class
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Trading Symbol
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Name of each exchange on which registered
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Ordinary Shares, par value of NIS 0.0000769
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ENTX
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NASDAQ Capital Market
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Warrants, each warrant exercisable for 0.5 shares of Ordinary Shares at an exercise price of $5.85 per Ordinary Share.
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ENTXW
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NASDAQ Capital Market
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Large Accelerated Filer ☐
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Accelerated Filer ☐
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Non-Accelerated Filer ☒
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Emerging growth company ☒
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U.S. GAAP ☐
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International Financial Reporting Standards as issued by the
International Accounting Standards Board ☒
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Other ☐
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Item Number
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Title
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Page
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PART ONE
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7 | ||
7 |
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7 |
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53 |
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96 |
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96 |
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108 |
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125 |
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132 |
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132 |
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133 |
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147 |
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148
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PART TWO
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|
|
|
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148
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148 |
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148 |
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149 |
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149 |
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150 |
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150 |
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150 |
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150 |
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150 |
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155
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PART THREE
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156
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||
156
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||
157
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• |
the scope, progress and costs of developing our product candidates such as EB613 for Osteoporosis and EB 612 for Hypoparathyroidism;
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• |
the accuracy of our estimates regarding expenses, capital requirements, the sufficiency of our cash resources and the need for additional financing;
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• |
our ability to raise additional funds on commercially reasonable terms;
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• |
our ability to develop, advance product candidates into, and successfully complete, clinical studies such as our ongoing Phase 2 clinical trial of EB613 in osteoporosis;
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• |
our reliance on third parties to conduct our clinical trials and on third-party suppliers to supply or produce our product candidates;
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• |
our expectations regarding licensing, business transactions and strategic collaborations;
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• |
our operation as a development stage company with limited operating history and a history of operating losses and our ability to fund our operations going forward;
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• |
our ability to continue as a going concern absent access to sources of liquidity;
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• |
our interpretation of FDA feedback and guidance and how such guidance may impact our clinical development plans, specifically our ability to utilize the 505(b)(2) pathway for the development and potential approval of EB613 and any
other product candidates we may develop;
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• |
our ability to obtain and maintain regulatory approval for any of our product candidates;
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• |
our competitive position, especially with respect to Forteo® and other products on the market
or in development for the treatment of osteoporosis;
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• |
our ability to establish and maintain development and commercialization collaborations;
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• |
any potential commercial launch of current or future product candidates, and the timing, cost or other aspects of such commercialization;
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• |
our ability to manufacture and supply sufficient amounts of material to support our clinical trials and any potential future commercial requirements;
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• |
our ability to use and expand our drug delivery technology to additional product candidates;
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• |
the safety and efficacy of therapeutics marketed by competitors that are targeted toward indications for which we are developing product candidates;
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• |
the size of any market we may target and the adoption of our product candidates, if approved, by physicians and patients;
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• |
our ability to obtain, maintain and protect our intellectual property and operate our business without infringing misappropriating or otherwise violating any intellectual property rights of others;
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• |
our ability to retain key personnel and recruit additional qualified personnel;
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• |
the possibility that competing products or technologies may make any product candidates we may develop and commercialize or our oral delivery technology obsolete;
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• |
the pricing and reimbursement of our product candidates, if approved;
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• |
our ability to develop a sales, marketing and distribution infrastructure, if any;
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• |
our ability to manage growth; and
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• |
the duration and severity of the recent coronavirus (COVID-19) outbreak, the actions that may be required to contain the Coronavirus or treat its impact, and its impact on our operations and workforce, including our research and
development and clinical trials.1
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Year Ended December 31,
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|||||||||||||||
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2019
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2018
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2017
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2016
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||||||||||||
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(In thousands, except shares and per share data)
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|||||||||||||||
Consolidated statements of comprehensive loss:
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|
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||||||||||||||
Revenue
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$
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236
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$
|
500
|
-
|
-
|
||||||||||
Cost of revenue
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210
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-
|
-
|
-
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||||||||||||
Research and development expenses, net
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$
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7,199
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$
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8,518
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$
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2,768
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$
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2,648
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||||||||
General and administrative expenses
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4,281
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2,843
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8,575
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2,719
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||||||||||||
Total operating loss
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11,454
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10,861
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11,343
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5,367
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||||||||||||
Financial income:
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|
|
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|||||||||||||
Income from change in fair value of financial liabilities at fair value through profit or loss
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(743
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)
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(523
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)
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(251
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)
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(4,311
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)
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||||||||
Other financial expenses (income), net
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84
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(34
|
)
|
105
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143
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|||||||||||
Financial income, net
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(659
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)
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(557
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)
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(146
|
)
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(4,168
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)
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||||||||
Net comprehensive loss
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$
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10,795
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$
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10,304
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$
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11,197
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$
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1,199
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Loss per ordinary share(1)
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|
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|||||||||||||
Basic
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$
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0.89
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$
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1.30
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$
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2.49
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$
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0.27
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||||||||
Diluted
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$
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0.89
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$
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1.31
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$
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2.49
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$
|
0.78
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||||||||
Weighted average number of Ordinary Shares used in computing basic loss per ordinary share(1)
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12,146,729
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7,955,447
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4,490,720
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4,473,170
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||||||||||||
Weighted average number of Ordinary Shares used in computing diluted loss per ordinary share(1)
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12,146,729
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7,983,402
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4,490,720
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6, 756,360
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As of December 31,
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||||||||||||||||
2019 | 2018 | 2017 | 2016 | |||||||||||||
(In thousands)
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||||||||||||||||
Consolidated statements of financial position data:
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|||||||||||||||
Cash and cash equivalents
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15,185
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7,506
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11,746
|
4,163
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||||||||||||
Short-term bank deposits
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-
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4,015
|
-
|
-
|
||||||||||||
Restricted deposits
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-
|
-
|
-
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1,075
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||||||||||||
Accounts receivable
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278
|
725
|
-
|
-
|
||||||||||||
Other current assets
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173
|
220
|
671
|
195
|
||||||||||||
Total current assets
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15,636
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12,466
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12,417
|
5,433
|
||||||||||||
Property and equipment
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202
|
224
|
207
|
199
|
||||||||||||
Right of use assets
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260
|
-
|
-
|
-
|
||||||||||||
Intangible assets
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605
|
651
|
654
|
654
|
||||||||||||
Total assets
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$
|
16,703
|
$
|
13,341
|
$
|
13,278
|
$
|
6,286
|
||||||||
Accounts payable-Trade and other
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1,704
|
1,563
|
2,020
|
657
|
||||||||||||
Lease liabilities
|
177
|
|||||||||||||||
Contract liabilities
|
267
|
225
|
-
|
-
|
||||||||||||
Convertible Loans
|
-
|
-
|
3,893
|
14,720
|
||||||||||||
Preferred shares
|
-
|
-
|
33,455
|
11,031
|
||||||||||||
Warrants to purchase Ordinary Shares
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||||||||||||||||
and preferred shares
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2,444
|
1,372
|
5,398
|
4,800
|
||||||||||||
Total current liabilities
|
4,592
|
3,160
|
44,766
|
31,208
|
||||||||||||
Liability to issue preferred shares and warrants
|
-
|
-
|
-
|
273
|
||||||||||||
Lease liabilities
|
122
|
-
|
-
|
-
|
||||||||||||
Severance pay obligations, net
|
70
|
65
|
70
|
51
|
||||||||||||
Total non-current liabilities
|
192
|
65
|
70
|
324
|
||||||||||||
Total liabilities
|
$
|
4,784
|
$
|
3,225
|
$
|
44,836
|
$
|
31,532
|
||||||||
Shareholders’ equity (Capital deficiency)
|
$
|
11,919
|
$
|
10,116
|
$
|
(31,558
|
) |
$
|
(25,246)
|
|||||||
Working capital(1)
|
$
|
11,044
|
$
|
9,306
|
$
|
(32,349
|
) |
$
|
(25,775)
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• |
the number and characteristics of product candidates that we pursue;
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• |
the scope, progress, timing, cost and results of research, preclinical development, and clinical trials;
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• |
the costs, timing and outcome of seeking and obtaining approvals from the FDA, EMA or other regulatory agencies;
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• |
the costs associated with manufacturing our product candidates and establishing sales, marketing, and distribution capabilities;
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• |
the costs associated with obtaining, maintaining, expanding, defending and enforcing the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make in connection with the
licensing, filing, defense and enforcement of any patents or other intellectual property rights;
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• |
the extent to which we acquire or in-license other products or technologies;
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• |
the economic and other terms, timing of and success of any collaboration, licensing, or other arrangements into which we entered or may enter in the future, including the timing of achievement of milestones and receipt of any
milestone or royalty payments under these agreements;
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• |
our need and ability to hire additional management, scientific, and medical personnel;
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• |
the effect of competing products that may limit market penetration of our product candidates;
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• |
the amount and timing of revenues, if any, we receive from commercial sales of any product candidates for which we receive marketing approval in the future;
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our need to implement additional internal systems and infrastructure, including financial and reporting systems to support our current operations as a public company; and
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the impact of COVID-19, once known, on our clinical trials, regulatory timelines, business operations and financial stability.
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• |
complete our ongoing Phase 2 dose-ranging clinical trial for EB613 and any future development efforts for EB613 or other product candidates;
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• |
secure additional funding as may be needed to continue the development of EB613 or any other product candidates;
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• |
obtain required regulatory and marketing approvals for the manufacturing and commercialization of EB613 and any other product candidates we may develop;
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• |
obtain adequate reimbursement from third-party payors for any product that may be commercialized, if approved;
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• |
manage our spending as costs and expenses increase due to the preparation of regulatory filings, potential regulatory approvals, manufacturing scale-up and potential commercialization;
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• |
continue to build and maintain our intellectual property portfolio;
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• |
recruit and retain qualified executive management and other personnel;
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• |
build and maintain appropriate research and development, clinical, sales, manufacturing, financial reporting, distribution and marketing capabilities on our own or through third parties;
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• |
gain broad market acceptance for our product candidates;
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• |
develop and maintain successful strategic relationships and collaborations;
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• |
develop a sustainable and scalable manufacturing process for any approved product candidates and maintaining supply and manufacturing relationships with third parties that can support clinical development and market demand for our
product candidates, if approved;
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• |
establish sales, marketing, and distribution capabilities in the United States;
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• |
obtain market acceptance for any of our product candidates that receive marketing approval, if any, as viable treatment options;
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• |
address any competing technological and market developments;
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• |
negotiating favorable terms in any collaboration, licensing, or other arrangements into which we may enter; and
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• |
attracting, hiring and retaining qualified personnel.
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• |
regulatory authorities may require us to take these products off the market;
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• |
regulatory authorities may require the addition of labeling statements, specific warnings, a contraindication or field alerts to physicians and pharmacies;
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• |
we may be required to change the way the product is administered, conduct additional clinical trials or change the labeling of the product;
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• |
we may be subject to limitations on how we may promote the product;
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• |
sales of the product may decrease significantly;
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• |
we may be subject to litigation or product liability claims; and
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• |
our reputation may suffer.
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• |
such authorities may disagree with the number, design, size, conduct or implementation of our clinical trials or any of our collaborators’ clinical trials;
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• |
we or any of our development partners may be unable to demonstrate to the satisfaction of the FDA or other regulatory authorities that a product candidate is safe and effective for any indication;
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• |
the results of clinical trials may not meet the level of statistical significance or clinical significance required by the FDA, EMA or other regulatory agencies for approval;
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• |
such authorities may not accept clinical data from trials which are conducted at clinical facilities or in countries where the standard of care is potentially different from that authority’s jurisdiction;
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• |
the data collected from non-clinical studies and clinical trials of our product candidates may not be sufficient to support the submission of an application for regulatory approval;
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• |
the results of clinical trials may not demonstrate the safety or efficacy required by such authorities for approval;
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• |
we or any of our future development partners may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks;
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• |
such authorities may disagree with our interpretation of data from preclinical studies or clinical trials or the use of results from studies that served as precursors to our current or future product candidates;
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• |
such authorities may find deficiencies in our manufacturing processes or facilities or those of third-party manufacturers with which we or any of our future development partners contract for clinical and commercial supplies;
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• |
the FDA may require development of a Risk Evaluation and Mitigation Strategy, or REMS, as a condition of approval; and
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• |
the approval policies or regulations of such authorities may significantly change in a manner rendering our or any of our future development partners’ clinical data insufficient for approval.
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• |
future clinical trial results may show that our oral PTH is not effective, including if our drug delivery technology is not effective, our product candidates are not effective, our clinical trial designs are flawed, or clinical trial
investigators or subjects do not comply with trial protocols;
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• |
our product candidates may not be well tolerated or may cause negative side effects;
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• |
our ability to complete the development and commercialization of our oral PTH for our intended uses may be significantly dependent upon our ability to obtain and maintain experienced and committed collaborators to assist us with
obtaining clinical and regulatory approvals for, and the manufacturing, marketing and distribution of, our oral PTH;
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• |
even if our oral PTH is shown to be safe and effective for its intended purposes, we may face significant or unforeseen difficulties in obtaining or manufacturing sufficient quantities at reasonable prices, or at all;
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• |
even if our oral PTH is successfully developed, commercially produced and receives all necessary regulatory approvals, there is no guarantee that there will be market acceptance;
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• |
even if our oral PTH is successfully developed, commercially produced and receives all necessary regulatory approvals for the treatment of Osteoporosis, there is no guarantee that we will successfully develop and commercialize it for
other indications, including hypoparathyroidism and delayed union fractures; and
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• |
our competitors may develop therapeutics or other treatments that are superior to or less costly than our own with the result that our products, even if they are successfully developed, manufactured and approved, may not generate
significant revenues.
|
• |
difficulties obtaining regulatory approval to commence a clinical trial or complying with conditions imposed by a regulatory authority regarding the scope or term of a clinical trial;
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• |
delays in reaching or failing to reach agreement on acceptable terms with prospective contract research organizations, or CROs, contract manufacturing organizations, and trial sites, the terms of which can be subject to extensive
negotiation and may vary significantly;
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• |
failure of our third-party contractors, such as CROs and contract manufacturing organizations, or our investigators to comply with regulatory requirements or otherwise meet their contractual obligations in a timely manner;
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• |
insufficient or inadequate supply or quality of a product candidate or other materials necessary to conduct our clinical trials;
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• |
difficulties obtaining institutional review board, or IRB, or ethics committee approval to conduct a clinical trial at a prospective site;
|
• |
the FDA, EMA or other regulatory authority may require changes to any of our trial designs, our pre-clinical strategy or our manufacturing plans;
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• |
various challenges recruiting and enrolling subjects to participate in clinical trials, including size and nature of subject population, proximity of subjects to clinical sites,
eligibility criteria for the trial, budgetary limitations, nature of trial protocol, the patient referral practices of physicians, changes in the readiness of subjects to volunteer for a trial, the availability of approved effective
treatments for the relevant disease and competition from other clinical trial programs for similar indications;
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• |
difficulties in maintaining contact with subjects who withdraw from the trial, resulting in incomplete data;
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• |
governmental or regulatory delays and changes in regulatory requirements, policy and guidelines;
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• |
varying interpretations of data by the FDA and foreign regulatory agencies; and
|
• |
inaccurate interpretations by us of the FDA’s guidance for the clinical and regulatory path for our product candidates.
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• |
failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols;
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• |
findings of an inspection of the clinical trial operations or trial sites by the FDA or other regulatory authorities;
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• |
unforeseen issues, including serious adverse events associated with a product candidate, or lack of effectiveness or any determination that a clinical trial presents unacceptable health risks;
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• |
lack of adequate funding to continue the clinical trial due to unforeseen costs or other business decisions; and
|
• |
upon a breach or pursuant to the terms of any agreement with, or for any other reason by, current or future collaborators that have responsibility for the clinical development of any of our product candidates.
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• |
issue warning letters or untitled letters or take similar enforcement actions;
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• |
seek an injunction or impose civil or criminal penalties or monetary fines;
|
• |
suspend or withdraw marketing approval;
|
• |
suspend any ongoing clinical trials;
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• |
refuse to approve pending applications or supplements to applications;
|
• |
suspend or impose restrictions on operations, including costly new manufacturing requirements;
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• |
seize or detain products, refuse to permit the import or export of products, exclude products from federal healthcare programs, or request that we initiate a product recall; or
|
• |
refuse to allow us to enter into supply contracts, including government contracts.
|
• |
the federal Anti-Kickback Statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either
the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made, in whole or in part, under a federal health care program such as Medicare and Medicaid. A person or
entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. In addition, the government may assert that a claim including items or services resulting from a
violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act;
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• |
the federal False Claims Act imposes civil penalties, and provides for civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims
for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government;
|
• |
HIPAA imposes criminal and civil liability for executing a scheme to defraud any health care benefit program or making false statements relating to health care matters. Similar to the federal Anti-Kickback Statute, a person or entity
does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;
|
• |
the federal false statements statute prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for health care
benefits, items or services;
|
• |
the federal transparency requirements under the ACA requires certain manufacturers of drugs, devices, biologics and medical supplies to report to the Department of Health and Human Services information related to payments and other
transfers of value to physicians and teaching hospitals and the ownership and investment interests of such physicians or their family members;
|
• |
the Physician Payments Sunshine Act, created under the ACA, and its implementing regulations, which requires specified manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare,
Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to the Centers for Medicare & Medicaid Services, or CMS, information related to payments or other “transfers of value” made to
physicians. All such reported information is publicly available;
|
• |
analogous state and non-U.S. laws and regulations, such as certain state anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers; state laws that
require pharmaceutical companies to comply with the industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare
providers and other potential referral sources; state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures;
and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts; and
|
• |
regulation by the Centers for Medicare and Medicaid Services and enforcement by the U.S. Department of Health and Human Services (Office of Inspector General) or the U.S. Department of Justice.
|
• |
We do not have experience in manufacturing our product candidates at commercial scale. We may not succeed in the scaling up of our final manufacturing process. We may need a larger-scale manufacturing process for our oral PTH than
what we have planned, depending on the dose and regimen that will be determined in future studies. Any changes in our manufacturing processes as a result of scaling up may result in the need to obtain additional regulatory approvals.
Difficulties in achieving commercial-scale production or the need for additional regulatory approvals as a result of scaling up could delay the development and regulatory approval of our product candidates and ultimately affect our
success. Contract manufacturers may not have sufficient expertise to manufacture a dry oral formulation with a large molecule API, in which case we may have to establish our own commercial manufacturing capabilities, which could be
expensive and delay launch of product candidates.
|
• |
The manufacturing process for large molecules is more complex and subject to greater regulation than that of other drugs. The process of manufacturing large molecules, such as our product candidates, is extremely susceptible to
product loss due to contamination, equipment failure or improper installation or operation of equipment, vendor or operator error, inconsistency in yields, variability in product characteristics and difficulties in scaling the
production process. Even minor deviations from normal manufacturing processes could result in reduced production yields, product defects and other supply disruptions. If microbial, viral or other contaminations are discovered in our
product candidates or in the manufacturing facilities in which our product candidates are made, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination.
|
• |
The manufacturing facilities in which our product candidates are made could be adversely affected by equipment failures, labor shortages, natural disasters, power failures, outbreaks of an infectious disease such as COVID-19 and
numerous other factors.
|
• |
We must comply with applicable current cGMP, regulations and guidelines. We may encounter difficulties in achieving quality control and quality assurance and may experience shortages in qualified personnel. We are subject to
inspections by the FDA and comparable agencies in other jurisdictions to confirm compliance with applicable regulatory requirements. Any failure to follow cGMP or other regulatory requirements or delay, interruption or other issues that
arise in the manufacture, fill-finish, packaging, or storage of our product candidates as a result of a failure of our facilities or the facilities or operations of third parties to comply with regulatory requirements or pass any
regulatory authority inspection could significantly impair our ability to develop and commercialize our product candidates, including leading to significant delays in the availability of drug product for our clinical trials or the
termination or hold on a clinical trial, or the delay or prevention of a filing or approval of marketing applications for our product candidates. Significant noncompliance could also result in the imposition of sanctions, including
fines, injunctions, civil penalties, failure of regulatory authorities to grant marketing approvals for our product candidates, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of products,
operating restrictions and criminal prosecutions, any of which could damage our reputation. If we are not able to maintain regulatory compliance, we may not be permitted to market our product candidates and/or may be subject to product
recalls, seizures, injunctions, or criminal prosecution.
|
• |
Any adverse developments affecting manufacturing operations for our product candidates, if any are approved, may result in shipment delays, inventory shortages, lot failures, product withdrawals or recalls, or other interruptions in
the supply of our products. We may also have to take inventory write-offs and incur other charges and expenses for products that fail to meet specifications, undertake costly remediation efforts or seek more costly manufacturing
alternatives.
|
• |
Our product candidates that have been produced and are stored for later use may degrade, become contaminated or suffer other quality defects, which may cause the affected product candidates to no longer be suitable for their intended
use in clinical trials or other development activities. If the defective product candidates cannot be replaced in a timely fashion, we may incur significant delays in our development programs that could adversely affect the value of
such product candidates.
|
• |
limitations or warnings contained in the approved labeling for a product candidate;
|
• |
changes in the standard of care for the targeted indications for any of our product candidates;
|
• |
limitations in the approved clinical indications for our product candidates;
|
• |
demonstrated clinical safety and efficacy compared to other products;
|
• |
lack of significant adverse side effects;
|
• |
sales, marketing and distribution support;
|
• |
availability and extent of coverage and reimbursement from managed care plans and other third-party payors;
|
• |
timing of market introduction and perceived effectiveness of competitive products;
|
• |
the degree of cost-effectiveness of our product candidates;
|
• |
availability of alternative therapies at similar or lower cost, including generic and over-the-counter products;
|
• |
the extent to which the product candidate is approved for inclusion on formularies of hospitals and third-party payors, including managed care organizations;
|
• |
whether the product is designated under physician treatment guidelines as a first-line therapy or as a second- or third-line therapy for particular diseases;
|
• |
adverse publicity about our product candidates or favorable publicity about competitive products;
|
• |
convenience and ease of administration of our products; and
|
• |
potential product liability claims.
|
• |
a covered benefit under its health plan;
|
• |
safe, effective and medically necessary;
|
• |
appropriate for the specific patient;
|
• |
cost-effective; and
|
• |
neither experimental nor investigational.
|
• |
decreased demand for any of our product candidates or products we develop;
|
• |
injury to our reputation and significant negative media attention;
|
• |
withdrawal of clinical trial participants or cancellation of clinical trials;
|
• |
costs to defend the related litigation, which may be only partially recoverable even in the event of successful defense;
|
• |
a diversion of management’s time and our resources;
|
• |
substantial monetary awards to trial participants or patients;
|
• |
regulatory investigations, product recalls, withdrawals or labeling, marketing or promotional restrictions;
|
• |
loss of revenues; and
|
• |
the inability to commercialize any products we develop.
|
• |
Collaborators may have significant discretion in determining the efforts and resources that they will apply to these collaborations;
|
• |
Collaborators may not perform their obligations as expected;
|
• |
Collaborators may not pursue development and commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based on clinical trial
results, changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition, that divert resources or create competing priorities;
|
• |
Collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product
candidate for clinical testing;
|
• |
Collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates if the collaborators believe that competitive products are more likely to
be successfully developed or can be commercialized under terms that are more economically attractive than ours;
|
• |
Product candidates discovered in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the
commercialization of our product candidates;
|
• |
A collaborator with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product or products;
|
• |
Disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays or termination of the research, development or commercialization of
product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would be time-consuming and expensive;
|
• |
Collaborators may not properly obtain, maintain, defend or enforce our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual
property or proprietary information or expose us to potential litigation or other intellectual property-related proceedings, including proceedings challenging the scope, ownership, validity and enforceability of our intellectual
property. For example, Amgen has the first right to enforce or defend certain of our intellectual property rights under our research collaboration and license agreement, and although we may have the right to assume the enforcement and
defense of such intellectual property rights if Amgen does not, our ability to do so may be compromised by Amgen’s actions;
|
• |
Collaborators may own or co-own intellectual property covering our product candidates or research programs that results from our collaboration with them, and in such cases, we may not have the exclusive right to commercialize such
intellectual property or such product candidates or research programs;
|
• |
Collaborators may infringe, misappropriate or otherwise violate the intellectual property rights of third parties, which may expose us to litigation and potential liability;
|
• |
Collaborators may fail to comply with applicable laws, rules or regulations when performing services for us, which may expose us to legal proceedings and potential liability;
|
• |
Collaborations may be terminated for convenience by the collaborator and, if terminated, we may suffer from negative publicity and we may find it more difficult to attract new collaborators. For example, at any point in the research
and development process, subject to certain conditions, Amgen can terminate our research collaboration and license agreement in its entirety or with respect to a specific development program; and
|
• |
The outbreak of COVID-19 may cause us to fail to meet contractually obligated deadlines with our collaboration partners or otherwise strain our relationships with current collaborators or other business partners.
|
• |
the possibility of a breach of the manufacturing agreements by the third parties because of factors beyond our control;
|
• |
the possibility that the supply is inadequate or delayed;
|
• |
the risk that the third party may enter the field and seek to compete and may no longer be willing to continue supplying;
|
• |
the possibility of termination or nonrenewal of the agreements by the third parties before we are able to arrange for a qualified replacement third-party manufacturer; and
|
• |
the possibility that we may not be able to secure a manufacturer or manufacturing capacity in a timely manner and on satisfactory terms in order to meet our manufacturing needs.
|
• |
actual or anticipated fluctuations in our and our competitors’ results of operations and financial condition;
|
• |
clinical trial results and the timing of the release of such results;
|
• |
the amount of our cash resources and our ability to obtain additional funding;
|
• |
announcements of research activities, business developments, technological innovations or new products, or acquisitions or expansion plans by us or our competitors;
|
• |
success or failure of our research and development projects or those of our competitors;
|
• |
our entering into or terminating strategic relationships;
|
• |
changes in laws or government regulation;
|
• |
regulatory developments and the decisions of regulatory authorities as to the approval or rejection of new or modified products;
|
• |
departure of our key personnel;
|
• |
disputes related to proprietary rights, including patents, litigation matters and our ability to obtain intellectual property protection for our technologies;
|
• |
our sale, or the sale by our significant shareholders, of Ordinary Shares, IPO Warrants or other securities in the future;
|
• |
public concern regarding the safety, efficacy or other aspects of the products or methodologies we are developing;
|
• |
market conditions in our industry and changes in estimates of the future size and growth rate of our markets;
|
• |
market acceptance of our products;
|
• |
the mix of products that we sell and related services that we provide;
|
• |
the success or failure of our licensees to develop, obtain approval for and commercialize our licensed products, for which we are entitled to contingent payments and royalties;
|
• |
publication of the results of preclinical or clinical trials for EB613, EB612 or any other product candidates we may develop;
|
• |
failure by us to achieve a publicly announced milestone;
|
• |
delays between our expenditures to develop and market new or enhanced products and the generation of sales from those products;
|
• |
changes in the amounts that we spend to develop, acquire or license new products, technologies or businesses;
|
• |
changes in our expenditures to promote our products;
|
• |
variance in our financial performance from the expectations of market analysts;
|
• |
the limited trading volume of our Ordinary Shares and IPO Warrants; and
|
• |
general economic and market conditions, including factors unrelated to our industry or operating performance.
|
• |
Advance EB613 into a Phase 3 clinical trial for the treatment of osteoporosis: We are currently conducting a dose ranging Phase 2 clinical trial of EB613 for the treatment of osteoporosis.
Based on FDA guidance received at our pre-IND meeting in November 2018, we intend to further develop EB613 and conduct the required non-clinical and clinical trials in order to attain regulatory approval. We intend to conduct a single
Phase 3, multicenter trial with a BMD endpoint comparing Oral PTH with Forteo over a 12-month treatment period. We believe this Phase 3 trial could be initiated as early as 2021 or 2022, based on a successful outcome of the Phase 2
trial, pending the determination of the impact of COVID-19 on our clinical trial enrollment, on our ability to collect sufficient data to proceed with a Phase 3 clinical trial and on the design of any such Phase 3 clinical trial, as
well as on whether we will have adequate financial resources.
|
• |
Advance EB612 through clinical development for the treatment of hypoparathyroidism: To date we have completed two Phase 2 clinical
trials of EB612 for the treatment of hypoparathyroidism. We reported positive results from the first trial in the third quarter of 2015, and then conducted a Phase 2PK/PD trial in 2019 to evaluate the profile of various EB612 dose
regimens. After the completion of additional formulation and development activities to determine our final formulations, and subject to available funds, we expect to initiate a Phase 2b/3 clinical trial of EB612 for the treatment of
hypoparathyroidism. The FDA and the EMA have granted EB612 orphan drug designation for the treatment of hypoparathyroidism.
|
• |
Leverage our expertise in the oral delivery of PTH to develop product candidates in additional indications: In the future, we may
conduct exploratory Phase 2 studies for the use of our oral PTH candidates in additional indications in which the anabolic effects of pulsatile PTH to stimulate bone formation may play a key pharmacologic role, including in delayed
union of fractures, an indication within the field of bone healing after a fracture. We plan to use EB613, or a further modified formulation, if studies suggest we could achieve a PK profile that is more efficacious, for these
indications.
|
• |
Identify and develop products based on FDA-approved injectable large molecule therapeutics: We intend to leverage our technology
platform by applying it to the development of known large molecule therapeutics and believe we can reduce the development and regulatory risks by working on FDA-approved large molecule therapeutic agents with known mechanisms of
action. We believe this will allow us to advance our product candidates efficiently and predictably through the development cycle thereby offering us the option to either develop these products on our own or to collaborate with the
innovator companies.
|
• |
Develop more effective novel large molecule therapeutics through collaborations and partnerships with other biotechnology or pharmaceutical companies: Oral drug delivery lowers the treatment burden on patients relative to injectable drugs, leading to higher patient and physician acceptance and compliance, and at a lower cost to patients. However, certain
peptides, proteins and other large molecule therapeutics can currently only be delivered via injections and other non-oral pathways because oral administration leads to negligible absorption into the blood stream as well as enzymatic
degradation within the gastrointestinal tract. Our technology is designed to overcome both of these issues by enabling enhanced systemic absorption of large molecules and slowing their enzymatic degradation while in the
gastrointestinal tract. For example, in December 2018, we entered into a research collaboration and license agreement with Amgen and we intend to explore additional collaborations to further validate our technology and potentially
generate value through funding from such collaborations. COVID-19 may impact our ability to conduct research and development activities or to develop data that may lead to potential future collaborations (see “Risk Factors—The
outbreak of COVID-19 in the United States, Israel and elsewhere has created significant business disruptions and will adversely affect our business”).
|
• |
Establish global and regional commercial partnerships, or selectively develop commercial capabilities for our lead oral PTH product candidates: For our oral PTH product candidates that target orphan indications, we may determine to retain commercialization rights within key territories, including the United States, because of the ability to
commercialize efficiently with a small sales force or other contract selling organizations. For product candidates that target indications with larger patient populations such as Osteoporosis, we may choose to partner with larger
biopharmaceutical companies ahead of late stage development and commercialization, or to license our technology to third parties for their additional indications, pending our Phase 2 trial results and the potential impact of COVID-19
on those results or on our discussions with potential collaboration or other business partners. We are building a corporate and business development capability to determine the appropriate development and commercial strategies for our
current and future product candidates.
|
• |
having the appropriate size, as measured by molecular weight, and other chemical/physical characteristics;
|
• |
having a mechanism of action that favors delivery through the gastrointestinal tract rather than through injections, and;
|
• |
having a dosing schedule that requires dosing one or more times per day for at least three months.
|
Program
|
|
Indication
|
|
Description
|
|
Stage of
Development
|
|
Status
|
|
|
|
|
|
|
|
|
|
EB613
|
|
Osteoporosis
|
|
Oral PTH (1-34)
|
|
Phase 2
|
|
Pre-IND meeting conducted in Q4 2018
Phase 2 dose ranging clinical trial initiated in 2019
Phase 3 initiation expected in 2021 or 2022.
|
EB612
|
|
Hypoparathyroidism
|
|
Oral PTH (1-34)
|
|
Phase 2
|
|
Phase 2a successfully completed (results reported 2015)
Phase 2b PK/PD clinical trial head to head with Natpara in hypoparathyroid patients results reported in Q3 2019
Final formulation(s) to be selected in 2020
|
Class of Drug
|
|
Name
(Producer)
|
|
Method of Action
|
|
Known Side Effects
|
|
2019
Branded
Sales
(in millions)
|
Injectable PTH
|
|
Forteo (Eli Lilly)
|
|
Increases bone mineral density by increasing bone formation.
|
|
Decrease in blood pressure, increase in serum calcium in the blood; nausea, joint aches, pain, leg cramps, injection site reactions
|
|
$1,404
|
Monoclonal antibody
|
|
Prolia (Amgen)
|
|
Blocks bone resorption by osteoclasts by binding RANK-L a protein that is essential to activate osteoclasts
|
|
Hypocalcemia, serious infections, dermatologic adverse reactions, osteonecrosis of the jaw, atypical femoral fractures, back pain, pain in extremity, musculoskeletal pain,
hypercholesterolemia, and cystitis
|
|
$2,672
|
Injectable abaloparatide
|
|
Tymlos (Radius Health)
|
|
Similar to PTH, binds to PTH receptors and results in bone formation and increased bone mineral density
|
|
Osteosarcoma, orthostatic hypotension, hypercalcemia, hypercalciuria, dizziness, nausea, headache, palpitations, fatigue, upper abdominal pain and vertigo
|
|
$172
|
Bisphosphonate
|
|
Fosamax (Merck) Actonel, Boniva,
Zometa (IV) (Novartis)
|
|
Prevent bone loss by inhibiting osteoclasts. Effects reversible at low doses but high intravenous causes apoptosis.
|
|
Irritation of the gastrointestinal mucosa, hypocalcemia, severe musculoskeletal pain, osteonecrosis of the jaw, atypical femoral fractures
|
|
N/A (Generic)
|
Company/Technology
|
|
Molecule
|
|
API MW (g/mole)
|
|
Bioavailability (F)
|
Entera Bio
|
|
PTH (1-34)
|
|
4118
|
|
1.5%
|
Novartis/Emisphere (Eligen - CNAC) (1)
|
|
PTH (1-34)
|
|
4118
|
|
0.2 - 0.5%
|
Enteris Biopharma - Unigen (Peptelligence) (2)
|
|
PTH (1-31)
|
|
3719
|
|
0.52%
|
Multiple manufacturers(3)
|
|
Desmopressin
|
|
1069
|
|
0.16%
|
Chiasma (TPE)(4)
|
|
Octreotide
|
|
1019 (Cyclic peptide)
|
|
0.67%
|
Proxima Concepts (AXCESS)(5)
|
|
Insulin
|
|
5733
|
|
0.7%
|
(1)
|
Source: The single dose pharmacokinetic profile of a novel oral human parathyroid hormone formulation in healthy postmenopausal women Sibylle P. Hämmerle, et al. Bone. 2012
Apr;50(4):965-73. doi: 10.1016/j.bone.2012.01.009. Epub 2012 Jan 25.
|
(2)
|
Source: Pharmacokinetics of oral recombinant human parathyroid hormone rhPTH (1-31)NH2 in postmenopausal women with osteoporosis. Sturmer A1 et el. Clin Pharmacokinet. 2013
Nov;52(11):995-1004. doi: 10.1007/s40262-013-0083-4.
|
(3)
|
Source: Public Assessment Report, Desmopressin Acetate 100 Microgram Tablet PL 24668/0177 and Desmopressin Acetate 200 Microgram Tablet PL 24668/0178. Medicines and Healthcare Products
Regulatory Agency.
|
(4)
|
Source: Pharmacokinetic Modeling of Oral Octreotide (Octreolin™) in Healthy Volunteers and Dosing Regimen Optimization for Acromegaly Patients. Shmuel Tuvia et al. Endocrine Society’s 94th
Annual Meeting June 2012, OR29-6-OR29-6. Source: The glucose lowering effect of an oral insulin (Capsulin) during an isoglycaemic clamp study in persons with type 2 diabetes S. D. Luzio et al. Diabetes Obes Metab. 2010 Jan;12(1):82-7. doi:
10.1111/ j.1463-1326.2009.01146.x. Epub 2009 Sep 25.
|
Formulation
|
|
Participants
|
|
Cmax (pg/ml)
|
|
Tmax (min)
|
|
Coefficient of
Variation (%)
|
EB612 Oral PTH
|
|
10
|
|
235.6 ± 36
|
|
16.5 ± 1.2
|
|
48
|
Injectable PTH
|
|
10
|
|
184.2 ± 26
|
|
16 ± 1.8
|
|
45
|
• |
EB612 is designed to be dosed multiple times a day. Studies performed by the NIH have shown that dosing PTH multiple times per day significantly increases the efficacy of therapy and would be
more effective for treating hypoparathyroidism. These studies found that the total daily PTH dose required to maintain serum calcium in the normal or near-normal range was reduced by 50% with twice-daily PTH (1-34) and also demonstrated
that twice-daily dosing achieved better control over serum calcium and urinary calcium excretion as compared to once-daily dosing.
|
• |
EB612 is designed to be dosed according to patient needs. The hypoparathyroid population is heterogeneous and patients have highly variable responsiveness to PTH. Therefore, the ability to
customize PTH dosing throughout the day with an oral tablet is an advantage over a once-daily preset injection pen.
|
• |
EB612 is expected to have fewer adverse events of hypercalcemia. Our planned treatment regimen would be increased gradually and in parallel to increases in serum calcium. As a result, calcium
supplements active vitamin D metabolites (e.g., calcitriol) would be reduced gradually, while maintaining a relatively stable level of serum calcium. This is in contrast with Natpara’s initial high dose, which requires an immediate
reduction in supplements in anticipation of a rapid increase in serum calcium levels. Furthermore, this immediate and prolonged increase in serum calcium increases risk of prolonged hypercalcemia compared to EB612. Moreover, the target
serum calcium level would be the lower end of the normal range. If serum calcium were at, or greater than, the middle of the normal range, calcium supplements, active vitamin D metabolites and oral PTH dose would be reduced.
|
• |
EB612 can be administered in a more convenient manner. Natpara is administered by subcutaneous injection, must be stored under restrictive conditions (refrigeration required with no freezing
or shaking) and has a multi-step preparation that must be performed every two weeks. EB612 will not require such additional preparations and will have no significant storage restrictions.
|
• |
preclinical laboratory tests, animal studies and formulation studies all performed in accordance with the FDA’s Good Laboratory Practice regulations;
|
• |
submission to the FDA of an IND application for human clinical testing, which must become effective before human clinical trials may begin;
|
• |
approval by an independent IRB, representing each clinical site before each clinical trial may be initiated;
|
• |
performance of adequate and well-controlled clinical trials to establish the safety and efficacy of the product candidate for each proposed indication and conducted in accordance with GCP requirements;
|
• |
submission of data supporting safety and efficacy as well as detailed information on the manufacture and composition of the product in clinical development and proposed labeling;
|
• |
preparation and submission to the FDA of a NDA;
|
• |
review of the product by an FDA advisory committee, where appropriate or if applicable;
|
• |
satisfactory completion of one or more FDA inspections of the manufacturing facility or facilities, including those of third parties, at which the product, or components thereof, are produced to assess compliance with cGMP
requirements and to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity;
|
• |
satisfactory completion of any FDA audits of the non-clinical and clinical trial sites to assure compliance with GCP requirements and the integrity of clinical data in support of the NDA;
|
• |
payment of user fees and securing FDA approval of the NDA for the proposed indication; and
|
• |
compliance with any post-approval requirements, including risk evaluation and mitigation strategies, or REMS, and any post-approval studies required by the FDA.
|
• |
Phase 1 clinical trials are initially conducted in a limited population to test the product candidate for safety, including adverse
effects, dose tolerance, absorption, metabolism, distribution, excretion and pharmacodynamics in healthy humans or, on occasion, in patients, such as cancer patients.
|
• |
Phase 2 clinical trials are generally conducted in a limited patient population to identify possible adverse effects and safety risks,
evaluate the efficacy of the product candidate for specific targeted indications and determine dose tolerance and optimal dosage. Multiple Phase 2 clinical trials may be conducted by the sponsor to obtain information prior to
beginning larger and more costly Phase 3 clinical trials.
|
• |
Phase 3 clinical trials proceed if the Phase 2 clinical trials demonstrate that a dose range of the product candidate is potentially
effective and has an acceptable safety profile. Phase 3 clinical trials are undertaken to further evaluate, in a larger number of patients, dosage, provide substantial evidence of clinical efficacy and further test for safety in an
expanded and diverse patient population at multiple, geographically dispersed clinical trial sites. A well-controlled, statistically robust Phase 3 trial may be designed to deliver the data that regulatory authorities will use to
decide whether or not to approve, and, if approved, how to appropriately label a drug: such Phase 3 studies are referred to as “pivotal.”
|
• |
restrictions on the marketing or manufacturing of the product, 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.
|
• |
preclinical laboratory tests, animal studies and formulation studies all performed in accordance with the applicable EU Good Laboratory Practice regulations;
|
• |
submission to the relevant national authorities of a clinical trial application, or CTA, for each clinical trial, which must be approved before human clinical trials may begin;
|
• |
performance of adequate and well-controlled clinical trials to establish the safety and efficacy of the product for each proposed indication;
|
• |
submission to the relevant competent authorities of a marketing authorization application, or MAA, which includes the data supporting safety and efficacy as well as detailed information on the manufacture and composition of the
product in clinical development and proposed labeling;
|
• |
satisfactory completion of an inspection by the relevant national authorities of the manufacturing facility or facilities, including those of third parties, at which the product is produced to assess compliance with strictly enforced
cGMP;
|
• |
potential audits of the non-clinical and clinical trial sites that generated the data in support of the MAA; and
|
• |
review and approval by the relevant competent authority of the MAA before any commercial marketing, sale or shipment of the product.
|
• |
A streamlined application procedure via a single entry point, the EU portal;
|
• |
A single set of documents to be prepared and submitted for the application as well as simplified reporting procedures which will spare sponsors from submitting broadly identical information separately to various bodies and different
Member States;
|
• |
A harmonized procedure for the assessment of applications for clinical trials, which is divided in two parts. Part I is jointly assessed by all Member States concerned. Part II is assessed by each Member State concerned separately;
|
• |
Strictly defined deadlines for the assessment of clinical trial application; and
|
• |
The involvement of the ethics committees in the assessment procedure in accordance with the national law of the Member State concerned but within the overall timelines defined by the Regulation (EU) No 536/2014.
|
• |
medicinal products developed by means of one of the following biotechnological processes:
|
• |
recombinant DNA technology;
|
• |
controlled expression of genes coding for biologically active proteins in prokaryotes and eukaryotes including transformed mammalian cells;
|
• |
hybridoma and monoclonal antibody methods;
|
• |
advanced therapy medicinal products as defined in Article 2 of Regulation (EC) No 1394/2007 on advanced therapy medicinal products;
|
• |
medicinal products for human use containing a new active substance which, on the date of entry into force of this Regulation, was not authorized in the European Union, for which the therapeutic indication is the treatment of any of
the following diseases:
|
• |
acquired immune deficiency syndrome;
|
• |
cancer;
|
• |
neurodegenerative disorder;
|
• |
diabetes;
|
• |
auto-immune diseases and other immune dysfunctions;
|
• |
viral diseases; and
|
• |
medicinal products that are designated as orphan medicinal products pursuant to Regulation (EC) No 141/2000.
|
• |
The decentralized procedure allows applicants to file identical applications to several EU member states and receive simultaneous national approvals based on the recognition by EU member states of an assessment by a reference member
state.
|
• |
The national procedure is only available for products intended to be authorized in a single EU member state.
|
• |
A mutual recognition procedure similar to the decentralized procedure is available when a marketing authorization has already been obtained in at least one European Union member state.
|
• |
the federal Anti-Kickback Statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either
the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made, in whole or in part, under a federal health care program such as Medicare and Medicaid. A person or
entity does not need to have actual knowledge of the federal Anti-Kickback Statute or specific intent to violate it to have committed a violation; in addition, the government may assert that a claim including items or services resulting
from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act;
|
• |
the federal False Claims Act imposes civil penalties, and provides for civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims
for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government;
|
• |
HIPAA imposes criminal and civil liability for executing a scheme to defraud any health care benefit program or making false statements relating to health care matters. Similar to the federal Anti-Kickback Statute, a person or entity
does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation;
|
• |
the federal false statements statute prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for health care
benefits, items or services;
|
• |
the federal transparency requirements under the ACA require certain manufacturers of drugs, devices, biologics and medical supplies to report to the Department of Health and Human Services information related to payments and other
transfers of value to physicians and teaching hospitals and the ownership and investment interests of such physicians and their immediate family members;
|
• |
HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, which governs the conduct of certain electronic healthcare transactions and protects the security and privacy of protected health
information;
|
• |
the Physician Payments Sunshine Act, created under the ACA, and its implementing regulations, which requires specified manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare,
Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to the Centers for Medicare & Medicaid Services, or CMS, information related to payments or other “transfers of value” made to
physicians. All such reported information is publicly available;
|
• |
analogous state and non-U.S. laws and regulations, such as state anti-kickback and false claims laws which may apply to items or services reimbursed by any payer, including commercial insurers; state laws that require pharmaceutical
companies to comply with the industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers and other
potential referral sources; state laws that require pharmaceutical manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state
laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts; and
|
• |
regulation by the Centers for Medicare and Medicaid Services and enforcement by the U.S. Department of Health and Human Services (Office of Inspector General) or the U.S. Department of Justice.
|
1. |
Identification of the contract, or contracts, with a customer.
|
2. |
Identification of the performance obligations in the contract.
|
3. |
Determination of the transaction price.
|
4. |
Allocation of the transaction price to the performance obligations in the contract.
|
5. |
Recognition of revenue.
|
• |
The subsequent sale or usage occurs; and
|
• |
The performance obligation to which some or all of the sales-based or usage-based royalty has been allocated has been satisfied (or partially satisfied).
|
• |
employee-related expenses, including salaries, bonuses and share-based compensation expenses for employees and service providers in the research and development function;
|
• |
expenses incurred in operating our laboratories including our small-scale manufacturing facility;
|
• |
expenses incurred under agreements with CROs, and investigative sites that conduct our clinical trials;
|
• |
expenses related to outsourced and contracted services, such as external laboratories, consulting and advisory services;
|
• |
supply, development and manufacturing costs relating to clinical trial materials; and
|
• |
other costs associated with pre-clinical and clinical activities.
|
• |
the uncertainty of the scope, rate of progress, results and cost of our clinical trials, nonclinical testing and other related activities;
|
• |
the cost of manufacturing clinical supplies and establishing commercial supplies of our product candidates and any products that we may develop;
|
• |
the number and characteristics of product candidates that we pursue;
|
• |
the cost, timing and outcomes of regulatory approvals;
|
• |
the cost and timing of establishing any sales, marketing, and distribution capabilities; and
|
• |
the terms and timing of any collaborative, licensing and other arrangements that we may establish, including any milestone and royalty payments thereunder.
|
|
Year ended
December 31, |
|||||||||||
|
2019
|
2018 (1)
|
2017
|
|||||||||
|
(in thousands)
|
|||||||||||
Research and development
|
$
|
701
|
$
|
1,333
|
$
|
323
|
||||||
General and administrative
|
782
|
(100
|
)
|
4,562
|
||||||||
Total
|
$
|
1,483
|
$
|
1,233
|
$
|
4,885
|
(1) |
The resignation of Mr. Beshar, the previous Chairman of our board of directors took effect on June 27, 2018. According to Mr. Beshar's options terms, options which had yet to fully vest were forfeited, therefore 453,050 options
forfeited and were recognized in the consolidated statement of comprehensive loss as a reverse of expense under the General and administrative line item in the amount of $1.3 million.
|
|
December
31, 2019
|
July 2,
2018 |
||||||
Price per share*
|
|
$1.84-$2.07
|
865
|
|||||
Volatility
|
62%-63%
|
|
62%
|
|
||||
|
1.63%-1.71%
|
|
N/A
|
|||||
Risk free rate
|
- | |||||||
Probability for IPO/shares registration
|
N/A
|
100%
|
|
⁎ |
The price per share as of July 2, 2018 was based on the quoted price on Nasdaq prior to the share split.
|
Year Ended December 31, |
Increase (Decrease)
|
|||||||||||||||
2019 |
2018 |
$ |
% |
|||||||||||||
(In thousands, except for percentage information)
|
||||||||||||||||
Revenues
|
$
|
236
|
$
|
500
|
$
|
(264
|
)
|
(53.0
|
)
|
|||||||
Cost of revenues
|
210
|
210
|
100
|
|||||||||||||
Operating expenses:
|
|
|||||||||||||||
Research and development expenses, net
|
$
|
7,199
|
$
|
8,518
|
$
|
(1,319
|
)
|
(15.5
|
)
|
|||||||
General and administrative expenses
|
4,281
|
2,843
|
1,438
|
(50.6
|
)
|
|||||||||||
Operating loss
|
11,454
|
10,861
|
593
|
5.5
|
||||||||||||
Financial income, net
|
(659
|
)
|
(557
|
)
|
102
|
18.3
|
||||||||||
Net loss
|
$
|
10,795
|
$
|
10,304
|
$
|
491
|
4.7
|
• |
the costs, timing and outcome of clinical trials for, and regulatory review of, EB613, EB612 and any other product candidates we may develop;
|
• |
the costs of development activities for any other product candidates we may pursue;
|
• |
the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;
|
• |
the impact of COVID-19, once known, on our clinical trials, regulatory timelines, business operations and financial stability; and
|
• |
our ability to establish collaborations on favorable terms, if at all.
|
|
(audited)
Year ended December 31, |
|||||||
|
2019
|
2018
|
||||||
|
(in thousands)
|
|||||||
Cash used in operating activities
|
$
|
(8,919
|
)
|
$
|
(9,796
|
)
|
||
Cash provided by (used in) investing activities
|
3.946
|
(4,068
|
)
|
|||||
Cash provided by financing activities
|
12,652
|
9,624
|
||||||
Net increase (decrease) in cash and cash equivalents
|
$
|
7,679
|
$
|
(4,240
|
)
|
|
Payments due by period
|
|||||||||||||||||||
Contractual Obligations
|
Total
|
Less than
1 year |
1 - 3 years
|
3 - 5 years
|
More than
5 years |
|||||||||||||||
|
(In thousands)
|
|||||||||||||||||||
Operating leases for facility and vehicles
|
$
|
513
|
$
|
175
|
$
|
338
|
$
|
-
|
$
|
-
|
||||||||||
Total
|
$
|
513
|
$
|
175
|
$
|
338
|
$
|
-
|
$
|
-
|
• |
a commitment to pay Oramed royalties equal to 3% of our net revenues pursuant to the terms of the Patent Transfer Agreement between us and Oramed; and
|
• |
a commitment to pay royalties to the IIA. See “Item 4.B.—Business Overview—Patent Transfer, Licensing Agreement and Grant Funding.”
|
Name
|
Age
|
Position
|
Executive Officers
|
|
|
Adam Gridley
|
47
|
Chief Executive Officer and Director
|
Jonathan Lieber
|
50
|
U.S.-based Chief Financial Officer
|
Dana Yaacov-Garbeli
|
36
|
Israel-based Chief Financial Officer
|
Dr. Phillip Schwartz
|
58
|
President of Research and Development and Director
|
Dr. Hillel Galitzer
|
41
|
Chief Operating Officer
|
Dr. Arthur Santora
|
69
|
Chief Medical Officer
|
Non-Employee Directors
|
||
Gerald Lieberman(2)
|
73
|
Director, Chairman of the Board of Directors
|
Dr. Roger J. Garceau
|
66
|
Director, Chief Development Advisor
|
Zeev Bronfeld
|
68
|
Director
|
Yonatan Malca
|
53
|
Director
|
Faith L. Charles(1) (2) (3) (4)
|
58
|
Director, Chairman of the Compensation Committee
|
Miranda J. Toledano(1) (2) (3) (4)
|
43
|
Director, Chairman of the Audit Committee
|
Gerald M. Ostrov(2) (3) (4)
|
70
|
Director
|
Sean Ellis
|
45
|
Director
|
Name |
Position |
Annual 2019 Compensation
|
||||||||||||||||||||
Base Salary and Related Benefits ($) (1) |
Bonus ($)
|
Retirement, Service Fees and Other Similar Benefits ($) |
Share Based Compensation ($) (2) |
Total ($)
|
||||||||||||||||||
Dr. Phillip Schwartz (3)
|
|
President of Research and development and Director
|
|
|
367,408
|
|
|
|
-
|
|
|
|
7,809
|
|
|
$
|
346,797
|
|
|
|
722,014
|
|
Mr. Adam Gridley (4)
|
Chief Executive Officer and Director
|
|
|
218,402
|
|
|
|
-
|
|
|
|
|
|
$
|
249,576
|
|
|
|
467,978
|
|||
Dr. Arthur Santora (5)
|
Chief Medical Officer
|
|
395,793
|
|
|
|
-
|
|
|
|
|
|
$
|
49,686
|
|
|
|
445,479 | ||||
Dr. Hillel Galitzer (6)
|
|
Chief Operating Officer
|
|
|
221,577
|
|
|
|
-
|
|
|
|
16,209
|
|
|
$
|
129,607
|
|
|
|
367,393
|
|
Mrs, Faith Charles (7)
|
Director
|
|
59,702
|
$
|
67,283
|
|
126,985 |
|
(1) |
Includes base salary, social benefits and car allowances. The amounts shown in this column represent expenses recorded or to be recorded by the Company, calculated using the average monthly exchange rates of the relevant month in
which the salary was recorded.
|
(2) |
Reflects the associated annual expense recorded in our financial statements for the year ended December 31, 2019, based on the grant date fair value of the share-based compensation granted in exchange for the directors’ and officers’
services. The fair value amount is recognized as an expense over the course of the vesting period of the options (subject to any applicable accounting adjustments during that period).
|
(3) |
Dr. Schwartz, who previously served as the Chief Executive Officer from January 1, 2019 through August 4, 2019, has served in his current position, effective August 5, 2019. In November 2017, Dr. Schwartz was granted options to
purchase 367,500 Ordinary Shares (with an exercise price of $6.31 per share) under our 2013 Equity Incentive Plan, of which 201,094 were vested as of March 15, 2020. The fair value of these options as of the grant date was $1,442,474.
|
(4) |
Mr. Gridley was appointed as our Chief Executive Officer, effective August 5, 2019. In connection with his appointment, Mr. Gridley was granted options to purchase 696,587 Ordinary Shares (with an exercise price of $2.75 per share)
under our 2018 Equity Incentive Plan, or the 2018 Plan, none of which were vested as of March 15, 2020. The options will expire within 10 years from the grant date. This grant was ratified by our shareholders on October 3, 2019. The
fair value of these options as of the grant date was $1,074,186.
|
(5) |
In January 2019, Dr. Santora was granted options to purchase 25,000 Ordinary Shares (with an exercise price of $3.97 per share) under our 2018 Plan, of which 12,500 were vested as of March 15, 2020. The options will expire within 10
years from the grant date. This grant was ratified by our shareholders on May 20, 2019. The fair value of these options as of the grant date was $67,078.
|
(6) |
In November 2017, Dr. Galitzer was granted options to purchase 143,000 Ordinary Shares (with an exercise price of $6.31 per share) under our 2013 Equity Incentive Plan, of which 80,438 were vested as of March 15, 2020.The options
will expire within 10 years from the grant date. The fair value of these options as of the grant date was $547,002.
|
(7) |
In January 2019, Mrs. Charles was granted options to purchase 33,638 Ordinary Shares (with an exercise price of $3.97 per share) under our 2018 Plan, of which 14,015 were vested as of March 15, 2020. The options will expire within 10
years from the grant date. This grant was ratified by our shareholders on May 20, 2019. The fair value of these options as of the grant date was $88,414.
|
• |
the Class I directors are Zeev Bronfeld and Roger Garceau;
|
• |
the Class II directors are Phillip Schwartz and Yonatan Malca; and
|
• |
the Class III director is Gerald Lieberman.and Gerald M. Ostrov.
|
• |
he or she meets the primary qualifications for being appointed as an external director, except for the requirements that the director possess accounting and financial expertise or professional qualifications; and
|
• |
he or she has not served as a director of the company for a period exceeding nine consecutive years, subject to extension for additional terms under certain circumstances. For this purpose, a break of less than two years in the
service shall not be deemed to interrupt the continuation of the service.
|
• |
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 a company’s profitability, assets or liabilities.
|
• |
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 shall detail such foreseen events and amount or criteria;
|
• |
reasonable litigation expenses, including attorneys’ fees, incurred by the office holder (1) 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 (i) no indictment was filed against such office holder as a result of such investigation or proceeding, and (ii) 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 (2) in connection with a forfeit; 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 the duty of loyalty to the company, provided that the office holder acted in good faith and had reasonable grounds to believe that the act would not harm the company;
|
• |
a breach of the duty of care to the company or to a third party; and
|
• |
a financial liability imposed on the office holder in favor of a third party.
|
• |
a breach of the duty of loyalty, except for indemnification and insurance for a breach of the duty of loyalty to the company to the extent that the office holder acted in good faith and had a reasonable grounds to believe that the
act would not harm the company;
|
• |
a breach of the 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, monetary sanction, forfeit or penalty levied against, or imposed upon, the office holder.
|
|
|
Employees
|
|
|
Area of Activity:
|
|
|
|
|
Research and development
|
|
|
15
|
|
General and administrative
|
|
|
6
|
|
Total
|
|
|
21
|
|
Name |
|
Type of
Security
|
|
Number of
Securities(1)
|
Options/warrants Exercise Price ($)
|
|
Options/ warrants Exercise Date
|
|
Expiration Date
|
|
Percent of Shares Outstanding(2)
|
|
|
Dr. Phillip Schwartz
|
|
Shares
|
|
578,630
|
|
-
|
|
|
|
||||
|
Options
|
|
357,500
|
6.31
|
|
11/23/2021
|
|
11/23/2023
|
|
||||
4.36%
|
|||||||||||||
Mr. Adam Gridley
|
|
Options
|
696,598
|
2.75
|
08/05/2023
|
08/05/2029
|
-
|
||||||
Dr. Arthur Sentora
|
Options
|
25,000
|
3.97
|
1/16/2022
|
1/17/2029
|
*
|
|||||||
Dr. Hillel Galitzer
|
Shares
|
36,010
|
|||||||||||
Options
|
143,000
|
6.31
|
11/15/2021
|
11/15/2023
|
|||||||||
*
|
|||||||||||||
Mrs. Faith Charles
|
Options
|
33,638
|
3.97
|
09/27/2021
|
1/17/2029
|
*
|
Name
|
Number and Percentage of
Ordinary Shares
|
|||||||
Number
|
Percent
|
|||||||
5% or Greater Shareholders (other than directors and executive officers)
|
||||||||
D.N.A Biomedical Solutions Ltd.(1)
|
3,762,959
|
20.48
|
%
|
|||||
Gakasa Holdings LLC(2)
|
2,374,275
|
12.61
|
%
|
|||||
Capital Point Ltd.(3)
|
1,604,820
|
8.78
|
%
|
|||||
Centillion Fund, Inc.(4)
|
1,402,310
|
7.59
|
%
|
|||||
Menachem Ehud Raphael(5)
|
1,475,237
|
7.89
|
%
|
|||||
Executive Officers and Directors:
|
||||||||
Zeev Bronfeld(6)
|
3,779,778
|
20.56
|
%
|
|||||
Yonatan Malca(7)
|
3,779,778
|
20.56
|
%
|
|||||
Dr. Phillip Schwartz(8)
|
802,848
|
4.36
|
%
|
|||||
Gerald Lieberman(9)
|
312,737
|
1.70
|
%
|
|||||
Dr. Roger J. Garceau(10)
|
363,220
|
1.96
|
%
|
|||||
Dr. Hillel Galitzer(11)
|
125,385
|
*
|
||||||
Jonathan Lieber(12)
|
7,596
|
*
|
||||||
Dr. Arthur Santora(13)
|
14,065
|
*
|
||||||
Faith L. Charles(14)
|
16,819
|
*
|
||||||
Miranda J. Toledano(15)
|
16,819
|
*
|
||||||
Gerald M. Ostrov(16)
|
14,016
|
*
|
||||||
Sean Ellis(17)
|
8,410
|
*
|
||||||
Adam Gridley
|
-
|
-
|
||||||
Dana Yaacov-Garbeli
|
-
|
-
|
||||||
All Directors and Executive Officers as a Group (14 persons)(18)
|
1,715,552
|
8.94
|
%
|
(1)
|
Based partly on the Schedule 13G/A filed by D.N.A Biomedical with the SEC on February 18, 2020 regarding its holdings. Zeev Bronfeld is the
controlling shareholder of D.N.A Biomedical. By reason of such control, Zeev Bronfeld may be deemed to be beneficial owner of, and to share the power to vote and dispose of, the shares beneficially owned by D.N.A Biomedical. Mr.
Bronfeld disclaims beneficial ownership of the shares held by D.N.A Biomedical. D.N.A’s holdings consisted of: (i) 3,256,630 Ordinary Shares as reported, (ii) 337,553 Ordinary Shares and (iii) Investor Warrants to purchase
168,776 Ordinary Shares exercisable within 60 days as of March 15, 2020, issued to D.N.A on February 18, 2020 following our shareholders’ approval of D.N.A’s participation in our Private Placement. D.N.A’s address is at Shimon Hatarsi 43
St., Tel Aviv, Israel.
|
(2)
|
Consists of (i) 1,741,363 Ordinary Shares and (ii) warrants to purchase 632,912 Ordinary Shares, exercisable within 60 days as of March 15, 2020. Gakasa Holdings LLC’s address is 201 S.
Biscayne Blvd., Suite 800, Miami, Florida.
|
(3)
|
Based solely on the Schedule 13G/A filed by Capital Point Ltd. with the SEC on February 13, 2020 regarding its holdings as of December 31, 2019. Capital
Point Ltd. reported that its holdings comprised of (i) 1,521,520 Ordinary Shares, and (ii) warrants to purchase 83,300 Ordinary Shares exercisable within 60 days as of March 15, 2020. Capital Point Ltd.’s address is at 1 Azrieli
Towers Tel Aviv, 67021 Israel.
|
(4)
|
Based on solely the Schedule 13G/A filed by Centillion Fund, Inc. with the SEC on March 11, 2020 regarding its holdings as of December 31, 2019. Centillion Fund Inc. reported that its holdings comprised of i) 1,131,130 Ordinary Shares and (ii) warrants to purchase 271,180 Ordinary Shares, exercisable within 60 days as of March 15, 2020. Centillion Fund,
Inc.’s address is at 10 Manoel Street, Castries, Saint Lucia.
|
(5)
|
Based solely on the Schedule 13G filed by Menachem Ehud Raphael with the SEC on March 9, 2020 regarding its holdings as of December 31, 2019. Menachem Ehud Raphael further reported that
its holdings consist of (i) 975,258 Ordinary Shares, and (ii) 499,979 Ordinary Shares underlying options to acquire Ordinary Shares, exercisable
within 60 days as of December 31, 2019. Menachem Raphael’s address is at 12 Ha’seora, Tel Aviv, Israel.
|
(6)
|
Based on the Schedule 13G/A filed by Mr. Zeev Bronfeld with the SEC on February 18, 2020 regarding its holdings as of December 31, 2018. Mr. Bronfeld is the controlling shareholder of
D.N.A Biomedical. By reason of such control, Mr. Bronfeld may be deemed to be beneficial owner of, and to share the power to vote and dispose of, the shares beneficially owned by D.N.A Biomedical. Mr. Bronfeld disclaims beneficial
ownership of the shares held by D.N.A Biomedical. D.N.A holdings comprised of: (1) 3,256,630 Ordinary Shares as reported, and (ii) on February 18, 2020 following our shareholders’ approval
of D.N.A investment, we issued to D.N.A 337,553 Ordinary Shares and warrants to purchase 168,776 Ordinary Shares exercisable within 60 days as of March 15, 2020. In addition, his holdings consist of 16,819 Ordinary Shares underlying
options to acquire Ordinary Shares, exercisable within 60 days of March 15, 2020.
|
(7)
|
Mr. Yonatan Malca is the CEO and a director of D.N.A Biomedical. In addition, his holdings consists of 16,819 Ordinary Shares underlying options to acquire Ordinary Shares, exercisable
within 60 days of March 15, 2020.
|
(8)
|
Consists of (i) 579,410 Ordinary Shares and (ii) 223,438 Ordinary Shares underlying options to acquire Ordinary Shares, exercisable within 60 days of March 15, 2020.
|
(9)
|
Consists of (i) 97,872 Ordinary Shares, (ii) 175,159 Ordinary Shares underlying options to acquire Ordinary Shares, exercisable within 60 days of March 15, 2020, and (iii) warrants to
purchase 39,706 Ordinary Shares.
|
(10)
|
Consists of (i) 4,940 Ordinary Shares (ii) 356,330 Ordinary Shares underlying options to acquire Ordinary Shares, exercisable within 60 days of March 15, 2020, and (iii) warrants to
purchase 1,950 Ordinary Shares.
|
(11)
|
Consists of (i) 36,010 Ordinary Shares and (ii) 53,625 Ordinary Shares underlying options to acquire Ordinary Shares, exercisable within 60 days of March 15, 2020.
|
(12)
|
Consists of 7,596 Ordinary Shares underlying options to acquire Ordinary Shares, exercisable within 60 days of March 15, 2020.
|
(13)
|
Consists of 14,065 Ordinary Shares underlying options to acquire Ordinary Shares, exercisable within 60 days of March 15, 2020.
|
(14)
|
Consists of 16,819 Ordinary Shares underlying options to acquire Ordinary Shares, exercisable within 60 days of March 15, 2020.
|
(15)
|
Consists of 16,819 Ordinary Shares underlying options to acquire Ordinary Shares, exercisable within 60 days of March 15, 2020.
|
(16)
|
Consists of 14,016 Ordinary Shares underlying options to acquire Ordinary Shares, exercisable within 60 days of March 15, 2020.
|
(17)
|
Consists of: 8,410 Ordinary Shares underlying options to acquire Ordinary Shares, exercisable within 60 days of March 15, 2020.
|
(18)
|
Consists of (i) 718,232 Ordinary Shares, (ii) options to acquire 955,664 Ordinary Shares, exercisable within 60 days of December 31, 2019, and (iii) warrants to purchase 41,656 Ordinary
Shares.
|
• |
D.N.A Biomedical, a major shareholder, beneficially owned 34.8% of the Company at the time of our IPO, but owned 18.23% as of December 31, 2019.
|
• |
Gakasa Holdings LLC, a new major shareholder, beneficially owned 13.04% of the Company as of December 11, 2019.
|
• |
Centillion Fund, Inc., a major shareholder, beneficially owned 17.3% of the Company at the time of our IPO, but owned 7.59% as of December 31, 2019.6
|
• |
Pontifax Management 4 GP (2015) Ltd., a former significant shareholder, ceased to beneficially own more than 5% of the Company in 2019, and owned 1.3% as of December 31, 2019.
|
• |
Phillip Schwartz, a former significant shareholder, ceased to beneficially own more than 5% of the Company in 2019, having dropped to 4.32% as of December 31, 2019.
|
• |
amortization over an eight-year period of the cost of purchased know-how and patents and rights to use a patent and know-how which are used for the development or advancement of the “industrial enterprise,” commencing on the year in
which such rights were first exercised;
|
• |
deductions over a three-year period of expenses incurred in connection with the issuance and listing of shares on a stock market;
|
• |
the right to elect, under specified conditions, to file a consolidated tax return together with related Israeli industrial companies; and
|
• |
accelerated depreciation rates on certain equipment and buildings.
|
• |
certain financial institutions;
|
• |
dealers or traders in securities that use a mark-to-market method of tax accounting;
|
• |
persons holding Ordinary Shares or IPO Warrants as part of a “straddle” or integrated transaction or persons entering into a constructive sale with respect to the Ordinary Shares or IPO Warrants;
|
• |
persons whose functional currency for U.S. federal income tax purposes is not the U.S. dollar;
|
• |
entities classified as partnerships for U.S. federal income tax purposes;
|
• |
tax exempt entities, “individual retirement accounts” or “Roth IRAs”;
|
• |
persons that own or are deemed to own 10% or more of our stock by vote or value; or
|
• |
persons holding our Ordinary Shares or IPO Warrants in connection with a trade or business conducted outside of the United States.
|
• |
a citizen or individual resident of the United States;
|
• |
a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States, any state therein or the District of Columbia; or
|
• |
an estate or trust the income of which is subject to U.S. federal income taxation regardless of its source.
|
(a) |
Disclosure Controls and Procedures
|
(b) |
Management’s Annual Report on Internal Control over Financial Reporting
|
• |
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and asset dispositions;
|
• |
provide reasonable assurance that transactions are recorded as necessary to permit the preparation of our financial statements in accordance with generally accepted accounting principles;
|
• |
provide reasonable assurance that receipts and expenditures are made only in accordance with authorizations of our management and board of directors (as appropriate); and
|
• |
provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements.
|
(c) |
Attestation Report of the Registered Public Accounting Firm
|
(d) |
Changes in Internal Control over Financial Reporting
|
|
Year Ended
December 31, |
|||||||
|
2019
|
2018
|
||||||
Audit fees (1)
|
$
|
106,813
|
$
|
397,721
|
||||
Tax fees(2)
|
4,500
|
5,000
|
||||||
Other services
|
-
|
-
|
||||||
Total fees
|
$
|
111,313
|
$
|
402,721
|
(1)
|
Includes professional services rendered in connection with the audit of our annual financial statements and the review of our interim financial statements and services related to the
company’s initial public offering and other registration statements.
|
(2)
|
Tax consulting services.
|
• |
Shareholder Approval. Although Nasdaq rules generally require shareholder approval of equity compensation plans and material amendments thereto, we intend to follow Israeli
practice, which is to have such plans and amendments approved only by the board of directors, unless such arrangements are for the compensation of executive officers or directors, in which case they also require the approval of the
compensation committee, and in the case of directors and the chief executive officer (and under certain circumstances, other executive officers) the approval of the shareholders. In addition, rather than following Nasdaq rules
requiring shareholder approval for the issuance of securities in certain circumstances, such as in private transactions exceeding 20% of the Company’s outstanding registered securities, we intend to follow Israeli law applicable to
us, which requires shareholder approval in the event of issuances to certain related parties, as described below under “—Fiduciary Duties and Approval of Related Party Transactions—Approval of Related Party Transactions.”
|
• |
Shareholder Quorum. Nasdaq rules require that an issuer have a quorum requirement for shareholder meetings of at least one-third of the outstanding shares of the issuer’s common voting stock. As permitted under the Companies Law,
pursuant to our amended Articles, the quorum required for an ordinary meeting of shareholders will consist of at least two shareholders present in person or by proxy who hold in the aggregate at least 25% of the voting power of our
issued and outstanding shares and, in an adjourned meeting, subject to certain exceptions, any two shareholders.
|
• |
Compensation Committee. Nasdaq rules require a listed company to have a compensation committee composed entirely of independent directors that operates pursuant to a written charter addressing its purpose, responsibilities and
membership qualifications and may receive counseling from independent consultants, after evaluating their independence. The purpose, responsibilities and membership qualifications of our compensation committee are governed by the
Companies Law, rather than the Nasdaq rules. In addition, under the Companies Law, there are no specific independence evaluation requirements for outside consultants.
|
• |
Independent Approval of Board Nominations. Nasdaq rules require a listed company to have independent control over the approval of board nominations, either through an independent nominating committee or through a vote by a majority
of the company’s independent directors. Under the Companies Law, there is no requirement to have a nominating committee or that board nominees be approved by independent directors.
|
• |
Independent Directors. Under Nasdaq rules, a majority of the board of directors must be independent. Under the Companies Law, there is no requirement that a majority of the board be independent, rather only that at least two
directors meet certain independence requirements and be classified as external directors for purposes of the Companies Law. See “Item 6.C.—Board Practices—External Directors.”
|
• |
Executive Sessions. Nasdaq rules require that independent directors hold regularly scheduled executive sessions, where only independent directors are present. Under the Companies Law, our independent directors may choose to hold
executive sessions at their discretion, but are not required to do so.
|
• |
Third Party Director Compensation. We follow Israeli law requirements with respect to disclosure of compensation for our directors and executive officers. Israeli law does not require that we disclose information regarding third
party compensation of our directors or director nominees. As a result, our practice varies from the third-party compensation disclosure requirements of Nasdaq.
|
• |
refrain from any 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.
|
• |
an amendment to the company’s articles of association;
|
• |
an increase of the company’s authorized share capital;
|
• |
a merger; or
|
• |
the approval of related party transactions and acts of office holders that require shareholder approval.
|
|
Page
|
Audited Financial Statements
|
|
F - 2
|
|
F - 3
|
|
F - 4
|
|
F-5 - F-6
|
|
F-7 - F-8
|
|
F-9 - F-40
|
EXHIBIT
NUMBER
|
DESCRIPTION OF DOCUMENT
|
101
|
The following materials from our Annual Report on Form 20-F for the year ended December 31, 2019 formatted in XBRL (Extensible Business Reporting Language) are furnished herewith: (i) the
Report of Independent Registered Public Accounting Firm, (ii) the consolidated statements of financial position, (iii) the consolidated statements of comprehensive loss, (iv) the consolidated statements of changes in shareholders’ equity
(capital deficiency), (v) the consolidated statements of cash flows, and (vi) the notes to consolidated financial statements, tagged as blocks of text and in detail.
|
|
ENTERA BIO LTD.
|
|
|
|
|
|
|
|
By:
|
/s/ Adam Gridley
|
|
|
|
Adam Gridley
|
|
|
|
Title: Chief Executive Officer
|
|
|
|
Date: March 26, 2020
|
|
Page
|
|
F-2
|
|
F-3
|
|
F-4
|
|
F-5 - F-6
|
|
F-7 - F-8
|
|
F-9 - F-40
|
Tel-Aviv, Israel
|
March 26, 2020
|
Kesselman & Kesselman, Trade Tower, 25 Hamered Street, Tel-Aviv 6812508, Israel, P.O Box 50005 Tel-Aviv
|
6150001 Telephone: +972 -3- 7954555, Fax:+972 -3- 7954556, www.pwc.com/il
|
December 31
|
||||||||||||
2019
|
2018
|
|||||||||||
Note
|
U.S. dollars in thousands
|
|||||||||||
A s s e t s
|
||||||||||||
CURRENT ASSETS:
|
||||||||||||
Cash and cash equivalents
|
5
|
15,185
|
7,506
|
|||||||||
Short-term bank deposits
|
-
|
4,015
|
||||||||||
Accounts receivable
|
13
|
278
|
725
|
|||||||||
Other current assets
|
14a
|
|
173
|
220
|
||||||||
TOTAL CURRENT ASSETS
|
15,636
|
12,466
|
||||||||||
NON-CURRENT ASSETS:
|
||||||||||||
Property and equipment
|
202
|
224
|
||||||||||
Right of use assets
|
10
|
260
|
-
|
|||||||||
Intangible assets
|
6
|
605
|
651
|
|||||||||
TOTAL NON-CURRENT ASSETS
|
1,067
|
875
|
||||||||||
TOTAL ASSETS
|
16,703
|
13,341
|
||||||||||
Liabilities and shareholders' equity
|
||||||||||||
CURRENT LIABILITIES:
|
||||||||||||
Accounts payable:
|
||||||||||||
Trade
|
334
|
473
|
||||||||||
Other
|
14b
|
|
1,370
|
1,090
|
||||||||
Current maturities of lease liabilities
|
10
|
177
|
-
|
|||||||||
Warrants to purchase ordinary shares
|
11
|
2,444
|
1,372
|
|||||||||
Contract liabilities
|
267
|
225
|
||||||||||
TOTAL CURRENT LIABILITIES
|
4,592
|
3,160
|
||||||||||
NON-CURRENT LIABILITIES:
|
||||||||||||
Lease liabilities
|
10
|
122
|
-
|
|||||||||
Severance pay obligations, net
|
70
|
65
|
||||||||||
TOTAL NON-CURRENT LIABILITIES
|
192
|
65
|
||||||||||
TOTAL LIABILITIES
|
4,784
|
3,225
|
||||||||||
COMMITMENTS AND CONTINGENCIES
|
9
|
|||||||||||
SHAREHOLDERS' EQUITY:
|
11
|
|||||||||||
Ordinary Shares, NIS 0.0000769 par value:
|
||||||||||||
Authorized - as of December 31, 2019 and December 31, 2018, 140,010,000 shares; issued and outstanding: as of December 31, 2019, and December 31, 2018
|
||||||||||||
-17,864,684 and 11,459,780 shares, respectively
|
*
|
*
|
||||||||||
Accumulated other comprehensive income
|
41
|
41
|
||||||||||
Other reserves
|
11,398
|
13,019
|
||||||||||
Additional paid in capital
|
63,392
|
49,173
|
||||||||||
Accumulated deficit
|
(62,912
|
)
|
(52,117
|
)
|
||||||||
TOTAL SHAREHOLDERS' EQUITY
|
11,919
|
10,116
|
||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
16,703
|
13,341
|
Year ended December 31
|
||||||||||||||||
2019 | 2018 | 2017 | ||||||||||||||
Note |
U.S. dollars in thousands
|
|||||||||||||||
REVENUE
|
13
|
236
|
500
|
-
|
||||||||||||
COST OF REVENUE
|
210
|
-
|
-
|
|||||||||||||
RESEARCH AND DEVELOPMENT EXPENSES, NET
|
7,199
|
8,518
|
2,768
|
|||||||||||||
GENERAL AND ADMINISTRATIVE EXPENSES
|
4,281
|
2,843
|
8,575
|
|||||||||||||
OPERATING LOSS
|
11,454
|
10,861
|
11,343
|
|||||||||||||
FINANCIAL INCOME:
|
7,8,11
|
|||||||||||||||
Income from change in fair value of financial
liabilities at fair value through profit or loss, net |
(743
|
)
|
(523
|
)
|
(251
|
)
|
||||||||||
Other financial expenses (income), net
|
84
|
(34
|
)
|
105
|
||||||||||||
FINANCIAL INCOME, net
|
(659
|
)
|
(557
|
)
|
(146
|
)
|
||||||||||
NET COMPREHENSIVE LOSS
|
10,795
|
10,304
|
11,197
|
|||||||||||||
U.S. dollars (except for share numbers)
|
||||||||||||||||
LOSS PER ORDINARY SHARE* -
|
15
|
|||||||||||||||
Basic
|
0.89
|
1.30
|
2.49
|
|||||||||||||
Diluted
|
0.89
|
1.31
|
2.49
|
|||||||||||||
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES* -
|
||||||||||||||||
Basic
|
12,146,729
|
7,955,447
|
4,490,720
|
|||||||||||||
Diluted
|
12,146,729
|
7,983,402
|
4,490,720
|
Number of ordinary shares
|
Ordinary Shares- Amount
|
Accumulated other comprehensive income
|
Other reserves
|
Additional paid in capital
|
Accumulated deficit
|
Total
|
||||||||||||||||||||||
U.S. dollars in thousands
|
||||||||||||||||||||||||||||
BALANCE AT JANUARY 1, 2017
|
4,490,720
|
*
|
41
|
2,844
|
2,485
|
(30,616
|
)
|
(25,246
|
)
|
|||||||||||||||||||
CHANGES DURING THE YEAR
|
||||||||||||||||||||||||||||
ENDED DECEMBER 31, 2017:
|
||||||||||||||||||||||||||||
Loss for the year
|
-
|
-
|
-
|
-
|
-
|
(11,197
|
)
|
(11,197
|
)
|
|||||||||||||||||||
Share based compensation
|
-
|
-
|
-
|
4,885
|
-
|
-
|
4,885
|
|||||||||||||||||||||
Reclassification of capital contribution from controlling shareholder (note 7a)
|
- |
- |
- |
(333
|
)
|
333
|
- |
-
|
||||||||||||||||||||
Reclassification due to share-based compensation expired
|
-
|
-
|
-
|
(35
|
)
|
35
|
-
|
-
|
||||||||||||||||||||
BALANCE AT DECEMBER 31, 2017
|
4,490,720
|
*
|
41
|
7,361
|
2,853
|
(41,813
|
)
|
(31,558
|
)
|
|||||||||||||||||||
CHANGES DURING THE YEAR
|
||||||||||||||||||||||||||||
ENDED DECEMBER 31, 2018:
|
||||||||||||||||||||||||||||
Loss for the year
|
-
|
-
|
-
|
-
|
-
|
(10,304
|
)
|
(10,304
|
)
|
|||||||||||||||||||
Share-based compensation
|
-
|
-
|
-
|
1,233
|
-
|
-
|
1,233
|
|||||||||||||||||||||
Issuance of shares and warrants, net
|
1,410,000
|
*
|
-
|
427
|
8,011
|
-
|
8,438
|
|||||||||||||||||||||
Conversion of Preferred shares into Ordinary shares
|
4,905,420
|
*
|
-
|
-
|
32,621
|
-
|
32,621
|
|||||||||||||||||||||
Conversion of convertible loan into Ordinary shares
|
622,180
|
*
|
-
|
-
|
4,138
|
-
|
4,138
|
|||||||||||||||||||||
Classification of Warrants to purchase preferred shares and shares into Warrants to purchase ordinary shares
|
-
|
-
|
-
|
5,548
|
-
|
-
|
5,548
|
|||||||||||||||||||||
Reclassification due to share-based compensation expired
|
-
|
-
|
-
|
(1,195
|
)
|
1,195
|
-
|
-
|
||||||||||||||||||||
Exercise of options to ordinary shares
|
31,460
|
*
|
-
|
(304
|
)
|
304
|
-
|
-
|
||||||||||||||||||||
Reclassification of capital contribution from controlling shareholder (note 7a)
|
-
|
-
|
-
|
(51
|
)
|
51
|
-
|
-
|
||||||||||||||||||||
BALANCE AT DECEMBER 31, 2018
|
11,459,780
|
*
|
41
|
13,019
|
49,173
|
(52,117
|
)
|
10,116
|
Number of ordinary shares
|
Ordinary Shares- Amount
|
Accumulated other comprehensive income
|
Other reserves
|
Additional paid in capital
|
Accumulated deficit
|
Total
|
||||||||||||||||||||||
U.S. dollars in thousands
|
||||||||||||||||||||||||||||
BALANCE AT JANUARY 1, 2019
|
11,459,780
|
*
|
41
|
13,019
|
49,173
|
(52,117
|
)
|
10,116
|
||||||||||||||||||||
CHANGES DURING THE YEAR
|
||||||||||||||||||||||||||||
ENDED DECEMBER 31, 2019:
|
(10,795
|
)
|
(10,795
|
)
|
||||||||||||||||||||||||
Loss for the year
|
||||||||||||||||||||||||||||
Exercise of options to ordinary shares
|
662,251
|
*
|
-
|
(586
|
)
|
724
|
-
|
138
|
||||||||||||||||||||
Issuance of shares due to exercise of right to purchase ordinary shares
|
32,500 |
* |
- |
(99
|
)
|
199 |
- |
100 |
||||||||||||||||||||
Issuance of shares and warrant due to a private placement, net of issuance costs
|
5,710,153
|
*
|
205
|
10,672
|
10,877
|
|||||||||||||||||||||||
Reclassification due to share-based
compensation and warrants expired |
- |
- |
- |
(2,624
|
)
|
2,624 |
- |
-
|
||||||||||||||||||||
Share-based compensation
|
-
|
-
|
-
|
1,483
|
-
|
-
|
1,483
|
|||||||||||||||||||||
BALANCE AT DECEMBER 31, 2019
|
17,864,684
|
*
|
41
|
11,398
|
63,392
|
62,912
|
11,919
|
Year ended December 31
|
||||||||||||
2019
|
2018 | 2017 | ||||||||||
U.S. dollars in thousands
|
||||||||||||
CASH FLOWS USED IN OPERATING ACTIVITIES:
|
||||||||||||
Loss for the year
|
(10,795
|
)
|
(10,304
|
)
|
(11,197
|
)
|
||||||
Adjustments required to reflect net cash
|
||||||||||||
used in operating activities (see appendix A)
|
1,876
|
508
|
6,671
|
|||||||||
Net cash used in operating activities
|
(8,919
|
)
|
(9,796
|
)
|
(4,526
|
)
|
||||||
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:
|
||||||||||||
Decrease (increase) in restricted deposits
|
(14
|
)
|
-
|
1,053
|
||||||||
Short-term bank deposits
|
4,000
|
(4,000
|
)
|
-
|
||||||||
Purchase of property and equipment
|
(40
|
)
|
(68
|
)
|
(51
|
)
|
||||||
Net cash provided by (used in) investing activities
|
3,946
|
(4,068
|
)
|
1,002
|
||||||||
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES:
|
||||||||||||
Principle element of lease payments
|
(114
|
)
|
-
|
-
|
||||||||
Proceeds from Issuance of ordinary shares and warrants, net of issuance costs
|
12,528
|
9,624
|
-
|
|||||||||
Proceeds from exercise of warrants
|
100
|
-
|
-
|
|||||||||
Proceeds from exercise of options
|
138
|
-
|
-
|
|||||||||
Proceeds from issuance of preferred shares and warrants, net of issuance costs
|
-
|
-
|
12,087
|
|||||||||
Maturity of Convertible loans
|
-
|
-
|
(980
|
)
|
||||||||
Net cash generated from financing activities
|
12,652
|
9,624
|
11,107
|
|||||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
7,679
|
(4,240
|
)
|
7,583
|
||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR
|
7,506
|
11,746
|
4,163
|
|||||||||
CASH AND CASH EQUIVALENTS AT END OF THE YEAR
|
15,185
|
7,506
|
11,746
|
Year ended December 31
|
||||||||||||
2019 | 2018 | 2017 | ||||||||||
U.S. dollars in thousands
|
||||||||||||
APPENDIX A:
|
||||||||||||
Adjustments required to reflect net cash used in operating activities:
|
||||||||||||
Depreciation and amortization
|
238
|
54
|
43
|
|||||||||
Change in fair value of financial liabilities at fair
value through profit or loss
|
(743
|
)
|
(523
|
)
|
(251
|
)
|
||||||
Issuance costs
|
164
|
270
|
1,091
|
|||||||||
Financial expenses, net
|
10
|
21
|
48
|
|||||||||
Net changes in severance pay obligation
|
5
|
(5
|
)
|
19
|
||||||||
Share-based compensation
|
1,483
|
1,233
|
4,885
|
|||||||||
1,157
|
1,050
|
5,835
|
||||||||||
Changes in working capital:
|
||||||||||||
Decrease (increase) in accounts receivable
|
447
|
(725
|
)
|
|||||||||
Decrease (increase) in other current assets
|
61
|
451
|
(454
|
)
|
||||||||
Increase (decrease) in accounts payable:
|
||||||||||||
Trade
|
(139
|
)
|
(123
|
)
|
543
|
|||||||
Other
|
280
|
(334
|
)
|
820
|
||||||||
Increase (decrease) in contract liabilities
|
42
|
225
|
||||||||||
691
|
(506
|
)
|
909
|
|||||||||
Cash used for operating activities:
|
||||||||||||
Interest received
|
83
|
|||||||||||
Interest paid
|
(55
|
)
|
(36
|
)
|
(73
|
)
|
||||||
1,876
|
508
|
6,671
|
APPENDIX B:
|
||||||||||||
Supplementary information on investing and financing activities not involving cash flows:
|
||||||||||||
Conversion of preferred shares into ordinary shares
|
32,621
|
|||||||||||
Conversion of convertible loan into ordinary shares
|
4,138
|
|||||||||||
Right of use assets on obtained in exchange for new operating lease liabilities
|
224
|
a. |
General:
|
1. |
Entera Bio Ltd. (collectively with its subsidiary, the "Company") was incorporated on September 30, 2009 and commenced operation on June 1, 2010. On January 8, 2018 the Company incorporated Entera Bio Inc., a fully owned subsidiary
incorporated in Delaware USA. The Company is a leader in the development and commercialization of orally delivered macromolecule therapeutics for use in areas with significant unmet medical need where adoption of injectable therapies
is limited due to cost, convenience and compliance challenges for patients. The Company’s most advanced product candidates, EB613 for the treatment of osteoporosis and EB612 for the treatment of hypoparathyroidism, are based on its
proprietary technology platform and are both in Phase 2 clinical development. The Company also licenses its technology to biopharmaceutical companies for use with their proprietary compounds and, to date, has completed one such
collaboration with Amgen Inc.
|
2. |
The Company's securities have been listed for trading on the Nasdaq Capital Market since the Company’s initial public offering in July 2018, where a total of 1, 400,000 new ordinary shares were issued
in consideration of net proceeds of $9.6 million, after deducting offering expenses (see note 11b).
|
3. |
On December 10, 2018, the Company entered into a research collaboration and license agreement (the “Amgen Agreement”) with Amgen Inc. (“Amgen”) in inflammatory disease and other serious illnesses. Pursuant to the Amgen Agreement, the
Company and Amgen use the Company’s proprietary drug delivery platform to develop oral formulations for one preclinical large molecule program that Amgen has selected. Amgen also has options to select up to two additional programs to
include in the collaboration. Amgen is responsible for the clinical development, regulatory approval, manufacturing and worldwide commercialization of the programs.
|
b. |
Since the Company is engaged in research and development activities, it has not derived significant income from its activities and has incurred accumulated losses in the amount of $62.9 million through
December 31, 2019 and negative cash flows from operating activities. The Company's management is of the opinion that its available funds as of December 31, 2019 will allow the Company to operate under its current plans into the second
quarter of 2021, due to delays in certain activities as a result of the recent coronavirus (COVID-19) outbreak. These factors raise substantial doubt as to the Company's ability to continue as a going concern.
|
a. |
Basis of preparation of the financial statements:
|
b. |
Functional and presentation currency:
|
1) |
Functional and presentation currency
|
2) |
Transactions and balances
|
e. |
Short-term bank deposits
|
f. |
Restricted deposits
|
g. |
Property and equipment
|
1) |
Property and equipment are stated at historical cost less accumulated depreciation and impairment. Historical cost includes expenditures that are directly attributable to the acquisition of the items. Repairs and maintenance are
charged to the statement of comprehensive loss during the period in which they are incurred.
|
2) |
The assets are depreciated using the straight-line method to allocate their cost over their estimated useful lives, as follows:
|
Years
|
|
Computers equipment
|
3-5
|
Office furniture
|
5
|
Lab equipment
|
7-10
|
Leasehold improvements*
|
3-5
|
h. |
Intangible assets:
|
1) |
Research and development expenses
|
• |
It is technically feasible to complete the intangible asset so that it will be available for use;
|
• |
Management intends to complete the intangible asset and use it or sell it;
|
• |
There is an ability to use or sell the intangible asset;
|
• |
It can be demonstrated how the intangible asset will generate probable future economic benefits;
|
• |
Adequate technical, financial and other resources to complete the development and to use or sell the intangible asset are available; and costs associated with the intangible asset during development can be measured reliably.
|
2) |
In process research and development (IPR&D)
IPR&D acquired is presented based on the fair value at the date of the acquisition. Such assets are tested annually for impairment.
|
i. |
Impairment of non-financial assets
|
k. |
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments. The Company operates in one operating segment. |
m. |
Warrants
|
1. |
Identification of the contract, or contracts, with a customer.
|
2. |
Identification of the performance obligations in the contract.
|
3. |
Determination of the transaction price.
|
4. |
Allocation of the transaction price to the performance obligations in the contract.
|
5. |
Recognition of revenue.
|
a) |
The subsequent sale or usage occurs; and
|
b) |
The performance obligation to which some or all of the sales based or usage-based royalty has been allocated has been satisfied (or partially satisfied).
|
s. |
Loss per ordinary share
|
a. |
Financial risk management:
|
1) |
Financial risk factors
|
2) |
Credit risk
|
3) | Liquidity risk |
3) |
Market risk—Foreign exchange risk
|
b. |
Capital risk management
|
c. |
Fair value of financial instruments
|
Level 1 |
Quoted prices (unadjusted) in active markets for identical assets or liabilities.
|
Level 2 |
Inputs, other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices).
|
Level 3 |
Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
|
d. |
Classification of financial instruments by groups:
|
Financial liabilities at fair value through profit
or loss
|
Financial liabilities at amortized cost |
Total
|
||||||||||
U.S. dollars in thousands
|
||||||||||||
As of December 31,
2019: |
||||||||||||
Trade and other payable
|
-
|
1,704
|
1,704
|
|||||||||
Warrants to purchase ordinary shares (Level 1) (1)
|
266
|
-
|
266
|
|||||||||
Warrants to purchase ordinary shares (Level 3) (2)
|
2,178
|
-
|
2,178
|
|||||||||
2,444
|
1,704
|
4,148
|
||||||||||
As of December 31,
2018: |
||||||||||||
Trade and other payable
|
-
|
1,563
|
1,563
|
|||||||||
Warrants to purchase ordinary shares (Level 1) (1)
|
1,372
|
-
|
1,372
|
|||||||||
1,372
|
1,563
|
2,935
|
(1) |
Tradable warrants presented above are valuated based on the market price (a Level 1 valuation) as of December 31, 2019.
|
(2) |
Warrants to purchase ordinary shares issued in December 2019 presented are valuated based on the Monte-Carlo pricing model (a Level 3 valuation) as of December 31, 2019.
The main assumptions used are as follows:
|
December 31
|
|
2019
|
|
Price per share
|
$1.84-$2.07
|
Volatility
|
62%-63%
|
Expected term
|
3
|
Risk free interest rate
|
1.63%-1.71%
|
Expected dividend
|
0% |
December 31,
|
||||||||
2019
|
2018
|
|||||||
U.S. dollars
in thousands |
||||||||
Cash in bank
|
15,185
|
5,499
|
||||||
Short-term bank deposits (1)
|
-
|
2,007
|
||||||
15,185
|
7,506
|
(1) |
The short-term bank deposit as of December 31, 2018 was in U.S. dollar and bear an annual interest rate of 2.17%.
|
a. |
On June 1, 2010 D.N.A. Biomedical Solutions Ltd. ("D.N.A.") and Oramed Ltd., ("Oramed") entered into a joint venture agreement, (the "Joint Venture Agreement") for the establishment of Entera Bio Ltd. According to the Joint Venture
Agreement each of D.N.A. and Oramed acquired 50% of the Company's ordinary shares. D.N.A invested $600,000 in the Company, and Oramed and the Company entered into a Patent License Agreement pursuant to which Oramed licensed to the
Company certain of Oramed's patent (the “IPR&D”). The IPR&D was recorded as an intangible asset based on its fair value.
|
b. |
The Company tests intangible assets for impairment at least once a year at December 31 by calculating the recoverable amount of the cash generating unit to which the intangible asset belongs, which is the Company as a whole. The
recoverable amount was calculated based on a fair value less cost to sell. For the purpose of calculating fair value of the Company's equity as of December 31, 2019 and December 31, 2018, the Company applied the market approach and
calculated its enterprise value based on the quoted price per share.
|
a. |
As of December 31, 2019, and 2018, there were no convertible loans outstanding. The convertible loans were eventually converted into ordinary shares of the Company upon the closing of the Company’s initial public offering in July
2018. See note 11.
|
1. |
2012 Convertible Loan
|
2. |
2015 Convertible Loan
|
3. |
2016 Convertible Loan
In June 2016, the Company closed a private placement (the "2016 Convertible Loan") with certain lenders in an aggregate amount of approximately $7.4 million with the following terms: |
i. |
The loan has a maturity of 18 months and bears interest at a rate of 5% per year. The loan will be automatically converted upon occurrence of the following events as described in the agreement: IPO of at least $20 million, private
placement in an aggregate amount of no less than $10 million or change of control (the "Triggering Event"). Furthermore, in case of private placement in an aggregate amount of $4-$10 million the lenders shall have the right to convert
the loan to shares. The loan will convert into the same class of shares issued in such a transaction at the lower of a 25% discount to the applicable price per share in the Triggering Event or the value of equity on a fully diluted
basis of $65 million.
The Company has designated the 2016 Convertible Loan on initial recognition as a financial liability at fair value through profit or loss. |
ii. |
Warrants to purchase additional shares (“2016 Warrants”) equal to 40% of the shares issued upon conversion in exchange for an exercise price of the fair value of the shares in a Triggering Event. The warrant will be exercisable for
4 years from the grant date.
|
b. |
The Company prepared a valuation of the 2012 Convertible loan and the 2016 convertible loan (a Level 3 valuation). The debt component of the convertible loans was valued based on the discounting of future payments of the debt. The
convertible components (conversion option to the Company's ordinary shares) were valued based on a combination of the Probability-Weighted Expected Return Method and Back Solve option pricing method model. The conversion of the 2012
Convertible loans into ordinary shares was performed according to their fair value as of the IPO closing date, July 2, 2018. The following parameters were used:
|
July 2
|
||||
2018
|
||||
Price per share*
|
$
|
865
|
||
Volatility
|
62
|
%
|
||
Probability of entering Phase 2b/3
|
NA
|
|||
Probability for IPO
|
100
|
%
|
a. |
In the course of 2014, and on January 11, 2015 the Company consummated the closing of the Series A Preferred Share Purchase Agreements (the preferred share purchase agreements) with Centillion and certain shareholders (the
“Investors”). Pursuant to the terms of the preferred share purchase agreements the Company issued 5,111 preferred shares for an aggregate purchase price of $2.5 million. The Company also issued warrant to purchase up to 1,277 of its
applicable shares upon exercise of the warrant ("applicable shares") at the per share purchase price. According to the preferred share purchase agreements, upon the Company's filing of a registration statement for an initial public
offering with the SEC no later than June 29, 2014 (which was extended to November 1, 2014) , or the "first milestone", the Investors were required to purchase from the Company an additional 5,111 preferred shares at the per share
purchase price (for additional proceeds of $2.5 million) and the Company was required to issue to the Investors a warrant to purchase an additional 1,277 applicable shares at the per share purchase price. Finally, pursuant to the terms
of the preferred share purchase agreements, upon the consummation of an initial public offering of the Company's ordinary shares on or prior to December 29, 2014 (which was extended to May 1, 2015, October 1, 2015, October 1, 2017 and
later on to July 20, 2019), pursuant to which the ordinary shares are listed on the Nasdaq or AMEX, or a "Qualified IPO" and such event the "second milestone", the Investors were required to purchase from the Company an additional 2,555
preferred shares at the per share purchase price (for additional proceeds of $1.3 million) and the Company was required to issue to the Investors a warrant to purchase an additional 639 preferred shares at the per share purchase price.
Centillion also had the right to acquire the preferred shares and warrant to be issued upon either of the milestones prior to the applicable milestone date.
|
b. |
In October and December 2017, the Company entered into a Series B preferred share purchase agreement (the “Preferred B Financing”), with certain investors, including D.N.A and Centillion (together, the “Investors”). Pursuant to the
terms of the Series B preferred share purchase agreement, the Company issued and sold to the Investors 14,283 Series B preferred shares at a price per share of $908.78, for an aggregate purchase price of $13.0 million. The total
consideration net of issuance costs which were paid in cash was $12.1 million.
In addition, the Company issued to a broker dealer, a warrant to purchase 526 Series B preferred shares, at a price of $908.78 per share and recorded additional issuance costs of $198,000. Of the Investors, a number of related parties participated in the Preferred B Financing and purchased 7,089 Series B preferred shares, in the amount of $6.4million. |
c. |
For accounting of purposes, the preferred shares were classified as a financial liability considering, inter alia, the deemed liquidation events mechanism as described under the
agreement. In addition, the conversion ratio of Series A preferred shares, Series B preferred shares and Series B-1 preferred shares into ordinary shares was subject to certain adjustments, which do not meet the 'fixed for fixed'
requirement of IAS 32. Therefore, the conversion option represents an embedded derivative, which should be bifurcated and accounted for separately at fair value through profit or loss.
The Company elected to designate the entire instrument at fair value through profit or loss at each balance sheet date up to July 2, 2018 and on July 2, 2018. |
d. |
As of the closing of the IPO, July 2, 2018, the Company prepared valuations of the fair value of the instruments described above using a combination of the Probability-Weighted Expected Return Method and Back Solve option pricing
method model. The following parameters were used:
|
July 2
|
||||
2018
|
||||
Price per share*
|
$
|
865
|
||
Volatility
|
62
|
%
|
||
Probability of entering Phase 2b/3
|
NA
|
|||
Probability for IPO
|
100
|
%
|
a. |
Pursuant to the Patent Transfer Agreement with Oramed, the Company is committed to pay royalties to Oramed –see note 6.
|
b. |
The Company is committed to pay royalties to the Government of Israel on proceeds from sales of products in the research and development of which the Government participates by way
of grants. At the time the grants were received, successful development of the related project was not assumed. In the case of failure of the project that was partly financed by the Government of Israel, the Company is not obligated to
pay any such royalties. Under the terms of the Company’s funding from the Israeli Government, royalties are payable on sales of products developed from projects so funded of 3% during the first three years, from commencement of
revenues, 4% during the subsequent three years and 5% commencing the seventh year up to 100% of the amount of the grant received by the Company (dollar linked) with the addition of annual interest based on Libor. The amount that must be
repaid may be increased to three times the amount of the grant received, and the rate of royalties may be accelerated, if manufacturing of the products developed with the grant money is transferred outside of the State of Israel. As of
December 31, 2019, the total royalty amount that would be payable by the Company, before the additional Libor interest, is approximately $460,000.
|
c. |
Emisphere Technologies, Inc., or Emisphere, has notified the Company that it believes that it is the exclusive owner of certain U.S. and related foreign patents and patent applications the Company acquired from Oramed Ltd. Emisphere
has not initiated a legal proceeding as of the date of the approval of this financial statement. The matter is still in its early stages. If Emisphere were to initiate a legal proceeding, we would vigorously defend against such claim
and believe that Emisphere’s notification is without merit.
|
• |
Use of a single discount rate to a portfolio of leases with reasonably similar characteristics;
|
• |
Reliance on previous assessments on whether leases are onerous;
|
• |
Exclusion of initial direct costs for the measurement of the right-of-use asset at the date of initial application;
|
• |
Use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease.
|
As of January 1, 2019
|
As of December 31, 2019
|
|||||||
Facility
|
151
|
253
|
||||||
Vehicles
|
15
|
7
|
||||||
Total right-of-use asset
|
166
|
260
|
Payments due by period
|
||||||||||||
Total
|
Less than
1 year |
1 - 3 years
|
||||||||||
(In thousands)
|
||||||||||||
Operating leases for facility and vehicles as of December 31, 2018
|
$
|
123
|
$
|
87
|
$
|
36
|
||||||
Operating leases for facility and vehicles as of December 31, 2019
|
$
|
346
|
$
|
177
|
$
|
169
|
twelve months ended December 31, 2019
|
||||
Depreciation expense:
|
||||
Facility
|
121
|
|||
Vehicles
|
9
|
|||
Financial expense
|
55
|
|||
Cash paid for amounts included in the measurement of lease liabilities
|
169
|
|||
Right of use assets obtained in exchange for new operating lease liabilities
|
224
|
a. |
The share capital composed of ordinary shares of NIS 0.0000769 par value, as follows:
|
Number of ordinary shares
|
||||||||
December 31
|
||||||||
2019
|
2018
|
|||||||
Authorized
|
140,010,000
|
140,010,000
|
||||||
Issued
|
17,864,684
|
11,459,780
|
b. |
Initial Public Offering (“IPO”)
|
1) |
A 1-for- 130 split of the Company's ordinary shares. Following the split, the Company retrospectively reflected the change in the share capital of the Company for all periods presented. Unless otherwise indicated, all of the ordinary
share numbers, losses per ordinary share, share prices, options and warrants in these financial statements have been adjusted, on a retroactive basis, to reflect this 1-for- 130 split.
|
2) |
The Company’s outstanding 2012 Convertible loans were automatically converted into 622,180 Ordinary
Shares of the Company.
|
3) |
The Company's series A preferred shares, series B preferred shares and series B-1 preferred shares were
automatically converted into 1,328,860, 1,856,790 and 1,719,770,
Ordinary Shares of the Company, respectively.
|
4) |
The Company's warrants to purchase series A preferred shares, warrants to purchase Series B preferred
shares and warrants to purchase Series B-1 preferred shares were automatically converted into 343,200, 756,340 and 467,220 warrants, respectively, to purchase Ordinary Shares of the Company.
|
5) |
Existing options to purchase Series A preferred shares and warrants to purchase Series A preferred shares, granted to certain holders of our Series A preferred shares that were exercisable upon the closing of the IPO, were
automatically converted into options to purchase 387,530 Ordinary Shares of the Company and into warrants to purchase 85,931 Ordinary Shares of the Company.
|
b. |
IPO (continued):
|
c. |
On December 11, 2019 and December 18, 2019 (“the first and second closing”), the Company entered into subscription agreements with a select group of accredited investors, including certain board members or its affiliates for the
private placement of 5,710,153 ordinary shares for aggregate subscription proceeds to the Company of $13.5 million at $2.37 price per share. In addition, the Company granted 2,855,095 warrants, exercisable over a three-years period from
the date of issuance, to purchase 2,855,095 ordinary shares at a per share exercise price of $2.96 (“Investors Warrants”).
In addition, on December 13, 2019, D.N.A Biomedical Solutions Ltd. (“DNA”), an existing shareholder of the Company, subscribed to the Private Placement (the “DNA Private Placement”) to purchase 337,553 ordinary shares for aggregate consideration of $800,000. In connection with the transaction, the Company granted DNA warrants, exercisable over a three-year period from the date of issuance, to purchase 168,776 ordinary shares at a per share exercise price of $2.96. This investment was subject to the approval of the shareholders of the Company and was approved on February 18, 2020. See note 17b. |
1) |
A cash fees equal to 10% of the total proceeds paid by subscribers invested through the Broker.
|
2) |
Three-years warrants to purchase ordinary shares in the amount equal to 10% of the number of shares issued to subscribers invested through the Broker at a per share exercise price of $2.37 (“Broker Warrants Type 1”).
|
3) |
Three-years warrants to purchase ordinary share in the amount equal to 5% of number of shares issued to subscribers invested through the Broker at a per share exercise price of $2.96 (“Broker Warrants Type 2”), together with the
Broker Warrants Type 1 (the “Broker Warrants”).
|
d. |
Share based compensation:
|
1) |
Share based compensation plan
|
2) |
Options grants to employees and directors:
|
a) |
On January 10, 2018, the Company appointed Dr. Eric Lang as the Company’s Chief Medical Officer, effective January 15, 2018. In connection with Dr. Lang’s appointment as the Company’s Chief Medical Officer, the Company’s Board of
Directors granted Dr. Lang options to purchase 110,500 ordinary shares at an exercise price of $6.31 per share. The options vest over 4 years from the date of grant; 1/4 vest on the date of grant and the remaining vest in twelve equal
quarterly installments following the first anniversary of the applicable grant date. The fair value of the options at the date of grant was $420,000. In September 2018, Dr. Eric Lang's employment was terminated and the options were
forfeited in December 2018.
|
b) |
In January 2018, the Company granted options to purchase 32,500 ordinary shares to a certain consultant, with an exercise price of $2.11. The options vested immediately. The fair value of the options at the date of grant was
$138,000.
|
c) |
On January 17, 2019, the Company granted options to purchase 124,000 ordinary shares to certain employees, with an exercise price of $3.97. The options vest over 4 years from the date of grant; 25% will vest on the first anniversary
of the date of grant and the remaining 75% options shall vest in twelve equal quarterly installments following the first anniversary of the grant date. The fair value of the options at the date of grant was $341,000.
|
d) |
On January 17, 2019, the Company's Board of Directors approved to grant options to purchase 25,000 ordinary shares to the CMO, with an exercise price of $3.97. From the total options, 25% will vest on March 1, 2019 and the remaining
75% options shall vest in twelve equal quarterly installments over the next three years starting January 17, 2019. The grant was subject to the approval by the shareholders of the Company and was subsequently approved in May 2019. The
fair value of the options at the date of grant was $68,000.
|
e) |
On January 17, 2019, the Company's Board of Directors approved to grant options to purchase 201,828 ordinary shares to non-executive directors of the Company, with an exercise price of $3.97. The options will vest over 3 years in
twelve equal quarterly instalments starting in the vesting commencement date (as described in each agreement). The grant was subject to the approval by the shareholders of the Company and was subsequently approved in May 2019. The fair
value of the options at the date of grant was $531,000.
|
f) |
On August 5, 2019, the Company’s Board of Directors approved to grant options to purchase 696,587 ordinary shares to the new CEO, with an exercise price of $2.75 per share. The options vest over 4 years from the date of grant. 25%
will vest on the first anniversary of the date of grant and the remaining 75% options shall vest in twelve equal quarterly installments following the first anniversary of the grant date. The grant was subject to the approval by the
shareholders of the Company and was subsequently approved in October 2019. The fair value of the options at the date of grant was $1.1million.
|
g) |
On November 18, 2019, the Company’s Board of Directors approved the following option grants:
|
1. |
Options grant to purchase 30,385 ordinary shares to the new US-based CFO, with an exercise price of $2.53 per share. The options will vest over two years in equal monthly installments following the grant date. The grant was subject
to the approval by the shareholders of the Company and was subsequently approved in February 2020.The fair value of the options at December 31, 2019 was $37,000.
|
2. |
Options grant to purchase 33,638 ordinary shares t0 non-executive director of the Company, with an exercise price of $2.53. The options will vest over 3 years in twelve equal quarterly instalments starting on the vesting commencement
date (as described in the agreement). The grant was subject to the approval by the shareholders of the Company and was subsequently approved in February 2020. The fair value of the options at December 31, 2019 was $43,000.
|
3) |
Options granted to service provider:
|
4) |
The fair value of each option granted (except options with an exercise price of par value, as described below) is estimated at the date of grant using the Black-Scholes option-pricing model, with the following weighted average
assumptions:
|
2019
|
2018
|
2017
|
||||||||||
Ordinary share price
|
$
|
2.94
|
$
|
6.31
|
$
|
5.95
|
||||||
Exercise price
|
$
|
3.12
|
$
|
5.35
|
$
|
5.95
|
||||||
Dividend yield
|
-
|
-
|
-
|
|||||||||
Expected volatility
|
71
|
%
|
68
|
%
|
73.77
|
%
|
||||||
Risk-free interest rate
|
1.86
|
%
|
2.23
|
%
|
1.67
|
%
|
||||||
Expected life – in years
|
9.37
|
4.07
|
7.94
|
5) |
Changes in the number of options and weighted average exercise prices are as follows:
|
Year ended December 31,
|
||||||||||||||||||||||||
2019
|
2018
|
2017
|
||||||||||||||||||||||
Number of options
|
Weighted average exercise price
|
Number of options
|
Weighted average exercise price
|
Number of options
|
Weighted average exercise price
|
|||||||||||||||||||
Outstanding at beginning of year
|
2,438,410
|
$
|
4.36
|
3,044,990
|
$
|
4.59
|
1,136,590
|
$
|
1.43
|
|||||||||||||||
Expired
|
(91,000
|
)
|
6.31
|
-
|
-
|
-
|
-
|
|||||||||||||||||
Forfeited
|
(14,690
|
)
|
4.44
|
(718,120
|
)
|
5.73
|
(36,270
|
)
|
2.27
|
|||||||||||||||
Exercised (*)
|
(662,251
|
)
|
0.21
|
(31,460
|
)
|
-
|
-
|
-
|
||||||||||||||||
Granted
|
1,177,131
|
$
|
3.12
|
143,000
|
$
|
5.35
|
1,944,670
|
$
|
6.39
|
|||||||||||||||
Outstanding at end of year
|
2,847,600
|
$
|
4.74
|
2,438,410
|
$
|
4.36
|
3,044,990
|
$
|
4.59
|
|||||||||||||||
Exercisable at end of year
|
1,525,618
|
$
|
5.62
|
1,837,160
|
$
|
1.67
|
1,430,780
|
$
|
2.92
|
6) |
The following is information about the exercise price and remaining contractual life of outstanding options at year-end:
|
December 31, 2019
|
December 31, 2018
|
|||||||||||||||||||||
Number of options outstanding at end of year
|
Exercise price
|
Weighted average of remaining contractual life
|
Number of options outstanding at end of year
|
Exercise price
|
Weighted average of remaining contractual life
|
|||||||||||||||||
4,680
|
*
|
2.79
|
602,810
|
*
|
0.55
|
|||||||||||||||||
11,050
|
$
|
1.85
|
1.22
|
27,560
|
$
|
1.85
|
0.67
|
|||||||||||||||
-
|
$
|
2.43
|
-
|
36,010
|
$
|
2.43
|
1.41
|
|||||||||||||||
65,000
|
$
|
2.11
|
0.05
|
65,000
|
$
|
2.11
|
1.05
|
|||||||||||||||
64,023
|
$
|
2.53
|
9.89
|
-
|
$
|
2.53
|
-
|
|||||||||||||||
696,587
|
$
|
2.75
|
9.60
|
-
|
$
|
2.75
|
-
|
|||||||||||||||
-
|
$
|
1.85
|
-
|
11,050
|
$
|
1.85
|
2.21
|
|||||||||||||||
65,693
|
$
|
3.10
|
4.89
|
-
|
-
|
-
|
||||||||||||||||
203,970
|
$
|
3.69
|
2.36
|
205,920
|
$
|
3.69
|
3.36
|
|||||||||||||||
340,828
|
$
|
3.97
|
9.05
|
-
|
$
|
3.97
|
-
|
|||||||||||||||
1,248,479
|
$
|
6.31
|
5.85
|
1,342,770
|
$
|
6.31
|
6.39
|
|||||||||||||||
147,290
|
$
|
7.54
|
3.26
|
147,290
|
$
|
7.54
|
4.26
|
7) |
The remaining unrecognized compensation expense as of December 31, 2019 is $1.9 million and will be expensed in full at August 2023.
|
8) |
Exercise of options
|
a. |
Entera Bio Ltd.
|
1) |
Measurement of results for tax purposes
|
2) |
Tax rates
|
b. |
Entera Bio Inc.
|
c. |
Losses for tax purposes carried forward to future years
|
d. |
Reconciliation of the theoretical tax expense to actual tax expense
|
e. |
Tax assessments
|
December 31,
|
||||||||
2019
|
2018
|
|||||||
U.S. dollars in thousands
|
||||||||
a. Other current assets:
|
||||||||
Prepaid expenses
|
39
|
109
|
||||||
Restricted deposits
|
37
|
21
|
||||||
Other
|
97
|
90
|
||||||
173
|
220
|
December 31,
|
||||||||
2019
|
2018
|
|||||||
U.S. dollars in thousands
|
||||||||
b. Accounts payable - other:
|
||||||||
Employees and employees related
|
345
|
120
|
||||||
Provision for vacation
|
231
|
215
|
||||||
Accrued expenses and other
|
794
|
755
|
||||||
1,370
|
1,090
|
Year ended December 31,
|
||||||||||||
2019 | 2018 | 2017 | ||||||||||
U.S. dollars in thousand
(except for share numbers)
|
||||||||||||
Loss attributable to equity holders of the Company
|
10,795
|
10,304
|
11,197
|
|||||||||
Income from change in fair value of financial liabilities at fair value
|
-
|
135
|
-
|
|||||||||
Loss used for the computation of diluted loss per share
|
10,795
|
10,439
|
11,197
|
|||||||||
Weighted average number of ordinary shares used in
|
||||||||||||
the computation of basic loss per share
|
12,146,729
|
7,955,447
|
4,490,720
|
|||||||||
Add:
|
||||||||||||
Weighted average number of additional shares issuable upon the assumed conversion/exercise of preferred shares and warrants to issue preferred
shares and shares
|
-
|
27,955
|
-
|
|||||||||
Weighted average number of ordinary shares used in the computation of diluted loss per share
|
12,146,729
|
7,983,402
|
4,490,720
|
|||||||||
Basic loss per ordinary share
|
0.89
|
1.30
|
2.49
|
|||||||||
Diluted loss per ordinary share
|
0.89
|
1.31
|
2.49
|
a. |
Transactions with related parties:
|
1) |
Key management personnel include members of the Board of Directors, the Chief Executive Officer, Chief Operating Officer, Chief Medical Officer and Chief Financial Officer.
|
2) |
The Company granted stock options to certain key management personnel and directors, see note 11d.
|
3) |
Key management compensation:
|
Year ended December 31,
|
||||||||||||
2019 | 2018 | 2017 | ||||||||||
U.S. dollars in thousands
|
||||||||||||
Labor cost and related expenses
|
1,537
|
1,180
|
1,048
|
|||||||||
Share-based compensation
|
1,146
|
868
|
4,694
|
|||||||||
Directors fee and services
|
415
|
429
|
577
|
|||||||||
Others
|
23
|
30
|
109
|
|||||||||
3,121
|
2,507
|
6,428
|
b. |
Balances with related parties:
|
December 31,
|
||||||||
2019
|
2018
|
|||||||
U.S. dollars in thousands
|
||||||||
Key management:
|
||||||||
Payables and accrued expenses
|
244
|
9
|
||||||
Severance pay obligations
|
70
|
65
|
||||||
Provision for vacation
|
194
|
186
|
||||||
Directors fee and services
|
106
|
74
|
a. |
During January 2020, a consultant exercised 32,500 options into 32,500 ordinary shares for a total consideration of $69,000.
|
b. |
As described in note 11c, on February 18, 2020, the Company’s shareholders approved the $800,000 D.N.A. private placement.
|
c. |
On March 16, 2020, the Company’s Board of Directors approved options grants as follows:
|
i. |
An options grant to purchase 201,600 ordinary shares to certain employees and 7,500 options granted to a service provider, with an exercise price of $2.14 per share. The options vest over 4 years from the date of grant; 25% vest on the first anniversary of the date of grant and the
remaining 75% vest in twelve equal quarterly installments following the first anniversary of the applicable grant date.
|
ii. |
An options grant to purchase 250,000 ordinary shares to certain executive officers of the Company, with an exercise price of $2.14. The options vest over 4 years from the date of grant; 25%vest on the first anniversary of the date
of grant and the remaining 75% vest in twelve equal quarterly installments following the first anniversary of the applicable grant date. The grant is subject to the approval by the shareholders of the Company.
|
1.
|
INTERPRETATION
|
1.1.
|
In these Articles, unless the context requires otherwise, the following capitalized terms shall have the meanings set opposite them:
“Alternate Nominee” has the meaning set out in Article 17.7;
“Alternate Director” has the meaning set out in Article 17.12;
“Articles” means these Articles of Association, as may be amended from time to time;
“Board” means all of the directors of the Company holding office pursuant to these Articles, including Alternate Directors,
substitutes or proxies;
“Business Day” means any day other than a Saturday, Sunday and any day in which banks in Israel are closed or in which the
NASDAQ Stock Market is closed.
“Chairman of the Board” has the meaning set out in in Article 18.4;
“Companies Law” means the Israeli Companies Law, 5759-1999, as amended from time to time, including the regulations
promulgated thereunder, or any other law which may come in its stead, including all amendments made thereto;
“Company” means Entera Bio Ltd.;
“Compensation Committee” has the meaning set out in the Companies Law;
“Derivative Transaction” has the meaning set out in Article 14.7;
“Effective Time” means the closing of the initial underwritten public offering of the Company’s ordinary shares, at which time
these Articles shall first become effective;
“External Director” has the meaning set out in the Companies Law;
|
|
“General Meeting” means either an annual or an extraordinary meeting of the shareholders;
“Incapacitated Person” as such term is used in the Israeli Legal Capacity and Guardianship Law, 5722-1962, as amended from time to time, and includes a minor who has
not yet attained the age of 18 years, a person of unsound mind and a bankrupt person in respect of whom no rehabilitation has been granted;
“Israeli Securities Law” means the Israeli Securities Law, 5728-1968, as amended from time to time, including the regulations promulgated thereunder, or any other law
which may come in its stead, including all amendments made thereto;
“Nominees” has the meaning set out in Article 17.7;
“Office” means the registered office of the Company at that time;
“Office Holder” has the meaning set out in the Companies Law;
“Proposal Request” has the meaning set out in Article 14.5;
“Proposing Shareholder” has the meaning set out in Article 14.5;
“Register” means the register of shareholders administered in accordance with the Companies Law;
“Rights” has the meaning set out in Article 26.8;
“Special Fund” has the meaning set out in Article 26.8;
“U.S. Rules” means the applicable rules of the NASDAQ Stock Market and U.S. securities laws, rules and regulations, as amended from time to time; and
|
1.2.
|
Reference to “writing”, “written” or similar expressions in these Articles means handwriting, typewriting, photography, telex, email or any other legible form of writing. Reference to a
“person” or “persons” shall also include corporations, companies, cooperative societies, partnerships, trusts of any kind or any other body of persons, whether incorporated or otherwise.
|
|
1.3.
|
Subject to the provisions of this Article 1 and unless the context necessitates another meaning, terms and expressions in these Articles which have been defined in the Companies Law
shall have the meanings ascribed to them therein.
|
|
1.4
|
Words in the singular shall also include the plural, and vice versa. Words in the masculine shall include the feminine and vice versa.
|
|
1.5.
|
The captions to articles in these Articles are intended for the convenience of the reader only, and no use shall be made thereof in the interpretation of these Articles.
|
2.
|
LIMITED LIABILITY
The Company is a limited liability company and therefore each shareholder’s liability for the Company’s obligations shall be limited to the
payment of the nominal value of the shares held by such shareholder, subject to the provisions of the Companies Law.
|
3.
|
OBJECTIVES
The Company’s objectives are to engage in any lawful activity. The Company may donate a reasonable amount of money for any purpose that the Board
finds appropriate, even if the donation is not for business considerations or for the purpose of achieving profits for the Company.
|
4.
|
REGISTERED OFFICE
The registered office shall be at such place as decided by the Board from time to time.
|
5.
|
AUTHORIZED SHARE CAPITAL
The authorized share capital of the Company shall consist of NIS 10,770 divided into 140,010,000 ordinary shares with a nominal value of NIS
0.0000769 each.
|
6.
|
RIGHTS ATTACHING TO THE ORDINARY SHARES
|
6.1.
|
The ordinary shares in respect of which all calls have been fully paid shall confer on the holders thereof the right to attend and to vote at General Meetings of the Company, both annual as
well as extraordinary meetings. Each ordinary share shall confer on its holder one vote at a General Meeting.
|
|
6.2.
|
The ordinary shares shall confer on a holder thereof the right to receive a dividend, to participate in a distribution of bonus shares and to participate in the distribution of the assets of
the Company upon its winding-up, pro rata to the nominal amount paid up on the shares or credited as paid up in respect thereof, and without reference to any premium which may have been paid in respect thereof.
|
7.
|
MODIFICATION OF CLASS RIGHTS
|
7.1.
|
Subject to applicable law, if at any time the share capital of the Company is divided into different classes of shares and unless the terms of issue of such class of shares otherwise
stipulate, the rights attaching to any class of shares (including rights prescribed in the terms of issue of the shares) may be altered, modified or canceled by a resolution passed at a separate class meeting of the shareholders of that
class.
|
|
7.2.
|
The provisions contained in these Articles with regard to General Meetings shall apply, mutatis mutandis as the case may be, to every class meeting
of the holders of each such class of the Company’s shares.
|
|
7.3.
|
Unless otherwise provided by these Articles, the increase of an authorized class of shares, or the issuance of additional shares thereof out of the authorized and unissued share capital,
shall not be deemed, for purposes of this Article 7, to modify or abrogate the rights attached to previously issued shares of such class or of any other class.
|
8.
|
UNISSUED SHARE CAPITAL
|
8.1.
|
The unissued shares in the capital of the Company shall be under the control of the Board, which shall be entitled to allot or otherwise grant the same to such persons under such restrictions
and conditions as it shall deem fit, whether for consideration or otherwise, and whether for consideration in cash or for consideration which is not in cash, above their nominal value or at a discount, all on such conditions, in such manner
and at such times as the Board shall deem fit, subject to the provisions of the Companies Law. The Board shall be entitled, inter alia, to differentiate between shareholders with regard to the amounts
of calls in respect of the allotment of shares (to the extent that there are calls) and with regard to the time for payment thereof. The Board may also issue options or warrants for the purchase of shares of the Company and prescribe the
manner of the exercise of such options or warrants, including the time and price for such exercise and any other provision which is relevant to the method for distributing the issued shares of the Company amongst the purchasers thereof.
|
|
8.2.
|
The Board shall be entitled to prescribe the times for the issue of shares of the Company and the conditions therefor and any other matter which may arise in connection with the issue
thereof.
|
|
8.3.
|
In every case of a rights offering, the Board shall be entitled, in its discretion, to resolve any problems and difficulties arising or that are likely to arise in regard to fractions of
rights, and without prejudice to the generality of the foregoing, the Board shall be entitled to specify that no shares shall be allotted in respect of fractions of rights, or that fractions of rights shall be sold and the net proceeds shall
be paid to the persons entitled to the fractions of rights, or, in accordance with a decision by the Board, to the benefit of the Company.
|
9.
|
INCREASE OF CAPITAL; ALTERATIONS TO CAPITAL
|
9.1.
|
The Company may, from time to time, by a resolution of the shareholders at a General Meeting, increase its share capital by way of the creation of new shares, whether or not all the existing
shares have been issued up to the date of the resolution, whether or not it has been decided to issue same, and whether or not calls have been made on all the issued shares.
|
||
9.2.
|
The increase of share capital shall be in such amount and divided into shares of such nominal value, and with such restrictions and conditions and with such rights and privileges as the
resolution dealing with the creation of the shares prescribes, and if no provisions are contained in the resolution, then as the Board shall prescribe.
|
||
9.3.
|
Unless otherwise stated in the resolution approving the increase of the share capital, the new shares shall be subject to those provisions in regard to issue, allotment, alteration of rights,
payment of calls, liens, forfeiture, transfer, transmission and other provisions which apply to the shares of the Company.
|
||
9.4.
|
By resolution of the shareholders in a General Meeting, the Company may, subject to any applicable provisions of the Companies Law:
|
||
9.4.1.
|
consolidate its existing share capital, or any part thereof, into shares of a larger denomination than the existing shares;
|
||
9.4.2.
|
sub-divide its share capital, in whole or in part, into shares of a smaller denomination than the nominal value of the existing shares and without prejudice to the foregoing, one or more of
the shares so created may be granted any preferred or deferred rights or any special rights with regard to dividends, participation in assets upon winding-up, voting and so forth, subject to the provisions of these Articles;
|
||
9.4.3.
|
reduce its share capital; or
|
||
9.4.4.
|
cancel any shares which on the date of passing of the resolution have not been issued and to reduce its share capital by the amount of such shares.
|
9.5.
|
In the event that the Company’s shareholders shall adopt any of the resolutions described in Article 9.4 above, the Board shall be entitled to prescribe arrangements necessary in
order to resolve any difficulty arising or that are likely to arise in connection with such resolutions, including, in the event of a consolidation, it shall be entitled to (i) allot, in contemplation of or subsequent to such consolidation or
other action, shares or fractional shares sufficient to preclude or remove fractional share holdings; (ii) redeem, in the case of redeemable shares, and subject to applicable law, such shares or fractional shares sufficient to preclude or
remove fractional share holdings; (iii) round up, round down or round to the nearest whole number, any fractional shares resulting from the consolidation or from any other action which may result in fractional shares; or (iv) cause the
transfer of fractional shares by certain shareholders to other shareholders thereof so as to most expediently preclude or remove any fractional shareholdings, and, cause the transferees of such fractional shares to pay the transferors thereof
the fair value thereof, and the Board is hereby authorized to act in connection with such transfer, as agent for the transferors and transferees of any such fractional shares, with full power of substitution, for the purposes of implementing
the provisions of this Article 9.5.
|
10.
|
SHARE CERTIFICATES
|
10.1.
|
To the extent shares are certificated, share certificates evidencing title to the shares of the Company shall be issued under the seal or rubber stamp of the Company, and together with the
signatures of two members of the Board, or one director together with the Chief Executive Officer, the Chief Financial Officer or any other person designated by the Board. The Board shall be entitled to decide that the signatures be effected
in any mechanical or electronic form, provided that the signature shall be effected under the supervision of the Board in such manner as it prescribes.
|
|
10.2.
|
Every shareholder shall be entitled, free of charge, to one certificate in respect of all the shares of a single class registered in his name in the Register.
|
|
10.3.
|
The Board shall not refuse a request by a shareholder to obtain several certificates in place of one certificate, unless such request is, in the opinion of the Board, unreasonable. Where a
shareholder has sold or transferred some of his shares, he shall be entitled, free of charge, to receive a certificate in respect of his remaining shares, provided that the previous certificate is delivered to the Company before the issuance
of a new certificate.
|
10.4.
|
Every share certificate shall specify the number of the shares in respect of which such certificate is issued and also the amounts which have been paid up in respect of each share.
|
|
10.5.
|
No person shall be recognized by the Company as having any right to a share unless such person is the registered owner of the shares in the Register. The Company shall not be bound by and
shall not recognize any right or privilege pursuant to the laws of equity, or a fiduciary relationship or a chose in action, future or partial, in any share, or a right or privilege to a fraction of a share, or (unless these Articles
otherwise direct) any other right in respect of a share, except the absolute right to the share as a whole, where same is vested in the owner registered in the Register.
|
|
10.6.
|
A share certificate registered in the names of two or more persons shall be delivered to one of the joint holders, and the Company shall not be obliged to issue more than one certificate to
all the joint holders of shares and the delivery of such certificate to one of the joint holders shall be deemed to be delivery to all of them.
|
|
10.7.
|
If a share certificate should be lost, destroyed or defaced, the Board shall be entitled to issue a new certificate in its place, provided that the certificate is delivered to it and
destroyed by it, or it is proved to the satisfaction of the Board that the certificate was lost or destroyed and security has been received to its satisfaction in respect of any possible damages and after payment of such amount as the Board
shall prescribe.
|
11.
|
CALLS ON SHARES
|
11.1.
|
The Board may from time to time, in its discretion, make calls on shareholders in respect of amounts which are still unpaid in respect of the shares held by each of the shareholders
(including premiums), if the terms of issue do not prescribe that same be paid at fixed times, and every shareholder shall be obliged to pay the amount of the call made on him, at such time and at such place as stipulated by the Board.
|
|
11.2.
|
In respect of any such call, prior notice of at least fourteen (14) Business Days shall be given, stating to whom the amount called is to be paid, the time for payment and the place thereof,
provided that prior to the due date for payment of such call, the Board may, by written notice to the shareholders to which the call was made, cancel the call or extend the date of payment thereof.
|
|
11.3.
|
If according to the terms of issue of any share, or otherwise, any amount is required to be paid at a fixed time or in installments at fixed times, whether the payment is made on account of
the nominal value of the share or in form of a premium, every such payment or every such installment shall be paid as if it was a call duly made by the Board, in respect of which notice was duly given, and all the provisions contained in
these Articles in regard to calls shall apply to such amount or to such installment.
|
11.4.
|
Joint holders of a share shall be jointly and severally liable for the payment of all installments and calls due in respect of such share.
|
|
11.5.
|
In the event that a call or installment due on account of a share is not paid on or before the date fixed for payment thereof, the holder of the share, or the person to whom the share has
been allotted, shall be obliged to pay linkage differentials and interest on the amount of the call or the installment, at such rate as shall be determined by the Board, commencing from the date fixed for the payment thereof and until the
date of actual payment. The Board may, however, waive the payment of the linkage differentials or the interest or part thereof.
|
|
11.6.
|
A shareholder shall not be entitled (i) to receive a dividend and (ii) to exercise any right as a shareholder, including but not limited to, the right to attend and vote at a General Meeting
and to transfer the shares to another, unless he has paid all the calls payable from time to time and which apply to any of his shares, whether he holds same alone or jointly with another, plus linkage differentials, interest and expenses, if
any.
|
|
11.7.
|
The Board may, if it deems fit, accept payment from a shareholder wishing to advance the payment of all moneys which remain unpaid on account of his shares, or part thereof which are over and
above the amounts which have actually been called, and the Board shall be entitled to pay such shareholder linkage differentials and interest in respect of the amounts paid in advance, or that portion thereof which exceeds the amount called
for the time being on account of the shares in respect of which the advance payment is made, at such rate as is agreed upon between the Board and the shareholder, with this being in addition to dividends (if any) payable on the paid-up
portion of the share in respect of which the advance payment is made. The Board may, at any time, repay the amount paid in advance as aforesaid, in whole or in part, in its sole discretion, without premium or penalty. Nothing in this Article
11.7 shall derogate from the right of the Board to make any call for payment before or after receipt by the Company of any such advance.
|
12.
|
FORFEITURE AND LIEN
|
12.1.
|
If a shareholder fails to make payment of any call or other installment on or before the date fixed for the payment thereof, the Board may, at any time thereafter and for as long as the part
of the call or installment remains unpaid, serve on such shareholder a notice demanding that he make payment thereof, together with the linkage differentials and interest at such rate as is specified by the Board and all the expenses incurred
by the Company in consequence of such non-payment.
|
|
12.2.
|
The notice shall specify a further date, which shall be at least fourteen (14) Business Days after the date of the delivery of the notice, and a place or places at which such call or
installment is to be paid, together with linkage differentials and interest and expenses as aforesaid. The notice shall further state that, if the amount is not paid on or before the date specified, and at the place mentioned in such notice,
the shares in respect of which the call was made, or the installment is due, shall be liable to forfeiture.
|
|
12.3.
|
If the demands contained in such notice are not complied with the Board may treat the shares in respect of which the notice referred to in Articles 12.1 and 12.2 was given as
forfeited. Such forfeiture shall include all dividends, bonus shares and other benefits which have been declared in respect of the forfeited shares which have not actually been paid prior to the forfeiture.
|
|
12.4.
|
Any share so forfeited or waived shall be deemed to be the property of the Company and the Board shall be entitled, subject to the provisions of these Articles and the Companies Law, to sell,
re-allot or otherwise dispose thereof, as it deems fit, whether the amount paid previously in respect of that share is credited, in whole or in part.
|
|
12.5.
|
The Board may, at any time before any share forfeited as aforesaid is sold or re-allotted or otherwise disposed of, cancel the forfeiture on such conditions as it deems fit.
|
|
12.6.
|
Any person whose shares have been forfeited shall cease to be a shareholder in respect of the forfeited shares, but shall, nonetheless remain liable for the payment to the Company of all
calls, installments, linkage differentials, interest and expenses due on account of or in respect of such shares on the date of forfeiture, in respect of the forfeited shares, together with interest on such amounts reckoned from the date of
forfeiture until the date of payment, at such rate as the Board shall from time to time specify. However, such person’s liability shall cease after the Company has received all the amounts called in respect of the shares as well as any
expenses incurred by the Company relating to collecting the amounts called. The Board shall be entitled to collect the moneys which have been forfeited, or part thereof, as it shall deem fit, but it shall not be obliged to do so.
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12.7.
|
The provisions of these Articles in regard to forfeiture shall also apply to cases of non-payment of any amount, which, according to the terms of issue of the share, or which under the
conditions of allotment the due date for payment of which fell on a fixed date, whether this be on account of the nominal value of the share or in the form of a premium, as if such amount was payable pursuant to a call duly made and notified.
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12.8.
|
The Company shall have a first and paramount lien over all the shares which have not been fully paid up and which are registered in the name of any shareholder (whether individually or
jointly with others) and also over the proceeds of the sale thereof, as security for the debts and obligations of such shareholder to the Company and his contractual engagements with it, either individually or together with others. This right
of lien shall apply whether or not the due date for payment of such debts or the fulfillment or performance of such obligations has arrived, and no rights in equity shall be created in respect of any share over which there is a lien as
aforesaid. The aforesaid lien shall apply to all dividends or benefits which may be declared, from time to time, on such shares, unless the Board shall decide otherwise.
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12.9.
|
In order to foreclose on such lien, the Board may sell the shares under lien at such time and in such manner as it shall deem fit, but no share may be sold unless the period referred to below
has elapsed and written notice has been given to the shareholder, his trustee, liquidator, receiver, the executors of his estate, or anyone who acquires a right to shares in consequence of the bankruptcy of a shareholder, as the case may be,
stating that the Company intends to sell the shares, if he or they should fail to pay the aforesaid debts, or fail to discharge or fulfill the aforesaid obligations within fourteen (14) Business Days from the date of the delivery of the
notice.
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12.10.
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The net proceeds of any such sale of shares, as contemplated by Article 12.9 above, after deduction of the expenses of the sale, shall serve for the discharge of the debts of such
shareholder or for performance of such shareholder’s obligations (including debts, undertakings and contractual engagements the due date for the payment or performance of which has arrived) and the surplus, if any, shall be paid to the
shareholder, his trustee, liquidator, receiver, guardians, the executors of his estate, or to his successors-in-title.
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12.11.
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In every case of a sale following forfeiture or waiver, or for purposes of executing a lien by exercising all of the powers conferred above, the Board shall be entitled to appoint a person to
sign an instrument of transfer of the shares sold, and to arrange for the registration of the name of the buyer in the Register in respect of the shares sold.
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12.12.
|
An affidavit signed by the Chairman of the Board that a particular share of the Company was forfeited, waived or sold by the Company by virtue of a lien, shall serve as conclusive evidence of
the facts contained therein as against any person claiming a right in the share. The purchaser of a share who relies on such affidavit shall not be obliged to investigate whether the sale, re-allotment or transfer, or the amount of
consideration and the manner of application of the proceeds of the sale, were lawfully effected, and after his name has been registered in the Register he shall have a full right of title to the share and such right shall not be adversely
affected by a defect or invalidity which occurred in the forfeiture, waiver, sale, re-allotment or transfer of the share.
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13.
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TRANSFER AND TRANSMISSION OF SHARES
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13.1.
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No transfer of shares shall be registered unless a proper instrument of transfer is delivered to the Company or, in the case of shares registered with a transfer agent, delivered to such
transfer agent or to such other place specified for this purpose by the Board. Subject to the provisions of these Articles, an instrument of transfer of a share in the Company shall be signed by the transferor and the transferee. The Board
may approve other methods of recognizing the transfer of shares in order to facilitate the trading of the Company’s shares on the Nasdaq Stock Market or on any other stock exchange. The transferor shall be deemed to remain the holder of the
share up until the time the name of the transferee is registered in the Register in respect of the transferred share.
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13.2.
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Insofar as the circumstances permit, the instrument of transfer of a share shall be substantially in the form set out below, or in any other form that the Board may approve.
I _______________, I.D. _______________ of _______________ (the “Transferor”), in consideration for an amount of _______________ (in words) paid to
me by _______________ I.D. _______________ of _______________ (hereinafter: the “Transferee”), hereby transfer to the Transferee _______________ ______________ shares of nominal value NIS
_______________ each, marked with the numbers _______________ to _______________ (inclusive) of Entera Bio Ltd., to be held by the Transferee, the acquirers of his rights and his successors-in title, under all the same conditions under
which I held same prior to the signing of this instrument, and I, the Transferee, hereby agree to accept the aforementioned shares in accordance with the above mentioned conditions.
In witness whereof we have hereunto signed this _____ day of _______ 20__.
Transferor _______________ Transferee _______________
Witnesses to Signature _______________
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13.3.
|
The Company may close the transfer registers and the Register for such period of time as the Board shall deem fit.
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13.4.
|
Every instrument of transfer shall be submitted to the Office or to such other place as the Board shall prescribe, for purposes of registration, together with the share certificates to be
transferred, or if no such certificate was issued, together with a letter of allotment of the shares to be transferred, and such other proof as the Board may demand in regard to the transferor’s right of title or his right to transfer the
shares. The Board shall have the right to refuse to recognize a transfer of shares until the appropriate securities under the circumstances have been provided, as shall be determined by the Board in a specific case or from time to time in
general. Instruments of transfer which serve as the basis for transfers that are registered shall remain with the Company.
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13.5.
|
Every instrument of transfer shall relate to one class of shares only, unless the Board shall otherwise agree.
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13.6.
|
The executors of the will or administrator of a deceased shareholder’s estate (such shareholder not being one of a joint owners of a share) or, in the absence of an administrator of the
estate or executor of the will, the persons specified in Article 13.7 below, shall be entitled to demand that the Company recognize them as owners of rights in the share. The provisions of Article 13.4 above shall apply,
mutatis mutandis, also in regard to this Article.
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13.7.
|
In the case of the death of one of the holders of a share registered in the names of two or more persons, the Company shall recognize only the surviving owners as persons having rights in the
share. However, the aforementioned shall not be construed as releasing the estate of a deceased joint shareholder from any and all undertakings in respect of the shares. Any person who shall become an owner of shares following the death of a
shareholder shall be entitled to be registered as owner of such shares after having presented to an officer of the Company to be designated by the Chief Executive Officer an inheritance order or probation order or order of appointment of an
administrator of estate and any other proof as required - if these are sufficient in the opinion of such officer - testifying to such person’s right to appear as a shareholder in accordance with these Articles, and which shall testify to his
title to such shares. The provisions of Article 13.4 above shall apply, mutatis mutandis, also in regard to this Article.
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13.8.
|
The receiver or liquidator of a shareholder who is a company or the trustee in bankruptcy or the official receiver of a shareholder who is bankrupt, upon presenting appropriate proof to the
satisfaction of an officer of the Company to be designated by the Chief Executive Officer that such shareholder has the right to appear in this capacity and which testifies to such shareholder’s title, may, with the consent of the Board (the
Board shall not be obligated to give such consent) be registered as the owner of such shares. Furthermore, such shareholder may assign such shares in accordance with the rules prescribed in these Articles. The provisions of Article 13.4
above shall apply, mutatis mutandis, also in regard to this Article.
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13.9.
|
A person entitled to be registered as a shareholder following a transfer pursuant to these Articles shall be entitled, if approved by the Board and to the extent and under the conditions
prescribed by the Board, to dividends and any other monies paid in respect of the shares, and shall be entitled to give the Company confirmation of the payments; however, he shall not be entitled to
be present or to vote at any General Meeting of the Company or, subject to the provisions of these Articles, to make use of any rights of shareholders, until he has been registered as owner of such shares in the Register.
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14.
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GENERAL MEETING
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14.1.
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A General Meeting shall be held at least once every year, not later than fifteen (15) months after the last General Meeting, at such time and at such place as the Board shall determine. Such
General Meeting shall be called an annual meeting, and all other meetings of the shareholders shall be called extraordinary meetings.
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14.2.
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The Board may call an extraordinary meeting whenever it sees fit to do so.
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14.3.
|
The Board shall be obliged to call an extraordinary meeting upon a requisition in writing in accordance with the Companies Law.
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14.4.
|
The Company shall provide prior notice in regard to the holding of an annual meeting or an extraordinary meeting in accordance with the requirements of these Articles and the Companies Law.
Subject to the provisions of the Companies Law, in counting the number of days of prior notice given, the day of publication of notice shall not be counted, but the day of the meeting shall be counted. The notice shall specify those items and
contain such information as shall be required by the Companies Law and any other applicable law and regulations.
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14.5.
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Any shareholder holding at least 1% (one percent) of the outstanding voting rights in the Company requesting to add an item to the agenda of a General Meeting (a “Proposing Shareholder”) may submit such a request in accordance with the Companies Law (a “Proposal Request”). Subject to any requirements under the Companies Law, to be considered
timely and thereby be added to such agenda, a Proposal Request must be delivered, either in person or by certified mail, postage prepaid, and received at the Office, (i) in the case of a General Meeting that is an annual meeting, no less than
sixty (60) days nor more than one-hundred twenty (120) days prior to the date of the first anniversary of the preceding year’s annual meeting, provided, however, that, in the event that the date of
the annual meeting is advanced more than thirty (30) days prior to or delayed by more than thirty (30) days after the anniversary of the preceding year’s annual meeting, notice by the Proposing Shareholder, in order to be timely, must be
received no earlier than the close of business one-hundred twenty (120) days prior to such annual meeting and no later than the close of business on the later of ninety (90) days prior to such annual meeting or the tenth (10th) day
following the day on which public announcement of the date of such meeting is first made, and (ii) in the case of a General Meeting that is an extraordinary meeting, no earlier than one-hundred twenty (120) days prior to such extraordinary
meeting and no later than the close of business on the later of sixty (60) days prior to such extraordinary meeting or the tenth (10th) day following the day on which public announcement of the date of such meeting is first made,
subject to applicable law.
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14.6.
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Such request to add an item to the agenda of the General Meeting shall also set forth: (i) the name and address of the Proposing Shareholder making the request; (ii) a representation that the
Proposing Shareholder is a beneficial holder of shares of the Company entitled to vote at such meeting and intends to appear in person or by proxy at the meeting; (iii) a description of all arrangements or understandings between the Proposing
Shareholder and any other person or persons (naming such person or persons) in connection with the subject which is requested to be included in the agenda; (iv) a description of all Derivative Transactions (as defined below) by the Proposing
Shareholder during the previous twelve (12) month period, including the date of the transactions and the class, series and number of securities involved in, and the material economic terms of, such Derivative Transactions; and (v) a
declaration that all the information that is required under the Companies Law and any other applicable law to be provided to the Company in connection with such subject, if any, has been provided. Furthermore, the Board, may, in its
discretion, to the extent it deems necessary, request that the Proposing Shareholder(s) provide additional information necessary so as to include a subject in the agenda of a General Meeting, as the Board may reasonably require. The
information required pursuant to this Article 14.6 shall be updated as of the record date of the General Meeting, five (5) Business Days before the General Meeting, and any adjournment or postponement thereof.
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14.7.
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A “Derivative Transaction” means any agreement, arrangement, interest or understanding entered into by, or on behalf or for the benefit of, any
Proposing Shareholder or any of its affiliates or associates, whether of record or beneficial: (a) the value of which is derived in whole or in part from the value of any class or series of shares or other securities of the Company, (b) which
otherwise provides any direct or indirect opportunity to gain or share in any gain derived from a change in the value of securities of the Company, (c) the effect or intent of which is to mitigate loss, manage risk or benefit of security
value or price changes, or (d) which provides the right to vote or increase or decrease the voting power of such Proposing Shareholder, or any of its affiliates or associates, with respect to any shares or other securities of the Company,
which agreement, arrangement, interest or understanding may include, without limitation, any option, warrant, debt position, note, bond, convertible security, swap, stock appreciation right, short position, profit interest, hedge, right to
dividends, voting agreement, performance-related fee or arrangement to borrow or lend shares (whether or not subject to payment, settlement, exercise or conversion in any such class or series), and any proportionate interest of such Proposing
Shareholder in the shares or other securities of the Company held by any general or limited partnership, or any limited liability company, of which such Proposing Shareholder is, directly or indirectly, a general partner or managing member.
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14.8.
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Subject to Article 15.9 below, in the event that the Company has established that an adjourned meeting shall be held on such date which is later than the date provided for in Section
78(b) of the Companies Law, such later date shall be included in the notice. The Company may add additional places for shareholders to review the full text of the proposed resolutions, including an internet site. The notice shall be provided
in the manner prescribed in Article 29 below. In no event shall the public announcement of an adjournment or postponement of a General Meeting commence a new time period (or extend any time period) for the giving of a shareholder’s notice as
described above.
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14.9.
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Subject to any requirements under the Companies Law, nominations of persons for election to the Board may be made at an extraordinary meeting only if directors are to be elected at such
meeting (a) by or at the direction of the Board, or (b) by any shareholder who is entitled to vote at the meeting and who complies with the notice procedures set forth in Article 14.6 above.
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15.
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PROCEEDINGS AT GENERAL MEETING
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15.1.
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No business shall be conducted at a General Meeting unless a quorum is present, and no resolution shall be passed unless a quorum is present at the time the resolution is voted on. Except in
cases where it is otherwise stipulated, a quorum shall be constituted when there are personally present, or represented by proxy, at least two (2) shareholders who hold, in the aggregate, at least 25% of the voting rights in the Company. A
proxy may be deemed to be two (2) or more shareholders pursuant to the number of shareholders he represents.
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15.2.
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If within half an hour from the time appointed for the meeting, a quorum is not present, without there being an obligation to notify the shareholders to that effect, the meeting shall be
adjourned to the same day in the following week, at the same hour and at the same place or to a later time and date if so specified in the notice of the meeting, unless such day shall fall on a statutory holiday (either in Israel or in the
United States), in which case the meeting will be adjourned to the first Business Day afterwards.
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15.3.
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If the original meeting was convened upon requisition under Section 63 of the Companies Law, one or more shareholders, present in person or by proxy and holding the number of shares required
for making such requisition, shall constitute a quorum at the adjourned meeting, but in any other case any two (2) shareholders present in person or by proxy shall constitute a quorum at the adjourned meeting.
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15.4.
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The Chairman of the Board, or any other person appointed for this purpose by the Board, shall preside at every General Meeting. If within fifteen (15) minutes from the time appointed for the
meeting, the designated chairman for the meeting shall not be present, the shareholders present at the meeting shall elect one of their number to serve as chairman of the meeting.
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15.5.
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Except as required under the Companies Law or these Articles, any resolution of the shareholders shall be adopted by a majority of the voting power present and voting on such resolution at
the applicable General Meeting, in person or by proxy. Each shareholder shall be entitled to the number of votes to which such shareholder is entitled on the basis of the number of ordinary shares held by such shareholder and shall vote all
of the ordinary shares or any part thereof at his sole discretion.
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15.6.
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Where a poll has been demanded, the chairman of the meeting shall be entitled - but not obliged - to accede to the demand. Where the chairman of the meeting has decided to hold a poll, such
poll shall be held in such manner, at such time and at such place as the chairman of the meeting directs, either immediately or after an interval or postponement, or in any other way, and the results of the vote shall be deemed to be the
resolution at the meeting for which the poll was demanded. A person demanding a poll may withdraw his demand prior to the poll being held.
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15.7.
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A demand for the holding of a poll shall not prevent the continued business of the meeting on all other questions apart of the question in respect of which a poll was demanded.
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15.8.
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The announcement by the chairman of the meeting that a resolution has been passed unanimously or by a particular majority, or has been rejected, and a note recorded to that effect in the
Company’s minute book, shall serve as prima facie proof of such fact, and there shall be no necessity for proving the number of votes or the proportion of votes given for or against the resolution, unless otherwise required under applicable
law and regulation.
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15.9.
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The chairman of a General Meeting at which a quorum is present may, with the consent of holders of a majority of the voting power represented in person and by proxy and voting on the question
of adjournment, adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned meeting except business which might lawfully have been transacted at the meeting as originally called. Subject
to these Articles, it shall not be necessary to give any notice of an adjournment unless the meeting is adjourned for more than twenty one (21) days, in which case notice thereof shall be given in the manner required for the meeting as
originally called. Where a General Meeting has been adjourned without changing its agenda, to a date which is not more than twenty one (21) days, notices shall be given for the new date, as early as possible, and by no later than seventy two
(72) hours before the General Meeting.
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16.
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VOTES OF SHAREHOLDERS
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16.1.
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The voting rights of every shareholder entitled to vote at a General Meeting shall be as set forth in Article 6.1 of these Articles.
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16.2.
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In the case of joint shareholders, the vote of the senior joint holder, given personally or by proxy, shall be accepted, to the exclusion of the vote of the remaining joint shareholders, and
for these purposes the senior of the joint shareholders shall be the person amongst the joint holders whose name appears first in the Register.
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16.3.
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A shareholder who is an Incapacitated Person may vote solely through his guardian or other person who fulfills the function of such guardian and who was appointed by a court, and any guardian
or other person as aforesaid shall be entitled to vote by way of a proxy, or in such manner as the court directs.
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16.4.
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Any corporation which is a shareholder of the Company shall be entitled, by way of resolution of its board of directors or another organ which manages said corporation, to appoint such person
which it deems fit, whether or not such person is a shareholder of the Company, to act as its representative at any General Meeting of the Company or at a meeting of a class of shares in the Company which such corporation is entitled to
attend and to vote thereat, and the appointed person as aforesaid shall be entitled, on behalf of the corporation whom he represents, to exercise all of the same powers and authorities which the corporation itself could have exercised had it
been a natural person holding shares of the Company.
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16.5.
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Every shareholder who is entitled to attend and vote at a General Meeting of the Company shall be entitled to appoint a proxy. A proxy can be appointed by more than one shareholder and vote
in different ways on behalf of each principal.
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16.6.
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The instrument appointing a proxy shall be in writing signed by the person making the appointment or by his authorized representative, and if the person making the appointment is a
corporation, the power of attorney shall be signed in the manner in which the corporation signs on documents which bind it, and a certificate of an attorney with regard to the authority of the signatories to bind the corporation shall be
attached thereto. The proxy need not be a shareholder of the Company.
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16.7.
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The instrument appointing a proxy, or a copy thereof certified by an attorney, shall be lodged at the Office, or at such other place as the Board shall specify, not less than forty-eight (48)
hours prior to the General Meeting at which the proxy intends to vote based on such instrument of proxy. Notwithstanding the above, the chairman of the meeting shall have the right to waive the time requirement provided above with respect to
all instruments of proxies and to accept any and all instruments of proxy until the beginning of a General Meeting. A document appointing a proxy shall be valid for every adjourned meeting of the General Meeting to which the document relates.
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16.8.
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Every instrument appointing a proxy, whether for a meeting specifically indicated, or otherwise, shall, as far as circumstances permit, be substantially in the following form, or in any other
form approved by the Board:
I ______________ of ______________ being a shareholder holding shares in Entera Bio Ltd., hereby appoint Mr. ______________ of ______________ or failing him, Mr. ______________ of
______________, or failing him, Mr. ______________ of ______________, to vote in my name, place and stead at the (annual/extraordinary) General Meeting of the Company to be held on the ____ of ______ 20__, and at any adjourned meeting
thereof.
In witness whereof I have hereto set my hand on the _____ day of _____.
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16.9.
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No shareholder shall be entitled to vote at a General Meeting unless he has paid all of the calls and all of the amounts due from him, for the time being, in respect of his shares.
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16.10.
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A vote given in accordance with the instructions contained in an instrument appointing a proxy shall be valid notwithstanding the death or bankruptcy of the appointer, or the revocation of
the proxy, or the transfer of the share in respect of which the vote was given as aforesaid, unless notice in writing of the death, revocation or transfer is received at the Office, or by the chairman of the meeting, prior to such vote.
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16.11.
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Subject to the Companies Law, an instrument appointing a proxy shall be deemed revoked (i) upon receipt by the Company or the chairman of the meeting, subsequent to receipt by the Company of
such instrument, of written notice signed by the person signing such instrument or by the shareholder appointing such proxy canceling the appointment thereunder (or the authority pursuant to which such instrument was signed) or of an
instrument appointing a different proxy, provided such notice of cancellation or instrument appointing a different proxy were so received at the place and within the time for delivery of the instrument revoked thereby as referred to in Article
16.7 above, or (ii) if the appointing shareholder is present in person at the meeting for which such instrument of proxy was delivered, upon receipt by the chairman of such meeting of written notice from such shareholder of the
revocation of such appointment, or if and when such shareholder votes at such meeting. A vote cast in accordance with an instrument appointing a proxy shall be valid notwithstanding the revocation or purported cancellation of the appointment,
or the presence in person or vote of the appointing shareholder at a meeting for which it was rendered, unless such instrument of appointment was deemed revoked in accordance with the foregoing provisions of this Article 16.11 at or
prior to the time such vote was cast.
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17.
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THE BOARD OF DIRECTORS
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17.1.
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Unless otherwise resolved by a resolution of the General Meeting, the prescribed number of directors of the Company shall be between three (3) and ten (10) (including the External Directors), as may be fixed from
time to time by the Board. Any director shall be eligible for re-election upon termination of his term of office, subject to applicable law.
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17.2
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The directors of the Company (other than any External Directors elected pursuant to the Companies Law) shall be divided into three classes, designated class I, class II and class III. Each
class of directors shall consist, as nearly as possible as determined by the Board, of one-third of the total number of directors constituting the entire Board (excluding the External Directors). The first term of office of the class I
directors shall expire at the annual General Meeting occurring in 2018; the first term of office of the class II directors shall expire at the annual General Meeting in 2019; and the first term of office of the class III directors shall
expire at the annual General Meeting in 2020. Any director whose term has expired may be reelected to the Board except as provided by applicable law.
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17.3
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At each annual General Meeting, election or re-election of directors following the expiration of the term of office of the directors of a certain class, will be for a term of office that
expires on the third annual General Meeting following such election or reelection, such that from 2018 and forward, each year the term of office of only one class of directors will expire (i.e., the term of office of Class I will initially
expire at the annual General Meeting held in 2018 and thereafter at the annual General Meeting in 2021, 2024 etc.). A director shall hold office until the annual General Meeting for the year in which the term of the class to which he belongs
expires.
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17.4
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Upon a change in the number of directors (other than as a result of a vacancy), in accordance with the provisions hereof, any increase or decrease shall be apportioned by the Board at their
discretion among the classes so as to maintain the number of directors in each class as nearly equal as possible.
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17.5
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Any director shall assume his or her position as director on the date of his or her election to the Board, unless a later date has been designated in the resolution appointing such director.
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17.6
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The Board shall have power at any time and from time to time to appoint any person to be a director, either to fill an occasional vacancy or as an addition to the existing Board, so long as
the total number of directors shall not at any time exceed the maximum number prescribed by the Articles and shall place any such new director in a class so that each class is as nearly equal as possible. Such Board-appointed director (or
directors) shall hold office until replaced in the manner set out in Articles 17.2 and 17.3 above. This Article 17.6 shall not apply to a vacated office of an External Director, which may be filled only in accordance with Article
17.11 below, unless there are two (2) or more External Directors in office at that time in addition to the vacated office.
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17.7.
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Prior to every annual General Meeting of the Company, the Board (or a committee of the Board) may select, via a resolution adopted by a majority of the Board (or such committee), a number of persons to be
proposed to the shareholders for election as directors at such annual General Meeting (the “Nominees”). Any shareholder entitled under applicable law to propose one or more persons as nominees for
election as directors at a General Meeting (each such nominee, an “Alternate Nominee”) may make such proposal only if a written notice of such shareholder’s intent to that effect has been given to the
Secretary of the Company (or, if there is no such Secretary, the Chief Executive Officer) within the periods set out in Article 14.5 above. Each such notice shall set forth: (a) the name and address of the shareholder who intends to make
the nomination and of the Alternate Nominees; (b) a representation that the shareholder is a beneficial holder of shares of the Company entitled to vote at such meeting (including the number of shares held beneficially by the shareholder)
and intends to appear in person or by proxy at the meeting to nominate the Alternate Nominees; (c) a description of all arrangements or understandings between the shareholder and each Alternate Nominee and any other person or persons
(naming such person or persons) pursuant to which the nomination or nominations are to be made by the shareholder; (d) the consent of each Alternate Nominee to serve as a director of the Company if so elected and (e) a declaration signed by
each Alternate Nominee declaring that there is no limitation under the Companies Law for the appointment of such a nominee and that all of the information that is required under the Companies Law to be provided to the Company in connection
with such an appointment has been provided. The Nominees or Alternate Nominees shall be elected by a resolution at the annual General Meeting at which they are subject to election. The Board may refuse to acknowledge the nomination of any
person not made in compliance with the foregoing procedure.
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17.8.
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The directors in their capacity as such shall be entitled to receive remuneration as shall be determined in compliance with the Companies Law. The conditions (including remuneration) of the
terms of office of members of the Board shall be decided by the Board or any committee thereof, but the same shall be valid only if ratified in the manner required under the Companies Law, if required to be ratified. The remuneration of
directors may be fixed as an overall payment or other consideration or as a payment or other consideration in respect of attendance at meetings of the Board, or a combination of both. In addition to his remuneration, each director shall be
entitled to be reimbursed, retroactively or in advance, in respect of his reasonable expenses connected with performing his functions and services as a director. Such entitlement shall be determined in accordance with, and shall be subject
to, a specific resolution or policy adopted by the Board regarding such matter and in accordance with the requirements of applicable law.
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17.9.
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Subject to the provisions of the Companies Law with regard to External Directors and subject to Article 17.2 and 17.3 above, the office of a member of the Board shall be vacated in any one of
the following events:
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17.9.1.
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if he resigns his office by way of a letter signed by him, lodged at the Office;
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17.9.2.
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if he is declared bankrupt;
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17.9.3.
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if he becomes insane or unsound of mind;
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17.9.4.
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upon his death;
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17.9.5.
|
if he is prevented by applicable law from serving as a director of the Company;
|
||
17.9.6.
|
if the Board terminates his office according to Section 231 of the Companies Law;
|
||
17.9.7.
|
if a court order is given in accordance with Section 233 of the Companies Law;
|
||
17.9.8.
|
if he is removed from office by a resolution at a General Meeting of the Company adopted by a majority of the voting power in the Company; or
|
||
17.9.9.
|
if his period of office has terminated in accordance with the provisions of these Articles.
|
||
17.10.
|
If the office of a member of the Board should be vacated, the remaining members of the Board shall be entitled to continue to act for all purposes for as long as their number does not fall
below the minimum, as prescribed in Article 17.1 above, without limiting their right to fill the vacancy at any time in accordance with Article 17.6 above. Should their number fall below the aforesaid minimum, the directors
shall not be entitled to act, except for the appointment of additional directors, or for the purpose of calling a General Meeting for the appointment of additional directors, or for the purpose of calling a General Meeting for the
appointment of a new Board.
|
||
17.11.
|
The office of an External Director shall be vacated and an External Director may be removed and replaced only in accordance with the provisions for vacation of office, removal and appointment
of External Directors under the Companies Law.
|
||
17.12
|
Subject to the provisions of the Companies Law, any director may, by written notice to the Company, appoint another person to serve as his or her alternate director subject to the approval of
a majority of the members of the Board excluding such director (in these Articles, an “Alternate Director”), dismiss such Alternate Director and appoint, in the same manner as provided in this Article
17.12, another Alternate Director in his or her place (or in place of any Alternate Director whose office has been vacated for any reason whatsoever), whether for a certain meeting or a certain period of time or generally. Any notice
given to the Company pursuant to this Article shall be in writing, delivered to the Company and signed by the appointing or dismissing director, and shall become effective on the date fixed therein, or upon the delivery thereof to the
Company, whichever is later. Anyone who is not qualified to be appointed as a director and/or anyone serving as a director or as an existing Alternate Director may not be appointed and may not serve as an Alternate Director. Each of an
Alternate Director shall have all of the authority of the director who appointed him (except that an Alternate Director may not appoint an alternate for himself, unless the instrument appointing him otherwise expressly provides), provided,
however, that an Alternate Director shall have no standing at any meeting of the Board or any committee thereof while the director who appointed him is present. The office of an Alternate Director shall be vacated: (i) under the
circumstances, mutatis mutandis, set forth in this Article 17, and such office shall ipso facto be vacated if the director who appointed such
Alternate Director ceases to be a director, (ii) at any time, by the Board, and (iii) at any time, by the appointing director.
|
18.
|
OTHER PROVISIONS REGARDING DIRECTORS
|
18.1.
|
Subject to any mandatory provisions of applicable law, a director shall not be disqualified by virtue of his office from holding another office in the Company or in any other company in which
the Company is a shareholder or in which it has any other form of interest, or of entering into a contract with the Company, either as seller or buyer or otherwise. Likewise, no contract made by the Company or on its behalf in which a
director has any form of interest may be nullified and a director shall not be obliged to account to the Company for any profit deriving from such office, or resulting from such contract, merely by virtue of the fact that he serves as a
director or by reason of the fiduciary relationship thereby created, but such director shall be obliged to disclose to the Board the nature of any such interest at the first opportunity.
|
|
18.2.
|
A general notice to the effect that a director is a shareholder or has any other form of interest in a particular firm or a particular company and that he must be deemed to have an interest
in any business with such firm or company shall be deemed to be adequate disclosure for purposes of this Article in relation to such director, and after such general notice has been given, such director shall not be obliged to give special
notice in relation to any particular business with such firm or such company.
|
|
18.3.
|
Subject to the provisions of the Companies Law and these Articles, the Company shall be entitled to enter into a transaction in which an Office Holder of the Company has a personal interest,
directly or indirectly, and may enter into any contract or otherwise transact any business with any third party in which contract or business an Office Holder has a personal interest, directly or indirectly.
|
18.4.
|
The Board shall elect one (1) or more of its members to serve as chairman (the “Chairman of the Board”), provided
that, subject to the provisions of Section 121(c) of the Companies Law, the Chief Executive Officer of the Company shall not serve as Chairman of the Board. The office of Chairman of the Board shall be vacated in each of the cases mentioned
in Article 17.9 above or by a decision of the Board. The Board may also elect one or more members to serve as Vice Chairman, who shall have such duties and authorities as the Board may assign to him, subject to applicable law.
|
|
18.5.
|
A director shall not be obliged to hold any shares in the Company.
|
19.
|
PROCEEDINGS OF THE BOARD OF DIRECTORS
|
19.1.
|
The Board shall convene for a meeting at least once every calendar quarter.
|
|
19.2.
|
The Board may meet in order to exercise its powers pursuant to Section 92 of the Companies Law, including without limitation to supervise the Company’s affairs, and it may, subject to the
provisions of the Companies Law, adjourn its meetings and regulate its proceedings and operations as it deems fit. It may also prescribe the quorum required for the conduct of business. Until otherwise decided by the Board, a quorum shall be
constituted if a majority of the directors holding office for the time being are present.
|
|
19.3.
|
Should a director or directors be barred from being present and voting at a meeting of the Board pursuant to Section 278 of the Companies Law, the quorum shall be a majority of the directors
entitled to be present and to vote at the meeting of the Board.
|
|
19.4.
|
Any director, the Chief Executive Officer or the auditor of the Company in the event stipulated in Section 169 of the Companies Law, may, at any time, demand the convening of a meeting of the
Board. The Chairman of the Board shall be obliged, on such demand, to call such meeting on the date requested by the director, the Chief Executive Officer or the auditor of the Company soliciting such a meeting, provided that proper notice
pursuant to Article 19.5 is given.
|
|
19.5.
|
Every director shall be entitled to receive notice of meetings of the Board, and such notice may be in writing or by facsimile, or electronic mail, sent to the last address (whether physical
or electronic) or facsimile number given by the director for purposes of receiving notices, provided that the notice shall be given at least a reasonable amount of time prior to the meeting and in no
event less than forty eight (48) hours prior notice, unless the urgency of the matter to be discussed at the meeting reasonably requires a shorter notice period.
|
19.6.
|
Every meeting of the Board at which a quorum is present shall have all the powers and authorities vested for the time being in the Board. Any matter discussed in a meeting and brought up for
decision by the Chairman of the Board shall be decided by a simple majority of the directors attending such meeting and voting on such matter. In the case of an equality of votes of the Board, the Chairman of the Board shall not have a second
or casting vote, and the proposal shall be deemed to be defeated.
|
|
19.7.
|
If the Chairman of the Board is not present within thirty (30) minutes after the time appointed for the meeting, the directors present shall elect one of their members to preside at such
meeting.
|
|
19.8.
|
The Board may adopt resolutions, without actually convening a meeting of the Board, provided that all the directors entitled to participate in the meeting and to vote on the subject brought
for decision agree thereto. If resolutions are made as stated in this Article 19.8, the Chairman of the Board shall record minutes of the decisions stating the manner of voting of each director on the subjects brought for decision, as
well as the fact that all the directors agreed to take the decision without actually convening.
|
19.9.
|
The Board may hold meetings by use of any means of communication, on condition that all participating directors can hear each other at the same time. In the case of a resolution passed by way
of a telephone call or any such other means of communication, a copy of the text of the resolution shall be sent, as soon as possible thereafter, to the directors.
|
20.
|
GENERAL POWERS OF THE BOARD OF DIRECTORS
|
20.1.
|
The supervision of the Company’s affairs shall be in the hands of the Board, which shall be entitled to exercise all of the powers and authorities and to perform any act and deed which the
Company is entitled to exercise and to perform in accordance with these Articles, and in respect of which there is no mandatory provision or requirement in the Companies Law or in the U.S. Rules that such powers and authorities be exercised
or performed by the shareholders in a General Meeting or by a committee.
|
|
20.2.
|
The Board may, from time to time, in its absolute discretion, borrow or secure any amounts of money required by the Company for the conduct of its business. The Board shall be entitled to
raise or secure the repayment of an amount obtained by it, in such way and on such conditions and times as it deems fit.
|
20.3.
|
The Board shall be entitled to issue documents of undertaking, such as options, debentures or debenture stock, whether linked or redeemable, convertible debentures or debentures convertible
into other securities, or debentures which carry a right to purchase shares or to purchase other securities, or any mortgage, pledge, collateral or other charge over the property of the Company and its undertaking, in whole or in part,
whether present or future, including the uncalled share capital or the share capital which has been called but not yet paid. The deeds of undertaking, debentures of various types or other forms of collateral security may be issued at a
discount, at a premium or otherwise and with such preferential or deferred or other rights, as the Board shall, from time to time, decide.
|
21.
|
BOARD COMMITTEES
|
21.1.
|
The Board may, as it deems fit and subject to any applicable law, delegate to a committee certain of its powers and authorities, in whole or in part, as appropriate. The curtailment or
revocation of the powers and authorities of a committee by the Board shall not invalidate a prior act of such committee or an act taken in accordance with its instructions, which would have been valid had the powers and authorities of the
committee not been altered or revoked by the Board. Subject to applicable law, a committee may be comprised of one or more directors, and it may comprise persons who are not directors if it is appointed solely for the purpose of advising the
Board and is not delegated any of Board’s powers or authorities.
|
21.2.
|
The meetings and proceedings of every such committee which is comprised of two (2) or more members shall be conducted in accordance with the provisions contained in these Articles in regard
to the conduct of meetings and proceedings of the Board to the extent that the same are suitable for such committee, and so long as no provisions have been adopted in replacement thereof by the Board.
|
22.
|
RATIFICATION OF ACTIONS
|
22.1.
|
Subject to the Companies Law, all acts taken in good faith by the Board or a committee or by an individual acting as a member thereof shall be valid even if it is subsequently discovered that
there was a defect in the appointment of the Board, the committee or the member, as the case may be, or that the members, or one of them, was or were disqualified from being appointed as a director(s) or to a committee.
|
|
22.2.
|
The Board or any committee may ratify any act the performance of which at the time of the ratification was within the scope of the authority of the Board or the relevant committee. The
General Meeting shall be entitled to ratify any act taken by the Board or any committee without authority or which was tainted by some other defect. From the time of the ratification, every act ratified as aforesaid, shall be treated as
though lawfully performed from the outset.
|
23.
|
SIGNING POWERS
|
23.1.
|
Subject to any other resolution on the subject passed by the Board, the Company shall be bound only pursuant to a document in writing bearing its seal or its rubber stamp or its printed name,
and the signature of whomever may be authorized by the Board, which shall be entitled to empower any person, either alone or jointly with another, even if he is not a shareholder or a director, to sign and act in the name and on behalf of the
Company.
|
|
23.2.
|
The Board shall be entitled to prescribe separate signing power in regard to different businesses of the Company and in respect of the limit of the amounts in respect of which various persons
shall be authorized to sign.
|
24.
|
CHIEF EXECUTIVE OFFICER
|
24.1.
|
The Board shall, from time to time, appoint a Chief Executive Officer and subject to the provisions of the Companies Law delineate his powers and authorities and his remuneration. Subject to
any contract between the Chief Executive Officer and the Company, the Board may dismiss him or replace him at any time it deems fit.
|
|
24.2.
|
A Chief Executive Officer need not be a director or shareholder. Subject to the provisions of any contract between the Chief Executive Officer and the Company, if the Chief Executive Officer
is also a director, all of the same provisions with regard to appointment, resignation and removal from office shall apply to the Chief Executive Officer in his capacity as a director, as apply to the Company’s other directors.
|
|
24.3.
|
The Board shall be entitled from time to time to delegate to the Chief Executive Officer for the time being such of the powers it has pursuant to these Articles as it deems appropriate. The
Board shall be entitled to grant such powers for such period, for such purposes, on such conditions and with such restrictions as it deems appropriate, and it shall be entitled to grant such powers without renouncing the powers and
authorities of the Board in such regard. The Board may revoke, annul and alter such delegated powers and authorities, in whole or in part, at any time.
|
24.4.
|
Subject to the provisions of any applicable law, the remuneration of the Chief Executive Officer shall be fixed from time to time by the Board (and, so long as required by the Companies Law,
shall be approved by the Compensation Committee and by the shareholders unless exempted from shareholders’ approval) and such remuneration may be in the form of a fixed salary or commissions or a participation in profits, or combination
thereof, or in any other manner which may be decided by the Board and approved according to this Article 24.4.
|
25.
|
SECRETARY, OFFICE-HOLDERS, CLERKS AND REPRESENTATIVES
|
25.1.
|
The Board shall be entitled, from time to time, to appoint, or to delegate to the Chief Executive Officer, either alone or together with other persons designated by the Board, the ability to
appoint Office Holders (other than directors), a Secretary for the Company, employees and agents to such permanent, temporary or special positions, and to specify and change their titles, authorities and duties, and may set, or delegate to
the Chief Executive Officer, either alone or together with other persons designated by the Board, the ability to set salaries, bonuses and other compensation of any employee or agent who is not an Office Holder. Salaries, bonuses and
compensation of Office Holders who are not directors shall be determined and approved by the Chief Executive Officer, or in such other manner as may be required from time to time under the Companies Law. The Board, or the Chief Executive
Officer, either alone or together with other persons designated by the Board (in the case of any Office Holder, employee or agent appointed by the Board), shall be entitled at any time, in its, his or their (as applicable) sole and absolute
discretion, to terminate the services of one of more of the foregoing persons (in the case of a director, however, subject to compliance with Article 17.9 above), subject to any other requirements under applicable law.
|
|
25.2.
|
The Board and the Chief Executive Officer may from time to time and at any time, subject to their powers under these Articles and the Companies Law, empower any person to serve as
representative of the Company for such purposes and with such powers and authorities, instructions and discretions for such period and subject to such conditions as the Board or the Chief Executive Officer, as the case may be, shall deem
appropriate. The Board or Chief Executive Officer may grant such person, inter alia, the power to further delegate the authority, powers and discretions vested in him, in whole or in part. The Board
or the Chief Executive Officer, as the case may be, may revoke, annul, vary or change any such power or authority, or all such powers or authorities collectively.
|
26.
|
DIVIDENDS, BONUS SHARES, FUNDS AND CAPITALIZATION OF FUNDS AND PROFITS
|
26.1.
|
Unless otherwise permitted by the Companies Law, no dividends shall be paid other than out of the Company’s profits available for distribution as set forth in the Companies Law. The Board may
decide on the payment of a dividend or on the distribution of bonus shares. A dividend in cash or bonus shares shall be paid or distributed, as the case may be, equally to the holders of the ordinary shares registered in the Register, pro
rata to the nominal amount of capital paid up or credited as paid up on par value of the shares, without reference to any premium which may have been paid thereon. However, whenever the rights attached to any shares or the terms of issue of
the shares do not provide otherwise, an amount paid on account of a share prior to the payment thereof having been called, or prior to the due date for payment thereof, and on which the Company is paying interest, shall not be taken into
account for purposes of this Article as an amount paid-up on account of the share.
|
|
26.2.
|
Unless other instructions are given, it shall be permissible to pay any dividend by way of a check or payment order to be sent by post to the registered address of the shareholder or the
person entitled thereto, or in the case of joint shareholders being registered, to the shareholder whose name appears first in the Register in relation to the joint shareholding. Every such check shall be made in favor of the person to whom
it is sent. A receipt by the person whose name, on the date of declaration of the dividend, was registered in the Register as the owner of the shares, or in the case of joint holders, by one of the joint holders, shall serve as a discharge
with regard to all the payments made in connection with such share.
|
|
26.3.
|
The Board shall be entitled to invest any dividend which has not been claimed for a period of one (1) year after having been declared, or to make use thereof in any other way for the benefit
of the Company until such time as it is claimed. A dividend or other beneficial rights in respect of shares shall not bear interest, and the Company shall not be obliged to pay interest or linkage in respect of an unclaimed dividend. The
payment by the Board of any unclaimed dividend into a separate account shall not make the Company a trustee in respect thereof, and any dividend unclaimed after a period of seven (7) years from the date of declaration of such dividend shall
be forfeited and shall revert to the Company, provided, however, that the Board may, at its discretion, cause the Company to pay any such dividend, or any part thereof, to a person who would have been
entitled thereto had the same not reverted to the Company.
|
26.4.
|
Unless otherwise specified in the terms of issue of shares or securities convertible into, or which grant a right to purchase, shares, any shares that are fully paid-up or credited as paid-up
shall at any time confer on their holders the right to participate in the full dividends and in any other distribution for which the determining date for the right to receive the same is the date at which the aforesaid shares were fully
paid-up or credited as fully paid-up, as the case may be, or subsequent to such date.
|
|
26.5.
|
The Board shall be entitled to deduct from any dividend or other beneficial rights, all amounts of money which the holder of the share in respect of which the dividend is payable or in
respect of which the other beneficial rights were given, may owe to the Company in respect of such share, whether or not the due date for payment thereof has arrived. The Board shall be entitled to retain any dividend or bonus shares or other
beneficial rights in respect of a share in relation to which the Company has a lien, and to utilize any such amount or the proceeds received from the sale of any bonus shares or other beneficial rights, for the discharge of the debts or
liabilities in respect of which the Company has a lien.
|
|
26.6.
|
The Board may decide that a dividend is to be paid, in whole or in part, by way of a distribution of assets of the Company in kind, including by way of debentures of the Company, or shares or
debentures of any other company, or in any other way.
|
|
26.7.
|
The Board may decide that any portion of the amounts standing for the time being to the credit of any capital fund (including a fund created as a result of a revaluation of the assets of the
Company), or which are held by the Company as profits available for distribution, shall be capitalized subject to and in accordance with the provisions of the Companies Law and of these Articles, and serve for the payment up in full (either
at par or with a premium as prescribed by the Company) of shares which have not yet been issued or of debentures of the Company, which shall then be allotted and distributed amongst the shareholders as fully paid-up shares or debentures, pro
rata to each shareholder’s entitlement under these Articles.
|
26.8.
|
In every case that the Company issues bonus shares by way of a capitalization of profits or funds at a time at which securities issued by the Company are in circulation and confer on the
holders thereof rights to convert the same into shares in the share capital of the Company, or options to purchase shares in the share capital of the Company (such rights of conversion or options shall henceforth be referred to as the “Rights”), the Board shall be entitled (in a case that the Rights or part thereof shall not be otherwise adjusted in accordance with the terms of their issue) to transfer to a special fund designated for the
distribution of bonus shares in the future (to be called by any name that the Board may decide on and which shall henceforth be referred to as the “Special Fund”) an amount equivalent to the nominal
amount of the share capital to which some or all of the Rights holders would have been entitled as a result of the issue of bonus shares, had they exercised their Rights prior to the determining date for the right to receive bonus shares,
including rights to fractions of bonus shares, and in the case of a second or additional distribution of bonus shares in respect of which the Company acts pursuant to this Article, including entitlement stemming from a previous distribution
of bonus shares.
|
|
26.9.
|
In the case of the allotment of shares by the Company as a consequence of the exercise of entitlement by the owners of shares in those cases in which the Board has made a transfer to the
Special Fund in respect of the Rights pursuant to Article 26.8 above, the Board shall allot to each such shareholder, in addition to the shares to which he is entitled by virtue of having exercised his rights, such number of fully paid-up
shares the nominal value of which is equivalent to the amount transferred to the Special Fund in respect of his rights, by way of a capitalization to be effected by the Board of an appropriate amount out of the Special Fund. The Board shall
be entitled to decide on the manner of dealing with rights to fractions of shares in its sole discretion.
|
|
26.10.
|
If after any transfer to the Special Fund has been made the Rights should lapse, or the period should end for the exercise of Rights in respect of which the transfer was effected without such
Rights being exercised, then any amount which was transferred to the Special Fund in respect of the aforesaid unexercised Rights shall be released from the Special Fund, and the Company may deal with the amount so released in any manner it
would have been entitled to deal therewith had such amount not been transferred to the Special Fund.
|
26.11.
|
For the implementation of any resolution regarding a distribution of shares or debentures by way of a capitalization of profits as aforesaid, the Board may:
|
||
26.11.1.
|
Resolve any difficulty which arises or may arise in regard to the distribution in such manner as it deems fit and may take all of the steps that it deems appropriate in order to overcome such
difficulty.
|
||
26.11.2.
|
Issue certificates in respect of fractions of shares, or decide that fractions of less than an amount to be decided by the Board shall not be taken into account for purposes of adjusting the
rights of the shareholders or may sell the fractions of shares and pay the net proceeds to the persons entitled thereto.
|
||
26.11.3.
|
Sign, or appoint a person to sign, on behalf of the shareholders on any contract or other document which may be required for purposes of giving effect to the distribution, and, in particular,
shall be entitled to sign or appoint a person who shall be entitled to appoint and submit a contract as referred to in Section 291 of the Companies Law.
|
||
26.11.4.
|
Make any arrangement or other scheme which is required in the opinion of the Board in order to facilitate the distribution.
|
||
26.12.
|
The Board shall be entitled, as it deems appropriate and expedient, to appoint trustees or nominees for those registered shareholders who have failed to notify the Company of a change of
their address and who have not applied to the Company in order to receive dividends, shares or debentures out of capital, or other benefits during the aforesaid period. Such trustees or nominees shall be appointed for the use, collection or
receipt of dividends, shares or debentures out of capital and rights to subscribe for shares which have not yet been issued and which are offered to the shareholders but they shall not be entitled to transfer the shares in respect of which
they were appointed, or to vote on the basis of holding such shares. In all of the terms and conditions governing such trusts and the appointment of such nominees it shall be stipulated by the Company that upon the first demand by a
beneficial holder of a share being held by the trustee or nominee, such trustee or nominee shall be obliged to return to such shareholder the share in question and all of those rights held by it on the shareholder’s behalf (all as the case
may be). Any act or arrangement effected by any such nominees or trustee and any agreement between the Board and a nominee or trustee shall be valid and binding in all respects.
|
27.
|
COMPANY RECORDS AND REGISTERS
|
27.1.
|
The Board shall comply with all the provisions of the Companies Law in regard to the recording of charges and the keeping and maintaining of a register of directors, register of shareholders
and register of charges.
|
|
27.2.
|
Any book, register and record that the Company is obliged to keep in accordance with the Companies Law or pursuant to these Articles shall be recorded in a regular book, or by digital,
electronic or other means, as the Board shall decide.
|
|
27.3.
|
Subject to and in accordance with the provisions of Sections 138 and 139 of the Companies Law, the Company may cause supplementary registers to be kept in any place outside Israel as the
Board may deem fit, and, subject to all applicable requirements of the Companies Law, the Board may from time to time adopt such rules and procedures as it may deem fit in connection with the keeping of such supplementary registers.
|
28.
|
BOOKS OF ACCOUNT
|
28.1.
|
The Board shall keep proper books of account in accordance with the provisions of the Companies Law. The books of account shall be kept at the Office, or at such other place or places as the
Board shall deem appropriate, and shall at all times be open to the inspection of members of the Board. A shareholder of the Company who is not a member of the Board shall not have the right to inspect any books or accounts or documents of
the Company, unless such right has been expressly granted to him by the Companies Law, or if he has been permitted to do so by the Board or by the shareholders based on a resolution adopted at a General Meeting.
|
|
28.2.
|
At least once each year the accounts of the Company and the correctness of the statement of income and the balance sheet shall be audited and confirmed by an independent auditor.
|
|
28.3.
|
The Company shall, in an annual General Meeting, appoint an independent auditor who shall hold such position until the next annual General Meeting, and his appointment, remuneration and
rights and duties shall be subject to the provisions of the Companies Law, provided, however, that in exercising its authority to fix the remuneration of the auditor, the shareholders in an annual
General Meeting may, by a resolution, act (and in the absence of any action in connection therewith shall be deemed to have so acted) to authorize the Board to fix such remuneration subject to such criteria or standards, if any, as may be
provided in such resolution, and if no such criteria or standards are so provided, such remuneration shall be fixed in an amount commensurate with both the volume and nature of the services rendered by the auditor. By an act appointing such
auditor, the Company may appoint the auditor to serve for a period which is longer than the aforementioned period, but no longer than until the third Annual Meeting after the meeting at which the auditor has been appointed.
|
28.4.
|
The auditor shall be entitled to receive notices of every General Meeting of the Company and to attend such meetings and to express his opinions on all matters pertaining to his function as
the auditor of the Company.
|
|
28.5.
|
Subject to the provisions of the Companies Law and the U.S. Rules, any act carried out by the auditor of the Company shall be valid as against any person doing business in good faith with the
Company, notwithstanding any defect in the appointment or qualification of the auditor.
|
|
28.6.
|
For as long as the Company is a public company, as defined in the Companies Law, it shall appoint an internal auditor possessing the authorities set forth in the Companies Law. The internal
auditor of the Company shall present all of its proposed work plans to the audit committee of the Board, which shall have the authority to approve them, subject to any modifications in its discretion.
|
29.
|
NOTICES
|
29.1.
|
The Company may serve any written notice or other document on a shareholder by way of delivery by hand, by facsimile transmission or by dispatch by prepaid registered mail to his address as
recorded in the Register, or if there is no such recorded address, to the address given by him to the Company for the sending of notices to him. Notwithstanding the foregoing or any other provision to the contrary contained herein, notices or
any other information or documents required to be delivered to a shareholder shall be deemed to have been duly delivered if submitted, published, filed or lodged in any manner prescribed by applicable law. With respect to the manner of
providing such notices or other disclosures, the Company may distinguish between the shareholders listed on its regular Registry and those listed in any “additional registry”, as defined in Section 138(a) of the Companies Law, administered by
a transfer agent or stock exchange registration company.
|
29.2.
|
Any shareholder may serve any written notice or other document on the Company by way of delivery by hand at the Office, by facsimile or email transmission to the Company or by dispatch by
prepaid registered mail to the Company at the Office.
|
||
29.3.
|
Any notice or document which is delivered or sent to a shareholder in accordance with these Articles shall be deemed to have been duly delivered and sent in respect of the shares held by him
(whether in respect of shares held by him alone or jointly with others), notwithstanding the fact that such shareholder has died or been declared bankrupt at such time (whether or not the Company knew of his death or bankruptcy), and shall be
deemed to be sufficient delivery or dispatch to heirs, trustees, administrators or transferees and any other persons (if any) who have a right in the shares.
|
||
29.4.
|
Any such notice or other document shall be deemed to have been served:
|
||
29.4.1.
|
in the case of mailing, forty eight (48) hours after it has been posted, or when actually received by the addressee if sooner than 48 hours after it has been posted;
|
||
29.4.2.
|
in the case of overnight air courier, on the next day following the day sent, with receipt confirmed by the courier, or when actually received by the addressee if sooner;
|
||
29.4.3.
|
in the case of personal delivery, when actually tendered in person to such shareholder;
|
||
29.4.4.
|
in the case of facsimile or other electronic transmission (including email), the next day following the date on which the sender receives automatic electronic confirmation by the recipient’s
facsimile machine or computer or other device that such notice was received by the addressee; or
|
||
29.4.5.
|
in the case a notice is, in fact, received by the addressee, when received, notwithstanding that it was defectively addressed or failed, in some other respect, to comply with the provisions
of this Article 29.4.
|
||
29.5.
|
Any shareholder whose address is not described in the Register, and who shall not have designated in writing an address for the receipt of notices, shall not be entitled to receive any notice
from the Company. In the case of joint holders of a share, the Company shall be entitled to deliver a notice by dispatch to the joint holder whose name stands first in the Register in respect of such share.
|
29.6.
|
Whenever it is necessary to give notice of a particular number of days or a notice for another period, the day of delivery shall be counted in the number of calendar days or the period,
unless otherwise specified.
|
||
29.7.
|
Notwithstanding anything to the contrary contained herein, notice by the Company of a General Meeting, containing the information required to be set forth in such notice under these Articles,
which is published, within the time otherwise required for giving notice of such meeting, in:
|
||
29.7.1.
|
the Company’s website shall be deemed to be notice of such meeting duly given, for the purposes of these Articles, to any shareholder whose address as registered in the Register (or as
designated in writing for the receipt of notices and other documents) is located in the State of Israel; and
|
||
29.7.2.
|
one (1) notification by international wire service press release and furnishing of such release on Form 6-K to the U.S. Securities and Exchange Commission shall be deemed to be notice of such
meeting duly given, for the purposes of these Articles, to any shareholder whose address as registered in the Register (or as designated in writing for the receipt of notices and other documents) is located outside the State of Israel.
|
30.
|
INSURANCE, INDEMNITY AND EXCULPATION
|
30.1.
|
Subject to the provisions of the Companies Law, the Company shall be entitled to enter into a contract to insure all or part of the liability of an Office Holder of the Company, imposed on
him in consequence of an act which he has performed by virtue of being an Office Holder, in respect of any of the following:
|
||
30.1.1.
|
The breach of a duty of care to the Company or to any other person, other than with respect to a distribution and excluding a breach committed intentionally or recklessly (other than a breach
arising out negligent conduct);
|
||
30.1.2.
|
The breach of a fiduciary duty to the Company, provided that the Office Holder acted in good faith and had reasonable grounds for believing that the action would not adversely affect the best
interests of the Company;
|
||
30.1.3.
|
A pecuniary liability imposed on him in favor of any other person in respect of an act done in his capacity as an Office Holder.
|
||
30.1.4.
|
Any other circumstances arising under the law with respect to which the Company may, or will be able to, insure an Office Holder.
|
30.2.
|
Subject to the provisions of the Companies Law, the Company shall be entitled to indemnify an Office Holder of the Company, to the fullest extent permitted by applicable law. Subject to the
provisions of the Companies Law, including the receipt of all approvals as required therein or under any applicable law, the Company may resolve retroactively to indemnify an Office Holder with respect to the following liabilities or
expenses, provided, in each of the below cases, that such liabilities or expenses were imposed on such Office Holder in such Office Holder’s capacity as an Office Holder of the Company:
|
||
30.2.1.
|
a financial liability imposed on him in favor of another person in any judgment, including a judgment imposed on him in a settlement confirmed as judgment or an arbitrator’s decision that was
approved by a court of law, in respect of an act performed by the Office Holder by virtue of the Office Holder being an Office Holder of the Company; provided, however, that: (a) any indemnification
undertaking with respect to the foregoing shall be limited (i) to events which, in the opinion of the Board, are foreseeable in light of the Company’s actual operations at the time of the granting of the indemnification undertaking, and (ii)
to an amount or by criteria determined by the Board to be reasonable in the given circumstances; and (b) the events that in the opinion of the Board are foreseeable in light of the Company’s actual operations at the time of the granting of
the indemnification undertaking are listed in the indemnification undertaking together with the amount or criteria determined by the Board to be reasonable in the given circumstances;
|
||
30.2.2.
|
reasonable legal expenses, including attorney’s fees, expended by the Office Holder as a result of an investigation or proceeding instituted against such Office Holder by a competent
authority, and which investigation or proceeding: (i) concluded without the filing of an indictment (as defined in the Companies Law) against such Office Holder and without a financial liability having been imposed against such Office Holder
in lieu of a criminal proceeding (as defined in the Companies Law); (ii) concluded without the filing of an indictment against such Office Holder but with a financial liability having been imposed against such Office Holder in lieu of a
criminal proceeding but relates to a criminal offense that does not require proof of criminal intent; or (iii) involves financial sanction;
|
30.2.3.
|
reasonable legal expenses, including attorney’s fees, paid for by the Office Holder, or which the Office Holder was charged by a court of law, in a proceeding brought against the Office
Holder by the Company, or by another person on its behalf, or by a third party, or in a criminal prosecution in which the Office Holder was acquitted, or in which he was convicted of an offense that does not require proof of criminal intent;
and
|
||
30.2.4.
|
any other event, occurrence or circumstances in respect of which the Company may lawfully indemnify an Office Holder of the Company, including, without limitation: (i) a payment imposed on an
Office Holder in favor of an injured party as set forth in Section 52(54)(a)(1)(a) of the Israeli Securities Law; and (ii) reasonable litigation expenses, including attorney fees, incurred by the director or officer in connection with a
proceeding under Chapters H’3, H’4 or I’1 of the Israeli Securities Law, or under Article D of the Fourth Chapter, Ninth Part of the Companies Law, if applicable, including reasonable legal expenses, which term includes attorney fees.
|
||
30.3.
|
The Company may undertake to indemnify an Office Holder as aforesaid: (i) prospectively, provided that the undertaking is limited to categories of events which in the opinion of the Board can
be foreseen when the undertaking to indemnify is given, and to an amount set by the Board as reasonable under the circumstances, and (ii) retroactively.
|
||
30.4.
|
Subject to the provisions of the Companies Law including the receipt of all approvals as required therein or under any applicable law, the Company may, to the maximum extent permitted by the
Companies Law, exempt and release, in advance, any Office Holder from any liability for damages arising out of a breach of a duty of care towards the Company, except in connection with distributions.
|
||
30.5.
|
Any amendment to the Companies Law adversely affecting the right of any Office Holder to be indemnified or insured pursuant to Articles 30.1, 30.2 and 30.4 and any amendments to such
Articles shall be prospective in effect, and shall not affect the Company’s obligation or ability to indemnify or insure an Office Holder for any act or omission occurring prior to such amendment, unless otherwise provided by applicable law.
|
30.6.
|
The provisions of Articles 30.1, 30.2 and 30.4 are not intended, and shall not be interpreted so as to restrict the Company, in any manner, in respect of the procurement of insurance
or in respect of indemnification or exculpation, in favor of any person who is not an Office Holder, including, without limitation, any employee, agent, consultant or contractor of the Company who is not an Office Holder; or any Office Holder
to the extent that such insurance and/or indemnification is not specifically prohibited under law.
|
31.
|
WINDING-UP AND REORGANIZATION
|
31.1.
|
Should the Company be wound up and assets of the Company will remain available for distribution after covering all the Company’s outstanding liabilities, such assets shall be distributed
among the shareholders pro rata to the nominal value of the paid-up capital on the shares held by each of them.
|
|
31.2.
|
Upon the sale of the Company’s assets, the Board may, or in the case of a liquidation, the liquidators may, if authorized to do so by a resolution of the Company, accept fully or partly
paid-up shares, or securities of another company, Israeli or non-Israeli, whether in existence at such time or about to be formed, in order to purchase the property of the Company, or part thereof, and to the extent permitted under the
Companies Law, the Board may (or in the case of a liquidation, the liquidators may) distribute the aforesaid shares or securities or any other property of the Company among the shareholders without realizing the same, or may deposit the same
in the hands of trustees for the shareholders, and the General Meeting by a resolution may decide, subject to the provisions of the Companies Law, on the distribution or allotment of cash, shares or other securities, or the property of the
Company and on the valuation of the aforesaid securities or property at such price and in such manner as the shareholders at such General Meeting shall decide, and all of the shareholders shall be obliged to accept any valuation or
distribution determined as aforesaid and to waive their rights in this regard, except, in a case in which the Company is about to be wound-up and is in the process of liquidation, for those legal rights (if any) which, according to the
provisions of the Companies Law, may not be changed or modified.
|
32.
|
TRANSLATION AND BINDING EFFECT
These Articles may be translated into Hebrew and/or into other languages. Notwithstanding the aforesaid, the English version of these Articles shall be binding upon the Company, its
shareholders and/or any third party and shall supersede any translation thereof.
|
a.
|
funds deposited in escrow as described in Section 2(b) below and equal at least the Minimum Offering, and corresponding documentation with respect to such amounts has been delivered by the
Subscriber and other “Subscribers” under Subscription Agreements of like tenor with this Agreement (collectively, the “Subscribers”) as described in Section 2(a) below; and
|
b.
|
the other conditions set forth in Sections 7 and 8 below shall have been satisfied.
|
a.
|
Subscription Documents. On or before the applicable Closing Date, Subscriber shall review, complete and execute the Omnibus Signature Page to this Agreement, the Investor Profile,
Anti-Money Laundering Form and Accredited Investor Certification, each attached hereto following the Omnibus Signature Page (collectively, the “Subscription Documents”), and deliver the
Subscription Documents to the Company at the address set forth under the caption “How to subscribe for Securities in the private offering of Entera Bio Ltd.” below. Executed documents may be
delivered by the PA Subscriber to the Placement Agent that introduced them to the Offering by facsimile or electronic mail (e-mail), if the Subscriber delivers the original copies of the documents to such Placement Agent as soon thereafter
as is practicable and such Placement Agent shall, in turn, deliver the documents to the Company.
|
b.
|
Purchase Price. Simultaneously with the delivery of the Subscription Documents to the Company as provided herein, and in any event on or prior to the applicable Closing Date, the Subscriber
shall deliver to Delaware Trust Company, in its capacity as escrow agent (the “Escrow Agent”), under an escrow agreement among the Company, the Placement Agents (as defined below), the Subscribers and
the Escrow Agent (the “Escrow Agreement”), the full Purchase Price by certified or other bank check or by wire transfer of immediately available funds, pursuant to the instructions set forth under the
caption “How to subscribe for Securities in the private offering of Entera Bio Ltd..” below. Such funds will be held for the Subscriber’s benefit and will be returned promptly, without interest or
offset, if this Subscription Agreement is not accepted by the Company or the Offering is terminated pursuant to its terms by the Company prior to the Closing on such subscription; provided however that with respect to a Closing subsequent to
the Initial Closing involving only Non-PA Subscribers, such Non-PA Subscribers shall be entitled to transfer their applicable portion of the Purchase Price directly to the Company’s bank account.
|
c.
|
Company Discretion. The Subscriber understands and agrees that the Company in its sole discretion reserves the right to accept or reject this or any other subscription for
Securities, in whole or in part, notwithstanding prior receipt by the Subscriber of notice of acceptance of this subscription. The Company shall have no obligation hereunder until the Company shall execute and deliver to the Subscriber an
executed copy of this Agreement. Upon each Closing, the Company shall provide a written notice of the final amount actually accepted by the Company from the Subscribers in such Closing. If this subscription is rejected in whole, or the
Offering is terminated, all funds received from the Subscriber will be returned without interest or offset, and this Agreement shall thereafter be of no further force or effect. If this subscription is rejected in part, the funds for the
rejected portion of this subscription will be returned without interest or offset, and this Agreement will continue in full force and effect to the extent this subscription was accepted.
|
a.
|
Organization and Qualification. The Company is a corporation duly organized and validly existing under the laws of the State of Israel, has all requisite corporate power and authority
to carry on its business as presently conducted and as proposed to be conducted, and is qualified and in good standing as a foreign corporation in each jurisdiction in which the nature of the business conducted by the Company or the property
owned or leased by the Company requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect (as defined below). The Company has no subsidiaries other
than Entera Bio Inc., a Delaware corporation.
|
b.
|
Authorization, Enforcement, Compliance with Other Instruments. (i) The Company has the requisite corporate power and authority to enter into and perform its obligations under this
Agreement, the Registration Rights Agreement, the Warrants, the Escrow Agreement and each of the other agreements and documents that are exhibits hereto or thereto or are contemplated hereby or thereby or necessary or desirable to effect the
transactions contemplated hereby or thereby (the “Transaction Documents”) and to issue the Securities, the Ordinary Shares issuable upon exercise of the Warrants (the “Warrant Shares”), and the securities issuable to the Placement Agent in accordance with the terms hereof and thereof, (ii) the execution and delivery by the Company of each of the Transaction Documents and the
consummation by it of the transactions contemplated hereby and thereby, including, without limitation, the issuance of the Securities, the Warrant Shares and the securities issuable to the Placement Agent, have been, or will be at the time of
execution of such Transaction Document, duly authorized by the Company’s board of directors (the “Board”), and no further consent or authorization is, or will be at the time of execution of such
Transaction Document, required by the Company, its Board of Directors or its shareholders, provided however that with respect to any subscription and/or Closing to made under this Agreement by a Subscriber which is qualified as a controlling
shareholder or controlling shareholders of the Company (in accordance with the terms of the Israeli Companies Law 5759-1999 and the applicable rules and regulations thereunder (the “Companies Law”))
with an interest respect to the transactions contemplated by this Agreement, will also have to be approved by the audit committee of the Company and the Company’s shareholders in accordance with the Companies Law, (iii) each of the
Transaction Documents will be duly executed and delivered by the Company, (iv) the Transaction Documents when executed and delivered by the Company and each other party thereto will constitute the valid and binding obligations of the Company
enforceable against the Company in accordance with their terms, except as such enforceability may be limited by general principles of equity (regardless of whether such enforceability is considered a proceeding at law or in equity), or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors’ rights and remedies now or hereafter in effect, including the effect of statutory
and other laws regarding fraudulent conveyances and preferential transfers, and except that no representation is made herein regarding the enforceability of the Company’s obligations to provide indemnification and contribution remedies under
applicable securities laws.
The Transaction Documents have been prepared in conformity with all applicable laws and in compliance with Regulation D and/or Section 4(a)(2) of the Securities Act and the requirements of
all other rules and regulations of the Securities and Exchange Commission related to offerings of the type contemplated by the Offering and the applicable securities laws and the rules and regulations of those jurisdictions wherein the
Securities are to be offered and sold. Assuming the accuracy of the representations and warranties of the Subscribers contained in Section 5(a) through 5(c) hereof, the Securities will be offered and sold pursuant to the registration
exemption provided by Regulation D and/or Section 4(a)(2) of the Securities Act and the requirements of any applicable state securities laws. To the knowledge of the Company, the Transaction Documents do not include any untrue statement of a
material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
To the extent the Offering is conducted on a Regulation D basis (i) none of Company, nor to the knowledge of the Company, any of its directors, executive officers, other officers of the
Company participating in the Offering, any beneficial owner of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the
Securities Act) connected with the Company in any capacity at the time of sale (each an “Issuer Covered Person”) is subject to any “Bad Actor”
disqualifications described in Rule 506 (d)(1)(i)-(viii) under the Securities Act (a “Disqualification Event”), (ii) the Company has exercised reasonable care to determine whether any Issuer
Covered person is subject to a Disqualification Event and (iii) the Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e).
|
c.
|
Capitalization. The authorized capital stock of the Company consists of 140,010,000 Ordinary Shares. As of the commencement of the initial Closing of the Offering, the Company has
such number of Ordinary Shares issued and outstanding as set forth under “Pro Forma Capitalization” in Schedule 4c. All of the outstanding Ordinary Shares have been duly authorized, validly issued and are fully paid and
nonassessable. Immediately after giving effect to the closing of the Minimum Offering or the Maximum Offering, the pro forma outstanding capitalization of the Company will be as set forth under “Pro Forma Capitalization” in Schedule 4c.
On or prior to the date hereof and on or prior to the applicable Closing Date, (i) except as set forth in Schedule 4c, no Ordinary Shares will be subject to preemptive rights or any other similar rights or any liens or encumbrances
suffered or permitted by the Company; (ii) except as set forth in Schedule 4c, there will be no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any Ordinary Shares, or contracts, commitments, understandings or arrangements by which the Company is or may become bound to issue additional Ordinary Shares or to pay any dividend or make any
distribution in respect thereto; (iii) there will be no outstanding convertible debt securities of the Company other than the indebtedness as set forth in Schedule 4c; (iv) except as set forth in Schedule 4c, other than
pursuant to the Registration Rights Agreement, there will be no agreements or arrangements under which the Company is obligated to register the sale of any of its securities under the Securities Act; (v) except as set forth in Schedule
4c, there will be no securities or instruments of the Company containing anti-dilution or similar provisions, including the right to adjust the exercise, exchange or reset price under such securities; and (vi) except as set forth in Schedule
4c, no co-sale right, right of first refusal or other similar right will exist with respect to the Securities (or will exist with respect to the Warrant Shares) or the issuance and sale thereof.
|
d.
|
Issuance of Securities. Prior to the initial Closing, the Securities, the Warrant Shares and the securities to be issued to the Placement Agent will have been duly authorized and, upon
issuance in accordance with the terms hereof (including full payment), shall be duly issued, fully paid and nonassessable, and shall be free from all liens and charges with respect to the issuance thereof.
|
e.
|
No Conflicts. None of the execution and delivery of or performance by the Company under each Transaction Document or the consummation of the transactions contemplated by the
Transaction Documents (including the issuance and sale of the Securities, the Broker Warrants and Warrant Shares) conflicts with or violates, or causes a default under (with our without the passage of time or the giving of notice), or will
result in the creation or imposition of, any lien, charge or other encumbrance upon any of material assets of the Company under any material agreement, evidence of indebtedness, joint venture, commitment or other material instrument to
which the Company is a party or by which the Company or its assets may be bound, any statute, rule, law or governmental regulation applicable to the Company, or any term of the Company’s Articles of Association as in effect on the date
hereof or any Closing Date for the Offering, or any license, permit, judgment, decree, order, statute, rule or regulation applicable to the Company or any of its assets, except in the case of a conflict, violation, lien, charge or other
encumbrance (except as reflected in the Company’s Articles of Association or the Transaction Documents) which would not, or could not reasonably be expected to, have a material adverse effect on the assets, liabilities, business, condition
(financial or otherwise) or results of operations of the Company or its ability to perform its obligations under this Agreement and the other Transaction Documents (a “Material Adverse Effect”).
Except as described herein and for the filing of reports and undertakings with the Israeli National Technological Innovation Authority, formerly known as the Office of Chief Scientist, the notice to the Israeli Registrar of Companies as may
be required by law, if any, and notices to NASDAQ as required by NASDAQ rules, no consent, approval, authorization or other order of, or registration, qualification or filing with, any regulatory body, administrative agency, or other
governmental body is required for the execution and delivery of the Transaction Documents and the valid issuance or sale of the Securities, the Warrant Shares, and the securities to be issued to the Placement Agent other than such as have
been made or obtained and that remain in full force and effect, and except for the filing of a Form D, to the extent applicable, or any filings required to be made under the Securities Act (including Forms 6-K) or state securities laws or
foreign laws, as applicable, which shall be filed by the Company or any consents, approvals, authorizations, orders, registrations, qualifications or filings the failure to make or obtain would, or could reasonably be expected to, have a
Material Adverse Effect. Except those which could not reasonably be expected to have a Material Adverse Effect, the Company is not in violation of any term of or in default under its Articles of Association. Except those which could not
reasonably be expected to have a Material Adverse Effect, or as otherwise set forth in Schedule 4c, the Company is not in violation of any term of or in default under any material contract, agreement, mortgage, indebtedness,
indenture, instrument, judgment, decree or order or any statute, rule or regulation applicable to the Company. The business of the Company is not being conducted in violation of any material law, ordinance, or regulation of any governmental
entity, except for any violation which could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
|
f.
|
Financial Statements; SEC Reports. The Company’s financial statements for the year ended December 31, 2018, as filed with the Company’s Annual Report on Form 20-F for the fiscal year
ended December 31, 2018, and the quarter ended September 30, 2019, as filed with the Securities and Exchange Commission ( the “SEC”) on November 21, 2019, as Exhibit 99.1 to the Company’s Form
6-K, together with related notes, if any, present fairly, in all material respects, the financial position of the Company as of the dates specified and the results of operations for the periods covered thereby as of such dates (the “Financial Statements”). Such Financial Statements and related notes were prepared in accordance with International Accounting Standards Board accounting principles as issued by the International
Financial Reporting Standards (“IFRS”) and applied on a consistent basis throughout the periods indicated. During the period of engagement of the Company’s accountants, there have been no
disagreements with the accounting firm and the Company on any matters of accounting principles or practices, financial statement disclosure or auditing scope or procedures. The Company has made and kept books and records and accounts which
are in reasonable detail and which fairly and accurately reflect the activities of the Company in all material respects, subject only to year-end adjustments. Except as set forth in such Financial Statements or otherwise disclosed in Schedule
4f, the Company has no knowledge of any unpaid material single liability of any kind, whether accrued, absolute or contingent, or otherwise, in any event above an amount of $100,000 for each such single liability, but excluding any liability
incurred in the ordinary course of business or any liability that is not required to be reflected in the Financial Statements according to IFRS.
The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to
Section 13(a) or 15(d) thereof for the two years preceding the date hereof (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”). As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and Exchange Act, as applicable, and none of the SEC
Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances they were made, not
misleading.
|
g.
|
Absence of Litigation. Except as set forth in Schedule 4g or as described in the Company’s Form 20-F for fiscal year ended December 31, 2018, to the knowledge of the Company,
there are no actions, suits, claims, hearings, proceedings, inquiries or investigations pending before or by any court, public board, governmental or administrative agency, arbitrator, self-regulatory organization or body or, to the knowledge
of the Company, threatened, against the Company, or involving its assets or any of its officers or directors (in their capacity as such) which, if determined adversely to the Company or such officer or director, could reasonably be expected
to have a Material Adverse Effect or adversely affect the transactions contemplated by this Agreement and the other Transaction Documents or the enforceability thereof. The Company is not subject to any injunction, judgment, decree or order
of any court, regulatory body, arbitration panel, administrative agency or other governmental body.
|
h.
|
Acknowledgment Regarding Subscriber’s Purchase of the Securities. The Company acknowledges that each Subscriber is not acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby and thereby and any advice given by such Subscriber or any of their respective representatives or agents in connection with the
Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to such Subscriber’s purchase of the Securities (and the Warrant Shares, if applicable). The Company further represents to the Subscribers that
the Company’s decision to enter into the Transaction Documents has been based solely on the independent evaluation by the Company and its representatives.
|
i.
|
No General Solicitation. Neither the Company, nor any of its affiliates, nor, to the knowledge of the Company, any person acting on its or their behalf, has engaged or will engage in
any form of general solicitation or general advertising (within the meaning of Regulation D of the Securities Act) in connection with the offer or sale of the Securities to be offered or sold in reliance on Regulation D of the Securities Act.
|
j.
|
No Integrated Offering. Neither the Company, nor any of its affiliates, nor, to the knowledge of the Company, any person acting on its or their behalf has, directly or indirectly, made
any offers or sales of any security or solicited any offers to buy any security, under circumstances that would require registration of the Securities or Warrant Shares under the Securities Act or cause this offering of Securities to be
integrated with prior offerings by the Company for purposes of the Securities Act.
|
k.
|
Employee Relations. The Company is not a party to any collective bargaining agreement, except for those provisions of general agreements between any employers’ or employees’ union and
organization which are applicable by extension order to all employees in Israel or to all companies in the same industry of the Company in Israel. The Company believes that its relations with its employees are good. No current executive
officer or key employee of the Company has notified the Company that such officer or key employee, as applicable, intends to leave the Company or otherwise terminate such officer’s or key employee’s employment with the Company. No executive
officer or key employee of the Company, to the knowledge of the Company, is in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement, non-competition agreement, or any
other contract or agreement with the Company. The Company is in compliance with all Israeli laws and regulations involving labor, employment and employment practices and benefits, terms and conditions of employment and wages and hours, except
where the failure to be in compliance would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
|
l.
|
Intellectual Property Rights. Except as described in Schedule 41, or as described in the Company’s Form 20-F for fiscal year ended December 31, 2018 or where it would not
reasonably be expected to result in a Material Adverse Effect, (i) to the knowledge of the Company, the Company has ownership, or licenses or legal rights to use all patents, copyrights, trade secrets, trademarks, trade names or other
proprietary rights (collectively, “Intellectual Property”) used in the business of the Company, (ii) the Company believes it has taken all reasonable steps required in accordance with sound
business practice and business judgment to establish and preserve its ownership of all Intellectual Property owned by the Company and related to its products and technology, (iii) to the knowledge of the Company, there is no infringement of
the Intellectual Property owned by the Company by any third party, (iv) to the knowledge of the Company, the present business, activities and products of the Company do not infringe any Intellectual Property of any other person, (v) there is
no proceeding charging the Company with infringement of any Intellectual Property adversely held by a third party which has been filed, (vi) no proceedings have been instituted or are pending or, to the knowledge of the Company, threatened,
which challenge the rights of the Company to the use of the Intellectual Property owned by or licensed to the Company, (vii) the Intellectual Property owned by the Company, and to the knowledge of the Company, the Intellectual Property
licensed to the Company, has not been adjudged invalid or unenforceable, in whole or in part and there is no pending or, to the knowledge of the Company, threatened proceeding by others challenging the validity or scope of any such
Intellectual Property, and the Company is unaware of any facts which are reasonably likely to form a basis for any such claim, (viii) to the knowledge of the Company, the Company is not making unauthorized use of any confidential information
or trade secrets of any person, (ix) to the knowledge of the Company, the activities of any of the employees on behalf of the Company do not violate any agreements between such employees and third parties relating to confidential information
or trade secrets of such third parties or that restrict any such employee’s engagement with the Company, (x) each employee or consultant of the Company that is involved in the development of Intellectual Property for the Company is a party to
a written contract with the Company that assigns to the Company all rights to all inventions, improvements, discoveries and information relating to the Company and (xi) all licenses or other agreements under which (A) the Company has obtained
rights to use Intellectual Property, or (B) the Company has granted rights to others to use Intellectual Property owned by or licensed to the Company are in full force and effect, and there is no default (and there exists no condition which,
with the passage of time or otherwise, would constitute a default by the Company) by the Company with respect thereto. Notwithstanding the foregoing, it is hereby clarified that the Company has received grants from the Israeli National
Technological Innovation Authority (formerly known as the Office of Chief Scientist), and accordingly the Company is subject to the Israel’s Encouragement of Research and Development Law, 1984 (the “R&D Law”) and the applicable rules and
regulations as described in details in the Company’s Form 20-F for fiscal year ended December 31, 2018.
|
m.
|
Environmental Laws.
|
(i)
|
The Company has complied with all applicable Environmental Laws (as defined below), except for violations of Environmental Laws that, individually or in the aggregate,
have not had and would not reasonably be expected to have a Material Adverse Effect. There is, to the knowledge of the Company, no pending or threatened civil or criminal litigation, written notice of violation, formal administrative
proceeding, or investigation, inquiry or information request, relating to any Environmental Law involving the Company or any subsidiary of the Company, except for litigation, notices of violations, formal administrative proceedings or
investigations, inquiries or information requests that, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect. For purposes of this Agreement, “Environmental
Law” means any national, state, provincial or local law, statute, rule or regulation or the common law relating to the environment or occupational health and safety, including without limitation any statute, regulation,
administrative decision or order pertaining to (i) treatment, storage, disposal, generation and transportation of industrial, toxic or hazardous materials or substances or solid or hazardous waste; (ii) air, water and noise pollution; (iii)
groundwater and soil contamination; (iv) the release or threatened release into the environment of industrial, toxic or hazardous materials or substances, or solid or hazardous waste, including without limitation emissions, discharges,
injections, spills, escapes or dumping of pollutants, contaminants or chemicals; (v) the protection of wild life, marine life and wetlands, including without limitation all endangered and threatened species; (vi) storage tanks, vessels,
containers, abandoned or discarded barrels, and other closed receptacles; (vii) health and safety of employees and other persons; and (viii) manufacturing, processing, using, distributing, treating, storing, disposing, transporting or
handling of materials regulated under any law as pollutants, contaminants, toxic or hazardous materials or substances or oil or petroleum products or solid or hazardous waste.
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(ii)
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To the knowledge of the Company there is no material environmental liability with respect to any solid or hazardous waste transporter or treatment, storage or disposal facility that has been
used by the Company or any subsidiary of the Company.
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(iii)
|
The Company has received all permits, licenses or other approvals required of it under applicable Environmental Laws to conduct its businesses and is in compliance, in all material respects,
with all terms and conditions of any such permit, license or approval.
|
n.
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Permits; Regulatory Compliance. Except as disclosed in the Company’s Form 20-F for the fiscal year ended December 31, 2018 or except as disclosed in Schedule 4n, the Company
does not own any equity interest and has not made any loans or advances to or guarantees of indebtedness to any person, corporation, partnership or other entity and is not a party to any joint venture, other than travel advances and expenses
made in the ordinary course of business. Except as disclosed in Schedule 4n of the Disclosure Schedule or as disclosed in the Company’s Form 20-F for the fiscal year ended December 31, 2018 and any 6-K filed thereafter, to the
knowledge of the Company, the conduct of business by the Company as presently and proposed to be conducted is not subject to continuing oversight, supervision, regulation or examination by any governmental official or body of the United
States, or any other jurisdiction wherein the Company conducts or proposes to conduct such business, except (i) for the applicable laws, rules and regulations governing the drug and medical industry, including the Food and Drug Administration
(the “FDA” or “USFDA”), and other similar laws, rules and regulations or other agencies, and governmental authorities around the world applicable
to the Company or to its products, (ii) as described in the Subscription Documents and except as such regulation is applicable to commercial enterprises generally, applicable to the industry of the Company or to all companies in Israel or
biomed companies in general. The Company has obtained all material licenses, permits and other governmental authorizations necessary to conduct its business as presently conducted, except where the failure to do so would not be reasonably
expected to cause a Material Adverse Effect. The Company has not received any notice of any violation of, or noncompliance with, any material federal, state, local or foreign laws, ordinances, regulations and orders (including, without
limitation, those relating to environmental protection, occupational safety and health, securities laws, equal employment opportunity) applicable to its business, the violation of, or noncompliance with, would have a Material Adverse Effect,
and the Company knows of no facts or set of circumstances which could give rise to such a notice.
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o.
|
Title. The Company owns no real property. Except as set forth in Schedule 4o or in the Company’s Form 20-F for the fiscal year ended December 31, 2018 and the Company’s Form
6-K, which included financial statements for the quarter ended September 30, 2019, as filed with the SEC on November 21 ,2019, as Exhibit 99.1, together with related notes, the Company has good and marketable title to all of its personal
property and assets free and clear of any material restriction, mortgage, deed of trust, pledge, lien, security interest or other charge, claim or encumbrance which would have a Material Adverse Effect. With respect to properties and assets
it leases, except as set forth in Schedule 4o or in the Company’s Form 20-F for the fiscal year ended December 31, 2018, the Company is in material compliance with such leases and holds a valid leasehold interest free of any liens,
claims or encumbrances which would have a Material Adverse Effect.
|
p.
|
Shell Company Status. The Company is not and has never been a “shell company” as such term is defined in Section 405 of the Securities Act.
|
q.
|
No Material Adverse Breaches, etc. The Amended Articles of Association of the Company filed as Exhibit 3.2 to the Company’s Annual Report on Form 20-F for the fiscal year ended
December 31, 2018, as such articles were amended on the extraordinary general meeting of shareholders of the Company on October 3, 2019, is a true, correct and complete copy of the Amended and Restated Articles of Association of the Company,
as in effect on the date hereof. Any subsequent amendments thereto prior to the initial or any subsequent Closings will be promptly provided to all Subscribers. The Company is not (i) in violation of its Articles of Association; (ii) to the
knowledge of the Company, in default under any material contract, indenture, mortgage, note, loan agreement, security agreement, lease, alliance agreement, joint venture agreement or other agreement, license, permit, consent, approval or
instrument to which the Company is a party or by which it is or may be bound or to which any of its assets may be subject, the default of which can be reasonably expected to have a Material Adverse Effect; (iii) in violation of any statute,
rule or regulation applicable to the Company, the violation of which would have a Material Adverse Effect; or (iv) in violation of any judgment, decree or order of any court or governmental body having jurisdiction over the Company and
specifically naming the Company, which violation or violations individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.
|
r.
|
Tax Status. The Company has made and filed, or filed appropriate extensions for, all applicable material federal, state and local income tax returns and all other reports and
declarations required by Israel and any other jurisdictions to which it is subject and (unless and only to the extent that the Company has set aside on its books provisions reasonably adequate for the payment of all unpaid and unreported
taxes) has paid all material taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and has set
aside on its books, provisions reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due
from the Company by the taxing authority of Israel or any other jurisdiction, and officers of the Company know of no basis for any such claim.
|
s.
|
Rights of First Refusal. Except as set forth herein or in Schedule 4s or in the Company’s Form 20-F for the fiscal year ended December 31, 2018, there are no outstanding rights
of first refusal or participation rights with respect to the offering of Company securities.
|
t.
|
Reliance. The Company acknowledges that the Subscribers are relying on the representations and warranties made by the Company hereunder and that such representations and warranties are
a material inducement to the Subscriber purchasing the Securities. The Company further acknowledges that without such representations and warranties of the Company made hereunder, the Subscribers would not enter into this Agreement.
|
u.
|
Brokers’ Fees. The Company does not have any liability or obligation to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this
Agreement, except for the payment of fees to the Placement Agent, as specified in Section 3 above.
|
v.
|
Insurance. The Company has insurance policies of the type and in amounts that the Company reasonably believes are adequate for its business. There is no material claim pending under
any such policy as to which coverage has been questioned, denied or disputed by the underwriter of such policy.
|
w.
|
Material Changes. Since September 30,2019, the Company has operated its business in the normal course and, except as specifically disclosed in Schedule 4w, (i) there have been
no events, occurrences or developments that have had or would reasonably be expected to have a Material Adverse Effect with respect to the Company, (ii) the Company has not incurred any material liabilities (contingent or otherwise) other
than (A) trade payables, accrued expenses and other liabilities incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Financial Statements of the Company, (iii) the
Company has not materially altered its method of accounting or the manner in which it keeps its accounting books and records, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its shareholders
or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock, (v) the Company has not issued any equity securities to any officer, director or affiliate, except Ordinary Shares issued in the ordinary
course pursuant to existing Company stock option or stock purchase plans or executive and director corporate arrangements, and (vi) there has not been any change or amendment to, or any waiver of any material right under, any material
contract under which the Company, or any of its assets are bound or subject.
|
x.
|
Transactions With Affiliates, Shareholders and Employees. Except as set forth in Section 7.B of the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2018 and
the Company’s Form 6-K, which included financial statements for the quarter ended September 30, 2019, as filed with the SEC on November 21 ,2019, as Exhibit 99.1 or in Schedule 4x, none of the officers, directors or principal (10% or
greater) shareholders of the Company, including affiliates of such parties, and, to the Company’s knowledge, none of the employees of the Company, including affiliates of such employees, is a party to any transaction with the Company or to a
transaction contemplated by the Company (other than for services as employees, officers and directors) that are required to be disclosed by the Company pursuant to item 7 of Form 20-F promulgated under the Securities Act, if applicable,
except as contemplated by the Transaction Documents.
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y.
|
Off-Balance Sheet Arrangements. The Company has no off-balance sheet transactions or arrangements.
|
z.
|
Investment Company. The Company is not required to be registered as, and is not an affiliate of, and as the result of the transactions contemplated by the Offering will not be required
to register as, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
|
aa.
|
Foreign Corrupt Practices. The Company is not (a) a person that is the subject of any sanctions administered by the U.S. Treasury Department’s Office of Foreign Assets Control or the
U.S. Commerce Department (collectively, “Sanctions”) or, to the best of the Company’s knowledge, in violation of any regulations of such entities. Each of the Company, and to its knowledge, its
respective officers, directors, managers, or employees, is in compliance, in all material respects, with applicable: (a) anti-bribery laws, including but not limited to, the U.S. Foreign Corrupt Practices Act of 1977, as amended, or any other
law, rule or regulation of similar purposes and scope applicable to the Company, (b) anti-money laundering laws, including the Bank Secrecy Act, as amended by the USA PATRIOT Act of 2001 (signed into law October 26, 2001), or (c) Sanctions.
Neither the Company nor, to its knowledge, any director, officer, employee or other person acting on behalf of the Company has, in the course of its actions for, or on behalf of, the Company (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expenses relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; or (iii) made any
unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee of such government official.
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bb.
|
Material Contracts. All of the Company’s contracts involving an amount in excess of $150,000 (the “Material Contracts”) have been filed
with the SEC except as described in Schedule 4bb. There are no Material Contracts that are not in written form. Neither the Company, nor to the Company’s knowledge, as of the date of this Agreement has any other party to a Material
Contract breached, violated or defaulted under, or received notice that it has breached, violated or defaulted under, any of the terms or conditions of any Material Contract in such manner as would permit any other party to cancel or
terminate any such Material Contract, or would permit any other party to seek damages that constitutes a Material Adverse Effect. As of the date of this Agreement, each Material Contract is valid, binding, enforceable and in full force and
effect, subject to: (i) laws of general application relating to bankruptcy, insolvency and the relief of debtors; and (ii) rules of law governing specific performance, injunctive relief and other equitable remedies.
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cc.
|
Undisclosed Liabilities. As of the date of this Agreement, the Company has no liabilities, except for: (i) liabilities identified in the Company balance sheet included with Financial Statements;
(ii) normal and recurring current liabilities that have been incurred by the Company since the date of such balance sheet in the ordinary course of business and that are not in excess of $150,000 in the aggregate; (iii) liabilities for
performance in the ordinary course of business of obligations of the Company under Company contracts, including the reasonably expected performance of such Company contracts in accordance with their terms (which would not include, for
example, any instances of breach or indemnification); and (iv) liabilities described in Schedule 4cc.
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dd.
|
Registration Rights. Each Subscriber investing in this Offering shall be entitled to registration rights according to the terms and conditions of the Registration Rights Agreement annexed hereto as Exhibit
B. For the full terms of the registration rights, Subscribers should review the Registration Rights Agreement. Pursuant to such Registration Rights Agreement, generally, within 7 months of the Final Closing, the Company will file
a registration statement on Form F-3 (or S-3, as applicable) (the “Registration Statement”) covering all of the Ordinary Shares issued or issuable in connection with the Offering
(including those issuable upon exercise of the Warrants and Broker Warrants) and such other Company securities that the Company finds necessary in its sole discretion and will use its reasonable best efforts to have the Registration
Statement declared effective as soon as practicable following such filing. In the event of any inconsistencies between this section 4(dd) and the terms of the Registration Rights Agreement, the terms set forth in the Registration Rights
Agreement shall be controlling.
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ee.
|
Reserved.
|
ff.
|
No Other Representations or Warranties. Except for the representations and warranties of the Company contained in this Agreement, the Company is not making and has not made, and no other person is
making or has made on behalf of the Company, any express or implied representation or warranty to prospective Subscribers in connection with this Agreement or the transactions contemplated hereby, and no third party is authorized to
make any such representations and warranties on behalf of the Company.
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a.
|
Investment Purpose. The Subscriber is, and will be, acquiring the Securities and Warrant Shares, for its own account for investment only and not with a view towards, or for resale in
connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted under the Securities Act; provided, however, that by making the representations herein, such Subscriber reserves the right to dispose
of the Securities and Warrant Shares, at any time in accordance with or pursuant to an effective registration statement covering such Securities and Warrant Shares, or an available exemption under the Securities Act. The Subscriber agrees
not to sell, hypothecate or otherwise transfer the Securities or Warrant Shares unless such Securities or Warrant Shares are registered under the federal and applicable state securities laws or unless, in the opinion of counsel satisfactory
to the Company, an exemption from such law is available.
|
b.
|
Residence of Subscriber. The Subscriber resides in the jurisdiction set forth on the Subscriber Omnibus Signature Page affixed hereto.
|
c.
|
Accredited Investor Status. The Subscriber meets the requirements of at least one of the suitability standards for an “Accredited Investor” as that term is defined in Rule 501(a) of
Regulation D, for the reason set forth on the Investor Certification attached hereto as Annex B and the Subscriber represents that the information set forth in the Questionnaire is accurate and complete in all material respects.
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d.
|
Accredited Investor Qualifications. A Subscriber (i) if a natural person, represents that such Subscriber has reached the age of 21 and has full power and authority to execute and
deliver this Agreement and all other related agreements or certificates and to carry out the provisions hereof and thereof; (ii) if a corporation, partnership, or limited liability company or partnership, or association, joint stock company,
trust, unincorporated organization or other entity, represents that such entity was not formed for the specific purpose of acquiring the Securities, such entity is duly organized, validly existing and in good standing under the laws of the
state of its organization, the consummation of the transactions contemplated hereby is authorized by, and will not result in a violation of state law or its charter or other organizational documents, such entity has full power and authority
to execute and deliver this Agreement and all other related agreements or certificates and to carry out the provisions hereof and thereof and to purchase and hold the Securities and underlying securities, the execution and delivery of this
Agreement has been duly authorized by all necessary action, this Agreement has been duly executed and delivered on behalf of such entity and is a legal, valid and binding obligation of such entity; or (iii) if executing this Agreement in a
representative or fiduciary capacity, represents that it has full power and authority to execute and deliver this Agreement in such capacity and on behalf of the subscribing individual, ward, partnership, trust, estate, corporation, or
limited liability company or partnership, or other entity for whom such Subscriber is executing this Agreement, and such individual, partnership, ward, trust, estate, corporation, or limited liability company or partnership, or other entity
has full right and power to perform pursuant to this Agreement and make an investment in the Company, and represents that this Agreement constitutes a legal, valid and binding obligation of such entity. The execution and delivery of this
Agreement will not violate or be in conflict with any order, judgment, injunction, agreement or controlling document to which the Subscriber is a party or by which it is bound.
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e.
|
Subscriber Relationship With Brokers. The Subscriber’s substantive relationship with a broker, if any, for the transactions contemplated hereby, or a subagent thereof (collectively, “Brokers”), through which a Subscriber may be subscribing for the Securities predates such Broker’s contact with the Subscriber regarding an investment in the Securities
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f.
|
Solicitation. The Subscriber is unaware of, is in no way relying on, and did not become aware of the offering of the Securities through or as a result of, any form of general
solicitation or general advertising including, without limitation, any article, notice, advertisement or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, in connection with the
offering and sale of the Securities and is not subscribing for the Securities and did not become aware of the offering of the Securities through or as a result of any seminar or meeting to which the Subscriber was invited by, or any
solicitation of a subscription by, a person not previously known to the Subscriber in connection with investments in securities generally.
|
g.
|
Brokerage Fees. Except as otherwise provided herein, the Subscriber has taken no action that would give rise to any claim by any person for brokerage commissions, finders’ fees or the
like relating to this Agreement or the transaction contemplated hereby.
|
h.
|
Subscriber’s Advisors. The Subscriber and the Subscriber’s attorney, accountant, representative and/or tax advisor, if any (collectively, the “Advisors”),
as the case may be, has such knowledge and experience in financial, tax, and business matters, and, in particular, investments in securities, so as to enable it to utilize the information made available to it in connection with the Securities
to evaluate the merits and risks of an investment in the Securities and the Company and to make an informed investment decision with respect thereto.
|
i.
|
Subscriber Liquidity. The Subscriber has adequate means of providing for the Subscriber’s current financial needs and foreseeable contingencies and has no need for liquidity of its
investment in the Securities for an indefinite period of time, and after purchasing the Securities, the Subscriber will be able to provide for any foreseeable current needs and possible personal contingencies. The Subscriber must bear and
acknowledges the substantial economic risks of the investment in the Securities including the risk of illiquidity and the risk of a complete loss of this investment.
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j.
|
High Risk Investment. The Subscriber is aware that an investment in the Securities involves a number of very significant risks and has carefully researched and reviewed and understands
the risks of, and other considerations relating to, the purchase of the Securities, including those set forth in the Company’s Annual Report on Form 20-F for the year ended December 31, 2018 filed with the SEC on March 28, 2019 and any 6-K
filed thereafter.
|
k.
|
Reliance on Exemptions. The Subscriber understands that the Securities are being offered and sold to it in reliance on specific exemptions from the registration requirements of United
States federal and state securities laws and/or other applicable state laws to the extent applicable to Non-PA Subscribers and that the Company is relying in part upon the truth and accuracy of, and the Subscriber’s compliance with, the
representations, warranties, agreements, acknowledgments and understandings of the Subscriber set forth herein in order to determine the availability of such exemptions and the eligibility of the Subscriber to acquire the Securities.
|
l.
|
Information. The Subscriber and its Advisors have been furnished with all documents and materials relating to the business, finances and operations of the Company and information that
the Subscriber requested and deemed material to making an informed investment decision regarding the Subscriber’s purchase of the Securities and the underlying securities. The Subscriber and its Advisors have been afforded the opportunity to
review such documents and materials, and the information contained therein. The Subscriber and its Advisors have been afforded the opportunity to ask questions of the Company and its management. The Subscriber understands that such
discussions, as well as any written information provided by the Company, were intended to describe the aspects of the Company’s business and prospects which the Company believes to be material, but were not necessarily a thorough or
exhaustive description, and except as expressly set forth in this Agreement, the Company makes no representation or warranty with respect to the completeness of such information and makes no representation or warranty of any kind with respect
to any information provided by any entity other than the Company. Some of such information may include projections as to the future performance of the Company, which projections may not be realized, may be based on assumptions which may not
be correct and may be subject to numerous factors beyond the Company’s control. Additionally, the Subscriber understands and represents that the Subscriber is purchasing the Securities notwithstanding the fact that the Company may disclose in
the future certain material information the Subscriber has not received, including the financial results of the Company for its current fiscal quarter. Neither such inquiries, nor any other due diligence investigations conducted by the
Subscriber or its Advisors, shall modify, amend or affect the Subscriber’s right to rely on the Company’s representations and warranties contained in Section 4 above. The Subscriber has sought such accounting, legal and tax advice as it has
considered necessary to make an informed investment decision with respect to its acquisition of the Securities.
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m.
|
No Other Representations or Information. In evaluating the suitability of an investment in the Securities, the Subscriber has not relied upon any representation or information (oral or
written) with respect to the Company, or otherwise, other than as stated in this Agreement, the other Transaction Documents and the Securities. No other oral or written representations have been made, or oral or written information furnished,
to the Subscriber or its Advisors, if any, in connection with the offering of the Securities.
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n.
|
No Governmental Review. The Subscriber understands that no United States federal or state agency or any other United States or foreign government or governmental agency has passed on
or made any recommendation or endorsement of the Securities, or the fairness or suitability of the Securities, nor have such authorities passed upon or endorsed the merits of the offering of the Securities.
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o.
|
Transfer or Resale. The Subscriber understands that: (i) the Securities and the Warrant Shares have not been and may not be registered under the Securities Act or any state securities
or other foreign laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, or (B) the Subscriber shall have delivered to the Company an opinion of counsel, in a form reasonably
satisfactory to the Company, to the effect that such securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration requirements; (ii) any sale of such securities made in
reliance on Rule 144 under the Securities Act (or a successor rule thereto) (“Rule 144”) may be made only in accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any
resale of such securities under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the Securities Act) may require compliance with some other
exemption under the Securities Act or the rules and regulations of the SEC thereunder; and (iii) except as otherwise set forth in this Agreement, the Company is not, and no other person is, under any obligation to register such securities
under the Securities Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder. The Company reserves the right to place stop transfer instructions against the certificates for the Ordinary Shares
and Warrant Shares to the extent specifically set forth under this Agreement. There can be no assurance that there will be an active trading market or resale for the Ordinary Shares, or Warrant Shares, nor can there be any assurance that the
Ordinary Shares or Warrant Shares will be freely transferable at any time in the foreseeable future.
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p.
|
Legends. The Subscriber understands that the certificates for the Ordinary Shares (to the extent Ordinary Shares, including those issuable upon exercise of Warrants and Broker
Warrants, are issued in certificated form) shall bear a restrictive legend in substantially the form below (and a stop transfer order may be placed against transfer of such stock certificates). In addition, the Subscriber understand that the
Warrants shall include a legend substantially in the form of the first page of the Form of Warrant attached hereto as Exhibit A (and a stop transfer order may be placed against transfer of such warrant certificates).
|
q.
|
Authorization, Enforcement. The Subscriber has the requisite power and authority to enter into and perform under this Agreement and the other Transaction Documents, and to purchase the
Securities and underlying securities being sold to it hereunder. The execution, delivery and performance of this Agreement and the Transaction Documents by such Subscriber and the consummation by Subscriber of the transactions contemplated
hereby and thereby have been duly authorized by all necessary corporate or partnership action, and no further consent or authorization of such Subscriber or Subscriber’s Board of Directors, stockholders, partners, members, as the case may be,
is required. This Agreement and the other Transaction Documents (to the extent the Subscriber is party thereto) have been duly authorized, executed and delivered by such Subscriber and upon execution of this Agreement and the Transaction
Documents by the other parties hereto and thereto, constitute, or shall constitute when executed and delivered, a valid and binding obligation of such Subscriber enforceable against such Subscriber in accordance with the terms hereof and
thereof, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of
applicable creditors’ rights and remedies.
|
r.
|
No Conflicts. The execution, delivery and performance of this Agreement and the other Transaction Documents and the consummation by the Subscriber of the transactions contemplated
hereby and thereby or relating hereto do not and will not (i) if the Subscriber is not an individual, result in a violation of the Subscriber’s charter documents or bylaws or other organizational documents or (ii) conflict with, or constitute
a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of any agreement, indenture or instrument or obligation to
which the Subscriber is a party or by which its properties or assets are bound, or result in a violation of any law, rule, or regulation, or any order, judgment or decree of any court or governmental agency applicable to the Subscriber or its
properties (except for such conflicts, defaults and violations as would not, individually or in the aggregate, have a material adverse effect on the Subscriber). The Subscriber is not required to obtain any consent, authorization or order of,
or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under this Agreement and the other Transaction Documents or to purchase the Securities in
accordance with the terms hereof, provided that for purposes of the representation made in this sentence, the Subscriber is assuming and relying upon the accuracy of the relevant representations and agreements of the Company herein.
|
s.
|
Receipt of Documents. The Subscriber, its counsel and/or its Advisors have received and read in their entirety: (i) this Agreement and each representation, warranty and covenant set
forth herein; and (ii) all due diligence and other information necessary to verify the accuracy and completeness of such representations, warranties and covenants; the Subscriber has received answers to all questions the Subscriber submitted
to the Company regarding an investment in the Company; and the Subscriber has relied on the information contained therein and has not been furnished any other documents, literature, memorandum or prospectus.
|
t.
|
Trading Activities. The Subscriber’s trading activities with respect to the Ordinary Shares shall be in compliance with all applicable federal and state securities laws, rules and
regulations and the rules and regulations of the principal market on which the Ordinary Shares are listed or traded. Except as set forth below, the Subscriber shall not, and shall cause its affiliates not to, engage in any short sale as
defined in any applicable SEC or Financial Industry Regulatory Authority (“FINRA”) rules or any hedging transactions with respect to the Common Stock until the earlier to occur of (i) the first
anniversary of the initial Closing Date and (ii) the Subscriber no longer owns Ordinary Shares, Warrants or Warrant Shares. Without limiting the foregoing, the Subscriber agrees not to engage in any naked short transactions in excess of the
amount of shares owned (or an offsetting long position) by the Subscriber.
|
u.
|
No Legal Advice from the Company. The Subscriber acknowledges that it had the opportunity to review this Agreement and the transactions contemplated by this Agreement with its own
legal counsel and investment and tax Advisors. The Subscriber is relying solely on such Advisors and not on any statements or representations of the Company or any of its employees, representatives or agents for legal, tax, economic and
related considerations or investment advice with respect to this investment, the transactions contemplated by this Agreement or the securities laws of any jurisdiction.
|
v.
|
No Group Participation. The Subscriber and its affiliates is not a member of any group, nor is the Subscriber acting in concert with any other person, including any other Subscriber,
with respect to its acquisition of the Securities and underlying securities.
|
w.
|
Reliance. Any information which the Subscriber has heretofore furnished or is furnishing herewith to the Company or any Broker is complete and accurate and may be relied upon by the
Company and any Broker in determining the availability of an exemption from registration under U.S. federal and state securities laws in connection with the offering of securities as described in this Agreement and the related summary term
sheet and transmittal letter, if any. The Subscriber further represents and warrants that it will notify and supply corrective information to the Company immediately upon the occurrence of any change therein occurring prior to the Company’s
issuance of the Securities. Within five (5) days after receipt of a request from the Company or any Broker, the Subscriber will provide such information and deliver such documents as may reasonably be necessary to comply with any and all laws
and ordinances to which the Company or any Broker is subject.
|
x.
|
(For ERISA plan Subscribers only). The fiduciary of the ERISA plan represents that such fiduciary has been informed of and understands the
Company’s investment objectives, policies and strategies, and that the decision to invest “plan assets” (as such term is defined in ERISA) in the Company is consistent with the provisions of
ERISA that require diversification of plan assets and impose other fiduciary responsibilities. The Subscriber fiduciary or plan (a) is responsible for the decision to invest in the Company; (b) is independent of the Company or any of its
affiliates; (c) is qualified to make such investment decision; and (d) in making such decision, the Subscriber fiduciary or plan has not relied primarily on any advice or recommendation of the Company or any of its affiliates.
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y.
|
Anti-Money Laundering; OFAC.
[The Subscriber should check the Office of Foreign Assets Control (“OFAC”) website at http://www.treas.gov/ofac before making the following representations.] The Subscriber represents that the amounts invested by it in the Company in the Securities were not and are not directly or indirectly
derived from activities that contravene U.S. federal or state or international laws and regulations, including anti-money laundering laws and regulations. U.S. federal regulations and executive orders administered by OFAC prohibit, among
other things, the engagement in transactions with, and the provision of services to, certain foreign countries, territories, entities and individuals. The lists of OFAC prohibited countries, territories, persons and entities can be found on
the OFAC website at http://www.treas.gov/ofac. In addition, the programs administered by OFAC (the “OFAC Programs”) prohibit dealing with individuals1 or entities in
certain countries regardless of whether such individuals or entities appear on the OFAC lists.
|
z.
|
Conflicts Waiver. Each PA Subscriber purchasing through GPN is aware that some of the members of Intuitive Venture Partners, LLC (“Intuitive”)
are registered representatives registered with GPN, and may receive a portion of the Cash Fee and/or Broker Warrants payable to GPN, as described above. Each such PA Subscriber, for itself and on behalf of its affiliates, expressly waives any
conflicts of interest or potential conflicts of interest discussed in this paragraph and agrees that neither GPN nor its affiliates, officers, directors or members shall have any liability to the Subscriber or its affiliates, and the
Subscriber and its affiliates shall have no liability to GPN, or its affiliates, officers, directors or members, with respect to such conflicts of interest or potential conflicts of interest.
|
|
aa.
|
Funds Availability. The Subscriber has, or will have at the applicable Closing, sufficient cash, available lines of credit or other sources of immediately available funds pursuant to the Agreement, to
enable it to make pursuant to the terms of this Agreement.
|
(a)
|
Best Efforts. Each party shall use its best efforts timely to satisfy each of the conditions to be satisfied by it as provided in Sections 7 and 8 of this Agreement.
|
(b)
|
Form D and Blue Sky Laws. If the Company decides to rely on Regulation D for this offering, the Company will file a Form D, to the extent applicable, with respect to the offer and sale
of the Securities. The Company shall take such actions as the Company shall reasonably determine is necessary to qualify the Securities and Warrant Shares, or obtain an exemption for the Securities and Warrant Shares for sale to the
Subscribers pursuant to this Agreement, under applicable US state blue sky laws.
|
(c)
|
Reporting Status; Rule 144. Through the date which is one-year after the final Closing Date, the Company shall, to the extent applicable, maintain the registration of its ordinary
shares under Section 12(b) or 12(g) of the Exchange Act and file in a timely manner (or, with respect to Form 6-K Reports, shall use its commercially reasonable efforts to file in a timely manner) all reports required to be filed with the SEC
thereunder, and the Company shall not terminate its status as an issuer required to file reports under the Exchange Act even if the Exchange Act or the rules and regulations thereunder would otherwise permit such termination. The Company
further covenants that it will take such actions which are in compliance with the applicable laws that any Subscriber may reasonably request to enable such Subscriber to sell or transfer the Securities acquired in the Offering without
registration under the Securities Act, including without limitation, pursuant to Rule 144.
|
(d)
|
Use of Proceeds. The Company shall use the net proceeds from the sale of the Securities (after deducting fees and expenses (including brokerage fees, legal fees and expenses and fees
payable to the Escrow Agent)) for (i) completion of P2 Osteoporosis trial and primary readouts; (ii) filing of IND for osteoporosis program; (iii) research and development efforts to further develop additional compounds and finalize Hypo
formulations; and (iv) general and administrative expenses to, among other things, support the Company’s public listing and registration statement, in each case, as such use of proceeds may be amended, at the discretion of the Company’s board
of directors from time to time.
|
(e)
|
Survival. Notwithstanding anything to the contrary in this Agreement, the representations and warranties of the Company and the Subscriber contained in Sections 4 and 5 shall survive
the final Closing for a period of one year. The covenants contained in Sections 6 and 15 shall survive for the maximum period permitted by law. Each Subscriber shall be responsible only for its own representations, warranties, agreements and
covenants hereunder.
|
|
(f)
|
Listing of Ordinary Shares. Following the Offering, the Company shall, if allowed under applicable laws or NASDAQ rules, promptly secure the listing of all Ordinary Shares (including
those underlying the Warrants and Broker Warrants) on the NASDAQ National Market or such other market then constituting the Company’s principal trading market.
|
a.
|
Receipt of Payment. The Company shall have received payment, by certified or other bank check or by wire transfer of immediately available funds, in the full amount of the Purchase
Price for the amount of Securities being purchased by such Subscriber at such Closing.
|
b.
|
Representations and Warranties. The representations and warranties made by the Subscriber in Section 5 hereof shall be true and correct in all material respects as of, and as if made
on, the date of this Agreement and as of such Closing Date with the same force and effect as if they had been made on and as of said date (except in each case to the extent any such representation and warranty is qualified by materiality, in
which case, such representation and warranty shall be true and correct in all respects as so qualified). The Subscriber shall have performed in all material respects all obligations and covenants herein required to be performed by them on or
prior to such Closing Date.
|
c.
|
Receipt of Executed Documents. Such Subscriber shall have executed and delivered to the Company the Omnibus Signature Page, the Investor Profile, Anti-Money Laundering Form and
Accredited Investor Certification. In addition, the Subscriber is furnishing to the Company an executed IRS Form W-8BEN or W-9, if either is applicable, or the correct form as described in the instructions in the attached herein as an exhibit
(“Internal Revenue Service Forms”) and the instructions accompanying the applicable form.
|
d.
|
Minimum Offering. The initial Closing shall be at least for the amount of Securities in the Minimum Offering at the Purchase Price.
|
e.
|
Judgments. No judgment, writ, order, injunction, award or decree of or by any court, or judge, justice or magistrate, including any bankruptcy court or judge, or any order of or by any
governmental authority, shall have been issued, and no action or proceeding shall have been instituted by any governmental authority, enjoining or preventing the consummation of the transactions contemplated hereby.
|
|
f.
|
Foreign Investors. If the Subscriber is not a United States person (as defined by Section 7701(a)(30) of the Internal Revenue Code), Subscriber hereby represents that it has satisfied
itself as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Securities or any use of this Agreement, including (i) the legal requirements within its jurisdiction for the purchase of
the Securities, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any government or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the
purchase, holding, redemption, sale or transfer of the Securities. Subscriber’s subscription and payment for and continued beneficial ownership of the Securities will not violate any applicable securities or other laws of Subscriber’s
jurisdiction.
|
a.
|
Representations and Warranties. The representations and warranties made by the Company in Section 4 hereof shall be true and correct in all material respects (except to the extent any
such representation and warranty is qualified by materiality or reference to Material Adverse Effect, in which case, such representation and warranty shall be true and correct in all respects as so qualified) as of, and as if made on, the
date of this Agreement and as of such Closing Date with the same force and effect as if they had been made on and as of said date, except to the extent any such representation or warranty expressly speaks as of an earlier date, in which case
such representation or warranty shall be true and in all material respects correct as of such earlier date (except in each case to the extent any such representation and warranty is qualified by materiality or reference to Material Adverse
Effect, in which case, such representation and warranty shall be true and correct in all respects as so qualified). The Company shall have performed in all material respects all obligations and covenants herein required to be performed by it
on or prior to the applicable Closing Date.
|
b.
|
Receipt of Executed Transaction Documents. The Company shall have executed and delivered to the Placement Agent the Registration Rights Agreement and the Escrow Agreement.
|
c.
|
Minimum Offering. The initial Closing shall be at least for the amount of Securities in the Minimum Offering at the Purchase Price.
|
d.
|
Judgments. No judgment, writ, order, injunction, award or decree of or by any court, or judge, justice or magistrate, including any bankruptcy court or judge, or any order of or by any
governmental authority, shall have been issued, and no action or proceeding shall have been instituted by any governmental authority, enjoining or preventing the consummation of the transactions contemplated hereby.
|
e.
|
Consents. The Company shall have obtained any and all consents, permits, approvals, registrations and waivers necessary or appropriate for consummation by the Company of the purchase
and sale of the Securities and the transactions contemplated hereby or under the Transaction Documents, all of which shall be in full force and effect.
|
f.
|
Reserved.
|
g.
|
Officer’s Certificate. The Company shall have delivered to the Subscribers a certificate, executed on its behalf by an appropriate officer, dated as of the applicable Closing Date,
certifying as to the matters set forth in Sections 8 a.-e. above, certifying the resolutions adopted by its Board of Directors approving the transactions contemplated by this Agreement, the other Transaction Documents and the issuance of the
Securities, certifying that the current versions of its Articles of Association, and certifying as to the signatures and authority of persons signing this Agreement on behalf of the Company. The foregoing certificate shall only be required to
be delivered on the First Closing Date, unless any information contained in the certificate has changed.
|
a.
|
Arbitration shall be final and binding on the parties.
|
b.
|
THE PARTIES ARE WAIVING THEIR RIGHT TO SEEK REMEDIES IN COURT, AND EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF
ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
|
c.
|
Pre-arbitration discovery is generally more limited and different from court proceedings.
|
d.
|
The arbitrator’s award is not required to include factual findings or legal reasoning and any party’s right to appeal or to seek modification of rulings by arbitrators is strictly limited.
|
e.
|
The panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry.
|
f.
|
All controversies which may arise between the parties concerning this Agreement shall be determined by arbitration pursuant to the rules then pertaining to the Financial Industry Regulatory
Authority in New York City, New York. Judgment on any award of any such arbitration may be entered in the Supreme Court of the State of New York or in any other court having jurisdiction of the person or persons against whom such award is
rendered. Any notice of such arbitration or for the confirmation of any award in any arbitration shall be sufficient if given in accordance with the provisions of this Agreement. The parties agree that the determination of the arbitrators
shall be binding and conclusive upon them. The prevailing party, as determined by such arbitrators, in a legal proceeding shall be entitled to collect any costs, disbursements and reasonable attorney’s fees from the other party. Prior to
filing an arbitration, the parties hereby agree that they will attempt to resolve their differences first by submitting the matter for resolution to a mediator, acceptable to all parties, and whose expenses will be borne equally by all
parties. The mediation will be held in the County of New York, State of New York, on an expedited basis. If the parties cannot successfully resolve their differences through mediation, within sixty (60) days from the receipt of written notice
of a controversy from the notifying party, the matter will be submitted for resolution by arbitration. The arbitration shall take place in the County of New York, State of New York, on an expedited basis.
|
If to the Company:
|
Entera Bio Ltd.
|
|
37 Walnut Street, Suite 300
|
|
Wellesley Hills, MA 02481
|
|
Attention: Adam Gridley, CEO
|
|
Email: adam@enterabio.com
|
With a copy to
|
Herzog Fox & Neeman
4 Weizmann Street
Tel Aviv 6423904 Israel
Yair Geva, Adv. or Tomer Farkash, Adv.
Email: gevay@hfn.co.il; farkasht@hfn.co.il
Facsimile: +972 3 6966464; and
Davis Polk & Wardwell LLP
|
(which shall not constitute notice)
|
450 Lexington Avenue
|
New York, NY 10017
|
|
|
Attention: Gil Savir, Esq.
|
|
Email: gil.savir@davispolk.com
|
If to GP Nurmenkari Inc.:
|
GP Nurmenkari Inc.
|
|
22 Elizabeth Street
|
SONO Square, Suite 1J
|
|
|
Norwalk, CT 06854
|
|
Attention: Robert Fitzpatrick, CCO
|
(which shall not constitute notice)
|
Lucosky Brookman LLP
|
|
101 Wood Avenue South
|
|
Woodbridge, NJ 08830
|
|
Attention: Scott Rapfogel, Esq.
Email: srapfogel@lucbro.com
|
a.
|
Subject to the consumption of the Initial Closing, and subject to the terms and conditions of this Section 25 and applicable securities laws, the
Company agrees that each Subscriber will be entitled to purchase its pro-rata portion of the New Securities offered by the Company to investors making a cash-investment in any private placement offering of the Company of more than $2,500,000
to be closed during a period of one year following the final Closing Date of this Offering (the “Applicable Period”). The rights granted under this Section 25 to Subscribers are personal to the
Subscribers and accordingly such rights cannot be transferred or assigned to any other party.
|
|
b.
|
The Company shall give notice (the “Offer Notice”) to each Eligible Subscriber, stating (i) its bona fide intention to offer such New
Securities, (ii) the number of such New Securities to be offered, and (iii) the price and terms, if any, upon which it proposes to offer such New Securities. By notification to the Company within five (5) days after the Offer Notice is given
(the “Offer Period”), each Eligible Subscriber may elect to purchase or otherwise acquire, at the price and on the terms specified in the Offer Notice, up to that portion of such New Securities
which equals to the proportion that the Securities actually purchased by such Eligible Subscriber in this Offering bears to the total Securities actually sold by the Company in this Offering.
|
c.
|
Notwithstanding any provision hereof to the contrary, in lieu of complying with the provisions of Section 25(b), the Company may elect to give notice to the Eligible Subscriber within thirty
(30) days after the issuance of New Securities. Such notice shall describe the type, price, and terms of the New Securities. Each Eligible Subscriber shall have ten (10) days from the date notice is given according to this subsection to elect
to purchase up to the number of New Securities that would, if purchased by such Eligible Subscriber, would preserve such Eligible Subscriber’s right to purchase its pro rata portion of the New Securities, calculated as set forth in Section
25(b).
|
|
|
d. |
The covenants set forth in this Section 25 shall terminate and be of no further force or effect upon the earlier of (i) the end of the Applicable Period, (ii) liquidation of the Company or
(iii) the closing of merger or consolidation of the Company in which the Company is a constituent party except any such merger or consolidation involving the Company in which the shares of capital of the Company outstanding immediately prior
to such merger or consolidation continue to represent, or are converted into or exchanged for shares of capital that represent, immediately following such merger or consolidation, at least a majority, by voting power, of the capital stock of
(1) the surviving or resulting corporation; or (2) if the surviving or resulting corporation is a wholly owned subsidiary of another corporation immediately following such merger or consolidation, the parent corporation of such surviving or
resulting corporation.
|
e.
|
If the offer to Eligible Subscribers under this Section 25 may, in the opinion of the Company’s counsel, constitute an offer to the public under the applicable securities laws which is
subject to prospectus or other requirements, then such offer shall be limited to the type of offerees the offering to which is exempted from such prospectus requirement, and no offering shall be made to any Eligible Subscriber until such
Eligible Subscriber shall have provided the Company during the Offer Period with the satisfactory evidence of its compliance with the applicable requirements under the securities laws.
|
|
f.
|
The Term “New Securities” shall mean the issuance and sale of the Company’s shares or equity securities or securities converted into equity
securities of the Company, and shall exclude for the avoidance of doubt, any of the following securities or issuances: (i) shares, options or convertible securities of the Company issued or granted as a dividend, bonus shares, stock split,
split-up or other similar distribution or recapitalization, to all shareholders or equity holders of the Company on a pro-rata basis, (ii) shares, options or convertible securities of the Company issued or granted to: (a) employees or
directors of, or consultants or advisors to, the Company or any of its subsidiaries pursuant (or any shares issued upon the exercise of such options) to the Company’s share option plans, or (b) finders, broker-dealers, underwriters, agents or
other similar entities assisting the Company with the sale or issuance of the equity securities of the Company, (iii) shares, options, rights or convertible securities of the Company actually issued upon the exercise of options, warrants or
shares of the Company issued upon the conversion or exchange of convertible securities existing prior to the date of the Initial Closing, in each case provided such issuance is pursuant to the terms of such options or convertible securities,
(iv) shares, options or convertible securities of the Company issued as acquisition consideration pursuant to the acquisition of another corporation by the Company by merger, purchase of substantially all or majority of the assets or other
reorganization or to a joint venture agreement approved by the Board, (v) shares, options or convertible securities of the Company issued in connection with sponsored research, collaboration, technology or patent license, development, OEM,
marketing, settlement of claims, or other similar agreements or strategic partnerships approved by the Board, (vi) Securities issued or sold according to the terms of this Offering, or (vii) any issuance in which Eligible Subscribers
purchasing 60% of the Securities purchased by the Eligible Subscribers in this Offering have agreed in writing to exclude such issuance of new securities from the right of offer under this Section 25.
|
a.
|
This Agreement, together with the Registration Rights Agreement, the Securities, the Escrow Agreement, and any confidentiality agreement between the Subscriber and the Company, constitutes
the entire agreement between the Subscriber and the Company with respect to the Offering and supersedes all prior oral or written agreements and understandings, if any, relating to the subject matter hereof. Any term of this Agreement may be
amended and the observance of any term hereof may be waived (either prospectively or retroactively and either generally or in a particular instance) only with the written consent of (i) the Company, (ii) holders of 60% of the Purchase Price
by the Subscribers actually investing in this Offering, and (iii) the Placement Agent (the “Majority Subscribers”), provided however that (i) no Subscriber shall be required to increase its
respective Purchase Price or to make any additional representations or warranties without its prior written consent, and (ii) any amendment or waiver that would adversely and directly affect any Subscribers in a disproportionate
manner relative to other Subscribers shall not be effective against the Subscribers without the prior written consent of the Subscriber (it is agreed that the mere fact that that each Subscriber has provided the Company with a different
portion of the Purchase Price, shall not be deemed by itself to adversely affect the rights of such Subscribers in the context of amendment or waiver).
|
b.
|
This Agreement may be executed in one or more original or facsimile or by an e-mail which contains a portable document format (.pdf) file of an executed signature page counterparts, each of
which shall be deemed an original, but all of which shall together constitute one and the same instrument and which shall be enforceable against the parties actually executing such counterparts. The exchange of copies of this Agreement and of
signature pages by facsimile transmission or in .pdf format shall constitute effective execution and delivery of this Agreement as to the parties and may be used in lieu of the original Agreement for all purposes. Signatures of the parties
transmitted by facsimile or by e-mail of a document in pdf format shall be deemed to be their original signatures for all purposes.
|
c.
|
Each provision of this Agreement shall be considered separable and, if for any reason any provision or provisions hereof are determined to be invalid or contrary to applicable law, such
invalidity or illegality shall not impair the operation of or affect the remaining portions of this Agreement.
|
d.
|
Paragraph titles are for descriptive purposes only and shall not control or alter the meaning of this Agreement as set forth in the text.
|
e.
|
The Subscriber understands and acknowledges that there may be multiple Closings for the Offering.
|
f.
|
The Subscriber hereby agrees to furnish the Company such other information as the Company may request prior to the applicable Closing or reasonably request following post the request Closing
with respect to its subscription hereunder.
|
|
ENTERA BIO LTD
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
Name: Adam Gridley
Title: Chief Executive Officer |
|
1.
|
Date and Fill in the dollar amount of Securities being purchased and complete and sign the Omnibus Signature
Page.
|
2.
|
Initial the Accredited Investor Certification in the appropriate place or places.
|
3.
|
Complete and sign the Investor Profile.
|
4.
|
Complete and sign the Anti-Money Laundering Information Form.
|
5.
|
Date and sign the Confidentiality Agreement.
|
6.
|
Fax or email all forms and then send all signed original documents to your registered representatives office:
|
GP Nurmenkari Inc.
Attn: Aaron Segal
122 East 42nd Street, Suite 1616
New York, NY 10168
Facsimile Number: 212.661.8786
Telephone Number: 212.612.3219
E-mail address: ams@intuitivevp.com
|
7.
|
If you are paying the Purchase Price by check, a certified or other bank check for the exact dollar amount of the Purchase Price for the
Securities you are purchasing should be made payable to the order of “Delaware Trust Company, as Escrow Agent for Entera Bio Ltd, Acct. # *********” and should be sent directly to Delaware Trust
Company, 251 Little Falls Drive, Wilmington, DE 19808, Attn: Trust Administration.
Checks take up to 5 business days to clear. A check must be received by the Escrow Agent at least 6 business days before the closing date.
|
8.
|
If you are paying the Purchase Price by wire transfer, you should send a wire transfer for the exact dollar amount of the Purchase Price for the
Notes you are purchasing according to the following instructions:
|
Bank:
|
US Bank
5065 Wooster Road
Cincinnati, OH 45226
|
ABA Routing #:
|
***********
|
SWIFT CODE:
|
***********
|
Account Name:
|
Delaware Trust Company
|
Account #:
|
***********
|
Reference:
|
************
[INSERT SUBSCRIBER’S NAME]”
|
_________________________
|
$_______________
Total Purchase Price
|
SUBSCRIBER (individual)
|
|
SUBSCRIBER (entity)
|
|
|
|
Signature
|
|
Name of Entity
|
|
|
|
|
|
By:__________________________________________
|
Print Name
|
|
Signature
|
|
|
|
|
|
Print Name:
|
Signature (if Joint Tenants or Tenants in Common)
|
|
Title:
|
|
|
|
Address of Principal Residence:
|
|
Address of Executive Offices:
|
|
|
|
|
|
|
|
|
|
|
|
|
Social Security Number(s):
|
|
IRS Tax Identification Number:
|
|
|
|
|
|
|
Telephone Number:
|
|
Telephone Number:
|
|
|
|
|
|
|
Facsimile Number:
|
|
Facsimile Number:
|
|
|
|
|
|
|
E-mail Address:
|
|
E-mail Address:
|
|
Please also execute the incumbency certificate attached hereto as Schedule 5
|
|
|
|
|
a.
|
funds deposited in escrow as described in Section 2(b) below and equal at least the Minimum Offering, and corresponding documentation with respect to such amounts has
been delivered by the Subscriber and other “Subscribers” under Subscription Agreements of like tenor with this Agreement (collectively, the “Subscribers”) as described in Section 2(a) below; and
|
b.
|
the other conditions set forth in Sections 7 and 8 below shall have been satisfied.
|
a.
|
Subscription Documents. On or before the applicable Closing Date, Subscriber shall review, complete and execute the Omnibus Signature Page to
this Agreement, the Investor Profile, Anti-Money Laundering Form and Accredited Investor Certification, each attached hereto following the Omnibus Signature Page (collectively, the “Subscription
Documents”), and deliver the Subscription Documents to the Company at the address set forth under the caption “How to subscribe for Securities in the private offering of Entera Bio Ltd.”
below. Executed documents may be delivered by the PA Subscriber to the Placement Agent that introduced them to the Offering by facsimile or electronic mail (e-mail), if the Subscriberdelivers the original copies of the documents to such
Placement Agent as soon thereafter as is practicable and such Placement Agent shall, in turn, deliver the documents to the Company.
|
b.
|
Purchase Price. Simultaneously with the delivery of the Subscription Documents to the Company as provided herein, and in any
event on or prior to the applicable Closing Date, the Subscriber shall deliver to Delaware Trust Company, in its capacity as escrow agent (the “Escrow Agent”), under an escrow agreement among
the Company, the Placement Agents (as defined below), the Subscribers and the Escrow Agent (the “Escrow Agreement”), the full Purchase Price by certified or other bank check or by wire
transfer of immediately available funds, pursuant to the instructions set forth under the caption “How to subscribe for Securities in the private offering of Entera Bio Ltd..” below. Such funds will
be held for the Subscriber’s benefit and will be returned promptly, without interest or offset, if this Subscription Agreement is not accepted by the Company or the Offering is terminated pursuant to its terms by the Company prior to the
Closing on such subscription; provided however that with respect to a Closing subsequent to the Initial Closing involving only Non- PA Subscribers, such Non-PA Subscribers shall be entitled to transfer their applicable portion of the
Purchase Pricedirectly to the Company’s bank account.
|
c.
|
Company Discretion. The Subscriber understands and agrees that the Company in its sole discretion reserves the right to accept or
reject this or any other subscription for Securities, in whole or in part, notwithstanding prior receipt by the Subscriber of notice of acceptance of this subscription. The Company shall have no obligation hereunder until the Company shall
execute and deliver to the Subscriber an executed copy of this Agreement. Upon each Closing, the Company shall provide a written notice of the final amount actually accepted by the Company from the Subscribers in such Closing. If this
subscription is rejected in whole, or the Offering is terminated, all funds received from the Subscriber will be returned without interest or offset, and this Agreement shall thereafter be of no further force or effect. If this subscription
is rejected in part, the funds for the rejected portion of this subscription will be returned withoutinterest or offset, and this Agreement will continue in full force and effect to the extent this subscription was accepted.
|
a.
|
Organization and Qualification. The Company is a corporation duly organized and validly existing under the laws of the State of Israel, has all requisite corporate power and
authority to carry on its business as presently conducted and as proposed to be conducted, and is qualified and in good standing as a foreign corporation in each jurisdiction in which the nature of the business conducted by the Company or
the property owned or leased by the Company requires suchqualification, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect (as defined below). The Company has no
subsidiaries other than Entera Bio Inc., a Delaware corporation.
|
b.
|
Authorization, Enforcement, Compliance with Other Instruments. (i) The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement, the
Registration Rights Agreement, the Warrants, the Escrow Agreement and each of the other agreements and documents that are exhibits hereto or thereto or are contemplated hereby or thereby or necessary or desirable to effect the
transactions contemplated hereby or thereby (the “Transaction Documents”) and to issue the Securities, the Ordinary Shares issuable upon exercise of the Warrants (the “Warrant Shares”), and the securities issuable to the Placement Agent in accordance with the terms hereof and thereof, (ii) the execution and delivery by the Company of each of the
Transaction Documents and the consummation by it of the transactions contemplated hereby and thereby, including, without limitation, the issuance of the Securities, the Warrant Shares and the securities issuable to the Placement
Agent, have been, or will be at the time of execution of such Transaction Document, duly authorized by the Company’s board of directors (the “Board”), and no further consent or
authorization is, or will be at the time of execution of such Transaction Document, required by the Company, its Board of Directors or its shareholders, provided however that with respect to any subscription and/or Closing to made
under this Agreement by a Subscriber which is qualified as a controlling shareholder or controlling shareholders of the Company (in accordance with the terms of the Israeli Companies Law 5759-1999 and the applicable rules and
regulations thereunder (the “Companies Law”)) with an interest respect to the transactions contemplated by this Agreement, will also have to be approved by the audit committee of the
Company and the Company’s shareholders in accordance with the Companies Law, (iii) each of the Transaction Documents will be duly executed and delivered by the Company, (iv) the Transaction Documents when executed and delivered by the
Company and each other party thereto will constitute the valid and binding obligations of the Company enforceable against the Company in accordance with their terms, except as such enforceability may be limited by general principles
of equity (regardless of whether such enforceability is considered a proceeding at law or in equity), or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally,
the enforcement of creditors’ rights and remedies now or hereafter in effect, including the effect of statutory and other laws regarding fraudulent conveyances and preferential transfers, and except that no representation is made
herein regarding the enforceability of the Company’s obligations to provide indemnification and contribution remedies under applicable securities laws.
The Transaction Documents have been prepared in conformity with all applicable laws and in compliance with Regulation D and/or Section 4(a)(2) of the Securities Act and the requirements of all other rules
and regulations of the Securities and Exchange Commission related to offerings of the type contemplated by the Offering and the applicable securities laws and the rules and regulations of those jurisdictions wherein the Securities are
to be offered and sold. Assuming the accuracy of the representations and warranties of the Subscribers contained in Section 5(a) through 5(c) hereof, the Securities will be offered and sold pursuant to the registration exemption
provided by Regulation D and/or Section 4(a)(2) of the Securities Act and the requirements of any applicable state securities laws. To the knowledge of the Company, the Transaction Documents do not include any untrue statement of a
material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
To the extent the Offering is conducted on a Regulation D basis (i) none of Company, nor to the knowledge of the Company, any of its directors, executive officers, other officers of the Company
participating in the Offering, any beneficial owner of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the
Securities Act) connected with the Company in any capacity at the time of sale (each an “Issuer Covered Person”) is subject to any “Bad Actor”
disqualifications described in Rule 506 (d)(1)(i)-(viii) under the Securities Act (a “Disqualification Event”), (ii) the Company has exercised reasonable care to determine whether any
Issuer Covered person is subject to a Disqualification Event and (iii)the Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e).
|
c.
|
Capitalization. The authorized capital stock of the Company consists of 140,010,000 Ordinary Shares. As of thecommencement of the initial Closing of the Offering, the Company has such
number of Ordinary Shares issued and outstanding as set forth under “Pro Forma Capitalization” in Schedule 4c. All of the outstanding Ordinary Shares have been duly authorized, validly issued and are fully paid and
nonassessable. Immediately after giving effect to the closing of the Minimum Offering or the Maximum Offering, the pro forma outstanding capitalization of the Company will be as set forth under “Pro Forma Capitalization” in Schedule
4c. On or prior to the date hereof and on or prior to the applicable Closing Date, (i) except as set forth in Schedule 4c, no Ordinary Shares will be subject to preemptive rights or any other similar rights or any liens or
encumbrances suffered or permitted by the Company; (ii) except as set forth in Schedule 4c, there will be no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating
to, or securities or rights convertible into, any Ordinary Shares, or contracts, commitments, understandings or arrangements by which the Company is or may become bound to issue additional Ordinary Shares or to pay any dividend or make
any distribution in respect thereto; (iii) there will be no outstanding convertible debt securities of the Company other than the indebtedness as set forth in Schedule 4c; (iv) except as set forth in Schedule 4c, other
than pursuant to the Registration Rights Agreement, there will be no agreements or arrangements under which the Company is obligated to register the sale of any of its securities under the Securities Act; (v) except as set forth in Schedule
4c, there will be no securities or instruments of the Company containing anti-dilution or similar provisions, including the right to adjust the exercise, exchange or reset price under such securities; and (vi) except as set forth
in Schedule 4c, no co-sale right, right of first refusal or other similar right will exist with respect to the Securities (or will exist with respect to the Warrant Shares) or the issuance and sale thereof.
|
d.
|
Issuance of Securities. Prior to the initial Closing, the Securities, the Warrant Shares and the securities to be issued to the Placement Agent will have been duly authorized and, upon issuance
in accordance with the terms hereof (including full payment), shall be duly issued, fully paid and nonassessable, and shall be free from all liens and charges with respect to the issuance thereof.
|
e.
|
No Conflicts. None of the execution and delivery of or performance by the Company under each Transaction Document or the consummation of the transactions contemplated by the Transaction Documents
(including the issuance and sale of the Securities, the Broker Warrants and Warrant Shares) conflicts with or violates, or causes a default under (with our without the passage of time or the giving of notice), or will result in the
creation or imposition of, any lien, charge or other encumbrance upon any of material assets of the Company under any material agreement, evidence of indebtedness, joint venture, commitment or other material instrument to which the
Company is a party or by which the Company or its assets may be bound, any statute, rule, law or governmental regulation applicable to the Company, or any term of the Company’s Articles of Association as in effect on the date hereof
or any Closing Date for the Offering, or any license, permit, judgment, decree, order, statute, rule or regulation applicable to the Company or any of its assets, except in the case of a conflict, violation, lien, charge or other
encumbrance (except as reflected in the Company’s Articles of Association or the Transaction Documents) which would not, or could not reasonably be expected to, have a material adverse effect on the assets, liabilities, business,
condition (financial or otherwise) or results of operations of the Company or its ability to perform its obligations under this Agreement and the other Transaction Documents (a “Material Adverse
Effect”). Except as described herein and for the filing of reports and undertakings with the Israeli National Technological Innovation Authority, formerly known as the Office of Chief Scientist, the notice to the
Israeli Registrar of Companies as may be required by law, if any, and notices to NASDAQ as required by NASDAQ rules, no consent, approval, authorization or other order of, or registration, qualification or filing with, any
regulatory body, administrative agency, or other governmental body is required for the execution and delivery of the Transaction Documents and the valid issuance or sale of the Securities, the Warrant Shares, and the securities to
be issued to the Placement Agent other than such as have been made or obtained and that remain in full force and effect, and except for the filing of a Form D, to the extent applicable, or any filings required to be made under the
Securities Act (including Forms 6-K) or state securities laws or foreign laws, as applicable, which shall be filed by the Company or any consents, approvals, authorizations, orders, registrations, qualifications or filings the
failure to make or obtain would, or could reasonably be expected to, have a Material Adverse Effect. Except those which could not reasonably be expected to have a Material Adverse Effect, the Company is not in violation of any term
of or in default under its Articles of Association. Except those which could not reasonably be expected to have a Material Adverse Effect, or as otherwise set forth in Schedule 4c, the Company is not in violation of any term
of or in default under any material contract, agreement, mortgage, indebtedness, indenture, instrument, judgment, decree or order or any statute, rule or regulation applicable to the Company. The business of the Company is not being
conducted in violation of any material law, ordinance, or regulation of any governmental entity, except for any violation which could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
|
f.
|
Financial Statements; SEC Reports. The Company’s financial statements for the year ended December 31, 2018, as filed with the Company’s Annual Report on Form 20-F for the fiscal year ended
December 31, 2018, and the quarter ended September 30, 2019, as filed with the Securities and Exchange Commission ( the “SEC”) on November 21, 2019, as Exhibit 99.1 to the Company’s
Form 6-K, together with related notes, if any, present fairly, in all material respects, the financial position of the Company as of the dates specified and the results of operations for the periods covered thereby as of such dates
(the “Financial Statements”). Such Financial Statements and related notes were prepared in accordance with International Accounting Standards Board accounting principles as issued by
the International Financial Reporting Standards (“IFRS”) and applied on a consistent basis throughout the periods indicated. During the period of engagement of the Company’s
accountants, there have been no disagreements with the accounting firm and the Company on any matters of accounting principles or practices, financial statement disclosure or auditing scope or procedures. The Company has made and
kept books and records and accounts which are in reasonable detail and which fairly and accurately reflect the activities of the Company in all material respects, subject only to year-end adjustments. Except as set forth in such
Financial Statements or otherwise disclosed in Schedule 4f, the Company has no knowledge of any unpaid material single liability of any kind, whether accrued, absolute or contingent, or otherwise, in any event above an amount of
$100,000 for each such single liability, but excluding any liability incurred in the ordinary course of business or any liability that is not required to be reflected in the Financial Statements according to IFRS.
The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section
13(a) or 15(d) thereof for the two years preceding the date hereof (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”). As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and Exchange Act, as applicable, and none of
the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances
they were made, not misleading.
|
g.
|
Absence of Litigation. Except as set forth in Schedule 4g or as described in the Company’s Form 20-F for fiscal year ended December 31, 2018, to the knowledge of the Company, there
are no actions, suits, claims, hearings, proceedings, inquiries or investigations pending before or by any court, public board, governmental or administrative agency, arbitrator, self-regulatory organization or body or, to the
knowledge of the Company, threatened, against the Company, or involving its assets or any of its officers or directors (in their capacity as such) which, if determined adversely to the Company or such officer or director, could
reasonably be expected to have a Material Adverse Effect or adversely affect the transactions contemplated by this Agreement and the other Transaction Documents or the enforceability thereof. The Company is not subject to any
injunction, judgment, decree or order of any court, regulatory body, arbitration panel, administrative agency or other governmental body.
|
h.
|
Acknowledgment Regarding Subscriber’s Purchase of the Securities. The Company acknowledges that each Subscriber is not acting as a financial advisor or fiduciary of the Company (or in any
similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby and thereby and any advice given by such Subscriber or any of their respective representatives or agents in connection with the
Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to such Subscriber’s purchase of the Securities (and the Warrant Shares, if applicable). The Company further represents to the
Subscribers that the Company’s decision to enter into the Transaction Documents has been based solely on the independent evaluation by the Company and its representatives.
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i.
|
No Directed Selling Efforts. None of the Company, its affiliates or any person acting on its or their behalf has engaged or will engage in any directed selling efforts (within the meaning of
Regulation S) with respect to the Securities and the Company and its affiliates and any person acting on its or their behalf have complied and will comply with the offering restrictions requirement of Regulation S.
|
j.
|
Regulation S. The Company and its affiliates and any person acting on its or their behalf in the context of the issue of the Bonds have complied with and will comply with
the offering restrictions as defined and required under Regulation S. The Company acknowledges and agrees it has offered and sold the Securities, and will offer and sell the Securities (i) as part of its distribution at any time
and (ii) otherwise until 40 days after the later of the commencement of the offering and the Closing Date, only in accordance with Rule 903 of Regulation S.
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k.
|
No General Solicitation. Neither the Company, nor any of its affiliates, nor, to the knowledge of the Company, any person acting on its or their behalf, has engaged or
will engage in any form of general solicitation or general advertising (within the meaning of Regulation D of the Securities Act) in connection with the offer or sale of the Securities.
|
l.
|
No Integrated Offering. Neither the Company, nor any of its affiliates, nor, to the knowledge of the Company, any person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would require registration of the Securities or Warrant Shares under the Securities Act or cause this
offering of Securities to be integrated with prior offerings by the Company for purposes of the Securities Act.
|
m.
|
Employee Relations. The Company is not a party to any collective bargaining agreement, except for those provisions of general agreements between any employers’ or
employees’ union and organization which are applicable by extension order to all employees in Israel or to all companies in the same industry of the Company in Israel. The Company believes that its relations with its employees
are good. No current executive officer or key employee of the Company has notified the Company that such officer or key employee, as applicable, intends to leave the Company or otherwise terminate such officer’s or key
employee’s employment with the Company. No executive officer or key employee of the Company, to the knowledge of the Company, is in violation of any material term of any employment contract, confidentiality, disclosure or
proprietary information agreement, non-competition agreement, or any other contract or agreement with the Company. The Company is in compliance with all Israeli laws and regulations involving labor, employment and employment
practices and benefits, terms and conditions of employment and wages and hours, except where the failure to be in compliance would not, either individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect.
|
n.
|
Intellectual Property Rights. Except as described in Schedule 41, or as described in the Company’s Form 20-F for fiscal year ended December 31, 2018 or where it would not reasonably
be expected to result in a Material Adverse Effect, (i) to the knowledge of the Company, the Company has ownership, or licenses or legal rights to use all patents, copyrights, trade secrets, trademarks, trade names or other
proprietary rights (collectively, “Intellectual Property”) used in the business of the Company, (ii) the Company believes it has taken all reasonable steps required in accordance
with sound business practice and business judgment to establish and preserve its ownership of all Intellectual Property owned by the Company and related to its products and technology, (iii) to the knowledge of the Company,
there is no infringement of the Intellectual Property owned by the Company by any third party, (iv) to the knowledge of the Company, the present business, activities and products of the Company do not infringe any Intellectual
Property of any other person, (v) there is no proceeding charging the Company with infringement of any Intellectual Property adversely held by a third party which has been filed, (vi) no proceedings have been instituted or are
pending or, to the knowledge of the Company, threatened, which challenge the rights of the Company to the use of the Intellectual Property owned by or licensed to the Company, (vii) the Intellectual Property owned by the
Company, and to the knowledge of the Company, the Intellectual Property licensed to the Company, has not been adjudged invalid or unenforceable, in whole or in part and there is no pending or, to the knowledge of the Company,
threatened proceeding by others challenging the validity or scope of any such Intellectual Property, and the Company is unaware of any facts which are reasonably likely to form a basis for any such claim, (viii) to the
knowledge of the Company, the Company is not making unauthorized use of any confidential information or trade secrets of any person, (ix) to the knowledge of the Company, the activities of any of the employees on behalf of the
Company do not violate any agreements between such employees and third parties relating to confidential information or trade secrets of such third parties or that restrict any such employee’s engagement with the Company, (x)
each employee or consultant of the Company that is involved in the development of Intellectual Property for the Company is a party to a written contract with the Company that assigns to the Company all rights to all
inventions, improvements, discoveries and information relating to the Company and (xi) all licenses or other agreements under which (A) the Company has obtained rights to use Intellectual Property, or (B) the Company has
granted rights to others to use Intellectual Property owned by or licensed to the Company are in full force and effect, and there is no default (and there exists no condition which, with the passage of time or otherwise, would
constitute a default by the Company) by the Company with respect thereto. Notwithstanding the foregoing, it is hereby clarified that the Company has received grants from the Israeli National Technological Innovation Authority
(formerly known as the Office of Chief Scientist), and accordingly the Company is subject to the Israel’s Encouragement of Research and Development Law, 1984 (the “R&D Law”) and the applicable rules and regulations as
described in details in the Company’s Form 20-F for fiscal year ended December 31, 2018.
|
o.
|
Environmental Laws.
|
(i)
|
The Company has complied with all applicable Environmental Laws (as defined below), except for violations of Environmental Laws that,
individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect. There is, to the knowledge of the Company, no pending or threatened civil or criminal litigation, written notice of
violation, formal administrative proceeding, or investigation, inquiry or information request, relating to any Environmental Law involving the Company or any subsidiary of the Company, except for litigation, notices of violations, formal
administrative proceedings or investigations, inquiries or information requests that, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect. For purposes of this Agreement, “Environmental Law” means any national, state, provincial or local law, statute, rule or regulation or the common law relating to the environment or occupational health and safety, including
without limitation any statute, regulation, administrative decision or order pertaining to (i) treatment, storage, disposal, generation and transportation of industrial, toxic or hazardous materials or substances or solid or hazardous
waste; (ii) air, water and noise pollution; (iii) groundwater and soil contamination; (iv) the release or threatened release into the environment of industrial, toxic or hazardous materials or substances, or solid or hazardous waste,
including without limitation emissions, discharges, injections, spills, escapes or dumping of pollutants, contaminants or chemicals; (v) the protection of wild life, marine life and wetlands, including without limitation all endangered and
threatened species; (vi) storage tanks, vessels, containers, abandoned or discarded barrels, and other closed receptacles; (vii) health and safety of employees and other persons; and (viii) manufacturing, processing, using, distributing,
treating, storing, disposing, transporting or handling of materials regulated under any law as pollutants, contaminants, toxic or hazardous materials or substances or oil or petroleum products or solid or hazardous waste.
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(ii)
|
To the knowledge of the Company there is no material environmental liability with respect to any solid or hazardous waste transporter or treatment, storage or disposal facility that has been
used by the Company or any subsidiary of the Company.
|
(iii)
|
The Company has received all permits, licenses or other approvals required of it under applicable Environmental Laws to conduct its businesses and is in compliance, in all material respects,
with all terms and conditions of any such permit, license or approval.
|
p.
|
Permits; Regulatory Compliance. Except as disclosed in the Company’s Form 20-F for the fiscal year ended December 31, 2018 or except as disclosed in Schedule 4n, the Company does
not own any equity interest and has not made any loans or advances to or guarantees of indebtedness to any person, corporation, partnership or other entity and is not a party to any joint venture, other than travel advances
and expenses made in the ordinary course of business. Except as disclosed in Schedule 4n of the Disclosure Schedule or as disclosed in the Company’s Form 20-F for the fiscal year ended December 31, 2018 and any 6-K
filed thereafter, to the knowledge of the Company, the conduct of business by the Company as presently and proposed to be conducted is not subject to continuing oversight, supervision, regulation or examination by any
governmental official or body of the United States, or any other jurisdiction wherein the Company conducts or proposes to conduct such business, except (i) for the applicable laws, rules and regulations governing the drug and
medical industry, including the Food and Drug Administration (the “FDA” or “USFDA”), and other similar laws, rules and regulations
or other agencies, and governmental authorities around the world applicable to the Company or to its products, (ii) as described in the Subscription Documents and except as such regulation is applicable to commercial
enterprises generally, applicable to the industry of the Company or to all companies in Israel or biomed companies in general. The Company has obtained all material licenses, permits and other governmental authorizations
necessary to conduct its business as presently conducted, except where the failure to do so would not be reasonably expected to cause a Material Adverse Effect. The Company has not received any notice of any violation of, or
noncompliance with, any material federal, state, local or foreign laws, ordinances, regulations and orders (including, without limitation, those relating to environmental protection, occupational safety and health, securities
laws, equal employment opportunity) applicable to its business, the violation of, or noncompliance with, would have a Material Adverse Effect, and the Company knows of no facts or set of circumstances which could give rise to
such a notice.
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q.
|
Title. The Company owns no real property. Except as set forth in Schedule 4o or in the Company’s Form 20-F for the fiscal year ended December 31, 2018 and the Company’s Form
6-K, which included financial statements for the quarter ended September 30, 2019, as filed with the SEC on November 21 ,2019, as Exhibit 99.1, together with related notes, the Company has good and marketable title to all
of its personal property and assets free and clear of any material restriction, mortgage, deed of trust, pledge, lien, security interest or other charge, claim or encumbrance which would have a Material Adverse Effect.
With respect to properties and assets it leases, except as set forth in Schedule 4o or in the Company’s Form 20-F for the fiscal year ended December 31, 2018, the Company is in material compliance with such leases
and holds a valid leasehold interest free of any liens, claims or encumbrances which would have a Material Adverse Effect.
|
r.
|
Shell Company Status. The Company is not and has never been a “shell company” as such term is defined in Section 405 of the Securities Act.
|
s.
|
No Material Adverse Breaches, etc. The Amended Articles of Association of the Company filed as Exhibit 3.2 to the Company’s Annual Report on Form 20-F for the fiscal year ended
December 31, 2018, as such articles were amended on the extraordinary general meeting of shareholders of the Company on October 3, 2019, is a true, correct and complete copy of the Amended and Restated Articles of
Association of the Company, as in effect on the date hereof. Any subsequent amendments thereto prior to the initial or any subsequent Closings will be promptly provided to all Subscribers. The Company is not (i) in
violation of its Articles of Association; (ii) to the knowledge of the Company, in default under any material contract, indenture, mortgage, note, loan agreement, security agreement, lease, alliance agreement, joint
venture agreement or other agreement, license, permit, consent, approval or instrument to which the Company is a party or by which it is or may be bound or to which any of its assets may be subject, the default of which
can be reasonably expected to have a Material Adverse Effect; (iii) in violation of any statute, rule or regulation applicable to the Company, the violation of which would have a Material Adverse Effect; or (iv) in
violation of any judgment, decree or order of any court or governmental body having jurisdiction over the Company and specifically naming the Company, which violation or violations individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
|
t.
|
Tax Status. The Company has made and filed, or filed appropriate extensions for, all applicable material federal, state and local income tax returns and all other
reports and declarations required by Israel and any other jurisdictions to which it is subject and (unless and only to the extent that the Company has set aside on its books provisions reasonably adequate for the payment
of all unpaid and unreported taxes) has paid all material taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except
those being contested in good faith and has set aside on its books, provisions reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply.
There are no unpaid taxes in any material amount claimed to be due from the Company by the taxing authority of Israel or any other jurisdiction, and officers of the Company know of no basis for any such claim.
|
u.
|
Rights of First Refusal. Except as set forth herein or in Schedule 4s or in the Company’s Form 20-F for the fiscal year ended December 31, 2018, there
are no outstanding rights of first refusal or participation rights with respect to the offering of Company securities.
|
v.
|
Reliance. The Company acknowledges that the Subscribers are relying on the representations and warranties made by the Company hereunder and that such
representations and warranties are a material inducement to the Subscriber purchasing the Securities. The Company further acknowledges that without such representations and warranties of the Company made hereunder,
the Subscribers would not enter into this Agreement.
|
w.
|
Brokers’ Fees. The Company does not have any liability or obligation to pay any fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement, except for the payment of fees to the Placement Agent, as specified in Section 3 above.
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x.
|
Insurance. The Company has insurance policies of the type and in amounts that the Company reasonably believes are adequate for its business. There is no
material claim pending under any such policy as to which coverage has been questioned, denied or disputed by the underwriter of such policy.
|
y.
|
Material Changes. Since September 30,2019, the Company has operated its business in the normal course and, except as specifically disclosed in Schedule
4w, (i) there have been no events, occurrences or developments that have had or would reasonably be expected to have a Material Adverse Effect with respect to the Company, (ii) the Company has not
incurred any material liabilities (contingent or otherwise) other than (A) trade payables, accrued expenses and other liabilities incurred in the ordinary course of business consistent with past practice and
(B) liabilities not required to be reflected in the Financial Statements of the Company, (iii) the Company has not materially altered its method of accounting or the manner in which it keeps its accounting
books and records, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its shareholders or purchased, redeemed or made any agreements to purchase or redeem any
shares of its capital stock, (v) the Company has not issued any equity securities to any officer, director or affiliate, except Ordinary Shares issued in the ordinary course pursuant to existing Company stock
option or stock purchase plans or executive and director corporate arrangements, and (vi) there has not been any change or amendment to, or any waiver of any material right under, any material contract under
which the Company, or any of its assets are bound or subject.
|
z.
|
Transactions With Affiliates, Shareholders and Employees. Except as set forth in Section 7.B of the Company’s Annual Report on Form 20-F for the fiscal
year ended December 31, 2018 and the Company’s Form 6-K, which included financial statements for the quarter ended September 30, 2019, as filed with the SEC on November 21 ,2019, as Exhibit 99.1 or in Schedule
4x, none of the officers, directors or principal (10% or greater) shareholders of the Company, including affiliates of such parties, and, to the Company’s knowledge, none of the employees of the Company,
including affiliates of such employees, is a party to any transaction with the Company or to a transaction contemplated by the Company (other than for services as employees, officers and directors) that are
required to be disclosed by the Company pursuant to item 7 of Form 20-F promulgated under the Securities Act, if applicable, except as contemplated by the Transaction Documents.
|
aa.
|
Off-Balance Sheet Arrangements. The Company has no off-balance sheet transactions or arrangements.
|
bb. |
Investment Company. The Company is not required to be registered as, and is not an affiliate of, and as the result of the transactions contemplated by the Offering will
not be required to register as, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
|
cc. |
Foreign Corrupt Practices. The Company is not (a) a person that is the subject of any sanctions administered by the U.S. Treasury Department’s
Office of Foreign Assets Control or the U.S. Commerce Department (collectively, “Sanctions”) or, to the best of the Company’s knowledge, in violation of any
regulations of such entities. Each of the Company, and to its knowledge, its respective officers, directors, managers, or employees, is in compliance, in all material respects, with applicable: (a)
anti-bribery laws, including but not limited to, the U.S. Foreign Corrupt Practices Act of 1977, as amended, or any other law, rule or regulation of similar purposes and scope applicable to the Company, (b)
anti-money laundering laws, including the Bank Secrecy Act, as amended by the USA PATRIOT Act of 2001 (signed into law October 26, 2001), or (c) Sanctions. Neither the Company nor, to its knowledge, any
director, officer, employee or other person acting on behalf of the Company has, in the course of its actions for, or on behalf of, the Company (i) used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expenses relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate
funds; or (iii) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee of such government official.
|
` | dd. |
Material Contracts. All of the Company’s contracts involving an amount in excess of $150,000 (the “Material Contracts”) have been filed with the SEC except as described in Schedule 4bb. There are no Material Contracts
that are not in written form. Neither the Company, nor to the Company’s knowledge, as of the date of this Agreement has any other party to a Material Contract breached, violated or defaulted under, or
received notice that it has breached, violated or defaulted under, any of the terms or conditions of any Material Contract in such manner as would permit any other party to cancel or terminate any such
Material Contract, or would permit any other party to seek damages that constitutes a Material Adverse Effect. As of the date of this Agreement, each Material Contract is valid, binding, enforceable and in
full force and effect, subject to: (i) laws of general application relating to bankruptcy, insolvency and the relief of debtors; and (ii) rules of law governing specific performance, injunctive relief and
other equitable remedies.
|
ee. |
Undisclosed Liabilities. As of the date of this Agreement, the Company has no liabilities, except for: (i) liabilities identified in the Company
balance sheet included with Financial Statements; (ii) normal and recurring current liabilities that have been incurred by the Company since the date of such balance sheet in the ordinary course of business
and that are not in excess of $150,000 in the aggregate; (iii) liabilities for performance in the ordinary course of business of obligations of the Company under Company contracts, including the reasonably
expected performance of such Company contracts in accordance with their terms (which would not include, for example, any instances of breach or indemnification); and (iv) liabilities described in Schedule
4cc.
|
ff. |
Registration Rights. Each Subscriber investing in this Offering shall be
entitled to registration rights according to the terms and conditions of the Registration Rights Agreement annexed hereto as Exhibit B.
For the full terms of the registration rights, Subscribers should review the Registration Rights Agreement. Pursuant to such Registration Rights Agreement, generally, within 7 months of the Final Closing, the
Company will file a registration statement on Form F-3 (or S-3, as applicable) (the “Registration Statement”)
covering all of the Ordinary Shares issued or issuable in connection with the Offering (including those issuable upon exercise of the Warrants and Broker Warrants) and such other Company securities that the
Company finds necessary in its sole discretion and will use its reasonable best efforts to have the Registration Statement declared effective as soon as practicable following such filing. In the event of any
inconsistencies between this section 4(dd) and the terms of the Registration Rights Agreement, the terms set forth in the Registration Rights Agreement shall be controlling.
|
gg. |
Reserved.
|
hh. |
No Other Representations or Warranties. Except for the representations and warranties of the Company contained in this Agreement, the Company is not
making and has not made, and no other person is making or has made on behalf of the Company, any express or implied representation or warranty to prospective Subscribers in connection with this Agreement or
the transactions contemplated hereby, and no third party is authorized to make any such representations and warranties on behalf of the Company.
|
a. |
Investment Purpose. The Subscriber is, and will be, acquiring the Securities and Warrant Shares, for its own account for investment only and not with
a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted under the Securities Act; provided, however, that by making the
representations herein, such Subscriber reserves the right to dispose of the Securities and Warrant Shares, at any time in accordance with or pursuant to an effective registration statement covering such
Securities and Warrant Shares, or an available exemption under the Securities Act. The Subscriber agrees not to sell, hypothecate or otherwise transfer the Securities or Warrant Shares unless such Securities
or Warrant Shares are registered under the federal and applicable state securities laws or unless, in the opinion of counsel satisfactory to the Company, an exemption from such law is available.
|
b. |
Residence of Subscriber. The Subscriber resides in the jurisdiction set forth on
the Subscriber Omnibus Signature Page affixed hereto.
|
c. |
Accredited Investor Status. The Subscriber meets the requirements of at least one
of the suitability standards for an “Accredited Investor” as that term is defined in Rule 501(a) of Regulation D, for the reason set forth on the Investor Certification attached hereto as Annex B and the
Subscriber represents that the information set forth in the Questionnaire is accurate and complete in all material respects.
|
d. |
Regulation S. The Subscriber (i) is not a U.S. person (as such term is used in Regulation S under the Securities Act) and is not acting for the
account or benefit of a U.S. person; (ii) is aware that the sale to us is being made in reliance on the Regulation S under the Securities Act exemption from registration under the Securities Act; and
(iii) is acquiring the Securities for its own account or for an account over which it exercises sole discretion for another non-U.S. person
|
e. |
Accredited Investor Qualifications. A Subscriber (i) if a natural
person, represents that such Subscriber has reached the age of 21 and has full power and authority to execute and deliver this Agreement and all other related agreements or certificates and to carry out
the provisions hereof and thereof; (ii) if a corporation, partnership, or limited liability company or partnership, or association, joint stock company, trust, unincorporated organization or other entity,
represents that such entity was not formed for the specific purpose of acquiring the Securities, such entity is duly organized, validly existing and in good standing under the laws of the state of its
organization, the consummation of the transactions contemplated hereby is authorized by, and will not result in a violation of state law or its charter or other organizational documents, such entity has
full power and authority to execute and deliver this Agreement and all other related agreements or certificates and to carry out the provisions hereof and thereof and to purchase and hold the Securities
and underlying securities, the execution and delivery of this Agreement has been duly authorized by all necessary action, this Agreement has been duly executed and delivered on behalf of such entity and
is a legal, valid and binding obligation of such entity; or (iii) if executing this Agreement in a representative or fiduciary capacity, represents that it has full power and authority to execute and
deliver this Agreement in such capacity and on behalf of the subscribing individual, ward, partnership, trust, estate, corporation, or limited liability company or partnership, or other entity for whom
such Subscriber is executing this Agreement, and such individual, partnership, ward, trust, estate, corporation, or limited liability company or partnership, or other entity has full right and power to
perform pursuant to this Agreement and make an investment in the Company, and represents that this Agreement constitutes a legal, valid and binding obligation of such entity. The execution and delivery of
this Agreement will not violate or be in conflict with any order, judgment, injunction, agreement or controlling document to which the Subscriber is a party or by which it is bound.
|
f. |
Subscriber Relationship With Brokers. The Subscriber’s substantive relationship with a broker, if
any, for the transactions contemplated hereby, or a subagent thereof (collectively, “Brokers”), through which a Subscriber may be subscribing for the
Securities predates such Broker’s contact with the Subscriber regarding an investment in the Securities.
|
g. |
No Directed Selling Efforts. The Subscriber has not received and is not aware of any “directed selling efforts” (as such term is used in Regulation S under the
Securities Act) with regard to the transactions contemplated herein. The Subscriber did not receive any offer to purchase securities while in the United States. At the time that our buy order for this
transaction was originated and at the time of the closing of this transaction, the Subscriber was outside the United States.
|
h. |
Solicitation. The Subscriber is unaware of, is in no way relying on, and did not become aware of the offering of the Securities through or as a result of, any
form of general solicitation or general advertising including, without limitation, any article, notice, advertisement or other communication published in any newspaper, magazine or similar media or
broadcast over television or radio, in connection with the offering and sale of the Securities and is not subscribing for the Securities and did not become aware of the offering of the Securities
through or as a result of any seminar or meeting to which the Subscriber was invited by, or any solicitation of a subscription by, a person not previously known to the Subscriber in connection with
investments in securities generally.
|
i. |
Brokerage Fees. Except as otherwise provided herein, the Subscriber has taken no action that would give rise to any claim by any person for
brokerage commissions, finders’ fees or the like relating to this Agreement or the transaction contemplated hereby.
|
j. |
Subscriber’s Advisors. The Subscriber and the Subscriber’s attorney, accountant, representative and/or tax advisor, if any
(collectively, the “Advisors”), as the case may be, has such knowledge and experience in financial, tax, and business matters, and, in particular,
investments in securities, so as to enable it to utilize the information made available to it in connection with the Securities to evaluate the merits and risks of an investment in the
Securities and the Company and to make an informed investment decision with respect thereto.
|
k. |
Subscriber Liquidity. The Subscriber has adequate means of providing for the Subscriber’s current financial needs and foreseeable
contingencies and has no need for liquidity of its investment in the Securities for an indefinite period of time, and after purchasing the Securities, the Subscriber will be able to provide for
any foreseeable current needs and possible personal contingencies. The Subscriber must bear and acknowledges the substantial economic risks of the investment in the Securities including the risk
of illiquidity and the risk of a complete loss of this investment.
|
l. |
High Risk Investment. The Subscriber is aware that an investment in the Securities involves a number of very significant risks and has carefully researched
and reviewed and understands the risks of, and other considerations relating to, the purchase of the Securities, including those set forth in the Company’s Annual Report on Form 20-F for the
year ended December 31, 2018 filed with the SEC on March 28, 2019 and any 6-K filed thereafter.
|
m. |
Reliance on Exemptions. The Subscriber understands that the Securities are being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and/or other applicable state laws to the extent applicable to Non-PA Subscribers and that the Company is relying
in part upon the truth and accuracy of, and the Subscriber’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Subscriber set forth
herein in order to determine the availability of such exemptions and the eligibility of the Subscriber to acquire the Securities.
|
n. |
Information. The Subscriber and its Advisors have been furnished with all documents and materials relating to the business, finances and operations of
the Company and information that the Subscriber requested and deemed material to making an informed investment decision regarding the Subscriber’s purchase of the Securities and the
underlying securities. The Subscriber and its Advisors have been afforded the opportunity to review such documents and materials, and the information contained therein. The Subscriber and
its Advisors have been afforded the opportunity to ask questions of the Company and its management. The Subscriber understands that such discussions, as well as any written information
provided by the Company, were intended to describe the aspects of the Company’s business and prospects which the Company believes to be material, but were not necessarily a thorough or
exhaustive description, and except as expressly set forth in this Agreement, the Company makes no representation or warranty with respect to the completeness of such information and makes
no representation or warranty of any kind with respect to any information provided by any entity other than the Company. Some of such information may include projections as to the future
performance of the Company, which projections may not be realized, may be based on assumptions which may not be correct and may be subject to numerous factors beyond the Company’s control.
Additionally, the Subscriber understands and represents that the Subscriber is purchasing the Securities notwithstanding the fact that the Company may disclose in the future certain
material information the Subscriber has not received, including the financial results of the Company for its current fiscal quarter. Neither such inquiries, nor any other due diligence
investigations conducted by the Subscriber or its Advisors, shall modify, amend or affect the Subscriber’s right to rely on the Company’s representations and warranties contained in
Section 4 above. The Subscriber has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition of
the Securities.
|
o. |
No Other Representations or Information. In evaluating the suitability of an investment in the Securities, the Subscriber has not relied upon any
representation or information (oral or written) with respect to the Company, or otherwise, other than as stated in this Agreement, the other Transaction Documents and the Securities. No
other oral or written representations have been made, or oral or written information furnished, to the Subscriber or its Advisors, if any, in connection with the offering of the Securities.
|
p. |
No Governmental Review. The Subscriber understands that no United States federal or state agency or any other United States or foreign government or
governmental agency has passed on or made any recommendation or endorsement of the Securities, or the fairness or suitability of the Securities, nor have such authorities passed upon or
endorsed the merits of the offering of the Securities.
|
q. |
Transfer or Resale. The Subscriber understands that: (i) the Securities and the Warrant Shares have not been and may not be registered under the
Securities Act or any state securities or other foreign laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, or (B) the
Subscriber shall have delivered to the Company an opinion of counsel, in a form reasonably satisfactory to the Company, to the effect that such securities to be sold, assigned or
transferred may be sold, assigned or transferred pursuant to an exemption from such registration requirements; (ii) any sale of such securities made in reliance on Rule 144 under the
Securities Act (or a successor rule thereto) (“Rule 144”) may be made only in accordance with the terms of Rule 144 and further, if Rule
144 is not applicable, any resale of such securities under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that
term is defined in the Securities Act) may require compliance with some other exemption under the Securities Act or the rules and regulations of the SEC thereunder; and (iii) except as
otherwise set forth in this Agreement, the Company is not, and no other person is, under any obligation to register such securities under the Securities Act or any state securities
laws or to comply with the terms and conditions of any exemption thereunder. The Company reserves the right to place stop transfer instructions against the certificates for the
Ordinary Shares and Warrant Shares to the extent specifically set forth under this Agreement. There can be no assurance that there will be an active trading market or resale for the
Ordinary Shares, or Warrant Shares, nor can there be any assurance that the Ordinary Shares or Warrant Shares will be freely transferable at any time in the foreseeable future.
|
r. |
Legends. The Subscriber understands that the certificates for the Ordinary Shares (to the extent Ordinary Shares, including those issuable upon
exercise of Warrants and Broker Warrants, are issued in certificated form) shall bear a restrictive legend in substantially the form below (and a stop transfer order may be placed
against transfer of such stock certificates). In addition, the Subscriber understands that the Warrants shall include a legend substantially in the form of the first page of the Form
of Warrant attached hereto as Exhibit A (and a stop transfer order may be placed against transfer of such warrant certificates).
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS (I) AS PART OF THEIR DISTRIBUTION AT ANY TIME
OR (II) OTHERWISE UNTIL 40 DAYS AFTER THE LATER OF THE COMMENCEMENT OF THE OFFERING AND THE CLOSING DATE, EXCEPT IN EITHER CASE IN ACCORDANCE WITH REGULATION S (OR RULE 144A IF
AVAILABLE) UNDER THE SECURITIES ACT EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:
(1) REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS
AN NOT A U.S. PERSON (WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND
(2) AGREES FOR THE BENEFIT OF ENTERA BIO LTD. (THE “COMPANY”)
THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT:
(A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, OR
(B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BECOME
EFFECTIVE UNDER THE SECURITIES ACT, OR
(C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION MEETING
THE REQUIREMENTS OF RULE 904 OF REGULATION S UNDER THE SECURITIES ACT TO A PERSON THAT IS NOT A U.S. PERSON WHO AGREES TO RESTRICTIONS ON RESALE THAT ARE CONSISTENT WITH THE
REQUIREMENTS OF REGULATION S UNDER THE SECURITIES ACT, OR
(D) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT.
PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH THE PARAGRAPH ABOVE, THE COMPANY AND THE COMPANY’S TRANSFER AGENT
RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER
IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT.
SECURITIES EVIDENCED HEREBY AND ORDINARY SHARES OF THE COMPANY ISSUED UPON EXERCISE OF SUCH SECURITIES SHALL BE ENTITLED TO
REGISTRATION RIGHTS UNDER A REGISTRATION RIGHTS AGREEMENT TO BE EXECUTED BY THE COMPANY.
|
s. |
Authorization, Enforcement. The Subscriber has the requisite power and authority to enter into and perform under this Agreement and the other
Transaction Documents, and to purchase the Securities and underlying securities being sold to it hereunder. The execution, delivery and performance of this Agreement and the
Transaction Documents by such Subscriber and the consummation by Subscriber of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate
or partnership action, and no further consent or authorization of such Subscriber or Subscriber’s Board of Directors, stockholders, partners, members, as the case may be, is
required. This Agreement and the other Transaction Documents (to the extent the Subscriber is party thereto) have been duly authorized, executed and delivered by such Subscriber and
upon execution of this Agreement and the Transaction Documents by the other parties hereto and thereto, constitute, or shall constitute when executed and delivered, a valid and
binding obligation of such Subscriber enforceable against such Subscriber in accordance with the terms hereof and thereof, except as such enforceability may be limited by general
principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of
applicable creditors’ rights and remedies.
|
t. |
No Conflicts. The execution, delivery and performance of this Agreement and the other Transaction Documents and the consummation by the
Subscriber of the transactions contemplated hereby and thereby or relating hereto do not and will not (i) if the Subscriber is not an individual, result in a violation of the
Subscriber’s charter documents or bylaws or other organizational documents or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of any agreement, indenture or instrument or obligation to which
the Subscriber is a party or by which its properties or assets are bound, or result in a violation of any law, rule, or regulation, or any order, judgment or decree of any court or
governmental agency applicable to the Subscriber or its properties (except for such conflicts, defaults and violations as would not, individually or in the aggregate, have a
material adverse effect on the Subscriber). The Subscriber is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court or
governmental agency in order for it to execute, deliver or perform any of its obligations under this Agreement and the other Transaction Documents or to purchase the Securities in
accordance with the terms hereof, provided that for purposes of the representation made in this sentence, the Subscriber is assuming and relying upon the accuracy of the relevant
representations and agreements of the Company herein.
|
u. |
Receipt of Documents. The Subscriber, its counsel and/or its Advisors have received and read in their entirety: (i) this Agreement and each
representation, warranty and covenant set forth herein; and (ii) all due diligence and other information necessary to verify the accuracy and completeness of such
representations, warranties and covenants; the Subscriber has received answers to all questions the Subscriber submitted to the Company regarding an investment in the Company;
and the Subscriber has relied on the information contained therein and has not been furnished any other documents, literature, memorandum or prospectus.
|
v. |
Trading Activities. The Subscriber’s trading activities with respect to the Ordinary Shares shall be in compliance with all applicable
federal and state securities laws, rules and regulations and the rules and regulations of the principal market on which the Ordinary Shares are listed or traded. Except as set
forth below, the Subscriber shall not, and shall cause its affiliates not to, engage in any short sale as defined in any applicable SEC or Financial Industry Regulatory
Authority (“FINRA”) rules or any hedging transactions with respect to the Common Stock until the earlier to occur of (i) the
first anniversary of the initial Closing Date and (ii) the Subscriber no longer owns Ordinary Shares, Warrants or Warrant Shares. Without limiting the foregoing, the Subscriber
agrees not to engage in any naked short transactions in excess of the amount of shares owned (or an offsetting long position) by the Subscriber.
|
w. |
No Legal Advice from the Company. The Subscriber acknowledges that it had
the opportunity to review this Agreement and the transactions contemplated by this Agreement with its own legal counsel and investment and tax Advisors. The Subscriber is relying
solely on such Advisors and not on any statements or representations of the Company or any of its employees, representatives or agents for legal, tax, economic and related
considerations or investment advice with respect to this investment, the transactions contemplated by this Agreement or the securities laws of any jurisdiction.
|
x. |
No Group Participation. The Subscriber and its affiliates is not a member
of any group, nor is the Subscriber acting in concert with any other person, including any other Subscriber, with respect to its acquisition of the Securities and underlying
securities.
|
y. |
Reliance. Any information which the Subscriber has heretofore furnished or is furnishing herewith to the Company or any Broker is complete
and accurate and may be relied upon by the Company and any Broker in determining the availability of an exemption from registration under U.S. federal and state securities laws
in connection with the offering of securities as described in this Agreement and the related summary term sheet and transmittal letter, if any. The Subscriber further represents
and warrants that it will notify and supply corrective information to the Company immediately upon the occurrence of any change therein occurring prior to the Company’s issuance
of the Securities. Within five (5) days after receipt of a request from the Company or any Broker, the Subscriber will provide such information and deliver such documents as may
reasonably be necessary to comply with any and all laws and ordinances to which the Company or any Broker is subject.
|
z. |
(For ERISA plan Subscribers only). The fiduciary of the ERISA plan represents that such fiduciary
has been informed of and understands the Company’s investment objectives, policies and strategies, and that the decision to invest “plan assets” (as such term is defined in ERISA) in the Company is consistent with the
provisions of ERISA that require diversification of plan assets and impose other fiduciary responsibilities. The Subscriber fiduciary or plan (a) is responsible for the
decision to invest in the Company; (b) is independent of the Company or any of its affiliates; (c) is qualified to make such investment decision; and (d) in making such
decision, the Subscriber fiduciary or plan has not relied primarily on any advice or recommendation of the Company or any of its affiliates.
|
aa. |
Anti-Money Laundering; OFAC.
[The Subscriber should check the Office of Foreign Assets Control (“OFAC”) website at http://www.treas.gov/ofac before making the following representations.] The Subscriber represents that the amounts invested by it in the Company in the
Securities were not and are not directly or indirectly derived from activities that contravene U.S. federal or state or international laws and regulations, including
anti-money laundering laws and regulations. U.S. federal regulations and executive orders administered by OFAC prohibit, among other things, the engagement in transactions
with, and the provision of services to, certain foreign countries, territories, entities and individuals. The lists of OFAC prohibited countries, territories, persons and
entities can be found on the OFAC website at http://www.treas.gov/ofac. In addition, the programs administered by OFAC (the “OFAC
Programs”) prohibit dealing with individuals1 or entities in certain countries regardless of whether such individuals or entities appear on the
OFAC lists.
To the best of the Subscriber’s knowledge, none of: (1) the Subscriber; (2) any person controlling or controlled by the
Subscriber; (3) if the Subscriber is a privately-held entity, any person having a beneficial interest in the Subscriber; or (4) any person for whom the Subscriber is acting
as agent or nominee in connection with this investment is a country, territory, individual or entity named on an OFAC list, or a person or entity prohibited under the OFAC
Programs. Please be advised that the Company may not accept any amounts from a prospective investor if such prospective investor cannot make the representation set forth in
the preceding paragraph. The Subscriber agrees to promptly notify the Company should the Subscriber become aware of any change in the information set forth in these
representations. The Subscriber understands and acknowledges that, by law, the Company may be obligated to “freeze the account”
of the Subscriber, either by prohibiting additional subscriptions from the Subscriber, declining any redemption requests and/or segregating the assets in the account in
compliance with governmental regulations, and a Broker may also be required to report such action and to disclose the Subscriber’s identity to OFAC. The Subscriber further
acknowledges that the Company may, by written notice to the Subscriber, suspend the redemption rights, if any, of the Subscriber if the Company reasonably deems it
necessary to do so to comply with anti-money laundering regulations applicable to the Company or any Broker or any of the Company’s other service providers. These
individuals include specially designated nationals, specially designated narcotics traffickers and other parties subject to OFAC sanctions and embargo programs.
To the best of the Subscriber’s knowledge, none of: (1) the Subscriber; (2) any person controlling or controlled by the
Subscriber; (3) if the Subscriber is a privately-held entity, any person having a beneficial interest in the Subscriber; or (4) any person for whom the Subscriber is acting
as agent or nominee in connection with this investment is a senior foreign political figure2, or any immediate family3 member or close associate4
of a senior foreign political figure, as such terms are defined in the footnotes below.
If the Subscriber is affiliated with a non-U.S. banking institution (a “Foreign Bank”),
or if the Subscriber receives deposits from, makes payments on behalf of, or handles other financial transactions related to a Foreign Bank, the Subscriber represents and
warrants to the Company that: (1) the Foreign Bank has a fixed address, other than solely an electronic address, in a country in which the Foreign Bank is authorized to
conduct banking activities; (2) the Foreign Bank maintains operating records related to its banking activities; (3) the Foreign Bank is subject to inspection by the banking
authority that licensed the Foreign Bank to conduct banking activities; and (4) the Foreign Bank does not provide banking services to any other Foreign Bank that does not
have a physical presence in any country and that is not a regulated affiliate.
|
bb. |
Conflicts Waiver. Each PA Subscriber purchasing through GPN is aware that some of the members of Intuitive Venture Partners, LLC (“Intuitive”) are registered representatives registered with GPN, and may receive a portion of the Cash Fee and/or Broker Warrants
payable to GPN, as described above. Each such PA Subscriber, for itself and on behalf of its affiliates, expressly waives any conflicts of interest or potential conflicts of
interest discussed in this paragraph and agrees that neither GPN nor its affiliates, officers, directors or members shall have any liability to the Subscriber or its
affiliates, and the Subscriber and its affiliates shall have no liability to GPN, or its affiliates, officers, directors or members, with respect to such conflicts of
interest or potential conflicts of interest.
|
cc. |
Funds Availability. The Subscriber has, or will have at the applicable Closing, sufficient cash, available lines of
credit or other sources of immediately available funds pursuant to the Agreement, to enable it to make pursuant to the terms of this Agreement.
|
(a) |
Best Efforts. Each party shall use its best efforts timely to satisfy each of the conditions to be satisfied by it as provided in
Sections 7 and 8 of this Agreement.
|
(b) |
Form D and Blue Sky Laws.
If the Company decides to rely on Regulation D for this offering, the Company will file a Form D, to the extent applicable, with respect to the offer and sale of the
Securities. The Company shall take such actions as the Company shall reasonably determine is necessary to qualify the Securities and Warrant Shares, or obtain an
exemption for the Securities and Warrant Shares for sale to the Subscribers pursuant to this Agreement, under applicable US state blue sky laws.
|
(c) |
Reporting Status; Rule 144. Through the date which is one-year after the final Closing Date, the Company shall, to the extent
applicable, maintain the registration of its ordinary shares under Section 12(b) or 12(g) of the Exchange Act and file in a timely manner (or, with respect to Form
6-K Reports, shall use its commercially reasonable efforts to file in a timely manner) all reports required to be filed with the SEC thereunder, and the Company shall
not terminate its status as an issuer required to file reports under the Exchange Act even if the Exchange Act or the rules and regulations thereunder would otherwise
permit such termination. The Company further covenants that it will take such actions which are in compliance with the applicable laws that any Subscriber may
reasonably request to enable such Subscriber to sell or transfer the Securities acquired in the Offering without registration under the Securities Act, including
without limitation, pursuant to Rule 144.
|
(d) |
Use of Proceeds. The Company shall use the net proceeds from the sale of the Securities (after deducting fees and expenses
(including brokerage fees, legal fees and expenses and fees payable to the Escrow Agent)) for (i) completion of P2 Osteoporosis trial and primary readouts; (ii)
filing of IND for osteoporosis program; (iii) research and development efforts to further develop additional compounds and finalize Hypo formulations; and (iv)
general and administrative expenses to, among other things, support the Company’s public listing and registration statement, in each case, as such use of proceeds
may be amended, at the discretion of the Company’s board of directors from time to time.
|
(e) |
Survival. Notwithstanding anything to the contrary in this Agreement, the representations and warranties of the Company and the
Subscriber contained in Sections 4 and 5 shall survive the final Closing for a period of one year. The covenants contained in Sections 6 and 15 shall survive for
the maximum period permitted by law. Each Subscriber shall be responsible only for its own representations, warranties, agreements and covenants hereunder.
|
(f) |
Listing of Ordinary Shares. Following the Offering, the Company shall, if allowed under applicable laws
or NASDAQ rules, promptly secure the listing of all Ordinary Shares (including those underlying the Warrants and Broker Warrants) on the NASDAQ National Market
or such other market then constituting the Company’s principal trading market.
|
a. |
Receipt of Payment. The Company shall have received payment, by certified or other bank check or by wire transfer of
immediately available funds, in the full amount of the Purchase Price for the amount of Securities being purchased by such Subscriber at such Closing.
|
b. |
Representations and Warranties. The representations and warranties made by the Subscriber in Section
5 hereof shall be true and correct in all material respects as of, and as if made on, the date of this Agreement and as of such Closing Date with the same
force and effect as if they had been made on and as of said date (except in each case to the extent any such representation and warranty is qualified by
materiality, in which case, such representation and warranty shall be true and correct in all respects as so qualified). The Subscriber shall have performed
in all material respects all obligations and covenants herein required to be performed by them on or prior to such Closing Date.
|
c. |
Receipt of Executed Documents. Such Subscriber shall
have executed and delivered to the Company the Omnibus Signature Page, the Investor Profile, Anti-Money Laundering Form and Accredited Investor Certification.
In addition, the Subscriber is furnishing to the Company an executed IRS Form W-8BEN or W-9, if either is applicable, or the correct form as described in the
instructions in the attached herein as an exhibit (“Internal Revenue
Service Forms”) and the instructions accompanying the applicable form.
|
d. |
Minimum Offering. The initial Closing
shall be at least for the amount of Securities in the Minimum Offering at the Purchase Price.
|
e. |
Judgments. No judgment, writ, order, injunction, award or decree of or by any court, or judge,
justice or magistrate, including any bankruptcy court or judge, or any order of or by any governmental authority, shall have been issued, and no action or
proceeding shall have been instituted by any governmental authority, enjoining or preventing the consummation of the transactions contemplated hereby.
|
f. |
Foreign Investors. If the Subscriber is not a United States person (as defined by Section 7701(a)(30) of the Internal
Revenue Code), Subscriber hereby represents that it has satisfied itself as to the full observance of the laws of its jurisdiction in connection with any
invitation to subscribe for the Securities or any use of this Agreement, including (i) the legal requirements within its jurisdiction for the purchase of
the Securities, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any government or other consents that may need to be obtained, and
(iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale or transfer of the Securities.
Subscriber’s subscription and payment for and continued beneficial ownership of the Securities will not violate any applicable securities or other laws of
Subscriber’s jurisdiction.
|
g. |
Shareholder Approval. The Company
shall have received any shareholder approval required under applicable law.
|
a. |
Representations and Warranties. The
representations and warranties made by the Company in Section 4 hereof shall be true and correct in all material respects (except to the extent any such
representation and warranty is qualified by materiality or reference to Material Adverse Effect, in which case, such representation and warranty shall be true
and correct in all respects as so qualified) as of, and as if made on, the date of this Agreement and as of such Closing Date with the same force and effect as
if they had been made on and as of said date, except to the extent any such representation or warranty expressly speaks as of an earlier date, in which case
such representation or warranty shall be true and in all material respects correct as of such earlier date (except in each case to the extent any such
representation and warranty is qualified by materiality or reference to Material Adverse Effect, in which case, such representation and warranty shall be true
and correct in all respects as so qualified). The Company shall have performed in all material respects all obligations and covenants herein required to be
performed by it on or prior to the applicable Closing Date.
|
b. |
Receipt of Executed Transaction Documents.
The Company shall have executed and delivered to the Placement Agent the Registration Rights Agreement and the Escrow Agreement.
|
c. |
Minimum Offering. The initial Closing
shall be at least for the amount of Securities in the Minimum Offering at thePurchase Price.
|
d. |
Judgments. No judgment, writ, order, injunction, award or decree of or by any court, or judge,
justice or magistrate, including any bankruptcy court or judge, or any order of or by any governmental authority, shall have been issued, and no action or
proceeding shall have been instituted by any governmental authority, enjoining or preventing the consummation of the transactions contemplated hereby.
|
e. |
Consents. The Company shall have
obtained any and all consents, permits, approvals, registrations and waivers necessary or appropriate for consummation by the Company of the purchase and sale
of the Securities and the transactions contemplated hereby or under the Transaction Documents, all of which shall be in full force and effect.
|
f. |
Reserved.
|
g. |
Officer’s Certificate. The Company shall have delivered to the Subscribers a certificate, executed
on its behalf by an appropriate officer, dated as of the applicable Closing Date, certifying as to the matters set forth in Sections 8 a.-e. above,
certifying the resolutions adopted by its Board of Directors approving the transactions contemplated by this Agreement, the other Transaction Documents and
the issuance of the Securities, certifying that the current versions of its Articles of Association, and certifying as to the signatures and authority of
persons signing this Agreement on behalf of the Company. The foregoing certificate shall only be required to be delivered on the First Closing Date, unless
any information contained in the certificate has changed.
|
h. |
Shareholder Approval. The Subscriber
shall have received any shareholder approval required under applicable law.
|
a. |
Arbitration shall be final and binding on the parties.
|
b. |
THE PARTIES ARE WAIVING THEIR RIGHT TO SEEK REMEDIES IN COURT, AND EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
|
c. |
Pre-arbitration discovery is generally more limited and different from court proceedings.
|
d. |
The arbitrator’s award is not required to include factual findings or legal reasoning and any party’s right to
appeal or to seek modification of rulings by arbitrators is strictly limited.
|
e. |
The panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the
securities industry.
|
f. |
All controversies which may arise between the parties concerning this Agreement shall be determined by
arbitration pursuant to the rules then pertaining to the Financial Industry Regulatory Authority in New York City, New York. Judgment on any award of any such
arbitration may be entered in the Supreme Court of the State of New York or in any other court having jurisdiction of the person or persons against whom such
award is rendered. Any notice of such arbitration or for the confirmation of any award in any arbitration shall be sufficient if given in accordance with the
provisions of this Agreement. The parties agree that the determination of the arbitrators shall be binding and conclusive upon them. The prevailing party, as
determined by such arbitrators, in a legal proceeding shall be entitled to collect any costs, disbursements and reasonable attorney’s fees from the other
party. Prior to filing an arbitration, the parties hereby agree that they will attempt to resolve their differences first by submitting the matter for
resolution to a mediator, acceptable to all parties, and whose expenses will be borne equally by all parties. The mediation will be held in the County of New
York, State of New York, on an expedited basis. If the parties cannot successfully resolve their differences through mediation, within sixty (60) days from
the receipt of written notice of a controversy from the notifying party, the matter will be submitted for resolution by arbitration. The arbitration shall
take place in the County of New York, State of New York, on an expedited basis.
|
If to the Company:
|
Entera Bio Ltd.
|
37 Walnut Street, Suite 300
|
|
Wellesley Hills, MA 02481
|
|
Attention: Adam Gridley, CEO
|
|
Email: adam@enterabio.com
|
|
With a copy to
|
Herzog Fox & Neeman 4 Weizmann Street
Tel Aviv 6423904 Israel
Yair Geva, Adv. or Tomer Farkash, Adv.
Email: gevay@hfn.co.il; farkasht@hfn.co.il
Facsimile: +972 3 6966464; and
|
Davis Polk & Wardwell LLP | |
(which shall not constitute notice)
|
450 Lexington Avenue
|
New York, NY 10017
|
|
Attention: Gil Savir, Esq.
|
|
Email: gil.savir@davispolk.com
|
|
If to GP Nurmenkari Inc.:
|
GP Nurmenkari Inc.
|
22 Elizabeth Street
|
|
SONO Square, Suite 1J
|
|
Norwalk, CT 06854
|
|
Attention: Robert Fitzpatrick, CCO
|
|
With a copy to:
|
|
(which shall not constitute notice)
|
Lucosky Brookman LLP
|
101 Wood Avenue South
|
|
Woodbridge, NJ 08830
|
|
Attention: Scott Rapfogel, Esq.
Email: srapfogel@lucbro.com
|
a. |
Subject to the consumption of the Initial Closing, and subject to the terms and conditions of this
Section 25 and applicable securities laws, the Company agrees that each Subscriber will be entitled to purchase
its pro-rata portion of the New Securities offered by the Company to investors making a cash-investment in any private placement offering of the Company
of more than $2,500,000 to be closed during a period of one year following the final Closing Date of this Offering (the “Applicable
Period”). The rights granted under this Section 25 to Subscribers are personal to the Subscribers and accordingly such rights cannot be
transferred or assigned to any other party.
|
b. |
The Company shall give notice (the “Offer Notice”) to each Eligible
Subscriber, stating (i) its bona fide intention to offer such New Securities, (ii) the number of such New Securities to be offered, and (iii) the price
and terms, if any, upon which it proposes to offer such New Securities. By notification to the Company within five (5) days after the Offer Notice is
given (the “Offer Period”), each Eligible Subscriber may elect to purchase or otherwise acquire, at the
price and on the terms specified in the Offer Notice, up to that portion of such New Securities which equals to the proportion that the Securities
actually purchased by such Eligible Subscriber in this Offering bears to the total Securities actually sold by the Company in this Offering.
|
c. |
Notwithstanding any provision hereof to the contrary, in lieu of complying with the provisions of Section 25(b), the
Company may elect to give notice to the Eligible Subscriber within thirty (30) days after the issuance of New Securities. Such notice shall describe the
type, price, and terms of the New Securities. Each Eligible Subscriber shall have ten (10) days from the date notice is given according to this
subsection to elect to purchase up to the number of New Securities that would, if purchased by such Eligible Subscriber, would preserve such Eligible
Subscriber’s right to purchase its pro rata portion of the New Securities, calculated as set forth in Section 25(b).
|
d. |
The covenants set forth in this Section 25 shall terminate and be of no further force or effect upon the earlier of
(i) the end of the Applicable Period, (ii) liquidation of the Company or (iii) the closing of merger or consolidation of the Company in which the
Company is a constituent party except any such merger or consolidation involving the Company in which the shares of capital of the Company
outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for shares of capital that
represent, immediately following such merger or consolidation, at least a majority, by voting power, of the capital stock of (1) the surviving or
resulting corporation; or (2) if the surviving or resulting corporation is a wholly owned subsidiary of another corporation immediately following
such merger or consolidation, the parent corporation of such surviving or resulting corporation.
|
e. |
If the offer to Eligible Subscribers under this Section 25 may, in the opinion of the Company’s counsel, constitute
an offer to the public under the applicable securities laws which is subject to prospectus or other requirements, then such offer shall be limited
to the type of offerees the offering to which is exempted from such prospectus requirement, and no offering shall be made to any Eligible
Subscriber until such Eligible Subscriber shall have provided the Company during the Offer Period with the satisfactory evidence of its compliance
with the applicable requirements under the securities laws.
|
f. |
The Term “New Securities”
shall mean the issuance and sale of the Company’s shares or equity securities or securities converted into equity securities of the Company, and
shall exclude for the avoidance of doubt, any of the following securities or issuances: (i) shares, options or convertible securities of the
Company issued or granted as a dividend, bonus shares, stock split, split-up or other similar distribution or recapitalization, to all
shareholders or equity holders of the Company on a pro-rata basis, (ii) shares, options or convertible securities of the Company issued or granted
to: (a) employees or directors of, or consultants or advisors to, the Company or any of its subsidiaries pursuant (or any shares issued upon the
exercise of such options) to the Company’s share option plans, or (b) finders, broker-dealers, underwriters, agents or other similar entities
assisting the Company with the sale or issuance of the equity securities of the Company, (iii) shares, options, rights or convertible securities
of the Company actually issued upon the exercise of options, warrants or shares of the Company issued upon the conversion or exchange of
convertible securities existing prior to the date of the Initial Closing, in each case provided such issuance is pursuant to the terms of such
options or convertible securities, (iv) shares, options or convertible securities of the Company issued as acquisition consideration pursuant to
the acquisition of another corporation by the Company by merger, purchase of substantially all or majority of the assets or other reorganization
or to a joint venture agreement approved by the Board, (v) shares, options or convertible securities of the Company issued in connection with
sponsored research, collaboration, technology or patent license, development, OEM, marketing, settlement of claims, or other similar agreements or
strategic partnerships approved by the Board, (vi) Securities issued or sold according to the terms of this Offering, or (vii) any issuance in
which Eligible Subscribers purchasing 60% of the Securities purchased by the Eligible Subscribers in this Offering have agreed in writing to
exclude such issuance of new securities from the right of offer under this Section 25.
|
a. |
This Agreement, together with the Registration Rights Agreement, the Securities, the Escrow Agreement, and any
confidentiality agreement between the Subscriber and the Company, constitutes the entire agreement between the Subscriber and the Company with
respect to the Offering and supersedes all prior oral or written agreements and understandings, if any, relating to the subject matter hereof. Any
term of this Agreement may be amended and the observance of any term hereof may be waived (either prospectively or retroactively and either
generally or in a particular instance) only with the written consent of (i) the Company, (ii) holders of 60% of the Purchase Price by the
Subscribers actually investing in this Offering, and (iii) the Placement Agent (the “Majority Subscribers”),
provided however that (i) no Subscriber shall be required to increase its respective Purchase Price or to make any additional representations or
warranties without its prior written consent, and (ii) any amendment or waiver that would adversely and directly affect any Subscribers in a
disproportionate manner relative to other Subscribers shall not be effective against the Subscribers without the prior written consent of the
Subscriber (it is agreed that the mere fact that that each Subscriber has provided the Company with a different portion of the Purchase Price,
shall not be deemed by itself to adversely affect the rights of such Subscribers in the context of amendment or waiver).
|
b. |
This Agreement may be executed in one or more original or facsimile or by an e-mail which contains a portable
document format (.pdf) file of an executed signature page counterparts, each of which shall be deemed an original, but all of which shall
together constitute one and the same instrument and which shall be enforceable against the parties actually executing such counterparts. The
exchange of copies of this Agreement and of signature pages by facsimile transmission or in .pdf format shall constitute effective execution and
delivery of this Agreement as to the parties and may be used in lieu of the original Agreement for all purposes. Signatures of the parties
transmitted by facsimile or by e- mail of a document in pdf format shall be deemed to be their original signatures for all purposes.
|
c. |
Each provision of this Agreement shall be considered separable and, if for any reason any
provision or provisions hereof are determined to be invalid or contrary to applicable law, such invalidity or illegality shall not impair the
operation of or affect the remaining portions of this Agreement.
|
d. |
Paragraph titles are for descriptive purposes only and shall not control or alter the meaning of this
Agreement as set forth in the text.
|
e. |
The Subscriber understands and acknowledges that there may be multiple Closings for the Offering.
|
f. |
The Subscriber hereby agrees to furnish the Company such other information as the Company may request prior to
the applicable Closing or reasonably request following post the request Closing with respect to its subscription hereunder.
|
ENTERA BIO LTD
|
|
By: /s/ Adam Gridley
|
|
Name: Adam Gridley
Title: Chief Executive Officer
|
1.
|
Date and Fill in the dollar amount of Securities being purchased and complete and sign the
Omnibus Signature Page.
|
2.
|
Initial the Accredited Investor Certification in the appropriate place or places.
|
3.
|
Complete and sign the Investor Profile.
|
4.
|
Complete and sign the Anti-Money Laundering Information Form.
|
5.
|
Date and sign the Confidentiality Agreement.
|
6.
|
Fax or email all forms and then send all signed original documents to your registered representatives office:
|
7.
|
If you are paying the Purchase Price by check, a certified or other bank check for the exact dollar
amount of the Purchase Price for the Securities you are purchasing should be made payable to the order of “Delaware Trust Company, as Escrow Agent for Entera Bio Ltd. – Biomedical Solutions, Acct. # *******”
and should be sent directly to Delaware Trust Company, 251 Little Falls Drive, Wilmington, DE 19808, Attn: Trust Administration.
Checks take up to 5 business days to clear. A check must be received by the Escrow Agent at least 6 business days before the closing date.
|
8.
|
If you are paying the Purchase Price by wire transfer, you should send a wire transfer for the exact dollar amount of the
Purchase Price for the Notes you are purchasing according to the following instructions:
|
Bank:
|
US Bank
5065 Wooster Road
Cincinnati, OH 45226
|
ABA Routing #:
|
**************
|
SWIFT CODE:
|
**************
|
Account Name:
|
Delaware Trust Company
|
Account #:
|
**************
|
Reference:
|
***************
[INSERT SUBSCRIBER’S NAME]”
______________________________
|
$800,000
Total Purchase Price
|
||
SUBSCRIBER (individual)
|
SUBSCRIBER (entity)
|
|
D.N.A Biomedical Solutions Ltd.
|
||
Signature
|
Name of Entity
|
|
By: /s/ Yonatan Malca /s/ Tony Klein
|
||
Print Name
|
Signature
|
Print Name: Yonatan Malca Tony Klein
|
||
Signature (if Joint Tenants or Tenants in Common)
|
Title: CEOCFO
|
|
Address of Principal Residence:
|
Address of Executive Offices:
|
|
************************___________________________
|
||
|
||
Social Security Number(s):
|
IRS Tax Identification Number:
|
|
Telephone Number:
|
Telephone Number:
|
|
***************
|
||
Facsimile Number:
|
Facsimile Number:
|
|
E-mail Address:
|
E-mail Address: *************
|
|
Please also execute the incumbency certificate attached
hereto as Schedule 5
|
Warrant Shares: [ ]
|
Initial Exercise Date: December 11, 2019
|
Warrant Number: [ ]
|
Issue Date: [ ], 2019
|
i. |
Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder (A) by crediting the Holder’s, or its designee’s, balance account
with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and such Warrant Shares are then eligible for sale by such Holder pursuant to Rule
144(b)(1)(i), and (B) otherwise by registering such Warrant Shares in the Company’s share register in the name of such Holder or its assignee, in each case, by the date that is two (2) Trading Days after the final day of the related
Calculation Period (such date the “Warrant Share Delivery Date”). The Warrant Shares shall be deemed to have been issued, and the Holder, or any other person so designated by the Holder to be named in the share register, shall be
deemed to have become a holder of record of such shares for all purposes as of the final day of the related Calculation Period; provided that payment to the Company of all taxes required to be paid by the Holder, if any, pursuant
to Section 2(d)(vi) have timely been made prior to the issuance of such shares; provided, further that if such final date of the Calculation Period is a date upon which the Ordinary
Share transfer books of the Company are closed, such person shall be deemed to have become the record holder of such shares on, and such certificate shall be dated, the next succeeding day on which the Ordinary Share transfer books of the
Company are open. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and
not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Ordinary Shares on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth
Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer
agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable.
|
ii. |
[Reserved.]
|
iii. |
Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind
such exercise.
|
iv. |
Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant
Shares in accordance with the provisions of Section 2(d)(i) above on or before the applicable Warrant Share Delivery Date (other than any such failure that is solely due to any action or inaction by the Holder with respect to such
exercise), and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, Ordinary Shares to deliver in satisfaction of a sale by
the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price
(including brokerage commissions, if any) for the Ordinary Shares so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to
deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the
Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of Ordinary Shares that would have been issued had the
Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Ordinary Shares having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of
Ordinary Shares with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the
Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies
available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver Ordinary Shares upon exercise of the Warrant
as required pursuant to the terms hereof.
|
v. |
No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to
purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.
|
vi. |
Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to a Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes
and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event that Warrant
Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto as Exhibit B duly executed by the Holder and the Company
may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and
all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.
|
vii. |
Closing of Books. The Company will not close its shareholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.
|
i. |
Issuance of Options. If the Company in any manner grants or sells any rights, warrants or options to subscribe for or purchase Ordinary Shares or Ordinary Share Equivalents (“Options”) and the weighted average price per
share for which one Ordinary Share is, as of the time of such grant or sale, at any time issuable upon the exercise of the Options so granted or sold or upon conversion, exercise or exchange of any Ordinary Share Equivalents issuable upon
exercise of such Options or otherwise pursuant to the terms thereof is less than the Applicable Price, then the Ordinary Shares underlying such Options shall be deemed to have been issued and sold for purposes of the adjustment under this
Section 3(b) at the time of the granting or sale of such Options for such price per share. For purposes of this Section 3(b)(i), the “weighted average price per share for which one Ordinary Share is issuable upon the exercise of any such
Options or upon conversion, exercise or exchange of any Ordinary Share Equivalents issuable upon exercise of any such Options or otherwise pursuant to the terms thereof” shall be equal to the arithmetic average of the sums of the amounts
of consideration (if any) received or receivable by the Company with respect to each Ordinary Share issuable upon the granting or sale of the relevant Options, upon exercise of such Options and upon conversion, exercise or exchange of any
Ordinary Share Equivalents issuable upon exercise of such Options or otherwise pursuant to the terms thereof. Except as contemplated below, no further adjustment of the Exercise Price shall be made upon the actual issuance of such
Ordinary Shares or of such Ordinary Share Equivalents upon the exercise of such Options or otherwise pursuant to the terms of or upon the actual issuance of such Ordinary Shares upon conversion, exercise or exchange of such Ordinary Share
Equivalents.
|
ii. |
Issuance of Ordinary Share Equivalents. If the Company in any manner issues or sells any Ordinary Share Equivalents and the weighted average price per share for which one Ordinary Share is, as of the time of such issuance or
sale, at any time issuable upon the conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof is less than the Applicable Price, then the Ordinary Shares underlying such Ordinary Share Equivalents shall be deemed
to have been issued and sold for purposes of the adjustment under this Section 3(b) at the time of the issuance or sale of such Ordinary Share Equivalents for such price per share. For the purposes of this Section 3(b)(ii), the “weighted
average price per share for which one Ordinary Share is issuable upon the conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof” shall be equal to (1) the arithmetic average of the sums of the amounts of
consideration (if any) received or receivable by the Company with respect to each Ordinary Share underlying the relevant Ordinary Share Equivalents upon the issuance or sale of such Ordinary Share Equivalents and upon conversion, exercise
or exchange of such Ordinary Share Equivalents or otherwise pursuant to the terms thereof minus (2) the arithmetic average of the sums (determined on a per share basis with respect to the Ordinary
Shares underlying each such Ordinary Share Equivalent) of (I) all amounts paid or payable to the holder(s) of each such Ordinary Share Equivalent (or any other Person) upon the issuance or sale of each such Ordinary Share Equivalent plus (II) the value of any other consideration received or receivable by, or benefit conferred on, the holder(s) of each such Ordinary Share Equivalent (or any other Person). Except as contemplated
below, no further adjustment of the Exercise Price shall be made upon the actual issuance of such Ordinary Shares upon conversion, exercise or exchange of such Ordinary Share Equivalents or otherwise pursuant to the terms thereof, and if
any such issuance or sale of such Ordinary Share Equivalents is made upon exercise of any Options for which adjustment of the Warrant has been or is to be made pursuant to other provisions of this Section 3(b), except as contemplated
below, no further adjustment of the Exercise Price shall be made by reason of such issuance or sale.
|
iii. |
Change in Option Price or Rate of Conversion. If the purchase or exercise price provided for in any Options, the additional consideration, if any, payable upon the issue, conversion, exercise or exchange of any Ordinary Share
Equivalents, or the rate at which any Ordinary Share Equivalents are convertible into or exercisable or exchangeable for Ordinary Shares increases or decreases at any time (other than proportional changes in conversion or exercise prices,
as applicable, in connection with an event referred to in Section 3(a)), the Exercise Price in effect at the time of such increase or decrease shall be adjusted as provided in this Section 3(b) as if such Options or Ordinary Share
Equivalents were a new issuance and sale as of the time of such increase or decrease. For purposes of this Section 3(b)(iii), if the terms of any Option or Ordinary Share Equivalent that was outstanding as of the Issuance Date are
increased or decreased in the manner described in the immediately preceding sentence, then such Option or Ordinary Share Equivalents and the Ordinary Shares deemed issuable upon exercise, conversion or exchange thereof shall be deemed to
have been issued as of the date of such increase or decrease. No adjustment pursuant to this Section 3(b) shall be made if such adjustment would result in an increase of the Exercise Price then in effect.
|
iv. |
Calculation of Consideration Received. If any Option and/or Ordinary Share Equivalent and/or Adjustment Right (each, a “Component Security”) is issued in connection with the issuance or sale or deemed issuance or sale of
any other securities of the Company (“Units”), together comprising one integrated transaction, the Exercise Price in effect at the time of such issuance or sale or deemed issuance or sale shall be adjusted in accordance with the
formula in the first paragraph of this Section 3(b) based on clauses (b)(i) and (b)(ii) above, as applicable, based on the Company’s allocation of the purchase price among the different Component Securities included in the Units issued or
sold or deemed to be issued or sold in such transaction. If any Ordinary Shares, Options or Ordinary Share Equivalents are issued or sold or deemed to have been issued or sold for cash, the consideration received therefor will be deemed
to be the net amount of consideration received by the Company therefor. If any Ordinary Shares, Options or Ordinary Share Equivalents are issued or sold for a consideration other than cash, the amount of such consideration received by
the Company will be the fair value of such consideration, except where such consideration consists of publicly traded securities, in which case the amount of consideration received by the Company for such securities will be the arithmetic
average of the VWAPs of such security for each of the five (5) Trading Days immediately preceding the date of receipt. If any Ordinary Shares, Options or Ordinary Share Equivalents are issued to the owners of the non-surviving entity in
connection with any merger in which the Company is the surviving entity, the amount of consideration therefor will be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as is
attributable to such Ordinary Shares, Options or Ordinary Share Equivalents (as the case may be). The fair value of any consideration other than cash or publicly traded securities will be determined jointly by the Company and the
Holder. If such parties are unable to reach agreement within ten (10) days after the occurrence of an event requiring valuation (the “Valuation Event”), the fair value of such consideration will be determined within five (5)
Trading Days after the tenth (10th) day following such Valuation Event by an independent, reputable appraiser jointly selected by the Company and the Holder. The determination of such appraiser shall be final and binding upon all parties
absent manifest error and the reasonable fees and expenses of such appraiser shall be borne by the Company.
|
v. |
Record Date. If the Company takes a record of the holders of Ordinary Shares for the purpose of entitling them (A) to receive a dividend or other distribution payable in Ordinary Shares, Options or in Ordinary Share Equivalents
or (B) to subscribe for or purchase Ordinary Shares, Options or Ordinary Share Equivalents, then such record date will be deemed to be the date of the issuance or sale of the Ordinary Shares deemed to have been issued or sold upon the
declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase (as the case may be).
|
i. |
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by facsimile or e-mail a notice setting forth the Exercise
Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
|
ii. |
Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Ordinary Shares, (B) the Company shall declare a special nonrecurring cash dividend on or a
redemption of the Ordinary Shares, (C) the Company shall authorize the granting to all holders of the Ordinary Shares rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the
approval of any shareholders of the Company shall be required in connection with any reclassification of the Ordinary Shares, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of
the assets of the Company, or any compulsory share exchange whereby the Ordinary Shares are converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or
winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or e-mail to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the
Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights
or warrants, or if a record is not to be taken, the date as of which the holders of record of the Ordinary Shares to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which
such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of record of the Ordinary Shares shall be entitled to exchange
their Ordinary Shares for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein
or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice required by this Warrant constitutes, or contains, material, non-public information
regarding the Company, the Company shall simultaneously file such notice with the Commission pursuant to a Report on Form 6-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such
notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
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Entera Bio Ltd.
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37 Walnut Street, Suite 300
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Wellesley Hills, MA 02481
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Attention: Adam Gridley, CEO
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Email: adam@enterabio.com
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ENTERA BIO LTD. | |||
By:
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Name | |||
Title |
Date of
exchange
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Amount of decrease in number
of Warrant Shares
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Amount of increase in number
of Warrant Shares
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Number of Warrant Shares
following such decrease or increase
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Signature of authorized
signatory of Warrant Agent
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||||
TO:
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ENTERA BIO LTD.
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Name of Investing Entity:
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||
Signature of Authorized Signatory of Investing Entity:
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||
Name of Authorized Signatory:
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||
Title of Authorized Signatory:
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||
Date:
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Name:
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(Please Print)
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Address:
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(Please Print)
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Phone Number:
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Email Address:
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THE COMPANY:
Entera Bio Ltd.
By: /s/ Adam Gridley
Name: Title:
Adam Gridley
Chief Executive Officer
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||
SUBSCRIBERS | |||
See Omnibus Signature Pages to the Subscription Agreement | |||
BROKER (INDIVIDUAL): | BROKER (ENTITY): | ||
GP Nurmenkari, Inc | |||
Print Name | Print Name of Entity | ||
By: /s/ Albert William Pezone | |||
Signature
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Name: Albert William Pezone
Title: CEO
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||
Broker: Address | |||
SUBSIDIARY
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STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION
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Entera Bio Inc.
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Delaware
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1. |
I have reviewed this annual report on Form 20-F of Entera Bio Ltd.;
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2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made,
in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
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4. |
The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
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(a) |
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;
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(b) |
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;
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(c) |
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
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(d) |
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
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5. |
The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s
auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
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(a) |
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
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(b) |
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.
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Date: March 26, 2020
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/s/ Jonathan Lieber
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Name: Jonathan Lieber
Title: Chief Financial Officer
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1. |
I have reviewed this annual report on Form 20-F of Entera Bio Ltd.;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made,
in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
|
4. |
The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
|
(a) |
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;
|
(b) |
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;
|
(c) |
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
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(d) |
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
|
5. |
The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s
auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
|
(a) |
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
|
(b) |
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.
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Date: March 26, 2020
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/s/ Jonathan Lieber
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Name: Jonathan Lieber
Title: Chief Financial Officer
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1.
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Company.
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By:
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/s/ Adam Gridley
|
|
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Name: Adam Gridley
|
|
|
Title: Chief Executive Officer
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1.
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Company.
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By:
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/s/ Jonathan Lieber
|
|
|
Name: Jonathan Lieber
|
|
|
Title: Chief Financial Officer
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/s/ Kesselman & Kesselman
Kesselman & Kesselman
Certified Public Accountants (lsr.)
A member firm of PricewaterhouseCoopers International Limited
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Tel-Aviv, Israel
March 26, 2020
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Kesselman & Kesselman, Trade Tower, 25 Hamered Street, Tel-Aviv 6812508, Israel,
P.O Box 50005 Tel-Aviv 6150001 Telephone: +972 -3- 7954555, Fax:+972 -3- 7954556, www.pwc.com/il
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