State of Israel
|
| |
3844
|
| |
Not Applicable
|
(State or Other Jurisdiction of
Incorporation or Organization) |
| |
(Primary Standard Industrial
Classification Code Number) |
| |
(I.R.S. Employer Identification No. )
|
Andrea L. Nicolás
Yossi Vebman Skadden, Arps, Slate, Meagher & Flom LLP One Manhattan West New York, New York 10001 Tel: +1-212-735-3000 Fax: +1-212-735-2000 |
| |
Ian Rostowsky
Amit, Pollak, Matalon & Co. APM House, 18 Raoul Wallenberg St. Building D. Ramat Hachayal Tel Aviv 6971915, Israel Tel: +972-3-568-9000 Fax: +972-73-297-8645 |
| |
Peter N. Handrinos
Wesley C. Holmes Latham & Watkins LLP 200 Clarendon Street Boston, Massachusetts 02116 Tel: +1-617-948-6000 Fax: +1-617-948-6001 |
| |
Chaim Friedland
Ari Fried Gornitzky & Co. Zion House 45 Rothschild Blvd. Tel Aviv 6578403, Israel Tel. +972-3-710-9191 Fax: +972-3-560-6555 |
Title of each Class of Securities to be Registered
|
| |
Amount to be
Registered(1) |
| |
Proposed Maximum
Offering Price Per Share(2) |
| |
Proposed Maximum
Aggregate Offering Price(1)(2) |
| |
Amount of
Registration Fee(3) |
Ordinary shares, par value NIS 0.01 per share
|
| |
6,764,705
|
| |
$18.00
|
| |
121,764,690
|
| |
$15,805.06
|
(1)
|
Includes ordinary shares that the underwriters may purchase pursuant to their option to purchase additional ordinary shares
|
(2)
|
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(a) under the Securities Act of 1933, as amended (the “Securities Act”).
|
(3)
|
The registration fee has previously been paid.
|
|
| |
Per share
|
| |
Total
|
Initial public offering price
|
| |
$
|
| |
$
|
Underwriting discounts and commissions(1)
|
| |
$
|
| |
$
|
Proceeds to us (before expenses)
|
| |
$
|
| |
$
|
(1)
|
Refer to “Underwriting” for additional information regarding underwriting compensation.
|
Cantor
|
| |
Oppenheimer & Co.
|
| |
Berenberg
|
| |
CIBC Capital Markets
|
|
| |
Page
|
| | ||
| | ||
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| | ||
| | ||
| | ||
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| | ||
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| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| |
•
|
Digital X-ray source with the potential to significantly reduce the costs of medical imaging systems. We believe our digital X-ray source technology will allow us to manufacture the Nanox.ARC, if cleared, at substantially lower costs compared to medical imaging systems that use a legacy analog X-ray source without sacrificing imaging quality. A lower cost device has the potential to substantially increase medical imaging availability and improve accessibility of early-detection services broadly across the globe.
|
•
|
Technology designed to improve upon the industry standard with integrated radiology diagnostics via a cloud-based MSaaS platform. The Nanox.ARC employs our novel digital X-ray source that is designed to be energy-efficient, smaller and can be more precisely controlled compared to existing X-ray source. By integrating the Nanox.CLOUD, we believe the Nanox System could provide a streamlined process where each scanned image is uploaded automatically to the cloud system and matched to a human radiology expert and decision assistive AI algorithms to provide scan reviews and diagnostics in a significantly shorter time frame than current diagnostics, which could substantially reduce wait-times for imaging results and increase early detection rates compared to currently employed imaging process protocols.
|
•
|
Business model designed to increase the availability of medical imaging. Our primary business model is based on a pay-per-scan pricing structure as opposed to the capital expenditure-based business model currently used by medical imaging manufacturing companies. We believe our business model will significantly reduce the price per scan compared to the current global average cost of $300 per scan, and has the potential to commoditize medical imaging services at prices that are affordable to a greater number of people. We believe our MSaaS business model has the potential to expand the total size of the X-ray-based medical imaging market.
|
•
|
Secure regulatory clearance for our medical imaging system. We expect to take a multi-step approach to the regulatory clearance process. As a first step, we submitted a 510(k) application for a single-source version of the Nanox.ARC to an accredited Review Organization under the Third Party Review Program in January 2020. As part of the review process, in March 2020, we received an additional information request, referred to as a major deficiency letter, from the Review Organization which, among other things, required us to provide additional data and other information to complete the application and to address certain deficiencies highlighted by the reviewer, including the results of certain performance tests. In response to the feedback we received from the Review Organization, we have conducted additional product testing and expect to submit the results from these tests, along with our response, to the Review Organization, in the third quarter of 2020. Our original timeline for completing the application was delayed due to the impact of COVID-19 on the external labs we work with to complete our product testing. We will continue to optimize and develop further features of the Nanox.ARC, and plan to submit an additional 510(k) application under the Third Party Review Program with respect to the multiple-source Nanox.ARC during the fourth quarter of 2020, which, if cleared, will be our commercial imaging system.
|
•
|
Jumpstart the MSaaS-based medical imaging market with strategic partnerships. We plan to produce and deploy an initial wave of approximately 15,000 Nanox.ARC units over the next three to four years to jumpstart the MSaaS-based medical imaging market. We have entered into a contract manufacturing agreement with a subsidiary of Foxconn for the commercial production and assembly of the Nanox.ARC and we have entered into commercial agreements with strategic regional partners for the deployment, operation and marketing of the Nanox System broadly across the globe, including in the United States and certain countries in Asia, Europe, Africa and South America. We plan to work with these partners to achieve local integrations into health maintenance organizations, electronic health record systems, payment methods and insurance coverage companies. In addition, we have entered into collaboration agreements with AI partners and are actively seeking collaboration opportunities, as we anticipate an industry shift to a digital and cloud-based subscription model will bring more digital healthcare disruptors into the market.
|
•
|
Maximize the commercial potential of our technology with simultaneous business models. We plan to commercialize our novel X-ray source technology by pursuing three simultaneous business models, which we believe will provide us the flexibility and long-term sustainability to monetize our technology.
|
•
|
Subscription Model: In certain countries, if permitted by the laws in the applicable jurisdiction, our primary sales strategy will be based on a pay-per-scan pricing structure, where we expect to sell the Nanox System at low cost or at no cost, with a suggested retail price per scan that is substantially lower than the current global average charge, and receive a portion of the proceeds from each scan as the right-to-use licensing fee and fees for usage of the Nanox.CLOUD, artificial intelligence capability and maintenance support.
|
•
|
Sales Model: In certain countries, to accommodate specific local regulatory requirements, we expect to sell the Nanox.ARC for a one-time charge at a price that is substantially less than current market offerings.
|
•
|
Licensing Model: For certain medical imaging market participants, we plan to tailor our X-ray source technology to their specific imaging systems to replace the legacy X-ray source or to license our X-ray source technology to them to develop new types of imaging systems. We expect to charge a one-time licensing fee upfront and receive recurring royalty payments for each system sold.
|
•
|
Leverage the Nanox System to bring added value to our collaborators. We expect that the Nanox System will enable us to accumulate a significant number of medical images, which have the potential to be used by collaborators, such as medical AI-analytics companies, through machine learning algorithms to increase the probability of early disease detection.
|
•
|
we are a development-stage company with limited operating history. We may never be able to effectuate our business plan or achieve any revenue or profitability. Therefore, at this stage of our business, potential investors have a high probability of losing their entire investment;
|
•
|
our efforts may never demonstrate the feasibility of our X-ray source technology for commercial applications;
|
•
|
we are highly dependent on the successful development, marketing and sale of our X-ray source technology and the related products and services;
|
•
|
our business models depend on the successful commercial application of Nanox.CLOUD, which is subject to numerous risks and uncertainties;
|
•
|
business interruptions resulting from the COVID-19 pandemic or similar public health crises could cause a disruption of the development, deployment or regulatory clearance of the Nanox System and adversely impact our business;
|
•
|
products utilizing our technology may need to be approved or cleared by the FDA and similar regulatory agencies worldwide. We may not receive, or may be delayed in receiving, the necessary approval or clearance for our future products, which would adversely affect business, financial condition, results of operations and products;
|
•
|
we may not be successful in implementing our business models;
|
•
|
we expect to depend on third parties to manufacture the Nanox.ARC and to supply certain component parts;
|
•
|
it is difficult and costly to protect our intellectual property and our proprietary technologies, and we may not be able to ensure their protection;
|
•
|
patent terms may be inadequate to protect our competitive position on our future products for an adequate amount of time;
|
•
|
our product candidates and operations are subject to extensive government regulation and oversight both in the United States and abroad, and our failure to comply with applicable requirements could harm our business;
|
•
|
under applicable employment laws, we may not be able to enforce covenants not to compete and therefore may be unable to prevent our competitors from benefiting from the expertise of some of our former employees; and
|
•
|
conditions in Israel could materially and adversely affect our business.
|
•
|
the option to include in an initial public offering registration statement only two years of audited financial statements and selected financial data and only two years of related disclosure;
|
•
|
reduced executive compensation disclosure; and
|
•
|
an exemption from the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) in the assessment of our internal control over financial reporting.
|
•
|
the last day of our fiscal year during which we have total annual revenue of at least $1.07 billion;
|
•
|
the last day of our fiscal year following the fifth anniversary of the closing of this offering;
|
•
|
the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt securities; or
|
•
|
the date on which we are deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which, among other things, would occur if the market value of our ordinary shares that are held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter.
|
•
|
the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act;
|
•
|
the sections of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and liability for insiders who profit from trades made in a short period of time;
|
•
|
the rules under the Exchange Act requiring the filing with the Securities and Exchange Commission (the “SEC”) of quarterly reports on Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K, upon the occurrence of specified significant events; and
|
•
|
Regulation Fair Disclosure (“Regulation FD”), which regulates selective disclosures of material information by issuers.
|
•
|
the majority of our executive officers or directors are U.S. citizens or residents;
|
•
|
more than 50% of our assets are located in the United States; or
|
•
|
our business is administered principally in the United States.
|
•
|
4,928,769 ordinary shares issuable upon the exercise of options to purchase ordinary shares outstanding under the NANO-X Imaging Ltd 2019 Equity Incentive Plan (the “2019 Equity Incentive Plan”) as of August 13, 2020, at a weighted average exercise price of $4.18 per share;
|
•
|
3,113,167 additional ordinary shares reserved for future issuance under our 2019 Equity Incentive Plan as of August 13, 2020;
|
•
|
4,536,901 ordinary shares issuable upon the exercise of warrants to purchase ordinary shares as of August 13, 2020, at a weighted average exercise price of $11.54 per share, which warrants shall not expire upon the closing of this offering if not exercised; and
|
•
|
147,059 ordinary shares issuable upon the exercise of warrants to purchase ordinary shares to be granted to A-Labs, which provided certain consulting services for this offering, at the closing of this offering, at an exercise price equal to the price per ordinary share in this offering. See “Business—Letter Agreement with A-Labs.”
|
•
|
the assumed issuance of 1,875,000 ordinary shares to Asia Beam Limited for an aggregate purchase price, before fees and expenses, of approximately $30.0 million on August 13, 2020 (see “—Recent Developments”);
|
•
|
the assumed exercise on a cashless basis immediately prior to the closing of this offering of outstanding warrants to purchase 553,506 ordinary shares that shall otherwise expire upon such closing, at a weighted average exercise price of $2.72 per share, with the fair market value of the ordinary shares determined based on an assumed initial public offering price of $17.00 per ordinary share, which is the midpoint of the price range set forth on the cover page of this prospectus;
|
•
|
the exercise on a cashless basis of warrants prior to the closing of this offering to purchase 99,507 ordinary shares that shall not expire upon such closing, at a price of $2.21 per share;
|
•
|
no exercise of the outstanding share options or warrants (other than as described above) after August 13, 2020;
|
•
|
no exercise by the underwriters of their option to purchase up to 882,352 additional ordinary shares from us; and
|
•
|
the adoption and effectiveness of our amended and restated articles of association, which will occur immediately prior to the closing of this offering.
|
|
| |
Six months ended June 30,
|
| |
Year ended December 31,
|
||||||
|
| |
2020
|
| |
2019
|
| |
2019
|
| |
2018
|
|
| |
($ in thousands, except
per share data) |
|||||||||
Consolidated Statement of Operations Data:
|
| |
|
| |
|
| |
|
| |
|
Research and development expenses
|
| |
$4,152
|
| |
$340
|
| |
$2,717
|
| |
$672
|
Marketing expenses
|
| |
1,745
|
| |
242
|
| |
1,556
|
| |
209
|
General and administrative expenses
|
| |
7,903
|
| |
1,079
|
| |
18,298
|
| |
1,023
|
Operating loss
|
| |
(13,800)
|
| |
(1,661)
|
| |
(22,571)
|
| |
(1,904)
|
Financial (income) expenses, net
|
| |
(14)
|
| |
14
|
| |
(8)
|
| |
5
|
Net loss for the year
|
| |
$(13,786)
|
| |
$(1,675)
|
| |
$(22,563)
|
| |
$(1,909)
|
Basic and diluted loss per ordinary share(1)
|
| |
$(0.47)
|
| |
$(0.07)
|
| |
$(0.90)
|
| |
$(0.09)
|
Weighted average number of ordinary shares outstanding – basic and diluted(1)
|
| |
29,273
|
| |
23,452
|
| |
25,181
|
| |
20,793
|
Pro forma basic and diluted loss per ordinary share(2)
|
| |
$(0.40)
|
| |
|
| |
$(0.75)
|
| |
|
Pro forma weighted average number of ordinary shares outstanding – basic and diluted(2)
|
| |
34,163
|
| |
|
| |
30,071
|
| |
|
(1)
|
See Note 7 to our unaudited condensed consolidated financial statements and Note 11 to our audited consolidated financial statements appearing at the end of this prospectus for further details on the calculation of basic and diluted net loss per share.
|
(2)
|
Pro forma loss per ordinary share is calculated by dividing loss for the period by the pro forma weighted average number of ordinary shares outstanding during the period, which gives effect to the Transactions (as defined and further described under “Capitalization”), as if the Transactions were consummated as of January 1, 2019.
|
|
| |
Actual
|
| |
Pro forma(2)
|
| |
Pro forma,
as adjusted(3) |
|
| |
As of June 30, 2020
|
||||||
|
| |
($ in thousands)
|
||||||
Consolidated Balance Sheet Data:
|
| |
|
| |
|
| |
|
Cash and cash equivalents
|
| |
$39,524
|
| |
$103,290
|
| |
$191,505
|
Working capital(1)
|
| |
37,846
|
| |
101,612
|
| |
189,827
|
Total assets
|
| |
43,581
|
| |
107,347
|
| |
195,562
|
Total liabilities
|
| |
3,222
|
| |
3,222
|
| |
3,222
|
Accumulated deficit
|
| |
(54,387)
|
| |
(54,387)
|
| |
(54,387)
|
Total shareholders’ equity
|
| |
40,359
|
| |
104,125
|
| |
192,340
|
(1)
|
We define working capital as current assets less current liabilities.
|
(2)
|
The summary pro forma balance sheet data gives effect to the Transactions (as defined and further described under “Capitalization”).
|
(3)
|
The summary pro forma as adjusted balance sheet data gives effect to (i) the Transactions (as defined and further described under “Capitalization”), and (ii) the issuance of 5,882,353 ordinary shares in this offering, at an assumed initial public offering price of $17.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting the estimated underwriting discounts and commissions and estimated offering expenses, including the fees payable to A-Labs, payable by us.
|
•
|
the Nanox.CLOUD requires a considerable investment of technical, financial, and legal resources, which may not be available to us;
|
•
|
it may require separate regulatory clearances or approvals;
|
•
|
it may not be technically viable to integrate the Nanox.CLOUD with the businesses of our potential customers and collaborators, such as local operators, radiologists, cloud storage providers, medical AI software providers and others;
|
•
|
market acceptance of the MSaaS model is affected by a variety of factors, including security, reliability, scalability, customization, performance, customer preference, patients’ concerns with entrusting a third party to store and manage their health data, public concerns regarding privacy and compliance with restrictive laws or regulations;
|
•
|
our cloud-based service may raise concerns among our customer base, including concerns regarding changes to pricing over time, service availability, information security of a cloud-based solution and access to medical images while offline;
|
•
|
the Nanox.CLOUD may be subject to computer system failures, cyber-attacks or other security breaches;
|
•
|
incorrect or improper implementation or use of the Nanox.CLOUD by third-party cloud-service providers under our Sales Model could result in customer dissatisfaction and harm our business and reputation;
|
•
|
undetected software errors or flaws in the Nanox.CLOUD could harm our reputation or decrease market acceptance of the MSaaS model; and
|
•
|
we may incur higher costs than we expected as we expand our cloud-based services.
|
•
|
our ability to achieve sufficient market acceptance by hospitals and clinics, providers of medical imaging services, medical professionals such as radiologists, third-party payors and others in the medical community;
|
•
|
our ability to compete with existing medical imaging technology companies;
|
•
|
our ability to establish, maintain and expand our sales, marketing and distribution networks;
|
•
|
our ability to obtain and/or maintain necessary regulatory approvals; and
|
•
|
our ability to effectively protect our intellectual property.
|
•
|
the process of manufacturing and deploying the Nanox System is a complex, multi-step process that depends on factors outside our control, and could cause us to expend significant time and resources prior to earning associated revenues;
|
•
|
the manufacturing cost of the Nanox.ARC may be higher than we expect, may increase significantly, or may increase at a higher rate than anticipated, and we may not be able to set or timely adjust our pay-per-scan pricing to compensate for any increased costs;
|
•
|
the manufacturing of the Nanox.ARC may take longer than we expected, and we may have insufficient manufacturing capacity and experience delays in the manufacturing and deployment of the Nanox System, which would have a negative impact on the timing of our revenues;
|
•
|
deployment and full utilization of the Nanox System may not be achieved or may take substantially longer than we expect, and we may not be able to deploy a sufficient number of units of the Nanox System to support our business or to effectively stimulate market interest;
|
•
|
a Nanox System may perform fewer scans per day than our estimates due to a number of factors, including low market acceptance rate, technical failures and downtime, service disruptions, outages or other performance problems, which would have a negative impact on our revenues and our ability to recover costs;
|
•
|
the implementation, integration and testing of the Nanox.CLOUD with our potential customers and collaborators can be complex, time-consuming and expensive for them, which may have a negative impact on the timing of our revenues;
|
•
|
as part of the Subscription Model, we will be responsible for maintenance of the Nanox System units we deploy, which may be more costly and time-consuming than we expect;
|
•
|
our customers may not be able to find or retain a sufficient number of radiologists to review the images generated by the Nanox System, especially as we deploy additional Nanox Systems and the volume of scans increases;
|
•
|
the portion of our pay-per-scan pricing allocated to our collaborators may not be acceptable to them, either now or in the future, and pricing negotiations with such collaborators may be a complex and time-consuming process;
|
•
|
our pay-per-scan pricing may not be sufficient to recover our costs and may not be adjusted in a timely manner, which could negatively affect our revenues or cause our revenues and results of operations to vary significantly from period to period;
|
•
|
we may be unsuccessful in maintaining our target price per scan because we do not control the price charged by local operators and higher prices may adversely affect market acceptance of the Nanox System; and
|
•
|
regulatory authorities may challenge our Subscription Model altogether, and impose significant civil, criminal, and administrative penalties, damages, fines, and/or exclusion from government funded healthcare programs, which could adversely affect our revenues and results of operations.
|
•
|
generate widespread awareness, acceptance and adoption of our technology and future products or services;
|
•
|
develop new or enhanced technologies or features that improve the convenience, efficiency, safety or perceived safety, and productivity of our technology and future products or services;
|
•
|
properly identify customer needs and deliver new products or services or product enhancements to address those needs;
|
•
|
limit the time required from prototype development to commercial production;
|
•
|
limit the timing and cost of regulatory approvals;
|
•
|
attract and retain qualified personnel and collaborators;
|
•
|
protect our inventions with patents or otherwise develop proprietary products and processes; and
|
•
|
secure sufficient capital resources to expand both our continued research and development, and sales and marketing efforts.
|
•
|
insufficient capacity or delays in meeting our demand;
|
•
|
inadequate manufacturing yields, inferior quality and excessive costs;
|
•
|
inability to manufacture products that meet the agreed upon specifications;
|
•
|
inability to obtain an adequate supply of materials;
|
•
|
inability to comply with the relevant regulatory requirements for the manufacturing process;
|
•
|
limited warranties on products supplied to us;
|
•
|
inability to comply with our contractual obligations;
|
•
|
potential increases in prices; and
|
•
|
increased exposure to potential misappropriation of our intellectual property.
|
•
|
effectiveness of the sales and marketing efforts of us, and our partners such as the local partners;
|
•
|
perception by medical professionals and patients of the convenience, safety, efficiency and benefits of the Nanox.ARC, the Nanox.CLOUD or products using our technology, compared to competing methods of medical imaging;
|
•
|
opposition from certain industry leaders, which may limit our ability to promote the Nanox.ARC or the Nanox.CLOUD and to penetrate into the medical imaging market in certain geographical areas;
|
•
|
the existence of established medical imaging technology;
|
•
|
willingness of market participants to accept the MSaaS model;
|
•
|
the changing and volatile U.S. and global economic environments, including as a result of the COVID-19 pandemic;
|
•
|
timing of market introduction of competing products, and the sales and marketing initiatives of such products;
|
•
|
press and blog coverage, social media coverage, and other publicity and public relations factors by others;
|
•
|
lack of financing or other resources to successfully develop and commercialize our technology and implement our business plan;
|
•
|
the level of commitment and support that we receive from our partners, such as local operators, cloud storage providers and medical AI software providers, as well as medical professionals such as radiologists; and
|
•
|
coverage determinations and reimbursement levels of third party payors.
|
•
|
reimbursement and insurance coverage;
|
•
|
our inability to find agencies, dealers or distributors in specific countries or regions;
|
•
|
our inability to directly control commercial activities of third parties;
|
•
|
limited resources to be deployed to a specific jurisdiction;
|
•
|
the burden of complying with complex and changing regulatory, tax, accounting and legal requirements;
|
•
|
different medical imaging practice and customs in foreign countries affecting acceptance in the marketplace;
|
•
|
import or export licensing and other requirements;
|
•
|
longer accounts receivable collection times;
|
•
|
longer lead times for shipping;
|
•
|
language barriers for technical training;
|
•
|
reduced protection of intellectual property rights in some foreign countries;
|
•
|
foreign currency exchange rate fluctuations; and
|
•
|
interpretations of contractual provisions governed by foreign laws in the event of a contract dispute.
|
•
|
limiting payments for imaging services in physician offices and free-standing imaging facility settings based upon rates paid to hospital outpatient departments;
|
•
|
reducing payments for certain imaging procedures when performed together with other imaging procedures in the same family of procedures on the same patient on the same day in the physician office and free-standing imaging facility setting;
|
•
|
making significant revisions to the methodology for determining the practice expense component of the Medicare payment applicable to the physician office and free-standing imaging facility setting which results in a reduction in payment; and
|
•
|
revising payment policies and reducing payment amounts for imaging procedures performed in the hospital outpatient setting.
|
•
|
disputes among payors as to which party is responsible for payment;
|
•
|
disparity in coverage among various payors;
|
•
|
disparity in information and billing requirements among payors; and
|
•
|
incorrect or missing billing information, which is required to be provided by the ordering physician.
|
•
|
we may not be able to control the amount and timing of resources that our collaborators may devote to our technology;
|
•
|
should a collaborator fail to comply with applicable laws, rules or regulations when performing services for us, we could be held liable for such violations;
|
•
|
our collaborators may have a shortage of qualified personnel, particularly radiologists who can review the medical images generated by the Nanox System, especially as we deploy additional Nanox Systems and the volume of scans increases;
|
•
|
we may be required to relinquish important rights, such as marketing and distribution rights;
|
•
|
business combinations or significant changes in a collaborator’s business strategy may adversely affect a collaborator’s willingness or ability to complete its obligations under any arrangement;
|
•
|
under certain circumstances, a collaborator could move forward with a competing product developed either independently or in collaboration with others, including our competitors;
|
•
|
our current or future collaborators may utilize our proprietary information in a way that could expose us to competitive harm;
|
•
|
our collaborators could obtain ownership or other control over intellectual property that is material to our business; and
|
•
|
collaborative arrangements are often terminated or allowed to expire, which could delay the ability to commercialize our technology.
|
•
|
decreased demand for the Nanox System;
|
•
|
injury to our reputation;
|
•
|
costs of related litigation;
|
•
|
substantial monetary awards to patients and others;
|
•
|
loss of revenue; and
|
•
|
the inability to commercialize future products.
|
•
|
our inability to demonstrate to the satisfaction of the FDA or the applicable regulatory entity or notified body that our product candidates are safe or effective for their intended uses;
|
•
|
the disagreement of the FDA or the applicable foreign regulatory body with the design or implementation of our clinical trials or the interpretation of data from pre-clinical studies or clinical trials;
|
•
|
serious and unexpected adverse effects experienced by participants in our clinical trials;
|
•
|
the data from our pre-clinical studies and clinical trials may be insufficient to support clearance or approval, where required;
|
•
|
our inability to demonstrate that the clinical and other benefits of the device outweigh the risks;
|
•
|
the manufacturing process or facilities we use may not meet applicable requirements; and
|
•
|
the potential for approval policies or regulations of the FDA or applicable foreign regulatory bodies to change significantly in a manner rendering our clinical data or regulatory filings insufficient for clearance or approval.
|
•
|
untitled letters or warning letters;
|
•
|
fines, injunctions, consent decrees and civil penalties;
|
•
|
recalls, termination of distribution, administrative detention, or seizure of our products;
|
•
|
customer notifications or repair, replacement or refunds;
|
•
|
operating restrictions or partial suspension or total shutdown of production;
|
•
|
delays in or refusal to grant our requests for future clearances or approvals or foreign marketing authorizations of new products, new intended uses, or modifications to existing products;
|
•
|
withdrawals or suspensions of product clearances or approvals, resulting in prohibitions on sales of our products;
|
•
|
FDA refusal to issue certificates to foreign governments needed to export products for sale in other countries; and
|
•
|
criminal prosecution.
|
•
|
The U.S. federal healthcare program 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 federal healthcare programs such as Medicare and Medicaid. Although there are a number of statutory exemptions and regulatory safe harbors protecting certain common activities from prosecution, the exemptions and safe harbors are drawn narrowly and practices that involve remuneration to those who prescribe, purchase, or recommend medical devices, including certain discounts, or engaging consultants as speakers or consultants, may be subject to scrutiny if they do not fit squarely within the exemption or safe harbor. Our practices may not in all cases meet all of the criteria for safe harbor protection from anti-kickback liability. Moreover, there are no safe harbors for many common practices, such as educational and research grants. Liability may be established without a person or entity having actual knowledge of the federal Anti-Kickback Statute or specific intent to violate it. 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 civil False Claims Act. Due to the breadth of these laws, the narrowness of statutory exceptions and regulatory safe harbors available, and the range of interpretations to which they are subject, it is possible that some of our current or future practices might be challenged under one or more of these laws, including, without limitation, our proposed Subscription Model, and our advisory, consulting and royalty agreements with certain physicians who receive compensation, in part, in the form of stock or stock options.
|
•
|
The federal civil False Claims Act prohibits, among other things, any person from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment of government funds, or knowingly making, using, or causing to be made or used, a false record or statement material to an obligation to pay money to the government or knowingly concealing or knowingly and improperly avoiding, decreasing, or concealing an obligation to pay money to the federal government. In recent years, several healthcare companies have faced enforcement actions under the federal False Claims Act for, among other things, allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product or causing false claims to be submitted because of the company’s marketing the product for unapproved, and thus non-reimbursable, uses. False Claims Act liability is potentially significant in the healthcare industry because the statute provides for treble damages and mandatory penalties of tens of thousands of dollars per false claim or statement. Healthcare companies also are subject to other federal false claims laws, including, among others, federal criminal healthcare fraud and false statement statutes that extend to non-government health benefit programs.
|
•
|
The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”), imposes criminal and civil liability for knowingly and willfully executing a scheme to defraud any healthcare benefit program, or 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 healthcare benefits, items or services. In addition, HIPAA, as amended by HITECH, and their respective implementing regulations impose obligations, including mandatory contractual terms, on covered healthcare providers, health plans, as well as their business associates, with respect to safeguarding the privacy, security and transmission of individually identifiable health information.
|
•
|
The Physician Payment Sunshine Act, implemented as the Open Payments program, requires manufacturers of certain products reimbursed by Medicare, Medicaid, or the Children’s Health Insurance Program to track and report to the federal government payments and transfers of value that they make to physicians and teaching hospitals, certain other healthcare professionals beginning in 2022, group purchasing organizations, and ownership interests held by physicians and their families, and provides for public disclosures of these data. Manufacturers are required to submit annual reports to the government and failure to do so may result in civil monetary penalties for all payments, transfers of value and ownership or investment interests not reported in an annual submission, and may result in liability under other federal laws and regulations.
|
•
|
Many states have adopted laws and regulations analogous to the federal laws cited above, including state anti-kickback and false claims laws, which may apply to items or services reimbursed under Medicaid and other state programs or, in several states, regardless of the payer. Several states have enacted legislation requiring medical device companies to, among other things, establish marketing compliance programs; file periodic reports with the state, including reports on gifts and payments to individual health care providers; make periodic public disclosures on sales, marketing, pricing, clinical trials and other activities; and/or register their sales representatives. Some states prohibit specified sales and marketing practices, including the provision of gifts, meals, or other items to certain health care providers.
|
•
|
strengthen the rules on placing devices on the market and reinforce surveillance once they are available;
|
•
|
establish explicit provisions on manufacturers’ responsibilities for follow-up regarding the quality, performance and safety of devices placed on the market;
|
•
|
improve the traceability of medical devices throughout the supply chain to the end-user or patient through a unique identification number;
|
•
|
set up a central database to provide patients, healthcare professionals and the public with comprehensive information on products available in the EU; and
|
•
|
strengthened rules for the assessment of certain high-risk devices, which may have to undergo an additional check by experts before they are placed on the market.
|
•
|
Imposes an annual excise tax of 2.3% on any entity that manufactures or imports medical devices offered for sale in the United States, which, through a series of legislative amendments, was suspended, effective January 1, 2016 and subsequently repealed altogether on December 20, 2019;
|
•
|
Establishes a new Patient-Centered Outcomes Research Institute to oversee and identify priorities in comparative clinical effectiveness research in an effort to coordinate and develop such research; and
|
•
|
Implements Medicare payment system reforms including a national pilot program on payment bundling to encourage hospitals, physicians and other providers to improve the coordination, quality and efficiency of certain healthcare services through bundled payment models.
|
•
|
actual or anticipated fluctuations in results of operations;
|
•
|
actual or anticipated changes in our growth rate relative to our competitors, as well as announcements by us or our competitors of significant business developments, changes in relationships with our target customers, manufacturers or suppliers, acquisitions or expansion plans;
|
•
|
failure to meet or exceed financial estimates and projections of the investment community or that we provide to the public, as well as variance in our financial performance from the expectations of market analysts;
|
•
|
issuance of new or updated research or reports by securities analysts;
|
•
|
share price and volume fluctuations attributable to inconsistent trading volume levels of our shares;
|
•
|
additions or departures of key management or other personnel;
|
•
|
our involvement in litigation;
|
•
|
disputes or other developments related to proprietary rights, including patents, litigation matters, and our ability to obtain patent protection for our technology;
|
•
|
announcement or expectation of additional debt or equity financing efforts;
|
•
|
sales of our ordinary shares or other securities by us, our insiders or our other shareholders, or the perception that these sales may occur in the future;
|
•
|
the trading volume of our ordinary shares;
|
•
|
market conditions in our industry;
|
•
|
changes in the estimation of the future size and growth rate of our markets; and
|
•
|
general economic, market or political conditions in the United States or elsewhere.
|
•
|
our ability to develop and commercialize our technology and future products or services;
|
•
|
developments or disputes concerning our product’s intellectual property rights;
|
•
|
our or our competitors’ technological innovations;
|
•
|
fluctuations in the valuation of companies perceived by investors to be comparable to us;
|
•
|
announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships, joint ventures, capital commitments, new technologies or patents;
|
•
|
failure to complete significant transactions or collaborate with vendors in manufacturing our product; and
|
•
|
proposals for legislation that would place restrictions on the price of medical therapies.
|
•
|
we have hired a corporate controller with U.S. GAAP and SEC reporting experience and are continuing to seek additional financial professionals to increase the number of qualified financial reporting personnel;
|
•
|
we are selecting and implementing a new enterprise resource planning system;
|
•
|
we are developing, communicating and implementing an accounting policy manual for our financial reporting personnel for recurring transactions and period-end closing processes; and
|
•
|
we are establishing monitoring and oversight controls for non-recurring and complex transactions to ensure the accuracy and completeness of our consolidated financial statements and related disclosures.
|
•
|
The initiation, timing, progress and results of our research and development, manufacturing and commercialization activities with respect to our X-ray source technology, the Nanox.ARC, the Nanox.CLOUD and the Nanox System;
|
•
|
our ability to successfully demonstrate the feasibility of our technology for commercial applications;
|
•
|
our expectations regarding the necessity of, timing of filing for, and receipt of, regulatory clearances or approvals regarding our technology, the Nanox.ARC and the Nanox.CLOUD;
|
•
|
our ability to secure and maintain required FDA clearance and similar approvals from regulatory agencies worldwide and comply with applicable quality standards and regulatory requirements;
|
•
|
our ability to manufacture the Nanox.ARC, if cleared, at substantially lower costs compared to medical imaging systems that use a legacy analog X-ray source;
|
•
|
our ability to manufacture, market and deploy approximately 15,000 Nanox.ARC units within the contemplated timeframe;
|
•
|
our ability to meet our planned deployment schedule for the Nanox System units within the contemplated timeframe;
|
•
|
the pricing structure of our products and services, if such products and services receive regulatory clearance or approval;
|
•
|
the implementation of our business models;
|
•
|
our expectations regarding collaborations with third-parties and their potential benefits;
|
•
|
our ability to enter into and maintain our arrangements with third-party manufacturers and suppliers;
|
•
|
our ability to conduct business globally;
|
•
|
our expectations regarding when certain patents may be issued and the protection and enforcement of our intellectual property rights;
|
•
|
our ability to operate our business without infringing the intellectual property rights and propriety technology of third parties;
|
•
|
regulatory developments in the United States and other jurisdictions;
|
•
|
estimates of our expenses, future revenues, capital requirements and our needs for additional financing;
|
•
|
the rate and degree of market acceptance of our technology and our products;
|
•
|
development relating to our competitors and the medical imaging industry;
|
•
|
our estimates of the adoption of the MSaaS-based model by market participants;
|
•
|
our estimates regarding the market opportunities for our technology and our products;
|
•
|
our ability to attract, motivate and retain key executive managers;
|
•
|
our ability to comply with data protection laws, regulations and similar rules and to establish and maintain adequate cyber-security and data protection;
|
•
|
our ability to obtain third-party payor coverage or reimbursement of our Nanox System;
|
•
|
our expectation regarding the maintenance of our foreign private issuer and emerging growth company status;
|
•
|
our expectations regarding the use of proceeds from this offering;
|
•
|
our expectations regarding the closing of issuance and sale of our ordinary shares to Asia Beam Limited in the Private Placement;
|
•
|
the effect of the COVID-19 pandemic, including mitigation efforts and economic effects, on any of the foregoing or other aspects of our business operations, including but not limited to the development, deployment and regulatory clearance of the Nanox Systems; and
|
•
|
our success at managing other risks and uncertainties, including those listed under “Risk Factors.”
|
•
|
between $108 million to $159 million will be used to manufacture 12,000 Nanox.ARC units as part of the initial wave planned for global deployment and investment in manufacturing capacities; to the extent the cost-per-unit of the Nanox.ARC is higher than we expected or the amount of proceeds we receive is lower than we expected, we plan to reduce the number of units to be manufactured with such proceeds accordingly;
|
•
|
between $14 million to $24 million will be used for the shipping, installation and deployment costs of 12,000 units of the Nanox System; to the extent the number of units of the Nanox.ARC to be manufactured is reduced for the reasons described above, the amount of proceeds to be used for shipping, installation and deployment will be reduced accordingly;
|
•
|
between $5 million to $8 million will be used for the continued research and development of the Nanox.ARC, the development of the Nanox.CLOUD and for regulatory clearance in various regions, which we expect will be sufficient for obtaining the 510(k) medical device clearance with respect to the Nanox.ARC with the FDA; and
|
•
|
the remaining funds, if any, to be used for sales and marketing expenses, general and administrative expenses and general corporate purposes.
|
•
|
the existence of unforeseen or other opportunities or the need to take advantage of changes in timing of our existing activities;
|
•
|
the need or desire on our part to accelerate, increase, reduce or eliminate one or more existing initiatives due to, among other things, changing market conditions or competitive developments or interim results of research and development efforts;
|
•
|
results from our business development and marketing efforts;
|
•
|
the effect of federal, state, and local regulation on our business; and
|
•
|
the presentation of strategic opportunities of which we are not currently aware (including acquisitions, joint ventures, licensing and other similar transactions).
|
•
|
an actual basis;
|
•
|
a pro forma basis to give effect to (i) the receipt of approximately $66.1 million, before fees and expenses, and the issuance of 4,131,250 ordinary shares to certain investors after June 30, 2020 in connection with the Private Placement, (ii) the issuance of 653,013 ordinary shares immediately prior to the closing of this offering as a result of the assumed and actual exercises of warrants on a cashless basis held by certain of our shareholders and (iii) the issuance of 106,152 ordinary shares prior to the closing of this offering as a result of the exercise of warrants on a cash basis held by certain of our shareholders with aggregate proceeds of $0.2 million (collectively, the “Transactions”); and
|
•
|
on a pro forma as adjusted basis to give further effect to the issuance and sale of 5,882,353 ordinary shares by us in this offering at an assumed initial public offering price of $17.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, after deducting the estimated underwriting discounts and commissions and estimated offering expenses, including the fees payable to A-Labs, payable by us.
|
|
| |
As of June 30, 2020
|
||||||
|
| |
Actual
|
| |
Pro Forma
|
| |
Pro Forma
As Adjusted(1) |
|
| |
($ in thousands, except share and
per share amounts) |
||||||
Cash and cash equivalents
|
| |
$39,524
|
| |
$103,290
|
| |
$191,505
|
Shareholders’ equity:
|
| |
|
| |
|
| |
|
Ordinary Shares, par value NIS 0.01 per share; 40,000,000 shares authorized, actual; 100,000,000 shares authorized, pro forma and pro forma as adjusted; 30,679,965 shares issued and outstanding, actual; 35,570,380 shares issued and outstanding, pro forma; 41,452,733 shares issued and outstanding, pro forma as adjusted
|
| |
85
|
| |
99
|
| |
116
|
Additional paid-in capital
|
| |
94,661
|
| |
158,414
|
| |
246,612
|
Accumulated deficit
|
| |
(54,387)
|
| |
(54,387)
|
| |
(54,387)
|
Total shareholders’ equity
|
| |
40,359
|
| |
104,125
|
| |
192,340
|
Total capitalization
|
| |
$40,359
|
| |
$104,125
|
| |
$192,340
|
(1)
|
Each $1.00 increase or decrease in the assumed initial public offering price of $17.00 per share (which is the midpoint of the price range set forth on the cover page of this prospectus) would increase or decrease the amount of each of cash and cash equivalents, additional paid-in capital, total shareholders’ equity and total capitalization on a pro forma as adjusted basis by approximately $5.3 million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses, including the fees payable to A-Labs, payable by us. Each increase or decrease of 1.0 million in the number of ordinary shares we are offering would increase or decrease the pro forma as adjusted amount of each of cash and cash equivalents, additional paid-in capital, total shareholders’ equity and total capitalization by approximately $15.4 million, assuming no change in the assumed initial public offering price and after deducting the estimated underwriting discounts and commissions and estimated offering expenses, including the fees payable to A-Labs, payable by us.
|
•
|
4,586,424 ordinary shares issuable upon the exercise of options to purchase ordinary shares outstanding under the 2019 Equity Incentive Plan as of June 30, 2020, at a weighted average exercise price of $3.70 per share;
|
•
|
3,455,512 additional ordinary shares reserved for future issuance under our 2019 Equity Incentive Plan as of June 30, 2020;
|
•
|
4,536,901 ordinary shares issuable upon the exercise of warrants to purchase ordinary shares as of June 30, 2020, at a weighted average exercise price of $11.54 per share, which warrants shall not expire upon the closing of this offering if not exercised; and
|
•
|
147,059 ordinary shares issuable upon the exercise of warrants to purchase ordinary shares to be granted to A-Labs, which provided certain consulting services for this offering, at the closing of this offering, at an exercise price equal to the price per ordinary share in this offering.
|
•
|
subtracting our liabilities from our tangible assets as of June 30, 2020; and
|
•
|
dividing the difference by the number of ordinary shares outstanding as of June 30, 2020.
|
Assumed initial public offering price per share
|
| |
|
| |
$17.00
|
Historical net tangible book value per share as of June 30, 2020
|
| |
$1.31
|
| |
|
Increase per share attributable to the Transactions
|
| |
1.62
|
| |
|
Pro forma net tangible book value (deficit) per share as of June 30, 2020
|
| |
2.93
|
| |
|
Increase per share attributable to this offering
|
| |
1.71
|
| |
|
Pro forma as adjusted net tangible book value per share after this offering
|
| |
|
| |
$4.64
|
Dilution per share to new investors in this offering
|
| |
|
| |
$12.36
|
|
| |
Ordinary Shares Purchased
|
| |
Total Consideration
|
| |
Average Price
Per Share |
||||||
|
| |
Number
|
| |
%
|
| |
Amount
|
| |
%
|
| ||
Existing shareholders
|
| |
35,570,380
|
| |
86
|
| |
$158,512,491
|
| |
64
|
| |
$4.50
|
New investors
|
| |
5,882,353
|
| |
14
|
| |
88,214,780
|
| |
36
|
| |
15.00
|
Total
|
| |
41,452,733
|
| |
100%
|
| |
246,727,271
|
| |
100%
|
| |
|
•
|
the percentage of ordinary shares held by existing shareholders prior to such option exercise will decrease to approximately 84% of the total number of our ordinary shares outstanding after this offering; and
|
•
|
the number of shares held by new investors will increase to 6,764,705, or approximately 16% of the total number of our ordinary shares outstanding after this offering.
|
•
|
4,586,424 ordinary shares issuable upon the exercise of options to purchase ordinary shares outstanding under the 2019 Equity Incentive Plan as of June 30, 2020, at a weighted average exercise price of $3.70 per share;
|
•
|
3,455,512 additional ordinary shares reserved for future issuance under our 2019 Equity Incentive Plan as of June 30, 2020;
|
•
|
4,536,901 ordinary shares issuable upon the exercise of warrants to purchase ordinary shares as of June 30, 2020, at a weighted average exercise price of $11.54 per share, which warrants shall not expire upon the closing of this offering if not exercised; and
|
•
|
147,059 ordinary shares issuable upon the exercise of warrants to purchase ordinary shares to be granted to A-Labs, which provided certain consulting services for this offering, at the closing of this offering, at an exercise price equal to the price per ordinary share in this offering.
|
|
| |
Six months ended
June 30, |
| |
Year ended December 31,
|
||||||
|
| |
2020
|
| |
2019
|
| |
2019
|
| |
2018
|
|
| |
($ in thousands, except
per share data) |
|||||||||
Consolidated Statement of Operations Data:
|
| |
|
| |
|
| |
|
| |
|
Research and development expenses
|
| |
$4,152
|
| |
$340
|
| |
$2,717
|
| |
$672
|
Marketing expenses
|
| |
1,745
|
| |
242
|
| |
1,556
|
| |
209
|
General and administrative expenses
|
| |
7,903
|
| |
1,079
|
| |
18,298
|
| |
1,023
|
Operating loss
|
| |
(13,800)
|
| |
(1,661)
|
| |
(22,571)
|
| |
(1,904)
|
Financial (income) expenses, net
|
| |
(14)
|
| |
14
|
| |
(8)
|
| |
5
|
Net loss for the year
|
| |
$(13,786)
|
| |
$(1,675)
|
| |
$(22,563)
|
| |
$(1,909)
|
Basic and diluted loss per ordinary share(1)
|
| |
(0.47)
|
| |
(0.07)
|
| |
$(0.90)
|
| |
$(0.09)
|
Weighted average number of ordinary shares outstanding – basic and diluted(1)
|
| |
29,273
|
| |
23,452
|
| |
25,181
|
| |
20,793
|
(1)
|
Basic loss per share and diluted loss per share are the same because outstanding options would be anti-dilutive due to our net losses in these periods. See Note 7 to our unaudited condensed consolidated financial statements and Note 11 to our audited consolidated financial statements appearing at the end of this prospectus for further details on the calculation of basic and diluted net loss per share attributable to our ordinary shareholders.
|
|
| |
As of June 30,
|
| |
As of December 31,
|
|||
|
| |
2020
|
| |
2019
|
| |
2018
|
|
| |
($ in thousands)
|
||||||
Consolidated Balance Sheet Data:
|
| |
|
| |
|
| |
|
Cash and cash equivalents
|
| |
$39,524
|
| |
$8,072
|
| |
$5
|
Working capital(1)
|
| |
37,846
|
| |
(10,627)
|
| |
(6,540)
|
Total assets
|
| |
43,581
|
| |
11,871
|
| |
1,855
|
Total liabilities
|
| |
3,222
|
| |
20,649
|
| |
8,239
|
Accumulated deficit
|
| |
(54,387)
|
| |
(40,601)
|
| |
(18,038)
|
Total shareholders’ equity (deficit)
|
| |
40,359
|
| |
(8,778)
|
| |
(6,384)
|
(1)
|
We define working capital as current assets less current liabilities.
|
•
|
expenses incurred in connection with the development of our products, including payments made pursuant to agreements with third parties, such as outside consultants related to process development and manufacturing activities, as well as patent registrations;
|
•
|
costs of components and materials, including payments made pursuant to agreements with third parties;
|
•
|
costs of laboratory supplies incurred for each program;
|
•
|
facilities, depreciation and other expenses, including direct or allocated expenses for rent and maintenance of facilities, as well as insurance costs;
|
•
|
costs related to compliance with regulatory requirements; and
|
•
|
employee-related expenses, including salaries, related benefits and share-based compensation expenses for employees engaged in research and development activities.
|
•
|
the timing and progress of development activities;
|
•
|
our ability to maintain our current research and development programs and to establish new ones;
|
•
|
the receipt of regulatory approvals from applicable regulatory authorities without the need for independent clinical trials or validation;
|
•
|
the timing, receipt and terms of any marketing approvals from applicable regulatory authorities;
|
•
|
our ability to establish new licensing or collaboration arrangements;
|
•
|
the performance of our future collaborators, if any;
|
•
|
establishing commercial manufacturing capabilities or making arrangements with third-party manufacturers;
|
•
|
obtaining, maintaining, defending and enforcing patent claims and other intellectual property rights;
|
•
|
launching commercial sales of our products, including the Nanox.ARC hardware and Nanox.CLOUD software, whether alone or in collaboration with others; and
|
•
|
maintaining a continued acceptable safety profile of the products following approval.
|
|
| |
Six months ended June 30,
|
| |
|
|||
|
| |
2020
|
| |
2019
|
| |
Change
|
|
| |
($ in thousands)
|
||||||
Operating expenses
|
| |
|
| |
|
| |
|
Research and development
|
| |
$4,152
|
| |
$340
|
| |
$3,812
|
Marketing
|
| |
1,745
|
| |
242
|
| |
1,503
|
General and administrative
|
| |
7,903
|
| |
1,079
|
| |
6,824
|
Operating loss
|
| |
(13,800)
|
| |
(1,661)
|
| |
(12,139)
|
Financial (income) expenses, net
|
| |
(14)
|
| |
14
|
| |
(28)
|
Net loss
|
| |
$(13,786)
|
| |
$(1,675)
|
| |
$(12,111)
|
|
| |
Six months ended June 30,
|
|||
|
| |
2020
|
| |
2019
|
|
| |
($ in thousands)
|
|||
Research and Development Expenses:
|
| |
|
| |
|
R&D - salaries and wages
|
| |
$723
|
| |
$151
|
Share-based compensation
|
| |
1,917
|
| |
0
|
R&D - professional services
|
| |
1,497
|
| |
157
|
Other
|
| |
15
|
| |
32
|
Total
|
| |
$4,152
|
| |
$340
|
|
| |
Six months ended June 30,
|
|||
|
| |
2020
|
| |
2019
|
|
| |
($ in thousands)
|
|||
Marketing Expenses:
|
| |
|
| |
|
Marketing – salaries and wages
|
| |
$246
|
| |
$8
|
Marketing and business development
|
| |
855
|
| |
234
|
Share-based compensation
|
| |
644
|
| |
0
|
Total
|
| |
$1,745
|
| |
$242
|
|
| |
Year ended December 31,
|
| |
|
|||
|
| |
2019
|
| |
2018
|
| |
Change
|
|
| |
($ in thousands)
|
||||||
Operating expenses
|
| |
|
| |
|
| |
|
Research and development
|
| |
$2,717
|
| |
$672
|
| |
$2,045
|
Marketing
|
| |
1,556
|
| |
209
|
| |
1,347
|
General and administrative
|
| |
18,298
|
| |
1,023
|
| |
17,275
|
Operating loss
|
| |
(22,571)
|
| |
(1,904)
|
| |
(20,667)
|
Financial (income) expenses, net
|
| |
(8)
|
| |
5
|
| |
(13)
|
Net loss
|
| |
$(22,563)
|
| |
$(1,909)
|
| |
$(20,654)
|
|
| |
Year ended December 31,
|
|||
|
| |
2019
|
| |
2018
|
|
| |
($ in thousands)
|
|||
Research and Development Expenses:
|
| |
|
| |
|
R&D - salaries and wages
|
| |
$437
|
| |
$131
|
Share-based compensation
|
| |
661
|
| |
—
|
R&D - professional services
|
| |
1,450
|
| |
519
|
Other
|
| |
169
|
| |
22
|
Total
|
| |
$2,717
|
| |
$672
|
|
| |
Year ended December 31,
|
|||
|
| |
2019
|
| |
2018
|
|
| |
($ in thousands)
|
|||
Marketing Expenses:
|
| |
|
| |
|
Marketing – salaries and wages
|
| |
$200
|
| |
$—
|
Marketing and business development
|
| |
$439
|
| |
$ 59
|
Share-based compensation
|
| |
617
|
| |
—
|
Other
|
| |
300
|
| |
150
|
Total
|
| |
$1,556
|
| |
$209
|
|
| |
Six months ended June 30,
|
| |
Year ended December 31,
|
||||||
|
| |
2020
|
| |
2019
|
| |
2019
|
| |
2018
|
|
| |
($ in thousands)
|
|||||||||
Net cash used in operating activities
|
| |
$(4,738)
|
| |
$(1,060)
|
| |
$(5,524)
|
| |
$(3,671)
|
Net cash used in investing activities
|
| |
(244)
|
| |
(80)
|
| |
(125)
|
| |
(73)
|
Net cash provided by financing activities
|
| |
36,481
|
| |
9,264
|
| |
13,861
|
| |
3,684
|
Net change in cash and cash equivalents and restricted cash
|
| |
$31,499
|
| |
$8,124
|
| |
$8,212
|
| |
$(60)
|
•
|
seek regulatory approvals for any additional products;
|
•
|
seek to discover and develop additional products;
|
•
|
establish a manufacturing, sales, marketing, medical affairs and distribution infrastructure to commercialize the Nanox System for which we may obtain marketing approval and intend to commercialize on our own or jointly;
|
•
|
hire additional quality control and scientific personnel;
|
•
|
expand our operational, financial and management systems and increase personnel, including personnel to support our clinical development, manufacturing and commercialization efforts and our operations as a public company;
|
•
|
maintain, expand and protect our intellectual property portfolio; and
|
•
|
acquire or in-license other products and technologies.
|
•
|
the scope, progress, results and costs of researching and developing the Nanox System;
|
•
|
the costs, timing and outcome of regulatory review of the Nanox.ARC;
|
•
|
the costs of future activities, including product sales, medical affairs, marketing, manufacturing and distribution, for the Nanox System for which we receive marketing approval;
|
•
|
commercial manufacturing, shipping, installation and deployment of the Nanox System and sufficient inventory to support commercial launch;
|
•
|
the revenue, if any, received from commercial sale of the Nanox System, should the Nanox.ARC receive marketing approval;
|
•
|
the cost and timing of hiring new employees to support our continued growth;
|
•
|
the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;
|
•
|
the ability to establish and maintain collaborations on favorable terms, if at all; and
|
•
|
the timing, receipt and amount of sales of the Nanox System, if any.
|
|
| |
Payment due by period
|
||||||||||||
|
| |
($ in thousands)
|
||||||||||||
Contractual Obligations
|
| |
Total
|
| |
Less than
1 year |
| |
1-3 years
|
| |
3-5 years
|
| |
More than
5 years |
Capital (Finance) Lease Obligations
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Operating Lease Obligations
|
| |
$526
|
| |
$140
|
| |
$386
|
| |
—
|
| |
—
|
Purchase Obligations
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Total
|
| |
$526
|
| |
$140
|
| |
$386
|
| |
—
|
| |
—
|
|
| |
%
|
Computers
|
| |
10-33
|
Office furniture and lab equipment
|
| |
10-20
|
Level 1:
|
Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.
|
Level 2:
|
Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.
|
Level 3:
|
Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.
|
•
|
Digital X-ray source with the potential to significantly reduce the costs of medical imaging systems. We believe our digital X-ray source technology will allow us to manufacture the Nanox.ARC, if cleared, at substantially lower costs compared to medical imaging systems that use a legacy analog X-ray source without sacrificing imaging quality. A lower cost device has the potential to substantially increase medical imaging availability and improve accessibility of early-detection services broadly across the globe.
|
•
|
Technology designed to improve upon the industry standard with integrated radiology diagnostics via a cloud-based MSaaS platform. The Nanox.ARC employs our novel digital X-ray source that is designed to be energy-efficient, smaller and can be more precisely controlled compared to existing X-ray source. By integrating the Nanox.CLOUD, we believe the Nanox System could provide a streamlined process where each scanned image is uploaded automatically to the cloud system and matched to a human radiology expert and decision assistive AI algorithms to provide scan reviews and diagnostics in a significantly shorter time frame than current diagnostics, which could substantially reduce wait-times for imaging results and increase early detection rates compared to currently employed imaging process protocols.
|
•
|
Business model designed to increase the availability of medical imaging. Our primary business model is based on a pay-per-scan pricing structure as opposed to the capital expenditure-based business model currently used by medical imaging manufacturing companies. We believe our business model will significantly reduce the price per scan compared to the current global average cost of $300 per scan, and has the potential to commoditize medical imaging services at prices that are affordable to a greater number of people. We believe our MSaaS business model has the potential to expand the total size of the X-ray-based medical imaging market.
|
•
|
Secure regulatory clearance for our medical imaging system. We expect to take a multi-step approach to the regulatory clearance process. As a first step, we submitted a 510(k) application for a single-source version of the Nanox.ARC to an accredited Review Organization under the Third Party Review Program in January 2020. As part of the review process, in March 2020, we received an additional information request, referred to as a major deficiency letter, from the Review Organization which, among other things, required us to provide additional data and other information to complete the application and to address certain deficiencies highlighted by the reviewer, including the results of certain performance tests. In response to the feedback we received from the Review Organization, we have conducted additional product testing and expect to submit the results from these tests, along with our response, to the Review Organization, in the third quarter of 2020. Our original timeline for
|
•
|
Jumpstart the MSaaS-based medical imaging market with strategic partnerships. We plan to produce and deploy an initial wave of approximately 15,000 Nanox.ARC units over the next three to four years to jumpstart the MSaaS-based medical imaging market. We have entered into a contract manufacturing agreement with FITI, a subsidiary of Foxconn for the commercial production and assembly of the Nanox.ARC and we have entered into commercial agreements with strategic regional partners for the deployment, operation and marketing of the Nanox System broadly across the globe, including in the United States and certain countries in Asia, Europe, Africa and South America. Specifically, we have entered into eight multi-year MSaaS agreements with partners for the deployment of Nanox Systems in various regions that we expect to be guaranteed by standby letters of credit for the amount of the agreed minimum annual fee. See “—Commercial Agreements—MSaaS Agreements.” In addition, we have entered into a collaboration agreement with USARAD Holdings (“USARAD”) for deploying and operating the Nanox System and establishing connections with the radiologist community in the United States. We plan to work with these partners to achieve local integrations into health maintenance organizations, electronic health record systems, payment methods and insurance coverage companies. In addition, we have entered into collaboration agreements with AI partners and are actively seeking collaboration opportunities, as we anticipate an industry shift to a digital and cloud-based subscription model will bring more digital healthcare disruptors into the market. See “—Commercial Agreements—Collaboration Agreements—Collaboration Agreements with our AI Partners.”
|
•
|
Maximize the commercial potential of our technology with simultaneous business models. We plan to commercialize our novel X-ray source technology by pursuing three simultaneous business models, which we believe will provide us the flexibility and long-term sustainability to monetize our technology.
|
•
|
Subscription Model: In certain countries, if permitted by the laws in the applicable jurisdiction, our primary sales strategy will be based on a pay-per-scan pricing structure, where we expect to sell the Nanox System at low cost or at no cost, with a suggested retail price per scan that is substantially lower than the current global average charge, and receive a portion of the proceeds from each scan as the right-to-use licensing fee and fees for usage of the Nanox.CLOUD, artificial intelligence capability and maintenance support.
|
•
|
Sales Model: In certain countries, to accommodate specific local regulatory requirements, we expect to sell the Nanox.ARC for a one-time charge at a price that is substantially less than current market offerings.
|
•
|
Licensing Model: For certain medical imaging market participants, we plan to tailor our X-ray source technology to their specific imaging systems to replace the legacy X-ray source or to license our X-ray source technology to them to develop new types of imaging systems. We expect to charge a one-time licensing fee upfront and receive recurring royalty payments for each system sold.
|
•
|
Leverage the Nanox System to bring added value to our collaborators. We expect that the Nanox System will enable us to accumulate a significant number of medical images, which have the potential to be used by collaborators, such as medical AI-analytics companies, through machine learning algorithms to increase the probability of early disease detection.
|
*
|
We expect to contract with third parties to provide maintenance and support services.
|
Entity
|
| |
Date of MSaaS
Agreement |
| |
Region
|
| |
Number of
Nanox Systems to be Provided |
| |
Minimum
Annual Fee and Amount of Letter of Credit (approximate) |
| |
Initial
Term |
| |
Renewal
Term |
The Gateway Group, Ltd.
|
| |
February 11, 2020
|
| |
Australia, New Zealand and Norway
|
| |
1,000
|
| |
$58 million
|
| |
3 years
|
| |
3 years
|
Golden Vine International Company, Ltd.
|
| |
May 28, 2020
|
| |
Taiwan and Singapore
|
| |
500
|
| |
Up to $29 million
|
| |
5 years
|
| |
5 years*
|
Promedica Bioelectronics s.r.l.
|
| |
May 29, 2020
|
| |
Italy
|
| |
500
|
| |
$29 million
|
| |
4 years
|
| |
3 years
|
JSC Roel Group
|
| |
May 29, 2020
|
| |
Russian Federation
|
| |
500
|
| |
$12.6 million
|
| |
5 years
|
| |
5 years
|
Clarity Medical Solution, a division of “Grodnobioproduct” LLC
|
| |
June 4, 2020
|
| |
Belarus
|
| |
100
|
| |
$3.7 million
|
| |
3 years
|
| |
4 years
|
Gold Rush
|
| |
June 16, 2020
|
| |
South Africa
|
| |
500
|
| |
$15.5 million
|
| |
3 years
|
| |
3 years
|
LATAM Business Development Group Ltd.
|
| |
July 6, 2020
|
| |
Brazil
|
| |
1,000
|
| |
$4.8 million
(9 million Letter of Credit) in Year 1 $14.5 million in Year 2 $24.2 million in Year 3*** |
| |
6 years
|
| |
3 years
|
APR 1998 S.L.
|
| |
July 25, 2020
|
| |
Spain
|
| |
420
|
| |
$11.4 million
|
| |
5 years
|
| |
5 years**
|
TOTAL
|
| |
|
| |
|
| |
4,520
|
| |
$163.8 million
|
| |
|
| |
|
*
|
The MSaaS Agreement with Golden Vine International Company, Ltd. may also be terminated by either party upon notice stipulating that the notifying party has come to the conclusion, based on market evidence, that there is no business merit for the Nanox.ARC in Taiwan or Singapore.
|
**
|
The MSaaS Agreement with APR 1998 S.L. may also be terminated by the service provider at the end of a six-month trial period by sending within five days a formal notice to the Company if trial results are not satisfactory.
|
***
|
The enforceability of the standby letter of credit from LATAM Business Development Group Ltd. in our favor is also conditioned upon the parties finalizing within 90 days of the date of the agreement, in mutually agreed form, the terms and conditions of the statement of work, the system requirement specifications and the service level agreement.
|
•
|
Competing digital X-ray sources with same or better attributes; and
|
•
|
Competing enterprises operating an MSaaS business model.
|
•
|
establishment registration and device listing with the FDA;
|
•
|
QSR requirements, which require manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the design and manufacturing process;
|
•
|
labeling regulations and FDA prohibitions against the promotion of investigational products, or the promotion of “off-label” uses of cleared or approved products;
|
•
|
requirements related to promotional activities;
|
•
|
clearance or approval of product modifications to 510(k)-cleared devices that could significantly affect safety or effectiveness or that would constitute a major change in intended use of one of our cleared devices, or approval of certain modifications to PMA-approved devices;
|
•
|
medical device reporting regulations, which require that a manufacturer report to the FDA if a device it markets may have caused or contributed to a death or serious injury, or has malfunctioned and the device or a similar device that it markets would be likely to cause or contribute to a death or serious injury, if the malfunction were to recur;
|
•
|
correction, removal and recall reporting regulations, which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDCA that may present a risk to health;
|
•
|
the FDA’s recall authority, whereby the agency can order device manufacturers to recall from the market a product that is in violation of governing laws and regulations; and
|
•
|
post-market surveillance activities and regulations, which apply when deemed by the FDA to be necessary to protect the public health or to provide additional safety and effectiveness data for the device.
|
•
|
warning letters, untitled letters, fines, injunctions, consent decrees and civil penalties;
|
•
|
recalls, withdrawals or administrative detention or seizure of our products;
|
•
|
operating restrictions or partial suspension or total shutdown of production;
|
•
|
refusing or delaying requests for 510(k) marketing clearance or PMA approvals of new products or modified products;
|
•
|
withdrawing 510(k) clearances or PMA approvals that have already been granted;
|
•
|
refusal to grant export approvals for our products; or
|
•
|
criminal prosecution.
|
Area of Activity
|
| |
As of
June 30, 2020 |
General and Administrative
|
| |
11
|
Research, Development and Quality Assurance
|
| |
15
|
Sales and Marketing
|
| |
1
|
Total
|
| |
27
|
Name
|
| |
Age
|
| |
Position
|
Executive Officers
|
| |
|
| |
|
Ran Poliakine
|
| |
52
|
| |
Founder, Chief Executive Officer and Director*
|
Itzhak Maayan
|
| |
55
|
| |
Chief Financial Officer
|
Tal Shank
|
| |
42
|
| |
Vice President Corporate Development
|
Yoel Raab
|
| |
65
|
| |
Chief Technology Officer
|
Anat Kaphan
|
| |
50
|
| |
Vice President Product Marketing
|
Shirly Kaufman-Kirshenbaum
|
| |
46
|
| |
Vice President Human Resources
|
|
| |
|
| |
|
Non-Employee Directors**
|
| |
|
| |
|
Onn Fenig
|
| |
45
|
| |
Director
|
Floyd Katske
|
| |
69
|
| |
Director
|
Erez Meltzer
|
| |
63
|
| |
Director
|
Richard Stone
|
| |
77
|
| |
Director
|
*
|
This individual will occupy the position of Chairman of the board of directors upon the closing of this offering.
|
**
|
We entered into an amended investor rights agreement with SKT that grants SKT the right to appoint Mr. Jung Ho Park (or another person designated by SKT and reasonably acceptable to us) as a director for a term of three years. We expect that Mr. Park will be appointed to our board of directors following the effectiveness of the registration statement of which this prospectus forms a part. Mr. Park has served as the CEO of SK Telecom since March 2017. Mr. Park also serves as the chairman of the board of directors of SK Group Global growth committee and SK Hynix Inc. and serves on the board of directors of SK Telecom, Global System for Mobile Communications Association (GSMA), SK China, ADT Caps Co. Ltd, Life & Security Holdings and SK S.E. Asia Pte. Ltd. The appointment of Mr. Park as a director will be subject to our amended and restated articles of association and the Nasdaq corporate governance rules.
|
•
|
we intend to follow Israeli corporate governance practices instead of the Nasdaq requirements with regard to, among other things, the nomination committee and director nomination procedures.
|
•
|
we intend to comply with Israeli law, which permits a company to determine in its articles of association the number of shareholders and percentage of holdings required for such a quorum. Our amended and restated articles of association provide that a quorum of two or more shareholders holding at least 25% of the voting rights in person or by proxy is required for commencement of business at a general shareholders meeting. The quorum set forth in our amended and restated articles of association with respect to an adjourned meeting shall, subject to a limited exception, consist of one or more shareholders present in person or by proxy (including by voting deed), regardless of the number or percentage of our outstanding shares held by them;
|
•
|
with the exception of our external directors and directors elected by our board of directors due to a vacancy, in accordance with the staggered nomination as described under “—Board of Directors and Officers,” we intend to elect our directors to hold office until the annual general meeting of our shareholders that occurs in the third year following his or her election and until his or her successor shall be elected and qualified. The nominations for directors, which are presented to our shareholders by our board of directors, are generally made by the board of directors itself, in accordance with the provisions of our amended and restated articles of association and the Companies Law;
|
•
|
we intend to adopt and approve material changes to equity incentive plans in accordance with the Companies Law, which does not impose a requirement of shareholder approval for such actions. In addition, we intend to follow Israeli corporate governance practice, which requires shareholder approval prior to an issuance of securities in connection with equity-based compensation of officers, directors, employees or consultants only under certain circumstances, in lieu of Nasdaq Marketplace Rule 5635(c);
|
•
|
as opposed to making periodic reports to shareholders and proxy solicitation materials available to shareholders in the manner specified by the Nasdaq corporate governance rules, the Companies Law does not require us to distribute periodic reports directly to shareholders, and the generally accepted business practice in Israel is not to distribute such reports to shareholders but to make such reports available through a public website. We will only mail such reports to shareholders upon request. As a foreign private issuer, we are generally exempt from the SEC’s proxy solicitation rules; and
|
•
|
we will follow Israeli corporate governance practices instead of Nasdaq requirements to obtain shareholder approval for all corporate actions requiring such approval under the requirements of the Companies Law such as (i) transactions with directors concerning the terms of their service or indemnification, exemption and insurance for their service (or for any other position that they may hold at our company), (ii) extraordinary transactions with controlling shareholders, (iii) terms of employment or other engagement of the controlling shareholder of the company or such controlling shareholder’s relative, (iv) private placements that will result in a change of control, (v) certain transactions, other than a public offering, involving issuances of a 20% or greater interest in us and (vi) certain acquisitions of the stock or assets of another company.
|
•
|
an employment relationship;
|
•
|
a business or professional relationship maintained on a regular basis;
|
•
|
control; and
|
•
|
service as an office holder, excluding service as a director in a private company prior to the first offering of its shares to the public if such director was appointed as a director of the private company in order to serve as an external director following the initial public offering.
|
•
|
the majority of the shares voted at the meeting in favor of the election of the external director, excluding abstentions, include at least a majority of the votes of shareholders who are not controlling shareholders and do not have a personal interest in the appointment (excluding a personal interest that did not result from the shareholder’s relationship with the controlling shareholder); or
|
•
|
the total number of shares held by non-controlling shareholders or any one on their behalf that are voted against the election of the external director does not exceed 2% of the aggregate voting rights in the company.
|
•
|
his or her service for each such additional term is recommended by one or more shareholders holding at least 1% of the company’s voting rights and is approved at a shareholders meeting by a disinterested majority, where the total number of shares held by non-controlling, disinterested shareholders voting for such reelection exceeds 2% of the aggregate voting rights in the company and subject to additional restrictions set forth in the Companies Law with respect to the affiliation of the external director nominee;
|
•
|
the external director proposed his or her own nomination, and such nomination was approved in accordance with the requirements described in the paragraph above; or
|
•
|
his or her service for each such additional term is recommended by the board of directors and is approved at a meeting of shareholders by the same majority required for the initial election of an external director (as described above).
|
•
|
the chairman of the board of directors;
|
•
|
a controlling shareholder or a relative of a controlling shareholder;
|
•
|
any director employed by the company or by one of its controlling shareholders or by an entity controlled by one of its controlling shareholders (other than as a member of the board of directors);
|
•
|
any director who regularly provides services to the company, to one of its controlling shareholders or to an entity controlled by one of its controlling shareholders; or
|
•
|
a director who derives most of his or her income from a controlling shareholder.
|
•
|
recommending the retention and termination of our independent registered public accounting firm to the board of directors in accordance with Israeli law;
|
•
|
recommending to the board of directors in accordance with Israeli law the appointment, compensation, retention and oversight of any accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit services;
|
•
|
recommending the terms of audit and non-audit services to be provided by the independent registered public accounting firm for pre-approval by our board of directors;
|
•
|
recommending the engagement or termination of the person filling the office of our internal auditor;
|
•
|
reviewing with management and our independent directors our financial statements prior to their submission to the SEC; and
|
•
|
approval of certain transactions with office holders and controlling shareholders, as described below, and other related party transactions.
|
1.
|
to recommend to the board of directors the compensation policy for directors and officers, and, once every three years, or five years from a company’s initial public offering, to recommend to the board of directors, whether the compensation policy that had been approved should be extended for a longer period of time;
|
2.
|
to recommend to the board of directors updates to the compensation policy, from time to time, and examine its implementation;
|
3.
|
to decide whether to approve the terms of office and employment of directors and officers that require approval of the compensation committee; and
|
4.
|
to decide whether the compensation terms of the chief executive officer, which were determined pursuant to the compensation policy, will be exempted from approval by the shareholders because such approval would harm the ability to engage the chief executive officer.
|
•
|
the education, skills, experience, expertise and accomplishments of the relevant office holder;
|
•
|
the office holder’s position, responsibilities and prior compensation agreements with him or her;
|
•
|
the ratio between the cost of the terms of employment of an office holder and the cost of the employment of other employees of the company, including employees employed through contractors who provide services to the company, in particular the ratio between such cost, the average and median salary of the employees of the company, as well as the impact of such disparities on the work relationships in the company;
|
•
|
if the terms of employment include variable components — the possibility of reducing variable components at the discretion of the board of directors and the possibility of setting a limit on the exercise value of non-cash variable equity-based components; and
|
•
|
if the terms of employment include severance compensation — the term of employment or office of the office holder, the terms of his or her compensation during such period, the company’s performance during the such period, his or her individual contribution to the achievement of the company goals and the maximization of its profits and the circumstances under which the office holder is leaving the company.
|
•
|
with regard to variable components:
|
○
|
with the exception of office holders who are subordinate to the chief executive officer, determining the variable components on long-term performance basis and on measurable criteria; however, the
|
○
|
the ratio between variable and fixed components, as well as the limit of the values of variable components at the time of their grant.
|
•
|
a condition under which the office holder will return to the company, according to conditions to be set forth in the compensation policy, any amounts paid as part of his or her terms of employment, if such amounts were paid based on information later to be discovered to be wrong, and such information was than re-presented in the company’s financial statements;
|
•
|
the minimum holding or vesting period of variable equity-based components, while taking into consideration long-term incentives; and
|
•
|
a limit to retirement grants.
|
•
|
information on the business advisability of a given action brought for his or her approval or performed by virtue of his or her position; and
|
•
|
all other important information pertaining to such action.
|
•
|
refrain from any act involving a conflict of interest between the performance of his or her duties in the company and his or her other duties or personal affairs;
|
•
|
refrain from any activity that is competitive with the business of the company;
|
•
|
refrain from exploiting any business opportunity of the company for the purpose of gaining a personal advantage 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.
|
•
|
the office holder’s relatives (spouse, siblings, parents, grandparents, descendants, spouse’s descendants and the spouses of any of these people); or
|
•
|
any company in which the office holder or his or her relatives holds 5% or more of the shares or voting rights, serves as a director or general manager or has the right to appoint at least one director or the general manager.
|
•
|
a transaction other than in the ordinary course of business;
|
•
|
a transaction that is not on market terms; or
|
•
|
a transaction that may have a material impact on the company’s profitability, assets or liabilities.
|
•
|
a majority of the shares held by shareholders who have no personal interest in the transaction and are voting at the meeting must be voted in favor of approving the transaction, excluding abstentions; or
|
•
|
the shares voted by shareholders who have no personal interest in the transaction who vote against the transaction represent no more than 2% of the voting rights in the company.
|
•
|
at least a majority of the shares held by all shareholders who are not controlling shareholders and do not have a personal interest in such matter, present and voting at such meeting, are voted in favor of the compensation package, excluding abstentions; or
|
•
|
the total number of shares of non-controlling shareholders and shareholders who do not have a personal interest in such matter voting against the compensation package does not exceed 2% of the aggregate voting rights in the company.
|
•
|
an amendment to the articles of association;
|
•
|
an increase in the company’s authorized share capital;
|
•
|
a merger; and
|
•
|
the approval of related party transactions and acts of office holders that require shareholder approval.
|
•
|
a monetary liability incurred by or imposed on the office holder in favor of another person pursuant to a court judgment, including pursuant to a settlement confirmed as judgment or arbitrator’s decision approved by a competent 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 the abovementioned foreseen events and amount or criteria;
|
•
|
reasonable litigation expenses, including reasonable attorneys’ fees, which were incurred by the office holder (i) as a result of an investigation or proceeding filed against the office holder by an authority authorized to conduct such investigation or proceeding; provided that such investigation or proceeding was either (a) concluded without the filing of an indictment against such office holder and without the imposition on him of any monetary obligation in lieu of a criminal proceeding; (b) concluded without the filing of an indictment against the office holder but with the imposition of a monetary obligation on the office holder in lieu of criminal proceedings for an offense that does not require proof of criminal intent; or (ii) in connection with a monetary sanction;
|
•
|
a monetary liability imposed on the office holder in favor of an injured party at an Administrative Procedure (as defined below) as set forth in Section 52(54)(a)(1)(a) to the Securities Law;
|
•
|
expenses expended by the office holder with respect to an Administrative Procedure under the Securities Law, including reasonable litigation expenses and reasonable attorneys’ fees;
|
•
|
reasonable litigation expenses, including attorneys’ fees, incurred by the office holder or which were imposed on the office holder by a court (i) in a proceeding instituted against him or her by the company, on its behalf, or by a third party, (ii) in connection with criminal indictment of which the office holder was acquitted, or (iii) in connection with a criminal indictment which the office holder was convicted of an offense that does not require proof of criminal intent; and
|
•
|
any other obligation or expense in respect of which it is permitted or will be permitted under applicable law to indemnify an office holder.
|
•
|
a breach of the duty of loyalty to the company, provided that the office holder acted in good faith and had a reasonable basis to believe that the act would not harm the company;
|
•
|
a breach of duty of care to the company or to a third party, to the extent such a breach arises out of the negligent conduct of the office holder;
|
•
|
a monetary liability imposed on the office holder in favor of a third party;
|
•
|
a monetary liability imposed on the office holder in favor of an injured party at an Administrative Procedure pursuant to Section 52(54)(a)(1)(a) of the Securities Law; and
|
•
|
expenses incurred by an office holder in connection with an Administrative Procedure, including reasonable litigation expenses and reasonable attorneys’ fees.
|
•
|
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 basis to believe that the act would not prejudice the company;
|
•
|
a breach of duty of care committed intentionally or recklessly, excluding a breach arising out of the negligent conduct of the office holder;
|
•
|
an act or omission committed with intent to derive illegal personal benefit; or
|
•
|
a fine or forfeit levied against the office holder.
|
•
|
Forfeiture Upon Cause Termination. All awards held by a participant will be forfeited upon the participant’s termination for cause.
|
•
|
No Repricing Without Shareholder Approval. Without prior shareholder approval, we will not (i) reduce the exercise price of a stock option, (ii) take any other action that is treated as repricing under U.S. GAAP or (ii) repurchase for cash or cancel a stock option when its exercise price is greater than the fair market value of the underlying shares in exchange for another, unless the cancellation and exchange occurs in connection with a change in capitalization or a similar change.
|
•
|
No Transferability. Awards generally may not be transferred, except by will or the laws of descent and distribution, unless otherwise determined by the compensation committee.
|
•
|
No Automatic Grants. The Plan does not provide for automatic grants to any participant.
|
•
|
No Tax Gross-Ups. The Plan does not provide for any tax gross-ups.
|
Name
|
| |
Number of
Options |
| |
Exercise
Price |
| |
Date of
Grant |
| |
Expiration
Date |
Ran Poliakine
|
| |
1,206,290
|
| |
$2.21
|
| |
November 25, 2019
|
| |
November 25, 2029
|
Onn Fenig
|
| |
40,234
|
| |
$2.21
|
| |
November 25, 2019
|
| |
November 25, 2029
|
Floyd Katske
|
| |
0
|
| |
N/A
|
| |
N/A
|
| |
N/A
|
Erez Meltzer
|
| |
0
|
| |
N/A
|
| |
N/A
|
| |
N/A
|
Richard Stone
|
| |
100,584
|
| |
$2.21
|
| |
November 25, 2019
|
| |
November 25, 2029
|
Itzhak Maayan
|
| |
161,107
|
| |
$2.21
|
| |
November 25, 2019
|
| |
November 25, 2029
|
Anat Kaphan
|
| |
112,754
|
| |
$2.21
|
| |
November 25, 2019
|
| |
November 25, 2029
|
Yoel Raab
|
| |
152,754
|
| |
$2.21
|
| |
November 25, 2019
|
| |
November 25, 2029
|
Tal Shank
|
| |
74,362
|
| |
$2.21
|
| |
November 25, 2019
|
| |
November 25, 2029
|
Shirly Kaufman-Kirshenbaum
|
| |
0
|
| |
N/A
|
| |
N/A
|
| |
N/A
|
•
|
each person or entity known by us to own beneficially more than 5% of our outstanding ordinary shares;
|
•
|
each of our directors and executive officers; and
|
•
|
all of our directors and executive officers as a group.
|
|
| |
Shares Beneficially Owned
Prior to the Offering |
| |
Shares Beneficially Owned
After the Offering |
||||||
Name of Beneficial Owner
|
| |
Number
|
| |
Percentage
|
| |
Number
|
| |
Percentage
|
5% or greater shareholders
|
| |
|
| |
|
| |
|
| |
|
Ran Poliakine(1)
|
| |
4,774,727
|
| |
13.19
|
| |
4,774,727
|
| |
11.35
|
Moshe Moalem(2)
|
| |
4,067,420
|
| |
11.43
|
| |
4,067,420
|
| |
9.81
|
SK Telecom TMT Investment Corp and Affiliates(3)
|
| |
5,774,846
|
| |
16.23
|
| |
5,774,846
|
| |
13.93
|
Asia Beam Limited(4)
|
| |
2,684,248
|
| |
7.38
|
| |
2,684,248
|
| |
6.35
|
Yozma Group Korea(5)
|
| |
2,512,000
|
| |
7.06
|
| |
2,512,000
|
| |
6.06
|
Directors and executive officers
|
| |
|
| |
|
| |
|
| |
|
Ran Poliakine(1)
|
| |
4,774,727
|
| |
13.19
|
| |
4,774,727
|
| |
11.35
|
Onn Fenig(6)
|
| |
7,544
|
| |
*
|
| |
7,544
|
| |
*
|
Floyd Katske(7)
|
| |
2,515
|
| |
*
|
| |
2,515
|
| |
*
|
Erez Meltzer(8)
|
| |
5,029
|
| |
*
|
| |
5,029
|
| |
*
|
Richard Stone(9)
|
| |
2,741,340
|
| |
7.70
|
| |
2,741,340
|
| |
6.61
|
Itzhak Maayan(10)
|
| |
36,920
|
| |
*
|
| |
36,920
|
| |
*
|
Yoel Raab(11)
|
| |
70,393
|
| |
*
|
| |
70,393
|
| |
*
|
Anat Kaphan(12)
|
| |
26,231
|
| |
*
|
| |
26,231
|
| |
*
|
Tal Shank(13)
|
| |
18,591
|
| |
*
|
| |
18,591
|
| |
*
|
Shirly Kaufman-Kirshenbaum(14)
|
| |
11,719
|
| |
*
|
| |
11,719
|
| |
*
|
All directors and executive officers as a group (10 persons)
|
| |
7,695,009
|
| |
21.14
|
| |
7,695,009
|
| |
18.20
|
*
|
Amount represents less than 1% of outstanding ordinary shares.
|
(1)
|
Represents (a) 3,572,212 ordinary shares of the Company held by Ran Poliakine, (b) 118,750 ordinary shares of the Company held in trust by Shay Zuckerman & Co. Law Firm (“Shay Zuckerman”), pursuant to an Escrow Agreement, dated February 3, 2020 (the “Escrow Agreement”), between Ran Poliakine, Moshe Moalem and Shay Zuckerman, as trustee, (c) warrants to purchase 452,489 ordinary shares held by Ran Poliakine and (d) options to purchase 628,276 ordinary shares exercisable within 60 days of August 13, 2020. The ordinary shares held by Shay Zuckerman are held in trust for the benefit of Ran Poliakine. Ran Poliakine has voting power of all the ordinary shares held in trust by Shay Zuckerman. Ran Poliakine and Moshe Moalem may be deemed to share the dispositive power over the ordinary shares held in trust by Shay Zuckerman as such ordinary shares may not be disposed of until a final settlement between Ran Poliakine and Moshe Moalem is reached with respect thereto.
|
(2)
|
Represents (a) 3,948,670 ordinary shares of the Company held by Moshe Moalem and (b) 118,750 ordinary shares of the Company held in trust by Shay Zuckerman pursuant to the Escrow Agreement. Ran Poliakine and Moshe Moalem may be deemed to share the dispositive power over the ordinary shares held in trust by Shay Zuckerman as such ordinary shares may not be disposed of until a final settlement between Ran Poliakine and Moshe Moalem is reached with respect thereto.
|
(3)
|
Represents 2,607,466 ordinary shares held by SKT, 49,733 ordinary shares held by Pureun Partners Asset Management Co., Ltd. (“Pureun”), 855,204 ordinary shares held by EBEST-PPAM Fund No. 9 (“EBEST”), and warrants held by SKT to purchase 2,262,443 ordinary shares. SKT has the voting and dispositive power of the shares held by Pureun and EBEST pursuant to a proxy.
|
(4)
|
Represents 1,875,000 ordinary shares held by Asia Beam Limited (assuming the sale of such shares to Asia Beam Limited is closed on August 13, 2020) and 809,248 ordinary shares that Asia Beam has the right to acquire within 60 days of August 13, 2020. See “Prospectus Summary-Recent Developments” and “The Offering.” The voting and dispositive power over such ordinary shares is ultimately held by Kasudjono Harianto.
|
(5)
|
Represents 887,000 ordinary shares held by Yozma Global AI Fund No.2 (“Yozma Fund No.2”) and 1,625,000 ordinary shares held by Yozma Global AI Fund No.3 (“Yozma Fund No.3”). Yozma Group Korea is the general partner of each of Yozma Fund No.2 and Yozma Fund No.3. Wonjae Lee is the Chief Executive Officer and controlling shareholder of Yozma Group Korea and is deemed to have voting and dispositive power over the shares held by Yozma Fund No.2 and Yozma Fund No.3.
|
(6)
|
Represents options to purchase 7,544 ordinary shares exercisable within 60 days of August 13, 2020.
|
(7)
|
Represents options to purchase 2,515 ordinary shares exercisable within 60 days of August 13, 2020.
|
(8)
|
Represents options to purchase 5,029 ordinary shares exercisable within 60 days of August 13, 2020.
|
(9)
|
Consists of (a) 287,894 ordinary shares, options to purchase 18,860 ordinary shares exercisable within 60 days of August 13, 2020, and warrants to purchase 410,216 ordinary shares held by Richard Stone, (b) 696,196 ordinary shares and warrants to purchase 298,642 ordinary shares held by Stone Isra Ventures LLC, (c) 221,719 ordinary shares and warrants to purchase 443,438 ordinary shares held by Adhoc Investors LLC, (d) 118,750 ordinary shares held by Ajax Partners, (e) 89,375 ordinary shares held by Frostop Securities and (f) 156,250 ordinary shares held by Patience LLC. Richard Stone is a minority holder of each of Stone Isra Ventures LLC, Adhoc Investors LLC, Ajax Partners, Frostop Securities and Patience LLC, and is the sole manager of Stone Isra Ventures LLC and Adhoc Investors LLC. Richard Stone is deemed to have voting and dispositive power of the ordinary shares held by Stone Isra Ventures LLC, Adhoc Investors LLC, Ajax Partners, Frostop Securities and Patience LLC.
|
(10)
|
Represents options to purchase 36,920 ordinary shares exercisable within 60 days of August 13, 2020.
|
(11)
|
Represents options to purchase 70,393 ordinary shares exercisable within 60 days of August 13, 2020.
|
(12)
|
Represents options to purchase 26,231 ordinary shares exercisable within 60 days of August 13, 2020.
|
(13)
|
Represents options to purchase 18,591 ordinary shares exercisable within 60 days of August 13, 2020.
|
(14)
|
Represents options to purchase 11,719 ordinary shares exercisable within 60 days of August 13, 2020.
|
•
|
amendments to our amended and restated articles of association;
|
•
|
appointment or termination of our auditors;
|
•
|
election of directors, including external directors (if applicable);
|
•
|
approval of certain related party transactions;
|
•
|
increases or reductions of our authorized share capital;
|
•
|
mergers; and
|
•
|
the exercise of our board of director’s powers by a general meeting, if our board of directors is unable to exercise its powers and the exercise of any of its powers is required for our proper management.
|
•
|
1% of the number of ordinary shares then outstanding; or
|
•
|
the greater of 1% or the average weekly trading volume of our ordinary shares on the Nasdaq during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.
|
•
|
persons other than affiliates, without restriction; and
|
•
|
affiliates, subject to the manner-of-sale, current public information and filing requirements of Rule 144, in each case, without compliance with the six-month holding period requirement of Rule 144.
|
•
|
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 from the tax year where the Industrial Enterprise began to use them.
|
•
|
Under limited conditions, an election to file consolidated tax returns with related Israeli Industrial Companies; and
|
•
|
Expenses related to a public offering are deductible in equal amounts from income attributed to the Industrial Enterprise over three years commencing in the year of the offering.
|
•
|
The expenditures are approved by the relevant Israeli government ministry, determined by the field of research; or
|
•
|
The research and development is for the promotion of the company and is carried out by or on behalf of the company seeking such tax deduction.
|
•
|
banks and other financial institutions;
|
•
|
insurance companies;
|
•
|
pension plans;
|
•
|
cooperatives;
|
•
|
regulated investment companies;
|
•
|
real estate investment trusts;
|
•
|
broker-dealers;
|
•
|
traders that elect to use a mark-to-market method of accounting;
|
•
|
certain former U.S. citizens or long-term residents;
|
•
|
tax-exempt entities (including private foundations);
|
•
|
holders who acquire our ordinary shares pursuant to any employee share option or otherwise as compensation;
|
•
|
investors that will hold our ordinary shares as part of a straddle, hedge, conversion, constructive sale or other integrated transaction for U.S. federal income tax purposes;
|
•
|
persons holding our ordinary shares in connection with a trade or business outside the United States;
|
•
|
persons that actually or constructively own 10% or more of our stock (by vote or value);
|
•
|
investors that have a functional currency other than the U.S. dollar;
|
•
|
partnerships or other entities taxable as partnerships for U.S. federal income tax purposes, or persons holding our ordinary shares through such entities, all of whom may be subject to tax rules that differ significantly from those discussed below.
|
•
|
an individual who is a citizen or resident of the United States;
|
•
|
a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created in, or organized under the law of, the United States or any state thereof or the District of Columbia;
|
•
|
an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or
|
•
|
a trust (A) the administration of which is subject to the primary supervision of a U.S. court and which has one or more U.S. persons who have the authority to control all substantial decisions of the trust or (B) that has otherwise validly elected to be treated as a U.S. person under the Code.
|
•
|
the excess distribution or gain will be allocated ratably over the U.S. Holder’s holding period for the ordinary shares;
|
•
|
the amount allocated to the taxable year of the excess distribution, sale or other disposition and to any taxable years in the U.S. Holder’s holding period prior to the first taxable year in which we are classified as a PFIC (each, a “pre-PFIC year”), will be taxable as ordinary income;
|
•
|
the amount allocated to each prior taxable year, other than a pre-PFIC year, will be subject to tax at the highest tax rate in effect for individuals or corporations, as appropriate, for that year; and
|
•
|
the interest charge generally applicable to underpayments of tax will be imposed on the tax attributable to each prior taxable year, other than a pre-PFIC year.
|
Name
|
| |
Number of shares
|
Cantor Fitzgerald & Co.
|
| |
|
Oppenheimer & Co. Inc.
|
| |
|
Berenberg Capital Markets, LLC
|
| |
|
CIBC World Markets Corp.
|
| |
|
National Securities Corporation
|
| |
|
|
| |
|
Total
|
| |
5,882,353
|
|
| |
Without option to
purchase additional shares exercise |
| |
With full option to
purchase additional shares exercise |
Per Share
|
| |
$
|
| |
$
|
Total
|
| |
$
|
| |
$
|
•
|
offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any of our ordinary shares or any securities convertible into or exercisable or exchangeable for our ordinary shares (including, without limitation, ordinary shares or such other securities which may be deemed to be beneficially owned by the such persons in accordance with the rules and regulations of the SEC and securities which may be issued upon exercise of a share option or warrant);
|
•
|
enter into any hedging, swap or other agreement or transaction that transfers, in whole or in part, any of the economic consequences of ownership of our ordinary shares or such other securities; or
|
•
|
make any demand for or exercise any right with respect to the registration of any of our ordinary shares or any security convertible into or exercisable or exchangeable for our ordinary shares, or publicly disclose the intention to do any of the foregoing.
|
•
|
offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, or submit to, or file with, the SEC a registration statement under the Securities Act relating to, any of our ordinary shares or any securities convertible into or exercisable or exchangeable for our ordinary shares, or publicly disclose the intention to undertake any of the foregoing; or
|
•
|
enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of our ordinary shares or any such other securities, without the prior written consent of Cantor Fitzgerald & Co.
|
•
|
the information set forth in this prospectus and otherwise available to the representative;
|
•
|
our prospects and the history and prospects for the industry in which we compete;
|
•
|
an assessment of our management;
|
•
|
our prospects for future earnings;
|
•
|
the general condition of the securities markets at the time of this offering;
|
•
|
the recent market prices of, and demand for, publicly traded equity securities of generally comparable companies; and
|
•
|
other factors deemed relevant by the underwriters and us.
|
(a)
|
to any legal entity which is a qualified investor as defined under the Prospectus Regulation;
|
(b)
|
to fewer than 150 natural or legal persons (other than qualified investors as defined under the Prospectus Regulation), subject to obtaining the prior consent of the underwriters for any such offer; or
|
(c)
|
in any other circumstances falling within Article 1(4) of the Prospectus Regulation,
|
(a)
|
a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or
|
(b)
|
a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor, securities (as defined in Section 239(1) of the SFA) of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the shares pursuant to an offer made under Section 275 of the SFA except:
|
(a)
|
to an institutional investor or to a relevant person defined in Section 275(2) of the SFA, or to any person arising from an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the SFA;
|
(b)
|
where no consideration is or will be given for the transfer;
|
(c)
|
where the transfer is by operation of law;
|
(d)
|
as specified in Section 276(7) of the SFA; or
|
(e)
|
as specified in Regulation 32 of the Securities and Futures (Offers of Investments) (Shares and Debentures) Regulations 2005 of Singapore.
|
Itemized expense
|
| |
Amount
|
SEC registration fee
|
| |
$15,806
|
FINRA filing fee
|
| |
18,600
|
Nasdaq listing fee
|
| |
235,000
|
Printing and engraving expenses
|
| |
150,000
|
Legal fees and expenses
|
| |
1,540,500
|
Transfer agent and registrar fees
|
| |
5,000
|
Accounting fees and expenses
|
| |
316,000
|
Fees payable to A-Labs
|
| |
2,500,000
|
Fees payable to Rosario
|
| |
600,000
|
Total
|
| |
$5,380,906
|
•
|
the judgment was rendered by a court which was, according to the laws of the state of the court, competent to render the judgment;
|
•
|
the obligation imposed by the judgment is enforceable according to the rules relating to the enforceability of judgments in Israel and the substance of the judgment is not contrary to public policy; and
|
•
|
the judgment is executory in the state in which it was given.
|
•
|
the judgment was given in a state whose laws do not provide for the enforcement of judgments of Israeli courts (subject to exceptional cases);
|
•
|
the enforcement of the judgment is likely to prejudice the sovereignty or security of the State of Israel;
|
•
|
the judgment was obtained by fraud;
|
•
|
the opportunity given to the defendant to bring its arguments and evidence before the court was not reasonable in the opinion of the Israeli court;
|
•
|
the judgment was rendered by a court not competent to render it according to the laws of private international law as they apply in Israel;
|
•
|
the judgment is contradictory to another judgment that was given in the same matter between the same parties and that is still valid; or
|
•
|
at the time the action was brought in the foreign court, a lawsuit in the same matter and between the same parties was pending before a court or tribunal in Israel.
|
|
| |
Page
|
Consolidated Financial Statements
|
| |
|
| | ||
|
| |
|
| | ||
|
| |
|
| | ||
|
| |
|
| | ||
|
| |
|
| | ||
|
| |
|
| | ||
|
| |
|
Unaudited Condensed Consolidated Financial Statements
|
| |
|
| | ||
|
| |
|
| | ||
|
| |
|
| | ||
|
| |
|
| | ||
|
| |
|
| |
/s/ Kesselman & Kesselman
|
| |
|
Certified Public Accountants (Isr.)
|
| |
|
A member firm of PricewaterhouseCoopers International Limited
|
| |
|
|
| |
|
Tel Aviv, Israel
|
| |
|
February 18, 2020, except with respect to the matters which have removed the substantial doubt about the Company’s ability to continue as a going concern discussed in Note 1d and Note 12(d), (e), (f), (g) as to which the date is July 30, 2020
|
| |
|
(*)
|
The consolidated financial statements as of and for the years ended December 31, 2019 and 2018 reflect a retrospective application of a transaction under common control - see note 1c
|
|
| |
Year ended December 31,
|
|||
|
| |
2019 (*)
|
| |
2018 (*)
|
|
| |
U.S. Dollars in thousands
|
|||
OPERATING EXPENSES:
|
| |
|
| |
|
Research and development
|
| |
2,717
|
| |
672
|
Marketing
|
| |
1,556
|
| |
209
|
General and administrative
|
| |
18,298
|
| |
1,023
|
TOTAL OPERATING EXPENSES
|
| |
22,571
|
| |
1,904
|
OPERATING LOSS
|
| |
(22,571)
|
| |
(1,904)
|
FINANCIAL (INCOME) EXPENSES, net
|
| |
(8)
|
| |
5
|
NET LOSS
|
| |
(22,563)
|
| |
(1,909)
|
BASIC AND DILUTED LOSS PER SHARE
|
| |
(0.90)
|
| |
(0.09)
|
THE WEIGHTED AVERAGE OF THE NUMBER OF ORDINARY SHARES
(in thousands) |
| |
25,181
|
| |
20,793
|
(*)
|
The consolidated financial statements as of and for the years ended December 31, 2019 and 2018 reflect a retrospective application of a transaction under common control - see note 1c
|
|
| |
Ordinary shares
|
| |
Additional
paid-in capital |
| |
Accumulated
deficit |
| |
Total
|
|||
|
| |
Number
of shares |
| |
Amount
|
| |
U.S. Dollars in thousands
|
||||||
BALANCE AT JANUARY 1, 2018
|
| |
20,257,434
|
| |
41
|
| |
7,814
|
| |
(16,129)
|
| |
(8,274)
|
CHANGES DURING 2018:
|
| ||||||||||||||
Issuance of ordinary shares
|
| |
1,666,774
|
| |
17
|
| |
3,667
|
| |
|
| |
3,684
|
Share-based compensation
|
| |
|
| |
|
| |
115
|
| |
|
| |
115
|
Net loss for the year
|
| |
|
| |
|
| |
|
| |
(1,909)
|
| |
(1,909)
|
BALANCE AT DECEMBER 31, 2018
|
| |
21,924,208
|
| |
58
|
| |
11,596
|
| |
(18,038)
|
| |
(6,384)
|
CHANGES DURING 2019:
|
| |
|
| |
|
| |
|
| |
|
| |
|
Issuance of ordinary shares and warrants, net of issuance costs
|
| |
4,762,656
|
| |
16
|
| |
14,022
|
| |
|
| |
14,038
|
Issuance of ordinary shares upon exercise of warrants
|
| |
454,166
|
| |
1
|
| |
136
|
| |
|
| |
137
|
Issuance of ordinary shares to investors upon exercise of warrants
|
| |
9,050
|
| |
**
|
| |
25
|
| |
|
| |
25
|
Share-based compensation
|
| |
|
| |
|
| |
16,245
|
| |
|
| |
16,245
|
Additional consideration with respect to an assets purchase agreement, see note 1c and note 6
|
| |
|
| |
|
| |
(10,276)
|
| |
|
| |
(10,276)
|
Net loss for the year
|
| |
|
| |
|
| |
|
| |
(22,563)
|
| |
(22,563)
|
BALANCE AT DECEMBER 31, 2019
|
| |
27,150,080
|
| |
75
|
| |
31,748
|
| |
(40,601)
|
| |
(8,778)
|
(*)
|
The consolidated financial statements as of and for the years ended December 31, 2019 and 2018 reflect a retrospective application of a transaction under common control - see note 1c
|
(**)
|
Less than 1 thousand US dollars.
|
|
| |
Year ended December 31,
|
|||
|
| |
2019 (*)
|
| |
2018 (*)
|
|
| |
U.S. Dollars in thousands
|
|||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
| |
|
| |
|
Net loss for the year
|
| |
(22,563)
|
| |
(1,909)
|
Adjustments required to reconcile net loss to net cash used in operating activities:
|
| |
|
| |
|
Share-based compensation
|
| |
16,245
|
| |
115
|
Depreciation
|
| |
53
|
| |
35
|
Changes in operating assets and liabilities:
|
| |||||
Prepaid expenses and other current assets
|
| |
(1,564)
|
| |
66
|
Related party prepaid expenses
|
| |
1,081
|
| |
(1,844)
|
Other non-current assets
|
| |
(139)
|
| |
—
|
Accounts payable
|
| |
393
|
| |
(134)
|
Operating lease
|
| |
**
|
| |
—
|
Accrued expenses and other liabilities
|
| |
970
|
| |
—
|
Net cash used in operating activities
|
| |
(5,524)
|
| |
(3,671)
|
|
| |
|
| |
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
| |
|
| |
|
Purchase of property and equipment
|
| |
(125)
|
| |
(73)
|
Net cash used in investing activities
|
| |
(125)
|
| |
(73)
|
|
| |
|
| |
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
| |
|
| |
|
Proceeds from issuance of ordinary shares and warrants , net of issuance costs
|
| |
14,038
|
| |
3,684
|
Proceeds from issuance of ordinary shares upon exercise of warrants
|
| |
162
|
| |
—
|
Deferred offering costs
|
| |
(339)
|
| |
—
|
Net cash provided by financing activities
|
| |
13,861
|
| |
3,684
|
|
| |
|
| |
|
NET CHANGE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
|
| |
8,212
|
| |
(60)
|
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF THE YEAR
|
| |
5
|
| |
65
|
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF THE YEAR
|
| |
8,217
|
| |
5
|
SUPPLEMENTARY INFORMATION ON ACTIVITIES NOT INVOLVING CASH FLOWS
|
| |
|
| |
|
Unpaid offering costs
|
| |
858
|
| |
—
|
Recognition of operating lease right-of-use asset against operating lease liabilities
|
| |
548
|
| |
—
|
Additional consideration with respect to an assets purchase agreement, see note 1c
|
| |
(10,276)
|
| |
—
|
(*)
|
The consolidated financial statements as of and for the years ended December 31, 2019 and
|
(**)
|
Less than 1 thousand US dollars.
|
a.
|
Nano-X Imaging Ltd, an Israeli company (hereinafter “the Company” or “Nanox IL” or “the Successor Company”), was incorporated on December 20, 2018 and commenced its operations on September 3, 2019.
|
b.
|
Nanox Imaging PLC is a public limited company incorporated in Gibraltar in 2012 (hereinafter “Nanox PLC” or “the predecessor company”).
|
c.
|
As of September 3 2019, Nanox IL and Nanox PLC had the same shareholders and, therefore, the transaction was treated as a transaction under common control for accounting purposes.
|
1)
|
only the net assets that were transferred in the transaction according to the APA. Net assets which were not transferred in the transaction are not reflected in these consolidated financial statements.
|
2)
|
no interests of Nanox Japan were transferred under the APA. The consolidated statements of operation include the costs incurred for services provided by Nanox Japan to Nanox PLC.
|
3)
|
the consideration in the transaction (the “Related Party Liability”) was recorded at the beginning of the earliest period presented against a decrease in shareholders' equity, with the exception of the cash consideration that was received by Nanox PLC from its equity financing activities in 2019, and which was recorded in 2019 (refer to note 8a).
|
4)
|
all of the share-related information reflect the share information of Nanox IL.
|
d.
|
In accordance with Accounting Standards Update (“ASU”) 2014-15, Presentation of Financial Statements–Going Concern (Subtopic 205-40): Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern, management is required to perform a two-step analysis of its ability to continue as a going concern. Management must first evaluate whether there are conditions and events that raise substantial doubt about the Company’s ability to continue as a going concern (step 1). If management concludes that substantial doubt is raised, management is also required to consider whether its plans alleviate that doubt (step 2).
|
a.
|
Use of estimates in the preparation of financial statements
|
b.
|
Functional currency
|
c.
|
Statement of Cash Flows
|
d.
|
Cash and cash equivalents
|
e.
|
Restricted Cash
|
f.
|
Property and equipment, net
|
|
| |
%
|
Computers
|
| |
10-33
|
Office furniture and lab equipment
|
| |
10-20
|
g.
|
Impairment of long-lived assets
|
h.
|
Severance pay
|
i.
|
Legal and other contingencies
|
j.
|
Research and development expenses
|
k.
|
Marketing expenses
|
l.
|
Income tax
|
1)
|
The Company accounts for income taxes in accordance with ASC 740, “Income Taxes” (“ASC 740”). ASC 740 prescribes the use of the liability method whereby deferred tax asset and liability account balances are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value if it is more likely than not that a portion or all of the deferred tax assets will not be realized, based on the weight of available positive and negative evidence. Deferred tax liabilities and assets are classified as non-current in accordance with ASU 2015-17.
|
2)
|
Taxes that would apply in the event of disposal of investments in foreign subsidiaries have not been taken into account in computing the deferred income taxes, as it is the Company’s intent and ability to hold these investments.
|
m.
|
Share-based compensation
|
n.
|
Loss per share
|
o.
|
Fair value measurement
|
p.
|
Deferred Offering Costs
|
q.
|
Newly issued and recently adopted accounting pronouncements:
|
(i)
|
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which supersedes the existing guidance for lease accounting, Leases (Topic 840). The guidance, along with amendments that were adopted thereafter, requires entities to record lease assets and lease liabilities on the balance sheet for all leases (unless an exception is applied) and disclose key information about leasing arrangements. The Company adopted the new lease standard on January 1, 2019 and used the effective date as the Company's date of initial application.
|
(a)
|
Not reassess whether any existing contracts are or contain a lease;
|
(b)
|
Not reassess the classification of leases that commenced before the effective date (for example, all existing leases that were classified as operating leases in accordance with Topic 840 will continue to be classified as operating leases, and all existing leases that were classified as capital leases in accordance with Topic 840 will continue to be classified as finance leases);
|
(c)
|
Exclude initial direct costs from measurement of the right of use asset at the date of initial application.
|
(ii)
|
See note 2(m) for other accounting pronouncement adopted during the year ended December 31, 2019.
|
|
| |
December 31,
|
|||
|
| |
2019
|
| |
2018
|
|
| |
(U.S. Dollars in thousands)
|
|||
Office furniture and lab equipment
|
| |
325
|
| |
217
|
Computers
|
| |
39
|
| |
22
|
|
| |
364
|
| |
239
|
Less: accumulated depreciation
|
| |
136
|
| |
83
|
Total property and equipment, net
|
| |
228
|
| |
156
|
|
| |
December 31,
|
|||
|
| |
2019
|
| |
2018
|
|
| |
(U.S. Dollars in thousands)
|
|||
Cash and cash equivalents
|
| |
8,072
|
| |
5
|
Restricted bank deposit
|
| |
145
|
| |
—
|
Total cash, cash equivalents and restricted
cash shown in the statement of cash flows |
| |
8,217
|
| |
5
|
|
| |
Year ended
December 31, |
|
| |
2019
|
|
| |
(U.S. Dollars in thousands)
|
Operating lease cost:
|
| |
|
Fixed payments
|
| |
25
|
Short-term lease cost
|
| |
112
|
Total operating lease cost
|
| |
137
|
|
| |
Year ended
December 31, |
|
| |
2019
|
|
| |
(U.S. Dollars in thousands)
|
Cash paid for amounts included in the measurement of lease liabilities:
|
| |
|
Operating cash flows from operating leases
|
| |
25
|
Right-of-use assets obtained in exchange for lease obligations (non-cash):
|
| |
|
Operating leases
|
| |
548
|
|
| |
December 31,
|
|
| |
2019
|
|
| |
(U.S. Dollars in thousands)
|
Operating leases:
|
| |
|
Operating lease right-of-use assets
|
| |
526
|
Current maturities of operating leases
|
| |
140
|
Non-current operating leases
|
| |
386
|
Total operating lease liabilities
|
| |
526
|
|
| |
December 31,
|
|
| |
2019
|
Weighted average remaining lease term
|
| |
|
Operating leases
|
| |
3.96 years
|
|
| |
|
Weighted average discount rate
|
| |
|
Operating leases
|
| |
5.6%
|
|
| |
December 31,
|
|
| |
2019
|
|
| |
(U.S. Dollars in thousands)
|
2020
|
| |
146
|
2021
|
| |
146
|
2022
|
| |
146
|
2023
|
| |
145
|
2024 and thereafter
|
| |
—
|
Total operating lease payments
|
| |
583
|
Less: imputed interest
|
| |
57
|
Present value of lease liabilities
|
| |
526
|
a.
|
Nanox Japan has been using two rooms and one clean room at the premises of the University of Tokyo since 2012. The total annual payments in 2019 were approximately $76 thousand.
|
b.
|
As to the agreements for services with Six-Eye Interactive Ltd. (“Six-Eye”) – refer to note 10c.
|
c.
|
Nanox IL entered into an advisory agreement with A-Labs Finance and Advisory Ltd. (“A-Labs”), effective February 1, 2019, as amended on October 18, 2019, pursuant to which A-Labs will provide the Company
|
d.
|
During September 2019, the Company entered into a Service Agreement with RMD AP Limited, a company registered under the laws of Hong Kong (RMD). RMD undertook to provide the Company with services related to the Asia Pacific region, including, among others, operational and business development related matters. The agreement is for a period of one year and the agreed commitment for the services is $800 thousand. RMD will bear all costs and expenses incurred beyond such agreed upon amount.
|
e.
|
During September 2019, Nanox IL entered into a Collaboration Agreement with Hadasit Medical Research Services and Development Ltd. (“Hadasit”), a wholly owned subsidiary of the Hadassah Medical Organization. The parties agreed to collaborate with respect to the Company's medical imaging technology and resulting medical images devices (the “Company Products”), by way of (a) joint research and development projects (each, a “Research Project”), and (b) the provision by Hadasit of services in connection with the Company Products, such as testing and consulting work, where no innovative research will be carried out (each, a “Service”). Each Research Project and Service shall be rendered under a separate project agreement concluded between the parties in writing from time to time (collectively, the “Project Agreements”). The parties envisage the collaboration to continue over a period of five years, unless an extension is agreed by the parties in writing. Under such agreement, the Company paid Hadasit a non-refundable advance payment for the Research Projects and Services, in the amount of $ 250 thousand, which shall be credited against payments due from time to time to Hadasit under the Project Agreements. Nanox IL has no obligation to enter into Project Agreements with Hadasit in excess of such advanced payment.
|
f.
|
On December 16, 2019, Nanox IL signed an agreement with Dr. Ilung Kim for provision of services to the Company. Dr. Kim will not receive any cash compensation, but will be granted options to purchase 1,206,290 ordinary shares with an exercise price of $2.21 per ordinary share. 301,572 of the options vested as of the grant date and the remaining 904,718 options will vest in equal monthly installments over a period of three years from the vesting commencement date. In the event of an IPO or Deemed Liquidation (as defined therein), all unvested options shall fully accelerate immediately prior to the consummation of the IPO. The vested options shall be exercisable until the earlier of (a) the second anniversary of termination of the engagement by and among the Company and Dr. Ilung Kim, or (b) the tenth anniversary from the date of grant.
|
a.
|
Share capital
|
b.
|
Share based compensation
|
1)
|
Share-based compensation to non-employees :
|
|
| |
Year ended December 31,
|
| |
Year ended December 31,
|
||||||
|
| |
2019
|
| |
2018
|
||||||
|
| |
Number of
share-based payment awards |
| |
Weighted
average exercise price |
| |
Number of
share-based payment awards |
| |
Weighted
average payment exercise price |
Outstanding at beginning of year
|
| |
1,592,874
|
| |
$1.32
|
| |
1,751,140
|
| |
$1.40
|
Changes during the year:
|
| |||||||||||
Granted
|
| |
2,271,698
|
| |
$2.77
|
| |
—
|
| |
—
|
Exercised
|
| |
(454,166)
|
| |
$0.3
|
| |
—
|
| |
—
|
Forfeited
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Expired
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Cancelled
|
| |
—
|
| |
—
|
| |
(158,266)
|
| |
$2.21
|
Outstanding at end of year
|
| |
3,410,406
|
| |
$1.89
|
| |
1,592,874
|
| |
$1.32
|
Exercisable at end of year
|
| |
1,830,809
|
| |
$3.79
|
| |
1,592,874
|
| |
$1.32
|
|
| |
2019
|
| |
2018
|
Fair value of one ordinary share
|
| |
16
|
| |
2.21
|
Dividend yield
|
| |
0
|
| |
0
|
Expected volatility
|
| |
41.11% - 50.59%
|
| |
51.97% - 72.25%
|
Risk-free interest rate
|
| |
1.55%-1.76%
|
| |
1.52%-2.94%
|
Contractual term (years)
|
| |
0.50 – 10.00
|
| |
1.05 – 6.00
|
|
| |
December 31, 2018
|
|||||||||
Exercise price
|
| |
Awards outstanding
|
| |
Awards exercisable
|
||||||
|
Number of
awards outstanding at end of year |
| |
Weighted
average remaining contractual life (years) |
| |
Number of
awards exercisable at end of year |
| |
Weighted
average remaining contractual life (years) |
||
$0.01
|
| |
186,815
|
| |
2.33
|
| |
186,815
|
| |
2.33
|
$0.30
|
| |
454,166
|
| |
0.77
|
| |
454,166
|
| |
0.77
|
$1.92
|
| |
472,606
|
| |
2.81
|
| |
472,606
|
| |
2.81
|
$2.21
|
| |
479,287
|
| |
3.37
|
| |
479,287
|
| |
3.37
|
|
| |
December 31, 2019
|
|||||||||
Exercise price
|
| |
Awards outstanding
|
| |
Awards exercisable
|
||||||
|
Number of
awards outstanding at end of year |
| |
Weighted
average remaining contractual life (years) |
| |
Number of
awards exercisable at end of year |
| |
Weighted
average remaining contractual life (years) |
||
$0.01
|
| |
186,815
|
| |
1.33
|
| |
186,815
|
| |
1.33
|
$1.92
|
| |
472,606
|
| |
1.81
|
| |
472,606
|
| |
1.81
|
$2.21
|
| |
2,727,028
|
| |
5.27
|
| |
1,163,402
|
| |
5.27
|
$20.87
|
| |
23,957
|
| |
5.69
|
| |
7,986
|
| |
5.69
|
2)
|
Share-based compensation to employees, officers and directors
|
|
| |
Year ended December 31,
2019 |
|||
|
| |
Number of
share-based payment awards |
| |
Weighted
average exercise price |
Outstanding at beginning of year
|
| |
—
|
| |
—
|
Changes during the year:
|
| |||||
Granted
|
| |
1,667,267
|
| |
2.21
|
Exercised
|
| |
—
|
| |
—
|
Forfeited
|
| |
—
|
| |
—
|
Expired
|
| |
—
|
| |
—
|
Cancelled
|
| |
—
|
| |
—
|
Outstanding at end of year
|
| |
1,667,267
|
| |
2.21
|
Exercisable at end of year
|
| |
450,557
|
| |
2.21
|
|
| |
2019
|
Fair value of one ordinary share
|
| |
16
|
Dividend yield
|
| |
0
|
Expected volatility
|
| |
46.1% - 50.65%
|
Risk-free interest rate
|
| |
1.65% - 1.68%
|
Contractual term (years)
|
| |
5.75 - 6.23
|
December 31, 2019
|
||||||||||||
Awards outstanding
|
| |
Awards exercisable
|
|||||||||
Exercise price
|
| |
Number of
awards outstanding at end of year |
| |
Weighted
average remaining contractual life (years) |
| |
Number of
awards exercisable at end of year |
| |
Weighted
average remaining contractual life (years) |
$2.21
|
| |
1,667,267
|
| |
9.90
|
| |
450,557
|
| |
9.90
|
3)
|
(i) Share-based compensation expenses for awards granted to non-employees, employees, officers and directors in the amount of $661 thousand included in the Company’s consolidated statements of operations for the year ended December 31, 2019 were recorded as research and development expenses.
|
a.
|
Basis of taxation
|
b.
|
Tax assessments
|
c.
|
Deferred tax assets
|
a.
|
Balances with related parties:
|
|
| |
December 31,
|
|||
|
| |
2019
|
| |
2018
|
|
| |
(U.S. Dollars in thousands)
|
|||
Related party prepaid expenses – See d below
|
| |
—
|
| |
1,694
|
Related party liability, refer to note 6
|
| |
17,820
|
| |
8,157
|
b.
|
Related parties transactions:
|
|
| |
Year ended December 31,
|
|||
|
| |
2019
|
| |
2018
|
|
| |
(U.S. Dollars in thousands)
|
|||
Research and development
|
| |
154
|
| |
542
|
General and administrative
|
| |
5,824
|
| |
892
|
c.
|
Six-Eye agreements for services
|
d.
|
The related party prepaid expenses reflect funds raised during 2018 (refer to note 8a) in an amount of $ 3,684 thousand from third party investors, less amounts payable in accordance with Six-Eye service agreement (see c above). The funds were received directly by Six-Eye (these funds were not received by the Company nor remitted from the Company to Six-Eye) less amounts payable in accordance with Six-Eye service agreement (see c above).
|
e.
|
Effective from September 2019, Nanox IL signed an executive employment agreement with Ran Poliakine (“the CEO”) to serve as the Company’s CEO (“the CEO agreement”). According to the CEO agreement, the CEO will be entitled to a monthly gross salary of $40 thousand, which will be increased to $60 thousand upon the Company's consummation of an IPO. The CEO will be entitled to other benefits as described in the CEO agreement including an annual bonus subject to performance criteria. The CEO was granted options to purchase 1,206,290 ordinary shares with an exercise price of $2.21 per ordinary share. 301,572 of the options were vested as of the grant date and the remaining 904,718 options will be vested in equal monthly installments over a period of three years from the vesting commencement date. Share-based compensation expenses in an amount of $5,299 thousand included in the Company’s consolidated statements of operations for the year ended December 31, 2019 were recorded as general and administrative expenses for the abovementioned awards.
|
a.
|
Basic
|
|
| |
Year ended December 31,
|
|||
|
| |
2019
|
| |
2018
|
Net loss attributable to Company’s owners
|
| |
$(22,563)
|
| |
$(1,909)
|
The weighted average of the number of ordinary shares (in thousands)
|
| |
25,181
|
| |
20,793
|
Basic and diluted loss per share
|
| |
$(0.90)
|
| |
$(0.09)
|
b.
|
Diluted
|
a.
|
During January 2020, subject to entering into a share purchase agreement in the aggregate amount of at least $6 million, and a pre-money valuation of more than $100 million, the Nanox IL’s Board approved the issuance and allotment of 1,109,245 ordinary shares to Nanox PLC with the purchase price of $12.00 per share, which reflects a discount of 25% from the price of the last financing round of the Company. As a result, on January 30, 2020 the related party liability was settled into equity at a price per share reflecting a discount of 25% from the price of the last financing round.
|
b.
|
During January and February 2020 Nanox IL issued additional 257,723 ordinary shares to other investors for an aggregate purchase price of approximately $3.4 million at a $16 per ordinary share.
|
c.
|
In February 2020, the Company granted a total of 407,868 awards with an exercise price of $2.21 per share to employees and service providers.
|
d.
|
During the first half of 2020, the Company entered into share purchase agreements with certain investors (together, the “Investors”), under which the Company issued an aggregate of 2,368,250 ordinary shares to the Investors, at a price per share of $16.00, for an aggregate purchase price of approximately $37.9 million.
|
e.
|
In July 2020, the Company issued 625,000 ordinary shares to one of its investors, as part of their $20 million equity investment at a price per share of $16.00, for a purchase price of $10 million, received in July 2020, which reflects the second portion of the investor’s $20 million investment.
|
f.
|
In July 2020, the Company entered into additional share purchase agreements with certain investors for the issuance of 3,500,000 ordinary shares at a price per share of $16.00, for an aggregate purchase price of approximately $56 million. As of the date of the issuance of these financial statements, the funds were not received yet.
|
g.
|
The Company has evaluated subsequent events through July 30, 2020, the date on which the consolidated financial statements were available to be issued.
|
|
| |
Six Months Ended June 30,
|
| |
Three Months Ended June 30,
|
||||||
|
| |
2020
|
| |
2019
|
| |
2020
|
| |
2019
|
|
| |
(U.S. dollars in thousands, except for per share data)
|
|||||||||
OPERATING EXPENSES:
|
| |
|
| |
|
| |
|
| |
|
Research and development
|
| |
4,152
|
| |
340
|
| |
1,786
|
| |
172
|
Marketing
|
| |
1,745
|
| |
242
|
| |
772
|
| |
122
|
General and administrative
|
| |
7,903
|
| |
1,079
|
| |
3,871
|
| |
659
|
OPERATING LOSS
|
| |
(13,800)
|
| |
(1,661)
|
| |
(6,429)
|
| |
(953)
|
FINANCIAL EXPENSES (INCOME), NET
|
| |
(14)
|
| |
14
|
| |
(65)
|
| |
11
|
NET LOSS
|
| |
(13,786)
|
| |
(1,675)
|
| |
(6,364)
|
| |
(964)
|
|
| |
|
| |
|
| |
|
| |
|
BASIC AND DILUTED LOSS PER SHARE
|
| |
(0.47)
|
| |
(0.07)
|
| |
(0.21)
|
| |
(0.04)
|
WEIGHTED AVERAGE NUMBER OF
|
| |
|
| |
|
| |
|
| |
|
ORDINARY SHARES (in thousands)
|
| |
29,273
|
| |
23,452
|
| |
29,628
|
| |
24,456
|
|
| |
Ordinary shares
|
| |
Additional
paid-in capital |
| |
Accumulated
deficit |
| |
Total
|
|||
|
| |
Number of
shares |
| |
Amount
|
| ||||||||
|
| |
|
| |
|
| |
U.S. Dollars in thousands
|
||||||
BALANCE AT JANUARY 1, 2020
|
| |
27,150,080
|
| |
75
|
| |
31,748
|
| |
(40,601)
|
| |
(8,778)
|
CHANGES DURING SIX MONTHS ENDED JUNE 30, 2020
|
| |
|
| |
|
| |
|
| |
|
| |
|
Issuance of ordinary shares, net of issuance costs
|
| |
2,368,250
|
| |
10
|
| |
36,690
|
| |
|
| |
36,700
|
Conversion of related party liability to shareholders' equity
|
| |
1,109,245
|
| |
|
| |
17,748
|
| |
|
| |
17,748
|
Issuance of ordinary shares to employees and non-employees upon exercise of warrants
|
| |
29,766
|
| |
*
|
| |
66
|
| |
|
| |
66
|
Issuance of ordinary shares to investors upon exercise of warrants
|
| |
22,624
|
| |
*
|
| |
62
|
| |
|
| |
62
|
Share-based compensation
|
| |
|
| |
|
| |
8,347
|
| |
|
| |
8,347
|
Net loss
|
| |
|
| |
|
| |
|
| |
(13,786)
|
| |
(13,786)
|
BALANCE AT JUNE 30, 2020
|
| |
30,679,965
|
| |
85
|
| |
94,661
|
| |
(54,387)
|
| |
40,359
|
|
| |
Ordinary shares
|
| |
Additional
paid-in capital |
| |
Accumulated
deficit |
| |
Total
|
|||
|
| |
Number of
shares |
| |
Amount
|
| ||||||||
|
| |
|
| |
|
| |
U.S. Dollars in thousands
|
||||||
BALANCE AT JANUARY 1, 2019
|
| |
21,924,208
|
| |
58
|
| |
11,596
|
| |
(18,038)
|
| |
(6,384)
|
CHANGES DURING SIX MONTHS ENDED JUNE 30, 2019
|
| |
|
| |
|
| |
|
| |
|
| |
|
Issuance of ordinary shares and warrants, net of issuance costs
|
| |
4,450,146
|
| |
13
|
| |
9,251
|
| |
|
| |
9,264
|
Additional consideration for an asset purchase agreement
|
| |
|
| |
|
| |
174
|
| |
|
| |
174
|
Net loss
|
| |
|
| |
|
| |
|
| |
(1,675)
|
| |
(1,675)
|
BALANCE AT JUNE 30, 2019
|
| |
26,374,354
|
| |
71
|
| |
21,021
|
| |
(19,713)
|
| |
1,379
|
(*)
|
Less than 1 thousand US dollars.
|
|
| |
Ordinary shares
|
| |
Additional
paid-in capital |
| |
Accumulated
deficit |
| |
Total
|
|||
|
| |
Number of
shares |
| |
Amount
|
| ||||||||
|
| |
|
| |
|
| |
U.S. Dollars in thousands
|
||||||
BALANCE AT APRIL 1, 2020
|
| |
29,261,215
|
| |
81
|
| |
68,912
|
| |
(48,023)
|
| |
20,970
|
CHANGES DURING THREE MONTHS ENDED JUNE 30, 2020
|
| |
|
| |
|
| |
|
| |
|
| |
|
Issuance of ordinary shares, net of issuance costs
|
| |
1,418,750
|
| |
4
|
| |
22,252
|
| |
|
| |
22,256
|
Share-based compensation
|
| |
|
| |
|
| |
3,497
|
| |
|
| |
3,497
|
Net loss
|
| |
|
| |
|
| |
|
| |
(6,364)
|
| |
(6,364)
|
BALANCE AT JUNE 30, 2020
|
| |
30,679,965
|
| |
85
|
| |
94,661
|
| |
(54,387)
|
| |
40,359
|
|
| |
Ordinary shares
|
| |
Additional
paid-in capital |
| |
Accumulated
deficit |
| |
Total
|
|||
|
| |
Number of
shares |
| |
Amount
|
| ||||||||
|
| |
|
| |
|
| |
U.S. Dollars in thousands
|
||||||
BALANCE AT APRIL 1, 2019
|
| |
22,250,688
|
| |
59
|
| |
11,908
|
| |
(18,749)
|
| |
(6,782)
|
CHANGES DURING THREE MONTHS ENDED JUNE 30, 2019
|
| |
|
| |
|
| |
|
| |
|
| |
|
Issuance of ordinary shares and warrants, net of issuance costs
|
| |
4,123,666
|
| |
12
|
| |
9,103
|
| |
|
| |
9,115
|
Additional consideration for an asset purchase agreement
|
| |
|
| |
|
| |
10
|
| |
|
| |
10
|
Net loss
|
| |
|
| |
|
| |
|
| |
(964)
|
| |
(964)
|
BALANCE AT JUNE 30, 2019
|
| |
26,374,354
|
| |
71
|
| |
21,021
|
| |
(19,713)
|
| |
1,379
|
|
| |
Six Months Ended
|
|||
|
| |
June 30,
|
|||
|
| |
2020
|
| |
2019
|
|
| |
U.S. Dollars in thousands
|
|||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
| |
|
| |
|
Net loss
|
| |
(13,786)
|
| |
(1,675)
|
Adjustments required to reconcile net loss to net cash used in operating activities:
|
| |
|
| |
|
Share-based compensation
|
| |
8,347
|
| |
—
|
Depreciation
|
| |
33
|
| |
24
|
Changes in operating assets and liabilities:
|
| |
|
| |
|
Prepaid expenses and other current assets
|
| |
782
|
| |
—
|
Related party prepaid expenses
|
| |
(35)
|
| |
654
|
Other non-current assets
|
| |
41
|
| |
—
|
Accounts payable
|
| |
(69)
|
| |
(63)
|
Operating leases
|
| |
*
|
| |
—
|
Accrued expenses and other liabilities
|
| |
(51)
|
| |
—
|
Net cash used in operating activities
|
| |
(4,738)
|
| |
(1,060)
|
|
| |
|
| |
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
| |
|
| |
|
Purchase of property and equipment
|
| |
(244)
|
| |
(80)
|
Net cash used in investing activities
|
| |
(244)
|
| |
(80)
|
|
| |
|
| |
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
| |
|
| |
|
Proceeds from issuance of ordinary shares and warrants, net of issuance costs
|
| |
37,237
|
| |
9,264
|
Proceeds from issuance of ordinary shares upon exercise of warrants
|
| |
128
|
| |
—
|
Deferred offering costs
|
| |
(884)
|
| |
—
|
Net cash provided by financing activities
|
| |
36,481
|
| |
9,264
|
|
| |
|
| |
|
NET CHANGE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
|
| |
31,499
|
| |
8,124
|
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF THE PERIOD
|
| |
8,217
|
| |
5
|
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF THE PERIOD
|
| |
39,716
|
| |
8,129
|
SUPPLEMENTARY INFORMATION ON ACTIVITIES NOT INVOLVING CASH FLOWS:
|
| |
|
| |
|
Unpaid offering costs
|
| |
138
|
| |
—
|
Conversion of related party liability to shareholders' equity
|
| |
17,748
|
| |
—
|
Additional consideration for an asset purchase agreement
|
| |
—
|
| |
174
|
Operating lease liabilities arising from obtaining operating right-of-use assets
|
| |
486
|
| |
—
|
Issuance costs
|
| |
537
|
| |
—
|
(*)
|
Less than 1 thousand US dollars.
|
a.
|
Nano-X Imaging Ltd, an Israeli Company (hereinafter “the Company” or “Nanox IL” or “the Successor Company”), was incorporated on December 20, 2018 and commenced its operations on September 3, 2019.
|
b.
|
The Company's solution, referred to as the Nanox System, has two integrated components – “Nanox.ARC” and “Nanox.CLOUD”. Nanox.ARC is a medical imaging system incorporating the Company’s novel digital X-ray source. Nanox.CLOUD is a cloud-based system designed to provide end-to-end medical imaging services, including services such as image repository, radiologist matching, online and offline diagnostics review and annotation, connectivity to diagnostic assistive AI systems, billing and reporting.
|
c.
|
In order to complete its technology development program, the Company will require significant funding. Moreover, the Company has experienced net losses and negative cash flows from operations since its inception and has relied on its ability to fund its operations primarily through equity financings. As of June 30, 2020, the Company had an accumulated deficit and negative cash flows from operations. The Company anticipates such losses will continue until its product candidates reach commercial profitability.
|
d.
|
Current Impact of COVID-19
|
|
| |
Six months ended June 30,
|
| |
Six months ended June 30,
|
||||||
|
| |
2020
|
| |
2019
|
||||||
|
| |
Number of
share-based payment Awards |
| |
Weighted
average exercise price |
| |
Number of
share-based payment awards |
| |
Weighted
average exercise price |
Outstanding, at beginning of period
|
| |
3,410,406
|
| |
$1.89
|
| |
1,592,874
|
| |
$1.32
|
Changes during the period:
|
| |
|
| |
|
| |
|
| |
|
Granted
|
| |
121,840
|
| |
$8.91
|
| |
—
|
| |
—
|
Exercised
|
| |
(29,766)
|
| |
$2.21
|
| |
—
|
| |
—
|
Forfeited
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Expired
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Cancelled
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
Outstanding at end of period
|
| |
3,502,480
|
| |
$2.07
|
| |
1,592,874
|
| |
$1.32
|
Exercisable at end of period
|
| |
2,168,033
|
| |
$2.40
|
| |
1,592,874
|
| |
$1.32
|
|
| |
Six months ended
June 30, 2020 |
Fair value of one ordinary share
|
| |
16
|
Dividend yield
|
| |
0
|
Expected volatility
|
| |
44.40% - 57.34%
|
Risk-free interest rate
|
| |
0.34%-1.61%
|
Contractual term (years)
|
| |
5.00-10.00
|
June 30, 2020
Awards outstanding |
| |
|
| |
|
| |
Awards exercisable
|
|||
Exercise Price
|
| |
Number of
Awards outstanding at end of period |
| |
Weighted
average remaining contractual life (years) |
| |
Number of
Award exercisable at end of Period |
| |
Weighted
average remaining contractual life (years) |
$0.01
|
| |
186,815
|
| |
0.83
|
| |
186,815
|
| |
0.83
|
$1.92
|
| |
472,606
|
| |
1.31
|
| |
472,606
|
| |
1.31
|
$2.21
|
| |
2,759,896
|
| |
5.25
|
| |
1,441,420
|
| |
5.25
|
$16
|
| |
59,206
|
| |
4.96
|
| |
59,206
|
| |
4.96
|
$20.87
|
| |
23,957
|
| |
5.19
|
| |
7,986
|
| |
5.19
|
June 30, 2019
Awards outstanding |
| |
|
| |
|
| |
Awards exercisable
|
|||
|
| |
Number of
Awards outstanding at end of period |
| |
Weighted
average remaining contractual life (years) |
| |
Number of
Award exercisable at end of Period |
| |
Weighted
average remaining contractual life (years) |
$0.01
|
| |
186,815
|
| |
1.83
|
| |
186,815
|
| |
1.83
|
$0.30
|
| |
454,166
|
| |
0.27
|
| |
454,166
|
| |
0.27
|
$1.92
|
| |
472,606
|
| |
2.31
|
| |
472,606
|
| |
2.31
|
$2.21
|
| |
479,287
|
| |
2.87
|
| |
479,287
|
| |
2.87
|
|
| |
Six months ended June 30, 2020
|
||||||
|
| |
Number of
share-based payment awards |
| |
Weighted
average exercise price |
| |
Weighted
average remaining contractual life (years) |
Outstanding at beginning of period
|
| |
1,667,267
|
| |
2.21
|
| |
9.90
|
Changes during the period:
|
| |
|
| |
|
| |
|
Granted
|
| |
295,234
|
| |
2.21
|
| |
9.60
|
Exercised
|
| |
—
|
| |
—
|
| |
—
|
Forfeited
|
| |
—
|
| |
—
|
| |
—
|
Expired
|
| |
—
|
| |
—
|
| |
—
|
Cancelled
|
| |
(9,375)
|
| |
2.21
|
| |
—
|
Outstanding at end of period
|
| |
1,953,126
|
| |
2.21
|
| |
9.55
|
Exercisable at end of period
|
| |
726,880
|
| |
2.21
|
| |
9.55
|
|
| |
2020
|
Fair value of one ordinary share
|
| |
$16
|
Dividend yield
|
| |
0
|
Expected volatility
|
| |
45.11% - 50.65%
|
Risk-free interest rate
|
| |
1.45% - 1.61%
|
Contractual term (years)
|
| |
10
|
|
| |
Six Months Ended
June 30, |
| |
Three Months Ended
June 30, |
||||||
|
| |
2020
|
| |
2019
|
| |
2020
|
| |
2019
|
|
| |
(U.S. dollars in thousands)
|
|||||||||
Research and development
|
| |
1,917
|
| |
—
|
| |
240
|
| |
—
|
Marketing
|
| |
644
|
| |
—
|
| |
322
|
| |
—
|
General and administrative
|
| |
5,786
|
| |
—
|
| |
2,935
|
| |
—
|
|
| |
8,347
|
| |
—
|
| |
3,497
|
| |
—
|
a.
|
On June 4, 2020, the Company signed a supplemental lease agreement to expand its facilities in Israel, which expires in June 2023 (“Supplemental Lease Agreement”). The monthly rate for the Supplemental Lease Agreement is approximately $14 thousand per month.
|
b.
|
For services with SixAI Ltd. (“SixAI”), see Note 6c.
|
a.
|
Related parties transactions:
|
|
| |
Six Months Ended
June 30, |
| |
Three Months Ended
June 30, |
||||||
|
| |
2020
|
| |
2019
|
| |
2020
|
| |
2019
|
|
| |
(U.S. Dollars in thousands)
|
|||||||||
Research and development
|
| |
115
|
| |
99
|
| |
90
|
| |
50
|
General and administrative
|
| |
—
|
| |
278
|
| |
—
|
| |
148
|
b.
|
Six-Eye Interactive agreements for services
|
c.
|
SixAI Ltd. Service agreement
|
d.
|
Pursuant to the Asset Purchase Agreement between Nanox IL and Nanox PLC, as more fully described in the Company's annual financial statements, as of June 30, 2020, the Company has a related party liability balance of $192 thousand.
|
a.
|
Basic
|
|
| |
Six Months Ended
June 30, |
| |
Three Months Ended
June 30, |
||||||
|
| |
2020
|
| |
2019
|
| |
2020
|
| |
2019
|
Net loss
|
| |
(13,786)
|
| |
(1,675)
|
| |
$(6,364)
|
| |
$(964)
|
Weighted average number of ordinary shares (in thousands)
|
| |
29,273
|
| |
23,452
|
| |
29,628
|
| |
24,456
|
Basic and diluted loss per share
|
| |
(0.47)
|
| |
(0.07)
|
| |
$(0.21)
|
| |
$(0.04)
|
b.
|
Diluted
|
a.
|
In July 2020, the Company issued 625,000 ordinary shares to one of its investors, at a price per share of $16.00, for a purchase price of $10 million, received in July 2020, which reflects the second portion of the investor’s $20 million investment.
|
b.
|
In July 2020, the Company entered into additional share purchase agreements with certain investors for the issuance of 3,500,000 ordinary shares at a price per share of $16.00, for an aggregate purchase price of approximately $56 million. As of the date of the issuance of these financial statements, the funds were not received yet.
|
c.
|
The Company has evaluated subsequent events through July 30, 2020, the date on which the consolidated financial statements were available to be issued.
|
Item 6.
|
Exculpation, Insurance and Indemnification of Office Holders (Including Directors and Officers).
|
•
|
a monetary liability incurred by or imposed on the office holder in favor of another person pursuant to a court judgment, including pursuant to a settlement confirmed as judgment or arbitrator’s decision approved by a competent 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 the abovementioned foreseen events and amount or criteria;
|
•
|
reasonable litigation expenses, including reasonable attorneys’ fees, which were incurred by the office holder (i) as a result of an investigation or proceeding filed against the office holder by an authority authorized to conduct such investigation or proceeding, provided that such investigation or proceeding; was either (a) concluded without the filing of an indictment against such office holder and without the imposition on him of any monetary obligation in lieu of a criminal proceeding; (b) concluded without the filing of an indictment against the office holder but with the imposition of a monetary obligation on the office holder in lieu of criminal proceedings for an offense that does not require proof of criminal intent; or (ii) in connection with a monetary sanction;
|
•
|
a monetary liability imposed on the office holder in favor of an injured party at an Administrative Procedure (as defined below) as set forth in Section 52(54)(a)(1)(a) to the Securities Law;
|
•
|
expenses expended by the office holder with respect to an Administrative Procedure under the Securities Law, including reasonable litigation expenses and reasonable attorneys’ fees;
|
•
|
reasonable litigation expenses, including attorneys’ fees, incurred by the office holder or which were imposed on the office holder by a court (i) in a proceeding instituted against him or her by the company, on its behalf, or by a third party, (ii) in connection with criminal indictment of which the office holder was acquitted, or (iii) in connection with a criminal indictment which the office holder was convicted of an offense that does not require proof of criminal intent; and
|
•
|
Any other obligation or expense in respect of which it is permitted or will be permitted under applicable law to indemnify an office holder.
|
•
|
a breach of the duty of loyalty to the company, provided that the office holder acted in good faith and had a reasonable basis to believe that the act would not harm the company;
|
•
|
a breach of duty of care to the company or to a third party, to the extent such a breach arises out of the negligent conduct of the office holder;
|
•
|
a monetary liability imposed on the office holder in favor of a third party;
|
•
|
a monetary liability imposed on the office holder in favor of an injured party at an Administrative Procedure pursuant to Section 52(54)(a)(1)(a) of the Securities Law; and
|
•
|
expenses incurred by an office holder in connection with an Administrative Procedure, including reasonable litigation expenses and reasonable attorneys’ fees.
|
•
|
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 basis to believe that the act would not prejudice the company;
|
•
|
a breach of duty of care committed intentionally or recklessly, excluding a breach arising out of the negligent conduct of the office holder;
|
•
|
an act or omission committed with intent to derive illegal personal benefit; or
|
•
|
a fine or forfeit levied against the office holder.
|
Item 7.
|
Recent Sales of Unregistered Securities.
|
Item 8.
|
Exhibits and Financial Statement Schedules.
|
(a)
|
Exhibits
|
(b)
|
Financial Statement Schedules
|
Item 9.
|
Undertakings.
|
(a)
|
The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.
|
(b)
|
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
|
(c)
|
The undersigned registrant hereby undertakes that:
|
1.
|
For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
|
2.
|
For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
|
Exhibit No.
|
| |
Description
|
| |
Form of Underwriting Agreement
|
|
| |
Asset Purchase Agreement, dated September 3, 2019, by and between the Registrant and Nanox Imaging PLC
|
|
| |
Amendment to the Asset Purchase Agreement, dated December 3, 2019, by and between the Registrant and Nanox Imaging PLC
|
|
| |
Amendment to the Asset Purchase Agreement, dated December 31, 2019, by and between the Registrant and Nanox Imaging PLC
|
|
| |
Articles of Association of the Registrant
|
|
| |
Form of Amended and Restated Articles of Association of the Registrant to become effective immediately prior to the closing of the offering
|
|
4.1
|
| |
[Reserved]
|
| |
Form of warrants to purchase ordinary shares, dated September 2, 2019, in connection with the warrants originally issued to certain investors by Nanox Imaging PLC in 2016
|
|
| |
Form of warrants to purchase ordinary shares, dated September 2, 2019, in connection with the warrants originally issued to certain finders by Nanox Imaging PLC in 2015
|
|
| |
Form of warrants to purchase ordinary shares, dated September 2, 2019, in connection with the warrants originally issued to certain finders and employee by Nanox Imaging PLC in 2014 and 2015
|
|
| |
Form of warrants to purchase ordinary shares issued to A-Labs Finance and Advisory Ltd.
|
|
| |
Warrant to purchase ordinary shares, dated September 2, 2019, issued to SK Telecom TMT Investment Corp.
|
|
| |
Amendment to Warrant to purchase ordinary shares, dated June 4, 2020, issued to SK Telecom TMT Investment Corp.
|
|
| |
Opinion of Amit, Pollak, Matalon & Co., counsel to the Registrant, as to the validity of the ordinary shares (including consent)
|
|
| |
Contract Manufacturing Agreement, dated May 26, 2020, by and between the Registrant and FoxSemicon Integrated Technology, Inc.
|
|
| |
Registration Rights Agreement by and among the Registrant and the certain shareholders named therein
|
|
| |
2019 Equity Incentive Plan
|
|
| |
U.S. Sub-Plan
|
|
| |
Form of Indemnification Agreement between the Registrant and each director and executive officer
|
|
| |
List of subsidiaries of the Registrant
|
|
| |
Consent of PricewaterhouseCoopers International Limited, an independent registered public accounting firm
|
|
| |
Consent of Amit, Pollak, Matalon & Co. (included in Exhibit 5.1)
|
|
| |
Power of Attorney (included in signature page to Registration Statement)
|
*
|
To be filed by amendment.
|
†
|
Previously filed.
|
|
| |
NANO-X IMAGING LTD
|
|||
|
| |
|
| |
|
|
| |
By
|
| |
/s/ Ran Poliakine
|
|
| |
|
| |
Name: Ran Poliakine
|
|
| |
|
| |
Title: Chief Executive Officer
|
Signatures
|
| |
Title
|
| |
Date
|
|
| |
|
| |
|
/s/ Ran Poliakine
|
| |
Director and Chief Executive Officer
(Principal Executive Officer) |
| |
August 14, 2020
|
Ran Poliakine
|
| |||||
|
| |
|
| |
|
/s/ Itzhak Maayan
|
| |
Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer) |
| |
August 14, 2020
|
Itzhak Maayan
|
| |||||
|
| |
|
| |
|
*
|
| |
Director
|
| |
August 14, 2020
|
Onn Fenig
|
| |||||
|
| |
|
| |
|
*
|
| |
Director
|
| |
August 14, 2020
|
Floyd Katske
|
| |||||
|
| |
|
| |
|
*
|
| |
Director
|
| |
August 14, 2020
|
Erez Meltzer
|
| |||||
|
| |
|
| |
|
*
|
| |
Director
|
| |
August 14, 2020
|
Richard Stone
|
| |||||
|
| |
|
| |
|
* By:
|
| |
/s/ Ran Poliakine
|
| |
|
|
| |
Ran Poliakine
|
| |
|
|
| |
Attorney-in-fact
|
| |
|
|
| |
By:
|
| |
AUTHORIZED REPRESENTATIVE
|
|||
|
| |
|
| |
|
| |
|
|
| |
By:
|
| |
/s/ Richard Stone
|
|||
|
| |
|
| |
Name:
|
| |
Richard Stone
|
|
| |
|
| |
Title:
|
| |
Director
|
Very truly yours,
|
|||
NANO-X IMAGING LTD
|
|||
By:
|
|||
Name:
|
|||
Title:
|
By:
|
||
Authorized Signatory
|
Underwriter
|
Number of Shares
|
Cantor Fitzgerald & Co.
|
|
Oppenheimer & Co. Inc.
|
|
Berengerg Capital Markets, LLC
|
|
CIB World Markets Corp.
|
|
National Securities Corporation
|
|
Total
|
CANTOR FITZGERALD & CO.
|
|||
By:
|
|||
Name:
|
|||
Title:
|
Exhibit 3.2
AMENDED AND RESTATED
ARTICLES OF ASSOCIATION
OF
Nano-x Imaging LTD
Dated ____________ __, 2020
1. | Company Name |
The name of the Company is Nano-X Imaging Ltd and in Hebrew “ננו-אקס אימג’ינג בע”מ” (the “Company”).
2. | Purpose |
2.1. | The purpose of the Company is to engage in any lawful activity. |
2.2. | Pursuant to Section 11 of the Companies Law, the Company may from time to time, by decision of the Board of Directors, donate reasonable amounts of Company funds to a worthy cause, irrespective of whether such donation is based on business considerations. |
3. | Interpretation |
3.1. | In these Amended and Restated Articles of Association (these “Articles”), unless the context otherwise requires, the following capitalized terms shall have the following meanings: |
Board of Directors
Chairman
|
means the Board of Directors of the Company.
means the Chairman of the Board of Directors.
|
Companies Law | means the Israel Companies Law, 5759-1999 and all the regulations promulgated under it as shall be in effect from time to time. |
Legal Requirement(s) | shall mean the Companies Law and, to the extent applicable to the Company, the Israeli Companies Ordinance (New Version) 1983, the Securities Law, and all applicable laws, statutes, rules, regulations, orders, ordinances and requirements of all foreign, national, departmental and municipal governments and any relevant jurisdiction (including without limitation U.S. federal laws and regulations), and rules of any stock market in which the Company’s shares are registered for trading as shall be in force from time to time. |
Office Holder | means a Director (as defined below) and any other person defined as such in Section 1 of the Companies Law. |
Ordinary Resolution | Shall have the meaning set forth in Article 28.1. |
Ordinary Shares | means the Ordinary Shares of the Company with par value of NIS 0.01 each. |
1
Person | means an individual, corporation, partnership, joint venture, trust, any other corporate entity and any unincorporated association or organization. |
Registered Shareholders | means only those Shareholders who are registered in the Share Register. |
Securities Law | means the Israeli Securities Law 5728-1968, as amended from time to time, including any regulations promulgated thereunder. |
Shareholders |
means any holders of shares of the Company, whether registered in the Company’s Shareholders Register or registered with a nominee company as a holder of publicly listed Shares of the Company. |
Special Resolution | means a resolution adopted by at least sixty six and two thirds percent (66 2/3%) or more of the votes cast by those shareholders voting in person or by proxy (including by voting deed), not taking into consideration abstaining votes. |
3.2. | Other capitalized terms are used as defined elsewhere herein. Capitalized words and expressions used herein but not defined herein shall have the meanings given to such terms in the Companies Law in force on the date when these Articles or any amendment thereto, as the case may be, first became effective. Words and expressions importing the singular shall include the plural and vice versa. Words and expressions importing the masculine gender shall include the feminine gender. |
3.3. | The captions in these Articles are for convenience only and shall not be deemed a part hereof or affect the construction of any provision hereof. |
3.4. | The specific provisions of these Articles shall supersede the provisions of the Companies Law to the extent permitted under the Companies Law. With respect to any matter that is not specifically addressed in these Articles, the provisions of the Companies Law shall govern. |
4. | Public Company |
The Company is a public company as such term is defined in the Companies Law.
5. | Limitation of Liability |
The liability of each shareholder for the Company’s obligations is limited to the unpaid sum, if any, owing to the Company in consideration for the issuance of the shares held by such shareholder. If at any time the Company shall issue shares with no nominal value, the liability of the Shareholders shall be limited to the payment of the amount which the Shareholders should have paid the Company in respect of each share in accordance with the conditions of such issuance and was not paid to the Company.
SHARE CAPITAL
6. | Authorized Share Capital |
The share capital of the Company is NIS 1,000,000 divided into 100,000,000 Ordinary Shares with par value of NIS 0.01 each (the “Ordinary Shares”).
2
7. | Ordinary Shares |
The Ordinary Shares of the Company confer on the holders thereof the rights specified in these Articles and all other rights afforded by the Companies Law.
8. | Increase of Share Capital |
Subject to the provisions of applicable law, the Company may, from time to time, by Ordinary Resolution, increase the share capital of the Company by the creation of new shares. Any such increase shall be in such amount and shall be divided into shares of such nominal amounts, and such shares shall confer such rights and preferences, and shall be subject to such restrictions, as the shareholders resolution approving the creation of such shares shall provide. Except to the extent otherwise provided in the shareholders resolution creating such new shares, or in any amendment to these Articles relating to such shares, such new shares shall be subject to all the provisions applicable to the Ordinary Shares.
9. | Special Rights; Modifications of Rights |
9.1. | The Company may, from time to time, by Ordinary Resolution, provide for shares with such preferred or deferred rights or rights of redemption or other special rights or such restrictions, whether in regard to dividends, voting, repayment of share capital or otherwise, as may be stipulated in such Ordinary Resolution. |
9.2. | If at any time the share capital is divided into different classes of shares, the rights attached to any class, unless otherwise provided by these Articles, may be modified or abrogated by the Company only by Ordinary Resolution and the sanction of a separate General Meeting of the holders of the shares of such class (a “Class Meeting”); provided however that to the maximum extent permitted under applicable law by Ordinary Resolution, and unless otherwise explicitly provided by these Articles: (i) any alteration or change in the rights, preferences, or privileges which affect all the shareholders of the Company, as a single group, without preferences or differences among them; or (ii) any alteration or change in any rights, preferences, or privileges of any class of shares which is applied in the same manner to all the shareholders of the Company, including, for the avoidance of doubt, issuance of additional existing shares or the creation or issuance of any new class or series of shares or any other securities convertible into equity securities of the Company having a preference over, or being on parity with, an existing class of shares (including with respect to voting, dividends or rights upon liquidation); in each case, shall not be deemed to be a change to the rights of the existing classes of shares and shall be approved by the holders of the majority of the voting power represented at the meeting of all shareholders of all classes voting together as a single class, on as converted basis and such alteration or change shall not be deemed to modify or abrogate the rights attached to the previously issued shares or classes. |
9.3. | Subject to Article 9.2 above, any right or limitation expressly provided for the benefit or protection of a specifically named shareholder or class of shares may not be modified, abrogated or waived without the prior written consent of such shareholder, or majority holders of such class of shares (on an as converted basis). |
3
10. | Consolidation, Subdivision, Cancellation and Reduction of Share Capital |
10.1. | The Company may, from time to time, by resolution of the shareholders of the Company (subject to the provisions of these Articles and applicable law): |
i. | consolidate and divide all or any of the issued or unissued share capital of the Company into shares of larger nominal value than the then existing shares; |
ii. | subdivide the shares (issued or unissued) or any class of shares, into shares of smaller nominal value than is fixed by these Articles, and the shareholders resolution whereby any share is subdivided may determine that, as among the holders of the shares resulting from such subdivision, one or more of the shares may, as compared with the others, have any such preferred or deferred rights or rights of redemption or other special rights, or be subject to any such restrictions, as the Company has power to attach to unissued or new shares; or |
iii. | cancel any shares which, at the date of the adoption of such shareholders resolution have not been taken or agreed to be taken by any Person, and diminish the amount of the share capital of the Company by the amount of the shares so cancelled. |
10.2. | With respect to any consolidation of issued shares into shares of larger nominal value, and with respect to any other action which may result in fractional shares, the Board of Directors may settle, subject to the Companies Law, any difficulty which may arise with regard thereto, as it deems fit, including, inter alia, resort to one or more of the following actions: |
i. | determine, as to the holder of shares so consolidated, which issued shares shall be consolidated into each share of larger nominal value; |
ii. | allot, in contemplation of or subsequent to such consolidation or other action, such shares or fractional shares sufficient to preclude or remove fractional share holdings; and |
iii. | cause the transfer of fractional shares by certain shareholders of the Company to other shareholders thereof so as to most expediently preclude or remove any fractional shareholdings, and cause the transferees to pay the transferors the fair value of fractional shares so transferred, and the Board of Directors is hereby authorized to act as agent for the transferors and transferees with power of substitution for purposes of implementing the provisions of this sub-Article iii. |
SHARES
11. | Share Register; Registered Holder |
11.1. | The Company shall have and manage an updated register of shareholders according to the provisions of the Companies Law (the “Share Register”). |
11.2. | Except as otherwise provided in these Articles, the Company shall be entitled to treat the registered holder of any share as the absolute owner thereof, and, accordingly, shall not, except as ordered by a court of competent jurisdiction, or as required by statute, be bound to recognize any equitable or other claim to, or interest in such share on the part of any other Person. Without derogating from the aforesaid, a shareholder who is a trustee shall be recorded in the Share Register with a notation as to the trustee’s trusteeship and the trustee shall be deemed a shareholder for the purposes of the Companies Law and shall hold such rights as these Articles dictate. |
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12. | Allotment of Shares |
The unissued shares of the Company shall be under the control of the Board of Directors, who shall have the power to allot such shares or otherwise dispose of such shares to such Persons, on such terms and conditions, and either at par or at a premium, or subject to the provisions of the Companies Law, at a discount and/or with payment of commission, and at such times, as the Board of Directors may deem fit, and the power to give to any Person the option to acquire from the Company any shares, either at par or at a premium, or, subject as aforesaid, at a discount and/or with payment of commission, during such time and for such consideration as the Board of Directors may deem fit.
13. | Issuance of Share Certificates, Replacement of Lost Certificates |
13.1. | To the extent that the Board of Directors determines that all shares shall be certificated or, if the Board of Directors does not so determine, to the extent that any Shareholder requests a share certificate, share certificates shall be issued under the corporate seal of the Company or its written, typed or stamped name and may bear the signature of one Director, the Company’s Chief Executive Officer or of any other person or persons authorized therefor by the Board of Directors. Signatures may be affixed in any mechanical or electronic form, as the Board of Directors may prescribe. For the avoidance of doubt, any transfer agent designated by the Company may issue share certificates on behalf of the Company even if the signatories on the share certificate no longer serve in the relevant capacities at the time of such issuance. |
13.2. | Subject to the Article 13.1, each Shareholder shall be entitled to one numbered certificate for all the shares of any class registered in his name. Each certificate may also specify the amount paid up thereon. The Company (as determined by an officer of the Company to be designated by the Chief Executive Officer) 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 such officer, unreasonable. Where a Shareholder has sold or transferred some of such Shareholder’s shares, such Shareholder shall be entitled to receive a certificate in respect of such Shareholder’s remaining shares, provided that the previous certificate is delivered to the Company before the issuance of a new certificate. |
13.3. | A share certificate registered in the names of two or more persons shall be delivered to the person first named in the Share Register in respect of such co-ownership. |
13.4. | A share certificate which has been defaced, lost or destroyed, may be replaced, and the Company shall issue a new certificate to replace such defaced, lost or destroyed certificate upon payment of such fee, and upon the furnishing of such evidence of ownership and such indemnity, as the Board of Directors in its discretion deems fit. |
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14. | Payment in Installments |
If by the terms of allotment or issue of any share, the whole or any part of the price thereof shall be payable in installments, every such installment shall, when due, be paid to the Company by the then registered holder of the share or the Person entitled thereto.
15. | Redeemable Shares |
The Board of Directors may, subject to the provisions of the Companies Law, issue redeemable shares or other securities and redeem the same on the terms and conditions as the Board of Directors may deem fit.
TRANSFER OF SHARES
16. | Effectiveness and Registration |
No transfer of shares shall be registered unless a proper instrument of transfer (in form and substance satisfactory to the Board of Directors) has been submitted to the Company (or its transfer agent), together with any share certificate(s), if any, and such other evidence of title as the Board of Directors may reasonably require. Notwithstanding anything to the contrary herein, shares registered in the name of The Depository Trust Company or its nominee shall be transferrable in accordance with the policies and procedures of The Depository Trust Company. Until the transferee has been registered in the Share Register in respect of the shares so transferred, the Company may continue to regard the transferor as the owner thereof. The Board of Directors, may, from time to time, prescribe a fee for the registration of a transfer, and may approve other methods of recognizing the transfer of shares in order to facilitate the trading of the Company’s shares on the NASDAQ or on any other stock exchange on which the Company’s shares are then listed for trading.
17. | Suspension of Registration |
The Board of Directors may in its discretion and subject to applicable law and regulations, close the Share Register to registration of transfer of shares during any year for a period determined by the Board of Directors, and no registrations of transfer of shares shall be made by the Company during any such period. The Company shall notify the shareholders with respect to such suspension of registration.
18. | Record Date for Notices of General Meeting and Other Action |
Notwithstanding any other contrary provision of these Articles, in order that the Company may determine the shareholders entitled to notice of or to vote at any Annual or Special General Meeting or any adjournment thereof, or to express consent to or dissent from any corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of or to take or be the subject of any other action, the Board of Directors may fix in advance, a record date, which shall not be more than forty nor less than four days before the date of such meeting, corporate action in writing or dividend or other distribution or allotment (or any longer or shorter period permitted by law, including regulations promulgated pursuant to the Companies Law). A determination of shareholders of record entitled to notice of or to vote at a meeting shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.
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TRANSMISSION OF SHARES
19. | Decedents’ Shares |
Upon the death of a Shareholder, the Company shall recognize the custodian or administrator of the estate or executor of the will, and in the absence of such, the lawful heirs of the Shareholder, as the only holders of the right for the shares of the deceased Shareholder, after receipt of evidence to the entitlement thereto, as determined by the Board of Directors. In case of a share registered in the names of two or more holders, the Company may recognize the survivor as the sole owner thereof unless and until the provisions of the preceding sentence have been effectively invoked.
20. | Receivers and Liquidators |
The Company may recognize the receiver or liquidator of any corporate Shareholder in liquidation or dissolution, or the receiver or trustee in bankruptcy of any Shareholder, as being entitled to the shares registered in the name of such Shareholder, after receipt of evidence to the entitlement thereto, as determined by the Board of Directors.
21. | Notwithstanding the foregoing, subject to the provisions of the Companies Law and the provisions of these Articles, if it is proven to the Company to the satisfaction of the Board of Directors and by means to be determined by the Board of Directors, that the conditions in law for the endorsement of a right in the shares registered in the Share Register in the name of a Shareholder, exist, the Company will recognize the endorsee and the endorsee only as holding the right of the said shares. |
GENERAL MEETINGS
22. | Annual General Meeting |
Subject to the provisions of the Companies Law, the Company shall hold an Annual General Meeting once each calendar year, but not later than fifteen (15) months after the last preceding Annual General Meeting. An Annual General Meeting shall be held at such place either within or without the State of Israel as may be determined by the Board of Directors.
The agenda at any Annual General Meeting shall include, inter alia, and as applicable:
22.1. | Review of the Company’s annual financial statements. |
22.2. | Appointment of members to the Board of Directors. |
22.3. | Appointment of the Company’s Auditor (as defined below) and report of the terms of its engagement. |
22.4. | Any other matter that the Board of Directors has decided to bring before the Shareholders. |
23. | Special General Meetings |
23.1. | All General Meetings other than Annual General Meetings shall be called “Special General Meetings.” |
23.2. | The Board of Directors may, whenever it deems fit, convene a Special General Meeting at such time and place, within or without the State of Israel, as may be determined by the Board of Directors, and shall be obligated to do so upon requisition in writing in accordance with Section 63(b) of the Companies Law, these Articles, and any Legal Requirement. |
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24. | Shareholder Proposals |
24.1. | A shareholder (a “Proposing Shareholder”) holding one percent (1%) or more of the outstanding voting rights in the Company may request, subject to the provisions of Section 66(b) of the Companies Law, that the Board of Directors include a proposal on the agenda of a General Meeting to be held in the future, provided that the Proposing Shareholder gives timely notice of such request in writing (a “Proposal Request”) to the Company and the Proposal Request complies with all the requirements of this Article 24, these Articles and applicable law and securities exchange rules. To be considered timely, a Proposal Request must be delivered, either in person or by certified mail, postage prepaid, and received at the principal executive office of the Company, no less than sixty (60) days prior to the date of issuance of the Company’s proxy statement summoning a General Meeting. |
24.2. | The Proposal Request shall set forth all the following: (i) the name, business address, telephone number and email address of the Proposing Shareholder (or each member of the group constituting the Proposing Shareholder, as the case may be) and, if an entity, the name(s) of the person(s) that controls or manages such entity; (ii) the number of Ordinary Shares held by the Proposing Shareholder, directly or indirectly, and, if any of such Ordinary Shares are held indirectly, an explanation of how they are held and by whom, and, if such Proposing Shareholder is not the holder of record of any such Ordinary Shares, a written statement from the holder of record or authorized bank, broker, depository or other nominee, as the case may be, indicating the number of shares the Proposing Shareholder is entitled to vote as of a date that is no more than ten (10) days prior to the date of delivery of the Proposal Request; (iii) any agreements, arrangements, understandings or relationships between the Proposing Shareholder and any other person with respect to any securities of the Company or the subject matter of the Proposal Request; (iv) the Proposing Shareholder’s purpose in making the Proposal Request; (v) the complete text in the English language of the resolution that the Proposing Shareholder proposes to be voted upon at the General Meeting and, if the Proposing Shareholder wishes to have a statement in support of the Proposing Shareholder’s proposal included in the Company’s proxy statement, a copy of such statement, which shall be in the English language; and (vi) a statement of whether the Proposing Shareholder has a personal interest in the proposal and, if so, a description in reasonable detail of such personal interest. |
24.3. | If the proposal of the Proposing Shareholder is to nominate a candidate for election to the Board of Directors, the Proposal Request shall set forth, in addition to the requirements set forth in Article 24.2, the following: (i) a declaration signed by the nominee and the other information required under Section 224B of the Companies Law; (ii) to the extent not otherwise provided in the Request Proposal, all the declarations, documents and other information required pursuant to the Companies Law and any other law to which the Company shall be subject at that time, including the rules of every securities exchange on which the Company’s shares are listed for trade at that time, in order to propose the candidate for election and in order for him to be appointed as a Director; (iii) a representation of whether the nominee meets the objective criteria for an independent Director of the Company under the listing rules of the relevant securities exchange on which the Company’s shares are then listed, and if not, an explanation of why not, and (iv) a statement signed by the nominee that he consents to be named in the Company’s notices and proxy materials relating to the General Meeting and, if elected, to serve on the Board of Directors. |
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24.4. | In addition to the forgoing, the Proposing Shareholder shall promptly provide any other information reasonably requested by the Company. The Company shall be entitled to publish information provided by a Proposing Shareholder pursuant to this Article 24, and the Proposing Shareholder shall be responsible for the accuracy thereof. |
24.5. | The information required pursuant to this Article 24 shall be updated as of (i) the record date of the General Meeting, (ii) five business days before the General Meeting, and (iii) as of the General Meeting, and any adjournment or postponement thereof. |
24.6. | One or more Proposing Shareholders holding, in the aggregate, either (i) five percent (5%) or more of the outstanding voting rights in the Company or (ii) five percent (5%) or more of the outstanding share capital and one percent (1%) or more of the voting rights in the Company, may request, subject to the provisions of Section 63(b)(2) of the Companies Law, that the Board of Directors convene a Special General Meeting, provided that the request complies with all the applicable requirements of a “Proposal Request” set forth in this Article 24 above, these Articles and applicable laws and securities exchange rules. |
25. | Notice of General Meetings; Failure to Give Notice |
25.1. | No notices of General Meetings shall be required to be given to Shareholders other than the Registered Shareholders. Notices of General Meetings shall be given not less than twenty one (21) days prior to the meeting or as required by the provisions of the Companies Law and other applicable laws. |
25.2. | The accidental omission to give notice of a meeting to any shareholder, or the non-receipt of notice sent to such shareholder, shall not invalidate the proceedings at such meeting. |
25.3. | No shareholder present, in person or by proxy, at the commencement of a General Meeting shall be entitled to seek the revocation of any proceedings or resolutions adopted at such General Meeting on account of any defect in the notice of such meeting relating to the time or the place thereof. |
PROCEEDINGS AT GENERAL MEETINGS
26. | Quorum |
26.1. | In the absence of contrary provisions in any Legal Requirement and except as provided in the following Article with regard to an adjourned general meeting, two or more shareholders (not in default in payment of any sum referred to in these Articles), present in person or by proxy (including by voting deed) and holding shares conferring in the aggregate at least 25% of the voting power of the Company, shall constitute a quorum at General Meetings. No business shall be transacted at a General Meeting, or at any adjournment thereof, unless the requisite quorum under these Articles for such General Meeting or such adjourned meeting, as the case may be, is present when the meeting proceeds to business. General Meetings may be held telephonically or by any other means of communication, provided that each shareholder participating in such meeting can hear all of the other shareholders participating in such meeting. |
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26.2. | If within half an hour from the time appointed for the meeting a quorum is not present, the meeting shall stand adjourned to the same day in the next week, at the same time and place, or to such day and at such time and place as the Board of Directors may determine. No business shall be transacted at any adjourned meeting, except business that might lawfully have been transacted at the meeting as originally called. At such adjourned meeting, if the original meeting was convened upon requisition under Section 63 or Section 64 of the Companies Law, one or more Shareholders, present in person or by proxy (including by voting deed), and holding the number of shares required for making such requisition, shall constitute a quorum, but in any other case, any present shareholders in person or by proxy (including by voting deed) shall constitute a quorum. |
27. | Chairman |
The Chairman of the Board of Directors shall preside as Chairman at every General Meeting of the Company. If at any meeting such Chairman is not present within fifteen (15) minutes after the time fixed for holding the meeting or is unable or unwilling to act as Chairman, any Director appointed for such purpose by the Board of Directors, shall chair such General Meeting of the Company. The office of Chairman shall not entitle the holder thereof to vote at any General Meeting nor shall it entitle such holder to a second or casting vote.
28. | Adoption of Resolutions at General Meetings |
28.1. | Unless otherwise required by any Legal Requirement or provided for in these Articles, all resolutions by the General Meeting will be adopted by an Ordinary Resolution. An Ordinary Resolution shall be deemed adopted if approved by the holders of a majority of the voting power represented at a General Meeting in person or by proxy (including by voting deed) and voting thereon, not taking into consideration abstaining votes. |
28.2. | A declaration by the Chairman of the meeting that a resolution has been carried unanimously, or carried by a particular majority, or lost, and an entry to that effect in the minute book of the Company, shall be conclusive evidence of that fact, absent manifest error. |
28.3. | Subject to the provisions of the Companies Law, a defect in convening or conducting a General Meeting, including a defect deriving from the non-fulfillment of any provision or condition set forth in the Companies Law or these Articles, including with regard to the manner of convening or conducting the General Meeting, shall not disqualify any resolution passed at the General Meeting and shall not affect the discussions or decisions which took place thereat. |
29. | Power to Adjourn |
29.1. | The Chairman of a General Meeting at which a quorum is present may, with the consent of the holders of a majority of the voting power represented in person or by proxy and voting on the question of adjournment (and shall if so directed by the meeting), 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 event notice thereof shall be given in the manner required for the meeting as originally called. |
29.2. | 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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30. | Voting Power |
Subject to the provisions of Article 31.1 and subject to any provision hereof conferring special rights as to voting, or restricting the right to vote, every shareholder shall have one vote for each Ordinary Share held by such shareholder of record or in his name with an “exchange member” and held of record by a “nominees company” (as such terms are defined under Section 1 of the Companies Law), on every resolution.
31. | Voting Rights |
31.1. | No shareholder shall be entitled to vote at any General Meeting (or be counted as a part of the quorum thereat), unless all calls and other sums then payable by such shareholder in respect of such shareholder’s shares in the Company have been paid. |
31.2. | A company or other corporate body being a shareholder of the Company may, by resolution of the managing body or the applicable organ thereof, authorize any person to be its representative at any meeting of the Company. Any person so authorized shall be entitled to exercise on behalf of such shareholder all the power that the latter could have exercised if it were an individual shareholder. Upon the request of the Chairman of the meeting, written evidence of such authorization (in form acceptable to the Chairman) shall be delivered to the Chairman at the meeting. |
31.3. | Any shareholder entitled to vote may vote either personally or by proxy (who need not be a shareholder of the Company), or, if the shareholder is a company or other corporate body, by a representative authorized pursuant to Article 31.2. |
31.4. | If two or more Persons are registered as joint holders of any share, the vote of the senior who tenders a vote, in person or by proxy, shall be accepted to the exclusion of the vote of the other joint holder; and for this purpose seniority shall be determined by the order in which the names stand in the Share Register. |
PROXIES
32. | Instrument of Appointment |
32.1. | The instrument appointing a proxy shall be in writing and shall be in such form as may be approved by the Board of Directors, including a form which provides for a continuing proxy until the occurrence of such date or event as is specified in the proxy. It shall be duly signed by the appointer, a duly authorized attorney of the appointer, or an agent thereof, with the stamp or printed name of the company or incorporated entity. |
32.2. | Unless otherwise prescribed by the Board of Directors, the instrument appointing a proxy (and the power of attorney or other authority, if any, under which such instrument has been signed) shall be delivered to the Company (at its registered office, or at its principal place of business or at the offices of its registrar and/or transfer agent or at such place as the Board of Directors may specify) not less than forty-eight (48) hours (or such shorter period as may be determined by the Board of Directors or the Chairman of the General Meeting) before the time fixed for such meeting. |
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32.3. | An instrument appointing a proxy (including a voting deed) shall be deemed revoked (i) upon receipt by the Company 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 (and such other documents, if any, required under Article 32.2 for such new appointment), 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 32.2 hereof, or (ii) if the appointing shareholder is present in person at the meeting for which such instrument of proxy (including by voting deed) was delivered, upon receipt by the Company of written notice from such shareholder of the revocation of such appointment, or if and when such shareholder actually votes at such meeting. A vote cast in accordance with an instrument appointing a proxy (including a voting deed) 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 32.3 at or prior to the time such vote was cast. |
33. | Effect of Death of Appointer or Revocation of Appointment |
A vote cast pursuant to an instrument appointing a proxy (including a voting deed) shall be valid notwithstanding the previous death, liquidation or winding-up of the appointing shareholder (or of such shareholder’s attorney-in-fact, if any, who signed such instrument), or the revocation of the appointment or the transfer of the share in respect of which the vote is cast, provided no written intimation of such death, liquidation, winding-up, revocation or transfer shall have been received by the Company or by the Chairman of the meeting before such vote is cast and provided, further, that the appointing shareholder, if present in person at said meeting, may revoke the appointment by means of a writing, oral notification to the Chairman, or otherwise.
34. | Class Meetings |
Subject to the provision of the Companies Law and other applicable laws, the provisions of these Articles relating to General Meetings shall apply, mutatis mutandis, to any Class Meeting.
BOARD OF DIRECTORS
35. | Powers of Board of Directors |
The Board of Directors shall determine the Company’s policies, oversee the activities of the Chief Executive Officer, and take such other actions as are described in Section 92 of the Companies Law. In the absence of a Chief Executive Officer and other senior executive officers of the Company, the Board of Directors shall manage the business of the Company. The authority conferred on the Board of Directors by this Article 35 shall be subject to the provisions of the Companies Law and of these Articles.
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36. | Exercise of Powers of Directors |
36.1. | A meeting of the Board of Directors at which a quorum is present shall be competent to exercise all the authorities, powers, and discretions vested in or exercisable by the Board of Directors. |
36.2. | A resolution proposed at any meeting of the Board of Directors shall be deemed adopted if approved by a majority of the Directors present when such resolution is put to a vote, lawfully entitled to vote thereon and voting thereon. |
36.3. | A resolution in writing signed by all Directors then in office and lawfully entitled to vote thereon or to which all such Directors have given their consent (by e-mail, facsimile, letter or otherwise) and which has been signed by the Chairman of the Board of Directors shall be deemed to have been unanimously adopted by a meeting of the Board of Directors duly convened and held. |
37. | Delegation of Powers |
37.1. | Subject to Section 112 of the Companies Law, the Board of Directors may delegate any or all of its powers to committees, each consisting of two (2) or more Directors (unless instructed otherwise by applicable law) and, in addition, shall create such committees as required under the Companies Law, and it may from time to time revoke such delegation or alter the composition of any such committee. Any committee so formed (in these Articles referred to as a “Committee of the Board of Directors”) shall, in the exercise of the powers so delegated, conform to any regulations imposed on it by the Board of Directors. The meetings and proceedings of any such Committee of the Board of Directors shall, mutatis mutandis, be governed by the provisions herein contained for regulating the meetings of the Board of Directors, so far as not superseded by any regulations adopted by the Board of Directors under this Article. Unless otherwise expressly provided by the Board of Directors in delegating powers to a Committee of the Board of Directors, such Committee shall not be empowered to further delegate such powers. |
37.2. | Without derogating from the provisions of Article 52, the Board of Directors may, subject to the provisions of the Companies Law, from time to time appoint a Secretary to the Company, as well as officers, agents, employees and independent contractors, as the Board of Directors may deem appropriate, and may terminate the service of any such person. The Board of Directors may, subject to the provisions of the Companies Law, determine the powers and duties, as well as the terms and conditions of employment, of all such persons, and may require security in such cases and in such amounts as it deems appropriate. |
37.3. | The Board of Directors may from time to time, by power of attorney or otherwise, appoint any Person to be the attorney or attorneys of the Company at law or in fact for such purpose and with such powers, authorities and discretions, and for such period and subject to such conditions, as it deems fit, and any such power of attorney or other appointment may contain such provisions for the protection and convenience of persons dealing with any such attorney as the Board of Directors may deem fit, and may also authorize any such attorney to delegate all or any of the powers, authorities and discretions vested in him. |
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38. | Number of Directors |
38.1. | The Board of Directors shall consist of a minimum of 5 directors and a maximum 10 directors (in each case including at least 2 External Directors, as defined in the Companies Law) (individually a “Director” and collectively, the “Directors”). Subject to the aforesaid, the number of Directors shall be determined, from time to time, by a majority of the Directors then in office; provided that no determination in respect of a decrease in the number of Directors shall shorten the term of any incumbent Director. |
38.2. | Notwithstanding Article 38.1, the Company shall appoint External Directors as and to the extent required by, and they shall hold office according to, the Companies Law, as long as the Company is required by the Companies Law to appoint External Directors. |
39. | Appointment and Removal of Directors |
39.1. | The Directors, other than External Directors (who will be chosen and appointed, will serve and whose term will expire in accordance with applicable law), shall be appointed in accordance with the provisions of this Article. |
39.2. | Other than External Directors, for whom special election requirements apply under the Companies Law, the Directors of the Company are divided into three classes with staggered three-year terms. Each class of directors shall consist, as nearly as possible, of one-third of the total number of Directors constituting the entire Board of Directors (other than the External Directors). At each Annual General Meeting, the election or re-election of Directors following the expiration of the term of office of the Directors of that class of Directors will be for a term of office that expires on the third Annual General Meeting following such election or re-election, such that from 2021 and thereafter, at each Annual General Meeting the term of office of only one class of Directors will expire. Each Director holds office until the third Annual General Meeting and until his or her successor is duly appointed, unless the tenure of such Director expires earlier pursuant to the Companies Law or unless removed from office as described below, except that External Directors have a term of office of three years under the Companies Law (unless the tenure of such director expires earlier pursuant to the Companies Law). The General Meeting, by a Special Resolution, shall be entitled to remove any Director(s) from office and to elect director(s) in place of the Director(s) so removed. |
39.3. | The Company shall appoint as directors only persons who are competent to serve as directors according to any applicable law. |
39.4. | An amendment to this Article 39 shall require a Special Resolution. |
40. | Commencement of Directorship |
Without derogating from Article 39, the term of office of a Director shall commence as of the date of his appointment or election, or on a later date if so specified in his appointment or election.
41. | Qualification of Directors |
No Person shall be disqualified to serve as a Director by reason of not holding shares in the Company or, subject to applicable law, by reason of having served as a Director in the past.
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42. | Continuing Directors in the Event of Vacancies |
The Board of Directors may at any time and from time to time appoint any person as a Director to fill a vacancy (whether such vacancy is due to a Director no longer serving or due to the number of Directors serving being less than the maximum number stated in Article 38 hereof). In the event of one or more such vacancies in the Board of Directors, the continuing Directors may continue to act in every matter, provided, however, that if they number less than the minimum number provided for pursuant to Article 38 hereof, they may only act in an emergency or to fill the office of Director which has become vacant up to a number equal to the minimum number provided for pursuant to Article 38 hereof. The office of a Director that was appointed by the Board of Directors to fill any vacancy shall only be for the remaining period of time during which the Director whose service has ended was filled would have held office, or in case of a vacancy due to the number of Directors serving being less than the maximum number stated in Article 38 hereof, the Board shall determine at the time of appointment the class pursuant to Article 39 to which the additional Director shall be assigned.
43. | Vacation of Office and Rotation of Directors |
43.1. | The office of a Director shall be vacated by his written resignation. Such resignation shall become effective on the date fixed therein, or upon the delivery thereof to the Company, whichever is later. |
43.2. | The office of a Director shall be vacated, ipso facto, upon the occurrence of any of the following: (i) such Director’s death, (ii) such Director is convicted of a crime as described in Section 232 of the Companies Law, (iii) such Director is no longer fit to serve as a director in accordance with Section 228(a) of the Companies Law, (iv) such Director is removed by a court of law in accordance with Section 233 of the Companies Law, (v) such Director becomes legally incompetent, (vi) if such Director is an individual, such Director is declared bankrupt, (vii) if such Director is a corporate entity, upon its winding-up or liquidation, whether voluntary or involuntary, (viii) if such director’s term of office has expired, (ix) with respect to an External Director – if such Director no longer meets the requirements set forth in Section 240 to the Companies Law, or (x) if such Director is prohibited by applicable law or the listing rules of any securities exchange on which the Company’s shares are then listed from serving as a director of the Company. |
43.3. | A Director must retire from office as Director no later than the longer of: |
i. | the third Annual General Meeting of the Company following the Director’s appointment; or |
ii. | three (3) years, following that Director’s last election or appointment. |
43.4. | A Director who retires under Article 43.3 is eligible for re-election. A Director who retires under Article 43.3 at an Annual General Meeting shall retain office until his successor is appointed and in any event until dissolution of that meeting. |
44. | Remuneration of Directors |
Subject to applicable law, the Directors may be paid any remuneration by the Company for such Director’s services as a member of the Board of Directors, provided that such remuneration has been approved pursuant to the provisions of the Companies Law. The Directors shall also be entitled to the reimbursement for out-of-pocket and travel expenses incurred in connection with the performance of their services to the Company.
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45. | Conflict of Interests |
Subject to the provisions of the Companies Law, the Company may enter into any contract or otherwise transact any business with any Office Holder in which contract or business such Office Holder 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; provided, however, that if such Officer Holder is a Director, such Director shall refrain from voting on such matter where such personal interest exists, unless such voting is permitted by the Companies Law. The Board of Directors shall be entitled to delegate its approval power under Section 271 of the Companies Law to a Committee of the Board of Directors or to such person it deems appropriate, whether generally, with respect to a certain contract or transaction or with respect to certain types of contracts or transactions, and the power of such committee or person shall be regarded as another method of approval within the meaning of Section 271 of the Companies Law.
46. | Alternate Directors |
46.1. | Subject to the provisions of the Companies Law, any Director may, by written notice to the Company, appoint an alternate for himself (in these Articles, an “Alternate Director”), dismiss such Alternate Director and appoint another Alternate Director in place of any Alternate Director appointed by him 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. |
46.2. | 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. Nevertheless, a Director who is already serving as a Director may be appointed as an alternate director for a member of a committee of the Board of Directors as long as he or she is not already serving as a member of such committee, and if the Alternate Director is to replace an External Director, he or she is required to be an External Director and to have either “Financial and Accounting Expertise” or “Professional Expertise,” depending on the qualifications of the External Director he or she is replacing. |
46.3. | An Alternate Director shall have all 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. |
46.4. | The office of an Alternate Director shall be vacated under the circumstances, mutatis mutandis, set forth in Article 43, and such office shall ipso facto be vacated if the Director who appointed such Alternate Director ceases to be a Director. |
PROCEEDINGS OF THE BOARD OF DIRECTORS
47. | Meetings |
47.1. | The Board of Directors may meet and adjourn its meetings and otherwise regulate such meetings and proceedings as the Directors deem fit. Meetings of the Board of Directors may be held by telephone or by any other means of communication provided that each Director participating in such meeting can hear all of the other Directors participating in such meeting. |
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47.2. | The Chairman of the Board of Directors, and, in the absence of a Chairman, any Director, may convene a meeting of the Board of Directors, but not less than two (2) days written notice shall be given of any meeting, unless such notice is waived in writing by all of the Directors as to a particular meeting. |
48. | Quorum |
48.1. | Provided notice of a meeting of the Board of Directors has been provided in accordance with these Articles, a quorum at a meeting of the Board of Directors shall be constituted by the presence, in person or represented by an Alternate Director, of a majority of the Directors then in office who are lawfully entitled to participate in the meeting. |
48.2. | If within half an hour from the time appointed for the meeting a quorum is not present, the meeting shall stand adjourned to such time, date and place as the Chairman may determine, or, in his absence, by the Directors present at the convened meeting, provided that not fewer than two (2) days’ written notice shall have been provided to each of the Directors of such meeting. No business shall be transacted at any adjourned meeting except business that might lawfully have been transacted at the meeting as originally called. At such adjourned meeting, a majority of the Directors present in person or represented by an Alternate Director shall constitute a quorum. |
49. | Chairman of the Board of Directors |
The Board of Directors, by a decision taken by a majority of the Directors may from time to time elect one of its members to be the Chairman of the Board of Directors, remove such Chairman from office and appoint another in his place. The Chairman of the Board of Directors shall preside at every meeting of the Board of Directors, but if there is no such Chairman, or if at any meeting the Chairman is not present within fifteen (15) minutes of the time fixed for the meeting, or if the appointed Chairman is unable or unwilling to take the chair, the Directors present shall choose one of their number to be the chairman of such meeting. The office of Chairman shall not entitle such Director to a second or casting vote.
50. | Validity of Acts Despite Defects |
Subject to the provisions of the Companies Law, all acts done bona fide at any meeting of the Board of Directors, or of a Committee of the Board of Directors, or by any Person acting as Director, shall, notwithstanding that it may afterwards be discovered that there was some defect in the appointment of the participants in such meetings or any of them or any person(s) acting as aforesaid, or that the persons were disqualified, be as valid as if there were no such defect or disqualification.
MINUTES
51. | Minutes |
51.1. | Minutes of each General Meeting and of each meeting of the Board of Directors (or any committee thereof) shall be recorded and duly entered in books provided for that purpose. Such minutes shall, in all events, set forth the names of the persons present at the meeting and all resolutions adopted thereat. |
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51.2. | Any minutes as aforesaid, if purporting to be signed by the chairman of the meeting or by the chairman of the next succeeding meeting, shall constitute prima facie evidence of the matters recorded therein. |
CHIEF EXECUTIVE OFFICER
52. | Chief Executive Officer |
52.1. | The Board of Directors may from time to time appoint, remove and replace a person as Chief Executive Officer of the Company, and may confer upon such appointed person, and from time to time modify or revoke, such title (including General Manager, Director General or any similar or dissimilar title). The appointment of the Chief Executive Officer may be either for a fixed term or without any limitation of time. The Board of Directors may from time to time remove or dismiss the Chief Executive Officer from office and appoint another or others in the Chief Executive Officer’s place. |
52.2. | The Chief Executive Officer shall manage the business of the Company, subject to the policies established by the Board of Directors, such limitations and restrictions as are set forth in these Articles or as the Board of Directors may from time to time prescribe, and the provisions of the Companies Law. |
52.3. | The Board of Directors (and, so long as required by applicable law, the Compensation Committee and the Shareholders unless exempted from Shareholder approval) may from time to time determine the Chief Executive Officer’s salary and other terms and conditions of the Chief Executive Officer’s employment, subject to the provisions of the Companies Law. Subject to the provisions of the Companies Law, all Company employees shall be subordinate, directly or indirectly, to the Chief Executive Officer of the Company. The Chief Executive Officer of the Company shall have the right remove any Company employee from his position and/or terminate the employment of any such employee with the Company and, subject to the provisions of the Companies Law, may delegate such powers to other employees of the Company. |
EXEMPTION FROM LIABILITY, INDEMNIFICATION AND INSURANCE
53. | Subject to the provisions of the Companies Law, the Company may indemnify its Office Holders to the fullest extent permitted by applicable law, in respect of any liability or expense imposed on the Office Holder or incurred by him in respect of any act or omission or alleged act or omission (each, an “Action”) performed by him in his capacity as an Office Holder, with respect to any of the following: |
53.1. | A financial liability imposed on him/her in favor of another person in any judgment, including any settlement confirmed as judgment and an arbitrator’s award which has been confirmed by the court; |
53.2. | Reasonable litigation expenses, including without limitation attorney’s fees, incurred by an Office Holder due to an investigation or proceeding conducted against him by an authority authorized to conduct such investigation or proceeding, and which is Concluded Without The Filing Of An Indictment (as defined in the Companies Law) against the Office Holder, and without a Financial Obligation In Lieu of Criminal Proceedings (as defined in the Companies Law), or which Concluded Without The Filing Of An Indictment against the Office Holder but with a Financial Obligation In Lieu of Criminal Proceedings for an offense which does not require a proof of criminal intent or in connection with a financial sanction; |
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53.3. | Reasonable litigation expenses, including legal fees, incurred by an Office Holder, or which the Office Holder is obligated to pay under a court order, in a proceeding brought against the Office Holder by the Company, or on its behalf, or by another person, or in any criminal proceeding in which the Office Holder is acquitted, or in any criminal proceeding in which the Office Holder was convicted of an offense that does not require proof of criminal intent; and |
53.4. | A financial obligation imposed upon an Office Holder for a payment which the Office Holder is obligated to make to an injured party as set forth in Section 52(54)(a)(1)(a) of the Securities Law, and expenses that the Office Holder incurred in connection with an Administrative Proceeding, including reasonable legal expenses, which term includes attorney fees. |
53.5. | Any other obligation or expense in respect of which it is permitted or will be permitted under applicable law to indemnify an Office Holder. |
In these Articles, “Administrative Proceeding” shall mean a proceeding pursuant to Chapter H’3 (Imposition of Financial Sanctions by the Securities Authority), H’4 (Imposition of Administrative Enforcement Measures by the Administrative Enforcement Committee) or I’1 (Arrangement to Prevent the Initiation of Proceedings or to Conclude Proceedings, Subject to Conditions) of the Securities Law.
54. | Subject to the provisions of the Companies Law, the Company may undertake to indemnify an Office Holder as aforesaid: (i) prospectively, provided that for the purpose of Article 53 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, in view of the Company’s current activities at the time and to an amount or criteria set by the Board as reasonable under the circumstances, and (ii) retroactively. |
55. | Subject to the provisions of any Law and to the fullest extent permitted under the Legal Requirements, the Company may procure, for the benefit of any of its Office Holders, Office Holders’ liability insurance with respect to any of the following: |
55.1. | A breach of the duty of care owed to the Company or any other person; |
55.2. | A breach of the duty of loyalty to the Company, provided that the Office Holder acted in good faith and had reasonable grounds to assume that the action would not injure the Company; or |
55.3. | A financial liability imposed on an Office Holder in favor of a third party, in respect of an act performed by the Office Holder by virtue of the Office Holder being an Office Holder of the Company; or |
55.4. | A financial obligation imposed upon an Office Holder for a payment which the Office Holder is obligated to make to an injured party as set forth in Section 52(54)(a)(1)(a) of the Securities Law and expenses that the Office Holder incurred in connection with an Administrative Proceeding, including reasonable legal expenses, which term includes attorney fees. |
55.5. | Any other matter in respect of which it is permitted or will be permitted under applicable law to insure the liability of an Office Holder in the Company. |
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56. | Subject to the provisions of any Law, the Company may exempt, in advance, by a Board resolution, Office Holders from all or part of their responsibilities for damages due to their violation or future violation of their duty of care to the Company. Notwithstanding the foregoing, the Company may not release an Office Holder from his or her duty of care in connection with a Prohibited Distribution (as such term is defined in the Companies Law). |
57. | In accordance with the provisions of Section 263 of the Companies Law, Articles 53 through 56 shall not apply under any of the following circumstances: |
57.1. | A breach of an Office Holder’s duty of loyalty, except as specified in Article 55.2; |
57.2. | A reckless or intentional violation of an Office Holder’s duty of care excluding negligence; |
57.3. | An intentional action or omission intended to reap a personal gain illegally; |
57.4. | A fine or forfeit levied on an Office Holder. |
58. | Any amendment to the Legal Requirements adversely affecting the right of any Office Holder to be indemnified or insured pursuant to Articles 53 and 55 above 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 the Legal Requirements. |
RIGHTS OF SIGNATURE AND STAMP
59. | Rights of Signature and Stamp |
59.1. | The Board of Directors shall be entitled to authorize any Person (who need not be Director) to act and sign on behalf of the Company, and the acts and signature of such Person on behalf of the Company, together with the Company’s stamp or next to the Company’s name in print or handwriting, shall bind the Company insofar as such Person acted and signed within the scope of such Person’s authority. |
59.2. | The Company shall have at least one official stamp. |
DIVIDENDS
60. | Declaration of Dividends |
The Board of Directors may from time to time declare, and cause the Company to pay, such interim or final dividend as may appear to the Board of Directors to be justified by the profits of the Company and as permitted by the applicable law. The Board of Directors shall determine the time for payment of such dividends, both interim and final, and the record date for determining the shareholders entitled thereto.
61. | Payment in Specie |
Upon the resolution of the Board of Directors, a dividend may be paid, wholly or partly, by the distribution of specific assets of the Company or by distribution of paid up shares, debentures or debenture stock of the Company or of any other companies, or in any one or more of such ways.
62. | Implementation of Powers under Articles 60 and 61 |
For the purpose of giving full effect to any resolution under Articles 60 or 61, the Board of Directors may settle any difficulty which may arise in regard to the distribution as it deems expedient, and, in particular, may determine the value for distribution of any specific assets, and may determine that cash payments shall be made to any shareholders, or that fractions of less value than the nominal value of one share may be disregarded in order to adjust the rights of all parties, and may vest any such cash, shares, debentures, debenture stock or specific assets in trustees upon such trusts for the persons entitled to the dividend or capitalized fund as may seem expedient to the Board of Directors.
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63. | Deductions from Dividends |
The Board of Directors may deduct from any dividend or other moneys payable to any shareholder in respect of a share any and all sums of money then payable by such shareholder to the Company on account of calls or otherwise in respect of such share.
64. | Retention of Dividends |
64.1. | The Board of Directors may retain any dividend or other moneys payable or property distributable in respect of a share on which the Company has a lien, and may apply the same in or toward satisfaction of the debts, liabilities, or engagements in respect of which the lien exists. |
64.2. | The Board of Directors may retain any dividend or other moneys payable or property distributable in respect of a share in respect of which any Person is, under Article 19 or 20, entitled to become a shareholder, until such person shall become a shareholder in respect of such share. |
65. | Unclaimed Dividends |
All unclaimed dividends or other moneys payable in respect of a share may be invested or otherwise made use of by the Board of Directors for the benefit of the Company until claimed. The payment by the Directors of any unclaimed dividend or such other moneys into a separate account shall not constitute the Company a trustee in respect thereof, and any dividend unclaimed after a period of three (3) years from the date of declaration of such dividend, and any such other moneys unclaimed after a like period from the date the same were payable, shall be forfeited and shall revert to the Company; provided, however, that the Board of Directors may, at its discretion, cause the Company to pay any such dividend or such other moneys, or any part thereof, to a Person who would have been entitled thereto had the same not reverted to the Company.
66. | Mechanics of Payment |
Any dividend or other moneys payable in cash in respect of a share may be paid by check sent through the post to, or left at, the registered address of the Person entitled thereto or by transfer to a bank account specified by such Person (or, if two or more Persons are registered as joint holders of such share or are entitled jointly thereto in consequence of the death or bankruptcy of the holder or otherwise, to any one of such Persons or to such Person’s bank account), or to such Person and at such address as the Person entitled thereto may by writing direct. Every such check shall be made payable to the order of the Person to whom it is sent, or to such Person as the Person entitled thereto as aforesaid may direct, and payment of the check by the banker upon whom it is drawn shall be a good discharge to the Company. Every such check shall be sent at the risk of the Person entitled to the money represented thereby. No unpaid dividend or interest shall bear interest as against the Company.
67. | Receipt from a Joint Holder |
If two or more Persons are registered as joint holders of any share, or are entitled jointly thereto in consequence of the death or bankruptcy of the holder or otherwise, any one of such Persons may give effectual receipts for any dividend or other moneys payable or property distributable in respect of such share.
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Mergers
68. | A merger of the Company requires approval by the Board of Directors and by a simple majority vote at the General Meeting, except as otherwise required by the provisions of the Companies Law. |
ACCOUNTS
69. | Books of Account |
The Board of Directors shall cause accurate books of account to be kept in accordance with the provisions of the Companies Law and of any other applicable law. Such books of account shall be kept at the registered office of the Company, or at such other place or places as the Board of Directors may deem appropriate, and they shall always be open to inspection by all Directors. No shareholder, not being a Director, shall have any right to inspect any account or book or other similar document of the Company, except as otherwise provided by agreement with the Company, or as conferred by applicable law, or as authorized by the Board of Directors.
70. | Fiscal Year |
The Company’s fiscal year shall commence on January 1st and end on the following December 31st.
71. | Audit |
71.1. | As soon as practicable after the end of each fiscal year of the Company, the Company shall prepare a consolidated balance sheet of the Company, as at the end of such fiscal year, and a consolidated statement of income and a consolidated statement of cash flows of the Company, for such year, all prepared in accordance with generally accepted accounting principles consistently applied (the “Annual Financial Statements”). The Annual Financial Statements shall be audited for correctness by the Company’s auditor, which shall be by a firm of Independent Certified Public Accountants (the “Auditor”). |
71.2. | From the date of the provision to the shareholders of a notice of an Annual General Meeting, and until the Annual General Meeting, the Company shall maintain at its principal office a copy of the Annual Financial Statements and shall make the Annual Financial Statements available to any shareholder who requests access to or a copy of the Annual Financial Statements, in accordance with the Companies Law. |
72. | Auditors |
72.1. | The shareholders of the Company shall appoint the Auditor of the Company at the Annual General Meeting. Such appointment shall be in force until the end of the fiscal year for which the appointment is made, or for a longer period if so resolved at the Annual General Meeting, but in no event for a period of more than three (3) fiscal years. Subject to the provisions of the Companies Law, the shareholders of the Company may remove the Auditor at any time. |
72.2. | The appointment, authorities, rights and duties of the Auditor of the Company shall be regulated by applicable law. |
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72.3. | The Board of Directors shall determine the remuneration of the Auditor and report to the Shareholders on such remuneration at the Annual General Meeting. |
73. | Internal Auditor |
73.1. | The internal auditor of the Company shall be appointed in accordance with the rules and regulations of the Companies Law, and shall report to the Chairman or as otherwise determined by the Board of Directors. Notwithstanding the forgoing, in even that that the Chairman is an executive officer of the Company, the internal auditor shall report to the chairman of the Company’s Audit Committee. |
73.2. | The internal auditor shall file with the Audit Committee (unless decided otherwise by the Board of Directors) a proposal for an annual or other periodic work plan, which shall be approved by the Audit Committee (unless decided otherwise by the Board of Directors). |
NOTICES
74. | Subject to applicable law, a notice or any other document which the Company shall deliver and which it is entitled or required to give pursuant to the provisions of these Articles and/or the applicable law shall be delivered by the Company to any Person, in any one of the following manners as the Company may choose: in person, by mail, transmission by fax or in electronic form (including through the Internet). Notwithstanding anything to the contrary contained herein and subject to the requirements of applicable law, a notice to a Shareholder may alternatively be served, as general notice to all Shareholders, in accordance with the Legal Requirements. |
Any notice or other document which shall be sent only by mail shall be deemed to have reached its destination forty eight hours (48) after the day of mailing if sent by registered mail or regular mail, or when actually received by the addressee if sooner than forty-eight (48) hours, as the case may be, after it has been mailed, or when actually tendered in person to such shareholder (or to the Secretary of the Company, as the case may be) or on the first day after transmission if transmitted by fax or in electronic form.
Should it be required to prove delivery, it shall be sufficient to prove that the notice or document sent contains the correct mailing, e-mail, or fax details as registered in the Share Register or any other address which the Shareholder submitted in writing to the Company as the address and/or fax and/or e-mail details for the submission of notices or other documents.
Subject to the Legal Requirements, the Company shall not be required to send notices to any shareholder who is not registered in the Register or has not provided the Company with accurate and sufficient information to enable notices to be sent as set forth above.
75. | All notices to be given to the shareholders shall, with respect to any share to which Persons are jointly entitled, be given to whichever of such Persons is named first in the Share Register, and any notice so given shall be sufficient notice to the holders of such share. |
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76. | Any notice or other document served upon or sent to any shareholder in accordance with these Articles shall, notwithstanding that he be then deceased or bankrupt, and whether or not the Company has notice of his death or bankruptcy, be deemed to be duly served or sent in respect of any shares held by him (either alone or jointly with others) until some other person is registered in his stead as the holder or joint holder of such shares, and such service or sending shall be a sufficient service on or sending to his heirs, executors, administrators or assigns and all other persons (if any) interested in such share. |
77. | Any shareholder whose address is not described in the Share 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. |
78. | Where a given number of days’ notice, or notice extending over any period, is required to be given, the day the notice was sent shall be excluded and the scheduled day of the meeting or the last date of the period shall be included in the count. |
79. | Any notice served, in accordance with the provisions of sub-articles 74-78, on a trustee, registered as such in accordance with the provisions of Article 11, shall constitute a sufficient notice to the beneficiaries of such trustee. |
Securities Act of 1933 Forum Selection
80. | Unless the Company consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933. Any person or entity purchasing or otherwise acquiring any interest in any security of the Company shall be deemed to have notice of and consented to this provision. |
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Exhibit 5.1
August 14, 2020
Nano-X Imaging Ltd.
The Communication Center,
Neve Ilan, Israel
Re: Nano-X Imaging Ltd.
Ladies and Gentlemen:
We have acted as Israeli counsel for Nano-X Imaging Ltd., an Israeli company (the “Company”), in connection with the underwritten initial public offering by the Company, contemplating (i) the issuance and sale by the Company of an aggregate of 5,882,353 Ordinary Shares, par value NIS 0.01 (“Ordinary Shares”) of the Company (the “Offering Shares”) and (ii) the potential issuance and sale by the Company of up to an additional 882,353 Ordinary Shares (the “Additional Shares” and, collectively with the Offering Shares, the “Shares”), that are subject to an option to purchase additional shares proposed to be granted by the Company to the underwriters of the offering (the “Offering”).
This opinion letter is rendered pursuant to Item 8(a) of Form F-1 promulgated by the United States Securities and Exchange Commission (the “SEC”) and Items 601(b)(5) and (b)(23) of the SEC’s Regulation S-K promulgated under the United States Securities Act of 1933, as amended (the “Securities Act”).
In connection herewith, we have examined the originals, or photocopies or copies, certified or otherwise identified to our satisfaction, of: (i) the form of the registration statement on Form F-1 (File No. 333-240209) filed by the Company with the SEC under the Securities Act (as amended through the date hereof, the “Registration Statement”) and to which this opinion is attached as an exhibit; (ii) a copy of the articles of association of the Company, as currently in effect; (iii) a draft of the amended articles of association of the Company, to be in effect immediately prior to the closing of the Offering (the “Amended Articles”); (iv) resolutions of the board of directors (the “Board”) of the Company and its shareholders which have heretofore been approved and, in each case, which relate to the Registration Statement and other actions to be taken in connection with the Offering (the “Resolutions”); and (v) such other corporate records, agreements, documents and other instruments, and such certificates or comparable documents of public officials and of officers of the Company as we have deemed relevant and necessary as a basis for the opinions hereafter set forth. We have also made inquiries of such officers as we have deemed relevant and necessary as a basis for the opinions hereafter set forth.
In such examination, we have assumed the genuineness of all signatures, the legal capacity of all natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified, confirmed as photostatic copies and the authenticity of the originals of such latter documents. As to all questions of fact material to these opinions that have not been independently established, we have relied upon certificates or comparable documents of officers and representatives of the Company.
Members of our firm are admitted to the Bar in the State of Israel, and we do not express any opinion as to the laws of any other jurisdiction. This opinion is limited to the matters stated herein and no opinion is implied or may be inferred beyond the matters expressly stated.
We consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to our firm appearing under the caption “Legal Matters” and “Enforceability of Civil Liabilities” in the prospectus forming part of the Registration Statement. In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act, the rules and regulations of the SEC promulgated thereunder or Item 509 of the SEC’s Regulation S-K promulgated under the Securities Act.
This opinion letter is rendered as of the date hereof and we disclaim any obligation to advise you of facts, circumstances, events or developments that may be brought to our attention after the effective date of the Registration Statement that may alter, affect or modify the opinions expressed herein.
Very truly yours, | |
/s/ Amit, Pollak, Matalon & Co. | |
Amit, Pollak, Matalon & Co. |
Exhibit 10.2
REGISTRATION RIGHTS AGREEMENT
by and among
NANO-X IMAGING LTD
and
THE SHAREHOLDERS NAMED HEREIN
Dated as of _______ [ ], 2020
REGISTRATION RIGHTS AGREEMENT, dated as of _______ [ ], 2020, by and among NANO-X IMAGING LTD, an Israeli company (the “Company”), and the investors listed on the signature pages of this Agreement (each a “Shareholder” and, collectively, the “Shareholders”).
WHEREAS, the Shareholders have purchased ordinary shares of Nanox Imaging PLC., a company incorporated and registered in Gibraltar (“Nanox Gibraltar”);
WHEREAS, in connection with the purchase by the Company of the assets of Nanox Gibraltar pursuant to the Asset Purchase Agreement, dated as of September 3, 2019 and as amended on December 3, 2019, by and between the Company and Nanox Gibraltar, the Shareholders became holders of the Company’s ordinary shares, par value NIS0.01 per share (the “Ordinary Shares”);
WHEREAS, the parties hereto desire that the Company provides the Shareholders with registration rights with respect to the Registrable Securities (as defined below), as set forth in this Agreement.
NOW THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained and other good and valid consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement hereby agree as follows:
1. | Certain Definitions. |
As used in this Agreement, the following terms shall have the following meanings:
“Affiliate” of any Person means any other Person which directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person. The term “control” (including the terms “controlling,” “controlled by” and “under common control with”) as used with respect to any Person means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.
“Agreement” means this Registration Rights Agreement, including all amendments, modifications and supplements and any exhibits or schedules to any of the foregoing, and shall refer to this Registration Rights Agreement as the same may be in effect at the time such reference becomes operative.
“Company” has the meaning set forth in the introductory paragraph.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Governmental Entity” means any national, federal, state, municipal, local, territorial, foreign or other government or any department, commission, board, bureau, agency, regulatory authority or instrumentality thereof, or any court, judicial, administrative or arbitral body or public or private tribunal.
“Holder” means each Shareholder, so long as such Person holds any Registrable Securities, and any Permitted Transferee, so long as such Person holds any Registrable Securities. For purposes of this Agreement, the Company may deem and treat the registered holder of Registrable Securities as the Holder and absolute owner thereof, and the Company shall not be affected by any notice to the contrary.
“Initial Public Offering” means the first underwritten public offering of the Ordinary Shares to the general public through a registration statement filed with the SEC.
“Permitted Transferee” shall mean, with respect to a Shareholder, (i) any other Shareholder, and (ii) such Shareholder’s Affiliates.
“Person” means any individual, sole proprietorship, partnership, limited liability company, joint venture, trust, incorporated organization, association, corporation, institution, public benefit corporation, Governmental Entity or any other entity.
“Piggyback Registration” means any registration of the Company’s Ordinary Shares under the Securities Act (other than a registration statement on Form S-8 or on Form S-4 or any similar successor forms thereto) that is effected at any time following consummation of an Initial Public Offering, whether such registration is effected for the Company’s own account or for the account of one or more shareholders of the Company, and the registration form to be used may be used for any registration of Registrable Securities.
“Prospectus” means the prospectus or prospectuses forming a part of, or deemed to form a part of, or included in, or deemed included in, any Registration Statement, as amended or supplemented by any prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and by all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by reference in such prospectus or prospectuses.
“Registrable Securities” shall mean all Ordinary Shares currently held or hereafter acquired by a Shareholder or any securities issued or issuable with respect to such Ordinary Shares because of share splits, share dividends, reclassifications, recapitalizations, mergers, consolidations or similar events. As to any particular Registrable Security, once issued such securities shall cease to be Registrable Securities when (i) they are sold pursuant to an effective Registration Statement under the Securities Act, (ii) they are sold pursuant to Rule 144, (iii) they shall have ceased to be outstanding, (iv) they have been sold in a private transaction in which the transferor’s rights under this Agreement are not assigned to the transferee of the securities, or (v) they are eligible to be sold by such Shareholder without regard to the public information requirements under Rule 144.
“Registration Expenses” has the meaning set forth in Section 4 hereof.
“Registration Statement” means any registration statement of the Company which covers any of the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all materials incorporated by reference in such Registration Statement.
“Rule 144” shall mean Rule 144 under the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC.
“SEC” means the Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended.
“Suspension Notice” has the meaning set forth in Section 3(d) hereof.
“underwritten registration” or “underwritten offering” means a registration in which securities of the Company are sold to one or more underwriters (as defined in Section 2(a)(11) of the Securities Act) for resale to the public.
2. | Piggyback Registrations. |
(a) Right to Piggyback. Whenever the Company proposes to effect a Piggyback Registration, the Company shall give prompt written notice to all Holders of its intention to effect such a registration and, subject to Sections 2(b) and 2(c), shall include in such registration on the same terms as the Company and other Persons selling securities in connection with such registration all Registrable Securities with respect to which the Company has received written requests for inclusion therein within 10 days after the receipt of the Company’s notice. To the extent the Company has not received any such written request for inclusion within such 10-day period, the Holders shall have no further rights to include any Registrable Securities in such Piggyback Registration. The Company’s notice shall specify, at a minimum, the number of Ordinary Shares proposed to be registered, the proposed date of filing of such registration statement with the SEC, the proposed means of distribution, the proposed managing underwriter or underwriters (if any and if known) and a good faith estimate by the Company of the proposed minimum offering price of the Ordinary Shares offered by the Company. The Company may postpone or withdraw the filing or the effectiveness of a Piggyback Registration initiated by the Company at any time in its sole discretion; provided that such postponement or withdrawal does not relieve the Company of its obligations to pay registration expenses pursuant to Section 4. Each Holder shall be permitted to withdraw all or part of such Holder’s Registrable Securities from a Piggyback Registration at any time prior to the effectiveness of such registration.
(b) Priority on Primary Registrations. If a Piggyback Registration is an underwritten primary registration on behalf of the Company, and the managing underwriters advise the Company in writing that in their opinion the number of securities requested to be included in such registration exceeds the number which can be sold in any potential offering and/or that the number of Registrable Securities proposed to be included in any such registration would adversely affect the price per share of the Company’s equity securities to be sold in any potential offering, the Company shall include in such registration (i) first, the securities the Company proposes to sell, (ii) second, the Registrable Securities requested to be included in such registration by Holders that are not Affiliates of the Company, pro rata among such Holders on the basis of the number of securities requested to be registered by such Holders, and (iii) third, the Registrable Securities requested to be included in such registration by Holders that are Affiliates of the Company, pro rata among such Holders on the basis of the number of securities requested to be registered by such Holders.
(c) Priority on Secondary Registrations. If a Piggyback Registration is an underwritten secondary registration on behalf of a holder of the Company’s securities, and the managing underwriters advise the Company in writing that in their opinion the number of securities requested to be included in such registration exceeds the number which can be sold in any potential offering and/or that the number of Registrable Securities proposed to be included in any such registration would adversely affect the price per share of the Company’s equity securities to be sold in any potential offering, the Company shall include in such registration (i) first, the securities requested to be included in such registration by the holders requesting such registration, (ii) second, the Registrable Securities requested to be included in such registration by Holders that are not Affiliates of the Company, pro rata among such Holders on the basis of the number of securities requested to be registered by such Holders, and (iii) third, the Registrable Securities requested to be included in such registration by Holders that are Affiliates of the Company, pro rata among such Holders on the basis of the number of securities requested to be registered by such Holders.
(d) Selection of Underwriters. If any Piggyback Registration is an underwritten primary offering on behalf of the Company, the Company shall have the right to select the managing underwriter or underwriters to administer any such offering.
3. | Registration Procedures. (a) Subject to the penultimate sentence of Section 2(a) (in the case of a Piggyback Registration), whenever any Registrable Security is to be registered pursuant to this Agreement, the Company shall use commercially reasonable efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended methods of disposition thereof, and pursuant thereto the Company shall as expeditiously as possible: |
(i) prepare and file with the SEC a Registration Statement with respect to such Registrable Securities and use commercially reasonable efforts to cause such Registration Statement to become effective as soon as practicable thereafter; and before filing a Registration Statement or Prospectus or any amendments or supplements thereto, furnish to the Holders of Registrable Securities covered by such Registration Statement copies of all such documents proposed to be filed and, if requested by such Holders, the documents incorporated by reference in the Prospectus and the exhibits incorporated by reference in such documents; and the Company will give one counsel selected by Holders representing a majority of Registrable Securities covered by such Registration Statement the opportunity to participate in the preparation of such Registration Statement, each Prospectus included therein or filed with the SEC, and each amendment thereof or supplement thereto; and the Holders shall have the opportunity to object to any information pertaining to such Holders that is contained therein and the Company will make the corrections reasonably requested by such Holders with respect to such information prior to filing any Registration Statement or amendment thereto or any Prospectus or any supplement thereto;
(ii) prepare and file with the SEC such amendments and supplements to such Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such Registration Statement effective for such a period as is necessary to complete the distribution of the securities covered by such Registration Statement and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement during such period in accordance with the intended methods of disposition set forth in such Registration Statement;
(iii) furnish to each Holder of Registrable Securities covered by such Registration Statement such number of copies of such Registration Statement, and each amendment and supplement thereto, the Prospectus included in such Registration Statement (including each preliminary Prospectus) or filed under Rule 424 under the Securities Act and such other documents as such Holder may reasonably request in order to facilitate the disposition of such Registrable Securities;
(iv) use commercially reasonable efforts to register or qualify such Registrable Securities under such other securities or blue sky laws of such jurisdictions as any such Holder and any underwriter(s) reasonably requests and do any and all other acts and things which may be reasonably necessary or advisable to enable such Holder and any underwriter(s) to consummate the disposition in such jurisdictions of the Registrable Securities owned by such Holder (provided, that the Company will not be required to (A) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this subparagraph (iv), (B) subject itself to taxation in any such jurisdiction, or (C) consent to general service of process in any such jurisdiction);
(v) notify each Holder of Registrable Securities covered by such Registration Statement at any time when a Prospectus relating thereto is required to be delivered under the Securities Act, of the occurrence of any event as a result of which the Prospectus included in such Registration Statement contains an untrue statement of a material fact or omits any fact necessary to make the statements therein not misleading, and, at the request of any such Holder, the Company shall prepare a supplement or amendment to such Prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such Prospectus shall not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading;
(vi) in the case of an underwritten offering, enter into customary agreements (including underwriting agreements in customary form) and take such other actions as deemed advisable by the underwriter(s) in order to expedite or facilitate the disposition of such Registrable Securities (including, without limitation, effecting a share split or a combination of shares and making members of senior management of the Company reasonably available to participate in, and cause them to cooperate with the underwriters in connection with, “road-show” and other customary marketing activities (including one-on-one meetings with prospective purchasers of the Registrable Securities)) and use commercially reasonable efforts to cause to be delivered to the underwriters opinions of counsel to the Company in customary form, covering such matters as are customarily covered by opinions for an underwritten public offering as the underwriters may request and addressed to the underwriters;
(vii) make available, for inspection by any Holder of Registrable Securities covered by such Registration Statement, any underwriter participating in any disposition pursuant to such Registration Statement, and any attorney, accountant or other agent retained by any such Holder or underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company’s officers, directors, employees and independent accountants to supply all information reasonably requested by any such Holder, underwriter, attorney, accountant or agent in connection with such Registration Statement;
(viii) use commercially reasonable efforts to cause all such Registrable Securities to be listed on each securities exchange or quotation system on which securities of the same class issued by the Company are then listed, or if no such similar securities are then listed, on a national securities exchange or quotation system selected by the Company;
(ix) provide a transfer agent and registrar for all such Registrable Securities not later than the effective date of such Registration Statement;
(x) if requested, cause to be delivered, immediately prior to the effectiveness of the Registration Statement (and, in the case of an underwritten offering, at the time of delivery of any Registrable Securities sold pursuant thereto), letters from the Company’s independent certified public accountants addressed to each underwriter, if any, stating that such accountants are independent public accountants within the meaning of the Securities Act and the applicable rules and regulations adopted by the SEC thereunder, and otherwise in customary form and covering such financial and accounting matters as are customarily covered by letters of the independent certified public accountants delivered in connection with primary or secondary underwritten public offerings, as the case may be;
(xi) make generally available to its shareholders a consolidated earnings statement (which need not be audited) for at least the 12 months beginning after the effective date of a Registration Statement as soon as reasonably practicable after the end of such period, which earnings statement shall satisfy the requirements of an earnings statement under Section 11(a) of the Securities Act;
(xii) promptly notify each Holder of Registrable Securities covered by such Registration Statement and the underwriter(s), if any:
(1) when the Registration Statement, any pre-effective amendment, the Prospectus or any Prospectus supplement or post-effective amendment to the Registration Statement has been filed and, with respect to the Registration Statement or any post-effective amendment, when the same has become effective;
(2) of any written request by the SEC for amendments or supplements to the Registration Statement or Prospectus or of any inquiry by the SEC relating to the Registration Statement, with a copy of the same, and an oral or written summary of any such oral requests;
(3) of the notification to the Company by the SEC of its initiation or threat of any proceeding with respect to the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement; and
(4) of the receipt by the Company of any notification or threat with respect to the suspension of the qualification of any Registrable Securities for sale under the applicable securities or blue sky laws of any jurisdiction;
(xiii) use commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of the Registration Statement at the earliest possible moment; and
(xiv) provide a CUSIP number for the Ordinary Shares and take such other customary actions as shall be reasonably requested by Holders holding a majority of the Registrable Securities to be sold or the underwriters in order to expedite or facilitate the disposition of such Registrable Securities.
(b) The Company will promptly respond to any and all comments received from the SEC, with a view towards causing each Registration Statement or any amendment thereto to be declared effective by the SEC as soon as practicable and shall file an acceleration request as soon as practicable following the resolution or clearance of all SEC comments or, if applicable, following notification by the SEC that any such Registration Statement or any amendment thereto will not be subject to review.
(c) The Company may require each Holder of Registrable Securities covered by such Registration Statement being effected to furnish to the Company any other information regarding such Holder and the distribution of such securities as the Company may from time to time reasonably request in writing in order to comply with applicable securities laws.
(d) Each Holder of Registrable Securities agrees by having its securities treated as Registrable Securities hereunder that, upon written notice from the Company, after consultation with outside counsel, of the happening of any event as a result of which the Prospectus included in such Registration Statement contains an untrue statement of a material fact or omits any material fact necessary to make the statements therein not misleading (a “Suspension Notice”), such Holder will forthwith discontinue disposition of Registrable Securities until such Holder is advised in writing by the Company that the use of the Prospectus may be resumed and is furnished with a supplemented or amended Prospectus as required by Section 3(a)(iii) hereof, and, if so directed by the Company, such Holder will deliver to the Company (at the Company’s expense) all copies, other than permanent file copies then in such Holder’s possession, of the Prospectus covering such Registrable Securities current at the time of receipt of such notice; provided, however, that the Company shall promptly use commercially reasonable efforts to file a post-effective amendment or take such other action to as to obviate the need for a Suspension Notice as soon as reasonably practicable in the good faith judgment of the Company and promptly after filing such amendment (and in any event within two business days of such filing) deliver sufficient copies of such supplemented or amended Prospectuses pursuant to Section 3(a)(iii) to such Holders to resume such disposition; and provided further that such postponement of sales of Registrable Securities by the Holders shall not exceed 90 days in the aggregate in any one year. Each Holder shall be entitled to reimbursement from the Company for any out-of-pocket losses actually incurred in the event, and only to the extent, that such Holder suffers such losses as a result of such Holder’s inability to make delivery of sold securities due to the Company’s delivery of a Suspension Notice. Each Holder of Registrable Securities further agrees by having its securities treated as Registrable Securities hereunder that it shall maintain in confidence and not disclose the receipt of any Suspension Notice.
4. | Registration Expenses |
(a) All expenses incident to the Company’s performance of or compliance with this Agreement, including, without limitation, all registration and filing fees, fees and expenses of compliance with securities or blue sky laws, listing application fees, printing expenses, transfer agent’s and registrar’s fees, cost of distributing Prospectuses in preliminary and final form as well as any supplements thereto, and fees and disbursements of counsel for the Company and all independent certified public accountants and other Persons retained by the Company (all such expenses being herein called “Registration Expenses”) (but not including any underwriting discounts or commissions attributable to the sale of Registrable Securities or fees and expenses of more than one counsel representing the Holders of Registrable Securities (as set forth in Section 4(b)), shall be borne by the Company. In addition, the Company shall pay its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit or quarterly review, the expense of any liability insurance and the expenses and fees for listing the securities to be registered on each securities exchange on which they are to be listed.
(b) In connection with each registration initiated hereunder, the Company shall reimburse the Holders covered by such registration or sale for the reasonable fees and disbursements of one law firm chosen by Holders representing a majority of the number of Registrable Securities included in such registration or sale.
(c) The obligation of the Company to bear the expenses described in Section 4(a) and to reimburse the Holders for the expenses described in Section 4(b) shall apply irrespective of whether any sales of Registrable Securities ultimately take place.
5. | Indemnification |
(a) The Company shall indemnify, to the fullest extent permitted by law, each Holder, its officers, directors, employees and Affiliates and each Person who controls such Holder (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and expenses (including but not limited to reasonable legal fees and expenses) arising out of or based upon any untrue statement or alleged untrue statement of material fact contained in any Registration Statement, Prospectus, preliminary Prospectus or any “issuer free writing prospectus” (as defined in Rule 433 under the Securities Act) or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or supplement to a Prospectus, in light of the circumstances under which they were made) not misleading or any violation or alleged violation by the Company of the Securities Act, the Exchange Act or applicable “blue sky” laws in connection with the performance of its obligations under this Agreement, except insofar and to the extent (i) as the same are made in reliance and in conformity with information relating to such Holder furnished in writing to the Company by such Holder expressly for use therein, including the proposed method of distribution, (ii) such Holder used a defective or outdated Prospectus after having received a Suspension Notice or (iii) such untrue statement or alleged untrue statement or omission or alleged omission is primarily the result of a breach of this Agreement or a violation of law by such Holder.
(b) In connection with any Registration Statement or Prospectus in which a Holder of Registrable Securities is participating, each such Holder shall furnish to the Company in writing such information and affidavits as the Company reasonably requests for use in connection with any such Registration Statement or Prospectus and shall indemnify, to the fullest extent permitted by law, the Company, its officers, employees, directors, Affiliates, and each Person who controls the Company (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and expenses (including but not limited to reasonable legal fees and expenses) arising out of or based upon (i) any untrue statement or alleged untrue statement of material fact contained in any Registration Statement, Prospectus or preliminary Prospectus or any “issuer free writing prospectus” or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or supplement to a Prospectus, in light of the circumstances under which they were made) not misleading, but only to the extent that the same are made in reliance and in conformity with information relating to such Holder furnished in writing to the Company by such Holder expressly for use therein, (ii) such Holder using a defective or outdated Prospectus after having received a Suspension Notice or (iii) any untrue statement or alleged untrue statement or omission or alleged omission that is primarily the result of a breach of this Agreement or a violation of law by such Holder; provided, however, that the obligation to indemnify shall be several, not joint and several, among such Holders and the liability of each such Holder shall be in proportion to and limited to the net amount received (after all underwriting discounts and commissions) by such Holder from the sale of Registrable Securities pursuant to such Registration Statement or Prospectus.
(c) Any Person entitled to indemnification hereunder shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) unless the counsel to the indemnified party advises such indemnifying party in writing that such claim involves a conflict of interest (other than one of a monetary nature) that would reasonably be expected to make it inappropriate for the same counsel to represent both the indemnified party and the indemnifying party, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent will not be unreasonably withheld). The indemnifying party shall not enter into any settlement of the claims so assumed without the consent of the indemnified party (but such consent will not be unreasonably withheld); provided that the consent of the indemnified party will not be required if the settlement involves only the payment of money damages all of which are indemnifiable losses hereunder and does not involve the imposition of any equitable remedy or admission of wrongdoing. An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such assumed claim, unless the counsel to the indemnified party advises such indemnifying party in writing that there may be one or more legal or equitable defenses available to such indemnified party which are in addition to or may conflict with those available to another indemnified party with respect to such claim. Failure to give prompt written notice shall not release the indemnifying party from its obligations hereunder unless and to the extent that the indemnifying party shall have been actually and materially prejudiced by the failure of such indemnified party to so notify such indemnifying party.
(d) The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling Person of such indemnified party and shall survive the transfer of securities.
(e) If the indemnification provided for in or pursuant to this Section 5 is due in accordance with the terms hereof, but is held by a court to be unavailable or unenforceable in respect of any losses, claims, damages, liabilities or expenses referred to herein, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified Person as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions which result in such losses, claims, damages, liabilities or expenses. The relative fault of the indemnifying party on the one hand and of the indemnified Person on the other shall be determined by reference to, among other things, whether the untrue statement or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party, and by such party’s relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. In no event shall the liability of any selling Holder be greater in amount than the amount of net proceeds (after underwriting discounts and commissions) received by such Holder upon such sale or the amount for which such indemnifying party would have been obligated to pay by way of indemnification if the indemnification provided for under Section 5(a) or 5(b) hereof had been available under the circumstances.
6. | Participation in Underwritten Offering |
No Person may participate in any underwritten offering hereunder unless such Person (a) agrees to sell such Person’s securities on the basis provided in any underwriting arrangements approved by the Person or Persons entitled hereunder to approve such arrangements and (b) completes and executes all customary questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements.
7. | Rule 144 |
The Company covenants that if it becomes subject to the reporting requirements of the Exchange Act, (A) it will use commercially reasonable efforts to file in a timely manner the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder, and (B) it will take such further action as any Holder may reasonably request to make available adequate current public information with respect to the Company meeting the current public information requirements of Rule 144(c), to the extent required to enable such Holder to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 or any similar rule or regulation hereafter adopted by the SEC.
8. | Miscellaneous |
(a) Notices. All notices, requests, consents and other communications required or permitted hereunder shall be in writing and shall be hand delivered or mailed postage prepaid by registered or certified mail or by facsimile transmission,
(i) If to the Company:
NANO-X IMAGING LTD
Communications Center
Neve Ilan, Israel 9085000
Attn: Company’s VP of Corporate Development, Tal Shank
Telephone: + 972-52-4688648
Email: tal.s@nanox.vision
(ii) if to any Shareholder, to the address(es) set forth on the counterpart signature pages of this Agreement signed by such Shareholders;
(iii) if to a transferee Holder, to the address of such Holder set forth in the transfer documentation provided to the Company; or, in each case, at such other address as such party each may specify by written notice to the others, and each such notice, request, consent and other communication shall for all purposes of the Agreement be treated as being effective or having been given when delivered personally, upon receipt of facsimile confirmation if transmitted by facsimile, or, if sent by mail, at the earlier of its receipt or 72 hours after the same has been deposited in a regularly maintained receptacle for the deposit of United States mail, addressed and postage prepaid as aforesaid.
(b) No Waivers. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.
(c) Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns, it being understood that subsequent Holders of the Registrable Securities and the indemnified parties under Section 5 are intended third party beneficiaries hereof.
(d) Governing Law. The internal laws, and not the laws of conflicts (other than Section 5-1401 of the General Obligations Law of the State of New York), of New York shall govern the enforceability and validity of this Agreement, the construction of its terms and the interpretation of the rights and duties of the parties.
(e) Jurisdiction. Any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby may be brought in any federal or state court located in the County and State of New York, and each of the parties hereby consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 8(a) shall be deemed effective service of process on such party.
(f) Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
(g) Counterparts; Effectiveness. This Agreement may be executed in any number of counterparts (including by facsimile) and by different parties hereto in separate counterparts, with the same effect as if all parties had signed the same document. All such counterparts shall be deemed an original, shall be construed together and shall constitute one and the same instrument. This Agreement shall become effective when each party hereto shall have received counterparts hereof signed by all of the other parties hereto.
(h) Entire Agreement. This Agreement contains the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes and replaces all other prior agreements, written or oral, among the parties hereto with respect to the subject matter hereof.
(i) Captions. The headings and other captions in this Agreement are for convenience and reference only and shall not be used in interpreting, construing or enforcing any provision of this Agreement.
(j) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.
(k) Amendments. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given without the written consent of the Holders of a majority of the Registrable Securities and the Company; provided, however, that in no event shall the obligations of any Holder of Registrable Securities be materially increased or the rights of any such Holder be adversely affected (without similarly adversely affecting the rights of all such holders), except upon the written consent of such Holder. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders of whose Registrable Securities are being sold pursuant to a Registration Statement and that does not directly or indirectly affect the rights of other Holders of Registrable Securities may be given by Holders of at least a majority of the Registrable Securities being sold by such Holders pursuant to such Registration Statement.
(l) Additional Parties. Notwithstanding anything to the contrary contained herein, the Company may add additional Shareholders to this Agreement at any time and from time to time, so long as such additional Shareholder becomes a party to this Agreement by executing the Joinder Agreement, substantially in the form attached hereto as Exhibit A.
(m) Equitable Relief. The parties hereto agree that legal remedies may
be inadequate to enforce the provisions of this Agreement and that equitable relief, including specific performance and injunctive relief, may be used to enforce the provisions of this Agreement.
IN WITNESS WHEREOF, this Registration Rights Agreement has been duly executed by each of the parties hereto as of the date first written above.
NANO-X IMAGING LTD | |||
By: | |||
Name: | |||
Title: |
Shareholder | |||
By: | |||
Name: | |||
Title: |
Address for notices: | ||
Address: | ||
|
Attn: |
Telephone: |
Email: |
Exhibit A
Joinder Agreement
The undersigned hereby agrees, effective as of the date hereof, to join, become a party to and be bound by the Registration Rights Agreement, dated as of _______ [ ], 2020, by and among the Company and each of the shareholders signatory thereto, as the same may be in effect from time to time (the “Agreement”), and for all purposes of the Agreement, the undersigned shall be included within the term Shareholder (as defined in the Agreement) and be bound by the terms and provisions of the Agreement.
__________________________
Name of Shareholder
By: ___________________________________ .
Name:
Title:
Dated:__________ , _______
Address for notices:
Address: _________________________________________________
Attn: __________________________________
Telephone: _____________________________
Email: _________________________________
Exhibit 10.5
To |
NANO-X IMAGING LTD
(the “Company”)
Indemnification and Exculpation Agreement
(the “Agreement” or the “Indemnification Agreement”)
WHEREAS, the undersigned Office Holder of the Company whose name appears on the signature page attached hereto (the “Indemnitee” or “you”) is an Office Holder (“Nosse Misra”), as such term is defined in the Companies Law, 5759-1999 (the “Companies Law”), of the Company;
WHEREAS, both the Company and Indemnitee recognize the increased risk of litigation and other claims being asserted against Office Holders of companies and that highly competent persons have become more reluctant to serve corporations as directors and officers or in other capacities unless they are provided with adequate protection through exculpation, insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to, and activities on behalf of, companies;
WHEREAS, the Amended and Restated Articles of Association of the Company (the “Articles”) authorize the Company to indemnify and advance expenses to its Office Holders and provide for insurance and exculpation to its Office Holders, in each case, to the fullest extent permitted by applicable law, and this Agreement is provided to Indemnitee in accordance with applicable law, the Articles and all requisite corporate approvals;
WHEREAS, the Company has determined that (i) the increased difficulty in attracting and retaining competent persons is detrimental to the best interests of the Company’s shareholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future, and (ii) it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law, so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified;
WHEREAS, in recognition of Indemnitee’s need for substantial protection against loss arising from the Indemnitee’s liability, including costs and expenses incurred by the Indemnitee due to his or her position as an Office Holder, in order to assure Indemnitee’s continued service to the Company in an effective manner and, in part, in order to provide Indemnitee with specific contractual assurance that indemnification, insurance and exculpation will be available to Indemnitee, the Company wishes to undertake in this Agreement for the exculpation, indemnification of and the advancing of expenses to Indemnitee to the fullest extent permitted by applicable law and as set forth in this Agreement and provide for insurance of Indemnitee as set forth in this Agreement;
WHEREAS, the Company’s board of directors (the “Board”) determined it wishes to indemnify and advance expenses to the Office Holders of the Company in accordance with the Companies Law, and wishes to indemnify and advance expenses to director nominees of the Company, each as set forth in this Agreement; and
WHEREAS, at the General Meeting of the Company, the Company, following the approval of the Board, determined it wishes to indemnify and advance expenses to the Office Holders of the Company in accordance with the Companies Law, and wishes to indemnify and advance expenses to director nominees of the Company, each as set forth in this Agreement.
WE HEREBY DECLARE AND AGREE AS FOLLOWS:
1. | Obligation to indemnify: |
The Company hereby undertakes:
1.1. | To indemnify you to the fullest extent permitted by applicable law and the Articles, as each may be amended from time to time, for any liability or expense, as detailed below, imposed on Indemnitee due to or in connection with an act performed by such Indemnitee, either prior to or after the date hereof, in Indemnitee’s capacity as an Office Holder of the Company, including, without limitation, as a director, officer, employee, agent, observer or fiduciary of the Company, any subsidiary thereof or any other corporation, collaboration, partnership, joint venture, trust or other enterprise, in which you serve at any time at the request of the Company (the “Corporate Capacity”). The term “act performed in Indemnitee’s capacity as an Office Holder” shall include, without limitation, any act, omission and failure to act and any other circumstances relating to or arising from Indemnitee’s service in a Corporate Capacity. Notwithstanding the foregoing, in the event that the Office Holder is the beneficiary of an indemnification undertaking provided by a subsidiary of the Company or any other entity, with respect to his or her Corporate Capacity with such subsidiary or entity, then the indemnification obligations of the Company hereunder with respect to such Corporate Capacity shall only apply to the extent that the indemnification by such subsidiary or other entity does not actually fully cover the indemnifiable liabilities and expenses relating thereto. The following shall be hereinafter referred to as “Indemnifiable Events”: |
1.1.1. | A monetary liability that you incur or that is imposed on you in favor of another person pursuant to a court judgment, including a judgment given in a settlement entered into consistent with the terms of this Agreement or a decision of an arbitrator that is enforceable against you and approved by a competent court, provided that such acts pertain to one or more of the events set out in the Schedule hereto which is an integral and inseparable part of this Agreement (the “Schedule”); |
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1.1.2. | Reasonable litigation expenses, including legal fees that you incur or which are ordered to pay by a court in connection with proceedings filed against you by or on behalf of the Company or by a third party, or in a criminal proceeding in which you are acquitted, or in a criminal proceeding in which you are convicted of a crime but which does not require criminal intent; |
1.1.3. | Reasonable litigation expenses, including reasonable legal fees that you incur in connection with an investigation or proceeding conducted against you by an authority authorized to conduct such investigation or proceeding and which concluded without the filing of an indictment against you and without you being subject to a financial obligation as a substitute for a criminal proceeding, or that concluded without the filing of an indictment against you but with the imposition of a financial obligation as a substitute for a criminal proceeding relating to an offence which does not require proof of criminal intent, or in connection with a monetary sanction, within the meaning of the relevant terms in the Companies Law; |
1.1.4. | A financial liability that you incur for a payment which you are obligated to make to an injured party as set forth in section 52(54)(A)(1)(a) of the Israeli Securities Law, 1965 (the “Securities Law”). |
1.1.5. | Expenses that you incur in connection with Administrative Proceedings (as defined below) you were involved in, including reasonable litigation fees and attorneys’ fees; for this purpose “Administrative Proceeding” shall mean a proceeding pursuant to Chapters H3 (Imposition of Monetary Sanction by the Israel Securities Authority), H4 (Imposition of Administrative Enforcement Means by the Administrative Enforcement Committee) or I1 (Settlement for the Avoidance of Commencing Proceedings or Cessation of Proceedings, Conditioned upon Conditions) of the Securities Law, as shall be amended from time to time; and |
1.1.6. | Any other matter in respect of which it is permitted or will be permitted under applicable law to indemnify an Office Holder of the Company. |
For the avoidance of doubt, any reference to “expenses” in this Agreement shall include, without limitation, all reasonable attorneys’ fees, court costs, transcript costs, fees of experts, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other out-of-pocket disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a proceeding enumerated above or an appeal resulting from a proceeding to which you are a party.
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1.2. | The aggregate and accumulated indemnification amount that the Company may pay to its Office Holders and its director nominees (in addition to sums that may be received from insurance companies in connection with insurance policies that the Company has purchased as set forth in Section 1.3 below) pursuant to all the letters of indemnification issued and/or that shall be issued by the Company pursuant to the indemnification resolutions mentioned above (including in connection with an offering to the public of the Company’s securities), shall not exceed the greatest of (i) in relation to indemnity in connection with an offering to the public of the Company’s securities, the aggregate amount of proceeds from the sale by the Company and/or any shareholder of the Company in connection with such public offering; (ii) 25% of the Company’s total shareholders’ equity pursuant to the Company’s most recent financial statements as of the time of the actual payment of indemnification, and (iii) $15 million prior to the public offering of the Company’s securities and $50 million thereafter (in each case, as may be increased from time to time by shareholders’ approval) (the ”Maximum Indemnification Amount”). |
1.3. | The Maximum Indemnification Amount shall not be affected in any way by the existence of, or payment under, insurance policies. Payment of indemnification shall not affect your right to receive insurance payments, if you receive the same (either personally or through the Company); however, the Company will not be required to indemnify you for any sums that were, in fact, already paid to you or paid on your behalf (in each case, without any obligation for you to repay any such amount) in respect of insurance or any other indemnification paid to you or on your behalf by any third party, except with respect to any excess beyond the amount paid. In the event there is any payment made to you or on your behalf (in each case, without any obligation for you to repay any such amount) under this Agreement and such payment is covered by an insurance policy, the Company shall be entitled to collect such amount of payment from the insurance proceeds and you shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights. |
1.4. | In the event the indemnification amount the Company is required to pay to its Office Holders and its director nominees, as set forth in Section 1.1 above, exceeds at a certain time the Maximum Indemnification Amount (or the balance thereof after deducting any indemnification amounts paid or payable by the Company to any of its Office Holders or director nominees at such time) in accordance with Section 1.2 above, the Maximum Indemnification Amount or its remaining balance will be allocated between the Office Holders and director nominees entitled to indemnification, in the manner that the amount of indemnification that each of the Office Holders and director nominees will actually receive will be calculated in accordance with the ratio between the amount each individual Office Holder may be indemnified for, and the aggregate amount that all of the relevant Office Holders and director nominees involved in the event may be indemnified for. |
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1.5. | Upon the occurrence of a proceeding of the type set forth in Section 1.1 above, the Company shall place at your disposal, on the date on which such amounts are first payable by you, the funds required to cover the expenditures and payments in connection with such proceeding, in a manner such that you shall not be required to pay for, or personally finance the legal expenses, subject to the conditions and instructions in this Indemnification Agreement. Advances shall be unsecured and, subject to Section 5, interest free. Advances shall be made without regard to your ability to repay the expenses and, subject to Section 4 below, without regard to your ultimate entitlement to indemnification under the provisions of this Agreement. The payments of any such amounts shall be made by the Company directly to you (if you actually made the payment of such amount) or the relevant third party (if you have not yet made payment of such amount), as soon as practicable, but in any event no later than fifteen days after written demand by you therefor to the Company, and any such payment shall be deemed to constitute indemnification hereunder. As part of the aforementioned undertaking, the Company will make available to you any security or guarantee that you may be required to post in accordance with an interim decision given by a court, governmental or administrative body, or an arbitrator, including for the purpose of substituting liens imposed on your assets. |
2. | The Company’s obligation to indemnify you in accordance with this Agreement is subject to this Agreement, terms and conditions set forth in this Section 2 and the permissibility of any such indemnification under applicable law. |
2.1. | You shall inform the Company in writing of the commencement of any legal proceeding brought against you in connection with any Indemnifiable Event that may entitle you to indemnification, and of the receipt of any written notice or written threat that any such legal proceeding may be commenced against you (including any proceedings by or against the Company and any subsidiary thereof), and shall do so as promptly as practicable upon first becoming so aware, and you shall provide the Company, in the manner set forth in Section 16 below, all documents in connection with such proceedings as reasonably requested by the Company. If, at the time of receipt of notice from you, the Company has directors’ and officers’ liability insurance in effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in any such policy. The failure to notify the Company pursuant to this Section 2.1 will not relieve the Company from any liability it may have to you under this Agreement unless and only to the extent such failure to provide notice materially prejudices the Company’s ability to defend such action. |
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2.2. | Other than with respect to proceedings that have been initiated against you by the Company or in its name, the Company, alone or jointly with any other indemnifying party, is entitled to assume the defense thereof, with counsel selected by the Company and reasonably acceptable to you provided that the Company shall inform you within 45 days from the date of receiving notice pursuant to Section 2.1 above (or within a shorter period of time if the matter requires filing a statement of defense or a response to a proceeding), that it has assumed the defense thereof and shall indemnify you according to this Agreement. Notwithstanding the foregoing (i) you shall have the right to employ separate counsel in any such proceeding at your expense and (ii) if (A) the employment of separate counsel by you has been previously authorized by the Company, (B) you shall have, in good faith, reasonably concluded that there may be a conflict of interest between the Company and you in the conduct of such defense of such action, or (C) the Company has not in fact employed counsel to assume the defense of such action within reasonable time or shall not continue to retain such counsel to defend such proceeding, then the fees and expenses actually and reasonably incurred by you with respect to your separate counsel shall be subject to indemnification hereunder. The Company and/or the aforementioned counsel shall have the right to conduct the defense as it or they see fit (provided that the Company shall conduct the defense in good faith and in a diligent manner); the appointed counsel shall act and shall owe its duty of loyalty to the Company and to you. In the event that the Company decides to settle a monetary obligation or to decide a monetary obligation by arbitration, mediation or settlement, the Company shall be entitled to do so as long as (a) the lawsuit or the threat of a lawsuit against you shall be fully withdrawn; (b) the amount of such obligation or settlement is fully indemnifiable pursuant to this Agreement and/or applicable law; and (c) any such obligation or settlement does not impose any penalty or limitation on you or require the admission of wrongdoing by you. In the event that clauses (a), (b) or (c) is not met, the Company may only settle a monetary obligation or decide a monetary obligation by arbitration, mediation or settlement after obtaining your prior written consent. |
2.3. | You shall cooperate with the Company and/or with any counsel appointed by the Company as set forth above in every reasonable manner that shall be required from you by any of them in connection with the handling of such legal proceedings, all in accordance with Section 1.2 above at the Company’s expense. You shall not bear any additional legal expenses due to such cooperation. |
2.4. | Your indemnification rights in connection with the legal proceedings against you, as set forth in this Agreement, will not be enforceable in connection with amounts that you shall be required to pay as a result of a settlement or arbitration effected without the Company’s prior written consent. |
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2.5. | In addition, in the event of the indemnification hereunder is being paid in respect of your serving as an Office Holder in any subsidiary of the Company, such indemnification will only be paid after all your rights to insurance and indemnification from such subsidiary will have been exhausted, if and to the extent they exist. |
2.6. | (A) Upon your written request for payment in connection with any Indemnifiable Event pursuant to this Agreement, the Company shall take all necessary steps according to any applicable law to pay such payment and will do all that is required to obtain any approval that is required. If a determination with respect to your entitlement to indemnification pursuant to this Agreement is required by applicable law, indemnification hereunder shall be made in the specific case by one of the following methods: (x) if no Change in Control has occurred, (i) by a majority vote of the Disinterested Directors, even if the number of such Disinterested Directors is less than a quorum of the Board (the “Majority Disinterested Directors”), (ii) by a committee of Disinterested Directors designated by the Majority Disinterested Directors or (iii) if there are no such Disinterested Directors, by Independent Counsel in a written opinion addressed to the Board, a copy of which shall be delivered to you; or (y) if a Change in Control shall have occurred, (i) if you so request in writing, by the Majority Disinterested Directors or (ii) otherwise, by Independent Counsel in a written opinion addressed to the Board, a copy of which shall be delivered to you. |
(B) If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 2.7(A) above, the Independent Counsel shall be selected by the Board, provided that if a Change in Control shall have occurred, you shall select the Independent Counsel. You or the Company, as the case may be, may, within five days after written notice of such selection, deliver to you or the Company, as the case may be, a written objection to such selection, provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” set forth in Section 16 below, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within 20 days after the later of (a) your submission of a written request for indemnification pursuant to Section 2.2 above, and (b) the final disposition of the proceeding, including any appeal therein, no Independent Counsel shall have been selected without objection, either you or the Company may petition the court for resolution of any objection which shall have been made by you or the Company to the selection of Independent Counsel and/or for the appointment as Independent Counsel selected by the court or by such other Person as the court shall designate. The Person with respect to whom all objections are so resolved or the Person so appointed shall act as Independent Counsel under Section 2.7(A) above. Upon the due commencement of any judicial proceeding pursuant to Section 2.7(E) below, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).
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(C) If the Person empowered or selected under this Section 2.7 to determine whether you are entitled to indemnification shall not have made a determination within 60 days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall be deemed to have been made, and you shall be entitled to such indemnification absent (i) your misstatement of a material fact, or an omission of a material fact necessary to make your statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law, provided, however, that such 60 day period may be extended for a reasonable time, not to exceed an additional 30 days, if the Person making such determination with respect to entitlement to indemnification in good faith requires such additional time to obtain or evaluate documentation and/or information relating thereto.
(D) You shall cooperate with the Person making such determination with respect to your entitlement to indemnification, including providing to such Person upon reasonable advance request any documentation or information, which is not privileged or otherwise protected from disclosure and which is reasonably available to you and reasonably necessary to such determination. Any Independent Counsel shall act reasonably and in good faith in making a determination regarding your entitlement to indemnification pursuant to this Agreement. Any costs or expenses (including attorneys’ fees and disbursements) you incur in so cooperating with the Person, Persons or entity making such determination shall be borne by the Company (irrespective of the determination as to your entitlement to indemnification), and the Company hereby indemnifies and agrees to hold you harmless therefrom, subject to applicable law.
(E) If any approval is required for payment in connection with any Indemnifiable Event pursuant to this Agreement and that payment shall not be approved for any reason (including if it is determined that you are not entitled to indemnification pursuant to Section 2.7(A) above), such payment, or any part of it, that will not be approved, as said above, shall be subject to the approval of a court.
(F) The Company shall not be obligated under this Agreement to indemnify you:
(i) for an accounting or disgorgement of profits made from your purchase and sale (or sale and purchase) of securities of the Company within the meaning of Section 16(b) of the Securities Exchange Act of 1934, as amended, or similar provisions of state or local statutory law or common law if you are held liable therefor (including pursuant to any settlement arrangements);
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(ii) for any reimbursement of, or payment to, the Company of any bonus or other incentive-based or equity-based compensation or of any profits realized by you from the sale of securities of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), the payment to the Company of profits arising from the purchase and sale of securities in violation of Section 306 of the Sarbanes-Oxley Act, if you are held liable therefor (including pursuant to any settlement arrangements) or any formal policy of the Company adopted by the Board (or a committee thereof), or any other remuneration paid to you if it shall be determined by a final judgment or other final adjudication that such remuneration was in violation of law; or
(iii) with respect to any proceeding, or part thereof, brought by you against the Company, any legal entity which it controls, any director or officer thereof or any third party, unless (i) the Board has consented to the initiation of such proceeding or part thereof and (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law; provided, however, that this Section 2.7(F)(iii) shall not apply to (A) counterclaims or affirmative defenses asserted by you in an action brought against you or (B) any action brought by you for indemnification or advancement from the Company under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company in the suit for which indemnification or advancement is being sought.
3. | Validity and Binding Effect. The obligations of the Company according to this Agreement shall remain valid even if you have ceased to be an Office Holder of the Company, provided that acts for which you are given a commitment of indemnification were performed or shall be performed during your service as an Office Holder of the Company. This Agreement shall be binding upon the Company and its successors and assigns. The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to you, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. |
4. | Exculpation. Subject to the provisions of the Companies Law, the Company hereby releases you, in advance, as an Office Holder of the Company from liability to the Company for any damage that arises from the breach of your duty of care to the Company (within the meaning of such terms under Sections 252 and 253 of the Companies Law), other than breach of the duty of care towards the Company in a distribution (as such term is defined in the Companies Law). |
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5. | Repayment of Sums; Partial Indemnity. In the event the Company pays to you, or in your place, any amount pertaining to this Agreement in connection with a legal proceeding as stated above, and afterwards it shall be determined that you are not entitled to any indemnification from the Company for any reason whatsoever, the sums paid by the Company shall be considered a loan that was granted to you by the Company, and shall be linked to the Consumer Price Index and accrue interest in accordance with the Income Tax Regulations (Determination of the Interest Rate), 1985, as amended from time to time. You will be required to repay these sums to the Company when requested to do so in writing by the Company and in accordance with a payment schedule that the Company shall in its discretion determine. |
If you are entitled under any provision of this Agreement to indemnification by the Company for some or a portion of the expenses, judgments, fines, penalties and amounts paid in settlement arising out of or resulting from a claim of indemnification hereunder but not, however, for the entire amount thereof, the Company shall nevertheless indemnify you for the portion thereof to which you are entitled. Moreover, notwithstanding any other provision of this Agreement, to the extent that you have been successful on the merits or otherwise in defense of any or all claims for indemnification relating in whole or in part to any Indemnifiable Event or in defense of any issue or matter therein, including dismissal without prejudice, you shall be indemnified against all expenses incurred in connection therewith.
6. | Terms in Companies Law. The terms contained in this Agreement will be construed in accordance with the Companies Law, as amended from time-to-time. |
7. | Interpretation. The obligations of the Company according to this Agreement shall be interpreted broadly and in a manner that shall facilitate its execution, to the extent permitted by law, and for the purposes for which it was intended. In the event of a conflict between any provision of this Agreement and any provision of the law, said provision of the law shall supersede the specific provision in this Agreement, but shall not limit or diminish the validity of the remaining provisions of this Agreement. |
8. | Force and Effect. The indemnification under this Agreement will enter into effect upon your signing a copy of the same in the appropriate place, and the delivery of such signed copy to the Company. Upon its effectiveness, this Indemnification Agreement revokes any previous undertaking for indemnification, if and insofar as offered and granted to you by the Company. Notwithstanding the foregoing, if this Indemnification Agreement shall be declared or found void for any reason whatsoever, then any previous undertaking by the Company for indemnification towards you, to the extent granted, shall remain in full force and effect, subject to any applicable law. |
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9. | Changes and Amendments. The Company may, at its sole discretion and at any time, revoke its undertaking to indemnify you hereunder, or reduce the Maximum Indemnification Amount, or limit the Indemnifiable Events to which it applies, in regard to all the Office Holders and director nominees, to the extent it relates only, to Indemnifiable Events that will apply after the date of such change, provided that prior notice has been given to the Office Holder of the Company’s intention to do so, in writing at least 60 days before the date on which such decision will enter into effect. For the avoidance of doubt, it is hereby clarified that any such decision will not have retroactive effect of any kind whatsoever and the Indemnification Agreement, prior to such change or revocation, as the case may be, will continue to apply and be in full force and effect for all purposes in relation to any Indemnifiable Event that has preceded such change or revocation, even if the proceeding in respect thereof has been filed against the Office Holder after the change or revocation of the Indemnification Agreement. In all other cases, this Indemnification Agreement may not be changed, unless the Company and yourself have signed an agreement effecting such change. |
10. | Third Parties; No Assignment. This Agreement does not constitute a contract for the benefit of any third party and is not assignable. For the avoidance of doubt, in the event of death, this Agreement will apply to you and your estate. |
11. | Waiver. No waiver, delay, forbearance to act or extension granted by the Company or by you shall be binding unless executed in writing by the parties thereto. No waiver of any of the provisions of this Agreement will be construed in any circumstances as a waiver of other provisions hereunder, and will not prevent any such party from taking all legal and other steps as will be required in order to enforce such other provisions. No supplement, modification or amendment of this Agreement or any provision hereof shall limit your right under this Agreement in respect of any action you take or omit to take prior to such supplement, modification or amendment. |
12. | Retroactive Right to Indemnify. The foregoing does not derogate from the Company’s right to indemnify you retroactively in accordance with the Articles and subject to any applicable law. |
13. | Liability Insurance. To the extent the Company maintains an insurance policy or policies providing directors’ and officers’ liability insurance, you shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage available for any Office Holder of the Company. |
14. | Governing Law and Jurisdiction. The laws of the State of Israel shall govern this Agreement and all issues related thereto, without giving effect to any conflicts of law principles. You and the Company hereby (i) irrevocably consent to the exclusive jurisdiction of the courts in Tel Aviv, Israel in connection with this Indemnification Agreement, except if an indemnification claim is related to a legal proceeding already filed by a third party in a different court and (ii) irrevocably consent to service of process at the address set forth in Section 16 of this Agreement. |
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15. | Enforcement. The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce you to serve or continue to serve as an Office Holder of the Company, and the Company acknowledges that you are relying upon this Agreement in serving as an Office Holder of the Company. |
16. | Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed; (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed; (iii) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed; or (iv) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been received: |
(a) If to you, at such address as you shall provide the Company.
(b) If to the Company to:
Att: CEO and CFO
NANO-X IMAGING LTD
Communications Center, Neve Ilan, Israel 9085000, Israel
or to any other address as may have been furnished to you by the Company.
17. | Definitions. In this Agreement: |
“Action”, “Act” or any derivative of it – including a decision or a failure or omission to act and including your Actions before the date of this Agreement that were made during your term of service as an Office Holder in the Company.
“Change in Control” – (i) the sale of all or substantially all of the assets of the Company on a consolidated basis to an unrelated person or entity, (ii) a merger, reorganization or consolidation pursuant to which the holders of the Company’s outstanding voting power and outstanding shares immediately prior to such transaction do not own a majority of the outstanding voting power and outstanding shares or other equity interests of the resulting or successor entity (or its ultimate parent, if applicable) immediately upon completion of such transaction, (iii) the sale of all of the share capital of the Company to an unrelated person, entity or group thereof acting in concert, or (iv) any other transaction in which the owners of the Company’s outstanding voting power immediately prior to such transaction do not own at least a majority of the outstanding voting power of the Company or any successor entity (or its ultimate parent, if applicable) immediately upon completion of the transaction other than as a result of the acquisition of securities directly from the Company.
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“Disinterested Directors” – members of the Board who are not parties to the action, suit or proceeding in respect of which indemnification is sought.
“Enterprise” – any corporation (other than the Company), partnership, joint venture, trust, employee benefit plan, limited liability company, or other legal entity you are or were serving at the request of the Company as a director, manager, partner, officer, employee, agent or trustee.
“Independent Counsel” – a law firm, or a partner (or, if applicable, member or shareholder) of such a law firm, that is experienced in matters of applicable law and neither presently is, nor in the past five years has been, retained to represent: (i) the Company, any subsidiary of the Company, any Enterprise or you in any matter material to any such party; or (ii) any other party to the proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or you in an action to determine your rights under this Agreement. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify such counsel against any and all expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.
“Person” – any individual, corporation, partnership (limited or general), limited liability company, limited liability partnership, association, trust, joint venture, unincorporated organization or any similar entity.
This Agreement shall be neutral with regard to gender.
18. | Non Exclusivity. The rights of indemnification and to receive advancement as provided by this Agreement shall not be deemed exclusive of any other rights to which you may at any time be entitled under applicable law, the Articles, any agreement, a vote of shareholders or a resolution of directors, or otherwise. To the extent that a change in Israeli law, whether by statute or judicial decision, permits greater indemnification or advancement than would be afforded currently under the Articles or this Agreement, it is the intent of the parties hereto that you shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy. |
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19. | Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement is a supplement to and in furtherance of the Articles and applicable law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any of your rights thereunder. |
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In witness whereof, the Company has executed this Indemnification and Exculpation Agreement by its authorized signatorie(s).
NANO-X IMAGING LTD |
By: ______________________________
I hereby confirm receiving this Agreement and agree to all its terms.
Signature of Office Holder |
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Name: _____________________________
Date: _____________________________
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SCHEDULE
Subject to any provision of the Companies Law, the events are as follows:
1. | Any issuance of the Company’s securities and/or listing of the Company’s securities for trading on a stock exchange in the U.S., Israel or any other country, including without limitation, a public offering pursuant to a prospectus, a private offering, an offer for sale, the issuance of bonus shares or any offer of securities in any other manner; |
2. | An event arising from the Company being a public company or arising from the fact that its shares were offered to the public or arising from the fact that the Company’s shares are traded on a stock exchange in the U.S., Israel or any other country; |
3. | Conducting tender offers and anything related thereto; |
4. | A “Transaction” within the meaning of Section 1 of the Companies Law, including without limitation negotiations for entering into a transaction, the transfer, sale or purchase or charge of assets or liabilities, including securities, or the grant or receipt of a right to any of the foregoing, receiving credit and the grant of collateral and any act directly or indirectly involved in such “Transaction” and including disclosure of information and documents with respect to such “Transaction”; |
5. | Resolutions and/or acts relating to approval of transactions with stakeholders, as such transactions are defined in Chapter 5 of Part VI of the Companies Law or any amendments thereto or similar legislation; |
6. | Reports or notices filed in accordance with (a) any applicable law, including, without limitation, the Companies Law, the Israeli Securities Law of 1968, the Securities Act of 1933 and/or the Securities Exchange Act of 1934, including regulations promulgated thereunder; (b) any tax laws, antitrust laws and labor laws; and (c) any rules or instructions prevailing on an Israeli stock exchange, a U.S. stock exchange, or a stock exchange or securities market in any other country or any law of another country regulating similar matters, and/or the omission to act accordingly; |
7. | Adoption of the findings of external opinions for the purpose of the issuance of an immediate report, prospectus, financial statements or any other disclosure document; |
8. | Discussion and passing resolutions and discovery and disclosure in the Company’s reports, including an evaluation with respect to the effectiveness of internal controls and other issues incorporated in the report of the Board, as well as the issuance of statements and references to the Company’s financial statements; |
9. | Preparation, editing, approval and execution of the financial statements, including the passing of resolutions as to the application of accounting principles and any restatement of the Company’s financial statements; |
10. | Adoption of financial reporting in accordance with any accounting principles, including United States Generally Accepted Accounting Principles (US GAAP), and any act in connection therewith; |
11. | Events relating to the effecting of investments on the part of the Company in any corporation; |
12. | Any resolution with respect to a distribution, as defined in the Companies Law, including a distribution with a court’s approval; |
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13. | Amendment to the Company’s structure or its reorganization, a change in the Company’s ownership, or any resolution with respect to such matters, including without limitation, a merger, split, spin-off, change in the Company’s capital structure, incorporation of subsidiaries, dissolution or sale thereof, issuance or distribution; |
14. | Consolidation, change or revision of arrangements between the Company and the shareholders and/or holders of bonds and/or banks and/or creditors of the Company or of any entities affiliated with the Company, including the preparation or revision of the trust deeds, bonds and outline and arrangement documents in general; |
15. | Actions relating to the issuance of licenses, permits or approvals, including approvals and/or exemptions in respect of restrictive trade practices; |
16. | The making of any statement, including a bona fide statement of opinion, vote and/or abstaining from voting, made by an Office Holder of the Company in such capacity, such as in negotiations and contractual engagements with suppliers and customers, including during meetings of management, the Board or any committee thereof; |
17. | An Action in contradiction to, or deviation from, the articles of association of the Company then in effect; |
18. | Any Action or decision in relation to employer-employee relations, including the negotiation for, signing and performance of individual or collective employment agreements, other employee benefits (including allocation of securities to employees) and harassment suits; |
19. | Any Action or decision in relation to work safety and/or working conditions; |
20. | Actions in connection with the sale, distribution, licensing or use of Company’s products and services; |
21. | Any Action or omission undertaken in negotiating, signing and performing any insurance policy or any claim relating to a failure to maintain appropriate insurance and/or adequate safety matters; |
22. | Formulating working programs, including pricing, marketing, distribution, directives to employees, customers and suppliers and collaborations with competitors; |
23. | Decisions and/or acts pertaining to the environment and to public health, including dangerous substances; |
24. | Decisions and/or acts pertaining to the Consumer Protection Law, 5741-1981, and/or orders and/or regulations thereunder, or any amendments thereto or similar legislation; |
25. | Actions relating to the Company’s intellectual property and the protection thereof, including the registration or enforcement of intellectual property rights and their protection; |
26. | Infringement of intellectual property rights of third parties, including, without limitation, patents, designs, breeders’ rights, trademarks, and copyrights; |
27. | Negotiating, making and performing contracts of any kind and type with suppliers, distributors, agents, franchisees and the like of the products and services that are marketed and/or sold by, or by those serving, the Company; |
28. | Negotiating, making and performing agreements with manpower contractors, service contractors, building contractors, renovations contractors, etc.; |
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29. | Reporting and/or filing applications to state and other authorities; |
30. | Investigations on the part of state and other authorities; |
31. | Management of the bank accounts which the Company operates and performance of transactions in such bank accounts, including with respect to transactions in foreign currencies (including foreign currency deposits), securities (including resale transactions in securities and lending and borrowing of securities), loans and credit facilities, debit cards, bank guarantees, letters of credit, and consultation agreements concerning investments, including with portfolio managers, hedging transactions, options, futures contracts, derivatives, swap transactions, etc. |
32. | Realization of personal guarantees provided by the Office Holder to the Company, as security for the Company’s obligations and/or declarations; |
33. | Failure to maintain complete and/or proper due diligence procedures over the Company’s investments and transactions of all kinds, resulting in a loss of the investments in whole or in part and/or an adverse effect to the Company’s businesses and/or breach of an undertaking vis-à-vis a third party; |
34. | Events and acts in connection with investments, or acquisitions, performed by the Company with respect to any corporations or other legal entities (including acquisition of assets or rights), before or after effecting the investment or acquisition, including for the purpose of entering into a transaction, its implementation, development, follow up and supervision; |
35. | Financial liability imposed on an Office Holder in connection with acts in which he took part on behalf of the Company, vis-à-vis the various state institutions; |
36. | Financial liability imposed on an Office Holder in connection with a claim by third parties against the Office Holder due to deficient or misleading disclosure, in writing or verbally, to existing and/or potential investors in the Company, including in the event of the merger of the Company with another company; |
37. | Covering the excess insurance in the event of the activation of directors’ and officers’ liability insurance; |
38. | Breach of the provisions of any agreement whatsoever to which the Company is a party; |
39. | An Action relating to a tax liability of the Company and/or a subsidiary and/or shareholders of any of them; |
40. | Actions and omissions not covered by a product insurance policy; |
41. | Actions and omissions in connection with bodily injuries or property damage attributed to the Company and/or to an Office Holder who has acted on its behalf; |
42. | Acts and omissions arising from failure to purchase appropriate insurance and/or to take sufficiently secure measures and/or negligence in risk management; |
43. | Any of the foregoing events, in connection with the capacity of the Office Holder in the Company by virtue of his capacity as an Office Holder and/or employee and/or observer at meetings of competent organs of a related corporation; |
44. | Any of the foregoing events relating to the capacity of such Office Holder as an Office Holder of a corporation controlled by the Company or otherwise affiliated therewith; and |
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45. | Any event or action for which indemnification is allowed to be granted under the Efficiency of Enforcement Proceedings in the Israel Securities Authority Law (Legislation Amendments) of 2011 and regulations thereunder, or any amendments thereto or similar legislation or equivalent legislation in any jurisdiction. |
For the purpose of this Schedule, the “Company” shall include all subsidiaries and Affiliates of the Company.
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Tel-Aviv, Israel
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/s/Kesselman & Kesselman
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August 14, 2020
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Certified Public Accountants (Isr.)
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A member firm of PricewaterhouseCoopers International Limited
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