State of Israel
|
3672
|
Not Applicable
|
(State or other jurisdiction of
incorporation or organization)
|
(Primary Standard Industrial
Classification Code Number) |
(I.R.S. Employer Identification No.)
|
Steven J. Glusband, Esq.
Carter Ledyard & Milburn LLP
2 Wall Street
New York, NY 10005
Tel: 212-238-8605
Fax: 212-732-3232
|
Alon Mualem , CFO
Eli Yaffe, CEO
20 Ben Zion Gelis Street,
Sgoola Industrial Zone,
Petach Tikva 4927920, Israel
Tel: +972-3-9395025
Fax: +972-3- 9342584
|
Ian Rostowsky, Adv.
Amichay Finkelstein, Adv.
Amit, Pollak, Matalon & Co.
APM House,
18 Raoul Wallenberg St.
Tel Aviv 6971915, Israel
Tel: +972-3-5689000
Fax: +972-3-5689001
|
Title of each class of
securities to be registered |
Proposed maximum aggregate offering price
|
Amount of registration fee
|
||||||
Subscription rights to purchase ordinary shares, par value NIS 3.00 per share
|
N/A
|
(1)
|
N/A
|
(1)
|
||||
3,380,920
Ordinary shares, par value NIS 3.00 per share
|
$
|
4,949,667
|
(2)
|
$
|
606.00
|
(2)(3)
|
(1) |
The subscription rights are being issued without separate consideration. Pursuant to Rule 457(g) under the Securities Act, no separate registration fee is payable.
|
(2) |
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.
|
(3) |
Previously paid.
|
SUBJECT TO COMPLETION, DATED
MARCH 7,
2019
The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS
SUBSCRIPTION RIGHTS TO PURCHASE UP TO
3,380,920
ORDINARY SHARES
We are distributing at no charge to the holders of our ordinary shares at 5:00 p.m., New York City time on
March 18,
2019, which we refer to as the record date, subscription rights to purchase up to an aggregate of
3,380,920
of our ordinary shares. We will distribute to you
five (5) subscription rights
for every
three (3)
ordinary shares that you own on the record date. Your rights will be rounded down to the nearest whole number and accordingly, no fractional rights will be issued in the rights offering.
Each right entitles the holder to purchase, at a price of
$1.464
per share, one ordinary share. The subscription price, the number of shares that must be owned to receive one right and the number of ordinary shares to be issued for each right exercised have been set by us. There is no minimum subscription amount required for consummation of the rights offering.
Subscription right holders who fully exercise their basic subscription rights will be entitled to subscribe for additional ordinary shares that remain unsubscribed as a result of any unexercised basic subscription rights, which we refer to as the over-subscription right. If an insufficient number of ordinary shares are available to satisfy fully the over-subscription requests, then the available ordinary shares will be distributed among subscription rights holders who exercised their over-subscription right, based on the procedures set forth herein.
Nistec Golan Ltd.
(“Nistec Golan”)
, our controlling shareholder, holds
50.5%
of our voting rights which it acquired from its affiliate Nistec Ltd. Nistec Ltd., our then controlling shareholder,
informed us in November 2018 that it
intended
to exercise its subscription rights by converting approximately $2.5 million of debt owed to it by our company
into our ordinary shares
.
In March 2019, Nistec informed us that instead of converting the
debt owed to it
, it will participate in the rights offering by means of a cash investment of at least
$2.5 million.
Nistec Golan and Nistec Ltd., are privately held companies
indirectly
controlled by Yitzhak Nissan, through
Nistec Holdings Ltd. (Nistec Holding Ltd. and/or any of its subsidiaries are referred to herein as “Nistec”)
.
The subscription rights will expire at 5:00 p.m., New York City time, on
April 9,
2019, which we refer to as the expiration date. Any rights not exercised at or before that time will expire worthless without any payment to the holders of those unexercised rights, unless we decide in our sole discretion to extend the expiration date of the rights offering. The subscription rights may not be sold or transferred except for being transferable by operation of law, and will not be tradable on any trading market.
|
The issuance of ordinary shares purchased in the rights offering will be made on or about
April 12,
2019. American Stock Transfer & Trust Company, LLC will send electronic certificates representing ordinary shares purchased in the rights offering to record holders registered in our shareholders register maintained by it promptly after such date. Beneficial owners of our ordinary shares whose shares are held by a nominee, such as a broker, dealer or bank, rather than in their own name, will have any ordinary shares acquired in the rights offering credited to the account of such nominee on or about
April 12,
2019.
We may terminate or cancel the rights offering in our sole discretion at any time prior to
April 9,
2019, for any reason. If the rights offering is terminated, then we will return your subscription price payment, but without any payment of interest.
You should carefully consider whether to exercise your subscription rights before the expiration date. All exercises of subscription rights are irrevocable. Our ordinary shares are listed on the NASDAQ Capital Market under the symbol “ELTK”. The last sale price of our ordinary shares on NASDAQ on
March 6
, 2019 was
$2.42
per share. The ordinary shares issued in the rights offering will also be listed for trading on NASDAQ.
Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page
16
of this prospectus and under similar headings in the other documents that are incorporated by reference into this prospectus to read about factors you should consider before deciding whether to exercise your subscription rights.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense under the laws of the United States.
Prospectus dated
March 7,
2019
|
All references to “dollars” or “$” in this prospectus are to U.S. dollars, and all references to “shekels” or “NIS” are to New Israeli Shekels.
Unless otherwise indicated, information contained in this prospectus concerning our industry and the markets in which we operate, including our general expectations, market position, market opportunity and market size, is based on information from various sources, on assumptions that we have made that are based on those data and other similar sources and on our knowledge of the markets for
our
products and services. This information involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. In the absence of reliable data, the market position, market opportunity and market size information included in this prospectus is inherently imprecise. In addition, projections, assumptions and estimates of our future performance and the future performance of the industry in which we operate is necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in “Risk Factors” and elsewhere in this prospectus. These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.
|
The following are examples of what we anticipate may be common questions about the rights offering. The answers are based on selected information from this prospectus. The following questions and answers do not contain all of the information that may be important to you and may not address all of the questions that you may have about the rights offering. This prospectus contains more detailed descriptions of the terms and conditions of the rights offering and provides additional information about us and our business, including potential risks relating to the rights offering, our business, our ordinary shares and our location in Israel.
Exercising the subscription rights and investing in our securities involves a high degree of risk. We urge you to carefully read the section entitled “Risk Factors” beginning on page 16 of this prospectus and all other information included or incorporated by reference in this prospectus in its entirety before you decide whether to exercise your rights.
Q:
What is a rights offering?
A:
A rights offering is a distribution of subscription rights on a pro rata basis to all existing shareholders of a company to buy a proportional number of additional securities at a given price. We are distributing to holders of our ordinary shares, at no charge, as of the close of business on the record date
(March 18,
2019), subscription rights to purchase up to an aggregate of
3,380,920
of our ordinary shares. You will receive
five (5
) subscription
rights
for every
three (3)
ordinary shares you own at the close of business on the record date. Each right carries with it a basic subscription right and an over-subscription right. The basic and over-subscription rights will be evidenced by subscription rights certificates, which may be physical certificates but will more likely be electronic instruments issued through the facilities of the Depository Trust Company, or DTC.
Q:
Why are we undertaking the rights offering, and how will we use the proceeds from the rights offering?
A: We are undertaking this rights offering in order to increase our shareholders equity in order to regain compliance with Nasdaq’s required minimum shareholders for continued listing on Nasdaq. We intend to use the net proceeds from this offering to
repay bank
debt
and for general coporate purposes including working capital. In March 2019,
Nistec
informed us that it will participate
in
the
rights offering
by means of a cash investment in an amount of at least
$2.5 million
.
We do not currently have specific plans or commitments with respect to the net proceeds from this offering other than with respect to the
repayment
of
approximately $
1.4
million of
bank
debt. We will have broad discretion in the way that we use the remaining net proceeds of this offering. We had approximately $1.2 million of cash and cash equivalents as of September 30, 2019.
The rights offering provides
all of
our existing shareholders the opportunity to participate in our capital raising efforts, in a manner that allows them to maintain, and possibly increase, their proportional ownership interest in us.
Q:
How much money will Eltek raise as a result of the rights offering?
A: We estimate that the proceeds from the rights offering will be approximately
$4.8
million (assuming the sale of
3,380,920
ordinary shares at an assumed subscription price of
$1.464
per share), after deducting expenses related to the rights offering payable by us, estimated at approximately
$185,000.
|
Q:
What is a subscription right?
A: We expect to issue
five (5
) subscription
rights
for every
three (3)
of our ordinary shares that you own on the record date. Each subscription right carries with it a basic subscription right and an over-subscription right and entitles the holder of the right the opportunity to purchase, at the subscription price of
$1.464
per right, one (1) ordinary share. Your subscription rights will be rounded down to the nearest whole number and accordingly, no fractional rights will be issued in the rights offering.
Q.
May I transfer my subscription rights?
A:
No. The subscription rights may not be sold or transferred except for being transferable by operation of law. The subscription rights will not be traded on the NASDAQ Capital Market or any other trading market.
Q:
What is a basic subscription right?
A:
Each basic subscription right gives you the opportunity to purchase one (1) of our ordinary shares. You may exercise any number of your basic subscription rights or you may choose not to exercise any subscription rights at all.
For example, if you own
3
,000 of our ordinary shares on the record date and you are granted
five (5
) subscription
rights
for every
three (3)
ordinary shares you own at that time, then you would have the basic right to purchase
up to 5,000 ordinary shares
at
$1.46 per share, or
an
aggregate price of up to
$7,320.
If you hold your ordinary shares in the name of a broker, dealer, bank or other nominee who uses the services of the DTC, then DTC will credit the account of the nominee with
five rights
for every
three
ordinary shares you own at the record date.
Q:
What is an over-subscription right?
A:
If you elect to purchase all of the securities available to you pursuant to your basic subscription right, you may also elect to subscribe for additional rights that remain unsubscribed as a result of any other shareholders not exercising their basic subscription rights. If an insufficient number of shares are available to satisfy fully the over-subscription requests, then the available shares will be distributed proportionately among subscription rights holders by calculating the number of rights you properly exercised using your basic subscription rights relative to the number of rights properly exercised by all subscribers who have over-subscribed. Payments in respect of over-subscription rights are due at the time payment is made for the basic subscription right. Any excess subscription price payments will be returned, without interest or deduction, promptly after the expiration of the rights offering.
Subscription rights may only be exercised for whole numbers of ordinary shares; no fractional ordinary shares will be issued in the rights offering.
Q:
Who may participate in the rights offering?
A:
Only holders of record of our ordinary shares as of
March 18,
2019 (the record date) are entitled to participate in the rights offering.
Q:
Will the officers, directors and significant shareholders of Eltek be exercising their rights?
A:
In December 2018, Nistec Ltd., transferred its ownership interest in our company to Nistec Golan, a company indirectly controlled by Yitzhak Nissan. Nistec Golan is, as of the date hereof, our controlling shareholder, holding 50.5% of our voting rights. Nistec Ltd.
initially
informed us in November 2018 that it intends to exercise its subscription right by converting approximately $2.5 million of debt owed to it by the Company
into the Company’s ordinary shares.
In February 2019,
Nistec Golan informed us that
instead of converting the
debt owed
to
it
, it will participate in the rights offering by means of a cash investment in an amount of at least
$2.5 million.
|
Q:
Will the subscription rights and the ordinary shares that I receive upon exercise of my rights be tradable on the NASDAQ Capital Market?
A:
Our ordinary shares are listed on the NASDAQ Capital Market under the ticker symbol “ELTK.” The ordinary shares issued in the rights offering will also be listed for trading on the NASDAQ Capital Market. However, the subscription rights may not be sold or transferred except for being transferable by operation of law, and will not be tradable on the NASDAQ Capital Market or any other trading market.
Q:
How do I exercise my basic subscription right and over-subscription right?
A:
Shortly after the record date we will send a subscription rights certificate to each holder of our ordinary shares that on the record date is registered in our shareholder register maintained by American Stock Transfer & Trust Company, LLC, the transfer agent of our ordinary shares, which is also acting as the subscription agent for the rights offering. The subscription rights certificate will evidence the number of subscription rights issued to each holder and will be accompanied by a copy of this prospectus.
If you are a record holder of our ordinary shares and you wish to exercise your subscription rights, you should complete the exercise form on the back of the rights certificate and send the certificate, accompanied by the subscription price, to the subscription agent. The subscription rights certificate, together with full payment of the subscription price, must be received by the subscription agent on or prior to the expiration date of the rights offering.
If you are a record holder, in order to properly exercise your over-subscription right, you must: (i) indicate on your subscription rights certificate that you submit with respect to the exercise of the rights issued to you how many additional rights you are willing to exercise pursuant to your over-subscription right and (ii) concurrently deliver the subscription payment related to your over-subscription right at the time you make payment for your basic subscription right. All funds from over-subscription rights that are not honored will be promptly returned to shareholders, without interest or deduction.
If you use the mail, we recommend that you use insured, registered mail, return receipt requested. We will not be obligated to honor your exercise of subscription rights if the subscription agent receives the documents relating to your exercise after the rights offering expires, regardless of when you transmitted the documents.
If you are a beneficial owner of our ordinary shares and hold them through a broker, dealer, bank or other nominee (including a member of the DTC), rather than in your own name, and you wish to exercise your subscription rights, you should contact your nominee to exercise your subscription rights sufficiently in advance of the expiration of the subscription period in order to ensure timely delivery of a subscription rights certificate reflecting your exercise. Your nominee will instruct you as to the proper time and payment of the subscription price. See also “
The Rights Offering – Methods for Exercising Rights
”.
Q:
Am I required to subscribe in the rights offering?
A:
No. You may exercise any number of your subscription rights, or you may choose not to exercise subscription rights at all.
|
Q:
What happens if I choose not to exercise my subscription rights?
A:
You will retain your current number of ordinary shares even if you do not exercise your basic subscription rights. However, if you do not exercise your basic subscription right in full, the percentage of our ordinary shares that you own will decrease, and your voting and other rights will be diluted to the extent that other shareholders exercise their basic and over-subscription rights.
Q:
When will the subscription rights expire?
A:
The subscription rights will expire, if not exercised, at 5:00 p.m., New York City time on
April 9,
2019, unless we decide to terminate the rights offering earlier or to extend this date. We or the subscription agent must actually receive all required documents and payments before that time and date. Any rights not exercised at or before the applicable time will expire without any payment to the holders for those unexercised rights. See “
The Rights Offering – Expiration of the Rights Offering
.”
If you hold your shares through a broker, dealer or other nominee, you will be required to comply with the procedural requirements of such nominee, including the procedures relating to the last time by which you may be required to provide notice of your intention to exercise your rights. For further information see “The Rights Offering – Methods for Exercising Rights”.
If you do not timely exercise your rights in accordance with the procedures applicable to you, your ability to exercise the rights and purchase the ordinary shares will expire.
Q:
Will Eltek be requiring a minimum dollar amount of subscriptions to consummate the rights offering?
A:
No. There is no minimum subscription requirement to consummate the rights offering.
Q:
Is exercising my subscription rights risky?
A:
The exercise of your subscription rights and over-subscription rights (and the resulting ownership of our ordinary shares) involves a high degree of risk. Exercising your subscription rights means buying ordinary shares and should be considered as carefully as you would consider any other equity investment. You should carefully consider the information under the heading “Risk Factors” and all other information included in this prospectus before deciding to exercise your subscription rights.
Q:
After I exercise my subscription rights, can I change my mind and cancel my purchase?
A:
No. Once you send in your subscription rights certificate and payment, you cannot revoke the exercise of either your basic or over-subscription rights, even if the market price of our ordinary shares is below the
$1.464
per share subscription price. You should not exercise your subscription rights unless you are certain that you wish to purchase additional ordinary shares at the proposed subscription price. Any rights not exercised at or before the expiration date will expire worthless without any payment to the holders for those unexercised rights.
Q:
Can the board of directors cancel, terminate or amend the rights offering?
A:
Our board of directors may decide to cancel or terminate the rights offering at any time and for any reason prior to 5:00 p.m. New York City time on
April 9,
2019. If our board of directors cancels or terminates the rights offering, we will issue a press release notifying shareholders of the cancellation or termination, and any money received from subscribing shareholders will be promptly returned, without interest or deduction.
|
We may amend or modify the terms of the rights offering, including the extension of the expiration date of the rights offering.
Q:
What should I do if I want to participate in the rights offering but my ordinary shares are held in the name of my broker, dealer, bank or other nominee and not in my name?
A:
Beneficial owners of our ordinary shares whose shares are held by a nominee, such as a broker, dealer, bank or trustee, rather than in their own name, must contact that nominee to exercise their rights. In that case, the nominee will complete the subscription rights certificate on behalf of the beneficial owner and arrange for proper payment by one of the methods described above. For further information see “
The Rights Offering – Methods for Exercising Rights
”.
Q:
Will I be charged a sales commission or a fee if I exercise my subscription rights?
A:
We will not charge a brokerage commission or a fee to subscription rights holders for exercising their subscription rights. However, if you exercise your subscription rights and/or sell any underlying ordinary shares through a broker, dealer, bank or other nominee, you will be responsible for any fees charged by your broker, dealer, bank or other nominee.
Q:
What is the recommendation of the board of directors regarding the rights offering?
A:
None of Eltek, our board of directors or the subscription agent is making any recommendation as to whether or not you should exercise your subscription rights. You are urged to make your decision in consultation with your own advisors as to whether or not you should participate in the rights offering or otherwise invest in our securities and only after considering all of the information included in this prospectus, including the “Risk Factors” section that follows.
Q:
How were the terms of the rights offering established?
A:
Our board of directors appointed a special committee to oversee the rights offering and make a recommendation to the board of directors with respect to the terms of the rights offering. The special committee is composed of three members of our board of directors, who are not affiliated with our controlling shareholders. The special committee recommended the subscription price to our board of directors, which in turn considered the terms of the rights offering. In determining the pricing of the rights offering, the special committee and our board of directors considered, among other things, the need to offer the shares at a price that would be attractive to investors relative to the then current trading price for our ordinary shares, historical and current trading prices and volumes for our ordinary shares, the need for capital and alternatives available to us for raising capital, potential market conditions
and
the desire to provide an opportunity to our shareholders to participate in the rights offering on a pro rata basis
In conjunction with its review of these factors, the special committee and our board of directors reviewed, with the assistance of financial advisors, our history and prospects, including our past and present earnings, our prospects for future earnings, and the outlook for our industry, our current financial condition and a range of subscription prices compared to market prices in various prior rights offerings.
The subscription price does not necessarily bear any relationship to any other established criteria for value. You should not consider the subscription price as an indication of value of our company or our ordinary shares. You should not assume or expect that, after the rights offering, our ordinary shares will trade at or above the subscription price in any given time period. The market price of our ordinary shares may decline during or after the rights offering, and you may not be able to sell the shares of our ordinary shares purchased during the rights offering at a price equal to or greater than the subscription price. You should obtain a current quote for our ordinary shares before exercising your subscription rights and make your own assessment of our business and financial condition, our prospects for the future, and the terms of this rights offering. On
March 6
, 2019, the last reported sale price of our ordinary shares on the NASDAQ Capital Market was
$2.42
per share.
|
Q:
What are the U.S. federal income tax consequences of receiving or exercising my subscription rights?
A:
A U.S. holder of ordinary shares likely will not recognize any income, gain or loss for U.S. federal income tax purposes in connection with the receipt or exercise of subscription rights. You should consult your own tax advisor as to the particular consequences to you of the rights offering. See “
Material U.S. Federal Income Tax Considerations.
”
Q:
What are the Israeli income tax consequences of receiving or exercising my subscription rights?
A:
A U.S. holder of ordinary shares likely will not recognize any income, gain or loss for Israeli income tax purposes in connection with the receipt or exercise of subscription rights. However, no tax ruling from the Israeli Income Tax Authority will be sought for the rights offering. You should consult your own tax advisor as to the particular consequences to you of the rights offering. See “
Certain Israeli Tax Considerations
.”
Q:
How many ordinary shares will be outstanding after the rights offering?
A: The number of ordinary shares that will be outstanding immediately after the completion of the rights offering will be
5,409,472
ordinary shares, assuming full participation in the rights offering
and the issuance of 3,380,920
ordinary shares. This amount excludes 71,357 ordinary shares issuable upon the exercise of outstanding exercisable options.
Q:
If I exercise my subscription rights, how will I receive ordinary shares in the rights offering?
A:
The issuance of ordinary shares purchased in the rights offering will be made on or about
April 12,
2019. American Stock Transfer & Trust Company, LLC will credit your account for the number of ordinary shares purchased in the rights offering on our shareholder register maintained by it promptly after such date. Beneficial owners of our ordinary shares whose shares are held by a nominee, such as a broker, dealer or bank, rather than in their own name, will have any ordinary shares acquired in the rights offering credited to the account of such nominee on such date.
Q:
Who is the subscription agent for the rights offering?
A:
The subscription agent is American Stock Transfer & Trust Company, LLC. The address for delivery to the subscription agent is as follows:
By Hand, Mail or Overnight Courier:
American Stock Transfer & Trust Company, LLC 6201 15 th Avenue Brooklyn, NY 11219 Attention: Reorganization Department
Your delivery to the subscription agent to an address other than the address set forth above will not constitute valid delivery and, accordingly, may be rejected by us.
Q:
What should I do if I have other questions?
A:
If you have any questions or need further information about the rights offering, please contact
our information agent,
DF King
, at
eltek@dfking.com
, or at (800)-283-2170
or our
Chief Financial Officer
, Alon Mualem, at
Alonm@nisteceltek.com
, or at +972-3- 9395023, during his normal business hours. For a more complete description of the rights offering, see “
The Rights Offering
.”
|
This summary highlights selected information contained elsewhere in this prospectus. This summary does not contain all the information that you should consider before deciding to invest in our ordinary shares. You should read the entire prospectus carefully, including “Risk Factors” and our consolidated financial statements and notes to those consolidated financial statements, before making an investment decision.
Eltek Ltd.
We are a global manufacturer and supplier of technologically advanced solutions in the field of printed circuit boards (PCBs), and
are
the Israeli leader in
some of the segments of
this industry. PCBs are the core circuitry of most electronic devices. Eltek specializes in the manufacture and supply of complex and high quality PCBs, HDI, multilayered and flex-rigid boards for the high-end market. Eltek is ITAR compliant and has AS-9100 and NADCAP Electronics certifications. Its customers include leading companies in the defense, aerospace and medical industries in Israel, the United States, Europe and Asia.
We were founded in 1970 and are incorporated under the laws of the State of Israel. Our headquarters, R&D, production and marketing center are located in Israel. We also operate through subsidiaries in North America and in Europe and by agents and distributors in Europe, India and South Africa. Our principal executive offices are located at 20 Ben Zion Gelis Street, Sgoola Industrial Zone, Petach Tikva 4927920, Israel , and our telephone number is +972-3-9395025. Our agent for service of process in the United States is Eltek USA, Inc., located at 250 Commercial Street, Suite 2022, Manchester, NH 03101, USA, and its telephone number is +1 603 421 0020. Our website address is
http://www.nisteceltek.com/
. Information contained on, or that can be accessed through, our website does not constitute a part of this prospectus and is not incorporated by reference herein. We have included our website address in this prospectus solely for informational purposes.
Recent Events
Based on a preliminary and unaudited financial report, we expect to report revenues of approximately $34.0 million for the year ended December 31, 2018 and an operating loss of between $2.0 – $2.4 million as compared to revenues of $32.8 million and an operating loss of $3.4 million for the year ended December 31, 2017. The 2018 financial information is unaudited and subject to audit changes.
We believe that the cost cutting measures and other actions taken to improve our operating results, including the reduction of debt resulting from this rights offering, will lead to improved operations in 2019, but no assurance can be given that we will be successful in our efforts.
|
|
Securities Offered
|
We are distributing at no charge to the holders of our ordinary shares on
March 18
,
2019, which we refer to as the record date, subscription rights to purchase up to an aggregate of
3,380,920
of our ordinary shares. We will distribute
five
subscription
rights
to the holder of record of every
three
ordinary shares that is held by the holder of record on the record date. Based on
2,028,552 shares
outstanding on the date hereof, we will issue approximately
3,380,920
subscription rights in the rights offering. The total subscription price for the subscription rights offered in the rights offering will be
$4.95
million, assuming full participation in the rights offering
,
of which no assurance can be given.
|
Use of Proceeds
|
We intend to use the net proceeds we receive from this offering for
the repayment of approximately $$1.4 million of outstanding debt, as well as for general corporate purposes, including
working capital and other general corporate purposes
, including the possible investment
in
plant and equipment.
See “Use of Proceeds.”
|
Transferability of Subscription Rights
|
The subscription
rights
may not be sold or transferred except for being transferable by operation of law.
|
No Board Recommendation
|
Our board of directors makes no recommendation to you about whether you should exercise
any
subscription rights. You are urged to consult your own financial advisors in order to make an independent investment decision about whether to exercise your subscription rights. Please see the section of this prospectus entitled “
Risk Factors
” for a discussion of some of the risks involved in investing in our securities.
|
No Minimum Subscription Requirement
|
There is no minimum
subscription
requirement. We will consummate the rights offering regardless of the amount raised from the exercise of rights by the expiration date.
|
No Revocation
|
If you exercise any of your basic or over-subscription rights, you will not be permitted to revoke or change the exercise or request a refund of monies paid.
|
Taxation
|
For a discussion of material U.S. federal income tax and Israeli tax considerations of the receipt and exercise of the rights and the ownership and disposition of new ordinary shares, please refer to “Material U.S. Federal Income Tax Considerations” and “Certain Israeli Tax Considerations” in this prospectus.
|
Termination, Cancellation and Amendment
|
We may terminate or cancel the offering in our sole discretion at any time on or before
April 9,
2019 for any reason (including, without limitation, a change in the market price of our ordinary shares). If the offering is terminated, all rights will expire without value and we will promptly arrange for the refund, without interest or deduction, of all funds received from holders of subscription rights. Any termination or cancellation of the rights offering will be followed as promptly as practicable by an announcement.
We may amend or modify the terms of the
rights
offering, and may extend the expiration date of the rights offering.
|
Procedure for Exercising Rights
|
If you are the record holder of our ordinary shares registered on our shareholder register maintained by American Stock Transfer & Trust Company, LLC, our transfer agent, not including those ordinary shares held in the name of DTC, to exercise your subscription rights you must complete the subscription rights certificate and deliver it to the subscription agent, American Stock Transfer & Trust Company, LLC, together with full payment for all the subscription rights you elect to exercise. The subscription agent must receive the proper forms and payments on or before the expiration date. You may deliver the documents and payments by mail or commercial courier. If regular mail is used for this purpose, we recommend using registered mail, properly insured, with return receipt requested.
If you are a beneficial owner of our ordinary shares and/or hold them through a broker, dealer, bank or other nominee (including a participant of DTC), you should instruct your broker, dealer, bank or other nominee in accordance with the procedures described in the section of this prospectus entitled “The Rights Offering – Methods for Exercising Rights” and “The Rights Offering – Payment of Subscription Price”
|
Subscription Agent
|
American Stock Transfer & Trust Company, LLC
|
Information Agent
|
D.F. King
& Co., Inc.
|
Questions
|
If you have any questions or need further information about the rights offering, please call
our information agent, D.F. King, at
eltek@dfking.com
, or at (800)-283-2170, or
our
Chief Financial Officer
, at
Alonm@nisteceltek.com
, or
+972-3- 9395023, during his normal business hours.
|
Shares Outstanding on the Date of this Prospectus
|
2,028,552 ordinary shares are outstanding on the date of this prospectus. This amount excludes 71,357 ordinary shares issuable upon the exercise of outstanding exercisable options.
|
Shares Outstanding after Completion of the Rights
Offering |
5,409,472
of our ordinary shares will be outstanding immediately after the completion of the rights offering, assuming full participation in the rights offering. This amount excludes
71,357
ordinary shares issuable upon the exercise of outstanding exercisable options.
|
Issuance of Our Ordinary Shares
|
The issuance of ordinary shares purchased in the rights offering will be made on or about
April 12,
2019.
American Stock Transfer & Trust Company, LLC will issue electronic certificates representing ordinary shares purchased in the rights to record holders registered on our shareholder register maintained by it promptly after such date. Beneficial owners of our ordinary shares whose shares are held by a nominee will have any ordinary shares acquired in the rights offering credited to the account of such nominee on such date.
|
Risk Factors
|
See “
Risk Factors
” and other information included in this prospectus for a discussion of factors you should carefully consider before deciding to invest in our ordinary shares.
|
Fees and Expenses
|
We will bear the fees and expenses incurred by us relating to the rights offering.
|
Trading
|
Our ordinary shares are listed on the NASDAQ Capital Market under the symbol “ELTK.” The ordinary shares issued in the rights offering will also be listed for trading on the NASDAQ Capital Market. The subscriptions rights will not be listed for trading on any trading exchange.
|
· |
the impact of possible recessionary environments or economic instability in multiple foreign markets;
|
· |
changes in regulatory requirements and complying with a wide variety of foreign laws;
|
· |
tariffs and other trade barriers;
|
· |
the imposition of exchange or price controls or other restrictions on the conversion of foreign currencies; and
|
· |
difficulties and costs of staffing and managing foreign operations.
|
· |
the size and timing of significant orders and their fulfillment;
|
· |
demand for our products and the mix of products purchased by our customers;
|
· |
competition from lower priced manufacturers;
|
· |
fluctuations in foreign currency exchange rates, primarily the NIS against the Dollar and the Euro;
|
· |
manufacturing yield;
|
· |
plant utilization;
|
· |
availability of raw materials;
|
· |
plant or line shutdowns to repair or replace malfunctioning manufacturing equipment;
|
· |
the length of our sales cycles;
|
· |
changes in our strategy;
|
· |
the number of working days in the quarter;
|
· |
changes in seasonal trends; and
|
· |
general domestic and international economic and political conditions.
|
· |
retain our executive officers and key technical personnel;
|
· |
attract and retain additional qualified personnel to provide technological depth and support to enhance existing products and develop new products; and
|
· |
attract and retain highly skilled operations, marketing and financial personnel.
|
· |
quarterly variations in our operating results;
|
· |
operating results that vary from the expectations of securities analysts and investors;
|
· |
changes in expectations as to our future financial performance, including financial estimates by securities analysts and investors;
|
· |
announcements of technological innovations or new products by us or our competitors;
|
· |
announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments;
|
· |
changes in the status of our intellectual property rights;
|
· |
announcements by third parties of significant claims or proceedings against us;
|
· |
announcements by governmental or regulatory authorities of significant investigations or proceedings against us;
|
· |
additions or departures of key personnel;
|
· |
changes in our cost structure due to factors beyond our control, such as new laws or regulations relating to environmental matters and employment;
|
· |
future sales of our ordinary shares;
|
· |
our involvement in litigation;
|
· |
general stock market price and volume fluctuations;
|
· |
changes in the prices of our products and services; and
|
· |
devaluation of the dollar against the NIS.
|
As of September 30, 2018
|
||||||||
Actual
|
As Adjusted
|
|||||||
(U.S. dollars in thousands)
Unaudited
|
||||||||
Current:
|
||||||||
Cash and cash equivalents
|
$
|
1,201
|
$
|
4,496
|
||||
Liabilities:
|
||||||||
Total current liabilities
|
$
|
19,904
|
$
|
18,524
|
||||
Total long-term liabilities
|
403
|
403
|
||||||
Total liabilities
|
$
|
20,307
|
$
|
18,927
|
||||
Shareholder’s Equity:
|
||||||||
Share capital:
|
||||||||
Ordinary shares of NIS 3.00 par value; 10,000,000 shares authorized;
2,028,552
shares issued and outstanding
|
1,985
|
4,784
|
||||||
Additional paid-in capital
|
17,270
|
19,146
|
||||||
Capital reserve
|
723
|
723
|
||||||
Foreign currency translation adjustments (Eltek’s standalone financial statements)
|
2,298
|
2,298
|
||||||
Retained earnings (accumulated deficit)
|
(20,882
|
)
|
(20,882
|
)
|
||||
Total shareholders’ equity
|
$
|
1,394
|
$
|
6,069
|
||||
Total liabilities and shareholders’ equity
|
$
|
21,701
|
$
|
24,996
|
Year
|
High
|
Low
|
||||||
2014
|
$
|
14.35
|
$
|
5.70
|
||||
2015
|
$
|
8.25
|
$
|
4.05
|
||||
2016
|
$
|
7.35
|
$
|
3.60
|
||||
2017
|
$
|
8.95
|
$
|
2.65
|
||||
2018
|
$
|
5.95
|
$
|
2.00
|
2018
|
||||||||
First Quarter
|
$
|
5.95
|
$
|
3.46
|
||||
Second Quarter
|
$
|
4.64
|
$
|
3.5
|
||||
Third Quarter .
|
$
|
4.48
|
$
|
3.41
|
||||
Fourth Quarter
|
$
|
5.95
|
$
|
2.00
|
||||
2019
|
||||||||
First Quarter (through
March 6
, 2019)
|
$
|
2.84
|
$
|
2.22
|
Subscription price per share
|
|
$
|
1.464
|
|||||
Net tangible book value per ordinary share prior to the rights offering
|
$
|
0.69
|
||||||
Increase per ordinary share attributable to this offering
|
$
|
0.45
|
||||||
Pro forma net tangible book value per share after the rights offering
|
$
|
1.14
|
||||||
Dilution in net tangible book value per share to purchasers
|
$
|
0.33
|
Name
|
Number of Ordinary Shares
Beneficially Owned
(1)
|
Percentage
of Ownership
(2)
|
||||||
Nistec Golan Ltd.
(3)
|
1,024,419
|
50.5
|
%
|
|||||
Yitzhak Nissan
(3)(4)
|
124,028
|
56.6
|
%
|
|
(1) |
Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Ordinary shares relating to options or convertible notes currently exercisable or exercisable within 60 days of the date of this table are deemed outstanding for computing the percentage of the person holding such securities but are not deemed outstanding for computing the percentage of any other person. Except as indicated by footnote, and subject to community property laws where applicable, the persons named in the table above have sole voting and investment power with respect to all shares shown as beneficially owned by them.
|
(2) |
The percentages shown are based on 2,028,552 ordinary shares issued and outstanding as of
March 6
, 2019.
|
(3) |
Nistec Ltd. transferred it shares to Nistec Golan. in December 2018. Nistec Golan is an Israeli private company controlled by Yitzhak Nissan. Accordingly, Mr. Nissan may be deemed to be the beneficial owner of the ordinary shares held directly by Nistec Golan.
|
· |
the merger does not require the alteration of the memorandum or articles of association of the acquiring company;
|
· |
the acquiring company would not issue more than 20% of the voting rights thereof to the shareholders of the target company in the course of the merger and no person will become, as a result of the merger, a controlling shareholder of the acquiring company, on a fully diluted basis;
|
· |
neither the target company, nor any shareholder that holds 25% of the means of control of the target company is a shareholder of the acquiring company and there is no person that holds 25% or more of the means of control in both companies.
|
· |
certain financial institutions;
|
· |
dealers or traders in securities that use a mark-to-market method of accounting;
|
· |
persons holding rights or new ordinary shares as part of a hedge, straddle, conversion transaction or integrated transaction;
|
· |
persons whose “functional currency” for U.S. federal income tax purposes is not the U.S. dollar;
|
· |
tax-exempt entities, “individual retirement accounts” or “Roth IRAs”;
|
· |
entities classified as partnerships for U.S. federal income tax purposes;
|
· |
persons who own or are deemed to own 10% or more of our voting shares; or
|
· |
persons holding existing ordinary shares, rights or new ordinary shares in connection with a trade or business conducted outside the United States.
|
· |
a citizen or individual resident of the United States;
|
· |
a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States, any state therein or the District of Columbia;
|
· |
an estate the income of which is subject to U.S. federal income taxation regardless of its source; or
|
· |
a trust if (i) a U.S. court is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (ii) the trust has validly elected to be treated as a U.S. person for U.S. federal income tax purposes.
|
Expenses
|
Amount
|
|||
SEC registration fee
|
$
|
606
|
||
Printing, EDGAR and mailing fees
|
8,000
|
|||
Legal fees and expenses
|
45,000
|
|||
Accounting fees and expenses
|
55,000
|
|||
Subscription agent fees and expenses
|
17,000
|
|||
Information agent fees and expenses
|
9,000
|
|||
Miscellaneous costs
|
50,394
|
|||
Total
|
$
|
185,000
|
· |
Our Annual Report on Form 20-F for the fiscal year ended December 31, 2017;
|
· |
Our Reports on Form 6-K furnished to the SEC on April 30, 2018 (two reports), May 23, 2018, May 29, 2018, June 19, 2018, June 27, 2018 (two reports), July 3, 2018, July 16, 2018, July 26, 2018 (two reports), August 2, 2018, September 6, 2018, September 20, 2018, September 27, 2018, October 4, 2018, November 7, 2018 (two reports), November 19, 2018, December 11, 2018, December 17, 2018, December 20, 2018, January 9, 2019, January 22, 2019 and February 19, 2019;
and
|
· |
The description of our ordinary shares contained in our Annual Report on Form 20-F for the year ended December 31, 2017.
|
· |
the judgment is obtained after due process before a court of competent jurisdiction, according to the laws of the state in which the judgment is given and the judgment is enforceable according to the law of the foreign state in which the relief was granted;
|
· |
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 and its enforcement is not contrary to the law, public policy, security or sovereignty of the State of Israel.
|
· |
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 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.
|
· |
a monetary obligation imposed on the office holder in favor of another person pursuant to a judgment, including a judgment given in settlement or an arbitrator's award that has been approved by a court;
|
· |
reasonable litigation expenses, including advocates’ professional fees, incurred by the office holder pursuant to an investigation or a proceeding commenced against the office holder by a competent authority and that was terminated without an indictment and without having a monetary charge imposed on the office holder in exchange for a criminal procedure (as such terms are defined in the Israeli Companies Law), or that was terminated without an indictment but with a monetary charge imposed on the office holder in exchange for a criminal procedure in a crime that does not require proof of criminal intent or in connection with a financial sanction;
|
· |
reasonable litigation expenses, including advocates’ professional fees, incurred by the office holder or which the office holder is ordered to pay by a court, in proceedings filed against the office holder by the company or on its behalf or by another person, or in a criminal indictment in which the office holder is acquitted, or in a criminal indictment in which the office holder is convicted of an offence that does not require proof of criminal intent;
|
· |
expenses, including reasonable litigation expenses and legal fees, incurred by an office holder as a result of a proceeding instituted against such office holder in relation to (A) infringements that may result in imposition of financial sanction pursuant to the provisions of Chapter H'3 under the Israeli Securities Law or (B) administrative infringements pursuant to the provisions of Chapter H'4 under the Israeli Securities Law or (C) infringements pursuant to the provisions of Chapter I'1 under the Israeli Securities Law; and
|
· |
payments to an injured party of infringement under Section 52ND(a)(1)(a) of the Israeli Securities Law.
|
(1) |
Previously Filed
|
(2) |
Included in Exhibit 99.1 to our Report of Foreign Issuer on Form 6-K filed on September 12, 2013 and incorporated herein by reference.
|
(1) |
To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:
|
i. |
To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933 (the “Securities Act”);
|
ii. |
To reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
|
iii. |
To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in this Registration Statement.
|
|
(2) |
That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment 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.
|
(3) |
To remove from registration by means of a post-effective amendment any of the securities being registered that remain unsold at the termination of the offering.
|
|
(4) |
To file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Securities Act need not be furnished, provided that the Registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements. Notwithstanding the foregoing, with respect to registration statements on Form F-3, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Act or Rule 3-19 of Regulation S-K if such financial statements and information are contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Form F-3.
|
|
(5) |
Each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
|
|
(6) |
That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned Registrant undertakes that in a primary offering of securities of the undersigned Registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned Registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
|
i. |
Any preliminary prospectus or prospectus of the undersigned Registrant relating to the offering required to be filed pursuant to Rule 424;
|
ii. |
Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned Registrant or used or referred to by the undersigned registrant;
|
iii. |
The portion of any other free writing prospectus relating to the offering containing material information about the undersigned Registrant or its securities provided by or on behalf of the undersigned registrant; and
|
iv. |
Any other communication that is an offer in the offering made by the undersigned Registrant to the purchaser.
|
|
(7) |
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.
|
ELTEK LTD.
|
|||
By:
|
/s/
Eli Yaffe
|
||
Name: Eli Yaffe
|
|||
Title: Chief Executive Officer
|
ELTEK USA, INC.
|
Authorized Representative in the United States
|
||
By:
|
/s/ Shmuel Wider
|
||
Name: Shmuel Wider
|
|||
Title: Authorized Signatory
|
RIGHTS CERTIFICATE #:
____
|
|
NUMBER OF RIGHTS
|
||
|
THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH IN THE COMPANY'S PROSPECTUS
DATED March 18, 2019 (THE "PROSPECTUS") AND ARE INCORPORATED HEREIN BY REFERENCE. COPIES OF
THE PROSPECTUS ARE AVAILABLE UPON REQUEST FROM D.F. KING & CO., INC., THE INFORMATION AGENT.
|
|
||
Eltek Ltd.
Incorporated under the laws of the State of Israel
TRANSFERABLE SUBSCRIPTION RIGHTS CERTIFICATE
Evidencing Transferable Subscription Rights to Purchase Shares of Class Ordinary Shares of Eltek Ltd.
Subscription Price: $1.464 per Share
THE SUBSCRIPTION RIGHTS WILL EXPIRE IF NOT EXERCISED ON OR BEFORE 5:00 P.M., NEW YORK CITY TIME,
ON April 9, 2019, UNLESS EXTENDED BY THE COMPANY
|
||||
REGISTERED
OWNER:
|
||||
|
||||
|
THIS CERTIFIES THAT the registered owner whose name is inscribed hereon is the owner of the number of transferable subscription rights (“Rights”) set forth above. Each whole Right entitles the holder thereof to subscribe for and purchase one share of Class Ordinary Shares, with a par value of NIS 3.00 per share, of Eltek Ltd., an Israeli corporation, at a subscription price of $1.464 per share (the “Basic Subscription Privilege”), pursuant to a rights offering (the “Rights Offering”), on the terms and subject to the conditions set forth in the Prospectus and the “Instructions as to Use of Eltek Ltd., Subscription Rights Certificates” accompanying this Subscription Rights Certificate. If any shares of Class Ordinary Shares available for purchase in the Rights Offering are not purchased by other holders of Rights pursuant to the exercise of their Basic Subscription Privilege (the “Excess Shares”),
|
|
any Rights holder that exercises its Basic Subscription Privilege in full may subscribe for a number of Excess Shares pursuant to the terms and conditions of the Rights Offering, subject to proration, as described in the Prospectus (the “Over-Subscription Privilege”). The Rights represented by this Subscription Rights Certificate may be exercised by completing Form 1 and any other appropriate forms on the reverse side hereof and by retuning the full payment of the subscription price for each share of Class Ordinary Shares in accordance with the “Instructions as to Use of Eltek Ltd., Subscription Rights Certificates” that accompany this Subscription Rights Certificate.
|
|
|
|
|
|
|
This Subscription Rights Certificate is not valid unless countersigned by the subscription agent and registered by the registrar.
Witness the seal of Eltek Ltd. and the signatures of its duly authorized officers.
Dated: _____ __, 2019
|
||||
|
|
|
|
|
|
|
|
|
|
|
Chief Executive Officer
|
|
Chief Financial Officer
|
|
FORM 1-EXERCISE OF SUBSCRIPTION RIGHTS
To subscribe for shares pursuant to your Basic Subscription Right, please complete lines (a) and (c) and sign under Form 4 below. To subscribe for shares pursuant to your Over-Subscription Right, please also complete line (b) and sign under Form 4 below. To the extent you subscribe for more Shares than you are entitled under either the Basic Subscription Right or the Over-Subscription Right, you will be deemed to have elected to purchase the maximum number of shares for which you are entitled to subscribe under the Basic Subscription Right or Over-Subscription Right, as applicable.
(a) EXERCISE OF BASIC SUBSCRIPTION RIGHT:
I apply for ______________ shares x $1.464 = $_______________
(no. of new shares)
(subscription price) (amount enclosed)
(b) EXERCISE OF OVER-SUBSCRIPTION RIGHT
If you have exercised your Basic Subscription Right in full and wish to subscribe for additional shares for which you are otherwise entitled to subscribe pursuant to your Over-Subscription Right:
I apply for ______________ shares x $1.464 = $_______________
(no. of new shares)
(subscription price) (amount enclosed)
(c) Total Amount of Payment Enclosed = $__________________
METHOD OF PAYMENT (CHECK ONE)
|
|
FORM 3-DELIVERY TO DIFFERENT ADDRESS
If you wish for the Ordinary Shares underlying your subscription rights, a certificate representing unexercised subscription rights or the proceeds of any sale of subscription rights to be delivered to an address different from that shown on the face of this Subscription Rights Certificate, please enter the alternate address below, sign under Form 4 and have your signature guaranteed under Form 5.
________________________________________________________________
________________________________________________________________
________________________________________________________________
FORM 4-SIGNATURE
TO SUBSCRIBE: I acknowledge that I have received the Prospectus for this Rights Offering and I hereby irrevocably subscribe for the number of shares indicated above on the terms and conditions specified in the Prospectus. By signing below I confirm that (1) after giving effect to the exercise of my Rights, I will not beneficially own, as determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended, more than 14.99% of the Company’s outstanding shares of Ordinary Shares (calculated immediately upon the closing of the rights offering after giving effect to the Backstop Commitment, as described in the Prospectus) and (2), if I already beneficially own, as determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended, in excess of 14.99% of the Company’s outstanding shares of Ordinary Shares I will not, via the exercise of the Rights, increase my proportionate interest in the Company’s Ordinary Shares (with respect to (1) or (2), any such excess shares, the “Excess Shares”). With respect to any such Excess Shares, I hereby (1) irrevocably appoint and constitute the Company, each of its authorized officers and their designees, and each of them, with full power of substitution, as my proxy and attorney in fact with full authority to vote and act by written consent with respect to any such Excess Shares on any matter submitted to shareholders for a vote or action by written consent, in the discretion of such proxy, to the same extent I would have the power to vote or act by written consent and (2) grant the Company a right for 90 days from the closing of the rights offering to repurchase such Excess Shares at the lesser of the $1.464 per share subscription price and the closing price of the Company’s Ordinary Shares on the New York Stock Exchange on the trading day immediately prior to the date on which notice is sent to the holder of the Company’s intent to exercise such right, which notice must be sent prior to the expiration of such 90 day period. I agree to cooperate with the Company and provide to the Company any and all information requested by the Company in connection with the exercise of the rights granted in the previous sentence.
Signature(s): ______________________________________________________
IMPORTANT: The signature(s) must correspond with the name(s) as printed on the reverse of this Subscription Rights Certificate in every particular, without alteration or enlargement, or any other change whatsoever.
FORM 5-SIGNATURE GUARANTEE
This form must be completed if you have completed any portion of Forms 2 or 3.
Signature Guaranteed: _______________________________________________
(Name of Bank or Firm)
By:_______________________________________________________________
(Signature of Officer)
IMPORTANT: The signature(s) should be guaranteed by an eligible guarantor institution (bank, stock broker, savings & loan association or credit union) with membership in an approved signature guarantee medallion program pursuant to Securities and Exchange Commission Rule 17Ad-15.
|
|
☐ |
Check or bank draft payable to “American Stock Transfer & Trust Company, LLC as Subscription Agent.”
|
|
|
☐
|
Wire transfer of immediately available funds directly to the account maintained by American Stock Transfer & Trust Company, LLC, as Subscription Agent, for purposes of accepting subscriptions in this Rights Offering at JPMorgan Chase Bank, 55 Water Street, New York, New York 10005, ABA #021000021, Account # 530-354616 American Stock Transfer FBO Eltek Ltd., with reference to the rights holder's name.
|
|
|
|
|
|
|
FORM 2-TRANSFER TO DESIGNATED TRANSFEREE
To transfer your subscription rights to another person, complete this Form 2 and have your signature guaranteed under Form 5.
For value received ______________ of the subscription rights represented by this Subscription Rights Certificate are assigned to:
________________________________________________________________
________________________________________________________________
Social Security # __________________________________________________
Signature(s): ______________________________________________________
IMPORTANT: The signature(s) must correspond with the name(s) as printed on the reverse of this Subscription Rights Certificate in every particular, without alteration or enlargement, or any other change whatsoever.
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
The Company is offering (the “Rights Offering”) to the holders of shares of its ordinary shares, par value NIS 3.00 per share (the “Ordinary Shares”), on
March 18,
2019 (the “Record Date”), the right (“Rights”) to subscribe for units (“Units”), each Unit consisting of
three
Ordinary Share
s (i.e. five (5) subscription rights for every three (3) ordinary shares)
.
Except as set forth in Sections 9 and 10 below, Rights shall cease to be exercisable at 5:00 P.M., New York City time, on
April 9,
2019 or such later date of which the Company notifies the Subscription Agent orally and confirms in writing (the “Expiration Date”). Each Right is being issued for
three
Ordinary Shares held on the Record Date.
One
Right(s) and payment in full of the subscription price of
$1.464 for each Ordinary Share
(the “Subscription Price”) are required to subscribe for one Unit. Rights are evidenced by transferable subscription certificates in registered form (“Subscription Certificates”). Each holder of Subscription Certificate(s) who exercises the holder’s right to subscribe for all Units that can be subscribed for with the Rights evidenced by such Subscription Certificate(s) (the “Basic Subscription Right”) will have the right to subscribe for additional Units, if any, available as a result of any unexercised Rights (such additional subscription right being referred to hereafter as the “Additional Subscription Privileged”). The Rights Offering will be conducted in the manner and upon the terms set forth in the Company’s Prospectus dated
March 18,
2019 (the “Prospectus”).
|
2. |
The Subscription Agent is hereby appointed to affect the Rights Offering as set forth herein. The Subscription Agent may rely on, and shall be protected in acting upon, any certificate, instrument, opinion, representation, notice letter or other document delivered to it and believed by it to be genuine and to have been signed by the proper party or parties.
|
3. |
Enclosed herewith are the following, the receipt of which the Subscription Agent acknowledges by its execution hereof:
|
|
(a) |
a copy of the Prospectus;
|
|
(b) |
the form of Subscription Certificate (with instructions);
|
|
(c) |
resolutions adopted by the board of directors of the Company in connection with the Rights Offering, certified by the secretary of the Company; and
|
|
(d) |
notice of guaranteed delivery (“Notice of Guaranteed Delivery”).
|
4. |
As soon as is reasonably practical, the Subscription Agent shall mail or cause to be mailed to each holder of Ordinary Shares at the close of business on the Record Date a Subscription Certificate evidencing the Rights to which such holder is entitled, a Notice of Guaranteed Delivery, a Prospectus and an envelope addressed to the Subscription Agent. Prior to mailing, the Company shall provide the Subscription Agent with blank Subscription Certificates which the Subscription Agent shall prepare and issue in the names of holders of Ordinary Shares of record at the close of business on the Record Date and for the number of Rights to which they are entitled. The Company shall also provide the Subscription Agent with a sufficient number of copies of each of the documents to be mailed with the Subscription Certificates.
|
5. |
Subscription Procedure.
|
|
(a) |
Upon the Subscription Agent’s receipt prior to 5:00 P.M., New York City time, on the Expiration Date (by mail or delivery) of (i) any Subscription Certificate completed and endorsed for exercise, as provided on the reverse side of the Subscription Certificate (except as provided in Section 9 hereof), and (ii) payment in full of the Subscription Price in U.S. funds by check or bank draft payable at par (without deduction for bank service charges or otherwise) to the order of “American Stock Transfer
& Trust Company, LLC” the Subscription Agent shall as soon as practicable after the Expiration Date, but after performing the procedures described in subsections (b) and (c) below, mail to the subscriber’s registered address on the books of the Company certificates representing the securities underlying each Unit duly subscribed for (pursuant to the Basic Subscription Right and the Additional Subscription Privilege) and furnish a list of all such information to the Company.
|
|
(b) |
As soon as practicable after the Expiration Date the Subscription Agent shall calculate the number of Units to which each subscriber is entitled pursuant to the Additional Subscription Privilege. The Additional Subscription Privilege may only be exercised by holders who subscribe to all the Units that can be subscribed for under the Basic Subscription Right. The Units available for additional subscriptions will be those that have not been subscribed and paid for pursuant to the Basic Subscription Right (the “Remaining Units”). Where there are sufficient Remaining Units to satisfy all additional subscriptions by holders exercising their rights under the Additional Subscription Privilege, each holder shall be allotted the number of Additional Units subscribed for. If the aggregate number of Units subscribed for under the Additional Subscription Privilege exceeds the number of Remaining Units, the number of Remaining Units allotted to each participant in the Additional Subscription Privilege shall be the product (disregarding fractions) obtained by multiplying the number of Remaining Units by a fraction of which the numerator is the number of Units subscribed for by that participant under the Additional Subscription Privilege and the denominator is the aggregate number of Remaining Units subscribed for by all participants under the Additional Subscription Privilege. Any fractional Unit to which persons exercising their Additional Subscription Privilege would otherwise be entitled pursuant to such allocation shall be rounded to the next whole Unit.
|
|
(c) |
Upon calculating the number of Units to which each subscriber is entitled pursuant to the Additional Subscription Privilege and the amount overpaid, if any, by each subscriber, the Subscription Agent shall, as soon as practicable, furnish a list of all such information to the Company.
|
|
(d) |
Upon calculating the number of Units to which each subscriber is entitled pursuant to the Additional Subscription Privilege and assuming payment for the additional Units subscribed for has been delivered, the Subscription Agent shall mail, as contemplated in subsection (a) above, the certificates representing the additional securities which the subscriber has been allotted. If a lesser number of Units is allotted to a subscriber under the Additional Subscription Privilege than the subscriber has tendered payment for, the Subscription Agent shall remit the difference to the subscriber without interest or deduction at the same time as certificates representing the securities allotted pursuant to the Additional Subscription Privilege are mailed.
|
|
(e) |
Funds received by the Subscription Agent pursuant to the Basic Subscription Right and the Additional Subscription Privilege shall be held by it in a segregated account. Upon mailing certificates representing the securities and refunding subscribers for additional Units subscribed for but not allocated, if any, the Subscription Agent shall promptly remit to the Company all funds received in payment of the Subscription Price for Units issued in the Rights Offering. The Subscription Agent will not be obligated to calculate or pay interest to any holder or party.
|
6. |
Until 5:00 P.M., New York City time, on the third Business Day (as defined below) prior to the Expiration Date, the Subscription Agent shall facilitate subdivision or transfers of Subscription Certificates by issuing new Subscription Certificates in accordance with the instructions set forth on the reverse side of the Subscription Certificates. As used in herein, “Business Day” shall mean any day other than a Saturday, a Sunday, or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close.
|
7. |
The Company shall have the absolute right to reject any defective exercise of Rights or to waive any defect in exercise. Unless requested to do so by the Company, the Subscription Agent shall not be under any duty to give notification to holders of Subscription Certificates of any defects or irregularities in subscriptions. Subscriptions will not be deemed to have been made until any such defects or irregularities have been cured or waived within such time as the Company shall determine. The Subscription Agent shall as soon as practicable return Subscription Certificates with the defects or irregularities which have not been cured or waived to the holder of the Rights. If any Subscription Certificate is alleged to have been lost, stolen or destroyed, the Subscription Agent should follow the same procedures followed for lost stock certificates representing Ordinary Shares it uses in its capacity as transfer agent for the Company’s Ordinary Shares.
|
8. |
If prior to 5:00 P.M., New York City time, on the Expiration Date the Subscription Agent receives (i) payment in full of the Subscription Price for the Units being subscribed for and (ii) a guarantee notice substantially in the form of the notice of guaranteed delivery (“Notice of Guaranteed Delivery”) delivered with the Subscription Certificate, from a financial institution having an office or correspondent in the United States, or a member firm of any registered United States national securities exchange or of FINRA stating the certificate number of the Subscription Certificate relating to the Rights, the name and address of the exercising subscriber, the number of Rights represented by the Subscription Certificate held by such exercising subscriber, the number of Units being subscribed for pursuant to the Rights and guaranteeing the delivery to the Subscription Agent of the Subscription Certificate evidencing such Rights within two (2)
NASDAQ Capital Market
trading days (“Trading Days”) following the date of the Notice of Guaranteed Delivery, then the Rights may be exercised even though the Subscription Certificate was not delivered to the Subscription Agent prior to 5:00 P.M., New York City time, on the Expiration Date, provided that within two Trading Days following the date of the Notice of Guaranteed Delivery the Subscription Agent receive the properly completed Subscription Certificate evidencing the Rights being exercised, with signatures guaranteed if required.
|
9. |
If requested, the Subscription Agent shall deliver to the Company copies of the exercised Subscription Certificates in accordance with written directions received from the Company. The Subscription Agent shall deliver to the subscribers who have duly exercised Rights, at their registered addresses certificates representing the securities subscribed for as instructed on the reverse side of the Subscription Certificates.
|
10. |
The Subscription Agent shall notify the Company by telephone on an before the close of business on each Business Day during the period commencing five (5) Business Days after the mailing of the Rights and ending at the Expiration Date (and in the case of guaranteed deliveries ending two (2) Trading Days after the Expiration Date) (a “daily notice”), which notice shall thereafter be confirmed in writing, of (i) the number of Rights exercised on the day covered by such daily notice, (ii) the number of Rights subject to guaranteed exercises on the day covered by such daily notice, (iii) the number of Rights for which defective exercises have been received on the day covered by such daily notice, and (iv) the cumulative total of the information set forth in clauses (i) through (iii) above. At or before 5:00 P.M., New York City time, on the first Trading Day following the Expiration Date the Subscription Agent shall certify in writing to the Company the cumulative total through the Expiration Date of all the information set forth in clauses (i) through (iii) above. At or before 10:00 A.M., New York City time, on the fifth Trading Day following the Expiration Date the Subscription Agent will execute and deliver to the Company a certificate setting forth the number of Rights exercised pursuant to a Notice of Guaranteed Delivery and as to which Subscription Certificates have been timely received. The Subscription Agent shall also maintain and update a listing of holders who have fully or partially exercised their Rights, holders who have transferred their Rights and their transferees, and holders who have not exercised their Rights. The Subscription Agent shall provide the Company or its designees with such information compiled by the Subscription Agent pursuant to this Section 10 as any of them shall request.
|
11. |
With respect to notices or instructions to be provided by the Company hereunder, the Subscription Agent may rely and act on any written instruction signed by any one or more of the following authorized officers or employees of the Company:
|
Name
|
Title
|
Alon Mualem
|
CFO
|
12. |
Whether or not the Rights Offering is consummated (but subject to its launch), the Company agrees to pay the Subscription Agent for services rendered hereunder, as set forth in the schedule attached to this Agreement.
|
13. |
The Subscription Agent may employ or retain such agents (including but not limited to, vendors, advisors and subcontractors) as it reasonably requires to perform its duties and obligations hereunder; may pay reasonable remuneration for all services so performed by such agents (which remuneration shall be included in the Project Fee set forth on Schedule 1 hereto); and, in the case of counsel, may rely on the written advice or opinion of such counsel, which shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by the Subscription Agent hereunder in good faith and in accordance with such advice or opinion. Additionally, the Subscription Agent shall identify, report and deliver any unclaimed property and/or payments to all states and jurisdictions for the Company in accordance with applicable abandoned property law. The Subscription Agent shall also provide information agent services to the Company on terms to be mutually agreed upon by the parties hereto.
|
14. |
The Company hereby covenants and agrees to indemnify, reimburse and hold the Subscription Agent and its officers, directors, employees and agents harmless against any loss, liability or reasonable expense (including legal and other fees and expenses) incurred by the Subscription Agent arising out of or in connection with entering into this Agreement or the performance of its duties hereunder, except for such losses, liabilities or expenses incurred as a result of its gross negligence, bad faith or willful misconduct. The Company shall not be liable under this indemnity with respect to any claim against the Subscription Agent unless the Company is notified of the written assertion of a claim against it, or of any action commenced against it, promptly after it shall have received any such written information as to the nature and basis of the claim; provided, however, that failure by the Subscription Agent to provide such notice shall not relieve the Company of any liability hereunder if no prejudice occurs.
|
15. |
Any notice or communication by the Subscription Agent or the Company to the other is duly given if in writing and delivered in person or via first class mail (postage prepaid), or overnight air courier to the other’s address.
|
16. |
If any provision of this Agreement shall be held illegal, invalid, or unenforceable by any court, this Agreement shall be construed and enforced as if such provision had not been contained herein and shall be deemed an Agreement between us to the full extent permitted by applicable law.
|
17. |
This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to principles of conflicts of law, and shall inure to the benefit of and be binding upon the successors and permitted assigns of the parties hereto.
|
18. |
Neither this Agreement, nor any rights or obligations hereunder, may be assigned by either party without the written consent of the other party. However, the Subscription Agent may assign this Agreement or any rights granted hereunder, in whole or in part, either to affiliates, another division, subsidiaries or in connection with its reorganization or to successors of all or a majority of the Subscription Agent’s assets or business without the prior written consent of the Company.
|
19. |
No provision of this Agreement may be amended, modified or waived, except in writing signed by all of the parties hereto. This Agreement may be executed in counterparts, each of which shall be for all purposes deemed an original, but all of which together shall constitute one and the same instrument.
|
20. |
Nothing herein contained shall amend, replace or supersede any agreement between the Company and the Subscription Agent to act as the Company’s transfer agent, which agreement shall remain of full force and effect.
|
|
Eltek Ltd.
By: ____________________________________
Name:
Title:
|
1.
|
Subscription Rights
.
|
|
Hand delivery
American Stock Transfer & Trust Company, LLC
59 Maiden Lane
New York, New York 10038
Attention: Reorganization Department
|
Mail and Overnight Courier
American Stock Transfer & Trust Company, LLC
6201 15th Avenue
Brooklyn, New York 11219
Attention: Reorganization Department
|
|
a) |
Execution By Registered Holder.
The signature on the Subscription Certificate must correspond with the name of the registered holder exactly as it appears on the face of the Subscription Certificate without any alteration or change whatsoever. Persons who sign the Subscription Certificate in a representative or other fiduciary capacity must indicate their capacity when signing and, unless waived by the Subscription Agent in its sole and absolute discretion, must present to the Subscription Agent satisfactory evidence of their authority so to act.
|
|
b) |
Execution By Person Other Than Registered Holder
. If the Subscription Certificate is executed by a person other than the holder named on the face of the Subscription Certificate, proper evidence of authority of the person executing the Subscription Certificate must accompany the same unless the Subscription Agent, in its discretion, dispenses with proof of authority.
|
|
a) |
Share Certificates
. The Subscription Agent will mail to each validly-exercising Subscription Rights holder who is a record holder certificates representing Ordinary Shares purchased pursuant to the Subscription Right and the Over-Subscription Right.
|
|
b) |
Excess Payments
. If you exercised your Over-Subscription Right and are allocated less than all of the Ordinary Shares for which you wished to over-subscribe, then your excess Subscription Price payment for Ordinary Shares that were not allocated to you will be returned to you by mail, without interest or deduction, as soon as practicable after the Issuance Date.
|
SUBSTITUTE
|
Part 1 -
PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT AND
|
|
TIN:
|
|
|
|
|
Form W-9
|
CERTIFY BY SIGNING AND DATING BELOW
|
|
Social Security Number or
|
Department of the Treasury
|
|
|
Employer Identification Number
|
Internal Revenue Service
|
|||
Payer’s Request for Taxpayer
|
Part 2
- TIN Applied for
☐
|
||
Identification Number (“TIN”)
|
|
|
(1)
|
the number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me);
|
(2)
|
I am not subject to backup withholding either because (a) I am exempt from backup withholding or (b) I have not been notified by the Internal Revenue Service (the “IRS”) that I am subject to backup withholding as a result of a failure to report all interest or dividends or (c) the IRS has notified me that I am no longer subject to backup withholding; and
|
(3)
|
I am a U.S. person (including a U.S. resident alien).
|
SIGNATURE
|
DATE
|
NOTE:
|
FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING ON ANY PAYMENTS MADE TO YOU IN CONNECTION WITH THE RIGHTS OFFERING. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
|
SIGNATURE
|
DATE
|
For this type of account
|
|
Give the SOCIAL SECURITY number of -
|
|
For this type of account
|
|
Give the EMPLOYER IDENTIFICATION number of -
|
1. Individual
|
|
The individual
|
|
6. Sole proprietorship
|
|
The owner3
|
2. Two or more individuals (joint account)
|
|
The actual owner of the account, or if combined funds, the first individual on the account1
|
|
7. A valid trust, estate, or pension trust
|
|
The legal entity4
|
3. Custodian account of a minor (Uniform Gift to Minors Act)
|
|
The minor2
|
|
8. Corporate
|
|
The corporation
|
4. a. The usual revocable savings trust account (grantor is also trustee)
b. So-called trust account that is not a legal or valid trust under state law
|
|
The grantor-trustee1
The actual owner1
|
|
9. Association, club, religious, charitable, educational, or other tax-exempt organization
|
|
The organization
|
5. Sole proprietorship
|
|
The owner
|
|
10. Partnership
|
|
The partnership
|
|
|
|
|
11. A broker or registered nominee
|
|
The broker or nominee
|
|
|
|
|
12. Account with the Department of Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments
|
|
The public entity
|
(1)
|
List first and circle the name of the person whose number you furnish. If only one person on a joint account has a social security number, that person’s number must be furnished.
|
(2)
|
Circle the minor’s name and furnish the minor’s social security number.
|
(3)
|
You must show your individual name, but you may also enter your business or “doing business as” name. You may use either your social security number or your employer identification number (if you have one).
|
(4)
|
List first and circle the name of the legal trust, estate, or pension trust. (Do not furnish the taxpayer identification number of the personal representative or trustee unless the legal entity itself is not designated in the account title).
|
☐
|
An organization exempt from tax under Section 501(a), an individual retirement account (IRA), or a custodial account under Section 403(b)(7), if the account satisfies the requirements of Section 401(f)(2).
|
☐
|
The United States or a state thereof, the District of Columbia, a possession of the United States, or a political subdivision or wholly-owned agency or instrumentality of any one or more of the foregoing.
|
☐
|
An international organization or any agency or instrumentality thereof.
|
☐
|
A corporation.
|
☐
|
A financial institution.
|
☐
|
A dealer in securities or commodities required to register in the United States, the District of Columbia, or a possession of the United States.
|
☐
|
A real estate investment trust.
|
☐
|
A common trust fund operated by a bank under Section 584(a).
|
☐
|
An entity registered at all times during the tax year under the Investment Company Act of 1940.
|
☐
|
A middleman known in the investment community as a nominee or who is listed in the most recent publication of the American Society of Corporate Secretaries, Inc., Nominee List.
|
☐
|
A futures commission merchant registered with the Commodity Futures Trading Commission.
|
☐
|
A foreign central bank of issue.
|
☐
|
Payments to nonresident aliens subject to withholding under Section 1441.
|
☐
|
Payments to partnerships not engaged in a trade or business in the United States and that have at least one nonresident alien partner.
|
☐
|
Payments of patronage dividends not paid in money.
|
☐
|
Payments made by certain foreign organizations.
|
☐
|
Section 404(k) payments made by an ESOP.
|
☐
|
Payments of interest on obligations issued by individuals. Note: You may be subject to backup withholding if this interest is $600 or more and you have not provided your correct taxpayer identification number to the payer.
|
☐
|
Payments of tax-exempt interest (including exempt- interest dividends under Section 852).
|
☐
|
Payments described in Section 6049(b)(5) to nonresident aliens.
|
☐
|
Payments on tax-free covenant bonds under Section 1451.
|
☐
|
Payments made by certain foreign organizations.
|
☐
|
Mortgage interest paid to you.
|
(1)
|
Failure to Furnish Taxpayer
Identification Number -
If you fail to furnish your taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect.
|
(2)
|
Civil Penalty for False Information With Respect to Withholding -
If you make a false statement with no reasonable basis that results in no backup withholding, you are subject to a $500 penalty.
|
(3)
|
Criminal Penalty for Falsifying Information -
Willfully falsifying certificates or affirmations may subject you to criminal penalties including fines and/or imprisonment.
|
|
☐
|
You will receive five non-transferable subscription right for every three Ordinary Share you hold of record at the close of business on March 18, 2019. We will not issue fractional subscription rights or cash in lieu of fractional subscription rights. Fractional subscription rights will be rounded down to the nearest whole number
.
|
|
☐
|
You may purchase one ordinary share, par value NIS 3.00 of Eltek Ltd. (“Ordinary Share”) for each whole subscription right you receive at a subscription price of $1.464 per share.
|
|
☐
|
If you exercise in full the subscription rights issued to you, you may subscribe for additional ordinary shares through the Over-Subscription right, as more fully described in the prospectus supplement.
|
|
☐
|
The Rights Offering will expire at 5:00 p.m., New York City Time (midnight, Israel time), on April 9, 2019. We may not extend the expiration date of the Rights Offering. If you do not exercise your subscription rights before that time, they will expire and will have no monetary value.
|
|
☐
|
You cannot revoke or change the exercise of either your Subscription Rights or Over-Subscription Rights.
|
|
☐
|
If your Ordinary Shares are held in the name of a bank, dealer or other nominee, you must contact your bank, dealer or other nominee if you wish to participate in the Rights Offering.
|
|
Very truly yours,
ELTEK LTD.
|
|
1.
|
Prospectus;
|
|
2.
|
Subscription Rights Certificate;
|
|
3.
|
Instructions as to Use of Subscription Certificates;
|
|
4.
|
Form of Letter to Clients of Nominee Holders;
|
|
5.
|
Form of Beneficial Owner Election Form; and
|
|
6.
|
Form of Nominee Holder Certification.
|
|
Very truly yours,
ELTEK LTD.
|
|
☐
|
You will receive five non-transferable subscription right for every three Ordinary Shares you hold of record at the close of business on March 18, 2019. Fractional subscription rights will be rounded down to the nearest whole number.
|
|
☐
|
You may purchase five ordinary share, par value NIS 3.00 of Eltek (“Ordinary Share”) for each whole subscription right you receive at a subscription price of $1.464 per share.
|
|
☐
|
The Rights Offering will expire at 5:00 p.m., New York City Time (midnight, Israeli time), on April 9, 2019 (the “Expiration Date”). If you do not exercise your subscription rights before that time, they will expire and will have no monetary value.
|
|
☐
|
You cannot revoke your exercise of your subscription rights at any time prior to the expiration of the Rights Offering.
|
|
Very truly yours,
[ ]
|
|
Number of Ordinary Shares
|
|
|
Per Share Subscription Price
|
|
Payment
|
|
|
Subscription Right:
|
|
x
|
$
|
1.464
|
=
|
$
|
|
|
|
|
|
|
|||||
Over-Subscription Right:
|
|
x
|
$
|
1.464
|
=
|
$
|
|
|
|
|
|
|
|||||
Total Payment Required:
|
|
$
|
|
|
|
|
|
|
Type of Account
|
|
Account No.
|
|
|
|
|
|
Amount to be deducted:
|
$
|
|
|
|
|
|
|
Date:
|
|
|
|
|
|
|
|
|
|
Signature(s)
|
|
|
|
||
|
|
Please type or print name(s) below
|
|
|
|
|
|
Number of Shares Owned on the
Record Date
|
|
Number of Shares Subscribed for
Pursuant to Subscription Right
|
|
Number of Shares Subscribed for
Pursuant to Over-Subscription Right
|
1.
|
|
|
|
|
|
2.
|
|
|
|
|
|
3.
|
|
|
|
|
|
4.
|
|
|
|
|
|
Name of Nominee Holder | DTC Participant Number | ||||
By: | |||||
Name: | DTC Basic Subscription Confirmation Numbers | ||||
Title: | |||||
Phone Number: | |||||
Fax Number: |
Dated:
|
Tel-Aviv, Israel
|
/s/Kost Forer Gabbay & Kasierer
KOST FORER GABBAY & KASIERER
|
March 7, 2019
|
A Member of Ernst & Young Global
|