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As Of Filer Filing For·On·As Docs:Size Issuer Agent 5/07/15 Medigus Ltd. 20FR12B 24:8.2M Z-K Global Ltd/FA |
Document/Exhibit Description Pages Size 1: 20FR12B 20-F HTML 1.92M 2: EX-1.1 Underwriting Agreement -- exhibit_1-1 HTML 203K 3: EX-2.1 Plan of Acquisition, Reorganization, Arrangement, HTML 271K Liquidation or Succession -- exhibit_2-1 4: EX-2.2 Plan of Acquisition, Reorganization, Arrangement, HTML 119K Liquidation or Succession -- exhibit_2-2 5: EX-2.3 Plan of Acquisition, Reorganization, Arrangement, HTML 125K Liquidation or Succession -- exhibit_2-3 6: EX-2.4 Plan of Acquisition, Reorganization, Arrangement, HTML 118K Liquidation or Succession -- exhibit_2-4 7: EX-2.5 Plan of Acquisition, Reorganization, Arrangement, HTML 14K Liquidation or Succession -- exhibit_2-5 8: EX-4.1 Instrument Defining the Rights of Security Holders HTML 329K -- exhibit_4-1 17: EX-4.10 Instrument Defining the Rights of Security Holders HTML 154K -- exhibit_4-10 18: EX-4.11 Instrument Defining the Rights of Security Holders HTML 85K -- exhibit_4-11 19: EX-4.12 Instrument Defining the Rights of Security Holders HTML 38K -- exhibit_4-12 20: EX-4.13 Instrument Defining the Rights of Security Holders HTML 23K -- exhibit_4-13 21: EX-4.14 Instrument Defining the Rights of Security Holders HTML 17K -- exhibit_4-14 22: EX-4.15 Instrument Defining the Rights of Security Holders HTML 94K -- exhibit_4-15 9: EX-4.2 Instrument Defining the Rights of Security Holders HTML 201K -- exhibit_4-2 10: EX-4.3 Instrument Defining the Rights of Security Holders HTML 301K -- exhibit_4-3 11: EX-4.4 Instrument Defining the Rights of Security Holders HTML 270K -- exhibit_4-4 12: EX-4.5 Instrument Defining the Rights of Security Holders HTML 35K -- exhibit_4-5 13: EX-4.6 Instrument Defining the Rights of Security Holders HTML 130K -- exhibit_4-6 14: EX-4.7 Instrument Defining the Rights of Security Holders HTML 151K -- exhibit_4-7 15: EX-4.8 Instrument Defining the Rights of Security Holders HTML 151K -- exhibit_4-8 16: EX-4.9 Instrument Defining the Rights of Security Holders HTML 154K -- exhibit_4-9 23: EX-8.1 Exhibit 4.16 HTML 12K 24: EX-15.1 Letter re: Unaudited Interim Financial Information HTML 13K -- exhibit_15-1
x
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REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended ______________
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report………………..
For the transition period from to
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N/A
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ISRAEL
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(Translation of Registrant’s name into English)
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(Jurisdiction of incorporation or organization)
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Large accelerated filer o
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Accelerated filer o
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Non-accelerated filer x
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PAGE
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●
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references to “Medigus,” the “Company,” “us,” “we” and “our” refer to Medigus Ltd. (the “Registrant”), an Israeli company, and its consolidated subsidiary
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●
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references to “ordinary shares,” “our shares” and similar expressions refer to the Registrant’s Ordinary Shares, NIS 0.01 nominal (par) value per share
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●
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references to “ADS” refer to American Depositary Shares
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●
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references to “dollars,” “U.S. dollars” and “$” are to United States Dollars
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●
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references to “NIS” are to New Israeli Shekels, the Israeli currency
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●
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references to the “Companies Law” are to Israel’s Companies Law, 5759-1999, as amended
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●
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references to the “SEC” are to the United States Securities and Exchange Commission
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●
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References to MUSE™ refer to the trade name of an endoscopy system developed by the Company which is intended as a minimally invasive treatment for Gastroesophageal Reflux Disease (“GERD”). It should be noted that this term may refer to both versions of the system, according to the applicable context. MUSE™ II is second version of the MUSE™ system. The system was previously called “SRS.”
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|
●
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References to “endoscopy” are to a medical procedure which is used to diagnose or treat various diseases using an endoscope (a flexible tube which contains lighting features, imaging features and a system used to direct the endoscope within bodily systems)
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·
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general market, political, reimbursement and economic conditions in the countries in which we operate;
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·
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those factors referred to in “Item 3. Key Information – D. Risk Factors,” “Item 4. Information on the Company,” and “Item 5. Operating and Financial Review and Prospects”, as well as in this registration statement on Form 20-F generally.
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Name
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Position(s)
|
|
Dr. Nissim Darvish
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Chairman of the Board of Directors
|
|
Chief Executive Officer, Director
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||
Ori Hershkovitz
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External Director
|
|
Efrat Venkert
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External Director
|
|
Prof. Gabby Sarusi
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External Director
|
|
Anat Naschitz
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Director
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Name
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Position(s)
|
|
Chief Executive Officer, Director
|
||
Chief Financial Officer
|
||
Thomas A. Dempsey
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VP U.S
|
|
Milena Ridl
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VP Europe
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|
Minelu (Menashe) Sonnenschein
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VP Israel Operations
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Yaron Silberman
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VP Sales and Marketing
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Avraham Ben-Tzvi
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General Counsel and Company Secretary
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Dr. Aviel Roy Shapira
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Medical Director
|
Consolidated Statements Of Operations Data:(1)
|
Year Ended December 31,
|
|||||||||||||||||||||||
NIS |
U.S.$(1)
|
|||||||||||||||||||||||
2010
|
2011
|
2012
|
2013
|
2014
|
2014
|
|||||||||||||||||||
Revenues
|
1,345 | 1,796 | 2,999 | 2,498 | 2,664 |
685
|
||||||||||||||||||
Cost of revenues
|
634 | 808 | 1,161 | 1,126 | 1,252 |
322
|
||||||||||||||||||
Gross Profit
|
711 | 988 | 1,838 | 1,372 | 1,412 |
363
|
||||||||||||||||||
Research and development, expenses net
|
9,438 | 9,031 | 7,752 | 8,180 | 14,401 |
3,703
|
||||||||||||||||||
Sales and marketing expenses
|
651 | 1,179 | 1,784 | 3,234 | 8,353 |
2,148
|
||||||||||||||||||
General and administrative expenses
|
4,801 | 4,802 | 4,694 | 6,877 | 8,206 |
2,110
|
||||||||||||||||||
Other income, net
|
957 | 221 | 214 | 666 | 941 |
242
|
||||||||||||||||||
Operating loss
|
(13,222 | ) | (13,803 | ) | (12,178 | ) | (16,253 | ) | (28,607 | ) | (7,356 | ) | ||||||||||||
Gain on adjusting warrants to fair value
|
144 | - | - | 11,544 | 3,605 |
927
|
||||||||||||||||||
Finance income (expenses) – net
|
(88 | ) | (120 | ) | (161 | ) | (395 | ) | 2,386 |
614
|
||||||||||||||
Loss before income tax
|
(13,166 | ) | (13,923 | ) | (12,339 | ) | (5,104 | ) | (22,616 | ) | (5,815 | ) | ||||||||||||
Income taxes
|
- | - | 85 | (85 | ) | (13 | ) | (3 | ) | |||||||||||||||
Net loss
|
(13,166 | ) | (13,923 | ) | (12,254 | ) | (5,189 | ) | (22,629 | ) | (5,818 | ) | ||||||||||||
Basic and diluted loss per ordinary share
|
(0.18 | ) | (0.18 | ) | (0.14 | ) | (0.04 | ) | (0.12 | ) | (0.03 | ) | ||||||||||||
Number of ordinary shares used in computing basic and diluted loss per ordinary share
|
70,713,381 | 75,151,307 | 86,983,591 | 130,199,164 | 194,997,145 |
194,997,145
|
(1)
|
Calculated using the exchange rate reported by the Bank of Israel for December 31, 2014 at the rate of one U.S. dollar per NIS 3.889.
|
As of December 31,
|
||||||||||||||||||||||||
2011
|
2012
|
2013
|
2014
|
2014
|
||||||||||||||||||||
NIS
|
U.S.$(1)
|
|||||||||||||||||||||||
Balance Sheet Data:
|
||||||||||||||||||||||||
Cash and cash equivalents
|
1,664 | 1,183 | 13,412 | 23,926 | 42,067 | 10,817 | ||||||||||||||||||
Short-term investments
|
8,073 | |||||||||||||||||||||||
Financial assets at fair value through profit or loss
|
11,806 | 7,355 | 1,080 | 7,958 | 8,187 | 2,105 | ||||||||||||||||||
Total assets
|
16,094 | 11,797 | 6,679 | 45,200 | 55,579 | 14,291 | ||||||||||||||||||
Total non-current liabilities
|
1,055 | 953 | 1,578 | 3,070 | 809 | 208 | ||||||||||||||||||
Accumulated deficit
|
(75,876 | ) | (89,666 | ) | (101,887 | ) | (107,076 | ) | (129,810 | ) | (33,379 | ) | ||||||||||||
Total shareholders’ equity
|
11,494 | 7,326 | 2,938 | 38,750 | 50,756 | 13,051 |
(1)
|
Calculated using the exchange rate reported by the Bank of Israel for December 31, 2014 at the rate of one U.S. dollar per NIS 3.889.
|
NIS per U.S. $
|
||||||||||||||||
Year Ended December 31,
|
High
|
Low
|
Average
|
Period End
|
||||||||||||
2014 |
3.994
|
3.402
|
3.577
|
3.889
|
||||||||||||
2013
|
3.728 | 3.471 | 3.601 | 3.471 | ||||||||||||
2012
|
4.028 | 3.715 | 3.844 | 3.733 | ||||||||||||
2011
|
3.821 | 3.395 | 3.582 | 3.821 | ||||||||||||
2010
|
3.875 | 3.549 | 3.732 | 3.549 |
As of December 31, 2014
|
||||||||
(NIS in thousands)
|
(U.S.$ in
thousands)(1)
|
|||||||
Stock warrants at fair value
|
428
|
110
|
||||||
Liability for employees benefits
|
381
|
98
|
||||||
Shareholders’ equity:
|
||||||||
Ordinary shares
|
2,499
|
643
|
||||||
Share premium
|
170,741
|
43,903
|
||||||
Capital reserve for share-based payment transactions
|
2,434
|
626
|
||||||
Other reserves
|
2,064
|
531
|
||||||
Receipts on account of warrants
|
2,828
|
727
|
||||||
Accumulated loss
|
(129,810)
|
(33,379)
|
||||||
Total shareholder’s equity
|
50,756
|
13,051
|
||||||
Total capitalization (debt and equity)
|
55,579
|
14,291
|
(1)
|
Calculated using the exchange rate reported by the Bank of Israel for December 31, 2014 at the rate of one U.S. dollar per NIS 3.889.
|
·
|
refusing or delaying requests for 510(k) marketing clearance or PMA approvals of new products or modified products;
|
·
|
announcements by us of significant acquisitions, strategic partnerships, in-licensing, out-licensing, joint ventures or capital commitments;
|
·
|
changes in estimates or recommendations by securities analysts, if our ordinary shares or the ADSs are covered by analysts;
|
·
|
general market conditions and other factors, including factors unrelated to our operating performance.
|
Revenues
|
||||||||||||
(Thousands of NIS)
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Sales of Miniature Cameras (Visual segment)
|
2,336 | 2,451 | 2,937 | |||||||||
Sales of the MUSE™ System (MUSE segment)
|
328 | 47 | 62 | |||||||||
Total
|
2,664 | 2,498 | 2,999 |
Revenues
|
||||||||||||
(Thousands of NIS)
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
United States
|
1,645 | 1,631 | 1,906 | |||||||||
Europe
|
404 | 237 | 176 | |||||||||
Asia
|
481 | 495 | 660 | |||||||||
Other
|
134 | 135 | 257 | |||||||||
Total
|
2,664 | 2,498 | 2,999 |
·
|
The distributor must obtain all local approvals required to import and market the systems in the relevant country;
|
·
|
A preliminary distribution period of one to several years is determined, after which the agreement is automatically renewed for one year periods, unless one party notifies the other regarding the termination of the agreement;
|
·
|
The distributor undertakes to market the systems in accordance with an annual plan coordinated with us, and serves as a service center for the systems in that country; and
|
·
|
The distributor undertakes to purchase a minimum quantity of systems throughout the preliminary period of the agreement.
|
·
|
product benefits, including the ability to offer users (both physicians and patients) a solution for treatment of GERD using endoscopic-based methods;
|
·
|
the cost of product offerings and the availability of product coverage and reimbursement from third-party payors, insurance companies and other parties;
|
·
|
the ability to deliver new product offerings and enhanced technology to expand or improve upon existing applications through continued research and development;
|
·
|
post-marketing surveillance, complaint handling, medical device reporting, reporting of deaths, serious injuries or device malfunctions and repair or recall of products.
|
·
|
product listing and establishment registration, which helps facilitate FDA inspections and other regulatory action;
|
·
|
QSR, which requires manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all phases of the design and manufacturing process;
|
·
|
labeling regulations and FDA prohibitions against the promotion of products for uncleared, unapproved or off-label use or indication;
|
·
|
clearance of product modifications that could significantly affect safety or efficacy or that would constitute a major change in intended use of one of our cleared devices;
|
·
|
approval of product modifications that affect the safety or effectiveness of one of our approved devices;
|
·
|
post-market surveillance regulations, which apply, when necessary, to protect the public health or to provide additional safety and effectiveness data for the device;
|
·
|
the FDA’s recall authority, whereby it can ask, or under certain conditions order, device manufacturers to recall from the market a product that is in violation of governing laws and regulations; and
|
·
|
customer notifications or repair, replacement, refunds, recall, detention or seizure of our products;
|
·
|
refusing or delaying requests for 510(k) marketing clearance or PMA approvals of new products or modified products;
|
|
(i)
|
The property rights to information which has been developed belongs to the Consortium member that developed it. However, the developing entity is obligated to provide the other members in the Consortium a license for the use of the new information, without consideration, provided that the other members do not transfer such information to any entity which is not a member of the Consortium. The provision of a license or of the right to use the new information to a third party is subject to approval by the administration of the MAGNET Program at the OCS.
|
|
(ii)
|
The Company is entitled to register a patent for the new information which has been developed by it within the framework of its activity in the Consortium. The foregoing registration does not require approval from the administration; and
|
|
(iii)
|
The know-how and technology developed under the program is subject to the restrictions set forth under the R&D Law, including restrictions on the transfer of such know-how and any manufacturing rights with respect thereto, without first obtaining the approval of the OCS. Such approval may entail additional payments to the OCS, as determined under the R&D Law and regulations, and as further detailed above.
|
Program Type
|
Product
|
Grants Received from the Chief Scientist (in thousands of NIS)
|
Bonus Repayment Terms; Special Terms
|
|||
2012
|
2013
|
2014
|
Total (including previous years)
|
|||
Bio Medical Photonics Consortium
|
Production of generic technology, partial development of miniature cameras
|
1,487
|
304
|
0
|
8,636
|
There is no requirement to pay royalties with respect to such grant.
|
Collaboration within the framework of the Eurekaorganization
|
Miniature endoscope for dental implants*
|
204
|
380
|
0
|
794
|
Royalties at a rate of 3%-5% from the sales of the relevant device, up to the repayment of the grant, with the addition of interest and linkage. The repayment terms are not dependent upon a timetable.
|
|
*
|
The Company estimates the probability that it will receive income from the miniature endoscope for dental implants to be low. There have been no sales and therefore no royalties were reported or paid to the OCS to date. Therefore, the Company has not created a liability in its financial statements in respect of payment of future royalties to the OCS.
|
·
|
In June 2014, we signed private equity placement agreements in an aggregate amount of approximately $11.1 million including shares and warrants. The offerings closed in August 2014. Approximately half of the amount was raised from Israeli investors, with the largest portion coming from entities within the Migdal Insurance Group, and with the remainder consisting of U.S institutional investors Sabby Management, Armistice Capital and Senvest. OrbiMed Israel Partners Limited Partnership ("OrbiMed"), our controlling shareholder, also participated. See "Item 10. Additional Information – C. Material Contracts".
|
·
|
In October 2013, pursuant to a shelf prospectus in Israel, we raised approximately $7 million through an issuance of shares and warrants to the public. See "Item 10. Additional Information – C. Material Contracts".
|
·
|
In February 2013, OrbiMed completed an investment of $8 million. See “Item 10. Additional Information – C. Material Contracts” of this Registration Statement on Form 20-F.
|
·
|
We received FDA clearance May 2012 for our original MUSE™ system and in March 2014 for our modified MUSE™ system.
|
·
|
The significant risks and yields that are derived from the ownership of the goods have been transferred to the purchaser;
|
For the Year Ended December 31,
|
||||||||||||||||
2013
|
||||||||||||||||
United States
|
1,645 | 62 | % | 1,631 | 65 | % | ||||||||||
Europe
|
404 | 15 | % | 237 | 10 | % | ||||||||||
Asia
|
481 | 18 | % | 495 | 20 | % | ||||||||||
Other
|
134 | 5 | % | 135 | 5 | % | ||||||||||
Total
|
2,664 | 100 | % | 2,498 | 100 | % |
2014
|
2013
|
|||||||||||||||
MUSE segment
|
328 | 12 | % | 47 | 2 | % | ||||||||||
Visual segment
|
2,336 | 88 | % | 2,451 | 98 | % | ||||||||||
Total
|
2,664 | 100 | % | 2,498 | 100 | % |
(i)
|
during the year ended December 31, 2013 we recorded revenues for development services provided to a customer in the amount of approximately NIS 323 thousand (see ‘Customer A’ in note 19e to our financial statements for the year ended December 31, 2014).We did not receive any revenue from this customer during the year ended December 31, 2014; and
|
(ii)
|
during the year ended December 31, 2013 we recorded revenues from equipment sales to a customer in the amount of approximately NIS 536 thousand (see ‘Customer B’ in note 19e to our financial statements for the year ended December 31, 2014) compared to revenues from this client of approximately NIS 169 thousand recorded for the year ended December 31,2014. The decrease in revenues of NIS 367 thousand was primarily due to decrease in the quantity of products sold ; and
|
(iii)
|
during the year ended December 31, 2013 we recorded revenues from equipment sales to a customer in the amount of approximately NIS 93 thousand (see ‘Customer D’ in note 19e to our financial statements for the year ended December 31, 2014) . We did not receive any revenue from this customer during the year ended December 31, 2014; and
|
(iv)
|
during the year ended December 31, 2014, we recorded revenues of approximately NIS 370 thousand from the termination of an agreement with a customer (see note 12b to our financial statements for the year ended December 31, 2014) compared to revenues under this agreement of approximately NIS 185 thousand recorded for the year ended December 31, 2013; and
|
(v)
|
during the year ended December 31, 2014 we recorded revenues for development services provided to a customer in the amount of approximately NIS 443 thousand (see ‘Customer F’ in note 19e to our financial statements for the year ended December 31, 2014) . We did not receive any revenue from this customer during the year ended December 31, 2013.
|
For the Year Ended December 31,
|
||||||||||||||||
2013
|
Increase
|
|||||||||||||||
(in thousands, NIS)
|
%
|
|||||||||||||||
Research and development expenses, net
|
14,401 | 8,180 | 6,221 | 76 | ||||||||||||
Selling and marketing
|
8,353 | 3,234 | 5,119 | 158 | ||||||||||||
General and Administrative
|
8,206 | 6,877 | 1,329 | 19 | ||||||||||||
Other income, net
|
941 | 666 | 275 | 41 | ||||||||||||
Total operating expenses, net
|
30,019 | 17,625 | 12,394 | 70 |
For the Year Ended December 31,
|
||||||||
2013
|
||||||||
(in thousands, NIS)
|
||||||||
Research and Development cost
|
14,401 | 8,634 | ||||||
Less:
|
||||||||
Grants and participation from the OCS
|
--- | (454 | ) | |||||
Research and Development Expenses, Net
|
14,401 | 8,180 |
For the Year Ended December 31,
|
||||||||||||||||
2012
|
||||||||||||||||
United States
|
1,631 | 65 | % |
1,906
|
64 | % | ||||||||||
Europe
|
237 | 10 | % | 176 | 6 | % | ||||||||||
Asia
|
495 | 20 | % |
660
|
22 | % | ||||||||||
Other
|
135 | 5 | % | 257 | 8 | % | ||||||||||
Total
|
2,498 | 100 | % | 2,999 | 100 | % |
2013
|
2012
|
|||||||||||||||
MUSE segment
|
47 | 2 | % | 62 | 2 | % | ||||||||||
Visual segment
|
2,451 | 98 | % | 2,937 | 98 | % | ||||||||||
Total
|
2,498 | 100 | % | 2,999 | 100 | % |
(i)
|
a significant customer in 2012 who accounted for revenue of NIS 599 thousand and did not account for any revenue in 2013 (see ‘Customer C’ in note 19e to our financial statements for the year ended December 31, 2014), which was partially offset by a second significant customer who accounted for revenue of approximately NIS 323 thousand in 2013 compared to revenue of approximately NIS 143 thousand from this customer in 2012 (see ‘Customer A’ in note 19e to our financial statements for the year ended December 31, 2014); and
|
(i)
|
the gross profit margin in the transaction with ‘Customer C’ referenced above (which accounted for approximately 20% of our revenues in 2012 but which did not recur in 2013) was higher than the average gross profit margin of our product sales in 2012;
|
(ii)
|
during 2013 we recorded a gross loss with respect to sales of our MUSE products in the amount of approximately NIS 126 thousand, compared to a gross loss of NIS 28 thousand recorded for the sales of the MUSE products in 2012. The increase of our gross loss for the MUSE products was due to our commitment to send company staff (technicians and/or medical advisors) to accompany initial procedures for purposes of support and training; and |
For the Year Ended December 31,
|
||||||||||||||||
2012
|
Increase
|
|||||||||||||||
(in thousands, NIS)
|
%
|
|||||||||||||||
Research and development expenses, net
|
8,180 | 7,752 | 428 | 6 | ||||||||||||
Selling and marketing
|
3,234 | 1,784 | 1,450 | 81 | ||||||||||||
General and Administrative
|
6,877 | 4,694 | 2,183 | 47 | ||||||||||||
Other income, net
|
666 | 214 | 452 | 211 | ||||||||||||
Total operating expenses, net
|
17,625 | 14,016 | 3,609 | 26 |
For the Year Ended December 31,
|
||||||||
2012
|
||||||||
(in thousands, NIS)
|
||||||||
Research and Development cost
|
8,634 | 9,102 | ||||||
Less:
|
||||||||
Grants and participation from the OCS
|
(454 | ) | (1,350 | ) | ||||
Research and Development Expenses, Net
|
8,180 | 7,752 |
·
|
the costs and timing of regulatory clearance or approvals for new products or upgrades or changes to our products;
|
·
|
the expenses we incur in complying with domestic or foreign regulatory requirements imposed on medical device companies;
|
·
|
the costs of filing, prosecuting, defending and enforcing any patent or license claims and other intellectual property rights;
|
·
|
the terms and timing of any collaborative, licensing, or other arrangements that we may establish;
|
Total
|
Less than 1 year
|
1 – 3 years
|
3+ years
|
|||||||||||||
(NIS, in thousands)
|
||||||||||||||||
Car lease obligations
|
276 | 156 | 120 | |||||||||||||
Premises leasing obligations
|
1,051 | 404 | 647 | |||||||||||||
Total
|
1,327 | 560 | 767 |
Name
|
Age
|
Position(s)
|
||
Dr. Nissim Darvish
|
50
|
Chairman of the Board of Directors
|
||
53
|
Chief Executive Officer, Director
|
|||
Ori Hershkovitz (1)
|
40
|
External Director
|
||
Efrat Venkert(1)
|
49
|
External Director
|
||
Prof. Gabby Sarusi(1)
|
56
|
External Director
|
||
Anat Naschitz
|
47
|
Director
|
Name
|
Age
|
Position(s)
|
||
53
|
Chief Executive Officer, Director
|
|||
49
|
Chief Financial Officer
|
|||
Thomas A. Dempsey
|
49
|
VP U.S
|
||
Milena Ridl
|
47
|
VP Europe
|
||
Minelu (Menashe) Sonnenschein
|
50
|
VP Israel Operations
|
||
Yaron Silberman
|
45
|
VP Sales and Marketing
|
||
Avraham Ben-Tzvi
|
44
|
General Counsel and Company Secretary
|
||
Aviel Roy Shapira
|
64
|
Medical Director
|
Annual Compensation
|
Long-Term Compensation
|
|||||||||||||||
NIS in thousands
|
||||||||||||||||
Name and Position(s)
|
Salary and Related Benefits*
|
Bonus
|
Shares Underlying Options**
|
Total
|
||||||||||||
CEO, Director (1)
|
1,346 | 525 | 685 | 2,556 | ||||||||||||
CFO
|
580 | 50 | 58 | 688 | ||||||||||||
Elazar Sonnenschein
VP Global Operations (2)
|
745 | 401 | (14 | ) | 1,132 | |||||||||||
Minelu (Menashe) Sonnenschein
VP Israel Operations
|
574 | 61 | 33 | 668 | ||||||||||||
Aviel Roy Shapira
Medical Director
|
158 | 6 | 7 | 171 | ||||||||||||
Milena Ridl
VP Europe
|
998 | 95 | 4 | 1,097 | ||||||||||||
Thomas A. Dempsey
VP U.S(3)
|
931 | 197 | 11 | 1,139 |
***
|
Bonus amounts represent the amounts accrued as of the date hereof with respect to the year ended December 31, 2014
|
(1)
|
Mr. Rowland began serving as a director on March 3, 2013 and as CEO on October 1, 2013. On December 23, 2014, Mr. Rowland was re-elected for service as a director until our next annual general meeting. In addition to the amounts listed on the table above which represents CEO compensation, Mr. Rowland received NIS 43 thousand for his services as a director of the Company.
|
(2)
|
Dr. Elazar Sonnenschein served as a member of our board of directors until March 3, 2013, as our CEO until September 30, 2013, and as our V.P. Global Operations until May 31, 2014, when he resigned from office pursuant to his termination of his agreement with us. He currently does not hold any position with us.
|
(3)
|
Mr. Dempsey began his employment on Apri1 1, 2014. Prior to such date we had engaged his services under a consulting services agreement from November 1, 2013. The above amounts in the table include services fees paid to Mr. Dempsey under such agreement between January 1, 2014 and March 31, 2014.
|
|
·
|
the director holds an academic degree in one of these areas: economics, business administration, accounting, law or public administration;
|
|
·
|
the director holds an academic degree or has other higher education, all in the main business sector of the company or in a relevant area for the board position; or
|
|
·
|
the director has at least five years’ experience in one or more of the following (or a combined five years’ experience in at least two or more of these): (a) senior management position in a corporation of significant business scope; (b) senior public office or senior position in the public sector; or (c) senior position in the main business sector of the company.
|
|
·
|
accounting issues and accounting control issues characteristic to the segment in which the company operates and to companies of the size and complexity of the company;
|
|
·
|
preparation of financial reports and their approval in accordance with the Companies Law and the Israeli Securities Law.
|
|
·
|
service as an office holder, excluding service as a director of a private company prior to the first offering of its shares to the public if such director was appointed as a director of the private company in order to serve as an external director following the initial public offering.
|
|
·
|
at least a majority of the shares held by shareholders who are not controlling shareholders and do not have personal interest in the appointment (excluding a personal interest that did not result from the shareholder’s relationship with the controlling shareholder) have voted in favor of the proposal (shares held by abstaining shareholders shall not be considered); or
|
|
·
|
the total number of shares of such shareholders voted against the election of the external director does not exceed 2% of the aggregate voting rights of our company.
|
|
·
|
information on the advisability of a given action brought for his approval or performed by him by virtue of his position; and
|
|
·
|
refrain from any conflict of interest between the performance of his duties in the company and his performance of his other duties or personal affairs;
|
|
·
|
refrain from exploiting any business opportunity of the company to receive a personal gain for himself or others; and
|
|
·
|
disclose to the company any information or documents relating to the company’s affairs which the office holder has received due to his position as an office holder.
|
|
·
|
the office holder acts in good faith and the act or its approval does not cause harm to the company; and
|
|
·
|
the office holder disclosed the nature of his or her interest in the transaction (including any significant fact or document) to the company at a reasonable time before the company’s approval of such matter.
|
|
·
|
any corporation in which the office holder or his or her relatives holds 5% or more of the shares or voting rights, serves as a director or general manager or has the right to appoint at least one director or the general manager.
|
|
·
|
at least a majority of the shares held by shareholders who have no personal interest in the transaction and are voting at the meeting must be voted in favor of approving the transaction, excluding abstentions; or
|
|
·
|
the shares voted by shareholders who have no personal interest in the transaction who vote against the transaction represent no more than 2% of the voting rights in the company.
|
|
·
|
the approval of related party transactions and acts of office holders that require shareholder approval.
|
|
1.
|
recommends to the board of directors to recommend to our shareholders to appoint and approve the compensation of the independent registered public accounting firm engaged to audit our financial statements;
|
|
2.
|
monitors deficiencies in the management of the Company, inter alia, in consultation with the independent registered public accounting firm and internal auditor, and advises the board of directors on how to correct such deficiencies;
|
|
3.
|
decides whether to approve and recommend to the board of directors to approve engagements or transactions that require the audit committee’s approval under the Companies Law relating generally to certain related party transactions. The audit committee must pre-determine procedures for a competitive process, or other procedures, before approving related party transactions with controlling shareholders, even if such transactions are deemed by the audit committee not to be extraordinary transactions. This process is to be supervised by the audit committee, or any person authorized for such supervision, or via any other method approved by the audit committee;
|
|
4.
|
decides as to what transactions shall be considered as "extraordinary transactions" as such term is defined under the Companies Law in connection with related party transaction;
|
|
5.
|
determines the approval process for transactions that are not negligible, as well as determine which types of transactions would require the approval of the audit committee. Non-negligible transactions are defined as related party transactions with a controlling shareholder, or in which the controlling shareholder has a personal interest, even if they are deemed by the audit committee not to be extraordinary transactions but which have also been classified by the audit committee as non-negligible transactions;
|
|
6.
|
meets and receives reports from both the internal auditors and the independent registered public accounting firm dealing with matters that arise in connection with their audits; and
|
|
7.
|
regulates the company's rules on employee complaints, and implementing a whistleblower protection plan with respect to employee complaints of business irregularities.
|
●
|
Distribution of annual and quarterly reports to shareholders. Under Israeli law, as a public company whose shares are traded on the TASE, we are not required to distribute annual and quarterly reports directly to shareholders and the generally accepted business practice in Israel is not to distribute such reports to shareholders but to make such reports publicly available through the website of the Israeli Securities Authority and the TASE. In addition, we make our audited financial statements available to our shareholders at our offices. As a foreign private issuer, we are generally exempt from the SEC’s proxy solicitation rules.
|
●
|
Quorum. While the Marketplace Rules of the Nasdaq Stock Market require that the quorum for purposes of any meeting of the holders of a listed company’s common voting stock, as specified in the company’s bylaws, be no less than 33 1/3% of the company’s outstanding common voting stock, under Israeli law, a company is entitled to determine in its articles of association the number of shareholders and percentage of holdings required for a quorum at a shareholders meeting. Our Articles
of Association provide that a quorum of two or more shareholders holding at least 10% of the voting rights in person or by proxy is required for commencement of business at a general meeting. However, the quorum set forth in our Articles of Association with respect to an adjourned meeting consists of any number of shareholders present in person or by proxy.
|
●
|
Independent Directors. Our Board of Directors presently includes three external directors who were appointed in accordance with the provisions contained in Sections 239-249A of the Companies Law governing the selection of external directors, rather than a majority of external, or independent, directors. Israeli law does not require, nor do our independent directors conduct, regularly scheduled meetings at which only they are present. We are required, however, to ensure that all members of our Audit Committee are “independent” under the applicable Nasdaq and SEC criteria for independence, and we must also ensure that a majority of the members of our Audit Committee are unaffiliated directors as defined in the Companies Law.
|
●
|
Audit Committee. Israeli law, and our Articles of Association, do not require that the Company adopt and file an audit committee charter. Consistent with Israeli law, the independent auditors are elected at a meeting of shareholders instead of being appointed by the Audit Committee.
|
●
|
Nomination of our Directors. With the exception of our external directors and directors elected by our Board of Directors due to vacancy, our directors are elected by a general or special meeting of our shareholders. Other than external directors, our directors are appointed to hold office until the subsequent annual general meeting or they are removed from office by the majority of our shareholders at a general or special meeting of our shareholders. The nominations for directors, which are presented to our shareholders, are generally made by our directors, but nominations may be made by one or more of our shareholders as provided in our Articles of Association, under the Companies Law or in an agreement between us and our shareholders. Currently, there is no agreement between us and any shareholder regarding the
nomination of directors, though in connection with the investment by OrbiMed in 2013, several of the Company's shareholders signed a letter of undertaking to OrbiMed, according to which each undertook to vote their shares in accordance with OrbiMed’s instructions in connection with the election of directors. We were not a party to this letter of undertaking. See “Item 10. Additional Information – C. Material Contracts” for additional information. In accordance with our Articles of Association, under the Companies Law, any one or more shareholders holding, in the aggregate, either (1) 5% of our outstanding shares and 1% of our outstanding voting power or (2) 5% of our outstanding voting power, may
nominate one or more persons for election as directors at a general or special meeting by delivering a written notice of such shareholder’s intent to make such nomination or nominations to our registered office. Each such notice must set forth all of the details and information as required to be provided by our Articles of Association.
|
●
|
Compensation Committee and Compensation of Officers. Israeli law, and our Articles of Association, do not require that the Company adopt and file a compensation committee charter. Our compensation committee has been established and conducts itself in accordance with provisions governing the composition of and the responsibilities of a compensation committee as set forth in the Companies Law. Additionally, we comply with the requirements set forth under the Companies Law, pursuant to which transactions with office holders regarding their terms of office and employment, and transactions with a controlling shareholder in a company regarding his or her employment and/or his or her terms of office with the
company, may require the approval of the compensation committee, the board of directors and under certain circumstances the shareholders, either in accordance with our previously approved compensation policy or, in special circumstances in deviation therefrom, taking into account certain considerations set forth in the Companies Law. The requirements for shareholder approval of any office holder compensation, and the relevant majority or special majority for such approval, are all as set forth in the Companies Law. Thus, we will seek shareholder approval for all corporate actions with respect to office holder compensation requiring such approval under the requirements of the Companies Law, including seeking prior approval of the shareholders for the compensation policy and for certain office holder compensation, rather than seeking approval for such corporate actions in accordance with Nasdaq Listing Rules.
|
●
|
Code of Conduct. Under Israeli law, we are not required to make our code of conduct publicly available.
|
●
|
Approval of Related Party Transactions. All related party transactions are approved in accordance with the requirements and procedures for approval of interested party acts and transactions, set forth in sections 268 to 275 of the Companies Law, and the regulations promulgated thereunder, which require the approval of the audit committee, the compensation committee, the board of directors and shareholders, as may be applicable, for specified transactions, rather than approval by the audit committee or other independent body of our Board of Directors as required under the Marketplace Rules of the Nasdaq Stock Market.
|
●
|
Shareholder Approval. We seek shareholder approval for all corporate actions requiring such approval in accordance with the requirements of the Companies Law, which are different or in addition to the requirements for seeking shareholder approval under Nasdaq Listing Rule 5635, rather than seeking approval for corporation actions in accordance with such listing rules.
|
●
|
Equity Compensation Plans. We do not necessarily seek shareholder approval shareholder approval for the establishment of, and amendments to, stock option or equity compensation plans (as set forth in NASDAQ Listing Rule 5635(c)), as such matters are not subject to shareholder approval under Israeli law. We will attempt to seek shareholder approval for our stock option or equity compensation plans (and the relevant annexes thereto) to the extent required in order to ensure they are tax qualified for our employees in the United States. However, even if such approval is not received, then the stock option or equity compensation plans will continue to be in effect, but the Company will be unable to grant options to its U.S. employees that qualify as Incentive Stock Options for U.S. federal tax purpose. Our stock option or
other equity compensation plans are also available to our non-U.S. employees, and provide features necessary to comply with applicable non-U.S. tax laws.
|
As of December 31,
|
||||||||||||
2013
|
2012
|
|||||||||||
Numbers of employees by category of activity
|
||||||||||||
Management and administrative
|
5 | 7 | 7 | |||||||||
Research and development
|
10 | 9 | 10 | |||||||||
Operations
|
8 | 6 | 4 | |||||||||
Sales and marketing
|
6 | 4 | 3 | |||||||||
Production
|
11 | 9 | 9 | |||||||||
Total workforce
|
40 | 35 | 33 | |||||||||
Numbers of employees by geographic location
|
||||||||||||
Israel
|
36 | 34 | 33 | |||||||||
Europe
|
1 | |||||||||||
United States
|
3 | 1 | - | |||||||||
Total workforce
|
40 | 35 | 33 |
Directors
|
Number of
Shares
Beneficially
Held(1)
|
Percent of
Class
|
||||||
Dr. Nissim Darvish
|
0 | - | ||||||
1,716,664
|
0.68
|
|||||||
Ori Hershkovitz
|
0 | - | ||||||
Efrat Venkert
|
0 | - | ||||||
Prof. Gabby Sarusi (3)
|
82, 321 | 0.03 | ||||||
Anat Naschitz
|
0 | - |
Senior Management
|
Number of
Shares
Beneficially
Held(1)
|
Percent of
Class
|
||||||
Oded Yatzkan (4)
|
452,993
|
0.18 | ||||||
Minelu (Menashe) Sonnenschein (5)
|
6,121,175 | 2.45 | ||||||
Aviel Roy Shapira (6)
|
6,673,291 | 2.67 | ||||||
Milena Ridl
|
0 | 0 | ||||||
Thomas A. Dempsey
|
0 | 0 | ||||||
All directors and executive officers as a group (13 persons)
|
15,315,197
|
5.77 |
(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 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. The percentages are based on 249,945,342 ordinary shares issued and outstanding as of March 31, 2015.
|
(2)
|
Includes 1,716,664 ordinary shares issuable upon exercise of outstanding options currently exercisable or exercisable within 60 days of March 31, 2015. The exercise price of these options is NIS 0.83 per share and the options expire on September 30, 2018. Does not include 2,133,336 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of March 31, 2015. The exercise price of these options is NIS 0.83 per share and the options expire on September 30, 2018.
|
(3)
|
Includes 80,000 ordinary shares issuable upon exercise of outstanding options currently exercisable or exercisable within 60 days of March 31, 2015. The exercise price of these options is NIS 2.26 per share and the options expire in February 8, 2016.
|
(4)
|
Includes 388,750 ordinary shares issuable upon exercise of outstanding options currently exercisable or exercisable within 60 days of March 31, 2015. The exercise price of 120,000 options is NIS 2.26 per share and the options expire in February 8, 2016. The exercise price of 78,750 options is NIS 0.91 per share and the options expire in November 2, 2017. The exercise price of 190,000 options is NIS 0.68 per share and the options expire in April 23, 2018. Does not include 246,250 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of March 31, 2015. The exercise price
of 26,250 options is NIS 0.91 per share and the options expire in November 2, 2017. The exercise price of 220,000 options is NIS 0.537 per share and the options expire in July 17, 2020.
|
(5)
|
Includes 138,750 ordinary shares issuable upon exercise of outstanding options currently exercisable or exercisable within 60 days of March 31, 2015. The exercise price of 60,000 options is NIS 2.26 per share and the options expire in February 8, 2016. The exercise price of 78,750 options is NIS 0.91 per share and the options expire in November 2, 2017. Does not include 276,250 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of March 31, 2015. The exercise price of 26,250 options is NIS 0.91 per share and the options expire in November 2, 2017. The exercise price of 250,000 options
is NIS 0.537 per share and the options expire in July 17, 2020.
|
(6)
|
Includes 45,000 ordinary shares issuable upon exercise of outstanding options currently exercisable or exercisable within 60 days of March 31, 2015. The exercise price of 30,000 options is NIS 2.26 and the options expire in February 8, 2016. The exercise price of 15,000 options is NIS 0.91and the options expire in November 2, 2017. Does not include 65,000 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of March 31, 2015. The exercise price of 5,000 options is NIS 0.91 and the options expire in November 2, 2017. The exercise price of 60,000 options is NIS 0.537 and the options expire
in July 17, 2020.
|
Name
|
Number of Ordinary Shares Beneficially Owned
|
Percentage of Class
|
||||||
OrbiMed Israel Partners Limited Partnership(1)
|
92,057,801 | 31.37 | % | |||||
Migdal - Profit Participating Life Assurance Accounts(2)
|
27,889,940 | 10.81 | % | |||||
Migdal - Pension and Provident Funds(3)
|
15,023,470 | 5.91 | % | |||||
RIMA Senvest Managed Funds - Total (4)
|
29,674,023 | 11.45 | % | |||||
Senvest International LLC (5)
|
12,782,682 | 5.04 | % | |||||
Oren Dan (6)
|
19,071,386 | 7.63 | % | |||||
Armistice Capital Master Fund Ltd. (7)
|
21,456,705 | 8.38 | % |
|
(1)
|
OrbiMed Israel GP Ltd. (“OrbiMed Israel”) is the general partner of OrbiMed Israel BioFund GP Limited Partnership (“OrbiMed BioFund”), which is the general partner of the shareholder, OrbiMed Israel Partners Limited Partnership, an Israel limited partnership (“OrbiMed Partners”). OrbiMed Israel, as the general partner of OrbiMed BioFund, and OrbiMed BioFund, as the general partner of OrbiMed Partners, may be deemed to share voting and investment power with respect to the ordinary shares underlying the securities held by OrbiMed Partners. Such investment power is exercised through an investment committee comprised of Carl L. Gordon, Jonathan T. Silverstein, Nissim Darvish, Anat Naschitz, and Erez Chimovits, each of whom disclaims beneficial ownership over the shares held by OrbiMed Partners. Consists of 48,567,583 ordinary shares and 43,490,218
ordinary shares issuable upon exercise of outstanding warrants currently exercisable or exercisable within 60 days of March 31, 2015. In addition, OrbiMed is a party to the Shareholder Undertaking pursuant to which certain shareholders agreed to vote their shares in accordance with OrbiMed’s instructions. See “Item 10. Additional Information C. Material Contracts” for additional information.
|
|
(2)
|
To the Company’s knowledge, the Migdal Profit Participating Life Assurance Accounts are held for members of the public and managed by a subsidiary of Migdal Insurance & Financial Holdings Ltd., an Israeli public company, and the Migdal subsidiary managing such accounts operates under independent management and makes independent voting and investment decisions. Consists of 19,921,386 ordinary shares and 7,968,554 ordinary shares issuable upon exercise of outstanding warrants currently exercisable or exercisable within 60 days of March 31, 2015.
|
|
(3)
|
To the Company’s knowledge, the Migdal Pension and Provident Funds are held for members of the public and managed by a subsidiary (a different subsidiary then the one referenced in footnote 2 above) of Migdal Insurance & Financial Holdings Ltd., an Israeli public company, and the Migdal subsidiary managing such accounts operates under independent management and makes independent voting and investment decisions. Consists of 10,731,050 ordinary shares and 4,292,420 ordinary shares issuable upon exercise of outstanding warrants currently exercisable or exercisable within 60 days of March 31, 2015.
|
|
(4)
|
According to Senvest Capital Inc.’s (“Senvest Capital”) annual financial statements for the year ended December 31, 2014 (the “Senvest Annual Financial Statements”), the RIMA Senvest Managed Funds (Senvest Master Fund, L.P and Senvest Israel Partners, L.P.), are controlled by Senvest Capital, a Canadian public company listed on the Toronto Stock Exchange, by virtue of Senvest Capital’s holdings in those two funds (approximately 44% of Senvest Master Fund and 48% of Senvest Israel Partners, respectively, according to the Senvest Annual Financial Statements ) and by virtue of RIMA Senvest Management LLC, an affiliated entity, serving as the investment manager for those two funds. These holdings consist of: (i) 4,200,000 ordinary
shares and 2,100,000 ordinary shares issuable under warrants currently exercisable, or exercisable within 60 days of March 31, 2015, held by Senvest Master Partners Fund, L.P. and (ii) 16,195,731 ordinary shares and 7,178,292 warrants currently exercisable or exercisable within 60 days of March 31, 2015, held by Senvest Israel Partners, L.P. According to Senvest Capital’s public filings in Canada, as of March 31, 2015, Victor Mashaal beneficially held 41.0% of the common shares of Senvest Capital.
|
|
(5)
|
According to the Senvest Annual Financial Statements , Senvest International LLC is a wholly owned subsidiary of Senvest Capital Inc., a Canadian public company listed on the Toronto Stock Exchange. According to Senvest Capital’s public filings in Canada, as of March 30, 2015, Victor Mashaal beneficially held 41.0% of the common shares of Senvest Capital. Consists of 8,930,487 ordinary shares and 3,852,195 ordinary shares issuable upon exercise of outstanding options currently exercisable or exercisable within 60 days of March 31, 2015.
|
|
(6)
|
Mr. Oren Dan's ordinary shares are held by Dexxon Technologies Ltd. ("Dexxon"), a private company fully owned and controlled by Mr. Dan Oren.
|
|
(7)
|
To the best of the Company’s knowledge, Armistice Capital, LLC and Steven Boyd, Chief Investment Officer of Armistice Capital, LLC, have shared investment power with Armistice Capital Master Fund Ltd., the direct holder. Consists of 15,326,218 ordinary shares and 6,130,487 ordinary shares issuable upon exercise of outstanding warrants currently exercisable or exercisable within 60 days of March 31, 2015.
|
For the year ended December 31,
|
||||||||||||
2013
|
2012
|
|||||||||||
Total export sales*
|
2,664 | 2,498 | 2,893 | |||||||||
as a percentage of total revenues
|
100 | % | 100 | % | 96.47 | % |
NIS
Price Per
Ordinary Share
|
US$
Price Per
Ordinary Share
|
|||||||||||||||
High
|
Low
|
High
|
Low
|
|||||||||||||
Annual:
|
||||||||||||||||
2014
|
0.65 | 0.25 | 0.18 | 0.06 | ||||||||||||
2013
|
1.13 | 0.56 | 0.33 | 0.16 | ||||||||||||
2012
|
1.36 | 0.57 | 0.36 | 0.15 | ||||||||||||
2011
|
1.47 | 0.66 | 0.38 | 0.17 | ||||||||||||
2010
|
2.39 | 1.23 | 0.67 | 0.35 | ||||||||||||
Quarterly:
|
||||||||||||||||
First Quarter 2015
|
0.39 | 0.25 | 0.09 | 0.06 | ||||||||||||
Fourth Quarter 2014
|
0.43 | 0.25 | 0.12 | 0.06 | ||||||||||||
Third Quarter 2014
|
0.52 | 0.41 | 0.15 | 0.11 | ||||||||||||
Second Quarter 2014
|
0.62 | 0.45 | 0.18 | 0.13 | ||||||||||||
First Quarter 2014
|
0.65 | 0.52 | 0.19 | 0.14 | ||||||||||||
Fourth Quarter 2013
|
0.83 | 0.56 | 0.24 | 0.16 | ||||||||||||
Third Quarter 2013
|
0.92 | 0.73 | 0.26 | 0.20 | ||||||||||||
Second Quarter 2013
|
0.96 | 0.76 | 0.26 | 0.20 | ||||||||||||
First Quarter 2013
|
1.13 | 0.75 | 0.31 | 0.20 | ||||||||||||
Fourth Quarter 2012
|
0.85 | 0.64 | 0.23 | 0.17 | ||||||||||||
Third Quarter 2012
|
0.97 | 0.57 | 0.25 | 0.14 | ||||||||||||
Most Recent Six Months:
|
||||||||||||||||
April 2015
|
0.58
|
0.36
|
0.14
|
0.09
|
||||||||||||
March 2015
|
0.39 | 0.28 | 0.09 | 0.06 | ||||||||||||
February 2015
|
0.33 | 0.27 | 0.08 | 0.06 | ||||||||||||
January 2015
|
0.31 | 0.25 | 0.07 | 0.06 | ||||||||||||
December 2014
|
0.33 | 0.25 | 0.08 | 0.06 | ||||||||||||
November 2014
|
0.36 | 0.29 | 0.09 | 0.07 |
|
·
|
equal right to attend and to vote at all general meetings of the Company, whether regular or special, with each ordinary share entitling the holder thereof, which attend the meeting and participate at the voting, either in person or by a proxy or by a written ballot, to one vote;
|
|
·
|
equal right to participate in distribution of dividends, whether payable in cash or in bonus shares, in distribution of assets or in any other distribution, on a per share pro rata basis; and
|
|
·
|
equal right to participate, upon dissolution of the Company, in the distribution of the Company assets legally available for distribution, on a per share pro rata basis.
|
|
·
|
the authorization of the chairman of the board or a relative thereof to assume the role or responsibilities of our chief executive officer, and authorization of our chief executive officer or a relative thereof to assume the role or responsibilities of the chairman of the board;
|
|
·
|
the approval of an arrangement or reorganization of the company pursuant to Section 350 of the Companies Law;
|
|
·
|
the approval of the compensation policy with respect to the terms of office and employment of office holders; and
|
|
·
|
other matters in respect of which there is a provision in the articles of association providing that decisions of the general meeting may also be passed by proxy or which may be prescribed by Israel’s Minister of Justice.
|
|
·
|
increase the Company’s registered share capital by the creation of new shares from the existing class or a new class, as determined by the general meeting;
|
|
·
|
cancel any registered share capital which have not been taken or agreed to be taken by any person;
|
|
·
|
consolidate and divide all or any of its share capital into shares of larger nominal value than its existing shares;
|
|
·
|
subdivide the Company’s existing shares or any of them, the Company’s share capital or any of it, into shares of smaller nominal value than is fixed;
|
|
·
|
reduce the Company’s share capital and any fund reserved for capital redemption in any manner, and with and subject to any incident authorized, and consent required, by the Companies Law; and
|
|
·
|
reduce shares from the issued and outstanding share capital of the Company, in such manner that those shares shall be cancelled and the nominal par value paid for those shares will be registered at the Company's books as capital fund, which shall be deemed as a premium paid on those shares which shall remain in the issued and outstanding share capital of the Company.
|
●
|
the excess distribution or gain would be allocated ratably over the Non-Electing U.S. Investor’s holding period for the shares or ADSs;
|
●
|
the amount allocated to the current taxable year and any year prior to us becoming a PFIC would be taxed as ordinary income; and
|
●
|
the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year.
|
Persons depositing or withdrawing shares or ADS holders must pay:
|
For:
|
|
$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)
|
● |
Issuance of ADSs, including issuances resulting from a distribution of shares or rights or other property
|
● | Cancellation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates | |
$.05 (or less) per ADS
|
● |
Any cash distribution to ADS holders
|
A fee equivalent to the fee that would be payable if securities distributed to you had been shares and the shares had been deposited for issuance of ADSs
|
● |
Distribution of securities distributed to holders of deposited securities which are distributed by the depositary to ADS holders
|
$.05 (or less) per ADS per calendar year
|
● |
Depositary services
|
Registration or transfer fees
|
● |
Transfer and registration of shares on our share register to or from the name of the depositary or its agent when you deposit or withdraw shares
|
Expenses of the depositary
|
● |
Cable, telex and facsimile transmissions (when expressly provided in the deposit agreement)
|
● | converting foreign currency to U.S. dollars | |
Taxes and other governmental charges the depositary or the custodian has to pay on any ADSs or shares underlying ADSs, such as stock transfer taxes, stamp duty or withholding taxes
|
● |
As necessary
|
Any charges incurred by the depositary or its agents for servicing the deposited securities
|
● |
As necessary
|
If we:
|
Then:
|
· Change the nominal or par value of our shares
· Reclassify, split up or consolidate any of the deposited securities
· Distribute securities on the shares that are not distributed to you
· Recapitalize, reorganize, merge, liquidate, sell all or substantially all of our assets, or take any similar action
|
The cash, shares or other securities received by the depositary will become deposited securities. Each ADS will automatically represent its equal share of the new deposited securities.
The depositary may distribute new ADSs representing the new deposited securities or ask you to surrender your outstanding ADRs in exchange for new ADRs identifying the new deposited securities.
|
·
|
are only obligated to take the actions specifically set forth in the deposit agreement without negligence or bad faith;
|
·
|
are not liable if we are or it is prevented or delayed by law or circumstances beyond our or its control from performing our or its obligations under the deposit agreement;
|
·
|
are not liable for the inability of any holder of ADSs to benefit from any distribution on deposited securities that is not made available to holders of ADSs under the terms of the deposit agreement, or for any special, consequential or punitive damages for any breach of the terms of the deposit agreement;
|
·
|
have no obligation to become involved in a lawsuit or other proceeding related to the ADSs or the deposit agreement on your behalf or on behalf of any other person;
|
·
|
are not liable for the acts or omissions of any securities depository, clearing agency or settlement system; and
|
·
|
may rely upon any documents we believe or it believes in good faith to be genuine and to have been signed or presented by the proper person.
|
·
|
payment of stock transfer or other taxes or other governmental charges and transfer or registration fees charged by third parties for the transfer of any shares or other deposited securities;
|
·
|
satisfactory proof of the identity and genuineness of any signature or other information it deems necessary; and
|
·
|
compliance with regulations it may establish, from time to time, consistent with the deposit agreement, including presentation of transfer documents.
|
·
|
when temporary delays arise because: (i) the depositary has closed its transfer books or we have closed our transfer books; (ii) the transfer of shares is blocked to permit voting at a shareholders' meeting; or (iii) we are paying a dividend on our shares;
|
·
|
when it is necessary to prohibit withdrawals in order to comply with any laws or governmental regulations that apply to ADSs or to the withdrawal of shares or other deposited securities.
|
Exhibit Number
|
Exhibit Description
|
|
1.1
|
Articles of Association of Medigus Ltd. as amended on September 29, 2013 and on May 6, 2015 (unofficial translation to English from Hebrew original).
|
|
2.1
|
Form of Deposit Agreement between Medigus Ltd., The Bank of New York Mellon as Depositary, and owners and holders from time to time of ADSs issued thereunder, including the Form of American Depositary. Shares.
|
|
2.2
|
Form of Ordinary Shares Purchase Warrant issued to OrbiMed in connection with the January 2013 Share Purchase Agreement.
|
|
2.3
|
Form of Ordinary Shares Purchase Warrant issued in connection with the June 2014 Securities Purchase Agreements to non-Israeli investors.
|
|
2.4
|
Form of Ordinary Shares Purchase Warrant issued in connection with the June 2014 Securities Purchase Agreements to Israeli investors (other than Migdal).
|
|
2.5
|
Form of Ordinary Shares Purchase Warrant issued in connection with the June 2014 Securities Purchase Agreements to Migdal (unofficial translation to English from Hebrew original).
|
|
4.1
|
Share Purchase Agreement between Medigus Ltd. and OrbiMed Israel Partners Limited Partnership dated January 3, 2013.
|
|
4.2
|
Securities Purchase Agreement by and among Medigus Ltd. and OrbiMed Israel Partners Limited Partnership dated June 29, 2014.
|
|
4.3
|
Securities Purchase Agreement by and among Medigus Ltd., Sabby Volatility Warrant Master Fund Ltd., Sabby Healthcare Volatility Master Fund Ltd., Armistice Capital Master Fund Ltd., Senvest Israel Partners LP and Senvest International LLC dated June 29, 2014.
|
|
4.4
|
Securities Purchase Agreement by and among Medigus Ltd. and Capital Point Ltd. dated June 29, 2014.
|
|
4.5
|
Securities Purchase Agreement by and among Medigus Ltd. and Migdal Insurance Company Ltd. dated June 29, 2014 (unofficial translation to English from Hebrew original).
|
|
4.6
|
2013 Share Option and Incentive Plan.
|
|
4.7
|
Series 4 Option Plan (unofficial translation to English from Hebrew original).
|
|
4.8
|
Series 6 Option Plan (unofficial translation to English from Hebrew original).
|
|
4.9
|
Series A Option Plan (unofficial translation to English from Hebrew original).
|
|
4.10
|
Series B Option Plan (unofficial translation to English from Hebrew original).
|
|
4.11
|
Medigus Ltd. Office Holders' and Directors' Compensation Plan dated September 29, 2013 (unofficial translation to English from Hebrew original).
|
|
4.12
|
Lease Agreement between Medigus USA LLC and Regus Plc dated December 4, 2013.
|
|
4.13
|
Lease Agreement between Medigus Ltd. and Sky-City Office Center for HiTech Industries Ltd. dated June 15, 2014 (English summary of the Hebrew language agreement).
|
|
4.14
|
Lease Agreement Tefen Yazamut Ltd. regarding main offices in Omer Industrial Park dated December 10, 2013 (English summary of the Hebrew language agreement).
|
|
4.15
|
Form of Indemnification and Exculpation Undertaking.
|
|
8.1
|
List of Subsidiaries.
|
|
15.1
|
Consent of Kesselman & Kesselman, Certified Public Accountant (Isr.), a member of PricewaterhouseCoopers International Limited, independent registered public accounting firm for the Medigus Ltd.
|
Medigus Ltd.
|
|||
|
By:
|
/s/ Christopher (Chris) Rowland | |
Christopher (Chris) Rowland | |||
Chief Executive Officer | |||
Date: May 7, 2015
|
Page
|
|
Consolidated Financial Statements as of and for the Year Ended December 31, 2014
|
|
F-1
|
|
F-2
|
|
F-4
|
|
F-5
|
|
F-8
|
|
F-10
|
Tel-Aviv, Israel
|
|
Certified Public Accountants (Isr.)
|
|
A member firm of PricewaterhouseCoopers International Limited
|
December 31
|
|||||||||||
Note
|
2014
|
2013
|
|||||||||
NIS in thousands
|
|||||||||||
A s s e t s
|
|||||||||||
CURRENT ASSETS:
|
|||||||||||
Cash and cash equivalents
|
5 | 42,067 | 23,926 | ||||||||
Short-term deposits
|
6 | - | 8,073 | ||||||||
Financial assets at fair value through profit or loss
|
4,15 | 8,187 | 7,958 | ||||||||
Accounts receivable:
|
7 | ||||||||||
Trade
|
513 | 248 | |||||||||
Other
|
1,738 | 1,604 | |||||||||
Inventory
|
2(i),8 | 1,403 | 1,060 | ||||||||
53,908 | 42,869 | ||||||||||
NON-CURRENT ASSETS:
|
|||||||||||
Inventory
|
2(i),8 | 541 | 848 | ||||||||
Property and equipment
|
9 | 945 | 1,153 | ||||||||
Intangible assets
|
185 | 330 | |||||||||
1,671 | 2,331 | ||||||||||
TOTAL ASSETS
|
55,579 | 45,200 |
/s/ Nissim Darvish | /s/ Christopher Rowland | /s/ Oded Yatzkan | |
Dr. Nissim Darvish
Chairman of the Board
|
Chief Executive Officer
|
Chief Financial Officer
|
December 31
|
|||||||||||
Note
|
2014
|
2013
|
|||||||||
NIS in thousands
|
|||||||||||
Liabilities and equity
|
|||||||||||
CURRENT LIABILITIES -
|
|||||||||||
Accounts payable and accruals:
|
11 | ||||||||||
Trade
|
791 | 528 | |||||||||
Other
|
3,223 | 2,852 | |||||||||
4,014 | 3,380 | ||||||||||
NON-CURRENT LIABILITIES:
|
|||||||||||
Warrants at fair value
|
13(b) | 428 | 1,678 | ||||||||
Long-term advanced payments
|
12(b) | - | 1,167 | ||||||||
Retirement benefit obligation, net
|
381 | 225 | |||||||||
809 | 3,070 | ||||||||||
COMMITMENTS
|
12 | ||||||||||
TOTAL LIABILITIES
|
4,823 | 6,450 | |||||||||
EQUITY:
|
13 | ||||||||||
Ordinary share capital
|
2,499 | 1,646 | |||||||||
Share premium
|
170,741 | 138,378 | |||||||||
Other capital reserves
|
4,498 | 4,131 | |||||||||
Warrants
|
2,828 | 1,671 | |||||||||
Accumulated deficit
|
(129,810 | ) | (107,076 | ) | |||||||
TOTAL EQUITY
|
50,756 | 38,750 | |||||||||
TOTAL LIABILITIES AND EQUITY
|
55,579 | 45,200 | |||||||||
For the Year Ended December 31
|
|||||||||||||||
Note
|
2014
|
2013
|
2012
|
||||||||||||
NIS in thousands
|
|||||||||||||||
REVENUES
|
19 | 2,664 | 2,498 | 2,999 | |||||||||||
COST OF REVENUES
|
14 | 1,252 | 1,126 | 1,161 | |||||||||||
GROSS PROFIT
|
1,412 | 1,372 | 1,838 | ||||||||||||
RESEARCH AND DEVELOPMENT EXPENSES, NET
|
14 | 14,401 | 8,180 | 7,752 | |||||||||||
SELLING AND MARKETING EXPENSES
|
14 | 8,353 | 3,234 | 1,784 | |||||||||||
ADMINISTRATIVE AND GENERAL EXPENSES
|
14 | 8,206 | 6,877 | 4,694 | |||||||||||
OTHER INCOME, NET
|
15 | 941 | 666 | 214 | |||||||||||
OPERATING LOSS
|
(28,607 | ) | (16,253 | ) | (12,178 | ) | |||||||||
PROFIT FROM CHANGES IN FAIR VALUE OF WARRANTS ISSUED TO INVESTORS
|
13(b) | 3,605 | 11,544 | ||||||||||||
FINANCING INCOME (EXPENSES) IN RESPECT OF DEPOSITS AND EXCHANGE DIFFERENCES
|
2,513 | (182 | ) | (61 | ) | ||||||||||
FINANCING EXPENSES IN RESPECT OF BANK COMMISSIONS
|
(127 | ) | (213 | ) | (100 | ) | |||||||||
FINANCING INCOME (EXPENSES), NET
|
16 | 2,386 | (395 | ) | (161 | ) | |||||||||
LOSS BEFORE TAXES ON INCOME
|
(22,616 | ) | (5,104 | ) | (12,339 | ) | |||||||||
TAX BENEFIT (TAXES ON INCOME)
|
10 | (13 | ) | (85 | ) | 85 | |||||||||
LOSS FOR THE YEAR
|
(22,629 | ) | (5,189 | ) | (12,254 | ) | |||||||||
OTHER COMPREHENSIVE INCOME (LOSS):
|
|||||||||||||||
Amounts which will not be reclassified to profit or loss -
|
|||||||||||||||
re-measurement of net liabilities for employee benefits
|
(105 | ) | 33 | ||||||||||||
Amounts which may be subsequently reclassified to profit or loss:
|
|||||||||||||||
Revaluation of financial asset available for sale, net of tax
|
254 | ||||||||||||||
Currency translation differences
|
14 | ||||||||||||||
Transfer of capital reserve in respect of financial
asset available for sale to statement of loss, net of tax
|
(254 | ) | |||||||||||||
OTHER COMPREHENSIVE INCOME (LOSS) FOR THE YEAR, NET OF TAX
|
(91 | ) | (254 | ) | 287 | ||||||||||
TOTAL COMPREHENSIVE LOSS FOR THE YEAR
|
(22,720 | ) | (5,443 | ) | (11,967 | ) | |||||||||
NIS
|
|||||||||||||||
BASIC AND DILUTED LOSS PER SHARE
|
17 | (0.12 | ) | (0.04 | ) | (0.14 | ) | ||||||||
WEIGHTED AVERAGE OF ORDINARY SHARES (IN THOUSANDS)
|
194,997 | 130,199 | 86,984 |
Equity attributed to the owners of the company
|
|||||||||||||||||||||||||||||||||||
Note
|
Ordinary shares
|
Share premium
|
Capital reserves from options granted
|
Capital reserves from transactions with controlling
shareholders
|
Capital reserve from financial asset available for sale
|
Warrants
|
Accumulated deficit
|
Total equity
|
|||||||||||||||||||||||||||
NIS in thousands
|
|||||||||||||||||||||||||||||||||||
BALANCE AS OF JANUARY 1, 2012
|
835 | 88,325 | 3,530 | 1,418 | 2,884 | (89,666 | ) | 7,326 | |||||||||||||||||||||||||||
COMPREHENSIVE LOSS:
|
|||||||||||||||||||||||||||||||||||
Loss for the year
|
(12,254 | ) | (12,254 | ) | |||||||||||||||||||||||||||||||
Other comprehensive income for the year
|
254 | 33 | 287 | ||||||||||||||||||||||||||||||||
TOTAL COMPREHENSIVE LOSS FOR THE YEAR
|
254 | (12,221 | ) | (11,967 | ) | ||||||||||||||||||||||||||||||
TRANSACTIONS WITH SHAREHOLDERS:
|
|||||||||||||||||||||||||||||||||||
Proceeds from issuance of shares and warrants
|
13B | 67 | 5,487 | 1,026 | 6,580 | ||||||||||||||||||||||||||||||
Options granted to employees and service providers
|
13C | 505 | 505 | ||||||||||||||||||||||||||||||||
Forfeiture of options
|
13C | 113 | (113 | ) | |||||||||||||||||||||||||||||||
Amount carried to capital reserve as a result of transaction with controlling shareholder
|
18D | 494 | 494 | ||||||||||||||||||||||||||||||||
TOTAL TRANSACTIONS WITH SHAREHOLDERS
|
67 | 5,600 | 392 | 494 | 1,026 | 7,579 | |||||||||||||||||||||||||||||
BALANCE AS OF DECEMBER 31, 2012
|
902 | 93,925 | 3,922 | 1,912 | 254 | 3,910 | (101,887 | ) | 2,938 |
Equity attributed to the owners of the company
|
|||||||||||||||||||||||||||||||||||
Note
|
Ordinary shares
|
Share premium
|
Capital reserves from options granted
|
Capital reserves from transactions with controlling
shareholders
|
Capital reserve from financial asset available for sale
|
Warrants
|
Accumulated deficit
|
Total equity
|
|||||||||||||||||||||||||||
NIS in thousands
|
|||||||||||||||||||||||||||||||||||
BALANCE AS OF JANUARY 1, 2013
|
902 | 93,925 | 3,922 | 1,912 | 254 | 3,910 | (101,887 | ) | 2,938 | ||||||||||||||||||||||||||
COMPREHENSIVE LOSS:
|
|||||||||||||||||||||||||||||||||||
Loss for the year
|
(5,189 | ) | (5,189 | ) | |||||||||||||||||||||||||||||||
Other comprehensive loss for the year
|
(254 | ) | (254 | ) | |||||||||||||||||||||||||||||||
TOTAL COMPREHENSIVE LOSS FOR THE YEAR
|
(254 | ) | (5,189 | ) | (5,443 | ) | |||||||||||||||||||||||||||||
TRANSACTIONS WITH SHAREHOLDERS:
|
|||||||||||||||||||||||||||||||||||
Proceeds from issuance of shares and warrants
|
13B | 744 | 38,191 | 1,671 | 40,606 | ||||||||||||||||||||||||||||||
Options granted to employees and service providers
|
13C | 511 | 511 | ||||||||||||||||||||||||||||||||
Forfeiture and expiration of options and warrants
|
13C | 6,262 | (2,352 | ) | (3,910 | ) | |||||||||||||||||||||||||||||
Amount carried to capital reserve as a result of transaction with controlling shareholder
|
18D | 138 | 138 | ||||||||||||||||||||||||||||||||
TOTAL TRANSACTIONS WITH SHAREHOLDERS
|
744 | 44,453 | (1,841 | ) | 138 | (2,239 | ) | 41,255 | |||||||||||||||||||||||||||
BALANCE AS OF DECEMBER 31, 2013
|
1,646 | 138,378 | 2,081 | 2,050 | - | 1,671 | (107,076 | ) | 38,750 |
Equity attributed to the owners of the company
|
|||||||||||||||||||||||||||||||||||
Note
|
Ordinary shares
|
Share premium
|
Capital reserves from options granted
|
Capital reserves from transactions with controlling
shareholders
|
Currency translation differences
|
Warrants
|
Accumulated deficit
|
Total equity
|
|||||||||||||||||||||||||||
NIS in thousands
|
|||||||||||||||||||||||||||||||||||
BALANCE AS OF JANUARY 1, 2014
|
1,646 | 138,378 | 2,081 | 2,050 | 1,671 | (107,076 | ) | 38,750 | |||||||||||||||||||||||||||
COMPREHENSIVE LOSS:
|
|||||||||||||||||||||||||||||||||||
Loss for the year
|
(22,629 | ) | (22,629 | ) | |||||||||||||||||||||||||||||||
Other comprehensive loss for the year
|
14 | (105 | ) | (91 | ) | ||||||||||||||||||||||||||||||
TOTAL COMPREHENSIVE LOSS FOR THE YEAR
|
14 | (22,734 | ) | (22,720 | ) | ||||||||||||||||||||||||||||||
TRANSACTIONS WITH SHAREHOLDERS:
|
|||||||||||||||||||||||||||||||||||
Proceeds from issuance of shares and warrants
|
13B | 853 | 31,605 | 1,157 | 33,615 | ||||||||||||||||||||||||||||||
Options granted to employees and service providers
|
13C | 1,111 | 1,111 | ||||||||||||||||||||||||||||||||
Forfeiture and expiration of options and warrants
|
13C | 758 | (758 | ) | |||||||||||||||||||||||||||||||
TOTAL TRANSACTIONS WITH SHAREHOLDERS
|
853 | 32,363 | 353 | 1,157 | 34,726 | ||||||||||||||||||||||||||||||
BALANCE AS OF DECEMBER 31, 2014
|
2,499 | 170,741 | 2,434 | 2,050 | 14 | 2,828 | (129,810 | ) | 50,756 |
For the year ended December 31
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
NIS in thousands
|
||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
CASH FLOWS USED IN OPERATIONS (see Appendix)
|
(28,015 | ) | (22,606 | ) | (6,219 | ) | ||||||
Income tax paid
|
(13 | ) | ||||||||||
Interest received
|
96 | 59 | 202 | |||||||||
NET CASH USED IN OPERATING ACTIVITIES
|
(27,932 | ) | (22,547 | ) | (6,017 | ) | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||
Acquisition of property and equipment
|
(240 | ) | (298 | ) | (384 | ) | ||||||
Acquisition of intangible assets
|
(149 | ) | (77 | ) | ||||||||
Repayment of short-term deposits
|
8,086 | 881 | ||||||||||
Investment in short-term deposits
|
(9,303 | ) | ||||||||||
Net cash generated from (used in) investing activities
|
7,697 | (8,797 | ) | (384 | ) | |||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
Proceeds from issuance of shares and warrants, note 13b
|
35,970 | 53,828 | 6,580 | |||||||||
Net cash flows generated from financing activities
|
35,970 | 53,828 | 6,580 | |||||||||
INCREASE IN CASH AND CASH EQUIVALENTS
|
15,735 | 22,484 | 179 | |||||||||
BALANCE OF CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
|
23,926 | 1,312 | 1,183 | |||||||||
GAINS (LOSSES) FROM EXCHANGE DIFFERENCES ON CASH AND CASH EQUIVALENTS
|
2,406 | 130 | (50 | ) | ||||||||
BALANCE OF CASH AND CASH EQUIVALENTS AT END OF YEAR
|
42,067 | 23,926 | 1,312 |
For the year ended December 31
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
NIS in thousands
|
||||||||||||
NET CASH USED IN OPERATIONS:
|
||||||||||||
Loss for the year before taxes on income
|
(22,616 | ) | (5,104 | ) | (12,339 | ) | ||||||
Adjustment in respect of:
|
||||||||||||
Profit on change in the fair value of warrants issued to investors
|
(3,605 | ) | (11,544 | ) | ||||||||
Losses (gains) from exchange differences on cash and cash equivalents
|
(2,392 | ) | (130 | ) | 50 | |||||||
Liability for employee benefits, net
|
51 | 68 | ||||||||||
Gains on change in the fair value of financial instruments at fair value through profit or loss
|
(66 | ) | (278 | ) | (14 | ) | ||||||
Revaluation of and exchange differences on short-term deposits
|
(13 | ) | 349 | |||||||||
Interest received
|
(96 | ) | (59 | ) | (202 | ) | ||||||
Depreciation
|
448 | 315 | 370 | |||||||||
Amortization of intangible assets
|
294 | 105 | 103 | |||||||||
Amounts charged in respect of options granted to employees and service providers
|
1,111 | 511 | 505 | |||||||||
Amounts carried to capital reserves as a result of transactions with controlling shareholders
|
138 | 494 | ||||||||||
CHANGES IN OPERATING ASSET AND LIABILITY ITEMS:
|
||||||||||||
Decrease (increase) in accounts receivable :
|
||||||||||||
Trade
|
(265 | ) | 71 | 1 | ||||||||
Other
|
(134 | ) | (873 | ) | 535 | |||||||
Increase (decrease) in accounts payable and accruals :
|
||||||||||||
Trade
|
263 | 298 | (436 | ) | ||||||||
Other
|
(796 | ) | 733 | (329 | ) | |||||||
Increase in inventory
|
(36 | ) | (538 | ) | (1,314 | ) | ||||||
Net sales (acquisitions) of financial assets at fair value through profit or loss
|
(163 | ) | (6,600 | ) | 6,289 | |||||||
NET CASH USED IN OPERATIONS
|
(28,015 | ) | (22,606 | ) | (6,219 | ) |
|
a.
|
Medigus Ltd. (hereinafter – the “Company") together with its subsidiary (hereinafter – the “Group") is a medical device group specializing in research and development of innovative endoscopic procedures and devices. To date most of the Group's research and development activities have been focused in the development of the MUSE endoscopy system (hereinafter - “MUSE”) for the treatment of gastroesophageal reflux disease (GERD), which is one of the most common chronic diseases in the western world. In addition, the Group uses the technological platform it developed for the purpose of additional special endoscopy-based systems and products and endeavors to enter into agreements and/or joint ventures with companies in the medical device industry in order to integrate the systems and products it has developed. To date, the MUSE product has not generated significant revenues and most of the Group's revenues arise from sales
of miniature cameras and related equipment, which it developed and manufactures and which are used in endoscopic procedures. The Company has two reportable segments: MUSE segment and Visual segment. For information as to the Group’s reportable segments, principal geographical markets and major customers, see Note 19.
|
|
In addition, the Company has FDA approval to market the MUSE endoscopy system in the USA, and it continues negotiations to market the main product and sell miniature cameras for endoscopic devices and other endoscopy instruments, which can serve as a source of future revenues.
|
|
The Company’s shares are listed on the Tel Aviv Stock Exchange Ltd. The Company was incorporated in Israel on December 9, 1999 and is resident in Israel. The address of its registered office is P.O. Box 3030, Omer, 84965000.
|
|
b.
|
On July 22, 2007 the Company established a wholly owned subsidiary, MEDIGUS USA LLC, in the USA (hereinafter - the “Subsidiary”). The Subsidiary did not engage in any business activities until October 2013.
|
|
On October 1, 2013, the Company and the Subsidiary entered into an agreement where the subsidiary provides services to the Company in consideration for reimbursement of direct costs plus a reasonable premium. It is noted that the CEO is employed directly by the Subsidiary.
|
|
c.
|
As of December 31, 2014 the Group had total accumulated loss of NIS 130 Million, however had positive working capital of NIS 49,894 thousand.
|
|
Based on the projected cash flows prepared by the Company, which is based on estimated future revenues and which takes into account the Company's estimate of its projected expenses and its cash balances and financial assets at fair value through profit and loss as of December 31, 2014, the Company is of the opinion that it has the ability to continue advancing its activities including the development, manufacture and marketing of its products for a period of at least 12 months from the date of approval of these financial statements.
|
|
The Group's financial statements as of December 31, 2014 and 2013 and for each of the three years in the period ended December 31, 2014, are in compliance with International Financial Reporting Standards, which are standards and interpretations thereto issued by the International Accounting Standard Board (hereinafter- the “IFRS Standards”).
|
|
1)
|
The significant accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented, unless otherwise stated.
|
|
2)
|
These financial statements have been prepared under the historical cost convention, as modified by the revaluation of plan assets related to retirement benefit obligation, and financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss measured at fair value.
|
|
3)
|
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires the Group's management to exercise its judgment in the process of applying the Group’s accounting policies. Areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 3. Actual results may differ materially from estimates and assumptions used by the Group's management.
|
|
5)
|
The Group analyzes the expenses recognized in the consolidated statement of loss and other comprehensive loss using a classification method based on the expenses' function.
|
|
Subsidiary is an entity over which the Company has control. The Company controls an entity when the Company is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The Subsidiary is fully consolidated. Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are deconsolidated from the date that control ceases.
|
|
Inter-company transactions and balances as well as revenues and expenses relating to intercompany transactions have been eliminated.
|
|
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker (hereinafter - the "CODM"). The CODM is responsible for allocating resources and assessing performance of the operating segments.
|
|
1)
|
The functional currency and the presentation currency
Items included in the financial statements of each of the companies in the Group have been prepared in the currency of the principal economic environment in which it operates (hereinafter – "the functional currency"). The consolidated financial statements are presented in New Israel Shekels, which is the Company's functional and presentation currency, and rounded to the nearest thousand. The Subsidiary's functional currency is US Dollar.
|
2)
|
Transactions and balances
Transactions made in a currency which is different from the functional currency ("foreign currency") are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at the end-of-year exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in income or loss.
Gains and losses from changes in exchange rates are presented in the statement of comprehensive loss among "Financing income (expenses) in respect of deposits and exchange differences."
|
|
(a)
|
Assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position;
|
|
Depreciation on assets is calculated using the straight line method of depreciation, in order to depreciate their cost to residual value over their estimated useful life as follows:
|
Machinery and equipment
|
6 – 10 years (primarily 10)
|
Furniture
|
7 – 14 years
|
Computers
|
3 years
|
|
Leasehold improvements are depreciated using the straight line method over the shorter of the term of the lease or the estimated useful lives of the improvements.
|
|
The assets’ residual values, their useful lives and the depreciation method are reviewed, and adjusted if appropriate, at the end of each year.
|
|
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount (see g. below).
|
|
Gains and losses on disposals are determined by comparing the net proceeds with the carrying amount and are recognized within ‘Other income – net’ in the statement of comprehensive loss.
|
|
·
|
Adequate technical, financial and other resources to complete the development and to use or sell the intangible asset are available; and
|
|
·
|
The expenditure attributable to the intangible asset during its development can be reliably measured.
|
|
Non-monetary assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
|
|
An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less selling costs and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels of identifiable cash flows (cash-generating units). Non-monetary assets that were impaired are reviewed for possible reversal of the impairment recognized at each statement of financial position date.
|
|
Government grants are recognized at their fair value when there is reasonable assurance that they will be received and the Group will comply with all the attached conditions.
|
|
A forgivable loan received from the government is accounted for as a government grant when there is reasonable assurance that the Group will comply with the conditions for forgiveness of the loan.
|
|
Government grants relating to costs are deferred and recognized in the income statement on a systematic basis over the period necessary to match them with the costs that they are intended to compensate.
|
|
Grants received from the Office of the Chief Scientist in the Ministry of Industry, Trade and Labor (hereinafter - the “Chief Scientist”), as participation in research and development performed by the Company (hereinafter - “Scientist Grants”) are classified as “forgivable loans” as set out in International Accounting Standard 20 “Accounting for Government Grants and Disclosing the Government’s Assistance” (hereinafter -“IAS 20”).
|
|
Chief Scientist grants received after January 1, 2009 are recognized and measured in accordance with IAS 39. If on the date on which the right for the Chief Scientist grant is established (hereafter – "the entitlement date") the Group’s management concludes that it is not reasonably assured that the Chief Scientist grant to which entitlement has been established, will not be repaid, the Group recognizes a financial liability on that date, which is accounted for under the provisions of IAS 39 regarding financial liabilities measured at amortized cost. The difference between the received grant and the fair value of the said financial liability at date of initial recognition is treated as a government grant recognized in profit or loss as a reduction of research and development expenses.
|
|
In the event that on entitlement date the Group’s management concludes that there is reasonable assurance that the Chief Scientist grant which was received will not be repaid, the grant is carried to income at that date as a reduction of research and development expenses. If in subsequent periods Group’s management concludes for the first time that there is no reasonable assurance that the Chief Scientist grant received will not be repaid, the Group recognizes on that date a financial liability against profit or loss. The aforementioned financial liability is accounted for in accordance with the provisions set out in IAS 39 regarding financial liabilities measured at amortized cost.
|
|
Over all of the reporting periods presented, the Company has concluded that, with respect to all of the grants received from the Chief Scientist, there is reasonable assurance that the grants received will not be repaid, therefore the grants were carried to income as reduction of research and development expenses.
|
|
a)
|
Financial assets at fair value through profit or loss.
This category includes financial assets held for trading. A financial asset is classified to this category if it is purchased primarily for the purpose of selling in the short-term.
Instruments included in this category are marketable securities which are denominated in NIS and are unlinked to the CPI.
Changes in financial assets at fair value through profit or loss are presented among “operating activities” as part of the changes in working capital in the statement of cash flows.
Changes in the fair values of financial assets at fair value through profit or loss are carried to “other income, net” in the statement of comprehensive loss (see Note 15).
The fair value of marketable securities is based on their quoted price in an active market.
|
|
b)
|
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted on an active market. These assets are classified as current assets, except for maturities longer than 12 months after the date of the statement of financial position which are classified as non-current assets. The Group’s loans and receivables are included in “accounts receivable”, "short-term deposits" and “cash and cash equivalents” in the statement of financial position (see also sections k and l below).
|
|
c)
|
Available for sale financial assets
Available for sale financial assets are non-derivatives which are not classified in any of the other categories. They are classified as non-current assets, unless management intends to dispose of them within a period of up to 12 months from the date of the statement of financial position, in which case they are classified as current assets.
|
|
The Group classifies its financial liabilities to the following categories: financial liabilities at fair value through profit or loss and financial liabilities at amortized cost. The Group’s management determines the classification of financial liabilities upon initial recognition.
|
|
a)
|
Financial liabilities at fair value through profit or loss.
Warrants issued to investors with a cashless exercise mechanism. In accordance with International Accounting Standard 32: “Financial Instruments: Presentation”, these warrants are a “financial liability”. As the aforementioned liability is a non-equity derivative financial instrument, it is classified in accordance with IAS 39 as a financial liability at fair value through profit or loss, which is measured at its fair value at each date of the statement of financial position, with changes in the fair value carried to profit or loss.
|
|
b)
|
Financial liabilities at amortized cost
Trade payables and financial liabilities included in "other liabilities" are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method.
|
|
Regular purchases and sales of financial assets are recorded at the date of the settlement which is the date on which the asset was delivered to the Group or delivered from the Group.
|
|
Investments are initially recognized at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets measured at fair value through profit or loss are initially recognized at fair value and transaction costs are charged to income or loss. Financial assets are derecognized when the rights to receive cash flows from the investments have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership associated with these assets. Available for sale financial assets and financial assets at fair value through profit or loss are measured in subsequent periods at fair value. Loans and receivables are subsequently carried at amortized cost using the effective interest method.
|
|
Gains or losses arising from the changes in the fair value of financial assets at fair value through profit or loss are presented in the statement of comprehensive loss among “other income - net” in the period in which they were incurred.
|
|
Gains or losses from the changes in fair value of available for sale financial assets are recognized in other comprehensive income, except for impairment losses, and exchange rate gains and losses on available for sale financial assets which constitute monetary assets, until the asset is written off.
|
|
When a financial asset available for sale is sold or impaired, the accumulated gain or loss, which was previously recognized in other comprehensive loss, is reclassified from equity to income or loss under “other income, net”.
|
|
The Group assesses at each date of the statement of financial position whether there is objective evidence that a financial asset or group of financial assets measured at depreciated cost or available for sale is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.
|
|
The cost is determined on the basis of on the “first in-first out” basis. Cost of purchased products and inventory in process includes costs of design, raw materials, direct labor, other direct costs and fixed production overheads.
|
|
Net realizable value is an estimated selling price in the ordinary course of business less applicable variable selling expenses.
|
|
The balance of trade receivable includes amounts due from customers for merchandise sold or services rendered in the ordinary course of business. If collection is expected in one year or less, they are classified as current assets. If not, they are presented as noncurrent assets.
Trade receivables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method, less provision for doubtful accounts.
|
|
The consolidated statements of financial position and the consolidated statements of cash flows include cash and cash equivalents, which are short-term bank deposits with maturities of three months or less.
|
|
Tax expenses for the reported years include deferred taxes. The taxes are recognized in the Statements of Loss and Other Comprehensive Loss, except for taxes relating to items carried to other comprehensive income, which are also recognized in other comprehensive income.
|
|
The Group recognizes deferred taxes using the liability method, for temporary differences between the amounts of assets and liabilities included in the financial statements, and the amounts for tax purposes. Deferred taxes are not recognized, if the temporary differences arise at the initial recognition of the asset or liability which at the time of the transaction has no effect on profit or loss, whether for accounting or tax reporting. The amount of deferred taxes is determined using the tax rates (and laws) that have been enacted or substantially enacted by the date of the statement of financial position and are expected to apply when the related deferred tax assets is realized or the deferred tax liabilities will be settled.
|
|
Deferred tax assets are recognized for temporary differences that are tax deductible, up to the amount of the differences that are expected to be utilized in the future, against taxable income.
|
|
No deferred tax assets have been recorded in the Group’s books of accounts for current losses carried forward since it is not probable that the Group will be able to utilize those losses in the foreseeable future against taxable income.
Deferred tax assets and liabilities are offset only if:
|
|
-
|
There is a legally enforceable right to offset current tax assets against current tax liabilities; and
|
|
-
|
Deferred income tax assets and liabilities relate to income taxes imposed by the same taxation authority on the same taxable entity.
|
|
In the event of a dividend distribution originating from tax exempted “benefited enterprises”, tax will be levied on the amount distributed using the tax rate that would have been applicable to Company had it not been exempted from tax. In the event of such a distribution, the amount of tax will be recognized as an expense in the statement of comprehensive loss.
|
|
A defined contribution plan is a post-employment employee benefit plan, to which Group companies pay fixed deposits to a separate and independent entity, so that the Group has no legal or constructive obligation to to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
|
|
According to Israeli labor laws and work agreements, and as customary in the Group’s companies, the Group’s companies are obligated to pay severance pay to employees who are fired or leave their employment in certain circumstances.
|
|
The obligation of Group companies to the employees which is in the framework of a defined contribution plan, is to make fixed deposits to a separate and independent entity, so that the Group has no obligation, legal or otherwise, to make additional deposits, when assets of this fund are insufficient to pay to all of the employees their benefits for their current and past employment services.
|
|
Under the law each employee is legally entitled to vacation and recreation benefits, both calculated on an annual basis. The entitlement is based on term of employment. The Group records the obligation and expense for vacation and recreation pay based on the benefits that have been accumulated for each employee.
|
|
The Company recognizes the obligation and expense for bonuses when a contractual or constructive obligation exists. The obligation is recognized in the amount expected to be paid, to the extent that the Company can reliably estimate the amount expected to be paid.
|
|
The Group operates several equity-settled share based compensation plans to employees and other service providers, under which the Group receives services from employees and service providers in return for equity instruments (options) of the Company. The fair value of the services received from employees and service providers in return for granting the options is recognized as an expense in the statement of comprehensive loss. The total amount charged as an expense is determined taking into consideration the fair value of the options granted:
|
|
§
|
Taking into consideration performance conditions which are market conditions (e.g. the entity's share price); and;
|
|
§
|
Without considering service and performance conditions, which are non-market vesting conditions (e.g. meeting profit and sales targets and continued employment in the Company for a certain period).
|
|
Non-market vesting conditions are included among the assumptions used to estimate the number of options expected to vest. The total expense is recognized during the vesting period, which is the period over which all of the specified vesting conditions of the share-based payment are to be satisfied.
|
|
At each date of the statement of financial position, the Group revises the estimates of the number of options that are expected to vest, based on non-market vesting conditions. It recognizes the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity.
|
|
When the options are exercised, the Company issues new shares. The proceeds, less directly related transaction costs, are reflected in the share capital (at par value) and in share premium.
|
|
Group revenues are measured in accordance with the fair value of the consideration received or receivable in respect of sales supplied in the ordinary course of business. Revenues are presented net of V.A.T. returns, rebates and discounts.
|
|
The Group manufactures and sells contractual equipment - miniature cameras and/or auxiliary equipment, which were developed and manufactured by the Group. Group sales are made in accordance with orders and specific requests received from the customers. Most of the consideration for such sales is collected in advance.
|
|
·
|
The Group transferred the significant risks and rewards of ownership of the goods to the purchaser;
|
|
·
|
The Group does not retain continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
|
|
·
|
The amount of the revenues can be measured reliably. The amount of the revenue is not considered as being reliably measured until all the conditions relating to the transaction are met. The Group bases its estimates on past experience, considering the type of customer, type of transaction and special details of each arrangement.
|
|
·
|
It is probable that the economic benefits that are associated with the transaction will flow to the Group; and
|
|
When multiple-element arrangements exist, the amount of revenue allocated to each element is based upon the relative fair values of the various elements. The fair value of each element is determined based on the current market price of each of the elements when sold separately.
|
|
Lease agreements in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made in connection with operating leases are recognized in profit or loss using the straight-line basis over the term of the lease.
|
|
As a general rule, calculation of the basic loss per share is based on the loss that is attributed to the shareholders holding ordinary shares, divided by the weighted average number of ordinary shares in issue during the period.
|
|
For purposes of the calculation of the diluted loss per share, the Group adjusts the loss that is attributed to the holders of the Company’s ordinary shares, and the weighted average number of ordinary shares in issue, to assume conversion of all of the dilutive potential shares.
|
|
The potential shares are taken into account only if their effect is dilutive (increases loss per share).
|
|
s.
|
New international financial reporting standards, amendments to standards and new interpretations:
|
|
Standards, amendments and interpretations to existing standards which are not yet effective and have not been early adopted by the Group:
|
|
a)
|
International Financial Reporting Standard 9 "Financial Instruments" (hereinafter – "IFRS 9" or "the Standard"):
|
|
IFRS 9 deals with the classification, measurement and recognition of financial assets and financial liabilities. The full version of IFRS 9 was published in July 2014. This Standard replaces the present existing directives in International Accounting Standard 39 "Financial Instruments: Recognition and Measurement" (hereinafter IAS 39) regarding the classification and measurement of financial instruments. IFRS 9 leaves the measurement model connected with measuring financial assets, but simplifies it and sets forth three main categories: reduced cost, fair value through other comprehensive income, and fair value through the statement of income. The classification is based on the business model of the entity and on characteristics of the contractual cash flows of the financial asset. Investments in capital instruments will be measured at fair value through the statement of income. Nevertheless, the entity's management can choose,
on the date of initial recognition, irrevocably, to present the changes in fair value of a capital instrument in other comprehensive income, without recycling them to the statement of income.
|
|
The Standard presents a new model for an impairment in value of financial instruments, based on the Expected Credit Loss Model. This model replaces the existing model in IAS 39, based on the Incurred Loss Model.
|
|
Regarding classification and measurement of financial liabilities, there were no changes, excluding the recognition of a change in liabilities intended for fair value through the statement of income, resulting from the entity's own credit risk, in other comprehensive income.
|
|
The Standard will be implemented retrospectively as from annual periods starting January 1, 2018. According to the provisions of IFRS 9 it may be implemented earlier. The Group is examining the expected effect of IFRS 9 on its financial statements.
|
|
b)
|
International Financial Reporting Standard 15 "Revenues from Contracts with Customers" (hereinafter – IFRS 15).
|
|
IFRS 15 will replace, on its first implementation, the directives on the subject of recognizing existing revenues today by International Financial Reporting Standards.
|
|
The core principle of IFRS 15 is that revenues from contracts with customers must be recognized in a way that reflects the transfer of control of goods or services supplied to customers in the framework of the contracts by amounts which reflect the proceeds that the entity expects that it will be entitled to receive for those goods or services.
|
|
IFRS 15 sets forth a single model for recognizing revenues, according to which the entity will recognize revenues according to the said core principle by implementing five stages:
|
|
IFRS 15 relates to the accounting treatment in a wide range of subjects connected with implementing the model, including: recognition of revenues from the varying consideration stipulated in the contract, adjusting the price of the transaction stipulated in the contract in order to reflect the value of time of money and costs of achieving and executing the contract.
|
|
The Standard extends the disclosure requirements regarding revenues and, inter alia, requires providing quantitative and qualitative information regarding significant considerations of management taken into account in order to determine the revenue recognized.
|
|
The Standard will be implemented retrospectively regarding annual periods starting January 1, 2017 or thereafter, considering the exemptions detailed in the transitory provisions to IFRS 15. According to the provisions of IFRS 15 early implementation is possible. The Group is examining the expected effect of IFRS 15 on its financial statements.
|
|
Judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
|
|
Development costs are capitalized according to the accounting policies specified in Note 2F(2). Capitalization of those costs is based on management’s judgment that technological and economic feasibility exist, a situation which exists for the most part when a product development project reaches a milestone, or when the Company enters into agreement for the sale of know-how arising from the development. In determining amounts to be capitalized, management makes assumptions in relation to the future cash flows expected from the assets, discount rate to be used and expected benefit period.
|
|
Total Chief Scientist grants received by the Group and for which there is an obligation to pay royalties totaled approximately - 794 thousand (see also Note 12(a)(2)). Over all of the reporting periods presented, the Company has concluded that, with respect to all of the grants received from the Chief Scientist, there is reasonable assurance that the grants received will not be repaid, therefore the grants were carried to income as reduction of research and development expenses (see also Note 2H).
|
|
Based on management's judgment, no deferred tax assets have been recorded in the Group's books of accounts for current losses carried forward for tax purposes since it is not probable that the Group will be able to utilize those losses in the foreseeable future against taxable income. Had the Group recorded a deferred tax asset for all of the accumulated losses carried forward for tax purposes the accumulated deficit of the Group would have been decreased by approximately NIS 35 million.
|
|
The Group’s activities expose it to a variety of financial risks: market risks (including currency risks, fair value interest rate risk, cash flow interest rate risk and price risk), credit risks and liquidity risks. The Group's overall risk management plan focuses on the unpredictability of financial markets and seeks to minimize the potential adverse effects on the Group’s financial performance.
|
|
Risk management is performed by the finance department according to the policy authorized by the board of directors.
|
|
The Company operates internationally and is exposed to foreign exchange risks due to exposure to foreign currencies, primarily the U.S. Dollar. Foreign exchange risk arises from future commercial transactions, assets or liabilities denominated in foreign currency.
|
|
The Group’s policy to reduce the exposure to changes in exchange rates is based on maintaining, where possible, the balances of current monetary assets, according to the currency of the current liabilities.
|
|
As of December 31, 2014, if the functional currency of the Company had weakened/strengthened by 10% against the Dollar, with all other variables held constant, the loss for the year would have been lower/higher by NIS 2,184 thousand (2013- NIS 749 thousand, 2012- NIS 117 thousand), primarily as a result of foreign exchange gains/losses on cash and cash equivalents and short-term deposits.
|
|
The Group has investments in financial instruments which are traded on the stock exchange, and are classified as financial assets at fair value through profit or loss; the Company is exposed to fluctuations in the price of the security based on stock exchange market prices.
|
|
The following table summarizes the changes in fair value of financial instruments which are sensitive to changes in the price of traded securities:
|
Profit from changes
|
Loss from changes
|
|||||||||||||||||||
10% increase in value
|
5% increase in value
|
Fair value December 31, 2014
|
5% decrease in value
|
10% decrease in value
|
||||||||||||||||
NIS in thousands
|
||||||||||||||||||||
Government bonds
|
819 | 409 | 8,187 | (409 | ) | (819 | ) |
Profit from changes
|
Loss from changes
|
|||||||||||||||||||
10% increase in value
|
5% increase in value
|
Fair value December 31, 2013
|
5% decrease in value
|
10% decrease in value
|
||||||||||||||||
NIS in thousands
|
||||||||||||||||||||
Government bonds
|
796 | 398 | 7,958 | (398 | ) | (796 | ) |
|
Credit risks are treated at the Group level. Credit risks arise from cash and cash equivalents, bank deposits and from credit exposures in connection with outstanding receivables and committed transactions.
|
|
The Group's cash and cash equivalents and short-term deposits as of December 31, 2014 and 2013 are held with large established banks with, at least, AA rating. The Group's marketable securities are managed by a portfolio management company. As of December 31, 2014 the Group's securities are comprised solely of short-term government debentures.
|
|
Most of the Company's sales are made to a limited number of customers. To reduce the credit risk, the Company generally receives as advance payment a substantial portion of the consideration receivable from the relevant parties.
|
|
No credit limits were exceeded during the reported periods and Group's management does not expect any losses from non-performance of these parties.
|
|
Cash flow forecasting is performed by the Group's finance department. The finance department monitors rolling forecasts of the Company's liquidity requirements to ensure that it has sufficient cash to meet operational needs, while maintaining sufficient headroom on its undrawn committed borrowing facilities, so that the Group does not breach any of its credit facilities.
|
|
The Group invests cash surpluses in interest bearing investments such as time deposits and short-term government debentures, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient headroom as determined by the above-mentioned forecasts.
|
|
Liquidity risk arises from financial liabilities due to payable balances (except for institutions and advanced payments) and amounted to NIS 3,377 thousand on December 31, 2014 (2013 - NIS 2,304 thousand).
|
|
These liabilities are classified as current liabilities, and are expected to mature within 12 months from the date of the statement of financial position.
|
|
The following is an analysis of the financial instruments measured at fair value, according to valuation methods. The levels are defined as follows:
|
|
·
|
Inputs other than quoted prices included in Level 1, that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is derived from prices) (Level 2).
|
|
·
|
Inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3).
|
|
The following table presents the group's financial assets and liabilities that are measured at fair value 31 December 2014 and 31 December 2013:
|
2013
|
||||||||||||||||||
Level 1
|
Level 3
|
Total
|
Level 1
|
Level 2
|
Total
|
|||||||||||||
NIS in thousands
|
||||||||||||||||||
Financial assets at fair value through profit or loss -
|
||||||||||||||||||
financial assets held for trading
|
8,187 | 8,187 | 7,958 | 7,958 | ||||||||||||||
Financial liabilities at fair value through profit or loss -
|
||||||||||||||||||
Warrants at fair value
|
428
|
428 |
1,678
|
1,678 |
|
The fair value of financial instruments traded in active markets is based on quoted market prices at the date of the statement of financial position. A market is considered to be active if the quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency and those prices represent actual and regularly occurring market transactions on an arm's length basis.
|
|
The quoted market price used for financial assets at fair value through profit or loss held by the group is the current bid price at the time of closing of trade.
|
|
The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
|
|
The financial liability at fair value through profit or loss which is held by the Group as of December 31, 2013 and included in Level 2 is the liability for warrants (Orbimed) issued to investors as described in Note 13(b)(2).
|
|
The Company’s financial liability at fair value through profit or loss included in level 3 on December 31, 2014 is the obligation for warrants (Orbimed) (see Note 13(b)(2)) and warrants (series E) (see Note 13(b)(5)).
|
|
In calculating the value of warrants (Orbimed) a binomial model was used. The fair value of these options at December 31, 2014 is nil. The standard deviation used to calculate the fair value of warrants (Series Orbimed) is 39%. If the change in standard deviation for that warrants shifted +/- 5%, the impact on profit or loss would be NIS 4 thousands. The higher the standard deviation, the higher the fair value. The risk-free interest rate between the periods is derived from a curve of “Shachar” type Israel government bond for a period which corresponds to the term of the warrants at the time of calculation was made. The expected volatility is based on fluctuations in the price of Company’s share.
|
|
In calculating the value of warrants (Series E) a Black & Scholes model was used. The fair value of these warrants at December 31, 2014 is NIS 428 thousand. The standard deviation used to calculate the fair value of warrants (Series E) is 47%. If the change in standard deviation for that warrants shifted +/- 5%, the impact on profit or loss would be NIS 65 thousands. The higher the standard deviation, the higher the fair value. The risk-free interest rate between the periods is derived from a curve of “Shachar” type Israel government bond for a period which corresponds to the term of the warrants at the time of calculation was made. The expected volatility is based on fluctuations in the price of Company’s share.
|
|
The following table presents the changes in Level 3 instruments for the year ended 31 December 2014:
|
Warrants
|
||||
NIS thousands
|
||||
Opening balance at 1 January
|
-- | |||
Issuance of warrants (see note 13(b)(5))
|
2,355 | |||
Transfer to Level 3*
|
2,317 | |||
Gains and losses recognized in profit or loss
|
(4,244 | ) | ||
Closing balance at 31 December
|
428 | |||
Total unrealized profits for the period included in profit or loss for liabilities held at the end of the reporting period
|
4,244 |
*
|
In 2014, the Group transferred warrants from level 2 to level 3 due to the fact that during the second quarter of 2014 the Company commenced using a standard deviation parameter that was calculated based on historical share market prices instead of current standard deviation embedded in the market price of traded warrants.
|
As of December 31
|
||||||||
2014
|
2013
|
|||||||
NIS in thousands
|
||||||||
Cash in banks
|
7,442 | 1,280 | ||||||
Short-term bank deposits
|
34,625 | 22,646 | ||||||
42,067 | 23,926 |
|
The currencies in which the cash and cash equivalents are denominated or to which they are linked are as follows:
|
As of December 31
|
||||||||
2014
|
2013
|
|||||||
NIS in thousands
|
||||||||
NIS
|
18,809 | 22,922 | ||||||
US Dollar
|
22,965 | 847 | ||||||
Other currencies
|
293 | 157 | ||||||
42,067 | 23,926 |
|
The carrying amount of the cash and cash equivalents approximates their fair value as the effect of the discount is not material.
|
|
Short-term deposits include deposits with banks the period for maturity of which is more than 3 months and up to 12 months.
|
|
The currencies in which the cash and cash equivalents are denominated or to which they are linked are as follows:
|
As of December 31,
|
||||
NIS in thousands
|
||||
NIS
|
171 | |||
US Dollar
|
6,945 | |||
Other currencies
|
957 | |||
8,073 |
As of December 31, 2014
|
||||||||||||||||
NIS unlinked
|
Denominated inUS Dollars
|
Denominated in other currencies
|
Total
|
|||||||||||||
NIS in thousands
|
||||||||||||||||
Open accounts
|
301 | 180 | 481 | |||||||||||||
Credit cards
|
32 | 32 | ||||||||||||||
32 | 301 | 180 | 513 | |||||||||||||
As of December 31, 2013
|
||||||||||||
NIS unlinked
|
Denominated in US Dollars
|
Total
|
||||||||||
NIS in thousands
|
||||||||||||
Open accounts
|
134 | 134 | ||||||||||
Credit cards
|
32 | 82 | 114 | |||||||||
32 | 216 | 248 |
As of December 31
|
||||||||
2014
|
2013
|
|||||||
NIS in thousands
|
||||||||
Institutions
|
329 | 190 | ||||||
Prepaid expenses
|
1,276 | * | 655 | * | ||||
Advances to suppliers
|
127 | 745 | ||||||
Other
|
6 | 14 | ||||||
1,738 | 1,604 |
|
* Including NIS 716 thousand (December 31, 2013: NIS 360 thousand) materials used to manufacture MUSE systems which will be used, for testing, training and demonstrations.
|
|
Balances included in respect of monetary items among "trade and other receivables" do not include doubtful accounts.
|
|
The carrying amounts of other receivables (except for the non-monetary balances from institutions, prepaid expenses, and advances to suppliers) approximate their fair value as the effect of the discount is not material.
|
|
The maximum exposure to credit risks as of the date of the statement of financial position in respect of accounts receivables is the carrying amount of all the aforementioned group of receivables net of the non-monetary balances (from institutions, prepaid expenses and advances to suppliers), amounting to NIS 519 thousand (December 31, 2013 - NIS 262 thousand). The Group does not hold any collateral in respect of these debt balances.
|
|
Other receivables balances (except for the non-monetary balances from institutions, prepaid expenses and advances to suppliers) are denominated in NIS.
|
As of December 31
|
||||||||
2014
|
2013
|
|||||||
NIS in thousands
|
||||||||
Raw materials and supplies
|
1,453 | 1,310 | ||||||
Work in progress
|
68 | 198 | ||||||
Finished products
|
423 | 400 | ||||||
1,944 | 1,908 |
As of December 31
|
||||||||
2014
|
2013
|
|||||||
NIS in thousands
|
||||||||
Current inventory
|
1,403 | 1,060 | ||||||
Non-current inventory
|
541 | 848 | ||||||
1,944 | 1,908 |
|
The cost of inventories recognized as an expense and included in "cost of revenues" amounted to NIS 625 (2013: NIS 622).
|
Cost
|
Accumulated Depreciation
|
|||||||||||||||||||||||||||||||
Balance at beginning of year
|
Additions during the year
|
Balance at end of year
|
Balance at beginning of year
|
Additions during the year
|
Balance at end of year
|
Depreciated balance
|
||||||||||||||||||||||||||
December 31
|
||||||||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||||||||
Property and equipment:
|
NIS in thousands
|
NIS in thousands
|
NIS in thousands
|
|||||||||||||||||||||||||||||
Machinery and equipment
|
2,492 | 143 | 2,635 | 1,530 | 346 | 1,876 | 759 | 962 | ||||||||||||||||||||||||
Leasehold improvements
|
92 | 37 | 129 | 92 | 37 | 129 | ||||||||||||||||||||||||||
Office furniture and equipment (including computers)
|
1,305 | 60 | 1,365 | 1,114 | 65 | 1,179 | 186 | 191 | ||||||||||||||||||||||||
3,889 | 240 | 4,129 | 2,736 | 448 | 3,184 | 945 | 1,153 |
|
b.
|
Composition of property and equipment and accumulated depreciation thereon, grouped by major classifications and changes therein, and their movements during 2013:
|
Cost
|
Accumulated Depreciation
|
|||||||||||||||||||||||||||||||
Balance at beginning of year
|
Additions during the year
|
Balance at end of year
|
Balance at beginning of year
|
Additions during the year
|
Balance at end of year
|
Depreciated balance
|
||||||||||||||||||||||||||
December 31
|
||||||||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||||||||
Property and equipment:
|
NIS in thousands
|
NIS in thousands
|
NIS in thousands
|
|||||||||||||||||||||||||||||
Machinery and equipment
|
2,264 | 228 | 2,492 | 1,300 | 230 | 1,530 | 962 | 964 | ||||||||||||||||||||||||
Leasehold improvements
|
92 | 92 | 92 | 92 | ||||||||||||||||||||||||||||
Office furniture and equipment (including computers)
|
1,235 | 70 | 1,305 | 1,029 | 85 | 1,114 | 191 | 206 | ||||||||||||||||||||||||
3,591 | 298 | 3,889 | 2,421 | 315 | 2,736 | 1,153 | 1,170 |
|
c.
|
Composition of property and equipment and accumulated depreciation thereon, grouped by major classifications and changes therein, and their movements during 2012:
|
Cost
|
Accumulated Depreciation
|
Depreciated balance
|
||||||||||||||||||||||||||||||
Balance at | Additions | Balance | December | Additions | Balance |
December 31,
|
||||||||||||||||||||||||||
beginning of year
|
during the year
|
at end of year
|
31, 2012
|
during the year
|
at end of year
|
2012
|
2011
|
|||||||||||||||||||||||||
NIS in thousands
|
NIS in thousands
|
NIS in thousands
|
NIS in thousands
|
|||||||||||||||||||||||||||||
Property and equipment:
|
||||||||||||||||||||||||||||||||
Machinery and equipment
|
2,024 | 240 | 2,264 | 1,107 | 193 | 1,300 | 964 | 917 | ||||||||||||||||||||||||
Leasehold improvements
|
92 | 92 | 92 | 92 | ||||||||||||||||||||||||||||
Office furniture and equipment (including computers)
|
1,183 | 52 | 1,235 | 944 | 85 | 1,029 | 206 | 239 | ||||||||||||||||||||||||
3,207 | 384 | 3,591 | 2,051 | 370 | 2,421 | 1,170 | 1,156 |
|
Commencing with tax year 2008 the results of the Company for tax purposes are measured in nominal values. Through the end of tax year 2007 the results of the Company for tax purposes were measured having regard to the changes in the Israeli consumer price index ("CPI"), in accordance with the Income Tax Law (Inflationary Adjustments), 1985 (hereinafter-the the "Inflationary Adjustments Law”). The transitional provisions regarding the discontinuation of the application of the Inflationary Adjustments Law stipulate that losses carried forward for tax purposes, deduction for depreciation, and real loss from sale of a depreciable asset or security will be linked to the CPI until the end of tax year 2007 and linkage shall be discontinued
as of this date.
|
|
The income of the Company (other than income which is eligible for reduced tax rates in accordance with encouragement laws in Israel, see C below) is subject to corporate tax at the regular corporate tax rates.
|
|
On December 6, 2011, the Law for the Amendment of the Tax Burden (Legislative Amendments), 2011 was published in the official gazette. Under this law, a previously approved gradual decrease in corporate tax was discontinued and the corporate tax rate was increased to 25% beginning with 2012.
|
|
On August 5, 2013, the Law for the Amendment of National Priorities (Legislative Amendments for Achieving the Budgetary Goals for 2013-2014), 2013 (hereinafter - the Law) was published in official gazette. The Law stipulated, among other things, that the corporate tax rate should be increased to 26.5% (instead of 25%) for 2014 and thereafter. (As to the increase of tax rates on the income of a Preferred Enterprise as set out in the Law for the Encouragement of Capital Investments-1959, see C below).
The Company’s capital gains are subject to tax at the regular corporate tax rates.
|
|
Tax benefits under the Law for the Encouragement of Capital Investments-1959 (hereinafter- the "Law for the Encouragement of Capital Investments"):
|
|
Under the Law for the Encouragement of Capital Investments, companies are entitled to various tax benefits by virtue of their "approved enterprise" or "benefited enterprise" status subject to the fulfillment of certain conditions. In addition, companies may be entitled to additional tax benefits as "foreign investors' companies," as defined by the Law for the Encouragement of Capital Investments.
|
|
The Law for Encouragement of Capital Investments was amended as part of the Economic Policy Law for the years 2011 and 2012 (Legislative Amendments), 2011, which was passed in the Knesset on December 29, 2010 (hereinafter – the amendment). The amendment became effective as from January 1, 2011.
|
|
The amendement sets alternative benefit tracks to the ones that were in place under the provisions of the Law for the Encouragement of Capital Investments, as follows: investment grants track designed for enterprises located in national development zone A and two new tax benefits tracks (preferred enterprise and a special preferred enterprise), which provide for application of a unified tax rate to all preferred income of the company, as defined in the law.
|
|
Under the amended law, a company which qualifies for benefits under the encouragement law prior to the amendment thereof may opt for application of the amendment on each year, commencing with the first year in which the amendment became effective (2011) thereby making available to itself the tax benefits in accordance with the tracks set in the amendment subject to the fulfillment of certain conditions. A company's election for application of the amendment is irrevocable and once it opts for application thereof, it will no longer be entitled to the tax benefits available to it under the pre-amendment regime of the Law for the Encouragement of Capital Investments. A company will be allowed to continue and enjoy the tax benefits available under the law prior to its amendment until the end of the period of benefits, as defined in the law.
|
|
The Company has not decided at this stage whether and when to elect the application of the amendment of the law. Once the Company generates taxable income, it is currently scheduled to be eligible for tax benefits available under the Law for the Encouragement of Capital Investments before it was amended in accordance with the provisions of the benefited enterprise regime, as follows:
|
|
During the period of benefits - 10 years commencing in the first year in which the Company earns taxable income from the benefited enterprises (provided the maximum period to which it is restricted by law has not elapsed) - the income from the benefited enterprises owned by the Company is tax exempt so long as it is not distributed or deemed to be distributed. The portion of income which qualifies for tax exemption as above is based on the ratio between the turnover relating to the “benefited enterprise” and the total turnover of the Company.
|
|
In the event of a dividend distribution or deemed dividend distribution from income which was previously exempt, the Company will be subject to tax on the grossed-up amount of the (deemed) dividend, according to the tax rate which would have applied to the income were it not eligible for the exemption.
|
|
The Company has not yet utilized the tax benefits for the main plant, nor for the expansion of the plant.
|
|
The entitlement to the above benefits is conditional upon the Company's fulfillment of the conditions stipulated by the Law for the Encouragement of Capital Investments, and the regulations promulgated thereunder. In the event of failure to comply with these conditions, the benefits may be cancelled and the Company may be required to refund the amount of the benefits, in whole or in part, with the addition of interest. As of the date of approval of these financial statements, the Company has met the aforementioned conditions.
|
|
Carry forward losses aggregate NIS 133 million and NIS 112 million as of December 31, 2014 and 2013, respectively. The Company did not record deferred taxes for these losses, as the utilization thereof is not expected in the foreseeable future.
|
|
Tax advances for certain disallowed expenses paid to the tax authorities are charged to income on a current basis; the Company does not record these advances as a tax asset in its books of accounts, as utilization thereof is not expected in the foreseeable future.
|
|
The total tax advances paid for certain disallowed expenses which have not yet been offset is approximately NIS 137 thousand as of December 31, 2014 (December 31, 2013- NIS 125 thousand).
|
|
f.
|
Taxes on income included in the Statements of Loss and Other Comprehensive Loss for the periods presented:
|
|
The following is reconciliation between the “theoretical” tax, which would apply to the Company if all of its income were taxed at the regular rate applicable to the Company in Israel (see A2 above) and the amount of tax reflected in the Statements of Loss for the reported year:
|
2014
|
2013
|
2012
|
||||||||||
NIS in thousands
|
||||||||||||
Loss before taxes on income as reported in the Statements of Loss and Other Comprehensive Loss
|
(22,616 | ) | (5,104 | ) | (12,339 | ) | ||||||
Theoretical tax saving in respect of this gain or loss
|
(5,993 | ) | (1,276 | ) | (3,085 | ) | ||||||
Increase in taxes arising from tax losses created in the reported year in respect of which deferred taxes were not recorded
|
5,980 | 1,191 | 3,170 | |||||||||
Tax benefit (taxes on income) reported in the Statements of Loss and Other Comprehensive Loss
|
(13 | ) | (85 | ) | 85 |
|
The Company has not received final tax assessments from the date it commenced its operations (January 1, 2000).
|
|
As a general rule, tax assessments filed by the Company through tax year 2010 are considered to be final due to the expiration of the statute of limitations set under law.
|
As of December 31
|
||||||||
2014
|
2013
|
|||||||
NIS in thousands
|
||||||||
Payroll and related expenses
|
619 | 469 | ||||||
Wages and fees of related parties and related expenses
|
617 | 199 | ||||||
Institutions
|
362 | 306 | ||||||
Provision for vacations and recreation pay
|
551 | 514 | ||||||
Advanced payments from customers
|
275 | 770 | ||||||
Accrued expenses
|
799 | 594 | ||||||
3,223 | 2,852 |
As of December 31
|
||||||||
2014
|
2013
|
|||||||
NIS in thousands
|
||||||||
Trade payables:
|
||||||||
NIS unlinked
|
387 | 283 | ||||||
US Dollar
|
184 | 239 | ||||||
Euro
|
220 | 6 | ||||||
791 | 528 |
As of December 31
|
||||||||
2014
|
2013
|
|||||||
NIS in thousands
|
||||||||
Others:
|
||||||||
NIS unlinked
|
1,335 | 1,466 | ||||||
US Dollar
|
1,241 | 274 | ||||||
Euro
|
10 | 36 | ||||||
2,586 | 1,776 |
|
The balances of the financial instruments included within the trade payables and other payables approximate their fair value as the effect of the discounting immaterial.
|
|
1)
|
In 2007 the management of the Generic Technological Research and Development Department in the Israeli Ministry of Industry and Commerce (hereinafter "MAGNET”) approved the activities of the consortium of bio-medical photonics (hereinafter- the “Consortium”). The Company was one of the participants of the Consortium.
|
|
The Consortium was active from June 2007 until the end of 2012. The consortium was dissolved at the end of 2013.
|
|
Following are details of Consortium grants recognized by the Company during the years 2012-2013 that were offset against research and development expenses (see Note 14):
|
|
2)
|
On July 12, 2011 the office of the Chief Scientist of the Ministry of Industry, Trade and Labor informed the Company that it resolved to approve the Company’s application for support in a joint project for the development of an innovative small-diameter endoscope used in dental surgery (hereinafter- the “Project”).
|
|
Following are details of the Chief Scientist grants that the Company recognized during the years 2012-2013 that were offset against research and development expenses (see Note 14):
|
|
In accordance with provisions of the Encouragement of Industrial Research and Development Law - 1984, the Company is required to pay royalties at the rate of 3% to 5% on all of its revenues from the product, up to 100% of the amount of the grant received (approximately NIS 794 thousand) by the Company with the addition of annual interest and linkage (see also note 3 in regard of Government Grants).
|
|
Since the commencement of the Project and of the date of approval of the financial statements, no royalties' payments were required.
|
|
Receipt of the grants for the above plans is subject to meeting conditions set out in directives of the manager of Ministry of Industry and Commerce and the instructions of approval issued by the MAGNET committee.
|
|
In the event of failure to comply with the terms attached to the receipt of the grants, the Company may be required to refund the amount of the grants, in whole or in part, with interest and linkage differences from the date of receipt. In the opinion of Company's management, as of the date of approval of these financial statements, the Company meets all of the conditions set out.
|
|
On January 10, 2010 the Company and Voyage Medical Inc. (a US medical device company, hereinafter – the “Customer”) entered into a multi-year supply agreement (hereinafter – the "Agreement") for supply of disposable miniature video cameras and control systems which were developed by the Company. Based on order and delivery date specified in the agreement, the minimum consideration of the Agreement was approximately USD 6.5 million.
|
|
The Agreement was for a six year period until December 31, 2015. However, each party could terminate the Agreement in the event of a fundamental breach of the agreement or bankruptcy of the other party.
|
|
Both parties agreed on continuing development and customization of products to comply with the updated technical specifications of the Customer in consideration for an additional advance payment of approximately USD 345 thousand (NIS 1,277 thousand) upon signing of the agreement. The consideration was recorded as deferred revenue, and such revenue was recognized over the term of the agreement (6 years). Additionally, during 2010 and 2011, various orders were made by the Customer (and paid by the Customer) in the amount of NIS 1,029 thousands to be recognized upon delivery.
|
|
In December 2013, the Company requested assurances from the Customer to ensure that it can meet its obligations under the supply agreement. The assurances were requested after concerns arose regarding the intention and/or ability of the Customer to do so. On February 12, 2014, after suitable assurances were not received from the Customer, in accordance with the terms of the supply agreement, the Company canceled the said agreement. As a result of the cancellation of the agreement the Company recognized the remaining deferred revenue balance (of the initial NIS 1,111 thousands) amounting to NIS 370 thousands.
In addition, since almost all of the products relating to the remaining additional advance payments received in 2010 and 2011 totaling NIS 875 thousands were never delivered to the Customer (excluding a few units relating to an immaterial advance payment), the said advance payments were recorded to Other Income, Net.
|
2014
|
2013
|
|||||||
NIS in thousands
|
||||||||
Revenue
|
370 | 185 | ||||||
Other income, net
|
875 | |||||||
Current liabilities - presented in the statements of financial position among “accounts payable”
|
185 | |||||||
Long-term liability – presented in the statements of financial position among “long-term advanced payments"
|
1,167 |
|
The Group has lease agreements for buildings it uses. These agreements expire during 2015. The Group is acting in order to extend these agreements.
|
|
The annual lease fees are linked to the CPI and total approximately NIS 532 thousand as of December 31, 2014.
|
|
The Company provided bank guarantees in favor of the lessor. As of December 31, 2014 the guarantees total approximately NIS 186 thousand.
|
Number of shares
|
Amount
|
||||||||||||||||||||||||
Authorized
|
Issued and
paid-up
|
Authorized
|
Issued and paid-up
|
||||||||||||||||||||||
December 31
|
December 31
|
December 31
|
December 31
|
||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||
In thousands
|
NIS in thousands
|
Ordinary shares of NIS 0.01 par value*
|
500,000 | 500,000 | 249,945 | 164,674 | 5,000 | 5,000 | 2,499 | 1,646 |
|
* Traded on the Tel Aviv Stock exchange at NIS 0.261 per ordinary share of NIS 0.01 par value on December 31, 2014.
|
|
2)
|
The ordinary shares confer upon their holders voting rights and the right to participate in shareholders’ meetings, the right to receive profits and the right to participate in surplus assets in the event of liquidation of the Company.
|
|
1)
|
On June 3, 2012 the Company published a private placement report, according to which on June 27, 2012 the Company issued the following securities to Dexxon Technologies 2005 Ltd: 6,666,666 ordinary shares of the Company and 3,333,333 warrants (Series 7) of the Company. On October 31, 2013 all of the said warrants expired due to ending of their exercise period. |
|
The immediate proceeds (gross) from the allotment of all of the aforementioned securities amounted to NIS 6,600 thousand.
|
|
Net proceeds from the issuance, net of cash issuance expenses, amounted to approximately NIS 6,580 thousand and were attributed to shares and warrants in accordance with their relative fair values.
|
|
2)
|
On March 3, 2013 the Company issued to Orbimed Israel Partners Limited Partnership (hereinafter-“Orbimed”) 39,945,474 ordinary shares of the Company and 39,945,474 warrants to purchase 39,945,474 additional ordinary shares (hereinafter- the “Warrants”). The Warrants are exercisable in return for payment of the exercise price of NIS 0.917 per share during the 18 months following the allotment of the Warrants, and NIS 1.1004 per share as from the end of the said 18 months until the end of 36 months following the allotment of the Warrants. The Warrants can also be exercised using a cashless exercise mechanism, in which the number of shares arising from the exercise of the warrant would be reduced by a number of shares, the value of which equals the cash exercise price. The Warrants would be adjusted in respect of certain events as set out in the agreement (e.g. dividend, distribution of bonus shares, etc.). |
|
In accordance with International Accounting Standard 32: “Financial Instruments: Presentation”, these Warrants are a “financial liability”, which was classified in the statement of financial position as a non-current liability among “warrants at fair value”.
|
|
The immediate proceeds (gross) from the allotment of all the securities offered amounted to NIS 29,664 thousand (net 29,502 thousand NIS). A total of NIS 13,222 thousand was attributed to the Warrants (Orbimed) representing the fair value thereof on that date and a total of NIS 16,280 thousand (net of issuance expenses), was allocated to the issued shares.
|
|
3) On September 1, 2013 warrants issued to investors (Series 5) expired as the exercise period was ended.
|
|
4) On October 17, 2013 the Company issued a shelf offering report in accordance with a shelf prospectus of the Company dated August 28, 2013.
|
|
In accordance with results of the offering to the public the Company issued 344,936 units at the price of NIS 72 per unit. Each unit was comprised of 100 ordinary shares and 50 warrants (Series 8).
|
|
Each warrant (Series 8) is exercisable into 1 share in consideration for an exercise price of NIS 1.08 until October 17, 2016.
|
|
The immediate proceeds (gross) from the allotment of all securities offered amounted to NIS 24,835 thousand. In addition, if all of the warrants (Series 8), offered in accordance with the shelf offering report, are exercised, the Company will receive an additional amount of NIS 18,627 thousand (gross).
|
|
Net proceeds from the issuance, net of cash issuance expenses, amounted to NIS 24,326 thousand and were attributed to shares (a total of NIS 22,655 thousand) and warrants (a total of NIS 1,671 thousand) in accordance with their relative fair values.
|
5)
|
On August 21, 2014 and August 26, 2014, the Company issued in a private issue, a total of 85,271,536 ordinary shares of the Company, and also a total of 34,108,614 warrants (Series E) for the purchase of an additional 34,108,614 shares for total cash consideration of approximately NIS 39 million. Each warrant (Series E) is exercisable into 1 ordinary share of the Company at an exercise price of NIS 0.627 per share during the 36 months following the allotment. |
|
21,847,610 warrants (Series E) of the warrants which were issued may, under certain circumstances, also be exercised via a cashless exercise mechanism, whereby the number of shares the value of which equals the exercise premium in cash will be deducted from the number of shares to be issued upon exercise of the warrant. In addition, the number of warrants outstanding will be adjusted to certain events specified in the warrant agreement (such as: dividends, distribution bonus shares, etc.)
|
|
In accordance with International Accounting Standard 32: “Financial Instruments: Presentation”, these warrants are a “financial liability”, which was classified in the statement of financial position as a non-current liability among “warrants at fair value”.
|
|
The remainder of the warrants which do not have a cashless exercise mechanism were classified as an equity instrument.
|
|
Of the securities issued 7,663,109 shares and 3,065,244 warrants (Series E) were issued to OrbiMed Israel Partners Limited Partnership, which is one of the controlling shareholders of the Company.
|
|
Net proceeds from the issuance, net of cash issuance expenses, amounted to approximately NIS 36 million.
|
|
The fair value of 12,260,974 warrants which were issued on August 21, 2014 was approximately NIS 1,289 thousand. Calculation of fair value was made and based on the following assumptions: quoted share price on August 21, 2014 of NIS 0.434, standard deviation of 51.8%, risk-free interest rate of 1.06%, no dividend expectation, and expected period to exercise of 3 years.
|
|
The fair value of 21,847,640 warrants which were issued on August 26, 2014 was approximately NIS 2,429 thousand. Calculation of fair value was made and based on the following assumptions: quoted share price on August 26, 2014 of NIS 0.446, standard deviation of 51.8%, risk-free interest rate of 0.96%, no dividend expectation, and expected period to exercise of 3 years.
|
|
As of December 31, 2014 a liability in the amount of NIS 428 thousand (December 31, 2013 - NIS 1,678 thousand) was presented in respect of the aforementioned warrants, representing their fair value on that date. The decrease in the fair value of the warrants over the period from the allotment date until the date of the statement of financial position was recorded in the Statements of Loss and Other Comprehensive Loss among “Profit from change in fair value of warrants issued to investors”. For further details of the measurement and classification warrants, see Note 4 (2) c.
|
|
The gross proceeds were attributed as follows: first to the fair value of the warrants classified as financial liabilities at fair value through profit or loss and the remainder was attributed between shares and warrants classified as equity in accordance with their relative fair values.
|
|
Issuance expenses were attributed to equity and liability in proportion with the allocation of the proceeds, as detailed below:
|
EQUITY
|
LIABILITIES
|
|||||||||||||||
Ordinary share capital and share premium
|
Warrants
|
Warrants
|
Total
|
|||||||||||||
NIS in thousands
|
||||||||||||||||
Proceeds gross
|
35,288 | 1,258 | 2,355 | 38,901 | ||||||||||||
Issuance expenses
|
(2,830 | ) | (101 | ) | (189 | )* | 3,120 | |||||||||
Proceeds net
|
32,458 | 1,157 | 2,166 | 35,781 |
|
As detailed in the transaction report, and in accordance with the share purchase agreements, the Company undertook, amongst other matters, that within 7 months of the closing of the share issuance, it will act to release the shares (including the shares underlying the warrants) from statutory lockup periods under the Israeli Securities Law.
|
|
On January 22, 2015 the Company filed a non-uniform offering shelf offering report signed by the pricing underwriter, Rosario Underwriting Services (A.S.) Ltd., which permitted the resale of the shares (including the shares underlying the warrants), in accordance with the Israeli Securities Law and Regulations.
|
|
As a result, the Company fulfilled its aforesaid obligation to permit resale by the investors of their shares (including the shares underlying the warrants).
|
|
In addition, with the issuance of the above noted shelf offering report the right to exercise the warrants (Series E) via cashless exercise was expired.
|
|
Additionally, the Company filed a non-public first draft of a registration statement with the US Securities and Exchange Commission on November 17, 2014.
|
|
1)
|
Through December 31, 2014, the Group granted for no cash consideration, 18,243,900 options to employees and other service providers, of which 11,110,000 options are outstanding as of that date as follows:
|
Date of grant
|
Plan
|
Number of options granted
|
exercise price (NIS)**
|
Fair value on grant date-NIS in thousands
|
Number of options outstanding- December 31, 2014
|
Number of options exercisable at 31 December 2014
|
Expiration date
|
||||||||||||||||
October 2008
|
Series 4
|
(*)270,000 | 1.83 | 237 | 0 | 0 | |||||||||||||||||
November 2008
|
Series 4
|
(*)300,000 | 1.83 | 276 | 0 | 0 | |||||||||||||||||
November 2008
|
Series 4
|
579,000 | 1.83 | 526 | 0 | 0 | |||||||||||||||||
February 2010
|
Series 6
|
(*)790,000 | 2.26 | 491 | 270,000 | 270,000 | |||||||||||||||||
February 2010
|
Series 6
|
970,000 | 2.26 | 538 | 550,000 | 550,000 | |||||||||||||||||
September 2010
|
Series 6
|
80,000 | 2.26 | 64 | 0 | 0 | |||||||||||||||||
September 2011
|
Series A
|
(*)585,000 | 0.91 | 279 | 250,000 | 187,500 | |||||||||||||||||
November 2011
|
Series A
|
1,420,000 | 0.91 | 536 | 1,000,000 | 750,000 | |||||||||||||||||
April 2012
|
Series A
|
230,000 | 0.91 | 117 | 200,000 | 100,000 | |||||||||||||||||
April 2012
|
Series B
|
(*)220,000 | 0.68 | 126 | 0 | 0 |
April 23, 2018
|
||||||||||||||||
April 2012
|
Series B
|
1,150,000 | 0.68 | 659 | 960,000 | 640,000 |
April 23, 2018
|
||||||||||||||||
October 2013
|
Series C
|
(***)4,500,000 | 0.83 | 1,357 | 4,500,000 | 1,049,999 | |||||||||||||||||
July 2014
|
Series D
|
(*)310,000 | 0.537 | 56 | 310,000 | 0 | |||||||||||||||||
July 2014
|
Series D
|
3,070,000 | 0.537 | 554 | 3,070,000 | 0 |
(***)
|
The board of directors meeting dated August 12, 2013, and the general meeting of the Company's shareholders dated September 29, 2013 authorized the allotment of 4,500,000 options (Series C), to the CEO of the Company. The options (Series C) are subject to the conditions of the option allotment plan, for the allotment of non-marketable options to officers, employees and advisors of the Group. Each option is exercisable into one ordinary Company share ofNIS 0.01 par value at the exercise price of NIS 0.83.
|
|
(1)
|
3,200,000 options will vest in 24 equal monthly equal batches, on the first day of each month, for a period of 24 months, commencing one year following the date employment started according to the agreement, i.e., commencing October 1, 2014.
|
|
(2)
|
650,000 options will vest on June 30, 2014, provided that a target is met which was set by the Company’s board of directors and which is related to clinical activities of the MUSE system in the USA through this date. These options were vested as of June 30, 2014.
|
|
(3)
|
650,000 options will vest on February 1, 2015 provided that a sales revenues target is met in 2014, as set by the Company’s board of directors. In accordance with the decision of the Company's board, these options expired on March 31, 2015 due to failure to meet the target.
|
|
Vesting conditions of all of the above options, except for the 1,300,000 options (Series C) as detailed in (2) and (3) above are service conditions.
|
|
The fair value of all of the options was calculated using the Black Scholes options pricing model, and based on the following assumptions:
|
Date of grant
|
Fair value on grant date-NIS in thousands
|
Share price on date of grant
|
Expected dividend
|
Expected volatility
|
Risk free interest
|
Vesting conditions
|
Expected term
|
||||||||||||||
April 2012
|
117 | 0.917 |
None
|
54 | % | 4.01 | % |
four equal batches, following one, two, three and four years from their grant date
|
6 years
|
||||||||||||
April 2012
|
785 | 0.917 |
None
|
54 | % | 4.01 | % |
three equal batches, following one, two and three years from their grant date
|
6 years
|
||||||||||||
October 2013
|
1,357 | 0.748 |
None
|
46 | % | 2.53 | % |
See above
|
5 years
|
||||||||||||
July 2014
|
610 | 0.482 |
None
|
40 | % | 1.90 | % |
four equal batches, following one, two, three and four years from their grant date
|
6 years
|
|
2)
|
The movement in the number of share options and the weighted averages of their exercise prices are as follows:
|
For the year ended December 31
|
||||||||||||||||||||||||
2014
|
2013
|
2012
|
||||||||||||||||||||||
Number of options
|
Weighted average of exercise price-(NIS)
|
Number of options
|
Weighted average of exercise price-(NIS)
|
Number of options
|
Weighted average of exercise price-(NIS)
|
|||||||||||||||||||
Outstanding at the beginning of year
|
9,150,000 | 1.07 | 6,683,000 | 1.46 | 5,539,000 | 1.69 | ||||||||||||||||||
Granted
|
3,380,000 | 0.537 | 4,500,000 | *0.83 | 1,600,000 | *0.71 | ||||||||||||||||||
Forfeited
|
(644,667 | ) | 1.61 | (622,083 | ) | 1.70 | (225,250 | ) | 2.22 | |||||||||||||||
Expired
|
(775,333 | ) | 1.59 | (1,410,917 | ) | 1.83 | (230,750 | ) | 2.21 | |||||||||||||||
Outstanding at year end
|
11,110,000 | 0.84 | 9,150,000 | 1.07 | 6,683,000 | 1.46 | ||||||||||||||||||
Exercisable at year end
|
3,547,498 | 1.16 | 2,683,334 | 1.53 | 2,890,500 | 1.94 |
|
3)
|
The amounts of expense that were recorded for options to employees and other service providers in the reported years are NIS 1,111 thousand, NIS 511 thousand and NIS 505 thousand for the years ended December 31, 2014, December 31, 2013 and December 31, 2012, respectively.
|
|
4)
|
The plans are intended to be governed by the terms stipulated by Section 102 to the Israeli Income Tax Ordinance (except for the options to controlling shareholders).
|
|
In accordance with these general rules and the track chosen by the Company pursuant to the terms thereof, in respect of options granted to employees under the option allotment plan, the Company is not allowed to claim as an expense for tax purposes the amounts credited to employees as a benefit, including amounts recorded as salary benefits in the Company's books, with the exception of the work-benefit component, if exists, determined on the grant date.
|
For the year ended
December 31
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
NIS in thousands
|
||||||||||||
Payroll and related expenses
|
14,429 | 8,321 | 7,333 | |||||||||
Materials used and subcontracted work
|
5,459 | 3,282 | 3,413 | |||||||||
Trials and medical regulatory advice
|
317 | |||||||||||
Preparation of patents
|
522 | 427 | 467 | |||||||||
Depreciation and amortization
|
637 | 417 | 471 | |||||||||
Travel and vehicle maintenance
|
677 | 764 | 834 | |||||||||
Travel abroad
|
2,173 | 869 | 581 | |||||||||
Insurance
|
94 | 131 | 131 | |||||||||
Advertising and participation in exhibitions
|
2,333 | 1,347 | 473 | |||||||||
Management fees (see Note 18 D)
|
888 | 1,352 | 822 | |||||||||
Office supplies and printing
|
126 | 190 | 196 | |||||||||
Rent and office maintenance
|
1,063 | 741 | 625 | |||||||||
Professional fees
|
3,343 | 1,626 | 828 | |||||||||
Others
|
468 | 404 | 250 | |||||||||
32,212 | 19,871 | 16,741 | ||||||||||
Less- grants and participations from the Chief Scientist, see
Note 12 (A)
|
454 | 1,350 | ||||||||||
TOTAL COST OF REVENUES, ADMINISTRATIVE AND GENERAL, SELLING AND MARKETING AND RESEARCH AND DEVELOPMENT EXPENSES, NET
|
32,212 | 19,417 | 15,391 |
For the Year Ended
December 31
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
NIS in thousands
|
||||||||||||
In respect of financial assets at fair value through profit or loss:
|
||||||||||||
Interest income
|
49 | 200 | ||||||||||
Profit from change in fair value
|
66 | 278 | 14 | |||||||||
66 | 327 | 214 | ||||||||||
In respect of financial asset available for sale
|
339 | |||||||||||
In respect of cancellation of an agreement with a customer (see Note 14 (1))
|
875 | |||||||||||
Total
|
941 | 666 | 214 |
For the Year Ended December 31
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
NIS in thousands
|
||||||||||||
Financing income (expenses) in respect of exchange differences
|
2,393 | (236 | ) | (70 | ) | |||||||
Financing income in respect of deposits
|
120 | 54 | 9 | |||||||||
Financing expenses in respect of bank commissions
|
(127 | ) | (213 | ) | (100 | ) | ||||||
2,386 | (395 | ) | (161 | ) |
|
The basic loss per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of shares in issue.
|
For the year ended
December 31
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Loss attributed to shareholders (NIS in thousands)
|
(22,629 | ) | (5,189 | ) | (12,254 | ) | ||||||
Weighted average of the number of ordinary shares issued (in thousands)
|
194,997 | 130,199 | 86,984 | |||||||||
Basic loss per share (NIS)
|
(0.12 | ) | (0.04 | ) | (0.14 | ) |
|
The diluted loss per share is calculated by adjusting the weighted average of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Company has one category of dilutive potential ordinary shares - share options and warrants. A calculation is done to determine the number of shares which could have been acquired at fair value (determined as the average annual market share price of the Company’s shares) based on the monetary value and according to the conditions attached to the outstanding options and warrants. The number of shares calculated as above is compared to the number of shares which would have been issued assuming the exercise of the share options and warrants.
|
|
However, in calculating the diluted loss per share for the years reported, share options granted to employees and others, and warrants, were not taken into account – as their impact in the event of full dilution is anti dilutive. Therefore, the diluted loss per share is equal to the basic loss per share.
|
|
In February 2006 Elazar Sonnenschein, Menashe Sonnenschein, Aviel Roy Shapira, Esther and Kfir Luzzatto, Yair Rabinowitch, and Dexxon Technologies 2005 Ltd (hereinafter - the “Parties to the Agreement) entered into a shareholders' agreement which settles the relationship between the Parties to the Agreement as controlling shareholders (hereinafter - the “Agreement”).
|
|
On February 19, 2010, Dexxon Technologies 2005 Ltd discontinued its participation in the Agreement and ceased to be a controlling shareholder.
|
|
On March 3, 2013, as a result of the completion of the transaction with Orbimed (see Note 15 B 3) the Agreement between the controlling shareholders terminated, and an obligation of these controlling shareholders came into effect, whereby these controlling shareholders will vote at shareholders’ meetings according to instructions of Orbimed and will not sell Company securities over a period specified in the obligation documents.
|
|
Key management personnel of the Company - included together with other entities, in the said definition of “Related Parties” mentioned in IAS 24, include some members of senior management.
|
For the year ended
December 31
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
NIS in thousands
|
||||||||||||
Preparation of patents
|
522 | 427 | 467 | |||||||||
Benefits to related parties:
|
||||||||||||
Payroll and related expenses to related parties employed by the Company* (2014: 3 recipients, 2013: 3 recipients, 2012: 2 recipients)
|
3,338 | 1,120 | 511 | |||||||||
Compensation to directors not employed by the Company** (2014: 4 recipients, 2013: 9 recipients, 2012: 8 recipients)
|
219 | 270 | 375 | |||||||||
Management fees to a related party (see B, D and E following)***
|
1,017 | 1,459 | 671 | |||||||||
Compensation to a director employed by the Company
|
43 | 46 | 28 | |||||||||
Directors’ insurance
|
74 | 47 | 26 |
|
*
|
Includes an amount of NIS 725 thousand (2013: NIS 210 thousand, 2012: NIS 30 thousand) representing the value of the benefit in respect of options granted. As for the method used to determine the said value and the assumptions used in calculation thereof, see Note 13 C. The said amount does not include amounts charged to the capital reserve as described in section d below.
|
|
**
|
Includes an amount of NIS 16 thousand (2013: NIS 20 thousand, 2012: NIS 117 thousand) representing the value of the benefit in respect of options granted. As for the method used to determine the said value and the assumptions used in calculation thereof, see Note 13 C.
|
|
***
|
Includes income of NIS 14 thousand (2013: NIS 20 thousand (expense), 2012: NIS 40 thousand (expense)) representing the value of the benefit in respect of options granted. As for the method used to determine the said value and the assumptions used in calculation thereof, see Note 13 C. The said amount does not include amounts charged to capital reserve as described in section d below.
|
|
The compensation to key management personnel for employment services they provide to the Company is as follows:
|
For the year ended
December 31
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
NIS in thousands
|
||||||||||||
For employment services:
|
||||||||||||
Payroll and other short-term benefits
|
*1,871 | 813 | 530 | |||||||||
Management fees (see B, D and E following)
|
1,439 | 631 | ||||||||||
Post-retirement benefits
|
51 | 61 | ||||||||||
Share based payments
|
685 | 195 | 73 | |||||||||
2,556 | 2,498 | 1,295 |
|
a.
|
The Company provides its directors and officers with an obligation for indemnification and exemption.
|
|
b.
|
The Company has a directors and officers' liability insurance policy covering all Company’s directors and officers. The aforementioned insurance policy is effective in Israel and abroad, with coverage limits of up to USD 10 million per incident and per period, with an additional limitation for legal costs in Israel of USD 2 million per incident and per period. The excess paid by the Company is for certain amounts as set out in the policy.
|
As of December 31
|
||||||||
2014
|
2013
|
|||||||
NIS in thousands
|
||||||||
Current liabilities-presented in the statements of financial position among “trade and other payables”)
|
722 | 419 |
|
On March 3, 2013 the Company received notices from DLLD Consulting Ltd. (through Dr. Elazar Sonnenschein, the Company’s CEO at that time and one of its controlling shareholders), from the Company’s R&D director and one of its controlling shareholders, and from the Company’s medical director and one of its controlling shareholders, requesting that the Company cancel the reduction of fees and salaries (where relevant) paid to the above controlling shareholders,
with effect from the date of issuance of the notice. In light of the above, the fees and the salaries paid to the above controlling shareholders were increased in the following manner: (a) the fee paid to the CEO of the Company was increased from NIS 26,280 per month (with the addition of V.A.T. and linkage differences) to NIS 85,700 per month (with the addition of V.A.T. and linkage differences); (b) the salary paid to the Company’s medical director was increased from USD 25 per hour to USD 50 per hour; and (c) the salary of the Company’s R&D director was increased from NIS 21,675 per month (employer’s cost approximately NIS 28,000) to NIS 28,300 per month (employer’s cost approximately NIS 36,000).
|
|
Amounts relating to waiver of salaries by controlling shareholders during the reporting periods were credited to capital reserve from transactions with controlling shareholders against payroll expenses.
|
|
e.
|
Kfir Luzzatto and Esther Luzzatto provide patents and trademarks preparation and registration services to the Company through Luzzatto and Luzzatto Patent Attorneys (General Partnership), whose partners are Kfir Luzzatto and Esther Luzzatto, directly and/or indirectly, and through Alandal Ltd., which to the best knowledge of the Company is under the ownership and control of Kfir Luzzatto and/or Esther Luzzatto. In accordance with an agreement between the Company and Luzzatto and Luzzatto Patent Attorneys of February 27, 2007, the fee paid by the Company
to Luzzatto and Luzzatto Patent Attorneys amounts to USD 125 (plus V.A.T.) per hour invested by a patent attorney partner, patent writer, attorney, engineer, or technical professional, and USD 60 (plus VAT) per hour invested by a technical draftsman. The fee is paid in NIS and is linked to the representative exchange rate of the USD with trade credit terms of Net 60. In addition, Luzzatto and Luzzatto Patent Attorneys is to be reimbursed for its expenses against invoices or actual payment vouchers, including payment to patent attorneys abroad and fees to patent registration offices. It should be noted that the above agreement does not specify the engagement period or the conditions for termination thereof.
|
|
On March 24, 2014 and March 27, 2014 the audit committee and the board of directors, respectively, re-approved the terms of the agreement described above, for an additional period of three years in accordance with Amendment No. 16 of the Israeli Companies Law.
|
|
The Group’s management determined that the Company CEO is the Chief Operating Decision Maker (hereinafter - "CODM") of the Group. The CODM of the Group evaluates performance and allocate resources based on two operating segments of the Company.
|
|
The CODM of the Group examines the performance of the segments on the basis of operating loss excluding general and administrative expenses and other income, net. Further, the internal reports of the CODM do not include assets and liabilities. The information provided to the CODM are measured consistent with the measurement methods in the financial statements.
|
|
1)
|
MUSE segment – development, manufacturing and marketing of an endoscopy system for the treatment of gastroesophageal reflux disease (GERD).
|
|
2)
|
Visual segment - development, manufacturing and marketing of products based on miniature cameras and related equipment. To date, most of the Group's revenue arises from this segment.
|
Visual Segment
|
MUSE Segment
|
Total
|
||||||||||
NIS in thousands
|
||||||||||||
Year ended December 31, 2014
|
||||||||||||
Revenues from external customers
|
2,336 | 328 | 2,664 | |||||||||
Segment results
|
(2,144 | ) | (19,198 | ) | (21,342 | ) | ||||||
General and Administrative expenses
|
(8,206 | ) | ||||||||||
Other income, net
|
941 | |||||||||||
Operating loss
|
(28,607 | ) | ||||||||||
Profit from change in fair value of warrants WARRANTS ISSUED TO INVESTORS
|
3,605 | |||||||||||
Financing income, net
|
2,386 | |||||||||||
Taxes on income
|
(13 | ) | ||||||||||
Loss for the year
|
(22,629 | ) | ||||||||||
Depreciation and amortization
|
28 | 320 |
Visual
Segment
|
MUSE
Segment
|
Total
|
||||||||||
NIS in thousands
|
||||||||||||
Year ended December 31,2013
|
||||||||||||
Revenues from external customers
|
2,451 | 47 | 2,498 | |||||||||
Segment results
|
(158 | ) | (9,884 | ) | (10,042 | ) | ||||||
General and Administrative expenses
|
(6,877 | ) | ||||||||||
Other income, net
|
666 | |||||||||||
Operating loss
|
(16,253 | ) | ||||||||||
Profit from change in fair value of warrants WARRANTS ISSUED TO INVESTORS
|
11,544 | |||||||||||
Financing expenses, net
|
(395 | ) | ||||||||||
Taxes on income
|
(85 | ) | ||||||||||
Loss for the year
|
(5,189 | ) | ||||||||||
Depreciation and amortization
|
89 | 200 |
Visual
Segment
|
MUSE
Segment
|
Total
|
||||||||||
NIS in thousands
|
||||||||||||
Year ended December 31,2012
|
||||||||||||
Revenues from external customers
|
2,937 | 62 | 2,999 | |||||||||
Segment results
|
(591 | ) | (7,107 | ) | (7,698 | ) | ||||||
General and Administrative expenses
|
(4,694 | ) | ||||||||||
Other income, net
|
214 | |||||||||||
Operating loss
|
(12,178 | ) | ||||||||||
Financing expenses, net
|
(161 | ) | ||||||||||
Taxes on income
|
85 | |||||||||||
Loss for the year
|
(12,254 | ) | ||||||||||
Depreciation and amortization
|
119 | 233 |
For the year ended
December 31
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
NIS in thousands
|
||||||||||||
USA (Visual segment only)
|
1,645 | 1,631 | 1,906 | |||||||||
Japan (Visual segment only)
|
358 | 362 | 452 | |||||||||
Israel (Visual segment only)
|
106 | |||||||||||
Others (Visual segment and MUSE segment)
|
661 | 505 | 535 | |||||||||
2,664 | 2,498 | 2,999 |
|
Set forth below is a breakdown of Company's revenue by major customers (major customer –revenues from this customer constitute at least 10% of total revenues in a certain year):
|
For the year ended
December 31
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
NIS in thousands
|
||||||||||||
Customer A
|
323 | 143 | ||||||||||
Customer B
|
169 | 536 | 299 | |||||||||
Customer C
|
599 | |||||||||||
Customer D
|
93 | 307 | ||||||||||
Customer E (see also Note 12 (B))
|
370 | 185 | 215 | |||||||||
Customer F
|
443 |
a.
|
On January 1, 2015, 100,000 options (Series 6) and 93,750 options (Series A) forfeited and 31,250 options (Series A) expired, due to cessation of service as director of the Company.
|
c.
|
On March 20, 2015, 70,000 options (Series 6), 48,750 options (Series A) and 93,333 options (Series B) forfeited and 16,250 options (Series A), 46,667 options (Series B) and 240,000 options (Series D) expired, due to the termination of employment of two employees.
|
This ‘20FR12B’ Filing | Date | Other Filings | ||
---|---|---|---|---|
7/17/20 | None on these Dates | |||
9/30/18 | ||||
9/24/18 | ||||
4/23/18 | ||||
1/1/18 | ||||
11/2/17 | ||||
7/7/17 | ||||
1/1/17 | ||||
10/17/16 | ||||
9/24/16 | ||||
9/1/16 | ||||
3/3/16 | ||||
3/2/16 | ||||
2/8/16 | ||||
12/31/15 | ||||
11/16/15 | ||||
9/24/15 | ||||
6/30/15 | ||||
6/9/15 | ||||
Filed on: | 5/7/15 | |||
5/6/15 | ||||
4/22/15 | ||||
3/31/15 | ||||
3/30/15 | ||||
3/20/15 | ||||
2/1/15 | ||||
1/22/15 | ||||
1/1/15 | ||||
12/31/14 | ||||
12/23/14 | ||||
12/2/14 | ||||
11/26/14 | ||||
11/25/14 | ||||
11/23/14 | ||||
11/20/14 | ||||
11/17/14 | ||||
11/16/14 | ||||
11/10/14 | ||||
11/4/14 | ||||
11/3/14 | ||||
10/30/14 | ||||
10/7/14 | ||||
10/1/14 | ||||
8/26/14 | ||||
8/21/14 | ||||
7/28/14 | ||||
7/17/14 | ||||
7/7/14 | ||||
6/30/14 | ||||
6/29/14 | ||||
6/15/14 | ||||
6/1/14 | ||||
5/31/14 | ||||
5/26/14 | ||||
5/4/14 | ||||
3/31/14 | ||||
3/27/14 | ||||
3/24/14 | ||||
2/12/14 | ||||
1/1/14 | ||||
12/31/13 | ||||
12/10/13 | ||||
12/4/13 | ||||
11/1/13 | ||||
10/31/13 | ||||
10/17/13 | ||||
10/9/13 | ||||
10/1/13 | ||||
9/30/13 | ||||
9/29/13 | ||||
9/24/13 | ||||
9/1/13 | ||||
8/28/13 | ||||
8/12/13 | ||||
8/5/13 | ||||
8/1/13 | ||||
7/31/13 | ||||
3/3/13 | ||||
2/1/13 | ||||
1/3/13 | ||||
1/1/13 | ||||
12/31/12 | ||||
6/27/12 | ||||
6/3/12 | ||||
1/1/12 | ||||
12/31/11 | ||||
12/6/11 | ||||
7/12/11 | ||||
1/1/11 | ||||
12/31/10 | ||||
12/29/10 | ||||
2/19/10 | ||||
1/10/10 | ||||
1/1/09 | ||||
12/31/07 | ||||
7/22/07 | ||||
2/27/07 | ||||
12/4/05 | ||||
1/1/00 | ||||
12/9/99 | ||||
List all Filings |