What changed in this filing

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Item 1. Financial Statements

2022-08-10 compared with 2022-05-12 · 119 added, 67 removed, 224 unchanged (45% of the section changed)

17 unchanged sentences

REDEEMABLE CONVERTIBLE PREFERRED SHARES:

Convertible preferred A stock, $ 0.00001 par value – Zero and 6,630,000 shares authorized as of March 31, 2022 and December 31, 2021, respectively.

As of March 31, 2022 all issued and outstanding preferred A stock was converted to common stock.

Convertible preferred A stock, $ 0.00001 par value – Zero and 6,630,000 shares authorized as of June 30, 2022 and December 31, 2021, respectively.

As of June 30, 2022 all issued and outstanding preferred A stock was converted to common stock.

As of December 31, 2021, 5,012,280 preferred A stock shares were issued and outstanding.

STOCKHOLDERS’ EQUITY (DEFICIT), see Note 4 :

Common Stock, $ 0.00001 par value – 60,000,000 and 12,870,000 shares authorized as of March 31, 2022 and December 31, 2021, respectively 12,717,794 and 4,505,514 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively

Common Stock, $ 0.00001 par value – 60,000,000 and 12,870,000 shares authorized as of June 30, 2022 and December 31, 2021, respectively 12,717,794 and 4,505,514 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively

Additional paid in capital

Notes received for common stock

Notes received for common shares

Accumulated deficit

4 unchanged sentences

NUVECTIS PHARMA, INC.

CONDENSED STATEMENT OF OPERATIONS

CONDENSED STATEMENTS OF OPERATIONS

(USD in thousands, except per share and share amounts)

Three Months Ended March 31

Three Months Ended June 30

Six Months Ended June 30

OPERATING EXPENSES:

3 unchanged sentences

FINANCE INCOME

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS

NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS

BASIC AND DILUTED NET LOSS PER COMMON SHARE OUTSTANDING, see Note 6

BASIC AND DILUTED WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING

Represents an amount lower than $0.01.

The accompanying notes are an integral part of these unaudited condensed financial statements.

10 unchanged sentences

BALANCES AT MARCH 31, 2021

Issuance of Series A Preferred shares

Share-based payments

Net loss for the period

BALANCES AT JUNE 30, 2021

Redeemable Convertible

11 unchanged sentences

BALANCES AT MARCH 31, 2022

Share based payments

Net loss for the period

BALANCES AT JUNE 30, 2022

Represents an amount lower than $1,000 USD.

3 unchanged sentences

(USD in thousands, except per share and share amounts)

Three Months Ended March 31,

Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

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CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issuance of redeemable convertible preferred shares

Proceeds from issuance of common stock upon initial public offering

6 unchanged sentences

Issuance of common shares in return for note receivable

Unpaid deferred offering costs

Represents an amount lower than $1,000 USD.

15 unchanged sentences

Liquidity and Capital Resources

The Company has incurred net operating losses since its inception and had an accumulated deficit of $ 15.8 million as of March 31, 2022.

The Company had cash and cash equivalents of $ 16.7 million as of March 31, 2022 and has not generated positive cash flows from operations.

The Company has incurred net operating losses since its inception and had an accumulated deficit of $ 19.4 million as of June 30, 2022.

The Company had cash and cash equivalents of $ 13.6 million as of June 30, 2022 and has not generated positive cash flows from operations.

To date, the Company has been able to fund its operations primarily through the issuance and sale of common stock and redeemable convertible preferred shares.

Management believes that its existing cash, and cash equivalents enable the Company to fund planned operations for at least 12 months following the issuance date of these condensed financial statements.

The Company will need to raise additional capital in order to complete the clinical trials aimed at developing the product candidates until obtaining its regulation and marketing approvals.

On July 29, 2022, the Company completed a private placement in which it received approximately $ 14.2 million in net proceeds, after deducting placement agent fees and other offering expenses (see Note 8).

Management believes that its existing cash, and cash equivalents as of June 30, 2022 enable the Company to fund planned operations for at least 12 months following the issuance date of these condensed financial statements.

The Company will need to raise additional capital in order to complete the clinical trials aimed at developing the product candidates until obtaining its regulatory and marketing approvals.

There can be no assurances that the Company will be able to secure such additional financing if at all, or at terms that are satisfactory to the Company, and that it will be sufficient to meet its needs.

1 unchanged sentence

Initial Public Offering

On February 8, 2022, the Company completed an initial public offering (“IPO”) in which it sold 3,200,000 shares of common stock at $ 5.00 per share and received net proceeds of $ 12.6 million, after underwriting discounts and commissions of $ 1.1 million, expenses of $ 1.8 million and $ 0.5 million in stock based payments to a third party.

Additionally, the convertible preferred stock were converted on a 1 :1 basis into 5,012,280 shares of the Company’s common stock.

Corronavirus Pandemic

The IPO also included $ 0.5 million in stock-based expense

in relation to warrants issued to the underwriter.

Additionally, upon the IPO, the convertible preferred stock were converted on a 1 :1 basis into 5,012,280 shares of the Company’s common stock.

Coronavirus Pandemic

In March 2020, the World Health Organization declared the outbreak of COVID-19 to be a pandemic.

20 unchanged sentences

In the opinion of management, the unaudited condensed financial statements include all normal and recurring adjustments that are considered necessary for the fair statement of results for the interim periods.

The results for the three months ended March 31, 2022 are not necessarily indicative of those expected for the year ending December 31, 2022 or for any future period.

The results for the period ended June 30, 2022 are not necessarily indicative of those expected for the year ending December 31, 2022 or for any future period.

The condensed balance sheet as of December 31, 2021 included herein was derived from the audited financial statements as of that date but does not include all disclosures required by U.S.

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The preparation of the Company’s financial statements requires management to make estimates and assumptions that impact the reported amounts of assets, liabilities and expenses in the Company’s financial statements and accompanying notes.

The most significant estimates in the Company’s financial statements relate to accruals for research and development expenses, valuation of equity awards, and valuation allowances for deferred tax assets.

values of assets and liabilities and the recording of expenses that are not readily apparent from other sources.

The most significant estimates in the Company’s financial statements relate to accruals for

research and development expenses, valuation of equity awards, and valuation allowances for deferred tax assets.

These estimates and assumptions are based on current facts, future expectations, and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources.

Actual results may differ materially and adversely from these estimates.

11 unchanged sentences

The money market accounts included in cash and cash equivalents are considered Level 1.

During the three months ended March 31, 2022 and 2021, there were no transfers between fair value measure levels.

During the three and six months ended June 30, 2022 and 2021, there were no transfers between fair value measure levels.

Other financial instruments consist mainly of cash and cash equivalents, other current assets, accounts payable and accrued liabilities.

2 unchanged sentences

Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements.

No new accounting standards were adopted during the period.

NOTE 3 – COMMITMENTS AND CONTINGENCIES:

1 unchanged sentence

CRT Pioneer Fund License Agreement

There have been no material changes to the CRT Pioneer Fund License Agreement (the “License Agreement”) as previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed with the Securities and Exchange Commission on March 23, 2022 (see Note 5a in the Notes to the Financial Statements) except noted below.

filed with the Securities and Exchange Commission on March 23, 2022 (see Note 5a in the Notes to the Financial Statements) except noted below.

In connection with the License Agreement, the Company agreed to provide Institute of Cancer Research in London, UK (“ICR”) with up to an additional $ 500,000 in research and development support over the next 18 months to conduct additional scientific research and preclinical testing for certain indications that the Company selects in connection with the NXP800 Program.

According to the License Agreement, the Company also has an exclusive

license to intellectual property rights developed in the collaboration, to research, develop and commercialize products resulting from the collaboration.

On March 31, 2022, the Company and ICR reached an agreement for research and development support totaling $ 865,000 ($ 365,000 above the License Agreement) however no expense was incurred during the period due to the timing of the contract execution.

The Company expects to recognize expenses associated with this agreement in future periods.

Any potential milestone or royalty payment amounts have not been accrued at March 31, 2022 and December 31, 2021 due to the uncertainty related to the achievement of these events or milestones except for the research and development support discussed above.

According to the License Agreement, the Company also has an exclusive license to intellectual property rights developed in the collaboration, to research, develop and commercialize products resulting from the collaboration.

On March 31, 2022, the Company and ICR revised the agreement for research and development support to a total of $ 865,000 ($ 365,000 above the License Agreement, to allow for additional research activities).

$ 0.1 million of expense of the research and development support was recognized during the three months and six months ended June 30, 2022.

The expense from the revised agreement will be recognized over eighteen months beginning at the date of the revised agreement.

Any potential milestone or royalty payment amounts have not been accrued as of June 30, 2022 and December 31, 2021 due to the uncertainty related to the achievement of these events or milestones except for the research and development support discussed above.

University of Edinburgh License Agreement

There have been no material changes to the University of Edinburgh (“UoE”) License Agreement as previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed with the Securities and Exchange Commission on March 23, 2022 (see Note 5a in the Notes to the Financial Statements).

Any potential future research support, milestone or royalty payment amounts have not been accrued at March 31, 2022 and December 31, 2021 due to the uncertainty related to the achievement of these events, milestones or commitments to additional research.

Any potential future research support, milestone or royalty payment amounts have not been accrued as of June 30, 2022 and December 31, 2021 due to the uncertainty related to the achievement of these events, milestones or commitments to additional research.

Related Party Transactions

1 unchanged sentence

Contingencies

As of March 31, 2022, and as of December 31, 2021, there are no contingent liabilities, therefore, no provision was made.

As of June 30, 2022, and as of December 31, 2021, there are no contingent liabilities, therefore, no provision was made.

NOTE 4 – SHAREHOLDERS’ EQUITY/(DEFICIT):

4 unchanged sentences

Upon the completion of the Company’s IPO, all outstanding shares of the Company’s preferred A stock was converted into shares of the Company’s common stock on a 1 :1 basis.

As of March 31, 2022 and December 31, 2021 the share capital is composed of $ 0.00001 par value shares, as follows:

March 31, 2022

As of June 30, 2022 and December 31, 2021 the share capital is composed of $ 0.00001 par value shares, as follows:

June 30, 2022

Issued and paid

Redeemable Convertible Preferred Shares

Common Shares

December 31, 2021

Issued and paid

Common Shares

Redeemable convertible preferred shares

2 unchanged sentences

The holders of the Company’s common stock are entitled to one vote for each share held on all matters submitted to a vote of the stockholders.

The holders of our common stock do not have any cumulative voting rights.

Holders of our common stock are entitled to receive ratably any dividends declared by our board of directors out of funds legally available for that purpose, subject to any preferential dividend rights of any outstanding preferred stock.

The holders of common stock do not have any cumulative voting rights.

Holders of the common stock are entitled to receive ratably any dividends declared by the board of directors out of funds legally available for that purpose, subject to any preferential dividend rights of any outstanding preferred stock.

The Company’s common stock has no preemptive rights, conversion rights or other subscription rights or redemption or sinking fund provisions.

In the event of our liquidation, dissolution or winding up, holders of the Company common stock will be entitled to share ratably in all assets remaining after payment of all debts and other liabilities and any liquidation preference of any outstanding preferred stock.

As of March 31, 2022 and December 31, 2021, no dividends have been declared.

In the event of liquidation, dissolution or winding up, holders of the Company common stock will be entitled to share ratably in all assets remaining after payment of all debts and other liabilities and any liquidation preference of any outstanding preferred stock.

As of June 30, 2022 and December 31, 2021, no dividends have been declared.

NOTE 5 – SHARE BASED PAYMENTS:

Share Based Payments

In February 2022, the Company granted to HC Wainwright & Co.

the underwriter of our IPO 128,000 fully vested warrants upon the IPO, exercisable into common stock with an exercise price of $ 6.25 per share.

for 5 years after the grant date.

In February 2022, the Company granted to H.C.

Wainwright & Co.

the underwriter of the IPO, 128,000 fully vested warrants upon the IPO, exercisable into common stock with an exercise price of $ 6.25 per share for 5 years after the grant date.

The 128,000 fully vested warrants have an estimated value (based on Black-Scholes model) of approximately $ 458,000 and were recognized as a reduction from gross proceeds of the IPO.

No warrants have been exercised as of June 30, 2022.

The following table summarizes assumptions used for the Black-Scholes model at the grant date:

8 unchanged sentences

In February 2022, the Company’s board of directors approved an increase to total shares under the incentive plan to 1,500,000 .

The following table summarizes the Company’s stock option activity in the Incentive Plan for the three months ended March 31, 2022:

On April 1, 2022, the Company granted Directors Hoberman, Oliviero and Kaplan 15,000 options each , to purchase common stock at the closing price on the day of the grant.

The options to the directors vest over three years with 1/3 vesting on each anniversary of the date of the grant.

The fair value of these options was determined to be $ 0.3 million.

The following table summarizes assumptions used for the Black-Scholes model at the grant date:

Risk-free interest rate

Common share price

Expected dividend yield

Expected term (in years)

Expected volatility

The following table summarizes the Company’s stock option activity in the Incentive Plan for the six months ended June 30, 2022:

Weighted average

3 unchanged sentences

Balance, December 31, 2021

Outstanding – March 31, 2022

Exercisable – March 31, 2022

Vest or Expected to vest -March 31, 2022

As of March 31, 2022, there was $ 0.3 million of unrecognized stock-based compensation expense related to unvested stock options that is expected to be recognized over a weighted-average period of 2.25 years.

Outstanding – June 30, 2022

Exercisable – June 30, 2022

Vested or Expected to vest – June 30, 2022

As of June 30, 2022, there was $ 0.6 million of unrecognized stock-based compensation expense related to unvested stock options that is expected to be recognized over a weighted-average period of 2.22 years.

Restricted Stock Units

Restricted stock units (“RSUs”) have been granted to employees and directors.

The value of an RSU award is based on the Company’s stock price on the date of grant using the Black-Scholes Option Pricing Model (“OPM”).

Restricted stock units (“RSUs”) have been granted to employees.

The value of an RSU award is based on the Company’s stock price on the date of grant.

The shares underlying the RSU awards are not issued until the RSUs vest.

1 unchanged sentence

The Company granted RSUs pursuant to the Incentive Plan.

The following table summarizes the Company’s RSU activity for the three months ended March 31, 2022, as described above from the Incentive Plan:

On April 1, 2022, the Company issued 120,000 RSUs to Mr.

Ron Bentsur and 60,000 RSUs each to Dr.

Enrique Poradosu and Mr.

Shay Shemesh.

All RSUs granted to these founders of the Company vest over three years with 1/3 vesting on each anniversary of the date of the grant.

The fair value of these RSUs was determined to be $ 1.7 million.

The following table summarizes the Company’s RSU activity for the six months ended June 30, 2022, as described above from the Incentive Plan:

Weighted average

5 unchanged sentences

Balance, December 31, 2021

Outstanding – March 31, 2022

Expected to vest -March 31, 2022

As of March 31, 2022, there was $ 0.2 million of total unrecognized compensation cost related to RSUs expected to be recognized over a weighted average period of 2.63 years.

Outstanding – June 30, 2022

Vested or Expected to vest – June 30, 2022

As of June 30, 2022, there was $ 1.8 million of total unrecognized compensation cost related to RSUs expected to be recognized over a weighted average period of 2.67 years.

The RSUs granted during the quarter vest over three years with 1/3 vesting on each anniversary date of the grant.

On July 27, 2021, Mr.

Ron Bentsur, Dr.

Enrique Poradosu, and Mr.

Shay Shemesh were granted 96,759 RSUs, 48,399 RSUs and 48,399 RSUs, respectively, which were not part of the Incentive Plan and excluded from the table above.

See note 8, related to the Subsequent Event of this grant.

Share Compensation Expense

For the three months ended March 31, 2022, the Company recognized expenses of $ 0.3 million as part of the general and administrative expenses and $ 0.1 million as part of the research and development expenses.

For the three months ended March 31, 2021, the Company did no t recognize any share based compensation expense.

For the three months ended June 30, 2022, the Company recognized expenses of $ 0.2 million as part of general and administrative expenses and $ 0.3 million as part of research and development expenses.

For the three months ended June 30, 2021, the Company recognized expenses of $ 0.9 million as part of general and administrative expenses and $ 0.7 million as part of research and development expenses.

For the six months ended June 30, 2022, the Company recognized expenses of $ 0.3 million as part of general and administrative expenses and $ 0.4 million as part of research and development expenses.

For the six months ended June 30, 2021, the Company recognized expenses of $ 0.9 million as part of general and administrative expenses and $ 0.7 million as part of research and development expenses.

NOTE 6 – NET LOSS PER SHARE:

2 unchanged sentences

For the three months

ended March 31, 2022

ended March 31, 2021

For the six months

ended June 30, 2022

ended June 30, 2021

ended June 30, 2022

ended June 30, 2021

in thousand U.S.

1 unchanged sentence

Loss attributable to common stockholders

Basic and diluted net loss per common stock

Less than $ 0.01

Weighted average of common stock outstanding

Basic loss per share is calculated by dividing the result attributable to equity holders of the Company by the weighted average number of common stock in issue during the year.

The following potentially dilutive securities were excluded from the calculation of diluted net loss per common stock because their effect would have been anti-dilutive for the years presented:

For the three months ending

Basic and diluted net loss per common share

Weighted average of common share outstanding

Basic loss per share is calculated by dividing the result attributable to equity holders of the Company by the weighted average number of shares of common stock in issue during the year.

The following potentially dilutive securities were excluded from the calculation of diluted net loss per common share because their effect would have been anti-dilutive for the years presented:

For the six months ending

Common stock issuable in relation to:

Redeemable convertible preferred shares

NOTE 7 – RELATED PARTY TRANSACTIONS:

Regarding related party transaction events, please also see Note 8.

Indemnification

The Company currently has directors’ and officers’ insurance coverage that reduces its exposure and enables the Company to recover a portion of any future amounts paid.

The Company believes the estimated fair value of these indemnification agreements in excess of applicable insurance coverage is minimal.

NOTE 8 – SUBSEQUENT EVENTS:

Related Party Transactions

On April 1, 2022, the Company awarded bonuses related to the completion of the IPO in the amount of $ 431,250 to Mr.

11 unchanged sentences

All RSUs and options vest over three years with 1/3 vesting on each anniversary date of the grant.

See Note 5 regarding the assumptions used in determining the fair value of these RSU and option grants.

Indemnification

The Company currently has directors’ and officers’ insurance coverage that reduces its exposure and enables the Company to recover a portion of any future amounts paid.

The Company believes the estimated fair value of these indemnification agreements in excess of applicable insurance coverage is minimal.

NOTE 8 – SUBSEQUENT EVENTS:

Private placement

On July 27, 2022, the Company entered into a securities purchase agreement (the “Purchase Agreement”) in connection with a private placement with several investors for aggregate gross proceeds of approximately $ 15.9 million.

In accordance with the Purchase Agreement, the Company issued to the investors an aggregate of (i) 1,015,598 shares of the Company’s common stock, par value $ 0.00001 per share at a purchase price of $ 8.25 per share, (ii) pre-funded warrants to purchase up to an aggregate of 909,091 shares of Common Stock that became exercisable immediately.

The Pre-Funded Warrant purchase price was $ 8.249 with an exercise price of $ 0.001 and (iii) Preferred Investment Option to purchase an aggregate of 1,924,689 shares of the Company's common stock at an exercise price of $ 9.65 per share.

The Preferred Investment Option will become exercisable six months following the closing of the transaction and have a term of three and one-half years .

Vesting Extension

On July 1, 2022, Mr.

Ron Bentsur, Dr.

Enrique Poradosu, Mr.

Shay Shemesh and the Compensation Committee of the Company’s Board of Directors mutually agreed to extend the vesting period of the RSUs granted on July 27, 2021 and originally scheduled to fully vest on July 27, 2022.

Bentsur’s 96,759 RSUs, Dr.

Poradosu’s 48,399 RSUs and Mr.

Shemesh’s 48,399 RSUs will now fully vest on January 1, 2023.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements