Item 1. Financial Statements
Item 1. Financial Statements
NUVECTIS PHARMA, INC.
CONDENSED BALANCE SHEETS
(USD in thousands, except per share and share amounts)
(unaudited)
June 30,
December 31,
2022
2021
Assets
CURRENT ASSETS:
Cash and cash equivalents
13,572
5,742
Other current assets
666
91
TOTAL CURRENT ASSETS
14,238
5,833
Deferred offering costs
—
824
TOTAL ASSETS
14,238
6,657
Liabilities, Redeemable Convertible Preferred Shares and Stockholders’ Equity (Deficit)
Accounts payables
1,434
1,058
Payable offering costs
341
824
Accrued liabilities
790
395
Employee compensation and benefits
173
142
TOTAL CURRENT LIABILITIES
2,738
2,419
TOTAL LIABILITIES
2,738
2,419
COMMITMENTS AND CONTINGENCIES, see Note 3
REDEEMABLE CONVERTIBLE PREFERRED SHARES:
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.
—
15,246
STOCKHOLDERS’ EQUITY (DEFICIT), see Note 4 :
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
30,912
1,892
Notes received for common shares
—
(*)
Accumulated deficit
( 19,412 )
( 12,900 )
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)
11,500
( 11,008 )
TOTAL LIABILITIES, REDEEMABLE COVERTIBLE PREFERRED SHARES AND STOCKHOLDERS’ EQUITY (DEFICIT)
14,238
6,657
*
Represents an amount lower than $1,000 USD.
The accompanying notes are an integral part of these unaudited condensed financial statements.
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NUVECTIS PHARMA, INC.
CONDENSED STATEMENTS OF OPERATIONS
(USD in thousands, except per share and share amounts)
(unaudited)
Three Months Ended June 30
Six Months Ended June 30
2022
2021
2022
2021
OPERATING EXPENSES:
RESEARCH AND DEVELOPMENT
2,505
4,245
4,310
4,245
GENERAL AND ADMINISTRATIVE
1,068
1,693
2,208
1,716
OPERATING LOSS
( 3,573 )
( 5,938 )
( 6,518 )
( 5,961 )
FINANCE INCOME
4
—
6
—
NET LOSS
( 3,569 )
( 5,938 )
( 6,512 )
( 5,961 )
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS
( 3,569 )
( 5,938 )
( 6,512 )
( 5,961 )
BASIC AND DILUTED NET LOSS PER COMMON SHARE OUTSTANDING, see Note 6
( 0.28 )
( 1.43 )
( 0.59 )
( 1.48 )
BASIC AND DILUTED WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
12,717,794
4,155,661
10,984,090
4,027,124
The accompanying notes are an integral part of these unaudited condensed financial statements.
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NUVECTIS PHARMA, INC.
CONDENSED STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY/(DEFICIT)
(USD in thousands, except share amounts)
(unaudited)
Notes
Redeemable Convertible
received
Preferred Stock
Common Stock
from
Additional
Total
$0.00001 Par Value
$0.00001 Par Value
Common
Paid-In
Accumulated
Stockholders’
Shares
Amount
Shares
Amount
shares
Capital
Deficit
Deficit
BALANCES AT DECEMBER 31, 2020
—
—
3,900,000
*
(*)
—
( 10 )
( 10 )
Net loss for the period
( 23 )
( 23 )
BALANCES AT MARCH 31, 2021
—
—
3,900,000
*
(*)
—
( 33 )
( 33 )
Issuance of Series A Preferred shares
94,752
11,225
Share-based payments
—
—
605,514
*
(*)
1,571
—
1,571
Net loss for the period
( 5,938 )
( 5,938 )
BALANCES AT JUNE 30, 2021
94,752
11,225
4,505,514
*
(*)
1,571
( 5,971 )
( 4,400 )
Notes
Redeemable Convertible
received
Preferred Stock
Common Stock
from
Additional
Total
$0.00001 Par Value
$0.00001 Par Value
Common
Paid-In
Accumulated
Stockholders’
Shares
Amount
Shares
Amount
shares
Capital
Deficit
Equity/(Deficit)
BALANCES AT DECEMBER 31, 2021
5,012,280
15,246
4,505,514
*
(*)
1,892
( 12,900 )
( 11,008 )
Conversion of Series A redeemable convertible preferred shares
( 5,012,280 )
( 15,246 )
5,012,280
*
—
15,246
—
15,246
Issuance of common stock upon initial public offering, net of offering costs of $ 2,892
3,200,000
*
*
13,108
—
13,108
Share based payments
156
156
Net loss for the period
—
—
—
—
( 2,943 )
( 2,943 )
BALANCES AT MARCH 31, 2022
—
—
12,717,794
*
—
30,402
( 15,843 )
14,559
Share based payments
510
510
Net loss for the period
—
—
—
—
( 3,569 )
( 3,569 )
BALANCES AT JUNE 30, 2022
—
—
12,717,794
*
—
30,912
( 19,412 )
11,500
*
Represents an amount lower than $1,000 USD.
The accompanying notes are an integral part of these unaudited condensed financial statements.
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NUVECTIS PHARMA, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(USD in thousands, except per share and share amounts)
(unaudited)
Six Months Ended June 30,
2022
2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss
( 6,512 )
( 5,961 )
Adjustments to reconcile loss to net cash used in operating activities: Cost of share-based payments
666
1,571
Changes in operating assets and liabilities:
Increase in other current assets
( 575 )
—
Increase in accounts payable and accrued liabilities
802
379
Net cash used in operating activities
( 5,619 )
( 4,011 )
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash provided by (used in) investing activities
—
—
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of redeemable convertible preferred shares
—
11,225
Proceeds from issuance of common stock upon initial public offering
16,000
—
Issuance costs related to initial public offering
( 2,551 )
—
Net cash provided by financing activities
13,449
11,225
INCREASE IN CASH AND CASH EQUIVALENTS
7,830
7,214
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
5,742
—
CASH AND CASH EQUIVALENTS AT END OF PERIOD
13,572
7,214
Supplemental noncash disclosure of investing and financing activities:
Issuance of common shares in return for note receivable
—
*
*
Represents an amount lower than $1,000 USD.
The accompanying notes are an integral part of these unaudited condensed financial statements.
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NUVECTIS PHARMA, INC.
Notes to the Unaudited Condensed Financial Statements
NOTE 1 – GENERAL:
a. Nuvectis Pharma Inc. (formerly Centry Pharma Inc.) (hereafter – the “Company”) was incorporated under the laws of the State of Delaware on July 27, 2020 and commenced its principal operations in May 2021. The Company’s principal executive offices are located at Fort Lee in the state of New Jersey.
The Company is a biopharmaceutical company focused on the development of novel targeted small molecule therapeutics for the treatment of cancer in genetically defined patient populations. The Company’s precision medicine approach translates key scientific insights relating to the oncogenic drivers and pathway addiction of cancer into potent and highly selective anticancer drugs.
b. In May 2021, the Company entered into a worldwide, exclusive license agreement with the CRT Pioneer Fund (“CRT”) (see Note 3a).
c. In May 2021, the Company’s board of directors approved and declared a 100 :1 stock split of common and preferred shares. In addition, in October 2021 the Company’s board of directors approved a 39 :1 stock split of common stock. All share and per share amounts reflected in these unaudited condensed financial statements and the notes thereto have been adjusted, on a retroactive basis, to reflect these share splits.
d. In August 2021, the Company entered into a worldwide, exclusive license agreement with the University of Edinburgh, Scotland for the Company’s second drug candidate (see Note 3a).
e. In February 2022, the Company’s shares began trading on the NASDAQ under the symbol “NVCT”.
f. Liquidity and Capital Resources
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.
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. In the event the Company is not successful in obtaining sufficient funding, this could force the Company to delay, limit, or reduce its products’ development, clinical trials, commercialization efforts or other operations, or even close down or liquidate.
g. 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, and expenses of $ 1.8 million. The IPO also included $ 0.5 million in stock-based expense
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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.
h. Coronavirus Pandemic
In March 2020, the World Health Organization declared the outbreak of COVID-19 to be a pandemic. The COVID-19 pandemic is having widespread, rapidly evolving, and unpredictable impacts on global society, economies, financial markets, and business practices. During 2021, there was a wide distribution of several vaccinations and medicines to overcome the pandemic. The Company has shifted its operations to co-exist along with the pandemic, including encouragement of vaccinations to all of its employees worldwide.
The uncertainty to which the COVID-19 pandemic impacts the Company’s business, affects management’s judgment and assumptions relating to accounting estimates in a variety of areas that depend on these estimates and assumptions. COVID-19 did not have a material influence on these estimates and judgements since the Company began operations in 2021.
The Company continues to face relative uncertainty as to the remaining intensity and duration of and the nature and timeline for recovery from the COVID-19 pandemic going forward and how all of that impacts the Company, including the extent to which potentially permanent changes clinical trial operations have been caused by the pandemic. The Company has taken the approach of managing the pandemic (to the extent that it continues to remain a significant factor) via strengthening its balance sheet and cash assets and avoiding debt while focusing on cost controls.
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES :
a. Basis of Presentation
The accompanying condensed financial statements are unaudited. The unaudited condensed financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”), are stated in U.S. dollars and follow the requirements of the Securities and Exchange Commission (“SEC”) for interim financial reporting. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for complete financial statements as certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. The unaudited condensed financial statements have been prepared on the same basis as the audited financial statements. The unaudited condensed financial statements include the accounts of the Company. Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”).
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 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. GAAP. These unaudited condensed financial statements should be read in conjunction with the Company’s audited financial statements and the related notes thereto for the year ended December 31, 2021, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 23, 2022.
The significant accounting policies used in the preparation of the financial statements are as follows:
b. Use of Estimates in the Preparation of Financial Statements
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
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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.
c.
Fair Value Measurement
The Company follows authoritative accounting guidance, which among other things, defines fair value, establishes a consistent framework for measuring fair value, and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability (at exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The three levels of inputs that may be used to measure fair value include:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. The Company’s Level 1 assets consist of money market funds.
Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities in active markets or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3: Unobservable inputs that are supported by little or no market activity. The fair value hierarchy gives the lowest priority to Level 3 inputs.
In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considers counterparty credit risk in its assessment of fair value.
The money market accounts included in cash and cash equivalents are considered Level 1.
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. The fair value of these financial instruments approximates their carrying values.
d.
Recently Issued Accounting Pronouncements Not Yet Adopted
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:
a. License Agreements
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
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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 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 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.
b. Related Party Transactions
As for related party transactions, see Note 7 and Note 8.
c. Contingencies
As of June 30, 2022, and as of December 31, 2021, there are no contingent liabilities, therefore, no provision was made.
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NOTE 4 – SHAREHOLDERS’ EQUITY/(DEFICIT):
a. In May 2021, the Company’s board of directors approved and declared a 100 :1 stock split of common stock with a par value of $ 0.00001 and preferred shares, with a par value of $ 0.00001 . In addition, the Company increased the number of authorized common stock from 3,900,000 to 12,870,000 and preferred shares from 40,000 to 170,000 . In addition, in October 2021, the Company’s board of directors approved a 39 :1 stock split. As a result of the above splits, all shares, options and warrants exercisable into common stock and restricted stock units, exercise prices and income or loss per share amounts have been adjusted on a retroactive basis for all periods presented to reflect such stock splits. 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 June 30, 2022 and December 31, 2021 the share capital is composed of $ 0.00001 par value shares, as follows:
June 30, 2022
Carrying
Liquidation
Authorized
Issued and paid
Value
Preference
Common Shares
60,000,000
12,717,794
*
—
December 31, 2021
Carrying
Liquidation
Authorized
Issued and paid
Value
Preference
Common Shares
12,870,000
4,505,514
*
—
Redeemable convertible preferred shares
6,630,000
5,012,280
15,246
15,246
* Represents an amount lower than $1,000 USD.
b. Rights of the Company’s Common Stock
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 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 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:
a. Share Based Payments
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.
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The following table summarizes assumptions used for the Black-Scholes model at the grant date:
Risk-free interest rate
1.78
%
Common share price
$
5.00
Expected dividend yield
—
Expected term (in years)
5
Expected volatility
99
%
Volatility was estimated based on the historic volatility of comparable public companies.
b. 2021 Global Equity Incentive Plan
In May 2021, the Company’s board of directors approved a global equity incentive plan (hereafter — “Incentive Plan”), in which the Company has reserved a total amount of 408,486 common stock for issuance in connection with the Incentive Plan. In February 2022, the Company’s board of directors approved an increase to total shares under the incentive plan to 1,500,000 .
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
2.39
%
Common share price
$
7.02
Expected dividend yield
—
Expected term (in years)
10
Expected volatility
89
%
The following table summarizes the Company’s stock option activity in the Incentive Plan for the six months ended June 30, 2022:
Weighted
Number of
Weighted average
average
Aggregated
shares under
Exercise price per
remaining
Intrinsic value
option
Option
life
(in thousands)
Balance, December 31, 2021
226,590
3.05
9.07
492
Granted
70,000
7.02
Exercised
—
—
Forfeited
—
—
Outstanding – June 30, 2022
296,590
3.99
9.22
2,138
Exercisable – June 30, 2022
9,750
3.05
9.00
Vested or Expected to vest – June 30, 2022
296,590
3.99
9.22
2,138
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. 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.
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Upon vesting, each RSU converts into one share of the Company’s common stock. The Company granted RSUs pursuant to 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:
Number of
Weighted
Weighted average
Aggregated
shares under
average grant
contractual term
Intrinsic value
option
date fair value
(in years)
(in thousands)
Balance, December 31, 2021
47,580
2.49
2.72
114
Granted
284,000
5.57
Vested
—
—
Outstanding – June 30, 2022
331,580
5.13
2.67
3,714
Vested or Expected to vest – June 30, 2022
331,580
5.13
2.67
3,714
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 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.
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NOTE 6 – NET LOSS PER SHARE:
a. Basic
Basic net loss per share is calculated by dividing the net loss attributable to the Company’s stockholders by the weighted average number of common stock outstanding.
For the three months
For the three months
For the six months
For the six months
ended June 30, 2022
ended June 30, 2021
ended June 30, 2022
ended June 30, 2021
in thousand U.S. dollars except per share and share amounts
Loss attributable to common stockholders
$
( 3,569 )
$
( 5,938 )
$
( 6,512 )
$
( 5,961 )
Basic and diluted net loss per common share
( 0.28 )
( 1.43 )
( 0.59 )
( 1.48 )
Weighted average of common share outstanding
12,717,794
4,155,661
10,984,090
4,027,124
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.
b. Diluted
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
June 30,
2022
2021
Common stock issuable in relation to:
Warrants
228,893
89,193
Options
296,590
29,250
Redeemable convertible preferred shares
—
3,695,328
RSUs
525,137
—
NOTE 7 – RELATED PARTY TRANSACTIONS:
a. On April 1, 2022, the Company awarded bonuses related to the completion of the IPO in the amount of $ 431,250 to Mr. Ron Bentsur and $ 200,000 each to Dr. Enrique Poradosu and Mr. Shay Shemesh payable upon the Company raising an additional $ 15.0 million in gross proceeds subsequent to the IPO offering.
b. On April 1, 2022, the Company increased the base annual salaries for Dr. Enrique Poradosu and Mr. Shay Shemesh to $ 425,000 .
c. 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. Additionally, 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. 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.
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d. 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. Mr. 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.
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