FORM 20‑F
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☐
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REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
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☒
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Ordinary shares, par value NIS 0.01 per share
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MDWD
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Nasdaq Global Market
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Large accelerated filer ☐
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Accelerated filer ☒
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Non‑accelerated filer ☐
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Emerging Growth Company ☐
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U.S. GAAP ☐
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International Financial Reporting Standards as issued
by the International Accounting Standards Board ☒ |
Other ☐
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FORM 20‑F
ANNUAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 2019 |
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PART I
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1
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1
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1
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31
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68
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68
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86
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105
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109
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111 |
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111
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118
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119
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PART II
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119
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120
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120
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121
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121
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121
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121
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121
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122
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122
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122
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122
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PART III
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123
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123
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124
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126
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the timing and conduct of our trials of NexoBrid, EscharEx and our pipeline product candidates, including statements regarding the timing, progress and results of current and future preclinical studies and clinical trials, and our
research and development programs;
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• |
the clinical utility, potential advantages and timing or likelihood of regulatory filings and approvals of NexoBrid, EscharEx and our pipeline product candidates;
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• |
our plans to develop and commercialize NexoBrid, EscharEx and our pipeline product candidates;
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• |
our estimates regarding expenses, future revenues, capital requirements and the need for additional financing;
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• |
anticipated funding under our contracts with the U.S. Biomedical Advanced Research and Development Authority;
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• |
our expectations regarding future growth, including our ability to develop new products;
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• |
our commercialization, marketing and manufacturing capabilities and strategy and the ability of our marketing team to cover regional burn centers and units;
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• |
our ability to maintain adequate protection of our intellectual property;
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• |
our estimates regarding the market opportunity for NexoBrid, EscharEx and our pipeline product candidates;
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• |
our expectation regarding the duration of our inventory of intermediate drug substance and products;
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• |
the impact of our research and development expenses as we continue developing product candidates;
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the impact of government laws and regulations.
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Item 2. |
OFFER STATISTICS AND EXPECTED TIMETABLE
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Item 3. |
KEY INFORMATION
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A. |
Selected Financial Data
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Year Ended December 31,
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||||||||||||||||||||
2015
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2016
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2017
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2018
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2019
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||||||||||||||||
(in thousands, except per share data)
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||||||||||||||||||||
Consolidated statements of operations data:
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Revenues
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$
|
601
|
$
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1,558
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$
|
2,496
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$
|
3,401
|
$
|
31,789
|
||||||||||
Cost of revenues(1)
|
2,519
|
2,158
|
1,578
|
2,088
|
11,849
|
|||||||||||||||
Gross (loss) profit
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(1,918
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)
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(600
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)
|
918
|
1,313
|
19,940
|
|||||||||||||
Operating expenses:
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||||||||||||||||||||
Research and development, gross
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8,139
|
14,779
|
14,625
|
17,915
|
10,070
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|||||||||||||||
Participation by BARDA and the Israeli Innovation Authority
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(2,118
|
)
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(7,711
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)
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(9,163
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)
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(13,843
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)
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(5,101
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)
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||||||||||
Research and development, net of participations(1)(2)
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6,021
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7,068
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5,462
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4,072
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4,969
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|||||||||||||||
Selling and marketing(1)
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9,284
|
8,403
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5,362
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4,188
|
4,064
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|||||||||||||||
General and administrative(1)
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4,004
|
4,084
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3,781
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3,799
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5,242
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|||||||||||||||
Other (income) loss, net
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-
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-
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-
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(6,786
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)
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1,172
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||||||||||||||
Operating profit (loss)
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(21,227
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)
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(20,155
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)
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(13,687
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)
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(3,960
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)
|
4,493
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|||||||||||
Financial income (expense), net
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(444
|
)
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1,270
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(846
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)
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(1,705
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)
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(2,427
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)
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|||||||||||
Profit (loss) from continuing operations
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(21,671
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)
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(18,885
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)
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(14,533
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)
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(5,665
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)
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2,066
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|||||||||||
Profit (loss) from discontinued operation(1)(3)
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(417
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)
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-
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(7,616
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)
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4,608
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2,889
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Net profit (loss)
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$
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(22,088
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)
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$
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(18,885
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)
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$
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(22,149
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)
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$
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(1,057
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)
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$
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4,955
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||||||
Foreign currency translation adjustments
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2
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7
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(29
|
)
|
13
|
8
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||||||||||||||
Total comprehensive profit (loss)
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$
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(22,086
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)
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$
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(18,878
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)
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$
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(22,178
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)
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$
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(1,044
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)
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$
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4,963
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||||||
Basic and diluted net profit (loss) per share from continuing operations(4)
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$
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(1.00
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)
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$
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(0.86
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)
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$
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(0.62
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)
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$
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(0.21
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)
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$
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0.08
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Basic and Diluted net profit (loss) per share from discounting operations(4)
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$
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(0.02
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)
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$
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-
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$
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(0.33
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)
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$
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0.17
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$
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0.10
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Weighted average number of ordinary shares used in computing profit (loss) per ordinary share (in thousands):
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||||||||||||||||||||
Basic:
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21,718
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21,862
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23,341
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27,114
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27,179
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Diluted:
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21,718
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21,862
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23,341
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27,114
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27,179
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As of December 31,
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2015
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2016
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2017
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2018
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2019
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(in thousands)
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||||||||||||||||||||
Consolidated balance sheet data:
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Cash and cash equivalents and short-term bank deposits
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$
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45,768
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$
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30,029
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$
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36,069
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$
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23,633
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$
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29,458
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||||||||||
Working capital, net(5)
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45,189
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28,232
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36,087
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27,816
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25,249
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|||||||||||||||
Total assets
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52,523
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35,764
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44,135
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35,276
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40,590
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|||||||||||||||
Total non-current liabilities
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23,847
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22,614
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29,082
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21,407
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15,048
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Total shareholders’ equity
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23,470
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7,770
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9,620
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8,972
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15,169
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(1) |
Includes share-based compensation expense as follows:
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Year Ended December 31,
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||||||||||||||||||||
2015
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2016
|
2017
|
2018
|
2019
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||||||||||||||||
(in thousands)
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||||||||||||||||||||
Cost of revenues
|
$
|
372
|
$
|
504
|
$
|
188
|
$
|
71
|
$
|
226
|
||||||||||
Research and development
|
511
|
752
|
488
|
181
|
375
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|||||||||||||||
Selling and marketing
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669
|
765
|
204
|
63
|
40
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|||||||||||||||
General and administrative
|
1,107
|
1,150
|
483
|
330
|
593
|
|||||||||||||||
Total share-based compensation expenses
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$
|
2,659
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$
|
3,171
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$
|
1,363
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$
|
645
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$
|
1,234
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(2) |
Research and development expenses, net is presented net of participation by the U.S. Biomedical Advanced Research and Development Authority (BARDA) and net of the change in the
fair value of the liability associated with government grants from the Israeli Innovation Authority (IIA). The effect of the participation by IIA totaled $1.3 million, $2.1 million, $0.6 million, $0.6 million and $1.3 million for
the years ended December 31, 2015, 2016, 2017, 2018 and 2019, respectively. The effect of the participation by BARDA totaled $0.8 million, $5.6 million, $8.6 million, $13.2 million and $3.8 million for the years ended December 31,
2015, 2016, 2017, 2018 and 2019, respectively. The participation by BARDA for the year ended December 31, 2019 in an amount of $3.8 million was classified as participation by BARDA in Research and development expenses, and BARDA
participation in an amount of $10.7 million was classified as revenues from development services. See “ITEM 5.B. Liquidity and Capital Resources” for more information.
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(3) |
Discontinued operation consists of revenues and expenses related to our exclusive, worldwide license for the development, production and commercialization of the PolyHeal Product, which
expired following the termination of our collaboration with Teva. We account for our discontinued operation in accordance with IFRS accounting standard 5, “Non-current Assets Held for Sale and Discontinued Operations.” See “ITEM 5.A.
Operating Results—Discontinued operation” for more information.
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(4) |
Basic and diluted net income (loss) per ordinary share is computed based on the basic and diluted weighted average number of ordinary shares outstanding during each period. For
additional information, see Note 21 to our consolidated annual financial statements included elsewhere in this report.
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(5) |
Working capital, net is defined as total current assets minus total current liabilities.
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B. |
Capitalization and Indebtedness
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C. |
Reasons for the Offer and Use of Proceeds
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D. |
Risk Factors
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• |
regulators may not authorize us to conduct a clinical trial within a country or at a prospective trial site or may change the design of a study;
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• |
delays may occur in reaching agreement on acceptable clinical trial terms with regulatory authorities or prospective sites, or obtaining institutional review board approval;
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our preclinical tests or clinical trials may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional trials or to abandon strategic projects;
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the number of patients required for our clinical trials may be larger than we anticipate, enrollment in our clinical trials may be slower or more difficult than we expect, or patients may not participate in necessary follow-up
visits to obtain required data, any of which would result in significant delays in our clinical testing process;
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our third-party contractors, such as a research institute, may fail to comply with regulatory requirements or meet their contractual obligations to us;
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we may be forced to suspend or terminate our clinical trials if the participants are being exposed, or are thought to be exposed, to unacceptable health risks or if any participant experiences an unexpected serious adverse event;
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regulators or institutional review boards may require that we hold, suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements;
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undetected or concealed fraudulent activity by a clinical researcher, if discovered, could preclude the submission of clinical data prepared by that researcher, lead to the suspension or substantive scientific review of one or more
of our marketing applications by regulatory agencies, and result in the recall of any approved product distributed pursuant to data determined to be fraudulent;
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the cost of our clinical trials may be greater than we anticipate;
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an audit of preclinical or clinical studies by regulatory authorities may reveal noncompliance with applicable protocols or regulations, which could lead to disqualification of the results and the need to perform additional
studies; and
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delays may occur in obtaining our clinical materials.
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• |
the market acceptance or demand for NexoBrid, EscharEx or any of our pipeline product candidates, if approved;
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• |
the ability to set a price that we believe is fair for NexoBrid, EscharEx or any of our pipeline product candidates, if approved;
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• |
our ability to generate revenues and achieve or maintain profitability;
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• |
the level of taxes that we are required to pay; and
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• |
the availability of capital.
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• |
an annual, nondeductible fee on any entity that manufactures or imports certain branded prescription drugs and biologic agents, apportioned among these entities according to their market share in certain government healthcare
programs;
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an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program to 23.1% and 13.0% of the average manufacturer price for branded and generic drugs, respectively;
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• |
addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected;
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a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 70% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period,
as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D;
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extension of manufacturers’ Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations;
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expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals and by adding new mandatory eligibility categories for certain individuals with
income at or below 133% of the Federal Poverty Level, thereby potentially increasing manufacturers’ Medicaid rebate liability;
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expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program;
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a new requirement to annually report drug samples that manufacturers and distributors provide to physicians; and
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• |
a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research.
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• |
the willingness of physicians, burn care teams and hospital administrators to administer our products and the acceptance of our products as part of the medical department routine;
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• |
the consent of hospitals to fund/purchase NexoBrid or obtain third-party coverage or reimbursement for our products;
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• |
the ability to offer NexoBrid, EscharEx and our pipeline product candidates for sale at an attractive value;
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• |
the efficacy and potential advantages of NexoBrid, EscharEx and our pipeline product candidates relative to current standard of care;
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• |
the prevalence and severity of any side effects; and
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• |
the efficacy, potential advantages and timing of introduction to the market of alternative treatments.
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accelerate our clinical development activities, particularly with respect to our clinical development of EscharEx for the debridement of chronic and other hard-to-heal wounds and our clinical trials for our product candidate for
the treatment of connective tissue disorders or other indications;
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• |
continue to operate our sales, marketing and distribution infrastructure in Europe and thereafter in other locations around the world to commercialize NexoBrid and any pipeline product candidates for which we obtain marketing
approval;
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• |
further scale-up the manufacturing process for NexoBrid;
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seek regulatory and marketing approvals for NexoBrid and any pipeline product candidate that successfully completes clinical trials;
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initiate additional preclinical, clinical or other studies for NexoBrid, EscharEx and our pipeline product candidates, and seek to identify and validate new products;
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acquire rights to other product candidates and technologies;
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change or add suppliers;
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maintain, expand and protect our intellectual property portfolio;
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attract and retain skilled personnel; and
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experience any delays or encounter issues with any of the above.
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• |
delay, scale back or discontinue the development, manufacturing scale-up or commercialization of NexoBrid, EscharEx or our pipeline product candidates;
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seek additional corporate partners for NexoBrid, EscharEx or one or more of our pipeline product candidates on terms that are less favorable than might otherwise be available; or
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relinquish or license to additional parties, on unfavorable terms, our rights to NexoBrid, EscharEx or our pipeline product candidates that we otherwise would seek to develop or commercialize ourselves.
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• |
restrictions on the marketing or manufacturing of the product, withdrawal of the product from the market or voluntary or mandatory product recalls;
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• |
fines, warning letters or holds on clinical trials;
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• |
harm to our reputation, reduced demand for our products and loss of market acceptance;
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• |
refusal by the applicable regulatory authority to approve pending applications or supplements to approved applications filed by us, or suspension or revocation of product license approvals;
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• |
product seizure or detention, or refusal to permit the import or export of products; and
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• |
injunctions or the imposition of civil or criminal penalties.
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• |
the Federal Acquisition Regulations (“FAR”) and agency-specific regulations supplemental to the FAR, which comprehensively regulate the procurement, formation, administration and performance of government contracts;
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• |
business ethics and public integrity obligations, which govern conflicts of interest and the hiring of former government employees, restrict the granting of gratuities and funding of lobbying activities and include other
requirements such as the Anti-Kickback Statute and Foreign Corrupt Practices Act;
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• |
export and import control laws and regulations; and
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• |
laws, regulations and executive orders restricting the use and dissemination of information classified for national security purposes and the exportation of certain products and technical data.
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• |
any of our present or future patents or patent claims or other intellectual property rights will not lapse or be invalidated, circumvented, challenged or abandoned;
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• |
our intellectual property rights will provide competitive advantages or prevent competitors from making or selling competing products;
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• |
our ability to assert our intellectual property rights against potential competitors or to settle current or future disputes will not be limited by our agreements with third parties;
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• |
any of our pending or future patent applications will be issued or have the coverage originally sought;
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• |
our intellectual property rights will be enforced in jurisdictions where competition may be intense or where legal protection may be weak; or
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we will not lose the ability to assert our intellectual property rights against, or to license our technology to, others and collect royalties or other payments.
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• |
actual or anticipated variations in our and our competitors’ results of operations and financial condition;
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• |
market acceptance of our products;
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• |
general economic and market conditions and other factors, including factors unrelated to our operating performance;
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• |
the mix of products that we sell and related services that we provide;
|
• |
changes in earnings estimates or recommendations by securities analysts, if our ordinary shares continue to be covered by analysts;
|
• |
publication of the results of preclinical or clinical trials for NexoBrid, EscharEx or any of our pipeline product candidates;
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• |
failure by us to achieve a publicly announced milestone;
|
• |
delays between our expenditures to develop and market new or enhanced products and the generation of sales from those products;
|
• |
development of technological innovations or new competitive products by others;
|
• |
announcements of technological innovations or new products by us;
|
• |
regulatory developments and the decisions of regulatory authorities as to the marketing of our current products or the approval or rejection of new or modified products;
|
• |
developments concerning intellectual property rights, including our involvement in litigation;
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• |
changes in our expenditures to develop, acquire or license new products, technologies or businesses;
|
• |
changes in our expenditures to promote our products;
|
• |
changes in the structure of healthcare payment systems;
|
• |
our sale or proposed sale, or the sale by our significant shareholders, of our ordinary shares or other securities in the future;
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• |
changes in key personnel;
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• |
success or failure of our research and development projects or those of our competitors; and
|
• |
the trading volume of our ordinary shares.
|
A. |
History and Development of the Company
|
B. |
Business Overview
|
• |
The extent of the surface that the burn occupies is usually referred to as percent of total body surface area (“TBSA”). A burn on an adult’s entire palm would generally amount to 1% TBSA, and the average hospitalized patient has a
burn covering approximately 9% TBSA. Burns covering more than 15-20% TBSA usually require hospitalization and may result in dehydration, shock and increased risk of mortality.
|
• |
The depth of the burn, referred to in terms of “degree” is generally classified into four categories:
|
○ |
Superficial or first degree burns. Such burns do not penetrate the basal membrane and usually heal naturally.
|
○ |
Dermal/partial thickness or second degree burns. Such burns are characterized by varying amounts of damaged dermis and can be further subdivided into superficial and deep partial-thickness
burns. Superficial partial-thickness burns may heal spontaneously after removal of the covering thin eschar. Conversely, deep partial-thickness burns are often difficult for physicians to accurately diagnose before eschar removal and
may progress and transform into full-thickness burns if not debrided in a timely manner, depending on the magnitude of latent tissue death of the surrounding skin.
|
○ |
Full thickness or third degree burns. Such burns are characterized by death of the entire dermal tissue down to the subcutaneous fat and must be debrided and treated by autografting, which
is the process of harvesting skin from healthy donor sites on a patient’s body and transplanting it on the post-debridement, clean wound bed.
|
○ |
Fourth degree burns. Such burns, which are rare, extend beyond the subcutaneous fat tissue into the underlying structures, such as muscle or bone, and also require debridement and further
substantial treatment.
|
• |
Other factors include the age of the victim, the body part where the burn occurred and any co-morbidities of the patient. For example, some patients may require hospitalization regardless of the TBSA or degree of the burn, such as
children, the elderly or victims with burns to the extremities, joints or head/neck area or with co-morbidities such as smoke inhalation, diabetes or obesity.
|
• |
the prevention of local infection, sepsis (a systemic inflammatory response caused by severe infection) and additional damage to surrounding viable tissue; and
|
• |
the initiation of the body’s healing process and scar prevention.
|
• |
Surgical debridement
|
○ |
Surgical debridement predominantly includes tangential excision, a procedure in which a surgeon amputates the entire dead tissue mass, layer after layer, down to healthy, viable tissue. The excision is extended into healthy intact
tissue to make sure that no trace of the eschar remains, resulting in up to an estimated 30-50% of healthy tissue being excised during this procedure. Other methods include dermabrasion, in which a mechanically powered, hand-held
rotating abrading cylinder is used to slowly scrape off tissue, and hydro surgery, in which a high-pressure flow of water abrades the tissue. These alternative methods have attempted to limit the trauma associated with tangential
excision, but entail spray of contaminated eschar or take a significantly longer time to complete than tangential excision.
|
○ |
The benefits of surgical eschar removal are that it is usually fast and effective. Disadvantages include the significant trauma of the procedure, associated blood loss, risk of surgery in delicate areas of the body such as hands,
added costs, and, most importantly, the loss of viable tissue that necessitates additional surgical procedures for harvesting skin from healthy donor sites and autografting.
|
○ |
Due to the disadvantages of surgery in extensive burns some surgeons limit their debriding surgery to only a part of the affected area in a single session (15-30% TBSA in most centers), thus delaying full debridement by days. After
several days, complications related to eschar contamination may begin and some of the benefits of the earlier debridement may not be realized. On the other hand, when excising burns immediately, all suspected necrotic tissue will be
excised, inevitably resulting in over-excision, especially in “indeterminate” burns, as after surgical excision, the remaining skin often no longer has any spontaneous healing potential and will heal only by autografting.
|
• |
Non-surgical debridement
|
○ |
Non-surgical debridement includes many different treatment options that do not require direct surgical removal of the skin to remove eschar. With non-surgical debridement, the eschar is naturally, but slowly, removed by contaminant
microorganisms, tissue autolysis, or self-decomposition, and the inflammatory process that may lead to serious local and systemic complications. In seeking to facilitate such natural processes, topical medication, anti-microbial
agents, enzymes and biological/chemical applications are often applied onto the eschar.
|
○ |
The benefits of this approach are that it is non-surgical, reduces trauma to the patient and is easier to apply. Disadvantages include numerous dressing changes and mechanical scraping with limited debridement efficacy. This
prolongs the eschar removal process, which may lead to death of the tissue surrounding the initial burn wound, causing partial-thickness wounds to transform into full-thickness wounds and forming granulation tissue that may develop
into heavy scars.
|
• |
Venous leg ulcers. VLUs develop as a result of vascular insufficiency, or the inability for the vasculature of the leg to return blood back toward the heart properly. Based on our
comprehensive market research study on EscharEx that involved more than 200 healthcare professionals in the U.S. and Europe, which was updated in 2019, the VLU overall prevalence is approximately 3.3 million (1% of total U.S.
population). Furthermore, the annual incidence of VLUs in the U.S. alone, is approximately 960,000 (accounting for 45% recurrence), of which approximately 690,000 undergo debridement in a given year. These ulcers usually form on the
sides of the lower leg, above the ankle and below the calf, and are slow to heal and often recur if preventative steps are not taken. The risk of VLUs can increase as a result of a blood clot forming in the deep veins of the legs,
obesity, smoking, lack of physical activity or work that requires many hours of standing.
|
• |
Diabetic foot ulcers. Diabetes can lead to a reduction in blood flow, which can cause patients to lose sensation in their feet and may prevent them from noticing injuries, sometimes leading
to the development of DFUs, which are open sores or ulcers on the feet that may take several weeks to heal, if ever. Based on our comprehensive market research study conducted in 2015 on EscharEx that involved more than 200 healthcare
professionals in the U.S. and Europe and, which was updated in 2019, there are estimated 31 million diabetics in 2019 (9.4% of the U.S. population). The annual incidence of DFUs in the United States alone, is approximately 990,000
(accounting for 45% recurrence), of which approximately 820,000 undergo debridement in a given year.
|
• |
Pressure ulcers. Pressure ulcers form as a result of pressure sores, or bed sores, which are injuries to the skin or the tissue beneath the skin. Constant pressure on an area of skin reduces
blood supply to the area and over time can cause the skin to break down and form an open ulcer. These often occur in patients who are hospitalized or confined to a chair or bed, and usually form over bony areas, where there is little
cushion between the bone and the skin, such as lower parts of the body. Annually, 2.5 million pressure ulcers are treated in the United States in acute care facilities alone.
|
• |
Surgical/traumatic wounds. Surgical wounds form as a result of various types of surgical procedures such as investigative or corrective, minor or major, open (traditional) or minimal access
surgery, elective or emergency, and incisions (simple cuts) or excision (removal of tissue), among others. Traumatic wounds form as a result of cuts, lacerations or puncture wounds, which have caused damage to the skin and underlying
tissue. Severe traumatic wounds may require surgical intervention to close the wound and stabilize the patient. Surgical/traumatic hard-to-heal wounds develop for various reasons, such as local surgical complications, suboptimal
closure techniques, presence of foreign materials, exposed bones or tendons and infection. In the United States, millions receive post-surgical wound care annually.
|
• |
Dupuytren’s disease: a condition where one or more fingers are permanently flexed, caused by the formation of scar-like tissues below the palmar skin (Palmar Fascia), forming hard “cords”
that freeze the fingers in non-functional flexion contraction. This condition affects approximately 6.2 million people in the United States alone.
|
• |
Peyronie’s disease: the development of scar-like tissue, similar to Dupuytren’s cords in the shaft of the penis, causing pain and distortion on erection, preventing intercourse. Peyronie’s
disease is typically caused by trauma and affects men over 50 years old. Surgical treatment may be an option in some cases, but can cause complications and may result in a shortening and even greater distortion of the penis.
Approximately 3.7% to 7.1% of the male population above the age of 50 suffers from Peyronie’s disease in the United States and approximately 3.2% of such age group suffer from the disease in Europe.
|
• |
Frozen shoulder syndrome: a disorder that causes the smooth tissues of the shoulder capsule to become thick, stiff and inflamed, affecting approximately 2% to 5% of the worldwide population
and 10% to 20% of people with diabetes according to industry sources.
|
• |
Excessive/unaesthetic scars: A scar is a mark on the skin which is formed due to infection, injury, surgery, inflammation of tissue, burns, and acne. Scars can be of various sizes, shapes,
and colors, depending on the age of the scar, the site of the scar and family history. Scar formation is unpredictable and varies from person to person. Excessive scarring can have unpleasant physical, aesthetic, psychological and
social consequences. Estimates indicate that each year around 100 million people in the developed world acquire scars following elective surgery and surgery for trauma. Of these, approximately 15% have excessive or unaesthetic scars.
|
Trial 1
|
Trial 2
|
Trial 3
|
Trial 4
|
Trial 5
|
Trial 6
|
Trial 7
|
Trial 8
|
|
Study Type
|
• Retrospective Phase 2
• Investigator initiated
|
• Dose range Phase 2
|
• Prospective Phase 2
• IND/FDA
|
• Phase 2
• IND/FDA
|
• Phase 3
• EMA
|
• Phase 3b
• EMA
|
• Phase 2
• EMA
|
• Post approval
safety study
• EMA
|
Design
|
• Data collected from files of patients treated with NexoBrid
|
• Parallel, controlled, observer-
blind, randomized, single-center |
• Parallel, controlled, observer-
blind, three-arm, randomized, multi-center |
• Parallel, controlled, open label, three-arm, randomized, single-center
|
• Parallel, controlled, open label, two-arm, randomized, multi-center
|
• Parallel, controlled, blinded, two-arm, multi-center
|
• Open label,
single-arm, multi-center |
• Observational
retrospective
data collection
|
Main Objectives
|
• Safety
• Efficacy
|
• Comparison of efficacy and safety
|
• Safety
• Efficacy
|
• Safety
|
• Safety
• Efficacy
|
• Long-term scar assessment
• Quality of life
|
• Safety and pharmacokinetics
• Efficacy
|
• Effectiveness of the
risk minimization
activities
|
Wound Types
|
• Deep partial/full thickness thermal burns
|
• Deep partial/full thickness thermal burns
|
• Deep partial/full thickness thermal burns
|
• Deep partial/full thickness thermal burns
|
• Deep partial/full thickness thermal burns
|
• Scar formation
|
• Deep partial/full thickness thermal burns
|
• Burns which were treated with NexoBrid in the market
|
Number of Patients
|
• 154
|
• 20
|
• 140
|
• 30
|
• 182
|
• 89
|
• 36
|
• 160
|
Study Length
|
• 1985-2000
|
• 2002-2005
|
• 2003-2004
|
• 2006-2007
|
• 2006-2009
|
• 2011
|
• 2009-2015
|
• 2017-2019
|
Location
|
• Israel
|
• Israel
|
• International
|
• United States
|
• International
|
• International
|
• International
|
• Europe
|
(*) |
Only deep partial-thickness wounds are presented, as full-thickness wounds always require autografting due to the lack of viable dermis, regardless of the technique used to remove the eschar.
|
• |
laboratory tests, animal studies and formulation studies all performed in accordance with the applicable E.U. GLP or GMP regulations;
|
• |
submission to the relevant national authorities of a clinical trial application (“CTA”), which must be approved before human clinical trials may begin;
|
• |
performance of adequate and well‑controlled clinical trials to establish the safety and efficacy of the product for each proposed indication;
|
• |
submission to the relevant competent authorities of a marketing authorization application (“MAA”), which includes the data supporting preclinical and clinical safety and efficacy as well as detailed information on the manufacture
and composition and control of the product development and proposed labeling as well as other information;
|
• |
inspection by the relevant national authorities of the manufacturing facility or facilities and quality systems (including those of third parties) at which the product is produced, to assess compliance with strictly enforced cGMP;
|
• |
potential audits of the non‑clinical and clinical trial sites that generated the data in support of the MAA; and
|
• |
review and approval by the relevant competent authority of the MAA before any commercial marketing, sale or shipment of the product.
|
• |
Phase 1 (Most typical kind of study: Human Pharmacology);
|
• |
Phase 2 (Most typical kind of study: Therapeutic Exploratory);
|
• |
Phase 3 (Most typical kind of study: Therapeutic Confirmatory); and
|
• |
Phase 4 (Variety of Studies: Therapeutic Use).
|
• |
medicines that have been authorized for marketing in the European Union with the results of PIP studies included in the product information are eligible for an extension of their patent protection by six months. This is the case
even when the studies’ results are negative;
|
• |
for orphan medicines, such as NexoBrid, the incentive is an additional two years of market exclusivity instead of one;
|
• |
scientific advice and protocol assistance at the EMA are free of charge for questions relating to the development of medicines for children; and
|
• |
medicines developed specifically for children that are already authorized, but are not protected by a patent or supplementary protection certificate, can apply for a pediatric use marketing authorization (“PUMA”). If a PUMA is
granted, the product will benefit from 10 years of market protection as an incentive.
|
• |
Mutual recognition procedure. If an authorization has been granted by one member state, or the Reference Member State, an application may be made for mutual recognition in one or more other
member states, or the Concerned Member State(s).
|
• |
Decentralized procedure. The decentralized procedure may be used to obtain a marketing authorization in several European member states when the applicant does not yet have a marketing
authorization in any country.
|
• |
National procedure. Applicants following the national procedure will be granted a marketing authorization that is valid only in a single member state. Furthermore, this marketing
authorization is not based on recognition of another marketing authorization for the same product awarded by an assessment authority of another member state. If marketing authorization in only one member state is preferred, an
application can be filed with the national competent authority of a member state. The national procedure can also serve as the first phase of a mutual recognition procedure.
|
• |
completion of laboratory tests, animal studies and formulation studies in compliance with the FDA’s GLP and GMP regulations, as applicable;
|
• |
submission to the FDA of an investigational new drug application (“IND”), which must become effective before clinical trials may begin;
|
• |
approval by an independent institutional review board (“IRB”) at each clinical site before each trial may be initiated;
|
• |
performance of adequate and well‑controlled clinical trials in accordance with GCP to establish the safety and efficacy of the product for each indication;
|
• |
preparation and submission to the FDA of a BLA;
|
• |
satisfactory completion of an FDA advisory committee review, if applicable;
|
• |
satisfactory completion of one or more FDA inspections of the manufacturing facility or facilities at which the product, or components thereof, are produced to assess compliance with cGMP requirements, and to assure that the
facilities, methods and controls are adequate to preserve the product’s safety, purity and potency, and of selected clinical investigation sites to assess compliance with GCP; and
|
• |
payment of user fees and FDA review and approval of the BLA to permit commercial marketing of the product for particular indications for use in the United States.
|
Phase 1: |
The investigational product is initially introduced into healthy human subjects or patients with the target disease or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if
possible, to gain an early indication of its effectiveness and to determine optimal dosage.
|
Phase 2: |
The investigational product is administered to a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to
determine dosage tolerance and optimal dosage.
|
Phase 3: |
The investigational product is administered to an expanded patient population, generally at geographically dispersed clinical trial sites, in well‑controlled clinical trials to generate enough data to statistically evaluate the
efficacy and safety of the product for approval, to establish the overall risk‑benefit profile of the product, and to provide adequate information for the labeling of the product.
|
• |
increases the minimum level of Medicaid rebates payable by manufacturers of brand‑name drugs from 15.1% to 23.1%;
|
• |
requires collection of rebates for drugs paid by Medicaid managed care organizations; and
|
• |
imposes a non‑deductible annual fee on pharmaceutical manufacturers or importers who sell certain “branded prescription drugs” to specified federal government programs.
|
• |
the federal healthcare Anti‑Kickback Statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or
reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service for which payment may be made, in whole or in part, under a federal healthcare program such as Medicare and Medicaid;
|
• |
the federal False Claims Act imposes civil penalties, and provides for civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims
for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government;
|
• |
HIPAA, imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;
|
• |
HIPAA, as amended by HITECH and its implementing regulations, also imposes obligations, including mandatory contractual terms, on covered entities and their respective business associates with respect to safeguarding the privacy,
security and transmission of individually identifiable health information;
|
• |
the federal false statements statute prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare
benefits, items or services;
|
• |
the federal physician payment transparency requirements under the Affordable Care Act require certain manufacturers of drugs, devices and medical supplies to report to Centers for Medicare & Medicaid Services information
related to payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other healthcare professionals, and teaching hospitals and physician ownership
and investment interests;
|
• |
analogous state and foreign laws and regulations, such as state anti‑kickback and false claims laws, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non‑governmental
third‑party payors, including private insurers; and
|
• |
similar healthcare laws and regulations in the E.U. and other jurisdictions, including reporting requirements detailing interactions with and payments to healthcare providers and laws governing the privacy and security of personal
data, including the General Data Protection Regulation (“GDPR”), which imposes obligations and restrictions on the collection and use of personal data relating to individuals located in the E.U. and EEA (including with regard to
health data).
|
• |
the scope, rate of progress and expense of our research and development activities;
|
• |
preclinical results;
|
• |
clinical trial results;
|
• |
the terms and timing of regulatory approvals;
|
• |
the expense of filing, prosecuting, defending and enforcing patent claims and other intellectual property rights; and
|
• |
the ability to market, commercialize and achieve market acceptance for NexoBrid or any other product candidate that we may develop in the future.
|
Years Ended December 31,
|
||||||||
2018
|
2019
|
|||||||
Consolidated statements of operations data:
|
||||||||
Revenue from sales of products
|
$
|
3,225
|
$
|
3,393
|
||||
Revenue from development services
|
$
|
-
|
$
|
10,678
|
||||
Revenue from license agreements
|
$
|
176
|
$
|
17,718
|
||||
Total Revenues
|
$
|
3,401
|
$
|
31,789
|
||||
Cost of revenues
|
2,088
|
11,849
|
||||||
Gross profit
|
1,313
|
19,940
|
||||||
Operating expenses:
|
||||||||
Research and development, gross
|
17,915
|
10,070
|
||||||
Participation by BARDA and IIA
|
(13,843
|
)
|
(5,101
|
)
|
||||
Research and development, net of participations
|
4,072
|
4,969
|
||||||
Selling and marketing
|
4,188
|
4,064
|
||||||
General and administrative
|
3,799
|
5,242
|
||||||
Other income from settlement agreement
|
(7,537
|
)
|
-
|
|||||
Other expenses
|
751
|
1,172
|
||||||
Operating profit (loss)
|
(3,960
|
)
|
4,493
|
|||||
Financial income
|
412
|
556
|
||||||
Financial expense
|
(2,117
|
)
|
(2,983
|
)
|
||||
Profit (loss) from continuing operations
|
(5,665
|
)
|
2,066
|
|||||
Profit from discontinued operation
|
4,608
|
2,889
|
||||||
Net profit (loss)
|
$
|
(1,057
|
)
|
$
|
4,955
|
Years Ended December 31,
|
||||||||
2018
|
2019
|
|||||||
International (excluding U.S.)
|
$
|
3,401
|
$
|
3,285
|
||||
U.S.
|
$
|
-
|
$
|
28,504
|
||||
$
|
3,401
|
$
|
31,789
|
Issuance of
Ordinary Shares |
Government
Grants and BARDA Funding, net |
Total
|
||||||||||
(in thousands)
|
||||||||||||
Year ended December 31, 2019
|
$
|
-
|
$
|
14,088
|
$
|
14,463
|
||||||
Year ended December 31, 2018
|
$
|
-
|
$
|
13,284
|
$
|
13,284
|
Year Ended December 31,
|
||||||||
2018
|
2019
|
|||||||
Net cash provided by (used in):
|
||||||||
Continuing operating activities
|
$
|
(12,154
|
)
|
$
|
9,888
|
|||
Continuing investing activities
|
(17,040
|
)
|
(5,658
|
)
|
||||
Continuing financing activities
|
46
|
(1,006
|
)
|
|||||
Discontinued operating activities
|
-
|
(1,599
|
)
|
|||||
Discontinued investing activities
|
-
|
(1,239
|
)
|
- |
The contracts are negotiated as a package with a single commercial objective.
|
- |
The amount of consideration to be paid in one contract depends on the consideration or performance of another contract.
|
- |
The goods or services that we will provide according to the contracts represent a single performance obligation for us.
|
• |
Fair value of our ordinary shares. After March 20, 2014, the date our ordinary shares began trading on Nasdaq, the grant date fair value for equity‑based awards is based on the closing price
of our ordinary shares on Nasdaq on the date of grant and fair value for all other purposes related to share‑based awards is the closing price of our ordinary shares on Nasdaq on the relevant date.
|
• |
Volatility. The expected share price volatility was based on the historical equity volatility of the ordinary shares of comparable companies that are publicly traded.
|
• |
Early exercise factor. Since adequate historical experience is not available to provide a reasonable estimate, the early exercise factor is determined based on peer group imperial studies.
|
• |
Risk‑free rate. The risk‑free interest rate is based on the yield from U.S. Treasury zero‑coupon bonds with a term equivalent to the contractual life of the options.
|
• |
Expected dividend yield. We have never declared or paid any cash dividends and do not presently plan to pay cash dividends in the foreseeable future. Consequently, we use an expected
dividend yield of zero.
|
• |
amortization of the cost of purchased a patent, rights to use a patent, and know-how, which are used for the development or advancement of the Industrial Enterprise, over an eight-year period, commencing on the year in which such
rights were first exercised;
|
• |
under limited conditions, an election to file consolidated tax returns with related Israeli Industrial Companies controlled by it; and
|
• |
expenses related to a public offering are deductible in equal amounts over a three years period commencing on the year of the offering.
|
Name
|
Age
|
Position
|
||
Executive Officers
|
||||
Sharon Malka
|
48
|
Chief Executive Officer
|
||
Boaz Gur-Lavie
|
46
|
Chief Financial Officer
|
||
Lior Rosenberg, M.D.
|
74
|
Chief Medical Technology Officer
|
||
Ety Klinger Ph.D.
|
58
|
Chief Research and Development Officer
|
||
Yaron Meyer
|
41
|
Executive Vice President, General Counsel and Corporate Secretary
|
||
Directors
|
||||
Stephen T. Wills(3)(5)
|
63
|
Active Chairman of the Board of Directors
|
||
Ofer Gonen
|
47
|
Director
|
||
Assaf Segal
|
48
|
Director
|
||
Vickie R. Driver M.D(1)(2)(3)
|
66
|
Director
|
||
Nissim Mashiach(1)(2)(3)(4)
|
59
|
Director
|
||
Sharon Kochan(1)(2)(3)(4)
|
51
|
Director
|
(1) |
Member of our audit committee.
|
(2) |
Member of our compensation committee.
|
(3) |
Independent director under the rules of the Nasdaq Stock Market.
|
(4) |
External director under the Companies Law.
|
Name and Position
|
Salary &
Social Benefits(1) |
Bonus
|
Share‑Based
Payment(2) |
Other Compensation(3)
|
Total
|
|||||||||||||||
( thousand U.S. dollars)(4)
|
||||||||||||||||||||
Sharon Malka, Chief Executive Officer(5)
|
368
|
140
|
349
|
20
|
877
|
|||||||||||||||
Lior Rosenberg, M.D., Chief Medical Technology Officer
|
306
|
81
|
45
|
18
|
450
|
|||||||||||||||
Carsten Henke, Chief Commercial Officer EU & Managing Director of MediWound Germany GmbH
|
270
|
37
|
10
|
31
|
348
|
|||||||||||||||
Ety Klinger, Chief Research & Development Officer
|
260
|
70
|
60
|
20
|
410
|
|||||||||||||||
Gal Cohen, former President and Chief Executive Officer(6)
|
205
|
20
|
17
|
203
|
445
|
(1) |
Represents the officer’s gross salary plus payment of mandatory social benefits made by the company on behalf of such officer. Such benefits may include, to the extent applicable to the
executive, payments, contributions and/or allocations for savings funds (e.g., Managers’ Life Insurance Policy), education funds (referred to in Hebrew as “keren hishtalmut”), pension, severance, risk insurances (e.g., life or work
disability insurance) and payments for social security.
|
(2) |
Represents the equity‑based compensation expenses recorded in the company’s consolidated financial statements for the year ended December 31, 2018 based on the options’ grant date fair
value in accordance with accounting guidance for equity‑based compensation.
|
(3) |
Represents the other benefits to such officer, which includes either or both of (i) car expenses, including lease costs, gas and maintenance, provided to the officers, (ii) vacation
benefits, (iii) severance pay and (iv) termination fee, if applicable.
|
(4) |
Converted (i) from NIS into U.S. dollars at the rate of 3.56 = U.S$1.00, based on the average representative rate of exchange between the NIS and the U.S. dollar in the year ended
December 31, 2019 and (ii) from Euro into U.S. dollars at the rate of Euro 1.12 = U.S$1.00, based on the average representative rate of exchange between the Euro and the U.S. dollar as reported by the Bank of Israel in the year ended
December 31, 2019.
|
(5) |
Mr. Malka formerly served as our Chief Financial and Operations Officer until being appointed as
our Chief Executive Officer effective in late May 2019.
|
Name
|
Number of
Options |
Number of
RSUs
|
Grant Date
|
Exercise
Price |
Vested
Options/RSU's as of February 15, 2020 |
Expiration Date
|
||||||||||||
Sharon Malka, Chief Executive Officer
|
49,172
|
1/15/2011
|
$
|
7.97
|
49,172
|
1/14/2021
|
||||||||||||
38,000
|
1/15/2011
|
$
|
9.82
|
38,000
|
1/14/2021
|
|||||||||||||
121,600
|
12/24/2013
|
$
|
12.89
|
121,600
|
12/23/2023
|
|||||||||||||
50,000
|
12/23/2015
|
$
|
9.58
|
50,000
|
12/22/2025
|
|||||||||||||
135,000
|
12/31/2018
|
$
|
5.15
|
33,750
|
12/30/2028
|
|||||||||||||
45,000
|
12/31/2018
|
11,250
|
||||||||||||||||
40,000
|
5/2/2019
|
$
|
4.92
|
10,000
|
5/1/2029
|
|||||||||||||
20,000
|
5/2/2019
|
5,000
|
||||||||||||||||
Lior Rosenberg, Chief Medical Technology Officer
|
76,000
|
12/24/2013
|
$
|
12.89
|
76,000
|
12/23/2023
|
||||||||||||
25,000
|
12/23/2015
|
$
|
9.58
|
25,000
|
12/22/2025
|
|||||||||||||
20,000
|
12/31/2018
|
$
|
5.15
|
5,000
|
12/30/2028
|
|||||||||||||
6,667
|
12/31/2018
|
1,666
|
• |
such majority includes at least a majority of the shares held by all shareholders who are not controlling shareholders and do not have a personal interest in the election of the external director (other than a personal interest not
deriving from a relationship with a controlling shareholder) that are voted at the meeting, excluding abstentions, to which we refer as a disinterested majority; or
|
• |
the total number of shares voted by non‑controlling shareholders and by shareholders who do not have a personal interest in the election of the external director against the election of the external director does not exceed 2% of
the aggregate voting rights in the company.
|
(i) |
his or her service for each such additional term is recommended by one or more shareholders holding at least 1% of the company’s voting rights and is approved at a shareholders meeting by a disinterested majority, where the total
number of shares held by non‑controlling, disinterested shareholders voting for such reelection exceeds 2% of the aggregate voting rights in the company, subject to additional restrictions set forth in the Israeli Companies Law with
respect to affiliations of external director nominee; or
|
(ii) |
his or her service for each such additional term is recommended by the board of directors and is approved at a meeting of shareholders by the same majority required for the initial election of an external director (as described
above).
|
• |
an employment relationship;
|
• |
a business or professional relationship even if not maintained on a regular basis (excluding insignificant relationships);
|
• |
control; and
|
• |
service as an office holder, excluding service as a director in a private company prior to the initial public offering of its shares 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.
|
• |
he or she meets the qualifications for being appointed as an external director, except for the requirement (i) that the director be an Israeli resident (which does not apply to companies such as ours whose securities have been
offered outside of Israel or are listed for trading outside of Israel) and (ii) for accounting and financial expertise or professional qualifications; and
|
• |
he or she has not served as a director of the company for a period exceeding nine consecutive years. For this purpose, a break of less than two years in the service shall not be deemed to interrupt the continuation of the service.
|
• |
oversight of our independent registered public accounting firm and recommending the engagement, compensation or termination of engagement of our independent registered public accounting firm to the board of directors in accordance
with Israeli law;
|
• |
recommending the engagement or termination of the person filling the office of our internal auditor; and
|
• |
recommending the terms of audit and non‑audit services provided by the independent registered public accounting firm for pre‑approval by our board of directors.
|
• |
determining whether there are deficiencies in the business management practices of our company, including in consultation with our internal auditor or the independent auditor, and making recommendations to the board of directors to
improve such practices;
|
• |
determining whether to approve certain related party transactions (including transactions in which an office holder has a personal interest and whether such transaction is extraordinary or material under the Israeli Companies Law)
(see “—Approval of Related Party Transactions Under Israeli Law”);
|
• |
establishing the approval process (including, potentially, the approval of the audit committee and conducting a competitive procedure supervised by the audit committee) for certain transactions with a controlling shareholder or in
which a controlling shareholder has a personal interest;
|
• |
where the board of directors approves the working plan of the internal auditor, examining such working plan before its submission to the board of directors and proposing amendments thereto;
|
• |
examining our internal audit controls and internal auditor’s performance, including whether the internal auditor has sufficient resources and tools to fulfill his responsibilities;
|
• |
examining the scope of our auditor’s work and compensation and submitting a recommendation with respect thereto to our board of directors or shareholders, depending on which of them is considering the appointment of our auditor;
and
|
• |
establishing procedures for the handling of employees’ complaints as to the management of our business and the protection to be provided to such employees.
|
• |
the knowledge, skills, expertise and accomplishments of the relevant office holder;
|
• |
the office holder’s roles and responsibilities and prior compensation agreements with him or her;
|
• |
the relationship between the terms offered and the average compensation of the other employees of the company, including those employed through manpower companies;
|
• |
the impact of disparities in salary upon work relationships in the company;
|
• |
the possibility of reducing variable compensation at the discretion of the board of directors;
|
• |
the possibility of setting a limit on the exercise value of non-cash variable equity-based compensation; and
|
• |
as to severance compensation, the period of service of the office holder, the terms of his or her compensation during such service period, the company’s performance during that period of service, the person’s contribution towards
the company’s achievement of its goals and the maximization of its profits, and the circumstances under which the person is leaving the company.
|
• |
the link between variable compensation and long-term performance, which variable compensation shall, other than office holder who report to the CEO, be primarily based on measurable criteria;
|
• |
the relationship between variable and fixed compensation, and the ceiling for the value of variable compensation;
|
• |
the conditions under which an office holder would be required to repay compensation paid to him or her if it was later shown that the data upon which such compensation was based was inaccurate and was required to be restated in the
company’s financial statements;
|
• |
the minimum holding or vesting period for variable, equity-based compensation; and
|
• |
maximum limits for severance compensation.
|
• |
recommending whether a compensation policy should continue in effect, if the then-current policy has a term of greater than three years (approval of either a new compensation policy or the continuation of an existing compensation
policy must in any case occur every three years, other than following a company’s initial public offering, in which case such approval must occur within 5 years of the initial public offering);
|
• |
recommending to the board of directors periodic updates to the compensation policy and assessing implementation of the compensation policy;
|
• |
approving compensation terms of executive officers, directors and employees that require approval of the compensation committee;
|
• |
determining whether the compensation terms of a chief executive officer nominee, which were determined pursuant to the compensation policy, will be exempt from approval of the shareholders because such approval would harm the
ability to engage with such nominee; and
|
• |
determining, subject to the approval of the board and under special circumstances, whether to override a determination of the company’s shareholders regarding certain compensation related issues.
|
• |
the responsibilities set forth in the compensation policy;
|
• |
reviewing and approving the granting of options and other incentive awards to the extent such authority is delegated by our board of directors; and
|
• |
reviewing, evaluating and making recommendations regarding the compensation and benefits for our non-employee directors.
|
• |
a person (or a relative of a person) who holds 5% or more of the company’s outstanding shares or voting rights;
|
• |
a person (or a relative of a person) who has the power to appoint a director or the general manager of the company (i.e., the chief executive officer);
|
• |
an office holder (including a director) of the company (or a relative thereof); or
|
• |
a member of the company’s independent accounting firm, or anyone on its behalf.
|
• |
information on the advisability of a given action brought for his or her approval or performed by virtue of his or her position; and
|
• |
all other important information pertaining to any such action.
|
• |
refrain from any conflict of interest between the performance of his or her duties to the company and his or her other duties or personal affairs;
|
• |
refrain from any activity that is competitive with the business of the company;
|
• |
refrain from exploiting any business opportunity of the company to receive a personal gain for himself or herself or others; and
|
• |
disclose to the company any information or documents relating to the company’s affairs which the office holder received as a result of his or her position as an office holder.
|
• |
a transaction other than in the ordinary course of business;
|
• |
a transaction that is not on market terms; or
|
• |
a transaction that may have a material impact on a company’s profitability, assets or liabilities.
|
• |
at least a majority of the shares held by all shareholders who do not have a personal interest in the transaction and who are present and voting at the meeting approves the transaction, excluding abstentions; or
|
• |
the shares voted against the transaction by shareholders who have no personal interest in the transaction and who are present and voting at the meeting do not exceed 2% of the voting rights in the company.
|
• |
an amendment to the company’s articles of association;
|
• |
an increase of the company’s authorized share capital;
|
• |
a merger; or
|
• |
the approval of related party transactions and acts of office holders that require shareholder approval.
|
• |
financial liability imposed on him or her in favor of another person pursuant to a judgment, including a settlement or arbitrator’s award approved by a court. However, if an undertaking to indemnify an office holder with respect to
such liability is provided in advance, then such an undertaking must be limited to events which, in the opinion of the board of directors, can be foreseen based on the company’s activities when the undertaking to indemnify is given,
and to an amount or according to criteria determined by the board of directors as reasonable under the circumstances, and such undertaking shall detail the abovementioned foreseen events and amount or criteria;
|
• |
reasonable litigation expenses, including attorneys’ fees, incurred by the office holder (1) as a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation or
proceeding, provided that (i) no indictment was filed against such office holder as a result of such investigation or proceeding, and (ii) no financial liability was imposed upon him or her as a substitute for the criminal proceeding
as a result of such investigation or proceeding or, if such financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent; and (2) in connection with a monetary sanction; and
|
• |
reasonable litigation expenses, including attorneys’ fees, incurred by the office holder or imposed by a court in proceedings instituted against him or her by the company, on its behalf, or by a third party, or in connection with
criminal proceedings in which the office holder was acquitted, or as a result of a conviction for an offense that does not require proof of criminal intent.
|
• |
a breach of the duty of loyalty to the company, provided that the office holder acted in good faith and had a reasonable basis to believe that the act would not harm the company;
|
• |
a breach of duty of care to the company or to a third party, to the extent such a breach arises out of the negligent conduct of the office holder; and
|
• |
a financial liability imposed on the office holder in favor of a third party.
|
• |
a breach of the duty of loyalty, except for indemnification and insurance for a breach of the duty of loyalty to the company to the extent that the office holder acted in good faith and had a reasonable basis to believe that the
act would not harm the company;
|
• |
a breach of duty of care committed intentionally or recklessly, excluding a breach arising out of the negligent conduct of the office holder;
|
• |
an act or omission committed with intent to derive illegal personal benefit; or
|
• |
a fine or forfeit levied against the office holder.
|
D. |
Employees
|
E. |
Share Ownership
|
A. |
Major Shareholders
|
• |
each person or entity known by us to own beneficially more than 5% of our outstanding shares;
|
• |
each of our directors and executive officers individually; and
|
• |
all of our executive officers and directors as a group.
|
Name of Beneficial Owner
|
Number of Shares Beneficially Held
|
Percentage of Class
|
||||||
Directors and Executive Officers
|
||||||||
Stephen T. Wills
|
*
|
*
|
||||||
Ofer Gonen
|
*
|
*
|
||||||
Assaf Segal
|
*
|
*
|
||||||
Vickie R. Driver
|
*
|
*
|
||||||
Nissim Mashiach
|
*
|
*
|
||||||
Sharon Kochan
|
*
|
*
|
||||||
Sharon Malka
|
318,772
|
1.2
|
%
|
|||||
Boaz Gur-Lavie
|
*
|
*
|
||||||
Lior Rosenberg(1)
|
1,958,238
|
7.2
|
%
|
|||||
Ety Klinger
|
*
|
*
|
||||||
Yaron Meyer
|
*
|
*
|
||||||
All executive officers and directors as a group (11 persons)( 2)
|
2,536,468
|
9.3
|
%
|
|||||
Principal Shareholders (who are not Directors or Executive Officers)
|
||||||||
Clal Biotechnology Industries Ltd.(3)
|
9,429,555
|
34.7
|
%
|
|||||
Wellington Management Group LLP(4)
|
2,810,517
|
10.34
|
%
|
|||||
Migdal Insurance & Financial Holdings Ltd.(5)
|
2,126,058
|
8.07
|
%
|
* |
Less than 1%.
|
(1) |
As reported on a Schedule 13G/A filed on February 5, 2020, shares beneficially owned consist of: (i) 142,033 ordinary shares held directly by Prof. Rosenberg; (ii) 106,000 ordinary shares issuable upon exercise of outstanding
options held directly by Prof. Rosenberg that are currently exercisable or exercisable within 60 days of December 31, 2019; and (iii) 1,710,205 ordinary shares held by L.R. Research and Development Ltd. in trust for the benefit of
Prof. Rosenberg. Prof. Rosenberg is the sole shareholder of L.R. Research and Development Ltd.
|
(2) |
Shares beneficially owned consist of 1,881,029 ordinary shares held directly or indirectly by such executive officers and directors and 655,439 ordinary shares issuable upon exercise of outstanding options that are currently
exercisable or exercisable within 60 days of February 15, 2019.
|
(3) |
As reported on a Schedule 13G/A filed on February 12, 2019, shares beneficially owned consist of: (i) 8,208,973 ordinary shares held by Clal Life Sciences, LP, whose managing partner is Clal Application Center Ltd., a wholly-owned
subsidiary of CBI; and (ii) 1,220,582 ordinary shares held by CBI. As reported on a Schedule 13G/A filed on February 14, 2019 by Access Industries Holdings LLC, Access Industries Holdings LLC indirectly owns 100% of the outstanding
shares of Clal Industries Ltd., which owns 47.17% of the outstanding shares of CBI. The address of Clal Industries Ltd. is the Triangular Tower, 3 Azrieli Center, Tel Aviv 67023, Israel and the address of Access Industries Holdings
LLC is c/o Access Industries Inc., 40 West 57th Street, New York, New York 10019, United States.
|
(4) |
As reported on a Schedule 13G/A filed on January 28, 2020, shares beneficially owned consist of 2,810,517 ordinary shares owned of record by clients of one or more investment advisers directly or indirectly owned by Wellington
Management Group LLP. As reported on the Schedule 13G/A, of the 2,810,517 shares beneficially owned, Wellington Management Group LLP has shared voting power with respect to 2,654,252 ordinary shares and shared dispositive power with
respect to all 2,810,517 ordinary shares; Wellington Group Holdings LLP has shared voting power with respect to 2,654,252 ordinary shares and shared dispositive power with respect to all 2,810,517 ordinary shares; Wellington
Investment Advisors Holdings LLP has shared voting power with respect to 2,654,252 ordinary shares and shared dispositive power with respect to all 2,810,517 ordinary shares; and Wellington Management Company LLP has shared voting
power with respect to 2,654,252 ordinary shares and shared dispositive power with respect to 2,674,328 ordinary shares. The address of Wellington Management Group is c/o Wellington Management Company LLP, 280 Congress Street, Boston,
MA 02210.
|
(5) |
As reported on a Schedule 13G/A filed on February 6, 2020, shares beneficially owned consist of: (i) 1,909,112 ordinary shares held for members of the public through, among others, provident funds, mutual funds, pension funds and
insurance policies, which are managed by direct and indirect subsidiaries of Migdal Insurance & Financial Holdings Ltd (“Migdal”), and (ii) 216,946 ordinary shares are beneficially held for their own account (Nostro account).
Migdal is a widely held public company listed on the Tel Aviv Stock Exchange. The address of Migdal is 4 Efal Street, Petah Tikva 49512, Israel.
|
B. |
Related Party Transactions
|
C. |
Interests of Experts and Counsel
|
A. |
Consolidated Statements and Other Financial Information
|
B. |
Significant Changes
|
A. |
Listing Details
|
B. |
Plan of Distribution
|
C. |
Markets
|
D. |
Selling Shareholders
|
E. |
Dilution
|
F. |
Expenses of the Issue
|
Item 10. |
ADDITIONAL INFORMATION
|
A. |
Share Capital
|
B. |
Articles of Association
|
C. |
Material Contracts
|
D. |
Exchange Controls
|
E. |
Taxation
|
• |
banks, financial institutions or insurance companies;
|
• |
real estate investment trusts, regulated investment companies or grantor trusts;
|
• |
dealers or traders in securities, commodities or currencies;
|
• |
tax‑exempt entities or organizations, including an “individual retirement account” or “Roth IRA” as defined in Section 408 or 408A of the Code, respectively;
|
• |
certain former citizens or long‑term residents of the United States;
|
• |
persons that received our shares as compensation for the performance of services;
|
• |
persons that holds our shares as part of a “hedging,” “integrated” or “conversion” transaction or as a position in a “straddle” for U.S. federal income tax purposes;
|
• |
partnerships (including entities classified as partnerships for U.S. federal income tax purposes) or other pass‑through entities, or holders that will hold our shares through such an entity;
|
• |
S corporations;
|
• |
holders that acquired ordinary shares as a result of holding or owning our preferred shares;
|
• |
U.S. Holders (as defined below) whose “functional currency” is not the U.S. dollar;
|
• |
persons subject to special tax accounting rules as a result of any item of gross income with respect to the shares being taken into account in an applicable financial statement;
|
• |
persons that are residents of ordinarily resident in or have a permanent establishment in a jurisdiction outside the United States; or
|
• |
holders that own directly, indirectly or through attribution 10.0% or more of the voting power or value of our shares.
|
• |
a citizen or individual resident of the United States;
|
• |
a corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States, any state thereof, or the District of Columbia;
|
• |
an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or
|
• |
a trust that (1) is subject to the primary supervision of a U.S. Court and one or more U.S. persons that have the authority to control all substantial decisions of the trust or (2) has a valid election in effect under applicable
Treasury regulations to be treated as a U.S. person.
|
• |
such gain is effectively connected with your conduct of a trade or business in the United States (or, if required by an applicable income tax treaty, the gain is attributable to a permanent establishment or fixed base that such
holder maintains in the United States); or
|
• |
you are an individual and have been present in the United States for 183 days or more in the taxable year of such sale or exchange and certain other conditions are met.
|
• |
at least 75% of its gross income is “passive income”; or
|
• |
at least 50% of the average quarterly value of its total gross assets (which may be determined in part by the market value of our ordinary shares, which is subject to change) is attributable to assets that produce “passive income”
or are held for the production of passive income.
|
Change in
|
Exchange Rate
|
|||||||
Period
|
Shekel against the U.S. dollar
(%) |
Euro
against the U.S. dollar (%) |
||||||
2015
|
(0.3
|
)
|
(10.4
|
)
|
||||
2016
|
1.5
|
(3.4
|
)
|
|||||
2017
|
9.8
|
13.9
|
||||||
2018
|
(8.1
|
)
|
(4.4
|
)
|
||||
2019
|
7.8
|
(2.0
|
)
|
2018
|
2019
|
|||||||
Audit Fees
|
$
|
160,000
|
$
|
240,000
|
||||
Audit‑Related Fees
|
—
|
35,000
|
||||||
Tax Fees
|
—
|
|||||||
Total
|
$
|
160,000
|
$
|
275,000
|
• |
Quorum. As permitted under the Israeli Companies Law pursuant to our articles of association, the quorum required for an ordinary meeting of shareholders will consist of at least two
shareholders present in person, by proxy or by other voting instrument in accordance with the Israeli Companies Law, who hold at least 25% of the voting power of our shares (and in an adjourned meeting, with some exceptions, at least
two shareholders), instead of 33 1/3% of the issued share capital required under the Nasdaq Stock Market rules.
|
• |
Nomination of directors. With the exception of external directors and directors elected by our board of directors due to vacancy, our directors are elected by an annual meeting of our
shareholders to hold office until the next annual meeting following one year from his or her election. The nominations for directors, which are presented to our shareholders by our board of directors, are generally made by the entire
board of directors itself, in accordance with the provisions of our articles of association and the Israeli Companies Law. Nominations need not be made by a nominating committee of our board of directors consisting solely of
independent directors or otherwise, as required under the Nasdaq Stock Market rules.
|
• |
Majority of independent directors. Under the Israeli Companies Law, we are only required to appoint at least two external directors, within the meaning of the Israeli Companies Law, to our
board of directors. Currently, four of our directors (of whom two are external directors, within the meaning of the Israeli Companies Law) qualify as independent directors under the rules of the U.S. federal securities laws and the
Nasdaq Stock Market rules. If at any time we no longer have a controlling shareholder, we will no longer be required to have external directors, provided that we comply with the majority Board independence requirements and the audit
and compensation committee composition requirements of the Nasdaq Stock Market.
|
Exhibit No.
|
Description
|
|
100
|
The following financial information from the Registrant’s Annual Report on Form 20‑F for the year ended December 31, 2019 formatted in XBRL (eXtensible Business Reporting Language): (i)
Consolidated Balance Sheets at December 31, 2018 and 2019; (ii) Consolidated Statements of Profit or Loss or Other Comprehensive Loss for the years ended December 31, 2017, 2018 and 2019; (iii) Consolidated Statements of Changes in Equity
(Deficiency) for the years ended December 31, 2017, 2018 and 2019; (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2018 and 2019; and (v) Notes to Consolidated Financial Statements, tagged as blocks of
text. Users of this data are advised, in accordance with Rule 406T of Regulation S‑T promulgated by the SEC, that this Interactive Data File is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11
or 12 of the Securities Act, is deemed not filed for purposes of Section 18 of the Exchange Act, and otherwise is not subject to liability under those sections.
|
† |
Confidential treatment previously requested and granted with respect to certain portions, which portions were omitted and filed separately with the Securities and Exchange Commission.
|
* |
Portions of this exhibit have been omitted in accordance with the rules of the Securities and Exchange Commission.
|
(1) |
Previously filed with the SEC on March 3, 2014 pursuant to the Registrant’s registration statement on Form F‑1 (File No. 333‑193856) and incorporated by reference herein.
|
(2) |
Previously filed with the SEC on February 10, 2014 pursuant to the Registrant’s registration statement on Form F‑1 (File No. 333‑193856) and incorporated by reference herein.
|
(3) |
Previously furnished to the SEC on August 14, 2019 as Appendix A to the Registrant’s proxy statement for its extraordinary general meeting of shareholders held on September 23, 2019, attached as Exhibit 99.1 to the Registrant’s
report of foreign private issuer on Form 6‑K (File No. 001‑36349) and incorporated by reference herein.
|
(4) |
Previously filed with the SEC on January 25, 2016 as Exhibit 4.13 to the Registrant’s annual report on Form 20‑F for the year ended December 31, 2015 (File No. 001‑36349) and incorporated by reference herein.
|
(5) |
Previously filed with the SEC on January 25, 2016 as Exhibit 4.14 to the Registrant’s annual report on Form 20‑F for the year ended December 31, 2015 (File No. 001‑36349) and incorporated by reference herein.
|
(6) |
Previously filed with the SEC on February 21, 2017 as Exhibit 4.15 to the Registrant’s annual report on Form 20‑F for the year ended December 31, 2016 (File No. 001‑36349) and incorporated by reference herein.
|
(7) |
Previously filed with the SEC on March 19, 2018 as Exhibit 4.16 to the Registrant’s annual report on Form 20‑F for the year ended December 31, 2017 (File No. 001‑36349) and incorporated by reference herein.
|
(8) |
Previously filed with the SEC on March 25, 2019 as Exhibit 4.17 to the Registrant’s annual report on Form 20‑F for the year ended December 31, 2018 (File No. 001‑36349) and incorporated by reference herein.
|
(9) |
Previously filed with the SEC on March 19, 2018 as Exhibit 4.17 to the Registrant’s annual report on Form 20‑F for the year ended December 31, 2017 (File No. 001‑36349) and incorporated by reference herein
|
(10) |
Previously filed with the SEC on March 25, 2019 as Exhibit 4.20 to the Registrant’s annual report on Form 20‑F for the year ended December 31, 2018 (File No. 001‑36349) and incorporated by reference herein.
|
(11) |
Previously filed with the SEC on March 25, 2019 as Exhibit 4.21 to the Registrant’s annual report on Form 20‑F for the year ended December 31, 2018 (File No.
001‑36349) and incorporated by reference herein
|
(12) |
Previously filed with the SEC by Vericel Corporation on August 6, 2019 as Exhibit 10.9 to its quarterly report on Form 10-Q for the quarter ended June 30, 2019 (File No. 001‑35280) and incorporated by reference herein.
|
(13) |
Previously filed with the SEC by Vericel Corporation on August 6, 2019 as Exhibit 10.10 to its quarterly report on Form 10-Q for the quarter ended June 30, 2019 (File No. 001‑35280) and incorporated by reference herein
|
(14) |
Previously filed with the SEC on February 10, 2014 pursuant to the Registrant’s registration statement on Form F‑1 (File No. 333‑193856) and incorporated by reference herein.
|
MediWound Ltd.
|
||
Date: February 25, 2020
|
By: /s/ Sharon Malka
|
|
Sharon Malka
|
||
Chief Executive Officer
|
Page
|
|
Kost Forer Gabbay & Kasierer
144 Menachem Begin Rd.
Tel-Aviv 6492102, Israel
|
Tel: +972-3-6232525
Fax: +972-3-5622555
ey.com
|
Kost Forer Gabbay & Kasierer
144 Menachem Begin Rd.
Tel-Aviv 6492102, Israel
|
Tel: +972-3-6232525
Fax: +972-3-5622555
ey.com
|
December 31,
|
||||||||||||
Note
|
2018
|
2019
|
||||||||||
CURRENT ASSETS:
|
||||||||||||
Cash and cash equivalents
|
4
|
6,716
|
7,242
|
|||||||||
Restricted deposits
|
5
|
89
|
180
|
|||||||||
Short-term bank deposits
|
5
|
16,828
|
22,036
|
|||||||||
Trade receivables
|
6
|
560
|
4,107
|
|||||||||
Inventories
|
7
|
1,680
|
1,613
|
|||||||||
Other receivables
|
8, 24
|
6,840
|
444
|
|||||||||
32,713
|
35,622
|
|||||||||||
LONG-TERM ASSETS:
|
||||||||||||
Long term deposits and prepaid expenses
|
48
|
6
|
||||||||||
Property, plant and equipment, net
|
9
|
2,020
|
2,304
|
|||||||||
Right of-use assets, net
|
10
|
-
|
2,229
|
|||||||||
Intangible assets, net
|
11
|
495
|
429
|
|||||||||
2,563
|
4,968
|
|||||||||||
35,276
|
40,590
|
|||||||||||
CURRENT LIABILITIES:
|
||||||||||||
Current maturities of long-term liabilities and leases
|
146
|
569
|
||||||||||
Trade payables and accrued expenses
|
2,715
|
4,067
|
||||||||||
Other payables
|
12, 24
|
2,036
|
5,737
|
|||||||||
4,897
|
10,373
|
|||||||||||
LONG‑TERM LIABILITIES:
|
||||||||||||
Deferred revenues
|
1,158
|
1,135
|
||||||||||
Liabilities in respect of IIA grants
|
13, 16b
|
|
7,568
|
6,811
|
||||||||
Contingent consideration for purchase of shares
|
16c
|
|
6,330
|
4,853
|
||||||||
Liability in respect of discontinued operation
|
21
|
6,003
|
-
|
|||||||||
Lease liabilities
|
10
|
-
|
2,006
|
|||||||||
Severance pay liability, net
|
15
|
348
|
243
|
|||||||||
21,407
|
15,048
|
|||||||||||
SHAREHOLDERS' EQUITY:
|
18
|
|||||||||||
Ordinary shares of NIS 0.01 par value:
|
||||||||||||
Authorized: 50,000,000 shares as of December 31, 2019 and 37,244,508 December 31, 2018; Issued and Outstanding 27,202,795 shares as of December 31, 2019 and
27,178,839 shares as of December 31, 2018
|
75
|
75
|
||||||||||
Share premium
|
139,637
|
140,871
|
||||||||||
Foreign currency translation adjustments
|
(25
|
)
|
(17
|
)
|
||||||||
Accumulated deficit
|
(130,715
|
)
|
(125,760
|
)
|
||||||||
8,972
|
15,169
|
|||||||||||
35,276
|
40,590
|
Year ended
December 31,
|
||||||||||||||||
Note
|
2017
|
2018
|
2019
|
|||||||||||||
Revenues from sale of products
|
2,378
|
3,225
|
3,393
|
|||||||||||||
Revenues from development services
|
-
|
-
|
10,678
|
|||||||||||||
Revenues from license agreements
|
118
|
176
|
17,718
|
|||||||||||||
Total revenues
|
22a
|
|
2,496
|
3,401
|
31,789
|
|||||||||||
Cost of revenues
|
22b
|
|
(1,578
|
)
|
(2,088
|
)
|
(11,849
|
)
|
||||||||
Gross profit
|
918
|
1,313
|
19 ,940
|
|||||||||||||
Operating expenses:
|
||||||||||||||||
Research and development, gross
|
14,625
|
17,915
|
10,070
|
|||||||||||||
Participations by BARDA and IIA
|
(9,163
|
)
|
(13,843
|
)
|
(5,101
|
)
|
||||||||||
Research and development, net of participations
|
22c
|
|
5,462
|
4,072
|
4,969
|
|||||||||||
Selling and marketing
|
22d
|
|
5,362
|
4,188
|
4,064
|
|||||||||||
General and administrative
|
22e
|
|
3,781
|
3,799
|
5,242
|
|||||||||||
Other income from settlement agreement
|
16b
|
|
-
|
(7,537
|
)
|
-
|
||||||||||
Other expenses
|
22f
|
|
-
|
751
|
1,172
|
|||||||||||
Total operating expenses
|
14,605
|
5,273
|
15,447
|
|||||||||||||
Operating profit (loss)
|
(13,687
|
)
|
(3,960
|
)
|
4,493
|
|||||||||||
Financial income
|
22g
|
|
406
|
412
|
556
|
|||||||||||
Financial expense
|
22g
|
|
(1,252
|
)
|
(2,117
|
)
|
(2,983
|
)
|
||||||||
Profit (loss) from continuing operations
|
(14,533
|
)
|
(5,665
|
)
|
2,066
|
|||||||||||
Profit (loss) from discontinued operation
|
16c, 21
|
(7,616
|
)
|
4,608
|
2,889
|
|||||||||||
Net profit (loss)
|
(22,149
|
)
|
(1,057
|
)
|
4,955
|
|||||||||||
Other comprehensive income (loss):
|
||||||||||||||||
Foreign currency translation adjustments
|
(29
|
)
|
13
|
8
|
||||||||||||
Total comprehensive income (loss)
|
(22,178
|
)
|
(1,044
|
)
|
4,963
|
|||||||||||
Basic and diluted net profit (loss) per share:
|
23
|
|||||||||||||||
Basic and diluted net loss per share from continuing operations
|
(0.62
|
)
|
(0.21
|
)
|
0.08
|
|||||||||||
Basic and diluted net profit (loss) per share from discontinued operations
|
(0.33
|
)
|
0.17
|
0.10
|
||||||||||||
Total Basic and diluted net profit (loss) per share
|
(0.95
|
)
|
(0.04
|
)
|
0.18
|
Share
capital
|
Share
premium
|
Foreign currency translation reserve
|
Accumulated
deficit
|
Total
Equity
|
||||||||||||||||
Balance as of January 1, 2017
|
60
|
114,979
|
(9
|
)
|
(107,260
|
)
|
7,770
|
|||||||||||||
Loss for the period
|
-
|
-
|
-
|
(22,149
|
)
|
(22,149
|
)
|
|||||||||||||
Other comprehensive loss
|
-
|
-
|
(29
|
)
|
-
|
(29
|
)
|
|||||||||||||
Total comprehensive loss
|
-
|
-
|
(29
|
)
|
(22,149
|
)
|
(22,178
|
)
|
||||||||||||
Exercise of options
|
(*
|
)
|
7
|
-
|
-
|
7
|
||||||||||||||
Issuance of ordinary shares, net of issuance expenses
|
15
|
22,643
|
-
|
-
|
22,658
|
|||||||||||||||
Share-based compensation
|
-
|
1,363
|
-
|
-
|
1,363
|
|||||||||||||||
Balance as of December 31, 2017
|
75
|
138,992
|
(38
|
)
|
(129,409
|
)
|
9,620
|
|||||||||||||
Cumulative effect adjustment on accumulated deficit as a result of adopting IFRS 15
|
-
|
-
|
-
|
(249
|
)
|
(249
|
)
|
|||||||||||||
Balance as of January 1, 2018
|
75
|
138,992
|
(38
|
)
|
(129,658
|
)
|
9,371
|
|||||||||||||
Loss for the period
|
-
|
-
|
-
|
(1,057
|
)
|
(1,057
|
)
|
|||||||||||||
Other comprehensive income
|
-
|
-
|
13
|
-
|
13
|
|||||||||||||||
Total comprehensive (loss) income
|
-
|
-
|
13
|
(1,057
|
)
|
(1,044
|
)
|
|||||||||||||
Exercise of options
|
(*
|
)
|
(*
|
)
|
-
|
-
|
(*
|
)
|
||||||||||||
Share-based compensation
|
-
|
645
|
-
|
-
|
645
|
|||||||||||||||
Balance as of December 31, 2018
|
75
|
139,637
|
(25
|
)
|
(130,715
|
)
|
8,972
|
|||||||||||||
Profit for the period
|
-
|
-
|
-
|
4,955
|
4,955
|
|||||||||||||||
Other comprehensive income
|
-
|
-
|
8
|
-
|
8
|
|||||||||||||||
Total comprehensive income
|
-
|
-
|
8
|
4,955
|
4,963
|
|||||||||||||||
Exercise of options
|
(*
|
)
|
-
|
-
|
-
|
(*
|
)
|
|||||||||||||
Share-based compensation
|
-
|
1,234
|
-
|
-
|
1,234
|
|||||||||||||||
Balance as of December 31, 2019
|
75
|
140,871
|
(17
|
)
|
(125,760
|
)
|
15,169
|
Year ended
December 31,
|
||||||||||||
2017
|
2018
|
2019
|
||||||||||
Cash Flows from operating activities:
|
||||||||||||
Net Profit (loss)
|
(22,149
|
)
|
(1,057
|
)
|
4,955
|
|||||||
Adjustments to reconcile net loss to net cash provided by (used in) continuing operating activities:
|
||||||||||||
Adjustments to profit and loss items:
|
||||||||||||
Loss (profit) from discontinued operation
|
7,616
|
(4,608
|
)
|
(2,889
|
)
|
|||||||
Depreciation and amortization
|
567
|
577
|
1,149
|
|||||||||
Share-based compensation
|
1,363
|
645
|
1,234
|
|||||||||
Revaluation of liabilities in respect of IIA grants
|
229
|
287
|
(392
|
)
|
||||||||
Revaluation of contingent consideration for purchase of shares
|
351
|
758
|
1,690
|
|||||||||
Other income from settlement agreement
|
-
|
(7,537
|
)
|
-
|
||||||||
Revaluation of lease liabilities
|
-
|
-
|
340
|
|||||||||
Increase (decrease) in severance pay liability, net
|
111
|
19
|
(105
|
)
|
||||||||
Net financing income
|
(349
|
)
|
(412
|
)
|
(434
|
)
|
||||||
Un-realized foreign currency (gain) loss
|
(185
|
)
|
182
|
(152
|
)
|
|||||||
9,703
|
(10,089
|
)
|
441
|
|||||||||
Changes in asset and liability items:
|
||||||||||||
Decrease (increase) in trade receivables
|
28
|
(211
|
)
|
(3,553
|
)
|
|||||||
Decrease (increase) in inventories
|
(1,042
|
)
|
206
|
67
|
||||||||
Decrease (increase) in other receivables
|
(1,227
|
)
|
(306
|
)
|
6,376
|
|||||||
Increase (decrease) in trade payables and accrued expenses
|
(135
|
)
|
(536
|
)
|
1,355
|
|||||||
Increase (decrease) in other payables and deferred revenues
|
(70
|
)
|
(161
|
)
|
247
|
|||||||
(2,446
|
)
|
(1,008
|
)
|
4,492
|
||||||||
Net cash provided by (used in) continuing operating activities
|
(14,892
|
)
|
(12,154
|
)
|
9,888
|
|||||||
Net cash used in discontinued operating activities
|
(1,563
|
)
|
-
|
(1,599
|
)
|
|||||||
Net cash provided by (used in) operating activities
|
(16,455
|
)
|
(12,154
|
)
|
8,289
|
Year ended
December 31,
|
||||||||||||
2017
|
2018
|
2019
|
||||||||||
Cash Flows from Investing Activities:
|
||||||||||||
Purchase of property and equipment
|
(1,045
|
)
|
(522
|
)
|
(792
|
)
|
||||||
Purchase of intangible assets
|
(30
|
)
|
(12
|
)
|
-
|
|||||||
Interest received
|
349
|
106
|
184
|
|||||||||
Proceeds from (investments in) short term bank deposits, net
|
1,163
|
(16,612
|
)
|
(5,050
|
)
|
|||||||
Net cash provided by (used in) continuing investing activities
|
437
|
(17,040
|
)
|
(5,658
|
)
|
|||||||
Net cash used in discontinued investing activities
|
-
|
-
|
(1,239
|
)
|
||||||||
Net cash provided by (used in) investing activities
|
437
|
(17,040
|
)
|
(6,897
|
)
|
|||||||
Cash Flows from Financing Activities:
|
||||||||||||
Repayment of leases liabilities
|
-
|
-
|
(630
|
)
|
||||||||
Proceeds from exercise of options
|
7
|
(*
|
)
|
-
|
||||||||
Proceeds from issuance of shares, net
|
22,658
|
-
|
(*
|
)
|
||||||||
Proceeds from (repayment of) IIA grants, net
|
330
|
46
|
(376
|
)
|
||||||||
Net cash provided by (used in) continuing financing activities
|
22,995
|
46
|
(1,006
|
)
|
||||||||
Exchange rate differences on cash and cash equivalent balances
|
226
|
(205
|
)
|
140
|
||||||||
Increase (decrease) in cash and cash equivalents from continuing activities
|
8,766
|
(29,353
|
)
|
3,364
|
||||||||
Decrease in cash and cash equivalents from discontinued activities
|
(1,563
|
)
|
-
|
(2,838
|
)
|
|||||||
Balance of cash and cash equivalents at the beginning of the year
|
28,866
|
36,069
|
6,716
|
|||||||||
Balance of cash and cash equivalents at the end of the year
|
36,069
|
6,716
|
7,242
|
NOTE 1: |
GENERAL
|
a. |
General description of the Company and its operations:
MediWound Ltd. (the "Company" or "MediWound"), is a fully integrated biopharmaceutical company focused on developing, manufacturing and commercializing novel products to address unmet medical
needs in the fields of severe burns, chronic and other hard to heal wounds, connective tissue disorders and other indications.
The Company's first innovative biopharmaceutical product, NexoBrid, received marketing authorization from the European Medicines Agency ("EMA") as well as the Israeli, Argentinean, South-Korean, Russian and Peruvian
Ministries of Health, for removal of dead or damaged tissue, known as eschar, in adults with deep partial and full thickness thermal burns. The Company sells NexoBrid in Europe and in Israel through its commercial
organizations and in other territories through local distributers.The Company second investigational innovative product, EscharEx, is a topical biological drug being developed for debridement of chronic and other
hard-to-heal wounds.
|
b. |
The Company's securities are listed for trading on NASDAQ since March 2014.
|
c. |
The Company has two wholly owned subsidiaries: MediWound Germany GmbH, acting as Europe (“EU”) marketing authorization holder and EU sales and marketing arm and MediWound UK Limited, an inactive company. In addition, the
Company owns approximately 10% of PolyHeal Ltd., a private life sciences company ("PolyHeal").
|
d. |
The Company awarded two contracts with the U.S. Biomedical Advanced Research and Development Authority ("BARDA"), for the advancement of the development and manufacturing, as well as the procurement of NexoBrid, as a
medical countermeasure as part of BARDA preparedness for mass casualty events (see also Note 17a)
|
e. |
On May 6, 2019, the Company entered into exclusive license and supply agreements with Vericel Corporation (“Vericel”) to commercialize NexoBrid in North America (see also Note 17b).
|
a. |
Basis of presentation of financial statements:
|
b. |
Consolidated financial statements include the financial statements of companies that the Company controls (subsidiaries). Control is achieved when the Company is exposed, or has rights, to variable returns from its investment
with the investee and has the ability to affect those returns through its power over the investee.
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
c. |
Functional currency, reporting currency and foreign currency:
|
1. |
Functional currency and reporting currency:
|
2. |
Transactions, assets and liabilities in foreign currency:
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
d. |
Cash equivalents:
|
e. |
Short-term bank deposits:
|
f. |
Inventories:
|
Raw materials
|
-
|
At cost of purchase using the first-in, first-out method.
|
Finished goods
|
-
|
On the basis of average standard costs (which approximates actual cost on a weighted average basis) including materials, labor and other direct and indirect manufacturing costs
based on practical capacity.
|
g. |
Liability in respect of IIA:
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
h. |
Leases:
|
Years
|
||||
Motor vehicles
|
3
|
|||
Buildings and equipment
|
5-8
|
• |
Variable lease payments that depend on an index:
On the commencement date, the Company uses the index rate prevailing on the commencement date to calculate the future lease payments.
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
• |
Lease extension and termination options:
|
• |
Lease modifications:
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
i. |
Property, plant and equipment, net:
|
%
|
||
Office furniture
|
6 - 15
|
|
Manufacturing machinery and lab equipment
|
7 - 15
|
|
Computers
|
33
|
|
Leasehold improvements
|
See below
|
j. |
Intangible assets, net:
|
k. |
Revenues recognition:
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
- |
The contracts are negotiated as a package with a single commercial objective.
|
- |
The amount of consideration to be paid in one contract depends on the consideration or performance of another contract.
|
- |
The goods or services that the Company will provide according to the contracts represent a single performance obligation for the Company.
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
l. |
Research and development expenses:
|
m. |
Funding by BARDA:
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
n. |
Impairment of non-financial assets:
The Company evaluates the need to record an impairment of the carrying amount of non-financial assets whenever events or changes in circumstances indicate that the carrying amount is not
recoverable. If the carrying amount of non‑financial assets exceeds their recoverable amount, the assets are reduced to their recoverable amount. The recoverable amount of an asset that does not generate independent cash flows
is determined for the cash‑generating unit to which the asset belongs, and is calculated based on the projected cash flows that will be generated by the cash generating unit.
|
o. |
Financial instruments:
|
1. |
Financial assets:
|
- |
The Company's business model for managing financial assets; and
|
- |
The contractual cash flow terms of the financial asset.
|
Debt instruments are measured at amortized cost when:
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
2. |
Financial liabilities:
|
a) |
Financial liabilities measured at amortized cost:
|
b) |
Financial liabilities measured at fair value through profit or loss:
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
3. |
Fair value:
|
4. |
Classification of financial instruments by fair value hierarchy:
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest
level input that is significant to the fair value measurement as a whole:
|
Level 1
|
-
|
quoted prices (unadjusted) in active markets for identical assets or liabilities.
|
Level 2
|
-
|
inputs other than quoted prices included within level 1 that are observable either directly or indirectly.
|
Level 3
|
-
|
inputs that are not based on observable market data (valuation techniques which use inputs that are not based on observable market data).
|
5. |
Offsetting financial instruments:
|
6. |
De-recognition of financial instruments:
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
a) |
Financial assets:
A financial asset is derecognized when the contractual rights to the cash flows from the financial asset expire or the Company has transferred its contractual rights to receive cash flows from the
financial asset or assumes an obligation to pay the cash flows in full without material delay to a third party and has transferred substantially all the risks and rewards of the asset, or has neither transferred nor retained
substantially all the risks and rewards of the asset, but has transferred control of the asset.
|
b) |
Financial liabilities:
|
7. |
Contingent consideration for purchase of shares:
|
p. |
Provisions:
A provision in accordance with IAS 37 is recognized when the Company has a present (legal or constructive) obligation as a result of a past event, it is expected to require the use of economic
resources to clear the obligation and a reliable estimate has been made.
|
q. |
Short-term employee benefits and severance pay liability, net:
The Company has several employee benefit plans:
|
1. |
Short-term employee benefits:
Short-term employee benefits include salaries, paid annual leave, paid sick leave, recreation and social security contributions and are recognized as expenses as the services are rendered. A
liability in respect of a cash bonus is recognized when the Company has a legal or constructive obligation to make such payment as a result of past service rendered by an employee and a reliable estimate of the amount can be
made.
|
2. |
Post-employment benefits:
The Company has liabilities for severance pay for its employees in several of jurisdictions and in Israel.
Post-employment benefit plans in Israel are normally financed by contributions to insurance companies and classified as defined contribution plans or as defined benefit plans. The Company has
defined contribution plans for Israeli employees pursuant to the Severance Pay Law into which the Company pays fixed contributions and has no legal or constructive obligation to pay further contributions on account of
severance pay if the fund does not hold sufficient amounts to pay all employee benefits relating to employee service in current and prior periods.
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
The Company recognizes liability for severance pay due to its employees in EU in accordance with local laws.
|
r. |
Share-based compensation:
|
s. |
Discontinued operation:
|
t. |
Loss per share:
|
u. |
Reclassification
Certain amounts previously reported in the consolidated financial statements have been reclassified to conform to current year presentation. Such reclassifications did not affect net loss,
Changes in Stockholders' Equity or cash flows.
|
NOTE 3:- |
SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS USED IN THE PREPARATION OF THE FINANCIAL STATEMENTS
|
• |
Determining the fair value of share based compensation to employees and directors:
|
• |
Liabilities in respect to IIA grants:
|
• |
Contingent consideration for the purchase of shares:
|
NOTE 4:- |
CASH AND CASH EQUIVALENTS
|
Year ended
December 31,
|
||||||||
2018
|
2019
|
|||||||
USD cash for immediate withdrawal
|
5,336
|
5,766
|
||||||
Non-USD cash for immediate withdrawal
|
1,380
|
1,476
|
||||||
6,716
|
7,242
|
NOTE 5:- |
SHORT-TERM BANK DEPOSITS
|
Year ended
December 31,
|
||||||||
2018
|
2019
|
|||||||
USD bank deposits (1)
|
16,828
|
22,036
|
||||||
Restricted bank deposits (2)
|
89
|
180
|
||||||
16,917
|
22,216
|
(1) |
The USD deposits bear annual interest of 2.48%-3.10% for the period of 357-368 days for 2018.
|
(2) |
Restricted bank deposit which may be used only when certain conditions are met.
|
NOTE 6:- |
TRADE RECEIVABLES
|
Year ended
December 31,
|
||||||||
2018
|
2019
|
|||||||
BARDA (see also Note 17b)
|
-
|
3,267
|
||||||
Others receivables
|
560
|
840
|
||||||
560
|
4,107
|
Year ended
December 31,
|
||||||||
2018
|
2019
|
|||||||
Raw materials
|
432
|
709
|
||||||
Finished goods
|
1,248
|
904
|
||||||
1,680
|
1,613
|
NOTE 8:- |
OTHER RECEIVABLES
|
Year ended
December 31,
|
||||||||
2018
|
2019
|
|||||||
Government authorities
|
126
|
228
|
||||||
Prepaid expenses and other
|
132
|
216
|
||||||
BARDA (see also Note 17b)
|
2,524
|
-
|
||||||
Former shareholder ( see Note 16c)
|
4,000
|
-
|
||||||
Related parties
|
58
|
-
|
||||||
6,840
|
444
|
NOTE 9:- |
PROPERTY, PLANT AND EQUIPMENT, NET
|
Office
furniture
|
Manufacturing machinery and lab equipment
|
Computers
|
Leasehold
improvements
|
Total
|
||||||||||||||||
Cost
|
||||||||||||||||||||
Balance as of January 1, 2019
|
243
|
4,054
|
102
|
2,123
|
6,522
|
|||||||||||||||
Disposals
|
-
|
-
|
(38
|
)
|
-
|
(38
|
)
|
|||||||||||||
Additions
|
60
|
480
|
60
|
192
|
792
|
|||||||||||||||
Foreign currency translation
|
(2
|
)
|
-
|
-
|
-
|
(2
|
)
|
|||||||||||||
Balance as of December 31, 2019
|
301
|
4,534
|
124
|
2,315
|
7,274
|
|||||||||||||||
Accumulated Depreciation
|
||||||||||||||||||||
Balance as of January 1, 2019
|
161
|
2,153
|
70
|
2,118
|
4,502
|
|||||||||||||||
Disposals
|
-
|
-
|
(38
|
)
|
-
|
(38
|
)
|
|||||||||||||
Additions
|
16
|
453
|
28
|
11
|
508
|
|||||||||||||||
Foreign currency translation
|
(2
|
)
|
-
|
-
|
-
|
(2
|
)
|
|||||||||||||
Balance as of December 31, 2019
|
175
|
2,606
|
60
|
2,129
|
4,970
|
|||||||||||||||
Depreciated cost
|
||||||||||||||||||||
December 31, 2019
|
126
|
1,928
|
64
|
186
|
2,304
|
Office
furniture
|
Manufacturing machinery and lab equipment
|
Computers
|
Leasehold
improvements
|
Total
|
||||||||||||||||
Cost
|
||||||||||||||||||||
Balance as of January 1, 2018
|
248
|
3,561
|
139
|
2,120
|
6,068
|
|||||||||||||||
Disposals
|
(7
|
)
|
-
|
(55
|
)
|
-
|
(62
|
)
|
||||||||||||
Additions
|
7
|
493
|
19
|
3
|
522
|
|||||||||||||||
Foreign currency translation
|
(5
|
)
|
-
|
(1
|
)
|
-
|
(6
|
)
|
||||||||||||
Balance as of December 31, 2018
|
243
|
4,054
|
102
|
2,123
|
6,522
|
|||||||||||||||
Accumulated Depreciation
|
||||||||||||||||||||
Balance as of January 1, 2018
|
154
|
1,802
|
93
|
2,095
|
4,144
|
|||||||||||||||
Disposals
|
(7
|
)
|
-
|
(55
|
)
|
-
|
(62
|
)
|
||||||||||||
Additions
|
18
|
351
|
33
|
23
|
425
|
|||||||||||||||
Foreign currency translation
|
(4
|
)
|
-
|
(1
|
)
|
-
|
(5
|
)
|
||||||||||||
Balance as of December 31, 2018
|
161
|
2,153
|
70
|
2,118
|
4,502
|
|||||||||||||||
Depreciated cost
|
||||||||||||||||||||
December 31, 2018
|
82
|
1,901
|
32
|
5
|
2,020
|
NOTE 10:- |
LEASES
|
a. |
Lease Agreements:
The Company's offices and its production facility in Israel are located in a building that the Company leases from its Parent Company, in accordance with a sub-lease agreement. The Company
subleases approximately 3,000 square meters of laboratory, office and clean room space at a monthly rent fee of NIS 116,000 (approximately $33). This sub-lease agreement which was amended on January 1, 2019, expires in
October 2022 and provides with 3 years extantion period at the sole discretion of the Company.
The Company's subsidiary offices are located in Germany. The monthly rent fee is currently €3,500 (approximately $4) and the lease agreement expires on April 30, 2022.
In addition the Company and its subsidiary have operating lease agreements for 13 vehicles for a period of three years.
|
b. |
Lease extension and termination options:
The Company has leases that include extension and termination options. These options provide flexibility in managing the leased assets and align with the Company's
business needs.
The Company exercises significant judgement in deciding whether it is reasonably certain that the extension and termination options will be exercised.
In leases of motor vehicles, the Company does not include in the lease term the exercise of extension options since the Company does not ordinarily exercise options that
extend the lease period beyond 3 years.
|
c. |
Information on leases:
|
Year ended
December 31,
|
||||
2019
|
||||
Interest expense on lease liabilities
|
139
|
|||
Expenses relating to short-term leases
|
444
|
|||
Total cash outflow for leases
|
630
|
The Company was assisted by an external valuation expert in determining the appropriate interest rate for discounting its leases based on credit risk, the weighted
average term of the leases and other economic variables. A weighted average incremental borrowing in a range of 0.1% to 6.7% was used to discount future lease payments in the calculation of the lease liability on the date of
initial application of the Standard.
|
NOTE 10:- |
LEASES (Cont.)
|
d. |
Disclosures in respect of right-of-use assets:
|
Right-of-use assets
|
Buildings
|
Motor vehicles
|
Total
|
|||||||||
Cost:
|
||||||||||||
Balance as of January 1, 2019
|
-
|
46
|
46
|
|||||||||
Cumulative effect adjustment on accumulated deficit as a result of adopting IFRS 16
|
2,350
|
172
|
2,522
|
|||||||||
Additions during the year:
|
||||||||||||
New leases
|
-
|
209
|
209
|
|||||||||
Adjustments for indexation
|
27
|
-
|
27
|
|||||||||
Balance as of December 31, 2019
|
2,377
|
427
|
2,804
|
|||||||||
Accumulated depreciation:
|
||||||||||||
Balance as of January 1, 2019
|
-
|
-
|
-
|
|||||||||
Additions during the year:
|
||||||||||||
Depreciation and amortization
|
401
|
174
|
575
|
|||||||||
Balance as of December 31, 2019
|
401
|
174
|
575
|
|||||||||
Depreciated cost :
|
||||||||||||
Balance as of December 31, 2019
|
1,976
|
253
|
2,229
|
f. |
Disclosures in respect of lease liabilities:
|
Lease liabilities
|
Buildings
|
Motor vehicles
|
Total
|
|||||||||
Balance as of December 31, 2018
|
-
|
-
|
-
|
|||||||||
Cumulative effect adjustment on accumulated liabilities as a result of adopting IFRS 16
|
2,344
|
178
|
2,522
|
|||||||||
Repayment of leases liabilities
|
(458
|
)
|
(172
|
)
|
(630
|
)
|
||||||
Effect of changes in exchange rates
|
189
|
10
|
199
|
|||||||||
New finance lease obligation recognized
|
-
|
193
|
193
|
|||||||||
Adjustments for indexation
|
11
|
16
|
27
|
|||||||||
Interest
|
139
|
-
|
139
|
|||||||||
Balance as of December 31, 2019
|
2,225
|
225
|
2,450
|
|||||||||
Current maturities of long-term leases
|
(403
|
)
|
(41
|
)
|
(444
|
)
|
||||||
Lease liability Balance as of December 31, 2019
|
1,822
|
184
|
2,006
|
NOTE 10:- |
LEASES (Cont.)
|
NOTE 11:- |
INTANGIBLE ASSETS, NET
|
License and
Knowhow
|
||||||||
2018
|
2019
|
|||||||
Cost
|
||||||||
Balance as of January 1,
|
1,526
|
1,538
|
||||||
Additions
|
12
|
-
|
||||||
Balance as of December 31,
|
1,538
|
1,538
|
||||||
Accumulated Amortization
|
||||||||
Balance as of January 1,
|
891
|
1,043
|
||||||
Additions
|
152
|
66
|
||||||
Balance as of December 31,
|
1,043
|
1,109
|
||||||
Amortized cost
|
||||||||
Balance as of December 31,
|
495
|
429
|
NOTE 12:- |
OTHER PAYABLES
|
Year ended
December 31,
|
||||||||
2018
|
2019
|
|||||||
Liability in respect for purchase of shares (see Note 16c)
|
1,532
|
1,723
|
||||||
Former shareholder ( see Note 16b )
|
-
|
3,167
|
||||||
Related parties
|
227
|
214
|
||||||
Deferred Revenues
|
198
|
249
|
||||||
Other
|
79
|
384
|
||||||
2,036
|
5,737
|
NOTE 13:- |
LIABILITIES IN RESPECT OF IIA GRANTS
|
Year ended
December 31,
|
||||||||
2018
|
2019
|
|||||||
Balance as of January 1,
|
7,437
|
7,714
|
||||||
Grants received
|
93
|
248
|
||||||
Royalties
|
(103
|
)
|
(635
|
)
|
||||
Amounts carried to Profit or Loss
|
287
|
(392
|
)
|
|||||
Balance as of Decmber 31,
|
7,714
|
6,935
|
||||||
Current maturities
|
(146
|
)
|
(124
|
)
|
||||
Long term liabilities in respect of IIA grants
|
7,568
|
6,811
|
NOTE 14:- |
FINANCIAL INSTRUMENTS
|
a. |
Financial risk factors:
|
b. |
Fair value:
|
NOTE 14:- |
FINANCIAL INSTRUMENTS (Cont.)
|
c. |
Sensitivity tests relating to changes in market factors:
|
December 31,
|
||||||||||||
2017
|
2018
|
2019
|
||||||||||
Sensitivity test to changes in NIS and EURO exchange rates
|
||||||||||||
Gain (loss) from change:
|
||||||||||||
5% increase in exchange rate
|
$
|
346
|
$
|
31
|
$
|
285
|
||||||
5% decrease in exchange rate
|
$
|
(346
|
)
|
$
|
31
|
$
|
(285
|
)
|
NOTE 15:- |
SEVERANCE PAY LIABILTY, NET
|
NOTE 15:- |
SEVERANCE PAY LIABILTY, NET (Cont.)
|
NOTE 16:- |
CONTINGENT LIABILITIES AND COMMITMENTS
|
a. |
In 2000, the Company signed an exclusive license agreement (as amended in 2007) with a third party with regard to its patents and intellectual property. Pursuant to the agreement, the Company received an exclusive license
to use the third party's patents and intellectual property, for the purpose of developing, manufacturing, marketing, and commercializing products for treatment of burns and other wounds.
|
b. |
Under the Research and Development Law, (the "R&D Law") the Company undertook to pay royalties of 3% on the Revenues derived from sales of products or services developed in whole or in part using IIA grants. The
maximum aggregate royalties paid generally cannot exceed 100% of the grants received by the Company, plus annual interest generally equal to the 12-month LIBOR applicable to dollar deposits, as published on the first business
day of each calendar year. The royalty amount payable by the Company as of December 31, 2019 is approximately $ 13,570, which represents the total amount of grants actually received by the Company from the IIA including
accrued interest, net of royalties actually paid or accrued by the Company (see also Note 13).
|
c. |
Beginning in 2007, the Company entered into a number of agreements with Teva Pharmaceutical Industries Limited (“Teva”) related to collaboration in the development, manufacturing and commercialization of solutions for the
burn and chronic wound care markets. In consideration for these agreements, Teva made investments in the Company's ordinary shares and agreed to fund certain research and development expenses and manufacturing costs and
perform all marketing activities for both NexoBrid, under the 2007 Teva Agreement, and the PolyHeal Product, under the 2010 PolyHeal Agreements (see also Note 21a). As of December 31, 2012, all of these agreements were
terminated.
|
NOTE 16:- |
CONTINGENT LIABILITIES ( Cont.)
|
NOTE 17:- |
MATERIAL AGREEMENTS
|
a. |
The Company has awarded a contract with BARDA which was modified in July 2017 and again in May 2019, providing supplemental funds and support. The amended contract valued up to $153 million. The contract is for the
advancement of the development and manufacturing, as well as the procurement of NexoBrid as a medical countermeasure as part of BARDA preparedness for mass casualty events. The modified contract includes $77 million of funding
to support development activities to complete the FDA approval process for NexoBrid for use in thermal burn injuries, as well as procurement of NexoBrid.
|
NOTE 17:- |
MATERIAL AGREEMENTS (Cont.)
|
As of December 31, 2019, the Company has recorded $42,958 in funding, in the aggregate, from BARDA under the two contracts. The participation by BARDA comprises $31,955 which was
classified as reimbursement of research and development expenses. Starting in May 2019, following entrance into the Vericel license and supply agreements, participation by BARDA in the amount of $10,678 was classified
as Revenues from development services. In addition, clinical supply in the amount of $325 was recorded as Revenues from sales of products.
|
NOTE 18:- |
EQUITY
|
a. |
Share capital
|
Year ended December 31,
|
||||||||
2018
|
2019
|
|||||||
Authorized number of shares
|
37,244,508
|
50,000,000
|
||||||
Issued and outstanding number of shares
|
27,178,839
|
27,202,795
|
b. |
Rights attached to shares:
|
c. |
An ordinary share confers upon its holder(s) a right to vote at the general meeting, a right to participate in distribution of dividends, and a right to participate in the distribution of surplus assets upon liquidation of
the Company.
|
d. |
In March 2014, the Company completed its IPO, and its securities are listed for trading on NASDAQ.
|
e. |
In September 21, 2017, the Company completed a follow-on public offering.
|
f. |
Movement in share capital:
|
• |
During the year, the authorized number of shares was increased by 12,755,492 shares.
|
• |
On December 31, 2019, the company issued additional 23,956 ordinary shares upon vesting of outstanding RSU’s.
|
NOTE 19:- |
SHARE‑BASED COMPENSATION
|
a. |
Expense recognized in the financial statements:
|
Year ended
December 31,
|
||||||||||||
2017
|
2018
|
2019
|
||||||||||
Cost of Revenues
|
188
|
71
|
226
|
|||||||||
Research and development
|
488
|
181
|
375
|
|||||||||
Selling and marketing
|
204
|
63
|
40
|
|||||||||
General and administrative
|
483
|
330
|
593
|
|||||||||
Total share-based compensation
|
1,363
|
645
|
1,234
|
b. |
Share-based payment plan for employees and directors:
|
NOTE 19:- |
SHARE‑BASED COMPENSATION (Cont.)
|
c. |
Share options activity:
|
2017
|
2018
|
2019
|
||||||||||||||||||||||
Number of
options
|
Weighted
Average
Exercise price
|
Number of
options
|
Weighted
Average
Exercise price
|
Number of
options
|
Weighted
Average
Exercise price
|
|||||||||||||||||||
Outstanding Options at beginning of year
|
2,181,075
|
9.62
|
1,934,735
|
10.02
|
2,313,249
|
9.31
|
||||||||||||||||||
Option's Granted
|
40,000
|
6.72
|
665,000
|
5.12
|
95,000
|
4.45
|
||||||||||||||||||
Option's Exercised
|
(79,624
|
)
|
0.09
|
(208,332
|
)
|
2.63
|
-
|
-
|
||||||||||||||||
Option's Forfeited and/or expired
|
(206,716
|
)
|
8.93
|
(78,154
|
)
|
9.06
|
(73,817
|
)
|
5.17
|
|||||||||||||||
Outstanding options and at end of year
|
1,934,735
|
10.02
|
2,313,249
|
9.31
|
2,334,432
|
9.18
|
||||||||||||||||||
Option's Exercisable at end of year
|
1,562,235
|
10.25
|
1,475,451
|
11.23
|
1,753,803
|
4.76
|
Options and outstanding as of
December 31, 2019
|
||||||||||||
Range of exercise prices ($ )
|
Number of
options
|
Weighted
Average
Remaining
contractual
life
|
Weighted
average exercise
price
|
|||||||||
3.84 - 5.15
|
720,500
|
8.58
|
5.03
|
|||||||||
6.72 ‑ 9.82
|
795,032
|
4.86
|
9.05
|
|||||||||
12.89 ‑ 13.76
|
818,900
|
3.92
|
12.94
|
|||||||||
Total
|
2,334,432
|
5.68
|
9.18
|
NOTE 19:- |
SHARE‑BASED COMPENSATION (Cont.)
|
RSU's
2018
|
RSU's
2019
|
|||||||
Outstanding at beginning of year
|
-
|
95,833
|
||||||
Granted
|
95,833
|
36,667
|
||||||
Forfeited
|
-
|
-
|
||||||
Vested
|
-
|
(23,956
|
)
|
|||||
Outstanding at the end of the period
|
95,833
|
108,544
|
1. |
On June 22, 2017, the Company's Board of Directors approved the grant of 40,000 options to purchase ordinary shares under the Plan, for an exercise price of $ 6.72 per share to certain new Board members of the Company. The
fair value of the options granted, as of the grant date, was estimated at approximately $172.
|
2. |
On February 22, 2018, the general meeting of the Company approved to extend the exercise period of 208,332 options previously granted to CEO and in addition approved the grant of 40,000 options to purchase the Company's
ordinary shares, for an exercise price of $ 4.63 per share, to certain of its directors. The fair value of the extended options was estimated at approximately $98 and the new options granted, as of the grant date, was estimated
at approximately $76.
|
3. |
On June 27, 2018, a total of 208,332 options which were previously granted to the Company's former CEO were exercised into 131,102 ordinary shares using cashless exercise mechanism.
|
4. |
On December 31, 2018, the Company's Board of Directors approved the grant of 625,000 options to purchase ordinary shares, for an exercise price of $ 5.15 per share, and the grant of 95,833 RSU's to its employees. The fair
value of the options and RSU's granted, as of the grant date, was estimated at approximately $1,261 and $389, respectivaly.
|
5. |
On March 24, 2019, the Company granted to its incoming CEO and chairman of the board 60,000 options (40,000 and 20,000 respectively) to purchase ordinary shares, for an exercise price of $ 4.92 per share, and 30,000 RSU's
(20,000 and 10,000 respectively), under the "2014 Share Incentive Plan". The options are exercisable in accordance with the terms of the plan and will vest over three-four years. The fair value of the options and RSU's granted,
as of the grant date, was estimated at approximately $164 and $158, respectively.
|
NOTE 19:- |
SHARE‑BASED COMPENSATION (Cont.)
|
6. |
On June 6, 2019, the Company granted to its incoming CFO 40,000 options to purchase ordinary shares, for an exercise price of $ 3.84 per share, and 6,667 RSU's, under the "2014 Share Incentive Plan". The options are
exercisable in accordance with the terms of the plan and will vest over four years. The fair value of the options and RSU's granted, as of the grant date, was estimated at approximately $93 and $26, respectively.
|
d. |
The fair value of the Company's share options granted to employees and directors for the years ended December 31, 2017, 2018 and 2019 was estimated using the binomial option pricing models using the following assumptions:
|
December 31,
|
||||||||||||
2017
|
2018
|
2019
|
||||||||||
Dividend yield (%)
|
0
|
0
|
0
|
|||||||||
Expected volatility of the share prices (%)
|
63
|
44-54
|
41-53
|
|||||||||
Risk‑free interest rate (%)
|
1.22-2.15
|
1.63-2.69
|
1.85-2.45
|
|||||||||
Early exercise factor (%)
|
150
|
100-150
|
150
|
|||||||||
Weighted average share prices (Dollar)
|
7.80
|
4.07
|
4.83
|
NOTE 20:- |
TAXES ON INCOME
|
a. |
The Company operates in two main tax jurisdictions: Israel and Germany. As such, the Company is subject to the applicable tax rates in the jurisdictions in which it conducts its business.
|
b. |
Corporate tax rates in Israel:
|
• |
The Israeli corporate income tax rate was 23% in 2019 and 2018 and 24% in 2017.
|
• |
Tax benefits under the Israel Law for the Encouragement of Capital Investments, 1959 (the "Investment Law"):
|
NOTE 20:- |
TAXES ON INCOME (Cont.)
|
c. |
The principal tax rates applicable to the subsidiary whose place of incorporation is outside Israel are:
|
d. |
Final tax assessments:
|
e. |
Net operating carryforward losses for tax purposes and other temporary differences:
|
f. |
Deferred taxes:
|
g. |
Current taxes on income:
|
h. |
Theoretical tax:
|
NOTE 21:- |
DISCONTINUED OPERATION
|
a. |
In December 2010, the Company, Teva and PolyHeal, entered into a series of agreements to collaborate in the development, manufacturing and commercialization of PolyHeal's wound care product, or the PolyHeal Product (“2010
PolyHeal Agreement”). Under the 2010 PolyHeal Agreement, PolyHeal granted the Company an exclusive global license to manufacture, develop and commercialize all the Polyheal Products in consideration for royalty payments.
Concurrently, the Company granted Teva an exclusive global sub license to commercialize the Polyheal Products in consideration for certain royalties and milestone payments. In addition, Teva undertook to finance the Company's
future development of the Polyheal Product and all of its manufacturing costs. Under the 2010 PolyHeal Agreement, Teva initially invested $ 6,750 in the Company, and undertook to invest an additional $ 6,750 in the Company
subject to the achievement of a development milestone. Concurrent with Teva's investment in the Company, the Company purchased shares of PolyHeal for total consideration of $ 6,750. Additionally, the Company undertook to
purchase additional shares of PolyHeal for the same amount, subject to the achievement of the same abovementioned development milestone.
|
b. |
Following the termination of the Company's collaborations with Teva under the 2010 PolyHeal Agreement, the Company's exclusive license for the PolyHeal Product expired in September 2013. As a result of the expiration of the
PolyHeal license, the Company accounted for the operation related to PolyHeal as a discontinued operation in accordance with IFRS accounting standard 5, “Non-current Assets Held for Sale and Discontinued Operations" and the
Company has fully impaired the license for the PolyHeal Product.
|
c. |
On November 15, 2012, the Company informed Teva of the commencement of a feasibility study for the next generation of the PolyHeal Product, which constituted a milestone under the 2010 PolyHeal Agreement. In accordance with
the terms of the agreement, Upon achievement of this milestone, Teva was to invest an additional $ 6,750 in exchange of the Company's ordinary shares and the Company was to purchase, following and pending the consummation of
this investment, for an identical amount, ordinary shares of PolyHeal from its existing shareholders.
|
d. |
On September 15, 2014, a Statement of Claim was filed against the Company by some shareholders of Polyheal (the "Plaintiffs"). The Plaintiffs allege that the Company is
obligated to pay them a total amount of $1,475 in exchange for their respective portion of PolyHeal's shares, following the commencement of a feasibility study for the next generation of the PolyHeal Product in November 15,
2012, which constituted a milestone under a buyout option agreement between the Company, PolyHeal and its shareholders.
|
e. |
During December 2017, the Company paid the Plaintiffs approximately $1,497 in consideration for PolyHeal's shares and recorded a full provision of $6,003 which represents the purchase price for the residual number of shares
that the 2010 PolyHeal Agreements contemplate would be acquired by the Company from the shareholders of PolyHeal (the “Provision”).
|
NOTE 21:- |
DISCONTINUED OPERATION (Cont.)
|
f. |
On March 24, 2019, the Company entered into a settlement agreement and mutual general release with the Plaintiffs (the "Polyheal Settlement Agreement"), which settles any and all debts, obligations or liabilities that the
Plaintiffs and MediWound had, has or may have to the other party in connection with the agreements among MediWound, Teva, PolyHeal, the Plaintiffs and other shareholders of PolyHeal. Pursuant to the terms of Polyheal Settlement
Agreement, the Plaintiffs repaid to MediWound a portion of the amount that was ruled in their favor under the Tel Aviv District Court Ruling, and it resulted in the acceptance of the Company’s appeal that was filed on December,
2017, and the cancellation of the 2017 Ruling that was issued by the District Court against MediWound.
|
g. |
In September 2019, the Company entered a series of settlement agreements (the "New PolyHeal Settlement Agreements") with the majority of shareholders of Polyheal, including Clal Biotechnology Industries Ltd., its controlling
shareholder. The New PolyHeal Settlement Agreements settle any and all debts, obligations or liabilities that each party or any of its affiliates had or has to the other party or any of its affiliates, in connection with or
arising out of the series of 2010 PolyHeal Agreements.
|
h. |
Pursuant to the terms of New PolyHeal Settlement Agreements, the company paid an aggregate amount of approximately $2,800 and received 14,473 shares of PolyHeal, which was
classified as royalty rights arising from the Company’s ownership of shares of Polyheal.
|
NOTE 22:- |
SUPPLEMENTARY INFORMATION TO THE STATEMENTS OF COMPREHENSIVE PROFIT OR LOST
|
NOTE 22:- |
SUPPLEMENTARY INFORMATION TO THE STATEMENTS OF COMPREHENSIVE PROFIT OR LOST (Cont.)
|
Year ended December 31,
|
||||||||||||
2017
|
2018
|
2019
|
||||||||||
USA (see also Note 17a, 17b)
|
-
|
-
|
28,504
|
|||||||||
Others
|
2,496
|
3,401
|
3,285
|
|||||||||
2,496
|
3,401
|
31,789
|
b. |
Cost of Revenues::
|
1. |
Cost of Revenues from sale of products
|
Year ended
December 31,
|
||||||||||||
2017
|
2018
|
2019
|
||||||||||
Salary and benefits (including share-based compensation)
|
2,073
|
2,212
|
1,916
|
|||||||||
Subcontractors
|
121
|
72
|
89
|
|||||||||
Depreciation and amortization
|
457
|
474
|
512
|
|||||||||
Cost of materials
|
535
|
468
|
456
|
|||||||||
Other manufacturing expenses
|
989
|
783
|
657
|
|||||||||
Decrease (increase) in inventory of finished products
|
(999
|
)
|
299
|
344
|
||||||||
Allotment of manufacturing costs to R&D
|
(1,598
|
)
|
(2,220
|
)
|
(1,621
|
)
|
||||||
1,578
|
2,088
|
2,353
|
2. |
Cost of Revenues from development services
|
Year ended
December 31,
|
||||||||||||
2017
|
2018
|
2019
|
||||||||||
Salary and benefits
|
-
|
-
|
1,404
|
|||||||||
Subcontractors
|
-
|
-
|
7,412
|
|||||||||
-
|
-
|
8,816
|
3. |
Cost of Revenues from license agreements
|
Year ended
December 31,
|
||||||||||||
2017
|
2018
|
2019
|
||||||||||
Royalties payments
|
-
|
-
|
680
|
|||||||||
-
|
-
|
680
|
NOTE 22:- |
SUPPLEMENTARY INFORMATION TO THE STATEMENTS OF COMPREHENSIVE PROFIT OR LOST (Cont.)
|
c. |
Research and development expenses, net of participations:
|
Year ended
December 31,
|
||||||||||||
2017
|
2018
|
2019
|
||||||||||
Salary and benefits (including share-based compensation)
|
3,840
|
3,703
|
2,965
|
|||||||||
Subcontractors
|
8,780
|
11,423
|
4,694
|
|||||||||
Depreciation and amortization
|
42
|
51
|
342
|
|||||||||
Cost of materials
|
223
|
309
|
311
|
|||||||||
Allotment of manufacturing costs
|
1,598
|
2,220
|
1,621
|
|||||||||
Other research and development expenses
|
142
|
209
|
137
|
|||||||||
Research and development, gross
|
14,625
|
17,915
|
10,070
|
|||||||||
Participations:
|
||||||||||||
BARDA funds
|
(8,565
|
)
|
(13,238
|
)
|
(3,785
|
)
|
||||||
Revaluation of liabilities in respect of IIA grants
|
(598
|
)
|
(605
|
)
|
(1,316
|
)
|
||||||
5,462
|
4,072
|
4,969
|
d. |
Selling and marketing expenses:
|
Year ended
December 31,
|
||||||||||||
2017
|
2018
|
2019
|
||||||||||
Salary and benefits (including share based compensation)
|
3,062
|
2,343
|
2,028
|
|||||||||
Marketing and medical support
|
1,628
|
1,055
|
1,298
|
|||||||||
Depreciation and amortization
|
12
|
9
|
49
|
|||||||||
Shipping and delivery
|
236
|
192
|
200
|
|||||||||
Registration and marketing license fees
|
424
|
589
|
489
|
|||||||||
5,362
|
4,188
|
4,064
|
e. |
General and administrative expenses:
|
Year ended
December 31,
|
||||||||||||
2017
|
2018
|
2019
|
||||||||||
Salary and benefits (including share‑based compensation)
|
2,032
|
2,035
|
2,621
|
|||||||||
Professional fees
|
1,224
|
1,361
|
1,628
|
|||||||||
Depreciation and amortization
|
56
|
43
|
247
|
|||||||||
Other
|
469
|
360
|
746
|
|||||||||
3,781
|
3,799
|
5,242
|
NOTE 22:- |
SUPPLEMENTARY INFORMATION TO THE STATEMENTS OF COMPREHENSIVE PROFIT OR LOST (Cont.)
|
f. |
Other expenses:
The other one-time expenses amounted $751 and $1,172 for the years ended December 31, 2018 and 2019 respectivally, are associated with the review and assessment of the strategic deal.
|
g. |
Financial income and expense:
|
Year ended
December 31,
|
||||||||||||
2017
|
2018
|
2019
|
||||||||||
Financial income:
|
||||||||||||
Interest income
|
349
|
412
|
434
|
|||||||||
Exchange differences, net
|
57
|
-
|
122
|
|||||||||
406
|
412
|
556
|
||||||||||
Financial expense:
|
||||||||||||
Interest in respect of IIA grants
|
827
|
892
|
925
|
|||||||||
Revaluation of liabilities in respect of IFRS16
|
-
|
-
|
140
|
|||||||||
Revaluation of contingent consideration for the purchase of shares
|
351
|
758
|
1,690
|
|||||||||
Exchange differences, net
|
-
|
219
|
-
|
|||||||||
Finance expenses in respect of deferred Revenues
|
-
|
164
|
161
|
|||||||||
Other
|
74
|
84
|
67
|
|||||||||
1,252
|
2,117
|
2,983
|
NOTE 23:- |
NET PROFIT (LOSS) PER SHARE
|
a. |
Details of the number of shares and loss used in the computation of loss per share from continuing operations:
|
Year ended December 31,
|
||||||||||||||||||||||||
2017
|
2018
|
2019
|
||||||||||||||||||||||
Weighted
average
number of shares
|
Loss
|
Weighted
average
number of shares
|
Loss
|
Weighted
average
number of shares
|
Profit
|
|||||||||||||||||||
Basic and diluted profit (loss)
|
23,341,040
|
(14,533
|
)
|
27,113,617
|
(5,665
|
)
|
27,178,839
|
2,066
|
b. |
Details of the number of shares and profit (loss) used in the computation of profit or (loss) per share from discontinued operation:
|
Year ended December 31,
|
||||||||||||||||||||||||
2017
|
2018
|
2019
|
||||||||||||||||||||||
Weighted
average
number of shares
|
Loss
|
Weighted
average
number of shares
|
Loss
|
Weighted
average
number of shares
|
Profit
|
|||||||||||||||||||
Basic and diluted profit (loss)
|
23,341,040
|
(7,616
|
)
|
27,113,617
|
4,608
|
27,178,839
|
2,889
|
NOTE 23:- |
NET PROFIT (LOSS) PER SHARE (Cont.)
|
c. |
Net profit (loss) per share from continuing and discontinued operations:
|
Year ended
December 31,
|
||||||||||||
2017
|
2018
|
2019
|
||||||||||
Basic and Diluted loss per share:
|
||||||||||||
Profit (loss) from from continuing operations
|
(0.62
|
)
|
(0.21
|
)
|
0.08
|
|||||||
Profit (loss) from discontinued operation
|
(0.33
|
)
|
0.17
|
0.10
|
||||||||
Profit (loss) per share
|
(0.95
|
)
|
(0.04
|
)
|
0.18
|
NOTE 24:- |
BALANCES AND TRANSACTIONS WITH RELATED PARTIES AND KEY OFFICERS
|
a. |
Related parties consist of:
|
• |
Clal Biotechnologies Industries Ltd.- Parent Company.
|
• |
Directors of the Company.
|
• |
CureTech Ltd.-Sister Company.
|
b. |
Balances of related parties:
|
Other
|
Other
|
|||||||
Payables
|
Recievable
|
|||||||
Parent Company (1):
|
||||||||
As of December 31, 2018
|
186
|
-
|
||||||
As of December 31, 2019
|
119
|
-
|
||||||
Other related parties:
|
||||||||
As of December 31, 2018
|
41
|
58
|
||||||
As of December 31, 2019
|
95
|
-
|
c. |
Transactions with related parties:
|
Professional
Fee (1)
|
Rent expenses and other
|
|||||||
Parent company:
|
||||||||
2017
|
35
|
817
|
||||||
2018
|
44
|
292
|
||||||
2019
|
52
|
415
|
||||||
Other related parties:
|
||||||||
2017
|
225
|
-
|
||||||
2018
|
162
|
(246
|
)
|
|||||
2019
|
249
|
(59
|
)
|
NOTE 24:- |
BALANCES AND TRANSACTIONS WITH RELATED PARTIES AND KEY OFFICERS
|
(1) |
Professional fees do not include short-term employee benefits and share-based compensation to one of the Company's shareholders, who is a key officer, in the amounts of
$691, $537 and $450 for the years 2017, 2018 and 2019, respectively, as well as payment for the purchasing of a patent in amount of $30 and $12 for the years 2017 and 2018, respectively.
|
d. |
Compensation of officers of the Company:
|
Year ended
December 31,
|
||||||||||||
2017
|
2018
|
2019
|
||||||||||
Short-term employee benefits (*)
|
2,324
|
2,304
|
2,533
|
|||||||||
Share-based compensation
|
731
|
276
|
565
|
|||||||||
3,055
|
2,580
|
3,098
|
||||||||||
Number of officers
|
6
|
6
|
7
|
1.1.
|
In these Articles, unless the context requires another meaning the words in the first column of the following table shall have the meanings set opposite them in the second column:
|
“Alternate Nominee”
|
as defined in Article 77.1;
|
“Articles”
|
these Articles of Association, as amended from time to time by a Resolution (as defined below);
|
“Auditors”
|
the auditors of the Company;
|
“Board of Directors”
|
all of the directors of the Company holding office pursuant to these Articles, including alternates, substitutes or proxies;
|
“Chief Executive Officer”
|
chief executive officer of the Company;
|
“Chairman of the Board of Directors”
|
as defined in Article 81;
|
“Companies Law”
|
the Israeli Companies Law, 5759-1999, as amended from time to time, including the regulations promulgated thereunder, or any other law which may come in its stead, including all amendments made thereto;
|
“Company”
|
MediWound Ltd. or מדיוונד בע"מ;
|
“Committee of Directors”
|
as defined in Article 93;
|
“Compensation Committee”
|
as defined in the Companies Law;
|
“Deed of Transfer”
|
as defined in Article 44;
|
“Derivative Transaction”
|
as defined in Article 56;
|
“Effective Time”
|
the closing of the initial underwritten public offering of the Company’s Ordinary Shares, at which time these Articles shall first become effective;
|
“Director(s)”
|
a member or members of the Board of Directors elected to hold office as director(s);
|
“External Directors”
|
as defined in the Companies Law;
|
“General Meetings”
|
all annual and extraordinary meetings of the Shareholders;
|
“Incapacitated Person”
|
as defined under the Israeli Legal Capacity and Guardianship Law, 5722-1962, as amended from time to time, including a minor who has not yet attained the age of 18 years, a person unsound of mind and a bankrupt
in respect of whom no rehabilitation has been granted;
|
“NIS”
|
New Israeli Shekels;
|
“Nominees”
|
as defined in Article 77.1;
|
“Ordinary Shares”
|
as defined in Article 6;
|
“Office”
|
the registered office of the Company at that time;
|
“Office Holder”
|
as defined in the Companies Law;
|
“Person”
|
includes an individual, corporation, company, cooperative society, partnership, trust of any kind or any other body of persons, whether incorporated or otherwise;
|
“Proposal Request”
|
as defined in Article 56;
|
“Proposing Shareholder”
|
as defined in Article 56;
|
“Register”
|
the Register of Shareholders administered in accordance with the Companies Law;
|
“Resolution”
|
a resolution of Shareholders. Except as required under the Companies Law or these Articles, any Resolution shall be adopted by a majority of the voting power present and voting at the applicable General Meeting,
in person or by proxy;
|
“Rights”
|
as defined in Article 113.1;
|
“Shareholder(s)”
|
shall mean the shareholder(s) of the Company, at any given time;
|
“Special Fund”
|
as defined in Article 113.1;
|
“Transferor”
|
as defined in Article 44;
|
“Transferee”
|
as defined in Article 44;
|
“U.S. Rules”
|
the applicable rules of the NASDAQ Stock Market and the U.S. securities rules and regulations, as amended from time to time; and
|
“writing”
|
handwriting, typewriting, photography, telex, email or any other legible form of writing.
|
1.1.
|
Subject to the provisions of this Article 1, in these Articles, unless the context necessitates another meaning, terms and expressions which have been defined in the Companies Law shall have the meanings
ascribed to them therein.
|
1.2.
|
Words in the singular shall also include the plural, and vice versa. Words in the masculine shall include the feminine and vice versa, and words which refer to persons shall also include corporations, and vice
versa.
|
1.3.
|
The captions to articles in these Articles are intended for the convenience of the reader only, and no use shall be made thereof in the interpretation of these Articles.
|
2.
|
The Company is a limited liability company and therefore each shareholder’s obligations for the Company’s obligations shall be limited to the payment of the nominal value of the shares held by such shareholder,
subject to the provisions of the Companies Law.
|
3.
|
The Company’s objectives are to conduct all types of business as are permitted by law. The Company may donate a reasonable amount of money for any purpose that the Board of Directors finds appropriate, even if
the donation is not for business considerations or for the purpose of achieving profits for the Company.
|
4.
|
Any branch or type of business that the Company is authorized to engage in, either expressly or implied, may be commenced or engaged in by the Board of Directors at all or any time as it deems fit. The Board of
Directors shall be entitled to cease the conduct of any such branch or type of business, whether or not the actual conduct thereof has commenced at its own discretion.
|
5.
|
The registered office shall be at such place as is decided from time to time by the Board of Directors.
|
6.
|
The share capital of the Company shall consist of NIS 500,000 divided into 50,000,000 Ordinary Shares, of a nominal value of NIS 0.01 each (the “Ordinary Shares”)
|
7.
|
|
7.1.
|
The Ordinary Shares in respect of which all calls have been fully paid shall confer on the holders thereof the right to attend and to vote at General Meetings of the Company, both ordinary as well as
extraordinary meetings.
|
7.2.
|
The Ordinary Shares shall confer on a holder thereof the right to receive a dividend, to participate in a distribution of bonus shares and to participate in the distribution of the assets of the Company upon
its winding-up, pro rata to the nominal amount paid up on the shares or credited as paid up in respect thereof, and without reference to any premium which may have been paid in respect thereof.
|
8.
|
|
8.1.
|
Subject to applicable law, if at any time the share capital of the Company is divided into different classes of shares and unless the terms of issue of such class of shares otherwise stipulate, the rights
attaching to any class of shares (including rights prescribed in the terms of issue of the shares) may be altered, modified or canceled, by a Resolution passed at a separate General Meeting of the Shareholders of that class.
|
8.2.
|
The provisions contained in these Articles with regard to General Meetings shall apply, mutatis mutandis as the case may be, to every General Meeting of the holders of
each such class of the Company’s shares.
|
8.3.
|
Unless otherwise provided by these Articles, the increase of an authorized class of shares, or the issuance of additional shares thereof out of the authorized and unissued share capital, shall not be deemed,
for purposes of this Article 8.30, to modify or abrogate the rights attached to previously issued shares of such class or of any other class.
|
9.
|
The unissued shares in the capital of the Company shall be under the control of the Board of Directors, which shall be entitled to allot or otherwise grant the same to such Persons under such restrictions and
conditions as it shall deem fit, whether for consideration or otherwise, and whether for consideration in cash or for consideration which is not in cash, above their nominal value or at a discount, all on such conditions, in such manner and
at such times as the Board of Directors shall deem fit, subject to the provisions of the Companies Law. The Board of Directors shall be entitled, inter alia, to differentiate between Shareholders
with regard to the amounts of calls in respect of the allotment of shares (to the extent that there are calls) and with regard to the time for payment thereof. The Board of Directors may also issue options or warrants for the purchase of
shares of the Company and prescribe the manner of the exercise of such options or warrants, including the time and price for such exercise and any other provision which is relevant to the method for distributing the issued shares of the
Company amongst the purchasers thereof.
|
10.
|
The Board of Directors shall be entitled to prescribe the times for the issue of shares of the Company and the conditions therefore and any other matter which may arise in connection with the issue thereof.
|
11.
|
In every case of a rights offering the Board of Directors shall be entitled, in its discretion, to resolve any problems and difficulties arising or that are likely to arise in regard to fractions of rights, and
without prejudice to the generality of the foregoing, the Board of Directors shall be entitled to specify that no shares shall be allotted in respect of fractions of rights, or that fractions of rights shall be sold and the (net) proceeds
shall be paid to the persons entitled to the fractions of rights, or, in accordance with a decision by the Board of Directors, to the benefit of the Company.
|
11A. |
The Company may, subject to applicable law, issue redeemable shares and redeem the same. Shares issued by the Company may be redeemable upon terms and conditions to be set forth in a written agreement between the Company and the holder
of such shares.
|
12.
|
The Company may, from time to time, by a Resolution, increase its share capital by way of the creation of new shares, whether or not all the existing shares have been issued up to the date of the resolution,
whether or not it has been decided to issue same, and whether or not calls have been made on all the issued shares.
|
13.
|
The increase of share capital shall be in such amount and divided into shares of such nominal value, and with such restrictions and conditions and with such rights and privileges as the Resolution dealing with
the creation of the shares prescribes, and if no provisions are contained in the Resolution, then as the Board of Directors shall prescribe.
|
14.
|
Unless otherwise stated in the Resolution approving the increase of the share capital, the new shares shall be subject to those provisions in regard to issue, allotment, alteration of rights, payment of calls,
liens, forfeiture, transfer, transmission and other provisions which apply to the shares of the Company.
|
15.
|
By Resolution, the Company may, subject to any applicable provisions of the Companies Law:
|
15.1.
|
consolidate its existing share capital, or any part thereof, into shares of a larger denomination than the existing shares;
|
15.2.
|
sub-divide its share capital, in whole or in part, into shares of a smaller denomination than the nominal value of the existing shares and without prejudice to the foregoing, one or more of the shares so
created may be granted any preferred or deferred rights or any special rights with regard to dividends, participation in assets upon winding-up, voting and so forth, subject to the provisions of these Articles;
|
15.3.
|
reduce its share capital; or
|
15.4.
|
cancel any shares which on the date of passing of the Resolution have not been issued and to reduce its share capital by the amount of such shares.
|
16.
|
In the event that the Company shall adopt any of the Resolutions described in Article 15 above, the Board of Directors shall be entitled to prescribe arrangements necessary in order to resolve any difficulty
arising or that are likely to arise in connection with such Resolutions, including, in the event of a consolidation, it shall be entitled to (i) allot, in contemplation of or subsequent to such consolidation or other action, shares or
fractional shares sufficient to preclude or remove fractional share holdings; (ii) redeem, in the case of redeemable shares, and subject to applicable law, such shares or fractional shares sufficient to preclude or remove fractional share
holdings; (iii) round up, round down or round to the nearest whole number, any fractional shares resulting from the consolidation or from any other action which may result in fractional shares; or (iv) cause the transfer of fractional
shares by certain Shareholders to other Shareholders thereof so as to most expediently preclude or remove any fractional shareholdings, and, cause the transferees of such fractional shares to pay the transferors thereof the fair value
thereof, and the Board of Directors is hereby authorized to act in connection with such transfer, as agent for the transferors and transferees of any such fractional shares, with full power of substitution, for the purposes of implementing
the provisions of this Article 16
|
17.
|
To the extent shares are certificated, share certificates evidencing title to the shares of the Company shall be issued under the seal or rubber stamp of the Company, and together with the signatures of two
members of the Board of Directors, or one Director together with the Chief Executive Officer, the Chief Financial Officer, the Secretary of the Company or any other person designated by the Board of Directors. The Board of Directors shall
be entitled to decide that the signatures be effected in any mechanical or electronic form, provided that the signature shall be effected under the supervision of the Board of Directors in such manner as it prescribes.
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18.
|
Every Shareholder shall be entitled, free of charge, to one certificate in respect of all the shares of a single class registered in his name in the Register.
|
19.
|
The Board of Directors shall not refuse a request by a Shareholder to obtain several certificates in place of one certificate, unless such request is, in the opinion of the Board of Directors, unreasonable.
Where a Shareholder has sold or transferred some of his shares, he shall be entitled, free of charge, to receive a certificate in respect of his remaining shares, provided that the previous certificate is delivered to the Company before the
issuance of a new certificate.
|
20.
|
Every share certificate shall specify the number of the shares in respect of which such certificate is issued and also the amounts which have been paid up in respect of each share.
|
21.
|
No Person shall be recognized by the Company as having any right to a share unless such Person is the registered owner of the shares in the Register. The Company shall not be bound by and shall not recognize
any right or privilege pursuant to the laws of equity, or a fiduciary relationship or a chose in action, future or partial, in any share, or a right or privilege to a fraction of a share, or (unless these Articles otherwise direct) any
other right in respect of a share, except the absolute right to the share as a whole, where same is vested in the owner registered in the Register.
|
22.
|
A share certificate registered in the names of two or more persons shall be delivered to one of the joint holders, and the Company shall not be obliged to issue more than one certificate to all the joint
holders of shares and the delivery of such certificate to one of the joint holders shall be deemed to be delivery to all of them.
|
23.
|
If a share certificate should be lost, destroyed or defaced, the Board of Directors shall be entitled to issue a new certificate in its place, provided that the certificate is delivered to it and destroyed by
it, or it is proved to the satisfaction of the Board of Directors that the certificate was lost or destroyed and security has been received to its satisfaction in respect of any possible damages and after payment of such amount as the Board
of Directors shall prescribe.
|
24.
|
The Board of Directors may from time to time, in its discretion, make calls on Shareholders in respect of amounts which are still unpaid in respect of the shares held by each of the Shareholders (including
premiums), and the terms of issue which do not prescribe that same be paid at fixed times, and every Shareholder shall be obliged to pay the amount of the call made on him, at such time and at such place as stipulated by the Board of
Directors.
|
25.
|
In respect of any such call, prior notice of at least fourteen (14) business days shall be given, stating to whom the amount called is to be paid, the time for payment and the place thereof, provided that prior
to the due date for payment of such call, the Board of Directors may, by written notice to the Shareholders to which the call was made, cancel the call or extend the date of payment thereof.
|
26.
|
If according to the terms of issue of any share, or otherwise, any amount is required to be paid at a fixed time or in installments at fixed times, whether the payment is made on account of the share capital in
respect of the share or in form of a premium, every such payment or every such installment shall be paid as if it was a call duly made by the Board of Directors, in respect of which notice was duly given, and all the provisions contained in
these Articles in regard to calls shall apply to such amount or to such installment.
|
27.
|
Joint holders of a share shall be jointly and severally liable for the payment of all installments and calls due in respect of such share.
|
28.
|
In the event that a call or installment due on account of a share is not paid on or before the date fixed for payment thereof, the holder of the share, or the Person to whom the share has been allotted, shall
be obliged to pay linkage differentials and interest on the amount of the call or the installment, at such rate as shall be determined by the Board of Directors, commencing from the date fixed for the payment thereof and until the date of
actual payment. The Board of Directors may, however, waive the payment of the linkage differentials or the interest or part thereof.
|
29.
|
A Shareholder shall not be entitled (i) to receive a dividend and (ii) to exercise any right as a Shareholder, including but not limited to, the right to attend and vote at a General Meeting of any type and to
transfer the shares to another; unless he has paid all the calls payable from time to time and which apply to any of his shares, whether he holds same alone or jointly with another, plus linkage differentials, interest and expenses, if any.
|
30.
|
The Board of Directors may, if it deems fit, accept payment from a Shareholder wishing to advance the payment of all moneys which remain unpaid on account of his shares, or part thereof which are over and above
the amounts which have actually been called, and the Board of Directors shall be entitled to pay such Shareholder linkage differentials and interest in respect of the amounts paid in advance, or that portion thereof which exceeds the amount
called for the time being on account of the shares in respect of which the advance payment is made, at such rate as is agreed upon between the Board of Directors and the Shareholder, with this being in addition to dividends payable (if any)
on the paid-up portion of the share in respect of which the advance payment is made.
|
31.
|
If a Shareholder fails to make payment of any call or other installment on or before the date fixed for the payment thereof, the Board of Directors may, at any time thereafter and for as long as the part of the
call or installment remains unpaid, serve on such Shareholder a notice demanding that he make payment thereof, together with the linkage differentials and interest at such rate as is specified by the Board of Directors and all the expenses
incurred by the Company in consequence of such non-payment.
|
32.
|
The notice shall specify a further date, which shall be at least fourteen (14) business days after the date of the delivery of the notice, and a place or places at which such call or installment is to be paid,
together with linkage differentials and interest and expenses as aforesaid. The notice shall further state that, if the amount is not paid on or before the date specified, and at the place mentioned in such notice, the shares in respect of
which the call was made, or the installment is due, shall be liable to forfeiture.
|
33.
|
If the demands contained in such notice are not complied with the Board of Directors may treat the shares in respect of which the notice referred to in Articles 31 and 32 was given as forfeited. Such forfeiture
shall include all dividends, bonus shares and other benefits which have been declared in respect of the forfeited shares which have not actually been paid prior to the forfeiture.
|
34.
|
Any share so forfeited or waived shall be deemed to be the property of the Company and the Board of Directors shall be entitled, subject to the provisions of these Articles and the Companies Law, to sell,
re-allot or otherwise dispose thereof, as it deems fit, whether the amount paid previously in respect of that share is credited, in whole or in part.
|
35.
|
The Board of Directors may, at any time before any share forfeited as aforesaid is sold or re-allotted or otherwise dispose of, cancel the forfeiture on such conditions as it deems fit
|
36.
|
Any Person whose shares have been forfeited shall cease to be a Shareholder in respect of the forfeited shares, but shall, nonetheless remain liable for the payment to the Company of all calls, installments,
linkage differentials, interest and expenses due on account of or in respect of such shares on the date of forfeiture, in respect of the forfeited shares, together with interest on such amounts reckoned from the date of forfeiture until the
date of payment, at such rate as the Board of Directors shall from time to time specify. However, such Person’s liability shall cease after the Company has received all the amounts called in respect of the shares as well as any expenses
incurred by the Company relating to collecting the amounts called. The Board of Directors shall be entitled to collect the moneys which have been forfeited, or part thereof, as it shall deem fit, but it shall not be obliged to do so.
|
37.
|
The provisions of these Articles in regard to forfeiture shall also apply to cases of non-payment of any amount, which, according to the terms of issue of the share, or which under the conditions of allotment
the due date for payment of which fell on a fixed date, whether this be on account of the nominal value of the share or in the form of a premium, as if such amount was payable pursuant to a call duly made and notified.
|
38.
|
The Company shall have a first and paramount lien over all the shares which have not been fully paid up and which are registered in the name of any Shareholder (whether individually or jointly with others) and
also over the proceeds of the sale thereof, as security for the debts and obligations of such Shareholder to the Company and his contractual engagements with it, either individually or together with others. This right of lien shall apply
whether or not the due date for payment of such debts or the fulfillment or performance of such obligations has arrived, and no rights in equity shall be created in respect of any share, over which there is a lien as aforesaid. The
aforesaid lien shall apply to all dividends or benefits which may be declared, from time to time, on such shares, unless the Board of Directors shall decide otherwise.
|
39.
|
In order to foreclose on such lien, the Board of Directors may sell the shares under lien at such time and in such manner as, it shall deem fit, but no share may be sold unless the period referred to below has
elapsed and written notice has been given to the Shareholder, his trustee, liquidator, receiver, the executors of his estate, or anyone who acquires a right to shares in consequence of the bankruptcy of a Shareholder, as the case may be,
stating that the Company intends to sell the shares, if he or they should fail to pay the aforesaid debts, or fail to discharge or fulfill the aforesaid obligations within fourteen (14) business days from the date of the delivery of the
notice.
|
40.
|
The net proceeds of any such sale of shares, as contemplated by Article 39 above, after deduction of the expenses of the sale, shall serve for the discharge of the debts of such shareholder or for performance
of such Shareholder’s obligations (including debts, undertakings and contractual engagements the due date for the payment or performance of which has arrived) and the surplus, if any, shall be paid to the Shareholder, his trustee,
liquidator, receiver, guardians, the executors of his estate, or to his successors-in-title.
|
41.
|
In every case of a sale following forfeiture or waiver, or for purposes of executing a lien by exercising all of the powers conferred above, the Board of Directors shall be entitled to appoint a person to sign
an instrument of transfer of the shares sold, and to arrange for the registration of the name of the buyer in the Register in respect of the shares sold.
|
42.
|
An affidavit signed by the Chairman of the Board of Directors that a particular share of the Company was forfeited, waived or sold by the Company by virtue of a lien, shall serve as conclusive evidence of the
facts contained therein as against any person claiming a right in the share. The purchaser of a share who relies on such affidavit shall not be obliged to investigate whether the sale, re-allotment or transfer, or the amount of
consideration and the manner of application of the proceeds of the sale, were lawfully effected, and after his name has been registered in the Register he shall have a full right of title to the share and such right shall not be adversely
affected by a defect or invalidity which occurred in the forfeiture, waiver, sale, re-allotment or transfer of the share.
|
43. |
No transfer of shares shall be registered unless a proper instrument of transfer is delivered to the Company or, in the case of shares registered with a transfer agent, delivered to such transfer agent or to such other place
specified for this purpose by the Board of Directors. Subject to the provisions of these Articles, an instrument of transfer of a share in the Company shall be signed by the transferor and the transferee. The Board of Directors may
approve other methods of recognizing the transfer of shares in order to facilitate the trading of the Company’s shares on the Nasdaq Global Market or on any other stock exchange. The transferor shall be deemed to remain the holder of
the share up until the time the name of the transferee is registered in the Register in respect of the transferred share.
|
44. |
Insofar as the circumstances permit, the instrument of transfer of a share shall be substantially in the form set out below, or in any other form that the Board of Directors may approve (the “Deed of
Transfer”).
|
45. |
The Company may close the transfer registers and the Register for such period of time as the Board of Directors shall deem fit.
|
46. |
Every instrument of transfer shall be submitted to the Office or to such other place as the Board of Directors shall prescribe, for purposes of registration, together with the share certificates to be transferred, or if no such
certificate was issued, together with a letter of allotment of the shares to be transferred, and/or such other proof as the Board of Directors may demand in regard to the transferor’s right of title or his right to transfer the shares.
The Board of Directors shall have the right to refuse to recognize an assignment of shares until the appropriate securities under the circumstances have been provided, as shall be determined by the Board of Directors in a specific case
or from time to time in general. Instruments of transfer which serve as the basis for transfers that are registered shall remain with the Company.
|
47. |
Every instrument of transfer shall relate to one class of shares only, unless the Board of Directors shall otherwise agree.
|
48. |
The executors of the will or administrator of a deceased Shareholder’s estate (such Shareholder not being one of a joint owners of a share) or, in the absence of an administrator of the estate or executor of the will, the persons
specified in Article 49 below, shall be entitled to demand that the Company recognize them as owners of rights in the share. The provisions of Article 46 above shall apply, mutatis mutandis,
also in regard to this Article.
|
49. |
In the case of the death of one of the holders of a share registered in the names of two or more Persons, the Company shall recognize only the surviving owners as Persons having rights in the share. However, the aforementioned shall
not be construed as releasing the estate of a deceased joint Shareholder from any and all undertakings in respect of the shares. Any Person who shall become an owner of shares following the death of a Shareholder shall be entitled to be
registered as owner of such shares after having presented to an officer of the Company to be designated by the Chief Executive Officer an inheritance order or probation order or order of appointment of an administrator of estate and any
other proof as required - if these are sufficient in the opinion of such officer - testifying to such Person’s right to appear as shareholder in accordance with these Articles, and which shall testify to his title to such shares. The
provisions of Article 46 above shall apply, mutatis mutandis, also in regard to this Article.
|
50. |
The receiver or liquidator of a Shareholder who is a company or the trustee in bankruptcy or the official receiver of a Shareholder who is bankrupt, upon presenting appropriate proof to the satisfaction of an officer of the Company
to be designated by the Chief Executive Officer that such Shareholder has the right to appear in this capacity and which testifies to such Shareholder’s title, may, with the consent of the Board of Directors (the Board of Directors
shall not be obligated to give such consent) be registered as the owner of such shares. Furthermore, such Shareholder may assign such shares in accordance with the rules prescribed in these Articles. The provisions of Article 46 above
shall apply, mutatis mutandis, also in regard to this Article.
|
51. |
A Person entitled to be registered as a Shareholder following assignment pursuant to these Articles shall be entitled, if approved by the Board of Directors and to the extent and under the conditions prescribed by the Board of
Directors, to dividends and any other monies paid in respect of the shares, and shall be entitled to give the Company confirmation of the payments; however, he shall not be entitled to be present or to vote at any General Meeting of the
Company or, subject to the provisions of these Articles, to make use of any rights of Shareholders, until he has been registered as owner of such shares in the Register.
|
52. |
A General Meeting shall be held at least once in every year, not later than 15 (fifteen) months after the last General Meeting, at such time and at such place as the Board of Directors shall determine. Such General Meeting shall be
called an annual meeting, and all other meetings of the Shareholders shall be called extraordinary meetings.
|
53. |
The Board of Directors may call an extraordinary meeting whenever it sees fit to do so.
|
54. |
The Board of Directors shall be obliged to call an extraordinary meeting upon a requisition in writing in accordance with the Companies Law.
|
55. |
The Company shall provide prior notice in regard to the holding of an annual meeting or an extraordinary meeting in accordance with the requirements of these Articles, the Companies Law and the regulations promulgated thereunder.
Subject to the provisions of the Companies Law and the regulations promulgated thereunder, in counting the number of days of prior notice given, the day of publication of notice shall not be counted, but the day of the meeting shall be
counted. The notice shall specify those items and contain such information as shall be required by the Companies Law, the regulations promulgated thereunder and any other applicable law and regulations.
|
56. |
Any Shareholder (a “Proposing Shareholder”)requesting to add an item to the agenda of a General Meeting may submit such a request (a “Proposal Request”)
in accordance with the Companies Law. Subject to any requirements under the Law, to be considered timely and thereby be added to such agenda, a Proposal Request must be delivered, either in person or by certified mail, postage prepaid,
and received at the Office, (i) in the case of a General Meeting that is an annual meeting, no less than sixty (60) days nor more than one-hundred twenty (120) days prior to the date of the first anniversary of the preceding year’s
annual meeting, provided, however, that, in the event that the date of the annual meeting is advanced more than thirty (30) days prior to or delayed by more than thirty (30) days after the anniversary of the preceding year’s annual
meeting, notice by the Proposing Shareholder to be timely must be so received not earlier than the close of business one-hundred twenty (120) days prior to such annual meeting and not later than the close of business on the later of
ninety (90) days prior to such annual meeting or the tenth (10th) day following the day on which public announcement of the date of such meeting is first made, and (ii) in the case of a General Meeting that is an
extraordinary meeting, no earlier than one-hundred twenty (120) days prior to such extraordinary meeting and no later than sixty (60) days prior to such extraordinary meeting or the tenth (10th) day following the day on which
public announcement of the date of such meeting is first made, subject to applicable law.
|
57. |
Subject to Article 65 below, in the event that the Company has established that an adjourned meeting shall be held on such date which is later than the date provided for in Section 78(b) of the Companies Law, such later date shall be
included in the notice. The Company may add additional places for Shareholders to review the full text of the proposed resolutions, including an internet site. The notice shall be provided in the manner prescribed below under the
heading “Notices” in Articles 128 to 131 below.
|
58. |
No business shall be conducted at a General Meeting unless a quorum is present, and no resolution shall be passed unless a quorum is present at the time the resolution is voted on. Except in cases where it is otherwise stipulated, a
quorum shall be constituted when there are personally present, or represented by proxy, at least two (2) Shareholders who hold, in the aggregate, at least 25% of the voting rights in the Company. A proxy may be deemed to be two (2) or
more Shareholders pursuant to the number of Shareholders he represents.
|
59. |
If within half an hour from the time appointed for the meeting, a quorum is not present, without there being an obligation to notify the Shareholders to that effect, the meeting shall be adjourned to the same day, in the following
week, at the same hour and at the same place or to a later time and date if so specified in the notice of the meeting, unless such day shall fall on a statutory holiday (either in Israel or in the United States), in which case the
meeting will be adjourned to the first business day afterwards which is not a statutory holiday.
|
60. |
The Chairman of the Board of Directors, or any other Person appointed for this purpose by the Board of Directors, shall preside at every General Meeting. If within fifteen (15) minutes from the time appointed for the meeting, the
designated chairman for the meeting shall not be present, the Shareholders present at the meeting shall elect one of their number to serve as chairman of the meeting.
|
61. |
Resolutions at the General Meeting shall be passed in accordance with the definition of “Resolution” set forth in Article 1.1 above, unless otherwise required by Companies Law or these Articles. Every vote at a General Meeting shall
be conducted according to the number of votes to which each Shareholder is entitled on the basis of the number of Ordinary Shares held by such Shareholder (in accordance with the provisions of Article 7.1 above).
|
62. |
Where a poll has been demanded, the chairman of the meeting shall be entitled - but not obliged - to accede to the demand. Where the chairman of the meeting has decided to hold a poll, such poll shall be held in such manner, at such
time and at such place as the chairman of the meeting directs, either immediately or after an interval or postponement, or in any other way, and the results of the vote shall be deemed to be the Resolution at the meeting at which the
poll was demanded. A person demanding a poll may withdraw his demand prior to the poll being held.
|
63. |
A demand for the holding of a poll shall not prevent the continued business of the meeting on all other questions apart of the question in respect of which a poll was demanded.
|
64. |
The announcement by the chairman of the meeting that a Resolution has been passed unanimously or by a particular majority, or has been rejected, and a note recorded to that effect in the Company’s minute book, shall serve as prima facie proof of such fact, and there shall be no necessity for proving the number of votes or the proportion of votes given for or against the Resolution, unless otherwise required under
applicable law and regulation.
|
65. |
The Chairman of a General Meeting at which a quorum is present may, with the consent of holders of a majority of the voting power represented in person and by proxy and voting on the question of adjournment, adjourn the meeting from
time to time and from place to place, but no business shall be transacted at any adjourned meeting except business which might lawfully have been transacted at the meeting as originally called. Subject to these Articles, it shall not be
necessary to give any notice of an adjournment unless the meeting is adjourned for more than twenty-one (21) days, in which case notice thereof shall be given in the manner required for the meeting as originally called. Where a General
Meeting has been adjourned without changing its agenda, to a date which is not more than twenty-one (21) days, notices shall be given for the new date, as early as possible, and by no later than seventy-two (72) hours before the General
Meeting.
|
66. |
The voting rights of every shareholder entitled to vote at a General Meeting shall be as set forth in Article 7.1 of these Articles.
|
67. |
In the case of joint Shareholders, the vote of the senior joint holder, given personally or by proxy, shall be accepted, to the exclusion of the vote of the remaining joint Shareholders, and for these purposes the senior of the joint
Shareholders shall be the Person amongst the joint holders whose name appears first in the Register.
|
68. |
A Shareholder who is an Incapacitated Person may vote solely through his guardian or other person who fulfills the function of such guardian and who was appointed by a court, and any guardian or other person as aforesaid shall be
entitled to vote by way of a proxy, or in such manner as the court directs.
|
69. |
Any corporation which is a Shareholder of the Company shall be entitled, by way of resolution of its board of directors or another organ which manages said corporation, to appoint such person which it deems fit, whether or not such
person is a Shareholder of the Company, to act as its representative at any General Meeting of the Company or at a meeting of a class of shares in the Company which such corporation is entitled to attend and to vote thereat, and the
appointed as aforesaid shall be entitled, on behalf of the corporation whom he represents, to exercise all of the same powers and authorities which the corporation itself could have exercised had it been a natural person holding shares
of the Company.
|
70. |
Every Shareholder who is entitled to attend and vote at a General Meeting of the Company, shall be entitled to appoint a proxy. A proxy can be appointed by more than one Shareholder, and vote in different ways on behalf of each
principal.
|
71. |
The instrument appointing a proxy, or a copy thereof certified by an attorney, shall be lodged at the Office, or at such other place as the Board of Directors shall specify, not less than forty-eight (48) hours prior to the meeting
at which the proxy intends to vote based on such instrument of proxy. Notwithstanding the above, the chairman of the meeting shall have the right to waive the time requirement provided above with respect to all instruments of proxies
and to accept any and all instruments of proxy until the beginning of a General Meeting. A document appointing a proxy shall be valid for every adjourned meeting of the meeting to which the document relates.
|
72. |
Every instrument appointing a proxy, whether for a meeting specifically indicated, or otherwise, shall, as far as circumstances permit, be substantially in the following form, or in any other form approved by the Board of Directors:
|
73. |
No Shareholder shall be entitled to vote at a General Meeting unless he has paid all of the calls and all of the amounts due from him, for the time being, in respect of his shares.
|
74. |
A vote given in accordance with the instructions contained in an instrument appointing a proxy shall be valid notwithstanding the death or bankruptcy of the appointer, or the revocation of the proxy, or the transfer of the share in
respect of which the vote was given as aforesaid, unless notice in writing of the death, revocation or transfer is received at the Office, or by the chairman of the meeting, prior to such vote.
|
75. |
Subject to the Companies Law, an instrument appointing a proxy shall be deemed revoked (i) upon receipt by the Company or the chairman of the meeting, subsequent to receipt by the Company of such instrument, of written notice signed
by the person signing such instrument or by the Shareholder appointing such proxy canceling the appointment thereunder (or the authority pursuant to which such instrument was signed) or of an instrument appointing a different proxy,
provided such notice of cancellation or instrument appointing a different proxy were so received at the place and within the time for delivery of the instrument revoked thereby as referred to in Article 71 hereof, or (ii) if the
appointing shareholder is present in person at the meeting for which such instrument of proxy was delivered, upon receipt by the chairman of such meeting of written notice from such shareholder of the revocation of such appointment, or
if and when such Shareholder votes at such meeting. A vote cast in accordance with an instrument appointing a proxy shall be valid notwithstanding the revocation or purported cancellation of the appointment, or the presence in person or
vote of the appointing Shareholder at a meeting for which it was rendered, unless such instrument of appointment was deemed revoked in accordance with the foregoing provisions of this Article 75 at or prior to the time such vote was
cast.
|
76. |
Unless otherwise resolved by a Resolution, the prescribed number of Directors of the Company shall be between five (5) and nine (9) (including the External Directors), as may be fixed, from time to time, by the Board of Directors. At
any time the minimum number of Directors (other than the External Directors) shall not fall below three (3). Any Director shall be eligible for re-election upon termination of his term of office, subject to applicable law.
|
77. |
78. |
The Directors in their capacity as such shall be entitled to receive remuneration as shall be determined in compliance with the Companies Law and the regulations promulgated thereunder. The conditions (including remuneration) of the
terms of office of members of the Board of Directors shall be decided by the Board of Directors and/or any committee thereof, but the same shall be valid only if ratified in the manner required under the Companies Law. The remuneration
of Directors may be fixed as an overall payment or other consideration and/or as a payment or other consideration in respect of attendance at meetings of the Board of Directors. In addition to his remuneration, each Director shall be
entitled to be reimbursed, retroactively or in advance, in respect of his reasonable expenses connected with performing his functions and services as a Director. Such entitlement shall be determined in accordance with, and shall be
subject to, a specific resolution or policy adopted by the Board of Directors regarding such matter and in accordance with the requirements of applicable law.
|
79. |
79.1.1. |
if he resigns his office by way of a letter signed by him, lodged at the Office;
|
79.1.2. |
if he is declared bankrupt;
|
79.1.3. |
if he becomes insane or unsound of mind;
|
79.1.4. |
upon his death;
|
79.1.5. |
if he is prevented by applicable law from serving as a Director of the Company;
|
79.1.6. |
if the Board terminates his office according to Section 231 of the Companies Law;
|
79.1.7. |
if a court order is given in accordance with Section 233 of the Companies Law;
|
79.1.8. |
if he is removed from office by a Resolution at a General Meeting of the Company adopted by a majority of the voting power in the Company; or
|
79.1.9. |
if his period of office has terminated in accordance with the provisions of these Articles.
|
81. |
The Board of Directors shall elect one (1) or more of its members to serve as the Chairman of the Board of Directors (the “Chairman of the Board of Directors”), provided that, subject to the
provisions of Section 121(c) of the Companies Law, the Chief Executive Officer of the Company shall not serve as Chairman of the Board of Directors. The office of Chairman of the Board of Directors shall be vacated in each of the cases
mentioned in Articles 79.1 above and 82 below. The Board of Directors may also elect one or more members to serve as Vice Chairman, who shall have such duties and authorities as the Board of Directors may assign to him or her.
|
82. |
Subject to the relevant provisions of the Companies Law, the Company may, in a General Meeting, by a Resolution adopted by a majority of the voting power in the Company, dismiss any Director, prior to the end of his term of office
and the Board of Directors shall be entitled, by regular majority, with the exception of the External Directors who shall be appointed and removed in accordance with the Companies Law, to appoint another individual in his place as a
Director. The individual so appointed shall hold such office only for that period of time during which the director whom he replaces would have held office.
|
83. |
A Director shall not be obliged to hold any share in the Company.
|
84.4. |
Subject to the provisions of any applicable law, the remuneration of the Chief Executive Officer shall be fixed from time to time by the Board of Directors (and, so long as required by the Companies Law, shall be approved by the
Compensation Committee and by the Shareholders unless exempted from Shareholders approval) and such remuneration may be in the form of a fixed salary or commissions or a participation in profits, or in any other manner which may be
decided by the Board of Directors (and approved according to this Article 84.4).
|
86. |
Any Director, the Chief Executive Officer or the auditor of the Company in the event stipulated in Section 169 of the Companies Law, may, at any time, demand the convening of a meeting of the Board of Directors. The Chairman of the
Board shall be obliged, on such demand, to call such meeting on the date requested by the Director, the Chief Executive Officer or the auditor of the Company soliciting such a meeting, provided that proper notice pursuant to Article 87
is given.
|
87. |
Every Director shall be entitled to receive notice of meetings of the Board of Directors, and such notice may be in writing or by facsimile, or electronic mail, sent to the last address (whether physical or electronic) or facsimile
number given by the Director for purposes of receiving notices, provided that the notice shall be given at least a reasonable amount of time prior to the meeting and in no event less than 48 (forty eight) hours prior notice, unless the
urgency of the matter(s) to be discussed at the meeting reasonably require(s) a shorter notice period.
|
88. |
Every meeting of the Board of Directors at which a quorum is present shall have all the powers and authorities vested for the time being in the Board of Directors.
|
89. |
Questions which arise at meetings of the Board of Directors shall be decided by a simple majority of the members of the Board of Directors attending such meeting and voting on such matter. In the case of an equality of votes of the
Board of Directors, the Chairman of the Board of Directors shall not have a second or casting vote, and the proposal shall be deemed to be defeated.
|
90. |
The Board of Directors may adopt resolutions, without actually convening a meeting of the Board of Directors, provided that all the Directors entitled to participate in the meeting and to vote on the subject brought for decision
agree thereto. If resolutions are made as stated in this Article 90, the Chairman of the Board of Directors shall record minutes of the decisions stating the manner of voting of each Director on the subjects brought for decision, as
well as the fact that all the Directors agreed to take the decision without actually convening.
|
91. |
The Board of Directors may hold meetings by use of any means of communication, on condition that all participating Directors can hear each other at the same time. In the case of a resolution passed by way of a telephone call or any
such other means of communication, a copy of the text of the resolution shall be sent, as soon as possible thereafter, to the Directors.
|
92. |
The supervision of the Company’s affairs shall be in the hands of the Board of Directors, which shall be entitled to exercise all of the powers and authorities to perform any act and deed which the Company is entitled to exercise and
to perform in accordance with these Articles or according to the Companies Law, and in respect of which there is no provision or requirement in these Articles, or in the Companies Law or/and in the U.S. Rules, that such powers and
authorities may be exercised or done by the Shareholders in a General Meeting or by a Committee of Directors.
|
93. |
The Board of Directors may, as it deems fit and subject to any applicable law, delegate to a committee (a “Committee of Directors”) certain of its powers and authorities, in whole or in part
(as appropriate). The curtailment or revocation of the powers and authorities of a Committee of Directors by the Board of Directors shall not invalidate a prior act of such Committee of Directors or an act taken in accordance with its
instructions, which would have been valid had the powers and authorities of the Committee of Directors not been altered or revoked by the Board of Directors. Subject to applicable law, a Committee of Directors may be comprised of one
(1) Director or of several Directors, and in the case of a Committee of Directors that is appointed to advise the Board of Directors only, persons who are not Directors may be appointed to it.
|
94. |
The meetings and proceedings of every such Committee of Directors which is comprised of 2 (two) or more members shall be conducted in accordance with the provisions contained in these Articles in regard to the conduct of meetings and
proceedings of the Board of Directors to the extent that the same are suitable for such committee, and so long as no provisions have been adopted in replacement thereof by the Board of Directors.
|
95. |
Subject to the Companies Law, all acts taken in good faith by the Board of Directors and/or a Committee of Directors or by an individual acting as a member thereof shall be valid even if it is subsequently discovered that there was a
defect in the appointment of the Board of Directors, the Committee of Directors or the member, as the case may be, or that the members, or one of them, was/were disqualified from being appointed as a Director/s or to a Committee of
Directors.
|
97. |
The Board of Directors may, from time to time, in its absolute discretion, borrow or secure any amounts of money required by the Company for the conduct of its business.
|
98. |
The Board of Directors shall be entitled to raise or secure the repayment of an amount obtained by them, in such way and on such conditions and times as they deem fit. The Board of Directors shall be entitled to issue documents of
undertaking, such as options, debentures or debenture stock, whether linked or redeemable, convertible debentures or debentures convertible into other securities, or debentures which carry a right to purchase shares or to purchase other
securities, or any mortgage, pledge, collateral or other charge over the property of the Company and its undertaking, in whole or in part, whether present or future, including the uncalled share capital or the share capital which has
been called but not yet paid.
|
99. |
Subject to any other resolution on the subject passed by the Board of Directors, the Company shall be bound only pursuant to a document in writing bearing its seal or its rubber stamp or its printed name, and the signature of
whomever may be authorized by the Board of Directors, which shall be entitled to empower any person, either alone or jointly with another, even if he is not a Shareholder or a Director, to sign and act in the name and on behalf of the
Company.
|
100. |
The Board of Directors shall be entitled to prescribe separate signing power in regard to different businesses of the Company and in respect of the limit of the amounts in respect of which various persons shall be authorized to sign.
|
101. |
The Board of Directors shall be entitled, from time to time, to appoint, or to delegate to the Chief Executive Officer, either alone or together with other persons designated by the Board of Directors, the ability to appoint Office
Holders (other than Directors), a Secretary for the Company, employees and agents to such permanent, temporary or special positions, and to specify and change their titles, authorities and duties, and may set, or delegate to the Chief
Executive Officer, either alone or together with other persons designated by the Board of Directors, the ability to set salaries, bonuses and other compensation of any employee or agent who is not an Office Holder. Salaries, bonuses
and compensation of Office Holders who are not Directors shall be determined and approved by the Chief Executive Officer, and/or in such other manner as may be required from time to time under the Companies Law. The Board of Directors,
or the Chief Executive Officer, either alone or together with other persons designated by the Board of Directors, (in the case of any Office Holder, employee or agent appointed thereby), shall be entitled at any time, in its, his or
their (as applicable) sole and absolute discretion, to terminate the services of one of more of the foregoing persons (in the case of a Director, however, subject to compliance with Article 79 above), subject to any other requirements
under applicable law.
|
102. |
The Board of Directors and the Chief Executive Officer may from time to time and at any time, subject to their powers under these Articles and the Companies Law, empower any person to serve as representative of the Company for such
purposes and with such powers and authorities, instructions and discretions for such period and subject to such conditions as the Board of Directors (or the Chief Executive Officer, as the case may be) shall deem appropriate. Consistent
with the preceding sentence, the Board of Directors (or the Chief Executive Officer, as the case may be) may grant such person, inter alia, the power to transfer the authority, powers and
discretions vested in him, in whole or in part. The Board of Directors may (or the Chief Executive Officer, as the case may be), from time to time, revoke, annul, vary or change any such power or authority, or all such powers or
authorities collectively.
|
103. |
Unless otherwise permitted by the Companies Law, no dividends shall be paid other than out of the Company’s profits available for distribution as set forth in the Companies Law.
|
104. |
The Board of Directors may decide on the payment of a dividend or on the distribution of bonus shares.
|
105. |
A dividend in cash or bonus shares shall be paid or distributed, as the case may be, equally to the holders of the Ordinary Shares registered in the Register, pro rata to the nominal amount of capital paid up or credited as paid up
on par value of the shares, without reference to any premium which may have been paid thereon. However, whenever the rights attached to any shares or the terms of issue of the shares do not provide otherwise, an amount paid on account
of a share prior to the payment thereof having been called, or prior to the due date for payment thereof, and on which the Company is paying interest, shall not be taken into account for purposes of this Article as an amount paid-up on
account of the share.
|
106. |
Unless other instructions are given, it shall be permissible to pay any dividend by way of a check or payment order to be sent by post to the registered address of the Shareholder or the Person entitled thereto, or in the case of
joint Shareholders being registered, to the Shareholder whose name appears first in the Register in relation to the joint shareholding. Every such check shall be made in favor of the Person to whom it is sent. A receipt by the Person
whose name, on the date of declaration of the dividend, was registered in the Register as the owner of the shares, or in the case of joint holders, by one of the joint holders, shall serve as a discharge with regard to all the payments
made in connection with such share.
|
107. |
Unless otherwise specified in the terms of issue of shares or securities convertible into, or which grant a right to purchase, shares, any shares that are fully paid-up or credited as paid-up shall at any time confer on their holders
the right to participate in the full dividends and in any other distribution for which the determining date for the right to receive the same is the date at which the aforesaid shares were fully paid-up or credited as fully paid-up, as
the case may be, or subsequent to such date.
|
108. |
A dividend or other beneficial rights in respect of shares shall not bear interest.
|
109. |
The Board of Directors shall be entitled to deduct from any dividend or other beneficial rights, all amounts of money which the holder of the share in respect of which the dividend is payable or in respect of which the other
beneficial rights were given, may owe to the Company in respect of such share, whether or not the due date for payment thereof has arrived.
|
110. |
The Board of Directors shall be entitled to retain any dividend or bonus shares or other beneficial rights in respect of a share in relation to which the Company has a lien, and to utilize any such amount or the proceeds received
from the sale of any bonus shares or other beneficial rights, for the discharge of the debts or liabilities in respect of which the Company has a lien.
|
111. |
The Board of Directors may decide that a dividend is to be paid, in whole or in part, by way of a distribution of assets of the Company in kind, including by way of debentures or debenture stock of the Company, or shares or
debentures or debenture stock of any other company, or in any other way.
|
112. |
112.1. |
The Board of Directors may, at any time and from time to time, decide that any portion of the amounts standing for the time being to the credit of any capital fund (including a fund created as a result of a revaluation of the assets
of the Company), or which are held by the Company as profits available for distribution, shall be capitalized for distribution subject to and in accordance with the provisions of the Companies Law and of these Articles, amongst those
Shareholders who are entitled thereto and pro rata to their entitlement under these Articles, provided that the same shall not be paid in cash but shall serve for the payment up in full either at par or with a premium as prescribed by
the Company, of shares which have not yet been issued or of debentures of the Company which shall be allotted and distributed amongst the Shareholders in the aforesaid ratio as fully paid-up shares or debentures.
|
112.2. |
The Board of Directors shall be entitled to distribute bonus shares and to decide that the bonus shares shall be of the same class which confers on the Shareholders or the Persons entitled thereto the right to participate in the
distribution of bonus shares, or may decide that the bonus shares shall be of a uniform class to be distributed to each of the Shareholders or Persons entitled to shares as aforesaid, without reference to the class of shares conferring
the right to participate in the distribution on the holders of the shares or the Persons entitled thereto as aforesaid.
|
113.1. |
In every case that the Company issues bonus shares by way of a capitalization of profits or funds at a time at which securities issued by the Company are in circulation and confer on the holders thereof rights to convert the same
into shares in the share capital of the Company, or options to purchase shares in the share capital of the Company (such rights of conversion or options shall henceforth be referred to as the “Rights”),
the Board of Directors shall be entitled (in a case that the Rights or part thereof shall not be otherwise adjusted in accordance with the terms of their issue) to transfer to a special fund designated for the distribution of bonus
shares in the future (to be called by any name that the Board of Directors may decide on and which shall henceforth be referred to as the “Special Fund”) an amount equivalent to the nominal amount
of the share capital to which some or all of the Rights holders would have been entitled as a result of the issue of bonus shares, had they exercised their Rights prior to the determining date for the right to receive bonus shares,
including rights to fractions of bonus shares, and in the case of a second or additional distribution of bonus shares in respect of which the Company acts pursuant to this Article, including entitlement stemming from a previous
distribution of bonus shares.
|
113.2. |
In the case of the allotment of shares by the Company as a consequence of the exercise of entitlement by the owners of shares in those cases in which the Board of Directors has made a transfer to the Special Fund in respect of the
Rights pursuant to Article 113.1 above, the Board of Directors shall allot to each such shareholder, in addition to the shares to which he is entitled by virtue of having exercised his rights, such number of fully paid-up shares the
nominal value of which is equivalent to the amount transferred to the Special Fund in respect of his rights, by way of a capitalization to be effected by the Board of Directors of an appropriate amount out of the Special Fund. The
Board of Directors shall be entitled to decide on the manner of dealing with rights to fractions of shares in its sole discretion.
|
113.3. |
If after any transfer to the Special Fund has been made the Rights should lapse, or the period should end for the exercise of Rights in respect of which the transfer was effected without such Rights being exercised, then any amount
which was transferred to the Special Fund in respect of the aforesaid unexercised Rights shall be released from the Special Fund, and the Company may deal with the amount so released in any manner it would have been entitled to deal
therewith had such amount not been transferred to the Special Fund.
|
114. |
For the implementation of any resolution regarding a distribution of shares or debentures by way of a capitalization of profits as aforesaid, the Board of Directors may:
|
114.1. |
Resolve any difficulty which arises or may arise in regard to the distribution in such manner as it deems fit and may take all of the steps that it deems appropriate in order to overcome such difficulty.
|
114.2. |
Issue certificates in respect of fractions of shares, or decide that fractions of less than an amount to be decided by the Board of Directors shall not be taken into account for purposes of adjusting the rights of the Shareholders or
may sell the fractions of shares and pay the proceeds (net) to the Persons entitled thereto.
|
114.3. |
Sign, or appoint a Person to sign, on behalf of the Shareholders on any contract or other document which may be required for purposes of giving effect to the distribution, and, in particular, shall be entitled to sign or appoint a
Person who shall be entitled to appoint and submit a contract as referred to in Section 291 of the Companies Law.
|
114.4. |
Make any arrangement or other scheme which is required in the opinion of the Board of Directors in order to facilitate the distribution.
|
115. |
The Board of Directors shall be entitled, as it deems appropriate and expedient, to appoint trustees or nominees for those registered Shareholders who have failed to notify the Company of a change of their address and who have not
applied to the Company in order to receive dividends, shares or debentures out of capital, or other benefits during the aforesaid period. Such trustees or nominees shall be appointed for the use, collection or receipt of dividends,
shares or debentures out of capital and rights to subscribe for shares which have not yet been issued and which are offered to the Shareholders but they shall not be entitled to transfer the shares in respect of which they were
appointed, or to vote on the basis of holding such shares. In all of the terms and conditions governing such trusts and the appointment of such nominees it shall be stipulated by the Company that upon the first demand by a beneficial
holder of a share being held by the trustee or nominee, such trustee or nominee shall be obliged to return to such shareholder the share in question and/or all of those rights held by it on the Shareholder’s behalf (all as the case may
be). Any act or arrangement effected by any such nominees or trustee and any agreement between the Board of Directors and a nominee or trustee shall be valid and binding in all respects.
|
116. |
The Board of Directors may from time to time prescribe the manner for payment of dividends or the distribution of bonus shares and the arrangement connected therewith. Without derogating from the generality of the foregoing, the
Board of Directors shall be entitled to pay any dividends or moneys in respect of shares by sending a check via the mails to the address of the holder of registered shares according to the address registered in the register of
Shareholders. Any dispatch of a check as aforesaid shall be done at the risk of the shareholder.
|
117. |
If two (2) or more Persons are registered as joint holders of a share, each of them shall be entitled to give a valid receipt in respect of any dividend, share or debenture out of capital, or other moneys, or benefits, paid or
granted in respect of such share.
|
118. |
The Board of Directors shall comply with all the provisions of the Companies Law in regard to the recording of charges and the keeping and maintaining of a register of directors, register of Shareholders and register of charges.
|
119. |
Any book, register and record that the Company is obliged to keep in accordance with the Companies Law or pursuant to these Articles shall be recorded in a regular book, or by digital, electronic or other means, as the Board of
Directors shall decide.
|
120. |
Subject to and in accordance with the provisions of Sections 138 and 139 of the Companies Law, the Company may cause supplementary registers to be kept in any place outside Israel as the Board of Directors may deem fit, and, subject
to all applicable requirements of the Companies Law, the Board of Directors may from time to time adopt such rules and procedures as it may deem fit in connection with the keeping of such supplementary registers.
|
121. |
The Board of Directors shall keep proper books of account in accordance with the provisions of the Companies Law. The books of account shall be kept at the Office, or at such other place or places as the Board of Directors shall deem
appropriate, and shall at all times be open to the inspection of members of the Board of Directors. A Shareholder of the Company who is not a member of the Board of Directors shall not have the right to inspect any books or accounts or
documents of the Company, unless such right has been expressly granted to him by the Companies Law, or if he has been permitted to do so by the Board of Directors or by the Shareholders based on a Resolution adopted at a General
Meeting.
|
122. |
[RESERVED]
|
123. |
At least once each year the accounts of the Company and the correctness of the statement of income and the balance sheet shall be audited and confirmed by an independent auditor or auditors.
|
124. |
The Company shall, in an annual General Meeting, appoint an independent auditor or auditors who shall hold such position until the next annual General Meeting, and their appointment, remuneration and rights and duties shall be
subject to the provisions of the Companies Law, provided, however, that in exercising its authority to fix the remuneration of the auditor(s), the Shareholders in an annual General Meeting may, by a Resolution, act (and in the absence
of any action in connection therewith shall be deemed to have so acted) to authorize the Board of Directors to fix such remuneration subject to such criteria or standards, if any, as may be provided in such Resolution, and if no such
criteria or standards are so provided, such remuneration shall be fixed in an amount commensurate with both the volume and nature of the services rendered by the auditor(s). By an act appointing such auditors, the Company may appoint
the auditor(s) to serve for a period of up to the end of completion of the audit of the yearly financial statements for the three (3) year period then ended.
|
125. |
The auditors shall be entitled to receive notices of every General Meeting of the Company and to attend such meetings and to express their opinions on all matters pertaining to their function as the auditors of the Company.
|
126. |
Subject to the provisions of the Companies Law and the U.S. Rules, any act carried out by the auditors of the Company shall be valid as against any person doing business in good faith with the Company, notwithstanding any defect in
the appointment or qualification of the auditors.
|
127. |
For as long as the Company is a Public Company, as defined in the Companies Law, it shall appoint an internal auditor possessing the authorities set forth in the Companies Law. The internal auditor of the Company shall present all of
its proposed work plans to the Audit Committee of the Board of Directors, which shall have the authority to approve them, subject to any modifications in its discretion.
|
128.1. |
The Company may serve any written notice or other document on a Shareholder by way of delivery by hand, by facsimile transmission or by dispatch by prepaid registered mail to his address as recorded in the Register, or if there is no
such recorded address, to the address given by him to the Company for the sending of notices to him. Notwithstanding the foregoing or any other provision to the contrary contained herein, notices or any other information or documents
required to be delivered to a Shareholder shall be deemed to have been duly delivered if submitted, published, filed or lodged in any manner prescribed by applicable law. With respect to the manner of providing such notices or other
disclosures, the Company may distinguish between the Shareholders listed on its regular Registry and those listed in any “additional registry”, as defined in Section 138(a) of the Companies Law, administered by a transfer agent or stock
exchange registration company.
|
128.2. |
Any Shareholder may serve any written notice or other document on the Company by way of delivery by hand at the Office, by facsimile or email transmission to the Company or by dispatch by prepaid registered mail to the Company at the
Office.
|
128.3. |
Any notice or document which is delivered or sent to a Shareholder in accordance with these Articles shall be deemed to have been duly delivered and sent in respect of the shares held by him (whether in respect of shares held by him
alone or jointly with others), notwithstanding the fact that such Shareholder has died or been declared bankrupt at such time (whether or not the Company knew of his death or bankruptcy), and shall be deemed to be sufficient delivery or
dispatch to heirs, trustees, administrators or transferees and any other persons (if any) who have a right in the shares.
|
128.4. |
Any such notice or other document shall be deemed to have been served:
|
128.4.1. |
in the case of mailing, 48 hours after it has been posted, or when actually received by the addressee if sooner than 48 hours after it has been posted;
|
128.4.2. |
in the case of overnight air courier, on the next day following the day sent, with receipt confirmed by the courier, or when actually received by the addressee if sooner;
|
128.4.3. |
in the case of personal delivery, when actually tendered in person to such Shareholder;
|
128.4.4. |
in the case of facsimile or other electronic transmission (including email), the next day following the date on which the sender receives automatic electronic confirmation by the recipient’s facsimile machine or computer or other
device that such notice was received by the addressee; or
|
128.4.5. |
in the case a notice is, in fact, received by the addressee, when received, notwithstanding that it was defectively addressed or failed, in some other respect, to comply with the provisions of this Article 128.
|
129. |
Any Shareholder whose address is not described in the Register, and who shall not have designated in writing an address for the receipt of notices, shall not be entitled to receive any notice from the Company. In the case of joint
holders of a share, the Company shall be entitled to deliver a notice by dispatch to the joint holder whose name stands first in the Register in respect of such share.
|
130. |
Whenever it is necessary to give notice of a particular number of days or a notice for another period, the day of delivery shall be counted in the number of calendar days or the period, unless otherwise specified.
|
131. |
Notwithstanding anything to the contrary contained herein, notice by the Company of a General Meeting, containing the information required to be set forth in such notice under these Articles, which is published, within the time
otherwise required for giving notice of such meeting, in:
|
131.1. |
at least two daily newspapers in the State of Israel shall be deemed to be notice of such meeting duly given, for the purposes of these Articles, to any Shareholder whose address as registered in the Register (or as designated in
writing for the receipt of notices and other documents) is located in the State of Israel; and
|
131.2. |
one daily newspaper in New York, NY, United States, and in one international wire service shall be deemed to be notice of such meeting duly given, for the purposes of these Articles, to any shareholder whose address as registered in
the Register (or as designated in writing for the receipt of notices and other documents) is located outside the State of Israel.
|
132. |
Subject to the provisions of the Companies Law, the Company shall be entitled to enter into a contract to insure all or part of the liability of an Office Holder of the Company, imposed on him in consequence of an act which he has
performed by virtue of being an Office Holder, in respect of any of the following:
|
132.1. |
The breach of a duty of care to the Company or to any other Person;
|
132.2. |
The breach of a fiduciary duty to the Company, provided that the Office Holder acted in good faith and had reasonable grounds for believing that the action would not adversely affect the best interests of the Company;
|
132.3. |
A pecuniary liability imposed on him in favor of any other person in respect of an act done in his capacity as an Office Holder.
|
132.4. |
Any other circumstances arising under the law with respect to which the Company may, or will be able to, insure an Office Holder.
|
133. |
Subject to the provisions of the Companies Law, the Company shall be entitled to indemnify an Office Holder of the Company, to the fullest extent permitted by applicable law. Subject to the provisions of the Companies Law, including
the receipt of all approvals as required therein or under any applicable law, the Company may resolve retroactively to indemnify an Office Holder with respect to the following liabilities and expenses, provided, in each of the below
cases, that such liabilities or expenses were incurred by such Office Holder in such Office Holder’s capacity as an Office Holder of the Company:
|
133.1. |
a monetary liability imposed on him in favor of a third party in any judgment, including any settlement confirmed as judgment and an arbitrator’s award which has been confirmed by the court, in respect of an act performed by the
Office Holder by virtue of the Office Holder being an Office Holder of the Company; provided, however, that: (a) any indemnification undertaking with respect to the foregoing shall be limited (i) to events which, in the opinion of the
Board of Directors, are foreseeable in light of the Company’s actual operations at the time of the granting of the indemnification undertaking, and (ii) to an amount or by criteria determined by the Board of Directors to be reasonable
in the given circumstances; and (b) the events that in the opinion of the Board of Directors are foreseeable in light of the Company’s actual operations at the time of the granting of the indemnification undertaking are listed in the
indemnification undertaking together with the amount or criteria determined by the Board of Directors to be reasonable in the given circumstances;
|
133.2. |
reasonable litigation expenses, including legal fees, paid for by the Office Holder, in an investigation or proceeding conducted against such Office Holder by an agency authorized to conduct such investigation or proceeding, and
which investigation or proceeding: (i) concluded without the filing of an indictment (as defined in the Companies Law) against such Office Holder and without there having been a monetary liability imposed against such Office Holder in
lieu of a criminal proceeding (as defined in the Companies Law); (ii) concluded without the filing of an indictment against such Office Holder but with there having been a monetary liability imposed against such Office Holder in lieu of
a criminal proceeding for an offense that does not require proof of criminal intent; or (iii) involves financial sanction;
|
133.3. |
reasonable litigation expenses, including legal fees, paid for by the Office Holder, or which the Office Holder is obligated to pay under a court order, in a proceeding brought against the Office Holder by the Company, or on its
behalf, or by a third party, or in a criminal proceeding in which the Office Holder is found innocent, or in a criminal proceeding in which the Office Holder was convicted of an offense that does not require proof of criminal intent;
and
|
133.4. |
any other event, occurrence or circumstances in respect of which the Company may lawfully indemnify an Office Holder of the Company (including, without limitation, indemnification with respect to the matters referred to under Section
56h(b)(1) of the Israeli Securities Law 5728-1968, as amended.
|
133.5. |
The Company may undertake to indemnify an Office Holder as aforesaid: (i) prospectively, provided that the undertaking is limited to categories of events which in the opinion of the Board of Directors can be foreseen when the
undertaking to indemnify is given, and to an amount set by the Board of Directors as reasonable under the circumstances, and (ii) retroactively.
|
134. |
Subject to the provisions of the Companies Law including the receipt of all approvals as required therein or under any applicable law, the Company may, to the maximum extent permitted by the Companies Law, exempt and release, in
advance, any Office Holder from any liability for damages arising out of a breach of a duty of care towards the Company.
|
135.1. |
Any amendment to the Companies Law adversely affecting the right of any Office Holder to be indemnified or insured pursuant to Articles 132, 133 and 134 and any amendments to Articles 132, 133 and 134 shall be prospective in effect,
and shall not affect the Company’s obligation or ability to indemnify or insure an Office Holder for any act or omission occurring prior to such amendment, unless otherwise provided by applicable law.
|
135.2. |
The provisions of Articles 132, 133 and 134 are not intended, and shall not be interpreted so as to restrict the Company, in any manner, in respect of the procurement of insurance and/or in respect of indemnification and/or
exculpation, in favor of any person who is not an Office Holder, including, without limitation, any employee, agent, consultant or contractor of the Company who is not an Office Holder; and/or any Office Holder to the extent that such
insurance and/or indemnification is not specifically prohibited under law.
|
136. |
Should the Company be wound up and the assets of the Company made available for distribution among Shareholders be insufficient to repay all of the Company’s paid-up capital, such assets shall be divided in a manner whereby the
losses shall, as far as possible, be borne by the Shareholders pro rata to the nominal value of the paid-up capital on the shares held by each of them, and, if at the time of the winding-up, the property of the Company available for
distribution among the Shareholders should exceed the amount sufficient for the repayment of the full nominal value of the paid-up capital at the time of commencement of the winding-up, the surplus shall be distributed to the
Shareholders pro rata to the paid-up capital held by each of them.
|
137. |
Upon the sale of the Company’s assets, the Board of Directors may, or in the case of a liquidation, the liquidators may, if authorized to do so by a Resolution of the Company, accept fully or partly paid-up shares, or securities of
another company, Israeli or non-Israeli, whether in existence at such time or about to be formed, in order to purchase the property of the Company, or part thereof, and to the extent permitted under the Companies Law, the Board of
Directors may (or in the case of a liquidation, the liquidators may) distribute the aforesaid shares or securities or any other property of the Company among the Shareholders without realizing the same, or may deposit the same in the
hands of trustees for the Shareholders, and the General Meeting by a Resolution may decide, subject to the provisions of the Companies Law, on the distribution or allotment of cash, shares or other securities, or the property of the
Company and on the valuation of the aforesaid securities or property at such price and in such manner as the Shareholders at such General Meeting shall decide, and all of the Shareholders shall be obliged to accept any valuation or
distribution determined as aforesaid and to waive their rights in this regard, except, in a case in which the Company is about to be wound-up and is in the process of liquidation, for those legal rights (if any) which, according to the
provisions of the Companies Law, may not be changed or modified.
|
• |
amendments to our articles of association;
|
• |
appointment or termination of our auditors;
|
• |
appointment of external directors;
|
• |
approval of certain related party transactions;
|
• |
increases or reductions of our authorized share capital;
|
• |
a merger; and
|
• |
the exercise of our board of directors’ powers by a general meeting, if our board of directors is unable to exercise its powers and the exercise of any of its
powers is required for our proper management.
|
MEDIWOUND LTD.
|
2014 EQUITY INCENTIVE PLAN
|
1. |
PURPOSE; TYPES OF AWARDS; CONSTRUCTION.
|
1.1. |
Purpose. The purpose of this 2014 Equity Incentive Plan (as amended, the “Plan”) is to afford an incentive to employees, directors, officers, consultants, advisors, and any other person
or entity whose services (collectively, the “Service Providers”) to MediWound Ltd., an Israeli company (the “Company”), or to any Subsidiary or Affiliate of
the Company, which now exists or hereafter is organized or acquired by the Company, are considered valuable to the Company, to continue as Service Providers, to increase their efforts on behalf of the Company or an Affiliate and to
promote the success of the Company's business, by providing such Service Providers with opportunities to acquire a proprietary interest in the Company by the issuance of Ordinary Shares of the Company, and by the grant of options to
purchase Shares, awards of restricted Shares (“Restricted Shares”), Restricted Share Units (“RSUs”) and other Share-based Awards pursuant to the Plan.
|
1.2. |
Types of Awards. The Plan is intended to enable the Company to issue Awards under varying tax regimes, including:
|
(i) |
pursuant and subject to the provisions of Section 102 of the Ordinance, and all regulations and interpretations adopted thereunder, including the Income Tax Rules (Tax Benefits in Stock Issuance to Employees) 5763-2003 (the “Rules”) or such other rules published by the Israeli Income Tax Authorities (the “ITA”) (such Awards, “102 Awards”). 102
Awards may either be granted to a Grantee either through a Trustee or without a Trustee;
|
(ii) |
pursuant to Section 3(9) of the Ordinance (such Awards, “3(9) Awards”);
|
(iii) |
Incentive Stock Options within the meaning of Section 422 of the Code, or the corresponding provision of any subsequently enacted U.S. federal tax statute, as amended from time to time, to be granted to Service Providers who are deemed
to be residents of the United States, for purposes of taxation (“Incentive Stock Options”);
|
(iv) |
Nonqualified Stock Options to be granted to Service Providers who are deemed to be residents of the United States for purposes of taxation; and
|
(v) |
other stock-based Awards pursuant to Sections 11 through 13 hereof.
|
1.3. |
Construction. To the extent any provision herein conflicts with the conditions of any relevant tax law or regulation which are relied upon for tax relief in respect of a particular Award to a Grantee, the provisions of such law
or regulation shall prevail over those of the Plan and the Committee is empowered hereunder to interpret and enforce the said prevailing provisions.
|
2. |
DEFINITIONS.
|
2.1. |
Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. Unless the context requires otherwise (i) any definition of or reference to any agreement, instrument or
other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments,
restatements, supplements or modifications set forth therein or herein), (ii) references to any law, constitution, statute, treaty, regulation, rule or ordinance, including any section or other part thereof, shall refer to it as amended
from time to time and shall include any successor thereof, (iii) reference to a person shall means an individual, partnership, corporation, limited liability company, association, trust, unincorporated organization, or a government or
agency or political subdivision thereof, (iv) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to the Plan in its entirety and not to any particular provision hereof and (v) all
references herein to Sections shall be construed to refer to Sections to the Plan.
|
2.2. |
Defined Terms. The following terms shall have the meanings ascribed to them in this Section 2:
|
2.2.1. |
“Affiliate” shall have the meaning assigned thereto in Rule 405 of Regulation C under the Securities Act. For the purpose of Options granted pursuant to 102 Awards, “Affiliate” shall also mean an “employing company” within the meaning of Section 102(a) of the Ordinance.
|
2.2.2. |
“Applicable Law” shall mean any applicable law, rule, regulation, statute, pronouncement, policy, interpretation, judgment, order or decree of any federal, provincial, state or local
governmental, regulatory or adjudicative authority or agency, of any jurisdiction, and the rules and regulations of any stock exchange or trading system on which the Company's shares are then traded or listed.
|
2.2.3. |
“Award” shall mean any Restricted Share, Option or any other Share-based award, granted to under the Plan and any Share issued pursuant to the exercise thereof.
|
2.2.4. |
“Board” shall mean the Board of Directors of the Company.
|
2.2.5. |
“Code” shall mean the United States Internal Revenue Code of 1986, as amended.
|
2.2.6. |
“Committee” shall mean a committee established by the Board to administer the Plan, subject to Section 3.1.
|
2.2.7. |
“Companies Law” shall mean the Israel Companies Law, 5759-1999, and the regulations promulgated thereunder, all as amended from time to time.
|
2.2.8. |
“Controlling Shareholder” shall have the meaning set forth in Section 32(9) of the Ordinance.
|
2.2.9. |
“Disability” shall mean (i) the inability of a Grantee to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to
result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months, as determined by a medical doctor satisfactory to the Committee or (ii) if applicable, a “permanent and total disability”
as defined in Section 22(e)(3) of the Code or Section 409A(a)(2)(c)(i) of the Code, as amended from time to time.
|
2.2.10. |
“Employee” shall mean a person who is employed by the Company or any of its Affiliates, including, for the purpose of Section 102, an individual who is serving as an “office holder” as defined
under the Companies Law, but excluding any Controlling Shareholder.
|
2.2.11. |
“Exercise Period” shall mean the period, commencing on the date of grant of an Option, during which an Option shall be exercisable, subject to any vesting provisions thereof and the termination
provisions hereof.
|
2.2.12. |
“Exercise Price” shall mean the purchase price for each Share covered by an Option.
|
2.2.13. |
“Fair Market Value” per Share as of a particular date shall mean: (i) if the Shares are listed on any securities exchange, the average closing sales price per Share on the securities exchange
(including, if applicable, The NASDAQ Stock Market) on which the Shares are principally traded over the thirty (30) trading day period preceding the subject date; (ii) if the Shares are then quoted in an over-the-counter market, the
average of the closing bid and asked prices for the Shares in that over-the-counter market during the thirty (30) trading day period preceding the subject date; (iii) if the Shares are not then listed on a securities exchange or quoted in
an over-the-counter market, such value as the Committee, in its sole discretion, shall determine, with full authority to determine the method for making such determination and which determination shall be conclusive and binding on all
parties, and shall be made after such consultations with outside legal, accounting and other experts as the Committee may deem advisable; provided, however, that with respect to Nonqualified Stock Options, the Fair Market Value of the
Shares shall be determined in a manner that satisfies the applicable requirements of Section 409A of the Code, and with respect to Incentive Stock Options, the Fair Market Value shall be determined in a manner that satisfies the
applicable requirements of Section 422 of the Code, subject to Section 422(c)(7) of the Code. The Committee shall maintain a written record of its method of determining such value. If the Shares are listed or quoted on more than one
established stock exchange or over-the-counter market, the Committee shall determine the principal such exchange or market and utilize the price of the Shares on that exchange or market (determined as per the method described in clauses
(i) or (ii) above, as applicable) for the purpose of determining Fair Market Value.
|
2.2.14. |
“Grantee” shall mean a person who receives a grant of an Award under the Plan.
|
2.2.15. |
“Non-Employee” shall mean a consultant, adviser, Controlling Shareholder or any other Service Provider who is not an Employee.
|
2.2.16. |
“Nonqualified Stock Option” shall mean any Option granted to a Service Provider who is deemed to be a resident of the United States for purposes of taxation, which Option is not designated as, or
does not meet the conditions for, an Incentive Stock Option.
|
2.2.17. |
“Options” shall mean all options to purchase Shares granted as 102 Awards, 3(9) Awards, Incentive Stock Options and Non-Qualified Stock Options, as well as options to purchase Shares issued under
other tax regimes.
|
2.2.18. |
“Ordinance” shall mean the Israeli Income Tax Ordinance (New Version) 1961, and the regulations promulgated thereunder, all as amended from time to time.
|
2.2.19. |
“Parent” shall mean any company (other than the Company), which now exists or is hereafter organized, (i) in an unbroken chain of companies ending with the Company if, at the time of granting an
Award, each of the companies in such chain (other than the Company) owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other companies in such chain, or (ii) if
applicable, as defined in Section 424(e) of the Code.
|
2.2.20. |
“Retirement” shall mean a Grantee's retirement pursuant to applicable law or in accordance with the terms of any tax-qualified retirement plan maintained by the Company or any of its affiliates
in which the Grantee participates.
|
2.2.21. |
“Securities Act” shall mean the U.S. Securities Act of 1933, as amended.
|
2.2.22. |
“Shares” shall mean Ordinary Shares, nominal value NIS 0.01 of the Company, or shares of such other class of shares of the Company as shall be designated by the Board in respect of the relevant
Award.
|
2.2.23. |
“Subsidiary” shall mean any company (other than the Company), which now exists or is hereafter organized or acquired by the Company, (i) in an unbroken chain of companies beginning with the
Company if, at the time of granting an Award, each of the companies other than the last company in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of
the other companies in such chain, or (ii) if applicable, as defined in Section 424(f) of the Code.
|
2.2.24. |
“Ten Percent Shareholder” shall mean a Grantee who, at the time an Incentive Stock Option is granted, owns shares possessing more than ten percent (10%) of the total combined voting power of all
classes of shares of the Company or any Parent or Subsidiary.
|
2.2.25. |
“Trustee” shall mean the trustee appointed by the Committee or the Board, as the case may be, to hold the respective Options and/or Shares (and, in relation with 102 Awards, approved by the
Israeli tax authorities), if so appointed.
|
2.3. |
Other Defined Terms. The following terms shall have the meanings ascribed to them in the Sections set forth below:
|
Term
|
Section
|
102 Awards
|
1.2(i)
|
102 Capital Gains Track Options
|
9.1
|
102 Non-Trustee Options
|
9.2
|
102 Ordinary Income Track Options
|
9.1
|
102 Trustee Options
|
9.1
|
3(9) Awards
|
1.2(ii)
|
Cause
|
6.6.3
|
Company
|
1.1
|
Effective Date
|
25.1
|
Election
|
9.2
|
Eligible 102 Grantees
|
4.2
|
ISO Shares
|
8.4
|
ITA
|
1.2(i)
|
Market Stand-Off
|
17.1
|
Merger/Sale
|
14.2
|
Option Agreement
|
6
|
Plan
|
1.1
|
Required Holding Period
|
9.4
|
Restricted Period
|
11.4
|
Restricted Share Agreement
|
11
|
Restricted Share Unit Agreement
|
12.1
|
Restricted Shares
|
1.1
|
RSU
|
12.1
|
Rules
|
1.2(i)
|
Service Provider(s)
|
1.1
|
Successor Corporation
|
14.2.1
|
Withholding Obligations
|
18.3
|
3.1. |
To the extent permitted under Applicable Law, the Articles of Association and any other governing document of the Company, the Plan shall be administered by the Committee. In the event that the Board does not create a committee to
administer the Plan, the Plan shall be administered by the Board in its entirety. In the event that an action necessary for the administration of the Plan is required under law to be taken by the Board, then such action shall be so taken
by the Board. In any such event, all references herein to the Committee shall be construed as references to the Board. All decisions, determinations, and interpretations of the Committee shall be final and binding on all Grantees unless
otherwise determined by the Committee.
|
3.2. |
The Committee shall consist of two or more directors of the Company, as determined by the Board. The Board shall appoint the members of the Committee, may from time to time remove members from, or add members to, the Committee, and
shall fill vacancies in the Committee however caused, provided that the composition of the Committee shall at all times be in compliance with any mandatory requirements of Applicable Law. The Committee may select one of its members as its
Chairman and shall hold its meetings at such times and places as it shall determine. The Committee may appoint a Secretary, who shall keep records of its meetings, and shall make such rules and regulations for the conduct of its business
as it shall deem advisable and subject to requirements of Applicable Law.
|
3.3. |
Subject to the terms and conditions of the Plan, any mandatory provisions of Applicable Law and any provisions of any Company policy required under mandatory provisions of Applicable Law, and in addition to the Committee's powers
contained elsewhere in the Plan, the Committee shall have full authority in its discretion, from time to time and at any time, to determine any of the following, or to recommend to the Board any of the following if it is not authorized to
take such action according to Applicable Law:
|
(i) |
eligible Grantees,
|
(ii) |
grants of Awards and setting the terms and provisions of Option Agreements (which need not be identical) and any other agreements or instruments under which Awards are made, including, but not limited to, the number of Shares
underlying each Award,
|
(iii) |
the time or times at which Awards shall be granted,
|
(iv) |
the vesting schedule, the acceleration thereof and conditions on which Awards may be exercised, and the amendment, modification of supplement (with the consent of the applicable Grantee, if such amendments refer to the extension of any
vesting schedule determined for any Award or increase the Exercise Price of the Options or cancel any Award without compensation) of the terms of each outstanding Award, unless otherwise provided under the terms of the Plan.
|
(v) |
the Exercise Price,
|
(vi) |
the interpretation of the Plan,
|
(vii) |
the rules and regulations relating to and for carrying out the Plan, and any amendment or rescission thereof, as it may deem appropriate,
|
(viii) |
the Fair Market Value of the Shares,
|
(ix) |
the tax track (capital gains, ordinary income track or any other track available under the Section 102 of the Ordinance) for the purpose of 102 Awards, and
|
(x) |
the authorization of conversion or substitution under the Plan of any or all Awards or Shares and the cancellation or suspension of Awards, as necessary, provided that, unless consent is received from the Grantees, the interests of the
Grantees are not materially harmed, and
|
(xi) |
any other matter which is necessary or desirable for, or incidental to, the administration of the Plan and any Award thereunder.
|
3.4. |
Grants of Awards shall be made from time to time by the Board or the Committee (as applicable) and the terms thereof shall be evidenced by a written notice to Grantees setting forth the terms of the Award. Such notice shall designate
the type of Award as one of the following: (i) a 102 Award granted to a Trustee (either as a 102 Award (capital gain track) with Trustee or a 102 Award (ordinary income track) with Trustee), (ii) a 102 Award without a Trustee, (iii) a
3(9) Award, (iv) an Incentive Stock Option, (v) a Nonqualified Stock Option, or (vi) any other type of Award.
|
3.5. |
Subject to the mandatory provisions of Applicable Law, the grant of any Award, whether by the Committee or the Board, shall be deemed to include an authorization of the issuance of Shares upon the due exercise thereof.
|
3.6. |
The authority granted hereunder includes the authority to modify Awards to eligible individuals who are foreign nationals or are individuals who are employed outside Israel to recognize differences in local law, tax policy or custom,
in order to effectuate the purposes of the Plan but without amending the Plan. Subject to the provisions of Applicable Law, the Committee shall have the authority to grant, in its discretion, to the holder of an outstanding Award, in
exchange for the surrender and cancellation of such Award, a new Award having an Exercise Price lower than that provided in the Award so surrendered and canceled and containing such other terms and conditions as the Committee may
prescribe in accordance with the provisions of the Plan or to set a new Exercise Price for the same Award lower than that previously provided in the Award.
|
3.7. |
All decisions, determination and interpretations of the Committee shall be final and binding on all Grantees of any Awards under the Plan, unless otherwise determined by the Board. No member of the Committee shall be liable for any
action taken or determination made in good faith with respect to the Plan or any Award granted hereunder.
|
4. |
ELIGIBILITY.
|
4.1. |
Awards may be granted to Service Providers of the Company or any Affiliate thereof, taking into account the qualification under each tax regime pursuant to which such Awards are granted. A person who has been granted an Award hereunder
may be granted additional Awards, if the Committee shall so determine, subject to the limitations herein. In determining the persons to whom Awards shall be granted and the number of Shares to be covered by each Award, the Committee shall
take into account the duties of the respective persons, their present and potential contributions to the success of the Company and such other factors as the Committee shall deem relevant in connection with accomplishing the purpose of
the Plan or which it shall be required to consider pursuant to the provisions of Applicable Law or any provisions of any Company policy required under mandatory provisions of Applicable Law.
|
4.2. |
Subject to Applicable Law, 102 Awards may not be granted to Controlling Shareholders and may only be granted to Employees, including officers and directors, of the Company or any Affiliate thereof as of the time such Award is granted,
and who are Israeli residents as of such time (“Eligible 102 Grantees”). Awards to Eligible 102 Grantees in Israel shall be 102 Awards. Eligible 102 Grantees may receive only 102 Awards, which may
either be grants to a Trustee or grants under Section 102 of the Ordinance without a trustee. Unless otherwise permitted by the Ordinance and the Rules, no 102 Awards to a Trustee may be granted until the expiration of thirty (30) days
after the requisite filings under the Ordinance and the Rules have been appropriately made with the ITA.
|
4.3. |
Subject to Applicable Law, Non-Employees who are Israeli residents and are not Eligible 102 Grantees may only be granted 3(9) Awards under the Plan.
|
5. |
SHARES.
|
6. |
TERMS AND CONDITIONS OF OPTIONS.
|
6.1. |
Number of Shares. Each Option Agreement shall state the number of Shares covered by the Option.
|
6.2. |
Type of Option. Each Option Agreement shall specifically state the type of Option granted thereunder and whether it constitutes an Incentive Stock Option, Nonqualified Stock Option, 102 Award and the relevant track, 3(9) Award,
or otherwise.
|
6.3. |
Exercise Price. Each Option Agreement shall state the Exercise Price. In the case of an Incentive Stock Option, the Exercise Price shall not be less than one hundred percent (100%) of the Fair Market Value of the Shares covered
by the Option on the date of grant or such other price as may be required pursuant to the Code. For an Incentive Stock Option granted to any Ten-Percent Shareholder, the Exercise Price shall be no less than 110% of the Fair Market Value
of the Shares covered by the Option on the date of grant. The Exercise Price of a Nonqualified Stock Option shall not be less than 100% of the Fair Market Value of the Shares on the date of grant unless the Committee specifically
indicates that the Option will have a lower Exercise Price and the Option complies with Section 409A of the Code. In the case of any other Option, the per share Exercise Price shall be equal to the Fair Market Value of the Shares on the
date of grant, or such other price as shall be determined by the Committee, provided, however, that in no event shall the Exercise Price of an Option be less than the nominal value of the shares for which such Option is exercisable.
Subject to Section 3 and to the foregoing, the Committee may reduce the Exercise Price of any outstanding Option. The Exercise Price shall also be subject to adjustment as provided in Section 14 hereof. This Section 6.3 shall not apply
to an Option granted pursuant to assumption of, or substitution for, another option in a manner that complies with Code Section 424(a), whether or not the Option is an Incentive Stock Option.
|
6.4. |
Manner of Exercise. An Option may be exercised, as to any or all Shares as to which the Option has become exercisable, by written notice delivered in person or by mail to the Secretary of the Company or to such other person as
determined by the Committee, specifying the number of Shares with respect to which the Option is being exercised, accompanied by payment of the aggregate Exercise Price for such Shares in the manner specified in the following sentence.
The Exercise Price shall be paid in full with respect to each Share, at the time of exercise, either in (i) cash, (ii) if the Company’s Shares are publicly traded, all or part of the Exercise Price and any withholding taxes may be paid by
the delivery (on a form prescribed by the Company) of an irrevocable direction to a securities broker approved by the Company to sell Shares and to deliver all or part of the sales proceeds to the Company or the Trustee, (iii) if the
Company’s shares are publicly traded, all or part of the Exercise Price and any withholding taxes may be paid by the delivery (on a form prescribed by the Company) of an irrevocable direction to pledge Shares to a securities broker or
lender approved by the Company, as security for a loan, and to deliver all or part of the loan proceeds to the Company or the Trustee, or (iv) in such other manner as the Committee shall determine, which may include (inter alia)
procedures for cashless exercise, which determination may be made with general application to all Awards and Grantees or only with respect to certain Award(s) or Grantee(s).
|
6.5. |
Term and Vesting of Options. Each Option Agreement shall provide the vesting schedule for the Option as determined by the Committee. To the extent permitted under Applicable Law, the Committee shall have the authority to
determine the vesting schedule and accelerate the vesting of any outstanding Option at such time and under such circumstances as it, in its sole discretion, deems appropriate. Unless otherwise resolved by the Committee and stated in the
Option Agreement, and subject to Sections 6.6 and 6.7 hereof, Options shall vest and become exercisable under the following schedule: twenty-five percent (25%) of the Shares covered by the Option, on the first anniversary of the date on
which such Option is granted, provided that the Grantee remains continuously employed by or in the service of the Company or its Subsidiary or Affiliate for that one year, and six and one-quarter percent (6.25%) of the Shares covered by
the Option at the end of each subsequent three-month period, provided that the Grantee remains continuously employed by or in the service of the Company or its Subsidiary or Affiliate for that quarter, over the course of the following
three (3) years of continued employment by or service for the Company or its Subsidiary or Affiliate. The Option Agreement may contain performance goals and measurements, and the provisions with respect to any Option need not be the same
as the provisions with respect to any other Option. The Exercise Period of an Option will be 10 years from the date of grant of the Option unless otherwise determined by the Committee, but subject to the vesting provisions described
above and the early termination provisions set forth in Sections 6.6 and 6.7 hereof; provided, however, that in the case of an Incentive Stock Option granted to a Ten Percent Shareholder, such Exercise Period shall not exceed five (5)
years from the date of grant of such Option. At the expiration of the Exercise Period, all unexercised Options shall become null and void.
|
6.6. |
Termination.
|
6.6.1. |
Unless otherwise resolved by the Committee, and except as provided in this Section 6.6 and in Section 6.7 hereof, an Option may not be exercised unless the Grantee is then in the employ of or maintaining a director, officer,
consultant, advisor or supplier relationship with the Company or a Subsidiary or Affiliate thereof or, in the case of an Incentive Stock Option, a company or a parent or subsidiary company of such company issuing or assuming the Option in
a transaction to which Section 424(a) of the Code applies, and unless the Grantee has remained continuously so employed or in the director, officer, supplier, consultant, or advisor relationship since the date of grant of the Option. In
the event that the employment or director, officer or consultant, advisor or supplier relationship of a Grantee shall terminate (other than by reason of death, Disability or Retirement), all Options of such Grantee that are unvested at
the time of such termination shall terminate on the date of such termination, and all Options of such Grantee that are vested and exercisable at the time of such termination may, unless earlier terminated in accordance with their terms,
be exercised within up to three (3) months after the date of such termination (or such different period as the Committee shall prescribe); provided, however, that if the Company (or the Subsidiary or Affiliate, when applicable) shall
terminate the Grantee’s employment or service for Cause (as defined below) or if, whether or not the Grantee’s employment is terminated by either party, circumstances arise or are discovered with respect to the Grantee that would have
constituted Cause for termination of his or her employment or service, all Options theretofore granted to such Grantee (whether vested or not) shall, to the extent not theretofore exercised, terminate on the date of such termination (or
on which such circumstances arise or are discovered, as the case may be) unless otherwise determined by the Committee, and any Shares issued upon exercise of Options by such Grantee shall become subject to the Company’s right to
repurchase such Shares against payment of the purchase price previously received by the Company for such Shares upon their issuance.
|
6.6.2. |
In the case of a Grantee whose principal employer or service recipient is a Subsidiary or Affiliate, the Grantee’s employment shall also be deemed terminated for purposes of this Section 6.6 as of the date on which such principal
employer or service recipient ceases to be a Subsidiary or Affiliate. Notwithstanding anything to the contrary, the Committee, in its absolute discretion, may, on such terms and conditions as it may determine appropriate, extend the
periods for which the Options held by any Grantee may continue to vest and be exercisable; provided, that such Options may lose their entitlement to certain tax benefits under Applicable Law as a result of the modification of the Option
to extend the vesting or exercise period and/or in the event that the Option is exercised beyond the later of: (i) three (3) months after the date of termination of the employment or service relationship ; or (ii) the applicable period
under Section 6.7 below with respect to a termination of the employment or service relationship because of the death, Disability or Retirement of Grantee.
|
6.6.3. |
For purposes of the Plan, a 'termination' of employment or service relationship shall not be deemed to occur in case of a transition of a Grantee among any members of the Company 'group' (i.e. a termination of employment or service
relationship with one 'group' member and the simultaneous commencement of – or continued - employment or service relationship with another), nor shall it occur in the event of a change of the Grantee's relationship status within the
'group' (e.g. an Employee becoming a Non-Employee), so long as the Grantee has remained continuously so employed and/or in service relationship with any 'group' member(s) throughout the entire period since the date of grant of the Option
(the 'group' means the Company, its Affiliate and Subsidiaries); provided, however, that, notwithstanding the foregoing and unless determined otherwise by the Committee, in the event that an Award is granted to a Grantee
in connection with its employment with or service to the Company or a Subsidiary, then a 'termination' of employment or service relationship shall also be deemed to occur for purpose of this Plan upon the first time thereafter on which
the Grantee is no longer in the employ of nor maintaining a service relationship with neither the Company nor any of its Subsidiaries, even if at such time the Grantee maintains or simultaneously commences employment or service
relationship with an Affiliate of the Company that is not a Subsidiary.
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6.6.4. |
For purposes of the Plan, the term “Cause” shall mean (irrespective of any definition included in any other agreement or instrument applicable to the Grantee, and unless otherwise determined by
the Committee and evidenced in the Grantee’s Option Agreement) any of the following: (a) any fraud, embezzlement or felony or similar act by the Grantee (whether or not related to the Grantee’s relationship with the Company); (b) an act
of moral turpitude by the Grantee, or any act that causes significant injury to, or is otherwise adversely affecting, the reputation, business, assets, operations or business relationship of the Company (or a Subsidiary or Affiliate, when
applicable); (c) any breach by the Grantee of any material agreement between the Company or any Subsidiary or Affiliate and the Grantee (including breach of material confidentiality, non-competition or non-solicitation covenants) or of
any material duty of the Grantee to the Company or any Subsidiary or Affiliate thereof; or (d) any act which constitutes a breach of a Grantee’s fiduciary duty towards the Company or an Affiliate or Subsidiary, including without
limitation disclosure of confidential information thereof or acceptance or solicitation to receive unauthorized or undisclosed benefits, irrespective of their nature, or funds, or promises to receive either, from individuals, consultants
or corporate entities that the Company or an Affiliate or a Subsidiary does business with; or (e) any circumstances that constitute grounds for termination for cause under the Grantee’s employment, consulting or service agreement with the
Company or Subsidiary or Affiliate, to the extent applicable. For the avoidance of doubt it is clarified that the determination as to whether a termination is for Cause, shall be made in good faith by the Committee and shall be final and
binding on the Grantee.
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6.7. |
Death, Disability or Retirement of Grantee. If a Grantee shall die while employed by, or performing service for, the Company or a Subsidiary, or within the three (3) month period after the date of termination of such Grantee's
employment or service (or within such different period as the Committee may have provided pursuant to Section 6.6 hereof), or if the Grantee's employment or service shall terminate by reason of Disability, all Options theretofore granted
to such Grantee may (to the extent otherwise vested and exercisable and unless earlier terminated in accordance with their terms) be exercised by the Grantee or by the Grantee's estate or by a person who acquired the right to exercise
such Options by bequest or inheritance or otherwise by result of death or Disability of the Grantee, at any time within one (1) year after the death or Disability of the Grantee (or such different period as the Committee shall prescribe).
In the event that an Option granted hereunder shall be exercised by the legal representatives of a deceased or former Grantee, written notice of such exercise shall be accompanied by a certified copy of letters testamentary or equivalent
proof of the right of such legal representative to exercise such Option. In the event that the employment or service of a Grantee shall terminate on account of such Grantee's Retirement, all Options of such Grantee that are exercisable at
the time of such Retirement may, unless earlier terminated in accordance with their terms, be exercised at any time within the three (3) month period after the date of such Retirement (or such different period as the Committee shall
prescribe).
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6.8. |
Suspension of Vesting. Unless the Board or the Committee provides otherwise, vesting of Options granted hereunder shall be suspended during any unpaid leave of absence, other than in the case of any (a) leave of absence which
was pre-approved by the Company for purposes of continuing the vesting of Options, or (b) transfers between locations of the Company or between the Company, any Subsidiary or Affiliate, or any respective successor thereof.
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6.9. |
Voting Proxy. Until immediately after the listing for trading on a stock exchange or market or trading system of the Company’s (or the Successor Corporation’s) shares, the right to vote any Shares acquired under the Plan
pursuant to an Award shall, unless otherwise determined by the Committee, be given by the Grantee or the Trustee (if so requested from the Trustee and agreed by the Trustee), as the case may be, pursuant to an irrevocable proxy, to the
person or persons designated by the Board. All Awards granted hereunder shall be conditioned upon the execution of such irrevocable proxy. So long as any such Shares are held by a Trustee (and unless a proxy was given by the Trustee as
aforesaid), such Shares shall be voted by the Trustee, and unless the Trustee is directed otherwise by the Board, such Shares shall be voted in the same proportion as the result of the shareholder vote at the shareholders meeting or
written consent in respect of which the Shares held by the Trustee are being voted. Any irrevocable proxy granted pursuant hereto shall be of no force or effect immediately after the listing for trading on a stock exchange or market or
trading system of the Company’s (or the Successor Corporation’s) shares. The provisions of this Section shall apply to the Grantee and to any purchaser, assignee or transferee of any Shares.
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6.10. |
Other Provisions. The Option Agreement evidencing Awards under the Plan shall contain such other terms and conditions not inconsistent with the Plan as the Committee may determine, at or after the date of grant, including
provisions in connection with the restrictions on transferring the Awards, which shall be binding upon the Grantees and other terms and conditions as the Committee shall deem appropriate.
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6.11. |
Israeli Index Base for 102 Awards. Each 102 Award will be subject to the Israeli index base of the Value of Benefit, as defined in Section 102(a) of the Ordinance, as determined by the Committee in its discretion, pursuant to
the Rules, from time to time. In the event that the Company effects a public offering of its shares in any stock exchange outside of Israel, the Committee may amend retroactively the Israeli index base, pursuant to the Rules, without the
Grantee’s consent.
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6.12. |
Securities Law Restrictions. Except as otherwise provided in the applicable Option Agreement or other agreement between the Service Provider and the Company, if the exercise of an Option following the termination of the Service
Provider’s employment or service (other than for Cause) would be prohibited at any time solely because the issuance of Shares would violate the registration requirements under the Securities Act, then the Option shall terminate on the
earlier of (i) the expiration of a period of three (3) months after the termination of the Service Provider’s employment or service during which the exercise of the Option would not be in violation of such registration requirements, or
(ii) the expiration of the term of the Option as set forth in the Option Agreement. In addition, unless otherwise provided in a Grantee’s Option Agreement, if the sale of any Shares received upon exercise of an Option following the
termination of the Grantee's employment or service (other than for Cause) would violate the Company’s insider trading policy, then the Option shall terminate on the earlier of (i) the expiration of a period equal to the applicable
post-termination exercise period after the termination of the Grantee's employment or service during which the exercise of the Option would not be in violation of the Company’s insider trading policy, or (ii) the expiration of the term of
the Option as set forth in the applicable Option Agreement.
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7. |
NONQUALIFIED STOCK OPTIONS.
|
8. |
INCENTIVE STOCK OPTIONS.
|
8.1. |
Eligibility for Awards. Incentive Stock Options may be granted only to Employees of the Company, or to Employees of a Parent or Subsidiary corporation thereof (as such terms are defined in Sections 424(e) and 424(f) of the
Code).
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8.2. |
Value of Shares. The aggregate Fair Market Value (determined as of the date the Incentive Stock Option is granted) of the Shares with respect to which all Incentive Stock Options granted under the Plan and all other option plans
of any Parent or Subsidiary or Affiliate become exercisable for the first time by each Grantee during any calendar year shall not exceed one hundred thousand United States dollars ($100,000) with respect to such Grantee. To the extent
that the aggregate Fair Market Value of Shares with respect to which the Incentive Stock Options are exercisable for the first time by any Grantee during any calendar years exceeds one hundred thousand United States dollars ($100,000),
such Options shall be treated as Nonqualified Stock Options. The foregoing shall be applied by taking Options into account in the order in which they were granted, with the Fair Market Value of any Share to be determined at the time of
the grant of the Option. In the event the foregoing results in the portion of an Incentive Stock Option exceeding the one hundred thousand United States dollars ($100,000) limitation, only such excess shall be treated as a Nonqualified
Stock Option.
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8.3. |
Ten Percent Shareholder. In the case of an Incentive Stock Option granted to a Ten Percent Shareholder, (i) the Exercise Price shall not be less than one hundred and ten percent (110%) of the Fair Market Value of the Shares on
the date of grant of such Incentive Stock Option, and (ii) the Exercise Period shall not exceed five (5) years from the date of grant of such Incentive Stock Option.
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8.4. |
Incentive Stock Option Lock-Up Period. No disposition of Shares received pursuant to the exercise of Incentive Stock Options (“ISO Shares”), shall
be made by the Grantee within 2 years from the date of grant nor within 1 year after the transfer of such ISO Shares to him. To the extent that the Grantee violates the aforementioned limitations, the Incentive Stock Options shall be
deemed to be Nonqualified Stock Options.
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8.5. |
Approval. The status of any ISO Shares shall be subject to approval of the Plan by the Company’s shareholders, such approval to be provided 12 months before or after the date of adoption
of the Plan by the Board.
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8.6. |
Exercise Following Termination. Notwithstanding anything else in the Plan to the contrary, Incentive Stock Options that are not exercised within three (3) months following termination of
Grantee’s employment with the Company or its Parent or Subsidiary corporations, or within one year in case of termination of Grantee’s employment with the Company or its Parent or Subsidiary corporations due to a Disability (within the
meaning of section 22(e)(3) of the Code), shall be deemed to be Nonqualified Stock Options (without, however, derogating from any provision of the Plan providing for any early termination of such Options following termination of such
employment).
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8.7. |
Adjustments to Incentive Stock Options. Any Option Agreement providing for the grant of Incentive Stock Options shall indicate that adjustments made pursuant to the Plan with respect to
Incentive Stock Options could constitute a “modification” of such Incentive Stock Options (as that term is defined in Section 424(h) of the Code) or could cause adverse tax consequences for the holder of such Incentive Stock Options and
that the holder should consult with his or her tax advisor regarding the consequences of such “modification” on his or her income tax treatment with respect to the Incentive Stock Option.
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8.8. |
Notice to Company of Disqualifying Disposition. Each Grantee who receives an Incentive Stock Option must agree to notify the Company in writing immediately after the Grantee makes a
Disqualifying Disposition of any ISO Shares. A “Disqualifying Disposition” is any disposition (including any sale) of such ISO Shares before the later of (i) two years after the date the Grantee was granted the Incentive Stock Option, or
(ii) one year after the date the Grantee acquired Shares by exercising the Incentive Stock Option. If the Grantee dies before such ISO Shares are sold, these holding period requirements do not apply and no disposition of the ISO Shares
will be deemed a Disqualifying Disposition.
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9. |
102 OPTION AWARDS.
|
9.1. |
Options granted pursuant to this Section 9 are intended to be granted pursuant to Section 102 of the Ordinance pursuant to either (a) Section 102(b)(2) thereof as capital
gains track options (“102 Capital Gains Track Options”), or (b) Section 102(b)(1) thereof as ordinary income track options (“102 Ordinary Income Track Options”,
and together with 102 Capital Gains Track Options, “102 Trustee Options”). 102 Trustee Options shall be granted subject to the following special terms and conditions contained in this Section 9,
the general terms and conditions specified in Section 6 hereof and other provisions of the Plan, except for any provisions of the Plan applying to Options under different tax laws or regulations.
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9.2. |
The Company may grant only one type of 102 Trustee Option at any given time to all Grantees who are to be granted 102 Trustee Options pursuant to the Plan, and shall file an election with the ITA regarding the type of 102 Trustee
Option it elects to grant before the date of grant of any 102 Trustee Options (the “Election”). Such Election shall also apply to any bonus shares received by any Grantee as a result of holding the
102 Trustee Options. The Company may change the type of 102 Trustee Option that it elects to grant only after the passage of at least 12 months from the end of the year in which the first grant was made in accordance with the previous
Election, or as otherwise provided by Applicable Law. Any Election shall not prevent the Company from granting Options, pursuant to Section 102(c) of the Ordinance without a Trustee (“102 Non-Trustee
Options”).
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9.3. |
Each 102 Trustee Option will be deemed granted on the date determined by the Committee and stated in a written notice to be provided by the Company, provided that the Grantee has signed all other documents required pursuant to
Applicable Law and under the Plan.
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9.4. |
Each 102 Trustee Option, each Share issued pursuant to the exercise of any 102 Trustee Option, and any rights granted thereunder, including bonus shares, shall be allotted and issued to and registered in the name of the Trustee and
shall be held in trust for the benefit of the Grantee for a period of not less than the requisite period prescribed by the Ordinance and the Rules or such longer period as set by the Committee (the “Required
Holding Period”). In the event that the requirements under Section 102 of the Ordinance to qualify an Option as a 102 Trustee Option are not met, then the Option may be treated as a 102 Non-Trustee Option, all in accordance with
the provisions of such Section 102 and the Rules. After termination of the Required Holding Period, the Trustee may release such 102 Trustee Option and any such Shares, provided that (i) the Trustee has received an acknowledgment from
the ITA that the Grantee has paid any applicable taxes due pursuant to the Ordinance or (ii) the Trustee and/or the Company and/or its Affiliate withholds any applicable taxes due pursuant to the Ordinance arising from the 102 Trustee
Options and/or any Shares allotted or issued upon exercise of such 102 Trustee Options. The Trustee shall not release any 102 Trustee Options or Shares issued upon exercise thereof prior to the payment in full of the Grantee’s tax
liabilities arising from such 102 Trustee Options and/or Shares or the withholding referred to in (ii) above.
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9.5. |
Each 102 Trustee Option shall be subject to the relevant terms of the Ordinance and the Rules, which shall be deemed an integral part of the 102 Trustee Option and shall prevail over any term contained in the Plan or Option Agreement
that is not consistent therewith. Any provision of the Ordinance, the Rules and any approvals by the Income Tax Commissioner not expressly specified in the Plan or Option Agreement that, as determined by the Committee, are necessary to
receive or maintain any tax benefit pursuant to Section 102 of the Ordinance shall be binding on the Grantee. The Grantee granted a 102 Trustee Option shall comply with the Ordinance and the terms and conditions of the Trust Agreement
entered into between the Company and the Trustee. The Grantee agrees to execute any and all documents that the Company and/or its Affiliates and/or the Trustee may reasonably determine to be necessary in order to comply with the Ordinance
and the Rules.
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9.6. |
During the Required Holding Period, the Grantee shall not release from trust or sell, assign, transfer or give as collateral, the Shares issuable upon the exercise of a 102 Trustee Option and/or any securities issued or distributed
with respect thereto, until the expiration of the Required Holding Period. Notwithstanding the above, if any such sale or release occurs during the Required Holding Period it will result in adverse tax consequences to the Grantee under
Section 102 of the Ordinance and the Rules, which shall apply to and shall be borne solely by such Grantee. Subject to the foregoing, the Trustee may, pursuant to a written request from the Grantee, release and transfer such Shares to a
designated third party, provided that both of the following conditions have been fulfilled prior to such release or transfer: (i) payment has been made to the ITA of all taxes required to be paid upon the release and transfer of the
Shares, and confirmation of such payment has been received by the Trustee and (ii) the Trustee has received written confirmation from the Company that all requirements for such release and transfer have been fulfilled according to the
terms of the Company’s corporate documents, the Plan, the Option Agreement and any Applicable Law.
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9.7. |
If a 102 Trustee Option is exercised during the Required Holding Period, the Shares issued upon such exercise shall be issued in the name of the Trustee for the benefit of the Grantee. If such 102 Trustee Option is exercised after the
expiration of the Required Holding Period, the Shares issued upon such exercise shall, at the election of the Grantee, either (i) be issued in the name of the Trustee for the benefit of the Grantee, or (ii) be issued to the Grantee,
provided that the Grantee first complies with all applicable provisions of the Plan and that all taxes required to be paid upon the issuance of such Shares to the Grantee shall have been fully paid to the ITA, and confirmation of such
payment has been received by the Company.
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9.8. |
The foregoing provisions of this Section 9 relating to 102 Trustee Options shall not apply with respect to 102 Non-Trustee Options, which shall, however, be subject to the relevant provisions of Section 102 of the Ordinance and the
Rules.
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9.9. |
Upon receipt of a 102 Trustee Option, the Grantee will sign an undertaking to release the Trustee from any liability with respect to any action or decision duly taken and executed in good faith by the Trustee in relation to the Plan,
or any 102 Trustee Option or Share granted to such Grantee thereunder.
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10. |
3(9) OPTION AWARD.
|
10.1. |
Options granted pursuant to this Section 10 are intended to constitute 3(9) Option Awards and shall be granted subject to the general terms and conditions specified in Section 6 hereof and other provisions of the Plan, except for any
provisions of the Plan applying to Options under different tax laws or regulations.
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10.2. |
To the extent required by the Ordinance or the ITA or otherwise deemed by the Committee prudent or advisable, the 3(9) Option Awards granted pursuant to the Plan shall be issued to a Trustee nominated by the Committee in accordance
with the provisions of the Ordinance. In such event, the Trustee shall hold such Options in trust, until exercised by the Grantee, pursuant to the Company's instructions from time to time as set forth in a trust agreement, which will
have been entered into between the Company and the Trustee. If determined by the Board or the Committee, and subject to such trust agreement, the Trustee shall be responsible for withholding any taxes to which a Grantee may become liable
upon the exercise of Options.
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11. |
RESTRICTED SHARES.
|
11.1. |
Number of Shares. Each Restricted Share Agreement shall state the number of Shares covered by an Award.
|
11.2. |
Purchase Price. Each Restricted Share Agreement may state an amount of purchase price to be paid by the Grantee, if any, in consideration for the issuance of the Restricted Shares and the terms of payment thereof, which may
include, payment by issuance of promissory notes or other evidence of indebtedness on such terms and conditions as determined by the Committee.
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11.3. |
Vesting. Each Restricted Share Agreement shall provide the vesting schedule for the Restricted Shares as determined by the Committee, provided that (to the extent permitted under Applicable Law) the Committee shall have the
authority to determine the vesting schedule and accelerate the vesting of any outstanding Restricted Share at such time and under such circumstances as it, in its sole discretion, deems appropriate. Unless otherwise resolved by the
Committee and stated in the Restricted Share Agreement, Restricted Shares shall vest in the same vesting schedule as set forth in Section 6.5 hereof.
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11.4. |
Restrictions. Restricted Shares may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of, except by will or the laws of descent and distribution (in which case they shall be transferred subject to
all restrictions then or thereafter applicable thereto), until such restricted shares shall have vested as provided in Section 11.3 (the period from the date of the Award until the date of vesting of the Restricted Share thereunder being
referred to herein as the “Restricted Period”).The Committee may also impose such additional or alternative restrictions and conditions on the Restricted Shares, as it deems appropriate, including
the satisfaction of performance criteria. Such performance criteria may include, but are not limited to, sales, earnings before interest and taxes, return on investment, earnings per share, any combination of the foregoing or rate of
growth of any of the foregoing, as determined by the Committee or pursuant to the provisions of any Company policy required under mandatory provisions of Applicable Law. Certificates for shares issued pursuant to Restricted Share Awards
shall bear an appropriate legend referring to such restrictions, and any attempt to dispose of any such shares in contravention of such restrictions shall be null and void and without effect. Such certificates may, if so determined by
the Committee, be held in escrow by an escrow agent appointed by the Committee, or, if a Restricted Share Award is made pursuant to Section 102 of the Ordinance, by the Trustee. In determining the Restricted Period of an Award the
Committee may provide that the foregoing restrictions shall lapse with respect to specified percentages of the awarded Restricted Shares on successive anniversaries of the date of such Award. To the extent required by the Ordinance or the
ITA, the Restricted Shares issued pursuant to Section 102 of the Ordinance shall be issued to the Trustee in accordance with the provisions of the Ordinance and the Restricted Shares shall be held for the benefit of the Grantee for such
period as may be required by the Ordinance.
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11.5. |
Adjustment of Performance Goals. The Committee may adjust performance goals to take into account changes in law and accounting and tax rules and to make such adjustments as the Committee deems necessary or appropriate to reflect
the inclusion or the exclusion of the impact of extraordinary or unusual items, events or circumstances. The Committee also may adjust the performance goals by reducing the amount to be received by any Grantee pursuant to an Award if and
to the extent that the Committee deems it appropriate.
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11.6. |
Forfeiture. Subject to such exceptions as may be determined by the Committee, if the Grantee's continuous employment with or service to the Company or any Subsidiary or Affiliate shall terminate for any reason prior to the
expiration of the Restricted Period of an Award or prior to the payment in full of the purchase price of any Restricted Shares with respect to which the Restricted Period has expired, any Shares remaining subject to vesting or with
respect to which the purchase price has not been paid in full, shall thereupon be forfeited and shall be deemed transferred to, and reacquired by, or cancelled by, as the case may be, the Company or a Subsidiary at no cost to the Company
or Subsidiary, subject to all Applicable Laws. Upon forfeiture of Restricted Shares, the Grantee shall have no further rights with respect to such Restricted Shares. The provisions of Sections 6.6 and 6.7 above shall apply in determining
the occurrence of a 'termination' of employment or service for purpose of this Section 11.6, mutatis mutandis.
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11.7. |
Ownership. During the Restricted Period the Grantee shall possess all incidents of ownership of such Restricted Shares, subject to Section 6.9 and Section 11.4, including the right to vote and receive dividends with respect to
such Shares. All distributions, if any, received by a Grantee with respect to Restricted Shares as a result of any stock split, stock dividend, combination of shares, or other similar transaction shall be subject to the restrictions
applicable to the original Award.
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12. |
RESTRICTED SHARE UNITS.
|
12.1. |
An RSU is an Award covering a number of Shares that is settled by issuance of those Shares. An RSU may be awarded to any eligible Grantee, including under Section 102 of the Ordinance. Each grant of RSUs under the Plan shall be
evidenced by a written agreement between the Company and the Grantee (the “Restricted Share Unit Agreement”), in such form as the Committee shall from time to time approve. Such RSUs shall be
subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The provisions of the various Restricted Share Unit Agreements entered into under the Plan need not be identical.
RSUs may be granted in consideration of a reduction in the recipient’s other compensation.
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12.2. |
Other than the nominal value of the Shares, no payment of cash shall be required as consideration for RSUs. RSUs may or may not be subject to vesting. Vesting shall occur, in full or in installments, upon satisfaction of the conditions
specified in the Restricted Share Unit Agreement.
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12.3. |
Without limitation of Section 6.9, no voting or dividend rights as a shareholder shall exist prior to the actual issuance of Shares in the name of the Grantee. Notwithstanding anything else in the Plan (as may be amended from time to
time) to the contrary, unless otherwise specified by the Committee, each RSU shall be for a term of seven (7) years. Each Restricted Share Unit Agreement shall specify its term and any conditions on the time or times for settlement, and
provide for expiration prior to the end of its term in the event of termination of Grantee's employment with or service to the Company or any Subsidiary or Affiliate, and may provide for earlier settlement in the event of the Grantee’s
death, Disability or other events. The provisions of Sections 6.6 and 6.7 above shall apply in determining the occurrence of a 'termination' of employment or service for purpose of this Section 12.3, mutatis mutandis.
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12.4. |
Settlement of vested RSUs shall be made in the form of Shares. Distribution to a Grantee of an amount (or amounts) from settlement of vested RSUs can be deferred to a date after settlement as determined by the Committee. The amount of
a deferred distribution may be increased by an interest factor or by dividend equivalents. Until the grant of RSUs is settled, the number of such RSUs shall be subject to adjustment pursuant hereto.
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12.5. |
Notwithstanding anything to the contrary set forth herein, any RSUs granted under the Plan that are not exempt from the requirements of Section 409A of the Code shall contain such restrictions or other provisions so that such RSUs will
comply with the requirements of Section 409A of the Code. Such restrictions, if any, shall be determined by the Board and contained in the Restricted Share Unit Agreement evidencing such RSU Award. For example, such restrictions may
include a requirement that any Shares that are to be issued in a year following the year in which the RSU Award vests must be issued in accordance with a fixed, pre-determined schedule.
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13. |
OTHER SHARE OR SHARE-BASED AWARDS.
|
14. |
EFFECT OF CERTAIN CHANGES.
|
14.1. |
General. In the event of a subdivision of the outstanding Shares of the Company, any distribution of a stock dividend (bonus shares), a consolidation of shares, a stock split, a reverse stock split, a reclassification with
respect to the Shares (each, a "Recapitalization"), then the total number and class of the Shares reserved under the Plan, the number and class of the Shares underlying the Awards subject to the
Plan and the Exercise Price of the Options subject to the Plan, shall be appropriately and equitably adjusted so as to maintain through such an event the proportionate equity portion represented by the Awards and the total Exercise Price
of the Options. In any of the foregoing Recapitalization events, or in the event of the distribution by the Company of subscription rights (rights offering) on outstanding shares, and in the event of a recapitalization, a reorganization
(which may include a combination or exchange of Shares), a spin-off or other corporate divestiture or division, or other similar occurrence or the declaration of a dividend payable in a form other than Shares, the Committee shall have the
authority (but shall not be required) to make, without the need for a consent of any holder of an Award, such adjustments as determined by the Committee to be appropriate, in its discretion, in order to adjust (i) the number and class of
Shares available for grants of Awards, (ii) the number and class of Shares covered by outstanding Awards, (iii) the exercise price per share covered by any Award, (iv) the terms and conditions concerning vesting and exercisability and the
term and duration of the outstanding Awards, and (v) any other terms of the Award that in the opinion of the Committee should be adjusted; provided, however, that any fractional shares resulting from such adjustment shall
be rounded down to the nearest whole share and that the Company shall have no obligation to make any cash or other payment with respect to such fractional shares; and provided further that no adjustment shall be made by
reason of any other issuance of shares by the Company.
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14.2. |
Merger and Sale of Company. In the event of (i) a sale of all or substantially all of the assets of the Company; or (ii) a sale (including an exchange) of all or substantially all of the shares of the Company, or an acquisition
by a shareholder of the Company or by an Affiliate of such shareholder, of all the shares of the Company held by other shareholders or by other shareholders who are not Affiliated with such acquiring party; (iii) a merger, consolidation,
amalgamation or like transaction of the Company with or into another corporation; (iv) a scheme or arrangement for the purpose of effecting such sale, merger or amalgamation; or (v) such other transaction or set of circumstances that is
determined by the Committee, in its discretion, to be a transaction having a similar or comparable effect (all such transactions being herein referred to as a “Merger/Sale”), then, without
derogating from the Board’s and/or Committee’s general power under the Plan and without the Grantee’s consent and action and without any prior notice requirement:
|
14.2.1. |
Unless otherwise determined by the Committee in its sole and absolute discretion, any Award then outstanding shall be assumed or an equivalent Award shall be substituted by the successor corporation in such Merger/Sale or any Parent or
Affiliate thereof as determined by the Board in its discretion (the “Successor Corporation”), under substantially the same terms as the Award;
|
14.2.2. |
In the event that the Awards are not assumed or substituted by an equivalent Award, then the Committee may (but shall not be obligated to), in lieu of such assumption or substitution of the Award and in its sole discretion, (i) provide
for the Grantee to have the right to exercise the Award, or otherwise for the acceleration of vesting of such Award, as to all or part of the Shares, including Shares covered by the Award which would not otherwise be exercisable or
vested, under such terms and conditions as the Committee shall determine, including the cancellation of all unexercised Awards upon closing of the Merger/Sale; and/or (ii) provide for the cancellation of each outstanding Award at the
closing of such Merger/Sale, and payment to the Grantee of an amount in cash as determined by the Committee to be fair in the circumstances (with full authority to determine the method for making such determination, which may be the
Black-Scholes model or any other method, and which determination shall be conclusive and binding on all parties, and which may be zero if the value of the Shares is determined to be less than the Exercise Price), and subject to such terms
and conditions as determined by the Committee. Payments under this provision may be delayed to the same extent that payment of consideration to the holders of the Company’s Shares in connection with the Merger/Sale is delayed as a result
of escrows, earn outs, holdbacks or any other contingencies.
|
14.2.3. |
Notwithstanding the foregoing, in the event of a Merger/Sale, the Committee may determine, in its sole discretion, that upon completion of such Merger/Sale, the terms of any Award be otherwise amended, modified or terminated, as the
Committee shall deem in good faith to be appropriate, and if an Option Award, that the Option Award shall confer the right to purchase or receive any other security or asset, or any combination thereof, or that its terms be otherwise
amended, modified or terminated, as the Committee shall deem in good faith to be appropriate. Neither the authorities and powers of the Committee under this Section 14.2, nor the exercise or implementation thereof, shall (i) be restricted
or limited in any way by any adverse consequences (tax or otherwise) that may result to any holder of an Award, and (ii) as, inter alia, being a feature of the Award upon its grant, be deemed to
constitute a change or an amendment of the rights of such holder under the Plan, nor shall any such adverse consequences (as well as any adverse tax consequences that may result from any tax ruling or other approval or determination of
any relevant tax authority) be deemed to constitute a change or an amendment of the rights of such holder under the Plan that requires the consent of such holder to such change.
|
14.2.4. |
The Committee need not take the same action with respect to all Awards or with respect to all Service Providers. The Committee may take different actions with respect to the vested and unvested portions of an Award.
|
14.3. |
Reservation of Rights. Except as expressly provided in this Section 14, the Grantee of an Award hereunder shall have no rights by reason of any subdivision or consolidation of shares of any class or the payment of any stock
dividend (bonus shares), any other increase or decrease in the number of shares of any class or by reason of any dissolution, liquidation, Merger/Sale, or consolidation, divestiture or spin-off of assets or shares of another company. Any
issue by the Company of shares of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number, type or price of shares subject to
an Award. The grant of an Award pursuant to the Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structures or to merge or to
consolidate or to dissolve, liquidate or sell, or transfer all or part of its business or assets or engage in any similar transactions.
|
15. |
NON-TRANSFERABILITY OF AWARDS; SURVIVING BENEFICIARY.
|
15.1. |
All Awards granted under the Plan shall not be transferable otherwise than by will or by the laws of descent and distribution, unless otherwise determined by the Board or under the Plan, provided that with respect to Shares issued upon
exercise of Options, the restrictions on transfer shall be the restrictions referred to in Section 16 ('Conditions upon Issuance of Shares') hereof. Awards
may be exercised or otherwise realized, during the lifetime of the Grantee, only by the Grantee or by his guardian or legal representative, to the extent provided for herein. Any transfer of an Award not permitted hereunder (including
transfers pursuant to any decree of divorce, dissolution or separate maintenance, any property settlement, any separation agreement or any other agreement with a spouse) and any grant of any interest in any Award to, or creation in any
way of any interest in any Award by, any party other than the Grantee shall be null and void and shall not confer upon any party or person, other than the Grantee, any rights. A Grantee may file with the Committee a written designation of
a beneficiary on such form as may be prescribed by the Committee and may, from time to time, amend or revoke such designation. If no designated beneficiary survives the Grantee, the executor or administrator of the Grantee's estate shall
be deemed to be the Grantee's beneficiary. Notwithstanding the foregoing, upon the request of the Grantee and subject to Applicable Law the Committee, at its sole discretion, may permit the Grantee to transfer the Award to a family trust.
|
15.2. |
As long as the Shares are held by the Trustee in favor of the Grantee, all rights possessed by the Grantee over the Shares are personal, and may not be transferred, assigned, pledged or mortgaged, other than by will or laws of descent
and distribution.
|
15.3. |
The provisions of this Section 15 shall apply to the Grantee and to any purchaser, assignee or transferee of any Shares.
|
16. |
CONDITIONS UPON ISSUANCE OF SHARES.
|
16.1. |
Legal Compliance. Shares shall not be issued pursuant to the exercise or settlement of an Award, unless the exercise or settlement of such Award and the issuance and delivery of such Shares shall comply with Applicable Laws as
determined by counsel to the Company. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any
Shares hereunder, and the inability to issue Shares hereunder due to non-compliance with any Company policies with respect to the sale of Shares, shall relieve the Company of any liability in respect of the failure to issue or sell such
Shares as to which such requisite authority or compliance shall not have been obtained or achieved. Shares issued pursuant to an Award shall be subject to the Articles of Association of the Company, any shareholders agreement applicable
to all or substantially all of the Company's holders of Shares (regardless of whether or not the Grantee is party to such shareholders agreement) and any other governing documents of the Company, including all policies, manuals and
internal regulations adopted by the Company from time to time, as may be amended from time to time, including any provisions included therein concerning restrictions or limitations on transferability of Shares (such as, but not limited
to, right of first refusal and lock up/market stand-off) or grant of any rights with respect thereto and any provisions concerning restrictions on the use of inside information and other provisions deemed by the Company to be appropriate
in order to ensure compliance with Applicable Laws, statutes and regulations.
|
16.2. |
Investment Representations. As a condition to the exercise of an Award, the Company may require the person exercising such Award to represent and warrant at the time of any such exercise that the Shares are being purchased only
for investment and without any present intention to sell or distribute such Shares, and make other representations as may be required under applicable securities laws if, in the opinion of counsel for the Company, such representations are
required, all in form and content specified by the Company.
|
17. |
MARKET STAND-OFF
|
17.1. |
In connection with any underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the Securities Act or equivalent law in another jurisdiction, the Grantee shall not
directly or indirectly, without the prior written consent of the Company or its underwriters, (i) lend, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any Shares acquired under the Plan, or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of the Shares acquired under the Plan, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Shares acquired under the Plan or such other securities, in
cash or otherwise. Such restriction (the “Market Stand-Off”) shall be in effect for such period of time following the effective date of the registration statement relating to such offering as may be
requested by the Company or such underwriters, provided, however, that in any event, such period shall not exceed 180 days following the effective date for the registration statement relating to the Company’s initial public offering or 90
days following the effective date of any other registration statement.
|
17.2. |
In the event of a subdivision of the outstanding share capital of the Company, the declaration and payment of a stock dividend (distribution of bonus shares), the declaration and payment of an extraordinary dividend payable in a form
other than stock, a recapitalization, a reorganization (which may include a combination or exchange of shares or a similar transaction affecting the Company’s outstanding securities without receipt of consideration), a consolidation, a
stock split, a spin-off or other corporate divestiture or division, a reclassification or other similar occurrence, an adjustment in conversion ratio, any new, substituted or additional securities which are by reason of such transaction
distributed with respect to any Shares subject to the Market Stand-Off, or into which such Shares thereby become convertible, shall immediately be subject to the Market Stand-Off.
|
17.3. |
In order to enforce the Market Stand-Off, the Company may impose stop-transfer instructions with respect to the Shares acquired under the Plan until the end of the applicable stand-off period.
|
17.4. |
The underwriters in connection with a registration statement so filed are intended to be third party beneficiaries of this Section 17 and shall have the right, power and authority to enforce the provisions hereof as
though they were a party hereto.
|
17.5. |
The provisions of this Section 17 shall apply to the Grantee and to any purchaser, assignee or transferee of any Shares.
|
18. |
AGREEMENT BY GRANTEE REGARDING TAXES.
|
18.1. |
If the Committee shall so require, as a condition of exercise of an Award, the release of Shares by the Trustee or the expiration of the Restricted Period, a Grantee shall agree that, no later than the date of such occurrence, he will
pay to the Company or make arrangements satisfactory to the Committee and the Trustee (if applicable) regarding payment of any applicable taxes of any kind required by Applicable Law to be withheld or paid.
|
18.2. |
ALL TAX CONSEQUENCES UNDER ANY APPLICABLE LAW WHICH MAY ARISE FROM THE GRANT OF ANY AWARDS OR THE EXERCISE THEREOF, THE SALE OR DISPOSITION OF ANY SHARES GRANTED HEREUNDER OR ISSUED UPON EXERCISE OF ANY AWARD OR FROM ANY OTHER ACTION
OF THE GRANTEE IN CONNECTION WITH THE FOREGOING (INCLUDING WITHOUT LIMITATION ANY TAXES OR COMPULSORY PAYMENTS, SUCH AS SOCIAL SECURITY, PAYABLE BY THE COMPANY IN CONNECTION THEREWITH) SHALL BE BORNE AND PAID SOLELY BY THE GRANTEE, AND
THE GRANTEE SHALL INDEMNIFY THE COMPANY, ITS SUBSIDIARIES AND AFFILIATES AND THE TRUSTEE, AND SHALL HOLD THEM HARMLESS AGAINST AND FROM ANY LIABILITY FOR ANY SUCH TAX OR PENALTY, INTEREST OR INDEXATION THEREON. EACH GRANTEE AGREES TO, AND
UNDERTAKES TO COMPLY WITH, ANY RULING, SETTLEMENT, CLOSING AGREEMENT OR OTHER SIMILAR AGREEMENT OR ARRANGEMENT WITH ANY TAX AUTHORITY IN CONNECTION WITH THE FOREGOING WHICH IS APPROVED BY THE COMPANY.
|
18.3. |
The Company or any Subsidiary or Affiliate may take such action as it may deem necessary or appropriate, in its discretion, for the purpose of or in connection with withholding of any taxes which the Company or any Subsidiary or
Affiliate is required by any Applicable Law to withhold in connection with any Awards (collectively, “Withholding Obligations”). Such actions may include (i) requiring a Grantees to remit to the
Company in cash an amount sufficient to satisfy such Withholding Obligations and any other taxes and compulsory payments, such as social security, payable by the Company in connection with the Award or the exercise thereof; (ii) subject
to Applicable Law, allowing the Grantees to provide Shares to the Company, in an amount that at such time, reflects a value that the Committee determines to be sufficient to satisfy such Withholding Obligations; (iii) withholding Shares
otherwise issuable upon the exercise of an Award at a value which is determined by the Committee to be sufficient to satisfy such Withholding Obligations; or (iv) any combination of the foregoing. The Company shall not be obligated to
allow the exercise of any Award by or on behalf of a Grantee until all tax consequences arising from the exercise of such Award are resolved in a manner acceptable to the Company.
|
18.4. |
Each Grantee shall notify the Company in writing promptly and in any event within ten (10) days after the date on which such Grantee first obtains knowledge of any tax bureau inquiry, audit, assertion, determination, investigation, or
question relating in any manner to the Awards granted or received hereunder or Shares issued thereunder and shall continuously inform the Company of any developments, proceedings, discussions and negotiations relating to such matter, and
shall allow the Company and its representatives to participate in any proceedings and discussions concerning such matters. Upon request, a Grantee shall provide to the Company any information or document relating to any matter described
in the preceding sentence, which the Company, in its discretion, requires.
|
18.5. |
With respect to 102 Non-Trustee Options, if the Grantee ceases to be employed by the Company or any Affiliate, the Grantee shall extend to the Company and/or its Affiliate with whom the Grantee is employed a security or guarantee for
the payment of taxes due at the time of sale of Shares, all in accordance with the provisions of Section 102 of the Ordinance and the Rules.
|
19. |
RIGHTS AS A SHAREHOLDER; VOTING AND DIVIDENDS.
|
19.1. |
Subject to Section 11.7, a Grantee shall have no rights as a shareholder of the Company with respect to any Shares covered by an Award until the Grantee shall have exercised the Award (in the case of an Option or similar Award), paid
the exercise price (to the extent applicable) and become the record holder of the subject Shares. In the case of 102 Option Awards or 3(9) Option Awards (if such Share Options are being held by a Trustee), the Trustee shall have no
rights as a shareholder of the Company with respect to the Shares covered by such Award until the Trustee becomes the record holder for such Shares for the Grantee’s benefit, and the Grantee shall have no rights as a shareholder of the
Company with respect to the Shares covered by the Award until the date of the release of such Shares from the Trustee to the Grantee and the transfer of record ownership of such Shares to the Grantee. No adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash, securities or other property) or distribution of other rights for which the record date is prior to the date on which the Grantee or Trustee (as applicable) becomes the record holder
of the Shares covered by an Award, except as provided in Section 14 hereof.
|
19.2. |
With respect to all Awards issued in the form of Shares hereunder or upon the exercise of Awards hereunder, any and all voting rights attached to such Shares shall be subject to Section 6.9, and the Grantee shall be entitled to receive
dividends distributed with respect to such Shares, subject to the provisions of the Company’s Articles of Association, as amended from time to time, and subject to any Applicable Law.
|
19.3. |
The Company may, but shall not be obligated to, register or qualify the sale of Shares under any applicable securities law or any other applicable law.
|
20. |
NO REPRESENTATION BY COMPANY.
|
21. |
NO RETENTION RIGHTS.
|
22. |
PERIOD DURING WHICH AWARDS MAY BE GRANTED.
|
23. |
TERM OF AWARD.
|
24. |
AMENDMENT AND TERMINATION OF THE PLAN.
|
25. |
APPROVAL.
|
25.1. |
The Plan shall take effect upon its adoption by the Board (the “Effective Date”), except that solely with respect to grants of Incentive Stock Options the Plan shall also be subject to approval,
within one year of the Effective Date, by a majority of the votes cast on the proposal at a meeting or a written consent of shareholders. Failure to obtain approval by the shareholders shall not in any way derogate from the valid and
binding effect of any grant of an Award, which is not an Incentive Stock Option. Upon approval of the Plan by the shareholders of the Company as set forth above, all Incentive Stock Options granted under the Plan on or after the Effective
Date shall be fully effective as if the shareholders of the Company had approved the Plan on the Effective Date. Notwithstanding the foregoing, in the event that approval of the Plan by the shareholders of the Company is required under
Applicable Law, in connection with the application of certain tax treatment or pursuant to applicable stock exchange rules or regulations or otherwise, such approval shall be obtained within the time required under the Applicable Law.
|
25.2. |
The 102 Awards are subject to the approval, if required, of the ITA and receipt by the Company of all approvals thereof.
|
26. |
RULES PARTICULAR TO SPECIFIC COUNTRIES; SECTION 409A.
|
27. |
GOVERNING LAW; JURISDICTION.
|
28. |
NON-EXCLUSIVITY OF THE PLAN.
|
29. |
MISCELLANEOUS.
|
29.1. |
Additional Terms. Each Award awarded under the Plan may contain such other terms and conditions not inconsistent with the Plan as may be determined by the Committee, in its sole discretion.
|
29.2. |
Severability. If any provision of the Plan or any Option Agreement, Restricted Share Agreement, Restricted Share Unit Agreement or any other agreement entered into in connection with an Award shall be determined to be illegal or
unenforceable by any court of law in any jurisdiction, the remaining provisions hereof and thereof shall be severable and enforceable in accordance with their terms, and all provisions shall remain enforceable in any other jurisdiction.
In addition, if any particular provision contained in the Plan or any Option Agreement, Restricted Share Agreement, Restricted Share Unit Agreement or any other agreement entered into in connection with an Award shall for any reason be
held to be excessively broad as to duration, geographic scope, activity or subject, it shall be construed by limiting and reducing such provision as to such characteristic so that the provision is enforceable to fullest extent compatible
with Applicable Law as it shall then appear.
|
29.3. |
Captions and Titles. The use of captions and titles in the Plan or any Option Agreement, Restricted Share Agreement, Restricted Share Unit Agreement or any other agreement entered into in connection with an Award is for the
convenience of reference only and shall not affect the meaning of any provision of the Plan or such agreement.
|
AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT
|
1. CONTRACT ID CODE
|
PAGE OF PAGES
|
|||||||
1
|
3
|
||||||||
2. AMENDMENT/MODIFICATION NO.
|
3. EFFECTIVE DATE
|
4. REQUISITION/PURCHASE REQ. NO.
|
5. PROJECT NO. (If applicable)
|
||||||
P00005
|
See Block 16C
|
OS240516
|
|||||||
6. ISSUED BY
|
CODE
|
ASPR-BARDA
|
7. ADMINISTERED BY (If other than Item 6)
|
CODE
|
ASPR-BARDA01
|
||||
ASPR-BARDA
|
ASPR-BARDA
|
||||||||
200 Independence Ave., S.W.
|
330 Independence Ave, SW, Rm G644
|
||||||||
Room 640-G
|
Washington DC 20201
|
||||||||
Washington DC 20201
|
|||||||||
8. NAME AND ADDRESS OF CONTRACTOR (No., street, county, State and ZIP Code)
|
(x)
|
9A. AMENDMENT OF SOLICITATION NO.
|
|||||||
MEDIWOUND LTD 1477616
|
|||||||||
MEDIWOUND LTD
|
42 HAYARKON
|
9B. DATED (SEE ITEM 11)
|
|||||||
42 HAYARKON
|
|||||||||
YAVNE 00812
|
x
|
10A. MODIFICATION OF CONTRACT/ORDER NO.
|
|||||||
HHSO100201500035C
|
|||||||||
10B. DATED (SEE ITEM 13)
|
|||||||||
CODE 1477616
|
FACILITY CODE
|
09/29/2015
|
|||||||
11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS
|
☐
|
The above numbered solicitation is amended as set forth in Item 14. The hour and date specified for receipt of Offers ☐ is extended. ☐ is not extended.
|
Offers must acknowledge receipt of this amendment prior to the hour and date specified in the solicitation or as amended , by one of the following methods: (a) By
completing Items 8 and 15, and returning ________ copies of the amendment; (b) By acknowledging receipt of this amendment on each copy of the offer submitted ; or (c) By separate letter or telegram which includes a reference to the
solicitation and amendment numbers. FAILURE OF YOUR ACKNOWLEDGEMENT TO BE RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER. If by virtue of this amendment
you desire to change an offer already submitted , such change may be made by telegram or letter, provided each telegram or letter makes reference to the solicitation and this amendment, and is received prior to the opening hour and date
specified.
|
12. ACCOUNTING AND APPROPRIATION DATA (If required)
|
Net Increase:
|
$20,784,789.00
|
|
See Schedule
|
|||
13. THIS ITEM ONLY APPLIES TO MODIFICATION OF CONTRACTS/ORDERS. IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.
|
|||
CHECK ONE
|
A. THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority) THE CHANGES SET
FORTH IN ITEM 14 ARE MADE IN THE CONTRACT ORDER NO. IN ITEM 10A.
|
||
B. THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE ADMINISTRATIVE CHANGES (such
as changes in paying office, appropriation date, etc.) SET FORTH IN ITEM 14, PURSUANT TO THE AUTHORITY OF FAR 43.103(b).
|
|||
X
|
C. THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO AUTHORITY OF:
FAR 1.602-1 and Mutual Agreement of All Parties, FAR Changes Clauses Sections 52.243-02
|
||
D. OTHER (Specify type of modification and authority)
|
|||
E. IMPORTANT: Contractor ☐ is not. ☒ is required to sign this document and return 1 copies to the issuing office.
|
Funds Obligated Prior to this Modification
|
$72,096,067
|
Funds Obligated with mod #05
|
$20,784,789
|
Total Funds Obligated to Date
|
$92,880,856
|
15A. NAME AND TITLE OF SIGNER (Type or print)
|
16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or print)
|
||
Sharon Malka, CEO Yaron Meyer, General Counsel
|
MATTHEW A. ROSE
|
||
15B. CONTRACTOR/OFFEROR
|
15C. DATE SIGNED
|
16B. UNITED STATES OF AMERICA
|
16C. DATE SIGNED
|
/s/Sharon Malka /s/Yaron Meyer MediWound Ltd.
|
5/24/2019
|
/s/ Matthew Rose
|
05/24/2019
|
(Signature of person authorized to sign)
|
(Signature of Contracting Officer)
|
NSN 7540-01-152-8070
|
STANDARD FORM 30 (REV. 10-83)
|
Previous edition unusable
|
Prescribed by GSA
|
FAR (48 CFR) 53.243
|
CONTINUATION SHEET
|
REFERENCE NO. OF DOCUMENT BEING CONTINUED
|
PAGE OF
|
|
HHSO100201500035C/P00005
|
2
|
3
|
ITEM NO.
(A)
|
SUPPLIES/SERVICES
(B)
|
QUANTITY
(C)
|
UNIT
(D)
|
UNIT PRICE
(E)
|
AMOUNT
(F)
|
Expiration date: July 31, 2023
|
|||||
(Please see Continuation Sheet)
|
|||||
Except as provided herein, all terms and conditions of the contract remains unchanged Delivery Location Code: HHS/OS/ASPR
|
|||||
HHS/OS/ASPR
|
|||||
200 C St SW
|
|||||
WASHINGTON DC 20201 US
|
|||||
Period of Performance: 09/29/2015 to 07/31/2023
|
|||||
Change Item 1 to read as follows(amount shown is the obligated amount):
|
|||||
1 |
ASPR-15-08828 -- CLIN 0001 Advanced development studies for NexoBrid
|
20,784,789.00
|
|||
Delivery: 10/05/2015
|
|||||
Amount: $23,955,661.00
|
|||||
Accounting Info:
|
|||||
2015.1990002.26201 Appr. Yr.: 2015 CAN: 1990002 Object Class: 26201
|
|||||
Funded: $0.00
|
|||||
Delivery: 07/10/2017
|
|||||
Amount: $6,220,973.00
|
|||||
Accounting Info:
|
|||||
2017.1990007.25106 Appr. Yr.: 2017 CAN: 1990007 Object Class: 25106
|
|||||
Funded: $0.00
|
|||||
Delivery: 05/12/2019
|
|||||
Amount: $20,784,789.00
|
|||||
Accounting Info:
|
|||||
2019.1990051.25106 Appr. Yr.: 2019 CAN: 1990051 Object Class: 25106
|
|||||
Funded: $20,784,789.00
|
|||||
NSN 7540-01-152-8067
|
OPTIONAL FORM 336 (4-86)
|
Sponsored by GSA
|
|
FAR (48 CFR) 53.110
|
Contract Number HHSO100201500035C
|
page 3 of 3
|
Modification No: 05
|
|
(Continuation Sheet)
|
Continuation Sheet
|
Contract No: HHSO100201500035C
Modification No: 05 |
A. |
ADD SUPPLEMENTAL FUNDS TO BASE CLIN 0001
|
1. |
Amend CLIN 0001 and provide additional funding in the amount of $20,784,789 to bring the total to $50,961,423
|
2. |
Update Section B.3 in accordance with Contractor’s proposal by replacing the CLIN 0001 with the table below :
|
CLIN
|
Period of
Performance |
Supplies/Services
|
Total Est. Cost
|
Fixed Fee
(7%) |
Total Cost Plus
Fixed Fee |
CLIN 0001
|
09/28/2015-11/15/2022
|
Licensure, approval, and clearance of product through the FDA
|
$47,893,883
|
$3,067,540
|
$50,961,423 (Funded)
|
a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b. |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c. |
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d. |
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has
materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
|
a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to
adversely affect the company’s ability to record, process, summarize and report financial information; and
|
b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial
reporting.
|
a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b. |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c. |
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
|
d. |
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the
company’s internal control over financial reporting; and
|
a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report
financial information; and
|
b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
|
Tel Aviv, Israel
February 25, 2020
|
/s/ KOST, FORER, GABBAY & KASIERER
KOST, FORER, GABBAY & KASIERER
A Member of Ernst & Young Global
|
|