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Shareholders' Equity

12 Months Ended

Dec. 31, 2020

Stockholders' Equity Note [Abstract]

SHAREHOLDERS’ EQUITY

NOTE 8 - SHAREHOLDERS’ EQUITY:

a. Share capital

Each holder of the Company’s ordinary shares is entitled to one vote. The holders of ordinary shares are also entitled to receive dividends whenever funds are legally available, and declared by the Company’s Board of Directors (the “Board”). Since inception, the Company has not declared any dividends.

Issuance of Equity

Ordinary Share issuances prior to the APA

During the year ended December 31, 2018, Nanox PLC entered into several agreements with third party investors, pursuant to which it raised an aggregate amount of $3,684 thousand at a purchase price of $2.21 per share.

On June 17, 2019, Nanox PLC issued 2,262,443 ordinary shares to third party investors for an aggregate purchase price of approximately $5,000 thousand. Certain investors were also granted warrants to acquire 2,262,443 of ordinary shares at an exercise price of $20.87 per share.

Additionally, during 2019, Nanox PLC entered into several agreements with certain third-party investors, pursuant to which it raised an aggregate amount of $4,038 thousand, net of issuance costs, at a purchase price of $2.21 per share.

Ordinary Share issuances after the APA

On December 31, 2019, the Company issued 312,500 ordinary shares to a third-party investor for an aggregate purchase price of approximately $5 million.

During the year 2020, the Company issued an aggregate of 4,624,500 ordinary shares to the certain investors, at a price per share of $16.00, for an aggregate purchase price of approximately $74 million (the net proceeds were approximately $71 million after deducting issuance costs).

In August 2020, the Company completed an initial public offering (“IPO”) on the Nasdaq Global Market (the “Nasdaq”), in which it issued 9,178,744 ordinary shares at a price per share of $18. During August 2020, the underwriters exercised their over-allotment option and purchased an additional 1,376,812 ordinary shares at the same price per share. The proceeds received from the IPO were $190 million (the net proceeds were approximately $169 million after deducting underwriting commissions and other offering expenses).

Settlement of Related Party Liability

Pursuant to the Asset Purchase Agreement between Nanox IL and Nanox PLC, as more fully described in the Company’s annual financial statements, in January 2020, the Company issued 1,109,245 ordinary shares to Nanox PLC with a purchase price of $12.00 per share, which reflected a discount of 25% from the price of the last financing round of the Company. As a result, the related party liability was settled into shareholders’ equity.

b. Share based compensation

On September 3, 2019, the Company’s Board resolved to adopt an equity incentive plan (the “Plan”). Based on such Plan, each option will be exercisable for one ordinary share of the Company and will become exercisable at such terms and during such periods, as the Board shall determine. Pursuant to the Plan (and further increase of option pool approved by the Board), 8,041,936 ordinary shares of NIS 0.01 par value of the Company are reserved for issuance upon the exercise of the same amount of awards to be granted to some of the Company’s employees, directors and consultants. As of December 31, 2020, 2,978,247 ordinary shares reserved for the equity incentive plan.

The Board also approved the Plan for the purpose of selecting the capital gains tax track, under Section 102 of the Israeli Income Tax Ordinance, for options granted to the Company’s Israeli employees.

1) Share-based compensation to non-employees

The following table summarizes share-based awards to non-employees for the years ended December 31, 2020 and December 31, 2019:

		Year ended December 31,								Year ended December 31,
		2020								2019
		Number of				Weighted				Number of				Weighted
		share-based				average				share-based				average
		payment				exercise				payment				exercise
		awards				price				awards				price
Outstanding at beginning of year			3,410,406			$	1.89				1,592,874			$	1.32
Changes during the year:
Granted			1,327,957				13.70				2,271,698			$	2.77
Exercised			*(1,267,012	)			8.94				(454,166	)		$	0.3
Forfeited			-				-				-				-
Expired			-				-				-				-
Cancelled			(98,725	)			1.92				-				-
Outstanding at end of year			3,372,626				5.27				3,410,406			$	1.89
Exercisable at end of year			2,191,042				5.67				1,830,809			$	3.79

* Out of which 1,027,151 awards were exercised on a cashless basis.

The fair value of each granted award is estimated at the date of grant using the Black- Scholes option-pricing model. The assumptions used for the years ended December 31, 2020 and 2019 are as follows:

		2020				2019
Dividend yield			0				0
Expected volatility			57.34%-44.40%				41.11% - 50.59%
Risk-free interest rate			0.27%-1.61%				1.55%-1.76%
Contractual term (years)			5-10				0.50 – 10.00

The expected volatility is based on the historical volatility of comparable companies.

The risk-free interest rate assumption is based on observed interest rates appropriate for the expected term of the awards granted in dollar terms.

The Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. Accordingly, as to ordinary course options granted, the expected term was determined using the simplified method, which takes into consideration the option’s contractual life and the vesting periods (for non-employees, the expected term is equal to the option’s contractual life).

The following table summarizes information concerning outstanding and exercisable awards as of December 31, 2020 and 2019:

December 31, 2020
Awards outstanding												Awards exercisable
				Number of				Weighted				Number of				Weighted
				awards				average				award				average
				outstanding				remaining				exercisable				remaining
Exercise				at end of				contractual				at end of				contractual
price				year				life (years)				year				life (years)
$	0.01				186,815				0.33				186,815				0.33
$	1.92				269,714				1.18				269,714				1.18
$	2.21				2,191,349				6.22				1,188,914				6.22
$	16.00				444,748				8.89				283,933				8.89
$	18.00				260,000				3.86				260,000				3.86
$	30.93				20,000				9.81				1,666				9.81

December 31, 2019
Awards outstanding												Awards exercisable
				Number of				Weighted				Number of				Weighted
				awards				average				awards				average
				outstanding				remaining				exercisable				remaining
Exercise				at end of				contractual				at end of				contractual
price				year				life (years)				year				Life (years)
$	0.01				186,815				1.33				186,815				1.33
$	1.92				472,606				1.81				472,606				1.81
$	2.21				2,727,028				5.27				1,163,402				5.27
$	20.87				23,957				5.69				7,986				5.69

2) Share-based compensation to employees, officers and directors

During 2020, the Company granted to certain employees, officers and directors awards to purchase 730,734 of the Company’s ordinary shares for an average exercise price of $13.53.

		Year ended December 31,								Year ended December 31,
		2020								2019
			Number of				Weighted				Number of				Weighted
			share-based				average				share-based				average
			payment awards				exercise price				payment awards				exercise price
Outstanding at beginning of year			1,667,267			$	2.21				1,667,267			$	2.21
Changes during the year:
Granted			730,734			$	13.53				-				-
Exercised			-				-				-				-
Forfeited			-				-				-				-
Expired			-				-				-				-
Cancelled			(16,876	)		$	2.21				-				-
Outstanding at end of year			2,381,125			$	4.14				1,667,267				2.21
Exercisable at end of year			1,061,778			$	2.80				450,557				2.21

The fair value of each granted award is estimated at the date of grant using the Black- Scholes option-pricing model. The assumptions used as of December 31, 2020 and 2019 are as follows:

		2020				2019
Dividend yield			0				0
Expected volatility			45.11%-55.97%				45.11%-55.97%
Risk-free interest rate			0.23%-1.61%				0.23%-1.61%
Contractual term (years)			10				10

The expected volatility is based on the historical volatility of comparable companies.

The risk-free interest rate assumption is based on observed interest rates appropriate for the expected term of the awards granted in dollar terms.

The Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. Accordingly, as to ordinary course options granted, the expected term was determined using the simplified method, which takes into consideration the option’s contractual life and the vesting periods.

The following table summarizes information concerning outstanding and exercisable awards as of December 31, 2020 and 2019:

December 31, 2020

Awards outstanding

Awards exercisable

Number of

Weighted

Number of

Weighted

awards

average

awards

average

outstanding

remaining

exercisable

remaining

Exercise

at end of

contractual

at end of

contractual

price

year

life (years)

year

life (years)

$2.21

1,995,625

9.05

1,019,695

9.05

$16.00

205,000

9.62

37,917

9.62

$26.56-$59.20

180,500

9.93

4,167

9.93

December 31, 2019

Awards outstanding

Awards exercisable

Number of

Weighted

Number of

Weighted

awards

average

awards

average

outstanding

remaining

exercisable

remaining

Exercise

at end of

contractual

at end of

contractual

price

year

life (years)

year

life (years)

$2.21

1,667,267

9.90

450,557

9.90

3) Share-based compensation expenses

		Year Ended December 31,
		2020				2019				2018
		(U.S. dollars in thousands)
Research and development			3,384				661				-
Marketing (*)			9,252				617				-
General and administrative			12,145				14,967				115
			24,781				16,245				115

(*) On October 26, 2020, the Company entered into an amendment to a business development agreement (“the Agreement”) dated February 4, 2020 with two service providers pursuant to which the Company paid an aggregate one-time payment of $400 thousand plus VAT and issued to them warrants to purchase an aggregate of 650,000 ordinary shares at an exercise price of $18 per share with a graded vesting ending 10 weeks following the grant date (subject to a standard cashless exercise provision). As a result, the Company recorded an expense of $6.1 million for the warrants granted. The service providers waived any and all past, present and future compensation to which they are or may be entitled pursuant to the Agreement and all activities undertaking on behalf of the Company, including the right to a percentage from future revenues from any of the Company’s systems and the issuance of warrants.

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- References

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- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(e)(1))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI http://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-URI http://asc.fasb.org/topic&trid=2208762

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