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Share Capital

9 Months Ended

Sep. 30, 2020

Equity [Abstract]

NOTE 5 - SHARE CAPITAL

Share Capital Developments:

As of September 30, 2020 and December 31, 2019, the Company had 7,108,133 shares and 7,185,628 shares of common stock issued and outstanding, respectively.

On January 14, 2019, the Company entered into a Securities Purchase Agreement with an accredited institutional investor providing for the issuance and sale by the Company to the purchaser of an aggregate of (i) 330,000 shares of the Company’s common stock, at a purchase price per share of $6.50 and (ii) 125,323 pre-funded warrants each to purchase one share of common stock, at a purchase price per Pre-Funded Warrant of $6.49. The gross proceeds to the Company were approximately $3,000 before deducting placement agent fees and other offering expenses of approximately $688. The closing of the offering took place on January 15, 2019. The pre-funded warrants were exercised in full in January 2019. As part of the offering the company issued to the underwriter 22,767 warrants for 3.5 years with an exercise price of $8.125 for total value of $165.

On January 15, 2019, the Company entered into a Securities Purchase Agreement with certain accredited institutional investors providing for the issuance and sale by the Company to the purchasers of an aggregate of 590,000 shares of the Company’s common stock, at a purchase price per share of $10.00. The gross proceeds to the Company were approximately $5,900 before deducting placement agent fees and other offering expenses of approximately $720. The closing of the offering took place on January 17, 2019. As part of the offering the company issued to the underwriter 29,500 warrants for 3.5 years with exercise price of $12.50 for total value of $221.

On January 23, 2019 the Company entered into a Securities Purchase Agreement with accredited institutional investors providing for the issuance and sale by the Company to the purchasers of an aggregate of 250,000 shares of the Company’s common stock, at a purchase price per share of $9.875. The investors also purchased warrants to purchase an aggregate of up to 250,000 shares of the Company’s common stock, at a purchase price per warrant of $0.125. The warrants were exercisable for 1 year and had an exercise price of $10.00 per share, for a total value of $2,019. The gross proceeds to the Company from the sale of the shares and warrants were approximately $2,500 before deducting placement agent fees and other offering expenses of approximately $370. The closing of the offering took place on January 25, 2019. As part of the offering the company issued to the underwriter 12,500 warrants for 1 year with an exercise price of $12.50 for total value of $99.

On December 25, 2019 the Company entered into a Securities Purchase Agreement with accredited institutional investors providing for the issuance and sale by the Company to the purchasers of an aggregate of 912,858 shares of the Company’s common stock, at a purchase price per share of $10.50. The gross proceeds to the Company were approximately $9,585 before deducting placement agent fees and other offering expenses of approximately $1,090. The closing of the offering took place on December 27, 2019. As part of the offering the Company issued to the underwriter 45,643 warrants for 3.5 years with an exercise price of $13.125 for total value of $371.

On December 27, 2019 the Company entered into a Securities Purchase Agreement with accredited institutional investors providing for the issuance and sale by the Company to the purchasers of an aggregate of 952,383 shares of the Company’s common stock, at a purchase price per share of $10.50. The gross proceeds to the Company were approximately $10,000 before deducting placement agent fees and other offering expenses of approximately $1,010. The closing of the offering took place on December 30, 2019. As part of the offering the Company issued to the underwriter 47,619 warrants for 3.5 years with an exercise price of $13.125 for total value of $366.

On December 30, 2019 the Company entered into a Securities Purchase Agreement with accredited institutional investors providing for the issuance and sale by the Company to the purchasers of an aggregate of 900,901 shares of the Company’s common stock, at a purchase price per share of $11.10. The gross proceeds to the Company were approximately $10,000 before deducting placement agent fees and other offering expenses of approximately $1,010. The closing of the offering took place on December 31, 2019. As part of the offering the Company issued to the underwriter 45,045 warrants for 3.5 years with an exercise price of $13.875 for total value of $343.

Employee Stock Option Grants

On January 21, 2019, the board of directors approved a grant of 11,630 stock options to purchase an aggregate of up to 11,630 shares of common stock to certain of its directors, at an exercise price per share of $8.60. The stock options vest over a period of 3 years as outlined in the option agreements. As a result, the Company recognized compensation expenses as of September 30, 2020 and 2019 in the total amount of $19 and $37, respectively, included in general and administrative expenses.

On August 12, 2019, the board of directors approved a grant of 17,503 stock options to purchase an aggregate of up to 17,503 shares of common stock to certain of its employees, at an exercise price per share of $5.95. The stock options vest over a period of 3 years as outlined in the option agreements. As a result, the Company recognized compensation expenses as of September 30, 2020 and 2019 in the total amount of $25 and $4, respectively, included in general and administrative expenses.

On October 23, 2019, the board of directors approved a grant of 19,760 stock options to purchase an aggregate of up to 19,760 shares of common stock to certain of its directors, at an exercise price per share of $5.06. The stock options vest over a period of 3 years as outlined in the option agreements. As a result, the Company recognized compensation expenses as of September 30, 2020 and 2019 in the total amount of $21 and $6, respectively, included in general and administrative expenses.

On February 25, 2020, the board of directors approved a grant of 166,666 stock options to purchase an aggregate of up to 166,666 shares of common stock to Mr. Harel Gadot, the Company’s Chairman of the Board, President and CEO, at an exercise price per share of $9.64. The stock options vest over a period of 1 years as outlined in the option agreements. As a result, the Company recognized compensation expenses as of September 30, 2020 and 2019 in the total amount of $869 and $0, respectively, included in general and administrative expenses.

On July 14, 2020, the board of directors approved a grant of 31,493 stock options to purchase an aggregate of up to 31,493 shares of common stock to certain of its directors, at an exercise price per share of $6.16. The stock options vest over a period of 3 years as outlined in the option agreements. As a result, the Company recognized compensation expenses as of September 30, 2020 and 2019 in the total amount of $12 and $0, respectively, included in general and administrative expenses.

A summary of the Company’s option activity related to options to employees and directors, and related information is as followed:

		As of September 30, 2020
		Number of stock options				Weighted average exercise price

Outstanding as of December 31, 2019			371,360			$	9.19
Granted			198,159				9.64
Exercise			(965	)			-
Forfeited			-				-
Cancelled			(8,818	)			-
Outstanding as of September 30, 2020.			559,736			$	9.17

Vested at end of period			318,898			$	9.16

		For the Year ended December 31, 2019
		Number of stock options				Weighted average exercise price

Outstanding as of December 31, 2018.			398,308			$	11.50
Granted			48,893				6.20
Forfeited			(28,690	)			-
Cancelled			(47,151	)			-
Outstanding as of December 31, 2019			371,360			$	9.19

Vested at end of period			270,827			$	8.48

The intrinsic value is calculated as the difference between the fair market value of the common stock and the exercise price, multiplied by the number of in-the-money stock options on those dates that would have been received by the stock option holders had all stock option holders exercised their stock options on those dates as of September 30, 2020 and 2019, respectively.

As of September 30, 2020, and 2019, the aggregate intrinsic value of the outstanding options is $854 and $108 respectively, and the aggregate intrinsic value of the exercisable options is $763 and $108, respectively.

As of September 30, 2020, there were approximately $1,662 of total unrecognized compensation costs, net of expected forfeitures, related to unvested share-based compensation awards granted under the Share Incentive Plan. The costs are expected to be recognized over a weighted average period of 0.86 years

The stock options outstanding as of September 30, 2020 and December 31, 2019, summarized by exercise prices, are as follows:

Exercise price $				Stock options outstanding as of September 30, 2020				Stock options outstanding as of December 31, 2019				Weighted average remaining contractual life – years as of September 30, 2020				Weighted average remaining contractual life – years as of December 31, 2019				Stock options exercisable as of September 30, 2020				Stock options exercisable as of December 31, 2019

	4.20				77,846				77,846				5.3				6.0				77,846				77,846
	6.16				31,492				-				3.0				-				-				-
	15.75				131,007				133,546				7.0				7.8				117,544				90,641
	8.60				9,304				11,630				9.2				9.9				6,512				5,515
	9.00				10,000				10,000				8.0				8.8				7,000				4,750
	9.64				166,666				-				-				-				-				-
	5.95				17,503				17,503				9.0				9.7				7001				-
	5.06				15,808				19,760				9.1				9.8				5136				-
	15.30				38,533				38,533				7.3				8.0				36,282				29,533
	(*)				61,577				62,542				6.3				6.8				61,577				62,542
					559,736				371,360				7.8				8.3				318,898				270,827

(*) Less than $0.01.

Compensation expense recorded by the Company for its stock-based employee compensation awards in accordance with ASC 718-10 for the nine months ended September 30, 2020 and 2019 was $1,468 and $906, respectively.

The grant date fair values of stock options granted in the years ended September 30, 2020 and 2019 were estimated using the Black-Scholes valuation model with the following:

		As of September 30, 2020				Year ended December 31, 2019

Expected volatility			134.81	%			132.63%-144.4%
Risk-free interest			1.62	%			1.49%-2.62%
Dividend yield			0	%			0	%
Expected life of up to (years)			6				5.3

Warrants

The remaining outstanding warrants and terms as of September 30, 2020 and December 31, 2019 are as follows:

Issuance date		Outstanding as of September 30, 2020				Outstanding as of December 31, 2019				Exercise Price				Exercisable as of September 30, 2020				Exercisable Through

Series A (2013) (*)			183				183			$	2,754.00				183			April 9, 2023
Series A (2015) (*)			-				683			$	1,377.00				-			April 30, 2020
Series B (2016) (*)			2,770				2,770			$	40.50				2,770			March 14, 2022
Warrant to underwriters 1.2019			8,082				22,767			$	8.13				8,082			July 14, 2022
Warrant to underwriters 1.2019			29,500				29,500			$	12.50				29,500			July 15, 2022
Warrant to underwriters 1.2019			-				12,500			$	12.50				-			January 15, 2020
Warrant to underwriters 12.2019			45,643				45,643			$	13.13				45,643			June 25, 2023
Warrant to underwriters 12.2019			47,619				47,619			$	13.13				47,619			June 27, 2023
Warrant to underwriters 12.2019			45,045				45,045			$	13.88				45,045			June 30, 2023

(*) Prior to January 1, 2019, warrants with non-standard anti-dilution provisions (referred to as down round protection) were classified as liabilities and re-measured each reporting period. On January 1, 2019, the Company adopted the provisions of ASU 2017-11, which indicates that a down round feature no longer precludes equity classification when assessing whether an investment is indexed to an entity’s own stock. The Company used a full retrospective approach to adoption and restated its financial statements as of the earliest period presented. The cumulative effect of adoption of ASU 2017-11 resulted in an adjustment to accumulated deficit as of January 1, 2018 of $20 with a corresponding adjustment to additional paid-in capital.

In December 2019, 125,000 outstanding warrants at an exercise price per share of $10.00, were exercised on a “net exercise” or “cashless” basis into 61,677 shares of common stock, and 125,000 outstanding warrants at an exercise price per share of $10.00, were exercised on a “net exercise” or “cashless” basis into 50,143 shares of common stock. All of such warrants were issued in January 2019.

In August 2020, 14,685 outstanding warrants at an exercise price per share of $8.125, were exercised on a “net exercise” or “cashless” basis into 4,873 shares of common stock.