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General

9 Months Ended

Sep. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

NOTE 1:-

GENERAL

Wize Pharma, Inc. (the “Company” or “Wize”) was incorporated in the State of Delaware.

On November 16, 2017, the Company completed the acquisition of Wize Pharma Ltd., an Israeli company (“Wize Israel”) by way of a reverse triangular merger.

Wize Israel is a clinical-stage biopharmaceutical company currently focused on the treatment of ophthalmic disorders, including dry eye syndrome (“DES”).

Commencing August 30, 2016, Wize Israel manages most of its activity through OcuWize Ltd., a wholly-owned Israeli subsidiary which manages and develops most of the Company’s activity under the License Agreement.

In May 2015, Wize Israel entered into an Exclusive Distribution and Licensing Agreement (as amended, the “License Agreement”) with Resdevco Ltd. (“Resdevco”), whereby Resdevco granted to Wize Israel an exclusive license to purchase, market, sell and distribute a formula known as LO2A (“LO2A”) in the United States and China as well as a contingent right to do the same in other countries. LO2A is a drug developed for the treatment of DES, and other ophthalmological illnesses, including Conjunctivochalasis (“CCH”) and Sjögren’s syndrome (“Sjögren’s”). Pursuant to the LO2A License Agreement, Wize Israel is required to pay Resdevco royalties for sales in the licensed territories, payable on a semi-annual basis, subject to making certain minimum royalty payments as set forth in the LO2A License Agreement. In January 2019, the Company paid Resdevco royalties in the amount of $150.

Pursuant to the License Agreement (as amended), the royalties payable by Wize Israel to Resdevco shall be $150,000 per year through 2021. A one-time payment to Resdevco by Wize Israel in an amount of $650,000 shall be due no later than the second anniversary of the receipt of FDA approval (the “Deferred Amount”); however, following FDA approval, if annual royalties due to Resdevco by Wize Israel exceed the Minimum Royalties (as defined in the License Agreement), an amount equal to 50% of such excess shall be added towards settlement of the Deferred Amount. As to royalty payments, Resdevco shall be entitled to the greater of $.60, or a percentage of revenues, not to exceed 10%, from sales made in the United States and other countries, excluding Israel, China and Ukraine, but not less than the Minimum Royalties.

The Company has determined not to pursue currently any activities outside the USA until the Company will obtain from the inventor satisfactory registration file including DES and at least one more indication such as CCH or Sjögren’s. The Company seeks to approve a proposed regulatory strategy acceptable to the Chinese market based on the regulatory files provided.

Going concern uncertainty and management plans:

The Company has not yet generated any material revenues from its current operations, and therefore is dependent upon external sources for financing its operations. As of September 30, 2019, the Company has an accumulated deficit of $32,759.

In addition, in the interim periods and year ended September 30, 2019 and December 31, 2018, respectively, the Company reported operating losses and negative cash flows from operating activities.

Furthermore, unless the Company can extend the maturity date, or obtain additional financing, the convertible loans in the aggregate principal amount of $1,353 (discussed in Note 4) will become due on November 30, 2019.

Management considered the significance of such conditions in relation to the Company’s ability to meet its current and future obligations and determined that such conditions raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying Financial Statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

Until such time as the Company generates sufficient revenue to fund its operations (if ever), the Company plans to finance its operations through the sale of equity or equity-linked securities and/or debt securities and, to the extent possible, refinance short-term and long-term loans. There can be no assurance that the Company will succeed in obtaining the necessary financing to continue its operations as a going concern.

Risk factors:

As of September 30, 2019, the Company had an accumulated deficit of $32,759. The Company has historically incurred net losses and is not able to determine whether or when it will become profitable, if ever. To date, the Company has not commercialized any products or generated any revenues from product sales and accordingly it does not have a revenue stream to support its cost structure. The Company’s losses have resulted principally from costs incurred in development and discovery activities.

The Company expects to continue to incur losses for the foreseeable future, and these losses will likely increase as it:

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initiates and manages pre-clinical development and clinical trials for LO2A;

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seeks regulatory approvals for LO2A;

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implements internal systems and infrastructures;

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seeks to license additional technologies to develop;

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pays royalties related to the License Agreement;

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hires management and other personnel; and

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moves towards commercialization.

No certainty exists that the Company will be able to complete the development of LO2A for CCH, Sjögren’s or any other ophthalmic disorder, due to financial, technological or other difficulties. If LO2A fails in clinical trials or does not gain regulatory clearance or approval, or if LO2A does not achieve market acceptance, the Company may never become profitable. Even if the Company does achieve profitability, it may not be able to sustain or increase profitability on a quarterly or annual basis or to develop the cannabis drug with Cannabics (see Note 5b).

The Company’s inability to achieve and then maintain profitability would negatively affect its business, financial condition, results of operations and cash flows. Moreover, the Company’s prospects must be considered in light of the risks and uncertainties encountered by an early-stage company and in highly regulated and competitive markets, such as the biopharmaceutical market, where regulatory approval and market acceptance of its products are uncertain. There can be no assurance that the Company’s efforts will ultimately be successful or result in revenues or profits.