Under the terms of the investor warrants and placement agent warrants issued in the April, 2020 Private Placement, the First May 2020
Private Placement and the Second May 2020 Private Placement, a selling shareholder may not exercise the warrants to the extent such exercise would cause such selling shareholder, together with its affiliates, to beneficially own a number of ordinary
shares which would exceed 4.99% or 9.99% of our then outstanding ordinary shares following such exercise, excluding for purposes of such determination ordinary shares not yet issuable upon exercise of the warrants and placement agent warrants which
have not been exercised. The number of shares does not reflect this limitation. The selling shareholders may sell all, some or none of their ordinary shares or investor warrants or placement agent warrants in this offering. See “Plan of
Distribution.”
Selling Shareholder
|
|
Number of Ordinary Shares Owned Prior to Offering
|
|
|
Maximum Number of Ordinary Shares to be Sold Pursuant to this Prospectus
|
|
|
Number of Ordinary Shares Owned After the Offering
|
|
|
Percentage of Ordinary Shares Owned After the Offering
|
|
Armistice Capital Master Fund, Ltd. (1)
|
|
|
7,352,273
|
(2)
|
|
|
6,500,000
|
(3)
|
|
|
852,273
|
(4)
|
|
|
2.7
|
%
|
Sabby Volatility Warrant Master Fund, Ltd. (5)
|
|
|
1,000,000
|
(6)
|
|
|
1,000,000
|
(6)
|
|
|
-
|
|
|
|
|
-
|
Hudson Bay Master Fund Ltd. (7)
|
|
|
1,317,830
|
(8)
|
|
|
833,334
|
(9)
|
|
|
484,496
|
(10)
|
|
|
1.6
|
%
|
Bigger Capital Fund, LP (11)
|
|
|
1,766,547
|
(12)
|
|
|
1,666,667
|
(13)
|
|
|
67,069
|
(14)
|
|
|
*
|
|
District 2 Capital Fund LP (15)
|
|
|
833,334
|
(16)
|
|
|
833,334
|
(16)
|
|
|
-
|
|
|
|
-
|
|
Intracoastal Capital, LLC (17)
|
|
|
2,809,194
|
(18)
|
|
|
2,083,334
|
(19)
|
|
|
725,860
|
(20)
|
|
|
2.3
|
%
|
KBB Asset Management, LLC (21)
|
|
|
833,334
|
(22)
|
|
|
833,334
|
(22)
|
|
|
-
|
|
|
|
-
|
|
Anson Investments Master Fund LP (23)
|
|
|
4,650,863
|
(24)
|
|
|
4,166,667
|
(25)
|
|
|
484,196
|
(26)
|
|
|
1.6
|
%
|
CVI Investments, Inc. (27)
|
|
|
1,413,727
|
(28)
|
|
|
1,250,000
|
(29)
|
|
|
163,727
|
(30)
|
|
|
*
|
|
Michael Vasinkevich (31)
|
|
|
997,675
|
(32)
|
|
|
860,344
|
(33)
|
|
|
137,331
|
(34)
|
|
|
*
|
|
Noam Rubinstein (31)
|
|
|
424,396
|
(35)
|
|
|
422,625
|
(36)
|
|
|
1,771
|
(37)
|
|
|
*
|
|
Craig Schwabe (31)
|
|
|
45,281
|
(38)
|
|
|
45,281
|
(38)
|
|
|
-
|
|
|
|
-
|
|
Charles Worthman (31)
|
|
|
15,546
|
(39)
|
|
|
13,417
|
(40)
|
|
|
2,129
|
(41)
|
|
|
*
|
|
* Denotes less than 1%
(1)
|
Armistice Capital, LLC, the investment manager of Armistice Capital Master Fund Ltd., or Armistice, and Steven J. Boyd, the managing member of Armistice Capital, LLC, hold shared
voting and dispositive power over the ordinary shares held by Armistice. The principal business address of Armistice is c/o Armistice Capital, LLC, 510 Madison Avenue, 7th Floor, New York, NY, 10022.
|
(2)
|
Represents (i) 852,273 ordinary shares issuable upon exercise of previously issued warrants, (ii) 1,500,000 ordinary shares issuable upon exercise of warrants issued in our April 2020 Private
Placement, (iii) 2,500,000 ordinary shares issuable upon exercise of warrants issued in our First May 2020 Private Placement, and (iv) 2,500,000 ordinary shares issuable upon exercise of warrants issued in our Second May 2020
Private Placement.
|
(3)
|
Represents (i) 1,500,000 ordinary shares issuable upon exercise of warrants issued in our April 2020 Private Placement, (ii) 2,500,000 ordinary shares issuable upon exercise of warrants issued
in our First May 2020 Private Placement, and (iii) 2,500,000 ordinary shares issuable upon exercise of warrants issued in our Second May 2020 Private Placement.
|
(4)
|
Represents 852,273 ordinary shares issuable upon exercise of previously issued warrants.
|
(5)
|
Sabby Management, LLC is the investment manager of Sabby Volatility Warrant Master Fund, Ltd., or Sabby VWMF, and shares voting and investment power with respect to these shares
in this capacity. As manager of Sabby Management, LLC, Hal Mintz also shares voting and investment power on behalf of Sabby VWMF. Each of Sabby Management, LLC and Hal Mintz disclaims beneficial ownership over the securities listed
except to the extent of their pecuniary interest therein. The address of principal business office of Sabby VWMF is 10 Mountainview Road, Suite 205, Upper Saddle River, New Jersey 07458.
|
(6)
|
Represents 1,000,000 ordinary shares issuable upon exercise of warrants issued in our April 2020 Private Placement.
|
(7)
|
Hudson Bay Capital Management LP, the investment manager of Hudson Bay Master Fund Ltd., has voting and investment power over these securities. Sander Gerber is the managing
member of Hudson Bay Capital GP LLC, which is the general partner of Hudson Bay Capital Management LP. Each of Hudson Bay Master Fund Ltd. and Mr. Gerber disclaims beneficial ownership over these securities.
|
(8)
|
Represents (i) 484,496 ordinary shares issuable upon exercise of warrants issued in our February 2019 private placement and (ii)
833,334 ordinary shares issuable upon exercise of warrants issued in our April 2020 Private Placement.
|
(9)
|
Represents 833,334 ordinary shares issuable upon exercise of warrants issued in our April 2020
Private Placement.
|
(10)
|
Represents 484,496 ordinary shares issuable upon exercise of warrants issued in our February 2019 private placement.
|
(11)
|
Michael Bigger has the power to vote or dispose of the shares owned by Bigger Capital Fund, LP, or Bigger. The investor’s address is
175 W Carver, Huntington, NY, 11743. Michael Bigger disclaims beneficial ownership over these securities.
|
(12)
|
Represents (i) 416,667 ordinary shares issuable upon exercise of warrants issued in our April 2020 Private Placement, (ii) 416,667 ordinary shares issuable upon exercise of warrants issued in our
First May 2020 Private Placement, (iii) 833,333 ordinary shares issuable upon exercise of warrants issued in our Second May 2020 Private Placement, (iv) 2,983 ordinary shares issuable upon exercise of placement agent warrants
originally issued in our November 2017 private placement and assigned to Bigger prior to the date of this prospectus and (v) 64,086 ordinary shares issuable upon exercise of placement agent warrants originally issued in our
February 2019 private placement and assigned to Bigger prior to the date of this prospectus.
|
(13)
|
Represents (i) 416,667 ordinary shares issuable upon exercise of warrants issued in our April 2020 Private Placement, (ii) 416,667
ordinary shares issuable upon exercise of warrants issued in our First May 2020 Private Placement, and (iii) 833,333 ordinary shares issuable upon exercise of warrants issued in our Second May 2020 Private Placement.
|
(14)
|
Represents (i) 2,983 ordinary shares issuable upon exercise of placement agent warrants originally issued in our November 2017 private placement and assigned to Bigger prior to the date of this
prospectus and (ii) 64,086 ordinary shares issuable upon exercise of placement agent warrants originally issued in our February 2019 private placement and assigned to Bigger prior to the date of this prospectus.
|
(15)
|
Michael Bigger has the power to vote or dispose of the shares owned by District 2 Capital Fund LP. The investor’s address is 175 W Carver, Huntington, New York 11743. Michael Bigger disclaims
beneficial ownership over these securities.
|
(16)
|
Represents (i) 416,667 ordinary shares issuable upon exercise of warrants issued in our April 2020 Private Placement and (ii) 416,667 ordinary shares issuable upon exercise of warrants issued in
our First May 2020 Private Placement.
|
(17)
|
Mitchell P. Kopin, or Mr. Kopin, and Daniel B. Asher, or Mr. Asher, each of whom are managers of Intracoastal Capital, LLC, or Intracoastal, have shared voting control and
investment discretion over the securities reported herein that are held by Intracoastal. As a result, each of Mr. Kopin and Mr. Asher may be deemed to have beneficial ownership (as determined under Section 13(d) of Exchange Act) of
the securities reported herein that are held by Intracoastal.
|
(18)
|
Represents (i) 725,860 ordinary shares issuable upon exercise of previously issued warrants, (ii) 833,334 ordinary shares issuable upon exercise of warrants
issued in connection with our April 2020 Private Placement, and (iii) 1,250,000 ordinary shares issuable upon exercise of warrants issued in our First May 2020 Private Placement.
|
(19)
|
Represents (i) 833,334 ordinary shares issuable upon exercise of warrants issued in connection with our April 2020 Private Placement, and (ii) 1,250,000
ordinary shares issuable upon exercise of warrants issued in our First May 2020 Private Placement.
|
(20)
|
Represents 725,860 ordinary shares issuable upon exercise of previously issued warrants.
|
(21)
|
Steve Segal has the power to vote or dispose of the shares owned by KBB Asset Management, LLC. The investor’s address is 29 Maple Street, Essex Junction, Vermont 05452. Steve
Segal disclaims beneficial ownership over these securities.
|
(22)
|
Represents 833,334 ordinary shares issuable upon exercise of warrants issued in connection with our April 2020 Private Placement.
|
(23)
|
Anson Advisors Inc and Anson Funds Management LP, the Co-Investment Advisers of Anson Investments Master Fund LP, or Anson, hold voting and dispositive power over the Common
Shares held by Anson. Bruce Winson is the managing member of Anson Management GP LLC, which is the general partner of Anson Funds Management LP. Moez Kassam and Amin Nathoo are directors of Anson Advisors Inc. Mr. Winson, Mr. Kassam
and Mr. Nathoo each disclaim beneficial ownership of these Common Shares except to the extent of their pecuniary interest therein. The principal business address of Anson is 190 Elgin Ave; George Town, Grand Cayman.
|
(24)
|
Represents (i) 484,196 ordinary shares issuable upon exercise of warrants issued in connection with our February 2019 private placement, (ii) 833,333 ordinary
shares issuable upon exercise of warrants issued in connection with our April 2020 Private Placement, (iii) 1,666,667 ordinary shares issuable upon exercise of warrants issued in connection with our First May 2020 Private Placement,
and (iv) 1,666,667 ordinary shares issuable upon exercise of warrants issued in our Second May 2020 Private Placement.
|
(25)
|
Represents (i) 833,333 ordinary shares issuable upon exercise of warrants issued in connection with our April 2020 Private Placement, (ii) 1,666,667
ordinary shares issuable upon exercise of warrants issued in connection with our First May 2020 Private Placement, and (iii) 1,666,667 ordinary shares issuable upon exercise of warrants issued in our Second May 2020 Private
Placement.
|
(26)
|
Represents 484,196 ordinary shares issuable upon exercise of warrants issued in connection with our February 2019 private placement.
|
(27)
|
Heights Capital Management, Inc., the authorized agent of CVI Investments, Inc., or CVI, has discretionary authority to vote and dispose of the shares held by CVI and may be
deemed to be the beneficial owner of these shares. Martin Kobinger, in his capacity as Investment Manager of Heights Capital Management, Inc., may also be deemed to have investment discretion and voting power over the shares held by
CVI. Mr. Kobinger disclaims any such beneficial ownership of the shares. CVI Investments, Inc. is affiliated with one or more FINRA members, none of whom are currently expected to participate in the sale pursuant to this prospectus
contained in the registration statement of common shares purchased by CVI.
|
(28)
|
Represents (i) 27,363 ordinary shares, (ii) 136,364 ordinary shares issuable upon exercise of previously issued warrants and (iii) 1,250,000 ordinary shares
issuable upon exercise of warrants issued in connection with our First May 2020 Private Placement.
|
(29)
|
Represents 1,250,000 ordinary shares issuable upon exercise of warrants issued in connection with our First May 2020 Private Placement.
|
(30)
|
Represents (i) 27,363 ordinary shares and (ii) 136,364 ordinary shares issuable upon exercise of previously issued warrants.
|
(31)
|
Referenced person is affiliated with H.C. Wainwright, a registered broker dealer. H.C. Wainwright is a registered broker-dealer and acted as the placement
agent in the April 2020 Private Placement, the First May 2020 Private Placement, and the Second May 2020 Private Placement. The address of H.C. Wainwright & Co., LLC, 430 Park Avenue, New York, NY 10022.
|
(32)
|
Represents (i) 137,331 ordinary shares issuable upon exercise of previously issued placement agent warrants, (ii) 299,250 ordinary shares issuable upon exercise of placement agent warrants
issued in connection with our April 2020 financing, (iii) 336,656 ordinary shares issuable upon exercise of placement agent warrants issued in connection with our First May 2020 Private Placement, and (iv) 224,438 ordinary
shares issuable upon exercise of placement agent warrants issued in our Second May 2020 Private Placement.
|
(33)
|
Represents (i) 299,250 ordinary shares issuable upon exercise of placement agent warrants issued in connection with our April 2020 Private Placement, (ii)
336,656 ordinary shares issuable upon exercise of placement agent warrants issued in connection with our First May 2020 Private Placement, and (iii) 224,438 ordinary shares issuable upon exercise of placement agent warrants
issued in connection with our Second May 2020 Private Placement.
|
(34)
|
Represents 137,331 ordinary shares issuable upon exercise of previously issued placement agent warrants.
|
(35)
|
Represents (i) 1,771 ordinary shares issuable upon exercise of previously issued placement agent warrants, (ii) 147,000 ordinary shares issuable
upon exercise of placement agent warrants issued in connection with our April 2020 Private Placement, (iii) 165,375 ordinary shares issuable upon exercise of placement agent warrants issued in connection with our First May
2020 Private Placement, and (iv) 110,250 ordinary shares issuable upon exercise of placement agent warrants issued in our Second May 2020 Private Placement.
|
(36)
|
Represents (i) 147,000 ordinary shares issuable upon exercise of placement agent warrants issued in connection with our April 2020 Private Placement, (ii)
165,375 ordinary shares issuable upon exercise of placement agent warrants issued in connection with our First May 2020 Private Placement, and (iii) 110,250 ordinary shares issuable upon exercise of placement agent warrants
issued in our Second May 2020 Private Placement.
|
(37)
|
Represents 1,771 ordinary shares issuable upon exercise of previously issued placement agent warrants.
|
(38)
|
Represents (i) 15,750 ordinary shares issuable upon exercise of placement agent warrants issued in connection with our April 2020 Private Placement, (ii)
17,719 ordinary shares issuable upon exercise of placement agent warrants issued in connection with our First May 2020 Private Placement, and (iii) 11,812 ordinary shares issuable upon exercise of placement agent warrants issued
in our Second May 2020 Private Placement.
|
(39)
|
Represents (i) 2,129 ordinary shares issuable upon exercise of previously issued placement agent warrants, (ii) 4,667 ordinary shares issuable upon exercise of placement agent warrants issued in
connection with our April 2020 Private Placement, (iii) 5,250 ordinary shares issuable upon exercise of placement agent warrants issued in connection with our First May 2020 Private Placement, and (iv) 3,500 ordinary shares
issuable upon exercise of placement agent warrants issued in our Second May 2020 Private Placement.
|
(40)
|
Represents (i) 4,667 ordinary shares issuable upon exercise of placement agent warrants issued in connection with our April 2020 Private Placement, (ii) 5,250
ordinary shares issuable upon exercise of placement agent warrants issued in connection with our First May 2020 Private Placement, and (iii) 3,500 ordinary shares issuable upon exercise of placement agent warrants issued in our
Second May 2020 Private Placement.
|
(41)
|
Represents 2,129 ordinary shares issuable upon exercise of previously issued placement agent warrants.
|
DESCRIPTION OF SHARE CAPITAL
The following description of our share capital summarizes certain provisions of our amended articles of association. Such summaries do
not purport to be complete and are subject to, and are qualified in their entirety by reference to, all of the provisions of our amended articles of association, copies of which have been filed as exhibits to the registration statement of which
this prospectus forms a part.
Ordinary Shares
As of June 1, 2020, our authorized share capital consists of 90,000,000 ordinary shares, par value NIS 2.40 per share, of which 30,171,322 are
outstanding.
Memorandum and Articles of Association
Registration Number and Purposes of the Company
Our registration number with the Israeli Registrar of Companies is 51-425981-1. Our purpose as set forth in our amended articles of
association is to engage in any lawful activity.
Voting Rights and Conversion
All ordinary shares have identical voting and other rights in all respects.
Transfer of Shares
Our fully paid ordinary shares are issued in registered form and may be freely transferred under our amended articles of association,
unless the transfer is restricted or prohibited by another instrument, applicable law or the rules of a stock exchange on which the shares are listed for trade. The ownership or voting of our ordinary shares by non-residents of Israel is not
restricted in any way by our amended articles of association or the laws of the State of Israel, except for ownership by nationals of some countries that are, or have been, in a state of war with Israel, according to applicable Israeli law’s
requirements.
Our Board of Directors may, to the extent it deems necessary in its discretion, close the register of shareholders of registration of
transfers of shares for a period determined by the Board of Directors, and no registrations of transfers of shares shall be made by us during any such period during which the register of shareholders is so closed. We shall notify shareholders with
respect to such suspension of registration in such manner as shall be determined by our Board of Directors.
Election of Directors
Under our amended articles of association, our board of directors must consist of not less than four but no more than eleven
directors, including (if any) external directors (within the meaning of the Israeli Companies Law). Pursuant to our amended articles of association, each of our directors will be appointed by a simple majority vote of holders of our voting shares,
participating and voting at an annual general meeting of our shareholders (subject to the special approval requirements under the Israeli Companies Law for the election of external directors, if any). Our ordinary shares do not have cumulative
voting rights for the election of directors.
Each director (other than external directors, if any) will hold office until the next annual general meeting following the annual
general meeting at which they were elected and until his or her successor is elected and qualified, or until the occurrence of certain events, in accordance with the Israeli Companies Law and our amended articles of association, including his or
her earlier resignation, death or removal by a vote of the majority of the voting power of our shareholders at a general meeting of until his or her office expires by operation of law. In addition, our amended articles of association allow our
board of directors to appoint directors (other than external directors) to fill vacancies on the board of directors to serve for a term of office equal to the remaining period of the term of office of the directors(s) whose office(s) have been
vacated.
Dividend and Liquidation Rights
We may declare a dividend to be paid to the holders of our ordinary shares in proportion to their respective shareholdings. Under the
Israeli Companies Law, dividend distributions are determined by the board of directors and do not require the approval of the shareholders of a company unless the company’s articles of association provide otherwise. Our amended articles of
association do not require shareholder approval of a dividend distribution and provide that dividend distributions may be determined by our board of directors.
Pursuant to the Israeli Companies Law, we may declare and pay dividends only if, upon the determination of our board of directors,
there is no reasonable concern that the distribution will prevent us from being able to meet the terms of our existing and foreseeable obligations as they become due. Under the Israeli Companies Law, the distribution amount is further limited to
the greater of retained earnings or earnings generated over the two most recent years legally available for distribution according to our then last reviewed or audited financial statements (less the amount of previously distributed dividends, if
not reduced from the earnings), provided that the date of the financial statements is not more than six months prior to the date of distribution. In the event that we do not have retained earnings or earnings generated over the two most recent
years legally available for distribution, we must seek the approval of the court in order to distribute a dividend. The court may approve our request if it is convinced that there is no reasonable concern that the payment of a dividend will prevent
us from satisfying our existing and foreseeable obligations as they become due.
In the event of our liquidation, after satisfaction of liabilities to creditors, our assets will be distributed to the holders of our
ordinary shares in proportion to the nominal value of their shareholdings. This right, as well as the right to receive dividends, may be affected by the grant of preferential dividend or distribution rights to the holders of a class of shares with
preferential rights that may be authorized in the future.
Exchange Controls
There are currently no Israeli currency control restrictions on remittances of dividends on our ordinary shares, proceeds from the
sale of the shares or interest or other payments to non-residents of Israel, except for shareholders who are subjects of countries that are, or have been, in a state of war with Israel.
Shareholder Meetings
Under Israeli law, we are required to hold an annual general meeting of our shareholders once every calendar year that must be held no
later than 15 months after the date of the previous annual general meeting. All meetings other than the annual general meeting of shareholders are referred to in our amended articles of association as special general meetings. Our board of
directors may call special general meetings whenever it sees fit, at such time and place, within or outside of Israel, as it may determine. In addition, the Israeli Companies Law provides that our board of directors is required to convene a special
general meeting upon the written request of (i) any two of our directors or one-quarter of the serving members of our board of directors; or (ii) one or more shareholders holding, in the aggregate, either (a) 5% or more of our outstanding shares
and 1% of our outstanding voting power or (b) 5% or more of our outstanding voting power.
Furthermore, the Israeli Companies Law requires that resolutions regarding the following matters be approved by our shareholders at a
general meeting:
•
|
amendments to our articles of association;
|
•
|
appointment, terms of service and termination of service of our auditors;
|
•
|
appointment of external directors;
|
•
|
approval of certain related party transactions;
|
•
|
increases or reductions of our authorized share capital;
|
•
|
the exercise of our board of director’s 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 essential for our proper management.
|
Subject to the provisions of the Israeli Companies Law and regulations promulgated thereunder, shareholders entitled to participate
and vote at general meetings are the shareholders of record on a date to be decided by the board of directors, which, as a company listed on an exchange outside Israel, may be between four and 40 days prior to the date of the meeting.
The Israeli Companies Law requires that a notice of any annual general meeting or special general meeting be provided to shareholders
at least 21 days prior to the meeting and if the agenda of the meeting includes, among other things, the appointment or removal of directors, the approval of transactions with office holders or interested or related parties, an approval of a merger
or the approval of the compensation policy, notice must be provided at least 35 days prior to the meeting.
Under the Israeli Companies Law, our shareholders are not permitted to take action via written consent in lieu of a meeting.
Voting rights
Quorum Requirements
Pursuant to our amended articles of association, holders of our ordinary shares have one vote for each ordinary share held on all
matters submitted to a vote before the shareholders at a general meeting. The quorum required for general meetings of our shareholders is at least two shareholders present in person, by proxy or written ballot, who hold or represent between them at
least 25% of the total outstanding voting rights (or if a higher percentage is required by law, such higher percentage), within half an hour of the time fixed for the commencement of the meeting. A meeting adjourned for lack of a quorum is
adjourned either to the same day in the following week at the same time and place or to such day, time and place as specified in the notice of the meeting or to such day, time and place as the chairman of the general meeting shall determine. At the
reconvened meeting, at least two shareholders present in person or by proxy shall constitute a lawful quorum, unless the meeting of shareholders was convened at the demand of shareholders, in which case, the quorum shall be the presence of one or
more shareholders holding at least 5% of our issued share capital and at least one percent of the voting power of our shares, or one or more shareholders with at least 5% of the voting power of our shares.
Vote Requirements
Our amended articles of association provide that all resolutions of our shareholders require a simple majority vote, unless otherwise
required by the Israeli Companies Law or by our amended articles of association. Under the Israeli Companies Law, certain actions require a special majority, including: (i) approval of an extraordinary transaction with a controlling shareholder or
in which the controlling shareholder has a personal interest and the terms of employment or other engagement of the controlling shareholder or a relative of the controlling shareholder (even if not extraordinary), requiring the approval described
in Item 6C to the 2019 Annual Report “Directors, Senior Management and Employees —Board Practices—Approval of Related Party Transactions under Israeli Law— Disclosure of Personal Interests of Controlling Shareholders and Approval of Certain
Transactions”; (ii) approval of a compensation policy, requiring the approval described in Item 6C to the 2019 Annual Report “Directors, Senior Management and Employees— Board Practices— Compensation Committee and Compensation Policy”; and (iii)
approval of executive officer compensation inconsistent with our office holder compensation policy or the compensation of our chief executive officer (subject to limited exceptions), requiring the approval described in Item 6C to the 2019 Annual
Report “Directors, Senior Management and Employees— Board Practices— Approval of Related Party Transactions under Israeli Law— Disclosure of Personal Interests of an Office Holder and Approval of Certain Transactions.”
In addition, under the Israeli Companies Law the appointment of external directors requires the approval of a majority vote of the
shares present and voting on the matter, provided that either: (i) such majority includes a majority of the shares held by all shareholders who are non-controlling shareholders and shareholders who 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; or (ii) the total number of shares held by shareholders who are
non-controlling shareholders and shareholders who do not have a personal interest in the election of the external director (other than a personal interest not derived from a relationship with a controlling shareholder) voted against the election of
the external director does not exceed 2% of the aggregate voting rights in the company.
Furthermore, under the Israeli Companies Law the authorization of the chairman of the board to assume the role or responsibilities of
the chief executive officer, or the authorization of the chief executive officer or his or her relative thereof to assume the role or responsibilities of the chairman of the board, for periods of no longer than three years each, is subject to
receipt of the approval of a majority of the shares voting on the matter, provided that either (i) included in such majority are at least two-thirds of the shares of shareholders who are non-controlling shareholders and shareholders who do not have
a personal interest in the resolution that are voted at the meeting on the matter (excluding any abstentions); or (ii) the total number of shares of shareholders specified in clause (i) who voted against the resolution does not 2% of the voting
rights in the company.
Another exception to the simple majority vote requirement is a resolution for the voluntary winding up, or an approval of a scheme of
arrangement or reorganization, of the company pursuant to Section 350 of the Israeli Companies Law, which requires the approval of holders of 75% of the voting rights represented at the meeting and voting on the resolution.
Access to Corporate Records
Under the Israeli Companies Law, shareholders are provided access to: minutes of the general meetings of our shareholders; our
shareholders register and principal shareholders register, articles of association and financial statements; and any document that we are required by law to file publicly with the Israeli Companies Registrar or the Israel Securities Authority. In
addition, shareholders may request to be provided with any document in the company’s possession related to an action or transaction requiring shareholder approval under the related party transaction provisions of the Israeli Companies Law. We may
deny this request if we believe it has not been made in good faith or if such denial is necessary to protect our interest or protect a trade secret or patent.
Modification of Class Rights
Under the Israeli Companies Law and our amended articles of association, the rights attached to any class of shares, such as voting,
liquidation and dividend rights, may be modified or cancelled by adoption of a resolution by the holders of a majority of all shares as one class, without any required separate resolution of any class of shares, or otherwise in accordance with the
rights attached to such class of shares, as set forth in our amended articles of association.
Acquisitions under Israeli Law
Full Tender Offer
A person wishing to acquire shares of an Israeli public company, and who would as a result hold over 90% of the target company’s
voting rights or issued and outstanding share capital, is required by the Israeli Companies Law to make a tender offer to all of the company’s shareholders for the purchase of all of the issued and outstanding shares of the company. A person
wishing to acquire shares of a Israeli public company, and who would as a result hold over 90% of the target company’s voting rights or issued and outstanding share capital of a certain class of shares of the company, is required to make a tender
offer to all of the shareholders who hold shares of the relevant class for the purchase of all of the issued and outstanding shares of that class. If the shareholders who do not accept the offer hold less than 5% of the issued and outstanding share
capital of the company or of the applicable class, and more than half of the shareholders who do not have a personal interest in the offer accept the offer, all of the shares that the acquirer offered to purchase will be transferred to the acquirer
by operation of law. However, a tender offer will also be accepted if the shareholders who do not accept the offer hold less than 2% of the issued and outstanding share capital of the company or of the applicable class of shares.
Upon a successful completion of such a full tender offer, any shareholder that was an offeree in such tender offer, whether such
shareholder accepted the tender offer or not, may, within six months from the date of acceptance of the tender offer, petition an Israeli court to determine whether the tender offer was for less than fair value and that the fair value should be
paid as determined by the court. However, under certain conditions, the offeror may include in the terms of the tender offer that an offeree who accepted the offer will not be entitled to petition the Israeli court as described above.
If (a) the shareholders who did not respond or accept the tender offer hold at least 5% of the issued and outstanding share capital of
the company, or of the applicable class, or the shareholders who accept the offer constitute less than a majority of the offerees that do not have a personal interest in the acceptance of the tender offer, or (b) the shareholders who did not accept
the tender offer hold 2% or more of the issued and outstanding share capital of the company (or of the applicable class), the acquirer may not acquire shares of the company that will increase its holdings to more than 90% of the company’s issued
and outstanding share capital or of the applicable class from shareholders who accepted the tender offer.
Special Tender Offer
The Israeli Companies Law provides that an acquisition of shares of an Israeli public company must be made by means of a special
tender offer if as a result of the acquisition the purchaser would become a holder of 25% or more of the voting rights in the company, if there is no other shareholder that holds 25% or more of the voting rights in the company, subject to
exceptions. Similarly, the Israeli Companies Law provides that an acquisition of shares in an Israeli public company must be made by means of a special tender offer if as a result of the acquisition the purchaser would become a holder of more than
45% of the voting rights in the company, if there is no other shareholder of the company who holds more than 45% of the voting rights in the company, subject to certain exceptions. No tender offer is required if the acquisition of shares: (i)
occurs in the context of a private placement, that was approved by the company’s shareholders and whose purpose is to give the acquirer at least 25% of the voting rights in the company if there is no person who holds 25% or more of the voting
rights in the company, or as a private placement whose purpose is to give the acquirer 45% of the voting rights in the company, if there is no person who holds 45% of the voting rights in the company; (ii) was from a holder of 25% or more of the
voting rights in the company following which the purchaser will hold 25% or more of the voting rights in the company; or (iii) was from a holder of more than 45% of the voting rights in the company following which the purchaser will hold more than
45% of the voting rights in the company.
A special tender offer must be extended to all shareholders of a company (but the offeror is not required to purchase shares
representing more than 5% of the voting power attached to the company’s outstanding shares, regardless of how many shares are tendered by shareholders). A special tender offer may be consummated only if (i) at least 5% of the voting power attached
to the company’s outstanding shares will be acquired by the offeror; and (ii) the number of shares tendered in the offer exceeds the number of shares whose holders objected to the offer (excluding the purchaser, its controlling shareholders,
holders of 25% or more of the voting rights in the company or any person having a personal interest in the acceptance of the tender offer, or anyone on their behalf, including any such person’s relatives and entities under their control). If a
special tender offer is accepted, then the purchaser or any person or entity controlling it, at the time of the offer, and any person or entity under common control with the purchaser or such controlling person or entity may not make a subsequent
tender offer for the purchase of shares of the target company and may not enter into a merger with the target company for a period of one year from the date of the offer, unless the purchaser or such person or entity undertook to effect such an
offer or merger in the initial special tender offer.
Merger
The Israeli Companies Law permits merger transactions if approved by each party’s board of directors and, unless certain requirements
described under the Israeli Companies Law are met, by a majority vote of each party’s shares, and, in the case of the target company, a majority vote of each class of its shares, voted on the proposed merger at a shareholders meeting. The board of
directors of a merging company may not approve the merger if it determines that there exists a reasonable concern that, as a result of the merger, the surviving company will be unable to satisfy the obligations of the merging entities.
For purposes of the shareholder vote of a merging company whose shares are held by the other merging company or a person or entity
holding 25% or more of any of the means of control of the other merging entity, unless a court rules otherwise, the merger will not be deemed approved if a majority of the votes of shares voting on the matter at the shareholders meeting (excluding
abstentions) that are held by parties other than the other party to the merger, or by any other person or entity who holds 25% or more of the voting rights or the right to appoint 25% or more of the directors of the other party, or any one on their
behalf including their relatives or corporations controlled by any of them, vote against the merger. If, however, the merger involves a merger with a company’s own controlling shareholder or if the controlling shareholder has a personal interest in
the merger, then the merger is instead subject to the same Special Majority approval that governs all extraordinary transactions with controlling shareholders (as described in Item 6C to the 2019 Annual Report “Directors, Senior Management and
Employees—Board Practices— Approval of Related Party Transactions under Israeli Law — Disclosure of Personal Interests of Controlling Shareholders and Approval of Certain Transactions”).
If the transaction would have been approved by the shareholders of a merging company but for the separate approval of each class or
the exclusion of the votes of certain shareholders as provided above, a court may still approve the merger upon the request of holders of at least 25% of the voting rights of a company, if the court holds that the merger is fair and reasonable,
taking into account the valuation of the merging companies and the consideration offered to the shareholders.
Upon the request of a creditor of either party to the proposed merger, the court may delay or prevent the merger if it concludes that
there exists a reasonable concern that, as a result of the merger, the surviving company will be unable to satisfy the obligations of the merging entities, and may further give instructions to secure the rights of creditors.
In addition, a merger may not be consummated unless at least 50 days have passed from the date on which a proposal for approval of the
merger was filed by each party with the Israeli Registrar of Companies and at least 30 days have passed from the date on which the merger was approved by the shareholders of each party.
Anti-Takeover Measures under Israeli Law
The Israeli Companies Law allow us to create and issue shares having rights different from those attached to our ordinary shares,
including shares providing certain preferred rights with respect to voting, distributions or other matters and shares having preemptive rights. No preferred shares are currently authorized under our amended articles of association. In the future,
if we do authorize, create and issue a specific class of preferred shares, such class of shares, depending on the specific rights that may be attached to it, may have the ability to frustrate or prevent a takeover or otherwise prevent our
shareholders from realizing a potential premium over the market value of their ordinary shares. The authorization and designation of a class of preferred shares will require an amendment to our amended articles of association, which requires the
prior approval of the holders of a majority of the voting power attached to our issued and outstanding shares at a general meeting. The convening of the meeting, the shareholders entitled to participate and the majority vote required to be obtained
at such a meeting will be subject to the requirements set forth in the Israeli Companies Law and our amended articles of association as described above in “— Voting Rights.”
Borrowing Powers
Pursuant to the Israeli Companies Law and our amended articles of association, our board of directors may exercise all powers and take
all actions that are not required under law or under our amended articles of association to be exercised or taken by our shareholders, including the power to borrow money for company purposes.
Changes in Capital
Our amended articles of association enable us to increase or reduce our share capital. Any such changes are subject to the provisions
of the Israeli Companies Law and must be approved by a resolution duly passed by our shareholders at a general meeting by voting on such change in the capital. In addition, transactions that have the effect of reducing capital, such as the
declaration and payment of dividends in the absence of sufficient retained earnings or profits, require the approval of both our board of directors and an Israeli court.
Description of the Warrants
The following is a brief summary of the investor warrants and placement agent warrants issued in connection with our April 2020 Private Placement and
is subject in all respects to the provisions contained in the investor warrants, in the form filed as an exhibit to our Current Report on Form 6-K dated April 22, 2020 and the placement agent warrants, in the form filed as an exhibit to the
registration statement, of which this prospectus forms a part. Unless otherwise stated, references to warrants in this section include the investor warrants and placement agent warrants.
Exercisability. Holders may
exercise warrants at any time after April 22, 2020 until close of business on October 22, 2025, except that the placement agent warrants are exercisable until close of business on April 20, 2025. The warrants are exercisable, at the option of
each holder, in whole or in part, by delivering to us a duly executed exercise notice accompanied by payment in full for the number of shares of ordinary shares purchased upon such exercise (except in the case of a cashless exercise in limited
circumstances discussed below).
Cashless Exercise. If at the time
of exercise of the warrants there is no effective registration statement registering the ordinary shares underlying the warrants, the holder may, at its option, exercise its warrants on a cashless basis. When exercised on a cashless basis, a
portion of the warrant is cancelled in payment of the purchase price payable in respect of the number of our ordinary shares purchasable upon such exercise.
Exercise Price. The exercise price of ordinary shares
purchasable upon exercise of the investor warrants is $0.80 per share, and the exercise price of ordinary shares purchasable upon exercise of the placement agent warrants is $0.75. The exercise price and the number of shares issuable upon
exercise of the warrants is subject to appropriate adjustment in the event of recapitalization events, stock dividends, stock splits, stock combinations, reclassifications or similar events affecting our ordinary shares, and also upon any
distributions of assets, including cash, stock or other property to our shareholders.
Transferability. Subject to certain transfer
restrictions, the warrants may be transferred at the option of the holder upon surrender of the warrants with the appropriate instruments of transfer. In addition, the holder (or permitted assignees under FINRA Rule 5110(g)(1)) of the placement
agent warrants may not sell, transfer, assign, pledge, or hypothecate the warrants or the securities underlying these warrants, nor may they engage in any hedging, short sale, derivative, put, or call transaction that would result in the
effective economic disposition of the warrants or the underlying securities for a period of 180 days from the effective date or commencement of sales of the public offering of the ordinary shares issuable upon exercise of the warrants, subject
to limited exceptions.
Purchase Rights, Fundamental Transactions and Change of Control. If we sell or grant any rights to purchase shares, warrants or securities or other property to our shareholders on a pro rata basis, we will provide the holders of warrants with the right to acquire, upon the same
terms, the securities subject to such purchase rights as though the warrant had been exercised immediately prior to the declaration of such rights. If we consummate any fundamental transaction, as described in the warrants and generally
including any consolidation or merger into another corporation, the consummation of a transaction whereby another entity acquires more than 50% of our outstanding ordinary shares, the sale of all or substantially all of our assets, any
tender offer or exchange offer or another transaction in which our ordinary shares are converted into or exchanged for other securities or other consideration, the holder of warrants will thereafter receive upon exercise of the warrants the
securities or other consideration to which a holder of the number of ordinary shares then deliverable upon the exercise or conversion of such warrants would have been entitled upon such consolidation, merger or other transaction. In
addition, in the event of a fundamental transaction which is approved by our board of directors, the holders of the warrants have the right to require us or a successor entity to redeem the warrants for cash in the amount of the
Black-Scholes value of the unexercised portion of the warrants as of the date of the consummation of the fundamental transaction; provided, however, in the event of a fundamental transaction which is not within the our control (including
not approved by our board of directors), we will only be required to pay the same type of consideration, at the Black-Scholes value of the unexercised portion of the warrant, that is being offered and paid to the holders of our shares in
connection with the Fundamental Transaction.
Exchange Listing. We do not plan on
making an application to list the warrants on the Nasdaq Capital Market, any national securities exchange or other nationally recognized trading system. Our ordinary shares underlying the warrants will be listed on the Nasdaq Capital Market and
our ordinary shares are traded on the Nasdaq Capital Market.
Rights as Shareholder. Except as
otherwise provided in the warrants (such as the rights described above of a warrant holder upon our sale or grant of any rights to purchase shares, warrants or securities or other property to our shareholders on a pro rata basis) or by virtue of
such holder’s ownership of our ordinary shares, the holders of the warrants do not have the rights or privileges of holders of our ordinary shares, including any voting rights, until they exercise their warrants.
First May 2020 Warrants
The following is a brief summary of the investor warrants and placement agent warrants issued in connection with our First May 2020 financing and is
subject in all respects to the provisions contained in the investor warrants, in the form filed as an exhibit to our Current Report on Form 6-K dated May 4, 2020 and the placement agent warrants, in the form filed as an exhibit to the
registration statement, of which this prospectus forms a part. Unless otherwise stated, references to warrants in this section include the investor warrants and placement agent warrants.
Exercisability. Holders may exercise warrants at any
time after May 4, 2020 until close of business on November 4, 2025, except that the placement agent warrants are exercisable until close of business on April 30, 2025. The warrants are exercisable, at the option of each holder, in whole or in
part, by delivering to us a duly executed exercise notice accompanied by payment in full for the number of shares of ordinary shares purchased upon such exercise (except in the case of a cashless exercise in limited circumstances discussed
below).
Cashless Exercise. If at the time
of exercise of the warrants there is no effective registration statement registering the ordinary shares underlying the warrants, the holder may, at its option, exercise its warrants on a cashless basis. When exercised on a cashless basis, a
portion of the warrant is cancelled in payment of the purchase price payable in respect of the number of our ordinary shares purchasable upon such exercise.
Exercise Price. The exercise price of ordinary shares
purchasable upon exercise of the investor warrants is $0.80 per share, and the exercise price of ordinary shares purchasable upon exercise of the placement agent warrants is $0.75. The exercise price and the number of shares issuable upon
exercise of the warrants is subject to appropriate adjustment in the event of recapitalization events, stock dividends, stock splits, stock combinations, reclassifications or similar events affecting our ordinary shares, and also upon any
distributions of assets, including cash, stock or other property to our shareholders.
Transferability. Subject to certain
transfer restrictions, the warrants may be transferred at the option of the holder upon surrender of the warrants with the appropriate instruments of transfer. In addition, the holder (or permitted assignees under FINRA Rule 5110(g)(1)) of the
placement agent warrants may not sell, transfer, assign, pledge, or hypothecate the warrants or the securities underlying these warrants, nor may they engage in any hedging, short sale, derivative, put, or call transaction that would result in
the effective economic disposition of the warrants or the underlying securities for a period of 180 days from the effective date or commencement of sales of the public offering of the ordinary shares issuable upon exercise of the warrants,
subject to limited exceptions.
Purchase Rights, Fundamental Transactions and Change of Control. If we sell or grant any rights to purchase shares, warrants or securities or other property to our shareholders on a pro rata basis, we will provide the holders of warrants with the right to acquire, upon the same
terms, the securities subject to such purchase rights as though the warrant had been exercised immediately prior to the declaration of such rights. If we consummate any fundamental transaction, as described in the warrants and generally
including any consolidation or merger into another corporation, the consummation of a transaction whereby another entity acquires more than 50% of our outstanding ordinary shares, the sale of all or substantially all of our assets, any
tender offer or exchange offer or another transaction in which our ordinary shares are converted into or exchanged for other securities or other consideration, the holder of warrants will thereafter receive upon exercise of the warrants the
securities or other consideration to which a holder of the number of ordinary shares then deliverable upon the exercise or conversion of such warrants would have been entitled upon such consolidation, merger or other transaction. In
addition, in the event of a fundamental transaction which is approved by our board of directors, the holders of the warrants have the right to require us or a successor entity to redeem the warrants for cash in the amount of the
Black-Scholes value of the unexercised portion of the warrants as of the date of the consummation of the fundamental transaction; provided, however, in the event of a fundamental transaction which is not within the our control (including
not approved by our board of directors), we will only be required to pay the same type of consideration, at the Black-Scholes value of the unexercised portion of the warrant, that is being offered and paid to the holders of our shares in
connection with the Fundamental Transaction.
Exchange Listing. We do not plan on
making an application to list the warrants on the Nasdaq Capital Market, any national securities exchange or other nationally recognized trading system. Our ordinary shares underlying the warrants will be listed on the Nasdaq Capital Market and
our ordinary shares are traded on the Nasdaq Capital Market.
Rights as Shareholder. Except as
otherwise provided in the warrants (such as the rights described above of a warrant holder upon our sale or grant of any rights to purchase shares, warrants or securities or other property to our shareholders on a pro rata basis) or by virtue of
such holder’s ownership of our ordinary shares, the holders of the warrants do not have the rights or privileges of holders of our ordinary shares, including any voting rights, until they exercise their warrants.
Second May 2020 Warrants
The following is a brief summary of the investor warrants and placement agent warrants issued in connection with our Second May 2020 financing and is
subject in all respects to the provisions contained in the investor warrants, in the form filed as an exhibit to our Current Report on Form 6-K dated May 12, 2020 and the placement agent warrants, in the form filed as an exhibit to the
registration statement, of which this prospectus forms a part. Unless otherwise stated, references to warrants in this section include the investor warrants and placement agent warrants.
Exercisability. Holders may exercise warrants at any
time after May 13, 2020 until close of business on November 13, 2025, except that the placement agent warrants are exercisable until close of business on May 8, 2025. The warrants are exercisable, at the option of each holder, in whole or in
part, by delivering to us a duly executed exercise notice accompanied by payment in full for the number of shares of ordinary shares purchased upon such exercise (except in the case of a cashless exercise in limited circumstances discussed
below).
Cashless Exercise. If at the time
of exercise of the warrants there is no effective registration statement registering the ordinary shares underlying the warrants, the holder may, at its option, exercise its warrants on a cashless basis. When exercised on a cashless basis, a
portion of the warrant is cancelled in payment of the purchase price payable in respect of the number of our ordinary shares purchasable upon such exercise.
Exercise Price. The exercise price of ordinary shares
purchasable upon exercise of the investor warrants is $0.80 per share, and the exercise price of ordinary shares purchasable upon exercise of the placement agent warrants is $0.75. The exercise price and the number of shares issuable upon
exercise of the warrants is subject to appropriate adjustment in the event of recapitalization events, stock dividends, stock splits, stock combinations, reclassifications or similar events affecting our ordinary shares, and also upon any
distributions of assets, including cash, stock or other property to our shareholders.
Transferability. Subject to certain
transfer restrictions, the warrants may be transferred at the option of the holder upon surrender of the warrants with the appropriate instruments of transfer. In addition, the holder (or permitted assignees under FINRA Rule 5110(g)(1)) of the
placement agent warrants may not sell, transfer, assign, pledge, or hypothecate the warrants or the securities underlying these warrants, nor may they engage in any hedging, short sale, derivative, put, or call transaction that would result in
the effective economic disposition of the warrants or the underlying securities for a period of 180 days from the effective date or commencement of sales of the public offering of the ordinary shares issuable upon exercise of the warrants,
subject to limited exceptions.
Purchase Rights, Fundamental Transactions and Change of Control. If we sell or grant any rights to purchase shares, warrants or securities or other property to our shareholders on a pro rata basis, we will provide the holders of warrants with the right to acquire, upon the same
terms, the securities subject to such purchase rights as though the warrant had been exercised immediately prior to the declaration of such rights. If we consummate any fundamental transaction, as described in the warrants and generally
including any consolidation or merger into another corporation, the consummation of a transaction whereby another entity acquires more than 50% of our outstanding ordinary shares, the sale of all or substantially all of our assets, any
tender offer or exchange offer or another transaction in which our ordinary shares are converted into or exchanged for other securities or other consideration, the holder of warrants will thereafter receive upon exercise of the warrants the
securities or other consideration to which a holder of the number of ordinary shares then deliverable upon the exercise or conversion of such warrants would have been entitled upon such consolidation, merger or other transaction. In
addition, in the event of a fundamental transaction which is approved by our board of directors, the holders of the warrants have the right to require us or a successor entity to redeem the warrants for cash in the amount of the
Black-Scholes value of the unexercised portion of the warrants as of the date of the consummation of the fundamental transaction; provided, however, in the event of a fundamental transaction which is not within the our control (including
not approved by our board of directors), we will only be required to pay the same type of consideration, at the Black-Scholes value of the unexercised portion of the warrant, that is being offered and paid to the holders of our shares in
connection with the Fundamental Transaction..
Exchange Listing. We do not plan on
making an application to list the warrants on the Nasdaq Capital Market, any national securities exchange or other nationally recognized trading system. Our ordinary shares underlying the warrants will be listed on the Nasdaq Capital Market and
our ordinary shares are traded on the Nasdaq Capital Market.
Rights as Shareholder. Except as
otherwise provided in the warrants (such as the rights described above of a warrant holder upon our sale or grant of any rights to purchase shares, warrants or securities or other property to our shareholders on a pro rata basis) or by virtue of
such holder’s ownership of our ordinary shares, the holders of the warrants do not have the rights or privileges of holders of our ordinary shares, including any voting rights, until they exercise their warrants.
We are registering the ordinary shares issuable upon exercise of the warrants and placement agent warrants issued in our April 2020 Private Placement,
our First May 2020 Private Placement and our Second May 2020 Private Placement to permit the resale of these ordinary shares by the holders of these warrants from time to time after the date of this prospectus. We will not receive any of the
proceeds from the sale by the selling shareholders of the ordinary shares other than proceeds from the cash exercise of the warrants and placement agent warrants, if and when exercised. We will bear all fees and expenses incident to our
obligation to register the ordinary shares.
The selling shareholders may sell all or a portion of the ordinary shares beneficially owned by them and offered hereby from time to
time directly or through one or more underwriters, broker-dealers or agents. If the ordinary shares are sold through underwriters or broker-dealers, the selling shareholders will be responsible for underwriting discounts or commissions or agent’s
commissions. The ordinary shares may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale, or at negotiated prices. These sales may be effected in
transactions, which may involve crosses or block transactions,
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on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale;
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in the over-the-counter market;
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in transactions otherwise than on these exchanges or systems or in the over-the-counter market;
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through the writing of options, whether such options are listed on an options exchange or otherwise;
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ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
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block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal
to facilitate the transaction;
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purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
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an exchange distribution in accordance with the rules of the applicable exchange;
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privately negotiated transactions;
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sales pursuant to Rule 144;
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broker-dealers may agree with the selling security holders to sell a specified number of such shares at a stipulated price per share;
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a combination of any such methods of sale; and
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any other method permitted pursuant to applicable law.
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If the selling shareholders effect such transactions by selling ordinary shares to or through underwriters, broker-dealers or agents,
such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from the selling shareholders or commissions from purchasers of the ordinary shares for whom they may act as agent or to whom
they may sell as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers or agents may be in excess of those customary in the types of transactions involved). In connection with sales of ordinary shares
or otherwise, the selling shareholders may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the ordinary shares in the course of hedging in positions they assume. The selling shareholders may also sell
ordinary shares short and deliver ordinary shares covered by this prospectus to close out short positions and to return borrowed shares in connection with such short sales. The selling shareholders may also loan or pledge ordinary shares to
broker-dealers that in turn may sell such shares.
The selling shareholders may pledge or grant a security interest in some or all of the warrants, placement agent warrants or ordinary
shares owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the ordinary shares from time to time pursuant to this prospectus or any amendment to this prospectus
under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933, as amended, amending, if necessary, the list of selling shareholders to include the pledgee, transferee or other successors in interest as selling shareholders under
this prospectus. The selling shareholders also may transfer and donate the ordinary shares in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of
this prospectus.
The selling shareholders and any broker-dealer participating in the distribution of the ordinary shares may be deemed to be “underwriters” within the
meaning of the Securities Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed to be underwriting commissions or discounts under the Securities Act. At the time a particular offering of
the ordinary shares is made, a prospectus supplement, if required, will be distributed which will set forth the aggregate amount of ordinary shares being offered and the terms of the offering, including the name or names of any broker-dealers
or agents, any discounts, commissions and other terms constituting compensation from the selling shareholders and any discounts, commissions or concessions allowed or reallowed or paid to broker-dealers.
Under the securities laws of some states ordinary shares may be sold in such states only through registered or licensed brokers or
dealers. In addition, in some states ordinary shares may not be sold unless such ordinary shares have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is complied with.
There can be no assurance that any selling shareholder will sell any or all of the ordinary shares registered pursuant to the
registration statement, of which this prospectus forms a part.
The selling shareholders and any other person participating in such distribution will be subject to applicable provisions of the
Exchange Act, and the rules and regulations thereunder, including, without limitation, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the ordinary shares by the selling shareholders and any other
participating person. Regulation M may also restrict the ability of any person engaged in the distribution of the ordinary shares to engage in market-making activities with respect to the ordinary shares. All of the foregoing may affect the
marketability of the ordinary shares and the ability of any person or entity to engage in market-making activities with respect to the ordinary shares.
We will pay all expenses of the registration of the ordinary shares, estimated to be $40,000 in total, including, without limitation, Securities and
Exchange Commission filing fees and expenses of compliance with state securities or “blue sky” laws; provided, however, that each selling shareholder will pay all underwriting discounts and selling commissions, if any, and any related legal
expenses incurred by it.
Once sold under the registration statement, of which this prospectus forms a part, the ordinary shares will be freely tradable in the
hands of persons other than our affiliates.
McDermott Will & Emery LLP, New York, New York, has passed upon certain legal matters regarding the securities offered hereby
under U.S. law, and Fischer Behar Chen Well Orion & Co., Tel Aviv, Israel, has passed upon certain legal matters regarding the securities offered hereby under Israeli law. If the securities are distributed in an underwritten offering, certain
legal matters will be passed upon for the underwriters by counsel identified in the applicable prospectus supplement.
EXPERTS
The consolidated financial statements of Check-Cap Ltd. and its subsidiaries as of December 31, 2019 and 2018 and for each of the
three years in the period ended December 31, 2019 incorporated by reference in this prospectus have been audited by Brightman Almagor Zohar & Co., a firm in the Deloitte Global Network, an independent registered accounting firm, as set forth in
their report thereon, included therein, and incorporated herein by reference in reliance upon such report given on the authority of such firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on Form F-1, including amendments and relevant exhibits and schedules, under the
Securities Act covering the ordinary shares to be sold in this offering. This prospectus, which constitutes a part of the registration statement, summarizes material provisions of contracts and other documents that we refer to in the prospectus.
Since this prospectus does not contain all of the information contained in the registration statement, you should read the registration statement and its exhibits and schedules for further information with respect to us and our ordinary shares. You
may review and copy the registration statement, reports and other information we file at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. You may also request copies of these documents upon payment of a duplicating fee
by writing to the SEC. For further information on the public reference facility, please call the SEC at 1-800-SEC-0330. Our SEC filings, including the registration statement, are also available to you on the SEC’s Web site at http://www.sec.gov.
You may read and copy the registration statement, including the related exhibits and schedules, and any document we file with the SEC
without charge at the SEC’s public reference room at 100 F Street, N.E., Room 1580, Washington, DC 20549. You may also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, N.E.,
Room 1580, Washington, DC 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. The SEC also maintains an Internet website that contains reports and other information regarding issuers that file
electronically with the SEC. Our filings with the SEC are also available to the public through the SEC’s website at http://www.sec.gov.
We are subject to the information reporting requirements of the Exchange Act that are applicable to foreign private issuers, and under
those requirements are filing reports with the SEC. Those other reports or other information may be inspected without charge at the locations described above. As a foreign private issuer, we are exempt from the rules under the Exchange Act related
to the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we are not
required under the Exchange Act to file annual, quarterly and current reports and financial statements with the SEC as frequently or as promptly as United States companies whose securities are registered under the Exchange Act. However, we will
file with the SEC, within 120 days after the end of each fiscal year, or such applicable time as required by the SEC, an annual report on Form 20-F containing financial statements audited by an independent registered public accounting firm, and
will submit to the SEC, on Form 6-K, unaudited quarterly financial information.
We maintain a corporate website at https://www.check-cap.com. Information contained on, or that can be accessed through, our website
does not constitute a part of this prospectus. We have included our website address in this prospectus solely as an inactive textual reference. We post on our website any materials required to be so posted on such website under applicable corporate
or securities laws and regulations, including, posting any XBRL interactive financial data required to be filed with the SEC and any notices of general meetings of our shareholders.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
We are allowed to incorporate by reference the information we file with the SEC, which means that we can disclose important
information to you by referring to those documents. The information incorporated by reference is considered to be part of this prospectus. We incorporate by reference in this prospectus the documents listed below:
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Our Annual Report on Form 20-F for the year ended December 31, 2019 filed with the SEC on March 6, 2020;
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Our Form 6-K filed with the SEC on March 6, 2020, April 6, 2020, April 20, 2020, April 22, 2020, April 30, 2020, May 4, 2020, May 12, 2020, May 27, 2020 and
June 5, 2020 (to the extent expressly incorporated by reference into our effective registration statements filed by us under the Securities Act); and
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The description of our ordinary shares contained in our Registration Statement on Form F-1, as amended, under the Securities Act, as originally filed with the SEC on December
23, 2014 (Registration No. 333- 201250) under the heading “Description of Securities” and as incorporated into our Registration Statement on Form 8-A12B, filed with the SEC February 11, 2015.
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The information relating to us contained in this prospectus does not purport to be comprehensive and should be read together with the
information contained in the documents incorporated or deemed to be incorporated by reference in this prospectus.
As you read the above documents, you may find inconsistencies in information from one document to another. If you find inconsistencies
between the documents and this prospectus, you should rely on the statements made in the most recent document. All information appearing in this prospectus is qualified in its entirety by the information and financial statements, including the
notes thereto, contained in the documents incorporated by reference herein.
Potential investors, including any beneficial owner, may obtain a copy of any of the documents summarized herein (subject to certain
restrictions because of the confidential nature of the subject matter) or any of our SEC filings incorporated by reference herein without charge by written or oral request directed to Mira Rosenzweig, Chief Financial Officer; at Check-Cap Building,
29 Abba Hushi Avenue, P.O. Box 1271, Isfiya, 3009000, Israel; Our telephone number is +972-4-8303400.
You also may access the incorporated reports and other documents referenced above on our website at www. check-cap.com. The information contained on, or that can be accessed through, our website is not part of this prospectus.
You should rely only on the information contained or incorporated by reference in this prospectus or a prospectus supplement. We have
not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not making an offer to sell these securities in any jurisdiction where
the offer or sale is not permitted. You should assume that the information appearing in this prospectus is accurate only as of the date on the front cover of this prospectus, or such earlier date, that is indicated in this prospectus. Our business,
financial condition, results of operations and prospects may have changed since that date.
ENFORCEABILITY OF CIVIL LIABILITIES
We are incorporated under the laws of the State of Israel. All of our current executive officers, the Israeli experts and the majority
of our directors reside outside the United States, and substantially all of our assets and a substantial portion of the assets of these persons are located outside the United States. Therefore, service of process upon us and upon our directors and
officers and the Israeli experts named in this prospectus, substantially all of whom reside outside the United States, may be difficult to obtain within the United States. Furthermore, because substantially all of our assets, and a substantial
portion of those of our officers and directors who reside outside the United States and the Israeli experts named herein, are located outside the United States, any judgment obtained in the United States against us or any of these persons may not
be collectible within the United States.
We have appointed Puglisi & Associates as our agent to receive service of process in any action against us in any United States
federal or state court arising out of this offering or any purchase or sale of securities in connection with this offering. The address of Puglisi & Associates is 850 Library Avenue, Suite 204, Newark, Delaware 19711.
We have been informed by our legal counsel in Israel, Fischer Behar Chen Well Orion & Co., that there is doubt as to the
enforceability of civil liabilities under U.S. securities laws pursuant to original actions instituted in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws on the grounds that Israel is not the
most appropriate forum to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law is applicable to the claim. If U.S. law is found to be applicable, the content of
applicable U.S. law must be proved as a fact by expert witnesses, which can be a time-consuming and costly process. Certain matters of procedure may also be governed by Israeli law.
Subject to certain time limitations and legal procedures, Israeli courts may enforce a U.S. judgment in a civil matter, including a
judgment based upon the civil liability provisions of the Securities Act and the Exchange Act and including a monetary or compensatory judgment in a non-civil matter, provided that, among other things:
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the judgment was rendered by a court which was, according to the laws of the state of the court, competent to render the judgment;
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the judgment may no longer be appealed;
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the obligation imposed by the judgment is enforceable according to the rules relating to the enforceability of judgments in Israel and the
substance of the judgment is not contrary to public policy; and
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the judgment is executory in the state in which it was given.
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Even if such conditions are met, an Israeli court may not declare a foreign civil judgment enforceable if:
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the judgment was given in a state whose laws do not provide for the enforcement of judgments of Israeli courts (subject to exceptional cases);
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the enforcement of the judgment is likely to prejudice the sovereignty or security of the State of Israel;
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the judgment was obtained by fraud;
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the opportunity given to the defendant to bring its arguments and evidence before the court was not reasonable in the opinion of the Israeli court;
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the judgment was rendered by a court not competent to render it according to the laws of private international law as they apply in Israel;
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the judgment is contradictory to another judgment that was given in the same matter between the same parties and that is still valid; or
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at the time the action was brought in the foreign court, a lawsuit in the same matter and between the same parties was pending before a court or tribunal in Israel.
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Foreign judgments enforced by Israeli courts generally will be payable in Israeli currency, which can then be converted into
non-Israeli currency and transferred out of Israel. The usual practice in an action before an Israeli court to recover an amount in a non-Israeli currency is for the Israeli court to render a judgment for the equivalent amount in Israeli currency
at the rate of exchange in force on the date of the judgment, but the judgment debtor may make payment in foreign currency. Pending collection, the amount of the judgment of an Israeli court stated in Israeli currency ordinarily will be linked to
the Israeli consumer price index plus interest at the annual statutory rate set by Israeli regulations prevailing at the time. Judgment creditors must bear the risk of unfavorable exchange rates.