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Consolidated Balance Sheets - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
Current assets |
|
|
Cash and cash equivalents |
$ 3,158
|
$ 9,636
|
Short Term Deposits |
12,506
|
12,169
|
Marketable equity securities |
23
|
22
|
Other investments |
345
|
2,361
|
Other current receivables |
471
|
482
|
Total current assets |
16,503
|
24,670
|
Non-current assets |
|
|
Investment in affiliated company |
7,568
|
1,404
|
Other investments |
|
1,672
|
Fixed assets, net |
787
|
289
|
Total non-current assets |
8,355
|
3,365
|
TOTAL ASSETS |
24,858
|
28,035
|
Current liabilities |
|
|
Trade payables |
344
|
330
|
Other current payables |
947
|
817
|
Total current liabilities |
1,291
|
1,147
|
Derivative warrant liabilities |
|
2,071
|
TOTAL LIABILITIES |
1,291
|
3,218
|
Shareholders' equity |
|
|
Ordinary shares, NIS 0 par value; Authorized 1,000,000,000 shares; Issued and outstanding: 131,935,404 and 109,502,289 shares as of December 31, 2018, December 31, 2017 respectively |
|
|
Additional paid in capital |
57,521
|
44,114
|
Accumulated deficit |
(33,954)
|
(19,297)
|
Total shareholders' equity |
23,567
|
24,817
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
$ 24,858
|
$ 28,035
|
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Dec. 31, 2017 |
Dec. 31, 2016 |
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|
|
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|
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|
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|
|
|
|
Issuance of ordinary shares to effect reverse recapitalization transaction |
|
|
|
|
|
|
Issuance of ordinary shares to effect reverse recapitalization transaction, shares |
|
35,884,116
|
[1] |
1,733
|
|
1,733
|
Issuance of ordinary shares and warrants |
|
|
|
$ 4,444
|
|
$ 4,444
|
Issuance of ordinary shares and warrants, shares |
[1] |
15,050,032
|
|
|
|
|
Exercise of options |
|
|
|
|
|
|
Exercise of options, shares |
|
2,392,275
|
[1] |
|
|
|
Share-based payment |
|
|
|
405
|
|
$ 405
|
Share-based payment, shares |
[1] |
|
|
|
|
|
Loss for the year |
|
|
|
|
(1,913)
|
(1,913)
|
Ending Balance at Dec. 31, 2016 |
|
|
|
8,024
|
(3,355)
|
4,669
|
Ending Balance, shares at Dec. 31, 2016 |
[1] |
73,062,687
|
|
|
|
|
CHANGES |
|
|
|
|
|
|
Issuance of ordinary shares and warrants |
|
|
|
10,745
|
|
10,745
|
Issuance of ordinary shares and warrants, shares |
[1] |
21,027,690
|
|
|
|
|
Exercise of warrants |
|
|
|
22,249
|
|
22,249
|
Exercise of warrants, shares |
[1] |
14,496,403
|
|
|
|
|
Exercise of options |
|
|
|
641
|
|
641
|
Exercise of options, shares |
[1] |
865,509
|
|
|
|
|
Share-based payment |
|
|
|
2,455
|
|
2,455
|
Share-based payment, shares |
[1] |
50,000
|
|
|
|
|
Loss for the year |
|
|
|
|
(15,942)
|
(15,942)
|
Ending Balance at Dec. 31, 2017 |
|
|
|
44,114
|
(19,297)
|
24,817
|
Ending Balance, shares at Dec. 31, 2017 |
[1] |
109,502,289
|
|
|
|
|
CHANGES |
|
|
|
|
|
|
Issuance of ordinary shares and warrants |
|
|
|
11,208
|
|
11,208
|
Issuance of ordinary shares and warrants, shares |
[1] |
21,963,411
|
|
|
|
|
Exercise of warrants |
|
|
|
125
|
|
125
|
Exercise of warrants, shares |
[1] |
156,500
|
|
|
|
|
Exercise of options |
|
|
|
34
|
|
34
|
Exercise of options, shares |
[1] |
288,204
|
|
|
|
|
Share-based payment |
|
|
|
2,040
|
|
2,040
|
Share-based payment, shares |
[1] |
25,000
|
|
|
|
|
Loss for the year |
|
|
|
|
$ (14,657)
|
(14,657)
|
Ending Balance at Dec. 31, 2018 |
|
|
|
|
|
$ 23,567
|
Ending Balance, shares at Dec. 31, 2018 |
|
131,935,404
|
[1] |
57,521
|
(33,954)
|
|
|
|
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12 Months Ended |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Cash flows from operating activities |
|
|
|
Loss for the year |
$ (14,657)
|
$ (15,942)
|
$ (1,913)
|
Adjustments to reconcile loss to net cash used in operating activities: |
3,184
|
11,151
|
(397)
|
Net cash used in operating activities |
(11,473)
|
(4,791)
|
(2,310)
|
Cash Flows from Investing Activities |
|
|
|
Sales of marketable securities |
|
|
128
|
Changes in short term deposits |
(337)
|
(11,779)
|
(390)
|
Investment in affiliated company |
(5,065)
|
|
(1,422)
|
Purchase of fixed assets |
(733)
|
(271)
|
(73)
|
Net cash used in investing activities |
(6,135)
|
(12,050)
|
(1,757)
|
Cash flows from Financing Activities: |
|
|
|
Issuance of ordinary shares and warrants, net of issuance expenses |
11,208
|
10,745
|
6,256
|
Proceeds from exercise of Warrants |
125
|
12,009
|
|
Proceeds from exercise of Options |
34
|
641
|
|
Acquisition of a subsidiary in connection with reverse recapitalization (See below) |
|
|
1,245
|
Net cash provided by financing activities |
11,367
|
23,395
|
7,501
|
Effect of exchange rate changes on cash and cash equivalents |
(237)
|
(282)
|
(70)
|
Increase (Decrease) in cash and cash equivalents |
(6,478)
|
6,272
|
3,364
|
Cash and cash equivalents at the beginning of the period |
9,636
|
3,364
|
|
Cash and cash equivalents at the end of the period |
3,158
|
9,636
|
3,364
|
Adjustments to reconcile loss to net cash used in operating activities: |
|
|
|
Share-based payment |
2,040
|
2,455
|
405
|
Depreciation |
235
|
49
|
11
|
Revaluation of derivative warrant liabilities |
(2,071)
|
12,180
|
(1,847)
|
Equity in loss (gain) of an affiliated company |
2,905
|
(156)
|
108
|
Revaluation of other investments |
(316)
|
(3,967)
|
|
Revaluation of securities classified as trading |
(1)
|
(4)
|
(104)
|
Realized loss of securities classified as available-for-sale, net |
|
|
31
|
Issuance expenses presented in financing activities |
|
|
166
|
Exchange rate changes on cash and cash equivalents |
237
|
282
|
70
|
Changes in assets and liabilities: |
|
|
|
Decrease (Increase) in other current assets |
11
|
(378)
|
427
|
Increase in trade payables |
14
|
226
|
104
|
Decrease in other payables |
130
|
464
|
232
|
Adjustments to reconcile loss to net cash used in operating activities |
3,184
|
11,151
|
(397)
|
Assets (liabilities) acquired: |
|
|
|
Current assets and liabilities excluding cash and cash equivalents |
|
|
(5)
|
Marketable equity securities |
|
|
(49)
|
Fixed assets |
|
|
(5)
|
Other current assets |
|
|
(429)
|
Reverse recapitalization effect on equity |
|
|
1,733
|
Cash acquired in connection reverse recapitalization |
|
|
1,245
|
Non Cash Activities: |
|
|
|
Exercise of Warrant investment (see note 4C2) |
$ 4,004
|
|
|
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General
|
12 Months Ended |
Dec. 31, 2018 |
General [Abstract] |
|
GENERAL |
NOTE
1 – GENERAL
| A. | Foresight
Autonomous Holdings Ltd. (the “Company”) was originally incorporated in Israel
in September 1977 under the name “Golan Malechet Macshevet Ltd” as a private
company, and in April 1987 became a public company. In 2010 the Company changed its name
to “Asia Development (A.D.B.M.) Ltd.” The Company’s shares are traded
on the Tel Aviv Stock Exchange (“TASE”). In addition, since June 15, 2017
the Company has American Depository Shares (“ADSs”) registered with the US
Securities and Exchange Commission (“SEC”). The ADSs are listed on The Nasdaq
Capital Market, the ratio of the Company’s Shares to ADSs is 5:1. Effective January
5, 2016, the Company acquired (the “Acquisition Transaction”) 100% of the
outstanding shares of Foresight Automotive Ltd. (“Foresight Ltd.”), a company
incorporated in Israel, pursuant to a capital stock exchange agreement dated as of October
11, 2015, among the Company, Magna B.S.P. Ltd. (“Magna”), and the shareholders
of Foresight Ltd. In exchange for the outstanding shares of Foresight Ltd., the Company
issued to Magna a total of 35,884,116 of the Company’s Ordinary Shares representing
approximately 64.50% of the Ordinary Shares then issued and outstanding after giving
effect to the Acquisition Transaction. As a result of the Acquisition Transaction, Foresight
Ltd. became a wholly owned subsidiary of the Company as of January 5, 2016 and, subsequent
to the Acquisition Transaction, the Company changed its name to “Foresight Autonomous
Holdings Ltd.”
The
transaction between the Company and Foresight Ltd. was accounted for as a reverse recapitalization.
As the shareholders of Foresight Ltd. received the largest ownership interest in the
Company, Foresight Ltd. was determined to be the “accounting acquirer” in
the reverse recapitalization. As a result, the historical financial statements of the
Company were replaced with the historical financial statements of Foresight Ltd.
The
Company and its subsidiaries Foresight Ltd. and Eye-Net Mobile Ltd (“Eye-Net”)
are collectively referred to as the “Company” or the “Group.” |
| B. | Establishment
of Foresight Ltd.
Foresight
Ltd. was established in July 2015 by Magna in order to transfer all of Magna’s
3D computer vision research and development technology and business in the area of Advanced
Driver Assistance Systems (“ADAS”) to a separate entity. As part of the reorganization,
Magna transferred to Foresight Ltd. intellectual assets comprising mostly of know-how,
software and algorithms developed by Magna.
The
transfer of the ADAS business to Foresight Ltd. was accounted for as a business combination
between entities under common control with financial statements presented for prior periods
retrospectively to reflect the transfer from the first day Magna started its research
in January 2011.
Foresight’s
Ltd. statement of operations consists of all the related costs and expenses of the ADAS
business which were incurred by Magna but were related to the ADAS business. These allocations
of research and development expenses and general and administrative expenses were based
on direct payroll costs incurred by Magna in relation to the ADAS business, on the proportional
allocation of direct overhead costs incurred by Magna by considering the proportion of
direct payroll costs incurred by Magna in relation to the ADAS business to total payroll
costs incurred by Magna and on the proportional allocation of indirect overhead costs
by considering the proportion of total indirect overhead expenses incurred by Magna to
total payroll costs incurred by Magna. |
Foresight
Ltd is a technology company engaged in the design, development and commercialization of stereo/quad-camera vision systems
for the automotive industry. The Company’s vision systems are based on 3D video analysis, advanced algorithms for image
processing and sensor fusion. In addition, Foresight Ltd., by means of its subsidiary Eye-Net., is also engaged in the design and
development of V2X (vehicle-to-everything) cellular-based accident prevention solutions that connects users and
infrastructure through smart cellular-based platforms. V2X is a wireless technology that enables communication between the
vehicles, infrastructure, and other devices in the vicinity, grid, home, and network.
The
Group activities are subject to significant risks and uncertainties, including failing to secure additional funding to
operationalize its technology before competitor develop similar technology. In addition, the Group is subject to risks from,
among other things, competition associated with the industry in general, other risks associated with financing, liquidity
requirements, rapidly changing customer requirements and limited operating history.
Management
believes that the current working capital position will be sufficient to meet the Company’s working capital needs in the
foreseeable future.
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Significant Accounting Policies
|
12 Months Ended |
Dec. 31, 2018 |
Accounting Policies [Abstract] |
|
SIGNIFICANT ACCOUNTING POLICIES |
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES
The
financial statements have been prepared in conformity with accounting principles generally accepted in United Sates of America
(“U.S. GAAP”).
| B. | Use
of estimates in the preparation of financial statements: |
The
preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect
the amounts reported in the financial statements and accompanying notes. The Company’s management believes that the estimates,
judgment and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments
and assumptions can affect reported amounts and disclosures made. Actual results could differ from those estimates.
| C. | Financial
statement in U.S. dollars: |
The
functional currency of the Company is the U.S dollar (“dollar” or “USD”) since the dollar is the currency
of the primary economic environment in which the Company has operated and expects to continue to operate in the foreseeable future.
Transactions
and balances denominated in dollars are presented at their original amounts. Transactions and balances denominated in foreign
currencies have been re-measured to dollars in accordance with the provisions of ASC 830-10, “Foreign Currency Translation.”
All
transaction gains and losses from re-measurement of monetary balance sheet items denominated in non-dollar currencies are reflected
in the statement of operations as financial income or expenses, as appropriate.
| D. | Cash
and cash equivalents: |
Cash
equivalents are short-term highly liquid investments that are readily convertible to cash with maturities of three months or less
as of the date acquired.
| E. | Property
and equipment: |
Property
and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over
the estimated useful lives of the assets, at the following annual rates:
| |
% |
Computers
and software | |
15-33 |
Office
furniture and equipment | |
7 |
Leasehold
improvements | |
Over
the shorter of the related lease period or the life of the asset |
| F. | Fair
value of financial instruments: |
The
carrying values of cash and cash equivalents, other receivable, marketable equity securities and other accounts payable approximate
their fair value due to the short-term maturity of these instruments.
The
fair value of derivative warrant liabilities (refer to Note 9) was estimated using the Black Scholes Merton formula based on inputs
including (i) the price of the Company’s shares; (ii) the exercise price of the warrant; (iii) risk-free interest; (iv) term available
to exercise or redeem the security and (v) the volatility of the Company’s share during the relevant term.
| G. | Marketable
equity securities: |
Marketable
equity securities classified as available-for-sale are recorded at fair value. The fair value is based on the quoted prices of
such securities (level 1). Unrealized gains of available for sale securities are reflected in other comprehensive income. Unrealized
losses considered to be temporary are reflected in other comprehensive income; unrealized losses that are considered to be other-than-temporary
are charged to income as an impairment charge. Realized gains and losses are included in financial expenses, net.
Marketable
equity securities classified as trading are recorded at fair value. The fair value is based on the current market value. Unrealized
gains and losses before the securities are sold are reported in the income statement.
| H. | Investment
in Affiliate Company: |
Investment
in ordinary shares of an entity in which the Company can exercise significant influence but does not own a majority equity interest
or otherwise control is accounted for using the equity method and is included as an investment in an affiliate company in the
consolidated balance sheet. The Company records its share in undistributed earnings and losses since acquisition in the consolidated
statements of operations.
The
Company reviews its investment for other-than-temporary impairment whenever events or changes in business circumstances indicate
that the carrying value of the investment may not be fully recoverable.
Investment
in warrants of ordinary shares of a privately held entity without a readily determinable fair value, is recorded using the cost
method of accounting, carrying the investment at historical cost. Where an equity security is without a readily determinable fair
value, the Company may elect to estimate its fair value at cost minus impairment plus or minus changes resulting from observable
price changes.
| I. | Share-based
compensation: |
The
Company applies ASC 718-10, “Share-Based Payment,” which requires the measurement and recognition of compensation
expenses for all share-based payment awards made to employees and directors including employee stock options under the Company’s
stock plans based on estimated fair values.
ASC
718-10 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing
model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite
service periods in the Company’s statement of operations.
The
Company recognizes compensation expenses for the value of non-employee awards, which have graded vesting, based on the straight-line
method over the requisite service period of each award, net of estimated forfeitures.
The
Company estimates the fair value of stock options granted as equity awards using a Black-Scholes options pricing model. The option-pricing
model requires a number of assumptions, of which the most significant are share price, expected volatility and the expected option
term (the time from the grant date until the options are exercised or expire). Expected volatility was calculated based upon
actual historical stock price movements over the period, equal to the expected option term. The Company has historically not paid
dividends and has no foreseeable plans to issue dividends. The risk-free interest rate is based on the yield from governmental
zero-coupon bonds with an equivalent term. The expected option term is calculated for options granted to employees and directors
using the “simplified” method. Grants to non-employees are based on the contractual term. Changes in the determination
of each of the inputs can affect the fair value of the options granted and the results of operations of the Company.
| J. | Basic
and diluted net loss per share: |
Basic
loss per share is calculated by dividing the net loss by the weighted average number of Ordinary Shares outstanding during the
year. Diluted loss per share is calculated by dividing the net loss by the weighted average number of Ordinary Shares outstanding
plus the number of additional Ordinary Shares that would have been outstanding if all potentially dilutive Ordinary Shares had
been issued, using the treasury stock method, in accordance with ASC 260-10 “Earnings per Share.” Potentially dilutive
Ordinary Shares were excluded from the diluted loss per share calculation because they were anti-dilutive.
The weighted average number of Ordinary Shares outstanding has been retroactively
restated for the equivalent number of shares received by the accounting acquirer as a result of the reverse recapitalization as
if these shares had been outstanding as of the beginning of the earliest period presented.
The
following table present summarized basic and diluted per share and per ADS:
| |
Year
ended December 31, | |
| |
2018 | | |
2017 | | |
2016 | |
| |
| | |
| | |
| |
Net
Loss | |
| 14,657 | | |
| 15,942 | | |
| 1,913 | |
Basic
and diluted loss per share (in USD) | |
| (0.12 | ) | |
| (0.17 | ) | |
| (0.03 | ) |
| |
| | | |
| | | |
| | |
Basic
and diluted loss per ADS (in USD) | |
| (0.61 | ) | |
| (0.84 | ) | |
| (0.14 | ) |
| |
| | | |
| | | |
| | |
Weighted
average number of shares outstanding used in computing basic and diluted loss per share - in thousands | |
| 120,612 | | |
| 94,401 | | |
| 67,311 | |
| |
| | | |
| | | |
| | |
Weighted
average number of ADS outstanding used in computing basic and diluted loss per ADS - in thousands | |
| 24,122 | | |
| 18,880 | | |
| 13,462 | |
| K. | Research
and development expenses, net: |
Research
and development expenses, are charged to the statement of operations as incurred. Grants for the funding of approved research
and development projects are recognized at the time the Company is entitled to such grants, on the basis of the costs incurred
and applied as a deduction from the research and development expenses.
Certain
amounts in prior years consolidated financial statements have been reclassified to conform to the current year’s presentation.
| M. | Recent
Accounting Standards |
In
May 2014, the Financial Accounting Standards Board (the “FASB”) issued ASU 2014-09, Revenue from Contracts with Customers
(Topic 606) to achieve a consistent application of revenue recognition within the U.S., resulting in a single revenue model to
be applied by reporting companies under U.S. GAAP. Under the new model, recognition of revenue occurs when a customer obtains
control of the promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled
in exchange for those goods or services. In addition, the new standard requires that reporting companies disclose the nature,
amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new standard is effective
for us beginning in the first quarter of 2018; early adoption is prohibited. The new standard is required to be applied retrospectively
to each prior reporting period presented or retrospectively with the cumulative effect of initially applying it recognized at
the date of initial application. As the Company has not incurred revenues to date, the adoption of the standard did not have an
impact on its consolidated financial statements.
In
January 2016, the FASB issued an amended standard, ASU 2016-01— “Financial Instruments,” requiring changes to
recognition and measurement of certain financial assets and liabilities. The standard primarily affects equity investments, financial
liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. The Company
adopted ASU 2016-01 in the first quarter of 2018 and the impact on its consolidated financial statements is not material.
In
February 2016, the FASB issued a new lease accounting standard, ASU 2016-02 (Topic 842)— “Leases,” requiring
the recognition of lease assets and liabilities on the balance sheet. This standard is effective beginning in the first quarter
of 2019; early adoption is permitted. The company will adopt Topic 842 effective January 1, 2019 using a modified retrospective
method and will not restate comparative periods. As of December 31, 2018, approximately USD 1,500 of lease assets and liabilities
will be recognized on our balance sheet upon adoption.
In
June 2016, the FASB issued a new standard, ASU 2016-13 -“Financial Instruments—Credit Losses,” requiring measurement
and recognition of expected credit losses on certain types of financial instruments. It also modifies the impairment model for
available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration
since their origination. This standard is effective beginning in the first quarter of 2020; early adoption is permitted starting
from the first quarter of 2019. The Company do not expect that the adoption of this standard will have a significant impact on
the financial position or results of operations.
In
May 2017, the FASB issued ASU 2017-09 - “Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting,”
which clarifies when a change to terms or conditions of a share-based payment award must be accounted for as a modification. The
guidance requires modification accounting if the vesting condition, fair value or the award classification is not the same both
before and after a change to the terms and conditions of the award. The Company adopted ASU 2017-09 in the first quarter of 2018
and the impact on its consolidated financial statements is not material.
In
June 2018, the FASB issued ASU No. 2018-07 “Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based
Payment Accounting.” These amendments expand the scope of Topic 718, Compensation - Stock Compensation (which currently
only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services.
Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. The ASU supersedes
Subtopic 505-50, Equity - Equity-Based Payments to Non-Employees. The guidance is effective for fiscal years beginning after December
15, 2018, including interim periods within that fiscal year. Early adoption is permitted. The Company is assessing ASU 2018-07
and does not expect it to have a material impact on its consolidated financial statements.
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Investment in Affiliated Company
|
12 Months Ended |
Dec. 31, 2018 |
Equity Method Investments and Joint Ventures [Abstract] |
|
INVESTMENT IN AFFILIATE COMPANY |
NOTE
4 – INVESTMENT IN AFFILIATED COMPANY
On
August 4, 2016, the Company entered into a Share Purchase Agreement (“SPA”) to acquire up to 36% of Rail Vision Ltd.
(“Rail Vision”) shares at an average price per share of USD 60 and 3 types of Warrants to purchase ordinary shares
of Rail Vision: Warrant 1, Warrant 2 and Warrant 3 exercisable within 18 months, 30 months and 24 months at an exercise price
of USD 189, USD 270 and USD 216, respectively.
On
November 7, 2016 the Company and other investors completed the investment in Rail Vision. As a result, the Company purchased a
total of 23,692 ordinary shares of Rail Vision at an average price per share equal to USD 60 and 23,692 of Warrants 1, 23,692
of Warrants 2 and 2,704 of Warrants 3. Total investment in Rail Vision amounted to USD 1,422 and allocated to warrants investment
and Investment in the ordinary shares based on the relative fair value, as of the date of investment completion, of
each of the elements. Warrants investment was recorded in other investments in the amount of USD 66. Investment in the ordinary
shares of Rail Vision was recorded in the amount of USD 1,356 as an investment in an affiliate company, as a result of completing
the investment, the Company’s holdings in Rail Vision as of November 7, 2016 amounted to 32% (and 48% on a fully diluted
basis).
As
of December 31, 2018 the Company holds 35.91% (and 33.81% on a fully diluted basis).
| A. | Activity
in investment in the affiliated company is as follows: |
| |
Investment
in affiliated company | |
As
of January 1, 2017 | |
| 1,248 | |
Gain
from Issuance of shares to third party (see note 4A1) | |
| 1,258 | |
Equity
in net loss of affiliated company | |
| (1,102 | ) |
As
of December 31, 2017 | |
| 1,404 | |
Exercise
of Warrant investment (see note 4C2) | |
| 9,069 | |
Gain
from Issuance of shares to third party (see note 4A2) | |
| 453 | |
Equity
in net loss of affiliated company | |
| (3,358 | ) |
As
of December 31, 2018 | |
| 7,568 | |
| 1. | During
September and October 2017, Rail Vision raised USD 5,843 (gross) through private placements
of its Ordinary Shares. As a result, the Company’s holdings in Rail Vision decreased
to 24.76% (and 35.97% on a fully diluted basis) and the Company recorded a gain of USD
1,258 from an issuance to a third party in “Equity in net loss (gain) of affiliated
company.” |
| 2. | From
February through May 2018, Rail Vision raised USD 2,700 (gross) through private placement
of its Ordinary Shares. As a result, the Company’s holdings in Rail Vision decreased
from 32.74% to 29.71% (and 33.9% on a fully diluted basis) and the Company recorded a
gain of USD 453 from issuance to a third party in “Equity in net loss (gain) of
affiliated company.” |
| 3. | During
2018 the Company has increased its holdings in Rail Vision by exercising in full warrants
1 and warrants 3 (see note 4C2). |
| B. | The
following tables present summarized financial information derived from Rail Vision’s
consolidated financial statements, which are prepared on the basis of U.S. GAAP: |
Balance
sheet data: | |
As
of December 31, | |
| |
2018 | | |
2017 | |
| |
USD
in thousands | |
Current
assets | |
| 4,714 | | |
| 2,914 | |
Long-term
assets | |
| 846 | | |
| 435 | |
Current
liabilities | |
| (633 | ) | |
| (504 | ) |
Equity | |
| (4,927 | ) | |
| (2,845 | ) |
Operating
data: | |
Year
ended
December 31, | |
| |
2018 | | |
2017 | |
| |
USD
in thousands | |
Revenue | |
| – | | |
| – | |
Operating
loss | |
| (8,598 | ) | |
| (3,869 | ) |
Net
loss | |
| (8,646 | ) | |
| (3,847 | ) |
Activity
in investment in a warrants investment is as follows:
| |
Other
Investments | |
As
of January 1, 2017 | |
| 66 | |
Revaluation
(see note 4C1) | |
| 3,967 | |
As
of December 31, 2017 | |
| 4,033 | |
Warrants
exercised (see note 4C2) | |
| (4,004 | ) |
Revaluation
(see note 4C1) | |
| 316 | |
As
of December 31, 2018 | |
| 345 | |
| 1. | As
a result of the observable price change in Rail Vision’s equity instruments as
indicated by its private placements, the Company revaluated the carrying value of warrants
held by the Company to purchase shares of Rail Vision. |
| 2. | On
January 10, July 12 and November 1, 2018 the Company increased its holdings in Rail Vision
by exercising warrants into 26,396 of Rail Vision’s Ordinary Shares (23,692 of
Warrants 1 and 2,704 of Warrants 3) for an aggregate contribution of USD 9,069 of which
USD 5,065 was paid in cash and USD 4,004 represented the fair value of the exercised
warrants (previously recorded as other investments). Following the exercise, the Company’s
holdings in Rail Vision as of November 1, 2018 amounted to 35.91% (and 33.81% on a fully
diluted basis). |
|
X |
- DefinitionThe entire disclosure for investments, including all tables.
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Fixed Assets, Net
|
12 Months Ended |
Dec. 31, 2018 |
Property, Plant and Equipment [Abstract] |
|
FIXED ASSETS, NET |
NOTE 5 – FIXED ASSETS,
NET
| |
December 31, | |
| |
2018 | | |
2017 | |
| |
USD in thousands | |
Cost: | |
| | |
| |
Computers and Software | |
| 539 | | |
| 201 | |
Office furniture and equipment | |
| 154 | | |
| 84 | |
Leasehold improvements | |
| 389 | | |
| 67 | |
| |
| 1,082 | | |
| 352 | |
Less – accumulated depreciation | |
| 295 | | |
| 63 | |
Fixed Assets, Net | |
| 787 | | |
| 289 | |
Depreciation expenses for the
years ended December 31, 2018 and December 31, 2017 were USD 235 and USD 49, respectively.
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Employee Rights Upon Retirement
|
12 Months Ended |
Dec. 31, 2018 |
Retirement Benefits [Abstract] |
|
EMPLOYEE RIGHTS UPON RETIREMENT |
NOTE 6 – EMPLOYEE RIGHTS
UPON RETIREMENT
Israeli labor law generally
requires payment of severance pay upon dismissal of an employee or upon termination of employment in certain other circumstances.
Pursuant to section 14 of the
Severance Compensation Act, 1963, the Company's employees covered under this section are entitled to monthly deposits, at a rate
of 8.33% of their monthly salary, made in their name with insurance companies. Payments in accordance with section 14 relieve the
Company from any future severance payments in respect of those employees.
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Other Current Payables
|
12 Months Ended |
Dec. 31, 2018 |
Payables and Accruals [Abstract] |
|
OTHER CURRENT PAYABLES |
NOTE 7 – OTHER CURRENT
PAYABLES
| |
December 31, | |
| |
2018 | | |
2017 | |
| |
USD in thousands | |
| |
| | |
| |
Employees and related expenses | |
| 648 | | |
| 513 | |
Accrued expenses | |
| 295 | | |
| 283 | |
Other payables | |
| 4 | | |
| 21 | |
| |
| 947 | | |
| 817 | |
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Commitments and Contingencies Liabilities
|
12 Months Ended |
Dec. 31, 2018 |
Commitments and Contingencies Disclosure [Abstract] |
|
COMMITMENTS AND CONTINGENCIES LIABILITIES |
NOTE 8 – COMMITMENTS AND
CONTINGENCIES LIABILITIES
On
January 28, 2019, the Company's general assembly approved the extension of the research and development services agreement
with Magna for software development in the area of ADAS. Within the framework of the specific program and subject to the conditions
prescribed in the agreement, Magna will provide research and development services for 12 months with an option to extend the agreement
for two periods. According to the agreement, the monthly payment to Magna for the research and development services will not exceed
NIS 235 (approximately USD 65).
| B. | Israel Innovation Authority |
The Company obtained grants from the Israel Innovation Authority ("IIA") for participation
in research and development for the years 2011 through 2013, and, in return, the Company is obligated to pay royalties amounting
to 3%-5% of its future sales up to the amount of the grant. The grant is linked to the exchange rate of the dollar and bears interest
of LIBOR per annum.
Through the years ended December 31, 2018,
2017 and 2016 total grants obtained amounted to USD 567, USD 613 and USD 553, respectively.
The
refund of the grants is contingent upon the successful outcome of the Company's research and development programs and the
attainment of sales. The Company has no obligation to refund these grants, if sales are not generated. The financial risk is assumed
completely by the Government of Israel. The grants are received from the government on a project-by-project basis. If the project
fails, the Company has no obligation to repay any grant received for the specific unsuccessful or aborted project.
| C. | Lease
Facilities and Cars |
On September
1, 2018 the Company entered into an office lease agreement, instead of the old offices, which will end on March 31, 2021. The Company
has an option to extend the lease agreement for an additional period of 36 months. According to the lease agreement, the monthly
payment is approximately USD 23.
The Company
also leases vehicles under various operating leases, which expire on various dates, the latest of which is in 2021.
Future minimum lease payment for all
existing operating lease as of December 31, 2018 are as follows:
| |
USD In Thousands | |
2019 | |
| 412 | |
2020 | |
| 373 | |
2021 | |
| 90 | |
Total | |
| 875 | |
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Derivative Warrants Liabilities
|
12 Months Ended |
Dec. 31, 2018 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
|
DERIVATIVE WARRANTS LIABILITIES |
NOTE 9 – DERIVATIVE WARRANTS
LIABILITIES (refer to note 10B1)
| A. | Fair
Value Measurements: |
Level
3 Measurements:
As
quoted prices in active markets for identical or similar financial instruments are not available, the Company uses directly and
indirectly observable inputs in the valuation of its derivative warrant liabilities, based on the Black Scholes Merton formula.
The following inputs were used in the fair value measurement of these derivative warrant liabilities:
Weighted average of inputs | |
As of December 31, | |
| |
2018 | | |
2017 | |
Share price | |
$ | 0.33 | | |
$ | 0.80 | |
Exercise price | |
$ | 1.02 | | |
$ | 1.10 | |
Expected volatility | |
| 73.7 | % | |
| 98 | % |
Risk-free interest | |
| 0.48 | % | |
| 0.11 | % |
Dividend yield | |
| 0 | % | |
| 0 | % |
Expected life of up to (years) | |
| 0.16 | | |
| 0.82 | |
Issuance Date | |
Outstanding and Exercisable as of December 31, 2018 | | |
Exercise Price Per Share | |
Exercisable Through |
| |
| | |
| |
|
Series A (Mar-2016) (10B(a)) | |
| -- | | |
NIS 3 ($0.86) | |
August 2017 |
Series B (Mar-2016) (10B(a)) | |
| 9,752,984 | | |
NIS 4 ($1.53) | |
February 2019 |
Series A (May-2016) (10B(b)) | |
| -- | | |
NIS 3 ($0.86) | |
November 2017 |
Series B (May-2016) (10B(b)) | |
| 2,028,568 | | |
NIS 4 ($1.53) | |
May 2019 |
Series E (Oct-2016) (10B(c)) | |
| 2,687,197 | | |
NIS 3 ($0.86) | |
October 2019 |
Activity
in such liabilities measured on a recurring basis is as follows:
| |
Series A (Mar-2016) | | |
Series B (Mar-2016) | | |
Series A (May-2016) | | |
Series B (May-2016) | | |
Series E (Oct-2016) | | |
Total | |
As of December 31, 2016 | |
| 3 | | |
| 16 | | |
| 3 | | |
| 17 | | |
| 92 | | |
| 131 | |
Exercised | |
| (7,792 | ) | |
| (1,734 | ) | |
| (327 | ) | |
| -- | | |
| (387 | ) | |
| (10,240 | ) |
Revaluation of warrants | |
| 7,789 | | |
| 2,772 | | |
| 324 | | |
| 321 | | |
| 974 | | |
| 12,180 | |
As of December 31, 2017 | |
| -- | | |
| 1,054 | | |
| -- | | |
| 338 | | |
| 679 | | |
| 2,071 | |
Revaluation of warrants | |
| -- | | |
| (1,054 | ) | |
| -- | | |
| (338 | ) | |
| (679 | ) | |
| (2,071 | ) |
As of December 31, 2018 | |
| -- | | |
| -- | | |
| -- | | |
| -- | | |
| -- | | |
| -- | |
In
accordance with ASC-820-10-50-2(g), the Company has performed a sensitivity analysis of the derivative warrant liabilities of the
Company which are classified as level 3 financial instruments. The Company recalculated the value of warrants by applying a +/-
5% changes to the input variables in the Black-Scholes model that vary overtime, namely, the volatility and the risk-free rate.
A 5.0% decrease or increase in the risk free rate and in the volatility would not have materially changed the value of the warrants;
the value of the warrants is not strongly correlated with small changes in interest rates or volatility.
|
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- DefinitionThe entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts.
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Shareholders' Equity
|
12 Months Ended |
Dec. 31, 2018 |
Equity [Abstract] |
|
SHAREHOLDERS' EQUITY |
NOTE 10 – SHAREHOLDERS'
EQUITY
| A. | The rights of Ordinary Shares are as follows: |
The Ordinary Shares confer upon
the holders the right to receive notice to participate and vote in general meetings of shareholders of the Company, the right to
receive dividends, if declared, and the right to participate in a distribution of the surplus of assets upon liquidation of the
Company.
| B. | Issuance of shares, warrants and options |
| (a) | On March 1, 2016, the Company raised USD 4,482 (gross) through a private placement of its Ordinary
Shares. The Company issued a total of 9,994,267 Ordinary Shares, (NIS 1.75 per share, approximately $0.45 per share) and a total
of 21,531,390 warrants ("Warrants A" and "Warrants B") to purchase one Ordinary Share for every share purchased
in the private placement: 9,994,267 Warrants A at an exercise price of NIS 3 per share, which are exercisable until the 18 month
anniversary of the date of issuance and 11,537,123 Warrants B at an exercise price of NIS 4 per share which are exercisable until
the 36 month anniversary of the date of issuance. After deducting closing costs and fees, the Company received proceeds of approximately
USD 4,100, net of issuance expenses. |
In accordance with ASC 815, as the
exercise price of Warrants A and Warrants B is denominated in a currency other than the Company's functional currency, the warrants
were recorded in liabilities at their fair value as of the date of issuance, in the amount of USD 1,581. Issuance expenses attributable
to the warrants were recorded in the statements of operations. The remainder of the proceeds, allocated to the Ordinary Shares
issued, in the amount of USD 2,661, net of issuance expenses attributable to the Ordinary Shares, was recorded in equity.
As
of December 31, 2018, warrants A have been exercised in full and the outstanding balance of warrants B is 9,752,984 (see note
17E).
| (b) | On May 17, 2016, the Company raised USD 943 (gross) through a private placement of its Ordinary
Shares. The Company issued a total of 2,028,568 Ordinary Shares, (NIS 1.75 per share, approximately $0.46 per share) and a total
of 4,057,136 Warrants A and Warrants B to purchase one Ordinary Share for every share purchased in the private placement: 2,028,568
Warrants A at an exercise price of NIS 3 per share which are exercisable until the 18 month anniversary of the date of issuance
and 2,028,568 Warrants B at an exercise price of NIS 4 per share which are exercisable until the 36 month anniversary of the date
of issuance. After deducting closing costs and fees, the Company received proceeds of approximately USD 858, net of issuance expenses. |
In accordance with ASC 815, as the exercise price of Warrants A and Warrants B is denominated in a currency other than the Company's
functional currency, the warrants were recorded in liabilities at their fair value as of the date of issuance, in the amount of
USD 258. Issuance expenses attributable to the warrants were recorded in the statements of operations. The remainder of the proceeds,
allocated to the Ordinary Shares issued, in the amount of USD 623, net of issuance expenses attributable to the ordinary shares,
was recorded in equity.
As of December 31, 2018, the
outstanding balance of warrants B is 2,028,568 (see note 17E).
| (c) | On October 26, 2016, the Company raised USD 1,410 (gross) through a private placement of its Ordinary
Shares. The Company issued a total of 3,027,197 Ordinary Shares, (NIS 1.75 per share, approximately $0.46 per share) and a total
of 3,178,557 warrants E ("Warrants E") to purchase one Ordinary Share for every share purchased in the private placement
at an exercise price of NIS 3 per share which are exercisable until the 36 month anniversary of the date of issuance. After deducting
closing costs and fees, the Company received net proceeds of approximately USD 1,287. |
In accordance with ASC 815, as the exercise price of Warrant E is denominated in a currency other than the Company's functional
currency, the advances related to the warrants, in the amount of USD 139, were recorded in liabilities at their fair value and
the receipts on account of shares and corresponding receivables on account of shares, at the net amount of USD 1,160, were recorded
in equity.
As of December 31, 2018, the
outstanding balance of warrants E is 2,687,197.
| (d) | On March 29 and April 23, 2017, the Company raised USD 11,645 (gross) through three private placements
of its Ordinary Shares. The Company issued as follows: |
| (1) | A total of 12,363,413 Ordinary Shares, (NIS 1.90 per share,
approximately $0.52 per share) and a total of 12,784,331 Warrants F ("Warrant F") to purchase 1 Ordinary Share for
every share purchased in the private placement at an exercise price of USD 0.80 per share which are exercisable until the 24 month
anniversary of the date of issuance. |
| (2) | A total of 6,580,945 Ordinary Shares, (NIS 2.10 per share,
approximately $0.58 per share) and a total of 6,736,183 Warrants F to purchase 1 Ordinary Share for every share purchased in the
private placement at an exercise price of USD 0.80 per share which are exercisable until the 24 month anniversary of the date
of issuance. |
| (3) | A total of 2,083,332 Ordinary Shares, (NIS 2.40 per share,
approximately $0.66 per share) and a total of 1,051,665 Warrants G ("Warrant G") to purchase 1 Ordinary Share for
every share purchased in the private placement at an exercise price of USD 0.95 per share which are exercisable until the 18 month
anniversary of the date of issuance. |
After deducting closing costs
and fees, the Company received net proceeds of approximately USD 10,745.
As of December 31, 2018, the
outstanding balance of Warrants F is 19,033,159, the remaining 1,001,665 Warrants G expired on October 26, 2018.
| (e) | On June 21 and June 25, 2018, the Company raised USD 12,351 (gross) through private placement of
its Ordinary Shares with several leading Israeli institutional investors and several private investors. The Company issued a total
of 21,963,411 Ordinary Shares, (NIS 2.05 per Share, approximately $0.56 per share). In addition, the Company issued warrants F-1
("Warrant F-1") to purchase 22,067,679 Ordinary Shares at an exercise price of $0.80 per share, exercisable until the
24 month anniversary of the date of issuance. |
After deducting
closing costs and fees, the Company received net proceeds of approximately USD 11,208.
As of December 31, 2018, the outstanding
balance of Warrants F-1 is 22,067,679.
| 2. | Shares and warrants to service providers:
The Company accounts for Ordinary Shares and warrants issued to non-employees using the guidance of ASC 505-50, "Equity-Based Payments to Non-Employees," whereby the fair value of such ordinary shares and warrant grants is determined at the earlier of the date at which the non-employee's performance is completed or a performance commitment is reached. |
| (a) | Shares granted to service provider: |
On November 12, 2017, the Company
issued 50,000 Ordinary Shares to a service provider. The Company recorded in its 2017 statement of operations an expense of USD
53 in respect of such grant, included in general and administrative expenses.
On February 14, 2018, the Company
issued 25,000 Ordinary Shares to a service provider. The Company recorded in its 2018 statement of operations an expense of USD
19 in respect of such grant, included in general and administrative expenses.
| (b) | Warrants granted to service providers:
The fair value for the warrants granted to service providers was estimated on the measurement date determined using a Black-Scholes option pricing model, with the following weighted-average assumptions weighted average volatility of 72.67%, risk free interest rates of 0.3%, dividend yields of 0% and a weighted average life of the options of 1.5 - 3. |
| (1) | On January 5, 2016, the Company granted to an intermediator in its reverse recapitalization transaction
2,392,275 options to purchase 2,392,275 of its Ordinary Shares, which were immediately exercised. As such share-based award was
granted in connection with an equity transaction, the relating compensation costs were recorded in equity with no impact on the
statement of operations. |
| (2) | On March 1, 2016, the Company granted to a management consulting service provider 1,000,000 options
to purchase 1,000,000 Ordinary Shares at an exercise price of NIS 3 (approximately $0.77 at the grant date). These options vest
in 8 quarterly tranches over a period of 2 years (consistent with the contractual term of the service) and expire 3 years from
the vesting date in relation to each tranche. The Company recorded in its 2018, 2017 and 2016 statement of operations an expense
of USD 37, USD 227 and USD 46, respectively in respect of such grant, included in general and administrative expenses. |
| (3) | On March 1, 2016, the Company granted to an intermediator in its March 1, 2016 private placement
462,042 Warrants A to purchase 462,042 Ordinary Shares at an exercise price of NIS 3 (approximately $0.77 at the grant date). These
options expire 18 months after their grant date and are fully vested as of their grant date. The Company recorded in its 2016 statement
of operations an expense of USD 11, included in general and administrative expenses, in respect of the portion of such grant allocated
to the instruments issued in the March 1, 2016 private placement that were recorded in liabilities. In respect of the portion of
such grant allocated to the instruments issued in the March 1, 2016 private placement that were recorded in equity, the relating
compensation costs were recorded in equity with no impact on the statement of operations. As of December 31, 2017, all warrants
were exercised. |
| (4) | On May 17, 2016, the Company granted to an intermediator in its May 2016 private placement 101,428
Warrants A to purchase 101,428 Ordinary Shares at an exercise price of NIS 3 (approximately $0.8 at the grant date). These options
expire 18 months after their grant date and are fully vested as of their grant date. The Company recorded in its 2016 statement
of operations an expense of USD 2, included in general and administrative expenses, in respect of the portion of such grant allocated
to the instruments issued in the May 2016 private placement that were recorded in liabilities. In respect of the portion of such
grant allocated to the instruments issued in May 2016 private placement that were recorded in equity, the relating compensation
costs were recorded in equity with no impact on the statement of operations. As of December 31, 2017, all warrants were exercised. |
| (5) | On September 30, 2016, the Company granted to an intermediator in its October 2016 private placement
151,360 Warrants E to purchase 151,360 Ordinary Shares at an exercise price of NIS 3 (approximately $0.8 at the grant date). These
options expire 36 months after their grant date and are fully vested as of their grant date. The Company recorded in its statement
of operations an expense of USD 1, included in general and administrative expenses, in respect of the portion of such grant allocated
to the instruments issued in the October 2016 private placement that were recorded in liabilities. In respect of the portion of
such grant allocated to the instruments issued in the March 1 private placement that were recorded in equity, the relating compensation
costs were recorded in equity with no impact on the statement of operations. As of December 31, 2018, the outstanding balance of
Warrants E is 33,714. |
| (6) | On March 29 and April 23, 2017, the Company granted to an intermediator in its March and April
2017 private placements 576,156 Warrants F to purchase 576,156 Ordinary Shares at an exercise price of USD 0.8. These options expire
24 months after their grant date and are fully vested as of their grant date. In respect of the portion of such grant allocated
to the instruments issued in the private placements, the relating compensation costs were recorded in equity with no impact on
the statement of operations. As of December 31, 2018, the outstanding balance of Warrants F is 545,301. |
| (7) | On April 23, 2017, the Company granted to an intermediator in its April 2017 private placement
10,000 Warrants G to purchase 10,000 Ordinary Shares at an exercise price of USD 0.95. These options expire 18 months after their
grant date and are fully vested as of their grant date. In respect of the portion of such grant allocated to the instruments issued
in the private placement, the relating compensation costs were recorded in equity with no impact on the statement of operations. |
| (8) | On February 1, 2017, the Company granted to two service providers 380,000 options to purchase 380,000
Ordinary Shares at an exercise price of NIS 1.95 (approximately $0.52 per share at the grant date). The options vest over the next
11 quarters until fully vested on September 30, 2019. The Company recorded in its 2018 and 2017 statement of operations an expense
of USD 29 and USD 88, respectively in respect of such grant, included in general and administrative expenses. |
| (9) | On April 19, 2017, the Company granted to several service providers options to purchase a total
of 220,000 Ordinary Shares at an exercise price of NIS 1.95 (approximately $0.45 per share at the grant date). The options vest
over 2017 through 2019. The Company recorded in its 2018 and 2017 statement of operations an expense of USD 9 and USD 71, respectively
in respect of such grant, included in general and administrative expenses. |
| (10) | On August 27, 2017, the Company granted to Magna's employees options to purchase a total
of 970,000 Ordinary Shares at an exercise price of NIS 3.57 (approximately $0.99 per share at the grant date). The options vest
over 12 quarters until fully vested on December 31, 2019. The Company recorded in its 2018 and 2017 statement of operations an
expense of USD 43 and USD 112, respectively in respect of such grant, included in research and development expenses. |
| (11) | On August 2017, the Company granted to several service providers options to purchase a total of
550,000 Ordinary Shares at an exercise price of NIS 6.96 (approximately $1.97 per share at the grant date). The options vest over
2017 through 2020. The Company recorded in its 2018 and 2017 statement of operations an expense of USD 17 and USD 14, respectively,
in respect of such grant, included in marketing and sales and in general and administrative expenses. |
| (12) | On November 30, 2017, the Company granted to several service providers options to purchase a total
of 100,000 Ordinary Shares at an exercise price of NIS 5.15 (approximately $1.47 per share at the grant date). The options vest
over 2018 through 2020. The Company recorded in its 2018 and 2017 statement of operations an expense of USD 3 each year, in respect
of such grant, included in general and administrative expenses. |
| (13) | On March 25, 2018, the Company granted to a service provider options to purchase a total of 500,000
Ordinary Shares at an exercise price of NIS 3 (approximately $0.86 per share at the grant date). The options vest equally over
a period of 4 quarters ending January 1, 2019. The Company recorded in its 2018 statement of operations an expense of USD 78 in
respect of such grant, included in general and administrative expenses. |
| (14) | On April 23, 2018, the Company granted to a service provider options to purchase a total of 100,000
Ordinary Shares at an exercise price of NIS 3.78 (approximately $1.06 per share at the grant date). The options vest as one third
of the options after one year and balance of the remaining options shall vest equally over 8 quarters until fully vested on March
31, 2021. |
| (15) | On June 21 and June 25, 2018, the Company granted to an intermediator in its private placement
104,268 Warrants F-1 to purchase 104,268 Ordinary Shares at an exercise price of USD 0.8. These options expire 24 months after
their grant date and are fully vested as of their grant date. In respect of the portion of such grant allocated to the instruments
issued in the private placement, the related compensation costs were recorded in equity with no impact on the statement of operations.
As of December 31, 2018, the outstanding balance of Warrants F-1 is 104,268. |
| 3. | Shares and options to employees |
The fair value of options granted
was estimated using the Black-Scholes option pricing model, and based on the following assumptions:
| |
| As of December 31,
| |
| |
| 2018 | | |
| 2017 | |
| |
| | | |
| | |
Exercise price | |
$ | 1.02-$1.08 | | |
$ | 0.53-$1.7 | |
Expected volatility | |
| 66%-69 | % | |
| 38%-88 | % |
Risk-free interest | |
| 0.48%-0.83 | % | |
| 0.17%-0.43 | % |
Expected life of up to (years) | |
| 3.01-3.56 | | |
| 2.32-3.33 | |
The following table summarizes
the option activity for the year ended December 31, 2018 for options granted to employees, officers and directors:
| |
Number of Options | | |
Weighted average exercise price | | |
Weighted Average remaining contractual term (in years) | |
Outstanding at January 1, 2018 (a) | |
| 10,541,954 | | |
$ | 0.69 | | |
| | |
Granted (b) | |
| 2,740,000 | | |
$ | 1.06 | | |
| | |
Exercised | |
| (314,415 | ) | |
$ | 0.21 | | |
| | |
Forfeited | |
| (1,422,917 | ) | |
$ | 1.16 | | |
| | |
Outstanding at December 31, 2018 | |
| 11,544,622 | | |
$ | 0.76 | | |
| 1.49 | |
Exercisable at December 31, 2018 | |
| 6,914,622 | | |
| | | |
| 1.14 | |
As of December 31, 2018, there
was USD 1,808 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under
the Plan. This cost is expected to be recognized over a weighted-average period of 1.31 years.
| (a) | Options Granted during 2016 and 2017 |
On April 17, 2016, the Company
granted to its Chief Financial Officer options to purchase an aggregate of 1,794,205 Ordinary Shares at an exercise price of $0.08
per share. The options vest over 10 quarters until fully vested on June 30, 2018. The Company recorded in its 2018, 2017 and 2016
statement of operations expenses of USD 173, USD 346 and USD 346, respectively, each year in respect of such grant, included in
general and administrative expenses.
On January 26, 2017, the Company
granted to three members of its Board of directors options to purchase an aggregate of 300,000 Ordinary Shares, each, at an exercise
price of NIS 1.95 (approximately $0.52 per share at the grant date). The options vest over 12 quarters until fully vested on September
30, 2019. The company recorded in its 2018 and 2017 statement of operations an expense of USD 45 and USD 56, respectively, in respect
of such grant, included in general and administrative expenses.
On May 4, 2017, the Company
granted to its Chief Executive Officer options to purchase an aggregate of 2,000,000 Ordinary Shares at an exercise price NIS 2.31
(approximately $0.64 per share at the date grant). The options vest over 12 quarters until fully vested on December 31, 2019. The
company recorded in its 2018 and 2017 statement of operations an expense of USD 459 each year, in respect of such grant, included
in general and administrative expenses.
On May 4, 2017, the Company
granted to three of its senior officers options to purchase an aggregate of 700,000 Ordinary Shares, each, at an exercise price
NIS 1.95 (approximately $0.52 per share at the date grant). The options vest over 12 quarters until fully vested on December 31,
2019. The company recorded in its 2018 and 2017 statement of operations an expense of USD 527 and USD 615, respectively, in respect
of such grant.
On August 27, 2017, the Company
granted to four members of its board of directors options to purchase an aggregate of 300,000 Ordinary Shares, each, at an exercise
price of NIS 6.13 (approximately $1.7 per share at the grant date). The options vest over 12 quarters until fully vested on September
30, 2019 for two of the directors and on July 16, 2020 for the other. The company recorded in its 2018 and 2017 statement of operations
an expense of USD 102 and USD 107, respectively, in respect of such grant, included in general and administrative expenses.
On November 30, 2017, the Company
granted to its Chief Operating Officer options to purchase an aggregate of 700,000 Ordinary Shares at an exercise price NIS 3.78
(approximately $1.08 per share at the date grant). The options vest over 12 quarters until fully vested on September 30, 2020.
The company recorded in its 2018 and 2017 statement of operations an expense of USD 95 USD 24, respectively in respect of such
grant, included in in Research and Development expenses.
During 2017, the Company granted
to its employee's options to purchase an aggregate of 2,175,000 Ordinary Shares at an average exercise price of $0.96 per
share. The options vest over 12 quarters until fully vested.
| (b) | Options Granted during 2018 |
On June 18, 2018, the Company
issued options to purchase 100,000 Ordinary Shares to its chairman of the board of directors at an exercise price of NIS 3.78 (approximately
$1.06 per share at the grant date). One third of the options shall vest after one year and the balance of the remaining options
shall vest over 8 quarters until fully vested on March 31, 2021. The Company recorded in its statement of operations an expense
of USD 4 in respect of such grant, included in General and Administrative expenses.
During 2018, the Company Granted
options to purchase 2,640,000 Ordinary Shares to its employees at an average exercise price of NIS 3.78 (approximately $1.06 per
share at the grant date). One third of the options shall vest after one year and the balance of the remaining options shall vest
over 8 quarters until fully vested.
| 4. | Share Based Compensation Expense: |
The total share-based compensation
expense, related to shares, options granted to employees, directors and service providers was comprised, at each period, as follows:
| |
Year
ended December 31, | |
| |
2018 | | |
2017 | | |
2016 | |
| |
USD in thousands | |
| |
| | |
| | |
| |
Research and Development | |
| 621 | | |
| 491 | | |
| -- | |
Marketing and Sales | |
| 196 | | |
| 443 | | |
| -- | |
General and administrative | |
| 1,223 | | |
| 1,521 | | |
| 405 | |
Total share-based compensation expense | |
| 2,040 | | |
| 2,455 | | |
| 405 | |
|
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- DefinitionThe entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.
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Research and Develoment, Net
|
12 Months Ended |
Dec. 31, 2018 |
Research and Development [Abstract] |
|
RESEARCH AND DEVELOMENT, NET |
NOTE 11 – RESEARCH AND
DEVELOMENT, NET
| |
Year
ended December 31, | |
| |
2018 | | |
2017 | | |
2016 | |
| |
USD in thousands | |
| |
| | |
| | |
| |
Payroll and related expenses (*) | |
| 5,793 | | |
| 2,083 | | |
| 221 | |
Subcontracted work and consulting | |
| 1,744 | | |
| 1,238 | | |
| 588 | |
Share based payments to service provider | |
| 43 | | |
| 112 | | |
| -- | |
Rent and office maintenance | |
| 629 | | |
| 281 | | |
| -- | |
Travel expenses | |
| 76 | | |
| 79 | | |
| -- | |
Other | |
| 393 | | |
| 296 | | |
| 95 | |
Sales of prototypes | |
| (40 | ) | |
| -- | | |
| -- | |
| |
| 8,638 | | |
| 4,089 | | |
| 904 | |
| (*) | Includes Share-based payment of USD 578 and USD 379 in
2018 and 2017, respectively. |
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- DefinitionThe entire disclosure for research, development, and computer software activities, including contracts and arrangements to be performed for others and with federal government. Includes costs incurred (1) in a planned search or critical investigation aimed at discovery of new knowledge with the hope that such knowledge will be useful in developing a new product or service, a new process or technique, or in bringing about a significant improvement to an existing product or process; or (2) to translate research findings or other knowledge into a plan or design for a new product or process or for a significant improvement to an existing product or process whether intended for sale or the entity's use, during the reporting period charged to research and development projects, including the costs of developing computer software up to the point in time of achieving technological feasibility and in-process research and development acquired in a business combination consummated during the period.
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Marketing and Sales
|
12 Months Ended |
Dec. 31, 2018 |
Marketing and Sales [Abstract] |
|
MARKETING AND SALES |
NOTE 12 – MARKETING AND
SALES
| |
Year
ended December 31, | |
| |
2018 | | |
2017 | | |
2016 | |
| |
USD in thousands | |
| |
| |
Payroll and related expenses (*) | |
| 489 | | |
| 744 | | |
| 115 | |
Exhibitions, conventions and Travel expenses | |
| 189 | | |
| 113 | | |
| 80 | |
Consultants | |
| 249 | | |
| 128 | | |
| 15 | |
Other | |
| 60 | | |
| 30 | | |
| 14 | |
| |
| 987 | | |
| 1,015 | | |
| 224 | |
| (*) | Includes Share-based payment of USD 182 and USD 438 in
2018 and 2017, respectively. |
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- DefinitionThe entire disclosure for marketing and sales.
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General and Administrative
|
12 Months Ended |
Dec. 31, 2018 |
General and Administrative [Abstract] |
|
GENERAL AND ADMINISTRATIVE |
NOTE 13 – GENERAL AND
ADMINISTRATIVE
| |
Year
ended December 31, | |
| |
2018 | | |
2017 | | |
2016 | |
| |
USD in thousands | |
| |
| | |
| | |
| |
Payroll and related expenses (*) | |
| 1,776 | | |
| 1,532 | | |
| 815 | |
Share-based payments to service providers | |
| 179 | | |
| 452 | | |
| 59 | |
Professional services | |
| 1,071 | | |
| 1,213 | | |
| 829 | |
Directors fees and insurance (**) | |
| 361 | | |
| 320 | | |
| 93 | |
Travel expenses | |
| 54 | | |
| 65 | | |
| 36 | |
Rent and office maintenance | |
| 131 | | |
| 38 | | |
| 90 | |
Consultation fees to a related party | |
| -- | | |
| -- | | |
| 470 | |
Other | |
| 124 | | |
| 133 | | |
| 235 | |
| |
| 3,696 | | |
| 3,753 | | |
| 2,627 | |
| (*) | Includes Share-based payment of USD 893, USD 905 and USD
346 in 2018, 2017 and 2016, respectively. |
| (**) | Includes Share-based payment of USD 151 and USD 164 in
2018 and 2017, respectively. |
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- DefinitionThe entire disclosure for general and administrative.
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Financial Expense (Income) Net
|
12 Months Ended |
Dec. 31, 2018 |
Financial Expense (Income) Net [Abstract] |
|
FINANCIAL EXPENSE (INCOME) NET |
NOTE 14 – FINANCIAL EXPENSE
(INCOME) NET
| |
Year
ended December 31, | |
| |
2018 | | |
2017 | | |
2016 | |
| |
USD in thousands | |
| |
| | |
| | |
| |
Revaluation of securities, net | |
| (1 | ) | |
| (15 | ) | |
| (39 | ) |
Revaluation of other investments | |
| (316 | ) | |
| (3,967 | ) | |
| -- | |
Revaluation of derivative warrant liabilities | |
| (2,071 | ) | |
| 12,180 | | |
| (1,847 | ) |
Exchange rate differences | |
| 1,000 | | |
| (918 | ) | |
| (70 | ) |
Other | |
| (181 | ) | |
| (39 | ) | |
| 6 | |
| |
| (1,569 | ) | |
| 7,241 | | |
| (1,950 | ) |
|
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- DefinitionDisclosure of financial expense income net.
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Taxes on Income
|
12 Months Ended |
Dec. 31, 2018 |
Income Tax Disclosure [Abstract] |
|
TAXES ON INCOME |
NOTE 15 – TAXES ON
INCOME
| A. | The Company is subject to income taxes under Israeli tax laws: |
| 1. | Corporate tax rates in Israel |
The Israeli corporate tax rates
were 23%, 24% and 25% in the years 2018, 2017 and 2016, respectively.
In January 2016, the Law for
Amending the Income Tax Ordinance (No. 216) (Reduction of Corporate Tax Rate), 2016 was approved, which includes a reduction of
the corporate tax rate from 26.5% to 25%, effective from January 1, 2016.
In December 2016, the Israeli
Parliament approved the Economic Efficiency Law 2016 (Legislative Amendments for Applying the Economic Policy for the 2017 and
2018 Budget Years), which reduces the corporate income tax rate to 24% (instead of 25%) effective from January 1, 2017 and to 23%
effective from January 1, 2018.
| 2. | As of December 31, 2018, the Company generated net operation losses of approximately USD 18,711,
which may be carried forward and offset against taxable income in the future for an indefinite period. |
| 3. | The Company is still in its development stage and has not yet generated revenues, therefore, it
is more likely than not that sufficient taxable income will not be available for the tax losses to be utilized in the future. Therefore,
a valuation allowance was recorded to reduce the deferred tax assets to its recoverable amounts. |
| |
December 31, | |
| |
2018 | | |
2017 | | |
2016 | |
| |
USD in thousands | |
Deferred tax assets: | |
| | |
| | |
| |
Operating loss carryforward | |
| 18,711 | | |
| 8,838 | | |
| 2,636 | |
| |
| | | |
| | | |
| | |
Deferred taxes due to carryforward losses | |
| 4,303 | | |
| 2,033 | | |
| 606 | |
| |
| 4,303 | | |
| 2,033 | | |
| 606 | |
| |
| | | |
| | | |
| | |
Valuation allowance | |
| (4,303 | ) | |
| (2,033 | ) | |
| (606 | ) |
Net deferred tax asset | |
| -- | | |
| -- | | |
| -- | |
|
4. |
The Company has no uncertain tax positions and foreign sources of income. |
|
5. |
The Company has final tax assessments until and including 2016. |
|
X |
- DefinitionThe entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.
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Transactions and Balances with Interested and Related Parties
|
12 Months Ended |
Dec. 31, 2018 |
Related Party Transactions [Abstract] |
|
TRANSACTIONS AND BALANCES WITH INTERESTED AND RELATED PARTIES |
NOTE 16 – TRANSACTIONS AND
BALANCES WITH INTERESTED AND RELATED PARTIES
| |
Year
ended December 31, | |
| |
2018 | | |
2017 | | |
2016 | |
| |
USD in thousands | |
| |
| | |
| | |
| |
Commission paid to former controlling shareholder | |
| -- | | |
| -- | | |
| 429 | |
Subcontracted work and consulting | |
| 660 | | |
| 666 | | |
| 588 | |
Share-Based payments to service provider | |
| 43 | | |
| 112 | | |
| -- | |
| |
| 703 | | |
| 778 | | |
| 1,017 | |
| |
As of December 31, | |
| |
2018 | | |
2017 | |
| |
USD in thousands | |
| |
| | |
| |
Other accounts payable | |
| 53 | | |
| 57 | |
| |
| 53 | | |
| 57 | |
|
X |
- DefinitionThe entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.
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Subsequent Events
|
12 Months Ended |
Dec. 31, 2018 |
Subsequent Events [Abstract] |
|
SUBSEQUENT EVENTS |
NOTE 17 – SUBSEQUENT EVENTS
| A. | Investment in Rail Vision |
On March 13, 2019 Rail Vision
and Knorr-Bremse Systeme für Schienenfahrzeuge GmbH, an affiliate of Knorr-Bremse AG (Frankfurt: KBX), a global market leader
for braking systems and a leading supplier of other rail and commercial vehicle subsystems, (“KB”) signed an agreement
whereby KB will invest USD 10,000 in Rail Vision in consideration of an issuance of an aggregate number of 40,984 Ordinary Shares
of Rail Vision, at a price per share equal to USD 244 (the “PPS”) representing a post investment valuation of approximately
USD 47,000, reflecting 21.34% of the Company’s issued and outstanding capital. KB have also been issued an aggregate of 14,903
warrants to purchase up to 14,903 of Rail Vision’s Ordinary Shares at an exercise price per share equal to the PPS.
According to the agreement, the
consideration for the investment should be transferred to Rail Vision in two installments, USD 5,000 was transferred at the first
closing date on March 14, 2019 and an additional USD 5,000 will be transferred six months after.
Following the first closing date
of the KB investment, the Company’s holdings in Rail Vision amounted to 29.19% (and 27.53% on a fully diluted basis).
On May 17, 2018, the Company,
through its subsidiary Foresight Automotive, incorporated Eye-Net Mobile Ltd. (“Eye-Net”), in order to spin off the
activities dedicated to the design and development of V2X (vehicle-to-everything) cellular-based accident prevention solutions
(the “Activity”). Under the terms of the transaction, Foresight Automotive will transfer to Eye-Net, without any consideration,
all of its rights and intellectual property rights related to the Activity, including all employees related to the Activity. The
spin off was completed on January 1, 2019.
| C. | On January 27, 2019, the Company entered into a development agreement for manufacturing and engineering
consulting services, and an investment agreement with RH Electronics Ltd (“RH”). According to the agreement, RH, will
purchase approximately 1% of Foresight’s issued and outstanding Ordinary Shares for a total consideration of USD 1,000 at
a price per ADS of approximately USD 4.08 (reflecting the price of NIS 3.00 per ordinary share). As of the date of this report
the company issued 665,999 Ordinary Shares. |
| D. | Warrants B and F terms change |
During March and May 2016, the
Company issued warrants to purchase 11,781,552 Warrants B out of which (i) warrants to purchase 9,752,984 Ordinary Shares were
to expire on February 28, 2019, and (ii) warrants to purchase 2,028,568 Ordinary Shares will expire on May 16, 2019.
In addition, during March and
April 2017, the Company issued 19,033,159 Warrants F, out of which (i) warrants to purchase 12,296,976 Ordinary Shares will expire
on March 28, 2019, and (ii) warrants to purchase 6,736,183 Ordinary Shares will expire on April 23, 2019.
On February 18, 2019, the Company
resolved to extend the expiration date of Warrants B and Warrants F to December 31, 2019, and, subject to the warrant holders consent,
to change the exercise price of Warrants B from NIS 4.00 to USD 1.08.
| E. | On March 19, 2019, the Company raised USD 6,150 (gross) through a public offering of its ADSs.
The Company issued a total of 4,100,000 ADSs (20,500,000 Ordinary Shares) at USD 1.5 per ADS. In addition, the Company has granted
the underwriters a 45-day option to purchase up to additional 500,000 ADSs to cover over-allotments, if any, at the public offering
price, less the underwriting discounts and commissions. |
In accordance with ASC 855 “Subsequent
Events” the Company evaluated subsequent events through the date the consolidated financial statements were issued. The Company
concluded that no other subsequent events have occurred that would require recognition or disclosure in the consolidated financial
statements.
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- DefinitionThe entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business.
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Significant Accounting Policies (Policies)
|
12 Months Ended |
Dec. 31, 2018 |
Accounting Policies [Abstract] |
|
Basis of Presentation |
The
financial statements have been prepared in conformity with accounting principles generally accepted in United Sates of America
(“U.S. GAAP”).
|
Use of estimates in the preparation of financial statements |
| B. | Use
of estimates in the preparation of financial statements: |
The
preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect
the amounts reported in the financial statements and accompanying notes. The Company’s management believes that the estimates,
judgment and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments
and assumptions can affect reported amounts and disclosures made. Actual results could differ from those estimates.
|
Financial statement in U.S. dollars |
| C. | Financial
statement in U.S. dollars: |
The
functional currency of the Company is the U.S dollar (“dollar” or “USD”) since the dollar is the currency
of the primary economic environment in which the Company has operated and expects to continue to operate in the foreseeable future.
Transactions
and balances denominated in dollars are presented at their original amounts. Transactions and balances denominated in foreign
currencies have been re-measured to dollars in accordance with the provisions of ASC 830-10, “Foreign Currency Translation.”
All
transaction gains and losses from re-measurement of monetary balance sheet items denominated in non-dollar currencies are reflected
in the statement of operations as financial income or expenses, as appropriate.
|
Cash and cash equivalents |
| D. | Cash
and cash equivalents: |
Cash
equivalents are short-term highly liquid investments that are readily convertible to cash with maturities of three months or less
as of the date acquired.
|
Property and equipment |
| E. | Property
and equipment: |
Property
and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over
the estimated useful lives of the assets, at the following annual rates:
| |
% |
Computers
and software | |
15-33 |
Office
furniture and equipment | |
7 |
Leasehold
improvements | |
Over
the shorter of the related lease period or the life of the asset |
|
Fair value of financial instruments |
| F. | Fair
value of financial instruments: |
The
carrying values of cash and cash equivalents, other receivable, marketable equity securities and other accounts payable approximate
their fair value due to the short-term maturity of these instruments.
The
fair value of derivative warrant liabilities (refer to Note 9) was estimated using the Black Scholes Merton formula based on inputs
including (i) the price of the Company’s shares; (ii) the exercise price of the warrant; (iii) risk-free interest; (iv) term available
to exercise or redeem the security and (v) the volatility of the Company’s share during the relevant term.
|
Marketable equity securities |
| G. | Marketable
equity securities: |
Marketable
equity securities classified as available-for-sale are recorded at fair value. The fair value is based on the quoted prices of
such securities (level 1). Unrealized gains of available for sale securities are reflected in other comprehensive income. Unrealized
losses considered to be temporary are reflected in other comprehensive income; unrealized losses that are considered to be other-than-temporary
are charged to income as an impairment charge. Realized gains and losses are included in financial expenses, net.
Marketable
equity securities classified as trading are recorded at fair value. The fair value is based on the current market value. Unrealized
gains and losses before the securities are sold are reported in the income statement.
|
Investment in Affiliate Company |
| H. | Investment
in Affiliate Company: |
Investment
in ordinary shares of an entity in which the Company can exercise significant influence but does not own a majority equity interest
or otherwise control is accounted for using the equity method and is included as an investment in an affiliate company in the
consolidated balance sheet. The Company records its share in undistributed earnings and losses since acquisition in the consolidated
statements of operations.
The
Company reviews its investment for other-than-temporary impairment whenever events or changes in business circumstances indicate
that the carrying value of the investment may not be fully recoverable.
Investment
in warrants of ordinary shares of a privately held entity without a readily determinable fair value, is recorded using the cost
method of accounting, carrying the investment at historical cost. Where an equity security is without a readily determinable fair
value, the Company may elect to estimate its fair value at cost minus impairment plus or minus changes resulting from observable
price changes.
|
Share-based compensation |
| I. | Share-based
compensation: |
The
Company applies ASC 718-10, “Share-Based Payment,” which requires the measurement and recognition of compensation
expenses for all share-based payment awards made to employees and directors including employee stock options under the Company’s
stock plans based on estimated fair values.
ASC
718-10 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing
model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite
service periods in the Company’s statement of operations.
The
Company recognizes compensation expenses for the value of non-employee awards, which have graded vesting, based on the straight-line
method over the requisite service period of each award, net of estimated forfeitures.
The
Company estimates the fair value of stock options granted as equity awards using a Black-Scholes options pricing model. The option-pricing
model requires a number of assumptions, of which the most significant are share price, expected volatility and the expected option
term (the time from the grant date until the options are exercised or expire). Expected volatility was calculated based upon
actual historical stock price movements over the period, equal to the expected option term. The Company has historically not paid
dividends and has no foreseeable plans to issue dividends. The risk-free interest rate is based on the yield from governmental
zero-coupon bonds with an equivalent term. The expected option term is calculated for options granted to employees and directors
using the “simplified” method. Grants to non-employees are based on the contractual term. Changes in the determination
of each of the inputs can affect the fair value of the options granted and the results of operations of the Company.
|
Basic and diluted net loss per share |
| J. | Basic
and diluted net loss per share: |
Basic
loss per share is calculated by dividing the net loss by the weighted average number of Ordinary Shares outstanding during the
year. Diluted loss per share is calculated by dividing the net loss by the weighted average number of Ordinary Shares outstanding
plus the number of additional Ordinary Shares that would have been outstanding if all potentially dilutive Ordinary Shares had
been issued, using the treasury stock method, in accordance with ASC 260-10 “Earnings per Share.” Potentially dilutive
Ordinary Shares were excluded from the diluted loss per share calculation because they were anti-dilutive.
The weighted average number of Ordinary Shares outstanding has been retroactively
restated for the equivalent number of shares received by the accounting acquirer as a result of the reverse recapitalization as
if these shares had been outstanding as of the beginning of the earliest period presented.
The
following table present summarized basic and diluted per share and per ADS:
| |
Year
ended December 31, | |
| |
2018 | | |
2017 | | |
2016 | |
| |
| | |
| | |
| |
Net
Loss | |
| 14,657 | | |
| 15,942 | | |
| 1,913 | |
Basic
and diluted loss per share (in USD) | |
| (0.12 | ) | |
| (0.17 | ) | |
| (0.03 | ) |
| |
| | | |
| | | |
| | |
Basic
and diluted loss per ADS (in USD) | |
| (0.61 | ) | |
| (0.84 | ) | |
| (0.14 | ) |
| |
| | | |
| | | |
| | |
Weighted
average number of shares outstanding used in computing basic and diluted loss per share - in thousands | |
| 120,612 | | |
| 94,401 | | |
| 67,311 | |
| |
| | | |
| | | |
| | |
Weighted
average number of ADS outstanding used in computing basic and diluted loss per ADS - in thousands | |
| 24,122 | | |
| 18,880 | | |
| 13,462 | |
|
Research and development expenses, net |
| K. | Research
and development expenses, net: |
Research
and development expenses, are charged to the statement of operations as incurred. Grants for the funding of approved research
and development projects are recognized at the time the Company is entitled to such grants, on the basis of the costs incurred
and applied as a deduction from the research and development expenses.
|
Reclassification |
Certain
amounts in prior years consolidated financial statements have been reclassified to conform to the current year’s presentation.
|
Recent Accounting Standards |
| M. | Recent
Accounting Standards |
In
May 2014, the Financial Accounting Standards Board (the “FASB”) issued ASU 2014-09, Revenue from Contracts with Customers
(Topic 606) to achieve a consistent application of revenue recognition within the U.S., resulting in a single revenue model to
be applied by reporting companies under U.S. GAAP. Under the new model, recognition of revenue occurs when a customer obtains
control of the promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled
in exchange for those goods or services. In addition, the new standard requires that reporting companies disclose the nature,
amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new standard is effective
for us beginning in the first quarter of 2018; early adoption is prohibited. The new standard is required to be applied retrospectively
to each prior reporting period presented or retrospectively with the cumulative effect of initially applying it recognized at
the date of initial application. As the Company has not incurred revenues to date, the adoption of the standard did not have an
impact on its consolidated financial statements.
In
January 2016, the FASB issued an amended standard, ASU 2016-01— “Financial Instruments,” requiring changes to
recognition and measurement of certain financial assets and liabilities. The standard primarily affects equity investments, financial
liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. The Company
adopted ASU 2016-01 in the first quarter of 2018 and the impact on its consolidated financial statements is not material.
In
February 2016, the FASB issued a new lease accounting standard, ASU 2016-02 (Topic 842)— “Leases,” requiring
the recognition of lease assets and liabilities on the balance sheet. This standard is effective beginning in the first quarter
of 2019; early adoption is permitted. The company will adopt Topic 842 effective January 1, 2019 using a modified retrospective
method and will not restate comparative periods. As of December 31, 2018, approximately USD 1,500 of lease assets and liabilities
will be recognized on our balance sheet upon adoption.
In
June 2016, the FASB issued a new standard, ASU 2016-13 -“Financial Instruments—Credit Losses,” requiring measurement
and recognition of expected credit losses on certain types of financial instruments. It also modifies the impairment model for
available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration
since their origination. This standard is effective beginning in the first quarter of 2020; early adoption is permitted starting
from the first quarter of 2019. The Company do not expect that the adoption of this standard will have a significant impact on
the financial position or results of operations.
In
May 2017, the FASB issued ASU 2017-09 - “Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting,”
which clarifies when a change to terms or conditions of a share-based payment award must be accounted for as a modification. The
guidance requires modification accounting if the vesting condition, fair value or the award classification is not the same both
before and after a change to the terms and conditions of the award. The Company adopted ASU 2017-09 in the first quarter of 2018
and the impact on its consolidated financial statements is not material.
In
June 2018, the FASB issued ASU No. 2018-07 “Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based
Payment Accounting.” These amendments expand the scope of Topic 718, Compensation - Stock Compensation (which currently
only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services.
Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. The ASU supersedes
Subtopic 505-50, Equity - Equity-Based Payments to Non-Employees. The guidance is effective for fiscal years beginning after December
15, 2018, including interim periods within that fiscal year. Early adoption is permitted. The Company is assessing ASU 2018-07
and does not expect it to have a material impact on its consolidated financial statements.
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12 Months Ended |
Dec. 31, 2018 |
Accounting Policies [Abstract] |
|
Schedule of property and equipment |
| |
% |
Computers
and software | |
15-33 |
Office
furniture and equipment | |
7 |
Leasehold
improvements | |
Over
the shorter of the related lease period or the life of the asset |
|
Summary of basic and diluted per share and per ADS |
| |
Year
ended December 31, | |
| |
2018 | | |
2017 | | |
2016 | |
| |
| | |
| | |
| |
Net
Loss | |
| 14,657 | | |
| 15,942 | | |
| 1,913 | |
Basic
and diluted loss per share (in USD) | |
| (0.12 | ) | |
| (0.17 | ) | |
| (0.03 | ) |
| |
| | | |
| | | |
| | |
Basic
and diluted loss per ADS (in USD) | |
| (0.61 | ) | |
| (0.84 | ) | |
| (0.14 | ) |
| |
| | | |
| | | |
| | |
Weighted
average number of shares outstanding used in computing basic and diluted loss per share - in thousands | |
| 120,612 | | |
| 94,401 | | |
| 67,311 | |
| |
| | | |
| | | |
| | |
Weighted
average number of ADS outstanding used in computing basic and diluted loss per ADS - in thousands | |
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| 18,880 | | |
| 13,462 | |
|
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12 Months Ended |
Dec. 31, 2018 |
Equity Method Investments and Joint Ventures [Abstract] |
|
Schedule of investment in affiliate of activity |
| |
Investment
in affiliated company | |
As
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| 1,248 | |
Gain
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| 1,258 | |
Equity
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| (1,102 | ) |
As
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| 1,404 | |
Exercise
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| 9,069 | |
Gain
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| 453 | |
Equity
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| (3,358 | ) |
As
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| 7,568 | |
|
Schedule of investment in affiliate of balance sheet data |
Balance
sheet data: | |
As
of December 31, | |
| |
2018 | | |
2017 | |
| |
USD
in thousands | |
Current
assets | |
| 4,714 | | |
| 2,914 | |
Long-term
assets | |
| 846 | | |
| 435 | |
Current
liabilities | |
| (633 | ) | |
| (504 | ) |
Equity | |
| (4,927 | ) | |
| (2,845 | ) |
|
Schedule of investment in affiliate of operating data |
Operating
data: | |
Year
ended
December 31, | |
| |
2018 | | |
2017 | |
| |
USD
in thousands | |
Revenue | |
| – | | |
| – | |
Operating
loss | |
| (8,598 | ) | |
| (3,869 | ) |
Net
loss | |
| (8,646 | ) | |
| (3,847 | ) |
|
Schedule of investment in a warrants investment |
| |
Other
Investments | |
As
of January 1, 2017 | |
| 66 | |
Revaluation
(see note 4C1) | |
| 3,967 | |
As
of December 31, 2017 | |
| 4,033 | |
Warrants
exercised (see note 4C2) | |
| (4,004 | ) |
Revaluation
(see note 4C1) | |
| 316 | |
As
of December 31, 2018 | |
| 345 | |
|
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Dec. 31, 2018 |
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|
Schedule of fixed assets, net |
| |
December 31, | |
| |
2018 | | |
2017 | |
| |
USD in thousands | |
Cost: | |
| | |
| |
Computers and Software | |
| 539 | | |
| 201 | |
Office furniture and equipment | |
| 154 | | |
| 84 | |
Leasehold improvements | |
| 389 | | |
| 67 | |
| |
| 1,082 | | |
| 352 | |
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| 295 | | |
| 63 | |
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| 289 | |
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- DefinitionTabular disclosure of future minimum payments required in the aggregate and for each of the five succeeding fiscal years for operating leases having initial or remaining noncancelable lease terms in excess of one year and the total minimum rentals to be received in the future under noncancelable subleases as of the balance sheet date.
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Derivative Warrants Liabilities (Tables)
|
12 Months Ended |
Dec. 31, 2018 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
|
Summary of weighted average of inputs |
Weighted average of inputs | |
As of December 31, | |
| |
2018 | | |
2017 | |
Share price | |
$ | 0.33 | | |
$ | 0.80 | |
Exercise price | |
$ | 1.02 | | |
$ | 1.10 | |
Expected volatility | |
| 73.7 | % | |
| 98 | % |
Risk-free interest | |
| 0.48 | % | |
| 0.11 | % |
Dividend yield | |
| 0 | % | |
| 0 | % |
Expected life of up to (years) | |
| 0.16 | | |
| 0.82 | |
|
Summary of outstanding and exercisable |
Issuance Date | |
Outstanding and Exercisable as of December 31, 2018 | | |
Exercise Price Per Share | |
Exercisable Through |
| |
| | |
| |
|
Series A (Mar-2016) (10B(a)) | |
| -- | | |
NIS 3 ($0.86) | |
August 2017 |
Series B (Mar-2016) (10B(a)) | |
| 9,752,984 | | |
NIS 4 ($1.53) | |
February 2019 |
Series A (May-2016) (10B(b)) | |
| -- | | |
NIS 3 ($0.86) | |
November 2017 |
Series B (May-2016) (10B(b)) | |
| 2,028,568 | | |
NIS 4 ($1.53) | |
May 2019 |
Series E (Oct-2016) (10B(c)) | |
| 2,687,197 | | |
NIS 3 ($0.86) | |
October 2019 |
|
Summary of liabilities measured on recurring basis |
| |
Series A (Mar-2016) | | |
Series B (Mar-2016) | | |
Series A (May-2016) | | |
Series B (May-2016) | | |
Series E (Oct-2016) | | |
Total | |
As of December 31, 2016 | |
| 3 | | |
| 16 | | |
| 3 | | |
| 17 | | |
| 92 | | |
| 131 | |
Exercised | |
| (7,792 | ) | |
| (1,734 | ) | |
| (327 | ) | |
| -- | | |
| (387 | ) | |
| (10,240 | ) |
Revaluation of warrants | |
| 7,789 | | |
| 2,772 | | |
| 324 | | |
| 321 | | |
| 974 | | |
| 12,180 | |
As of December 31, 2017 | |
| -- | | |
| 1,054 | | |
| -- | | |
| 338 | | |
| 679 | | |
| 2,071 | |
Revaluation of warrants | |
| -- | | |
| (1,054 | ) | |
| -- | | |
| (338 | ) | |
| (679 | ) | |
| (2,071 | ) |
As of December 31, 2018 | |
| -- | | |
| -- | | |
| -- | | |
| -- | | |
| -- | | |
| -- | |
|
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- DefinitionTabular disclosure of input and valuation technique used to measure fair value and change in valuation approach and technique for each separate class of asset and liability measured on recurring and nonrecurring basis.
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- DefinitionTabular disclosure for share-based compensation plans. Includes, but is not limited to, outstanding awards at beginning and end of year, grants, exercises, forfeitures, and weighted-average grant date fair value.
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Shareholders' Equity (Tables)
|
12 Months Ended |
Dec. 31, 2018 |
Equity [Abstract] |
|
Summary of fair value of options granted |
| |
| As of December 31,
| |
| |
| 2018 | | |
| 2017 | |
| |
| | | |
| | |
Exercise price | |
$ | 1.02-$1.08 | | |
$ | 0.53-$1.7 | |
Expected volatility | |
| 66%-69 | % | |
| 38%-88 | % |
Risk-free interest | |
| 0.48%-0.83 | % | |
| 0.17%-0.43 | % |
Expected life of up to (years) | |
| 3.01-3.56 | | |
| 2.32-3.33 | |
|
Summary of option activity |
| |
Number of Options | | |
Weighted average exercise price | | |
Weighted Average remaining contractual term (in years) | |
Outstanding at January 1, 2018 (a) | |
| 10,541,954 | | |
$ | 0.69 | | |
| | |
Granted (b) | |
| 2,740,000 | | |
$ | 1.06 | | |
| | |
Exercised | |
| (314,415 | ) | |
$ | 0.21 | | |
| | |
Forfeited | |
| (1,422,917 | ) | |
$ | 1.16 | | |
| | |
Outstanding at December 31, 2018 | |
| 11,544,622 | | |
$ | 0.76 | | |
| 1.49 | |
Exercisable at December 31, 2018 | |
| 6,914,622 | | |
| | | |
| 1.14 | |
As of December 31, 2018, there
was USD 1,808 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under
the Plan. This cost is expected to be recognized over a weighted-average period of 1.31 years.
| (a) | Options Granted during 2016 and 2017 |
On April 17, 2016, the Company
granted to its Chief Financial Officer options to purchase an aggregate of 1,794,205 Ordinary Shares at an exercise price of $0.08
per share. The options vest over 10 quarters until fully vested on June 30, 2018. The Company recorded in its 2018, 2017 and 2016
statement of operations expenses of USD 173, USD 346 and USD 346, respectively, each year in respect of such grant, included in
general and administrative expenses.
On January 26, 2017, the Company
granted to three members of its Board of directors options to purchase an aggregate of 300,000 Ordinary Shares, each, at an exercise
price of NIS 1.95 (approximately $0.52 per share at the grant date). The options vest over 12 quarters until fully vested on September
30, 2019. The company recorded in its 2018 and 2017 statement of operations an expense of USD 45 and USD 56, respectively, in respect
of such grant, included in general and administrative expenses.
On May 4, 2017, the Company
granted to its Chief Executive Officer options to purchase an aggregate of 2,000,000 Ordinary Shares at an exercise price NIS 2.31
(approximately $0.64 per share at the date grant). The options vest over 12 quarters until fully vested on December 31, 2019. The
company recorded in its 2018 and 2017 statement of operations an expense of USD 459 each year, in respect of such grant, included
in general and administrative expenses.
On May 4, 2017, the Company
granted to three of its senior officers options to purchase an aggregate of 700,000 Ordinary Shares, each, at an exercise price
NIS 1.95 (approximately $0.52 per share at the date grant). The options vest over 12 quarters until fully vested on December 31,
2019. The company recorded in its 2018 and 2017 statement of operations an expense of USD 527 and USD 615, respectively, in respect
of such grant.
On August 27, 2017, the Company
granted to four members of its board of directors options to purchase an aggregate of 300,000 Ordinary Shares, each, at an exercise
price of NIS 6.13 (approximately $1.7 per share at the grant date). The options vest over 12 quarters until fully vested on September
30, 2019 for two of the directors and on July 16, 2020 for the other. The company recorded in its 2018 and 2017 statement of operations
an expense of USD 102 and USD 107, respectively, in respect of such grant, included in general and administrative expenses.
On November 30, 2017, the Company
granted to its Chief Operating Officer options to purchase an aggregate of 700,000 Ordinary Shares at an exercise price NIS 3.78
(approximately $1.08 per share at the date grant). The options vest over 12 quarters until fully vested on September 30, 2020.
The company recorded in its 2018 and 2017 statement of operations an expense of USD 95 USD 24, respectively in respect of such
grant, included in in Research and Development expenses.
During 2017, the Company granted
to its employee’s options to purchase an aggregate of 2,175,000 Ordinary Shares at an average exercise price of $0.96 per
share. The options vest over 12 quarters until fully vested.
| (b) | Options Granted during 2018 |
On June 18, 2018, the Company
issued options to purchase 100,000 Ordinary Shares to its chairman of the board of directors at an exercise price of NIS 3.78 (approximately
$1.06 per share at the grant date). One third of the options shall vest after one year and the balance of the remaining options
shall vest over 8 quarters until fully vested on March 31, 2021. The Company recorded in its statement of operations an expense
of USD 4 in respect of such grant, included in General and Administrative expenses.
During 2018, the Company Granted
options to purchase 2,640,000 Ordinary Shares to its employees at an average exercise price of NIS 3.78 (approximately $1.06 per
share at the grant date). One third of the options shall vest after one year and the balance of the remaining options shall vest
over 8 quarters until fully vested.
|
Summary of share-based compensation expense |
| |
Year
ended December 31, | |
| |
2018 | | |
2017 | | |
2016 | |
| |
USD in thousands | |
| |
| | |
| | |
| |
Research and Development | |
| 621 | | |
| 491 | | |
| -- | |
Marketing and Sales | |
| 196 | | |
| 443 | | |
| -- | |
General and administrative | |
| 1,223 | | |
| 1,521 | | |
| 405 | |
Total share-based compensation expense | |
| 2,040 | | |
| 2,455 | | |
| 405 |
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Research and Develoment, Net (Tables)
|
12 Months Ended |
Dec. 31, 2018 |
Research and Development [Abstract] |
|
Schedule of research and develoment, net |
| |
Year
ended December 31, | |
| |
2018 | | |
2017 | | |
2016 | |
| |
USD in thousands | |
| |
| | |
| | |
| |
Payroll and related expenses (*) | |
| 5,793 | | |
| 2,083 | | |
| 221 | |
Subcontracted work and consulting | |
| 1,744 | | |
| 1,238 | | |
| 588 | |
Share based payments to service provider | |
| 43 | | |
| 112 | | |
| -- | |
Rent and office maintenance | |
| 629 | | |
| 281 | | |
| -- | |
Travel expenses | |
| 76 | | |
| 79 | | |
| -- | |
Other | |
| 393 | | |
| 296 | | |
| 95 | |
Sales of prototypes | |
| (40 | ) | |
| -- | | |
| -- | |
| |
| 8,638 | | |
| 4,089 | | |
| 904 | |
| (*) | Includes Share-based payment of USD 578 and USD 379 in
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12 Months Ended |
Dec. 31, 2018 |
Marketing and Sales [Abstract] |
|
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| |
Year
ended December 31, | |
| |
2018 | | |
2017 | | |
2016 | |
| |
USD in thousands | |
| |
| |
Payroll and related expenses (*) | |
| 489 | | |
| 744 | | |
| 115 | |
Exhibitions, conventions and Travel expenses | |
| 189 | | |
| 113 | | |
| 80 | |
Consultants | |
| 249 | | |
| 128 | | |
| 15 | |
Other | |
| 60 | | |
| 30 | | |
| 14 | |
| |
| 987 | | |
| 1,015 | | |
| 224 | |
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12 Months Ended |
Dec. 31, 2018 |
General and Administrative [Abstract] |
|
Schedule of general and administrative |
| |
Year
ended December 31, | |
| |
2018 | | |
2017 | | |
2016 | |
| |
USD in thousands | |
| |
| | |
| | |
| |
Payroll and related expenses (*) | |
| 1,776 | | |
| 1,532 | | |
| 815 | |
Share-based payments to service providers | |
| 179 | | |
| 452 | | |
| 59 | |
Professional services | |
| 1,071 | | |
| 1,213 | | |
| 829 | |
Directors fees and insurance (**) | |
| 361 | | |
| 320 | | |
| 93 | |
Travel expenses | |
| 54 | | |
| 65 | | |
| 36 | |
Rent and office maintenance | |
| 131 | | |
| 38 | | |
| 90 | |
Consultation fees to a related party | |
| -- | | |
| -- | | |
| 470 | |
Other | |
| 124 | | |
| 133 | | |
| 235 | |
| |
| 3,696 | | |
| 3,753 | | |
| 2,627 | |
| (*) | Includes Share-based payment of USD 893, USD 905 and USD
346 in 2018, 2017 and 2016, respectively. |
| (**) | Includes Share-based payment of USD 151 and USD 164 in
2018 and 2017, respectively. |
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|
12 Months Ended |
Dec. 31, 2018 |
Financial Expense (Income) Net [Abstract] |
|
Schedule of financial expense income net |
| |
Year
ended December 31, | |
| |
2018 | | |
2017 | | |
2016 | |
| |
USD in thousands | |
| |
| | |
| | |
| |
Revaluation of securities, net | |
| (1 | ) | |
| (15 | ) | |
| (39 | ) |
Revaluation of other investments | |
| (316 | ) | |
| (3,967 | ) | |
| -- | |
Revaluation of derivative warrant liabilities | |
| (2,071 | ) | |
| 12,180 | | |
| (1,847 | ) |
Exchange rate differences | |
| 1,000 | | |
| (918 | ) | |
| (70 | ) |
Other | |
| (181 | ) | |
| (39 | ) | |
| 6 | |
| |
| (1,569 | ) | |
| 7,241 | | |
| (1,950 | ) |
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