UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2017
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________to__________
Commission File Number: 000-52545
OPHTHALIX INC.
(Exact name of registrant as specified in its charter)
| Delaware | 88-0445167 | |
| (State
or other jurisdiction of incorporation or organization) |
(I.R.S.
Employer Identification No.) |
| 10 Bareket Street, Petach Tikva, Israel | 4951778 | |
| (Address of principal executive offices) | (Zip Code) |
+(972) 3-9241114
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| Non-accelerated filer | ☐ (Do not check if a smaller reporting company) | Smaller reporting company | ☒ |
| Emerging growth company | ☒ | ||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒ No ☐
The number of shares outstanding of the registrant’s Common Stock on November 13, 2017 was 10,441,251.
TABLE OF CONTENTS
| Page | ||
| PART I-FINANCIAL INFORMATION | ||
| Item 1. | Financial Statements | 1 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 14 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 17 |
| Item 4. | Controls and Procedures | 17 |
| PART II-OTHER INFORMATION | ||
| Item 1A. | Risk Factors | 18 |
| Item 6. | Exhibits | 18 |
| SIGNATURES | 19 | |
Throughout this report, unless otherwise designated, the terms “we,” “us,” “our,” “the Company” and “our company” refer to OphthaliX Inc., a Delaware corporation, and its Israeli subsidiary, Eyefite Ltd. (“Eyefite”). All amounts in this report are in U.S. Dollars, unless otherwise indicated.
PART I-FINANCIAL INFORMATION
Item 1. Financial Statements
OPHTHALIX INC. AND ITS SUBSIDIARY
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2017
U.S. DOLLARS IN THOUSANDS
UNAUDITED
INDEX
| Page | |
| Condensed Consolidated Balance Sheets | 1 |
| Condensed Consolidated Statements of Comprehensive Loss | 2 |
| Condensed Consolidated Statements of Changes in Stockholders’ Deficiency | 3 |
| Condensed Consolidated Statements of Cash Flows | 4 |
| Notes to Condensed Consolidated Financial Statements | 5 - 13 |
- - - - - - - - - - - - - - -
OPHTHALIX INC. AND ITS SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands, except share and per share data
September 30, 2017 | December 31, 2016 | |||||||
| Unaudited | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 11 | $ | 13 | ||||
| Investment in Parent Company | 383 | 530 | ||||||
| Other accounts receivable | - | 7 | ||||||
| Total current assets | 394 | 550 | ||||||
| Total assets | $ | 394 | $ | 550 | ||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIENCY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Related company | $ | 4,942 | $ | 4,459 | ||||
| Other accounts payable and accrued expenses | 214 | 251 | ||||||
| Total current liabilities | 5,156 | 4,710 | ||||||
| STOCKHOLDERS’ DEFICIENCY: | ||||||||
| Share capital | ||||||||
| Preferred Stock - Authorized: 1,000,000 shares at September 30, 2017 (unaudited) and December 31, 2016; Issued and outstanding: 0 shares at September 30, 2017 (unaudited) and December 31, 2016 | ||||||||
| Common Stock of $0.001 par value - Authorized: 100,000,000 shares at September 30, 2017 (unaudited) and December 31, 2016; Issued and outstanding: 10,441,251 shares at September 30, 2017 (unaudited) and December 31, 2016 | 10 | 10 | ||||||
| Additional Paid-in capital | 5,519 | 5,519 | ||||||
| Accumulated deficit | (10,291 | ) | (9,689 | ) | ||||
| Total stockholders’ deficiency | (4,762 | ) | (4,160 | ) | ||||
| Total liabilities and stockholders’ deficiency | $ | 394 | $ | 550 | ||||
The accompanying notes are an integral part of the condensed consolidated financial statements
| 1 |
OPHTHALIX INC. AND ITS SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
U.S. dollars in thousands, except share and per share data
Nine months ended September 30, | Three months ended September 30, | Year ended December 31, | ||||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | 2016 | ||||||||||||||||
| Unaudited | ||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Research and development | $ | 11 | $ | 158 | $ | 2 | $ | 30 | $ | 199 | ||||||||||
| General and administrative | 342 | 293 | 126 | 185 | 432 | |||||||||||||||
| Total operating expenses | 353 | 451 | 128 | 215 | 631 | |||||||||||||||
| Financial expenses, net | 249 | 88 | 44 | 29 | 285 | |||||||||||||||
| Net loss | $ | 602 | $ | 539 | $ | 172 | $ | 244 | $ | 916 | ||||||||||
| Net loss per share: | ||||||||||||||||||||
| Basic and diluted loss per share | $ | 0.06 | $ | 0.05 | $ | 0.02 | $ | 0.02 | $ | 0.09 | ||||||||||
| Weighted average number of Common Stocks used in computing basic and diluted net loss per share | 10,441,251 | 10,441,251 | 10,441,251 | 10,441,251 | 10,441,251 | |||||||||||||||
| Other comprehensive loss | ||||||||||||||||||||
| Available-for-sale investments: | ||||||||||||||||||||
| Changes in net unrealized (gain) loss from investment in Parent Company | $ | - | $ | 62 | $ | - | $ | (7 | ) | $ | (34 | ) | ||||||||
| Total other comprehensive (income) loss | $ | - | $ | 62 | $ | - | $ | (7 | ) | $ | (34 | ) | ||||||||
| Comprehensive loss | $ | 602 | $ | 601 | $ | 172 | $ | 237 | $ | 882 | ||||||||||
The accompanying notes are an integral part of the condensed consolidated financial statements
| 2 |
OPHTHALIX INC. AND ITS SUBSIDIARY
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIENCY
U.S. dollars in thousands, except share and per share data
| Accumulated | ||||||||||||||||||||||||
| Common Stock | Additional paid-in | Accumulated | other comprehensive | Total stockholders’ | ||||||||||||||||||||
| Number | Amount | capital | deficit | loss | deficiency | |||||||||||||||||||
| Unaudited | ||||||||||||||||||||||||
| Balance as of January 1, 2016 (audited) | 10,441,251 | $ | 10 | $ | 5,516 | $ | (8,773 | ) | $ | (34 | ) | $ | (3,281 | ) | ||||||||||
| Stock-based compensation | - | - | 3 | - | - | 3 | ||||||||||||||||||
| Unrealized loss from investment in Parent Company | - | - | - | - | (62 | ) | (62 | ) | ||||||||||||||||
| Net loss | - | - | - | (539 | ) | - | (539 | ) | ||||||||||||||||
| Balance as of September 30, 2016 | 10,441,251 | $ | 10 | $ | 5,519 | $ | (9,312 | ) | $ | (96 | ) | $ | (3,879 | ) | ||||||||||
| Accumulated | ||||||||||||||||||||||||
| Common Stock | Additional paid-in | Accumulated | other comprehensive | Total stockholders’ | ||||||||||||||||||||
| Number | Amount | capital | deficit | loss | deficiency | |||||||||||||||||||
| Unaudited | ||||||||||||||||||||||||
| Balance as of January 1, 2017 (audited) | 10,441,251 | $ | 10 | $ | 5,519 | $ | (9,689 | ) | $ | - | $ | (4,160 | ) | |||||||||||
| Net loss | - | - | - | (602 | ) | - | (602 | ) | ||||||||||||||||
| Balance as of September 30, 2017 | 10,441,251 | $ | 10 | $ | 5,519 | $ | (10,291 | ) | $ | - | $ | (4,762 | ) | |||||||||||
The accompanying notes are an integral part of the condensed consolidated financial statements
| 3 |
OPHTHALIX INC. AND ITS SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands, except share and per share data
Nine months ended September 30, | Three months ended September 30, | Year ended December 31, | ||||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | 2016 | ||||||||||||||||
| Unaudited | ||||||||||||||||||||
| Cash flows from operating activities: | ||||||||||||||||||||
| Net loss | $ | (602 | ) | $ | (539 | ) | $ | (172 | ) | $ | (244 | ) | $ | (916 | ) | |||||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||||||||||||
| Stock-based compensation | - | 3 | - | - | 3 | |||||||||||||||
| Depreciation | - | - | *) | - | - | - | *) | |||||||||||||
| Decrease (increase) in other accounts receivable | 7 | (11 | ) | - | 12 | (7 | ) | |||||||||||||
| Decrease in other account payables and accrued expenses | (37 | ) | 22 | (29 | ) | 114 | (40 | ) | ||||||||||||
| Impairment loss of investment in Parent Company | 147 | - | 10 | - | 162 | |||||||||||||||
| Increase in Parent Company | 483 | 498 | 184 | 107 | 769 | |||||||||||||||
| Changes in fair value of the derivative related to service agreement | - | - | - | - | - | *) | ||||||||||||||
| Net cash provided by (used in) operating activities | (2 | ) | (27 | ) | (7 | ) | (11 | ) | (29 | ) | ||||||||||
| Change in cash and cash equivalents | (2 | ) | (27 | ) | (7 | ) | (11 | ) | (29 | ) | ||||||||||
| Cash and cash equivalents at the beginning of the period | 13 | 42 | 18 | 26 | 42 | |||||||||||||||
| Cash and cash equivalents at the end of the period | $ | 11 | $ | 15 | $ | 11 | $ | 15 | $ | 13 | ||||||||||
*) Representing an amount lower than $1
The accompanying notes are an integral part of the condensed consolidated financial statements
| 4 |
OPHTHALIX INC. AND ITS SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
| NOTE 1:- | GENERAL |
| a. | OphthaliX Inc. (the “Company” or “OphthaliX”), originally incorporated in the State of Nevada on December 10, 1999 under the name Bridge Capital.com Inc., was a nominally capitalized corporation that did not commence its operations until it changed its name to Denali Concrete Management Inc. (“Denali”), in March 2001. Denali was a concrete placement company specializing in providing concrete improvements in the road construction industry. Denali operated primarily in Anchorage, Alaska, placing curb and gutter, sidewalks and retaining walls for state, municipal and military projects. |
In December 2005, the Company ceased its principal business operations and focused its efforts on seeking a business opportunity, becoming a public shell company in the U.S.
Eye-Fite Ltd. (“Eye-Fite” or the “Subsidiary”) was founded on June 27, 2011 in contemplation of the execution of a transaction between Can-Fite BioPharma Ltd. (the “Parent company” or “Can-Fite”), a public company in Israel and U.S, and the Company, as further detailed in Note 1b.
Following the transaction, Denali changed its name to OphthaliX Inc. and also changed its corporate domicile from Nevada to Delaware.
On July 5, 2016, the Company released top-line results from its Phase II clinical trial of CF101 for the treatment of glaucoma. In this trial, no statistically significant differences were found between the CF101 treated group and the placebo group in the primary endpoint of lowering intra ocular pressure (“IOP”). High IOP is a characteristic of glaucoma. CF101 was found to have a favorable safety profile and was well tolerated.
In September 2016, the Company’s Board of Directors and Can-Fite, the Company’s parent and majority shareholder, consented in writing to, among other things, the voluntary dissolution and liquidation of the Company pursuant to a Plan of Dissolution.
In November 2016, the Company’s Board of Directors abandoned the voluntary dissolution and liquidation of the Company. Subsequently, on November 15, 2016, the Company entered into a non-binding letter of intent with an Israeli company for the acquisition of such company by way of a reverse triangular merger. The proposed reverse merger was signed on May 21, 2017. For more information regarding the Merger Agreement refer also to Note 1d.
The Company ceased all research and development operations.
| 5 |
OPHTHALIX INC. AND ITS SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
| NOTE 1:- | GENERAL (Cont.) |
| b. | Reverse Recapitalization and related arrangements: |
| 1. | Recapitalization: |
On November 21, 2011 (the “Closing Date”), Can-Fite purchased 8,000,000 shares of the Company’s Common Stock, par value $ 0.001 per share in exchange for all of the issued and outstanding ordinary shares of Eyefite pursuant to the terms of a stock purchase agreement (the “Purchase Agreement”). As a result, Eyefite became a wholly-owned subsidiary of the Company and Can-Fite became its majority stockholder and a parent company.
On November 21, 2011, the Company also issued a warrant to Can-Fite by which Can-Fite has the right, until the earlier of (a) November 21, 2016 and (b) the closing of the acquisition of the Company by another entity, resulting in the exchange of the Company’s outstanding common shares such that its stockholders prior to such transaction own, directly or indirectly, less than 50% of the voting power of the surviving entity, to convert its right to the Additional Payment (as defined below in Note 1b2) into 480,022 shares of Common Stock (subject to adjustment in certain circumstances). The per share exercise price for the shares was $5.148. The warrant expired on November 21, 2016.
Simultaneously with the transactions described above, the Company completed a private placement of shares of Common Stock for gross proceeds of $3,330 through the sale of 646,776 shares to third party investors and sold 466,139 shares of Common Stock to Can-Fite in exchange for 714,922 ordinary shares of Can-Fite (representing approximately 2.5% of Can-Fite’s issued and outstanding share capital as of the Closing Date), valued at $ 2,400 and 97,112 shares to Can-Fite for gross proceeds of $500. As of September 30, 2017, the Company holds 446,827 Can-Fite ordinary shares, representing approximately 1.35% of Can-Fite’s outstanding share capital.
In contemplation of the recapitalization transaction, on November 12, 2012, the Board of Directors, complying with the undertaking taken as part of the recapitalization of the Company on November 21, 2011, formerly resolved to issue to certain investors and Can-Fite, 1,455,228 and 1,267,315 warrants to acquire 323,384 and 281,625 shares of Common Stock of the Company, respectively (the “Warrants”). The exercise price of such Warrants was $7.74 per share. The Warrants were exercisable for a period of five years from their date of grant and did not contain any non- standard anti-dilution provisions. The Warrants expired on November 20, 2016.
| 6 |
OPHTHALIX INC. AND ITS SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
| NOTE 1:- | GENERAL (Cont.) |
The transaction was accounted for as a reverse recapitalization which is outside the scope ASC 805, “Business Combinations”. Under reverse capitalization accounting, EyeFite is considered the acquirer for accounting and financial reporting purposes, and acquired the assets and assumed the liabilities of the Company. Assets acquired and liabilities assumed are reported at their historical amounts. Consequently, the consolidated financial statements of the Company reflect the operations of the acquirer for accounting purposes together with a deemed issuance of shares, equivalent to the shares held by the former shareholders of the legal acquirer and a recapitalization of the equity of the accounting acquirer. These consolidated financial statements include the accounts of the Company since the effective date of the reverse capitalization and the accounts of EyeFite since inception.
| 2. | License and research and development services from Can-Fite: |
In connection with the consummation of the recapitalization transaction, the Company and Can-Fite entered into a license agreement, pursuant to which Can-Fite granted EyeFite a sole and exclusive worldwide license for the use of CF101, solely in the field of ophthalmic diseases (“CF101”). EyeFite was obligated to make to the U.S. National Institutes of Health (“NIH”), with regard to the patents of which are included in the license to EyeFite, for as long as the license agreement between the Company and NIH remains in effect, a nonrefundable minimum annual royalty fee and potential future royalties of 4.0% to 5.5% on net sales.
In addition, the Company will be obligated to make certain milestone payments ranging from $25 to $500 upon the achievement of various development milestones for each indication. As of December 31, 2016, the Company accrued an amount of $100 related to DES Phase III clinical trial and $75 related to the glaucoma Phase II clinical trial. Eye-Fite will also be required to make payments of 20% of sublicensing revenues, excluding royalties and net of the required milestone payments. As of September 30, 2017, the Company did not reach any milestone or generate revenue that would trigger additional payments to Can-Fite.
In addition, following the closing of the recapitalization transaction, Can-Fite, OphthaliX and EyeFite entered into a service agreement (the “Service Agreement”). Pursuant to the terms of the Service Agreement, Can-Fite will manage the research and development activities relating to pre-clinical and clinical studies for the development of the ophthalmic indications of CF101. In consideration for Can-Fite’s services, EyeFite will pay to Can-Fite a service fee (consisting of all expenses and costs incurred by Can-Fite plus 15%). In addition, the Company is committed to future additional payments equal to 2.5% of any and all proceeds received by EyeFite relating to the activities regarding the drug (the “Additional Payment”).
According to the Service Agreement, Can-Fite had the right, to convert the Additional Payment into an additional 480,022 shares of Common Stock of the Company for total consideration of $2,471 (subject to adjustment in certain circumstances). Such right has been expired.
| 7 |
OPHTHALIX INC. AND ITS SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
| NOTE 1:- | GENERAL (Cont.) |
| c. | During the nine months’ period ended September 30, 2017, the Company incurred operating losses and has accumulated deficit as of September 30, 2017 amounting to $353 and $10,291, respectively. The Company will be required to obtain additional liquidity resources in the near term. In addition, in February 2013, as last updated in August 2015, the Company obtained a formal letter from Can-Fite stating that Can-Fite agrees to defer the payments under the Services Agreement from January 31, 2013 for the performance of the clinical trials of CF101 in ophthalmic indications until the completion of a fundraising by the Company that will allow such payments. Also, in August 2015, Can-Fite issued another financial support letter, pursuant to which it committed to cover any shortfall in the costs and expenses of operations of the Company which are in excess of the Company’s available cash to finance its operations, including cash generated from any future sale of Can-Fite shares. Any related balance on amounts owed bear interest at a rate of 3% per annum. Such letter expired on October 10, 2016 but was extended on November 14, 2016 by Can-Fite under the same terms and conditions in order to fund the Company’s operations. Such letter shall expire on the earlier of (1) completion of signed reverse merger transaction as described in note 1a above, or (2) decision of OphthaliX to cease any action in relation to such merger, or (3) February 28, 2017. Deferred payments under the Services Agreement are currently due. As of September 30, 2017, the deferred payments to Can-Fite totaled $4,942. Such deferred payments will be waived by Can-Fite upon the closing of the merger transaction with Wize (see also Note 1d). |
There are no assurances that the Company will be able to obtain an adequate level of financial resources in the next twelve months. The Company will have a severe negative impact on its ability to remain a viable company.
These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.
| d. | On May 21, 2017, the Company, Wize, Bufiduck Ltd., a company formed under the laws of the State of Israel and a wholly owned subsidiary of the Company (“Merger Sub”), entered into an agreement and plan of merger (as may be amended from time to time, the “Merger Agreement”) that provides for, among other things, the merger of Merger Sub with and into Wize, with Wize continuing as the surviving entity and becoming a wholly owned subsidiary of the Company, on the terms and conditions set forth in the Merger Agreement (the “Merger”). |
| 8 |
OPHTHALIX INC. AND ITS SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
| NOTE 1:- | GENERAL (Cont.) |
Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share of Wize common stock that is issued and outstanding will be automatically cancelled and converted into the right to receive that number of validly issued, fully paid and non-assessable shares of Company common stock equal to an initial exchange ratio of 5.3681 shares of OphthaliX common stock for each one Wize ordinary share (as may be adjusted, the “Exchange Ratio”). To that end, as a result a private placement conducted by Wize, the Exchange Ratio adjusted to 4.1781 shares of Company common stock for each one Wize ordinary share. Each convertible note or loan to purchase Wize ordinary shares existing at the time of the Merger Agreement (the “Convertible Loans”) will constitute a convertible note to purchase the number of shares of Company common stock equal to the number of Wize ordinary shares that were subject to a Convertible Loan immediately prior to the Effective Time multiplied by the Exchange Ratio at a proportionally adjusted conversion price. In this respect, it was further agreed that the conversion of all or part of such Convertible Loans (including future investment rights to the holders thereof upon such conversion (the “Future Investment Rights”) and the shares issuable upon exercise of the Future Investment Rights), whether before or after the Effective Time, shall not modify the Exchange Ratio.
Consummation of the Merger is subject to certain closing conditions, including, among other things, (i) the effectiveness of a registration statement on Form S-4, including a proxy statement and prospectus, (ii) approval by the stockholders of the Company and shareholders of Wize, (iii) as of the earlier of the Effective Time or August 30, 2017, Wize shall have available cash and cash equivalents of at least NIS 1,000,000, (iv) the Company has no liabilities as of the Effective Time (including any indebtedness owed to Can-Fite), and (v) receipt by Wize an interim tax pre-ruling from the Israeli Tax Authority.
| NOTE 2:- | UNAUDITED CONDENSED FINANCIAL STATEMENTS |
The unaudited Condensed Consolidated Financial Statements of OphthaliX Inc. have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The condensed consolidated balance sheets as of December 31, 2016, included herein were derived from the audited consolidated financial statements for the year ended December 31, 2016. In the opinion of management, all adjustments, including normal recurring accruals, considered necessary for a fair presentation have been included. The results of operations for the nine months ended September 30, 2017, are not necessarily indicative of the results that may be expected for the year ending December 31, 2017, or any future period. The information included in this interim report should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Risk Factors,” “Quantitative and Qualitative Disclosures About Market Risk,” and the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.
| 9 |
OPHTHALIX INC. AND ITS SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
| NOTE 2:- | UNAUDITED CONDENSED FINANCIAL STATEMENTS (Cont.) |
The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates under different assumptions or conditions.
The significant accounting policies applied in the annual financial statements of the Company as of December 31, 2016 are applied consistently in these condensed financial statements. For further information, refer to the consolidated financial statements as of December 31, 2016.
| NOTE 3:- | FAIR VALUE MEASUREMENTS |
The following table provides information by value level for financial assets that are measured at fair value, as defined by ASC 820, on a recurring basis, as of September 30, 2017 and December 31, 2016.
| September 30, 2017 | |||||||||||||||||
| Fair value measurements | |||||||||||||||||
| Description | Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||
| Unaudited | |||||||||||||||||
| Investment in Parent Company | $ | 383 | $ | 383 | $ | - | $ | - | |||||||||
| Total Financial Assets, net | $ | 383 | $ | 383 | $ | - | $ | - | |||||||||
| December 31, 2016 | |||||||||||||||||
| Fair value measurements | |||||||||||||||||
| Description | Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||
| Investment in Parent Company | $ | 530 | $ | 530 | $ | - | $ | - | |||||||||
| Total Financial Assets, net | $ | 530 | $ | 530 | $ | - | $ | - | |||||||||
| 10 |
OPHTHALIX INC. AND ITS SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
| NOTE 4:- | STOCKHOLDERS’ DEFICIENCY |
| a. | Shares of Common Stock: |
The shares of Common Stock represent the legal acquirer, meaning OphthaliX’s share capital as of the transaction date.
Shares of Common Stock confer upon the holders the right to receive notice to participate and vote in the general meetings of the Company and the right to receive dividends, if declared.
On July 18, 2013, the Company’s stockholders approved a reverse stock split of one share for each four and one-half shares outstanding (1:4.5) (the “Reverse Split”) which became effective as of the close of business on August 6, 2013. All shares of Common Stock, warrants, options, per share data and exercise prices included in these consolidated financial statements and notes for all periods presented have been retroactively adjusted to reflect the Reverse Split with respect to the Company’s shares of Common Stock.
| b. | Warrants: |
In contemplation of the Reverse Recapitalization, it was agreed that for each four shares of Common Stock purchased by the investors and Can-Fite, they will be granted by the Company nine warrants to acquire two shares of Common Stock of the Company. The exercise price of the warrants is $7.74 per share of Common Stock. The warrants were exercisable for a period of five years from their date of grant. The warrants did not contain nonstandard anti-dilution provisions. In November 2016, all such warrants expired.
According to ASC 815-40-15 and 25 instructions, the Company’s management evaluated whether the warrants are entitled to the scope exception in ASC 815-10-15-74 (as the warrants meet the definition of a derivative under ASC 815-10-15-83). Based on their straight forward terms (i.e., fix exercise price, no down-round or other provisions that will preclude them from being considered indexed to the Company’s own stock), the Company’s management concluded the warrants should be classified as equity at inception.
In contemplation of the transaction, the Company issued a total of 532,870 fully vested warrants to acquire 118,415 shares of Common Stock to consultants and brokers involved in the transaction. These warrants were exercisable upon the payment of $5.148 per share of Common Stock. In November 2016, all such warrants expired.
| 11 |
OPHTHALIX INC. AND ITS SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
| NOTE 4:- | STOCKHOLDERS’ DEFICIENCY (Cont.) |
| c. | Stock option plan and grant: |
In 2012, the Company’s Board of Directors approved the adoption of the 2012 Stock Incentive Plan (the “2012 Plan”). An Israeli annex was subsequently adopted in 2013 to comply with the requirements set by the Israeli law in general and in particular with the provisions of section 102 of the Israeli tax ordinance. Under the 2012 Plan and Israeli annex, the Company may grant its officers, directors, employees and consultants, stock options, restricted stocks and Restricted Stock Units (“RSUs”) of the Company. Each Stock option granted shall be exercisable at such times and terms and conditions as the Company’s Board of Directors may specify in the applicable option agreement, provided that no option will be granted with a term in excess of 10 years. Upon the adoption of the 2012 Plan, the Company reserved for issuance 1,088,888 shares of Common Stock, $0.001 par value each. As of September 30, 2017, the Company has 971,388 shares of Common Stock available for future grant under the 2012 Plan.
During the nine months’ periods ended September 30, 2017 and 2016, no stock options have been granted.
The below is a summary of the Company’s options activity for employees under Company’s 2012 Plan:
Nine months ended September 30, | |||||||||||||||||
| Description | Number of Shares | Weighted Average Exercise Price | Weighted- Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value | |||||||||||||
| Outstanding as of January 1, 2017 | 117,500 | 7.96 | 5.8 | $ | - | ||||||||||||
| Outstanding as of September 30, 2017 | 117,500 | 7.96 | 5.2 | $ | - | ||||||||||||
| Vested and expected to be vested | 117,500 | 7.96 | 5.2 | $ | - | ||||||||||||
| Exercisable as of September 30, 2017 | 117,500 | 7.96 | 5.2 | $ | - | ||||||||||||
As of September 30, 2017, there is no aggregated intrinsic value of outstanding and exercisable options. The aggregate intrinsic value represents the total intrinsic value (the difference between the deemed fair value of the Company’s Ordinary Shares on the last day of the third quarter of 2017 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on September 30, 2017. This amount is impacted by the changes in the fair market value of the Company’s shares.
Stock-based compensation expenses recognized during the nine months’ periods ended September 30, 2017 and 2016 totaled to $0 and $3, respectively.
| 12 |
OPHTHALIX INC. AND ITS SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
| NOTE 5:- | RELATED PARTY TRANSACTIONS |
The Company has several related party balances and transaction mainly in connection with the License Agreement with the Parent Company (see also Note 1b2). Details of the transactions with related parties are depicted in the following tables:
Transactions with related parties:
Nine months ended September 30, | Three months ended September 30, | ||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||||||
| Research and development expenses (1) | $ | 10 | $ | 157 | $ | 1 | $ | 30 | |||||||||
| General and administrative expenses (1) | $ | *) | $ | 6 | $ | *) | $ | 1 | |||||||||
| Finance expenses, net (1) (2) | $ | 98 | $ | 85 | $ | 65 | $ | 30 | |||||||||
*) Representing an amount less than $1
Balances with Related Parties:
| September 30, | December 31, | ||||||||
| 2017 | 2016 | ||||||||
| Parent Company (1) | $ | (4,942 | ) | $ | (4,459 | ) | |||
| Investment in Parent Company (2) | $ | 383 | $ | 530 | |||||
| Other account payables and accrued expenses (1) | $ | (175 | ) | $ | (175 | ) | |||
| (1) | Related to Service Agreement (see also Note 1b2). | |
| (2) | Related to Investment in Parent Company. |
| 13 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Management’s Discussion and Analysis of Financial Condition and Results of Operations analyzes the major elements of our balance sheets, statements of income and cash flows. This section should be read in conjunction with our Annual Report on Form 10-K for the Year Ended December 31, 2016 and our interim financial statements and accompanying notes to these financial statements. All amounts are in U.S. dollars and rounded.
Forward-Looking Statement Notice
This quarterly report on Form 10-Q contains forward-looking statements about our expectations, beliefs or intentions regarding, among other things, our product development efforts, business, financial condition, results of operations, strategies or prospects. In addition, from time to time, we or our representatives have made or may make forward-looking statements, orally or in writing. Forward-looking statements can be identified by the use of forward-looking words such as “believe,” “expect,” “intend,” “plan,” “may,” “should” or “anticipate” or their negatives or other variations of these words or other comparable words or by the fact that these statements do not relate strictly to historical or current matters. These forward-looking statements may be included in, but are not limited to, various filings made by us with the United States Securities and Exchange Commission, or the SEC, press releases or oral statements made by or with the approval of one of our authorized executive officers. Forward-looking statements relate to anticipated or expected events, activities, trends or results as of the date they are made. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties that could cause our actual results to differ materially from any future results expressed or implied by the forward-looking statements. Many factors could cause our actual activities or results to differ materially from the activities and results anticipated in forward-looking statements, including, but not limited to, those set forth in our most recent annual reports referenced below.
This report identifies important factors which could cause our actual results to differ materially from those indicated by the forward-looking statements, particularly those set forth under Item 1A. “Risk Factors” as disclosed in our Annual Report on Form 10-K, as filed with the SEC on March 23, 2017.
Such risk factors are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of our forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.
All forward-looking statements attributable to us or persons acting on our behalf speak only as of the date of this report and are expressly qualified in their entirety by the cautionary statements included in this report. We undertake no obligations to update or revise forward-looking statements to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. In evaluating forward-looking statements, you should consider these risks and uncertainties.
Description of Business
OphthaliX was a clinical-stage biopharmaceutical company focused on developing therapeutic products for the treatment of ophthalmic disorders. OphthaliX has in-licensed certain patents and patent applications protecting the use in the ophthalmic field of our current pipeline drug under development, a synthetic A3 adenosine receptor, or A3AR, agonist, CF101 (known generically as IB-MECA).
On July 5, 2016, OphthaliX released top-line results from its Phase II trial with respect to the development of CF101 for the treatment of glaucoma or related syndromes of ocular hypertension. In this trial, no statistically significant differences were found between the CF101 treated group and the placebo group in the primary endpoint of lowering intra ocular pressure.
Subsequently, in September 2016, OphthaliX’s board of directors and Can-Fite BioPharma Ltd. (“Can-Fite”), OphthaliX’s parent and holder of approximately 82% of the outstanding shares of common stock of OphthaliX, consented in writing to, among other things, to OphthaliX’s voluntary dissolution and liquidation pursuant to a Plan of Dissolution, that would result in OphthaliX’s complete dissolution and liquidation. The Plan of Dissolution was expected to go into effect 20 days after the date an information statement (the “Definitive Information Statement”) was first given to all OphthaliX’s shareholders who did not execute the written consent.
Prior to the distribution of the Definitive Information Statement, on November 10, 2016, OphthaliX’s board of directors abandoned its voluntary dissolution and liquidation. On the same day, OphthaliX’s board of directors authorized its entry into a non-binding letter of intent with Wize Pharma Ltd. (“Wize”) for a proposed reverse merger.
Subsequently, on May 21, 2017, OphthaliX and a wholly-owned private Israeli subsidiary of the Company, Bufiduck Ltd. (“Merger Sub”), and Wize Pharma, an Israeli company listed on the Tel Aviv Stock Exchange currently focused on the treatment of ophthalmic disorders, including dry eye syndrome, entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which, among other things, subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, Merger Sub will merge with and into Wize, with Wize becoming a wholly-owned subsidiary of OphthaliX and the surviving corporation of the merger (the “Merger”). On October 31, 2017, OphthaliX, Merger Sub and Wize Pharma entered into an amendment to the Merger Agreement which extended the expiration date of the Merger Agreement until November 30, 2017. The parties intend to effect the Merger and the other transactions contemplated under the Merger Agreement by way of an Israeli court-approved plan of arrangement among the Merger Sub and Wize and their respective shareholders and (if applicable) creditors, in accordance with Sections 350 and 351 of the Israeli Companies Law of 1999, as amended.
| 14 |
Ophthalix expects the Merger to close on November 16, 2017.
OphthaliX has no active business operations and is deemed to be a “shell company” as defined in Rule 12b-2 of the Exchange Act.
Results of Operations -Nine Months Ended September 30, 2017 Compared to the Nine Months Ended September 30, 2016
| Nine Months Ended September 30, | ||||||||
| 2017 | 2016 | |||||||
| Operating expenses: | ||||||||
| Research and development | $ | 11,000 | 158,000 | |||||
| General and administrative | 342,000 | 293,000 | ||||||
| Total operating costs | 353,000 | 451,000 | ||||||
| Financial expenses, net | 249,000 | 88,000 | ||||||
| Net loss | $ | 602,000 | 539,000 | |||||
Revenues
We did not generate any revenues from operations. We had no revenues because we do not have any commercial products.
Operating Expenses
Research and development expenses. Research and development expenses were $11,000 for the nine months ended September 30, 2017, compared to $158,000 for the nine months ended September 30, 2016, a decrease of $147,000 or 93%. The decrease in research and development expenses is primarily related to the fact that the Phase II CF101 study for glaucoma was in its final stages during 2016 and that no material research and development expenses were incurred in the nine months ended September 30, 2017.
General and administrative expenses. General and administrative expenses were $342,000 for the nine months ended September 30, 2017, compared to $293,000 for the nine months ended September 30, 2016, an increase of $49,000 or 17%. The increase in general and administrative expenses was primarily due to increase of professional services in connection to the Merger with Wize.
Financial Expenses, net
Financial expenses, net were $249,000 for the nine months ended September 30, 2017 compared to financial expenses of $88,000 for the nine months ended September 30, 2016, a change of $161,000 or 183%. Financial expenses, net consisted primarily of interest expenses due to deferred payments to our majority shareholder and parent company, Can-Fite and impairment loss of investment in Parent Company. The increase of financial expenses, net was mainly attributable to impairment loss of investment in Parent Company.
Net Loss
As a result of the foregoing, we incurred a net loss of $602,000 for the nine months ended September 30, 2017 compared $539,000 for the nine months ended September 30, 2016, an increase of $63,000 or 12%.
Results of Operations -Three Months Ended September 30, 2017 Compared to the Three Months Ended September 30, 2016
| Three Months Ended September 30, | ||||||||
| 2017 | 2016 | |||||||
| Operating expenses: | ||||||||
| Research and development | $ | 2,000 | 30,000 | |||||
| General and administrative | 126,000 | 185,000 | ||||||
| Total operating costs | 128,000 | 215,000 | ||||||
| Financial expenses, net | 44,000 | 29,000 | ||||||
| Net loss | $ | 172,000 | 244,000 | |||||
| 15 |
Revenues
We did not generate any revenues from operations. We had no revenues because we do not have any commercial products.
Operating Expenses
Research and development expenses. Research and development expenses were $2,000 for the three months ended September 30, 2017, compared to $30,000 for the three months ended September 30, 2016, a decrease of $28,000 or 93%. The decrease in research and development expenses is primarily related to the fact that the Phase II CF101 study for glaucoma was in its final stages during 2016 and that no material research and development expenses were incurred in the three months ended September 30, 2017.
General and administrative expenses. General and administrative expenses were $126,000 for the three months ended September 30, 2017, compared to $185,000 for the three months ended September 30, 2016, a decrease of $59,000 or 32%. The decrease in general and administrative expenses was primarily due to decrease of professional services in connection to the Merger with Wize.
Financial Expenses, net
Financial expenses, net were $44,000 for the three months ended September 30, 2017 compared to financial expenses of $29,000 for the three months ended September 30, 2016, a change of $15,000 or 52%. Financial expenses, net consisted primarily of interest expenses due to deferred payments to our majority shareholder and parent company, Can-Fite and impairment loss of investment in Parent Company. The increase of financial expenses, net was mainly attributable to impairment loss of investment in Parent Company.
Net Loss
As a result of the foregoing, we incurred a net loss of $172,000 for the three months ended September 30, 2017 compared $244,000 for the three months ended September 30, 2016, a decrease of $72,000 or 30%.
Liquidity and Capital Resources
Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable and accounts payable and capital expenditures.
As of September 30, 2017 and December 31, 2016, we had $11,000 and $13,000 in cash and cash equivalents, a working capital deficit of $4,762,000 and $4,160,000 and an accumulated deficit of $10,291,000 and $9,689,000, respectively. The increase in working capital deficit was primarily due to our expenses financed by our Parent Company and impairment loss of investment in Parent Company.
Net cash used in operating activities was $2,000 for the nine months ended September 30, 2017, compared with net cash used in operating activities of $27,000 for the nine months ended September 30, 2016, a change of $25,000 or 93%. The decrease in net cash used in operating activities was primarily related to decrease in the net loss amounted to $63,000, decrease in the stock-based compensation expenses amounted to $3,000, increase in the Impairment loss of investment in Parent Company amounted to $147,000, changes in other accounts receivable, other account payables and accrued expenses and related parties amounted to $56,000.
There was no net cash used in investing and provided by financing activities for the nine months ended September 30, 2017 and 2016.
We have no current source of revenue. In February 2013, as last updated in August 2015, we obtained a formal letter from Can-Fite stating that Can-Fite agreed to defer the payments under the Services Agreement from January 31, 2013 for the performance of the clinical trials of CF101 in ophthalmic indications until the completion of a fundraising by the Company that will allow such payments. Also, in August 2015, Can-Fite issued another financial support letter, pursuant to which it committed to cover any shortfall in the costs and expenses of operations of the Company which were in excess of the Company’s available cash to finance its operations, including cash generated from any future sale of Can-Fite shares. Any related balance on amounts owed bore interest at a rate of 3% per annum. Both letters expired on October 10, 2016. On November 14, 2016, Can-Fite agreed to extend the support letter under the same terms and conditions in order to fund the Company’s operations. Such letter expired on February 28, 2017. Deferred payments under the Services Agreement are currently due. As of September 30, 2017, the deferred payments to Can-Fite totaled $4,942,000.
These conditions raise substantial doubt about our ability to continue as a going concern. The opinion of our independent registered public accounting firm on our audited financial statements as of and for the year ended December 31, 2016 contains an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern. Future reports on our financial statements may include an explanatory paragraph with respect to our ability to continue as a going concern.
As of the date of this report, we have no material capital commitments.
| 16 |
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our consolidated financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity capital expenditures or capital resources.
Critical Accounting Policies
Our significant accounting policies, which include management’s best estimates and judgments, are included in Note 2 to the financial statements for the nine months ended September 30, 2017 included in this Quarterly Report on Form 10-Q for the nine months ended September 30, 2017.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As a smaller reporting company, we have elected not to provide the disclosure required by this item.
Item 4. Controls and Procedures
Evaluation of disclosure controls and procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective in ensuring that information required to be disclosed by us in reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and (ii) is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Changes in internal control over financial reporting
There has been no change in our internal control over financial reporting, as defined in Rule 13a-15(f) of the Exchange Act, during our most recent fiscal quarter ended September 30, 2017, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
| 17 |
PART II-OTHER INFORMATION
Item 1A. Risk Factors
See Item 1A. “Risk Factors” as disclosed in our Annual Report on Form 10-K, as filed with the SEC on March 23, 2017.
Item 6. Exhibits
| SEC Ref. No. | Title of Document | |
| 31.1 | Rule 13a-14(a) Certification by Principal Executive Officer | |
| 31.2 | Rule 13a-14(a) Certification by Principal Financial Officer | |
| 32.1 | Section 1350 Certification of Principal Executive Officer | |
| 32.2 | Section 1350 Certification of Principal Financial Officer | |
| 101.INS | XBRL Instance Document * | |
| 101.SCH | XBRL Taxonomy Extension Schema Document * | |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document * | |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document * | |
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document * | |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document * |
| * | Attached as Exhibit 101 to this report are the following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Comprehensive Loss, (iii) the Condensed Statements of Changes in Stockholders’ Deficiency, (iv) the Condensed Consolidated Statements of Cash Flows, and (v) Notes to Financial Statements. |
| 18 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| OphthaliX Inc. | ||
| Date: November 14, 2017 | By | /s/ Pnina Fishman, |
| Pnina Fishman, Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| Date: November 14, 2017 | By | /s/ Itay Weinstein |
| Itay Weinstein, Chief Financial Officer | ||
| (Principal Financial Officer) | ||
19
Exhibit 31.1
Certification
I, Pnina Fishman, certify that:
1. I have reviewed this Form 10-Q quarterly report of OphthaliX Inc. for the quarter ended September 30, 2017;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 14, 2017
| /s/ Pnina Fishman | |
| Pnina Fishman, Chief Executive Officer | |
| (Principal Executive Officer) |
Exhibit 31.2
Certification
I, Itay Weinstein, certify that:
1. I have reviewed this Form 10-Q quarterly report of OphthaliX Inc. for the quarter ended September 30, 2017;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 14, 2017
| /s/ Itay Weinstein | |
| Itay Weinstein, Chief Financial Officer | |
| (Principal Financial Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report of OphthaliX Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2017, as filed with the Securities and Exchange Commission (the “Report”), the undersigned principal executive officer of the Company, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: November 14, 2017
| /s/ Pnina Fishman | |
| Pnina Fishman, Chief Executive Officer | |
| (Principal Executive Officer) |
Exhibit 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report of OphthaliX Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2017, as filed with the Securities and Exchange Commission (the “Report”), the undersigned principal executive officer of the Company, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: November 14, 2017
| /s/ Itay Weinstein | |
| Itay Weinstein, Chief Financial Officer | |
| (Principal Financial Officer) |
Document and Entity Information - shares |
9 Months Ended | |
|---|---|---|
Sep. 30, 2017 |
Nov. 13, 2017 |
|
| Document and Entity Information [Abstract] | ||
| Entity Registrant Name | OphthaliX, Inc. | |
| Entity Central Index Key | 0001218683 | |
| Trading Symbol | OPLI | |
| Amendment Flag | false | |
| Current Fiscal Year End Date | --12-31 | |
| Document Type | 10-Q | |
| Document Period End Date | Sep. 30, 2017 | |
| Document Fiscal Year Focus | 2017 | |
| Document Fiscal Period Focus | Q3 | |
| Entity Filer Category | Smaller Reporting Company | |
| Entity Common Stock, Shares Outstanding | 10,441,251 |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Sep. 30, 2017 |
Dec. 31, 2016 |
|---|---|---|
| Consolidated Balance Sheets [Abstract] | ||
| Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
| Preferred stock, shares issued | 0 | 0 |
| Preferred stock, shares outstanding | 0 | 0 |
| Common stock, par value | $ 0.001 | $ 0.001 |
| Common stock, shares authorized | 100,000,000 | 100,000,000 |
| Common stock shares issued | 10,441,251 | 10,441,251 |
| Common stock, shares outstanding | 10,441,251 | 10,441,251 |
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||
|---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Dec. 31, 2016 |
|
| Operating expenses: | |||||
| Research and development | $ 2 | $ 30 | $ 11 | $ 158 | $ 199 |
| General and administrative | 126 | 185 | 342 | 293 | 432 |
| Total operating expenses | 128 | 215 | 353 | 451 | 631 |
| Financial expenses, net | 44 | 29 | 249 | 88 | 285 |
| Net loss | $ 172 | $ 244 | $ 602 | $ 539 | $ 916 |
| Net loss per share: | |||||
| Basic and diluted loss per share | $ 0.02 | $ 0.02 | $ 0.06 | $ 0.05 | $ 0.09 |
| Weighted average number of Common Stocks used in computing basic and diluted net loss per share | 10,441,251 | 10,441,251 | 10,441,251 | 10,441,251 | 10,441,251 |
| Available-for-sale investments: | |||||
| Changes in net unrealized (gain) loss from investment in Parent Company | $ (7) | $ 62 | $ (34) | ||
| Total other comprehensive (income) loss | (7) | 62 | (34) | ||
| Comprehensive loss | $ 172 | $ 237 | $ 602 | $ 601 | $ 882 |
Condensed Statements of Changes in Stockholders' Equity Deficiency - USD ($) $ in Thousands |
Total |
Common Stock |
Additional paid-in capital |
Accumulated deficit |
Accumulated other comprehensive loss |
|---|---|---|---|---|---|
| Balance at Dec. 31, 2015 | $ (3,281) | $ 10 | $ 5,516 | $ (8,773) | $ (34) |
| Balance, Shares at Dec. 31, 2015 | 10,441,251 | ||||
| Stock-based compensation | 3 | 3 | |||
| Unrealized loss from investment in Parent Company | (62) | (62) | |||
| Net loss | (539) | (539) | |||
| Balance at Sep. 30, 2016 | (3,879) | $ 10 | 5,519 | (9,312) | (96) |
| Balance, Shares at Sep. 30, 2016 | 10,441,251 | ||||
| Balance at Dec. 31, 2016 | (4,160) | $ 10 | 5,519 | (9,689) | |
| Balance, Shares at Dec. 31, 2016 | 10,441,251 | ||||
| Net loss | (602) | (602) | |||
| Balance at Sep. 30, 2017 | $ (4,762) | $ 10 | $ 5,519 | $ (10,291) | |
| Balance, Shares at Sep. 30, 2017 | 10,441,251 |
General |
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Sep. 30, 2017 | |||||||||||||||||||||
| General [Abstract] | |||||||||||||||||||||
| GENERAL |
In December 2005, the Company ceased its principal business operations and focused its efforts on seeking a business opportunity, becoming a public shell company in the U.S.
Eye-Fite Ltd. (“Eye-Fite” or the “Subsidiary”) was founded on June 27, 2011 in contemplation of the execution of a transaction between Can-Fite BioPharma Ltd. (the “Parent company” or “Can-Fite”), a public company in Israel and U.S, and the Company, as further detailed in Note 1b.
Following the transaction, Denali changed its name to OphthaliX Inc. and also changed its corporate domicile from Nevada to Delaware.
On July 5, 2016, the Company released top-line results from its Phase II clinical trial of CF101 for the treatment of glaucoma. In this trial, no statistically significant differences were found between the CF101 treated group and the placebo group in the primary endpoint of lowering intra ocular pressure (“IOP”). High IOP is a characteristic of glaucoma. CF101 was found to have a favorable safety profile and was well tolerated.
In September 2016, the Company’s Board of Directors and Can-Fite, the Company’s parent and majority shareholder, consented in writing to, among other things, the voluntary dissolution and liquidation of the Company pursuant to a Plan of Dissolution.
In November 2016, the Company’s Board of Directors abandoned the voluntary dissolution and liquidation of the Company. Subsequently, on November 15, 2016, the Company entered into a non-binding letter of intent with an Israeli company for the acquisition of such company by way of a reverse triangular merger. The proposed reverse merger was signed on May 21, 2017. For more information regarding the Merger Agreement refer also to Note 1d.
The Company ceased all research and development operations.
On November 21, 2011 (the “Closing Date”), Can-Fite purchased 8,000,000 shares of the Company’s Common Stock, par value $ 0.001 per share in exchange for all of the issued and outstanding ordinary shares of Eyefite pursuant to the terms of a stock purchase agreement (the “Purchase Agreement”). As a result, Eyefite became a wholly-owned subsidiary of the Company and Can-Fite became its majority stockholder and a parent company.
On November 21, 2011, the Company also issued a warrant to Can-Fite by which Can-Fite has the right, until the earlier of (a) November 21, 2016 and (b) the closing of the acquisition of the Company by another entity, resulting in the exchange of the Company’s outstanding common shares such that its stockholders prior to such transaction own, directly or indirectly, less than 50% of the voting power of the surviving entity, to convert its right to the Additional Payment (as defined below in Note 1b2) into 480,022 shares of Common Stock (subject to adjustment in certain circumstances). The per share exercise price for the shares was $5.148. The warrant expired on November 21, 2016.
Simultaneously with the transactions described above, the Company completed a private placement of shares of Common Stock for gross proceeds of $3,330 through the sale of 646,776 shares to third party investors and sold 466,139 shares of Common Stock to Can-Fite in exchange for 714,922 ordinary shares of Can-Fite (representing approximately 2.5% of Can-Fite’s issued and outstanding share capital as of the Closing Date), valued at $ 2,400 and 97,112 shares to Can-Fite for gross proceeds of $500. As of September 30, 2017, the Company holds 446,827 Can-Fite ordinary shares, representing approximately 1.35% of Can-Fite’s outstanding share capital.
In contemplation of the recapitalization transaction, on November 12, 2012, the Board of Directors, complying with the undertaking taken as part of the recapitalization of the Company on November 21, 2011, formerly resolved to issue to certain investors and Can-Fite, 1,455,228 and 1,267,315 warrants to acquire 323,384 and 281,625 shares of Common Stock of the Company, respectively (the “Warrants”). The exercise price of such Warrants was $7.74 per share. The Warrants were exercisable for a period of five years from their date of grant and did not contain any non- standard anti-dilution provisions. The Warrants expired on November 20, 2016.
The transaction was accounted for as a reverse recapitalization which is outside the scope ASC 805, “Business Combinations”. Under reverse capitalization accounting, EyeFite is considered the acquirer for accounting and financial reporting purposes, and acquired the assets and assumed the liabilities of the Company. Assets acquired and liabilities assumed are reported at their historical amounts. Consequently, the consolidated financial statements of the Company reflect the operations of the acquirer for accounting purposes together with a deemed issuance of shares, equivalent to the shares held by the former shareholders of the legal acquirer and a recapitalization of the equity of the accounting acquirer. These consolidated financial statements include the accounts of the Company since the effective date of the reverse capitalization and the accounts of EyeFite since inception.
In connection with the consummation of the recapitalization transaction, the Company and Can-Fite entered into a license agreement, pursuant to which Can-Fite granted EyeFite a sole and exclusive worldwide license for the use of CF101, solely in the field of ophthalmic diseases (“CF101”). EyeFite was obligated to make to the U.S. National Institutes of Health (“NIH”), with regard to the patents of which are included in the license to EyeFite, for as long as the license agreement between the Company and NIH remains in effect, a nonrefundable minimum annual royalty fee and potential future royalties of 4.0% to 5.5% on net sales.
In addition, the Company will be obligated to make certain milestone payments ranging from $25 to $500 upon the achievement of various development milestones for each indication. As of December 31, 2016, the Company accrued an amount of $100 related to DES Phase III clinical trial and $75 related to the glaucoma Phase II clinical trial. Eye-Fite will also be required to make payments of 20% of sublicensing revenues, excluding royalties and net of the required milestone payments. As of September 30, 2017, the Company did not reach any milestone or generate revenue that would trigger additional payments to Can-Fite.
In addition, following the closing of the recapitalization transaction, Can-Fite, OphthaliX and EyeFite entered into a service agreement (the “Service Agreement”). Pursuant to the terms of the Service Agreement, Can-Fite will manage the research and development activities relating to pre-clinical and clinical studies for the development of the ophthalmic indications of CF101. In consideration for Can-Fite’s services, EyeFite will pay to Can-Fite a service fee (consisting of all expenses and costs incurred by Can-Fite plus 15%). In addition, the Company is committed to future additional payments equal to 2.5% of any and all proceeds received by EyeFite relating to the activities regarding the drug (the “Additional Payment”).
According to the Service Agreement, Can-Fite had the right, to convert the Additional Payment into an additional 480,022 shares of Common Stock of the Company for total consideration of $2,471 (subject to adjustment in certain circumstances). Such right has been expired.
There are no assurances that the Company will be able to obtain an adequate level of financial resources in the next twelve months. The Company will have a severe negative impact on its ability to remain a viable company.
These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.
Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share of Wize common stock that is issued and outstanding will be automatically cancelled and converted into the right to receive that number of validly issued, fully paid and non-assessable shares of Company common stock equal to an initial exchange ratio of 5.3681 shares of OphthaliX common stock for each one Wize ordinary share (as may be adjusted, the “Exchange Ratio”). To that end, as a result a private placement conducted by Wize, the Exchange Ratio adjusted to 4.1781 shares of Company common stock for each one Wize ordinary share. Each convertible note or loan to purchase Wize ordinary shares existing at the time of the Merger Agreement (the “Convertible Loans”) will constitute a convertible note to purchase the number of shares of Company common stock equal to the number of Wize ordinary shares that were subject to a Convertible Loan immediately prior to the Effective Time multiplied by the Exchange Ratio at a proportionally adjusted conversion price. In this respect, it was further agreed that the conversion of all or part of such Convertible Loans (including future investment rights to the holders thereof upon such conversion (the “Future Investment Rights”) and the shares issuable upon exercise of the Future Investment Rights), whether before or after the Effective Time, shall not modify the Exchange Ratio.
Consummation of the Merger is subject to certain closing conditions, including, among other things, (i) the effectiveness of a registration statement on Form S-4, including a proxy statement and prospectus, (ii) approval by the stockholders of the Company and shareholders of Wize, (iii) as of the earlier of the Effective Time or August 30, 2017, Wize shall have available cash and cash equivalents of at least NIS 1,000,000, (iv) the Company has no liabilities as of the Effective Time (including any indebtedness owed to Can-Fite), and (v) receipt by Wize an interim tax pre-ruling from the Israeli Tax Authority. |
Unaudited Condensed Financial Statements |
9 Months Ended | ||
|---|---|---|---|
Sep. 30, 2017 | |||
| Unaudited Condensed Financial Statements [Abstract] | |||
| UNAUDITED CONDENSED FINANCIAL STATEMENTS |
The unaudited Condensed Consolidated Financial Statements of OphthaliX Inc. have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The condensed consolidated balance sheets as of December 31, 2016, included herein were derived from the audited consolidated financial statements for the year ended December 31, 2016. In the opinion of management, all adjustments, including normal recurring accruals, considered necessary for a fair presentation have been included. The results of operations for the nine months ended September 30, 2017, are not necessarily indicative of the results that may be expected for the year ending December 31, 2017, or any future period. The information included in this interim report should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Risk Factors,” “Quantitative and Qualitative Disclosures About Market Risk,” and the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.
The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates under different assumptions or conditions.
The significant accounting policies applied in the annual financial statements of the Company as of December 31, 2016 are applied consistently in these condensed financial statements. For further information, refer to the consolidated financial statements as of December 31, 2016. |
Fair Value Measurements |
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| Fair Value Measurements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FAIR VALUE MEASUREMENTS |
The following table provides information by value level for financial assets that are measured at fair value, as defined by ASC 820, on a recurring basis, as of September 30, 2017 and December 31, 2016.
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Stockholders' Deficiency |
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| Stockholders' Deficiency [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| STOCKHOLDERS' DEFICIENCY |
The shares of Common Stock represent the legal acquirer, meaning OphthaliX’s share capital as of the transaction date.
Shares of Common Stock confer upon the holders the right to receive notice to participate and vote in the general meetings of the Company and the right to receive dividends, if declared.
On July 18, 2013, the Company’s stockholders approved a reverse stock split of one share for each four and one-half shares outstanding (1:4.5) (the “Reverse Split”) which became effective as of the close of business on August 6, 2013. All shares of Common Stock, warrants, options, per share data and exercise prices included in these consolidated financial statements and notes for all periods presented have been retroactively adjusted to reflect the Reverse Split with respect to the Company’s shares of Common Stock.
In contemplation of the Reverse Recapitalization, it was agreed that for each four shares of Common Stock purchased by the investors and Can-Fite, they will be granted by the Company nine warrants to acquire two shares of Common Stock of the Company. The exercise price of the warrants is $7.74 per share of Common Stock. The warrants were exercisable for a period of five years from their date of grant. The warrants did not contain nonstandard anti-dilution provisions. In November 2016, all such warrants expired.
According to ASC 815-40-15 and 25 instructions, the Company’s management evaluated whether the warrants are entitled to the scope exception in ASC 815-10-15-74 (as the warrants meet the definition of a derivative under ASC 815-10-15-83). Based on their straight forward terms (i.e., fix exercise price, no down-round or other provisions that will preclude them from being considered indexed to the Company’s own stock), the Company’s management concluded the warrants should be classified as equity at inception.
In contemplation of the transaction, the Company issued a total of 532,870 fully vested warrants to acquire 118,415 shares of Common Stock to consultants and brokers involved in the transaction. These warrants were exercisable upon the payment of $5.148 per share of Common Stock. In November 2016, all such warrants expired.
In 2012, the Company’s Board of Directors approved the adoption of the 2012 Stock Incentive Plan (the “2012 Plan”). An Israeli annex was subsequently adopted in 2013 to comply with the requirements set by the Israeli law in general and in particular with the provisions of section 102 of the Israeli tax ordinance. Under the 2012 Plan and Israeli annex, the Company may grant its officers, directors, employees and consultants, stock options, restricted stocks and Restricted Stock Units (“RSUs”) of the Company. Each Stock option granted shall be exercisable at such times and terms and conditions as the Company’s Board of Directors may specify in the applicable option agreement, provided that no option will be granted with a term in excess of 10 years. Upon the adoption of the 2012 Plan, the Company reserved for issuance 1,088,888 shares of Common Stock, $0.001 par value each. As of September 30, 2017, the Company has 971,388 shares of Common Stock available for future grant under the 2012 Plan.
During the nine months’ periods ended September 30, 2017 and 2016, no stock options have been granted.
The below is a summary of the Company’s options activity for employees under Company’s 2012 Plan:
As of September 30, 2017, there is no aggregated intrinsic value of outstanding and exercisable options. The aggregate intrinsic value represents the total intrinsic value (the difference between the deemed fair value of the Company’s Ordinary Shares on the last day of the third quarter of 2017 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on September 30, 2017. This amount is impacted by the changes in the fair market value of the Company’s shares.
Stock-based compensation expenses recognized during the nine months’ periods ended September 30, 2017 and 2016 totaled to $0 and $3, respectively. |
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Related Party Transactions |
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| Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RELATED PARTY TRANSACTIONS |
The Company has several related party balances and transaction mainly in connection with the License Agreement with the Parent Company (see also Note 1b2). Details of the transactions with related parties are depicted in the following tables:
Transactions with related parties:
*) Representing an amount less than $1
Balances with Related Parties:
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Fair Value Measurements (Tables) |
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| Fair Value Measurements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of financial assets and liabilities measured at fair value on recurring basis |
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Stockholders' Deficiency (Tables) |
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| Stockholders' Deficiency [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of stock options activity |
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Related Party Transactions (Tables) |
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| Schedule of transactions with related parties |
*) Representing an amount less than $1 |
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| Schedule of balances with related parties |
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General (Details) - USD ($) $ / shares in Units, $ in Thousands |
1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
|---|---|---|---|---|---|---|---|
May 21, 2017 |
Nov. 21, 2011 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Dec. 31, 2016 |
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| General (Textual) | |||||||
| Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||
| Common stock shares issued | 5.3681 | ||||||
| Interest rate | 3.00% | 3.00% | |||||
| License agreement terms | License agreement between the Company and NIH remains in effect, a nonrefundable minimum annual royalty fee and potential future royalties of 4.0% to 5.5% on net sales. | ||||||
| Total operating expenses | $ 128 | $ 215 | $ 353 | $ 451 | $ 631 | ||
| Accumulated deficit | (10,291) | $ (10,291) | (9,689) | ||||
| Merger description | (i) The effectiveness of a registration statement on Form S-4, including a proxy statement and prospectus, (ii) approval by the stockholders of the Company and shareholders of Wize, (iii) as of the earlier of the Effective Time or August 30, 2017, Wize shall have available cash and cash equivalents of at least NIS 1,000,000, (iv) the Company has no liabilities as of the Effective Time (including any indebtedness owed to Can-Fite), and (v) receipt by Wize an interim tax pre-ruling from the Israeli Tax Authority. | ||||||
| Private Placement [Member] | |||||||
| General (Textual) | |||||||
| Common stock gross proceeds | $ 3,330 | ||||||
| Warrant [Member] | |||||||
| General (Textual) | |||||||
| Warrants issued to purchase common stock | 1,267,315 | ||||||
| Maximum [Member] | |||||||
| General (Textual) | |||||||
| Payment for milestone | $ 500 | ||||||
| Minimum [Member] | |||||||
| General (Textual) | |||||||
| Payment for milestone | $ 25 | ||||||
| Eye-Fite Ltd [Member] | |||||||
| General (Textual) | |||||||
| Issuance of common stock to Can-Fite, shares | 8,000,000 | ||||||
| Common stock, par value | $ 0.001 | ||||||
| Accrual clinical trials cost | $ 75 | ||||||
| Percentage of sublicensing revenues | 20.00% | ||||||
| Future additional payments percentage | 2.50% | ||||||
| Can-Fite [Member] | |||||||
| General (Textual) | |||||||
| Common stock shares issued | 480,022 | ||||||
| Exercise price per share | $ 5.148 | ||||||
| Percentage of voting power | 50.00% | ||||||
| Interest rate | 2.50% | ||||||
| Warrants issued to purchase common stock | 1,455,228 | ||||||
| Common stock converted to additional payment | 646,776 | 480,022 | |||||
| Common stock converted to additional payment, value | $ 2,471 | ||||||
| Ordinary shares held | 446,827 | ||||||
| Percentage of issued and outstanding share capital | 1.35% | ||||||
| Accrual clinical trials cost | $ 100 | ||||||
| Percentage of expenses | 15.00% | ||||||
| Deferred payments | $ 4,942 | $ 4,942 | |||||
| Maturity date description | Such letter expired on October 10, 2016 but was extended on November 14, 2016 by Can-Fite under the same terms and conditions in order to fund the Company's operations. Such letter shall expire on the earlier of (1) completion of signed reverse merger transaction as described in note 1a above, or (2) decision of OphthaliX to cease any action in relation to such merger, or (3) February 28, 2017. | ||||||
| Warrants expiration date | Nov. 20, 2016 | ||||||
| Can-Fite [Member] | Private Placement [Member] | |||||||
| General (Textual) | |||||||
| Common stock shares issued | 466,139 | ||||||
| Common stock value issued | $ 2,400 | ||||||
| Shares issued | 97,112 | ||||||
| Ordinary shares received | 714,922 | ||||||
| Gross proceeds | $ 500 | ||||||
| Can-Fite [Member] | Warrant [Member] | |||||||
| General (Textual) | |||||||
| Common stock converted to additional payment | 281,625 | ||||||
| Warrants exercisable period | 5 years | ||||||
| Exercise price of the warrants | $ 7.74 | ||||||
| Investors [Member] | Warrant [Member] | |||||||
| General (Textual) | |||||||
| Common stock converted to additional payment | 323,384 | ||||||
| Warrants exercisable period | 5 years | ||||||
| Exercise price of the warrants | $ 7.74 | ||||||
| 2017 PIPE one (Member) | |||||||
| General (Textual) | |||||||
| Common stock shares issued | 4.1781 | ||||||
Fair Value Measurements (Details) - Recurring [Member] - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
|---|---|---|
| Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
| Investment in Parent Company | $ 383 | $ 530 |
| Total Financial Assets, net | 383 | 530 |
| Level 1 [Member] | ||
| Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
| Investment in Parent Company | 383 | 530 |
| Total Financial Assets, net | 383 | 530 |
| Level 2 [Member] | ||
| Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
| Investment in Parent Company | ||
| Total Financial Assets, net | ||
| Level 3 [Member] | ||
| Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
| Investment in Parent Company | ||
| Total Financial Assets, net |
Stockholders' Deficiency (Details) - Employee Stock Option [Member] |
9 Months Ended |
|---|---|
|
Sep. 30, 2017
USD ($)
$ / shares
shares
| |
| Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
| Number of Shares, Outstanding at the beginning of year | shares | 117,500 |
| Number of Shares, Outstanding at the end of year | shares | 117,500 |
| Number of Shares, Vested and expected to be vested | shares | 117,500 |
| Number of Shares, Exercisable | shares | 117,500 |
| Weighted Average Exercise Price, Outstanding at the beginning of year | $ / shares | $ 7.96 |
| Weighted Average Exercise Price, Outstanding at the end of year | $ / shares | 7.96 |
| Weighted Average Exercise Price, Vested and expected to be vested | $ / shares | 7.96 |
| Weighted Average Exercise Price, Exercisable | $ / shares | $ 7.96 |
| Weighted Average Remaining Contractual Term, Outstanding at the beginning of year (in years) | 5 years 9 months 18 days |
| Weighted-Average Remaining Contractual Term (in years), Outstanding at the end of year | 5 years 2 months 12 days |
| Weighted Average Remaining Contractual Term, Vested and expected to be vested (in years) | 5 years 2 months 12 days |
| Weighted Average Remaining Contractual Term, Exercisable (in years) | 5 years 2 months 12 days |
| Aggregate Intrinsic Value, Outstanding | $ | |
| Aggregate Intrinsic Value, Outstanding at the end of year | $ | |
| Aggregate Intrinsic Value, Vested and expected to be vested | $ | |
| Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value | $ |
Stockholders' Deficiency (Details Textual ) - USD ($) $ / shares in Units, $ in Thousands |
1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
|---|---|---|---|---|---|---|---|
Jul. 18, 2013 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Dec. 31, 2016 |
Dec. 31, 2012 |
|
| Stockholders' Deficiency (Textual) | |||||||
| Reserved for issuance, common stock par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||
| Stock based compensation | $ 3 | $ 3 | |||||
| 2012 Stock Incentive Plan [Member] | |||||||
| Stockholders' Deficiency (Textual) | |||||||
| Stock option plan term description | Each Stock option granted shall be exercisable at such times and terms and conditions as the Company's Board of Directors may specify in the applicable option agreement, provided that no option will be granted with a term in excess of 10 years. | ||||||
| Reserved for issuance, common stock | 1,088,888 | ||||||
| Reserved for issuance, common stock par value | $ 0.001 | ||||||
| Common stock available for future grant | 971,388 | 971,388 | |||||
| Common Stock [Member] | |||||||
| Stockholders' Deficiency (Textual) | |||||||
| Reverse stock split description | Stock split of one share for each four and one-half shares outstanding (1:4.5). | ||||||
| Warrant [Member] | |||||||
| Stockholders' Deficiency (Textual) | |||||||
| Exercise price of the warrants | $ 7.74 | ||||||
| Warrants expiration period | 5 years | ||||||
| Warrants issued to purchase common stock | 532,870 | ||||||
| Common shares sold for considertion | 118,415 | ||||||
| Exercise price | $ 5.148 | $ 5.148 | |||||
Related Party Transactions (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Dec. 31, 2016 |
||||||||||
| Transactions with related parties: | ||||||||||||||
| General and administrative expenses | $ 126 | $ 185 | $ 342 | $ 293 | $ 432 | |||||||||
| Related Parties [Member] | ||||||||||||||
| Transactions with related parties: | ||||||||||||||
| Research and development expenses | [1] | 1 | 30 | 10 | 157 | |||||||||
| General and administrative expenses | [1] | [2] | 1 | [2] | 6 | |||||||||
| Finance expenses, net | [1],[3] | $ 65 | $ 30 | $ 98 | $ 85 | |||||||||
| ||||||||||||||
Related Party Transactions (Details 1) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
|||||
|---|---|---|---|---|---|---|---|
| Balances with Related Parties: | |||||||
| Parent Company | [1] | $ (4,942) | $ (4,459) | ||||
| Investment in Parent Company | [2] | 383 | 530 | ||||
| Other account payables and accrued expenses | [1] | $ (175) | $ (175) | ||||
| |||||||