424B5 1 f424b5072018_therapixbio.htm PROSPECTUS SUPPLEMENT

Filed pursuant to Rule 424(b)(5)

Registration No. 333-225745

 

PROSPECTUS SUPPLEMENT

(To prospectus dated July 20, 2018)

 

642,853 American Depositary Shares

Each Representing 40 Ordinary Shares 

 

 

 

 

We are offering 642,853 of our American Depositary Shares, or ADSs. Each ADS represents 40 of our ordinary shares, par value NIS 0.1 per share, or our Ordinary Shares, at a price of $3.50 per ADS.

 

In a concurrent private placement, we are selling to the investors warrants to purchase up to 482,139 ADSs, representing 482,139 of our Ordinary Shares, at an initial exercise price of $3.50 per ADS, or the Warrants. The Warrants, the ADSs issuable upon the exercise of the Warrants and the Ordinary Shares represented by such ADSs are being offered pursuant to an exemption from registration provided in Section 4(a)(2) under the Securities Act of 1933, as amended, or the Securities Act, and Rule 506(b) promulgated thereunder, and they are not being offered pursuant to this prospectus supplement and the accompanying prospectus. The Warrants are not listed on any securities exchange and we do not expect to list the Warrants on any national securities exchange or other trading market.

 

The ADSs are listed on the Nasdaq Capital Market under the symbol “TRPX.” On March 27, 2019, the last reported sale price of the ADSs on the Nasdaq Capital Market was $3.97 per ADS. The aggregate market value of our outstanding ADSs held by non-affiliates on March 27, 2019 was approximately $13.6 million, based on a per ADS price of $3.97, the price at which the ADSs were last sold on March 27, 2019. During the twelve calendar months immediately prior to and including the date of this prospectus supplement, we have not sold any ADSs pursuant to General Instruction I.B.5. of Form F-3.

 

We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012, and have elected to comply with certain reduced public company reporting requirements.

 

Investing in the ADSs involves a high degree of risk. Before buying any ADSs, you should review carefully the risks and uncertainties described under the heading “Risk Factors” beginning on page S-4 of this prospectus supplement and in the documents incorporated by reference into this prospectus supplement and the accompanying prospectus.

 

Neither the Securities and Exchange Commission, or SEC, nor any state securities commission has approved or disapproved of these securities or passed on completeness or the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

 

Delivery of the ADSs is expected to be made against payment therefor on or about April 1, 2019.

 

The date of this prospectus supplement is March 28, 2019

 

 

 

 

TABLE OF CONTENTS

 

    Page
     
Prospectus Supplement    
     
About this Prospectus Supplement   S-ii
Prospectus Supplement Summary   S-1
Risk Factors   S-4
Cautionary Statement Regarding Forward-Looking Statements   S-7
Use of Proceeds   S-9
Offer and Listing Details   S-10
Dividend Policy   S-11
Capitalization   S-12
Dilution   S-13
Concurrent Private Placement of Warrants   S-14
Plan of Distribution   S-15
Legal Matters   S-15
Experts   S-15
Where You Can Find More Information and Incorporation of Certain Information by Reference   S-16
     
Prospectus    
     
About this Prospectus   ii
Prospectus Summary   1
Risk Factors   4
Note Regarding Forward-Looking Statements   4
Offer Statistics and Expected Timetable   5
Capitalization   5
Price Range of Our ADSs and Ordinary Shares   6
Reasons for the Offer and Use of Proceeds   7
Description of Securities   8
Description of American Depositary Shares   8
Description of Ordinary Shares   15
Description of Debt Securities   21
Description of Rights   26
Description of Warrants   27
Description of Units   27
Plan of Distribution   28
Legal Matters   29
Experts   29
Expenses   30
Incorporation of Certain Information by Reference   30
Where You Can Find Additional Information   31
Enforceability of Civil Liabilities   31
Indemnification for Securities Act Liabilities   32

 

S-i

 

ABOUT THIS PROSPECTUS SUPPLEMENT

 

A registration statement on Form F-3 (File No. 333-225745) utilizing a shelf registration process relating to the securities described in this prospectus supplement was declared effective on July 20, 2018. Under that shelf registration statement, of which this prospectus supplement is a part, we may, from time to time, sell up to an aggregate of $50 million of the ADSs and other securities. Other than ADSs being sold pursuant to this offering, we have not sold any of the ADSs, or any other securities, under that shelf registration statement. We sometimes refer to the ADSs as the “securities” throughout this prospectus supplement.

 

This document contains two parts. The first part is this prospectus supplement, which describes the terms of this offering of the ADSs, and also adds, updates and changes information contained in the accompanying prospectus and the documents incorporated herein and therein by reference. The second part is the accompanying prospectus, which gives more general information about us, some of which may not apply to this offering. You should read both this prospectus supplement and the accompanying prospectus, including the information incorporated by reference herein and therein. To the extent the information contained in this prospectus supplement differs or varies from the information contained in the accompanying prospectus or any document filed prior to the date of this prospectus supplement and incorporated herein or therein by reference, the information in this prospectus supplement will control; provided, that if any statement in one of these documents is inconsistent with a statement in another document having a later date, the statement in the document having the later date modifies or supersedes the earlier statement. In addition, this prospectus supplement and the accompanying prospectus do not contain all of the information provided in the registration statement that we filed with the SEC that contains the accompanying prospectus (including the exhibits to the registration statement). For further information about us, you should refer to that registration statement, which you can obtain from the SEC as described elsewhere in this prospectus supplement under “Where You Can Find More Information and Incorporation of Certain Information by Reference.” You may obtain a copy of this prospectus supplement, the accompanying prospectus and any of the documents incorporated by reference without charge by requesting it from us in writing or by telephone at the following address or telephone number: 4 Ariel Sharon Street, HaShahar Tower, 16th Floor, Givatayim 5320047, Israel. Attention: Oz Adler, Chief Financial Officer, telephone number: +972-3-6167055.

 

You should rely only on the information contained in or incorporated by reference into this prospectus supplement and the accompanying prospectus. We have not authorized anyone to provide you with information that is different. No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in or incorporated by reference into this prospectus supplement and the accompanying prospectus, and you must not rely upon any information or representation not contained in or incorporated by reference into this prospectus supplement or the accompanying prospectus. This prospectus supplement and the accompanying prospectus do not constitute an offer to sell or solicitation of an offer to buy these securities in any circumstances under which the offer or solicitation is unlawful. We are offering to sell, and seeking offers to buy, our securities offered hereby only in jurisdictions where offers and sales are permitted. You should not assume that the information we have included in this prospectus supplement or the accompanying prospectus is accurate as of any date other than the date of this prospectus supplement or the accompanying prospectus, respectively, or that any information we have incorporated by reference is accurate as of any date other than the date of the document incorporated by reference, regardless of the time of delivery of this prospectus supplement and the accompanying prospectus or of any of our securities. Our business, financial condition, results of operations and prospects may have changed since those dates.

 

In this prospectus, unless the context otherwise requires, all references to the “Company,” “we,” “us, “our” and “Therapix” refer to Therapix Biosciences Ltd. and its subsidiaries.

 

All references to “NIS” are to New Israel Shekels, the lawful currency of Israel. All references to “dollars” or “$” are to United States dollars, the lawful currency of the United States.

 

S-ii

 

PROSPECTUS SUPPLEMENT SUMMARY

 

This summary highlights information contained elsewhere or incorporated by reference into this prospectus supplement and the accompanying prospectus. This summary does not contain all of the information that you should consider before investing in our securities. You should carefully read the entire prospectus supplement and the accompanying prospectus, including the “Risk Factors” section, starting on page S-4 of this prospectus supplement and in the documents incorporated by reference into this prospectus supplement and the accompanying prospectus, as well as the financial statements and notes thereto and the other information incorporated by reference herein and therein, before making an investment decision.

 

Overview

 

We are a specialty clinical-stage pharmaceutical company led by an experienced team of senior executives and scientists, focused on creating and enhancing a portfolio of technologies and assets based on cannabinoids pharmaceuticals. We are focusing on a drug development program that we call Joint Pharma, which targets the treatment of the central nervous system and related indications with our product candidate THX 110, which is a combination of our proprietary formulation of palmitoylethanolamide and the U.S. Food and Drug Administration, or FDA, approved synthetic cannabinoid (dronabinol). We are exploring the use of THX 110 for Tourette syndrome, or TS, obstructive sleep apnea and pain. Additionally, as part of our Joint Pharma program, we are developing THX-150 and THX-160, which target multi drug resistant bacteria and pain respectively. THX-150 for Anti-Bacterial Solution is a pharmaceutical formulation utilizing our entourage technology in association with cannabinoids to increase the efficacy of existing antibiotic drugs especially in antibiotic-resistant bacteria strains. THX-160 is a CB2R-specific agonist that has been found to be involved in mediating analgesic effects in the peripheral nervous system, without significant side effects. We have an additional program that we call BrainBright Pharma, which targets the high value and under-served market of mild cognitive impairments, with our proprietary THX-130 drug candidate that is based on an ultra-low dose of FDA approved dronabinol.

 

Regulatory Pathway

 

For the development of THX-110, THX-150 and THX-130, we intend to seek FDA approval for the commercialization of our drug candidates through the Section 505(b)(2) regulatory pathway under the Federal Food, Drug, and Cosmetic Act of 1938, as amended. The FDA’s Section 505(b)(2) regulatory pathway permits the filing of a new drug application, where at least some of the information required for approval comes from studies that were not conducted by or for the applicant, and for which the applicant has not received a right of reference to these studies. This approach could expedite the development program for our product candidates by potentially decreasing the amount of clinical data that we would need to generate in order to obtain FDA approval.

 

In addition, with respect to our Joint Pharma program, we are pursuing orphan drug designation in the United States. In June 2016, we initially submitted a request for orphan drug designation to the FDA for THX-110 for the treatment of TS. The request is still pending and we are in communication with FDA. The last communication was in December 2018 when we received a letter from the FDA questioning if the sub-group of TS that we are pursuing has a prevalence of fewer than 200,000 individuals and thus eligible for orphan drug designation. There is no assurance that we will successfully obtain orphan drug designation for TS, although we believe that we can provide adequate data to address recent issues raised by the FDA.

 

Clinical Trials

 

On April 4, 2018, we announced topline results of our Phase IIa investigator-initiated study at Yale University of THX-110 for the treatment of TS. Following the positive Phase IIa study results, we initiated a randomized, double-blind, placebo controlled study to evaluate the safety, tolerability and efficacy of daily oral THX-110 in treating adults with TS in Germany. The study will include approximately 60 patients. Study patients will be randomized to either oral THX-110 or placebo at a 1:1 ratio. The overall estimated study duration is 24 months. We have not yet enrolled any patients and advancing the trial will be subject to funding and management discretion.

 

Within the THX-110 platform, we also initiated a proof of concept phase IIa clinical trial for obstructive sleep apnea in Israel in 2018, and we expect to complete enrollment by the third quarter of 2019. 

 

Company Information

 

Our registered office and principal place of business is located at 4 Ariel Sharon Street, HaShahar Tower, 16th Floor, Givatayim 5320047, Israel. Our telephone number in Israel is: +972-3-6167055. Our website address is http://therapixbio.com. The information contained on our website or available through our website is not incorporated by reference into and should not be considered a part of this prospectus supplement. 

 

S-1

 

THE OFFERING

 

ADSs offered by us   642,853 ADSs representing 25,714,120 Ordinary Shares.
     
Ordinary Shares to be outstanding after this offering   165,966,494 Ordinary Shares (includes 163,905,324 Ordinary Shares represented by ADSs).
     
The ADSs   Each ADS represents 40 of our Ordinary Shares. The ADSs may be evidenced by American Depositary Receipts. The depositary will be the holder of the Ordinary Shares underlying the ADSs and you will have the rights of an ADS holder as provided in the deposit agreement among us, the depositary and the owners and holders of ADSs from time to time. 
     
    To better understand the terms of the ADSs, you should carefully read the section in the accompanying prospectus entitled “Description of the American Depositary Shares.” We also encourage you to read the deposit agreement referred to above, which is incorporated by reference as an exhibit to the registration statement that includes the accompanying prospectus, and which has been filed as Exhibit A to the Post-Effective Registration Statement on Form F-6 filed by the depositary with the SEC on December 7, 2016.
     
Offering price   The offering price is $3.50 per one ADS. 
     
Use of proceeds   We intend to use the net proceeds from this offering to pay $250,000 towards a portion of the outstanding balance of a convertible debenture between us and YA II PN Ltd., a fund managed by Yorkville Advisors Global, or YA, pursuant to a convertible debenture agreement, entered into in accordance with a securities purchase agreement, each dated as of November 23, 2018, for an initial tranche of $1.5 million, and the remaining balance is intended to be used for general and administrative and product development purposes. 
     
    See “Use of Proceeds” on page S-9 of this prospectus supplement.
     
Concurrent private placement of warrants   In a concurrent private placement, we are selling to the investors who purchase ADSs in this offering warrants to purchase up to 482,139 ADSs, representing 19,285,560 of our Ordinary Shares at an initial exercise price of $3.50 per ADS, or the Warrants. The Warrants will be exercisable upon the offering and sale of the ADSs offered by us in this offering and will expire three years following the date of issuance. The Warrant ADSs issuable upon the exercise of the Warrants and the Ordinary Shares represented by such ADSs are being offered pursuant to an exemption from registration provided in Section 4(a)(2) under the Securities Act and Rule 506(b) promulgated thereunder, and they are not being offered pursuant to this prospectus supplement and the accompanying prospectus. See “Concurrent Private Placement of Warrants” on page S-14 of this prospectus supplement for a more complete description of the concurrent private placement.

 

S-2

 

Depositary   The Bank of New York Mellon. 
     
Risk factors   Investing in the ADSs involves a high degree of risk. See “Risk Factors” beginning on page S-3 of this prospectus supplement and in the documents incorporated by reference into this prospectus supplement and the accompanying prospectus for a discussion of the risks you should carefully consider before deciding to invest in the ADSs.
     
Listing   Our ADSs are listed on the Nasdaq Capital Market under the symbol “TRPX.” The Warrants being issued in the concurrent private placement are not listed on any securities exchange and we do not expect to list the Warrants on Nasdaq, the TASE or any other national securities exchange or any other recognized trading system, and we do not expect a market to develop.

 

Unless otherwise stated, all information in this prospectus supplement is based on 142,252,374 Ordinary Shares outstanding as of March 25, 2019, and does not include the following as of that date:

 

  17,390,000 Ordinary Shares issuable upon the exercise of options outstanding under our 2015 Share Option Plan, at a weighted average exercise price of NIS 0.62 (approximately $0.17) per share, of which 9,971,656 were vested as of March 25, 2019;
     
  13,610,000 Ordinary Shares reserved for issuance and available for future grant under our 2015 Share Option Plan;
     
  423,037 Ordinary Shares issuable upon the exercise of options outstanding under our 2005 Share Option Plan, at a weighted average exercise price of NIS 0.80 (approximately $0.22) per share, of which 423,037 were vested as of March 25, 2019;
     
  19,285,560 Ordinary Shares issuable upon the exercise of Warrants to purchase 482,139 ADSs to be issued in our concurrent private placement, at an exercise price of $3.50 per ADS; or
     
  1,285,680 Ordinary Shares issuable upon the exercise of compensation warrants to purchase 32,142 ADSs at an exercise price of $3.85 per ADS, to be issued to A.G.P./Alliance Global Partners, or A.G.P., in connection with the offering.

 

S-3

 

RISK FACTORS

 

Investing in our securities involves significant risks. Before making an investment decision, you should carefully consider the risks described below and in the documents incorporated by reference into this prospectus supplement and the accompanying prospectus, specifically those risks described in our annual report on Form 20-F for the year ended December 31, 2017, together with all of the other information appearing in this prospectus supplement or the accompanying prospectus or incorporated by reference herein or therein, including in light of your particular investment objectives and financial circumstances. The risks so described are not the only risks we face. Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations and become material. Our business, financial condition and results of operations could be materially adversely affected by any of these risks. The trading price of our securities could decline due to any of these risks, and you may lose all or part of your investment. The discussion of risks includes or refers to forward-looking statements; you should read the explanation of the qualifications and limitations on such forward-looking statements discussed elsewhere in this prospectus supplement under the caption “Cautionary Statement Regarding Forward-Looking Statements” below.

 

Risks Related to this Offering

 

Since we have broad discretion in how we use the proceeds from this offering, we may use the proceeds in ways with which you disagree.

 

We intend to use up to half of any net proceeds from the sale of securities under this prospectus for the acquisition of a yet to be identified business or asset, while the remaining net proceeds are intended to be used for general and administrative and product development purposes. Accordingly, our management will have significant flexibility in applying the net proceeds of this offering. You will be relying on the judgment of our management with regard to the use of these net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used in ways with which you would agree. It is possible that the net proceeds will be invested in a way that does not yield us a favorable, or any, return. The failure of our management to use the net proceeds effectively could have a material adverse effect on our business, financial condition, operating results and cash flow.

 

Investors in this offering will incur immediate dilution from the public offering price.

 

Because the price per ADS of the ADSs being offered is higher than the book value per share of the ADSs, you will suffer immediate dilution in the net tangible book value of the ADSs you purchase in this offering. After giving effect to the sale of 642,853 ADSs in this offering at a public offering price of $3.50 per ADS, and based on the net tangible book value of our Ordinary Shares as of September 30, 2018, if you purchase ADSs in this offering, you will suffer immediate dilution of $1.32 per ADS with respect to the net tangible book value of the ADSs. See “Dilution” for a more detailed discussion of the dilution you will incur in this offering.

 

A substantial number of our Ordinary Shares, underlying the offered ADSs, will be sold in this offering and in a concurrent private placement of the Warrants, and we may sell or issue additional ADSs or Ordinary Shares in the future, which could cause the price of the ADSs to decline.

 

Pursuant to this offering, we will sell 642,853 ADSs, and in a concurrent private placement Warrants to purchase up to 482,139 ADSs, and the underlying Ordinary Shares represented thereby will equal approximately 18.33% of our outstanding Ordinary Shares as of March 25, 2019. This sale and any future issuances or sales of a substantial number of ADSs or Ordinary Shares in the public market or otherwise, or the perception that such issuances or sales may occur, could adversely affect the price of the ADSs. We have issued a substantial number of Ordinary Shares in connection with the exercise of warrants and options to purchase our Ordinary Shares, and in the future we may issue additional shares in connection with the exercise of existing warrants or options, which are eligible for, or may become eligible for, unrestricted resale. Any sales or registration of such shares in the public market or otherwise could reduce the prevailing market price for the ADSs, as well as make future sales of equity securities by us less attractive or not feasible, thus limiting our capital resources.

 

S-4

 

We may need additional financing in the future. We may be unable to obtain additional financing or if we obtain financing it may not be on terms favorable to us. You may lose your entire investment.

 

Based on our current plans, we believe our existing cash and cash equivalents, along with cash generated from this offering, will be sufficient to fund our operating expense and capital requirements for at least six months from the date of this prospectus supplement, although there is no assurance of this and we may need additional funds in the future. If our capital resources are insufficient to meet future capital requirements, we will have to raise additional funds. We may be unable to obtain additional funds through financing activities, and if we obtain financing it may not be on terms favorable to us. If we are unable to obtain additional funds on terms favorable to us, we may be required to cease or reduce our operating activities. If we must cease or reduce our operating activities, you may lose your entire investment.

 

The price of the ADSs may be volatile.

 

The market price of the ADSs has fluctuated in the past. Consequently, the current market price of the ADSs may not be indicative of future market prices, and we may be unable to sustain or increase the value of your investment in the ADSs.

 

We do not anticipate paying any dividends.

 

No dividends have been paid on our Ordinary Shares. We do not intend to pay cash dividends on our Ordinary Shares in the foreseeable future, and anticipate that profits, if any, received from operations will be reinvested in our business. Any decision to pay dividends will depend upon our profitability at the time, cash available and other relevant factors including, without limitation, the conditions set forth in the Israeli Companies Law, or the Companies Law.

 

You may not have the same voting rights as the holders of our Ordinary Shares and may not receive voting materials in time to be able to exercise the right to vote.

 

Holders of the ADSs are not be able to exercise voting rights attaching to the Ordinary Shares underlying the ADSs on an individual basis. Instead, holders of the ADSs appoint the depositary or its nominee as their representative to exercise the voting rights attaching to the Ordinary Shares in the form of ADSs. Purchasers of ADSs in this offering may not receive voting materials in time to instruct the depositary to vote, and it is possible that they, or persons who hold their ADSs through brokers, dealers or other third parties, will not have the opportunity to exercise a right to vote. Furthermore, the depositary will not be liable for any failure to carry out any instructions to vote, for the manner in which any vote is cast or for the effect of any such vote. As a result, you may not be able to exercise voting rights and may lack recourse if your ADSs are not voted as requested.

 

You may not receive the same distributions or dividends as those we make to the holders of our Ordinary Shares, and, in some limited circumstances, you may not receive dividends or other distributions on our Ordinary Shares and you may not receive any value for them, if it is illegal or impractical to make them available to you.

 

The depositary for the ADSs has agreed to pay to you any cash dividends or other distributions it or the custodian receives on our Ordinary Shares or other deposited securities underlying the ADSs, after deducting its fees and expenses. Although, as stated above, we do not currently anticipate paying any dividends, if we do, you will receive these distributions in proportion to the number of Ordinary Shares your ADSs represent. However, the depositary is not responsible if it decides that it is unlawful or impractical to make a distribution available to any holders of ADSs. For example, it would be unlawful to make a distribution to a holder of ADSs if it consists of securities that require registration under the U.S. Securities Act of 1933, as amended, or the Securities Act, but that are not properly registered or distributed under an applicable exemption from registration. In addition, conversion into U.S. dollars from foreign currency that was part of a dividend or distribution made in respect of deposited Ordinary Shares may require the approval or license of, or a filing with, a government or an agency thereof, which may be unobtainable. In these cases, the depositary may determine not to distribute such property and hold it as “deposited securities” or may seek to effect a substitute dividend or distribution, including net cash proceeds from the sale of the dividends or distributions that the depositary deems an equitable and practicable substitute. We have no obligation to register under U.S. securities laws any ADSs, Ordinary Shares, rights or other securities received through such distributions. We also have no obligation to take any other action to permit the distribution of ADSs, Ordinary Shares, rights or anything else to holders of ADSs. In addition, the depositary may withhold from such dividends or distributions its fees and an amount on account of taxes or other governmental charges to the extent the depositary believes it is required to make such withholding. This means that you may not receive the same distributions or dividends as those we make to the holders of our Ordinary Shares, and, in some limited circumstances, you may not receive any value for such distributions or dividends if it is illegal or impractical for us to make them available to you. These restrictions may cause a material decline in the value of the ADSs.

 

S-5

 

You may be subject to limitations on transfer of your ADSs.

 

ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when it deems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generally when our books or the books of the depositary are closed, or at any time if we or the depositary deems it advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason in accordance with the terms of the deposit agreement.

 

ADSs holders may not be entitled to a jury trial with respect to claims arising under the deposit agreement, which could augur less favorable results to the plaintiff(s) in any such action. 

 

The deposit agreement governing the ADSs representing our ordinary shares provides that owners and holders of ADSs irrevocably waive the right to a trial by jury in any legal proceeding arising out of or relating to the deposit agreement or the ADSs, including claims under federal securities laws, against us or the depositary to the fullest extent permitted by applicable law. If this jury trial waiver provision is prohibited by applicable law, an action could nevertheless proceed under the terms of the deposit agreement with a jury trial. To our knowledge, the enforceability of a jury trial waiver under the federal securities laws has not been finally adjudicated by a federal court. However, we believe that a jury trial waiver provision is generally enforceable under the laws of the State of New York, which govern the deposit agreement, by a court of the State of New York or a federal court, which have non-exclusive jurisdiction over matters arising under the deposit agreement, applying such law. In determining whether to enforce a jury trial waiver provision, New York courts and federal courts will consider whether the visibility of the jury trial waiver provision within the agreement is sufficiently prominent such that a party has knowingly waived any right to trial by jury. We believe that this is the case with respect to the deposit agreement and the ADSs. In addition, New York courts will not enforce a jury trial waiver provision in order to bar a viable setoff or counterclaim sounding in fraud or one which is based upon a creditor’s negligence in failing to liquidate collateral upon a guarantor’s demand, or in the case of an intentional tort claim (as opposed to a contract dispute), none of which we believe are applicable in the case of the deposit agreement or the ADSs. No condition, stipulation or provision of the deposit agreement or ADSs serves as a waiver by any holder or owner of ADSs or by us or the depositary of compliance with any provision of the federal securities laws. If you or any other holder or owner of ADSs brings a claim against us or the depositary in connection with matters arising under the deposit agreement or the ADSs, you or such other holder or owner may not be entitled to a jury trial with respect to such claims, which may have the effect of limiting and discouraging lawsuits against us and / or the depositary. If a lawsuit is brought against us and / or the depositary under the deposit agreement, it may be heard only by a judge or justice of the applicable trial court, which would be conducted according to different civil procedures and may augur different results than a trial by jury would have had, including results that could be less favorable to the plaintiff(s) in any such action, depending on, among other things, the nature of the claims, the judge or justice hearing such claims, and the venue of the hearing.

 

S-6

 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

 

This prospectus supplement, the accompanying prospectus and certain information incorporated by reference in this prospectus supplement and the accompanying prospectus contain “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the U.S. Securities Exchange Act of 1934, as amended, or the Exchange Act, and other securities laws. Forward-looking statements are often characterized by the use of forward-looking terminology such as “may,” “will,” “could,” “should,” “expect,” “anticipate” “objective,” “goal,” “intend,” “estimate,” “believe,” “project,” “plan,” “assume” or other similar words, but are not the only way these statements are identified.

 

These forward-looking statements may include, but are not limited to, statements relating to our objectives, plans and strategies, statements that contain projections of results of operations, projected financial position, proposed products, anticipated collaborations, estimated future revenues, projected costs, future prospects, the future of our industry and results that might be obtained by pursuing management’s current plans and objectives are forward-looking statements.

 

Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties. We have based these forward-looking statements on assumptions and assessments made by our management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate.

 

Important factors that could cause actual results, developments and business decisions to differ materially from those anticipated in these forward-looking statements include, among other things:

 

  our ability to advance our product candidates into development path, including the anticipated starting and ending dates of our anticipated clinical trials;
     
  our ability to successfully receive approvals from the FDA or other regulatory bodies, including approval to conduct clinical trials, the scope of those trials and the prospects for regulatory approval of, or other regulatory action with respect to our product candidates, including the regulatory pathway to be designated to our product candidates;
     
  the regulatory environment and changes in the health policies and regimes in the countries in which we operate, including the impact of any changes in regulation and legislation that could affect the pharmaceutical industry;
     
  our ability to commercialize our existing product candidates and future sales of our existing product candidates or any other future potential product candidates;
     
  our ability to meet our expectations regarding the commercial supply of our product candidates;
     
  the overall global economic environment;
     
  the impact of competition and new technologies;
     
  general market, political and economic conditions in the countries in which we operate;
     
  projected capital expenditures and liquidity;
     
  changes in our strategy;
     
  possible acquisitions by us;
     
  the use of proceeds in this offering;
     
  litigation; and
     
  the risk factors included in this prospectus supplement and the risk factors referred to in our most recent Annual Report on Form 20-F in “Item 3. Key Information - D. Risk Factors,” “Item 4. Information on the Company,” and “Item 5. Operating and Financial Review and Prospects,” as well as generally in our most recent Annual Report on Form 20-F, which is incorporated by reference into this prospectus supplement and the accompanying prospectus.

 

S-7

 

You are urged to carefully review and consider the various disclosures made throughout this prospectus supplement and the accompanying prospectus, including in the information incorporated by reference herein and therein, which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.

 

You should not put undue reliance on any forward-looking statements. Any forward-looking statements speak only as of the date they are made, and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

 

In addition, the section of our most recent Annual Report on Form 20-F entitled “Item 4. Information on the Company,” which is incorporated by reference into this prospectus supplement and the accompanying prospectus, contains information obtained from independent industry and other sources that we believe to be reliable, but that we have not independently verified. Accordingly, you should not put undue reliance on this information. 

 

S-8

 

USE OF PROCEEDS

 

We intend to use the net proceeds from this offering to pay $250,000 towards a portion of the outstanding balance of a convertible debenture between us and YA, pursuant to a convertible debenture agreement, entered into in accordance with a securities purchase agreement, each dated as of November 23, 2018, for an initial tranche of $1.5 million, and the remaining balance is intended to be used for general and administrative and product development purposes. The timing and amount of our actual expenditures will be based on many factors, including timing of the above mentioned activities, and, as of the date of this prospectus supplement, we cannot specify with certainty all of the particular uses of the net proceeds from this offering. Accordingly, our management will have significant discretion and flexibility in applying the net proceeds of this offering. We have no current commitments or binding agreements with respect to any material acquisition of or investment in any technologies, products or companies.

 

Pending our use of the net proceeds from this offering, we may invest the net proceeds of this offering in a variety of capital preservation investments, including but not limited to short-term, investment grade, interest bearing instruments and U.S. government securities.

 

S-9

 

OFFER AND LISTING DETAILS

 

The ADSs commenced trading on the OTC Markets on October 6, 2014 under the symbol “THXBY.” On March 22, 2017, the ADSs, each of which represents 40 of our Ordinary Shares, commenced trading on the Nasdaq Capital Market under the symbol “TRPX.” From December 26, 2005 to August 9, 2018, our Ordinary Shares were traded on the Tel Aviv Stock Exchange.

   

On March 27, 2019, the last reported sale price of the ADSs on the Nasdaq Capital Market was $3.97 per ADS.

 

S-10

 

DIVIDEND POLICY

 

To date, we have not declared or paid cash dividends on any of our ADSs or Ordinary Shares, and we have no current intention of paying any cash dividends in the near future.

 

The Companies Law also restricts our ability to declare and pay dividends. We can only distribute dividends from profits (as defined in the Companies Law), if, in the discretion of our board of directors, there is no reasonable concern that the dividend distribution will prevent us from meeting our existing and contingent obligations as they come due.

 

S-11

 

CAPITALIZATION

 

The following table sets forth our total liabilities and shareholders’ equity as of September 30, 2018:

 

  on an actual basis;
     
  on a pro forma basis to give effect to (i) the issuance of a convertible debenture for which we received net proceeds of $1.49 million on November 23, 2018, (ii) convertible loans of an aggregate amount of $667,000 that the Company lent to Therapix Healthcare Resources, Inc., or THR, its majority controlled subsidiary, subsequent to September 30, 2018 and (iii) the conversion of previous loans in the aggregate amount of approximately $1.63 million, but does not reflect the consolidation of THR's financial statements as of September 30, 2018, as well as the reductions in cash subsequent to September 30, 2018 as a result of expenses incurred in the ordinary course of business; and

 

  on an a pro forma as adjusted basis to give effect to the issuance and sale of 642,853 ADSs by us in this offering, including the repayment of $250,000 out of the proceeds of the offering towards a portion of the outstanding balance of a convertible debenture between us and YA and after deducting the estimated offering expenses payable by us.

 

The following table sets forth our total liabilities and shareholders’ equity as of September 30, 2018 and should be read in conjunction with “Use of Proceeds,” our financial statements and related notes that are incorporated by reference into this prospectus supplement and the accompanying prospectus and the other financial information included or incorporated by reference into this prospectus supplement and the accompanying prospectus.

 

    As of September 30, 2018
(in thousands)
 
    Actual     Pro Forma     Pro Forma As
Adjusted
 
Cash and cash equivalents   $ 2,027     $ 2,850     $ 4,534  
Total assets   $ 5,058     $ 6,565     $ 8,249  
Total liabilities   $ 1,447     $ 3,015     $ 2,765  
                         
Shareholders’ equity:                        
Share capital   $ 3,812     $ 3,822     $ 4,531  
Share premium   $ 37,041     $ 37,031     $ 38,256  
Transactions with non-controlling interests   $ 261     $ 261     $ 261  
Reserve for share-based payment transactions   $ 5,390     $ 5,390     $ 5,390  
Foreign currency translation reserve   $ 497     $ 497     $ 497  
Accumulated loss   $ (43,390 )   $ (43,451 )   $ (43,451 )
Total equity   $ 3,611     $ 3,550     $ 5,484  

 

The above table is based on 139,885,534 Ordinary Shares outstanding as of September 30, 2018, and excludes the following as of such date:

 

  17,390,000 Ordinary Shares issuable upon the exercise of options outstanding under our 2015 Share Option Plan, at a weighted average exercise price of NIS 0.62 (approximately $0.17) per share;
     
  13,610,000 Ordinary Shares reserved for issuance and available for future grant under our 2015 Share Option Plan;
     
  423,037 Ordinary Shares issuable upon the exercise of options outstanding under our 2005 Share Option Plan, at a weighted average exercise price of NIS 0.79 (approximately $0.22) per share;
     
  19,285,560 Ordinary Shares issuable upon the exercise of Warrants to purchase 482,139 ADSs to be issued in our concurrent private placement, at an exercise price of $3.50 per ADS; or
     
  1,285,680 Ordinary Shares issuable upon the exercise of compensation warrants to purchase 32,142 ADSs at an exercise price of $3.85 per ADS, to be issued to A.G.P. in connection with the offering.

 

S-12

 

DILUTION

 

If you invest in the ADSs, you will experience immediate dilution to the extent of the difference between the public offering price of the ADSs in this offering and the net tangible book value per ADS immediately after the offering.

 

Our net tangible book value per Ordinary Share is determined by dividing our total tangible assets, less total liabilities, by the actual number of outstanding Ordinary Shares. The net tangible book value of our Ordinary Shares as of September 30, 2018, was $0.026 per Ordinary Share or $1.03 per ADS (using the ratio of 40 Ordinary Shares to one ADS). Net tangible book value per share or per ADS represents the amount of our total tangible assets less our total liabilities, divided by 139,885,534, the total number of Ordinary Shares outstanding at September 30, 2018, or 3,497,138, the total number of ADSs that would represent such total number of shares based on a share-to-ADS ratio of five-to-one.

 

Our pro forma net tangible book of our Ordinary Shares as of September 30, 2018, was $0.03 per Ordinary Share or $1.01 per ADS (using the ratio of 40 Ordinary Shares to one ADS), after giving effect to the issuance of a convertible debenture for which we received net proceeds of $1.49 million on November 23, 2018, convertible loans of an aggregate amount of $667,000 that the Company lent to THR subsequent to September 30, 2018 and the conversion of previous loans in the aggregate amount of approximately $1.63 million, but does not reflect the consolidation of THR's financial statements as of September 30, 2018, as well as the reductions in cash subsequent to September 30, 2018 as a result of expenses incurred in the ordinary course of business.

 

After giving effect to the sale of 642,853 ADSs in this offering at a public offering price of $3.50 per ADS, and after deducting the estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of September 30, 2018 would have been approximately $5.6 million, or $0.03 per Ordinary Share or $1.32 per ADS. This amount represents an immediate increase in net tangible book value of $0 per Ordinary Share or $0.31 per ADS as a result of this offering and an immediate dilution of approximately $1.32 per ADS to investors purchasing ADSs in this offering.

 

The following table illustrates this dilution on a per ADS basis:

 

Public offering price per ADS       $3.50 
Pro forma net tangible book value per ADS as of September 30, 2018  $1.01      
Increase in net tangible book value per ADS attributable to investors purchasing ADSs in this offering  $0.31      
As adjusted net tangible book value per ADS after offering       $1.32 
Dilution per ADS to investors purchasing ADSs in the offering       $2.18 

 

The above discussion and table is based on 139,885,534 Ordinary Shares outstanding as of September 30, 2018, and excludes the following as of such date:

 

  17,390,000 Ordinary Shares issuable upon the exercise of options outstanding under our 2015 Share Option Plan, at a weighted average exercise price of NIS 0.62 (approximately $0.17) per share;
     
  13,610,000 Ordinary Shares reserved for issuance and available for future grant under our 2015 Share Option Plan;
     
  423,037 Ordinary Shares issuable upon the exercise of options outstanding under our 2005 Share Option Plan, at a weighted average exercise price of NIS 0.79 (approximately $0.22) per share;
     
  19,285,560 Ordinary Shares issuable upon the exercise of Warrants to purchase 482,139 ADSs to be issued in our concurrent private placement, at an exercise price of $3.50 per ADS; or
     
  1,285,680 Ordinary Shares issuable upon the exercise of compensation warrants to purchase 32,142 ADSs at an exercise price of $3.85 per ADS, to be issued to A.G.P. in connection with the offering.

 

To the extent that outstanding options or warrants are exercised or we issue additional Ordinary Shares under our equity incentive plans, you may experience further dilution. In addition, we may choose to raise additional capital due to market conditions or strategic considerations even if we believe that we have sufficient funds for our current and future operating plans. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of those securities could result in further dilution to the holders of our Ordinary Shares and ADSs. 

 

S-13

 

CONCURRENT PRIVATE PLACEMENT OF WARRANTS

 

Concurrently with the closing of the sale of ADSs in this offering, we also expect to issue to the investors in this offering in a private placement, warrants to purchase an aggregate of 482,139 of our ADSs, equivalent to 19,285,560 of our Ordinary Shares.

 

Each Warrant shall be exercisable at any time after the offering and sale of the ADSs offered by us in this offering at an initial exercise price equal to $3.50 per ADS and have a term of exercise equal to five and a half years from the issuance date. The exercise price and the number of ADSs issuable upon exercise of the Warrants are subject to appropriate adjustment in the event of certain stock dividends and distributions, stock splits, rights offerings, stock subdivisions and combinations, reclassifications or similar events affecting our ADSs The Warrants may be exercised for cash or on a cashless basis if there is no effective registration statement registering the ADSs issuable upon exercise of the Warrants. Subject to limited exceptions, a holder of Warrants will not have the right to exercise any portion of its Warrants if the holder, together with its affiliates, would beneficially own in excess of 4.99% of the number of shares of our Ordinary Shares outstanding immediately after giving effect to such exercise, subject to increase or decrease up to 9.99% at the election of the holder, provided that any increase shall not be effective until 61 days following notice of such election.

 

The Warrants will be issued without registration under the Securities Act, or state securities laws, in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder and in reliance on similar exemptions under applicable state laws. Accordingly, investors may exercise those Warrants and sell the underlying shares only pursuant to an effective registration statement under the Securities Act covering the resale of those shares, an exemption under Rule 144 under the Securities Act, or another applicable exemption under the Securities Act.

 

S-14

 

PLAN OF DISTRIBUTION

 

The offering price of the ADSs offered by this prospectus supplement and the accompanying prospectus has been determined based upon arm’s length negotiations between the purchasers and us. The ADSs sold pursuant to this prospectus supplement are being sold to accredited and institutional investors. Certain ADSs sold pursuant to this prospectus supplement are being sold to YA, an existing lender of ours with whom we have entered into a prior securities purchase agreement to sell up to $2.5 million in convertible debentures. Accordingly, under this prior securities purchase agreement, we entered into a convertible debenture agreement for $1.5 million, all of which remains outstanding prior to the offering of the ADSs pursuant to this prospectus supplement and the accompanying prospectus. See “Use of Proceeds.”

 

Expenses

 

We estimate the total offering expenses of this offering that will be payable by us will be approximately $130,000, which includes legal, accounting, printing and various other fees. We have also agreed to pay A.G.P. a fee of $186,500 and issue them a warrant to purchase 32,142 ADSs with an exercise price of $3.85 per ADS in connection with A.G.P. acting as financial advisor with respect to the offering.

 

Our obligation to issue and sell the ADSs to the purchasers is subject to the conditions set forth in the securities purchase agreement between us and the purchasers, which may be waived by us at our discretion. A purchaser’s obligation to purchase ADSs is subject to the conditions set forth in the securities purchase agreement between us and the purchaser, which may also be waived. We currently anticipate that the delivery of the ADSs will occur on or about April 1, 2019. At the closing, The Bank of New York Mellon will credit the ADSs to the account of the purchasers.

 

Listing

 

Our ADSs are listed on the Nasdaq under the trading symbol “TRPX.”

 

Depositary Agent

 

The depositary for the ADSs to be issued in this offering is The Bank of New York Mellon.

 

Foreign Regulatory Restrictions on Purchase of Securities Offered Hereby Generally

 

No action has been or will be taken in any jurisdiction (except in the United States) that would permit a public offering of the securities offered by this prospectus supplement and accompanying prospectus, or the possession, circulation or distribution of this prospectus supplement and accompanying prospectus or any other material relating to us or the securities offered hereby in any jurisdiction where action for that purpose is required. Accordingly, the securities offered hereby may not be offered or sold, directly or indirectly, and neither of this prospectus supplement and accompanying prospectus nor any other offering material or advertisements in connection with the securities offered hereby may be distributed or published, in or from any country or jurisdiction except in compliance with any applicable rules and regulations of any such country or jurisdiction.

 

LEGAL MATTERS

 

Certain legal matters governed by Israeli law will be passed upon for us by Horn & Co. – Law Offices, Tel Aviv, Israel. Certain matters of U.S. federal securities law relating to this offering will be passed upon for us by Zysman, Aharoni, Gayer and Sullivan & Worcester LLP, New York, New York.

 

EXPERTS

 

The consolidated financial statements of Therapix Biosciences Ltd.’s Report on Form 20-F as filed with the SEC on April 30, 2018, have been incorporated by reference herein in reliance upon the report of Kost Forer Gabbay & Kasierer (a Member of Ernst & Young Global), an independent registered public accounting firm, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing.

 

S-15

 

WHERE YOU CAN FIND MORE INFORMATION

AND INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

 

We are an Israeli company and are a “foreign private issuer” as defined in Rule 3b-4 under the Exchange Act. As a foreign private issuer, we are exempt from the rules under the Exchange Act related to the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act.

 

In addition, we are not required under the Exchange Act to file annual, quarterly and current reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act. However, we file with the SEC, within 120 days after the end of each fiscal year, or such applicable time as required by the SEC, an annual report on Form 20-F containing financial statements audited by an independent registered public accounting firm, and submit to the SEC, on a Form 6-K, unaudited quarterly financial information.

 

We maintain a corporate website at http://therapixbio.com. Information contained on, or that can be accessed through, our website and other websites listed in this prospectus do not constitute a part of this prospectus. We have included these website addresses in this prospectus solely as inactive textual references.

 

The SEC maintains a web site that contains information we file electronically with the SEC, which you can access over the Internet at http://www.sec.gov.

 

This prospectus supplement and the accompanying prospectus are part of a registration statement on Form F-3 filed by us with the SEC under the Securities Act. As permitted by the rules and regulations of the SEC, this prospectus supplement and the accompanying prospectus do not contain all the information set forth in the registration statement and the exhibits thereto filed with the SEC. For further information with respect to us and the ADSs offered hereby, you should refer to the complete registration statement on Form F-3, which may be obtained from the locations described above in the immediately preceding paragraph. Statements contained in this prospectus supplement, the accompanying prospectus supplement or any document incorporated by reference herein or therein about the contents of any contract or other document are not necessarily complete. If we have filed any contract or other document as an exhibit to the registration statement or any other document incorporated by reference in the registration statement, you should read the exhibit for a more complete understanding of the document or matter involved. Each statement regarding a contract or other document is qualified in its entirety by reference to the actual document.

 

The following documents filed with or furnished to the SEC by us are incorporated by reference in this prospectus supplement and the accompanying prospectus:

 

The Company’s report of foreign private issuer on Form 6-K furnished to the SEC on April 20, 2018, April 27, 2018, May 4, 2018, May 9, 2018, May 17, 2018, June 6, 2018 and June 14, 2018, August 7, 2018, August 20, 2018, October 24, 2018, November 27, 2018, November 29, 2018, December 6, 2018, December 13, 2018, December 21, 2018, January 17, 2019, February 12, 2019, March 7, 2019, March 13, 2019, March 19, 2019, March 26, 2019 and March 28, 2019;

 

The Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2017, filed with the SEC on April 30, 2018; and

 

The description of our Ordinary Shares contained in our Form 8-A filed on March 21, 2017 (File No. 001-38041).

 

All subsequent annual reports on Form 20-F filed by us pursuant to the Exchange Act prior to the termination of this offering shall be deemed to be incorporated by reference to this prospectus supplement and the accompanying prospectus and to be a part hereof and thereof from the date of filing of such documents. We may also incorporate any Form 6-K subsequently submitted by us to the SEC prior to the termination of this offering by identifying in such Forms 6-K that they are being incorporated by reference herein and in the accompanying prospectus, and any Forms 6-K so identified shall be deemed to be incorporated by reference in this prospectus supplement and the accompanying prospectus and to be a part hereof from the date of submission of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein and in the accompanying prospectus shall be deemed to be modified or superseded for purposes of this prospectus supplement and the accompanying prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is incorporated or deemed to be incorporated by reference herein and in the accompanying prospectus modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus supplement or the accompanying prospectus.

 

The information we incorporate by reference is an important part of this prospectus supplement and the accompanying prospectus, and later information that we file with the SEC that is incorporated by reference will automatically update and supersede the information contained in this prospectus supplement and the accompanying prospectus.

 

We will provide you without charge, upon your written or oral request, a copy of any of the documents incorporated by reference in this prospectus, other than exhibits to such documents which are not specifically incorporated by reference into such documents. Please direct your written or telephone requests to us at 4 Ariel Sharon Street, HaShahar Tower, 16th Floor, Givatayim 5320047, Israel. Attention: Oz Adler, Chief Financial Officer, telephone number: +972-3-6167055.

 

S-16

 

PROSPECTUS

 

THERAPIX BIOSCIENCES LTD.

 

$50,000,000

 

American Depositary Shares Representing Ordinary Shares

Ordinary Shares

Debt Securities

Rights

Warrants

Units

 

We may offer and sell from time to time in one or more offerings our American Depositary Shares, or ADSs, ordinary shares, debt securities, rights, warrants and units comprising any combination of these securities having an aggregate offering price up to $50,000,000.

 

Each time we sell securities pursuant to this prospectus, we will provide in a supplement to this prospectus the price and any other material terms of any such offering and the securities offered. Any prospectus supplement may also add, update or change information contained in the prospectus. You should read this prospectus and any applicable prospectus supplement, as well as the documents incorporated by reference or deemed incorporated by reference into this prospectus, carefully before you invest in any securities.

 

Our American Depositary Shares, or ADSs, each representing forty (40) ordinary shares, evidenced by American Depositary Receipts, are traded on the Nasdaq Capital Market under the symbol “TRPX”. On July 13, 2018, the last reported sale price of our ADSs was $3.17 per share. As of July 13, 2018, the aggregate market value of our outstanding ordinary shares held by non-affiliates was approximately $16,436,550, based on 139,885,534 ordinary shares outstanding, of which 2,912,549 shares were held by non-affiliates, and a per ordinary share price of $0.1175 based on the closing sale price of our ADSs on June 13, 2018. We have not sold any securities pursuant to General Instruction I.B.5. of Form F-3 during the prior 12 calendar-month period that ends on, and includes, the date of this prospectus.

 

AN INVESTMENT IN OUR SECURITIES INVOLVES RISKS. SEE THE

SECTION ENTITLED “RISK FACTORS” BEGINNING ON PAGE 4.

 

Neither the Securities and Exchange Commission nor any state or other securities commission has

approved or disapproved of these securities or determined if this prospectus is truthful

or complete. Any representation to the contrary is a criminal offense.

 

This prospectus may not be used to consummate sales of securities unless it is accompanied by a prospectus supplement.

 

The date of this prospectus is July 20, 2018

 

 

 

TABLE OF CONTENTS

 

ABOUT THIS PROSPECTUS   ii
PROSPECTUS SUMMARY   1
RISK FACTORS   4
NOTE REGARDING FORWARD-LOOKING STATEMENTS   4
OFFER STATISTICS AND EXPECTED TIMETABLE   5
CAPITALIZATION   5
PRICE RANGE OF OUR ADSs AND ORDINARY SHARES   6
REASONS FOR THE OFFER AND USE OF PROCEEDS   7
DESCRIPTION OF SECURITIES   8
DESCRIPTION OF AMERICAN DEPOSITARY SHARES   8
DESCRIPTION OF ORDINARY SHARES   15
DESCRIPTION OF DEBT SECURITIES   21
DESCRIPTION OF RIGHTS   26
DESCRIPTION OF WARRANTS   27
DESCRIPTION OF UNITS   27
PLAN OF DISTRIBUTION   28
LEGAL MATTERS   29
EXPERTS   29
EXPENSES   30
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE   30
WHERE YOU CAN FIND ADDITIONAL INFORMATION   31
ENFORCEABILITY OF CIVIL LIABILITIES   31
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES   32

 

i

 

ABOUT THIS PROSPECTUS

 

This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission, or the SEC, using a “shelf” registration process. Under this shelf registration process, we may from time to time sell ADSs, ordinary shares, debt securities, rights, warrants or units comprising any combination of these securities, in one or more offerings up to a total dollar amount of $50,000,000. We have provided to you in this prospectus a general description of the securities we may offer. Each time we sell securities, we will, to the extent required by law, provide a prospectus supplement that will contain specific information about the terms of the offering. We may also add, update or change in any accompanying prospectus supplement or any free writing prospectus we may authorize to be delivered to you any of the information contained in this prospectus. To the extent there is a conflict between the information contained in this prospectus and the prospectus supplement, you should rely on the information in the prospectus supplement, provided that if any statement in one of these documents is inconsistent with a statement in another document having a later date—for example, a document incorporated by reference in this prospectus or any prospectus supplement—the statement in the document having the later date modifies or supersedes the earlier statement. This prospectus, together with any accompanying prospectus supplement and any free writing prospectus we may authorize to be delivered to you, includes all material information relating to the offering of our securities.

 

As permitted by the rules and regulations of the SEC, the registration statement, of which this prospectus forms a part, includes additional information not contained in this prospectus. You may read the registration statement and the other reports we file with the SEC at the SEC’s web site or at the SEC’s offices described below under the heading “Where You Can Find Additional Information.”

 

Unless the context otherwise requires, references to “we,” “our,” “us,” the “Company” or “Therapix” in this prospectus mean Therapix Biosciences Ltd.

 

We report under International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or the IASB. None of the financial statements were prepared in accordance with generally accepted accounting principles in the United States.

 

You should rely only on the information contained or incorporated by reference in this prospectus, any accompanying prospectus supplement or any “free writing prospectus” we may authorize to be delivered to you. We have not authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. You should assume that the information appearing in this prospectus, any prospectus supplement and the documents incorporated by reference herein and therein are accurate only as of their respective dates. Our business, financial condition, results of operations and prospects may have changed since those dates.

 

Neither this prospectus nor any accompanying prospectus supplement shall constitute an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation.

 

ii

 

PROSPECTUS SUMMARY

 

This summary highlights only some of the information included or incorporated by reference in this prospectus. You should carefully read this prospectus together with the additional information about us described in the sections entitled “Incorporation of Certain Information by Reference” and “Where You Can Find Additional Information” before purchasing our securities.

 

Therapix Biosciences Ltd.

 

Overview

 

We are a specialty clinical-stage pharmaceutical company led by an experienced team of senior executives and scientists, focused on creating and enhancing a portfolio of technologies and assets based on cannabinoid pharmaceuticals. With this focus, we have initiated two internal drug development programs based on repurposing an FDA approved synthetic cannabinoid (dronabinol): Joint Pharma developing THX-110 targeted to the treatment of TS and BrainBright Pharma developing THX-130 targeted to the high value and under-served market of MCIs.

 

We intend to seek FDA approval for the commercialization of our drug candidates through the Section 505(b)(2) regulatory pathway under the Federal Food, Drug, and Cosmetic Act of 1938, as amended, or the FDC Act. The FDA’s 505(b)(2) regulatory pathway permits the filing of a new drug application, or NDA, where at least some of the information required for approval comes from studies that were not conducted by or for the applicant, and for which the applicant has not received a right of reference. See “—Clinical Strategy and Preclinical Results.” This approach could expedite the development program for our product candidates by potentially decreasing the amount of clinical data that we would need to generate in order to obtain FDA approval. In addition, with respect to our Joint Pharma program, we intend to pursue orphan drug designation in the United States. In June 2016, we submitted a request for orphan drug designation to the FDA for THX-110 for the treatment of TS. In a letter dated September 29, 2016, the FDA informed us that our request could not be granted at such time, and is being held in abeyance until and subject to us providing additional information pertaining to the overall prevalence of TS in both children and adults, and further clinical data to support our scientific rationale for our request for orphan drug designation within 12 months. In September 2017, we responded to such FDA letter within the designated time frame, and provided the FDA with our articulated and reasoned responses including documentation and clinical data that supports it. On December 26, 2017, we received the FDA’s response to our response. The FDA accepted that there is adequate scientific rationale for the treatment of TS with THX-110 mainly through the preliminary results of ongoing clinical trials, suggesting that THX-110 may provide benefit in treating TS. However, the FDA stated that it was unable to grant our request and indicated that we did not provide adequate prevalence estimates, and any evidence to support our statement that only moderate to severe Tourette’s patients would require pharmacological treatment. We further responded in January 2018 by providing the requested information. We are currently waiting for the FDA’s response. There is no assurance that we will successfully obtain orphan drug designation for TS, although we believe that we can provide adequate data to address all issues raised by the FDA.

 

Joint Pharma

 

Our Joint Pharma program is dedicated to developing a cannabinoid-based drug for the treatment of TS, which is an inherited neuropsychiatric disorder usually onset in childhood. TS is characterized by multiple physical (motor) tics and at least one vocal (phonic) tic. Although TS and other tic disorders were once thought to be very rare, it has become increasingly apparent that they are not that uncommon conditions. While epidemiological study results may vary, according to the U.S. Centers for Disease Control and Prevention, or the CDC, as of 2012, one out of every 360 U.S. children (about 138,000) aged six to 17 years had been diagnosed with TS in the United States. To date, only three drugs have been approved by the FDA to treat TS, most of which are limited to treating only a narrow range of TS symptoms (mainly tics). Additionally, the usefulness of these drugs is also limited, since they are associated with severe side effects that have resulted in the need for a “black box” warning. In many cases “off-label” use of prescription medications not approved for the indication are associated with unwanted severe side effects that, in our opinion, are also detrimental. Therefore, we believe there continues to be a great need for more effective, safer medications targeted at treating tics as well as other features of TS.

 

1

 

We believe our proprietary THX-110 drug candidate takes a unique approach to the treatment of TS. THX-110 is a combination drug candidate based on two components: (1) dronabinol, the active ingredient in an FDA approved synthetic analog of tetrahydrocannabinol, or THC, which is the psychoactive molecule in the cannabis plant, and (2) palmitoylethanolamide, or PEA, which is an endogenous fatty acid amide that belongs to the class of nuclear factor agonists, which are proteins that regulate the expression of genes. We believe that the combination of THC and PEA may induce a reaction known as the “entourage effect.”

 

The basic tenet of the entourage effect is that cannabinoids work together, or possess synergy, and affect the body in a mechanism similar to the body’s own cannabinoid system, which is a group of molecules and receptors in the brain that mediates the psychoactive effects of cannabis. This entourage effect may account for the pharmacological actions of PEA. Based on an activity enhancement of other physiological compounds, PEA may indirectly stimulate the cannabinoid receptors by potentiating their affinity for a receptor or by inhibiting their metabolic degradation, and by doing so, may increase the uptake of cannabinoid compounds, such as THC. Thus, we believe that the presence of the PEA molecule likely increases the efficacy of orally administered THC, while reducing the required dosage and decreasing associated deleterious adverse events.

 

We have completed the preclinical phase of development of THX-110 and recently initiated a proof of concept, or POC, Phase IIa clinical trial in the United States. In addition, we expect to initiate a Phase IIb clinical trial in Europe in the third quarter of 2018.

 

BrainBright Pharma

 

Our BrainBright Pharma program takes a unique approach to developing a treatment for MCI. MCI refers to the transitional state between the cognitive changes of normal aging and very early dementia. Signs of MCI have also been observed with respect to sports-related brain injuries. It can involve problems with memory, language, thinking and judgment that are greater than normal changes related to age. According to the Mayo Clinic Study of Aging published in 2008, the prevalence of MCI increases with age, at a rate of 10% in those aged 70-79 years and 25% in those aged 80-89 years. There is no FDA approved treatment for MCI. As MCI is believed to represent an early state of Alzheimer’s, several Alzheimer’s treatments have been proposed for MCI. However, Alzheimer’s treatments are not currently widely recommended by the medical community for the routine treatment of MCI and have not been shown to delay or prevent the progression of MCI.

 

Our proprietary THX-130 drug candidate is based on an ultra-low dose of FDA approved dronabinol. While the safety and efficacy of drug delivery methods are solely FDA determinations, we believe that both sublingual and nasal administration of dronabinol present several advantages over alternative administration routes, such as oral administration, and may enhance the bioavailability, or the rate and extent of the drug when it reaches the site of action, of an ultra-low dose dronabinol. Sublingual administration has certain advantages over oral administration. For example, it is often faster and it ensures that the substance will risk degradation only by salivary enzymes before entering the bloodstream, whereas orally administered drugs must survive passage through the hostile environment of the gastrointestinal tract, which risks degrading them, either by stomach acid or bile, or by the many enzymes therein. Furthermore, after absorption from the gastrointestinal tract, such drugs must pass to the liver, where they may be extensively altered; this is known as the first pass effect of drug metabolism.

 

We have preclinical data that suggests that using an ultra-low dose of dronabinol may improve cognitive abilities. We intend to conduct a Phase I clinical trial to document the pharmacokinetic parameters of THX-130 and to evaluate drug safety. During the first half of 2018 we expect to initiate a pre-clinical trial to evaluate safety, and efficacy of THX-130 in rat model of Traumatic Brain Injury (TBI) associated MCI with cognitive impairment. In addition, we may conduct further preclinical studies in parallel to our clinical plans as part of the development of our innovative pipeline and for registration purposes.

 

2

 

With respect to both our Joint Pharma and BrainBright Pharma programs, we intend to pursue a section 505(b)(2) regulatory path, which may expedite the development of these programs by potentially decreasing the amount of clinical data that we would need to generate in order to obtain FDA approval. We believe that the key benefits of this strategy include a relatively low scientific-technological risk (compared to the risk of developing drugs based on new molecular entities) combined with relatively low costs and fast time to market. If the FDA does not allow us to pursue the Section 505(b)(2) regulatory pathway as anticipated, we may need to conduct additional clinical trials, provide additional data and information and meet additional standards for regulatory approval. If this were to occur, the time and financial resources required to obtain FDA approval, and complications and risks associated with FDA approval, would substantially increase.

 

Other indications

 

Cannabis and cannabinoids have great therapeutic potential and have been used for years for medicinal purposes. For example, cannabis and cannabinoids are being used to improve the quality of life of patients with numerous and diverse indications (oncological patients, chronic pain conditions, etc.). We believe that the novel approaches and unique mechanism of action of our proprietary technology platforms, including our drug delivery systems and unique combination and specific dosages, may be expanded to treat additional diseases and unmet medical needs.

 

In January 2017, we announced that we intend to initiate an additional program in the area of antimicrobial therapies. Our objective is to use our entourage technology in association with THC to increase the efficacy of existing antibiotic drugs especially in antibiotic-resistant bacteria strains. The resistance to antimicrobials has become a global hazard. We believe that there is an urgent need for the development of novel antimicrobial agents. THC has been shown to have a wide range of important biological activities, including potential antibacterial activity. We are currently in the midst of our pre-clinical research stage for determining an effective dosage of our proprietary formulation.

 

In October 2017, we signed an agreement with Assuta Medical Center to conduct a Phase IIa, sponsor-initiated trial for the treatment of Obstructive Sleep Apnea (OSA) THX-110. The study commenced durring the second quarter of 2018.

 

In December 2017, we contracted with, Comprehensive Research Institute (“CRI”) for the assessment of our proprietary combinational therapy THX-110 in patients suffering from chronic low back pain for whom existing medicines do not provide adequate relief. we expect to commence a Phase IIa clinical trial in the fourth quarter of 2018.

 

In November 2017, we executed a non-exclusive material transfer agreement with Yissum, the technology transfer company of The Hebrew University of Jerusalem, for two synthetic cannabinoids synthesized by Raphael Mechoulam, Ph.D.. we initiated a preliminary preclinical study during the fourth quarter of 2017 to evaluate the opioid-sparing effect of these compounds in a rat model of acute and chronic pain. The follow-up in vivo study started during the second quarter of 2018, and will further evaluate the dosage regiment of the active ingredients, as well as their optimal therapeutic ratio.

 

In November 2017, we entered into an agreement with Dalhousie University to conduct a pre-clinical study with the goal of testing the effect of THX-130 on cognitive and neurological state as well as mortality in a model of repeated mild traumatic brain injury

 

In the future, we may consider expanding our pipeline to include these additional indications.

 

Corporate Information

 

Our legal and commercial name is Therapix Biosciences Ltd. We were incorporated in the State of Israel on August 23, 2004, and are subject to the Israeli Companies Law, 5759-1999, as amended, or the Companies Law. In December 26, 2005, we became a public company in Israel and our shares were listed for trade on the TASE. Our ordinary shares are currently traded on the TASE under the symbol THXBY. Our ADSs representing our ordinary shares currently trade in the United States on the Nasdaq Capital Market under the symbol “TRPX”.

 

Our registered office and principal place of business is located at 4 Ariel Sharon Street, HaShahar Tower, 16th Floor, Givatayim 5320047, Israel. Our telephone number in Israel is: +972-3-6167055.

 

Our website address is http://therapixbio.com. The information contained on our website or available through our website is not incorporated by reference into and should not be considered a part of this annual report on Form 20-F, and the reference to our website in this annual report on Form 20-F is an inactive textual reference only.

 

3

 

RISK FACTORS

 

Investing in our ordinary shares involves risks. Please carefully consider the risk factors described below and in our periodic reports filed with the SEC, including those set forth under the caption “Item 3. Key Information - D. Risk Factors” in our most recently filed annual report on Form 20-F, which is incorporated by reference in this prospectus. Before making an investment decision, you should carefully consider these risks as well as other information we include or incorporate by reference in this prospectus. You should be able to bear a complete loss of your investment.

 

NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This prospectus contains, and any accompanying prospectus supplement will contain, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and the Private Securities Litigation Reform Act of 1995. Also, documents that we incorporate by reference into this prospectus, including documents that we subsequently file with the SEC, will contain forward-looking statements. Forward-looking statements are those that predict or describe future events or trends and that do not relate solely to historical matters. You can generally identify forward-looking statements as statements containing the words “may,” “will,” “could,” “should,” “expect,” “anticipate” “objective,” “goal,” “intend,” “estimate,” “believe,” “project,” “plan,” “assume” or other similar expressions, or negatives of those expressions, although not all forward-looking statements contain these identifying words. All statements contained or incorporated by reference in this prospectus and any prospectus supplement regarding our future strategy, future operations, projected financial position, proposed products, anticipated collaborations, estimated future revenues, projected costs, future prospects, the future of our industry and results that might be obtained by pursuing management’s current plans and objectives are forward-looking statements.

 

You should not place undue reliance on our forward-looking statements because the matters they describe are subject to certain risks, uncertainties and assumptions, including in many cases decisions or actions by third parties, that are difficult to predict. Our forward-looking statements are based on the information currently available to us and speak only as of the date on the cover of this prospectus, the date of any prospectus supplement, or, in the case of forward-looking statements incorporated by reference, the date of the filing that includes the statement. Over time, our actual results, performance or achievements may differ from those expressed or implied by our forward-looking statements, and such difference might be significant and materially adverse to our security holders. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

 

We have identified some of the important factors that could cause future events to differ from our current expectations and they are described in this prospectus and supplements to this prospectus under the caption “Risk Factors,” as well as in our most recent Annual Report on Form 20-F, including without limitation under the captions “Risk Factors” and “Operating and Financial Review and Prospects,” and in other documents that we may file with the SEC, all of which you should review carefully. Please consider our forward-looking statements in light of those risks as you read this prospectus and any prospectus supplement.

 

4

 

OFFER STATISTICS AND EXPECTED TIMETABLE

 

We may sell from time to time pursuant to this prospectus (as may be detailed in prospectus supplements) an indeterminate number of securities as shall have a maximum aggregate offering price of $50,000,000. The actual number of securities and price of the securities that we will offer pursuant hereto will depend on a number of factors that may be relevant as of the time of offer (see “Plan of Distribution” below).

 

CAPITALIZATION

 

The table below sets forth our capitalization as of December 31, 2017:

 

(in thousands)  (in thousands of USD) 
     
Cash and cash equivalents   9,195 
Total assets   9,566 
Total liabilities   1,177 
      
Shareholders’ equity:     
Share capital   3,812 
Share premium   36,612 
Transactions with non-controlling interests   261 
Reserve for share-based payment transactions   5,311 
Foreign currency translation reserve   782 
Accumulated loss   (38,389)
Total equity   8,389 

 

 

* Calculated using the exchange rate reported by the Bank of Israel for December 31, 2017 at the rate of one U.S. dollar per NIS 3.467.

 

5

 

PRICE RANGE OF OUR ADSs AND ORDINARY SHARES

 

Our ordinary shares have been trading on the TASE under the symbol “THXBY” since December 26, 2005. Our ADSs commenced trading on the OTC Markets on October 6, 2014 under the symbol “THXBY”. On March 22, 2017, our ADSs, each of which represents forty (40) of our ordinary shares, commenced trading on the Nasdaq Capital Market under the symbol “TRPX.”

 

On July 13, 2018, the last reported sales price of the ADSs on Nasdaq was $3.17 per ADS. As of July 13, 2018, there was one shareholder of record of the ADSs. The number of record holders is not representative of the number of beneficial holders of the ADSs. The following table sets forth, for the periods indicated, the reported high and low closing sale prices of our ADSs on the Nasdaq Capital Market, OTCQX and OTCQB, as applicable, in U.S. dollars.

 

   U.S.$ Price Per ADS 
   High   Low 
Annual:        
2017   10.95    4.26 
2016   8.02    7.80 
2015   7.80    4.30 
2014 (from October 6, 2014)   6.00    4.30 
           
Quarterly:          

Third Quarter 2018 (through July 13, 2018)

   4.00    3.17 
Second Quarter 2018   7.76    3.84 
First Quarter 2018   6.01    5.08 
Fourth Quarter 2017   7.59    4.26 
Third Quarter 2017   6.27    5.01 
Second Quarter 2017   7.74    5.20 
First Quarter 2017   10.95    6.3 
Fourth Quarter 2016   8.02    8.02 
Third Quarter 2016   8.02    8.02 
Second Quarter 2016   8.02    7.80 
First Quarter 2016   7.80    7.80 
           
Most Recent Six Months:          
June 2018   4.70    3.86 
May 2018   4.70    3.84 
April 2018   7.76    4.17 
March 2018   6.01    5.64 
February 2018   6.31    5.25 
January 2018   6.21    5.08 
December 2017   7.59    5.34 

 

6

 

The following table sets forth, for the periods indicated, the reported high and low closing prices of our ordinary shares on the TASE in NIS and U.S. dollars. U.S. dollar per ordinary share amounts are calculated using the U.S. dollar representative rate of exchange on the date to which the high or low market price is applicable, as reported by the Bank of Israel.

 

   NIS Price Per
Ordinary Share
   U.S.$ Price Per
Ordinary Share
 
   High   Low   High   Low 
Annual:                
2017   0.88    0.40    0.25    0.11 
2016   1.04    0.62    0.26    0.16 
2015   0.99    0.37    0.26    0.09 
2014   1.13    0.38    0.33    0.10 
2013   1.77    0.55    0.49    0.15 
2012   14.21    1.31    3.70    0.35 
                     
Quarterly:                    
Third Quarter (through July 15, 2018)   0.36    0.30    0.10    0.08 
Second Quarter 2018   0.43    0.36    0.12    0.10 
First Quarter 2018   0.55    0.48    0.15    0.13 
Fourth Quarter 2017   0.49    0.45    0.25    0.12 
Third Quarter 2017   0.55    0.50    0.15    0.14 
Second Quarter 2017   0.73    0.54    0.20    0.15 
First Quarter 2017   0.84    0.69    0.23    0.19 
Fourth Quarter 2016   0.83    0.62    0.21    0.16 
Third Quarter 2016   0.93    0.77    0.24    0.21 
Second Quarter 2016   1.01    0.82    0.27    0.21 
First Quarter 2016   1.04    0.85    0.26    0.22 
                     
Most Recent Six Months:                    
June 2018   0.43    0.36    0.12    0.10 
May 2018   0.41    0.35    0.11    0.98 
April 2018   0.65    0.38    0.18    0.10 
March 2018   0.52    0.48    0.15    0.14 
February 2018   0.50    0.48    0.14    0.14 
January 2018   0.55    0.53    0.16    0.15 
December 2017   0.48    0.47    0.14    0.13 

 

On July 15, 2018, the last reported sales price of our ordinary shares on the TASE was NIS 0.30 per share, or $0.08 per share (based on the exchange rate reported by the Bank of Israel for such date). On July 15, 2018, the exchange rate of the NIS to the dollar was $1.00 = NIS 3.6410, as reported by the Bank of Israel. As of July 15, 2018, there were four holders of record of our ordinary shares. The number of record holders is not representative of the number of beneficial holders of our ordinary shares, as the shares of most our shareholders who hold ordinary shares that are traded on the TASE are recorded in the name of our Israeli share registrar, Mizrahi-Tefahot Nominees Company Ltd. As of June 13, 2018, there were no record holders of our ordinary shares in the United States. We will be voluntarily delisting our ordinary shares from the TASE on August 9, 2018.

 

Dividend Policy

 

To date, we have not declared or paid cash dividends on any of our shares, and we have no current intention of paying any cash dividends in the near future.

 

The Companies Law also restricts our ability to declare and pay dividends. We can only distribute dividends from profits (as defined in the Companies Law), if, in the discretion of our board of directors, there is no reasonable concern that the dividend distribution will prevent us from meeting our existing and contingent obligations as they come due.

 

REASONS FOR THE OFFER AND USE OF PROCEEDS

 

We cannot assure you that we will receive any proceeds in connection with securities offered pursuant to this prospectus. Unless otherwise indicated in the applicable prospectus supplement, we intend to use any net proceeds from the sale of securities under this prospectus for our operations and for other general corporate purposes, which may include repayment or refinancing of indebtedness or other corporate borrowings, working capital, intellectual property protection and enforcement, capital expenditures, investments, acquisitions or collaborations, research and development and product development. We may set forth additional information on the use of proceeds from the sale of securities we offer under this prospectus in a prospectus supplement relating to the specific offering. We have not determined the amount of net proceeds to be used specifically for the foregoing purposes. As a result, our management will have broad discretion in the allocation of the net proceeds. Pending use of the net proceeds, we would expect to invest any proceeds in a variety of capital preservation instruments, including short-term, investment-grade, interest-bearing instruments.

 

7

 

DESCRIPTION OF SECURITIES

 

The descriptions of the securities contained in this prospectus, together with the applicable prospectus supplements, summarize the material terms and provisions of the various types of securities that we may offer. We will describe in the applicable prospectus supplement relating to any securities the particular terms of the securities offered by that prospectus supplement. If we so indicate in the applicable prospectus supplement, the terms of the securities may differ from the terms we have summarized below.

 

We may sell from time to time, in one or more offerings, ADSs, ordinary shares, debt securities, rights, warrants to purchase ordinary shares and units comprising any combination of these securities.

 

In this prospectus, we refer to the ADSs, ordinary shares, debt securities, rights, warrants and units that may be offered by us collectively as “securities.” The total dollar amount of all securities that we may issue under this prospectus will not exceed $50,000,000.

 

This prospectus may not be used to consummate a sale of securities unless it is accompanied by a prospectus supplement.

 

DESCRIPTION OF AMERICAN DEPOSITARY SHARES

 

The Bank of New York Mellon, as depositary, will register and deliver ADSs. Each ADS will represent forty (40) shares (or a right to receive forty (40) shares) deposited with the principal Tel Aviv office of Bank HaPoalim, as custodian for the depositary. Each ADS will also represent any other securities, cash or other property which may be held by the depositary. The depositary’s office at which the ADSs will be administered is located at 101 Barclay Street, New York, New York 10286. The Bank of New York Mellon’s principal executive office is located at 225 Liberty Street, New York, New York 10286.

 

You may hold ADSs either (A) directly (i) by having an ADR, which is a certificate evidencing a specific number of ADSs, registered in your name, or (ii) by having ADSs registered in your name in the Direct Registration System, or (B) indirectly by holding a security entitlement in ADSs through your broker or other financial institution. If you hold ADSs directly, you are a registered ADS holder, also referred to as an ADS holder. This description assumes you are an ADS holder. If you hold the ADSs indirectly, you must rely on the procedures of your broker or other financial institution to assert the rights of ADS holders described in this section. You should consult with your broker or financial institution to find out what those procedures are.

 

The Direct Registration System, also referred to as DRS, is a system administered by The Depository Trust Company, also referred to DTC, under which the depositary may register the ownership of uncertificated ADSs, which ownership is confirmed by statements sent by the depositary to the registered holders of uncertificated ADSs.

 

As an ADS holder, we will not treat you as one of our shareholders and you will not have shareholder rights. Israeli law governs shareholder rights. The depositary will be the holder of the shares underlying your ADSs. As a registered holder of ADSs, you will have ADS holder rights. A deposit agreement among us, the depositary, ADS holders and all other persons indirectly or beneficially holding ADSs sets out ADS holder rights as well as the rights and obligations of the depositary. New York law governs the deposit agreement and the ADSs.

 

Our articles of association contain a provision that gives the authority to our Board of Directors (instead of our officers or shareholders at a general meeting, for example) to refer an action to arbitration. However, such arbitration provision is not mandatory and it does not prevent ADS holders or ordinary shareholders from pursuing claims under the United States federal securities laws.

 

The following is a summary of the material provisions of the deposit agreement. For more complete information, you should read the entire deposit agreement and the form of ADR.

 

8

 

Dividends and Other Distributions

 

How will you receive dividends and other distributions on the shares?

 

The depositary has agreed to pay to ADS holders the cash dividends or other distributions it or the custodian receives on shares or other deposited securities, after deducting its fees and expenses. You will receive these distributions in proportion to the number of shares your ADSs represent.

 

Cash.

 

The depositary will convert any cash dividend or other cash distribution we pay on the shares into U.S. dollars, if it can do so on a reasonable basis and can transfer the U.S. dollars to the United States. If that is not possible or if any government approval is needed and cannot be obtained, the deposit agreement allows the depositary to distribute the foreign currency only to those ADS holders to whom it is possible to do so. It will hold the foreign currency it cannot convert for the account of the ADS holders who have not been paid. It will not invest the foreign currency and it will not be liable for any interest.

 

Before making a distribution, any withholding taxes, or other governmental charges that must be paid will be deducted. See “Taxation”. It will distribute only whole U.S. dollars and cents and will round fractional cents to the nearest whole cent. If the exchange rates fluctuate during a time when the depositary cannot convert the foreign currency, you may lose some or all of the value of the distribution.

 

Shares.

 

The depositary may distribute additional ADSs representing any shares we distribute as a dividend or free distribution. The depositary will only distribute whole ADSs. It will sell shares which would require it to deliver a fraction of an ADS (or ADSs representing those shares) and distribute the net proceeds in the same way as it does with cash. If the depositary does not distribute additional ADSs, the outstanding ADSs will also represent the new shares. The depositary may sell a portion of the distributed shares sufficient to pay its fees and expenses in connection with that distribution (or ADSs representing those shares).

 

Rights to purchase additional shares.

 

If we offer holders of our securities any rights to subscribe for additional shares or any other rights, the depositary may make these rights available to ADS holders. If the depositary decides it is not legal and practical to make the rights available but that it is practical to sell the rights, the depositary will use reasonable efforts to sell the rights and distribute the proceeds in the same way as it does with cash. The depositary will allow rights that are not distributed or sold to lapse. In that case, you will receive no value for them.

 

If the depositary makes rights available to ADS holders, it will exercise the rights and purchase the shares on your behalf. The depositary will then deposit the shares and deliver ADSs to the persons entitled to them. It will only exercise rights if you pay it the exercise price and any other charges the rights require you to pay.

 

U.S. securities laws may restrict transfers and cancellation of the ADSs represented by shares purchased upon exercise of rights. For example, you may not be able to trade these ADSs freely in the United States. In this case, the depositary may deliver restricted depositary shares that have the same terms as the ADSs described in this section except for changes needed to put the necessary restrictions in place.

 

Other Distributions.

 

The depositary will send to ADS holders anything else we distribute on deposited securities by any means it thinks is legal, fair and practical. If it cannot make the distribution in that way, the depositary has a choice. It may decide to sell what we distributed and distribute the net proceeds, in the same way as it does with cash. Or, it may decide to hold what we distributed, in which case ADSs will also represent the newly distributed property. However, the depositary is not required to distribute any securities (other than ADSs) to ADS holders unless it receives satisfactory evidence from us that it is legal to make that distribution. The depositary may sell a portion of the distributed securities or property sufficient to pay its fees and expenses in connection with that distribution.

 

The depositary is not responsible if it decides that it is unlawful or impractical to make a distribution available to any ADS holders. We have no obligation to register ADSs, shares, rights or other securities under the Securities Act. We also have no obligation to take any other action to permit the distribution of ADSs, shares, rights or anything else to ADS holders. This means that you may not receive the distributions we make on our shares or any value for them if it is illegal or impractical for us to make them available to you.

 

9

 

Deposit, Withdrawal and Cancellation

 

How are ADSs issued?

 

The depositary will deliver ADSs if you or your broker deposits shares or evidence of rights to receive shares with the custodian. Upon payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, the depositary will register the appropriate number of ADSs in the names you request and will deliver the ADSs to or upon the order of the person or persons that made the deposit.

 

How can ADS holders withdraw the deposited securities?

 

You may surrender your ADSs at the depositary’s office. Upon payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, the depositary will deliver the shares and any other deposited securities underlying the ADSs to the ADS holder or a person the ADS holder designates at the office of the custodian. Or, at your request, risk and expense, the depositary will deliver the deposited securities at its office, if feasible.

 

How do ADS holders interchange between certificated ADSs and uncertificated ADSs?

 

You may surrender your ADR to the depositary for the purpose of exchanging your ADR for uncertificated ADSs. The depositary will cancel that ADR and will send to the ADS holder a statement confirming that the ADS holder is the registered holder of uncertificated ADSs. Alternatively, upon receipt by the depositary of a proper instruction from a registered holder of uncertificated ADSs requesting the exchange of uncertificated ADSs for certificated ADSs, the depositary will execute and deliver to the ADS holder an ADR evidencing those ADSs.

 

Voting Rights

 

How do you vote?

 

ADS holders may instruct the depositary how to vote the number of deposited shares their ADSs represent. Otherwise, you won’t be able to exercise your right to vote unless you withdraw the shares. However, you may not know about the meeting enough in advance to withdraw the shares.

 

The depositary will notify ADS holders of shareholders’ meetings and arrange to deliver our voting materials to them if we ask it to. Those materials will describe the matters to be voted on and explain how ADS holders may instruct the depositary how to vote. For instructions to be valid, they much reach the depositary by a date set by the depositary.

 

The depositary will try, as far as practical, subject to the laws of Israel and of our articles of association or similar documents, to vote or to have its agents vote the shares or other deposited securities as instructed by ADS holders. The depositary will only vote or attempt to vote as instructed or as described in the following sentence. If we asked the depositary to solicit your instructions at least 30 days before the meeting date but the depositary does not receive voting instructions from you by the specified date, it will consider you to have authorized and directed it to give a discretionary proxy to a person designated by us to vote the number of deposited securities represented by your ADSs. The depositary will give a discretionary proxy in those circumstances to vote on all questions at to be voted upon unless we notify the depositary that:

 

  we do not wish to receive a discretionary proxy;
     
  there is substantial shareholder opposition to the particular question; or
     
  the particular question would have an adverse impact on our shareholders.

 

We are required to notify the depositary if one of the conditions specified above exists.

 

10

 

We cannot assure you that you will receive the voting materials in time to ensure that you can instruct the depositary to vote your shares. In addition, the depositary and its agents are not responsible for failing to carry out voting instructions or for the manner of carrying out voting instructions. This means that you may not be able to exercise your right to vote and there may be nothing you can do if your shares are not voted as you requested.

 

In order to give you a reasonable opportunity to instruct the Depositary as to the exercise of voting rights relating to Deposited Securities, if we request the Depositary to act, we agree to give the Depositary notice of any such meeting and details concerning the matters to be voted upon at least 30 days in advance of the meeting date.

 

Fees and Expenses

 

Persons depositing or withdrawing shares or ADS holders must pay:   For:
     
$5.00 (or less) per 100 ADSs (or portion of 100 ADSs).  

Issuance of ADSs, including issuances resulting from a distribution of shares or rights or other property.

 

Cancellation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates.

     
$.05 (or less) per ADS.  

Any cash distribution to ADS holders.

     

A fee equivalent to the fee that would be payable if securities distributed to you had been shares and the shares had been deposited for issuance of ADSs.

  Distribution of securities distributed to holders of deposited securities which are distributed by the depositary to ADS holders.
     
$.05 (or less) per ADS per calendar year.  

Depositary services. 

     
Registration or transfer fees.  

Transfer and registration of shares on our share register to or from the name of the depositary or its agent when you deposit or withdraw shares.

     
Expenses of the depositary.  

Cable, telex and facsimile transmissions (when expressly provided in the deposit agreement).

 

Converting foreign currency to U.S. dollars.

     

Taxes and other governmental charges the depositary or the custodian has to pay on any ADSs or shares underlying ADSs, such as stock transfer taxes, stamp duty or withholding taxes.

 

As necessary.

 

     
Any charges incurred by the depositary or its agents for servicing the deposited securities.   As necessary.

 

The depositary collects its fees for delivery and surrender of ADSs directly from investors depositing shares or surrendering ADSs for the purpose of withdrawal or from intermediaries acting for them. The depositary collects fees for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees. The depositary may collect its annual fee for depositary services by deduction from cash distributions or by directly billing investors or by charging the book-entry system accounts of participants acting for them. The depositary may collect any of its fees by deduction from any cash distribution payable to ADS holders that are obligated to pay those fees. The depositary may generally refuse to provide fee-attracting services until its fees for those services are paid.

 

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From time to time, the depositary may make payments to us to reimburse us for costs and expenses generally arising out of establishment and maintenance of the ADS program, waive fees and expenses for services provided to us by the depositary or share revenue from the fees collected from ADS holders. In performing its duties under the deposit agreement, the depositary may use brokers, dealers, foreign currency dealers or other service providers that are owned by or affiliated with the depositary and that may earn or share fees, spreads or commissions.

 

The depositary may convert currency itself or through any of its affiliates and, in those cases, acts as principal for its own account and not as agent, advisor, broker or fiduciary on behalf of any other person and earns revenue, including, without limitation, transaction spreads, that it will retain for its own account. The revenue is based on, among other things, the difference between the exchange rate assigned to the currency conversion made under the deposit agreement and the rate that the depositary or its affiliate receives when buying or selling foreign currency for its own account. The depositary makes no representation that the exchange rate used or obtained in any currency conversion under the deposit agreement will be the most favorable rate that could be obtained at the time or that the method by which that rate will be determined will be the most favorable to ADS holders, subject to the depositary’s obligations under the deposit agreement. The methodology used to determine exchange rates used in currency conversions is available upon request.

 

Payment of Taxes

 

You will be responsible for any taxes or other governmental charges payable on your ADSs or on the deposited securities represented by any of your ADSs. The depositary may refuse to register any transfer of your ADSs or allow you to withdraw the deposited securities represented by your ADSs until such taxes or other charges are paid. It may apply payments owed to you or sell deposited securities represented by your ADSs to pay any taxes owed and you will remain liable for any deficiency. If the depositary sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay to ADS holders any proceeds, or send to ADS holders any property, remaining after it has paid the taxes.

Reclassifications, Recapitalizations and Mergers

 

If we:   Then:
     
Change the nominal or par value of our shares   The cash, shares or other securities received by the depositary will become deposited securities. Each ADS will automatically represent its equal share of the new deposited securities.
  Reclassify, split up or consolidate any of the deposited securities    
Distribute securities on the shares that are not distributed to you   The depositary may distribute new ADSs representing the new deposited securities or ask you to surrender your outstanding ADRs in exchange for new ADRs identifying the new deposited securities.
Recapitalize, reorganize, merge, liquidate, sell all or substantially all of our assets, or take any similar action  

 

Amendment and Termination

 

How may the deposit agreement be amended?

 

We may agree with the depositary to amend the deposit agreement and the ADRs without your consent for any reason. If an amendment adds or increases fees or charges, except for taxes and other governmental charges or expenses of the depositary for registration fees, facsimile costs, delivery charges or similar items, or prejudices a substantial right of ADS holders, it will not become effective for outstanding ADSs until 30 days after the depositary notifies ADS holders of the amendment. At the time an amendment becomes effective, you are considered, by continuing to hold your ADSs, to agree to the amendment and to be bound by the ADRs and the deposit agreement as amended.

 

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How may the deposit agreement be terminated?

 

The depositary will terminate the deposit agreement at our direction by mailing notice of termination to the ADS holders then outstanding at least 30 days prior to the date fixed in such notice for such termination. The depositary may also terminate the deposit agreement by mailing notice of termination to us and the ADS holders if 60 days have passed since the depositary told us it wants to resign but a successor depositary has not been appointed and accepted its appointment.

 

After termination, the depositary and its agents will do the following under the deposit agreement but nothing else: collect distributions on the deposited securities, sell rights and other property, and deliver shares and other deposited securities upon cancellation of ADSs. Four months after termination, the depositary may sell any remaining deposited securities by public or private sale. After that, the depositary will hold the money it received on the sale, as well as any other cash it is holding under the deposit agreement for the pro rata benefit of the ADS holders that have not surrendered their ADSs. It will not invest the money and has no liability for interest. The depositary’s only obligations will be to account for the money and other cash. After termination our only obligations will be to indemnify the depositary and to pay fees and expenses of the depositary that we agreed to pay.

 

Limitations on Obligations and Liability

 

Limits on our Obligations and the Obligations of the Depositary; Limits on Liability to Holders of ADSs

 

The deposit agreement expressly limits our obligations and the obligations of the depositary. It also limits our liability and the liability of the depositary. We and the depositary:

 

  are only obligated to take the actions specifically set forth in the deposit agreement without negligence or bad faith;
     
  are not liable if we are or it is prevented or delayed by law or circumstances beyond our control from performing our or its obligations under the deposit agreement;
     
  are not liable if we or it exercises discretion permitted under the deposit agreement;

 

  are not liable for the inability of any holder of ADSs to benefit from any distribution on deposited securities that is not made available to holders of ADSs under the terms of the deposit agreement, or for any special, consequential or punitive damages for any breach of the terms of the deposit agreement;
     
  have no obligation to become involved in a lawsuit or other proceeding related to the ADSs or the deposit agreement on your behalf or on behalf of any other person;
     
  are not liable for the acts or omissions of any securities depository, clearing agency or settlement system; and
     
  may rely upon any documents we believe or it believes in good faith to be genuine and to have been signed or presented by the proper person.

 

In the deposit agreement, we and the depositary agree to indemnify each other under certain circumstances.

 

Requirements for Depositary Actions

 

Before the depositary will deliver or register a transfer of ADSs, make a distribution on ADSs, or permit withdrawal of shares, the depositary may require:

 

  payment of stock transfer or other taxes or other governmental charges and transfer or registration fees charged by third parties for the transfer of any shares or other deposited securities;
     
  satisfactory proof of the identity and genuineness of any signature or other information it deems necessary; and
     
  compliance with regulations it may establish, from time to time, consistent with the deposit agreement, including presentation of transfer documents.

 

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The depositary may refuse to deliver ADSs or register transfers of ADSs when the transfer books of the depositary or our transfer books are closed or at any time if the depositary or we think it advisable to do so.

 

Your Right to Receive the Shares Underlying your ADSs

 

ADS holders have the right to cancel their ADSs and withdraw the underlying shares at any time except:

 

  when temporary delays arise because: (1) the depositary has closed its transfer books or we have closed our transfer books; (2) the transfer of shares is blocked to permit voting at a shareholders’ meeting; or (3) we are paying a dividend on our shares;
     
  when you owe money to pay fees, taxes and similar charges; or
     
  when it is necessary to prohibit withdrawals in order to comply with any laws or governmental regulations that apply to ADSs or to the withdrawal of shares or other deposited securities.
     
  This right of withdrawal may not be limited by any other provision of the deposit agreement.

 

Pre-release of ADSs

 

The deposit agreement permits the depositary to deliver ADSs before deposit of the underlying shares. This is called a pre-release of the ADSs. The depositary may also deliver shares upon cancellation of pre-released ADSs (even if the ADSs are canceled before the pre-release transaction has been closed out). A pre-release is closed out as soon as the underlying shares are delivered to the depositary. The depositary may receive ADSs instead of shares to close out a pre-release. The depositary may pre-release ADSs only under the following conditions: (1) before or at the time of the pre-release, the person to whom the pre-release is being made represents to the depositary in writing that it or its customer owns the shares or ADSs to be deposited; (2) the pre-release is fully collateralized with cash or other collateral that the depositary considers appropriate; and (3) the depositary must be able to close out the pre-release on not more than five business days’ notice. In addition, the depositary will limit the number of ADSs that may be outstanding at any time as a result of pre-release, although the depositary may disregard the limit from time to time, if it thinks it is appropriate to do so.

 

Direct Registration System

 

In the deposit agreement, all parties to the deposit agreement acknowledge that the DRS and Profile Modification System, or Profile, will apply to uncertificated ADSs upon acceptance thereof to DRS by DTC. DRS is the system administered by DTC under which the depositary may register the ownership of uncertificated ADSs, which ownership will be confirmed by statements sent by the depositary to the registered holders of uncertificated ADSs. Profile is a required feature of DRS that allows a DTC participant, claiming to act on behalf of a registered holder of ADSs, to direct the depositary to register a transfer of those ADSs to DTC or its nominee and to deliver those ADSs to the DTC account of that DTC participant without receipt by the depositary of prior authorization from the ADS holder to register that transfer.

 

In connection with and in accordance with the arrangements and procedures relating to DRS/Profile, the parties to the deposit agreement understand that the depositary will not determine whether the DTC participant that is claiming to be acting on behalf of an ADS holder in requesting registration of transfer and delivery described in the paragraph above has the actual authority to act on behalf of the ADS holder (notwithstanding any requirements under the Uniform Commercial Code). In the deposit agreement, the parties agree that the depositary’s reliance on and compliance with instructions received by the depositary through the DRS/Profile System and in accordance with the deposit agreement will not constitute negligence or bad faith on the part of the depositary.

 

Shareholder communications; inspection of register of holders of ADSs

 

The depositary will make available for your inspection at its office all communications that it receives from us as a holder of deposited securities that we make generally available to holders of deposited securities. The depositary will send you copies of those communications if we ask it to. You have a right to inspect the register of holders of ADSs, but not for the purpose of contacting those holders about a matter unrelated to our business or the ADSs.

 

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DESCRIPTION OF ORDINARY SHARES

 

As of July 13, 2018, our authorized share capital consisted of 300,000,000 ordinary shares, NIS 0.1 par value per share, of which 139,885,534 shares were issued and outstanding as of such date. All of our outstanding ordinary shares have been validly issued, are fully paid and non-assessable. Our ordinary shares are not redeemable and are not subject to any preemptive right.

 

On January 12, 2014, we effected a reverse split of our share capital, in which every ten ordinary shares were converted to one ordinary share. All descriptions of our share capital in this prospectus reflect such reverse split.

 

In the last three years, we have issued an aggregate of approximately 121.5 million ordinary shares in several private placements, options exercises and public offerings for aggregate net proceeds of NIS 60.5 million (approximately $16.4 million).

 

In addition to ordinary shares, in the last three years, we have issued warrants to purchase an aggregate of 37,867,223 ordinary shares with exercise prices ranging from NIS 0.50 (approximately $0.12) to NIS 1.90 (approximately $0.55) per share, out of which 26,776,256 warrants were exercised and 11,090,967 have expired. In addition, we have granted options to purchase an aggregate of 24,839,278 ordinary shares with exercise prices ranging from NIS 0.50 (approximately $0.13) to NIS 1.061 (approximately $0.28) per share, out of which 41,666 options were exercised and 4,214,779 have expired.

 

Purposes and Objects of the Company

 

Our purpose is set forth in Section 2 of our articles of association and includes every lawful purpose.

 

The Powers of the Directors

 

Our Board of Directors shall direct our policy and shall supervise the performance of our Chief Executive Officer and his actions. Pursuant to the Companies Law and our articles of association, our Board of Directors may exercise all powers and take all actions that are not required under the Companies Law or our articles of association to be exercised or taken by our shareholders, including the power to borrow money for Company purposes.

 

Rights Attached to Shares

 

Our ordinary shares shall confer upon the holders thereof:

 

  equal right to attend and to vote at all of our general meetings, whether regular or special, with each ordinary share entitling the holder thereof, which attend the meeting and participate at the voting, either in person or by a proxy or by a written ballot, to one vote;
     
  equal right to participate in distribution of dividends, if any, whether payable in cash or in bonus shares, in distribution of assets or in any other distribution, on a per share pro rata basis; and
     
  equal right to participate, upon our dissolution, in the distribution of our assets legally available for distribution, on a per share pro rata basis.

 

All ordinary shares have identical voting and other rights in all respects.

 

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Dividend and Liquidation Rights and Bonus Shares

 

We may declare a dividend to be paid to the holders of our ordinary shares in proportion to their respective shareholdings. Under the Companies Law, dividend distributions are determined by the Board of Directors and do not require the approval of the shareholders of a company unless the company’s articles of association provide otherwise. Our articles of association do not require shareholder approval of a dividend distribution and/or issuance of bonus shares and provide that our Board of Directors may, on its sole discretion, determine dividend distributions and/or issuance of bonus shares. We have never declared or paid any cash dividends and do not presently plan to pay cash dividends in the foreseeable future.

 

Pursuant to the Companies Law, the distribution amount is limited to the greater of retained earnings or earnings generated over the previous two years, according to our then last reviewed or audited financial statements, provided that the date of the financial statements is not more than six months prior to the date of the distribution, or we may otherwise distribute dividends that do not meet such criteria only with court approval. In each case, we are only permitted to distribute a dividend if our Board of Directors and the court, if applicable, determines that there is no reasonable concern that payment of the dividend will prevent us from satisfying our existing and foreseeable obligations as they become due.

 

In the event of our liquidation, after satisfaction of liabilities to creditors, our assets will be distributed to the holders of our ordinary shares in proportion to their shareholdings. This right, as well as the right to receive dividends, may be affected by the grant of preferential dividend or distribution rights to the holders of a class of shares with preferential rights that may be authorized in the future.

 

There are currently no Israeli currency control restrictions on remittances of dividends on our ordinary shares, proceeds from the sale of the shares or interest or other payments to non-residents of Israel, except for shareholders who are subjects of countries that are, or have been, in a state of war with Israel.

 

Access to Corporate Records

 

Under the Companies Law, shareholders are provided access to: minutes of our general meetings; our shareholders register and principal shareholders register, articles of association and financial statements; and any document that we are required by law to file publicly with the Israeli Companies Registrar or the ISA. In addition, shareholders may request to be provided with any document related to an action or transaction requiring shareholder approval under the related party transaction provisions of the Companies Law. We may deny this request if we believe it has not been made in good faith or if such denial is necessary to protect our interest or protect a trade secret or patent.

 

Transfer of Shares

 

Our fully paid ordinary shares are issued in registered form and may be freely transferred under our articles of association, unless the transfer is restricted or prohibited by another instrument, applicable law, or the rules of a stock exchange on which the shares are listed for trade. The ownership or voting of our ordinary shares by non-residents of Israel is not restricted in any way by our articles of association or the laws of the State of Israel, except for ownership by nationals of some countries that are, or have been, in a state of war with Israel.

 

Election of Directors

 

Our ordinary shares do not have cumulative voting rights for the election of directors. As a result, the holders of a majority of the voting power represented at a shareholders meeting have the power to elect all of our directors, subject to the special approval requirements for external directors described under “Management — External Directors.” Pursuant to our articles of association, our directors are elected at an annual general meeting and/or a special meeting of our shareholders and serve on the Board of Directors until the next annual general meeting (except for external directors) or until they resign or until they cease to act as board members pursuant to the provisions of our articles of association or any applicable law, upon the earlier. Pursuant to our articles of association, other than the external directors, for whom special election requirements apply under the Companies Law, the vote required to appoint a director is a simple majority vote of holders of our voting shares, participating and voting at the relevant meeting. A director whose tenure has ended may be reelected. In addition, our articles of association allow our Board of Directors to appoint directors to fill vacancies or as an addition to the Board of Directors (subject to the maximum number of directors) to serve until the next general meeting where directors are elected or earlier if required by our articles of association or applicable law, upon the earlier. External directors are elected for an initial term of three years and may be removed from office pursuant to the terms of the Companies Law. See “Management—Board Practices—External Directors.”

 

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Annual and Special Meetings

 

Under the Companies Law, we are required to hold an annual general meeting of our shareholders once every calendar year, at such time and place which shall be determined by our Board of Directors, that must be no later than 15 months after the date of the previous annual general meeting. All meetings other than the annual general meeting of shareholders are referred to as special general meetings. Our Board of Directors may call special meetings whenever it sees fit, at such time and place, within or outside of Israel, as it may determine, and upon the written request of: (a) any two of our directors or such number of directors equal to one quarter of the directors present at such a meeting; and/or (b) one or more shareholders holding, in the aggregate, either (a) 5% or more of our outstanding issued shares and 1% of our outstanding voting power or (b) 5% of our outstanding voting power. One or more shareholders, holding 1% or more of the outstanding voting power, may ask the board to add an item to the agenda of a prospective meeting, if the proposal merits discussion at the general meeting.

 

Subject to the provisions of the Companies Law and the regulations promulgated thereunder, shareholders entitled to participate and vote at general meetings are the shareholders of record on a date to be decided by the Board of Directors, which may be between four and 40 days prior to the date of the meeting. Furthermore, the Companies Law requires that resolutions regarding the following matters must be passed at a general meeting of our shareholders:

 

  amendments to our articles of association;
     
  the exercise of our Board of Director’s powers if our Board of Directors is unable to exercise its powers and the exercise of any of its powers is required for our proper management;
     
  appointment or termination of our auditors;
     
  appointment of directors, including external directors;
     
  approval of acts and transactions requiring general meeting approval (namely certain related party transactions) pursuant to the provisions of the Companies Law and any other applicable law;
     
  increases or reductions of our authorized share capital; and
     
  a merger (as such term is defined in the Companies Law).

 

Notices

 

The Companies Law requires that a notice of any annual or special shareholders meeting be provided at least 21 days prior to the meeting, and if the agenda of the meeting includes certain matters prescribed under the Companies Law and the regulations promulgated thereafter, among others, the appointment or removal of directors, the approval of transactions with office holders or interested or related parties, or an approval of a merger, notice must be provided at least 35 days prior to the publications of such meeting.

 

Under the regulations of the Companies Law, certain exemptions and reliefs with respect to the manner of announcing the convening of the general meeting of shareholders are granted to companies whose securities are traded outside of Israel. We may use these exemptions and reliefs after this offering.

 

Under our articles of association, shareholders are not permitted to take action via written consent in lieu of a meeting.

 

Quorum

 

As permitted under the Companies Law, and our articles of association, the quorum required for our general meetings consists of at least three shareholders present in person, by proxy or written ballot, who hold or represent between them at least thirty percent of the total outstanding voting rights (instead of 33 1/3% of the issued share capital required under the Nasdaq Listing Rules). If within half an hour of the time appointed for the general meeting a quorum is not present, the general meeting shall stand adjourned the same day of the following week, at the same hour and in the same place, or to such other date, time and place as prescribed in the notice to the shareholders and in such adjourned meeting, if no quorum is present within half an hour of the time arranged, any number of shareholders participating in the meeting, shall constitute a quorum.

 

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If a general meeting was summoned following the request of a shareholder, then a quorum required in an adjourned general meeting, shall consist of at least one or more shareholders, which holds and represents at least 5% of the company’s issued and outstanding share capital and at least 1% of the company voting rights, or one or more shareholder, which holds at least 5% of the Company’s voting rights.

 

Adoption of Resolutions

 

Our articles of association provide that all resolutions of our shareholders require a simple majority vote, unless otherwise required under the Companies Law or our articles of association. A shareholder may vote in a general meeting in person, by proxy or by a written ballot. Under the Companies Law, each of (i) the approval of an extraordinary transaction with a controlling shareholder, (ii) the terms of employment or other engagement of the controlling shareholder of the company or such controlling shareholder’s relative (even if not extraordinary) requires, the approval described above under “Management — Approval of Related Party Transactions Under Israeli Law — Disclosure of Personal Interests of Controlling Shareholders,” and (iii) the approval of certain compensation-related matters require the approval described above under “-Board Committees-Compensation Committee.” Under our articles of association, the alteration of the rights, privileges, preferences, or obligations of any class of our shares requires a simple majority vote of the class so affected (or such other percentage of the relevant class that may be set forth in the governing documents relevant to such class), in addition to the ordinary majority vote of all classes of shares voting together as a single class at a shareholder meeting. An exception to the simple majority vote requirement is a resolution for the voluntary winding up, or an approval of a scheme of arrangement or reorganization, of the company pursuant to Section 350 of the Companies Law, which requires the approval of holders of 75% of the voting rights represented at the meeting, in person, by proxy, or by voting deed and voting on the resolution. In addition, the general meeting of our shareholders can decide to alter our articles of association, which decision requires - in addition to any other majority requirement and except as expressly provided otherwise on our articles of association - a simple majority vote of the shareholders attending such general meeting (without counting abstentions).

 

Changing Rights Attached to Shares

 

Unless otherwise provided by the terms of the shares and subject to any applicable law, in order to change the rights attached to any class of shares, such change must be adopted at a general meeting of the affected class or by a written consent of all the shareholders of the affected class.

 

The enlargement of an existing class of shares or the issuance of additional shares thereof, shall not be deemed to modify the rights attached to the previously issued shares of such class or of any other class, unless otherwise provided by the terms of the shares.

 

Registration Rights

 

None of our shareholders is entitled to registration rights.

 

Provisions Restricting Change in Control of Our Company - Acquisitions under Israeli Law

 

Merger

 

The Companies Law includes provisions that allow a merger transaction and requires that each company that is a party to the merger have the transaction approved by its Board of Directors and a vote of the majority of its shares (unless certain requirements described under the Companies Law are met) and, in the case of the target company, a majority vote of each class of its shares, voted on the proposed merger at a shareholders meeting.

 

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For purposes of the shareholder vote of each party, unless a court rules otherwise, the merger will not be deemed approved if shares representing a majority of the voting power present at the shareholders meeting and which are not held by the other party to the merger (or by any person who holds 25% or more of the voting power or the right to appoint 25% or more of the directors of the other party) vote against the merger. If, however, the merger involves a merger with a company’s own controlling shareholder or if the controlling shareholder has a personal interest in the merger, then the merger is instead subject to the same special majority approval that governs all extraordinary transactions with controlling shareholders (as described under “Management — Approval of Related Party Transactions Under Israeli Law — Disclosure of Personal Interests of a Controlling Shareholder”).

 

If the transaction would have been approved by the shareholders of a merging company but for the separate approval of each class or the exclusion of the votes of certain shareholders as provided above, a court may still approve the merger upon the request of holders of at least 25% of the voting rights of a company, if the court holds that the merger is fair and reasonable, taking into account the value of the parties to the merger and the consideration offered to the shareholders of the target company.

 

Upon the request of a creditor of either party to the proposed merger, the court may delay or prevent the merger if it concludes that there exists a reasonable concern that as a result of the merger the surviving company will be unable to satisfy the obligations of any of the parties to the merger and may further give instructions to secure the rights of creditors. In addition, a merger may not be completed unless at least (1) 50 days have passed from the time that the requisite proposals for approval of the merger were filed with the Israeli Registrar of Companies by each merging company and (2) 30 days have passed since the merger was approved by the shareholders of each merging company.

 

Special Tender Offer

 

The Companies Law also provides that an acquisition of shares in a public company must be made by means of a special tender offer if as a result of the acquisition (i) the purchaser would become a 25% or greater shareholder of the company, unless there is already another 25% or greater shareholder of the company or (ii) the purchaser would become a more than 45% shareholder of the company, unless there is already a shareholder holding more than 45% of the company, subject to certain exceptions. These requirements do not apply if, in general, the acquisition (i) was made in a private placement that received shareholder approval, (ii) was from a 25% or greater shareholder of the company which resulted in the acquirer becoming a 25% or greater shareholder of the company, or (iii) was from a shareholder holding more than 45% of the company’s issued and outstanding share capital which resulted in the acquirer becoming a holder of more than 45% of the company’s issued and outstanding share capital.

 

A special tender offer must be extended to all shareholders, but the offeror is not required to purchase more than 5% of the company’s outstanding shares, regardless of how many shares are tendered by shareholders. In general, the tender offer may be consummated only if (i) at least 5% of the company’s outstanding shares will be acquired by the offeror and (ii) the number of shares tendered in the offer exceeds the number of shares whose holders objected to the offer (excluding the purchaser, controlling shareholders, holders of 25% or more of the voting rights in the company or any person having a personal interest in the acceptance of the tender offer). If a special tender offer is accepted, then the purchaser or any person or entity controlling it or under common control with the purchaser or such controlling person or entity may not make a subsequent tender offer for the purchase of shares of the target company and may not enter into a merger with the target company for a period of one year from the date of the offer, unless the purchaser or such person or entity undertook to effect such an offer or merger in the initial special tender offer.

 

If a tender offer is not accepted in accordance with the requirements set forth above, the acquirer may not acquire shares (either alone or together with others) that will increase its holdings to 25% or more or above 45% (as may be the case) of the company’s issued and outstanding share capital or of the applicable class and such shares shall not bestow upon such acquirer any rights and shall become treasury shares for as long as the acquirer holds said shares. In addition, if a shareholder’s holding in a company increases to 25% or greater of the company’s issued and outstanding share capital or above 45% of the company’s issued and outstanding share capital, among others, as a result of the company’s shares becoming treasury shares following a distribution event, then such excess shares shall not bestow upon their holder any voting rights for as long as the holder holds said excess shares. These rules shall apply with respect to the offering under this prospectus (i.e., prior to the listing of our ADSs on the Nasdaq).

 

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Full Tender Offer

 

A person wishing to acquire shares of an Israeli public company and who would as a result hold (either alone or together with others) over 90% of the target company’s issued and outstanding share capital is required by the Companies Law to make a tender offer to all of the company’s shareholders for the purchase of all of the issued and outstanding shares of the company. A person wishing to acquire shares of a public Israeli company and who would as a result hold (either alone or together with others) over 90% of the issued and outstanding share capital of a certain class of shares is required to make a tender offer to all of the shareholders who hold shares of the relevant class for the purchase of all of the issued and outstanding shares of that class. If the shareholders who do not accept the offer hold less than 5% of the issued and outstanding share capital of the company or of the applicable class, and more than half of the shareholders who do not have a personal interest in the offer accept the offer, all of the shares that the acquirer offered to purchase will be transferred to the acquirer by operation of law. However, a tender offer will also be accepted if the shareholders who do not accept the offer hold less than 2% of the issued and outstanding share capital of the company or of the applicable class of shares.

 

Upon a successful completion of such a full tender offer, any shareholder that was an offeree in such tender offer, whether such shareholder accepted the tender offer or not, may, within six months from the date of acceptance of the tender offer, petition an Israeli court to determine whether the tender offer was for less than fair value and that the fair value should be paid as determined by the court. However, under certain conditions, the offeror may include in the terms of the tender offer that an offeree who accepted the offer will not be entitled to petition the Israeli court as described above.

 

If a tender offer is not accepted in accordance with the requirements set forth above, the acquirer may not acquire shares from shareholders who accepted the tender offer that will increase its holdings to more than 90% of the company’s issued and outstanding share capital or of the applicable class.

 

If a tender offer is not accepted in accordance with the requirements set forth above, the acquirer may not acquire shares (either alone or together with others) that will increase its holdings to more than 90% of the company’s issued and outstanding share capital or of the applicable class and such shares shall not bestow upon such acquirer any rights and shall become treasury shares for as long as the acquirer holds said shares.

 

Anti-Takeover Provisions under Israeli Law

 

For as long as our securities are traded on the TASE, the Securities Law does not allow us, to create and issue shares having rights different from those attached to our ordinary shares, including shares providing certain preferred rights with respect to voting, distributions, or other matters and shares having preemptive rights. The authorization and designation of a class of preferred shares will require an amendment to our articles of association, which requires the prior approval of the holders of a majority of the voting power attaching to our issued and outstanding shares at a general meeting. The convening of the meeting, the shareholders entitled to participate and the majority vote required to be obtained at such a meeting will be subject to the requirements set forth in the Companies Law as described above in “Description of Share Capital” and “Management.”

 

Lastly, Israeli tax law treats some acquisitions, such as stock-for-stock exchanges between an Israeli company and a foreign company, less favorably than U.S. tax laws. For example, Israeli tax law may, under certain circumstances, subject a shareholder who exchanges his ordinary shares for shares in another corporation to taxation prior to the sale of the shares received in such stock-for-stock swap.

 

Changes in Our Capital

 

Our articles of association enable us to increase or reduce our share capital. Any such changes are subject to the provisions of the Companies Law and must be approved by a resolution duly passed by our shareholders at a general meeting. In addition, transactions that have the effect of reducing capital, such as the declaration and payment of dividends in the absence of sufficient retained earnings or profits, require the approval of both our Board of Directors and an Israeli court.

 

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The general meeting may, by a simple majority vote of the shareholders attending the general meeting:

 

  increase our registered share capital by the creation of new shares from the existing class or a new class, as determined by the general meeting;
     
  cancel any registered share capital which have not been taken or agreed to be taken by any person;
     
  consolidate and divide all or any of our share capital into shares of larger nominal value than our existing shares;
     
  subdivide our existing shares or any of them, our share capital or any of it, into shares of smaller nominal value than is fixed;
     
  reduce our share capital subject to approval required by the Companies Law; and
     
  modify, cancel, convert, extend, add to or otherwise modify the rights, privileges, advantages, limitations and instructions related or unrelated to the Company’s shares at the time.

 

DESCRIPTION OF DEBT SECURITIES

 

The following description, together with the additional information we include in any applicable prospectus supplement, summarizes the material terms and provisions of the debt securities that we may offer under this prospectus. While the terms we have summarized below will apply generally to any future debt securities we may offer, we will describe the particular terms of any debt securities that we may offer in more detail in the applicable prospectus supplement. If we so indicate in a prospectus supplement, the terms of any debt securities we offer under that prospectus supplement may differ from the terms we describe below.

 

We will issue senior notes under a senior indenture that we will enter into with a trustee to be named in the senior indenture. We will issue subordinated notes under a subordinated indenture that we will enter into with a trustee to be named in the subordinated indenture. We have filed forms of these documents as exhibits to the registration statement, of which this prospectus forms a part. We will describe changes to the indentures in connection with an offering of debt securities in a prospectus supplement. We use the term “indentures” to refer to both the senior indenture and the subordinated indenture. The indentures will be qualified under the Trust Indenture Act of 1939, or the Trust Indenture Act. We use the term “trustee” to refer to either the trustee under the senior indenture or the trustee under the subordinated indenture, as applicable.

 

The following summaries of material provisions of senior notes, subordinated notes and the indentures are subject to, and qualified in their entirety by reference to, the provisions of the indenture applicable to a particular series of debt securities. Except as we may otherwise indicate, the terms of the senior indenture and the subordinated indenture are identical.

 

General

 

If we decide to issue any senior notes or subordinated notes pursuant to this prospectus, we will describe in a prospectus supplement the terms of the series of notes, including the following:

 

  the title of the notes;

 

  any limit on the amount that may be issued;

 

  whether or not we will issue the series of notes in global form, the terms and who the depository will be;

 

  the maturity date;

 

  the annual interest rate, which may be fixed or variable, or the method for determining the rate and the date interest will begin to accrue, the dates interest will be payable and the regular record dates for interest payment dates or the method for determining such dates;

 

  If the notes are guaranteed the name of the guarantor and a brief outline of the contract of guarantee;

 

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  whether or not the notes will be secured or unsecured, and the terms of any secured debt;

 

  whether or not the notes will be senior or subordinated;

 

  the terms of the subordination of any series of subordinated debt;

 

  the terms on which the notes may be convertible into or exchangeable for ordinary shares or other securities of ours, including provisions as to whether conversion or exchange is mandatory, at the option of the holder or at our option and provisions pursuant to which the number of ordinary shares or other securities of ours that the holders of the series of debt securities receive would be subject to adjustment;

 

  the place where payments will be payable and the currency in which the debt is payable;

 

  our right, if any, to defer payment of interest and the maximum length of any such deferral period;

 

  the date, if any, after which, and the price at which, we may, at our option, redeem the series of notes pursuant to any optional redemption provisions ;

 

  the date, if any, on which, and the price at which we are obligated, pursuant to any mandatory sinking fund provisions or otherwise, to redeem, or at the holder’s option to purchase, any series of notes which are not convertible into or exchangeable for our securities;

 

  whether the indenture will restrict our ability to pay dividends, or will require us to maintain any asset ratios or reserves;

 

  whether we will be restricted from incurring any additional indebtedness;

 

  a discussion of any material or special U.S. federal income tax considerations;

 

  the denominations in which we will issue the series of notes, if other than denominations of $1,000 and any integral multiple thereof;

 

  the definition and consequences of events of default under the indentures; and

 

  any other specific terms, preferences, rights or limitations of, or restrictions on, the debt securities.

 

Subordination of Subordinated Notes

 

Subordinated notes will be unsecured and will be subordinate and junior in priority of payment to certain indebtedness to which we may be subject to the extent described in a prospectus supplement. The subordinated indenture does not limit the amount of subordinated notes that we may issue. It also does not limit us from issuing any other secured or unsecured debt.

 

Form, Exchange and Transfer

 

We will issue the notes of each series only in fully registered form without coupons and, unless we otherwise specify in the applicable prospectus supplement, in denominations of $1,000 and any integral multiple thereof. The indentures provide that we may issue notes of a series in temporary or permanent global form and as book-entry securities that will be deposited with, or on behalf of, The Depository Trust Company, New York, New York, or DTC, or another depository named by us and identified in a prospectus supplement with respect to that series.

 

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At the option of the holder, subject to the terms of the indentures and the limitations applicable to global securities described in the applicable prospectus supplement, the holder of the notes of any series can exchange the notes for other notes of the same series, in any authorized denomination and of like tenor and aggregate principal amount.

 

Subject to the terms of the indentures and the limitations applicable to global securities set forth in the applicable prospectus supplement, holders of the notes may present the notes for exchange or for registration of transfer, duly endorsed or with the form of transfer endorsed thereon duly executed if so required by us or the security registrar, at the office of the security registrar or at the office of any transfer agent designated by us for this purpose. Unless otherwise provided in the notes that the holder presents for transfer or exchange, we will not require any payment for any registration of transfer or exchange, but we may require payment of any taxes or other governmental charges.

 

We will name in the applicable prospectus supplement the security registrar, and any transfer agent in addition to the security registrar, that we initially designate for any notes. We may at any time designate additional transfer agents or rescind the designation of any transfer agent or approve a change in the office through which any transfer agent acts, except that we will be required to maintain a transfer agent in each place of payment for the notes of each series.

 

If we elect to redeem the notes of any series, we will not be required to:

 

  reissue, register the transfer of, or exchange any notes of that series during a period beginning at the opening of business 15 days before the day of mailing of a notice of redemption of any notes that may be selected for redemption and ending at the close of business on the day of the mailing; or

 

  register the transfer of or exchange any notes so selected for redemption, in whole or in part, except the unredeemed portion of any notes we are redeeming in part.

 

Consolidation, Merger or Sale

 

The indentures do not contain any covenant that restricts our ability to merge or consolidate, or sell, convey, transfer or otherwise dispose of all or substantially all of our assets. However, any successor to or acquirer of such assets must assume all of our obligations under the indentures or the notes, as appropriate.

 

Events of Default Under the Indentures

 

The following are events of default under the indentures with respect to any series of notes that we may issue:

 

  if we fail to pay interest when due and our failure continues for 90 days and the time for payment has not been extended or deferred;

 

  if we fail to pay the principal, or premium, if any, when due and the time for payment has not been extended or delayed;

 

  if we fail to observe or perform any other covenant contained in the notes or the indentures, other than a covenant specifically relating to another series of notes, and our failure continues for 90 days after we receive notice from the trustee or holders of at least 25% in aggregate principal amount of the outstanding notes of the applicable series; and

 

  if we experience specified events of bankruptcy, insolvency or reorganization.

 

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If an event of default with respect to notes of any series occurs and is continuing, the trustee or the holders of at least 25% in aggregate principal amount of the outstanding notes of that series, by notice to us in writing, and to the trustee if notice is given by such holders, may declare the unpaid principal of, or premium, if any, on and accrued interest, if any, on the notes due and payable immediately.

 

The holders of a majority in principal amount of the outstanding notes of an affected series may waive any default or event of default with respect to the series and its consequences, except uncured defaults or events of default regarding payment of principal, or premium, if any, or interest, unless we have cured the default or event of default in accordance with the indenture. Any waiver shall cure the default or event of default.

 

Subject to the terms of the indentures, if an event of default under an indenture shall occur and be continuing, the trustee will be under no obligation to exercise any of its rights or powers under such indenture at the request or direction of any of the holders of the applicable series of notes, unless such holders have offered the trustee reasonable indemnity. In such event, the holders of a majority in principal amount of the outstanding notes of any series will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee, or exercising any trust or power conferred on the trustee, with respect to the notes of that series, provided that:

 

  the direction so given by the holder is not in conflict with any law or the applicable indenture; and

 

  subject to its duties under the Trust Indenture Act, the trustee need not take any action that might involve it in personal liability or might be unduly prejudicial to the holders not involved in the proceeding.

 

A holder of the notes of any series will only have the right to institute a proceeding under the indentures or to appoint a receiver or trustee, or to seek other remedies, if:

 

  the holder has given written notice to the trustee of a continuing event of default with respect to that series;

 

  the holders of at least 25% in aggregate principal amount of the outstanding notes of that series have made written request, and such holders have offered reasonable indemnity to the trustee to institute the proceeding as trustee; and

 

  the trustee does not institute the proceeding, and does not receive from the holders of a majority in aggregate principal amount of the outstanding notes of that series other conflicting directions within 60 days after the notice, request and offer.

 

These limitations do not apply to a suit instituted by a holder of notes if we default in the payment of the principal of, or the premium, if any, or interest on, the notes.

 

We will periodically file statements with the trustee regarding our compliance with specified covenants in the indentures.

 

Discharge

 

Each indenture provides that we can elect, under specified circumstances, to be discharged from our obligations with respect to one or more series of debt securities, except for obligations to:

 

  register the transfer or exchange of debt securities of the series;

 

  replace stolen, lost or mutilated debt securities of the series;

 

  maintain paying agencies;

 

  hold monies for payment in trust;

 

  compensate and indemnify the trustee; and

 

  appoint any successor trustee.

 

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In order to exercise our rights to be discharged, we must deposit with the trustee money or government obligations sufficient to pay all the principal of, any premium, if any, and interest on, the debt securities of the series on the dates payments are due.

 

Modification of Indenture; Waiver

 

We and the trustee may change an indenture without the consent of any holders with respect to specific matters, including:

 

  to fix any ambiguity, defect or inconsistency in the indenture; or

 

  to change anything that does not materially adversely affect the interests of any holder of notes or any series.

 

In addition, under the indentures, we and the trustee may change the rights of holders of a series of notes with the written consent of the holders of at least a majority in aggregate principal amount of the outstanding notes of each series that is affected. However, we and the trustee may only make the following changes with the consent of each holder of any outstanding notes affected:

 

  extending the fixed maturity of the series of notes;

 

  reducing the principal amount, the rate of interest or any premium payable upon the redemption of any notes; or

 

  reducing the minimum percentage of notes, the holders of which are required to consent to any amendment.

 

Information Concerning the Trustee

 

The trustee, other than during the occurrence and continuance of an event of default under an indenture, undertakes to perform only those duties as are specifically set forth in the applicable indenture. Upon an event of default under an indenture, the trustee must use the same degree of care and skill as a prudent person would exercise or use in the conduct of his or her own affairs. Subject to this provision, the trustee is under no obligation to exercise any of the powers given to it by the indentures at the request of any holder of notes unless it is offered reasonable security and indemnity against the costs, expenses and liabilities that it might incur.

 

Payment and Paying Agents

 

Unless we otherwise indicate in the applicable prospectus supplement, we will make payment of the interest on any notes on any interest payment date to the person in whose name the notes, or one or more predecessor securities, are registered at the close of business on the regular record date for the interest payment.

 

We will pay principal of and any premium and interest on the notes of a particular series at the office of the paying agents designated by us, except that unless we otherwise indicate in the applicable prospectus supplement, we will make interest payments by check which we will mail to the holder. Unless we otherwise indicate in a prospectus supplement, we will designate the corporate trust office of the trustee as our sole paying agent for payments with respect to notes of each series. We will name in the applicable prospectus supplement any other paying agents that we initially designate for the notes of a particular series. We will maintain a paying agent in each place of payment for the notes of a particular series.

 

All money we pay to a paying agent or the trustee for the payment of the principal of or any premium or interest on any notes which remains unclaimed at the end of two years after such principal, premium or interest has become due and payable will be repaid to us, and the holder of the security thereafter may look only to us for payment thereof.

 

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DESCRIPTION OF RIGHTS

 

General

 

We may issue rights to purchase any of our securities or any combination thereof. Rights may be issued independently or together with any other offered security and may or may not be transferable by the person purchasing or receiving the rights. In connection with any rights offering to our shareholders, we may enter into a standby underwriting arrangement with one or more underwriters pursuant to which such underwriters will purchase any offered securities remaining unsubscribed for after such rights offering. We may also appoint a rights agent that may act solely as our agent in connection with the rights that are sold. Any such agent will not assume any obligation or relationship of agency or trust with any of the holders of the rights. In connection with a rights offering to our shareholders, we will distribute certificates evidencing the rights and a prospectus supplement to our shareholders on the record date that we set for receiving rights in such rights offering.

 

The applicable prospectus supplement will describe the following terms of rights in respect of which this prospectus is being delivered:

 

  the title of such rights;

 

  the securities for which such rights are exercisable;

 

  the exercise price for such rights;

 

  the number of such rights issued with respect to each ordinary share;

 

  the extent to which such rights are transferable;

 

  if applicable, a discussion of the material Israeli and U.S. income tax considerations applicable to the issuance or exercise of such rights;

 

  the date on which the right to exercise such rights shall commence, and the date on which such rights shall expire (subject to any extension);

 

  the extent to which such rights include an over-subscription privilege with respect to unsubscribed securities;

 

  if applicable, the material terms of any standby underwriting or other purchase arrangement, or any agency agreement, that we may enter into in connection with the rights offering; and

 

  any other terms of such rights, including terms, procedures and limitations relating to the exchange and exercise of such rights.

 

Exercise of Rights

 

Each right will entitle the holder of the right to purchase for cash such securities or any combination thereof at such exercise price as shall in each case be set forth in, or be determinable as set forth in, the prospectus supplement relating to the rights offered thereby. Rights may be exercised at any time up to the close of business on the expiration date for such rights set forth in the prospectus supplement. After the close of business on the expiration date, all unexercised rights will become void.

 

Rights may be exercised as set forth in the prospectus supplement relating to the rights offered thereby. Upon receipt of payment and the rights certificate properly completed and duly executed at the corporate trust office of the rights agent or any other office indicated in the prospectus supplement, we will forward, as soon as practicable, the securities purchasable upon such exercise. We may determine to offer any unsubscribed offered securities directly to persons other than shareholders, to or through agents, underwriters or dealers or through a combination of such methods, including pursuant to standby underwriting arrangements, as set forth in the applicable prospectus supplement.

 

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DESCRIPTION OF WARRANTS

 

We may issue warrants for the purchase of ADSs. We may issue warrants independently of or together with ordinary shares (including ordinary shares represented by ADSs) offered by any prospectus supplement, and we may attach the warrants to, or issue them separately from, ordinary shares (including ordinary shares represented by ADSs). Any series of warrants may be issued under a separate warrant agreement, which may be entered into between us and a warrant agent specified in a prospectus supplement. Any such warrant agent will act solely as our agent in connection with the warrants of such series and will not assume any obligation or relationship of agency or trust with any of the holders of the warrants. We will set forth further terms of the warrants and any applicable warrant agreements in the applicable prospectus supplement relating to the issuance of any warrants, including, where applicable, the following:

 

  the title of the warrants;

 

  the aggregate number of the warrants;

 

  the number of ADSs or ordinary shares purchasable upon exercise of the warrants;

 

  the designation and terms of the securities, if any, with which the warrants are issued and the number of the warrants issued with each such offered security;

 

  the date, if any, on and after which the warrants and the related securities will be separately transferable;

 

  the price at which, and form of consideration for which, each security purchasable upon exercise of the warrants may be purchased;

 

  the date on which the right to exercise the warrants will commence and the date on which the right will expire;

 

  the minimum or maximum amount of the warrants which may be exercised at any one time;

 

  any circumstances that will cause the warrants to be deemed to be automatically exercised; and

 

  any other material terms of the warrants.

 

DESCRIPTION OF UNITS

 

As specified in the applicable prospectus supplement, we may issue units consisting of our ADSs, ordinary shares, debt securities, rights, warrants or any combination of such securities. The applicable prospectus supplement will describe:

 

  the terms of the units and of the ADSs, ordinary shares, debt securities, rights and/or warrants comprising the units, including whether and under what circumstances the securities comprising the units may be traded separately;

 

  a description of the terms of any unit agreement governing the units or any arrangement with an agent that may act on our behalf in connection with the unit offering; and

 

  a description of the provisions for the payment, settlement, transfer or exchange of the units.

 

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PLAN OF DISTRIBUTION

 

We may sell the offered securities on a negotiated or competitive bid basis to or through underwriters or dealers. We may also sell the securities directly to corporate partners in various programs of the Company, institutional investors or other purchasers or through agents. We will identify any underwriter, dealer, or agent involved in the offer and sale of the securities, and any applicable commissions, discounts and other terms constituting compensation to such underwriters, dealers or agents, in a prospectus supplement.

 

We may distribute our securities from time to time in one or more transactions:

 

  at a fixed price or prices, which may be changed;

 

  at market prices prevailing at the time of sale;

 

  at prices related to such prevailing market prices; or

 

  at negotiated prices.

 

Only underwriters named in the prospectus supplement are underwriters of our securities offered by the prospectus supplement.

 

If underwriters are used in the sale of our securities, such securities will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. Unless stated otherwise in a prospectus supplement, the obligation of any underwriters to purchase our securities will be subject to certain conditions and the underwriters will be obligated to purchase all of the applicable securities if any are purchased. If a dealer is used in a sale, we may sell our securities to the dealer as principal. The dealer may then resell the securities to the public at varying prices to be determined by the dealer at the time of resale. In effecting sales, dealers engaged by us may arrange for other dealers to participate in the resales.

 

We or our agents may solicit offers to purchase securities from time to time. Unless stated otherwise in a prospectus supplement, any agent will be acting on a best efforts basis for the period of its appointment. In addition, we may enter into derivative, sale or forward sale transactions with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions. If the applicable prospectus supplement indicates, in connection with such transaction, the third parties may, pursuant to this prospectus and the applicable prospectus supplement, sell securities covered by this prospectus and the applicable prospectus supplement. If so, the third party may use securities borrowed from us or others to settle such sales and may use securities received from us or others to close out any related short positions. We may also loan or pledge securities covered by this prospectus and the applicable prospectus supplement to third parties, who may sell the loaned securities or, in the event of default in the case of a pledge, sell the pledged securities pursuant to this prospectus and the applicable prospectus supplement. The third party in such transactions will be an underwriter and will be identified in the applicable prospectus supplement or a in a post-effective amendment.

 

In connection with the sale of our securities, underwriters or agents may receive compensation (in the form of discounts, concessions or commissions) from us or from purchasers of securities for whom they may act as agents. Underwriters may sell securities to or through dealers, and such dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or commissions from the purchasers for whom they may act as agents. Underwriters, dealers and agents that participate in the distribution of our securities may be deemed to be “underwriters” as that term is defined in the Securities Act, and any discounts or commissions received by them from us and any profits on the resale of the shares by them may be deemed to be underwriting discounts and commissions under the Securities Act. Compensation as to a particular underwriter, dealer or agent might be in excess of customary commissions and will be in amounts to be negotiated in connection with transactions involving our securities. We will identify any such underwriter or agent, and we will describe any such compensation paid, in the related prospectus supplement. Maximum compensation to any underwriters, dealers or agents will not exceed any applicable FINRA limitations.

 

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Underwriters, dealers and agents may be entitled, under agreements with us, to indemnification against and contribution toward certain civil liabilities, including liabilities under the Securities Act.

 

If stated in a prospectus supplement, we will authorize agents and underwriters to solicit offers by certain specified institutions or other persons to purchase our securities at the public offering price set forth in the prospectus supplement pursuant to delayed delivery contracts providing for payment and delivery on a specific date in the future. Institutions with whom such contracts may be made include commercial savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions, and other institutions, but shall in all cases be subject to our approval. Such contracts will be subject only to those conditions set forth in the prospectus supplement, and the prospectus supplement will set forth the commission payable for solicitation of such contracts. The obligations of any purchase under any such contract will be subject to the condition that the purchase of the securities shall not be prohibited at the time of delivery under the laws of Israel and of the jurisdiction to which the purchaser is subject. The underwriters and other agents will not have any responsibility in respect of the validity or performance of such contracts.

 

If underwriters or dealers are used in the sale, until the distribution of our securities is completed, SEC rules may limit the ability of any such underwriters and selling group members to bid for and purchase the securities. As an exception to these rules, representatives of any underwriters are permitted to engage in certain transactions that stabilize the price of the securities. Such transactions may consist of bids or purchases for the purpose of pegging, fixing or maintaining the price of the securities. If the underwriters create a short position in the securities in connection with the offering (in other words, if they sell more shares than are set forth on the cover page of the prospectus supplement), the representatives of the underwriters may reduce that short position by purchasing securities in the open market. The representatives of the underwriters also may elect to reduce any short position by exercising all or part of any over-allotment option we may grant to the underwriters, as described in the prospectus supplement. In addition, the representatives of the underwriters may impose a penalty bid on certain underwriters and selling group members. This means that if the representatives purchase securities in the open market to reduce the underwriters’ short position or to stabilize the price of our securities, they may reclaim the amount of the selling concession from the underwriters and selling group members who sold those securities as part of the offering. In general, purchases of a security for the purpose of stabilizing or to reduce a short position could cause the price of the security to be higher than it might be in the absence of such purchases. The imposition of a penalty bid might also have the effect of causing the price of the securities to be higher than it would otherwise be. If commenced, the representatives of the underwriters may discontinue any of the transactions at any time. These transactions may be effected on any exchange on which our securities are traded, in the over-the-counter market, or otherwise.

 

Certain of the underwriters or agents and their associates may engage in transactions with and perform services for us or our affiliates in the ordinary course of their respective businesses.

 

LEGAL MATTERS

 

Certain legal matters concerning this offering under U.S. federal securities law will be passed upon for us by Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., New York, New York. Certain legal matters governed by Israeli law will be passed upon for us by Horn & Co. – Law Offices, Tel Aviv, Israel.

 

EXPERTS

 

The consolidated financial statements of Therapix Biosciences Ltd. appearing in Therapix Biosciences Ltd. Report on Form 20-F as filed with the SEC on April 30, 2018, have been audited by Kost Forer Gabbay & Kasierer (a Member of Ernst & Young Global), independent registered public accounting firm, as set forth in their report thereon, included therein, and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

 

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EXPENSES

 

The following are the estimated expenses related to the filing of the registration statement of which this prospectus forms a part, all of which will be paid by us. In addition, we anticipate incurring additional expenses in the future in connection with the offering of our securities pursuant to this prospectus. Any such additional expenses will be disclosed in a prospectus supplement.

 

 

SEC registration fee  $6,225 
FINRA review   * 
Legal fees and expenses*   20,000 
Accounting fees and expenses*   20,000 
Miscellaneous*   3,775 
Total*  $50,000 

 

 

* Estimated

 

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

 

The SEC allows us to “incorporate by reference” the information we file with it, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus and information we file later with the SEC will automatically update and supersede this information. The documents we are incorporating by reference as of their respective dates of filing are:

 

  Annual Report on Form 20-F for the year ended December 31, 2017, filed on April 30, 2018 (File No. 001-38041);

 

  Our Reports on Form 6-K filed on January 16, 2018, March 20, 2018, April 9, 2018, April 20, 2018, April 27, 2018, May 4, 2018, May 9, 2018, May 17, 2018, June 6, 2018 and June 14, 2018; and

  

  the description of our ordinary shares contained in our Form 8-A filed on March 21, 2017 (File No. 001-38041).

 

All subsequent annual reports on Form 20-F, Form 40-F or Form 10-K filed by us, all subsequent filings on Forms 10-Q and 8-K filed by us, and all subsequent reports on Form 6-K filed by us that are identified by us as being incorporated by reference shall be deemed to be incorporated by reference into this prospectus and deemed to be a part hereof after the date of this prospectus but before the termination of the offering by this prospectus.

 

Any statement contained in a document incorporated by reference herein shall be deemed to be modified or superseded for all purposes to the extent that a statement contained in this prospectus, or in any other subsequently filed document which is also incorporated or deemed to be incorporated by reference, modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.

 

You may request, orally or in writing, a copy of these documents, which will be provided to you at no cost, by contacting:

 

Therapix Biosciences Ltd.

4 Ariel Sharon Street

HaShahar Tower, 16th Floor

Givatayim 5320047, Israel

Tel: +972-3-6167055

 

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WHERE YOU CAN FIND ADDITIONAL INFORMATION

 

This prospectus is part of a registration statement on Form F-3 that we filed with the SEC relating to the securities offered by this prospectus, which includes additional information. You should refer to the registration statement and its exhibits for additional information. Whenever we make reference in this prospectus to any of our contracts, agreements or other documents, the references are not necessarily complete and you should refer to the exhibits attached to the registration statement for copies of the actual contract, agreements or other document.

 

We are subject to the informational requirements of the Exchange Act applicable to foreign private issuers. We, as a “foreign private issuer,” are exempt from the rules under the Exchange Act prescribing certain disclosure and procedural requirements for proxy solicitations, and our officers, directors and principal shareholders are exempt from the reporting and “short-swing” profit recovery provisions contained in Section 16 of the Exchange Act, with respect to their purchases and sales of shares. In addition, we are not required to file annual, quarterly and current reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act.

 

You may read and copy any materials we file or furnish with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, N.E., Washington, DC 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference Room. You can review our SEC filings and the registration statement by accessing the SEC’s internet site at http://www.sec.gov.

 

In addition, because our ordinary shares are traded on the TASE, we have filed Hebrew language periodic and immediate reports with, and furnish information to, the TASE and the ISA, as required under Chapter Six of the Israel Securities Law. Copies of our filings with the ISA can be retrieved electronically through the MAGNA distribution site of the ISA (www.magna.isa.gov.il) and the TASE website (www.maya.tase.co.il).

 

We maintain a corporate website at http://therapixbio.com. Information contained on, or that can be accessed through, our website does not constitute a part of this prospectus. We have included our website address in this prospectus solely as an inactive textual reference.

 

ENFORCEABILITY OF CIVIL LIABILITIES

 

We are incorporated under the laws of the State of Israel. Service of process upon us and upon our directors and officers and the Israeli experts named in this prospectus, substantially all of whom reside outside the United States, may be difficult to obtain within the United States. Furthermore, because substantially all of our assets and substantially all of our directors and officers are located outside the United States, any judgment obtained in the United States against us or any of our directors and officers may not be collectible within the United States.

 

We have been informed by our legal counsel in Israel, Horn & Co. Law Offices, that it may be difficult to assert U.S. securities law claims in original actions instituted in Israel. Israeli courts may refuse to hear a claim based on a violation of U.S. securities laws because Israel is not the most appropriate forum to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law is applicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law must be proved as a fact, which can be a time-consuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel addressing these matters.

 

Subject to specified time limitations and legal procedures, Israeli courts may enforce a United States judgment in a civil matter which, subject to certain exceptions, is non-appealable, including judgments based upon the civil liability provisions of the Securities Act and the Exchange Act and, including a monetary or compensatory judgment in a non-civil matter, provided that among other things:

 

  the judgment is obtained after due process before a court of competent jurisdiction, according to the laws of the state in which the judgment is given and the rules of private international law currently prevailing in Israel;

 

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  the judgment is final and is not subject to any right of appeal;

 

  the prevailing law of the foreign state in which the judgment was rendered allows for the enforcement of judgments of Israeli courts

 

  adequate service of process has been effected and the defendant has had a reasonable opportunity to be heard and to present his or her evidence;

 

  the liabilities under the judgment are enforceable according to the laws of the State of Israel and the judgment and the enforcement of the civil liabilities set forth in the judgment is not contrary to the law or public policy in Israel nor likely to impair the security or sovereignty of Israel;

 

  the judgment was not obtained by fraud and does not conflict with any other valid judgments in the same matter between the same parties;

 

  an action between the same parties in the same matter is not pending in any Israeli court at the time the lawsuit is instituted in the foreign court; and;

 

  the judgment is enforceable according to the law of the foreign state in which the relief was granted.

 

An Israeli court will not declare a foreign civil judgment enforceable if:

 

  the judgment was given in a state whose laws do not provide for the enforcement of judgments of Israeli courts (subject to exceptional cases);

 

  the enforcement of the judgment is likely to prejudice the sovereignty or security of the State of Israel;

 

  the judgment was obtained by fraud;

 

  the possibility given to the defendant to bring its arguments and evidence before the court was not reasonable in the opinion of the Israeli court;

 

  the judgment was rendered by a court not competent to render it according to the laws of private international law as they apply in Israel;

 

  the judgment is contradictory to another judgment that was given in the same matter between the same parties and that is still valid; or

 

  at the time the action was brought in the foreign court, a lawsuit in the same matter and between the same parties was pending before a court or tribunal in Israel.

 

If a foreign judgment is enforced by an Israeli court, it generally will be payable in Israeli currency, which can then be converted into non-Israeli currency and transferred out of Israel. The usual practice in an action before an Israeli court to recover an amount in a non-Israeli currency is for the Israeli court to issue a judgment for the equivalent amount in Israeli currency at the rate of exchange in force on the date of the judgment, but the judgment debtor may make payment in foreign currency. Pending collection, the amount of the judgment of an Israeli court stated in Israeli currency ordinarily will be linked to the Israeli consumer price index plus interest at the annual statutory rate set by Israeli regulations prevailing at the time. Judgment creditors must bear the risk of unfavorable exchange rates.

 

INDEMNIFICATION FOR SECURITIES ACT LIABILITIES

 

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

 

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642,853 American Depositary Shares

Each Representing Forty Ordinary Shares

 

 

 

 

 

 

 

PROSPECTUS SUPPLEMENT