Quarterly report pursuant to Section 13 or 15(d)

SIGNIFICANT TRANSACTIONS

v3.22.2.2
SIGNIFICANT TRANSACTIONS
9 Months Ended
Sep. 30, 2022
Significant Transactions  
SIGNIFICANT TRANSACTIONS

NOTE 3 - SIGNIFICANT TRANSACTIONS

 

A. On September 28, 2022, the Company held its Annual General Meeting of Shareholders, at which the shareholders of the Company approved the increase of the authorized share capital of the Company to a total of up to 10,000,000,000 and in addition, approved Company’s Board of Directors and compensation committee meetings, dated July 17, 2022 as follows:

 

  1. Cash compensation to the CEO, CFO and other key individuals up to a total of 5% out of the gross margin for the year ended December 31, 2021.
     
  2. Compensation package for the Company’s Chief Executive Officer that include (i) based annual salary of $400; (ii) an immediate granting of 50% of salary in restricted shares for uncompensated efforts to date; (iii) cash bonus of 50% of base salary upon uplisting (iv) 100 million restricted shares bonus upon uplisting (iv) grant of 8,750,000 stock options to purchase the same number of shares, vesting quarterly over the course of five years and (vi) Restricted Stock Units bonus with value ranging from $250 up to $1,400 as determined in Board resolution, and cash bonus of $250 up to $1,000 which are based on cumulative volume of sales range from $25,000 up to $100,000 or milestone bonuses in form of Restricted Stock Units in value of $10,000 up to $40,000 which are based on market cap range of $1,000,000 up to $2,000,000 , as determined in Board resolution.
     
  3. Compensation package for the Company’s Chief Financial Officer that include (i) based annual salary of $250; (ii) an immediate granting of 50% of salary in restricted shares for uncompensated efforts to date; (iii) cash bonus of 50% of base salary upon uplisting (iv) 50 million restricted shares bonus upon uplisting (iv) grant of 5,000,000 stock options to purchase the same number of shares, vesting quarterly over the course of five years and (vi) Restricted Stock Units bonus with value ranging from $50,000 up to $100,000, and cash bonus range of $75 up to $150 which are based on cumulative volume of sales range from $25,000 up to $100,000.
     
  4. Compensation package for the Company’s members of the Board of Directors and its committees that include (i) each board member will receive $65 annual salary and $150 in RSU vesting quarterly over three years; (ii) the expert director will receive $86 annual salary and $150 in RSU vesting quarterly over three years; (iii) Upon uplisting, each Director shall be granted RSU’s equal to the dollar amount of that Director’s total annual compensation, provided that the terms applicable to Board members’ annual RSU grant shall apply; (iv) additional annual cash compensation ranging from $6 up to $44 and equal amounts in RSU, for each director based on his additional committee he or she is serving.

 

B. Exchange of warrants

 

On March 10, 2022 the Company and Leonite Capital LLC (the “Investor”) entered into an Agreement pursuant to which, the Company agreed to issue the Investor 16,000,000 ordinary shares of the Company as full conversion of all Investor’s outstanding warrants. On March 17, 2022, the Company issued 16,000,000 ordinary shares of the Company pursuant to the agreement. The Company accounted for the warrants within the equity.

 

C. Revolving Line of Credit Agreement

 

On March 14, 2022, the Company and Testing 123, LLC (the “Lender”) signed a Revolving Line of Credit Agreement, pursuant to which the Lender will provide the Company with a credit facility of up to $1,250 bearing a monthly interest of 5% calculated for a minimum period of 60 days. The Company may draw funds under the agreement from the date of the agreement and until March 14, 2023. The Maturity date of each draw will be the earlier of (i) 60 days from the date of the loan, (ii) the occurrence of an event of default as defined in the agreement and (iii) with respect to funds received by Borrower through collections on receivables included in a Receivables Pool, as defined in the agreement, 3 days after such funds have been received by the escrow account agent or the Company.

 

In additional to the above the Company agreed to issue the Lender shares, a 10% ownership stake in Provista. In the event that additional shares of Provista are issued, the Company committed to issue the Lender additional shares such that his stake in Provista shall be maintained at 10%.

 

On April 7, 2022 the Company issued 1,500,000 ordinary shares (with fair value of $25) as additional interest.

 

As of September 30, 2022, the Company utilized the full credit facility.

 

The Company has estimated the fair value of the 10% portion of shares of Provista on March 14, 2022 at $710. The carrying value sold to non-controlling interests as of March 14, 2022 was $635, accordingly $75 was recognized in additional paid in capital. The fair value of the 10% ownership in Provista which is the cost associated with obtaining the revolving line of credit, was amortized to interest expenses as the entire credit facility was utilized.

 

 

TODOS MEDICAL LTD.

 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Cont.)

(U.S. dollars in thousands)

 

D. Issuance of Ordinary Shares

 

  1. On January 13, 2022, the Company issued 1,500,000 ordinary shares to a service provider of which 1,250,000 ordinary shares were issued in exchange of previous commitment to issue a fixed number of shares.
     
  2. On February 4, 2022 and March 10, 2022 the Company issued total of 49,620,690 ordinary shares as partial conversion of $1,804 of principal and accrued interest, out of a convertible note in the principal amount of $3,500, issued in the acquisition of Provista Diagnostic, Inc.
     
  3. On March 17, 2022, the Company issued 16,000,000 ordinary shares – see 3B above.
     
  4. On April 8, 2022 the Company issued 11,160,714 ordinary shares as part of its April 7, 2022 settlement agreement – see 3E below.
     
  5. On April 7, 2022 the Company issued 24,000,000 ordinary shares to increase its interest in Bio Imagery. see note 1B6 above.
     
  6. On April 7, 2022 the Company issued 512,821 ordinary shares to a service provider in consideration for his annual investor relations services.
     
  7. On April 7, 2022 the Company issued 1,500,000 ordinary shares (with fair value of $25) as additional interest under its Revolving Line of Credit Agreement (see note 3C above).
     
  8. On August 8, 2022 the Company issued 10,000,000 ordinary shares to a service provider in consideration for his 6 months market relations services.
     
  9. During the period of nine months ended September 30, 2022, Principal Amount and unpaid Interest in total amount of $2,330 (with fair value of $7,735) have been converted into 264,430,525 ordinary shares.

 

E. Settlement Agreement with Toledo Advisors LLC

 

On April 7, 2022, the Company and Toledo Advisors LLC (“Toledo”) signed a Settlement Agreement pursuant to which upon execution of the agreement the Company shall pay Toledo $130 and shall issue to Toledo $200 worth of ordinary shares. Upon delivery of the cash payment and shares the parties shall file and discontinue the compliant file by Toledo on January 7, 2022 and Toledo irrevocably and unconditionally, release and discharge the Company from its June 19, 2020 Financing Agreement and the July 28, 2020 Royalty Agreement. The company recorded an income of $153 in the second quarter of 2022, as a result of the cancelation of prior agreements.

 

F. Former employee motion

 

On September 4, 2022, a former employee of the Company filed a motion with the Tel Aviv District Court against the Company for unpaid severance pay, unpaid salary, various social benefits and relates claims totaling NIS 1,256 (approximately $360). In addition the former employee asserts that he is entitled to receive Company’s options. On October 26, 2022, the Company filed a response in which it denied substantially all of the allegations. Subsequently the Company and the Applicant have, through counsel, engaged in discussions with a view towards engaging in a formal mediation process. No mediator has been selected, and no date for a mediation has been scheduled. The Tel Aviv District Court set a hearing in connection with the motion for January 2023.

 

Although management cannot estimate the outcomes of such motion at this early stage it believes that the current accruals in the financial statement in respect of the former employee are adequate.

 

 

TODOS MEDICAL LTD.

 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Cont.)

(U.S. dollars in thousands)