| 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: |
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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. |
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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. |
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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. |
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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. |
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 |
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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. |
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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. |
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3. |
On
March 17, 2022, the Company issued 16,000,000 ordinary shares – see 3B above. |
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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. |
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5. |
On
April 7, 2022 the Company issued 24,000,000 ordinary shares to increase its interest in Bio Imagery. see note 1B6 above. |
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6. |
On
April 7, 2022 the Company issued 512,821 ordinary shares to a service provider in consideration for his annual investor relations
services. |
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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). |
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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. |
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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)
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