Quarterly report pursuant to Section 13 or 15(d)

EQUITY

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EQUITY
6 Months Ended
May 31, 2017
EQUITY [Text Block]

NOTE 6 – EQUITY

Financings

1) During the six months ended May 31, 2017, the Company entered into definitive agreements with accredited and other qualified investors relating to a private placement (the “Private Placement”) of (i) 1,286,944 shares of the Company’s Common Stock and (ii) three year warrants to purchase up to an additional 1,056,021 and 230,923 shares of the Company’s Common Stock at a per share exercise price of $0.52 and $0.65 respectively. The purchased securities were issued pursuant to subscription agreements between the Company and the purchasers for aggregate proceeds to the Company of $699 thousand.

            The Company allocated the proceeds from the Private Placement based on the fair value of the warrants and the shares. The table below presents the fair value of the instruments issued as of the closing dates and the allocation of the proceeds:

    Total Fair  
    Value  
    (in thousands)  
Warrants component $ 251  
Shares component   448  
Total $ 699  

As of May 31, 2017, 230,923 shares have not been issued and therefore the Company has recorded $87 thousand in Receipts on Account of Shares to be Allotted, in the statement of equity.

2) In January 2017, the Company entered into definitive agreements with an institutional investor for the private placement of 30,769,231 units of the Company’s securities for aggregate subscription proceeds to the Company of $16 million at $0.52 price per unit. Each unit is comprised of one share of the Company’s Common Stock and a warrant, exercisable over a three-years period from the date of issuance, to purchase one additional share of Common Stock at a per share exercise price of $0.52. The subscription proceeds are payable on a periodic basis through August 2018. Each periodic payment of subscription proceeds will be evidenced by the Company’s standard securities subscription agreement.

            During the six months ended May 31, 2017 the investor remitted to the Company $2 million, in consideration of which, the investor is entitled to receive 3,846,153 shares of the Company’s Common Stock and three year warrants to purchase up to an additional 3,846,153 shares of the Company’s Common Stock at a per share exercise price of $0.52 The Company allocated the proceeds based on the fair value of the warrants and the shares. The table below presents the allocation of the proceeds as of the closing date:

    Total Fair  
    Value  
    (in thousands)  
Warrants component $ 723  
Shares component   1,277  
Total $ 2,000  

            As of May 31, 2017, 961,538 shares have not been issued therefore the Company recorded $281 thousand net of transaction costs in Receipts on Account of Shares to be Allotted.

            In connection therewith, the Company undertook to pay a fee of 5%, resulting in the payment of $100 thousand and the issuance of 192,308 restricted shares of Common Stock. The fair value of the shares as of the date of grant was $145 thousand using the share price on the date of grant.