Quarterly report pursuant to Section 13 or 15(d)

EQUITY

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EQUITY
9 Months Ended
Aug. 31, 2018
EQUITY [Text Block]

NOTE 7 – EQUITY

Financings

a)       In January 2017, the Company entered into definitive agreements with an institutional investor for the private placement of 2,564,115 units of the Company’s securities for aggregate subscription proceeds to the Company of $16 million at $6.24 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 $6.24. The subscription proceeds were payable on a periodic basis through September 2018. The Company subsequently agreed to delay the payments until October 15, 2018. Each periodic payment of subscription proceeds will be evidenced by the Company’s standard securities subscription agreement.

In July 2018, the Company entered into definitive agreements with assignees of the aforementioned institutional investor whereby these assignees remitted $4.6 million in respect of the units available under the original subscription agreement that have not been subscribed for, entitling such investors to 702,307 units, with each unit being comprised of (i) one share of the Company's common stock and (ii) one three-year warrant to purchase up to an additional one share of the Company’s common stock at a per share exercise price of $6.24.

During the nine months ended August 31, 2018 the investor and the assignees remitted to the Company $8,065 thousand, and the Company issued 1,263,204 shares of the Company’s Common Stock and three-year warrants to purchase up to an additional 1,263,204 shares of the Company’s Common Stock at a per share exercise price of $6.24.

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:

    Proceeds  
    Allocation  
    (in thousands)  
Warrants component $ 2,923  
Shares component   5,142  
Total $ 8,065  

The fair value of these warrants determined using a Black-Scholes Model based on the following assumptions:

  Nine Months Ended
  August 31, 2018
   
Value of one common share $6.5 -$14.68
Dividend yield 0%
Expected stock price volatility 90.6%- 93.8%
Risk free interest rate 1.99%- 2.73%
Expected term (years) 3

The transaction costs were approximately $328 thousand, out of which $121 thousand are stock-based compensation due to issuance of warrants and shares. See also 8(c).

As of August 31, 2018, the Company has received a total of $12.6 million out of the committed $16 million subscription proceeds.

b)       During the nine months ended August 31, 2018, the Company entered into definitive agreements with accredited and other qualified investors relating to a private placement of 1,237,642 units. Each unit is comprised of (i) one share of the Company’s common stock and (ii) three-year warrant to purchase up to an additional one share of the Company’s Common Stock at a per share exercise price of $6.24, for aggregate proceeds to the Company of approximately $7.7 million.

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:

    Proceeds  
    Allocation  
    (in thousands)  
Warrants component $ 2,813  
Shares component   4,910  
Total $ 7,723  

The transaction costs were approximately $349 thousand, out of which $125 thousand are stock-based compensation due to issuance of warrants. See also 8(c).