Beamr Imaging Ltd F-1/A, filed Sep 29, 2022

Beamr Imaging Ltd. (BMR)

F-1/A 2022-09-29

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State of Israel		7372		Not Applicable
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification Number)

	Per Share	Total
Initial public offering price	$	$
Underwriting discounts and commissions ⁽¹⁾	$	$
Proceeds to us, before expenses	$	$

Glossary of Industry Terms and Concepts		iv
Prospectus Summary		1
The Offering		7
Summary Consolidated Financial Data		9
Risk Factors		11
Special Note Regarding Forward-Looking Statements		50
Use Of Proceeds		52
Dividend Policy		53
Capitalization		54
Dilution		55
Management’s Discussion And Analysis Of Financial Condition And Results Of Operations		57
Business		73
Management		86
Principal Shareholders		109
Certain Relationships And Related Party Transactions		111
Description Of Share Capital		112
Shares Eligible For Future Sale		116
Taxation		118
U.S. Federal Income Tax Considerations		120
Underwriting		124
Expenses Of This Offering		132
Legal Matters		132
Experts		132
Change in Registrant’s Certifying Accountant		132
Enforcement Of Civil Liabilities		133
Where You Can Find More Information		134
Index To Consolidated Financial Statements		F-2

Ordinary shares offered by us		3,000,000 ordinary shares

Ordinary shares to be issued and outstanding after this offering		13,704,325 ordinary shares, or 14,154,325 ordinary shares if the underwriter exercises in full the over-allotment option to purchase additional ordinary shares.

Over-allotment option		We have granted the underwriter an option for a period of up to 45 days to purchase, at the public offering price, up to 450,000 additional ordinary shares, less underwriting discounts and commissions, to cover over-allotments, if any.

Use of proceeds		We expect to receive approximately $13.1 million in net proceeds from the sale of ordinary shares offered by us in this offering (approximately $15.2 million if the underwriter exercises its over-allotment option in full), based upon an assumed public offering price of $5.00 per ordinary share and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. We intend to use the net proceeds from this offering, for our research and development efforts, sales and marketing activities, as well as general and administrative corporate purposes, including working capital and capital expenditures. See “Use of Proceeds” for more information about the intended use of proceeds from this offering. The amounts and schedule of our actual expenditures will depend on multiple factors. As a result, our management will have broad discretion in the application of the net proceeds of this offering.

Risk factors		Investing in our securities involves a high degree of risk. You should read the “Risk Factors” section starting on page 11 of this prospectus for a discussion of factors to consider carefully before deciding to invest in the ordinary shares.

Proposed symbol:		We have applied to list the ordinary shares on the Nasdaq Capital Market under the symbol “BMR”.

	●	547,166 ordinary shares issuable upon the exercise of warrants outstanding as of such date, at a weighted average exercise price of $5.00, all of which vested as of such date;
	●	1,332,224 ordinary shares issuable upon the exercise of options to directors, employees and consultants under our incentive option plans outstanding as of such date, at a weighted average exercise price of $1.76, of which 1,031,876 were vested as of such date;
	●	15,200 ordinary shares issuable upon the exercise of options to be issued to non-executive directors and director nominees under our incentive option plan upon listing of our ordinary shares in this offering at an exercise price equal to the initial public offering price of our ordinary shares;
	●	594,296 ordinary shares reserved for future issuance under our incentive option plans; and
	●	150,000 ordinary shares issuable upon exercise of the warrants to purchase our ordinary shares at $6.25 per share to be issued to the representative of the underwriter upon the closing of this offering.

	●	no exercise of the representative’s warrants to be issued upon consummation of this offering;
	●	a reverse share split to be effected upon listing of our ordinary shares in this offering at a ratio of 1-for-5;

	●	automatic conversion of advance investment agreements at a conversion price equal to 80% of $5.00 per share; and
	●	that the assumed offering price is $5.00;

	Year Ended December 31,						Six Months Ended June 30,
(U.S. dollars in thousands, except share and per share data)	2021			2020			2022			2021

Revenues	$	3,300		$	3,176		$	928		$	1,008
Cost of revenues	$	(90	)	$	(94	)	$	(49	)	$	(39	)
Gross profit	$	3,210		$	3,082		$	879		$	969

Research and development expenses	$	(2,032	)	$	(2,727	)	$	(999	)	$	(933	)
Sales and marketing expenses	$	(959	)	$	(1,371	)	$	(468	)	$	(527	)
General and administrative expenses	$	(773	)	$	(671	)	$	(373	)	$	(281	)
Other income	$	129		$	20		$	-		$	75
Operating loss	$	(425	)	$	(1,667	)	$	(961	)	$	(697	)

Financing income (expenses), net	$	(475	)	$	(697	)	$	131		$	(227	)
Taxes on income	$	(52	)	$	(95	)	$	(6	)	$	(21	)

Net loss and comprehensive loss	$	(952	)	$	(2,459	)	$	(836	)	$	(945	)

Basic and diluted loss per share	$	(0.07	)	$	(0.19	)	$	(0.06	)	$	(0.07	)

Weighted average number of shares outstanding used in computing basic and diluted loss per share		12,893,800			12,874,066			12,893,800			12,893,800

Pro forma basic and diluted net loss per share attributable to ordinary shareholders (1)	$	(0.35	)	$	(0.95	)	$	(0.30	)	$	(0.35	)

Weighted average number of ordinary shares outstanding used in computing pro forma basic and diluted net loss per share (1)		2,578,760			2,574,813			2,578,760			2,578,760

	As of June 30, 2022
(U.S. dollars in thousands, except share and per share data)	Actual			Pro Forma (2)			Pro Forma As Adjusted (3)
Balance Sheet Data:
Cash and cash equivalents	$	379		$	379		$	13,772
Total current assets	$	567		$	567		$	13,960
Total non-current assets	$	4,725		$	4,725		$	4,472
Total current liabilities	$	680		$	680		$	680
Total non-current liabilities	$	4,826		$	245		$	245
Accumulated deficit	$	(30,557	)	$	(30,557	)	$	(30,557	)
Total shareholders’ equity (deficit)	$	(214	)	$	4,367		$	17,507

(1)	Pro Forma basic and diluted net loss per share gives effect to the weighted average number of ordinary shares outstanding attributable to ordinary shareholders after giving effect to a reverse share split to be effected upon listing of our ordinary shares in this offering at a ratio of 1-for-5.

(2)	Pro Forma data gives effect to the following events as if each event had occurred on June 30, 2022: the conversion of all of our outstanding 36,056,400 convertible ordinary shares and convertible preferred shares as of June 30, 2022 into an aggregate of 7,211,280 ordinary shares after giving effect to a reverse share split to be effected upon listing of our ordinary shares in this offering at a ratio of 1-for-5, and the automatic conversion of advance investment agreements into 914,285 ordinary shares at a conversion price equal to 80% of $5.00, as if such exercise and conversions had occurred on June 30, 2022.

	●	significant volatility in its GDP;
	●	the impact of international sanctions;
	●	high levels of inflation;
	●	increases in, or high, interest rates;
	●	price volatility in oil and other natural resources;
	●	instability in the local currency market;
	●	budget deficits;
	●	the continued operation of loss-making enterprises due to the lack of effective bankruptcy proceedings;
	●	capital flight; and
	●	significant increases in poverty rates, unemployment and underemployment.

	●	approximately $4.7 million for our research and development efforts;
	●	approximately $2.7 million for sales and marketing activities;
	●	approximately $2.7 million for cloud operating costs;
	●	approximately $3 million for general and administrative corporate purposes, including working capital and capital expenditures.

	●	on a pro forma basis to give effect to (i) 7,211,280 ordinary shares issuable upon the voluntary conversion of 36,056,400 convertible ordinary shares and convertible preferred shares, and (ii) 914,285 ordinary shares issuable upon the automatic conversion of advance investment agreements at a conversion price equal to 80% of the assumed initial offering price of $5.00, as if such conversions had occurred on June 30, 2022.
	●	on a pro forma as adjusted basis to give further effect to (i) the pro forma adjustments described above, and (ii) the additional issuance of 3,000,000 ordinary shares in this offering, at an assumed public offering price of $5.00 per share and after deducting underwriting discounts and commissions and estimated offering expenses, as if the sale of the securities had occurred on June 30, 2022.

	As of June 30, 2022
(U.S. dollars in thousands)	Actual			Pro Forma			Pro Forma As Adjusted ⁽¹⁾
	(Unaudited)
Cash and cash equivalents	$	379		$	379		$	13,772
Deferred offering costs		253			253			-
Convertible advanced investments	$	4,581		$	-		$	-
Derivative warrant liability	$	50		$	50		$	50

Shareholders’ equity (deficit)
Ordinary Shares	$	51		$	151		$	194
Ordinary 1 and 2 Shares	$	5		$	-		$	-
Preferred Shares	$	78		$	-		$	-
Additional paid-in capital	$	30,209		$	34,773		$	47,870
Accumulated deficit	$	(30,557	)	$	(30,557	)	$	(30,557	)
Total shareholders’ equity (deficit)	$	(214	)	$	4,367		$	17,507
Total capitalization	$	(214	)	$	4,367		$	17,507

Assumed public offering price per ordinary share	$	5.00
Pro forma net tangible book value per ordinary share as of June 30, 2022		(0.02	)
Conversion of convertible advanced investments		0.41
Increase in net tangible book value per ordinary share attributable to new investors		0.89
Pro forma as adjusted net tangible book value per ordinary share after this offering		1.28
Dilution per ordinary share to new investors		3.72
Percentage of dilution in net tangible book value per ordinary share for new investors		74	%

	Shares					Total Consideration					Average Price Per Ordinary
	Number		Percent			Amount		Percent			Share
Existing shareholders		10,704,325		78.1	%	$	34,945		70	%	$	3.26
New investors		3,000,000		21.9	%	$	15,000		30	%	$	5.00
Total		13,704,325		100.0	%	$	49,945		100	%	$	4.23

	Six Months Ended June 30,
(U.S. dollars in thousands)	2022		2021

Other income	$	-	$	75

(U.S. dollars in thousands)	Year Ended December 31,						Six Months Ended June 30,
	2021			2020			2022			2021

Net cash provided by (used in) operating activities	$	569		$	(1,020	)	$	(101	)		925
Net cash provided by (used in) investing activities	$	(4	)	$	1		$	-			-
Net cash used in financing activities	$	(141	)	$	(418	)	$	(548	)		(297	)
Change in cash, cash equivalents	$	424		$	(1,437	)	$	(649	)		628
Cash, cash equivalents at beginning of period	$	604		$	2,041		$	1,028			604
Cash, cash equivalents at end of period	$	1,028		$	604		$	379			1,232

	●	*Security*. By using public cloud platforms best security practices, we address our customers security concerns.
	●	*Reducing carbon footprint.* Smaller video files means less disk space occupied and smaller files transferred over the network from one place to another. This in turn results in lower energy consumption, which we believe is going to be an accelerator for our service adoption.

	●	the performance and reliability of our solutions;
	●	cost of deployment and return on investment in terms of cost savings;
	●	sophistication, novel and innovative intellectual property and technology, and functionality of our offerings;
	●	cross-platform operability;
	●	security;
	●	ease of implementation and use of service;
	●	high quality customer support; and
	●	price.

Name	Age	Position
Sharon Carmel	51	Chief Executive Officer and Chairman
Danny Sandler	37	Chief Financial Officer
Tamar Shoham	48	Chief Technology Officer
Dan Julius	45	V.P. of Research and Development
Eliezer Lubitch	61	President, Beamr, Inc.
Tal Barnoach (1)	58	Director
Lluis Pedragosa (1)	43	Director
Yair Shoham (1)(2)	68	Director Nominee
Osnat Michaeli (1)(2)	53	Director Nominee

(1)		Independent director (as defined under Nasdaq Stock Market Listing Rules).
(2)		External director (as defined under the Companies Law)

	●	Compensation of officers. Israeli law and our amended and restated articles of association do not require that the independent members of our board of directors (or a compensation committee composed solely of independent members of our board of directors) determine an executive officer’s compensation, as is generally required under the Nasdaq Stock Market rules with respect to the chief executive officer and all other executive officers. Instead, compensation of executive officers is determined and approved by our board of directors, and in certain circumstances by our shareholders, either in consistency with our office holder compensation policy or, in special circumstances in deviation therefrom, taking into account certain considerations stated in the Companies Law. See “Management—Board Practices—Approval of Related Party Transactions under Israeli Law” for additional information.

	●	Shareholder approval. We will seek shareholder approval for all corporate actions requiring such approval under the requirements of the Companies Law, rather than seeking approval for corporation actions in accordance with Nasdaq Listing Rule 5635. In particular, under this Nasdaq Stock Market rule, shareholder approval is generally required for: (i) an acquisition of shares/assets of another company that involves the issuance of 20% or more of the acquirer’s shares or voting rights or if a director, officer or 5% shareholder has greater than a 5% interest in the target company or the consideration to be received; (ii) the issuance of shares leading to a change of control; (iii) adoption/amendment of equity compensation arrangements (although under the provisions of the Companies Law there is no requirement for shareholder approval for the adoption/amendment of the equity compensation plan); and (iv) issuances of 20% or more of the shares or voting rights (including securities convertible into, or exercisable for, equity) of a listed company via a private placement (and/or via sales by directors/officers/5% shareholders) if such equity is issued (or sold) at below the greater of the book or market value of shares. By contrast, under the Companies Law, shareholder approval is required for, among other things: (i) transactions with directors concerning the terms of their service or indemnification, exemption and insurance for their service (or for any other position that they may hold at a company), for which approvals of the compensation committee, board of directors and shareholders are all required, (ii) extraordinary transactions with controlling shareholders of publicly held companies, which require the special approval, and (iii) terms of employment or other engagement of the controlling shareholder of us or such controlling shareholder’s relative, which require special approval. In addition, under the Companies Law, a merger requires approval of the shareholders of each of the merging companies.

	●	Nomination of Directors. We will not have to comply with the requirements that we have a nominating committee composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities.

	●	Director Independence. Israeli law does not require that a majority of the directors serving on our board of directors be “independent,” as defined under Nasdaq Stock Market Rule 5605(a)(2), and rather requires we have at least two external directors who meet the requirements of the Companies Law, as described below under “Management—Board Practices—External Directors.” The definition of independent director under Nasdaq Stock Market rules and external director under the Companies Law overlap to a significant degree such that we would generally expect the directors serving as external directors to satisfy the requirements to be independent under Nasdaq Stock Market rules. However, it is possible for a director to qualify as an ‘‘external director’’ under the Companies Law without qualifying as an ‘‘independent director’’ under the Nasdaq Stock Market rules, or vice-versa. Notwithstanding Israeli law, we believe that a majority of our directors will be “independent” under the Nasdaq Stock Market rules upon completion of this offering. We are required, however, to ensure that all members of our Audit Committee are “independent” under the applicable Nasdaq and SEC criteria for independence (as we cannot exempt ourselves from compliance with that SEC independence requirement, despite our status as a foreign private issuer), and we must also ensure that a majority of the members of our Audit Committee are “independent directors” as defined in the Companies Law. Furthermore, Israeli law does not require, nor do our independent directors conduct, regularly scheduled meetings at which only they are present, which the Nasdaq Stock Market rules otherwise require

	●	Approval of Related Party Transactions. All related party transactions are approved in accordance with the requirements and procedures for approval of interested party acts and transaction as set forth in the Companies Law, which requires the approval of the audit committee, or the compensation committee, as the case may be, the board of directors and shareholders, as may be applicable, for specified transactions, rather than approval by the audit committee or other independent body of our board of directors as required under the Nasdaq Stock Market rules. See “Management—Board Practices—Approval of Related Party Transactions under Israeli Law” for additional information.

	●	Annual Shareholders Meeting. As opposed to the Nasdaq Stock Market Rule 5620(a), which mandates that a listed company hold its annual shareholders meeting within one year of the company’s fiscal year-end, we are required, under the Companies Law, to hold an annual shareholders meeting each calendar year and within 15 months of the last annual shareholders meeting.

	●	Distribution of periodic reports to shareholders; proxy solicitation. As opposed to the Nasdaq Stock Market rules, which require listed issuers to make such reports available to shareholders in one of a number of specific manners, Israeli law does not require us to distribute periodic reports directly to shareholders, and the generally accepted business practice in Israel is not to distribute such reports to shareholders but to make such reports available through a public website. In addition to making such reports available on a public website, we currently make our audited consolidated financial statements available to our shareholders at our offices and will only mail such reports to shareholders upon request. As a foreign private issuer, we are generally exempt from the SEC’s proxy solicitation rules.

	(i)	determining whether there are deficiencies in the business management practices of our company, and making recommendations to the board of directors to improve such practices;

	(ii)	determining whether to approve certain related party transactions (including transactions in which an office holder has a personal interest and whether such transaction is extraordinary or material under Companies Law) and establishing the approval process for certain transactions with a controlling shareholder or in which a controlling shareholder has a personal interest (see “Management—Board Practices—Approval of Related Party Transactions under Israeli Law”);

	(iii)	determining the approval process for transactions that are “non-negligible” (i.e., transactions with a controlling shareholder that are classified by the audit committee as non-negligible, even though they are not deemed extraordinary transactions), as well as determining which types of transactions would require the approval of the audit committee, optionally based on criteria which may be determined annually in advance by the audit committee;

	(iv)	examining our internal controls and internal auditor’s performance, including whether the internal auditor has sufficient resources and tools to dispose of its responsibilities;

	(v)	examining the scope of our auditor’s work and compensation and submitting a recommendation with respect thereto to our board of directors or shareholders, depending on which of them is considering the appointment of our auditor;

	(vi)	establishing procedures for the handling of employees’ complaints as to deficiencies in the management of our business and the protection to be provided to such employees; and

	(vii)	where the board of directors approves the working plan of the internal auditor, examining such working plan before its submission to the board of directors and proposing amendments thereto.

	●	recommending the engagement or termination of the person filling the office of our internal auditor, reviewing the services provided by our internal auditor and reviewing effectiveness of our system of internal control over financial reporting;
	●	recommending the terms of audit and non-audit services provided by the independent registered public accounting firm for pre-approval by our board of directors; and
	●	reviewing and monitoring, if applicable, legal matters with significant impact, finding of regulatory authorities’ findings, receive reports regarding irregularities and legal compliance, acting according to “whistleblower policy” and recommend to our board of directors if so required.

	●	the education, skills, expertise and accomplishments of the relevant director or executive;
	●	the director’s or executive’s roles and responsibilities and prior compensation agreements with him or her;
	●	the relationship between the cost of the terms of service of an office holder and the average median compensation of the other employees of the company (including those employed through manpower companies), including the impact of disparities in salary upon work relationships in the company;
	●	the possibility of reducing variable compensation at the discretion of the board of directors; and the possibility of setting a limit on the exercise value of non-cash variable compensation; and
	●	as to severance compensation, the period of service of the director or executive, the terms of his or her compensation during such service period, the company’s performance during that period of service, the person’s contribution towards the company’s achievement of its goals and the maximization of its profits, and the circumstances under which the person is leaving the company.

	●	with the exception of office holders who report directly to the chief executive officer, the link between variable compensation and long-term performance and measurable criteria;
	●	the relationship between variable and fixed compensation, and the ceiling for the value of variable compensation at the time of its grant;
	●	the conditions under which a director or executive would be required to repay compensation paid to him or her if it was later shown that the data upon which such compensation was based was inaccurate and was required to be restated in the company’s financial statements;
	●	the minimum holding or vesting period for variable, equity-based compensation; and
	●	maximum limits for severance compensation.

	●	recommending whether a compensation policy should continue in effect, if the then-current policy has a term of greater than three years (approval of either a new compensation policy or the continuation of an existing compensation policy must in any case occur every three years);
	●	recommending to the board of directors periodic updates to the compensation policy;
	●	assessing implementation of the compensation policy;
	●	determining whether the terms of compensation of certain office holders of the company need not be brought to approval of the shareholders; and
	●	determining whether to approve the terms of compensation of office holders that require the committee’s approval.

	●	information on the advisability of a given action brought for his approval or performed by him by virtue of his position; and
	●	all other important information pertaining to these actions.

	●	refrain from any conflict of interest between the performance of his duties in the company and his performance of his other duties or personal affairs;
	●	refrain from any action that is competitive with the company’s business;
	●	refrain from exploiting any business opportunity of the company to receive a personal gain for himself or others; and
	●	disclose to the company any information or documents relating to the company’s affairs which the office holder has received due to his position as an office holder.

	●	a breach of his or her duty of loyalty to the company, provided that the office holder acted in good faith and had reasonable cause to assume that his or her act would not prejudice the company’s interests; and
	●	a financial liability imposed upon him or her in favor of another person.

	●	a financial liability imposed on him or her in favor of another person by any judgment concerning an act performed in his or her capacity as an office holder, including a settlement or arbitrator’s award approved by a court;
	●	reasonable litigation expenses, including attorneys’ fees, expended by the office holder (a) as a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation or proceeding, provided that (1) no indictment (as defined in the Companies Law) was filed against such office holder as a result of such investigation or proceeding; and (2) no financial liability as a substitute for the criminal proceeding (as defined in the Companies Law) was imposed upon him or her as a result of such investigation or proceeding, or, if such financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent; or (b) in connection with a monetary sanction;
	●	reasonable litigation expenses, including attorneys’ fees, expended by the office holder or imposed on him or her by a court: (1) in proceedings that the company institutes, or that another person institutes on the company’s behalf, against him or her; (2) in a criminal proceeding of which he or she was acquitted; or (3) as a result of a conviction for a crime that does not require proof of criminal intent; and
	●	expenses incurred by an office holder in connection with an Administrative Procedure under the Securities Law, including reasonable litigation expenses and reasonable attorneys’ fees. An “Administrative Procedure” is defined as a procedure pursuant to chapters H3 (Monetary Sanction by the Israeli Securities Authority), H4 (Administrative Enforcement Procedures of the Administrative Enforcement Committee) or I1 (Arrangement to prevent Procedures or Interruption of procedures subject to conditions) to the Securities Law.