Beamr Imaging Ltd F-1/A, filed Jul 12, 2022

Beamr Imaging Ltd. (BMR)

F-1/A 2022-07-12

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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		71
Management		84
Principal Shareholders		107
Certain Relationships And Related Party Transactions		109
Description Of Share Capital		110
Shares Eligible For Future Sale		114
Taxation		116
U.S. Federal Income Tax Considerations		118
Underwriting		122
Expenses Of This Offering		130
Legal Matters		130
Experts		130
Change in Registrant’s Certifying Accountant		130
Enforcement Of Civil Liabilities		131
Where You Can Find More Information		132
Index To Consolidated Financial Statements		F-2

Ordinary shares offered by us		1,363,636 ordinary shares

Ordinary shares to be issued and outstanding after this offering		11,799,509 ordinary shares, or 12,004,054 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 204,545 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 $11.00 per ordinary share, which is the midpoint of the price range set forth on the cover page of this prospectus, 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”.

	●	116,366 ordinary shares issuable upon the exercise of warrants outstanding as of such date, at a weighted average exercise price of $7.20, all of which vested as of such date;
	●	1,351,808 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 1,000,863 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;
	●	574,712 ordinary shares reserved for future issuance under our incentive option plans; and
	●	68,182 ordinary shares issuable upon exercise of the warrants to purchase our ordinary shares at $13.75 per share to be issued to the representative of the underwriter.

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

Revenues	$	3,300		$	3,176
Cost of revenues	$	(90	)	$	(94	)
Gross profit	$	3,210		$	3,082

Research and development expenses	$	(2,032	)	$	(2,727	)
Sales and marketing expenses	$	(959	)	$	(1,371	)
General and administrative expenses	$	(773	)	$	(671	)
Other income	$	129		$	20
Operating loss	$	(425	)	$	(1,667	)

Financing expenses, net	$	(475	)	$	(697	)
Taxes on income	$	(52	)	$	(95	)

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

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

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

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

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

(U.S. dollars in thousands, except share and per share data)	As of December 31, 2021
	Actual		Pro Forma (2)		Pro Forma As Adjusted (3)
Balance Sheet Data:
Cash and cash equivalents	$	1,028	$	1,028	$	14,383


Total current assets	$	1,985	$	1,985	$	15,125
Total non-current assets	$	4,702	$	4,702	$	4,702
Total current liabilities	$	1,413	$	1,413	$	1,413
Total non-current liabilities	$	4,820	$	50	$	50
Accumulated deficit	$	29,721	$	29,721	$	29,721
Total shareholders’ equity	$	454	$	5,224	$	18,364

(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 December 31, 2021: the conversion of all of our outstanding 36,056,400 convertible ordinary shares and convertible preferred shares as of December 31, 2021 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, the issuance of 230,250 ordinary shares upon the assumed exercise of warrants on a net cashless basis, and the automatic conversion of advance investment agreements into 415,584 ordinary shares at a conversion price equal to 80% of $11.00, the midpoint of the price range set forth on the cover page of this prospectus, as if such exercise and conversions had occurred on December 31, 2021.

	●	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.

	As of December 31, 2021
(U.S. dollars in thousands)	Actual			Pro Forma			Pro Forma As Adjusted ⁽¹⁾
					(Unaudited)
Cash and cash equivalents	$	1,028		$	1,028		$	14,383
Deferred offering costs		215			215
Convertible advanced investments	$	4,770		$	-		$	-
Derivative warrant liability	$	50		$	50		$	50

Shareholders’ equity
Ordinary Shares	$	51		$	142		$	162
Ordinary 1 and 2 Shares	$	5		$	-		$	-
Preferred Shares	$	78		$	-		$	-
Additional paid-in capital	$	30,041		$	34,803		$	47,923
Accumulated deficit	$	(29,721	)	$	(29,721	)	$	(29,721	)
Total shareholders’ equity	$	454		$	5,224		$	18,364
Total capitalization	$	454		$	5,224		$	18,364

	●	116,366 ordinary shares issuable upon the exercise of warrants outstanding as of such date, at a weighted average exercise price of $7.20, all of which vested as of such date;
	● ●	1,351,808 ordinary shares issuable upon the exercise of options to directors, employees and consultants under our incentive option plan outstanding as of such date, at a weighted average exercise price of $1.76, of which 1,000,863 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;
	●	574,712 ordinary shares reserved for future issuance under our incentive option plan; and
	●	68,182 ordinary shares issuable upon exercise of the warrants to purchase our ordinary shares at $13.75 per share to be issued the representative of the underwriter.

Assumed public offering price per ordinary share	$	11.00
Pro forma net tangible book value per ordinary share as of December 31, 2021		0.05
Conversion of convertible debt		0.50
Increase in net tangible book value per ordinary share attributable to new investors		1.01
Pro forma as adjusted net tangible book value per ordinary share after this offering		1.56
Dilution per ordinary share to new investors		9.44
Percentage of dilution in net tangible book value per ordinary share for new investors		86	%

	Shares					Total Consideration					Average Price Per Ordinary
	Number		Percent			Amount		Percent			Share
Existing shareholders		10,435,873		88.4	%	$	34,945		70	%	$	3.35
New investors		1,363,636		11.6	%	$	15,000		30	%	$	11.00
Total		11,799,509		100.0	%	$	49,945		100	%	$	4.23

	Year Ended December 31,
(U.S. dollars in thousands)	2021			2020

Salary and related expenses	$	(1,645	)	$	(1,963	)
Professional fees	$	(99	)	$	(161	)
Depreciation and amortization	$	(107	)	$	(415	)
Travel and overhead expenses	$	(181	)	$	(188	)
Total research and development expenses	$	(2,032	)	$	(2,727	)

	Year Ended December 31,
(U.S. dollars in thousands)	2021		2020

Other income	$	129	$	20

(U.S. dollars in thousands)	Year Ended December 31,
	2021			2020

Net cash provided by (used in) operating activities	$	569		$	(1,020	)
Net cash provided by (used in) investing activities	$	(4	)	$	1
Net cash provided by (used in) financing activities	$	(141	)	$	(418	)
Change in cash, cash equivalents	$	424		$	(1,437	)
Cash, cash equivalents at beginning of year	$	604		$	2,041
Cash, cash equivalents at end of year	$	1,028		$	604

	●	*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	47	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	68	Director Nominee
Osnat Michaeli	53	Director Nominee

	●	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.
	●	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.

	●	to events that in the opinion of the board of directors can be foreseen based on the company’s activities at the time that the undertaking to indemnify is made; and
	●	in amount or criterion determined by the board of directors, at the time of the giving of such undertaking to indemnify, to be reasonable under the circumstances.

	●	the office holder acts in good faith and the act or its approval does not cause harm to the company; and
	●	the office holder disclosed the nature of his or her interest in the transaction (including any significant fact or document) to the company at a reasonable time before the company’s approval of such matter.

	●	the office holder’s relatives; or
	●	any corporation in which the office holder or his or her relatives holds 5% or more of the shares or voting rights, serves as a director or general manager or has the right to appoint at least one director or the general manager.

	●	not in the ordinary course of business;
	●	not on market terms; or
	●	that is likely to have a material effect on the company’s profitability, assets or liabilities.