PRF Technologies Ltd 20-F for FY2022

PRF Technologies Ltd. (PRFX)

20-F 2023-03-15 For: 2022-12-31

Added on April 10, 2026

About this 20-F

PRF Technologies Ltd filed this 20-F on March 15, 2023, covering the fiscal year ended December 31, 2022 (FY2022).

Headline figures

Fiscal year ended December 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net loss: $8.79M; compared with a net loss of $7.25M a year earlier
Diluted EPS: -$0.82; compared with -$0.74 a year earlier

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Israel		65 Yigal Alon St., Tel Aviv 6744316, Israel Tel: +972 3 7177050
(Jurisdiction of incorporation or organization)		(Address of principal executive offices)

Title of each class to be registered		Trading Symbol(s)		Name of each exchange on which each class is to be registered
Ordinary shares, par value NIS 0.03 per share		PRFX		The Nasdaq Stock Market LLC

	Large accelerated filer ☐		Accelerated filer ☐		Non-accelerated filer ☒
					Emerging Growth Company ☒

		Page
INTRODUCTION		1
EMERGING GROWTH COMPANY STATUS		1
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS		2
MARKET, INDUSTRY, AND OTHER DATA		3

PART I		4

ITEM 1.	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS	4
ITEM 2.	OFFER STATISTICS AND EXPECTED TIMETABLE	4
ITEM 3.	KEY INFORMATION	4
A.	[RESERVED]	4
B.	Capitalization and Indebtedness	4
C.	Reasons for the Offer and Use of Proceeds	4
D.	Risk Factors	4
ITEM 4.	INFORMATION ON THE COMPANY	37
A.	History and Development of the Company	37
B.	Business Overview	38
C.	Organizational Structure	56
D.	Property, Plants and Equipment	56
ITEM 4A.	UNRESOLVED STAFF COMMENTS	56
ITEM 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS	56
A.	Operating Results	60
B.	Liquidity and Capital Resources	61
C.	Research and Development, Patents and Licenses	65
D.	Trend Information	65
E.	Critical Accounting Estimates	65
ITEM 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	66
A.	Directors and Senior Management	66
B.	Compensation	69
C.	Board Practices	71
D.	Employees	86
E.	Share Ownership	86
F	Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation	87
ITEM 7.	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	87
A.	Major Shareholders	87
B.	Related Party Transactions	89
C.	Interests of Experts and Counsel	90
ITEM 8.	FINANCIAL INFORMATION	90
A.	Statements and Other Financial Information	90
B.	Significant Changes	90
ITEM 9.	THE OFFER AND LISTING	91
A.	Offer and Listing Details	91
B.	Plan of Distribution	91
C.	Markets	91
D.	Selling Shareholders	91
E.	Dilution	91
F.	Expenses of the Issue	91

ITEM 10.	ADDITIONAL INFORMATION	91
A.	Share Capital	91
B.	Articles of Association	91
C.	Material Contracts	91
D.	Exchange Controls	91
E.	Taxation	91
F.	Dividends and Paying Agents	103
G.	Statement by Experts	103
H.	Documents on Display	103
I.	Subsidiary Information	103
J.	Annual Report to Security Holders.	103
ITEM 11.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	103
ITEM 12.	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	104
A.	Debt Securities	104
B.	Warrants and rights	104
C.	Other Securities	104
D.	American Depositary Shares	104

PART II		104

ITEM 13.	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	104
ITEM 14.	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	104
ITEM 15.	CONTROLS AND PROCEDURES	104
ITEM 16A.	AUDIT COMMITTEE FINANCIAL EXPERT	105
ITEM 16B.	CODE OF ETHICS	105
ITEM 16C.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	105
ITEM 16D.	EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES	106
ITEM 16E.	PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS	106
ITEM 16F.	CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT	106
ITEM 16G.	CORPORATE GOVERNANCE	107
ITEM 16H.	MINE SAFETY DISCLOSURE	108
ITEM 16I	DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS	108

PART III		109

ITEM 17.	FINANCIAL STATEMENTS	109
ITEM 18.	FINANCIAL STATEMENTS	109
ITEM 19.	EXHIBITS	109
SIGNATURES		111

	●	our ability to continue as a going concern;
	●	our history of losses and needs for additional capital to fund our operations and our ability to obtain additional capital on acceptable terms, or at all;

Phase 1:	The drug is initially introduced into healthy human subjects or, in certain indications such as cancer, patients with the target disease or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness and to determine optimal dosage.
Phase 2:	The drug is administered to a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage.
Phase 3:	The drug is administered to an expanded patient population, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product for approval, to establish the overall risk-benefit profile of the product, and to provide adequate information for the labeling of the product.
Phase 4:	Post-approval studies, which are conducted following initial approval, are typically conducted to gain additional experience and data from treatment of patients in the intended therapeutic indication.

	Year ended December 31,
	2022			2021		2020
Statements of comprehensive loss data:	(US$ thousands)
Research and development		4,422			2,860		354
General and administrative		4,447			4,348		1,317
Total operating loss		8,869			7,208		1,671
Interest expenses		-			-		987
Other financial income (expenses), net		(86	)		32		1,175
Loss before taxes		8,783			7,240		3,833
Income tax expense		9			6		220
Net loss		8,792			7,246		4,053

	Payments due by period
	(US$ thousands)
	Less than 1 year		1-3 Years		3-5 Years		More than 5 years		Total
Obligations under master clinical research organization agreement⁽¹⁾		3,886		972		—		—		4,858
Obligations under master clinical trial agreement⁽²⁾		5,088		1,272		—		—		6,360
Total	$	8,974		2,244		—		—	$	11,218

	Years ended December 31,
	(US$ thousands)
	2022			2021			2020
Net cash used in operating activities		(6,459	)		(6,553	)		(2,557	)
Net cash used in investing activities		(6,006	)		(50	)		(10	)
Net cash provided by financing activities		—			7,484			17,310
(Decrease) Increase in cash and cash equivalents and restricted cash		(12,465	)		881			14,743
Cash and cash equivalents and restricted cash, at the beginning of the year		16,571			15,690			947
Cash and cash equivalents and restricted cash, at the end of the year		4,106			16,571			15,690

Name	Age	Position
Senior Management
Ilan Hadar	53	Chief Executive Officer and Chief Financial Officer
Prof. Eli Hazum	75	Chief Technology Officer and Director
Dr. Sigal Aviel	59	Chief Operating Officer
Rita Keynan	54	Vice President of Pharmaceutical Operations

Non-Employee Director
Dr. Ehud Geller	76	Chairman of the Board and Director
Efi Cohen-Arazi^{(1) (2) (3) (4)}	68	Director
Dr. Ellen S. Baron^{(1) (2) (3)(4)}	70	External Director
Augustine Lawlor^{(1) (2) (3)(4)}	67	External Director

Name and Position⁽¹⁾	Salary		Social Benefits⁽²⁾		Bonuses		Value of Options Granted ⁽³⁾		All Other Compensation⁽⁴⁾		Total
	(in thousands of U.S. dollars)
Ehud Geller, Chairman		-		-		-		91		150		241
Ilan Hadar, Chief Executive Officer		321		54		82		621		-		1,078
Eli Hazum Chief Technology Officer		-		-		-		91		144		235
Rita Keynan Vice President of Pharmaceutical Operations		216		55		44		208		-		523
Sigal Aviel Chief Operating Officer		233		44		52		28		-		357

(1)	All executive officers listed in the table were employed on a full-time basis during 2022.
(2)	“Social Benefits” include payments to the National Insurance Institute, advanced education funds, managers’ insurance and pension funds, vacation pay and recuperation pay as mandated by Israeli law.

(3)	Consists of amounts recognized as share-based compensation expense for the year ended December 31, 2022. Assumptions and key variables used in the calculation of such amounts are discussed in Note 10 of our financial statements.
(4)	“All Other Compensation” includes chairman of the board of directors' annual fee and directors’ consulting related fees.

	Ordinary Shares Beneficially Owned		Percentage Owned**
Senior Management and Directors
Ilan Hadar⁽¹⁾		294,619		2.5	%
Dr. Ehud Geller⁽²⁾		3,337,250		28.6	%
Dr. Sigal Aviel⁽³⁾		129,291		1.1	%
Rita Keynan⁽⁴⁾		149,345		1.3	%
Prof. Eli Hazum⁽⁵⁾		198,882		1.7	%
Ellen S. Baron⁽⁶⁾		45,000		*	%
Augustine Lawlor⁽⁶⁾		45,000		*	%
Efi Cohen-Arazi⁽⁶⁾		45,000		*	%
All senior management and directors as a group (8 persons)		4,244,387		36.4	%
More than 5% Shareholders
XT Hi-Tech Investments (1992) Ltd. ⁽⁷⁾		852,959		7.3	%
Medica III Investment group ⁽²⁾		3,337,250		28.6	%

*	Less than 1%

**	Based on 11,586,303 ordinary shares outstanding.

Exhibit No.		Exhibit Description

1.1		Amended and Restated Articles of Association of the Company, as currently in effect (unofficial English translation from Hebrew original) (included as Exhibit 3.2 to our Registration Statement on Form S-1 as filed with the Securities and Exchange Commission on August 5, 2020, and incorporated herein by reference).

2.1		Description of Securities Registered under Section 12 of the Securities Exchange Act of 1934 (included as Exhibit 2.1 to our Annual Report on Form 20-F filed with the Securities and Exchange Commission on March 18, 2021, and incorporated herein by reference)

2.2		Specimen Share Certificate (included as Exhibit 4.1 to the Registration Statement on Form F-1 as filed with the Securities and Exchange Commission on August 5, 2020, as amended, and incorporated herein by reference).

4.1#		2019 Option Plan (included as Exhibit 10.1 to our Registration Statement on Form F-1 as filed with the Securities and Exchange Commission on June 30, 2020, and incorporated herein by reference)

4.2#		Compensation Policy (included as Exhibit 4.2 to our Annual Report on Form 20-F filed with the Securities and Exchange Commission on March 16, 2022, and incorporated herein by reference)

4.3		Form of Indemnification Agreement (included as Exhibit 10.2 to our Registration Statement on Form F-1 as filed with the Securities and Exchange Commission on August 24, 2020, and incorporated herein by reference)

4.4#		Form of Option Award (included as Exhibit 10.7 to our Registration Statement on Form F-1 as filed with the Securities and Exchange Commission on June 30, 2020, and incorporated herein by reference)

4.5		Amended and Restated Investors’ Rights Agreement dated November 26, 2008 (included as Exhibit 10.8 to our Registration Statement on Form F-1 as filed with the Securities and Exchange Commission on June 30, 2020, and incorporated herein by reference)

4.6		Form of Representative Warrant (included as Exhibit 10.5 to our Registration Statement on Form F-1 as filed with the Securities and Exchange Commission on June 30, 2020, and incorporated herein by reference)

4.7		Form of Warrant Agency Agreement including Form of Unit Warrant (included as Exhibit 10.6 to our Registration Statement on Form F-1 as filed with the Securities and Exchange Commission on June 30, 2020, and incorporated herein by reference)

4.8		Securities Purchase Agreement dated as of March 8, 2021 by and between PainReform Ltd. and the purchasers identified on the signature pages thereto (included as Exhibit 10.1 to our Form 6-K filed with the Securities and Exchange Commission on March 9, 2021, and incorporated herein by reference)

4.9		Form of Warrant issued to certain institutional investors on March 10, 2021 (included as Exhibit 10.2 to our Form 6-K filed with the Securities and Exchange Commission on March 9, 2021, and incorporated herein by reference)

4.10		Registration Rights Agreement dated as of March 8, 2021 by and between PainReform and the purchasers signatory thereto (included as Exhibit 10.3 to our Form 6-K filed with the Securities and Exchange Commission on March 9, 2021, and incorporated herein by reference)


12.1*		Certification of the Chief Executive Officer pursuant to rule 13a-14(a) of the Securities Exchange Act of 1934

12.2*		Certification of the Chief Financial Officer pursuant to rule 13a-14(a) of the Securities Exchange Act of 1934

13.1*		Certification of the Chief Executive Officer pursuant to 18 U.S.C. 1350

13.2*		Certification of the Chief Financial Officer pursuant to 18 U.S.C. 1350

15.1*		Consent of Kesselman & Kesselman, a member firm of PricewaterhouseCoopers International Limited, Independent Registered Public Accounting Firm.

15.2*		Consent of Brightman Almagor Zohar & Co. (a Member of Deloitte Touche Tohmatsu Limited, Independent Registered Public Accounting Firm.

16.1		Letter from Brightman Almagor Zohar & Co. (a Member of Deloitte Touche Tohmatsu Limited) (included as Exhibit 16.1 to our Form 6-K filed with the Securities and Exchange Commission on October 25, 2021, and incorporated herein by reference)

101		The following financial information from PainReform Ltd.’s Annual Report on Form 20-F for the year ended December 31, 2022, formatted in Inline Extensible Business Reporting Language (XBRL): (i) Statement of Financial Position, (ii) Statements of Comprehensive Loss, (iii) Statements of Changes in Equity, (iv) Statements of Cash Flows and (iv) Notes to Financial Statements.*

	PAINREFORM LTD.

Date: March 15, 2023	By:	/s/ Ilan Hadar
		Ilan Hadar
		Chief Executive Officer


	Page

Report of Independent Registered Public Accounting Firm (Firm Name: Kesselman & Kesselman / PCAOB ID No. 1309) (Firm Name: Brightman Almagor Zohar & Co / PCAOB ID No. 1197)	F-2

Balance Sheets	F-4

Statements of Comprehensive Loss	F-5

Statements of Changes in Convertible preferred shares and Shareholders’ Equity (Deficit)	F-6

Statements of Cash Flows	F-8

Notes to Financial Statements	F-9 - F-29

			As of December 31,
	Note		2022			2021
Assets
Current assets:
Cash and cash equivalents			$	4,096		$	16,537
Short term deposit				6,085			-
Restricted cash		2f		10			34
Prepaid clinical trial expenses and deferred clinical trial costs		8b		1,728			1,728
Prepaid expenses and other current assets		3		365			721

Total current assets				12,284			19,020
Property and equipment, net				44			53

Total assets			$	12,328		$	19,073

Liabilities and shareholders’ equity

Trade payables			$	209		$	136
Employees and related liabilities				499			423
Accrued expenses		4		356			198

Total current liabilities			$	1,064		$	757

Non-current liabilities:
Provision for unrecognized tax positions		7f		243			234

Total non-current liabilities				243			234

Total liabilities			$	1,307		$	991

Commitments		8

Shareholders’ Equity:		10
Ordinary shares, NIS 0.03 par value; Authorized: 26,666,667 shares as of December 31, 2022 and 2021, respectively; Issued and outstanding: 10,634,166 and 10,482,056 shares as of December 31, 2022 and 2021, respectively.			$	94		$	94
Additional paid-in capital				43,446			41,715
Accumulated deficit				(32,519	)		(23,727	)

Total shareholders’ equity				11,021			18,082

Total liabilities and shareholders’ equity			$	12,328		$	19,073

			For the Year Ended December 31,
	Note		2022			2021			2020

Operating expenses:
Research and development expenses		11a	$	(4,422	)	$	(2,860	)	$	(354	)
General and administrative expenses		11b		(4,447	)		(4,348	)		(1,317	)

Operating loss				(8,869	)		(7,208	)		(1,671	)
Interest expenses				-			-			(987	)
Other financial income (expenses), net		11c		86			(32	)		(1,175	)

Loss before taxes				(8,783	)		(7,240	)		(3,833	)

Income tax expenses				(9	)		(6	)		(220	)
Net loss and comprehensive loss			$	(8,792	)	$	(7,246	)	$	(4,053	)

Basic and diluted net loss per share		2p	$	(0.82	)	$	(0.74	)	$	(1.25	)

Weighted average number of shares of Ordinary Share used in computing basic and diluted net loss per share				10,661,170			9,812,234			3,243,943

	Convertible preferred shares (Temporary equity)						Ordinary Shares				Additional paid-in		Accumulated			Total shareholders’
	Number			Amount			Number		Amount		capital		deficit			equity (deficit)

Balance as of January 31, 2020		2,954,267		$	6,621			576,556	$	5	$	180	$	(12,428	)	$	(12,243	)

Conversion of preferred shares into ordinary shares		(2,954,267	)		(6,621	)		2,954,267		26		6,595		-			6,621

Conversion of convertible notes into ordinary shares		-			-			2,727,214		25		7,135		-			7,160

Share issuance under Initial Public Offering, net		-			-			2,500,000		22		17,288		-			17,310

Equity classification of a derivative warrant liability (Note 4)		-			-			-		-		1,552		-			1,552

Share-based compensation to employees		-			-			-		-		38		-			38

Share-based compensation to service providers		-			-			-		-		202		-			202

Operating lease provided by controlling shareholder		-			-			-		-		33		-			33

Net loss and comprehensive loss		-			-			-		-		-		(4,053	)		(4,053	)

Balance as of December 31, 2020		-		$	-			8,758,037	$	78	$	33,023	$	(16,481	)	$	16,620

	December 31,
	2022		2021		2020
Cash and cash equivalents	$	4,096	$	16,537	$	15,677

Restricted cash		10		34		13

Total cash, cash equivalents, and restricted cash	$	4,106	$	16,571	$	15,690

	%

Computers, software and electronic equipment		33
Furniture and office equipment		7

	Year ended December 31,
	2022			2021			2020

Numerator:
Net loss applicable to shareholders of ordinary shares	$	(8,792	)	$	(7,246	)	$	(4,053	)

Denominator:
Shares of Ordinary Share and restricted shares used in computing basic and diluted net loss per share		10,661,170			9,812,234			3,243,943
Net loss per share of ordinary share, basic and diluted	$	(0.82	)	$	(0.74	)	$	(1.25	)

	September 3,			December 31
	2020			2019
Exercise price	$	6.72-$8.80		$	2.55-$4.74
Expected volatility		72.29	%		72.29	%
Risk free rate		0.22	%		1.5-1.67	%
Expected life (years)		3.98-5			4.65-5
Dividend yield		-			-

	Convertible Preferred Shares - Series A
	Shares Authorized		Shares Issued and Outstanding		Carrying Value		Liquidation Preference
As of December 31, 2019		18,300,000		2,954,267	$	6,621	$	15,250

Type	Issuance Date	Number of warrants	Exercise price	Exercisable through
August 2019 warrants	August 22, 2019	205,268	$6.72 (*)	August 22, 2024
December 2019 warrants	December 9, 2019	148,106	$6.72 (*)	December 8, 2024
Warrants to underwriters	September 3, 2020	125,000	$10.00	September 1, 2025
Warrants to underwriters	October 5, 2020	375,000	$8.80	September 3, 2025
IPO warrants	September 3, 2020	2,812,170	$8.80	September 3, 2025
PIPE warrants	March 11, 2021	232,500	$4.60	September 10, 2026
Warrants to PIPE placement agent	March 11,2021	52,173	$5.06	March 8, 2026
TOTAL		3,950,217

	Number of options		Weighted average exercise price		Weighted average remaining contractual life
			USD
Options outstanding at beginning of year		153,882	$	0.24		2.25
Changes during the year:
Options granted		-		-		-
Options exercised		-		-		-
Options forfeited		-		-		-
Options outstanding at end of year		153,882	$	0.24		1.25
Options exercisable at end of year		153,882	$	0.24		1.25

		2022*			2021*
Expected term		5.28-6.07			5.86-6.11
Risk-free interest rates		2.69%-3.88	%		0.52%-1.13	%
Volatility		79.3%-82.6	%		69.67%-78.99	%
Dividend yield		-			-
Exercise price	$	0.57-1.06		$	3.013-5.738