RAPH 8-K
Raphael Pharmaceutical Inc. (RAPH)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported):
July 7, 2022 (
(Exact Name of Registrant as Specified in Its Charter)
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(Commission File Number) | (IRS Employer Identification No.) |
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| (Address of Principal Executive Offices) | (Zip Code) |
011
(Registrant’s telephone number, including area code)
Not applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 4.01. Changes in Registrant's Certifying Accountant.
(a) Dismissal of Previous Independent Registered Public Accounting Firm
On July 5, 2022, the Board of Directors of Raphael Pharmaceutical Inc., or the Company, dismissed Brightman Almagor Zohar & Co., a Firm in the Deloitte global network, or the Former Auditor, as the Company’s independent registered public accounting firm, effective July 5, 2022.
Except for an explanatory paragraph in the Former Auditor’s audit report regarding substantial doubt about the Company’s ability to continue as a going concern, the audit reports of the Former Auditor on the Company’s financial statements for the fiscal years ended December 31, 2021 and 2020 contained no adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles.
During the fiscal years ended December 31, 2021 and 2020, and the subsequent interim period through July 5, 2022, there were (i) no “disagreements” (as that term is defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) between the Company and the Former Auditor on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of the Former Auditor, would have caused the Former Auditor to make reference to the subject matter of the disagreement in its reports on the Company’s financial statements and (ii) no “reportable events” (as that term is defined in Item 304(a)(1)(v) of Regulation S-K and the related instructions).
The Company provided the Former Auditor with a copy of the disclosures it is making in this Current Report on Form 8-K and requested that the Former Auditor furnish the Company with a letter addressed to the Securities and Exchange Commission stating whether it agrees with the statements made herein and, if not, stating the respects in which it does not agree. A copy of the letter provided by the Former Auditor, dated July 7, 2022, is filed as Exhibit 16.1 to this Current Report on Form 8-K.
(b) Appointment of New Independent Registered Public Accounting Firm
On July 5, 2022, the Board of Directors of the Company approved the engagement of Weinstein International. C.P.A., or the New Auditor, as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2022, effective upon the effectiveness of the dismissal of the Former Auditor. During the fiscal years ended December 31, 2021 and 2020, and the subsequent interim period through July 5, 2022, neither the Company, nor anyone on its behalf, consulted the New Auditor regarding (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s financial statements, and no written report or oral advice was provided to the Company by the New Auditor that the New Auditor concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue or (ii) any matter that was the subject of a “disagreement” (as that term is defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) or a “reportable event” (as that term is defined in Item 304(a)(1)(v) of Regulation S-K).
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(a) Resignation of Prof. Press from the Board of Directors
On June 30, 2022, Prof. Joseph Press informed the Company that he intended to resign from the Board of Directors, effective immediately. At the time of his resignation, Prof. Press was the Chairman of the Board of Directors. Prof. Press did not resign as a result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.
On June 30, 2022, the Company entered into a service agreement, or the Press Service Agreement, with Prof. Press pursuant to which, effective July 1, 2022, Prof. Press shall retire and cease providing the Company with services as a member and chairman of the Board of Directors. Pursuant to the Press Service Agreement, Prof. Press shall continue to provide consulting services to the Company, upon the Company’s request, from time to time. In consideration for the consulting services, the Company agreed to pay Prof. Press a fee of $1,000 per each medical advice meeting attended. In addition, the Company agreed to grant Prof. Press 280,000 shares of the Company’s common stock and a warrant to purchase 105,000 shares of the Company’s common stock, at an exercise price of $1.12 per share, which shall have a term of 2 years from the issuance date.
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(b) Amended and Restated Management and Operations Agreement with Chief Executive Officer
On July 5, 2022, the Company executed an amended and restated management and operations agreement, or the Amended Management Agreement, with Sheffa Enterprises Inc., a New Jersey corporation owned by Shlomo Pilo, the Company’s Chief Executive Officer. The Amended Management Agreement replaces that certain management and operations agreement entered by the parties on June 1, 2019. Pursuant to the Amended Management Agreement, Mr. Pilo will provide management and operational services to the Company.
Pursuant to the Amended Management Agreement, the Company agreed to pay Mr. Pilo, during the period commencing on July 1, 2022 until December 31, 2022, a monthly fee of $10,000. Thereafter, the Company agreed to pay, commencing on January 1, 2023, a monthly fee in the amount of $20,000. In addition, the Company agreed to issue Mr. Pilo a warrant to purchase 1,000,000 shares of the Company’s common stock, at an exercise price of $1.12 per share, which shall expire on December 31, 2025.
The Amended Management Agreement expires on December 31, 2024. The Company may terminate the Amended Management Agreement prior to the expiration of its term upon 120 days advance notice and the payment of a termination fee equal to the lesser of (i) $360,000, or (ii) the monthly fees payable through the expiration of its term.
(c) Operations Agreement with Chief Financial Officer
On July 5, 2022, the Company executed an operations agreement, or the Operations Agreement, with Guy Ofir & Co. SRL, a Romanian Company owned by Guy Ofir, the Company’s Chief Financial Officer, pursuant to which Mr. Ofir will provide services to the Company.
Pursuant to the Operations Agreement, the Company agreed to pay to Mr. Ofir, during the period commencing on July 1, 2022 until December 31, 2022, a monthly fee of $6,000. Thereafter, the Company also agreed to pay, commencing on January 1, 2023, a monthly fee in the amount of $12,000. In addition, the Company will grant Mr. Ofir 1,000,000 restricted shares of common stock and a warrant to purchase 1,000,000 shares of common stock, at an exercise price of $1.00 per share, which shall expire on December 31, 2025.
The Operations Agreement expires on December 31, 2024, or the Expiration Date. The Company may terminate the Operations Agreement prior to the expiration of its term upon 120 days advance notice and the payment to Mr. Ofir of a termination fee equal to the lesser of (i) $120,000, or (ii) the monthly fees payable through the expiration of its term.
(d) Service Agreement with Chief Technology Officer
On July 5, 2022, the Company executed service agreement, or the Hayon Service Agreement, with Dr. Igal Louria Hayon, the Company’s Chief Technology Officer, pursuant to which Dr. Hayon will provide services to the Company.
Pursuant to the Hayon Service Agreement, the Company agreed to pay to Dr. Hayon, during the period commencing on July 1, 2022 until December 31, 2022, a monthly fee of $9,000. Thereafter, the Company agreed to pay, commencing on January 1, 2023, a monthly fee in the amount of $12,000. In addition, the Company will grant Dr. Hayon a warrant to purchase 990,000 shares of common stock, at an exercise price of $0.01 per share, which shall expire on July 5, 2024, and in the event the Company will apply for any clinical trial of cannabis-based treatment or will begin any other new cannabis related research, the Corporation will grant Dr. Hayon a warrant to purchase 350,000 shares of common stock at an exercise price of $0.01.
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The Corporation will also pay Dr. Hayon 15% of the net royalty income that the Company may generate from worldwide sales of its medical cannabis CBD oil indications for the treatment of COVID-19 patients, and 15% of the net royalty income that the Company may generate from sales of its medical cannabis indication molecules for treating Rheumatoid Arthritis (RA).
The Hayon Service Agreement expires on December 31, 2023. The Company may terminate the Hayon Service Agreement prior to the expiration of its term upon 120 days advance notice and the payment to Dr. Hayon of a termination fee equal to the monthly fees payable through the expiration of its term.
(e) Service Agreement with Director
On July 5, 2022, the Company executed service agreement, or the Eliya Service Agreement, with Yehuda Eliya, a member of the Company’s Board of Directors, pursuant to which Mr. Eliya will provide services to the Company.
Pursuant to the Eliya Service Agreement, the Company will grant Mr. Eliya a warrant to purchase 202,000 shares of common stock, at an exercise price of $1.12 per share, which shall have a term of 2 years from the issuance date
The Eliya Service Agreement expires on December 31, 2022.
The foregoing descriptions of the terms of the Press Service Agreement, Amended Management Agreement, Operations Agreement, the Hayon Service Agreement and the Eliya Service Agreement are not intended to be complete and are qualified in their entirety by reference to the Press Service Agreement, Amended Management Agreement, Operations Agreement, the Hayon Service Agreement and the Eliya Service Agreement, copies of which are attached hereto as Exhibit 10.1, 10.2, 10.3, 10.4 and 10.5, respectively, and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| RAPHAEL PHARMACEUTICAL INC. | ||
| By: | /s/ Shlomo Pilo | |
| Name: | Shlomo Pilo | |
| Title: | Chief Executive Officer | |
Date: July 7, 2022
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Exhibit 10.1
This SERVICE AGREEMENT (this “Agreement”) is made as of 30th of June, 2022, by and between Raphael Pharmaceutical INC. (the “Company”), and JOSEPH PRESS (the “Adviser”/so called “JOSEPH”).
RECITALS
WHEREAS, Joseph serves as the Chairman of the Board of Directors in the company;
WHEREAS, Joseph intend to retire for pension at the end of this month;
WHEREAS, the Company desires to engage Joseph to be an independent medical adviser of the company, and Joseph desires to be an independent adviser on the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations and warranties contained herein, and intending to be legally bound hereby, the parties hereto hereby agree as follows:
1. Appointment of Joseph to be medical adviser; Relationship of Company and Joseph.
Joseph shall provide medical advises services to the Company upon the company requests, as hereinafter provided. The adviser, at all times, shall be independent of the Company. Nothing contained herein shall be deemed to make or render the Company a partner, co-venturer or other participant in the business or operations of Joseph, or in any manner to render Company liable, as principal, surety, guarantor, and agent or otherwise for any of the debts, obligations or liabilities of Joseph. Similarly, nothing contained herein shall be deemed to make or render Joseph a partner, co-venturer or other participant in the business or operations of the Company, or in any manner to render Joseph liable, as principal, surety, guarantor, and agent or otherwise for any of the debts, obligations or liabilities of Company.
2. Services Descriptions.
Commencing on the date of this Agreement, Joseph will provide, supply and render such services, advises and operational support services as are necessary to provide service to the Company and, as more specifically described below, shall:
| a. | Give the company Medical Advises Services upon the request of the CEO. |
| b. | Serve at the Board of Directors until the end of June 2022. |
3. Obligations of the Company.
Prior to the expiration of this Agreement, the Company shall provide Joseph with true and correct information relating to all functions for which Joseph has responsibility hereunder, and shall not take any action to interfere with Joseph’s performance of its duties hereunder.
4. Location.
During the term of this Agreement, the business of the Company will be serviced by Joseph from the company’s office Haifa, Israel or any other location selected by company.
5. Compensation.
| a. | Base Compensation |
While Joseph is employed by the Company hereunder and as otherwise provided in this agreement, the Company shall pay Joseph a fee of $1,000 per medical advises meeting or service. The CEO will send to Joseph a request for advise services or any meeting in writing (by email) prior to any use of such advises services.
| b. | Benefits: |
The company will grant Joseph 280,000 Shares at zero cost & 105,000 warrants for 2 year (until 30.06.24) at an execution price of $1.12 per Warrant.
6. Term of Agreement; Termination of Rights.
(a) Joseph will end his services as a director by the end of June 2022.
(b) The company may use in the future his medical advice services & Joseph may give his advice services to the company upon his wishes & abilities.
7. Additional Provisions.
(a) This Agreement sets forth the entire understanding and agreement among the parties hereto with reference to the subject matter hereof and may not be modified, amended, discharged or terminated except by a written instrument signed by the parties hereto.
(b) This Agreement shall be governed by, and construed in accordance with, the laws of the State of ISRAEL applicable to agreements made, delivered and to be performed within such State.
(c) This Agreement may not be assigned by Company or Joseph.
(d) All of the terms and provisions of this Agreement shall be binding upon, inure to the benefit of, and be enforceable by each of the parties hereto and their respective successors and assigns.
(e) If any provision of this Agreement shall be determined by a court of competent jurisdiction to be invalid or unenforceable, such determination shall not affect the remaining provisions of this Agreement, all of which shall remain in full force and effect.
(f) This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument.
(g) The headings in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Service Agreement as of the date first above written.
Signed this 30th day of June, 2022.
| /s/ Shlomo Pilo | /s/ Prof. Joseph Press | |
| COMPANY | THE ADVISER | |
| by: SHLOMO PILO, CEO | by: Prof. Joseph Press |
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Exhibit 10.2
This MANAGEMENT AND OPERATIONS AGREEMENT (this “Agreement”) is made as of JULY 5th 2022, by and between Raphael Pharmaceutical ltd. (the “Company”), and Sheffa Enterprises, INC., a New Jersey corporation/ Shlomo Pilo (the “Manager”).
RECITALS
WHERES, the parties signed a management agreement on 1st June 2019 (“so call: “the previous agreement”;
WHERES, the parties agreed to cancel the previous agreement and to engage the following agreement;
WHEREAS, the Company desires to engage the Manager to manage its Business, and the Manager desires to retain, operate and manage the Business on the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations and warranties contained herein, and intending to be legally bound hereby, the parties hereto hereby agree as follows:
1. Appointment of Manager; Relationship of Company and the Manager.
Manager shall provide management and operational support services to the Company, as hereinafter provided. Manager, at all times, shall be independent of the Company. Nothing contained herein shall be deemed to make or render the Company a partner, co-venturer or other participant in the business or operations of the Manager, or in any manner to render Company liable, as principal, surety, guarantor, and agent or otherwise for any of the debts, obligations or liabilities of Manager. Similarly, nothing contained herein shall be deemed to make or render the Manager a partner, co-venturer or other participant in the business or operations of the Company, or in any manner to render Manager liable, as principal, surety, guarantor, and agent or otherwise for any of the debts, obligations or liabilities of Company.
2. Management Services.
Commencing on the date of this Agreement, Manager will provide, supply and render such management and operational support services as are necessary to provide service to the Company and, as more specifically described below, shall:
| a. | Administer and supervise all of the finances of the Business, including payroll, taxes, accounting, bookkeeping, record keeping, managing or accounts payable, and accounts receivable, banking, financial records and reporting functions as they pertain to the business of the Company, with the power to make such changes therein, in its sole discretion, and to incorporate such functions into systems used by Manager. Manager shall prepare and maintain financial statements for the Business according to generally accepted accounting principles consistently applied and shall provide the Company with weekly operating reports and statements including but not limited to cash flow statements, income statements, accounts payable and accounts receivable reports and such other reports and information as may be requested by Company from time to time. |
| b. | Select and employ all personnel necessary to service the Business of the Company. |
| c. | Supervise and control the purchase of all materials and supplies, and acquire, lease, dispose of and repair equipment and facilities necessary to provide safe and adequate service to the business of the Company. |
| d. | Manage all costs and all pricing on a customer-by-customer basis, estimate all costs on new contracts, bid on and enter into new contracts, and control all costs for contracts in progress. |
| e. | Commence, defend and control all legal actions, arbitrations, investigations and proceedings that arise due to events occurring in connection with the business of the Company during the term of this Agreement. |
| f. | Maintain the assets of the Company in good repair, order and condition, normal and reasonable wear and tear excepted. |
| g. | At the Manager’s expense, provide the Company with office or storage space in Lui Paster 4 Tel Aviv-Jaffa, Israel sufficient to maintain the Company’s files and administrative personnel. |
Notwithstanding the foregoing, the Manager shall not have the authority, without the express written consent of the board of the directors of the Company, to purchase in the name of the Company, or for use by the Company in the Business, any assets outside the ordinary course of business, or incur any indebtedness outside the ordinary course of business.
3. Obligations of the Company.
Prior to the expiration of this Agreement, the Company shall provide the Manager with true and correct information relating to all functions for which the Manager has responsibility hereunder, and shall not take any action to interfere with the Manager’s performance of its duties hereunder.
4. Additional Agreements of the Manager.
The Manager agrees that at all times during the term of this Agreement it shall, to the extent the Company has adequate funds thereto:
(a) Do nothing, and permit nothing to be done (which is within the control of the Manager), which will or might cause the Company to operate in an improper or illegal manner.
(b) Not cause a default in any of the terms, conditions and obligations of any of the contracts and other agreements of the Company.
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(c) To the extent permissible by law, maintain in full force its licenses and permits in the State of Israel and comply fully with all laws respecting its formation, existence, activities and operations.
(d) Allow the Company and the employees, attorneys, accountants and other representatives of the Company, full and free access to its books and records, and all of the facilities of the Company relating to the Business.
5. General and Administrative Activities.
To the extent that Manager shall deem it necessary or desirable, Manager shall have the power and authority to combine and integrate, at its own office (including those of an affiliate), the “general and administrative” (as such term is used in accounting practice) activities of the Business, including, but not limited to, all accounting, bookkeeping, record-keeping, paying, receiving and other fiscal or financial activities, with those of Manager, provided that any obligation of the Company to share or defer costs of such office shall but subject to the subsequent agreement of the Company.
6. Location.
During the term of this Agreement, the business of the Company will be serviced by Manager from the Manager’s office in Lui-Paster 4 Tel Aviv Jaffa, Israel or any other location selected by Manager.
7. Compensation.
| a. | Base Compensation |
While Manager is employed by the Company hereunder and as otherwise provided in this Agreement, the Company shall pay to Manager a monthly fee in the amount of $20,000, payable in advance, with the first payment being due and payable on January 1st, 2023, and each succeeding payment being due and payable on the first day of each succeeding calendar quarter during the term of this Agreement. It should be noted that until end of year 2022, the manager fee’s will remain according to June 1st 2019 agreement.
| b. | The company will grant the SHLOMO PILO 1,000,000 Warrants to be executed at price of $1.12 per Warrant until 31.12.2025. |
| c. | Expenses |
While Manager is employed by the Company hereunder, the Company shall reimburse Manager for all reasonable and necessary out-of-pocket business, travel and entertainment expenses incurred by it in the performance of its duties and responsibilities hereunder, subject to the Company’s normal policies and procedures for expense verification and documentation.
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8. Term of Agreement; Termination of Rights.
(a) The term of this Agreement shall commence on its execution, and expire, unless terminated or extended in writing, on December 31, 2024. Upon termination of this Agreement, all books and records relating to the operation of the Business shall be immediately returned to the Company. Notwithstanding the foregoing, the Company may terminate this Agreement prior to the expiration of its term upon one hundred & twenty (120) days advance notice and the payment to the Manager of a termination fee equal to the lesser of a) $360,000, or b) the monthly management fee paid or payable to the Manager pursuant to Paragraph 7 herein for the remaining this Agreement.
(b) Company may, at its option, upon ten (10) days’ written notice terminate this Agreement (if such default is not cured within such ten (10) day period or such longer period as required to effect a cure if a cure is commenced within 10 days and diligently prosecuted): (i) if Manager shall violate any material provision of this Management Agreement; (ii) if Manager shall violate or be in material breach of any provision, representation, warranty, covenant or undertaking herein; or (iii) if Manager (a) makes an assignment for the benefit of creditors, (b) is adjudicated a bankrupt, (c) files or has filed against it any bankruptcy, reorganization, liquidation or similar petition or any petition seeking the appointment of a receiver, conservator or other representative, or (d) proposes a composition arrangement with creditors. The date on which this Agreement is terminated pursuant to Section 8(a) above or this Section 8(b) is hereinafter referred to as the “Expiration Date”.
9. Indemnification.
(a) Company shall indemnify, defend and hold harmless Manager and its affiliates, their respective shareholders, officers, directors, employees, and agents, against and in respect of any and all Losses arising out of or due to the operation of the Business by Company, its affiliates, agents, servants and/or employees prior to the commencement of the term of this Management Agreement. The obligations set forth in this Section 9(b) shall survive for a period of one (1) year following the Expiration Date.
10. Additional Provisions.
(a) This Agreement sets forth the entire understanding and agreement among the parties hereto with reference to the subject matter hereof and may not be modified, amended, discharged or terminated except by a written instrument signed by the parties hereto.
(b) This Agreement replaced the previous agreement & the parties see the previous agreement as void.
(c) This Agreement shall be governed by, and construed in accordance with, the laws of the State of ISRAEL applicable to agreements made, delivered and to be performed within such State.
(c) This Agreement may not be assigned by Company or Manager, except that Manager may in its sole discretion assign this Agreement to a properly licensed affiliate performing similar types of services. Upon any assignment Manager shall remain primarily liable and also be jointly and severally liable to Company for performance of Manager’s duties herein.
(d) All of the terms and provisions of this Management Agreement shall be binding upon, inure to the benefit of, and be enforceable by each of the parties hereto and their respective successors and assigns. Except for affiliates of the Company and Manager and their respective shareholders, officers, directors, employees and agents, no person other than the parties hereto shall be a third party beneficiary of this Agreement or have any rights hereunder.
(e) If any provision of this Agreement shall be determined by a court of competent jurisdiction to be invalid or unenforceable, such determination shall not affect the remaining provisions of this Agreement, all of which shall remain in full force and effect.
(f) This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument.
(g) The headings in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Management Agreement as of the date first above written.
| Signed this 5th day of JULY, 2022. | ||
| /s/ Guy Ofir | /s/ Shlomo Pilo | |
| COMPANY | MANGER | |
| by: Guy Ofir,CFO & Director | by: Shlomo Pilo, CEO |
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Exhibit 10.3
This OPERATIONS AGREEMENT (this “Agreement”) is made as of JULY 5th ,2022, by and between Raphael Pharmaceutical ltd. (the “Company”), and Guy Ofir & Co. SRL a Romanian Company no. J40/1123/2007 OR ADV’ GUY OFIR I.D. 172910400069 (the “CFO, Legal Adviser & Director”).
RECITALS
WHEREAS, the Company desires to engage the CFO into this agreement, and the CFO desires & agree to all the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations and warranties contained herein, and intending to be legally bound hereby, the parties hereto hereby agree as follows:
1. Appointment of CFO, Legal Adviser & Director and it’s relationship with the Company.
CFO shall provide CFO, Legal Advises & Director Services to the Company, as hereinafter provided. CFO, at all times, shall be independent of the Company. Nothing contained herein shall be deemed to make or render the Company a partner, co-venturer or other participant in the business or operations of the CFO, or in any manner to render Company liable, as principal, surety, guarantor, and agent or otherwise for any of the debts, obligations or liabilities of CFO. Similarly, nothing contained herein shall be deemed to make or render the CFO a partner, co-venturer or other participant in the business or operations of the Company, or in any manner to render CFO liable, as principal, surety, guarantor, and agent or otherwise for any of the debts, obligations or liabilities of Company.
2. CFO Services.
Commencing on the date of this Agreement, CFO will provide, supply and render such services and operational support services as are necessary to provide service to the Company and, as more specifically described below, shall:
| a. | CFO SERVICES TO THE COMPANY. |
| b. | Legal Advice to the company. |
| c. | Serve as a Director of the Company. |
3. Obligations of the Company.
Prior to the expiration of this Agreement, the Company shall provide the CFO with true and correct information relating to all functions for which the CFO has responsibility hereunder, and shall not take any action to interfere with the CFO’s performance of its duties hereunder.
4. Additional Agreements of the CFO.
The CFO agrees that at all times during the term of this Agreement it shall, to the extent the Company has adequate funds thereto:
(a) Do nothing, and permit nothing to be done (which is within the control of the CFO), which will or might cause the Company to operate in an improper or illegal manner.
(b) Not cause a default in any of the terms, conditions and obligations of any of the contracts and other agreements of the Company.
(c) To the extent permissible by law, maintain in full force its licenses and permits in the State of Israel and comply fully with all laws respecting its formation, existence, activities and operations.
(d) Allow the Company and the employees, attorneys, accountants and other representatives of the Company, full and free access to its books and records, and all of the facilities of the Company relating to the Business.
5. General and Administrative Activities.
To the extent that CFO shall deem it necessary or desirable, CFO shall have the power and authority to combine and integrate, at its own office (including those of an affiliate), the “general and administrative” (as such term is used in accounting practice) activities of the Business, including, but not limited to, all accounting, bookkeeping, record-keeping, paying, receiving and other fiscal or financial activities, with those of CFO, provided that any obligation of the Company to share or defer costs of such office shall but subject to the subsequent agreement of the Company.
6. Location.
During the term of this Agreement, the business of the Company will be serviced by CFO from the Manager’s (CEO) office in Lui-Paster 4 Tel Aviv Jaffa, Israel or any other location selected by Manager (CEO).
7. Compensation.
| a. | Base Compensation: |
While CFO is employed by the Company hereunder and as otherwise provided in this Agreement, the Company shall pay to CFO a monthly fee in the amount of $12,000, payable in advance, with the first payment being due and payable on January 1st, 2023, and each succeeding payment being due and payable on the first day of each succeeding calendar quarter during the term of this Agreement. The parties agreed that between 1.7.2022-31.12.2022 the CFO fees will remain $6,000 per month.
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| b. | Expenses: |
While CEO is employed by the Company hereunder, the Company shall reimburse CFO for all reasonable and necessary out-of-pocket business, travel and entertainment expenses incurred by it in the performance of its duties and responsibilities hereunder, subject to the Company’s normal policies and procedures for expense verification and documentation.
| c. | The company will grant the GUY OFIR 1,000,000 Restricted shares at no cost & 1,000,000 Warrants to be executed at price of $1 per Warrant until 31.12.2025. |
8. Term of Agreement; Termination of Rights.
(a) The term of this Agreement shall commence on its execution, and expire, unless terminated or extended in writing, on December 31, 2024. Upon termination of this Agreement, all books and records relating to the operation of the Business shall be immediately returned to the Company. Notwithstanding the foregoing, the Company may terminate this Agreement prior to the expiration of its term upon one hundred & twenty (120) days advance notice and the payment to the CFO of a termination fee equal to the lesser of a) $120,000, or b) the monthly CFO’s fee paid or payable to the CFO pursuant to Paragraph 7 herein for the remaining this Agreement.
(b) Company may, at its option, upon ten (10) days’ written notice terminate this Agreement (if such default is not cured within such ten (10) day period or such longer period as required to effect a cure if a cure is commenced within 10 days and diligently prosecuted): (i) if CFO shall violate any material provision of this Agreement; (ii) if CFO shall violate or be in material breach of any provision, representation, warranty, covenant or undertaking herein; or (iii) if CFO (a) makes an assignment for the benefit of creditors, (b) is adjudicated a bankrupt, (c) files or has filed against it any bankruptcy, reorganization, liquidation or similar petition or any petition seeking the appointment of a receiver, conservator or other representative, or (d) proposes a composition arrangement with creditors. The date on which this Agreement is terminated pursuant to Section 8(a) above or this Section 8(b) is hereinafter referred to as the “Expiration Date”.
9. Indemnification.
(a) Company shall indemnify, defend and hold harmless CFO and its affiliates, their respective shareholders, officers, directors, employees, and agents, against and in respect of any and all Losses arising out of or due to the operation of the Business by Company, its affiliates, agents, servants and/or employees prior to the commencement of the term of this Agreement. The obligations set forth in this Section 9(b) shall survive for a period of one (1) year following the Expiration Date.
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10. Additional Provisions.
(a) This Agreement sets forth the entire understanding and agreement among the parties hereto with reference to the subject matter hereof and may not be modified, amended, discharged or terminated except by a written instrument signed by the parties hereto.
(b) This Agreement shall be governed by, and construed in accordance with, the laws of the State of ISRAEL applicable to agreements made, delivered and to be performed within such State.
(c) This Agreement may not be assigned by Company or CFO, except that CFO may in its sole discretion assign this Agreement to a properly licensed affiliate performing similar types of services. Upon any assignment CFO shall remain primarily liable and also be jointly and severally liable to Company for performance of CFO’s duties herein.
(d) All of the terms and provisions of this Agreement shall be binding upon, inure to the benefit of, and be enforceable by each of the parties hereto and their respective successors and assigns. Except for affiliates of the Company and CFO and their respective shareholders, officers, directors, employees and agents, no person other than the parties hereto shall be a third party beneficiary of this Agreement or have any rights hereunder.
(e) If any provision of this Agreement shall be determined by a court of competent jurisdiction to be invalid or unenforceable, such determination shall not affect the remaining provisions of this Agreement, all of which shall remain in full force and effect.
(f) This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument.
(g) The headings in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
| Signed this 5th day of July, 2022. | ||
| /s/ Shlomo Pilo | /s/ Guy Ofir | |
| “COMPANY” | “CFO” | |
| by: SHLOMO PILO, CEO | by: GUY OFIR, CFO |
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Exhibit 10.4
This SERVICE AGREEMENT (this “Agreement”) is made as of 5th of July, 2022, by and between Raphael Pharmaceutical INC. (the “Company”),, and DR. IGAL LOURIA HAYON (the “CTO”/so called “IGAL”).
RECITALS
WHEREAS, the Company desires to engage IGAL to be the Chief Technology officer (so called: “CTO”) & DIRECTOR of the company, and IGAL desires to be the CTO & board Member on the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations and warranties contained herein, and intending to be legally bound hereby, the parties hereto hereby agree as follows:
1. Appointment of IGAL to be CTO & DIRECTOR; Relationship of Company and IGAL.
Igal shall provide technological operational support services to the Company, as hereinafter provided. Igal, at all times, shall be independent of the Company. Nothing contained herein shall be deemed to make or render the Company a partner, co-venturer or other participant in the business or operations of Igal, or in any manner to render Company liable, as principal, surety, guarantor, and agent or otherwise for any of the debts, obligations or liabilities of Igal. Similarly, nothing contained herein shall be deemed to make or render Igal a partner, co-venturer or other participant in the business or operations of the Company, or in any manner to render Igal liable, as principal, surety, guarantor, and agent or otherwise for any of the debts, obligations or liabilities of Company.
2. Services Descriptions.
Commencing on the date of this Agreement, Igal will provide, supply and render such services, advices and operational support services as are necessary to provide service to the Company and, as more specifically described below, shall:
| a. | Serve as the Chief Technology Officer & Director of the company. |
| b. | Represent the company in the Stock Exchange & the SEC in all Technology maters. |
| c. | Give the company Medical Advice Services & also sit as a member of its Medical Committee. |
| d. | Represent the company in any Health Ministry Country around the world such as the USA FDA & ISRAELI HEALTH MINISTRY. |
| It | should be noted that Igal services to the company will not be contradict or in any conflict of interest to his work in Rambam Health Care Campus. |
3. Obligations of the Company.
Igal is the head of the scientific bord and will have the right for final scientific decision,
including but not limited to appointing the scientific bord members, hiring other consulting or CRO services by the company.
Prior to the expiration of this Agreement, the Company shall provide Igal with true and correct information relating to all functions for which Igal has responsibility hereunder, and shall not take any action to interfere with Igal’s performance of its duties hereunder.
4. Location.
During the term of this Agreement, the business of the Company will be serviced by Igal from the company’s office in Haifa, Israel or any other location selected by the company and is agreed by Igal.
5. Compensation.
| a. | Base Compensation |
While Igal is employed by the Company hereunder and as otherwise provided in this Agreement, the Company shall pay Igal a monthly fee in the amount of $12,000+expenses related to his science work payable in advance, with the first payment being due and payable on January 1st , 2023, and each succeeding payment being due and payable on the first day of each succeeding calendar quarter during the term of this Agreement. The parties agreed that until December 2022 (include) Igal’s Service Fee will remain $9,000 +expenses per month.
| b. | Benefits: |
*The company will grant Igal 999,000 Warrants at an execution price of $0.01 per Warrant. Igal will be able to execute his warrants within two years from the signing date of this agreement.
*In addition to the CTO capacity as the Company’s R&D consultant for medical Cannabis at the Rambam medical Center, the company appoints Igal to be the company’s COVID-19 project manager. The parties agreed that the Project manager will be paid in addition to the above considerations, 15% of the net Royalties income that the company will get for its Medical Cannabis CBD Oil indications sold worldwide for the treatment of COVID-19 patients, and 15% of the net Royalties income that the company will get for its medical cannabis indication molecules based, for treating Rheumatoid Arthritis (RA)
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It should be noted that IGAL will be granted additional 350,000 warrants at $0.01 cost in case the company will apply for any clinical trial of cannabis based treatment, or will begin any other new cannabis related research.
It should be noted that the compensation will be changed in the future according to the Board of Directors of the company decisions, in such a way as it can increase the amount of fee and/or grant Igal other benefits.
*The company will take care to insure the board of Directors in a suitable Policy, 45 days after it will start to be a traded company.
6. Term of Agreement; Termination of Rights.
(a) The term of this Agreement shall commence on its execution, and expire, unless terminated or extended in writing, on December 31, 2023. Upon termination of this Agreement, all books and records relating to the operation of the Business shall be immediately returned to the Company. Notwithstanding the foregoing, the Company or Igal may terminate this Agreement prior to the expiration of its term upon one hundred & twenty (120) days advance notice and the payment to Igal of a termination fee equal to three years the fee paid or payable to Igal pursuant to Paragraph 5 herein for the remaining this Agreement.
(b) Company may, at its option, upon ten (10) days’ written notice terminate this Agreement (if such default is not cured within such ten (10) day period or such longer period as required to effect a cure if a cure is commenced within 10 days and diligently prosecuted): (i) if Igal shall violate any material provision of this Agreement; (ii) if Igal shall violate or be in material breach of any provision, representation, warranty, covenant or undertaking herein; or (iii) if Igal (a) makes an assignment for the benefit of creditors, (b) is adjudicated a bankrupt, (c) files or has filed against it any bankruptcy, reorganization, liquidation or similar petition or any petition seeking the appointment of a receiver, conservator or other representative, or (d) proposes a composition arrangement with creditors. The date on which this Agreement is terminated pursuant to Section 6(a) above or this Section 6(b) is hereinafter referred to as the “Expiration Date”.
(c) Igal may, at his option, upon ten (10) days’ written notice terminate this Agreement (if such default is not cured within such ten (10) day period or such longer period as required to effect a cure if a cure is commenced within 10 days and diligently prosecuted): (i) if Company shall violate any material provision of this Agreement; (ii) if Company shall violate or be in material breach of any provision, representation, warranty, covenant or undertaking herein; or (iii) if Company (a) makes an assignment for the benefit of creditors, (b) is adjudicated a bankrupt, (c) files or has filed against it any bankruptcy, reorganization, liquidation or similar petition or any petition seeking the appointment of a receiver, conservator or other representative, or (d) proposes a composition arrangement with creditors. The date on which this Agreement is terminated pursuant to Section 6(a or b) above or this Section 6(c) is hereinafter referred to as the “Expiration Date”.
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7. Indemnification.
(a) Company shall indemnify, defend and hold harmless Igal and its affiliates, their respective shareholders, officers, directors, employees, and agents, against and in respect of any and all Losses arising out of or due to the operation of the Business by Company, its affiliates, agents, servants and/or employees prior to the commencement of the term of this Agreement. The obligations set forth in this Section 6(b) shall survive for a period of ten (10) year following the Expiration Date.
8. Additional Provisions.
(a) This Agreement sets forth the entire understanding and agreement among the parties hereto with reference to the subject matter hereof and may not be modified, amended, discharged or terminated except by a written instrument signed by the parties hereto.
(b) This Agreement shall be governed by, and construed in accordance with, the laws of the State of ISRAEL applicable to agreements made, delivered and to be performed within such State.
(c) This Agreement may not be assigned by Company or Igal.
(d) All of the terms and provisions of this Agreement shall be binding upon, inure to the benefit of, and be enforceable by each of the parties hereto and their respective successors and assigns.
(e) If any provision of this Agreement shall be determined by a court of competent jurisdiction to be invalid or unenforceable, such determination shall not affect the remaining provisions of this Agreement, all of which shall remain in full force and effect.
(f) This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument.
(g) The headings in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Service Agreement as of the date first above written.
Signed this 5th day of July, 2022.
| /s/ Shlomo Pilo | /s/ Igal Louria Hayon | |||
| COMPANY | CHIEF TECHNOLOGY OFFICER | |||
| by: | SHLOMO PILO, CEO | by: | Dr. Igal Louria Hayon | |
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Exhibit 10.5
This SERVICE AGREEMENT (this “Agreement”) is made as of July 5th, 2022, by and between Raphael Pharmaceutical INC. (the “Company”), and ELIYA YEHUDA I.D 025721069, (the “Director”/so called “Yehuda”).
RECITALS
WHEREAS the Company desires to engage Yehuda to be a director of the company, and Yehuda desires to be the director on the terms set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations and warranties contained herein, and intending to be legally bound hereby, the parties hereto hereby agree as follows:
1. Appointment of Director; Relationship of Company and Yehuda:
Yehuda shall serve as a director of the Company, as hereinafter provided. The Director, always, shall be independent of the Company. Nothing contained herein shall be deemed to make or render the Company a partner, co-venturer or other participant in the business or operations of Yehuda, or in any manner to render Company liable, as principal, surety, guarantor, and agent or otherwise for any of the debts, obligations, or liabilities of Yehuda. Similarly, nothing contained herein shall be deemed to make or render Yehuda a partner, co-venturer or other participant in the business or operations of the Company, or in any manner to render Yehuda liable, as principal, surety, guarantor, and agent or otherwise for any of the debts, obligations, or liabilities of Company.
2. Services Descriptions.
Commencing on the date of this Agreement, Yehuda will serve as a director in its board of directors.
3. Obligations of the Company.
Prior to the expiration of this Agreement, the Company shall provide Yehuda with true and correct information relating to all functions for which Yehuda has responsibility hereunder and shall not take any action to interfere with Yehuda’s performance of its duties hereunder.
4. Location.
During the term of this Agreement, the business of the Company will be serviced by Yehuda from the company’s office Haifa, Israel or any other location in other country selected by company (subject to the CEO decision).
5. Compensation.
The company will grant Yehuda 202,000 Warrants for 2 years at an execution price of $1.12 per share.
It should be noted that the compensation will be changed in the future according to the Board of Directors of the company decisions, in such a way as it can propose Yehuda fees and/or grant Yehuda other benefits which will not be less than the benefits to which he is entitled in the matter of the warrants, the amount of the warrants, the price of the warrants and the execution date of the warrants.
*The company will take care for an insurance to its board of Directors in a suitable Policy. That will occur 45 days after the company will start to be a traded in the stock exchange.
If an insurance event occurs and as insurance policy is activated, the company will bear the cost of the deductible.
6. Term of Agreement; Termination of Rights.
(a) The term of this Agreement shall commence on its execution, and expire, unless terminated or extended in writing, on December 31, 2022.
(b) Company may, at its option, upon ten (10) days’ written notice terminate this Agreement (if such default is not cured within such ten (10) day period or such longer period as required to effect a cure if a cure is commenced within 10 days and diligently prosecuted): (i) if Yehuda shall violate any material provision of this Agreement; (ii) if Yehuda shall violate or be in material breach of any provision, representation, warranty, covenant or undertaking herein; or (iii) if Yehuda (a) makes an assignment for the benefit of creditors, (b) is adjudicated a bankrupt, (c) files or has filed against it any bankruptcy, reorganization, liquidation or similar petition or any petition seeking the appointment of a receiver, conservator or other representative, or (d) proposes a composition arrangement with creditors. The date on which this Agreement is terminated pursuant to Section 6(a) above or this Section 6(b) is hereinafter referred to as the “Expiration Date”. (Note: The warrants as mentioned above in section 5 will be granted to Yehuda even though his terms of contract may terminate upon the condition of section 6).
7. Additional Provisions.
(a) This Agreement sets forth the entire understanding and agreement among the parties hereto with reference to the subject matter hereof and may not be modified, amended, discharged or terminated except by a written instrument signed by the parties hereto.
(b) This Agreement shall be governed by, and construed in accordance with, the laws of the State of ISRAEL applicable to agreements made, delivered and to be performed within such State.
(c) This Agreement may not be assigned by Company or Yehuda.
(d) All of the terms and provisions of this Agreement shall be binding upon, inure to the benefit of, and be enforceable by each of the parties hereto and their respective successors and assigns.
(e) If any provision of this Agreement shall be determined by a court of competent jurisdiction to be invalid or unenforceable, such determination shall not affect the remaining provisions of this Agreement, all of which shall remain in full force and effect.
(f) This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument.
(g) The headings in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Service Agreement as of the date first above written.
Signed this 5th day of July 2022.
| /s/ Shlomo Pilo | /s/ Yehuda Eliya | |
| COMPANY | Director | |
| by: SHLOMO PILO, CEO | by: Yehuda Eliya |
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Exhibit 16.1
July 7, 2022
Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549 - 7561
Dear Sirs/Madams:
We have read Item 4.01 of Raphael Pharmaceutical Inc.’s Form 8-K dated July 7, 2022, and are in agreement with the statements contained in Item 4.01.(a).
We have no basis to agree or disagree with other statements of the registrant contained therein.
| /s/ Brightman Almagor Zohar & Co. | |
| Brightman Almagor Zohar & Co. Certified Public Accountants A Firm in the Deloitte Global Network |
| Tel Aviv, Israel | |
| July 7, 2022 |