ITEM
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The
table below contains information regarding our current directors and executive officers as of April 30, 2019:
Name
|
|
Age
|
|
Position
|
Non-Employee
Directors
|
|
|
|
|
Dr.
Stanley Hirsch
|
|
62
|
|
Chairman
of the Board and Director
|
|
|
|
|
|
Executive
Officers
|
|
|
|
|
Mordechai
Bignitz
|
|
68
|
|
Chief
Executive Officer and Director
|
Sigal
Russo
|
|
41
|
|
Chief
Financial Officer
|
Dr.
Yehuda Baruch
|
|
62
|
|
Chief
Medical and Regulatory Affairs Officer of One World Cannabis Ltd.
|
Alon
Sinai
|
|
52
|
|
Chief
Operating Officer of One World Cannabis Ltd.
|
Dr.
Oron Yacoby Zeevi
|
|
58
|
|
Chief
Scientific Officer of One World Cannabis Ltd.
|
Non-Employee
Director
Dr.
Stanley Hirsch
,
Chairman of the Board and Director:
Dr. Hirsch was appointed as Chairman of the Board on July 24, 2017.
He has extensive executive and board level experience for more than the past 25 years in private and publicly listed companies
in biopharmaceutical and agricultural biotech industries, among others, including direct experience in raising capital and leading
M&A activity together with multi-cultural management skills, having managed companies in Israel, Brazil, UK, China and the
United States. From May 2016 to the present, Dr. Hirsch has served as Chairman of the Board of Directors of Foamix Pharmaceuticals
Ltd. (NASDAQ: FOMX), an Israeli-based clinical-stage specialty pharmaceutical company in late-stage clinical development and commercializing
two proprietary products for the treatment of acne, rosacea and other skin conditions. Foamix collaborates with leading global
pharmaceutical companies in the creation and commercialization of its advanced skin treatment products. From August 2007 to the
present, Dr. Hirsch has served as Group CEO of FuturaGene Limited and its predecessor company, FuturaGene Plc, which was listed
on the AIM-London Stock Exchange, prior to acquisition by Suzano Pulp and Paper of Brazil (SUZB, BOVESPA, Sao Paulo) in July 2010.
FuturaGene Limited is a world leader in the development of environmentally friendly solutions that improve and protect crop yields,
engaged in the development and delivery of sustainable genetic solutions for global forestry, biopower, biofuels, and agricultural
markets. Dr. Hirsch’s educational experience includes a D.Phil in Cell Biology and Immunology from Oxford University, UK,
in 1982, a B.Sc. degree with honors in Medical Biochemistry from the University of Capetown, South Africa in 1979, among other
academic honors and awards from Oxford University and University of Capetown. Dr. Hirsch was selected to serve as our Chairman
of the Board and a Director because he has extensive leadership experience with other major corporations.
Executive
Officers
Mordechai
Bignitz, Chief Executive Officer and Director
: Mr. Bignitz was appointed Chief Executive Officer in July 2014 and to the Board
of Directors and Chairman in September 2014. He resigned as Chairman with the appointment of Dr. Stanley Hirsch as Chairman on
July 24, 2017. He has over 30 years of experience in investment banking specializing in all aspects of the planning, negotiation
and execution of both domestic and international transactions. He also has extensive experience in investment management, financial
systems, accounting and taxation. From 2006 to 2015 and from 2017 Mr. Bignitz served as the chairman of the investment committee
of Migdal Capital Trust Ltd. From 2009 to 2011 Mr. Bignitz served as the chief executive officer of Gefen Energies Ltd., a private
Israeli Company. During the past five years, he has served as a director of the following public companies: Arad Investment &
Industrial Development Ltd since February 2014, traded on the Tel-Aviv Stock Exchange (“TASE”); Globe Exploration
Limited Partnership since July 2013, traded on the TASE; Ellomay Capital Limited since 2011, engaged in investments in energy
and infrastructures and traded on the NASDAQ and TASE; Israel Financial Levers Ltd, since 2007 to 2016, engaged in the real estate
business and traded on the TASE; and Ablon Group Ltd from 2010 to 2013, engaged in the real estate business and traded on the
London Stock Exchange. Mr. Bignitz holds a B.A. degree in Economics and Accounting from the Tel Aviv University, Israel in 1982
and received his degree as a Certified Public Accountant in Israel in 1984. The Company believes that Mr. Bignitz’s many
years of experience as a senior executive officer and director of several successful public companies in a variety in industries,
all of which have had greater resources and operating history than the Company, renders him qualified to serve on the Board of
Directors.
Sigal
Russo
,
Chief Financial Officer
: Ms. Russo is a Certified Public Accountant licensed in Israel. Most recently, from
September 2008 to June 2018, Ms. Russo served as Senior Director of Finance of Rosetta Genomics Ltd. (NASDAQ: ROSG), a molecular
diagnostics company, where she was responsible for all aspects of Rosetta Genomics’ finances, and reported to the chief
financial officer. Ms. Russo served in various roles at Rosetta Genomics since 2008. Prior to her tenure at Rosetta Genomics,
Ms. Russo was an audit manager at Ernst & Young in Israel, specializing in audits of companies from various fields, both publicly
traded and privately owned American and Israeli entities, from 2004 to 2008. Ms. Russo holds a BA in Economics and Accounting,
from the Ruppin Academic College.
Dr.
Oron Yacoby Zeevi, Chief Scientific Officer of One World Cannabis Ltd.
: Dr. Yacoby Zeevi has served as our Chief Scientific
Officer since February 2018 and has more than 20 years of extensive scientific experience with both private and publicly listed
companies in the biopharmaceutical industry. In 2008, Dr. Yacoby Zeevi joined Neuroderm Ltd (Nasdaq: NDRM), a clinical-stage pharmaceutical
company developing next-generation treatments for central nervous system (CNS) disorders as the Vice President of Research and
Development. From October 2016 until her recent departure in January 2018, she served as Chief Scientific Officer of Neuroderm,
which was sold to Mitsubishi Tanabe Pharma for US $1.1 billion in July 2017. Dr. Yacoby Zeevi, is the inventor of over 50 issued
patents and patents pending. Her expertise lies in industry-oriented innovation and scientific research, accelerating and orchestrating
the evolution of new ideas through R&D PoC, IP, CMC, early efficacy and safety trials, regulatory affairs and market landscape
mapping in fields of unmet medical needs, towards development of commercially viable pharmaceutical or agricultural products.
Dr. Yacobi Zeevi earned her Ph.D. in micro biology and immunology from the Ben Gurion University of Be’er Sheva, Israel
and also holds a degree of Doctor in Veterinary Medicine from the Hebrew University of Jerusalem.
Alon
Sinai, Chief Operating Officer of One World Cannabis Ltd.
: Mr. Sinai has served with our subsidiary since July 1, 2014 and
has served as our Chief Operating Officer since then. He serves as our liaison with the major Israeli medical institutions in
negotiating our collaboration agreements. He is a retired Lieutenant-Colonel who served in the Medical Corps of IDF from 1987
to 2013. Mr. Sinai successfully completed the NATO School Oberammergau Program, NATO’s individual training and education
facility at the operational level. Mr. Sinai recently served as Head of the Doctrine, Instruction and Training Department of the
IDF, where he was responsible for commanding and developing emergency medical facilities, writing professional doctrine and literature
for the IDF Medical Corps and working with foreign militaries. Mr. Sinai is currently pursuing his Ph.D. in Health Systems Management
at Ben-Gurion University of the Negev, where he previously earned an MA in Health Systems Management and a B.EMS in Emergency
Medicine.
Dr.
Yehuda Baruch, Chief Medical Officer and Regulatory Affairs Officer of One World Cannabis Ltd.
: Dr. Baruch has been employed
with our subsidiary since January 2015 and has served as our Chief Medical Officer and Regulatory Affairs Officer since then.
Dr. Baruch served as Head of the Israeli Ministry of Health’s Medical Marijuana Program from 2001 through 2012, directing
its efforts on regulation, chaired the indication committee, secured Helsinki Approvals for medical research, and managed regulation
of patient licensing and dosage. Dr. Baruch has extensive experience in researching medical cannabis, most notably for its effect
on PTSD. From 2004 until December 2014, Dr. Baruch also served as CEO of Abarbanel Mental Health Center in Bat Yam, Israel,
prior to which, he was the director of Israel’s Ministry of Health medical management division, and director general of
Be’er Yakov Mental Health Center. He has taught at Ben-Gurion University of the Negev and Tel Aviv University’s Sackler
School of Medicine. As Colonel in the Israeli Defense Force’s Medical Corps, Dr. Baruch was the director of the Israeli
field hospital in India following the 2001 earthquake and was the director of the joint USA-Israel Mental Health Team operation
in Sri Lanka following the 2004 tsunami. Dr. Baruch was the director of the Health Administration Division in the Israel Ministry
of Health for five years from 1999 to 2004 and for the past 10 years has been the director of Abarbanel Mental Health Center and
lecturer at Ben Gurion and Bar Ilan Universities. Dr. Yehuda Baruch has a MD and MHA both from Tel Aviv University.
Committees
of our Board of Directors
Audit
Committee and Financial Expert
The
audit committee of our Board of Directors was established by our Board of Directors in accordance with Section 3(a)(58)(A) of
the Exchange Act to oversee our corporate accounting and financial reporting processes and audits of our financial statements.
Our audit committee is currently composed of Mr. Stanley Hirsch, who serves as chairman. None of the members of our audit committee
satisfy the current independence standards promulgated by the Securities and Exchange Commission and by The Nasdaq Stock Market,
as such standards apply specifically to members of audit committees. Our Board of Directors has also determined that Mr. Mordechai
Bignitz qualifies as an “audit committee financial expert,” as the Securities and Exchange Commission has defined
that term in Item 407 of Regulation S-K. A copy of the audit committee’s written charter is publicly available on
our website at www.owcpharma.com.
Family
Relationships
There
are no family relationships between any of our directors and our executive officers.
Board
Leadership Structure
The
Board of Directors has responsibility for establishing broad corporate policies and reviewing our overall performance rather than
day-to-day operations. The primary responsibility of our Board of Directors is to oversee the management of our company and, in
doing so, serve the best interests of the company and our stockholders. The Board of Directors selects, evaluates and provides
for the succession of executive officers and, subject to stockholder election, directors. It reviews and approves corporate objectives
and strategies, and evaluates significant policies and proposed major commitments of corporate resources. Our Board of Directors
also participates in decisions that have a potential major economic impact on our company. Management keeps the directors informed
of company activity through regular communication, including written reports and presentations at Board of Directors and committee
meetings.
Although
we have not adopted a formal policy on whether the Chairman and Chief Executive Officer positions should be separate or combined,
we have determined that it is in the best interest of the Company and its shareholders to separate these roles. Mr. Bignitz’s
served as a both the Chairman of our Board of Directors and our Chief Executive Officer until July 24, 2017. Dr. Stanley Hirsch
was appointed as Chairman of the Board on July 24, 2017. He has extensive executive and board level experience for more than the
past 25 years in private and publicly listed companies in biopharmaceutical and agricultural biotech industries, among others,
including direct experience in raising capital and leading M&A activity together with multi-cultural management skills, having
managed companies in Israel, Brazil, UK, China and the United States.
Our
Board of Director’s Role in Risk Oversight
The
Board assesses on an ongoing basis the risks faced by the Company. These risks include financial, technological, competitive,
and operational risks. In addition, effective October 31, 2017, we established an audit committee, which consists of Messrs.
Bignitz and Hirsch.
Director
Independence
Mr.
Hirsch is an independent director and Mr. Bignitz is not “independent” as such term is defined by the applicable listing
standards of The Nasdaq Stock Market LLC.
Code
of Ethics
On
April 15, 2019 we adopted a code of ethics that applies to our directors, officers, and employees, including our principal executive
officer, principal financial officer, principal accounting officer, or persons performing similar functions. If we make any substantive
amendments to, or grant any waivers from, the code of business conduct and ethics for any officer or director, we will disclose
the nature of such amendment or waiver on our website or in a current report on Form 8-K.
Section
16(a) Compliance
Section
16(a) of the Securities Exchange Act of 1934, as amended, requires our Directors and named Executive Officers, and anyone who
beneficially owns ten percent (10%) or more of our Common Stock, to file with the SEC initial reports of beneficial ownership
and reports of changes in beneficial ownership of Common Stock. Persons required to file such reports also need to provide us
with copies of all Section 16(a) forms they file.
Our
records reflect that all reports which were required to be filed pursuant to Section 16(a) of the Securities Exchange Act of 1934,
as amended, were filed on a timely basis, except that one report, covering one transaction, was not filed by Ms. Hannah Feuer,
a former director, and a Form 3 has was not filed by Dr. Oron Yacoby Zeevi.
ITEM
11. EXECUTIVE COMPENSATION
The
following table contains information concerning the compensation paid during each of the two years ended December 31, 2018 and
2017 to our principal executive officer for the year ended December 31, 2018, and our two other most highly compensated executive
officers for the year ended December 31, 2018 (the “Named Executive Officers”).
Name
and Principal Position
|
|
Year
|
|
|
Salary
|
|
|
Stock
Awards
|
|
|
Option
Awards
(1)
|
|
|
All
Other Compensation
|
|
|
Total
|
|
Mordechai
Bignitz,
CEO and Director
|
|
2018
|
|
|
$
|
117,000
|
|
|
|
-
|
|
|
$
|
-
|
|
|
$
|
1,000
|
(2)
|
|
$
|
118,000
|
|
|
|
2017
|
|
|
$
|
63,000
|
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
|
$
|
63,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yossi
Dagan,
Former
Chief Financial Officer
|
|
2018
|
|
|
$
|
104,000
|
|
|
|
-
|
|
|
$
|
-
|
|
|
$
|
34,000
|
(3)
|
|
$
|
138,000
|
|
|
|
2017
|
|
|
$
|
48,000
|
|
|
|
-
|
|
|
$
|
510,000
|
|
|
$
|
3,000
|
(4)
|
|
$
|
561,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dr.
Yehuda Baruch,
Chief Medical Officer
|
|
2018
|
|
|
$
|
91,000
|
|
|
|
-
|
|
|
$
|
-
|
|
|
$
|
21,000
|
(5)
|
|
$
|
112,000
|
|
and Regulatory
Affairs Officer
|
|
2017
|
|
|
$
|
68,000
|
|
|
|
-
|
|
|
$
|
-
|
|
|
$
|
16,000
|
(6)
|
|
$
|
84,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alon
Sinai,
Chief Operating Officer
|
|
2018
|
|
|
$
|
89,000
|
|
|
|
-
|
|
|
$
|
-
|
|
|
$
|
5,000
|
(7)
|
|
$
|
93,000
|
|
|
|
2017
|
|
|
$
|
63,000
|
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
|
$
|
63,000
|
|
|
(1)
|
Amounts
shown in this column consist of the aggregate grant date fair value of stock awards or options to purchase common stock that
were granted during the applicable fiscal year, computed in accordance with FASB ASC Topic 718, “Stock Compensation”.
Our methodology, including our underlying estimates and assumptions used in calculating these values, is set forth in “Notes
2L and 5F (2)” to our Financial Statements, included in our Annual Report on Form 10-K for the year ended December 31,
2018.
|
|
(2)
|
All
Other Compensation reported for Mr. Bignitz for 2018 represents a pension benefit expense of $1,000, paid by the company.
|
|
(3)
|
All
Other Compensation reported for Mr. Dagan for 2018 represents an advanced education fund of $7,000, pension benefit expense
of $13,000 and bonus of $14,000, paid by the company.
|
|
(4)
|
All
Other Compensation reported for Mr. Dagan for 2017 represents an advanced education fund of $1,000, pension benefit expense
of $2,000, paid by the company.
|
|
(5)
|
All
Other Compensation reported for Mr. Baruch for 2018 represents a pension benefit expense of $11,000 and a car lease expense
of $10,000, paid by the company.
|
|
(6)
|
All
Other Compensation reported for Mr. Baruch for 2017 a pension benefit expense of $8,000 and a car lease expense of $8,000,
paid by the company.
|
|
(7)
|
All
Other Compensation reported for Mr. Sinai for 2018 represents a pension benefit expense of $5,000, paid by the company.
|
Narrative
Disclosure to Summary Compensation Table
Mordechai
Bignitz
On
July 15, 2014, we entered into a service agreement with Mr. Bignitz pursuant to which Mr. Bignitz agreed to serve as our Chief
Executive Officer. In 2016, Mr. Bignitz’ compensation was approximately $3,000 per month. On June 1, 2017 Mr. Bignitz’s
compensation was increased to approximately $7,000 per month. Mr. Bignitz’s compensation was increased to approximately
$11,000 on May 21, 2018. On August 1, 2018, our board of directors approved changes to Mr. Bignitz’s compensation arrangement,
in which his salary was decreased to approximately $11,000 per month, and he became entitled to certain pension benefits under
Israeli law that amounted to approximately $1,000 in 2018. In addition, On December 15, 2016, the Company granted Mr. Bignitz
options to purchase 10,000,000 shares of our common stock at an exercise price of $0.05 per share. The options vested 1/3 on the
grant date, and 2/3 on a quarterly basis from the grant date for a period of two years. Mr. Bignitz is entitled to a 60-day early
notice period upon termination of his employment agreement.
Dr.
Yehuda Baruch
Dr.
Baruch was appointed Chief Science Officer on November 2, 2016 and effective February 18, 2018 was appointed as Chief Medical
and Regulatory Affairs Officer. Prior to his appointment, Dr. Baruch served as Director of Research and Regulatory Affairs since
July 15, 2014. In 2016, Dr. Baruch’s compensation was initially determined to be approximately $3,000 per month. On June
1, 2017, Dr. Baruch’s compensation was increased to approximately $7,000 per month. Dr. Baruch is entitled to certain pension
benefits under Israeli law that amounted to approximately $11,000 in 2018. In addition, we paid costs of $10,000 in 2018, for
Dr. Baruch’s use of an automobile. On December 15, 2016, the Company granted Dr. Baruch options to purchase 7,000,000 shares
of our common stock at an exercise price of $0.05 per share. The options vested 1/3 on the grant date, and 2/3 on a quarterly
basis from the grant date for a period of two years. Dr. Baruch is entitled to a 60-day early notice period upon termination of
his employment agreement.
Alon
Sinai
Mr.
Sinai was appointed Chief Operating Officer on July 1, 2014. In 2016, Mr. Sinai’s compensation was determined to be approximately
$3,000 per month. On June 1, 2017 Mr. Sinai’s compensation was increased to approximately $7,000 per month. On February
1, 2018 Mr. Sinai signed an employment agreement with the company, with a salary of approximately $7,000 per month. Mr. Sinai
is entitled to certain pension benefits under Israeli law that amounted to approximately $5,000 in 2018. In addition, On December
15, 2016, the Company granted Mr. Sinai options to purchase 7,000,000 shares of our common stock at an exercise price of $0.05
per share. The options vested 1/3 on the grant date, and 2/3 on a quarterly basis from the grant date for a period of two years.
Mr. Sinai is entitled to a 30-day period upon termination of his agreement.
Yossi
Dagan
On
June 24, 2017 we entered into an employment agreement with Yossi Dagan to serve as our Chief Financial Officer. Mr. Dagan was
entitled to a monthly gross base salary of approximately $7,000 and social benefits including (i) certain pension benefits under
Israeli law that amounted to approximately $14,000 in 2018 and $2,000 in 2017, (ii) advanced study fund that amounted to $7,000
in 2018 and $1,000 in 2017. In addition, Mr. Dagan was entitled to expense reimbursement of approximately $100 per month and cellular
phone expense reimbursement. On April 1, 2018, Mr. Dagan’s scope of employment was decreased from full time shift to 60%.
On July 1, 2018, Mr. Dagan’s compensation was increased to approximately $8,000 per month. On May 25, 2018 Mr. Dagan received
a one- time bonus in the amount of $13,000. Mr. Dagan has been granted options to purchase 1,500,000 shares of our common stock
at an exercise price of $0.05 per share. The options vested 1/3 on the first anniversary and the remaining 2/3 on a quarterly
basis. Upon continuance of Mr. Dagan’s employment, all options should become fully vested by the second anniversary of the
commencement date. Mr. Dagan is entitled to a 90-day early notice period upon termination of the employment agreement. On February
1, 2019, Mr. Dagan resigned from his role as our Chief Financial Officer.
Outstanding
Equity Awards at Fiscal Year-End
The
following table shows all outstanding grants of stock options as of December 31, 2018 to each of the executive officers named
in the Summary Compensation Table. There were no grants of unvested stock awards outstanding as of December 31, 2018. Exercise
prices shown are rounded to the nearest whole cent.
|
|
Option
Awards
|
|
Name
|
|
Number
of Securities Underlying Unexercised Options (#) Exercisable
|
|
|
Number
of Securities Underlying Unexercised Options (#) Unexercisable
|
|
|
Option
Exercise Price ($)
|
|
|
Option
Expiration
Date
|
|
Mordechai Bignitz(1)
|
|
|
10,000,000
|
|
|
|
-
|
|
|
|
0.05
|
|
|
|
December
14, 2026
|
|
Yehuda Baruch(2)
|
|
|
7,000,000
|
|
|
|
-
|
|
|
|
0.05
|
|
|
|
December
14, 2026
|
|
Alon Sinai(3)
|
|
|
7,000,000
|
|
|
|
-
|
|
|
|
0.05
|
|
|
|
December
14, 2026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yossi Dagan(4)
|
|
|
625,000
|
|
|
|
875,000
|
|
|
|
0.05
|
|
|
|
May
1, 2019
|
|
(1)
|
Mr.
Bignitz was awarded an option to purchase 10,000,000 shares of common stock on December 15, 2016. The options vested 1/3 on
the grant date, and 2/3 on a quarterly basis from the grant date for a period of two years, provided that at the relevant
vesting dates the executive continues his service to the Company.
|
(2)
|
Dr.
Baruch was awarded an option to purchase 7,000,000 shares of common stock on December 15, 2016. The options vested 1/3 on
the grant date, and 2/3 on a quarterly basis from the grant date for a period of two years, provided that at the relevant
vesting dates the executive continues his service to the Company.
|
(3)
|
Mr.
Sinai was awarded an option to purchase 7,000,000 shares of common stock on December 15, 2016. The options vested 1/3 on the
grant date, and 2/3 on a quarterly basis from the grant date for a period of two years, provided that at the relevant vesting
dates the executive continues his service to the Company.
|
(4)
|
Mr.
Dagan was awarded an option to purchase 1,500,000 shares of common stock on August 1,
2017. The options vested 1/3 on the first anniversary, and 2/3 on a quarterly basis from
the grant date for a period of two years, provided that at the relevant vesting dates
the executive continues his service to the Company. On February 1, 2019, Mr. Dagan resigned
from his role as our Chief Financial Officer.
|
Option
Exercises and Stock Vested in 2018
There
were not any exercises of options to purchase our common stock or vesting of stock awards held by each executive officer named
in the Summary Compensation Table during the fiscal year ended December 31, 2018.
Potential
Payments upon Termination or resignation of employment or Change in Control
Mordechai
Bignitz
Upon
Termination or resignation of employment, Mr. Bignitz will be entitled to get paid for his accrued vacation days, in an amount
of $1,000. Mr. Bignitz is not entitled to any compensation upon a change in control of the Company.
Dr.
Yehuda Baruch
Upon
Termination or resignation of employment, Dr. Baruch will be entitled to get paid for his accrued vacation days, in an amount
of $21,000. Dr. Baruch is not entitled to any compensation upon a change in control of the Company.
Alon
Sinai
Upon
Termination or resignation of employment, Mr. Sinai will be entitled to get paid for his accrued vacation days, in an amount of
$7,000. Mr. Sinai is not entitled to any compensation upon a change in control of the Company.
Yossi
Dagan
Upon
his resignation, Mr. Dagan, was paid $12,000 for his accrued vacation days.
Director
Compensation
The
following table shows the total compensation paid or accrued during the fiscal year ended December 31, 2018 to each of our non-employee
directors. Directors who are employed by us are not compensated for their service on our Board of Directors.
Name
|
|
Fees
Earned or Paid in Cash
|
|
|
Stock
Awards
|
|
|
Option
Awards
(1)
|
|
|
All
Other Compensation
|
|
|
Total
|
|
Dr. Stanley Hirsch (2)
|
|
$
|
83,000
|
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
|
$
|
83,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ms. Hannah Feuer (3)
|
|
$
|
8,000
|
|
|
|
-
|
|
|
$
|
63,000
|
|
|
|
-
|
|
|
$
|
8,000
|
|
(1)
|
These
amounts represent the aggregate grant date fair value of options granted to each director in 2018 computed in accordance with
FASB ASC Topic 718. A discussion of the assumptions used in determining grant date fair value may be found in Note 2L and
5f (2) to our Financial Statements, included in our Annual Report on Form 10-K for the year ended 2018.
|
|
|
(2)
|
On
July 24, 2017, we entered into a consulting agreement with Dr. Stanley Hirsch, our Chairman of the Board. Pursuant to his
consulting agreement, Mr. Hirsch is entitled to a monthly payment of approximately $7,000. In addition, on July 24, 2017,
Mr. Hirsch was granted options to purchase 1,500,000 shares of our common stock at an exercise price of $0.05 per share, which
options vested 1/3 on the grant date, 1/3 on the first anniversary and the remaining 2/3 on a quarterly basis (8.33% per quarter).
Dr. Hirsch is entitled to an early notice of 60 days upon termination of the consulting agreement.
|
|
|
(3)
|
On
October 31, 2017, Ms. Hannah Feuer was appointed to serve as our audit committee
Chairperson. Ms. Feuer was entitled to a compensation of $950 for attendance at meetings
of our Board of Directors; (ii) $560 for telephonic participation at meetings of our
Board of Directors; (iii) $470 for execution of resolutions of our Board of Directors.
In addition, on February 12, 2018, Ms. Feuer was granted options to purchase 150,000
shares of our common stock at an exercise price of $0.05 per share. The options vested
1/3 on the first anniversary and the remaining 2/3 on a quarterly basis.
On
August 20, 2018, Ms. Feuer resigned from her position and all the stock options have
therefore been forfeited and no expense was recognized.
|
Equity
Compensation Plan Information
As
of December 31, 2018, we had one equity compensation plan in place under which shares of our common stock were authorized for
issuance:
Plan
Category
|
|
Number
of securities to be issued upon exercise of outstanding options, warrants and rights
|
|
|
Weighted
average exercise price of outstanding options, warrants and rights
|
|
|
Number
of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column
(a))
|
|
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
Equity compensation plans
approved by security holders(1)
|
|
|
27,250,000
|
|
|
$
|
0.05
|
|
|
|
8,456,094
|
|
Equity compensation
plans not approved by security holders
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
27,250,000
|
|
|
$
|
0.05
|
|
|
|
8,456,094
|
|
|
(1)
|
Consists
of the 2016 Amended and Restated Employees Share Option Plan
|
ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The
table below provides information regarding the beneficial ownership of the common stock as of April 15, 2019, of (1) each person
or entity known to us who owns beneficially 5% or more of the shares of our outstanding common stock, (2) each of our directors,
(3) each of the Named Executive Officers, and (4) all of our current directors and officers as a group. Applicable percentages
are based on 187,020,957 shares outstanding on April 15, 2019, adjusted as required by rules promulgated by the SEC. Beneficial
ownership is determined under SEC rules and includes sole or shared power to vote or dispose of shares of our common stock. The
number and percentage of shares beneficially owned by a person or entity also include shares of common stock subject to stock
options that are currently exercisable or become exercisable within 60 days of April 15, 2019. However, these shares are not deemed
to be outstanding for the purpose of computing the percentage of shares beneficially owned of any other person or entity. Except
as indicated in footnotes to the table below or, where applicable, to the extent authority is shared by spouses under community
property laws, the beneficial owners named in the table have, to our knowledge, sole voting and dispositive power with respect
to all shares of common stock shown to be beneficially owned by them based on information provided to us by such stockholders
Unless otherwise indicated below, the address for each beneficial owner listed is c/o OWC Pharmaceutical Research Corp., at 2
Ben Gurion Street, P.O. Box 73, Ramat Gan, 5257334, Israel.
|
|
Shares
Beneficially Owned
|
|
|
|
Number
|
|
|
Percent
|
|
Name and Address of Beneficial Owner**
|
|
|
|
|
|
|
Directors and Named Executive Officers:
|
|
|
|
|
|
|
|
|
Mordechai Bignitz
(2)
|
|
|
10,000,000
|
|
|
|
5.1
|
%
|
Dr. Stanley Hirsch
(3)
|
|
|
1,250,000
|
|
|
|
*
|
|
Alon Sinai
(4)
|
|
|
7,000,000
|
|
|
|
3.6
|
%
|
Dr. Yehuda Baruch
(5)
|
|
|
9,120,000
|
|
|
|
4.7
|
%
|
Yossi
Dagan
(6)
|
|
|
750,000
|
|
|
|
*
|
|
All directors and current executive officers
as a group (7 persons)
(7)
|
|
|
28,620,000
|
|
|
|
13.48
|
%
|
*
Less than one percent
(1)
Includes shares of common stock that may be acquired upon exercise of options, warrants and other rights exercisable within 60
days of April 15, 2019.
(2)
Consists of 10,000,000 shares of our common stock issuable upon the exercise of options to purchase our common stock within 60
days of April 15, 2019.
(3)
Consists of 1,250,000 shares of our common stock issuable upon the exercise of options to purchase our common stock within 60
days of April 15, 2019.
(4)
Consists of 7,000,000 shares of our common stock issuable upon the exercise of options to purchase our common stock within 60
days of April 15, 2019.
(5)
Includes 2,120,000 shares of our common stock, 7,000,000 shares of our common stock issuable upon the exercise of options to purchase
our common stock within 60 days of April 15, 2019.
(6)
Consist of 750,000 shares of our common stock issuable upon the exercise of options to purchase our common stock within 60 days
of April 15, 2019.
(7)
See footnotes (2) to (5).
ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTORS INDEPENDENCE
Other
than the compensation paid to our executive officers or as disclosed below, since January 1, 2017, there have been no transactions,
or proposed transactions, which have materially affected or will materially affect us in which any director, executive officer
of the Company or executive officer of our subsidiary, or beneficial holder of more than 5% of the outstanding common stock, or
any of their respective relatives, spouses, associates or affiliates, has had or will have any direct or material indirect interest.
We have no policy regarding entering into transactions with affiliated parties.
ITEM
14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Current
Independent Registered Public Accounting Firm Fees
The
following table presents fees for professional audit services rendered by Fahn Kanne & Co Grant Thornton Israel for
the audit of the Company’s annual financial statements for the years ended December 31, 2018 and 2017
and
fees billed for other services rendered by
Fahn Kanne
during those periods
.
|
|
Year Ended
|
|
|
Year Ended
|
|
|
|
December
31, 2018
|
|
|
December
31, 2017
|
|
Audit Fees (1)
|
|
$
|
55,000
|
|
|
$
|
16,649
|
|
Audit Related Fees (2)
|
|
|
-
|
|
|
|
-
|
|
Tax Fees (3)
|
|
|
-
|
|
|
|
-
|
|
All Other Fees (4)
|
|
|
58,320
|
|
|
|
-
|
|
Total
|
|
$
|
113,320
|
|
|
$
|
16,649
|
|
(1)
Audit fees consist of fees for professional services rendered for the audit of our financial statements, review of interim financial
statements and assistance with our periodic reports on Form 10-K and 10-Q filed with the SEC.
(2)
Audit related fees consisted principally of fees related to the annual audit and the quarterly reviews, but outside the scope
of the audit committee approved audit and agreed upon procedures.
(3)
Tax fees consist principally of assistance with matters related to tax compliance and reporting, tax advice, and tax planning.
(4)
All other fees consisted principally of costs related to SEC investigation.
As
of December 31, 2018, we did not have a formal, documented pre-approval policy for the fees of the principal accountant. Following
the establishment of our audit committee on October 31, 2017, our audit committee reviews and approves all fees
to our principal accountant.