EX-99.1 2 tm2026686-1_ex99x1.htm EXHIBIT 99.1 tm2026686-1_6k_DIV_199-ex99x1 - none - 4.73651s
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Exhibit 99.1​
ITAMAR MEDICAL LTD.
INDEX TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
​ ​ ​
Page
​
Interim Unaudited Consolidated Financial Statements as of September 30, 2020 and for the Three and Nine Months Ended September 30, 2020 and 2019
​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ F-2 ​ ​
​ ​ ​ ​ F-3 ​ ​
​ ​ ​ ​ F-4 ​ ​
​ ​ ​ ​ F-5 ​ ​
​ ​ ​ ​ F-6 ​ ​
​ ​ ​ ​ F-7 ​ ​
 
F-1
​​
 
ITAMAR MEDICAL LTD.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
(UNAUDITED)
​ ​ ​
September 30,
2020
​ ​
December 31,
2019
​
​ ​ ​
U.S. dollars in thousands
​
Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Current assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Cash and cash equivalents
​ ​ ​ $ 25,153 ​ ​ ​ ​ $ 15,115 ​ ​
Short-term bank deposits
​ ​ ​ ​ 16,000 ​ ​ ​ ​ ​ — ​ ​
Trade receivables
​ ​ ​ ​ 8,363 ​ ​ ​ ​ ​ 8,384 ​ ​
Other receivables
​ ​ ​ ​ 1,944 ​ ​ ​ ​ ​ 1,404 ​ ​
Inventories
​ ​ ​ ​ 6,476 ​ ​ ​ ​ ​ 3,363 ​ ​
Total current assets
​ ​ ​ ​ 57,936 ​ ​ ​ ​ ​ 28,266 ​ ​
Non-current assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Long-term restricted deposits and prepaid expenses
​ ​ ​ ​ 531 ​ ​ ​ ​ ​ 476 ​ ​
Long-term trade receivables
​ ​ ​ ​ 381 ​ ​ ​ ​ ​ 156 ​ ​
Property and equipment
​ ​ ​ ​ 2,625 ​ ​ ​ ​ ​ 1,472 ​ ​
Intangible assets
​ ​ ​ ​ 855 ​ ​ ​ ​ ​ 395 ​ ​
Right-of-use assets
​ ​ ​ ​ 1,740 ​ ​ ​ ​ ​ 2,442 ​ ​
Total non-current assets
​ ​ ​ ​ 6,132 ​ ​ ​ ​ ​ 4,941 ​ ​
Total assets
​ ​ ​ $ 64,068 ​ ​ ​ ​ $ 33,207 ​ ​
Liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Current liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Short-term bank loan
​ ​ ​ $ 5,000 ​ ​ ​ ​ $ 5,000 ​ ​
Current maturities of lease liabilities
​ ​ ​ ​ 786 ​ ​ ​ ​ ​ 890 ​ ​
Trade payables
​ ​ ​ ​ 3,389 ​ ​ ​ ​ ​ 2,028 ​ ​
Other accounts payable
​ ​ ​ ​ 3,513 ​ ​ ​ ​ ​ 3,455 ​ ​
Accrued expenses
​ ​ ​ ​ 1,682 ​ ​ ​ ​ ​ 1,317 ​ ​
Provisions
​ ​ ​ ​ 383 ​ ​ ​ ​ ​ 273 ​ ​
Short-term employee benefits
​ ​ ​ ​ 657 ​ ​ ​ ​ ​ 352 ​ ​
Total current liabilities
​ ​ ​ ​ 15,410 ​ ​ ​ ​ ​ 13,315 ​ ​
Non-current liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Lease liabilities, net of current maturities
​ ​ ​ ​ 1,144 ​ ​ ​ ​ ​ 1,708 ​ ​
Recognized liability for defined benefit plan, net
​ ​ ​ ​ 216 ​ ​ ​ ​ ​ 260 ​ ​
Other long-term liabilities
​ ​ ​ ​ 1,262 ​ ​ ​ ​ ​ 1,260 ​ ​
Total non-current liabilities
​ ​ ​ ​ 2,622 ​ ​ ​ ​ ​ 3,228 ​ ​
Total liabilities
​ ​ ​ ​ 18,032 ​ ​ ​ ​ ​ 16,543 ​ ​
Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Ordinary share capital
​ ​ ​ ​ 1,136 ​ ​ ​ ​ ​ 878 ​ ​
Additional paid-in capital
​ ​ ​ ​ 161,456 ​ ​ ​ ​ ​ 125,435 ​ ​
Accumulated deficit
​ ​ ​ ​ (116,556) ​ ​ ​ ​ ​ (109,649) ​ ​
Total equity
​ ​ ​ ​ 46,036 ​ ​ ​ ​ ​ 16,664 ​ ​
Total liabilities and equity
​ ​ ​ $ 64,068 ​ ​ ​ ​ $ 33,207 ​ ​
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
F-2
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ITAMAR MEDICAL LTD.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS
(UNAUDITED)
​ ​ ​
Three Months Ended
September 30,
​ ​
Nine Months Ended
September 30,
​
​ ​ ​
2020
​ ​
2019
​ ​
2020
​ ​
2019
​
​ ​ ​
U.S. dollars in thousands (except per share data)
​
Revenues
​ ​ ​ $ 10,999 ​ ​ ​ ​ $ 8,084 ​ ​ ​ ​ $ 28,262 ​ ​ ​ ​ $ 21,493 ​ ​
Cost of revenues
​ ​ ​ ​ 3,471 ​ ​ ​ ​ ​ 1,840 ​ ​ ​ ​ ​ 8,390 ​ ​ ​ ​ ​ 4,869 ​ ​
Gross profit
​ ​ ​ ​ 7,528 ​ ​ ​ ​ ​ 6,244 ​ ​ ​ ​ ​ 19,872 ​ ​ ​ ​ ​ 16,624 ​ ​
Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Selling and marketing
​ ​ ​ ​ 6,240 ​ ​ ​ ​ ​ 4,717 ​ ​ ​ ​ ​ 17,446 ​ ​ ​ ​ ​ 12,985 ​ ​
Research and development
​ ​ ​ ​ 1,385 ​ ​ ​ ​ ​ 1,095 ​ ​ ​ ​ ​ 4,064 ​ ​ ​ ​ ​ 3,165 ​ ​
General and administrative
​ ​ ​ ​ 2,417 ​ ​ ​ ​ ​ 1,411 ​ ​ ​ ​ ​ 6,051 ​ ​ ​ ​ ​ 4,491 ​ ​
Total operating expenses
​ ​ ​ ​ 10,042 ​ ​ ​ ​ ​ 7,223 ​ ​ ​ ​ ​ 27,561 ​ ​ ​ ​ ​ 20,641 ​ ​
Operating loss
​ ​ ​ ​ (2,514) ​ ​ ​ ​ ​ (979) ​ ​ ​ ​ ​ (7,689) ​ ​ ​ ​ ​ (4,017) ​ ​
Financial income (expenses): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Financial income
​ ​ ​ ​ 143 ​ ​ ​ ​ ​ 143 ​ ​ ​ ​ ​ 530 ​ ​ ​ ​ ​ 336 ​ ​
Financial expenses
​ ​ ​ ​ (293) ​ ​ ​ ​ ​ (299) ​ ​ ​ ​ ​ (693) ​ ​ ​ ​ ​ (895) ​ ​
Gain from derivative instruments, net
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 442 ​ ​
Financial expenses, net
​ ​ ​ ​ (150) ​ ​ ​ ​ ​ (156) ​ ​ ​ ​ ​ (163) ​ ​ ​ ​ ​ (117) ​ ​
Loss before taxes on income
​ ​ ​ ​ (2,664) ​ ​ ​ ​ ​ (1,135) ​ ​ ​ ​ ​ (7,852) ​ ​ ​ ​ ​ (4,134) ​ ​
Taxes on Income
​ ​ ​ ​ (95) ​ ​ ​ ​ ​ (12) ​ ​ ​ ​ ​ (147) ​ ​ ​ ​ ​ (135) ​ ​
Net loss
​ ​ ​ $ (2,759) ​ ​ ​ ​ $ (1,147) ​ ​ ​ ​ $ (7,999) ​ ​ ​ ​ $ (4,269) ​ ​
Loss per share – basic and diluted (in U.S. dollars)
​ ​ ​ $ (0.01) ​ ​ ​ ​ $ (0.00) ​ ​ ​ ​ $ (0.02) ​ ​ ​ ​ $ (0.01) ​ ​
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
F-3
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ITAMAR MEDICAL LTD.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE LOSS
(UNAUDITED)
​ ​ ​
Three Months Ended
September 30,
​ ​
Nine Months Ended
September 30,
​
​ ​ ​
2020
​ ​
2019
​ ​
2020
​ ​
2019
​
​ ​ ​
U.S. dollars in thousands
​
Net loss
​ ​ ​ $ (2,759) ​ ​ ​ ​ $ (1,147) ​ ​ ​ ​ $ (7,999) ​ ​ ​ ​ $ (4,269) ​ ​
Other comprehensive income items that after initial recognition
in comprehensive loss, were or will be carried to the
statement of operations:
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Actuarial gains of defined benefit plan, net of tax
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 49 ​ ​ ​ ​ ​ — ​ ​
Total other comprehensive income items that after initial recognition in comprehensive loss, were or will be carried to the statement of operations, net of tax
​ ​ ​
​
—
 ​ ​ ​ ​
​
—
 ​ ​ ​ ​
​
49
 ​ ​ ​ ​
​
—
 ​ ​
Other total comprehensive income
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 49 ​ ​ ​ ​ ​ — ​ ​
Total comprehensive loss
​ ​ ​ $ (2,759) ​ ​ ​ ​ $ (1,147) ​ ​ ​ ​ $ (7,950) ​ ​ ​ ​ $ (4,269) ​ ​
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
F-4
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ITAMAR MEDICAL LTD.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY
(UNAUDITED)
​ ​ ​
Ordinary
Share
capital
​ ​
Additional
paid-in
capital
​ ​
Accumulated
deficit
​ ​
Total
​
​ ​ ​
U.S. dollars in thousands
​
For the nine months ended September 30, 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Balance as of January 1, 2020
​ ​ ​ $ 878 ​ ​ ​ ​ $ 125,435 ​ ​ ​ ​ $ (109,649) ​ ​ ​ ​ $ 16,664 ​ ​
Total comprehensive loss: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Net loss
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (7,999) ​ ​ ​ ​ ​ (7,999) ​ ​
Other comprehensive income, net of tax
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 49 ​ ​ ​ ​ ​ 49 ​ ​
Total comprehensive loss
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (7,950) ​ ​ ​ ​ ​ (7,950) ​ ​
Transactions carried directly to equity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Issuance of shares due to the exercise of stock options
​ ​ ​ ​ 3 ​ ​ ​ ​ ​ 129 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 132 ​ ​
Issuance of shares in a public offering, net of issuance costs of
$4,103 thousand
​ ​ ​ ​ 255 ​ ​ ​ ​ ​ 35,892 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 36,147 ​ ​
Share-based payment
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,043 ​ ​ ​ ​ ​ 1,043 ​ ​
Balance as of September 30, 2020
​ ​ ​ $ 1,136 ​ ​ ​ ​ $ 161,456 ​ ​ ​ ​ $ (116,556) ​ ​ ​ ​ $ 46,036 ​ ​
For the nine months ended September 30, 2019 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Balance as of January 1, 2019
​ ​ ​ $ 748 ​ ​ ​ ​ $ 111,486 ​ ​ ​ ​ $ (105,546) ​ ​ ​ ​ $ 6,688 ​ ​
Total comprehensive loss: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Net loss – total comprehensive loss
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (4,269) ​ ​ ​ ​ ​ (4,269) ​ ​
Transactions carried directly to equity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Issuance of shares due to the exercise of stock options
​ ​ ​ ​ 1 ​ ​ ​ ​ ​ 24 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 25 ​ ​
Issuance of shares in a private offering, net of share issuance costs of $716 thousand
​ ​ ​ ​ 125 ​ ​ ​ ​ ​ 13,841 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 13,966 ​ ​
Share-based payment
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 886 ​ ​ ​ ​ ​ 886 ​ ​
Balance as of September 30, 2019
​ ​ ​ $ 874 ​ ​ ​ ​ $ 125,351 ​ ​ ​ ​ $ (108,929) ​ ​ ​ ​ $ 17,296 ​ ​
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
F-5
​​
 
ITAMAR MEDICAL LTD.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
(UNAUDITED)
​ ​ ​
Nine Months Ended
September 30,
​
​ ​ ​
2020
​ ​
2019
​
​ ​ ​
U.S. dollars in thousands)
​
Cash flows from operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Net loss
​ ​ ​ $ (7,999) ​ ​ ​ ​ $ (4,269) ​ ​
Adjustments for: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Depreciation and amortization
​ ​ ​ ​ 1,345 ​ ​ ​ ​ ​ 1,059 ​ ​
Share-based payment
​ ​ ​ ​ 1,043 ​ ​ ​ ​ ​ 886 ​ ​
Change in provision for doubtful and bad debt
​ ​ ​ ​ 206 ​ ​ ​ ​ ​ 192 ​ ​
Net financial cost (income)
​ ​ ​ ​ (217) ​ ​ ​ ​ ​ 169 ​ ​
Gain from revaluation of derivatives
​ ​ ​ ​ — ​ ​ ​ ​ ​ (442) ​ ​
Decrease (increase) in trade receivables
​ ​ ​ ​ (411) ​ ​ ​ ​ ​ 329 ​ ​
Increase in other accounts receivable
​ ​ ​ ​ (541) ​ ​ ​ ​ ​ (249) ​ ​
Increase in inventories
​ ​ ​ ​ (3,773) ​ ​ ​ ​ ​ (1,153) ​ ​
Increase in trade payables
​ ​ ​ ​ 1,362 ​ ​ ​ ​ ​ 724 ​ ​
Increase in other accounts payable and accrued expenses
​ ​ ​ ​ 328 ​ ​ ​ ​ ​ 584 ​ ​
Increase in employee benefits
​ ​ ​ ​ 310 ​ ​ ​ ​ ​ 102 ​ ​
Increase in provisions
​ ​ ​ ​ 110 ​ ​ ​ ​ ​ 17 ​ ​
Income tax expenses
​ ​ ​ ​ 147 ​ ​ ​ ​ ​ 135 ​ ​
Taxes paid during the period
​ ​ ​ ​ (49) ​ ​ ​ ​ ​ (44) ​ ​
Net interest received (paid) during the period
​ ​ ​ ​ 83 ​ ​ ​ ​ ​ (197) ​ ​
Net cash used in operating activities
​ ​ ​ ​ (8,056) ​ ​ ​ ​ ​ (2,157) ​ ​
Cash flows from investing activities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Investment in short-term bank deposits
​ ​ ​ ​ (16,000) ​ ​ ​ ​ ​ (9,000) ​ ​
Increase in restricted long-term deposits
​ ​ ​ ​ (50) ​ ​ ​ ​ ​ (68) ​ ​
Purchase of property and equipment, intangible assets and capitalization of development expenses
​ ​ ​ ​ (1,604) ​ ​ ​ ​ ​ (406) ​ ​
Net cash used in investing activities
​ ​ ​ ​ (17,654) ​ ​ ​ ​ ​ (9,474) ​ ​
Cash flows from financing activities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Proceeds from issuance of shares, net of share issuance costs
​ ​ ​ ​ 36,147 ​ ​ ​ ​ ​ 13,966 ​ ​
Repayment of principal of lease liabilities
​ ​ ​ ​ (665) ​ ​ ​ ​ ​ (583) ​ ​
Issuance of shares due to the exercise of stock options
​ ​ ​ ​ 132 ​ ​ ​ ​ ​ 25 ​ ​
Net cash provided by financing activities
​ ​ ​ ​ 35,614 ​ ​ ​ ​ ​ 13,408 ​ ​
Increase in cash and cash equivalents
​ ​ ​ ​ 9,904 ​ ​ ​ ​ ​ 1,777 ​ ​
Cash and cash equivalents at beginning of period
​ ​ ​ ​ 15,115 ​ ​ ​ ​ ​ 6,471 ​ ​
Effect of exchange rate fluctuations on balances of cash and cash equivalents
​ ​ ​ ​ 134 ​ ​ ​ ​ ​ 178 ​ ​
Cash and cash equivalents at end of period
​ ​ ​ $ 25,153 ​ ​ ​ ​ $ 8,426 ​ ​
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
F-6
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ITAMAR MEDICAL LTD.
   
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 — GENERAL
a.   Reporting entity
Itamar Medical Ltd. (the “Company”) is a company incorporated in Israel, with registered office at 9 Halamish Street, North Industrial Zone, Caesarea, Israel. The condensed consolidated interim financial statements of the Company and its subsidiaries as of September 30, 2020 and 2019 and for each of the three and nine-month periods ended September 30, 2020 and 2019 comprise the Company and its subsidiaries (together referred to as the “Group”). The Company is a medical technology company focused on the development and commercialization of non-invasive medical devices and solutions to aid in the diagnosis of respiratory sleep disorders. The Company uses a digital healthcare platform to facilitate the continuum of care for effective sleep apnea management with a focus on the core sleep and cardiology markets. The Company offers a Total Sleep Solution (“TSS”), to help physicians provide comprehensive sleep apnea management in a variety of clinical environments to optimize patient care and reduce healthcare system costs. The ordinary shares of the Company are listed on the Tel Aviv Stock Exchange Ltd. (“TASE”). On February 27, 2019, the Company’s American Depositary Shares (“ADSs”), each of which represents 30 ordinary shares of the Company, represented by American Depositary Receipts (“ADRs”), were registered for trade on the Nasdaq Capital Market.
b.   Impact of COVID-19 on the Company’s operations
In mid-March 2020, the Company began to experience the impact of the COVID-19 pandemic amplified by the American Academy of Sleep Medicine (“AASM”) COVID-19 mitigation strategy guidance recommending the deferral of in-lab polysomnography (“PSG”) tests and special precautions for the use of reusable home sleep tests (“HSAT”) services unless using fully disposable HSAT devices, such as the Company’s WatchPAT ONE device, which meets that criteria.
The general restriction and limitation posed by the pandemic, and amplified by these specific recommendations, began to significantly impact the sleep apnea testing market and the Company’s second quarter of 2020 revenue mix, with multiuse WatchPAT tests declining in the U.S. and Europe and WatchPAT ONE, as well as WatchPAT Direct orders increasing significantly. During the third quarter of 2020, the Company recorded pre COVID-19 multiuse WatchPAT tests in the U.S. and Europe. At the same time, the trend of increasing demand to our WatchPAT ONE and WatchPAT Direct orders continued during the third quarter of 2020, as well.
NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES
a.   International Financial Reporting Standards (“IFRS”)
These condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard (“IAS”) 34, Interim Financial Reporting. Accordingly, they do not contain all the information required in full annual financial statements. These condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial Statements as of December 31, 2019 and for the year then ended (the “2019 Annual Financial Statements”).
These condensed consolidated interim financial statements were approved by the Company’s Board of Directors on November 16, 2020.
b.   Use of estimates, assumptions and judgments
The preparation of condensed consolidated interim financial statements in accordance with IFRS requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements as
 
F-7
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ITAMAR MEDICAL LTD.
   
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
well as affect the reported amounts of revenues and expenses during the period. These estimates and assumptions are reviewed on an ongoing basis using available information. Actual results could differ from these estimates and assumptions. The items subject to significant estimates and assumptions by management include share-based compensation; the measurement of financial instruments at fair value, the fair value of the embedded warrant component of convertible notes, the fair value of warrants where there is no active market.
NOTE 3 — FINANCIAL INSTRUMENTS
Financial instruments that are measured at fair value for disclosure purposes only
As of September 30, 2020, the carrying amount of the cash and cash equivalents, trade receivables, other accounts receivable, bank deposits, pledged deposits, trade payables, and other accounts payable and derivatives is identical or approximate to their fair values due to the short lifetime of these items.
NOTE 4 — CREDIT FACILITY WITH A BANK
On August 11, 2020, the Company entered into a new credit line agreement with an Israeli commercial bank (the “Bank”), which replaced the credit agreement entered on February 9, 2020, under which the total credit line to be available until June 19, 2022 (subject to meeting certain terms, as set forth in the agreement) under the credit facility will be $20 million, comprised of: (i) up to $13 million in long-term or short-term loan (the “Loan”); and (ii) up to $7 million of short-term credit facility( the “Revolving Credit Line”).
The key terms of the credit facility are as follows:
•
The first $10 million of the Loan will bear interest at the annual interest rate of the quarterly dollar LIBOR rate plus 5.3% and the remaining $3 million, if drawn, will bear annual interest of the quarterly dollar LIBOR rate plus 6.8%. The long-term loan is repayable in equal quarterly installments over three years from the date of the draw. Each short-term loan will be repayable within a period of up to 90 days.
​
•
The draw under the Revolving Credit Line can be denominated in U.S. dollar (“dollar”) or in NIS, and if denominated in dollar, bears interest at the annual interest rate of the quarterly dollar LIBOR rate plus 4.%. The amount that can be drawn under the Revolving Credit line depends on meeting a ratio of 125% between the balance of accounts receivable and the amount drawn. Each draw will be repayable within a period of up to 90 days.
​
•
The right to make any draws, whether under the Loan or the Revolving Credit Line, is conditioned upon the Company having cash balances in its account with the Bank of not less than 30% of the total amount drawn for draws of up to $10 million in the aggregate and 40% of the aggregate amount exceeding $10 million.
​
As of September 30, 2020, the Company had a total outstanding principal amount of $5.0 million out of the Revolving Credit Line. No amount was drawn under the Loan as of such date.
In order to secure its obligations to the Bank, the Company pledged and granted to the bank a first priority floating charge on all of its assets and a first priority fixed charge on (i) its intellectual property, goodwill, holdings in its subsidiaries and certain other, immaterial, assets; and (ii) all of the assets of the Company’s U.S. Subsidiary.
NOTE 5 — EQUITY
2020 U.S. Public Offering.
In February 2020, the Company completed a registered public offering of 2,927,267 ADSs, each representing 30 ordinary shares of the Company, at a price of $13.75 per ADS, for total gross proceeds of
 
F-8
​​
 
ITAMAR MEDICAL LTD.
   
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
approximately $40.25 million, or total net proceeds of approximately $35.7 million after deducting underwriting discounts and commissions of approximately $2.8 million and offering expenses of approximately $1.8 million.
NOTE 6 — SHARE-BASED PAYMENTS
In January 2020, the Company’s Board of Directors approved a grant of a total of 3,942,284 options and 194,887 RSUs to 12 employees. The grant of 1,332,195 options and 194,887 RSUs was subject to the effectiveness of a Registration Statement on Form S-8, which became effective on March 4, 2020 and the grant of 1,676,425 options to the CEO was approved by the Company’s shareholders on March 18, 2020.
In May 2020, the Company’s Board of Directors approved a grant of a total of 2,326,555 options and 173,155 RSUs to 29 employees.
In May 2020, the Company granted 440,000 options to four directors.
As to grants of options and RSUs subsequent to September 30, 2020, see Note 8.
NOTE 7 — REVENUES
The Company operates in one business sector.
The following is a breakdown of revenues according to product groups:
​ ​ ​
Three Months Ended
September 30,
​ ​
Nine Months
Ended September 30,
​
​ ​ ​
2020
​ ​
2019
​ ​
2020
​ ​
2019
​
​ ​ ​
U.S. dollars in thousands
​
WatchPAT and other related services
​ ​ ​ $ 10,535 ​ ​ ​ ​ $ 7,589 ​ ​ ​ ​ $ 26,601 ​ ​ ​ ​ $ 19,906 ​ ​
EndoPAT and related services
​ ​ ​ ​ 464 ​ ​ ​ ​ ​ 495 ​ ​ ​ ​ ​ 1,661 ​ ​ ​ ​ ​ 1,587 ​ ​
​ ​ ​ ​ $ 10,999 ​ ​ ​ ​ $ 8,084 ​ ​ ​ ​ $ 28,262 ​ ​ ​ ​ $ 21,493 ​ ​
The following is a breakdown of revenues on the basis of geographical regions (based on the geographical location of the customer):
​ ​ ​
Three Months Ended
September 30,
​ ​
Nine Months
Ended September 30,
​
​ ​ ​
2020
​ ​
2019
​ ​
2020
​ ​
2019
​
​ ​ ​
U.S. dollars in thousands
​
United States and Canada
​ ​ ​ $ 8,951 ​ ​ ​ ​ $ 5,814 ​ ​ ​ ​ $ 21,786 ​ ​ ​ ​ $ 15,461 ​ ​
Japan
​ ​ ​ ​ 901 ​ ​ ​ ​ ​ 1,127 ​ ​ ​ ​ ​ 3,027 ​ ​ ​ ​ ​ 2,595 ​ ​
Europe
​ ​ ​ ​ 944 ​ ​ ​ ​ ​ 800 ​ ​ ​ ​ ​ 2,930 ​ ​ ​ ​ ​ 2,367 ​ ​
Asia Pacific (excluding Japan)
​ ​ ​ ​ 101 ​ ​ ​ ​ ​ 139 ​ ​ ​ ​ ​ 212 ​ ​ ​ ​ ​ 643 ​ ​
Israel
​ ​ ​ ​ 95 ​ ​ ​ ​ ​ 83 ​ ​ ​ ​ ​ 215 ​ ​ ​ ​ ​ 204 ​ ​
Others
​ ​ ​ ​ 7 ​ ​ ​ ​ ​ 121 ​ ​ ​ ​ ​ 92 ​ ​ ​ ​ ​ 223 ​ ​
​ ​ ​ ​ $ 10,999 ​ ​ ​ ​ $ 8,084 ​ ​ ​ ​ $ 28,262 ​ ​ ​ ​ $ 21,493 ​ ​
The majority of the Company’s long-lived assets are in Israel.
NOTE 8 — SUBSEQUENT EVENT
In November 2020, the Company’s Board of Directors approved a grant of a total of 4,849,933 options and 281,778 RSUs to 59 grantees.
 
F-9