SCHEDULE: BrainsWay Amends Warrant Terms with Valor BrainsWay Holdings, Eliminating Cashless Exercise Option

BrainsWay Ltd. and Valor BrainsWay Holdings, LLC have amended their warrant agreement, removing the cashless exercise mechanism for warrants to purchase up to 1,500,000 American Depositary Shares.

Summary

• BrainsWay Ltd. and Valor BrainsWay Holdings, LLC executed Amendment No. 1 to their Warrant to Purchase American Depositary Shares, effective April 1, 2025.
• The amendment primarily removes the cashless exercise mechanism previously included in Section 2(c) of the original Warrant, which was issued on November 5, 2024.
• The original Warrant allowed the holder to purchase up to 1,500,000 American Depositary Shares (ADSs), representing 3,000,000 Ordinary Shares.
• The amendment clarifies that BrainsWay will not be required to pay cash upon exercise or in exchange for the Warrant, nor issue a different number of Warrant Shares during a Fundamental Transaction.
• Valor BrainsWay Holdings, LLC and its affiliated reporting persons collectively beneficially own 7,207,490 Ordinary Shares, representing 17.7% of the class.
• This beneficial ownership includes 2,103,745 ADSs (representing 4,207,490 Ordinary Shares) and warrants to purchase 1,500,000 ADSs (representing 3,000,000 Ordinary Shares).
• As of March 31, 2025, BrainsWay Ltd. had 37,738,456 Ordinary Shares outstanding.
• Jonathan Shulkin beneficially owns 7,743,984 Ordinary Shares (19.0% of class), and Antonio Gracias beneficially owns 7,694,490 Ordinary Shares (18.9% of class), including their shared interests.

Sentiment

Score: 6

Explanation: The amendment is a neutral to slightly positive development for BrainsWay as it removes a cashless exercise option, potentially reducing dilution and ensuring cash inflow upon warrant exercise. For the warrant holder, it might be slightly negative as it removes a flexible exercise option. Overall, it's a specific contractual adjustment rather than a major positive or negative operational event.

Positives

• The removal of the cashless exercise mechanism may reduce potential dilution for existing shareholders if the warrants are exercised for cash, rather than new shares.
• The amendment clarifies the company's obligations regarding warrant exercise, particularly concerning cash payments and share issuance during fundamental transactions, providing greater certainty.

Negatives

• The removal of the cashless exercise option may make it less attractive for the warrant holder (Valor BrainsWay Holdings, LLC) to exercise the warrants, as it now requires a cash outlay.

Risks

• The requirement for cash exercise of warrants could potentially delay or prevent the exercise of the 1,500,000 ADSs (3,000,000 Ordinary Shares) if the holder lacks sufficient cash or finds the terms less appealing.

Future Outlook

The document does not provide explicit forward-looking statements or guidance beyond the terms of the amended warrant agreement.

Industry Context

This amendment is a specific contractual modification between BrainsWay Ltd. and a significant investor, Valor BrainsWay Holdings, LLC. It reflects a re-negotiation of terms for a previously issued warrant, which is a common practice in corporate finance, particularly in sectors where companies often rely on various financing instruments. It does not directly relate to broader industry trends but rather to the specific financial arrangements of the company.

Corporate Governance

Related Party Transactions

• Amendment No. 1 to Warrant to Purchase American Depositary Shares was entered into between BrainsWay Ltd. and Valor BrainsWay Holdings, LLC, a significant beneficial owner of the company's shares (17.7%).

Stakeholder Impact

• Shareholders: Potential for reduced dilution if warrants are exercised for cash rather than through cashless means. Ensures cash inflow upon exercise.
• Warrant Holder (Valor BrainsWay Holdings, LLC): Requires cash outlay for warrant exercise, removing a flexible cashless option.

Next Steps

• The document does not explicitly mention future actions or milestones beyond the effective date of the amendment.

Key Dates

Recommendation

Keywords

BrainsWay Ltd., Valor BrainsWay Holdings, Warrant Amendment, American Depositary Shares, ADSs, Ordinary Shares, Cashless Exercise, SEC Filing, Schedule 13D, Beneficial Ownership, Corporate Governance, Investment, Biotechnology, Medical Devices