UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 5)*
Ability Inc.
(Name of Issuer)
Ordinary Shares, par value $0.001 per share
(Title of Class of Securities)
G8789K124
(CUSIP Number)
Alexander Aurovsky
c/o Ability Inc.
Yad Harutzim 14
Tel Aviv, Israel, 6770007
972-3-6879777
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)
January 10, 2019
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. ☐
Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
CUSIP No. G8789K124
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NAMES OF REPORTING PERSONS. I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Alexander Aurovsky |
| 2 |
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) ☐ (b) ☐ |
| 3 |
SEC USE ONLY
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| 4 |
SOURCE OF FUNDS (SEE INSTRUCTIONS) OO |
| 5 |
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) ☒
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| 6 |
CITIZENSHIP OR PLACE OF ORGANIZATION Israel |
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NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH |
7 |
SOLE VOTING POWER* 1,285,352 shares |
| 8 |
SHARED VOTING POWER 0 shares | |
| 9 |
SOLE DISPOSITIVE POWER* 1,285,352 shares | |
| 10 |
SHARED DISPOSITIVE POWER 0 shares |
| 11 |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON* 1,285,352 shares |
| 12 |
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) ☐
|
| 13 |
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)* 18.80% |
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TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) IN |
* Based on 6,607,529 ordinary shares outstanding as of January 10, 2019.
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The following constitutes Amendment No. 5 (“Amendment No. 5”) to the Schedule 13D originally filed on December 31, 2015 (the “Original Schedule 13D”), as further amended on August 22, 2018 (“Amendment No. 1”), December 3, 2018 (“Amendment No. 2”), December 14, 2018 (“Amendment No. 3”), and December 31, 2018 (“Amendment No. 4”, and, together with Amendment No. 1, Amendment No. 2 and Amendment No. 3, the “Amendments”), filed by the Reporting Person with the Securities and Exchange Commission (“SEC”) with respect to its ownership of Ordinary Shares, par value $0.001 per share (the “Ordinary Shares”), in Ability Inc., a Cayman Islands corporation (the “Company”). This Amendment No. 5 amends the Original Schedule 13D, as amended by the Amendments, as specifically set forth herein. This Amendment No. 5 is being filed solely to report a revised percentage of beneficial ownership by the Reporting Person of Ordinary Shares as a result of the events described in Item 6 of this Amendment No. 5, and to supplement Items 4 and 5.
Item 4. Purpose of Transaction.
The information provided by the Reporting Person in response to Item 6 is hereby incorporated by reference in response to this Item 4.
Item 5. Interests of Securities of the Issuer.
Item 5 of the Original Schedule 13D, as amended by Amendment No. 4, is hereby amended to add the following:
(a) and (b) There were 6,607,529 Ordinary Shares outstanding as of January 10, 2019. As of January 10, 2019, the Reporting Person beneficially owned 1,285,352 shares of Ordinary Shares of the Company (including 226,426 ordinary shares issuable upon the exercise of warrants held by the Reporting Person), which comprises 18.80% of the outstanding Ordinary Shares. 832,500 of such shares are held through a trust of which the Reporting Person is beneficiary and over which the Reporting Person has voting and dispositive power. Such trust was established in connection with a pre-ruling of the Israel Tax Authority to ensure payment of any tax due to the Israel Tax Authority in connection with the Merger Agreement (as defined in the Original Schedule 13D).
(c) The Reporting Person has not effected any transactions in the Company’s Ordinary Shares during the past 60 days, except with respect to the Conversion Agreement described in Item 6 of this Schedule 13D.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Undertakings or Relationships with Respect to Securities of the Issuer.
Item 6 of the Original Schedule 13D, as amended by the Amendments, is hereby amended to add the following:
Conversion Agreement
Conversion Shares
On February 21, 2018, the Reporting Person and Anatoly Hurgin (collectively, the “Founders”) executed an Irrevocable Undertaking (the “Undertaking”) for the benefit of the Company. According to the Undertaking, the Founders agreed to make available to the Company from March 1, 2018, a $3.0 million line of credit or loan in favor of the Company’s subsidiary, Ability Computer & Software Industries Ltd. (“Ability”). Subsequently, on April 11, 2018, the Company obtained a line of credit (the “Line of Credit”), secured by the Founders, from an Israeli commercial bank (the “Bank”) in the amount of NIS 11.0 million (approximately $3.1 million), of which NIS 5.5 million (approximately $1.5 million) (the “Outstanding Debt”) has been drawn down prior to the entry into the Conversion Agreement (as defined below).
On December 27, 2018, the Founders entered into an agreement (the “Conversion Agreement”) with the Company and Ability (the “Conversion Agreement”), pursuant to which the Founders agreed to transfer to the Company an amount in cash equal to the amount outstanding (the “Founders’ Proceeds”) under the Company’s Line of Credit, and the Company intended to use the entire Founders’ Proceeds in order to repay the amount outstanding under the Company’s Line of Credit in full.
In return for transfer of the Founders’ Proceeds to the Company, the Company agreed to issue, in a private placement, to each of the Founders 226,426 ordinary shares (452,852 ordinary shares in the aggregate) and warrants to purchase 226,426 ordinary shares (452,852 ordinary shares in the aggregate, collectively, the “Warrants”) at a conversion price of $3.25, the same price per unit of the Company’s recently closed public offering. The Warrants will be immediately exercisable at a price of $3.25 per ordinary share, subject to adjustment in certain circumstances, expire five years from the date of issuance and contain substantially similar terms to the warrants issued in the recently closed public offering. Simultaneously with the issuance, the Undertaking will automatically terminate.
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On January 10, 2019, the Company completed the closing of the Conversion Agreement (the “Closing”), which resulted in an issuance of 226,426 ordinary shares and 226,426 warrants to purchase ordinary shares to the Reporting Person. As a result of the Closing, the percentage ownership beneficially owned by the Reporting Person increased by an amount greater than 1%.
Simultaneously with the Closing, the Undertaking was automatically terminated. In addition, the Founders’ Proceeds were used to repay the Outstanding Debt to the Bank, and the Line of Credit was terminated.
The foregoing description of the Conversion Agreement and the warrant issued to the Reporting Person is not complete and is qualified in its entirety by reference to the full texts of the Conversion Agreement and the warrant issued to the Reporting Person, copies of which are filed herewith as Exhibits 99.10 and 99.11 to this Schedule 13 D/A and are incorporated herein by reference.
Item 7. Material to Be Filed as Exhibits
The following documents are filed as exhibits to this schedule:
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
Date: January 14, 2019
| By: | /s/ Alexander Aurovsky | |
| Name: | Alexander Aurovsky |
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