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SHARE CAPITAL
 3 Months Ended
Mar. 31, 2024
Equity [Abstract]  
SHARE CAPITAL

NOTE 4 - SHARE CAPITAL

 

A. Share capital developments

 

As of March 31, 2024, and December 31, 2023, the Company had, respectively, 14,398,964 and 11,707,317 shares of common stock issued and outstanding.

 

B. Preferred investment options inducement

 

On December 29, 2023, the Company entered into a preferred investment option exercise inducement offer letter with certain holders of existing (i) Series A preferred investment options to purchase 1,022,495 shares of the Company’s common stock at an exercise price of $2.20 per share, issued on October 25, 2022, as amended on May 24, 2023, (ii) Series C preferred investment options to purchase 350,878 shares of the Company’s common stock at an exercise price of $2.075 per share, issued on June 6, 2023, and (iii) Series D preferred investment options to purchase 312,309 shares of the Company’s common stock at an exercise price of $3.19 per share issued on June 26, 2023 (clauses (i) through (iii) collectively, the “Existing Preferred Investment Options”), pursuant to which the holders agreed to exercise for cash their Existing Investment Options to purchase an aggregate of 1,685,682 shares of the Company’s common stock, at a reduced exercised price of $1.62 per share, in consideration for the Company’s agreement to issue new series E preferred investment options having terms to purchase up to 1,685,682 shares of the Company’s common stock (the “Inducement Investment Options”). Each Inducement Investment Option will have an exercise price equal to $1.50 per share, and will be exercisable from the date of the issuance until five and one-half (5.5) years following the date of the issuance. The Company received aggregate gross proceeds of approximately $2,730 from the exercise of the Existing Investment Options by the Holders and the sale of the Inducement Investment Options, before deducting placement agent fees and other offering expenses of approximately $333. The Company also issued to Wainwright or its designees preferred investment options to purchase up to 84,284 shares of common stock which have the same terms as the Inducement Investment Options except for an exercise price equal to $2.025 per share. Further, pursuant to the engagement letter, Wainwright has a right of first refusal to act as sole book-running manager, sole underwriter, or sole placement agent with respect to any public offering or private placement of equity, equity-linked or debt securities using an underwriter or placement agent occurring during the twelve-month period following the closing date January 3, 2024.

 

 

C. Equity component of settlement amount

 

As part of the Settlement Agreement (refer to Note 3G above), the Company issued 1,005,965 shares of the Company’s common stock.

 

D. Equity classification

 

The common stock of the Company are recognized as equity under the requirements of ASC Topic 505 Equity.

 

The Company analyzed the accounting treatment for the series E preferred investment options and concluded that they should be classified as equity.

 

The Company analyzed the accounting treatment for the preferred investment options issued to Wainwright. Since the Company did not identify any features causing liability classification according to ASC 718, it concluded that all such preferred investment options are equity-classified awards.

 

E. Employee Stock Option Grants

 

In February 2024, the Company granted the CEO, certain executives and certain employees, fully vested options to purchase an aggregate of 130,000 shares of the Company’s common stock, at an exercise price per share of $1.2684, attributable to performance goals achieved in January 2024.

 

The Company also granted the CEO and other executives, options to purchase an aggregate of 132,500 shares of the Company’s common stock at an exercise price per share of $1.25, with vesting based on meeting certain performance conditions in the year 2024. The Company’s management believes that meeting the performance conditions is tied to the Company’s ability to secure additional capital. Therefore, as of March 31, 2024, the Company has not recorded any expense related to this performance condition grant.

 

In February 2024, the Company granted the CEO and certain employees and advisors, options to purchase an aggregate of 195,000 shares of the Company’s common stock, at an exercise price per share of $1.2684, with a vesting period of three years. Regarding the CEO’s 2023 annual bonus, in February 2024, the Company paid the CEO 25% of his 2023 annual bonus, amounting to approximately $99, through the grant of fully vested options to purchase an aggregate of 79,567 shares of the Company’s common stock with an exercise price per share of $1.25.