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Share-Based Compensation
 12 Months Ended
Dec. 31, 2024
Share-Based Compensation [Abstract]  
SHARE-BASED COMPENSATION

NOTE 17 - SHARE-BASED COMPENSATION:

 

In May 2016, the Board of Directors approved a new equity incentive plan (the “Plan”). During 2023 the Board of Directors approved an additional increase of the pool of 707,358 ordinary shares for grant to Company employees.

 

In February 2024, certain members of the Company’s executive management, including mainly the chief executive officer and chief technology officer, collectively sold in a privately negotiated transaction a number of ordinary shares representing less than 10% of their personal collective holdings to a number of the Company’s existing shareholders for an aggregate purchase price of approximately $3.0 million. The Company determined that the sale contains a compensatory element, and therefore an incremental compensation expense was recognized in the amount of $1,572 as share-based compensation.

 

In May 2024, the Company approved and granted options to its employees and subcontractors to purchase 146,304 ordinary shares at an exercise price of 0.23 NIS per share and 395,735 ordinary shares at an exercise price of $9.44-$10.88 per share. The options vest over a four-year period, 25% of which vest on the first anniversary of the date of the grant, and the remaining amount vest over the following three years in equal parts at the end of each subsequent fiscal quarter, subject to continued employment or service with the Company at the time of vesting. The options expire 10 years from the date of grant. The estimated fair value of the options granted in May 2024 was $6.8 million.

 

As of December 31, 2024, 38,442 shares remain available for grant under the Plan. The Company’s option awards generally vest over a four-year period, with 25% of the options vesting on the first year anniversary of grant and the remaining options vesting over the remaining period every quarter, and have a maximum term of 10 years.

 

Options granted to employees and non-employees:

 

In the years ended December 31, 2024, and 2023, the Company granted options as follows:

 

   Year ended December 31, 2024 
   Award
amount		   Exercise
price		   Vesting
period		   Expiration 
Employees   65,957    0.23 NIS    4 years    10 years 
Employees   378,901    $9.44-$10.88    4 years    10 years 
Directors   75,957    0.23 NIS    4 years    10 years 
Subcontractors   4,390    0.23 NIS    4 years    10 years 
Subcontractors   16,834    $9.67-$10.48    4 years    10 years 
Total granted   542,039                

 

   Year ended December 31, 2023 
   Award
amount		   Exercise
price		   Vesting
period		   Expiration 
Employees   339,185    0.23 NIS    4 years    10 years 
Subcontractors and directors   4,997    0.23 NIS    4 years    10 years 
Total granted   344,182                

 

The fair value of options granted to employees, subcontractors and directors during 2024 and 2023 was $6.8 million and $3.7 million, accordingly.

 

The fair value of each option granted is estimated using the Black-Scholes option pricing method. The volatility was calculated on a daily basis for a period equal to the expected term of each option and based on the 75th percentile of the observations from comparable companies.

 

The estimation of the risk-free interest rates was based on the zero-coupon yield of U.S. Treasury bonds for the expected term of each option. When appropriate, the Company’s management uses the simplified method for as its expected life for employees, absent sufficient historical share option exercise experience, and the expected term of each option as its expected life for sub-contractors. The Company’s historical share option exercise experience does not provide a reasonable basis for estimating the expected term. The expected term of the options granted represents the period of time that granted options are expected to remain outstanding.

The underlying data used for computing the fair value of the options (as of the grant date) are as follows:

 

   2024   2023 
Employees          
Expected term (years) —   6.11    5.91-6.14 
Expected volatility   43.48%   40.98% - 42.14%
Risk free interest rate   4.30%   3.80%-3.83%
Expected dividend yield   0.00%   0.00%
Exercise price   0.06-10.48    0.06 
           
Non-Employees          
Expected term (years) —   10.00    10.00 
Expected volatility   43.48%   42.09%-42.17%
Risk free interest rate   4.30%   3.64%-3.75%
Expected dividend yield   0.00%   0.00%
Exercise price   0.06-10.48    0.06 
           
Assumptions regarding the price of the underlying shares:          
Probability of an IPO   30%   25%
Expected time to IPO (years)   0.5    0.75 
Probability of liquidation event   70%   75%
Expected time to liquidation (years)   2.0    2.0 

 

Summary of outstanding and exercisable options:

 

The following table summarizes the number of options outstanding for the years ended December 31, 2024 and December 31, 2023, and related information:

 

   Number of
options		   Weighted-
average
exercise
price		   Weighted-
average
remaining
contractual
term (in years)		   Aggregate
Intrinsic
Value
(in U.S. dollars)		 
Outstanding at December 31, 2023   1,300,475   $0.066    7.75   $14,109 
Granted   542,039   $7.667    9.85   $
-
 
Exercised   (186,038)  $0.062    (6.82)  $1,508 
Forfeited   (23,684)  $4.466    (8.86)  $
-
 
Expired   (2,219)  $0.065   
 
   $
-
 
Outstanding at December 31, 2024   1,630,573   $2.5259    7.63   $12,274 
                     
Exercisable at December 31, 2024   947,700   $0.518    6.67   $8,938 
Vested and expected to vest at December 31, 2024   1,630,573   $2.529    7.63   $12,274 
   Number of options   Weighted-
average
exercise
price		   Weighted- average remaining contractual term (in years)   Aggregate
Intrinsic
Value
(in U.S. dollars)		 
Outstanding at December 31, 2022   1,008,927   $0.068    8.12   $9,601 
Granted   344,182   $0.063    9.80   $
-
 
Exercised   (23,254)  $0.062    (7.10)  $224 
Forfeited   (24,374)  $0.067    (8.91)  $
-
 
Expired   (5,006)  $0.070    
-
   $
-
 
Outstanding at December 31, 2023   1,300,475   $0.066    7.75   $14,109 
                     
Exercisable at December 31, 2023   818,625   $0.067    7.28   $8,881 
Vested and expected to vest at December 31, 2023   1,300,475   $0.066    7.75   $14,109 

 

The Company assumes that all outstanding options are expected to vest. The weighted average fair values at grant date of options granted for the years ended December 31, 2024 and 2023 were $13.25 and $10.80 per share, respectively.

 

Summary of status of the Company’s nonvested employee options:

 

The following table summarizes the number of options outstanding for the years ended December 31, 2024 and December 31, 2023, and related information:

 

   Number of
options		   Weighted-
average
grant-date
fair value
price		 
Outstanding at December 31, 2023   481,850    9.68 
Granted   542,039    13.25 
Vested   (317,304)   9.99 
Forfeited   (23,684)   10.83 
           
Outstanding at December 31, 2024   682,901    12.33 
           
Outstanding at December 31, 2022   458,218    8.24 
Granted   344,182    10.80 
Vested   (296,176)   8.76 
Forfeited   (24,374)   9.53 
           
 Outstanding at December 31, 2023   481,850    9.68 

The Company currently uses authorized and unissued shares to satisfy share award exercises.

 

The share-based compensation expense by line item in the accompanying consolidated statements of operations is summarized as follows:

 

   Year ended December 31 
   2024   2023 
Cost of sales  $303   $139 
Research and development   610    240 
General and administrative   4,975    1,964 
Sales and marketing   719    224 
   $6,607   $2,567