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SHAREHOLDERS' EQUITY | 9 Months Ended
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Sep. 30, 2024
Equity [Abstract] |
SHAREHOLDERS' EQUITY | NOTE 8: SHAREHOLDERS’ EQUITY
| a. | Reverse share split:
At the Company’s 2023 annual general meeting, the Company’s shareholders approved (i) a reverse share split within a range of 1:2 to 1:12, to be effective at the ratio and on a date to be determined by the Board of Directors, and (ii) amendments to the Company’s Articles of Association authorizing an increase in the Company’s authorized share capital (and corresponding authorized number of ordinary shares, proportionally adjusting such number for the reverse share split) so that the maximum number of authorized ordinary shares would be 120 million. In accordance with the shareholder approval, in early March 2024 the Board of Directors of the Company approved a one-for-seven reverse share split of the Company’s ordinary shares, reducing the number of the Company’s issued and outstanding ordinary shares from approximately 60.1 million pre-split shares to approximately 8.6 million post-split shares. The Company’s ordinary shares began trading on a split-adjusted basis on March 15, 2024. Additionally, effective at the same time, the total authorized number of ordinary shares of the Company was adjusted to 25 million post-split shares, the par value per share of the ordinary shares changed to NIS 1.75 and the authorized share capital of the Company changed from NIS 30,000,000 to NIS 43,750,000. All share and per share data included in these condensed consolidated financial statements give retroactive effect to the reverse share split for all periods presented. Upon the effectiveness of the reverse share split, every seven shares were automatically combined and converted into one ordinary share. Appropriate adjustments were also made to all outstanding derivative securities of the Company, including all outstanding equity awards and warrants. No fractional shares were issued in connection with the reverse share split. Instead, all fractional shares (including shares underlying outstanding equity awards and warrants) were rounded down to the nearest whole number.
| b. | Share option plans:
As of September 30, 2024, no ordinary shares were reserved, as the Company’s 2014 Incentive Compensation Plan (the “2014 Plan”) was terminated on August 19, 2024, and a new plan has not yet been approved as a replacement. As of December 31, 2023, the Company had reserved 145,560 ordinary shares for issuance to the Company’s and its affiliates’ respective employees, directors, officers, and consultants pursuant to equity awards granted under the 2014 Plan. Options to purchase ordinary shares generally vest over four years, with certain options to non-employee directors vesting quarterly over one year. Under the 2014 Plan, any option that was forfeited or canceled before expiration became available for future grants. However, as the 2014 Plan was terminated on August 19, 2024, no further options will be granted under this plan. There were no options granted during the nine months that ended September 30, 2024, and 2023. The fair value of RSUs granted is determined based on the price of the Company's ordinary shares on the date of grant. A summary of employee share options activity during the nine months ended September 30, 2024, is as follows:
|  | Number |  |  | Weighted average exercise price |  |  | Weighted average remaining contractual life (years) |  |  | Aggregate intrinsic value (in thousands) |
Options outstanding as of December 31, 2023 |  |  | 4,723 |  |  | $ | 259.73 |  |  |  | 4.39 |  |  | $ | - |
Granted |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Exercised |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Forfeited |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Options outstanding as of September 30, 2024 |  |  | 4,723 |  |  | $ | 259.73 |  |  |  | 3.62 |  |  | $ | - |
Options exercisable as of September 30, 2024 |  |  | 4,723 |  |  | $ | 259.73 |  |  |  | 3.62 |  |  | $ | - |
The aggregate intrinsic value in the table above represents the total intrinsic value that would have been received by the option holders had all option holders that hold options with positive intrinsic value exercised their options on the last date of the exercise period. No options were exercised during the nine months ended September 30, 2024 and 2023. A summary of employees and non-employees RSUs activity during the nine months ended September 30, 2024 is as follows:
|  | Number of shares underlying outstanding RSUs |  |  | Weighted- average grant date fair value |
Unvested RSUs as of December 31, 2023 |  |  | 538,885 |  |  | $ | 6.07 |
Granted |  |  | 14,740 |  |  |  | 4.80 |
Vested |  |  | (218,493 | ) |  |  | 6.56 |
Forfeited |  |  | (3,413 | ) |  |  | 6.86 |
Unvested RSUs as of September 30, 2024 |  |  | 331,719 |  |  | $ | 5.68 |
The weighted average grant date fair value of RSUs granted during the nine months ended September 30, 2024, and 2023 was $4.80 and $4.69, respectively. As of September 30, 2024, there were $1.7 million of total unrecognized compensation costs related to non-vested share-based compensation arrangements granted under the Company's 2014 Plan. This cost is expected to be recognized over a period of approximately 2.3 years. The number of options and RSUs outstanding as of September 30, 2024 is set forth below, with options separated by range of exercise price.
|  |  | Weighted average remaining contractual life (years) (1) |  |  | Options outstanding and exercisable as of September 30, 2024 |  |  | Weighted average remaining contractual life (years) (1) |
Range of exercise price |  |  | Options and RSUs outstanding as of September 30, 2024 |  |  |  |  |  |  |
RSUs only |  |  |  | 331,719 |  |  |  | - |  |  |  | - |  |  |  | - |
$37.6 |  |  |  | 1,774 |  |  |  | 4.49 |  |  |  | 1,774 |  |  |  | 4.49 |
$178.5 - $236.3 |  |  |  | 1,845 |  |  |  | 3.59 |  |  |  | 1,845 |  |  |  | 3.59 |
$350 - $367.5 |  |  |  | 887 |  |  |  | 2.65 |  |  |  | 887 |  |  |  | 2.65 |
$1,277.5 - $3,634.8 |  |  |  | 217 |  |  |  | 0.63 |  |  |  | 217 |  |  |  | 0.63 |
|  |  |  | 336,442 |  |  |  | 3.62 |  |  |  | 4,723 |  |  |  | 3.62 |
| (1) | Calculation of weighted average remaining contractual term does not include the RSUs that were granted, which have an indefinite contractual term.
| c. | Share-based awards to non-employee consultants:
As of September 30, 2024, there are no outstanding options or RSUs held by non-employee consultants.
| d. | Treasury shares:
On June 2, 2022, the Company’s Board of Directors approved a share repurchase program to repurchase up to $8.0 million of its Ordinary Shares, par value NIS 0.25 per share. On July 21, 2022, the Company received approval from an Israeli court for the share repurchase program. The program was scheduled to expire on the earlier of January 20, 2023, or reaching $8.0 million of repurchases. On December 22, 2022, the Company’s Board of Directors approved an extension of the repurchase program, with such extension to be in the aggregate amount of up to $5.8 million. The extension was approved by an Israeli court on February 9, 2023, and it expired on August 9, 2023. As of September 30, 2024, pursuant to the Company’s share repurchase program, the Company had repurchased a total of 574,658 of its outstanding ordinary shares at a total cost of $3.5 million.
| e. | Warrants to purchase ordinary shares:
The following table summarizes information about warrants outstanding and exercisable that were classified as equity as of September 30, 2024:
Issuance date |  | Warrants outstanding |  |  | Exercise price per warrant |  |  | Warrants outstanding and exercisable |  | Contractual term
|  | (number) |  |  |  |  |  | (number) |  |
December 31, 2015 (1) |  |  | 681 |  |  | $ | 52.50 |  |  |  | 681 |  | See footnote (1)
December 28, 2016 (2) |  |  | 272 |  |  | $ | 52.50 |  |  |  | 272 |  | See footnote (1)
April 5, 2019 (3) |  |  | 58,350 |  |  | $ | 35.98 |  |  |  | 58,350 |  | October 7, 2024
June 12, 2019 (4) |  |  | 59,523 |  |  | $ | 42.00 |  |  |  | 59,523 |  | December 12, 2024
February 10, 2020 (5) |  |  | 4,054 |  |  | $ | 8.75 |  |  |  | 4,054 |  | February 10, 2025
February 10, 2020 (6) |  |  | 15,120 |  |  | $ | 10.94 |  |  |  | 15,120 |  | February 10, 2025
July 6, 2020 (7) |  |  | 64,099 |  |  | $ | 12.32 |  |  |  | 64,099 |  | January 2, 2026
July 6, 2020 (8) |  |  | 42,326 |  |  | $ | 15.95 |  |  |  | 42,326 |  | January 2, 2026
December 8, 2020 (9) |  |  | 83,821 |  |  | $ | 9.38 |  |  |  | 83,821 |  | June 8, 2026
December 8, 2020 (10) |  |  | 15,543 |  |  | $ | 12.55 |  |  |  | 15,543 |  | June 8, 2026
February 26, 2021 (11) |  |  | 780,095 |  |  | $ | 25.20 |  |  |  | 780,095 |  | August 26, 2026
February 26, 2021 (12) |  |  | 93,612 |  |  | $ | 32.05 |  |  |  | 93,612 |  | August 26, 2026
September 29, 2021 (13) |  |  | 1,143,821 |  |  | $ | 14.00 |  |  |  | 1,143,821 |  | March 29, 2027
September 29, 2021 (14) |  |  | 137,257 |  |  | $ | 17.81 |  |  |  | 137,257 |  | September 27, 2026
|  |  | 2,498,574 |  |  |  |  |  |  |  | 2,498,574 |  |
| (1) | Represents warrants for ordinary shares issuable upon an exercise price of $52.50 per share, which were granted on December 31, 2015 to Kreos Capital V (Expert) Fund Limited (“Kreos”) in connection with a loan made by Kreos to the Company and are currently exercisable (in whole or in part) until the earlier of (i) December 30, 2025 or (ii) immediately prior to the consummation of a merger, consolidation, or reorganization of the Company with or into, or the sale or license of all or substantially all the assets or shares of the Company to, any other entity or person, other than a wholly owned subsidiary of the Company, excluding any transaction in which the Company’s shareholders prior to the transaction will hold more than 50% of the voting and economic rights of the surviving entity after the transaction. None of these warrants had been exercised as of September 30, 2024.
| (2) | Represents common warrants that were issued as part of the $8.0 million drawdown under the Loan Agreement which occurred on December 28, 2016. See footnote 1 for exercisability terms.
| (3) | Represents warrants that were issued to certain institutional purchasers in a private placement in the Company’s registered direct offering of ordinary shares in April 2019.
| (4) | Represents warrants that were issued to certain institutional investors in a warrant exercise agreement in June 2019.
| (5) | Represents warrants that were issued to certain institutional purchasers in a private placement in the Company’s best efforts offering of ordinary shares in February 2020. As of September 30, 2024, 534,300 warrants were exercised for a total consideration of $4,675,125. During the nine months ended September 30, 2024, no warrants were exercised.
| (6) | Represents warrants that were issued to the placement agent as compensation for its role in the Company’s February 2020 best efforts offering. As of September 30, 2024, 32,880 warrants were exercised for a total consideration of $359,625. During the nine months ended September 30, 2024, no warrants were exercised.
| (7) | Represents warrants that were issued to certain institutional purchasers in a private placement in our registered direct offering of ordinary shares in July 2020. As of September 30, 2024, 288,634 warrants were exercised for a total consideration of $3,556,976. During the nine months that ended September 30, 2024, no warrants were exercised.
| (8) | Represents warrants that were issued to the placement agent as compensation for his role in the Company’s July 2020 registered direct offering.
| (9) | Represents warrants that were issued to certain institutional purchasers in a private placement in our private placement offering of ordinary shares in December 2020. As of September 30, 2024, 514,010 warrants were exercised for a total consideration of $4,821,416. During the nine months that ended September 30, 2024, no warrants were exercised.
| (10) | Represents warrants that were issued to the placement agent as compensation for its role in the Company’s December 2020 private placement. As of September 30, 2024, 32,283 warrants were exercised for a total consideration of $405,003. During the nine months that ended September 30, 2024, no warrants were exercised.
| (11) | Represents warrants that were issued to certain institutional purchasers in a private placement in our private placement offering of ordinary shares in February 2021.
| (12) | Represents warrants that were issued to the placement agent as compensation for its role in the Company’s February 2021 private placement.
| (13) | Represents warrants that were issued to certain institutional purchasers in a private placement in our registered direct offering of ordinary shares in September 2021.
| (14) | Represents warrants that were issued to the placement agent as compensation for its role in the Company’s September 2021 registered direct offering.
| f. | Share-based compensation expense for employees and non-employees:
The Company recognized non-cash share-based compensation expenses for both employees and non-employees in the condensed consolidated statements of operations as follows (in thousands):
|  | Nine Months Ended September 30, |
|  | 2024 |  |  | 2023 |
Cost of revenues |  | $ | 12 |  |  | $ | 5 |
Research and development, net |  |  | 130 |  |  |  | 112 |
Sales and marketing |  |  | 309 |  |  |  | 270 |
General and administrative |  |  | 596 |  |  |  | 568 |
Total |  | $ | 1,047 |  |  | $ | 955 |

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