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SIGNIFICANT TRANSACTIONS

9 Months Ended

Sep. 30, 2023

NOTE 3 - SIGNIFICANT TRANSACTIONS

A.	Completion of underwritten U.S. public offering

	On April 13, 2023, the Company completed an underwritten public offering under which the Company received gross proceeds of approximately $10 million for issuance of (i) 5,376,472 shares of common stock and (ii) 1,976,470 pre-funded warrants at a price to the public of $1.36 per share. The pre-funded warrants are exercisable for the same number of shares of common stock and may be exercised at any time until exercised in full at an exercise price of $0.001.

	Upon satisfaction of customary closing conditions, the closing date of the above underwritten public offering was April 17, 2023 (the “Closing Date”).

	The Company received substantially all the pre-funded warrant’s proceeds upfront (without any conditions) as part of the pre-funded warrant’s purchase price and in return the Company is obligated to issue fixed number of shares of common stock to the holders. Thus, pre-funded warrants were accounted for and were classified as additional paid-in capital as part of the Company’s stockholders’ equity.

	Total incremental and direct issuance costs amounted to $1,270 thousand. These expenses were deducted from additional paid-in capital as they were allocated to shares of Common Stock and pre-funded warrants.

Upon closing of underwritten U.S. public offering, a down round protection feature of certain warrants granted in previous years to service providers was triggered by the way of reduction of their exercise price from a price in a range of $3.35-$70.20 to a price of $1.36 which represented the above public offering price. Such reduction was accounted for as deemed dividend estimated at total amount of $855 thousand which was recorded as part of the additional paid-in capital versus increase of accumulated deficit. Regarding the effect of the loss per share, see also Note 2.A.3. above.

B.	Intellectual Property Purchase Agreement

	In the middle of June 2023, the Company achieved the first performance milestone out of the five performance milestones outlined in the Intellectual Property Purchase Agreement (the “Agreement”) executed between the Company and Paul Goode, which is the Company’s Chief Executive Officer (the “Seller”) as October 7, 2022 (the “Closing Date”). As a result, upon the date of fulfillment of the performance milestone the Company is committed to issue 100,000 restricted shares to the Seller. During the periods of three and nine months ended September 30, 2023, the Company recorded stock-based compensation expenses of $0 and $131 thousand, respectively, which represents the quoted price of its Common Stock at the Closing Date, after taking into consideration a discount for lack of marketability at a rate of 30.4% over a restriction period of 1-year. As of September 30, 2023, achievement of all other performance milestones was not considered probable and thus no stock-based compensation expenses were recorded with respect to thereof.

C.	Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard

	On May 26, 2023, the Company received a letter from Nasdaq that it no longer complies with Rule 5550(a)(2) of Nasdaq’s Listing Rules (the “Rules”) which require listed securities to maintain a minimum bid price of $1 per share. However, the Rules provide the Company a compliance period of 180-days to regain compliance under which if at any time during 180-days period the closing bid price of the Company’s security is at least $1 for a minimum of ten consecutive business days, Nasdaq will provide the Company written confirmation of compliance and this matter will be closed. In the event the Company does not regain compliance by the 180th day, the Company may be eligible for additional time to regain compliance or may face delisting.