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SIGNIFICANT TRANSACTIONS

3 Months Ended

Mar. 31, 2024

NOTE 3 - SIGNIFICANT TRANSACTIONS

A.	Exercise of pre-funded warrants

	On January 3, 2024, a number of 1,976,470 pre-funded warrants granted through underwritten public offering in April 2023 have been fully exercised into the same number of shares of Common Stock of the Company.

B.	Exchange Agreement

	On February 13, 2024, the Company entered into an Exchange Agreement with certain warrantholders (the “Holders”), pursuant to which the Company and the Holders agreed to exchange (the “Exchange”) warrants with down round protection feature exercisable to common shares (the “Warrants”) owned by the Holders for shares of Common Stock to be issued by the Company.

	On February 13, 2024, the Company closed the Exchange and issued to the Holders on February 15, 2024 an aggregate of 3,593,203 shares of Common Stock in exchange for 4,381,953 Warrants (the “Shares”).

	It was also agreed that the Holders will not, during the period (“Lock-Up Period”) (i) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any Shares, (ii) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Shares of, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Shares or such other securities, in cash or otherwise, (iii) make any demand for or exercise any right with respect to, the registration of any Shares or any security convertible into or exercisable or exchangeable for shares of common stock, or (iv) publicly announce an intention to effect any transaction specific in clause (i), (ii) or (iii) above, provided however that the Holder, during the Lock-Up Period, may (a) sell or contract to sell Shares at a price higher than $0.50 per Share on any trading day up to 10% of the daily volume of Shares or (b) sell or contract to sell Shares at a price higher than $0.80 per Share on any trading day with no limitation on volume. The Lock-Up Period shall expire at the earliest of (i) 365 days after the date hereof or (ii) until the Shares traded above $1.00 per Share for five consecutive trading days. The Company accounted for the Exchange of the aforesaid warrants as deemed dividend which was calculated at the closing date by the management using the assistance of external appraiser as the excess of fair value of the share to be issued after taking into consideration a discount for lack of marketability at a rate of 16.81% over the Lock-Up Period over the fair value of the original equity instrument (i.e. warrants which included down round protection feature). However, since the fair value of the new equity instrument was estimated as lesser than the fair value of the replaced equity instrument, deemed dividend was not recorded.

C.	Lease Agreement

	On February 19, 2024, the Company entered into Lease Agreement (the “Agreement”) with Tapsak Enterprises LLC dba Virginia Analytical (the “Landlord”) under which it was agreed that the Company will lease from the Landlord a premises located in Front Royal, Virginia area for a monthly rental fee of $2.5 over a period of 3-years commencing March 1, 2024 through February 28, 2027 (the “Initial Lease Period”). A security deposit of $2.5 which represents a one month payment is held by the Landlord and will be returned to the Company at the end of the Initial Lease Period.

	In addition, the Company has an option to renew the Initial Lease Period for another two additional periods of 3-years each following the Initial Lease Period (the “Option Term”), following advanced notice as defined in the Agreement. The monthly rental fee over the Option Term shall be the fair market rate which is determined as the comparable cost for similar property in the Front Royal, Virginia area.

	In accordance with the provision of ASC 842, Leases, at the commencement date of the Agreement, the Company recognized the right to usage asset equals to lease liability in total amount of $79. The lease liability was measured at the present value of the future lease payments, which are discounted based on an estimate of the estimated interest rate that the Company would be required to pay in order to borrow a similar amount for a similar period in order to obtain a similar amount on the date of first recognition of the lease (using a discount rate of 9.03%). As part of the lease term, the Company considered only the Initial Lease Period, as the exercise of the option to extend the period was not considered as reasonably certain.

Right of usage asset:

SCHEDULE OF RIGHT OF USAGE ASSET

	Premises
Cost
Balance as of January 1, 2024		-
Additions		79
Balance as of March 31, 2024		79
Accumulated amortization
Balance as of January 1, 2024		-
Additions		2
Balance as of March 31, 2024		2

Amortized cost as of March 31, 2024		77

Lease liability:

SCHEDULE OF LEASE LIABILITY

	Premises

Balance as of January 1, 2024		-
Additions		79
Interest expenses		1
Lease payments		(3	)

Balance as of March 31, 2024		77

Amounts recognized in statements of cash flow:

	Three months period ended March 31, 2024

Amortization of the right for usage asset		2
Interest expense in respect of lease liability		1
Repayment of principal in respect of lease liability		3

Total negative cash flows in respect of leasing for the period of three months ended March 31, 2024 are approximately $3.

Analysis of contractual payment dates of lease liability as of March 31, 2024:


Up to a year	$	30
Between 1-2 years		30
More than 2 years		28
Total (undiscounted)	$	88

GLUCOTRACK INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)(CONT.)

(in thousands of US Dollars)