Use of Estimates in the Preparation of Financial Statements

B.	Use of Estimates in the Preparation of Financial Statements

The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates. As applicable to these interim financial statements, the most significant estimates and assumptions include identification and measurement of financial instruments.

Cash and Cash Equivalents

D.	Cash and Cash Equivalents

Cash equivalents are short-term highly liquid investments which include short-term bank deposits (up to three months from date of deposit), that are not restricted as to withdrawals or use that are readily convertible to cash with maturities of three months or less as of the date acquired.

Convertible Promissory Notes

F.	Convertible Promissory Notes

Upon initial recognition of convertible promissory notes and similar instruments, the Company considers the provisions of ASC 815-40, “Derivatives and Hedging - Contracts in Entity’s Own Equity” (“ASC 815-40”) in order to determine whether the conversion features embedded within the convertible instrument should be separated from the host instrument.

When it is determined that an embedded derivative required to be bifurcated (such as embedded conversion feature that does not qualify for equity classification), the Company recognized the embedded derivative bifurcated as a separate derivative liability upon initial recognition and on subsequent periods at fair value. The remaining consideration amount received or allocated to the entire convertible instrument is allocated to the host debt instrument. The difference between the face value of the host and such an allocated amount represents a discount which is amortized as finance expense to profit or loss using an effective interest method over the term of the note until its stated maturity.

When it is determined that the embedded conversion feature qualifies for equity classification (such when the embedded conversion option, if it were freestanding, is not qualified as a derivative in accordance with the provisions of ASC 815-10, “Derivatives and Hedging” since its terms did not require or permit net settlement or when the embedded conversion option is indexed to the entity’s own stock), the conversion option is not bifurcated. When bifurcation is not required, the Company considers whether the debt instrument involves a significant premium (i.e. when the proceeds received or allocated upon issuance exceed the principal amount that will be paid at maturity). When it is determined that a substantial premium exists, the entire premium is allocated to paid-in capital and when it is determined, otherwise no additional accounting is required and the convertible promissory note is accounted for at amortized cost using effective interest method over the term of the note until its stated maturity.

Warrants

H.	Warrants

Certain warrants that were issued to several holders are classified as a component of permanent equity since they are freestanding financial instruments that are legally detachable and separately exercisable, do not embody an obligation for the Company to repurchase its own shares, and permit the holders to receive a fixed number of Ordinary Shares upon exercise for a fixed exercise price and thus, are considered as indexed to the Company’s own shares. As such warrants were issued together with financial instruments that are not subsequently measured at fair value and the warrants were measured based on allocation of the proceeds received by the Company in accordance with the relative fair value basis. When applicable, direct issuance expenses that were allocated to certain warrants were deducted from additional paid-in capital.

Basic and diluted loss per share

J.	Basic and diluted loss per share

Basic loss per share is computed by dividing the loss for the period applicable (after considering the effect of deemed dividend related to trigger of down round protection feature) for Common Stockholders by the weighted average number of shares of Common Stock outstanding and shares of Common Stock to be issued upon achievement of certain performance milestones during the period and upon exercise of pre-funded warrants. In computing, diluted loss per share, basic earnings per share are adjusted to reflect the potential dilution that could occur upon the exercise of options or warrants issued or granted using the “treasury stock method” and using the if-converted method with respect to certain convertible promissory notes and bifurcated redemption feature accounted for as derivative financial liability, if the effect of each of such financial instruments is dilutive. In computing diluted loss per share, the average stock price for the period is used in determining the number of Common Stock assumed to be purchased from the proceeds to be received from the exercise of stock options or stock warrants.

Shares to be issued upon exercise of all options and warrants, convertible promissory notes and bifurcated redemption feature, have been excluded from the calculation of the diluted net loss per share for all the reported periods for which net loss was reported because the effect of the common shares issuable as result of the exercise or conversion of these instruments was anti-dilutive.

The net loss and the weighted average number of shares of Common Stock used in computing basic and diluted net loss per Common Stock for the period of three and nine months ended September 30, 2024 and 2023, is as follows:

	2024			2023			2024			2023
	US dollars (except share data)						US dollars (except share data)
	Three-month period ended September 30,						Nine-month period ended September 30,
	(Unaudited)						(Unaudited)
	2024			2023			2024			2023

Numerator:
Net loss	$	5,087		$	2,223		$	12,503		$	4,685
Deemed dividend related to trigger of down round protection feature		-			-			-			855
Net loss attributable to common stockholders	$	5,087		$	2,223		$	12,503		$	5,540

Denominator:
Shares of Common Stock used in computing basic and diluted net loss per common stock		5,564,880			4,593,733			5,340,532			3,758,590
Shares of Common Stock to be issued upon exercise of pre-funded warrants		-			-			-			241,246
Shares of Common Stock to be issued upon achievement of performance milestones		30,000			-			15,275			6,691
Weighted average number of Common Stock outstanding used in computing basic and diluted net loss per share		5,594,880			4,593,733			5,355,806			4,006,527
Basic and diluted net loss per common stock	$	(0.91	)	$	(0.49	)	$	(2.39	)	$	(1.38	)