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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended
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Dec. 31, 2024
Accounting Policies [Abstract] |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (US GAAP).
| A. | Use of estimates in the preparation of financial statements
|  | The preparation of the consolidated financial statements in conformity with US 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 reported periods. Actual results could differ from those estimates. As applicable to these financial statements, the most significant estimates and assumptions relate to evaluation of going concern, the classification of financial instruments as equity or liability, share based compensation and the determination of the fair value of derivative liabilities.
| B. | Functional currency
|  | The functional currency of the Company is the US dollar, which is the currency of the primary economic environment in which it operates. In accordance with ASC 830, “Foreign Currency Matters” (ASC 830), balances denominated in or linked to foreign currency are stated on the basis of the exchange rates prevailing at the applicable balance sheet date. For foreign currency transactions included in the statement of operations, the exchange rates applicable on the relevant transaction dates are used. Gains or losses arising from changes in the exchange rates used in the translation of such transactions are carried as financing income or expenses. The functional currency of the Israeli subsidiary is the New Israeli Shekel (“NIS”) and its financial statements are included in consolidation, based on translation into US dollars. Accordingly, assets and liabilities were translated from NIS to US dollars using year-end exchange rates, and expense items were translated at average exchange rates during the year. Gains or losses resulting from translation adjustments are reflected in stockholders’ equity, under “accumulated other comprehensive income”.
SCHEDULE OF OFFICIAL EXCHANGE RATE
|  | 2024 |  |  | 2023 |
Official exchange rate of NIS 1 to US dollar |  |  | 0.274 |  |  |  | 0.272 |
Increase (Decrease) of the official exchange rate of NIS 1 to US dollar during the year: |  |  | 0.74 | % |  |  | (8.86 | )%
| C. | Principles of consolidation
|  | The consolidated financial statements include the accounts of the Company and its subsidiary. All intercompany balances and transactions have been eliminated in consolidation.
| D. | Cash and cash equivalents and restricted cash
|  | The Company considers all short-term investments, which are highly liquid investments with original maturities of three months or less at the date of purchase, to be cash equivalents. Restricted cash is invested in certificates of deposit, which are used to secure Integrity Israel’s obligations in respect of its credit card. For presentation of statement of cash flows purposes, restricted cash balances are included with cash and cash equivalents, when reconciling the reported period total amounts. The Company’s cash is held with financial institutions in the United States and Israel. Management believes that the financial institutions that hold the Company’s cash are financially sound and, accordingly, minimal credit risk exists with respect to these investments. Account balances held in the Unites States may, at times, exceed the Federal Deposit Insurance Corporation (FDIC) insurance limit. As of December 31, 2024 and 2023, the Company had $4,968 and $3,942, respectively, in excess of the FDIC insurance limit.
SCHEDULE OF RESTRICT CASH BALANCES ARE INCLUDED WITH CASH AND CASH EQUIVALENTS
|  | 2024 |  |  | 2023 |
|  | In thousands of US dollars |
|  | December 31, |  |  | December 31, |
|  | 2024 |  |  | 2023 |
Cash and cash equivalents |  | $ | 5,617 |  |  | $ | 4,492 |
Restricted cash |  | $ | 10 |  |  | $ | 10 |
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows |  | $ | 5,627 |  |  | $ | 4,502 |
| E. | Property and equipment, net
| 1. | Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. When an asset is retired or otherwise disposed of, the related carrying value and accumulated depreciation are removed from the respective accounts and the net difference less any amount realized from disposition is reflected in the statements of operations and comprehensive loss.
| 2. | Rates of depreciation:
SCHEDULE OF PROPERTY AND EQUIPMENT, RATES OF DEPRECIATION
|  | Years |
Computers and equipment |  |  | 3 |
Furniture and office equipment |  |  | 7-15 |
| F. | Impairment of long-lived assets
|  | The Group’s long-lived assets are reviewed for impairment in accordance with ASC 360, “Property, Plant and Equipment”, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. To date the Group did not incur any material impairment losses related to long lived assets.
| G. | Modification of equity-classified contracts
|  | The modification or exchange of equity-classified contracts, such as warrants that were classified as equity before the modification or exchange and remained eligible for equity classification after the modification, was accounted for in a similar manner to a modification of stock-based compensation. Accordingly, the incremental fair value from the modification or exchange (the change in the fair value of the instrument before and after the modification or exchange), due to the characteristics of the modification, was recognized as a reduction of retained earnings (or an increase of accumulated deficit) as a deemed dividend. Modifications or exchanges that result in a decrease in the fair value of an equity-classified share-based payment awards are not recognized. In addition, the amount of the deemed dividend is also recognized as an adjustment to earnings available to common shareholders for purposes of calculating earnings per share.
| H. | 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 recognizes 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 the allocated amount represents a discount which is amortized as finance expense to profit or loss using the 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 the effective interest method over the term of the note until its stated maturity.
| I. | Allocation of proceeds and related issuance costs
|  | When multiple instruments are issued in a single transaction (package issuance), the total gross proceeds from the transaction are allocated among the individual freestanding instruments identified. The allocation occurs after identifying all freestanding instruments and the subsequent measurement basis for those instruments. Financial instruments that are required to be subsequently measured at fair value (such as derivative liabilities) are measured at fair value and the remaining consideration is allocated to other financial instruments that are not required to be subsequently measured at fair value (such as liabilities measured at amortized cost, common shares and warrants eligible for equity classification), based on the relative fair value basis for such instruments. Issuance costs allocated to financial instruments that are required to be subsequently measured at fair value are immediately expensed. Issuance costs allocated to shares and warrants classified as equity components and are recorded as a reduction of additional paid-in capital. Issuance costs allocated to financial liabilities measured at amortized cost are recorded as a discount and accreted over the contractual term of the financial instrument using the effective interest method.
| J. | Warrants
| Equity classified warrants Certain warrants that were determined to be 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, were classified as equity instruments. As such warrants were issued together with financial instruments that are not subsequently measured at fair value, the warrants were measured based on allocation of the proceeds received by the Company in accordance with the relative fair value basis. Direct issuance expenses that were allocated to such warrants were deducted from additional paid-in capital.
| Warrants classified as derivative liabilities Upon initial recognition of Series A Warrants and Series B Warrants that were issued in November 2024 as part of an equity issuance and debt conversions, management considered the provisions of ASC 815-40, Derivatives and Hedging — Contracts in Entity’s Own Equity and determined that the settlement amount of Series A Warrants and Series B Warrants might not be based on an exchange of a fixed number of shares for a fixed amount of consideration and thus such Warrants are not eligible to be considered as indexed to the Company’s own shares. Accordingly, the Series A Warrants and Series B Warrants were accounted for as warrant derivative liability at fair value and the changes in fair values are carried to profit or loss. In accordance with ASC 210-10-20, the warrant derivative liability is presented as a noncurrent liability since its settlement will require the issuance of shares and not the use of any resources that are properly classified as current assets.
| K. | Leases
|  | The Company applies ASC Topic 842, “Leases” (“ASC 842”) under which the Company determines if an arrangement is a lease at inception. Leases are classified as either finance leases or operating leases. A lease is classified as a finance lease if any one of the following criteria are met: (i) the lease transfers ownership of the asset by the end of the lease term, (ii) the lease contains an option to purchase the asset that is reasonably certain to be exercised, (iii) the lease term is for a major part of the remaining useful life of the asset, (iv) the present value of the lease payments equals or exceeds substantially all of the fair value of the asset, or (v) the underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of lease term. A lease is classified as an operating lease if it does not meet any one of these criteria. Since all the Company’s lease contracts for premises do not meet any of the criteria above, the Company concluded that all its lease contracts should be classified as operating leases. Right of Use (“ROU”) assets and liabilities are recognized on the commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As most of the Company’s leases do not provide an implicit rate, the Company uses its Incremental Borrowing Rate (“IBR”) based on the information available on the commencement date in determining the present value of lease payments. The Company’s IBR is estimated to approximate the interest rate for collateralized borrowing with similar terms and payments and in economic environments where the leased asset is located. The ROU asset also includes any lease payments made prior to commencement and is recorded net of any lease incentives received. Moreover, the ROU asset may also include initial direct costs, which are incremental costs of a lease that would not have been incurred if the lease had not been obtained. The Company uses the long-lived assets impairment guidance in ASC 360-10, “Property, Plant, and Equipment - Overall”, to determine whether a ROU asset is impaired, and if so, the amount of the impairment loss to recognize. Certain leases include options to extend or terminate the lease. An option to extend the lease is considered in connection with determining the ROU asset and lease liability when it is reasonably certain that the Company will exercise that option. An option to terminate is considered unless it is reasonably certain that the Company will not exercise the option.
| L. | Income tax
|  | The Company accounts for income taxes in accordance with ASC 740, “Income Taxes”. Accordingly, deferred income taxes are determined utilizing the asset and liability method based on the estimated future tax effects of differences between the financial accounting and the tax bases of assets and liabilities under the applicable tax law. Deferred tax balances are computed using the enacted tax rates expected to be in effect when these differences reverse. Valuation allowances in respect of deferred tax assets are provided for, if necessary, to reduce deferred tax assets to amounts more likely than not to be realized.
|  | The Company accounts for uncertain tax positions in accordance with ASC Topic 740-10, which prescribes detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in an enterprise’s financial statements. According to ASC Topic 740-10, tax positions must meet a more-likely-than-not recognition threshold. The Company’s accounting policy is to classify interest and penalties relating to uncertain tax positions under income taxes, however the Company did not recognize such items in its fiscal 2024 and 2023 financial statements and did not recognize any liability with respect to unrecognized tax position in its balance sheet.
| M. | Research and development expenses
|  | Research and development expenses are charged to operations and comprehensive loss, as incurred.
| N. | Royalty-bearing grants
|  | Royalty-bearing grants from the Israeli Innovation Authority (IIA) to fund approved research and development projects are recognized at the time Integrity Israel is entitled to such grants, on the basis of the costs incurred and reduce research and development costs. To date, the cumulative research and development grants received by Integrity Israel from IIA amounted to $93. See also Note 5A below.
| O. | Basic and diluted loss per share
Basic loss per share for the year ended December 31, 2024 is computed by dividing the loss for the period applicable for Common Stockholders and the holders of the pre-funded warrants divided by the weighted average number of shares of Common Stock outstanding and shares of Common Stock to be issued upon the exercise of prefunded warrants during the period. Basic loss per share for December 31, 2023 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 and the holders of the pre-funded warrants divided by the weighted average number of shares of Common Stock outstanding and shares of Common Stock to be issued upon achievement of first performance milestone (see Note 5B below) and upon exercise of pre-funded warrants (see Note 8B below) during the period. 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 for other financial instruments such as convertible liabilities and other share settled derivative liabilities, 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 that will be issued upon exercise of all stock options and stock warrants, 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 a result of the exercise or conversion of these instruments was anti-dilutive SCHEDULE OF ANTIDILUTIVE NET LOSS AND WEIGHTED AVERAGE
|  | 2024 |  |  | 2023 |
|  | In thousands of US dollars |
|  | (except share data) |
|  | Year ended |
|  | December 31, |
|  | 2024 |  |  | 2023 |
Numerator: |  |  |  |  |  |  |  |
Net loss |  | $ | 22,597 |  |  | $ | 7,097 |
Deemed dividend related to trigger of down round protection feature (see Note 8C3 below) |  |  | - |  |  |  | 855 |
Net loss attributable to common stockholders |  | $ | 22,597 |  |  | $ | 7,952 |
Denominator: |  |  |  |  |  |  |  |
Shares of Common Stock used in computing basic and diluted net loss per common stock |  |  | 330,171 |  |  |  | 193,131 |
Shares of Common Stock to be issued upon exercise of pre-funded warrants (see Note 8B1 below) |  |  | - |  |  |  | 13,971 |
Shares of Common Stock to be issued upon achievement of first performance milestone (see Note 5B below) |  |  | - |  |  |  | 501 |
Weighted average number of Common Stock outstanding used in computing basic and diluted net loss per share |  |  | 330,171 |  |  |  | 207,603 |
Basic and diluted net loss per common stock |  | $ | 68.44 |  |  | $ | 34.18 |
See Note 14 regarding a significant issuance of shares as part of the exercise of the Series B Warrants subsequent to the balance sheet date.
| P. | Stock-based compensation
|  | The Company measures and recognizes the compensation expense for all equity-based payments to employees based on their estimated fair values in accordance with ASC 718, “Compensation-Stock Compensation”. Share-based payments including grants of stock options are recognized in the consolidated statement of operations and comprehensive loss as an operating expense based on the fair value of the award at the date of grant. The fair value of stock options granted is estimated using the Black-Scholes option-pricing model. The Company has expensed compensation costs, net of estimated forfeitures, applying the accelerated vesting method, over the requisite service period or over the implicit service period when a performance condition affects the vesting, and it is considered probable that the performance condition will be achieved. Share-based payments to non-employees are accounted for in accordance with ASC 718.
| Q. | Fair value of financial instruments
|  | ASC Topic 825-10, “Financial Instruments” defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. The Company considers the carrying amount of cash and cash equivalents, restricted cash, accounts receivable, other current assets, accounts payable and other current liabilities balances, to approximate their fair values due to the short-term maturities of such financial instruments. ASC Topic 825-10, establishes the following fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:
|  | Level 1 - Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.
|  | Level 2 - Observable prices that are based on inputs not quoted on active markets but corroborated by market data.
|  | Level 3 - Unobservable inputs are used when little or no market data is available. Level 3 inputs are considered as the lowest priority under the fair value hierarchy.
|  | The fair value of the financial instruments included in the working capital of the Company (cash and cash equivalents, accounts payable and other current assets and liabilities) approximates their carrying value.
The Company did not estimate the fair value of the loans received from stockholders since their repayment schedule has not yet been determined. There were no Level 3 assets or liabilities for the year ended December 31, 2023. The following table presents changes in Level 3 assets and liabilities measured at fair value for the year ended December 31, 2024: SCHEDULE OF ASSETS AND LIABILITIES MEASURED AT FAIR VALUE
|  | Liability |
Balance – November 14, 2024 – Warrant issuance date |  | $ | 16,626 |
Fair value adjustments – Derivative financial liability |  |  | 795 |
Balance – December 31, 2024 |  | $ | 17,421 |
The following table sets forth the Company’s assets and liabilities which are measured at fair value on a recurring basis by level within the fair value hierarchy: SCHEDULE OF ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS
|  | Fair Value Measurements as of December 31, 2024 |
|  | Level I |  |  | Level II |  |  | Level III |  |  | Total |
Liability: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Warrant derivative liability |  | $ | - |  |  | $ | - |  |  | $ | 17,421 |  |  | $ | 17,421 |
| R. | Segment reporting
|  | Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or (“CODM”). The Company has identified its Chief Executive Officer, Paul V. Goode, as the CODM who is responsible for making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business as one operating segment. The Company’s long-lived assets consist primarily of property and equipment, net, which are all held in the United States.
| S. | Concentrations of credit risk
|  | Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, and restricted cash. Cash and cash equivalents and restricted cash are deposited with a major bank in the United States. Management believes that such financial institutions are financially sound, accordingly, minimal credit risk exists with respect to these financial instruments. The Company does not have any significant off-balance-sheet concentration of credit risk, such as foreign exchange contracts, option contracts or other foreign hedging arrangements.
| T. | Contingencies
|  | The Company records accruals for loss contingencies arising from claims, litigation and other sources when it is probable that a liability has been incurred and the amount can be reasonably estimated. These accruals are adjusted periodically as assessments change or additional information becomes available. Legal costs incurred in connection with loss contingencies are expensed as incurred.
| U. | Warrants with down-round protection
|  | The Company disregards the down round feature when assessing whether the instrument is indexed to its own stock, for purposes of determining liability or equity classification in accordance with the provisions of ASU 2017-11, “Earnings Per Share” (ASU 2017-11). Based on its evaluation, management has determined that such warrants with down-round protection feature are eligible for equity classification.
Accordantly, upon the occurrence of an event that triggers a down round protection feature (i.e., when the exercise price of the warrants is adjusted downward because of the down round feature), the effect is accounted for as a deemed dividend and as a reduction of income available to common shareholders for purposes of basic earnings per share calculation. See also Note 2P above.
| V. | Recently adopted accounting pronouncements
|  | In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). This standard requires a public entity to disclose significant segment expenses and other segment items on an interim and annual basis. Additionally, it requires a public entity to disclose the title and position of the Chief Operating Decision Maker. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. A public entity should apply the amendments in this ASU retrospectively to all prior periods presented in the financial statements. The Company adopted ASU 2023-07 for the fiscal year ended December 31, 2024 and interim financial statements thereafter, on a retrospective basis for all prior periods presented in the financial statements. The adoption of ASU 2023-07 did not change the way that the Company identifies its reportable segments and, as a result, did not have a material impact on the Company’s financial position or results of operations. See (Note 13) - Segment Reporting for further information.
| W. | Recently issued accounting pronouncements, not yet adopted
|  | In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures” to require more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation, amortization, and depletion) included in certain expense captions presented on the face of the income statement. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026 and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements and related disclosures. The adoption of this pronouncement is not expected to have a material impact on the Company’s consolidated financial statements.
|  | In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures related to improvements to income tax disclosures. The amendments in this update require enhanced jurisdictional and other disaggregated disclosures for the effective tax rate reconciliation and income taxes paid. The amendments in this update are effective for fiscal years beginning after December 15, 2024. The adoption of this pronouncement is not expected to have a material impact on the Company’s consolidated financial statements.

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