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COMMON STOCK AND WARRANTS WITH-DOWN ROUND PROTECTION
 12 Months Ended
Dec. 31, 2024
Equity [Abstract]  
COMMON STOCK AND WARRANTS WITH-DOWN ROUND PROTECTION

NOTE 8 – COMMON STOCK AND WARRANTS WITH-DOWN ROUND PROTECTION

 

  A. Description of the rights attached to the Common Stock
     
    Each share of Common Stock entitles the holder to one vote, either in person or by proxy, on each matter submitted to the approval of the Company’s stockholders. The holders of Common Stock are not permitted to vote their shares cumulatively.

 

  B. Equity Issuances
     
   

1. 2023 Equity Issuances

 

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) 53,765 shares of common stock and (ii) 19,765 pre-funded warrants at a price to the public of $136 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 19,765 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.

 

On January 3, 2024, the above pre-funded warrants have been fully exercised to 19,765 shares of Common Stock of the Company.

 

2. 2024 Equity Issuances

 

See Notes 4H, 4I and 4J relating to the issuances of shares during 2024.

 

3. Subsequent event issuances

 

See Note 14 regarding a significant issuance of shares as a settlement of Series B Warrants subsequent to the balance sheet date.

     
  C. Stock-based compensation

 

  1. Plan
     
    On January 11, 2010, the Company’s Board of Directors approved and adopted the 2010 Share Incentive Plan (the “Plan”), pursuant to which the Company’s Board of Directors may award share options to purchase the Company’s Common Stock as well as restricted shares, Restricted Stock Units (the “RSU”) and other share-based awards to designated participants. Subject to the terms and conditions of the Plan, the Company’s Board of Directors has full authority in its discretion, from time to time and at any time, to determine (i) the designate participants; (ii) the terms and provisions of the respective award agreements, including, but not limited to, the number of share options to be granted to each optionee, the number of shares to be covered by each share option, provisions concerning the time and the extent to which the share options may be exercised and the nature and duration of restrictions as to the transferability or restrictions constituting substantial risk of forfeiture and to cancel or suspend awards, as necessary; (iii) determine the fair market value of the shares covered by each award; (iv) make an election as to the type of approved 102 Option under Israeli tax law; (v) designate the type of share options; (vi) take any measures, and to take actions, as deemed necessary or advisable for the administration and implementation of the Plan; (vii) interpret the provisions of the Plan and to amend from time to time the terms of the Plan.

 

  2. Grant of equity awards to employees

 

  A. In August 2023, the Company granted Ms. Drinda Benjamin, the Vice President, Marketing of the Company, 2,220 options estimated at fair value of $51, to purchase the same number of Common Stock, with an exercise price per share equals to the greater of (A) $136 per share or (B) the closing price of a share of Common Stock on the grant date, as reported by Bloomberg L.P., which shall vest in equal monthly installments over a period of 3-years following the grant date.

 

 

  B. On June 14, 2024, the Board of Directors approved the cancellation of all outstanding stock options previously granted to employees, directors, and officers of the Company. Concurrently, the Board authorized the issuance of new stock options to the relevant parties. The new stock options were issued in replacement with exercise price $245.

 

  C. During the years ended December 31, 2024 and 2023, the Company recorded stock-based compensation expenses of $173 and $281, respectively.

 

  D. The following table presents the Company’s stock options (excluding RSU) activity for employees and members of the Board of Directors of the Company under the Plan, for the years ended December 31, 2024 and 2023:

 

  

Number of

Share Options

  

Weighted

Average

Exercise Price

  

Weighted

average

remaining

contractual

life

  

Intrinsic

value

 
       $   (years)   $ 
                 
Outstanding as of December 31, 2022   8,046    152    2.1    - 
Granted   2,221    28    9.7    - 
Forfeited or expired   (269)   1290    1.7    - 
Outstanding as of December 31, 2023   9,998    90    8.0    - 
Granted   6,438    49.72    9.37    - 
Cancelled   -    -    -    - 
Forfeited or expired   -    -    -    - 
Outstanding as of December 31, 2024   16,436    49.72    9.37    - 
Exercisable as of December 31, 2024   11,249    *49.11    9.41    -  

 

*After modification of exercise price

 

  The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the deemed fair value of the Company’s Ordinary Shares on the last day of each of the applicable reported period and the exercise price, multiplied by the number of in-the-money share options) that would have been received by the share option holders had all share options holders exercised their share options on December 31 of each of the reported period. This amount is impacted by the changes in the fair market value of the Company’s Ordinary Share.

 

  E. During the years ended December 31, 2024 and 2023, stock options have not been exercised into Common Stock.

 

  F. The following table presents the assumptions used to estimate the fair values of the share options granted in the reported periods presented:

 

   2024   2023 
  

Years ended

December 31

 
   2024   2023 
         
Volatility (%)   207-288%   220%
Risk-free interest rate (%)   3.51-4.64%   4.7%
Dividend yield (%)   -    - 
Expected life (years)   3    3 
Exercise price ($)   41-58    140 
Share price ($)   49.0    30 

 

 

  G. As of December 31, 2024, there was $298 of unrecognized compensation expense related to unvested stock options. The Company recognizes compensation expense on an accelerated vesting basis over the requisite service periods, which results in a weighted average period of approximately 1.9 years over which the unrecognized compensation expense is expected to be recognized.

 

  3. Grant of equity awards to non-employees

 

  A. Upon closing of underwritten U.S. public offering in 2023 as noted in Note 8B above, a down round protection feature of certain previously granted warrants, was triggered through the reduction of their original exercise prices from a price in a range of $335 -$7,020 to a price of $136 which represented the public offering price. Such reduction was accounted for in accordance with the provisions of ASU 2017-11 as a deemed dividend estimated at a 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 2O above.
     
  B. The following table presents the Company’s warrants activity for the years ended December 31, 2024 and 2023:

 

  

Number of

Share Warrants

  

Weighted

Average

Exercise Price

  

Weighted

average

remaining

contractual

life

  

Intrinsic

value

 
      $   (years)   $ 
Outstanding as of December 31, 2023   -    -    -    - 
Granted   1,278,259    39.66    9.31    - 
Cancelled   -    -    -    - 
Forfeited or expired   -    -    -    - 
Outstanding as of December 31, 2024   1,278,259    39.66    9.31    - 
                     
Exercisable as of December 31, 2024   1,278,259    39.66    9.31    - 

 

  The total compensation cost related to all of the Company’s equity-based awards recognized during the years ended December 31, 2024 and 2023 was comprised as follows:

 

         
   In thousands of US dollars 
  

December 31,

2024

  

December 31,

2023

 
         
Research and development   307    176 
General and administrative   364    159 
Total compensation cost    671    335