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COMMON STOCK AND WARRANTS
 3 Months Ended
Mar. 31, 2025
Equity [Abstract]  
COMMON STOCK AND WARRANTS

NOTE 9 – COMMON STOCK AND WARRANTS

 

1.On January 2, 2025, the Company consummated a Private Placement transactions contemplated by the securities purchase agreement, dated December 10, 2024, and issued 1,704,116 shares; pre-funded warrants to purchase 4,545,884 shares; and warrants to purchase 9,375,000 shares of the Company’s common stock at an exercise price of $0.24. The Company received gross proceeds of $1,500 as a result of such issuances.

 

During February and March 2025, the Company issued 1,573,265 and 1,747,620 shares of common stock, respectively, following exercises of pre-funded warrants.

 

The Company considered the guidelines of ASC 815 and determined that the warrants issued in the Private Placement meet the definition of a liability and were therefore classified as warrant liabilities in the balance sheet. The pre-funded warrants were classified as equity.

 

Upon initial recognition, the Company calculated the warrant liabilities at their fair value at $9.6 million, resulting in a non-cash loss of approximately $8.1 million, which was recognized in the statement of comprehensive loss.

 

On March 14, 2025, holders of warrants to purchase 729,166 shares of common stock exercised their warrants at an exercise price of $0.24 for total consideration of $175. In connection with the exercise, the Company calculated the fair value of the exercised warrants as of the date of exercise and recognized a non-cash gain of approximately $534, reflecting the difference between the carrying amount of the warrant liabilities and their fair value at the time of exercise.

 

 

N2OFF, INC.

 

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (unaudited)

 

NOTE 9 – COMMON STOCK (continued)

 

As of March 31, 2025, the Company calculated the fair value of the remaining warrant liabilities, resulting in a non-cash gain of approximately $7 million, which was recognized in statement of comprehensive loss.

 

The fair value of the warrant liabilities was determined using a Black-Scholes option pricing module. The assumptions used to perform the calculations are detailed below:

 

Fair value of the conversion feature  January 2, 2025   March 14, 2025   March 31, 2025 
Expected volatility (%) (*)   140.61%   151.68%   151.68%
Risk-free interest rate (%)   4.38%   4.09%   3.96%
Expected dividend yield   0.0%   0.0%   0.0%
Expected term of options (years)   5.5    5.3    5.25 
Exercise price (US dollars)  $0.24   $0.24   $0.24 
Share price (US dollars)  $1.07   $0.31   $0.24 
Fair value (U.S. dollars)  $9,651   $212   $1,912 

 

(*)The expected volatility was based on the historical volatility of the share price of the Company.

 

  2.

During the three months ended March 31, 2025, the Company recorded share base compensation expenses in General and Administrative expenses in the amount of $41 related to shares issued by the company to service providers by December 31, 2023.