0001213900-22-028977.txt : 20220523 0001213900-22-028977.hdr.sgml : 20220523 20220523163225 ACCESSION NUMBER: 0001213900-22-028977 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 39 CONFORMED PERIOD OF REPORT: 20220331 FILED AS OF DATE: 20220523 DATE AS OF CHANGE: 20220523 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Samsara Luggage, Inc. CENTRAL INDEX KEY: 0001530163 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-RETAIL STORES, NEC [5990] IRS NUMBER: 260299456 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-54649 FILM NUMBER: 22952170 BUSINESS ADDRESS: STREET 1: ONE UNIVERSITY PLAZA, SUITE 505 CITY: HACKENSACK STATE: NJ ZIP: 07601 BUSINESS PHONE: 1 (855)-256-7477 MAIL ADDRESS: STREET 1: ONE UNIVERSITY PLAZA, SUITE 505 CITY: HACKENSACK STATE: NJ ZIP: 07601 FORMER COMPANY: FORMER CONFORMED NAME: Darkstar Ventures, Inc. DATE OF NAME CHANGE: 20110915 10-Q 1 f10q0322_samsaralug.htm QUARTERLY REPORT

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

for the quarterly period ended March 31, 2022

 

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

for the transition period from ___________ to ___________

 

Commission file number 000-54649

 

SAMSARA LUGGAGE, INC.

(Exact name of registrant as specified in its charter)

  

Nevada  
26-0299456
(State or other jurisdiction of
incorporation or organization)
  (I.R.S. Employer
Identification No.)
     

135 E. 57th Street, Suite 18-130

New York, New York

  10022
(Address of principal executive offices)   (Zip Code)

  

(855)-256-7477

(Registrant’s telephone number, including area code)

 

 

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
         

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒     No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒     No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer Accelerated filer
Non-accelerated filer Smaller reporting company
    Emerging Growth Company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange Act).  Yes ☐     No

 

The number of shares of the registrant’s common stock outstanding as of May 23, 2022 was 2,152,945 shares.

 

 

 

 
 

 

SAMSARA LUGGAGE, INC.

INDEX TO QUARTERLY REPORT ON FORM 10-Q

 

  Page No.
PART I. FINANCIAL INFORMATION
     
Item 1. Interim Financial Statements (unaudited) 1
  Condensed Balance Sheets at March 31, 2022 (unaudited) and December 31, 2021 (audited) 1
  Condensed Statements of Operations for the Three Months Ended March 31, 2022 and 2021 (unaudited) 2
  Condensed Consolidated Statements of Changes in Stockholders’ Deficit for the three months ended March 31, 2022 and 2021 (unaudited) 3
  Condensed Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021 (unaudited) 4
  Notes to Condensed Financial Statements (unaudited) 5
Item 2. Management’s Discussion and Analysis 17
Item 3. Quantitative and Qualitative Disclosures about Market Risk 22
Item 4. Controls and Procedures 22
     
PART II. OTHER INFORMATION
 
Item 1. Legal Proceedings 23
Item 1A. Risk Factors 23
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 23
Item 3. Defaults upon Senior Securities 23
Item 4. Mine Safety Disclosures 23
Item 5. Other Information 23
Item 6. Exhibits 23
  Signatures 25

 

i

 

 

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

SAMSARA LUGGAGE, INC.

CONDENSED BALANCE SHEETS

(Dollars in thousands, except per-share amounts)

 

   March 31,
2022
   December 31,
2021
 
   (Unaudited)     
         
Assets        
Current assets        
Cash and cash equivalents  $349   $827 
Inventory   188    94 
Other current assets   61    53 
Total current assets   598    974 
           
Non-current assets          
Property and equipment, net   3    3 
Total assets  $601   $977 
           
Liabilities and Stockholders’ Deficit          
Current liabilities          
Accounts payable  $55   $74 
Other current liabilities   54    131 
Related party payable   136    147 
Deferred revenue   26    26 
Convertible notes and short-term loans   460    256 
Conversion option derivative liability   611    1,017 
Warrant derivative liability   14    24 
Total current liabilities   1,356    1,675 
           
Total liabilities   1,356    1,675 
           
Stockholders’ Deficit          
Common stock, $0.0001 par value; 7,500,000,000 shares authorized; 2,152,945 and 2,055,487 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively.   
-
    
-
 
Additional paid-in capital   9,908    9,852 
Services receivable   (180)   (356)
Accumulated deficit   (10,483)   (10,194)
Total stockholders’ deficit   (755)   (698)
           
Total Liabilities and Stockholders’ Deficit  $601   $977 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

 

1

 

 

SAMSARA LUGGAGE, INC.

CONDENSED STATEMENTS OF OPERATIONS

(Dollars in thousands, except per-share amounts)

(Unaudited)

 

    For the Three Months Ended
March 31,
 
    2022     2021  
             
REVENUE   $ 31       75  
                 
COST OF GOODS SOLD     20       37  
                 
GROSS PROFIT     11       38  
                 
OPERATING EXPENSES                
Research and development     40       -  
Sales and marketing     246       61  
General and administrative     168       265  
TOTAL OPERATING EXPENSES     454       326  
                 
OPERATING LOSS     (443 )     (288 )
                 
FINANCING INCOME (EXPENSES)                
Interest expense     (208 )     (72 )
Income (expenses) in respect of warrants issued and convertible component in convertible loan, net interest expenses     362       (275 )
TOTAL FINANCING INCOME (EXPENSES)     154       (347 )
                 
NET LOSS   $ (289 )   $ (635 )
                 
Per-share data                
Basic and diluted loss per share   $ (0.14 )   $ (0.76 )
                 
Weighted average number of common shares outstanding     2,089,056       841,003  

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

 

2

 

 

SAMSARA LUGGAGE, INC.

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ (DEFICIT) EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021

(Dollars in thousands, except per-share amounts)

(Unaudited)

 

   Common Stock   Additional
Paid-In
   Services   Accumulated   Total
Stockholders’
(Deficit)
 
   Shares   Amount   Capital   receivable   Deficit   Equity 
Balance at January 1, 2022   2,055,487   $
            -
   $9,852   $(356)  $(10,194)  $(698)
Conversion of convertible debt into common shares   97,458    
-
    56    
-
    
-
    56 
Amortization of services   -    
-
    
-
    176    
-
    176 
Net loss   -    
-
    
-
    
-
    (289)   (289)
Balance at March 31, 2022 (unaudited)   2,152,945   $
-
   $9,908   $(180)  $(10,483)  $(755)
                               
Balance at January 1, 2021   786,700   $
-
   $6,463   $(999)  $(6,376)  $(912)
Conversion of convertible debt into common shares   62,464    
-
    308    
-
    
-
    308 
Amortization of services   -    
-
    
-
    159    
-
    159 
Net loss   -    
-
    
-
    
-
    (635)   (635)
Balance at March 31, 2021 (unaudited)   849,164   $
-
   $6,771   $(840)  $(7,011)  $(1,080)

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

 

3

 

 

SAMSARA LUGGAGE, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(Dollars in thousands, except per-share amounts)

(Unaudited)

 

    For the Three Months Ended March 31,  
    2022     2021  
Cash Flows From Operating Activities            
Net loss   $ (289 )   $ (635 )
Adjustments to reconcile net loss to net cash used in operating activities                
Amortization of services receivable     176       159  
Interest on convertible note and short-term loan and amortization of issuance cost     208       74  
Expenses in respect of warrants issued and convertible component in convertible loan, net interest expenses     (364     275  
Change in operating assets and liabilities                
Inventory     (94 )     18  
Other current assets     (8     -  
Accounts payable     (19)       25  
Other current liabilities     (77 )     -  
Related parties payable     (11 )     38  
Net cash provided by (used) in operating activities     (478 )     (46 )
                 
Cash Flows From Investing Activities     -       -  
                 
Cash Flows From Financing Activities     -       -  
                 
Net change in cash and cash equivalents     (478 )     (46 )
                 
Cash and cash equivalents, beginning of period     827       54  
Cash and cash equivalents, end of period   $ 349     $ 8  
                 
Supplemental disclosure of cash flow information                
Cash paid for interest   $ -     $ -  
Cash paid for income tax   $ -     $ -  
                 
Non-cash investing and financing activities                
Common stock issued for conversion of convertible note and accrued interest   $ 56     $ 288  
Common stock issued against accounts payables   $ -     $ 20  

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

 

4

 

 

SAMSARA LUGGAGE, INC.

NOTES TO FINANCIAL STATEMENTS

(U.S. dollars in thousands, except per share data) 

 

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

 

  A.

The Company was incorporated on May 7, 2007 under the name, “Darkstar Ventures, Inc.” under the laws of the State of Nevada. The Company is a global smart luggage and smart travel brand. Samsara Luggage unveiled its Next Generation smart carry-on at the 2020 Consumer Electronics Show (CES). The Next Generation is the first to market a Wi-Fi Hotspot technology for travelers to access a secured network globally. Samsara Luggage also launched Essentials by Samsara, a safety kit providing commuters with a new layer of safety with protective items like facemasks, hand sanitizer, disposable gloves and alcohol wipes. These kits are sold individually and gifted to customers with purchase of the Carry-on Aluminum suitcase or Smart Weekender bag.

 

During the last quarter of 2020, Samsara launched Sarah & Sam Fashion and Lifestyle Collection. Sarah& Sam is a part of Samsara Direct business model prompted by the travel limitations due to the coronavirus pandemic, leveraging the company’s established digital assets and manufacturing and fulfillment supply chain capabilities to offer additional consumer products that respond to the changing needs of the market.

 

On November 12, 2019, the Company completed its merger with the Delaware corporation that was previously known as “Samsara Luggage, Inc.” (“Samsara Delaware”) in accordance with the terms of the Merger Agreement and Plan of Merger, dated as of May 10, 2019, (the “Merger Agreement”) by and among the Company, Samsara Delaware, and Avraham Bengio, pursuant to which Samsara Delaware merged with and into the Company, with the Company being the surviving corporation (the “Merger”). Following the completion of the Merger, the business of the Company going forward became the business of Samsara Delaware prior to the Merger, namely, designing, manufacturing, and selling high quality luggage products to meet the evolving needs of frequent travelers and also seeking to present new technologies within the aluminum luggage industry, including an aluminum “smart” suitcase.

 

The Common Stock listed on the OTC Pink Marketplace, previously trading through the close of business on November 11, 2019 under the ticker symbol “DAVC,” commenced trading on the OTC Pink Marketplace under the ticker symbol “SAML” on November 12, 2019. The Common Stock has a new CUSIP number, 79589J101.

 

B.Going Concern

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As of March 31, 2022, the Company had approximately $349 in cash and cash equivalents, approximately $758 in deficit of working capital, a stockholders’ deficiency of approximately $755 and an accumulated deficit of approximately $10,483. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Company’s ability to continue as a going concern is dependent upon raising capital from financing transactions and revenue from operations. Management anticipates their business will require substantial additional investments that have not yet been secured. Management is continuing in the process of fund raising in the private equity and capital markets as the Company will need to finance future activities. These financial statements do not include any adjustments that may be necessary should the Company be unable to continue as a going concern.

 

5

 

 

SAMSARA LUGGAGE, INC.
NOTES TO FINANCIAL STATEMENTS
(U.S. dollars in thousands, except per share data) 

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

 

Unaudited Interim Financial Statements

 

The accompanying unaudited financial statements include the accounts of the Company, prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and with the instructions to Form 10-Q and Article 10 of U.S. Securities and Exchange Commission Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the financial statements presented herein have not been audited by an independent registered public accounting firm but include all material adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the financial condition, results of operations and cash flows for the for three-months ended March 31, 2022. However, these results are not necessarily indicative of results for any other interim period or for the year ended December 31, 2022. The preparation of financial statements in conformity with GAAP requires the Company to make certain estimates and assumptions for the reporting periods covered by the financial statements. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses. Actual amounts could differ from these estimates.

 

Certain information and footnote disclosures normally included in financial statements in accordance with generally accepted accounting principles have been omitted pursuant to the rules of the U.S. Securities and Exchange Commission (“SEC”). The accompanying unaudited condensed financial statements should be read in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on April 11, 2022 (the “Annual Report”). For further information, reference is made to the financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“‘US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. As applicable to the financial statements, the most significant estimates and assumptions relate to the measurement of the convertible notes and Going Concern.

 

Derivative Liabilities and Fair Value of Financial Instruments

 

Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments and measurement of their fair value for accounting purposes. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt under ASC 470, the Company will continue its evaluation process of these instruments as derivative financial instruments under ASC 815.

 

Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives.

  

Fair value of certain of the Company’s financial instruments including cash, accounts receivable, account payable, accrued expenses, notes payables, and other accrued liabilities approximate cost because of their short maturities. The Company measures and reports fair value in accordance with ASC 820, “Fair Value Measurements and Disclosure” defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value investments.

 

6

 

 

SAMSARA LUGGAGE, INC.
NOTES TO FINANCIAL STATEMENTS
(U.S. dollars in thousands, except per share data) 

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (cont.)

 

Fair value, as defined in ASC 820, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of an asset should reflect its highest and best use by market participants, principal (or most advantageous) markets, and an in-use or an in-exchange valuation premise. The fair value of a liability should reflect the risk of nonperformance, which includes, among other things, the Company’s credit risk.

 

Valuation techniques are generally classified into three categories: the market approach; the income approach; and the cost approach. The selection and application of one or more of the techniques may require significant judgment and are primarily dependent upon the characteristics of the asset or liability, and the quality and availability of inputs. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 also provides fair value hierarchy for inputs and resulting measurement as follows:

 

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities.

 

Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities; and

 

Level 3: Unobservable inputs for the asset or liability that are supported by little or no market activity, and that are significant to the fair values.

 

Fair value measurements are required to be disclosed by the Level within the fair value hierarchy in which the fair value measurements in their entirety fall. Fair value measurements using significant unobservable inputs (in Level 3 measurements) are subject to expanded disclosure requirements including a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings, and a description of where those gains or losses included in earning are reported in the statement of income.

 

The Company records a debt discount related to the issuance of convertible debts that have conversion features at adjustable rates. The debt discount for the convertible instruments is recognized and measured by allocating a portion of the proceeds as an increase in additional paid-in capital and as a reduction to the carrying amount of the convertible instrument equal to the fair value of the conversion features. The debt discount will be accreted by recording additional non-cash gains and losses related to the change in fair values of derivative liabilities over the life of the convertible notes.

 

7

 

 

SAMSARA LUGGAGE, INC.
NOTES TO FINANCIAL STATEMENTS
(U.S. dollars in thousands, except per share data) 

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (cont.)

 

The Company’s financial assets and liabilities that are measured at fair value on a recurring basis by level within the fair value hierarchy are as follows:

 

   Balance as of March 31, 2022 
   Level 1   Level 2   Level 3   Total 
   (U.S. dollars in thousands) 
Liabilities:                
Fair Value of convertible component in convertible loan, net of discounts and debt issue costs   
       -
    
       -
    611    611 
Fair value of warrants issued in convertible loan   
-
    
-
    14    14 
Total liabilities   
-
    
-
    625    625 

 

   Balance as of December 31, 2021 
   Level 1   Level 2   Level 3   Total 
   (U.S. dollars in thousands) 
Liabilities:                
Fair Value of convertible component in convertible loan, net of discounts and debt issue costs   
         -
    
        -
    1,017    1,017 
Fair value of warrants issued in convertible loan   
-
    
-
    24    24 
Total liabilities   
-
    
-
    1,041    1,041 

 

Reclassification

 

Certain comparative figures have been reclassified to conform to current period presentation.

 

Recent accounting pronouncements

 

From time to time, new accounting pronouncements are issued by the Financial Accounting Standard Board (“FASB”) or other standard setting bodies that the Company adopts as of the specified effective date. Unless otherwise discussed, the Company does not believe that the impact of recently issued standards that are not yet effective will have a material impact on the Company’s financial position or results of operations upon adoption. 

 

8

 

 

SAMSARA LUGGAGE, INC.
NOTES TO FINANCIAL STATEMENTS

(U.S. dollars in thousands, except per share data) 

 

 NOTE 3 – CONVERTIBLE NOTES

 

A.On June 5, 2019, the Company entered into a Securities Purchase Agreement (“SPA”) with YAII PN, Ltd. (the “Investor”), pursuant to which the Investor agreed to provide the Company with a convertible loan in the aggregate amount of $1,100,000 in three tranches, and the Company agreed to issue convertible debentures and a warrant to the Investor.

 

The first tranche of the convertible debentures in the amount of $200,000 was provided upon execution of the SPA. The second tranche in the amount of $300,000 was provided on October 23, 2019 upon the Company filing of a Registration Statement on Form S-4 in connection with the Merger with Samsara Delaware. The third tranche in the amount of $600,000 was provided on November 18, 2019 upon consummation of the Merger with Samsara Delaware and the fulfillment of all conditions required for the Merger. The Company incurred issuance cost of $100,000 with connection to those convertible debentures.

 

In the period from loan inception through December 31, 2021, the full amount of outstanding principal and accrued interest was converted into shares of common stock.

 

In addition, the Company issued to the Investor a warrant to purchase 13,095 shares of common stock, at an exercise price equal to $21.00. The warrants may be exercised within 5 years from the issuance date by cash payment or through cashless exercise by the surrender of warrants shares having a value equal to the exercise price of the portion of the warrant being exercised.

 

The Company considered the provisions of ASC 815-40, “Derivatives and Hedging: Contracts in Entity’s Own Equity”, with respect to the detachable warrants that were issued to the convertible loan, and determined that as a result of the “cashless exercise” and variable exercise price that would adjust the number of warrants and the exercise price of the warrants based on the price at which the Company subsequently issues shares or other equity-linked financial instruments, such warrants cannot be considered as indexed to the Company’s own stock. Accordingly, the warrants were recognized as derivative liability at their fair value on initial recognition. In subsequent periods, the warrants were marked to market with the changes in fair value recognized as financing expense or income in the consolidated statement of operations.

 

The warrants were estimated by third party appraiser using the Black-Scholes option-pricing model to compute the fair value of the derivative and to mark to market the fair value of the derivative at each balance sheet date.  The following are the data and assumptions used as of the balance sheet dates:

 

   March 31,
2022
 
Common stock price  $0.6 
Expected volatility   270.18%
Expected term   2.18 years  
Risk free rate   2.31%
Expected dividend yield   0%
Fair Market Value of Warrants  $6 

 

   December 31,
2021
 
Common stock price   0.9585 
Expected volatility   275.94%
Expected term   2.43 years  
Risk free rate   0.83%
Expected dividend yield   0%
Fair Market Value of Warrants  $10 

 

9

 

 

SAMSARA LUGGAGE, INC.

NOTES TO FINANCIAL STATEMENTS

(U.S. dollars in thousands, except per share data) 

 

NOTE 3 – CONVERTIBLE NOTES (cont.)

 

B.On September 3, 2020, Samsara Luggage, Inc. (the “Company”) entered into a second Securities Purchase Agreement (“SPA”) with the Investor, pursuant to which the Investor will invest an aggregate amount of $220 in two tranches, and the Company will issue convertible debentures and warrants to the Investor. The first tranche of the convertible debentures in the amount of $150 was provided upon execution of the SPA. The second tranche in the amount of $70 was provided on October 7, 2020. Each tranche of the loan bears interest at an annual rate of ten percent (10%). Each tranche of the investment bears interest at an annual rate of ten percent (10%) and will be repayable after two years. Each tranche of the investment will be convertible at any time into shares of the Company’s Common Stock at a conversion price equal to the lower of (a) $0.003 per share, or (b) 80% of the lowest the daily dollar volume-weighted average price for the Company’s Common Stock during the 10 trading days immediately preceding the conversion date.

 

In the period from loan inception through December 31, 2021, the full amount of outstanding principal and accrued interest was converted into shares of common stock.

 

In addition, the Company issued to the Investor a warrant to purchase 2,619 shares of common stock, at an exercise price equal to $21.00. The warrants may be exercised within 5 years from the issuance date by cash payment or through cashless exercise by the surrender of warrants shares having a value equal to the exercise price of the portion of the warrant being exercised.

 

The Company considered the provisions of ASC 815-40, “Derivatives and Hedging: Contracts in Entity’s Own Equity”, with respect to the detachable warrants that were issued to the Convertible loan, and determined that as a result of the “cashless exercise” and variable exercise price that would adjust the number of warrants and the exercise price of the warrants based on the price at which the Company subsequently issues shares or other equity-linked financial instruments, such warrants cannot be considered as indexed to the Company’s own stock. Accordingly, the warrants were recognized as derivative liability at their fair value on initial recognition. In subsequent periods, the warrants were marked to market with the changes in fair value recognized as financing expense or income in the consolidated statement of operations.

 

The warrants were estimated by third party appraiser using the Black-Scholes option-pricing model to compute the fair value of the derivative and to mark to market the fair value of the derivative at each balance sheet dates:

 

The following are the data and assumptions used as of the balance sheet dates:

 

   March 31,
2022
 
Common stock price  $0.6 
Expected volatility   267.55%
Expected term (years)   3.43 
Risk free rate   2.44%
Expected dividend yield   0%
Fair Market Value of Warrants  $1 

 

   December 31,
2021
 
Common stock price   0.9585 
Expected volatility   275.94%
Expected term (years)   3.68 
Risk free rate   1.07%
Expected dividend yield   0%
Fair Market Value of Warrants  $2 

 

10

 

 

SAMSARA LUGGAGE, INC.
NOTES TO FINANCIAL STATEMENTS

(U.S. dollars in thousands, except per share data) 

 

NOTE 3 – CONVERTIBLE NOTES (cont.)

  

C.

On April 6, 2021, the Company entered into a third Securities Purchase Agreement (“SPA”) with YAII PN, Ltd. (the “Investor”), pursuant to which the Investor agreed to provide the Company with a convertible loan in the aggregate amount of $150 and the Company agreed to issue convertible debentures and a warrant to the Investor. The loan will bear interest at an annual rate of ten percent (10%) and will be repayable after two years. The investment will be convertible at any time into shares of the Company’s Common Stock at a conversion price equal to the lower of (a) $3.46, or (b) 80% of the lowest the daily dollar volume-weighted average price for the Company’s Common Stock during the 10 trading days immediately preceding the conversion date.

 

In accordance with ASC 815-15-25 the conversion feature was considered embedded derivative instrument and is to be recorded at its fair value as its fair value can be separated from the convertible loan and its conversion is independent of the underlying note value. The Company recorded finance expenses in respect of the convertible component in the convertible loan in the excess amount of the convertible component fair value over the face loan amount. The conversion feature derivative liability is then marked to market each reporting period with the resulting gains or losses shown in the statements of operations.

 

The fair value of the convertible component was estimated by third party appraiser using the Monte Carlo Simulation Model to compute the fair value of the derivative and to mark to market the fair value of the derivative at each of the issuance and balance sheet dates.

 

The following are the data and assumptions used as of the balance sheet dates:

 

   March 31 ,
2022
 
Common stock price  $0.6 
Expected volatility   162.97%
Expected term   1.02 
Risk free rate   1.64%
Expected dividend yield   0%
Fair Market Value of Convertible component  $89 

 

   December 31 ,
2021
 
Common stock price  $0.9585 
Expected volatility   275.94%
Expected term   1.27 
Risk free rate   1.07%
Expected dividend yield   0%
Fair Market Value of Convertible component  $164 

 

As part of the transaction, the Company issued to the Investor warrants to purchase an aggregate of 10,838 shares of Common Stock, at an exercise price equal to $3.46. The term of each warrant is five years from the issue date. Each warrant may be exercised by cash payment or through cashless exercise by the surrender of warrant shares having a value equal to the exercise price of the portion of the warrant being exercised.

 

    The warrants were estimated by third party appraiser using the Black-Scholes option-pricing model to compute the fair value of the derivative and to mark to market the fair value of the derivative at each of the issuance and balance sheet dates.

 

The following are the data and assumptions used as of the balance sheet dates:

 

   March 31 ,
2022
 
Common stock price  $0.6 
Expected volatility   267.6%
Expected term   4.02 
Risk free rate   2.43%
Expected dividend yield   0%
Fair Market Value of Warrants  $6 

 

   December 31 ,
2021
 
Common stock price  $0.9585 
Expected volatility   275.94%
Expected term   4.27 
Risk free rate   1.07%
Expected dividend yield   0%
Fair Market Value of Warrants  $12 

 

11

 

 

SAMSARA LUGGAGE, INC.
NOTES TO FINANCIAL STATEMENTS

(U.S. dollars in thousands, except per share data) 

 

NOTE 3 – CONVERTIBLE NOTES (cont.)

 

D.

On June 7, 2021, Samsara Luggage, Inc. (the “Company”) entered into a fourth Securities Purchase Agreement (“SPA”) with the Investor, pursuant to which the Investor will invest an aggregate amount of $1,250 in three tranches, and the Company will issue convertible debentures and warrants to the Investor, in which each tranche is convertible into shares of the Company’s common stock, par value $0.0001 (the “Common Stock”). The first tranche in the principal amount of $500 was issued on June 7, 2021. The second tranche in the principal amount of $500 was issued on July 6, 2021 following the filing of a registration statement on Form S-1 (the “Registration Statement”) under the Securities Act of 1933, as amended, registering the Conversion Shares issuable upon conversion of the Convertible Debentures with the Securities and Exchange Commission (the “SEC”). The third tranche in the principal amount of $250 was  issued on September 7, 2021 following the Registration Statement being declared effective by the SEC.

 

On September 20, 2021, and pursuant to the SPA, YAII exercised its option to convert the Convertible Promissory Note principal in the amount of $100 into 47,887 shares of Common Stock of the Company. The fair market value of the shares was $130.

 

On October 14, 2021, and pursuant to the SPA, YAII exercised its option to convert the Convertible Promissory Note principal in the amount of $150 and accrued interest of $1 into 109,018 shares of Common Stock of the Company. The fair market value of the shares was $211.

 

As of December 31, 2021 the third tranche from September 7, 2021 was fully converted into shares of Common Stock.

 

On November 3, 2021, and pursuant to the SPA, YAII exercised its option to convert the Convertible Promissory Note principal in the amount of $100 and accrued interest of $16 into 92,089 shares of Common Stock of the Company. The fair market value of the shares was $161.

 

On December 20, 2021, and pursuant to the SPA, YAII exercised its option to convert the Convertible Promissory Note principal in the amount of $75 and accrued interest of $5 into 98,538 shares of Common Stock of the Company. The fair market value of the shares was $123.

 

On March 1, 2022, and pursuant to the SPA, YAII exercised its option to convert the Convertible Promissory Note principal in the amount of $35 and accrued interest of $6 into 97,458 shares of Common Stock of the Company. The fair market value of the shares was $56.

 

The Convertible Debentures bear interest at a rate of 10% per annum (15% on default) and have a maturity date of one (1) year. The Convertible Debentures provide a conversion right, in which any portion of the principal amount of the Convertible Debentures, together with any accrued but unpaid interest, may be converted into the Company’s Common Stock at a conversion price equal to 80% of the lowest volume weighted average price of the Company’s Common Stock during the ten (10) trading days immediately preceding the date of conversion, subject to adjustment. The Convertible Debentures may not be converted into common stock to the extent such conversion would result in the Investor beneficially owning more than 9.99% of the Company’s outstanding Common Stock (the “Beneficial Ownership Limitation”); provided, however, that the Beneficial Ownership Limitation may be waived by the Investor upon not less than 65 days’ prior notice to the Company. The Convertible Debentures provide the Company with a redemption right, pursuant to which the Company, upon fifteen (15) business days’ prior notice to the Investor, may redeem, in whole or in part, outstanding principal and interest at a redemption price equal to the principal amount being redeemed plus a redemption premium equal to 5% of the outstanding principal amount being redeemed plus outstanding and accrued interest; however, the Investor shall have fifteen (15) business days after receipt of the Company’s redemption notice to elect to convert all or any portion of the Convertible Debentures, subject to the Beneficial Ownership Limitation. In connection with the Securities Purchase Agreement, the Company executed a registration rights agreement (the “Registration Rights Agreement”) pursuant to which it is required to file the Registration Statement with the SEC for the resale of the Conversion Shares. Pursuant to the Registration Rights Agreement, the Company is required to meet certain obligations with respect to, among other things, the timeliness of the filing and effectiveness of the Registration Statement. The Company is obligated to file the Registration Statement no later than 45 days after the First Closing Date and to have it declared effective by the SEC no later than 105 days after filing (the “Registration Obligations”).

 

12

 

 

SAMSARA LUGGAGE, INC.
NOTES TO FINANCIAL STATEMENTS

(U.S. dollars in thousands, except per share data) 

 

NOTE 3 – CONVERTIBLE NOTES (cont.)

 

In accordance with ASC 815-15-25 the conversion feature was considered embedded derivative instrument and is to be recorded at its fair value as its fair value can be separated from the convertible loan and its conversion is independent of the underlying note value. The Company recorded finance expenses in respect of the convertible component in the convertible loan in the excess amount of the convertible component fair value over the face loan amount. The conversion feature derivative liability is then marked to market each reporting period with the resulting gains or losses shown in the statements of operations.

 

The fair value of the convertible component was estimated by third party appraiser using the Monte Carlo Simulation Model to compute the fair value of the derivative and to mark to market the fair value of the derivative at each balance sheet dates:

 

The following are the data and assumptions used as of the balance sheet dates:

 

   March 31 ,
2022
 
Common stock price  $0.6 
Expected volatility   94.76%
Expected term   0.190.27
Risk free rate    0.390.55%
Expected dividend yield   0%
Fair Market Value of Convertible component  $319 

 

   December 31,
2021
 
Common stock price   $0.9585 
Expected volatility    86.887.57 %
Expected term    0.430.51  
Risk free rate    0.160.19%
Expected dividend yield    0%
Fair Market Value of Convertible component   $331 

 

E.

On December 14, 2021, Samsara Luggage, Inc. (the “Company”) entered into a fifth Securities Purchase Agreement (“SPA”) with the Investor, pursuant to which the Investor will invest an aggregate amount of $ 500, and the Company will issue convertible debentures to the Investor.

 

The Convertible Debenture bears interest at a rate of 10% per annum (15% on default) and has a maturity date of one (1) year. The Convertible Debenture provides a conversion right, in which any portion of the principal amount of the Convertible Debenture, together with any accrued but unpaid interest, may be converted into the Company’s Common Stock at a conversion price equal to 80% of the lowest volume weighted average price of the Company’s Common Stock during the ten (10) trading days immediately preceding the date of conversion, subject to adjustment. The Convertible Debenture may not be converted into common stock to the extent such conversion would result in the Investor beneficially owning more than 4.99% of the Company’s outstanding Common Stock; provided, however, that the Beneficial Ownership Limitation may be waived by the Investor upon not less than 65 days’ prior notice to the Company. The Convertible Debenture provides the Company with a redemption right, pursuant to which the Company, upon fifteen (15) business days’ prior notice to the Investor, may redeem, in whole or in part, outstanding principal and interest under the Convertible Debenture at a redemption price equal to the principal amount being redeemed plus a redemption premium equal to 5% of the outstanding principal amount being redeemed plus outstanding and accrued interest; however, the Investor shall have fifteen (15) business days after receipt of the Company’s redemption notice to elect to convert all or any portion of the Convertible Debenture, subject to the Beneficial Ownership Limitation.

 

In accordance with ASC 815-15-25 the conversion feature was considered embedded derivative instrument and is to be recorded at its fair value as its fair value can be separated from the convertible loan and its conversion is independent of the underlying note value. The Company recorded finance expenses in respect of the convertible component in the convertible loan in the excess amount of the convertible component fair value over the face loan amount. The conversion feature derivative liability is then marked to market each reporting period with the resulting gains or losses shown in the statements of operations.

 

13

 

 

SAMSARA LUGGAGE, INC.
NOTES TO FINANCIAL STATEMENTS

(U.S. dollars in thousands, except per share data) 

 

NOTE 3 – CONVERTIBLE NOTES (cont.)

 

The following are the data and assumptions used as of the balance sheet date:

 

   March 31,
2022
 
Common stock price  $0.6 
Expected volatility   82.33%
Expected term   0.71 
Risk free rate   1.3%
Expected dividend yield   0%
Fair Market Value of Convertible component  $204 

 

   December 31,
2021
 
Common stock price  $0.9585 
Expected volatility   205.2%
Expected term   0.95 
Risk free rate   0.37%
Expected dividend yield   0%
Fair Market Value of Convertible component  $522 

 

The following table presents the changes in fair value of the level 3 liabilities for the periods ended March 31, 2022 and December 31, 2021:

 

   Warrants   Convertible
component
 
   (U.S. dollars in thousands) 
Outstanding at December 31, 2021   24    1,017 
Settled upon debt conversion   
-
    (4)
Changes in fair value   (10)   (402)
Outstanding at March 31, 2022   14    611 

 

   Warrants   Convertible
component
 
   (U.S. dollars in thousands) 
Outstanding at December 31, 2021   20    493 
Fair value of issued level 3 liability   21    2,064 
Changes in fair value   (17)   (1,540)
Outstanding at December 31, 2021   24    1,017 

 

14

 

 

SAMSARA LUGGAGE, INC.
NOTES TO FINANCIAL STATEMENTS

(U.S. dollars in thousands, except per share data) 

 

NOTE 4 – STOCKHOLDERS’ EQUITY

 

Common Stock

 

On March 1, 2022, and pursuant to the SPA, YAII exercised its option to convert the Convertible Promissory Note principal in the amount of $35 and accrued interest of $6 into 97,458 shares of Common Stock of the Company. The fair market value of the shares was $56.

 

NOTE 5 – RELATED PARTY TRANSACTIONS

 

Related party payable

 

   March 31,
2022
   December 31,
2021
 
   (U.S. dollars in thousands) 
Related party payable due to management fee   136    147 

 

General and Administrative Expenses

 

    For the period ended
March 31,
    For the period ended
March 31,
 
    2022     2021  
    (U.S. dollars in thousands)  
Management Fee    

25

      25  

 

Research and development Expenses

 

    For the period ended
March 31,
    For the period ended
March 31,
 
    2022     2021  
    (U.S. dollars in thousands)  
Consulting Fee     32       -  

 

NOTE 6 – SUBSEQUENT EVENTS

 

Series A Preferred Stock

 

On May 12, 2022, the Company established a series of redeemable convertible preferred stock (the “Series A Preferred Stock”), par value $0.0001 per share, pursuant to a Certificate of Designation, Preference and Rights of Series A Preferred Stock of the Company (the “Certificate of Designation”).

 

15

 

 

SAMSARA LUGGAGE, INC.
NOTES TO FINANCIAL STATEMENTS

(U.S. dollars in thousands, except per share data) 

 

NOTE 6 – SUBSEQUENT EVENTS (cont.)

 

Pursuant to the Certificate of Designation, the Company authorized 1,000,000 shares of the Series A Preferred Stock, which may be convertible into shares of common stock, par value $0.0001 per share, of the Company (the “Common Stock”) at the option of the holders thereof at any time after the issuance of the Series A Preferred Stock, at a conversion price equal a Variable Conversion Price (the “Conversion Price”). The "Variable Conversion Price" means 80% multiplied by the Market Price (representing a discount rate of 20%). The “Market Price” means the average of the lowest two (2) Trading Prices (as defined below) for the Common Stock during the ten (10) Trading Day period ending on the latest complete trading day prior to the conversion date. The “Trading Price” means, for any security as of any date, the actual closing price on the OTCQB, OTCQX, Pink Sheets electronic quotation system or applicable trading market (the “OTC”).

 

The Series A Preferred Stock will, with respect to dividend rights and rights upon liquidation, winding-up or dissolution, rank: (a) senior with respect to dividends and right of liquidation with the Company’s Common Stock and (b) junior with respect to dividends and right of liquidation to all existing and future indebtedness of the Company and existing and outstanding preferred stock of the Company.

 

The Series A Preferred Stock shall have no right to vote on any matters requiring shareholder approval or any matters on which the shareholders are permitted to vote.

 

Each share of Series A Preferred Stock will carry an annual dividend in the amount of six percent (6%) of the price per share of Series A Preferred Stock of $1.00 (the “Divided Rate”), which shall be cumulative, payable solely upon redemption, liquidation or conversion. Upon the occurrence of an event of default (as further defined further in the Certificate of Designation), the Dividend Rate shall automatically increase to fifteen percent (15%).

 

Series A Preferred Stock Purchase Agreement

 

On May 17, 2022, the Company entered into a Series A Preferred Stock Purchase Agreement (the “SPA”) with 1800 Diagonal Lending LLC f/k/a Sixth Street Lending LLC, a Virginia limited liability company (the “Investor”) pursuant to which the Company issued and sold to the Investor 148,062 shares of Series A Preferred Stock for a purchase price of $128,750.00.

 

Pursuant to the SPA, the Investor may convert all or a portion of the outstanding Series A Preferred Stock into shares of the Company’s Common Stock beginning on the date which is 180 days after the issuance date of the Series A Preferred Stock (the “Issuance Date”) into Common Stock; provided, however, that the Investor may not convert the Series A Preferred Stock to the extent that such conversion would result in beneficial ownership by the Investor and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock.

 

The Company will have the right, at the Company’s sole option, provided that an event of default has not occurred, to redeem all or any portion of the shares of Series A Preferred Stock, exercisable on not more than 3 Trading Days prior written notice to the holders of the Series A Preferred Stock, in full. If the Company redeems the shares of Series A Preferred Stock within 180 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 110%; if such prepayment is made between the 181st day and the 730th day after the issuance of the Series A Preferred Stock, then such redemption premium is 120%. After the 730th day following the Issuance Date, there shall be no further right of redemption.

 

In connection with the Certificate of Designation, the Company agreed to cause its transfer agent to reserve four times the number of shares of Common Stock that would be issuable upon full conversion of the Series A Preferred Stock (assuming that the 4.99% limitation set forth in herein is not in effect) (based on the respective Conversion Price of the Series A Preferred Stock in effect from time to time).

16

 

Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes included elsewhere in this Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2021. Some of the information contained in this discussion and analysis, particularly with respect to our plans and strategy for our business and related financing, includes forward-looking statements within the meanings of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, including statements regarding expectations, beliefs, intentions or strategies for the future. When used in this report, the terms “anticipate,” “believe,” “estimate,” “expect,” “can,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” and words or phrases of similar import, as they relate to our company or our management, are intended to identify forward-looking statements. We intend that all forward-looking statements be subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are only predictions and reflect our views as of the date they are made with respect to future events and financial performance, and we undertake no obligation to update or revise, nor do we have a policy of updating or revising, any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as may be required under applicable law. Forward-looking statements are subject to many risks and uncertainties that could cause our actual results to differ materially from any future results expressed or implied by the forward-looking statements as a result of several factors including those set forth under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021, and in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2022.

 

The Company notes that in addition to the description of historical facts contained herein, this report contains certain forward-looking statements that involve risks and uncertainties as detailed herein and from time to time in the Company’s other filings with the Securities and Exchange Commission and elsewhere. Such statements are based on management’s current expectations and are subject to a number of factors and uncertainties, which could cause actual results to differ materially from those, described in the forward-looking statements. These factors include, among others: (a) the Company’s fluctuations in sales and operating results; (b) risks associated with international operations; (c) regulatory, competitive and contractual risks; (d) development risks; (e) the ability to achieve strategic initiatives, including but not limited to the ability to achieve sales growth across the business segments through a combination of enhanced sales force, new products, and customer service; and (f) pending litigation.

 

Overview and Outlook

 

The Company was incorporated on May 7, 2007 under the name, “Darkstar Ventures, Inc.” under the laws of the State of Nevada. On November 12, 2019, the Company completed its merger with the Delaware corporation that was previously known as “Samsara Luggage, Inc.” (“Samsara Delaware”) in accordance with the terms of the Merger Agreement and Plan of Merger, dated as of May 10, 2019, (the “Merger Agreement”) by and among the Company, Samsara Delaware, and Avraham Bengio, pursuant to which Samsara Delaware merged with and into the Company, with the Company being the surviving corporation (the “Merger”). Following the completion of the Merger, the business of the Company going forward became the business of Samsara Delaware prior to the Merger, namely, the development and sale of smart luggage products.

 

On March 17, 2021, the Company filed a Certificate of Change with the Secretary of State of the State of Nevada (the “Certificate of Change”) to effect a reverse split of Company’s common stock at a ratio of 1-for-7,000 (the “Reverse Stock Split”). The Reverse Stock Split took effect at the open of business on Tuesday, March 23, 2021. As a result of the Reverse Stock Split, each seven thousand (7,000) pre-split shares of common stock outstanding automatically combined into one (1) new share of common stock without any action on the part of the holders, and the number of outstanding shares common stock were reduced from 5,995,825,131 shares to 8,565,465 shares (subject to rounding of fractional shares). No fractional shares were issued in connection with the Reverse Stock Split. The Company issued one whole share of the post-Reverse Stock Split Common Stock to any stockholder who otherwise would have received a fractional share as a result of the Reverse Stock Split.

  

On October 5, 2020, the Board of Directors of the Company approved, and the holders of a majority of the outstanding shares of our common stock, par value $0.0001 per share, (the “Common Stock”), executed a written consent in lieu of a meeting that approved, amending the Company’s Articles of Incorporation to increase the number of authorized shares of common stock from 5,000,000,000 to 7,500,000,000 (the “Authorized Capital Increase”). On November 3, 2020, the Company effected the Authorized Capital Increase by filing with the Secretary of State of the State of Nevada a Certificate of Amendment amending the Company’s Articles of Incorporation to increase the number of authorized shares of common stock from 5,000,000,000 to 7,500,000,000.  

 

17

 

 

Recent Developments

 

Next-Gen Suitcases

 

During the third quarter of 2021, the Company increased its R&D, manufacturing capabilities and strategic marketing activities in preparation for the launch of the first product from its Next Gen line of travel luggage and coordinating accessories. As of the fourth quarter of 2021, Samsara continued developing new digital marketing assets in preparation for the launch of its next collection of smart luggage. The company’s newest collection launched in April of 2022, which designed to adapt to the changing travel landscape despite the interruptions to the global supply chain.

 

During the first quarter of 2022, Samsara Luggage Inc. executed a new strategic marketing campaign in conjunction with the planned launch of the first model from the Next Gen line of smart luggage, the Tag Smart. The Company leveraged its supply chain and manufacturing capabilities to complete the first production of the new product that was released to the market in April of 2022. The Tag Smart Collection was added to the Next Gen line of smart luggage in response to the global supply chain disruptions and to give consumers more variety and options when selecting smart luggage. The Tag Smart collection was launched along with a line of coordinating travel accessories.

 

Samsara Luggage Inc. launched the Tag Smart collection of smart suitcases and travel accessories. The Tag Smart suitcase was introduced into the luggage market for consumers looking for precise and accurate tracking of their suitcase using technology that was familiar and user-friendly. The Tag Smart suitcase is the first of its kind and designed specifically for the Apple AirTag. The suitcase has a special compartment that secures the Apple AirTag from the interior of the suitcase. The suitcase comes with a customized AirTag with the Samsara logo on one side and Apple logo on the other. One side of the logo is visible from the exterior and protected with a transparent plastic. Consumers can track their suitcase using the Find My app that is standard on all iPhones. It is the same tracking solution that tracks all Apple devices and is streamlined for the Apple enthusiast.

 

The Tag Smart model is the first product in the Next Gen line of smart suitcases. The Next Gen collection was unveiled at CES in January 2020. This model is WiFi smart and equipped with a smart unit that has GPS tracking and WiFi Hotspot technology. The smart unit doubles as a portable wireless charger.

 

The WiFi smart model of the Next Gen collection will be the next model to launch in the coming months.

 

Sarah & Sam

 

During the fourth quarter of 2020, Samsara launched Sarah & Sam Fashion and Lifestyle Collection. Sarah & Sam is a part of Samsara’s direct business model prompted by the travel limitations due to the COVID-19 pandemic, leveraging the Company’s established digital assets and manufacturing and fulfillment supply chain capabilities to offer additional consumer products that respond to the changing needs of the market.

 

As of the first quarter of 2022, Sarah & Sam Fashion and Lifestyle Collection continues to add a cluster of sales for the Company and therefore will remain active and part of Samsara Luggage’s business model.

 

The online, Direct-to-consumer (D2C) fashion brand adds a consistent stream of sales and allows the company to expand its reach and online consumer data. Sarah & Sam utilizes Samsara Luggage’s digital assets and manufacturing and fulfillment supply chain capabilities to offer additional consumer products that respond to the changing needs of the market.

 

18

 

 

YAII PN Ltd. Convertible Debentures

 

December 2021 Convertible Loan Agreement (YAII PN, Ltd.)

 

On December 14, 2021, Samsara Luggage, Inc. (the “Company”) entered into a securities purchase agreement (the “Securities Purchase Agreement”) with YA II PN Ltd., a Cayman Islands exempt company (the “Investor”), pursuant to which the Company sold and issued a convertible debenture in the amount of $500,000 (the “Convertible Debenture”), which is convertible into shares of the Company’s common stock, par value $0.0001 (the “Common Stock”) (as converted, the “Conversion Shares”).

 

The Convertible Debenture bears interest at a rate of 10% per annum (15% on default) and has a maturity date of one (1) year. The Convertible Debenture provides a conversion right, in which any portion of the principal amount of the Convertible Debenture, together with any accrued but unpaid interest, may be converted into the Company’s Common Stock at a conversion price equal to 80% of the lowest volume weighted average price of the Company’s Common Stock during the ten (10) trading days immediately preceding the date of conversion, subject to adjustment. The Convertible Debenture may not be converted into common stock to the extent such conversion would result in the Investor beneficially owning more than 4.99% of the Company’s outstanding Common Stock (the “Beneficial Ownership Limitation”); provided, however, that the Beneficial Ownership Limitation may be waived by the Investor upon not less than 65 days’ prior notice to the Company. The Convertible Debenture provides the Company with a redemption right, pursuant to which the Company, upon fifteen (15) business days’ prior notice to the Investor, may redeem, in whole or in part, outstanding principal and interest under the Convertible Debenture at a redemption price equal to the principal amount being redeemed plus a redemption premium equal to 5% of the outstanding principal amount being redeemed plus outstanding and accrued interest; however, the Investor shall have fifteen (15) business days after receipt of the Company’s redemption notice to elect to convert all or any portion of the Convertible Debenture, subject to the Beneficial Ownership Limitation.

  

June 2021 Convertible Loan Agreement (YAII PN, Ltd.)

 

On June 7, 2021, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with the Investor, pursuant to which the Company sold and issued convertible debentures (individually a “Convertible Debenture” and collectively, the “Convertible Debentures”) in the aggregate amount of up to $1,250,000 (the “Purchase Price”), which are convertible into shares of the Company’s common stock, par value $0.0001 (the “Common Stock”) (as converted, the “Conversion Shares”), of which:

 

  (i) a Convertible Debenture (the “First Convertible Debenture”) in the principal amount of $500,000 (the “First Convertible Debenture Purchase Price”) was issued upon execution of the Securities Purchase Agreement (the “First Closing Date”);
     
  (ii) a Convertible Debenture (the “Second Convertible Debenture”) in the principal amount of $500,000 shall be issued within one (1) business day following the filing of a registration statement on Form S-1 (the “Registration Statement”) under the Securities Act of 1933, as amended, registering the Conversion Shares issuable upon conversion of the Convertible Debentures with the Securities and Exchange Commission (the “SEC”); and
     
  (iii) a Convertible Debenture (the “Third Convertible Debenture”) in the principal amount of $250,000 (the “Third Convertible Debenture Purchase Price”) shall be issued within one (1) business day following the Registration Statement having been declared effective by the SEC.

 

The Convertible Debentures bear interest at a rate of 10% per annum (15% on default) and have a maturity date of one (1) year. The Convertible Debentures provide a conversion right, in which any portion of the principal amount of the Convertible Debentures, together with any accrued but unpaid interest, may be converted into the Company’s Common Stock at a conversion price equal to 80% of the lowest volume weighted average price of the Company’s Common Stock during the ten (10) trading days immediately preceding the date of conversion, subject to adjustment. The Convertible Debentures may not be converted into common stock to the extent such conversion would result in the Investor beneficially owning more than 9.99% of the Company’s outstanding Common Stock (the “Beneficial Ownership Limitation”); provided, however, that the Beneficial Ownership Limitation may be waived by the Investor upon not less than 65 days’ prior notice to the Company. The Convertible Debentures provide the Company with a redemption right, pursuant to which the Company, upon fifteen (15) business days’ prior notice to the Investor, may redeem, in whole or in part, outstanding principal and interest at a redemption price equal to the principal amount being redeemed plus a redemption premium equal to 5% of the outstanding principal amount being redeemed plus outstanding and accrued interest; however, the Investor shall have fifteen (15) business days after receipt of the Company’s redemption notice to elect to convert all or any portion of the Convertible Debentures, subject to the Beneficial Ownership Limitation.

 

In connection with the Securities Purchase Agreement, the Company executed a registration rights agreement (the “Registration Rights Agreement”) pursuant to which it was required to file the Registration Statement with the SEC for the resale of the Conversion Shares, which went effective on or about August 31, 2021.

 

As of the date of this filing, $210,000 of the Second Convertible Debenture and the full $250,000 of the Third Convertible Debenture were converted into shares of common stock.

 

19

 

 

April 2021 Convertible Loan Agreement (YAII PN, Ltd.)

 

On April 6, 2021, the Company entered into a Securities Purchase Agreement (“SPA”) with the Investor, pursuant to which the Investor invested $150,000, and the Company issued a convertible debenture and warrants to the Investor. The $150,000 investment was provided upon signature of the SPA.

 

The investment bears interest at an annual rate of ten percent (10%) and will be repayable after two years. The investment will be convertible at any time into shares of the Company’s Common Stock at a conversion price equal to the lower of (a) $3.46, or (b) 80% of the lowest the daily dollar volume-weighted average price for the Company’s Common Stock during the 10 trading days immediately preceding the conversion date.

 

As part of the transaction, the Company issued to the Investor warrants to purchase an aggregate of 10,838 shares of Common Stock, at an exercise price equal to $3.46. The term of each warrant is five years from the issue date. Each warrant may be exercised by cash payment or through cashless exercise by the surrender of warrant shares having a value equal to the exercise price of the portion of the warrant being exercised. 

 

Results of Operations

 

Three months ended March 31, 2022 compared to the three months ended March 31, 2021

 

Revenue

 

The Company generates revenues through the sale and distribution of smart luggage products. Revenues during the three months ended March 31, 2022 totaled $31,000 compared to $75,000 for the three months ended March 31, 2021. The decrease in the total revenue is mainly due to lower demand in the current period. The company was mostly engaged and invested in developing the new line of products without adding new inventory for sales of the older model. Therefore sales activities were focused on brand awareness rather than of sales, to come prepared for the launch that started in the second quarter of 2022.

 

Costs of Sales

 

Costs of sales consists of the purchase of raw materials and the cost of production. Cost of revenues during the three months ended March 31, 2022 totaled $20,000 compared to $37,000 for the three months ended March 31, 2021. The decrease in the costs of sales is mainly due to the decrease in sales.

 

Gross Profit

 

During the three months ended March 31, 2022, Gross Profit totaled $11,000, representing a Gross Profit margin of 35.48%. During the three months ended March 31, 2021, Gross Profit totaled $38,000, representing a Gross Profit margin of 50.66%.

 

Operating Expenses

 

Operating expenses totaled $454,000 during the three months ended March 31, 2022, compared to $326,000 during the three months ended March 31, 2021, representing a net increase of $128,000. The increase in operating expenses is mainly due to an increase in selling and marketing expenses resulting from increased marketing activities relating to the new line of products.

 

Net Profit/Loss 

 

We realized a net loss of $289,000 for the three months ended March 31, 2022, as compared to a net loss of $635,000 for the three months ended March 31, 2021, for the reasons described above.

 

20

 

 

Liquidity and Capital Resources

 

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable and accounts payable and capital expenditures.

 

As of March 31, 2022, the Company had $349,000 of cash, total current assets of $598,000, and total current liabilities of 1,356,000, creating a working capital deficit of $758,000. As of December 31, 2021, the Company had $827,000 of cash, total current assets of $974,000 and total current liabilities of $1,675,000 creating a working capital deficit of $701,000.

 

The increase in our working capital deficit was mainly attributable to a decrease of $478,000 in cash and cash equivalents and an increase in convertible notes payable of $204,000, partially offset by increases of $94,000 of inventory of $94,000 and $8,000 of other current assets, and decreases of $19,000 of accounts payable, $77,000 of other current liabilities, $11,000 of related party payables, $406,000 in the fair value of the Conversion Option Derivative Liability and $10,000 of the Warrant derivative liability.

 

Net cash used in operating activities was $478,000 for the three months ended March 31, 2022, as compared to cash used in operating activities of $46,000 for the three months ended March 31, 2021. The Company’s primary uses of cash have been for research and development expenses, sales and marketing expenses, and working capital purposes.

 

We have principally financed our operations through the sale of our common stock and the issuance of debt. Due to our operational losses, we relied to a large extent on financing our cash flow requirements through issuance of common stock and debt. There can be no assurance we will be successful in raising the necessary funds to execute our business plan.

 

Necessity of Additional Financing

 

Securing additional financing is critical to implementation of our business plan. If and when we obtain the required additional financing, we should be able to fully implement our business plan. In the event we are unable to raise any additional funds we will not be able to pursue our business plan, and we may fail entirely. We currently have no committed sources of financing.

 

Going Concern Consideration

 

The above conditions raise substantial doubt about our ability to continue as a going concern. Our independent auditors included an explanatory paragraph in their report on the accompanying financial statements regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors. Although we anticipate that our current operations will provide us with cash resources, we believe existing cash will not be sufficient to fund planned operations and projects through the next 12 months. Therefore, we believe we will need to increase our sales, attain profitability, and raise additional funds to finance our future operations. Any meaningful equity or debt financing will likely result in significant dilution to our existing stockholders. There is no assurance that additional funds will be available on terms acceptable to us, or at all.

 

To address these risks, we must, among other things, implement and successfully execute our business and marketing strategy surrounding our products, continually develop and upgrade our website, respond to competitive developments, lower our financing costs, and attract, retain and motivate qualified personnel. There can be no assurance that we will be successful in addressing such risks, and the failure to do so can have a material adverse effect on our business prospects, financial condition and results of operations.

 

Seasonality

 

We do not expect our sales to be impacted by seasonal demands for our products.

 

Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements.

 

21

 

  

Item 3. - Quantitative and Qualitative Disclosures about Market Risk

 

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information necessary under this item.

 

Item 4. - Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

We conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. The controls evaluation was conducted under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer. Disclosure controls and procedures are controls and procedures designed to reasonably assure that information required to be disclosed in our reports filed under the Exchange Act, such as this Quarterly Report on Form 10-Q, is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures are also designed to reasonably assure that such information is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

  

Based on the controls evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified by the Commission, and that material information relating to our company and our consolidated subsidiary is made known to management, including the Chief Executive Officer and Chief Financial Officer, particularly during the period when our periodic reports are being prepared.

 

Inherent Limitations on Effectiveness of Controls

 

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within a company have been detected.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15f and 15d-15f under the Exchange Act) that occurred during the quarter ended March 31, 2022 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

 

22

 

 

Part II: Other Information

 

Item 1 - Legal Proceedings

 

We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or any affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interests.

 

Item 1A. Risk Factors

 

There have been no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

None.

   

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosure

 

Not applicable.

 

Item 5. Other Information

 

None.

  

Item 6. Exhibits

 

Exhibit No.    Description
2.1   Merger Agreement, dated May 10, 2019, among the Company, Avraham Bengio, and Samsara Luggage, Inc. (filed as Exhibit 10.1 to the Company’s Form 8-K filed on May 10, 2019 and incorporated herein by reference).
3.1   Articles of Incorporation of the Company (filed as Exhibit 3.1 to the Company’s Form S-1 (File No. 333-176969) filed on September 23, 2011 and incorporated herein by reference).
3.2   Certificate of Amendment to Articles of Incorporation (filed as Exhibit 3.1 to the Company’s current Report on Form 8-K filed on November 12, 2019 and incorporated herein by reference).
3.3   Articles of Merger (filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on November 12, 2019 and incorporated herein by reference).
3.4   Amended Bylaws (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on November 14, 2019 and incorporated herein by reference).
3.5   Certificate of Change to Articles of Incorporation (filed as Exhibit 3.1 to the Company’s current report on Form 8-K filed on March 22, 2021 and incorporated herein by reference).
3.6   Certificate of Change to the Articles of Incorporation Form of Convertible Debenture (incorporated by reference into the Company’s Form 8-K filed with the United States Securities and Exchange Commission on March 22, 2021).
10.1   Securities Purchase Agreement, dated June 5, 2019, between the Company and YAII PN, Ltd. (filed as Exhibit 10.1 to the Company’s Form 8-K filed on June 7, 2019 and incorporated herein by reference).
10.2   Form of Share Purchase Agreement, signed on September 26, 2019, between the Company and investors who invested $500,000 in the Company (filed as Exhibit 10.1 to the Company’s Form 8-K filed on October 2, 2019 and incorporated herein by reference).

 

23

 

 

10.3   Assignment and Assumption Agreement, dated as of November 12, 2019, between the Company and Avraham Bengio (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 12, 2019 and incorporated herein by reference).
10.4   License Agreement dated as of July 18, 2019, between the Company and Sterling/Winters Company, a California corporation, doing business as Meharey MIVI LLC (filed as Exhibit 10.4 to the Company’s Annual Report on Form 10-K filed on February 3, 2020 and incorporated herein by reference).
10.5   Securities Purchase Agreement, dated June 25, 2020, between the Company and Power Up Lending Group Ltd. (filed as Exhibit 10.1 to the Company’s Form 10-Q filed on June 29, 2020 and incorporated herein by reference).
10.6   Securities Purchase Agreement, dated September 3, 2020, between the Company and YAII PN, Ltd. (filed as Exhibit 10.1 to the Company’s Form 8-K filed on September 4, 2020 and incorporated herein by reference).
10.7   Form of Convertible Debenture between the Company and YAII PN, Ltd. (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on September 4, 2020 and incorporated herein by reference).
10.8   Form of Warrant to Purchase Common Stock between the Company and YAII PN, Ltd. (filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on September 4, 2020 and incorporated herein by reference).
10.9   Securities Purchase Agreement, signed April 6, 2021, between Samsara Luggage, Inc. and YAII PN, Ltd. (incorporated by reference into the Company’s Form 8-K filed with the United States Securities and Exchange Commission on April 7, 2021)
10.10   Form of Convertible Debenture (incorporated by reference into the Company’s Form 8-K filed with the United States Securities and Exchange Commission on April 7, 2021)  
10.11   Form of Warrant to Purchase Common Stock (incorporated by reference into the Company’s Form 8-K filed with the United States Securities and Exchange Commission on April 7, 2021)  
10.12   Securities Purchase Agreement, dated June 7, 2021, between the Company and YA II PN Ltd. (incorporated by reference into the Company’s Form 8-K filed with the United States Securities and Exchange Commission on June 10, 2021)  
10.13   Convertible Debenture, dated June 7, 2021, between the Company and YA II PN Ltd. (incorporated by reference into the Company’s Form 8-K filed with the United States Securities and Exchange Commission on June 10, 2021)  
10.14   Registration Rights Agreement, dated June 7, 2021, between the Company and YA II PN Ltd. (incorporated by reference into the Company’s Form 8-K filed with the United States Securities and Exchange Commission on June 10, 2021)  
10.15   Securities Purchase Agreement, dated December 14, 2021, by and between the Company and YA II PN Ltd. (incorporated by reference into the Company’s Form 8-K filed with the United States Securities and Exchange Commission on December 14, 2021)
10.16   Convertible Debenture, dated December 14, 2021, by and between the Company and YA II PN Ltd. (incorporated by reference into the Company’s Form 8-K filed with the United States Securities and Exchange Commission on December 14, 2021)
14.1   Code of Ethics (filed as Exhibit 14.1 to the Company’s Annual Report on Form 10-K filed on February 3, 2020 and incorporated herein by reference).
31*   Section 302 Certification of the Sarbanes-Oxley Act of 2002 of Atara Dzikowski
32*   Section 906 Certification of the Sarbanes-Oxley Act of 2002 of Atara Dzikowski
101.INS   Inline XBRL Instance Document.
101.SCH   Inline XBRL Taxonomy Extension Schema Document.
101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB   Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE   Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104   Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

 

*Filed herewith

 

#The XBRL related information in Exhibit 101 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.

 

24

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  SAMSARA LUGGAGE, INC.
  (Registrant)
     
Date: May 23, 2022 By: /s/ Atara Dzikowski
    Atara Dzikowski
    Chief Executive Officer
(Principal Executive Officer,
Principal Financial Officer and
Principal Accounting Officer)

 

 

25

 

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EX-31 2 f10q0322ex31_samsaralug.htm CERTIFICATION

Exhibit 31

 

CERTIFICATIONS

 

I, Atara Dzikowski, certify that:

 

1.I have reviewed this Report on Form 10-Q of Samsara Luggage, Inc. (the “Company”) for the period ending March 31, 2022;

 

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

 

4.I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

 

(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c)evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d)disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter (the Company’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

5.I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s Board of Directors (or persons performing the equivalent functions):

 

(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

 

(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

 

Date: May 23, 2022

 

By: /s/ Atara Dzikowski  
  Atara Dzikowski,
Chief Executive Officer
and Principal Financial and Accounting Officer
 

 

EX-32 3 f10q0322ex32_samsaralug.htm CERTIFICATION

Exhibit 32

 

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. 1350)

 

In connection with the Report of Samsara Luggage, Inc. (the “Company”) on Form 10-Q for the fiscal quarter ended March 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Atara Dzikowski, Chief Executive Officer and Principal Financial and Accounting Officer of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350), that to my knowledge:

 

1.the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: May 23, 2022

 

By: /s/ Atara Dzikowski  
  Atara Dzikowski,
Chief Executive Officer
and Principal Financial and Accounting Officer
 

 

 

 

 

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Document And Entity Information - shares
3 Months Ended
Mar. 31, 2022
May 23, 2022
Document Information Line Items    
Entity Registrant Name SAMSARA LUGGAGE, INC.  
Document Type 10-Q  
Current Fiscal Year End Date --12-31  
Entity Common Stock, Shares Outstanding   2,152,945
Amendment Flag false  
Entity Central Index Key 0001530163  
Entity Current Reporting Status Yes  
Entity Filer Category Non-accelerated Filer  
Document Period End Date Mar. 31, 2022  
Document Fiscal Year Focus 2022  
Document Fiscal Period Focus Q1  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Document Quarterly Report true  
Document Transition Report false  
Entity File Number 000-54649  
Entity Incorporation, State or Country Code NV  
Entity Tax Identification Number 26-0299456  
Entity Address, Address Line One 135 E. 57th Street,  
Entity Address, Address Line Two Suite 18-130  
Entity Address, State or Province NY  
Entity Address, City or Town New York  
Entity Address, Postal Zip Code 10022  
City Area Code (855)  
Local Phone Number -256-7477  
Entity Interactive Data Current Yes  
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Condensed Balance Sheets - USD ($)
$ in Thousands
Mar. 31, 2022
Dec. 31, 2021
Assets    
Cash and cash equivalents $ 349 $ 827
Inventory 188 94
Other current assets 61 53
Total current assets 598 974
Non-current assets    
Property and equipment, net 3 3
Total assets 601 977
Current liabilities    
Accounts payable 55 74
Other current liabilities 54 131
Related party payable 136 147
Deferred revenue 26 26
Convertible notes and short-term loans 460 256
Conversion option derivative liability 611 1,017
Warrant derivative liability 14 24
Total current liabilities 1,356 1,675
Total liabilities 1,356 1,675
Stockholders’ Deficit    
Common stock, $0.0001 par value; 7,500,000,000 shares authorized; 2,152,945 and 2,055,487 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively.
Additional paid-in capital 9,908 9,852
Services receivable (180) (356)
Accumulated deficit (10,483) (10,194)
Total stockholders’ deficit (755) (698)
Total Liabilities and Stockholders’ Deficit $ 601 $ 977
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Condensed Balance Sheets (Parentheticals) - $ / shares
Mar. 31, 2022
Dec. 31, 2021
Statement of Financial Position [Abstract]    
Common stock, shares authorized 7,500,000,000 7,500,000,000
Common stock, par value (in Dollars per share) $ 0.0001 $ 0.0001
Common stock, shares issued 2,152,945 2,055,487
Common stock, shares outstanding 2,152,945 2,055,487
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Condensed Statements of Operations (Unaudited) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Income Statement [Abstract]    
REVENUE $ 31 $ 75
COST OF GOODS SOLD 20 37
GROSS PROFIT 11 38
OPERATING EXPENSES    
Research and development 40
Sales and marketing 246 61
General and administrative 168 265
TOTAL OPERATING EXPENSES 454 326
OPERATING LOSS (443) (288)
FINANCING INCOME (EXPENSES)    
Interest expense (208) (72)
Income (expenses) in respect of warrants issued and convertible component in convertible loan, net interest expenses 362 (275)
TOTAL FINANCING INCOME (EXPENSES) 154 (347)
NET LOSS $ (289) $ (635)
Per-share data    
Basic and diluted loss per share (in Dollars per share) $ (0.14) $ (0.76)
Weighted average number of common shares outstanding (in Shares) 2,089,056 841,003
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Condensed Statements of Changes in Stockholders’ (Deficit) Equity (Unaudited) - USD ($)
$ in Thousands
Common Stock
Additional Paid-in Capital
Services receivable
Accumulated Deficit
Total
Balance at Dec. 31, 2020 $ 6,463 $ (999) $ (6,376) $ (912)
Balance (in Shares) at Dec. 31, 2020 786,700        
Conversion of convertible debt into common shares 308 308
Conversion of convertible debt into common shares (in Shares) 62,464        
Amortization of services 159 159
Net loss (635) (635)
Balance at Mar. 31, 2021 6,771 (840) (7,011) (1,080)
Balance (in Shares) at Mar. 31, 2021 849,164        
Balance at Dec. 31, 2021 9,852 (356) (10,194) (698)
Balance (in Shares) at Dec. 31, 2021 2,055,487        
Conversion of convertible debt into common shares 56 56
Conversion of convertible debt into common shares (in Shares) 97,458        
Amortization of services 176 176
Net loss (289) (289)
Balance at Mar. 31, 2022 $ 9,908 $ (180) $ (10,483) $ (755)
Balance (in Shares) at Mar. 31, 2022 2,152,945        
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Condensed Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Cash Flows From Operating Activities    
Net loss $ (289) $ (635)
Adjustments to reconcile net loss to net cash used in operating activities    
Amortization of services receivable 176 159
Interest on convertible note and short-term loan and amortization of issuance cost 208 74
Expenses in respect of warrants issued and convertible component in convertible loan, net interest expenses (364) 275
Change in operating assets and liabilities    
Inventory (94) 18
Other current assets (8)
Accounts payable (19) 25
Other current liabilities (77)
Related parties payable (11) 38
Net cash provided by (used) in operating activities (478) (46)
Cash Flows From Investing Activities
Cash Flows From Financing Activities
Net change in cash and cash equivalents (478) (46)
Cash and cash equivalents, beginning of period 827 54
Cash and cash equivalents, end of period 349 8
Supplemental disclosure of cash flow information    
Cash paid for interest
Cash paid for income tax
Non-cash investing and financing activities    
Common stock issued for conversion of convertible note and accrued interest 56 288
Common stock issued against accounts payables $ 20
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Organization and Description of Business
3 Months Ended
Mar. 31, 2022
Organization and Description of Business [Abstract]  
ORGANIZATION AND DESCRIPTION OF BUSINESS

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

 

  A.

The Company was incorporated on May 7, 2007 under the name, “Darkstar Ventures, Inc.” under the laws of the State of Nevada. The Company is a global smart luggage and smart travel brand. Samsara Luggage unveiled its Next Generation smart carry-on at the 2020 Consumer Electronics Show (CES). The Next Generation is the first to market a Wi-Fi Hotspot technology for travelers to access a secured network globally. Samsara Luggage also launched Essentials by Samsara, a safety kit providing commuters with a new layer of safety with protective items like facemasks, hand sanitizer, disposable gloves and alcohol wipes. These kits are sold individually and gifted to customers with purchase of the Carry-on Aluminum suitcase or Smart Weekender bag.

 

During the last quarter of 2020, Samsara launched Sarah & Sam Fashion and Lifestyle Collection. Sarah& Sam is a part of Samsara Direct business model prompted by the travel limitations due to the coronavirus pandemic, leveraging the company’s established digital assets and manufacturing and fulfillment supply chain capabilities to offer additional consumer products that respond to the changing needs of the market.

 

On November 12, 2019, the Company completed its merger with the Delaware corporation that was previously known as “Samsara Luggage, Inc.” (“Samsara Delaware”) in accordance with the terms of the Merger Agreement and Plan of Merger, dated as of May 10, 2019, (the “Merger Agreement”) by and among the Company, Samsara Delaware, and Avraham Bengio, pursuant to which Samsara Delaware merged with and into the Company, with the Company being the surviving corporation (the “Merger”). Following the completion of the Merger, the business of the Company going forward became the business of Samsara Delaware prior to the Merger, namely, designing, manufacturing, and selling high quality luggage products to meet the evolving needs of frequent travelers and also seeking to present new technologies within the aluminum luggage industry, including an aluminum “smart” suitcase.

 

The Common Stock listed on the OTC Pink Marketplace, previously trading through the close of business on November 11, 2019 under the ticker symbol “DAVC,” commenced trading on the OTC Pink Marketplace under the ticker symbol “SAML” on November 12, 2019. The Common Stock has a new CUSIP number, 79589J101.

 

B.Going Concern

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As of March 31, 2022, the Company had approximately $349 in cash and cash equivalents, approximately $758 in deficit of working capital, a stockholders’ deficiency of approximately $755 and an accumulated deficit of approximately $10,483. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Company’s ability to continue as a going concern is dependent upon raising capital from financing transactions and revenue from operations. Management anticipates their business will require substantial additional investments that have not yet been secured. Management is continuing in the process of fund raising in the private equity and capital markets as the Company will need to finance future activities. These financial statements do not include any adjustments that may be necessary should the Company be unable to continue as a going concern.

XML 16 R8.htm IDEA: XBRL DOCUMENT v3.22.1
Summary of Significant Accounting Policies and Basis of Presentation
3 Months Ended
Mar. 31, 2022
Accounting Policies [Abstract]  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

 

Unaudited Interim Financial Statements

 

The accompanying unaudited financial statements include the accounts of the Company, prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and with the instructions to Form 10-Q and Article 10 of U.S. Securities and Exchange Commission Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the financial statements presented herein have not been audited by an independent registered public accounting firm but include all material adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the financial condition, results of operations and cash flows for the for three-months ended March 31, 2022. However, these results are not necessarily indicative of results for any other interim period or for the year ended December 31, 2022. The preparation of financial statements in conformity with GAAP requires the Company to make certain estimates and assumptions for the reporting periods covered by the financial statements. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses. Actual amounts could differ from these estimates.

 

Certain information and footnote disclosures normally included in financial statements in accordance with generally accepted accounting principles have been omitted pursuant to the rules of the U.S. Securities and Exchange Commission (“SEC”). The accompanying unaudited condensed financial statements should be read in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on April 11, 2022 (the “Annual Report”). For further information, reference is made to the financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“‘US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. As applicable to the financial statements, the most significant estimates and assumptions relate to the measurement of the convertible notes and Going Concern.

 

Derivative Liabilities and Fair Value of Financial Instruments

 

Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments and measurement of their fair value for accounting purposes. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt under ASC 470, the Company will continue its evaluation process of these instruments as derivative financial instruments under ASC 815.

 

Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives.

  

Fair value of certain of the Company’s financial instruments including cash, accounts receivable, account payable, accrued expenses, notes payables, and other accrued liabilities approximate cost because of their short maturities. The Company measures and reports fair value in accordance with ASC 820, “Fair Value Measurements and Disclosure” defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value investments.

 

Fair value, as defined in ASC 820, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of an asset should reflect its highest and best use by market participants, principal (or most advantageous) markets, and an in-use or an in-exchange valuation premise. The fair value of a liability should reflect the risk of nonperformance, which includes, among other things, the Company’s credit risk.

 

Valuation techniques are generally classified into three categories: the market approach; the income approach; and the cost approach. The selection and application of one or more of the techniques may require significant judgment and are primarily dependent upon the characteristics of the asset or liability, and the quality and availability of inputs. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 also provides fair value hierarchy for inputs and resulting measurement as follows:

 

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities.

 

Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities; and

 

Level 3: Unobservable inputs for the asset or liability that are supported by little or no market activity, and that are significant to the fair values.

 

Fair value measurements are required to be disclosed by the Level within the fair value hierarchy in which the fair value measurements in their entirety fall. Fair value measurements using significant unobservable inputs (in Level 3 measurements) are subject to expanded disclosure requirements including a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings, and a description of where those gains or losses included in earning are reported in the statement of income.

 

The Company records a debt discount related to the issuance of convertible debts that have conversion features at adjustable rates. The debt discount for the convertible instruments is recognized and measured by allocating a portion of the proceeds as an increase in additional paid-in capital and as a reduction to the carrying amount of the convertible instrument equal to the fair value of the conversion features. The debt discount will be accreted by recording additional non-cash gains and losses related to the change in fair values of derivative liabilities over the life of the convertible notes.

 

The Company’s financial assets and liabilities that are measured at fair value on a recurring basis by level within the fair value hierarchy are as follows:

 

   Balance as of March 31, 2022 
   Level 1   Level 2   Level 3   Total 
   (U.S. dollars in thousands) 
Liabilities:                
Fair Value of convertible component in convertible loan, net of discounts and debt issue costs   
       -
    
       -
    611    611 
Fair value of warrants issued in convertible loan   
-
    
-
    14    14 
Total liabilities   
-
    
-
    625    625 

 

   Balance as of December 31, 2021 
   Level 1   Level 2   Level 3   Total 
   (U.S. dollars in thousands) 
Liabilities:                
Fair Value of convertible component in convertible loan, net of discounts and debt issue costs   
         -
    
        -
    1,017    1,017 
Fair value of warrants issued in convertible loan   
-
    
-
    24    24 
Total liabilities   
-
    
-
    1,041    1,041 

 

Reclassification

 

Certain comparative figures have been reclassified to conform to current period presentation.

 

Recent accounting pronouncements

 

From time to time, new accounting pronouncements are issued by the Financial Accounting Standard Board (“FASB”) or other standard setting bodies that the Company adopts as of the specified effective date. Unless otherwise discussed, the Company does not believe that the impact of recently issued standards that are not yet effective will have a material impact on the Company’s financial position or results of operations upon adoption. 

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Convertible Notes
3 Months Ended
Mar. 31, 2022
Debt Disclosure [Abstract]  
CONVERTIBLE NOTES

 NOTE 3 – CONVERTIBLE NOTES

 

A.On June 5, 2019, the Company entered into a Securities Purchase Agreement (“SPA”) with YAII PN, Ltd. (the “Investor”), pursuant to which the Investor agreed to provide the Company with a convertible loan in the aggregate amount of $1,100,000 in three tranches, and the Company agreed to issue convertible debentures and a warrant to the Investor.

 

The first tranche of the convertible debentures in the amount of $200,000 was provided upon execution of the SPA. The second tranche in the amount of $300,000 was provided on October 23, 2019 upon the Company filing of a Registration Statement on Form S-4 in connection with the Merger with Samsara Delaware. The third tranche in the amount of $600,000 was provided on November 18, 2019 upon consummation of the Merger with Samsara Delaware and the fulfillment of all conditions required for the Merger. The Company incurred issuance cost of $100,000 with connection to those convertible debentures.

 

In the period from loan inception through December 31, 2021, the full amount of outstanding principal and accrued interest was converted into shares of common stock.

 

In addition, the Company issued to the Investor a warrant to purchase 13,095 shares of common stock, at an exercise price equal to $21.00. The warrants may be exercised within 5 years from the issuance date by cash payment or through cashless exercise by the surrender of warrants shares having a value equal to the exercise price of the portion of the warrant being exercised.

 

The Company considered the provisions of ASC 815-40, “Derivatives and Hedging: Contracts in Entity’s Own Equity”, with respect to the detachable warrants that were issued to the convertible loan, and determined that as a result of the “cashless exercise” and variable exercise price that would adjust the number of warrants and the exercise price of the warrants based on the price at which the Company subsequently issues shares or other equity-linked financial instruments, such warrants cannot be considered as indexed to the Company’s own stock. Accordingly, the warrants were recognized as derivative liability at their fair value on initial recognition. In subsequent periods, the warrants were marked to market with the changes in fair value recognized as financing expense or income in the consolidated statement of operations.

 

The warrants were estimated by third party appraiser using the Black-Scholes option-pricing model to compute the fair value of the derivative and to mark to market the fair value of the derivative at each balance sheet date.  The following are the data and assumptions used as of the balance sheet dates:

 

   March 31,
2022
 
Common stock price  $0.6 
Expected volatility   270.18%
Expected term   2.18 years  
Risk free rate   2.31%
Expected dividend yield   0%
Fair Market Value of Warrants  $6 

 

   December 31,
2021
 
Common stock price   0.9585 
Expected volatility   275.94%
Expected term   2.43 years  
Risk free rate   0.83%
Expected dividend yield   0%
Fair Market Value of Warrants  $10 

 

B.On September 3, 2020, Samsara Luggage, Inc. (the “Company”) entered into a second Securities Purchase Agreement (“SPA”) with the Investor, pursuant to which the Investor will invest an aggregate amount of $220 in two tranches, and the Company will issue convertible debentures and warrants to the Investor. The first tranche of the convertible debentures in the amount of $150 was provided upon execution of the SPA. The second tranche in the amount of $70 was provided on October 7, 2020. Each tranche of the loan bears interest at an annual rate of ten percent (10%). Each tranche of the investment bears interest at an annual rate of ten percent (10%) and will be repayable after two years. Each tranche of the investment will be convertible at any time into shares of the Company’s Common Stock at a conversion price equal to the lower of (a) $0.003 per share, or (b) 80% of the lowest the daily dollar volume-weighted average price for the Company’s Common Stock during the 10 trading days immediately preceding the conversion date.

 

In the period from loan inception through December 31, 2021, the full amount of outstanding principal and accrued interest was converted into shares of common stock.

 

In addition, the Company issued to the Investor a warrant to purchase 2,619 shares of common stock, at an exercise price equal to $21.00. The warrants may be exercised within 5 years from the issuance date by cash payment or through cashless exercise by the surrender of warrants shares having a value equal to the exercise price of the portion of the warrant being exercised.

 

The Company considered the provisions of ASC 815-40, “Derivatives and Hedging: Contracts in Entity’s Own Equity”, with respect to the detachable warrants that were issued to the Convertible loan, and determined that as a result of the “cashless exercise” and variable exercise price that would adjust the number of warrants and the exercise price of the warrants based on the price at which the Company subsequently issues shares or other equity-linked financial instruments, such warrants cannot be considered as indexed to the Company’s own stock. Accordingly, the warrants were recognized as derivative liability at their fair value on initial recognition. In subsequent periods, the warrants were marked to market with the changes in fair value recognized as financing expense or income in the consolidated statement of operations.

 

The warrants were estimated by third party appraiser using the Black-Scholes option-pricing model to compute the fair value of the derivative and to mark to market the fair value of the derivative at each balance sheet dates:

 

The following are the data and assumptions used as of the balance sheet dates:

 

   March 31,
2022
 
Common stock price  $0.6 
Expected volatility   267.55%
Expected term (years)   3.43 
Risk free rate   2.44%
Expected dividend yield   0%
Fair Market Value of Warrants  $1 

 

   December 31,
2021
 
Common stock price   0.9585 
Expected volatility   275.94%
Expected term (years)   3.68 
Risk free rate   1.07%
Expected dividend yield   0%
Fair Market Value of Warrants  $2 

 

C.

On April 6, 2021, the Company entered into a third Securities Purchase Agreement (“SPA”) with YAII PN, Ltd. (the “Investor”), pursuant to which the Investor agreed to provide the Company with a convertible loan in the aggregate amount of $150 and the Company agreed to issue convertible debentures and a warrant to the Investor. The loan will bear interest at an annual rate of ten percent (10%) and will be repayable after two years. The investment will be convertible at any time into shares of the Company’s Common Stock at a conversion price equal to the lower of (a) $3.46, or (b) 80% of the lowest the daily dollar volume-weighted average price for the Company’s Common Stock during the 10 trading days immediately preceding the conversion date.

 

In accordance with ASC 815-15-25 the conversion feature was considered embedded derivative instrument and is to be recorded at its fair value as its fair value can be separated from the convertible loan and its conversion is independent of the underlying note value. The Company recorded finance expenses in respect of the convertible component in the convertible loan in the excess amount of the convertible component fair value over the face loan amount. The conversion feature derivative liability is then marked to market each reporting period with the resulting gains or losses shown in the statements of operations.

 

The fair value of the convertible component was estimated by third party appraiser using the Monte Carlo Simulation Model to compute the fair value of the derivative and to mark to market the fair value of the derivative at each of the issuance and balance sheet dates.

The following are the data and assumptions used as of the balance sheet dates:

 

   March 31 ,
2022
 
Common stock price  $0.6 
Expected volatility   162.97%
Expected term   1.02 
Risk free rate   1.64%
Expected dividend yield   0%
Fair Market Value of Convertible component  $89 

 

   December 31 ,
2021
 
Common stock price  $0.9585 
Expected volatility   275.94%
Expected term   1.27 
Risk free rate   1.07%
Expected dividend yield   0%
Fair Market Value of Convertible component  $164 

 

As part of the transaction, the Company issued to the Investor warrants to purchase an aggregate of 10,838 shares of Common Stock, at an exercise price equal to $3.46. The term of each warrant is five years from the issue date. Each warrant may be exercised by cash payment or through cashless exercise by the surrender of warrant shares having a value equal to the exercise price of the portion of the warrant being exercised.

 

    The warrants were estimated by third party appraiser using the Black-Scholes option-pricing model to compute the fair value of the derivative and to mark to market the fair value of the derivative at each of the issuance and balance sheet dates.

The following are the data and assumptions used as of the balance sheet dates:

 

   March 31 ,
2022
 
Common stock price  $0.6 
Expected volatility   267.6%
Expected term   4.02 
Risk free rate   2.43%
Expected dividend yield   0%
Fair Market Value of Warrants  $6 

 

   December 31 ,
2021
 
Common stock price  $0.9585 
Expected volatility   275.94%
Expected term   4.27 
Risk free rate   1.07%
Expected dividend yield   0%
Fair Market Value of Warrants  $12 

 

D.

On June 7, 2021, Samsara Luggage, Inc. (the “Company”) entered into a fourth Securities Purchase Agreement (“SPA”) with the Investor, pursuant to which the Investor will invest an aggregate amount of $1,250 in three tranches, and the Company will issue convertible debentures and warrants to the Investor, in which each tranche is convertible into shares of the Company’s common stock, par value $0.0001 (the “Common Stock”). The first tranche in the principal amount of $500 was issued on June 7, 2021. The second tranche in the principal amount of $500 was issued on July 6, 2021 following the filing of a registration statement on Form S-1 (the “Registration Statement”) under the Securities Act of 1933, as amended, registering the Conversion Shares issuable upon conversion of the Convertible Debentures with the Securities and Exchange Commission (the “SEC”). The third tranche in the principal amount of $250 was  issued on September 7, 2021 following the Registration Statement being declared effective by the SEC.

 

On September 20, 2021, and pursuant to the SPA, YAII exercised its option to convert the Convertible Promissory Note principal in the amount of $100 into 47,887 shares of Common Stock of the Company. The fair market value of the shares was $130.

 

On October 14, 2021, and pursuant to the SPA, YAII exercised its option to convert the Convertible Promissory Note principal in the amount of $150 and accrued interest of $1 into 109,018 shares of Common Stock of the Company. The fair market value of the shares was $211.

 

As of December 31, 2021 the third tranche from September 7, 2021 was fully converted into shares of Common Stock.

 

On November 3, 2021, and pursuant to the SPA, YAII exercised its option to convert the Convertible Promissory Note principal in the amount of $100 and accrued interest of $16 into 92,089 shares of Common Stock of the Company. The fair market value of the shares was $161.

 

On December 20, 2021, and pursuant to the SPA, YAII exercised its option to convert the Convertible Promissory Note principal in the amount of $75 and accrued interest of $5 into 98,538 shares of Common Stock of the Company. The fair market value of the shares was $123.

 

On March 1, 2022, and pursuant to the SPA, YAII exercised its option to convert the Convertible Promissory Note principal in the amount of $35 and accrued interest of $6 into 97,458 shares of Common Stock of the Company. The fair market value of the shares was $56.

 

The Convertible Debentures bear interest at a rate of 10% per annum (15% on default) and have a maturity date of one (1) year. The Convertible Debentures provide a conversion right, in which any portion of the principal amount of the Convertible Debentures, together with any accrued but unpaid interest, may be converted into the Company’s Common Stock at a conversion price equal to 80% of the lowest volume weighted average price of the Company’s Common Stock during the ten (10) trading days immediately preceding the date of conversion, subject to adjustment. The Convertible Debentures may not be converted into common stock to the extent such conversion would result in the Investor beneficially owning more than 9.99% of the Company’s outstanding Common Stock (the “Beneficial Ownership Limitation”); provided, however, that the Beneficial Ownership Limitation may be waived by the Investor upon not less than 65 days’ prior notice to the Company. The Convertible Debentures provide the Company with a redemption right, pursuant to which the Company, upon fifteen (15) business days’ prior notice to the Investor, may redeem, in whole or in part, outstanding principal and interest at a redemption price equal to the principal amount being redeemed plus a redemption premium equal to 5% of the outstanding principal amount being redeemed plus outstanding and accrued interest; however, the Investor shall have fifteen (15) business days after receipt of the Company’s redemption notice to elect to convert all or any portion of the Convertible Debentures, subject to the Beneficial Ownership Limitation. In connection with the Securities Purchase Agreement, the Company executed a registration rights agreement (the “Registration Rights Agreement”) pursuant to which it is required to file the Registration Statement with the SEC for the resale of the Conversion Shares. Pursuant to the Registration Rights Agreement, the Company is required to meet certain obligations with respect to, among other things, the timeliness of the filing and effectiveness of the Registration Statement. The Company is obligated to file the Registration Statement no later than 45 days after the First Closing Date and to have it declared effective by the SEC no later than 105 days after filing (the “Registration Obligations”).

 

In accordance with ASC 815-15-25 the conversion feature was considered embedded derivative instrument and is to be recorded at its fair value as its fair value can be separated from the convertible loan and its conversion is independent of the underlying note value. The Company recorded finance expenses in respect of the convertible component in the convertible loan in the excess amount of the convertible component fair value over the face loan amount. The conversion feature derivative liability is then marked to market each reporting period with the resulting gains or losses shown in the statements of operations.

The fair value of the convertible component was estimated by third party appraiser using the Monte Carlo Simulation Model to compute the fair value of the derivative and to mark to market the fair value of the derivative at each balance sheet dates:

 

The following are the data and assumptions used as of the balance sheet dates:

 

   March 31 ,
2022
 
Common stock price  $0.6 
Expected volatility   94.76%
Expected term   0.19 – 0.27
Risk free rate    0.39 – 0.55%
Expected dividend yield   0%
Fair Market Value of Convertible component  $319 

 

   December 31,
2021
 
Common stock price   $0.9585 
Expected volatility    86.8 – 87.57 %
Expected term    0.43 – 0.51  
Risk free rate    0.16 – 0.19%
Expected dividend yield    0%
Fair Market Value of Convertible component   $331 

 

E.

On December 14, 2021, Samsara Luggage, Inc. (the “Company”) entered into a fifth Securities Purchase Agreement (“SPA”) with the Investor, pursuant to which the Investor will invest an aggregate amount of $ 500, and the Company will issue convertible debentures to the Investor.

 

The Convertible Debenture bears interest at a rate of 10% per annum (15% on default) and has a maturity date of one (1) year. The Convertible Debenture provides a conversion right, in which any portion of the principal amount of the Convertible Debenture, together with any accrued but unpaid interest, may be converted into the Company’s Common Stock at a conversion price equal to 80% of the lowest volume weighted average price of the Company’s Common Stock during the ten (10) trading days immediately preceding the date of conversion, subject to adjustment. The Convertible Debenture may not be converted into common stock to the extent such conversion would result in the Investor beneficially owning more than 4.99% of the Company’s outstanding Common Stock; provided, however, that the Beneficial Ownership Limitation may be waived by the Investor upon not less than 65 days’ prior notice to the Company. The Convertible Debenture provides the Company with a redemption right, pursuant to which the Company, upon fifteen (15) business days’ prior notice to the Investor, may redeem, in whole or in part, outstanding principal and interest under the Convertible Debenture at a redemption price equal to the principal amount being redeemed plus a redemption premium equal to 5% of the outstanding principal amount being redeemed plus outstanding and accrued interest; however, the Investor shall have fifteen (15) business days after receipt of the Company’s redemption notice to elect to convert all or any portion of the Convertible Debenture, subject to the Beneficial Ownership Limitation.

 

In accordance with ASC 815-15-25 the conversion feature was considered embedded derivative instrument and is to be recorded at its fair value as its fair value can be separated from the convertible loan and its conversion is independent of the underlying note value. The Company recorded finance expenses in respect of the convertible component in the convertible loan in the excess amount of the convertible component fair value over the face loan amount. The conversion feature derivative liability is then marked to market each reporting period with the resulting gains or losses shown in the statements of operations.

The following are the data and assumptions used as of the balance sheet date:

 

   March 31,
2022
 
Common stock price  $0.6 
Expected volatility   82.33%
Expected term   0.71 
Risk free rate   1.3%
Expected dividend yield   0%
Fair Market Value of Convertible component  $204 

 

   December 31,
2021
 
Common stock price  $0.9585 
Expected volatility   205.2%
Expected term   0.95 
Risk free rate   0.37%
Expected dividend yield   0%
Fair Market Value of Convertible component  $522 

 

The following table presents the changes in fair value of the level 3 liabilities for the periods ended March 31, 2022 and December 31, 2021:

 

   Warrants   Convertible
component
 
   (U.S. dollars in thousands) 
Outstanding at December 31, 2021   24    1,017 
Settled upon debt conversion   
-
    (4)
Changes in fair value   (10)   (402)
Outstanding at March 31, 2022   14    611 

   Warrants   Convertible
component
 
   (U.S. dollars in thousands) 
Outstanding at December 31, 2021   20    493 
Fair value of issued level 3 liability   21    2,064 
Changes in fair value   (17)   (1,540)
Outstanding at December 31, 2021   24    1,017 

XML 18 R10.htm IDEA: XBRL DOCUMENT v3.22.1
Stockholders’ Equity
3 Months Ended
Mar. 31, 2022
Stockholders' Equity Note [Abstract]  
STOCKHOLDERS’ EQUITY

NOTE 4 – STOCKHOLDERS’ EQUITY

 

Common Stock

 

On March 1, 2022, and pursuant to the SPA, YAII exercised its option to convert the Convertible Promissory Note principal in the amount of $35 and accrued interest of $6 into 97,458 shares of Common Stock of the Company. The fair market value of the shares was $56.

XML 19 R11.htm IDEA: XBRL DOCUMENT v3.22.1
Related Party Transactions
3 Months Ended
Mar. 31, 2022
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS

NOTE 5 – RELATED PARTY TRANSACTIONS

 

Related party payable

 

   March 31,
2022
   December 31,
2021
 
   (U.S. dollars in thousands) 
Related party payable due to management fee   136    147 

 

General and Administrative Expenses

 

    For the period ended
March 31,
    For the period ended
March 31,
 
    2022     2021  
    (U.S. dollars in thousands)  
Management Fee    

25

      25  

 

Research and development Expenses

 

    For the period ended
March 31,
    For the period ended
March 31,
 
    2022     2021  
    (U.S. dollars in thousands)  
Consulting Fee     32       -  
XML 20 R12.htm IDEA: XBRL DOCUMENT v3.22.1
Subsequent Events
3 Months Ended
Mar. 31, 2022
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 6 – SUBSEQUENT EVENTS

 

Series A Preferred Stock

 

On May 12, 2022, the Company established a series of redeemable convertible preferred stock (the “Series A Preferred Stock”), par value $0.0001 per share, pursuant to a Certificate of Designation, Preference and Rights of Series A Preferred Stock of the Company (the “Certificate of Designation”).

 

Pursuant to the Certificate of Designation, the Company authorized 1,000,000 shares of the Series A Preferred Stock, which may be convertible into shares of common stock, par value $0.0001 per share, of the Company (the “Common Stock”) at the option of the holders thereof at any time after the issuance of the Series A Preferred Stock, at a conversion price equal a Variable Conversion Price (the “Conversion Price”). The "Variable Conversion Price" means 80% multiplied by the Market Price (representing a discount rate of 20%). The “Market Price” means the average of the lowest two (2) Trading Prices (as defined below) for the Common Stock during the ten (10) Trading Day period ending on the latest complete trading day prior to the conversion date. The “Trading Price” means, for any security as of any date, the actual closing price on the OTCQB, OTCQX, Pink Sheets electronic quotation system or applicable trading market (the “OTC”).

 

The Series A Preferred Stock will, with respect to dividend rights and rights upon liquidation, winding-up or dissolution, rank: (a) senior with respect to dividends and right of liquidation with the Company’s Common Stock and (b) junior with respect to dividends and right of liquidation to all existing and future indebtedness of the Company and existing and outstanding preferred stock of the Company.

 

The Series A Preferred Stock shall have no right to vote on any matters requiring shareholder approval or any matters on which the shareholders are permitted to vote.

 

Each share of Series A Preferred Stock will carry an annual dividend in the amount of six percent (6%) of the price per share of Series A Preferred Stock of $1.00 (the “Divided Rate”), which shall be cumulative, payable solely upon redemption, liquidation or conversion. Upon the occurrence of an event of default (as further defined further in the Certificate of Designation), the Dividend Rate shall automatically increase to fifteen percent (15%).

 

Series A Preferred Stock Purchase Agreement

 

On May 17, 2022, the Company entered into a Series A Preferred Stock Purchase Agreement (the “SPA”) with 1800 Diagonal Lending LLC f/k/a Sixth Street Lending LLC, a Virginia limited liability company (the “Investor”) pursuant to which the Company issued and sold to the Investor 148,062 shares of Series A Preferred Stock for a purchase price of $128,750.00.

 

Pursuant to the SPA, the Investor may convert all or a portion of the outstanding Series A Preferred Stock into shares of the Company’s Common Stock beginning on the date which is 180 days after the issuance date of the Series A Preferred Stock (the “Issuance Date”) into Common Stock; provided, however, that the Investor may not convert the Series A Preferred Stock to the extent that such conversion would result in beneficial ownership by the Investor and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock.

 

The Company will have the right, at the Company’s sole option, provided that an event of default has not occurred, to redeem all or any portion of the shares of Series A Preferred Stock, exercisable on not more than 3 Trading Days prior written notice to the holders of the Series A Preferred Stock, in full. If the Company redeems the shares of Series A Preferred Stock within 180 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 110%; if such prepayment is made between the 181st day and the 730th day after the issuance of the Series A Preferred Stock, then such redemption premium is 120%. After the 730th day following the Issuance Date, there shall be no further right of redemption.

 

In connection with the Certificate of Designation, the Company agreed to cause its transfer agent to reserve four times the number of shares of Common Stock that would be issuable upon full conversion of the Series A Preferred Stock (assuming that the 4.99% limitation set forth in herein is not in effect) (based on the respective Conversion Price of the Series A Preferred Stock in effect from time to time).

XML 21 R13.htm IDEA: XBRL DOCUMENT v3.22.1
Accounting Policies, by Policy (Policies)
3 Months Ended
Mar. 31, 2022
Accounting Policies [Abstract]  
Unaudited Interim Financial Statements

Unaudited Interim Financial Statements

 

The accompanying unaudited financial statements include the accounts of the Company, prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and with the instructions to Form 10-Q and Article 10 of U.S. Securities and Exchange Commission Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the financial statements presented herein have not been audited by an independent registered public accounting firm but include all material adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the financial condition, results of operations and cash flows for the for three-months ended March 31, 2022. However, these results are not necessarily indicative of results for any other interim period or for the year ended December 31, 2022. The preparation of financial statements in conformity with GAAP requires the Company to make certain estimates and assumptions for the reporting periods covered by the financial statements. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses. Actual amounts could differ from these estimates.

 

Certain information and footnote disclosures normally included in financial statements in accordance with generally accepted accounting principles have been omitted pursuant to the rules of the U.S. Securities and Exchange Commission (“SEC”). The accompanying unaudited condensed financial statements should be read in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on April 11, 2022 (the “Annual Report”). For further information, reference is made to the financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

 

Use of Estimates

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“‘US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. As applicable to the financial statements, the most significant estimates and assumptions relate to the measurement of the convertible notes and Going Concern.

 

Derivative Liabilities and Fair Value of Financial Instruments

Derivative Liabilities and Fair Value of Financial Instruments

 

Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments and measurement of their fair value for accounting purposes. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt under ASC 470, the Company will continue its evaluation process of these instruments as derivative financial instruments under ASC 815.

 

Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives.

  

Fair value of certain of the Company’s financial instruments including cash, accounts receivable, account payable, accrued expenses, notes payables, and other accrued liabilities approximate cost because of their short maturities. The Company measures and reports fair value in accordance with ASC 820, “Fair Value Measurements and Disclosure” defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value investments.

 

Fair value, as defined in ASC 820, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of an asset should reflect its highest and best use by market participants, principal (or most advantageous) markets, and an in-use or an in-exchange valuation premise. The fair value of a liability should reflect the risk of nonperformance, which includes, among other things, the Company’s credit risk.

 

Valuation techniques are generally classified into three categories: the market approach; the income approach; and the cost approach. The selection and application of one or more of the techniques may require significant judgment and are primarily dependent upon the characteristics of the asset or liability, and the quality and availability of inputs. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 also provides fair value hierarchy for inputs and resulting measurement as follows:

 

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities.

 

Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities; and

 

Level 3: Unobservable inputs for the asset or liability that are supported by little or no market activity, and that are significant to the fair values.

 

Fair value measurements are required to be disclosed by the Level within the fair value hierarchy in which the fair value measurements in their entirety fall. Fair value measurements using significant unobservable inputs (in Level 3 measurements) are subject to expanded disclosure requirements including a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings, and a description of where those gains or losses included in earning are reported in the statement of income.

 

The Company records a debt discount related to the issuance of convertible debts that have conversion features at adjustable rates. The debt discount for the convertible instruments is recognized and measured by allocating a portion of the proceeds as an increase in additional paid-in capital and as a reduction to the carrying amount of the convertible instrument equal to the fair value of the conversion features. The debt discount will be accreted by recording additional non-cash gains and losses related to the change in fair values of derivative liabilities over the life of the convertible notes.

 

The Company’s financial assets and liabilities that are measured at fair value on a recurring basis by level within the fair value hierarchy are as follows:

 

   Balance as of March 31, 2022 
   Level 1   Level 2   Level 3   Total 
   (U.S. dollars in thousands) 
Liabilities:                
Fair Value of convertible component in convertible loan, net of discounts and debt issue costs   
       -
    
       -
    611    611 
Fair value of warrants issued in convertible loan   
-
    
-
    14    14 
Total liabilities   
-
    
-
    625    625 

 

   Balance as of December 31, 2021 
   Level 1   Level 2   Level 3   Total 
   (U.S. dollars in thousands) 
Liabilities:                
Fair Value of convertible component in convertible loan, net of discounts and debt issue costs   
         -
    
        -
    1,017    1,017 
Fair value of warrants issued in convertible loan   
-
    
-
    24    24 
Total liabilities   
-
    
-
    1,041    1,041 

 

Reclassification

Reclassification

 

Certain comparative figures have been reclassified to conform to current period presentation.

 

Recent accounting pronouncements

Recent accounting pronouncements

 

From time to time, new accounting pronouncements are issued by the Financial Accounting Standard Board (“FASB”) or other standard setting bodies that the Company adopts as of the specified effective date. Unless otherwise discussed, the Company does not believe that the impact of recently issued standards that are not yet effective will have a material impact on the Company’s financial position or results of operations upon adoption. 

XML 22 R14.htm IDEA: XBRL DOCUMENT v3.22.1
Summary of Significant Accounting Policies and Basis of Presentation (Tables)
3 Months Ended
Mar. 31, 2022
Accounting Policies [Abstract]  
Schedule of financial assets and liabilities that are measured at fair value on a recurring basis
   Balance as of March 31, 2022 
   Level 1   Level 2   Level 3   Total 
   (U.S. dollars in thousands) 
Liabilities:                
Fair Value of convertible component in convertible loan, net of discounts and debt issue costs   
       -
    
       -
    611    611 
Fair value of warrants issued in convertible loan   
-
    
-
    14    14 
Total liabilities   
-
    
-
    625    625 

 

   Balance as of December 31, 2021 
   Level 1   Level 2   Level 3   Total 
   (U.S. dollars in thousands) 
Liabilities:                
Fair Value of convertible component in convertible loan, net of discounts and debt issue costs   
         -
    
        -
    1,017    1,017 
Fair value of warrants issued in convertible loan   
-
    
-
    24    24 
Total liabilities   
-
    
-
    1,041    1,041 

 

XML 23 R15.htm IDEA: XBRL DOCUMENT v3.22.1
Convertible Notes (Tables)
3 Months Ended
Mar. 31, 2022
Debt Disclosure [Abstract]  
Schedule of the fair value of the derivative at each balance sheet
   March 31,
2022
 
Common stock price  $0.6 
Expected volatility   270.18%
Expected term   2.18 years  
Risk free rate   2.31%
Expected dividend yield   0%
Fair Market Value of Warrants  $6 

 

   December 31,
2021
 
Common stock price   0.9585 
Expected volatility   275.94%
Expected term   2.43 years  
Risk free rate   0.83%
Expected dividend yield   0%
Fair Market Value of Warrants  $10 

 

   March 31,
2022
 
Common stock price  $0.6 
Expected volatility   267.55%
Expected term (years)   3.43 
Risk free rate   2.44%
Expected dividend yield   0%
Fair Market Value of Warrants  $1 

 

   December 31,
2021
 
Common stock price   0.9585 
Expected volatility   275.94%
Expected term (years)   3.68 
Risk free rate   1.07%
Expected dividend yield   0%
Fair Market Value of Warrants  $2 

 

   March 31 ,
2022
 
Common stock price  $0.6 
Expected volatility   162.97%
Expected term   1.02 
Risk free rate   1.64%
Expected dividend yield   0%
Fair Market Value of Convertible component  $89 

 

   December 31 ,
2021
 
Common stock price  $0.9585 
Expected volatility   275.94%
Expected term   1.27 
Risk free rate   1.07%
Expected dividend yield   0%
Fair Market Value of Convertible component  $164 

 

   March 31 ,
2022
 
Common stock price  $0.6 
Expected volatility   267.6%
Expected term   4.02 
Risk free rate   2.43%
Expected dividend yield   0%
Fair Market Value of Warrants  $6 

 

   December 31 ,
2021
 
Common stock price  $0.9585 
Expected volatility   275.94%
Expected term   4.27 
Risk free rate   1.07%
Expected dividend yield   0%
Fair Market Value of Warrants  $12 

 

   March 31 ,
2022
 
Common stock price  $0.6 
Expected volatility   94.76%
Expected term   0.19 – 0.27
Risk free rate    0.39 – 0.55%
Expected dividend yield   0%
Fair Market Value of Convertible component  $319 

 

   December 31,
2021
 
Common stock price   $0.9585 
Expected volatility    86.8 – 87.57 %
Expected term    0.43 – 0.51  
Risk free rate    0.16 – 0.19%
Expected dividend yield    0%
Fair Market Value of Convertible component   $331 

 

   March 31,
2022
 
Common stock price  $0.6 
Expected volatility   82.33%
Expected term   0.71 
Risk free rate   1.3%
Expected dividend yield   0%
Fair Market Value of Convertible component  $204 

 

   December 31,
2021
 
Common stock price  $0.9585 
Expected volatility   205.2%
Expected term   0.95 
Risk free rate   0.37%
Expected dividend yield   0%
Fair Market Value of Convertible component  $522 

 

Schedule of changes in fair value of the level 3 liabilities
   Warrants   Convertible
component
 
   (U.S. dollars in thousands) 
Outstanding at December 31, 2021   24    1,017 
Settled upon debt conversion   
-
    (4)
Changes in fair value   (10)   (402)
Outstanding at March 31, 2022   14    611 

   Warrants   Convertible
component
 
   (U.S. dollars in thousands) 
Outstanding at December 31, 2021   20    493 
Fair value of issued level 3 liability   21    2,064 
Changes in fair value   (17)   (1,540)
Outstanding at December 31, 2021   24    1,017 

XML 24 R16.htm IDEA: XBRL DOCUMENT v3.22.1
Related Party Transactions (Tables)
3 Months Ended
Mar. 31, 2022
Related Party Transactions [Abstract]  
Schedule of related party transactions
   March 31,
2022
   December 31,
2021
 
   (U.S. dollars in thousands) 
Related party payable due to management fee   136    147 

 

    For the period ended
March 31,
    For the period ended
March 31,
 
    2022     2021  
    (U.S. dollars in thousands)  
Management Fee    

25

      25  

 

    For the period ended
March 31,
    For the period ended
March 31,
 
    2022     2021  
    (U.S. dollars in thousands)  
Consulting Fee     32       -  
XML 25 R17.htm IDEA: XBRL DOCUMENT v3.22.1
Organization and Description of Business (Details)
$ in Thousands
3 Months Ended
Mar. 31, 2022
USD ($)
Organization and Description of Business [Abstract]  
Cash and cash equivalents $ 349
Deficit of working capital 758
Stockholders’ deficiency 755
Accumulated deficit $ 10,483
XML 26 R18.htm IDEA: XBRL DOCUMENT v3.22.1
Summary of Significant Accounting Policies and Basis of Presentation (Details) - Schedule of financial assets and liabilities that are measured at fair value on a recurring basis - USD ($)
$ in Thousands
Mar. 31, 2022
Dec. 31, 2021
Liabilities:    
Fair Value of convertible component in convertible loan, net of discounts and debt issue costs $ 611 $ 1,017
Fair value of warrants issued in convertible loan 14 24
Total liabilities 625 1,041
Level 1 [Member]    
Liabilities:    
Fair Value of convertible component in convertible loan, net of discounts and debt issue costs
Fair value of warrants issued in convertible loan
Total liabilities
Level 2 [Member]    
Liabilities:    
Fair Value of convertible component in convertible loan, net of discounts and debt issue costs
Fair value of warrants issued in convertible loan
Total liabilities
Level 3 [Member]    
Liabilities:    
Fair Value of convertible component in convertible loan, net of discounts and debt issue costs 611 1,017
Fair value of warrants issued in convertible loan 14 24
Total liabilities $ 625 $ 1,041
XML 27 R19.htm IDEA: XBRL DOCUMENT v3.22.1
Convertible Notes (Details) - USD ($)
1 Months Ended 3 Months Ended
Mar. 01, 2022
Dec. 14, 2021
Nov. 03, 2021
Oct. 14, 2021
Jun. 07, 2021
Apr. 06, 2021
Sep. 03, 2020
Dec. 20, 2021
Mar. 31, 2022
Sep. 20, 2021
Jun. 05, 2019
Convertible Notes (Details) [Line Items]                      
Exercisable term                 5 years    
Warrants to purchase shares of common stock (in Shares)                 2,619    
Conversion price (in Dollars per share)                 $ 21    
Conversion price, percentage                 80.00%    
Interest rate                 10.00%    
Default interest rate   15.00%             15.00%    
Maturity term                 1 year    
Outstanding common stock, percentage                 9.99%    
Outstanding principal amount, percentage                 5.00%    
Common Stock [Member]                      
Convertible Notes (Details) [Line Items]                      
Common stock, par value (in Dollars per share)         $ 0.0001            
Securities Purchase Agreement [Member]                      
Convertible Notes (Details) [Line Items]                      
Convertible debt                     $ 1,100,000
Debt instrument, description                 The first tranche of the convertible debentures in the amount of $200,000 was provided upon execution of the SPA. The second tranche in the amount of $300,000 was provided on October 23, 2019 upon the Company filing of a Registration Statement on Form S-4 in connection with the Merger with Samsara Delaware. The third tranche in the amount of $600,000 was provided on November 18, 2019 upon consummation of the Merger with Samsara Delaware and the fulfillment of all conditions required for the Merger. The Company incurred issuance cost of $100,000 with connection to those convertible debentures.     
Exercise price (in Dollars per share)           $ 3.46          
Description of convertible notes           The loan will bear interest at an annual rate of ten percent (10%) and will be repayable after two years. the Investor, pursuant to which the Investor will invest an aggregate amount of $220 in two tranches, and the Company will issue convertible debentures and warrants to the Investor. The first tranche of the convertible debentures in the amount of $150 was provided upon execution of the SPA. The second tranche in the amount of $70 was provided on October 7, 2020. Each tranche of the loan bears interest at an annual rate of ten percent (10%). Each tranche of the investment bears interest at an annual rate of ten percent (10%) and will be repayable after two years. Each tranche of the investment will be convertible at any time into shares of the Company’s Common Stock at a conversion price equal to the lower of (a) $0.003 per share, or (b) 80% of the lowest the daily dollar volume-weighted average price for the Company’s Common Stock during the 10 trading days immediately preceding the conversion date.        
Principal amount $ 35,000 $ 500,000 $ 100,000 $ 150,000   $ 150,000   $ 75,000      
Conversion price, percentage   80.00%       80.00%          
Accrued interest $ 6,000   $ 16,000 $ 1,000       $ 5,000      
Issuance of common stock (in Shares) 97,458   92,089 109,018       98,538      
Aggregate amount         $ 1,250,000            
Fair value market $ 56,000   $ 161,000 $ 211,000       $ 123,000      
Interest rate   10.00%                  
Maturity term   1 year                  
Outstanding common stock, percentage   4.99%                  
Outstanding principal amount, percentage   5.00%                  
Investor Warrants [Member]                      
Convertible Notes (Details) [Line Items]                      
Issuance of common stock (in Shares)                 5    
Convertible Promissory Note [Member]                      
Convertible Notes (Details) [Line Items]                      
Warrants to purchase (in Shares)                 13,095    
Exercise price (in Dollars per share)                 $ 21    
Exercisable term                 5 years    
Principal amount 35               $ 10,838,000    
Accrued interest 6               $ 3,460    
Issuance of common stock (in Shares)                   47,887  
Fair value market $ 56                    
Convertible Debt [Member]                      
Convertible Notes (Details) [Line Items]                      
Principal amount                   $ 100,000  
Convertible terms, description         The first tranche in the principal amount of $500 was issued on June 7, 2021. The second tranche in the principal amount of $500 was issued on July 6, 2021 following the filing of a registration statement on Form S-1 (the “Registration Statement”) under the Securities Act of 1933, as amended, registering the Conversion Shares issuable upon conversion of the Convertible Debentures with the Securities and Exchange Commission (the “SEC”). The third tranche in the principal amount of $250 was  issued on September 7, 2021 following the Registration Statement being declared effective by the SEC.            
Fair value market                   $ 130,000  
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$ / shares in Units, $ in Thousands
3 Months Ended 12 Months Ended
Mar. 31, 2022
Dec. 31, 2021
Convertible Notes (Details) - Schedule of the fair value of the derivative at each balance sheet [Line Items]    
Common stock price (in Dollars per share) $ 0.6 $ 0.9585
Expected volatility 267.60% 275.94%
Expected term (years) 4 years 7 days 4 years 3 months 7 days
Risk free rate 2.43% 1.07%
Expected dividend yield 0.00% 0.00%
Fair Market Value of Warrants (in Dollars) $ 6 $ 12
June 5, 2019 [Member]    
Convertible Notes (Details) - Schedule of the fair value of the derivative at each balance sheet [Line Items]    
Common stock price (in Dollars per share) $ 0.6 $ 0.9585
Expected volatility 270.18% 275.94%
Expected term (years) 2 years 2 months 4 days 2 years 5 months 4 days
Risk free rate 2.31% 0.83%
Expected dividend yield 0.00% 0.00%
Fair Market Value of Warrants (in Dollars) $ 6 $ 10
September 3, 2020 [Member]    
Convertible Notes (Details) - Schedule of the fair value of the derivative at each balance sheet [Line Items]    
Common stock price (in Dollars per share) $ 0.6 $ 0.9585
Expected volatility 267.55% 275.94%
Expected term (years) 3 years 5 months 4 days 3 years 8 months 4 days
Risk free rate 2.44% 1.07%
Expected dividend yield 0.00% 0.00%
Fair Market Value of Warrants (in Dollars) $ 1 $ 2
April 6, 2021 [Member]    
Convertible Notes (Details) - Schedule of the fair value of the derivative at each balance sheet [Line Items]    
Common stock price (in Dollars per share) $ 0.6 $ 0.9585
Expected volatility 162.97% 275.94%
Expected term (years) 1 year 7 days 1 year 3 months 7 days
Risk free rate 1.64% 1.07%
Expected dividend yield 0.00% 0.00%
Fair Market Value of Convertible component (in Dollars) $ 89 $ 164
June 7, 2021 [Member]    
Convertible Notes (Details) - Schedule of the fair value of the derivative at each balance sheet [Line Items]    
Common stock price (in Dollars per share) $ 0.6 $ 0.9585
Expected volatility 94.76%  
Expected dividend yield 0.00% 0.00%
Fair Market Value of Convertible component (in Dollars) $ 319 $ 331
June 7, 2021 [Member] | Minimum [Member]    
Convertible Notes (Details) - Schedule of the fair value of the derivative at each balance sheet [Line Items]    
Expected volatility   86.80%
Expected term (years) 2 months 8 days 5 months 4 days
Risk free rate 0.39% 0.16%
June 7, 2021 [Member] | Maximum [Member]    
Convertible Notes (Details) - Schedule of the fair value of the derivative at each balance sheet [Line Items]    
Expected volatility   87.57%
Expected term (years) 3 months 7 days 6 months 3 days
Risk free rate 0.55% 0.19%
December 14, 2021 [Member]    
Convertible Notes (Details) - Schedule of the fair value of the derivative at each balance sheet [Line Items]    
Common stock price (in Dollars per share) $ 0.6 $ 0.9585
Expected volatility 82.33% 205.20%
Expected term (years) 8 months 15 days 11 months 12 days
Risk free rate 1.30% 0.37%
Expected dividend yield 0.00% 0.00%
Fair Market Value of Convertible component (in Dollars) $ 204 $ 522
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$ in Thousands
3 Months Ended 12 Months Ended
Mar. 31, 2022
Dec. 31, 2021
Warrants [Member]    
Convertible Notes (Details) - Schedule of changes in fair value of the level 3 liabilities [Line Items]    
Outstanding, beginning balance $ 24 $ 20
Fair value of issued level 3 liability   21
Settled upon debt conversion  
Changes in fair value (10) (17)
Outstanding, ending balance 14 24
Convertible Component [Member]    
Convertible Notes (Details) - Schedule of changes in fair value of the level 3 liabilities [Line Items]    
Outstanding, beginning balance 1,017 493
Fair value of issued level 3 liability   2,064
Settled upon debt conversion (4)  
Changes in fair value (402) (1,540)
Outstanding, ending balance $ 611 $ 1,017
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Stockholders’ Equity (Details) - Convertible Promissory Note [Member] - USD ($)
3 Months Ended
Mar. 01, 2022
Mar. 31, 2022
Stockholders’ Equity (Details) [Line Items]    
Principal amount $ 35 $ 10,838,000
Accrued interest $ 6 $ 3,460
Shares of common stock (in Shares) 97,458  
Fair market value $ 56  
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Related Party Transactions (Details) - Schedule of related party transactions - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Dec. 31, 2021
Schedule of related party transactions [Abstract]      
Related party payable due to management fee $ 136   $ 147
Management Fee 25 $ 25  
Consulting Fee $ 32  
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Subsequent Events (Details) - Subsequent Event [Member] - USD ($)
May 17, 2022
May 12, 2022
Subsequent Events (Details) [Line Items]    
Common stock, par value (in Dollars per share)   $ 0.0001
Variable conversion price percentage   80.00%
Discount rate   20.00%
Dividend rate percentage   15.00%
Subsequent event, description The Company will have the right, at the Company’s sole option, provided that an event of default has not occurred, to redeem all or any portion of the shares of Series A Preferred Stock, exercisable on not more than 3 Trading Days prior written notice to the holders of the Series A Preferred Stock, in full. If the Company redeems the shares of Series A Preferred Stock within 180 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 110%; if such prepayment is made between the 181st day and the 730th day after the issuance of the Series A Preferred Stock, then such redemption premium is 120%. After the 730th day following the Issuance Date, there shall be no further right of redemption.   
Series A Preferred Stock [Member]    
Subsequent Events (Details) [Line Items]    
Series of redeemable convertible preferred stock (in Dollars per share)   $ 0.0001
Authorized shares (in Shares)   1,000,000
Dividend rate percentage   6.00%
Price per share (in Dollars per share)   $ 1
Investor shares (in Shares) 148,062  
Purchase price (in Dollars) $ 128,750,000  
Ownership percentage 4.99%  
Conversion percentage 4.99%  
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saml:ConvertiblePromissoryNoteMember 2022-02-25 2022-03-01 0001530163 us-gaap:SeriesAPreferredStockMember us-gaap:SubsequentEventMember 2022-05-12 0001530163 us-gaap:SubsequentEventMember 2022-05-12 0001530163 us-gaap:SubsequentEventMember 2022-05-12 2022-05-12 0001530163 us-gaap:SeriesAPreferredStockMember us-gaap:SubsequentEventMember 2022-05-12 2022-05-12 0001530163 us-gaap:SeriesAPreferredStockMember us-gaap:SubsequentEventMember 2022-05-17 2022-05-17 0001530163 us-gaap:SubsequentEventMember 2022-05-17 2022-05-17 shares iso4217:USD iso4217:USD shares pure 10-Q true 2022-03-31 2022 false 000-54649 SAMSARA LUGGAGE, INC. NV 26-0299456 135 E. 57th Street, Suite 18-130 NY New York 10022 (855) -256-7477 Yes Yes Non-accelerated Filer true false false 2152945 349000 827000 188000 94000 61000 53000 598000 974000 3000 3000 601000 977000 55000 74000 54000 131000 136000 147000 26000 26000 460000 256000 611000 1017000 14000 24000 1356000 1675000 1356000 1675000 0.0001 0.0001 7500000000 7500000000 2152945 2152945 2055487 2055487 9908000 9852000 -180000 -356000 -10483000 -10194000 -755000 -698000 601000 977000 31000 75000 20000 37000 11000 38000 40000 246000 61000 168000 265000 454000 326000 -443000 -288000 208000 72000 362000 -275000 154000 -347000 -289000 -635000 -0.14 -0.76 2089056 841003 2055487 9852000 -356000 -10194000 -698000 97458 56000 56000 176000 176000 -289000 -289000 2152945 9908000 -180000 -10483000 -755000 786700 6463000 -999000 -6376000 -912000 62464 308000 308000 159000 159000 -635000 -635000 849164 6771000 -840000 -7011000 -1080000 -289000 -635000 176000 159000 -208000 -74000 364000 -275000 94000 -18000 8000 -19000 25000 -77000 11000 -38000 -478000 -46000 -478000 -46000 827000 54000 349000 8000 56000 288000 20000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="width: 24px; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A.</span></td> <td><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company was incorporated on May 7, 2007 under the name, “Darkstar Ventures, Inc.” under the laws of the State of Nevada. The Company is a global smart luggage and smart travel brand. Samsara Luggage unveiled its Next Generation smart carry-on at the 2020 Consumer Electronics Show (CES). The Next Generation is the first to market a Wi-Fi Hotspot technology for travelers to access a secured network globally. Samsara Luggage also launched Essentials by Samsara, a safety kit providing commuters with a new layer of safety with protective items like facemasks, hand sanitizer, disposable gloves and alcohol wipes. These kits are sold individually and gifted to customers with purchase of the Carry-on Aluminum suitcase or Smart Weekender bag.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">During the last quarter of 2020, Samsara launched Sarah &amp; Sam Fashion and Lifestyle Collection. Sarah&amp; Sam is a part of Samsara Direct business model prompted by the travel limitations due to the coronavirus pandemic, leveraging the company’s established digital assets and manufacturing and fulfillment supply chain capabilities to offer additional consumer products that respond to the changing needs of the market.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On November 12, 2019, the Company completed its merger with the Delaware corporation that was previously known as “Samsara Luggage, Inc.” (“Samsara Delaware”) in accordance with the terms of the Merger Agreement and Plan of Merger, dated as of May 10, 2019, (the “Merger Agreement”) by and among the Company, Samsara Delaware, and Avraham Bengio, pursuant to which Samsara Delaware merged with and into the Company, with the Company being the surviving corporation (the “Merger”). Following the completion of the Merger, the business of the Company going forward became the business of Samsara Delaware prior to the Merger, namely, designing, manufacturing, and selling high quality luggage products to meet the evolving needs of frequent travelers and also seeking to present new technologies within the aluminum luggage industry, including an aluminum “smart” suitcase.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Common Stock listed on the OTC Pink Marketplace, previously trading through the close of business on November 11, 2019 under the ticker symbol “DAVC,” commenced trading on the OTC Pink Marketplace under the ticker symbol “SAML” on November 12, 2019. The Common Stock has a new CUSIP number, 79589J101.</span></p></td></tr> </table><p style="margin: 0"> </p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top; text-align: justify"> <td style="width: 24px"/><td style="width: 24px; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">B.</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Going Concern</span></td> </tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As of March 31, 2022, the Company had approximately $349 in cash and cash equivalents, approximately $758 in deficit of working capital, a stockholders’ deficiency of approximately $755 and an accumulated deficit of approximately $10,483. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Company’s ability to continue as a going concern is dependent upon raising capital from financing transactions and revenue from operations. Management anticipates their business will require substantial additional investments that have not yet been secured. Management is continuing in the process of fund raising in the private equity and capital markets as the Company will need to finance future activities. These financial statements do not include any adjustments that may be necessary should the Company be unable to continue as a going concern.</span></p> 349000 758000 755000 10483000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><b><span style="text-decoration:underline">Unaudited Interim Financial Statements</span></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The accompanying unaudited financial statements include the accounts of the Company, prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and with the instructions to Form 10-Q and Article 10 of U.S. Securities and Exchange Commission Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the financial statements presented herein have not been audited by an independent registered public accounting firm but include all material adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the financial condition, results of operations and cash flows for the for three-months ended March 31, 2022. However, these results are not necessarily indicative of results for any other interim period or for the year ended December 31, 2022. The preparation of financial statements in conformity with GAAP requires the Company to make certain estimates and assumptions for the reporting periods covered by the financial statements. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses. Actual amounts could differ from these estimates.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Certain information and footnote disclosures normally included in financial statements in accordance with generally accepted accounting principles have been omitted pursuant to the rules of the U.S. Securities and Exchange Commission (“SEC”). The accompanying unaudited condensed financial statements should be read in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on April 11, 2022 (the “Annual Report”). For further information, reference is made to the financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span style="text-decoration:underline">Use of Estimates</span></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“‘US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. As applicable to the financial statements, the most significant estimates and assumptions relate to the measurement of the convertible notes and Going Concern.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span style="text-decoration:underline">Derivative Liabilities and Fair Value of Financial Instruments</span></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments and measurement of their fair value for accounting purposes. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt under ASC 470, the Company will continue its evaluation process of these instruments as derivative financial instruments under ASC 815.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">  </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fair value of certain of the Company’s financial instruments including cash, accounts receivable, account payable, accrued expenses, notes payables, and other accrued liabilities approximate cost because of their short maturities. The Company measures and reports fair value in accordance with ASC 820, “Fair Value Measurements and Disclosure” defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value investments.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fair value, as defined in ASC 820, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of an asset should reflect its highest and best use by market participants, principal (or most advantageous) markets, and an in-use or an in-exchange valuation premise. The fair value of a liability should reflect the risk of nonperformance, which includes, among other things, the Company’s credit risk.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Valuation techniques are generally classified into three categories: the market approach; the income approach; and the cost approach. The selection and application of one or more of the techniques may require significant judgment and are primarily dependent upon the characteristics of the asset or liability, and the quality and availability of inputs. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 also provides fair value hierarchy for inputs and resulting measurement as follows:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities; and</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level 3: Unobservable inputs for the asset or liability that are supported by little or no market activity, and that are significant to the fair values.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fair value measurements are required to be disclosed by the Level within the fair value hierarchy in which the fair value measurements in their entirety fall. Fair value measurements using significant unobservable inputs (in Level 3 measurements) are subject to expanded disclosure requirements including a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings, and a description of where those gains or losses included in earning are reported in the statement of income.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company records a debt discount related to the issuance of convertible debts that have conversion features at adjustable rates. The debt discount for the convertible instruments is recognized and measured by allocating a portion of the proceeds as an increase in additional paid-in capital and as a reduction to the carrying amount of the convertible instrument equal to the fair value of the conversion features. The debt discount will be accreted by recording additional non-cash gains and losses related to the change in fair values of derivative liabilities over the life of the convertible notes.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company’s financial assets and liabilities that are measured at fair value on a recurring basis by level within the fair value hierarchy are as follows:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="padding-left: 0.125in; text-indent: -0.125in"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="14" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Balance as of March 31, 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 0.125in; text-indent: -0.125in"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Level 1</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Level 2</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Level 3</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Total</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 0.125in; text-indent: -0.125in"> </td><td style="font-weight: bold"> </td> <td colspan="14" style="font-weight: bold; text-align: center">(U.S. dollars in thousands)</td><td style="font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 0.125in; text-indent: -0.125in">Liabilities:</td><td> </td> <td colspan="2" style="text-align: center"> </td><td> </td><td> </td> <td colspan="2" style="text-align: center"> </td><td> </td><td> </td> <td colspan="2" style="text-align: center"> </td><td> </td><td> </td> <td colspan="2" style="text-align: center"> </td><td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.25in; text-indent: -0.125in; width: 52%; text-align: left">Fair Value of convertible component in convertible loan, net of discounts and debt issue costs</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right"><div style="-sec-ix-hidden: hidden-fact-36">       -</div></td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right"><div style="-sec-ix-hidden: hidden-fact-37">       -</div></td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">611</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">611</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="padding-left: 0.375in; text-indent: -0.125in; text-align: left; padding-bottom: 1.5pt">Fair value of warrants issued in convertible loan</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-38">-</div></td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-39">-</div></td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">14</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">14</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.5in; text-indent: -0.125in; text-align: left; padding-bottom: 4pt">Total liabilities</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-40">-</div></td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-41">-</div></td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">625</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">625</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="14" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Balance as of December 31, 2021</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Level 1</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Level 2</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Level 3</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Total</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold"> </td> <td colspan="14" style="font-weight: bold; text-align: center">(U.S. dollars in thousands)</td><td style="font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td>Liabilities:</td><td> </td> <td colspan="2" style="text-align: center"> </td><td> </td><td> </td> <td colspan="2" style="text-align: center"> </td><td> </td><td> </td> <td colspan="2" style="text-align: center"> </td><td> </td><td> </td> <td colspan="2" style="text-align: center"> </td><td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left; text-indent: -0.125in; padding-left: 0.25in">Fair Value of convertible component in convertible loan, net of discounts and debt issue costs</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right"><div style="-sec-ix-hidden: hidden-fact-42">         -</div></td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right"><div style="-sec-ix-hidden: hidden-fact-43">        -</div></td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">1,017</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">1,017</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -0.125in; padding-left: 0.375in">Fair value of warrants issued in convertible loan</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-44">-</div></td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-45">-</div></td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">24</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">24</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt; text-indent: -0.125in; padding-left: 0.5in">Total liabilities</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-46">-</div></td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-47">-</div></td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">1,041</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">1,041</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><span style="text-decoration:underline">Reclassification</span></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b> </b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Certain comparative figures have been reclassified to conform to current period presentation.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span style="text-decoration:underline">Recent accounting pronouncements</span></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">From time to time, new accounting pronouncements are issued by the Financial Accounting Standard Board (“FASB”) or other standard setting bodies that the Company adopts as of the specified effective date. Unless otherwise discussed, the Company does not believe that the impact of recently issued standards that are not yet effective will have a material impact on the Company’s financial position or results of operations upon adoption. </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><b><span style="text-decoration:underline">Unaudited Interim Financial Statements</span></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The accompanying unaudited financial statements include the accounts of the Company, prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and with the instructions to Form 10-Q and Article 10 of U.S. Securities and Exchange Commission Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the financial statements presented herein have not been audited by an independent registered public accounting firm but include all material adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the financial condition, results of operations and cash flows for the for three-months ended March 31, 2022. However, these results are not necessarily indicative of results for any other interim period or for the year ended December 31, 2022. The preparation of financial statements in conformity with GAAP requires the Company to make certain estimates and assumptions for the reporting periods covered by the financial statements. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses. Actual amounts could differ from these estimates.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Certain information and footnote disclosures normally included in financial statements in accordance with generally accepted accounting principles have been omitted pursuant to the rules of the U.S. Securities and Exchange Commission (“SEC”). The accompanying unaudited condensed financial statements should be read in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on April 11, 2022 (the “Annual Report”). For further information, reference is made to the financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span style="text-decoration:underline">Use of Estimates</span></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“‘US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. As applicable to the financial statements, the most significant estimates and assumptions relate to the measurement of the convertible notes and Going Concern.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span style="text-decoration:underline">Derivative Liabilities and Fair Value of Financial Instruments</span></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments and measurement of their fair value for accounting purposes. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt under ASC 470, the Company will continue its evaluation process of these instruments as derivative financial instruments under ASC 815.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Once determined, derivative liabilities are adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">  </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fair value of certain of the Company’s financial instruments including cash, accounts receivable, account payable, accrued expenses, notes payables, and other accrued liabilities approximate cost because of their short maturities. The Company measures and reports fair value in accordance with ASC 820, “Fair Value Measurements and Disclosure” defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value investments.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fair value, as defined in ASC 820, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of an asset should reflect its highest and best use by market participants, principal (or most advantageous) markets, and an in-use or an in-exchange valuation premise. The fair value of a liability should reflect the risk of nonperformance, which includes, among other things, the Company’s credit risk.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Valuation techniques are generally classified into three categories: the market approach; the income approach; and the cost approach. The selection and application of one or more of the techniques may require significant judgment and are primarily dependent upon the characteristics of the asset or liability, and the quality and availability of inputs. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 also provides fair value hierarchy for inputs and resulting measurement as follows:</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities; and</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level 3: Unobservable inputs for the asset or liability that are supported by little or no market activity, and that are significant to the fair values.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fair value measurements are required to be disclosed by the Level within the fair value hierarchy in which the fair value measurements in their entirety fall. Fair value measurements using significant unobservable inputs (in Level 3 measurements) are subject to expanded disclosure requirements including a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings, and a description of where those gains or losses included in earning are reported in the statement of income.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company records a debt discount related to the issuance of convertible debts that have conversion features at adjustable rates. The debt discount for the convertible instruments is recognized and measured by allocating a portion of the proceeds as an increase in additional paid-in capital and as a reduction to the carrying amount of the convertible instrument equal to the fair value of the conversion features. The debt discount will be accreted by recording additional non-cash gains and losses related to the change in fair values of derivative liabilities over the life of the convertible notes.</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company’s financial assets and liabilities that are measured at fair value on a recurring basis by level within the fair value hierarchy are as follows:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="padding-left: 0.125in; text-indent: -0.125in"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="14" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Balance as of March 31, 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 0.125in; text-indent: -0.125in"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Level 1</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Level 2</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Level 3</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Total</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 0.125in; text-indent: -0.125in"> </td><td style="font-weight: bold"> </td> <td colspan="14" style="font-weight: bold; text-align: center">(U.S. dollars in thousands)</td><td style="font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 0.125in; text-indent: -0.125in">Liabilities:</td><td> </td> <td colspan="2" style="text-align: center"> </td><td> </td><td> </td> <td colspan="2" style="text-align: center"> </td><td> </td><td> </td> <td colspan="2" style="text-align: center"> </td><td> </td><td> </td> <td colspan="2" style="text-align: center"> </td><td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.25in; text-indent: -0.125in; width: 52%; text-align: left">Fair Value of convertible component in convertible loan, net of discounts and debt issue costs</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right"><div style="-sec-ix-hidden: hidden-fact-36">       -</div></td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right"><div style="-sec-ix-hidden: hidden-fact-37">       -</div></td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">611</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">611</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="padding-left: 0.375in; text-indent: -0.125in; text-align: left; padding-bottom: 1.5pt">Fair value of warrants issued in convertible loan</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-38">-</div></td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-39">-</div></td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">14</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">14</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.5in; text-indent: -0.125in; text-align: left; padding-bottom: 4pt">Total liabilities</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-40">-</div></td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-41">-</div></td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">625</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">625</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="14" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Balance as of December 31, 2021</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Level 1</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Level 2</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Level 3</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Total</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold"> </td> <td colspan="14" style="font-weight: bold; text-align: center">(U.S. dollars in thousands)</td><td style="font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td>Liabilities:</td><td> </td> <td colspan="2" style="text-align: center"> </td><td> </td><td> </td> <td colspan="2" style="text-align: center"> </td><td> </td><td> </td> <td colspan="2" style="text-align: center"> </td><td> </td><td> </td> <td colspan="2" style="text-align: center"> </td><td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left; text-indent: -0.125in; padding-left: 0.25in">Fair Value of convertible component in convertible loan, net of discounts and debt issue costs</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right"><div style="-sec-ix-hidden: hidden-fact-42">         -</div></td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right"><div style="-sec-ix-hidden: hidden-fact-43">        -</div></td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">1,017</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">1,017</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -0.125in; padding-left: 0.375in">Fair value of warrants issued in convertible loan</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-44">-</div></td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-45">-</div></td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">24</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">24</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt; text-indent: -0.125in; padding-left: 0.5in">Total liabilities</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-46">-</div></td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-47">-</div></td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">1,041</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">1,041</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="padding-left: 0.125in; text-indent: -0.125in"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="14" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Balance as of March 31, 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 0.125in; text-indent: -0.125in"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Level 1</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Level 2</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Level 3</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Total</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 0.125in; text-indent: -0.125in"> </td><td style="font-weight: bold"> </td> <td colspan="14" style="font-weight: bold; text-align: center">(U.S. dollars in thousands)</td><td style="font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 0.125in; text-indent: -0.125in">Liabilities:</td><td> </td> <td colspan="2" style="text-align: center"> </td><td> </td><td> </td> <td colspan="2" style="text-align: center"> </td><td> </td><td> </td> <td colspan="2" style="text-align: center"> </td><td> </td><td> </td> <td colspan="2" style="text-align: center"> </td><td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.25in; text-indent: -0.125in; width: 52%; text-align: left">Fair Value of convertible component in convertible loan, net of discounts and debt issue costs</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right"><div style="-sec-ix-hidden: hidden-fact-36">       -</div></td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right"><div style="-sec-ix-hidden: hidden-fact-37">       -</div></td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">611</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">611</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="padding-left: 0.375in; text-indent: -0.125in; text-align: left; padding-bottom: 1.5pt">Fair value of warrants issued in convertible loan</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-38">-</div></td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-39">-</div></td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">14</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">14</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.5in; text-indent: -0.125in; text-align: left; padding-bottom: 4pt">Total liabilities</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-40">-</div></td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-41">-</div></td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">625</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">625</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="14" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Balance as of December 31, 2021</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Level 1</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Level 2</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Level 3</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Total</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold"> </td> <td colspan="14" style="font-weight: bold; text-align: center">(U.S. dollars in thousands)</td><td style="font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td>Liabilities:</td><td> </td> <td colspan="2" style="text-align: center"> </td><td> </td><td> </td> <td colspan="2" style="text-align: center"> </td><td> </td><td> </td> <td colspan="2" style="text-align: center"> </td><td> </td><td> </td> <td colspan="2" style="text-align: center"> </td><td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left; text-indent: -0.125in; padding-left: 0.25in">Fair Value of convertible component in convertible loan, net of discounts and debt issue costs</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right"><div style="-sec-ix-hidden: hidden-fact-42">         -</div></td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right"><div style="-sec-ix-hidden: hidden-fact-43">        -</div></td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">1,017</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">1,017</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -0.125in; padding-left: 0.375in">Fair value of warrants issued in convertible loan</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-44">-</div></td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-45">-</div></td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">24</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">24</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt; text-indent: -0.125in; padding-left: 0.5in">Total liabilities</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-46">-</div></td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right"><div style="-sec-ix-hidden: hidden-fact-47">-</div></td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">1,041</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">1,041</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> 611000 611000 14000 14000 625000 625000 1017000 1017000 24000 24000 1041000 1041000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><span style="text-decoration:underline">Reclassification</span></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b> </b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Certain comparative figures have been reclassified to conform to current period presentation.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><span style="text-decoration:underline">Recent accounting pronouncements</span></b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">From time to time, new accounting pronouncements are issued by the Financial Accounting Standard Board (“FASB”) or other standard setting bodies that the Company adopts as of the specified effective date. Unless otherwise discussed, the Company does not believe that the impact of recently issued standards that are not yet effective will have a material impact on the Company’s financial position or results of operations upon adoption. </span></p> <p style="font: 11pt Times New Roman, Times, Serif; margin: 0"><span style="font-size: 4pt"> </span><span style="font-size: 10pt"><b>NOTE 3 – CONVERTIBLE NOTES</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top"> <td style="width: 24px"/><td style="width: 24px">A.</td><td style="text-align: justify">On June 5, 2019, the Company entered into a Securities Purchase Agreement (“SPA”) with YAII PN, Ltd. (the “Investor”), pursuant to which the Investor agreed to provide the Company with a convertible loan in the aggregate amount of $1,100,000 in three tranches, and the Company agreed to issue convertible debentures and a warrant to the Investor.</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">The first tranche of the convertible debentures in the amount of $200,000 was provided upon execution of the SPA. The second tranche in the amount of $300,000 was provided on October 23, 2019 upon the Company filing of a Registration Statement on Form S-4 in connection with the Merger with Samsara Delaware. The third tranche in the amount of $600,000 was provided on November 18, 2019 upon consummation of the Merger with Samsara Delaware and the fulfillment of all conditions required for the Merger. The Company incurred issuance cost of $100,000 with connection to those convertible debentures.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">In the period from loan inception through December 31, 2021, the full amount of outstanding principal and accrued interest was converted into shares of common stock.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">In addition, the Company issued to the Investor a warrant to purchase 13,095 shares of common stock, at an exercise price equal to $21.00. The warrants may be exercised within 5 years from the issuance date by cash payment or through cashless exercise by the surrender of warrants shares having a value equal to the exercise price of the portion of the warrant being exercised.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">The Company considered the provisions of ASC 815-40, “Derivatives and Hedging: Contracts in Entity’s Own Equity”, with respect to the detachable warrants that were issued to the convertible loan, and determined that as a result of the “cashless exercise” and variable exercise price that would adjust the number of warrants and the exercise price of the warrants based on the price at which the Company subsequently issues shares or other equity-linked financial instruments, such warrants cannot be considered as indexed to the Company’s own stock. Accordingly, the warrants were recognized as derivative liability at their fair value on initial recognition. In subsequent periods, the warrants were marked to market with the changes in fair value recognized as financing expense or income in the consolidated statement of operations.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">The warrants were estimated by third party appraiser using the Black-Scholes option-pricing model to compute the fair value of the derivative and to mark to market the fair value of the derivative at each balance sheet date.  The following are the data and assumptions used as of the balance sheet dates:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="font-size: 11pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">March 31,<br/> 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%">Common stock price</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">0.6</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Expected volatility</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">270.18</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected term</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.18 years </span></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Risk free rate</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2.31</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected dividend yield</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">0</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; "> <td>Fair Market Value of Warrants</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">6</td><td style="text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="font-size: 11pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31,<br/> 2021</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%">Common stock price</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">0.9585</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Expected volatility</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">275.94</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected term</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.43 years </span></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Risk free rate</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">0.83</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected dividend yield</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">0</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; "> <td>Fair Market Value of Warrants</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">10</td><td style="text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top"> <td style="width: 24px"/><td style="width: 24px">B.</td><td style="text-align: justify">On September 3, 2020, Samsara Luggage, Inc. (the “Company”) entered into a second Securities Purchase Agreement (“SPA”) with the Investor, pursuant to which the Investor will invest an aggregate amount of $220 in two tranches, and the Company will issue convertible debentures and warrants to the Investor. The first tranche of the convertible debentures in the amount of $150 was provided upon execution of the SPA. The second tranche in the amount of $70 was provided on October 7, 2020. Each tranche of the loan bears interest at an annual rate of ten percent (10%). Each tranche of the investment bears interest at an annual rate of ten percent (10%) and will be repayable after two years. Each tranche of the investment will be convertible at any time into shares of the Company’s Common Stock at a conversion price equal to the lower of (a) $0.003 per share, or (b) 80% of the lowest the daily dollar volume-weighted average price for the Company’s Common Stock during the 10 trading days immediately preceding the conversion date.</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">In the period from loan inception through December 31, 2021, the full amount of outstanding principal and accrued interest was converted into shares of common stock.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">In addition, the Company issued to the Investor a warrant to purchase 2,619 shares of common stock, at an exercise price equal to $21.00. The warrants may be exercised within 5 years from the issuance date by cash payment or through cashless exercise by the surrender of warrants shares having a value equal to the exercise price of the portion of the warrant being exercised.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">The Company considered the provisions of ASC 815-40, “Derivatives and Hedging: Contracts in Entity’s Own Equity”, with respect to the detachable warrants that were issued to the Convertible loan, and determined that as a result of the “cashless exercise” and variable exercise price that would adjust the number of warrants and the exercise price of the warrants based on the price at which the Company subsequently issues shares or other equity-linked financial instruments, such warrants cannot be considered as indexed to the Company’s own stock. Accordingly, the warrants were recognized as derivative liability at their fair value on initial recognition. In subsequent periods, the warrants were marked to market with the changes in fair value recognized as financing expense or income in the consolidated statement of operations.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">The warrants were estimated by third party appraiser using the Black-Scholes option-pricing model to compute the fair value of the derivative and to mark to market the fair value of the derivative at each balance sheet dates:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following are the data and assumptions used as of the balance sheet dates:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="font-size: 11pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">March 31,<br/> 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%">Common stock price</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">0.6</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Expected volatility</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">267.55</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected term (years)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">3.43</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Risk free rate</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2.44</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected dividend yield</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">0</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; "> <td>Fair Market Value of Warrants</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">1</td><td style="text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif"> <tr style="vertical-align: bottom"> <td> </td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">December 31,<br/> 2021</td><td style="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; font: 10pt Times New Roman, Times, Serif">Common stock price</td><td style="width: 1%; font: 10pt Times New Roman, Times, Serif"> </td> <td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">0.9585</td><td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Expected volatility</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">275.94</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Expected term (years)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">3.68</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Risk free rate</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">1.07</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Expected dividend yield</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">0</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">%</td></tr> <tr style="vertical-align: bottom; "> <td style="font: 10pt Times New Roman, Times, Serif">Fair Market Value of Warrants</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">2</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top"> <td style="width: 24px"/><td style="width: 24px"><p style="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">C.</p></td><td style="text-align: justify">On April 6, 2021, the Company entered into a third Securities Purchase Agreement (“SPA”) with YAII PN, Ltd. (the “Investor”), pursuant to which the Investor agreed to provide the Company with a convertible loan in the aggregate amount of $150 and the Company agreed to issue convertible debentures and a warrant to the Investor. The loan will bear interest at an annual rate of ten percent (10%) and will be repayable after two years. The investment will be convertible at any time into shares of the Company’s Common Stock at a conversion price equal to the lower of (a) $3.46, or (b) 80% of the lowest the daily dollar volume-weighted average price for the Company’s Common Stock during the 10 trading days immediately preceding the conversion date.</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-size: 5pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">In accordance with ASC 815-15-25 the conversion feature was considered embedded derivative instrument and is to be recorded at its fair value as its fair value can be separated from the convertible loan and its conversion is independent of the underlying note value. The Company recorded finance expenses in respect of the convertible component in the convertible loan in the excess amount of the convertible component fair value over the face loan amount. The conversion feature derivative liability is then marked to market each reporting period with the resulting gains or losses shown in the statements of operations.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><span style="font-size: 5pt"> </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">The fair value of the convertible component was estimated by third party appraiser using the Monte Carlo Simulation Model to compute the fair value of the derivative and to mark to market the fair value of the derivative at each of the issuance and balance sheet dates.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top; text-align: justify"> <td style="width: 24px"/><td style="width: 24px; text-align: left"/><td style="text-align: justify">The following are the data and assumptions used as of the balance sheet dates:</td> </tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><span style="font-size: 5pt"> </span></p><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="font-size: 11pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">March 31 ,<br/> 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%">Common stock price</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">0.6</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Expected volatility</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">162.97</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected term</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1.02</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Risk free rate</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1.64</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected dividend yield</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">0</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Fair Market Value of Convertible component</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">89</td><td style="text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-size: 5pt"> </span></p><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="font-size: 11pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31 ,<br/> 2021</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%">Common stock price</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">0.9585</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Expected volatility</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">275.94</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected term</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1.27</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Risk free rate</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1.07</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected dividend yield</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">0</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Fair Market Value of Convertible component</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">164</td><td style="text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-size: 5pt"> </span></p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top; text-align: justify"> <td style="width: 24px"/><td style="width: 24px; text-align: left"/><td style="text-align: justify">As part of the transaction, the Company issued to the Investor warrants to purchase an aggregate of 10,838 shares of Common Stock, at an exercise price equal to $3.46. The term of each warrant is five years from the issue date. Each warrant may be exercised by cash payment or through cashless exercise by the surrender of warrant shares having a value equal to the exercise price of the portion of the warrant being exercised.</td> </tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-size: 5pt"> </span></p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 24px"> </td> <td style="width: 24px"> </td> <td style="font-size: 10pt; text-align: justify"><span style="font-size: 10pt">The warrants were estimated by third party appraiser using the Black-Scholes option-pricing model to compute the fair value of the derivative and to mark to market the fair value of the derivative at each of the issuance and balance sheet dates.</span></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top; text-align: justify"> <td style="width: 24px"/><td style="width: 24px; text-align: left"/><td style="text-align: justify">The following are the data and assumptions used as of the balance sheet dates:</td> </tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-size: 5pt"> </span></p><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="font-size: 11pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">March 31 ,<br/> 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%">Common stock price</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">0.6</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Expected volatility</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">267.6</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected term</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">4.02</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Risk free rate</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2.43</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected dividend yield</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">0</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; "> <td>Fair Market Value of Warrants</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">6</td><td style="text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-size: 5pt"> </span></p><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="font-size: 11pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31 ,<br/> 2021</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%">Common stock price</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">0.9585</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Expected volatility</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">275.94</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected term</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">4.27</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Risk free rate</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1.07</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected dividend yield</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">0</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; "> <td>Fair Market Value of Warrants</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">12</td><td style="text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top"> <td style="width: 24px"/><td style="width: 24px"><p style="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">D.</p></td><td style="text-align: justify">On June 7, 2021, Samsara Luggage, Inc. (the “Company”) entered into a fourth Securities Purchase Agreement (“SPA”) with the Investor, pursuant to which the Investor will invest an aggregate amount of $1,250 in three tranches, and the Company will issue convertible debentures and warrants to the Investor, in which each tranche is convertible into shares of the Company’s common stock, par value $0.0001 (the “Common Stock”). The first tranche in the principal amount of $500 was issued on June 7, 2021. The second tranche in the principal amount of $500 was issued on July 6, 2021 following the filing of a registration statement on Form S-1 (the “Registration Statement”) under the Securities Act of 1933, as amended, registering the Conversion Shares issuable upon conversion of the Convertible Debentures with the Securities and Exchange Commission (the “SEC”). The third tranche in the principal amount of $250 was  issued on September 7, 2021 following the Registration Statement being declared effective by the SEC.</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">On September 20, 2021, and pursuant to the SPA, YAII exercised its option to convert the Convertible Promissory Note principal in the amount of $100 into 47,887 shares of Common Stock of the Company. The fair market value of the shares was $130.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">On October 14, 2021, and pursuant to the SPA, YAII exercised its option to convert the Convertible Promissory Note principal in the amount of $150 and accrued interest of $1 into 109,018 shares of Common Stock of the Company. The fair market value of the shares was $211.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">As of December 31, 2021 the third tranche from September 7, 2021 was fully converted into shares of Common Stock.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">On November 3, 2021, and pursuant to the SPA, YAII exercised its option to convert the Convertible Promissory Note principal in the amount of $100 and accrued interest of $16 into 92,089 shares of Common Stock of the Company. The fair market value of the shares was $161.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">On December 20, 2021, and pursuant to the SPA, YAII exercised its option to convert the Convertible Promissory Note principal in the amount of $75 and accrued interest of $5 into 98,538 shares of Common Stock of the Company. The fair market value of the shares was $123.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">On March 1, 2022, and pursuant to the SPA, YAII exercised its option to convert the Convertible Promissory Note principal in the amount of $35 and accrued interest of $6 into 97,458 shares of Common Stock of the Company. The fair market value of the shares was $56.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">The Convertible Debentures bear interest at a rate of 10% per annum (15% on default) and have a maturity date of one (1) year. The Convertible Debentures provide a conversion right, in which any portion of the principal amount of the Convertible Debentures, together with any accrued but unpaid interest, may be converted into the Company’s Common Stock at a conversion price equal to 80% of the lowest volume weighted average price of the Company’s Common Stock during the ten (10) trading days immediately preceding the date of conversion, subject to adjustment. The Convertible Debentures may not be converted into common stock to the extent such conversion would result in the Investor beneficially owning more than 9.99% of the Company’s outstanding Common Stock (the “Beneficial Ownership Limitation”); provided, however, that the Beneficial Ownership Limitation may be waived by the Investor upon not less than 65 days’ prior notice to the Company. The Convertible Debentures provide the Company with a redemption right, pursuant to which the Company, upon fifteen (15) business days’ prior notice to the Investor, may redeem, in whole or in part, outstanding principal and interest at a redemption price equal to the principal amount being redeemed plus a redemption premium equal to 5% of the outstanding principal amount being redeemed plus outstanding and accrued interest; however, the Investor shall have fifteen (15) business days after receipt of the Company’s redemption notice to elect to convert all or any portion of the Convertible Debentures, subject to the Beneficial Ownership Limitation. In connection with the Securities Purchase Agreement, the Company executed a registration rights agreement (the “Registration Rights Agreement”) pursuant to which it is required to file the Registration Statement with the SEC for the resale of the Conversion Shares. Pursuant to the Registration Rights Agreement, the Company is required to meet certain obligations with respect to, among other things, the timeliness of the filing and effectiveness of the Registration Statement. The Company is obligated to file the Registration Statement no later than 45 days after the First Closing Date and to have it declared effective by the SEC no later than 105 days after filing (the “Registration Obligations”).</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">In accordance with ASC 815-15-25 the conversion feature was considered embedded derivative instrument and is to be recorded at its fair value as its fair value can be separated from the convertible loan and its conversion is independent of the underlying note value. The Company recorded finance expenses in respect of the convertible component in the convertible loan in the excess amount of the convertible component fair value over the face loan amount. The conversion feature derivative liability is then marked to market each reporting period with the resulting gains or losses shown in the statements of operations.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top; text-align: justify"> <td style="width: 24px"/><td style="width: 24px; text-align: left"/><td style="text-align: justify">The fair value of the convertible component was estimated by third party appraiser using the Monte Carlo Simulation Model to compute the fair value of the derivative and to mark to market the fair value of the derivative at each balance sheet dates:</td> </tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">  </p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify"><td style="width: 0.25in"/><td style="width: 0.25in; text-align: left"/><td style="text-align: justify">The following are the data and assumptions used as of the balance sheet dates:</td> </tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">March 31 ,<br/> 2022</td><td style="font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%">Common stock price</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">0.6</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Expected volatility</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">94.76</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected term</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">0.19 – 0.27</span></td><td style="text-align: left"/></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Risk free rate</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">0.39 – 0.55</span></td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected dividend yield</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">0</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Fair Market Value of Convertible component</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">319</td><td style="text-align: left"> </td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap"> </td><td style="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="white-space: nowrap; border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">December 31,<br/> 2021</td><td style="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%">Common stock price </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">0.9585</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Expected volatility </td><td> </td> <td style="text-align: left"> </td><td style="white-space: nowrap; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">86.8 – 87.57 </span></td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected term </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">0.43 – 0.51</span> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Risk free rate </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">0.16 – 0.19</span></td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected dividend yield </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">0</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Fair Market Value of Convertible component </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">331</td><td style="text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top"> <td style="width: 24px"/><td style="width: 24px"><p style="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">E.</p></td><td style="text-align: justify">On December 14, 2021, Samsara Luggage, Inc. (the “Company”) entered into a fifth Securities Purchase Agreement (“SPA”) with the Investor, pursuant to which the Investor will invest an aggregate amount of $ 500, and the Company will issue convertible debentures to the Investor.</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">The Convertible Debenture bears interest at a rate of 10% per annum (15% on default) and has a maturity date of one (1) year. The Convertible Debenture provides a conversion right, in which any portion of the principal amount of the Convertible Debenture, together with any accrued but unpaid interest, may be converted into the Company’s Common Stock at a conversion price equal to 80% of the lowest volume weighted average price of the Company’s Common Stock during the ten (10) trading days immediately preceding the date of conversion, subject to adjustment. The Convertible Debenture may not be converted into common stock to the extent such conversion would result in the Investor beneficially owning more than 4.99% of the Company’s outstanding Common Stock; provided, however, that the Beneficial Ownership Limitation may be waived by the Investor upon not less than 65 days’ prior notice to the Company. The Convertible Debenture provides the Company with a redemption right, pursuant to which the Company, upon fifteen (15) business days’ prior notice to the Investor, may redeem, in whole or in part, outstanding principal and interest under the Convertible Debenture at a redemption price equal to the principal amount being redeemed plus a redemption premium equal to 5% of the outstanding principal amount being redeemed plus outstanding and accrued interest; however, the Investor shall have fifteen (15) business days after receipt of the Company’s redemption notice to elect to convert all or any portion of the Convertible Debenture, subject to the Beneficial Ownership Limitation.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify">In accordance with ASC 815-15-25 the conversion feature was considered embedded derivative instrument and is to be recorded at its fair value as its fair value can be separated from the convertible loan and its conversion is independent of the underlying note value. The Company recorded finance expenses in respect of the convertible component in the convertible loan in the excess amount of the convertible component fair value over the face loan amount. The conversion feature derivative liability is then marked to market each reporting period with the resulting gains or losses shown in the statements of operations.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The following are the data and assumptions used as of the balance sheet date:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="font-size: 11pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">March 31,<br/> 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%">Common stock price</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">0.6</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Expected volatility</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">82.33</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected term</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">0.71</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Risk free rate</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1.3</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected dividend yield</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">0</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Fair Market Value of Convertible component</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">204</td><td style="text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="font-size: 11pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31,<br/> 2021</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%">Common stock price</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">0.9585</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Expected volatility</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">205.2</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected term</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">0.95</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Risk free rate</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">0.37</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected dividend yield</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">0</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Fair Market Value of Convertible component</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">522</td><td style="text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The following table presents the changes in fair value of the level 3 liabilities for the periods ended March 31, 2022 and December 31, 2021:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">Warrants</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">Convertible<br/> component</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">(U.S. dollars in thousands)</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 76%; text-align: justify">Outstanding at December 31, 2021</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right">24</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right">1,017</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Settled upon debt conversion</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><div style="-sec-ix-hidden: hidden-fact-48">-</div></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">(4</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1.5pt">Changes in fair value</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(10</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(402</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 4pt">Outstanding at March 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">14</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">611</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Warrants</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Convertible<br/> component</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">(U.S. dollars in thousands)</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%; text-align: justify">Outstanding at December 31, 2021</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right">20</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right">493</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">Fair value of issued level 3 liability</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">21</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2,064</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt">Changes in fair value</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(17</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,540</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-bottom: 4pt">Outstanding at December 31, 2021</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">24</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">1,017</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table> 1100000 The first tranche of the convertible debentures in the amount of $200,000 was provided upon execution of the SPA. The second tranche in the amount of $300,000 was provided on October 23, 2019 upon the Company filing of a Registration Statement on Form S-4 in connection with the Merger with Samsara Delaware. The third tranche in the amount of $600,000 was provided on November 18, 2019 upon consummation of the Merger with Samsara Delaware and the fulfillment of all conditions required for the Merger. The Company incurred issuance cost of $100,000 with connection to those convertible debentures.  13095 21 P5Y <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="font-size: 11pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">March 31,<br/> 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%">Common stock price</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">0.6</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Expected volatility</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">270.18</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected term</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.18 years </span></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Risk free rate</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2.31</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected dividend yield</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">0</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; "> <td>Fair Market Value of Warrants</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">6</td><td style="text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="font-size: 11pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31,<br/> 2021</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%">Common stock price</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">0.9585</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Expected volatility</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">275.94</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected term</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.43 years </span></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Risk free rate</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">0.83</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected dividend yield</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">0</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; "> <td>Fair Market Value of Warrants</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">10</td><td style="text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="font-size: 11pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">March 31,<br/> 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%">Common stock price</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">0.6</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Expected volatility</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">267.55</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected term (years)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">3.43</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Risk free rate</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2.44</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected dividend yield</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">0</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; "> <td>Fair Market Value of Warrants</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">1</td><td style="text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif"> <tr style="vertical-align: bottom"> <td> </td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">December 31,<br/> 2021</td><td style="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; font: 10pt Times New Roman, Times, Serif">Common stock price</td><td style="width: 1%; font: 10pt Times New Roman, Times, Serif"> </td> <td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">0.9585</td><td style="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Expected volatility</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">275.94</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Expected term (years)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">3.68</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Risk free rate</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">1.07</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">Expected dividend yield</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">0</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">%</td></tr> <tr style="vertical-align: bottom; "> <td style="font: 10pt Times New Roman, Times, Serif">Fair Market Value of Warrants</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">2</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="font-size: 11pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">March 31 ,<br/> 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%">Common stock price</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">0.6</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Expected volatility</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">162.97</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected term</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1.02</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Risk free rate</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1.64</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected dividend yield</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">0</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Fair Market Value of Convertible component</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">89</td><td style="text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-size: 5pt"> </span></p><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="font-size: 11pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31 ,<br/> 2021</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%">Common stock price</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">0.9585</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Expected volatility</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">275.94</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected term</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1.27</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Risk free rate</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1.07</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected dividend yield</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">0</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Fair Market Value of Convertible component</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">164</td><td style="text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-size: 5pt"> </span></p><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="font-size: 11pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">March 31 ,<br/> 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%">Common stock price</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">0.6</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Expected volatility</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">267.6</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected term</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">4.02</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Risk free rate</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2.43</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected dividend yield</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">0</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; "> <td>Fair Market Value of Warrants</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">6</td><td style="text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="font-size: 5pt"> </span></p><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="font-size: 11pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31 ,<br/> 2021</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%">Common stock price</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">0.9585</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Expected volatility</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">275.94</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected term</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">4.27</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Risk free rate</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1.07</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected dividend yield</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">0</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; "> <td>Fair Market Value of Warrants</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">12</td><td style="text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">March 31 ,<br/> 2022</td><td style="font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%">Common stock price</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">0.6</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Expected volatility</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">94.76</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected term</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">0.19 – 0.27</span></td><td style="text-align: left"/></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Risk free rate</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> <span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">0.39 – 0.55</span></td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected dividend yield</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">0</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Fair Market Value of Convertible component</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">319</td><td style="text-align: left"> </td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap"> </td><td style="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="white-space: nowrap; border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">December 31,<br/> 2021</td><td style="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%">Common stock price </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">0.9585</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Expected volatility </td><td> </td> <td style="text-align: left"> </td><td style="white-space: nowrap; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">86.8 – 87.57 </span></td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected term </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">0.43 – 0.51</span> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Risk free rate </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">0.16 – 0.19</span></td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected dividend yield </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">0</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Fair Market Value of Convertible component </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">331</td><td style="text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="font-size: 11pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">March 31,<br/> 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%">Common stock price</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">0.6</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Expected volatility</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">82.33</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected term</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">0.71</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Risk free rate</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1.3</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected dividend yield</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">0</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Fair Market Value of Convertible component</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">204</td><td style="text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="font-size: 11pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31,<br/> 2021</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%">Common stock price</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">0.9585</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Expected volatility</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">205.2</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected term</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">0.95</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Risk free rate</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">0.37</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected dividend yield</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">0</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Fair Market Value of Convertible component</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">522</td><td style="text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p> 0.6 2.7018 P2Y2M4D 0.0231 0 6000 0.9585 2.7594 P2Y5M4D 0.0083 0 10000 the Investor, pursuant to which the Investor will invest an aggregate amount of $220 in two tranches, and the Company will issue convertible debentures and warrants to the Investor. The first tranche of the convertible debentures in the amount of $150 was provided upon execution of the SPA. The second tranche in the amount of $70 was provided on October 7, 2020. Each tranche of the loan bears interest at an annual rate of ten percent (10%). Each tranche of the investment bears interest at an annual rate of ten percent (10%) and will be repayable after two years. Each tranche of the investment will be convertible at any time into shares of the Company’s Common Stock at a conversion price equal to the lower of (a) $0.003 per share, or (b) 80% of the lowest the daily dollar volume-weighted average price for the Company’s Common Stock during the 10 trading days immediately preceding the conversion date. 2619 21 P5Y 0.6 2.6755 P3Y5M4D 0.0244 0 1000 0.9585 2.7594 P3Y8M4D 0.0107 0 2000 150000 The loan will bear interest at an annual rate of ten percent (10%) and will be repayable after two years. 3.46 0.80 0.6 1.6297 P1Y7D 0.0164 0 89000 0.9585 2.7594 P1Y3M7D 0.0107 0 164000 10838000 3460 5 0.6 2.676 P4Y7D 0.0243 0 6000 0.9585 2.7594 P4Y3M7D 0.0107 0 12000 1250000 0.0001 The first tranche in the principal amount of $500 was issued on June 7, 2021. The second tranche in the principal amount of $500 was issued on July 6, 2021 following the filing of a registration statement on Form S-1 (the “Registration Statement”) under the Securities Act of 1933, as amended, registering the Conversion Shares issuable upon conversion of the Convertible Debentures with the Securities and Exchange Commission (the “SEC”). The third tranche in the principal amount of $250 was  issued on September 7, 2021 following the Registration Statement being declared effective by the SEC. 100000 47887 130000 150000 1000 109018 211000 100000 16000 92089 161000 75000 5000 98538 123000 35000 6000 97458 56000 0.10 0.15 P1Y 0.80 0.0999 0.05 0.6 0.9476 P0Y2M8D P0Y3M7D 0.0039 0.0055 0 319000 0.9585 0.868 0.8757 P0Y5M4D P0Y6M3D 0.0016 0.0019 0 331000 500000 0.10 0.15 P1Y 0.80 0.0499 0.05 0.6 0.8233 P0Y8M15D 0.013 0 204000 0.9585 2.052 P0Y11M12D 0.0037 0 522000 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">Warrants</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">Convertible<br/> component</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">(U.S. dollars in thousands)</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 76%; text-align: justify">Outstanding at December 31, 2021</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right">24</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right">1,017</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Settled upon debt conversion</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><div style="-sec-ix-hidden: hidden-fact-48">-</div></td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right">(4</td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 1.5pt">Changes in fair value</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(10</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(402</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify; padding-bottom: 4pt">Outstanding at March 31, 2022</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">14</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">611</td><td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Warrants</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Convertible<br/> component</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">(U.S. dollars in thousands)</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%; text-align: justify">Outstanding at December 31, 2021</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right">20</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right">493</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">Fair value of issued level 3 liability</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">21</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2,064</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt">Changes in fair value</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(17</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,540</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-bottom: 4pt">Outstanding at December 31, 2021</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">24</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">1,017</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table> 24000 1017000 -4000 -10000 -402000 14000 611000 20000 493000 21000 2064000 -17000 -1540000 24000 1017000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 4 – STOCKHOLDERS’ EQUITY</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="text-decoration:underline">Common Stock</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 1, 2022, and pursuant to the SPA, YAII exercised its option to convert the Convertible Promissory Note principal in the amount of $35 and accrued interest of $6 into 97,458 shares of Common Stock of the Company. The fair market value of the shares was $56.</p> 35 6 97458 56 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 5 – RELATED PARTY TRANSACTIONS</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="text-decoration:underline">Related party payable</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif"> <tr style="vertical-align: bottom"> <td> </td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">March 31,<br/> 2022</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">December 31,<br/> 2021</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">(U.S. dollars in thousands)</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 76%; text-align: left">Related party payable due to management fee</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right">136</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right">147</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="text-decoration:underline">General and Administrative Expenses</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif"> <tr style="vertical-align: bottom"> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td colspan="2" style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>For the period ended<br/> March 31,</b></span></td> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td colspan="2" style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>For the period ended<br/> March 31,</b></span></td> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="padding-bottom: 1.5pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2022</b></span></td> <td style="padding-bottom: 1.5pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="padding-bottom: 1.5pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2021</b></span></td> <td style="padding-bottom: 1.5pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="padding-bottom: 1.5pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>(U.S. dollars in thousands)</b></span></td> <td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 76%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Management Fee</span></td> <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="width: 9%; text-align: right"><p style="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">25</p></td> <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">25</span></td> <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><span style="text-decoration:underline">Research and development Expenses</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif"> <tr style="vertical-align: bottom"> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td colspan="2" style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>For the period ended<br/> March 31,</b></span></td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td colspan="2" style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>For the period ended<br/> March 31,</b></span></td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2022</b></span></td> <td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2021</b></span></td> <td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>(U.S. dollars in thousands)</b></span></td> <td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 76%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consulting Fee</span></td> <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">32</span></td> <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="width: 9%; text-align: right"><span style="-sec-ix-hidden: hidden-fact-49; font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td> <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td></tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif"> <tr style="vertical-align: bottom"> <td> </td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">March 31,<br/> 2022</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">December 31,<br/> 2021</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center">(U.S. dollars in thousands)</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 76%; text-align: left">Related party payable due to management fee</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right">136</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right">147</td><td style="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif"> <tr style="vertical-align: bottom"> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td colspan="2" style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>For the period ended<br/> March 31,</b></span></td> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td colspan="2" style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>For the period ended<br/> March 31,</b></span></td> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="padding-bottom: 1.5pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2022</b></span></td> <td style="padding-bottom: 1.5pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="padding-bottom: 1.5pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2021</b></span></td> <td style="padding-bottom: 1.5pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="padding-bottom: 1.5pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>(U.S. dollars in thousands)</b></span></td> <td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 76%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Management Fee</span></td> <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="width: 9%; text-align: right"><p style="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">25</p></td> <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">25</span></td> <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif"> <tr style="vertical-align: bottom"> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td colspan="2" style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>For the period ended<br/> March 31,</b></span></td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td colspan="2" style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>For the period ended<br/> March 31,</b></span></td> <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2022</b></span></td> <td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2021</b></span></td> <td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>(U.S. dollars in thousands)</b></span></td> <td style="padding-bottom: 1.5pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 76%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consulting Fee</span></td> <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">32</span></td> <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td> <td style="width: 9%; text-align: right"><span style="-sec-ix-hidden: hidden-fact-49; font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td> <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></td></tr> </table> 136000 147000 25000 25000 32000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 6 – SUBSEQUENT EVENTS</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Series A Preferred Stock</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b> </b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On May 12, 2022, the Company established a series of redeemable convertible preferred stock (the “Series A Preferred Stock”), par value $0.0001 per share, pursuant to a Certificate of Designation, Preference and Rights of Series A Preferred Stock of the Company (the “Certificate of Designation”).</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the Certificate of Designation, the Company authorized 1,000,000 shares of the Series A Preferred Stock, which may be convertible into shares of common stock, par value $0.0001 per share, of the Company (the “Common Stock”) at the option of the holders thereof at any time after the issuance of the Series A Preferred Stock, at a conversion price equal a Variable Conversion Price (the “Conversion Price”). The "Variable Conversion Price" means 80% multiplied by the Market Price (representing a discount rate of 20%). The “Market Price” means the average of the lowest two (2) Trading Prices (as defined below) for the Common Stock during the ten (10) Trading Day period ending on the latest complete trading day prior to the conversion date. The “Trading Price” means, for any security as of any date, the actual closing price on the OTCQB, OTCQX, Pink Sheets electronic quotation system or applicable trading market (the “OTC”).</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Series A Preferred Stock will, with respect to dividend rights and rights upon liquidation, winding-up or dissolution, rank: (a) senior with respect to dividends and right of liquidation with the Company’s Common Stock and (b) junior with respect to dividends and right of liquidation to all existing and future indebtedness of the Company and existing and outstanding preferred stock of the Company.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Series A Preferred Stock shall have no right to vote on any matters requiring shareholder approval or any matters on which the shareholders are permitted to vote.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Each share of Series A Preferred Stock will carry an annual dividend in the amount of six percent (6%) of the price per share of Series A Preferred Stock of $1.00 (the “Divided Rate”), which shall be cumulative, payable solely upon redemption, liquidation or conversion. Upon the occurrence of an event of default (as further defined further in the Certificate of Designation), the Dividend Rate shall automatically increase to fifteen percent (15%).</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Series A Preferred Stock Purchase Agreement</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b> </b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On May 17, 2022, the Company entered into a Series A Preferred Stock Purchase Agreement (the “SPA”) with 1800 Diagonal Lending LLC f/k/a Sixth Street Lending LLC, a Virginia limited liability company (the “Investor”) pursuant to which the Company issued and sold to the Investor 148,062 shares of Series A Preferred Stock for a purchase price of $128,750.00.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the SPA, the Investor may convert all or a portion of the outstanding Series A Preferred Stock into shares of the Company’s Common Stock beginning on the date which is 180 days after the issuance date of the Series A Preferred Stock (the “Issuance Date”) into Common Stock; provided, however, that the Investor may not convert the Series A Preferred Stock to the extent that such conversion would result in beneficial ownership by the Investor and its affiliates of more than 4.99% of the Company’s issued and outstanding Common Stock.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company will have the right, at the Company’s sole option, provided that an event of default has not occurred, to redeem all or any portion of the shares of Series A Preferred Stock, exercisable on not more than 3 Trading Days prior written notice to the holders of the Series A Preferred Stock, in full. If the Company redeems the shares of Series A Preferred Stock within 180 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 110%; if such prepayment is made between the 181st day and the 730th day after the issuance of the Series A Preferred Stock, then such redemption premium is 120%. After the 730th day following the Issuance Date, there shall be no further right of redemption.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In connection with the Certificate of Designation, the Company agreed to cause its transfer agent to reserve four times the number of shares of Common Stock that would be issuable upon full conversion of the Series A Preferred Stock (assuming that the 4.99% limitation set forth in herein is not in effect) (based on the respective Conversion Price of the Series A Preferred Stock in effect from time to time).</p> 0.0001 1000000 0.0001 0.80 0.20 0.06 1 0.15 148062 128750000 0.0499 The Company will have the right, at the Company’s sole option, provided that an event of default has not occurred, to redeem all or any portion of the shares of Series A Preferred Stock, exercisable on not more than 3 Trading Days prior written notice to the holders of the Series A Preferred Stock, in full. If the Company redeems the shares of Series A Preferred Stock within 180 days of its issuance, the Company must pay all of the principal at a cash redemption premium of 110%; if such prepayment is made between the 181st day and the 730th day after the issuance of the Series A Preferred Stock, then such redemption premium is 120%. After the 730th day following the Issuance Date, there shall be no further right of redemption.  0.0499 false --12-31 Q1 0001530163 EXCEL 34 Financial_Report.xlsx IDEA: XBRL DOCUMENT begin 644 Financial_Report.xlsx M4$L#!!0 ( B$MU0'04UB@0 +$ 0 9&]C4')O<',O87!P+GAM M;$V./0L",1!$_\IQO;=!P4)B0-!2L+(/>QLOD&1#LD)^OCG!CVX>;QA&WPIG M*N*I#BV&5(_C(I(/ !47BK9.7:=N')=HI6-Y #OGDK7A.YNJQ<&4GPZ4A!0W_J=0U[R;UEA_6\#MI7E!+ P04 M " (A+=4PX_ Q.T K @ $0 &1O8U!R;W!S+V-O&ULS9+! M2L0P$(9?17)O)TU9#Z';B^))07!!\1:2V=U@DX9DI-VW-XV[740?P&-F_GSS M#4RG@]1CQ.\4:O^/ 9AP(S&G! 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