NOTE 7: SHAREHOLDERS’ EQUITY

Reverse share split:

At the Company’s 2023 annual general meeting, the Company’s shareholders approved (i) a reverse share split within a range of 1:2 to 1:12, to be effective at the ratio and on a date to be determined by the Board of Directors, and (ii) amendments to the Company’s Articles of Association authorizing an increase in the Company’s authorized share capital (and corresponding authorized number of ordinary shares, proportionally adjusting such number for the reverse share split) so that the maximum number of authorized ordinary shares would be 120 million. In accordance with the shareholder approval, in early March 2024 the Board of Directors of the Company approved a one-for-seven reverse share split of the Company’s ordinary shares, reducing the number of the Company’s issued and outstanding ordinary shares from approximately 60.1 million pre-split shares to approximately 8.6 million post-split shares. The Company’s ordinary shares began trading on a split-adjusted basis on March 15, 2024. Additionally, effective at the same time, the total authorized number of ordinary shares of the Company was adjusted to 25 million post-split shares, the par value per share of the ordinary shares changed to NIS 1.75 and the authorized share capital of the Company changed from NIS 30,000,000 to NIS 43,750,000. All share and per share data included in these unaudited condensed consolidated financial statements give retroactive effect to the reverse share split for all periods presented.

Upon the effectiveness of the reverse share split, every seven shares were automatically combined and converted into one ordinary share. Appropriate adjustments were also made to all outstanding derivative securities of the Company, including all outstanding equity awards and warrants.

No fractional shares were issued in connection with the reverse share split. Instead, all fractional shares (including shares underlying outstanding equity awards and warrants) were rounded down to the nearest whole number.

Share option plans:

As of March 31, 2025, and December 31, 2024, no ordinary shares were reserved, as the Company’s 2014 Incentive Compensation Plan (the “2014 Plan”) was terminated on August 19, 2024, and a new plan has not yet been approved as a replacement.

Options to purchase ordinary shares generally vest over four years, with certain options to non-employee directors vesting quarterly over one year. Under the 2014 Plan, any option that was forfeited or canceled before expiration became available for future grants. However, as the 2014 Plan was terminated on August 19, 2024, no further options will be granted under this plan.

There were no options granted during the three months that ended March 31, 2025, and 2024.

The fair value of RSUs granted is determined based on the price of the Company's ordinary shares on the date of grant. A summary of employee share options activity during the three months ended March 31, 2025, is as follows:

	Number			Weighted average exercise price		Weighted average remaining contractual life (years)		Aggregate intrinsic value (in thousands)
Options outstanding as of December 31, 2024		4,573		$	187.94		3.47	$	-
Granted		-			-		-		-
Exercised		-			-		-		-
Forfeited		(22	)		500.74		-		-
Options outstanding as of March 31, 2025		4,551		$	186.43		3.24	$	-

Options exercisable as of March 31, 2025		4,551		$	186.43		3.24	$	-

The aggregate intrinsic value in the table above represents the total intrinsic value that would have been received by the option holders had all option holders that hold options with positive intrinsic value exercised their options on the last date of the exercise period. No options were exercised during the three months ended March 31, 2025 and 2024.

A summary of employees and non-employees RSUs activity during the three months ended March 31, 2025 is as follows:

	Number of shares underlying outstanding RSUs			Weighted- average grant date fair value
Unvested RSUs as of December 31, 2024		327,243		$	5.68
Granted		-			-
Vested		(3,955	)		6.08
Forfeited		(4,200	)		5.08
Unvested RSUs as of March 31, 2025		319,088		$	5.69

There were no RSUs granted during the three months ended March 31, 2025, and 2024, respectively.

As of March 31, 2025, there were $1.2 million of total unrecognized compensation costs related to non-vested share-based compensation arrangements granted under the Company's 2014 Plan. This cost is expected to be recognized over a period of approximately 1.9 years.

The number of options and RSUs outstanding as of March 31, 2025 is set forth below, with options separated by range of exercise price.

				Weighted average remaining contractual life (years) (1)		Options outstanding and exercisable as of March 31, 2025		Weighted average remaining contractual life (years) (1)

Range of exercise price		Options and RSUs outstanding as of March 31, 2025


RSUs only			319,088		-		-		-
	$37.6		1,774		3.99		1,774		3.99
	$178.5 - $236.3		1,828		3.10		1,828		3.10
	$350 - $367.5		864		2.21		864		2.21
	$1,277.5 - $3,634.8		85		0.76		85		0.76
			323,639		3.24		4,551		3.24

(1)

Calculation of weighted average remaining contractual term does not include the RSUs that were granted, which have an indefinite contractual term.

Share-based awards to non-employee consultants:

As of March 31, 2025, there are no outstanding options or RSUs held by non-employee consultants.

Share-based compensation expense for employees and non-employees:

The Company recognized non-cash share-based compensation expenses for both employees and non-employees in the unaudited condensed consolidated statements of operations as follows (in thousands):

	Three Months Ended March 31,
	2025		2024
Cost of revenues	$	4	$	4
Research and development, net		36		46
Sales and marketing		82		111
General and administrative		98		220
Total	$	220	$	381

Warrants to purchase ordinary shares:

The following table summarizes information about warrants outstanding and exercisable that were classified as equity as of March 31, 2025:

Issuance date	Warrants outstanding		Exercise price per warrant		Warrants outstanding and exercisable		Contractual term
	(number)				(number)
December 31, 2015 (1)		681	$	52.50		681	See footnote (1)
December 28, 2016 (2)		272	$	52.50		272	See footnote (1)
July 6, 2020 (3)		64,099	$	12.32		64,099	January 2, 2026
July 6, 2020 (4)		42,326	$	15.95		42,326	July 2, 2025
December 8, 2020 (5)		83,821	$	9.38		83,821	June 8, 2026
December 8, 2020 (6)		15,543	$	12.55		15,543	June 8, 2026
February 26, 2021 (7)		780,095	$	25.20		780,095	August 26, 2026
February 26, 2021 (8)		93,612	$	32.05		93,612	August 26, 2026
September 29, 2021 (9)		1,143,821	$	14.00		1,143,821	March 29, 2027
September 29, 2021 (10)		137,257	$	17.81		137,257	September 27, 2026
January 8, 2025 (11)		1,818,183	$	2.75		1,818,183	January 10, 2028
January 8, 2025 (12)		109,091	$	3.44		109,091	January 10, 2028
		4,288,801				4,288,801

(1)

Represents warrants for ordinary shares issuable upon an exercise price of $52.50 per share, which were granted on December 31, 2015 to Kreos Capital V (Expert) Fund Limited (“Kreos”) in connection with a loan made by Kreos to the Company and are currently exercisable (in whole or in part) until the earlier of (i) December 30, 2025 or (ii) immediately prior to the consummation of a merger, consolidation, or reorganization of the Company with or into, or the sale or license of all or substantially all the assets or shares of the Company to, any other entity or person, other than a wholly owned subsidiary of the Company, excluding any transaction in which the Company’s shareholders prior to the transaction will hold more than 50% of the voting and economic rights of the surviving entity after the transaction. None of these warrants had been exercised as of March 31, 2025.

(2)

Represents common warrants that were issued as part of the $8.0 million drawdown under the Loan Agreement which occurred on December 28, 2016. See footnote 1 for exercisability terms.

(3)

Represents warrants that were issued to certain institutional purchasers in a private placement in the Company’s registered direct offering of ordinary shares in July 2020. As of March 31, 2025, 288,634 warrants were exercised for a total consideration of $3,556,976. During the three months that ended March 31, 2025, no warrants were exercised.

(4)

Represents warrants that were issued to the placement agent as compensation for his role in the Company’s July 2020 registered direct offering.

(5)

Represents warrants that were issued to certain institutional purchasers in a private placement in the Company’s private placement offering of ordinary shares in December 2020. As of March 31, 2025, 514,010 warrants were exercised for a total consideration of $4,821,416. During the three months that ended March 31, 2025, no warrants were exercised.

(6)

Represents warrants that were issued to the placement agent as compensation for its role in the Company’s December 2020 private placement. As of March 31, 2025, 32,283 warrants were exercised for a total consideration of $405,003. During the three months that ended March 31, 2025, no warrants were exercised.

(7)

Represents warrants that were issued to certain institutional purchasers in a private placement in the Company’s private placement offering of ordinary shares in February 2021.

(8)

Represents warrants that were issued to the placement agent as compensation for its role in the Company’s February 2021 private placement.

(9)

Represents warrants that were issued to certain institutional purchasers in a private placement in the Company’s registered direct offering of ordinary shares in September 2021.

(10)

Represents warrants that were issued to the placement agent as compensation for its role in the Company’s September 2021 registered direct offering.

(11)

Represents warrants that were issued to certain institutional purchasers in a private placement in the Company’s registered direct offering of ordinary shares in January 2025.

(12)

Represents warrants that were issued to the placement agent as compensation for its role in the Company’s January 2025 registered direct offering.

Equity raise:

On January 7, 2025, the Company entered into a purchase agreement with certain institutional investors for the issuance and sale of 1,818,183 ordinary shares and ordinary warrants to purchase up to an aggregate of 1,818,183 ordinary shares at an exercise price of $2.75 per share. Each ordinary share was sold at an offering price of $2.75. The offering of the ordinary shares and the ordinary shares that are issuable from time to time upon exercise of the warrants was made pursuant to its shelf registration statement on Form S-3 initially filed with the SEC on March 30, 2022, and declared effective by the SEC on May 16, 2022, and the ordinary warrants were issued in a concurrent private placement. The ordinary warrants are exercisable at any time and from time to time, in whole or in part, following the date of issuance and ending three years from the date of issuance. The offering closed on January 8, 2025. Additionally, the Company issued warrants to purchase up to 109,091 ordinary shares, with an exercise price of $3.4375 per share, exercisable at any time and from time to time, in whole or in part, following the date of issuance and ending three years from the date of issuance, to certain representatives of H.C. Wainwright as compensation for its role as the placement agent in the January 2025 private placement offering.

The warrants are considered a freestanding instrument. As the warrants considered indexed to the Company's stock and are considered equity classified, they are recorded in shareholders’ equity on the unaudited condensed consolidated balance sheet and are not accounted for as derivatives.