| WARRANTS |
NOTE 13 -
WARRANTS:
| | a) | On August 24, 2016, the Company issued warrants to Comerica Bank (“Comerica”) for the purchase of 73,048 shares of the Company’s Series B Redeemable Preferred Stock at an exercise price of $1.02672 per share contemporaneously with obtaining a loan from Comerica which was fully repaid in 2018 (the “Comerica Warrants”). The Comerica Warrants are exercisable at any time during the contract period which ends on August 24, 2026. |
Additionally, in connection with the consummation
of the IPO and the change of the type of the stock from redeemable preferred stock to common stock at conversion, the Company reassessed
the Comerica Warrants. As part of the contractual terms and conditions of Comerica’s Warrants, a portion of the warrants are exercisable,
as of the IPO date, into the Company’s common stock. The Comerica Warrants are still outstanding as of December 31, 2023. The Company
has evaluated whether the Comerica Warrants are still classified as liabilities and concluded that due to a change-of-control provision
which may affect the exercise price or entitle Comerica to demand cash, instead of shares, to settle the warrants, Comerica’s Warrants
will continue to be classified as liabilities and will be exercisable into the Company’s common shares. As of December 31, 2023,
and December 31, 2022, the estimated fair value of the Comerica warrants was $8, and it was based on a Black-Scholes option-pricing model.
| |
b) |
During the period from February 2018 through
November 2020, the Company issued warrants to Mizrahi-Tefahot Bank (“Mizrahi”) contemporaneously with obtaining a loan
and a credit facility. The warrants are convertible into series B convertible redeemable preferred stock or common stock in a qualified
financing round. The number of series B convertible redeemable preferred stock is determined by the lesser of (1) dividing the warrant
amount (as determined under the contract) by the applicable exercise price which depends on the triggering event as established in the
contract, or (2) the lowest stock purchase price in a qualified financing round.
Upon the consummation of the IPO (as
further described in Note 14d below), the Company converted the outstanding warrants issued to Mizrahi into the Company’s common
stock based on the contractual terms and conditions of the related warrant agreements.
|
| |
c) |
During December 2020 and November 2021, the Company issued warrants to Migdalor contemporaneously with obtaining a loan. The warrants can either be (1) converted into the Company’s common stock (the number of which shall be determined based on the warrant amount established in the contract and the Company’s valuation as defined in the contract, or based on a triggering event), at any time during a period of 96 months), or (2) redeemed for cash based on the lesser of a predetermined amount or a formula as set in the contract, at any time and in Migdalor’s own discretion, during a period of 96 months from the date of issue. These warrants were classified as liabilities mainly due to the redemption feature over the options. |
Upon the consummation of the IPO (as further
described in Note 14d below), the Company converted the outstanding warrants issued to Migdalor into the Company’s common stock
based on the contractual terms and conditions of the related warrant agreements.
|
d) |
On May 8, 2023, the Company completed a fund-raising round.
Upon the consummation of the Offering and pursuant to an agreement entered into with the Holder and the underwriter, the Company issued
warrants to purchase shares of Common Stock. Such warrants were classified as liabilities based on the terms of the underlying agreement.
On September 30, 2023, these warrants were reclassified to equity due to an amendment to the warrants’ agreements. See note 14(d)
for further details. |
|
e) |
On December 20, 2023, the Company completed another fund-raising round. Upon the consummation of the offering
and pursuant to an agreement entered into with the Holder and the underwriter, the Company issued warrants to purchase shares of Common
Stock. These warrants were classified as equity. See note 14(d) for further details |
The table below shows the impact on the statement of comprehensive
loss related to the warrants which were classified as liabilities, that the Company issued
for the years ended December 31, 2023, and December 31 2022:
| |
|
2023 |
|
|
2022 |
|
| |
|
U.S. dollars in thousands |
|
|
U.S. dollars in thousands |
|
| Outstanding as of January 1 |
|
|
8 |
|
|
|
2,149 |
|
| Additions |
|
|
1,972 |
|
|
|
|
|
| Fair value changes |
|
|
(1,726 |
) |
|
|
1,049 |
|
| Warrants amendment |
|
|
68 |
|
|
|
- |
|
| Conversion to the Company’s common stock |
|
|
- |
|
|
|
(3,190 |
) |
| Reclassification to equity (see note (14(d)) |
|
|
(314 |
) |
|
|
|
|
| Outstanding as of December 31 |
|
|
8 |
|
|
|
8 |
|
The Company recorded “Other financial
expenses (income)” during the year ended December 31, 2023, and December 31, 2022, in the amount of $(1,726) and $1,049, respectively.
|