NOTE 7 - FORFEITURE SHARES:
| a. | On March 29, 2021 (the “Closing Date”, please refer to note 1a of the financial statements
as of December 31, 2024), 1,006,250 Ordinary Shares that PTK sponsor received in respect of its PTK common stock, are subject to forfeiture
if certain price targets for the Valens Ordinary Shares are not achieved within a certain period of time (of up to four years), after
the Closing Date or if an M&A Transaction (as defined in the Merger Agreement Closing, please refer to note 1c of the financial statements
as of December 31, 2024), does not occur at a certain minimum price. |
The Company performed
a Monte-Carlo simulation to calculate the fair value of such shares.
On September 30,
2024, 646,875 Ordinary Shares were forfeited because the specified price targets were not met.
The fair value of
the Forfeiture Shares was computed using the following key assumptions:
| | |
June 30,
2025 | | |
December 31,
2024 | |
| Stock price | |
| 2.63 | | |
| 2.60 | |
| Expected term (years) | |
| 0.25 | | |
| 0.75 | |
| Expected volatility | |
| 63.84 | % | |
| 63.84 | % |
| Risk-free interest rate | |
| 4.41 | % | |
| 4.20 | % |
| b. | The table below sets forth a summary of the changes in the fair value of the Forfeiture Shares classified
as Level 3: |
| | |
Six months ended
June 30,
2025 | | |
Year ended
December 31,
2024 | |
| | |
U.S. dollars in thousands | |
| | |
| | |
| |
| Balance at beginning of period | |
| 1 | | |
| 38 | |
| Changes in fair value | |
| - | | |
| (37 | ) |
| Balance at end of the period | |
| 1 | | |
| 1 | |
|