NOTE 5 – STOCK CAPITAL

The rights of Common Stock are as follows:

Holders of the Common Stock have the right to receive notice to participate and vote in general meetings of the Company, the right to a share in the excess of assets upon liquidation of the Company and the right to receive dividends, if declared.

The Common Stock is publicly traded on OTCQB Venture Market, a U.S. trading platform operated by OTC Markets Group. under the symbol “BCLI”. On September 30, 2024 the Company effected the Reverse Stock Split of the Company’s Common Stock at the one-for-fifteen ratio, such that every fifteen shares of Common Stock were consolidated into one share. As a result, all share amounts were adjusted retroactively for all periods presented in these financial statements.

Private placements and public offerings:

At-the-market (ATM) Offering:

On August 9, 2021, the Company entered into an Amended and Restated Distribution Agreement (the “New Distribution Agreement”) with the Agents (as defined in the New Distribution Agreement) pursuant to which the Company may sell from time to time, through the Agents, shares of Common Stock (the “Shares”), having an aggregate offering price of up to $100,000,000 (the “August 9, 2021 ATM”). Sales under the August 9, 2021 ATM are to be made by any method permitted by law that is deemed to be an “at the market” offering as defined in Rule 415 promulgated under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), including, without limitation, sales made directly on The Nasdaq Capital Market, on any other existing trading market for the Shares, through a market maker or as otherwise agreed by the Company and the Agents. In connection with the New Distribution Agreement, the Company terminated the previous Distribution Agreement and the September 25, 2020, ATM. During the six months ended June 30, 2025, the Company has sold 2,311,940 shares of Common Stock for gross proceeds of approximately $4,149 under the August 9, 2021, ATM. The issuance costs for the ATM are approximately $114 and the net proceeds are $4,035. As discussed in Note 1 above, the Company’s common stock has been delisted from the Nasdaq and now trades on the OTCQB Venture Market. Accordingly, the August 9, 2021 ATM may no longer be available for use by the Company.

Securities Purchase Agreement:

On July 17, 2023, the Company entered into a Securities Purchase Agreement with the purchaser named therein, pursuant to which the Company agreed to sell, in the Offering, an aggregate of 270,270 shares of Common Stock, together with accompanying warrants (the “Common Warrants”) to purchase 270,270 shares of Common Stock, at a purchase price of $27.75 per share and accompanying warrants for gross proceeds to the Company of approximately $7,500, before deducting fees payable to the placement agent and other estimated offering expenses payable by the Company. The Offering closed on July 19, 2023. The Common Warrants are immediately exercisable, expire five years following the date of issuance and have an exercise price of $30.00 per share. Please refer to Note 4.

On June 27, 2024, the Company entered into a Securities Purchase Agreement with the purchaser, pursuant to which the Company agreed to sell, (i) an aggregate of 527,918 registered shares of the Company’s Common Stock, (ii) registered pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 212,823 shares of Common Stock and (iii) unregistered warrants to purchase up to 1,111,111 shares of Common Stock, at a purchase price of $5.4 per share of Common Stock and accompanying Common Warrant, or $5.399 per Pre-Funded Warrant and accompanying Common Warrant. The Offering of the Securities yielded gross proceeds to the Company of approximately $4,000, before deducting fees payable to the placement agent and other estimated offering expenses payable by the Company. The issuance costs for the ATM are approximately $356 and the net proceeds are $3,644. The Offering closed on June 28, 2024. The Warrants will be exercisable six months after the issuance date, will expire five years following the date of issuance and have an exercise price of $5.868 per share. Each Pre-Funded Warrant is immediately exercisable for one share of Common Stock (the “Pre-Funded Warrant Shares”) at an exercise price of $0.00005 per share and will remain exercisable until the Pre-Funded Warrants are exercised in full.

NOTE 5 – STOCK CAPITAL (Cont.):

Inducement Agreement:

On March 31, 2025, the Company entered into an inducement offer (the “Warrant Inducement Agreement”) with a certain accredited and institutional holder (the “Holder”) to exercise existing warrants to purchase up to 1,381,383 shares of the Company’s common stock comprised of warrants to purchase 270,271 shares of the Company’s common stock issued on July 19, 2023 (the “2023 Existing Warrants”), and warrants to purchase 1,111,112 shares of the Company’s common stock issued on June 28, 2024 (the “2024 Existing Warrants”, and together with the 2024 Existing Warrants, the “Existing Warrants”). Pursuant to the Warrant Inducement Agreement, the Holder, upon exercise, will receive a new unregistered warrant to purchase shares of the Company’s common stock (the “New Warrant”) pursuant to Section 4(a)(2) of the Securities Act, to purchase up to equal to 200% of the number of Warrant Shares issued pursuant to the exercise of Existing Warrants pursuant to the Agreement (the “New Warrant Shares”), raising approximately 1.64 million and subject to stockholder approval and certain adjustments. On March 31, 2025, the Company issued 724,000 shares. The remaining balance of 657,383 shares was issued through May 6, 2025.

The New Warrants will have an exercise price of $1.19 per share, will be exercisable on or after the date that approval is obtained from the Company’s stockholders (the “Stockholder Approval Date”) and will expire on the five-year anniversary of the Stockholder Approval Date. The exercise price and the number of New Warrant Shares issuable upon exercise of each New Warrant are subject to appropriate adjustments in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the Company’s common stock.

Capital Raised Since Inception:

Since its inception and as of June 30, 2025, the Company has raised approximately $185,000 gross in cash in consideration for issuances of Common Stock and warrants in private placements and public offerings as well as proceeds from warrants exercises.

Stock Plans:

On September 16, 2024, the Company held its 2024 Annual Meeting of Stockholders (the “2024 Annual Meeting”), and the stockholders of the Company approved Amendment No. 4 to the 2014 U.S. Plan, as amended, and Amendment No. 4 to the 2014 Global Option Plan, as amended (collectively, the “Amendments to the 2014 Plans”). The Amendments to the 2014 Plans amend each of the U.S. Plan, as amended, and 2014 Global Option Plan, as amended, respectively (collectively, the “Original 2014 Plans”) to (i) increase the shared pool of shares of the Common Stock available for issuance under the Company’s Original 2014 Plans by 533,333 shares of Common Stock (on a post-Reverse Stock Split basis), resulting in a shared pool of 906,666 shares of Common Stock (on a post-Reverse Stock Split basis), and (ii) extend the term of each of the Original 2014 Plans by an additional ten years. This extension applies solely to future grants and does not affect any grants made under the original terms.

On June 25, 2025, the Company held its 2025 Annual Meeting of Stockholders. The stockholders of the Company approved amendments to the Company’s 2014 Stock Incentive Plan and the Company’s 2014 Global Share Option Plan (collectively, the “2014 Plans”) to increase the shared pool of shares available for issuance under the 2014 Plans by 2,000,000 shares from 906,666 shares to 2,906,666 shares.

The 2014 Plans now have a shared pool of 2,906,666 shares of Common Stock available for issuance. As of June 30, 2025, 1,931,433 shares were available for future issuances under the 2014 Plans. The exercise price of the options granted under the 2014 Plans may not be less than the nominal value of the shares into which such options are exercised. Any options under the 2014 Plans that are canceled or forfeited before expiration become available for future grants. The Governance, Nominating and Compensation Committee (the “GNC Committee”) of the Board of Directors of the Company (the “Board”) administers the Company’s stock incentive compensation and equity-based plans.

NOTE 5 – STOCK CAPITAL (Cont.):

Share-based compensation to employees and to directors:

Under the 2014 Plans, the Company may award stock options to certain employees, officers, directors, and/or service providers. The stock options vest in accordance with such conditions and restrictions determined by the GNC Committee.

Stock options:

The Company did not grant stock options during the six months ended June 30, 2025.

A summary of the Company’s option activity related to options to employees and directors, and related information as of June 30, 2025, is as follows:

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*    Represents Employee Stock Options only (not including RSUs).

The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the fair market value of the Company’s shares on June 30, 2025, multiplied by the number of in-the-money options on those dates) that would have been received by the option holders had all option holders exercised their options on those dates.

As of June 30, 2025, there was $93 of total unrecognized compensation cost related to non-vested options under the Plan. The cost is expected to be recognized over a weighted average period of 1.38 years. Compensation expense recorded by the Company in respect of its stock-based employees and directors compensation awards in accordance with ASC 718-10 for the six months ended June 30, 2025 and 2024 amounted to $22 and $160, respectively.

NOTE 5 – STOCK CAPITAL (Cont.):

Restricted Stock:

The Company awards stock and restricted stock to certain employees, officers, directors, and/or service providers. The restricted stock vests in accordance with such conditions and restrictions determined by the GNC Committee. These conditions and restrictions may include the achievement of certain performance goals and/or continued employment with the Company through a specified restricted period. The purchase price (if any) of shares of restricted stock is determined by the GNC Committee. If the performance goals and other restrictions are not attained, the grantee will automatically forfeit their unvested awards of restricted stock to the Company. Compensation expense for restricted stock is based on fair market value at the grant date.

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Compensation expense recorded by the Company in respect of its stock and restricted stock awards to certain employees, officers, directors, and/or service providers for the six months ended June 30, 2025 and June 30, 2024 amounted to $1,197 and $204, respectively.

As of June 30, 2025, there was $496 of total unrecognized compensation cost related to non-vested restricted stock under the Plan. The cost is expected to be recognized over a weighted average period of 0.97 years.

Total Stock-Based Compensation Expense

The total stock-based compensation expense, related to shares, options and warrants granted to employees, directors and service providers was comprised, at each period, as follows:

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Treasury Stock

The Company may periodically repurchase shares of its common stock from employees for the satisfaction of their individual payroll tax withholding upon vesting of restricted stock awards in connection with the Company’s incentive plans. The Company’s repurchases of common stock are recorded at the stock price on the vesting date of the common stock. As of June 30, 2025, the Company repurchased 1,667 shares of its common stock for $116 thousands.